479 F.2d 1236 (4th Cir. 1973), 72-2479, Joy v. Daniels

Docket Nº:72-2479.
Citation:479 F.2d 1236
Party Name:Thelma JOY, Individually and on Behalf of all others similarly situated, Appellant, v. Holland DANIELS, Chairman, et al., Appellees.
Case Date:June 11, 1973
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

Page 1236

479 F.2d 1236 (4th Cir. 1973)

Thelma JOY, Individually and on Behalf of all others similarly situated, Appellant,


Holland DANIELS, Chairman, et al., Appellees.

No. 72-2479.

United States Court of Appeals, Fourth Circuit.

June 11, 1973

Submitted March 27, 1973.

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Frank Epstein, Charleston, S. C., on brief for appellant.

No counsel for the appellees.

Before CRAVEN, BUTZNER and RUSSELL, Circuit Judges.

CRAVEN, Circuit Judge:

By this action for declaratory and injunctive relief under 42 U.S.C. § 1983, plaintiff challenges, as violative of the fifth and fourteenth amendments, her threatened eviction from the Joseph Paul Apartments. The apartments are quasi-public, having been constructed and now being operated by defendant, Joseph Paul Apartments, Inc., under Section 221(d)(3) of the National Housing Act. The district court held that the plaintiff could properly be evicted since her tenancy had expired under the terms of the lease, and that no other cause need be assigned for the eviction. We reverse.


The plaintiff, Thelma Joy, is the head of her household and with her four minor children constitutes a "family" within the statutory scheme. Her effective monthly income 1 of $222.20 is a "low income" for purposes of the federal housing programs, and she thus qualifies for occupancy in the Joseph Paul Apartments.

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On September 2, 1970, plaintiff leased one of defendant's apartments. The standard form lease provided in relevant part:

At the end of one year, lease is automatically renewed from month to month, rent to be payable in advance without demand on first day of each month. Either party may terminate lease at end of term or any successive term by giving 30 days' notice in advance to other party.

On September 11, 1971, the defendant gave plaintiff 30 days' notice to vacate, no cause being assigned. 2 It appears that the plaintiff has continued to occupy her apartment on a month-to-month basis, with her tenancy dependent on the outcome of this litigation.

Section 221(d)(3) of the National Housing Act, 12 U.S.C. § 1715 l(d)(3) (1971), is a statutory scheme for encouraging housing for low income families. To participate in this program, defendant was required to conform to a regulatory agreement with the Federal Housing Administration governing, inter alia, the construction, occupancy, and daily operations of the project. The FHA also grants defendant rent supplements for the plaintiff and other tenants under Section 101 of the Housing and Urban Development Act of 1965, 12 U.S.C. § 1701s(b) (1971). Plaintiff, for example, enjoys occupancy of an apartment worth $157.00 per month at a cost to her of $48.00. FHA pays the difference, i.e., $109.00 per month, directly to defendant. As a prerequisite to participation in the rent supplement program, there must be local government approval. 24 C.F.R. § 5.15(c) (1971). The County Council specifically approved rent supplements for Joseph Paul Apartments on August 6, 1968.


Initially we must determine if the fourteenth amendment is applicable, i.e., whether the action of defendant in seeking to evict plaintiff can be said to be "state action" since it is well settled the fourteenth amendment does not inhibit the conduct of purely private persons in their ordinary activities. Adickes v. S. H. Kress & Co., 398 U.S. 144, 169, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The Supreme Court has never attempted to fashion a precise formula of what constitutes "state action" and the question frequently is difficult to determine. Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 172, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972); Burton v. Wilmington Parking Auth., 365 U.S. 715, 722, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961). "State action" may result from administrative, regulatory, legislative, and judicial action. Moose Lodge No. 107, 407 U.S. at 179, 92 S.Ct. 1965. The determination must be made on a case-by-case basis. "Only by sifting facts and weighing circumstances can the nonobvious involvement of the State in private conduct be attributed its true significance." Burton, 365 U.S. at 722, 81 S.Ct. at 860.

In the present case the defendant receives mortgage benefits from the FHA and is thus subject to the attendant FHA regulations. 3 Additionally, the defendant has undertaken to utilize the eviction procedures authorized by South Carolina. 4 While these factors,

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either separately or combined, have been held insufficient to constitute "state action" they are relevant and material in the assessment of other evidence of state involvement. 5

The defendant receives rent supplements from the FHA. Prerequisite to obtaining these supplements, the defendant received specific authorization from the County Council. We view this involvement of the state (power delegated to local government) in this case as similar to the zoning power which, with state eviction proceedings, resulted in a holding of "state action" in Lavoie v. Bigwood, 457 F.2d 7 (1st Cir. 1972). [5a]

The participation of the federal government in such housing projects is conditioned upon state approval. The state is thus involved for there would otherwise be no federal direct funding through rent subsidies and indirect funding through mortgage benefits. We think that these factors coupled with utilization of state eviction procedure have "so far insinuated [the state] into a position of interdependence" with the defendant that the challenged activity "cannot be considered to have been so 'purely private' as to fall without the scope of the Fourteenth Amendment." Burton, 365 U.S. at 725, 81 S.Ct. at 862. See McQueen v. Druker, 438 F.2d 781, 784 (1st Cir. 1971). Accordingly, we hold there is sufficient state involvement to constitute "state action" for purposes of the fourteenth amendment. We also hold that the facts are sufficient to satisfy the "under color of" law clause of 42 U.S.C. § 1983. See Adickes, 398 U.S. at 161-172, 90 S.Ct. 1598; Lavoie, 457 F.2d at 15; McQueen v. Druker, 317 F.Supp. 1122, 1133 (D.Mass.) (Wyzanski, C. J.), aff'd in part, 438 F. 2d 781 (1st Cir. 1971). Accordingly, the district court had jurisdiction under 28 U.S.C. § 1343(3). 6


The district court concluded that plaintiff had no right of occupancy upon expiration of the term of the lease. Plaintiff contends that despite expiration of the term she may be evicted only for "good cause" and is entitled to the protection of procedural due process in the determination of whether cause exists. Since procedural due process applies only to the deprivation of interest protected by the fourteenth amendment, i.e., liberty and property, we must first determine plaintiff's substantive rights. See Board of Regents v. Roth, 408 U.S. 564, 569, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972); McQueen, 317 F.Supp. at 1128.

As stated in Board of Regents v. Roth:

Certain attributes of 'property' interests protected by procedural due process...

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