DeCambre v. Brookline Housing Authority

United States Court of Appeals
For the First Circuit
Nos. 15-1458
15-1515
KIMBERLY P. DECAMBRE,
Plaintiff, Appellant, Cross-Appellee,
v.
BROOKLINE HOUSING AUTHORITY; MATTHEW S. BARONAS; JANICE MCNIFF;
CAROLE BROWN,
Defendants, Appellees, Cross-Appellants.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
Before
Kayatta, Stahl, and Barron,
Circuit Judges.
J. Whitfield Larrabee, with whom Law Offices of J. Whitfield
Larrabee, was on brief, for appellant.
John Egan, with whom Amy M. McCallen and Rubin & Rudman, LLP,
were on brief, for appellees.
Emily S. Starr, Starr, Vander, Linden, LLP, Ron M. Landsman,
and Ron M. Landsman, P.A., on brief for the National Academy of
Elder Law Attorneys, Inc., Special Needs Alliance, Inc., and
National Housing Law Project, amici curiae in support of appellant.
June 14, 2016
KAYATTA, Circuit Judge. Upon learning that disabled
tenant Kimberly DeCambre ("DeCambre") was receiving distributions
from an irrevocable trust account funded with the proceeds from a
series of legal settlements, the Brookline Housing Authority ("the
BHA") determined that DeCambre was "over-income" for continued
participation in a federal housing assistance program that the BHA
administered at the local level. The BHA reaffirmed this
determination over DeCambre's internal appeal and did not grant
DeCambre's requests that it exclude all, or at least some of, these
trust disbursements from its income calculation in reasonable
accommodation of her disability. DeCambre then brought suit
against the BHA and three of its employees, alleging that the BHA
had violated state and federal law by miscalculating her income
under the pertinent federal regulations and by engaging in
disability-based discrimination. See DeCambre v. Brookline Hous.
Auth., 95 F. Supp. 3d 35, 36–37 (D. Mass. 2015). The district
court voiced reservations about the BHA's income calculation, id.
at 49–51, and suggested that the BHA on "remand," id. at 51, could
provide "more thorough and thoughtful analysis," id. at 52, but
nevertheless ruled for the defendants on all counts. DeCambre
appealed, and the defendants cross-appealed the remand order.
Because we hold that the BHA incorrectly construed federal
regulations in calculating DeCambre's income, we reverse the
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district court's judgment in part, thereby mooting the cross-
appeal.
I. Background
Section 8 of the United States Housing Act of 1937
("Housing Act"), added as part of a 1974 amendment, authorizes the
Department of Housing and Urban Development ("HUD") to devote
federal funds to housing assistance for "the purpose of aiding
lower-income families in obtaining a decent place to live and of
promoting economically mixed housing." Housing and Community
Development Act of 1974, tit. 2, sec. 201, § 8(a), Pub. L. No. 93-
383, 88 Stat. 633, 662 (codified as amended at 42 U.S.C.
§ 1437f(a)). Under the Section 8 Federal Housing Choice Voucher
Program ("the Program"), HUD provides housing assistance funding
to state and local public housing authorities, which in turn
administer the Program at the local level by making rent subsidy
payments to landlords on behalf of participating tenants. See 24
C.F.R. § 982.1(a)(1)–(2). The amount of a tenant's monthly subsidy
depends on her income. Specifically, the Housing Act provides
that a participating tenant's subsidy is generally equal to her
total monthly rent obligation minus "30 percent of the monthly
adjusted income of the [tenant's] family." 42 U.S.C.
§ 1437f(o)(2)(A)(i).
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DeCambre has participated in the Program, as locally
administered by the BHA, since 2005.1 As part of her obligation
to annually recertify her eligibility for the Program, DeCambre
was required each year to submit an Application for Continued
Occupancy, which asked her to list, among other things, her assets
and her sources of income. In September 2013, DeCambre submitted
an application for the year beginning December 1, 2013. DeCambre's
application listed among her assets a trust that had been
established by a Massachusetts court order in June 2010 to hold
DeCambre's proceeds from a series of tort settlements. The trust
had been established as an irrevocable disability-based
Supplemental Needs Trust ("SNT")--a type of trust that holds funds
on behalf of a disabled person, such as DeCambre, and that allows
the beneficiary's eligibility for certain Social Security and
state health benefits to remain unaffected by the funds held in
trust. See 42 U.S.C. § 1396p(d)(4)(A); 130 C.M.R. § 520.008(H).
As an SNT, DeCambre's trust assigned a trustee "sole discretion to
determine how the property of the trust [would] be spent for the
needs of [DeCambre]," who was not herself permitted "voluntarily
or involuntarily [to] alienate the income or principal of the
trust."
1The parties agreed to dispose of this case on a stipulated
factual record, so we draw our statement of the facts from the
parties' stipulations. See Sánchez-Rodríguez v. AT&T Mobility
P.R., Inc., 673 F.3d 1, 4 (1st Cir. 2012).
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Upon receiving the September 2013 application that
listed DeCambre's SNT among her assets, the BHA calculated based
on DeCambre's reported income that, effective December 1, 2013,
DeCambre's obligation toward her monthly rent of $1,560 would be
$435, with the BHA subsidizing the remainder. At the same time,
the BHA notified DeCambre that it also intended to count
disbursements from her SNT toward her income and so requested that
she provide the SNT's account statements from the past three years.
DeCambre provided the requested information, and in mid-
December 2013 the BHA issued a Notice of Rent Adjustment, informing
DeCambre that because the BHA was now counting $62,828.99 in trust
disbursements toward DeCambre's 2013 income,2 DeCambre was "over-
income" for the Program and, effective February 1, 2014, would be
responsible for paying the entirety of her monthly rent without
any subsidy.
Soon thereafter, DeCambre notified the BHA that she was
appealing its rent adjustment on the grounds that her SNT
distributions should have been categorically excluded from income
under HUD regulations or, alternatively, on the grounds that
certain specific distributions should have been excluded under the
regulations as payments offsetting "the cost of medical expenses,"
2Actual SNT disbursements during the relevant period totaled
$71,728.98, but the BHA excluded $8,899.99 of these disbursements
as exempt from income because they had been used to pay for trustee
fees, dental work, and a medically necessary air conditioner.
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24 C.F.R. § 5.609(c)(4), or as "[t]emporary, nonrecurring or
sporadic income," id. § 5.609(c)(9). While the internal appeal
was pending, DeCambre also submitted a Request for Reasonable
Accommodation citing state and federal disability discrimination
law, asking that SNT distributions used to pay for automobiles,
cellular and landline phone services, and veterinary care for her
cats be excluded from her income on medical necessity grounds.
Following a May 27, 2014, hearing, a BHA hearing officer issued a
written opinion upholding the BHA's calculation of DeCambre's
income and expressing the view that "the BHA correctly denied Ms.
DeCambre's reasonable accommodation request."3
On July 8, 2014, DeCambre sought reconsideration of the
hearing officer's decision regarding the BHA's income calculation
and also supplemented her previous Request for Reasonable
Accommodation, this time requesting that all SNT distributions be
excluded from income on the grounds that she needed to maintain
her assets in an SNT in order to remain eligible for disability-
based Social Security and state health care benefits. The next
day, DeCambre filed suit against the BHA and three BHA employees
in Massachusetts state court. The operative complaint alleged
violation of DeCambre's civil rights under the Housing Act and the
Fourteenth Amendment, with relief sought under 42 U.S.C. § 1983
3The hearing officer also found that the BHA acted in good
faith in scheduling a timely hearing.
