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South East Chicago Commission v. Department of Housing and Urban Development


decided: October 19, 1973.


Author: Swygert

SWYGERT, Chief Judge.

Plaintiffs, mostly residents of the Kenwood and Hyde Park communities of Chicago, brought this action in the district court to set aside a commitment made by the federal defendants*fn1 and approved by the City of Chicago to provide Lake Village Associates with mortgage insurance and interest subsidization in connection with a low-income housing project which Lake Village planned to erect at the border of Kenwood. In three of four counts,*fn2 the plaintiffs claimed (1) that the commitment was in violation of the Constitution, various statutory provisions, and regulations issued by HUD, (2) that the commitment was finalized in violation of plaintiffs' rights to due process and fair procedure, and (3) that the commitment was sought by Lake Village and accepted by the City in violation of a contract between them which plaintiffs, as third party beneficiaries, had a right to enforce. Both sides moved for summary judgment on the three counts. The defendants prevailed. The district judge found, upon a narrow review of the agency action, that the commitment of FHA and HUD was within the law as a matter of both substance and procedure, and that Lake Village and the City were in compliance with the contract sued upon. This appeal followed.


The City of Chicago invited bids in 1966 for the acquisition and development of certain parcels of land to which it had acquired title a few years earlier pursuant to an urban renewal plan for the Hyde Park and Kenwood areas of Chicago. One of those parcels, designated HR-1 by the City, was bounded on the north by 47th Street, the southern terminus of a census tract adjacent to HR-1 which had a white population of approximately one percent. The census tract in which HR-1 was located had a forty-two percent black population. In 1966, HR-1 and adjoining parcels were the subject of two detailed offers for acquisition and development made by Lake Village and the United Dwelling Foundation of Metropolitan Chicago.

The bids were reviewed by the Department of Urban Renewal of the City of Chicago, which issued a recommendation that both bidders develop the parcels jointly. Lake Village and United Dwelling Foundation, on June 20, 1967, signed an agreement that Lake Village would withdraw its bid and that, upon a conveyance to United Dwelling Foundation of the property, United Dwelling Foundation would reconvey to Lake Village for development a portion of the land which included the northern three acres of HR-1, a parcel subsequently designated HR-1B. The entire tract of land was then conveyed to United Dwelling Foundation pursuant to this agreement by a resolution of the Department of Urban Renewal. At approximately the same time the United Dwelling Foundation entered into a redevelopment agreement with the City of Chicago, to the terms of which Lake Village became bound by a partial assignment from the United Dwelling Foundation.

Some two years later FHA committed itself to fund a project which Lake Village intended to erect on parcel HR-1B. Upon learning of this, certain of the plaintiffs voiced objections based on their fear that federal subsidization -- which necessarily limited the prospective tenancy of the Lake Village project to persons of low income -- would bring a number of poor blacks into the Kenwood area, upsetting the racial balance of that predominantly white area. Defendant Ernest C. Stevens, the local Insuring Office Director for FHA, arranged a conference between Lake Village, the objectors and himself. On July 15, 1971, all parties were allowed to present documentary matter and to argue in support of their respective positions. Stevens refused to transcribe the meeting, to allow cross-examination of witnesses, or to grant the objectors access to certain information known to FHA. At the completion of the conference, and after a meeting of FHA and HUD personnel, Stevens issued a written administrative determination not to rescind the commitment of FHA to Lake Village.

