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.”