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("Section 1983"); violation of state and federal
antidiscrimination law; breach of lease and interference with
DeCambre's quiet use and enjoyment of her residence in violation
of state law; and entitlement to declaratory, injunctive, and
mandamus relief under a smattering of legal and equitable remedial
theories.4
After the defendants timely removed the suit to federal
court,5 DeCambre moved for a preliminary injunction enjoining the
BHA from including her SNT disbursements in her annual income and
requiring the BHA to reinstate her subsidy payments retroactively.
At a hearing on this motion, the parties agreed to collapse the
preliminary injunction and merits determinations into a single
proceeding and to allow the district court to resolve the case as
a "case stated"--a posture in which a district court is entitled
to decide a case on the merits on the basis of a factual record to
4 The complaint also included a count titled "Preemption and
Federal Supremacy." It is unclear whether DeCambre intended this
count to assert an additional cause of action and, if so, what its
legal moorings would be. At any rate, the district court made no
mention of this claim, and DeCambre does not press it on appeal.
It is therefore abandoned. See Kearney v. Town of Wareham, 316
F.3d 18, 22 (1st Cir. 2002).
5 The notice of removal (and the parties' statement of
stipulated facts) misstates the date on which DeCambre filed suit
in state court as August 8, 2014. DeCambre had actually filed
suit in state court nearly a month prior, on July 9, 2014. Even
so, because it is uncontested that the defendants were first served
with the complaint no earlier than August 11, 2014, defendants'
removal to federal court on August 21, 2014, was timely in any
event. See 28 U.S.C. § 1446(b)(1).
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which the parties have stipulated, along with any factual
inferences the court draws from that record. See TLT Constr. Corp.
v. RI, Inc., 484 F.3d 130, 135 n.6 (1st Cir. 2007). After hearing
the parties' arguments, the district court issued an opinion
denying DeCambre's Fourteenth Amendment and discrimination claims,
DeCambre, 95 F. Supp. 3d at 46–49, "affirm[ing] the decision of
the BHA in [its] income and rent calculations," id. at 52, and
denying DeCambre's motion for a preliminary injunction, id. at 51–
52.6
At the same time, the district court pointed to SNT
distributions that DeCambre had used to pay for cable, internet,
travel, and telephone service as "non-extravagant" expenditures
that could have been excluded from income, id. at 50–51; observed
that the BHA should have "determine[d] whether DeCambre's cats
could be categorized as emotional support animals," such that SNT
distributions used to pay for their veterinary care could have
been excluded from income as medical expenses, id. at 51; and found
that "the fact that title" to an automobile purchased with SNT
funds was "held by [DeCambre's] trust as an asset should preclude
[the SNT distribution used to purchase the car] from being counted
6
The district court also found that DeCambre "did not
adequately prove each element" of her state-law breach of lease
and interference with quiet use and enjoyment claims and so ruled
against her on those claims as well. DeCambre, 95 F. Supp. 3d at
41. DeCambre does not challenge these rulings on appeal.
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towards income," id. In the wake of these observations, the
district court remanded DeCambre's case back to the BHA, seemingly
for "a more thorough determination of each potentially excludable
expense proffered by DeCambre," id., despite having "affirm[ed]
the decision of the BHA in [its] income and rent calculations,"
id. at 52. DeCambre timely appealed the judgment against her, and
the defendants cross-appealed the district court's remand order.
With this background in place, we proceed to our
analysis, starting as we must with the threshold question of
whether this court has the authority to hear these appeals.
II. Jurisdiction
Although neither party contests this court's
jurisdiction, "an appellate court has an unflagging obligation to
inquire sua sponte into its own jurisdiction," including its
appellate jurisdiction. Watchtower Bible & Tract Soc'y of N.Y.,
Inc. v. Colombani, 712 F.3d 6, 10 (1st Cir. 2013) (quoting
Charlesbank Equity Fund II v. Blinds to Go, Inc., 370 F.3d 151,
156 (1st Cir. 2004)).
The March 26, 2015, order that the parties have appealed
reads, in full:
In accordance with the Court's Memorandum and
Order dated March 25, 2015, the motion for
preliminary injunction is therefore DENIED,
and DeCambre's appeal of her Section 8
eligibility is REMANDED to the [BHA].
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While this court has appellate jurisdiction over a denial of a
preliminary injunction, see 28 U.S.C. § 1292(a)(1), our ability to
assume appellate jurisdiction over a case's merits is typically
triggered only by a "final decision[]," id. § 1291. In keeping
with our understanding that a final decision is one that "ends the
matter in dispute, leaving nothing to be done but the execution of
the judgment," Foxworth v. Maloney, 515 F.3d 1, 3 (1st Cir. 2008),
"a district court order that remands to an administrative agency
for further proceedings is not [necessarily] considered a 'final
decision.'" Global Naps, Inc. v. Mass. Dep't of Telecomms. &
Energy, 427 F.3d 34, 41 (1st Cir. 2005).
Here, however, it is not clear from the district court's
opinion exactly what further proceedings the district court
anticipated following remand to the BHA. While the opinion appears
to find possible error in the BHA's income calculation, see
DeCambre, 95 F. Supp. 3d at 49–51, and suggests that the BHA may
be required to "perform a more thorough determination of each
potentially excludable expense proffered by DeCambre," id. at 51,
it at the same time purports to affirm the BHA's income
calculation, see id. at 52, and explicitly "upholds the BHA's
determination in terminating DeCambre's Section 8 eligibility,"
id. at 51.
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Compounding this uncertainty, nearly three months into
the pendency of this appeal, the district court purported to reopen
the case and enter a retroactive order that reads, in full:
Judgment for the Defendants on all claims
asserted against them in the Plaintiff's First
Amended Complaint, and the appeal of the
Plaintiff's Section 8 eligibility is remanded
to the [BHA].
The district court established no basis for its attempt to reassert
jurisdiction over a case already embroiled in appellate
proceedings, and so the order does not in itself hold legal force.7
See Griggs v. Provident Consumer Disc. Co., 459 U.S. 56, 58 (1982)
(per curiam) ("The filing of a notice of appeal is an event of
jurisdictional significance--it confers jurisdiction on the court
of appeals and divests the district court of its control over those
aspects of the case involved in the appeal."). However, in light
of the ambiguity as to the intention behind the original March 26
order, this court understood the district court's later-in-time
7 Several courts have held that a district court retains
jurisdiction to certify a matter for appeal under Federal Rule of
Civil Procedure 54(b) notwithstanding the fact that the appeal has
already been docketed. See, e.g., Crowley Mar. Corp. v. Pan. Canal
Comm'n, 849 F.2d 951, 953–54 & n.1 (5th Cir. 1988). But even were
we to adopt this rule in our circuit--an issue we do not decide
today--the district court's order, although entered in response to
DeCambre's motion for entry of judgment under Rule 54(b), does not
fall within the rule's scope. Rule 54(b) permits a district court,
under certain circumstances, to "direct entry of a final judgment
as to one or more, but fewer than all, claims." Fed. R. Civ. P.
54(b). Here, however, the order purported to establish judgment
for all defendants on all claims.
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order as an indication of its wish to provide clarification. Cf.
United States v. Maldonado-Rios, 790 F.3d 62, 65 (1st Cir. 2015)
(per curiam) (district court order entered after appellate court
had already assumed jurisdiction could be treated as a purely
indicative ruling). Accordingly, we remanded to permit the
district court to do so. See 1st Cir. R. 12.1(b).
