Volume 42, Numbers 3–4

July–August 2008

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Taking action to end poverty

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Online Discussion on the Foreclosure CrisisJoin at any time. For free registration, go to http://groups.google.com/group/ clearinghousereview_foreclosure

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Opening in August:

Online Discussion on Section 8 Voucher Termination HearingsYou may register now. For free registration, go to http://groups.google.com/group/ clearinghousereview_phabestpractices

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MORE:

Displaced Workers and Trade Adjustment Assistance

Technological Barriers to Public Benefits Administration

Buckhannon on When a Party Prevails

Best Practices for Public Housing Agencies

A Human Rights Strategy to Eliminate Discrimination Against Women

Massachusetts’ Health Care Reform

Race-Conscious Community Lawyering

Ending Poverty and Reducing Inequality

AND A NEW COLUMN:

Ethics and Legal Aid

Use Contract Law to Enforce Third-Party Beneficiary Claims Against Vendors and Agencies

Clearinghouse REVIEW Journal of Poverty Law and Policy n July–August 2008188

Authors’ Acknowledgments

We wish to acknowledge the other Equip for Equality staff members who worked on this case: Kevin Irvine, Karen Ward, and John Whitcomb.

Barry C . TaylorLegal Advocacy Director

Laura J . MillerManaging Attorney

Equip for Equality20 N. Michigan Ave. Suite 300Chicago, IL 60602312.341.0022barryt@eqipforequality.orglaura@equipforequality.org

Case of First Impression: Massachusetts Supreme Judicial Court Sets Minimum Requirements for Section 8 Termination Hearings and Resulting Administrative DecisionsParticipants of the Section 8 Housing Choice Voucher program who find themselves facing termination for alleged violations of the program’s rules have long been entitled to a hearing be-fore termination of the benefit, a recognized property interest (see Spence v. Gormley, 439 N.E.2d 741, 751 (Mass. 1982); Wojcik v. Lynn Housing Authority, 845 N.E.2d 1160, 1163 n.4 (Mass. App. Ct. 2006)). However, the U.S. Department of Housing and Urban Development’s regulations regarding the actual hearing and the obligations of a reviewing hearing of-ficer have been vague and troublesome since enactment (see 24 C.F.R. §§ 982.552, 982.555 (2007)). The Lynn Housing Au-thority and other public housing authorities historically have taken the position that the role of the reviewing hearing of-ficer is quite limited (see Wojcik, 845 N.E.2d at 1163, 1165). The Lynn Housing Authority’s interpretation of the regulations was that the hearing officer had no obligation to write a deci-sion that included factual determinations. Its position was that the hearing decision just needed to recite basic facts elicited at the hearing and conclude whether the housing authority’s proposed action was sustained or overturned.

Before this litigation, the Lynn Housing Authority maintained that the hearing officer was not required to provide findings of fact and conclusions of law. The housing authority also disputed the level of discretion available to the hearing offi-cer and suggested that the hearing officer had no authorized discretion to offer a lesser sanction short of termination (see id. at 1163, 1165, 1168). We brought Carter v. Lynn Housing Authority, 880 N.E.2d 778 (Mass. 2008), to preserve the plain-tiff’s Section 8 voucher and to challenge this housing author-ity’s practices in its termination hearings. The result is a clear requirement that hearing officers provide meaningful process, hearings, and decisions that reflect the evidence and the dis-cretion of presiding hearing officers.

Factual Background

The Northeast Housing Court, after cross-motions for sum-mary judgment, allowed the plaintiff’s motion and denied the defendant’s, annulled and set aside the termination of the plaintiff’s Section 8 benefits, and ordered that the defendant restore the plaintiff’s benefits.

