Keith v. Volpe

NORRIS, Circuit Judge,

dissenting:

I

This action was initiated in 1972 against various federal and state agencies and officials responsible for funding and constructing the Century Freeway in Los Angeles County. The complaint sought to assure protection of the environment and to guarantee the availability of replacement housing for persons displaced by the freeway on a nondiscriminatory basis.1 In the claims that are relevant to this appeal, plaintiffs charged federal and state defendants with violating federal statutes protecting homeowners, tenants and businessmen who would be forced to relocate because of the construction of highways funded with federal aid.2

The City (the “City”) of Hawthorne was not named as a defendant in the original complaint, nor could it have been. As a municipality, the City had no responsibility for funding or building the freeway. Shortly after the initial complaint was filed, the City voluntarily became a plaintiff in the action, thereby committing its resources to assist the NAACP and the other plaintiffs in prosecuting the case.

Years after a preliminary injunction was issued halting all work on the freeway, the parties entered into a consent decree which was approved by the district court on September 22, 1981. The stated goal of the consent decree is “to provide for the housing needs of those living in the area of the proposed path of the freeway.” Excerpt of Record (ER) at 3. In order to accomplish this goal, the consent decree adopts a Housing Plan which requires the state and federal defendants to make 3,700 units of housing available to help house the 21,000 persons who would be displaced by the freeway. The decree requires that 55 percent of the replacement units be affordable to low-income households and 25 percent be affordable to moderate-income households. The consent decree imposes no obligation on the City, the NAACP, or any other plaintiff to provide replacement housing, to provide funding for replacement housing, or to assist the defendant state and federal agencies in performing their obligations to provide replacement housing.

The consent decree designates the California Department of Housing and Community Redevelopment (HCD) as the agency responsible for administering the Housing Plan. Using funds provided by the federal and state defendants, HCD contracted with private developers to build housing units *488which would be offered (for sale or rental) on a priority basis to households displaced by the freeway.

This appeal arises out of an agreement between HCD and a developer for the construction of a 96-unit apartment complex in Hawthorne known as the Kornblum project. The Kornblum developer’s applications for a' building permit, a lot split, a zoning change, and a site development permit were denied by the Hawthorne City Council.3

Following the City’s rejection of the Kornblum project, plaintiffs filed a supplemental complaint against the City which is the subject of this appeal. The gravamen of the supplemental complaint is that in turning down the Kornblum project the City violated various state and federal laws which prohibit discrimination against minorities and low-income households. Specifically, the supplemental complaint alleged that the City violated the federal Fair Housing Act, 42 U.S.C. § 3601 et seq., which guarantees equal opportunity in housing without regard to race or color. The City was also charged with violating Cal.Gov’t Code § 65008, which prohibits discrimination in housing on the basis of race, color, or low-income status. Next, the plaintiffs claimed that the City violated Cal.Gov’t Code § 65583 by failing to adequately take account of the Century Freeway displacement in devising its local Housing Element.4 Finally, the supplemental complaint claimed violations of the federal and state constitutions. On April 15, 1985, the district court granted plaintiffs’ motion for leave to file the supplemental complaint under Federal Rule of Civil Procedure 15(d).

II

Rule 15(d),5 which permits supplemental pleadings, focuses on events which have occurred after the date of the original pleading. Thus, a supplemental pleading is one designed to bring earlier pleadings up to date. See generally, 6 C. Wright & A. Miller, Federal Practice and Procedure: Civil § 1510 (1971).

In this appeal the City argues that the district court abused its discretion in granting some plaintiffs leave to file a supplemental complaint against a co-plaintiff because there is absolutely no connection in law or fact between the issues framed by the original complaint and the issues framed by the supplemental complaint. The City argues that the supplemental complaint pleads a “new and distinct” case, and that the original and supplemental pleadings neither “arise out of the same transaction or occurrence” nor involve “common questions of law or fact.” Opinion at 474.

A

The majority characterizes the City’s position as advocating a transactional test for *489Rule 15(d), a test the majority rejects. Opinion at 474. In turn, however, the majority fails to come up with any meaningful test of its own. The majority reaches a result it obviously deems desirable — it affirms the district court’s exercise of discretion in permitting the supplemental complaint — but it leaves us in the dark as to the standards which govern a district court’s discretion to permit supplemental pleadings under Rule 15(d).6

The majority acknowledges, as it surely must, that “some relationship must exist between the newly alleged matters and the subject of the original action.” Opinion at 474. But the majority fails to give us any clue as to what the nature of that relationship must be. As best I can determine, the majority adopts a “concern” test: The supplemental complaint was permitted because “[t]he concern in the original action, the consent decree, and the supplemental complaint is the same — the availability of replacement housing for persons displaced by the Century Freeway.” Opinion at 474. I respectfully submit such a “concern” test is meaningless for the purpose of determining whether a sufficient nexus exists between original and supplemental pleadings to satisfy Rule 15(d). The fact that plaintiffs are motivated by the laudable goal of affordable replacement housing for freeway displacees establishes no nexus that could possibly satisfy the requirements of Rule 15(d).

