UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ALEXANDRIA RESIDENT COUNCIL,
INCORPORATED,
Plaintiff-Appellee,

v.

SAMUEL MADDEN HOMES TENANT
COUNCIL, a/k/a Samuel Madden
                                                       No. 97-2501
Homes Cooperative, Incorporated,
Defendant-Appellant,

and

ALEXANDRIA REDEVELOPMENT &
HOUSING AUTHORITY,
Defendant.

ALEXANDRIA RESIDENT COUNCIL,
INCORPORATED,
Plaintiff-Appellee,

v.

ALEXANDRIA REDEVELOPMENT &
HOUSING AUTHORITY,
                                                       No. 97-2502
Defendant-Appellant,

and

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

Appeals 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 3, 1998

Decided: July 22, 1998

Before NIEMEYER and HAMILTON, Circuit Judges, and
FABER, United States District Judge for the
Southern District of West Virginia, sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Horace McClerkin, Alexandria, Virginia; Michael Jay
Weiser, Alexandria, Virginia, for Appellants. Paul Anthony Fiscella,
Alexandria, Virginia, for Appellee. ON BRIEF: Victor M. Glasberg,
Alexandria, Virginia, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

This case involves a turf war between two "resident councils," each
purporting to represent tenants of a public housing project in Alexan-
dria, Virginia, the Samuel Madden Downtown Homes (the Downtown
Homes), which is scheduled to be demolished. After Appellant Alex-
andria Redevelopment and Housing Authority (ARHA), the public
housing authority for the City of Alexandria, offered to allow Appel-
lant Samuel Madden Homes Tenant Council (SMHTC) to purchase
the Downtown Homes pursuant to 42 U.S.C. § 1437p(b) and 24
C.F.R. § 970.13, Appellee Alexandria Resident Council, Inc. (ARC)

                    2
sued for a declaration that ARC was the entity entitled to receive an
offer of first refusal to purchase the Downtown Homes. ARHA and
SMHTC are appealing from the district court's grant of ARC's
motion for summary judgment, and from the district court's denial of
SMHTC's motions to dismiss under Federal Rule of Civil Procedure
12(b)(6) and for relief from judgment under Federal Rule of Civil
Procedure 60(b)(6). We affirm.

I

The housing project at issue in this case is a complex called the
Samuel Madden Homes, a 166-unit brick townhouse development in
Old Town Alexandria. ARHA owns and manages the complex, and
leases the units at reduced rates to eligible low-income persons, and
receives rent subsidies from HUD. This action involves a 100-unit
portion of the Samuel Madden Homes known as the"Downtown
Homes" which ARHA has determined should be demolished.1

When a local housing authority (HA) wishes to sell, demolish or
otherwise dispose of a public housing project, the HA must apply to
the Secretary of HUD for approval. See 42 U.S.C. § 1437p. To
receive approval, the HA is required, inter alia , to consult with the
tenants and resident councils that will be affected by the demolition
or disposition, and to give the resident council of the project the
opportunity to purchase the project. See 42 U.S.C. § 1437p(b)(1); 24
C.F.R. § 970.13. If the affected housing project does not have an
existing resident council, the regulations require the HA to make rea-
sonable efforts to inform the residents of their opportunity to organize
and purchase the property. See 24 C.F.R.§ 970.13(b).

Resident councils2 are organizations comprised of the residents of
public housing projects, and are intended to work with the local HA
to help create a positive living environment for public housing resi-
_________________________________________________________________
1 The other portion of the Samuel Madden Homes, which is not set for
demolition and is not at issue in this case, consists of sixty-six units some
three blocks from the Downtown Homes and is known as the "Uptown
Homes."
2 The terms "resident council" and "tenant council" are equivalents and
may be used interchangeably. See 24 C.F.R.§ 964.3(e).

                    3
dents. See generally 24 C.F.R. Part 964. The HUD regulations define
two types of resident councils: (1) the "jurisdiction-wide" or "HA-
wide" resident council, which represents the interests of all residents
residing under an HA's jurisdiction, see 24 C.F.R. § 964.105; and (2)
the "local" resident council, the purpose of which is to improve the
quality of life and resident satisfaction and sponsor self-help initia-
tives to enable residents of a complex to create a positive living envi-
ronment, see 24 C.F.R. § 964.100. The role of the HA-wide council
is to advise the HA in all areas of public housing operations, includ-
ing but not limited to occupancy, management, maintenance, security,
resident training and employment, social services and modernization
priorities. See 24 C.F.R. § 964.105(b). Local resident councils, on the
other hand, represent residents in a local housing community,
although the definition of a local resident council is quite loose. See
24 C.F.R. § 964.115(a) (stating that a local resident council can repre-
sent residents residing in scattered site buildings, areas of contiguous
row houses, in one or more contiguous buildings, in a development,
or in a combination of these buildings or developments).

