Amicus Curiae Brief — Wright v. Roanoke Redevelopment and Housing Authority
Supreme Court brief1987
Ask Donna
What actually matters in this document.
Text
O)
No. 85-5915)
JOSEPH F. SPANIOL, JRe
Li
IN THE SUPREME COURT OF THE
UNITED STATES
October Term, 1985
BRENDA E. WRIGHT, et al.,
Petitioners,
Vv.
CITY OF ROANOKE REDEVELOPMENT
AND HOUSING AUTHORITY
Respondent.
On Writ of Certiorari
to the United States Court of Appeals
for the Fourth Circuit
BRIEF FOR AMICUS CURIAE
NATIONAL HUUSING LAW PROJECT
IN SUPPORT OF PETITIONERS
David B. Bryson
Catherine M. Bishop*
James R. Grow
National Housing Law Project
1950 Addison Street
Berkeley, CA 94704
Counsel for Amicus Curiae
*Commsel of Record
No. 85-5915
IN THE SUPREME COURT OF THE
UNITED STATES
October Term, 1985
r BRENDA E. WRIGHT, et al.,
Y Petitioners,
3
me v.
id
Ug CITY OF ROANOKE REDEVELOPMENT
wh ake.
AND HOUSING AUTHORITY
Respondent.
a Geri
~~
Catv ee
one
On Writ of Certiorari
to the United States Court of Appeals
for the Fourth Circuit
BRIEF FOR AMICUS CURIAE
NATIONAL HOUSING LAW PROJECT
IN SUPPORT OF PETITIONERS
ee ee IS
David B. Bryson
Catherine M. Bishop*
James R. Grow
National Housing Law Project
1950 Addison Street
Berkeley, CA 94704
? ee Aas ts _ "ey at & = eg ee oe
Counsel for Amicus Curiae
*Counsel of Record
rae aes M.
~*
ort = - ——S
TABLE OF CONTENTS
TABLE OF CITATIONS... ...22220- iii
INTEREST OF AMICUS CURIAE...... 1
SUMMARY OF THE ARGUMENT........ 2
ARGUMENT... ccccccccccccccccccces 4
I. PLAINTIFFS HAVE A RIGHT
SECURED BY FEDERAL LAW TO
PAY NO MORE THAN THIRTY
PERCENT OF THEIR INCOMES FOR
SHELTER AND REASONABLE USE
OF UTILITIES... cccceceecess 4
A. Payment of the Statu-
torily Prescribed Rent Grants
Plaintiffs a Right Not Only To
Live In Their Rented Homes But
Also To Use the Utilities As
Well, As Long As Their Use Is
BG MOOGOEVOs cccccccccccccccce 6
B. The Statutory and
Regulatory Provisions in Ques-
tion Are Mandatory...... seccecece 11
C. These Mandatory Obli-
gations Were Imposed to Protect
Tenants’ InterestS.......eeee0. 27
D. The Federal Laws Plain-
tiffs Rely Upon Are Sufficiently
Specific to "Secure" Their
RIGHES.ccccccccccccccsccscccsccces 32
II. CONGRESS HAS NOT PRECLUDED
COURTS FROM ENFORCING THESE
PLAINTIFFS' RIGHTS........ 37
A. Congress‘ Express
ACELIONS. ccoccccccccccccececccess
B. Congress’ Dissatisfac-
tion with HUD. .cccccccccecccece
C. HUD's Enforcement
Capacity..cccccccecsccccvcce oeeces
III. REFUND OF PLAINTIFFS'
MONEY IS AN APPROPRIATE
REMEDY IN THIS ACTION....
CONCLUSION... ccccccccccescccess
ii
38
41
43
54
62
TABLE OF CITATIONS
Page
A. CASES
Bell v. Hood, 327 U.S.
SIG, SSS CEP46) ccccccecece 55
Cannon v. University of
Chicago, 441 U.S. 677, 690,
BeSS TEP IPP coccccesecceoces 31
Citizens to Preserve
Overton Park v. Volpe,
401 U.S. 402, 410 (1971)... 32
Commonwealth of Pennsyl-
vania v. Lynn, 501 F.2d
848, 855 (D.C. Cir. 1974).. 12
Davis v. Passman, 442 U.S.
SEGe SEO TEUTE coccecceccoces 54
Guardians Association v.
Civil Service Commission,
463 U.S. 582, 595 (1983)... 55,58
Howard v. Pierce,
738 F.2q 722, 125-26
ee SS EE 31
Keller v. Kate Maremount
Foundation, 365 F. Supp.
798 (N.D. Cal. 1972),
aff'd, 504 F.2d 483
[eae Gulls BEEP ecoceoecocceos 48
Maine v. Thiboutot,
a watts © BEE cceeocceos 4
iii
McQueen v. Drucker, 317
F. Supp. 1122 (D. Mass.
1970), aff'd on other
grounds, 438 F.2d 781
SEs GOs Bled ccccccceccs 48
Middlesex County Sewerage
Authority v. National Sea
Clammers, 453 U.S. l,
BEPaS TOPSED cococcccecccece 37
Nichols v. Landrieu,
No. 79-3097 (D.D.C.
injunction entered
Sept. 12, 1980),
subsequent opinion on
attorneys’ fees,
740 F.2d 1249, 1251-52
W.S. SEF. BOSSE) cccccccecs 48
Pennhurst State School
and Hospital v. Halderman,
451 U.S. I, 28 (1981)..... 4,11,12
Perry v. Housing
Authority of Charleston,
664 F.2d 1210 (4th Cir.
BOGSD ccoccccccececceececcecs 12
Phelps v. Housing
Authority, 742 F.2d 816
eae Ge SOME ceeeececece 33
Smith v. Robinson,
U.S. _— _, 104
S.Ct. 3457, 3469 (1984)... 37
Thompson v. Washington,
497 F.2d 626 (D.C. Cir.
DTS) ccccccccccccceccccece 48
iv
4
-
7
Thorpe v. Housing Auth.,
393 U.S. 268 (1909).......
Udall v. Tallman,
380 U.S. 1, 16-17 (1965)..
B. STATUTES
Pub. L. No. 75-412, § 2(1),
50 Stat. 888 (1937).......
Pub. L. No. 75-412,
§§ 10(b) and 11(b),
50 Stat. 888, 892-93 (1937)
Pub. L. No. 81-171, § 306,
63 Stat. 429 (1949).......
Pub. L. No. 86-372, § 501,
73 Stat. 654, 679 (1959)..
Pub. L. No. 91-152,
§ 213, 83 Stat. 389
Pub. L. No. 91-601,
§ 208, 84 Stat. 1770, 1778
(1970) wccccccccccccccccecs
Pub. L. No. 93-383,
88 Stat. 633, 654 (1974)..
Pub. L. No. 97-35, § 322,
95 Stat. 400 (1981).......
Pub. L. No. 98-181,
§ 206(d) and (e),
97 Stat. 1180-81 (1983)...
S. 2864, § 211, 115 CONG.
REC. 26,726 (1969) ...ee06.
i5
10
16,32
13,18,19
32,42
19,42
14,17
38,39,42
S. 2761, 9lst Cong.,
lst Sess., 115 CONG. REC.
BieDIS CADED) ccoccccccccces 20
12 U.S.C. § 1715z-1b,
Pub. L. No. 95-557,
§ 202, 92 Stat. 2088
CAP TEP coccceccececececeeces 49
1437 (1982)... 12
$
42 U.S.C. § 1437a(a) (1982) 13,30,33
§
42 U.S.C. 1437a(b) (5)
pl) PPT TrTrrrrrese 43
42 U.S.C. § 1437gG(b)
Ps rrr rTrTrTrTrrre3r 17
42 U.S.C. § 1441 (1982)... 12
Se Weomewe © Beet coeoceoooes 2,4
Ce REGULATIONS
24 C.F.R. Part 245,
50 Fed. Reg. 32,396 (1985) 48
24 C.F.R. Part 450,
41 Fed. Reg. 43,330 (1976) 48
BS Gebome DOERR BIBGcceccece 47
24 C.F.R. $§ 2.1-2.131.... 47
24 C.F.R. $§ 105.11-105.22 47
me Gebotte B Bee tooececeseos 47
24 C.F.R. § 247.6 (1985).. 49
Page
24 C.F.R. § 401, 40 Fed.
Reg. 29,073 (1975)....24-. 38
24 C.F.R. § 882.216,
49 Fed. Reg. 12,215 (1984) 48,49
24 C.F.R. § 913.102 (1985) 10
24 C.F.R. § 913.107 (1985) 25
24 C.F.R. § 913.110(f)
and (g) (1985).........e.. 61
24 C.F.R. §§ 965.470 10,27,34
through 965.480 (1985).... 35,41,50,62
24 C.F.R. § 990.104(a)
(19GS) wcccccccccccccscccses 53
Former 24 C.F.R. §§ 860.401
through 806.409, 40 Fed.
