Devines v. Maier

665 F.2d 138
Court of Appeals for the Seventh Circuit·Decided November 23, 1981·No. No. 80-2315·Published·Cited by 18 cases

Opinions

JOHN W. PECK, Senior Circuit Judge.

Plaintiffs in this class action are residents of Milwaukee who were required by the City to vacate their rented homes as a result of the City’s enforcement of its housing code. Plaintiffs contend that they are entitled to compensation for their displace- ■ ments from their residences pursuant to the just compensation clause of the Fifth Amendment to the United States Constitution; Wisconsin’s eminent domain statute, Wis.Stats. § 32.19; and the Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA), 42 U.S.C. § 4601 et seq.1 Defendants are the City of Milwaukee and various of its public officials.

The material facts relative to defendants’ alleged liability are not disputed. Under 42 U.S.C. § 5305(a)(3), Milwaukee received federal funding for an Intensive Code Enforcement Program (ICEP), designed to improve housing code enforcement in certain deteriorating neighborhoods in order to arrest the decline of those neighborhoods. Additionally, Milwaukee received federal funds under 42 U.S.C. § 5305(a)(ll) for a Code Enforcement Relocation Program (CERP), designed to provide relocation payments and assistance to persons displaced by activities funded under 42 U.S.C. § 5301, et seq., the Housing and Community Development Act [141] of 1974. Due to certain restrictive eligibility requirements imposed by Milwaukee on CERP benefits, not all tenants displaced as a result of ICEP activities were entitled to CERP assistance. Plaintiffs are that class of tenants who were displaced by housing code enforcement activities, but who were denied relocation benefits.

According to Milwaukee’s CERP Policy Statement, only those tenants who were required to vacate their residences because the City had ordered the buildings in which they lived razed and removed, pursuant to Wisconsin law, were eligible for relocation benefits. District court opinion, 494 F.Supp. 992, 994 (E.D.Wis.1980). However, under the City’s housing code enforcement program, tenants were not ordered to vacate their homes only when their buildings were subject to a raze and remove order. Rather, the vast majority of the orders to vacate were the result of the city’s determination that various dwellings were unfit for human habitation, but not so dilapidated as to require razing. Accordingly, the City denied relocation benefits to tenants displaced from these buildings. Defendants refer to the code violations leading only to vacation orders but not to raze and remove orders as “temporary” violations. However, as the district court noted, the practical effects on the tenants are the same whether they are displaced because of “temporary” code violations or because of violations so severe as to result in raze and removal orders. Id. In either case, the displaced tenants were required to find alternative housing and to undertake the burden of moving from their homes as a result of the City’s action.

As the district court noted, it is important to state at this point that the plaintiffs have not challenged Milwaukee’s CERP eligibility requirements on equal protection grounds. Rather, they assert substantive rights to compensation derived from the just compensation clause of the Fifth Amendment to the United States Constitution and rights to compensation based on federal and state laws. These claims will be dealt with separately.

THE JUST COMPENSATION CLAUSE

The Fifth Amendment, made applicable to the States by the Fourteenth Amendment, provides, “[N]or shall private property be taken for public use, without just compensation.” Plaintiffs contend that their leasehold interests were private property that was taken by the City of Milwaukee for a public purpose when the City acted to enforce its housing code by evicting plaintiffs from their homes.

As the district court stated, leasehold interests are property interests pro-' tected by the Fifth Amendment. See e. g., Alamo Land & Cattle Co., Inc. v. Arizona, 424 U.S. 295, 303, 96 S.Ct. 910, 916, 47 L.Ed.2d 1 (1976); United States v. Petty Motor Co., 327 U.S. 818, 66 S.Ct. 813, 90 L.Ed. 1040 (1946). Furthermore, as the district court also noted, the fact that the city did not acquire the tenants’ leaseholds, but rather exercised a police power to regulate the tenants’ enjoyment of their leaseholds, is not dispositive. It is well established that a Fifth Amendment “taking” can occur through the exercise of the police power to regulate property rights. E. g., Pruneyard Shopping Center v. Robins, 447 U.S. 74, 100 S.Ct. 2035, 64 L.Ed.2d 741 (1980); Kaiser Aetna v. United States, 444 U.S. 164, 174, 100 S.Ct. 383, 390, 62 L.Ed.2d 332 (1979); Andrus v. Allard, 444 U.S. 51, 65, 100 S.Ct. 318, 326, 62 L.Ed.2d 210 (1979). In order for a regulatory taking that requires just compensation to occur, the exercise of a police power must both benefit the public and result in the destruction of the use and enjoyment of a legitimate private property right. Kaiser Aetna, supra, at 178-80, 100 S.Ct. at 392-93. United States v. Dickinson, 331 U.S. 745, 750-51, 67 S.Ct. 1382, 1385-86, 91 L.Ed. 1789 (1947). To a great extent, whether or not a regulation of private property rights for a public purpose constitutes a taking depends on the extent of interference with the private right. When the “regulation goes too far, it will be recognized as a taking.” Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 416, 43 S.Ct. 158, 160, 67 L.Ed. 322 (1922). See [142] also, Kaiser Aetna, supra; Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978).

To the inquiry whether the City’s enforcement of its housing regulations interfered with plaintiffs’ legitimate property interests, the extent of any such interference, and whether the regulations advanced a public purpose, the district court added the question whether the regulation was intended to effectuate takings of private property. Deciding that,

Housing code enforcement is a valid and important exercise of the municipal police power ... not designed to appropriate property for public use at private expense [citation omitted], but rather .. . designed to prevent the injury and disease which are so often the by-products of substandard housing,

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Devines v. Maier
665 F.2d 138 (Seventh Circuit, 1981)