Davis v. Mansfield Metropolitan Housing Authority, 83-3473

• Decision Date: 28 December 1984
• Docket Number: No. 83-3473,83-3473
• Citation: 751 F.2d 180
• Parties: Gussie DAVIS, et al., Plaintiffs-Appellees, v. MANSFIELD METROPOLITAN HOUSING AUTHORITY, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 180

751 F.2d 180

81 A.L.R.Fed. 829

Gussie DAVIS, et al., Plaintiffs-Appellees, v. MANSFIELD METROPOLITAN HOUSING AUTHORITY, et al.,

Defendants-Appellants.

No. 83-3473.

United States Court of Appeals, Sixth Circuit.

Argued Aug. 28, 1984.

Decided Dec. 28, 1984.

William M. Connelly, Kevin E. Joyce (argued), Connelly, Soutar & Jackson, Toledo, Ohio, for defendants-appellants.

Peter Iskin (argued), Robert H. Bonthius, Jr., Cleveland, Ohio, for plaintiffs-appellees.

Before ENGEL and MERRITT, Circuit Judges, and GIBBONS, District judge. ^*

GIBBONS, District Judge.

This case arises out of defendant Mansfield Metropolitan Housing Authority's administration of the Section Eight ¹ existing housing program. The district court found that defendants had violated plaintiffs' Fourteenth Amendment procedural due process rights by denying eligibility to certain applicants and terminating certain participants in the program without a hearing. It awarded injunctive relief and damages. On appeal, defendants challenge both the correctness of the court's factual findings and the relief awarded. We believe that the court's factual findings were not clearly erroneous, but disagree in part with its decisions about the appropriate relief. Defendants also contend that the district court incorrectly denied the motion to dismiss of William Gandert, Executive Director of the Authority, and entered judgment against him. We agree with the district court's ruling as to defendant Gandert.

Plaintiff Gussie Davis initiated this action in April, 1978, on behalf of herself and similarly situated individuals who were being denied initial and continued participation in the Section Eight existing housing program. ² Beverly M. Day and Deborah J. Simmering were later allowed to intervene as plaintiffs. All three named plaintiffs asserted individual damage claims as well as the class claims. Defendants in the case were Mansfield Metropolitan Housing Authority (MMHA) and William Gandert, Executive Director of MMHA.

Proceeding under 42 U.S.C. Section 1983, plaintiffs alleged that defendants had deprived them of rights secured by federal statutes and the United States Constitution. They asserted several theories of recovery, but the only allegation upon which they prevailed was the claim that defendants had deprived them of due process by denying eligibility to certain applicants and terminating certain participants from the Section Eight existing housing program without a hearing. The persons who were being terminated from the program or denied initial eligibility were those who allegedly owed past rent or were responsible for damage to apartments that they had previously occupied.

The trial court issued an opinion on June 6, 1983, holding for plaintiffs on the due process issue. Defendants were enjoined from denying or terminating participation in the Section Eight existing housing program because of overdue rent or outstanding damage claims without providing for notice and hearing. The trial court delineated the requirements of the hearing. In addition, two of the plaintiffs were awarded damages.

The facts underlying plaintiffs' suit were disputed at trial and apparently are still disputed by defendants. The trial court, however, resolved any conflicts in the evidence and, in its order of June 6, 1983, described the facts as it found them. Findings of fact by a trial court can be set aside by a reviewing court only if they are clearly erroneous. Sawyer v. Arum, 690 F.2d 590, 591 (6th Cir.1982). After a scrutiny of the trial record, it appears that the trial court's findings were not clearly erroneous. Therefore, the facts will be described as found by the trial court.

The Section Eight existing housing program is a means by which lower income families receive rent subsidies. The program is administered by local housing authorities such as MMHA that enter the program by executing a written agreement with the United States Department of Housing and Urban Development (HUD). See 24 C.F.R. Sec. 882.102 (1983). Persons seeking participation in the program must apply to the local housing authority for a certificate of participation. Id. When an eligible party secures a certificate, he is then responsible for finding suitable housing within the housing authority's jurisdiction. 24 C.F.R. Sec. 882.103 (1983).

After the eligible individual finds an available apartment and an owner who is willing to participate in the program, the owner of the rental unit and the eligible party submit a lease to the housing authority for its approval. 24 C.F.R. Secs. 882.116(j), 882.210 (1983). The housing authority calculates the percentage of the rent payable by the Section Eight participant based upon his family's income. 24 C.F.R. Sec. 882.116 (1983). The housing authority pays the remainder. 24 C.F.R. Sec. 882.105 (1983).

