PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ALEXANDRIA RESIDENT COUNCIL,
INCORPORATED,
Plaintiff-Appellee,

v.

ALEXANDRIA REDEVELOPMENT &
HOUSING AUTHORITY,
Defendant-Appellant,

                                                               No. 99-2649
and

SAMUEL MADDEN HOMES TENANT
COUNCIL, d/b/a Samuel Madden
Homes Cooperative, Incorporated,
Defendant.

SUSAN F. BRITA; MARILEE MENARD;
MALCOLM E. VERDICT,
Amici Curiae.

Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Leonie M. Brinkema, District Judge.
(CA-97-427-A)

Argued: June 5, 2000

Decided: July 6, 2000

Before NIEMEYER and LUTTIG, Circuit Judges, and
Robert R. BEEZER, Senior Circuit Judge of the
United States Court of Appeals for the Ninth Circuit,
sitting by designation.

_________________________________________________________________
Vacated by published opinion. Judge Luttig wrote the opinion, in
which Judge Niemeyer and Senior Judge Beezer joined.

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COUNSEL

ARGUED: Michael Jay Weiser, Alexandria, Virginia, for Appellant.
Paul Anthony Fiscella, Alexandria, Virginia, for Appellee. ON
BRIEF: Victor M. Glasberg, Alexandria, Virginia, for Appellee.
Susan F. Brita, Alexandria, Virginia; Marilee Menard, Alexandria,
Virginia; Malcolm E. Verdict, Alexandria, Virginia, Amici Curiae.

_________________________________________________________________

OPINION

LUTTIG, Circuit Judge:

The Alexandria Redevelopment and Housing Authority ("ARHA"),
the public housing authority for the City of Alexandria, Virginia,
appeals from the district court's orders, issued pursuant to motions
filed by the Alexandria Resident Council, Inc. ("ARC"), requiring that
ARHA accept ARC's offer to purchase the Samuel Madden Down-
town Homes ("Madden Homes"). Because we conclude that the dis-
trict court was without jurisdiction to consider ARC's motions, we
vacate the orders that the district court issued pursuant to those
motions.

I.

After it had designated the Madden Homes for demolition, ARHA
was required, under governing regulations of the United States
Department of Housing and Urban Development ("HUD"), to first
offer to sell the development to its "local resident council." When
ARHA made the required sale offer to another entity, treating that
entity as the development's local resident council, ARC filed an
action under 28 U.S.C. section 1983, seeking a declaration and order
that, under HUD regulations, it was the project's local resident coun-
cil, and that it was thus entitled to receive an offer of sale. J.A. 24-25.
The district court granted the requested relief, and this court affirmed,

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see Alexandria Resident Council, Inc. v. Samuel Madden Homes Ten-
ant Council, No. 97-2501, 1998 WL 416726 (4th Cir. July 22, 1998).

ARC subsequently filed two motions in the district court. First, on
December 23, 1998, ARC filed a motion ("1998 motion") requesting
that the court order ARHA, which had already made the required
offer of sale to ARC, to accept ARC's offer to purchase the Madden
Homes. In response, the court ordered ARC to pursue its right to
appeal ARHA's rejection of the purchase offer with HUD. The court
also ordered ARHA not to take any action, such as selling the devel-
opment to another party, that would prejudice ARC's efforts to pur-
chase the Madden Homes, pending further order of the court. J.A. 66-
67. ARC pursued its appellate rights with HUD and, although HUD
found most of ARHA's bases for rejecting the purchase offer to be
erroneous, it agreed with ARHA that ARC had failed to provide a
"firm financial commitment" to fund its purchase. HUD gave ARC
ninety days to cure this infirmity.

Second, on August 18, 1999, after ARHA had rejected ARC's
renewed attempt to provide a firm financial commitment, ARC again
filed a motion ("1999 motion") requesting, inter alia, that the district
court order ARHA to accept its purchase offer. J.A. 68-69. The court
granted the motion, set aside ARHA's rejection of ARC's purchase
offer, and directed ARHA to accept the offer. ARHA now appeals
from this final order of the district court, and from the district court's
assumption of jurisdiction over both the 1998 and the 1999 motions.

II.

ARHA contends that this litigation, initiated by ARC's section
1983 complaint, necessarily came to an end when this court affirmed
the district court's judgment granting the relief requested in that com-
plaint -- a declaration that ARC was the rightful local resident coun-
cil of the Madden Homes and an order that ARHA extend to ARC the
required sale offer. ARHA thus argues that the district court was with-
out jurisdiction to consider the 1998 and 1999 motions, and that its
orders issued pursuant to those motions should be vacated. Although
ARHA repeatedly raised this jurisdictional issue below, see J.A. 43-
44, 194, 325, the district court apparently never addressed it. On
appeal, ARC maintains that the power to consider its post-judgment

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motions fell within the district court's ancillary jurisdiction -- that is,
the court's power to consider motions ancillary to the underlying sec-
tion 1983 complaint. We disagree.

In Peacock v. Thomas, 516 U.S. 349 (1996), the Supreme Court
explained that:

          [A] federal court may exercise ancillary jurisdiction "(1) to
          permit disposition by a single court of claims that are, in
          varying respects and degrees, factually interdependent; and
          (2) to enable a court to function successfully, that is, to man-
          age its proceedings, vindicate its authority, and effectuate its
          decrees."

