Winningham v. UNITED STATES DEPT. OF HOUSING & URB. DEV.

• Decision Date: 19 February 1974
• Docket Number: Civ. A. No. 3237.
• Citation: 371 F. Supp. 1140
• Parties: Janice WINNINGHAM, on behalf of herself and all others similarly situated, Plaintiffs, v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT et al., Defendants.
• Court: U.S. District Court — Southern District of Georgia

371 F. Supp. 1140

Janice WINNINGHAM, on behalf of herself and all others similarly situated, Plaintiffs, v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT et al., Defendants.

Civ. A. No. 3237.

United States District Court, S. D. Georgia, Savannah Division.

February 19, 1974.

COPYRIGHT MATERIAL OMITTED

David Walbert, Atlanta Ga., Elizabeth M. Youngerman, Savannah, Ga., Ga. Indigents Legal Services, Inc., for plaintiffs.

Lamar C. Walter, Asst. U. S. Atty., Savannah, Ga., Raymond C. Buday, Jr., Asst. Regional Counsel, Atlanta, Ga., for H. U. D William H. Pinson, Jr., Savannah, Ga., for Abbitt Realty and Dorothy Atkinson.

ORDER

LAWRENCE, Chief Judge.

I. Background

Mrs. Janice Winningham and four of her five children occupy an apartment in Presidential Plaza at Savannah, a section 236 housing project. That section is part of the Housing and Urban Development Act of 1968 which establishes a program of private rental housing for designated classes of lower income individuals and families.

Plaintiff seeks a declaration by this Court that a portion of the 1968 legislation and appurtenant Regulations¹ violate the Fifth Amendment in limiting eligibility for "rent supplement" to tenants "occupying substandard housing". The defendants are the Department of Housing and Urban Development; the Secretary of HUD; the Southeastern Regional Administrator, and the Manager and resident manager of the Project.

Since plaintiff has never resided in substandard housing, she is unqualified to receive supplemental rent assistance under the language of the Act. As the law is written, if Mrs. Winningham had left substandard housing and moved into Presidential Plaza, she would be entitled under the law to a substantial rent supplement.² Because of a recent change in her financial status, she is now unable to pay the "basic rental" stipulated in the lease. She claims that as a result she will be forced to leave standard housing and move into substandard housing. Plaintiff is not qualified to receive rent assistance even though she might have the identical income and family size as an eligible tenant occupying substandard housing.

Mrs. Winningham contends that the statute and Regulation as applied to her and to others similarly situated denies equal protection under the Fifth Amendment. She asks for a declaratory judgment that "12 U.S.C. § 1701s(c)(2) is unconstitutional insofar as it precludes tenants who are financially eligible from receiving rent supplement, even though they may have to move from a project because they cannot pay the Basic Rent, or even though they must suffer substantial deprivations to pay the Basic Rent."

II. Jurisdiction

Jurisdiction of this Court is predicated on various federal statutes, namely:

(a) Cases arising out of the Constitution or laws of the United States where the matter in controversy exceeds $10,000 (28 U.S.C. § 1331); (b) actions arising out of acts of Congress regulating commerce (28 U.S.C. § 1336); (c) right of review under the Federal Administrative Procedure Act by a person aggrieved by agency action (5 U.S.C. § 702); (d) actions in the nature of mandamus to compel an officer or employee of the United States or agency thereof to perform a duty owed to plaintiff (28 U.S.C. § 1361).

The jurisdictional basis of this case gives some trouble. Clearly it does not arise out of any act of Congress regulating commerce. Further, the $10,000 jurisdictional requirement would appear to be lacking for a § 1331 action arising under the Constitution and laws of the United States. The difference between the rent, with and without the supplement, is $1104.00 annually. On this basis, future annual rentals, reduced to present value, would have to be paid for over ten years to meet the jurisdictional requirement. In the analogous case of insurance disability benefits becoming due in the future it has been held that same are not includible in computing the amount in controversy. See Carroll v. Mutual of Omaha Insurance Company, 354 F.Supp. 1260 (W.D. Va.); Marcus Brown Holding Co. v. Pollak, 272 F. 137 (S.D.N.Y.). The existence of the class feature of the litigation does not change things. Damage sustained by unidentified members of the class must meet in each individual instance the jurisdictional requirements. Zahn et al. v. International Paper Company, 414 U.S. 291, 94 S.Ct. 505, 38 L. Ed.2d 511; Snyder v. Harris et al., 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319.

