author: THOMAS F. HOGAN, District Judge.

text:
    PROFESSIONAL REVIEW ORGANIZATION OF FLORIDA, INC., Plaintiff, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.
    C.A. No. 84-2564.
    United States District Court, District of Columbia.
    April 10, 1985.

      Terrence O’Donnell, Williams and Connolly, Washington, D.C., for plaintiff.
    Mary Coster Williams, Asst. U.S. Atty., Washington, D.C., for defendant.
   MEMORANDUM OPINION

THOMAS F. HOGAN, District Judge.

Professional Review Organization of Florida, Inc. (“PROFI”) filed this action under the Freedom of Information Act, 5 U.S.C. § 552. The plaintiff seeks to compel disclosure of records relating to the evaluation of proposals submitted in response to a competitive procurement issued by the Department of Health & Human Services, as well as the proposal itself submitted by the Professional Foundation for Health Care, Inc. (“PFHC”). This case is presently before the Court on cross-motions for summary judgment.

Facts

The plaintiff, PROFI, was a bidder on a contract to be awarded pursuant to a competitive procurement by the Health Care Financing Administration of the Department of Health and Human Services. The contract, for which PROFI was one of three competitors, called for the operation of a physicians’ professional standards review organization for the State of Florida. Professional standards review organizations are authorized by section 1151 of the Social Security Act, as amended, 42 U.S.C. 1320c, et seq., to provide for review of the provision of medical care under the Social Security Act. On July 15,1984, the defendant awarded the contract to a bidder other than PROFI, the Professional Foundation for Health Care (“PFHC”). Pursuant to 4 C.F.R. Chapter 1, Subchapter B, Part 21, PROFI filed a bid protest on July 20, 1984 with the United States General Accounting Office. That protest is now pending before the General Accounting Office.

In this action plaintiff seeks certain records pertaining to the contract award not produced by the defendant pursuant to plaintiff’s FOIA request. On October 23, 1984, HFCA prepared indices of the withheld documents in accordance with the standards set forth in Vaughn v. Rosen, 484 F.2d 820 (D.C.Cir.1973), cert. denied, 415 U.S. 977, 94 S.Ct. 1564, 39 L.Ed.2d 873 (1974), enumerating eighteen categories of documents withheld from plaintiff pursuant to FOIA exemptions (b)(4), (5) and (6), 5 U.S.C. 552(b)(4), (b)(5) and (b)(6).

FOIA Analysis

Passed by Congress in 1966, the FOIA, 5 U.S.C. § 552 (1982), was enacted to control executive secrecy. Pursuant to section 552(a)(3) of the Act, “any person” may request access to records in the possession of a federal agency. If the agency objects to such a request, it bears the burden of proving that its withholding of the requested records falls within one of the nine enumerated exempt categories listed in § 552(b). In this case, defendant seeks to withhold eighteen categories of documents pursuant to exemptions (b)(4), (5) and (6) of the FOIA.

Exemption (b)(4)

In this action the defendant withheld specific sections of PFHC’s technical proposal under exemption (b)(4), including lists of names of physicians who have agreed to serve as peer reviewers, a description of a proposed cardiac pacemaker review, a description of the organizational structure of PFHC including a detailed discussion of the staffing and duties assigned to each office, forms designed by PFHC to accomplish data collection, and a plan for private review process with an outline of data capability and processes. In order for information to come within exemption (b)(4), the information must be (1) commercial or financial, (2) obtained from a person outside of the government, and (3) privileged or confidential. National Parks and Conservation Association v. Morton, 498 F.2d 765 (D.C.Cir.1974); Soucie v. David, 448 F.2d 1067 (D.C.Cir.1971). The information at issue here clearly was commercial information submitted by a non-government entity. Therefore, the only contested issue is whether the records are confidential.

Information is privileged or confidential if it is not the type usually released to the public and, if released to the public, would cause substantial harm to the competitive position of the person from whom the information was obtained. National Parks and Conservation Assn., supra, 498 F.2d at 770 (D.C.Cir.1974). In order to show the likelihood of substantial competitive harm it is not necessary to show actual competitive harm; actual competition and the likelihood of substantial injury is all that is necessary. Gulf and Western Industries, Inc. v. United States, 615 F.2d 527, 530 (D.C.Cir.1979). The actual competition for the contract indicates that PROFI and HFCA are competitors. Although the defendant correctly points out that the withheld records are not technical drawings or product ingredients, they related to the manner in which PFHC conducts, or proposes to conduct its business under a contract for professional services, and are matters not normally shared with competitors. Clearly, HFCA would be injured if PROFI .could learn this information. Therefore, this Court finds that the withheld documents fall within exemption (b)(4), and that judgment should be entered for the defendant on these items.

Exemption (b)(5)

In withholding records pertaining to the evaluation of the submitted bids, the agency relies on exemption (b)(5), which provides that disclosure requirements do not apply to “inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency....” 5 U.S.C. § 552(b)(5). This exemption extends to “the protections traditionally afforded certain documents pursuant to evi-dentiary privileges in the civil discovery context.” Taxation With Representation Fund v. IRS, 646 F.2d 666, 676 (D.C.Cir.1981).

The privilege which the defendant relies upon in this case is the “executive privilege” which protects advice, recommendations and opinions that form the core of the deliberative process of government. Federal Open Market Committee v. Merrill Lynch, 443 U.S. 340, 353, 99 S.Ct. 2800, 2808, 61 L.Ed.2d 587 (1979); EPA v. Mink, 410 U.S. 73, 86-87, 93 S.Ct. 827, 835-836, 35 L.Ed.2d 119 (1973); Russell v. Department of the Air Force, 682 F.2d 1045, 1047-48 (D.C.Cir.1982). The ultimate purpose of this privilege is to prevent injury to the quality of agency decisions. N.L.R.B. v. Sears, Roebuck & Co., 421 U.S. 132, 151, 95 S.Ct. 1504, 1516, 44 L.Ed.2d 29 (1975). Further, the Supreme Court has stated that documents shielded by executive privilege under exemption (b)(5) are to “remain privileged even after the decision to which they pertain may have been effected, since disclosure at any time could inhibit the free flow of advice, including analysis, reports, and expressions of opinions within the agency.” Federal Open Market Committee, supra, 443 U.S. at 361, 99 S.Ct. at 2812. The Agency bears the burden of demonstrating that the records relating to the evaluation of the proposals submitted for consideration are predecisional and deliberative. 5 U.S.C. § 552(a)(4)(B); Vaughn, supra, 523 F.2d 1136, 1144, 1146 (D.C.Cir.1975). The exemption is to be construed narrowly. Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854 at 862, 868 (D.C.Cir., 1980).

In this case the defendant has withheld the following documents under exemption (b)(5): (1) the statistical information presented to and considered by the HFCA in considering the bids; (2) the “pure facts” considered by the panel members and the evaluations made by such panel members on the basis of those facts; (3) the facts considered dispositive by the agency staff in evaluating the proposals of the bidders, as well as the agency’s use of such facts in its decision to award the contract to the defendant; and (4) the computer-generated score sheets, with the rating categories completed and containing the panel member’s scores and the rationale behind the rating for each of the quality objectives of each proposal. These documents formed the basis for the award of the contract and contain evaluations upon which the subsequent award was to be made. Therefore, they were generated “antecedent to the adoption of agency policy.” Jordan v. U.S. Dept. of Justice, 591 F.2d 753, 774 (D.C.Cir.1978). In construing exemption (b)(5), which is designed to protect the deliberative process, the Supreme Court has recognized a distinction between “materials reflecting deliberative .or policymaking processes on one hand, and purely factual, investigative matters on the other.” EPA v. Mink, 410 U.S. at 89, 93 S.Ct. at 837. Plaintiff therefore contends that even if a document is pre-deeisional, “the privilege applies only to the ‘opinion’ or ‘recommendation’ portion of the document, and not to the factual information which is contained in the document.” Coastal States Gas Corp. v. Department of Energy, 617 F.2d at 867. Facts in a pre-decisional document generally must be disclosed unless they are “inextricably intertwined” with exempt portions. Ryan v. Dept. of Justice, 617 F.2d 781, 790-91 (D.C.Cir.1980). However, this Court has recognized that where disclosure of even “purely factual material” would reveal an agency’s decision-making process exemption (b)(6) applies. Mead Data Central, Inc. v. U.S. Dept. of the Air Force, 566 F.2d 242, 256 (D.C.Cir.1977).

