The opinion of the court was delivered by: Crowley, District Judge.
MEMORANDUM OPINION AND ORDER
This action involves allegations of actual and threatened
systematic racial transition of specific residential
neighborhoods in Marquette Park, Chicago, allegedly caused by the
heavy use of government funding. Count I claims that the
defendant, Veterans Administration (VA), violated its duties
under § 808(d) of the Fair Housing Act, 42 U.S.C. § 3608(c), in
the manner in which it administered its VA home mortgage program
in Marquette Park. Count II, brought under §§ 810(d) and 812 of
the Fair Housing Act, 42 U.S.C. § 3610(d), 3612, alleges
violations of the Act in that the defendant knowingly
participated in, facilitated, and condoned unlawful steering,
solicitation, and appraisals in Marquette Park, 42 U.S.C. § 804,
805, 806, 817. Jurisdiction is founded upon 42 U.S.C. § 3608(c),
3610(d), and 3612.
Defendant has moved to dismiss both Counts for lack of
standing, Fed.R.Civ.P. 12(b)(1), and for failure to state a claim
upon which relief may be granted, Fed.R.Civ.P. 12(b)(6). Although
defendant contends that Counts I and II present identical claims,
the Counts clearly state separate and independent causes of
action and, accordingly, will be considered separately.
Plaintiffs assert that the recent Supreme Court case of
Gladstone, Realtors v. Bellwood, 441 U.S. 91, 99 S.Ct. 1601, 60
L.Ed.2d 66 (1979) is dispositive of the standing issues with
respect to Count II. In Bellwood, the Court extended its holding
in Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205, 93
S.Ct. 364, 34 L.Ed.2d 415 (1972) to provide standing under § 812
of the Fair Housing Act, 42 U.S.C. § 3612, to residents of a
particular neighborhood who had been deprived of the "social and
professional benefits of living in an integrated society" and who
complained of economic injuries because of the diminution in
property value of their homes. Gladstone, Realtors v. Bellwood,
441 U.S. 91, 99 S.Ct. 1601, 60 L.Ed.2d 66 (1979).
Were this the extent of the Bellwood holding, plaintiffs'
standing to assert Count II would be undeniable. The Court in
Bellwood emphasized, however, that in no event may a plaintiff
proceed in federal court without first satisfying the Article III
requirements of a "`distinct and palpable injury to himself' that
is likely to be redressed if the requested relief is granted."
Gladstone, Realtors v. Bellwood, 441 U.S. 91, 99 S.Ct. 1601,
1608, 60 L.Ed.2d 66 (1979), quoting, Simon v. Eastern Kentucky
Welfare Rights Organization, 426 U.S. 26, 38, 96 S.Ct. 1917,
1924, 48 L.Ed.2d 450 (1976).
There is no significant difference between the allegations in
Count II and those which were held to satisfy the Article III
requirements in Bellwood. Like the complaint in Bellwood, Count
II was brought under § 812 of the Fair Housing Act, 42 U.S.C. § 3612.
Count II avers that the plaintiffs are both direct and
indirect victims of specific discriminatory acts of illegal
solicitation and racial steering. The complaint in Bellwood
similarly alleged indirect injury due to unlawful racial
steering. Count II's allegation of the deprivation of the social
and economic benefits of living in a racially and economically
integrated, residential community is tantamount to the allegation
in Bellwood that the plaintiffs had been "deprived of the social
and professional benefits of living in an integrated society,"
Gladstone, Realtors v. Bellwood, 441 U.S. 91, 99 S.Ct. 1601,
1603-1604, 60 L.Ed.2d 66 (1979). Finally, the complaint in
Bellwood and Count II both allege economic injury due to the
diminution in property value of the plaintiffs' homes.
Sections of statutes should not be read in isolation and must
be considered in their relation to the statute as a whole. In
particular, the Court must consider § 1804(d) which provides
[S]ubject to notice and opportunity for a hearing,
whenever the Administrator finds with respect to
guaranteed or insured loans that any lender has
failed to exercise proper credit judgment or has
willingly or negligently engaged in practices
otherwise detrimental to the interest of veterans or
of the government, the Administrator may refuse
either temporarily or permanently to guarantee or
insure loans made by such lender and may bar such
lender or holder from acquiring loans guaranteed or
insured under this chapter. . . . The Administrator
may also refuse either temporarily or permanently to
guarantee or insure any loans made by a lender or
holder refused the benefits of participation under
the National Housing Act pursuant to a determination
of the Secretary of the Department of Housing and
Urban Development. 38 U.S.C. § 1804(d).
