Gibbs v. General Motors Corporation Supplemental Reply Brief for Plaintiff-Appellant and Assorted Briefs
Public Court Documents
December 5, 1989 - February 12, 1992
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Brief Collection, LDF Court Filings. Gibbs v. General Motors Corporation Supplemental Reply Brief for Plaintiff-Appellant and Assorted Briefs, 1989. c6ec2247-b39a-ee11-be36-6045bdeb8873. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/8cef2f35-54a4-4347-b60d-970bb4e40c28/gibbs-v-general-motors-corporation-supplemental-reply-brief-for-plaintiff-appellant-and-assorted-briefs. Accessed May 11, 2025.
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No. 91-55170
IN THE
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
LEROY GIBBS,
Plaintiff-Appellant,
v.
GENERAL MOTORS CORPORATION, et al.,
Defendants-Appellees.
On Appeal From the United States District Court
for the Central District of California
No. 85-4725-AHS
SUPPLEMENTAL REPLY BRIEF FOR PLAINTL-7-APPELLANT
LAW OFFICES OF LEROY S. WALKER
PETER J. LAURA
MICKEY J. WHEATLEY
6300 Wilshire Boulevard
Suite 1455
Los Angeles, CA 90048
(213) 966-4555
JULIUS L. CHAMBERS
ERIC SCHNAPPER
NAACP Legal Defense and
Educational Fund, Inc.
99 Hudson Street. 1Ch Floor
New York, New Yoik 10013
(212) 219-1900
TABLE OF CONTENTS
I. Introduction .................................. 1
II Section 101 Should Be Applied To This Case
Because It Is Procedural and Remedial . . . 4
III. The Language of the Act Applies Section 101
to Pre-Existing Claims .................. 16
IV. The Legislative History Demonstrates that
Section 101 Applies to Pre-Existing
C l a i m s .................................. 19
V. Section 101 Should Be Applied Here Because It
Is Restorative Legislation .............. 21
VI. Patterson v. McLean Credit Union Should Not
Be Applied Retroactively ................ 24
Page
Conclusion 25
TABLE OF AUTHORITIES
Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975) . . . n
Arnold v. Maynard, 942 F.2d 761 (10th Cir. 1991) . . . 22
Atonio v. Wards Cove Packing Co. (9th Cir.)
(Nos. 91-350 6, 91-35861) 3
Auffm'ordt v. Rasin, 102 U.S. 620 (1881) ............ 13
Beatty v. United States, 191 F.2d 317
(8th Cir. 1951) 14
Benitez v. Portland General Elec.,
58 FEP Cas. 449 (D. Ore. Feb. 26, 1 9 9 2 ) ........ 3
Bradley v. Richmond School Bd.,
416 U.S. 696 (1974) 9,11,12,19
Brown v. General Services Administration,
425 U.S. 820 (1976) 7
Bunch v. United States, 548 F.2d 336
(9th Cir. 1977) ................................ 5 6
Dargel v. Henderson, 200 F.2d 564
(Em. Ct. App. 1952) 14
DeVargas v. Mason & Hanger-Silas Mason Co.,
911 F. 2d 1377 (10th Cir. 1990).................. 22
Downs v. Blount, 170 F.2d 15 (5th Cir. 1909) . . . . . 14
F.D.I.C. v. New Hampshire Insurance Co.,
1991 U.S.App. LEXIS 30071 (9th Cir. 1991) . . . . Q
Federal Reserve Bank of Richmond v. Karlin,
7 F. 2d 50 (4th Cir. 1935) ...................... 14
Federal Shopping Way, Inc. v. McQuaid,
457 F. 2d 176 (9th Cir. 1972).................... 14
Fernando v. Hotel Nikko Saipan,
C.A. No. 91-0013 (D. Northern Mariana Islands,
March 7, 1992).................................. 3
Ferreto v. Associated Materials,
923 F. 2d 1441 (11th Cir. 1991) ................ H
Cases: Page
i i
Cases: Page
Friel v. Cessna Aircraft Co.,
751 F. 2d 1037 (9th cir. 1985) ................ 9,11
Grove City College v. Bell, 465 U.S. 555 (1984) . . . 22
Grummit v. Sturgeon Bay Winter Sports Club,
354 F. 2d 564 (7th Cir. 1966) ...................... 14
Hastings v. Earth Satellite Corp.,
628 F. 2d 85 (D.C.Cir. 1980) .................. 7
Idaho v. Howmet Turbine Development Co.,
814 F. 2d 1376 (9th Cir. 1987) 8
Johnson v. Railway Express Agency,
421 U.S. 454 (1975) .......................... 5/6
Kaiser Aluminum & Chemical Corp. v. Bonjorno,
108 L.Ed. 2d 842 (1990) ...................... 12,14
Roger v. Ball, 497 F.2d 702 (4th Cir. 1974) ........ 14
Kruso v. International Tel. & Tel. Corp.,
872 F. 2d 1416 (9th Cir. 1989) 9,11
Larkin v. Saffarans, 15 F. 147
(C.C.W.D. Tenn. 1883) 13
League to Save Lake Tahoe, Inc., v. Trounday,
598 F. 2d 1184 (9th Cir. 1979) 8
Lee v. Sullivan, __F. Supp.__,
1992 WL 59020 (N.D.Cal. March 26, 1992) . . . . 3
Luckenback S.S.Co. v. Norton,
106 F. 2d 137 (3d Cir. 1939) .................. 14
Mahroom v. Hook, 563 F.2d 1369
(9th Cir. 1977) ............................. 5/6
Matter of Reynolds, 726 F.2d 1430
(9th Cir. 1984) ............................. 9
McCullough v. Consolidated Rail Corp.,
1992 WL 41489 (N.D.I11.) 2
McBurney v. Carson, 99 U.S. 567 (1879) ............ 13
i i i
Cases: Page
Mozee v. American Commercial Marine Serv. Co.,
__F.2d__, 1992 U.S.App.LEXIS 9857
(7th Cir. 1992) ..............................
O'Hare v. General Marine Transport Corp.,
740 F. 2d 160 (2d Cir. 1984) ..................
Orr v. United States, 174 F. 2d 577
(2d Cir 1949) ................................
Patterson v. McLean Credit Union,
491 U.S. 164 (1989) ..........................
Percell v. International Business Machines, Inc.,
1992 WL 46478 (E.D.N.C.) ......................
Reynolds v. Martin (9th Cir.)(No. 91-15237) ........
Ribando v. United Airlines, Inc., 1992 WL 55194
(N.D.I11.) ....................................
Sampeyreac v. United States,
32 U.S. 222 (1833) ............................
Sanders v. Culinary Workers Local No. 226,
__F.Supp.__, 1992 WL 25407
(D. Nev. Feb. 11, 1992) ......................
Steinle v. Boeing Co., 1992 WL 45400 (D.Kan.) . . . .
Stender v. Lucky Stores, 780 F.Supp. 1302
(N.D.Cal. 1991) ........................
Stephens v. Cherokee Nation, 174 U.S. 445 (1899)
Sturges v. Carter, 114 U.S. 511 (1885) ............
Thompson v. Sawyer, 678 F.2d 257
(D.C.Cir. 1981) ........................
Turner v. United States, 410 F. 2d 837
(5th Cir. 1969) ..........................
Twenty Per Cent Cases, 87 U.S. 179 (1874)
United States v. Department of Mental Health,
__F.Supp.__, 1992 WL 45359
(E.D.Cal. March 2, 1992) ................
1,2,12
7
14
Passim
2
3
2
13
3
2
3
13
13,15
7
14
13
3
IV
Cases: Page
United States v. Haughton, 413 F.2d 736
(9th Cir. 1969) ..................
United States v. Heth,
7 U.S. (3 Cranch) 399 (1806) . . . .
United States v. Miller, 830 F.2d 1073
(9th Cir. 1987) ..................
United States v. Monsanto, 858 F.2d 160
(4th Cir. 1988) ..................
United States v. R.W. Meyer, 889 F.2d 1497
(6th Cir. 1989) ..................
Van Allmen v. State of Connecticut
Teachers Ret. Bd.,
613 F.2d 356 (2d Cir. 1979) . . . .
Vogel v. Cincinnati, __F.2d__,
58 FEP Cas. 402 (6th Cir. 1992) . .
Winfree v. Northern Pacific Railway,
227 U.S. 296 (1913) ..............
Statutes
42 U.S.C. §1981 ....................
98 Stat. 1837 ......................
103 Stat. 185 ......................
Title VII, 1964 Civil Rights Act . .
1972 Amendments to Title VII . . . .
Age Discrimination in Employment Act
Civil Rights Act of 1991 ..........
Civil Rights Restoration Act . . . .
Clean Air Act ......................
Comprehensive Environmental Response
Compensation and Liability Act .
14
13
8
7
7
7
1,2,9
13
Passim
8
8
Passim
5,6,8
6
Passim
2 2
8
8
v
Financial Institutional Reform, Recovery
and Enforcement Act of 1989 .................. 8
Legislative Materials
136 Cong. Rec. (1990).............................. 20,21
137 Cong. Rec. (1991) .............................. 19,20,23
S. Rep. 101-315 (1990) 23
H.R.Rep. 101-644 (1990) 21,23
Letter of Attorney General Thornburgh
to Senator Edward Kennedy, April 13, 1990 . . . 21
Memorandum for the President, Oct. 22, 1990 ........ 21
Other Authorities
H.C. Black, Interpretation of Laws (2d ed. 1911) . . 15
H. Broom, Legal Maxims (8th ed. 1911).............. 16
C. Endlich, Commentary on the Interpretation of
Statutes (1888) ............................... 16
J. Kent, Commentaries on American L a w .............. 14
W.G. Myer, Vested Rights (1891' .................... 16
J. Story, Commentaries on the Constitution (1851) . . 15
Executive Order 8802 (1941) H
EEOC Policy Guidance (Dec. 27, 1991) 17-19
50 Am. Jur. "Statutes", §482 (1944)................ 16
59 Corpus Juris §696 (1932)....................... 16
No. 91-55170
IN THE
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
LEROY GIBBS,
Plaintiff-Appellant,
v.
GENERAL MOTORS CORPORATION, el al.,
D efendants-Appellees.
On Appeal From the United States District Court
for the Central District of California
No. 85-4725-AHS
SUPPLEMENTAL REPLY BRIEF FOR PLAINTII F-APPELLANT
I. Introduction
As the opening supplemental briefs of both parties amply attest, there has been a
large volume of litigation regarding whether the 1991 Civil Rights Act, or specific
provisions thereof, apply to pre-Act claims. Notwithstanding the breadth and intensity of
this controversy, even the decisions on which appellees rely reject most of appellees’
arguments. The Sixth Circuit decision in Vogel v. Cincinnati,__ F.2d , 58 FEP Cas. 402
(6th Cir. 1992), and the Seventh Circuit decision in Mozee v. American Commercial Marine
1 58 FEP Cas. at 404:
Serv. Co., ___ F.2d __ , 1992 U.S. App. LEXIS 9857 (7th Cir., May 7, 1992),* 2 both
conclude that neither the language nor the legislative history of the Civil Rights Act3
indicate that the Act is inapplicable to pre-existing claims. Numerous district courts,
including all of the district court cases relied on in the Addendum to Appellee’s
supplemental brief, have reached the same conclusion.4 The circuit courts in Vogel and
Mozee held that, in the absence of clear congressional intent, the applicability of a new law
to a pre-existing claim turns on whether the law would affect the substantive rights of the
"The 1991 Act, on its face, does not make clear whether it
should be applied retroactively or prospectively.... The
legislative history does not provide any guidance on this
question."
2 1992 U.S. App. LEXIS 9857 at *10-*12:
"Section 402(a)’s language is hopelessly ambiguous as to the
issue of whether Congress intended the 1991 Civil Rights Act
to apply retroactively to pending cases.... A clear indication of
congressional intent cannot be deciphered from the legislative
history or the 1991 Act’s language."
Appellants adhere to our position, set forth in our Supplemental Brief and in this
brief, that the language and legislative history of the Act demonstrate that section 101
applies to pre-existing claims.
McCullough v. Consolidated Rail Corp., 1992 WL 41489 (N.D. 111.) pp. 3-4 ("[T]he
text is unclear ... from [the legislative history] it is difficult to discern a clear legislative
directive"); Percell v. International Business Machines, Inc., 1992 WL 46478 (E.D.N.C.), p.
3 (”[T]he court’s task is not resolved by the words of the statute ... [T]he legislative history
is not helpful...."); Ribando v. United Airlines, Inc., 1992 WL 55194 (N.D.111.), pp. 3-4
("[T]his court finds there to be no clear textual guidance upon which this court may rely....
From [the legislative history] it is difficult to discern a clear legislative directive"); Sleinle
v. Boeing Co., 1992 WL 45400 (D. Kan. 1992), pp. 3-4 ("This Court concludes that the
language of the Act does not evidence a clear congressional intent for or against its
application in pending cases.... [T]he court concludes that the legislative history of th^ Act
does not clearly indicate one way or the-other whether Congress intended the Act to apply
to pending cases.")
2
parties, or instead is, as to these parties, procedural or remedial. We, and apparently
appellees, agree that that is the Ninth Circuit standard where congressional intent is
unclear.5 Within this circuit,6 five of the six district court decisions on this issue have
concluded that the Civil Rights Act, or specific sections thereof, do apply to pre-existing
claims.7 The only decision to the contrary neither cites nor purports to apply the
established Ninth Circuit standard.8
This appeal also raises the separate and distinct issue of whether, in light of the
passage of the Civil Rights Act, the decision in Patterson v. McLean Credit Union. 491
U S. 164 (1989), should no longer be applied retroactively. So far as we have been able to
ascertain this is a question of first impression, which has not been discussed by any judicial
decision since the passage of the Act in November, 1991.
5 The application of that standard to this case is discussed in part IV of our
Supplemental Brief and in part II of the instant brief.
6 Questions regarding the applicability of the Civil Rights Act to pre-existing claims
are pending before this court in two other cases. Reynolds v. Martin, (No. 91-15237), noted
in our Supplemental Brief, p. 2 n.l, was argued on May 14, 1992. Alonio v. Wards Cove
Packing Co., Nos. 91-35306, 91-35861, is scheduled for argument on June 1, 1992.
Slender v. Lucky Stores, 780 F. Supp. 1302 (N.D. Cal. 1991); Sanders v. Culinary
Workers Union Local No. 226, _ F. Supp. _ , 1992 WL 25407 (D. Nev. Feb. 11, 1992);
United Slates v. Department of Menial Health, __ F. Supp. __, 1992 WL 45359 (E.D. Cal'
March 2, 1992); Lee v. Sullivan, __ F. Supp. __, 1992 WL 59020 (N.D. Cal. March 26,
1992); Fernando v. Hotel Nikko Saipan, C.A. No. 91-0013 (D. Northern Mariana Islands’
March 7, 1992).
8 Benitez v. Portland General Elec., 58 FEP Cas. 449, 1992 U.S Dist LEXIS 5?59 (D
Ore. Feb. 26, 1992). “
3
II. Section 101 Should Be Applied To This Case Because It Is Procedural and
Remedial
We urged in our Supplemental Brief that legislation regarding procedures and
remedies should be applied to pre-existing claims absent clear congressional directives to
the contrary. (Pp. 30-35). Appellant acknowledges that this is the controlling Ninth Circuit
standard.9
Application of section 101 would affect the instant litigation in two ways. First, it
would permit a plaintiff such as appellant to bring suit directly in federal court, without first
filing charges with EEOC or meeting the various Title VII deadlines. Second, a plaintiff
in a section 1981 action may obtain more complete relief than is available in a Title VII
action, i.e. compensatory or punitive damages. In Patterson v. McLean Credit Union, 491
U.A. 164 (1989), the Supreme Court repeatedly characterized the differences between
section 1981 and Title VII as pertaining to "procedure" and "remedial":
Interpreting § 1981 to cover postformation conduct ... would ... undermine
the detailed and well-crafted procedures of Title VII. In Title VII, Congress
set up elaboiate administrative procedures.... Only after these procedures have
been exhausted ..., may [a plaintiff] bring a title VII action.... Where conduct
is covered by both § 1981 and Title VII, the detailed procedures of Title VII
are a dead letter.... We should be reluctant however, to read an earlier
statute broadly where the result is to circumvent the detailed remedial scheme
..., in a later statute ... [Petitioner chose to pursue only remedies under §
1981, and not under Title VII.... By reading § 1981 ... as limited ... we may
preserve the integrity of Title VII’s procedures....
Supplemental Brief of Appellees, pp. 19 ("this Court ... applies the well-established
presumption against retroactivity, but exempts from the general rule statutes which only
change procedures or remedies"), 23 n. 25 ("a limited exception to the general rule of
prospective application of a new statute where the law changes procedures or remedies
only )> PP- 30-31 ("This Court ... applies the normal presumption against retroactivity to
substantive changes and recognizes a limited exception to the rule for purely procedural or
remedial changes").
4
491 U.S. at 180-81 (emphasis added). Johnson v. Railway Express Agency, 421 U.S. 454,
459-62 (1975), held:
"Despite Title VII’s range ... the aggrieved individual clearly is not deprived
of other remedies he possesses and is not limited to Title VII in his search for
relief.... ’... [Remedies available ... under Title VII are co-extensive with the
individual’s right to sue under ... § 1981 ... the two procedures augment each
other ....’ .... An individual who establishes a cause of action under § 1981
is entitled to ... compensatory and ... punitive damages ... [a]nd ... is not
restricted to the ... back pay recovery under Title VII. ... Petitioner and the
United States ..., concede, as they must, the independence of the avenues of
relief respectively available under Title VII and the other § 1981.... Congress
has made available ... independent administrative and judicial remedies....
[T]he remedies available under Title VII and under § 1981 ... are separate...."
We urge that Patterson and Johnson compel the conclusion that section 101 is procedural
and remedial.
(1) Appellees urge that section 101 is substantive because it broadens the types
of discrimination forbidden by section 1981.10 This argument is foreclosed by this court’s
decisions in Mahroom v. Hook, 563 F.2d 1369 (9th Cir. 1977), and Bunch v. United States,
548 F.2d 336. 339 (9th Cir. 1977). Mahroom concerned 1972 legislation which expanded
Title VII to forbid employment discrimination by the federal government, and to create a
new cause of action against federal agencies. This court held the 1972 law was procedural
and remedial because federal employment discrimination was already forbidden by other
laws:
Section 717(c) is merely a procedural statute that affects the remedies
available to federal employees suffering from employment discrimination.
Their right to be free from such discrimination has been assured for years.
10 Supplemental Brief of Appellees, pp. 27-28 and n. 27.
5
Mahroom, 563 F.2d at 1373 (emphasis in original). Bunch concerned 1974 legislation which
amended the ADEA to forbid age discrimination by the federal government, and to create
a new cause of action against federal agencies. Because such age discrimination had
previously been forbidden by other provisions, this court held:
The ADEA amendments, like the 1972 Title VII amendments, did not create
new substantive rights, but simply created new procedures and remedies for
the vindication of pre-existing rights.
Bunch, 548 F.2d at 339. Appellees do not deny that federal and state law forbade the acts
of discrimination which they are alleged to have committed. Under these circumstances
the practical effect of section 101, like the provisions in Mahroom and Bunch, is merely to
supplement the available remedies.
(2) Appellees appear to suggest that section 101 is "substantive" because it
authorizes awards of compensatory and punitive damages, while Title VII authorizes only
back pay awards.11 But statutes regarding the quantum of monetary relief to be awarded
are by definition legislation regarding remedies. The Supreme Court decisions in Patterson
and Johnson expressly described the broader monetary relief available under section 1981
as remedial. The decisions of this court presuming the applicability to pre-existing claims
of new remedies surely include changes which increase the remedy available as well as
legislation which reduces remedies. Indeed, Mahroom was just such a case, because the
1972 amendments to Title VII for the first time expressly authorized back pay awards
against federal agencies, whereas "it was doubtful that back pay" could have been awarded
11 Id. pp. 27, 33.
6
by the courts against federal agencies prior to 1972. Brown v. General Services
Administration, 425 U.S. 820, 826 (1976).
The courts of appeals have repeatedly applied to pre-existing claims new legislation
providing an additional monetary remedy to enforce already established substantive
prohibitions. Hastings v. Earth Satellite Corp., 628 F.2d 85, 92-94 (D.C. Cir. 1980) (applying
to pre-Act claim law eliminating cap on damages);12 Thompson v. Sawyer, 678 F.2d 257,
278-96 (D.C. Cir. 1981) (applying to pre-Act claim law authorizing recovery of liquidated
compensatory damages); O ’Hare v. General Marine Transport Corp., 740 F.2d 160, 171 (2d
Cir. 1984) (additional remedy of double interest and liquidated damages); United States v.
Monsanto, 858 F.2d 160, 175-76 (4th Cir. 1988) (additional remedy of pre-judgment
interest); United States v. R.W. Meyer, 889 F.2d 1497, 1505-06 (6th Cir. 1989) (additional
remedy of pre-judgment interest); cf Van Allmen v. State o f Connecticut Teachers Ret. Bd.,
613 F.2d 356, 360 (2d Cir. 1979) ("simply asserting that financial payments are unforeseen
does not mean they will produce ’manifest injustice’").
(3) Appellees urge, in the alternative, that even if section 101 is procedural and
remedial, the rule favoring application of procedural and remedial changes in the law is
12 The court explained:
"The existence of the $24,000 ceiling in effect allowed the
employer to avoid the responsibility for the full costs associated
with his enterprise because it deprived his employees of
compensation.... Removing the artificial ceiling, therefore,
creates no injustice. It instead removes an obstacle to fair
treatment...."
7
irrelevant because other provisions of the Civil Rights Act will affect the substantive rights
of other litigants. Appellees note, for example, that section 107 of the Act for the first time
forbids race based adjustments in the scores of job related tests.13
This argument is precluded by numerous decisions of this court. For example,
Mahroom applied to pre-existing claims section 717 of the 1972 Amendments to Title VII,
without regard to the fact that other provisions of the same statute were clearly substantive.
Section 2 of the 1972 Amendments, for example, expanded the coverage of Title VII to
forbid for the first time discrimination on the basis of sex, religion and national origin by
employers with 15-24 employees.14 Other decisions of this court applied to pre-existing
claims procedural and remedial section or subsections that were part of statutes with
numerous substantive provisions. See, e.g., United Slates v. Miller, 830 F.2d 1073, 1075-76
(9th Cir. 1987) (Comprehensive Crime Control Act of 1984, 98 Stat. 1837) (statute is 362
pages long); F.D.I.C. v. New Hampshire Insurance Co., 1991 U.S. App. LEXIS 30071 (9th
Cir. 1991) (FIRREA, 103 Stat. 185) (more than 100 separate sections); Idaho v. Howmet
Turbine Component Co., 814 F.2d 1376, 1378 (9th Cir. 1987) (amendment to
Comprehensive Environmental Response Compensation and Liability Act); League to Save
Lake Tahoe, Inc. v. Trounday, 598 F.2d 1164, 1172 (9th Cir. 1979) (1977 Clean Air Act
amendments).
(4) Appellees urge that, even if section 101 does not affect their substantive
rights, it might affect the substantive rights of other defendants. But the touchstone of this
13 Supplemental Brief of Appellees, pp. 27, 33.
14 Compare 86 Stat. 103 with 78 Stat. 247.
8
court’s decisions is whether application of a provision to a particular pre-act claim would
affect the substantive rights of the parties. See, e.g., Friel v. Cessna Aircraft Co., 751 F.2d
1037, 1039 (9th Cir. 1985) ("No conduct on the part of either party would have differed if
the statute had been in effect at the time...."); Krnso v. International Tel. & Tel. Corp., 872
F.2d 1416, 1425 (9th Cir. 1989) (same); Matter o f Reynolds, 726 F.2d 1430, 1424 (9th Cir.
1984) (key consideration is "the impact of the change in the law upon the rights of the
parties"). In Vogel the Sixth Circuit held that the dispositive issue was whether the
application of the 1991 Act would affect the substantive rights "of the parties to this
action."15 Appellees themselves repeatedly refer to the standard under Bradley v.
Richmond School Bd., 416 U.S. 696 (1974), as turning on what impact a new law would
have on the rights of "the parties."16
If, as we urge, the only effect of section 101 in the instant litigation is procedural
and remedial, it is difficult to imagine why application of that section here should be denied
simply because some other section of the Act, or this section in some hypothetical context,
might affect the subsutntive rights of some other litigant. If the Civil Rights Act did affect
the substantive rights of appellees in this case, surely they would object, and with good
reason, if the court were to apply the Act to appellees merely because the application of
other provisions to other litigants might be procedural and remedial.
15 58 FEP Cas. at 404.
16 Supplemental Brief of Appellees, pp. 25-27.
9
(5) Appellees insist that it would be "manifestly unjust" to apply section 101 in
the instant case.17 Indeed, appellees plead throughout their brief that a terrible injustice
would be done if appellant were merely accorded a day in court to prove his allegations of
racial discrimination. Permitting a trial on the merits, appellees insist, would be "patently
unfair"18 and "doubly unfair,"19 because "it is unfair to change the rules of the game
midway through the contest".20
These protestations bear no relationship whatever to the actual circumstances of this
litigation. The complaint in this action alleges intentional racial discrimination in
employment. It is a moral certainty that every official of the General Motors Corporation
knew full well at all times that such racial discrimination was entirely unlawful. Had the
district court not erroneously dismissed this case, the claims would have been tried under
prevailing § 1981 principles prior to the June 1989 decision in Patterson. Appellees seek
to avoid liability for discriminatory acts that occurred in 1982-85 on the ground that,
between June 1989 and November 1991, the now overturned decision in Patterson
precluded most section 1981 actions. We do not question appellees’ right to seek to invoke
the temporary defense windfall created by Patterson. But appellees’ brief reads at times as
though employers have a right to expect that courts will create, expand, or at least preserve
remedial defects which will obstruct enforcement of the nation’s anti-discrimination laws.
17 Supplemental Brief of Appellees, pp. 25-27.
18 Id. at 26.
19 Id. at 34.
10
"[OJne cannot have a vested right in a state of the law which left the injured party without,
or with only a defective remedy." Ferrero v. Associated Materials, 923 F.2d 1441, 1446 (11th
Cir. 1991).
Appellee’s argument regarding the application of Bradley is clearly incorrect.
Appellees contend "Bradley counsels against" applying a new law unless one of the litigants
is a government entity.21 To the contrary, Bradley favors application of new laws to pre-
Act claims where litigation concerns matters "of great national concern." 416 U.S. at 719.
The Supreme Court itself has described "eradicating discrimination throughout the economy
and making persons whole for injuries suffered through past discrimination" as "[ijmportant
national goals." Albemarle Paper Co. v. Moody, 422 U.S. 405, 417, 421 (1975). This court
has repeatedly applied new laws to pre-existing litigation among private parties. Kraso v.
International Telephone & Telegraph, 872 F.2d 1416 (9th Cir. 1989); Friel v. Cessna Aircraft
Co., 751 F.2d 1037 (9th Cir. 1985). Appellees object that it would be inappropriate under
Bradley to impose on General Motors "new legal requirements." The requirements of
section 101 - that appellees not discriminate in employment on the basis of race - date,
at the least, from the adoption of the 1964 Civil Rights Act. As a federal contractor,
General Motors has in fact been forbidden to discriminate since the issuance in 1941 by
President Roosevelt of Executive Order 8802.
(6) Finally, appellees appear to suggest that the panel deciding this case should
reject the established Ninth Circuit distinction between substantive and procedural/remedial
laws, and refuse to apply any new laws to existing litigation absent an express congressional
21 Id. at 25.
11
directive to do so. This suggestion should not be followed for several reasons. First, the
distinction between substantive and procedural/remedial laws is the controlling law in this
circuit, which no panel is at liberty to disregard. If that distinction is to be overthrown, it
must be by the Ninth Circuit en banc. Second, as the Seventh Circuit emphasized in
Mozee, the lower courts have no authority to disregard a Supreme Court decision, in this
instance Bradley, which the Supreme Court itself has deliberately declined to overrule.
1992 U.S. App. LEXIS 9857 at *17-* 18, (citing Rodriguez de Quijas v. Shearson/American
Express, 490 U.S. 477 (1989)).
Third, the vitality of this circuit’s established standards is a matter whose importance
reaches far beyond the Civil Rights Act. The overwhelming majority of decisions in this
circuit and elsewhere applying Bradley are not private civil rights cases. We set forth in
Appendix B a list of the 19 decisions of this court which during the last decade applied new
laws to pre-existing claims. None of these decisions involved private civil rights litigation.
Over the course of the last decade the litigant which has invoked Bradley most often and
most insistently has been the United States Department of Justice. We reproduce in the
Appendices C-H six Justice Department briefs filed within the last two years defending and
seeking to apply the decision in Bradley.
Fourth, Justice Scalia’s concurring opinion in Kaiser Aluminum & Chemical Corp. v.
Bonjomo, 108 L.Ed.2d 842 (1990) on which appellees rely, is historically inaccurate. The
history of this issue is voluminous, and we summarize it only briefly. The Supreme Court
decisions disfavoring "retroactive" application of legislation were, from the outset, limited
12
to, indeed understood to refer only to, legislation affecting vested rights.22 New legislation
regarding remedies and procedures was always treated differently by the Supreme Court.
The Court observed in 1833,
Almost every new law, providing a new remedy, affects and operates upon
causes of action existing at the time the law is passed.... It therefore forms
no objection to the [statute in question] that the cause of action existed
antecedent to its passage, so far as it applies to the remedy, and does not
affect the right.
Sampeyreac v. United States, 32 U.S. 222, 239 (1833). The Supreme Court routinely
interpreted new legislation regarding remedies to apply to pre-existing claims.23 In 1913
the Court held that remedial statutes were "exceptions" to any presumption against applying
new laws to existing claims, noting "the extensive effect which courts have given to remedial
statutes, applying them ... to the past as well as the future." Winfree v. Northern Pacific
Railway, 227 U.S. 296, 301 (1913).
The lower courts have recognized for a century this circuit’s distinction between
substantive and procedural/remedial laws. An 1883 decision observed that
both in the civil and common law, the repugnance to retrospective legislation
was not understood to extend to remedial legislation.... [Particularly should
this be so where new remedies are given.
Larkin v. Saffarans, 15 F. 147, 149-50 (C.C.W.D. Tenn. 1883). Forty years ago the District
of Columbia Circuit noted:
See, e.g., United States v. Heth, 7 U.S. (3 Cranch) 399, 414 (1806) ("vested
rights"); Twenty Per Cent Cases, 87 U.S. 179, 187-88 (1874) ("vested rights"); Auffm ’ordl v.
Rasin, 102 U.S. 620 (1881) ("vested rights").
23 McBurney v. Carson, 99 U.S. 567, 569 (1879) ("It is a remedial statute"); Sturges v.
Carter, 114 U.S. 511, 518 (1885) ("a new remedy"); Stephens v. Cherokee Nation, 174 U.S.
445, 477 (1899) ("A new remedy".)
13
The general rule of course is that statutes ordinarily will be presumed to have
only a prospective and not a retroactive operation unless a contrary legislative
intent is apparent. But this rule does not apply to statutes which effect
merely changes in remedies or modes of procedure for enforcing existing
liabilities.
Beatty v. United States, 191 F.2d 317 (8th Cir. 1951).24
Justice Scalia’s opinion in Bonjomo seriously misrepresents the views of nineteenth
century authorities on this issue. Justice Scalia in Bonjomo quotes Chancellor Kent’s
statement that "it cannot be admitted that a statute shall, by any fiction or relation, have
any effect before it was actually passed." Kaiser Aluminum v.Bonjorno 108 L.Ed.2d at 865,
quoting J. Kent, Commentaries on American Law *455. But Kent goes on to explain that
his objection is to a law "affecting and changing vested rights", and emphasizes that the
doctrine quoted by Scalia
is not understood to apply to remedial statutes, which may be of a
retrospective nature, provided they do not impair contracts, or disturb
absolute vested rights, and only go to confirm rights already existing, and in
furtherance of the remedy ... adding to the means of enforcing existing
obligations.
Commentaries on American Law at *455-*456 (Emphasis added). Justice Scalia quotes
Justice Story’s statement that
24 See also Koger v. Ball, 497 F.2d 702, 705 (4th Cir. 1974) (decided two weeks before
Bradley) ("procedural statutes that affect remedies are generally applied to cases pending
at the time of enactment. Of course, retrospective application is not allowed when it will
work a manifest injustice by destroying a vested right"); Federal Shopping Way, Inc. v.
McQuaid, 457 F.2d 176, 180 (9th Cir. 1972); United Slates v. Haughlon, 413 F.2d 736, 738
(9th Cir. 1969); Turner v. United Stales, 410 F.2d 837, 842 (5th Cir. 1969); Grummit v.
Sturgeon Bay Winter Sports Club, 354 F.2d 564, 568 (7th Cir. 1966); Dargel v. Henderson, 200
F.2d 564, 566 (Em. Ct. App. 1952); On v. United Slates, 174 F.2d 577, 580 (2d Cir. 1949V
Luckenbach S.S. Co. v. Norton, 106 F.2d 137, 138 (3d Cir. 1939); Federal Reserve Bank of
Richmond v. Karlin, 7 F.2d 50, 52 (4th Cir. 1935); Downs v. Blount, 170 F.15, 21 (5th Cir
14
retrospective laws are ... generally unjust; and ... neither accord with sound
legislation nor with the fundamental principles of the social contract.
108 L.Ed.2d at 865, quoting J. Story, Commentaries on the Constitution, § 1398 (1851). But
Story defined "retrospective law", not to refer to any new statute affecting any pending case,
but more narrowly as a
statute which takes away or impairs vested rights acquired under existing
laws, or creates a new obligation, imposes a new duty, or attaches a disability,
in respect to transactions or considerations past.
Society v. Wheeler, 1 Gall. 139 (1814). Over a century ago the Supreme Court read Story’s
definition to mean that a statute providing a new remedy to enforce an existing right was
not, even as applied to a pre-Act violation, a "retroactive law". Sturges v. Carter, 114 U.S.
511, 519 (1885).
These distinctions were analyzed in Black’s Interpretation o f Laws (2d ed. 1911), by
the celebrated author of Black’s Law Dictionary. Black summarized "the General Rule" to
incorporate certain established exceptions:
Except in the case of remedial statute^ and those which relate to procedure
in the courts, it is a general rule thai acts of the legislature will not be so
construed to make them operate retrospectively....
(P. 385). A different rule of construction applied to statutes creating new remedies:
Remedial statutes are to be liberally construed; and if a retrospective
interpretation will promote the ends of justice and further the design of the
legislature in enacting them, or make them applicable to cases which are
within the reason and spirit of the enactment, though not within its direct
words, they should receive such a construction, provided it is not inconsistent
with the language employed.... In the class of statutes which may be
construed retrospectively are those which create a new remedy, or enlarge the
existing remedy for existing causes of action.
15
(Pp. 404-410). Numerous other authorities endorsed this distinction in the late nineteenth
and early twentieth centuries.25
III. The Language of the Act Applies Section 101 to Pre-Existing Claims
Appellees contend that "the phrase ’take effect on the date of enactment’ must be
prospective in nature," because "take effect" is commonly defined to mean "to become
operative ... to produce a result."26 Insofar as the Civil Rights Act is procedural and
remedial, however, this very definition supports the conclusion that the Act applies to pre
existing claims. A procedural or remedial provision specifies how a judge (or in some
instances a jury) is to process and remedy a claim seeking redress for unlawful behavior.
The question at issue in the instant appeal is whether the courts will permit appellant to
utilize the remedies afforded by amended section 1981 to redress the alleged acts of
discrimination. The Civil Rights Act embodies a directive to the courts to permit use of
such remedies, a directive which is "operative" on the courts after November 21, 1991. We
do not contend that section 101 was intended to somehow "produce a result" in the 1980’s,
when the alleged discrimination occurred. We urge only that section 101 was intended,
after November 21, 1991, to "produce a result" in the federal courts, to wit that litigants
would be permitted to utilize the amended section 1981 remedial scheme.
25 C. Endlich, Commeniaiy on the Interpretation of Statutes, 362-67, 386-87, 411, 412
(1888); W.G. Myer, Vested Rights, 18 (1891); H. Broom, Legal Maxims, 27 (8th ed. 1911);
59 Corpus Juris § 696, 700, pp. 1171-74 (1932); 50 Am. Jur. "Statutes", § 482, pp 505-06
(1944).
26 Supplemental Brief of Appellees, pp. 3-4.
16
Appellees also rely on the EEOC Policy Guidance of December 27, 1991.27 The
most important thing about the Policy Guidance is what it is not - it does not purport to
be an interpretation of the actual meaning or intent of the Civil Rights Act with regard to
pre-existing claims. The Policy Guidance concludes that the statutory language actually
supports application of the law to pre-existing claims, albeit not conclusively:
Two sections of the Act contain specific exemptions for pre-Act conduct,
arguably suggesting that the remaining provisions of the Act, including
section 102, are to be applied to pending cases. Section 109(c) [and] ...
Section 402(b).... While the above sections may create an inference that the
remainder of the Act has retroactive effect, it cannot be said that "the []
language [of those sections] requires the result."28
The Policy Guidance does not purport to find the legislative history supports non
application, and clearly does not regard Senator Dole’s memorandum as authoritative:
[T]he legislative history offers conflicting views on the retroactivity of the Act
and does not conclusively resolve the issue. Compare, e.g., .... (statement of
and interpretative memorandum submitted by Senator Danforth) ... (section-
by-section analysis submitted by Senator Dole) ... (document submitted by
Senator Dole) ... (statements of Senators Durenberger and Simpson) with ...
(statement of Senator Kennedy) ... (statement of and exhibit submitted by
Senator Kennedy.)29
This discussion of the language and legislative history of the Act comes to no conclusion
as to whether the Act applies to pre-existing claims.
The balance of the Policy Guidance deals neither with the actual intent of Congress
nor with any substantive EEOC policy regarding the desirability of awarding damages for
27 Supplemental Brief of Appellees, p. 16.
28 Policy Guidance, pp. 3-4.
29 Policy Guidance, p. 4.
17
pre-existing claims. Rather, the remaining EEOC analysis discusses only the judicial
precedents. Here too the Commission finds the precedents conflicting and inconclusive:
One could argue that employers would indeed suffer manifest injustice if they
were required to pay damages for conduct before the law provided for such
a penalty. However, it could also be argued that, in light of the public
concerns inherent to Civil Rights Act litigation, requiring employers to pay
unforeseen damages for unlawful discrimination is not manifestly unjust.
Thus, in light of the ambiguity in legislative history and Supreme
Court precedent, the issue of whether the damages provisions in the new Act
should be applied retroactively is much in question.30
In sum, almost all of the Policy Guidance is devoted to explaining that the EEOC is unsure
of the meaning of the statutory language, of the significance of its legislative history, or of
the direction of the relevant judicial decisions.
