Amicus Curiae Brief — Marin Housing Authority, Petitioner v. Kerrie Reilly

No. 20-1046

In the Supreme Court of the United States

MARIN HOUSING AUTHORITY, PETITIONER

v.

KERRIE REILLY

ON PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF CALIFORNIA

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

DAMON SMITH

General Counsel

BRIAN DUPRÉ

Associate General Counsel

for Litigation

BATINA WILLS-WASHINGTON

Assistant General Counsel

for Assisted Housing &

Civil Rights Litigation

ALLEN VILLAFUERTE

Senior Trial Attorney

U.S. Department of Housing

& Urban Development

Washington, D.C. 20410

ELIZABETH B. PRELOGAR

Solicitor General

Counsel of Record

BRIAN M. BOYNTON

Acting Assistant Attorney

General

EDWIN S. KNEEDLER

Deputy Solicitor General

NICOLE FRAZER REAVES

Assistant to the Solicitor

General

ALISA B. KLEIN

BRAD HINSHELWOOD

Attorneys

Department of Justice

Washington, D.C. 20530-0001

SupremeCtBriefs@usdoj.gov

(202) 514-2217

QUESTION PRESENTED

Whether payments made under California’s InHome Supportive Services program to a parent who

personally provides care for her child who has developmental disabilities are “[a]mounts paid * * * to offset

the cost of services and equipment needed to keep [a]

developmentally disabled family member at home,” 24

C.F.R. 5.609(c)(16), and therefore excluded from the

family’s annual income for purposes of calculating its

Section 8 rent subsidy.

(I)

TABLE OF CONTENTS

Page

Interest of the United States....................................................... 1

Statement ...................................................................................... 1

Discussion ...................................................................................... 9

A. This Court has jurisdiction to review the decision of

the California Supreme Court ....................................... 10

B. The California Supreme Court erred in holding that

Section 5.609(c)(16) excludes from income payments

received by a family to care for a family member

who has developmental disabilities when the family

does not incur corresponding costs ............................... 14

C. The question presented does not warrant review........ 19

Conclusion ................................................................................... 23

TABLE OF AUTHORITIES

Cases:

Ali, In re, 938 N.W.2d 835 (Minn. 2020).............. 8, 15, 16, 18

American Export Lines, Inc. v. Alvez,

446 U.S. 274 (1980)........................................................ 11, 12

Anthony v. Poteet Housing Authority,

306 Fed. Appx. 98 (5th Cir. 2009) ...................... 8, 16, 18, 19

ASARCO Inc. v. Kadish, 490 U.S. 605 (1989) .................... 13

Basden v. Wagner, 181 Cal. App. 4th 929 (2010) .................. 3

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469

(1975) .................................................................. 10, 11, 12, 13

Duquesne Light Co. v. Barasch, 488 U.S. 299 (1989) ........ 12

First English Evangelical Lutheran Church v.

County of Los Angeles, 482 U.S. 304 (1987)..................... 13

HollyFrontier Cheyenne Ref., LLC v. Renewable

Fuels Ass’n, 141 S. Ct. 2172 (2021) ................................... 16

Jefferson v. City of Tarrant, 522 U.S. 75 (1997) ................. 10

(III)

IV

Cases—Continued:

Page

Local No. 438 Constr. & Gen. Laborers’ Union,

AFL-CIO v. Curry, 371 U.S. 542 (1963) ........................... 12

Mills v. Alabama, 384 U.S. 214 (1966) ................................ 13

Mississippi Power & Light Co. v. Mississippi

ex rel. Moore, 487 U.S. 354 (1988) ..................................... 13

NAACP v. Claiborne Hardware Co.,

458 U.S. 886 (1982).............................................................. 13

Washington State Dep’t of Soc. & Health Servs.

v. Guardianship Estate of Keffeler,

537 U.S. 371 (2003).............................................................. 13

Constitution, statutes, and regulations:

U.S. Const. Amend. V ........................................................... 12

Housing Opportunity Through Modernization Act of

2016, Pub. L. No. 114-201, 130 Stat. 782 ............................ 2

§ 102(c), 130 Stat. 788 .................................................... 2, 3

§ 102(h), 130 Stat. 791 ................................................. 2, 21

United States Housing Act of 1937,

42 U.S.C. 1437 et seq.:

42 U.S.C. 1437a(b)(4) ........................................................ 2

42 U.S.C. 1437f (§ 8) .................................1, 3, 9, 14, 20, 22

42 U.S.C. 1437f(a) .............................................................. 1

42 U.S.C. 1437f(c) .............................................................. 2

42 U.S.C. 1437f(f )(7) ...................................................... 1, 2

42 U.S.C. 1437f(o) .......................................................... 1, 2

42 U.S.C. 1437f(o)(2) ......................................................... 2

28 U.S.C. 1257 .............................................................. 9, 10, 11

28 U.S.C. 1257(a) ................................................................... 10

42 U.S.C. 1396-1 ....................................................................... 4

42 U.S.C. 1396a(a) ................................................................... 4

42 U.S.C. 1396a(b) ................................................................... 4

42 U.S.C. 1396n(c) ................................................................... 4

V

Statutes and regulations—Continued:

Page

Cal. Welf. & Inst. Code § 12300 et seq.

