Full opinion text
OPINION AND ORDER EDWARD R. BECKER, District Judge. I. Preliminary Statement A. Legal Background The Economic Opportunity Act of 1964 (Act) authorizes federal grants for the operation of Community Action Programs, including Comprehensive Health Services programs. This case involves one of these Community Action Programs. In 1967, a Philadelphia city ordinance created the Philadelphia Anti-Poverty Action Commission (PAAC) to administer and coordinate community action programs within the city. PAAC is a “community action agency” (CAA) within the definition of the Act. .The same year, funded by a grant from the federal Office of Economic Opportunity, OEO, PAAC, and Temple University of the Commonwealth System of Higher Education (Temple) established the Comprehensive Group Health Services Center at 2589 German-town Avenue, Philadelphia, and the West Nieetown-Tioga Neighborhood Family Health Center at 3450 N. 17th Street, Philadelphia, to provide comprehensive health services to inhabitants of the Hartranft, West Nicetown, and Tioga sections of the city. PAAC is the recipient of the grant for the funding of the centers and distributes the funds to Temple, which, as the so-called “delegate agency,” administers the program and provides the bulk of the necessary technical resources. Noting that the causes of proverty include lack of education, poor health, absence of a marketable skill, and unstable family life, the Act sets in motion a comprehensive effort to attack the causes of poverty by coordinating the antipoverty efforts of federal, state, and local governmental agencies and private non-profit agencies, by using innovative techniques in the development and implementation of programs, and by requiring the active involvement of the people to be served. Central to the structure of the Act is the notion of “community action,” the belief that local citizens understand their communities best and that they will provide leadership by developing and implementing local programs. The concept of active involvement of the people to be served is one of the most important, as well as innovative, features of the Act. The purpose of the Congressional requirement of citizen participation is explained in the first section of Title II of the Act: [T]o promote ... (4) the development and implementation of all programs and projects designed to serve the poor or low-income areas with the maximum feasible participation of residents of the areas and members of the groups served, so as to best stimulate and take full advantage of capabilities for self-advancement and assure that those programs and projects are otherwise meaningful to and widely utilized by their intended beneficiaries . . . . ” 42 U.S.C. § 2781(a)(4) (emphasis added). With respect to Comprehensive Health Services programs specifically, the Act provides that they shall include programs “designed . . . (ii) to assure that . . . services . are furnished in a manner most responsive to [the] needs [of low income residents of the target areas] and with their participation . . . 42 U. S.C. § 2809(a)(4)(A) (emphasis added). As will be seen, the notion of maximum feasible community participation is the touchstone of this case, which raises questions of the role of a community participation component of a comprehensive health services program and of the manner in which such a component may legally be altered. The Act itself does not amplify the community participation concept. The meaning of that concept is, however, fleshed out in the OEO Regulations on community action programs in general, 45 C.F.R. § 1060 et seq. (Regulations), and in the OEO Guidelines (Guidelines) governing comprehensive health services programs. We will review the statutory and quasi-statutory law before setting forth our findings of fact (this is a nonjury case) to aid in framing the issues and viewing them in an appropriate perspective. The Regulations place a gloss upon the maximum feasible community participation language of the statute by requiring “meaningful” participation in all programs (see note 3) funded with community action moneys. The Regulations require, inter alia, that: (1) all funding applications explicitly indicate a course of action which will lead to improvement in the involvement of poor people in the community action programs; (2) all community action programs provide guidance, training, and technical assistance to poor people so that their involvement may be effective; (3) the poor be provided employment in all phases of community action programs; (4) delegate agencies involve poor people in the planning, operation, and evaluation of delegated programs, by establishing a program advisory committee at least half of whose members are democratically selected representatives of the poor served by the program. The program advisory committees, in addition to their program responsibilities, must have a strong voice in the development of personnel policies. The Guidelines also deal directly with the effectuation of the community involvement concept. The Guidelines mandate that “neighborhood residents must share with the operating organization the responsibility for policy making” so as to maximize responsiveness to the community’s needs. The specific means of giving a policymaking voice to neigh- borhood residents are detailed in the Guidelines: The Neighborhood Health Council shall participate in such activities as the development and review of applications for OEO assistance, selection of the project director, the location and hours of the Center’s services, the development of employment policies and selection of staff personnel, the establishment of program priorities, the establishment of eligibility criteria and fee schedules, the selection of neighborhood residents as trainees, the evaluation of suggestions and complaints from neighborhood residents, the development of methods for increasing neighborhood participation, the recruitment of volunteers, the strengthening of relationships with other community groups, and other matters relating to project implementation and .improvement, B. The Dispute in This Case The plaintiffs, Comprehensive Group Health Services Board of Directors (CGHS) and Health Oriented Consumers, Inc. (HOC), successor to the West Nieetown-Tioga Neighborhood Family Health Center Board of Directors (WNT) (collectively “plaintiff Boards”), are the community action program advisory boards that were established to provide the required community participation in the comprehensive health services programs involved in this case. CGHS was the advisory board for the Hartranft center at 2539 German-town Avenue, and HOC was the advisory board for the West Nicetown-Tioga center at 3450 N. 17th Street. In the spring of 1970, after the plaintiff Boards had been in operation for several years, PAAC and Temple determined that the two health centers should merge and accordingly be served by a single program advisory board. When the plaintiff Boards failed to work out a merger, they were removed by the defendants and replaced by a single newly created program advisory board, which plaintiffs consider a mere rubber stamp for the program decisions of PAAC and Temple. After being displaced, plaintiff Boards brought this lawsuit for declaratory and injunctive relief. They ask that we permanently enjoin defendants from operating the centers without recognizing plaintiffs as, the