The Commission’s operative decision and reasoning is to be found in the two
sentences at the end of the Policy Guidance:
Bowen represents the Supreme Court’s more recent holding on this issue, and
the Commission will follow the dictates of that case with regard to the
retroactivity of the damages provision. Accordingly, the Commission will not
seek damages in charges filed prior to enactment of the Act, or in post-Act
changes that challenge pre-Act conduct.31
These sentences purport to interpret, not the Civil Rights Act, but Bowen, concluding that
Bowen, if it controls, would "dictat[e]" that section 102 not be applied to pre-existing claims.
Even here the Commission follows Bowen, not because it believes the decision is the better
statement of the law, but merely because that decision is the "more recent". It would surely
30 Policy Guidance, pp. 6-7 (footnotes omitted).
31 Policy Guidance, p. 7.
18
be inappropriate to attach significance to any interpretation of Bradley and Bowen by the
members of the EEOC, particularly since the Commissioners are not required to be, and
most in fact are not, lawyers." As is set forth in Appendices C-H, the Department of
Justice is currently arguing on behalf of other federal agencies that Bradley remains good
law.
IV. The Legislative History Demonstrates That Section 101 Applies to Pre-Existing
Claims
Appellees misapprehend in several important respects the legislative history of the
1991 Act:
(1) Appellees assert that Senator Kennedy’s views are not "meaningful" because
he was not one of the "legislators who crafted ... the compromise."32 In fact, however, the
compromise was labeled by both sides as the "Danforth-Kennedy Substitute".33 The final
1991 debates are replete with references to Senator Kennedy as being, with Senator
Danforth, the key negotiator of the terms of the compromise bill.34
32 Supplemental Brief of Appellees, p.17.
33 137 Cong. Rec. S 15233 (Sen. Kennedy), S 15239 (Sen. Gorton)(daily ed. Oct. 25,
1991); S 15390-91 (Sen. Bingaman)(daily ed., Oct. 29, 1991); S 15463 (Sen. Kassebaum),’
S 15468 (Sen. Adams), S 15485 (Sen. Kohl), S 15490 (Sen. DurenbergerVdaily ed Oct 30
1991). 3
34 137 Cong. Rec. S 15238 (Sen. Hatch), S 15240 (Sen. Gorton), S 15276 (Sen
Danforth)(daily ed., Oct. 25, 1991); S 15463 (Sens. Dodd and Kassebaum), S 15465 (Sen.
Harkin), S 15471 (Sen. Chafee), S 15489 (Sen. Leahy), S 15491 (Sen. Kerrey), S 15495
(Sens. Dixon and Dantorth), S 15496 (Sen. Akaka), S 15497 (Sen. Wellstone), S 15498
(Sen. Dole)(daily ed. Oct. 30, 1991).
19
(2) Appellees assert that Congressman Edwards was neither a sponsor of the
legislation nor "a key figure in crafting the bill".35 In fact Congressman Edwards was a
sponsor of the final compromise36, and was one of the floor managers of the 1991 bill.37
(3) Appellees note that Senator Dole placed in the Congressional Record a
written statement suggesting that section 402(b) did not provide treatment for the Wards
Cove company different from that accorded other employers under the Act.38 This written
statement was only printed in the Congressional Record the day after the Senate vote.
What Senator Dole actually said aloud on the floor of the Senate prior to the vote was
precisely the opposite, that section 402(b) contained "[ljanguage exempting the Wards Cove
Packing Co."39
(4) The vetoed 1990 bill contained two types of provisions regarding pre-Act
claims; some dealt with cases still pending on the day of enactment, while others would
have required that final judgments be reopened. Appellees, after summarizing the
provisions regarding pending cases, state "President Bush cited these ’unfair retroactivity
rules’ as one of his reasons for vetoing that bill. See 136 Cong. Rec. s 16562."40 In fact,
35 Supplemental Brief of Appellees, p.17.
30 137 Cong. Rec. H 9526 (daily ed. Nov. 7, 1991).
37 1 37 Cong. Rec. H 3849, H 3849-H 3863 (daily ed. June 4, 1991).
38 Supplemental Brief of Appellees, pp. 9-10.
137 Cong. Rec. S 15953 (daily ed. No'\ 5, 1991)(emphasis added).
* S I i l i ; -pfc.f > ’ i • .• i* '- l » *
40 Supplemental Brief of Appellees, p.6.
20
however, President Bush did not "cite" the particular provisions listed by appellees, either
at p. S 16562 or anywhere else.
(5) The President’s veto was explained in an accompanying memorandum from
the Attorney General, who stated that the President objected to applying the new law "to
cases already decided".41 Appellees suggest the Attorney General meant to refer to cases
still pending on appeal. The Attorney General’s remark, however, was merely reiteration
of the Administration’s objections to "upsetting final judgments".42 Even conservatives
understood the Attorney General’s objections to be limited to final judgments.43 Senator
Hatch, who was the leading supporter of the Administration during the 1990 debates
regarding the veto, stated expressly that he favored legislation that would overturn Patterson
and be applicable to Brenda Patterson’s own pending litigation.44
V. Section 101 Should Be Applied Here Because It Is Restorative Legislation
Appellees misapprehend the holdings of the well reasoned decisions, cited in our
earlier brief, which presume restorative legislation applicable to pre-existing claims.
Appellees mischaracterize these cases as purporting to hold that subsequent congressional
41 Memorandum for the President, Oct. 22, 1990, p.10.
4' Letter of Attorney Genera] Thornburgh to Senator Edward Kennedy, April 3, 1990,
p.10 (emphasis added).
See H.R.Rep. 101-644, pt.2, p.71 (1990) (Additional views of Rep. Sensenbrenner
et al.).
44 136 Cong. Rec. S 16565 (daily ed. Oct. 24, 1990):
"This [vetoed] bill ... is an employer-employee relations bill, except for the
overrule of the Patterson versus McLean case which would take care of
Brenda Patterson. We are prepared to do that right now."
21
action somehow proves that earlier Supreme Court decisions "misconstrued the actions of
a prior Congress."45 Appellees argue that any such earlier Supreme Court decision is
dispositive as to the meaning of the prior law, and appellees thus insist that there could be
no such thing as "restorative legislation."46
The problem which the cases at issue in fact address is a different one — legislation
that is "restorative" in the sense that it reestablishes the rule of law which existed under
prevailing precedents prior to the Supreme Court decision at issue. The lower court
decisions set forth in our earlier brief properly conclude that where Congress enacts
legislation to restore the law to where it stood under such prior precedents, Congress can
be presumed to have intended the legislation to cover litigants who acted at a time when
those precedents were still controlling.47
Congress clearly and properly understood that section 101 was "restorative" in the
sense that it returned the law to where it stood under pre-Patterson case law. The
legislative history of section 101 is less murky than some other provisions, because section
101 was relatively uncontroversial and remained essentially unchanged through the
legislative process. The Senate Report discussed the predecessor of section 101 under the
45 Supplemental Brief of Appellees, p. 35.
40 id- at 36.
47 The circumstances of DeVargas v. Mason & Hanger-Silas Mason Co.. 911 F.2d 1377
(10th Cir. 1990) are clearly distinguishable. DeVargas concerned the applicability of the
Civil Rights Restoration Act, which overturned the decision in Grove City College v. Bell.
465 U.S. 555 (1984). The plaintiff in DeVargas sought to apply that Act, which forbad
previously lawful conduct to acts occurring after Grove City. In the instant case appellant
seeks to apply the remedial provisions of section 101 to a cause of action that arose before
Patterson. In a subsequent decision the Tenth Circuit limited DeVargas to statutes affecting
substantive rights. Arnold v. Maynard, 942 F.2d 761, 762 n.2 (10th Cir. 1991) (citing Friel).
22
heading "The Need To Restore The Prohibition Against All Racial Discrimination in the
Making and Enforcement of Contracts".48 The discussion in the first House Report was
headed "Restoring the Prohibition Against All Race Discrimination in the Making and
Enforcement of Contracts",49 and observed that "[i]n cutting back the scope of the right
to ’make’ and ’enforce’ contracts, Patterson also has been interpreted to eliminate . . .
claims that the courts had previously recognized under Section 1981."50 The second House
Report utilized the heading "Restoring Prohibition Against All Discrimination in the Making
and Enforcement of Contracts",51 explaining that "[b]y restoring the broad scope of
Section 1981, Congress will ensure that Americans may not be harassed, fired or otherwise
discriminated against in contracts because of their race."52 In the floor debates members
of both parties and Houses described section 101 as "restoring" the law to where it had
stood prior to Patterson,53
48 S. Rep. 101-315, p. 11 (1990) (emphasis added).
49 H.R.Rep. 101-644, pt. 2, p. 86 (1990). (emphasis added).
50 Id. at 88 n.96.
51 H.R.Rep. 101-644, pt. 1, p. 42 (1990) (emphasis added).
52 Id. at 9 (emphasis added).
53 See, e.g., 137 Cong. Rec. S 15235 (Sen. Kennedy) (daily ed., Oct. 25, 1991); S 15285
(Sen. Seymour) (daily ed., Oct. 28, 1991); S 15383 (Sen. Jeffords) S 15391 (Sen. Breaux)
(daily ed., Oct. 29, 1991); S 15482 (Sen. Gore); S 15483 (Sen. Danforth), S 15489 (Sen.
Leahy) (daily ed., Oct. 30, 1991); H 9526 (Rep. Edwards) (daily ed. Nov. 7, 1991).
23
VI. Patterson v. McLean Credit Union Should Not Be Applied Retroactively
Appellees properly acknowledge that the determination whether to apply a new
decision retroactively turns in part on whether the decision "overruled clear circuit
precedent on which [a] party was entitled to rely."54 Appellees then assert:
Neither before nor after Gibbs filed his complaint herein (July 19, 1985) was
there any clear Ninth Circuit precedent interpreting and holding that Section
1981 includes within its protections on-the-job racial harassment or
discrimination in the terms and conditions of employment, including alleged
demotion or denial of promotion55
This description of Ninth Circuit case law is not correct. We set forth a representative list
of Ninth Circuit pre-Patterson decisions in Appendix A.
The retroactivity cases cited by appellees, all decided prior to the adoption of the
1991 Civil Rights Act, did not and could not consider whether enactment of the 1991 Act
rendered inappropriate retroactive application of Patterson. The very question posed by the
instant circumstances is unique. Ordinarily the issue is whether a decision, already being
applied prospectively, should also be applied retroactively. In this instance, however,
Patterson will not be applied prospectively, because it has been overturned by Congress.
With the holding in Patterson now a dead letter as to future claims, appellees urge that
Patterson be applied posthumously. For the reasons set forth in our earlier brief, we urge
that traditional judicial criteria preclude a posthumous retroactive application of a decision
which Congress has overruled.
54
55
Supplemental Brief of Appellees, p. 41, n. 42.
Id.
24
CONCLUSION
For the above reasons, the decision of the district court should be reversed, and the
case remanded for a jury trial of all discrimination claims that arose on or after July 15,
1982.
Respectfully submitted,
LAW OFFICES OF LEROY S. WALKER
PETER F. LAURA
MICKEY J. WHEATLEY
6300 Wilshire Boulevard
Suite 1455
Los Angeles, CA 90048
(213) 966-4555
JULIUS L. CHAMBERS
ERIC SCHNAPPER
NAACP Legal Defense and
Educational Fund, Inc.
99 Hudson St., 16th Floor
New York, New York 10013
(212) 219-1900
Attorneys for Plaintiff-Appellant
25
APPENDICES
Ninth Circuit Decisions Prior to Patterson Applying Section 1981
to Post-Formation Conduct.
Ninth Circuit Decisions Applying New Laws to Pre-Act Claims
1982-1992.
Reply Brief of United States, United States v. Allied Corp., Civil No.
C—83—5898 FMS (N.D. Cal.)
United States' Reply to Defendants' Oral Motion to Dismiss,
United States v. Cannon, Civil Action No. 6-91-951-3K (D.S.C.)
Brief of Appellee United States, United States v. Peppertree Apartments,
No. 89-7850 (11th Cir.)
Memorandum of the United States, United States v. Presidio Investments,
CIV—90-0063-TUC-ACM (D. Ariz.)
Response of the United States, United States v. Rent America, Inc., No.
89—6188—PAINE (S.D. Fla.)
Government's Opposition to Defendant's Memorandum, United States
v. Bostick, Crim. No. F 14117-88 (Sup. Ct. D.C.)
APPENDIX A
Ninth Circuit Decisions
Prior to Patterson Applying Section
1981 to Post-Formation Conduct
(1) Jurado v. Eleven-Fifty Corp., 813 F.2d 14 06, 14 08, 1412 (9th Cir.
1987) (terms and conditions of employment dismissal).
(2) Mitchell v. Keith, 752 F.2d 385 (9th Cir. 1985) (dismissal).
(3) Domingo v. New England Fish Co., 727 F.2d 1429, 1434-35, 1446 (9th
Cir. 1984) (terms and conditions of employment; promotions).
(4) While v. Washington Public Power and Supply System, 692 F.2d 1286 (9th
Cir. 1982) (promotion, harassment, job segregation).
(5) Chung v. Pomona Valley Community Hospital, 667 F.2d 788, 791-92 (9th
Cir. 1982) (promotions, demotion, terms and conditions of
employment) .
(6) Williams v. Owens-Illinois, 665 F.2d 918, 922, 928 (9th Cir. 1982)
(assignments, promotions, harassment, discharge).
(7) Plummer v. Weston Intern. Hotels Co., Inc., 656 F.2d 502, 502, 506 (9th
Cir. 1981) (promotion).
(8) Sethy v. Alameda County Water Dist., 545 F.2d 1157, 1159, 1162 (9th
Cir. 1976) (en banc) (dismissal; "various episodes of alleged
racial indignity" on the job).
(9) Bowers v. Campbell, 505 F.2d 1155, 1157 and n.2 (9th Cir. 1974)
(demotion, denial of promotions, harassment, reprimands).
APPENDIX B
Ninth Circuit Decisions
Applying New Laws to Pre-Act Claims
1982-1992
San Pedro Fishermen's Welfare Trust Fund Local v. Di Bernardo, 664
F•2d 1344, 1346 (9th Cir. 1982) (1980 amendments to ERISA).
Ward v. Schweiker, 686 F.2d 762,
amendment to Social Security Act).
Rivera v. Becerra, 714 F.2d 887,
Rawlings v. Heckler, 7;
Access to Justice Act) .
764 (9 th Cir. 1982) (1980
896
Act)
(9 th Cir. 1983) (1980
1194 (9 th Cir. 1984) (Equal
Matter of Reynolds, 726 F.2d 1420, 1422-26 (9th Cir. 1984) (1981
amendment to Bankruptcy Act).
United States v. Ford, 737 F.2d 1506, 1508 (9th Cir. 1984) (Equal
Access to Justice Act).
Long v. United States I.R.S., 742 F.2d 1173, 1183 (9th Cir. 1984)
(Economic Recovery Tax Act).
Friel v. Cessna Aircraft Co., 751 F.2d 1037, 1038-40 (9th Cir.
1985) (1982 amendment to Death on the High Seas Act).
Campbell v. United States, 809 F.2d 563, 569-71 (9th Cir. 1987)
(Federal Courts Improvement Act).
State of Idaho v. Howmet Turbine Component Co., 814 F.2d 1376, 1378
(9th Cir. 1987) (amendment to Comprehensive Environmental Response
Compensation, and Liability Act).
U.S. v. Miller, 830 F.2d 1073, 1075-76 (9th Cir. 1987)
(Comprehensive Crime Control Act of 1984).
Kruso v. International Telephone & Telegraph Corp., 872 F.2d 1416,
1424-25 (9th Cir. 1989) (Judicial Improvements and Access to Justice Act of 1988).
Nichols v. Stapleton, 877 F.2d 1401, 1403 (9th Cir. 1989) (Judicial
Improvements and Access to Justice Act).
Delta Computer Corp. v. Samsung Semiconductor & Telecommunications
Co , 879 F. 2d 662, 663-65 (9th Cir. 1989) (amendment to FederalArbitration Act).
la
Bryant v. Ford Motor Co., 886 F.2d 1526, 1528 (9th Cir. 1989)
(amendment to removal statute).
In re Pacific Far East Lines, Inc. 889 F.2d 242, 247 (9th Cir.
1989) (Referees' Salary and Expense Fund Act).
Commonwealth of Northern Mariana Islands v. Kawano, 917 F.2d 379,
381-82 (9th Cir. 1990) (Commonwealth Judicial Reorganization Act)
Gonzalez v. Aloha Airlines, Inc., 940 F.2d 1312, 1316 (9th Cir.
1991) (Statute of Limitations)
F.D.I.C. v. New Hampshire Insurance Co., 1991 U.S. App. LEXIS 30071
(9th Cir. 1991) (FIRREA)
2a
1 RICHARD B. STEWART
Assistant Attorney General
Land and Natural Resources Division
WILLIAM W. WESTERFIELD, III
KAREN DWORKIN
Environmental Enforcement Section
Land and Natural Resources Division
P.0. Box 7611
Ben Franklin Station
Washington, D.C. 20044
(202) 633-2810
RICHARD L. BEAL
Environmental Enforcement Section
Land and Natural Resources Division
U.S. Department of Justice
100 Van Ness Avenue, 22nd Floor
San Francisco, California 94102
(415) 556-9027
Attorneys for Plaintiff
13 IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
14
15
16
17
18
19
20
21
22
23
24
25
26
UNITED STATES OF AMERICA,
Plaintiff,
v .
ALLIED CORPORATION,
et al. ,
Defendants.
AND RELATED COUNTERCLAIMS,
CROSS-CLAIMS, AND THIRD-PARTV COMPLAINTS__________________
UNITED STATES OF AMERICA,
Plaintiff,
v .
CHEMICAL & PIGMENT COMPANY, et al. ,
Defendants.
AND RELATED CROSS CLAIMS AND
THIRD PAP.TY CLAIMS ______
)
)
) CIVIL NO. C-83—5898 FMS
)
)
)
)
)
)
)
)
)
)
) CIVIL NO. C-83-5896 FMS
)
) CONSOLIDATED CASES
)
) REPLY OF UNITED STATES TO
> OPPOSITION BRIEFS OF
) DEFENDANTS TO U.S. MOTION
) ON THE APPROPRIATE STANDARD
) AND SCOPE OF REVIEW, ETC
)
) ______________
Date: December 5, 1989
Time: 2:30 p.m.
Court: Hon. Fern. Smith
OID-ilJ
ma* I)
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TABLE OF CONTENTS
INTRODUCTION........................................... x
SECTIONS 120 AND 211 DO NOT PREEMPT PRESIDENTIAL
AUTHORITY UNDER SECTION 104............................. 1
A. Section 211 Is Limited in Scope, and Does
Not Preempt Federal Response Authority
Elsewhere in CERCLA.............................. 2
B. The President's Authority to Formulate and Take
Response Actions Was Delegated to the Secretary
of Defense........................................ 6
C. Section 120 of CERCLA Does Not Operate to Alter
the Scope and Standard of Judicial Review UnderSection 113....................................... 8
D. Section 113(j) Applied to Presidential Decisions,
Not to EPA Decisions.............................. .
E. The Government's Claim for Cost Recovery
is Under Section 107, Not Section 106............. .
THE COURT MUST APPLY SARA BECAUSE IT IS THE LAW
IN EFFECT AT THIS TIME................................. .
A. Bradley Correctly States the Law Applicableto This Case................................. 18
B. firafllev Requires That Section 113(j) Be Applied
Be Applied to This Case.................. 19
C. The Enactment of Section 113(j) Did Not Change
the Standard of Review of Agency Response Actions..21
DEFENDANTS' RIGHT TO DUE PROCESS IS NOT DENIED
BY APPLYING SECTION 113 (J).................... 25
A. Defendants' Allegations of Conflict
of Interest Do Not Constitute Violations
of Procedural Due Process for a CERCLA
Remedy Decision............................. 26
B. The Application of Section 133(j) of CERCLA
in this Case Does Not Violate Due Process...........29
DEFENDANTS HAVE NCT MADE A SUFFICIENT SHOWING
THAT SUPPLEMENTATION OF THE ADMINISTRATIVE RECORD 5 REQUIRED.............................................31
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VI.
VII.
A. The Administrative Record Complies With Section H3 do of cercla............:...... **#*# - , **«-JX
B- The Administrative Record Includes All of
the Documents Generated in the Response Which
the EPA Guidance Requires Be Included..............
C. All Documents Generated in the Response Need
Not Be Included in the Administrative Record......3 6
D. Documents Properly Identified as Privileged
Need Not Be Included in the Administrative Record.....
......................................................................................
E. The Administrative Record Was Compiled to
Comply With Section 113(k) of CERCLA
and Not as Part of An Overall LitigationStrategy............................................... 44
F. The Navy Did Not Act In Bad Faith............. 47
THE COURT SHOULD ISSUE PROTECTIVE ORDERS WITH
RESPECT TO THE DEPOSITIONS OF DR. CULLINANE AND DR. JENKINS... ^-ULUNANE
.................................... 47
CONCLUSION___
....................................... 48
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1 TABLE OF AUTHORITIES
Allied-Signal. Inc, v. Luhan, et al.. Civil No.
C-89-2893 FMS (N.D. Cal. (related case)...................... 38
629 n.36 (D.C. Cir. 1978).......
American Paper Institute. Inc. v. American
Electric Power Service Com. . 461 U.S. 402, 412(1983) . . .
Anderson Bros. Ford v. Valencia. 452 U.S. 205,217 n.15 (1981).................
Armstrong V. Manzo. 380 U.S. 545. 552 (1965)...............
Avovelles Storemen's League, Inc. v. Marshr715 F.2d 897, 906 n.17 (5th Cir. 1983)....................
Bradley v•_Richmond School Board. 416 U.S. 696711 (1974)......................
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Branch L Phillips Petroleum Co. . 638 F.2d 873,
881 (5th Cir. 1981) (quoting Carl Zeiss)...................... .
Buttrev v. united States. 690 F.2d 1170 (5th
Cir. 1982), cgrt, denied. 103 S. ct. 2087 ( 1983 ).......................
Cant V. Pitts. 411 U.S. 138 (1973)
Campbell v. Untied States. 809 F.2d 563, 575-77 i9th Cir. 1987)..............
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Ca» *— v.— v.E.5. Carl Zeiss. Jena.
n1 '̂ 324-325 (0.D.C.1966), aff'd. 384
u s I I I : l s l - 389 39, 40, 41
Catholic Social Services. Inc., v. M
664 F.Supp. 1378, 1382-83 (E.D. Ca. 1983)
SLilZens XV Preserve Overton Park. Tnr
1L— 2?Ipg, 401 U.S. 402, 413, 414 (1971)..
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£g?Syfll gyfltgS Cas Cert, v. Dept, of rnprrrv
617 F:2d 854, 562-863, 866 (D.C. Cir. isio)! 41, 43
£tnn°djtv futures Trading emission v
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FORM OBO-ilJ MAI |J
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1 ,! S-g* Petr? Marketing Group, inr.. 680 F.2d 573, 577 (9th Cir. 1982)..............
ii .............................
:j Sgnnallv v. Georgia. 429 U.S. 245 (1977).....
Consumer Product Safety Comm'n v. arr
; S-Ylv̂ nia, In?-/ 447 U.S. 102, 108 (1980).....
gauntv of Bergen v. Dole. 620 F.Supp.
1009, 1016 (D.C.N.J. 1985), aff'd 800
F.2d 1130 (3rd Cir. 1986)....................
Dedham Water Co. v. Cumberland F^«=
Dairy,— In?., 805 F.2d 1074, 1081 (1st Cir. 1986)....................
Environmental Defense Fund, Inc, v.
Castle, 657 F.2d 275, 284-286 (D.C. Cir. 1981)...................
1 £scondjdo Mutual Water Co. v. Federal
Energy Regulatory Commission. 692 F.2d 1223,; 1234 (9th Cir. 1982)..................... [
729, 105 S. Ct. 1598, 84 L.Ed. 2d. 643 (1985).....
IGihson y- Berryhm, 411 u.s. 564 (1973)..........
Srggn v - Q?TTtmissi9npr> 707 F. 2d 404, 405 (9th Cir. 1983)...................|
A^ mtnum & Chemical Coro, v. u.s..157 F.Supp. 939, 945-946 (Ct. Cl. 1958).......
-Vnch v.— SanK/ 747 F.2d 528, 531 (9th Cir. 1984)....
Marathon Oil V . FPft, 564 F.2d 1253 (9th Cir. 1977)..
flatter of PQrha, 736 F.2d 1317, 1320 (9th Cir. 1984)
ijathew? v. sidridge, 424 u.s. 319, 334 (1976)......
yf l r ^ —Bayndid?, 726 F.2d 1420, 1422-231424 (9th Cir. 1984)............. '
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Rational Wildlife Federation v. u.s. Fnpct
sery^e, 861 F?2d ill^l 1118-1120 (9th JIJ! 1988)...
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MUI IJ
NLRB v. Sears. Roebuck & Co.. 421 U.S. 132, 150
(1975) (quoting Carl Zeiss)............................... 41, 42
Philbrook v. Glodcrett. 421 U.S. 707, 713, 95 s.
Ct. 1893, 1898, 44 L.Ed.2d 525 (1975)..................... 3, 14
Public Power Council v. Johnson. 674 F.2d 791,
793-795 (9th Cir. 1982).......................... 36, 37, 38, 47
Quincv Qil,._Inc... y. Federal Enercrv Administration.
468 F.Supp. 383, 386-387 (D. Mass. 1979)..................... 36
Rosario v. Amalgamated Ladies Garmet Cutters'
Union. Local 10. I.L.G.W.U.. 605 F.2d 1228
(2nd cir. 1979)................................
Saha Thai Steal Pipe Co.. Ltd, v. United States.
661 F.Supp. 1198, 1202 (CIT 1987)..............
Save Our Wetlands. Inc, v. Sands. 711 F.2d 634,
635-642 (5th Cir. 1983).......................
£ga Coast Anti-Pollution League v. Costle. 572 F.2d
872, 877 (1st Cir. 1978), cert, denied. 439 U.S.824 (1978).................................
Star Fist Foods. Inc, v. United States. 600 F.Supp.
212, 216-217 (CIT 1984)......................... .
§_£.ate of Ohio v. United States Department of
Interior. 880 F.2d 43, 145-147 (D.C. Cir. 1989)....
T.ê as Steel Co. v. Donovan. 93 F.R.D. 619, 621
(N.D. Tex. 1982)............................
Turney v. State of Ohio. 273 U.S. 510 (1927).......
United Retail— &__Wholesale Employee's Teamsters
UniQP Local No. 115 Pension Plan v. Yahn &
USPonnej, In?., 787 F.2d 128, 141 (3rd Cir. 1986),
a ^ irped by equally divided court. 107 S. Ct. 2171 (1987).............................
United States v, Hardaae. No. 86-1401-P,
slip op. at 5 (W.D. Ok. Sept. 8, 1988)........... i
United Stags V, Monsanto Company. 858
F.2d 160, 164 (4th Cir. 1988).................
ymted Staes v._Nicolet. Inc. . No. 85-3060 slip
op. at 7, (E.D. Pa. May 12, 1987)..............
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1 ' United States v, Northeastern Pharmaceutical
Jj & Chemical Co.. Inc. f»NEPACCO») . 810 F.2d 726,
2 .. 748 (8th Cir. 1986), cert, denied. 108 S. ct.146 (1987).......................................
j United States V. Ottati & Goss. Inc.. 694
4 '1 F.Supp. 977, 1001 (D.N.H. 1988). aDDeal filed.
Nos. 89-1063 and 89-1065 (1st Cir. 1989)........... 0 A5 ,i '
c United .States v. Reilly Tar & Chemical Coro..
6 546 F.Supp. 1100, 1112 (D. Minn. 1982).............
7 ' United States v. Rohm & Hass. 669 F. Supp. 672,
676, 677 (D.N.J. 1987)..............
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United States y.,Security Industrial Bank.
9 ' 459 U.S. 70, 71, 80 (1982)..............
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10 ■ United States v. Seymour Recycling Coro.. 679
-.1 ii (S'D' Ind' 1987)' appeal pending.11 !| No. 87-8045 (7th Cir.).......... *5 n
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12 II United States v. Ward. 618 F.Supp. 884, 900-901 || (D.C.N.C. 1985)............
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:i United States V . Western Processing Co.. No.
14 i! C83-252 M, slip op. at 5 (W.D. Wash., j Feb. 19, 1986)............
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U?X Corp. V . United States. 664 F.Supp. 519, 1fi ! 524 (CIT 1987)........
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17 hLard v - Village of Honrosyillp 409 U.S. S7
18 ! FED-7AL STATUTFp
19 !| 3 U.S.C. § 301..........
20 5 U.S.C. § 706(2)(A).......... . 6
10 U.S. C. § 2701(C)..... . A A
21 10 U.S.C. § 2701(c) (1)....... . A
10 U.S.C. § 2702.... . J
42 U.S.C. § 9601........ . 15
42 U.S.C. § 9604 (a).... 1
23 42 U.S.C. § 9604(b)...... 2 J
42 U.S.C. § 9613(f)(2).... 4
24 42 U.S.C. § 9613(j)......... 12
42 U.S.C. § 9613(k) (1)..... 13
25 42 U.S.c. § 9613(k)(2)(B)........ 3 1
42 U.S.C. § 9613(k)(2)(C).... 1 ! 3 2
_6 42 U.S.C. § 9615...... J A
CERCLA Section 103(d).. 14
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CERCLA Section 104........................ 2 7 s CL
CERCLA Section 104(a)........ 9 J 9 37 6 9 » * 7
CERCLA Section 104(bj....... J t « t • /
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CERCLA Section 104(C) (4).... , O ,
CERCLA Section 106........... 7 7
CERCLA Section 106(a)........ Z J ,
CERCLA
CERCLA
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Section
107........................
107(a).................
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30, 1 £CERCLA Section 113........................
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CERCLA Section 113(f) (2)..........
CERCLA Section 113(g)(2)..........CERCLA Section 113(h).................CERCLA Section H 3 ( j ) ................. .1, 5, 8, 9, 12, 13, 14, 15, 17,
CERCLA Section 113 (j) (1)..........
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CERCLA Section 113 (j) (2)..........
CERCLA Section 113(k)................. 30, 7 1 7 7CERCLA Section 113(k) (1).... J -*■ 9 J X ,
CERCLA Section 113(k) (2) (B) . . 7 1CERCLA Section 113(k) (2) (C) . . • J i r 7 1CERCLA Section 115............ • J X / 1 ACERCLA Section 120............ Q i n • *
CERCLA Section 120(a) (1).... . ̂* ±U, Q H #i n 12 ,
CERCLA Section 120(cj......... 5 i iU , n ,
CERCLA Section 211............ 1 7 7 cCERCLA Section 211(c) (1).... . 9 J 9 15 ,
SARA, Pub. L. No. 99-499, 100 Stat. 1613 (1986)__
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FEDERAL RULES OF CIVIL PROCEDURE
40 C.F.R. Part 300, Subpart F (1985)
LEGISLATIVE MATERIALS
132 Cong. Rec. S14918 (daily ed. Oct. 3, 1936)
132 Cong. Rec. S14928 (daily ed. Oct. 3, 1986)
132 Cong. Rec. H9602 (daily ed. Oct. 8, 1986).
132 Cong. Rec. H9581 (daily ed. Oct. 8, 1986).
H.R. Rep. No. 962, 99th Cong. 2d Sess.
240-241 (1986)..........................
H.R. Rep. No. 2005.................. [[[
S. Rep. No. 11, 99th Cong., 1st Sess.
57, 58 (1985)...........................
Executive Order 12580, 52 Fed. Reg. 2923*
(Jan. 13, 1987).................
Executive Order 12580, Sec. 2(d), 52 Fed.'Req[
2923 (Jan. 13, 1987)....................
MISCELLANFOHS
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(G. & c. Merriam Co. 1981)..............
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:| X* INTRO DUCT" ON
The following nemorandom replies to three memoranda
filed by different groups of defendants in opposition to the
Memorandum of the United States in Support of Motion for a c t i
on tile Appropriate Standard and Soope of Review of the Kaw's
Remedial Action Plan, for an Order Limiting the Scope of
Discovery, and for a Protective Order ('Opening Brief'). The
principal memorandum in opposition was filed on behalf of All‘ed-
Slgnal. Inc., Chemical i Pigment Company, and other defendants
e Majority Defendants'). This memorandum is referred to as
Majority Defendants- Brief (or 'Mai. Def. Br.'). a second
memorandum was filed on behalf of o. E. Cooper, to which we refer
as Opposition of o. E. Cooper (or '0. E. Cooper Opp.-, The‘ '
third memorandum was filed on behalf of defendants Santa Fe Land
improvement Company, Santa Fe Southern Pacific Foundation, and
e Atchison, Topeka and Santa Fe Railway Company. This
memorandum is referred to as Opposition of Santa F. Defendants
(or 'Opp. of Santa Fe').
As shown below, the arguments of all of the
ih opposition to the United states- Motion are without merit and
misconstrue the Comprehensive Environmental Response
compensation, and Liability Act, 42 U.S.C. § 960l et'sen
l”e" (-SMA-r p ! T r:Und A°en'amen,:r *n!l Reautbori2ation Act of ( SARA ), Pub. L. No. 99-499, 100 Stat. 1613
(19=6,(hereinafter referred to a. -CERCIA' unless referring
speci.ically to the SARA amendments). it is clear both f. ■LS> cxear both from thp
stand h TJage' leglSlatlVe and caselaw, that -heandards of Section 113(3) apply to the review of rescons.
actions taken and remedy selected for the Naval w.„
n . SECTIONS 120 AND 211 DO NOT PREEMPT P R E S I D E O T l H ^ T O O R I W '
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response authority in Section 104 of CERCIA to th „ 9 “9 hl!
the Defense ('DOD'l m 6 ^ePar_t::ient of* ... ! J D0D V* The Mal°rity .afendants start their
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REP-Y OF THE UNITED STATES TO OPPOSITION BRIEFS
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argument with two and one-half pages of citation of comments by
various Congressmen on the slow pace of cleanup at Federal, and
in particular D00, facilities. The point of including these
remarks seems to be that the 'Congress did not trust the
military to do the job right,' from which this court Is urged to
read more into Sections 120 and 2 1 1 than is stated there, and to
isregard the express language of Sections 104 and 113 of
CEHCLA. in reality, Congress required the military, not vPA or
some other entity, to do the job of cleaning up its own sites
under the full authority of CEHCLA as a whole. Defendants-
arguments that Congress limited the authority of the military to
cleanup its sites are untoward.
FO*m OtO-lIJ
*A» IJ
Specifically, the Majority Defendants' argue that
°f " ■ * » “ - « - i t y underf f 7* to the secretary of Defense. They contend that this
conclusion must follow because Congress specifically required th
Secretary of Defense to 'carry out . . . all response a«ions
, “lth,r!SP‘CV ° ” 1“ ‘“ “* haJard°US substances from . . “ Dci l-les). 10. B.S.C. 52701(c). Therefore, they argue
I s 2 q T SS *31cro-»“ “9«d' the Federal response to harardous'
* “ contaBlnacion at military facilities, and thus
bypassed the President.' Mai. Def. Br. at 12
is clear ' ^ t h T ' " ' f0r si"Pla reason that it- m the language of Section 211 that it is not -he
i r ; r : . : r ° fau“ — “ d°°- ,i\
52s, sol r d r i ; : : ; 1* : lan,uage- - r.MW cir. 1984). There is no need to go beyond its language unless i *- ̂ ’ yona itsy xess iw is ambiguous or rendered so bv nfhn. *
conflict with it. ^ ^ t u a i t r : . ^ "
s i , m " : i e o£ “ • ^ ~
in pursuit of -he 1 ' aS* ’ santence- and part.of an act
-he legislative purpose, and to give effect to the
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REPLY OF THE UNT^nI*“D S TO OPPOSITION BRIEFS
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statute as a whole, and not render it partially or entirely void
Master s i Bgrfrn, 736 F.2d 1 3 1 7, 1320 (9th cir. 1 9 8 4 ). Philh^ ^ ~
^ 5 1 s .dqett, 421 U.S. 707, 713, 95 S. Ct. 1893, 1898, 44 L.£d.2d
525 (1975)(a court should strive to interpret one section of a
statute consistently with the language of other sections and the
statute as a whole). ^ also green v. Commissionpr 707 F-2d
404, 405 (9th Cir. 1983). If ambiguity exists, then legislative
history is examined to determine Congressional intent. C o m m o n ^
EuSmrgs Tradi ng ggirmissien v. Co Petro Marketing Groun. Tn„ 680
F.2d 573, 577 (9th Cir. 1982). However, -absent a clearly
expressed legislative intention to the contrary, that language
must ordinarily be regarded as conclusive.- Consumer
Safetv Copm'r. v. GTS gYlvanja, Tnc., 447 U.S. 102, loa (1980).
The plain language of Section 211(c)(1) states that,
'The Secretary shall gam - °Ut (in accordance with the provisions
of this chapter and CESCIA) all response actions with respect to
releases of hazardous substances from . . . [DOD facilities]
10 U.S.C. § 2701(c)(1)(emphasis added). Defendants argue
that this language ('carry out') creates a direct and
congressional delegation of response authority to the Secretary
of Defense under CEKCIA (thus, 'bypass[in,] the President
Ma:. Def. Br. at 15. Obviously, however, 'carry out' does
not mean a sole or exclusive grant of authority, tut instead
deans 'to put into execution (carry out a plan),' or -complete '
ebster's New Collegiate Dictionary 169 (G. i c. M e m a m Co.
1981). This language is straight-forward and unambiguous.
In contrast to Section 2 1 1 , Section 104 of CESCLA
broadly authorizes the President to act in response to the
release of hazardous substances, and in substantial detail
specifies the hinds of response actions the President may take
pec-.ically, under Section 104(a), 42 O.s.c. § 9604(a), the
resident may respond directly by undertaking removal or remedial
Oto II)
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REPLY OF THE CNITSD STATES TO OPPOSITION BRIEFS
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actions, 1 or any other response measure consistent with the
National Contingency Plan ('NOP')2 which the President deems
necessary to protect the public health or welfare or the
environment whenever any hazardous substance is released or there
is a substantial threat of such a release into the environment.
