Topic v. Circle Realty Appellees' Brief

    IN THE
UNITED STATES COURT OF APPEALS 

FOR THE NINTH CIRCUIT 
NO. 74-2147

TOPIC, et al.,
Plaintiffs-Appellees, 

v.
CIRCLE REALTY, SPRING REALTY, and 
SHOREWOOD REALTY COMPANIES,

Defendants-AppeHants

Appeal From the United States District Court 
For the Central District of California

APPELLEES' BRIEF

LOWELL JOHNSTON 
WILLIAM E. HICKMAN 
SAMUEL T. BISCOE 
WILLIAM BENNETT TURNER 
12 Geary Street
San Francisco, California 94718

MATTHEW C. LONG 
3756 Santa Rosalia Drive 
Los Angeles, California 90008

Attorneys for Appellees



INDEX
Page

Table of Authorities ...................  iii

Issue Presented For review .............  1

Statement of the Case...................  2

Statement of Facts......................  3

Argument................................  7
I. Plaintiffs Have Standing To 

Maintain This Suit Under The 
Fair Housing Act Of 1968 ...... 7

II. There Is A Case Or Controversy 
Within The Meaning Of Article 
III Of The Constitution.......  25

Conclusion..............................  29

l i



TABLE OF AUTHORITIES

Aetna Life Ins. Co. v. Sawoth,
300 U.S. 227 (1937) 13

Association of Data Processing Service 
Organizations v. Camp, 397 U.S. 150 
(1970) 11

Baker v. Carr, 369 U.S. 196 20
Barlow v. Collins, 397 U.S. 1959 (1970) 12
Brown v. Balias, 331 F.Supp. 1053 
(N.D. Tex. 1971) 25

California Bankers Ass'n v. Shultz,
___U.S. ___, 94 S.Ct. 1494 (1974) 11
Evans v. Lynn, 376 F.Supp. 327 
(S.D. N.Y. 1974) 16

Evers v. Dwyer, 358 U.S. 205 (1958) 25
Flast v. Cohen, 392 U.S. 93 (1968) 13,20
Frothingham v. Mellon, 362 U.S. 447 (1923) 20
Hackett v. McGuire Bros., Inc., 3rd Cir.,
445 F.2d 442 12

Hamilton v. Miller, 447 F.2a 908 
(10th Cir. 1973) 25

Hardin v. Kentucky Ultilities Co., 390 
U.S. 1 (1968) 18

Harper v. Virginia Board of Elections,
363 U.S. 663 20

Harris' v. Jones, 296 F.Supp. 1082 (D. Mass.
1969) 25

Haythe v. Decker Realty, 468 F.2d 336 
(7th Cir. 1972) 28

Johnson v. Jerry Pals Real Estate, 485 
F.2d 528 (7th Cir. 1973) 28

CASE Page

iii



Ca s e Page
Kennedy Park Homes Assoc, v. City of
Lackawanna, 318 F.Supp. 669 (W.D. N.Y. 
1970), aff'd 436 F.2d 809 (2nd Cir. 1970) 11,22

Linda R.S. v. Richard D., 410 U.S. 614, 93 S.Ct. 1146 (1973) 16,18
McGowan v. Maryland, 336 U.S. 420 20
Muskrat v. U.S., 219 U.S. 346 (1911) 13
NAACP v. Button, 371 U.S. 415 (1963) 11
Newbern v. Lake Lorelei, Inc., 308 
F.Supp. 407 (S.D. Ohio 1968) 25

Orange County Fair Housing Council v.
The Irvine Co., (C.D. Cal. No.73-861 HP) 22

O'Shea v. Littleton, 414 U.S. 488, 94 S.Ct. 669 (1974) 25,28
Park View Heights v. City of Black Jack, 
467 F.2d 1208 (8th Cir. 1972) 21

Pierson v. Ray, 387 U.S. 547 (1967) 25
Scheuer v. Rhodes, U.S. , 94 S.Ct. 
1683 (1974) 21

Schlesinger v. Reservists Committee To 
Stop the War, U.S. , 94 S.Ct. 
2925 (1974) 20

Seaton v. Sky Realty Co., (No. 70-C 792 
M.D. 111. 1972), aff'd 491 F.2d 634 
(7th Cir. 1974) 25

Shannon v. HUD, 436 F.2d 809 (3rd Cir. 
1970) 11,17,18

Sierra Club v. Morton, 405 U.S. 727, 
92 S.Ct. 1361 (1972) 8,11,18

Sisters of Providence v. City of Evanston, 
335 F.Supp. 396 (N.D. 111. 1971) 11,22

Steele v. Title Realty, 478 F.2d 390 
(10th Cir. 1973) 28

IV



CASE Page
Trafficante v. Metropolitan Life Insurance 
Co., 409 U.S. 205, 93 S.Ct. 364 (1972) 7,10,11,13,14,15,

16,17,18,21,23,24,28
U.S. v. Hunter, 459 F.2d 205 (4th Cir.
1972) 29

U.S. v. Peachtree Tenth Corp., 437 F.2d 
221,227 (5th Cir. 1971) 23

U.S. v. Pelzer Realty, 484 F.2d 438 
(5th Cir. 1973) 28

U.S. v. Richardson, U.S. , 94
S.Ct. 2940 (1974) 20

U.S. v. Students Challenging Regulatory 
Agency Procedures (SCRAP), U.S. ,
93 S.Ct. 2405 (1973) 19,21

U.S. v. Youritan Construction Co., 370 
F.Supp. 643 (N.D.Cal. 1973) 25

Williamson v. Hampton Management Co.,
339 F.Supp. 1146 (N.D. 111. 1972) 25
Zuch v. Hussey, 366 F.Supp. 553 (E.D.
Mich. 1973) 9,27

STATUTES
Administrative Procedure Act

5 U.S.C. §702.................  12,18,19,20
Civil Rights Act of 1866

42 U.S.C. §1981...............  22
42 U.S.C. §1982...............  2,3,5,6

Civil Rights Act of 1964
42 U.S.C. §2000e-5(d).........  12

Fair Housing Act of 1968
42 U.S.C. §3601 et seq......... 1,2,3,5,6,8,11,14,

22,26
v



STATUTES Page
Fair Housing Act of 1968 (Cont'd)

