Allen v. Pierce

• Decision Date: 21 October 1982
• Docket Number: No. 81-1591,81-1591
• Parties: Juanita ALLEN, Annie L. Ponton, Lois Henderson and Marcy Purdom, Plaintiffs-Appellants, v. Samuel R. PIERCE, Jr., in his official capacity as the Secretary of the United States Department of Housing and Urban Development, et al., Defendants-Appellees. Summary Calendar.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 593

689 F.2d 593

Juanita ALLEN, Annie L. Ponton, Lois Henderson and Marcy Purdom, Plaintiffs-Appellants, v. Samuel R. PIERCE, Jr., in his official capacity as the Secretary of the United States Department of Housing and Urban Development, et al Defendants-Appellees.

No. 81-1591

Summary Calendar.

United States Court of Appeals Fifth Circuit.

Oct. 21, 1982.

James W. Piper, Legal Aid Soc. of Central Tex., Fred Fuchs, Austin, Tex., for plaintiffs-appellants.

Hugh P. Shovlin, Asst. U. S. Atty., San Antonio, Tex., Steven Goldstein, Office of Gen. Counsel, U. S. Dept. of Housing and Urban Development, Washington, D. C., for defendants-appellees.

Appeal from the United States District Court for the Western District of Texas.

Before GEE, RANDALL and TATE, Circuit Judges.

PER CURIAM:

Appellants, four low-income individuals, sued the Secretary of Housing and Urban Development ("Secretary") and four federally subsidized housing projects in central Texas. Suit against the housing projects was later dismissed by agreement. The gravamen of appellants' suit is to compel the Secretary to implement either a rent supplement program, 12 U.S.C. § 1701s, ¹ or another low-income tenant subsidy ² program at three Section 236 ³ and one Section 221(d)(3) ⁴ housing projects in central Texas. Appellants contend that they would qualify for rent supplements if they were tenants of the housing projects and if rent supplements were provided at those projects. ⁵ On cross-motions for summary judgment, the district court granted judgment in favor of the Secretary. The district court found that as a matter of law Congress did not intend appellants to have the type of relief requested. We affirm.

Resolution of an issue of statutory construction must begin with an analysis of the language of the statute itself. Bread Political Action Committee v. Federal Election Commission, --- U.S. ----, ----, 102 S.Ct. 1235, 1237, 71 L.Ed.2d 432 (1982) (quoting Dawson Chemical Co. v. Rohm & Haas Co., 448 U.S. 176, 187, 100 S.Ct. 2601, 2608, 65 L.Ed.2d 696, 699 (1980). Absent "a clearly expressed legislative intention to the contrary, the plain language of the statute controls its construction." Id. Under 12 U.S.C. § 1701s(a), the Secretary

is authorized to make, and contract to make, annual payments to a "housing owner" on behalf of "qualified tenants," as those terms are defined herein, in such amounts and under such circumstances as are prescribed in or pursuant to this section. In no case shall a contract provide for such payments with respect to any housing for a period exceeding forty years. The aggregate amount of the contracts to make such payments shall not exceed amounts approved in appropriation Acts, and payments pursuant to such contracts shall not exceed $150,000,000 per annum prior to July 1, 1969, which maximum dollar amount shall be increased by $40,000,000, on July 1, 1969, by $100,000,000 on July 1, 1970, and by $40,000,000 on July 1, 1971.

On its face § 1701s(a) does not create a mandatory duty to make the rent supplement program available at any specific federally subsidized project. Significantly, § 1701s(a) expressly limits the Secretary's authority to enter contracts to amounts approved in appropriation acts. Thus § 1701s(a) reflects a Congressional intent to limit the Secretary's authority by placing a cap on the dollar amount of each individual contract and by providing finite funds for the overall project.

On appeal, appellants concede the plain meaning of § 1701s, however, they contend that judicial construction has limited the Secretary's discretion to implementing either the rent supplement program or another tenant subsidy program, such as the Section 8 Set-Aside and Troubled Projects programs. Appellants' argument is based on comments made by the Ninth Circuit in Sicuro v. Harris, 597 F.2d 1235 (9th Cir. 1979):

Section 1701s was designed to assist "qualified tenants" by reducing their rentals. The Secretary must therefore administer the rent supplement program for those tenants. If, however, the Secretary determines that the "qualified tenants" at WTA would receive greater assistance from another applicable program, then it would be within her discretion to implement an alternative to the rent supplement program.

Id. at 1236 (footnotes omitted).

