Phelps v. Housing Authority of Woodruff, 83-1873

• Decision Date: 24 August 1984
• Docket Number: No. 83-1873,83-1873
• Citation: 742 F.2d 816
• Parties: Rosa Lee PHELPS; Lewis A. McAbee; Branda Switzer; Carolyn Poole; Mary Ann Gory; Joyce Wooford; Emma Young and Sandra New, individually and on behalf of all others similarly situated, Appellants, v. HOUSING AUTHORITY OF WOODRUFF and L.G. Casey, individually and in his official capacity as Director of the Housing Authority of Woodruff, and their officers, subordinates and successors, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 816

742 F.2d 816

Rosa Lee PHELPS; Lewis A. McAbee; Branda Switzer; Carolyn

Poole; Mary Ann Gory; Joyce Wooford; Emma Young

and Sandra New, individually and on

behalf of all others similarly

situated, Appellants, v. HOUSING AUTHORITY OF WOODRUFF and L.G. Casey, individually

and in his official capacity as Director of the

Housing Authority of Woodruff, and their

officers, subordinates and

successors, Appellees.

No. 83-1873.

United States Court of Appeals, Fourth Circuit.

Argued Feb. 8, 1984.

Decided Aug. 24, 1984.

Harold F. Daniels, Piedmont Legal Services, Inc., Spartanburg, S.C., for appellants.

William E. Walsh, T.E. Walsh, Spartanburg, S.C., (Gaines & Walsh, Spartanburg, S.C., on brief), for appellees.

Before WIDENER, HALL and PHILLIPS, Circuit Judges.

JAMES DICKSON PHILLIPS, Circuit Judge:

In this action brought under 42 U.S.C. Sec. 1983, plaintiffs appeal from judgment entered for the defendants after a trial to the court. We affirm.

I

This suit challenges the legality of defendants' policies regarding admission of new tenants to Kelly Acres, a 100-unit public housing project located in Woodruff, South Carolina, and their methods of processing applications for tenancy at Kelly Acres. ¹ The named plaintiffs represent a class of eligible applicants who allegedly have been aggrieved by these practices in a number of respects. ²

Kelly Acres opened on March 1, 1976, as a result of efforts by the Housing Authority to fulfill its purpose of providing safe, decent and sanitary housing to low-income persons. Construction was originally financed from proceeds of bonds issued by the Authority, but since completion of construction, the debt service on these bonds has been paid by the United States Department of Housing and Urban Development (HUD). Although the principal source of funds for current operations is rent received from Kelly Acres' tenants, HUD also provides an annual operating subsidy, the amount of which depends primarily upon HUD's budget allocation from Congress.

As a precondition to receiving debt service funds, the Authority entered into an Annual Contributions Contract (ACC) with HUD, a 40-year contract that specifies the amounts to be paid by HUD and the duties of the Authority as manager/operator of Kelly Acres. The ACC, executed in 1975, requires the Authority to operate Kelly Acres not only in accord with provisions of the ACC, but in compliance with the United States Housing Act of 1937, as amended, and HUD regulations as well. HUD has performed periodic audits of Kelly Acres to ensure the Authority's compliance with these conditions.

Applicants for tenancy at Kelly Acres are selected in accord with rules and regulations adopted by the Authority as approved by HUD. Each prospective tenant must submit a written application, the contents of which must be verified by the Executive Director. The application must be complete and verified before a unit may be offered, and all information regarding eligibility must be reverified if the application is more than 30 days old. The Authority discards applications that have been classified as inactive. The Authority does not notify applicants of the date they can expect to gain occupancy.

In considering which of its many applicants to admit, the Authority first considers the size of the vacant apartment vis-a-vis the size of the applicant's family. Kelly Acres's 100 units include 26 one-bedroom apartments, 30 two-bedroom apartments, 12 four-bedroom apartments, and 2 five-bedroom apartments. Historically, there has been little demand for the four- and five-bedroom apartments, but a shortage of two- and three-bedroom apartments.

