Baldwin v. Housing Authority of City of Camden, Nj, Civil Action No. 02-cv-05931(FLW).

CourtUnited States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
Citation278 F.Supp.2d 365
Docket NumberCivil Action No. 02-cv-05931(FLW).
PartiesSara BALDWIN, Plaintiff, v. HOUSING AUTHORITY OF THE CITY OF CAMDEN, NEW JERSEY; Mirza Negron Morales; Marie Marquez, Glenn W. Barnett and Tracie Herrick, Defendants.
Decision Date21 August 2003
278 F.Supp.2d 365
Sara BALDWIN, Plaintiff,
HOUSING AUTHORITY OF THE CITY OF CAMDEN, NEW JERSEY; Mirza Negron Morales; Marie Marquez, Glenn W. Barnett and Tracie Herrick, Defendants.
Civil Action No. 02-cv-05931(FLW).
United States District Court, D. New Jersey.
August 21, 2003.
As Amended September 26, 2003.

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David M. Podell, South Jersey Legal Services, Inc., Camden, NJ, for Plaintiff.

Anthony L. Marchetti, Esquire, Cureton Caplan P.C., Delran, NJ, for Defendants.


WOLFSON, District Judge.

Presently before the Court is defendants' motion to dismiss plaintiff's Complaint pursuant to Fed.R.Civ.P. 12(b)(6). In this civil rights case, plaintiff, Sara Baldwin, argues that creditworthiness is not a criterion which the Housing Authority of the City of Camden ("HACC") may properly consider in determining a lower income individual's eligibility for Section 8 assisted rental housing vouchers. In that connection, plaintiff alleges that HACC and the individually named defendants1 deprived her of due process by denying her application for Section 8 vouchers on the basis of creditworthiness. Defendants assert that the use of creditworthiness as a criterion to evaluate applications for Section 8 vouchers is authorized by law and applicable regulations, and that their consideration of plaintiff's creditworthiness during their review of her application was appropriate. Alternatively, the individual defendants argue that they are protected from liability for any constitutional violation by the doctrine of qualified immunity and seek summary judgment on that basis. For the following reasons, defendants' motion to dismiss is denied and the individual defendants' motion for summary judgment is denied in part and granted in part.

In addition, in her Opposition to Defendants' Motion to Dismiss, plaintiff informally requests leave of the Court to amend her Complaint. The Court grants plaintiff's informal request for leave to amend her Complaint in order to proceed under 42 U.S.C. § 1983. Further, plaintiff is ordered to file such Amended Complaint within thirty days, in accordance with Section VI of this opinion.

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I. Statutory and Regulatory Framework

The Section 8 voucher program is part of a larger Congressionally enacted housing assistance program designed to aid lower-income individuals in securing affordable housing.2 The program was established under federal law and is implemented pursuant to numerous federal regulations and interpretation of those regulations by local public housing authorities. In order to better understand plaintiff's argument in this case, a brief review of the Section 8 Program's statutory and regulatory framework is in order.

A. Section 8 Program

Before the Court is the question of whether creditworthiness was a proper basis for HACC's denial of plaintiff's application for rental assistance vouchers under the Section 8 Tenant-Based Housing Choice Voucher Program ("Section 8"), one of several rent subsidy programs3 established pursuant to Section 8 of the United States Housing Act of 1937, as amended by the Housing and Community Development Act of 1974, 42 U.S.C. § 1437f ("Housing Act"). These housing assistance programs, referred to collectively as "Section 8," were created by Congress in order to help low-income families obtain "a decent place to live" and to promote economically mixed housing.4 Under the program, the Secretary of Housing and Urban Development ("HUD") is empowered to enter into contracts with state and local public housing agencies ("PHAs") and fund such agencies through annual contribution contracts.5 PHAs are authorized to receive applications from eligible persons seeking housing assistance, approve or deny the applications, and then provide vouchers to approved applicants.6 Defendant HACC is such a PHA.

