Dorothy Gautreaux, et al., Plaintiffs-appellees, v. Samuel R. Pierce, Secretary of Department of Housing Andurban Development, et al., Defendants-appellees,andeugene Heytow, Richard Parrillo and Marcel Lutwak,intervenors-appellees.appeal of William Lavicka and Barbara Piegare, 743 F.2d 526 (7th Cir. 1984)

This case considers another aspect in the long-standing litigation instituted in 1966 by Chicago public-housing tenants and applicants seeking relief from discriminatory housing and site selection policies and practices. At issue here is only the question of whether the district court properly denied appellants' January 23, 1984, motion for injunctive relief with regard to a marketing plan proposed by developers Heytow, Parrillo, and Lutwak for obtaining tenants for the Academy Square housing project. For details about other aspects of the litigation, see Gautreaux v. Pierce, 707 F.2d 265 (7th Cir. 1983); Gautreaux v. Pierce, 690 F.2d 616 (7th Cir. 1982) and cases cited therein at 620 n. 1.

Appellants here are residents of Census Tract 2817, the census tract in which the Academy Square project is located. This census tract is at the northwest end of the "Academy Square Community" on Chicago's Near West Side and has been identified in the consent decree between the United States Department of Housing and Urban Development and the Gautreaux plaintiff-class as a "Revitalizing Area."¹  See Gautreaux v. Landrieu, 523 F. Supp. 665, 674 and 683 (N.D. Ill. 1981). Appellants originally sought to intervene to complain that HUD violated the decree by reserving funds for the project even though it exceeded the density limits in p 5.8.2(iii)²  of the consent decree. See Gautreaux v. Pierce, 548 F. Supp. 1284 (N.D. Ill. 1982), affirmed, 707 F.2d 265 (7th Cir. 1983). The district court allowed intervention "for the limited purpose of requesting that the Court determine whether or not HUD's involvement with the Academy Square development is or is not precluded by the terms of the consent decree." 548 F. Supp. at 1287. In ruling on the merits, the district court determined first that HUD's actions were not barred by the consent decree, Id. at 1289, and, on motion for reconsideration, also granted a waiver of density requirements sought jointly by HUD and the plaintiff class pursuant to Consent Decree p 8.5.³  The court relied on four factors in concluding that the waiver should be granted because it was in the best interests of the community: (1) the project would contribute to the revitalization of an area which had suffered extensive housing and population loss "but which is now on the road to recovery" (548 F. Supp. at 1293); (2) no other assisted housing then existed in the census tract (ibid.); (3) the area's location and good transportation services made it "a prime site for redevelopment and revitalization, regardless of the construction of Academy Square" (Id. at 1294); and (4) the Intervenors had not shown that the 18 units which were in excess of the consent decree density requirements would cause harm to the community's best interest in any way "which would not be equally present in an unquestionably appropriate 82-unit development" (Id. at n. 10). This Court affirmed the district court's decision to grant the waiver and did not expressly decide whether the district court's original ruling had been proper.⁴  Gautreaux v. Pierce, 707 F.2d 265 (7th Cir. 1983).

Subsequently, HUD personnel, representatives of the project developers, and counsel for the Gautreaux plaintiffs' class formed a working group to develop a marketing plan for obtaining applications for Academy Square tenancy. This group presented its preliminary report to the district court in December 1983. The Intervenors and other interested persons and organizations were given the opportunity to review the report and to file comments with the working group or with the district court (December 16, 1983, Tr. 5, 9).⁵  On January 23, 1984, the Intervenors filed a Motion for Injunctive and Other Relief in which they requested a two-pronged injunction. They asked the district court to (1) enjoin the adoption and implementation of the affirmative marketing plan described in the preliminary report and (2) order the developers to develop a plan with "specific tenant population goals, by race" as well as mechanisms for enforcing those racial goals. January 23, 1983, Motion for relief at 2. Submitted with the motion were a memorandum of law and affidavits by purported experts in urban housing contending that the preliminary marketing plan was "unlikely" to result in an integrated project (Orfield Affid. p 6; McDermott Affid. p 3). The affiants stated that to achieve an integrated project it would be essential to establish both express goals for the racial composition of the project and a commitment to keep rental units off the market until they could be rented to tenants whose race allowed meeting those goals (Orfield Affid. p 9; McDermott Affid. p 5). The intervenors also submitted an affidavit from an official with the Michigan State Housing Development Authority who stated that his agency employs the above-suggested techniques (Bryson Affid.).

