Merge v. Troussi
Merge v. Troussi
Opinion of the Court
OPINION OF THE COURT
This appeal is from an order of the District Court dismissing the action below for lack of jurisdiction. On March 14, 1966, appellants Merge and Hooper sued the several appellees, seeking to recover certain “relocation” moving expenses allegedly due them under federal law. Upon motion of appellee Urban Redevelopment Authority of Pittsburgh, the action was dismissed under F.R.Civ. P. 12 on the grounds that Congress had withdrawn jurisdiction of the Federal Courts by the 1964 amendments to the Federal Housing Act. We think the District Court’s dismissal was proper but the grounds for our affirmance require some elaboration.
Appellants Merge and Hooper
The Pittsburgh Authority had entered, on November 3,1960, into a contract with the United States Government under which the Federal Government gave certain financial assistance to the local Pittsburgh Authority. This contract, a “Title I Loan and Grant Contract,” was entered into by the appropriate federal administrative agency (now the appellee Urban Renewal Administration of the Department of Housing and Urban Development — hereinafter HUD) pursuant to the Federal Slum Clearance Act or Housing Act of 1949, as amended, 42 U.S.C. §§ 1441 et seq. Congress had provided in this statute that the Administrator of the federal agency (now appellee Secretary Weaver of HUD) could include in any Title I contract a provision permitting the local Authority to make “relocation payments” for which the Federal Government would reimburse the local Authority by an increase in the amount otherwise payable under the Title I contract. Relocation payments made pursuant to any such contract provision were to “be made subject to such rules and regulations prescribed by the [federal] Administrator.”
The appellants petitioned the Pittsburgh Authority for their allowable relocation expenses — “total certified actual moving expenses” — and received payment for the costs of moving from the one actually condemned building. Their request for the expenses of moving from
A re-examination of the opinions reveals two different theories of the nature of the plaintiffs’ cause of action. The plurality opinion accepted a stipulation for purposes of appeal that at trial the plaintiffs could prove the two separate buildings were a fully integrated business unit. The plurality then reasoned that a trial should be held to see if, factually, a taking had occurred of a “business concern” (which, on the record then before the court due to the stipulation, was a single unit despite one building being outside the renewal boundary) and, therefore, payment of less than all the moving expenses of the “business concern” would be an arbitrary or capricious administrative determination. The conclusion of the plurality opinion that the plaintiffs had both a cause of action and standing rests on the theory that the federal statute governing relocation payments (and the regulations promulgated thereunder) created a binding obligation of the United States, statutory in origin, and jurisdiction therefore existed under 28 U.S.C. § 1331
The dissenting opinion,
In 1964, the entire section of the Housing Act covering relocation payments, 42 U.S.C. § 1456(f), was repealed, effective September 2, 1964. The new provisions, 42 U.S.C. § 1465, provided for additional relocation benefits and changed the definitions and standards governing the payments. By 42 U.S.C. § 1465(d),
The record on this appeal contains a stipulation by the parties of the Title I contract between HUD and the Pittsburgh Authority entered into November 3, 1960, and, in addition, of the “Fourth Amendatory Contract” thereto signed February 25, 1965. This stipulation shows that § 8 of the original Title I contract (see 341 F.2d at 992, n. 4), which originally read, inter alia,
“ * * * payments which are made by the Local Public Agency * * * in accordance with the * * * ‘Rules and Regulations Governing Relocation Payments under Section 106(f) of the Housing Act of 1949, As Amended’ * * * ”10
was amended by § 4(a) of the Fourth Amendatory Contract by deleting the emphasized language so that the language beginning “ ‘Rules * * * ’ ” reads, inter alia,
“ * * * ‘Rules and Regulations Governing Relocation Payments under the Housing Act of 1949, As Amended’. * * *»
The appellants’ claim, therefore, is governed by the Federal Housing Act as presently amended. Their right to recovery, if any, arises because the denial of their certified moving expenses is discretionary action which so deviates from the federal statutory (and regulations) standards that the administrative determination by the Pittsburgh Authority is arbitrary and capricious. But under the statute and regulations as now amended, such administrative determinations are declared “final and conclusive for any purpose and not subject to re-determination by any court.”