On remand, the district court entered an order
clarifying that the March 26 order that forms the subject of this
appeal was intended to enter judgment for the defendants on all
counts, despite referring only to DeCambre's motion for a
preliminary injunction, and that the order's provision for a remand
to the BHA "was simply to indicate that the [BHA] had primary
jurisdiction over this matter." In other words, the March 26 order
denied DeCambre all the relief she sought and required no further
proceedings in the BHA.8 It is therefore a final decision that,
if left to stand, would "end[] the matter in dispute," Foxworth,
515 F.3d at 3, and that therefore triggers this court's appellate
jurisdiction over the dispute's merits.
8 Despite this clarification, the defendants have not asked
us to dismiss their cross-appeal of the remand order that
effectively demands nothing of them. But because we ultimately
hold the cross-appeal to be moot on other grounds, we need not
decide whether the district court's clarification of the remand
order itself moots the cross-appeal, which was predicated on the
understandable impression that the remand order required the BHA
to "'reconsider[]' . . . DeCambre's appeal of her Section 8
eligibility."
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With our jurisdiction thus established, we turn now to
the merits. Because the parties agreed to allow the district court
to adjudicate the merits on a case stated basis, we review the
district court's legal conclusions de novo and its factual findings
and inferences for clear error. See Watson v. Deaconess Waltham
Hosp., 298 F.3d 102, 108 (1st Cir. 2002).
III. The BHA's Calculation of DeCambre's Income
DeCambre's primary claim on appeal is that the BHA
calculated her income incorrectly under the relevant HUD
regulations and that the resultant overstatement of her income
diminished the amount of her monthly Section 8 subsidy--in this
case, to zero.9 DeCambre contends that this alleged miscalculation
violates not only the Housing Act, pursuant to which the
regulations at issue were promulgated, but also the Fourteenth
Amendment. We address these contentions in reverse order.
9 Although DeCambre has also sued three named BHA employees,
the district court observed that DeCambre has neglected to indicate
whether she is suing these employees in their individual or
official capacities. DeCambre, 95 F. Supp. 3d at 47. DeCambre
has not corrected this oversight on appeal. Nor does DeCambre
challenge the district court's determination that the employees
are shielded from an individual-capacity suit by the doctrine of
qualified immunity, which leaves state agents personally liable
for violation of only those statutory or constitutional rights
that have been "clearly established." Id. (quoting Harlow v.
Fitzgerald, 457 U.S. 800, 818 (1982)). We therefore understand
DeCambre to have intended an official-capacity suit, which we treat
as "the functional equivalent of a suit against the sovereign."
Danny B. ex rel. Elliott v. Raimondo, 784 F.3d 825, 834 (1st Cir.
2015). Our opinion will accordingly treat all of DeCambre's claims
as leveled exclusively against the state agency.
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A. DeCambre's Fourteenth Amendment Claims
DeCambre claimed below that the BHA's allegedly
erroneous income calculation deprived her of substantive and
procedural due process under the Fourteenth Amendment, and she
sought relief under Section 1983. See Gianfrancesco v. Town of
Wrentham, 712 F.3d 634, 639 (1st Cir. 2013) (Section 1983 provides
cause of action for constitutional due process claims). The
district court rejected these constitutional claims on the merits,
and DeCambre's opening brief on appeal does not attempt to revive
them, grounding DeCambre's claim to Section 1983 relief solely on
the BHA's alleged violation of rights conferred by the Housing Act
rather than the Constitution. DeCambre has therefore abandoned
her Fourteenth Amendment claims. See Juárez v. Select Portfolio
Servicing, Inc., 708 F.3d 269, 273 n.3 (1st Cir. 2013).
B. DeCambre's Housing Act Claims
Under the Housing Act, a Section 8 participant is
typically responsible for paying "30 percent of the monthly
adjusted income of [her] family" toward rent, after which the
public housing authority subsidizes any remaining rent obligation.
42 U.S.C. § 1437f(o)(2)(A)(i). A tenant's "adjusted income," per
HUD regulations, equals her "annual income," less certain
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specified deductions.10 24 C.F.R. § 5.611. The regulations define
"annual income," in turn, as, in relevant part, "all amounts,
monetary or not, which . . . [g]o to, or on behalf of" the tenant
or her family, or which "[a]re anticipated to be received from a
source outside the family" during the relevant year, and which are
not "specifically excluded." Id. § 5.609(a). Among the amounts
specifically excluded from annual income are "[l]ump-sum additions
to family assets, such as . . . settlement for personal or property
losses," id. § 5.609(c)(3), "[a]mounts received . . . that are
specifically for, or in reimbursement of, the cost of medical
expenses," id. § 5.609(c)(4), and "[t]emporary, nonrecurring or
sporadic income," id. § 5.609(c)(9).
DeCambre argues that because the funds in her SNT derive
from a series of lump-sum settlement payouts, the BHA was required
to exclude all of her SNT disbursements from her annual income.
In the alternative, DeCambre argues that several specific
disbursements that were counted toward her annual income should
have been excluded because they fell into either the "medical
expenses" exclusion or the "[t]emporary, nonrecurring or sporadic
income" exclusion. Before we turn to the merits of these claims,
however, we must first determine whether alleged Housing Act
10 Intuitively, "monthly adjusted income" is calculated by
dividing a tenant's "adjusted income" by twelve. 24 C.F.R.
§ 5.603(b).
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violations of this type give rise to a cause of action under state
or federal law.
1. DeCambre's Cause of Action
"Statutory rights and obligations are established by
Congress, and it is entirely appropriate for Congress . . . to
determine . . . who may enforce them and in what manner." Davis
v. Passman, 442 U.S. 228, 241 (1979). DeCambre does not contend
that the Housing Act itself expressly authorizes individual
plaintiffs to seek legal redress for violations. Rather, she
argues primarily that the Housing Act creates rights that may be
enforced under Section 1983, which enables a private plaintiff to
bring suit against, inter alia, state agencies for "the deprivation
of any rights . . . secured by the Constitution and laws."11 42
U.S.C. § 1983.
11
At oral argument, and in her complaint, DeCambre also
asserted that the Massachusetts judicial review and certiorari
statutes afforded her a cause of action. See Mass. Gen. Laws ch.
30A, § 14 (judicial review); id. ch. 249, § 4 (certiorari).
Massachusetts courts have suggested that the actions of public
housing authorities are subject to judicial review under one or
the other of these statutes. See Rivas v. Chelsea Hous. Auth.,
982 N.E.2d 1147, 1151–52 (Mass. 2013) (following lower court in
reviewing tenant's termination from state voucher program under
judicial review statute); Costa v. Fall River Hous. Auth., 881
N.E.2d 800, 802 (Mass. App. Ct. 2008) (reviewing termination of
tenant's Section 8 subsidy under certiorari statute). Because we
find that DeCambre has a cause of action under Section 1983,
because she seeks no relief under state law that is unavailable
under Section 1983, and because she has not adequately developed
(and has therefore waived) any state-law argument, see United
States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990), we find it
unnecessary to resolve the unbriefed question of whether
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Many federal statutory rights are enforceable under
Section 1983. See Maine v. Thiboutot, 448 U.S. 1, 4–8 (1980). In
determining whether any given statutory provision creates an
enforceable right, we ask whether the provision "unambiguously
confer[s] [a] right to support a cause of action." Colón-Marrero
v. Vélez, 813 F.3d 1, 17 (1st Cir. 2016) (second alteration in
original) (quoting Gonzaga Univ. v. Doe, 536 U.S. 273, 283 (2002)).