Reg. 44,324 (1975)......4.. 10,25
Former 24 C.F.R.
§§ 865.470 through 865.482, 10,26,34
45 Fed. Reg. 59,505 (1980) 35,58,62
Proposed 24 C.F.R.
§ 865.476(d), 47 Fed.
Reg. 35,249, 35,254 (1982) 41
45 Fed. Reg. 59,502 (1980) 58
47 Fed. Reg. 35,250 (1982) 1]
47 Fed. Reg. 54,954 (1982) 43
49 Fed. Reg. 21,483 (1984) 1]
49 Fed. Reg. 31,403 (1984) 4)
Vii
Page
D. LEGISLATIVE MATERIALS
CONF. REP. 740, 9lst Cong., 8,19,20
lst Sess. 30 (1969) 21
115 CONG. REC. 21,973 (1969) 28,30
115 CONG. REC. 21,974 (1969) 30
115 CONG. REC. 26,721 (1969) 28,30
115 CONG. REC. 38,625 (1969) 29
115 CONG. REC. 38,778 (1969) 29,30
Hearings before the Sub-
committee on Housing and
Community Development of
the House Committee on
Banking, Finance and Urban
Affairs, 97th Cong.,
lst Sess., Part I, 654
(Serial No. 97-10, Apr. 8,
BOOED coccecccces bebeeecocce 39,40
S. REP. NO. 392, 9lst Cong., 8,21,
lst Sess. 46 (1969)....... 29,30
E. MISCELLANEOUS
HUD Circular, "Additional
Procedures for Implement-
ing Section 9, PL 92-213,
Public Housing Rent Reduc-
tions, Welfare Families,”
HM 7465.15 (September 14,
lyr) PPPrrrrrTrerrereeeeeree 24
viii
Page
HUD Circular, “Implemen-
tation of Section 9,
Public Law 92-213; Public
Housing Rent Reductions,
Welfare Families,"
HM 7465.13 (January i18,
BOTS) ccccccccccccecccocccs 24,61
HUD Circular, "Implementa-
tion of Sections 212 and
213 of the Housing and
Urban Development Act of
1969," RHM 7465.1 and 9,22,23
RHM 7475.1 (Mar. 16, 1970) 61
HUD Circular, “New Defini-
tion of Income - Implemen-
tation of Section 208 of
the Housing and Urban
Development Act of 1970,"
HM 7465.10 (April 4, 1972) 24
HUD Circular, “Rent Adjust-
ments Required By Section
213 of the Housing and
Urban Development Act of
1969," RHM 7465.3
(Apr. 24, 1970), App. l,
Bu Jecccccccccccccccccccce 10,23,24
ix
HUD, Congressional Justi-
fications for 1986 Esti-
mates, T-5 (March 1985),
reprinted in HEARINGS
ON DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT -
INDEPENDENT AGENCIES
APPROPRIATIONS FOR 1986,
Subcommittee of House
Committee on Appropria-
tions, 99th Cong.,
lst Sess., Part 5,
De SES TEES) ccccccccccecs 44,45,46
HUD, FIELD OFFICE MONITOR-
ING OF PUBLIC HOUSING
AGENCY (PHA) ADMINISTRA-
TION OF THE LOW-INCOME
PUBLIC HOUSING PROGRAM,
Ch. 1, 4 1-1(b) (Handbook
No. 7460.7, 1981)......... 45
INTEREST OF AMICUS CURIAE
Since 1968 the National Housing Law
Project, a California non-profit corpora-
tion, has been a federally funded Legal
Services support center which aids at-
torneys throughout the country who re-
present low-income clients with housing
problems. In the course of its 18-year
existence, the Project has developed
broad and detailed knowledge of poor
people's housing problems, of the
history, purpose and intricacies of the
federal housing laws, and of the mecha-
nisms needed to ensure that those laws
are carried out. In this case, the Pro-
ject’'s interest is in ensuring that the
Court is as fully informed as possible
about the background of the federal
housing laws and that the federal courts
remain available to enforce those laws.
This brief is filed with the consent of
all parties.
SUMMARY OF THE ARGUMENT
Plaintiff public housing tenants
sued in federal court for return of
utility surcharges wrongfully extracted
from them by their federally subsidized
public housing agency. Amicus Curiae
will limit its argument to three points.
First, federal law grants plaintiffs a
right to pay only 30 percent of their
incomes for housing, including reasonable
use of utilities. This right is guaran-
teed by mandatory provisions of federal
statutory and regulatory law, which were
enacted specifically to protect the
tenants’ interest in paying affordable
rents. These laws contain sufficiently
specific standards for judicial enforce-
ment.
Second, Congress has manifested no
intention, either expressly or implicit-
ly, to prevent the courts from enforcing
these rights under 42 U.S.C. § 1983.
PhO
Congress has not chosen to rely upon
United States Department of Housing and
Urban Development (HUD) as the exclusive
enforcer of these federal laws.
Third, an order requiring the public
housing authority to return the illegal
overcharges is an appropriate remedy.
Plaintiffs are merely seeking the return
of their own money taken from them by
defendant in deliberate disregard of
clearly prescribed federal laws. Thus,
the decision below, which rests upon
unrealistic and unsupported assumptions
about HUD's enforcement function, must be
reversed. To do otherwise would severely
undermine the effectiveness of Section
1983 which this Court has previously
struggled to preserve, would do violence
to Congress’ intent to guarantee
affordable rent levels to public housing
tenants and would offend the most
fundamental notions of fairness.
3
ARGUMENT
I. PLAINTIFFS HAVE A RIGHT SECURED BY
FEDERAL LAW TO PAY NO MORE THAN THIRTY
PERCENT OF THEIR INCOMES FOR SHELTER AND
REASONABLE USE OF UTILITIES
Under 42 U.S.C. § 1983, plaintiffs
must be seeking redress of rights secured
by federal law. 42 U.S.C. § 1983; Maine
v. Thiboutot, 448 U.S. 1 (1980); Penn-
hurst State School anc Hospital iv.
Halderman, 451 U.S. i, 28 (1981). Plain-
tiffs have such federal rights.
In 1969 when Congress enacted the
Brooke Amendment, it reversed a long-
standing policy granting local housing
authorities wide discretion in setting
their rents. By the Brooke Amendment,
Congress decreed that tenants should pay
no more than one-fourth of their incomes
for rent. Relying upon the definition of
rent that had been included in the
Original U.S. Housing Act, as well as the
specific legislative history of the 1969
~_
Amendment, HUD immediately interpreted
the statute to mean that tenants could
not be charged more than one-fourth of
their incomes for shelter and reasonable
use of utilities. HUD has followed that
interpretation consistently. As early as
1963, HUD had established guidelines for
the public housing agencies (PHAs) for
determining when utility use is reason-
able. In 1980 HUD formalized those
standards in mandatory regulations. In
Gisregard of those laws, the Roanoke PHA
charged its tenants extra for use of
utilities which they have a right to use
without incurring any surcharges.
The statutory and regulatory laws
upon which plaintiffs rely create rights
for plaintiffs. Those provisions of
federal law are mandatory. They were
enacted solely to protect the tenants’
interests. They provide sufficiently
specific standards for measuring reason-
oS
able utility use to which the tenants are
entitled. Thus, the statutory and
regulatory provisions upon which plain-
tiffs rely have the obligatory nature,
the quality of specificity, and the
purpose of protecting the plaintiffs’
interests which “right creating” laws
must have.
A. Payment of the Statutorily Pre-
scribed Rent Grants Plaintiffs a Right
Not Only To Live In Their Rented Homes
But Also To Use the Utilities As Well, As
Long As Their Use Is Not Excessive
The right created by the statute and
its implementing regulations includes the
right not to be surcharged for reasonable
use of utilities. Although the term
"rent" is not currently defined in the
U.S. Housing Act itself, the original Act
expressly stated that rent should include
reasonable utilities. Pub. L. No.
75-412, § 2(1), 50 Stat. 888 (1937).
That provision set income limits for
~~ =
for applicants at five times the annual
rental, and specified that annual rental
included “the value or cost to them of
heat, light, water and cooking fuel.”
1a.’ The principle established by that
provision, that rent entitles tenants to
use a reasonable amount of utilities, has
always governed the program's operation
and was specifically included in the 1963
LOCAL HOUSING AUTHORITY MANAGEMENT GUIDE.
45 Fed. Reg. 59,502 (1980).
When Congress passed the Brooke
Amendment, it was legislating against
this background in which public housing
rents included reasonable utility usage.
