Hon. Amy St. Eve, District Judge for the Northern District of 

Illinois, is sitting by designation.

In the

United States Court of Appeals

For the Seventh Circuit

No. 09-1964

MARSHALL FINCHER,

Plaintiff-Appellant,

v.

SOUTH BEND HERITAGE FOUNDATION,

Defendant-Appellee.

Appeal from the United States District Court

for the Northern District of Indiana, South Bend Division.

No. 3:07-CV-308—Philip P. Simon, Chief Judge.

ARGUED FEBRUARY 26, 2010—DECIDED MAY 10, 2010

Before FLAUM and WOOD, Circuit Judges, and ST. EVE,

District Judge.



FLAUM, Circuit Judge. Defendant-appellee South Bend

Heritage Foundation (“SBHF”) denied plaintiff-appellant

Marshall Fincher’s application for Section 8 housing in

its building because Fincher had a prior eviction within
2 No. 09-1964

Section 8 is used throughout this opinion to refer to Section 8

1

of the United States Housing Act, as amended, 42 U.S.C. § 1437f.

three years. Fincher brought a suit against SBHF on the

theory that he was denied due process of law, or, in the

alternative, that SBHF breached a contract with the United

States Department of Housing and Urban Development

(“HUD”) to which Fincher was a third-party beneficiary.

On appeal, Fincher recognizes that the controlling precedent in this Circuit holds that there is no cause of action

for a person in his position. See Eidson v. Pierce, 745

F.2d 435 (7th Cir. 1984). Fincher asks us to overturn our

precedent on this issue. For the reasons set forth below,

we choose not to overrule Eidson and we affirm the

district court’s grant of summary judgment.

I. Background

The facts of this case are straightforward and not in

dispute for the purpose of this appeal. South Bend

Housing Authority (“SBHA”) evicted plaintiff-appellant,

Marshall Fincher from one of its public housing units.

Fincher then applied to live in an apartment building

owned by SBHF as a Section 8 tenant. SBHF denied 1

Fincher’s application because of his recent eviction from

SBHA housing. SBHF did not grant Fincher a hearing

concerning the denial of his application for tenancy.

Fincher filed suit against both SBHA and SBHF in state

court alleging a number of violations of Section 8 and

other housing laws. SBHA removed the case to federal
No. 09-1964 3

court. However, the district court remanded the claims

involving SBHA back to state court because they were

inherently tied to the state court eviction proceedings

and thus fell under the Rooker-Feldman doctrine. In an

earlier opinion we dismissed the appeal of the district

court’s decision regarding the SBHA claims because “[a]n

order remanding a case to the State court from which

it was removed is not reviewable on appeal or otherwise.” Fincher v. South Bend Housing Authority, 578 F.3d 567,

568 (7th Cir. 2009) (citing 28 U.S.C. § 1447(d)). The district

court retained jurisdiction over the claims against SBHF

and granted summary judgment in favor of SBHF. In

granting summary judgment, the district court relied

on the settled Seventh Circuit precedent that Section 8

housing applicants do not have a defined property right

in receiving housing at a specific location that would

entitle them to a due process hearing. The district

court also rejected Fincher’s claim that Fincher had enforceable rights as a third-party beneficiary to a contract between HUD and SBHF.

II. Discussion

On appeal, Fincher advances two main arguments for

why we should reverse the district court’s grant of summary judgment: (1) we should overturn our prior precedent and find that Section 8 housing applicants do have

an enforceable property right such that it warrants a

due process hearing when they are denied housing at a

specific Section 8 housing location; and (2) he put forth

sufficient evidence to create a triable issue of fact re-
4 No. 09-1964

garding his claim as a third-party beneficiary to a

contract between SBHF and HUD. We review a district

court’s grant of summary judgement de novo. Darst v.

Interstate Brands Corp., 512 F.3d 903, 907 (7th Cir. 2008).

Summary judgment is proper where “there is no

genuine issue of material fact and the moving party is

entitled to a judgment as a matter of law.” Id.; Fed. R.

Civ. P. 56(c).

A. Revisiting Eidson v. Pierce

Fincher recognizes that the holding of Eidson v. Pierce,

745 F.2d 453 (7th Cir. 1984) controls this case and

squarely contradicts the outcome he is seeking. However,

Fincher encourages us to overrule Eidson and adopt the

analysis from a Ninth Circuit opinion on this issue that

pre-dates Eidson and finds that there is an enforceable

property right in this situation. Fincher also points to a

case out of the District of New Jersey and a case from

the Supreme Judicial Court of Massachusetts, both of

which came after Eidson, to support his position that

courts are now following the Ninth Circuit approach

and therefore we should revisit the issue.