Before talcing remedial action, the site is studied, alternatives
are examined, and a preferred clean-up remedy is selected
Section 104(b) of CERCLA, 42 U.S.C. § 9604(b), provides
that, with respect to such response actions, the President -may
undertake such investigations, monitoring, surveys, testing, and
other information gathering' deemed necessary to identify the
existence and extent of the release or threat thereof, the source
and nature of the hazardous substances or contaminants involved
and 'the extent of danger to the public health or welfare or to’
the environment.' The President is also authorized to 'undertake
such planning, legal, fiscal, economic, engineering,
at a l u S e S M ^ S i ^ S S i J a i K 1^ * * * « »most contaminated s o i l s - ! t ^ ^ ^ f ^ a^ disposal of the
by the site. See 42 U S C s *Z* the tilreat posed
typically involves stepf to Insure'a p e r ^ a n ^ r ^ 1 * * *" 1 a=ri0"'site— groundwater pumping and treating rmanervC cl®an-up of the
of all contaminated soill— to eliminaI k t h ^ t h r ^ r ^ d isPosalsite. Saa 42 U.S.C. § 9601(24)- 40 r r v \ P°Sed ^ the
this case, the Navy conducted partial’™ ' §. 3 0 0 - 6 * (1987). In substances on Parcels 572 and s J P o J K * em°vals of hazardous
which it seeks reimbJrsImen? from in 1982"8 * * * * * *̂ for
much larger portion of government resno^6" ^ 5. However, the
by the Navy in execution of the Final^RemediJf^ b* incurreiis remedial action. Remedial Action Plan, whic]
As explained in the Openino .l .
regulation published by the United st^tfi 13 a
procedure* tor taking r.*ponsfac*“ n*U,: S * " 1**"- and
promulgated under the clean Water Ac? 33 S e ? Qf1?lnally
the removal of oil and hazardous s u b « a n ? „ ? ‘ * 1321(c>- —
ixisting hCP shall he o p J r « “ e. “ " " 1S P™™lg.t.d, the
for
!EPLY of the u n i t e d states to o p p o s i t i o n b ri ef s
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architectural, and other studies or investigations as he nay deem
necessary or appropriate to plan and direct response actions, ro
recover the costs thereof, and to enforce the provisions of
[CERCLA].* Response action is to be taken in conformance with
the NCP.
Section 104 is a broad and detailed grant of Federal
power to the President to act. It is distinct, therefore, from
the limited requirement of Section 2 1 1 (c)(1) that the Secretary
of Defense, or his delegatee, carry out such response actions at
DOD facilities. The effect of the latter provision, then, when
read in conjunction with Section 104 is plainly to require the
Secretary of Defense, or his delegatee, to implement the powers
granted to the President under Section 104 at DOD facilities.
Thus, reading Section 211(c)(1) with Section 104 does not render
Section 211(c)(1) ambiguous, but explains its purpose and
provides a consistent construction of both sections and of the
statute as a whole.
Moreover, there is no mention in Section 211 of an
'exclusive' grant of Federal response authority under rn.ru that
preempts executive authority given to the President under
and elSe“here in CrRC— the text of section
2 1 1 (c)(1) expressly ihs g - g ratftil '• • . the [other) provisions
° • • • CERC:a- • •' Section 104 and Section 113(j) („hich
- 1' :Ud-=-aI revie“ =; response actions) are among these
provisions. The Majority Defendants- argument that Section 211
supercedes or preempts other provisions of CERCIA has no merit
“ " Sh°“! ^ SXPr SS inCOrP°r!,tion of provisions ofm Section 2 1 1 .3
08 D • 11J
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Phe i e g i s ^ t ^ e ^ a t o ^ n e c ^ ^ i ^ s ^ ' *5event, there is no leaisla-wc'^crJ11 not needed. in any
suggests that Congress intended for s L ^ i o n ^ l l ^ o ^ 1 WhiCh ®Ven President of authorities ie^rion.211 to deprive the
the defendants' position is ln th® statute- Thus,
CERC1A or its legislative hisio?i? y'y PPOrted by the of
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B. The President's Authority to Formulate and Take
Defense** ACtl°nS Was Dele9 ated to the Secretary of
*0»M OiO-UJ IJ
As stated in the Opening Brief, the President has
delegated his powers under Sections 104(a) and (b) to the
Secretary of Defense in so far as it affects the Naval Weapons
Station. opening Brief at 4. Though the Majority Defendants
suggest otherwise (Maj. Def. Br. at 1 , io, and 15), there can be
no dispute that the President has the Constitutional authority to
delegate such powers. Delegation is provided for in the
Constitution: "The executive power shall be vested in the
President of the United States of America." U.S. CONST, art. n ,
5 1* cl* 1* And it has been specifically allowed by Congress:*
The President of the United States is
tQ designate and empower the head w£ “ £ department or agency in the executive branch, or any official thereof who is
required to be appointed by and with the
advice and consent of the Senate, to perform
with°ut approvai, ratification, or other
action by the President . . . any function
1 which is vested in the President by law.
inC5n?^S19natw°n and authorization shall be" in wriwing, shall be published in the Federal
b* subject to such termjcondiwions, limitations as the President
d..m advisable, aid shall b. revocaoleatanv
time by the President in whole or in parc. Y
3 U.S.C. § 301.
P-ee.H Furrheraore. congress specifically authorized the
President to delegate his CERCIA powers:
The President is authorized to deleaate »nH
asign any duties or powers imposed^pon
r e ^ ? n^d C° hiD and t0 Promul<?ate anyPntSJf nS necessary carry out the Provisl°ns of this subchapter. 42
42 U.S.C. § 9615. Thus, defendants' suggestion that the
esident did not have the authority to deleaate hi
Powers under Section 10< the “ . .
r-ect. As stated in tne Opening Brief, the President
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delegated these powers as they relate to releases from facili-<es
under the jurisdiction of the Departments of Defense and Ener~/
m Section 2(d) of Executive Order 12580, 52 Fed. Reg. 2923 ( Jan
13, 1987):
. . . the functions vested in the President
by Sections 104(a), (b) and (c)(4), 113(k)
. . are delegated to the Secretaries of
Defense and Energy, with respect to releases
or threatened releases where either the
release is on or the sole source of the
release is from any facility or vessel under
the jurisdiction, custody or control of their departments, respectively.
(A copy of Executive Order 12580 is attached to Opp. of Santa
Fe) .
Moreover, as can be seen above, the President also
! d*leqi>'ed authorities of Section 113 (*) to DOD. These
include the authority to compile the 'administrative record upon
which the President shall base the selection of a response
j action,' and establish procedures for 'the participation of
interested persons, including potentially responsible parties, in
the dev.lopnent of the administrative record on which the
President will base the selection of remedial actions and on
which judicial review of remedial actions w i n be based ' 42
- . h - V 9613<kl(1’ “ d Thus, it can not be denied
-hat -he response authorities and administrative record
authorities of the President under CERCLA have been delegated to
the Secretary of Defense.
Further, the Secretary of Defense delegated the
in a” '”°r hi“ C° DSPUty Sacrecary of Defense who,in turn, delegated the authorities delegated to the Secretary of
Defense under Executive Order 12 580 to rh« n
secretary ot Defense
w n r a n r T t h SeCreCarY °f De£e" ~ (Environment) concurred
Of -he Navy^s l r'q'llr<!d * 1" ’ ratified Department; ^ * selection of a Pinal Remedial Action Plan, as W e i r -
OBDUJ
ma* |j
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r ep ly of the u n i t e d s tates to o p p o s i t i o n briefs
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as selected the Final Remedial Action Plan itself. Declaration
of William H. Parker, III, ̂ 2; Administrative Record, Item GG.4
C. Section 120 of CZRCLA Does Not Operate to Alter the
Scope and Standard of Judicial Review Under Section
All defendants in their opposition briefs have made
preemption arguments to the effect that Section 120(a)(1), which
subjects Federal entities to CERCLA 'in the same manner and to *
the same extent, both procedurally and substantively, as any
nongovernmental entity . . .', preempts all other Federal
authorities under CERCLA. Their reasoning is as follows.
Assuming that the Navy is a liable party under Section 107(a) of
CERCLA (an owner of property at which there is a release or
threatened release of hazardous substances, and having no
defenses), Section 120(a)(1) requires that it be treated as a
nongovernmental entity. And since the decisions of
nongovernmental entities are not entitled to the limited and
deferential standard and scope of review of Section 112(j) the
remedy decision for the Naval Weapons Station is subject to de
review. „aj. Def. Br. at 2 and 16-21; Opposition of Santa
Fe Defendants at 3-7; and o. E. Cooper's Opposition at 2-8.
Among the many problems with this argument is (1 ) that
^ violates the rules of statutory construction discussed above-
and (2) it would lead to the result of depriving Federal
facilities their enforcement authorities, causing them to shirk
their responsibilities under CERCLA.
, The spec- ic clause in question in Section 120(a)(1)
the Saa° °annCr and t0 the saffie both procedurally and
substantively, as any nongovernmental entity, including liability
administrative°act^ons of^be ^ leas otherwise noted, the
its selection of a~f?nal -e“m e d ^ ° f Navy (including
and the actions o? the U a r a e n r I f n°? ^ °n Apri1 5' 1989) concurrence and p ̂ Defense (including its
“ • H>vy-s * S i °f
are ««acterizad c=i lec-.ively as th.
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under section 9607 of this title,' is broad language subject to
varying interpretations. The defendants contend that this
language means that when an agency is a potentially liable party,
the agency must be treated as a private owner of contaminated
property, and is not entitled to the deferential review of
Section 113(j).5 Moreover, since Section 120(a)(1) makes no
reference to Section 113(j), nor to specific government agencies,
the defendants' interpreration would work to deprive any
government agency which may be liable under CERCLA of any
authority it would otherwise have under CERCLA. This clearly was
not what Congress intended.
Examining Congressional intent, we refer the Court to
the final Conference Committee Report in 1986, which reconciled
conflicting versions of House and Senate amendments to CERCLA on
Section 120:
This provision clarifies that all guidelines
rules, regulations and criteria promulgated '
pursuant to CERCLA must be complied with by
all Federally-owned or operated facilities
unless specifically exempted by this Act.
Federally agencies must comply with all
procedural and substantive provisions of the National Contingency Plan.
H.R. Rep. No. 962, w9th Cong. 2d Sess. 240-41 (1986).6
In the floor debate which accompanied the presentation
Of H.R. 2005, Which later became SARA, several senators remarked
on the intent of Section 120(a)(1). Senator Mitchell, a member
of whe Conference Committee, commented as follows:
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Very simply, it is because Section 113 (j refers"ff10" 113 C action taken or ordered by the President Thie » response
entitles the remedy decision in " l i caJe t ^ s L ^ o n " * 1*1 review, and precludes d_£ r.ovo review. 0 )
specifically that S * Conferan« Committee, and
applies, was enacted w r l a u i by“ ° ^ r e « ’ m e ^ o S e r 0"
Committee Repent made no ctner L f e t l n c ^ t o ^ c t ^ ' ^ (1) .
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[S]ection 120 clarifies that sovereign
immunity is broadly waived. By clarifyinq
that Federal facilities are to be treated as
nongovernmental entities, sovereign immunity is waived. ^
132 Cong. Rec. S14918 (daily ed. Oct. 3, 1986).
Senator Chafee, also a member of the Conference
Committee, added the following remarks:
It is specifically intended that Federal
agencies be required to comply with all
procedural and substantive provisions of the national contingency plan [NCP]. This
includes the mandatory development of a
remedial investigation/feasibility study to
assure the adequate consideration of all
relevant factors in choosing and implementinq a remedy m accordance with the NCP. 9
132 Cong. Rec. S14928 (daily ed. Oct. 3, 1986).
These comments evidence that two distinct concerns
were to be addressed by Section 120(a)(1). one was that Federal
agencies (or more properly the Federal Government) were to be
subject to liability under CERCLA to the same extent as other
-esponsible parties. The second concern was that the Federal
agencies comply procedurally and substantively with all
provisions of the NCP and other applicable regulations to assure
Pr°per selection and implementation of a remedy.
The concerns expressed by Senator Chaffee'were echoed
n * - — - - - ~ “
dp r i v a t * s i t B Senforceable * "
P” Xlslons of “ e legislation as
Government^anar^ dUtl“ °f « “ federal
O iO . I I J|J r ep ly of the u n i t e d states to o p p o s i t i o n briefs
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'•'AM |j
132 Cong. Rac. H9602 (daily ed. Oct. 8, 1986). And, in brief
remarks, Representative Synar of Oklahoma, also a member of the
Conference Committee and a member of the House Judiciary
Committee, agreed with Senator Mitchell that Section 120(a)(1)
operated to subject the Federal Government to civil liability
under CERCLA: y
The Superfund Amendments and Reauthorization Act of 1986 preserve the clear statutory
authority to bring civil actions and issue
administrative orders against Federal facilities.
132 Cong. Rec. H9581 (daily ed. Oct. 8, 1986).
The Report of the Conference Committee and its
conferees curing final debate of H.R. 2 0 0 1 represent the oniy
explanation of Congressional intent in the legislative history of
ection 120(a)(1). The Conference Committee was clearly
interested in Federal sanplianct with all criteria, guidance
rules, and regulations, particularly the NCP. It makes no
mention of placing the Federal Covemment 'in the shoes of ;
pnvate party' in all respects, thus restricting or eliminating
ether Federal authorities and responsibilities in CERCLA.^Where
here, the conference report [was) commended to the entire '
^ongress,' its conclusions 'carry greater weight than other of
2 a ,' “ 9 n'36 <D-C- When n.ithllsection '
r ltS le91SlatiVe make any reference to
I s u n d e r CEP.C1A it
that congress did not enact Section 1 2 0 (a)(1 ) to do so
illustrate ‘ reMrl“ by Sena*Cr hiichell and Congressmen Fazio
Chat s l « i P Uay‘ t00k «»*"• «*> mention
lay - T "Clarif1" ' °r 'fiterate. the rule of current
-clari'!:r°r MitCneU — d - understood that Section 120
to civil e u i r r ^ l3“ “ “ “ * Fed*ral GOVe™ e n t was subject suit, meaning that SARA works no substantive chano. .
- e scope of Federal liability. Representative F a z io Z Z “
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r e p l y of the c m i t s o s tates to o p p o s i t i o n briefs
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emphasize chat Section 120 -reiterates the rule of current law
that all cleanup standards and other legal requirements
shall apply to Federal facilities in the same manner as they'
apply to private sites.- Thus, Section 120 was to make no
substantive change in the application of legal requirements to
the Federal Government. This legislative intent flatly
contradicts the defendants- position that Section 120 alters the
status of the Federal Government when it is liable.
Defendants- position also violates another canon of
statutory construction, which is that courts must strive to
interpret sections of a statute consistently with other sections
so as to produce a harmonious whole, and not render the statute
Partially or entirely void, clearly, defendants- argument “ u L
render Section 113(j) entirely void as it applies to remedy
ecisions by the DOD, since, as discussed above, these are
decisions m selecting response actions which have been deleoat.d
by the President. It would also subject EPA remedv T * *CERCUV j J ren»edy decisions forto is D2V2 review if EPA w„ . a u
Of course, EPA is an agency of the United States.’
130(a) m " " T ' ' ' d,Cendan“ ' interpretation of Section
(a)(1) could preclude the United states from exercisino it,
sovereign powers in cases where it is also a liable party In
-1 IS case, for example, the United States it -ch
count " T ” Stari=" and' aCCOrd“ ’ « defendants- “ “ counterclaims, also an alleged liable party If it „
“ ~ - - —
to that party contribution
-nperfund^site t ^ u ^ S e W i p m e n ^ f ’V T " Z° “ 1— t one
[a5®r?-als to a site. Uniter) .̂i3°wat:or'̂ wastes or other• 2d 160, 164 (4th Cir. V ~ nfinsantn Tompany. 858
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U.s.c. § 9613(f)(2).8 Moreover, (under defendants' reasoning) i-
a case where EPA was alleged to be a responsible party, as the
Navy is here, it could not issue an Order under Section 106(a),
42 U.s.c § 9606(a), to protect the public health, welfare, and'
the environment in the event of an imminent and substantial
endangerment. Likewise, EPA could not request the Justice
Department to obtain injunctive relief to abate such a danger or
threat because the President's authority under Section 106(a) has
been delegated to EPA, which as a private party, could not
exercise it. Surely, defendants can not seriously argue for an
interpretation of CERCIA which would lead to such chaotic
results.
“ Presidential Decisions, hot
In an attempt to holster the arguments discussed
above, the defendants' contend that only EPA 'is given the right
under the Act to create a record of which Court review is limited
within the purview of 59613(j>.' o. E. Cooper Opposition at 6
ass_aiss Ma: . Def. Br. at 17-21, Santa Fe Opposition at 6-8. „r
ooper offers no authority for his conclusion. The other
defendants do cite legislative history of Section 113(j) and
certain caselaw. no defendant, however, refers the Court to the
actual language of the statute: no doubt because it refutes
their position.
that the rA* “* diSCUSSed in “ • Brief, the requirement
itS reVle“ °f “ * NaV*'s decision to
reC O ri " " eS £ r° D ^ langU a9* in * • « * »(3 ) (1 ) , which reads:
: • • ^udi<=ial review of any issues
_____ e m m g the adequacy of any response
• O • 13
•AM |j
defendants SoutherTp«- ■■ o ^ - a n j ™ 0"6"' ln princiPal »ith Co., and is negotiating*-he “ " P ^ a"d Getty oil
Defendant's positions 2 . ™ acSSf-S ». 5°nsant Da=r«- If undermine the contribution 7 Court' the.. it wouldextend to these parties" a n d Zlan the United States could se parties, and thus jeopardize the settlements.
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!iC!f? ni.!aKgp ° r ° r aprPd bv gzsaid&ns shall be limited to the administrativerecord.
(Emphasis added.) This language has been underscored to
emphasize that Congress did not limit judicial review of epa
actions, but limited review of Presidential actions.
Similarly, Section 113(j)(2) requires that:
• • • the court shall uphold the President/.
d&CISIgn : n selecting the res™ J " t l A i S
“J1 " 5 the objecting party can demonstrate, on the administrative record, that the
decision was arbitrary and capricious or
otherwise not in accordance with law.
(Ebphasis added.) The language of subsection (j) could not be
C o n g r e s s intended to limit judicial review
PA actions, it could have used the word 'Administrator ' as
did in section 103(d)(recordkeeping), Section 120(e)
K p I T a n T T rr r“ “ “ “here ^ Fed« Sl is on the" ’ , and elsewhere in the statute. It did not. Moreover
ongress explicitly authorized the President to delegate '"
any duties or powers imposed upon or assigned to him. - ’ 4, ’
pilin' S~ T 15' langUage °f Sacri°n 115 “ » nor be moreP m . Tims, any defendant's citation to legislative hi,,
unnecessary and inappropriate m light of such clear and ^
unambiguous language. .,r t t i r- ..
"■ s a t h o i i a - r - 1 ----- -ssas, 664 r. supp. 1 3 7 3 , 1 3 8 2 - 3 3 <e .d . cal. 1,3 3 ,.
Also, a constrjction of Section 113 n ̂ u h i ^
inno it. 'the Administrator.' and read out of ii ^ ™ d
l:::;rn:u: “°uad °"ly dls~ « - Unguage of the statute
. but would contradict Sections 104 and 1 1 5 ~ ia ,
r * r us * ie uouid v ° id “ ■ g r a n te ; : r
p»,iiv.„„v „ ln s e c - l o n s - n« Po rh ia , SUDra,
■ Slsteŝ.SHEU. under the rules of statutory
f o a * o i o * i i j|J
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construction applicable in this Circuit, this Court should apply
the statute as written.^
Moreover, the caselaw to which the Majority Defendants
refer, like the legislative history cited by Santa Fe, is
misleading. Of the five cases cited by the Majority Defendants
as authority that Section 113(j) should not apply to a remedy
selection by an agency other than EPA, three predated Section
H3(j). Maj. Def. Br. at 18. Thus, they could not possibly
speak to the application of 113(j). The remaining cases, United
££?tes v . .Seymour oecyclir.q Cofp., 679 F. Supp. 359, 362 (S.D.
Ind. 1987), appeal Pending, No. 87-8045 (7th Cir.) and U. S. v
Z l £ 0 ± e t f NO. 85-3060, slip. op. at 7 (E.D. Pa., May 12, 1987),
are strong affirmations of application of Section 113 (j). if
they do not endorse the application of Section 113(j) to a remedy
selection by DOD or the Navy, it is only because these cases did’
not involve remedy selections by DOD or the Navy.
Further, defendants' cannot argue that the Department
of Defense has no expertise in the cleanup of hazardous wastes.
Congress explicitly provided in Section 211 of SARA, 10 U.S.C.'§
2702, that as part of the Defense Environmental Restoration
Program, the Secretary of Defense "shall carry out a program of
research, development, and demonstration with respect to
ardous wastes • m consultation and cooperation with the
Administrator (EPA). . ." m Section 211, DOD is explicitly
or_zed to consult and contract for the expertise of other
agencies, which the Nevy did m this case with the Army Corps of
Engineers Waterveys Experiment station. Declaration a t
bolsters*thiirna?g^2nt1tnat1sictioni!l3 M “ “ suppQS6dl>’EPA. The only legislative nisto™ referred £ °nl>'IS Santa Fe's reference to a starT™or,5 k o t by any defendant Glickaan, to vif "the r e w l ?ement by Representative
Santa Feat 6. Santl FI“ !?y Selecred b7 the EPA." 0pp. of
Section 113 (j) to aPPly o n l y ^ o ^ P ^ d e c L i ^ Congress meant for
this argument fail logically it is an N°b °nly doesGlickaan never addressed the‘’ssue'hf ’fJ^?*aPonsible one as Rep.
°£ 113 (j) in his remarks. °f rhe expent « e authority
0*0 m* ** IJ
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RUPE/ OF THE UNITED STATES TO OPPOSITION BRIEFS
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ct. n *
• i i ji u
Rohertson, 1 3 . Additionally, courts have recognized that
government agencies are entitled to rely upon the expertise of
private consultants, and that such reliance does not change the
standard of review (arbitrary and capricious based on the
administrative record) . 5 * 5 Avoyelles Rnn^ e n ' s -
Harsh, 715 F.2d 897, 906 N.17 (5th cir. 1963)(as long as the
agency conducts its own independent and thorough review of the
oonsultants' reports, the agency's reliance on outside reports is
within its discretion and does not change the standard of
review); Sae also Save 9gr WeU and5, TDO, v 7 1 1 F.2d 634
635-642 (5th cir. 1983)(Army corps may rely on outside
consultants in preparation of environmental impact statements)•
Bsr.tey V. rrm-ed R-ares, 690 F. 2d 1170 (5th Cir. 1982), cert.
Hsnisd. 103 s.ct. 20S7 (1983) (Army Corps wetlands determination
reviewed under arbitrary and capricious standard where Corps
relied on information supplied by other individuals and
agencies) . Accordingly, the defendants can not be heard to
complain that Section 113(j) should apply only to EPA
E.
. In “ to °v«rcome the limitation that the
Haraaas court placed on its decision, that it only applied
section 106 claims, o. E. Coper maxes the unusual a r d e n t
act'on’I T ™ 113(11 Sn°Uld n0t aPPly beCSUSe tha Gov®rnment' s
n : ; : : z z z t j z z mder — — - «
inder section I T T t c ^ c “ Z ' l T * “ r“ P°n“to 28 u.s.c 5 2201 r! 0«=laratory judgment pursuant
ind.r e ; “ 13 nOC an actio" ior injunctive relief
- a r T d 1:6'11' deSPlte Mr- COOPer'S -“ nations to the
™ : r r ^ a ^ -
■leader is entitled to relief.- ^Third'tT TComplaint alleo^g Third Amended
,f CERCLA r reqU1S1“ eleMn“ Undar n 107,a,
“ £°r reCOVerY °f raap°"~ — incurred by the United
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States and for declaratory judgment for liability of costs to se
incurred by the United States in response to the release or
threatened release of hazardous substances at the Naval Weapons
Station. Thus, these clams are sufficient to state a c’aim
under Section 107 on their face. Sfift, e ^ , milted
C loying Piaster?' ^ 347 U.s. 186, 189 (i954)
Thus, Mr. Cooper's arguments relevant to United „
gapjaqg, sanra-. Which was a Section 106(a) action, are
irrelevant.
Further, defendant's assertion that plaintiff's 107(a)
action can only be brought for past response costs, the relevance
° "h"C‘\ Stl11 6SCapeS tPe Govern»ent, is flatly contradicted by
ecw.wn 1.3(g)(2). That provision provides that a 107 cost
recovery action may be brought -at any time after such costs have
incurred* end m a t m e Csurt -shell enter e declaratory
ludment on liability dor response costs- m a t will be bij»„
any action to recover farmer response costs. 42 D.s c 5 ? °n
9S“ <9) ‘2>- The Uni'ed declaratory judgment <,
such an action for farmer . future, r e s p o n d e n t s
rgumen., .Uce so many other of defendants' arguments, is clear-/
unsupported by the law. and has caused the Government to m u '
unnecessary time and expense m response.
’7 ’ 986 ^*Cw‘°n “ 3(:) or became effective on October
I ' ‘ * ln9 penclen^ civil action. m its
Opening^nef, the United States explained that Brad^, „
Soho?1. 4i6 u.s. 696 711 (19741cou— , 1974) , requires thecou.. to apply the law -n e'-ec- .■-.1 e.-ec. at the time of its decision
“ • > c r i o n - « « - .
— on or i . ; : : : : - r : : ; " \ r : r icc ° r -
“ 13 • “» « « * Sbeoes ^ m i n J d Z n ' Z S ? „ ^ e T Vamendment to a stat”*-s> - i e ' -■̂e
scenderd. applies- " V ^ =° “ d ==dlfle= *»pp-ice_.cn o. m e new statue, is required and nc
>•»* 060 .1,
“ *■ 11 REPLY OF THE UNI~~— ^ * A . 'U OPPOSITION BRIEFS
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Bratilgy analysis is necessary. Opening Brief at 1 4 . See
Anderson Sr??- “or? v- vaiepc;a, 452 u. s. 2 0 5 , 217 n . 1 5 (1981) _
Nevertheless, we also explained that the Bradlev test has been
met.
The Majority Defendants make a three-pronged attack
against the application of Section 112(j). First, defendants
deny that Bradl ey provides the appropriate test of whether
Section 113(j) applies. As shown below, defendants' argument
fails because of its misplaced reliance upon United v
Sgs.-riT” Industrial u.s. 7 0 , ? x t so (1 9 8 2 ), which
involved an attempt to retroactively apply a law that would have
destroyed a vested property right. Second, the Majority
Defendants contend that even if todjgv applies, it requires t*ai
Section 113(j) not be applied. Plaintiff will demonstrate that
there is no manifest injustice in the application of Section
1 1 3 • ThXrd' Ma^or::y Defendants argue that prior to SARA
CZRC^ required * review of agency response actions ^ e
" States demonstrate that prior to the enactment of
ection 113(j), the law was that judicial review of informal
agency action was on the administrative record under the
: r : : r! ^ CaPri=1°US Srandard' congress understood that
.he law, and intended by the enactment of Section - 3 (j)
in d c l a r i ; y - -h o ,.
- es..nse actions under CZRCLA.
A’ fh?d‘-?.f3rreC"''' S‘ates --‘le Law Applicable bo
The .Ljonry Cefendan-.s- argue tbab because .-.a,™
involved a lesbian a: -aFPellabe -unsprudence. - ib d H ^
— “ • • • “ • — a r " e
Plaintiff notes preiimmar* 1 v rh,e „K = -3^ PV _ ~~/ that whe argument that
^ r : i : i - ^ Y : i ; r es — —91w- “ a law becomes effective while a
cabbec is before bbe appellabe caurb. ib should also Y e Y c b i v ,
poaw oao-ii)
' -A* | j
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REPLY OF ■"vt .‘ * D OPPOSITION BRIEFS
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at the district level. The Majority Defendants have offered no
reason why the district court is any less obligated to apply tr.e
current law than is the circuit court. If the law were
otherwise, then litigants would have to appeal all decisions m
these situations to the circuit courts before current law could
be applied. Thus, in addition to being illogical, such a rule
would lead to a hugh waste of judicial resources. Moreover, the
cases applying £T3dl?Y in this Circuit have recognized no such
distinction. gamBtilil v- flniffl 809 F.2d 5 6 3 , 5 7 5 -
(9th Cir. 1987) (reversing the district court's refusal to
apply the rate of post-judgment interest prescribed by a statute
the case was pendingj; 726 F.2d 1420, 1422-24 (9th cir. 1984)(basis for reversal was that -he
district court should have applied the law in effect at the‘time
of its decision).
In ^g<r'1** * 3anK/ each of seven appellees
ad ioaneda debtor money, then obtained and perfected a U . n on
an.ndIdS-PerSCna‘ pr°perry' hereafter the Bankruptcy Code
nded to permit bankrupt debtors to avoid liens on such
property. Id. at 71. The Bankruptcy Court refused to apply the
amendment retroactively. The Court of Appeals reasoned that the
new av violated the Fifth Amendment because it effected a takin-
die secured c-ed -a-t' . oajci..̂
bv '.ens nn “ property interests represented^ on personal orcoGr^,r c»»held thAr ? A 7116 Supreoe Court affirmed andaexa rriat a statu^-p ^
he given retroactive ap^ ■ " f on .■PT° P m * “H I not
from cases -here the new ^ SitMtlPn
*- - - •* - r ges
-y x n d a a a ^ ^ -
672 *7* --- .r^.» v. anti ffum, 669 f . suPP.
S , 677 (D.N.T ' QD7 \ /C PP •a -987) ‘Section 113(3) merely modi'iesprocedure and fort of legal remedy).
T£S*ff.!,qUlr" 1»(3) Be Applied to
oto REPLY OF UNITED S~
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- S.rt^ES TO OPPOSITION BRIEFS
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2 As stated in plaintiff's Opening Brief, the iegislat-ve
istory to section 113(5) directs that Section 113(5) be appl-e-
retroactively. Opening Sr. at 15-16. See also Cnir,- c-.— ..
^ r-,-.. sunxi (-There is no statutory or
legislative direction indicating that Section 113(5) should not
be applied to pending cases. Indeed, the legislative history -a
to the contrary.-), Pnitsj States v. wtnnl.r — sun-
Nothing m the anendcents or the legislative history [of SARA!
indicates that the anendnents were not intended to be aPPu L
retroactively.-,., m i l ed S t „ s5 v. a , t SUDra, ar
L s e ^ 655 aCr'JaUy lntended U 3 (j) to apply to ongoing
is -as d Th' MilCrl'y SeCendantS' sole ar?unent to the contrary
on a portion of a 1985 Senate Report which suggests that
- na:or deficiencies are found to exist in the a d n i r J t - a t L
i : r r ; — - - - « E
o . “ 3 nd : ; n™ i i i r d upon' h— - -c „ - te5 Say any ^ i n g to suggest
:l Sec-10n 113 <5 > ™»1«* not he applied to pending cases wl
provide the full stateoent that Defendants- edited and und
i their quotation: d ' and b e r i m e
decisions"c-ncei^-n state how
ludicially -evewed9 acsibns will be
that review'o-‘-e=?sio« hav* suM ested
response, i s “ "J.'T"5 Che
“ “ « — of the atainistrative Record **This amendment ciar'^'es anH ___* ■ rec°rd.
i“ at
th* action snail be Und'ali* ^ thatgovernment response cosri 1
unless the action was artit~a^
w S ' l a w ^ °r r,0t « accordance
a « i r e Cth a ? t n e ^ s i s ^ o r ^ h e r * COrd h e lp S decisions is clear“v resPonse
scrutiny bv cte -u^,- anrfUlated and °Pen to
par—- es i ‘V- “ **w and r e s p o n s ib le
-eeponse e ^ o n . - ' l o ^ ^ ^ . record
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r ep ly cf the i t ;— ?--------
' OPPOSITION BRIEFS
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also expedites the process of review, avoids
the need for time-consuming and burdensome
discovery, and assures that the reviewing
court's attention is focused on the
information and criteria used in selecting the response. * *^
11. de*< fancies are shown no <-
m g — ive record that
aasgfflPlgd, :ud — al rgvigv of the respond
jf ^ ‘,Vvemen~ = 7 r‘coverv 3CTnn MV
.3Den t0 rhe ,nrrnH'ir̂ " n ~f SYItignce by ajj parties.Existing
administrative law principles will govern
whether supplementary materials explaining or
?ifrr yKn9 the record maY be introduced a?Vi. * bowever. under most circumstances, judicial review should be limited to the
administrative record itself.
L !eP; 11- COn?” 1St S“ S - 57 • 58 ( « « > • The quoteclear statement of the intent of Congress that the
provisions of Section 113(j> affirm and clarify the existing law
~n! t0 :,UdlClal reviev o t response actions, that they be
adI^eW\ ^ ° nly °n ^ arbltrary and ^pricious standard on the administrative record.
to - t e n ° “ er “ Cep'-10n enunc Lated by BraflUy, pertaining
: in’r ice-' — n a t i o n ot
5 “ ’ iC' " S u*r* it pages 17 and 18 of the
‘OV „r * CPeninq Br;e;'10 - snowed that Federalcourts which have faced this issue under CERC1A hav.
held that application of Secfon - 8 m do uniformly
manifest injustice. result
Tf“ £™ P - r L ; ; L S«;:--f^T3,_3) Did Not Change the"— *-»— flqcn.v Resnonge AnT* on*;
Section 113(3) did not alter -hethe "eview n f existing standard for
al- 1 „ ^ respon5‘ »«-»"- taken pursuant to C E K Ualthough prior to SARA 'n,.. . H * CERCLA,. -ER,— « did not specify the proper
oio iij
'-AM |j
10 • *)6se dire* * ) •**10 n« ,
the nature of their rimh-s Ind*a?"? "dentcty of the parties, 2
.he change m law upon those Pgnls “ °f t!le 131Pac- °f
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REPLY OF ■"W f%TT— ~w‘ ~*“D S *~--S 70 OPPOSITION BRIEFS
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issue an order precluding discovery on the adequacy of the
response action selected for the Naval Weapons Station, which
would include protective orders preventing the depositions of
Doctors Cullinane and Jenkins.
Respectfully submitted,
RICHARD B . STEWART
Assistant Attorney General
Land and Natural Resources Division
WILLIAM W. WESTERFIELO, All --KAREN S. DWORKIN '
Environmental Enforcement Section
Land and Natural Resources Division
United States Department of Justice P.O. Box 7611
Ben Franklin Station
Washington, D.C. 20044
(202) 633-2810
RICHARD L. BEAL
Environmental Enforcement Section
Land and Natural Resources Division
United States Department of Justice
100 Van Ness Avenue, 22nd Floor
San ^-^ncisco, California 94102 (415) 556-9027
Of Counsel:
Attorneys for Plaintiff
United States of America
J. MARTIN ROBERTSON
Department of Navy
Office of the General Counsel
litigation Office
100 Van Ness Avenue, 22nd Floor
an Francisco, California 94102
0«M oto.II)
» » « IJ
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REPLY of the u n i t e d states to o p p o s i t i o n briefs
2 0 0 • 3stid sz<;; * ie 202 PPiSI 26. 0£ a«w
• *
IN T3E UNITED STATUS DISTRICT COURT FOR THE DISTRICT OP SOUTH CAROLINA
Sraenville Division
UNITED STATES OF .AMERICA,
Pli lint iff,
v.
A.D. CANNON, JR.,
ADC LIMITED PARTNjSRSHIP CANNON MANAGEMENT,
and
MARY LEE WATSON,
D e f e n d a n t .
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>
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)
CIVIL ACTION NO. 6:91-95l-3K
UNITED 5TATES' REPLY TO DEFENDANTS* ORA1. MOTION TO PTBMTap
This action was filad by the united States on April 11,
1991, on behalf of Rena Ellis, pursuant to statutory procedures #
created by the Pajjr Housing Amendments Act of 1988. Defendants
have argued that t&ese procedures are improperly invoiced in this
case and that the government's suit is time barred. These
arguments are without m«xit.
Th« cm tad state*' suit challenge* defendants' racially
discriminatory treatment of Sene Ellie which occurred when she
attempted to rent an apartment from them on March 12, igss. Ten
doys after the incident, Ellis filed an administrative complaint
with the 0.8. Department of Housing and Drban Development (HUD).
This filing was well within the ISO days prescribed for filing '
such complaints under the statutory procedures then in effect.
P Q 0 '3 B 0 d 82S;i V 15 202 9*=SI 26. 02 dbW
either the complaining or responding party may elect to have the
matter tried in federal court. 42 U.S.C. $ 3612(a) and (o).1/
The new statutory procedures were applied to the Ellis
complaint and defendants elected federal court adjudication.
Defendants argue, however, that: the government's suit is untimely
(1) because Ms. Ellis' independent right to file her own suit had
expired by the tine the government filed its action on her
behalf, or (2) because HUD failed to issue the charge within the
100 day period set forth under the new statutory provisions (see
42 U.s.C. § 3610(g). As we demonstrate below, neither of these
arguments is meritorious.
A. THE NEW PROCEDURES OF THE FAIR HOUSING AMENDMENTS ACT ARE PRo n e r t.y T w m ITT-THIS CASE ACT
This is . case growing out of the federal government's
enforcement authority. Whether or not the statute of limitations
applicable to e private suit oy Ms. Ellis has inspired is thus of
no consequence. 3!here is no dispute that Ms. Ellis'
administrative complaint was originally timely filed. The core
issue, therefore, i. not whether the Emended Fair Housing Act
would grant a retroactive extension of a statute of limitations
for private suits, but rather whether it is appropriate for HDD
i5 ! ,“ a S ™ 5 £ d « : S e “ t t B r , i s ^ anaggrieved person* mav enforc« “ nt scheme,
the ALJ p r o £ ^ g (L S ? H ! suit « in812(c)). Thev ? j6l2(°M2), amd 42 U.S.C. $S 3613). Cy al8° retaln 1111 independent right to sue (« U.S.C.
3
300•39dd B3£l V I £ 202 8P : £ 1 25. 02 ydW
v
*
under the Act, HUD stated explicitly that the new remedies and
enforcement procedures to apply retroactively. As the agency
charged with administering the Fair Housing Act, HOD'S
interpretation of the statute is entitled to considerable
deference. gLsftr;«lt. Realtors V. Village of ■B.nwn^, 441 c.s.
91, 107 (1979); jEafficant* v. macgaalAtan IdTH TP™**™-
409 tJ.S. 205, 210 (1972). The Preamble to the regulations
states, in pertinant part:
The 198tt Amendments (except as to discriminator/ housing practices involving handicap and familial status) do not create new legal duties or
responsibilities. Rather, they merely provide a new process by which aggrieved persons may enforce
^:gh1:a Pr°t*eted under Title viu. I.a., the 1988 Amendments create new procedures for the filing investigation and conciliation of complaints 'concerning discriminatory housing practices and strengthen the remedies available to victims of
discrimination by providing for administrative
L by increasin5 the availability of civil attorney's fees, etc. Because the new remedies and enforcement procedurea do not affect vested rights, retroactive application is entirely
f4*' A*-**' Bradley/ ffly2£&, (increased availability of attorney's fees); Friel v.
CB. , 7S1 F.aa 1037 (9th Ci? 1985) (icteSeion of limitations period); Montana Power Co. v. *■**•>*.• i
Bgysr CjyL, 445 F.2d 739 (D.C. Cir. T970) (ihinSS in tribunal); and GruTtrmjtt v. Stirrqnnn Hav Wt-ni-ay-
£ g f c S £ ' 754 F.adl id (f t ^ J ? in
54 *ed.,ltog. at 3259 (1589), 24 c.F.lt. Ch.I, Subch. a, App. I, p.
577.
in the absence of express language to the contrary, the
current law oust apply uni... it would be manifestly unjust to do
eo. In determining whether retroactive application of a new law
0 ie -maaifeetly unjust,' a court must consider (a) the nature and
5
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f v
1
specific relief cm her behalf.!/ in General lEelsfllgna ̂ pp?r
446 U.S. 318 (1980)# the Supreme Court interpreted an analogous
enforcement schema and recognized the government's interest in
vindicating the public right of freedom from discrimination.
