Jenkins v. Missouri Brief for Appellee

    ON APPEAL FROM THE UNITED STATES D: 
FOR THE WESTERN DISTRICT OF M

Nos. 85-1765WM, 85-1949WM, 85-1

IN THE UNITED STATES COURT OF APPEALS 
FOR THE EIGHTH CIRCUIT

KALIMA JENKINS, et al. , 
Appellants

STATE OF MISSOURI, et al.
Appellees.

I STRICT COURT 
OURI

BRIEF FOR THE DEPARTMENT OF HOUSING

ROBERT G. U 
United Sta

RICHARD K. fc 
Actinq Assi ILLARD

RICH
s Atto ey



SUMMARY AND REQUEST FOR ORAL ARGUMENT 
This is a school desegregation case in which plaintiffs seek 

an interdistrict remedy to eliminate the vestiges of the dual 
school system imposed by the state and local school districts. 
The district court, after an extensive trial, rejected 
plaintiffs' claim that HUD illegally caused segregation in the 
schools, and, accordingly, entered judgment in favor of HUD.

HUD requests twenty (20) minutes for oral argument.



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TABLE OF CONTENTS

QUESTION PRESENTED..................................
STATEMENT...........................................

A. Racial Composition of the Schools and the
District Court's Ruling Imposing Liability 
on the State and KCMSD.....................

B. HUD's Role in Administering Federally-
Assisted Housing Programs in the Kansas 
City Area, and the District Court's Finding 
That HUD Was Not Responsible for Illegal 
Segregation in the Schools.................
(i) Mortgage Insurance For Homeowners.....
(ii) Federal Funding for Urban Redevelopment

Programs..............................
(iii) Public Housing........................
(iv) Section 235...........................
(v) HUD-Assisted Multifamily Housing......

SUMMARY OF ARCUMENT.................................
ARGUMENT............................................

I. CONSTITUTIONAL AND STATUTORY STANDARDS.....
A. The Constitutional Standard.............
B. The Title VI Standard..................
C. The Title VIII Standard................

II. THE DISTRICT COURT PROPERLY RULED THAT THE
ADMINISTRATION OF THE FEDERALLY-INSURED OR 
FEDERALLY-FUNDED HOUSING PROGRAMS IN THE 
KANSAS CITY AREA DOES NOT PROVIDE A BASIS 
FOR HOLDING HUD LIABLE FOR ANY ILLEGAL 
SEGREGATION EXISTING IN THE SCHOOLS........

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A. The District Court's Factual Determina­
tions Can Not Be Overturned Unless They 
Are Clearly Erroneous..................  29

B. FHA Practices Prior To Shelley v.
Kraemer Do Not Render HUD Liable For 
Present Day Segregation in the Schools.. 30

C.
a

HUD Took Appropriate Action to Enforce 
Non-Discrimination Policies In Public
Housing Tenant and Site Selection...... 35

D. HUD Acted Within Its Discretion In 
Entering Into An Agreement With LCRA And 
The City That Required Corrective Action 
For Past Discrimination In Relocation 
Policies...............................  40

E. HUD Has Not Failed To Comply With Any 
Affirmative Duties To Further Fair 
Housing................................  42

F. Plaintiffs Did Not Prove That HUD's
Actions Caused Illegal Segregation
Of The Schools.........................  44

CONCLUSION...........................................  47

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TABLE OF AUTHORITIES
Page

Cases:
Allen v. Wright, 104 S. Ct. 3315 (1984).............  22
Alschuler v. HUD, 686 F.2d 472 (7th Cir. 1982)...... 28
Anderson v. City of Alpharetta, Georgia,

737 F. 2d 1530 (11th Cir. 1984).................... 29,39
Anderson v. City of Bessemer City, N.C.,

105 S. Ct. 1504 (1985)............................  1,18,29,30
Blum v. Yaretsky, 457 U.S. 991 (1982)............... 24,25
Citizens to Preserve Overton Park, Inc. v. Volpe,

401 U.S. 402 (1971)...............................  28
City of Memphis v. Greene, 451 U.S. 100 (1981)...... 24
Clients Council v. Pierce, 711 F.2d 1406

(8th Cir. 1983)...................................  1,18,23,26,27,37,38,42
Community Brotherhood of Lynn, Inc. v. Lynn 

Redevelopment Authority, 523 F. Supp. 779 
(D. Mass. 1981)...................................  26

Craft v. Metromedia, Nos. 84-1336 & 84-1480
(8th Cir. June 28, 1985)..........................  29

Drayden v. Needville Ind. Sch. Dist.,
642 F. 2d 129 (5th Cir. 1981)......................  27

Eastern Kentucky Welfare Rights Org. v.
Simon, 426 U.S. 26 (1976).........................  22

Garrett v. City of Hamtramck, 503 F.2d 1236 
(6th Cir. 1974)....................................  25

Gautreaux v. Romney, 448 F.2d 731 (7th Cir. 1971).... 25
Guardians Association v. Civil Service Commission

of the City of New York, 463 U.S. 582 (1983)...... 18,27
Heckler v. Chaney, No. 83-1878 (March 23, 1985)..... 27,28
Jaimes v. Toledo Metropolitan Housing Authority,

758 F,2d 1086 (6th Cir. 1985)................

- iii -

28



Jenkins v. State of Missouri, 593 F. Supp.
1458 (W.D. Mo. 1984)..............................  passim

Jones v. Tully, 378 F. Supp. 286 (E.D.N.Y. 1974),
aff'd mem. , 510 F.2d 961 (2d Cir. 1975)...........  28

National Black Police Ass'n v. Velde, 712 F.2d 569 
(D.C. Cir. 1983), cert. denied, 104 S. Ct. 2180 
(1984)............................................  25

NAACP v. Medical Center, Inc., 599 F. 2d 1247
(3d Cir. 1979)....................................  26

Norwood v. Harrison, 413 U.S. 455 (1973)............ 24,25
Personnel Administrator of Massachusetts v. Feeney,

442 U.S. 256 (1979)................................ 1,18,24,
25,37

Pullman-Standard v. Swint, 456 U.S. 273 (1982)...... 24
Rende 11-Baker v. Kohn, 457 U.S. 830 (1982).......... 25
Shannon v. HUD, 436 F.2d 809 (3d Cir. 1970)......... 39,43
Shelley v. Kreamer, 334 U.S. 1 (1948)...............  6,18,20,

30,31,42
Simon v. Eastern Kentucky Welfare Rights
Organization, 426 U.S. 26 (1976)..................  22

Swann v. Charlotte-Mecklenburg Board of Education,
402 U.S. 1 (1971).................................  23-24

Unimex, Inc. v. HUD, 574 F.2d 1060 (5th Cir. 1979)... 27
United States v. Yonkers Board of Educ.,

594 F. Supp. (S.D.N.Y. 1984)....................... 27
Village of Arlington Heights v. Metropolitan

Housing Development Corp., 429 U.S. 252 (1977).... 23,25
Young v. Pierce, E.D. Tex. No. P-80-8-CA

(July 31, 1985).................................... 25-26
Washington v. Davis, 426 U.S. 229 (1976)...........  24,25
Constitution, Statute, Regulations and Rules:
U.S. Constitution:

Article III.....................................  22

- IV



Administrative Procedure Act, 5 U.S.C. 701, et seq.. 26
5 U.S.C. 701(a) (2)..............................  27
5 U.S.C. 702....................................  27
5 U.S.C. 706....................................  18
§ 236, 12 U.S.C. 17152-1........................  13

Housing Act of 1937, 42 U.S.C. 1437 et seq.......... 10
42 U.S.C. 1437f.................................  13,16

Housing Act of 1949:
42 U.S.C. 1450..................................  8

National Housing Act of 1934:
12 U.S.C. 1709..................................  7
§ 221(d)(2), 12 U.S.C. 1715 1 (d)(2)............  7
§ 221(d)(3), 12 U.S.C. 1715 1 (d)(3)............  13
§ 221(d)(4), 12 U.S.C. 1715 1 (d)(4)............  13
§ 231, 12 U.S.C. 1751v....................... . .. 13

42 U.S.C. 3601...................................... 42
42 U.S.C. 3608(d) (5)................................ 42
Federal Rules of Civil Procedure, Rule 52(a)........ 29
24 C.F.R. 200.300, et seq...........................  35
24 C.F.R. 200.600...................................  14-15
24 C.F.R. 200.700, et seq...........................  14
24 C.F.R. 841.11(d)................................. 37
24 C.F.R. 841.202................................... 15
24 C.F.R. 880.206................................... 15
Legislative Materials:
114 Cong. Rec. 2274 (1968)..........................  42
114 Cong. Rec. 2525 (1968)..........................  42
114 Cong. Rec. 9569 (1968)..........................  42
Mi scellaneous:
Executive Order 11063 (1962)........................  34
FHA Underwriting Manual, Section 242................  33,34

v



IN THE UNITED STATES COURT OF APPEALS 
FOR THE EIGHTH CIRCUIT

Nos. 85-1765WM, 85-1949WM, 85-1974WM

KALIMA JENKINS, et al., 
Appellants,

v.

STATE OF MISSOURI, et al., 
Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 
FOR THE WESTERN DISTRICT OF MISSOURI

BRIEF FOR THE DEPARTMENT OF HOUSING 
AND URBAN DEVELOPMENT AS APPELLEE

QUESTION PRESENTED
Whether the district court was clearly erroneous in finding 

that HUD was not responsible for any illegal racial segregation 
existing in the schools of the Kansas City, Missouri 
metropolitan area.

Anderson v. City of Bessemer City, N.C., 105 S. Ct. 1504 
(1985).

Personnel Administrator v. Feeney, 442 U.S. 255 (1979).
Clients Council v. Pierce, 711 F.2d 1406 (8th Cir. 1983).