Second, the Authority considers the applicant's rent paying ability. ³ In keeping with its statutorily-mandated goals of maintaining solvency ⁴ and achieving a broad tenant mix across a range of incomes, the Authority, with HUD approval, has adopted rent ranges and has allocated numbers of apartments to these ranges as follows:

Finally, the Authority considers various preferences to which applicants might be entitled by virtue of some special status. Kelly Acres's 1976 HUD-approved policy handbook gives admissions to the following types of applicants, in order of importance:

1. Families displaced by governmental action or natural disaster.

2. Families of servicemen and families of veterans.

3. Families who are transferred due to work in the area.

4. Families in unsuitable living conditions (without housing or living in substandard housing).

The Handbook further sets priorities based upon three other criteria:

1. Families who live in Spartanburg County School District No. 4.

2. Families having an urgent need.

3. Date and time of application.

Thus, although the chronological order in which an application is submitted is afforded some importance, many other factors are considered more important. ⁵

Since Kelly Acres opened its doors in 1976 it has consistently maintained a pool of applications far in excess of its available units. Nevertheless, it did not achieve 100% occupancy until December 8, 1982, some six years later. HUD audits over the years disclosed large numbers of units left vacant over considerable time periods. An audit conducted on July 13, 1982, indicated an average vacancy period of 123 days for the 11 units then vacant. Evidence at trial indicated that at least four apartments of varying size were vacant for periods of 1 1/2 to 3 3/4 years, even though HUD had, in May 1977, waived rent range and unit size standards until Kelly Acres achieved 95% occupancy.

The named plaintiffs, all of whom were eligible for occupancy at Kelly Acres, submitted applications for rental of two- or three-bedroom apartments on varying dates. All of them were either denied admission or waited for long periods before being offered an apartment. This table reflects the eligibility dates of the named plaintiffs and their probable rent ranges: ⁶

Several of these plaintiffs, i.e., Gory, Young, and New, lived in substandard housing at the time they submitted their applications, making them eligible for preferential treatment. Yet other applicants, not entitled to preference, were admitted before they were.

Plaintiffs brought suit in November 1982 alleging that defendants had violated 42 U.S.C. Sec. 1983 in several respects. First, plaintiffs in subclass B asserted that they were, in accordance with the terms of 42 U.S.C. Sec. 1437d(c)(4)(A), entitled to preferential treatment in admissions to Kelly Acres because at the time of their applications they were living in substandard housing or were involuntarily displaced. Defendants, they alleged, had not afforded them this treatment, thereby denying them "rights secured by the ... laws" of the United States. Second, subclass A plaintiffs argued that defendants' failure to notify them of expected dates of occupancy deprived them of rights secured by 42 U.S.C. Sec. 1437d(c)(3)(ii). Third, subclass B plaintiffs alleged that defendants had deprived them of a "property interest" in this preference without due process of law, in violation of the fourteenth amendment to the United States Constitution. Finally, subclass C tenants alleged that they had been denied equal protection of law by the defendants' practice of holding units vacant awaiting applications from tenants able to pay a higher rental rather than renting to currently available lower income applicants. Plaintiffs sought damages as well as declaratory and injunctive relief.

Trial was had to the court in July 1983, after which judgment was entered for defendants. On authority of Perry v. Housing Authority of Charleston, 664 F.2d 1210 (4th Cir.1981), the court held that plaintiffs had proved no cognizable cause of action under Sec. 1983. Alternatively, the court held that plaintiffs had not proved that any particular plaintiff had been denied a preference and as a result had been denied admission to Kelly Acres; and that, as a finding of fact, the Authority had not held apartments open to await higher income tenants. Finally, the court refused to award damages, holding that even if liability had been proven, the records did not furnish evidence sufficient to calculate a non-speculative award. This appeal followed.

II

The plaintiffs first contend that the district court erred in holding that the defendants had not deprived them of "rights secured" by the Housing Act as amended, 42 U.S.C. Sec. 1437. The plaintiffs dispute both the court's legal conclusion that the Housing Act's preference provisions did not give rise to rights actionable under 42 U.S.C. Sec. 1983 and its finding that, in any event, plaintiffs had not been denied such rights. Because we agree with the district court's legal conclusion, we find it unnecessary to address the plaintiffs' factual contentions.

It is of course now established that 42 U.S.C. Sec. 1983 may be invoked to redress certain violations of federal statutory law by state actors. See Maine v. Thiboutot, 448 U.S. 1, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980); Middlesex City Sewage Authority v. National Sea Clammers Association, 453 U.S. 1, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981). It is equally clear, however, that not all violations of federal law are so actionable. Determining whether violation of a particular federal statute gives rise to Sec. 1983 liability involves two inquiries. First, whether Congress, in enacting the statute, manifested in the statute itself an intent to foreclose its private enforcement? Second, whether the statute is of a kind aimed at creating enforceable "rights" under Sec. 1983? Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 101 S.Ct. 1531, 67 L.Ed.2d 694 (1981); Middlesex, 453 U.S. at 17-20, 101 S.Ct. at 1539-41.

Plaintiffs argue that two such rights are implicit in the Housing Act and HUD regulations implementing it. First they contend that 42 U.S.C. Sec. 1437d(c)(4)(A), and accompanying regulations, confers upon them a right to preferential...