Wednesday, April 22, 2015

public housing - right of applicant to hearing and appeal of denial - Bray v. Housing Authority

Bray v. Housing Authority of Pittsburgh – Cmwlth.  Court – en banc – April  21, 2015


Overruling its decisions in Cope v. Bethlehem Housing Authority, 514 A.2d 295 (Pa. Cmwlth. 1986), and McKinley v. Housing Authority of the City of Pittsburgh, 58 A.3d 142 (Pa. Cmwlth. 2012), the en banc Commonwealth Court held that a local housing authority’s decision is an “adjudication” under Section 101 of the Administrative Agency Law, 2 Pa. C.S. § 101, and that applicants for public housing have a personal or property interest in those benefits and, thus, a right to appeal an adverse HA decision to a court of common pleas, under the Local Agency Law, 2 Pa. C.S.  551 et seq.  and 751 et seq.

 Section 752 of the Local Agency Law states, in pertinent part, that “[a]ny person aggrieved by an adjudication of a local agency who has a direct interest in the adjudication shall have the right to appeal therefrom.”  2 Pa. C.S. § 752. There is no question that an applicant for public housing is aggrieved by and has a direct interest in the result of a housing authority decision.   If the applicant is able to establish that the decision is an “adjudication” as defined by Section 101 of the Administrative Agency Law, she would be entitled to judicial review of the decision pursuant to Section 752 of the Local Agency Law.

 Section 101 of the Administrative Agency Law defines the term “adjudication,” in pertinent part, as:

 Any final order, decree, decision, determination or ruling by an agency affecting personal or property rights, privileges, immunities, duties, liabilities or obligations of any or all of the parties to the proceeding in which the adjudication is made. The term does not include any order based upon a proceeding before a court or which involves the seizure or forfeiture of property, paroles, pardons or releases from mental institutions.

 2 Pa. C.S. § 101. To be an adjudication, the action “must be an agency’s final order, decree, decision, determination or ruling [first requirement] and . . . it must impact on a person’s personal or property rights, privileges, immunities, duties, liabilities or obligations [second requirement].”   There is no dispute that a housing authority decision is a final decision on an application, so the first requirement is satisfied. It is the second requirement which is the focus of this case.

 The Court rejected the HA’s argument that it has unfettered discretion in how it reaches a decision and, thus, its decisions are not adjudications subject to appeal to a court of common pleas or the Commonwealth Court.  The Court rejected this argument, noting that “to remedy the shortage of safe, affordable housing, the United States Congress enacted a comprehensive statutory framework pursuant to which the Department of Housing and Urban Development (HUD) has promulgated numerous regulations that include express requirements for determining tenant eligibility. These eligibility requirements are mandatory, establishing the criteria a public housing authority must consider and what it may not consider when reviewing an application for public housing.” (emphasis in original)

 Where a government entity creates eligibility rules, those rules provide an individual within the eligible class an interest and claim to which procedural due process attaches and, even though the governmental entity retains discretion in its ultimate decision, that discretionary power “must be . . . exercised after fair investigation, with such a notice, hearing[,] and opportunity to answer for the applicant as would constitute due process.”  Goldsmith v. United States Board of Tax Appeals, 270 U.S. 117, 119, 123  (1926).  These principles regarding the existence of eligibility criteria and the creation of a protected interest in a determination of one’s eligibility have been recognized and applied by many federal courts. [citations omitted].

 These federal court decisions focus on the existence of particularized standards or criteria that limited the housing authority’s discretion in favor of the applicant to determine whether a protected property interest existed. Because the Housing Act and its regulations contain particular requirements and criteria which govern an applicant’s eligibility, the federal courts recognized that applicants have a protected property interest in obtaining a proper eligibility determination. This is separate from the property right which existing residents have in their housing units that Cope and McKinley recognized. The property interest involved in this case is not the right to an actual public housing unit or a voucher, but the right to have the applicant’s eligibility determined in accordance with the requirements of the federal law, which can, eventually, result in the receipt of an actual housing unit.   Thus, an applicant for a defined and regulated public benefit – housing, UC, welfare, or the like -- has a property interest in a proper eligibility determination, even if the applicant does not yet have a property interest in the benefit itself. 

 Another consideration is the fact that, if there were no judicial review of a decision from the informal hearing, there would be no method to assure applicants that housing authorities are truly complying with their federal obligations.  Absent judicial review, there would be no check on a housing authority’s decision-making to ensure that the housing authority is complying with all of the requirements of relevant statutes and regulations, which would essentially render them mere surplusage.  The Court cited its own jurisprudence as including “examples of the types of mistakes made in determining an individual’s eligibility for public housing.  Romagna v. Housing Authority of Indiana County (Pa. Cmwlth., No. 1648 C.D. 2011, filed July 13, 2012) and Brown v. Housing Authority of the City of Pittsburgh (Pa. Cmwlth., No. 617 C.D. 2014, filed March 25, 2015).   These cases provide “an example of the type of misinterpretation of the federal regulations that a housing authority can make that would affect an individual’s eligibility, whether initial or ongoing, to receive public housing benefits.  The Court saw “no reason why a housing authority’s misinterpretation of the applicable federal law and regulations should go uncorrected when it occurs during the initial eligibility determination, which would be the effect of our holding that a housing authority’s decision denying benefits is not an adjudication.”