(West 2014) ............................................................................ 3

§ 12300(a)-(b) ..................................................................... 3

§ 12300(e)...................................................................... 4, 19

§ 12300(e)(1)-(5) ................................................................. 4

§ 12301.6 ............................................................................. 4

24 C.F.R.:

Section 5.609(a) .................................................................. 3

Section 5.609(a)(3) ........................................................... 18

Section 5.609(b)(1) ............................................................. 3

Section 5.609(b)(5) ............................................................. 3

Section 5.609(c) ................................................................ 16

Section 5.609(c)(4) ........................................................... 16

Section 5.609(c)(16) ................................................ passim

Section 982.1 ...................................................................... 2

Section 982.1(a) .................................................................. 1

Section 982.402 .................................................................. 5

Miscellaneous:

Autumn M. Elliott, Senior Counsel,

Disability Rights California, Re: Docket

No. FR-6057-P-01, Housing Opportunity Through

Modernization Act of 2016: Implementation of

Sections 102, 103, and 104 [HUD-2019-0078;

RIN: 2577-AD03] (Nov. 18, 2019),

https://go.usa.gov/xeaPs..................................................... 21

60 Fed. Reg. 17,388 (Apr. 5, 1995) ......................... 7, 8, 17, 18

84 Fed. Reg. 48,820 (Sept. 17, 2019) .............................. 20, 21

The American Heritage Dictionary of the English

Language (3d ed. 1992) ................................................ 14, 15

The Oxford English Dictionary (2d ed. 1989):

Vol. 3 ................................................................................. 15

VI

Miscellaneous—Continued:

Page

Vol. 10 ............................................................................... 15

U.S. Dept. of Hous. & Urban Dev., Department

of Housing and Urban Development 2022

Congressional Justifications (May 28, 2021),

https://go.usa.gov/xe36q ....................................................... 2

Webster’s Third New International Dictionary of

the English Language (1993) ...................................... 14, 15

In the Supreme Court of the United States

No. 20-1046

MARIN HOUSING AUTHORITY, PETITIONER

v.

KERRIE REILLY

ON PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF CALIFORNIA

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

INTEREST OF THE UNITED STATES

This brief is submitted in response to the Court’s order inviting the Solicitor General to express the views

of the United States. In the view of the United States,

the petition for a writ of certiorari should be denied.

STATEMENT

1. a. Section 8 of the United States Housing Act of

1937, 42 U.S.C. 1437f, authorizes the United States Department of Housing and Urban Development (HUD)

to provide rental assistance “[f]or the purpose of aiding

low-income families in obtaining a decent place to live”

and promoting “economically mixed housing.” 42 U.S.C.

1437f(a). One form of assistance available under Section 8 is “tenant-based” assistance, commonly referred

to as the Housing Choice Voucher program. 42 U.S.C.

1437f(f )(7) and (o); see 24 C.F.R. 982.1(a). HUD provides funding to local public housing agencies that

(1)

2

administer the tenant-based assistance program and

distribute vouchers that eligible tenants can use to pay

rent for privately-owned units of their choosing; if a tenant moves, the tenant-based assistance travels with her.

42 U.S.C. 1437f(f )(7); 24 C.F.R. 982.1. The majority of

federal housing assistance that HUD provides is tenantbased. See HUD, Department of Housing and Urban

Development 2022 Congressional Justifications 1-9 to

1-11 (May 28, 2021), https://go.usa.gov/xe36q.

Families that receive tenant-based assistance are required to pay a statutorily prescribed portion of their

rent, typically equal to 30% of the family’s “adjusted income” or ten percent of its gross income, whichever is

greater. 42 U.S.C. 1437f(o)(2). The public housing

agency then pays the balance of the rent with federal

funds, up to a statutorily capped amount. See 42 U.S.C.

1437f(c) and (o). At present, federal law provides that

the term “income” generally “means income from all

sources of each member of the household, as determined in accordance with criteria prescribed by the

Secretary” of HUD. 42 U.S.C. 1437a(b)(4). Congress

thus has given the Secretary of HUD (Secretary) broad

authority to define criteria for calculating income.

In the Housing Opportunity Through Modernization

Act of 2016, Pub. L. No. 114-201, 130 Stat. 782, Congress adopted revised definitions of “income” and “adjusted income” that take effect at the beginning of the

first calendar year after the Secretary has “issue[d] notice or regulations to implement” those changes. § 102(c)

and (h), 130 Stat. 788, 791. As discussed in more detail

below, see pp. 19-21, infra, the Secretary is currently

engaged in that rulemaking process. The revised statutory definitions continue to make clear that, subject to

certain specified exclusions from income, the Secretary

3

retains her broad statutory authority to set criteria for

determining a program participant’s “income.” See

§ 102(c), 130 Stat. 788 (“The term ‘income’ means, with

respect to a family, income received from all sources by

each member of the household * * * as determined in

accordance with criteria prescribed by the Secretary,”

subject to express statutory “requirements.”).

Under the existing regulation governing income calculations, “annual income” is defined as “all amounts,

monetary or not,” that a family member receives unless

an amount is “specifically excluded” by the regulation.