Section 1804(d) belies the rigidity which defendant would read
into the statutory duty of the Veterans Administration. Because
the VA may consider whether a prospective applicant or lender has
"engaged in practices . . . detrimental to the interests of
veterans or of the government," it is responsible as an
"executive agency" to the requirements of § 808(d) of the Fair
Housing Act, 42 U.S.C. § 3608(c). Finally, the requests for
declaratory relief and for such further relief as the court may
deem appropriate are permissible remedies, 42 U.S.C. § 2201-02.
Consequently, plaintiffs have standing under Count II.
Plaintiffs concede that Count I, brought under 42 U.S.C. § 3608(c),
is not subject to the liberal standing provisions of
42 U.S.C. § 3610(d) and 3612, and, therefore, Bellwood does not
strictly apply. Bellwood did reaffirm other Supreme Court cases
which have held that the issue of standing involves "both
constitutional limitations on federal court jurisdiction and
prudential limitations on its exercise." Gladstone, Realtors v.
Bellwood, 441 U.S. 91, 99 S.Ct. 1601, 1607-1608, 60 L.Ed.2d 66
(1979); Warth v. Seldin, 422 U.S. 490, 498 (1975); Trafficante v.
Metropolitan Life Ins. Co., 409 U.S. 205, 93 S.Ct. 364, 34
L.Ed.2d 415 (1972). The Court explained that the constitutional
limitations evolved from Article III's "case and controversy"
clause, while the prudential limitations are "principals by which
the judiciary seeks to avoid deciding questions of broad social
import where no individual rights would be vindicated and to
limit access to the federal courts to those litigants best suited
to assert a particular claim." Gladstone, Realtors v. Bellwood,
441 U.S. 91, 99 S.Ct. 1601, 1608, 60 L.Ed.2d 66 (1979).
The Bellwood Court recognized three basic prudential
limitations to the exercise of federal court jurisdiction.
Gladstone, Realtors v. Bellwood, 441 U.S. 91, 99 S.Ct. 1601, 1608
& n. 6, 60 L.Ed.2d 66 (1979). First, the litigant must assert an
injury which is peculiar to himself or to a distinct group to
which he is a party, Warth v. Seldin, 422 U.S. 490, 499, 95 S.Ct.
2197, 2205, 45 L.Ed.2d 343 (1975). Second, the litigant must
assert his own interests rather than those of a third party,
Arlington Heights v. Metropolitan Housing Development Corp.,
429 U.S. 252, 263, 97 S.Ct. 555, 562, 50 L.Ed.2d 450 (1977). Third,
the interests of the plaintiff must be arguably within the zone
of interests sought to be protected under the statute. Simon v.
Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 39 n.
19, 96 S.Ct. 1917, 1925, 48 L.Ed.2d 450 (1976); Association of
Data Processing Services v. Camp, 397 U.S. 150, 153, 90 S.Ct.
827, 829, 25 L.Ed.2d 184 (1969).
Plaintiffs have satisfied the first criterion by asserting
their own particular interests in living in a balanced,
interracial community, and in not having the property values of
their homes diminished. Their
common concern stems from their residence within a particular
neighborhood. As such, the plaintiffs cannot be compared to the
two Bellwood plaintiffs who were found not to have standing
because they resided outside of the targeted neighborhood,
Gladstone, Realtors v. Bellwood, 441 U.S. 91, 99 S.Ct. 1601, 1614
n. 25, 1616, 60 L.Ed.2d 66 (1979).
Having asserted their own legal interests, the plaintiffs have
satisfied the second requirement and have not alleged simply an
"abstract concern about a problem of general interest." Arlington
Heights v. Metropolitan Housing Development Corp., 429 U.S. 254,
263, 97 S.Ct. 555, 562, 50 L.Ed.2d 450 (1977). The plaintiffs'
standing is not affected because other area residents who have
not been joined in the lawsuit suffer similar injuries. Courts
have long recognized that "standing is not to be denied ...