Case Information
*1 Before E ASTERBROOK , Chief Judge , and W ILLIAMS and S YKES , Circuit Judges .
E ASTERBROOK , Chief Judge
. Nеw West owns and operates Evergreen Terrace, an apartment complex in Joliet, Illinois. The Department of Housing and Urban Development subsidizes Evergreen Terrace under §8 of the Housing Act of 1937, 42 U.S.C. §1437f, so that per- sons with low incomes can afford to live there. Joliet thinks that Evergreen Terrace, built in 1965, is so run- down that it is a public nuisance. It has filed suit in state court seeking to condemn the property; it also has lobbied HUD not to renew the federal subsidy for Ever- green Terrace.
New West has responded with this federal suit. It makes three principal claims: first, that “the Supremacy Clause” forbids all of the City’s activities; second, that the City’s litigating and lobbying violates 42 U.S.C. §§ 1982 and 1983; third, that the City has violated the Fair Housing Act, 42 U.S.C. §§ 3601-19, by discouraging current and prospective tenants (most of them minorities) from living in Evergreen Terrace. The district court dismissed the complaint on the pleаdings, largely for lack of a case or controversy within the scope of Article III. 2006 U.S. Dist. L EXIS 68693 (N.D. Ill. Sept. 8, 2006). New West is trying to litigate the tenants’ rights rather than its own, the district court thought, and to the extent that New West champions its own rights it must do so in state court.
This complaint cannot be dispatched so easily. Let us start with the Supremacy Clause. The district court understood that this clause does not create any substan- tive rights; instead it provides that national law prevails over state and local law in the event of conflict. The federal rules must come from §8 or the Fair Housing Act, and if these preempt any action under state law (such as the pending condemnation suit), then New West could invoke preemption as a defense in the state litigation. The dis- trict court held that this defensive use is the exclusive remedy. That would be so if defendants were private actors. See, e.g., Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc ., 535 U.S. 826, 830-32 (2002); Franchise Tax Board v. Construction Laborers Vacation Trust , 463 U.S. 1, 9-12 (1983); Taylor v. Anderson , 234 U.S. 74, 75-76 (1914). But §1983 allows a suit against state actors when the objective is to obtain a declaration thаt a rule of federal law supersedes the rules that the state actors are implementing. See, e.g., Verizon Maryland Inc. v. Public Service Commission of Maryland , 535 U.S. 635 (2002); Golden State Transit Corp. v. Los Angeles , 493 U.S. 103, 107-08 (1989). This means that claims of preemp- *3 tion may be litigatеd affirmatively under §1983, and not just as defenses. The district court did not notice the difference between public actors, who may be sued under §1983, and private actors, who cannot be.
Dismissing this claim was especially inаppropriate, as the suit in which preemption would be offered as a defense is itself in federal court. The condemnation action was removed by the Department of Housing and Urban Devel- opment and is pending in the Northern District of Illinois as No. 05 C 6746 before the same judge who resolved New West’s suit. The condemnation action had been on the judge’s docket for more than nine months before New West’s suit was dismissed. What sense could it make to send New West to state court to make a preemption defense to a suit pending in federal court? That the condemnation action is pending in federal court suggests that it is imprudent to resolve the current suit until the condemnation proceeding has been finally resolved; why deal with a defense independent of the action to which it pertains? Why struggle to assess injury when resolution of the condеmnation proceeding may allow “just compen- sation” and otherwise clarify the financial consequences? The issues that divide New West and Joliet have been taken out of order, with regrettable results.
Thе district court stated that §1983 cannot support this
litigation because of
Monell v. New York City Department
of Social Services
,
So is §1982, which provides that all citizens of the
United States enjoy the same rights to own and manage
real property as do white citizens. The district court
wrote that New West, as a corporation, is not a “citizen”.
For this proposition it cited no authority. Since the
Supreme Court held 163 years ago that a corporation
is
a citizen, no such authority is to be found. See
Louisville,
Cincinnati & Charleston R.R. v. Letson
, 43 U.S. (2 How.)
497 (1844), overruling
Bank of the United States v.
Deveaux
,
Of course, New West isn’t a corporation anyway; it is
a рartnership. For the purpose of 28 U.S.C. §1332, a
partnership is not a “citizen.” See
Carden v. Arkoma
Associates
, 494 U.S. 185 (1990). But all of its members
are citizens, and if we consider the partners directly, as
is done under §1332, they can invoke §1982. It may be
enough for the purpose of §1982 that a partnership is a
“person”. See 1 U.S.C. §1 ¶6. Other collective entities have
been allowed to litigate under §1982. See, e.g.,
Shaare
Tefila Congregation v. Cobb
,
As for the Fair Housing Act: the district judge under- stood New West to be raising claims on behalf of the actual *5 and prospectivе tenants. Some passages in the complaint could be understood that way, but the complaint also contends that New West was injured in a proprietary capacity. Its vacancy rate rose, allegedly as a result of the City’s efforts to discourage people from living in Evergreen Terrace. The complaint also alleges that New West incurred extra expense when the City’s lobby- ing led HUD to delay renewing the §8 subsidy contract. These financial losses give it Article III standing.
