Petition — Second Avenue Ltd. Dividend Housing Ass'n v. Hills

Supreme Court brief1977

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Buy fhe Goult. U. 4,

FiLED

IN THE 12 1976

NOV

SUPREME COURT OF THE UNITED STATES

OCTOPER TERM, 1976 | MICHAEL RODAK, JR, CLERK

76-670 *

No.

SECOND AVENUE LIMITED DIVIDEND

HOUSING ASSOCIATION, et al,

PETITIONERS,

Vv.

CARLA ANDERSON HILLS, Secretary

Department of Housing and Urban

Development, et al,

RESPONDENTS.

FETITION FOR A WRIT OF

CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE

SIXTH CIRCUIT

Frederick A. Patmon

Stanley R. Kirk

PATMON, YOUNG & KIRK

PROFESSIONAL CORPORATION

2429 Cadillac Tower

Detroit, Michigan 48226

(313) 965-2675

Attorneys for Petitioners

INDEX

Opinions Below

Jurisdiction

Questions Presented

Constitutional Provisions,

Statutes, Federal Rules and

Regulations Involved

Statement of the Case

Reasons for Granting the

Writ

Conclusion

Appendix

CPAP. OR

CASES:

Advisory Opinion re

Constitutionality

P.A. 1966 No. 346, 380

Mich. 554 (1968)

Alabama Power Company v.

Alabama Elec. Coop.

394 F.2d 672, 675

(Sth Cir. 1968)

Association of Data

Processing Service

Organization v. Camp

97 U.S. 150, 90 S.Ct.

27 (1970)

Page

53, 54

44, 52

33, 34,

35, 42

Azar v. Conley

456 F.2d 1382

(6th Cir. 1972)

Bailey v. Patterson

369 U.S. 31 (1962)

Bankers Life & Casualty Co v.

Larson

257 F.2d 377 (Sth Cir.

19 )

| 678, 66 S.Ct.

46)

Bolling v. Sharpe

347 U.S. 497 (1954)

Bivens vy. Six Unknown Agents

of Federal Bureau of

sawn v. Strickler

L22 F.2a@ 1000 (1970)

1 v. Board of Trustees

“4neinnati Electronics

‘orporation v. Kleppe

50% F.2d 1080 (1975)

41, 57

us,

50,

Conley v. Gibson 31, 38, 48, 55,

355 U.S. 41 (1957) 57, 60, 61

Continental Ore v. Union

Carbine and Carbide

370 U.S. 690 (1962) 52, 53

Cooper v. Aaron

358 U.S. 1 (1958) 2 65

Davis v. Estelle

529 F.2d 437

(Sth Cir. 1976) 62

Gardner v. Toilet Goods

Ass'n

387 U.S. 167 (1967) 56

Garrett v. City of

Hamtramck

503 F.2d 1296

(6th Cir. 1974) 34, 35

Gautreaux v. Romney

448 F.2d 731 23, 29,

(7th Cir. 1971) 40, 42

Gautreaux v. Chicago

Housing Authority

503 F.2d 930 23, 34,

(7th Cir. 1974) 42

Gautreaux v. Romney

452 F.2d 124 23, 34,

(7th Cir. 1972) ho

Goldfarb v. Virginia State

Bar

421 U.S. 773, 95 S.Ct.

204 (1975) 45, 50

Griswold v. Connecticut

381 U.S. 479 (1965) 64

114

Harman v. Valley National

Bank

339 F.2d 564

(9th Cir. 1964) 53

Hills v. Gautreaux 26. #7,

U.S. , 28, 29,

te L.x. 44a (O76) 33, 40

Hosvital Building Co v.

Trustees of the Rex Hospital 38, 47

U.S. > 49, 55

Ta TLW. 4682 (May 28, 1976) 61

Hudgens v. iv¥.L.R.5

U.S. P

96 S.Ct. 1029 (1976) 62

Jordan v. Gilligan

500 F.2d 701

(6th Cir.1974) 62

Indenendent Taxicab Operators’

Ass'n v. Yellow Cab Co

278 F.Supp. 979

(N.D. Cal. 1968) 53

L'Orange v. Medical Protective

company

394 F.2d 57 (6th (ir. 1968) 57

Luearel v. MeNair

853 F.2d 836

(6th Cir. 1971) 31, 57

Mahaley v. Cuyahoga

Metropolitan Housing

Authority

500 F.2d 1087

(6th Cir. 1974) 23

Malamud v. Sinclair O11

Corporation

f2. F.2d 1142

(Sth Cir. 1975) 33, 42

N.A.A.C.P. v. Alabama

357 U.S. 449 (1958) 35, 37

Upinion of Attorney General

cf Georgia

1946-1949 Trade Cases

(June 14, 1949) 52

Parker v. “rown 2, 44,

276.8. 741 4€, 50

iJoree v. Society of

Sisters

268 U E1lG (1925) 38

shannon v. i!UD

46 F.2d 809

(3rd cir. 1970) 23, 29

Simon v. Eastern Kentucky

Welfare Rights Organization

Uede ’ 43, 55;

a L.wW. 5213 Culy I, 1976) 60

Singleton v. Wulff 34, 35,

U.S. ’ 36,

Uy L.W. 5213 (fully IT, 1976) 38, 42

stanton v. Stariton

U.S. me .

95 S.Ct. 1371 (1975) 32, 33

irafficante v. Metropolitan

Life Insurance Co 34, 35,

409 U.S. 205 (1972) 42

Tripler v. E. I. duPont

deNemours and Co.

443 F.2d 125

(6th Cir. 1971) 40

ee a hada | | a a ae

mp Carbide and Carbon v. ‘ e Title VIII of the Civil |

sley

(10th Cir. 1961) 51 5 U.S.C. 702 4. 15

. eve +

United States v. Hawes

529 F.2d 437 | 12 U.S.C. 1702 4, 45

(5th Cir. 1976) 62 15 U.S.C. 1 16

United States v. Nat'l

azen of Securities Dealers 28 U.S.C. 1254(1) e

122 U.S. 694 49 28 U.S.C. 1331, 1343(3) 4, 15,

United Staves v. OClivares- and (4) e7, 29

Vega

(2a Cir. 1974) 62 42 U.S.C. 1981, 1982, 4, 16,

United Stetes v. Sisal 1983, 1985 25

Sales Corp. |

Wade v. Union Carbine and av , 42 U.S.C. 3605, 3612 4, 45

vur ide

371 3.5. G01 (19€2) 31 ‘ ‘ MISCELLANEOUS :

Warth v. Seldin 24, 25, 30, 31

k22 U.S. 490, 95 S.Ct. 33, ho; a2, Fed.R.Civ.P. 12 16

> f

2197 (1975) 35 -~* Fed.R.Civ.P. 12(b)(2) 4, 16,,

Yiamouyiannis v. Chemical , 21, 56

ee oan ee Fed.R.Civ.P. 12(b)(6) 4, 16,

” mac 21, 56

(6th Cir. 1975) 28 el,

Fed.R.Civ.P. 56 40

CONSTITUTION and STATUTES: Ped. R.Civ.P. 65 16. 17

eile oie >

Fifth, Ninth, Thirteenth and

Pourteenth Amendments to the = or? Sa 62

United States Constitution Pactice, U.

Articles I and II 3, 15, 27

vi vii

Wright, Miller and Cooper,

PeAeral Practice and Procedure:

Jurisdiction

para. 3531

I.ving Younger

62 4.B.A.J. 632 (1976)

" Arveh Neder and Burt

Neu>orae

July/August 1976 Juris

Doc zor

viii

PETITION FOR A WRIT OF

CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE

SIXTH CIRCUIT

Petitioners pray that a Writ of

Certiorari issue to review the judg-

ments of the United States Cours of

Appeals for the Sixth Circuit entered

in this above case.