Viewing this suit thus, as based on a “right” created by federal statute, we agree fully with the District Court that under Bruner v. United States, 343 U.S. 112, 72 S.Ct. 581, 96 L.Ed. 786 (1962); Smallwood v. Gallardo, 275 U.S. 56, 48 S.Ct. 23, 72 L.Ed. 152 (1927); and Hallowell v. Commons, 239 U.S. 506, 36 S.Ct. 202, 60 L.Ed. 409 (1916), the
Under the second theory of the appellants’ cause of action, it may be true that as third-party beneficiaries of a Title I contract they have a claim for damages or performance that arose in 1961. When the Pittsburgh Authority declined to award the additional moving expenses, it perhaps created a cause of action for breach of the Title I contract, as then drafted and including by reference the statutory standards then applicable.
For the above reasons, the order of the District Court dated April 28, 1967, as amended by order of May 5, 1967, was correct and will be affirmed.
. Appellant Walter O. Hooper is administrator of the estate of Weldon R. Hooper, a partner in the enterprise Asphalt Products Company, which is the “business concern” claiming moving expenses under the Federal Housing Act.
. Originally (8/7/56) 42 U.S.C. § 1456(f) (2) provided that the rules and regulations governing were those in effect on the date of the execution of the Title I contract. By amendment of September 23, 1959, this subsection was amended to make all relocation payments subject to rules and regulations prescribed without reference to the date.
. Appellee Urban Redevelopment Authority of Pittsburgh was a defendant in the earlier suit as well, and appellee Secretary Weaver was a defendant in the earlier suit in his former capacity as Administrator of the H. H. F. A. This earlier action was docketed as C.A. No. 63-139 in the U. S. District Court for the Western District of Pennsylvania.
. On remand, after a trial, C.A. No. 63-139 was dismissed without prejudice for failure “to timely prosecute.”
. The decision of the plurality to reverse the summary judgment and dismissal by the District Court became the decision of this court when two judges concurred on the grounds that the record was insufficient to warrant the decision below. Two judges dissented. Appellants have contended that because Merge v. Sharott, 341 F.2d at 993, n. 6, mentions the 1964 amendments to the Federal Housing Act, our prior decision is res judicata as to the existence of federal jurisdiction. We do not agree. The regulation implementing the statutory revision was not promulgated until during the argument in Merge v. Sharott, and there is no indication that it was ever considered. Moreover, the decision of this court, divided as it was, was not a final decision as to jurisdiction in this new suit and, hence, can raise no bar.
. Appellants rely on 28 U.S.C. §. 1331 in the present case as well.
. In Merge v. Sharott, supra, plaintiff-partners, Merge and Hooper, were both citizens of Pennsylvania. Apparently sometime after this prior suit was insti
. This subsection was redesignated [42 U.S.C. § 1465] “(e)” by amendments of August 10, 1965.
. See footnote 2, supra.
. It should be noted that paragraph 7 of the present complaint:
“Prior to October of 1961, the Asphalt Products Company conducted its business of manufacturing asphalt products in Buildings No. 1 and No. 2, said building [sic] were used in an integrated manufacturing process.”
differs from paragraph 3 of the stipulation filed for purposes of the appeal in Merge v. Sharott, supra, 341 F.2d at 990, n. 1:
“For purposes of this appeal before the Third Circuit the appellants’ business operation was fully integrated having a unity of use between both buildings.”
Since this stipulation was clearly for purposes of appeal only (the stipulation on this appeal has no similar paragraph), the decision in Merge v. Sharott, supra, cannot be res judicata of any issue decided on the basis of the stipulation.
. The deceased partner, Weldon It. Hooper, is not a plaintiff in this case and has been replaced by his administrator*, Walter C. Hooper, a citizen of California. The partners, however, do not appear on the present record (consisting entirely of pleadings, motions and orders) to have severable interests in the cause of action and, rather, recovery under any theory of their cause would lie only if a unified “business concern,” Asphalt Products Company, was seeking its certified moving expenses. Accordingly, the well-recognized requirement of complete diversity denies federal jurisdiction since plaintiff appellant Merge is a citizen of Pennsylvania. Strawbridge v. Curtiss, 3 Cranch [7 U.S.] 267, 2 L.Ed. 435 (1806); cf. 1 Moore’s Federal Practice If 0.60 [8.-4] (1959).
Reference
- Full Case Name
- George MERGE and Walter C. Hooper, Adm. of the Est. of Weldon R. Hooper, Dec'd., t/d/b/a Asphalt Products Company v. Richard A. TROUSSI, Area Coordinator, Urban Renewal Adm. of the Dept. of Housing and Urban Development, Robert C. Weaver, Secy. Department of Housing and Urban Development and Urban Redevelopment Authority of Pittsburgh
- Cited By
- 8 cases
- Status
- Published