City of Joliet v. Mid-City National Bank of Chi, et al
Filing
Filed opinion of the court by Judge Easterbrook. AFFIRMED. Frank H. Easterbrook, Circuit Judge; Ann Claire Williams, Circuit Judge and Diane S. Sykes, Circuit Judge. [6759332-1] [6759332] [15-2183]
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In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 15-‐‑2183
CITY OF JOLIET, ILLINOIS,
Plaintiff-‐‑Appellee,
v.
NEW WEST, L.P., et al.,
Defendants-‐‑Appellants.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 05 C 6746 — Charles R. Norgle, Judge.
____________________
ARGUED JANUARY 11, 2016 — DECIDED JUNE 17, 2016
____________________
Before EASTERBROOK, WILLIAMS, and SYKES, Circuit Judges.
EASTERBROOK, Circuit Judge. For more than a decade, the
City of Joliet, Illinois, has been attempting to condemn the
two buildings of the Evergreen Terrace housing complex. In
2005 it filed a condemnation action in state court, and the
proceeding was removed to federal court. New West, the
complex’s owner, went on the offensive with a suit of its
own under the Fair Housing Act and other federal statutes.
We concluded in New West, L.P. v. Joliet, 491 F.3d 717 (7th
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Cir. 2007), and Joliet v. New West, L.P., 562 F.3d 830 (7th Cir.
2009), that no rule of federal law unconditionally blocks the
condemnation action, and we directed the district court to
decide it with dispatch. 491 F.3d at 721; 562 F.3d at 839.
About three and a half years after the second of these de-‐‑
cisions, the condemnation suit finally went to trial. It took
100 days of court time, spread over more than a year and a
half of calendar time. The district court then issued a lengthy
opinion holding that Joliet is entitled to possess (and demol-‐‑
ish) Evergreen Terrace. 2014 U.S. Dist. LEXIS 130800 (N.D. Ill.
Sept. 17, 2014). This decision resolved the merits but not the
amount of compensation. Illinois law (which applies under
Fed. R. Civ. P. 71.1(k)) requires a jury for the valuation deci-‐‑
sion, though not for the decision whether the government is
entitled to take the property. 735 ILCS 30/10-‐‑5-‐‑5(a). A jury
concluded that New West and its affiliates (and lenders) are
entitled to $15,077,406 as just compensation. After additional
delay caused by post-‐‑decision motions practice in the district
court, the controversy has made its way back to us.
New West (as we call all appellants collectively) contends
that Evergreen Terrace is not dilapidated and that the City’s
suit should have been rejected on that ground, and on the
further ground that razing the buildings would have a dis-‐‑
parate impact on its predominantly black tenants, in viola-‐‑
tion of the Fair Housing Act. The district judge, as trier of
fact, rejected both of these arguments. His conclusions—
including the conclusions about the nonexistence of discrim-‐‑
inatory intent or disparate impact—are findings of fact for
the purpose of appellate review. See Pullman-‐‑Standard v.
Swint, 456 U.S. 273 (1982). This means that they must stand
unless clearly erroneous. See Fed. R. Civ. P. 52(a)(6); Ander-‐‑
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son v. Bessemer City, 470 U.S. 564 (1985). We hold that none of
the critical findings is clearly erroneous.
A lengthy recitation of the facts is unnecessary. Anyone
with a craving for detail has only to read the district court’s
opinion. The appeal can be resolved in considerably fewer
words.
The judge found that Joliet is entitled to condemn the
complex for two reasons: first, it is dilapidated and crime-‐‑
ridden; second, the City plans to use the land to extend the
existing Riverwalk park along the Des Plaines River. 2014
U.S. Dist. LEXIS 130800 at *33–57. The findings are supported
by testimony, data (such as the number of crimes committed
daily at Evergreen Terrace), the fact that an extension of the
park has been planned since 1990, and a report from the De-‐‑
partment of Housing and Urban Development. New West
says that the judge should have drawn inferences more fa-‐‑
vorable to its position. Perhaps the judge could have ruled
for New West, but the record contains far too much evidence
in Joliet’s favor for a court of appeals to declare the judge’s
findings to be clearly erroneous.
