Kennedy v. Block

• Citation: 606 F. Supp. 1397
• Decision Date: 15 April 1985
• Docket Number: Civ. A. No. 84-0157-B.
• Court: U.S. District Court — Western District of Virginia
• Parties: Ralph KENNEDY, Plaintiff, v. John BLOCK, Secretary Department of Agriculture, Gilliam Court, Ltd., et al., Defendants.

606 F. Supp. 1397

Ralph KENNEDY, Plaintiff, v. John BLOCK, Secretary Department of Agriculture, Gilliam Court, Ltd., et al., Defendants.

Civ. A. No. 84-0157-B.

United States District Court, W.D. Virginia, Big Stone Gap Division.

April 15, 1985.

Jamie Aliperti, Client Centered Legal Services of Southwest Virginia, Castlewood, Va., for plaintiff.

U.S. Atty. Morgan E. Scott for DOA.

William J. Sturgill, Norton, Va., for Gilliam Court, Ltd.

MEMORANDUM OPINION

GLEN M. WILLIAMS, District Judge.

This case comes before the court on the plaintiff's Motion for Summary Judgment and Permanent Injunction. The material facts are not in dispute. As both parties have briefed their respective positions, the court will proceed with an examination of the plaintiff's request for a permanent injunction.

The plaintiff, Ralph L. Kennedy, lives in a rental apartment complex in Wise, Virginia. The apartment is owned and operated by defendant Gilliam Court, Ltd., a limited partnership which is based in Roanoke, Virginia. The plaintiff, whose apartment is located in the complex referred to as Gilliam Court, states, and defendants do not deny, that the construction of Gilliam Court was subsidized by funds provided through the Farmers Home Administration's (FmHA) Section 515 program, 42 U.S.C. § 1485 et seq. The Section 515 program authorizes the Secretary of Agriculture to insure loans, made to entities such as Gilliam Court, Ltd., which are used to construct rental housing for moderate income persons in rural areas. In addition, under the FmHA's Section 515 program, the plaintiff qualified for and received a monthly rent subsidy from FmHA, as evidenced by the lease agreement between the plaintiff and defendant Gilliam Court. (Plaintiff's Exhibit # 2).

On August 7, 1984, plaintiff received a letter from Stewart Trinkle which stated that plaintiff's lease would terminate thirty days from the date of his receipt of the letter. Mr. Trinkle was an employee of Trinkle and Associates, Inc., the management agent for Gilliam Court, Ltd. and served as property manager for Gilliam Court Apartments. The letter alleges that plaintiff had continued, after having been warned, in a course of conduct which harassed both the management and the tenants of Gilliam Court. Plaintiff came before this court on September 22, 1984 and, with the aid of counsel, presented evidence and argument in support of a preliminary injunction preventing his eviction. That same day, this court entered an order which enjoined the defendants from instituting an eviction action in a state court of Virginia.

Plaintiff advances three legal theories as separate and independent grounds for the granting of a permanent injunction against the defendants: (1) that a 1978 amendment to the National Housing Act requires that FmHA implement a process whereby a tenant in a Section 515 apartment complex be given an administrative hearing prior to institution of an eviction action in a state court; (2) that FmHA's amendment of 7 C.F.R. § 1944.551 et seq. was arbitrary and capricious and thus in violation of the Administration Procedures Act; (3) that the plaintiff's statutory and constitutional rights will be violated if FmHA is allowed to prosecute an eviction action in a Virginia General District Court.

I. THE 1978 AMENDMENT TO SECTION 510 OF THE NATIONAL HOUSING ACT

Section 510 of the National Housing Act, 42 U.S.C. § 1471 et seq., was amended in 1978 to read as follows:

In carrying out the provisions of this subchapter the Secretary shall have the power to —

issue rules and regulations which assure that applicants denied assistance under this subchapter or persons or organizations whose assistance under this subchapter is being substantially reduced or terminated are given written notice of the reasons for denial, reduction or termination and are provided at least an opportunity to appeal an adverse decision and to present additional information relevant to that decision to a person, other than the person making the original determination, who has authority to reverse the decision.

