GLADSTONE, REALTORS v. VILLAGE OF BELLWOOD

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Argument of Jonathan T. Howe

Chief Justice Warren E. Burger: We'll hear arguments first this morning in Gladstone, Realtors against Village Of Bellwood.

Mr. Howe, you may proceed whenever you are ready.

Mr. Jonathan T. Howe: Mr. Chief Justice, and may it please the Court.

I am Jonathan Howe, representing the petitioner, defendants in this case -- in these cases of Gladstone Realtors and Hintze Realtors versus Village Of Bellwood.

This case comes to this Court by way of a writ of certiorari in which the order as granting writ has stated the caution presented as whether natural persons and municipalities who are not direct victims of discrimination in the sale or rental of housing have any rights under Article III of the United States Constitution or under Sections 1982, 3604, 3612 of Title 42 of the United States Code, to bring a suit against real estate brokers who they allege to have engaged in racial steering on the theory, that racial steering interferes with such persons’ generalized interest in living in an integrated society.

Our oral argument this morning shall focus upon the statutory construction of Sections 3604 and 3612, which will require the decision of the Seventh Circuit Court of Appeals to be reversed, because these plaintiffs cannot state a cause of action under 3604 or 3612 of Title 42.

It is our contention that Section 3612 on its face provides for the enforcement of certain enumerated rights under Section 3604 and these plaintiffs before this Court possess none of these rights and therefore have no standing to pursue or to bring the cause of action.

Section 3612, it is our contention, must be read as a complementary enforcement provision of the Fair Housing Act, not as an alternative for Section 3610.

3610 has a much broader range of complainants, the person aggrieved concept, those claiming injury or to have been injured as a result of a discriminatory housing practice is far broader than that which is provided under Section 3612.

In addition, the legislative history of the Fair Housing Act is not contrary to the position of these defendants.

It is incomprehensible, that Congress would provide in Section 3610 for an administrative and agency program and deferral to states and local governments and then two sections later, totally abandon and provide a mechanism by which that provision of 3610 could be frustrated and evaded for all claimants.

As to Section 1982, it is the position of the defendants in this case, that plaintiffs have failed to state a claim under that Section and now the decision of this Court in Warth v. Seldin decided in 1985 is dispositive of the claims raised by the plaintiffs under Section 1982.

These cases were brought by identical plaintiffs in two actions in the United States District Court for the Northern District of Illinois.

The plaintiffs that are before this Court include the Village of Bellwood and Illinois Municipal Corporation and six individuals, four of whom are white and all residents of Bellwood and two blacks, one of whom is a resident of Bellwood and one a resident of another municipality.

The defendants in the first case include Gladstone Realtors, a real estate brokerage firm in Illinois and six of its sales people.

The second case involves Robert A Hintze, a sole proprietorship, the owner of that firm and two of his sales people.

The plaintiffs allege in their complaints that the defendants had engaged in illegal racial steering and the defendants are charged that they undertook efforts to influence the choice of perspective home buyers on the basis of race and discouraged prospective black home buyers from purchasing homes in white areas on the basis of race.

Jurisdiction is posited in part upon Section 3612 of articles or Title 42.

In the complaints, the plaintiffs sought declaratory release, injunctive relief, and over $300,000 in damages.

The injury that was alleged to have been sustained by the Village of Bellwood was that its housing market had been wrongfully and illegally manipulated to the economic and social determent of the citizens of such village.

The individual plaintiffs base their injury on two different theories.

The first theory was that the individual plaintiffs had been denied their right to select housing without regard to race.

The second theory they claim that they had been deprived of the social and professional benefits of living in an integrated society.

Pursuant to discovery and as a result of discovery request made by the defendants, the individual plaintiffs admitted that none of them had ever intended during the period at issue to purchase or rent a home in Bellwood or to purchase or rent a home through the services of any of the defendants in this case.

Based upon that discovery, the defendants proceeded to file a motion for a summary judgment in both cases.

The plaintiffs, it was contended, had not set forth a cause of action under Sections 1982, 3604 or 3612 and alternatively that plaintiffs had failed to demonstrate the existence of a case of controversy under Article III.

Subsequently, Judge Decker in the Gladstone case held and ruled in favor of the motion and held that the individual plaintiffs were only testers and not bona fide homeseekers and therefore could not be denied the right to select housing without regard to race.

At most, Judge Decker found that the individual plaintiffs had suffered was the indirect or generalized injury of being denied the benefits of living in an integrated society.

Judge Decker relied in large part upon the decision of the Ninth Circuit Court of Appeals in TOPIC versus Circle Realty.

In that case, the Ninth Circuit had held that a cause of action under Section 3612 exists only for a direct victim of a prescribed practice under Section 3604.

The court went on to hold that the Village of Bellwood had not suffered any cognizable injury.

Subsequently, Judge Perry in the Hintze case adopted Judge Decker’s decision and the case went on appeal to the Seventh Circuit.

There the Seventh Circuit found that the individual plaintiffs themselves had not been denied the right to purchase or rent housing without regard to race, because the plaintiffs did not possess a good faith interest to enter into the housing market and the plaintiffs’ allegations to the contrary in the complaint had been foreclosed by their admissions through the discovery process.

Therefore, testers qua testers did not have a cause of action.

Justice William H. Rehnquist: Mr. Howe, was there a cross-petition for certiorari from that portion of the judgment of the Court of Appeals of the Seventh Circuit?

Mr. Jonathan T. Howe: No sir, there was not, no cross-petition has been filed in this case.

The Seventh Circuit went on however to hold that the plaintiffs claim that they had been denied the right to live in an integrated society, was cognizable under Section 3604 and 3612.

The court made no decision as to the claims under Section 1982.

The Seventh Circuit, it is our position, erroneously relied upon the decision of this Court in Trafficante versus Metropolitan Life Insurance, where this Court held under Section 3610 that residents of an apartment complex could complain that their landlord’s rental practices deprived them of the social and professional benefits of living in an integrated community.

The Seventh Circuit while noting that Trafficante was not technically controlling, felt that its thrust and its rational suggests that individual plaintiffs have standing to allege deprivation of a right to live in an integrated society under Section 3612.

The Court specifically rejected the decision of the Ninth Circuit in the TOPIC case.

As to the Village, the court went on to find without any allegations in the complaint to support the conclusion that it was apparent that the concrete injury with a substantial nexus to the Village’s status as a unit of government could be proved.

Based upon that decision of the Seventh Circuit, this writ was granted.

It is the position of the petitioners and the defendants that Section 3612 does not authorize the filing in a United States District Court of a cause of action by the same class of plaintiffs as would be permitted to file a cause of action after the exhaustion of the administrative remedies under Section 3610.

Section 3612 provides that the rights granted by Section 3604 may be enforced in an appropriate United States District Court.

Thus 3612, it is our position, limits the rights that can be enforced to those under 3604. 3604 provides five distinct categories of rights and practices which it declares to be unlawful.

Not one of those five categories includes a right or generalized interest to live in an integrated society, nor do any of the five categories provide any generalized right or interest to protect the economic and social interests of citizens for manipulation by racial steering.

Justice Potter Stewart: Mr. Howe, you do concede, I guess, don't you that the practices alleged by -- that were carried on by the realtors in this case known colloquially at least as racial steering were violative of the substantive provisions of the Act?

Mr. Jonathan T. Howe: For the procedural process of this case Your Honor, that is correct.

Justice John Paul Stevens: And what Section of the Act do you concede they may violate, Section 3604?