Plaintiff’s History

Before the termination of her Section 8 Housing Choice Vouch-er benefits, the plaintiff had been a participant in the voucher program for more than ten years without incident. A disabled, single mother of two children, she had used the voucher for housing only in the city of Lynn. In March 2000 the plaintiff and her youngest son, now a teenager, moved to a new apart-ment. The voucher was used there until the plaintiff moved from the apartment in September 2002. The plaintiff moved as the result of a mutual termination of the tenancy; the ter-mination was negotiated in housing court when the landlord sought to evict her. As part of the negotiated judgment, the landlord was required to return the plaintiff’s security deposit, which he had held illegally, and refund more than $1,000 in illegal rent overcharge payments. Nearly three months after the plaintiff moved, the landlord filed a small claims case in the same housing court; the landlord alleged more than $2,000 in “waste.” The plaintiff appeared at the small claims hearing unrepresented. After hearing the evidence, the small claims clerk entered judgment for the landlord for $1,400.

After learning of the judgment, the defendant, Lynn Hous-ing Authority, notified the plaintiff that it was terminating her housing benefits. The defendant alleged that the plaintiff had violated the housing quality standards of the Section 8 pro-gram (24 C.F.R. § 982.551 (2007)). The plaintiff, pro se, at-tended the administrative hearing and presented evidence and witnesses, but the hearing officer upheld the housing author-ity’s decision to terminate her benefits. The hearing officer’s decision contained no discussion of what weight, if any, the hearing officer gave to the plaintiff’s evidence. The findings of fact simply parroted the regulatory authority to terminate. Un-clear were whether the hearing officer knew of mitigating cir-cumstances that might have affected his decision, how these mitigating circumstances could affect his decision, or whether he was aware of his own discretionary ability to impose a sanction less than termination (see 24 C.F.R. § 982.552(c)(2)(i) (2007)). In short, his decision lacked findings of fact and con-clusions of law sufficient for a reviewing court to determine the adequacy of the hearing (Carter, 880 N.E.2d at 785–87).

Pro se, the plaintiff filed a motion for preliminary relief in the housing court. The court granted such relief—continuance of her benefits until a trial on the merits. She then sought counsel.

Legal Claims

The plaintiff’s pro se complaint sought a reversal of the hear-ing officer’s decision to uphold the termination of her Section 8 voucher benefits. After the plaintiff retained counsel, her complaint was amended to allege two claims both premised on the Lynn Housing Authority’s lack of authority to terminate her benefits. The plaintiff’s first claim asserted that, because

Case Notes

Clearinghouse REVIEW Journal of Poverty Law and Policy n July–August 2008 189

she was not living in the subject apartment at the time of the termination, the housing authority was not allowed to termi-nate. The plaintiff could not contest the housing court’s final findings—in the small claims action—that she or her family caused damages beyond normal wear and tear to the apart-ment. However, she did argue that her breaching of the hous-ing quality standards of the apartment by causing damage to that apartment ended in 2002. In 2003 she was under an ob-ligation to comply with the housing quality standards of her current apartment. The defendant’s 2003 decision to termi-nate her subsidy did not allege that she was breaching (or breached) the housing quality standards in her current apart-ment. The plaintiff argued that 24 C.F.R. § 982.404 did not authorize the defendant to terminate her subsidy for a past breach of a housing quality standard. Neither the trial court nor the Supreme Judicial Court addressed this argument.

The plaintiff’s second claim was that, even if the Lynn Hous-ing Authority had authority to terminate, it did not exercise discretion in doing so. Although the housing authority pos-sessed regulatory authority to terminate the subsidy in these circumstances, 24 C.F.R. § 982.552(c) authorized, but did not require, a housing authority to terminate assistance. The plaintiff argued that the housing authority must exercise dis-cretion in deciding what sanction to impose and that it was not allowed to terminate assistance without considering the myriad factors that might indicate that a sanction less than subsidy termination was appropriate. Because the plaintiff brought both claims under 42 U.S.C. § 1983, the plaintiff also sought an award of attorney fees under the applicable 42 U.S.C. § 1988.