Plaintiffs thereupon filed suit on August 10, 1971, and recorded a lis pendens notice. In the first count of their complaint, they sought to enjoin the federal defendants from issuing to Lake Village Associates, and the City of Chicago from approving, mortgage insurance and interest reduction subsidies under 12 U.S.C. § 1715z-1 in connection with the Lake Village project. In support of their right to contest the use of federal subsidy programs, the plaintiffs cited the Fifth and Fourteenth Amendments, the National Housing Act, the 1964 and 1968 Civil Rights Acts, and regulations of HUD and FHA. In a second count, the plaintiffs set out a challenge to the procedural integrity of the decision by HUD and FHA to provide the Lake Village project with federal assistance. They sought relief by a trial de novo on the merits of their substantive claims and an injunction such as was sought in the first count, or, alternatively, by an order directing the federal defendants to afford them an adequate rehearing. A fourth and final count, founded on the doctrine of pendent jurisdiction, made reference to the redevelopment contract between the City and Lake Village, stated that the plaintiffs were the "intended beneficiaries" thereof, alleged that the contract had been violated by Lake Village and the City by their arrangement of extensive federal funding for the project, and asked for specific performance of the contract by Lake Village and the City.

On motion of defendants, the district judge entered a summary judgment against plaintiffs on all three counts. He found that the federal defendants had employed a proper legal standard and that their decision was based on a "consideration of the relevant factors . . . [with] no clear error of judgment." As to the procedural claim of plaintiffs, he denied it on the ground that "plaintiffs' rights are adequately protected by their opportunity to obtain judicial review," citing Shannon v. Dept. of Housing and Urban Development, 436 F.2d 809 (3d Cir. 1970). He found, lastly, that the contract claim of plaintiffs was contradicted by the very terms of the agreement sued upon.


According to the plaintiffs, the law which dictates national housing policy for the purposes of this case is contained in 24 C.F.R. § 200.700 et seq., 42 U.S.C. § 3608(d) (5), Shannon v. Dept. of Housing and Urban Development, 436 F.2d 809, 820-821 (3d Cir. 1970), Gautreaux v. Romney, 448 F.2d 731 (7th Cir. 1971), and Gautreaux v. Chicago Housing Authority, 296 F. Supp. 907 (N.D. Ill. 1969). The defendants would concur in this list did it not contain a citation to 24 C.F.R. § 200.700 et seq., known to the parties as the Project Selection Criteria. Director Stevens, in particular, paid no heed to the Criteria in weighing the objections of plaintiffs to the FHA commitment. Our first task is to resolve this difference. Loosely speaking, the question is one of retroactivity, for the Criteria, though first published on June 24, 1971, did not become effective until February 7, 1972, long after HUD and FHA had solidified their commitment to Lake Village.

There are few principles of our law more ancient, and none more respected, than the canon which holds that laws are enacted for the future. A legislative pronouncement may not operate on acts which predate its passage. Neither may it serve to divest rights which have come into concrete existence before its date of effect. In our early days, the principle was seen by many judges to be a transcendental limitation upon the power of the legislature. See, e.g., Terrett v. Taylor, 13 U.S. (9 Cranch) 43, 47, 3 L. Ed. 650 (1815) (Story, J.); Calder v. Bull, 3 U.S. (3 Dall.) 386, 1 L. Ed. 648 (1798) (Chase, J.). Modern times have refined this perception, and the principle today stands embodied in a number of constitutional principles: Laws acting ex post facto are void; so, too, are enactments which work to the impairment of contract or the deprivation of property without due process. Lynch v. United States, 292 U.S. 571, 54 S. Ct. 840, 78 L. Ed. 1434 (1934); McCracken v. Hayward, 43 U.S. (2 How.) 608, 11 L. Ed. 397 (1844). See generally, Smead, The Rule Against Retroactive Legislation: A Basic Principle of Jurisprudence, 20 Minn. L. Rev. 775, 789-97 (1936). In construing legislation, then, courts have rigorously adhered to a rule of construction that a law will not be given retroactive effect without a clear mandate to that end from its enacting body, for judges have always been reluctant to decide constitutional questions unless they must. See Union Pacific Ry. Co. v. Laramie Stock Yards Co., 231 U.S. 190, 199-200, 34 S. Ct. 101, 58 L. Ed. 179 (1913). As put in Greene v. United States, 376 U.S. 149, 160, 84 S. Ct. 615, 621, 11 L. Ed. 2d 576 (1964):

The first rule of construction is that legislation must be considered as addressed to the future, not to the past . . . [and] a retrospective operation will not be given to a statute which interferes with antecedent rights . . . unless such be "the unequivocal and inflexible import of the terms, and the manifest intention of the legislature. " 376 U.S. at 160, 84 S. Ct. at 621.

