979 F.2d 438 (6th Cir. 1992), 91-3912, Baum v. Madigan

Docket Nº:John J. Witkosky (91-3912), in their official
Citation:979 F.2d 438
Party Name:Robin BAUM, individually and on behalf of all others similarly situated, Plaintiffs-Appellees/Cross-Appellants (91-3947), Emma Detillion and Sheila Lawson, Intervenor Plaintiffs-Appellees/Cross-Appellants (91-3947), v. Edward R. MADIGAN (91-3913), Terry A. Wallace (91-3946), and
Case Date:November 16, 1992
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 438

979 F.2d 438 (6th Cir. 1992)

Robin BAUM, individually and on behalf of all others

similarly situated,

Plaintiffs-Appellees/Cross-Appellants (91-3947),

Emma Detillion and Sheila Lawson, Intervenor

Plaintiffs-Appellees/Cross-Appellants (91-3947),

v.

Edward R. MADIGAN (91-3913), Terry A. Wallace (91-3946), and

John J. Witkosky (91-3912), in their official

capacities, Defendants-Appellants/Cross-Appellees.

Nos. 91-3912, 91-3913, 91-3946 and 91-3947.

United States Court of Appeals, Sixth Circuit

November 16, 1992

Argued Oct. 8, 1992.

Peter M. Iskin (argued and briefed), Robert H. Bonthius, Jr., Legal Aid Society of Cleveland, Cleveland, Ohio, for Robin Baum, Emma Detillion and Sheila Lawson.

Michael Anne Johnson, Alexander A. Rokakis and Kathleen A. Sutula, Asst. U.S. Attys., Cleveland, Ohio, Christine N. Kohl (argued and briefed), Barbara C. Biddle, U.S. Dept. of Justice, Civil Div., Appellate Staff, Washington, D.C., for Edward R. Madigan.

Kent M. Graham, David W. Norris, Roxana R. Lyle (briefed), Pros. Attorney's Office, for the County of Portage, Ravenna, Ohio, for John J. Witkosky.

Alan Schwepe (argued and briefed), Columbus, Ohio, for Terry A. Wallace.

Before: MILBURN and NORRIS, Circuit Judges; and LIVELY, Senior Circuit Judge.

MILBURN, Circuit Judge.

Defendants Edward R. Madigan, Secretary of the United States Department of Agriculture; Terry A. Wallace, Director of the Ohio Department of Human Services; and John J. Witkosky, Administrator of the Portage County Department of Human Services, appeal from the district court's decision granting summary judgment to plaintiffs Robin Baum, Emma Detillion, and Sheila Lawson on their claim that the utility reimbursements paid directly to them by check did not constitute income for purposes of calculating their food stamp benefits under the Food Stamp Act, 7 U.S.C. § 2011 et seq. Plaintiffs cross-appeal from the district court's decision insofar as it denied them summary judgment on their claims for a retroactive award of food stamp benefits and for class certification under Federal Rule of Civil Procedure 23.

The issue presented by defendants' appeal is whether the utility reimbursement payments plaintiffs received through certain

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federally assisted low income housing programs are excluded from income under 7 U.S.C. § 2014(d)(1) for the purpose of calculating plaintiffs' eligibility for food stamp benefits. The issues presented by plaintiffs' cross-appeal are (1) whether plaintiffs are entitled to retroactive relief under 7 U.S.C. §§ 2020(p) and 2023(b), and (2) whether plaintiffs are entitled to class certification under Fed.R.Civ.P. 23. This is a case of first impression in this circuit. For the reasons that follow, we reverse and remand.

I.

The facts are not in dispute. Plaintiffs are public housing tenants and food stamp recipients. The United States Housing Act ("USHA"), 42 U.S.C. §§ 1437-1437j, provides low income families with rental units in facilities operated by public housing agencies ("PHA"). The Brooke Amendment to the USHA, 42 U.S.C. § 1437a(a)(1), sets the rent for a tenant in a public housing facility at approximately thirty percent of the household's monthly adjusted income.

In many public housing facilities, utility usage is not metered at the individual household level, and the PHA pays the utility charges on behalf of all the tenants. The tenant in such a facility makes only a rent payment to the landlord, and that payment covers both rent and utilities. In other public housing facilities, however, the Department of Housing and Urban Development ("HUD") requires individual metering at each household to encourage the conservation of energy. Where households are individually metered, utilities may be paid for by one of two methods. Under the first method, the PHA pays the supplier for utilities and surcharges the tenant to the extent that the tenant's utility usage exceeds a preset allowance considered reasonable by the PHA. Under the second method, the tenant is responsible for purchasing utility services directly from the supplier. The PHA sets a utility allowance ("UA") by estimating "the monthly cost of a reasonable consumption of such utilities and other services for the [tenant] unit by an energy-conservative household of modest circumstances consistent with the requirements of a safe, sanitary, and healthful living environment." 24 C.F.R. § 913.102.

In the latter case in which the tenant purchases utilities directly, the amount of the UA is credited to the tenant's rent with the result that the tenant actually pays the PHA only the difference between the rent and the UA. For example, under the Brooke Amendment a household with an adjusted monthly income of $500.00 would be charged $150.00 rent (thirty percent of adjusted monthly income). If the UA for that household in that area were $100.00, the tenant would pay the PHA only $50.00 in rent, which is the difference between the rent and the UA.

At times, however, the UA may be greater than the rent. For example, a household with a monthly income of $250.00 would theoretically owe rent of $75.00. If the UA were $100.00, the UA would exceed the rent by $25.00. Under these circumstances, the UA would be credited to the rent, thus extinguishing that obligation, and the tenant would receive a utility reimbursement ("UR") of $25.00 in the form of a check made payable to the tenant. 1 See 24 C.F.R. § 913.102. Whether or not the UA exceeds a tenant's Brooke Amendment rent, the tenant is responsible for paying the household's utility bills. If the household conserves energy, it may profit to the extent that the UR exceeds the household's actual utility charges because tenants are not legally required to use the UR in payment of utility charges, and they may lawfully spend the money as...

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