In fact, the version of the Brooke
Amendment reported out by the Senate
Committee specified that rental means
total shelter cost, “including any
Be Pub. L. No. 81-171, § 306, 63
Stat. 429 (1949) expanded the definition
to "water, electricity, gas, other
heating and cooking fuels, and other
utilities.”
~ =
separate charges to a tenant for reason-
able utility use and for public services
and facilities."* Although the Confer-
ence substitute for the Senate bill did
not include the specific definition of
rental which had been in the Senate bill,
that alteration reflected not a change in
substance but merely an effort to sim-
plify and shorten the relevant statutory
language. As the Conference Report
indicates, "the Conference substitute
retains the basic concept of Section 211
of the Senate bill by generally limitins
rents that may be charged public housing
tenants to no more than 25 percent of
their income." CONF. REP. 740, 9ist
Cong., lst Sess. 30 (1969).
Immediately after the bill was
enacted, HUD published a Circular speci-
fically interpreting the statutory term
Be S. 2864, § 211, 115 CONG. REC.
26,726 (1969); see S. REP. NO. 392, Q9ist
Cong., lst Sess. 46 (1969).
=§-
"rent" to include payment for the use of
a reasonable amount of utilities.” That
Circular applied the 25 percent of income
limit to gross rent. Using the language
from the original U.S. Housing Act almost
verbatim, it defined gross rent as con-
tract rent plus “the value or cost to the
tenant for reasonable amounts of utili-
ties” they had to purchase. It defined
contract rent as the rent charged for the
use of the dwelling and utilities suppli-
ed by the PHA. It defined utilities as
“water, electricity, gas, other heating,
refrigeration and cooking fuels, and
other utilities.” Id. at 4.
One month later HUD also explained
that tenants who pay for their own utili-
ties should get rent credits or cash pay-
ments if their reasonable utility costs
3. HUD Circular, “Implementation of Sec-
tions 212 and 213 of the Housing and Urban Devel-
Opment Act of 1969," RHM 7465.1 and RHM 7475.1
(Mar. 16, 1970) (hereinafter HUD's March 16, 1970
Circular.)
<=
exceed the rent limitation. HUD explain-
ed that “such adjustment is required to
ensure compliance with the 25 percent
limitation on gross rents and to ensure
equitable treatment as between tenants
who supply all or certain of their utili-
ties and those for whom all utilities are
supplied by the LHa.*4 This contempo-
raneous interpretation of the statutory
language by the agency charged with its
implementation is entitled to great
deference. Udall v. Tallman, 380 U.S. l,
16-17 (1965).
In addition, HUD has without excep-
tion adhered to that interpretation ever
since 1970.> In fact, in explaining why
4. HUD Circular, "Rent Adjustments Required
By Section 213 of the Housing and Urban Develop
ment Act of 1969," RHM 7465.3 (Apr. 24, 1970),
App. 1, p. 3 (hereinafter April 24, 1970 Circular).
>. See 24 C.F.R. § 913.102 (1985) (defini-
tion of “tenant rent”); 24 C.F.R. § 965.470
(1985); former 24 C.F.R. § 865.470, 45 Fed. Rec.
599,505 (1980); former 24 C.F.R. § 860.403(a), (1)
and (p), 40 Fed. Reg. 44,324 (1975) (definitions
of contract rent, gross rent and utilities).
-~10-
it was rejecting a proposal
that Brooke
Amendment rent should not include payment
for utilities, HUD explained:
the Department historically has
considered “rent” under the
oublic housing program to
include both shelter cost and a
reasonable amount for utili-
ties. .. . The general stand-
ard of ‘reasonable amounts of
utilities’ predated the Brooke
Amendment and has not i been
guestioned subsequently.
47 Fed. Req. 35,250 (1982). See 49 Fed.
21,483 (1984).
B. The Statutory and Regulatory
Provisions in Question Are Mandatory
For federal laws to secure a
within the meaning of Section 1983,
must
impose mandatory obligations.
hurst State School and Hospita
right
.
*
Halderman, 451 U.S 1, 28 (1981).
Th
a a5
e
Brooke Amendment and its implementing
regulations
Congress has established numerous
for
the federal housing programs,
have that obligatory quaiity.
goals
as
1‘¢f
» »
did with the disabled persons Bill of
Rights at issue in Pennhurst. See, e.g.
42 U.S.C. § 1437 (1982); 42 U.S.C. § 1441
(1982). Possibly, those policy declara-
tions by themselves do not create rights
protected by federal law within the mean-
ing of Section 1983.° However, those
general policies and goals are not at
issue in this case. The rights plain-
tiffs seek to enforce here are protected
by Section 3 of the U. S. Housing Act, an
operative provision of the legislation
that creates mandatory obligations.
The mandatory nature of this statute
is revealed first by the statutory lan-
guage. Section 3 of the Act now provides:
A family shall pay as rent for
a dwelling unit assisted under
this Act the highest of the
following amounts, rounded to
the nearest dollar:
6. See, e.g., Perry v. Housing Authority of
Charleston, 664 F.2d 1210 (4th Cir. 1981); but
see Commonwealth of Pennsylvania v. Lynn, 501
F.2d 848, 855 (D.C. Cir. 1974).
-12-
(1) 30 percent of the
family's monthly adjusted in-
come ;
(2) 10 percent of the
family’s monthly income; or
(3) If the family is
receiving payments for welfare
assistance from a public agency
and a part of such payments,
adjusted in accordance with the
family's actual housing cost,
is specifically designated by
such agency to meet the fan-
ily's housing costs, the
portion of such payments which
is so designated.
42 U.S.C. § 1437a(a) (1982). The first
indication of the mandatory nature of
this statutory provision is Congress' use
of the word “shall,” which leaves no
discretion with the family to pay less or
with the PHA to charge more.
A review of the changes in the rent
limitation provision since 1969 confirms
its mandatory nature. The 1969 amendment
directed that rents “may not exceed one-
fourth of the family's income, as defined
by the Secretary." Pub. L. No. 91l-1°2,
»13<
§ 213, 83 Stat. 389 (1969). That lan-
guage granted the housing authority
discretion to fix the rent as long as the
amount chosen did not exceed the federal
maximum. When the Act was revised exten-
sively in 1974, the language was changed
to read “the rental for any dwelling unit
shall not exceed one-fourth of the fam-
ily's income as defined by the Secre-
tary.” Pub. L. No. 93-383, § 201, 88
Stat. 653 (1974). If there was any
ambiguity about the word “may in the
1969 amendment, it was eliminated by
Congress’ use of “shall” in 1974.
In 1981 Congress adopted the current
version of the rent limitation quoted
above. In doing so, Congress eliminated
the PHAs' previous discretion to charge
less than the federally prescribed
maximum. Because Congress has now set
the exact rents itself, the statute no
longer needs to be phrased as a limit
-14-
which the local PHA shall not exceed and
it is not so phrased. Nonetheless, when
viewed in this historical context, the
present statutory language clearly
creates not only a tenant duty to pay a
specified amount of rent but also a
mandatory PHA duty not to charge more.
An historical review of the PHA's
changing role in the rent-setting process
also demonstrates that these statutory
provisions are mandatory and the PHAs
have no discretion to disregard them.
The original design of the Act was to
provide federal assistance for the
capital costs of developing housing
projects. All other costs, including
operating costs, were to be covered by
rents. Public housing agencies were
given full autonomy in setting their
rents. Pub. L. No. 75-412, $§ 10(b) nd
ll(b), 50 Stat. 888, 892-93 (1937).
In 1959 Conagress reaffirmed this
»1S<
original scheme by adopting what became
known as the local autonomy amendment.
It vested in local PHAs maximum responsi-
bility for establishing rents subject to
the U. S&S. Housing Authority's approval.
Pub. L. No. 86-372, § 501, 73 Stat. 654,
679 (1959). Between 1959 and 1969,
however, as operating costs escalated
much more rapidiy than tenants’ incomes,
PHAs had to increase rents, wiiich either
extracted exorbitant portions of low-in-
come families* incomes or excluded ther
altogether. In response, Congress
acoptedc the Brooke Amendment in 1969,
beginnin, the process which by 1981 with
Grew ali the discretion PHAs originally
had in setting rents.
The first step in that evolutionary
process was the imposition of the 2
percent limitation and the provision of
federal operating subsidies to cover the
lost rental income. The next step was
taken in 1974, when Congress required
PHAs to charge tenants minimum rents
equal to five percent of the tenant's
gross income or the tenant's welfare
grant for housing. Pub. L. No. 93-383,
88 Stat. 633, 654 (1974). In 1974
Congress also amended the operating sub-
sidy provisions to require PHAs to set
rents high enough to make the sum of all
the rent chargea equal t< at least
20 percent of the sum of all the incomes
ih
the PHA's tenants. 42 ie
ry
me
§ 1437gqi(b) (1982). These two 1974 pro-
visions thus narrowed the band withir
which PHAs could set rents by establish-
ing federal maximums and minimums.