Commenting on the government's unique role in iiecuring public
rights, the Court noted that:
ia not merely a prosy far victims of discrimination. . . . Although the fgovemmentl can secure specific relief, such as . . .damages fir
d8niod' on of discriminationvictims, the (government] is guided by the overriding public imterest in equal employment opportunity 9 asserted through direct Federal enforcement. y * ‘ *
general Telgpfrgng, 446 ir.s. at 326.
Because housing discrimination litigation is in fact
initiated to enforce a public right as mandated by Congress, it
is qualitatively different from "mere private cases between
individuals.' £*1 lent taarig*, 734 F. Supp. a:t 479. Thus, the
first Bradley factor is mat.
The second Brgdlfy consideration examines the nature of
the rights at issue and datermines whether the new legislation
affects any rights that have 'matured or become, unconditional.'
firasiley, 416 U.S. at 720. Because Ms. Ellis did not file her own
lawsuit within 180 days of the discriminatory incident (the
statute of limitations in effect: under the 1968 Act), the
defendants claim tHat the government cannot maintain this
enforcement action on her behalf. In other words, defendants
!/ Rena Ellis is not a party to the .
only by intervening. Seirnt 2, suor^.tl? ** iand *“ * becoa* one
- 7
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*
*
of the Amended Ax± does not create a -matured" or -unconditional"
to avoid enforcement by the government.
The thijrd Btildlfly consideration requires an examination
of the impact, if any, that thi* change in law may have upon
existing rights. Btsfllsc, 416 D.S. 720. It -stems from the
possibility that new and unanticipated obligations may be imposed
upon a party without notice or an opportunity to be heard."
If the law would have caused the defendant to change his conduct
had he known of bis obligations, a court is more likely to find
♦ manifest injustice in subjecting him to enforcement of the new
law. Ifl. The Amended Act, as applied to the defendants, did not
affect the proscription against racial discrimination that
existed at the time of the illegal activity/ rather it only
expanded the enforcement and remedial provisions of the 1968 Act.
Defendants cannot seriously suggest that they would not have
discriminated against Ms. Ellis; had they known that new
administrative procedures would be available to persons who filed
complaints with ffJD because the defendants were liable for such
discriminatory acis at the time that they were committed.
To deny relief to the government in -this action would
be -manifestly unjust,- given the important public policy at
issue. The court should reject defendants' claim that the
government's suit is untimely.
- 9 -
I 1 0 ‘3Sbd as:si n s 2 0 2 2£ 5SI 26( 06 yyw
comply with it* ova regulations, ncm^compllaace is not grotmdi
for dismissal because the regulations relate to rod's
investigatory function, nest to Him'a right to maintain an
enforcement action).3/
COHCLUSXOHl
The considerations set forth In Bradley and Rent
America and tha other cited authority alii support applying the
remedial and enforcement provisions of tha Pair Bousing
Amendments Act to the ci.renjnstaa.oe8 of this case. Retroactive
application is consistent with existing lav and legislative
intent and will assist the Bnitaid states- in the achievement of
important policy ijoals. Application of the Amended Act will not
result in any injustice to the defendants. In addition, HDD's
failure to follov administrative procedures is not jurisdictional
and has no bearing an the court's ability to adjudicate this
case.
t
.L/ The requiranant that the united states file its suit 30 days after an elastici to proceed in federal court {42 U.S.C. S 3612(o)) is arguably in the nature of a statute of limitations. But, as is true vith respect to the timeliness of Hs. Sills's complaint to HUD, there is no dispute that the filing of the United States' complaint in thle Court was timely.
- 11
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2 1 0 ’39bd 82SI P I£ 202
l
5£:£I 25 < 05 ddW
For the fcregoing reason*, defendants' oral notion to
dismiss should be d<nied.
Margaret B. Seymour Assistant U. S. Attorney P-O. Bon 2266 Columbia, &.C. 29202 (803) 765-5483 I.D. Ho. 1562
Cheryl L. Ziegler AttorneysBoosing end cî ril Enforcement Sectioncivil Bights Division n.S. Department of Justice P.O. Bom 65998 Washington, D.C. 20035-5998 (202) 514-4752
Dated: February 12, 1992
n *
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200'3D0d 82<il *I£ 202 PtMSI 26. 0E atiw
%
> v
IN T3E UNITED STATES DISTRICT COURT FOR THE DISTRICT OP SOUTH CAROLINA
Sraanville Division
UNITED STATES OF .AMERICA,
Plilintiff,
v.
A.D. CANNON, JR. #
ADC LIMITED PARTNERSHIP CANNON MANAGEMENT,
and
MARY LEE WATSON,
De:fandairts.
)
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.)
CIVIL ACTION NO. 6:91-95l-3X
ns* i -it.
UXnCTED STATES' REPLY TO EgFgNDA»Tg' ORAJj MOTION TP pTBUT.p
This action was flirt by the united States on April u,
1991, on brtu.il Of Rena Ellis, pursuant to statutory prooedures ’
created by the Fair Bousing Amendments Act of 1988. Defendants
have argusd that thee, proorturas are improperly invoked in this
case and that the government's suit is tin. barrrt. These
arguments are vitl.out merit.
The united states' suit challenges defendants' racially
discriminatory treatment of Rena Ellis which occurred when she
attempted to rent an apartment from them on Kerch 12, 1M8. Tsn
daye after the incident. Bin. filed an adminietrativ, complaint
wath the U.s. Department of Housing end Urban Development (HUD)
This filing wa. well within the 180 days prescribed for filing '
such complaints under the statutory procedures then in effect
£00'3Sttd esisi n s 2 0 2 snsi 2s. 00 aow
#
Fair Housing Act, title Tin of tha 1968 Civil Rights Act,
sactien 818(b). Dndar tha 1968 Act, HOD could investigate and
.‘"■.rapt to jaecl.t »1>j iiuuijjil tittuuus oi conference,
conciliation, and persuasion.' 1968 Act, $ 810(a). If the
informal conciliation attempts were unsuccessful, HOD had no
authority under tbs 19S8 Act to pursue further enforcement
action. Individuals seeking judicial enforcement of rights
guaranteed by the Fair Housing Act were require* to -------
their own civil action in federal court within 180 days of the
alleged discrimination, i960 Act, S 810(d). a,. Bills did not
file such s suit, but has relied on the federal government's
enforcement procedures to vindicate her rights.
HS. Ulus'. complaint va. still pending st BOD when the
Fair Housing Amsmlments Act was enacted on September 13, 1988 and
«hen it took effect si* month, later on March u , W 89.1/ DndBr
the 1988 Amendment*, HOD retain, it. investigatory and
conciliation raaponsihility but now ha. additional enforcement
authority to be «arci.«d where conciliation fails. ^ 42
O.S.C. s ,610. HID now make, a fin,! determination of whether
reaaonahle =aua. arista to bailee. discrimination ha. occurred
and, if it decidas affimativeiy, issues a char,, of
. i .
______ - COaPlalnlng ” party .ay ,lect ^ ^
’ that'HOD would aalij^'be'abf.0? the *ncePticn of tha 196S Act ....
* i mi* s s s r & s :
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P00 • 33t>d 82£il PIS 202 9P=£I 2 6 i 02 dbU
either the complaining or responding party may sleet to have the
matter tried in federal court. 42 U.S.C. S 3612(a) and (o).2J
The new statutory procedures were applied to the Ellis
complaint and defendants elected federal court adjudication.
Defendants argue, however, that the government's suit is untimely
CD because Ms. Ellis' independent right to file her own suit had
expired by the tine the government filed its action on her
behalf, or (2) because HUD failed to issue the charge within the
100 day period sec forth under the new statutory provisions (see
42 U.s.C. s 3610(g). As we demonstrate below, neither of these
arguments is meritorious.
ABE AJ™ KENTS ACT
This la a case growing out of the federal government's
enforcement authority. Whethar or not tha statute of imitations
applicable to a private sui.. „y Ms. Ellis has expired is thus of
no consequence. Uhere is no dispute that Ms. Ellis'
administrative complaint was originally timely fii.d. Ihe core
issue, therefore, 1. not whether tha Amended Fair Housing Act
would grant a retroactive extension of e statute of limitations
*“ PrlVBta wats' but “ « « it i. appropriate for Hm,
Administrative Law'jilgef* Snder the “attBr,is h»ard by an ff9l*̂ eved may inter.ant in enforcemant scheme,the alj proceeding (42 U?|fc I 8uit or in812(c)). They alSo retain ̂ ?J f 11 {SH f)V ■“* 42 O.fl.e. §S 3613). * r aln ** impendent right to sue (42 u s c
- 3 -
500 * 3Sbd 8251 P IS 202 LP’Gl 26. 06 a«W
to apply it* new enforcement scheme to a timely administrative
complaint pending when the new procedure* tnoJr effect, tfo
believe that it i*.
The United States asks this Court to apply the time-
honored principle that 'a court is to apply the lav in effect at
the time it renders its decision, unless doing so would result in
manifest injustice or there is a statutory direction or
legislative history to the contrary.' Bradlav v. vtchncma
Board/ 416 u.s. 636, 7il (1974). The only court to directly
address the question of whether the Amended Act's new procedures
may be applied to pre-Amandment conduct has concluded that such
application is proper. Snit=4 States v. B m t tasric. Com. 734
F. supp. 474 (S.D. Fla. 1990). in Bent AaBTir-a, tha defendants
contended, as do the defendants here, that tha enhanced penalty
provisions of the Amended Act could not apply to discriminatory
practices which occurred prior to the enactment of the
Amendments. The court rejected the defendants- olein, .„d held
that application of the reaediel provisions was not -manifestly
unjust' under the firstly standard and did not vioi.ta the Due
Process or Ex Post Facto provisions of the United States
constitution. to-trlst, 734 F. Supp. at 480.
As Bant America end Bradley sake Clear, a statute is
aseuaed to apply caee. pending at the tine Of enactnent unless
'tclgsr indication' fron Congress that the statute is
nut to apply. BouUsy, 418 0.S. ,t 712-l6. There i. BO such
indication here, indeed. In i.auin, it. implementing relation.
- 4 -
m
900'390d 828 1 PIS 202 8P : SI 28. 0C 8dU
* \
¥
• -
under the Act, HIM stated explicitly that the new remadies and
enforcement procedures .#*» to apply retroactively. As the agency
charged with admliietering the Fair Housing Act, HOD's
interpretation of the statute is entitled to considerable
deference. ffiLaattWW, SsaltQrB v. Village of 441 o.s.
91, 107 (1979); grafflcante v. ------ T,.fn Tt)t~............■
409 U.S. 205, 210 (1972.1. The Preamble to the regulations
states, in pert ini mt part:
P * Aman<iaants (except as to discriminatory housing practices involving handicap and familial
create new legal duties or respona.Jsilit.Les. Rather, they merely provide a
aggrieved parsons may enforce existing rights protected under Title v x u t a a.
1988 Amendments create new procedures for the fiiino * investigation and conciliation of complaints 9/
discriminatory housing practices and strengthen the remedies available to victims of
heariJJm[di^CJ:'Kinttion by Providing £or administrative ' “ J. by increasing the availability of civil *' attorney's fees, etc. Because the new
ve**S'^ *?f enforcement procedurea do not affect
p“ t t9 ,sr : \ :tiVS application is .ntirtlyavailSnifJi BcafllfiX/ fi2KEa, (increasedavailability of attorney's fees); Brief v.
gBflrtq E llfr , 254 F.2d~5fe4 P t h C j i l S I s w S S Hprocedure). ' xr* i»65)(change in
54 Fed. tReg. at 3259 (1589); 24 C F R rh r e.v wv n ** c.F.R. ch.l, fiubch. a , App. I, p.
5 7 7 . - r
In the absence of express language to the contrary, the
=urr«t lav must .pply uni... lt vouid be mantf.etly unjust to
»o. in determining whether retroactive application of . new l,„
i. -»«ife.tly unlust,. . court must consider (a, the nature and
5
8S£il Pis 3Q2 6 P : Sl 25> 0E titiU2.00 * 3SUd
%
%
identity of the pirtiea, (b) the nature of thsir rights, and (c)
the nature of the impact of the change in law upon those rights "
l> .» . l i t /.Ld; HAil-i- A n a ^ c a . 734 i . 'fiupp. 4 / * .
The first consideration, "nature and identity of the
Parti**,M focuaea primarily on whether the action la a private
case between individuals, or a case involving * great national
concerns-* Bradliy, 416 U.s. a.t 718-19 (quoting united Staten v.
-gaggy./ 5 U-S. 103 (ibci)). When a statute manifests an
important national policy, the court must respect that policy and
apply it. As the Court stated in Schoonar Peggy;
[I]n mere private oases between individuals, a court will and ought to struggle hard against a construction which will, by retrospective^ operation, affect the rights of parties- but in 9̂ ca*: national concerns, where individual
rights . . . lire sacrificed for national purposes,
t3le cou:rt must decide according to existing
Schooner p«my, 5 U.S. at 10.
Tms su:.t is not brought by a private party, but by the
Onited States, to implement a statute to which Congress has
accorded the highest national priority. Traffic,*. »
Mstropgi Ittin Lite Tnn -fta.. aos n.s. aos, m-12 (1972).
a principal purpose of the Amenlments was to strengthen the
government's enforcement powers which were genorelly considered
i^d-piat. und« the 19«s Set. H.R. Sep. So. 711, 100th
2d Seas. (1988), it 16-17.
9WWnment'. rol..in this case ie not merely to ra”
■erve e. free coursel tar an individual claiming to have been
victimited by discrimination, even though the government see*,
- 6 -
800 * 39t)d 8221 frIS 202 Sr:SI 2B. QC dbM
specific relief on her behalf .5/ in Genera?
446 U.S. 318 (1980), thu 8uprams Court interpreted an analogous
enforcement schema and recognised the government's interest in
vindicating the public aright of freedom from discrimination.
Commenting on the government's unique role in securing public
rights, the Court noted that:
is not merely a proary for victims of discrimination. . . * Although the [government] can secure npecific relief, such as . . . d a S S f J r
backpay or benefits denied, on behalf of discrimination victims, the (goywmmant] is guided by the overriding public interest in equal employment opportunity 9 asaartec. through direst Federal enfornament. ^ ‘ ’
Telgph<?ng, 446 ir.s. at 326.
Because housing discrimination litigation is in fact
initiated to enforce a public right as mandated by Congress, it
is qualitatively different from "mere private cases between
individuals." SIS Rent America 734 » si™ ^/34 f . supp. at 479. Thus, tha
first Bradley factor is mat.
Ih. secend ftadlty consideration Marines the nature or
th* right* at issue and determines whether the new legislation
affects any rights that have 'matured or become unconditional.'
Sadies, <16 B.s. at 720. Because Me. Ellis did not file her own
lawsuit within 180 days of tha discriminatory incident (tha
statute of limitations in effect under the 1968 Act), the
defendant, claim that the government cannot maintain thi.
enforcement action on her behalf. In othar word., defandant.
only by IntarVMin'j? 1“ S £ r^ltlgatl°B «nd can become one
- 7
bt JU i ^Od e s b i r i b 2 0 2 0 b :Sl 2 b . 0£ dou
claim that their right to avoid penalty for their di.orimim.tory
conduct ha. now -matured or bacon, unconditional.. Again,
d-iferdwta' j.;iitlo.-j j m u .i u fc-.o vary separate ..pact, of taa
Fair Bousing Act. A. d i n m a u ahova, the Fair Bousing Act
provide, right, for a private complainant to litigate private
claims as well a. providing the government with authority to
«erci« it. enforcement power.- Although baa,ad upon the .am.
of operative facts, th«. right, are mutually exclusive.!/
iu the :Lnstant oaee, dsfentumts- di.criminatory conduct
was unlawful before the effective date of the 1988 Act. ln f4ct
discrimination on the basis of . v w '™ oasis or race has bean proscribed
throughout the twenty-four year hietory of the fair Bousing Act
-bd dafandant. have no -right- to .void new penaltia. or
administrative procedures for conduct which wae unlawful ,t the
ti». it occurred. ^ I!SM^ a£clsa, 734 F. 8upp. ^ 480
Moreover, the mere fact that is. alia- right to maintain a
privat. cause of .ction had expired prior to th. A c t i v e data
s 2 5 . 1 (1 9 9 0 ) .
M ^Private attorneys geiiara 3 b? 5U?5t by Priv*ta parties
S o u l f u l 1* 1" to t h e ^ c ? i ^ US S m a a r t h T i 9 M A«
« » tad «pired S S a T ttf
retroactively appli^ ^ * * £ * * £ - - ' £ $ i ^
8 -
010 *33Ud 8251 PIS 202 l S : £ I 28. 0£ yew
*
*
of «ha traded Art doe,, not eraata « -matured* or -unconditional*
right to avoid enforeeiiant by the governmant.
The third Brndlax consideration requires an examination
of the impact, if any, that the change in la* nay have upon
existing right.. Briery, «is o.s. 720. it ^.to, Iroa tt.
possibility that new and unwrticipated obligations nay be imposed
opon a party without notice or an opportunity to be heard..
If the law would have caused the defendant to change hi. conduct
had he known of hi. obligations, a court is acre likely to find
manifest injustice in subjecting hia to enforcemant of the new
law. Ifl. The Amended Act, a. applied to the defendants, did not
affect the proscription against racial discrimination that
existed at the time of the illegal activity, rather it only
expanded the enforcement and remedial provisions of the less Act.
Defendants cannot seriously suggest that they would not have
discriminated against Ms. Ellis, had they known that new
administrative procedures would be1C bailable to persons who filed
complaints with FID bee,us. the defendants were liable for such
Ciscriminatory acres at th. tin. that they were committal.
To deny relief to the government in thin ection would
be 'manifestly unjust,* given the importsnt public policy at
iasus. The court should reject defendants- claim that the
government's suit is untimely.
- 9
Q. m£ uoVî tKhLS.I a £JiPOhCB»f!T IS VOS iUTLLKZLYBECAUSE OT HI ID'S T2JJJJBZ TO COMPLETE ITS INVESTIGATION IB 100 PATS_______________________ _____________ __
There is no Languatfe in thu Act vhich creates a statute
of limitations to bar fixture qxTvemmirrtal enforcement: if HOD
fails to collets Its investigation vithin a certain period, pea
42 U.S.C. 8 3610(a). Rhile libs original Act indicated that such
processing should ba camplerfcad in thirtydayH, and the Attended
Act denotes a 100 day time psriod far such processing, neither
time 3 Imitation is jurisdictional, as the statute indicates, if
it is impracticable fer BUD to coaplata-its processing of the
complaint in the suggested time, hud is not barred from
proceeding. 42 U.S.C. 8 3610(a)(1)(B)(iv). flee United statea v.
Hafcki. Fair Housing-Fcir Lending (P-B) para. 15,676 at 16,473
(E.D.Pa. 1990) (holdinei that the 100 day investigation requirement
is not jurisdictional because there is no axated consequence for
failure to comply with its teras) - Sfte also united States v.
Cttrlee. at al. . Ho. StL-5743 WJH (Ktt) (C.DiCal. Jan. 29, 1992)
(copy attached)(order denying defendants' motion to dismiss
alleging that BUD non--compliance villi 100 day investigation is
jurisdictional).
mis issue las aliio arisen in HUD AT.7 proceedings, and
the A U decisiana hold that nan-compliance with the provision
that ccmplalots are to ba perooeseed vitftin 100 days is not a
ground for dismissal. a*s, ^ aaMrsfcar*- of BUD v. Baumgardner.
Pair Housing-Fair Landing fP-H) pars. 25,006 at 25,097 (Hcvember
15, 1990) (Andretta, 1..L.J.) (holding that although BOD did not
- 10 -
(
110 * 39bd ez:si p i s 2 0 2 2 S !SI 2 6 i 0E bdW
comply with it* ova regulations, non̂ ccngplianco Is not grounds
for dismissal bees ass this regulations rslsta to HUD's
investigatory function, not to BUD's right to mst-ntain «n
enforcement action) .2/
COHCLUBXOHl
The caniiiderationa set forth in Bradley and Rent
America and the other cited authority all support applying the
i ■remedial and enforeaaent provisions of the Pair Bousing
Amendments Act to the circumstaroea of this case. Retroactive
application is consistent vith aixisting lev and legialative
intent and vill ausiart the United Statwin the achievement of
important policy ijoals. Application of the Amerced Act trill not
result in any injustice to the defendants. In addition, BHD's
failure to follov administrative procedures is not jurisdictional
and has no bearing on the. court's ability to adjudicate this
case.
SJ Th# requiramznt thztt the United States file: its suit 30 days after an elastic? to piroeead in federal court (42 D.S.C. S 36i2(o)) is arguably in the nature of a statute of limitations. But, as is true *ith respect t» the timeliness of Ms. Ellis's complaint to HUD, theru is no dispute that the filing of the United States' complaint in this Court vas timely.
- 11 -
210'39bd
l
82SI PIS 202 £ £ : £ I 2 S « 0E dtiU
Tor the fcregoing reai
dismiss should be dialed.
Margaret B. Seymour Assistant U- S. Attorney P-0. Boat 2266 Columbia, S.C. 29202 (803) 765—5483 I.D. Ho. 1S62
ions, defendants' oral notion to
chsryl L. Ziegler AttorneysBousing end civil Enforcement Sectioncivil Rights Division U.S* Department of Justice P.0. Box 65998 Washington, D.C. 20035-5998 (202) 514-4752
Dated: Tebruary 12, 1992
12 -
PP»SI 26, 06 atiw200'3S0d 82£51 V I £ 202
r -•1
",
* *
IN T.KE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OP SOUTH CAROLINA Sroenville Division
UNITED STATES OF .AMERICA.,
Pliilntiff,
v.
A.D. CANNON, JR.,
ADC LIMITED PARTN3SRSHIP, CANNON MANAGEMENT,
and
MARY LEE WATSON,
Demandants.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)J
CIVIL ACTION NO. 6:91—951—3R
UNITED STATES' REPLY TO DEFENDANTS* ORAL NOTION TD PTSMTSB
®iis action was filed by th« United states on April 11(
1991, on behalf oif Ren. Ellis, pursuant to stM-utory procedures ’
oreatea by the Pair Housing Amendments Act of 1988. Defendants
Have argued that these procedures are improperly invoked in this
cass and that the government's suit is time barrsd. These
arguments are without n«xit.
The Onited states' suit challenge, defendants' racially
diacriminatory treatment of Sena Ellis which occurred when she
attempted to rent an apartment from them on March 12, 1988. Tra
days after the Incident, Ellis filed an administrative complaint
with the tl.S. Dapartment^of’Housing and Drhan Cev.lopment (HDD)
Thie filing was wall within the 180 deys prescribed for filing '
such complaints under the statutory procedures then in effect.
ebb -astsd 82 :;i n s 2 0 2 s n s t 26 . 06 aew
Fair Bousing Act, Title Tin of the 1968 civil Eights Act,
Section 810(h)• aider the 19*1) Act, HDD could investigate end
, ** ~i “ hj info.*** sechulw of conference,
conciliation, and pereuaelon.* 1968 Act, $ 810(a). If the
Informal conciliation attempts were unsuccessful, HDD had no
authority under the 1968 Act to pursue further enforcement
action. Individuals seeking Judicial enforcement of rights
guarantee by the Pair Housing Act were retired to -------
their own civil action in federal court within 180 day. of the
alleged discrimination, i960 Act, S 810(d). as. Bin. did not
file such a suit, but ha. relied on the federal government's
enforcement procedures to vindicate her rights.
Hs. Ellis's complaint was still pending at HDD whan the
Pair Housing A»en<!m=nts Act was enacted on September 13, 1988 and
when it took affect sir month- leter on lurch u , U I , V ^
the 1988 Athndmenhs, HDD retain, it. investigatory tad
conciliation responeihility but now baa additional enforcement
authority to be ««rci.ad where conoili.tlon fails, i2
n.S.C. S 3610. BCD now make. . final determination cf whether
reasonable caue. ,xl.t. t0 b.lll!va discrimination ha. occurred
if it decidss affirmatively, issues . charge of
discrimination against the responder. When . charge is i.eu.d,
— ~ the complaining or responding party may .lect to ,.v. ^
t t a t ^ ^ ^ ^ l ^ ^ ^ ^ t t ^ i n c e p t i c n of the 1968 Act
SluilIVS?tl9at?ry ]3Briod «uggeated°by c withinconpl»iw=» received «rnua?LS 8l0(a) *•*»»»■• of ths Piggrjm^nation T.flg, 228-:>9 (1982). U y * *** Sc;aw«»a/ Housing
- 2 -
P Q B ‘ 39t)d 02£i I n s 202 9t-:SI 26. 0C dbU
either the complaining or responding party may elect to have the
matter tried in federal court. 42 U.S.C. $ 3612(a) and (o).2J
The new statutory procedures were applied to the Ellis
complaint and defendants electeid federal court adjudication.
Defendants argue, however, that the government's suit is untimely
(1) because Ms. Ellis' independent right to file her own suit had
expired by the tine the government filed its action on her
behalf, or (2) because HDD failed to issue the charge within the
100 day period sec forth under the new statutory provisions (aee
42 tr.s.C. s 3610(g). As we demonstrate below, neither of these
arguments is meritorious.
m aaSSSMEKTS ACT
Thie la a case growing out of tb. fscleral government's
enforcement authority. Whether or not the atetute of limitations
applicable to a private suit by Ms. Ellis has expired is thus of
no consequence. C!here is no dispute that Ms. Ellis'
administrative complaint was originally timely fil«d. The core
issue, therefore, is not whether the Amended Fair Housing Act
would grant a retr oactive extension of a statute of limitation,
far privat. suits, but rather whether it is appropriate for HDD
^ m i S a S a S ™ £vec££;«“ i« heard by an
aggrieved persons may intervene in en*orcement scheme,
the ALJ proceeding (42 D S C « ^ ^ i ? ? 7 ernttent's or in
8 1 2 ( 0 ) . ^ ^ also retain an f J 2 S 5 ) lV ' s™* *2 SS 3613). aln ** ^ ‘dependent right to sue (42 U S c
3
S00'39bd 82'JI P I £ 203 i . P • S I 26 < 06 yww
»
9
to apply it* n*w enforcement scheme to a timely administrative
complaint pending when the new procedures took wffecf
believe that it is.
The United States asks this Court to apply the time-
honored principle that *a court is to apply the law in effect at
the time it renders it* decision, unless doing so would result in
manifest injustice or there is a statutory direction or
legislative history to the contrary.' Bradley v.
Ssaxi, 416 tJ.S. 6 J6, 711 (1974). The only court to directly
address the question of whether the tended hot*, new procedures
may be applied to pre-haendaent conduct has concluded that such
application is proper. Belted States v. Bent rnT „ 4
T. supp. «74 (s.B. ,1a. 1990). m Bent the defendant,
contended, as do toe defendants here, that the enhanced penalty
provisions of the amended Act could not apply to dlecrininstory
practices which occurred prior to the enactment of the
Amendments. The court rejected the defendants* claim, end held
that application of the remedial provision, was not -manifestly
unjuet' under the firjdlsx .tandard and did not violate the Due
Proo... or Z* Post Peoto provision, of the Dnitod State.
Constitution. BailtJUssciSB, 734 T. Supp. at 480.
A* B M t tesnr-a and aadley make dear, a statute 1,
assumed to apply to oaee. pendln, at the time of enactment unless
«. .'clear indication* from Congress that the statute la
“ * to apply. BolUsy, 416 D .s . . t 712-1 ,6 . There is „ e TOeh
indication here. indeed, in issuing it. implanting regulation.
- 4 - i
I
900'39bd 80S l PIS 202 8 P : S I 2 5 . 08 ddU
t
4
under the Act, EU1 stated explicitly that the hew remedies and
enforcement procedures ;6E# to apply retroactively. As the agency
charged with admiiiistering the Fair Housing Act, HDD's
interpretation of the statute is entitled to considerable
deference. Slafoipnt. Ban 1 twin y vuiaoe of 441 0-S_
91. 107 (1979); X raftlgantB V. Hetrooelltan LIP. T.^.1 r . <.r
409 O.S. 205, 210 (1972). The Preamble to the regulations
states, in pextinunt p?urt:
AmerMimantc (except aa to discriminatory housing practices involving handicap and familial status) do not create new legal duties or
respona:Lbilit:Les. Rather, they merely provide a
Whic? “^grieved persons may enforce existing rights protected under Title vxxi r * *~u
invf £?nn*?eri1:s ^ M te new procedures for the filing * investigation and conciliation of complaints 9f
s S e S S S S ^ Kcrimi2Jtory housing practices and 2? available to victims ofhousing discr..mination by providing 3*or
" s , by * » « • • & » th«; !t1:o5ney/® faea9 etc. Because the new enforcement procedures do not affect
availah-I n-t-v t' 4 ^1 * Btafllsy, fi3S22Z&/ (increasedavailability of attorney's fees); Frielv
^ S ^ e 4| r ^ l tt3v.
S i f 1 :s4 sg,r(s g » in
54 Fed.,Peg. at 3299 ,15,9), 24 c.,.s. ^
577, *
1» the absence of nxpr.es Innguag. tc th. contrary, the
currsnt law must sppiy unless lt Boala be ^ to ^
90. 1= determining whether retroactive eppli=.tion of , M B ^
is "manifestly unjust," a court must considsr (a) the nature end
5
82£. I PI£ 202 6^ ■ S l 25 i 05 you*<L00 - 3Dbd
%
%
idantity of the parties, (b) the nature of their right*, and (c)
the nature of the inpact of the change in law upon those rights *
**>&~**2Lr ht Vx3; kent: Aatiica. ',34 F. Sup*. 4?9.
The first consideration, 'nature and identity of tbe
P*2̂ 1**'* f°cussa primarily on whether the action is a private
case between individuals, or a case involving 'great national
concerns.' Brad*!*, 415 U.s. at 718-19 (quoting unit.* _______
£p*}0<yner JPfljgy, 5 U.s. 103 (18C1)). When a statute manifests an
important national policy, the court suet respect that policy and
apply it. As tha Court stated in Schoon.r-
™ I L a*:f?,priTat® °*a•* between individuals, a f ? ? ? L1L ? I1<3 °®?ht to struggle hard against¥i}1' ^ retrospective operation, affect the rights of parties, but
national concerns, where individual rights . . . lire sacrificed for national purposes,
i m . C ”USt decida according to existing
Schooner- P^ggy, 5 U.S. at 10.
Thi. suit is not brought by a private party, but by tbe
Dnited states, to implement a statute to which Congress baa
accorded the highest national priority. Traff-le.ee. „
MfitrupgUtan T,1f Tnn .1'su, ton o.s. sos, 211-12 (i972,. indeed,
a principal purpone of th. Xmandments wa. to strengthen th.
government's anforoement power. which were generally considered
i^equat. und« th. l9Se lot. H.R. „ep. No. 711f 100th
2d saas. (1988), at I6-17.
. ..Tha government's rol. in this case i. „ot ^
oerv. .. fre. ooura.1 fcr an dividual claiming to hav. haan
victimised by discrimination, .van though the gov.rnm.nt see*,
• ■
- 6 -
800 * 390d 8221 frlS 202 ST :SI 26 < BE d«W
i.
1
specific relief cm her behalf .3/ in General M ^ hone v- renn
446 U.S. 318 (1980), the 8upram* Court interpreted an analogous
enforcement schema and recognized the government's interest in
vindicating the ptiblic right of freedom from discrimination.
Commenting on the government's unique role in necuring public
rights, the Court noted that:
la nDt *erely a proxy for victims of discrimination. . . . Although the [government] can secura specific relief, such as . . .damagesfor
backpay or benefits denied, on behalf of discrimination
P ® Igovernmant] is guided by the overriding public interest in equal employment opportunity 9 asaertec. through direst Federal enforcement. Y ' ‘ '
general Telepfrgngj 446 u.s. at 326.
Because housing discrimination litigation is in fact
initiated to enforce a public right as mandated by Congress, it
is qualitatively different from "mere private cases between
individuals." Rgnt ftaarjga, 734 ?. Supp. at 479. Thus, the
first Bradley factor is mat.
Tb. second gradlfj; consideration emaminee the nature or
the right* at laaue and determine, whether the new legialetion
affects any rights that have 'matured or become unconditional.'
Bcadlex, 4IS O.s. at 720. Because Ms. Elli. did not file her own
lawsuit within 180 days of th. diaoriminatory incident (the
statute of limitations in effect under the 1968 Act), the
defendant, claim that the goverru,ent cannot maintain thi.
enforcement action on her behalf. In othar word., <Uf.nd.nt.
only^ 2 “ S £ r̂ ltlgati°n *“ «*» become one
- 7
600 ' 3SOd SBs.l PiB 202 0»:£l 26. 00 aou
%
♦
daia that ttelc right to avoid penalty for thair di.criain.tory
conduct has now laaturwl or become unconditional.* Again,
’’ ‘‘l w *u-‘“ *t ~K> «ry separate aapacts of tha
Fair Housing Act. Aa discus.ad. abovs, the Fair Housing Act
provide, right, for a private complainant to litigate privat.
claims as veil a. providing the government with authority to
cxerci.. it. enforcement powers. Although baa,ad upon the .am.
eet of operative fact., th... right, are mutually erolu.ive.4/
in tha :instant case, defendants- discriminatory conduct
was unlawful before the effective date of the X9.S Act. In fact
discrimination on th. ba.i. of race ha. bean proscribe
throughout th. twenty-four year hi.tory of the Fair Housing Act
ai'd defendants have no J'riaht* to .-r_i jrignt to avoid new penalties or
administrativ. procedures for conduct which was unlawful at th.
tl». it occurred, l i s n x ^ ^ , 734 y. 8app> ,t 4a[J_
Moreover, th. mere fact thet Me. Ellis- right to .
privat. causa of action had expired prior to th. affective det.
That2??. - S 2 5 .1 (1 9 9 0 ) .
S 5 j r « * s s
U ^private attorneys qmnA??i by Priv»ta parties
P r i v . S J ^ ^ ^ ^ I ^ e t . n d j n t e - a r ^ Sj £ .
ravive *a °private*a ̂ ^
HDD tegulSti^i*^^™ f “ Had expired undeTttf lMs^o?“f kto
- 8 -
1'
5
.i
m \
*
!
010 *3Dbd 82 5 I V I £ 202 IS'SI 28■ 0£ dOU
of the tended lot do... not otut, . -nature or -uncondltionel*
right to avoid enforcement by the government.
The third teadlajr eonsideration reguiras an emaminetion
of the impact, if any, that th. ohang. in lav nay have upon
.stinting right*. Bnflltt, 415 D.s. 720. lt IroB ^
possibility thst nnv and unanticipated obligations n.y be imposed
upon a party without notice or an opportunity to be heard.* rd.
If the lav would have caused tlse defendant to ohang. hi. conduct
had h. known of his obligations, . court is acre likely to flnfl
nanifMt injustice in subjecting bin to enforcament of th. new
1«W. IS. Th. Amended let, a. applied to th. defendants, did not
affect the proscription against racial discrimination that
escisted at th. tin. of the illegal activity; rather it only
expanded the enforcement and r.m-di.1 provisions of th. i9S8 Act.
Defendant, cannot seriously suggest that they would not have
discriminated against Ms. Ell 1,; h,ld they known that new
administrative procedure, would be available to persons who filed
complaints with TIE, bec.u.. th. defendants were liable for ^
discriminatory acts at the tim. that they were committed.
To deny relief to the government in this ection would
be *manifestly unjust,* given th* important public policy at
issue. court ehould reject defendants- claim that the
government'a mult la untimely.
- 9 -
*
B. IKE t&\giaaLL,CZ‘- 2 î iEOkClrUBfT AUiWft 1* J*OT LiTLUlELYBECAUSE 0? HI ID'S T2JJHBZ TO CQHFLEI8 ITS Z2T7ESTJGATZONCT 1QQ PATS__________________- ______ -
There is no language ia th«t Act which creates a statute
of limitations to bar future govomauntal enforcement; If HOD
fails to complete its investigation irithin a certain period, gao
42 tJ.s.c. S 3610(a). While the original Act indicated that such
processing should be completed in thirty: keys, and tdie Amended
Act danotas a loo day tine period far such proaassing, neither
tine limitation is jurisdictional. as the statute indicates, if
it is impracticable fer HDD to complete -its processing of the
complaint in the suggested tine, HUS is not barred from
proceeding. 42 TJ.S.C. S 3610(a)(1)(B)(iv) . flae United Staten vr
flflfcfclr Pair Housing-r«ir Landing (P-H) para. 15,676 at 16,473
i
(E.D.Pa. 1990) (holdinei that the loo day investigation requirement
ia not jurisdictional because there is no stated consequence for
failure to comply with its terms). SA& also nwl-fc-ri StatLMA v
SSd&A* t al,, HO. 91-5743 W3B (KSC) (C.DitSal. Jan. 29, 1992)
(copy attached) (order denying defendants-' motion to diamias
alleging that HUD non-compliance vitJhi 100 day investigation is
jurisdictional).
mis issue aas also arisen in HUD ALT proceedings, and
the A U dad slona hold that nan—compliance with the provision
that complaints are to be processed within 100 days is not a
ground for dismissal. SAA. Searatarv of HUD v.. Baunaerdnar.
Pair Housing-Pair Larding fP-H) pars. 25,006 at 25,097 (Hcrvember
15, 1990) (Andratta, ) (holding that although HUD did not
- 10 -
t
110 • 39bd sz:si p i s 202 2£ :£I 2Bi 0E dbW
comply with its ova regulations, non-compliance is Bet grooadt
for dismissal because the regulations relate to EUD's
investigatory function, net to BHD's right to maintain an
enforcement action).2/
COHCLUBIOHl
She coni liberations set forth In Bradley and Bent
America and the other cited authority all support applying the
remedial and enforcement provisions of ths Pair Bousing
Amendments Act to tha circumstances of this case. Retroactive
application is consistent with existing law and legialativa
intent and will assist the United states- in the achievement of
important policy ijoals. Appliczition of the Aaerded Act will not
rnsult in any injustice to the defendants. In addition, HTXD's
failure to follow admin:Latrativu procedures is not jurisdictional
and hae no bearing an the court's ability to adjudicate this
casa.
t
Tha requirement that the United sta.ted *iilg"̂ its suit 30 dal's 1 after an eleotioi to pirooasd in federal court (42 U.S.C. S 3612(o)) is arguably in ths natnzre of a. .statute of limitations. But, as ia true *itb rtispect to ths timeliness of Ms. Ellis'a complaint to HUD, tharu ia no dispute that the filing of the United States' complaint in -this Court was timely.
1X -
210 '
.k» X'ZJf
HEiyd 82£t P I £ 202
I
G£ : S I 26. 02 dtiUJ
Tor the foregoing reasons, defendants' oral notion to
dismiss should he denied.
