Swann v. Gastonia Housing Authority, 79-279.

• Decision Date: 25 November 1980
• Docket Number: No. 79-279.,79-279.
• Citation: 502 F. Supp. 362
• Court: U.S. District Court — Western District of North Carolina
• Parties: Jonell SWANN, on behalf of herself and all others similarly situated, Plaintiff, v. GASTONIA HOUSING AUTHORITY; Dr. Cleveland Floyd, W. H. Keith, Robert Haygood, Sarah P. Knowles and Al Pollack Aldridge, Jr., each in his or her official capacity; Charles R. Kaylor, in his capacity as Executive Director of the Gastonia Housing Authority; and William Huffstetler, Defendants.

502 F. Supp. 362

Jonell SWANN, on behalf of herself and all others similarly situated, Plaintiff, v. GASTONIA HOUSING AUTHORITY; Dr. Cleveland Floyd, W. H. Keith, Robert Haygood, Sarah P. Knowles and Al Pollack Aldridge, Jr., each in his or her official capacity; Charles R. Kaylor, in his capacity as Executive Director of the Gastonia Housing Authority; and William Huffstetler, Defendants.

No. 79-279.

United States District Court, W. D. North Carolina, Charlotte Division.

November 25, 1980.

Leslie Winner and Theodore O. Fillette, III, Legal Services of Southern Piedmont, Charlotte, N.C., for plaintiff.

Graham C. Mullen, Mullen, Holland & Harrell, P.A., Gastonia, N.C., for all defendants except William Huffstetler, pro se.

ORDER

McMILLAN, District Judge.

This case was heard on October 8, 1980, on cross motions for summary judgment. All attorneys agree that there are no disputed facts, and that the case can be decided upon the fact stipulations, the affidavit of the plaintiff, and the verified pleadings. The record reveals the following:

The case was filed on September 21, 1979, as a class action under 42 U.S.C. § 1983 and 42 U.S.C. § 1437f, alleging improper termination of tenancies under the Section 8 Existing Housing Program.

The plaintiff, Jonell Swann, and her husband, James (who died after this suit was filed), were relocated during the summer of 1978 from a house in Gastonia which was slated for demolition. To satisfy its obligations under the Uniform Relocation Assistance and Real Property Acquisition Policies Act, 42 U.S.C. § 4601 et seq., the City of Gastonia provided relocation assistance by helping the Swanns obtain a Certificate of Family Participation in the Gastonia Housing Authority's Section 8 Program. The Section 8 Housing Assistance Program is a federal rent supplement program under which an eligible family may rent a privately owned dwelling. A family in the program pays directly to the owner 25% of the adjusted family income for rent and utilities, and the public housing authority guarantees the remainder of the fair market rent and pays that supplement directly to the owner.

In September, 1978, the Swanns moved into a house in Gastonia owned by the defendant, William K. Huffstetler, who agreed to participate in the Section 8 program. Plaintiffs signed a one-year lease. They have never violated any conditions of the lease and have always paid their portion of the rent.

In May, 1979, Mr. Huffstetler filed an action for summary ejectment, seeking to evict the Swanns. The Swanns were represented in that proceeding by Legal Services of Southern Piedmont. Mr. Huffstetler was persuaded to dismiss the action because of inadequate notice.

On August 15, 1979, Mr. Huffstetler wrote to the Swanns informing them that the lease would expire on September 15, 1979, and that he wanted them to vacate by October 1, 1979. Mr. Huffstetler gave no reasons for the desired termination.

On August 21, 1979, the Swanns, through Legal Services, requested that the defendant Housing Authority refuse to approve the termination of the lease or at least conduct a hearing. A conference but not a "hearing" on this subject was held on September 5, 1979 at the Housing Authority office. No evidence was presented. Mr. Huffstetler, the owner, stated that he might want to sell the house. The Director of the Housing Authority, the defendant Charles R. Kaylor, said that his intention was to take a "no action" position. Huffstetler announced his intention to evict the Swanns.

The Gastonia Housing Authority never sent the Swanns any notice stating the reasons why their lease was being terminated. Mrs. Swann alleges that the real reason why Mr. Huffstetler did not renew the lease was retaliation for their engaging Legal Services to defend them in the May, 1979, ejectment action.

On September 21, 1979, plaintiff filed this suit. On September 26, 1979, Huffstetler withdrew his notice to vacate. Mrs. Swann has continued to live in the house.