Mr. Jonathan T. Howe: It is arguable and there is substantial case law in the lower courts that racial steering as to a direct victim of such a racial practice does have a cause of action.

There are some other cases –

Justice John Paul Stevens: I am not asking about who has the cause of action?

Do you or do you not agree that if the allegations are true, there was a violation of 3604?

Mr. Jonathan T. Howe: If the allegations are true, there is a violation of 3604.

Justice Potter Stewart: At least for the purposes of your argument?

Mr. Jonathan T. Howe: For purposes of our argument today, that is correct.

Justice Potter Stewart: But your submission is that the steeree has to be the plaintiff [Voice Overlap]

Mr. Jonathan T. Howe: That is correct, that is correct Your Honor.

We also note that 3612 by limiting access to the federal courts to those five categories is part of a broader base of the entire statute.

We must look at the entire Fair Housing Act to determine and to see whether the Sections as defined by Congress provide a harmonious hope.

The Seventh Circuit disregarded this argument.

It did not even address it.

It is our suggestion in our argument that we must compare Section 3610 with 3612 and we must read them together.

Now, Section 3610 addresses itself to the concept of injury sustained as a result of housing discrimination by a person aggrieved.

In Warth versus Seldin, this Court characterized the decision in Trafficante and Section 3610 as giving residence of housing facilities and actionable right to be free from adverse consequences to them of racially discriminatory practices directed at and immediately harmful to others, because they were persons aggrieved, which is a term of art we submit, to give broader opportunities to a class of claimants.

3612, as noted, addresses itself to rights, not to injury. Purely for the sake of example, this Court has held in several cases that even if a person is injured as a result of an invasion of a constitutional right of another person, that injured person cannot seek redress of the constitutional rights of an absent third party.

In fact in the (Inaudible) decision and stated that the established principle is that suspension of the product of a Fourth Amendment violation can be successfully urged only by those whose rights were violated by the search itself, not by those who are aggrieved solely by the introduction of the damaging evidence and thus 3610 does provide a cause of action however to these people who have sustained some injury.

They are persons aggrieved and consistent with the decision in Trafficante, which does provide for the concept of the private attorney general.

we have to look at this word of art of person aggrieved.

It does have significance.

Congress has used that terminology only when it has wanted to expand the jurisdiction of courts to hear claims.

It has a well defined meaning in the case law of this country and as Trafficante shows, the concept is to extend the broadest and possible standing under Article III for the injury sustained.

We do not need to look at the legislative history for the Fair Housing Act in this case, because as this Court stated in the Kepner case, it is a well settled rule that the construction of language in a statute which has a well settled and well known meaning sanctioned by judicial decision is presumed –

Justice John Paul Stevens: Mr. Howe, may I interrupt you once again?

Mr. Jonathan T. Howe: Surely.

Justice John Paul Stevens: Do you concede that -- these plaintiffs still allege that they suffered and harm themselves and you concede that they are persons aggrieved within the meaning of Section 3610?

Mr. Jonathan T. Howe: Your Honor, I think that the answer to that question would have to depend upon the extent to which the decision of this Court in Trafficante would be extended or broadened to cover the class of plaintiffs in this particular litigation.

Justice John Paul Stevens: Let me change it, you argue that they are not persons aggrieved within that?

Mr. Jonathan T. Howe: We take no position because no action has been raised under 3610 for these plaintiffs.

Justice John Paul Stevens: I see, but they are not -- but you do concede, don't you that they are suing for an injury to themselves rather than the third parties?

Mr. Jonathan T. Howe: The injury that they allege to have occurred to them is a result of an alleged unlawful housing practice directed to third parties.

They have claimed -- they did claim that they had been injured in their personal right to select housing.

Justice John Paul Stevens: Right.

Mr. Jonathan T. Howe: But the District Court and the Court of Appeals both held that this was not the case since they were not bona fide homeseekers.

Justice John Paul Stevens: I understand, [Voice Overlap] they make the Trafficante allegation that they were denied the opportunity to live in an integrated community.

Mr. Jonathan T. Howe: That is correct Your Honor, but under 3612, they are supposed to [Voice Overlap]

Justice John Paul Stevens: And your submission I gather is in the alternative, either that's not enough to make them persons aggrieved because there is a little difference between this case and Trafficante or alternatively even if they are persons aggrieved 3612, somehow or other, is a less broad --

Mr. Jonathan T. Howe: Our contention Your Honor is that 3612 in no way includes the definition of persons aggrieved as being a person who can bring an action.

Justice John Paul Stevens: I understand, it does not have that language in it --

Mr. Jonathan T. Howe: None whatsoever.

Justice John Paul Stevens: It also does not have any limiting language in it either.

Mr. Jonathan T. Howe: It does not have limiting language, but our concept of the statutory scheme is that in order to give meaning to the statutory scheme, we must hold that 3610 does have a broader class of claimants that can bring an action or bring up the process into force than that which would be allowed under 3612.

If in one hand we establish a right to go forward as a person aggrieved in 3610 and then two sections later, we say, well, you can bypass that administrative process, you can bypass the state and local remedies that are available, you can bypass the exemption or the deferral to a state court by filing under 3612, the whole concept of two separate distinct complementary enforcement sections, it is our contention, is lost.

Justice John Paul Stevens: Of course the Court of Appeal say, well, there are alternative remedies.

Mr. Jonathan T. Howe: That is the position of the Court of Appeals towards of course we take exception.

Justice Thurgood Marshall: Even then also, anything else in this case --

Mr. Jonathan T. Howe: No Your Honor, it is not, because in the –

Justice Thurgood Marshall: (Inaudible) did not they?

Mr. Jonathan T. Howe: You have to understand that –

Justice Thurgood Marshall: Didn't the floor manager --

Mr. Jonathan T. Howe: Yes he did Your Honor.

The floor manager stated that as far as they were concerned based upon an opinion that they received from the Attorney General that 3610 and 3612 were alternative remedies.

We agree with that for a direct victim, a person whose rights have been infringed, but as to a person as an indirect victim who is asserting the rights of absent third parties by virtue of having suffered some kind of injury themselves, we submit that was not considered whatsoever during any of the legislative debate.

Justice Thurgood Marshall: Is there any language in legislative history that points to it?

Mr. Jonathan T. Howe: There is no language whatsoever Your Honor that the Congress of the United States ever considered or gave thought to an indirect victim bringing an action under this Act.

Justice Thurgood Marshall: Is there any language in the legislative history that said when Congressman Seller was talking, he was talking about the aggrieved person, which is what you just said.

Mr. Jonathan T. Howe: Yes Your Honor, he is --

Justice Thurgood Marshall: But do you have any language in the history that backs you up or is that your statement?

Mr. Jonathan T. Howe: Our statement Your Honor is that Congressman Seller when he was working with the bill, looked at 3610 and 3612 as being alternatives for a direct victim.

We do not find anywhere in the legislative history of the Fair Housing Act that Congress ever gave consideration to the class of plaintiffs that are before the Court today.

We think that this Court, however, properly construed in Trafficante the concept of person aggrieved to being a broader base area for a person to bring a claim, but when it came to 3612, that was not the intention of Congress.

We have got to remember that the Fair Housing Act was an Act that came through great compromise.

It did not have the benefit of any committee hearing.

So it was hammered out on the floors of Congress without committee hearings or committee reports.

And thus, much of what may be said on the floor of Congress relative to what was intended by the legislation, we would submit Your Honor, may not be worth much for purposes of interpreting a statutory scheme which we think on its face is relatively clear.

