OPINION
This action was brought by the United States against the City of Yonkers, the Yonkers Community Development Agency (collectively “the City”) and the Yonkers Board of Education, alleging violations of Title VI of the Civil Rights Act of 1964, Title VIII of the Civil Rights Act of 1968, and the Fourteenth Amendment, in the administration of Yonkers’ school system and public housing programs. Soon thereafter,
In its amended answer, the City has asserted a counterclaim against the United States and a third-party complaint against the Department of Housing and Urban Development (“HUD”). • Subsequently, the NAACP also asserted a claim against HUD..
The claims of the NAACP against HUD were settled by a consent decree approved by this Court on March 19,1984. Thus, the only remaining claims that involve HUD are those asserted by the City. The United States and HUD have moved to dismiss the City’s counterclaim and third-party complaint. For the reasons stated, the motion is granted.
At the outset, we note certain unusual aspects of defendant’s counterclaim and third-party complaint. Both of these causes of action arise from the same alleged breach by HUD of its statutory responsibilities. Moreover, the plaintiff, the United States, is both the counterclaim defendant and the real party in interest with respect to the third-party claim, since HUD is an agency of the federal government. 1 See, e.g., 14 Wright & Miller, Federal Practice and Procedure § 8655, at 174-75 (1976). Thus, the claims asserted in the counterclaim and third-party complaint are clearly alternative theories of liability, since the defendant could not recover on both.
The City’s counterclaim and third-party claims seek monetary relief to reimburse the City in whole or in part for the cost of providing any remedy the Court might order or, alternatively, the equitable equivalent thereof, such as an order requiring HUD “to include the City among the governmental units receiving HUD funding.” Defendants’ Memorandum of June 13, 1984 at 10.
The United States and HUD have asserted two grounds for dismissal of the City’s claims: first, that they are barred by the doctrine of sovereign immunity; and second, that they fail to state a claim for which relief can be granted.
A. Sovereign Immunity
The sovereign immunity defense in this case is grounded upon the ancient principle that the United States, as sovereign, is immune from suit, except to the extent that Congress otherwise consents.
United States v. Mitchell,
The City has advanced three theories upon which it asserts that sovereign immu-nity has been waived in this case. One theory relies on the recoupment exception to the doctrine of sovereign immunity, a second on the general waiver provision of the Administrative Procedure Act, and the third on the “sue and be sued” clauses of the National Housing Act and the Housing Act of 1948. The first two theories can readily be dismissed as inapplicable to the present case. The issues raised by the third theory are more complex. Ultimately, however, we conclude that this theory, too, fails to provide a basis for finding that sovereign immunity has been waived.
1. Recoupment
The City first argues that sovereign immunity is no bar in the present case because its counterclaim against the United States is in the nature of a recoupment. It is settled doctrine that when the government brings a suit, it waives sovereign immunity as to counterclaims arising out of the same transaction which seek only to defeat all or part of its original claim.
E.g., Frederick v. United States,
2. The Administrative Procedure Act
The second theory advanced by the City is the general waiver of sovereign immunity contained in the Administrative Procedure Act, 5 U.S.C. § 702. However, that provision is, by its express terms, inapplicable when the relief sought is an award of monetary damages.
2
' Moreover, the provision has also been held inapplicable when the relief sought is equitable relief that is the equivalent of monetary damages, such as, for example, an order to pay money.
See, e.g., Jaffee v. United States,
The City acknowledges this limitation but maintains nevertheless that its claims seeking recovery of the cost of a remedy by requiring HUD “to include the City among the governmental units receiving HUD funding” would fall within the waiver. We believe that this reading of the
3. The Housing Acts
Finally, the City contends that sovereign immunity has been waived because its claims fall within the “sue and be sued” provisions of the National Housing Act, 12 U.S.C. § 1702, and the Housing Act of 1948, 42 U.S.C. § 1404a. Section One of the National Housing Act (12 U.S.C. § 1702) provides in pertinent part:
The Secretary shall, in carrying out the provisions of this subchapter and sub-chapters II, III, V, VI, VII, VIII, IX-A, IX-B, and X of this chapter,, be authorized, in his official Capacity, to sue and be sued in any court of competent jurisdiction, State or Federal.
Similarly, 42 U.S.C. § 1404a provides that the United States Housing Authority, a predecessor of HUD, “may sue and be sued only with respect to its functions under this chapter, and sections 1501 to 1505 of this title.”