24 C.F.R. 5.609(a). The regulation provides an illustrative list of payments that fall within the general definition of “annual income,” including “compensation for

personal services” and “[p]ayments in lieu of earnings,

such as unemployment and disability compensation.” 24

C.F.R. 5.609(b)(1) and (5). As relevant here, the regulation excludes from “annual income” “[a]mounts paid

by a State agency to a family with a member who has a

developmental disability and is living at home to offset

the cost of services and equipment needed to keep the

developmentally disabled family member at home.” 24

C.F.R. 5.609(c)(16). Such payments therefore are not

taken into account when a public housing agency calculates the share of rent to be paid by a family receiving

tenant-based assistance under Section 8.

b. California’s In-Home Supportive Services program (IHSS), Cal. Welf. & Inst. Code § 12300 et seq.

(West 2014), provides “supportive services * * * to

aged, blind, or disabled persons * * * who are unable

to perform the services themselves” and is designed to

help such individuals avoid institutionalization by enabling them to “establish and maintain an independent

living arrangement,” id. § 12300(a)-(b); see Basden v.

4

Wagner, 181 Cal. App. 4th 929, 939 (2010). Under that

program, in-home supportive services may be provided

by a variety of persons and entities, including, in certain

circumstances, the parent of a person who is disabled.

Cal. Welf. & Inst. Code § 12300(e) (West 2014); see id.

§ 12301.6. A parent is eligible to receive payments for

providing in-home supportive services “only when the

provider leaves full-time employment or is prevented

from obtaining full-time employment because no other

suitable provider is available and where the inability of

the provider to provide support services may result

in inappropriate placement or inadequate care.” Id.

§ 12300(e). Parent providers are compensated only

for providing specific types of services. See id.

§ 12300(e)(1)-(5).

IHSS operates in part under the auspices of Medicaid, a cooperative federal-state program that provides

benefits to certain persons “whose income and resources are insufficient to meet the costs of necessary

medical services.” 42 U.S.C. 1396-1. States that choose

to participate in Medicaid develop a “plan for medical

assistance” that must be approved by the Secretary of

Health and Human Services. 42 U.S.C. 1396a(a); see 42

U.S.C. 1396a(b). As part of that plan, a State may develop home- and community-based care programs—

such as IHSS—for individuals with disabilities and receive partial reimbursement from the federal government for the cost of those programs. See 42 U.S.C.

1396n(c).

2. In 1998, respondent Kerrie Reilly and her two

daughters moved into an apartment in Marin County,

California, and began receiving tenant-based assistance

through the Housing Choice Voucher program. Pet.

App. 2. Petitioner Marin Housing Authority administers

5

respondent’s voucher pursuant to a contract with HUD.

See id. at 3. One of respondent’s daughters, K.R., has

developmental disabilities, and respondent receives

funds from IHSS to provide care for K.R. in their home.

Id. at 2.

In 2004, respondent’s other daughter moved out of

their apartment to attend college, but respondent did

not inform petitioner of her daughter’s departure until

2009. Pet. App. 2-3. Petitioner then determined that

the voucher respondent had received did not accurately

reflect her household size over that five-year period—

which violated program rules, cf. 24 C.F.R. 982.402—

and required her to repay $16,011. Pet. App. 3, 70-71.

Respondent entered into a repayment agreement with

petitioner but missed a number of scheduled payments.

Id. at 3; Resp. App. 6a-7a.

In 2015, respondent asked petitioner to recalculate

her rent to exclude the payments she received from

IHSS to care for K.R., contending that those payments

were “[a]mounts paid by a State agency to a family * * *

to offset the cost of services and equipment needed to

keep [a] developmentally disabled family member at

home.” 24 C.F.R. 5.609(c)(16); see Pet. App. 3. Petitioner did not respond to that request, and instead

sought to terminate respondent’s voucher. Pet. App. 3.

An administrative hearing officer subsequently found

that respondent’s breach of the repayment agreement

constituted grounds to terminate her voucher, without

addressing the question of whether Section 5.609(c)(16)

applies to respondent’s IHSS payments. Id. at 3, 71-72.

3. a. Respondent filed suit in Marin County Superior Court, seeking (1) a writ of mandate vacating petitioner’s decision to terminate her voucher and requiring

petitioner to exclude her IHSS payments from its

6

calculation of her income going forward, and (2) a writ

of administrative action compelling petitioner to terminate the repayment plan and reinstate her voucher.

Resp. App. 9a-11a. Both claims were premised on respondent’s assertion that her IHSS payments fit within

Section 5.609(c)(16)’s exclusion. Ibid. The Superior

Court dismissed respondent’s complaint, finding that

IHSS payments do not fall within Section 5.609(c)(16).

Pet. App. 92-95.

The California Court of Appeal affirmed. Pet. App.

69-89. The court found that, in order for payments to

“offset the cost of services,” they “must go to the same

entity that incurs the costs of those services,” and

therefore “the costs these payments offset must be

costs that the family itself incurs.” Id. at 80. The court

also found that the term “cost” “has to be understood in

its most common and concrete sense”: “ ‘the amount or

equivalent paid or charged for something; price.’ ” Id.

at 81-82 (citation omitted). The court concluded that because respondent cares for her daughter instead of employing another person to do so, she incurs no costs that

are offset by the IHSS payments, rendering Section

5.609(c)(16) inapplicable. Id. at 81-83.

b. i. The California Supreme Court granted discretionary review and reversed, holding that “a parent’s

IHSS compensation to provide care to keep a developmentally disabled child at home is excluded from income” under Section 5.609(c)(16). Pet. App. 34; see id.

at 1-68. 1

At the California Supreme Court’s invitation, the United States

filed an amicus brief in which it argued that the IHSS payments that

respondent receives are not payments “to offset the cost of services

and equipment needed to keep [a] developmentally disabled family

member at home,” 24 C.F.R. 5.609(c)(16). Pet. App. 134-149.

