Woods v. Willis

NANCY WOODS, CAULENE FULLER, CARLA MCCULLOUGH, in their own right and as representatives of all similarly situated Lucas Metropolitan Housing Authority Section 8 Housing Choice Voucher Program participants, Plaintiffs-Appellants/Cross-Appellees, v. LINNIE WILLIS, personally and in her official capacity as Executive Director Lucas Metropolitan Housing Authority; MARGARET MIRACOLA, personally and in her official capacity as Director, Lucas Metropolitan Housing Choice Voucher Program; CANDACE RENNER personally and in her official capacity as Hearing Officer Lucas Metropolitan Housing Authority, Defendants-Appellees/Cross-Appellants.

No. 11-4419

No. 12-3029

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Filed: February 19, 2013

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

File Name: 13a0181n.06

ON APPEAL FROM THE UNITED

STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF OHIO

BEFORE: CLAY and STRANCH, Circuit Judges; BELL, District Judge.^*

CLAY, Circuit Judge. Plaintiffs-Appellants Nancy Woods, Caulene Fuller and Carla McCullough filed the underlying action, under 42 U.S.C. § 1983, as present and former participants of the Housing Choice Voucher Program of § 8 of the United States Housing Act of 1937 ("HousingAct"), 42 U.S.C. § 1437f, asserting that the Lucas Metropolitan Housing Authority's ("LMHA") § 8 Housing Program's termination policy operates to deprive participants of their property interests in violation of the due process clause of the Fourteenth Amendment and various applicable statutes. Plaintiffs bring this joint appeal from the district court's order granting in part Defendant's motion to dismiss pursuant to Federal Rule Civil Procedure 12(b)(6), and the order granting in part Defendant's subsequent motion for summary judgment. Defendant cross-appeals from the order granting in part Plaintiff Fuller's cross-motion for summary judgment. For the following reasons, we AFFIRM both orders.

BACKGROUND

1. LMHA § 8 Housing Program

Defendant Linnie Willis is the executive director of LMHA, the Public Housing Authority in Lucas County, Ohio, that administers to low-income individuals and families the § 8 Housing Choice Voucher Program ("Housing Program"). LMHA determines tenant eligibility under the applicable regulations. The amount of assistance provided is dependent on the number of individuals living in the household. Approved families must select and maintain housing that meets the program's quality standards and that are approved by LMHA, which in turn enters into housing assistance payments ("HAP") contracts with the landlords. 24 C.F.R. § 982.1(a)(2).

Participating families are assigned a housing specialist and have obligations under the Housing Program, including disclosing household income, allowing inspection of the unit, providing the housing authority with eviction notices, and notifying LMHA before the family moves from an approved residence. See id. § 982.551. Violating an obligation may result in termination from theHousing Program. Id. §§ 982.552-.553. However, the participant must have an opportunity for an informal hearing to challenge the basis for the termination decision and to consider whether the decision comports with federal law. See id. § 982.555(a)(1)(v).

LMHA has in place written procedures for conducting informal hearings. A housing specialist or inspector is required to advise the managers that a cause for termination has materialized. LMHA then issues to the participant a notice that includes a brief statement of the reason for termination and advises him or her of the right to an informal hearing. Upon a request submitted by the deadline specified in the notice, LMHA schedules informal hearings with a hearing officer. The housing specialist compiles all of the relevant documentation used to make the initial termination decision into one file and submits it for the hearing officer's review. At the informal hearing, the hearing officer reviews the file submitted and affords participants an opportunity to explain why their eligibility should not be terminated before making a final decision. The decision is mailed to the participant some time after the hearing.

Plaintiffs contend that LMHA's practices and procedures surrounding and including the informal hearing are unconstitutional and violate applicable regulations. Although Plaintiffs filed this action jointly in an apparent effort to obtain class certification, their claims and circumstances are substantially distinct, requiring this Court to address each separately for the sake of clarity.

2. Plaintiffs' Factual Background

A. Nancy Woods

Woods began participating in the Housing Program in 2007. On March 6, 2008, her housing unit failed LMHA's annual housing quality standards inspection, and the landlord was provided anopportunity to make repairs. Aware that she could be required to move, Woods took steps required to move as a Housing Program participant. She first attended LMHA's required Rehousing Update Class. Then, upon notice that her unit failed another inspection and repairs were necessary to avoid termination on July 1, 2008 of the HAP contract, Woods submitted two Request for Tenancy Approval forms to LMHA, seeking the requisite approval to move into different homes. However, both requests were denied because the units were overpriced.