HUD submitted a memorandum and supporting affidavits of two of its officials who stated that the proposed plan was by far the most comprehensive and innovative ever submitted to HUD's Chicago office (Knox Affid. p 9; Heaney Affid. p 5). HUD also submitted an affidavit stating that the practices of the Michigan State Housing Development Authority which were identified in the Bryson affidavit violated HUD regulations and would not have been approved if they had been submitted to HUD (Clagett Affid. p 5).

The project developers⁶  submitted affidavits of the director of the Leadership Council for Metropolitan Open Communities and of Academy Square's marketing agent. Both expressed cautious optimism about the likelihood of the project's integration under the proposed plan (Williams Affid. p 7; Hill Affid. p 4), while recognizing the possibility that a predominantly black tenant composition could result if an unusually large number of blacks applied for Academy Square housing (Williams Affid. p 7).⁷ 

The district court denied the Intervenors' motion on the basis that they lacked standing to continue to participate in the lawsuit, since their challenge to the proposed marketing plan exceeded the scope of the original intervention. 101 F.R.D. 704 (N.D. Ill. 1984). Furthermore, even assuming that continued intervention was proper in general, the court declined to grant the Intervenors' requested relief, on the basis that it would require judicial supervision of the day-to-day administration of the consent decree, a task not expressly delegated to the court by the decree. Id. at 705. The court also noted that its experience with the parties led it to conclude that they were operating in good faith and, therefore, "a truly integrated Academy Square project is in fact possible." Id. at 706. Finally, the court suggested, without deciding the issue, that it was possible that racial quotas could properly be employed at Academy Square.

On appeal, the Intervenors outline three theories in support of their claim that both their continued intervention and the relief they seek are proper. We reject all three claims.

First, they claim that their motion was within the scope of the original limited intervention. The district court was correct in denying the Intervenors' motion on the basis that it was beyond the scope of the original limited intervention.⁸  Because the court originally allowed intervention only to resolve the question of whether or not HUD's approval of the project which exceeded consent decree density requirements was proper under the decree, the court could strictly enforce those limitations at this subsequent stage of the action. Van Hoomissen v. Xerox Corporation, 497 F.2d 180 (9th Cir. 1974). Since the Intervenors' January 23, 1984, motion seeks to affect the manner in which Academy Square units are marketed, and since marketing arrangements are not part of the density provisions or of any other provisions of the consent decree, their January 23, 1984, motion does not seek to enforce the consent decree and therefore simply is not within the scope of the original intervention.

Intervenors repeatedly attempt to characterize their claim here as flowing directly from the waiver litigation. However, their argument, which urges that the Academy Square census tract will "tip" from a stable integrated community to one which is racially unstable, is based on a faulty and actually unsupported premise. Briefly, the intervenors urge that implementation of the proposed marketing plan would thwart the purpose of the consent decree's density provisions, which they contend were intended not only to prevent over-concentration of assisted ("Section 8") housing (as enacted in Section 8 of the Housing and Community Development Act of 1974, 1 U.S.Code Cong. and Admin.News 748-752) but also "to attract to neighborhoods with such housing 'a white population * * * that can foster ultimate racial integration.' " Appellants' Br. 29. In support of this premise, they cite the original judicial approval of the Consent Decree, Gautreaux v. Landrieu, 523 F. Supp. at 671.

Intervenors' reliance on that authority is misplaced. The above-quoted phrase on which they rely does not refer to the density provisions at all but instead appears in a discussion of the validity of the consent decree's Revitalizing Areas concept. The discussion shows that the parties thought racial integration was likely to continue in these areas, even if Section 8 housing were built, because the areas' physical amenities (e.g., ongoing physical redevelopment as well as good transportation, shopping and location) made it probable that the white population which had already adjusted to the integration of minorities would remain and other whites would be attracted to the area. It is unquestionable that the district court and the parties viewed the physical redevelopment of the Revitalizing Areas, rather than the public housing density limitations, as the factor which was likely to foster integration. The full statement from which Intervenors quote indicates that "the proponents of the decree emphasize, the Revitalizing Areas are neighborhoods with a substantial minority population where there is visibly physical redevelopment, the kind of development which attracts a white population and can foster ultimate racial integration."⁹  523 F. Supp. at 671. Thus Intervenors' claim that their motion seeks to enforce the purpose of the consent decree is unfounded.