These statutes, of course, waive sovereign immunity for claims alleging direct violations by HUD of the substantive provisions of the Housing Acts themselves.
See, e.g., Abrams v. Hills,
The definitive authority on the construction of § 1702 is
FHA v. Burr,
In the forty years since
Burr,
actions brought under § 1702 typically have involved contractual or quasi-contractual
Several attempts have recently been made to extend the reach of § 1702 to civil rights actions against HUD, but they have generally been rejected by the courts with little or no discussion. In
Community Brotherhood of Lynn, Inc. v. Lynn Redevelopment Authority,
We are aware of only one case in which a court has held that § 1702 constitutes a waiver of sovereign immunity for civil rights actions against HUD, and that court made no attempt to reconcile its holding with the commercial obligation rationale of
Burr. See Baker v. F. & F. Investment Co.,
Civil rights actions do not “arise[e] out of the commercial relationships which [HUD] enters into in pursuit of its statutory mission.” S.S. Silberblatt, supra, at 36. The affirmative duties imposed upon HUD by the civil rights provisions at issue here are sovereign responsibilities such as could be imposed only upon an agency of the United States. Thus, to hold that § 1702 waives sovereign immunity for civil rights actions against HUD would require a significant departure from the understanding of § 1702 that was expressed in Burr, and that has persisted for more than forty years unchallenged, to our knowledge, by subsequent courts or Congress.
The City offers little by way of support for departing from
Burr.
The two cases it cites as supporting its position,
Merrill Tenant Council v. HUD,
Nor is it adequate simply to assert that “titles VI and VIII are integral parts of the housing statutes,” Defendants’ Memorandum of June 13, 1984, at 6, and that civil rights actions against HUD thus fall within the “sue and be sued” clauses.' Titles VI and VIII are not literally part of the Housing Acts. Whether the waiver provisions of those Acts can be considered to cover actions based upon other statutes must depend upon whether Congress can reasonably be understood to have intended such a result. The City has offered no argument to suggest that it can.
It is true that the words of § 1702, standing alone, could be read as a waiver of sovereign immunity for
any
action against HUD that relates to the administration of the Housing Acts. The words do not, however, stand alone. They were enacted as part of a statute that “launched a governmental agency into the commercial world.”
Burr,
Nor is there any indication that the Congresses which enacted the civil rights laws intended § 1702 to be read as waiving sovereign immunity for actions based upon those laws. Indeed, there is evidence to the contrary. Section 603 of the Civil Rights Act of 1964 provides that agency action taken pursuant to the civil rights laws is subject to review according to the provisions of the Administrative Procedure Act.
See
Civil Rights Act of 1964, Pub.L. No. 88-352, Title VI, § 603, July 2,1964, 78 Stat. 253, codified as 28 U.S.C. § 2000d-2.
11
Significantly, we are not aware of any case in which a civil rights plaintiff seeking injunctive or declarative relief against HUD has relied on the waiver provision of § 1702. 12 It is only where, as here, the claimants seek monetary damages, and thus cannot rely on the APA, that § 1702 is urged as a waiver of sovereign immunity for civil rights actions against HUD. 13
The degree of strictness with which a waiver of sovereign immunity is to be construed is, at present, a matter of some confusion among the courts. 14 The basic principle remains clear, however, that the consent of Congress is required before a particular action can be maintained against the United States. For the reasons stated, we do not believe that the “sue and be sued” clauses of the Housing Acts can be interpreted as congressional consent to actions for damages against HUD based upon alleged violations of the civil rights laws. Accordingly, we hold that the City’s claims are barred by the doctrine of sovereign immunity.
B. Failure to State a Claim
The City’s claims must also be dismissed for failure to state a claim for which relief can be granted. There is no legal basis for claims for contribution or indemnity for a defendant charged with violation of the provisions at issue in this case. 15
The primary teaching of the
Northwest Airlines
case is that without some indication of congressional intent to create such actions and contribution claims, courts simply do not have the power to entertain them where to do so would potentially disrupt “a comprehensive legislative scheme including an integrated system of procedures for enforcement.”
The City has attempted to distinguish Northwest Airlines in several ways, many of which address factors that the Court specifically held to be irrelevant to its determination. For example, the participation of HUD officials in public housing activities for which the City is charged with discrimination might be the type of factor that would, under traditional analysis, support a common law right to contribution. However, the Supreme Court in Northwest Airlines .assumed for purposes of its decision
that all of the elements of a typical contribution claim are established. This means that we assume that the plaintiffs ... could have recovered from [the original defendant or the contribution defendant] ... and that it is unfair to require [the original defendant] to pay the entire judgment.