The plaintiff’s requests for statistical information, panel members’ point scores and evaluations, opinions and recommendations must be denied. The score sheets, opinions, impressions and recommendations rest within exemption (b)(5) in that they necessarily reveal the deliberative process even where they may contain factual information. In Arthur Andersen & Co. v. I.R.S., 679 F.2d 254, 257 (D.C.Cir.1982), the court found that opinions, advice and recommendations reflect the “give-and-take of the deliberative process.” Further, this Court finds the scores awarded by the' panel members to be numerical expressions of opinion rather than “facts.” These numerical scores are the panel members’ expression of opinion regarding the quality of the proposal. Orion Researchers, Inc. v. EPA, 615 F.2d 551 (1st Cir.1980). This Court finds, however, that plaintiff should be permitted to verify what factors members of the panel considered in their evaluation of the contract proposals. Therefore, this Court finds that the defendant should release to the plaintiff the computer-generated score sheets, deleting the panel members’ scores and recommendations, reflecting only the rating categories included on the sheet. Judgment shall be entered accordingly.

Exemption (b)(6)

Exemption (b)(6) permits the withholding of “personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.” 5 U.S.C. 552(b)(6). In order to sustain the withholding of information under this exemption a balancing of the privacy interest of the individuals and the public interest is required. Department of the Air Force v. Rose, 425 U.S. 352, 96 S.Ct. 1592, 48 L.Ed.2d 11 (1976). Exemption (b)(6) is unique in its use of balancing. Generally no inquiry “into the use of information is made available to any person.” Rural Housing Alliance v. U.S. Dept. of Agriculture, 498 F.2d 73, 77 (D.C.Cir.1974).

In Department of the Air Force v. Rose, the Court observed that Congress made a considered choice when it imposed the balancing “clearly unwarranted” test. 425 U.S. at 378 n. 16, 96 S.Ct. at 1607 n. 16. This phrase is “the major restraining feature” of (b)(6) which controls the ability of the agency to withhold information about persons. Id. Thus, the (b)(6) exemption seeks to strike a balance between the protection of an individual’s private affairs from unnecessary public scrutiny, and the preservation of the public’s right to gain access to government held information.

In Rose, the Court went on to hold that the public’s right to government information, and not the specific interest of a person seeking disclosure in the particular case, must be weighed against the individual subject’s right to privacy. Dept. of the Air Force v. Rose, 425 U.S. 352, 96 S.Ct. 1592, 48 L.Ed.2d 11 (1976). The plaintiff objects to FHCA’s withholding of fifty-nine pages of resumes of proposed professional staff members to be utilized by PFHC under the contract. This Court finds that the professional credentials and other personal information contained in this information give rise to a legitimate privacy concern which the defendant may assert under exemption (b)(6). See Department of State v. Washington Post Co., 456 U.S. 595, 599-603, 102 S.Ct. 1957, 1959-1962, 72 L.Ed.2d 358 (1982). This circuit has held that when there is a privacy interest, as this Court finds here, it should prevail against a private commercial interest such as plaintiffs bid protest. See Public Citizen Health Research Group v. Department of Labor, 591 F.2d 808, 809 (D.C.Cir.1978); Wine Hobby, Inc. v. IRS, 502 F.2d 133, 137 (3rd Cir.1974). Therefore, this Court finds that the withheld resumes properly fall within exemption (b)(6).

An order consistent with the terms of this opinion shall be issued.

      . By cover letters dated August 2, August 15, and September 11, 1984, the defendant released some records to the plaintiff.


source: Caselaw Access Project

author: PLATT, District Judge.

license: Public Domain

text:
    Bonnie BRECKER, Eugene Kamish and Joel Hochberg, on behalf of themselves and all others similarly situated, Plaintiffs, v. QUEENS B’NAI B’RITH HOUSING DEVELOPMENT FUND CO., INC.; Samuel R. Pierce, Jr., as Secretary of the United States Department of Housing and Urban Development, Defendants.
    No. 83 CV 4751.
    United States District Court, E.D. New York.
    April 10, 1985.

      New York Lawyers for the Public Interest, Inc. by Herbert Semmel, Lewis Golinker, New York City, for plaintiffs.
    Olnick, Boxer, Blumberg, Lane & Troy by Donald A. Derfner, John H. Beers, New York City, for defendant Queens B’nai B’rith Housing Development Fund Co. Inc.
    Raymond J. Dearie, U.S. Atty., E.D. N.Y., by Charles S. Kleinberg, Asst. U.S. Atty., Brooklyn, N.Y. (Howard M. Schmelt-zer, Anthony J. Ciccone, Jr., U.S. Dept, of Housing and Urban Development, Washington, D.C., on brief), for defendant HUD.
   MEMORANDUM AND ORDER

PLATT, District Judge.

The disposition of this suit turns largely on how to interpret Section 202 of the Housing Act of 1959, 12 U.S.C. § 1701q (hereinafter referred to as “Section 202” or “the Act”). In this Court’s view, the primary issue raised by plaintiffs’ suit is whether a recipient of federal funds, awarded pursuant to Section 202, is required by law or the Constitution to use those funds to benefit all four classes affected by Section 202 or whether such funds may be earmarked to benefit only one of the four classes of persons covered by Section 202 whose needs, as defined in the statute, are materially different from those of the other classes covered by Section 202.

Plaintiffs, Eugene Kamish and Joel Hochberg, claim to fall within the class of individuals covered by Section 202 as the “developmentally disabled.” Despite their conceded handicaps, plaintiffs allege that they are capable of living independently and need no special services to be provided by the particular housing facility in which they live. They further allege that any services which they might need can be obtained in the community surrounding the Queens B’nai B’rith (hereinafter referred to as “QBB”) Section 202 funded housing project into which they have been denied admission.

By reason of their particular attributes, described above, plaintiffs assert that they have a right to be considered for places in the Section 202 project sponsored by QBB. Because plaintiffs were denied places in QBB’s facility with HUD’s approval, plaintiffs argue that their exclusion violates the anti-discrimination provisions, Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, the Section 202 Housing Act itself, the Developmentally Disabled Assistance and Bill of Rights Act, 42 U.S.C. § 6000 et seq., and the Due Process and Equal Protection Clauses of the Constitution.

The federal defendant, Samuel R. Pierce, Secretary of the U.S. Department of Housing and Urban Development (hereinafter referred to as “HUD”), and defendant QBB argue that HUD funded QBB’s project to serve only the well elderly and the mobility impaired. The federal defendant HUD asserts that the terms of QBB’s funding do not permit QBB to accept as residents members from the other two classes covered by Section 202, the developmentally disabled and the chronically mentally ill. Moreover, both defendants note that QBB was selected as a sponsor of a housing project for the well elderly specifically because of QBB’s experience in working with this group; that is, persons who are 62 years of age and older who do not require special in-house services. Both defendants also note that QBB has no experience working with the developmentally disabled nor does the project offer any special services for this group.

The only specific service offered by QBB at its own expense is a full-time “social coordinator” who is supposed to facilitate the well elderly residents’ ability to rely on each other for support in their day-to-day lives in the building. Because the building has 190 units, QBB’s asserted philosophy is that there should be enough well elderly within the building to permit them to form both their own interdependent community within the building and smaller social groups. Plaintiffs argue that the provision of one social coordinator does not constitute a special service; plaintiffs otherwise ignore QBB’s asserted philosophy concerning the creation of an independent, interdependent community for the elderly.

Procedurally, this action is now before the Court on a motion for summary judgment pursuant to Federal Rule of Civil Procedure 56 by the federal defendant as joined by defendant QBB. Plaintiffs have cross-moved for summary judgment. For the reasons stated herein, the Court rules that based on the undisputed facts in this case, summary judgment lies in favor of the defendants as a matter of law. As a result of this decision, the Court does not address plaintiffs’ motion for class certification.

Statutory Scheme of Section 202

The purpose of Section 202 as stated in the statute is to assist private nonprofit corporations or public agencies “to provide housing and related facilities for elderly or handicapped families.” 12 U.S.C. § 1701q(a)(l).

Under the Act, HUD is authorized to make long-term, low-interest rate loans, 12 U.S.C. § 1701q(a)(3), to any sponsor or developer which has shown that it is otherwise “unable to secure the necessary funds from other sources upon terms and conditions equally as favorable” as the loans available under Section 202. . 12 U.S.C. § 1701q(a)(2)(A). A sponsor or developer may also apply to HUD to receive on behalf of its low income tenants, rent subsidy money for a number of units in the project pursuant to Section 8 of the U.S. Housing Act of 1937. 12 U.S.C. § 1701q(g). The facts that a sponsor may receive a loan not otherwise available in the free market and rent subsidies so that the rent received is comparable with that which could be charged in the free market are not, however, the key features of Section 202 of relevance in this action.

These key features are twofold: one relates to the definition of the four classes of individuals and their families eligible for Section 202 funded housing; the other relates to the fact that Section 202 funds are limited to the development cost of a project and do not cover the ongoing costs of providing the special services that are needed by certain Section 202 eligible groups. A Section 202 project sponsor must pay for these services or seek reimbursement from other government programs.