Margaret B. Seymour Assistant U. S. Attorney P.O. Bon 2256 coluabia, s . c . 29202 (803) 765-5483 I.D. Ho. 1562
Cheryl L. Ziegler AttorneysHousing and cî ril Enforcement Sectioncivil Mights Division U.5. Department of Justice P.O. Box 65998 Washington, D.C. 20035-5998 (202) 514-4752
Dated: Tehruary 12, 1992
12
2 0 0 ■350d 82'; I FI£ 202 pp 'SJ 26. 06 yew
. *-•
• 4
m
IN TIE UNITED STATES DISTRICT COURT TOR THE DISTRICT OP SOUTH CAROLINA
Greenville Division
UNITED STATES OF .AMERICA,
PI; lint iff 7
V.
A.D. CANNON, JR.,
ADC LIMITED PARTNERSHIP CANNON MANAGEMENT,
and
MARY LEE WATSON,
Demandants.
)
)
)
)
)
)
)
) CIVIL ACTION NO. 6:91-951-3X
)
)
)
)
)
)
)
UNITED STATES' REPLY TO DEFENDANTS' « y . MOTION To PTBVTap
T"is ac1;ion was by the Dhitad States on April n,
1931, on behalf of Rene Ellis, pursuant to statutory procedures
created by the Pair Housing Amendments Act of 1988. Defendants
have arguad that these procedures are improperly invoked in this
case and that tha government's suit is time barred. These
arguaents are witi.out narit.
T1>* °nlt*d Stitam'suit Challenges defendants' racially
diecriainatory treatment, of Rena Bilie which occurred when she
attempted to rent an apartment from them on march 12, i98b. Ten
days after the incident, Ellis filed an admini.trative complaint
with the tt.s. Department of Housing and Urban Development (HDD) . ~
thi. filing was wall within the 180 days prescribed for filing '
euch complaints under the statutory procedures then in effect.
£00'3Sttd 62:51 fis 202 Sf:S! 26. 0£ ddW
Fair Bousing Act, Title Din os the 1968 civil Aet#
s«rtion 810(b). Dnder the 1968 Act, HDD conic investlgat. ana
*H-t»pt ti It, t.\ O AJUUIC. j>s .Lsieiaau, «icuudt ol conference,
conciliation, and parauaalon.* 1968 Act, S 810(a). If the
informal conciliation attempts vara unaueeossful, HDD had no
authority under to. 1968 Act to pur.ua further anforcamant
action. Individuals seeking judicial enforcement of right.
9UaralVtM:J * Homing *ct war. retired t o -------
their own civil action in federal court within 180 days of the
alleged discrimination. 1968 Act, $ 810(d). Hs. m i s did not
file such a suit, but he. relied on the faderal government's
enforcement procedures to vindicate her rights.
MS. Ellis'S complaint was still pausing at HDD whan the
Fair Housing Amendments Act was enacted on September 13, i988 and
«ben it took effect sir month, l.tar on March 11, 19,9.1/ Dnder
the 1988 Amendments, H.h retain. it. investigatory and
conciliation responsibility but now hs. additional anforcamant
authority to be axarci.ea where conciliation fail.. ^ 42
S 3610. HtD now make. . final determination of whether
reasonable causa arist. to hsliav. discrimination has occurred
if lt decia“ Affirmatively, issue. . charg. of
• « = , . i .
------- " * * • p a r ty
-thatIiin£“ (,a?dnsWll'^T’̂ ’fhff0? tte inception of the isss Act
- 2 -
P 0 0 ‘3Sbd 82'il PIS 202 9P'-St 26 < 02 dbU
either the explaining or responding party may elect to have the
matter tried in federal court. 42 U.S.C. S 3612(a) and (o) M
The new statutory procedures were applied to the Ellis
complaint and defendants elected federal court adjudication.
Defendants argue, however, that the government's suit is untimely
(1) because Ms. Ellis' independent right to file her own suit had
expired by the tine the government filed its action on her
behalf, or (2) because HUD failed to issue the charge within the
100 day period set forth under the new statutory provisions (see
42 D.s«c. s 3610(g). As we demonstrate below, neither of these
arguments is meritorious.
S amendments act
This is * csss growing out of the federal government's
enforcement authority. Whethar or not the statute of limitations
applicable to £ private suit by Ms. Ellis has expired is thus of
no consequence. 3!hers is no dispute that Ms. Ellis'
administrate, co.pl.int was originally timely fil.d. Ihe core
issue, therefore, i. not whether the Emended Fair Housing Act
would grant a retroactive extension of a statute of limitations
ior Private suits, but rather whether it is appropriat. for HDD
Administrative Law'ff^dgef* Sndar the “ tter is h»ard by an aggrieved persona cay intervene in the^ cn*orcwaent scheme, the m j proceeding (42 3 s7 , » government's suit orir/-'
813(c)). They also retain an (?>' 42 O.S.e. *S 3613). 1 retain an independent right to sue (43 D s c
- 3 -
S00*3E)dd S2£J I V t £ 203 IP-SI 2B < 0E aww
to apply it* nmw enforcement scheme to a timely administrative
complaint pending vixen the nev procedure* tooV effaet. We
believe that it i§.
The United States asks this Court to apply the time-
honored principle that *a court is to apply the lav in effect at
the time it renders its decision, unless doing so vould result in
manifest injustice or there is a statutory direction or
legislative history to tbs contrary.' Bradley v. Btchmnn*
BMrd' 416 °*s‘ sss' 711 (1974). Tha only court to directly
address the guastion e fwhether the Amended Act's new procedures
nay ha applied to pre-Am.ndm.nt conduct has concluded that such
application is proper. Onlted stat.. „ ............... 734
F. supp. 474 (S.D. Fla. 1990). m Batf tosTic.8, the defendants
contended, as do -a* defendants here, that the enhanced penalty
provisions of the Amended Act could not apply to discriminatory
practices which occurred prior to the enactment of the
Amendnents. The court rejected the defendants' claim, ,„d held
tost application of the remedial provision, was not -manifestly
unjust- under the Bradley standard and did not violate the Du.
Process or Bx Post Facto provisions of tha Onited States
Constitution. Baiii teeirlst, « 4 F. Supp. St 490.
A» Bant teacica and icadlay make clear, , statute Is
assumed to apply to oaee. pending at tha time of enactment unless
' *t’i5£r,.indication- from Congress that the statute is
I ? 0 * * » “ ' 418 - 7— • i. no mch
- 4 -
300'39«d 62=1 rl£ 202 8P : £ I 25. 02 ddU
under the Act, HUD stated explicitly that the new remedies and
enforcement procedures jya to apply retroactively. As the agency
charged with admliistering the Fair Housing Act, HDD's
interpretation of the o*tatute is entitled to considerable
deference. gladg-png, Rsnlt-Offl V Village of 441 c#fi#
91# 107 (1979)? ntfi v. Metropolitan I.1P« t ^ r r . ^
409 TJ.S. 205, 210 (1972). The Preamble to the regulations
states, in pertimint p&rrfc:
The 198» Amen<3mants (except as to discriminatory housing practices involving handicap and familial status) do not create new legal duties or
responsibilities. Rather, they merely provide a
avT*??^*8? vl whic^ aggrieved persons may enforce
under Titl<5 ^11- I.e., the1988 Amendments create new procedures for the filinc investigation and conciliation of complaints 9'
^criminatory housing practices and strengthen the remedies available to victims of
diSCJ::f^ination by providing for administrative « i* by increaaing the availability of civil *' *tto™ * y * ts**' etc. Because the new remedien and «inforeement procedures do not affect
apDronrf*tfitS| rotr06.ô :ive application is entirely §^' **-2--' aradlev. aai2ia, (increased
751 H iS 1037 oth'cg-; i»8S) (SSSmion
m s r.2? 73^ 0 . c^??i » 7 o ) T ^ r ; n
|ESga_aa6, :S4 f . 2 d in
54 Fed. |Reg. at 3259 (1989) j 2 4 C P R rv r e, . . ,V " s!4 C.F.R. Ch.I, Stlbch. A, App. I, p.
577.
In the absence of express language to the contrary, the
current lew must ,pply uni... it would he manifestly unjust to do
»o. in determining whether retroactive epplicetion of . new law
i. 'sanife.tly unjust,, a court must oonsidar (a) the natur. and
5
S2£. I PIS 202 6r • SI 25 i 0£ ybk<L00 * i9bd
l
t
identity of the parties, (b) the nature of their right*, and (c)
the natura of the impact of the change in lav upon those rights.*
jaiediSXf *16 U.S. at 7lB; sent /34 T. ‘Supp. 479.
The first consideration, 'nature and identity of the
parties,* focuses primarily on whether the action is a private
case between individuals, or a case involving 'great national
concerns.* Bradiax, 416 U.S. a.t 718-19 (quoting united states v.
-§-‘?h09n?r Peggy, 5 U.s. 103 (isci)). When a statute manifests an
important national policy, the court must respect that policy and
apply it. As the Court stated in Schooner
[I]n mere private oases between individuals a court will and ought to struggle hard against
a construction which will, by retrospective operation, affect the rights of parties, but in grea*: national concerns, where individual rights . . . axe sacrificed for national purposes.
CDU:rt ®ast decide according to existing
Schooner Pgagy,. 5 U.S. at 10.
This su:.t is not brought by a private party, but by the
United States, to implement a statute to which Congress has
accorded the highnst national priority. Traff-1 Y|
Metrppglitan Life Insi ftPi, 409 u.s. 205, 211-12 (1972). indeed,
a principal purpone of the Amendments was to strengthen the
government's enforcement powers which were generally considered
inadequate a t e 1b. 196. Act. H.R. Rep. Ho. 711, 100th
2d Sees. (1988), at 16-17.
Tha govexiunent'a. rola in this case i. not aerely to
serve .. fra. coureel tar« individual claiairg to hav. baan
victimised by distinction, even though the government ae^c,
- 6 -
800 *3B0d 82SI frlS 202 S ? : £ t 2 B . BE d«U
T i-
1
specific relief cm her behalf .2/ jn General 'ppiephcm,, ^
446 U.S. 318 (1980), the 8uprama Court interpreted an analogous
enforcement scheme and recognized the government's interest in
vindicating the public right of freedom from discrimination.
Commenting on the government's unique role in iiecuring public
rights, the Court noted that:
tJoyerrai.T.t] is not merely . projry for victims of
discrimination. • . • Although the [government! can secure specific relief, such as . . S s fJr
backpay or benefits denied, on behalf of discrimination
[government] is guided by the overriding public jmtarestt in equal employment opportunity ’ assertec. through direct Federal enforcement. ^ ‘ ’
gencrai Telgp^gng, 446 u.s. at 326.
Because housing discr:lmination litigation is in fact
initiated to enforce a public right as mandated by Congress, it
is qualitatively different from -mere private cases between
individual*.* 5*1 Bsnt towisa. 734 P. Supp. at 479. Thus, the
first Bradley factor is met.
The second £rfldlfy consideration examines the nature of
ti. right, at iesue and determines whether the new laglalatien
affects any right, that hav. 'matured or become unconditional.*
416 O.s. at 720. Because Ha. Ellis did not file her ovn
lawsuit Withih 180 days of th. di.orimin.tory incident (tha
•tdtuta Of limitations in affect: under the loss Act), the
defendant, claim that the government cannot maintain this
enforcement action on her behalf. lB other word..
only by StijviJtaj* "su^nf |® ̂ ^ ltlg>tlen can become one
- 7
Id ' 3i)Cd SZs, l rig 202 08 '• 5 l 28 > 0£ aow
*
•*
clala that thMix right to .void penalty for their discriminatory
coaduct has now 'nature! or become unconditional.' Agein
politic cwcfese. two very ^ ̂ ^
Fair Housing hot. As discusssd; above, the Fair Housing Act
provides right, far a private complainant to litigate private
claims a. vail a. providing the govemnent with authority to
naercise its snfa.-csment powers. Although based upon the sen.
net of operative facts, ties, right, .r. mutually exclusive.!/
In the :instsnt oaee, defsndwts- discriminatory conduct
was unlawful before the effective date of the 19.8 Act. m fact
discrimination on the basis of race ha. been proscribe
throughout the twenty-four year history of the y.lt Housing ̂
=nd dafandant. have no -right' to avoid new penalties or
administrative procedures for conduct which was unlawful at the
ti». it occurred. £** JSsnl^cisa, 734 F. supp. ,t 480.
Moreover, the icr. fact that Hs. Ellis- right to maintain a
private cause of sotion had expired prior to the effective dat.
That3??. rig?SŴ n^f^'g4^JJf and LI tl gar) a,, s 25-1 (1990,
u 'private attorneys g«:>aSi ̂ toy Private parties
m . . s “ r a r -
s r s
revive % °pri “gj**
retroactively applied*?? ̂ HTO°«f??cf ^ n?3le^Anandsd^ActBtojbB^*kâ
- 8 -
eie *3Dbd 8251 PIS 202 l £ : 8 I 28. 0£ bô J
• *
m • *
• . °ttha toeaded * * doe“ Bot » *»atur^J" or -unconditional*
right to avoid ttiforcromt by the government.
The third Bsidlsy consideration requires an examination
of the impact, if any, that the change in lav may have upon
existing rights. Bcadlsy, sis o.S. 720. It *.t«u, Iroa
possibility that new aid unanticipated obligations nay he imposed
upon a party vithout notice or an opportunity to be heard.* yd
If the lav would have caused the defendant to change hi. conduct
had he known of hi. obligation,., . court is nor. likely to find
, manifest injustice in subjecting him to enforcement of the new
law. 12. The Amended let, as applied to the defendants, did not
affect the proscription against racial discrimination that
existed at the tic. of the illegal activity, rather it only
expanded the enforcement and rewdial provisions of the i9s8 act.
Defendants cannot seriously suggest that they would not have
discriminated against Ms. kill,; had they known that new
administrative prsceduras would be ava-finKi® **iC' DG available tD persons who filed
complaints with n , bee,us. the defendant, were liable for such
discriminatory ar:s at the time that they were committed.
To deny relief to the government in this action would
be *m»ife.tly unjust,* given the important public policy at
looue. The court should r.ject defendants- claim that the
government's suit is untimely.
- 9
*
6. TBL EtoUBCShwa1 ACTION 25 'deft mviittLYBECAUSE 07 HUD'S TIJJUBZ TO COMPLETE ITS INVESTIGATION
TR roo PAYS__________________- ______ _________
There is no langnasps in -the Acti -which creates a statute
of limitations no bar future governm ratal enforcement; If HtJD
falls to complete Its investigation irithin a certain period, goa
‘ i42 U.s.C. S 3610(a). Hhlle the original Act indicatcsd that such
processing should be camp loti id in thirty: days, and the Attended
Act denotes a 100 day tine piriod far such proceeding, neither
tine limitation is jurisdictional. .in the statute indicates, if
it is impracticable fer HUD to complete its processing of the
complaint in the suggested tins, HDD is not barred fro*
proceeding. 42 U.S.C. S 3610(a)(1)(B)(iv). See United States v.
Bftfcfclr Fair Housing-nir Leading (P-H) para. 15,676 at 16,473
(E.D.Pa. 1990) (holdinci that the loo day investigation requirement
is not jurisdictional becaucr there is no stated consequence for
failure to comply with its terns) - SMA alco united stat— n-
garlô i rt al., No. 91-5743 vjr (joe) (e.DiCal. Jen. 29, 1992)
(copy attached) (order denying defencLnnto' motion to dismiss
alleging that HUD non-compliance with 100 day investigation is
jurisdictional).
This issue aas also arisen in hud at.7 proceedings,
the A U decisions hold that non-compliance with the provision
that conplaints are to be processed s-itfrin 100 days is not a
grourd far dismissal. a*fi, .va^ Saaretarv of HUD •* ̂ JBaunaardner.
■ • * »
Fair Housing-Fair Larding fP-H) para. 25,006 at 25,097 (November
15, 1990) (Andretta, J..L.J.) (holding that although HOD did not
- 10 -
1
I 10 *3Sbd 8«:si n s 202 2S ! S I 25 i 05 dbUI
comply with it* ova regulations, non-compliance is mot grounds
for dismissal because the regulations relate to BCD's
investigatory function, not to BUD'a right to maintain an
enforcement action).3/
CONCHJEXON1
The com lidorations set forth in Bradley and Bent
America and tha other cited authority all support applying the
remedial and enforcement proTielans of the Pair Bousing
Amendments Act to the circumstances of this case. Patroactlve
application is consistent with iiacisting law and legislative
intent and will assist the U&itaid states- in tbs achievement of
important policy 'joals. Application of the Amerded Act will not
raault in any in jostles to the defendants. In addition, BTJD's
failure to follow administrative procedures is not jurisdictional
and has no bearing an the court's ability to adjudicate this
case.
The requires ant that the United States file: its suit 30 days after an election to proceed in federal court (42 U.S.C. S 3612(d)) is arguably in the nature of a. statute of limitations. But, as la true tfitfa respect to the timeliness of Ms. Ellis's complaint to HUD, thorn is no dispute that tha filing of the United States' complaint in this Court was timely.
•• 11
2t0'3S>yd
l
82£I P I £ 202 GS-*SI 2 5 1 05 dbW
For -the foregoing reaaoni, defendants' oral motion to
dismiss should ha dialed.
Margaret B. Seymour Assistant U. S. Attorney P-0. Box 2266 Columbia, s.c. 29202 (803) 765-5483 I.D. Ho. 1562
Cheryl L. Ziegler AttorneysHousing and civil Enforcement SectionCivil Bights Division XJ.S. Department of Justice P.0. Box 65998 Washington, D.C. 20035-5998 (202) 514-4752
Dated: February 12, 1992
1
12 “
1 3.2*2 — 02— 10 10:26 GORDON SILBERMAN UIIGG1NS CHILDS 00 5205 254 1500 . f
IN THEUNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
NO. 89-7850
UNITED STATES OF AMERICA/
Plaintiff/Appellee/
v.
PEPPERTREE APARTMENTS et ll.,
GEORGE BAILES, Jr.,
De f endant/Appellant.
Appeal from the United States District Court
For the Northern District of Alabama
BRIEF OF APPELLEE
FRANK W. DONALDSON
United States Attorney
ROBERT P. BARCLIFT
Assistant United States Attorney
Attorneys for Appellee
1992-02-10 10=26 205 254 1500 GORDON SILBERMAN WIGGINS ChIi_DS 005
*
IN THE
UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
NO. 89-7850
UNITED STATES OF AMERICA,
Plaintiff/Appellee,
v .
PEPPERTREE APARTMENTS «t al. ,
GEORGE BAILES, Jr.,
Defendant/Appe11ant.
Appeal from the United States District Court
For the Northern District of Alabama
BRIEF OF APPELLEE
1922-02-10 10=27 GORDON SILBERMAN WIGGINS CHILDS 00
CERTIFICATE OF INTERESTED PERSONS
The undersigned counsel for Appellee certifies
that the following list represents all persons having an
interest in the outcome of this case*
Honorable Bam C . Pointer
United states District Judge
Federal Courthouse
Birmingham, Alabama 35203
Honorable Ralph J. Bolen
Attorney for George L. Bailee, Jr.Defendant-Appellant
423 Frank Nelson Building Birmingham, Alabama 35203
George L. Bailes, Jr.
Suite 103#4 Office Park Circle
Birmingham, Alabama 35223
Honorable Frank W. Donaldson
United States Attorney 200 Federal Building
Birmingham, Alabama 35203
Honorable Robert P. Barclift Assistant United States Attorney
200 Federal Building 1800 5th Avenue North Birmingham, Alabama 35203
Honorable John P. Kennedy
Associate General Counsel
Department of Housing &
Urban Development
Honorable Geoffrey L. Patton
United States Department of Housing & Urban Development
451 Seventh Street, S.W.
Washington, D.C. 20410-0500
1392-02-10 10:27 205 254 1500 GORDON SILBERMAN WIGGINS Cm 1l.DS Go
STATEMENT REGARDING ORAL ARGUMENT
Appellee requests oral argument oecause this case
involves the important issue of whether the government may
collect increased penalties for violations committed before
the penalty was enacted.
1392-02 10 1 0:27 205 254 1 500 GORDON SILBERMAN WIGGINS ChIi_DS 00
TABLE OF CONTENTS
Certificate of Interested Person*
Statement Regarding Oral Argument
Table of contents ..............
Table of Citations..............
Statement of Jurisdiction . . . .
Statement of the Issues ........
Statement of the Case . . . . . .
a. Proceedings Below. . . .
b. Facte..................
C. Standards of Review. . .
Summary of the Argument ........
Argument........................
Conr:) uk i nn......................
Certificate of Service..........
g age
1
11
iii
iv
vii
2
3
• 3
5
U
12
13
40
41
1332-02-10 10:28 205 254 1500 GORDON SILBERMAN UIIGGINS CHILDS 005
TABLE OF CITATIONS
Cases PflyL
New Jersey. 470 U.S. 632 (1985) ................ 31
Bowen v. Public Agencies Opposed to Social Security
Entrapment. 477 U.S. 41 (1986) ......................... 35, 36
Dradlev v. School Board of the Cltv of Richmond,416 U.S. 696, 711 (1974) . . . 23-25, 27, 28, 30, 33, 34, 36, 37
Dedham Water Co. v. Cumberland Farms Dairy. Inc..805 F. 2d 1074, 1085 ( 1st Cir. 1986)........................ 24
Hastings _v,. Earth Satellite C.orP^, 628 F.2d 85, 93-94(D.C. Cir. 1980) .................................... .. 31
Kelaoe v, Federal Crop Insurance Coro. . 724 F.Supp.448 (E.D. Tex., 1988).......................... 27, 30, 31*, 34
Louis Vui.tt.pn S■ A . V. Spencer Handbags Corp. . 765 F.2d
966 (2d Cir. 1985) ...................................... 36-38
Mercantile Bank & Trust Co. v. Fidelity 6 Deposit Co.,750 F. 2d 838 (11th Cir. 1985).............. ................ 11
Mas cm v . Brown. 595 F-2d 801, 806 (D.C. Cir. 1 9 7 9 ) ........ 15
National .Wildlife Federation v. Marsh. 747 F.2d 616,619-20 (11th Cir. 1984) .................................... 23
Qrreqo v. HUD. 701 F.Supp. 1384, 1397(N.D. 111. 1988) ........................................... 35
Pantex Towing Corp. v. Glldewell. 763 F.2d 1241
(13th Cir. 1985) ........................................ 15-20
Ifaorpe y . Housing.Authority of the City of Durham.393 U.S. 268 ( 1969 ) ........................................ 25
Thyasher v . State Farm Tire & Casualty Co.. 734 F.2d637 ( 11th Crr. 1984 ) ...................................... 11
Turner v. United States. 410 F.2d 837, 842(5th Cir. 1969 ) .................................... . . . . . 31
Underwood v. Hunter. 730 F . 2A 614 (11th Cir. 1984) citing Pullman-Standard v. Swint. 456 U.S. 273, 287 (1982) ........ 11
i v
1932
J
-02-10 10:28 205 254 1500 GORDON SILBERMAN WIGGINS CHILDS 005 r
United States Ex. Rel . WcCov V, California Medjcfll Review, Inc., 723 F.Supp. 1363, 1368 (N.D. Cal. 1989) 27, 30
United States v . Ettrick Wood Products, Inc..,683 F.Supp. 1262, 1266 (W.D. Wise. 1988) . . . . 26, 27, 30,
United States v. Fernandez-ToIedQ# 749 F.2d 703,
705 (11th Cir. 1985) ......................................
United States v. Hill. 676 F.Supp 1158, 1167(N.D. Fla. 1987) (emphasis in original) ........ 26, 27, 31,
33
31
34
United states v. Mechem. 509 F.2d 1193, 1196
(10th Cir. 1975) .......................................... 31
United States v.-Pakwood Downriver Medlgal-gfiRfcffiC# ^ ,,687 F.Supp. 302, 307-8 (E.D. Mich. 1 9 8 8 ) .......... 24, 30, 33
United States v. Pani. 717 F.Supp. 1013, 1017
(S.U. N .Y. 1989) ..........................
Unit_e_d_St a t e s v_,_Schooner Peggy. 5 U.S. (1 Cranch)
103, 2 L.Ed. 49 (1801) ............................
United States v. Schumann. 861 F.2d 1234, 1238
(11th Cir. 1988) ..................................
Unit-d..States v. Utah Construction and Mining CPmP*nY,
384 ^.S. 394, 422 (1965) ..........................
United States v. Vanella. 619 F.2d 384, 385-6
(5th Cir. 1980) .....................................
University of Tennessee v, Elliott, 478 U.S. 788,
797-8 ( 1986 ) .............................. ' . . . . .
Statutes and Regulations:
24 C.F.R. Part 24.................................................. 9
24 C.F.R. S 24.305(b)........................................... 21
24 C.F.R. Part 2 6 ..................................... i-r . . 9, 19
24 C.F.R. S 26.23............................................... 10
24 C.F.R. S 26.24(d)..................................... ‘ .10
v
1992-02-10 10:29 205 254 1590 GORDON SILBERMAN WIGGINS ChlLDS 00
and Regulations:
24
41
52
12
12
12
12
12
15
31
C.F.R. S 221.529 ........................................
Fed. Reg. 5304 (January 27, 1977)......................
Fed. Reg. 42634 (November 6, 1987)............. ..
U.S.C. S 17151(a) .....................................
U.S.C. S 17151(d)(4) ...................................
U.S.C. S 1715z-4a................3# 21, 22, 24, 25, 30
U.S.C. S 1715z-4a(a )(2) ...............................
U.S.C. S 1715r-4a(c) ...................................
U.S.C. S 1117(b)........................................
U.S.C. $ 3729-33 ........................................
. . 6
. . 9
. . .9
.5, 28
5, 28
33/ 38
. . 21
7, 37
'. 36
. 24
Other References:
Fed.R.Civ.P. 56(c)
Pub. L. No. 90-448 S 302, 82 Stat. 506 (Augv^t 1, 1968).
Pub. L. No. 99-562 5 2, 100 Stat. 3153 (October 27, 1986)
Pub. L. NO. 100-242, 101 Stat j 1908 (February 5, 1988). .
Pub. L. No. 100-242, 101 Stat. 1913 (1988)...............
H.R. Conf. Rep. No. 100-122(1), 100th Cong., 1st Sees. 1/
1987 U . S . Code Cong. & Admin. News 3317.
H.R. Conf. Rep. No. 100-426, 100th Cong., 1st Sess. 161,
reprinted in 1987 U.S. Code Cong, i Admin. News 3458 . .
H.R. Conf. Rep. No. 100-426, 100th Cong., 1st Sees. 214,
reprinted in 1987 U.S. Code Cong, t Admin. News 3511. . •
H.R. Conf. Rep. No. 100-426, 100th Cong. 1st Sees. 21i t
reprinted In 1987 U.S. Code Cong. & Admin. News 3513. . •
133 Cong. Rec. S 18607-23, H 12047-95
(daily edition December 21, 1987)........................
. .11
. . 29
. . 24
30, 38
t
. .22
. .25
. . 25
. .29
. .27
. . 25
vi
1392-02-10 10:29 205 254 1500 GORDON SILBERMAN WIGGINS CHILDS 005 =
STATEMENT OF JURISDICTION
The Court, has jurisdiction over this case under
22 U.S.C. S 1291 because it is the appeal of a final
decision of the United States District Court for the
Northern District of Alabama granting summary judgment to
the appellee. This Court, by its Order of April 12, 1990,
has previously determined that it has jurisdiction in this
matter.
I
VJLl
1392-02-10 10:29 205 254 1500 GORDON SILBERMAN WIGGINS ChlUDS 00
s t a t e m e n t Q T THE ISSUES
1. Did appellant present any genuine issues Of
material fact that would raise a legal defense to this
action and preclude the granting of summary judgment for the
government?
2. Did the District Court err in holding that the
ruling in an administrative hearing collaterally estops
appellant from relitigating the issue of whether he violated
his Regulatory Agreement contracts with HUD?
3. Did the District Court err in awarding double
damages to appellee under 12 U.S.C. S 1715z"4a for
violations which took place prior to the enactment of the
double damages remedy?
2
1992-02-10 10=30 205 254 1500 GORDON SILBERMAN WIGGINS CHILDS 00
STATEMENT OF THE CASX
a. Proceedings Belov
On May 5, 1989, the United State* of America filed
its complaint against appellant Bailee and several
organizations controlled by Bail#* which own and manage four
multi family apartment projects which receive mortgage
insurance and other financial assistance from the Department
of Housing and Urban Development. (R-l-1). The complaint
alleged that from 1963 to 1985, the defendants had paid
$90,311 in project income to themselves in violation Of the
terms of Regulatory Agreement contracts with HUD. The
complaint sought double damages for these violations as
expressly authorized by 12 U.S.C. 1715t-4a.
On June 6, 1989, the United States filed a motion
for summary judgment and a supporting memorandum. (R-l-4).
The motion was based on the doctrine of collateral estoppel
and asserted that defendants' violations of the Regulatory
Agreements had already been established at an administrative
hearing before HUD's Board of Contract Appeals. The
defendants filed a response to this motion on June 27, 1989.
(R-l-6).
The District Court entered an Order and Opinion on
July 12, 1989, granting the motion for summary judgmen%-
against Bailes and awarding the United States double damages
3
1992-02-10 10=30 205 254 1500 GORDON SlLBERMAN UlIGGINS ChIi_Di> uo
ir, tho amount of $186/622 plus other cost* allowed by
statute. (R-l-6 a.mi i-i>) ,
Defendant Bailes filed a motion to reconsider this
O r d e r o n J u l y 25, 1989- (R-l-10). This motion challenged
ap prrnr the Court's award of double damages because the
d o u b l e d a m a g e s remedy was enacted on February 5, 1988, while
the violations of the Regulatory Agreements took place from
19P? t o 1985.
In an Order and Opinion dated October 10, 1989,
the District Court denied Bailes' motion to reconsider.
( R - l - 1 4 a n d 1-15). On November 9, 1989, Bailes filed a
Notice of Appeal (R-l-20) from the District Court's Order of
July 12, 1989, (R-l-9) granting summary judgment to the
United States.
4
1392-02-10 10=31 205 254 1500 GORDON SILBERMAN WIGGINS Gni_Di u v
b. Fac^£
A. The Projects and WUD's Administrative .Controls
Pepper tree Apartments, City Court II ApartmentB,
Rainbow Apartments and College Manor Apartmente are
multifamily housing project® located in the cities of
Bessemer, Talladega, Rainbow City and Gadsden, Alabama,
respectively. (Rl-1-2). Each Of the projects was built
with the proceeds of a loan which was insured against
default by the Secretary of Housing and Urban Development
(HUD) under authority granted by Section 221(d)(4) of the
National Housing Act, 12 U.5.Q. 17151(d)(4). (Rl-1-3,4).
The purpose of that aection is "to assist private industry
in providing housing for low and moderate income families
and displaced families." 12 U.S.C. 17151(a). The loans on
Pepportree Apartments and City Court II Apartments were made
in Ociuber 1979, while the loan on Rainbow Apartments was
made in February 1981 and the ̂ loan on College Manor
Apartments was made in October 1980. The amount of each
loan ranges from SI,003,003 (City Court II) to $1,629,200
(College Manor).
While each of the projects is owned by a separate
partnership entity (i.e. Peppertree Apartments, City Court
II Company, Rainbow Apartments Company and College Manor,
Ltd., all of which were defendants below), all of them are,
as a practical matter, controlled by George L. Bailee, Jr.
(Bailes). Bailes is a managing or general partner in each
5
1932-02-10 10:31 205 254 1500 GORDON SILBERMAN WIGGINS CHILDS 00
m these entities and is the sole owner of Bailes Realty
Company which, at all times relevant to this action, was the
managing agent for each of the projects. Bailee personally
signed all checks for expenditures from the projects' bank
accounts.
In consideration for the mortgage insurance
provided by HUD, each of the owners entered into an
identical Regulatory Agreement contract with HUD under which
it agreed to operate the project in accordance with the
terms of the Agreement. (Rl-1, Exhibits A-D). HUD's
authority to regulate the operation of a project in this
manner is found in Section 221(d)(4) ("the Secretary may, in
his discretion, require the mortgagor to be regulated or
restricted as to rents or sales, charges, capital structure,
rate of return and methods of operation") and in 24 C.F.R.
S 221.529. Such regulation is necessary to assure that a
project continues to provide adequate housing for low- and
moderate-income families and displaced families as intended
by Congress.
The Regulatory Agreements prohibit the owners from
using project rents and income for any purpose other than
reasonable operating expenses and necessary repairs."
Paragraph 8(b). The only times these funds can be used for
other purposes are when the project has "surplus cashr—as
defined in paragraph 16(f) or when the owner has HUD's prior
written approval for an otherwise unauthorized expenditure.
6
1932-02-10 10=32 205 254 1500 GORDON S1L5ERMAN NIGGINS Cnl^DS
Paragraph 8(b) is supplemented by paragraph 8(e)
which prohibits distribution of project assets or income
except from surplus cash and except under conditions set
forth therein. Both paragraphs 8(b) and 8(e) are designed
to ensure that the needs of the project and the tenants are
f u l l y met before project funds are distributed to the owner.
If the owners violate their Regulatory Agreements,
HUD has a wide range of remedies. These include the right
to apply to any court, state or federal, for an injunction
against any violation, for specific performance of the
Agreement or "for such other relief as may be appropriate,"
paragraph 14(d). In addition, the government "may recover
double the value of the assets and income of the project
that [a) court determines to have been used in violation of
the regulatory agreement" 12 U.S.C. $ 1715z-4a(c). The
government may also recover the reasonable costB it incurs
when bringing an action to recover the diverted funds. id-
B. The Owners * Violation of the Regulatory Agreements
In August 1986, HUD's Office of Inspector General
(01C) issued an Audit Report which 6tated that during the
period frorr September 1, 1983 to December 31, 1985, Bailes
and Bailes Realty Company, in their capacities as managers
of the projects, had taken a net total of $104,911 from the
four projects and spent that money for purposes not
authorized by the Regulatory Agreements. Specifically,
Bailee had written 103 checks on project accounts for a
7
1 3 3 2-0 2- 1 0 10:32 GORDON SILBERMAN WIGGINS CfiluDS 00205 254 1500
total of $1,519,711 and placed that amount directly or
indirectly in money market bank accounts which he had
established in his own name. While Bailee had returned
$1,414,800 of this money, he had not repaid the remaining
$104,911 and had never accounted for or repaid the interest
he had earned on the total amount he had withdrawn.
The OIG determined that these expenditures
violated the Regulatory Agreements because the project* had
no surplus cash when Bailes wrote the checks, because the
expenditures were not made for reasonable operating expenses
or necessary repairs or under circumstance* permitted under
paragraph 8(e), and because Bailes did not have written
permission from the secretary before taking the money.
Based on these findings, the OIG recommended that Bailes be
required to immediately repay the $104,911 he was retaining
in violation of the Regulatory Agreements.
C. Administrative Proceedings
Shortly after the OIG's Audit Report was issued,
HUD made a written demand that Bailes return the $104,911.
A l t h o u g h Bailes did not dispute the fact that he took the
m o n e y , he nevertheless refused to put it back.
Consequently, HUD determined that Bailes should be debarred
from further participation in HUD programs for a period of
five years. When Bailes received notice of his proposed
debarment, he requested a hearing on the matter before HUD"s
Board of Contract Appeals in order to challenge the legal
B
19.9 2-0 2-10 1 0:33 205 254 1500 GORDON SILBERMAN WIGGINS CHli_DS C o
!•
• r:c factual basis for the debarment. Bailee had an absolute
right to such a hearing.1
Bailee' request for a hearing was the beginning of
a quasi-judicial administrative proceeding before an
Administrative Judge of HUD’s Board Of Contract Appeals
which was held under rules set out in 24 C.F.R. Part 26.
That proceeding was formally initiated by the Administrative
Judge's Notice of Docketing and Order (Rl-4, Exhibit E-l).
Subsequently, as required by 24 C.F.R. 5 26.10/ HUD filed a
complaint against Bailes alleging, among other things, that
he hod distributed $1,519,711 in project funds in Violation
of the Regulatory Agreements. This was the same amount that
Bailes had put into his money market accounts as alleged in
the OIG's Audit Report. As a remedy for these activities,
HUD requested the Administrative Judge to enter a
determr.ation debarring Bailes and Bailes Realty Company
from further participation in HUD programs for a period of
five years. (Rl-4, Exhibit E-2).
The administrative proceeding culminated in a
hearing on Bailes' proposed debarment which lasted four
days, November 1-4, 1988, and took place in Birmingham,
Alabama. At the hearing, Bailes presented evidence and
The debarment was undertaken pursuant to regulations in
effect on May 14, 1987, the date on which HUD issued its notice of
proposed debarment. Those regulations, 41 Fed. Reg. 5304
(January 27 , 1977 ) were codified as 24 C.F.R. Part 24 and were
superseded on November 16, 1987, 52 Fed. Reg. 42634 (November 6,.987 ) .
9
13.9^-02-10 10:33 205 254 1500 GORDON SILEERMAN WIGGINS CHILDS 005 F
r-rr.?c-examined witnesses. 24 C.F.R. 5 26.23- At the close
of tho hearing, the Administrative Judge issued a ruling
from the bench. 24 C.F.R. 5 25.24(d). (Rl-4, Exhibit
E-4). In that ruling, the Administrative Judge found that
Bailes had made a net distribution of $90/311 ($1,519/711/
less repayment of the $1,414,800 shown in the Audit Report
and of an additional $14,600 which Bailes allegedly returned
after the administrative proceeding had begun) to his money
market accounts and that he had not replaced that money
despite knowing that these distributions violated the
Regulatory Agreements. (Rl-4, Exhibit E-4 at 541-43,
550-52). The Administrative Judge further found that Bailes
had not accounted for or repaid interest earned on these
accounts. Such use of project funds was, the Administrative
Judge stated, "outrageous, inexcusable and shocking"
therefore, rendering a five year debarment "warranted and
necessary.” (Rl-4, Exhibit E-4 at 551-553).
10
iI
GORDON SILBERMAN WIGGINS Crti^DS 00513_3 2 — 0 2— 10 10 = 34 205 254 1 500
c. Standards of Review
In reviewing an order which grants a notion for
summary judgment, this Court must examine the record which
was b e f o r e the District Court to determine if there is a
genuine issue as to any material fact. The Court will
conduct an independent review of the record using the
standard contained in Rule 56(c), Federal Rules of Civil
P r o c e d u r e . Mercantile Bank & Trust Co. v. Fidelity &
D e p o s i t C o .. 750 F.2d 838 (11th Cir. 1985); Thrasher v.
S t a t e F a r m F i r e _& C a s u a l t y Co., 734 F.2d 637 (11th Cir.
1984) . I
Questions of l a w , such a s whether the District
C o u r t p r o p e r l y applied the doctrine of collateral estoppel
to t h e f a c t a in this case and whether the District Court
a w a r d e d t h e p r o p e r relief, are subject to independent
r e v i e w . C o n c l u s i o n s o f l a w m a y be set aside if they rest on
a n e r r o n e o u s v i e w of the law. ̂Underwood v. Hunter. 730 F.2d .
614 ( l i t h Cir. 1984) citing Pullman-Standard v. Swint, 456
U.S. 273, 287 (1982).
