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North City Area-Wide Council Inc. v. Romney

decided: February 25, 1972.


Reargued December 15, 1971.

Biggs, Adams and Max Rosenn, Circuit Judges. On Reargument: Biggs, Max Rosenn and Hunter, Circuit Judges.

Author: Biggs


BIGGS, Circuit Judge.

The determination of this case depends, as we stated previously in 428 F.2d 754, 755 (1970), on the meaning of the requirements in the Demonstration Cities and Metropolitan Development Act of 1966*fn1 (the "Act"). The complaint in this case, filed August 15, 1969, has as plaintiffs North City Area-Wide Council, Inc., and various persons living within the so-called "target area" of the Philadelphia Model Cities Program, referred to collectively as "AWC," and is brought on their own behalf and on behalf of all other persons similarly situated pursuant to Rule 23(b) (2), Fed.R.Civ.Proc., 28 U.S.C. The defendants are George W. Romney, Secretary of Housing and Urban Development, the Department of Housing and Urban Development (HUD), Mayor James H. J. Tate, of Philadelphia,*fn2 Goldie E. Watson, Model Cities Administrator for Philadelphia, and the City of Philadelphia (City or Philadelphia). Jurisdiction is invoked pursuant to 28 U.S.C. §§ 1331 and 1361. The complaint describes the Model Cities Program to be made operational pursuant to the Act which authorized the Secretary of Housing and Urban Development to make grants to local governments to plan and implement comprehensive Model Cities Demonstration Programs.

The gravamen of the complaint is that the defendants proceeded to implement the Model Cities Program in Philadelphia without regard for AWC and the provisions of the Act. The plaintiffs sought, inter alia, temporary and permanent injunctions to prevent the defendants from proceeding with the implementation of the Philadelphia Model Cities Program. The case came on for hearing before the District Court on a stipulation of facts, the defendants moving for summary judgment. The motion was granted*fn3 and an appeal was taken to this court. We reversed, sub nom. North City Area-Wide Council, Inc. v. Romney, 428 F.2d 754 (1970), and remanded the case for further proceedings in accordance with our opinion. The District Court proceeded to final hearing on an extensive record and ordered the complaint dismissed. See, North City Area-Wide Council, Inc. v. Romney, 329 F. Supp. 1124 (1971). The appeal at bar followed.

In our previous opinion we defined the requirements of the Act. We said that "to be eligible for Federal aid, a 'comprehensive city demonstration program,' must 'provide . . . widespread citizen participation in the program' and the Secretary of Housing and Urban Development must 'emphasize local initiative in the planning . . . [of it].'"*fn4

We also stated: "These requirements form a central and novel feature of the Demonstration Cities Act, in whose prologue the Congress declared: '. . . that improving the quality of urban life is the most critical domestic problem facing the United States. The persistence of widespread urban slums and blight, the concentration of persons of low income in older urban areas, and the unmet needs for additional housing and community facilities and services arising from rapid expansion of our urban population have resulted in a marked deterioration in the quality of the environment and lives of large numbers of our people while the nation as a whole prospers. . . .' 42 U.S.C.A. § 3301.

"The purpose of the Act stated by Congress was 'to provide additional financial and technical assistance to enable cities of all sizes . . . to plan, develop and carry out locally prepared and scheduled comprehensive city demonstration programs. . . .' 42 U.S.C.A. § 3301. The basic philosophy of the Act was well-expressed by the Department of Housing and Urban Development ('HUD') in a statement of its policy concerning citizen participation: '. . . improving the quality of life of the residents of a model neighborhood can be accomplished only by the affirmative action of the people themselves. This requires a means of building selfesteem, competence and a desire to participate effectively in solving the social and physical problems of their community.'" See CDA Letter No. 3 set out in the margin.*fn5 Perhaps the best expression of Congress' intent in passing the Act was employed by plaintiffs' counsel in oral argument in this court: viz., "Power to the powerless," that is to say, it was the intention of Congress to cause the poverty-stricken citizens of our larger cities to improve their lot by their own efforts.

Many, in fact most, of the operative facts in this case are not disputed. Those set out in the opinion of the District Judge, 329 F. Supp. at 1126-1131, and stated in our former opinion, 428 F.2d at 756-758, as well as those in the present extensive record, are not at substantial variance though the interpretations to be put on them and views as to applicable law differ. Those essential to our decision follow.

Pursuant to the Act, on March 3, 1967 Philadelphia applied to the Secretary for a grant to enable the planning of a Model Cities Program. Soon thereafter AWC was organized in the so-called "Target area."*fn6 The AWC consisted of approximately 458 associated persons from approximately 145 organizations within the target area. This was intended to provide the local "citizen participation" in the Philadelphia program. Shortly thereafter a contract was entered into to provide the required citizen participation.

On November 16, 1967 the City received a grant of $203,000 from the Secretary for the planning and development of its Model Cities Program and after extensive planning for a period in excess of a year, by consultation between the City and AWC, the City on December 31, 1968 submitted to the Secretary an application for a grant to implement a Model Cities Program for Philadelphia.

On February 5, 1969, a Regional Inter-Agency Coordinating Committee meeting was held in Philadelphia to review with the City and AWC Philadelphia's proposed 1968 submission for Model Cities funds. This meeting was attended by HUD representatives, by members of the Philadelphia City Demonstration Agency (CDA), and AWC. At this meeting, apparently for the first time, an issue of conflict of interest was raised by HUD. In this connection the District Judge stated in his opinion: "By conflict of interest, HUD meant the problems which might arise if the same citizen participation unit which was planning and evaluating the Model Cities Program, namely AWC, was also to operate the program. Mr. William Meek, Executive Director of the AWC, attended the February 5th meeting and was aware of the HUD policy."*fn7 The accuracy of these statements cannot be doubted. The issue of conflict of interests has become the guiding star of the arguments of AWC's opponents. A conflict was undoubtedly present and was a contributing factor to the actions of the defendants complained of by AWC and set out hereinafter. It must be borne in mind that the City was required to approve all plans.*fn8

On March 19, 1969 Mayor Tate received a letter from Assistant Secretary Floyd H. Hyde of HUD. A similar letter was sent to the Mayors of other cities engaged in the Model Cities Program and was an expression of participation policy as of that date. The letter as quoted in our previous opinion stated: "'. . . HUD's policy is that local City Demonstration Agencies (and their Model Cities staff and citizen participation arms) are not intended to serve as program operators. CDA Letter Number 6 specifically states that "The CDA is not meant to be a multifunctional operating agency." CDA's are expected to coordinate the activities of the various existing agencies whose new or existing functions impact on the model neighborhood. CDA's are expected to use their ...

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