Justice Thurgood Marshall: Of course, Congressman Seller was also a Chairman of the Judiciary Committee, wasn't he?

Mr. Jonathan T. Howe: That is correct Your Honor.

Justice Thurgood Marshall: You are not saying he did not know what he was talking about?

Mr. Jonathan T. Howe: No, I am certainly not.

I am not suggesting that for one minute.

I am suggesting that when he was speaking however, he was speaking solely of people who were direct victims, not indirect victims.

And therefore based upon that theory, I think you can see a pattern between the two and then when this Court in Trafficante took the concept of person aggrieved for Section 3610 case and extended it to the broadest limits permitted by Article III, that was consistent with the word of art of person aggrieved.

Justice Byron R. White: Was not that Trafficante suit under both sections?

Mr. Jonathan T. Howe: Your Honor, that question has been raised by the respondents and while it is true that there had been an intervention filed in the court below under 3612, the decision of this Court addresses itself solely to Section 3610.

It does mention as part of the statutory enforcement scheme, the existence of not only Section 3612 but also 3613.

Justice Byron R. White: We certainly did not put Section 812 aside, did we?

Mr. Jonathan T. Howe: You did not put it aside, but you did not address it and Justice Douglas in his decision stated that all other issues, there was no opinion of the Court and that the Court was not going to address those.

In the Warth decision and in other decisions of this Court and other courts which have looked at the Trafficante decision, they have viewed them as being a decision under Section 3610 and the language contained there.

It states that only can you give vitality to Section 3610 by a generous construction which goes to standing to suit to all in the same housing unit who are injured by the management of that particular housing unit and that, that can be within the ambient of the statute under Section 3610.

We have got to look in –

Justice John Paul Stevens: Mt. Howe --

Mr. Jonathan T. Howe: Yes sir.

Justice John Paul Stevens: -- while I have you interrupted again.

I take it, there is no definition or distinction in the statute that is termed direct victim.

Mr. Jonathan T. Howe: No, Your Honor.

Justice John Paul Stevens: There is a definition of person aggrieved.

Mr. Jonathan T. Howe: There is indeed.

Justice John Paul Stevens: But you would say, the claimant would have been injured by the housing practice, that is a broader concept than the direct victim concept.

Mr. Jonathan T. Howe: When you talk of injury, you talk about something that somebody has incurred as a result of a housing discrimination.

Maybe that housing discrimination was not directed at them, but they do sustain some injury whereas with the right, we contend Your Honor that, that is individual.

Justice John Paul Stevens: I understand your argument, but maybe I am just repeating what Mr. Justice Marshall asked, but is there anything in the legislative history, the language of the statute that you can point to that says there is this distinction between direct and indirect victims?

Mr. Jonathan T. Howe: No, Your Honor and we submit the reason that we cannot do that is because Congress never considered the distinction between a direct or indirect victim but rather throughout, the thread of the legislative history was that they were talking about people who were barred access to housing.

They were talking of direct victims.

I do not think you will find anywhere in the legislative history anything which would indicate that a party has a right to assert rights of an absent third-party in the legislative history and also in the legislative history, the difference between --

Justice John Paul Stevens: Most of what they are thinking of is direct victims than most applications of Sections 810 and 812 were expected to be alternative remedy application.

Mr. Jonathan T. Howe: As far as the direct victim, yes Your Honor, we concede that.

Justice John Paul Stevens: Yeah, well, most that they ever thought about.

Mr. Jonathan T. Howe: That is correct Your Honor.

Justice John Paul Stevens: And there is nothing indicated that they thought about this narrow category of indirect victims pursuant to one Section and not the other.

Mr. Jonathan T. Howe: That is correct, until the decision of this Court in Trafficante which extended the concept of person aggrieved.

Justice John Paul Stevens: I see.

Mr. Jonathan T. Howe: But prior to that, there is nothing in the legislative history at all which would support any finding that the concept of an indirect victim was to have any kind of right under either 810 or 812.

And I think --

Justice Byron R. White: I guess that if you are right, Trafficante was wrong?

Mr. Jonathan T. Howe: Your Honor, that is not a decision that has to be reached by this Court.

I think that the legislative history while not addressing it, but by using that term person aggrieved in 810 that you could sustain the decision that you reached in Trafficante.

Personally, we might take a different position in that, but I think that as far as the decision of this Court in Trafficante in construing the traditional concept of person aggrieved --

Justice Byron R. White: But insofar as the silence of Congress is concerned about indirect victims, it is no more meaningful here than it was in Trafficante?

Mr. Jonathan T. Howe: I would concur that the silence of Congress and as Mr. Justice Douglas suggested, the legislative history of the Fair Housing Act is a very little help in trying to interpret what the Act was intended to cover.

I think that the impact of Congress again looking at the basic statutory scheme shows that under 3610 that the concept was of having some kind of ameliorating process of requiring a person to file a compliant with the Secretary of HUD to have 30 days for conciliation and if there were state or local agencies which had substantially equivalent remedies and rights that there should be a deferral to the state and local governments so that there could be a conservation of judicial time, that those people who work perhaps in a broader position than those who would be having their rights infringed under 3612 would first go through that administrative process, because 3612 has no preconditions to invoking federal jurisdiction.

And we would consider that part of the pattern again, the intention of Congress was to provide these two vehicles for enforcement.

One of a less adversary context under 3610 with a broader spectrum of individuals who could bring a complaint under 3610 and that they could also do that without having to go into a court for purposes of achieving their rights.

Justice Byron R. White: You must think that, you do not think that the Trafficante indicated that the people who had exhausted their administrative remedies could then sue under 812?

Mr. Jonathan T. Howe: No Your Honor, I do not think we can construe it that way because it provides specifically in 810, how a person may go to court after having instituted the process of filing a complaint with the secretary, the referral to a state agency the unsatisfactory solution to that problem and then allowing a person to go into a United States District Court.

We think that is a pattern that flows through 810, there is no –

Justice Byron R. White: But when he gets there, what Section is he under?

Mr. Jonathan T. Howe: He is under Section 810, 810(d).

Justice Byron R. White: Is that where the cause of action is given?

Mr. Jonathan T. Howe: Cause of action was given in the 810 (a), which states that any person who is harmed, any person aggrieved by an unlawful housing discrimination may file a compliant and then we follow through the process.

Justice Byron R. White: But that does not give them a cause of action in court?

Mr. Jonathan T. Howe: It gives them a cause of action after they have exhausted their administrative remedy, then they proceed to file a case in court.

Justice Byron R. White: Well then I suppose the Trafficante says moreover these rights may be enforced by civil actions in appropriate United States District Courts without regarding the amount of controversy of brought within 180 days after the alleged discriminatory housing practice has occurred.

These rights referring to the 810 rights, after citing 810 (d) and then the court cites Section 812 (a), that is in page 209, 409 U. S. 209.

Perhaps the court was just wrong there, is that it?

Mr. Jonathan T. Howe: The Court could be wrong Your Honor, but you do not have to reach that decision in this case.

Justice Byron R. White: Well, I would suppose if the Court was right, it was saying that these very rights that were rejected in the administrative process could be brought in the Court under 812 and that would include indirect purchases?

Mr. Jonathan T. Howe: We would disagree Your Honor on the basis that in order for a person first of all under Section 810 to be able to proceed under 810, if they are a person aggrieved, it is much broader.

If they go to 812, there is no similar language in 812 for a person aggrieved.