ARC is a resident council that represents public housing residents
throughout Alexandria. ARC was formed in 1988 to represent all of
Alexandria's public housing tenants, except for those at the Ladrey
Seniors Highrise (Ladrey) who were already represented by the
Ladrey Advisory Council (LAC).3 ARC's articles of incorporation
and by-laws establish a five-member board of directors that is elected
by the housing projects' residents for three-year terms. The articles
and by-laws also provide for the recall of board members by a major-
ity vote of residents eligible to vote. Prior to the formation of SMHTC
described below, there were no other resident councils in existence in
Alexandria besides ARC and LAC.

Since its formation, ARC has acted as the local resident council for
all housing projects in Alexandria except Ladrey. In this capacity,
ARC has conducted self-help programs such as crime patrols, anti-
drug sit-ins, anti-loitering campaigns, prayer vigils, cookouts and
_________________________________________________________________
3 The record indicates that ARHA has 900 public housing units in
Alexandria, of which 200 are represented by LAC. That means, of
course, that ARC represents 700 units, 100 of which are in the Down-
town Homes.

                    4
community days. However, because ARC represents the vast majority
of public housing residents in Alexandria, ARC also has attributes of,
and has acted as, the HA-wide resident council. In this capacity, ARC
has worked with ARHA to obtain annual inspections and has held
periodic meetings with ARHA regarding maintenance. As a result,
ARC appears to have acted simultaneously as both an HA-wide resi-
dent council and a local resident council.

For nearly ten years, ARHA has continually recognized and treated
ARC as the local resident council representing the Downtown Homes.
ARHA has provided ARC with a vacant unit in the Samuel Madden
Homes for use as an office, and has always provided ARC with per-
unit funding that included the Downtown Homes. Moreover, in 1989,
ARHA entered into a "Cooperation Agreement" with ARC that
explicitly identified ARC as the "officially recognized resident orga-
nization." (J.A. 172). In 1991, ARHA and ARC entered into a Memo-
randum of Understanding that set forth the terms of their partnership
agreement regarding the provision of programs and services to the
public housing residents ARC represents. That Memorandum of
Understanding was only the first of several such agreements, the lat-
est one having been concluded on December 17, 1996. This latest
Memorandum of Understanding established as one of its five "goals"
"[t]o make available to ARC (in accordance with HUD's regulations
when pre-existing conditions provide for the sale of any ARHA prop-
erty, first right of refusal to purchase." (J.A. 21) (unmatched parenthe-
ses in original).

In 1994, ARHA convened a task force to study the options regard-
ing the "redevelopment" or "rehabilitation" of the Downtown Homes.
"Redevelopment" is a euphemism which implies that the housing
complex will be destroyed or otherwise converted to non-public hous-
ing, whereas "rehabilitation" implies that the complex will be remod-
eled. In this context, the residents of a "redeveloped" public housing
project are displaced, while residents of a "rehabilitated" complex
typically return to their homes once the remodeling is completed.
ARC favored rehabilitating the Downtown Homes, but the task force
was divided. On March 25, 1996, ARHA voted to redevelop the
Downtown Homes.

Despite having already recognized ARC as the resident council
representing the Downtown Homes, on August 15, 1996, ARHA

                     5
issued a "Notice of Opportunity to Organize" to the residents of the
Downtown Homes, stating that "[b]ecause ARC represents all ARHA
public housing residents, ARC does not qualify as the resident organi-
zation representing [Downtown Homes] residents." (J.A. 209). On
September 20, 1996, five residents of the Downtown Homes formed
the Samuel Madden Homes Cooperative, Inc., specifically for the pur-
pose of organizing an attempt to buy the Downtown Homes. The
newly-formed group claimed to represent a majority of the Down-
town Homes residents. ARC, however, also claimed to represent a
majority of the Downtown Homes residents, and advised ARHA in
writing of its intention to exercise its right of first refusal to purchase
the homes.