Thus, on July 1, Woods moved into a hotel in the belief that she would no longer be authorized to remain on the property. However, despite telling her landlord of her decision to move, she did not submit a 30-Day Notice of her intent to move to LMHA or the landlord, in violation of LMHA's policy, of which Woods was aware.

Upon learning that Woods vacated her unit, LMHA issued to her a Notice of Cancellation on July 11, stating that her Housing Program eligibility would be terminated on July 15 because she "vacate[d] without notice." (R. 47, Ex. 4, Woods Notice of Cancellation.) On or about the same day, Woods submitted a third Request for Tenancy Approval Form after negotiating a lower rent payment with the landlord of one of the units previously denied. She also submitted a timely hearing request shortly thereafter, on July 17, which was not scheduled (for reasons still disputed) until December 8, 2008. In the interim, Plaintiff was denied approval for her third tenancy request, and alleges that it was because she was "not eligible to re-house at the present time. (Currently at hearing stage)." (R. 12, at ¶ 46.) Consequently, Woods was not provided any housing assistance in the five months before her December hearing.

At her hearing, Woods' attorneys asserted only that Woods' failure to follow the policy was de minimis because she provided sufficient notice by submitting a transfer request and attending the rehousing class. There were no witnesses presented by LMHA at the hearing; the only evidence presented was Woods' own testimony. Woods admitted that she did not submit the requisite 30-day Notice form, which proved to be dispositive. On January 16, 2009, the hearing officer issued a decision upholding the termination "due to the fact that [Woods] vacated [her] unit without notice and without [LMHA's] approval to rehouse." (R. 47, Ex. 4, at PID #774.)

B. Caulene Fuller

Fuller became a member of the voucher program in August 2008, with her son, D.W., listed as a household member. In 2009, in the midst of an apparent domestic dispute, D.W.'s father, Jason Watts, sent a letter to LMHA asserting that Fuller had committed fraud by claiming custody of her son when in fact he was the custodial parent. Attached to the letter was an order from the juvenile court, stating that Watts had legal custody of D.W., but also that both parents shared physical custody. LMHA issued Fuller a Notification of Cancellation, stating that her Housing Program eligibility would be terminated because she committed "fraud, in stating that [she had] custody of [D.W.]" (R. 39, Ex. 4, Fuller Notice of Cancellation.) Fuller timely requested a hearing, which was held on September 10, 2009.

Assuming it was Watts who contacted LMHA, Fuller obtained a letter from her caseworker that addressed why D.W. was living in Fuller's home. At the hearing, Fuller submitted her caseworker's letter and testified on her own behalf, asserting that D.W. in fact lived with her and, thus, her answers as to whether he was in the household were not fraudulent. However, Watts wasnot present at the hearing so as to provide Fuller an opportunity to question him before the hearing officer. Instead, the hearing officer weighed Fuller's file, which included Watts's letter, against her testimony and evidence at the hearing to come to a decision. On September 21, 2009, the hearing officer issued a decision which stated:

"According to CFR 982.551, this letter is to notify you of the final results of your informal hearing that was held on September 10, 2009 to discuss your continued eligibility as a Section 8 program participant. The hearing resulted from the fact that you were involved in fraud, stating custody of [D.W.]. As a result of your hearing, you may remain on the program with the removal of [D.W.], until such time as you are granted legal custody. It is recommended you seek legal counsel for this matter."

(R. 39, Ex. 6, Decision Letter (emphasis added).)

C. Carla McCullough

McCullough, a Housing Program participant since 2002, accepted a job as a hair stylist in 2006 that brought in varying amounts of money each month. She informed her LMHA housing specialist of the position and unstable pay, and the housing specialist instructed McCullough to bring her pay stubs to their annual review to ensure that LMHA's voucher payments were accurate. McCullough complied.

Shortly after the review, in a Notification of Cancellation dated September 3, 2008, LMHA informed McCullough that her voucher was being terminated because she was "over-income." (R. 12, Amended Compl. ¶ 79.) The letter advised her that she could request a hearing by September 12,...