Thus, if they were found to be a person aggrieved under 810 –

Justice Byron R. White: So you are arguing that this reference of 812 then is just wrong?

Justice Potter Stewart: No, no --

Justice Byron R. White: I think the reference is correct because it is --

Justice Potter Stewart: I understand Mr. Howe that your argument was that the opinion of the court by Mr. Justice Douglas was simply summarizing these provisions in the statute?

Justice Byron R. White: That is correct, it is merely a summarization.

Justice Potter Stewart: He also goes on to talk about 813, which gives the attorney general authority to bring a civil action in any appropriate United States District Court.

Justice Byron R. White: That is correct.

Justice Potter Stewart: And that passage is on page 12 --

Mr. Jonathan T. Howe: That is correct to that top --

Justice Byron R. White: And he refers to these rights?

Mr. Jonathan T. Howe: I think that these rights referenced Your Honor would be to --

Justice Byron R. White: Having just left Section d, 810(d).

Justice Potter Stewart: The rights --

Justice Byron R. White: Well, never mind, I was just wondered what your position was?

Mr. Jonathan T. Howe: Basically, it is that would be the individual rights but you can proceed if you are a direct victim under 810 or 812, indirect would only be able to go through 810 and the action would be brought pursuant to 810.

Chief Justice Warren E. Burger: Mr. Howe, having in mind that there appears to be a considerable ambiguity question about it, how much in the scales should there be weighed the ultimate objectives of the legislation as a whole?

Mr. Jonathan T. Howe: The preamble of the Fair Housing Act states as an objective of this country to provide for free and open access to housing.

As to how far the scale should be weighed or challenged or changed, I think that with the statutory scheme as it presently set forth with allowing an indirect victim who meets the standing requirements as set forth in the Trafficante decision to proceed under 810 gives relief to those indirect victims whereas we reserve in 812, the opportunity to those people who suffer an immediate and direct violation of their rights under Section 3604 to immediately have the access to a federal court.

If they need an injunction to stop the sale of property, which they have had an interest in and had been deprived of because of some kind of discriminatory act, then I think we have protected the interests of those people who suffer a direct immediate injury by letting them go immediately into federal court.

Whereas those who may have a broader spectrum of a compliant, they may go through the administrative process, it allows for that amelioration, it allows for that conciliation and many times may result in a remedy, which would be far better than a remedy that might be obtained in court.

And we would suggest Your Honor that the two sections are not alternatives because if we are to treat them as alternatives and you allow a person to immediately go to 3612 who was an indirect victim, you dislocate the whole administrative scheme and I think also because of the reference in 810 to state and local governmental bodies and their ability to promulgate Fair Housing Laws, but this would destroy the incentive for them to go forward, because if everything is going to be decided in a federal district court, then what should they do or why should they proceed.

The scheme of Congress was to share that responsibility with the state and local governments.

And in fact, during the debate on that --

Justice John Paul Stevens: Mr. Howe, there is one another difference on this very point and may be I am wrong in my reading, but 812 authorize suits in state courts as well as [Voice Overlap]?

Mr. Jonathan T. Howe: That is correct Your Honor.

Justice John Paul Stevens: Whereas 810 only authorizes federal act?

Mr. Jonathan T. Howe: That is correct.

Justice John Paul Stevens: Well, how does that cut, I do not -- is there any inference to be drawn from that?

Mr. Jonathan T. Howe: No, I do not think any inference should be drawn from that at all except to allow or to create and say that the rights given under this statute may be enforced alternatively in a state court by a direct victim.

Justice John Paul Stevens: And 812 provides for a stay if there is a pending administrative act.

Mr. Jonathan T. Howe: That is correct also Your Honor.

Justice Potter Stewart: The TOPIC case on which you so heavily relied and on which the District Court relied in this case, in that case Judge Kennedy's opinion says that the court holds -- we hold that the language of Section 3612 does not authorize lawsuits to vindicate the rights of the third parties.

Well, and that characterizes the holding of the court.

Here, the plaintiffs do not made very clear that they are not trying to assert the right of third parties but their own personal rights.

Mr. Jonathan T. Howe: Your Honor, we go back to the concept again of injury versus right.

The rights that they have asserted are those rights which are contained in Section 3604 in 1982.

Justice Potter Stewart: They have asserted an injury as did the plaintiff in Trafficante to themselves resulting from these practices made early go by the statute?

Mr. Jonathan T. Howe: Yes and that injury that this claim was deprivation of the right to live in an integrated society and there is no where in 3604 any corollary right to the right to live in an integrated society.

Justice Potter Stewart: But you would concede at least that their allegations are not those of somebody asserting their rights of third parties?

Mr. Jonathan T. Howe: Their allegation is that as a result of there having been some infringe to the third parties --

Justice Potter Stewart: What you are saying is that the rights that they assert and rights that are simply not created by the statute.

Mr. Jonathan T. Howe: That is correct Your Honor and that the rights that they say or the rights that they say were infringed was racial steering against absent third parties and as a result of that steering against those third parties which would be made unlawful under 3604.

They have suffered injury because they have been deprived of that right to live in an integrated community.

Chief Justice Warren E. Burger: Do you think Trafficante helps you very much on that?

Mr. Jonathan T. Howe: Well, I think the concept of Trafficante does show that this Court did consider Section 810 to confer broad standing of the person aggrieved concept and we would suggest to the Court that its absence of any person aggrieved language in Section 812, this Court should not imply person aggrieved in Section 812.

If there is to be broader jurisdiction under Section 812, it should be Congress and not the Court that grants it by virtue of letting Congress put in the term of art person aggrieved, if that is their intention to allow direct access to indirect victims of racial discrimination.

I would like to reserve my remaining time if I may.

Argument of F. Willis Caruso

Chief Justice Warren E. Burger: Very well Mr. Howe.

Mr. Caruso?

Mr. F. Willis Caruso: Mr. Chief Justice and may I please the Court.

We would like to cover four main topics in our discussion.

First that the individuals here, the individual home owners are very much individual people who have been injured and are being injured and it is an immediate injury.

Secondly that the Village is suing to protect the village fisk and that is an immediate and a very much felt injury right now.

That the legislative history shows that these two Sections 3610 and 3612 are alternative methods of enforcement, and finally the Trafficante is very applicable to this situation and that the injury here indicates an even more stronger situation of injury to individuals in taking away rights guaranteed under 3604.

The homeowners Mr. Powell and the others, Mr. Powell happens to be white, found that there was steering going on in the Village of Bellwood and that the impact was to create fear and problems and so they tried to do something about it.

And Mr. Powell wanted to live in Bellwood in an integrated society, in integrated schools, in a normal stable kind of situation and he wanted to do something about it.

So he went to the village and he went to the Leadership Council, a fair housing group in Chicago to work on this.

Ms. Perry is black and she lives in Bellwood and she wanted to continue to live in this community, which was a normal integrated community and she wanted it to stay that way where her children could live and deal with people of the same kind of living situation on a normal basis and to have a healthy real estate market free from fear and constant pressure by the real estate community.

At the same time, the village here received complaints of the Mayor's office and the police department of real estate people out steering in the neighborhoods and creating fear and problems among the people in the community.

And the Village Board voted to ask for help from a fair housing organization, the Leadership Council.

Some of the plaintiffs and other people then went out to find out what the practices were.