ARHA then attempted to verify which organization held the sup-
port of a majority of Downtown Homes residents. ARHA found that
each organization listed in support of its representation thirty-seven
residents' names that also appeared on the other organization's list.
After those thirty-seven names were stricken from the lists, neither
organization held a majority. ARHA indicated it would seek guidance
from HUD as to which organization represented the Downtown
Homes.

The parties dispute what recommendation ARHA received, but
ARHA subsequently notified both ARC and the Samuel Madden
Homes Cooperative by letter that ARHA would recognize neither
organization as the resident council for the Downtown Homes
because neither group represented a majority of the Downtown
Homes' residents. The letter concluded that the best course was for
the Samuel Madden residents to represent themselves by forming
their own resident council.

On February 26, 1997, ARHA sent a letter to the Downtown
Homes residents urging them to form their own resident council. That
same day, ARHA notified the Downtown Homes residents that an
election of officers for a new resident council would take place on
March 31, 1997. At the election, the same five residents who had
formed the Samuel Madden Homes Cooperative formed SMHTC and
elected each other as SMHTC's officers.4 On April 18, 1997, ARHA
_________________________________________________________________
4 There is no evidence to indicate that anyone other than these five resi-
dents voted in this election.

                     6
issued to SMHTC a notice of opportunity to purchase the Downtown
Homes. ARHA did not issue such a notice to ARC.

ARC filed this action against ARHA in the United States District
Court for the Eastern District of Virginia on March 27, 1997, alleging,
pursuant to 42 U.S.C. § 1983, that ARHA's refusal to give ARC the
opportunity to buy the Downtown Homes was a violation of its mem-
bers' legal rights under 42 U.S.C. § 1437p(b) and 24 C.F.R. § 970.13,
and a breach of the latest Memorandum of Understanding formed
between ARC and ARHA. Specifically, the complaint alleged that
ARC was entitled under contract, federal statute and HUD regulations
to receive an offer of first refusal to purchase the Downtown Homes.
The complaint sought, among other related relief, a declaration that
ARC was the recognized and duly-elected resident council for the
Downtown Homes, entitled to receive the right of first refusal.

On April 28, 1997, SMHTC filed a motion to intervene as a party
defendant, which the district court granted on May 16, 1997. On July
17, 1997, ARC filed a motion for summary judgment. On August 8,
1997, the district court heard oral argument on the motion for sum-
mary judgment and took the matter under advisement. On August 28,
1997, SMHTC filed a motion to dismiss the action pursuant to Fed-
eral Rule of Civil Procedure 12(b)(6), on the grounds that (1) the
action was equitably moot since ARHA had already offered the
Downtown Homes to SMHTC, and (2) ARC was not entitled to pur-
chase the Downtown Homes because ARC was not a validly orga-
nized resident council under the regulations.

The parties strenuously disagreed on ARC's proper classification.
ARHA and SMHTC argued that, because ARC represents the vast
majority of all public housing residents in Alexandria, ARC must be
considered to be an HA-wide resident council. According to ARHA
and SMHTC, under 42 U.S.C. § 1437p(b)(1) and 24 C.F.R. § 970.13,
HA-wide councils such as ARC are not entitled to receive first refusal
offers to purchase housing units slated for demolition or disposition.5
_________________________________________________________________
5 Section 1437p of 42 U.S.C. provides, in pertinent part:

          The Secretary may not approve an application [to dispose of a
          public housing project] unless--

                    7
ARC, on the other hand, argued it is merely a local resident council
that happens to represent several housing complexes. According to
ARC, it cannot be considered to be an HA-wide resident council
because it does not represent all public housing units in Alexandria.

In a published Memorandum Opinion and Order dated September
24, 1997, the district court granted ARC's motion for summary judg-
ment and denied SMHTC's motion to dismiss. See Alexandria Resi-
dent Council v. Alexandria Redevelopment & Hous. Auth., 979 F.
_________________________________________________________________

           (1) the application from the public housing agency has
          been developed in consultation with tenants and tenant coun-
          cils, if any, who will be affected by the demolition or dispo-
          sition, and the tenant councils . . . of the project or portion
          of the project covered by the application, if any, have been
          given appropriate opportunities to purchase the project or
          portion of the project covered by the application . . . .

42 U.S.C. § 1437p(b)(1). Section 970.13 of 24 C.F.R. provides, in perti-
nent part:

          (b) Opportunity for residents to organize. Where the affected
          development does not have an existing resident council . . . at the
          time of the [public housing authority's] proposal to demolish or
          dispose of the development or a portion of the development, the
          [public housing authority] shall make a reasonable effort to
          inform residents of the development of the opportunity to orga-
          nize and purchase the property proposed for demolition or dispo-
          sition. . . .

