Swann v. Gastonia Housing Authority

• Decision Date: 08 April 1982
• Docket Number: No. 81-1439,81-1439
• Citation: 675 F.2d 1342
• Parties: James A. SWANN and Jonell Swann on behalf of themselves and all others similarly situated, Appellees, 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; Appellants, and William Huffstetler, Defendant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1342

675 F.2d 1342

James A. SWANN and Jonell Swann on behalf of themselves and all others similarly situated, Appellees, 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; Appellants and William Huffstetler, Defendant.

No. 81-1439.

United States Court of Appeals Fourth Circuit.

Argued Nov. 3, 1981.

Decided April 8, 1982.

Graham C. Mullen, Gastonia, N. C. (Mullen, Holland & Cooper, P. A., Gastonia, N. C., on brief), for appellants.

Leslie J. Winner, Charlotte, N. C. (Chambers, Ferguson, Watt, Wallas, Adkins & Fuller, P. A., Charlotte, N. C., on brief), for appellees.

Before WINTER, Chief Judge, FIELD, Senior Circuit Judge, and CHAPMAN, Circuit Judge.

HARRISON L. WINTER, Chief Judge:

Defendants in a class action appeal from a judgment of the district court ordering that tenants in the Gastonia Section 8 Existing Housing Program not be evicted unless the Gastonia Housing Authority (GHA) has determined after a full-fledged hearing that good cause exists for the eviction. We affirm the portion of the district court's judgment holding (1) that the GHA must make a finding of good cause before approving the termination of a tenancy, (2) that a tenant in this program has a constitutionally protected expectation of remaining in his home in the absence of good cause for eviction, and (3) that the eviction constitutes state action. We disagree with the district court, however, that a full-fledged hearing before GHA is required. The statute which requires GHA to make a good cause determination does not go so far as to require a hearing, and the requirements of the due process clause are met by the hearing available in state court if the eviction is brought, as it now must be, for good cause.

Accordingly, we affirm in part and reverse in part and remand.

I.

GHA is a public housing agency which administers a Section 8 Existing Housing Program in Gastonia, North Carolina, under the provisions of 42 U.S.C. § 1437f and 24 C.F.R. part 882. In 1978, the City of Gastonia acquired for demolition the home of James and Jonell Swann. The City fulfilled its statutory duty to provide the Swanns with relocation assistance by helping them obtain a Certificate of Family Participation from GHA. This certificate entitled the Swanns to a rent subsidy from GHA if they rented from a landlord who would participate in the Section 8 Existing Housing Program.

Such a landlord, William Huffstetler, was located. On September 15, 1978, the Swanns and Huffstetler entered into a one-year lease and GHA and Huffstetler entered into a Housing Assistance Payment Contract. The lease provides that either party may terminate at any time by giving thirty days' notice. A feature of the Section 8 Existing Housing Program in Gastonia is that leases are automatically renewed at the end of their terms unless this same termination procedure is followed.

In May 1979, Huffstetler brought a summary eviction action against the Swanns, but they obtained assistance from a legal aid clinic and Huffstetler dismissed the action because he was persuaded that adequate notice to vacate had not been given. In August 1979, Huffstetler informed the Swanns that their one-year lease would not be renewed and asked them to vacate by October 1. The Swanns believed that this was in retaliation for their use of the services of the legal aid clinic.

The version of § 1437f(d)(1)(B) then in effect required all Housing Assistance Payment Contracts to 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." See 42 U.S.C. § 1437f(d)(1)(B) (1976). ¹ The regulation implementing that version of the statute, 24 C.F.R. § 882.215 (1981), provided that the landlord should send the notice to vacate to the tenant and a copy to the agency for its approval. The regulation also provided that the tenant may present his objections to the agency and that failure by the agency to act within twenty days constitutes approval of the termination. The Swanns requested GHA to disapprove the termination of their tenancy or at least to hold a hearing before making a decision. An informal conference was held, but GHA refused to deviate from its policy of allowing landlords to evict tenants at the end of their lease terms with or without good cause.