Housing Court’s Decision

After reviewing cross-motions for summary judgment, the housing court denied the defendant’s motion, granted the plaintiff’s, and ordered that her benefits be reinstated. Having found no violation of Section 1983, the court did not award fees. The court noted that the tenant was obviously disabled as “she has a significant hearing impairment that is obvious to this court” (Carter, 880 N.E.2d at 783 n.9). Ultimately the court found that, where an agency has discretion, it must ex-ercise that discretion and that the hearing officer’s decision did not reflect any such exercise. The Lynn Housing Authority appealed to the Appeals Court of Massachusetts.

Appeals Court of Massachusetts’ Decision

In a 2-to-1 holding, the Appeals Court of Massachusetts, find-ing that the hearing officer’s decision was adequate, reversed the housing court’s holding. The appeals court ruled that be-cause the tenant had not affirmatively raised any mitigating circumstances, none needed to be considered. However, a dis-senting opinion noted the friction between the Carter case and another Massachusetts Appeals Court decision decided the same day against the same housing authority (counsel were the same for both cases) (Wojcik, 845 N.E.2d at 445 (Duffly, J., dissenting)). The dissenting justice called attention to the incomplete record as well as the inadequacy of the hearing of-ficer’s decision. The plaintiff then requested further appellate review from the Supreme Judicial Court.

First Decision of the Massachusetts Supreme Judicial Court

The Supreme Judicial Court granted further appellate review (less than 10 percent of such requests are granted), and oral arguments were heard on March 8, 2007, before six of the seven then-sitting justices (the seventh justice tragically and unexpectedly died only days after the argument). Richard Glassman and Thomas Murphy of the Disability Law Center submitted on behalf of the plaintiff an excellent amicus brief pointing out the difficulties that might be experienced by per-sons with disabilities if the appeals court decision placing the burden of coming forward with mitigating circumstances were allowed to stand.

After oral argument, the Supreme Judicial Court was equally divided. Under Massachusetts Rules of Appellate Procedure 24.1, an order was issued, the effect of which was as if the court had denied the plaintiff’s request for further appellate review. Thus the decision of the appeals court stood as the final judgment in the case. The plaintiff requested further ap-pellate review based on the importance of the issues before the court: primarily the novel issue of the use of discretion in these types of administrative hearings (an issue not yet ruled on by any other court in the country) and the requirement that the unrepresented tenant must affirmatively raise mitigating circumstances for such circumstances to be considered even if the tenant was not advised of the potential impact of such circumstances on the ultimate decision.

Second Decision of the Massachusetts Supreme Judicial Court

In a rare decision to rehear the case, the Supreme Judicial Court allowed further appellate review after the governor ap-pointed a seventh justice to the bench. (Unofficially the deci-sion to rehear the case is one of only three in a twenty-year span; allowing further appellate review reflected the court’s interest in the case and precedential value of the majority’s decision.) The case was scheduled for oral argument again, on November 8, 2007, and the parties presented their positions before a lively bench.

In a precedent-setting decision, the court ruled 5-to-2 that the defendant had not complied with the applicable Section 8 regulations. It confirmed what the housing court had conclud-ed: “That the hearing officer erred by failing to indicate that he had considered ‘all relevant circumstances’ as required by 24 C.F.R. § 982.552(c)(2)(i)” (Carter, 880 N.E.2d at 780). The court remanded the case to the Lynn Housing Authority for a new hearing “with instructions to provide the plaintiff with the opportunity to produce evidence of any relevant circum-stances, to acknowledge as potentially mitigating any relevant circumstances, and to indicate affirmatively in his ruling the basis on which he chose to exercise or not exercise his discre-tion....” (id. at 787).

Implications and Commentary

The effects of the Carter case are numerous and beneficial. Locally the effect of this decision is to break the unlawful

Case Notes

Clearinghouse REVIEW Journal of Poverty Law and Policy n July–August 2008190

practices of the Lynn Housing Authority, which has for years now terminated participants’ benefits without adequate con-sideration of participants’ circumstances and without written decisions that reflect findings of fact and conclusions of law. This is a housing authority that had been repeatedly told by the housing court to change its practices but that, until now, refused to do so.

