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Eisen v. Eastman

decided: November 28, 1969.


Friendly, Hays and Anderson, Circuit Judges.

Author: Friendly

FRIENDLY, Circuit Judge:

This action, brought by a landlord appearing pro se, is typical of the many cases in which, by virtue of a plaintiff's invocation of § 1 of the Civil Rights Act of 1871, 17 Stat. 13, now 42 U.S.C. § 1983, and its jurisdictional implementation, 28 U.S.C. § 1343(3), federal courts are now being asked to determine a great variety of controversies between city or state officials and citizens who prefer litigating in the federal courts to pursuing their state remedies.*fn1 The existing and prospective importance of the problems thus presented has prompted us to examine them at greater length than disposition of this case might demand.

Eisen's one page pro se complaint against Eastman, a New York City District Rent and Rehabilitation Director, asserts that Eastman violated his constitutional right not to be deprived of property without due process of law by reducing the rents to which Eisen was restricted under the City's Rent and Rehabilitation Law, N.Y. City Adm. Code, Ch. 51, Title Y. The rent reductions in two buildings owned by the plaintiff had resulted in losses of some $1300 at the date of the defendant's motion to dismiss and of some $1800 at the time of the district court's decision. The complaint and other papers, when read with appropriate benevolence, challenge the rent control law, the general level of rents fixed for Eisen's buildings thereunder, and the Director's recent reductions, as violating plaintiff's rights under the due process clause of the Fourteenth Amendment.

The district judge held that the action could not be sustained under 42 U.S.C. § 1983, and its jurisdictional counterpart, 28 U.S.C. § 1343(3),*fn2 since the Civil Rights Act does not apply to suits against municipalities. Monroe v. Pape, 365 U.S. 167, 187-192, 81 S. Ct. 473, 5 L. Ed. 2d 492 (1961). He considered, however, that the showing that losses from the rent reductions would exceed $10,000 within an additional three years might satisfy the requirement of 28 U.S.C. § 1331. Proceeding to the merits, the judge held that the City's rent control statute was constitutional, citing Israel v. City Rent & Rehabilitation Administration, 285 F. Supp. 908 (S.D.N.Y.1968), and that consequently the particular orders raised no federal question "in the absence of any allegations of extraordinary circumstances or arbitrary action." In his brief here Eastman contends that federal inquiry into the particular orders, and also, we should suppose, into the general rate level, was foreclosed by Eisen's failure to take the administrative appeal to the main office of the Rent Administration allowed by § Y51-8.0 of the Rent & Rehabilitation Law.

The district court's conclusion that the Civil Rights Act could not be invoked gets no support from the holding in Monroe v. Pape barring suits thereunder against municipalities. The action here was not against New York City but against Eastman. Actions against a government official acting "under color of" statutes and ordinances are what 42 U.S.C. § 1983 is mainly about. Still it does not necessarily follow that 28 U.S.C. § 1343(3) covers an action such as this.

There has been no thorough discussion by the Supreme Court of the scope of 28 U.S.C. § 1343(3) since Hague v. C.I.O., 307 U.S. 496, 59 S. Ct. 954, 83 L. Ed. 1423 (1939). Apart from its age, Hague casts an uncertain light because of the absence of a majority opinion. The lead opinion by Mr. Justice Roberts, joined on the jurisdictional aspect solely by Mr. Justice Black, who, as one will be pardoned for supposing, would scarcely take the same view today, held that the reference in the statute to "any right, privilege or immunity secured by the Constitution of the United States" only covered actions alleging violations of the clause in § 1 of the Fourteenth Amendment which says "No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States," and was thus limited to the privileges and immunities of national citizenship -- a requirement Justice Roberts thought satisfied by the individual plaintiffs since they were citizens complaining of abridgement of their right to disseminate information about the National Labor Relations Act. This interpretation of § 1343(3) encounters serious obstacles, both textual*fn3 and historical,*fn4 which are sketched in the margin, and was apparently rejected by all the Justices in Monroe v. Pape, 365 U.S. at 170-171, 81 S. Ct. 473, 5 L. Ed. 2d 492 (majority opinion of Mr. Justice Douglas), 365 U.S. at 205-206, 81 S. Ct. 473 (dissenting opinion of Mr. Justice Frankfurter).*fn5

Mr. Justice Stone, joined by Mr. Justice Reed and apparently by Chief Justice Hughes, 307 U.S. at 518, 532,*fn6 59 S. Ct. 954, sustained federal jurisdiction in Hague upon a different and more appealing view. Taking off from the seemingly unchallengeable but somewhat unilluminating statement in Holt v. Indiana Mfg. Co., 176 U.S. 68, 72, 20 S. Ct. 272, 44 L. Ed. 374 (1900), that the civil rights jurisdictional provision applied only to suits alleging deprivation of "civil rights," he stressed the incongruity of reading what is now 28 U.S.C. § 1343(3) so broadly that it would cover the entire ground later embraced by the present 28 U.S.C. § 1331, with its requirement of a jurisdictional amount, in all cases where natural persons complained of acts by state officers as violating the Constitution. Essaying the task of definition, which the Court had side-stepped in Pleasants v. Greenhow, 114 U.S. 323, 330, 5 S. Ct. 931, 29 L. Ed. 204 (1885), and Holt v. Indiana Mfg. Co., supra, he thought the special jurisdictional statute applied "whenever the right or immunity is one of personal liberty, not dependent for its existence upon the infringement of property rights." 307 U.S. at 531, 59 S. Ct. at 971.*fn7