community participation components thereof and from maintaining a new board without plaintiffs’ participation therein, and that we declare that defendants acted illegally in purporting to dissolve and replace plaintiff Boards. . The complaint also alleges that the defendants seized plaintiffs’ files and denied them access to the centers, and seeks appropriate relief. Plaintiffs also ask that we declare that defendants have violated the Act, the Regulations, and the Guidelines by unduly narrowing the scope of plaintiffs’ participation in program planning to exclude them from the preparation of the budget, the decision to undertake a health maintenance program, and the selection and removal of the project director. The complaint includes a general allegation that defendants have refused “to permit plaintiffs to participate in policy decisions concerning the centers.” Samuel L. Evans (Evans), PAAC’s Chairman, and Melvin L. Hardy (Hardy), PAAC’s Executive Director, are named as defendants because they played major roles in the events giving rise to the lawsuit. This litigation does not involve issues of any details of the actual operation of the health centers, and the delivery of health care to the community is not affected by this case. The dominant issue in the case is that of plaintiffs’ displacement. The nub of their position on that issue is their assertion that an established community participation component may be changed only with the full participation of the existing community board and in a manner that comports with standards of fair play, good faith negotiation, and due process of law, with the board participating meaningfully and effectively throughout the entire decision-making process. They submit that such did not occur here. In plaintiffs’ view, if the delegate agency or grantee agency have different views from the plaintiff Boards on a subject such as merger, they are obligated to communicate those differences to the boards and to negotiate the differences in good faith. Plaintiffs contend that instead of doing that, the delegate and grantee agencies simply ordered the plaintiff Boards to merge, and then, when the command was not quickly enough implemented, proceeded summarily to exclude the community boards from the decision-making process and from the program, in violation of the Act. In essence, as plaintiffs see it, in order to represent the community effectively, the community boards must be autonomous, not dependent for their existence on the delegate and grantee agencies. In terms of the other issue in the case, the general role of advisory boards vis-a-vis the Centers, plaintiffs contend that they were denied effective participation in important facets of policy-making and were not permitted to act as a community check and balance as required by the Act. Needless to say, Temple and PAAC disagree with plaintiffs’ view of the facts. Their position is that they created a unified board only when the foot-dragging and recalcitrance of the plaintiff Boards, each seeking to preserve its status and private domain, became intolerable. The defendants also disagree with plaintiffs on the law. Temple contends that the program advisory boards are the mere creations of the grantee and delegate agencies, who therefore have' plenary power to remove the boards subject only to the limitations of good faith and continued community participation. PAAC goes further and contends that participation of the program advisory boards is unnecessary because the maximum feasible community participation requirement was satisfied by the very presence of PAAC in the picture. And both Temple and PAAC view the Boards’ roles in policy matters in general more narrowly than do the plaintiffs. This is not the first case arising in this Circuit addressing the question of the validity of change in a community participation component of a federally funded program. Although in a different context (the Metropolitan Development Act of 1966, better known as the Model Cities Act) and under different operative facts, the United States Court of Appeals for the Third Circuit has written on three occasions in this general area, thereby establishing some important benchmarks. The three opinions are all in the same case: North City Area-Wide Council, Inc. v. Romney, 428 F.2d 754 (3d Cir. 1970); 456 F.2d 811 (3d Cir.), cert. denied, 406 U.S. 963, 92 S.Ct. 2063, 32 L.Ed.2d 351 (1972); 469 F.2d 1326 (3d Cir. 1973) (hereinafter “North City I, II, and III”). Regrettably there is no reported authority on the other points in the case and indeed there is precious little authority in any aspect of this nascent field of law. Indeed, this is one of the few cases under the Act developed on a full record as opposed to a preliminary stage of the proceedings. With the benefit of the foregoing background, we turn to our findings of fact. II. Findings of Fact A. Identity of the Parties and Formation of the Programs Defendant Temple is a Pennsylvania non-profit corporation and a state-related institution of the Commonwealth of Pennsylvania. Defendant City of Philadelphia (City) is a municipal corporation. Defendant PAAC is an agency of the City created by City ordinance to administer federal poverty programs in Philadelphia and to provide certain services in connection therewith. It is a Community Action Agency within the terms of title II of the Economic Opportunity Act of 1964, 42 U.S.C. § 2790(a). At all times relevant hereto, defendant Evans was the chairman of PAAC and defendant Hardy was its executive director. In mid-1967, in furtherance of the Comprehensive Health Services Program (Program), a community action program authorized by OEO pursuant to title II of the Act, 42 U.S.C. § 2790(a), PAAC and Temple established both the Comprehensive Group Health Services Center (CGHS Center) at 2539 German-town Avenue, Philadelphia, and the West Nicetown-Tioga Neighborhood Family Health Center (WNT Center) at 3450 N. 17th Street, Philadelphia. What was thus created was a single program, operating through two centers, and providing a full range of health services to the Hartranft and the West Nicetown-Tioga sections of North Philadelphia respectively. Available services included medical care, dental care, preventive health services, pharmaceutical services, health out-reach services in the community, and health-related social services. On October 20, 1967, PAAC, by contract and in accordance with law, delegated to Temple the function of administering the Comprehensive Health Services Program. Temple continues to be PAAC’s delegate agency for this community action program. PAAC serves as grantee for the funding for the program and distributes the funds to Temple. Funding, initially provided by OEO, was transferred to HEW on December 14, 1970, pursuant to an Executive Directive and a Memorandum of Understanding executed on November 2, 1970, between the Director of OEO and the Secretary of HEW. The last grant for the Comprehensive Group Health Services program prior to trial was $5,180,323. In 1967 PAAC and Temple established an advisory board for each center to assist in the planning, conduct, and evaluation of the Comprehensive Health Service^ Program and to provide community participation. B. The CGHS Board When it was established, the advisory board for the CGHS Center was an unincorporated association with offices at 2539 Germantown Avenue, Philadelphia, and was