Specifically, we determine (1) whether the provision clearly
creates a right that redounds to the benefit of the plaintiff; (2)
whether the right the provision supposedly confers is not too
"vague and amorphous" to be enforceable; and (3) whether the
provision creates a binding obligation on the state. Id. (quoting
Blessing v. Freestone, 520 U.S. 329, 340 (1997)). If we answer
these questions in the affirmative, the provision is presumptively
enforceable under Section 1983, and it becomes the defendant's
responsibility to demonstrate that Congress nonetheless intended
to bar Section 1983 relief for violation of the right at issue.
See id. at 20.
The BHA's brief unhelpfully conflates the question of
whether DeCambre has a cause of action under Section 1983 with its
Massachusetts law creates a cause of action for the specific
violation alleged here--namely, miscalculation of a Section 8
tenant's annual income.
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attack on the merits of DeCambre's constitutional claims.12
Nowhere has the BHA attempted to engage our three-pronged framework
for determining whether a federal statute creates a right that may
be enforced under Section 1983. While the BHA does seem to rely
on the district court's determination that no "statutory or
judicial authority mandat[es] that SNT distributions are excluded
from income calculations," DeCambre, 95 F. Supp. 3d at 48, such a
determination goes to the merits question of whether the BHA's
income calculation violated DeCambre's rights; it does not speak
to the threshold question of whether the Housing Act gives DeCambre
an enforceable right not to be required to put more than 30% of
her monthly adjusted income, however calculated, toward her rent.
Thankfully, the Supreme Court has provided guidance in
the context of a similar Housing Act provision in Wright v. City
of Roanoke Redevelopment & Housing Authority, 479 U.S. 418 (1987).
In Wright, the Court considered a provision of the 1969 Brooke
Amendment, Pub. L. No. 91-152, tit. 2, sec. 213, 83 Stat. 389,
12In arguing that DeCambre has no cause of action under
Section 1983, the BHA primarily echoes the district court's
determination that DeCambre has provided no persuasive argument
"as to whether [she] has a constitutionally protected property
right to the regulatory rent ceiling." DeCambre, 95 F. Supp. 3d
at 48. Such an argument, however, says nothing about whether or
not DeCambre has a cognizable statutory right to pay no more than
30% of her income in rent. Indeed, the district court must have
implicitly found that DeCambre had some cause of action; otherwise,
there would have been no reason for the court to have addressed
the merits of her contention that the BHA improperly calculated
her annual income.
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which, as amended, provided that "[a] family" living in a public
housing project "shall pay as rent" a specified percentage of its
income, Wright, 479 U.S. at 420 n.2 (quoting 42 U.S.C. § 1437a(a)
(1982)). Although the Brooke Amendment itself said nothing about
utilities charges, HUD regulations made clear that "rent" under
the Brooke Amendment's rent ceiling provision included not only a
tenant's contract rent, but also "a reasonable amount for the use
of utilities." Id. at 420. Three tenants brought suit against
their public housing authority, alleging that the agency had
violated this regulatory guarantee by imposing a utilities
surcharge that, when combined with their contract rent, brought
their monthly payments above the statutorily permissible
percentage. Id. at 421–22.
The Court held that the tenants had asserted a cognizable
cause of action under Section 1983, id. at 419, finding "little
substance" in the claim that the Brooke Amendment and HUD
regulations provided "no enforceable rights within the meaning of
[Section] 1983," id. at 430.
The Brooke Amendment could not be clearer: as
further amended in 1981, tenants could be
charged as rent no more and no less than 30
percent of their income. This was a mandatory
limitation focusing on the individual family
and its income. The intent to benefit tenants
is undeniable.
Id. Nor was it relevant that the tenants relied on an
interpretation of the right that appeared in HUD regulations rather
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than in the statutory text, given the interpretive deference owed
to HUD as the agency responsible for implementing the Brooke
Amendment. Id. Finally, the Court rejected the contention that
"the provision for a 'reasonable' allowance for utilities is too
vague and amorphous to confer on tenants" a right that is
enforceable under Section 1983. Id. at 431.
The BHA offers no reason that Wright's interpretation of
the Brooke Amendment's rent ceiling does not apply foursquare to
Section 8's rent ceiling, which provides:
[T]he monthly assistance payment for a family
receiving assistance under [the voucher
program] shall be determined as follows: . . .
For a family receiving tenant-based
assistance, if the rent for the family
(including the amount allowed for tenant-paid
utilities) does not exceed the applicable
payment standard established [in a separate
provision], the monthly assistance payment for
the family shall be equal to the amount by
which the rent (including the amount allowed
for tenant-paid utilities) exceeds the
greatest of the following amounts, rounded to
the nearest dollar:
(i) 30 percent of the monthly
adjusted income of the
family.
(ii) 10 percent of the monthly
income of the family.
(iii) If the family is receiving
payments for welfare
assistance from a public
agency and a part of those
payments, adjusted in
accordance with the actual
- 21 -
housing costs of the family,
is specifically designated
by that agency to meet the
housing costs of the family,
the portion of those
payments that is so
designated.
42 U.S.C. § 1437f(o)(2)(A). As in Wright, the statutory language
"unambiguously confer[s] 'a mandatory [benefit] focusing on the
individual family and its income.'" Gonzaga, 536 U.S. at 280
(second alteration in original) (quoting Wright, 479 U.S. at
430).13 As in Wright, HUD regulations flesh out the contours of
the statutory right, rendering that right "sufficiently specific
and definite to qualify as enforceable." Wright, 479 U.S. at 432.
And as in Wright, the Section 8 rent ceiling's specification that
a tenant's monthly subsidy "shall be equal" to rent minus a
percentage of income, 42 U.S.C. § 1437f(o)(2)(A) (emphasis
supplied), creates a "mandatory limitation," Wright, 479 U.S. at
430, that is not cast in precatory terms.14
13 Although Wright preceded the Court's admonition in Gonzaga
University v. Doe, 536 U.S. 273 (2002), that "it is rights, not
the broader or vaguer 'benefits' or 'interests,' that may be
enforced under the authority of [Section 1983]," id. at 283, the
Gonzaga Court did not overrule Wright, see id. at 289–90, which in
any event did find that the Brooke Amendment established
"enforceable rights," Wright, 479 U.S. at 432 (emphasis supplied).
14 Although DeCambre here focuses on the calculation of her
annual income rather than the calculation of her rent, the two are
flip sides of the same coin. Section 8 defines the amount of a
tenant's rent subsidy entitlement in direct relation to the
tenant's income. See 42 U.S.C. § 1437f(o)(2)(A). It follows that
any overstatement of a tenant's income necessarily results in an
understatement of her subsidy.
- 22 -
The Fifth Circuit has held that Wright's analysis
applies with full force to the Section 8 rent ceiling provision.
See Johnson v. Hous. Auth. of Jefferson Par., 442 F.3d 356, 360–
62 (5th Cir. 2006) (finding that Section 8 voucher recipients can
bring a Section 1983 challenge to a public housing authority's
calculation of their utilities allowance because an inadequate
allowance would violate their right not to "pay more out of pocket
than 30 percent of their incomes for housing," id. at 362); cf.