Id. at 354 (quoting Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375,
379-80 (1994) (citations omitted)).1 We conclude that ARC's 1998
and 1999 motions requesting that the district court order ARHA to
accept its purchase offers fell into neither of these two categories of
ancillary jurisdiction.

As to the first category articulated in Peacock , the resolution of
factually interdependent claims in the same court, the motions at issue
are not sufficiently interdependent with the claims advanced in the
underlying complaint to warrant the exercise of ancillary jurisdiction.
In Peacock, the Court considered an initial complaint that involved
the status of the defendants as fiduciaries under the Employee Retire-
ment Income Security Act and their alleged wrongdoing in that role,
and a subsequent complaint against a defendant to which one of the
defendants from the first suit had allegedly diverted funds to avoid
paying the judgment from the first suit. The Court held that the two
complaints were not sufficiently factually and logically interdepen-
dent to justify the district court's exercise of ancillary jurisdiction
over the second complaint on the basis of the first. See id. at 355-56.
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1 The common law concept of "ancillary jurisdiction" is now codified
as an aspect of "supplementary jurisdiction." See 28 U.S.C. § 1367. The
Court in Peacock made it clear, however, that, at least as is relevant to
the present dispute, common law principles govern a court's ancillary
jurisdiction, just as prior to codification.

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Similarly, in the present case, the section 1983 action filed by
ARC, the subject of which was ARC's status as the rightful local resi-
dent council of the Madden Homes and its entitlement to an offer of
sale from ARHA, is entirely independent from the legal question
raised in the 1998 and 1999 motions: whether, after extending the
required offer of sale and receiving a subsequent offer of purchase,
ARHA properly evaluated ARC's proposal in deciding to reject that
proposal. The resolution of the latter question required the district
court to consider issues, such as the stability of ARC's financial back-
ing and the extent to which ARHA was required to abide by the rec-
ommendations of its independent proposal review committee, all of
which were entirely irrelevant to the resolution of the underlying
complaint. Likewise, the district court's resolution of ARC's section
1983 complaint required it to assess factors such as whether ARC had
been duly elected as the local resident council by the residents of the
Madden Homes and whether ARHA had previously recognized
ARC's status as local resident council, and such factors were entirely
irrelevant to the court's consideration of the 1998 and 1999 motions.
Under these circumstances, we cannot conclude that there was any
interdependence at all between the section 1983 complaint and the
post-judgment motions, let alone sufficient interdependence to war-
rant the district court's exercise of ancillary jurisdiction over those
motions.

As to the second category of ancillary jurisdiction recognized in
Peacock -- the court's power to effectuate its decrees -- the relief
sought in the 1998 and 1999 motions, that ARHA be ordered to
accept ARC's purchase offer, simply was not necessary to the effectu-
ation of the initial judgment declaring ARC the local resident council
and ordering that it receive a sale offer. That is, although the right to
receive an offer of sale inheres in being declared a local resident
council, it is certainly not inherent in being so declared that the resi-
dent council's purchase offer be accepted, pursuant to HUD's regula-
tory procedures for the evaluation of such offers. Indeed, that HUD
regulations set forth specific criteria for the evaluation of purchase
offers submitted by duly recognized local resident councils necessar-
ily implies that some such offers will not be accepted. As such, we
conclude that the district court's order, pursuant to the 1999 motion,
that ARHA accept ARC's purchase offer, was not necessary to the

                     5
effectuation of the court's prior judgment that ARC be recognized as
the local resident council of the Madden Homes.

In concluding that the district court was without ancillary jurisdic-
tion to consider the 1998 and 1999 motions, we do not necessarily
conclude that ARC was without recourse after ARHA rejected its
original and revised purchase offers. ARC could have appealed those
rejections to HUD, as it did after the first rejection but not after the
second, and may have been able to file an action challenging any
adverse decision by HUD as arbitrary and capricious under the
Administrative Procedure Act.2 However, the need to file a separate
complaint, under a separate statutory scheme, serves only to under-
score the inappropriateness of the district court's consideration of the
1998 and 1999 motions as ancillary to its consideration of the under-
lying section 1983 complaint. Once the district court had granted the
relief sought in the section 1983 complaint, declaring ARC the resi-
dent council of the Madden Homes and ordering ARHA to extend to
ARC an offer of sale, the district court lacked jurisdiction to manage
the interaction between ARC and ARHA on an ongoing basis. We
therefore vacate the orders of the district court issued pursuant to
ARC's 1998 and 1999 motions.

VACATED
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2 Indeed, when the district court responded to the 1998 motion by
ordering ARC to pursue its appellate rights with HUD, the court may
well have intended simply to advise ARC that it was required to exhaust
administrative remedies before challenging the rejection of its purchase
offer in federal court. We vacate the 1998 order not because such instruc-
tion was erroneous or otherwise inappropriate, but because, by its plain
terms, the order required ARC to pursue an appeal with HUD. J.A. 66
("[I]t is hereby ordered [that] . . . Plaintiff ARC is directed to seek . . .
an administrative review by [HUD] of the decision by [ARHA] to reject
ARC's offer to purchase the [Madden Homes]." Because we conclude
that the district court had no authority to consider matters relating to the
ongoing negotiations between ARC and ARHA, we must vacate this
effort by the district court to bind ARC to pursue a particular course of
action in the course of those negotiations.

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