(a) Eligible Groups

Section 202, 12 U.S.C. § 1701q(d)(4), states that a person who is elderly, defined simply as being someone who is 62 years of age or older, is eligible to participate in a Section 202 program.

It also states that a person who is handicapped is eligible; such a person

shall be considered handicapped if such person is determined, pursuant to regulations issued by the Secretary, to have an impairment which (A) is expected to be of long-continued and indefinite duration, (B) substantially impedes his ability to live independently, and (C) is of such a nature that such ability could be improved by more suitable housing conditions.

12 U.S.C. § 1701q(d)(4) (emphasis added).

Beyond the above definition for a handicapped person, Section 202 provides nothing further. More specific definitions for two of the three groups of handicapped persons eligible for Section 202 housing, the mobility impaired and the chronically mentally ill, are found elsewhere. However, as more detailed definitions for these two groups are not of importance to this action, we will go on to the third group of handicapped persons, the developmentally disabled — which plaintiffs allege themselves to be and which is the fourth and last group eligible for Section 202 housing.

Section 202, 12 U.S.C. § 1701q(d)(4), further states that a “person shall also be considered handicapped if such person is a developmentally disabled individual as defined in § 102(5) of the Developmental Disabilities Services and Facilities Construction Act of 1950.” Id. The definition of a developmentally disabled individual, as codified at 42 U.S.C. § 6001, provides that:

(7) The term “developmental disability” means a severe, chronic disability of a person which
(A) is attributable to a mental or physical impairment or combination of mental and physical impairments;
(B) is manifested before the person attains age twenty-two;
(C) is likely to continue indefinitely;
(D) results in substantial functional limitations in three or more of the following areas of major life activity: (i) self-care, (ii) receptive and expressive language, (iii) learning, (iv) mobility, (v) self-direction, (vi) capacity for independent living, and (vii) economic self-sufficiency; and
(E) reflects the person’s need for a combination and sequence of special, interdisciplinary, or generic care, treatment, or other services which are of lifelong or extended duration and are individually planned and coordinated.

(Emphasis added.) The term facility for a developmentally disabled person is also codified at 42 U.S.C. § 6001; such a facility is defined as

a facility or a specified portion of a facility, designed primarily for the delivery of one or more services to persons with one or more developmental disabilities.

42 U.S.C. § 6001(2) (emphasis added).

(b) Costs of Special Services

Section 202 loans may not exceed the total development cost of the project, 12 U.S.C. § 1701q(a)(3), which is defined as the “costs of construction of housing and other related facilities, the cost of movables necessary to the basic operation of the project ... and of the land on which it is located, including necessary. site improvement.” Id. at § 1701q(d)(3).

This definition goes on to provide that in the case of housing for the handicapped or primarily nonelderly persons, the development cost may also include “the cost of acquiring existing housing and related facilities, the cost of rehabilitation, alteration, [and] conversion.” Id.

“Related facilities” are generally described as structures needed for providing “essential services,” such as “cafeterias or dining halls, community rooms or buildings, workshops, adult day health facilities, or other outpatient health facilities.” 12 U.S.C. § 1701q(d)(8).

Over and above the “development cost” of a Section 202 project, a sponsor must carry the expense of providing the operational or day-to-day costs of special services needed by certain Section 202 eligible groups, primarily the handicapped, to the extent that these costs are not reimbursed by private or government programs, such as medical and disability insurance, and the rent subsidies, previously noted above. 12 U.S.C. § 1701q(m) further reinforces the point that a project sponsor may not be prohibited by HUD from exercising its discretion to provide voluntarily “funds from other sources for amenities and other features ... suitable for inclusion in such project if the cost of such amenities is (1) not financed with the loan, and (2) not taken into account in determining the amount of Federal subsidy or of rent contribution of tenants.”

(c) Selection of Sponsors

Though not essential to the outcome of this case a few points regarding the selection of sponsors for Section 202 loans is worth mentioning here in order to rounds out an understanding of how this program works, as well as to address certain arguments made by plaintiffs. The following information concerning selection of program sponsors is taken from the Declaration of Robert W. Wilden, Director of the Assisted elderly and Handicapped Housing Division, U.S. Dep’t of HUD, Central office; the HUD § 202 Handbook which is appended as Exhibit A to his Declaration, and Mr. Wilden’s deposition which is appended as Exhibit A to Assistant U.S. Attorney Charles S. Kleinberg’s Declaration.

The first point to note is that applications to HUD by sponsors offering to serve different Section 202 groups compete against each other for the funds available. In selecting applications for funding, HUD takes into account the need for housing for the group sought to be served in the area of the proposed project and whether that area has been underfunded in the past for housing of that type relative to need and to funding extended in other areas. Thus, through HUD’s funding decisions, it is in a position to allocate Section 202 loans in a particular region according to the need in that locality for housing for each Section 202 group. HUD is supposed to try to the extent possible to approve an appropriate mix of units for the elderly and the handicapped.

The second point to note is that a sponsor applies for and is approved by HUD to serve a particular group of the groups eligible for Section 202 funds. A sponsor may not unilaterally decide it wishes to serve a different group from the one it was approved to serve. Moreover, if a sponsor wishes to serve another group in addition to the one it was approved to serve, it must apply for approval to do so.

The final point to note is that HUD will not approve an application unless the sponsor affirmatively demonstrates that it possesses the resources and experience to meet the special needs of the group it is applying to serve. The sponsor should demonstrate that it has a specific plan for the delivery of services appropriate for the particular group, that the proposed facilities and staffing are adequate and that the overall size of the project is appropriate for the particular group.

Concerning size, Congress has specifically amended Section 202 so as to encourage the development of “small and scattered site group homes and independent living' facilities for nonelderly handicapped persons and families.” 12 U.S.C. § 1701q(k)(2). As stated by the federal defendant,

the entire thrust of the § 202 housing program for the handicapped is to help integrate such persons into the community by providing small, more home-like projects in residential areas, rather than an institutional type environment (which a developmentally disabled high-rise would be perceived as, with justification).

Def. HUD Memorandum of Law at 17.

ANALYSIS

A. Section 202

Plaintiffs argue that the Court should focus on 42 U.S.C. § 6001(7)(D), which states that a developmentally disabled person can have “substantial functional limitations in three or more” of seven enumerated areas of major life activity and still retain a capacity for independent living, which is listed as the sixth of the seven specified areas.

Inexplicably, plaintiffs ignore the next subsection, 42 U.S.C. § 6001(7)(E), which is predicated by the conjunctive word “and”, stating that a person who is developmentally disabled reflects the need “for a combination and sequence of special, interdisciplinary, or generic care, treatment, or other services which are of lifelong or extended duration and are individually planned and coordinated.” Thus even if we were to assume that plaintiffs have a capacity for independent living, according to the full statutory definition, they are still in need of a substantial range of services. Plaintiffs assert that any services they might need can be obtained in the community surrounding the QBB facility. Even assuming this to be true, the language quoted above indicates that someone in the Section 202 project must be responsible for planning and coordinating the services needed by the plaintiffs; plaintiffs do not address this point.

QBB certainly may not be expected to fulfill the role of service coordinator. The statutory design and selection process for Section 202 sponsors permits HUD to select only persons with experience serving the particular group they have offered to sponsor. QBB has no experience serving the developmentally disabled.

More importantly, 42 U.S.C. § 6001(2) states that a facility for the developmentally disabled should be “designed primarily for the delivery of one or more services” to such persons. In the present case, QBB may not possibly be considered a facility for the developmentally disabled because it provides no services for such persons.

Furthermore, if plaintiffs claim to need no services from the housing project they live in, then a fortiori, they fall outside of the class of the developmentally disabled who by definition of statute must live in a facility that provides special services.

As argued by defendant, and this Court agrees, Section 202 was not meant to provide subsidized housing for those simply in need of it. Section 202 is more than a rent and roof subsidy or merely “housing sim-pliciter.” Rather, it is a housing and services program. The services being offered need only be commensurate with the needs of the Section 202 population being served. Thus, QBB in serving the well elderly who need minimal services, provides only a minimal service — a social coordinator, who works to implement QBB’s aim of generating a self-sufficient, interdependent community of the elderly within the building.

The Court notes that plaintiffs also do not fall within the general definition of a handicapped pérson found in 12 U.S.C. § 1701q(d)(4), which states that the person’s handicap must be of such a nature that it “substantially impedes his ability to live independently” and “is of such a nature that such ability could be improved by more suitable housing conditions.”

As mentioned before, plaintiffs argue that they need no special services to be provided by the facility they live in, being capable of obtaining them in the community outside the facility. But if this is the case, then plaintiffs’ ability to live more independently has in no way been improved by more suitable housing conditions. The only argument that plaintiffs make in this vein is that their lives would be improved if one plaintiff did not have to live in a ghetto and the other plaintiff with his parents, because neither of them can afford anything else. Without doubt the plaintiffs’ lives might improve if they had their own places or safer apartments. But plaintiffs have not shown how their particular alleged disabilities would be improved by living in QBB’s facility as opposed to simply a low income, rent subsidized apartment.