In 1981] Congress comp leted the
process by eliminating the last vestigé«
of PHA discretion to choose their owr
rents. The 1981 statutory amendment
specifies the exact criteria the housing
authority must follow. Although PHAs
retain discretion regarding other aspects
of the program, on the issue of rents,
Congress made the federal laws paramount
and granted the PHAs no autonomy.
Relatecd statutory provisions are
also informative. The original Brooke
Amendment included a provision stating:
the requirement .. .that the
rents fixed by public housing
agencies may not exceed one-
fourth of a low-rent housing
tenant's income shall be
effective not later than 9
Gays following the date of the
enactment of this Act.
Pub. No. 91-152, $ 2Z213(b), 83 Stat.
-
389 (1969). By making the statutory
provision effective on a specific date,
Congress revealed its understanding that
this provision was mandatory, not
precatory. That revelation is mace ever
more clear by the reference in the quotec
statute t« the rent limitatior as a
"requirement," a reference which was not
an isolated incident. The very next
sentence of the amendment specified that
-18-
the “requirement” shall not apply if
application of the rent limit would
merely reduce a public housing tenant's
welfare assistance. Id.
Again, in 1970 when it enacted a
statutory definition of income, Congress
expressly referred to the Brooke Amend-
ment as the “one-fourth of family income
limitation.” Pub. L. No. 91-601, § 208,
84 Stat. 1770, 1778 (1970). Congress
also required that the new income defini-
tion "shall be effective at the first
annual re-examination of the tenants’
income subsequent to March 24, 1971." As
with the 1969 amendment, Congress’ deci-
sion to impose a mandatory effective date
indicates that the Brooke Amendment was
not a precatory statutory provision.
The legislative history dictates the
same conclusion. The Conference Report
guoted above at p. 8, describes the
amendment as limiting the rents that may
-19-
be charged. CONF. REP. NO. 740, 9lst
Cong., list Sess. 30 (1969). Again, in
Giscussing the exclusion of welfare
tenants from the amendment, the Conferees
referred to the rent limitation as a
"requirement." Id.
The revisions of the bill during the
legislative process provide further con-
vincing evidence of its mandatory nature.
The bill Senators Brooke and MacIntyre
introduced did not expressly limit rents
to twenty-five percent of income. See S.
2761, 91st Cong., lst Sess., 115 CONG.
REC. 21973 (1969). Instead, it granted
HUD new authority to make rental assist-
ance payments to PHAs which would then be
able to reduce tenants’ rents to one-
fourth of their incomes. The “one-fourth
of tenants’ income” language was used
only to measure the amount of the rental
assistance payment, i.e., the difference
between one-fourth of the tenant's income
=2@e
and the actual rental for the unit. The
Senate Committee's bill maintained that
structure. See S. 2864, 9lst Cong, list
Sess. § 211; S. REP. NO. 392, 9lst Cong.,
lst Sess. 46 (1969). The House and
Senate Conferees added’ the language
clearly indicating that the one-fourth of
tenant's income standard was to be a man-
datory federally prescribed rent
limitation. See CONF. REP. NO. 740, 9lst
Cong., list Sess. 11 (1969). This evolu-
tion of the statutory language, from
initial provisions which might not have
been read as obligatory to one which
Clearly was, further illuminates’ the
deliberate congressional intention that
the rent limitations be mandatory.
HUD's actions further confirm that
the Brooke Amendment and its implementing
regulations are mandatory. Immediately
after the statute was adopted, HUD issued
a Circular directing housing authorities
o2i-«
how to implement the new rent limitation.
HUD's March 16, 1970 Circular, supra
note 3. That Circular made three
important points. First, a tenant's rent
must not exceed 25 percent of income.
Second, the rent limitation had to be
Ww
effective not later than March 24, 1
Third, if the March 24 1970, deadline
could not be met, the rent adjustment
wn"
to March 4, 1i97¢ Ie at 1, 3 and 6
The Circular’s repeated use of the word
"shall," its constant reference to the
scheme indicate that HUD interpretec the
statutory provision tc be mandatory
, _—% . . . -
That is explicitiy confirmec by the
Oy
>
‘
Circular’s statement that the statute
for rent ...«.." Id. at 3. Such a
contemporaneous interpretation of a newly
enacted statutory provision by the agency
charged with its administration must be
given great weight. See Udall v. Tall-
mar 38 U.S. ] 16-17 (1965)
One month later, HUD reaffirmed that
interpretatior if its next impiementing
. | . rrr * q : * 4
ircuiar. See HUD's Aprii 24, L9
wv
ircuiar, supra note 4 Phat ix ar
Dy its Very citie, indi até ; That ;
considered the statute mandatorz In the
: y Of the ircular, Hi statec
The actions require by a H?}
immeciateiy aré
. Comt < ren? At 4 >
. Si) _ iT mré (sec reé “¢ > r ‘
ia 2}
Appt >.
wn 7 AT Se \w~ > 7 ra .
re ‘ + identi? tena : ‘
>. Z > reau , |
4 WN . ify att -s a
anc basis therefor;
5. Compute rent rebates
from 3/24/70 to date adjustment
is to be put into effect and
apply as credit against future
rent charges;
6. Reflect adjusted
monthly rent ir lease, as
appropriate.
Id. at Appendix 1, p. 1 As Congress
made further refinements if the Br ke
Amendment in i9/7ft ana i971, HUI issued
adacitionail Circulars indicating how the
Local housing authorities si! id imple
ment those changes The netant
references throug! it tr. 2se it liars ¢t
what the PHAS shall” di leave ne qdoubt
that HI interprete the statute t be
mandator
). HUD Circular, "New Definition of Incoam
Implementation of Section 208 of the Housin
and Urban Development Act of 19/70," HM /465.1
(April 4, 1972); HUD Circular, “Implementation of
Section 9, Public Law 92-213; Public Housing Rent
Reductions, We) fare Families,” HM 1465.1]
(January 18, 19/72) (hereinafter HUD's January i=
1974 Circular) ; HUT Circular, "Addi tiona
Procedures for Implementing Section 9, PL 92-21
Pubii Housing Rent Reductions, Welfare Fam
lies,” HM 7465.15 (September 14, 19/2)
24
In i975, when HUD finally published
formal regquiations in the Code of Federa]
Regulations to implement the Brooke
Amendment's rent limitations, HUD adhered
to its initial interpretation that the
Brooke Amendment creates mancator
obligations. Former 24 C.F.R. $8 860.4
throug? St 409, . Fe Re 44 “
(i975) rhose requiations expressiy
directed that rent “shall not exceed” j
percent of famiiy it me a onstant
usec the wor "sl . | the re ator
Gcertiniti s of ji me al the operative
terms Former 24 rR ss of 3 a
Bé 4 Similiar I . rrent
re ti ' implement i the rrent
versio! r tne Br xe Ate ime nt sé the
same ma! at la ace 4 ;
e 6 (1 os
The mancatory nat I these
recera Lawe : eve mor « Strinxi
how housing authorities must calculate
reasonable use of utilities. See former
24 C.F.R. §§ 865.470 through 865.482, 45
Fed. Reg. 59,505 (1980). Throughout HUD
repeatedly uses the word “shall” to in-
Gicate the actions which the PHA must
take.° Any reading of these regulations
must lead ineluctably to the conclusion
that HUD has interpreted the Brooke
Amendment to be mandatory and intends its
implementing regulations to be equally as
mandatory.”
8. Thus, among other things, the regula-
tions provide that the PHAs “shall establish"
allowances (§ 865.473(a)); the allowances "shall
be designed” to include utility consumption for
major equipment (§ 865.473(b)); separate allow
ances “shall be established” for each utility and
for each category of Gwelling units (§ 865.474);
the allowances "shall be based upon” consumption
records (§ 865.476(a)); the allowances "shall be
established” at levels sufficient to meet the
requirements of about 90% of the dwelling units
(§ 865.477); the surcharge "shall be computed” by
applying the utility suppliers’ average utility
rate (§ 865.479); and, finally, PHAs "shall
establish such allowances effective as of a date”
not later than 120 days from the effective date
of the rule (§ 865.482).