          (c) Established Organizations. Where there are duly formed
          resident councils . . . at the affected development, the [public
          housing authority] shall follow the procedures beginning in para-
          graph (d) of this section. . . .

          (d) Offer of sale to resident organizations . (1) . . . The [public
          housing authority] must offer to sell the property proposed for
          demolition or disposition to . . . the resident council . . . of the
          affected development under at least as favorable terms and con-
          ditions as the [public housing authority] would offer it for sale
          to another purchaser . . . .

24 C.F.R. § 970.13(b), (c), (d)(1).

                    8
Supp. 409, 415-16 (E.D. Va. 1997). In resolving the dispute, the dis-
trict court thoroughly examined the requirements of a local resident
council as set forth in 24 C.F.R. § 964.115 and various other regula-
tory provisions. See id. at 412-415. The district court stated it was
undisputed that ARC met all of these requirements, and listed many
of the activities in which ARC was involved as a resident council. See
id. at 413. The district court accepted ARC's argument that ARC can-
not be an HA-wide resident council because it does not represent
Ladrey. See id. at 414. The district court instead found ARC to be a
local resident council entitled to the right of first refusal to purchase
the Downtown Homes. See id. at 415. The district court also noted
that ARHA had officially recognized ARC as the resident council,
and had never officially withdrawn that recognition. The district court
held that, under 24 C.F.R. § 964.18(a)(7), ARHA was prohibited from
recognizing a competing resident council once a duly-elected resident
council had been established. See id. Finally, the district court found
that, even if ARC were an HA-wide resident organization, the latest
Memorandum of Understanding comprised a secondary, contractual
basis on which to find that ARC was entitled to a right of first refusal
to purchase the Downtown Homes. See id.

The district court also denied SMHTC's motion to dismiss. See id.
at 415-16. The district court reiterated its finding that ARC was a
properly organized resident council under the regulations, and
rejected ARHA and SMHTC's equitable mootness argument because
the regulations prohibited ARHA from recognizing a competing resi-
dent council. See id. at 416. The district court therefore ordered that:
(1) ARHA recognize ARC as the duly-elected resident council for the
Downtown Homes; (2) ARHA be enjoined from selling the Down-
town Homes without giving ARC the right of first refusal to purchase
the property; (3) ARHA perform its obligations under the Memoran-
dum of Understanding; and (4) costs and reasonable attorneys' fees
be paid to ARC. See id.

On October 20, 1997, SMHTC filed a motion for relief from judg-
ment pursuant to Federal Rule of Civil Procedure 60(b)(6). In support
of its motion, SMHTC relied on a letter from HUD Assistant General
Counsel Michael Reardon that SMHTC argued supported ARHA and
SMHTC's position that ARC could not receive the offer of first
refusal to purchase the Downtown Homes. The district court rejected

                    9
the letter in favor of its own interpretation of the statute and regula-
tions, and denied SMHTC's motion to dismiss.

ARHA and SMHTC filed timely notices of appeal from both the
district court's orders.

II

The district court granted ARC's motion for summary judgment,
and denied ARHA and SMHTC's Rule 12(b)(6) and 60(b)(6)
motions, based on three alternative grounds: (1) ARC was the resident
council of the Downtown Homes under the statute and applicable reg-
ulations entitled to receive the right of first refusal to purchase the
Downtown Homes; (2) under 24 C.F.R. § 964.18(a)(7), ARHA is pro-
hibited from recognizing a resident council other than ARC; and (3)
the latest Memorandum of Understanding contractually gives ARC
the right of first refusal to purchase the Downtown Homes. See
Alexandria Resident Council, 979 F. Supp. at 414-15. Because we
conclude that 24 C.F.R. § 964.18(a)(7) directly applies, we affirm the
district court's judgment in favor of ARC.

We review de novo an order of the district court granting summary
judgment. See Higgins v. E.I. DuPont de Nemours & Co., 863 F.2d
1162, 1167 (4th Cir. 1988). Summary judgment is appropriate when
the pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, show that there is no genu-
ine issue as to any material fact and that the moving party is entitled
to judgment as a matter of law. See Fed. R. Civ. P. 56(c). We also
review de novo the denial of a motion to dismiss for failure to state
a claim under Federal Rule of Civil Procedure 12(b)(6). See Martin
Marietta Corp. v. International Telecomm. Satellite Org., 991 F.2d
94, 97 (4th Cir. 1992). Only if "it appears beyond doubt that the plain-
tiff can prove no set of facts in support of his claim which would enti-
tle him to relief" will we affirm such a dismissal. Conley v. Gibson,
355 U.S. 41, 45-46 (1957). Finally, we review an order denying a
Rule 60(b)(6) motion for abuse of discretion. See Werner v. Carbo,
731 F.2d 204, 206 (4th Cir. 1984).