OPINIONS BELOW

The opinion of the District Court

(App. A, infra, pp. 1-46 ) is unreported.

The opinion of the Court of Appeals for

the Sixth Circuit (App. B, infra, p.47)

is unreported and its decision denying

rehearing (App. C, infra, p. 49 ) is

unreported. |

JURISDICTION

The judgment of the United States

Court of Appeals for the Sixth Circuit

was made andi entered on April 8, 1976,

and a timely petition for rehearing en

banc was denied on May 25, 1976. The

jurisdiction o” this Court is invoked

under 28 U.S.C. 1254(1).

QUESTIONS PRESENTED

I. Whether Petitioners are en-

titled to rave the District Court

decide the merits of the disputes of

the particular issues alleged in their

First Amended Complaint?

4 @ Whether the District Judge's

determinations that the Court lacked

jurisdiction and that the First amend-

ed Complaint failed to state causes of

action are fatally incompatible?

III. Whether the District Judge's

determination that Count XII of the

First Amended Complaint failed to .

state causes of action, on the author-

*+» of Parker v. Brown, 317 U.S. 341,

that the "governmental agencies and

officers do not fall within the pur-

view of the anti-trust laws," is

clearly erroneous?

IV. Whether the District Court

erred in dismissing Petitioner's First

Amended Complaint on the pleadings

findings that Petitioners did not have

standing to bring the suit and that

the First Amended Complaint did not

state causes of action upon which

relief can be granted?

V. Whether the District Court

erred in determining the standard ap-

plicable in testing the sufficiency of

the First Amended Complaint for subject

matter jurisdiction?

CONSTITUTIONAL PROVISIONS,

STATUTES, AND FEDERAL

RULES INVOLVED

The pertinent portions of the Fifth,

Ninth, Thirteenth, and Fourteenth

Amendments to the Constitution of the

United States, laws of the United

States and Federal Rules of Civil Pro-

cedure, to wit:

(5 U.S.C. 702), (12 U.S.C. 1702), ; F ("MSHDA"). Second Avenue is a limited

(28 U.S.C. 1331, 1343(3) and (4), dividend partnership among whose pur-

(42 U.S.C. 1981, 1982, 9183 and poses is to rehabilitate and develop

1985), (42 U.S.C. 200d), (42 | the Second-Hendrie Project for low

U.S.C. 3605 and 3612), (42 and moderate income persons and social,

U.S.C. 3939), Fed.R.Civ.P. recreational, commercial and communal

Rules 12(b) (1) and 12(b)(6), facilities for its tenants. All of

28 U.S.C.A. set forth in App. Second Avenue's members are Black

D at pp. ° Persons. Second Avenue is a parti-

cipant and recipient under the feder-

STATEMENT OF THE CASE

ally assisted programs.

The First Amended Complaint Hood is a member, limited partner

The District Court action was ° : and general partner of Second Avenue,

brought by three sets of

Plaintiffs. is a Black Person, a resident and

Second Avenue, a Michigan Limited taxpayer of Detroit. Eley is a Black

Partnership, was organized pursuant Person, @ former tenant and displacee

to the Michigan Uniform Partnership of the Second-Hendrie Project, a quali-

Act and the State Housing Development “ted applicant for the Second-Hendrie

Authority Act of Michigan. The organi- Project, and is a resident of Detroit.

zation and operation of Second Avenue White is a principal shareholder and

was and is supervised by the Michigan officer of U.H. Construction, is a

State Housing Development Authority ; Black person, a resident and taxpayer

of Detroit, and is an owner of real

property in Detroit.

U.H. Construction is the general

contractor of the Second-Hendrie

Project and general partner of Second

Avenue.

The District Court action was

brought against three sets of

Defendants.

The Federal Defendants are the

Secretary of Treasury, the Secretary

of Housing and Urban Development, the

Director of tne Office of Management

and Budget, the Department of Housing

and Urban Development ("HUD"), and

the Federal Housing Administration

-smy

The State Defendants are the

Governor of the State of Michigan,

the Director of the Department of

Social Services and Chairman of MSHDA,

and the Executive Director of the

Michigan State Housing Development

Authority ("MSHDA").

The Private Defendants are Citizens

Mortgage Corporation of Delaware

(co-mortgagee and servicing agent),

Citizens Mortgage Corporation of

Michigan (co-mortgagee and servicing

agent), Lawyers Title Insurance

Corporation (title insurer of

mortgage interest), Continental Win-

gate (housing consultant to MSHDA and

the Second-Hendrie Project), Manu-

facturers Hancver Corporation (parent

of vstizens of Michigan and Delaware),

Metropolitan Detroit Citizens Develop-

ment Authority ("MDCDA") (contract re-

locator of displacees of Second-

Hendrie Project), and New Detroit, »

Inc. (controller of MDCDA).

The HUD, FHA, MSHDA Partnership

alleged in the First Amended

Complaint.

In 1970 MSHDA and the Governor of

Michigan entered into a partnership

with HUD, RHA and the then Secretary

of HUD to create a rehab multi-family

residential program (including the

Second-Hendrie Project) in the City of

Detroit known as Project Rehab, and

to create employment for blacks and

agreed to insure the success of the

program.

The Entire Agreement alleged in

the First Amended Complaint.

Pursuant to the federal and state

partnership and prior to December,

1971, Second Avenue, Hood and U.H.

Construction entered into the Entire

Agreement with MSHDA, HUD, FHA,

Citizens, Lawyers Title, Continental

Wingate et al, to finance, insure,

rehabilitate, develop and manage the

Second-Hendrie Project.

Accepting the allegations of

the First Amended Complaint as

true, Petitioners personally

sustained injuries in fact

Petitioners' First Amended Complaint

charge Respondents with discriminatory

practices in the administration of

§ 236 (Rehab Detroit) Housing Projects,

inciuding the Second-Hendrie Project

(q 46, 49, 60 and 62) and also charge

that Respondents violated their statu-

tory duties, exceeded and abused their

statutory powers and authority, and

breached their contractual commitments,

inter alia, in failing: to relocate

the displaced tenants of Second-Hendrie

Project including Eley (4 17, 18, 43,

46, 47, 48, 60 and 81), to rehabili-

tate the Second-Hendrie Project, to

provide employment to Petitioners

and other blacks, to insure the suc-

cess of the Second-Hendrie Project,

deprivation of Petitioners' consti-

tutional, contract and civil rights,

to prevent imposition of onerous

conditions on U.H. Construction

making it impossible to complete the

construction (¢ 34, 37, 38 and 39),

to grant a mortgage increase to

Second Avenue (due to construction

cost overruns) while granting mortgage

increases to all other rehab projects

(¢ 48) [although all the MSHDA

financed rehab projects were in de-

fault, MSHDA discriminatorily and

foreciosed on Second Avenue (4 48 and

76) ], to honor approved construction

draws thereby stopping construction

(¢ 34, 35, 39, 40 and 77) and forcing

U.H. Construction to use unskilled

laborers thereby causing work to be

redone and increasing construction

costs (4 38, 76 and 77), to abide by

its agreement regarding the mora-

torium on mortgage foreclosures (4 35,

37, 48 and 76), to cooperate in good

faith in the workout agreement and

refused to grant a mortgage increase

(¢ 34, 38, 39, 40, 44 and 76), to

provide decent housing for the dis-

placed tenants of the Second-Hendrie

Project and the Detroit Project Rehab,

including Eley (4 17, 18, 43, 46, 47,

48, 60 and 81), and to prevent the

illegal siphoning off of exorbitant

funds for purchase of the sites (in-

cluding Second-Hendrie) from white

absentee landlords.