B. Quality Housing and Work Responsibility Act of 1998

In 1998, the Quality Housing and Work Responsibility Act ("QHWRA") became law.7 Section 511 of the QHWRA requires PHAs, beginning in October 1999, to file each year, an Annual and Five Year Plan (referred to in the regulation separately and collectively as "Agency Plan[s]").8 The same provision of the QHWRA also sets forth a list of eighteen topics a PHA must address in its Annual and Five Year Plan.9 Among the topics on that list are eligibility, selection, and admissions policies

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for a PHA's Section 8 voucher program.10 QHWRA requires PHAs to conduct a public hearing and invite public comment regarding the Agency Plans11 and also requires PHAs to establish resident advisory boards to help with the general development of the Agency Plans.12 The Agency Plans provide a framework for local accountability.13

The QHWRA requires review of PHA Agency Plans by HUD.14 If HUD does not provide written notice of disapproval within seventy-five days after a PHA submits an Agency Plan for review, the plan is presumed to be approved.15 This presumption, however, does not preclude judicial review of HUD's approval or disapproval of a PHA Agency Plan under the Administrative Procedure Act, 5 U.S.C. § 701 et seq., or in an action under 42 U.S.C. § 1983.16 Additionally, QHWRA does not preclude a PHA from modifying or amending any policy, rule, regulation or plan after the PHA submits the agency plan to HUD. A significant modification or amendment, however, may not be adopted or implemented until there is consultation with the resident advisory board, public notice, a public hearing or public meeting of the board of directors, and review by HUD.17 QHWRA and HUD do not provide a definition of "significant amendment," rather, determination of the definition of "significant amendment" is left to PHAs in order to facilitate local public participation in the PHA planning process.18 Further, federal regulations implementing the Section 8 program require PHAs to identify the basic criteria for determining a substantial deviation or amendment within the Agency Plan.19

C. Section 8 Administrative Plan

HUD requires PHAs to include a separate Section 8 Administrative Plan as a supporting document to the Annual Plan.20 The Administrative Plan delineates PHA policies on matters for which the PHA has discretion to establish local policies.21 The purpose of this requirement is to ensure public access to detailed information related to all of the housing authority's discretionary policies.22 Section 8 implementing regulations list twenty-three policies that PHAs must address in their Section 8 Administrative Plans.23 Among those policies is the PHA's policy for screening applicants for family behavior or suitability for tenancy. Although HUD empowers PHAs to screen applicants for Section 8 vouchers for suitability of tenancy, PHAs must conduct any such screening in accordance with the stated policies in their administrative

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When a PHA denies or terminates assistance, it may consider all relevant circumstances, such as the seriousness of the case, the extent of participation or culpability of individual family members, mitigating circumstances related to the disability of a family member, and the effects of denial or termination of assistance on the other family members who were not involved in the action or failure.25 When HUD recently revised this language,26 it noted that PHAs were not required under the law, nor did HUD encourage them, to terminate or deny assistance in every circumstance when a basis for such termination or denial existed.27 When a PHA denies assistance, an applicant is entitled to written notice and an informal review conducted by any person assigned by the PHA other than the person who made or approved the initial decision, or a subordinate of that person.28

II. Facts

Plaintiff, Sarah Baldwin, is a thirty-three year old single mother whose sole source of income is $322 per month in public assistance payments. On Saturday, July 27, 2002, plaintiff was among more than one thousand low-income individuals who received an application for one of only three hundred new Section 8 rental assistance vouchers. Following completion of her voucher application on July 28, 2002, plaintiff submitted it to defendant HACC for consideration. On or about August 7, 2002, defendant Barnett mailed plaintiff a letter denying her application based on her credit history. Complaint ("Compl.") at ¶ 19; Ex. 3. Plaintiff requested an administrative hearing to review the denial of her application on August 12, 2002. That hearing took place on September 19, 2002, with plaintiff represented by counsel. Defendant Herrick served as the hearing officer, and defendant Barnett was present. Compl. at ¶ 21.

During the hearing, relying on a March 20, 2002 copy of the Section 8 Administrative Plan, plaintiff's counsel challenged HACC's use of creditworthiness as a proper criterion upon which to deny plaintiff's voucher application. Compl. at ¶ 23; Ex. 6. Plaintiff alleges that defendant Barnett then produced an August 21, 2002 copy of the HACC Section 8 Administrative Plan which provided for screening and denial of applications on the basis of credit history. Id. In response, plaintiff argued that an Administrative Plan dated August 21, 2002, could not justify HACC's August 7, 2002 denial of her voucher application because the Administrative Plan was not effective at the time HACC denied plaintiff's application, some two weeks earlier. Compl. at ¶ 24. Plaintiff alleges that defendant Barnett "stormed out of the room" and returned shortly thereafter with a copy of a resolution of the Board of Commissioners passed in July 2002, and claimed that applicable federal regulations permitted the Board to change the Administrative Plan. Id. at ¶ 25. Plaintiff testified that she would not have stood in line overnight if she had known defendants

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would use credit history as a screening criterion. Compl. at ¶ 26. Later...

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