So far as our research has disclosed, Mr. Justice Stone's definition would encompass all the cases in which the Supreme Court has sustained jurisdiction under 28 U.S.C. § 1343(3), with the possible exception of King v. Smith, 392 U.S. 309, 88 S. Ct. 2128, 20 L. Ed. 2d 1118 (1968), where the applicability of the Civil Rights Act was neither challenged nor discussed. Moreover, it is quite arguable that King came within Justice Stone's formulation on the basis that Alabama's "substitute father" regulation not merely caused economic loss to Mrs. Smith's children, but also infringed their "liberty" to grow up with financial aid for their subsistence and her "liberty" to have Mr. Williams visit her on weekends.

Like so many definitions, Justice Stone's has been considerably easier to state than to apply. Attacks on the constitutionality of state tax statutes rather plainly fall beyond it, and one of its virtues is in excluding them. See, e.g., Reiling v. Lacy, 93 F. Supp. 462 (D.Md.1950), appeal dismissed, 341 U.S. 901, 71 S. Ct. 614, 95 L. Ed. 1341 (1951); Abernathy v. Carpenter, 208 F. Supp. 793 (W.D.Mo.1962) [alternative ground], aff'd, 373 U.S. 241, 83 S. Ct. 1295, 10 L. Ed. 2d 409 (1963); Gray v. Morgan, 371 F.2d 172 (7 Cir. 1966), cert. denied, 386 U.S. 1033, 87 S. Ct. 1484, 18 L. Ed. 2d 596 (1967); Bussie v. Long, 383 F.2d 766 (5 Cir. 1967); Hornbeak v. Hamm, 283 F. Supp. 549 (M.D.Ala.), aff'd, 393 U.S. 9, 89 S. Ct. 47, 21 L. Ed. 2d 14 (1968). So also does an action addressed solely to the taking of property. Ream v. Handley, 359 F.2d 728 (7 Cir. 1966); Howard v. Higgins, 379 F.2d 227 (10 Cir. 1967). At the other end of the spectrum, cases involving, e.g., the right to distribute literature free of a municipal license tax, Douglas v. City of Jeannette, 319 U.S. 157, 63 S. Ct. 877, 87 L. Ed. 1324 (1943); the right to vote and to have an equal effect given to one's vote, Smith v. Allwright, 321 U.S. 649, 64 S. Ct. 757, 88 L. Ed. 987 (1944); Baker v. Carr, 369 U.S. 186, 200 & n. 19, 82 S. Ct. 691, 7 L. Ed. 2d 663 (1962); the right to freedom of speech and of petition for the redress of grievances, Tenney v. Brandhove, 341 U.S. 367, 71 S. Ct. 783, 95 L. Ed. 1019 (1951); the right to be free from unreasonable searches and arrests, Monroe v. Pape, supra, 365 U.S. 167, 81 S. Ct. 473; and the right to attend an integrated school, McNeese v. Board of Education, 373 U.S. 668, 83 S. Ct. 1433, 10 L. Ed. 2d 622 (1963), fit snugly under the Stone formula. Greater difficulty has been experienced with cases involving denials or revocations of licenses or discharges from public employment. These can be viewed about equally well as complaining of a deprivation of the personal liberty to pursue a calling of one's choice or of the profits or emoluments deriving therefrom. See Glicker v. Michigan Liquor Control Comm'n, 160 F.2d 96 (6 Cir. 1947); Hornsby v. Allen, 326 F.2d 605 (5 Cir. 1964), other cases cited in Hart & Wechsler, The Federal Courts and the Federal System 842 (1953), and in D. Currie, Federal Courts 428-29 (1968); and the recent decision in Berry v. Allen, 411 F.2d 1142 (6 Cir. 1969).*fn8

This circuit has not squarely faced the issue. See American Commuters Ass'n v. Levitt, 405 F.2d 1148, 1151 n. 4 (2 Cir. 1969). In Burt v. City of New York, 156 F.2d 791 (2 Cir. 1946), this court upheld civil rights jurisdiction over an architect's damage action against city building officials for purposeful discrimination in rejecting his applications or imposing upon him unlawful conditions while not doing so to others. This would be reconcilable with the Stone formulation on the basis indicated above, as are Birnbaum v. Trussell, 371 F.2d 672, 676-677 (2 Cir. 1966), and Holmes v. New York City Housing Authority, 398 F.2d 262 (2 Cir. 1968). On the other hand, Powell v. Workmen's Compensation Board, 327 F.2d 131 (2 Cir. 1964), involved only deprivation of property. After stating that § 1983 "has been broadly interpreted as covering any right protected through the Fourteenth Amendment, and not simply those rights existing by virtue of the amendment's privileges and immunities clause," the court found it unnecessary to determine the section's applicability to the claim at issue, 327 F.2d at 136-137. Departure from Mr. Justice Stone's interpretation could scarcely have been intended since his opinion in Hague was cited as authority for the statement just quoted. Quite recently a panel including the writer of the Powell opinion affirmed the continuing vitality of the Stone formulation in McCall v. Shapiro, 416 F.2d 246 (1969), although the precise issue determined seems rather to have been that in a case of claimed conflict with a federal statute, the narrower words of the jurisdictional provision, "any Act of Congress providing for equal rights" prevail over the broader language of 42 U.S.C. § 1983. But see Bomar v. Keyes, 162 F.2d 136 (2 Cir.), cert. denied, 332 U.S. 825, 68 S. Ct. 166, 92 L. Ed. 400 (1947), and the criticism of that decision in Note, The Civil Rights Act and Mr. Monroe, 49 Calif.L.Rev. 145, 150-51 (1961).