I 11
1932-02-10 10:34 205 254 1500 GORDON SILBERMAN WIGGINS CHILDS 00
SUMMARY OF THE ARGUMENT
The District Court properly granted summary
judgment for the United states because there are no genuine
issues of material fact. All of the relevant facts were
r e a d i l y determined from the uncontradicted documents which
were filed by the government in support of its motion.
Appellant has not produced any evidence at the District
Court or in this Court which contradicts any of the facts
alleged b y the United States.
The District Court, having found that all of the
necessary criteria were met, correctly applied the doctrine
of collateral estoppel as it exists in this Circuit to the
facts in this case. Under that doctrine, the District Court
appropriately held that the determination of HUD'S
Administrative Judge that appellant Bailes has violated his
Regulatory Agreement contracts with HUD prevents him from
relitigating that issue in federal court. r
The District Court properly relied on Supreme
Court case law to hold that the United States may recover
double damages from Bailes for his violations of the
Regulatory Agreements even though those violations took
place before the double damages remedy was enacted.
12
1332-02-10 10=34 205 254 1500 uURDQN S 1 LDERMAN w iGu
ARGUMENT
A. Appellant Has Not Raised Any Genuine Issues of Material Fact Which Would Preclude the Granting of Summary Judgment for the United
States.
Summary judgment was not only appropriate in this
case but inevitable because none of the material facts are
in dispute. Bailes does not deny that he was in full
control of the bank accounts for the four housing projects
which are the subject of this litigation. He freely admits
that he took $1,519,711 from the projects' bank accounts and *
placed them in money market eertifieates. Appellant's Brief
at 7. Bailes further admits that he disregarded HUD'S
demand that he return $90,311 of that amount to the
p r o j e c t s ' accounts. Appellant's Brief at 8. Moreover, he
readily agrees that an administrative hearing concerning his
use of project funds was held before HUD's Board of Contract
Appeals, Appellant's Brief at 8, and does not deny that, the
pleadings and transcripts from that hearing which were
a t t a c h e d to the government's motion for summary judgment
(R-l-4, Exhibits E-l through E-5) are authentic.
Bailes' retention of $90,311 in project funds violates the
Regulatory Agreements. But this is a purely legal issue.
Likewise, the real issue before the District Court in the
rulmg of the Board of Contract Appeals precludes Bailes
The parties are plainly at odds as to whether
motion for summary judgment was also legal: whether the
13
1322-02-10 10:35 205 254 1500 GORDON S 1LBERMAN UlIGGINS CHIl DS 0 0
frot. claiming that his retention of $90,311 in project
income do-* not violate the ^egulauCjLy Agreements 'J:»dar
these circumstances, the Court could, and did, resolve this
issue entirely from the facts then before it, and such a
resolution was entirely proper.
The only issues on which Bailes even appears to
claim a material or genuine issue of fact are 1) the precise
issue which was presented to the Board of Contract Appeals
and 2) the exact nature of the Board's ruling. Appellant's
Brief at 17-20. However, these issues are not really in
dispute. The Court was able to conclusively resolve them in
favor of the government by referring to the relevant,
undisputedly authentic pleadings and transcripts of the
Board's hearing which were available to it as part of the
record in this case. The Court's Opinion states explicitly
that
The Administrative Judge found that Bailes had made a net distribution of $90,311 to his money . market accounts and that he had not replaced that
money despite knowing these distributions violated
the Regulatory Agreements.
( R - 1-8-2) .
with no issue of material fact before it, the
District Court had no choice but to grant summary judgment.
Accordingly, there is no legal basis on which this Court may
overturn that ruling.
14
1392-02-10 10:35 205 254 1500 GORDON S1L.BERMAN WIGGINS Cl“iii_DS uu
b . Thg.pistr ict Court Properly Applied the
Doctrine of Collateral Estoppel to Prevent Bailee From Dlgputlnn That .He Had Violated
the Regulatory. Agreements.
The District Court properly held that under the
doctrine of collateral estoppel, the Board of Contract
Appeals' ruling prevents Bailes from relitigating the issue
of whether he retained $90,311 in violation of the
Regulatory Agreement.
Bailes admits, as he must, that administrative
proceedings before government agencies may collaterally
estop relitigation in district courts. Appellant's Brief at *
14-15. Agency action will have this effect when the agency
"is acting in a judicial capacity and resolves disputed
issues of fact properly before it which the parties have had
adequate opportunity to litigate.” United States v. Utah
Construction and ..Mining Company, 384 D.S. 394, 422 (1966).
— gard > University of Tennessee v. Elliott. 47B U.S. 7U8,
797-8 (1986); Nasem v. Brown. 595 F.2d 801, 806 (D.C. Cir.
1979 ) .
In the Eleventh Circuit, the findings of an
administrative agency will prevent relitigation of the
issues that led to those findings if five criteria have been
niGt- Paptex Towin_a._Corp ■ v. Glldewell. 763 F.2d 1241 (11th
Cir. 1985). These criteria are:
1 . There is identity of the parties or their privies in the two proceedings;
There is identity of issues;
15
1932-02-10 10=36 205 254 1500 GORDON SIL5ERMAN WIGGINS ChluDS 005
3• The parries had an adequate opportunity to litigate the issues in the administrative
proceeding;
4 . The issues to be estopped were actually litigated and determined in the
administrative proceeding; and
5. The findings on the issues to be estopped were necessary to the administrative
decision.
Id. at 1245. Notwithstanding Bailee' arguments to the
contrary, this ease fully meets the Pantcx standard, and
collateral estoppel applies.
their privies, is clearly met here. The parties in the
a d m i n i s t r a t i v e a c t i o n w e r e t h e government and Bailee; the
p a r t i e s in t h i s action a r e t h e government, Bailes, and
s e v e r a l o r g a n i z a t i o n s c o n t r o l l e d b y h i m . Bailes is either
t h e g e n e r a l p a r t n e r o r t h e o w n e r of all of these
o r g a n i z a t i o n * . •'(R-l-4, E x h i b i t E - 4 a t 540). Although these
e n t i t i c c w e r e n o t t h e m s e l v e s p a r t i e s i n the administrative
p r o c e e d i n g , t h e i r i n t e r e s t s w e r e f u l l y represented, or could
h a v e b e e n , b y B a i l e s . U n d e r t h e s e circumstances, there can
b e n o d o u b t t h a t B a i l e s w a s t h e i r " p r i v y " in the
a d i u n i s t r a t i v e p r o c e e d i n g . T h e r e f o r e , all o f t h e p a r t i e s t o
t h i s a c t i o n w e r e a l s o p r e s e n t , d i r e c t l y o r indirectly
t h r o u g h B a i l a a , a t t h e a d m i n i s t r a t i v e proceeding, and there
is a c o m p l e t e i d e n t i t y o f t h e p a r t i e s in t h e t w o actions-.*
It is i m p o r t a n t t o n o t e , h o w e v e r , t h a t t h e D i s t r i c t C o u r t
j u d g m e n t entered on J u l y 12, 1989, is against George Lewis
The first Pantex test, identity of the parties or
16
1332-02-10 10:36 205 254 1500 GORDON SILBERMAN WIGGINS ChlLDS 00
Bailes, only and not the various Defendant companies.
( R l - 9). Clearly then, the parties actually affected by both
p r o c e e d i n g s are identical.
Bailee claims that the absence of his affiliates
f r o m t h e administrative hearing precludes an identity o f
p a r t i e s because those entities had no right to "appear,
object, cross examine witnesses or offer testimony at the
administrative hearing." Appellant's Brief at 17. Bailes
h a s no t presented any evidence at all, however, to show that
t h e interest o f those companies was any different from his
o w n or that their appearance would have in any way altered
t h e course o f the hearing or led the Administrative Judge to
a d i f f e r e n t conclusion. T o the contrary, the evidence shows
t h a t B a i l e e and his companies had identical interests and
t h a t all o f those interests were well represented at the
h e a r i n g .
The second Pantex test has been met because thei
* a m « i s s u e is i n v o l v e d in both proceedings: whether Bailes
d i s t r i b u t e d p r o j e c t f u n d s i n v i o l a t i o n of the Regulatory
A g r e e m e n t s . 7 C o u n t I of the complaint filed by H U D in the
a d m i n i s t r a t i v e h e a r i n g s p e c i f i c a l l y c h a r g e s Bailes with
m a k i n g 103 d i s b u r s e m e n t s o f p r o j e c t f u n d s which v i o l a t e d the
R e g u l a t o r y A g r e e m e n t s . ( R - l - 4 , E x h i b i t E - 2 at 5). The
A d m i n i s t r a t i v e J u d g e c l e a r l y r e c o g n i z e d that this was an.
The reference in Count I of the administrative complaint to
■paragraph 6E" of the regulatory agreements appears to be a
:yp°graphical error. The correct reference is to paragraph 8E.
1?
1332-02-10 10:37 205 254 1500 GORDON S1LBERMAN NIGGINS Cnii_DS
at. the hearing. (R-l-4, Exhibit E-4 at 538-539).
£ iflii' itxly „ paragraphs 2£ ’2 of the complaint in this action
charge Bailes and the other defendants with spending project
funds in violation of the Regulatory Agreements and failing
to return $90,311 of those funds upon demand from HUD.
(R-l-1-5). A comparison of these documents leaves no doubt
thrtt the question of whether Bailes had complied with his
Regulatory Agreement duties was a central issue in both
proceedings.
Bailes is completely and demonstrably wrong when
he claims that there is no identity of issues because "the
only issue that was before the administrative hearing was
the disbarment for failure to comply with HUD's demand" that
return the money that he had taken from the projects, and
because "Bailes' alleged breach of contract [was] never
before the administrative hearing " Appellant's Brief at
17. (Emphasis in original) This claim ignores the plain
language of the Administrative Judge's opinion as well as
Count I of the administrative complaint and the six other
Counts which charge Bailes with additional violations of his
obligation* to h u d . (R-i-4, Exhibit E-4 at 538-539 and
Exhibit E-2 at 5-9).
The third Pantex test is met because Bailes had an
adequate opportunity to litigate the relevant issues in Zhe
administrative hearing. As desciibed above, the hearing was
quasi-judicial in nature and was carried out under HUD
18
19 9 3 — 0 2— 10 1 0:37 205 254 1500 GORDON S ILBORMAN WIGGINS Cnii—DS uu: -
ar tors assuring that the parties have the full rights
of a litigant in a formal judicial tribunal. 24 C.F.R.
Part 26. See the Notiee of Docketing and Order filed in the
hearing. (R-l-4, Exhibit E-l). These regulation* assured
Bailee of a full and complete opportunity to litigate the
issues^ and Bailee has not denied, either at the District
Court level or in his appellate brief, that he had such an
opportunity.
Under the fourth f^ntex test, the issues to be
estopped must actually have been litigated and determined in
the administrative proceeding. This test is also met. The
Administrative Judge specifically determined that Bailee had
placed "project operating funds into money market accounts
where they were commingled with non-project moneys in
violation of the Regulatory Agreement. And over $90,000 has
still rot been replaced." (R-l-4, Exhibit E-4 at 550-551).
The Administrative Judge found that these violations were
“outrageous, inexcusable and shocking." Id. at 551.
Elsewhere in her opinion, the Administrative Judge set the
exact amount of the money taken in violation Of the owners'
contractual obligations at $90,311, as of the date of the
hearing. id. at 543. That is precisely the violation the
government has alleged in this action, and $90,311 is the
precise amount it seeks to recover, exclusive of double--
damages and costs. (R—1—1 — 5,6).
19
1992-02-10 10=38 205 254 1500 GORDON SIL-BERMAN w I GG i NG Gnli_D;a 0 <J
Bailes seriously distorts the record in this case
ufd misunwers-dl-ds .vhar. napper.ed at ..ha hiring when he
alleges that "There is no indication that the administrative
court ever reached or needed to determine whether Mr. Bailes
had violated any agreement. The court only determined that
the office of inspector general of HUD had made a
determination, and made a demand with which Bailee had
failed to comply." Appellant's Brief at 18. In view of the
plain language of the Administrative Judge's opinion as
quoted above, this claim is specious. The Administrative
Judge did, in fact, find in the most explicit and foreeful
terms that Bailes had violated the Regulatory Agreement.
Finally, the Administrative Judge's finding that
Bailes had made unauthorized use of project funds was
essential to her determination that Bailes should be
debarred from doing business with the government for the
full five years proposed by HUD. "The decision is really
based on the financial [activities]...It is the financial
disregard and the [disregard of] financial duty that are
making me apply the five years." (R-l-4, Exhibit E-4 at
554-555). Accordingly, the last Pantex test has been met.
Bailes claims that the Board of Contract Appeals
has no jurisdiction "to resolve issues involving a contract
dispute." Appellant's Brief at 19. Aside from the C—
absurdity of stating that a Board of Contract Appeals cannot
resolve contract disputes, this claim is also wrong because
20
1932-02-10 10:38 205 254 1500 GORDON SILBC.RMAN U I GG i NS C
one of the stated grounds for which parties can be debarred
from doing business with HUD i* the violation of the terms
of a contract. 24 C.F.R. S 24.305(b). Obviously, the Board
of Contract Appeals has jurisdiction to determine if a
party, like Bailes, has violated a contract if it is to
debar that party for committing a contract violation. In
addition, Bailee had the opportunity to challenge the
jurisdiction of the Board of Contract Appeals before, during
and after the hearing and in his opposition to the motion
for summary judgment, but he did not do so. He has long ago
lost his chance to raise this issue.
C. The District Court Properly Awarded theDouble Damages Remedy Provided in 12 U.S.C.
1715s-»4a.
1. Bailes is a ‘’person" within the meaning Of
12 U.S C. S 1715z-4a.
In enacting 12 U.S.C. $1715z-4a, Congress provided
hud with a powerful remedy against project owners and their
affiliates who use project income in violation of their
regulatory agreements. To ensure the widest possible
rov^rage for this provision, Congress made it applicable
against "any person" who misuses project income and defined
"person" to include, among other parties, a project owner,
any partner of an ownership entity, and any agent of the*
owner. 12 U.S.C. S1715z-4a(a ) (2 ) .
21
1932-02-10 10:39 205 254 1500 GORDON SILBERMAN WIGGINS CHILDS 00
Bailee makes the astonishing claim that remedies
ce.nuvt be cvuiiiwd sgaxr.st iim undar 12 U-6.C. $ 1715?-4*?
because he is not a “person" within the meaning of that
provision. Appellant's Brief at 21-23. However, it has
already bean established that he is the general partner of
each of the four entities which own the housing projects
which are the subject of this action, (R-l—4, Exhibit E-4 at
540), and Bailes has never denied this. Clearly, therefore,
Bailes is a “partner of an entity owning the project" and a
"person" subject to the double damages remedy.
Moreover, Bailee readily admits that each of the
four projects was managed by Bailes Realty Company, and that
he is the "general manager" of that company. Appellant's
Brief at 7, B. He also admits that he personally took over
51,500,000.00 from the projects and then put most of it
back. Appellant's Brief at 8- In light of these
admissions, the conclusion is inescapable that in addition
to being a partner of the owners, he is also the owners'
agent and, therefore, a "person" under 12 U.S.C. S 17l5x-4a.
2. Double damages against appellant are
appropriate.
The parties do not dispute that the double damages
remedy was enacted on February 5, 1988 (Section 421 of the
Housing and Community Development Act of 1987, Pub. L.lNo *
100-242, 101 Stat. 1913) or that., the last of Bailes' alleged
violations of the Regulatory Agreements took place more than
22
1992-02-10 10:39 205 254 1500 GORDON 3 ILBERMAN WIGGINS Cn I _DS 00
two years before that date. However, these facts alone are
far from dispositive. To the contrary, when fashioning a
remedy for illegal conduct, a court generally must apply the
remedy that exists at the time it makes its decision, even
if that remedy did not exist when the violations being
remedied took place. This is consistent with the
fundamental-principal that
a court is to apply the law in effect at the
time it renders its decision unless doing so
would result in manifest injustice or there
is a statutory direction or legislative history to the contrary.
ggadiey V , School fioflrrl pf the City of R i e h m » M r 416 U.S.
69S, 711 (1974). United States v. 861
F.2d 1234, 1238 (11th Cir. 1988); National Wildlife
gg d ^ atjop Y narrtr, 747 F.2d 616, 619-20 (iith cir. 1984).
Bradley creates a presumption that statutes will
flPPly retroactively and prescribes a two-step analysis to
determine if that presumption should be displaced. The
first step is to determine from the statute itself and from f
its legislative history if Congress intended it to have only
prospective application. The second step is to determine if
retroactive application would result in "manifest
injustice." This second step requires the court to review
three factors: (1) the nature and identity of the parties;
(2) the nature of their rights; and, (3) the nature of the
impact of the change in law upon those rights. Bradley. 416
U.S. at 711-21. None of these three factors alone is
23
1 532-02-1U 1U :4U 205 i:ou u u K L U I f ' i Ci i L D L ^ M n N V\J i 'O ’O i I M
determinative; if two of the three factors weigh in favor of
retros-tiv2 application, th* ctafcutt will 1* gito*j such
e f t e e t . United States v. Oakwood Downriver Medical Center.
687 F.Supp. 302, 307-8 (E.D. Mich. 1988). The central issue
in determining whether retroactive application will cause
manifest injustice is "whether the 'disappointment of
private expectations caused by the retroactive application
will outweigh the public interest in enforcement of the new
rule.'- id. quoting Dedham Water Co. v. Cumberland Farms
Efljry. In?., 805 F . 2d 1074, 1085 (1st Cir. 1986).
i
Therefore, the double damages remedy under
12 U.S.C. S 1715z-4a is fully available in this case unless
the Bradley analysis demonstrates that the presumption of
immediate application should be displaced. To date, there
have been no judicial decisions interpreting this provision
nther than one being appealed here. Nevertheless,
application of the Bradley analysis and reference to recent
cases involving increased civil penalties for violating the *
False Claims Act3 will clearly show that the double damages
remedy should be given full effect in this case.
Among other things, the False Claims Amendments Act of 1986,
N°' 99-562 S 2 > 100 Stat. 3153 (October 27, 1985) increased the d a m a g e s payable for violation of the False Claims Act,
U. * C* S 3729-33, from double to triple and increased the
required forfeiture from $2,000 to between $5,000 and $10,000.
24
1 332-02-10 10 M 0 205 254 1 500 GORDON SILBERMAN WIGGINS Cnli_DS U u
a. Statutory Direction and Legislative .History
T h e f irat step of t h e B r a d l e y analysis is to
determine if there is clear evidence of congressional
intent, either in the statute itself or in the legislative
history, that the statute is to apply prospectively only.
In this case, neither the statute itself nor its legislative
history even discusses this issue. 12 U.S.C. S 1715r-4a;
H.R. Conf. Rep. No. 100-426, 100th Cong., let Sees.
reprinted in 1987 U.S. Code Cong. & Admin. News 3458; H.R.
Conf. Rep. No. 100-122(1), 100th Cong., 1st Sess. reprinted
AD 1987 u.s. Code Cong. & Admin. News 3317; 133 Cong. R«C.
5 16607-23, II 12047-95 (daily edition December 21, 1987).
In the absence of such a discussion, Congress has expressed
no intention to limit its applicability, and the Bradley
presumption of retroactivity remains in place. Even if a
statute "does not explicitly recite that it is to be applied
to pending cases, it is to be given recognition and effect."
■Bradley, 416 U.S. at 715 citing Thorpe v. Housing Authority
of the Cltv of Durham. 393 U.S. 268 (1969).
However, the absence of relevant statutory
direction or legislative history does not end this step Of
the analysis. Implicit congressional intent to displace the
Bradley presumption may be found by examining the purposes
of the statute. In a case involving amendments to the EalBe
Claims Act, the Court found that “if the purpose of the
amendments would be furthered only by prospective
25
1332-02-10 10:41 205 254 1500 GORDON SILBERMAN WIGGINS Chili_DS 00
Anr>] inotion, it is reasonable to assume that Congress did
not intend for the amendments to apply retroactively."
United States V. Hill, 676 F.Supp 1158, 1167 (N.D. Fla.
1987) (emphasie in original). But, the Court went on to
find that the purposes of the amendments, including the
amendment increasing the penalties for violating the Act,
would be furthered by retroactive application and that there
was no evidence of congressional intent to limit their
effect. 1 4 . Similarly, the purposes of the double damages
provision chow that it is to be given full and immediate
effect..
Retroactive application of the double damages
remedy will serve several purposes. Not only will it allow
the government to recoup money it has actually lost through
fraud, it will also permit recovery of the costs of
detecting fraud v.— ch was committed prior to February 5,
1988, and of the costs of taking administrative action
against those who committed the fraud. In this case alone, ;
the government's expenses in the debarment proceeding
against Bailes and Bailes Realty Company were substantial.
The increased recovery of government money through
retroactive increase of civil penalties has been explicitly
endorsed as a valid legislative purpose. United States v.
Products, 7nr , 683 F.Supp. 1262, 1266 (N.d 7*
Wise. 1988). Another stated purpose is to "expand the
ability of the Secretary [of HUD] to deter the use of assets
2G
1332-02-10 10=41 205 254 1500 GORDON SILBERMAN WIGGINS Cfili_DS 005
and income of multifamily housing projects in violation of
the project's regulatory agreement." H.R. Conf. Rep. No.
100-426, 100th Cong. 1st Sees. 216, reprinted in 1987 U.S.
Cod© Cong. & Admin. News 3513. The court in Hill recognized
that retroactive application of increased penalties might
indeed deter future violation of the False Claims Act. 676
F.Supp. at 1167.
remedy w i l l b o plainly be furthered by retroactive
application, coupled with the silence of the statute and the
legislative history, shows that there is no Congressional
intent whatsoever to limit its effect.
legislative history indicates that the statute should be
applied retroactively, "the court must look to the factors
enumerated in Bradley to determxne whether retroactive
application would result in 'manifest injustice.'"
LlmLpd st-atey Sk •— R ° — McCoy v._California Medical Review.
723 F.Supp. 1363, 1368 (N.D. Cal. 1989). Accord.
Kelsoe v. Federal CfPP Insurance Corp.. 724 F.Supp. 448
(E.D. Tex., 1988); United States v. Ettrick Wood Products.
2nc_̂ , 683 F.Supp. at 1265. Here, none of these three c..
factors support a "manifest injustice" exception to the
Bradley presumption. Moreover, any disappointment of
defendants' private expectations caused by the retroactive
The fact that the purposes of the double damages
b. Manifest Injustice
Where neither the statutory language nor
27
1932-02-10 10:42 205 254 1500 GORDON SILBERMAN Ui I GG I NO o'liL.uo UG
apolication of the double damages remedy is greatly
outweighed by the public inierest: in pievtAting fraud
against the government, particularly by those who benefit
substantially from the program* they have defrauded, and in
enhancing the recovery of government money lost through
fraud.
i. Nature and Identity of the Parties
The Supreme Court has stated that in contrast
to "mere private cases between individuals," cases which
involve "great national concerns" must be decided "according
to existing law." Bradley. 416 U.S. at 717-19, quoting
united States v . Schooner Peggy. 5 U.S. (1 Cranch) 103, 2
L.Ed. 49 (1801). Under Bradley, a court should determine if
great national concerns are involved by identifying the
parties.
Here, the partis/6 are the federal government
and, opposing it, an individual who has participated
directly or indirectly in a federal housing program
administered by HUD. Under this program (found at Section
221(d)(4) of the National Housing Act, 12 U.S.C.
S 17 15J.d( 4 ) , HUD has enabled the defendant to build, own,
and manage four housing projects by providing over
$5,500,000 in mortgage insurance. Although the stated and
primary purpose of the program is to assist private industry
in providing housing for low ar/', moderate income families
and displaced families, 12 U.S.C. S 17151(a), the defendant,
28
1332-02-10 10-42 205 254 1500 GORDON i> iLDC-RMhN wn
ns part-owner and operator of the projects# has also received
substantial benefit from the financial risk taken by the
government.
fraud in federal housing programs i6 a great national
concern. In fact, when it passed the Housing and Community
Development Act of 1987, which included the double damages
provision at Section 421, Congress stated that it expected
HUD to ’use all legal remedies available to protect FHA from
fraudulent practices." H.R. Conf. Rep. No. 100-426, 100th
Cong. 1st Sees. 214, reprinted in 1987 U.S. Code Cong. &
Admin. News 3511. Fraud against HUD not only exposes the
government to financial losses and insurance risks beyond
those anticipated by Congress, but also prevents low income
tenants from receiving the maximum benefit from the
investment of federal funds. There is an even greater
public interest in preventing fraud by parties like Baile6
who have already received significant benefits from the
program they are accused of defrauding. Moreover, the
enactment of a double damages remedy is a further expression
of Congress’ specific and long-standing concern over misuse
of project funds. For example, the former Section 239(b) of
the National Housing Act, Pub. L. No. 90-448 S 302, 82
it goes without saying that the prevention of
29
1392-02-10 10=43 205 254 1500 GORDON SILBERMAN WIGGINS CHIl_DS Ou
?06 (August 1, 1968 )4, provided criminal sanctions for
•n owner who violii *» * p"> ’‘jart'A RegultOo/y Agi*»amnnt in
this way.
Plainly, this is not a "mere private case
between individuals” or one in which the private
expectations of the defcndantc take precedence over the very
significant public interest. Bailes admits that this is the
case. Appellant's Brief at 27. As such, the first of the
three Bradley factors favors retroactive application of
12 U.S.C. S 1715z-4a.
ii. The Nature of the Parties' Rights
The seeond Bradley factor also favors
retroactive application of the double damages remedy. That
factor requires the court to determine if retroactivity
"would infringe upon or deprive a person of a right that had
matured or become unconditional.” Bradley. 416 U.S. at 720.
It is well established that parties have no "matured" right
to imposition of a particular level of damages against them r
for violation of the False Claims Act. Kelsoe v. Federal
Crop Insurance Cor-p. . 724 F.Supp. at 451; United States Ex.
R&l- .McCoy v, California Medical Review. Inc . . 723 F.Supp at
1369> United States v. Oakwood Downriver Medical Clinic. 687
F.Supp. at 307; United States v , Ettrick Wood Products.
4 Section 239(b) was deleted by Section 416(c)(3) of the
Housing and Community Development Act of 1987, Pub. L. No.
100-242; 101 Stat. 1908 (February 5, 1988) and Section 254 of the National Housing Act was added.
30
1992-02-10 10:43 205 254 1500 GORDON o ILBERMAN UllGGINS i ._lw ̂ u u
Inc . 533 F.Supp. at 1266; United States v . Hill, 676
F.Supp. at 1169. Likewise, defendants have no "matured"
right to a specific penalty for violation of their
Regulatory Agreements.
These cases are consistent with the general
rule that "changes in statute law relating only to procedure
or remedy are usually held immediately applicable to pending
cases." Turner v. United States. 410 F.2d 837, 842 (5th
Cir. 1969). Accord, United States v, Fernandez-Toled£, 749
F.2d 703, 705 (11th Cir. 1985); Hastings v. Earth Satellite t
C o m . . 628 F. 2d 85, 93-94 (D.C. Cir. 1980); united States _jy_,
vanella. 619 F.2d 384, 385-6 (5th Cir. 1980). This is
because there is no matured right to any particular remedy.
Even when some substantive rights may be affected, a new
statute will apply if "the predominant purpose . . . is
procedural and remedial.. United States v. Mechem. 509 F.2d
1193, 1196 (10th Cir. 1975).
The case of Bennett v. New Jersey. 470 U.S.
632 (1985), cited by Bailes at p. 29 of his brief, adds
nothing to this discussion. As the excerpt cited by Bailes
demonstrates, Bennett involved a substantive change in an
existing statute rather than the creation of a new remedy.
Kelsoe v. Federal Crop Insurance Corp.. 724 F.Supp. at 449.
That distinction alone makes Bennett irrelevant to the facts
here .
31
2 0 5 254 1 500 GORDON SILBERMMN NIGG iN^ O n i1392-02-10 10:44
Bailes claims that retroactivity would
infringe on his allegedly matjrod and unconditional right
under the Regulatory Agreements to have HUD seek against him
only those remedies which are specifically mentioned
therein. Appellant's Brief at 28. Once again, he has
completely misread the relevant documents, and he has no
such right.
Paragraph 14 of the Regulatory Agreements
(R-l-l, Exhibits A-Dj describes certain remedies that HUD
may pursue if the owners do not comply with their
obligations. However, this provision does not in any way
prevent HUD from seeking other remedies. Instead, paragraph
14 xs explicitly and purposely open-ended, permitting HUD to
(d; Apply to any Court, State or Federal, for
specific performance of this Agreement, for an
injunction against any violation of this
Agreement, for the appointment of a receiver to
take over and operate the project in accordance
with the terms of this Agreement, or for such
Other relief qs _may be appropriate, since the
injury to the Secretary [of HUD] arising from a
default under any of the terms of this Agreement ;
would be irreparable and the amount-of the damages
would be difficult to ascertain. (Emphasis added.)
For this reason, Bailee has no right, matured or otherwise,
to insist that HUD limit the remedies it can seek against
him. To the contrary, the Regulatory Agreements give HUD
the
w i l l
the
explicit right to seek any remedy against Bailes tltet
best effectuate the purposes of the program under which
projects were financed and protect the federal
investment in those projects. Thus, retroactive application
32
13^2-02-10 10:44 205 254 1500 GORDON SILBERMAN WIGGINS Chi^DS
of the double damages remedy will not unjustly infringe on
any right currently available to Bailes.
iii. Nature of the impact of the Change in
Law upon the Parties' Rights
Under the third Bradley factor, manifest
injustice will result if a statute imposes new and
unanticipated obligations without notice and an opportunity
to be heard. Bradley. 416 U.S. at 720. Here, 12 U.S.C.
S 17i5r-4a imposes no such obligation.
In Bradley, the Supreme Court found no
manifest injustice where a statute imposed "no change in the
substantive obligation of the parties." 416 U.S. at 720.
This reasoning is equally applicable here because the double
damages remedy does not alter or diminish defendants'
substantial rights. 12 U.S.C. S 1715z-4a does not prohibit
conduct that was previously permitted by the Regulatory
Agreements, nor docs it impose any additional duties under
those agreements; it merely increases the measure of damages .
that result from violation of defendants' obligations.
Similarly, the increased penalty under the
False Claims Act "does not impose an additional duty on
defendants. It merely changes the measure of damages that
result from a violation of the Act." United States v.
£t.tgjck wgPd Products, Inc.. 683 F.Supp. at 1266. Accord.
United States V . oakwood Downriver Medical Center. 687
F.Supp. at 307 (False Claims Act Amendments "do not alter
liability or change conduct previously determined lawful.").
005
33
1392-02-10 10:45 205 254 1500 GORDON SILBERMAN WIGGINS Cm Il-DS Gu
In Hill. the eourt also stated that the third
Brad 1 fry factor would not support a finding oi manifest
injustice 'without a plausible suggestion of likely
significant and justified reliance on the prior law." 676
F.Supp. at 1170. Accord. Kelsoe v. Federal Crop Insurance
Corp.. 724 F.Supp. at 452; United States v. Pani. 717
F.Supp. 1013, 1017 (S.D. N.Y. 1989). in the present case,
Bailes alleges for the first tine in his appellate brief
that he "relied upon the [Regulatory Agreement] contracts in
making his decision to expend the funds which are currently
at issue." Appellant's Brief at 25. This claim, however,
is a transparent fabrication.
Based on Bailes' own statements, the
Administrative Judge found that he took the project funds
because h© no longer felt himself bound by the Regulatory
Agreements after HUD had refused to grant a rent increase
that he had requested. (R-l-4, Exhibit E-4 at 549-550).
Now, he claims the exact opposite by stating that he took
the money precisely because he felt that the Regulatory
Agreements were still in effect. Not surprisingly, he
provides no proof for his assertions. The only way to
credit such a claim would be to hold that Bailes felt that
HUD was bound by the Agreements but that he was not. His
apparent lack of understanding of basic contract law is
surprising in view of the fact that Bailee attended law
school Exhibit E-4 at 551). In addition, he is
34
1392—0^— 10 10=45 205 25h 1 5 u u O u k D L JN Ci i i_ D L .r t f “l^ rN m i u u . i \ c
••topped by the Administrative Judge's finding from
asserting a new explanation for his behavior.
Finally, Bailee contends that retroactive
application of the double damages remedy would impose an
unanticipated obligation on him because he could not
reasonably have foreseen in 1979 that Congress would have
enacted such a remedy in 1988. Appellant's Brief at 28-29.
But it is well established that all contracts with the
government are subject to subsequent legislation by
Congress. The Supreme Court stated very clearly in Bowen v.
Public Agencies Opposed to social security Entrapment. 477
U.S. 41 (1986) that
While the Federal Government, as sovereign, has
the power to enter contracts that confer vested
rights, and the concomitant duty to honor those
rights, we have declined in the context of
commercial contracts to find that a "sovereign
forever waives the right to exercise one of its
sovereign powers unless it expressly reserves the
right to exercise that power in" the contr'^t.
Rather, we have emphasised that "without regard to
its source, sovereign power, even when •
unexercised, is an enduring presence that governs
all contracts subject to the sovereign's
jurisdiction, and will remain intact unless
surrendered in unmistakable terms." Therefore,
contractual arrangements, Including thoaa to which
a sovereign itself is party, "remain subject to
subsequent legislation" by the sovereign.
477 U.S. at 52 (citations omitted).
This
contract is part of
over which Congress
amend. id* at 55.
concept is clearly applicable where the
a regulatory program created by Congress
has retained ita power to modify or
Accord. Orreqo v. HUD. 701 F.Supp.
35
1332-02-10 10:46 205 £54 1500 GORDON SILBERMAN NIGGI NS Chli_DS uo
• 384, 1397 (N.D. 111. 1988). Bowen. is particularly
instructive because it recognizes Congress' power to change
substantive contractual rights as well as the remedial
rights involved here. In view of Congress' continuing right
to alter its programs, both substantively and rexnedially, to
meet changing needs, Bailee simply cannot claim that the
enactment of the double damages remedy was “unanticipated"
as that term is used when applying the Bradley test.
3. The double damages remedy does not violate ex
post facte restrictions.
In Louie Vuitton S.A.-jy, Spencer Handbags Coro,.
765 F.2d 966 (2d Cir. 1985), the Second Circuit Court of
Appeals held that remedies under Section 1503(2)(B) of the
Trademark Counterfeiting Act of 1984, 15 U.S.C. S 1117(b),
which were enacted eleven days before the start of trial
should not be replied retroactively. That law amended an
earlier statute to make mandatory a treble damages remedy
which had previously been discretionary. The court chose to
interpret the new act prospectively in order to avoid
constitutional questions arising from the ex post facto
clause and the due process clause of the Fifth Amendment.
Bailes mistakenly believes that Vuitton is applicable here.
The Vuitton decision does not in any way alter the
validity of the Bradley analysis which was used by the
District Court in this case. Vuitton does not involve the
federal government nor does it even discuss Bradley, let
36
why it is inapplicable to the facts in that case.*» ̂ •" V* « » *«» A w • • w W « « W A
For these reasons alone, Vuitton has no relevance. Beyond
that, the Trademark Counterfeiting amendments differ
markedly from the double damages remedy and the False Claims
Act amendments because, as Bailes admits at p. 33 of his
brief, they were intended to be punitive and not
compensatory. The double damages statute, on the other
hand, is at least partly compensatory because it enables HUD
to recover costs expended in sanctioning those who violate
their regulatory agreements as well as the audit and legal
costs specifically authorized in the statute. 12 U.S.C.
S 1715z-4a(c). In this case, it enables HUD to recover the
substantial costs of the four-day administrative hearing and
related expenses.
Another distinction between this case and Vuitton
is that the latter is merely a dispute between private
parties while this case involves a great national concern.
Even under the Bradley analysis, the Vuitton court could
have found manifest injustice in applying sanctions
retroactively in an entirely nonpublic case. As shown
above, the same analysis favors retroactive application here.
Bailes incorrectly asserts that the double damages
statute, like the statute in Vuitton. is an amendment to an
earlier, less penal provision. Appellant's Brief at 33-35.
The double damages provision is not an amendment to
anything; it was created by Congress as a brand new remedy. The
37
1332-02-10 10=47 205 254 1500 GORDON SI l BERMAN wiGGiNS ^ni<_Dcs
••■H i>r provision referred to by Bailee is a criminal
statute, the former Section 239(b) of the National. Housing
Act which was deleted by Section 416(c)(3) Of the Housing
and Community Development Act of 1987, Pub. L. No. 100-242,
101 Stat. 1908 (February 5, 1988). At the same time it made
this deletion, and in the same section of the statute,
Congress added another criminal statute which it designated
as Section 254 to the National Housing Act. That provision
specifies criminal penalties for parties who use project
income for purposes other than to meet actual and necessary
project expenses when the project loan is in default or when
the project has no surplus cash. Section 416(b), Housing
and Community Development Act of 1987, eupra.
In contrast, the double damages provision is a
purely civil remedy which was added in Section 421 of the
Housing and Community Development Act of 1987, a completely
different section, and which was not specifically designated
for inclusion in the National Housing Act. Thus, if there
was a replacement for the remedies contained in Section
239(b), as Bailes suggests, they are found in Section 254
and not. in the double d a m a g e s statute. Since 12 U . S • C .
S1715z-4a is not a successor to any previous statute, it
does not raise the ex post facto question
presented in Vuittor . .
The concerns expressed in Vuitton about the ex
post facto provision are not applicable here simply because
38
1392-02-10 10:47 205 254 1500 GORDON SILBERMAN WIGGINS Cni^DS uv-
+ ho statutes involved, although superficially similar,
are actually quite different. The double damages statute is
much more closely analogous to the False Claims Act
Amendments, and the cases cited above which permit
retroactive application of increased penalties for violating
that statute provide the most compelling guidance for
deciding the issue in this case.
39
13 ? 2 — 0 2 -10 10=48 205 254 1500 GORDON SILBERMAN WIGGINS ChILDS 005
CONCLUSION
For the foregoing reasons the decision of the
District Court is due to be affirmed.
Respectfully submitted,
FRANK W . DONALDSON
United States Attorney
'P & Q j t d L f i k r
ROBERT P. BARCLIFT
Assistant United States Attorney
40
1322-02-10 10=48 205 254 1500 GORDON SILBERMAN WIGGINS CHILDS 005
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing brief has
been served on the appellant by mailing a copy to his attorney:
Honorable Ralph J. Bolen, 423 Frank Nelson Building, Birmingham,
Alabama 35203, this the Sk day of June, 1990.
R d b v c t £ f o & K c i l l L
ROBERT P. BARCLIFT 9
Assistant United States Attorney
u 7-COP ■ • • •. S- **-
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>183
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John R. Dunne
Assistant Attorney General
Paul F. Hancock
Joseph D. Rich
Christopher T. Shaheen
Attorneys
Housing and Civil Enforcement Section Civil Rights Division
United States Department of Justice P.O. Box 65998
Washington, D.C. 20035-5998 (202) 514-4753
Stephen M. McNamee
United States Attorney
Acapulco Building
110 S. Church Street
Tucson, Arizona 85701
(602) 629-6511
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
TUCSON DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
v.
