Appeals from the United States District Court for the Eastern District of Wisconsin. No. 78 C 742 -- John W. Reynolds, Judge.
Coffey and Flaum, Circuit Judges, and Campbell, Senior District Judge.*fn**
Appellants, cross-appellees, Henry W. Maier, et al., appeal the judgment of the United States District Court, Eastern District of Wisconsin ordering the City of Milwaukee to compensate Devines, et al., with relocation benefits. Cross-appellants, Devines, et al., appeal the district court's calculation of relocation benefits. We reverse the district court's January 21, 1983 judgment on the issue of compensation under the Fifth Amendment and Wis. Stat. § 32.19, and remand this case on the limited issue of determining if attorney's fees are warranted under 42 U.S.C. § 1988 (Supp. IV 1980).
The material facts of this case were initially set forth by the district court in Devines v. Maier, 494 F. Supp. 992 (E.D. Wis. 1980). The case was appealed, and this court, in reversing and remanding the district court's decision, again set forth the material facts in Devines v. Maier, 665 F.2d 138 (7th Cir. 1981) (" Devines I "). Thus, for purposes of this appeal, arising out of the district court's judgment on remand, we will summarily review only those material facts pertinent to the present decision.
In 1975, the City of Milwaukee applied for and received a Community Development Block Grant from the United States Department of Housing and Urban Development ("HUD"). As the district court noted in its original opinion of August 9, 1980, "the block grant program is a method of distributing federal housing and community development funds to the nation's cities in a manner which allows the participating cities to determine, within certain statutory guidelines, precisely how those funds will be spent." Devines v. Maier, 494 F. Supp. at 993. Between 1975 and 1978, the types of local housing and community development programs eligible for funding under the Community Development Block Grant included programs to improve housing code enforcement in deteriorating neighborhoods, see 42 U.S.C. § 5305(3) (1976), and programs to provide persons displaced by activities funded through the block grant program with relocation payments and assistance, see 42 U.S.C. § 5305(11) (1976). In 1975, Milwaukee received approximately $13,383,000 in Community Development Block Grant funds, and allocated $104,500 to the Intensive Code Enforcement Program ("ICEP") and $206,400 to the Code Enforcement Relocation Program ("CERP"). Pursuant to 42 U.S.C. § 5305, the ICEP was designed to improve housing code enforcement in certain deteriorating areas of Milwaukee and the CERP was designed to provide relocation benefits to tenants of dwellings that the City ordered razed and removed under Wisconsin law.
Following 1975, the City continued to receive yearly block grant funds which were appropriated, in part, to the ICEP and the CERP.*fn1 The funds allocated to the CERP were never "fully utilized" and the excess money was "'reprogrammed' into other block grant programs which came up short of funds in a given year." Id. at 994. According to the district court's original opinion of August 9, 1980, the surplus in CERP funds resulted from the City's restrictive eligibility requirements. Id. A CERP Policy Statement issued by the City revealed that a recipient of CERP funds had to:
"(1) reside within the geographic area designated in the City's block grant application (a low income area which is practically coterminous with the ICEP target area); (2) be a 'family' or an 'individual' which is in lawful occupancy of a rented dwelling; and (3) be served with a 'notice to vacate' because the building has been ordered razed and removed pursuant to Wisconsin law." (emphasis added).
Id. According to these eligibility requirements only tenants lawfully residing in a designated geographic block, whose dwelling was "ordered razed and removed pursuant to Wisconsin law," qualified for CERP benefits. Thus, tenants ordered by the City to temporarily vacate a dwelling in violation of the housing code and determined by the City to be in need of repair were not eligible for CERP benefits. In addition, the district court found, in its original opinion of August 9, 1980, that "for all practical purposes, tenants forced to relocate due to what the City term[ed] 'temporary' code violations [were] put to the same trouble and expense as tenants who [were] forced to vacate a building which [was] scheduled to be razed." Id.
Appellee Devines represents a class of tenants who were ordered to temporarily vacate their dwelling under Milwaukee's ICEP but failed to qualify for CERP benefits. In 1979 appellees brought a class action against the City of Milwaukee, and its mayor, Henry W. Maier, in the United States District Court for the Eastern District of Wisconsin, alleging that the City failed to provide class members with financial compensation upon their being displaced pursuant to the ICEP. The class members claimed, inter alia, that the City's actions violated the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. § 4601, et seq. (1976) ("Uniform Relocation Act"), the Housing and Community Development Act of 1974, 42 U.S.C. § 5301 et seq. (1976) ("Community Development Act"), the Just Compensation Clause of the Fifth Amendment, and Wis. Stat. § 32.19.*fn2
Plaintiffs and defendants filed motions for summary judgment and on August 9, 1980, the district court granted defendants' motion for summary judgment. See Devines v. Maier, 494 F. Supp. 992 (E.D. Wis. 1980). The district court, in its original decision, ruled that government regulations designed to promote public health and safety, such as the City of Milwaukee's housing code enforcement, were not "takings" within the meaning of the Fifth Amendment, and thus the plaintiffs were not entitled to compensation under the Fifth Amendment or Wis. Stat. § 32.19. Id. at 995. The court further ruled that because the City of Milwaukee was not "acquir[ing] the building's use," the plaintiffs failed to qualify as "displaced persons" under the Uniform Relocation Act and, therefore, were not entitled to compensation under the Act. Id. at 996. The court finally ruled that the City's ICEP and CERP "primarily benefit[ted] low and moderate income persons," thereby complying with the federal block grant regulations and precluding the plaintiffs from receiving relocation benefits under the Community Development Act. Id. at 997. Plaintiffs appealed the district court's judgment on the issue of compensation under the Fifth Amendment, Wis. Stat. § 32.19, and the Uniform Relocation Act.
On November 23, 1981, this court affirmed the district court's denial of relocation benefits under the Uniform Relocation Act, holding that the City's order to temporarily vacate uninhabitable dwellings "did not constitute an acquisition under 42 U.S.C. § 4601(6), and that the plaintiffs were not 'displaced persons,'" entitled to benefits under the Act. Devines I, 665 F.2d at 148. The court, however, reversed and remanded on the issue of just compensation under the Fifth Amendment and Wis. Stat. § 32.19. In the majority opinion, this court held that the City's determination that a dwelling was uninhabitable constituted a regulatory taking of plaintiffs' leasehold rights for a public purpose, and thus entitled plaintiffs to just compensation under the Fifth Amendment and Wis. Stat. § 32.19. The court remanded for a determination of what compensation would be just under the Fifth Amendment and Wis. Stat. § 32.19. In a concurring opinion, Judge Fairchild agreed with the reasoning of the majority but noted that, "There is a taking only insofar as there was room for the exercise of discretion. Where the evidence of uninhabitability is so overwhelming that no reasonable person could conclude to the contrary the mere adjudication of that status by the state does not require compensation."*fn3 Id. at 148 (Fairchild, J., concurring).
On remand the district court, pursuant to the court's mandate in Devines I, entered summary judgment for the plaintiffs and ordered the City of Milwaukee to compensate the plaintiffs with a relocation rent differential payment, actual moving expenses, and actual moving related expenses. On July 26, 1983, the district court awarded the plaintiffs $35,000 in attorney's fees as the ...