We must confess we are not altogether clear just where this leaves us. Although Mr. Justice Stone's construction has been severely criticized, notably in Note, The Proper Scope of the Civil Rights Act, 66 Harv.L.Rev. 1285, 1289-91 (1953), there seems to be something essentially right about it, especially if one accepts, as we do, his premise that the overlap between 28 U.S.C. § 1331 and 28 U.S.C. § 1343(3) should be explained in some rational way. It has the merit of preserving not only the kind of case that was at the core of congressional concern in 1871 but a good many others that Congress would probably desire to have within the statute, while at the same time excluding cases that neither the Reconstruction Congress nor later Congresses could really have had in mind. It is quite hard to believe, for example, that the framers either of § 1 of the Civil Rights Act of 1871 or of its successors would have thought the statute could be invoked by a person complaining of state taxes allegedly barred by the Commerce Clause. Moreover, Carter v. Greenhow, 114 U.S. 317, 5 S. Ct. 928, 962, 29 L. Ed. 202, 207 (1885); Pleasants v. Greenhow, supra, 114 U.S. 323, 330, 5 S. Ct. 931, 29 L. Ed. 204; and Holt v. Indiana Mfg. Co., supra, 176 U.S. 68, 20 S. Ct. 272, 44 L. Ed. 374, are still on the books, and a reading that would push 42 U.S.C. § 1983 and 28 U.S.C. § 1343(3) to the full extent of their language must either overrule those cases, which we surely cannot, or propound a basis for distinction that is not plain to us.*fn9 Also the language in Holt that the present 42 U.S.C. § 1983 speaks only to "civil rights" was recently echoed in Pierson v. Ray, 386 U.S. 547, 87 S. Ct. 1213, 18 L. Ed. 2d 288 (1967), both in Chief Justice Warren's opinion for the majority, 386 U.S. at 554, 87 S. Ct. 1213, and by Mr. Justice Douglas in dissent, 386 U.S. at 563, 87 S. Ct. 1213. We therefore hold, although with a good deal less than complete assurance, that Justice Stone's Hague formulation, generously construed, should continue to be regarded as the law of this circuit.*fn10 Since the complaint here alleged only the loss of money, the district court's conclusion that jurisdiction under the Civil Rights Act was not established, although predicated on a wrong reason, was thus correct.

The same is true with respect to the court's holding that the complaint satisfied the $10,000 jurisdictional amount requirement of 28 U.S.C. § 1331. If jurisdiction were sought to be grounded on the amount of future payments, we would encounter the difficulty that "the rule apparently is that only the amount of the installments due at the commencement of the suit may be taken into account, even though the judgment will be determinative of liability for future installments as they accrue." Wright, Federal Courts 97, citing New York Life Ins. Co. v. Viglas, 297 U.S. 672, 56 S. Ct. 615, 80 L. Ed. 971 (1936) and other cases. But the complaint can be considered as putting in controversy the value of the two buildings free from rent control as against being bound by it, or at least their value before and after the rent reduction orders. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 56 S. Ct. 780, 80 L. Ed. 1135 (1936); Kroger Grocery & Baking Co. v. Lutz, 299 U.S. 300, 57 S. Ct. 215, 81 L. Ed. 251 (1936). The capitalized amount of the rent reductions was clearly in excess of $10,000. We therefore turn to the merits.

The constitutionality of rent control legislation seems not to have been directly passed upon by the Supreme Court since the cases arising during World War II and the housing shortage consequent thereon. Bowles v. Willingham, 321 U.S. 503, 64 S. Ct. 641, 88 L. Ed. 892 (1944); Woods, Housing Expediter v. Cloyd W. Miller Co., 333 U.S. 138, 68 S. Ct. 421, 92 L. Ed. 596 (1948). While in those cases the Court naturally stressed the war and post-war emergencies, we have no doubt that it would sustain the validity of rent control today. The New York City Rent Control Law contains an impressive recital of the conditions deemed to call for its enactment, Adm. Code of the City of New York § Y51-1.0. The time when extraordinarily exigent circumstances were required to justify price control outside the traditional public utility areas passed on the day that Nebbia v. New York, 291 U.S. ...

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