42 U.S.C. §3602 (d)..... ....... 11
42 U.S.C. §3604...............  25
42 U.S.C. §3604 (a)............  9,27
42 U.S.C. §3604 (b)............  9,27
42 U.S.C. §3604 (c)............  23
42 U.S.C. §3604 (d)............  9,27
42 U.S.C. §3610................ 7,11,29
42 U.S.C. §3610(a)............  8,15,18
42 U.S.C. §3612...............  10,11,29
42 U.S.C. §3613...............  23,29

28 U.S.C. §1292 (b)................... : . . . 3

OTHER AUTHORITIES
Senate Committee on Banking and Currency 
on S.358, S.2214 and S.2280, 90th Cong.
1st Sess. (1967) ........................  8

vi



IN THE
UNITED STATES COURT OF APPEALS 

FOR THE NINTH CIRCUIT 
NO. 74-2147

TOPIC, et al.,
Plaintiffs-Appellees,

v.
CIRCLE REALTY, SPRING REALTY, and 
SHOREWOOD REALTY COMPANIES,

Defendants-Appellants

Appeal From the United States District Court 
For the Central District of California

ISSUE PRESENTED FOR REVIEW 
Whether plaintiffs' claims under the Fair 

Housing Act of 1968, 42 U.S.C. §3601 et seq., meet the 
requirements of standing and case or controversy under 
the Act and under Article III of the Constitution.

1



STATEMENT OF THE CASE
This joint interlocutory appeal is from the 

ruling of the district court denying motions to dismiss 
in three actions brought separately againt Circle Realty 
Company, Spring Realty Company, and Shorewood Realty 
Company.

The actions were instituted on March 6, 1974. 
Plaintiffs are the same in the three actions. The comp­
laints allege that defendants are engaged in the real estate 
business in the communities in which plaintiffs reside. 
Plaintiffs, an organization and thirteen private individuals, 
brought the actions as class actions on their own behalf 
and on behalf of other residents claiming to be aggrieved 
by defendants' real estate practices, which are alleged 
to violate the Fair Housing Act of 1968, 42 U.S.C. §3601 
et seq., and the Civil Rights Act of 1866, 42 U.S.C. §1982. 
Plaintiffs seek declaratory and injunctive relief.

On April 3 and 9, 1974, defendants moved to 
dismiss the complaints for lack of standing of plaintiffs 
and for lack of case or controversy within the meaning of 
Article III of the Constitution of the United States. In 
a memorandum opinion and order dated May 20, 1974 (reported 
at 377 F.Supp. Ill), the district court held that plaintiffs' 
claims under the Fair Housing Act of 1968, 42 U.S.C. §3601 
et seq., met the requirements of standing and case or 
controversy, and denied dismissal of these claims. However,

2



the Court held that the allegations under the Civil Rights 
Act of 1866, 42 U.S.C. §1982, failed to meet these require­
ments, and ordered dismissal of the claims based on that 
statute.

The district court further found that its 
rulings involved controlling questions of law as to which 
there is substantial ground for difference of opinion 
within the meaning of 28 U.S.C. §1292 (b) , and certified 
the rulings for immediate appeal. All proceedings in 
the district court were stayed pending appeal. Thereafter, 
by order dated June 18, 1974, this Court granted defendants' 
petition for leave to take an interlocutory appeal from 
the district court's rulings on plaintiffs' claims under 
the Fair Housing Act of 1968, 42 U.S.C. §3601 et seq.

STATEMENT OF FACTS
The three complaints involved in the instant 

appeal are nearly identical. Plaintiffs are the same in 
al three cases. Plaintiff TOPIC ("To Preserve Integrated 
Community") is alleged to be an unincorporated association 
with an interracial membership of approximately 100 
member families living in the cities of Carson and Torrance, 
California, and in the unincorporated section of Los Angeles 
County between Carson and Torrance (hereinafter the "L.A. 
County strip") (C.T. , Vols. I,II & III a-t 1, 1[2) . The name 
of the organization —  "To Preserve Integrated Community" —

3



connotes one of its purposes, which is to eliminate unlawful 
discrimination against its members and other persons in 
the marketing and sale of housing in the Carson-Torrance 
area (C.T.,Vols. I, II & III at 1, 112).

The named individual plaintiffs are black and 
white residents of Carson, Torrance and the L.A. County 
strip (C.T., Vols. I, II & III at 2, 1[3). Plaintiffs 
Margaret Anderson and Eleanor Nowicki are white residents 
of Torrance, California. Plaintiffs William Bowers,
Elizabeth Bowers, William Ferguson and Helen Ferguson, 
who are black, and Miguel Silva, Camille Farrington and 
Carl Farrington, who are white, are all residents of Carson, 
California. Plaintiffs Patty Mortl and Michael Mortl, 
who are white, and Edward Midget and Louise Midget, who 
are black, are all residents of the L.A. County strip.

TOPIC, on behalf of its members, and the named 
individual plaintiffs allege in the complaints that they 
are injured by certain acts, policies and practices of 
defendants which have contributed to and exacerbated 
racial segregation in housing in Carson, Torrance, and 
the L.A. County strip (C.T., Vols. I, II & III at 1,2 &
3, 11112,3 &6) . Plaintiffs describe their injury as the 
deprivation of the important social and professional 
benefits of living in an integrated community (C.T. Vols.
I, II & III at 1 and 2, 1(1|2 & 3). They further allege 
that they have suffered and will continue to suffer injury

4



as a result of defendants' acts, policies and practices 
from embarrassment and economic damage in their social 
and professional activities from being stigmatized as 
residents of either white or black ghettos (1M|2,3).