DISCUSSION

It is undisputed that the notice to vacate and to terminate the lease was given by the landlord, Mr. Huffstetler, rather than by the Housing Authority, and that the Housing Authority did not make a finding of good cause for the termination. Plaintiff argues that the attempted termination of the lease by Mr. Huffstetler was both a statutory violation of the provisions of the Housing and Community Development Act of 1974, 42 U.S.C. § 1437f, and a constitutional violation of the due process clause of the Fourteenth Amendment. The basic question confronting the court is whether a Section 8 tenancy may be terminated at the end of the lease term without a showing of good cause by the landlord and a determination of good cause by the Housing Authority. The statutory and constitutional claims will be examined separately.

THE STATUTORY CLAIM

The Low Income Housing Act states at 42 U.S.C. § 1437f(d)(1)(B) that Section 8 contracts between a public housing agency and an owner shall provide that:

"B. 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 the tenancy." Emphasis added.

Defendant argues unpersuasively that 42 U.S.C. § 1437f(d)(2) (which requires that the contract for an existing structure shall be for a term of not less than one month nor more than 180 months) controls, and renders the Housing Authority powerless to give notice to the tenant. The clear language of the Act expressly requires that the Housing Authority give the notice to the tenant to terminate the tenancy. The Act makes no distinction between notice given at the expiration of a lease term and notice given for a violation of lease conditions.

The more difficult question is whether the Low Income Housing Act requires the Housing Authority to make a finding of good cause for the termination before issuing a notice to vacate. The court is persuaded that the legislative history and the very purposes of the Act indicate that a finding of good cause is required. Congress would not have required the Housing Authority to issue the notice to vacate unless they intended that eviction not take place without a finding of good cause.

While the statute was making its way through the Senate, an amendment to Section 8 was proposed which would have given Section 8 landlords the authority to evict tenants directly without any review or action by the local Housing Authority. The proposal was rejected. The Senate report telling why the amendment was rejected reads in pertinent part as follows:

"In considering this bill, the committee rejected a proposal by the administration which would have permitted landlords of section 8 existing housing projects to evict tenants without review by the local public housing authorities (PHA) which administer the programs.

"The present law, which requires PHA approval, provides substantial protection for the tenant, such as the opportunity to object if the eviction violates the lease or is without good cause.... In addition, adoption of the proposal would leave section 8 tenants to rely on State and municipal laws for protection, and the committee does not feel that HUD has provided ample information on the extent to which this protection would be sufficient. Senate Report, No. 95-871, 95th Congress, Vol. 5 U. S. Code Congressional and Administrative News 4473, 4788." Emphasis added.

The stated purpose of the Low Income Housing Act 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 parties have stipulated that providing a decent home and suitable living environment includes providing an atmosphere of stability, security and fairness.

The purpose of the Act would be frustrated if a landlord were allowed to participate in and take advantage of the economic security provided to landlords under the Act, and yet the tenant were stripped of any reciprocal security by being vulnerable to eviction without good cause at the expiration of the lease term. Congress could not have intended such unfairness and insecurity in an area as critical for low-income families as is basic housing.

THE DUE PROCESS CLAIM

In order for the due process clause of the Fourteenth Amendment to require that a Section 8 tenancy be terminated only for good cause, the termination of the tenancy must be characterized as state action and Section 8 tenants must have a property interest in their tenancy at the expiration of the lease term. The court finds that both requirements are met in this case and that due process requires a determination of good cause.

Under the Low Income Housing Act, as discussed above, the Housing Authority has the sole right to issue notice to vacate. The termination of the tenancy by the Housing Authority, a government agency, is state action. Even if the statutory provisions and the HUD regulations, 24 C.F.R. § 882.215, were construed to require that the Housing Authority only actively approve or disapprove or passively disapprove the termination, nevertheless the act of terminating the tenancy would still be state action. See Fenner v. Bruce Manor, Inc., 409 F.Supp. 1332, 1343 (D.Md.1976).

The state action requirement is met, however, regardless of whether the Act and regulations are interpreted to place the duty of giving notice of termination upon the landlord or upon the Housing Authority. Defendant argues that the action complained of is termination of the tenancy by the landlord, not by the Housing Authority, and that the court must confront Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974), by examining the landlord's contacts with the government. Under Jackson, the inquiry is "whether there is a sufficiently close nexus between the State and the challenged activity of the regulated entity so that the action of the latter may be fairly treated as that of the State itsel...