This is a rule of long standing. See, e.g., Claridge Apartments Co. v. Commissioner of Internal Revenue, 323 U.S. 141, 164, 65 S. Ct. 172, 89 L. Ed. 139 (1944); United States v. Magnolia Co., 276 U.S. 160, 162-63, 48 S. Ct. 236, 72 L. Ed. 509 (1928); United States v. Heth, 7 U.S. (3 Cranch) 399, 248, 2 L. Ed. 479 (1806).

In sum, courts are charged with a threefold task when a statute is to be found retroactive. They must determine, first, whether a statute "interferes with antecedent rights."*fn3 If so, retrospective operation becomes a question purely of legislative intent; such must be the "unequivocal and inflexible import of the terms, and the manifest intention of the legislature." Only then may a court rightly reach the constitutional question presented. See Union Pacific Ry. Co. v. Laramie Stock Yards Co., 231 U.S. 190, 199-200, 34 S. Ct. 101, 102, 58 L. Ed. 179 (1913).

Perhaps the earliest example of this analysis in the Supreme Court is contained in the case of United States v. The Schooner Peggy, 5 U.S. (1 Cranch) 103, 2 L. Ed. 49 (1801). There a French ship had been seized as a prize of war by a naval vessel of the United States and condemned thereafter as forfeited to the use of the United States by a final judgment of a circuit court. Before the case was heard in the Supreme Court, the governments of France and the United States made a treaty which provided for the return of French vessels not "definitively" condemned. Chief Justice Marshall, writing for the Court, found that the vessel at suit fell within the terms of the treaty:

The last decree of an inferior court is final, in relation to the power of that court, but not in relation to the property itself, unless it be acquiesced under. The terms used in the treaty seem to apply to the actual condition of the property, and to direct a restoration of that which is still in controversy between the parties. On any other construction, the word definitive would be rendered useless and inoperative. Vessels are seldom, if ever, condemned, but by a final sentence: an interlocutory order for a sale is not a condemnation. 5 U.S. at 68.

The Chief Justice undertook this construction in the face of his recognition that by the treaty, so construed, "the nation [had] given up the vested rights of its citizens." 5 U.S. at 69. He concluded that the divestiture was within the power of the government:

It is true, that in mere private cases between individuals, a court will and ought to struggle hard against a construction which will, by a retrospective operation, affect the rights of parties, but in great national concerns, where individual rights, acquired by war, are sacrificed for national purposes, the contract making the sacrifice ought always to receive a construction conforming to its manifest import; and if the nation has given up the vested rights of its citizens, it is not for the court, but for the government, to consider whether it be a case proper for compensation. 5 U.S. at 69.*fn4

The judgment of condemnation was accordingly set aside.

In disagreement, the plaintiffs read Schooner Peggy to state a general rule, that a court must apply the law in effect at the time it renders its decision, evidently relying on the same interpretation of that case by the Supreme Court in Thorpe v. Housing Authority of the City of Durham, 393 U.S. 268, 281-282, 89 S. Ct. 518, 21 L. Ed. 2d 474 (1969). We need not quibble, however, over the question of whether the general rule or its exceptions -- the existence of which the Court in Thorpe acknowledged -- are such in fact or the reverse, for Thorpe and each of its foundation cases exemplify the traditional mode of analysis. The question in Thorpe was whether a tenant of a federally assisted housing project was entitled to eviction proceedings consistent with a HUD circular which first came into effect while a challenge to her eviction was pending in the Supreme Court. The Court went no farther than the first inquiry, for it found:

Requiring the Authority to apply the circular before evicting petitioner not only does not infringe upon any of its rights, but also does not even constitute an imposition. The Authority admitted during oral argument that it has already begun complying with the circular. It refuses to apply it to petitioner simply because it decided to evict her before the circular was issued. Since petitioner has not yet vacated, we fail to see the significance of this distinction. 393 U.S. at 283, 89 S. Ct. at 527.

