Wiggins v. US DEPT. OF HOUSING AND URBAN DEV.

• Decision Date: 02 October 1981
• Docket Number: Civ. No. K-80-1030,K-80-2914.
• Citation: 523 F. Supp. 1170
• Parties: Addie WIGGINS, et al. v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al. Thurman HILL, Jr., et al. v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al.
• Court: U.S. District Court — District of Maryland

523 F. Supp. 1170

Addie WIGGINS, et al. v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al.

Thurman HILL, Jr., et al. v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al.

Civ. Nos. K-80-1030, K-80-2914.

United States District Court, D. Maryland.

October 2, 1981.

Kenneth Montgomery, Robert McCaig and Kathleen C. Murray, Baltimore, Md., for plaintiffs in Nos. K-80-1030 and K-80-2914.

John C. Eidleman, Baltimore, Md., for plaintiffs in No. K-80-2914.

J. Frederick Motz, U. S. Atty., and Elizabeth H. Trimble and Ellen Hollander, Asst. U. S. Attys., Steven M. Goldstein, U. S. Dept. of Housing and Urban Development, Washington, D. C., for defendants U. S. Dept. of Housing and Urban Development and Samuel Pierce,¹ Secretary of the U. S. Dept. of Housing and Urban Development in Nos. K-80-1030 and K-80-2914.

Howard Cassin, Baltimore, Md., for defendant Lakeside Apartments Partnership Limited, in No. K-80-1030.

Samuel Blibaum, Baltimore, Md., for defendant Fairbrook Park Apartments Co., in No. K-80-2914.

FRANK A. KAUFMAN, Chief Judge.

Plaintiffs, who, pursuant to Section 8 of the United States Housing Act of 1937 as amended, 42 U.S.C. § 1437f, are recipients of public housing assistance to tenants residing in existing housing units, ask this Court to declare invalid certain regulations promulgated by the Secretary of Housing and Urban Development (HUD) (which appear at 24 C.F.R. Part 886, Subpart A) as violative of Section 8 and due process of law.² HUD has moved to dismiss, under Federal Civil Rule 12(b)(6), the complaints in these two cases.

The named plaintiffs have each received, during the past three years, one or more notices terminating their respective tenancies.³ Those notices came from plaintiffs' respective landlords (i. e. defendants Lakeside and Fairbrook), rather than from HUD or from any local public housing agency (PHA).⁴ Plaintiffs contend that either HUD or a local PHA must give such notices. Plaintiffs further contend that, before giving any such notice, HUD or the PHA must conduct a hearing. HUD argues that it has discretion to allow plaintiffs' landlords to provide any such notice, and that no administrative hearing of any kind is required.⁵

I.

Section 8 was first enacted in its present form in 1974. It created different forms of housing assistance programs depending upon whether the tenant lived in a newly constructed, rehabilitated, or existing building unit. The purpose of Section 8 is to "aid lower-income families in obtaining a decent place to live and to promote economically mixed housing * * *."⁶ Recipients of benefits reside in privately-owned housing units, the owners of which contract directly with either HUD or a local PHA.⁷ Section 1437f(b)(1) provides:

* * * In areas where no public housing agency has been organized or where the Secretary determines that a public housing agency is unable to implement the provisions of this section, the Secretary is authorized to enter into such contracts and to perform the other functions assigned to a public housing agency by this section.⁸

(Emphasis supplied)

Housing Assistance Payment (HAP) contracts between an owner and HUD or between an owner and the PHA establish a maximum rent which the owner may charge for each assigned unit.⁹ The tenant pays some fixed percentage of the tenant's income to the owner, and HUD or the PHA pays to the owner the remainder of the rent.¹⁰ Certain parts of Section 8 provide for certain terms to be included in the HAP contracts. Among them is Section 1437f(d)(1), which provides:

(d)(1) Contracts to make assistance payments entered into by a public housing agency with an owner of existing housing units shall provide (with respect to any unit that —

* * * * * *

(B) the agency shall have the sole right to give notice to vacate, with the owner having the right to make a representation to the agency for termination of tenancy; * * *.