Notably, the fact that there might be no readily available low income projects in plaintiffs’ neighborhood other than QBB does not justify requiring QBB to accept them. As discussed, HUD’s asserted practice in selecting sponsors takes into account shortages of housing for certain Section 202 groups and previous practices of underfunding for these groups. Given this method, presumably HUD awarded QBB funds- to build its project in the Flushing, Queens, New York area because there was a particular shortage of housing for the elderly as opposed to the other Section 202 groups and/or because this region had received relatively less funding for the elderly in relation to other Section 202 groups.

Even if QBB wanted to serve the developmentally disabled, assuming arguendo that plaintiffs fall within this group, QBB could not unilaterally decide to admit plaintiffs. QBB would have to apply to HUD to serve this group and be approved to do so. QBB’s application would have to show it had the capacity and skill to provide any special services a developmentally disabled person might need. As QBB has had no experience with the developmentally disabled, HUD would be unlikely to approve its application. Moreover, because of the size of QBB’s facility, 190 units, HUD would be reluctant to accept QBB as a sponsor even if it had experience in dealing with developmentally disabled, because Section 202, 12 U.S.C. § 1701q(k)(2), and HUD’s regulations direct HUD to choose small-scale, home-like programs and scattered sites for the handicapped over large-scale concentrated institutional type programs.

Again assuming plaintiffs fall within the class of the developmentally disabled, it should be noted that if HUD were to require QBB to serve a group it had not volunteered to serve, it would in effect thwart QBB’s charitable purpose. It would also be unclear who should pay the costs of services required by the developmentally disabled if they were to live at QBB and full reimbursement from other sources (i.e., other than Section 202) was not available. In this Court’s view, it would seem quite unfair to make QBB pick up these costs when it had not volunteered to serve the developmentally disabled.

In sum, the Court finds that plaintiffs, by their own self-descriptions as being mildly retarded but capable of living independently and in need of no special services to be provided by a housing facility, place themselves outside of the four classes of persons eligible for Section 202 housing; such eligible persons having been defined in Section 202, 12 U.S.C. § 1701q(d)(4) and in 42 U.S.C. § 6001(7).

As should be evident from our analysis, the definition of a facility for the developmentally disabled as one that provides one or more services, 42 U.S.C. § 6001(2), functions now to exclude from eligibility for Section 202 housing the mildly retarded who need no special services to be provided by a housing facility.

The Court has no doubt that the class plaintiffs purportedly represent, the mildly retarded, may indeed be in need of subsidized housing because their limited mental abilities tend to restrict their own income-earning potential. But despite this need, it is not proper for this Court judicially to rewrite Section 202 and 42 U.S.C. § 6001(7) in order to fulfill the need of this purported class for subsidized housing. Plaintiffs would be better advised to obtain the remedy they seek from Congressional clarification of the statute’s definitions of the developmentally disabled and facilities for them.

B. Section 50h

Plaintiffs argue that HUD has sanctioned discrimination through its administrative approval of QBB’s Management Plan, which excludes all non-mobility impaired handicapped persons as eligible tenants. By doing so, plaintiffs allege that-the defendants have violated Section 504 of the Rehabilitation Act of 1973, 29 U:S.C. § 794 (hereinafter referred to as Section 504).

Section 504 declares that: “No otherwise qualified handicapped individual in the United States, as defined in section 706(7) of this title, shall, solely by reason of his handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.”

By its plain language, Section 504 prohibits discrimination against handicapped persons who are “otherwise qualified” for a federally assisted program. In the present case, plaintiffs may properly be denied admittance to QBB’s facility because they are neither elderly nor mobility impaired. This denial does not rest on the improper grounds of discrimination because of their handicap, but rather on the basis of their lack of either of the two necessary qualifications of age. (i.e., 62 or over) or mobility impairment.

This basic point aside, plaintiffs would instead have this Court accept their argument that Section 504 requires that they be admitted into QBB, sponsored as it was for the elderly and mobility impaired, merely because plaintiffs are as (allegedly) developmentally disabled adults, also a group covered by Section 202.

In the first place, this argument ignores the express language of Section 202 which permits sponsorship of only one of the four groups covered.

But, second and perhaps more importantly, for the Court to accept this argument would be to hold that when Congress passed Section 504, a general civil rights statute, it meant to revoke or repeal Section 202, a much more specific statute with an articulated program. Acceptance of this view would be contrary to the well-settled rule of statutory construction that a general statute will not be construed so as to repeal or revoke another more particular statute, regardless of the priority of enactment, absent express language by Congress stating its intent to revoke or repeal that statute. Morton v. Mancari, 417 U.S. 535, 94 S.Ct. 2474, 41 L.Ed.2d 290 (1974).

Thirdly, accepting plaintiffs’ argument would lead to the requirement that Section 202 housing sponsors accept members from all classes covered by the statute regardless of which class or classes the sponsors had originally intended to serve. This result would be clearly contrary to case law holding that Section 504 may not be used to expand the delivery of benefits awarded under another statute if that statute otherwise restricts the delivery of benefits. See, e.g., Doe v. Colautti, 592 F.2d 704, 708-10 (3d Cir.1979) (Section 504 does not require a state to extend the same medical benefits to the mentally ill as to the physically ill; while it forbids the automatic exclusion of a physically ill person who also has a mental ailment from a treatment program for the physically ill only because of the patient’s mental problems, it does not require the expansion of the program to treat the mental problem as well.); Bernard. B. v. Blue Cross and Blue Shield of Greater New York, 528 F.Supp. 125, 129-33 (S.D.N.Y.1981), aff'd on opinion below, 679 F.2d 7 (2d Cir.1982) (Section 504 may not require that all medical conditions be covered by medical insurance simply because some medical conditions are; exclusions of some conditions from coverage is not discrimination based upon handicap.); Duquette v. Dupuis, 582 F.Supp. 1365, 1369-73 (D.N.H.1984) (Section 504 does not require that a program providing medical assistance only to persons under the age of eighteen years of age who were blind extend its benefits to persons over the age of eighteen who suffer from other handicaps.).

Finally, and perhaps most importantly, plaintiffs’ argument that Section 202 violates Section 504 by allowing a sponsor to accept only the elderly or mobility impaired ignores the fact that Section 504 is simply a declaration of the civil rights of the handicapped. It is not an affirmative action program. Southeastern Community College v. Davis, 442 U.S. 397, 410-11, 99 S.Ct. 2361, 2369, 60 L.Ed.2d 980 (1979) (“Section 504 does not refer at all to affirmative action and ... it does not provide for implementation by administrative action.”). Moreover, although the Supreme Court in the Davis case recognized that “the line between a lawful refusal to extend affirmative action and illegal discrimination” will not always be clear, 442 U.S. at 412, 99 S.Ct. at 2370, Section 504 does not require a program sponsor to modify the essential purpose of its program or undergo undue financial burdens to accommodate all handicapped persons. See also Strathie v. Dep’t of Transportation, 716 F.2d 227 (3d Cir.1983).

The Davis case upheld the defendant nursing college’s denial of admission to a deaf applicant because even though she might benefit from the program and be able to perform certain nursing jobs upon graduation, “the purpose of [the college’s] program was to train persons who could serve the nursing profession in all customary ways.” 442 U.S. at 412, 99 S.Ct. at 2370 (emphasis added). Since that purpose was inconsistent with the applicant’s admission, the Court held that Section 504 did not require her acceptance.

Following the Davis case, a case here in the Second Circuit elaborated on the test for deciding whether a Section 504 violation occurred by stating that “[t]he pivotal issue is not whether the handicap was considered but whether under all the circumstances it provides a reasonable basis for finding the plaintiff not to be qualified or not as well qualified as other applicants.” Doe v. New York University, 666 F.2d 761, 776 (2d Cir.1981). In Doe, the Second Circuit recognized that N.Y.U. might have a reasonable basis for considering plaintiff’s recurrent psychological problems to be a reason for not admitting her on the basis that her handicap would make her a less qualified candidate for admission to medical school; this was held, however, to be a question of fact. Id.

Applying the above to the present case, we find that even if we assume ar- guendo that QBB denied plaintiffs’ applications on the basis of their handicaps, Section 504 would still not necessarily have been violated. Relying on the Davis case, 442 U.S. 397, 99 S.Ct. 2361, 60 L.Ed.2d 980, QBB could well argue that its purpose was to provide housing with minimal services for the elderly and mobility impaired and that acceptance of plaintiffs would be inconsistent with this purpose because facilities for the developmentally disabled by definition must provide one or more services specifically for them, 42 U.S.C. § 6001(2). Similarly, QBB could rely on the Doe v. New York University case, 666 F.2d 761, to argue that it had a “reasonable basis” for finding that plaintiffs were not as qualified as the other applicants who were elderly and/or mobility impaired.