What they found out was that when a white person went in and asked for a certain kind of housing at a certain value, they were sent to certain areas considered to be protected and set aside for whites, when blacks went out and gave the same kind of information, we want a $45,000 house or whatever the figure was, so many bedrooms and so forth, they were steered mainly to two particular areas where they were trying to change the area from white to black.

The village after seeing this information from the audits, both from the people who are plaintiffs in this case as well as other testers or auditors or investigators or whatever they may be called, the village then voted to take action in the federal district court and requested again assistance in filing that case in the federal district court.

They sought direct relief under 3612 and this was an immediate problem.

This was something that had to be solved quickly and it is something that had to be done and get into court right away.

And they sought that 3612 remedy because among other things under 3614, there is a provision that these cases are supposed to be expedited, and in many cases they are.

Defendants here acknowledged that there is a violation of 3604 (a) and that they think that a plaintiff, a person who is affected by violation of the Fair Housing Act must under these circumstances go through the route of going to HUD and the administrative process and only after that could they sue.

That seems to indicate that they see and in fact they say, they see a system here.

Well clearly, if the Congress meant to have that kind of a system, they could have followed the Title VII approach and they did not do that.

Congress knew how to make that exhaustion necessary and they did not do it.

The legislative history –-

Chief Justice Warren E. Burger: Let me test out how far you would carry this, suppose someone living in the Springfield or Peoria came in and said -- in a complaint alleged that they did not like the country life, they had wherever was they were living and they wanted to move into a totally integrated community and they were thinking about coming into this particular complex, but the situation that has been described in the pleading is existed and therefore they bring a suit under 3612 in federal court immediately.

What would you say about that?

Mr. F. Willis Caruso: Well, I think that this case does not extend anywhere near that far, anywhere near that far.

Chief Justice Warren E. Burger: But I am just trying to see how long the arm is, how you would carry it?

Mr. F. Willis Caruso: The first thing is that in the complaint, the area involved is specifically delineated by streets, a very specific area where this steering activity was taking place is delineated, it starts from there.

Chief Justice Warren E. Burger: Well, I am assuming you consume that my hypothetical, that is the same?

Mr. F. Willis Caruso: And the people involved suing here are the village itself or this area is all included within the village and the people who live in the community, although one of whom live right in the municipality, Miss. Sharp lives in Maywood, which is on a budding community, subjected to the same kind of problems and in the same marketplace.

Chief Justice Warren E. Burger: Do they need to live in the same community to get relief?

Mr. F. Willis Caruso: I think it is a practical matter of the experiences and it seems that the experience would be and the violation of future would be people living either in that community or very close by because they are affected by the damage that we allege, the manipulation of the marketplace.

Now it could be, I do not think it extends to Springfield Your Honor, because I do not think that the marketplace extends to Springfield, but the marketplace under some circumstance might include two or three communities all being subject to a steering practice.

Justice Potter Stewart: The fact is that the Trafficante opinion in at least two places and of course the opinion emphasizes that the plaintiffs were occupants of a precise and limited apartment complex, does not it?

Mr. F. Willis Caruso: Yes it does.

I think that in this instance --

Justice Potter Stewart: At least one of those references would seem to pretty clearly limit the standing in that case to people so situated, would not you agree?

Mr. F. Willis Caruso: I would agree that it is very limited and would be limited.

I clearly would not include Springfield.

And as we move in from the Springfield, I think it would not include a lot of other things, but I would say that from experience, the real estate marketplace extends beyond sometimes a specific community and there is --

Justice John Paul Stevens: Is it true that there are 8,200 people in the Trafficante apartment complex?

How many people are there in Bellwood, do you know?

Mr. F. Willis Caruso: They were about 22,000 at this time Your Honor and Bellwood interestingly enough was a very built-up community.

I mean it was a community which developed kind of the same kind of time, had a lot of people of the same kind of background, same kind of homes who had lived there for quite some time.

It had a lot of the indices of a very close-knit community, with people with similar interests and similar backgrounds.

Justice William H. Rehnquist: You would agree, would not you Mr. Caruso that you have to go beyond the holding in Trafficante in order to sustain your position because of the fact that appear, the plaintiffs in Trafficante were tenants or occupants of the apartment complex in question?

Mr. F. Willis Caruso: I think that the case is different than Trafficante in that respect that Trafficante was a particular apartment complex, although a very, very big one, and Bellwood is different because it is homeowners, it is a community itself and it is different because the villages involved trying to protect the values of the homes from being depreciated by this process and thereby limiting the tax pay.

So there are those differences.

It seems to me there is one thing that is stronger here and that is that these home owners are being damaged directly by an attempt to change the process.

In other words, change it from an integrated community to an all black community and it seems to me that, that is even a stronger injury than the situation and where in Trafficante they were trying to keep blacks out and the whites wanted to make it an open community.

Here, the community and the municipality have worked to make it an open community and as a result of that, the real estate industry now is trying to turn on them and change it to an all black segregated community.

So I think it is a little stronger in that regard, but it is broader than Trafficante, it includes more people.

Justice Byron R. White: But even if Trafficante has limits, which it certainly does and even if this exceeds those limits, that is a long ways from taking the position that only direct purchasers have a cause of action under 3612.

Mr. F. Willis Caruso: The position that only direct purchasers would have a cause of action does not seem to follow anything in the Act or any of the existing decisions.

And particularly in looking at 3604, for example on advertising, clearly the people have to bring a suit to prevent that kind of advertising, 3604 (c) and 3604 (e) among other things contemplate the kind of action that is set forth here and in addition, all of the district courts and Courts of Appeals, most of the Courts of Appeals have dealt with situations where many different kinds of parties have been allowed standing under 3612, when there has been an injury as a result of a violation of the Fair Housing Act.

The legislative history as indicated previously in some discussion on questions and the Dirksen involvement in that indicates that 3612 was meant to be a strong enforcement tool and it is in fact necessary to make this fair housing law work.

HUD is very busy and HUD is doing more and more, but it is important and the legislative history indicates that it was intended that individual people, local people, like the people in this community would have a right to act or work together to try to protect their community and do something about a problem they see as being very important.

We think that the situation here presented represents individuals and the municipality who are directly injured, who have need the activity here locally to protect their community and to try to maintain a healthy viable local community, that the legislative history supports the position that these two Acts should be enforced separately and concurrently as is necessary along with other ways of enforcing these laws is necessary and that the case should be allowed to go forward and that the proof should be allowed to come in and that the plaintiffs should be allowed to show these steering practices, to show what these realtors do, to try to change the neighborhoods with all of the things that can result from that, like the problems with the school segregation and so forth.

If these communities can be kept integrated and healthy schools can be maintained, the other problems of segregation can be helped and prevented by integrated communities and we respectfully request that the plaintiffs here be allowed to proceed to show these violations, to present the evidence, to do the discovery and to proceed with this case.

I would like to with the indulgence of the Court to pass on what remaining time I may have to the United States.

Argument of Lawrence G. Wallace

Chief Justice Warren E. Burger: Very well Mr. Caruso.

Mr. Wallace, of course, as usual, there is no obligation on you to consume all that time.

Mr. Wallace: Yes Mr. Chief Justice and may it please the Court.

The first I want to emphasize about this case is that contrary to some impressions that some may have of it; it is not in our view a case about whether testers have standing to sue under Section 812.

Testers do provide important evidence, particularly in racial steering cases, it is very difficult to prove racial steering in our experience in the absence of evidence of this kind and occasionally you can evidence from a former employee of the company, but by and large this has been the most prohibitive kind of evidence in steering cases, but it is just coincidental that the complainants in this case also happen to be the witnesses, the potential witnesses who have been doing the testers.