9. The 1984 regulations, which are not at
=26-
C. These Mandatory Obligations Were
Imposed to Protect Tenants’ Interests
For a law to create a right, the
duties which it imposes on one party must
be so imposed in order to protect the
interests of a second party. Only if
this second element is present can the
legal provision be viewed as having
"secured" a right. Courts have relied
upon numerous factors to determine
whether particular provisions of law
create or secure rights. Whatever
factors are considered to be relevant,
whether they be the purpose of the law,
the type of language used, the legisla-
tive history, or related statutory
provisions, it is clear that the duties
issue in this case, are similarly mandatory in
nature. 24 C.F.R. §§ 965.470 through 965. 48(
(1985). As with the earlier regulations, HUD has
repeatedly used the mandatory term “shall” to
establish the steps which the PHAs must take ard
the standards which the PHAs must follow. E.g.,
24 C.F.R. §§ 965.473, 965.474, 965.476(b),
965.476(d), 965.477, 965.478 and 965.480 (1985).
=29<
created by the Brooke Amendment and its
implementing regulations secure the
rights of public housing tenants.
An analysis of this element of the
case must begin with the purpose of the
Brooke Amendment. As is noted above, p.
16, by 1969 dramatic increases in
operating costs had forced PHAs to raise
rents so high that low-income families
either paid exorbitant rents or were
excluded from public housing altogether.
Congressional recognition of this problem
is evident in the legislative history of
the 1969 amendment. *° Congress‘ solution
10. Senator McIntyre stated, “Local autho
rities have been forced to set minimm incame
requirements and raise rentals in order to meet
the rising costs of maintenance and operation.
As a result, more and more of the poor and very
poor are barred from admission to public housing
projects.” 115 CONG. REC. 21,973 (1969). Sena-
tor Brooke argued: “tenants are unable, in many
cases, tO meet prior payment schedules without
allocating a disproportionate share of their
income to housing, and they find it impossible to
do so as their rental payments increase still
further.” 115 CONG. REC. 26,721 (1969). Repre-
sentative Dwyer observed: “the much higher costs
of today are no longer able co be financed out ol
-2?8-
was to impose the mandatory limit on
tenants rents to ensure that they wouid
not be paying exorbitant portions of
ce
7
®
~
al
--
“3
[)
O
3
®
4)
>
©
a |
al
4)
3
ce
ty
5
(i
cr?
©
"T)
Lol
©
<
4
muc! ana the solution Concaress chose
2.@., ¢t limit the rent charged, it is
lea that -onaress purpose was t
protect che tenants interests j not
heir harce ~ ‘ +ha +?) .
att?
This r rt — is a = <<. eaieé
epeated } the legislative histor
ey + ime the A me in + was tic ces
Z . Z : acc rer » + .
rental income amc in mal ases pw hous ix
. > >
7 : " . ~ ~s |
rents now greatiy exceec the tenants abil iit)
La . il cy REX $e rit (19609 | See ais
remarks of Representative Sullivan); S. REP. ™
9 Sist Cong., ist Sess. i9 (1969 (operat irx
> =
Lad
costs “are too high for the very poor to bear’)
ON REX 5, O« (i909) (remarks of Senator
xT :
the floor of the House or Senate, it was
reiterated that the rent limitation was
added to ensure that poor people could
live in public housing without paying
exorbitant rents. Senator Brooke's
observation that “it would enable fami-
lies, regardless of how low their incomes
may be, to afford decent housing at a
reasonable cost" is representative of the
views expressed by ai1.}?
Congress' language also shows that
the rent limitations were imposed to
create rights for tenants. It is note-
worthy that the statute mentions only the
families, the beneficiaries of the
limitation, not the PHAs upon whom the
duties are imposed. See 42 U.S.C.
§ 1437a(a) (1982). This focus upon the
11. 115 CONG. REC. 21,973 (1969); see 115
CONG. REC. 21,974 (1969) (remarks of Senator Mac-
Intyre); 115 CONG. REC. 26,721 (1969) (remarks of
Senator Brooke); 115 CONG. REC. 38,778 (1969)
(remarks of Representative Dwyer); S. REP. NO.
392, 91st Cong., lst Sess. 19 (1969).
-30-
tenants in the statutory language is a
strong indication that the federal laws
create rights for these tenants. See,
e.g., Cannon v. University of Chicago,
441 U.S. 677, 690, n.13 (1979); Howard v.
Pierce, 738 F.2d 722, 725-26 (6th Cir.
1984).
Even more telling is the structure
which Congress chose, i.e., setting the
rent at a percentage of the family's
individual income, instead of specifying
particular dollar maximums or relating
rents to factors other than the tenants’
own financial circumstances. That choice
reveals that this limitation is imposed
in order to protect the interests of
specific low-income tenants, not low-in-
come people generally, the society at
large, the PHAs or the federal govern-
ment. Individualizing the rent limita-
tion in this manner and to this degree
makes it clear that the statute is
-3i<-
intended to create rights for those
individual families.*
D. The Federal Laws Plaintiffs Rely
Upon Are Sufficiently Specific to "Se-
cure" Their Rights
By drawing an analogy to the prin-
ciple that judicial review of federal
agency action is precluded when there is
"no law to apply,” Citizens to Preserve
Overton Park v. Volpe, 401 U.S. 402, 410
(1971), one might conclude that some
federal laws are not sufficiently speci-
fic to “secure” rights within the meaning
12. That Congress was legislating to pro-
tect the tenants is also shown by the section of
the original Brooke Amendment which specified
that the rent limitation would not apply to a4
welfare family if HUD determined that limiting
the rent would just reduce the family's welfare
assistance. Pub. L. No. 91-152, § 213(b), 83
Stat. 379, 389 (1969). By thus making the limi-
tation inapplicable when it would not benefit
tenants, Congress revealed that the limitation
itself was imposed in order to protect tenants.
This concern with protecting tenants' interests
is also reflected by Congress’ insertion of the
original amendment into a statutory provision
that required housing authorities and HUD to cor
sider the families’ rent-paying abilities when
fixing rents. Pub. L. No. 86-372, § 503, 73
Stat. 654, 680 (1959).
-32-
of Section 1983. Certainly reasoning of
that sort is reflected in Phelps v.
Housing Authority, 742 F.2d 816 (4th Cir.
1984), upon which the court below relied
so heavily.
Nonetheless, the laws before the
Court in this case are not of that
character. The Brooke Amendment and its
implementing regulations provide the
judicially ascertainable standards the
courts need to decide whether the law has
been violated. The statute specifies
with utmost clarity the amounts which
tenants must pay as rent. 42 U.S.C.
§ 1437a(a) (1982). HUD's implementing
regulations have clearly and continuously
interpreted the statutory term "rent" to
include payment for the use of a reason-~
able amount of utilities. See pp.
6-11, above. More importantly, HUD's
regulations have set out clear and
unambiguous standards which local housing
-33-
authorities must follow and steps the
PHAs must take in determining the amount
of utilities that tenants have a right to
use without a surcharge. 24 C.F.R.
§§ 965.470-480 (1985); former 24 C.F.R.
§§ 865.470-482.
What is even more significant about
this case is that the PHA did absolutely
nothing to comply with the 1980 regula-
tions. Instead, it merely "deemed" its
allowances to be in compliance with the
regulations. Int. Ans. No. 19(c). Thus,
in deciding whether this housing auth-
ority has violated plaintiffs’ rights,
the court will have clearly ascertainable
standards to guide its inquiry and will
be performing a classic judicial function
of applying law to the facts before it.
For example, the housing authority
was obliged to base its allowances upon
the actual consumption records for the
types of units to be covered. Former 24
=34-
C.F.R. § 865.476(a). The Roanoke Housing
Authority did not do that. The PHA was
unambiguously obliged to establish the
allowances high enough to meet’ the
requirements of about 90 percent of the
dwelling units. Former 24 C.F.R.
§ 865.477. Again, the Roanoke Housing
Authority did not do that. The PHA was
obliged to provide the tenants an oppor
tunity to comment on the allowances.
Former 24 C.F.R. § 865.482; see 24 C.F.R.
§ 965.473(c) (1985). The Roanoke Housing
Authority did not do that. The PHA was
obliged to submit the allowances to the
HUD field office for approval. Former 24
C.F.R. § 865.473(a); see 24 C.F.R.
§ 965.473(d) (1985). Again, the Roanoke
Housing Authority did not do that. To
avoid tenant misunderstanding, the PHA
was obliged tc include a statement of the
specific items of major equipment whose
utility consumption requirements were
@3S-
included in determining the amounts of
the utility allowances. Former 24 C.F.R.
§ 865.473(b); see 24 C.F.R. § 965.473 (c)
(1985). Again the Roanoke Housing
Authority did not do that.??
Thus, as the facts of this case
graphically illustrate, 4 court which
eee
enforces public housing tenants’ rights
not to be surcharged for reasonable use
ee eo ee ee
of utilities will be undertaking a4 task
which courts are well-equipped to perform
and which is classically judicial in
nature. To carry out that responsibility
will not demand of the courts any exper
tise in the management of housing or in
A
the intricacies of finance and econo-
mics.