named Comprehensive Group Health Services Center Advisory Board. In bylaws adopted November 6, 1969, it changed its name to Comprehensive Group Health Services Board of Directors. Plaintiff CGHS was actually first formed as the Board for the Children and Youth Program at the St. Christopher’s Hospital one year before Temple established the health centers. The CGHS board resulted from a series of community meetings, subsequent to which an election was held to choose community representatives to serve on the board. As determined by PAAC and Temple, the elected community people comprised one third of the CGHS board,, one third were appointed by the hospital, and the remaining third by the Area D Community Action Council. Plaintiff CGHS also provided in its bylaws that one third of the Board would be elected directly by community residents. The CGHS board comprises a cross section of the community and includes school-community coordinators, a housing trainee for the Model Cities Housing Information Center, a worker in Senior Wheels East (a Model Cities senior citizens’ program), a taxi driver, a minister, a nun, a businesswoman, and the Deputy Commissioner of Health of the City of Philadelphia. Members of the CGHS board are also associated with numerous other community groups. The last election for members of plaintiff CGHS was held on March 4, 1971, at the health center at 2539 Germantown Avenue. A description of the manner in which it was conducted is instructive. Approximately three weeks prior to the election, various members of CGHS working with community volunteers from the Hartranft Community Corporation distributed some 2,000 flyers written in English and Spanish door-to-door in the target area served by the CGHS Center. In addition, several posters giving information about the election were displayed in the health center, in the offices of the Council of Spanish-Speaking Organizations, at the Hartranft Community Corporation, and at the Holy Cross Church. The flyers gave notice of the election and invited each prospective candidate to submit a petition with ten signatures supporting his candidacy by February 26, 1971. On February 27, 1971, a list of the ten candidates submitting petitions was prepared by the Election Committee of CGHS. Flyers containing this list and giving the time and place of the election were thereupon distributed door-to-door throughout the target area of the health center. To vote in the election, a voter had to be at least eighteen years old and reside in the target area of the center. Each voter was asked to select five candidates from the list of ten. A total of 126 people voted in the election. The five candidates receiving the most votes were selected. They were Lucy Smith, Oscar Shambourger, Margaret Jones, Sarah Murdock, and Joel Beamon. C. The HOC Board The Board of Directors of the WNT center was originally appointed by Temple and PAAC and community organizations. A broad spectrum of people comprised the WNT board, including a clergyman, an attorney, an equal opportunities specialist with the United States Department of Housing and Urban Development, physicians, school coordinators, and a part-time reading aide with the Philadelphia public schools. Most members of the board were not professionals. When it was established, the advisory board for the West Nicetown-Tioga Neighborhood Family Health Center was an unincorporated association with offices at 3450 N. 17th Street, Philadelphia, and was named the West Nicetown-Tioga Neighborhood Family Health Center Advisory Council. In January 1968 it changed its name to West Nicetown-Tioga Neighborhood Family Health Center Board of Directors. On April 20, 1970, it incorporated as Health Oriented Consumers, Inc. (HOC), a Pennsylvania non-profit corporation. D. The Boards in Operation: the Roles Which They Assumed; the Roles Which They Claim Were Denied Them; and Their Relationship with Defendants The primary concern of members of plaintiff boards was the delivery of health services to the community. Although they were not involved in the day-to-day operation of the centers, Board members sought to help form program policy. Plaintiff boards informed their respective communities of the services available at the centers and arranged special programs for members of the community. Through committees they actively and vigorously recruited and screened applicants for employment at the centers, and they were constantly concerned about the upgrading of status and salary of community people employed at the centers. They also recommended the establishment of grievance procedures for the staffs at the centers. HOC recommended hours that the WNT Center was to be open. CGHS was influential in establishing night hours at the centers and resisted an attempt by some doctors employed at its Center to shorten evening and weekend hours, because the Board knew that many community residents could come to the Center only at these times. Plaintiff boards also set priorities for which types of patients should be treated. The foregoing is not intended as a catalogue of the activities of the plaintiff boards, for they performed many functions in the community, and we were impressed with their dedication. Indeed, in their refunding request for October 1, 1970, to September 30, 1971, Temple and PAAC represented to OEO that the functions of the CGHS and WNT advisory boards included, but were not limited to the following; 1. To advise on ways of accomplishing and evaluating the delivery of services and optimum use of the Center. 2. To make recommendations for improvements of the delivery of services. 3. To interpret services of the center to the community. 4. To hear views, complaints and ideas of people in the community in periodic public meetings, as well as informally, and to relay these to the center staff. 5. To assist in recruitment of staff, particularly with regard to the neighborhood health workers and to other staff from the neighborhood, and to serve as a screening . function of all new hires prior to their appointment. 6. To participate in the selection of the Center Director. 7. To review and approve all fiscal transactions of Board members. 8. To participate in the development of the Program budget and approve the budget when finalized. Although this categorization is impressive, one of the wellsprings of this lawsuit is the feeling of the plaintiff Boards that they were not accorded a role commensurate either with the refunding request presentation or with the statutory command of maximum feasible community participation. It will be helpful to discuss the role dispute in two stages, first in general terms and then with specifics. In general terms, we find that plaintiff Boards were not at all certain where authority in the program lay, and were confused as to guidelines and as to their own roles. On June 22, 1970, Harvey N. Schmidt, now a Common Pleas Judge but then a member of HOC and an attorney, wrote to Evans: I am now deeply concerned with the Board’s exact function — what is its authority, what guidelines control it, etc.? It appears to me from the time that I have been on the Board and from the activities of Temple Hospital itself, that the Board is really a meaningless appendage to the whole program, and, if this is so, I certainly would not want to be any part of it. While the plaintiff Boards constantly sought clarification of the division between