The concerns of plaintiffs are not the concerns of Rule 15(d). As the majority recognizes, “Rule 15(d) is a tool of judicial economy and convenience.” Opinion at 473. However, the majority fails to make any showing that ‘permitting the supplemental complaint in this ease serves either of these goals. In order to satisfy Rule 15(d), surely there must be some artic-ulable reason to believe the two pleadings are connected; there must be some nexus. Neither the district court nor the majority has identified any such connection in this case because none exists. To put it quite simply, there is nothing to link the original and supplemental pleadings in this case.

B

The district court, at least, recognized the importance of identifying some nexus between the two pleadings, and attempted to find legal questions that are common to the original and supplemental complaints. The closest the district court came to identifying a common question of law was its vague assertion that the supplemental complaint “basically concerns an interpretation of the replenishment housing provisions of the Consent Decree.” ER at 151. The district court, however, failed to specify a single issue of interpretation of the consent decree common to the two pleadings. In fact, the district court’s assertion is not grounded in reality. As noted above, the consent decree imposes no obligations on municipalities in general nor the City of Hawthorne in particular. Indeed, to the extent that the consent decree even touches on the rights or responsibilities of Hawthorne or other municipalities, it does so in order to emphasize that the “replacement units [mandated by the decree] shall be relocated or constructed so as to be in conformity with applicable zoning, subdivision and building code laws.” ER at 30. In sum, there is no basis for the assertion that a denial of leave to file the supplemental complaint could lead to “the possibility of another court rendering an interpretation of the Consent Decree ...” ER at 151.

The majority is no more successful than the district court in identifying common issues of law. After stating that “a focal point of the original proceedings was the provision of adequate replacement housing,” and that “the district court’s published order devoted nearly five full pages to the issue of the availability of replacement housing,” Opinion at 474, the majority *490concludes that the “concern” for replacement housing is present in both claims. Conspicuously missing is any explanation of how this “concern” translates into any common legal questions the adjudication of which in the same lawsuit would be judicially economical or convenient, especially since the issues raised by the original complaint have already been resolved in the form of the consent decree.

This failure on the part of the district court and the majority is not hard to understand. To my mind, the issues of law raised by the two pleadings are totally different. The federal and state statutory and constitutional provisions relied upon in the supplemental complaint against the City of Hawthorne as the defendant bear no relationship to the legal questions arising out of the original complaint naming as defendants state and federal officials and agencies responsible for funding and building the Century Freeway.7 The laws relied upon in the supplemental complaint prohibit government from discriminating against all minorities and poor people. Whether the victims of the alleged discrimination happen to have been displaced by a freeway is irrelevant to the question whether the City, in rejecting the Kornblum project, unlawfully discriminated against minorities or low-income households. To put it differently, whether persons displaced by the Century freeway would occupy the Kornb-lum project if built is simply extraneous to the claims made against the City in the supplemental complaint. Those claims rest upon laws which prohibit cities from discriminating invidiously in their housing policies no matter where the prospective tenants or owners come from. What is relevant to the discrimination claims in the supplemental complaint is whether the Kornblum units would be occupied by minority or low-income persons, regardless of where these persons had previously lived.

Another way to look at it is to examine the classes of persons who are protected by the laws relied upon in the two pleadings. The class of persons protected by the laws relied upon in the supplemental complaint —i.e., persons of low-income or minority status — is distinct from the class of persons who are protected by the laws relied upon in the original complaint — i.e, persons displaced by the Century Freeway. The fact that there is some overlap between the classes does not in itself create common legal questions. Suppose, for example, freeway displacees as a class sued, on a third-party beneficiary theory, an independent contractor hired by the HCD, claiming that the contractor had defectively built housing units which were to be occupied by displacees. Surely, such a claim would raise “concerns” about the adequacy of replacement housing mandated by the consent decree. Under the standardless approach taken by the majority, a supplemental complaint based on such a contractual theory could not be distinguished on any principled basis from the supplemental complaint at issue in this appeal.