Their interest here is an interest in the way their community has been affected by the cumulative effects of the steering practices, and its cumulative effects that the steering practices have their pugnacious effects on the community.

Insofar as the statute deals with steering, its focus is not really as an anti-fraud provision about a particular individual.

Very often the individual who has been steered, who is a willing purchaser of a home or a renter is quite satisfied with the property that he is settled into.

It is the cumulative effect that causes the injury to the community and the people living in the community.

Justice William H. Rehnquist: Mr. Wallace, the government's brief on page 6, in it is introduction and summary of the argument says, “we submit that the individual respondents have standing to challenge petitioners’ racial steering practices under the Fair Housing Act.”

Now, as I understand the Court of Appeals' opinion, it held that both the city and the individual respondents had standing.

Does the government take a position on the standing of the city?

Mr. Wallace: We have not taken a position in our brief Mr. Justice Rehnquist, but we have no disagreement with the opinion of the Court of Appeals on this subject and indeed HUD has entertained complaints from municipal corporations similarly situated and initiated investigations in response to such complaints.

So while we didn't brief the question because we thought that the case was pretty clearly controlled by Trafficante with respect to the individual complainants, we have no disagreement with the holding of the Court of Appeals or indeed with any aspect of Judge Powell’s opinion, we think it is a fine opinion.

Justice Potter Stewart: My question Mr. Wallace was simply this.

Let me begin by expressing my understanding with which may I ask you, if you agree that up until the enactment of this federal legislation so far as federal statutory law went, forgetting for a moment 1982, there was nothing wrong about racial steering so far as federal statutory law went.

Therefore any rights that are asserted by the plaintiffs in this case have to be based upon this statute, limiting again forgetting the constitution in 1982, which -- what substantive rights are these plaintiffs asserting, created by 3602 or 3 or 4 or what?

Mr. Wallace: It is 3604 or what we call Section 804 of Title VIII, 3604 (a).

It's set forth quite completely in the briefs for the petitioners and our theory right along and we have brought about 80 cases of our own in the course of the Act alleging racial steering of one kind or another, has been that it is a violation of that portion of 3604 (a), which refers to or otherwise make unavailable or deny a dwelling to any person.

The first part of 3604 (a), which includes the qualification of the bona fide offer focuses on a violation by the seller himself or the renter himself and they wanted to afford the protection to make sure there was a bona fide offer made to that individual in many instances rather than a company engaged in the business, before there would be a violation of that kind, but the remainder obviously has principal reference to people engaged in the real estate business or to big renters of property.

Justice Potter Stewart: Well, now were any one of these plaintiffs been rendered unavailable to housing as a result of the actions of these defendants?

Mr. Wallace: No there -- as I look at, as we look at the right that they are asserting under the statute, it is not a right as counsel for the petitioners as expressed to live in an integrated society, Congress could not guarantee that --

Justice Potter Stewart: No.

Mr. Wallace: -- and did not purport to guarantee that, but it is a right not to be injured by the effects of practices that are proscribed under the statute and it is a right not to be affected by the racial steering that the statute prohibits.

It is very similar to the right asserted by the plaintiffs in the Trafficante case.

There was as the Court noted in its opinion in Trafficante, considerable focus in the legislative history on the dangers to the community of discriminatory practices in housing and the benefits to all members of the community with adherence to the requirements that were being proposed in the Fair Housing Act.

And one of the telling things about steering case is and we reviewed every decided case yesterday rather hastily, every decided case under Title VIII, one of the telling things is that we did not find a single instance of a case in which an individual had sued solely because he had been steered and claimed an injury as a result of that.

There were a few cases in which an individual claimed that he was illegally denied access to a particular house that he wanted to buy or a particular apartment that he wanted to go into and was seeking that and additionally alleged that there was steering done.

Justice Potter Stewart: Well, that is a result of steering.

Mr. Wallace: That could be a result of steering.

Justice Potter Stewart: No, that is the hope for result of steering.

Mr. Wallace: Yes, often the result is that he was shown something else and he liked it and he moved in and he never knew about the other and he wasn't trying to get into the other.

Justice Thurgood Marshall: That is there in this case, what is the different than “red lining?”

Mr. Wallace: Red lining is usually used in reference to credit practices by lending institutions, and areas –-

Justice Thurgood Marshall: It is lending on property.

Mr. Wallace: Yeah, that is right, areas where it is harder to get a mortgage fund, even though --

Justice Thurgood Marshall: But here, they had lines which is saying, whether they were red or blue?

Mr. Wallace: Well, here there were areas where steering of customers by the real estate companies was done on the basis of race.

But what we have found is that the cases where private suits have been brought alleging steering and attempting to enjoying the steering or claiming damages from steering have typically been cases by community fair housing organizations where the plaintiffs would be a number of individuals who have banded together because of the effect the steering has had on their community.

And it may well be that some of these plaintiffs have actually dealt with these companies and being steered themselves, which you do not ordinarily see that alleged in the complaint because it is very difficult for them to prove what was available that they were not shown in the absence of the testing evidence, which is something gathered separately.

And in other words, if you have someone who was himself a victim of steering as a plaintiff from one of these cases, it is more or less coincidental and it is his similarity to other plaintiffs that we have in this case that is his real motivation for being a plaintiff rather than the difference, which he does not even allege typically.

So that tells us something about what it is as the incentive to sue here and that has something to do with realistically where the standing should be recognized.

Justice Potter Stewart: Just let me be sure I fully understand you that the plaintiffs’ entire substantive claim, substantive statutory claim, forgetting again about 1982, is based upon the second half of 3604 (a), forgetting or otherwise make available, make unavailable, excuse me, is that correct?

Mr. Wallace: Well that is our theory that we have operated on about where steering as proscribed in the statute.

Justice Potter Stewart: And what the injury as to these plaintiffs.

Mr. Wallace: No, there are other provisions there that some have looked toward in the literature as bearing on the steering --

Justice Potter Stewart: But I am asking you --

Mr. Wallace: But we have relied on 3604(a) and no court has ever expressed doubt that steering is prohibited by the statute.

Justice Potter Stewart: Oh, surely, I think that is been conceded by your brother.

Mr. Wallace: Yes, that has been conceded for purposes of this case.

Justice Potter Stewart: Yes, yes.

Mr. Wallace: So, we are dealing here with the typical kind of private complainant about racial steering and the injury that is typically alleged in a racial steering case.

And I think that is of some importance in concomitance with the concerns that were being expressed in Congress about the community interest that would be served by this legislation.

Now as a matter of fact, as Mr. Justice White was suggesting early in the argument, there were claims made under Section 812 in Trafficante, which is the Section that the suit has been brought under here and indeed there were complainants in Trafficante, complainants in intervention who had not exhausted their administrative remedies with HUD, who would not complain to HUD at all and the sole basis for their suit in intervention was Section 812.

And there is significance in our view to the statement that he quoted from page 409 of the opinion that individuals could sue directly under Section 812 because those were among the complainants who were seeking not only injunctive relief, but they also made damage claims and on remand, the case was settled.

But the District Court and everyone else thought that their claims had been upheld along with the claims of the two tenants who had first gone to HUD and were suing under Section 810.

Justice Byron R. White: Do you understand the challenge here to be a case of controversy challenge?

Mr. Wallace: Well, there has been --

Justice Byron R. White: Solely or what?

Mr. Wallace: I do not think it solely.