The City also urges as a basis for its claims that it has standing to sue under the liberal “injury-in-fact” standing requirements of Title VIII. This argument misses the mark completely because possession of the requisite interest in a controversy to have standing (even assuming it were present here) does not
a fortiori
prove that one has a cognizable claim to assert.
Cf. Northwest Airlines, supra,
The City has also cited
Texas Industries, Inc. v. Radcliff Materials, Inc.,
The argument misconstrues the relevant portions of the
Texas Industries
case. By “uniquely federal interests,” the Court did not mean, as the City seems to suggest, issues of public importance, but rather “such narrow areas as those concerned
Nor do we find any merit in the City’s contention that
Texas Industries
is distinguishable from this case because of the judiciary’s-broader power under the statutory and constitutional provisions at issue here to formulate equitable remedies. First, for the reasons previously noted, the City’s claims are monetary rather than equitable in nature. Second, the power to fashion an equitable remedy does not necessarily include the power to recognize actions for contribution,
see Northwest Airlines, supra,
The only argument advanced by the City in support of a right of contribution that begins to address the criteria of Northwest Airlines is that HUD, unlike private defendants, has an affirmative duty under Title VIII to promote the policies of that provision rather than a merely passive duty to avoid discrimination. Thus, the City urges, “[participation by HUD in the remedy for any violation in which HUD participated would be consistent with Congress’ recognition of the need for effective remedies to compensate the victims of discrimination and of the need to deter HUD from unlawful conduct.” Defendants’ Memorandum of June 13, 1984 at 17.
This contention raises two distinct lines of argument. First, the City seems to suggest that recognition of a right of contribution would be consistent with the overall policy of Title VIII. This argument fails because it too falls within the list of contentions that the Court in
Northwest Airlines
assumed to be true for purposes of its decision, but found unavailing.
On the other hand, the City also may be suggesting that the imposition of special statutory responsibilities upon HUD evidences congressional intent to allow contribution actions against HUD by a defendant accused of violating the lesser duty that Title VIII imposes upon parties other than HUD. While the argument, so construed, at least points in the right direction, it fails to raise a sufficiently strong inference of congressional intent specifically to allow contribution actions against HUD. The imposition of statutory responsibilities upon HUD does not indicate, without more, how or by whom those responsibilities can be enforced.
The City also contends that, apart from statutory and common law theories, it has a constitutional right to contribution. It contends that where HUD has participated in discriminatory housing practices, it may be held liable for violating the Fifth Amendment.
Hills v. Gautreaux,
We therefore hold that the City cannot maintain the claims it has asserted against HUD. It follows therefore that HUD must be dismissed as a party to this case, since no claims remain asserted against it.
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Nothing in this Opinion, however, should be interpreted as intimating any view as to whether the facts alleged by the City in support of its claims'would be relevant in shaping the relief, if any, that might be awarded against the City. A court has broad discretion to shape equitable relief in accordance with factors that might not be sufficient to give rise to a claim of legal entitlement. Moreover, although HUD will no longer be a party to this action in
eo nomine,
the United States will still be before the Court. Relief that binds the United States also binds its subordinate officers and agencies such as HUD.
See Sunshine Coal Co. v. Adkins,
Accordingly, for the reasons stated, the motion of HUD and the United States to dismiss the third-party complaint and counterclaim asserted against them is granted.
SO ORDERED.
Notes
. An interesting technical question can be raised as to whether this circumstance renders the impleader action technically improper. Rule 14(a) of the Federal Rules of Civil Procedure provides that a third-party complaint may be "served upon a person not a party to the action." Because of the relationship between HUD and the United States, the impleader action may' be tantamount to an attempt to implead the plaintiff, a basis for dismissal of a third-party complaint. See, e.g., Henz v. Superior Trucking Co., Inc., 96 F.R.D. 219 (M.D.Pa.1982).
We note, however, that there are occasions upon-which a federal agency may be deemed an entity separate from the United States, for purposes of determining whether a justiciable controversy exists.
See United States v. Nixon,
. The statute provides:
An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an’ official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States ... The United States may be named as a defendant in any such action, and a judgment or decree may be entered against the United States____
5 U.S.C. § 702 (emphasis added) (1982).
. The
Jaffee
case involved claims against the government brought by soldiers exposed to nuclear testing. The court held that their claim for the provision of medical services was barred by sovereign immunity since it could be satisfied, in the alternative, by the payment of money to compensate future medical expenses.
