DocketNumber： 92-1210-CIV-T-17C
Judges： Kovachevich
Filed Date： 9/18/1992
Status： Precedential
Modified Date： 11/6/2024
ORDER DENYING MOTION FOR PRELIMINARY INJUNCTION
This cause is before the Court upon Plaintiffs’ Motion and Memorandum for Preliminary Injunction filed August 25, 1992 and Defendants’ Response to Plaintiffs’ Motion for a Preliminary Injunction filed September 4,1992. Based upon Plaintiffs’ Motion and Memorandum for Preliminary Injunction, Defendants’ Response to Plaintiffs’ Motion for a Preliminary Injunction and oral argument before this Court on September 9, 1992, this Court finds that Plaintiffs’ Motion for Preliminary Injunction should be denied. Although this Court finds that Plaintiffs have met their burden as to irreparable injury, potential harm to Defendants and public interest, the undersigned finds that Plaintiffs have not persuaded as to their substantial likelihood of success on the merits.
I. FACTS
Plaintiffs received certification for housing assistance benefits from the Hillsbor-ough County Housing and Community Development Department (the “Department”), as a participant in the Section 8 Housing Assistance Program (the Program). The Program was established by Congress in 1974 through Title II, Section 201(a), of the Housing and Community Development Act of 1974, and codified at 42 U.S.C. § 1437f, Section 8 of the United States Housing Act of 1937. Under 24 C.F.R. § 882.210(d), the Department may terminate the Section 8 Certification for any of these three grounds: 1) fraud; 2) violation of 24 C.F.R. § 882.118 “Obligations of the Family”; or 3) breach of a repayment agreement between the family and the Department. The family obligation under § 882.118 that is relevant to this case is the obligation to supply information to the Department, including annual or interim family income.
On November 12, 1991, Plaintiffs applied for and were granted a Section 8 Housing Certificate. Prior to the Department’s proposed termination of Section 8 Certification, Plaintiffs acknowledged their duty to disclose changes in income by twice signing a document titled “Important Notice to Section 8 Applicants and Tenants of Hillsbor-ough County Housing Assistance”, signing a “Tenant Responsibilities” document, attendance at a Section 8 orientation program, as well as two warnings from Department representatives in January and April of 1992. Further, Plaintiffs again acknowledged this obligation in writing on April 17, 1992.
On June 4, 1992, Plaintiffs were informed via letter of the proposed termination of their Section 8 Certification for their failure to report income. This letter also informed Plaintiffs of their right to request an informal hearing in writing within ten days, pursuant to 24 C.F.R. § 882.216(b)(4). Accordingly, Plaintiffs were granted two informal hearings. The
II. STANDARD FOR GRANTING A PRELIMINARY INJUNCTION
A preliminary injunction authorized by Rule 65, Fed.R.Civ.P. is not granted as a matter of right, but is a extraordinary remedy and must be sparingly granted. Black & Decker Corp. v. American Standard, Inc., 679 F.Supp. 1183 (D.Del.1988). The issuance of a preliminary injunction falls within the sound discretion of a district court. Frio Ice, S.A. v. Sunfruit, Inc., 918 F.2d 154, 159 (11th Cir.1990). A district court should grant a preliminary injunction only if the moving party clearly shows: a substantial likelihood that the moving party will prevail on the merits; that they will suffer irreparable injury if an injunction is not issued; that the potential injury outweighs the possible harm to the opposing party; and that the injunction would not be adverse to the public interest. Id. at 159. Further, since an injunction is an extraordinary and drastic remedy, it will not be granted unless the movant clearly carries the burden of persuasion as to all four prerequisites. United States v. Jefferson County, 720 F.2d 1511, 1519 (11th Cir.1983).
Plaintiffs have met their burden as to every element except the substantial likelihood of success on the merits. First, Plaintiffs have demonstrated irreparable injury in that a denial of this motion could render them homeless. Defendants’ contention that this Court should “assume” that Plaintiffs will move in with their grandmother is misplaced. Second, there is no potential harm to Defendants if this injunction is granted, because the Department demonstrated no harm to itself if ordered to reinstate Section 8 Certification to Plaintiffs.
Third, the public interest is in the proper administration of the Program. This Court finds that there is a great public interest in guaranteeing that those in financial need are not unreasonably terminated from public assistance benefits. However, the Court recognizes that Defendants also have an obligation to the public at large to maintain the proper administration of the Program. Consequently, in addition to the public interest in the reasonable termination of public assistance benefits, there is a great public interest in providing Section 8 housing benefits to other needy individuals who desire it and would use it in a lawful manner, if Plaintiffs were properly terminated from the Program. This is not sufficient to find that this factor weighs in favor of Defendants, but it has been considered by the Court.