Daniels v. Hous. Auth. of Prince George's Cty., 940 F. Supp. 2d
248, 259 (D. Md. 2013) (tenant could bring a Section 1983 suit to
enforce her "federal right to a properly calculated housing
subsidy" under an analogously worded Housing Act provision). And
although courts have found that certain other Housing Act
provisions do not create rights that may be enforced under
Section 1983, these provisions are materially distinguishable from
the rent ceiling provisions of the Brooke Amendment and Section 8.
See, e.g., Johnson v. City of Detroit, 446 F.3d 614, 627 (6th Cir.
2006) (Housing Act's housing quality standards provision not
enforceable under Section 1983 because of its "focus on the entity
being regulated" and not on the tenant (quoting Johnson v. City of
Detroit, 319 F. Supp. 2d 756, 764 (E.D. Mich. 2004))); Banks v.
Dall. Hous. Auth., 271 F.3d 605, 610 (5th Cir. 2001) (right to
"decent, safe, and sanitary" housing under 42 U.S.C. § 1437f(e)
not enforceable under Section 1983, in part because the statutory
- 23 -
provision lacked "[t]he specificity of [the Brooke Amendment's
rent ceiling provision], coupled with its focus on the tenants");
cf. also Caswell v. City of Detroit Hous. Comm'n, 418 F.3d 615,
620 (6th Cir. 2005) (regulatory right to continued subsidies during
eviction proceedings not enforceable under Section 1983 where,
unlike in Wright, the regulation interpreted a statutory provision
that did not itself, "in clear and unambiguous terms, confer[] a
particular right upon the tenant").15 In light of the close textual
similarity between the Brooke Amendment's rent ceiling and the
rent ceiling at issue here, the Supreme Court's continued approval
of Wright, see Gonzaga, 536 U.S. at 289–90, and the weight of
persuasive authority from a sister circuit, we hold that
Section 8's rent ceiling provision confers a right that is
presumptively enforceable under Section 1983.
15 See also McField ex rel. Ray v. Phila. Hous. Auth., 992 F.
Supp. 2d 481, 487 (E.D. Pa. 2014) (Housing Act provision requiring
public housing authorities to conduct inspections of certain units
did not create a right enforceable under Section 1983 because of
the provision's focus on the regulator and not the tenants); Koroma
v. Richmond Redevelopment & Hous. Auth., No. 3:09cv736, 2010 WL
1704745, at *5–6 (E.D. Va. Apr. 27, 2010) (Housing Act provision
providing that a tenant currently receiving Section 8 assistance
"may" continue to receive such assistance upon moving to another
participating housing unit did not create a right enforceable under
Section 1983); Anderson v. Jackson, No. 06-3298, 2007 WL 458232,
at *6 (E.D. La. Feb. 6, 2007) (provision that "[u]nlike [the Brooke
Amendment and the Section 8 rent ceiling provision], . . . does
not focus on the rights of individual residents and families" did
not create a right enforceable under Section 1983).
- 24 -
The presumptive availability of Section 1983 relief can,
however, be rebutted through a showing of "[c]ongressional intent
to 'shut the door to private enforcement'" of the rent ceiling.
Colón-Marrero, 813 F.3d at 20 (quoting Gonzaga, 536 U.S. at 284
n.4). Such an intent could be manifest either in "language in the
[Housing Act] itself specifically foreclosing a remedy under
[Section 1983] or by implication from Congress's creation of 'a
comprehensive enforcement scheme that is incompatible with
individual enforcement.'" Id. (quoting Gonzaga, 536 U.S. at 284
n.4). That said, we are not to "lightly conclude" that Congress
intended to bar private enforcement of a federal right that is
presumptively enforceable under Section 1983. Wright, 479 U.S. at
423–24 (quoting Smith v. Robinson, 468 U.S. 992, 1012 (1984)).
We need not rule on this question today; it suffices
merely to observe that the BHA has manifestly failed to develop
any argument that Congress expressly or impliedly sought to
preclude private enforcement of Section 8's rent ceiling
provision. See Colón-Marrero, 813 F.3d at 20 ("Appellant makes no
meaningful attempt to rebut [the presumption of private
enforceability], and we could thus end our analysis here."). The
BHA points to no textual indications of such a bar. Nor does the
BHA demonstrate any alternative avenue through which tenants can
vindicate their rights under Section 8's rent ceiling provision.
Cf. Wright, 479 U.S. at 428 (beyond HUD's "generalized powers" to
- 25 -
conduct audits, enforce certain contracts, and cut off federal
funds, "[t]here are no other mechanisms provided to enable HUD to
effectively oversee the performance of the some 3,000 local [public
housing authorities] across the country"). We therefore hold that
the BHA has waived any challenge to the presumptive availability
of a Section 1983 cause of action for violations of the Section 8
rent ceiling provision, without entirely foreclosing the
possibility that a future litigant may be able to successfully
raise such a challenge.
We are cognizant that the availability of a federal
lawsuit as a means of challenging the income calculations made by
public housing authorities may appear to risk overcrowding the
federal docket. Four considerations, however, at least partially
ameliorate such concerns. First, the benefits decisions of public
housing authorities are in many places already subject to judicial
review under state law. See, e.g., Mathis v. D.C. Hous. Auth.,
124 A.3d 1089, 1099 (D.C. 2015); Walker v. Dep't of Hous. & Cmty.
Dev., 29 A.3d 293, 309 (Md. 2011); Rivas v. Chelsea Hous. Auth.,
982 N.E.2d 1147, 1151–52 (Mass. 2013); Banks v. Hous. Auth. of
Omaha, 795 N.W.2d 632, 633 (Neb. 2011). Recognition of a federal
cause of action, then, may affect the distribution but not
necessarily the volume of litigation. Second, courts will likely
apply a healthy measure of deference to the more fact-bound
determinations of public housing authorities, see infra notes 20–
- 26 -
21, and so the long odds of success on any challenge to this
discretion will counsel against the time and expense of litigation
in most instances. Third, the instant case provides an apt
illustration of a countervailing concern--the need for national
uniformity in resolving certain fundamental interpretive questions
regarding the parameters of a federal benefit. Where, as here, a
voucher recipient's annual income could vary by over $62,000
depending on one's interpretation of federal law, the drawbacks of
allowing judicial interpretation to reside exclusively at the
state or local level are self-evident. Fourth, Wright was decided
nearly three decades ago, and Johnson extended Wright to the
Section 8 context in the Fifth Circuit over ten years ago.
Meanwhile, no circuit court has yet declined to apply Wright to
Section 8's rent ceiling provision. The gates to federal court,
in other words, have long been open, and no flood has yet arrived.
With this threshold matter resolved, we turn now to the
legal question at the heart of DeCambre's case--whether the BHA in
fact violated DeCambre's rights under federal law by
miscalculating her monthly assistance payment.
2. Inclusion of Settlement-Funded Irrevocable Trust
Distributions in Income
We deal first--and, as it happens, exclusively--with
DeCambre's contention that the BHA misapplied HUD regulations by
including the disbursements from her SNT in her annual income.
- 27 -
DeCambre's SNT was funded exclusively with the proceeds from a
series of tort settlements. Had those settlement proceeds been
paid directly to DeCambre, the parties agree that they would have
been treated as a "[l]ump-sum addition[] to family assets," and
therefore would have been categorically excluded from annual
income upon receipt under HUD's regulations. 24 C.F.R.
§ 5.609(c)(3). Instead, DeCambre agreed to have the settlement
proceeds paid into an irrevocable, disability-based SNT, out of
which some of those same funds were later disbursed for her benefit
at the discretion of the trustee.