administration and policy, the division was never definitively established. The most notable and continuing source of friction between the plaintiff Boards and Temple and PAAC over the plaintiffs’ role involved the Program Development and Evaluation unit (P. D. & E.) created by Temple to oversee the total health services program. Members of plaintiff Boards continuously complained about the P. D. & E. unit. They expressed their concern over the various functions of P. D. & E. and over duplication of services rendered by P. D. & E. and the Boards. They felt that the P. D. & E. unit was top-heavy, resulting in too much expenditure on administration instead of services, and were concerned that they were not permitted to screen prospective P. D. & E. employees. But most of all, plaintiffs saw in P. D. & E. a usurpation of the power that they felt belonged to the Boards. P. D. & E. thus became a symbol of plaintiff Boards’ frustration at their inability to be a partner in controlling the program, rather than a mere community input factor. Turning to specifics, the friction between the plaintiff Boards and Temple and PAAC over the question of role and responsibility manifested itself in a number of areas. Inter alia, the Boards felt that: (1) they were insufficiently involved in the program budget (see pp. 1083-1085 infra); (2) they were denied adequate training to fulfill their roles; (3) they were deprived of input into the process of selecting James N. Snipe as project director of the health services program (see p. 1085 infra), (4) they were not consulted with respect to Snipe’s removal on August 12, 1971; (5) they were not consulted with respect to the appointment of Curtis Owens as acting project director to replace Snipe; (6) many of their recommendations as to Health Center operations were ignored, e. g., the recommendation of HOC that the WNT Center be open on Saturdays; (7) they were largely ignored in connection with the institution of the Health Maintenance Plan, now in operation at the centers, which provides comprehensive free health care for public assistance recipients ; (see note 11); (8) Temple and PAAC wrongfully expropriated certain of their records and files; and (9) they were denied the power to hire and fire center personnel, which they felt (because of representations made by PAAC) that they had. We will presently make findings as to whether the plaintiff Boards were accorded their proper function with respect to the program budget and the selection of the project director. Because it is not necessary to the resolution of the case, we make no findings as to which side was justified with respect to the other differences. As may be surmised from the foregoing, the relationship between the plaintiff Boards and Temple and PAAC was poor, and was pervaded by suspicion and mistrust. On several occasions plaintiffs attempted to bypass the defendants and sought the direct intervention of OEO in the hopes of settling their difficulties. In a letter dated June 29, 1971, to Dr. Leon Cooper, Director of the Comprehensive Health Services Division of OEO in Washington, D. C., Elizabeth J. Wilson, Chairman of HOC’s Board, observed: Neither Temple University nor PAAC has been willing to negotiate an honest relationship with us, and we have been spinning our wheels over many minor problems while we have been rubber-stamping important documents and decisions made by the health providers which we did not understand at the time and have lived to regret. Mrs. Wilson had previously sought Dr. Cooper’s help after appealing to Hardy without receiving satisfaction. Indeed, the attitude which spawned this very lawsuit is articulated in a HOC position paper approved by its Board in November 1971, which asserts that Temple and PAAC set up the plaintiff Boards as “straw boards” and conspired to disband them and replace them with a real “straw board” as soon as the plaintiffs sought to strengthen the program. These findings with respect to the poor relationship between the plaintiff Boards and PAAC and Temple will assume great importance in the merger and displacement issue; indeed, they constitute the proximate background without which these issues cannot be fully understood. A final finding in this area is that on or about August 17, 1971, representatives of Temple and PAAC transferred certain records, files and documents which plaintiffs believed belonged to them from the centers to the Beury Building. Plaintiffs were not consulted prior to the transfer of said property by any representative of Temple and PAAC, and were denied further access to the property except on a limited basis during the course of litigation. E. The Plaintiff Boards’ Involvement in the Program Budget On the subject of the budgets, the plaintiff Boards’ complaints were that (1) they were permitted to see the budgets only after they had been fully prepared; (2) they often did not understand them; (3) they were rushed to approve them; (4) their suggestions for revision were never accepted; (5) certain budgets were submitted to OEO in Washington without their approval; and (6) they did not help put the budget together and could not seem to influence it. Gloria Martin was a former chairman of the Finance Committee of WNT. She testified that: I was involved with the budget in that the budget was brought to us; and we went through the budget and took recommendations back to the Board. We were not involved in the writing up of the entire budget. It was just brought to us for approval or recommendation for approval from the Board. Well, we examined it but we really didn’t help put it together. In other words, it was brought already made up, except for our own Board budget, the West Nieetown-Tioga budget. That was part of the over-all budget. That was the only thing we were involved in. (N.T. 161-63). Mrs. Martin went on: Q. You were involved in preparing the budget for your Board ? A. That was the only thing. Q. And the other part of it related to what? A. The over-all program and the centers. We weren’t allowed to do anything with that — just, you know, scan through it more or less and bring recommendations to the Board. Q. Was it clear when you scanned through it what it meant ? A. No, not all the time. But we couldn’t really change anything. And this is all we could do. Q. Well, when it was unclear did you request any clarification? A. We did but the clarification was unclear also. Q. Did it always come to you in a package form completed? A. We received numerous materials on different forms on how to put it together, but we were never told how to fill out those forms and put it together. Q. How did you receive it? Did you receive it at home ? A. Yes, through the mails, just pieces of materials. Q. Did you as a Board member and the Board as you know it want to influence the budgets in any way ? A. Yes, we did. We wanted to know why certain things were put in; and why certain things were not put in. And we wanted to have something to do with what went in the budget, the over-all budget; especially talking about the West-Nicetown Tioga budget — I am sorry, the West-Nicetown Tioga Center. (N.T. 163-64). In consternation, Mr. Shambourger of CGHS testified: Q. Were budgets submitted to your Board as they were to the West Nieetown-Tioga Board? A. We had a Finance Committee on our Board. And the budget would come completely finished to our Board, to our Finance