C

Just as the district court and the majority have failed to identify a single issue of law common to the original and supplemental complaints, each has failed to identify a single issue of fact common to the two pleadings. The district court noted generally, without specific example, that “[s]ome allegations asserted in the supplemental complaint are similar to those raised in the underlying action, for example, violations of state and federal anti-discrimination statutes.” ER at 151-52. As discussed above, however, the statutory provisions relied upon in the original complaint are different and speak to entirely different problems, and protect an entirely different class of persons, than the statutes relied upon in the supplemental complaint. It is *491also telling that the majority makes no attempt to identify a single issue of fact which is common to the two pleadings.

This failure by the district court and the majority to identify common questions of fact is also unsurprising. The operative facts in the supplemental complaint bear no relationship to the operative facts in the original complaint. Indeed, the claims raised by the supplemental complaint could be adjudicated without a single reference to the consent decree which settled the claims raised in the original complaint. In sum, just as there are no common questions of law, there are no common questions of fact linking the two pleadings.

D

The case law provides no support for the majority’s standardless application of Rule 15(d). In Griffin v. County School Board, 377 U.S. 218, 84 S.Ct. 1226, 12 L.Ed.2d 256 (1964), a supplemental complaint was filed in response to an attempt by the legislature of Virginia to cut off funds for public schools after the district court ordered a local school board to desegregate the public schools. The Supreme Court upheld a supplemental complaint against the legislature because the supplemental complaint did not plead “a new cause of action, but [was] merely part of the same old cause of action arising out of the continued desire of colored students in Prince Edward County to have the same opportunity for state-supported education afforded to white people.” Griffin, 377 U.S. at 226, 84 S.Ct. at 1231. Thus, the injury to the minority schoolchildren resulted from the breach of a duty to provide public education on a desegregated basis — a duty that was shared by state and local officials. Here, the duty of state and federal officials and agencies to provide replacement housing for freeway displacees is not shared by the City of Hawthorne. Moreover, the protected class in Griffin remained the same; here, as noted above, the classes protected by the statutes relied upon in the two pleadings are different. For these reasons, Griffin provides no support for the majority’s position.

The majority’s reliance on United States ex rel. Atkins v. Reiten, 313 F.2d 673 (9th Cir.1963), is similarly misplaced. In Reiten, a materialman brought suit on a payment bond pursuant to the Miller Act, 40 U.S.C. § 270a(a)(2), to receive payment for material furnished to a government contractor. The district court dismissed the initial complaint, which was filed less than 90 days after the last material had been furnished to the contractor, because the Miller Act provides a cause of action for payment only after 90 days have passed. Our court upheld the district court’s exercise of discretion in permitting a supplemental complaint filed by the materialman after 90 days had passed. In Reiten, the underlying factual and legal issues framed by the initial and supplemental complaints were identical. The plaintiff materialman had only one right — that conferred to him by the Miller Act — to recover on the payment bond. The elements of the plaintiff’s case did not vary under the original and supplemental pleadings: first, he had to prove he had entered into a contract with the government contractor; second, he had to prove that he had furnished the materials; third, he had to show he had not been paid in full; finally, he had to prove that 90 days had passed since he delivered the materials. The original complaint was dismissed only because the materialman had failed to satisfy the 90-day requirement. It is unremarkable, then, that our court allowed him to update his lawsuit by pleading intervening facts — that 90 days had passed — under Rule 15.8

By contrast, the issues framed by the supplemental pleading involved in this appeal are distinct from, and involve different legal and factual questions than, the issues framed by the original complaint. Because *492plaintiffs here are not merely updating a lawsuit to vindicate a single right, but rather are trying to use Rule 15(d) as a vehicle for expanding the original case into a new action against a co-plaintiff on totally unrelated claims, the cases relied upon by the majority fail to support its construction of Rule 15.9

E

The majority’s reading of Rule 15(d) also creates tension between Rule 15(d) and other Federal Rules of Civil Procedure. Rule 13(g), for example, deals explicitly with cross-claims by one plaintiff against another. Rule 13(g), however, like Rule 13(a) governing compulsory counterclaims, requires that the cross-claim arise out of the same “transaction or occurrence” as the original claim, a standard the majority expressly rejects when construing Rule 15(d). Opinion at 474. It strikes me as anomalous to allow a plaintiff to circumvent the “transaction or occurrence” requirement of Rule 13(g) by recharacterizing a cross-claim against a co-plaintiff as a supplemental complaint under Rule 15(d). And yet this is precisely what the majority does in this case.10

CONCLUSION

I dissent in this case even though I applaud the consent decree’s worthy goal of providing affordable housing for persons who are displaced by the Century Freeway. To me, however, this appeal is not about housing; this appeal is about the limits on official power — specifically, judicial power. In pursuit of the laudable goal of housing for freeway displacees, the district court and the majority have failed to justify the supplemental complaint in this case on any principled basis. They leave me no choice but to dissent.