On September 22, the Swanns filed a class action founded on 42 U.S.C. § 1983 (1976), in which they alleged that their eviction violated the version of § 1437f then in effect and the due process clause of the Fourteenth Amendment. GHA, a number of its officers in their official capacities and Huffstetler were joined as defendants. The Swanns claimed to represent a class of all present and future participants in the Gastonia Section 8 Existing Housing Program. They sought only declaratory and injunctive relief. The landlord agreed to let the Swanns remain in their home pending the completion of the litigation. In early 1980, James Swann died and was dropped as a named plaintiff. The parties stipulated to the facts and filed cross motions for summary judgment.

On November 25, 1980, an order was entered granting the plaintiff's motion and denying the defendants' motion. The district court ruled that the old version of § 1437f required that GHA make a finding of good cause before approving the termination of any tenancy. With respect to the due process claim, the district court ruled that the old version of § 1437f and prevailing custom gave a tenant a constitutionally protected expectation of remaining in his home in the absence of good cause for eviction and that the eviction constituted state action. 502 F.Supp. 362.

At the end of the year, the class was certified. On April 8, 1981, a final judgment was entered. The court repeated its earlier conclusions and then, without further discussion, held that the process due is a hearing by GHA with the following elements: (a) the hearing should be conducted by an impartial decision maker who would issue a written decision, and (b) both the landlord and the tenant should have the right to counsel, the right to call witnesses, and the right to cross-examine the other side's witnesses. As a predicate to such a hearing, the judgment provided that the tenant would have to receive adequate notice of the alleged grounds for the termination of his tenancy.

II.

We begin with the question of whether the statute requires that GHA make a finding of good cause before approving the termination of a tenancy. We think that it does.

The old version of § 1437f contained no explicit good cause requirement, but we think that one was implied by the language of § 1437f(d)(1)(B). That portion of the old version required all Housing Assistance Payment Contracts to 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." See 42 U.S.C. § 1437f(d)(1)(B) (1976). This provision was pointless if the housing authority was not to exercise some judgment before an eviction occurs.

The old version of § 1437f(d)(1)(B) was applicable only to Section 8 programs involving existing housing. A different provision governed Section 8 programs involving newly constructed or substantially rehabilitated housing, and it expressly required all Housing Assistance Payment Contracts to provide "that all ownership, management, and maintenance responsibilities, including the selection of tenants and the termination of tenancy, shall be assumed by the owner." 42 U.S.C. § 1437f(e)(2) (1976) (emphasis added). This language with respect to new or rehabilitated housing supports the conclusion that the particular approval scheme provided for in the old version of § 1437f(d)(1)(B) with regard to existing housing was adopted for a reason.

It certainly is possible that the agency was meant to do nothing more than determine that evictions covered by the provision met the requirements of state law and the lease. That, of course, is all that 24 C.F.R. § 882.215 (1981) provided for. It is difficult to imagine, however, why Congress would have thought it necessary for someone other than the state courts to make that determination. We think that the most reasonable interpretation of the statute is that it was meant to require the agency to determine that good cause existed before approving the termination of a tenancy. ²

The district court gave no indication that it based the hearing requirement that it prescribed on the statute, and we think that was proper. If the agency must make a good cause determination, it follows necessarily that the landlord must state his reason for wanting to terminate the tenancy, and that the tenant must be informed of the reason and given an opportunity to respond. There is simply no basis in the statute, however, for requiring a full-fledged hearing like that ordered by the district court. Cf. S.Rep.No.871, 95th Cong., 2d Sess. (1978), reprinted in (1978) U.S.Code Cong. & Ad.News 4773, 4788 (a later Congress's expression of opinion that the statute required a good cause determination but not a hearing). We therefore must consider plaintiff's claim that the due process clause of the Fourteenth Amendment affords her a right to a full and complete hearing before GHA.

III.

For the due process clause of the Fourteenth Amendment to dictate the procedure to be followed before a tenant is evicted, two conditions must be met. First, the tenant must have an expectation, rising to the status of a property interest, of remaining in his home in the absence of good cause for eviction. Second, an eviction must constitute state action.

We have already indicated that a tenant in this Section 8 Existing Housing...