Committee, which was supposed to look over that and to make changes and then report to the full Board. That was done. They looked over; they made changes; reported to the full Board. And when we got the budget back, it was like it was before when we made the changes. (N.T. 189). Rev. Harris also testified that the Boards were consistently rushed to approve the budgets. This testimony is corroborated by a memorandum concerning the Program Year D budget, October 1, 1970, to September 30, 1971, in which Ronald R. Dobbins, the Director of Administrative Services of the Program and its former Budget Officer, advised that recommended budgets were to be submitted to the Finance Committees of plaintiffs on Monday, June 15, 1970, that the finance committees would have to complete their review by Monday, June 22, 1970, and that each board would take action on proposed budgets on Monday, June 29, 1970. The budget was to be submitted to PAAC for review on Thursday, July 2, 1970, and transmitted by PAAC to OEO in Washington on Friday, July 10, 1970. We credit the testimony of Mrs. Martin, Mr. Shambourger, and Rev. Harris, particularly since the defendants’ evidence does not contradict it. Dobbins was the principal defense witness on this point. At first he seemed to counter the testimony of the plaintiffs by a recitation of the quantum of time he spent reviewing budget matters with the plaintiff Boards. But as his testimony continued, it then appeared that the bulk of this collaboration concerned the Boards’ own budgets, not the centers’ program budgets. And, although Dobbins testified that he was always available to discuss the matter of the program budget with the members of the Board, we find from the evidence that neither he nor anyone else connected with the program took any initiative to do so or made a serious effort to involve the plaintiff Boards in the budgeting of the health services program. F. The Plaintiff Boards' Involvement in the Selection of the Project Director It will be recalled that the Guidelines specifically require community participation in the selection of the project director. The evidence is clear, however, that when James N. Snipe was selected as project director in January 1971, the plaintiff Boards were not consulted at all. Notice oí the Snipe appointment reached the Boards through a letter dated January 12, 1971, in which Charles Howell, then acting vice president of Temple’s Health Sciences Center, simply announced the appointment and asked the written concurrence of the plaintiff Boards. Mrs. Mary Burnett of CGHS testified on the subject as follows: Q. Mrs. Burnett, were you aware when Mr. Snipe was appointed project director ? A. Yes, I was. Q. Was your board as a board consulted or asked to participate in that selection ? A. No. We received a letter that Mr. Snipe was appointed as Project Director. (N.T. 424). We credit this testimony and find that the plaintiff Boards were ignored in the process of selecting Snipe as the Project Director. We also find that plaintiffs were not consulted when Snipe was removed as project director and Curtis Owens appointed as acting project director in his place. Indeed, Evans stated that Snipe’s dismissal “was a matter for PAAC and Temple.” While these latter facts may assume less significance because they occurred in the summer of 1971 at the time that plaintiffs were about to be replaced, they are consistent with the general approach which we find Temple and PAAC took towards the plaintiff Boards, that of keeping them away from the decision-making process within the health program. G. The Matter of Merger: The Replacement of Plaintiffs by a New Single Program Advisory Board and the Reasons for Plaintiffs’ Failure to Merge The fall of 1970 saw the first expression of the view that the plaintiff Boards should merge so as to form a more effective force. At a meeting of the WNT Board on October 20, 1970, James N. Snipe, then assistant project director of the program, recommended such a merger, as he again did in a memorandum dated November 17, 1970, to Arthur D. Nelson, then project director. In the same memorandum, Snipe also expressed the view that full decision-making authority and responsibility should be delegated to a merged board. At a WNT board meeting on November 24, 1970, two types of merger notions were discussed. Some expressed the view that what was in order was the formation of a “super board” over the two boards, but others favored outright merger, with the merged board replacing P. D. & E. in the program. The merger notion received impetus following a December conference in San Antonio, Texas, and in January 1971 CGHS formed a committee to work up a draft of bylaws that would govern a merged board. In the period that followed, most of the discussions between the two Boards related to formation of a “super board.” However, some members of plaintiff Boards were interested in outright merger. These people hoped to strengthen the power of the community representatives in dealing with PAAC and Temple, which were viewed with distrust, and to replace P. D. & E. with the merged board and ultimately assume full control over the program. Temple and PAAC also favored merger, but for quite different reasons. The highest Temple official with responsibility for the program is Dr. Thomas Georges, Associate Vice President of the Temple Health Sciences Center. Dr. Georges, a former Secretary of Health and of Public Welfare of the Commonwealth of Pennsylvania, was appointed to the Board of Directors at WNT in February 1971. Based upon his experience with the program, he felt that a single board would be beneficial because it would increase community participation and would be concerned with the whole program and not just with one of the centers. PAAC chairman Evans believed that a single board would be the best structure in anticipation of a national trend toward multi-county comprehensive health programs. Evans also felt that creation of a single board could affect the use of other federal funds. However, as of mid-March 1971, nothing concrete had developed in connection with the merger situation. By a notice dated March 18, 1971, the members of plaintiff Boards along with the members of the Area B and D CAC’s and representatives of Temple and HEW were summoned by Evans to attend a meeting in the Mayor’s reception room of Philadelphia’s Municipal Services Building on March 23. Evans opened the meeting by announcing that its purpose was to discuss the possibility of merging of the two boards. He described a merger as being consonant with a nationwide movement and important for the establishment of a comprehensive medical services delivery system for Philadelphia. Indeed, Evans touted the comprehensive plan and stressed that merger was a necessary part of its implementation. At first he suggested that merger had already been approved by the Boards, but that suggestion was quickly rejected by several of those present, whose response to Evans’s presentation was far from sanguine. Indeed, a number of those present, including Rev. Robert L. Harris and Mrs. Mary James of the WNT Board and Oscar Shambourger of the CGHS Board, objected sharply to the merger proposal. As the meeting progressed, Evans began to approach the merger decision as a fait accompli: the issue on the floor was not whether there would be a merger, but rather when the merger would take effect. According to