We start by reviewing the analysis in Eidson. In

Eidson, we addressed the same question presented here:

do Section 8 housing applicants who meet all Section 8

requirements and have already been deemed eligible

for Section 8 have a protected right that entitles them

to some form of due process when they are rejected

from a specific Section 8 housing unit? Eidson held that
No. 09-1964 5

they do not. The court in Eidson first looked to the

language of Section 8. Section 8 authorizes the Secretary

of HUD to make “assistance payments . . . with respect

to existing, newly constructed, and substantially rehabilitated housing” for the purpose “of aiding lowerincome families in obtaining a decent place to live and

of promoting economically mixed housing.” Eidson, 745

F.2d at 457 (citing 42 U.S.C. § 1437f(a) (1982)). These

payments to the owner are intended to make up the

difference between what the Section 8 tenant pays and a

maximum fair market rent established in the contract

between HUD and the private owner. 42 U.S.C.

§ 1437f(c)(3). Under the contract, the private owner remains responsible for the operation and management

of the housing units. Section 8 directs that the contract between the Secretary and the private owner

[S]hall provide that all ownership, management, and

maintenance responsibilities, including the selection

of tenants and the termination of tenancy, shall be

assumed by the owner (or any entity . . . with which

the owner may contract for the performance of

such responsibilities), except that the tenant selection criteria shall give preference to families which

occupy substandard housing or are involuntarily

displaced at the time they are seeking housing assistance under this section.

Eidson, 745 F.2d at 457 (citing 42 U.S.C. § 1437f(e)(2)

(1982)). Under the regulations promulgated in response

to this statute, the owner may consider whether a tenant

is “otherwise acceptable” in addition to considering
6 No. 09-1964

whether the tenant meets the statutory requirements for

Section 8 housing. 24 C.F.R. §§ 880.218(b)(3) and (4). The

HUD Handbook reinforces this discretion by stating

that “each Owner should develop reasonable Tenant

selection procedures . . . designed to select applicants

who will not only meet the Tenant eligibility requirements for HUD’s subsidy programs but will also be

responsible tenants.” Eidson, 745 F.2d at 459 (citing HUD

Handbook ¶¶ 2-8, Germain App. at 38). Based on these

statutory provisions and regulations, the court in Eidson

recognized a tension between the lofty goals of Section 8

and the reality that there is a gap between Section 8

resources and the needs of all those eligible for Section 8.

The court in Eidson reasoned that Congress intended to

remedy this tension in a practical manner by allowing

private owners to consider less tangible factors, such as

whether an individual would be a responsible tenant,

in addition to statutory eligibility.

Against this backdrop, the court then turned to

whether an applicant for a specific Section 8 residence has a due process right to a hearing if he is denied

housing. The court looked to our previously adopted

statement that a legitimate claim of entitlement to warrant a due process hearing occurs “only when the

statutes of regulations in question establish a framework

of factual conditions delimiting entitlements which are

capable of being explored at a due process hearing.” Id. at

459-60 (quoting Geneva Towers Tenants Organization v.

Federated Mortgage Investors, 504 F.2d 483 (9th Cir. 1974)

(Hufstedler, J. dissenting)). Applying this definition to

Section 8, it is clear that there is no legitimate claim to
No. 09-1964 7

entitlement for individuals rejected from a specific

housing unit. Under Section 8, even if a plaintiff proved

that the landlord relied on false information in coming

to its decision to deny the plaintiff housing, the plaintiff

still would not be entitled to the housing so long as the

housing went to another eligible candidate. Id. Therefore,

the due process hearing would be meaningless. Id. The

court illustrated this point by distinguishing Section 8

from the Hill Burton Act, 42 U.SC. §§ 291 et seq., which

was at issue in Davis v. Ball Memorial Hospital Association,

640 F.2d 30, 42 (7th Cir. 1980). Under the Hill-Burton

Act, hospitals receiving federal funding must provide “a

reasonable volume of services to persons unable to pay

therefor” to the extent that the financial condition of the

facility permits. Davis, 640 F.2d at 32 (citing 42

U.S.C. § 291c(e)). As one may expect, free hospital

care suffers from the same scarcity problem as public

housing. However, the Hill-Burton Act set out a clear firstcome-first-serve basis for establishing an entitlement. Id.

at 42-43. Therefore, a hearing could establish facts sufficient for a neutral hearing officer to determine if the

individual was entitled to these services. Unlike the HillBurton Act, Section 8 provides no clear decision-making

structure. Rather, Section 8 provides landlords with a

series of guidelines to apply when choosing between

two eligible candidates and leaves the landlord with

considerable discretion in making the final decision.

Our circuit and other circuits have relied on Eidson

in addressing similar cases. The Eighth Circuit

specifically adopted the reasoning from Eidson when
8 No. 09-1964

deciding a nearly identical case. Hill v. Group Three Housing

Development Corporation, 799 F.2d 385 (8th Cir. 1986). Also,

this Court applied the reasoning from Eidson in Talley v.

Lane, 13 F.3d 1031 (7th Cir. 1994), to reject an alleged

due process violation when the plaintiff was rejected

from the Chicago Housing Authority’s housing program

for the disabled because of his extensive criminal history.

13 F.3d at 1035. These cases demonstrate that courts,

including ours, have reconsidered and endorsed the

reasoning from Eidson.