STATEMENT

Plaintiffs brought this school desegregation case against 
the Kansas City School District ("KCMSD"), the state and various 
state agencies, and three federal agencies, including HUD. They 
sought an interdistrict remedy to eliminate the vestiges of the 
dual school system imposed by the state and local school 
districts. Plaintiffs' claim against HUD is that it has 
illegally caused racial segregation in the public schools in the 
Kansas City, Missouri metropolitan area. Plaintiffs do not seek 
to hold HUD liable for segregated housing, except as it relates 
to school segregation.^- And, of course, HUD is not liable for 
any illegal school segregation caused by other parties to this 
suit. Following an extensive trial, the district court, on 
September 17, 1984, ruled in favor of HUD on all claims against 
it. 593 F. Supp. 1485.* 2

Indeed, plaintiffs would not have standing to bring a 
housing suit. Plaintiffs did not present evidence that they 
have ever lived in, sought admission to, or are eligible for 
federally-insured or subsidized housing, or alleged any non­
school related injury. Moreover, we argue infra, p. 22, n. 12, 
that an alternative ground for affirming the district court's 
ruling in favor of HUD would be for this Court to rule that 
plaintiffs had no standing to bring this action against HUD even 
on the school-related issue because they have not shown that 
illegal segregation in the schools is fairly tracerole to HUD's 
housing actions.
2 Plaintiffs sought declaratory relief against HUD and an 
order, inter alia, (a) that enjoins HUD from taking any action 
that aggravates the racial identifiability of the schools, (b) 
requires HUD to withdraw any financial support until a plan for 
eliminating the vestiges of past discrimination has been 
approved by the court and implemented, and (c) requires HUD to 
prepare and submit to the court a statement explaining how it 
will administer its affairs in the Kansas City Metropolitan area 
in the future so as to eradicate the effects of previously

(CONTINUED)
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In the following statement attempting to put in perspective 
the facts surrounding plaintiffs' claim against HUD and the 
district court's resolution of the factual questions involving 
HUD, we will describe (A) in a brief and general manner, the 
racial composition of the schools in the Kansas City area and 
the district court's ruling that the State and KCMSD had not 
satisfied their obligation to dismantle the prior dual school 
system that they created; and (B) HUD's role in administering 
federally-assisted housing and community renewal programs in the 
Kansas City area, and the district court's finding that there 
was no basis for holding HUD legally responsible for segregation 
in the schools.

A . Racial Composition of the Schools and the District 
Court's Ruling Imposing Liability on the State and KCMSD.

Missouri mandated separate schools for blacks and whites 
prior to the Brown decision in 1954. 593 F. Supp. at 1490. In
the 1954-55 school year, 18.9% of the KCMSD's students were 
black; the nearby suburban school districts ("SSD") had only a

3very small number of black students. (Ex. P 53E). 0 the 90
schools operated by KCMSD in 1954, 15 were for black students. 
593 F. Supp. 1492. The schools for blacks were located in the 3

(FOOTNOTE CONTINUED)
imposed segreation. Amended Complaint. Plaintiffs' prayer for 
relief also sought "a decree granting whatever remedial relief 
the Court finds appropriate to correct the conditions caused by 
the violations established." Id.
3 In citations to the record, we will use "Ex." for Exhibit 
and "Tr." for transcript.

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black-concentrated areas of Kansas City. Id. During this 
period, the suburban school districts also operated segregated 
schools as required by state law, and those school districts 
with insufficient numbers of blacks to maintain the state- 
required separate school for blacks made arrangements with other
districts to educate their black children. 593 F. Supp.

41490.
Following Brown I ,  KCMSD continued to operate a number of 

virtually all-black public schools. (Tr. 3017, Ex. K2). By 
1970, the enrollment in KCMSD had become majority black. Id. 
KCMSD stipulated in this litigation that as of 1977 it had not 
eliminated all of the vestiges of the prior dual school system 
imposed under state law. 593 F. Supp. at 1492. 3y 1977, 25 one- 
race schools under the pre-1954 state-imposed segregated system 
remained 90% or more of the same race and four other black 
schools from the dual school system were still predominately 
black when they closed in 1958. Id. In 1977 KCMSD adopted a 
plan that eliminated the 15 all-white schools and reduced the 
number of schools with 90% or more black populations to 28.
Id. at 1493.

The district court imposed liability on the State and KCMSD 
on the ground that "having created a dual system" (593 F. Supp. 
at 1504), they failed to satisfy their "constitutional

The only black high school in KCMSD during this period, 
Lincoln High School, served as a racial magnet attracting black 
students from the whole metropolitan area and black families to 
the neighborhood. (Tr. 14,784, 14,786.)

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obligation to affirmatively dismantle" the vestiges of that 
system. _Id. at 1505. The court denied relief that would have 
involved the suburban school districts in a metropolitan-wide 
student assignment plan, finding that "there was no 
unconstitutional action on the part of any of the eleven 
suburban school districts nor was there evidence of 
constitutional violations by those school districts which had 
any significant segregative effect within their own district or 
on the KCMSD."^ (Jt. Add. B, B165.) The court, thus, limited 
the relief imposed to schools within KCMSD.

B. HUD's Role in Administering Federally-Assisted Housing 
Programs in the Kansas City Area, and the District Court's 
Finding That HUD Was Not Responsible for Illegal Segregation in 
the Schools.

In adjudicating plaintiffs' claim that HUD's housing actions 
were responsible for illegal school segregation in Kansas City, 
the district court considered whether HUD's actions "were 
arbitrary and capricious," whether HUD acted "with 
discriminatory intent or purpose," and whether there was any 
"causal connection" between HUD's actions and segregated schools 
in Kansas City. 593 F. Supp. at 1497. Based on these 
considerations, and after full discovery and trial, the district 
court issued detailed findings of fact completely exonerating 
HUD. 593 F. Supp. at 1495-1501.

The district court had dismissed the case against the 
suburban school districts on a Rule 41(b) motion on the ground 
that plaintiffs had not shown that they had acted in a racially 
discriminatory manner that substantially caused racial 
segregation in the schools of another district.

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The district court found that a dual housing market exists 
in the Kansas City area, 593 F. Supp. at 1491, but the court 
refused to find, as plaintiffs urged, that HUD or its 
predecessors were responsible for the dual housing market or for 
the segregation existing in the area schools. Rather, federally- 
insured or financed housing programs (while not wholly success­
ful in achieving "the integration HUD desired." 593 F. Supp. at 
1500) have created integrative housing opportunities for area 
residents where such opportunities had not previously existed.

(i) Mortgage Insurance for Homeowners. Since its inception 
in the 1930's, the Federal Housing Administration ("FHA") has 
guaranteed loans that borrowers have obtained from private 
lenders. Minorities are among the beneficiaries of such 
financing. Although FHA's early record had deficiencies common 
to the times (FHA appraisal manuals in the 1930's indicated that 
that racial restrictive covenants would tend to insure a stable 
community enhancing the value of property), by 1949 reference to 
racial restrictive covenants was deleted from the manuals and 
the FHA refused to insure the mortgage on any property that

gcontained such restrictions. 593 F. Supp. at 1497.
The district court found that HUD did not act arbitrarily or 

capriciously in considering the existence of racially 
restrictivi covenants (enforced by Missouri courts until after

Racially restrictive covenants were brought about by private 
action and enforced by the courts of Missouri until after 
Shelley v. Kraemer, 334 U.S. 1 (1948). FHA did not enforce such 
covenants.

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Shelley v. Kraemer, 334 U.S. 1 (1948) in appraising property to 
be insured by FHA. 593 F. Supp. at 1497. Moreover, the court 
found that "[i]f FHA's appraisal practices prior to 1950 had any 
effect on present racial housing patterns, it would, at most, be 
de minimis." Id. The areas most affected by the covenants 
were occupied by blacks soon after the covenants were no longer 
enforceable. Id. In addition, the number of homes insured by 
FHA prior to 1950 was extremely small when compared with the 
total housing transactions that could affect the racial 
composition of neighborhoods in Kansas City. (Id.; tr.
20,102; Ex. FD 37B).

No evidence was presented to show the current distribution 
of HUD-insured housing throughout the Kansas City, Mo.-Ks. 
housing market. Plaintiffs' evidence was restricted to housing 
in Clay, Jackson, and Platte Counties, Mo. (Ex. P 25A-F). HUD- 
insured single family housing is located through out these three 
counties (Id., James dep. 25-26) and the percentage of black 
homeowners in these counties with HUD-insured mortgage loans 
(12.6%, 1975-82 (Ex. P 26A)) is higher than the percentage of 
black owned homes (11.4%, 1980 census (Ex. P 2304)). Moreover, 
no evidence was presented on the distribution of applications 
for FHA insurance through the area.

The court also found that there was "no evidence whatsoever 
to support plaintiffs' contention . . . that blacks were
routinely denied FHA insurance well past 1954." 593 F. Supp. at
1500. Federal mortgage insurance is available to all eligible

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home buyers regardless of race. Two black realtors, who 
specialize in home sales in southeast Kansas City, testified 
that FHA/VA mortgage insurance was the only source of mortgage 
loans available in many black neighborhoods. (Tr. 9475-78;
9517; 9535-35). Furthermore, FHA mortgage insurance has played 
(and continues to play) an important role in financing homes 
purchased by blacks in suburban areas, including the suburban 
school districts involved in this case. (Tr. 594; 11,727-29).

The court also found that "[t]he evidence does not support 
plaintiffs' contention that HUD's practices in the sale of homes 
on which its insured mortgages had been foreclosed was racially 
discriminatory." 593 F. Supp. at 1501. The court found only 
one instance in which a management broker had presold a home in 
a white areas to whites to avoid the possible purchase of the 
home by blacks. 593 F. Supp. at 1500. HUD investigated this 
case, reprimanded the broker, refused to renew his contract to 
manage HUD properties, and altered the manner in which such 
homes were sold in order to prevent any future occurrences of 
preselling. Id. The court noted that there was some evidence 
that some HUD held homes in the Southeast Corridor (a 
predominately black area of Kansas City) were allowed to

In addition to the original FHA-insured mortgage program 
authorized by section 203 of the National Housing Act of 1934, 
12 U.S.C. 1709, HUD-administered single family home mortgage 
insurance guarantees have been extended to homebuyers through 
several programs,including mortgage insurance under section 
221(d)(2), 12 U.S.C. 17151(d)(2), for low and moderate 
income homeowners, especially those displaced by urban renewal 
or in declining neighborhoods.