HUD addresses irrevocable trusts in the portion of 24
C.F.R. § 5.603(b) ("section 5.603(b)") that defines the term "net
family assets." The relevant passage states as follows:
In cases where a trust fund has been
established and the trust is not revocable by,
or under the control of, any member of the
family or household, the value of the trust
fund will not be considered an asset so long
as the fund continues to be held in trust.
Any income distributed from the trust fund
shall be counted when determining annual
income . . . .
Id. § 5.603(b). Because funds held in an irrevocable trust are
not considered assets under section 5.603(b) so long as they are
held in trust, they escape HUD's default rule that effectively
requires any income generated by a tenant's assets to be counted
toward her annual income upon accrual. See id. § 5.609(a)(4),
- 28 -
(b)(3).16 Once an irrevocable trust's accrued income is
distributed, however, it "shall be counted when determining annual
income." Id. § 5.603(b). In short, a plain aim and effect of
section 5.603(b) is to postpone the recognition of income derived
from holdings in an irrevocable trust until the income is
distributed out of the trust. On all of this, the parties appear
to agree.
The dispute concerns, instead, what happens when the
trust distributes to or for the benefit of the tenant some or all
of the principal originally paid into the trust. DeCambre's trust
generated no substantial earnings or other income; hence,
essentially all disbursements were disbursements of principal.
DeCambre maintains that this disbursed principal retained the
character and classification that it would have had (as a lump-
sum addition to family assets, not counted toward annual income)
had it been paid directly to her, rather than having first been
routed through the irrevocable trust. The BHA concedes that the
regulations themselves do not "squarely" address DeCambre's
argument, but it contends that there are at least three reasons to
reject DeCambre's ultimate position that the disbursements of her
16
When a tenant's assets exceed $5,000, a minimum income
generation is assumed based on a percentage rate determined by
HUD. 24 C.F.R. § 5.609(b)(3).
- 29 -
irrevocable trust principal should not have counted toward her
annual income.
First, and only briefly in a footnote, the BHA argues
that section 5.603(b)'s statement that "[a]ny income distributed
from [an irrevocable] trust fund shall be counted when determining
annual income," 24 C.F.R. § 5.603(b), means that "any disbursement
from [an SNT] is counted toward annual income." But the BHA itself
rejected such a broad, categorical reading of section 5.603(b) by
excluding from DeCambre's annual income certain SNT disbursements
that reimbursed medical expenses. Moreover, an advisory letter
that the BHA treats as controlling, authored by one of HUD's
regional offices, expressly states that "[n]ot all distributions
from a[n] SNT should be counted towards [a Section 8] applicant's
annual income." U.S. Dep't of Hous. & Urban Dev., New England PIH
Advisory Letter #07-05 (Apr. 18, 2007) (hereinafter, "Advisory
Letter"). Rather, the letter provides that only those
disbursements "that do not fall under an exclusion or deduction
are . . . counted towards annual income." Id. If read to cover
only income earned on the trust's principal, however,
section 5.603(b)'s reference to "income distributed from the trust
fund," 24 C.F.R. § 5.603(b), serves a straightforward function:
it ensures that the irrevocable trust income that would otherwise
count immediately upon accrual toward annual income as an "amount[]
derived . . . from [a tenant's] assets," id. § 5.609(a)(4), but
- 30 -
that does not do so because of section 5.603(b)'s stipulation that
an irrevocable trust fund "will not be considered an asset so long
as the fund continues to be held in trust," id. § 5.603(b), does
eventually count toward annual income when it is disbursed.17 Were
the reference, instead, intended to define irrevocable trust
disbursements as a distinct category that must in all cases count
toward annual income, one would have expected HUD to place the
reference under the definition of "annual income" and not as a
caveat appended to a provision ostensibly aimed at explaining how
irrevocable trusts fit into the definition of "net family assets."
For these reasons, we conclude that the word "income" in
section 5.603(b) does not include the principal that initially
funded the trust.
Of course, our conclusion that not all disbursements
from an SNT are "income" under section 5.603(b) does not resolve
the issue at hand. The definition of "annual income" is certainly
not limited to income on investments. Rather, it encompasses "all
amounts . . . which . . . [g]o to . . . the family head or spouse,"
id. § 5.609(a)(1), unless those amounts are otherwise
"specifically excluded" under the regulations, id. § 5.609(a)(3).
So the question remains: did DeCambre's irrevocable trust
17
We acknowledge the assistance of amici National Academy of
Elder Law Attorneys, Inc.; Special Needs Alliance, Inc.; and
National Housing Law Project in elaborating this reading of
section 5.603(b).
- 31 -
principal, which would have been classified as a "specifically
excluded," id., "[l]ump-sum addition[] to family assets," id.
§ 5.609(c)(3), had it been paid directly to DeCambre, retain or
regain that classification despite having first been routed
through an SNT?
This question moves us to the BHA's second argument:
because the settlement proceeds that composed the trust principal
were paid first into the SNT, rather than directly to DeCambre,
they never became (or stopped being) excluded lump-sum additions
to family assets, and were not otherwise excluded from the broad
definition of "annual income." Under the first branch of this
argument, the BHA contends that DeCambre's settlement money did
not fall into an income exclusion even at the time it entered the
SNT. To make this argument, the BHA contends that because the
lump-sum exclusion applies only to "[l]ump-sum additions to family
assets," id. § 5.609(c)(3) (emphasis supplied), and because,
according to the BHA, an irrevocable trust fund "is not considered
to be an asset," see id. § 5.603(b), the lump-sum exclusion "should
not even apply where the settlement funds received in a lump-sum
were immediately placed in a[n] SNT, and thus never became an
asset." This argument, though, begs the question: to what extent
should funds be classified differently when they are routed through
an SNT, and thus sit beyond a tenant's control for a time, than
they would have been had they been put directly under the tenant's
- 32 -
control in the first instance? Clearly, HUD decided that one
difference was called for in order to prevent inaccessible sums
from increasing a tenant's annual income: interest on the
principal of an irrevocable trust fund, unlike interest generated
by a fund to which the tenant has immediate access, see id.
§ 5.609(b)(3), counts toward annual income not when it first
accrues but rather only once it is distributed. Section 5.603(b)
expressly so provides, as we have discussed above. It is hard to
imagine, though, that, without expressly so stating, HUD also
intended, now to the tenant's detriment, to count toward annual
income certain funds that would not have counted toward annual
income had they not been routed directly into an irrevocable trust,
merely because the tenant who opted for an irrevocable trust
received the benefit of these funds only after some delay.
Under the second branch of this argument, the BHA
maintains that even if DeCambre's settlement proceeds had the
character of a lump-sum addition to family assets when they entered
the SNT, they no longer possessed that character once they were
disbursed from the SNT. The BHA concedes that the regulations do
not expressly address the matter of whether the nature of the
fund's original source (here, a set of lump-sum personal injury
settlements) loses its controlling relevance after those funds
have been routed through an irrevocable trust, such that the funds
are excluded from annual income upon disbursement only if they
- 33 -
fall anew into an independent exclusion at the time they are
disbursed. The language of the regulations does, however, imply
that a fund's declassification as an asset by virtue of its
placement in an SNT can be temporary. Specifically,
section 5.603(b) states that "the value of [an irrevocable] trust
fund will not be considered an asset so long as the fund continues
to be held in trust." Id. § 5.603(b) (emphasis supplied). This
language reasonably implies that certain irrevocable trust
principal may well be considered to be an asset (rather than
income) after it no longer "continues to be held in trust." Id.