Notably, the only hypothetical fact pattern that would raise this question of fact as to whether QBB had a “reasonable basis” for denying an applicant would be a case in which an applicant to QBB were to be both elderly (i.e., 62 or over) or mobility impaired and developmentally disabled. In this instance, HUD has stated on the record that QBB would have to admit developmentally disabled elderly persons if their admission could be accomplished without .imposing undue financial burdens or modifying the essential purpose of the program. Significantly, using this analysis, QBB could still reject such a hypothetical applicant without violating Section 504.

Before finishing this discussion of Section 504, we note that in a recent case, Edge v. Pierce, Civil No. 82-51, (D.N.J. May 22, 1984) (Decision at 16-23), a district court was faced with the type of fact pattern we mentioned hypothetically. In Edge, the defendants had denied plaintiffs’ admittance on the basis of their handicap, mental illness. Thus, the Court found that there was possibly a Section 504 violation because the denial of plaintiffs’ admittance on the basis of their handicap raised a question of fact as to whether defendants had a reasonable basis for doing so and whether plaintiffs could be admitted without undue burden to defendants or changing the essential nature of the program. Since in the present case, we are not confronted by a sponsor who denied applicants on the basis of their handicaps, but rather because they lacked the necessary qualifications of being either elderly or mobility impaired (or both), the Edge ruling, though inapposite here, is compatible with our ruling today.

C. The Developmentally Disabled Assistance and Bill of Rights Act

Plaintiffs also argue that HUD’s approval of QBB’s present admission policies violate the Developmentally Disabled Assistance and Bill of Rights Act, 42 U.S.C. § 6000 et seq. This Act states that express federal policy is against the separation of the developmentally disabled. However, this Act, like Section 504 discussed above, is simply a general declaration of the civil rights of the developmentally disabled. Like Section 504, it may not be said that Congress intended by its passage to expand or modify the Section 202 Housing Act of 1959. Following the reasons and analysis which this Court used to find that Section 504 was not violated in this case, the' Court also finds that this Bill of Rights is not violated in the instant case.

D. Equal Protection

Plaintiffs argue that this Court should apply a hybrid standard of review under which the mentally retarded would be deemed a “quasi-suspect” class and under which the Court would inquire whether the Section 202 program is rationally related to a substantial Government interest.

.To survive intermediate scrutiny, the Court need only find that the Section 202 program “reflects a reasoned judgment consistent with the ideal of equal protection by inquiring whether it may fairly be viewed as furthering a substantial [governmental] interest.” Plyler v. Doe, 457 U.S. 202, 217-18, 102 S.Ct. 2382, 2395, 72 L.Ed.2d 786 (1982).

Without becoming embroiled in an analysis of whether this intermediate level of scrutiny should even apply, the Court finds that the Section 202 program is clearly a reasonable means of furthering the substantial interest the Government has in affording elderly and handicapped persons with housing which is tailored to their distinct and varied needs. Therefore, since it is possible to find the Section 202 program constitutional at this intermediate level, it is most certainly constitutional at a lower level of scrutiny, the so-called rational basis test wherein a program need only be reasonably related to a legitimate Government interest.

E. Addendum

Before closing the Court must address a problem created by a misunderstanding between the National and Regional HUD Offices concerning the proper method of managing Section 202 housing projects. As a result of this misunderstanding, QBB accepted two nonelderly, non-mobility impaired persons into its project. This in turn strengthened plaintiffs’ belief that as nonelderly, non-mobility impaired persons, they had an equal right as the two persons who were accepted, also to be. accepted as tenants at QBB’s project.

After QBB was approved as a sponsor for the well elderly who need only minimal services, the New York HUD Regional Office insisted that QBB consider applications by handicapped persons other than the mobility impaired for whom 10% of the units were set aside; specifically, this meant accepting applications from the developmentally and the chronically mentally ill. QBB rejected the applications of these latter two groups that it received, primarily because QBB believed that the applicants were not capable of living on their own.

Subsequently, the Regional Office further insisted that QBB interview these applicants who they had initially turned away to permit them to submit proof of their ability to live independently and to have QBB’s personnel make a fairer assessment by granting the applicants interviews.

From these interviews, QBB accepted two nonelderly, non-mobility impaired adults who needed no special services to be provided by the QBB facility, but who were still eligible for Social Security disability benefits. These two individuals are now living in the QBB project.

The plaintiffs are among the applicants who QBB initially rejected and who QBB again rejected after granting them interviews and an opportunity to submit proof of their ability to live independently. In the view of the QBB personnel who conducted the interviews, plaintiffs were not able to demonstrate that they were capable of living independently and without need of special services or supervision.

Plaintiffs now argue that they were not given an adequate opportunity to provide proof of their ability to live independently. Moreover, plaintiffs’ attorneys submitted an expert’s opinion based on the expert’s examination of plaintiffs, attesting to plaintiffs’ capacities for independent living as long as services and support were available in the surrounding community. Affidavit of Dr. Rosamond Rae in Opposition to Defendants’ Motion for Summary Judgment and in Support of Plaintiffs’ Motion for Summary Judgment.

This “proof” from plaintiffs’ expert, as well as the fact that two nonelderly, non-mobility impaired individuals now live in the QBB project, is pointed to by plaintiffs’ attorneys as an indication that QBB could admit more persons like plaintiffs who are neither elderly nor mobility impaired and who are allegedly capable of living independently.

The National HUD Office, upon realizing that their Regional Office had a somewhat different understanding of the Section 202 Housing Act, addressed a series of memo-randa to the Regional Office, attempting to clarify the appropriate method of implementing the Section 202 Housing Act.

Plaintiffs may not now use a misunderstanding by a Regional HUD Office to bootstrap themselves into having the right to live in a Section 202 subsidized housing project sponsored for the well elderly. Thus, this Court perforce must treat this factual aberration (i.e., that QBB now has two nonelderly, non-mobility impaired tenants) as just that, an incorrect implementation of the statutory scheme intended by Congress; it is a mistake which may not open the door to housing rights for plaintiffs.

In sum, the Court holds that neither the fact that two nonelderly, non-mobility impaired individuals now live in QBB, nor the fact that plaintiffs’ ability to live independently is a contested question of fact, is of any legal significance now.

For the reasons stated above, the Court grants summary judgment to the defendants and plaintiffs’ complaint is hereby dismissed.

SO ORDERED.

      . The third named plaintiff, Bonnie Brecker, has withdrawn from this action.

      . According to HUD’s minimum property standards for new multi-family housing, a recipient of HUD funds was required to insure that 10% of the new facility's units would bs designed so that they were accessible to the mobility impaired or physically handicapped. See Def. HUD’s Ex. E. Although the elderly are likely to develop physical handicaps, these HUD standards do not permit QBB, for example, to restrict applicants for these accessible units to just the elderly. Rather, under these standards, HUD requires that the project sponsor accept mobility impaired applicants whether or not they are also elderly (z'.e., 62 or over). This requirement does not derive from Section 202 even though the mobility impaired, who are one of the four groups covered by Section 202, happen to benefit from this requirement. As a consequence of these HUD standards, QBB was required to make 10% of its 190 units, or 19 units, accessible to the mobility impaired and to accept applicants for these accessible units who may not have been elderly, so long as they were mobility impaired.

      . According to defendant HUD’s brief, the rent subsidy which is paid directly to the landlord under Section 8 of the 1937 Housing Act constitutes the difference between the fair market rent of the unit and the amount of rent that the low income tenant is deemed capable of paying. Def. HUD’s Memorandum of Law at pp. 7-8.