. Contrast this claim with the complaint in
Hills v. Gautreaux,
. The analysis of the waiver provisions of § 1404a is substantially the same and does not require a separate discussion.
See Little Earth of United Tribes, Inc. v. HUD,
. HUD’s liability for monetary damages, however, was limited under the
Burr
analysis to "those funds which have been paid over to [HUD] in accordance with [the National Housing Act] and which are in its possession, severed from Treasury funds and Treasury control____”
Burr, supra,
. As explanation for its decision, the
Lynn
court merely noted that no violations of the National Housing Act had been alleged.
See
. The
Baker
court also neglected to explain how the plaintiff’s claims could, as required under
Burr,
be satisfied from a specific fund committed to the Secretary’s control pursuant to the National Housing Act. These puzzling omissions may be attributable to the apparent "shortcomings in the briefs" submitted to the
Baker
court.
See FDIC v. Citizens Bank & Trust Co.,
. The cases involved, respectively, a claim that HUD had violated state law in failing to pay interest on the security deposits of tenants in federally-owned housing projects, and alleged .violations of local building ordinances by HUD in connection with the maintenance of HUD-owned property. Both courts adverted to the commercial nature of the obligations sought to be enforced.
Merrill,
The City cites no cases that have held § 1702 to be applicable to civil rights actions against HUD. As noted above, we are aware of only one case to so hold, and for reasons already discussed, we find that decision to be unpersuasive.
It has been suggested by the litigants in another case that the results in
Lopez v. Arraras,
. The same is true of § 1404a. While the words may bear the interpretation urged by the City, the context in which the words were enacted belies it.
Cf. Sigona v. Slusser,
. The section provides that:
Any department or agency action taken pursuant to section 2000d-l of this title shall be subject to such judicial review as may otherwise be provided by law for similar action taken by such department or agency on other grounds. In the case of action, not otherwise subject to judicial review, terminating or refusing to grant or to continue financial assistanee upon a finding of failure to comply with any requirement imposed pursuant to section 2000d-l of this title, any person aggrieved (including any State or political subdivision thereof and any agency of either) may obtain judicial review of such action in accordance with chapter 7 of Title 5, and such action shall not be deemed committed to unreviewable agency discretion within the meaning of that chapter.
42 U.S.C. § 2000d-2. Both title VI of the Civil Rights Act of 1964 and title VIII of the Civil Rights Act of 1968 are covered by this provision.
See Jones v. Tully,
.
See, e.g., Hills v. Gautreaux,
. HUD’s limited liability under § 1702 further increases the improbability that the section was intended to apply to civil rights actions. Limiting HUD’s liability to funds within the control of the Secretary makes sense when applied to HUD’s commercial activities. It is in keeping with the intent identified in Burr to subject HUD (but not the United States generally) to liability to the same extent that a private enterprise would be liable under like circumstances.
The limitation makes no sense as applied to civil rights actions. Since the duties in question are, as already noted, sovereign in nature, it seems unlikely that Congress would choose to waive immunity on behalf of the Secretary of HUD but not the United States generally. Similarly, it is difficult to imagine why Congress would waive sovereign immunity for damage actions based upon the civil rights laws but have recovery depend upon whether the Secretary of HUD had funds within its control sufficient to cover the claim.
.
Compare, e.g., Little Earth, supra,
at
. In this section, we need consider defendants’ claims only insofar as they seek monetary damages under the doctrines of contribution or indemnity. For the reasons already stated in the discussion of sovereign immunity, the defendants’ claims against the United States cannot properly be characterized as claims for recoupment.
In discussing contribution and indemnity together, we do not mean to blur the distinction between these concepts.
See
Prosser,
The Law of Torts
§§ 50, 51 (1971). However, the issue before us is only Our power to recognize the City’s claims, and in this respect; we do not believe that the distinctions between contribution and indemnity are relevant.
See Anderson v. Local No. 3,
. In referring to cases involving "the rights and obligations of the United States,” the Court gave as examples
United States v. Little Lake Misere Land Co., Inc.,
. To the extent that the City’s damage claims are predicated upon a constitutional tort theory,
see Bivens v. Six Unknown Named Agents,
. The City has cited the case of
Hart v. Community School Bd. of Brooklyn,
Rather than reverse the retention of jurisdiction over the third-party defendants in the absence of a cross-appeal seeking such relief, however, we recommend to the District Court that it withdraw its decision to “moot” the third-party action and dismiss it.