. Specifically, plaintiffs claimed that defendant federal and state agencies and officials had failed to comply with the procedural requirements of the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. §§ 432M347, and its California counterpart, the Environmental Quality Act of 1970 (CEQA), Cal.Pub.Res.Code §§ 21000-21151.

Plaintiffs claimed that the federal defendants violated section 102(c) of NEPA, 42 U.S.C. § 4332(2)(c), which requires federal agencies to prepare environmental impact statements for legislation and "other major Federal actions significantly affecting the quality of the human environment....”

Plaintiffs claimed that state defendants violated section 21100 of CEQA, which requires all state agencies to prepare a detailed statement analyzing the environmental impact of any "project they propose to carry out which could have a significant effect on the environment of the state.”

. Plaintiffs claimed that defendant Federal Highway Administration [FHWA] violated various provisions of the Uniform Relocation Assistance and Real Property Act of 1970, 42 U.S.C. §§ 4601-4655, which prevents the FHWA from funding construction of any highway that will cause displacement of persons living in the highway corridor unless FHWA has received from the state highway authorities "satisfactory assurances”: (1) that “fair and reasonable relocation” payments for moving expenses and for "replacement housing” will be provided to persons who must relocate; (2) that "relocation assistance programs” will be provided for such displaced persons; and (3) that “within a reasonable period of time prior to displacement there will be available” adequate replacement housing. 42 U.S.C. § 4630 (1983).

In addition to these claims, plaintiffs claimed that state defendants violated section 128(a) of the Federaí-Aid Highway Act, 23 U.S.C. § 128(a), which required them to hold public hearings to consider the economic effects of constructing a freeway at the proposed location.

. The majority recites that the Council voted to deny the applications after some local residents expressed opposition to low-income families in their neighborhoods and voiced concerns about increased crime and traffic. Opinion at 472. That some residents expressed such concerns is irrelevant to this appeal. City authorities routinely consider the impact of a proposed development project on traffic density, crime, and schools in deciding whether to approve it. What is relevant is that the district court expressly found that the City Council did not act with discriminatory intent. ER at 99.

. A Housing Element is one part of a general plan local governments are required to prepare under California law. The Housing Element "shall consist of an identification and analysis of existing and projected housing needs and a statement of goals, policies, quantified objectives, and scheduled programs for the preservation, improvement, and development of hous-ing_” Cal.Pub.Res.Code § 65583 (West 1983).

.Rule 15(d) provides:

Upon motion of a party the court may, upon reasonable notice and upon such terms as are just, permit the party to serve a supplemental pleading setting forth transactions or occurrences or events which have happened since the date of pleading sought to be supplemented. Permission may be granted even though the original pleading is defective in its statement of a claim for relief or defense. If the court deems it advisable that the adverse party plead to the supplemental pleading, it shall so order, specifying the time therefor.

If leave to file a supplemental pleading is not granted, the moving party is free to commence a new and independent action.

. The final two sentences of the majority’s discussion of the supplemental complaint issue read: “All involved — plaintiffs, defendants, and district court — were familiar with the underlying action. Thus, we hold that the district court did not abuse its discretion in permitting the supplemental complaint.” Opinion at 477 (emphasis added). I cannot believe that the majority intends to suggest that familiarity with the lawsuit should be the standard by which to limit Rule 15(d) discretion.

. The sixth claim in the supplemental pleading arguably relates at least tangentially to the Century Freeway project. Plaintiffs claimed that in failing to take account of the housing effects of the Century Freeway, defendant Hawthorne violated Cal.Gov.Code § 65883, which deals with housing plans that municipalities must promulgate. What is crucial, however, is that there are no questions of law common to section 65883 and the statutory and constitutional provisions relied upon in the original complaint.

. Nor does H.F.G. Co. v. Pioneer Publishing Co., 7 F.R.D. 654 (N.D.Ill.1947), which the majority cites, support the majority’s argument. In permitting a Rule 15(d) supplemental complaint in a derivative action to recover monies allegedly embezzled by the company president, the district court in H.F.G. explicitly focused on the common factual questions that would make it more judicially economical to try the different causes of action together. 7 F.R.D. at 656.

. The majority also cites a number of cases which stand for the general proposition that a district court is afforded a great deal of discretion in deciding whether to permit a supplemental pleading. Opinion at 474-475. To say there is discretion, however, is to say nothing about the appropriate standards for determining the limits on that discretion.

. See also Federal Rule of Civil Procedure 20(a), which in pertinent part provides: "... All persons (and any vessel, cargo or other property subject to admiralty process in rem) may be joined in one action as defendants if there is asserted against them jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all defendants will arise in the action....”