The court and the parties viewed the density limitation provisions as important to the validity of Revitalizing Areas because it prevented the over-concentration of public housing to which Intervenors accurately referred and not because it necessarily would serve the separate and distinct goal of encouraging racial integration. Intervenors were allowed by the district court to assert their claim that Academy Square violated the density provisions, see 548 F. Supp. 1294, but they were unsuccessful in convincing that court, or this one, that a waiver of the density provisions was not in the best interest of the Academy Square community. Id., affirmed, 707 F.2d 265. Intervenors now suggest that the waiver was granted in reliance on a promise which HUD cannot keep if the proposed marketing plan is implemented. They claim that in the waiver proceedings, HUD's Chicago Area Manager Elmer Binford promised "that Academy Square would be 'in the best interest of the community' because of its 'strong potential for providing non-segregated housing opportunities for members of the Gautreaux class.' " Appellants' Br. 30, quoting Binford Affid. p 9 (emphasis added in Brief). Thus they apparently argue that the proposed marketing plan must be enjoined and Intervenors' suggested racial quota plan must be substituted so that HUD can keep the promise it made to obtain the waiver.¹⁰ 

Again, Intervenors' underlying premises are incorrect. First, when Mr. Binford's quoted comment is reviewed in context, it becomes apparent that he was referring to the Academy Square neighborhood rather than, as Intervenors suggest, the project itself when he spoke of integrated living opportunities.¹¹  In their reply brief, Intervenors reassert their claim that HUD promised an integrated project and label any other view of Binford's statement as "patent nonsense." Reply Br. 4. But this summary rejection does not respond to or refute the indisputable thrust of Binford's actual words.

There is also another reason for rejecting Intervenors' assertion that Binford's "promise" provides a basis for their present motion. Intervenors have not shown that the waiver was granted because of Binford's "promise." Indeed, while the district judge expressed that he found "HUD's position and evidentiary materials" persuasive, 548 F. Supp. at 1293, his enumeration of the particular information on which he relied shows that he found most helpful the information HUD submitted about the Academy Square neighborhood in general rather than about the project itself:

Although we have carefully considered the affidavits of the experts and neighborhood residents, the map of the area and other materials submitted by petitioners, we are persuaded by HUD's position and evidentiary materials that the Academy Square project would contribute to and enhance the revitalization of the Jackson Boulevard District and the Near West Side area by the infusion of both elderly and family housing into an area that has suffered extensive demolition of existing housing and loss of population in the past, but which is now on the road to recovery.

Id. The judge also relied on the undisputed fact that there was then no other assisted housing in the Academy Square census tract, id., and on his own conclusion that, contrary to Intervenors' argument, "the area is * * * a prime site for redevelopment and revitalization now and in the future, regardless of the construction of Academy Square." Id. at 1294 (emphasis added). Finally, the judge pointed out that Intervenors had not shown "how the addition of another 18 units would result in any presumed harm to what they view as the best interest of the community, which would not be equally present in an unquestionably appropriate 82-unit development." Id. at n. 10. The judge did not even suggest that Binford's "promise" that the project or even the neighborhood would be integrated had any bearing at all on his determination that Academy Square was in the best interest of the community. Nor did this Court in affirming the grant of the waiver.¹²  Thus both because Binford did not make the promise Intervenors claim and because, in any case, neither the district court nor this Court relied on Binford's alleged promise in deciding to grant the waiver, the decision to grant the waiver provides no basis for granting the relief Intervenors request now.

Intervenors also claim that their motion is proper under the original intervention order because, in approving the Consent Decree in 1981, this Court rejected a claim by a plaintiff class member residing in the Hyde Park-Kenwood Revitalizing Area that the Revitalizing Area concept was flawed since the impact of assisted housing on neighborhood stability was not a factor in determining whether a community should be characterized as a Revitalizing Area. See Gautreaux v. Pierce, 690 F.2d 616, 636-637 (7th Cir. 1982). We noted that

[t]he designation of the Revitalizing Area does not necessitate that "racial tipping" be a consideration. Meaningful evaluation of any potential for racial tipping can be made more effectively at the time a specific project is proposed. HUD's regulations require exactly that, and thus would render superfluous the inclusion of such a criterion before designation of a Revitalizing Area could be made. * * * [A]ny necessary consideration of racial tipping from imminent construction may yet be made by HUD pursuant to its regulations.

Id. Intervenors argue that they are pressing the same issue which this Court deferred in 1982 and therefore it would be "grossly unfair now to deny [them the opportunity] to insist that HUD live up to the promises it made in 1982 in order to obtain a waiver." Appellants' Br. 30; see also Reply Br. 8-9. Appellants characterize as on one continuum the plaintiff-class members' 1981 challenge to the criteria for identifying Revitalizing Areas and their own 1982 challenge to the Academy Square project as violating the consent decree's density requirements. They claim that their challenge to the over-dense Academy Square project was in fact a "racial tipping" challenge which this Court rejected as premature and inapt in 1981.