For some statutes it matters whether the injuries are
direct or derivative. See, e.g.,
Anza v. Ideal Steel Supply
Corp
., 126 S. Ct. 1991 (2006);
Holmes v. SIPC
, 503
U.S. 258 (1992). The Fair Housing Act is not among
those statutes; the Supreme Court has held that оnly the
Constitution’s own requirements, and not any prudential
supplements, apply to litigation under this statute. Thus
Gladstone, Realtors v. Bellwood
,
The district court’s first order of business on remand should be to resolve the condemnation action. If Joliet prevails, that would knock out many of the theories on which New West relies in this suit and may put limits on the recovery available for the rest (since to decide “just *6 compensation” the court will have to resolvе any dispute about Evergreen Terrace’s profitability). New West contends that §8 and the Fair Housing Act prevent con- demnation of Evergreen Terrace, but it does not rely on any particular provision of that statute. Section 8 is a subsidy program, a carrot rather than a stick. HUD’s regulations implementing the §8 program contemplate the possibility of the parcel’s condemnation; they do not purport to forbid condemnations. See 24 C.F.R. §§ 245.405, 248.101. For its part, the Fair Housing Act forbids discrimination in housing programs without providing that any given housing development has a right to continued existence. Just as with §8, federal regulations implementing the FHA cover the demolition of housing projects. 24 C.F.R. Part 970, and exempt condemned buildings from these rules, see 24 C.F.R. §970.3. If Joliet thinks that a given parcel of land should be put to a public use, such as a park, and is willing to foot the bill, it is hard to sеe any obstacle in federal law. The City’s condemnation action has been pending for 27 months; it is well past time to reach a decision.
If any issue survives the condemnation action, the next question is whether thе Noerr-Pennington doctrine applies. See Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc ., 365 U.S. 127 (1961); Mine Workers v. Pennington , 381 U.S. 657 (1965). New West complains about Joliet’s litigation, lobbying, and public statements. Joliet has filed several suits (a nuisance action and complaints about violations of the building code, in addition to the condemnation action); it has sent letters to HUD and met with federal employees in an effort to persuade the agency to cut off federal funding for Evergreen Terrace; it has made public statements accusing New West of operating run-down buildings and informing the City’s populace (including prospective tenants) that it would do what was possible to close and raze the complex.
New West characterizes these steps as violations of
multiple federal statutes, but the
Noerr-Pennington
doctrine protects litigation, lobbying, and speech.
Noerr-
Pennington
has been extended beyond the antitrust
laws, where it originated, and is today understood as an
application of the first amendment’s speech and petition-
ing clauses. See, e.g.,
Bill Johnson’s Restaurants, Inc. v.
NLRB
, 461 U.S. 731 (1983);
Professional Real Estate
Investors, Inc. v. Columbia Pictures Industries, Inc
., 508
U.S. 49 (1993);
BE&K Construction Co. v. NLRB
, 536 U.S.
516 (2002). As far as the national government is con-
cerned, a municipality has a right to speak and petition
for redress of grievances, so the
Noerr-Pennington
doc-
trine applies fully to municipal activities. See
Columbia
v. Omni Outdoor Advertising, Inc
., 499 U.S. 365 (1991).
See also
Affordable Housing Development Corp. v. Fresno
,
At oral argument, counsel for New West maintained that the Noerr-Pennington doctrine is inapplicable because Joliet (supposedly) lied to HUD and its own populace. That is no distinction; the holding of Noerr is that lobbying is protected whether or not the lobbyist used deceit. New West also maintains that the suits that Joliet has filed are “shams.” Yet none has been adjudicated in New West’s favor—and even if New West ultimately wins them all, that would not demonstrate that the suits werе shams, a term that the Supreme Court has used to denote baseless litigation filed only because of the ex- pense that the defendant must incur. See Professional Real Estate Investors , 508 U.S. at 60-61. New West has settled (for a substantial payment) one of the suits that *8 Joliet filed in state court, so that one cannot have been a sham; the proper classification of the rest remains to be determined.
Only if the Noerr-Pennington doctrine is inapplicable must the district court address the merits of New West’s contentions. Discussion of that subject on this appeal would be premature.
R EVERSED AND REMANDED A true Copy:
Teste:
________________________________ Clerk of the United States Court of Appeals for the Seventh Circuit USCA-02-C-0072—7-5-07