COBB et al. v. CITY OF MALDEN et al., 202 F.2d 701

HARTIGAN, Circuit Judge. This is an appeal from a judgment of the United States District Court for the District of Massachusetts, entered on April 29, 1952, dismissing a class action which complained that plaintiffs, public school teachers in the City of Malden, Massachusetts, had been subjected to deprivation of their ■constitutional rights by the conspiratorial ■action of defendants. 105 F.Supp. 109. The defendants are the city of Malden, its mayor, and certain members of its Board ■of Aldermen and Common Council.

The complaint alleges that the teachers have contracts calling for the payment of specific salaries for the year 1951 and that the defendants, acting under color of law, prevented the appropriation of municipal funds sufficient to pay such salaries in full. The law under which defendants acted was an amendment to the city charter which provided in part that the final passage of any measure by the school committee could be nullified by the majority of registered voters voting at an election held pursuant to a referendum petition brought by at least twelve per cent of the total registered voters of the city. Mass.

Acts of 1950, c. 29, § 1, amending Mass. Acts of 1881, c. 169, § 24. At a special election on May 8, 1951, a majority voted not to approve a requested appropriation of the school committee. The complaint further alleges that defendants’ conduct in effecting this rejection deprived plaintiffs of rights accruing to them under the Constitution of the United States, namely, immunity from (1) impairment of contract, (2) deprivation of property without due process of law, and (3) denial- of the equal protection of the laws.

The prayers of the complaint are for .a declaratory decree, assessment of damages and injunctive relief. The court below dismissed for failure to state a claim for relief on the ground that no contract had been alleged upon which to base a complaint. Plaintiffs allege federal jurisdiction under Title 28 U.S.C. §§ 1343 and 2201. Since § 2201 merely creates a new remedy for cases otherwise within the jurisdiction of the Federal Courts, Aetna Life Ins. Co. v. Haworth, 1937, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617, Skelly Oil Co. v.

Phillips Petroleum Co., 1950, 339 U.S. 667, 70 S.Ct. 876, 94 L.Ed. 1194, the essential jurisdictional ground is § 1343. By this section, the district courts are given original jurisdiction of any civil action authorized by law, to redress deprivations of civil rights under color of state authority. Such- deprivations have been made actionable by the Civil Rights Act, R.S. §§ 1979, 1980, 8 U.S. C.A. §§ 43, 47(3). At the outset, it should be noted that plaintiffs’ claim for damages rests upon two distinct federal civil actions.

One action is for subjecting or causing to subject the plaintiffs to deprivation of constitutional or legal rights, R.S. § 1979, 8 U.S.C.A. § 43, see Bomar v. Keyes, 2 Cir., 1947, 162 F.2d 136. The other action is for any act in furtherance of a conspiracy, R.S. § 1980, 8 U.S.C.A. § 47(3), “ * * * to alter, impair or deny equality of rights under the law, * * Collins v. Hardyman, 1951, 341 U.S. 651, 662, 71 S.Ct. 937, 942, 95 L.Ed. 1253. The complaint alleges that the application of a referendum provision, Mass. Acts of 1950, c. 29, § 1, amending Mass.

Acts of 1881, c. 169, impaired contracts between the Malden public school teachers and the City of Malden and that defendants mayor, aldermen, and councilmen, conspired to effect this application. The issue on this appeal is whether or not dismissal was warranted on any one of three grounds: (1) that there is no jurisdiction; (2) that the complaint fails to state a claim upon which relief can be granted, and (3) that there is a fatal non-joinder of indispensable parties. Since this is a federal cause of action, the first and second grounds for dismissal present similar questions.

We shall first consider this complaint as against defendant City of Malden. There appears to be no basis for a claim for damages against said defendant. The plaintiffs assume the City’s responsibility for the conspiracy and consequent deprivation of constitutional rights effected by the municipal officials. In Picking v. Pennsylvania R.

Co., 3 Cir., 1945, 151 F.2d 240, 249, the court said: “ * * * As we read R.S. § 1979 in the light of the Screws decision we are compelled to the conclusion that Congress gave a right of action sounding in tort to every individual whose federal rights were trespassed upon by any officer acting under pretense of state law. A field was created upon which a state officer could not tread without being guilty of trespass and liable in damages. The concept is clear enough but the boundaries of the forbidden territory are ill-defined. * * *»

Appellants have not even attempted to argue that the City of Malden is liable for the alleged tortious acts of its public officers in the conduct of its schools. The law in Massachusetts is contrary, see Hill v. City of Boston, 1887, 122 Mass. 344; Bolster v. City of Lawrence, 1917, 225 Mass. 387, 114 N.E. 722; McGovern v. City of Boston, 1918, 229 Mass. 394, 118 N.E. 667 and we are not aware of any cases arising under the Civil Rights Act which have so held.