However, it has already been established that HUD's waiver was not granted on the basis of any "promise" that the Academy Square project would be integrated, and Intervenors have not shown that they have raised the "racial tipping" argument except in the context of the waiver. Therefore, we reject Intervenors' claim that this Court's statements in approval of the consent decree, coupled with HUD's statements in obtaining the waiver, establish that their motion is within the scope of the original intervention. There is simply no basis under the current limited intervention order for allowing Intervenors to proceed with their claim.

Intervenors also contend that their motion is proper under Fed. R. Civ. P. 71, as an effort by third parties to enforce a court order entered for their benefit. However, they cannot prevail under Rule 71 because the consent decree simply was not entered for their benefit. See Gautreaux v. Pierce, 707 F.2d at 273 (Posner, J., concurring). It is clear that the parties to the decree (HUD and the plaintiff class), who reserved the right to modify the decree without even notifying Intervenors, did not intend to give them or others who challenge public housing in integrated communities third-party beneficiary rights under the consent decree. Id. Nor are we persuaded by Intervenors' contention in their reply brief that they were made third-party beneficiaries of the consent decree when the waiver was approved (Br. 10-11 and n. 9). They base this contention on their theory that HUD's "promise" that the project would be integrated was a material condition inserted in the decree for Intervenors' benefit. Intervenors' claims with regard to HUD's "promise" have been rejected already. We note further that intervenors have not provided any support for their bare assertion that HUD's statement, reproduced at note 11, was made to benefit them.

Third, Intervenors claim that their motion states a new reason, aside from the original intervention, for allowing them to participate in the Gautreaux lawsuit. They now claim that their own interest in an integrated community which has not "tipped" racially and become predominantly black will be harmed if the proposed marketing plan is implemented. They claim that the marketing plan will result in an all-black Academy Square project, which would in turn cause their census tract's population to be 57% black, 37% white and 6% other.¹³  Appellants' Br. 10. They also claim that the district court has authority under the Fair Housing Act of 1968, 42 U.S.C. § 3608(c)-(d), to enjoin this marketing plan and to order implementation of one which imposes racial quotas for Academy Square tenancy. The district judge did not consider these claims which Intervenors first raise on appeal.¹⁴  Instead, he concluded that even with an unlimited right to intervene, the Intervenors could not obtain the requested injunctive relief because it would require review of "the day-to-day managerial and administrative decisions of others charged with implementing the consent decree" and therefore went beyond the scope of the court's duty under the consent decree to supervise the administration of the decree. 101 F.R.D. at 705.

Under Alschuler v. Department of Housing and Urban Development, 686 F.2d 472 (7th Cir. 1982), Intervenors probably have standing to assert such a claim in some lawsuit, assuming of course that the claim has ripened into a live controversy. Appellees do not seriously contest this. Instead, the only real question is whether or not Intervenors can raise this independent claim by a new intervention in the Gautreaux lawsuit.

To raise their "racial tipping" claim in the Gautreaux suit as a matter of right, Intervenors must establish that (1) they have an interest in the transaction which is the subject of the Gautreaux suit; (2) the interest will be impaired, as a practical matter, unless they intervene; and (3) the existing parties to the lawsuit cannot adequately represent that interest. Rule 24(a) (2). Intervenors do not show that they meet these requirements for mandatory intervention¹⁵  but instead argue only that they should be allowed to intervene to save the cost and inconvenience of refiling their motion as a separate lawsuit. We decline to order intervention on this basis.

While a showing of inconvenience, cost and delay sometimes may be sufficient to satisfy Rule 24(a) (2)'s impairment of interest requirement, that is not the case here.¹⁶  Allowing intervention with regard to Intervenors' "racial tipping" claim would do little in itself to save time or money for any of the participants in this action, or even for the judicial system. Intervenors contend that the proposed marketing plan is (1) not reasonable, (2) unlikely to result in integration and (3) therefore likely to cause racial tipping. These contentions all require factual determinations properly made by the trial court, as Intervenors themselves admit (Appellants' Br. 43; Reply Br. 21).¹⁷  Thus even if we agreed that Intervenors could raise this independent claim in the Gautreaux suit, we would remand the cause to the district court for further consideration.¹⁸  Refusing to allow intervention effectively would require only that Intervenors refile their motions and supporting documents in another lawsuit which would also be considered by a district judge. Under these circumstances, refusing to allow intervention will cause little if any inconvenience that would not also exist if we allowed intervention.

For the above reasons, the district court's memorandum order of March 14, 1984, denying intervenors' motion is affirmed.¹⁹