Further, this Court finds that Plaintiffs have not met their burden of persuasion as to the likelihood of success on the merits. This Court’s review indicates that the Department complied with all C.F.R. regulations regarding the termination of Plaintiffs’ Section 8 certification; the Department complied with the Supreme Court’s procedural due process requirements regarding an informal hearing; and Judge Castagna’s granting of a preliminary injunction in a case similar to this one can be distinguished.
Plaintiffs contend that they reported their change in employment and income in a timely fashion, and thus, the Department’s reliance on Plaintiffs failure to meet their “Family Obligations” is pre-textual. Plaintiffs further contend that the Department’s real motive for termination is because they are “morally unworthy” of Section 8 participation. This motive is evident, Plaintiffs contend, from the fact that the Department erroneously told Plaintiffs that their Section 8 Certification would be terminated if they were evicted from their apartment; thus, they improperly applied 24 C.F.R. § 882.118(a)(1) “Family Obligations” as grounds for the termination of Plaintiffs’ Section 8 Certification, (i.e. the failure to disclose changes in income).
Defendants contend that Plaintiffs cannot establish a substantial likelihood of success on the merits of their case; that Plain
Defendants also contend that Plaintiffs were afforded the right to two informal hearings prior to the termination of their Section 8 Certification. Plaintiffs were notified on June 4, 1992 that the Certification was being withdrawn and that they had a right to a hearing. Further, this notice specifically stated that the benefits would not cease until July 1, 1992.
In addition, Defendants contend that the Department’s hearing procedures fully complied with applicable due process requirements. The Supreme Court has established the requirements for due process in the termination of public assistance as follows: 1) timely and adequate notice giving reasons for termination; 2) opportunity to appear at the hearing and to present evidence and question witnesses; 3) the right to representation by counsel;,, 4) the right to an impartial decision maker; 5) the right to have the decision based on rules of law and evidence presented at the hearing; and 6) the right to a written decision by the decision maker outlining the reasons for the decision. Goldberg v. Kelly, 397 U.S. 254, 267-71, 90 S.Ct. 1011, 1020-22, 25 L.Ed.2d 287 (1970). This standard has been applied to Section 8 Certification programs. See e.g. Ferguson v. Metropolitan Development & Housing Agency, 485 F.Supp. 517 (M.D.Tenn.1980). Defendants contend that the Department’s practice and procedures met the Goldberg test.
A. The Department’s compliance with C.F.R. Regulations.
The Department contends Plaintiffs’ certification was terminated pursuant to 24 C.F.R. § 882.210 which provides in pertinent part:
(a) This section states the grounds for denial of assistance to an applicant, or for denial or termination of assistance to a participant, because of action or inaction by the applicant or participant.
(d) In the following cases, the [Public Housing Authority] PHA may terminate housing assistance payments which are being made on behalf of the participant under an outstanding contract:
(1) If the participant has committed any fraud in connection with any federal housing assistance program.
(2) If the participant has violated any family Obligation under the Section 8 Existing Housing Program as stated in § 882.118.
Defendants contend that the Department based the decision to terminate the Section 8 certification for fraudulently concealing changes in income. Although Plaintiffs contend that the reliance on their failure to disclose changes in income is pre-textual, the Department was authorized by either- § 882.210(d)(1) or (2) to terminate Plaintiffs’ certification; Thus, the Department had two grounds for termination of public housing assistance benefits under 24 C.F.R. § 882.210(d), at the time of their termination.
B. Plaintiffs were provided procedural due process of law.
Plaintiffs were notified of their right to an informal hearing at the same time they were notified of the Department’s decision to terminate their Section 8 Certification. Plaintiffs were subsequently granted two informal hearings. 24 C.F.R. § 882.216 provides for due process of law by informal review or hearing. This section provides in pertinent part:
(b)(1) Informal hearing on PHA decision affecting participant Family.
(ii) A decision to deny or terminate assistance on behalf of the participant.
*934 (3)(1) The PHA shall give the participant prompt written notice of a decision described in paragraph (b)(l)(ii) or (iii) of this section. The notice shall contain a brief statement of the reason for the decision. The notice shall state that, if the participant does not agree with the decision, the participant may request an informal hearing on the decision, and shall also state the time by which the request for an informal hearing must be made by the participant.
(4) IF the PHA has decided to terminate housing assistance payments on behalf of a participant under an Outstanding Contract (and if the PHA is required to give the participant an informal hearing on the decision), the participant shall be afforded the opportunity for such informal hearing before the termination of housing assistance payments.