Federal jurisdiction has been upheld in an action against a city and some of its officials, seeking an injunction and damages, but this point on the city’s responsibility was not adverted to. Burt v. City of New York, 2 Cir., 1946, 156 F.2d 791. Since the complaint which is before us sets forth a statutory cause of action created by Congress, the limits of liability must be governed by federal law. In the absence of any clear authority on this point, we are of the opinion that the Massachusetts law in this regard properly defines the limits of liability which Congress intended.

We are not warranted in reading into the language and purpose of the Civil Rights Act the right of action alleged against the municipality in this case. Charlton v. City of Hialeah, 5 Cir., 1951, 188 F.2d 421; Hewitt v. City of Jacksonville, 5 Cir., 1951, 188 F.2d 423. At least with regard to the operation of its school system, we think that a municipality is not liable for the conduct of its officials who flout the Constitution. Even if the City of Malden were held liable for the wrongs of its officials, a federal court should deny injunctive relief in the proper exercise of its discretion. See Stainbadk v.

Mo Hock Ke Lok Po, 1949, 336 U.S. 368, 69 S.Ct. 606, 93 L.Ed. 741; Burford v. Sun Oil Co., 1943, 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424. In this respect, the federal cause of action against the city is reduced to a consideration of' whether or not this case presents a situation calling for the equitable relief which, rests in the sound discretion of the court.. With regard to the propriety of a federal decree against a municipality, it must first be observed that we are dealing with a most important phase of municipal conduct or state action.

The Commonwealth of Massachusetts has enacted several statutory provisions designed to insure the integrity of its public school system. Mass.Gen.Laws, c. 71. Also, concern for the financial stability of its cities and towns has prompted some regulation of municipal budgets and appropriations. Mass.Gen.Laws, c. 44, §§ 32, 33. In recognition and effectuation of these statutes, the Supreme Judicial Court of Massachusetts has held that the statutory remedy for failure to appropriate sufficient funds to support the public schools is exclusive. Mass.Gen.Laws, c. 71, § 34. Callahan v.

City of Woburn, 1940, 306 Mass. 265, 28 N.E.2d 9; O’Brien v. City of Pittsfield, 1944, 316 Mass. 283, 55 N.E.2d 440. This remedy provides for action against the recalcitrant municipality, upon petition initiated by ten or more taxable inhabitants of the city or town or by certain officials. The result is that although Massachusetts law recognizes that public school teachers have binding contracts, Donlan v. City of Boston, 1916, 223 Mass. 285, 111 N.E. 718; Decatur v.

Auditor of City of Peabody, 1925, 251 Mass. 82, 146 N.E. 360, the sole method of enforcement of these contract obligations in cases like the present is by statutory action. Callahan v. City of Woburn, supra. The federal courts have 'been reluctant to exercise concurrent jurisdiction in the enforcement of rights arising under state laws, in cases involving application of uncertain state law, Railroad Comm’n of Texas v. Pullman Co., 1941, 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 and complex state policy, Railroad Commission of Texas v. Rowan & Nichols Oil Co., 1940, 310 U.S. 573, 60 S.Ct. 1021, 84 L.Ed. 1368.

In Meredith v.

City of Winter Haven, 1943, 320 U.S. 228, 236, 64 S.Ct. 7, 12, 88 L.Ed. 9, the Supreme Court has explained the many instances in which equitable relief has been denied where it said: “ * * * In thus declining to exercise their jurisdiction to enforce rights arising under state laws, federal courts are following the same principles which traditionally have moved them, because of like considerations of policy, to refuse to give an extraordinary remedy for the protection of federal rights. * * * ” In the instant case, we are confronted with a situation where the enforcement of the federal cause of action against defendant City of Malden clearly contravenes the state policy reflected in the provision of an exclusive remedy for deficiency in appropriations for the public schools.

Such enforcement seems neither necessary nor proper in this case. Although a state remedy cannot operate to deprive a federal court of jurisdiction, see Thompson v. Gibbes, D.C., 1945, 60 F.Supp. 872, it may persuade a federal court to decline to exercise jurisdiction. A federal court of equity “may in the. public interest, even withhold relief altogether, and it would seem that it is bound to stay its hand in the public interest when it reasonably appears that private right will not suffer.” Securities & Exchange Comm’n v. U. S.