This leaves the question whether condemnation would
violate the Fair Housing Act, either because Joliet set out to
discriminate against blacks (disparate treatment) or because
closure of Evergreen Terrace would have an unjustified dis-‐‑
parate impact on black residents. The district judge found
that Joliet acted for reasons unrelated to race (the ones we
mentioned above). Id. at *57–63, 65–68. Although the judge
recognized that one former member of the city council had
made racist comments several years before the City began
the condemnation suit, the judge found that other members
of the council did not share those views. Id. at *63–64. The
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judge added that it would be implausible to attribute anti-‐‑
black intent to the City, because as part of this litigation it
agreed with the Department of Housing and Urban Devel-‐‑
opment to create at least 115 new low-‐‑income housing units
and provide housing vouchers for all remaining residents at
Evergreen Terrace, so that they could secure low-‐‑income
housing at places of their choice within the City (or any-‐‑
where else in Will County).
New West contends that the judge erred in considering
the settlement with HUD, but it was admissible (it is a public
document of which the court could take judicial notice). True
enough, the settlement is a promise, and promises some-‐‑
times are broken. But breaking one’s promise to a federal
agency—a promise reiterated to a federal judge—is risky,
and the judge was entitled to conclude that Joliet is likely to
keep this promise. The judge observed that Joliet’s own re-‐‑
development plan, adopted before it started the condemna-‐‑
tion action, is “practically identical to the terms of the HUD
settlement agreement.” Id. at *61.
According to New West, the vouchers are useless be-‐‑
cause owners will not rent to persons displaced from Ever-‐‑
green Terrace. The district judge found otherwise, and once
again that finding is supported by the record. Joliet had a
population of 148,000 at the 2010 census, and a city of that
size should not have difficulty finding room for 240 or so
families with housing vouchers. The judge observed that the
population of Joliet Township is about a quarter black. Id. at
*62. Only a small fraction of the black population is affected
by the closure of Evergreen Terrace, which implies that
space elsewhere will be available.
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New West relies more heavily on its disparate-‐‑impact
theory than on its disparate-‐‑treatment theory. About 95% of
Evergreen Terrace’s residents are black, and New West con-‐‑
tends that this means that its closure must have a disparate
impact. Since §804(a) of the Fair Housing Act, 42 U.S.C.
§3604(a), forbids actions with unjustified disparate impact,
see Texas Department of Housing & Community Affairs v. Inclu-‐‑
sive Communities Project, Inc., 135 S. Ct. 2507 (2015), New
West maintains that closure necessarily violates the Act.
The district judge thought that the racial composition of
Evergreen Terrace is the wrong starting point. Instead the
judge asked whether closure of Evergreen Terrace affects a
substantial fraction of all blacks in Joliet. He answered that it
does not; about 97% of the City’s black residents live else-‐‑
where, and the closure therefore would not affect the popu-‐‑
lation as a whole adversely. 2014 U.S. Dist. LEXIS 130800 at
*66.
We agree with the district judge that the record does not
demonstrate disparate impact, but for a different reason.
New West sees a need to move as an injury in itself. (If the
current residents of Evergreen Terrace are uninjured, there is
no adverse impact.) But given the district court’s findings
about the dilapidated and crime-‐‑ridden nature of Evergreen
Terrace, it is inappropriate to treat a move to new housing as
injurious. The residents of Evergreen Terrace will be better
off in the newly constructed units, or the units available with
housing vouchers. Joliet has not required the residents to
move any distance; the new units will be built nearby, and
the vouchers can be used anywhere in Will County. Plain-‐‑
tiffs deem the need to move an injury only because they dis-‐‑
agree with the district court’s principal findings of fact—but,
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given our conclusion that those findings are supported by
the record, the disparate-‐‑impact theory evaporates.
And that’s not all. Although Inclusive Communities Project
held that unjustified disparate impact from housing policies
violates §804(a), it stressed the importance of considering
both whether a policy exists and whether it is justified. 135 S.
Ct. at 2522–24. The Court observed that “a one-‐‑time decision
may not be a policy at all” (id. at 2523). Disparate-‐‑impact
analysis looks at the effects of policies, not one-‐‑off decisions,
which are analyzed for disparate treatment. The Justices
added that “governmental entities … must not be prevented
from achieving legitimate objectives, such as ensuring com-‐‑
pliance with health and safety codes.” Id. at 2524. The district
court’s findings show that the condemnation of Evergreen
Terrace is a specific decision, not part of a policy to close mi-‐‑
nority housing in Joliet. The judge also found that Joliet set
out to achieve goals that the Supreme Court approves, and
the analysis of Inclusive Communities Project therefore favors
the City rather than New West.