To the same effect are Vandenbark v. Owens-Illinois Glass Co., 311 U.S. 538, 61 S. Ct. 347, 85 L. Ed. 327 (1941), and Carpenter v. Wabash Ry. Co., 309 U.S. 23, 60 S. Ct. 416, 84 L. Ed. 558 (1940), each of which involved a situation where retroactive application of a particular law involved, at most, a minimal disturbance of antecedent rights.*fn5 See also Ziffrin, Inc. v. United States, 318 U.S. 73, 78, 63 S. Ct. 465, 87 L. Ed. 621 (1943); Jones v. Lynn, 477 F.2d 885 (1st Cir. 1973).*fn6

A somewhat different case is United States v. Chambers, 291 U.S. 217, 54 S. Ct. 434, 78 L. Ed. 763 (1934), where the government had obtained an indictment under a law which subsequently became invalid upon repeal of the Eighteenth Amendment. That the government was not allowed to continue with its prosecution is consistent with traditional principles. A curative law -- the Twenty-First Amendment -- was involved, one which legalized conduct which had theretofore been illegal. See Smead, The Rule Against Retroactive Legislation: A Basic Principle of Jurisprudence, 20 Minn. L. Rev. 775, 785 n. 36 (1936). Chambers is unique, too, in that a criminal conviction was at stake; had the Court reached the opposite result, Chambers would have been punished for conduct which society as a whole no longer considered reprehensible, all for the sake of a vested indictment.

The instant case is much like Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 91 S. Ct. 814, 28 L. Ed. 2d 136 (1971), yet another case conforming to the analysis of Schooner Peggy. There the Court was presented with a regulation which required the Secretary of Transportation to make formal findings when he approved the use of parkland for highway construction pursuant to 23 U.S.C. § 138 and 49 U.S.C. § 1653(f). Partially at issue was the applicability of this regulation to an approval by the Secretary which had taken place before the regulation was in effect. The petitioners conceded that the regulation "was not intended to have retrospective effect," 401 U.S. at 418, 91 S. Ct. at 824, but argued that Thorpe required an opposite conclusion. Finding that an interference with antecedent rights would occur, the Court limited the regulation to prospective effect:

While we do not question that DOT Order 5610.1 constitutes the law in effect at the time of our decision, we do not believe that Thorpe compels us to remand for the Secretary to make formal findings. Here, unlike the situation in Thorpe, there has been a change in circumstances -- additional right-of-way has been cleared and the 26-acre right-of-way inside Overton Park has been purchased by the State. Moreover, there is an administrative record that allows the full, prompt review of the Secretary's action that is sought without additional delay which would result from having a remand to the Secretary. 401 U.S. at 419, 91 S. Ct. at 825.*fn7

Having Overton Park and its predecessors before us, and mindful of the principles they represent, we turn our attention to the question before us.

There can be little doubt that antecedent rights would be disturbed by a retroactive application of the Criteria. On August 11, 1971, HUD became contractually obliged to provide Lake Village with mortgage insurance and interest reduction payments. Lake Village has since erected a building on the faith of that obligation. Plaintiffs do not suggest that Lake Village would not suffer grave harm were HUD to rescind its obligations; they argue, instead, that Lake Village took its chances by electing to proceed with construction in the face of their appeal of the HUD commitment to the district court and their filing of a lis pendens notice prior to the execution of the contracts at issue. Neither the filing of suit nor a lis pendens notice, however, requires a party being sued to stand in his tracks. The preservation of the status quo pending a final judgment is the function of a preliminary injunction. Having failed to obtain this, the plaintiffs cannot complain of activity by Lake Village after this suit was filed.*fn8

As in Overton Park, that activity has led to a change in circumstances; Lake Village will feel far more than an "imposition" in the Thorpe sense if HUD must rescind its commitment. It follows that the Criteria have no pertinence to this case, for the regulation holds not a hint that its authors intended for it a retroactive effect.*fn9 Thus, we need not reach the question of whether rights have vested in Lake Village under the due process clause.


