The late Judge McLean granted a temporary restraining order barring the Housing Authority from renting apartments to anyone other than members of the plaintiff class (former site occupants). On May 23, 1972, Judge Frankel, on a motion for a preliminary injunction, filed an extensive opinion, reported at 344 F. Supp. 737, holding (1) that the Housing Authority's actions in renting apartments to persons other than members of the plaintiff class violated the Authority's own regulation, GM 1810, and thereby deprived plaintiffs of due process; and (2) that, in renting apartments on a priority basis to Jewish tenants, the Authority violated the Establishment Clause of the First Amendment, the Equal Protection Clause, and (because the action disobeyed the anti-discrimination clauses of 42 U.S.C. § 2000d and 3604) the Supremacy Clause of the Constitution. The policy of the Authority is established by its three members in the form of resolutions.
I. The background of this appeal is set forth in the decisions of Judge Frankel granting preliminary relief to the plaintiff class, 344 F.Supp. 737 (S.D.N.Y. 1972), and of Judge Lasker granting permanent relief on plaintiffs' motion for summary judgment after a limited hearing more fully described infra, 354 F.Supp. 941 (S.D.N.Y. 1973). We therefore restrict ourselves to a summary of those facts and proceedings necessary to an understanding of our decision.
See Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972).See Otero v. New York City Housing Authority, 344 F. Supp. 737, 745 (S.D.N.Y. 1972).See Paul v Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976).
As applied in the FHA context, this provision prohibits intentional discrimination on the basis of race in the site selection process, see e.g. B. A. S. I. C. v Kemp, 776 F. Supp. 637 (D. R.I. 1991); Gautreaux v Chicago Housing Authority, 296 F. Supp. 907 (N.D. Ill. 1969), and eliminates race-based tenant preferences. See e.g. Otero v New York City Housing Authority, 344 F. Supp. 737 (S.D.N.Y. 1972). As discussed above, the record in this case reveals no evidence of intentional discrimination in the development and implementation of the County's revitalization plan.
The class proposed by the plaintiffs may be either limited, see 7 Wright & Miller s 1760, at 583 n. 98 (1972 & Supp.1979), or expanded. See Anderson v. Butz, 428 F.Supp. 245, 247 (E.D.Cal.1975) (proposed local class expanded nationwide), aff'd, 550 F.2d 459 (9th Cir. 1977); Otero v. New York City Housing Authority, 344 F.Supp. 737, 747 (S.D.N.Y.1972) (proposed class of non-whites expanded to include certain whites). In addition, " redefinition may be undertaken . . . on the Court's initiative or upon the motion of a party."
On the other hand, it is not necessary that the affected party demonstrate that the denial of the specified procedures will result in a deprivation of a property interest of a kind which would require a hearing, e.g., a tenured employment position. It is sufficient if plaintiff demonstrates that the government's failure to comply with its own procedures will have a pecuniary impact or result in a denial of a right or privilege which plaintiff otherwise would have. Courts have held that there was a denial of due process when a governmental entity failed to comply with regulations or procedures resulting in: (1) an interference in private non-tenured employment, Stokes v. Lecce, 384 F. Supp. 1039, 1048-49 (E.D.Pa. 1974); (2) removal from a school honor society, Warren v. National Ass'n of Secondary School Principals, 375 F. Supp. 1043, 1048 (N.D.Tex. 1974); (3) denial of priority in public housing, Otero v. New York City Housing Authority, 344 F. Supp. 737, 745 n. 13 (S.D.N.Y. 1972); (4) termination of a discretionary federal emergency loan program, Berends v. Butz, 357 F. Supp. 143, 151-53 (D.Minn. 1973); and (5) denial of admission to a municipal university, Hupart v. Bd. of Higher Ed. of City of N.Y., 420 F. Supp. at 1106-07. Courts have recognized the application of this arbitrariness doctrine to cases involving non-tenured employment.
Had there been binding regulations which HUD violated, this may have given rise to a due process argument on behalf of the plaintiffs. See, e. g., Otero v. New York City Housing Authority, 344 F. Supp. 737 (S.D.N.Y. 1972). But such was not the case here.
At least two relocation sites, parcel la and the Arden Furniture Store, which plaintiffs had considered prior to deciding on parcel 4c were disposed of during this period. Finally, council denied plaintiffs effective relocation assistance by not affording them the relocation preference which was extended to other businesses displaced by the NDP. Cf. Cy Ellis Raw Bar v. D.C. Redevelopment Land Agency, supra; Otero v. New York City H. Auth., 344 F. Supp. 737 (S.D.N Y 1972). Plaintiffs were entitled to expect that they would be treated in the same fashion as other displaced businesses, and to rely on those expectations in their relocation efforts. In deviating from its established policy, council frustrated these expectations, treated plaintiffs in a disparate fashion, and denied them effective relocation assistance.
While an affirmative action program may be appropriate to ensure that all persons are afforded the same opportunities or are considered for benefits on the same basis, it is not permissible when it allocates a scarce resource (be it jobs, housing, or financial aid) in favor of one race to the detriment of others. See, e.g., Otero v. New York City Housing, 344 F. Supp. 737 (S.D.N.Y. 1972). Such is the situation in this case.
See generally Ackerman, Integration for Subsidized Housing and the Question of Racial Occupancy Controls, 26 Stan. L. Rev. 245, 251-70 (1974); Note, 85 Harv. L. Rev. 870, 875-76 (1972).Otero was decided in two parts at the trial level, 354 F. Supp. 941 (S.D.N.Y. 1973) (preliminary injunction granted), and 344 F. Supp. 737 (S.D.N.Y. 1972) (order). Judge MANSFIELD, writing for the Second Circuit, analyzed the constitutional basis for the Authority's duty to integrate in this fashion.