Howard v. Pierce

• Decision Date: 27 June 1984
• Docket Number: No. 82-1960,82-1960
• Citation: 738 F.2d 722
• Parties: Irma HOWARD, et al., Plaintiffs-Appellants, v. Samuel PIERCE, Secretary of the Department of Housing and Urban Development, and Grand Rapids Housing Commission, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 722

738 F.2d 722

Irma HOWARD, et al., Plaintiffs-Appellants, v. Samuel PIERCE, Secretary of the Department of Housing and Urban Development, and Grand Rapids Housing

Commission, et al., Defendants-Appellees.

No. 82-1960.

United States Court of Appeals, Sixth Circuit.

Argued Jan. 27, 1984.

Decided June 27, 1984.

Michael Nelson (argued), Legal Aid of Western Michigan, Grand Rapids, Mich., for plaintiffs-appellants.

Preston Hopson, Jr., Asst. City Atty., (argued), Grand Rapids, Mich., Thomas H. Peebles, U.S. Dept. of Justice, Civ. Div., Jonathan Strong, Dept. of H.U.D., Anthony J. Steinmeyer, Peter R. Maier (argued), Dept. of Justice, Civ. Div., Washington, D.C., for defendants-appellees.

James R. Grow, National Housing Law Project, Berkeley, Cal., for amicus curiae.

Before ENGEL and CONTIE, Circuit Judges, and CELEBREZZE, Senior Circuit Judge.

CELEBREZZE, Senior Circuit Judge.

Irma Howard, (plaintiff-appellant) brought this action against the Secretary of the Department of Housing and Urban Development (HUD) and the Grand Rapids Housing Commission (GRHC) (defendants-appellees) seeking to enjoin an alleged violation of the Brooke Amendment of the United States Housing Act of 1937 (Act). 42 U.S.C. Sec. 1437a. The issue in this case is whether tenants of low income housing may enforce the Brooke Amendment through private litigation. The district court determined that no private right of action exists under the Brooke Amendment and dismissed the suit; Howard appeals this dismissal.

The facts of this case are not in dispute. Howard is a tenant in a federally subsidized low income housing project which is owned and operated by GRHC. She receives public assistance benefits from the Michigan Department of Social Services (MDSS). A portion of the assistance payments are allocated specifically for housing. Howard's rent was calculated according to the amount paid for housing by MDSS. In other words, the amount paid by MDSS to Howard for housing was the amount charged by GRHC for rent. On April 1, 1981, MDSS began a series of ratable reductions in public assistance payments and, as a result of these reductions, GRHC's charge for rent exceeded MDSS' payment for shelter. ¹ Howard filed suit on May 17, 1982 to enjoin GRHC from charging rent in excess of the amount received from MDSS for housing. ²

Two weeks prior to the filing of this action HUD had announced formally a policy of requiring public housing authorities to reduce a tenant's rent once in response to a lowering of public assistance benefits for shelter. 47 Fed.Reg. 19120, 19121 (May 4, 1982). HUD's policy provides:

If the family's welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount of rent calculated ... shall be the amount resulting from one application of the percentage. 24 CFR 860.404. (emphasis added).

Subsequent to the filing of Howard's action, GRHC agreed to reduce rents to reflect a single reduction in public assistance benefits. MDSS, however, imposed a second ratable reduction. Relying on 24 C.F.R. 860.404, GRHC refused to lower Howard's rent in accordance with MDSS' second ratable reduction. Thus, Howard continued to pay rent in excess of the MDSS payment for shelter. According to Howard, HUD's policy, which permits GRHC to charge rent in excess of the public assistance payments for shelter, and GRHC's rent, which exceeds the statutory limits, violate the Brooke Amendment. The Brooke Amendment contains no express remedy for such a violation; Howard believes that such a remedy may be implied properly.

In determining whether a private remedy may be implied from a statute when legislation does not provide expressly for such remedy, a court must focus on congressional intent. ³ E.g., Texas Instruments, Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 639, 101 S.Ct. 2061, 2066, 68 L.Ed.2d 500 (1981); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U.S. 353, 377, 102 S.Ct. 1825, 1838, 72 L.Ed.2d 182 (1982); Middlesex County Sewerage Authority v. National Sea Clammers Association, 453 U.S. 1, 13, 101 S.Ct. 2615, 2623, 69 L.Ed.2d 435 (1981); Jennings v. Alexander, 715 F.2d 1036 (6th Cir.1983). In 1975, a unanimous Supreme Court set forth four factors which are relevant in determining whether Congress intended to create a private remedy. Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). See also, Cannon v. University of Chicago, 441 U.S. 677, 688, 99 S.Ct. 1946, 1953, 60 L.Ed.2d 560 (1979) ("[B]efore concluding that Congress intended to make a remedy available to a special class of litigants, a court must carefully analyze the four factors that Cort identifies as indicative of such an intent."). First, a court must determine whether the plaintiff is among the class of persons which Congress intended to benefit by enactment of the statute. In this regard, a court must conclude not only that there is a specific class of beneficiaries, but also, that "Congress intended to confer federal rights upon these beneficiaries." California v. Sierra Club, 451 U.S. 287, 294, 101 S.Ct. 1775, 1779, 68 L.Ed.2d 101 (1981). Second, courts must determine whether there is any legislative intent either to deny or to provide a private remedy. Generally, this second inquiry requires an analysis of the statute's legislative history. Third, a court must ascertain whether the existence of a private remedy would be consistent with the "underlying purposes of the legislative scheme." Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2088, 45 L.Ed.2d 26 (1975). Finally, courts must consider whether the action is one more appropriately a concern of state rather than federal law. ⁴