The complaints allege (C.T., Vols. I, II & III 
at 3, 1|7) that from July-November, 1973 , an investigation 
was conducted to determine whether the policies and prac­
tices of real estate companies doing business in Carson, 
Torrance and the L.A. County strip comply with the 
requirements of the Fair Housing Act of 1968, and the 
Civil Rights Act of 1866. The focus of the investigation 
was to determine whether the companies investigated prac­
tice racial steering. Racial steering is defined in the 
complaint as the practice of directing non-white homeseekers 
to housing in designated minority residential areas, and 
of directing white homeseekers to housing in designated 
white residential areas. Plaintiffs assert that this 
practice violates the Fair Housing Act of 1968, and the 
Civil Rights Act of 1866. The investigation was conducted 
through the use of "testers", teams of black and white 
couples posing as homeseekers who were matched so that 
their housing needs and ability to pay were for practical 
purposes identical. The teams visited the offices of 17 
realty firms including those of defendants (C.T., Vols. I, II 
& III at 3, fl7) .

Thereafter, the complaints describe the experiences

5



of testers who visited the offices of each of defendants 
herein. Plaintiffs allege finally that the experiences 
of the testers reflect the policy and practice of each 
defendant to provide different treatment to homeseekers 
based on their race. The experiences of the testers show 
the policy and practice of defendants to direct non-white 
homeseekers to housing in designated minority neighborhoods 
and to direct white homeseekers to housing in designated 
white residential areas. The complaints then, allege 
that the acts, policies and practices of defendants violate 
the rights of plaintiffs and those they represent guaranteed 
by the Fair Housing Act of 1968, and the Civil Rights Act 
of 1866.

6



ARGUMENT
I.

PLAINTIFFS HAVE STANDING TO MAINTAIN
THIS SUIT UNDER THE FAIR HOUSING ACT
OF 1968_____________________________

In Trafficante v. Metropolitan Life Insurance 
Co., 409 U.S. 205, 93 S.Ct. 364 (1972), the Supreme Court 
of the United States held in a unanimous opinion that two 
tenants of an apartment complex with 8200 residents 
in San Francisco had standing under the Fair Housing Act 
of 1968, 42 U.S.C. §3610, to challenge alleged discrimina­
tory practices by their landlord. The complaint in that 
case alleged that the owner discriminated against non­
white applicants in numerous ways, such as making it known 
to them that they would not be welcome, manipulating 
the waiting list for apartments, delaying action on their 
applications, using discriminatory acceptance standards, 
and the like. The plaintiffs claimed that they had been 
injured by (1) losing the social benefits of living in 
an integrated community; (2) missing business and 
professional advantages which would have accrued if they 
had lived in the same community with members of minority 
groups; and (3) suffering embarrassment and economic damage 
in social, business and professional activities from 
being "stigmatized" as residents of a "white ghetto."

In finding that the plaintiffs had standing,

7



the Supreme Court pointed out that §3610(a) extends the 
right to sue to "any person who claims to have been injured 
by a discriminatory housing practice," and that this language 
showed a congressional intention to define standing as 
broadly as is permitted by Article III of the Constitution. 
The Supreme Court further noted that in enacting the leg­
islation Congress recognized that "[w]hile members of 
minority groups were damaged the most from discrimination 
in housing practices... those who are not the direct
objects of discrimination had a interest in ensuring

1/fair housing, as they too suffered." The Court concluded 
that,

"Individual injury or injury in fact to 
petitioners, the ingredient found missing 
in Sierra Club v, Morton, 405 U.S. 727, 
is alleged here. What the proof may be 
is one thing; the alleged injury to exis­
ting tenants by exclusion of minority 
persons from the apartment complex is the 
loss of important benefits from interracial 
associations." 93 S.Ct. at 367.
In the instant cases, plaintiffs assert injuries 

to themselves of a substantial and continuing nature within 
the ambit of the Fair Housing Act of 1968 as the result 
of defendants' alleged unlawful activities. They allege

1/ 93 S.Ct. at 367. The Court referred to hearings
before the Subcommittee on Housing and Urban Affairs of 
the Senate Committee on Banking and Currency on S.358, 
S.2114, and S.2280, 90th Cong., 1st Sess. (1967).



that there is substantial racial segregation in the Carson-
Torrance area and that it results in part from the policies
and practices of defendants, specifically "racial steering,"
which is the practice of directing non-white homeseekers
to housing in designated minority residential areas, and
white homeseekers to housing in designated white residential

2/
areas. The various methods used by defendants are illus­
trated in the complaint. They include refusing to 
disclose to blacks the availability of housing in all 
white neighborhoods and communities such as Torrance 
and actively encouraging black homeseekers to buy homes 
in predominantly black neighborhoods or areas of Carson 
rather than in all white neighborhoods or communities 
such as Torrance for which they have expressed a preference; 
and discouraging white prospects from seeking housing in 
areas substantially inhabited by blacks in Carson, for 
which the whites expressed a preference, all through 
the use of inflammatory, racist remarks and innuendo about 
blacks.

The complaints further allege that the members 
of TOPIC and the named individual plaintiffs, all of whom 
reside in the communities in which defendants are alleged to 
be engaged in racial steering of homeseekers, are injured

2/ Racial steering violates the Fair Housing Act of 1968,
42 U.S.C. §3604(a),(b) and (d). Zuch v. Hussey, 366 F.Supp. 
553 (E.D. Mich. 1973).

9



by the conduct complained of by being deprived of the 
important social and professional benefits of living in 
an integrated community. Plaintiffs allege that they 
have suffered and will continue to suffer embarrassment 
and economic damage in their social and professional 
activities from being stigmatized as residents of either 
white or black ghettos because of defendants' acts (C.T., 
Vols. I, II & III at 1 & 2, 111(2,3). The complaints conclude 
with the allegations that the policies and practices of 
defendants collectively referred to as racial sterring 
and illustrated by the specific examples cited in the 
complaints injure plaintiffs and violate their rights 
under the Fair Housing Act of 1968, 42 U.S.C. §3612.