One might therefore fairly reason that DeCambre's interest in her
settlement proceeds was an asset that continued to be an asset
after its detour through the trust. Indeed, the HUD advisory
letter to which we have previously made reference suggests as much:
it points out that although irrevocable trust distributions are to
count toward annual income, annual income does not include "[l]ump-
sum additions to family assets, such as . . . settlement for
personal or property losses." Advisory Letter, supra p. 30, at 1–
2. The BHA does not explain how an irrevocable trust disbursement
can constitute a legal settlement in favor of the trust's own
beneficiary unless the origins of the disbursed funds are taken
into account.
Absent more guidance to the contrary, we can discern no
reason to exclude from annual income (as the regulations clearly
- 34 -
do) lump-sum personal injury settlement proceeds paid directly to
a tenant, see id. § 5.609(c)(3), yet not exclude those same
proceeds merely because they "[g]o to, or on behalf of" a tenant,
id. § 5.609(a)(1), through a trust of which the tenant is the
beneficiary. Routing the funds into a trust deprives the tenant
of their immediate use. It therefore makes sense that a regulation
postpones recognition of earnings on the fund until they are
disbursed. Without a reason to think otherwise, one would
therefore expect the regulations to treat the principal similarly:
while held in trust, an asset remains frozen and inaccessible, and
therefore does not have the effect that it would have were it
within the tenant's control (i.e., it does not count toward net
family assets, see id. § 5.603(b)); once distributed from the
trust, an asset is once again accessible, and it therefore does
have the effect that it would otherwise have had it not been routed
through the trust (i.e., being an asset, it is not counted toward
annual income, but it does count toward net family assets).
Conversely, if we follow the BHA, then an irrevocable trust becomes
a mechanism for transforming assets into income.
We also see a potential for untoward results that neither
Congress nor HUD likely intended should we accept the BHA's view.
If (as the BHA urges) we were to look only to the character of the
funds as they exit the trust without reference to their provenance,
the risk of double-counting arises. Suppose, for example, that a
- 35 -
tenant earns wages in Year One that indisputably count toward
annual income in Year One. See id. § 5.609(b)(1). Then suppose
that, in Year Two, the tenant moves an amount equal to those same
wages from her bank account into an irrevocable self-settled
spendthrift trust and later receives them as a disbursement from
the trust in Year Four. See generally Adam J. Hirsch, Symposium,
Fear Not the Asset Protection Trust, 27 Cardozo L. Rev. 2685, 2685–
86 (2006) (describing the growing availability of such trusts under
state law). On the BHA's logic, as long as the eventual trust
disbursements drawn from those wages do not independently fall
into a regulatory exclusion, the wages would once again count
toward annual income in the year they are spent for the tenant's
benefit. Such a reading has little in logic to recommend it.
Trying to cabin the scope of its logic to avoid such
results, the BHA moves to its third argument, which maintains that
even if passage through an irrevocable trust does not have the
potential to convert all assets into income upon disbursement,
such passage at least has the potential to convert into income
those sums that are originally excluded from annual income only
because they fall into the lump-sum exclusion. The BHA contends
that the only reason "[l]ump-sum additions to family assets," id.
§ 5.609(c)(3), are excluded from annual income when first received
is to prevent a large, one-off monetary inflow from causing a
tenant's income to spike abruptly in a single year, potentially
- 36 -
jeopardizing the tenant's continued participation in the Program.
Because periodic disbursements from a trust fund do not have this
effect, the BHA argues, the rationale for this regulatory exception
does not apply when a settlement is distributed in this way. But
this logic does not supply a reason why piecemeal disbursements of
what was once a lump sum count toward annual income only if they
are made from an irrevocable trust (and not from, say, a bank
account or a pile of cash held under a mattress).
Effectively acknowledging that it makes little sense to
treat the regulations as allowing certain assets to transform into
income only if those assets first pass through an irrevocable
trust, the BHA doubles down on its third argument by contending
that, even had the settlement funds here been paid directly to
DeCambre, her subsequent withdrawals of the funds (from, for
example, a bank account) would have counted toward her annual
income. Under this interpretation of the regulations, all
expenditures made from any reservoir of assets constitute income.
Notwithstanding the fact that this is the principal interpretation
that the BHA advances on appeal, it offers no reading of the
regulations that would compel this counterintuitive conclusion
that a tenant's withdrawal or expenditure of a portion of her own
assets constitutes an amount that "[g]o[es] to, or on behalf of,"
the tenant, id. § 5.609(a)(1), within the meaning of the
- 37 -
regulations and that is therefore presumptively included in annual
income.
To the contrary, the regulations point in exactly the
opposite direction. For example, the regulations provide that
"[a]ny withdrawal of cash or assets from an investment will be
included in income, except to the extent the withdrawal is
reimbursement of cash or assets invested by the family." Id.
§ 5.609(b)(3) (emphasis supplied). Similarly, "[a]ny withdrawal
of cash or assets from the operation of a business or profession
will be included in income, except to the extent the withdrawal is
reimbursement of cash or assets invested in the operation by the
family." Id. § 5.609(b)(2) (emphasis supplied). In other words,
in usual course the withdrawal of an asset from a holding vehicle
generates annual income only to the extent that the asset's
underlying value has appreciated in the interim; the initial outlay
itself retains its character as an asset that does not factor into
the annual income calculation, even once withdrawn.18 So if, as
the BHA contends, withdrawals of principal from an irrevocable
trust should be treated like the withdrawal of cash or assets from
18To the extent that the BHA is contending that, as a matter
of policy, tenants who have access to substantial assets, either
in normal course or by receipt from a trust, should be required to
devote those assets to housing before receiving Section 8
subsidies, it is not for either the BHA or this court to enact
such a change in the law.
- 38 -
any other vehicle into which a lump sum has been placed, DeCambre
would seem to prevail.
We have also considered the BHA's contention that the
HUD advisory letter to which we made earlier reference, see
Advisory Letter, supra p. 30, supports this version of the BHA's
argument. The BHA points to the letter's statement that
"[d]istributions from the trust will be counted when determining
annual income." Id. at 1. But the letter also provides that
"[a]nnual [i]ncome does not include . . . [l]ump-sum additions to
family assets, such as . . . settlement for personal or property
losses." Id. at 2. Critically, the letter does not expressly
acknowledge the issue before us, and it offers no rationale at all
that would favor classifying the disbursements of settlement
proceeds from an irrevocable trust differently from how one would
classify expenditures of those same funds had the funds not first
gone into the trust. Indeed, the BHA official who emailed the
letter's language to another BHA official commented: "[HUD's]
GUIDANCE???????????????????????????????" In sum, the letter casts
too little light on the question we face to serve as the sort of
"fair and considered judgment" of a federal agency, Massachusetts
v. Sebelius, 638 F.3d 24, 30 (1st Cir. 2011) (quoting Chase Bank
USA, N.A. v. McCoy, 562 U.S. 195, 209 (2011)), that might warrant
deference.
- 39 -
Alternatively, the BHA contends that we should defer to
the BHA's own reading of the HUD regulations. One might ask: to
which of the various readings the BHA presses on appeal should we
defer? In any case, we see no basis for deferring to the BHA on
how to read the applicable federal regulations. Our usual
deference to a federal agency's "construction of a statute that it
administers is premised on the theory that a statute's ambiguity
constitutes an implicit delegation from Congress to the agency to
fill in the statutory gaps." FDA v. Brown & Williamson Tobacco
Corp., 529 U.S. 120, 159 (2000). And this implicit delegation
also confers upon a federal agency the authority to interpret the
regulations it has promulgated to fill those statutory gaps. See
Auer v. Robbins, 519 U.S. 452, 461 (1997). Such deference to a
federal agency usually produces nationwide uniformity "without
conflict in the Circuits," thus "impart[ing] . . . certainty and
predictability to the administrative process." Christopher v.
