Miller v. McCormick

• Decision Date: 26 March 2009
• Docket Number: No. CV-08-26-B-W.,CV-08-26-B-W.
• Citation: 605 F.Supp.2d 296
• Parties: Richard MILLER, Plaintiff, v. Dale McCORMICK, Maine State Housing Authority, and Penquis Community Action Program, Defendants.
• Court: U.S. District Court — District of Maine

605 F.Supp.2d 296

Richard MILLER, Plaintiff, v. Dale McCORMICK, Maine State Housing Authority, and Penquis Community Action Program, Defendants.

No. CV-08-26-B-W.

United States District Court, D. Maine.

March 26, 2009.

Judson Esty-Kendall, Pine Tree Legal Assistance, Inc., Bangor, ME, for Richard Miller.

John Bobrowiecki, Maine State Housing Authority, Augusta, ME, for Dale McCormick, Maine State Housing Authority, and Penquis Community Action Program.

ORDER

JOHN A. WOODCOCK, JR., Chief Judge.

Congress has acted to prevent the admission of illegal drug users, alcohol abusers, and lifetime sex offender registrants into federally assisted housing programs. Pursuant to that statutory authority, the United States Department of Housing and Urban Development (HUD) promulgated regulations that ban all three groups— drug users, alcohol abusers, and lifetime sex offender registrants—from admission into the programs. However, the regulations do not treat equally members of these groups who avoid the ban and become program participants. The regulations expressly provide for the termination of benefits to program participants because they are illegal drug users or alcohol abusers; the regulations do not expressly provide for termination of benefits to program participants because they are lifetime sex offender registrants. The Court, therefore, rejects the Magistrate Judge's Recommended Decision, which concluded that 24 C.F.R. § 982.553(c) authorizes a termination of benefits to a program participant because he is a lifetime sex offender registrant.

I. STATEMENT OF FACTS

Richard Miller, a convicted sex offender and beneficiary of a Section 8 home ownership voucher, claims that the Maine State Housing Authority (MSHA) unlawfully terminated his subsidy in violation of the Fourteenth Amendment to the United States Constitution and federal law. Seeking damages, injunctive, and declaratory relief, he initiated this action pursuant to 42 U.S.C. § 1983 against the MSHA; its Director, Dale McCormick; and Penquis Community Action Program (Penquis), a non-profit corporation that administers on behalf of the MSHA the federal Section 8 housing voucher program in Penobscot and Waldo counties. Defendants counterclaimed in unjust enrichment to recoup benefits conferred on and allegedly wrongfully retained by Mr. Miller.

Mr. Miller moved to dismiss Defendants' Counterclaim and the parties filed cross-motions for judgment on a stipulated record. Mot. to Dismiss Countercl. for Failure to State a Claim upon which Relief Can Be Granted (Docket # 13) (Pl.'s Mot. to Dismiss Countercl.); Defs.' Mot. for J. on a Stipulated R. (Docket # 21) (Defs.' Mot. for J.); Pl.'s Mot. for Summ. J. on His Compl. (Docket # 22) (Pl.'s Mot. for Summ. J.); Stip. R. (Docket # 23). The Court referred these motions to the United States Magistrate Judge, who recommended that the Court grant judgment in Defendants' favor and decline to exercise supplemental jurisdiction over Defendants' Counterclaim pursuant to 28 U.S.C. § 1367. Recommended Decision on Cross-Mots. at 15-16, 2008 WL 4326529 (Docket # 26) (Rec. Dec.). Mr. Miller objected to the Magistrate Judge's recommendation and Defendants responded. Pl.'s Objection to the Recommended Decision of the Magistrate (Docket # 27) (Pl.'s Obj.); Defs.' Resp. to Pl.'s Objection to the Recommended Decision of the Magistrate (Docket # 28) (Defs.' Resp. to Pl.'s Obj.). At the parties' request, the Court held oral argument on March 18, 2009.

A. The Stipulated Record

On August 15, 1996 in Snohomish County, Washington, Mr. Miller pleaded guilty to one count of child molestation in the first degree.¹ Stip. R. ¶ 13; Stip. Ex. 1. He was convicted and sentenced to fifty-five months imprisonment on September 23, 1996. Stip. Ex. 2. As a result of this 1996 conviction, Mr. Miller is required to register as a sex offender in Washington until he petitions and is relieved by a competent court. Stip. R. ¶ 14. Mr. Miller moved to the commonwealth of Massachusetts and applied for and was accepted into a Section 8 Housing Voucher Program there on October 1, 2002. Stip. R. ¶ 16. When Mr. Miller moved to Knox County, Maine in July 2005, he was required to register as a sex offender in Maine. Stip. R. ¶ 15. Mr. Miller did not register in Maine, and, acting on a call from his then-landlord, Thomaston police arrested him on October 24, 2006.² Stip. R. ¶ 21; see 34-A M.R.S.A. § 11227(1). He registered "immediately" after his arrest, and ever since appears to have complied with his registration obligations. Stip. R. ¶ 21; see Stip. Ex. 7.

