Withycombe v. Pierce, Civ. No. N-84-446 (PCD).
| Decision Date | 14 May 1985 |
| Docket Number | Civ. No. N-84-446 (PCD). |
| Citation | 608 F. Supp. 1177 |
| Court | U.S. District Court — District of Connecticut |
| Parties | Mary WITHYCOMBE, Carmel Romano, Florence Della Valle, Walter Faulkner, Evelyn Solomon and Ralph Archangelo, on Behalf of themselves and all others similarly situated v. Samuel PIERCE, in his official capacity as Secretary of the United States Department of Housing & Urban Development, and Carabetta Management, Inc. |
Joanne Gibau, Elisabeth Youngerman, Jon Alander, New Haven, Conn., for plaintiffs.
Patricia Sharin Flagg, U.S. Dept. of HUD, Office of General Counsel, Washington, D.C., and Frank H. Santoro, Asst. U.S. Atty., New Haven, Conn., for Secretary Pierce.
Christine S. Vertefeuille, Susman & Duffy, New Haven, Conn., for Carabetta Management.
RULING ON DEFENDANT PIERCE'S MOTION FOR SUMMARY JUDGMENT
Plaintiffs are a putative class of elderly tenants1 at the Bella Vista I and II apartments in New Haven, Connecticut, whose federally-subsidized housing rents were converted in late 1982 and early 1983 from the Rent Supplement Program2 to the Section 8 Program.3 Alleging that their monthly rents were increased beyond the 10% limit (cap) mandated by the Housing & Urban-Rural Recovery Act of 1983 (1983 Act),4 plaintiffs seek injunctive and declaratory relief and return of overpaid rents. At issue is the validity of a regulation issued on May 10, 1984,5 by defendant Samuel Pierce (Pierce), Secretary of the United States Department of Housing & Urban Development (HUD), interpreting the formula provided in § 206(d)(4)(B) of the 1983 Act for computing and applying the 10% cap to elderly tenants who had been converted prior to its enactment on November 30, 1983.
Plaintiffs allege (1) the regulation misconstrues the statute by applying the 10% cap to the pre-conversion rather than to the post-conversion rent (base figure claim); (2) by delaying implementation of the cap to the first "recertification"6 on or after October 1, 1984, the regulation has deferred the cap's benefit for many tenants for at least one year (timing claim); and (3) contrary to Congress' intention, rent increases resulting from increases in income have been excluded from the cap (income increase claim). Plaintiffs claim under the 1983 Act and the Administrative Procedures Act (APA), 5 U.S.C. §§ 701, et seq.
In moving to dismiss for failure to state a claim upon which relief can be granted or, alternatively, for summary judgment, Pierce also argues that plaintiffs lack a private cause of action under either the 1983 Act or the Housing Act of 1937 (which contains Section 8) and have incorrectly asserted the appropriate standard of review under the APA. With the introduction of facts outside the pleadings,7 Pierce's motion must be considered as one for summary judgment, Rule 12(b), Fed.R. Civ.P.; Modern Woodcrafts, Inc. v. Hawley, 534 F.Supp. 1000, 1002 n. 1 (D.Conn. 1982); 5 C. Wright & A. Miller, Federal Practice and Procedure, § 1366, at 679 (1969 Ed.), and for the reasons below, it is granted.
Plaintiffs' rents at the Bella Vista I and II projects, owned and operated by defendant Carabetta Management, Inc. (Carabetta), were first subsidized in the 1970's through the Rent Supplement Program. Under that program, a tenant's rent was the greater of 30% of the approved rent for the project (as defined by the Act) or 25% of the tenant's income.8 The program did not require regular recertification of tenants' incomes. Initially, plaintiffs' rents were computed at 25% of their incomes, but, as approved rents rose, their rents came to be 30% of approved rents. As a result, plaintiffs' rents increased with increases in approved rents. Prior to their conversion to the Section 8 Program,9 rent at Bella Vista I for plaintiffs Romano, Della Valle and Faulkner was $90 per month and at Bella Vista II for plaintiffs Withycombe, Solomon and Archangelo was $93.10
Under Section 8, rent is solely a percentage of income11 which is recertified annually. Since HUD authorized Carabetta to delay recertification of tenants' incomes until one year after conversion, which authorization is not challenged here, plaintiffs' rents for the first year after conversion were computed at 25% of their by-then outdated income levels.12 Plaintiffs' first year, post-conversion rents were substantially lower than for the preceding year.
On October 1, 1983, and May 1, 1984, plaintiffs' incomes were recertified at higher levels. As a result thereof and of the use of a 28% rate (mandated for recertifications accomplished at these times13), plaintiffs' rents were increased over their pre-conversion rents and substantially over their first year's Section 8 rents. The incomes of Romano, Della Valle and Faulkner were recertified, prior to October 1, 1984, in their third year of conversion.