Plaintiffs next contend that the HUD commitment was illegal notwithstanding the inapplicability of the Criteria. Illegality, they say, derives not only from a clear error of judgment on the part of Director Stevens in weighing and analyzing the facts before him, but also from a misapprehension on his part of the governing legal standard.

In support of the last contention, plaintiffs point to the following passage of the administrative determination:

There exists a compelling need to provide low and moderate income housing for the substantial number of negroes who were displaced by the Renewal Project, as well as other low and moderate income people of the City of Chicago. The need for such housing far outweighs the speculative concern of whether the Redevelopers of Lake Village will be completely successful in their efforts to achieve the racial and economic mix sought for the Project.

If we read their argument correctly,*fn10 plaintiffs assert that Stevens evidenced in this passage a general conviction that the need for public housing was a factor far more important to its placement than was the possibility of increased racial segregation. We cannot concur. What Stevens did was to weigh the need for the project against the possibility of a largely black tenancy; having concluded that the latter was reasonably improbable, he struck the balance in favor of need.*fn11 And if plaintiffs mean to contend that the need for public housing at a particular location may never be weighed against the possibility that segregation will be continued or exacerbated by its erection, they are contradicted by their own authority:

We [are not] suggesting that desegregation of housing is the only goal of the national housing policy. There will be instances where a pressing case may be made for the rebuilding of a racial ghetto. We hold only that the agency's judgment must be an informed one; one which weighs the alternatives and finds that the need for physical rehabilitation or additional minority housing at the site in question clearly outweighs the disadvantage of increasing or perpetuating racial concentration. Shannon v. Dept. of Housing and Urban Development, 436 F.2d 809, 822 (3d Cir. 1970).

Certainly neither Gautreaux v. Romney, 448 F.2d 731 (7th Cir. 1971), nor Gautreaux v. Chicago Housing Authority, 296 F. Supp. 907 (N.D. Ill. 1969), stands for the proposition that public housing may not be erected in or at the border of a racial ghetto. Indeed, when the latter case came before the district court for a ruling on remedy, it was specifically held that ghetto placement was permissible provided that public housing in white areas was likewise erected. Gautreaux v. Chicago Housing Authority, 304 F. Supp. 736 (N.D. Ill. 1969). See generally, Note, Public Housing and Urban Policy; Gautreaux v. Chicago Housing Authority, 79 Yale L. Rev. 712, 717-18 and sources at 718 nn. 16, 17 (1970).

We turn to a review of the administrative factual findings. Our inquiry must be a narrow one. 5 U.S.C. § 706(2) (A). As was stated in Overton Park :

Scrutiny of the facts does not end . . . with the determination that the Secretary has acted within the scope of his statutory authority. Section 706(2) (A) requires a finding that the actual choice made was not "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2) (A) (1964 ed., Supp. V). To make this finding the court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. . . . Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency. 401 U.S. at 416, 91 S. Ct. at 824.

We are not charged, moreover, with determining whether the administrative findings are supported by substantial evidence. Just the opposite is the case. Were we to require that substantial evidence support Stevens in his determination, we would overstep the careful mandate of the Administrative Procedure Act. Compare 5 U.S.C. § 706(2) (A) with 5 U.S.C. § 706(2) (E).

The decision by the Director to maintain his commitment to Lake Village was based upon three separate conclusions. He found, first, a substantial probability that the Lake Village project would be adequately integrated when erected and rented. Assuming that the opposite would come to pass, Stevens concluded that "no significant impact upon the stability or racial concentration of Hyde Park-Kenwood" would result. He found, finally that the project was greatly needed by low income residents of the area.*fn12

Plaintiffs attack the decision on all fronts. It is said that the facts do not support Stevens in any of his conclusions, particularly the one regarding the probability of an integrated project. In support, the plaintiffs state that Stevens "totally ignored" certain facts, most notably these:

No housing project subsidized under Section 221(d) (3) of the National Housing Act (the predecessor to Section 236) in the vicinity of Lake Village is less than 90% black in occupancy, including one project (Greenwood Park) built by the defendant LVA and managed by the defendant Draper & Kramer, as well as two others managed by Draper & Kramer. Prior to the rent-up of Greenwood Park, defendant LVA stated that the racial balance achieved at that project would have a lot to do with the racial balance of Lake Village. . . . By the time of Stevens' "Administrative Determination," however, Greenwood Park was substantially all-black in occupancy.