1

7

The California Supreme Court found that the term

“offset” did not necessarily “refer to compensation of

specific, discrete amounts.” Pet. App. 11. The court

also found that the term “cost” “include[s] * * * the

expenditure of something, such as time or labor, necessary for the attainment of a goal.” Id. at 12 (citation and

internal quotation marks omitted). Taking those definitions together, the court determined that, when a family uses “homecare payments to support itself so that it

may care for a developmentally disabled member at

home,” the payments “ ‘offset’ the ‘cost’ of services and

equipment needed to avoid institutionalization.” Ibid.

(citation omitted).

The California Supreme Court relied on its view of

the rulemaking history of Section 5.609(c)(16) and what

it perceived to be the purpose of the regulation. The

court quoted supplementary information included as a

preface to the interim rule that originally proposed that

exclusion, which noted that “States that provide families with homecare payments do so to offset the cost of

services and equipment needed to keep a developmentally disabled family member at home, rather than placing that family member in an institution.” 60 Fed. Reg.

17,388, 17,389 (Apr. 5, 1995); see Pet. App. 13-14. On

the court’s reading, that statement “did not use ‘cost’

and ‘offset’ in terms of a specific monetary expense or

amount a Section 8 family incurs, but in a broad sense

with respect to describing the overall objective of the

exclusion.” Pet. App. 15. And the court concluded that

distinguishing between families that use payments to

provide care directly and those that use payments to

compensate third parties for care would result in “unfair treatment,” id. at 23, which would be inconsistent

with the preface’s observation that “families that strive

8

to avoid institutionalization should be encouraged, and

not punished,” 60 Fed. Reg. at 17,389. The court

acknowledged that the Fifth Circuit and the Minnesota

Supreme Court had more “narrow[ly] interpret[ed]

* * * the exclusion as limited to out-of-pocket expenses

that a state directly reimburses,” but the court expressly “disagree[d] with” that approach. Pet. App. 2021; see Anthony v. Poteet Housing Authority, 306 Fed.

Appx. 98 (5th Cir. 2009); In re Ali, 938 N.W.2d 835

(Minn. 2020).

The California Supreme Court “remand[ed] the matter for further proceedings consistent with [its] opinion.” Pet. App. 34. The court stayed its mandate pending the outcome of the petition for a writ of certiorari.

Order, No. S249593 (Cal. Sept. 30, 2020).

ii. Three justices dissented. Pet. App. 35-68. In their

view, interpreting Section 5.609(c)(16) to cover only

“those state payments that reimburse a family’s expenditures” was “the most straightforward reading of

the relevant regulatory language.” Id. at 35-36.

The dissenting justices reasoned that the term “offset” generally means to “counterbalance,” and thus the

regulation “anticipates that an equivalent cost has been

or will be paid by the family for those services or equipment, since there would be nothing to counterbalance in

the absence of such an expenditure.” Pet. App. 44-45.

The dissenters criticized the majority’s reading of “offset,” explaining that typically “[w]e do not refer to compensation for providing a service as ‘offsetting the cost’

of the service provider’s own effort, much less the service provider’s decision to take this job, rather than a

different hypothetical job.” Id. at 47. The dissenters

also took issue with the majority’s reading of the rulemaking history, noting that the preface did not “ex-

9

pressly address[] the issue before [the court]” and did

“little more than parrot the language of the regulation.”

Id. at 52-53. And the dissenters emphasized that the

majority’s reading of the regulation would result in

more favorable treatment of respondent’s family than

other similarly situated families—including “other lowincome families with the same family income” and families with income earned outside the home that rely on

third-party care to keep a family member who has developmental disabilities at home. Id. at 56; see id. at 6066. The dissenters also noted that the majority’s decision would simultaneously reduce the pool of voucher

funds available for other families awaiting assistance.

Id. at 66-67.

DISCUSSION

Petitioner seeks review of a California Supreme

Court decision interpreting a federal regulation that is

used to determine the amount of subsidies under the

federal Housing Choice Voucher program. That the

court remanded the case for further proceedings does

not deprive its judgment of finality under 28 U.S.C.

1257. Any further proceedings will involve only issues

concerning the calculation of the amount of payments

owed by petitioner to respondent to redress past overpayments by respondent. As relevant here, the outcome of those proceedings is preordained and the

court’s interpretation of Section 5.609(c)(16) will control

those proceedings—rendering the decision below final

under this Court’s longstanding approach to Section

1257.

On the merits, the California Supreme Court erred

in determining that Section 5.609(c)(16) excludes IHSS

payments from a Section 8 participant’s income, misreading both the plain text and the context of that

10

regulation and rejecting HUD’s interpretation of its

own regulation. The court’s decision conflicts with a

non-precedential decision of the Fifth Circuit and a decision of the Minnesota Supreme Court.