Plaintiffs thus assert injuries to themselves 
of a substantial and continuing nature resulting from 
defendants' real estate policies and practices. They 
allege that these policies and practices have contributed 
to the creation, preservation and exacerbation of a 
pattern of racial segregation in housing in the Torrance- 
Carson area, and have deprived plaintiffs of the benefits 
of interracial associations that arise from living in an 
integrated community. Plaintiffs' allegations of injury 
in fact are not meaningfully different from those in 
Trafficante, and they state good causes of action under

10



the Fair Housing Act of 1968.
Defendants contend that while plaintiffs may have

alleged injury sufficient to meet that requirement as defined
4/

in Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361 (1972), 
plaintiffs' alleged injuries are not "arguably within the 
zone of interests to be protected or regulated" by the 
Fair Housing Act citing Association of Data Processing 
Service Organizations v. Camp, 397 U.S. 150 (1970) and

V

3/ In Trafficante, plaintiffs were proceeding under §3610, 
which authorizes suits to be filed by "persons aggrieved," 
while in the instant case, plaintiffs were proceeding under 
§3612, which does not contain a specific definition of 
those entitled to sue. However, there is nothing to 
indicate that Congress intended a narrower class of persons 
to sue under §3612 than under §3610 for redress of the same 
violations. The district court so found. 377 F.Supp. at 
115, n.5.

In addition, insofar as plaintiff TOPIC is con­
cerned, there is no doubt that an organization alleging 
injury in fact to its members has standing to represent 
those members in a proceeding for judicial review. California
Bankers Ass'n. v. Shultz, __ U.S. ___, 94 S.Ct. 1494, 1509
(1974); Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361,
1368 (1972); NAACP v. Button, 371 U.S. 415, 428 (1963). Such 
proceedings are well known under the Fair Housing Act of 
1968. Shannon v. HUD, 436 F.2d 909 (3rd Cir. 1970); Kennedy 
Park Homes Associates v. City of Lackawanna, 318 F.Supp. 669 
(W.D. N.Y. 1970), aff'd 436 F.2d 809 (2d Cir. 1970); Sisters 
of Providence v. City of Evanston, 335 F.Supp. 396 (N.D. 111. 
1971). Moreover, the Fair Housing Act expressly provides 
that a "person" entitled to the protection of the Act includes 
an organization such as plaintiff herein. 42 U.S.C. §3602(d).
4/ In Sierra Club, the Supreme Court held an environmental 
association which failed to assert any "individual injury" 
to itself or its members, lacked standing to challenge a 
development. It held that mere "concern" with, or "interest" 
in the proposed development was not, of itself, sufficient 
to confer standing under the requirement of "injury in fact."

The Court noted that in deciding the case, it did not 
reach any question of the application of the "zone of interests" 
test to the facts of that case. 92 S.Ct. at 1365, n.5.

11



Barlow v. Collins, 397 U.S. 1959 (1970). Defendants 
contend that apart from persons seeking to rent or 
purchase housing, the Supreme Court in Trafficante express­
ly limited the scope of standing under the Act to existing 
tenants of housing projects complaining of their landlord's
discriminatory practices, and that plaintiffs do not fit

6/within any of these categories.
Defendants' analysis of Trafficante must be

1/

5/ In these cases the Supreme Court held that persons had 
standing to obtain judicial review of federal agency action 
under §10 of the Administrative Procedure Act where they 
alleged that the challenged action had caused them "injury 
in fact," and where the alleged injury was to an interest 
"arguably within the zone of interests to be protected or 
regulated" by the statutes that the agencies were claimed 
to have violated. Section 10 of the Administrative Procedure 
Act (APA), 5 U.S.C. §702, provides:

"A person suffering legal wrong because of agency 
action, or adversely affected or aggrieved by 
agency action within the meaning of a relevant 
statute is entitled to judicial review thereof."

6/ Defendants rely on the following language from the Court's 
opinion in Trafficante:

"It is apparent, as the Solicitor General says, 
that complaints by private persons are the 
primary methods of obtaining compliance with 
the Act. Hackett v. McGuire Bros., Inc., 3rd. 
Cir., 445 F.2d 442, which dealt with the phrase 
that allowed a suit to be started 'by the person 
claiming to be aggrieved' under the Civil Rights 
Act of 1964, 42 U.S.C. §2000e-5(d), concluded 
that the words showed 'a congressional intention 
to define standing as broadly as is permitted 
by Article III of the Constitution.' Id., at 
446. With respect to suits brought under the 
1968 Act [footnote omitted], we reach the same 
conclusion insofar as tenants of the same housing 
unit that is charged with discrimination are con­
cerned.7' 93 S.CtT at 366-67 (emphasis added)

12



rejected. The alleged injuries to plaintiffs resulting
from defendants' continuing conduct are to interests
"arguably within the zone of interests to be protected"
by the Act. To say that the Court in Trafficante "expressly
limited" standing under the Fair Housing Act of 1968
to existing tenants of housing projects complaining of
their landlord's discriminatory practices would be to
place an unawarranted restriction on that decision and would
ignore both the language and the purpose of the statute.
Under Article III of the Constitution, the judicial power
is limited to "cases" and "controversies." As the district

7/
court made clear, to be justiciable a controversy "must 
be definite and concrete, touching the legal relations 
of parties having adverse legal interests... It must be 
a real and substantial controversy admitting of specific 
relief through a decree of a conclusive character, as 
distinguished from an opinion advising what the law would 
be on a hypothetical state of facts." Aetna Life Insurance 
Co., v. Sawoth, 300 U.S. 227, 240-41 (1937); Muskrat v.
U.S., 219 U.S. 346 (1911). See, Flast v. Cohen, 392 
U.S. 93, 94-97 (1968). The only issue in Trafficante 
was whether tenants in a housing project had standing to 
challenge alleged discriminatory practices of their landlord, 
and the Supreme Court held that they did under the Fair

7/ 377 F.Supp. at 114, n.4

13



Housing Act of 1968. The standing to sue under the Act of 
other plaintiffs in other situations, such as that in 
the instant cases ,was not before the Court. Thus, to say 
that the Court in Trafficante "expressly" precluded such 
other plaintiffs from pursuing remedies under the Act 
would require that the Court in that case have rendered 
an advisory opinion on a hypothetical state of facts, 
which, in light of Article III, the Court clearly would not 
do. Since defendants’ interpretation of Trafficante as 
expressly limiting standing under the Act to existing 
tenants of housing projects complaining of their landlord's 
discriminatory practices compels that conclusion, that 
interpretation should be rejected.