Like the Lake Village project, Greenwood Park is located on the south side of 47th Street but a few blocks west, and was developed by the same defendant Lake Village Associates, managed by the same defendant Draper & Kramer, and is subsidized as a moderate income development by these same federal defendants. Greenwood Park has a 91% black occupancy; although located in a census tract (3905) that is only 72% black.

Stevens' reliance in the "Administrative Determination" on the design emphasis of the project on efficiency and one bedroom units "calculated to attract elderly and young married couples" is totally undetermined by his failure to consider that the presence of 18 efficiency apartments and 151 one bedroom apartments in the completed Section 221(d) (3) projects in the Lake Village area has not prevented those developments from achieving an overall black occupancy of at least 95%. App. Br. at 18, 19.

We cannot agree that these facts were overlooked.*fn13 Stevens was well aware of nearby failures at integration, as is apparent from a memorandum which he received from the Economic and Market Analysis Division of HUD on July 23, 1971. That report detailed previous FHA occupancy experience and made a number of suggestions for enhancing the possibility of an integrated Lake Village project. The great majority of these ideas were incorporated into Stevens' final ruling:

In response to a request by the Chairman of the Conference for compromise proposals, the representatives of the Redevelopers have volunteered to accept a waiver by the Government of the Section 236 income limitations for any number of units which HUD in its discretion should determine. Since such offer will enhance the probability of a racial mix in the tenancy of the Project, it is hereby determined that the Section 236 income limitations be waived for not more than twenty percent of the Project units developed with Federal assistance.

In order to further enhance the probability of said racial mix, it is hereby further determined to permit the utilization of exception income limits for all two-bedroom units in the Project Tower developed with Federal assistance.

The Redevelopers of the Project are directed to submit to the Chicago FHA Insuring Office, prior to initial endorsement of the Mortgage Note, their written agreement to stage the development of the low-rise Project units (18 three-bedroom units) in order to delay their availability until the high rise Project units have been rented.

He also required this of Lake Village:

The Redevelopers shall submit for HUD approval within twenty days from the date hereof, a detailed plan of tenant selection procedures devised to attain the maximum possible racial mix in the occupancy of the Project, in furtherance and in implementation of the tenant selection policy set forth in Volume I of its Memorandum to the undersigned.

That memorandum set out an extensive, though somewhat general, program to "attract applicants of all races" through promotional activities, advertising, and tenant recruitment. It thus appears that Stevens did considerably more than passively accept the estimate by Lake Village of eventual integration; aware of the problems and failures of the past, he sought to improve thereon with a fresh approach. That his efforts bore some risk of failure is not, we think, reason enough to overturn them as a product of a clear error of judgment.*fn14 It follows that the concern of plaintiffs for a segregated project was, on this record, arguably speculative and that Stevens did not err in looking to the issue of need for a counterweight.

Plaintiffs attack the finding of need on the ground that all of the persons displaced in the original urban renewal effort had been relocated as of December 31, 1970. Stevens, however, did not base his assessment of need solely on the urban renewal displacement nor was he willing to accept as adequate the relocation sites:

The black population of Chicago is increasing in both percentage and absolute terms. If low and moderate income minorities are displaced by urban renewal and not permitted to live in clearance areas because of high rents and white areas are closed to them -- they are forced only to settle in other areas of high black concentration where the housing stock is either substandard or marginal. Such areas then become over-crowded, the conditions of slum and blight emerge, and the urban renewal cycle begins anew.