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deteriorate and fall in disrepair, but the court found that, 
even assuming the accuracy of such evidence, "there was an 
absence of any evidence to support a finding that such neglect 
of the property by HUD was because of racially discriminatory 
intent or purpose." 593 F. Supp. at 1501. Finally, in any 
event, there was no showing that FHA's actions had any effect on 
school segregation as FHA-insured housing is scattered 
throughout the metropolitan area and plaintiffs presented no 
evidence showing the racial composition of FHA insured homes or 
the number of school age children living in them.

(ii) Federal Funding for Urban Redevelopment Programs. HUD 
provided federal funds to the Land Clearance for Redevelopment 
Authority ("LCRA"), which was established by the City of Kansas 
City, Mo. to administer urban redevelopment programs under the 
Housing Act of 1949, 42 U.S.C. 1450. The court rejected 
plaintiffs' claims that HUD violated Title VI of the Civil 
Rights Act of 1964 and Title VIII of the Civil Rights Act of 
1968 by continuing to fund LCRA after it knew that LCRA was 
following racially discriminatory practices, ^.e., relocating 
blacks primarily in the southeast part of Kansas City while 
whites were being relocated throughout the Kansas City area.
593 F. Supp. at 1497-98. The court found that HUD did not act 
arbitrarily or capriciously or violate plaintiffs' Fifth 
Amendment rights by taking administrative action to stop the 
alleged discrimination rather than to cut off funding and 
thereby penalize the persons who needed nousing the most. 593 
F. Supp. at 1498. After HUD completed a Title VI compliance

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investigation in 1972, LCRA was required immediately to cease 
discriminating and to provide HUD with information concerning 
each relocatee to aid HUD in monitoring whether LCRA was 
providing referrals on a non-discriminatory basis. (Ex. P 
2913A). When LCRA's referrals showed no improvement, HUD 
refused to fund the City's 1974 Neighborhood Development Program 
unless the City agreed to assume from LCRA responsibility for 
all relocation services. 593 F. Supp. at 1498; tr. 20,669- 
670. On June 25, 1973, HUD, LCRA, and the City executed, a 
Cooperation Agreement (Ex. ED 239) by which the City assumed 
from LCRA responsibility for all urban renewal and Neighborhood 
Development Plan relocation. (Ex. FD 242). Under the 
agreement, each relocatee must receive at least three referrals, 
at least one of which must be located outside of the "innercity" 
of Kansas City. (Ex. FD 239).^

(iii) Public Housing. Established by the U.S. Housing Act 
of 1937, the low income public housing program, 42 U.S.C. 1437, 
et seq., is operated in each locality by a public housing 
authority, appointed by the local government. HUD contracts on 
behalf of the United States to provide financial assistance to 
aid in the development and operation of public housing projects.

The Housing Authority for Kansas City ("HAKC") operates 
thirteen separate housing developments. The district court

HUD also provided funds to the Independence LCRA for 
redevelopment projects. Very few black families were relocated 
to Kansas City, Mo. from Independence urban renewal areas.(Tr. 3894).

10



found that the location of these projects was in accordance with 
applicable federal statutes. 593 F. Supp. at 1499. Seven of 
the nine projects for family occupancy were constructed by HAKC 
between 1952 and 1963 (Ex. P 27B). These projects were all 
located within the model cities or urban renewal areas in accord 
with the objectives of the Housing Act of 1949 and 1954, Pub.
L. 81-171 and 83-560, to facilitate the redevelopment of 
blighted residential areas through the construction of new low 
income housing. (Ex. P 2917). The two other family projects, 
containing 50 units each, consist of single family homes located 
throughout Kansas City. (Ex. P 1609; Federal Defendants 
Objections to Exh. P 27B). No new public housing developments 
for families have been constructed in Kansas City since 1963.9

From 1958 to 1967, HAKC followed a "freedom of choice" plan 
for tenant assignment to public housing units, under which 
tenants are permitted to select the units of their choice. In 
1968, HAKC adopted a new assignment plan, in accordance with HUD 
regulations, reguiring applicants to select a suitable vacant 
unit from among the three development locations with the highest 
vacancy rate or be moved to the bottom of the waiting list.
(Ex. P 1596FFF).

A HUD Title VI investigation in 1976 revealed that HAKC had 
not followed the 1968 HUD-approved tenant assignment plan. HAKC 
had continued to allow each applicant to choose a suitable

g There are 50 units of public housing in Excelsior Springs,
Mo., 120 units in Independence, Mo., 16 units in Smithville,
Mo., and 8 units in Lee's Summit, Mo. (P. 27B).

11



vacant unit in any development. (Ex. P 1596FFF). Following 
this investigation, HAKC and HUD entered into a new Compliance 
Agreement in March 1977 to bring the administration of the 
public housing program into compliance with HUD requirements. 
Under this agreement, applicants must be assigned to suitable 
units at one of the three developments with the highest vacancy 
rates. In order to remedy HAKC's past discriminatory practices, 
the new assignment plan provides for a minority preference 
option which permits the immediate placement of any applicant or 
transfer of any resident to a development in which the 
applicant's or tenant's racial group comprises 33% or’less of 
the development's population. Based on the evidence presented, 
the court found that HUD's monitoring of the public housing 
program was neither arbitrary nor capricious, and that the 1977 
compliance agreement was reasonable. 593 F. Supp. at 1499 .

Moreover, plaintiffs did not establish a link between HUD's 
action involving public housing and segregated schools. Racial 
identifiabi1ity of schools resulted from operation of the dual 
school system and the manner in which KCMSD drew elementary 
school attendance zones in areas where public housing was 
located. For example, students from the T.B. Watkins housing 
project, which had been all-black before 1958, were sent to 
Yates Elementary School, which maintained a 99-100% black 
enrollment until 1977, instead of the nearby Woodland Elementary 
School, which was majority white until 1962 (Ex. K 2).

12



(iv) Section 235. Congress amended the National Housing
Act in 1968 to authorize a home mortgage insurance and interest 
subsidy program for low-income families known as the Section 235 
program. Section 235 home ownership subidies became available 
in the Kansas City area in 1969. (Tr. 12,061-62). Approximate­
ly 30% of the families (120 families) who purchased Section 235 
housing in heavily black southeast Kansas City between 1969 and 
1972 were white. (Tr. 12,371; 12,062-63).

Between 1950 and 1970, the white population of southeast 
declined by 67,000, while the black population increased by 
64,000. (Tr. 12,060-61). The Section 235 program began after 
subtantially all of this massive shift in the racial population 
of Southeast Kansas City had occurred. (Tr. 12,048-49). Most 
of the schools in southeast Kansas City had become majority 
black prior to the start of the Section 235 program in 1969.
(Ex. K 2). The rapid racial turnover that occurred in southeast 
Kansas City schools in the 1960's was attributed by plaintiffs' 
witnesses to a variety of non-HUD related factors, see infra, 
pp. 44-45, and plaintiffs' expert witness, Charles Hammer, 
testified that racial turnover in the southeast area was 
"inevitable," regardless of the existence of the Section 235 
program. (Tr. 12,034, 12,061).

(v) HUD-Assisted Multifamily Housing. HUD has provided 
federal assistance for multifamily housing through a variety of 
programs, including section 221(d)(3) & (4), 12 U.S.C 1715 1  

(d)(3), (4), under which mortgage insurance is provided to
developers of multifamily rental or cooperative housing for low

13



and moderate income or displaced families; section 231, 12 
U.S.C. 1751v, under which mortgage insurance is available to 
facilitate financing of rental housing for the elderly and 
handicapped; and section 236, 12 U.S.C. 1715z-l, under which
provides, in addition to mortgage insurance, interest subsidies 
to non-profit, limited-dividend, or cooperative organizations 
(and private developers who sell projects to such
organizations) to reduce interest rates to as low as 1% in order 
to produce new or substantially rehabilitated rental or 
cooperative units for lower-income households. The section 236 
program was suspended in 1973. The Section 8 program. 42 
U.S.C. 1437f, was established in 1974 and provides rent 
subsidies to lower-income persons by payments directly from the
federal government to landlords.

The district court found "that HUD followed a balanced 
housing policy and attempted to insure that assisted housing
iocated in the innner city area was balanced by assisted housing

it cqo T? Shod a."fc 1499. TIibd© projects in the suburban areas. 593 F. Supp.
were 6,832 HUD insured or subsidized multifamily units
KCMSD and 9,872 such units in the eleven suburban school

districts. Id.
hud published site selection regulations, known as "Project 

Selection Criteria," 24 C.F.R. 2C0.700, et seg., which the court 
found to be "sufficient to enable HUD to make a reasonable 
determination that a particular project was in compliance with 
Titles VI and VIII." 593 F. Supp. at 1499. Furthermore, the 
court found that HUD reviewed all proposals for multifamily

14



housing projects and disapproved some proposed projects because 
they were located in areas of minority concentration. Id. The 
court concluded that "[t]here was no evidence in the case that 
the practices of HUD in site selection and approval for 
federally subsidized multifamily housing had a substantial 
effect upon the racial makeup of schools within the KCMSD."

HUD also established affirmative marketing regulations, 24
C.F.R. 200.600, 841.202, 880.206, in an effort to achieve 
integrated housing in the HUD assisted multifamily projects. 
Although they did not achieve the degree of integration that HUD 
desired, the results were "not the result of the lack of 
affirmative marketing efforts." 593 F. Supp. at 1500. As the 
court found, "the evidence reflects that the Kansas City HUD 
office monitored these affirmative fair housing and marketing 
plans very closely." 593 F. Supp. at 1499. The district court 
described the evidence showing HUD's affirmative marketing 
requirements as follows:

The court cited the East Hills Village section 236 project 
as an example showing that even predominately black multifamily 
projects did not impact adversely on the racial composition of 
KCMSD schools. 593 F. Supp. at 1499. The East Hills Village 
was located in the Knotts Elementary School attendance zone. By 
1969 Knotts school had become majority black. (Ex. K2.) By 
1971, when the East Hills Village project was approved by HUD, 
Knotts School had become 84.3% black, and in 1973 when the 
project opened the school was 91.9% black. Id. Thus, although 
90% of the elementary school children living in East Hills 
Village were black when the project opened in 1973, the 
existence of the project did not adversely affect the racial 
composition of Knotts School. 593 F. Supp. at 1499.