Moreover, neither Article III nor the language 
and purpose of the Fair Housing Act as construed by the 
Court in Trafficante in fact foreclose the elaboration 
on that ruling sought herein. The district court agreed, 
and we adopt its analysis.

"The Court's language presupposes some outer 
limits to the rule enunciated, but the situations 
in the two cases are so similar there seems 
to be no just reason for setting such limits 
short of the facts of the case before the court.
"It is, of course, true that the apartment 
complex with which the Supreme Court was dealing 
had a resident population of approximately 8200 
residents, whereas the Torrance-Carson community 
has a population of something over 100,000.
Its residents, however, live in a closely 
settled area [footnote omitted]. Those residing 
in this community buy from the same stores, 
attend the same churches, send their children

14



to the same schools. They are served by 
the same recreational facilities and enjoy the 
same cultural opportunities. If any of the 
8200 residents of an apartment complex can 
be injured by virtue of the loss of important 
benefits from interracial associations surely 
the residents of the Carson-Torrance community 
can and do suffer similar privations." 377 
F.Supp. at 114.

A "person aggrieved" under the Fair Housing Act 
of 1968 is defined broadly as "any person who claims

8/
to have been injured by a discriminatory housing practice."
The Court in Trafficante found that Congress had recognized
that although members of minority groups were injured the
most from housing discrimination, those who were not the
direct objects of discrimination had an interest in ensuring

9/
fair housing since they also suffered. The drafter of
§3610(a), Senator Mondale, said that the reach of the
proposed law was to replace the ghettos "by truly integrated

10/
and balanced living quarters." As residents of the area 
in which defendants are alleged to practice unlawful 
discrimination in the marketing of housing, plaintiffs 
suffer injury from defendants' conduct and may properly 
invoke the Act to remedy the personal "loss of important 
benefits from interracial associations" within the meaning

8/ 42 U.S.C. §3610(a).
9/ 93 S.Ct. at 367.

10/ Id. at 368.

15



of Trafficante. There is thus a real and substantial con­
troversy between the parties which has been presented in 
an adversary context. Moreover that controversy admits 
of specific relief through a decree of conclusive character. 
The declaratory and injunctive relief sought in these 
proceedings is traditional in actions for violations of 
civil rights and is directly responsive to the injuries 
sustained by plaintiffs from defendants' conduct. There 
is thus also a "direct nexus" between vindication of plain­
tiffs' interests and enforcement by the Court of the Fair 

11/Housing Act.
12/

The size of the "housing unit" in the instant

11/ Compare, Linda R.S. v. Richard D., 401 U.S. 614, 93 
S7ct. 1146 ("1973), in which the mother of an illegitimate
child sought to enjoin discriminatory application of a Texas 
criminal non-support law, which was enforced only against 
legitimate fathers. The court held that since the prospect 
that criminal prosecution of illegitimate fathers would in 
the future result in the payment of child support was at 
best only speculative, there was insufficient nexus between 
plaintiff's alleged injury and the governmental action she 
attacked. Plaintiff therefore lacked standing.

Compare also, Evans v. Lynn, 376 F.Supp. 327 
(S.D. N.Y. 1974)7 in which injunctive relief was sought to 
restrain federal agencies from supplying funds to the Town 
of New Castle for construction of sewage facilities and 
clearance of a swamp area for recreational use. Plaintiffs 
were impoverished, minority ghetto residents of an adjoining 
town. They alleged that they were prevented from living in New 
Castle because of the town's zoning ordinances, which had the 
effect of limiting residents to white middle class persons.
The court held that plaintiffs lacked standing because their 
alleged injury had no relation to the funding of the projects 
in question, and that restraining the funding would not in any 
way alleviate plaintiffs' situation.
12/ See note 6 supra.

16



cases,in contrast to that in Trafficante merely make the
injury to plaintiffs more compelling. The complaints 
allege in effect that the result of defendants' unlawful 
practices is to make the city of Torrance and the L.A.
County strip huge lily-white preserves, while blacks and 
only blacks are offered housing in city of Carson. Inevitably, 
such a result will make the schools, churches and other 
fundamental community organizations racially identifiable 
and thus enhance the movement "toward two societies, one

13/black, one white —  separate and unequal" —  with all 
the attendant problems. Residents such as plaintiffs 
of the communities concerned claiming injury from defendants' 
alleged practices should have standing under Trafficante 
to prevent that substantial unlawful result.

This position finds support in Shannon v. HUD,
436 F.2d 809 (3rd Cir. 1970), cited in Trafficante, supra 93 
S.Ct. at 368. In Shannon, the defendants challenged the 
standing of white and black residents and businessmen in 
a Philadelphia urban renewal area to oppose the construct­
ion of a low-income housing project in their neighborhood.
The plaintiffs claimed that "the concentration of low 
income black residents... in their neighborhood [would] 
adversely affect not only their investment in homes and 
business, but even the very quality of their daily lives."

13/ Report of the National Advisory Commission on Civil 
Disorders (1968), p.l.

17



436 F.2d at 818. That concern, the court held, was
clearly cognizable without regard to the fact that the
plaintiffs were not the immediate displacees (i.e.,
victims) of the proposed project. In finding that the
plaintiffs had standing the court relied on §702 of the
Administrative Procedure Act, which gives standing to
persons claiming to be aggrieved by agency action within

15/
the meaning of the statute. That provision is essentially
identical to the standing provision of the Fair Housing

16/
Act of 1968, 42 U.S.C. §3610(a).