PRESIDIO INVESTMENTS, LTD.
and EDWARD SANDQUIST,
Defendants.
)
CIV-90-0063-TUC-ACM
MEMORANDUM OF THE UNITED
STATES IN OPPOSITION TO
DEFENDANT'S MOTION To DTSMTfifi
On June 13, 1991, defendant Edward Sandquist filed a motion to
dismiss this action on numerous grounds, including lack of
jurisdiction.A/ The United States hereby responds and contends
that defendant's motion is without merit and should be denied.
I. STATEMENT OP T*7 CAP?
A. FACTUAL BACKGROUND OF THIS ACTION
Janet Blair, the party on whose behalf the United States
filed this action, moved into the Presidio Apartments, managed
and partially owned by defendant Sandquist, in September 1987.
Shortly after she moved into her apartment, Ms. Blair was
subjected to the first of several unwanted physical sexual
advances by Mr. Sandquist when he grabbed and kissed her.
Several weeks later, Mr. Sandquist again grabbed Ms. Blair and
kissed her. The third and most serious physical sexual advance
occurred in late December 1987 in the kitchen of Ms. Blair's
apartment. On this occasion, Mr. Sandquist grabbed Ms. Blair and
forcibly kissed her causing the inside of her lip to be cut and
bloody and her neck to be bruised.
Defendant claim that the Uniced States laeltc
this case is based primarily on arguments that the^claim is ^
barred by the statute of 1 linitatio^Tunder £ S Ac? a^d that
th wforc-ent provisions of the emended Act cannot e ^ v
ju r L ° 5 i ^ I ^ L \ % ? ^ k%°SedrmoreH? n h % r 'me?i?“S:ft^ cl ' th
appropriate5 a claim of lac* of j L i S d i S i S “ ’not
C at? or the S S S . ^
generally must be for failure to state a claim «
jurisdiction. * Marine Coatings of A l a b a m a . jnA ,, United*"11 °f
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O J
action based on pre-Amendments discrimination.12/ We too believe
that this is the central issue raised by defendant's motion and
address it in Part B below.
B* THE ENFORCEMENT PROVISIONS OF THE FAIR HOPSTNfi
AMENDMENTS ACT OF 1988 APPLY TOTHIS AOT-mw
The essence of the defendant's argument, then, is that HUD
should not have retroactively applied the current procedural and
remedial provisions of the amended Fair Housing Act to a
complaint which was pending when the amended Act became effective
and is based on pre-Amendments discrimination.12/ In defending
this application of the law, the United States merely asks this
Court to honor the well-established principle that *a court is to
apply the law in effect at the time it renders its decision,
inless doing so would result in manifest injustice or there is a
L2/ At page 10 of his Memorandum, defdendant states that •it s «=r&gssrs ilk
wheth« ^ ™
irrer the Amendments went into effect ^
n l9ir°n?hereforee ^ °f Di*«i.nination
ot been resolved and rlnfinlS p 4 n d ^ a ^ = ™ pl«int cleeriy had Ct went into effect. P lng at the tlme the amended
12
statutory direction or legislative history to the contrary."
Bradley v, Richmond school Board. 416 u.s. 696, 711 (1974). see
AlS2 Sgldfl V . . SalpaH-gtgy^dPrina 4_cp. 855 F 2d f n - n fqth
I Cir* 1988); DeSurules v. I.N.S.. 833 F.2d 861, 863 (9th Cir.
1987); Pf Idaho V. Howmat Turbine Co.. 814 F.2d 1376, 1378
(9th Cir. 1987); gfljppbell v. United States. 809 F.2d 563, 575
(9th Cir. 1987).
Defendant contends that this Court should abandon that
tradition in this case and suggests that the procedural and
remedial provisions of the amended Act cannot be applied to
conduct which occurred prior to enactment of the Act. Defendant
fails to acknowledge that the only court which has addressed the
question of application of the procedural and remedial provisions
of the amended Act to pre-Amendments conduct has held that such
application is proper. United gtates v. Rent , 734
F. supp. 474 (S.D. Fla. 1990). m Bent America, the defendants
contended, similar to the contention made by the defendant here,
that the enhanced penalty provisions of the amended Act could not
apply to discriminatory practices which occurred before enactment
of the Amendments. The court rejected the defendants' claim,
holding that retroactive application of the remedial provisions
was not -manifestly unjust- under the t o d ley standard and did
not violate the Due Process or Ex Post Facto provisions of the
United States Constitution. Bejt America, 734 F. Supp. at 480.
This court should follow the reasoning of the Bgpt America court
and apply the enforcement provisions of Section 812 of the
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amended Act to the defendant's pre-Amendments conduct in this
case.
As B?nt Ajnerjc? and Bradley make clear, a statute will be
assumed to apply to cases pending at the time of its passage
unless there is a 'clear indication' that it is not to apply.
£radl?y/ 416 U.S. at 712—16. There is no such clear indication
in this case. In fact, the regulations promulgated by HUD
implementing the Fair Housing Amendments Act explicitly state
that the new remedies and enforcement procedures are to apply
retroactively:
The 1988 Amendments (except as to discriminatory
housing practices involving handicap and familial
status) do not create new legal duties or
responsibilities. Rather, they merely provide a
new process by which aggrieved persons may enforce
existing rights protected under Title VIII. I.e. the
1988 Amendments create new procedures for the filinq
investigation and conciliation of complaints
concerning discriminatory housing practices and
strengthen the remedies available to victims of
housing discrimination by providing for administrative
hearf-n9s/ and by increasing the availability of civil
penalties, attorney's fees, etc. Because the new
remedies and enforcement procedures do not affect
vested rights, retroactive application is entirely
a S * n a h n ^ ' ? 'q • ' sup^a, (increasedavailability of attorney's fees); Friel v. Cessna
ofriimita^’ ' 751 F'nd 1037 (9th Cir* 1985) (extension ulons period); Montana Power Cn, v. Federal
?nWrr ■ K°rJ,i ' 445 F'2d 739 (D-C- cir- 1970) (change in t r i b u n a l ) ; and grummjtt v. S t u r g e o n Bav Winter
pro c e d u r e ^ ^ F'2d 564 (?th Cir* 1965) (chan9e in
54 Fed. Reg. at 3259 (1989); 24 C.F.R. Ch.I, Subch. A, App.I,
p.577. As the agency charged with administering the Fair Housin
*ct, HUD's interpretation of the statute is entitled to
considerable deference. Gladstone v. Village of M i w n n H 441
14
U.S. 91, 107 (1979); l£fll£jgflll££ V. Metropolitan Life Insurant
409 D.S. 205, 210 (1972).
Without any indication to the contrary, the current law Bust|
| &PPly unless it would be manifestly unjust to do so. In
I determining whether retroactive application of a new law is
manifestly unjust,* a court is to consider (a) the nature and
identity of the parties, (b) the nature of their rights, and (c)
the nature of the impact of the change in law upon those rights.*
Bradley, 416 U.S. at 417; Goida. 855 F.2d at 630.
The first consideration, 'nature and identity of the
parties*, focuses on whether the action is a private case between
individuals, or a case involving 'great national concerns.*
United States v. h o o p e r Peggy, 5 U.S. 103 (1801) ; Campbel 1 - 809
F.2d at 575; Beg u i l e s , 833 F.2d at 863. When a statute
manifests important national policy, the court must respect that
policy and apply it. As the Court stated in Schooner
in mere private cases between individuals, a
court will and ought to struggle hard against
a construction which will, by retrospective
operation, affect the rights of parties, but
in great national concerns, where individual
rights... are sacrificed for national purposes,
laws C°Urt °USt declde acc°rding to existing
5 U.S. at 10. The Fair Housing Act seeks to eradicate
discrimination in housing. a clear national priority.H/ Housing
discrimination litigation is qualitatively different from -mere
th\s pco ^ y sof " sr;^teS i ; £ r t ! ° ^ i £ - s s r
United^states!*1^ 1U*s!°nS§3 6o l . housi^ throughout the
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private cases between individuals.* Rent America. 734 F. Supp.
at 479. As the court in Rent America noted in reference to
enforcement of the Fair Housing Act, 'Certainly even the
Defendants cannot deny that the present case is of great national
concern and, therefore, of the type anticipated by the Supreme
court in Schooner Peggy and more recently affirmed in Bradley.*
Bgpt America, 734 F. Supp. at 479. See also DeGurules. 833 F.2d
at 863.
The second Bradley consideration, the nature of the rights,
refers to whether the new legislation affects any rights that
have 'matured or become unconditional.' 416 U.S. at 720. Here,
defendant's discriminatory conduct was unlawful before the
effective date of the 1988 Act, and he has no 'right' to avoid
new penalties or administrative procedures for conduct which was
unlawful at the time it occurred. gee Rent America. 734 F. Supp.
at 480. Moreover, the mere fact that Ms. Blair's private cause
of action may have expired prior to effective date of the
/vmendments did not result in a 'matured' or 'unconditional' right
to avoid any enforcement action by HUD. At the time that the
statute of limitations for Ms. Blair's private cause of action
may have expired, the Amendments had been passed and there was
far from any certainty on the part of the defendant, nor Ms.
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Blair,15/ that enforcement action by HUD pursuant to the
Amendments would not occur as the enforcement process was
completed.
The third firaflleY consideration requires an examination of
the impact, if any, that the change in law may have upon existing
rights. 416 U.S. 720. It 'stems from the possibility that new
and unanticipated obligations may be imposed upon a party without
notice or an opportunity to be heard.' jfl. if the law would
have caused the defendant to change his conduct had he known of
his obligations, a court is more likely to find manifest
injustice in subjecting him to enforcement of the new law.
The amended Act, as applied to the defendants, did not affect the
prohibition against sex discrimination that existed at the time
the illegal activity; rather it only expanded the enforcement
*nd remedial provisions of the Act. Surely, defendant does not
suggest that he would not have sexually harassed Ms. Blair if he
^ d known that new administrative procedures would be available
:o persons who filed complaints with HUD, when he was liable for
;uch actions at the time that they were committed.
™ ™ e e" = ? v ct;oncieariy » »■lair's private action l.y h i L 2 „ °n Ms'n t u well after the Acendoen-s f pending
n such circumstances n a v von, 1 effect m March, 1989.
ecided not to initiate a Dri vatl7* ^ 11 haV* been tha* Ms- Blair ct because of her expec-a-ion tha*- m m 0 unfer Bair Housing
er behalf. In deteSInina C°Uld take such action onhe Act is 'manifestly umust * £etroactive application of
hat, if the enforcementprocedureeis°not C°nSider
- *h. inability to have her f e d e j a l ^ i / h ^ g S
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In sum, the considerations set forth in Bradley all support
applying the remedial and enforcement provisions of the 1988 Act
| to the defendants. Such application will serve important public
interests and will not result in any injustice to the defendants.
Defendant also makes an argument based on the due process
clause which is very similar to his retroactivity argument. Due
process claims can only apply to vested rights, Weaver v
£ralmin, 450 U.S. 24, 30 (1981), and defendant can hardly argue
that he had a vested right to discriminate prior to the effective
date of the amended Act. at 25-26. Rent America . 734 F.
Supp. at 480 (applying the penalty provisions of the amended Act
retroactively and noting that 'Defendants [have] no vested right
to engage in discriminatory practices.'). m short, the factors
deemed important by the Bradley court reflect, to a large extent,
concern about due process rights. Therefore, by definition, any
retroactive application that passes the Bradley test, as is the
case here, cannot give rise to a due process claim.
Defendant cites only Campbell v. United 809 F.2d 563
(9th Cir. 1987), to support his due process claim. Yet, this
case does not include any due process analysis, and instead
applies the retroactivity analysis suggested by Bradley. More
importantly, contrary to defendant's argument, the analysis of
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the Campbell court supports the United States' position that the
enforcement procedures should be applied retroactively. iii/
C. XHIg ACTIQE-IS NOT BARRED By TArHEg
Perhaps recognizing that there is no applicable statute of
limitations under either the 1968 Act or the 1988 Amendments that
bars the HUD enforcement proceeding, defendant argues that HUD's
failure to follow certain procedural rules and its delay in
filing a charge compel this Court to dismiss this action.
Generally, the doctrine of laches does not apply to the
government when it sues to vindicate the public interest. United
v *— Qtp. , 588 F.2d 697, 704-05 (9th Cir. 1978), cert.
dsnisd, 442 U.S. 917 (1979); Bgstwick Irrigation pjst. v. nPnt
gf En<j?rqy, 9 0 0 F.2d 1285, 1291-92 (8th Cir. 1990) ; Lea
In Campbell, a private plaintiff had obtained a •iudmAOT,*- against the United States under the Federal Tnr-r m •
Plaintiff argued that the court s h o u l d k ,
statute, which passed during the pendency of his claii for
extends this reasoning to find Manifest iniultic^in i"'?orrectly
I h E ^ | e l l ; the court d e t e r m i n e d S t c o m S a S n S S s t - * 5*'
found no manifest iniustlc^becau* °f national c°ncern, but still
be burdened b y S t S c S e ' a p p U c r t i o n ^
855 F.2d at 630 (citlngrcamDbe°aC^iVe-TafPll?ilt10'}: *
retroactive application of the amenild‘Act■ I i°9 y'
enforcement provisions does not violate the Due Pro«ss"clause.
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CONCLUSION
For the foregoing reasons, the court should deny defendant's
motion to dismiss.
By:
Respectfully submitted,
John R. Dunne
Assistant Attorney General
Civil Rights Division
aul F. HanccPaul F. Hancock
Joseph D. Rich
Christopher T. Shaheen Attorneys
U.S. Department of Justice
Civil Rights Division
Housing and Civil EnforcementSection 1
P.o. Box 65998
Washington, D.C. 20035-5998 (202) 514-4753
*
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION
UNITED STATES OF AMERICA, CASE NO. 89-6188-PAINE
Plaintiff,
v.
RENT AMERICA, INC.,
SKYLINE RENTAL SYSTEMS, INC.,
JAY HOWARD MAGID, AND
HAL EUBANKS,
Defendants.
___________________________________/
RESPONSE OF THE UNITED STATES TO DEFENDANTS' MOTION TO STRIKE
CLAIMS FOR DAMAGES AND PENALTIES
I. INTRODUCTION
The United States filed this action on March 13, 1989 to
enforce the provisions of the Fair Housing Act (Title VIII of the
Civil Rights Act of 196S, as amended by the Fair Housing
Amendments Act of 1988), 42 U.S.C. §53601 sX >e°• The complaint
alleges that the defendants, who own and operate residential
apartment complexes in the Southern District of Florida, have
engaged in a pattern or practice of discrimination against
persons on the basis of race or color in the rental of such
dwellings in violation of Sections 804(a) - (d) of that Act, 42
U.S.C. §§3604(a) - (d). (Complaint, p.2.) Specifically, the
complaint alleges that the defendants have engaged in a pattern
or practice of discrimination by:
(a) Refusing to rent apartments and otherwise making
dwellings unavailable to black persons because of
race or color, in violation of 42 U.S.C. 53604(a);
)
(b) Imposing different terms and conditions in the
rental of dwellings on account of raca or color,
in violation of 42 U.S.C. 53604(b)?
(c) Making statements with respect to the rental of a
dwelling thu* ini -.ate. a pi ̂ f*renc*, limitation
or discrimination on the basis of race or color,
in violation of 42 U.S.C. 13604(c)? end
(d) Representing to black persons because of race or
color that certain dwellings are not available for
inspection or rental when such dwellings are in
fact available, in violation of 42 U.S.C.
§3604(d).
In the March 13 complaint, the prayer for relief sought
injunctive relief pursuant to 42 U.S.C. 53614(d)(1)(A), "monetary
damages" for victims of the discrimination pursuant to 42 U.S.C.
§3 6 1 4 (d)(1)(B), and a civil penalty pursuant to 42 U.S.C.
§3614 (d) (1) (C). On April 21, 1989 the United States filed an
amended complaint which was designed to clarify the type of
monetary relief that was sought. The prayer for relief in the
amended complaint sought the same relief pursuant to 42 U.S.C.
3614(d)(1)(A) and (C) (i.e., injunctive relief and a civil
penalty) as that sought in t!'t- original complaint. However, the
provision seeking monetary damages for victims of the
discrimination was amended in order to set forth explicitly that
both compensatory damages for economic loss, emotional distress,
and deprivation of civil rights and punitive damages were being
sought pursuant to 42 U.S.C. 53614(d)(1)(B).
Since the filing of the complaint the parties have proceeded
with discovery on the liability as well as remedial issues.
During this discovery the United States has identified
* -approximately' fourteen persons that it claims are victims of the
2 -
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alleged discrimination of dafandants. On Octobar 6, 1989,
defandants filed a Motion to Strike those portions of the United
States' complaint which seek compensatory and punitive damages,
as well as a civil penalty. The basis for their motion is two
pronged. First, they argue that the portions of the amended Act
which authorize the United States to seek monetary relief, both
damages and civil penalties, cannot be sought retroactively for
discrimination which is alleged to have occurred prior to the the
%effective date of the amended Act, March 12, 1989. Second, they
assert that Section 814 of the amended Act limits the United
States' authority to seek monetary relief to seeking damages for
economic loss for victims of discrimination and civil penalties,
and does not authorize punitive damages or compensatory damages
fcr victims of discrimination in the form of emotional distress.
In seeking monetary relief in this case, the United States
merely seeks to avail itself of the newly fortified remedial
provisions of the Fair Housing Act. Discrimination in housing on
t'-e basis of race has been prohibited by the Fair Housing Act for
over 20 years. The Fair Housing Act, as amended and applied to
the defendants here, prohibits the same race-based conduct that
the 1968 Act prohibited. Accordingly, this case does not involve
any new substantive liability to which defendants are exposed for
the first time. Moreover, since the defendants, for some time,
have been potentially liable for the same monetary damages which
the United States seeks here, this case, and the amended Act
itself, do not increase the defendants' overall exposure to
3 I
liability for monetary damages for victim* of unlawful
discrimination.^/
Below, we set forth in detail the reasons that defendants
motion to strike our claim for monetary damages and civil
penalties is without merit. As way of introduction, we summarize
the manner in which the Fair Housing Act has been amended by the
Fair Housing Amendments Act of 1988. We then demonstrate (1)
that 42 U.S.C. 3614(d)(1)(B) of the amended Act authorizes the
Attorney General to obtain the actual and punitive damages that
ve have requested; and (2) that those portions of the amended Act
providing for such monetary damages and civil penalties may,
consistent with the statutory scheme, be applied retroactively to
unlawful discriminatory actions occurring prior to the effective
date of the amended Act; furthermore, retroactive application of
such remedial provisions does not contravene any constitutional
protections asserted by defendants.
II. TH- FAIP HOUSING ACT. AS AMENDED
Before addressing the specific arguments raised by the
defendants in their Motion, it is important to examine the manner
in which the Fair Housing Amendments Act of 1988 modified the
original Fair Housing Act enacted in 1968, and the reasons for
these changes. We start with a description of the enforcement
1/ Federal law (as set forth in both the Fair Housing Act of
1968 and 42 U.S.C. §1962)) has prohibited race discrimination in
housing for over twenty years, and has made available to private
litigants monetary damages in the form of punitive damages, and
compensatory damages for emotional distress and actual losses.
-See discussion, pp. 5, 28, footnote 15, below.
mechanism and remedial structure of the Fair Housing Act of 1968
as originally enacted.
Title VIII of the Civil Rights Act of 1968, 42 C.S.C.
§§ 3 6 0 1-3 6 1 9 , made it unlawful to discriminate in any aspect of
the sale, rental or financing of dwellings or in the provision of
brokerage services or facilities in connection with the sale or
rental of a dwelling because of race, color, religion, sex, or
national origin. Under the provisions of Title VIII, persons who
believed that they had been subjected to a discriminatory housing
practice had two options to obtain redress. Under Section 812 of
the Act, they could file a private action in federal district
court against the alleged perpetrators of the discrimination. If
a violation of the Act was found, relief available included
injunctive relief, actual damages, and up to $1,000 in punitive
damages. However, the $1,000 limitation on punitive damages
under the Fair Housing Act did not apply to fair housing cases
brought under the independent Civil Rights Act of 1866 (42 U.S.C.
§§1951-1982); ir such cases brought pursuant to this provision,
victims are entitled to punitive damages without any such
limitation. See, e.g., Karable v. Walker. 704 F.2d 1219, 1221
(11th Cir. 1983); Woods-Crake v. Lundv. 667 F.2d 1198, 1203-04,
n. 11 (5th Cir. 1982 ) .
Under Section 810 of the Act, 6uch persons could file a
complaint with the Secretary of Housing and Urban Development.
The Department was required to investigate each complaint and to
engage in informal efforts to conciliate the issues in the
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complaint. However, where theee informal efforts were
unsuccessful, Title VIII did not provide the Secretary with any
administrative mechanism for redressing further acts of
uiiscrimiiUtijn against an individual.
pursuant to Section 813 of the Act, when the Attorney
General had reasonable cause to believe that a person or group of
persons was engaged in a "pattern or practice" of discrimination,
he was authorized to bring a lawsuit in federal district court
against such person(s). The Act provided for relief in such a
suit consisting of "such preventive relief, including a...
permanent or temporary injunction, restraining order, or other
order against the person or persons responsible" for the pattern
or practice. However, prior to enactment of the Fair Housing
Amendments Act, the Attorney General was unable to secure legal
monetary relief for individual victims of housing discrimination
in a pattern or practice suit.
The appellate courts that interpreted the scope of relief
available to the United States in such cases under the 1968 Act
held that only equitable remedies were allowable. United States
v. Per.t-A-Home Systems of Illinois. 602 F.2d 795 (7th Cir. 1979)
United States v. Mitchell. 580 F.2d 789 (5th Cir. 1978); and
United States v. Lone. 538 F.2d 1151 (4th Cir. 1975) oerta
denied. 429 U.S. 871 (1976). Those courts ruled that legal
damages for victims of discrimination could not be obtained by
the United States in cases initiated pursuant to the pattern and
practice jurisdiction of the original 1968 statute. In arriving
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,t chi. conclusion, th. court. « - •“ * « “ »
language allowed tor only 'preventive relief (interchangeable
with injunctive or equitable relief), end on that ba.i. denied
legal monetary relief. However, these courts indicated that
equitable form, of monetary relief (e.9- restitution, unjust
enrichment, could be recovered by th. United State, pursuant to
the remedial authority granted by the Act.
The major purpose of the Fair Housing Amendments Act of 19B8
(Pub. L. 100-43 0/ approved September 13, 1988) was to strengthen
the enforcement provisions of Title VIII and to give the federal
government a greater and more effective role in fair housing
enforcement . V While the Act also substantively expands coverage
of the 1968 Act to prohibit discriminatory housing practices
based on handicap and familial status, the driving force behind
it was to strengthen the enforcement and remedial provisions of
the 196E Act. The federal enforcement mechanism under the 1968
Fair Housing Act had been criticized as ineffective and as
putting too much of the burden of. fair housing enforcement on the
private sector.
In shoring up the federel enforcement scheme, Congress hoped
to remove this burden from the shoulders of those leest able to
2 / . a House of Representatives Report 100-711, June 17,
■ ■ " i . :8.:,, am.ndm.n-e act of 1 9 M . pp. 16-17: 'Existing
i 'nl-«e=-.:ve because Itlacbs an effective
administrative enforcement mechanism, so Vj* *
can and will take an active role in enforcing the law.
- 7 -
t
b«ar it, and to grant auch paraon* aecaaa to tha aubatantial
resources of tha United States government. •*9*» H -R * R«P-
No. 711, 100th Cong., 2d Sess. 13 (1988) ('This bill eeeks to
*'iU tha . void I Lack t f an affective Title VTT- enforcement
mechanism: by creating an administrative enforcement aystem,
which is subject to judicial review, and by removing barriers to
the use of court enforcement by private litigants and the
Department of Justice'); Id*. at 16 ('Although private
enforcement has achieved success in a limited number of cases,
its impact is restricted by the lack of private resources, and is
hampered by a short statute of limitations, and disadvantageous
1 imitations on punitive damages and attorney's fees') (footnotes
omitted) ; Fair Heusinc Amendments Act of 1987-1--H^Arl ngs on fl-P-i
2 15S Before the Subcom.m. on Civil and Constitutional— RigfifcS—
the House Comm, or. the Judiciary. 100th Cong., 1st 5ess. 191
(1957) (comments of Representative Edwards) ('There is universal
and bipartisan agreement that the existing Fair Housing Act lacks
teeth and needs an effective enforcement system. By shifting
primary enforcement responsibility on to private persons, the
Federal Government currently has very little responsibility or
- 8 -
leverage to enforce the law. The question is how to bring about
effective change").2/
Under the new Section 813 of the Act, 42 U.S.C. S3613, a
private individual can still file his or her own lawsuit in
federal court alleging a violation of the Act. Section 3613(c)
of the Act, 42 U.S.C. 53613(c), provides for relief in such
actions and reads in pertinent part, as follows.
(c) Relief Which May Be Granted. — (1) In a civil
action under subsection (a), if the court finds that a
discriminatory housing practice has occurred or is about to
occur, the court may award to the plaintiff actual and
punitive damages, and subject to subsection (d), may grant
1 / See also, 134 Cong. Rec. S10556 (daily ed. August 2, 19els)
(statement of Senator Cranston) (need for enforcement
provisions); 134 Cong. Rec. S10467 (daily ed. August 1, 1988)
(statement of Senator Dole) ("In my view, a major reason the fair
housing law has not been more effective is that it relies on
voluntary conciliation and persuasion. In other words, a law
without its teeth. It does not have the clout necessary to stop
discrimination as it occurs and to assure that housing is still
♦^ere when a complaint is finally resolved"); Fair Rousing
Amendments Act of 19B7: Hearings on S. 558 Before the Subcomm^
nn the Constitution of the Senate Comm...— gn th* Judiciary, 100th
Cong., 1st Sess. 235 (1957) (statement of Henry Hain, Director,
Housmg Division, Pennsylvania Human Relations commission)
(improved enforcement authority 'crucial' to viuuims of
discrimination); 129 Cong. Rec. S625 (daily ed. January 26, 1983)
(statement of Senator Hatch)(stating that the Act would add
♦ ggWj. [the existing[ enforcement mechanism • .. the Attorney
General would be authorized to initiate actions on behalf of such
individual. For the first time, an aggrieved person would have
access to the resources of Government in pursuing complaints of
title VIII violations'); H.R. Rep. No. 865, 96th Cong., 2d Sess.
4 (1980)('The primary weakness in the existing law derives from
the almost total dependence upon private efforts to enforce its
provisions').
- 9
)
as reliaf, as the court deems appropriate, any permanent or
temporary'injunction, temporary restraining order, or other
order (including an order enjoining the defendant from
engaging in such practice or ordering auch affirmative
action as may be appropriate).
Thus, this provision ramoves the $i,o00 limitation thu- l.ad
existed for punitive damages that may be awarded.
The amended Act also significantly strengthened the
enforcement mechanism at HUD. Section 810 of the Act, 42 U.S.C.
§3610, provides that any person who believes that ha or she has
been subjected to a discriminatory housing practice may file a
complaint with the Secretary of Housing and Urban Development.
«pjje Secretary is required to make an investigation of the alleged
discriminatory housing practice, 42 U.S.C. 3610(a), and, to the
extent feasible, to engage in efforts to conciliate the matters
raised in the complaint at any time after the filing of the
complaint. 42 U.S.C. §3610(b).
In cases where the matters raised in a complaint cannot be
resolved by conciliation, Section 810(g) of the Act requires the
Secretary to determine whether reasonable cause exists to believe
a discriminatory housing practice has occurred or is about to
occur. Where the Secretary makes such a determination, the
Secretary must immediately issue a charge on behalf of the
aggrieved person for further proceedings under Section 812 of the
Act. 42 U.S.C. § 3 610(g) .
The amended Act provides two alternatives for the litigation
of such a charge. The first alternative provides for a hearing
before an administrative law judge. 42 U.S.C. 13612(b). Any
10
complainant, respondent, or aggrieved person, however, nay elect
to have the claims asserted in the charge decided in a civil
action in the appropriate United States district court. 42
U.S.C. 53612(a). If any person elects to have the case tried in
district court, the Act provides that the Secretary shall
authorize and the Attorney General shall commence and maintain a
civil action seeking relief under section 812. 42 U.S.C.
§ 3612(o).
Where an administrative law judge finds that a respondent
has engaged in a discriminatory housing practice, the Act
provides for the issuance of an order for such relief as iŝ |
appropriate, which may include actual damages, injunctive or
other equitable relief, and civil penalties. 42 U.S.C. §
3612(g)(3).A/ Where the court in an elected civil action finds
that a discriminatory housing practice has occurred or is about
to occur, the court may grant as relief any relief to which a
private litigant would be entitled in a private Fair Housing Act
action brought under Section 813(a) of the Act. 42 U.S.C.
53613(a).
Pursuant to new Section 814 of the Act, 42 U.S.C. 53614, the
Attorney General retains the 'pattern or practice' authority
which existed under section 813 of the 1968 Act. However, the
Act makes substantial changes in the relief available in such
A/ The amount of the penalty can vary from $10,000 to $50,000
depending upon the number of previous discriminatory housing
practices the respondent has been adjudged to have committed in
any administrative hearing or civil action permitted under the
-Fair Housing Act. 42 U.S.C. 5 3612(g)(3)(A)- (C).
11 -
}
actions (such as this ona) brought in tha name of tha Dnitad
States. Section 814(d) reads as follows:
(d) Relief Which May Be Granted in Civil Actions Under
Subsections (a) and (b). — (1) In a civil action under
subsectior (a) or fh) , the eor.rt—
(A) nay award such preventive relief, including a
permanent or temporary injunction, restraining order,
or other order against the person responsible for a
violation of this title as is necessary to assure the
full enjoyment of the rights granted by this title;
(B) may award such other relief as the court
deems appropriate, including monetary damages to
persons aggrieved; and
(C) may, to vindicate the public interest, assess
a civil penalty against the respondent—
(i) in an amount not exceeding $50,000, for
a first violation; and \
(ii) in an amount not exceeding $100,000,
for any subsequent violation.
Section 814(d)(1)(A) of the new Act tracks almost verbatim
the remedial language of Section 813 of the original Act, and as
discussed, suera. that language has been interpreted to allow
recovery of all forms of equitable relief in pattern or practice
cases, but not to authorize an award of legal monetary damages.
However, sections 814(d)(1)(B) and(C) provide important new
relief that the United States may seek and the court may award
which considerably strengthen the enforcement authority of the
United States in such cases. The issues before this Court arise
as a result of these new provisions.
12
III. ARS1k m c *
A. w rpgTIXWT TO *2 T3. S. C. <3614 (d) d > (B) ,—THS VMITEP STATES I g
S ^ S S tIep t S sfct p u n i t i v e PAIGES Ayp JCTPSNSiT Q W " a &SgES
t o r FWPTIONAL DISTRESS FOR VICTIMS OF UNLAWFUL
gvirsw oogH i vkbeb^ .
u . s . c . < 3 6 1 4 f al
In their motion to strike, defendants contend that the
•monetary damages" language of Section 814(d)(1)(B) should be
construed extremely narrowly to mean that the United States is
authorized by the amended Act to seek only out-of-pocket expenses
of victims of unlawful discrimination and is precluded from
seeking either punitive damages or compensatory damages for
emotional distress for such victims (Def. Memorandum, pp. 15-17).
Such a narrow reading of the amended Act is without merit.
Ar. examination of the following factors convincingly demonstrates
that the phrase "monetary damages" in Section 814(d)(1)(B) is
meant to include all forms of legal monetary relief (e.g.,
punitive damages, compensatory damages for emotional distress or
mental anguish, loss of civil rights, as well as out-of-pocket
monetary losses): (1) the plain statutory language of
§814(d)(1)(B), especially when read in conjunction with other
remedial provisions of the Act: (2) the dual Congressional goals
in passing the Fair Housing Amendments Act of providing a
stronger and more effective enforcement mechanism in the Fair
Housing Act, and avoiding duplicative litigation: and (3) the
special nature of pattern and practice cases. In sum,
defendants' very narrow reading of this provision would
improperly circumscribe the government's ability to enforce
- 13
effectively the amended Fair Housing Act, and frustrate the
purpose and goal of Congrass in authorizing tha Dnitad States to
seek such monetary relief.
. Lancuis'l I lL _££.* fill
Section 814(d)(1)(B) grants broad authority to tha court to
grant, in addition to the relief authorized by the equitable and
civil penalty sections (Sections 814(d)(1)(A) and (C)), the
relief it deems appropriate. Specifically, tha court 'may award
such other relief as the court deems appropriate, including
monetary damages to persons aggrieved* (emphasis added). The
term 'monetary damages* is used as an example of what relief may
be 'included* if the court deems such appropriate. There is no
indication in such language that there is any intent to limit the
type of monetary relief available pursuant to this Section. On
its face, therefore, the plain language of Section 814(d)(1)(B)
strongly supports a broad interpretation of the remedial
authority of federal courts in pattern and practice cases
intiated by the United States.
Moreover, when this provision is examined in light of the
remedial provisions applicable to actions initiated or brought on
behalf of aggrieved persons pursuant to the amended Act, there is
an even clearer indication that the term 'monetary damages* is to
be read broadly. As discussed supra. under the amended Act,
aggrieved individuals are provided the choice of bringing suit in
federal court (section 813), pressing their claims
administratively through the HUD enforcement process to
j •
14 -
)
enforcement before a HUD administrative law judge (section
8 1 2 (b)-(n)), or electing to have the Attorney General sue on
their behalf after HUD has investigated and issued a charge of
discrimination (section 812(a) and(o)).
Should the aggrieved individual bring a private action in
federal court under section 813, the Court can grant 'actual and
punitive damages* pursuant to section 813(c). Where the
aggrieved individual uses the administrative route and, after a
finding of reasonable cause, elects for the Attorney General to
initiate a suit under section 812(o) in federal court, a court
r,ay grant the same relief as it can in a private section 813 suit
_ i ' g t, actual and punitive damages (see section 812(o)(3)).
The two types of relief available in private and Attorney
General-elected suits — actual and punitive damages — are also
referred to in section 812(o)(3) by the generic term 'monetary
relief.'5/ Thus, it is clear that in section 812(o)(3) the term
'monetary* is meant to include 'actual and punitive' damages.
1 / section 812(o)(3) reads in pertinent part (emphasis added):
In a civil action under this subsection, if the court finds
that a discriminatory housing practice has occurred or is
about to occur, the court may grant as relief any relief
which a court could grant with respect to such
discriminatory housing practice in a civil action under
section 813. Any relief so granted that would accrue to an
aggrieved person in a civil action under section 813 shall
also accrue to that aggrieved person in a civil action under
this subsection. If monetary relief is sought for the
benefit of an aggrieved person who does not intervene in the
civil action, the court shall not award such relief if that
aggrieved person has not complied with discovery orders
entered by the court.
m
15
Moreover, there is nothing in the statute or legislative history
to suggest that it should naan anything lsss in section 814.i/
A comparison of the language contained in 1814(d)(1)(B)
uii inOi « limiting nature o l the >e ial language
sections 812(g) (3)2/ and 813(c) provides further evidence that
the term "monetary damages" contained in 1814(d)(1)(B) is to be
read broadly. Sections 812(g)(3) and 813(c) limit the type of
monetary relief available in proceedings to adjudicate private
claims of discrimination. The defendants incorrectly argue that,
had Congress intended to provide for punitive damages and damages
for emotional distress in Section 814(d)(1)(B), it would have
specifically done so, as it did in those provisions. Such a
statutory interpretation misreads Congressional intent. Although
it is clear that the types of damages available pursuant to
sections 812 and 813 are specified, it is equally clear that by
virtue of such clarification those sections are 1imited to the
same. It is the absence of any limitation on "monetary damages"
)
•£/ In addition, contrary to the apparent assertion of
defendants, it is beyond dispute that the term "actual" damages
should be interpreted to include emotional distress damages, as
well as other forms of actual damages such as economic loss and
loss of civil rights. Section 812 of the 1968 Act, like section
813 of the amended Act, authorized courts to award "actual"
damages, and the consistent interpretation of that provision is
to include emotional distress damages in such a recovery. See,
e.g., Marable v. Walker. 704 F.2d 1219 (11th Cir. 1983); Gore v.
Turner. 563 F.2d 159 (5th Cir. 1977).
2/ This provision defines the relief that an A U may award in an
administrative proceeding, i.e., injunctive relief, actual
damages suffered by the aggrieved person, and a civil penalty.
16
)
within §814 that favors an expansive construction of this
section.
Indeed, there is n£ express intent in the Act itself or the
legislative history to limit the scope of 'monetary damages' in
pattern or practice cases. If Congress meant to limit the relief
available to the United States, it could have done so, as indeed
it expressly did with Administrative Law Judges when it removed
their authority to award punitive damages . & The absence of a
similar restraint on the Attorney General's authority to obtain
relief in cases brought pursuant to Section 814 reinforces an
interpretation which gives broad discretion to a court in .
determining the type of monetary relief that is appropriate in
such cases.
2. Congressional Purpose and Legislative History
In our discussion of the background of the amended Fair
Housing Act, supra, it is very plain that a primary purpose of
Congress in amending the remedial and enforcement provisions of
the Act was to provide more teeth in federal fair housing
enforcement. Congress was concerned both with the lack of
adequate federal enforcement and with the inability of private
individuals, many of them the unfortunate victims of housing
discrimination, effectively to use the existing enforcement
machinery. Accordingly, Congress's efforts were directed not
only at making the federal government the preeminent force in the
A/ see H.R. Report No. 100-711, 100th Cong., 2nd Sess. at 13
(1988), wherein it indicates a conscious decision of Congress to
-deny A U s the power to award punitive damages.
17
war against housing discrimination, but also at doing so in a
manner which enabled private individuals to take most advantage
ef the extensive resources and experience of the Dnited States.
*iiis overriding Congressional juiposa to
effective enforcement of the Fair Housing Act provides a further
basis for giving remedial provisions such as 5814(d)(1)(B) a very
broad interpretation, as opposed to the most narrow of
interpretations, such as that suggested by defendants and which
would to a large extent emasculate the remedial teeth of the
§814. Now all avenues for challenging unlawful discrimination in
housing under the amended Act — private, administrative and
cases brought by the United States — provide for monetary
relief. This is especially so when the language of Section
814(d) (1) (B) includes the broadest -- not the most restrictive --
grant of remedial authority regarding available monetary relief.
Nowhere does the Act limit in any way what is meant by 'monetary
damages' (as is done with other sections).
Moreover, a primary purpose of the 1988 Amendments was to
avoid to the extent possible duplicative litigation by both the
federal government and private parties. This goal was made
explicit in the House Report on the Fair Housing Amendments Act,
particularly with respect to the United States' pattern or
practice authority pursuant to Section 814. In specifically
discussing Section 814(d), the House Report explains the
rationale for allowing 'monetary damages' in pattern and practice
cases, and stresses that '[allowing the court to award monetary
r«li«f to persons aggrieved avoids later duplicative litigation
as such parsons bring actions to vindicate their rights.' H.R.
Rep. No. 100-771, 100th Cong., 2d Sess. at 40 (1988).