15



Each project sponsor was required to 
establish an "anticipated occupancy goal" for 
tenants which was both realistic for the 
project area and which would provide greater 
integration than the current racial mix 
. . . . The review also assured that
advertising and contadt with community groups 
were adequate to reach persons who would not 
otherwise be expected to apply for such 
housing. . . . Its review involved a pre­
occupancy conference with the sponsor to 
discuss the provisions of each marketing plan 
and how the plan was to be implemented as 
well as an appraisal of the sponsor's past 
affirmative marketing experience. . . . With
respect to HUD's monitoring of the plans, 
sponsors were required to submit monthly 
occupancy reports until the project was 95% 
occupied. Thereafter, occupancy reports were 
to be submitted annually.

593 F. Supp. at 1500. The court concluded: "[c]ertainly there 
was nothing about the marketing regulations or the manner in 
which they were implemented and monitored that was arbitrary or 
capricious." Id.^

The Section 8 Existing Housing program, 42 U.S.C. 1437f, 
which authorizes HUD to provide rental subsidizies to low-income

The court also recited an example of a section 235 
development located in predominately white north Kansas City 
that made a good affirmative marketing effort, but which was 
"unsuccessful in attracting the expected number of black 
families to the project." 593 F. Supp. at 1500. The 
development is Parvin Estates. The developers established a 
minority tens at goal for Parvin Estates and conducted an 
extensive affirmative maketing effort within the black 
community. (Tr. 12,580-82). Although the HUD-approved 
affirmative marketing plan appeared to be successful in making 
innercity blacks aware of openings at Parvin Estates, the effort 
failed to attract the desired numbers of black families 
apparently for reasons beyond the developers control. (Tr. 
12,582). Parvin Estates was never able to attract more than 12% 
minorities, and the occupancy rate for blacks was often lower. 
593 F. Supp. at 1500.

16



families and individuals, operates somewhat differently from the 
multifamily housing described above. Under that program 
participants may request a certificate from any issuing 
jurisdiction and then locate housing of their own choosing 
within that jurisdiction. In addition to the Section 3 Existing 
Housing Program in Kansas City, public housing authorities in 
Independence, Liberty, and Lee's Summit, Mo., also administer 
programs. (Ex. P 1481A, B). Although the certificate holders 
in Kansas City are predominately black and the certificate 
holders in the suburban jurisdictions are predominately white, 
HUD insists that housing authorities impose no residence 
restriction on applications for certificates (tr. 20,455). 
Moreover, HUD funds housing referral services that encourage 
blacks to use HAKC certificates in areas of Kansas City outside 
of the KCMSD (tr. 20,454). Rejecting the contention that the 
Section 8 program was discriminatory, the district court found 
that "[tjhere was no evidence that HUD . . . attempted to direct
[section] 8 certificate holders as to the location of the 
housing which they chose." 593 F. Supp. at 1498. Moreover, 
there was no evidence presenting the number of school age 
children in participating families or where such children attend 
school.

SUMMARY OF ARGUMENT
The district court, after considering all of the evidence 

presented at trial, properly held that HUD is not responsible 
for any illegal segregation existing in the public schools. The 
record fully supports the district court's findings. The record

17



shows that HUD did not act illegally to segregate housing and 
that any existing school segregation resulted from factors far 
beyond HUD's control.

Although the issues regarding HUD turn primarily on factual 
questions, plaintiffs present the guestion for review as whether 
the district court erred in applying an arbitrary and capricious 
standard to HUD"s conduct. Plaintiffs have misread the standard 
applied by the district court. With regard to.plaintiffs' 
constitutional claims, the district court correctly ruled that 
the issue is whether HUD acted with a racially discriminatory 
purpose. See Clients Council v. Pierce, 711 F.2d 1406, 1409 
(8th Cir. 1983); Personnel Administrator v. Feeney, 442 U.S.
256, 274 (1979). Plaintiffs also alleged violations of Titles 
VI and VIII. We believe that Title VI does not authorize a 
private action against a federal agency, but if such a suit 
properly lies, proof of discriminatory intent is required, just 
as it is to establish a constitutional violation. See Guardians 
Assoc i at ion v . Civil Service Commission of the City of New York, 
463 U.S. 582 (1983). With regard to plaintiffs' Title VIII 
claim, the district court properly applied the narrow arbitrary 
or capricious standard prescribed by the Administrative 
Procedure Act, 5 U.S.C. 706.

The court's factual findings, including its determination 
that HUD did not engage in any intentional discrimination, 
cannot be overturned by this Court unless they are clearly

18



erroneous, Anderson v . City of Bessemer City, N.C., 105 S. Ct.
1504 (1985); see Fed. R. Civ. P. 52(a). The district court's 
findings in favor of HUD plainly are not clearly erroneous.
Much of plaintiffs' case against HUD is based on HUD's appraisal 
practices before Shelley v. Kraemer, supra. Plaintiffs' 
argument regarding such practices, however, is defeated by the 
district court's finding that "[i]f FHA's appraisal practices 
prior to 1950 had any effect on present racial housing patterns, 
it would, at most, be de minimis," 593 F. Supp. at 1497. That 
finding is fully supported by the record, and, in particular, by 
expert testimony that such FHA practices do not have any 
continuing effect today. Accordingly, the causal link that 
plaintiffs would be reguired to show between early FHA practices 
and present housing segregation, much less school segregation, 
is absent.

Plaintiffs also assert that HUD is liable for school 
segregation because it knowingly funded discriminatory tenant 
selection practices in public housing and failed to provide 
funding for new public housing sites that would mitigate the 
effects of prior segregative siting policies. A review of HUD's 
actions taken to enforce non-discrimination requirements in the 
public housing program shows that plaintiffs' assertions are 
without foundation. The actions taken by HUD after it found in 
a 1976 Title VI investigation that HAKC, the local public hous­
ing authority, had not been following HUD tenant selection 
requirements fully complied with its enforcement responsibili­
ties. HUD acted well within its discretion in securing the 1977

19



Compliance Agreement which requires that HAKC provide a minority 
preference option that permits the immediate placement of any 
applicant or transfer of any resident to a development in which 
the applicant or tenant's racial group comprises 33% or less of 
the development's population.

Moreover, there is no merit to plaintiffs' claim that HUD 
has acted illegally with regard to site selection. Plaintiffs 
did not prove any intentional discrimination on the part of HUD 
or its predecessor. HUD does not select sites for public 
housing. It only approves sites selected by local 
authorities. HUD has not approved any sites for public housing 
in Kansas City since 1963, but if there is a fault for the 
failure to construct public housing since that time it lies with 
the local authority, not with HUD. The local authority has not 
proposed appropriate projects on appropriate sites. In 1978,
HUD advised HAKC that, in order to achieve greated dispersal of 
public housing units, all site locations would have to be 
outside an inner city area whose boundaries roughly approximate 
those of KCMSD. Certainly, that action cannot be faulted in a 
school desegregation case.

Plaintiffs also complain that HUD funded the Land Clearance 
for Redevelopment Authority (LCRA), knowing that it engaged in 
discriminatory and segregative relocation policies. Here again, 
the district court found, and the record supports, that HUD took 
appropriate enforcement actions once the discriminatory conduct 
became known. Its requirement that the city assume responsibi­
lity from LCRA for relocation services and that each relocatee

20



must receive at least one referral outside the inner city 
clearly falls within the discretion afforded to HUD to determine 
how best to enforce civil rights requirements while 
administering Congressionally-mandated housing programs.

Plaintiffs argue (br. 61) that "HUD has done nothing to meet 
its constitutional affirmative duty to dismantle the effects of 
its past intentional discrimination or its Title VIII duty to 
affirmatively further housing integration" (footnote omitted). 
But HUD does not have any affirmative duty to dismantle the 
effects of prior discrimination because, as the distict court 
properly found, HUD has not engaged in any intentional 
discrimination, unless one considers FHA appraisal practices 
prior to Shelley v. Kraemer, supra, to be intentionally 
discriminatory, and, even if so, no significant effects of those 
practices remain. Moreover, HUD has satisfied its affirmative 
duties under Title VIII. As the district court correctly found, 
HUD has engaged in extensive affirmative acts to promote fair 
housing in Kansas City. Those actions are well within the 
discretion accorded to HUD and cannot be said to be arbitrary or 
capricious.

Finally, liability could not be imposed on HUD in this case 
even if it had violated the Constitutution or Titles VI or VIII 
unless its actions caused segregation in the schools.
Plaintiffs did not prove any such link. They simply did not 
establish any reasonable connection between HUD's actions and 
any segregation existing in the schools, and accordingly, their 
case fails on the merits. Alternatively, plaintiffs failure to

21



establish the required causal link also means that they lacked 
standing because they have not been injured by actions fairly 
traceable to HUD. See infra, p. 22, n. 12.

ARGUMENT
I. THE DISTRICT COURT APPLIED THE CORRECT 

CONSTITUTIONAL AND STATUTORY STANDARDS
Although the case involving HUD is largely determined by the

factual findings made by the district court, we will first
discuss the standards by which plaintiffs' constitutional and
statutory claims are to be judged because plaintiffs wrongly
phrase the question presented on this appeal as whether the
district court erred in applying the "arbitrary or capricious"

12standard to HUD's conduct. Br. xii.