In response, the Secretary urges that Sicuro stands as an anomaly and is unsupported by either the plain language of the housing statutes or their legislative history. The Secretary further argues that he has neither the authority nor the resources to implement a rent supplement program at the housing projects in issue and that these housing projects do not qualify for either the Section 8 Set-Aside or the Troubled Projects programs. An analysis of the Secretary's position shows it to be meritorious.

Section 101 of the Housing and Urban Development Act of 1965, 12 U.S.C. § 1701s, authorized the rent supplement program to subsidize the rental payments of low-income tenants of certain federally-insured housing projects. The Secretary makes rent supplement payments through contracts with the project owner. 12 U.S.C. § 1701s. Acting in the belief that the rent supplement program was a disservice to Congressional purposes and policies, the Secretary ceased executing new contracts on January 5, 1973. This decision was upheld in Commonwealth of Pennsylvania v. Lynn, 501 F.2d 848 (D.C.Cir.1974). Towards the latter part of 1973, Congress, in apparent acquiescence to the Secretary's position, ceased providing funding for new contracts. In 1976 and 1978, Congress appropriated additional funds for the rent supplement program. However, the House Report for the 1976 appropriations act clearly stated that the appropriations were for a limited purpose:

However, the Committee wants to make clear that the release of these rent supplement funds is only available for meeting legitimate cost increases occurring from inflationary pressures. None of this contract authority is available for any new rent supplement units or a reimplementation of the program.

H.R.Rep.No.313, 94th Cong., 1st Sess. 7 (1975). The corresponding Senate Report echoed the House's reasoning:

The Department informed the Committee that under some circumstances the funds would be used to increase the number of units receiving assistance in existing projects, where possible under the law and where such increases are necessary to insure the economic viability of the project.

S.Rep.No.326, 94 Cong., 1st Sess. 16 (1975).

Appellants contend that the Senate report contradicts the statement in the House report and reflects a Congressional intent to fund new rent supplement units. We do not agree. When the two reports are read together, the better view would be that Congress appropriated these funds in 1976 to cover rent increases under existing contracts with the awareness that the Secretary may increase the number of units receiving rent supplements at a project that was already under a contract to prevent the project from defaulting on its HUD-insured mortgage. Also, it was Congress' intent to maintain the Secretary's moratorium on entering into contracts at projects that previously had no rent supplement units.

The House Report to the 1978 appropriations act noted that "(t)hese funds are being made available for one year only and will help stabilize the financial condition of housing projects receiving rent supplement assistance." H.R.Rep.No.1350, 95th Cong., 2d Sess. 20 (1978). This language evinces the clear Congressional purpose of stabilizing existing properties that were the subject of HUD mortgages and no more.

Prior to the 1976 and 1978 appropriations, HUD had been using recaptured contract authority to fund rent increases under existing contracts. The 1976 and 1978 appropriations were made when HUD's recaptured contract authority was insufficient to fund the necessary increases. The operation or funding of the rent supplement program between 1973 to 1978 does not reflect a Congressional intent to execute new rent supplement contracts.

The same year appellants filed this lawsuit Congress rescinded rent supplement contract authority balances available or that would come due in fiscal year 1980. Pub.L. 96-103, 93 Stat. 771 (1979).

The Senate Report stated:

Over the past few years rent supplement contract and budget authority have been used to amend existing rent supplement contracts so as to pay for rent supplement increases due to higher operating costs.

The Committee believes that additional assistance for rent supplement units should be provided exclusively through the troubled projects subsidy program ....... The Committee in recommending rescission of the rent supplement authority recognizes that the troubled projects subsidy gives the Department needed flexibility to make yearly adjustments in the levels of support provided so as to encourage good housing management practices whereas a rent supplement commitment binds the Department to make rent supplement payments for periods of up to 40 years.

S.Rep.No.258, 96th Cong., 1st Sess. 9-10 (1979).

In 1981 Congress rescinded additional budget and contract authority. Congress also indicated its intention that existing rent supplement contracts be converted to the Section 8 program and mandated use of the Troubled Projects funds as an interim measure for rent increases. The House Report stated:

In fiscal year 1981 the Department proposes to phase in the conversion of units currently assisted under the rent supplement program to the Section 8 program. The conversion of rent supplement assisted units will provide a long-term solution to the existing problem of inadequate funding to amend rent supplement contracts. The budget assumes that the conversion of approximately 23,000 rent supplement units to the Section 8 program during 1981 will result in the recapture of ... budget ... and ... contract authority. From this recaptured authority, it is...