Jeffries v. Georgia Residential Finance Authority

• Decision Date: 14 June 1982
• Docket Number: No. 81-7389,81-7389
• Citation: 678 F.2d 919
• Parties: Katherine JEFFRIES, et al., Plaintiffs-Appellees, v. GEORGIA RESIDENTIAL FINANCE AUTHORITY, Harriet J. Macklin, etc., Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 919

678 F.2d 919

Katherine JEFFRIES, et al., Plaintiffs-Appellees, v. GEORGIA RESIDENTIAL FINANCE AUTHORITY, Harriet J. Macklin etc., Defendants-Appellants.

No. 81-7389.

United States Court of Appeals Eleventh Circuit.

June 14, 1982.

Michael J. Bowers, Atty. Gen., John B. Ballard, Jr., Ethel D. Anderson, Asst. Attys. Gen., Atlanta, Ga., for defendants-appellants.

Georgia Legal Services Program, Martha Miller, Augusta, Ga., Robert W. Cullen, Atlanta, Ga., for plaintiffs-appellees.

Appeal from the United States District Court for the Northern District of Georgia.

Before INGRAHAM ^*, HATCHETT and ANDERSON, Circuit Judges.

HATCHETT, Circuit Judge:

This appeal involves a review of the constitutionality of eviction procedures administered by the Georgia Residential Finance Authority (GRFA) for tenants receiving benefits under the Section 8 Existing Housing Assistance Payments (HAP) Program of the U.S. Department of Housing and Urban Development (HUD). We affirm.

BACKGROUND

A. Proceedings Below

This case arose from the mid-term termination of leases and the initiation of eviction proceedings by a private landlord, Taptich, against his tenants, who are participants in the Section 8 Existing HAP program administered for HUD by GRFA. In July, 1979, the tenants filed this class action suit against GRFA, the Director of GRFA's Section 8 program, the GRFA Rockdale County Section 8 Program Area Administrator, the Secretary of HUD, and the Director of HUD's Atlanta office, in their official capacities, and against Taptich. In seeking declaratory and injunctive relief, plaintiffs challenged a HUD regulation, 24 C.F.R. § 882.215 (1981), as violative of the fourteenth amendment due process clause. This regulation sets out eviction procedures for tenants receiving benefits under the Section 8 program.

The district court certified a plaintiff class which included Section 8 Existing HAP tenants with minimum one-year term leases and thirty-day notice termination clauses and who were threatened with mid-term lease terminations. The district court granted declaratory relief to the tenants and held: (1) that the lease terminations and evictions comprised sufficient state action to invoke the fourteenth amendment's due process clause, despite the involvement of the private landlord; (2) that the Section 8 tenants had a constitutionally protected property interest in continued occupancy of their rental units throughout their lease term, an interest which the government could not deprive them of without affording them due process of law; and (3) that landlord-initiated mid-term lease terminations could occur only after GRFA found good cause. Jeffries v. Georgia Residential Finance Authority, 503 F.Supp. 610 (N.D.Ga.1980).

B. The Section 8 Existing HAP Program

In enacting Section 8 of the United States Housing Act of 1937, as amended by the Housing and Community Development Act of 1974, Congress established the Section 8 Existing Housing Assistance Payments Program, 42 U.S.C. § 1437f (1978), which supplies rent subsidies. The purpose of the Section 8 program is to aid lower income families in obtaining a decent place to live and to promote economically mixed housing. 42 U.S.C. § 1437f(a). The program is implemented by regulations at 24 C.F.R. Part 882.

HUD and a local public housing agency (PHA) such as GRFA administer the Section 8 program. 24 C.F.R. § 882.102. GRFA issues a certificate of family participation to eligible participants who locate a privately owned dwelling that complies with the housing quality standards approved by HUD. 24 C.F.R. §§ 882.102, 882.103(a), 882.109. The certificate holder then executes a lease with the owner of the private dwelling. GRFA then executes a HAP contract with the owner which covers contract rent, family contributions to rent, assistance payments, maintenance, operations, inspections, and evictions, among other privileges.

Under the lease agreement between the landlord and the tenant, the tenant pays a certain percentage of the rent and utilities in proportion to the tenant's income. 42 U.S.C. § 1437f(c)(3); 24 C.F.R. § 889.105. GRFA pays the balance of the rent directly to the landlord. GRFA must approve the lease. The term of each lease must be not less than one month nor more than 180 months. 42 U.S.C. § 1437f(d)(2). All GRFA leases are for twelve, twenty-four, or thirty-six months, but contain a clause that allows termination upon thirty-days written notice by either the landlord or the tenant at will.