I think there is an argument being made under Article III in the petitioners’ brief.

It seems to me that, that challenge is largely foreclosed by the decision in Trafficante and that there is an open question here, it is a statutory question.

These people are directly effected in much the same way as the complainants in Trafficante.

Justice Byron R. White: A statutory question in the sense that even if there is a case of controversy, Congress did not intend this particular kind, this class of person do have the right to get in the court, even he could get in the court under 810.

Mr. Wallace: It seems to me that, that has been --

Justice Byron R. White: Although there would be no difference between that person under 812 or 810 as far as case of controversy is concerned.

Mr. Wallace: That in my view is the principle question in the case.

I agree with that formulation.

Justice William H. Rehnquist: Mr. Wallace, to get back to 3604, which is apparently the ‘a’, which you say as the source of the substantive right.

It reads, to refuse to sell or rent after the making of a bona fide offer or to refuse to negotiate for the sale or rent however otherwise make unavailable.

You do not read the subsequent clauses after refused to sell or rent, after the making of a bona fide offer, as for having required a bona fide offer?

Mr. Wallace: Not at all, not at all Mr. Justice Rehnquist.

The motivation behind putting in the bona fide offer requirement as it is recounted in petitioners’ brief focused on the liability of the particular seller or renter and there was resistance to making him liable in the absence of a bona fide offer and the language was carefully placed in the statute.

There was no concern about the practices of real estate companies that would not even tell people about --

Justice William H. Rehnquist: But what about an individual seller who refuse to negotiate for the sale or rental of property?

Mr. Wallace: Well, he I think would be liable as a matter of fact.

Justice William H. Rehnquist: In spite of Congress's concern --

Mr. Wallace: They were concerned that someone should not be claimed to have refused to sell to someone because of his race, if that person was not a good faith purchaser who made a bona fide offer, but if the seller was going to refuse to even show the property or talk to anyone, the concern did not carry over.

Of course, it is not a question in this case.

I think it is clear from the statutory language that the bona fide offer qualification relates only to refusal to rent or sell, if that is the claim.

Justice William H. Rehnquist: And not to negotiate it?

Mr. Wallace: Well, that is right.

I think if you refuse to even talk to someone about what is available, it is a violation of the statute as we view it, but that is not ordinarily the form the violations take.

It is really unreasonable to expect a bona fide offer to be made for a house that is not even shown to someone, and that applies to both the steering and the refusal to negotiate.

I think it is the sensible way to read the statute.

Justice Lewis F. Powell: Mr. Wallace, is there any cause of action that may be brought under the Act, under Section 3610 requiring extortion of administrative remedies?

In other words, does the option always prevail with respect to every cause of action of the Fair Housing Act to go directly to 3612?

Mr. Wallace: That is our understanding of the statute and indeed --

Justice Byron R. White: Except for the United States?

Mr. Wallace: Except for the United States.

We never can– really, we have a separate provision.

Justice Lewis F. Powell: What are the advantages of using 3610?

Mr. Wallace: There are great advantages and they are the ones that Congress actually anticipated in providing this as an alternative remedy and that is that many matters are informally settled without the expensive litigation through the good offices of HUD, through the conciliation process.

HUD is now getting about 3800 complaints per year, a far greater number than are submitted to the courts.

And many of them are quite expeditiously finally resolved, not always in favor of the --

Justice Byron R. White: It is cheap.

Mr. Wallace: It is cheap, that is right.

It is inexpensive and they did a computer run down for us this week of their disposition as between October of 1976 and May of 1978, and more than half of the complaints were finally disposed of within 120 days.

During that period, there were 11.2% were finally disposed of within 30 days, and another 17.2% in 30-60 days, another 16.2% in 60-90 days, and so on, 13.8% in 91-120 days, So many of the complaints can expeditiously be disposed of.

As we point out in our brief, it has been HUD's consistent interpretation of the statute that the alternative remedies are available for any person aggrieved within the meaning of 810, and at every step in the process, their notifications to individuals who have complained to them include a statement that they have a right to sue under Section 812.

And indeed, there is much in the legislation evolution of the two provisions, which suggests that this is right.

All of the resistance to the fair housing legislation and there was a great deal of resistance.

One of the main focal points was on the idea of the federal bureaucrats becoming involved and indeed the deferral, the main motivation behind the deferral that was required to local fair housing officials was that the federal bureaucracy should not be interfering in areas where local conciliation and mediation efforts are available, which suggests that quite the opposite of what is being argued today that the deferral should take place in the absence of HUD’s involvement, rather than as the statute focuses it in the presence of HUD's involvement, it is HUD itself that is supposed to defer of these processes.

And in looking again at the legislative history, the immediate evolution of 812 is connected with this and it was recounted in some detail in our brief in the Trafficante case, which I reread yesterday.

And I regret to say some of the pertinent portions of the legislative history were not reproduced in any of the briefs in the present case, but they can be found in our brief in the Trafficante case.

And I would like to just mention rather briefly some of those pertinent aspects of it, in addition to the ones that we have cited in our present brief.

And I have for the convenience of those members of the Court who would like to have it, I have submitted to the clerk ten copies Xeroxed of the pertinent pages of the brief that we filed in Trafficante and the --

Justice Byron R. White: It sounds like you were preparing like a witness yesterday?

Mr. Wallace: [Attempt to Laughter] Well, we did recount there in some rather lengthy textual footnotes, the immediate derivation of Section 812.

And this is principally in footnote 8 of that brief and in footnote 12 of that brief.

In footnote 8, we pointed out that Section 810 itself was derived from Section 11 of a Bill which Senator Mondale had offered as an amendment to a house bill, the house bill that came over at this time in 1968, this is after two years of previous history that we recounted in some detail in our present brief.

The Bill that came over at that time from the house did not include any fair housing provisions at all.

And Senator Mondale offered as an amendment a Bill that included a provision similar to Section 810, but it also included authority for HUD issue cease and desist orders that would be enforceable in court.

And it was the cease and desist authority, something similar to the way the National Labor Relations Board operates, that was the focal point of controversy and that resulted in the failure of a number of cloture motions, which we have recounted in that footnote 8.

And at that point, after these cloture motions had failed, Senator Mondale moved to table his proposed amendment and supported a substitute amendment offered by Senator Dirksen, which is the one that was adopted and later was adopted by the House.

And this retained the Section 810 mechanism for making an administrative complaint, but took the authority to issue cease and desist orders away from HUD and in its place substituted Section 812 an alternative to go directly into state or federal court.

And as we argued then in our footnote 12 in that brief, because there were after all two complainants in that case, who were complaining only under Section 812, there is no reason to think that the failure to repeat the definition of person aggrieved in Section 812 made any change in the class of complainants who were authorized to pursue either of the remedies, because Section 812 was designed as a substitute for the cease and desist remedy that had originally been proposed for the class of persons aggrieved, defined in what had been Section 11 of Senator Mondale's bill.

There was nothing in this immediate evolution of the alternative remedy that suggests any notion of a different class of complainants.

It was a way to ameliorate the objections to a federal administrative remedy for the class of complainants that both proposals were designed to give a right of action too.

And so the additional aspects of the legislative history, which we have recounted in our present brief indicate that the rational hypothesis by the Ninth Circuit and it was entirely hypothesis, there were no references at all to the legislative history in the TOPIC opinion, that those do not comport at all with the actual evolution of the provisions at issue or the congressional intention, which was as has been the practice that it is really the administrative remedy that provides the inexpensive quick road to relief in many instances and the judicial remedy was not reserved for a special class of cases that had to be more expeditiously handled.