As a separate matter, the district court's decision might 
well be affirmed on the ground that plaintiffs had no standing 
to challenge HUD's conduct. At the outset of the case, HUD 
argued that plaintiffs had not alleged that they had been 
injured by conduct fairly traceable to HUD, and, consequently 
that plaintiffs had no standing. Following the evidence 
presented at trial, it is even clearer that there is no nexus 
between school segregation and HUD's conduct. In Allen v.
Wright, 104 S. Ct. 3315 (1984), the Supreme Court reiterated 
that even in a case allegedly involving unconstitutional racial 
discrimination in schools, the judiciary may not redress the 
alleged injury unless plaintiffs' injury is fairly traceable to 
the government conduct that plaintiffs challenge as unlawful.
See also, Simon v. Eastern Kentucky Welfare Rights Organization, 
426 U.S. 26 (1976). As the Court said in Allen, the doctrine of 
separation of powers "counsels against recognizing standing in a 
case brought, not to enforce specific legal obligations whose 
violation works a direct harm, but to seek a restructuring of 
the apparatus established by the Executive Branch to fulfill its 
legal duties." 104 S. Ct. at 3330. In the instant case, 
plaintiffs seek judicial supervision over HUD to accomplish 
desired social goals, not to redress harm fairly traceable to 
HUD's conduct. As we show in the text, the connection between 
the alleged unlawful action of HUD and segregated schools is far

(CONTINUED)
22



Plaintiffs have misread the standard applied by the district 
court. The court, in a shorthand way, stated the standard 
applicable to all of the claims against HUD--constitutional and 
statutory--as follows: "Briefly, there must be a showing that
in administering the federal housing programs in the Kansas City 
area its actions were arbitrary and capricious, without a 
rational basis, it did so with discriminatory intent or purpose, 
and there is a causal connection between the violation and the 
injury, the segregated schools in the KCMSD." 593 F.Supp. at
1497. The district court further stated (593 F. Supp. at 1497) 
that it was applying the same standards which were set forth in 
the court's order of July 15, 1984, dismissing the claims 
against the Department of Education. Thus, we will refer to the 
July 15, 1984, order, as well as the current opinion, in 
discussing the appropriate standards applicable to the 
constitutional and statutory claims.

A. The Constitutional Standard. The district court stated 
in its July IS, 1984 order that the issue regarding whether a 
federal agency committed a constitutional violation was whether 
the federal agency "acted with a racially discriminatory 
purpose." July 15, 1984 order, slip op. 25. The district court

(FOOTNOTE CONTINUED)
too removed to form the basis for liability. And the district 
court so found, basing its decision in favor of HUD on the 
merits of the case. The same findings establish that plaintiffs 
have no standing, and that Article III of the Constitution 
prohibits judicial relief based on plaintiffs' claims.

23



correctly applied this standard to claims that HUD acted 
unconstitutionally. See, e.g., 593 F. Supp. at 1498, 1500,
1501. The same standard was adopted by this Court in Clients' 
Council v. Pierce, 711 F.2d 1405,1409 (1983), where this Court 
ruled that "in order to establish a constititutional violation, 
the [plaintiffs] must prove that HUD officials acted with a 
discriminatory purpose." Even if a local agency receiving 
federal funding intentionally discriminated, "HUD cannot be held 
liable unless its own conduct was tainted with a discriminatory 
purpose." Id.

This Court's ruling in Clients Council is soundly based on 
repeated rulings of the Supreme Court. "Proof of racially 
discriminatory intent or purpose is required to show a violation 
of the Equal Protection Clause." Village of Arlington Heights 
v. Metropolitan Housing Development Corp., 429 U.S. 252, 265 
(1977). "[P[urposeful discrimination is ’the condition that
offends the Constitution.'" Personnel Administrator of 
Massachusetts v. Feeney, 442 U.S. 255, 274 (1979), quoting Swann 
v. Charlotte-Mecklenburg Board of Education, 402 U.S. 1, 16 
(1971) (emphasis added). "[T]he absence of proof of discrimi­
natory intent forecloses any claim that . . . official action
. . . violates the Equal Protection Clause. . . . "  City of
Memphis v. Greene, 451 U.S. 100, 119 (1981). See also 
Washington v. Davis, 426 U.S. 229, 239-240 (1976). Moreover, 
the Supreme Court has held that even acquiescence in 
discriminatory practices of recipients "is not the equivalent of 
a discriminatory purpose. . . . "  Pullman-Standard v. Swint, 456

24



U.S. 273 , 292, n. 23 (1982); see also Blum v. Yaretsky, 457 
U.S. 991 , 1004-05 (1982). "' [D] iscriminatory purpose' . . . 
implies that the decisionmaker . . . selected or reaffirmed a 
particular course of action at least in part 'because of,' not 
merely 'in spite of' its adverse effects upon an identifiable 
group." Feeney, 442 U.S. at 279 (footnote omitted). -*-3 * &

13 Norwood v. Harrison, 413 U.S. 455 (1973), which 
invalidated a Mississippi program of lending textbooks to 
schools to the extent that discriminatory schools were among the 
recipients, does not establish the general rule that the 
government violates the Constitution whenever governmental aid 
in any form reach parties that engage in discrimination. First, 
Norwood was decided before the Supreme Court clearly stated in 
Washington v. Davis, supra, that only purposeful discrimination 
violates the Constitution. Moreover, in Norwood the 
Missisisippi textbook lending program was implemented against a 
background of steadfast resistance to court decrees ordering the 
dismantling of a segregated dual school system. 413 U.S. at 463
& n. 6. In contrast, HUD was attempting to carry out its 
obligations to enforce the nation's civil rights and housing 
laws. HUD's discretionary choice among enforcement techniques is not remotely comparable to a Mississippi measure that promotes private "segregation academies."

Court of appeals cases such as Gautreaux v. Romney, 448 F.2d 731 (7th Cir. 1971) and Garrett v. City of Hamtramck, 503 F.2d 
1236 (6th Cir. 1974) were decided before the Supreme Court made 
clear the intentonal discrimination standard in cases such as 
Feeney and Village of Arlington Heights. The D.C. Circuit in 
National Black Police Ass'n v. Velde, 712 F.2d 569 (1983),
_cert. denied, 104 S. Ct. 2180 (1984), relying on Norwood rather 
than Washington v. Davis, continued to phrase the standard in 
other than intent terms. We believe that Velde was wronalv 
decided, but even under the test used in Velde the court must 
determine whether the activity in question is of such a nature 
that it will be treated as an activity of the government and 
whether the underlying unconstiutional action will be imputed to 
the government, 712 F.2d at 581-82. As we show in this brief, 
any unconstitutional actions of local housing authorities were 
taken in spite of efforts by HUD to stop such activities. The 
mere provision of financial assistance to private entities does 
not serve to convert the discriminatory actions of those private 
entities into government action. See Blum v. Yaretsky, 457

(CONTINUED)
25



B. The Title VI Standard. The initial question under
Title VI is whether that statute provides a basis for asserting 
a claim against HUD. The district court reviewed HUD's actions 
in enforcing Title VI under the Administration Procedure Act's 
(see July 16, 1984 order, slip op. 21) arbitrary and capricious 
standard and found that HUD had not violated that standard.

In Clients' Council supra, this Court noted the 
controversy over whether Title VI creates an implied cause of 
action against a federal funding agency, but declined to reach 
the issue. 711 F.2d at 1424-25. Our view remains as we argued 
in Clients' Council, that Title VI does not provide a right of 
action against HUD. See Clients Council, 711 F.2d at 1430-31 
(Judge Henley, dissenting); district court order, filed July 16, 
1984, slip op. 17-21. Certainly, the statute does not by its 
terms confer such a right. The Third Circuit has persuasively 
ruled that no implied right of action against a federal funding

13 (FOOTNOTE CONTINUED)
U.S. 91 (1982); Rendell-Baker v. Kohn, 457 U.S. 830 (1982). It 
would not be reasonable to impute such unconstitutional 
activities to HUD simply because, rather than cut off funds, HUD 
used means to try to correct the unconstitutional actions that 
would still permit the intended beneficiaries to receive the benefits of housing programs.

Plaintiffs also cite the district court decision in Younq v. 
P ierce , E.D. Tex. No. P—80 —8 —CA (July 31 , 1985), which purports 
to follow Velde. We think Young is wrongly decided. However, 
we note that not only is it not a school desegregation case, but 
the court found the government's actions to be intentionally 
discriminatory, based on evidence far different from that 
presented in this case. Slip op. 43. Accordingly, it is not analogous to the instant case.

26



agency can be found in Title VI. NAACP v. Medical Center, Inc.,
599 F.2d 1247 (1979); accord: Community Brotherhood of Lynn,
Inc. v. Lynn Redevelopment Authority, 523 F. Supp. 779 (D.
Mass. 1981); cf. Young v. Pierce, 544 F. Supp. 1010 (E.D. Tex. 
1982). We will not repeat the Third Circuit's thorough 
discussion of the issue here, but we note that its review of the 
legislative history concluded that it would be an "impermissible 
result," 599 F.2d at 1254, n. 27, to place the beneficiary of 
federal funding "in a position to, in essence, compel funding 
termination . . . ." (Ibid.). Moreover, the United States has
not consented to suit under Titles VI or VIII. See Drayden v. 
Needville Independent School Dist., 642 F.2d 129, 133, n. 6 
(5th Cir. 1981); Unimex, Inc, v. HUD, 574 F.2d 1060, 1061 (5th 
Cir. 1979); United States v. Yonkers Board of Education, 594 
F. Supp. 466 (S.D.N.Y. 1984). The only arguable means of 
judicial review is the Administrative Procedure Act, 5 U.S.C. 
702. However, plaintiffs did not allege the APA as a 
jurisdiction basis. Even if they had attempted to seek review 
under the APA of HUD's enforcement efforts, their action would 
be precluded by the recent Supreme Court decision in Heckler v. 
Chaney, No. 83-1878 (March 20, 1985), 53 U.S.L.W. 4385, holding 
the general exception to APA judicial reviewability provided in 
section /01(a)(2) for actions "committed to agency discretion" 
includes "agency refusals to institute investigative or 
enforcement proceedings, unless Congress has indicated 
otherwise." Slip op. 16.