Under the Administrative Procedure Act, a person suffering legal wrong or aggrieved by agency action is entitled to judicial review. 5 U.S.C. § 702. There is no provision for administrative review in the statute or regulations. In fact, no formal agency action or ruling has been taken or made by HUD unless its adherence to the terms of the Rent Supplement legislation amounts to such. The federal courts have dealt rather liberally with § 702. "While the cases dealing with nonreviewability are admittedly conflicting, the later trend favors judicial review." The School Board of Okaloosa County et al. v. Richardson et al., 332 F.Supp. 1263, 1268 (N.D.Fla.); Abbott Laboratories v. Gardner, 387 U.S. 136, 140-141, 87 S.Ct. 1507, 18 L.Ed.2d 681.

The likeliest ground of jurisdiction in the instant case appears to be 28 U.S.C. § 1361 which confers same in the case of actions in the nature of mandamus brought against officers of the United States to compel performance of a duty owed to the plaintiff. Declaratory judgment, not a mandatory injunction, is sought here. If injunctive relief were still prayed, this would certainly seem to be an action in the nature of mandamus. I think it partakes of such even though only a declaration of legal rights is sought. Incidentally, the matter of compelling an officer or agency to exercise discretion in a particular manner is not involved here. HUD must abide by and carry out the statute as written. By the same token, should the legislation be unconstitutional and plaintiff held to be entitled to rent supplement, HUD officials would have no alternative other than to grant same to the particular tenant.

In Langevin v. Chenango Court, Inc. et al., 447 F.2d 296 (2nd Cir.) a declaratory judgment was sought to the effect that rent increases applicable to a section 221 housing project violates the due process rights of the plaintiff in the absence of a trial-type hearing. A temporary restraining order was also requested by plaintiff. The Second Circuit said (p. 300):

"The issue with respect to the jurisdiction of the district court has been eased by what we deem an appropriate concession by the Government that plaintiffs' claim of entitlement to a hearing before the FHA is an `action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff,' 28 U.S.C. § 1361, which has no requirement of jurisdictional amount."

In Haines v. United States, 453 F.2d 233 (3rd Cir.) only declaratory relief was sought by a plaintiff who attacked the validity of his discharge from the Air Force under other than honorable conditions. The Court treated the suit as a § 1361 action in the nature of a mandamus. See also Carter v. Seamans, 411 F.2d 767, 772-773 (5th Cir.). "The purpose of the Mandamus and Venue Act of 1962 was to provide a convenient, local federal court for aggrieved persons, particularly those wanting judicial review of federal administrative action, to obtain mandamus against federal officials." 13 A.L.R.Fed. 153. See also Byse and Fiocca, "Section 1361 of the Mandamus and Venue Act of 1962 and `Nonstatutory' Judicial Review of Federal Administrative Action", 81 Har.Law R. (Dec., 1967), pp. 308ff.

The existence of jurisdiction here is not clear. Judges have a tendency to find same where there is a semblance of statutory authority for its exercise and no other remedy is immediately open to a litigant claiming a deprivation of constitutional rights. Jurisdiction is the more readily accepted in this case since the Government has failed to raise any issue in that respect.

III. The Housing Legislation of 1968

The Act of 1949 established a national goal of "a decent home and a suitable living environment for every American family." Such objective was reaffirmed in the Housing and Urban Development Act of 1968. 42 U.S.C. § 1441a; 12 U. S.C. § 1701t. The purpose of § 236 legislation was to encourage private enterprise to engage in the development of rental and cooperative housing for lower income families who "could not otherwise decently house themselves". The highest priority and emphasis was to be given to meeting the housing needs of those families for which the national goal has not become a reality. 12 U.S.C. § 1701t.

"For the purpose of reducing rentals for lower income families, the Secretary is authorized to make . . . periodic interest reduction payments on behalf of the owner of a rental housing project designed for occupancy by lower income families, which shall be accomplished through payments to mortgagees holding mortgages meeting the special requirements specified in this section." 12 U. S.C. § 1715z-1(a). Project owners can obtain FHA-insured mortgage loans at the market rate of interest and the Department of Housing and Urban Development subsidizes interest assistance payment in an amount not exceeding the difference between payments for principal and interest on a mortgage bearing interest at 1%, and payments for principal, interest and mortgage insurance premium on a mortgage with interest at the FHA market rate. See HUD Program Guide, "Rental and Cooperative Housing for Lower Income Families", September, 1971.

A "basic rental" is charged the tenant which is determined on the basis of the private owner's operation of the project under a mortgage bearing annual interest at the rate of one per cent. The rent paid by an occupant is the greater of the "basic rent" and 25 per cent of the tenant's income. 12 U.S.C....