Certiorari should nevertheless be denied because

the question presented is of limited and diminishing importance. Before the California Supreme Court issued

its decision, the Secretary began a rulemaking process

that proposes material changes to Section 5.609(c)(16)’s

text. Once the Secretary’s changes to that exclusion are

finalized, neither the decision below nor the split in authority will have any prospective effect. In addition,

there is presently no indication that the temporary and

limited lack of uniformity created by the decision below

will have a significant impact warranting this Court’s

review.

A. This Court Has Jurisdiction To Review The Decision Of

The California Supreme Court

Section 1257 of Title 28 grants this Court jurisdiction

over certain “[f]inal judgments or decrees” of a state

court that rest on federal law when the “final” decision

is rendered by “the highest court of a State.” 28 U.S.C.

1257(a). Section 1257 thus “establishes a firm final

judgment rule.” Jefferson v. City of Tarrant, 522 U.S.

75, 81 (1997). This Court has, however, “recurringly encountered situations in which the highest court of a

State has finally determined the federal issue present

in a particular case, but in which there are further proceedings in the lower state courts to come.” Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 477 (1975). The

Court has recognized “at least four categories” of such

cases in which it “has treated the decision on the federal

issue as a final judgment” for purposes of Section 1257.

11

Ibid. This case satisfies the requirements of the first

two Cox categories.

1. The first category under Cox involves “cases in

which there are further proceedings * * * yet to occur

in the state courts but where * * * the federal issue is

conclusive or the outcome of further proceedings preordained.” 420 U.S. at 479. Respondent here sought (1) a

writ of mandate vacating her voucher termination and

ordering petitioner to exclude her IHSS payments from

its calculation of her income going forward, and (2) a

writ of administrative action terminating her repayment plan and reinstating her voucher. Resp. App. 9a11a. Those requests are premised on respondent’s contention that her IHSS payments fit within the exclusion

in Section 5.609(c)(16). See, e.g., id. at 9a-10a.

Although the California Supreme Court remanded

the case for further proceedings, Pet. App. 34, the federal issue it decided concerning the interpretation of the

HUD regulation is conclusive. Neither party has identified any remaining dispute to be litigated in the state

courts over how respondent’s voucher payments should

be calculated on an ongoing basis or whether petitioner

is entitled to enforce the repayment agreement on other

grounds. Respondent does not identify any specific legal issues to be litigated on remand, see Br. in Opp. 14,

and petitioner has both implemented the decision below

and expressly abandoned its alternative argument that

its termination of respondent’s voucher was valid regardless of the proper interpretation of Section

5.609(c)(16), Reply Br. 2-4. Similar representations

have been taken into account in assessing whether a

state-court judgment is final under Section 1257. See

American Export Lines, Inc. v. Alvez, 446 U.S. 274,

277-279 & nn.5-7 (1980) (plurality opinion) (relying on a

12

party’s representations—made at oral argument in this

Court—regarding the abandonment of certain arguments in the state courts); see also Local No. 438 Constr. & Gen. Laborers’ Union, AFL-CIO v. Curry, 371

U.S. 542, 551 (1963).

It therefore appears that the state courts’ only remaining task is to calculate the amount of “subsidies petitioner must pay for the appropriate limitations period

preceding the state Supreme Court’s decision.” Reply

Br. 3. In similar situations, the Court has found that it

has jurisdiction because “the outcome of further proceedings [is] preordained.” Cox, 420 U.S. at 479. For

example, in Duquesne Light Co. v. Barasch, 488 U.S.

299 (1989), the Court found that there was no jurisdictional impediment to considering whether a state law

regulating utility ratemaking constituted a Fifth

Amendment taking, even though the state supreme

court had remanded the case to a state commission “for

further proceedings to revise the relevant rate orders.”

Id. at 306. This Court found that the state supreme

court had provided “the State’s last word on the constitutionality of [the state law] and that all that remain[ed]

[wa]s the straightforward application of its clear directive to otherwise complete rate orders.” Id. at 307.

Here, the California Supreme Court has provided “the

State’s last word” on the interpretation of Section

5.609(c)(16), and all that remains is for the lower courts

to apply that “clear directive” and determine the

amount of any payments that petitioner owes respondent as a result of its past refusal to apply Section

5.609(c)(16) to her IHSS payments. Ibid. See American Export Lines, 446 U.S. at 277-278 & n.5 (plurality

opinion) (finding that a state-court decision was final

under the first Cox category even though the amount of

13

damages awarded still might be reduced on remand);

see also ASARCO Inc. v. Kadish, 490 U.S. 605, 611-612

(1989); Mills v. Alabama, 384 U.S. 214, 217-218 (1966).

2. For similar reasons, the decision below is final under the second Cox category, which involves cases “in

which the federal issue * * * will survive and require

decision regardless of the outcome of future state-court

proceedings.” 420 U.S. at 480. The California Supreme

Court’s interpretation of Section 5.609(c)(16) will survive the remand here for further calculation of the

amount petitioner may owe respondent. Respondent

has not identified any concrete manner in which that

federal issue will become unnecessary to the resolution

of this case, see Br. in Opp. 14, and, as discussed, petitioner has disclaimed any intention to advance arguments unrelated to the calculation of payments that it

owes respondent. This Court has concluded that statecourt judgments were final in similar circumstances.