SmithKline Beecham Corp., 132 S. Ct. 2156, 2168 n.17 (2012)
(quoting Talk Am., Inc. v. Mich. Bell Tel. Co., 564 U.S. 50, 69
(2011) (Scalia, J., concurring)). Such deference also recognizes
that a federal agency speaks with some measure of authority on the
meaning of a regulation simply by virtue of having authored that
regulation. See Auer, 519 U.S. at 461. In contrast, we find no
basis for assuming that Congress delegated any authority to the
BHA to propound authoritative interpretations of either the
- 40 -
statute or HUD's regulations. Congress did not authorize the BHA
to draft the pertinent regulations, nor does the BHA have a
nationwide perspective on implementation of the statute. See
Kenaitze Indian Tribe v. Alaska, 860 F.2d 312, 316 (9th Cir. 1988)
(state's interpretation of a federal statute received no deference
because the state "lacks the expertise in implementing federal
laws and policies and the nationwide perspective characteristic of
a federal agency"). And if federal courts were to defer to state
agencies' potentially diverging interpretations of federal
regulations, such a practice would defeat the aim of interpretive
consistency that, at least in part, justifies deference. Cf.,
e.g., Orthopaedic Hosp. v. Belshe, 103 F.3d 1491, 1495–96 (9th
Cir. 1997) (no deference to state agency's interpretation of
federal statute).
The BHA, however, claims that the Fourth Circuit
appeared to see the matter differently in Ritter v. Cecil County
Office of Housing & Community Development, 33 F.3d 323 (4th Cir.
1994), in which the court found it "appropriate . . . to show some
deference to a state agency interpreting regulations under the
authority of a federally created program . . . to the extent the
agency's rules are not contrary to the . . . regulation," id. at
327–28. But although the Fourth Circuit has recognized the need
to permit state agencies to "draw[] lines in [regulatory] gray
areas," id. at 329, its deference appears so far to have been
- 41 -
limited to cases in which the state agency resolves mixed questions
of law and fact by applying the federal regulation to a specific
factual scenario, see Clark v. Alexander, 85 F.3d 146, 153 (4th
Cir. 1996) (deferring to state agency hearing officer's
determination of whether a particular individual "could be
considered a member of [plaintiff's] family under the federal
housing regulations" based on the individual's particular conduct
around plaintiff's residence).19
We need not decide whether we would adopt the Fourth
Circuit's standard were DeCambre challenging a highly fact-bound
determination that her specific characteristics brought her within
a broadly written regulatory provision.20 Cf. Lessard v. Wilton-
Lyndeborough Coop. Sch. Dist., 518 F.3d 18, 24 (1st Cir. 2008)
(mixed questions of law and fact "are handled on a degree-of-
deference continuum, and the exact standard of review depends on
whether and to what extent a particular determination is law- or
fact-dominated"). In this case, the BHA made a purely legal
19In Ritter itself, the federal agency responsible for
promulgating the regulation at issue had affirmatively "approved"
the state agency interpretation to which the Fourth Circuit
deferred. See Ritter, 33 F.3d at 325.
20 A deferential standard, for example, might be appropriate
were we to reach the question of whether the BHA properly
determined that certain of DeCambre's specific trust disbursements
did not fall into the regulatory exceptions for medical expenses,
24 C.F.R. § 5.609(c)(4), or "[t]emporary, nonrecurring or sporadic
income," id. § 5.609(c)(9). Because we do not reach that branch
of DeCambre's argument, we need not express an opinion about it
today.
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determination that a federal regulation commands a reading that
would count all irrevocable trust disbursements to a tenant, or at
least all such disbursements that do not independently fall into
a regulatory exclusion at the time of disbursement, to be "annual
income" upon disbursement. In doing so, the BHA did not purport
to rely on local policy considerations uniquely within the ken of
its expertise, nor did the BHA draw its categorical conclusion
from the sort of careful examination of specific factual
circumstances that appellate tribunals lack a comparative
institutional advantage in undertaking.21 Therefore, we find no
rationale in this case that would support extending deference to
the BHA's interpretation.
We therefore conclude that the BHA improperly counted
the distributions from the principal of DeCambre's settlement-
funded irrevocable trust toward her annual income. Accordingly,
we reverse the district court's judgment on DeCambre's Housing Act
claim. Because we reach this conclusion, we need not address
21
We acknowledge that the HUD advisory letter upon which the
BHA relies in part states that "[t]he ultimate determination of
whether each [SNT] expenditure[] counts towards annual income or
falls within an exclusion or deduction is to be made" by the local
housing authority. Advisory Letter, supra p. 30, at 2. We
understand this statement to be an acknowledgement that local
public housing authorities will be best positioned in the first
instance to apply HUD's regulations to the facts of any given case
and not to be a grant of authority to the public housing
authorities to issue definitive, nationally applicable legal
pronouncements on the scope of those regulations.
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DeCambre's more limited claim that the BHA violated her rights
under the Housing Act by failing to exclude certain specific trust
distributions from her annual income.22 And because this
conclusion will require the district court to determine anew what
additional proceedings or remedies are required, we vacate the
district court's denial of a preliminary injunction and order
remanding to the BHA. Consequently, we dismiss the BHA's cross-
appeal of the remand order as moot. Cf. Bos. Duck Tours, LP v.
Super Duck Tours, LLC, 531 F.3d 1, 31 n.31 (1st Cir. 2008).
IV. DeCambre's Discrimination Claims
DeCambre argued in the district court and on appeal that
the BHA's policy of counting all distributions from SNTs that
satisfied the regulatory definition of income at the time of
distribution toward annual income would, if sustained, impact
disabled individuals unfairly, and that even if such a policy were
correct, the BHA acted unlawfully by failing to exclude from her
annual income certain specific trust disbursements that went
toward her allegedly medically necessary disability-related
expenses. Our ruling rejecting the BHA's interpretation of the
applicable regulations would seem to moot DeCambre's argument that
an alternative reading would lead to discrimination in the absence
22Nor need we address DeCambre's contention that the district
court erred in taking judicial notice of certain erroneous
Section 8 eligibility requirements.
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of reasonable accommodations. We therefore express no view
concerning the merits of DeCambre's discrimination claims other
than to state that the district court on remand may deem them to
be moot unless DeCambre demonstrates otherwise.
V. Conclusion
In summary, we reverse the district court's ruling in
favor of the BHA on DeCambre's Section 1983 claim brought under
the Housing Act, vacate the denial of a preliminary injunction and
the order remanding to the BHA, and remand for the district court
to fashion an appropriate remedy. In light of our ruling on
DeCambre's Housing Act claim, we vacate the district court's ruling
on DeCambre's state and federal discrimination claims, and remand
with instructions to dismiss those claims as moot unless DeCambre
can demonstrate that they are not. As to the district court's
denial of all DeCambre's remaining claims--in particular, her
Fourteenth Amendment, breach of lease, and interference with quiet
use and enjoyment claims--we affirm. Finally, we dismiss the BHA's
cross-appeal as moot. No costs are awarded.
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