The Carter decision instructs hearing officers about their discretionary decision-making abilities and gives these hear-ing officers a clear delineation of their roles as independent deciders—a distinction perhaps not fully understood until this decision. Hearing decisions must contain findings of fact that will allow a reviewing court to determine what evidence was considered and what weight it was given. They must contain conclusions of law that apply those facts to the law and dem-onstrate that the hearing officer used independent discretion in deciding on the appropriate sanction to be imposed based on those facts and the law.

Perhaps one of the most notable aspects of Carter can be found in footnote 17. At all levels of this case, the plaintiff argued that, although the regulations clearly placed the bur-den of presenting evidence to controvert a housing authority’s decision to terminate on the participant, the hearing officer was in the best place to clarify what might often be a cloudy record, in particular and most important when the participant was unrepresented and disabled. Writing for the court’s ma-jority, Chief Justice Margaret Marshall observed that “it is rea-sonable to expect the hearing officer to make inquiry about relevant circumstances that are obviously presented by the situation” (Carter, 880 N.E.2d at 787 n.17). In clarifying this role for hearing officers, Marshall suggested that a

hearing officer might ask, “Are there any other facts that I should know about, particularly those relat-ing to the extent of the participation in the incident of the family member involved, the disability of any family member in the household, or the effects the termination of assistance might have on other fam-ily members who weren’t involved in this incident?” [(id.).]

Marshall continued, “Such an inquiry by a hearing officer does not place an unworkable burden on him or her” (id.).

Although other administrative agencies—such as the Social Security Administration, agencies deciding workers’ compen-sation, and agencies deciding unemployment benefit claims—require decision makers to help develop the record and parse out the issues, no such duty had been articulated for Section 8 terminations.

Advocates now have one additional tool to use to convince re-viewing courts that Section 8 administrative hearing decisions should be reversed or remanded for complying decisions. This tool can be critical where, as here, the tenant went to the ad-ministrative hearing by herself and contacted an attorney only after the administrative hearing decision had been issued.

Jennifer HaydenStaff Attorney

Jim BreslauerAdvocacy Coordinator

Neighborhood Legal Services170 Common St. Suite 300Lawrence, MA 01840-1558978.686.6900jhayden@nlsma.orgbres@nlsma.org

Tenants Force a Policy Change at HUD and Protect Subsidized Housing Stock in Doing SoExperts estimate that in the past decade we have lost well over 100,000 public housing units throughout the country. Public housing residents in revitalizing neighborhoods, who would otherwise be the beneficiaries of this community revitalization, are increasingly being forced out of their communities as units are lost. This was the prospect facing residents of Jane Add-ams Village in 2006.

Jane Addams Village was an 84-unit public housing family development in Rockford, Illinois. In 2006 the Rockford Hous-ing Authority sought and obtained the permission of the U.S. Department of Housing and Urban Development (HUD) to de-molish Jane Addams Village. On July 31, 2007, two tenants of Jane Addams Village, represented by the Sargent Shriver Na-tional Center on Poverty Law and Prairie State Legal Services, filed a federal lawsuit in the Northern District of Illinois against HUD and the housing authority to stop the demolition (Jones v. HUD, 05-cv-50142). At the center of the litigation were the meaning and the application of Section 18 of the U.S. Housing Act of 1937 (42 U.S.C. § 1437p).

Section 18 of the U .S . Housing Act of 1937 and the Regulatory Framework

A public housing agency may eliminate portions of its pub-lic housing stock by submitting applications to HUD for full demolition or partial demolition of a development (42 U.S.C. § 1437p). HUD’s Special Applications Center processes and approves applications for full or partial demolition of a public housing development. At issue in Jones v. HUD was a partial demolition application.

A full or partial demolition application must satisfy Section 18:

(a) Applications for demolition and disposition. Ex-cept as provided in subsection (b), upon receiving an application by a public housing agency for authori-zation *** to demolish or dispose of a public hous-ing project or a portion of a public housing project (including any transfer to a resident-supported non-profit entity), the Secretary shall approve the applica-tion, if the public housing agency certifies—

(1) in the case of—

Case Notes

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