Second Avenue, U.H. Construction,

White and Hood claim in their First

Amended Complaint that they have

suffered and sustained injuries:

(Count I) deprivation of right to

participate in the HUD/MSHDA assisted

programs and right to carry on busi-

ness in a free enterprise system

(¢ 66(d) ), subjection to a fore-

closure and receivership action (4 69),

deprivation of contract rights and

economic opportunities and loss of

profits, investment, title to real

estate and opportunity to pursue

business and subjection to claims from

its limited partners (4 69), and

marked and labeled as undesirable

risks and blackmarked in further

participation in MSHDA/HUD projects

(¢ 69).

Eley and the class members repre-

sented by Eley, White, Hood and Second

Avenue, claim in their First Amended

Complaint that they have suffered and

sustained injuries: (Count I), depri-

vation of safe and sanitary dwellings

(¢ 64 and 66), suffered invasion of

right of privacy and individual

dignity (4 64 ard 66), deprivation of

their constitutional rights of due

process and equal protection afforded

under the Fifth, Ninth, Thirteenth

and Fourteenth Amendments to the

United States Constitution (4 68 and

69), and as a result of alleged

discrimination, loss of social bene-

' ts cf living in an integrated com-

runity and economic damage in social,

isiness and professional activities

-com living in the Black ghetto

"1, 64-69). ;

Second Avenue, U.H. Construction,

‘te. Hood, tley and the class

emoers they represent claim in their

Amende. Complaint that they have

“tered and sustained injuries

ot TII) as stated in the immedi-

‘orecoing paragraph, (Count IV)

vation of decent housing and

ovotection under the laws,

_rivaticn of property and personal

“ts without due process of law

'), and deprivation of rights and

-erest afforded under the rehab pro-

ram (§ 104), Count V ) damages and

nomic loss ‘+o their professional

», evedi., cscputacions and

si:ess (4 113) and legal personal

BeST COPY AVAILA‘LE

and property rights afforded under

the equal protection and due process

clauses, (Count VI) as a result of

discrimination, they have suffered

embarrassment and economic damage in

their business and personal activities

from being stigmatized as residents of

the Black ghetto (4 124), and that the

state and county tax burdens have been

increased (4 126), Count VII) depri-

vation of equal protection under the

laws and due process of law by denial

of participation in federally assisted

programs, (Count XI) humiliation,

nervous shock and embarrassment by

reason of the stigma associated with

residence in the Black ghetto (4 171),

(Count XII) destruction of their busi-

ness and good will (4 185), depri-

vation of right to carry on their

business (4 185), and loss of real

estate, business property and profits

oc Gamage <tc cheir reputation and

good will.

In 1975, P2titioners brought a

prive’%e action and a public action

acainst certain federal and state

azencies and officials and certain

privat? corporations for alleged vio-

ttions of the fcd ral and State of

seu * housing, securities, anti-

crust and civil rights laws and

Petitioners’ civil and constitutional

et. afforded under the Fifth, Ninth,

Thirteenth and Fourteenth Amendments

vo the Constitution of the United

~taces, seeking equitable relief and

Jvamages.

The Firs: Amendec Complaint filed

y Fretitioners invokec the Court's

jursc.'*tion under 5 U.S.C. 702; 28

U.S.C. 1331(a), 1343(3) and (4), 1361;

tae Fifth, Ninth, Thirteenth and

‘ourceentn Amendments and Articles

I and II to the Constitution of the

United States and the federal common

law. Petitioners sought redress

against Respondents for alleged viola-

tions and deprivation of rights,

privileges or immunities afforded

under 15 U.S.C. 1, 42 U.S.C. 1981,

1982, 1983, 1985, 2000d, 3605 and

3612.

Proceedings and Determinations

of the District Court

On May 1, 1975, Second Avenue filed

its Complaint in the District Court,

Civil Action No. 75-70783.

On May 15, 1975, MSHDA filed a

number of motions designated as fol-

lows: (1) Motion to Dismiss Under Rule

12(b) Fed.R.Civ.P., For Failure to

State a Claim Upon Which Relief Can

be Granted or for Lack of Subject

Matter Jurisdiction; (2) Motion Under

Rules 65, 12(b)(1), and 12(b)(6), to

Deny Certain Equitable Relief and to

Strike and Dismiss Certain Prayers for

Such Relief, or in the Alternative,

to Require Adequate Security; (3)

Motion, Under Rule 12, to Dismiss

for Lack of Standing and Capacity;

(4) Motion to Dismiss Because of

Statute of Limitaticns, Laches, Waiver

and Estoppel; (5) lotion Under Rule 11;

and (6) Motion Pursuant to Rule 65 to

Restrain Further Interference or Ha-

rassment of Issuance of Bonds. In

Support of these motions, MSHDA filed

-ffidavits and other extra-pleading

materials.

On May 22, 1975, Second Avenue

iiled its Ex parte Application to En-

large Time for an Order enlarging the

time for the hearing on MSHDA's

motions. Also, on May 22, 1975, the

District Court entered its Order

Limiting Scope of Hearing on Michigan

State Housing Development Authority's

Motions.

On May 27, 1975, Second Avenue et

al filed with the District Court the

original of the First Amended Com-

plaint.

On May 27, 1975, Second Avenue et

al filed with the District Court and

served on Carla Anderson Hills et al's

attorneys a Notice of Amended Complaint,

First Amended Complaint, Jury Demand,

General Reply to MSHDA's Motions, Brief

in Support thereof and Motion to Strike

Michigan State Housing Development

Authority's Motions and supporting

effidavits and papers.

On May 27, 1975, attorneys for

Citizens Mortgage Corporation and

Manufacturers Hanover Corporation

filed sheir Notice of Appearance and

also filed Motions for Dismissal of

Certain Allegations and Declaration

of Support for Motions and Brief in

support thereof.

During the proceeding before the

Honorable Cornelia G. Kennedy on

May 27, 1975, the District Court

ruled that Second Avenue et al had

a right to file a First Amended Com-

plaint notwithstanding the addition

of additional plaintiffs.

During the hearing on MSHDA et al's

Motions on May 27, 1975, Second Ave-

nue et al's counsel made a motion for

leave to file a Second Amended Com-

plaint in the event the Court granted

any part or all of the relief sought

by MSHDA et al's motions.

Although counsel for Second Avenue

“t al argued their motion to strike

MSHDA's motions and supporting af-

fidavits and papers on May 27, 1975,

and requested the relief sought there-

in, the District Court failed to rule

on said motion and also failed to

State any reason why it did not so

rule.

On May 28, 1975, the District

Court rendered its typewritten 13-

page Opinion and Order Granting MSHDA

et al's Motions to Dismiss and simul-

taneously therewith entered its

Judgment Dismissing Action. (App. A,

infra. pp. 1-46).

The District Court's Grounds

for Dismissal of Counts I, II,

III, IV, V, VI, VII, IX and X

The District Court, in dismissing

Count I oi che First Amended Complaint

found (a) that the Petitioners, Second

Avenue, Hood, Eley, U.H. and White

lacked the requisite standing to raise

the claims therein; (b) a failure to

contain a short and plain statement

*f Petitiorors' ‘.vious claims show-

ine chet they are 2ntitied to relief

App. A, infra... 42 ). MSHDA,

———<—=— «

Citizens Mortgage Corporation and

Manufacturers Hanover Corporation

also argued in their brief on appeal

that the District Court dismissed

Count I based on its findings of

lack of standing and the failure to

state cognizable private causes of

action.

Also MSHDA, Citizens and Manu-

facturers Hanover moved to dismiss

the First Amended Complaint pursuant

to Rule 12(b)(1) and 12(b)(6) of the

Federal Rules of Civil Procedure.

In addition, MSHDA, Citizens and

Manufacturers Hanover asserted during

the argument on their motion to dis-

miss that the District Court lacked

jurisdiction over the subject matter

of the action and that all Counts of

the Complaint and First Amended Com-

plaint failed to state claims upon

which relief can be granted.

