In Nozzi v. Housing Authority of the City of Los Angeles, filed November 30, 2015, the 9th Circuit Court of Appeals reversed summary judgment granted in favor of the defendant housing authority, and ordered summary judgment entered in favor of the plaintiff class of Section 8 program tenants. The housing authority reduced its payment standard, the maximum subsidy payment that the authority would provide for each apartment in the area. That would result in an increase of the amount many tenants paid for their rents. 24 C.F.R. section 982.505(c)(3) required the authority to provide information about the change to the beneficiaries at their annual reexaminations following the decision, and advise them that their change will not go into effect until their following examination one year later. The authority sent the beneficiaries a flyer with their notices of review determination. The flyer set forth a notice of the lowered payment standard, couched in the language of the regulation. The flyer did not define the terms within it. It did not advise tenants that their shares of their rent might rise. It did not provide contact information for tenants with questions about the notice. A year later, thirty days before the payment standard was to change, the authority sent the beneficiaries notices of their subsidies and rents for the year under the new payment standard. A class of tenants sued the housing authority under 42 U.S.C. section 1983 for denial of due process, and under state law for violation of mandatory duty (Government Code section 815.6). The district court granted the authority summary judgment.
The 9th Circuit held that the housing authority had failed to provide the plaintiffs with sufficient notice of the change to meet due process standards. The federal regulations created a property interest in the Section 8 beneficiaries in housing benefits that continue in existence for at least one year after the beneficiary is advised that his benefits may be decreased by a change to the payment standard, so that the beneficiary can prepare for the change. They therefore had the right not to be deprived of that property interest without due process. The notice required by due process is notice that is reasonably certain to actually inform the party. The flyer was insufficient to meet the standard. It failed to provide actual notice to anyone without a sophisticated knowledge of Section 8 payment calculations that the changes may result in the tenants paying more. The other measures the authority took to inform the tenants were insufficient. Although there were public hearings, they failed to give individual tenants notice of the changes in their rents. The orientation training sessions that tenants received only briefly touched on payment standards, and were for many held years before this change. The notice sent 30 days before did not satisfy the requirement for a year's notice. In addition, the federal regulation created a mandatory duty that supported a cause of action under section 815.6 for violation of that duty. Since the housing authority had a full chance to provide evidence, and did not raise any triable issues of fact, the 9th Circuit ordered summary judgment entered for the plaintiff class.
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