Realty & Improvement Co., 1940, 310 U.S. 434, 455, 60 S.Ct. 1044, 1053, 84 L.Ed. 1293. Furthermore, it may, in its discretion, refuse “to give a remedy which would work a public injury or embarrassment”. United States ex rel. Greathouse v. Dern, 1933, 289 U.S. 352, 360, 53 S.Ct. 614, 617, 77 L.Ed. 1250. Since plaintiffs have apparently not even attempted to utilize the available state remedy, and since their injuries may be adequately compensated by recovery in their action against the other named defendants, it is proper for a court to decline to exercise its jurisdiction.

At any rate, since the city could not be held liable for the alleged wrongs committed by its officials in this case, the dismissal by the lower court was proper as to defendant City of Malden. The equitable considerations mentioned above pertain with equal force to defendants mayor, aldermen and councilmen.' Equitable relief should be denied because any federal coercion with regard to the deficient municipal appropriations for the public schools would be an unwarranted interference with state policy.

However, with regard to legal remedy, plaintiffs’ claim for damages against these individual defendants, resting upon tort theory, under a wrong created by federal law, is an entirely different matter. It is alleged that these defendants, in furtherance of a conspiracy, deprived plaintiffs of their constitutional rights by employing state law to abrogate plaintiffs’ contract obligations. This is a federal wrong and presents a case within federal jurisdiction under 28 U.S.C. § 1343.

Whether or not plaintiffs have alleged a cause of action, which was the ground for dismissal in the court below, depends on a determination that the complaint does or does not state valid and subsisting contract obligations which were impaired by state law. It seems clear that the constitutionality of the application of the referendum provision, Mass. Acts of 1950, c. 29, § 1, amending Mass. Acts of 1881, c. 169, is drawn into question if such application operated to deprive plaintiffs of compensation to which they were entitled under their contract of employment with the city.

The complaint alleges that the public school teachers of Malden were entitled to annual increases in pay under salary schedules contracted in 1947. The referendum provision, supra, which was enacted in 1950, and applied in 1951, allegedly nullified the annual increases previously agreed upon. In defining the terms of a contract existing between public school teachers and a municipality, the Supreme Judicial Court of Massachusetts in Callahan v.

City of Wo-burn, 1940, 306 Mass. 265, 270, 28 N.E.2d 9, 13, said: “ * * * The rules and regulations of the school committee provide for minimum and maximum salaries for teachers with annual increases, and it could have been found that all teachers were familiar with the rules in this respect. “ * * * In the circumstances, we think that it follows from the employment of the teachers who were serving at discretion, from the compensation paid them in previous years, and from the step-up increases for which the rules of the committee provide that they were all under contract. * * * ” Thus, if in this case, the salary schedules of 1947 provided for annual increases, it would seem that those increases were valid and subsisting obligations which could not constitutionally be impaired by state law.

This is the substance of the allegations in the complaint, and the plaintiffs were entitled to a hearing on the merits of such allegations in order to determine whether or not there exists a cause of action against the defendants for subjecting plaintiffs to deprivation of rights secured to them by the Constitution. The federal policy of refraining from any unnecessary decision on a question of constitutional law, see Railroad Comm’n of Texas v. Pullman Co., supra, and Spector Motor Service, Inc. v.

McLaughlin, 1944, 323 U.S. 101, 65 S.Ct. 152, 89 L.Ed. 101, is inapplicable to this action for a wrong created by federal law. As the Supreme Court said in another connection, in Propper v. Clark, 1949, 337 U.S. 472, 492, 69 S.Ct. 1333, 1344, 93 L.Ed. 1480: “The submission of special issues is a useful device in judicial administration in such circumstances as existed in the Magnolia, Spector, Fieldcrest and Pullman cases, supra, but in the absence of special circumstances, [Meredith v.

City of Winter Haven] 320 U.S. at pages 236, 237, 64 S.Ct. [7] at pages 11, 12, 88 L.Ed. 9, it is not to be used to impede the normal course of action where federal courts have been granted jurisdiction of the controversy.” Therefore, we are of the opinion that plaintiffs did state a cause of action within the jurisdiction of the federal courts as to the mayor, aldermen, and councilmen of the City of Malden. We have considered the defendants’ objection that the complaint failed to join indispensable parties and we can find no merit in this contention on the record presented in this appeal.

Judgment affirmed as to defendant City of Malden, and reversed as to other defendants, and case remanded.