27



In any event, since Clients' Council was decided, the
Supreme Court has held in Guardians Association v. Civil Service 
Commission of the City of New York, 463 U.S. 582 (1983) that a 
violation of Title VI requires proof of discriminatory intent. 
See 463 U.S. at 608, n. 1 (Justice Powell,concurring). Thus, it 
is probably of little practical importance in this case whether 
plaintiffs are permitted to allege a Title VI claim against HUD 
because HUD cannot be found to have violated Title VI unless it 
violated the const i tuti ional standard, _i.e., engaged in 
purposeful discrimination.

C. The Title VIII Standard. It is well established 
that the standard of judicial review of agency action under 
Title VIII is the narrow standard prescribed by the APA. See 
e.£., Alschuler v. HUD, 686 F.2d 472, 481-82 (7th Cir. 1982); 
Anderson v. City of Alpharetta, Georgia, 737 F.2d 1530, 1534 
(11th Cir. 1984 ); Jones v. Tully, 378 F. Supp. 286 , 292 
(E.D.N.Y. 1974 ), aff'd . mem., 510 F.2d 961 (2d Cir. 1975). See 
generally, Citizens to Preserve Overton Park, Inc, v. Volpe, 401 
U.S. 402, 415-16 (1971). Thus, agency action may be set aside 
only if it is arbitrary or capricious. Moreover, as we stated 
in the discussion regarding Title VI, Heckler v. Chaney, 
precludes judicial review to the extent that plaintiffs are 
seeking review of HUD's prosecutorial discretion. See also 
Anderson v . City of Alpharetta, supra and Jaimes v . Toledo 
Metropolitan Housing Authority, 758 F.2d 1086, 1103-05 (6th 
Cir. 1985) (no judicial review of claims that HUD failed to 
failed to carry out their responsibilities under Title VIII).

28



To summarize the applicable standards of judicial review to 
plaintiffs' constitutional and statutory claims: in order to
establish liability against HUD on the basis of a constitutional 
violation or a violation of Title VI (assuming plaintiffs have a 
justiciable claim under Title VI), plaintiffs would have had to 
establish (1) that HUD engaged in purposeful discrimination and 
(2) that HUD's actions caused illegal segregation in the 
schools; to establish a liability on the basis of a Title VIII 
claim, plaintiffs would have to establish (1) that HUD acted 
arbitrarily or caprciously regarding actions subject to judicial 
review, and (2) that HUD's actions caused illegal segregation in 
the schools. The district court correctly ruled that plaintiffs 
failed to meet any of these requirements.

II. THE DISTRICT COURT PROPERLY FOUND THAT THE 
ADMINISTRATION OF THE FEDERALLY-INSURED OR 
FEDERALLY-FUNDED HOUSING PROGRAMS IN THE 
KANSAS CITY AREA DOES NOT PROVIDE A BASIS 
FOR HOLDING HUD LIABLE FOR ANY ILLEGAL 
SEGREGATION EXISTING IN THE SCHOOLS.

A. The District Court's Factual Determinations Can Not Be Overturned Unless They Are Clearly Erroneous.
The district court's ruling in favor of HUD is based largely 

on factual findings, including the court's finding that HUD had 
not acted with discriminatory intent nor caused segregation in 
the schools, that can not be overturned by this Court unless 
they are clearly erroneous. Rule 52(a), Fed. R. Civ. p.; 
Anderson v, City of Bessemer City, N.C., 105 S. Ct. 1504 
(1985). In Anderson the Supreme Court reiterated the deference 
due to the trial court on factual questions. In a discrimina­
tion case, as in other cases, "[t]he reviewing court oversteps 
the bounds of its duty under Rule 52 if it undertakes to

29



105 S. Ct. at 1511.duplicate the. role of the lower court. "
Rather, the court of appeals role on factual questions is 
limited:

If the district court's account of the 
evidence is plausible in light of the record 
viewed in its entirety, the court of appeals 
may not reverse it, even though convinced 
that had it been sitting as the trier of 
fact, it would have weighed the evidence 
differently. Where there are two permissible 
views of the evidence, the fact-finders 
choice between them cannot be clearly 
erroneous.

105 S. Ct. at 1512. See also Craft v. Metromedia, 8th Cir.
Nos. 84-1335, 84-1380, decided June 28, 1985, slip op. 10. 
Moreover, Anderson held that this deference due the trial court 
is applicable "even when the district court's findings do not 
rest on credibility determinations, but are based instead on 
physical or documentary evidence or inferences from other 
facts." 105 S. Ct at 1512. As we show below, there is no basis 
for this Court to overturn the factual findings made by the 
district court after thorough consideration of the massive 
evidence presented in this case.

B . FHA Practices Prior to Shelley v. Kraemer Do Not Render 
HUD Liable for Present Day Segregation in the Schools.

Much of plaintiffs' claim against HUD is based on the 
argument (br. 59-60) that HUD's appraisal practices prior to 
Shelley v. Kraemer, supra, were unconstitutional and resulted in 
segregation presently reflected in schools in the Kansas City 
area. These pre-Shelley practices followed the views of the 
private real estate industry that racially homogenous 
neighborhoods were the most likely to maintain real estate

30



values. We do not seek to justify these early practices of the
FHA. Rather, plaintiffs' claim that they render HUD liable for
present-day segregation in the Kansas City schools is fully
refuted by the district court's explicit finding that "[i]f
FHA's appraisal practices prior to 1950 had any effect on
present racial patterns, it would, at most, be de minimis."
593 F. Supp. at 1497. Unless this finding is clearly erroneous,
plaintiffs can not make the required link between those FHA

14practices, even if they were illegal, and present day 
housing patterns, much less present day school segregation.

The district court's de minimis finding is fully supported 
by the record, and, in particular, by the testimony of Federal 
Defendant's expert witness, Dean Brian Berry. (Tr. 20,105- 
20,116). Dean Berry testified that it was his expert opinion 
that the FHA's policies and practices in the 1930's and 1940's 
did not have a continuing effect today. (Tr. 20,110, 20,111).
He based this opinion on his study of the dynamics of the Kansas 
City housing market and his finding that "in 1970 a very small 
proportion of Kansas City's home owners and renters lived in the

The district court also held that FHA did not act 
arbitrarily or capriciously in considering the effect of racial 
covenants enforced by Missouri courts prior to Shelley v. 
Kraemer, supra. 593 F. Supp. at 1497. This Court need not 
resolve the issue of the legality of FHA's pre-Shelley 
practices in view of the district court's clear finding that any 
such practices have no more than de minimis effect on present 
housing patterns. However, to the extent that appraisals are 
intended to reflect the actual market value of houses, the 
district court was correct in recognizing that FHA had to 
consider such restrictions in order to arrive at an accurate 
determination of the market value of homes.

31



same places that they lived in prior to 1950." (Tr. 20,115- 
16). Moreover, as the district court found, 593 F. Supp. at 
1497, the areas most affected by the covenants were soon 
occupied by blacks after the covenants became unenforceable.
See Ex. P 22.

Plaintiffs' argue in footnote 127, p. 59 of their brief
that the court's de minimis finding is "erroneous" because "it
is based on a comparison of 15,000 apples (_i.e. , individual
FHA-insured homes within KCM a l o n e , a n d  those only pre-1950,
and 5,000,000 oranges (a total housing turnover since 

161950)." Plaintiffs' argument, however, fails to show that
the Court's finding was clearly erroneous. The total number of
FHA-insured homes prior to 1950 in the seven county Kansas City

17Standard Metropolitan Area was 26,113, (FD Ex. 37B) still a
miniscule number when compared with the 2.127 million housing 
turnovers between 1950 and 1980 in the Kansas City metropolitan 
area. (Tr. 20,102). Thus, even assuming that there was 
discrimination involved in many (or all) of the pre-1949, FHA

KCM is plaintiffs' abbreviation for the Kansas City 
Missouri School District. Jenk. Br. 1, n. 1
^  we believe plaintiffs' "5,000,000" figure to be a 
misprint. We think plaintiffs are referring to the more than 
2,000,000 turnovers in the Kansas City metropolitan areas 
between 1950 and 1980. (Tr. 20,102). The district court's 
reference to the 2,000,000 turnovers as occuring in KCMSD is 
mistaken, but as we explain in the text, infra, the mistake is 
of no consequence.
17 The Kansas City SMA is comprised of the Missouri counties 
of Cass, Clay, Jackson, Platte, and Ray, and the Kansas counties 
of Johnson and Wyandotte.

32



insured homes, the "vestiges" of such conduct would be lost in 
the growth and housing turnover in the area since that time.

Plaintiffs' only other way of attacking the court's de 
minimis finding is their suggestion (br. 59, n. 127) that if 
l/10th of the FHA-insured homes had been sold to black families 
in the suburbs, there would have been a significant effect on 
the schools. Of course, this suggestion involves pure specula­
tion. Racially restrictive covenants were private provisions 
enforced by the State. There is no proof establishing how many 
more homes in the suburbs would have been available to blacks 
and how many more such homes blacks would have bought in
predominately white school districts if FHA's pre-Shelley

18policies had been different. Indeed, the pervasiveness of 
discrimination prior to Shelley and the continuation of 
discrimination by private individuals and entities long after 
FHA abandoned its pre-Shelley practices suggests that private 
discrimination would have occurred no matter what FHA's 
practices were prior to Shelley. In any event, the district 
court's finding based on expert testimony plainly cannot be 
rendered clearly erroneous by plaintiff's speculation.

These objectionable policies were occuring prior to the 
Brown decision when Missouri was pursuing a state enforced dual 
school system so that blacks would have been assigned to black 
schools wherever they lived. Accordingly, plaintiffs' argument 
would require the court to make the further speculative link 
that a change in FHA policies would not only have changed 
people's decisions regarding where to live 35 years ago, but 
that such a change would have had lasting effects past the 
abolition of the formal dual school system.