When Mr. Miller moved to Maine from Massachusetts in 2005, he "ported," or transferred, his Section 8 housing voucher for which he had qualified since October 1, 2002. Stip. R. ¶¶ 16-17. At some point before his arrest, Mr. Miller moved into Penquis's coverage area, and Penquis "absorbed" him; Penquis has administered his voucher since January 1, 2006. Id.; Stip. Exs. 15, 16. In the summer of 2006, Penquis qualified Mr. Miller for the Section 8 homeownership option. Stip. R. ¶ 19. With other assistance, Mr. Miller purchased from Penquis a newly constructed home in Searsport on October 25, 2006—the day after Thomaston police arrested him for failing to register as a sex offender. Stip. R. ¶¶ 19-20; Stip. Ex. 19.

A month and a half later, on December 14, 2006, Penquis notified Mr. Miller of its decision to terminate his participation in the Section 8 homeownership program in accordance with 24 C.F.R. § 982.552, which is a HUD regulation addressing the denial or termination of assistance for families. Stip. R. ¶ 22; Stip. Ex. 22. Penquis proffered two reasons: (1) Mr. Miller "committed fraud or other corrupt criminal act" by violating "the Statement of Homeownership Voucher Program, form HU52649 in that [he] failed to disclose" that he was required to register as a sex offender under state law; and, (2) Mr. Miller violated his "obligation not to engage in other criminal activity that threatens the health, safety or right to peaceful enjoyment of other residents and persons residing in the immediate vicinity of the premises" by failing to register as required by law. Stip. Ex. 22.

An MSHA Administrative Hearing Officer reviewed and set aside this decision on January 30, 2007. Stip. R. ¶ 23; Stip. Ex. 23. The Hearing Officer framed the issue:

Whether the participant's assistance under the Section 8 Housing Choice Voucher Homeownership Program should be terminated for fraud or other corrupt or criminal act in connection with a Federal housing program under 24 C.F.R. Section 982.552(c)(1)(iv), or because he has violated the family's obligation not to engage in other criminal activity that threatens the health, safety or right to peaceful enjoyment of other residents or persons residing in the immediate vicinity under 24 C.F.R. Section 982.552(c)(1)(i).

Stip. Ex. 23 at 3. Addressing "fraud or other criminal act," the Hearing Officer noted that the MSHA's Administrative Plan for Section 8 Housing Choice Voucher and Moderate Rehab Programs (the MSHA Plan) allows for termination of a participant for program fraud. Id. at 5; see Stip. Ex. 13 at 21. However, the Hearing Officer concluded that Mr. Miller did not commit program fraud by failing to disclose that he was required to register as a sex offender under Maine law. Relying on Dowling v. Bangor Housing Authority, 2006 ME 136, 910 A.2d 376, in which the Supreme Judicial Court interpreted "fraud" in HUD regulations according to the familiar common law standard, the Hearing Officer determined that Mr. Miller did not commit fraud because he neither made a false statement of fact regarding his status as a registrant nor was under any obligation to disclose his registrant status. Stip. Ex. 23 at 5-6.

Turning to "criminal activity," the Hearing Officer observed that the MSHA Plan permits termination of a subsidy to a participant if "`[a]ny household member engages in any ... criminal activity that threatens the health[,] safety or right to peaceful enjoyment of other residents and persons residing in the immediate vicinity of the premises.'" Id. at 4 (quoting the MSHA Plan); Stip. Ex. 13 at 20. Although the Hearing Officer was satisfied that Mr. Miller's failure to register pursuant to Maine law constituted criminal activity, she concluded that the record was inadequate to determine that Mr. Miller's conduct was sufficiently threatening to justify termination on this basis. Stip. Ex. 23 at 4; see 24 C.F.R. § 982.555(e)(6) ("Factual determinations relating to the individual circumstances of the family shall be based on a preponderance of the evidence presented at the hearing."). Rejecting both reasons for termination, the Hearing Officer set Penquis's decision aside.³

On February 9, 2007, Penquis again notified Mr. Miller of its decision to terminate his participation in the program, this time in accordance with 24 C.F.R. §§ 982.551-.553.⁴ Penquis explained that it was terminating Mr. Miller for a third reason—he "committed violent criminal activity, to wit: Child molestation in the first degree between the dates of July 1, 1995 and March 26, 1996." Stip. Ex. 24. The same MSHA Hearing Officer reviewed and set aside this decision on May 29, 2007. Stip. R. ¶ 25; Stip. Ex. 25. In the Hearing Officer's view, the issue was "[w]hether MSHA may terminate the participant's assistance under the Section 8 Housing Choice Voucher Homeownership Program for commission of violent criminal activity." Stip. Ex. 25 at 3.

Before reaching that issue, however, the Hearing Officer, conscious of statutory and regulatory mandates to deny admission to sex offenders subject to lifetime registration requirements, considered whether Mr. Miller is such a registrant. She determined that the evidence was insufficient to support a conclusion that he is required to register for life, and that his mere status as a registrant did not justify termination of his Section 8 assistance. Id. at 4-6...