Our experience is that the hope for expedition in Section 812 and Section 813 cases are often does not come to pass.

And so, we really think that this case is in every pertinent respect no different from Trafficante.

It is true that you have a wider geographic area that these people are concerned about.

They do not happen to be people living in apartment complex.

They are living in a suburban community, but they too are protected by the intent of Congress and by the protections of the Act.

And as Judge Stern, I think very eloquently stated in a case in New Jersey that is cited in the briefs, Fair Housing Council against Eastern Bergen County, the fact that the alleged injury and I am quoting from Judge Stern now, affects a large number of people in a large geographic area does not serve to attenuate it.

On the contrary, it makes the harm more severe.

Residents of an all white housing complex may need only to look to the next residential facility for the inter-racial associations they desire.

If the allegations here are true, residents of Bergen County may have to go to an entirely different neighborhood or community.

Similarly, a completely white building is less of a ghetto than a completely white neighborhood or a community, that the court on the Sanitaire has been drawn around an entire community rather than a single apartment complex does not render it unlawful.

Justice Potter Stewart: How far does that go Mr. Wallace, according to the Chief Justice's question?

Mr. Wallace: Well, it goes to people who --

Justice Potter Stewart: Any residents of Illinois can sue and say, I am uncomfortable living in a state where there are any communities; they are not fully disaggregated?

Mr. Wallace: We do not think so, we think they have to show a more direct interest that their own community is affected by the practices that they are complaining us.

Justice Potter Stewart: The state is community in a broader sense?

Mr. Wallace: It is -- the best --

Justice Potter Stewart: So is the United States?

Mr. Wallace: The best answer I can give you is that, that is not the kind of complaint that HUD has received --

Justice Potter Stewart: But you just made the point that Trafficante must, its logic must take us way beyond a single apartment complex, now how far beyond?

Mr. Wallace: Probably to the point where the complainants are realistically being affected.

Justice Potter Stewart: Maybe as a resident of Illinois, I do not like having any non-disaggregated community in the entire state in which I live.

Mr. Wallace: Well, it isn't their feelings being hurt, it is --

Justice Potter Stewart: Well, I am hurt by it.

I say I am hurt?

Mr. Wallace: [Attempt to Laughter] Well, the question is whether the way they have to live is affected by unlawful practices of someone else that the Congress has proscribed and that they are complaining of, not whether their feelings are hurt because the law is not being observed by everyone in the country or in their state.

It is always difficult to formulate these things with exactitude.

I can tell you that HUD does not undertake investigations at the behest of people who do not in someway allege that they are affected.

For example --

Justice Potter Stewart: Economically affected or how?

Mr. Wallace: No, they do not require a pleading the way a court might, but for example, if they got a complaint from a former employee of a real estate company that the company was engaging in steering practices and that employee does not anyway say that he is still in that community and is affected by those practices.

HUD does not initiate an investigation, instead it will refer that complaint to the Department of Justice for us to see whether there is a violation to be investigated.

The same thing is true of an anonymous complaint.

It has to be a complaint from someone who shows that something is affecting him, his life and his community, he is someway affected --

Justice Potter Stewart: But not necessarily economically, he does not have to show that --

Mr. Wallace: No, no.

Justice Potter Stewart: -- twice the value of cost of the market price of his house is going down?

Mr. Wallace: No, he just has to show a direct interest of his own.

And we do what we can to enforce the statute.

The Court in Trafficante noted that the housing Section of the civil rights division had less than two dozen lawyers at that time.

Justice Potter Stewart: And therefore relied on private attorneys general?

Mr. Wallace: That is correct.

Justice Potter Stewart: And I just wondered how many private attorneys general there are?

Mr. Wallace: Well, we hope enough to enforce the statute.

We now have only 21 attorneys in that same Section.

And it has the additional responsibility of enforcing the equal credit law as well as the fair housing law.

Justice Potter Stewart: That is the red line to which --

Mr. Wallace: That is correct Mr. Justice Stewart.

And so it still has to be private enforcement that is the primary tool to bring about the congressional purpose here.

Justice John Paul Stevens: Mr. Wallace, on this question of the scope of Trafficante, you know, apparently Bellwood had some 20 or 25,000 people and that if we have to compare to 8,200 in Trafficante, but then I just recall that the complaints actually concern a limited area within Bellwood, does not it?

Mr. Wallace: Well, they specified --

Justice John Paul Stevens: Does that go across in the Maywood, I am not sure of it?

Mr. Wallace: They specified a limited area to which black customers were being steered.

That was part of the specificity of the complaint, but I do not think the complaint specified that as the only area affected by the steering.

Justice John Paul Stevens: I see, so the relevant number of people for purposes of comparison is the population of Bellwood?

Mr. Wallace: I would say so Your Honor.

Thank you, my time is expired.

Rebuttal of Jonathan T. Howe

Chief Justice Warren E. Burger: Very well Mr. Wallace.

Do you have anything further Mr. Howe?

Mr. Jonathan T. Howe: Yes, may it please the Court.

Much has been said about the Trafficante decision in this argument.

I think the Court's attention should be directed to page 212 of the opinion wherein the Court stated, we reverse and remand the case to the District Court leaving untouched all other questions.

And I think this follows right after the statement by Mr. Justice Douglas stating, we can give vitality to Section 810 (a) only by a generous construction.

So I think that all other questions in Trafficante were reserved and untouched by this Court.

One other factual --

Justice Byron R. White: The Court left open a 1982 question?

Mr. Jonathan T. Howe: That is correct also Your Honor.

Justice Byron R. White: But it did not mention 812?

Mr. Jonathan T. Howe: It did not mention it in the footnote but it dealt with the 1982 but it did in this language at the end, and then taking your concurring opinion to Mr. Justice White wherein you stated that you would limit it to the facts of the case as presented.

One other fact which is extremely important in the Trafficante decision is that the action was brought against a single landlord who alone controlled access to that apartment complex.

No one has alleged nor is there any reason to believe the two realtors doing business outside of the Village of Bellwood itself have a dramatic impact upon housing patterns within Bellwood.

Justice Potter Stewart: And that would almost go to the merits?

Mr. Jonathan T. Howe: It could Your Honor, but I think that the fact that we like to point out is that there is a distinction between the class of defendants in Trafficante as to the class of defendant in this particular case.

The concept of the public policy argument as advanced by the United States, no showing has been made that by opening an opportunity under Section 3612 to indirect victims that the policy of the Fair Housing Act would be advanced.

And we would submit that it would be to the contrary because it would provide a mechanism by which the entire metrics of an administrative remedy through Section 3610 could be avoided and circumvented.

We think that the language of Section 3610 of person aggrieved is unique and the failure of Congress to include that language specifically in Section 3612 indicated a different view by Congress and we need to only look at the natural meaning of the words contained in the statute to go forward with that.

The fact that the attorney general's office lacked staff is no reason for this Court to make any consideration as to how it is going to interpret a statute.

It must do that solely and exclusively on the basis of what is contained in the statute.

We submit that we know of no other statute in the United States that would allow the systematic circumvention of remedies, if this court is to adopt the position that has been advanced by the plaintiffs.

It is necessary to confine an actionable claim within the limits of the language used by Congress and consistent with the logic that is embodied in that statutory scheme rather than allowing it to extend beyond the intentions of Congress.

Thank you.

Chief Justice Warren E. Burger: Thank you gentlemen.

The case is submitted.