42 U.S.C. § 1480(g).

The plaintiff contends that 42 U.S.C. § 1480(g), as amended, was intended by Congress to require the Secretary of Agriculture to devise and implement an administrative hearing procedure as opposed to allowing FmHA or a borrower to resort initially to evictions via state court actions. FmHA did promulgate a final rule, effective September 24, 1979, which created an administrative hearing procedure for tenants of FmHA Section 515 housing projects who faced eviction. 7 C.F.R. § 1944.555 et seq. However, an amendment by way of a subsequent final rule with an effective date of December 19, 1983, allowed a borrower such as Gilliam Court, Ltd. to proceed with a termination of tenancy and eviction via judicial process under state law without first affording the tenant an administrative hearing. Assuming, arguendo, that the amendment process complied with the requirements of the Administrative Procedures Act, the court will address the plaintiff's contention that 7 C.F.R. § 1944.551 et seq., as amended December 19, 1983, conflicts with the Congressional mandate contained in the 1978 amendment (g) to 42 U.S.C. § 1480.

The plaintiff submitted as amendments to memoranda filed with the court certain parts of the published legislative history of the (g) amendment to 42 U.S.C. § 1480. Included is the conference committee's version of the bill, which states:

The conferees expect that the Secretary will insure that such appeals procedure will include at least a written notice of the ability to appeal an adverse decision, an opportunity to appeal to a person who had no role in making the original determination and who has the authority to reverse the decision, an opportunity to inspect agency records relevant to the initial decision, to present additional relevant information and to receive the reviewing official's final decision with supporting reasons in writing. This procedure should apply to all persons and organizations, including tenants in FmHA financed dwelling units whose assistance has been denied, substantially reduced or terminated.

H.R. 95-1792, 95th Cong. 2nd Sess. 88 (1978) at 89, U.S. Code Cong. & Admin. News 1978, 4773, 4909.

The plaintiff argues that the committee report evidences Congressional intent to provide FmHA Section 515 tenants who face eviction with a prior administrative hearing. The plaintiff further argues that since FmHA borrower-landlords have always had to utilize state eviction procedures, Congress must have intended, by this amendment, to cause the FmHA to promulgate a process in addition to the process incident to state eviction action.

The court is not persuaded that 42 U.S.C. § 1480(g) requires a prior administrative hearing in eviction situations. As this court has held previously, when a statute is unambiguous on its face, there is no need to consider the legislative history. Cooper v. Tazewell Square Apartments, Ltd., 577 F.Supp. 1483, 1487 (W.D.Va. 1984); citing Brown v. Porcher, 502 F.Supp. 946, 955-56 n. 17 (D.S.C.1980), affirmed as modified, 660 F.2d 1001 (4th Cir.1981). However, since the portion of the legislative history submitted to the court by the plaintiff undermines the plaintiff's interpretation of Congress' intent, it is proper to include a discussion of legislative history. The plaintiff's argument that, unless Section 1480(g) intended to create an administrative process for evictions, it was "merely redundant" in light of existing procedures ignores the fact that Section 1480(g) was intended to cover other situations in which the tenant's or applicant's assistance was "denied, substantially reduced, or terminated." The amendment was directed not only to evictions of current tenants, but also to the denial of benefits to applicants (i.e., prospective tenants), the borrower landlord's failure to maintain the rental premises properly, violations by the borrower-landlord of lease covenants and rules, unauthorized rent increases, etc. The plaintiff's argument is flawed in that it treats Section 1480(g) as if it were meant to apply only to evictions, which it clearly was not. Thus situations involving evictions can be omitted from the grievance appeal process without rendering Section 1480(g) redundant.

The plaintiff's concern with the legislative history also serves to draw attention to an issue which will be considered more thoroughly in a later section of this opinion: what procedural elements ought to be included in the hearing and appeal afforded by Section 1480(g)? Section 1480(g) as enacted into law in its final form by Congress, differs materially from the conferees' version as described in the portion of the legislative history provided above. The conferees' report included these elements which are not present in the actual amendment: (1) an opportunity to inspect relevant agency records and (2) the right to receive the reviewing official's final decision, along with supporting reasons, in writing. By not including these provisions expressly, given that they were presented in the conference version of the bill which went to the full Congress, Congress clearly intended to exclude these two elements from the required procedure. The court is of the opinion that the statutory procedures required by Section 1480(g) can be satisfied by an appropriate form of judicial action. Whether Virginia's eviction procedure satisfies the statutory requirements of Section 1480(g) will be considered together with the question of what procedures the statute requires in the third portion of this opinion.

II. FmHA'S 1983 REVISION OF 7 C.F.R. § 1944.551 ET SEQ.

FmHA first promulgated a "Tenant Grievance and Appeal Procedure" on September 24, 1979. This included in the administrative hearing process those tenants which the borrower-landlord wished to dispossess from an apartment by eviction. These provisions were contained at 7 C.F.R. § 1944.551...