The first area of consideration in the determination of congressional intent is the statutory language. E.g., California v. Sierra Club, 451 U.S. 287, 294, 101 S.Ct. 1775, 1779, 68 L.Ed.2d 101 (1981); Northwest Airlines, Inc. v. Transport Workers Union of America, 451 U.S. 77, 91, 101 S.Ct. 1571, 1580, 67 L.Ed.2d 750 (1981); Universities Research Assn., Inc. v. Coutu, 450 U.S. 754, 771, 101 S.Ct. 1451, 1461, 67 L.Ed.2d 662 (1981); Touche Ross & Co. v. Redington, 442 U.S. 560, 99 S.Ct. 2479, 61 L.Ed.2d 82 (1979). The Brooke Amendment, 42 U.S.C. Sec. 1437a(a), provides:

Dwelling units assisted under this chapter shall be rented only to families who are lower income families at the time of their initial occupancy of such units. A family shall pay as rent for a dwelling unit assisted under this chapter the highest of the following amounts, rounded to the nearest dollar:

(1) 30 per centum of the family's monthly adjusted income;

(2) 10 per centum of the family's monthly income; or

(3) if the family is receiving payments for welfare assistance from a public agency and a part of such payments, adjusted in accordance with the family's actual housing costs, is specifically designated by such agency to meet the family's housing costs, the portion of such payments which is so designated.

This relevant portion of the Brooke Amendment sets a limit on rent chargeable to tenants of low income housing. The rent limitation is the primary means of achieving the Act's broad policy of assisting the states in remedying "the unsafe and unsanitary housing conditions and the acute shortage of decent, safe, and sanitary dwellings for families of lower income." 42 U.S.C. 1437. From this language we must determine whether Congress intended to create a specific class of beneficiaries which includes Howard, and, if so, whether Congress intended to confer federal rights upon such beneficiaries.

Clearly, the intended beneficiaries of the Brooke Amendment in particular and the Act in general are low income tenants of public housing. Stone v. District of Columbia, 572 F.Supp. 976, 980 (D.D.C.1983) ("To be sure, [public housing tenants] are among the intended beneficiaries of [the Brooke Amendment]."). See Perry v. Housing Authority of the City of Charleston, 664 F.2d 1210, 1213 (4th Cir.1981) ("[T]here is no question but that low income tenants were desired beneficiaries of [the Housing Act]"); Falzarano v. United States, 607 F.2d 506, 509 (1st Cir.1979) ("Low and moderate income tenants are indisputably the prime beneficiaries of the National Housing Act"); M.B. Guran Company, Inc. v. City of Akron, 546 F.2d 201, 204 (6th Cir.1976) (Housing Act enacted for benefit of "persons who inhabit inadequate housing"). The more difficult question is whether the Brooke Amendment was intended by Congress to confer enforceable federal rights upon low income tenants. ⁵

The question whether a plaintiff is an intended beneficiary of a statute and the question whether a statute creates enforceable federal rights are related. Invariably, if a statute is found to establish a federal right in favor of the plaintiff, the plaintiff will be an "intended beneficiary" of the statute. However, the converse is not true necessarily. See Universities Research Assn., Inc. v. Coutu, 450 U.S. 754, 101 S.Ct. 1451, 67 L.Ed.2d 662 (1981); Cannon v. University of Chicago, 441 U.S. 677, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979). The Supreme Court has been reluctant to imply a cause of action under statutes which create benefits for the general public. E.g., Cannon v. University of Chicago, 441 U.S. 677, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979). For example, absent specific language, one may not argue that a particular statute creates enforceable federal rights simply because the primary purpose of the statute is to benefit the public at large. See, e.g., Cannon v. University of Chicago, 441 U.S. 677, 690-92, 99 S.Ct. 1946, 1954-55, 60 L.Ed.2d 560 (1972). Although the plaintiff may be a member of the public and thus an intended beneficiary of the statute, the likelihood that Congress intended members of the general public to enforce such statutes is not great. In contrast, the inference that Congress intended to create legally enforceable rights is strongest when the statutory language focuses...