The District Court, in rendering

its Opinion Dismissing Action and in

ersering its Judgment Dismissing

Action concluded that it did not have

jurisdiction over the subject matter

of the action. (App. A, infra, pp.

12-25). However, in addition to, and

notwithstanding the District Court's

holding of a lack of subject matter

jurisdiction, the District Court held

that Petitioners Second Avenue, Hood,

Eley, U. H. and White's Complaint

failed to state claims upon which

relief could be granted. (App. A,

infra, pp. 16-37).

Proceedings and Determinations

Oo. i%> United States Court of

Appeals, Sixth Circuit

On appeal, the Sixth Circuit (per

Weick and Peck, Circuit Judges and

Cecil, Senior Circuit Judge) affirmed

the judgment of the District Court.

(App. B, infra, p. 47 ).

In denying the Petition for Re-

hearing and Suggestion for Rehearing

In Banc, the Sixth Circuit concluded

that the petition for rehearing was

without merit. (App. C, infra,

REASONS FOR GRANTING THE WRIT

THIS CASE PRESENTS QUESTIONS OF

GREAT IMPORTANCE RELATING TO THE

ADMINISTRATION AND ENFORCEMENT

OF THE FEDERALLY ASSISTED HOUSING

PROGRAMS. ALSO, THE SIXTH

CIRCUIT COURT'S DECISION OF AF-

FIRMANCE OF THE DISTRICT COURT'S

JUDGMENT CLEARLY CONFLICTS WITH

THD SEVENTH CIRCUIT COURT'S

DECISIONS OF GAUTREAUX v. ROMNEY

AND CAUTREAUX v. CHICAGO HOUSING

AUTHORIT? AND THE THIRD CIRCUIT

COURT'S DECISION O*¥ SHANNON v.

4D ON THE SAME MATTERS

Here, as was in Mahaley v. Cuyahoga

Metropolitan Housing Authority et al,

(6th Cir. 1974), this is a civil

rights case attacking the growing

evil of apartheid in Urban America.

24 .

she District Court dismissed the

First Amended Complaint for lack of

si mding. Even a cursory reading of

the opinion (App. A, infra,-pp. 1-46)

Jemonstrates that standing is not

really the problem ir this cause.

Commencing on the Supreme Court's

‘eoision im-Warth v. Seldin, 422 U.S.

agu, 95 3.Ct. 2197 (1975), Irving

founger steted in nis article titled

""n Praise of Simplicity," 62 A.B.A.J.

/ JG _— wy

"Read tne (District Court) opinion

ene ask yourself whether svandine is

.°ally the problem. I think you'll

say no, the real problem is that the

petitioners raised enor.ious sensi-

tive issuer of race and economic

class the court was unwilling to

racy. It chose to avoid them by

eda._nig sore very com»licated

wrinkles to the elready vexed law

to standing." (App. E, infra,

op.81-82-

Read the District Court's opinion

(App. A, infra pr. 19 - 14 ) and ask

ycoucself wuether standing is really

the problem .n this case. Without .

a doubt, the real problem is that

Petitioners raised enormous sensi-

tive issues of race and economics

that the Court was unwilling to face.

Instead, it chose to avoid them by

erroneously exercising its discretion

to purporvsedly er’ :iace MSHDA's

ability to sell i.s tonds (App. A,

infra, pp. 10-12

Messrs. Arych Neier and Burt

Neuborne apprepriately state. in the

July/August 1976 Juris Doctor that the

current Suprere Court decisions,

including Warth v. Seldin, have made

a mockery of the notion of direct and

uncompelled access tc federal courts

end unless Congress reasserts its will,

the current cecisions bid fair to

repeal 42 U.S.C. 1983 by judicial

fiat. (App. E, fra, po.68-77).

Petitioners are entitle’ to have

the District Court decide the

merits of tne d‘isputes and the

particular issi os alleged in their

First Amended Complaint -- The

principles of Hills v. Gautreaux

are fully applicable to the

instant cate

This case presents a similar and,

in many respects, an exact parallel

of facts which faced the Supreme

Court in Hills v. Gautreau”,

U.S. » 9 S.Ct. 204 (1975).

Here, as in Hills, Petitioners

(especially Eley, a former tenant and

applicant for federally assisted hous-

ing) brought a “public” and "private"

action, individually and as members of

classes, alleging that Respondents

had deliberately selected sites and

issued mortgare loan commitments for

the construction of housing projects

for low or moderate income persons in

Black neighborhoods; deliberately

determined not to aic or assist in the

placement of Black families in white

neighborhoods; failed to provide assis-

tance to ferilies under displaced

Project Rehab, and deliberately chose

Black ghettos for each of the sites

of the Project Rehab (Detroit) housing

projects to avoid placement of Black

families in white neighborhoods in

violation of federal statutes and

the Fourteenth Amendment. Further

MSHDA assisted in these transgressions

by providing financial assistance and

other support for HUD, MSHDA and FHA's

discriminatory housing projects.

Here, as in Hills, jurisdiction was

predicated in part upon 28 U.S.C.

1331 (a), the Fifth, Ninth, Thirteenth

and Fourteenth Amendments to the Consti-

tution of the United States, Sec. 601

of the Civil Rights Act of 1964,

42 U.S.C. § 20004. Here, but not as

in Hills, jurisdiction was also predi-

cated upon 28 U.S.C. 1331(a), 1343(3)

and (4) and the principles of

Bivens v. Six Unknown Ageits of the

*deral Bureau of Narcotics, 403 U.S.

38&, 91 S.Ct. 1999 (1971); Bell v.

4. od, 327 U.S. 678, 66 S.Ct. 773

(1946); and Yiamouyiannis v. Chemical

bstracts Service, 521 F.2d 1392

(6th Cir. 1925).

Here, as in Hills, Petitioners

sovght an injunction against Respon-

dents restraining such racially

discriminatory housing practices and

-uiring Respondents to remedy the

past effects of their unconstitutional

site selection and tenant-assignment

(relocation) procedures by building

future federally assisted housing units

in predominantly white areas. Here, as

"411s, the District Court granted

HUD's motion to dismiss the complaint

for lack of jurisdiction and failure

to state a claim upon which relief

could be granted. Hills v. Gautreaux,

supra, at 4482.

In the Hills case, but not in this.

case, the United States Court of

Appeals reversed the order of the

district court dismissing the com-

plaint. Gautreaux v. Rommey, 448

F.2d 731 (7th Cir. 1971). In

Gautreaux v. Romney, at pages 734 and

735, the Court found jurisdiction

under 28 U.S.C. 1331 and the Fifth

Amendment to be present based on

the Supreme Court decision in Bell v.

Hood, supra. That Court also found

that HUD, through its Secretary,

violated the due process clause of

the Fifth Amendment (Bolling v. Sharpe ,

347 U.S. 497 (1954) and also violated

§ 601 of the Civil Rights Act of 1964

(Shannon v. HUD, 436 F.2d 609 (3rd

Cir. 1975).

A careful study of the Hills case

and the prior decisions of the United

States Court of Appeals for the

Seventh Circuit and the District Court

reported at 503 F.2d 930; 304 F.Supp.

736; 296 F.Supp. 907; 448 F.2d 731;

332 F. Supp. 366, leads us to conclude,

as did the Supreme Court and the United

States Court of Appeals for the

Seventh Circuit, that Petitioners are

entitled to have the District Court

decide the merits of the disputes and

the particular issues alleged in their

First Amended Complaint.

The case of Warth v. Seldin, is

Clearly distinguishable from the ”

instant matter

In affirming the District Court

decision, the Sixth Circuit Court

cited as additional authority Warth v.