      . It is interesting to note that the definition of a ' handicapped individual as provided by Section 504 differs from the definition of a handicapped person as found in Section 202, 12 U.S.C. § 1701q(d)(4) and a developmentally disabled person as cross-referenced in Section 202 and found at 42 U.S.C. § 6001(7); these later two sections were quoted previously in the text above. Section 504’s definition as found at 29 U.S.C. § 706(7) provides that:
      (A) Except as otherwise provided in subpar-agraph (B), the term "handicapped individual" means any individual who (i) has a physical or mental disability which for such individual constitutes or results in a substantial handicap to employment and (ii) can reasonably be expected to benefit in terms of employability from vocational rehabilitation services provided pursuant to subchapters I and III of this chapter.
      (B) Subject to the second sentence of this subparagraph, the term “handicapped individual” means, for purposes of subchapters IV and V of this chapter, any person who (i) has a physical or mental impairment which substantially limits one or ore of such person’s major life activities, (ii) has a record of such an impairment, or (iii) is regarded as having such an impairment. For purposes of sections 793 and 794 of this title as such sections relate to employment, such term does not include any individual who is an alcoholic or drug abuser whose current use of alcohol or drugs prevents such individual from performing the duties of the job in question or whose employment, by reason of such current alcohol or drug abuse, would constitute a direct threat to property or the safety of others.
      Defendant QBB argues that plaintiffs cannot be capable of independent living and fall within the definition of a handicapped person as defined in Section 504, which states that such a person “has a physical or mental impairment which substantially limits one or more of such persons’ major life activities." 29 U.S.C. § 706(7)(B)(i). The regulation defining the term "major life activities” as just quoted, states that they are "functions such as caring for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working." 45 C.F.R. § 84.3(j)(2)(ii).
      The federal defendant maintains simply that a person may not be developmentally disabled and fall within the definition of 42 U.S.C. § 6001(7), but does not address the question of whether plaintiffs may properly be considered handicapped within the meaning of Section 504.
      While these inconsistencies in the definition of a handicapped individual might be of some consequence in another case, the Court finds that in this case these inconsistencies are of no real consequence because the Court has found: (1) that whether plaintiffs fall within the definition of the developmentally disabled and are simultaneously capable of independent living does not matter because plaintiffs are not eligible for QBB’s Section 202 project by reason of being neither elderly nor mobility impaired; and (2) that whether plaintiffs fall within the meaning of Section 504 and are simultaneously capable of living independently is also of no consequence because by assuming that plaintiffs do fall within the Act, the Court finds above that it is not violated.

      . Looking by comparison at another civil rights statute, the Age Discrimination Act of 1975, 42 U.S.C. § 6103, which is similar to Section 504, we find an analogous result. For example, if otherwise normal elderly persons (Le., 62 or over) were to be denied admission to a Section 202 housing facility for the developmentally disabled, they could not successfully argue that they were being discriminated against on the basis of age. These elderly persons would simply be not otherwise qualified. For the sake of completing this comparison, it is worth noting how closely the language of the ADA tracks the wording of Section 504. The ADA declares “no person in the United States, shall, on the basis of age, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any program or activity receiving federal financial assistance.”

      . Extending plaintiffs’ argument further, it would appear that they would label QBB’s sponsorship of a housing facility for the elderly "discriminatory.” Federal funding for housing for just the elderly has long been upheld as not discriminatory. See, e.g., Acevedo v. Nassau County, N.Y., 500 F.2d 1078 (2d Cir.1974).

      . The language used by the Court in the Du-quette v. Dubois opinion to dispose of plaintiffs’ argument for a more expansive interpretation of Section 504 is worth quoting here as further illustration that Section 504 may not be used to expand or rewrite Section 202. In Duquette, the Court stated that:
      In essence, plaintiff attempts to transform the § 504 shield against invidious discrimination into a sword to secure expanded state aid programs and equal medical assistance benefits for all classes of handicapped persons. ... § 504 does not override the express Medicaid program eligibility requirements and funding conditions found at 42 U.S.C. § 1396a. [Citation omitted.] Furthermore, § 504 does not require states to undertake "affirmative action” such as expanded medical assistance programs to overcome the disabilities of handicapped persons....
      ... [T]he fact that Congress did not include explicit conditions concerning distribution of Medicaid funds among all classes of handicapped persons in the relevant Medicaid funding provisions, 42 U.S.C. § 1396a, indicates that Congress never intended that § 504 be construed to impose fund distribution conditions on state recipients in addition to the explicit conditions of 42 U.S.C. § 1396a. [Or, by analogy, fund distribution and access conditions on recipients of benefits under Section 202, 12 U.S.C. § 1701q.]
      582 F.Supp. at 1369-70.

      . In its Reply Memorandum of Law in Support of its Motion for Summary Judgment, HUD asserts at pages 72-73 that:
      [T]he essential eligibility requirement for a non-accessible unit at the B'nai B’rith project is having reached the age of 62. If a qualified DD [developmentally disabled] person, e.g., one who is elderly and is capable of living at the project, applies, then he would have to be admitted.

      (Emphasis added.) By "capable of living at the project”, the Court was given to understand that this meant accommodated without an undue burden or change in the essential nature of the program, which is, of course, a question of fact. While potentially a sponsor might abuse its discretion in this area, such a case is not now before us.


author: WILLIAM T. HART, District Judge.

text:
    Carol A. PUDIL, Plaintiff, v. SMART BUY, INC. and Marvin Freeman, Defendants.
    No. 84 C 7160.
    United States District Court, N.D. Illinois, E.D.
    April 10, 1985.

      Law Office of Stuart Berks, Des Plaines, Ill., for plaintiff.
    Irving M. Geslewitz, Paul E. Lehner, Adams, Fox, Adelstein & Rosen, Chicago, Ill., for defendants.
   MEMORANDUM OPINION AND ORDER

WILLIAM T. HART, District Judge.

Carol A. Pudil originally brought this action in state court against her former employer Smart Buy, Inc. (“Smart Buy”) and its president Marvin Freeman. On August 16, 1984, the defendants, both “residents” of California, removed the action to this Court based on diversity of citizenship. Pudil’s complaint advances three claims arising from her discharge on May 15, 1984. First, Pudil alleges that Smart Buy discharged her without cause or notice, in violation of the terms of her employment contract as set forth in Smart Buy’s employee manual. Second, Pudil asserts that Freeman recklessly inflicted severe emotional distress upon her by directing her discharge. Third, Pudil maintains, as an alternative to her breach of contract claim, that her reasonable reliance upon the defendants’ actions gives rise to a promissory estoppel. After taking discovery, including Pudil’s deposition, the defendants have moved for summary judgment on all counts.

FACTS

The facts surrounding Pudil’s employment and discharge are not in dispute. In 1969, Freeman opened his first “optical boutique” under the trade name Optica. Due to the success of his concept of expensive, high quality “fashion eyewear,” Freeman opened a Chicago location in late 1983. He traveled to Chicago prior to its opening to interview candidates for sales positions in his Chicago store.

Pudil successfully interviewed with Freeman during his visit. During the course of this interview, Pudil told Freeman that she was in the process of divorce, so that she would be the financial head of her household. Pudil also told Freeman that she would be leaving a position that she had held for seven years to go to work for Optica. Pudil had previously taken a leave of absence from that job to accept a higher paying position. She did not tell Freeman of this other position. In response, Freeman informed Pudil that after a 90-day probationary period, she would be given an increase in pay and become eligible for medical coverage.

Pudil began working at the Chicago Opti-ca store on November 16, 1983. In either late December, 1983 or early January, 1984, all employees of the Optica Chicago store met with the store manager. At this meeting, the store manager presented Opti-ca’s employee manual to the employees by reading the full text of the eight-page document to them and requiring each employee to sign and return a half-page acknowl-edgement that he or she had received, read and understood the document. The manual contained: (i) a statement of the history of Optica; (ii) instructions to employees on proper dress, courtesy to customers and attendance; (iii) a statement of health, vacation and eyeglass benefits available to employees and promotion policy, and (iv) a list of those “offenses” that would result in immediate discharge and those that would result in discharge “after written notice.”

During the course of her employment at Optica, Pudil purchased a new car (trading in her old car) and finalized her divorce (thereby losing health insurance under her ex-husband’s policy). She also “altered her lifestyle in conformance with her increased earnings.” Approximately ninety days after Pudil began work at Optica, she received a note from Freeman congratulating her on the quality of her work, informing her that her current paycheck included an increase in pay and expressing the hope that “you’ll be with us for a long time.”

On May 15, 1984, Optica’s Chicago store manager informed Pudil that she was discharged, effective immediately. Optica’s assistant store manager offered to help Pudil find a new job and Optica paid Pudil a severance allowance at the time of her termination. Although Pudil asked the reason for her discharge, Optica refused to give any reason. Pudil was distressed by the loss of her job at Optica and consulted her personal doctor, who prescribed tranquilizers.

DISCUSSION

1. Breach of Contract

Pudil concedes that, under Illinois law, a written or oral employment contract which does not specify the duration of employment creates an employment “at-will” relationship, terminable by either party at any time, with or without cause. See, e.g., Gordon v. Matthew Bender & Co., 562 F.Supp. 1286, 1290-92 (N.D.Ill.1983); Goodman v. Board of Trustees, 511 F.Supp. 602, 606 (N.D.Ill.1981). Since Pu-dil does not contend that her original engagement to work at Optica’s Chicago store specified any duration, she must be viewed as an employee “at-will.” Nonetheless, she maintains that the employee manual, distributed after she began her work at Optica, either modified her original engagement or should be read in interpreting that agreement.