Plaintiffs' rent history is in Exhibit A.
"Whether a statute ... authorizes a cause of action, either expressly or by implication, is ... a matter of statutory construction." Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 15, 100 S.Ct. 242, 245, 62 L.Ed.2d 146 (1979). It is agreed that no explicit private action exists under either the 1983 Act or the United States Housing Act. Plaintiffs assert an implicit right.
The test for an implied right is said to be: First, is the plaintiff `one of the class for whose especial benefit the statute was enacted,' .... Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? ... Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff? ... And finally, is the cause of action one traditionally relegated to state law, in an area basically the concern of the states, so that it would be inappropriate to infer a cause of action based solely on federal law?
Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2088, 45 L.Ed.2d 26 (1975) (emphasis in original; citation omitted). Satisfaction of the first test obviates satisfaction of the second. Id. at 82, 95 S.Ct. at 2089. Plaintiffs argue that as "especial" beneficiaries under the 1983 Act (), they need not satisfy the second test of Cort. In any case, legislative silence is construable as implying a private remedy. Cannon v. University of Chicago, 441 U.S. 677, 694, 99 S.Ct. 1946, 1956, 60 L.Ed.2d 560 (1979).
However, since Cort, whether such a right was intended has been held to be dispositive. California v. Sierra Club, 451 U.S. 287, 101 S.Ct. 1775, 68 L.Ed.2d 101 (1981); Davis v. Passman, 442 U.S. 228, 99 S.Ct. 2264, 60 L.Ed.2d 846 (1979); Transamerica Mortgage Advisors, 444 U.S. 11, 100 S.Ct. 242, 62 L.Ed.2d 146; Middlesex County Sewerage Auth. v. Sea Clammers, 453 U.S. 1, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981); Touche Ross & Co. v. Reddington, 442 U.S. 560, 99 S.Ct. 2479, 61 L.Ed.2d 82 (1979). "Implying a private right of action on the basis of congressional silence is a hazardous enterprise, at best." Touche Ross at 571, 99 S.Ct. at 2486; accord Sierra Club, 451 U.S. at 295-96, 101 S.Ct. at 1780.
Congressional intent is first assessed from the statutory language, then the legislative history, and then any other traditional aids to statutory interpretation. Middlesex, 453 U.S. at 13, 101 S.Ct. at 2622.
Neither the statutory language nor the legislative history supports implication of such a right. The only code provision which addresses the question of suing or being sued is 42 U.S.C. § 1404a, which might be construed as reflecting an intent to allow a private action against HUD. A private cause of action has been held not to have been intended in various housing acts. McGhee v. Housing Auth., 543 F.Supp. 607 (D.Ala.1982); Falzarano v. United States, 607 F.2d 506 (1st Cir.1979); Perry v. Housing Auth., 664 F.2d 1210 (4th Cir.1981).
Absent a clear implication of congressional intent, the claim of a private cause of action must fail. Assuming, arguendo, plaintiffs' claim to a remedy under these Acts, their case must still fail as a matter of law for the reasons below.14
"Only upon a showing of `clear and convincing evidence' of a contrary legislative intent should the courts restrict access to judicial review." Abbott Laboratories v. Gardner, 387 U.S. 136, 141, 87 S.Ct. 1507, 1511, 18 L.Ed.2d 681 (1967). Defendant does not dispute plaintiffs' cause of action,15 but asserts that review is available under § 706(2)(C) only. Plaintiffs argue that this action is reviewable under either § 706(2)(A) or (C). Courts have tended not to distinguish between the two standards, but to apply both when reviewing the validity of an agency regulation. Wilkinson v. Abrams, 627 F.2d 650 (3rd Cir.1980); Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). Thus, the test under § 706(2)(C) is whether HUD acted within its statutory authority; and under § 706(2)(A) "whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment ...." Citizens to Preserve Overton Park at 415-16, 91 S.Ct. at 823.
Great deference and weight must be accorded "to the interpretation given the statute by the officers or agency charged with its administration," Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1956), although "this deference is constrained by our obligation to honor the clear meaning of a statute, as revealed by its language, purpose, and history." Southeastern Community College v. Davis, 442 U.S. 397, 411, 99 S.Ct. 2361, 2369, 60 L.Ed.2d 980 (1979), quoting International Brotherhood of Teamsters v. Daniel, 439 U.S. 551, 566 n. 20, 99 S.Ct. 790, 800 n. 20, 58 L.Ed.2d 808 (1979); accord Chevron U.S.A., Inc. v. Natural Resources Defense, ___ U.S. ___, 104 S.Ct. 2778, 2781-2782, 81 L.Ed.2d 694 (1984). To...
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