Seldin, supra. However, a careful

study of the Warth case will reveal

that it is not controlling in the

instant cause. In the Warth case,

the Court found that the petitioners

did not assert on behalf of their

members any right of action under the

1968 Civil Rights Act, that they

personally had not been denied any

constitutional rights afforded under

42 U.S.C. 1983, they had not suffered

harm nor were one or more of their

members injured, that they had not

alleged a contract right protected

under 1981 or 1982, and they had

alleged no monetary injury to

themselves or any assignment of

damage claims to their members.

Accepting, as the Court must, the

various allegations of Petitioners’

First Amended Complaint as true

(Warth v. Seldin, 422 U.S. at

pages 501-522, Conley v. Gibson, 355

U.S. 41 (1957), and Luearel v. McNair,

453 F.2d 836 (6th Cir. 1971)), the

complaint and the record on appeal

allege and clearly show that Petitioners

have personally sustained injury in

fact and that their interests sought to

be protected are arguably within the

zone of interest to be protected and

regulated by the statutes and consti-

tutional guarantees in question.

Eley and the class he represents

are clearly the ultimate benefici-

aries of the operating subsidies

available to the Second-Hendrie Pro-

ject, as their rents are reduced if

the housing is provided and the sub-

sidies are paid. Moreover, each

Petitioner has alleged deprivation of

statutory and contract rights which

only each such petitioner can clain.

Therefore, the Petitioners clearly

have a "personal stake” in the out-

come of the controversies as to assure

that concrete adverseness which shar-

pens the presentation of issues

upon which the Court so largely de-

pends for illumination of difficult

constitutional questions. Cf. Stanton

v. Stanton, U.S. P

95 S.Ct. 1373 (1975).

As recounted above, the allegations

of the First Amended Complaint clearly

show and demonstrate that petitioners

have alleged precisely what Associa-

tion of Data Processing Service Or-

ganizations v. Camp, 397 U.S. 150,

90 S.Ct. 827 (1970) and Malamud v.

Sinclair Oil Corporation, 521 F.2d

1142 (6th Cir. 1975) require.

Thus, the Warth case is distin-

guishable and does not squarely address

the questions presented by this case.

THE IMPORTANT QUESTIONS WERE

WRONGLY DECIDED BELOW

The questions that were squarely

presented by the facts of this case

are the exact questions that this

Court impliedly stated in the Hills

case, supra and which the Sixth,

Seventh and Third Circuit Courts ex-

pressly stated in Garrett v. City

of Hamtramck, 503 F.2d 1236 (6th Cir.

1974); Gautreaux v. Chicago Housing

Authority, supra; Gautreaux v. Romney,

452 F.2d 124 (7th Cir. 1972); and

Gautreaux v. Romney, supra. Cf.

Singleton v. Wulff, U.S.

44 L.W. 5213 (July 1, 1976).

The District Court's finding that

none of Petitioners are "aggrieved

persons" under Title VIII of the Civil

Rights Act of 1968 (App. A, infra,

pp.17-24) is clearly erroneous and in

conflict with Cincinnati Electronics

Corporation v. Kleppe, 509 F.2d 1080

(6th Cir. 1975); Trafficante v.

Metropolitan Life Insurance Co., 409

U.S. 205 (1972); Association of Data

Processing Service Organizations v.

Camp, supra; and Singleton v. Wulff,

supra, which are fully applicable to

this case.

Also, the District Court's findings

that Plaintiffs have no standing to

raise the claims set forth in Counts

I, III, IV, VI and VII (App. A, infra,

pp.12-29, that none of the Plaintiffs

are "aggrieved persons" under Title

VII that none of the statutes cited

in paragraph l(a) of Count I provide

a direct private remedy to Plaintiffs

(App. A, infra, pp.17-24), that none of

the Plaintiffs have standing to raise

the claims set forth in Count III

(App. A, infra, pp.17-24) are clearly

erroneous and in conflict with Single-

ton v. Wulff, supra; Garrett v. City

of Hamtramck, supra; Trafficante v.

Metropolitan Life Insurance Co., supra;

Association of Data Processing Service

Organizations v. Camp, supra; and

NAACP v. Alabama, 357 U.S. 44g, 78

S.Ct. 1163 (1958) which are fully

applicable to this case.

As a ground for its decision, the

District Court found that "Plaintiffs

cannot rely for standing upon alleged

violations of the civil rights of

others", purportedly on the authority

of Brown v. Board of Trustees, 187 F.2d

20 (5th Cir. 1951) and Bailey v.

Patterson, 369 U.S. 31 (1962).

However, a close reading of the

Bailey case will reveal that it is

inapposite to the facts of this case.

Although it is the general rule

that the federal courts should hesi-

tate before resolving a controversy,

even one within their constitutional

power to resolve, on the basis of the

rights of third persons not parties to

the litigation, like any general rule,

this one should not be applied where

its underlying justifications are

absent. Singleton v. Wulff, 44 L.W.

at pp. 5215-16.

Apposite to the present case is

Mr. Justice Blackman's statement that:

"The other factual element

to which the Court has looked

is the ability of the third

party to assert his own right.

Even where the relationship

is close, the reasons for

requiring persons to assert

their own rights will gener-

ally still apply. If there

is some genuine obstacle

to such assertion, however,

the third party's absence

from court loses its tendency

to suggest that his right

is not truly at stake, or

truly important to him, and

the party who is in court

becomes by the default the

right's best available pro-

ponent. Thus, in NAACP v.

Alabama, 357 U.S. 549 (1958),

the Court held that the NAACP,

in resisting a Court order

that it divulge the names of

its members, could assert

the First and Fourteenth

Amendments rights of those

members to remain anonymous.

the Court reasoned that

"(tjo require that [the

right] be claimed by the

members themselves would

result in the nullifica-

tion of the right at the

moment of its assertion."

Singleton v. Wulff, 44 L.W.

at Est Also see Eisen-

stadt v.Baird, 405 U.S. at

446; Barrows v. Jackson,

346 U.S., at 259.

Application of these principles io

the present case quietly yields its

proper result. Singleton ~. Wuit’.

supra, and Pierce v. Society of

Sisters, 268 U.S. 510 (1928).

For the foregoing reasons, it is

submitted that it is appropriate in

this case to allow the Petitioners to

assert the rights of poor Black fami-

lies as against governmental depriva-

tion of civil, property and constitu-

-tional rights.

THE SIX CIRCUIT COURT'S

AFFIRMANCE OF THE DISTRICT

COURT'S JUDGMENT THAT

"PLAINTIFFS' FIRST AMENDED

COMPLAINT FAILS . .. TO

CONTAIN A SHORT AND PLAIN

STATEMENT OF PLAINTIFFS'

VARIOUS CLAIMS SHOWING

THEY ARE ENTITLED TO RELIEF"

CLEARLY CONFLICTS WITH THIS

COURT'S DECISIONS OF BELL

v. HOOD, CONLEY v. GIBSON,

AND HOSPITAL BUILDING CO.

v. REX HOSPITAL AND FAR

DEPARTED FROM THE ACCEPTED

AND USUAL COURSE OF PLEADING

AS TO CALL FOR AN EXERCISE

OF THIS COURT'S POWER OF

SUPERVISION

The District Court's deter-

mination that the Court

lacked jurisdiction and that

the Complaint failed to state

causes of action is fatally

incompatible

A careful study of the opinion

amply demonstrates that the District

Court dismissed the First Amended Com-

plaint based on a determination that

it lacked jurisdiction and that the

First Amended Complaint failed to state

causes of action. (App. A, infra,

pp. 1-46).