(Emphasis supplied)

Section 1437f(e) deals with housing assistance to those who live in newly constructed or substantially rehabilitated housing (as opposed to existing housing). Subsection (2) thereof provides:

The contract between the Secretary and the owner with respect to newly constructed or substantially rehabilitated dwelling units shall provide that all ownership, management, and maintenance responsibilities, including the selection of tenants and the termination of tenancy, shall be assumed by the owner (or any entity, including a public housing agency, approved by the Secretary, with which the owner may contract for the performance of such responsibilities), except that the tenant selection criteria shall give preference to families which occupy substandard housing or are involuntarily displaced at the time they are seeking housing assistance under this section. In approving any public housing agency to assume all the management and maintenance responsibilities of any dwelling unit under the preceding sentence, the Secretary may do so without regard to whether such agency administers the housing assistance payment contract for that unit.

(Emphasis supplied)

Plaintiffs contend that the implications — at least the negative implications — of the above quoted statutory provisions, require HUD to give termination notices if HUD contracts directly with owners in connection with the existing housing program, rather than acting through a local PHA. HUD contends that if HUD contracts directly with owners in connection with any such existing housing program, HUD has discretion to give or to refuse to give termination notices and thus to permit those notices to be given by landlords acting alone without any approval or participation by HUD.

HUD has established several programs under the rubric of Section 8, including the Existing Housing Program,¹¹ the New Construction Program,¹² the Substantial Rehabilitation,¹³ and the Additional Assistance Program (AAP).¹⁴ Plaintiffs in the within cases receive aid under AAP, and raise questions herein with regard to that program only.

AAP was initiated in 1976 to help financially troubled multi-family housing projects subject to HUD-insured or HUD-held mortgages. The HUD Handbook explains how the program differs from the ordinary Existing Housing Program:

This new program differs from the Section 8 existing housing program as administered by PHAs in several important respects, and is structured so that:

* * * * * *

c. the contract is administered by HUD, not the PHA,

d. the PHA role is limited to approval of eviction actions, except that, at the option of the Area/Insuring Office Director, the PHA may perform unit inspections on a contract basis,

* * * * * *

f. Insuring Office Directors as well as Area Office Directors are authorized to perform all essential program functions in administering the new program.¹⁵

HUD's regulations explain the rationale for the difference in administration:

Since HUD, as part of its loan management activities, is responsible for most of the activities assigned to a PHA in the Section 8 Existing Housing program, duplicative PHA activities are not required. However, because of the PHA's expertise in connection with evictions, the PHA will be invited to perform the function of authorization of evictions, for an agreed fee. In addition, the PHA may be invited to perform inspections of dwelling units, on a fee basis, if HUD determines that such inspections will be performed more efficiently and economically by the PHA. The Contract will be directly between HUD and the Owner, with the PHA as a party for the purpose of supervising evictions and for such other purposes as may be negotiated.¹⁶

When HUD approves the application of an owner to receive benefits under AAP, it advises the local PHA of HUD's intention to enter into such a contract, and invites the PHA to become a party to the contract.¹⁷ No PHA in Maryland has accepted that invitation from HUD.¹⁸

The regulations governing evictions under the AAP which plaintiffs challenge are set out in 24 C.F.R. § 886.128:

§ 886.128 Evictions.

(a) The Owner shall not evict the Family unless the Owner complies with the requirements of local, if any, and of this section. The Owner shall give the Family a written notice of the proposed eviction, stating the grounds and advising the Family that it has 10 days (or such greater number, if any, that may be required by local law) within which to respond to the Owner.

(b) Where a PHA is a party to the Contract between the Owner and HUD, the Owner must obtain the PHA's authorization for an eviction; accordingly, a copy of the notice shall be furnished simultaneously to the PHA, and the notice shall also state that the Family may, within the same time period, present its objections to the PHA in writing or in person. The PHA shall forthwith examine the grounds for eviction and shall authorize the eviction unless it finds the grounds to be insufficient under the Lease. The PHA shall notify the Owner and the Family of its determination within 20 days of the date of the notice to the Family, whether or not the Family has presented objections to the PHA. If the Owner has not received a response from the PHA within 20 days, he shall telephone the PHA and shall be informed by the PHA whether a notice of determination has been mailed. If the PHA informs the Owner that no notice has been mailed within the 20-day period, the PHA shall be deemed to have authorized the eviction. The PHA shall be entitled to a fee as provided in the Contract for each proposed eviction action submitted by the Owner and reviewed by the PHA.¹⁹

Section 8 seemingly establishes that HUD may assume the role of the PHA in contracting with owners of existing housing and that HUD may perform other functions including the issuance of notices of eviction. However, the statute is ambiguous as to whether HUD must give eviction notices to those residing in existing housing when HUD contracts directly with the owner. In the light of...