13. See Int. Ans. Nos. 7, 10, 15, and 19.
14. It does not matter that the rights
| which tenants seek to enforce are made specific
| by the HUD regulations which implement the basic
| statutory provision. In 1969 this Court without
dissent decided that rules pramilgated y HUD
pursuant to its general rulemaking power -reate
rights for public housing tenants. Thorpe v.
=36-
Pie a —
II. CONGRESS HAS NOT PRECLUDED COURTS
FROM ENFORCING THESE PLAINTIFFS’ RIGHTS
A Section 1983 cause of action is
unavailable when Congress has speci-
fically precluded the plaintiffs from
relying upon Section 1983 as authority to
sue. Middlesex County Sewerage Authority
v. National Sea Clammers, 453 U.S. l,
20-21 (1981). This Court has made it
very clear, however, that the burden is
upon the defendant to show such congres-
sional intent to preclude a Section 1983
cause of action and that a court should
be very reluctant to reach that conclu-
sion. Id. at 20, n.31; Smith v. Robin-
son, U.S. , 104 &.Ct. 3457, 3469
Hous Auth., 393 U.S. 268 (1969). Significant-
ly, in pe the rule in question had not even
been formally pramlgated in the Federal Register
for codification in the Code of Federal Regula-
tions. Instead, it was merely an unpublished
Circular which HUD intended to incorporate
into its PUBLIC HOUSING MANUAL. Certainly, if
the Circular in could create rights, the
more formal and spec regulations at issue in
this case do so.
o$Je
(1984). In this case Congress has taken
no such preclusive step. That the exact
opposite is true is demonstrated by a
careful review of (1) the express actions
Congress has taken regarding judicial
enforcement of the Brooke Amendment;
(2) the ever narrowing role which Cong-
ress has conferred upon HUD regarding the
Brooke Amendment; and (3) the severely
limited capacity which HUD has to enforce
the Brooke Amendment.
A. Congress’ Express Actions
Two legislative developments, in
1981 and in 1983, constitute the only
express congressional actions regarding
judicial enforcement oof the Brooke
Amendment by private parties. In 1981
Congress changed the Brooke Amendment,
raising the rent-to-income ratio and
authorizing HUD to define income. See
Pub. L. No. 97-35, § 322, 95 Stat. 400
(1981). When it did so, Congress also
-38-
exempted from judicial review HUD's
determinations regarding the phase-in of
those changes. Id. at § 322(i). When
Congress considered HUL‘'s bill precluding
judicial review, Representative Vento
said he thought it quite unusual to
preclude tenants from bringing suit in
district court and asked the HUD witnes-
ses why they were proposing to do so. In
response they testified:
The provision that you have
raised a question about is
addressed only at the 5-year
phase in of the increase, and
is not intended, as I wunder-
stand, to eliminate any ten-
ants jsrights beyond that
point.
15. Hear before the Subcommittee on
Housing Community Development of the House
Committee on Banking, Finance and Urban Affairs,
97th Cong., ist Sess., Part 1, 654 (Serial No.
97-10, Apr. 8, 1981). HUD's written response for
inclusion in the record on this question also
Gefended the proposed preclusion of judicial
review as follows:
Limitations on reviewability are not
unusual for narrowly drawn discre-
tionary determinations of Federal
officers.
(Footnote continued)
-39-
Thus, even HUD understood its proposed
1981 preclusion of judicial review to be
extremely limited and to preserve ten-
ants’ rights to enforce all other aspects
of the Brooke Amendment.
Congress’ action in 1983 is the most
significant, however. Having quickly
become dissatisfied with the only limit
it had ever placed upon tenants’ rights
‘to enforce the Brooke Amendment, in 1983
Congress rewrote Section 322(i) of the
1981 Act and repealed the language which
had exempted HUD's decisions from judi-
cial review. Pub. L. No. 98-181,
§ 206(d) and (e), 97 Stat. 1180-81
(1983). This sequence of events, which
constitutes Congress’ only express action
regarding judicial enforcement of the
Review would be precluded only as to
questions arising in the administration
of the phase-in feature.
Id. at 655-656.
-40-
Brooke Amendment, provides a compelling
demonstration that Congress’ design is
not to limit, but to maximize tenants'
rights to enforce federal laws limiting
16
their rents.
B. Congress’ Dissatisfaction with
HUD
The ever-narrowing role regarding
the federal rent limitations that Cong-
16. HUD's own interpretation of the statute
on this point is also significant. HUD's regula-
tions immmize the PHA's utility allowances fram
tenant challenge unless they are arbitrary,
capricious, an abuse of discretion or otherwise
not in accordance with law. 24 C.F.R.
§ 965.473(e) (1985). HUD's proposed regulations
contained a provision precluding tenants from
Challenging allowances in federal courts and
limiting the tenants to state court enforcement.
24 C.F.R. § 865.476(d), 47 Fed. Reg.
35,249, 35,254 (1982). In contrast, the final
regulations allow federal court enforcement. 49
Fed. Reg. 31,403 (1984). HUD explained its
changed position position as follows:
some pla’ ntiffs may prefer to challenge
PHA determinations in Federal rather
than State court and... the Depart-
ment's power to preclude access to
Federal court is doubtful. The Depart-
ment also recognizes that not all
States may have adopted procedures
providing for judicial review of
administrative action. Id.
egje
ress has assigned to HUD reveals a
congressional dissatisfaction with HUD
which belies any claim that Congress
desires HUD to be the exclusive enforcer.
The 1969 Brooke Amendment assigned HUD
the vital responsibility to define the
income to which the 25 percent limitation
was to be applied. Pub. L. No. 91-152,
§ 213(a), 83 Stat. 379, 389 (1969).
Barely one year later, after HUD had
established an income definition which
was quite unfavorable to the tenants
(HUD's March 16, 1970 Circular, supra
note 3), Congress severely circumscribed
HUD's discretion by specifying seven
mandatory income deductions. Pub. L. No.
91-609, § 208(a), 84 Stat. 1770, 1778
(1970). In 1981 Congress lifted the
restraints briefly. Pub. L. No. 97-35,
§ 322(a), 95 Stat. 400, 401 (1981). When
HUD proposed a definition of adjusted
income which Congress found too restric-
@42e
tive (47 Fed. Reg. 57,954 (1982)), Con-
gress immediately withdrew the discretion
it had granted in 1981 and dictated the
adjustments to income in the statute. 42
U.S.C. § 1437a(b) (5) (1982).
A similar decision not to rel. upon
HUD is reflected even in the 1981 legis-
lation that prescribed the rent formulas
directly in the statute, revoking the
PHAs' power to set their own rents at
levels beneath the federal maximum and
repealing HUD's previously conferred
power to review those rents. Congress’
repeated distaste for HUD's definitions
of income and its removal of HUD from the
rent approval process cannot be recon-
ciled with any inference that simultane-
ously Congress was implicitly deciding
that it would rely only upon HUD to
enforce the tenants’ rights.
Cc. HUD's Enforcement Capacity
Severe limitations in HUD's moni-
-43-
toring resources and enforcement struc-
ture rapidly became apparent when they
are realistically scrutinized. Those
limitations also make it difficult to
conceive that Congress has silently
chosen to rely solely upon HUD to enforce
the rent limitation and thus to preclude
Section 1983 enforcement.
To accurately appraise HUD's role as
an enforcer, one must first review HUD's
resources. In fiscal year 1986, nation-
wide there are 3,068 housing authorities,
which operates 11,621 projects containing
1,270,761 units of public housing.*’ HUD
has 11,663 employees, but only 1,113 of
them have responsibilities relating to
17. HUD, Congressional Justifications for
1986 Estimates, T-5 (March 1985), inted in
HEARINGS ON DEPARIMENT OF HOUSING URBAN
DEVELOPMENT ~ INDEPENDENT AGENCIES APPROPRIATIONS
FOR 1986, Subcommittee of House Committee on
Appropriations, 99th Cong., list Sess., Part 5,
p. 231 (1985) (hereinafter Congressional Justifi-
cations) .
-44-
public housing. Id. at B-26and 7-1,38
Of those 1,113, only 973 are assigned to
the HUD field offices (Id. at T-6), which
have the major responsibility for monitor-
ing PHAs.’? sven within the field
offices, only 449 of the 973 employees
with public housing responsibilities have
duties which relate to management.
Congressional Justifications, p. T-12.
When the 3068 PHAs are divided up among
those 449 employees, HUD ends up, on an
average, with only two staff months per
year which can be devoted to any parti-
cular PHA.