The Illinois Supreme Court has yet to pass on the effect of an employee manual upon the employer’s discretion to terminate “at-will” employees. Therefore, this Court must attempt to predict the path the Illinois Supreme Court would follow. In re Air Crash Disaster, 701 F.2d 1189, 1197 (7th Cir.), cert. denied, — U.S. -, 104 S.Ct. 204, 78 L.Ed.2d 178 (1983); Roberts v. Western-Southern Life Ins. Co., 568 F.Supp. 536, 540 (N.D.Ill.1983). In predicting how the Illinois Supreme Court would decide this issue, the decisions of the Illinois Appellate Court, id., and decisions from other jurisdictions, Martin v. Harrington and Richardson, Inc., 743 F.2d 1200, 1202 (7th Cir.1984), are helpful indicators.

Illinois case law on this issue begins with Carter v. Kaskaskia Community Action Agency, 24 Ill.App.3d 1056, 322 N.E.2d 574 (5th Dist.1974). In Carter, the state court found that an employer must abide by the grievance procedures set forth in its personnel policy manual where the manual contained provisions which created mutual obligations for the employer and its employees and the employee assented to the manual as a modification of his employment relation. Subsequently, Sargent v. Illinois Institute of Technology, 78 Ill.App.3d 117, 33 Ill.Dec. 937, 397 N.E.2d 443 (1st Dist.1979) gave a narrow reading to Carter, holding that since the personnel manual was given to the employee when he began his employment and contained no provisions imposing conditions on him beyond his required duties, the manual was not “bargained for” and so unenforceable. More recently another appellate court applied Carter to require a county board to honor its sheriffs announcement to his deputies that they would receive a raise. Scutt v. LaSalle County Board, 97 Ill.App.3d 181, 53 Ill.Dec. 21, 423 N.E.2d 213 (3rd Dist.1981).

Relying on the decision in Sargent, two published opinions in this district and additional unpublished opinions, e.g., Brundage v. Trans World Airlines, Inc., No. 80 C 6701, slip op. at 7-9 (N.D.Ill. March 29, 1984) (Hart, J.), have determined that the provisions of personnel manuals do not bind employers. In Rynar v. Ciba-Geigy Corp., 560 F.Supp. 619 (N.D.Ill.1983), Judge Will found that although the manual contained terms suggesting a mutuality of obligation, the employees had not assented to the modification because they were only generally aware of its existence but had not reviewed or approved its specific provisions. Citing Rynar, Judge Bua later found that a manual provided to the employee at the time she was hired did not bind the employer. Enis v. Continental Illinois National Bank & Trust, 582 F.Supp. 876 (N.D.Ill.1984). See also Brundage, supra.

However, in a subsequent decision, yet another Illinois Appellate Court has considered the issue, rejecting the narrow reading given Carter by Sargent. Kaiser v. Dixon, 127 Ill.App.3d 251, 82 Ill.Dec. 275, 283-85, 468 N.E.2d 822, 830-32 (2nd Dist.1984). Kaiser carefully noted the split of authority on this issue in other jurisdictions, but found the “better reasoned approach” to be to “bind the employer to the terms in its policy manual” whenever the manual “imposes obligations on both thé employee and the employer,” regardless of whether the manual was “bargained for.” Id. See also Brooks v. Trans World Airlines, Inc., 574 F.Supp. 805, 809 n. 1 and 2 (D.Col.1983) (listing additional state authorities from other jurisdictions on each side of this issue).

This Court need not decide how the Illinois Supreme Court would resolve the dispute between Kaiser and prior decisions as to the requisite level of employee assent to a modification of the employment relation proposed by the employer through a personnel manual. Pudil and the other Chicago employees of Optica assented to the manual as required by Carter, Sargent, Rynar and Enis. Taken together, the special meeting called by management, the formal reading of the full text of the manual and the employees’ signing and return of acknowledgements that they understood the manual demonstrate assent.

As to the requisite level of mutuality, this Court must agree with the decision in Kaiser that where the manual imposes obligations on both employer and employee, the employer is bound by the manual. The approach taken in Kaiser is more consistent with the Illinois Supreme Court’s approach to mutuality in other contractual situations, e.g., S.J. Groves & Sons Co. v. State of Illinois, 93 Ill.2d 397, 67 Ill.Dec. 92, 95, 444 N.E.2d 131, 134 (1981) (mutuality is only a requirement that both parties are bound in some way by an agreement and is satisfied by consideration), than is the “bargained for” analysis of Sargent. Here, as in Kaiser, the manual contains provisions “governing employee evaluation [p. 8], employee conduct, work habits and attitudes [pp. 1, 3, 4], holiday, sick leave, time off and vacation policies [pp. 1, 2, 5],_discipline ... and dismissal procedures [pp. 6, 7].” Although Opti-ca’s manual is not nearly as detailed as the eighty-three page manual dealt with in Kaiser, Optica’s manual contained provisions covering many of the same subject areas. Taken together with Optica’s continuing policy of a 90-day probationary period, the manual evidences a sufficient mutuality of obligation. Hence, the defendants’ motion for summary judgment must be denied as to Count I.

2. Infliction of Emotional Harm

Next, Pudil asserts that Freeman’s actions in terminating her with knowledge that she would rely on his representations of job security constitute reckless or intentional infliction of emotional distress. To prevail on a claim of infliction of emotional distress, Pudil must demonstrate that the defendants’ “extreme and outrageous” conduct caused her “severe” emotional distress, and that the defendants acted either intentionally to cause such distress or with knowledge of facts that would indicate such distress was substantially certain to result from their actions; i.e., recklessly. Stoecklein v. Illinois Tool Works, 589 F.Supp. 139, 144-5 (N.D.Ill.1984); Heying v. Simonaitis, 126 Ill.App.3d 157, 81 Ill.Dec. 335, 341, 466 N.E.2d 1137, 1143 (1st Dist.1984).

Especially in cases where the plaintiff’s emotional distress has arisen during the course of employment or upon its termination, Illinois law strictly demands a showing of “extreme and outrageous” behavior. See, e.g., Stoecklein, supra at n.- 9 (employer’s alleged conduct of demoting then later forcing employee into retirement because of his age, then reneging on promise of severance pay and job counseling not sufficiently outrageous); Balark v. Ethicon, Inc., 575 F.Supp. 1227, 1230-32 (N.D.Ill.1983) (employer’s alleged refusal to reinstate employee despite arbitration award in his favor together with allegedly baseless referral of his name to FBI for investigation not extreme and outrageous); Witkowski v. St. Anne’s Hospital, 113 Ill.App.3d 745, 69 Ill.Dec. 581, 447 N.E.2d 1016 (1st Dist.1983) (employer’s alleged discharge for employee solely due to her eligibility for disability benefits together with employer’s allegedly false charges of misconduct made to justify discharge not sufficiently outrageous). See also Morrison v. Sandell, 112 Ill.App.3d 1057, 68 Ill.Dec. 556, 446 N.E.2d 290 (4th Dist. 1983) (co-worker’s conduct); Plocar v. Dunkin’s Donuts of America, Inc., 103 Ill.App.3d 740, 59 Ill.Dec. 418, 431 N.E.2d 1175 (1st Dist.1981) (franchiser’s conduct). Neither the conduct complained of by Pudil nor the injury suffered by her is sufficiently distinguishable from that alleged in the cited decisions to avoid dismissal. The defendants’ motion must be granted as to Count II.

3. Promissory Estoppel

Pudil’s final claim is that the defendants are estopped by their course of conduct (Freeman’s alleged representations at the job interview, the distribution of the personnel manual and the notification that Pudil had successfully completed her probationary period) from refusing to continue her employment. Pudil concedes that in order to establish promissory estoppel under Illinois law she must show: (1) a promise; (2) which should reasonably have been expected by the promiss'or to induce substantial action or forebearances by her; (3) which induced such action or forebearance; and (4) which must be enforced to avoid injustice. Kulins v. Malco, 121 Ill.App.3d 520, 76 Ill.Dec. 903, 910, 459 N.E.2d 1038, 1045 (1st Dist.1984).

The defendants argue that the record fails to reveal an unambiguous promise to Pudil. See Rynar, 560 F.Supp. at 625-26; Dale v. Groebe & Co., 103 Ill.App.3d 649, 59 Ill.Dec. 350, 354, 431 N.E.2d 1107, 1111 (1st Dist.1981). In response, Pudil contends that such an unambiguous promise may be found in the “totality of circumstances” here, including the defendants’ conduct, citing Hoos v. Hoos, 86 Ill.App.3d 817, 42 Ill.Dec. 174, 180, 408 N.E.2d 752, 758 (1st Dist.1980). This issue need not be decided.

Accepting Pudil’s position that she has shown a sufficiently unambiguous promise, she has failed to present evidence of sufficient harm resulting from her reliance on this promise. Pudil asserts that she (1) traded in her six-year old car for a new one, incurring a debt; (2) finalized her divorce, losing her health insurance under her former husband’s health plan; and (3) “altered her lifestyle in accordance with her secured position.” These actions do not constitute sufficient reliance on her part to necessitate enforcement of the defendants’ “promise” so as to avoid injustice.