See, e.g., NAACP v. Claiborne Hardware Co., 458 U.S.

886, 907 n.42 (1982) (“Although the Mississippi Supreme Court remanded for a recomputation of damages, its judgment is final for purposes of our jurisdiction.”); see also Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 370 n.11 (1988);

First English Evangelical Lutheran Church v. County

of Los Angeles, 482 U.S. 304, 310 n.3 (1987). 2

Respondent also sought attorney’s fees and costs, which would

remain to be calculated on remand. See Resp. App. 12a. It is well

settled that a remand to calculate attorney’s fees does not deprive a

judgment of finality. Washington State Dep’t of Soc. & Health

Servs. v. Guardianship Estate of Keffeler, 537 U.S. 371, 381 n.5

(2003).

2

14

B. The California Supreme Court Erred In Holding That

Section 5.609(c)(16) Excludes From Income Payments

Received By A Family To Care For A Family Member

Who Has Developmental Disabilities When The Family

Does Not Incur Corresponding Costs

1. a. In determining that Section 5.609(c)(16) excludes IHSS payments from “income” for purposes of

calculating the amount of rent that a Section 8 voucher

recipient must pay, the California Supreme Court did

not properly take account of the text and context of that

regulation. Section 5.609(c)(16) provides that when calculating a family’s annual income, a public housing

agency must exclude “[a]mounts paid by a State agency

to a family with a member who has a developmental disability and is living at home to offset the cost of services

and equipment needed to keep the developmentally disabled family member at home.” 24 C.F.R. 5.609(c)(16).

That regulation does not provide for excluding the

IHSS payments that are made directly to respondent

for the care of her daughter because the payments do

not “offset the cost of services and equipment.” Ibid.

Instead, the payments compensate respondent for the

services she provides.

The ordinary meaning of the terms “cost” and “offset” establishes that Section 5.609(c)(16) does not encompass payments that compensate a family member

for services that she provides. Generally, the “cost” of

something is the amount paid for it—its monetary price.

See The American Heritage Dictionary of the English

Language 424 (3d ed. 1992) (American Heritage) (“[a]n

amount paid or required in payment for a purchase; a

price”); Webster’s Third New International Dictionary

of the English Language 515 (1993) (Webster’s) (“the

amount or equivalent paid or given or charged or en-

15

gaged to be paid or given for anything bought or taken

in barter or for service rendered: charge, price”) (capitalization omitted); 3 The Oxford English Dictionary

988 (2d ed. 1989) (Oxford) (“[t]hat which must be given

or surrendered in order to acquire, produce, accomplish, or maintain something; the price paid for

a thing”). And to “offset” something means to “counterbalance, counteract, or compensate for” it. American

Heritage 1256; see Webster’s 1567 (“counterbalance,

compensate”) (capitalization omitted); 10 Oxford 738

(“[t]o set off as an equivalent against something else[;]

* * * [t]o counterbalance, compensate”) (emphasis

omitted). It follows that a payment to “offset the cost

of services and equipment,” 24 C.F.R. 5.609(c)(16), must

be a payment that is made to counterbalance or compensate for a monetary cost actually incurred by the

family—for example, an expenditure on third-party

care for a family member in the home or on a piece

of equipment used to provide care. That Section

5.609(c)(16) applies to the “cost” of both “services and

equipment,” ibid., confirms that reading of “cost.” Because “the cost of equipment is calculated in monetary

terms—such as the cost to buy or lease”—the use of the

term “ ‘and’ between the words services and equipment

suggests that the same” monetary measurement “is

used for each.” In re Ali, 938 N.W.2d 835, 839 (Minn.

2020).

Respondent did not incur a monetary cost by providing care directly to her daughter. Nor did the IHSS

payments that respondent received reimburse or offset

the monetary cost “of services and equipment needed to

keep” her daughter “at home,” 24 C.F.R. 5.609(c)(16);

rather, respondent was able to use those funds as traditional income and pay for other necessities. Both the

16

Fifth Circuit and the Minnesota Supreme Court have

adopted that straightforward reading of the text of Section 5.609(c)(16). See Anthony v. Poteet Housing Authority, 306 Fed. Appx. 98, 101 (5th Cir. 2009) (finding

that a parent who received state funding to personally

care for her child “ha[d] incurred no costs which must

be offset with state funds”); Ali, 938 N.W.2d at 840 (concluding that amounts a parent “received as compensation for her services in caring for her child were not

amounts paid to offset the cost of services and equipment

because [she] incurred no actual monetary expense”).

That conclusion is reinforced by Section 5.609(c)(16)’s

context. Subsection 4 is the only other provision in Section 5.609(c)’s list of exclusions that uses the term

“cost”—and it unambiguously refers to a monetary

price. See 24 C.F.R. 5.609(c)(4) (excluding from the definition of “income” “[a]mounts received by the family

that are specifically for, or in reimbursement of, the cost

of medical expenses for any family member”). Because

“this Court normally presumes consistent usage” “absent contrary evidence,” HollyFrontier Cheyenne Ref.,

LLC v. Renewable Fuels Ass’n, 141 S. Ct. 2172, 2177

(2021), the fact that Subsection 4 uses “cost” to refer to

a price paid indicates that “cost” in Subsection 16 carries the same meaning. See Ali, 938 N.W.2d at 839

(crediting that argument). And that Congress could

have used another term, such as “reimburse,” instead of

“offset,” see Br. in Opp. 26-28, does not undermine the

conclusion that—in the context of Section 5.609(c)(16)—

“cost” is best read to refer only to actual monetary

costs.

b. The California Supreme Court erred in rejecting

that straightforward reading of Section 5.609(c)(16)’s

text. As an initial matter, the majority concluded that

17

the regulation employed a secondary meaning of “cost”:

the general “expenditure of something, such as time or

labor, necessary for the attainment of a goal.” Pet. App.