The HUD regulation governing evictions of Section 8 existing housing tenants, 24 C.F.R. § 882.215, authorized the landlord to notify the tenant of the proposed eviction. Under this regulation's implementing statute however, Congress provided that assistance payments contracts between a PHA and an owner of existing housing must provide that "the agency shall have the sole right to give notice to vacate, with the owner having the right to make representation to the agency for termination of tenancy." 42 U.S.C. § 1437f(d)(1)(B) (emphasis added). ¹ The district court thus declared the regulation void for conflicting with the statute because it permitted a private landlord to unilaterally terminate subsidies without good cause.

Appellees (tenants) are GRFA certified program participants. Each tenant entered into a lease with the Midtown Apartments in Conyers, Georgia, for a term of twelve months, subject to a provision allowing either the landlord or the tenant to terminate the lease upon giving thirty-days written notice. Appellant Taptich (owner), the owner of Midtown Apartments, exercised his rights under the thirty-day termination clause and gave notice to the tenants and GRFA that he intended to terminate their leases. GRFA provided no administrative hearing or other relief with respect to the proposed terminations.

II. ISSUES PRESENTED

We must determine (1) whether the participation of the statutorily-created state agency, GRFA, in Section 8 termination and eviction procedures, constitutes sufficient state action to implicate the due process clause of the fourteenth amendment; (2) whether Section 8 tenants have a property interest in the continued occupancy of their apartments during the terms of their leases so that their private landlords cannot evict them mid-term absent good cause despite a lease provision permitting termination at will by either party on thirty-days written notice; and (3) whether certification of a defendant class of Section 8 landlords is required because the properly certified tenant class challenges termination and eviction provisions in contracts to which the landlords are parties.

III. STATE ACTION

It is well settled that the fourteenth amendment proscription against deprivations of property without due process of law reaches only government action and does not inhibit the conduct of purely private persons in their ordinary activities. Jackson v. Metropolitan Edison Co., 419 U.S. 345, 349, 95 S.Ct. 449, 452, 42 L.Ed.2d 477 (1974). We must therefore determine whether the involvement of GRFA in the Section 8 eviction procedure can be deemed "state action."

The question whether certain conduct is attributable to a private person or is tantamount to state action is frequently difficult to ascertain, especially where "the hand of the government is clear, but its path toward contact with the individual clouded by the action of a private individual." Jeffries, 503 F.Supp. at 613; see Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 172, 92 S.Ct. 1965, 1971, 32 L.Ed.2d 627 (1972); Burton v. Wilmington Parking Authority, 365 U.S. 715, 722, 81 S.Ct. 856, 860, 6 L.Ed.2d 45 (1961). "Only by sifting facts and weighing circumstances can the nonobvious involvement of the State in private conduct be attributed its true significance." Burton, 365 U.S. at 722, 81 S.Ct. at 860.

While the Supreme Court has refused to fashion a precise formula for ascertaining state action, several principles have emerged from the Court's decisions on this subject. First, the state, "in any of its manifestations," must be significantly involved in the private conduct. Burton, 365 U.S. at 722, 81 S.Ct. at 860; Moose Lodge, 407 U.S. at 173, 92 S.Ct. at 1971. The mere fact that a private entity is subject to extensive and detailed government regulation is not controlling. Jackson, 419 U.S. at 350, 95 S.Ct. at 453. Similarly, granting a license or providing essential services is an instance of insignificant state involvement. Moose Lodge, 407 U.S. at 173, 177, 92 S.Ct. at 1971, 1973.

The relevant inquiry is "whether there is a sufficiently close nexus between the State and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the State itself." Jackson, 419 U.S. at 351, 95 S.Ct. at 453. The private citizen's conduct may be attributable to the state where the government affirmatively facilitates, encourages, or authorizes the objectionable practice. See, e.g., Flagg Brothers, Inc. v. Brooks, 436 U.S. 149, 166, 98 S.Ct. 1729, 1738, 56 L.Ed.2d 185 (1978) (warehousemen's sale pursuant to state law providing procedure for conversion of lien to good title is not state action where state has not compelled sale of bailor's goods, but merely has announced circumstances where courts will not interfere with private sale); Jackson, 419 U.S. at 357, 95 S.Ct. at 456 (state not sufficiently connected with challenged termination of service by private utility where utility initiated practice which state merely approved but did not order); Moose Lodge, 407 U.S. at 173, 92 S.Ct. at 1971 (state action exists where government overtly or covertly encourages practice, such as where existence of state law is tantamount to state having commanded the result); Roberts v. Cameron-Brown Co., 556 F.2d 356, 359 (5th Cir. 1977) (no federal action in nonjudicial foreclosure of HUD-assisted mortgage where HUD mortgage form authorized foreclosure by...