Of course, only a minute fraction of
the two months available for each PHA can
18. HUD reports its staffing patterns in
three formats, full-time permanent appointments,
full-time equivalent, and staff years. We are
using the figures for staff years as they are
most camprehensive.
19. HUD, FIELD OFFICE MONITORING OF PUBLIC
HOUSING AGENCY (PHA) ADMINISTRATION OF THE LOW-
INCOME PUBLIC HOUSING PROGRAM, Ch. 1, 4 1-1(b)
(Handbook No. 7460.7, 1981).
-45-
be devoted to monitoring and enforcing
compliance with the federal laws relating
to utility allowances. These 449 field
office personnel are responsible for all
aspects of public housing management.
Because of the broad scope of that
responsibility, HUD divides these employ-
ees into five separate specialist cate-
gories, only one of which -- Utility
Specialist -- is concerned with utility
issues. Id. at T-10 - T-1ll. Even for
the utility specialists, tenants’ utility
allowances comprise only one small aspect
of their jobs. They must also give
attention to the types of utility ser-
vices provided, the types of equipment
utilized, energy conservation measures,
insulation, and relations with the local
utility companies. Id. Given these
resources, it is clear that HUD cannot be
relied upon to be the sole enforcer of
these federal laws and one cannot pre-
-46-
sume, from congressional silence alone,
that Congress was so foolhardy as to have
done so.
HUD has also established no struc-
ture to facilitate effective enforcement
of tenants’ utility allowance rights.
Most significantly, HUD has no mechanism
for tenants to complain to HUD when their
PHA surcharges for reasonable utility
usage. HUD has administrative complaint
procedures for some people. 7° HUD has
established no such mechanisms for public
housing tenants to complain to HUD when
their PHA defies federal law in the
setting of utility allowances. In fact,
HUD does not even have any system to
20. They include, for example, bankers,
builders, and landlords, threatened with
debarment because of past malfeasance (24 C.F.R.
§ 24.7); fund recipients facing grant termination
because of racial discrimination (Id. at
§§ 2.1-2.131); land subdividers charged with
violating the Interstate Land Sales Registration
Act (Id. at Part 1720) and private individuals
seeking redress for discrimination by landlords,
real estate agents and lenders. See Id. at
§§ 105.11-105.22.
~~
ensure that tenants are informed of their
rights to adequate utility allowances,
much less of a right to complain to HUD
should those rights be violated.
This gap in HUD's enforcement ef-
forts is reflective of HUD's long-stand-
ing antipathy toward any administrative
mechanisms that might allow the intended
beneficiaries of its programs to bring
complaints to HUD for redress. Time
after time, HUD has had to be goaded by
the courts and Congress to recognize the
rights of tenants to complain and to be
heara.*? Even when HUD does establish
21. 24 C.F.R. Part 450, 41 Fed.
Reg. 43,33 976) with v. Drucker, 317
F. Supp. 1122 (D. Mass. ), att'd om other
gous. 438 F.2d 781 (lst Cir. I971). ath
C.F.R. § 401, 40 Fed. Reg. 29,073 (197 th
v. Washington, 497 F.2d 626 (D.C. Cir.
er v. Kate Maremount Found., 365
F. Supp. 758 (N.D. Cal. 1972), aff*d, 504 F.2d
483 (9th Cir. 1974). Compare 24 C.F.R.
§ 882.216, 49 Fed. Reg. 12,215 (1984) with
Nichols v. Landrieu, No. 79-3097 (D.D.C.
Injunction entered Sept. 12, 1980), sub t
Opinion on attorneys' fees, 740 F.2d ois.
1251-52 (D.C. Cir. 1984). See 24 C.F.R. Part
245, 50 Fed. Reg. 32,396 (1985), implementing 12
-48-
a tenant complaint system, most often the
system uses some forum other than HUD,
either the courts, the PHAs or the pri-
vate landlords, with no right to appeal
to HUD. 72 HUD's long-standing antipathy
toward the filing of tenant complaints at
HUD should make a court chary of presum-
ing that Congress intended HUD to enforce
tenants’ rights.
HUD also has no mechanisms to trig-
ger its own enforcement of the utility
allowance requirement in a timely and
effective manner. As the facts of this
case demonstrate, one cause of PHA non-
compliance with the federal law is in-
action by the PHA caused by either its
failure to monitor its utility allowances
or a deliberate decision to disregard the
rules. HUD does require housing authori-
U.S.C. § 1715z-lb, Pub. L. No. 95-557, § 202, 92
Stat. 2088 (1978).
22. See 24 C.F.R. § 247.6 (1985) (courts);
24 C.F.R. § 882.216 (1985) (PHAs).
-49-
ties to review and adjust their utility
allowances annually. 24 C.F.R. § 965.478
(1985). However, HUD does not require
PHAs to file reports summarizing their
annual reviews and has no other
triggering device to alert it to non-
compliance of this type. HUD previously
required that PHAs to submit their allow-
ances to HUD for approval. Former 24
C.F.R. § 865.473. Thus, HUD could catch
allowances which were set improperly,
either too low or too high. In its 1984
regulations, HUD withdrew the HUD appro-
val requirement (24 C.F.R. § 965.473(d)
(1985)), thus eliminating HUD's only
mechanism for timely detection of impro-
per utility allowances.
All that is left to trigger HUD
enforcement is HUD's promise that utility
allowances “will be reviewed in the
course of audits or reviews of PHA opera-
tions." Id. HUD's audit and review
—7
functions are governed only by an
23
internal handbook. Limited utility
reviews, done in accordance with the
Handbook, will not provide the relief
tenants need. In ideal circumstances,
they are scheduled only once every four
years and they need be scheduled only
once every eight years. Id. at Ch. 6,
q@ 6-2(b). In-depth utility reviews will
provide no more satisfaction. They could
be triggered by a significant number of
tenant complaints, (Id. at Ch. 6,
q@ 6-2(a) and Ch. 2, F 2-l(c)(1)(g) and
(i)), but with no established tenant
complaint structure and no scheme to
inform tenants of their right to
complain, that trigger will rarely be
tripped.
Moreover, the field office personnel
23. HUD, FIELD OFFICE MONITORING OF PUBLIC
HOUSING AGENCY ADMINISTRATION OF THE LOW-INCOME
PUBLIC HOUSING PROGRAM (Handbook No. 7460.7,
Rev., Sept. 6, 1985).
Sie
are allowed as much as four years from
the identification of the problem to
begin the review (Id. at Ch. 6, 4 6-1l(a))
and no review question specifically asks
whether the PHAs have conducted annual
reviews or whether utility rates have
increased by 10 percent or more. Id. at
Appendix 12. Neither the timing nor the
content of HUD's review scheme engenders
any faith that HUD can be relied upon to
enforce tenants’ rights to adequate
utility allowances.
Any limited hopes one might have
that HUD could safely be relied upon are
dashed by a candid appraisal of HUD's
financial incentives. When utility
allowances are adjusted upwards in
compliance with federal law, it is HUD,
not the housing authority, which ends up
paying the extra costs. When the utility
surcharges paid by the tenants decrease,
the operating subsidies from HUD in-
-52-
crease, dollar for dollar. 24 C.F.R.
§ 990.104(a) (1985). Thus, HUD has a
strong financial incentive not to enforce
tenants’ rights not to be surcharged for
reasonable utility use.
If there were any doubt about HUD's
incapacity to enforce the utility
requirements, a report done by the HUD
Inspector General would dispel se."
The Report summarizes its findings
regarding HUD field office enforcement as
follows:
Field Offices were not ade-
quately reviewing and analyzing
PHAs' utility operations. As a
result, deficiencies directly
affecting tenants' utility
allowances and HUD operating
subsidies were not disclosed.
Field Office reviews and
analyses did not identify those
PHAS: (1) using outdated or
inadequate utility allowances;
(2) using utility allowances
which were not approved by HUD;
(3) not charging tenants for
excess utility usage or charg-
24. HUD, Office of Inspector General,
UTILITY CHECK-METERING AND ALLOWANCES
(81~TS-101-0012 August 6, 1981).
=$3-
ing for excess utility usage at
a rate below the PHAs' cost; or
(4) paying retail utility
bills. In addition, when Field
Office reviews and analyses did
disclose a deficiency, follow-
up action was not taken to en-
sure that the reported problem
was corrected.
Id. at p. 12.
There is, thus, no basis to fairly
conclude that Congress could have
assigned to HUD the exclusive right to
enforce the federal laws guaranteeing
tenants adequate utility allowances and
thereby silently repealed the tenants’
rights to do so under Section 1983.