The Department’s Section 8 Administrative Plan complies with these C.F.R. requirements. (see Plaintiffs’ Exhibit # 1). Further, the Department’s handling of Plaintiffs’ case complied with both the Administrative Plan and the C.F.R. requirements. Plaintiffs were notified of the Department’s decision to terminate their Section 8 Certification for their failure to disclose changes in income via letter dated June 4, 1992. This letter contained a brief statement why their public assistance benefits were being terminated and notified them of their right to an informal hearing on the decision. This letter further provided that any request for an informal decision must be made in writing within ten working days, (see Plaintiffs’ Exhibit # 2).
Further, the Department’s procedures comply with the Supreme Court’s requirements for procedural due process of law. Plaintiffs were afforded the right to an informal hearing prior to the termination of the Section 8 Certification. Goldberg v. Kelly, 397 U.S. 254, 261, 90 S.Ct. 1011, 1016, 25 L.Ed.2d 287 (1970) (due process requires an adequate hearing before the termination of welfare benefits). The sole function of this hearing is to produce an initial determination of the validity of the welfare department’s grounds for discontinuance of payments in order to protect a recipient against an erroneous termination of benefits. Id. at 267, 90 S.Ct. at 1020. Further, in Goldberg, the Supreme Court found a violation of procedural due process because the termination notice provided to the welfare recipients denied them the opportunity to personally confront and cross-examine the witnesses relied on by the department to propose termination of the welfare benefits. Id. at 276, 90 S.Ct. at 1024. There was no such denial in the case sub judice.
The Goldberg requirements have also been applied to Section 8 Certification programs. In Ferguson v. Metropolitan Development & Housing Agency, 485 F.Supp. 517, 527 (M.D.Tenn.1980), the district court applied the Goldberg analysis and held that the termination of Section 8 Certification without a pretermination hearing constitutes state action depriving the plaintiff of an essential interest protected by the Due Process Clause of the Fourteenth Amendment. In Ferguson, the Metropolitan Development & Housing Agency (MDHA) notified the plaintiff that Section 8 Certification would be terminated due to a prior debt owed to MDHA and that she would no longer receive the housing assistance benefits as of April 30, 1978. Id. at 518. However, the MDHA did not provide the plaintiff the opportunity to confront the department in an informal hearing prior to April 30, 1978. Id.
In the case sub judice, the Department’s informal hearing procedures comply with the Goldberg standard. The Department provided Plaintiffs notice of the proposed termination and their right to request an informal hearing. Plaintiffs requested and were granted an informal hearing that took place on June 23, 1992. At the request of Plaintiffs’ attorney, the Department provided them with another informal hearing on July 17, 1992. At both of these hearings, Plaintiffs were provided the opportunity to personally confront and cross-examine the Department and their witnesses. Further, at the second hearing, Plaintiffs’ counsel was afforded this same opportunity. Accordingly, the Department complied with their procedural due process requirements.
Plaintiffs’ reliance on Judge Castagna’s Order granting a Preliminary Injunction in Rojas v. Freda, Case No. 89-1177-Civ-T-15(B) is misplaced. Although the facts giving rise to that preliminary injunction and ultimate settlement are similar to the facts in the case sub judice, they are critically distinct. In Rojas, as in the present case, the plaintiff claimed that the Department’s termination of Section 8 Certification for the failure to report changes in income was a mere pretext for a hidden motive. The Department originally notified Kojas that her Section 8 Certification was being terminated due to alleged police disturbances (plaintiff’s Exhibit # 1). The Department later changed this basis to the failure to report changes in income. Rojas contended that the subsequent basis was a mere pretext for the decision to terminate her Section 8 Certification for the alleged police disturbances, which is not a basis for termination 24 C.F.R. § 882.210(d).
In the case sub judice, Plaintiffs also claim that the Department’s grounds for terminating their Section 8 Certification is a mere pretext for the Department’s belief that they are “morally unworthy” of Section 8 participation (Plaintiffs’ Motion and Memorandum for Preliminary Injunction Docket # 5). However, the Department specifically stated in its letter dated June 4, 1992 that the Section 8 Certificate was being withdrawn because of Plaintiffs failure to meet their Family Obligations under 24 C.F.R. Ch. 8 in that they were both “gainfully employed and reported only unemployment compensation.” The Department now contends that the failure to meet these obligations also constitutes fraud (Defendants’ Response to Plaintiffs’ Motion and Memorandum for a Preliminary Injunction Docket # 12). Thus, unlike Rojas, both grounds for termination proffered by the Department constitute grounds for the termination of Section 8 Certification under 24 C.F.R. § 882.210(d). This regulation authorized the Department to terminate Section 8 Certification for the failure to report changes in income or fraud.
Therefore, this Court finds that, although Plaintiffs have met their burden as to irreparable injury, potential harm to Defendants and public interest, Plaintiffs have not prevailed on the matter of their substantial likelihood of success on the merits. Accordingly, it is
ORDERED that Plaintiffs’ Motion for a Preliminary Injunction be denied.
DONE and ORDERED.