In its opinion and order granting

Respondents' motion to dismiss, the

District Court found that none of the

Statutes set forth in paragraph l(a)

of Count I of the First Amended Com-

Plaint provide a direct and private

remedy to Petitioners. Also, the

District Court found that Petitioners

did not allege that they were in any

way affected and harmed by the conduct

of Respondents (App. A, infra, pp. 12-

19 ). These rulings were holdings that

there was a lack of jurisdiction to

bring Count I. Gautreaux v. Romney,

supra, at 733 as cited in the Hills

case, supra, at 4482. Cf. Wright,

Miller and Cooper, Federal Practice

& Procedure: Jurisdiction, 4% 3531,

pp. 185-186, 191, 197 and 205. Also,

see Warth v Seldin, supra, at 498-501.

Since the Court must assume juris-

diction to decide whether the allega-

tions state a cause of action, the

District Judge's determination that

the Court lacked jurisdiction and

that the Complaint failed to state

causes of action is incompatible.

Brown v. Strickler, 422 F.2d 1000

‘(6th Cir. 1970) and Bell v. Hood,

Supra.

The District Court's finding that

"Plaintiffs' first amended complaint

fails . . . to contain a short and _

plain statement of Plaintiffs' various

claims showing that they are entitled

to relief" is clearly erroneous and in

conflict with Tipler v. E.I. duPont

deNemours and Co., 443 F.24a 125 (6th

Cir. 1971) and Azar v. Conley, 456

F.2d 1382 (6th Cir. 1972), which are

fully applicable to this case.

Also, the District Court's inclusion

in the record of affidavits and docu-

ments submitted by both parties (exhi-

bits and affidavits of MSHDA and affi-

davits and exhibits of Petitioners

(see reference App. A, infra, pp. 4-

12) converted Respondents' Rule 12(b)

motions to dismiss to Rule 56 motions

for summary judgment, and the District

Court's failure to grant Petitioners'

Application to Enlarge Time for Hearing

on MSHDA's motions and to afford

Petitioners the opportunity to file

counter affidavits and take discovery

is clearly erroneous and in conflict

with the Supreme Court's affirmance of

Gautreaux v. Chicago Housing Authority,

503 F.2d 930 (7th Cir. 1974); Gautreaux

v. Romney, 452 F.2d 124 (7th Cir. 1972);

Gautreaux v. Romney, 448 F.2d 731 (7th

Cir. 1971) and the Supreme Court's

statements in Warth v. Seldin, supra,

at 501-502 and 526-527 per Brennan,

White and Marshal ij, dissenting, which

are fully applicable to this case.

The lower court's treatment of the

injury in fact requirements directly

conflicts with Malamud v. Sinclair

Oil Corporation, supra; Trafficante v.

Metropolitan Life Insurance Co., supra;

Association of Data Processing Ser-

‘vice Organizations v. Camp, supra, and

Singleton v. Wulff, supra. Hence, any

prudential, nonconstitutional consider-

ations that underlay the Court's dis-

position of the injury in fact standing

requirement in cases such as Warth v.

Seldin, are simply seneeesite when

review is sought under a congres-

Sionally enacted statute conferring

standing and providing for judicial

review. Simon v. Eastern Kentucky

Welfare Rights Organization, U.S.

» 44 LW. 4724, 4734 (1976),

Brennan J., dissenting).

Mr. Justice Brennan in his dissen-

ting opinion made an appropriate

comment in Simon v. Eastern Kentucky

Welfare Rights Organization, supra,

44 LW. 4736:

"The Court's treatment of

injury in fact without any

"particularization' in light

of either the policies pro-

perly implicated or our rele-

vant precedents threatens

that it shall ‘become a

catchall for an unarticulated

discretion on the part of

this Court’ to insist that

the federel courts ‘decline

to adjudicate’ claims that

it prefers they not hear.

Poe v. Ullman, 367 U.S., at

530 (Harlan, J., dissenting)."

IN HOLDING THAT THE GOVERN-

MENTAL AGENCIES AND OFFICERS

DO NOT FALL WITHIN THE PUR-

VIEW OF THE ANTI-TRUST LAWS,

ON THE AUTHORITY OF PARKER v.

BROWN, ERRONEOUSLY OR WITHOUT

CONSIDERING THE VALIDITY OF

THE CLAIMS AGAINST THE PRIVATE

RESPONDENTS, THE LOWER COURTS

RENDERED DECISIONS IN CON-

FLICT WITH THE DECISIONS OF

THIS COURT ON THE QUESTION

OF GOVERNMENTAL IMMUNITY

In support of its decision, the

District Court held that:

"It is well settled that

governmental agencies and

officers do not fell within

the purview of the anti-

trust laws, Parker v. Brown,

317 U.c. 341 (1943); Alabama

Power Co. v. Alabama Electric

Cooperative, Inc., 304 F.od

672 (5th Cir. 1968). This

immunity is not removed by

charging a conspiracy between

governmental and private

parties. Saenz v. Universit

Interscholastic Lea UE ease

r. .

Although there are five pri-

vate party-defendants listed

in the caption of this action,

there are no allegations of

any acts by any of the pri-

vate individuals which are in

restraint of trade." (App. A,

infra, pp. 34-37).

The very language of Count XII of

the First Amended Complaint reveals

that the District Court's fincing

that there are no allegations of any

acts by any private individuals which

are in restraint of trade is clearly

erroneous. (Paragraphs 177 through

182 of the First Amended Complaint).

Moreover, the cases cited by the

District Court in support of its

Opinion are not applicable by reason

of the waiver of sovereign immunity

under 12 U.S.C. §1702, 42 U.S.C. 3939,

and the recent Supreme Court decision

of Goldfarb v. Virginia State Bar, 421

U.S. 773, 95 S.Ct. 204, 215 (1975).

In Cantor v. The Detroit Edison

Company, U.S. » 445 L.W. 5357

(July 6, 1976), the District Court

entered a summary judgment against

petitioner, holding on the authority

of Parker v. Brown, supra, that the

Michigan Public Service Commission's

approval of the respondent's light-

bulb marketing practices exempted the

practices from the federal anti-trust

laws, and the Court of Appeals, Sixth

Circuit, affirmed. 513 F.2d 630 (6th

Cir. 1975). Mr. Justice Stevens, in

delivering the opinion of the Court in

Cantor stated that neither Michigan's

approval of respondent's present tariff

nor the fact that the light-bulb ex-

change program may not be terminated

until a new tariff is filed, is suffi-

cient basis for implying an exemption

from the federal anti-trust laws for

that program. Mr. Justice Stevens

further stated that the State of

Michigan's participation in the deci-

sion to have a light-bulb exchange

program is not so dominant that it is

unfair to hold a private party respon-

sible for its conduct in implementing

the decision, but rather the respon-

dent's participation in the decision is

sufficiently significant to require

that its conduct, like comparable

conduct by unregulated businesses,

conform to applicabie federal law.

In the recent case of Hospital

Building Company,y v. Trustees of the

Rex Hospital, U.S. » 44 L.W.

4683 (May 24, 1976), petitioner

brought a suit under § 1 and 2 of the

Sherman Act alleging that respondents

were engaged in an unlawful con-

spiracy to restrain trade and commerce

in the furnishing of medical and sur-

gical hospital services, and that they

were attempting to monopolize the

hospital business in the Raleigh,

N.C., Metropolitan area. The District

Court dismissed petitioner's amended

complaint on the pleadings. The Court

of Appeals for the Fourth Circuit,

sitting en banc, affirmed the judgment

of the District Court. The Supreme

Court granted certiorari and reversed

the lower courts, and held that the

amended complaint when fairly read,

adequately alleged a restraint of

trade substantially affecting inter-

state commerce and that the dismissal

on the pleadings of petitioner's

amended complaint was therefore inappro-

priate. Mr. Justice Marshal in deli-

vering the opinion of the Court stated

that:

"We have held that ‘a

complaint should not be dis-

missed for failure to

state a claim unless it

appears beyond doubt that

the plaintiff can prove

no set of facts in support

of his claims which would

entitle him to relief."