Fincher raises several issues in his argument for why

we should overturn Eidson. First, he repeatedly points to

Ressler v. Pierce, 692 F.2d 1212 (9th Cir. 1982), a Ninth

Circuit case that directly contradicts Eidson. The problem

with this reliance is that this Court has already

specifically rejected the reasoning from Ressler in Eidson.

Eidson, 745 F.2d at 460. The court in Eidson did not

follow Ressler because the decision in Ressler rested on a

definition of “claim of entitlement” that our circuit had

previously rejected. Id. (“As noted above, however, this

circuit has consistently followed the reasoning of

Judge Hufstedler’s dissent in Geneva Towers rather than

the majority opinion relied on in Ressler. In our view,

that reasoning compels the conclusion that these plaintiffs do not have protected property interests.”).

Fincher next directs our attention to Baldwin v. Housing

Authority of the City of Camden, N.J., 278 F. Supp. 2d 365

(D.N.J. 2003). However, Baldwin is not instructive

here. The court in Baldwin dedicates nearly a page to

distinguishing that case from Eidson. 278 F. Supp. 2d at 379.
No. 09-1964 9

In Baldwin the question was whether an individual had

a right to a due process hearing when she was denied

eligibility for the Section 8 housing program in Camden,

New Jersey. This is a different issue than the one

addressed in Eidson. In Eidson we did not address the

issue of what due process rights an individual has when

his application for eligibility for Section 8 is denied.

Rather, we addressed the issue of what due process

rights an eligible applicant has when he is denied

housing at a specific residence. By applying the standard

for an entitlement right that we applied in Eidson, the

decision in Baldwin comports with the reasoning in

Eidson. When addressing the eligibility of an individual

for a Section 8 voucher, there is a framework of factual

conditions that could be explored at a due process hearing. A neutral hearing officer could find certain facts and

order a remedy—that the individual be found to be

eligible for a Section 8 voucher. This is different from the

situation where an eligible applicant has been rejected

from a specific residence. In this latter situation,

a hearing officer would be powerless to change the situation under the statutory scheme regardless of what

facts the hearing officer found.

Lastly, Fincher cites Madera v. Secretary of the Executive

Office of Communities & Development, 636 N.E.2d 1326

(Mass. 1994) as new authority on the issue at hand. However, Madera addresses a situation where the defendants

were allegedly in violation of numerous state public

housing regulations that set forth mandatory priority and

preference categories. 636 N.E.2d at 1330. The Madera court

specifically recognized the difference between the state
10 No. 09-1964

regulations at issue in that case and the federal regulations at issue in Eidson. Id. at 1330-31. Therefore, Madera

does not call into question the reasoning from Eidson.

Fincher’s last argument on the due process issue is that

the district court erred by not considering whether

SBHF was a state actor when determining if Eidson precluded a suit under the due process clause. For the due

process claim to survive to the summary judgment stage

of litigation, the district court had to assume that SBHF

was a state actor. If SBHF was not a state actor, there

would be no due process claim at all. Contrary to

Fincher’s argument, the district court assumed that

SBHF was a state actor and still found that Fincher had

no due process right to a hearing as a tenant rejected

from a specific Section 8 housing location. 

Because Eidson was a well-reasoned opinion, and no

significant changes in the law have occurred between

when we decided that case and now, we decline the

invitation to overturn Eidson and affirm the district

court on the due process challenge.

B. Fincher as a Third-Party Beneficiary to a Contract

Fincher next asserts that he is entitled to bring suit as

a third-party beneficiary of a contract entered into

between SBHF and its funding agencies, namely HUD. The

district court rejected this claim because Fincher did not

produce the contract nor did Fincher identify any

contract terms or provisions he believes provide him

with the basis for a claim as a third-party beneficiary.
No. 09-1964 11

Fincher claims the district court erred by requiring him

to cite a contract or contractual provision for which he

is a third-party beneficiary. He relies on Lloyd v. Regional

Transportation Authority, 548 F.2d 1277 (7th Cir. 1977) for

the proposition that “the third-party beneficiary status

in federally funded programs stems alone from the existence of administrative rules imposed by the funding

source and the recipient of those funds.” However, at

both the district court level and on appeal, Fincher

did not point to any specific regulations that could stand

in the place of a contract to support his claims. In his

reply brief, Fincher cites to 24 C.F.R. § 880.550(a), which

requires that there exists some contract between HUD and

Section 8 landlords. This argument misses the point.

Fincher still must point to specific regulations (or

contract provisions) that are being violated in this case

to give rise to a cause of action. It is possible that this

absence is intentional because, as pointed out by Eidson,

the regulatory structure does not provide any enforceable rights to individuals applying to live in a specific

Section 8 residence. Without pointing to some contractual provision (or regulation) that grants him these

rights and that SBHF has violated, this claim cannot

stand. The district court correctly granted summary

judgment on this issue.

III. Conclusion

For the above stated reasons, we AFFIRM the district

court’s grant of summary judgment in favor of SBHF.

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