Section 964.18(a)(7) of 24 C.F.R. states:

                     10
          In no event shall HUD or a HA recognize a competing resi-
          dent council once a duly elected resident council has been
          established. Any funding of resident activities and resident
          input into decisions concerning public housing operations
          shall be made only through the officially recognized resident
          council.

24 C.F.R. § 964.18(a)(7). The record is clear that, for nearly ten years,
ARHA recognized ARC as the official resident council representing
the Downtown Homes. Neither ARHA nor SMHTC has asserted that
ARHA ever revoked its recognition of ARC as the resident council
for the Downtown Homes, nor have they directed us to any law that
would authorize ARHA to revoke that recognition. 6 Instead, ARHA
and SMHTC argue that ARC is not a duly-formed resident council
under the regulations. We disagree.

To receive official recognition from HUD and/or the local HA, a
resident council must consist of persons residing in public housing
and represent residents residing (1) in scattered site buildings; (2) in
areas of contiguous row houses; (3) in one or more contiguous build-
ings; (4) in a development; or (5) in a combination of these buildings
or developments. See 24 C.F.R. § 964.115(a). In addition, the resident
council must meet the following requirements:7

            (b) It must adopt written procedures such as by-laws, or
           a constitution which provides for the election of residents to
_________________________________________________________________
6 As the district court's opinion implied, see Alexandria Resident
Council, 979 F. Supp. at 415, and as our extensive research has con-
firmed, the only time an HA may withdraw recognition under the regula-
tions is when HUD requires the HA to withdraw recognition because the
resident council either failed to satisfy HUD's minimum requirements
for fair and frequent elections, or failed to follow its own established
election procedures. See 24 C.F.R. § 964.130(b). However, ARHA and
SMHTC have not alleged in this case that ARC's election procedures
were in any way flawed.
7 In addition to the requirements listed below, mandatory election pro-
cedures are set forth in 24 C.F.R. § 964.130. However, as we noted
above, neither ARHA nor SMHTC have alleged any improprieties in any
of ARC's elections.

                    11
          the governing board by the voting membership of the resi-
          dents residing in public housing, described in paragraph (b)
          of this section, on a regular basis but at least once every
          three (3) years. The written procedures must provide for the
          recall of the resident board by the voting membership. These
          provisions shall allow for a petition or other expression of
          the voting membership's desire for a recall election, and set
          the number of percentage of voting membership
          ("threshold") who must be in agreement in order to hold a
          recall election. This threshold shall not be less than 10 per-
          cent of the voting membership.

           (c) It must have a democratically elected governing board
          that is elected by the voting membership. At a minimum, the
          governing board should consist of five (5) elected board
          members.

           The voting membership must consist of heads of house-
          holds (any age) and other residents at least 18 years of age
          or older and whose name appears on a lease for the unit in
          the public housing that the resident council represents.

24 C.F.R. § 964.115(b), (c).

The record is clear that ARC satisfies these requirements. First,
ARC represents scattered-site housing developments throughout
Alexandria as permitted by 24 C.F.R. § 964.115(a)(5). Second,
ARC's articles of incorporation and by-laws establish a five-member
board of directors. And third, the board of directors is democratically
elected or recalled by the residents of the housing projects ARC rep-
resents who are eligible to vote. Thus, ARC was entitled to recogni-
tion by ARHA as the duly-elected resident council representing the
Downtown Homes, see 24 C.F.R. § 964.18(a) ("A HA shall officially
recognize a duly elected resident council as the sole representative of
the residents it purports to represent, and support its tenant participa-
tion activities."), and over the past decade ARHA has repeatedly rec-
ognized ARC as such. Section 964.18(a)(7) is clear that ARHA may
not now recognize another resident council that purports to represent
the Downtown Homes. Consequently, we conclude that ARC is the

                     12
only organization that may receive the offer of first refusal to pur-
chase the Downtown Homes.

III

For the reasons stated above, the judgment of the district court is
hereby

AFFIRMED.

                     13