33



In addition, plaintiffs' description of FHA's policies is
not fair. Racially restrictive covenants were prevalent long
before FHA came into existence. While FHA's Underwriting Manual
followed the racial practices of the private real estate
industry for approximately 15 years in the 1930's and 1940's,
beginning in the late 1940's FHA adoped an official policy of
open occupancy in housing. By the end of 1949 -- now over 35
years ago -- FHA had amended its Underwriting Manual to state
that race may not be used as a factor in property 

19evaluation. FHA also announced at that time that it would 
not insure mortgages on properties subject to racial covenants 
filed after February 1950, and that it would ignore all racial 
covenants in deeds and loan instruments executed before that 
date as having no force or effect. An employee of HUD's Kansas 
City office for 25 years testified that since he began work with 
FHA in 1959 the office's policy had been that race was not to be

19 Section 242 of the Manual amended on December 16, 1949 states:
Underwriting considerations shall recognize 
the right to equality of opportunity to 
receive the benefits of the mortgage 
insurance system in obtaining adequate 
housing accommodations irrespective of race, 
color, creed or national origin.
Underwriting considerations and conclusions 
are never based on discriminatory attitudes 
or prejudice. Determinations which adversely 
affect the eligibility for mortgage 
insurance, the degree of mortgage risk, or 
the valuation of the property to be insured 
shall be supported by observable conditions, 
precedent or experience directly applicable 
to the subject case.

34



considered in property appraisals. (Tr. 19,925-26). This 
testimony and supporting evidence (see, e.g., Treu Dep. at 60; 
■James Dep. at 15; tr. 9,439, 9,517), all of which was credited 
by the district court, 593 F. Supp. at 1500, directly refutes 
plaintiffs' suggestion, (br. 16) that the FHA supported 
discrimination until President Kennedy issued Executive Order 
11063 on Equal Opportunity in Housing in 1962. That Order 
prohibited discrimination in all federally-assisted housing and 
directed FHA to take all action necessary and appropriate to 
prevent discrimination by private lending institutions. Since 
the issuance of that Order, FHA has required a certification of 
compliance with its nondiscrimination policy by all lenders, 
buyers, and sellers in transactions involving FHA loans. (Ex.
FD 45A, 46A & B, and 350. See also 24 C.F.R. 200.300, et seq.) 
In sum, as the district court found, FHA's practices provide no 
basis for holding HUD liable for any present day segregation in 
the schools. Certainly, the district court's finding to that 
effect is not clearly erroneous.

C. HUD Took Appropriate Action to Enforce Non- 
Discrimination Policies In Public Housing Tenant and Site Selection.

Plaintiffs' assert (br. 60) that HUD is liable for school 
segregation because it knowingly funded discriminatory tenant 
selection practices in public housing by HAKC through 1976 and 
failed to provide funding for any new public housing sites that 
would mitigate "the effects of its segregative siting policies." 
These assertions are without foundation, as the district court's 
findings of fact establish.

35



As described, supra, p. 12, HUD took appropriate action to
enforce non-discrimination requirements regarding both tenant 
selection and site selection practices of HAKC, the local agency 
that operated public housing in Kansas City. Briefly, with 
regard to tenant selection, HAKC adopted an open occupancy 
policy in 1958 and followed a "freedom of choice" plan until 
1968, when it adopted a plan to comply with HUD requirements 
enforcing Title VI. Under that plan, applicants were required 
to select a vacant unit from among the three developments with 
the highest vacancy rates or be removed to the bottom of the 
waiting list. 593 F. Supp. at 1499. When a 1976 Title VI 
investigation revealed that HAKC had not been following the 1968 
HUD-approved plan, HUD required HAKC to take corrective 
measures. The 1977 Compliance Agreement providing for a 
minority preference option that permits the immediate placement 
of any applicant or transfer of any resident to a development in 
which the applicant or tenant's racial group comprises 33% or 
less of the development's population was well within the 
discretion afforded to HUD to determine how best to carry out 
its responsibilities.

Plaintiffs admit (br. 22) that HUD has dispersed public 
housing and multifamily housing throughout the metropolitan 
area, and their complaint (br. 60) tlat HUD has not approved 
sites for public housing within Kansas City since 1963 is hard 
to square with their positon that HUD should have cut off 
funding to HAKC because public housing was segregated. HUD does 
not select sites for public housing. It only approves sites

36



selected by the local housing authorities. If there is a fault 
for the failure to construct public housing in Kansas City after 
1963, it lies with HAKC, not HUD. Since 1971, HUD regulations 
have generally required public housing outside the black- 
concentralized areas. 42 C.F.R. 200.700 et seq. In response to 
HAKC's repeated submission of unapprovable proposals, in 1978 
HUD advised HAKC that, in order to achieve greater dispersal of 
public housing units, all site locations would have to be 
outside of an inner city area whose boundaries roughly 
approximate those of KCMSD. (Tr. 7117). HAKC needlessly 
delayed submission of housing proposals to HUD and submitted 
proposals, including previously rejected ones, that clearly did 
not meet regulatory requirements. (Ex. P 1596A.) HUD more than 
met its obligations to HAKC. HUD reserved housing construction 
funds for HAKC for more than four years (Ex. P 1596SS) when 
applicable HUD regulations provided that funds should be used 
within one year of their reservation or should be reassigned to 
another housing authority. 24 C.F.R. 841.111(d) (1976). In 
light of these facts, HUD decision to recapture the funds 
originally reserved for HAKC was certainly within its 
discretion. In sum, the evidence supports the district court's 
finding that:

the location of th»> public housing was in 
accordance with the congressional acts and 
that HUD's monitoring of the program was 
neither arbitrary nor capricious and that the 
compliance agreement entered into between 
HAKC and HUD was reasonable.

593 F. Supp. at 1499.

37



Not only do these efforts by HUD satisfy a common-sense 
standard that HUD has complied with its obligations, but prior 
cases also establish that there is no basis for holding HUD's 
conduct with regard to public housing to be illegal. As set 
forth in the discussion on legal standards above, pp. 23-24, 
the district court would have been required to find that HUD 
acted with a discriminatory intent in order to establish a 
constitutional violation. See Clients Council v. Pierce, 
supra. Any discrimination in this case was clearly "in spite 
of," not "because of" HUD's actions. Personnel Administrator v. 
Feeney, supra, 442 U.S. at 279. The facts of this case contrast 
directly with those in Clients Council, where this Court found 
that HUD had acted with a discriminatory intent. In Clients 
Council the housing authority had followed a policy of keeping 
the races apart in separate projects and of keeping them in 
different buildings within the same project as late as 1969. 
Here, HAKC adopted a formal open occupancy policy in 1958. 
Moreover, the Court in Clients Council found that "faced with 
blatant segregation and an admitted determination to 
intentionally discriminate, HUD did nothing to effectively 
change the operation of the [local housing authority.]" 711 
F.2d at 1422. In contrast to th failure to take any action in 
Clients Counsel, when HUD became aware of HAKC's practices in 
1976, it ordered HAKC to take corrective action. As the

38



district court held, the actions ordered by HUD were reasonable
20and appropriate responses to the facts it found.

Nor can HUD's actions be considered arbitrary or capricious 
as they would have to be to constitute a violation of Title 
VIII. See supra, p. 28. As the courts have long recognized, 
judicial review of HUD's efforts to enforce the varying mandates 
of national housing statutes is quite limited: "[WJithin the
framework of the national policy against discrimination in 
federally assisted housing, 42 U.S.C. 2000d, and in favor of 
fair housing, 42 U.S.C. 3601 . . . broad discretion may be 
exercised." Shannon v, HUD, 436 F.2d 809, 819 (3d Cir. 1970). 
"[T]he judgment to be made by HUD [regarding how to implement 
the national housing policy expressed in Titles VI, VIII and the 
substantive housing statutes] is quasi-legislative." Shannon 
436 F.2d at 821.

Neither Title VIII nor any other statute authorizes the 
courts to second guess judgments made by HUD in allocating its 
resources and enforcing anti-discrimination statutes as it 
reasonably sees fit. "So long as [HUD] adopts some adequate 
institutional means for marshalling the appropriate legislative 
facts the rights of the affected residents [are] adequately 
protected . . . by the opportunity to obtain judicial review

Clients Council was a housing, not a school desegregation, 
case. Thus, even if plaintiffs could prove intentional 
discrimination as they did in Clients Council, HUD would still 
not be liable unless they also proved that the discrimination 
resulted in illegal segregation of the schools, and as shown 
infra, pp. 44-46, plaintiffs totally failed to establish such a causal link.

39



pursuant to the Administrative Procedure Act after the agency's
decision." Shannon, 436 F.2d at 821. HUD's actions in this
case more than meet the Shannon test and the arbitrary and

. 2 1capricious rule.
D . HUD Acted Within Its Discretion in Entering into an 

Agreement With LCRA and the City that Required Corrective Action 
for Past Discrimination in Relocation Policies.

Plaintiffs also complain (br. 60) that HUD "funded LCRA's 
[Land Clearance for Redevelopment Authority] discriminatory and 
segregative relocation policies." The complaint against LCRA 
was that blacks who were displaced by urban renewal activities 
were relocated into black areas and whites were relocated into 
white areas. The district court, however, found that only a 
relatively small number of persons were affected by relocation 
activities. There was no proof of discrimination by LCRA before 
1969. Between 1971 and 1976 only 174 black families were 
relocated. 593 F. Supp. at 1498; see Ex. P 622B. The movement 
of such a small number of persons affected at a time when the

To the extent that plaintiffs are arguing the HUD should 
be held liable for failing to force the local agency to submit 
appropriate sites for public housing, their argument is 
foreclosed by the principles enunciated in Anderson v. City of 
Alpharetta, supra, which held that HUD's inaction does not lend 
itself to judicial review, even under the abuse of discretion 
standard. 737 F.2d at 1534. See also Jaimes v. Toledo 
Metropolitan Housing Authority supra. As the Anderson court 
held Congress did not intend to fix upon HUD a judicially 
reviewable "affirmative legal duty to correct injustice wherever 
it exists." 737 F.2d at 1535. Moreover, plaintiffs have not 
pointed to HUD's failure to fund any approvable site outside the 
inner city and as stated, supra, have admitted (br. 22) that HUD 
has dispersed public housing and multi-family housing throughout the metropolitan area.

40



Kansas City schools had already become majority black and 
heavily segregated could not have had a significant effect on 
the racial composition of the schools.