14/

14/ Suit was brought under the Fair Housing Act of 1968 and 
other statutes.
15/ §702 appears in its entirety in note 5, supra.
16/ Defendants attempt to distinguish Shannon and also 
Trafficante from the instant cases on the ground that the courts 
have generally been more lenient in finding standing where review 
of agency action was sought (Appellants' Joint Brief, pp.15-17). 
We submit that, rather than agency action, the important factor 
in such cases is a statute, such as §702 of the Administrative 
Procedure Act or its counterpart in the housing area, §3610(a) 
of the Fair Housing Act of 1968, which by its terms confers 
standing on a litigant to seek legal redress. Mr. Justice White 
relied on this fact in Trafficante, supra 93 S.Ct. at 368 , in 
his concurring opinion, and it was recently noted in Linda R.S. 
v. Richard D:

"It is, of course true that 'Congress may not confer 
jurisdiction on Article III federal courts to render 
advisory opinions.' Sierra Club v. Morton, 405 
U.S. 727, 732, n.3 (1972). But Congress may enact 
statutes creating legal rights, the invasion 
of which creates standing, even though no injury 
would exist without the statutes. See e,g., Traffi-
cante v. Metropolitan Life Ins., Co., ___ U.S.___,
93 S.Ct. 364, 368 (White,J., concurring); Hardin 
v. Kentucky Utilities Co., 390 U.S. 1,6 (1968)."
93 S.Ct. 1146 , 1148~, n.3.

It should also be noted that a review of the record 
in Trafficante (of which this Court may take judicial notice) 
does not disclose any evidence of HUD involvement in

18



Another analogous case is U.S. v. Students
Challenging Regulatory Agency Procedures (SCRAP), ___ U.S.
___, 93 S.Ct. 2405 (1973) , in which a group of environmentally-
minded law students sought, under the Administrative Procedure 
Act, 5 U.S.C. §702, to enjoin enforcement of an Interstate 
Commerce Commission order granting a freight rate increase 
to railroads. The plaintiffs alleged that increased rates 
would discourage the recycling of materials, causing 
further degradation of the environment and harming plain­
tiffs by affecting their use and enjoyment of the natural 
resources of the Washington area.

The Court held that the plaintiff had standing.
In reaching that conclusion the Court addressed an argument 
which defendants have made herein (Appellants' Joint 
Brief, pp.20-25). In SCRAP the argument was made that 
"all who breathe. ..air" could claim harm similar to that 
alleged by the plaintiff, and further, that the injury 
alleged to the environment was not "direct" or "percepti­
ble" and was the product of a very "attenuated line of 
causation." 93 S.Ct. at 2416. The government argued that 
standing should be limited to those who had been "significant­
ly" affected by the agency action. The Court rejected

16/ (CONT'D) the development and management of the 
apartment complex in question in that case. We read the 
language in the opinion which gave rise to this speculation 
—  "under the auspices of HUD" (93 S.Ct. at 368)—  to mean 
"covered by the Act."

19



this approach.
"...[E]ven if we could begin to define what 
such a test would mean, we think it fundamentally 
misconceived. 'Injury in fact' reflects the 
statutory requirement that a person be 'adversely 
affected' or 'aggrieved,' and it serves to dis­
tinguish a person with a direct stake in the 
outcome of a litigation —  even though small —  
from a person with a mere interest in the 
problem. We have allowed important interests 
to be vindicated by plaintiffs with no more stake 
in the outcome of an action than a fraction 
of a vote, see Baker v. Carr,369 U.S. 196; 
a five dollar fine and costs, see McGowan v . 
Maryland, 366 U.S. 420; and a $1.50 poll tax, see 
Harper v. Virgina Board of Elections, 363 U.S. 
663. While these cases were not dealing 
specifically with §10 [§702] of the APA, we 
see no reason to adopt a more restrictive 
interpretation of 'adversely affected' or 
'aggrieved.' So Professor Davis has put it:
'The basic idea that comes out in numerous 
cases is that an identifiable trifle is enough 
for standing to fight out a question of princi­
ple; the trifle is the basis for standing 
and the principle supplies the motivation.'
Davis, Standing: Taxpayers and Others, 35 U.Chi. 
L.Rev. 601, 613." 17/ 93 S.Ct. at 2417, n.14.

Likewise, in the instant cases, the formulas advanced by

17/ Nothing said in U.S. v. Richardson, ___ U.S. ___, 94
S7ct. 2970 (1972), or Schlesinger v. Reservists Committee to
Stop the War, ___ U.S. ___, 94 S.Ct. 2925 (1974), on which
defendants rely, calls for a different conclusion. The 
plaintiffs there brought both suits in their capacity as 
federal taxpayers. Such an interest is generally insufficient 
for purposes of standing, Frothingham v. Mellon, 262 U.S.
447, 488 (1923), unless the plaintiffs can show that con­
gressional action under the taxing and spending clause of 
the Constitution is in derrogation of the constitutional 
provisions which operate to restrict the exercise of the 
taxing and spending power. Flast v. Cohen, 392 U.S. 93,
105-06 (1968). In both Richardson and Sphlesinger, the Court 
held that the plaintiffs lacked standing because they failed 
to meet this test. In Schlesinger, the plaintiffs sued 
also in their capacity as citizens.- The Court held that 
this interest was insufficient for standing, since the injury 
alleged was "merely abstract" and not "concrete." 94 S.Ct. at 
2932-33.

20



defendants —  "sufficient community of interests" and
"privity of relationships" —  are fundamentally misconceived,
even if defendants had actually begun to define what they

18/
mean. "Injury in fact" has been alleged by plaintiffs. 
Moreover, as we have argued above, it is apparent from the 
statute and the legislative history that persons such as 
plaintiffs who show injury in fact are entitled to relief 
under the Act. If defendants believe plaintiffs' allegations 
are untrue or incapable of proof at trial, then they should 
have moved for summary judgment on the standing issue, 
as the Court indicated might be appropriate in U.S. v.
SCRAP, supra 93 S.Ct. at 2416-17.

