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9th Cir Revives Section 8 Class Action, Calls for New Judge

By Jonathan R. Tung, Esq. on December 02, 2015 | Last updated on March 21, 2019

For all the emotions it evokes -- both pro and con -- Section 8 is sometimes the only avenue by which the impoverished can get affordable housing in a region. For most recipients, any change in a government subsidy is a matter of daily livelihood and may result in homelessness.

A Section 8 subsidy is a property right. As such, the Ninth Circuit reversed a lower court decision in favor of defendants who had administered a local voucher program and instead entered judgment for plaintiffs, who argued they weren't given proper notice before their subsidies were reduced.

An Unexpected Rent Increase

The Housing Authority the City of Los Angeles (HACLA) administers the Section 8 Voucher Program in LA. In 2004, HACLA was forced to make budget cuts in order to balance the department's budget. This led to significant cut-backs in the subsidy amounts that the HACLA would be handing out to the people who relied on Section 8. On average, Section 8 tenants would have to pay $104 more in rent if they chose to remain in their current housing.

HACLA first notified the affected Sec. 8 recipients of the changes in 2004. But that notice was ambiguously worded. They simply attached to a flyer to each of Sec. 8 beneficiaries' "notice of review determination" -- or "RE-38." A year later in 2005, HACLA sent out another notice, only this time the tenants were actually made aware of the rent increases -- and only 30 days before they became effective. Plaintiffs sued.

The district court found in favor of the agency because plaintiffs failed to prove an essential element in their negligence claim against HACLA: that HACLA was under duty by statute. A flurry of cross-motions and added causes of action later, the case found its way to the Ninth Circuit.

The Ninth Saves Section 8 Plaintiffs

The Ninth Circuit first established that Sec. 8 beneficiaries enjoyed a "property right" that was protected by due process -- a "well-settled" precedent. What was really in debate was the kind of process Sec. 8 beneficiaries were due. Procedurally, it was clear to the panel that simply attaching the flyer to the RE-38 was not good enough to constitute adequate notice under California and federal standards. In order to have met the standard, the simplest way, the circuit said, would have simply been to send a letter, one year before, to all of the recipients clearly outlining the change and the consequences of those changes. Thus, a reverse and remand was ordered.

And Get Us a New Judge, Too

The court did not stop there. Based on comments by the judge on the first round of the case, the circuit found that, because of "rare and extraordinary circumstances," a new judge ought to be assigned in order to "preserve the appearance of justice." It turns out, that judge didn't even want to see the case anymore either.

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