Plaintiffs argue (br. 60, n. 128) that "HUD's duty was to
either force LCRA into compliance or to withdraw funding." But
the record establishes that HUD took responsible action to
require corrective measures, see supra, pp. 9-10. When LCRA
failed to implement those measures properly, HUD forced LCRA out
of the relocation business and entered into the 1973 Cooperaton
Agreement with the city that insured that minorities would have
housing opportunities outside the inner city area. See supra,
p. 10. Following the agreement, approximately 1/3 of the
housing referrals provided to black relocatees were outside the
inner city area. 593 F. Supp. at 1498; Ex. P 322A; tr.
10,991. HUD's solution to this problem was far more effective
in complying with its responsibilities and carrying out the
housing programs created by Congress than is plaintiffs'
suggestion that HUD should have terminated funding for, as the
district court found: "[t]o have cut off funds would have
penalized those most in need of housing, that is'the people of
low income, and could not have been done absent a lengthy Title
VI investigation." 593 F. Supp. at 1498. Based on HUD's
actions the district court properly found:

in working out the cooperation agreement 
between the LCRA and the City of Kansas City,
Missouri, HUD acted in a reasonable and 
responsive manner. . . . The Court finds
that by entering into the cooperation 
agreement between HUD, LCRA and the City of 
Kansas City, their actions were not arbitrary 
or capricious and did not violate 
plaintiffs' fifth amendment rights.

41



593 F. Supp. at 1498.
We will not repeat the discussion of the legal principles 

supporting the district court's conclusions on this matter. 
Suffice it to say, that the district court correctly found HUD 
actions with regard to the relocation matters were without 
disriminatory purpose and fell easily within HUD's discretionary 
authority regarding enforcement of Titles VI and VIII.

E. HUD Has Not Failed to Comply With Any Affirmative Duties to Further Fair Housing.
Plaintiffs argue (br. 61) that "HUD has done nothing to meet 

its constitutional affirmative duty to dismantle the effects of 
its past intentional discrimination or its Title VIII duty to 
affirmatively further housing integration." (footnote 
omitted). These arguments are without merit. As we have shown, 
and the district court found, HUD has not engaged in any 
intentional discrimination, unless one considers FHA1s appraisal 
actions prior to Shelley v. Kraemer, supra, to be intentionally 
discriminatory and, even if so, no significant effects of those 
FHA actions remain. Accordingly, HUD has no affirmative duty to 
dismantle the effects of past intentional discrimination.

HUD has satisfied its affirmative duties under Title VIII. 
Title VIII declares it the policy of the United States "to 
provide, within constitutional limitations, for fair housing 
throughout the United States," 42 U.S.C. 3601, and places on HUD 
the responsibility to "administer the programs and activities 
related to housing and urban development in a manner

42



affirmatively to further the policies of the [title]," 42 
U.S.C. 3608(d)(5). Title VIII does not provide any standards 
for determining the particular affirmative activities that HUD 
must promote. Two points are clear, however. First, Congress 
did not expect Title VIII, or HUD's enforcement activities 
pursuant to the Act, to achieve perfectly integrated housing 
patterns. See e.g., 114 Cong. Rec. 2525 (1968) (Sen. Brooke); 
id. at 2274 (Sen. Mondal.e); id. at 9569 (Rep. Rumsfeld). Its 
goal was to eliminate "compulsory segregation in 
housing. . . . 114 Cong. Rec. 2525 (1968) (Sen. Brooke).
Second, "HUD has great discretion in choosing methods to achieve 
national housing goals. . . . "  Clients Council v. Pierce, 
supra, 711 F.2d at 1425; Shannon v. HUD, supra, 436 F.2d at 819.

The evidence establishes that HUD's actions in Kansas City 
fall well within the standards prescribed by Title VIII. It has 
taken relevant racial and socio-economic characteristics into 
account in determining whether to approve a site for a proposed 
housing project. (Tr. 20,657-61, Ex. FD 152A, 351). It has 
followed a policy that tried to ensure that assisted housing 
located in the inner city was "balanced" by assisted housing 
located in suburban areas. (Tr. 20,657). The number of 
assisted units located outside the KCMSD far exceeds the number 
of units located within the KCMSD— 16,222 to 8,409. (Ex. FD 2A, 
2B). The evidence established several sites in predominately 
white suburban areas of the Kansas City SMSA that were opposed 
by local residents but approved by HUD (tr. 20,662-67; Exs. FD 
286, 287) and proposed sites that HUD disapproved because the

43



projects would be located in areas of minority concentration. 
(Tr. 20,563-68).

As described supra, pp. 15-16, HUD also reviews and monitors 
affirmative fair housing marketing plans, which have been 
required by the Kansas City HUD Office since 1971 (Tr.
20,414). The district court fairly characterized these efforts: 
"[u ]ndoubtedly the affirmative fair housing maketing plans did 

not result in the integration which HUD desired; however, this 
was not the result of the lack of affirmative marketing 
efforts." 593 F. Supp. at 1500.

HUD's satisfaction of its affirmative responsbilities is 
also evidenced by the provision in the 1973 Cooperation 
Agreement with the City and LCRA requiring that relocatees be 
given at least one referral outside the inner city, see supra, 
p. 10, and the provision in the 1977 Compliance Agreement with 
HAKC requiring the immediate placement of any applicant or 
transfer of any resident to a development in which the 
applicant's or tenant's racial group comprises 33% or less of 
the development's population. See supra, p. 12.

F. Plaintiffs Did Not Prove that HUD's Actions Caused 
Illegal Segregation of the Schools.

In addition to failing to prove that HUD has committed any 
illegal housing actions that have present effects, plaintiffs 
have failed to show that even if such actions occurred they 
caused illegal segregation in the schools. As the district 
court held, without such a link, plaintiffs cannot prevail 
against HUD.

44



In essence, plaintiffs simply did not show a reasonable 
connection between HUD's actions and any existing segregation in 
the schools. The causes of such segregation are many, but all 
are too far removed from the federal housing programs in Kansas 
City to justify imposing liablity on HUD. Plaintiffs’ expert,
Dr. Orfield, testified (tr. 14,891-93), that by 1954 the KCMSD 
schools, like schools of most central cities in the country, 
were bound on a course to become heavily black no matter what 
desegreation actions were taken. Moreover, HUD played no 
adverse role in significant factors that were identified 
specifically as having contributed to the segregated schools in 
Kansas City: (a) KCMSD zone boundary changes that had the effect
of perpetuating the prior system of segregated schools (tr. 6798- 
6799, 6869-70; Stipulation of Eact Between KCMSD and 
Plaintiffs); (b) KCMSD’s liberal transfer policy that allowed 
students to attend schools of their choice outside of the 
attendance zone in which they lived (tr. 3024-28, 6604, 6973; 
Stipulation of Fact 24); (c) KCMSD's policy of opening newly
constructed or annexed schools in the late 1950's and 1960's as 
either all-black or all-white schools (Ex. K2); (d) curriculum
changes at Paseo High School (tr. 6654, 8456, 15,155); (e) the
urban riots of April 1968 (tr. 6851, 6942); (f) increases in
neighborhood crime (tr. 6804, 6851, 6949, 12,119; and ■ g) 
housing demolition for the South Midtown Freeway (tr. 12,112-13, 
12,122).

Moreover, the facts regarding federally assisted programs in 
the Kansas City area as outlined in the Statement, show that the

45



district court acted well within its province in refusing to 
find that HUD caused school segregation. For example, 
plaintiffs have not shown to be clearly erroneous, the district 
court's finding that "[t]here was no evidence in the case that 
the practices of HUD in site selection and approval for 
federally subsidized multifamily housing has a substantial 
effect upon the racial makeup of schools within the KCMSD." 593 
F. Supp. 1499. The overwhelming majority of HUD-assisted 
multifamily housing within KCMSD has been developed since 1970-- 
after the KCMSD had already become a majority black school 
district. (Ex. FD 2A). In addition, the section 235 program of 
mortgage assistance to homeowners did not even begin until 1969, 
after substantially all of the racial changes in the southeast 
schools and neighborhoods had already occurred. The relatively 
small number of families using section 235 mortgage assistance 
belies the notion that it had a significant impact on the racial 
composition of the schools. Only approximately 280 black 
families (and 120 white families) purchased homes under the 
section 235 program in the southeast area of Kansas City from 
1969 to mid-1972. (Tr. 12,371, 12,062-63). Whereas, in 1970, 
the southeast area contained, approximately 40,000 dwellings, 
150,000 residents, and 24 elementary schools. (Ex. K2; tr. 
12,061). Similarly, the total number of urban renewal 
relocations by LCRA represented less than .2% of the overall 
turnovers in the Kansas City area between 1950 and 1980. (Tr. 
20,368-69; Ex. P 353G). Finally, plaintiffs failed to present 
evidence showing the number and race of school age children

46



residing in HUD-insured or subsidized housing. Without this 
basic information, plaintiffs would, indeed, have had to present 
strong evidence of illegal actions by HUD that would not only 
permit, but require, the district court to find that HUD has 
caused segregation in the schools. Clearly, they did not 
present such evidence. Plaintiffs, in short, have offered no 
reason to impeach the district court's fact finding on the 
causation issue. The fact findings, therefore, must be 
sustained as not clearly erroneous.

CONCLUSION
The district 

liability should
court's order 
be affirmed.

in favor of HUD on the issue of

GERSHON M. RATNER 
Associate General Counsel 

for Litigation
HOWARD M. SCHMELTZER 
Special Assistant to the 
Associate General Counsel for Litigation

PAUL LEIMAN 
Attorney
U.S. Department of Housing 

and Urban Development 
451 - 7th Street, S.W. 
Washington, D.C. 20410

RICHARD K. WILLARD 
Acting Assistant Attorney General 
Civil Division
ROBERT G. ULRICH 
United States Attorney

JOHN F. CORDES 
JOHN C. HOYLE
Attorneys, Appellate Staff 
Civil Division, Room 3618 
U.S. Department of Justice 
Washington, D.C. 20530 
Telephone: (202) 633-4052

-  47 -

DOJ-1985-09