As with this finding of probable integration, we see no clear error on the part of Stevens. The administrative decision stands on these two grounds and we need not reach the question of whether Stevens erred in finding that an all-black project would have, at worst, a de minimis effect on the racial balance of Hyde Park-Kenwood.


Plaintiffs cite Goldberg v. Kelly, 397 U.S. 254, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970), as authority for their complaint that they were denied due process in their appearance before HUD. Director Stevens, they claim, was not an impartial decisionmaker and erred in not allowing their cross-examination of witnesses.*fn15 They must do more than cite Goldberg, however, to prevail on their contention, for Goldberg was a very different case from this. "Due process is flexible and calls for such procedural protections as the particular situation demands. . . . Its flexibility . . . is a recognition that not all situations calling for procedural safeguards call for the same kind of procedure." Morrissey v. Brewer, 408 U.S. 471, 481, 92 S. Ct. 2593, 2600, 33 L. Ed. 2d 484 (1972).

It is curious, indeed, to find the plaintiffs arguing for advanced procedural protections in a context where their right even to a hearing is open to question. Shannon had this to say:

Plaintiffs urge that some sort of adversary hearing or at least an opportunity for residents in the area to be heard should be required. They rely on the district court decision in Powelton Civic Home Owners Ass'n v. HUD, [284 F. Supp. 809 (E.D. Pa. 1968)]. Without suggesting how this court would rule on the Powelton situation, we think a case involving the adequacy of relocation procedures which are dealt with specifically in the Housing Act of 1949, 42 U.S.C. § 1455(c), is distinguishable from the more general problem of racial concentration presented here. In this case the judgment to be made by HUD is quasi-legislative. So long as it adopts some adequate institutional means for marshaling the appropriate legislative facts the rights of affected residents will be adequately protected, we think, by the opportunity to obtain judicial review pursuant to the Administrative Procedure Act after the agency decision. For deliberately discriminatory action by a LPA there are other adversary type remedies available. 436 F.2d at 821.

Perhaps in recognition of this, plaintiffs conceded at oral argument that no authority bore directly on their claim. They argued, nevertheless, that we might make a ruling limited to the parties and facts of this case. Taking this approach, we decline their invitation.

In their quest for a right of cross-examination, plaintiffs suggest that the administrative determination involved the resolution of "complicated and disputed questions of fact -- whether the Section 236 subsidy for Lake Village would lead to an increase in racial concentration." App. Br. at 33. It is apparent, however, that Stevens accepted most, if not all, of the facts which plaintiffs offered and which they say he ignored. The real question is whether the measures which Stevens took to prevent a repetition of the failures at similar, nearby projects were adequate to serve that end. Plaintiffs raise no objections to the commitment modifications -- other than to term them, without support, "woefully inadequate" -- and we must conclude that plaintiffs had little need for cross-examination. The modifications to the HUD commitment are much like the CAB regulation in American Airlines, Inc. v. Civil Aeronautics Board, 123 U.S. App. D.C. 310, 359 F.2d 624 (1966), and the words of the court of appeals in that case have bearing here:

The particular point most controverted by petitioners is the effect of the CAB regulation on their business. The issue involves what [one scholar] calls "legislative" rather than "adjudicative" facts. It is the kind of issue involving expert opinions and forecasts, which cannot be decisively resolved by testimony. It is the kind of issue where a month of experience will be worth a year of hearings. 359 F.2d at 633.

See also Hahn v. Gottlieb, 430 F.2d 1243, 1246-1249 (1st Cir. 1970); Moore-McCormack Lines, Inc. v. United States, 188 Ct. Cl. 644, 413 F.2d 568, 590 (1969).

With respect to plaintiffs' claim of partiality to Lake Village by Stevens, we find that the record does not bear them out. In response to a letter of objection to the HUD commitment by the plaintiff SECC, Stevens stated on May 3, 1971:

Inasmuch as we have already issued a commitment on subject proposal after a great deal of expense by the proponents and since it is adjudged as needed and feasible by this office, we cannot at this time morally rescind this commitment.