Park View Heights Corp. v. City of Black Jack,
467 F.2d 1208 (8th Cir. 1972) is also similar to the 
instant cases. There, two non-profit development corpora­
tions challenged a city zoning ordinance restricting 
development to single family dwellings whicii was allegedly 
passed to block development of multi-unit low-income 
housing. The court of appeals held that the corporation 
which had provided the seed money for such a project prior 
to the adoption of the ordinance had standing. It held that

18/ It is a settled principle that for the purposes of 
a-motion to dismiss, the allegations of the complaint
are assumed to be true. Scheuer v. Rhodes, __ U.S. __
94 S.Ct. 1683, 1686 (1974); Trafficante v. Metropolitan
Life Ins. Co., 446 F.2d 1162, n.8 (9th Cir. 1971).

21



the corporation had sufficient personal stake in the outcome 
of the controversy to litigate the claim that the zoning 
ordinance amounted to a taking of property without due 
process of law. The court further held that the corpora­
tions had standing under the Civil Rights Act of 1866,
42 U.S.C. §1981 and §1982, and the Fair Housing Act of 
1968 to question the purpose and effect of the 
zoning ordinance on the rights of poor and minority people 
who desired to live in the city. The court reasoned that 
it was as "important to protect the right of sponsors and 
developers to be free from unconstitutional interferences 
in planning, developing and building an integrated housing 
project, as it is to protect the rights of potential 
tenants of such projects." Id. at 1212. See also,
Kennedy Park Homes Association, Inc., v. City of Lacka­
wanna, 436 F.2d 109 (3rd Cir. 1970); Sisters of Providence 
v. City of Evanston, 335 F.Supp. 396 (M.D. 111. 1971).

Finally, in an unreported case litigated under
the Fair Housing Act of 1968 in the district court below, a
plaintiff similar to plaintiffs herein were found to have
standing. Orange County Fair Housing Council v. The Irvine

19/
Co. , (C.D., Cal. No. 73-861 HP). There the plaintiff
alleged that the failure and refusal of defendant to include

19/ The pertinent papers from the record in that case are in­
cluded in the records of the instant cases. (C.T., Vol. I at 
35-82; Vol. II at 36-83; Vol. Ill at 47-94.)

22



blacks amoung the human models in the pictorial advertising 
for its housing developments in Orange County violated 
the advertising provisions of the Fair Housing Act of 1968,
42 U.S.C. §3604(c), because such exclusion had the effect 
of discouraging qualified black applicants from seeking 
housing in defendant's housing developments. The plaintiff 
further alleged that the exclusion of blacks from the adver­
tising thus reenforced patterns of racial segregation in 
Orange County generally. The plaintiff was an interracial, 
volunteer organization, similar to TOPIC, formed for the 
purpose of assuring to its membership the right to the 
important social and professional benefits of interracial 
associations that arise from living in an integrated 
community. That membership was made up of residents of 
Orange County, including residents of the housing develop­
ments of the defendant Irvine Company. Irvine moved to 
dismiss for lack of standing in reliance on the same 
strained interpretation of Trafficante as urged in the 
instant case. The district court (Pregerson, J.) denied 
Irvine's motion on its merits.

Defendants contend finally that insofar as 
this suit seeks to eliminate a "policy or practice" 
of discrimination, it can only be brought by the Attorney 
General under §3613. The latter section- has been interpreted 
to mean that he may not litigate an "isolated or accidental 
or peculiar event." U.S. v. Peachtree Tenth Corp., 437

23



F.2d 221, 227 (5th Cir. 1971). However, nothing in
the language or history of the Act suggests that this
limitation on the Attorney General's power should operate
to preclude injured private parties from complaining about
discriminatory patterns and practices. The limitations
on the power of the Attorney General are far better
read as an effort to conserve and -focus the Attorney
General's limited resources to enforce the fair housing
laws, as the Court noted in Trafficante, supra 93 S.Ct.
at 367, than read as an indication that Congress intended
to limit the right of aggrieved persons to seek private

20/
enforcement of these laws.

For all the reasons stated, the Court should find 
that plaintiffs meet the requirements of standing under 
both the Fair Housing Act and Article III of the Consti­
tution.

20/ Defendants have also argued that "TOPIC seeks to impose 
an affirmative duty upon the realtors to effect racial inte­
gration throughout the area by 'inverse' racial steering" 
(Appellants' Joint Brief, p.25). This is sheer nonsense. 
There is nothing in the pleadings or other papers on file 
to support defendants' statement. What plaintiffs seek is 
injunctive relief to eliminate artificial barriers created by 
defendants to prevent stable integrated housing patterns from 
developing.

24



II.
THERE IS A CASE OR CONTROVERSY 
WITHIN THE MEANING OF ARTICLE 
III OF THE CONSTITUTION

Defendants argue in reliance on O'Shea v.
Littleton, 414 U.S. 488, 94 S.Ct. 669 (1974), that the
"case or controvery" requirements of Article III have
not been met because the alleged practices of defendants
do not constitute illegal acts under 42 U.S.C. §3604.
They argue that all of the allegations of the complaints
concern factual situations involving testers. Defendants
contend that since the testers were not bona fide homeseekers,
they suffered no injury, and therefore plaintiffs suffered
no injury. None of these contentions has any merit.

Plaintiffs have not alleged that the injuries
they complain of arise solely from the experiences of
the testers who allegedly visited defendants' offices,
although evidence of the experience of testers is clearly

21/
admissible to prove discrimination. The complaints allege

21/ Evers v. Dwyer, 358 U.S. 205 (1958) (buses); Pierson v.
Ray, 387 U.S. 547 (1967) (bus terminals); Hamilton v. Miller,
477 F .2d 908 (10th Cir. 1973) (housing); Harris v. Jones, 296 
F.Supp. 1082 (D.Mass. 1969) (housing); Newbern v. Lake Lorelei, 
Inc., 308 F.Supp. 407 (S.D. Ohio 1968) (housing); Brown v.
Balias, 331 F.Supp. 1053 (N.D. Texas 1971) (housing);
Williamson v. Hampton Mgt. Co., 339 F.Supp. 1146 (N.D. 111. 1972) 
(housing); Seaton v. Sky Realty Co., (No. 70-C 792 M.D. 111.
1972) (housing), aff'd 491 F.2d 634 (7th Cir. 1974) (housing); 
U.S. v. Youritan Const. Co., 370 F.Supp. 643 (N.D. Cal. 1973). 
The district court indicated its agreement with this view in