In private fair housing litigation brought pursuant to
Section 813 of the amended Act, a court nay award punitive
damages as well as actual damages, including emotional distress
damages. If the 'monetary damages' courts can grant in Section
814 pattern and practice actions did not include such punitive
and emotional distress damages, Congressional intent is turned on
its head and the duplicative litigation which Congress
specifically sought to avoid would be encouraged.2/
Defendants' reliance upon cases interpreting the Fair
Housing Act of 1968 which interpreted that Act to limit relief
available to the United States in pattern or practice cases
provides no support for a narrow interpretation of the new
remedial provisions in the amended Act. (Def. Memorandum, p. 16,
citing United States v. Rer,t-a-Home Systems of Illinois, supra.)
Indeed, if anything, such case law supports the bm'-ad
interpretation urged herein. Under the 1968 Act, only the
enforcement provisions relating to private individuals expressly
provided for monetary relief (actual and punitive damages).
)
2/ indeed, in this case the United States has identified at least
14 individuals as alleged victims of defendants' discrimination.
If the United States cannot secure damages for these individuals,
their only recourse is 'duplicative' litigation either through
private actions pursuant to Section 813, or through intervention
in this case pursuant to Section 814(e), both of which authorize
relief in the form of both actual and punitive damages (see
Sections 813(c) and 814(e)).
- 19 -
)
Significantly, it v u this apecification of permissible forms of
lagal dair.agcs for private actions, and the complete absence of
language authorizing any form of legal damages for the United
States, that lesulttu doci*-.ox • to -'any to th.i United States
the ability to seek monetary relief. See Long » SUPEfl• W ltChfll.
supra: Ser.t-a-Homes. supra ■ In passing the amended Act, Congress
specifically added language authorizing such relief in order to
address this shortcoming in the 1968 Act and provide a more
effective remedial structure in the Act.
3 . The Nature of Pattern and P r a c t i c e CES&S
Finally, the very nature of pattern or practice cases
brought by the Attorney General militates in favor of the
broadest reading of a court's remedial authority in such cases.
pa--g-n or practice lawsuits are aimed at the broadest and most
egregious forms of housing discrimination. Indeed, such cases
strike at the heart of systemic, policy-based practices which in
most cases adversely affect the housing rights of far more
individuals than isolated incidents of discriminatory conduct.
Accordingly, courts should have the broadest authority to remedy
such a violation of the Fair Housing Act. It follows that the
20
)
remedial language of §814(d)(1)(B) should be accorded a broad
interpretation.
B. THE REMEDIAL PROVISIONS OF SECTION 814 (?F THS
HOUSING AMENDMENTS ACT OF 1988 AflE APPLICABLE
7 0 DEFENDANTS* PRE-AMIjNPMENT DISCRIMINATION
To the extent that the United States, as we argue above, is
entitled to seek the full range of monetary relief under
provisions of the amended Fair Housing Act, defendants also
10/ Defendants argue that the availability of civil penalties
under 814(d)(1)(C) is relevant to the scope of monetary relief
available under 814(d)(1)(B) and that it should preclude the
entitlement of the United States to seek punitive damages in
pattern and practice cases. Such an argument misperceives the
function of a pattern or practice lawsuit. In pattern or
practice suits the Attorney General represents the interests of
both actual victims of discrimination and the public interest in
seeing that its civil rights laws are obeyed. In view of this
role, it is logical that all forms of monetary damages be
available in order fully to vindicate the interests of both the
victims of the discrimination, as provided by 814(d)(1)(B), and
the public interest pursuant to 814(d)(1)(C). The damages
scenarios in pattern or practice cases necessarily will vary from
case to case. While punitive damages and civil penalties are
designed to serve a similar purpose— to provide punishment for,
and deterrent to, unlawful discrimination-- courts in such
pattern and practices cases should have available either remedy
tc ensure effective enforcement. For example, in some cases it
jnay be appropriate to award only punitive damages to the victims
of discrimination — damages that they would be entitled to
pursuant to §613 of the amended Act if they, rather than the
United States, initiated the litigation. In other cases there
may not be identifiable victims, and imposition of a civil
penalty would be appropriate to serve the deterrent goals of the
remedial provisions of the Act. Still other cases of
discrimination may prove to be of a nature that an award of both
punitive damages and civil penalties may be appropriate; although
in light of their often-sum 1ar functions, the award of punitive
damages will generally argue for a diminution of the civil
penalty levied. Congress's specification of 'monetary' relief in
Section 814 acknowledges that a pattern or practice lawsuit
indeed is a different and more inclusive vehicle for combatting
bousing discrimination. This Court should reject defendants'
attempt to thwart Congress's purpose to provide for more
effective relief in Fair Housing Act cases.
21
challenge application of such provision* to pre-Amendment
conduct. The defendant* contend that all of the provision* of
the Fair Housing Amendment* Act should be interpreted to apply
ipuctively only as-d that *n> we *tary relief vh'ch the Unit'd
States way be entitled to seek should only apply to acts that
occur on or after March 12, 1989, the effective date of the
amended Act.il/ Furthermore, defendants assert in any event that
retroactive application of such remedies would violate the Ex
Post Facto Clause and the Due Process Clause of the Fifth
Amendment of the Constitution. These arguments are without
merit.
1. The Pemedial Provisions of the Amended Act Should ..S.e_
Interpreted to Ap p lv Petrospectivelv
The issue posed by defendants is whether monetary relief
authorized in pattern or practice suits under Section 814 of the
amended Act can be awarded for defendants' pre-Amendment
UL7 As an initial point, because we allege that the pattern and
practice of discrimination in this case was in place after the
amended Act had taken effect, we believe that the imposition of
civil penalties in this case under the amended Act does not
necessarily raise a retroactivity issue. As discussed earlier in
this Brief, this is a pattern or practice suit brought by the
Attorney General after the amended Act had gone into effect,
attacking a pattern of racial discrimination by defendants. Such
a pattern is by its very nature a continuing policy of
defendants, and the focus of the case should not be limited to
isolated acts of discrimination occurring before the effective
date of the amended Act. If we establish the existence of such a
pre-amendment policy, there is a presumption, in the absence of
evidence to the contrary, that such practices continued at least
up to the date of filing of this case. United States v. West
Peachtree Tenth Coro.. 437 F.2d 221, 227-28 (5th Cir. 1971).
Clearly it is highly improbable, given the facts of this case,
that defendants changed their rental practices on March 12, 1989
..because of the effectiveness '->n that date of the amended Act.
- 22
discrimination. In challenging the United States' ability to
secure such relief, defendants seek to evade their statutory
liability provided by the amended Act to compensate victims of
the alleged discrimination for any damages incurred. They do so
by focusing on certain substantive changes made by the Fair
Housing Act amendments. But these changes are in no manner
related to the pending allegations against defendants, and
defendants should not be allowed to utilize their existence to
support an argument totally immunizing them from retrospective
application of the new remedial provisions of the amended lav.12/
In Bradley v. Richmond School Board. 416 U.S. 696, 711^
(1974) , an important Supreme Court decision which defendant^
conveniently choose to ignore in their Motion, the Court stated
that * a court is to apply the law in effect at the time it
renders its decision, unless doing so would result in manifest
injustice or there is a statutory direction or legislative
.)
12./ a s discussed earlier in this Brief, and as noted by
defendants in their Motion, the Fair Housing Amendments Act made
substantive changes in the 1968 Fair Housing Act. Those
substantive changes consist of adding to the statute, as
prohibited bases of discrimination, handicap and familial status.
Defendants are not before this Court answering to allegations of
handicap or familial status discrimination, nor for any other
conduct which is the subject of a substantive change in the Act.
Rather, defendants have been charged with discrimination in
housing on the basis of race, action which has been unlawful
under federal law for decades. Although other changes were made
to the Act, such as provision for a more extensive HUD
enforcement scheme and expanded remedial provisions in the
context of HUD administrative hearings and pattern or practice
suits, such changes are properly characterized as 'procedural* or
'remedial.' Indeed, defendants so characterize them in footnote
5 of their Motion, and appear to acknowledge the validity of
retrospective application of 'remedial' amendments, such as those
*in issue here.
23
)
history to the contrary.* That proposition is now well-
established. See, Campbell v. PpiriinicK & PonUTUCK* Zng,« # 872
(11th Cir. 1989); Castle v. Weston. 837 F.2d 1550, 1562 (11th
Cir. 1988); United states v. Marengo Countv 731 F.2d
1546, 1553-55 (11th Cir. 1984). A statute will be assumed to
apply to cases pending at the time of its passage unless there is
a "clear indication" that it is not to apply. BradlSX# <16 U.S.
at 7 1 2 -1 6 . There is no indication in either the Fair Housing
Amendments Act or its legislative history that the new remedial
authority contained therein is not to apply retroactively.
In determining whether retroactive application of new law is
"manifestly unjust," a court is to consider (a) the nature and
identity of the parties, (b) the nature of their rights, and (c)
1 2 J The preamble of HUC's Regulations implementing the Fair
Housing Amendments Act cites Bradley in support of the
proposition that "remedial and procedural legislation not
affecting vested rights, must be applied" retroactively. The
preamble goes on to note that '[w]hile it is true that statutes
that affect substantive rights ordinarily may not be applied
retroactively, United States v. Security Industrial Bank. 459
U.S. 70, 79 (1982), this principle has no applicability here."
54 Fed. Reg. 3259 (1989). As pointed out, SUPra. fn. 12,
defendants appear to agree with this proposition.
Congress's specification of March 12, 1989 as the effective
date of the amended Act, cited by defendants in apparent support
of their prospective application argument (Motion, p. 12), is
just that — a statement that the Act would not be effective
until six months after its passage. That statement says nothing
about retroactive application of all or some of the Act's
provisions, nor should it be interpreted to do so. What matters
-is that, on the date this action was filed, the amended Act was
the law in effect.
358, 3 5C (11th Cir 19*9) ? Bfil.iMX ” W£?ber, *72 T ?d *56
- 24 -
)
■the nature of the impact of the change in law upon those rights."
Bradley. 416 U.S. at 417.
The first consideration, "nature and identity of the
parties', focuses on whether the action is a private case between
individuals, or a case involving "great national concerns."
United States v. Schooner Peggy. 5 U.S. 103 (1801) ; PlUted gtatcg
v. Marenoo Countv Commission. 731 F.2d 1546, 1553-4 (11th Cir.
1984); United States v. Hill. 676 F.Supp. 1158, 1168 (N.D. Fla.
1987). When a statute manifests important national policy, the
court must respect that policy and apply it. As the Court stated
in Schooner Peggy. 5 U.S. at 10, SUPTB:
in mere private cases between individuals, e
court will and ought to struggle hard against
a construction which will, by retrospective
operation, affect the rights of parties, but
in great national concerns, where individual
rights... are sacrificed for national purposes,
... the court must decide according to existing
laws.
Here, the Fair Housing Amendments Act seeks to ensure egual
opportunity in hou^\ng, a most fundamental right and an issue of
great national importance. See, United 5tates_v. Marengo County
Commission. 731 F.2d 1546, 1553-4 (11th Cir. 1984).14/ This
important national policy establishes the eradication of
discrimination in housing as a clear national priority.
The second Bradley consideration, the nature of the rights,
refers to whether the new legislation affects any rights that
14/ 5 Congress restated in Section 801 of the amended Act,
*[i)t is the policy of the United States to provide, within
constitutional limitations, for fair housing throughout the
-United States." 42 U.S.C. §3601.
25
- J
have 'matured or bacon* unconditional*. 416 U.S. at 720. Hare,
defendants' discriminatory practices were unlawful before the
effective date of the 1988 Act, and they have no 'right* to avoid
penalties for the conduct which war unl^'f-1 at the tin. it
occurred. See United States v. p&Kvppd PQwnrjvar ffedacftl Center,
687 F.Supp. 302, 307 (E.D. Mich. 1988) (where False Claims Act
was amended to increase damages, court held that the defendants
did not have a 'matured' right to the imposition of double as
opposed to treble damages and noted that 'changes in the damage
and forfeiture provisions... do not alter liability, nor change
conduct previously determined lawful.*). As detailed immediately
below, defendants have long been exposed to substantial monetary
liability for housing discrimination. They have no right, vested
or other, not to have such liability take different monetary form,
or increased size.
The third BradIev consideration requires an examination of
the impact, if any, that the change in law may have upon existing
rights. 416 U.S. 720. It 'stems from the possibility that new
and unanticipated obligations may be imposed upon a party without
notice or an opportunity to be heard.' Id- If the law would have
caused the defendant to change its conduct had it known of its
obligations, a court is more likely to find manifest injustice in
applying the new law retroactively. Id-: Hill. 676 F.Supp. at
1170. Here, the defendants were and are liable to the victims of
their discriminatory practices for compensatory and punitive
damages under the 1968 Fair Housing Act and other federal law.
26 -
)
That liability ha* not changed at all. Thus, allowing tha United
States to recover damages for individuals that have been
available to such persons all along does not impose an
•unanticipated obligation*. As indicated above (p. 5), under the
1968 Act, private individuals could recover actual damages, and
up to $1,000 in punitive damages, upon a finding of a
v i o l a t i o n . M o r e o v e r , surely defendants cannot even suggest
that, had they known of this change, they would have altered
their conduct. The 1988 Act, as applied to the defendants, is
merely continued legislation, and broadening the remedial
provisions has not changed defendants' legal posture at all.'l^
1 1 / Moreover, racial discrimination in housing is illegal under
42 u . s . c . 51952 (part of the 1866 Civil Rights Act), and both
actual and unlimited punitive damages are available in actions
brought under that statute. See Grayson v. potundj_f Sons FeqltS
Co. . Fair Housing-Fair Lending (Prentice Hall) at 15,516 (E.D.
N.Y. September 5, 1984) ($500,000 in punitive damages); ?h;1jps
v. Hunter Trails Community Assn.. 685 F.2d 184 (7th Cir. 1982)
($100,000 in punitive damages); Miller v. Apartments. 6-Homes o_f
New Jersey. Inc.. 646 F.2d 101 (3d Cir. 1981) ($25,000 in
punitive damages) : and Pol 1itt v. Bramel. 660 F. Supp. 172 (S.D.
Ohio 1987) ($25,000 in punitive damages). The presence of
another statute as the source of a pre-existing obligation is
similar to the situation in Bradley, where common law formed the
basis for attorneys' fees recovery prior to enactment of the
statute in issue in that case.
1 1 / This argument applies with equal force to the amended Act
provisions permitting imposition of civil penalties in pattern or
practice suits. Given the defendants' pre-Amendment exposure to
virtually uniimited monetary liability in the form of actual and
punitive damages, they cannot be heard to allege that the
imposition of civil penalties— the amount of which may be
awarded is restricted by statute and the purpose of which is very
similar to that of punitive damages (see footnote 10, supra)—
raises their current obligation to an ^unanticipated* one which
would have warranted a change in their behavior had they known of
their possible liability for such civil penalties for pre-Act
- conduct . . .v, ) , : , 1 ;
27
)
This conclusion is supported further by ths preamble of
HUD's implementing regulations, wherein it is provided:
The 3 98 8 Amendments (except as to discriminatory
housing prautiua* involving handicap rn-1 famsJia 1
status) do not create new legal duties or
responsibilities. Rather, they merely provide a
new process by which aggrieved persons may enforce
existing rights protected under Title VIII. I.e., the
1988 Amendments create new procedures for the filing,
investigation and conciliation of complaints
concerning discriminatory housing practices and
strengthen the remedies available to victims of
housing discrimination by providing for administrative
hearings, and by increasing the availability of civil
penalties, attorney's fees, etc. Because the new
remedies and enforcement procedures do not affect
vested rights, retroactive application is entirely
appropriate. See . e ■ g , . Bradle.y, syjprj > (increased
availability of attorney's fees); Erifil v. Cessna
Aircraft Co.. 751 F.2d 1037 (9th Cir. 1985) (extension
of limitations period); Montana Power Co. v. Federal
Power Comr... 445 F.2d 739 (D.C. Cir. 1970) (change
in tribunal); and Grummitt v. gturgePP BaV w lnt.£X Snorts Club. 354 F.2d 564 (7th Cir. 1965) (change in
procedure).
54 Fed. Reg. 3259 (1989). The substantive changes of the 1988
Act have no bearing on this case. This action does not challenge
a-y acts that were lawful when committed. Rather, it attacks
practices which have been the focus of federal legislation since
the 19th Century. Thus, defendants do not have any vested rights
within the meaning of Bradley. Likewise, retroactive application
.of the amended Act will not result in relief that is otherwise
unavailable to the victims of the discrimination in this case; it
does not present unanticipated liabilities for the defendants.
The considerations set forth in Bradley all support applying the
remedial provisions of the 1988 Act to the defendants. Such
28 -
)
application will aarva important public intaraats and will not
rasult in any injustice to the defendants.
As stated above, the defendants totally ignore tha analysis
of Bradley in arguing that tha 1988 Act should not be applied to
their conduct. Instead, they rely on Vnitcfl StPtMM. v. Esrnandcz-
Toledo. 749 F.2d 703 (11th Cir. 1985) and fiftH v - If&hFiqP Line?,
Inc.. 363 F. Supp. 156 (M.D. Fla. 1973), cases which differ from
■this case in a number of important respects and clearly fall
within the exception to Bradley's presumption of
retroactivity.1 3 /
1 2 / Brad1ev also requires an examination of the statute it^lf,
and its legislative history, in determining whether the
presumption of retroactivity should be overridden. While the
statute itself is silent as to whether Congress intended monetary
relief to be available for acts occurring prior to the effective
date of the Amendments, the HUD regulations implementing the Fair
Housing Amendments shed light on this issue. The regulations
specify that discriminatory housing practices involving handicap
and familial status do not violate the Act unless committed
subsequent to March 12, 1989, the effective date of the Act. 54
Fed. Reg. 3292 (1989). However, there is no further similar
statement that the 'monetary damages' provision of section 814 is
to apply only to post-Act discrimination. The absence of such
comments bolsters the argument that the prospective application
of section 814 of the 1988 Act is not warranted here. Indeed, as
noted suora. footnote 13, this part of the regulations indicates,
if anything, that remedial provisions, such as those challenged
here, are to be applied retrospectively.
1 3 / Another case relied upon by the defendants, Jackson v.
People's Republic of China. 794 F.2d 1490 (11th Cir. 1986), also
relates to a situation where a new statute, if retroactively
applied, would adversely affect vested or substantive rights.
For this reason, the court declined retroactive application of
the statute at issue. This case is in accord with Bradley. Such
a situation simply does not apply here. The 1988 Fair Housing
Amendments Act, with the exception of the proscriptions against
discrimination on the basis of familial status and handicap
(clearly irrelevant to this action), does not change the
" substantive rights and liabilities of defendant*.
- 29
)
Both Fernandez-Toledo and Bell involved vested rights which
would have been adversely affected had the legislation at issue
in those cases been applied retroactively. In Fernandez-Toledo.
defendants were released on bail pursuant to the statute in
effect at the time they applied for bail. Shortly after
defendants' request for bail was granted, the Bail Reform Act of
1 9 8 4 was enacted. That Act changed bail procedures (including
allowing the government to appeal a bail determination) and other
substantive considerations relevant to whether bail was
permissible. The government appealed the decision to grant bail
and argued for application of the newly enacted Bail Reform Act.
The court first acknowledged the general rule established in
B r a d 1 e v that * a new statute should apply to cases pending on the
date of its enactment unless manifest injustice would result."
F e r n a n d e z - T o l e d o . 7 4 9 F . 2 d at 7 0 5 . It then applied the three-
step a n a l y s i s of B r a d l e y a n d determined that it would be
m a n i f e s t l y u n f a i r to give retroactive effect to the substantive
c h a n g e s i n t h e B a i l Act. T h e court stated that the defendants
"were e n t i t l e d to b e r e l e a s e d and their release was ordered b y
the d i s t r i c t court b e f o r e the new law became effective and before
this case was heard b y the panel. Their rights to bail had
30
)
already vested, i.e., it was an antacadant right existing bafore
the change in tha lav.* Id- at 7 0 5 .
Likewise, in Bell. the defendant filed a third-party suit
for indemnity under the Longshoreman's and Harbor Worker's
Compensation Act. Shortly after the filing of tha action the Act
was amended to repeal such indemnity actions. The court denied
the third-party plaintiff's petition to apply the amended Act
retroactively and dismissed the indemnity action because the
amended statute affected substantive rights that had already
vested. Bell. 363 F.Supp. at 159.
Unlike the defendants in Fernandez-Toledo and Bfill, the
defendants here cannot claim an exemption to Br?Iff.Y f°r » •*
shown above, they do not have vested rights that will be affected
1 1 / Defendants rely on Fernandez-Toledp to support their claim
'where there are both substantive and procedural or remedial
aspects of a statute, partial retroactivity cannot be mandated."
Motion, footnote 2. This statement is erroneous and fepnandezz
Toledo does not so state. As discussed immediately above, the
court in that case, relying on the Bradley "manifest injustice
test, found such injustice to exist upon retroactive application
of a substantive statutory amendment. Retroactive application of
the bail statute at issue had the potential for denying
defendants previously granted bail, a "vested" right, and
therefore their freedom. Following such a finding, it simply
"declined" to give the Act partial retroactivity and allow the
government to appeal under the new Act; allowing the government
to appeal in that case had the potential for affecting the vested
right which the court had already stated should not be disturbed.
This is a far cry from a 'mandate' against partial retroactivity,
just as Fernandez-Toledo is a far cry from this case. Defendants
here are affected in no pertinent way by the substantive changes
in the amended Act. Unlike in Fernandez-Toledo. retroactive
application of the non-substantive provisions of the new Act in
this case does not have the potential for substantively affecting
..defendants.
- 31 -
)
by the amended Act. Accordingly, BrfidlAX counsel* retroactive
application of the remedial provisions of the amended Act. ^
FetrfiiCtjve APEli-£-gtiPJ_oX the Remejipl FrPv lflgn? ^Provisions of
it F
Post Facto Clause
Although defendants concede (Motion, p.4) that the Ex Post
Facto Clause of the Constitution, Article 1, 510. cl. 1, applies
only to criminal statutes, parisipdss v. Shgy<?Pe$SY, 3*2 U.S.
580, 594 (1952); see also Dufresne v. Bafi*, 744 F.2d 1543 (11th
Cir. 1984); United States v. P.Etg- APPPlPP»a?» 829 F.2d
532 (5th Cir. 1987), they nonetheless argue that retroactive
monetary relief in this civil proceeding would violate that
clause. Defendants strenuously assert that punitive damages and
civil penalties are 'penal' in nature, and on that basis alone
seek to avoid the monetary penalties clearly authorized under the
Fair Housing Act. But the presence of such remedies in a
statutory scheme does not transform civil statutes into criminal
ones subject to ex post facto restraints. Indeed, if that were
the case, a substantial part of this nation's body of civil law
would be rendered criminal, with the whole gamut of criminal
protections thereby attaching. The simple fact is that various
forms of 'punishment' are present, and have always been present,
- 32 -
J
in numerous civil contexts. Such presence here does not prove
defendants' argument.2JZ/
Defendants' substantial reliance on United States v. Helper.
57 U.S.L.V. 4526 (1989), in support of their Ex Post Facto
argument is inapposite. First, Halper does not even mention the
Ex Post Facto clause; it relates solely to the double jeopardy
protection provided by the Fifth Amendment. Second, the holding
in Halper is so limited to its own facts, as the Supreme Court
takes great pains to point out, that it is of little assistance
here to defendants. In Halper. the petitioner was convicted of
submitting 65 false medicare claims to the government and was
sentenced to prison and fined S5,000. Under federal law, ̂
petitioner was also liable for a civil penalty of $2,000 for each
false claim. Due to the number of claims at issue, the
government sought a total of 5130,000 in civil penalties. The
statutory aim of the civil penalty provision was to reimburse the
government for actual cost in investigating and prosecuting the
fal'-e claims -- this cost was estimated to be approximately
$16,000. The Supreme Court upheld the district court's ruling
that the full statutory amount authorized by the False Claims
It should be pointed out initially that, in the abstract,
Congress would violate no constitutional prohibition by expressly
making this civil statute operate retroactively. Particularly in
the sphere of economic regulation, it has become accepted that
^'legislation readjusting rights and burdens is not unlawful
solely because it upsets otherwise settled expectations. This is
true even though the effect of the legislation is to impose a new
duty or liability based on past acts." Pension Benefit Guaranty
£°E~Pi v * £..?A •— Qray— £_Co■ , 467 u.s.717, 729 (1984), quoting Usury
v. Turner Elkhopn Mining Co.. 428 U.S. 1, 15-16 (1976).
33
)
Act, as applied to patitionar, violatad tha Doubla Jaopardy
Clausa of tha Fifth Amendment. The court described tha amount of
the i-j* ii. pen*l«-i*s a« hearing 'no rational relation* to the
government's losses, and as constituting a second punishment. Id.
at 4530. The Court was clear about the application of this
decision to other cases:
What we announce is a rule for the rare case, the case
such as the one before us, where a fixed-penalty provision
subjects a prolific but small-gauge offender to a sanction
overwhelmingly disproportionate to the damages he has
caused. The rule is one of reason: Where a defendant
previously has sustained a criminal penalty and the civil
penalty bears no relation to the goal of compensating the
government for its loss, but rather appears to qualify as
'punishment* in the plain meaning of the word, then the
defendant is entitled to an accounting of the Government's
damages and costs to determine if the penalty sought in fact
constitutes a second punishment. Id.
The facts of this case contrast sharply with Halper. This
action is a simple civil proceeding. There is no criminal case
cr punishment at issue. Accordingly, the Ex Post Facto clause,
or for that matter the double jeopardy clause, does not apply.
Again, the mere characterization of the punitive damages and
civil penalties as penal is not sufficient to invoke the
protection afforded in criminal proceedings.2-1/
Defendants do not cite to any authority, and to our
knowledge their is none, finding retroactive application of
U S Similarly, Trop v. Dulles. 356 U.S. 86 (1958), cited by
the defendants, is a criminal case where the government sought to
impose civil sanctions following criminal punishment. In that
case, the Court ruled that the cruel and unusual punishment
clause of the Eighth Amendment was violated where the government
..divested an individual of citizenship following his conviction
for wartime desertion.
34
statutory punitive damages and civil panaltias provision* in a
civil contaxt violative of the Ex Post Facto clausa. Other cases
cited by the defendants deal with criminal proceedings. V3 9 y . i l v.
G r a h a m . 450 U . S . 24 (1981) (state statute changing duration of
incarceration for a crime); Bouie v. City Of 378 U . S .
347 ( 1 9 6 4 ) (state criminal trespass statute). The cases that
consider the Ex Post Facto defense in the context of a civil
proceeding have consistently rejected such a challenge. United
s t a t e s v. D . K . G . Appaloosas. Inc.. 829 F.2d 532 (5th Cir. 1987)
(Ex Post Facto clause not applicable to drug forfeiture statute);
H a r i s i a d e s v. S h a u s h n e s s v . 342 U . S . 586 (1952) (deportation
statute is civil proceeding not encompassed by the Ex Post (Facto
clause); D e V e a u v. B r a i s t e d . 3 6 3 U . S . 144 (1960) (Waterfront
C o m m i s s i o n Act, disqualifying felons from employment, not an Ex
P o s t F a c t o law); B u r o e s s v. S a l m o n . 97 U . S . 381 (1878) (civil
s u i t f o r e x c e s s t a x n o t s u b j e c t to E x Post Facto clause).
Moreover, defendants' claims here do not fall within the
zone of interests sought to be protected by the Ex Post Facto
clause. That clause seeks to ensure that fair notice will be
provided before conduct is made criminal and that persons may
rely on existing law to guide their behavior, and seeks to
further the goal of criminal law in regulating behavior through
notice of punishment for criminal conduct. Warren v. United
States Parole C o m m i s s i o n . 659 F.2d 183 (D.C. Cir. 1981). These
concerns are not present here. The defendants have long been on
notice that racially discriminatory housing practices are
- 35 -
unlawful and that such conduct could expose than to substantial
monetary liability. This is not a case involving tha inposition
of new liability; rather, as to defendants, it involvas continued
legislation fcncwmpAssinij the - %*.« leg.* proh fc.ions.
discrimination in housing, as mentioned, has bean unlawful for
many years. The 1988 Fair Housing Amendments Act does not change
the defendants' obligations in that regard. Finally, as
indicated above, given the availability prior to the amended Act
of a full arsenal of monetary relief for housing discrimination,
any claim of defendants that the changes in the monetary relief
structure of the Act would have served as an additional deterrent
to engaging in discriminatory housing practices would be absurd.
H a d the new Act been in place when the defendants initially
engaged in unlawful activity, there is no likelihood that
defendant's practices would have changed in any manner. In sum,
d e f e n d a n t s ' E x P o s t F a c t o c o n c e r n s are meritless.
3. P e t r o a c t i v e A p p l i c a t i o n o f t h e R e m e d i a l P r o v i s i o n s o f
t h e F a i r H o u s i n g A m e n d m e n t s A c t D o e s H o t V i o l a t e t h e D u e
P r o c e s s C l a u s e
Defendants raise a due process defense to the retroactive
imposition of monetary relief for their unlawful conduct. The
facts of this case do not give rise to this issue, for the due
process clause only applies to vested rights, Weaver v. Graham.
450 U . S . 24, 30 (1981). The defendants can hardly argue that
they had a right to discriminate prior to the effective date of
)
- 36
)
the amended Act; nor do they have any vested right* to damages of
a particular type or amount. See pp. 25-26,
Moreover, this case simply does not implicate normal due
process concerns. The thrust of the due process clause is to
protect parties with vested rights from unfair surprise or harsh
consequences. United States Trust Co. v. Few JerSffY* U.S. 1,
17 n.13 (1976). Here, such a situation does not exist.
Defendants cite Vuitton v. Spencer Handbags. 765 F.2d 966 (2d
Cir. 1985), in support of their due process claim. In Vgjttgn
the district court declined to award treble damages in a private
trademark infringement case where that remedy was made available
by Congress only during the pendency of the suit. The court
recognized that due process 'prohibits retrospective civil
legislation that results in especially "harsh and oppressive'
consequences." Vuitton. 597 F. Supp. at 1194, quoting United
S t a t e s T r u s t Co. v. N e w J e r s e y . 431 U.S. 1, 17 n.13 (1976).
Consequently, to avoid this problem, the court chose to construe
t h e treble d a m a g e s statute as oper.-^ing prospectively only.
The countervailing considerations that distinguish the Fair
Housing Act from the statute involved in Vuitton are compelling.
In Vuitton the court declined to apply the treble damages statute
retroactively because it could not have deterred the particular
defendants who committed their illegal acts prior to the passage
2 2 J To a large extent, this argument dovetails into the Bradley
analysis described above. Clearly, the factors deemed important
by the Bradley Court reflect concern about due process rights not
transgressed here.
- 37 -
J
of the Act. But here, monetary damages hava always bean
available under the Fair Housing Act and, in addition, plaintiffs
in §1982 lawsuits have been awarded large punitive damage awards
where discrimination in houdl.ig has -«%n iaxtuC "o rr.idt.. Thus,
the possibility of awards of large amounts of monetary relief as
a result of defendants' conduct could clearly be foreseen by
defendants and act as a deterrent prior to the passage of the
amended Act. In providing that the United States may now recover
similar relief for such victims of discrimination, as well as
seek another kind of punitive relief in the form of civil
penalties, the amended Act merely changes the circumstances in
which such monetary relief may now be awarded and only minimally
adds to the deterrent effect that of the relief. In sum. the
additional remedial provisions provided by the amended Act here
cannot be said to be "harsh and oppressive".
Accordingly, retroactive application of the amended Act's
remedial provisions does not violate the Due Process Clause.
- 38 -
IV. CONCLUSION
For the above stated reasons, defendants' notion to strike
should be denied.
Respectfully submitted,
JAMES P. TURNERActing Assistant Attorney General
JOSEPH D. RICH
/ANE R. TAYLOR
^/BARBARA KAMMERMAN
CHRISTINE R. LADD
BRIAN F. HEFFERNAN
Attorneys
Housing and Civil
Section
Civil Rights Division
U.S. Department of Justice
P.0. Box 65998
Washington, D.C. 20035-5998
Telephone: (202) 633-4752
•̂ Q4-22-9Z&i)3r45:PM F R O M LAWYERS' C O M M U T E
M / M
1CTIRICR COURT
C? TH2
0I3TRICT OF COLUMBIA
UNIT2D STATES CF AMERICA » Criminal No. F 14117-88
: Judge von Kar.n
BRYAN C. BOSTICK
g c V 5 2 OOPCS^TON TO DTFFVCANT1 S MEMORANDUM I.INCE2NIX5
By'TT̂ eAr’t*~V7Ty dt TH~ SAIL SEFCRM AMENDMENT ACT
Tha Uni tad States of America, by and through its attorney, the
United Statue Attorney for the District cf Columbia, respectfully
summits the following in opposition to defendant's memorandum:
1) Cn March 15, 1990, defendant Bryer. Bostick wae convicted
hy a -ury of second degree murder while armed and carrying a pistol
without a license. on April 10, 1992- the Court of Appeals
reversed defendant's second degree murder while armed conviction
for the sole reason that the trial court failed to instruct the
Aury concerning a potential defense. Defendant sought immediate
issuance of the mandate which we* entered on April 17, 1992. As e
result, a status hearing war held at the trial court level on Apr*l
20, 1992 lit which time the court addressed the defendant's
conditions of release pending re-trial cf this matter. At this
time,' the government mcved to have the demandant detained pursuant
to the Bail Reform Amendment Act. Defendant now objects to the
court'8 consideration cf thLs issue alleging that he is entitled to
l
"ll4-*Z-32 Uj:4: t k riOM l A iU z z z C u h i i tL ' i . i z »
04^22^32 W:«> tJf
on the same conditions imposed p?~cv to his *—-s- •>*s«i
Defendant argues that to detain his pursuant to this jurisdiction'«
recently enacted bail law would conitituta a retroactive
application of the new statute since he allegedly committed the
murder prior to adaption of this la;;.
2) Contrary to defendant's assertion, the court is free to
consider defendant's release status at this juncture and to detain
defendant pursuant to the Sail Refcm Amendment Act. Thera is no
constitutional right to bail. IT. It ad States v. Idwarda, 43 0 A. 2d
1321, 1325-31 (en banc) cart, denied 449 U.S, 372 (1931). instead,
the tens of a defendant's bail are routinely considered an cpar.
aattar subject to modification dur:.ng thu pendency of a case if
changed circur.star.cee so warrant, aaa Unitnd States v_l. Zannlnc, 761
F.2d 52, 55 (1st Cir. 1915) (discussing federal Bail Reform Act of
1994) .
3) This approach to the bail issue in the current caae is
consistent with the court'u historical treatment of bail issues
under the prior bail law in this jurisdiction. Tor instance,
Section 23-1322 (c)(2) of the previous Bail Act provided that, even
though a defendant had bean released by thu court pending trial, if
it subsequently appeared that the defendant was subject to pretrial
detention, the bail issue could be revisitsd upon written motion by
the government. liJcewiae, the current ball law contains a similar
provision,in.Section .23-132.2 (d) (7) . In short, t^e gauntlet doea
not drop after the court's initial determination of the bail iseue
at the beginning of judicial proceedings against the defendant.
u t t: _ c - ' i. - Ji. Lft I - J fU4
un» 44̂ 84 It: 3 < id
••
Instead, with regard to a defendant's release status, each day is
a "new day" during the pendency of his case and the conditions of
his release can be changed as circumstances change. In this sense,
the broad term "retroactivity" is truly a raLsnener when used in the
analysis cf a bail act issue. Employment of the term unfortunately
leads to confusion since "retroactivity" he.s been indiscriminately
utilized by courts whan discussing the application cf a wide
variety of laws/regulations under a plethora of factual scenarios.
4) Defendant rslies heavily on the cases of - U
fnivarsity Hcscital. 48* U.S. 204 (1988) and Kailli
s ShSPlSAl V, B e come. 49-1 tl.S. 82? (1990) in an
attempt to thwart the analysis cf a similar isaue as set forth in
the Memorandum Opinion and Order written by The Hencrsbie Baggie 3.
Walton in the recant case cf United States v. Trie Mcore. (decker
number F-5786-91, D-C. Supsricr Court). However, defendant's
reliance on the authority in question is misplaced. In both of the
civil cases designated by defendant, thn Court was applying a
law/regulation which effected a party's vested monetary rights
(i.e., in Bcwer.. monies already paid by the government to private
health care providers which the government ecught to recapture; in
Kaiaar. interest on a monetary judgment obtained by e party prior
to the enactment of a law changing the Lntarest calculation on
judgments). In both cases, the parties possessed vested property
rights which arguably could be affect id by the retroactive
application of a new law/regulation. Unde:: these circumstances, a
ccurt may be required to determine if th« applicable legislative
3
llj PCS
body intended the enforcement of tha lav/regulation to ba
retroactive cir.ca the vested proparty rights of a party may be
affactad by much an application.
5) However, as recited above, simply bacauaa defendant was
initially released in tha early atagiu of this litigation does not
mean ha now possesses a vestac property right or liberty interest
which prohibits tha court from changing his, conditions of release.
DeVaau v. Thv'.tad Ststee. 454 A.2d 1303, 1311 (D.C. App. 1982) cart.
denied 46C U.S. 1087 (1983) (overruled on ot;har grounds in Lynch v,
Unitad State a. *57 A.2d 58C (D.C. App. 1989) eltlnc Bradley v.
States v, Zarrire. 761 F.2d at 56-57.
6) The government's motion to detain tha defendant is not
predicated or. a desire to manipulate the criminal justice system or
to punish the defendant for pursuing his appellate remedies.
Instead, the question of dsfur.dant' e bail status is being revisited
as a natural consequsncs of his case bsir.g rsmsndad after ons of
his convictions was overturned, The government is moving far pre
trial detention at defendant's first court appearance following tha
issuance of tha mandate and is aimply asking the Court to apply the
lav as it prssentlv exists in the District of Columbia, aea Bradley
v. School Board of Cltv of Richmond. 41.5 U.S. at 711. To do
otherwise would require the Court to ignore the circumstances which
have changed since the inception of thin prosecution and would
frustrate tha City Council's clear legislative intent "to permit
the pretrial detention of tha moat violent and dangerous offenders
School Board cf Cltv ;f R4̂T i m i n g / 416 U.S. 696, 72C (1974)/ Phitad
4
&V'22/'82 I4:3fl ©
... and ... provide an additional msaeurn of community safety."
(Committee on the Judiciary, Report to the Council of the- District
of Columbia of 1991-1992, at 4 (January 23, 1992)),
gherefera. the united States respectfully submits this
memorandum in support of its requsst that ths defandant be detained
pending the re-trial of this matter.
I hereby certify that a copy of the foregoing was served by hand upon the attorney for defendant, David Reiser, Public Defender
JAY B. STEPHEN’S UNITED STATES ATTORNEY
P. KEVIN CARWILE'—ASSISTANT UNITED STATES ATTORNEY
Service, day of _A
ASSISTANT UNITED STATES ATTORNEY
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