12 (citation omitted). The court concluded that under

that reading, when a family uses “homecare payments

to support itself so that it may care for a developmentally disabled family member at home,” those payments

“ ‘offset’ the ‘cost’ of services and equipment needed to

avoid institutionalization.” Ibid. That reading, however, does not account for the fact that “cost” applies to

both “services and equipment.” 24 C.F.R. 5.609(c)(16).

See p. 15, supra.

The California Supreme Court also erred in relying

on the policy goal it perceived in Section 5.609(c)(16) to

stretch that exclusion beyond the limits of its plain text.

When HUD promulgated that exclusion, it noted in the

preface to the interim rule that it was “adding this additional exclusion to income” because “families that

strive to avoid institutionalization should be encouraged, and not punished.” 60 Fed. Reg. at 17,389. Nowhere in the preface did HUD suggest that “cost” and

“offset” should be interpreted contrary to their most

natural reading in this context. And when read according to its plain text, Section 5.609(c)(16) pursues its goal

of avoiding institutionalization in a specific and limited

manner: by ensuring that families that rely on thirdparty care can exclude their costs for services (and by

permitting all families to exclude their costs for equipment) from income for the purpose of calculating the

amount of their housing vouchers. As the dissenting

justices noted below, that approach ensures that the

“acceptance of state aid” by families that rely on thirdparty care “does not inflate their annual income and result in a diminished Section 8 subsidy”—and that they

18

are treated similarly to “other Section 8 families having

a similar disposable income.” Pet. App. 55. Families

like respondent’s—that receive compensation for the

care that they provide directly to a family member,

without any corresponding outlay—are not “punished”

by having that compensation counted as income. 60

Fed. Reg. at 17,389. The regulation leaves them in the

same place as families that earn the same amount working outside the home, while paying for third-party care

to keep a disabled family member at home and receiving

payments to offset the costs of those services. See 24

C.F.R. 5.609(a)(3) (defining “annual income” as “all

amounts, monetary or not,” unless an amount is “specifically excluded”) (emphasis omitted).

2. The California Supreme Court’s decision conflicts

with a non-precedential decision of the Fifth Circuit and

a decision of the Minnesota Supreme Court. See Anthony, supra; Ali, supra; see also Pet. App. 20-21; p. 8,

supra. Respondent mistakenly asserts (Br. in Opp. 1518) that those decisions are distinguishable based on the

specific contours of different state programs. Under

the state program in Anthony, the parent was hired as

an employee by a private provider of homecare services

and assigned to care for her own child. 306 Fed. Appx.

at 100-101. The parent was paid to care for her son by

state funds that passed through the private provider,

and the Fifth Circuit found that those payments did not

offset qualifying costs and therefore could not be excluded from income under Section 5.609(c)(16). Id. at

100-102. Respondent suggests (Br. in Opp. 16) that Anthony is meaningfully different from the decision below

because the court there “did not address whether payments made by a state agency directly to a parent

who cares for her developmentally disabled child

19

qualif [y] under” Section 5.609(c)(16). But Section

5.609(c)(16) makes no distinction based on whether

funds are provided directly by the State or paid as

wages to a parent by a third party that is administering

state funds. And, in any event, the court in Anthony

“assum[ed]” that for purposes of Section 5.609(c)(16)

the “pass-through” payments would be treated the

same as payments made directly by the State. 306 Fed.

Appx. at 101.

Respondent also contends (Br. in Opp. 16-18) that

the programs in Anthony and Ali are distinguishable

because, unlike California’s IHSS program, they did not

require a determination by the State, as a condition for

reimbursement, that “no other suitable provider is

available” and that “the inability of the provider to provide support services may result in inappropriate

placement or inadequate care.” Cal. Welf. & Inst.

Code § 12300(e) (West 2014). But nothing in Section

5.609(c)(16)’s text suggests that such a distinction

makes any difference in determining whether payments

to a parent to personally provide care to her child are

amounts “to offset the cost of services and equipment

needed to keep the developmentally disabled family

member at home.” 24 C.F.R. 5.609(c)(16).

C. The Question Presented Does Not Warrant Review

1. Although the California Supreme Court’s decision

is erroneous, further review is unwarranted because the

question presented is of limited and diminishing importance in light of HUD’s pending rulemaking proceedings. As explained above, see pp. 2-3, supra, Section 5.609(c)(16) is a discretionary exclusion from income created under the Secretary’s broad authority

conferred by Congress to define criteria for calculating

income. Such discretionary exclusions under the regu-

20

lation address a range of situations that arise in calculating program participant income and embody policy

judgments by the Secretary about the appropriate

treatment of certain payments that participants receive. Here, there is ample room for policy judgments

by the Secretary about how best to address the needs of

families that receive Section 8 vouchers and furnish

care in the home for a family member who has developmental disabilities—as well as how to balance their

needs against the overall needs of the Housing Choice

Voucher program, which annually has far more qualified applicants than available vouchers. Cf. Pet. App.