Defendants had a policy of refusing to grant certificates of eligibility to participate in the Section Eight existing housing program to persons against whom there was an outstanding claim for damages to rental property or for unpaid rent either to MMHA or previous landlords. The claims usually arose from the individual's participation in other MMHA-administered programs. Defendants followed this policy even when a potential participant disputed the claim. They simply refused to certify the individual for participation until the claim was paid or the individual agreed to pay the claim.

After the trial court ordered defendants to stop this practice in a preliminary injunction issued in this case, they developed a strategy to continue the discrimination. When an application by one with an outstanding claim became first on the priority list for housing, defendants would transfer the application to an inactive file, thereby effectively eliminating the opportunity to participate.

Defendants also refused to recertify individuals who were present participants in the Section Eight existing housing program if there was an outstanding claim against them. These persons usually sought recertification in order to renew their lease or to transfer to a more suitable apartment. Defendants refused to grant recertification, thereby effectively terminating their participation in the Section Eight program. Recertification was denied without a hearing. In addition, some present participants were threatened with termination if they refused to pay outstanding claims against them. The trial court concluded that the tenants had no opportunity to dispute the rent and damage claims. ³

In addition to the issue of correctness of the district court's factual findings, defendants raise several other issues on appeal. First, they contend that the hearing ordered by the district court was too extensive.

Defendants here concede that sufficient governmental action exists to invoke the constitutional protection of due process and that participation in a public housing program is a property interest protected by due process. The district court's ruling in this regard is consistent with the rulings of other courts that have considered the issue. See Holbrook v. Pitt, 643 F.2d 1261, 1278 (7th Cir.1981); Caulder v. Durham Housing Authority, 433 F.2d 998 (4th Cir.1970), cert. denied, 401 U.S. 1003, 91 S.Ct. 1228, 28 L.Ed.2d 539 (1971); Escalera v. New York City Housing Authority, 425 F.2d 853 (2d Cir.1970), cert denied, 400 U.S. 853, 91 S.Ct. 54, 27 L.Ed.2d 91 (1970); Baker v. Cincinnati Metropolitan Housing Authority, 490 F.Supp. 520, 532 (S.D.Ohio 1980), aff'd, 675 F.2d 836 (6th Cir.1982); Ferguson v. Metropolitan Development and Housing Agency, 485 F.Supp. 517, 521 (M.D.Tenn.1980); Owens v. Housing Authority of the City of Stamford, 394 F.Supp. 1267 (D.Conn.1975). See also Vandermark v. Housing Authority of the City of New York, 663 F.2d 436 (3d Cir.1981); Ressler v. Landrieu, 502 F.Supp. 324 (D.Alas.1980); Brezina v. Dowdall, 472 F.Supp. 82 (N.D.Ill.1979). Thus, the only issue before us is whether the hearing ordered by the district court is more extensive than required in this situation.

When it is determined that one is entitled to procedural due process, the next step is to ascertain exactly what process is due. Procedural due process is a flexible concept; its requirements are tailored to meet the needs of each specific situation. Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 2600, 33 L.Ed.2d 484 (1972); Cafeteria & Restaurant Workers Union, Local 473, AFL-CIO v. McElroy, 367 U.S. 886, 895, 81 S.Ct. 1743, 1748, 6 L.Ed.2d 1230 (1961); Fleming v. United States Department of Agriculture, 713 F.2d 179, 183 (6th Cir.1983).

Although the parties disagree as to the type of hearing required here, they agree on the proper test to be used to make that determination. The test is basically one of balancing the government's interest against the private interest involved. Three factors are considered:

(1) the private interest that will be affected by the official action;

(2) the risk of erroneous deprivation through current procedures and the appropriateness of additional procedural safeguards; and

(3) the government's interest, including the governmental function involved and the administrative burdens imposed by additional safeguards.

Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 903, 47 L.Ed.2d 18 (1976). See also Goldberg v. Kelly, 397 U.S. 254, 263-71, 90 S.Ct. 1011, 1018-22, 25 L.Ed.2d 287 (1970). Applying the proper factors to the instant case, we conclude that the trial court was incorrect in requiring such an extensive predetermination hearing for persons who were denied original eligibility and for present participants in the program.

In considering the first factor of the private interest affected by the official action, potential and current participants have different private interests. Participants who are terminated or denied recertification are deprived of their present shelter. Their loss is greater than that of persons from whom a...