New West insists that the district court’s findings, no
matter how well supported by the record, must be thrown
out because made by a judge. New West does not contend
that a property owner has a constitutional right to jury trial
in a condemnation suit. Its theory, rather, is that by proceed-‐‑
ing first with the condemnation action and deferring New
West’s own suit seeking damages under the Fair Housing
Act, the district court violated the Seventh Amendment by
making findings that will be preclusive in New West’s suit
for damages. See Dairy Queen, Inc. v. Wood, 369 U.S. 469
(1962); Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959).
The district court issued an opinion rejecting that contention,
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see 2012 U.S. Dist. LEXIS 12756 (N.D. Ill. Jan. 31, 2012), and
New West wants us to resolve that subject.
That request is premature. This appeal concerns Joliet’s
condemnation suit, not New West’s suit under the Fair
Housing Act. There is no right to a jury trial of the takings
issue (as opposed to the compensation issue) in a condemna-‐‑
tion action under Illinois law, which controls, so the decision
to hold a bench trial did not violate any of New West’s rights
in this proceeding. New West predicts that the judge will dis-‐‑
miss its statutory suit as barred by principles of issue preclu-‐‑
sion given the findings made in the condemnation action. If
the judge does that, the Seventh Amendment argument then
will be ripe.
The fact that the condemnation action and the statutory
action are distinct is why this court denied New West’s peti-‐‑
tion for a writ of mandamus seeking an order that would
compel the district court to use a jury in the condemnation
suit. The order denying the petition has no bearing on the
merits of the Seventh Amendment question.*
* Here is the text of that order, issued on March 27, 2012, and previ-‐‑
ously unpublished. We set it out to facilitate understanding of our cur-‐‑
rent ruling:
The petitions for a writ of mandamus are DENIED. This court di-‐‑
rected the district judge to resolve the condemnation action first. That is
at last being done, though long after we contemplated it would happen.
Our opinion three years ago observed that resolution of the condemna-‐‑
tion proceeding was already overdue, and we told the court to bring it to
a “speedy” resolution. Joliet v. New West, L.P., 562 F.3d 830, 839 (7th Cir.
2009). Trial of the condemnation action in December 2012 is not speedy
by any means, but it is preferable to the approach proposed in the peti-‐‑
tion for mandamus, which would postpone the condemnation action
indefinitely.
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We asked at oral argument why the district court did not
empanel a jury and try the two suits together, with the con-‐‑
demnation issues resolved by the court and the Fair Housing
Act issues by a jury. The jury also could have served an ad-‐‑
visory role in the condemnation action. See Fed. R. Civ. P.
39(c). The answer is that no one suggested this to the district
court, and the judge did not propose it on his own. It would
have been fruitless to expect a jury to follow 100 days of trial
spread over 18 months—but maybe the presence of a jury
would have induced the judge to rein in counsel’s presenta-‐‑
tions and make the trial manageable. One of the issues the
judge will have to consider in the Fair Housing Act case is
whether New West surrendered its right to a jury by not
proposing a joint trial, or at least an advisory jury in the
condemnation action. Cf. Fed. R. Civ. P. 38(d). We do not
express any view on that subject. We do hope, however, that
what we have said in this opinion will lead the parties to
think carefully about whether a trial of the Fair Housing Act
suit is necessary.
If, as [New West] contend[s], the Seventh Amendment prevents us-‐‑
ing resolution of issues in the condemnation proceeding as a basis of
preclusion (res judicata or collateral estoppel), then there may need to be
a second round of litigation. The district court thought not, observing
that the condemnation proceeding and the civil-‐‑rights actions are sepa-‐‑
rate suits, and that the principle of Beacon Theatres, Inc. v. Westover, 359
U.S. 500 (1959), deals with the sequence of decision in a single action. If
the judge is right, then there will be no problem with using the findings
preclusively later; if the judge is wrong, then the findings cannot be used
preclusively. Either way, there is no reason to delay the condemnation
trial further.
The federal judiciary should be able to resolve a condemnation pro-‐‑
ceeding in less than seven years. We urge the district court to expedite
the trial that has been scheduled for next December.
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New West’s other arguments do not require discussion.
AFFIRMED
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