16-17, 60 (majority opinion and dissent discussing policy

goals and methods by which they could be achieved).

Even before the California Supreme Court decided

this case, the Secretary had begun to reconsider the policy judgments reflected in Section 5.609(c)(16). In 2016,

Congress passed the Housing Opportunity Through

Modernization Act of 2016, which makes substantial

changes to the way income is calculated under the Section 8 program. See pp. 2-3, supra. The Secretary has

initiated a rulemaking to revise the relevant regulations

to reflect those changes. See 84 Fed. Reg. 48,820 (Sept.

17, 2019). In conjunction with that rulemaking, the Secretary has proposed various amendments to the exclusions from income. See id. at 48,836-48,837. Those

amendments propose to replace Section 5.609(c)(16) with

an exclusion that would exclude from income “[p]ayments provided by a State Medicaid managed care system to a family to keep a member who has a disability

living at home.” Id. at 48,836 (proposed new Section

5.609(b)(19)). The proposed exclusion thus would

remove the limitation that restricts the exclusion

to amounts paid “to offset the cost of services and

21

equipment,” 24 C.F.R. 5.609(c)(16), and instead exclude

all payments provided by a qualifying Medicaid managed care system. HUD has received comments on the

proposed exclusion and is currently considering what

policy would be appropriate in light of those comments. 3

HUD has informed this Office that, as of now, it plans

to promulgate a final rule in 2022.

Because of HUD’s pending rulemaking, the question

presented does not merit further review at this time.

The decision below is based on Section 5.609(c)(16)’s

current text, and HUD has proposed a change that

would materially alter that text and restore nationwide

uniformity to the treatment of covered payments. Although any final rule would not be applied retroactively,

see Housing Opportunity Through Modernization Act

of 2016, § 102(h), 130 Stat. 791, if the revision of the exclusion here is finalized as proposed, or the current exclusion is replaced in some other manner, HUD’s action

will ensure that the erroneous decision below has no

prospective effect.

2. Petitioner asserts (Pet. 25-31 & n.6; Reply Br. 1012) that the California Supreme Court’s decision could

result in substantial liability for public housing agencies

in California and elsewhere based on claims that those

agencies miscalculated voucher amounts in the past.

The comments that HUD is considering include ones regarding

the proposed rule’s language limiting the exclusion from income

to payments provided by a “State Medicaid managed care system,”

84 Fed. Reg. at 48,836, rather than more generally excluding

“[a]mounts paid by a State agency,” 24 C.F.R. 5.609(c)(16). See, e.g.,

Autumn M. Elliott, Senior Counsel, Disability Rights California, Re:

Docket No. FR-6057-P-01: Housing Opportunity Through Modernization Act of 2016: Implementation of Sections 102, 103, and

104 [HUD-2019-0078, RIN: 2577-AD03] (Nov. 18, 2019), https://go.

usa.gov/xeaPs; cf. Resp. Letter (Oct. 5, 2021).

3

22

Those concerns do not warrant a grant of certiorari at

this time.

As an initial matter, the decision below only binds

public housing agencies applying Section 5.609(c)(16) in

California. Agencies in other States can continue to follow HUD’s interpretation of that regulation. Moreover,

this case only involves the claims of a single program

participant—and, at this juncture, the litigation has focused on the termination of respondent’s voucher and

the calculation of her voucher amount going forward.

At this point, it is unknown how many Section 8 participants in California might be affected by the California

Supreme Court’s decision and the extent of the liability

that public housing agencies might face. Petitioner has

not provided precise estimates in either of those categories, and the United States likewise does not have

projections regarding the likely impact of the decision

below.

Even if a number of families bring claims related to

voucher payments that were miscalculated under the

California Supreme Court’s rule, it is unclear whether

and to what extent other defenses and arguments might

be available to housing agencies facing those hypothetical claims—including statutes of limitations and arguments against class certification. See Pet. 26 n.6. And

for reasons similar to those just discussed, the prospect

that the California courts will apply the decision below

to other programs that rely on the definitions in Section

5.609(c)(16), see Pet. 22-25, does not warrant a grant of

certiorari.

At a minimum, those uncertainties militate against

review at this time. If it becomes apparent later that

the issue in this case has a broader or more significant

impact, the Court could revisit whether to grant review.

23

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

DAMON SMITH

General Counsel

BRIAN DUPRÉ

Associate General Counsel

for Litigation

BATINA WILLS-WASHINGTON

Assistant General Counsel

for Assisted Housing &

Civil Rights Litigation

ALLEN VILLAFUERTE

Senior Trial Attorney

U.S. Department of Housing

& Urban Development

NOVEMBER 2021

ELIZABETH B. PRELOGAR

Solicitor General

BRIAN M. BOYNTON

Acting Assistant Attorney

General

EDWIN S. KNEEDLER

Deputy Solicitor General

NICOLE FRAZER REAVES

Assistant to the Solicitor

General

ALISA B. KLEIN

BRAD HINSHELWOOD

Attorneys