25



an ongoing and sytemmatic course of unlawful conduct in 
violation of plaintiffs' rights under the Fair Housing 
Act of 1968. Plaintiffs alleged that there is substantial 
racial segregation in housing in the Carson-Torrance 
area and that it results in part from defendants' practice 
of racial steering, which is stated to be the practice 
of directing non-white homeseekers to housing in designated 
minority residential areas, and white homeseekers to housing 
in designated white residential areas. The experiences 
of the testers are cited in the complaint merely as 
illustrations of the various methods used by defendants.
They include refusing to disclose to blacks when asked 
the availability of housing in all white neighborhoods 
and communities such as Torrance, and actively encouraging 
black homeseekers to consider buying homes in predominantly 
black neighborhoods or areas of Carson rather than in all 
white neighborhoods or communities such as Torrance for 
which they expressed a preference; and discouraging white 
homeseekers from seeking housing in areas substantially 
inhabited by blacks in Carson for which the whites may 
have expressed a preference through the use of derogatory 
and inflammatory racist remarks and innuendo about blacks.

21/ (CONT'D) stating that,..."when a plaintiff alleges tnat the defendants have engaged in a prohibited discrim­
inatory practice, all that is needed to support an injunc­
tion is proof that the practice exists." 377 F.Supp. at 
114.

26



The complaints further allege that the named individual 
plaintiffs and the members of TOPIC, all of whom reside in 
the communities in which defendants are alleged to be 
engaged in racial steering, are injured by the conduct 
of defendants by being deprived of the important social 
and professional benefits of living in an integrated 
community.

In Zuch v. Hussey, 366 F.Supp. 553 (E.D. Mich.
1973) the court made it clear that racial steering violates 
42 U.S.C. §3604(a):

"It is the opinion of this Court that when 
a real estate agent actively undertakes an 
effort to influence the choice of a prospective 
homebuyer on a racial basis, the agent either 
directly or indirectly discourages the pros­
pective homebuyer from purchasing a home 
in a particular area and fosters the perpetua­
tion of racially segregated communities where 
available housing has been traditionally denied 
to blacks because of their race. The Court 
therefore, concludes that steering is a violation 
of §3604(a) of the Fair Housing Law." Id. at 
557.

Inasmuch as the racial steering alleged in the complaints 
involves the influencing of the choice of homeseekers on 
a racial basis and the selective disclosure of the avail­
ability of housing based on the race of the homeseeker, 
the steering also violates §3604(b) of the Act, which 
prohibits discrimination in the provision of services 
or facilities in connection with the sale of a dwelling 
based on race, and §3604 (d) , which forbids representing 
because of race that a dwelling is not available for

27



inspection or sale when the dwelling is in fact so available.
None of the cases on which defendants rely support

their arguments. In Trafficante there was no allegation
of refusal to rent to a specific bona fide homeseeker.
In that case, as in the instant one, there were allegations
of discrimination against blacks in violation of the Fair
Housing Act based on various described practices of de- 

22/
fendant. O'Shea v. Littleton, 414 U.S. 488, 94 S.Ct.
669 (1974) is not in point because there the court noted 
that none of the named plaintiffs suffered any injury 
in the manner specified in the complaint. 94 S.Ct. 676. 
That is not the situation in the instant cases. Plaintiffs 
have alleged specific injury to themselves as a result 
of defendants' alleged conduct violative of the Fair 
Housing Act. Johnson v. Jerry Pals Real Estate, 485 F.2d 
528 (7th Cir. 1973) is not relevant because plaintiffs 
have not contended that the rights of testers were violated. 
Neither are U.S. v. Pelzer Realty, 484 F.2d 438 (5th Cir. 
1973), Steele v. Title Realty, 478 F.2d 380 (10th Cir.
1973) or Haythe v. Decker Realty, 468 F.2d 336 (7th Cir.
1972) helpful to defendants. None of these cases involved 
a claim by the residents of a community that they were 
injured by discrimination in violation of the Act practiced

22/ A copy of the complaint in that case appears at C.T., 
Vol. I at 83.

28



23/in their communities. Moreover, as we have argued above, 
evidence of the experience of testers is clearly admissible 
to prove discrimination. Finally, U.S. v. Hunter, 459 F.2d 
205 (4th Cir. 1972) is not relevant because it deals with 
the requirements of 42 U.S.C. §3613, which authorizes 
the Attorney General to bring actions to enjoin a "pattern 
or practice" of discrimination, or when the denial of 
fair housing rights "raises an issue of general public 
importance." These limitations on the Attorney General's 
authority do not apply to suits brought pursuant to §3610 
or §3612 by "persons aggrieved." Defendants' contentions 
that the requirements of case or controversy have not been 
met should therefore be rejected.

CONCLUSION

For all the reasons stated, the ruling of the
district court should be affirmed.

Respectfully submitted,
LOWELL JOHNSTON 
WILLIAM E. HICKMAN 
SAMUEL T. BISCOE 
WILLIAM BENNETT TURNER 
MATTHEW C. LONG 
LOWELL JOHNSTON

By ________________________________Lowell Johnston 
Attorney for Appellees

DATED: December 13, 1974

23/ Note 21,supra.

29



CERTIFICATE OF SERVICE
This is to certify that on this the 13th day 

of December, 1974 two copies of the foregoing Appellees' 
Brief was served on each of the attorneys for appellants 
by United States mail, postage prepaid, addressed as 
follows:

Arthur W. Francis, Jr., Esq. 
Robert E. Jones, Esq.
Jones & Wilson 
Suite 1430
5900 Wilshire Boulevard
Los Angeles, California 90036
Carl B. Pearlston, Jr., Esq.
2706 Artesia Boulevard 
Redondo Beach, California 92078

LOWELL JOHNSTON
Lowell Johnston 
Attorney for Appellees