Conley v. Gibson, 355 U.S.

qT, Te 4é (1967) (footnote

omitted). And in anti-

trust cases where ‘the proof

is largely in the hands of

the alleged conspirators',

Poller v. Columbia Broad-

Casting System reggie 200

0.5 TET 73 tio62), is-

>. . 5

missals prior to giving the

plaintiffs ample opportunity

for discovery should be

granted very sparingly.

Applying this concededly

rigorous standard, we con-

clude that the instant case

is not one in which dis-

missal should have been

granted. Petitioner's com-

plaint states a claim upon

which relief can be granted

under the Sherman Act. (foot-

note omitted). Accordingly,

the judgment of the Court of

Appeals is reversed and the

case is remanded for further

proceedings consistent with

this opinion." Hospital

Building Co., v. Trustees

of Rex Hospital, (supra),

AY L.W. at 5665

In United States v. Nat'l Assn

of Securities Dealers, the Court

pointed out:

"Implied anti-trust immunity

is not favored, and can be

Justified only by a convincing

showing of clear repugnancy

between the anti-trust laws

and the regulatory system.

See e.g. United States v.

Borden Co., 308 U.S. 188,

197-206 (1939)." 422 U.S.

694, 720.

Furthermore, the Court in Cantor v.

The Detroit Edison Company stated:

"In the Court's most recent

consideration of this subject,

it described the defendant's

claim with pointed precision

as ‘this so-called state ac-

tion exemption.’ Goldfarb v.

Virginia State Bar, 421 U.S.

773, 110 The Court then

P °

explained that the question

whether the anti-competitive

activity had been required

by the state's acting as

sovereign was the ‘threshold

inquiry' in determining whe-

ther it was state action of

the type the Sherman Act was

not meant to prescribe.

Certainly that careful use

of language could not have

been read as a guarantee

that compliance with any

state requirement would

automatically confer federal

anti-trust immunity.

It surely does not qualify the

categorical statement in

Parker that 'a state does not

give immunity to those who

violate the Sherman Act by

authorizing them to violate

it or by declaring that their

action is lawful. 317 U.S.

at 351.

Although it is tempting to

try to fashion a rule which

would govern the decision of

the liability issue and the

damage issue in all future

cases presenting state action

issues, we believe that the

court should adhere to its

settled policy of giving con-

crete meaning to the general

language of the Sherman Act

by a process of case-by-case

adjudication of specific

controversies.

Since the District Court has

not yet addressed the ques-

tion ofwhether the complaint

allege a violation of the

anti-trust laws, the case is

remanded for a determination

of that question and for such

other proceedings as may be

appropriate." i L.W. at

5 36 3-5 364.

It is well settled that the judicially

created exemption of immunity for state

approved transactions may not be in-

voked when governmental agents or

instrumentalities of governments act

outside their scope of authority.

Union Carbide and Carbon v. Nisley, 300

F.2d 561, 576-77 (10th Cir. 1961) cert.

dism'd sub nom. Wade v. Union Carbide

and Carbon Corp., 371 U.S. 801 (1962);

nor may State officials claim anti-

trust immunity for acts which exceed

the authority vested them by law,

Alabama Power Company vy. Alabama Elec.

Coop, 394 F.2d 672, 675 (Sth Cir.

1968) cert. denied 393 U.S. 100

(1968).

There is no autho 4 Statutory or

otherwise, auttna~ i = state officials

fo conspire with persons to restrain

commerce or exempting them from suit if

they so conspire. Bankers Life &

Casualty Co. yv. Larson, 257 F.2d 377

(Sth Cir. 19), cert. denied 358

U.S. 879 (1958), Furthermore, a pro-

prietary or business function of the

State, as contrasted with a govern-

mental function, is divested from a

State's sovereignty. Opinion of the

Attorney General of Georgia, 1948-1949

Trade Cases, 9 62, 455 (June 14, 1949),

Also see 16L Business Organizations,

$102.01 at page 102-4; Continental

BeST COPY AVAILAULE

Ore Co. v. Union Carbide & Carbon

Corp., 370 U.S. 690 (1962); United

States v. Sisal Sales Corp., 274 U.S.

268 (1927) (foreign officials);

Harman v. Valley National Bank, 399

F.2d 564 (9th Cir., 1964); and

Independent Taxicab Operators' Ass'n

v. Yellow Cab Co., “i F. Supp. 979,

983 (N.D. Cal. 1968).

Count XII of Petitioners' First

Amended Complaint specifically alleges

that the Respondents have exceeded

their authority (4 177), conspired to

control § 236 Rehab (Detroit) Housing

Projects and Developments, and that the

Respondents, including MSHDA and five

(5) private corporations, are engaged

in the rehabilitation, construction and

financing of low to moderate income

housing or developments of a pro-

prietary or business nature, in compe-

titive areas of the economy, (4% 178

and 182), Advisory Opinion re Consti-

iutionality, P.A. 1966, No. 346, 3280

554 (1968) at pare 585, in

ation of tne anti-trust laws.

Here, as in Cantor v. The Detroit

son Compan: , since the lower courts

snNeously or dic not consider the

\lidity of the claims against the

-pivate corporations and erroneously

setermined that the governmental

‘eneies and officers were immune from

she anti-trust laws, it is clear that '

Tount XII alleges acts sufficient to

assert a claim upon which relief can

be granted and that the Respondents are

not immune or exempt in any respect

under the anti-trus*? laws.

THIS PETITIC!! RAISES SUBSTANTIAL

AND IMPORTANT QUESTIONS CON-

CERNING THE STANDARDS APPLICABLE

TO TESTING THE SUFFICIENCY OF A

COMPLAINT FOR SUBJECT MATTER

JURISDICTION UNDER THE FEDERAL

RULES OF CIVIL PROCEDURE

This Pet‘tion raises substantial

and important questions concerning

pleadings practice in the federal

courts. The Petition for Writ of

Certiorari should be granted to settle

the present conflict in the law con-

cerning the pleading requirements

sufficient to survive a motion to dis-

miss for lack of standing and the

apparent conflict in this Court's deci-

Sions between Conley v. Gibson, 355

U.S. 41, 45-46 (1957); Hospital

Building Co. v. Trustees of the Rex

Hospital, U.S. », 44 LW.

4683 (May 24, 1976); Warth v. Seldin,

422 U.S. 490, S.Ct. 2197,

(1975), and Simon v. Eastern Kentucky

Welfare Rights Org., U.S. P

44 LW. 5213 (July 1, 1976).

Respondents' motion to dismiss

asserted that the District Court had no

jurisdiction over the subject matter

of the Amended Complaint, Fed.R.Civ.P.

12(b)(1), and that the Amended Complaint

failed to state a claim upon which re-

lief could be granted, Fed.R.Civ.P.

12(b)(6). Petition for Writ, pp.

Supra. The District Court granted the

motion to dismiss, concluding that

Petitioners lacked standing to bring

the suit, that the Complaint failed to

State claims upon which relief could be

granted, on the ground, inter alia,

that: "The First Amended Complaint

fails ... to contain a short and plain

statement of Plaintiffs' various claims

showing that they are entitled to re-

lief."

For purposes of testing the suffi-

ciency of a complaint, the Court must

accept its allegations as being true.

Gardner v. Toilet Goods Ass'n., 387

U.S. 167 (1967).