III. REFUND OF PLAINTIFFS‘ MONEY IS AN
APPROPRIATE REMEDY IN THIS ACTION
An order requiring the defendant to
return the money that it wrongfully
extracted from plaintiffs is an appro-
private remedy in this action.?> The
25. Whether a particular remedy § is
appropriate presents a question which is distinct
from the question whether private parties have a
cause of action. See, e.g., Davis v. Passman,
-54-
determination whether the remedy is
appropriate begins with the principle
that “where legal rights have been
invaded ang, a cause of action is avail-
able, a federal court may use any avail-
able remedy to afford full relief.”
Guardians Association v. Civil Service
Commission, supra, 463 U.S. at 595
(White, J., citing, Bell v. Hood, 327
U.S. 678, 684 (1946)). In certain
situations it may not be appropriate to
grant monetary relief to redress local
government violations of federal laws. 7°
However, this is not such a case.
442 U.S. 228, 239 (1979); Guardians Association
v. Civil Service Cammission, 463 U.S. 582, 595
(i983). Thus, considerations about the remedy
are not relevant to the determination whether
plaintiffs have a cause of action under Section
1983.
26. See Guardians Association v. Civil
Service Conmission, ra, at 596 (White, J.).
But see id. at 612 a J., concurring in
judgment), 624-34 (Marshall, J.. dissenting), and
635 (Stevens, J., joined by Brennan and Blackmn,
JJ., dissenting) .
@8S<
Here plaintiffs seek a limited
remedy, i.e., return of their money that
was wrongfully taken from then. That
remedy raises no concerns about unfair-
ness that more open-ended liability might
create. The amount to be awarded any
Claimant would be limited to the amount
which the PHA has wrongfully taken from
that claimant. The recovery is measured
by a strict standard, unlike tort damages
where flexibility accorded to triers of
fact can lead to more open-ended liabil-
ity. Just as importantly, the refund
ordered will exactly equal the amount
which the PHA has gained through its
wrongdoing. Unlike a tort or contract
damage action, where a plaintiff's award
is not limited to the benefit the defend-
ants have gained from their wrongdoing,
here the PHA will not be obliged to pay
money it never received. The number of
claimants is also limited, not open-
@$6-
ended. The only qualified claimants are
tenants who have lived in defendant's
projects and from whom the defendant has
illegally extracted money. Thus, this
case is not like one in which a welfare
Gepartment risks liability to a large,
unknown number of potential recipients
who may be wrongfully disqualified.
More fundamentally, however, allow-
ing a PHA to keep money which it had
wrongfully taken from its tenants pro-
vokes a profound sense of injustice. To
the extent that a court decides that a
PHA has violated federal law when
requiring its tenants to pay utility
surcharges, the inevitable conclusion
must be that the money so taken right-
fully belongs to the tenants. Fairness
demands that it be returned to then.
This case also raises no concern
about liabilities a local government did
not and could not anticipate. Compare
=P
Guardians Association, supra, 463 U.S. at
596. The defendant's conduct constitutes
a knowing violation of clear conditions
imposed by Congress and HUD. The PHA's
obligation not to charge more than the
federal maximum for rent and not to
surcharge for reasonable use of utilities
have been clear and unambiguous since
1970. The standards and procedures the
PHA must follow in determining what
utility usage is reasonable have also
been clearly and unambiguously spelled
out since 1980. 45 Fed. Reg. 59,502
(1980). The defendant was clearly made
aware of these obligations and had ample
time to comply. The regulations were
published in the Federal Register, the
PHAs were allowed more than 120 days to
comply (former C.F.R. § 865.482) and the
local HUD field office individually
notified the PHA about the new regula-
tions. Int. Ans. No. 19. Thus in this
-58-
case the defendant cannot and does not
Claim ignorance of these federal rules.
The defendant does not contend that
it took the steps required by the 1980
regulations or that its utility allow-
ances were in fact in conformity.
Instead, having no colorable defense or
justification for not complying with the
federal law, defendant merely asserts
that it “deemed” its old allowances to be
in compliance with the 1980 regulations.
Int. Ans. No. 19(c). Given the clarity
of the federal laws and the defendant's
Geliberate disdain for them, this is a
situation where one can only conclude
that defendant knew or should have known
of its wrongdoing.
It is also important to remember
that, unlike some cooperative federalism
programs, the public housing program
requires local government participants to
make 40-year commitments to own and
-59-
operate the housing projects in accord-
ance with federal law. The federal
government provides all the subsidies
needed to pay the costs not covered by
tenants’ rents. As this Court recognized
in Thorpe v. Housing Authority, 393 U.S.
268, 279 (1969), Congress and HUD have
retained the power to create additional
rights for the tenants and correlative
obligations for the housing authority, at
least as long as the federal government
provides the financial resources the
PHAs need to meet those obligations. The
revenue losses PHAs encountered because
of the rent limitation Congress imposed
in 1969 and the implementing utility
usage standards HUD promulgated in 1980
were fully offset by increased operating
subsidies from HUD. Thus, this is not a
case in which a court should withhold a
damage remedy because a local government
has retained a privilege to withdraw when
-60-
faced with unanticipated burdens.
Because of the long-term commitments
that federal housing landlords make and
the federal government subsidies which
cover expenses that exceed rents, the
normal practice in the federal housing
programs has been to provide refunds when
tenants have been unlawfully overcharged.
27
Numerous examples demonstrate this.
Some of them are in the utility allowance
27. HUD's initial Brooke Amendment Circular
specified that PHAs which were unable to camply
by March 24, 1970, would have to do so retroac-
tively. HUD's March 16, 1970 Circular, ra
note 3, p. 3. The HUD Circular implementing
1971 welfare amendment also required PHAs to make
the changed rents retroactive to the statute's
effective date. HUD's January 18, 1972 Circular,
a note 7, p. 2. HUD's regulations
ementing the 1983 statutory definitions of
adjusted income established an elaborate system
of rent credits and refunds for tenants who were
overcharged after the regulations became
effective. 24 C.F.R. § 913.110(f) and (g)
(1985). Finally, HUD's AUDIT HANDBOOK expressly
recognizes a PHA's abligation to reimburse ten-
ants who have been improperly overcharged and
contemplates retroactive increases in operating
subsidies to offset the PHA's cost of doing so.
HUD, PUBLIC HOUSING AUDIT HANDBOOK, Ch. 4,
q@ 3-3(f) (2) (Handbook No. 7465.2, Rev.
Sept. 1985).
@6l<
28
area itself. Most significantly for
the case before this Court, the 1980
regulations specified that the PHAs were
to establish allowances in conformance
with the new standards "effective as of a
date no later than 120 days from the
effective date of this rule... ."
Former 24 C.F.R. § 865.482. As with the
initial Brooke Amendment Circular, HUD in
this regulation required PHAs that did
not meet the 120-day deadline to retroac-
tively make their changes effective as of
the 120-day date. Thus, here, a
court-ordered refund provides the most
appropriate relief.
CONCLUSION
Public housing tenants have a
federally secured right not to be sur-
charged when they use only a reasonable
28. HUD's 1984 regulations specifically
require that adjustments in allowances that
result from rate changes must be made retroactive
to the time of the rate change. 24 C.F.R.
§ 965.478(b) (1985).
@62e
————
amount of utilities in their homes.
Congress has expressed no intention to
prevent tenants from using the presump-
tively available § 1983 cause of action
to enforce that federal right in federal
court. The appropriate remedy to redress
the injury to plaintiffs is a court order
requiring the defendant housing authority
to return the moneys it wrongfully took
from plaintiffs. For those reasons the
decision of the Court of Appeal should be
reversed.
Respectfully submitted,
David B. Bryson
Catherine M. Bishop
James R. Grow
National Housing Law Project
1950 Addison St., Suite 200
Berkeley, CA 94704
(415) 548-9400
Counsel for Amicus Curiae
March 28, 1986
-63e
IN THE SUPREME COURT OF THE
UNITED STATES
October Term, 1985
No. 85-5915
BRENDA E. WRIGHT, et al., Petitioners,
Vv.
CITY OF ROANOKE REDEVELOPMENT AND HOUSING
AUTHORITY, Respondent.
CERTIFICATE OF SERVICE
I hereby certify that on this 28th
day of March, 1986, packages containing
three copies of the foregoing Brief for
Amicus Curiae, National Housing Law
Project, were deposited in the Post
Office at Berkeley, California, with
first class postage, prepaid, addressed
to:
Henry Woodward
Legal Aid Society of Roanoke Valley
312 Church Avenue
Roanoke, VA 24016
Counsel of Record for Petitioners
Bayard E. Harris
Woods, Rogers & Hazelgrove
105 Franklin Rd., S.W.
Roanoke, VA 24011
Counsel of Record for Respondent
I further certify that all parties
required to be served have been served.
“nn
a”
Li) a, SigD
ishop
Counsel for Amicus Curiae
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.