The opinion of the court was delivered by: GASCH
The United Black Fund, Inc., plaintiff in this action, is seeking from this Court injunctive and declaratory relief concerning charitable solicitation privileges within federal installations. The defendants, Robert E. Hampton, Chairman of the United States Civil Service Commission (the Chairman), United Givers Fund (UGF), and United Way of America, Inc. (United Way), have filed motions to dismiss the complaint or in the alternative for summary judgment. Plaintiff has filed an opposition to these motions. The Court has, by Order of October 11, 1972, denied plaintiff's motion for a preliminary injunction, and the defendants' motions to dismiss or in the alternative for summary judgment are now on for consideration.
The facts of this case as set forth in the parties' 9(h) statements, in the complaint, in the points and authorities filed in support of defendants' motions, in the plaintiff's opposition thereto, and in the various supporting affidavits are undisputed. These facts are as follows:
Plaintiff, a nonprofit charitable corporation organized to raise funds for local voluntary health and welfare agencies serving the needs of the black inner-city population of Washington, D.C., applied on January 28, 1971, to the Chairman for solicitation privileges in the Combined Federal Campaign, an annual fund drive carried on at federal installations in which a number of different charitable groups participate. The Chairman denied the request by a letter dated March 31, 1971. He explained that the Greater Washington Area was a "federated community," meaning that a community chest or united fund belonging to United Way was participating in the Campaign here as an umbrella group for any local agencies wishing to receive funds from the drive. He referred plaintiff to Section 3.551 of the Manual on Fund Raising Within the Federal Service (Fund-Raising Manual), for this regulation concerning participation by federations of local voluntary agencies. The Chairman advised plaintiff that it might be able to secure Campaign funding for its member agencies by applying on their behalf to UGF, the Washington area united fund, and the Health and Welfare Council (HWC).
Plaintiff's President, Calvin Rolark, replied by letter of April 22, 1971, to the Chairman, alleging that the cited regulation was discriminatory because United Way had been "under attack" in several cities other than Washington for discriminatory disbursement policies and that UGF had recently released a Task Force report of its own which "highlighted" past failures of UGF in meeting "certain critical community needs." Mr. Rolark emphasized that plaintiff sought to solicit alongside UGF rather than to supplant it. Finally, he asked for a "hearing with you on this request for reconsideration."
The Chairman replied on May 10, 1971, saying that he believed Mr. Rolark's letter contained no new evidence warranting a change in his original decision but offering to meet with Mr. Rolark to discuss the matter. The meeting took place on June 10, 1971, attended by Mr. Rolark and his counsel and by Chairman Hampton and his assistant, Irving Kator. According to the parties' Statements of Fact as to Which There is No Genuine Issue and the various supporting affidavits, the meeting focused on charges that the "federated communities" regulation was discriminatory and that UGF, HWC, and the American Red Cross were guilty of discriminatory practices. No claim is made by any party that documentation of the charges was furnished by plaintiff's representatives.
On August 3, 1971, Chairman Hampton reported by letter to Mr. Rolark that he had investigated the charges made at the meeting and that his investigation revealed no grounds for granting plaintiff the solicitation privileges sought. He supplied specific figures on the racial composition of important policy-making bodies within HWC and UGF, and of the Citizens Goal and Allocations Committee; the latter is a body made up of representatives from UGF, HWC, and the American Red Cross, responsible for recommending amounts to be distributed to the three participating organizations. The Chairman also reported on the percentage of funds allocated by the HWC which went for services to black persons, and he detailed HWC regulations requiring member agencies to see that their governing boards reflect the racial makeup of the surrounding communities.
It should be emphasized at the outset that the essential objective which plaintiff seeks through declaratory and injunctive relief is not simply to gain solicitation privileges in the Combined Federal Campaign for the benefit of its member agencies. If this were the objective sought, the complaint would properly be dismissed on the ground of failure to exhaust administrative remedies; for as the record shows, plaintiff has at no time applied for solicitation privileges in the 1973 Campaign, either as part of UGF, or as an independent federation of charities. There is also nothing in the record to show that, upon timely application to the HWC, plaintiff would not be permitted to operate as a federated group of charities within UGF.
Plaintiff seeks coequal status with UGF in the 1973 Combined Federal Campaign, which began October 12, 1972. It is clear from Chairman Hampton's letters to plaintiff of March 31, 1971, and August 3, 1971, and from his position in this action that an application to the Chairman for participation in the 1973 Campaign on the indicated terms would be denied as being inconsistent with the "federated communities" rule, set forth in Section 3.551 of the Fund-Raising Manual. Plaintiff cannot, then, secure the relief it seeks through administrative channels; and it is well settled that an action should not be dismissed for failure to exhaust administrative remedies when an attempt to gain the desired relief from the agency in question would obviously be a futile act. Lodge 1858, American Federation of Government Employees v. Paine, 141 U.S.App.D.C. 152, 436 F.2d 882, 896 (1970); Ogletree v. McNamara, 449 F.2d 93, 99 (6th Cir. 1971). Hence, plaintiff's allegation that the regulations as published by the Chairman in the Fund-Raising Manual and as applied by him are an abuse of his discretion is not barred from the Court's consideration by the exhaustion doctrine.
It is equally clear that plaintiff's claim that it was deprived of due process when Chairman Hampton refused to grant a full-scale adjudicative hearing on its application for reconsideration of the original denial of solicitation privileges is not barred by the exhaustion doctrine. Neither is this issue moot. Although the denial concerned the plaintiff's application for participation in the 1972 Campaign, the question of the right of an applicant for solicitation privileges in the Combined Federal Campaign to an adjudicative hearing on its application would seem to fall within the "continuing controversy" exception to the mootness doctrine. City of Lafayette v. FEC, 147 U.S. App. D.C. 98, 454 F.2d 941 (D.C.Cir. 1971); Friend v. United States, 128 U.S.App.D.C. 323, 388 F.2d 579, 581 (D.C. Cir. 1967). Moreover, the substantive soundness of the decision which Chairman Hampton reported in his letter of August 3, 1971, is still very much alive, since it necessarily affects the rights of the litigants in the instant case.
The only claim which is beyond the jurisdiction of this Court to determine is the allegation that UGF is "at present" discriminating against black agencies. For this claim, the exhaustion doctrine would seem to apply. If plaintiff has factual evidence of discriminatory policies and practices now being carried out by UGF and United Way, it should bring them to the attention of Chairman Hampton as it sought to do in the case of allegedly discriminatory practices in 1971.
In summary, then, the Court can reach the merits of all of plaintiff's claims except the one expressly excepted above; and since violations of constitutional rights are alleged, the Court will not abstain from entertaining jurisdiction as urged in defendant Hampton's motion to dismiss. As for the government defendant's sovereign immunity ...