Up until 1975, it was settled law

in the federal courts that:

"A complaint should not be

dismissed for faiiure to

state a claim upon which

relief can be granted, unless

it is certain that the plain-

tiff can prove no state of

facts in support of its

allegations that would

entitled plaintiff to re-

lief. Conley v. Gibson,

355 U.S. Gi (1957)."

Also, it is well settled law of the

federal courts that an action brought

under the civil rights statutes requires

the reviewing court to scrutinize any

such dismissal of a complaint with.

special care, Azar v. Conley, 456 ¥.2d

1382, 1384 (6th Cir. 1972), and that

the reviewing court, following dis-

missal of a complaint, has 4 duty te

review the aliegations of the complaint

in the light most favorable to the

plaintiffs. Conley v. Gibson, supra;

Luearel v. McNair, 453 *®.2d 836 (6th

Cir. 1971); and L'Orange v. Medical

Protective Company, 394 F.2d 57 (6th

Cir. 1968).

The conflict of the Cupreme Court

decisions concerning the standards

applicable to testing the sufficiency

of a complaint for subject matter juris-

diction is demonstrated by Mr. Justice

Brennan's dissent, with whom Mr.

Justice White and Mr. Justice Marshal

joined, in Warth v. Seldin, supra,

as follows:

"The Court today, in an

opinion that purports to be

a "standing" opinion but

that actually, I believe,

has overtones of cutmoded

notions of pleading ana

justiciability, refuses

find that any of the v

ously situatec plaint

can clear numerous hur

some constructed here

the first time, necessary

to establish "standing".

Whi le the Court & ives life

service to the princinie,

oft-repeated in recen* years,

that ‘standing in no way de-

pends on the merits of the

Plaintiff's contention that

particular conduct is ilie-

gal’, ante, at 2206, in fact

the opinion, which tosses

out of court almost every

conceivable kind of plain-

tiff who could be injured by

the activity claimed to be

unconstitutional, can be

explained only by an indefen-

sible hostility to the claim

on the merits. I can appre-

ciate the Court's reluctance

to adjudicate the complex

and difficult legal questions

involved in determining the

constitutionality of prac-

tices which assertedly limit

residence in a particular

municipality to those who

are white and relatively

well-off, and I also under-

Stand that the merits of this

case could involve grave

sociological and political

ramifications. But courts

cannot refuse to hear a case

on the merits merely because

they would prefer not to and

it is quite clear, when the

record is viewed with dis-

passion, that at least three

of the groups of plaintiffs

have made allegations, and

Supported them with affids-

vits and documentary evidence

sufficient to survive a moits

to dismiss for lack of stan-

ding. (footnotes omitted).

To require them to allege such

facts is to require them

to prove their case on paper

in order to get into court at

all, reverting to the form of

fact-pleading long abjured in

BeST COPY AVAILA‘LE

e _ 61

» e when considered in light of

the federal courts. This Court = re ag sooty Me, aan

has not required such unachie- ss Pre - “ Poancess of

vable specificity in standing ihe Rex Hcsnital 7

cases in the past, see Scrap, Sts 6T and our

fhe Pact that tt does oe non observation therein that the

can only be ex Pe we i an same standard is applicabie

4 : : : to testing the sufficiency

ndefensible determination of the complaint for subject

by the Court to close the matter lasbedbesten "

doors of the federal courts F

to claims of this kind." 95

S.Ct. 2216 and 2220. In the instant case, when the First

Furthermore, the comment of Mr. \mended Complaint is viewed with dis-

Justice Brennan, with whom Mr. Justice cassion, it is quite clear that all

Marshal joined, concurring in the etitioners have made allegations

Judgment and dissenting in Simon v. sufficient to survive a motion to

Eastern Kentucky Welfare Rights . "a ‘ismiss for lack of standing. There-

Organization, 44 L.W. 4733, at n. &, : ; “ore, in order to prevent such a

‘ 6

is apposite to this issue: oatently incongruous state of the ies

sta 1da we

"One waits in vain for an in an area as vital as the sta

explanation for this selec- ae |

tivity imposed pleading re- applicable to testing the suff!

quirement; a recuirement so a ae

at odds with our usual view sf a complaint for subject matt

that under the Federal Rule: ; . urge

should not be dismissed for : Pam tint?

failure to state 2 claim unless ourt to grant the Petition for Writ

it appears beyond doubt that = Lent

the plaintiff can prove no f Certiorari so that the conflict

set of facts in support of re

his claim, which would entitle in this Court's decisions may be settied,

him to relief’. Conley v. —

Gibson, 355 U.S. TT he EXCEPTIONAL GROUNDS FOR WRIT

(1957). The want of an expla- . . or

nation is even more striking ; 7 The decisions of the United States

S ————— eo

- « +

| 3 {BEST COPY AVAILABLE

—_——

Supreme Court are binding upon federal

courts on appeal until such time as

the Supreme Court informs the federal

courts that they are not. Jordan v.

Gilligan, 500 F.2d 701 (6th Cir. 1974).

Also see 1B Moore's Federal Practice,

4 0.402 generally.

Although we find no case in point

in the Sixth Circuit Court of Appeals,

it is well established that one panel

of a Court of Appeals may not disregard

a precedent set by a prior panel, even

though it conceives error in the

precedent. Absent an overriding

Supreme Court decision or a change in

the statutory law, only the court in

banc can do so. Cf. Davis v. Estelle,

529 F.2d 437 (5th Cir. 1976); United

States v. Hawes, 529 F.2d 742 (5th Cir.

1976), and United States v. Olivares-

Vega, 495 F.2d 827 (2nd Cir. 1974).

Also cf. Hudgens v. N.L.R.B.,

U.S. , 96 S.Ct. 1029 (1976).

«= &

(App. A, infra, pp.10-14). To do so

constitutes an encroachment upon the

functions of the legislative body, as

recognized through the time-honored

principle of the separation of powers

of the three branches of our federal

governments.

Accordingly, as appears on the

face of the District Court's Opinion

and Judgment (App. A, infra, pp.1-46),

the dismissal of Petitioners’ First

Amended Complaint by the Courts below

constituted clear error and an abuse

of discretion. Not only were the lower

courts' judgments erroneous, but they

were also counterproductive in the

sensitive and controversial circum-

stances of the case before this Court.

We pray, that this Court will not

be diverted from its appointed task of

making ‘hk living truth" of our consti-

tutional ideal of equal justice under

The decisions of the lower courts

herein conflict with the decisions of

the United States Court of Appeals for

the Third, Sixth and Seventh Circuits,

Supra, and the Supreme Court, supra,

therefore consideration by this Court

of this case is necessary to secure

and maintain uniformity with the afore-

said decisions. |

The Supreme Court in Griswold v.

Connecticut, 381 U.S. 479 at 482 (1965),

Mr. Justice Douglas, speaking for the

Court, said:

"We do not sit as a super-

legislature to determine

the wisdom, need, and propriety

of laws that touch economic

problems, business affairs,

or social conditions."

It is clear that the federal courts

do not have jurisdiction and power to

determine the wisdom, need and pro-

priety of actions that touch economic

problems, business affairs or social

conditions, as did the trial court

in rendering its Opinion and Judgment

-4 »

, '

;

+ 4

« ’

» .

. ,

@ >

. ‘

a ,

Cf. Cooper v._ Aaron, 358 U.S. 1,

20 (1958).

law.

CONCLUSION

For the foregoing reasons, Peti-

tioners respectfully urge that:

A. Their Writ of Certiorari be

granted to review the judgment of the

United States Court of Appeals for the

Sixth Circuit; and

B. Upon consideration by this

Honorable Court, the Judgments of the

United States Court of Appeals for the

Sixth Circuit and the District Court be

reversed.

PATMON, YOUNG & KIRK

PROFESSIONAL CORPORATION

BY: /s/ Frederick A. Patmon

rederick atmon

BY: fal taney R. Kirk

anley r

Attorneys ‘for Petitioners

2429 Cadillac Tower

ony Michigan 48226

(313) 965-2675

Dated: August 18, 1976

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.