Mrs. Neely of WNT, Evans simply decreed that CGHS and WNT could.no longer operate as two boards and had six weeks to devise and form a new structure. Most emphatic on this point was Rev. Harris, Pastor of the Tioga United Methodist Church, which is in the WNT target area. Rev. Harris testified that Evans told the Boards “that they had to unite or else.” Rev. Harris went on: Q Who informed the Boards that they had to unite ? A Mr. Evans. Q And did he say why the Boards had to unite? A He just said because they wanted it done. Q Did he say how the Boards would unite ? A No. He left that up to the Boards to work it out as to how it was to be done. But he said he wanted one Board instead of two. Q Did he offer any assistance if the Boards wanted it ? A No, sir. He gave us a deadline of six weeks. When I wrote back to them and asked for a meeting I was given an appointment with Mr. Evans. And then our secretary informed me the following day that the appointment was cancelled. (N.T. 47-48). We credit Rev. Harris’s testimony. Evans continued the meeting in the same vein. He announced that if plaintiff Boards did not follow his “advice” to merge, then PAAC would, on his recommendation, retain Temple’s attorneys to restructure the program. He also declared that he spoke for the community, and that if a comprehensive health plan was not prepared for Philadelphia, “then you are out of the picture.” Evans also stated that he would see to it that his plans were effectuated. “I will use the power as Chairman of PAAC to make any move . . . and we have the power to move this project. We will use the power if we feel it is justified. You will have nothing to say about what the Chair will say.” By the foregoing findings we do not mean to indicate that only Evans and the PAAC hierarchy favored merger, for some of the members of plaintiff Boards did also. But PAAC had even determined the format for the new board. Hardy revealed at the meeting that the Board would be composed of thirty people, ten from Area B, ten from Area D, and ten from Temple. At the conclusion of the meeting, Evans stated that “time was of the essence” and reminded the Boards that they had only six weeks to effect the merger. Following the March 23rd meeting, the plaintiff Boards each deliberated upon the matter of merger into a single board. On April 13, 1971, at a joint meeting of the Boards, after a rather involved discussion of a variety of alternatives, they agreed to merge. Dr. Georges was present at that meeting and moved a successful resolution that the boards form a Joint Task Force Committee to work on the structure and function of the new board. Notwithstanding that resolution, however, and despite frequent meetings, the merger was not consummated quickly enough to suit PAAC and Temple. There were a number of reasons why the merger’s progress was slow. First, there were substantive problems. The target areas for the two centers were socio-economically different, the CGHS area being low-income and the HOC area being more middle class. Moreover, the CGHS center still encompassed the Children’s Program, which was basically different from the rest of the program. Second, each group was unabashedly anxious about losing the identity it had labored so hard to establish. Third, there was a pervasive distrust in the air, a product of the ill will between the Boards and PAAC and Temple, which impeded the Boards’ ability to get along with each other in implementing what was essentially PAAC’s directive. Fourth, the members of plaintiff Boards were people of limited backgrounds, unfamiliar with the mechanics of the merger; they also had other full-time occupations and they consequently acted more slowly than might otherwise have been expected. We find in this regard that they received no help nor even an offer of help from Temple or PAAC in this endeavor. Fifth, the problem before the Boards was by no means a simple one, for there were indeed a considerable number of alternatives to formation of a single board. The problems of appropriate board composition in terms of the two areas involved and of the source and manner of community participation were sophisticated and would have challenged even lawyers and experts in the field. By mid-July Temple and PAAC felt that plaintiff Boards had made no significant progress towards merger. And, although there is nothing in the record that indicates any need for urgency, Evans and Hardy were persuaded that the time had come for forming a single board. On July 23, no merger having been effected, PAAC sent a letter, signed by its counsel, Mr. Crippins, to certain members of each of plaintiff Boards, informing them that Temple and PAAC had agreed to establish a single board, advising that they had been appointed as members, and inviting them to a meeting on July 28. A half hour before the scheduled meeting, it was canceled. Evans thereafter called a meeting of PAAC’s subcommitee on Community Action Councils for August 13, 1971, to discuss the “Temple Board.” PAAC did not notify plaintiff Boards qua boards, although some Board members, by virtue of their connection with the Area B or D CAC’s, were present. When the meeting opened, Evans reported that: At a recent meeting it was requested by the Chairmen of Areas B and D and representatives from Temple University that the two Boards be merged to form one Board. In order to structure the Board properly, since we were dealing with three organizations, it was decided that a Board of 30 Members be established with 10 representatives from Temple University, 10 representatives from Area B and 10 representatives from Area.D. (This was the same proposal that Hardy had advanced on March 23.) There were other speakers as well. Dr. Georges, on behalf of Temple, endorsed the notion of the single board and the proposed plan. And, although at the previous meeting of the subcommittee the subject of Board merger was not discussed, Mrs. Nannie Mae Barnes, Chairman of Area B CAC, and Mrs. Iris Glover, Chairman of Area D CAC, each supported the merger and announced that they had already chosen ten representatives from their CAC’s to serve on the new board. Thereupon, according to the minutes: Mr. Stroman made a motion that the recommendation of PAAC, Temple University and the Chairmen of Areas B and D be followed that the Board of Directors for West Nice-town-Tioga and Hartranft be merged into one Board. Miss Harrison seconded the motion, which was passed unanimously. Upon approval of the resolution, Evans directed that the proposed new board members be promptly notified. This direction was implemented. Moreover, on August 17, 1971, Dr. Georges and Hardy sent to each member of the plaintiff Boards a letter stating that the boards had been dissolved. Plaintiff Boards were not consulted before defendants sent the August 17th letters, which stated that the action was taken pursuant to “guidelines” of Temple and PAAC. The fact, however, is that neither Temple nor PAAC had promulgated formal guidelines pertaining to the dissolution of community boards of community action programs. Indeed, the bylaws of PAAC provide that subcommittee action is not binding without approval by the PAAC board at a meeting after four days’ notice. Yet PAAC had no meeting concerning the dissolution of plaintiffs as advisory boards or the plan to create a single merged board, thus casting additional doubt on the validity of Evans’s