“In practice, those cases which have found a change in position for the worse involved rather egregious circumstances where the [plaintiff] has acted in good faith and the [defendant] has received an unwarranted benefit.” Hoos v. Hoos, 42 Ill.Dec. at 179, 408 N.E.2d at 757. Further, promissory estoppel permits recovery of only such damages as “are necessary to prevent injustice.” Gerson Electric Construction Co. v. Honeywell, Inc., 117 Ill.App.8d 309, 72 Ill.Dec. 851, 853, 453 N.E.2d 726, 728 (1st Dist.1983). These elements of a claim of promissory estoppel tend to merge; the more substantial the benefit conferred or the detriment endured, the greater the injustice that will occur absent enforcement of the promise. See Bolden v. General Accident, Fire & Life Assurance Corp., 119 Ill.App.3d 263, 74 Ill.Dec. 804, 807, 456 N.E.2d 306, 309 (1st Dist.1983). Here, Pudil has not taken any action that will be for naught because of her discharge by the defendants. Her new car does not gain or lose any value by virtue of the loss of her employment at Optica. Pudil’s decision to obtain a divorce (and consequent loss of her husband’s insurance benefits) did not hinge upon her continued employment at Optica and the benefits she derives from her divorce are not reduced by her discharge. Hence, no injustice will result when the defendants’ “promise” is not enforced.

IT IS THEREFORE ORDERED that the defendants’ motion for summary judgment is granted as to Counts II and III, but is denied as to Count I. Judgment will enter on Counts II and III in favor of Smart Buy, Inc. and Marvin Freeman and against Carol A. Pudil.


author: ROVNER, District Judge.

text:
    Jack STRICK, d/b/a Harry’s Shoe Center, Plaintiff, v. Samuel PIERCE, Secretary of Housing and Urban Development, Defendant.
    No. 84 C 4093.
    United States District Court, N.D. Illinois, E.D.
    April 11, 1985.

      Gregory E. Rogers, Chicago, Ill., for plaintiff.
    Elizabeth M. Landes, U.S. Atty’s. Office, Chicago, Ill., for defendant.
   MEMORANDUM OPINION AND ORDER

ROVNER, District Judge.

The motion of the defendant, Samuel Pierce, Secretary of Housing and Urban Development, for summary judgment dismissing the complaint of plaintiff Jack Strick is granted because the complaint is barred by plaintiffs failure to submit a sworn proof of loss within the requisite period of time and because the plaintiff has failed to document adequately the amount of his loss. No material dispute exists between the parties as to the facts.

Plaintiffs shoe store was burglarized on September 15, 1982, at which time he was covered by a policy issued under the Federal Crime Insurance Program, 12 U.S.C. § 1749bbb, et seq. The terms of the policy explicitly provided that the insured must keep records so that the amount of loss could be determined accurately, that the insured must submit a sworn proof of loss within 60 days of discovery of the loss, and that the insured is barred from bringing suit unless he has complied with all the terms of the policy. Plaintiff twice submitted inventory lists of $39,855 and $116,-881.32 on September 30 and October 10, 1982, respectively, to Hanover Adjustment Service (“Hanover”), the adjuster assigned by defendant to investigate the loss. Hanover reminded plaintiff on at least two occasions that the policy required him to submit a sworn proof of loss statement and informed him that he had failed to submit sufficient documentation to substantiate his claim. Indeed, by letter dated April 20, 1983, Hanover expressly informed plaintiff that, although- the time within which he was to submit the sworn proof of loss had expired on November 14, 1982:

In order to permit you to comply with the terms and conditions of the policy the time within which you may render sworn statement in proof of loss is herewith extended to and including May 5, 1983, and the time for filing of suit remains at September 15, 1983. Please be advised that except for this extension of time the company- will require full and complete compliance with all the terms and conditions of the policy.
Nothing herin [sic] constitutes, nor should it be construed by you as, a waiver of any of the rights or defenses which the undersigned company now has or hereafter may have under its policy except as concerns the time for the filing of proof of loss, and the time for filing suit, which is referred to above.
The Burglary Loss Analysis form and the Contents Valuation forms must also be in our possession within 15 days from the date of this letter and the forms must-be accurate and backed up by invoices and certified public accountant’s statement.

(Government Exhibit C2.)

Despite this warning, on April 26, 1982, plaintiff, through a public adjuster retained as his agent, submitted a “burglary loss analysis” and a “contents valuation report” and admitted in his cover letter of that date that:

The insured could not really describe the involved footwear, as there were various styles taken. The insured arrived at the average cost of shoes taken as per the average price of each individual manufacturer.

(Government Exhibit Dl.) In that letter, plaintiff also requested an additional 60 day extension for filing the proof of loss.

Defendant did not respond to this request for an extension of time, and plaintiff has never submitted the sworn proof of loss. On May 18, 1983, the Federal Crime Insurance Program denied plaintiffs claim for lack of supporting documentation.

With narrowly limited exceptions, courts have, uniformly required strict adherence to the requirements of federal insurance policies and “have almost invariably denied recovery when the claimants failed to comply with proof of loss requirements found in insurance policies issued under federal programs.” Cross Queen, Inc. v. Director, Federal Emergency Management Agency, 516 F.Supp. 806, 809 (D.V.I.1980). In addition, where an insured fails to keep inventory records so as to preclude an accurate determination of the amount of loss, recovery is barred under the Federal Crime Insurance Program. Wiesel v. Guiffrida, 608 F.Supp. 690, 1984 Fire & Cas. Cases 563 (E.D.Pa., 1984); Victoria Camera, Inc. v. Guiffrida, 566 F.Supp. 796, 798-99 (S.D.N.Y.1983).

The narrow exceptions, limited to the facts in each case, involve situations in which the government is estopped by some affirmative conduct on its part which would render adherence to the strict procedural requirements inequitable. “The agency may be estopped only in extreme circumstances where the agent of the United States makes a representation that amounts to affirmative misconduct, or when the insurer has made a partial payment on the claim and is aware of all the information that a proof of loss form would contain before the sixty-day period elapses.” Victoria Camera, Inc., supra at 798. Accord, Meister Bros., Inc. v. Macy, 674 F.2d 1174, 1176-77 (7th Cir.1982) (government’s partial payment of the claim was, under the unique facts presented in that case, sufficient to estop it to raise failure to file timely proof of loss as a defense.)

No such unique circumstances are present in this case. Plaintiff argues first that even though he did not submit the sworn proof of loss, he did submit “the information which was essentially called for” on the proof of loss, and second, that, although he did not maintain or submit accurate records “because he did not run a business of the size of a large retail outlet such as a Sears Roebuck or Carson Pirie Scott,” he did the best he could. Neither argument is persuasive. As Judge Pell noted in Meister Bros., supra at 1177, “it is axiomatic that ‘[m]en must turn square corners when they deal with the Government’ ” quoting Rock Island, Arkansas, & Louisiana Railroad Co. v. United States, 254 U.S. 141, 143, 41 S.Ct. 55, 56, 65 L.Ed. 188 (1920). Even if plaintiff did provide all of the information required by the proof of loss statement, and his use of the term “essentially” suggests that he did not, he failed to swear under penalty of perjury and other crimes to the truthfulness and completeness of the information he provided as required by the sworn proof of loss statement. Obviously, this requirement is not trivial. Moreover, neither the government nor this Court is required to sort through numerous documents to determine whether the information requested on the proof of loss statement is “essentially” the same as that provided by plaintiff. The government is entitled to require those it insures to submit information in the format specified. Plaintiff did not submit the proof of loss despite having been given an extension of time to do so and having been advised in writing of the deadline for filing the proof of loss. His unanswered request for an additional 60 days extension of time serves as no excuse because he should have protected himself by complying with the deadline when he did not receive an affirmative response granting him the extension. Plaintiff’s “I did the best I could” excuse does not justify his failure to keep records that would allow an accurate determination of his loss, as specifically required by the policy. The use of “averages” simply does not suffice as a substitute for accuracy. Victoria Camera, supra.

Nor is the plaintiff’s conclusory statement that all of the cases cited by the defendant “are clearly distinguishable” helpful to this Court. Although the defendant had cited numerous cases in its opening brief in support of its motion, for summary judgment, plaintiff attempts to distinguish only two in its responsive brief, which totals less than five pages in length. In light of the hundreds of cases pending on this Court’s docket and the caseload of the federal judiciary in this district generally, counsel cannot expect this Court to shoulder the additional burden of doing counsel’s work in distinguishing cases cited by an opponent. All cases are distinguishable on their facts because each case is unique: the question is whether the distinction is of substance. This case falls squarely within the numerous cases requiring strict adherencé to the terms of federal insurance policies.

This Court finds that no material issue of fact exists in this case that precludes the grant of summary judgment in favor of defendant. Accordingly, the plaintiff’s complaint is dismissed. It is so ordered.