A few days later, he made what plaintiffs concede to be a restatement of this position: "We cannot arbitrarily rescind a commitment which has been issued" (emphasis added). An opposition to administrative arbitrariness is hardly a position which evidences prejudice in favor of Lake Village. As his letter of May 28, 1971 reveals, Stevens was open to plaintiffs' criticism.*fn16 Plaintiffs would attach significance, lastly, to testimony that Stevens came into a meeting of HUD personnel "with his decision and with his mind made up." This is scant evidence of prejudgment, however, for the HUD meeting took place after plaintiffs had conferred with HUD. Stevens can hardly be faulted for having reached a conclusion on the basis of what came to light at and pursuant to that conference.


Our last task is to assess plaintiffs' contention that their contractual claim against the City and Lake Village was deserving of a summary judgment in their favor, or, at least, of a trial on a genuine issue of material fact.

Lake Village became obligated to the City by an assignment of a redevelopment contract between the United Dwelling Foundation and the City. In return for certain parcels of land, including HR-1B, to be conveyed directly to Lake Village by the City upon payment of the purchase price, Lake Village agreed "to assume all of the obligations of the Redevelopers [United Dwelling Foundation]" under the redevelopment contract and "to be subject to all the conditions and restrictions to which the Redevelopers are subject thereunder." One of those conditions was this:

The terms and conditions of the Offer, the Instructions to Bidders, and Department of Urban Renewal Resolution No. 67 -- DUR-85 are made a part of this Contract and incorporated by reference thereto.

It is the contention of plaintiffs that the urban renewal resolution bound Lake Village to comply with the original offer it made for development of the entire site. This argument is without merit.

The resolution states in part:

Whereas, the [United Dwelling Foundation and Lake Village] have entered into a Memorandum Agreement in regard to their proposals to overcome the incompatible features of the same; and

Whereas, the Department of Urban Renewal has reviewed said Memorandum Agreement and finds that said Agreement will effect a satisfactory solution; and

Whereas, in consideration of the terms of the Memorandum Agreement between said offerors, [Lake Village] has withdrawn its offer to purchase said parcels:

The approval conferred by this Resolution is further contingent upon the land contract for sale of said . . . Parcels between the City of Chicago and [United Dwelling Foundation] providing that [United Dwelling Foundation] convey a part of parcel HR-1 and parcels LR-1 through LR-3 to [Lake Village] for redevelopment in accordance with their proposal for the price paid for same by [United Dwelling Foundation] and that said [Lake Village] purchase and redevelop said parcels under the same conditions and covenants required by the City under its land contract with [United Dwelling Foundation] (emphasis added).

Plaintiffs assert -- despite the recitation that Lake Village "has withdrawn its offer" -- that the word "proposal" in the italicized phrase refers to the original Lake Village offer.*fn17 Lake Village and the City contend that "proposal" refers to the memorandum agreement between Lake Village and United Dwelling Foundation to which reference is made throughout the urban renewal resolution, an agreement which makes no reference to the original offer of Lake Village. We agree with the defendants, for the opposing interpretation is inconsistent with the use in the resolution of the pronoun "their" to modify "proposal." Where Lake Village is referred to by a pronoun elsewhere in the resolution, the singular form is used. Thus, the pronoun "their" must refer to Lake Village and one or more additional parties. This would make no sense if "proposal" was meant as a reference to the original Lake Village offer, for Lake Village alone was a party to that.

Plaintiffs suggest that this contractual arrangement left Lake Village free of the "elaborate controls [which the City] had previously established on ultimate development of the property." Reply Br. at 24. The short answer to this is contained in the redevelopment contract, where numerous provisions granting the City control over construction by Lake Village are set out, as well as in the urban renewal resolution itself, where Lake Village is required to "redevelop . . . under the same conditions and covenants required by the City under its land contract" with United Dwelling Foundation.

The summary judgment entered by the district court is affirmed.



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