actions. The new single board met on Tuesday, August 24. It was denominated “Board of Temple Comprehensive Health Services Program.” The new board thereupon elected officers and has since been functioning as a program advisory board for both centers. We note that although 13 of the 20 persons chosen to represent the community on the new board had previous program advisory board experience, no one who had previously voiced opposition to Temple or PAAC was named. In terms of the statutory mandate of maximum effective community participation, however, it is important to examine the composition of the new board with respect to the residence of its members within the health center target area. As of August 17, 1971, of 22 members of CGHS, 12 resided in the target area served by the CGHS center, and 20 resided within CAC Area D. As of the same date, 11 of the 18 members of HOC lived in the target area of the WNT center. Of the others, one was pastor of a church in the target area, and another had resided in the target area at the time of his appointment. Sixteen of the members resided within CAC Area B, and one of the others had resided within Area B at the time of his appointment. Thus, of the 40 members of the two boards, 23 lived in the health center target areas and 36 lived within the CAC areas. On the other hand, of the 28 members appointed to the new board, only 6 resided within the target areas served by the two health centers, and only 18 within the areas of CAC’s B or- D. Moreover, five of the members originally appointed to the new board, Nannie Mae Barnes, Johnny Davis, Iris Glover, Adele Pelzer, and William B. Mungin, are employees of the CAC’s, and three others, Leo Hinson, Carmen Aponte, and Samuel Yarbrough, are employees of PAAC. We note too that the CAC appointments to the board were never discussed at any CAC meeting. We find, in accordance with the foregoing, that the new board has resulted in drastically decreased community participation. We do not credit Crippins’s position that the presence of appointees of the CAC’s acts as a talisman to fulfill the statutory command. The CAC areas are over five times the size of the program target areas. For instance, Mrs. Barnes lives at 6733 Emlen Street in the Germantown section. While that address is within the CAC area, it is in a far different socio-economic neighborhood than the target area. The vitality of the CAC appointments is further diluted by the fact that there has not been a CAC election since 1969. The plaintiffs have characterized the new board as a rubber stamp for PAAC and Temple. While there is insufficient evidence in the record to support that broad conclusion, the minutes of the first meeting of the new board do establish that the new board approved a $9 million budget for program year E without any review. Indeed, a motion that a committee be formed to review the budget with Mr. Dobbins for presentation at the next meeting was withdrawn as “a vote of confidence to Temple.” Hence, plaintiffs’ fears may be well founded. The notice that they had been dissolved was far from the coup de grace to plaintiffs, for they continued their merger discussions and in fact effected the first stage of merger by formation of an interim single board in November 1971. That interim board is still functioning and plaintiffs intend to complete the legal work which will consummate the merger. H. The Replacement of the Plaintiff Boards and the Question of Maximum Feasible Community Participation — A Synthesis Defendant Temple in its Requests for Findings of Fact has enumerated its reasons for the creation of a single program advisory board as follows: (a) To increase the Program’s efficiency and effectiveness. (b) To increase the amount of community participation in the Program by increasing the percentage of community representatives on the Program’s advisory board from 50% to 67%. (c) To eliminate the counter-productive effects of having two advisory boards for a single Program. (d) To expand the scope of concern of the Program’s advisory board to include Program Development and Evaluation. (e) To enhance the possibility of receiving more funds for use in the Program. (f) To redirect the primary concern of the Boards’ memberships from their own interests to the interests of the Program. We regard these reasons as sincerely advanced; indeed they may well be valid. Moreover, although we have criticized Evans’s method and approach, we do not doubt that the PAAC leadership was equally sincere in its belief that the plaintiff Boards should merge. But these observations are not dispositive of the questions before us. In the succeeding portions of this Opinion, we will discuss the legal issues in the case, including the vexatious question of what “maximum feasible community participation” means. As will be seen in the course of that discussion, we believe that the law in this area is such that if, after the fullest dialogue and negotiation of differences in good faith, the plaintiff Boards and Temple and PAAC were to disagree on the subject of merger, then, even if the plaintiff Boards objected, Temple and PAAC would be free to act in such a way as to bring a merger about, so long as maximum feasible community participation inhered in the merged board. But that is not this case. For, as the findings recited in the preceding sections of this Opinion make clear, the communications between the parties on the matter of merger were subjected, by Evans’s presentation at the March 23 meeting, to an indelible taint. The March 23 meeting hardly commenced in an ambience of mutual trust. The disagreements between the plaintiff Boards and Temple and PAAC over budget and personnel matters, training, and P. D. & E. were ongoing and pervasive. If the concept of maximum feasible community participation is to have any appreciable meaning, what the situation required was the initiation of a consultative process, a meaningful dialogue between PAAC and Temple and the program advisory boards concerning the merger proposal and, if merger was agreed on, the manner of achieving it. What emerged instead was a decree which, upon the elapse of the prescribed time, fell like a Damoclean sword upon the plaintiffs and severed them from the program. And even within its own contours the decree was restrictive, for Hardy had indicated to the meeting that the decision as to structure had already been made and that the new board would be composed of 30 people, 10 from CAC Area B, 10 from CAC Area D, and 10 appointed by Temple. Yet this was a decision in which community participation could have been especially fruitful. Although the import of the foregoing findings for our ultimate decision is obvious, they, like findings of fact in general, are infused with meaning only by a discussion of the applicable principles of law. To this discussion we now turn. III. Discussion A. Preliminary Matters: Standing, Jurisdiction, Exhaustion Before reaching the questions of interpretation of the Act, we must address the contentions of defendants that plaintiffs lack standing to sue, that this Court lacks jurisdiction of the subject matter, and that plaintiffs have failed to exhaust administrative remedies. All of these contentions lack merit. 1. Standing The law on standing has been substantially liberalized in recent years. Three years ago the Supreme Court articulated the “zone of interests” test to replace the test based on “recognized legal rights.” Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970). The new test is “whether the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question.” In Lower East Side Neighborhood Health Council-South, Inc. v. Richardson, 346 F.Supp. 386 (S.D.N.Y.1972), just as here, a community participation component of a federally funded comprehensive health program sought a preliminary injunction requiring its continuation as the local agency to provide such community participation. Judge Lasker found “no merit” in HEW’s contention that the Health Council lacked standing to press its claims, holding that as the previously officially recognized agency for providing mandated community participation in the program, the Health Council’s interest met the Association of Data Processing Service Organizations test. North City I, supra, was a suit brought by the former citizen participation component in the Model Cities Plan contesting changes made in the Philadelphia plan, which allegedly reduced citizen participation. The parties seemed to agree that Association of Data Processing Service Organizations concluded the standing issue. Judge Adams commented: The issue of standing was not pressed by the Government on appeal, in view of the Supreme Court’s recent decisions in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970), and Barlow v. Collins, 397 U.S. 159, 90 S.Ct. 832, 25 L.Ed.2d 192 (1970). Accordingly, we may assume AWC here has standing to challenge the Secretary’s grant to the City. 428 F.2d at 757. As we see it, plaintiffs are before the Court in a dual role. On the one hand, they represent themselves as legal entities, with substantial budgets, including certain incidental benefits to the Board members themselves, a considerable panoply óf powers and responsibility, and, until properly displaced, a statutory entitlement to function On the other hand, by virtue of the statutory scheme, and upon the full record as it has been here developed, plaintiff Boards also represent the community. While Judge Lasker, in Lower East Side, supra, perceived that there might be a distinction between the legal interest of the plaintiff in that ease qua council and the legal interest of the .community residents, such a distinction does not appear from this record. Hence we find that the duality of interests plaintiff Boards seek to protect each fall well within the zone of interests created and regulated by the federal statutes, regulations, and guidelines that govern comprehensive health services programs. The holding of Lower East Side and the clear implication of North City I, both of which are on point on the standing issue, support this conclusion. 2. Subject Matter Jurisdiction Plaintiffs’ complaint asserts subject matter jurisdiction on three grounds. The first is 28 U.S.C. § 1331 (federal question jurisdiction). The second is 28 U.S.C. § 1343(3), which confers federal jurisdiction in civil actions commenced by any person “[t]o redress the deprivation, under color of any State law, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights . . . .’’The third is 28 U.S.C. § 1343(4), which creates jurisdiction in suits “[t]o recover damages or to secure equitable or other relief under any Act of Congress providing for the protection of civil rights . . . .” (Plaintiffs have based their claim for relief on 42 U.S.C. § 1983, the 1871 Civil Rights Act, as well as on the Economic Opportunity Act.) Defendants contend that none of the three statutes confers jurisdiction in the case. We find that the Court is vested with jurisdiction in this case under 28 U.S.C. § 1331. The first requirement of that section is that the case “arises under the Constitution, laws, or treaties of the United States.” As was noted in Warrington Sewer Co. v. Tracy, 463 F.2d 771, 772 (3d Cir. 1972): The test for determining whether a complaint presents a federal question is “whether the complaint is for a remedy expressly granted by an act of Congress or otherwise ‘inferred’ from federal law, or whether a properly pleaded ‘state created’ claim itself presents a ‘pivotal question of federal law,’ for example because an act of Congress must be construed or ‘ “federal common law” govern [s] some disputed aspect’ of the claim.” (citations omitted) • Ivy Broadcasting Cb. v. American Tel. & Tel. Co., 391 F.2d 486, 489 (2nd Cir. 1968). It is clear beyond cavil that plaintiffs’ complaint seeks a remedy the source of which is the Economic Opportunity Act of 1964; hence the claim arises under federal law. Jurisdiction is conferred where plaintiffs allege a claim based on a right allegedly given by federal law. We cannot look to the merits of the existence of that right in deciding the jurisdictional issue. We turn to the issue of whether the plaintiffs have met the second requirement of 28 U.S.C. § 1331, which is that “the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs.” In terms of tangible value, we note that the budget for the Comprehensive Health Services Program for the year encompassing the dates of trial allotted $24,637 for the budget of the plaintiff CGHS and $67,204 for the plaintiff HOC. And the budget for the Program extending from October 1, 1970, to September 30, 1971 (the one in effect when the complaint was filed), allocated $19,498 for the budget of CGHS and $30,215 for the budget of HOC. The stake of the plaintiff Boards in these budgetary appropriations alone would satisfy the jurisdictional amount requirement. Because the plaintiff Boards exist as entities in their own right, we reject defendant Temple’s claim that the $10,000 jurisdictional amount is satisfied only if each Board member can show an individual interest in the case amounting to at least $10,000. As still further support for plaintiffs’ property right claim, we note that the Boards have a property interest in their records and files which were appropriated by defendants (see pp. 1076, 1083). But there is yet another reason why the $10,000 jurisdictional amount is met, for the law has long been that in injunction actions where the amount in controversy is a jurisdictional issue, the courts should look to the value of that which the plaintiffs are trying to protect. See Glenwood Light & Water Co. v. Mutual Light Heat & Power Co., 239 U.S. 121, 36 S.Ct. 30, 60 L.Ed. 174 (1915); John B. Kelly Inc. v. Lehigh Nav. Coal Co., 151 F.2d 743 (3d Cir. 1945), cert. denied, 327 U.S. 779, 66 S.Ct. 530, 90 L.Ed. 1007 (1946). An examination of the budgets (defendants’ exhibits 55 through 59) reveals that the Comprehensive Health Services program is currently a five million dollar annual operation. Plaintiffs, by their arguments that the defendants have disregarded the statutory requirement of maximum feasible community participation, have asserted a claim for protection of the integrity of the program. The value of that which plaintiffs are trying to protect thus far exceeds $10,000. A variant of this approach was taken by Judge Tenney in Bass v. Rockefeller, 331 F.Supp. 945 (S.D.N.Y.1971). Bass was a class action brought by a welfare recipient individually and on behalf of all others similarly situated seeking to restrain implementation of New York statutes reducing both the number of persons eligible for Medicaid and benefits and services provided such persons, without prior approval of the Secretary of HEW. Although there was no individual who could show an individ