Opinion ID: 3158630
Heading Depth: 2
Heading Rank: 1

Heading: The Contours of the Plaintiffs’ Property Right

Text: The Due Process Clause of the Fourteenth Amendment imposes procedural constraints on governmental decisions that deprive individuals of liberty or property interests. Mathews, 424 U.S. at 332 (1976).15 Thus, the first question hold that granting summary judgment in favor of the defendants was improper for other reasons, and because there is no cause for further discovery on the summary judgment issues following remand, we need not address this contention. 15 The language of Article I § 7 of the California Constitution is “virtually identical” to the Due Process Clause of the United States Constitution, with the caveat that California courts place a higher significance on the dignitary interest inherent in providing proper procedure. Today’s Fresh Start, Inc. v. Los Angeles Cnty. Office of Education, 303 P.3d 1140, 1150 (Cal. 2013). Recognizing this difference, 20 NOZZI V. HACLA in any case in which a violation of procedural due process is alleged is whether the plaintiffs have a protected property or liberty interest and, if so, the extent or scope of that interest. Board of Regents of State Colleges v. Roth, 408 U.S. 564, 569–70 (1972). The property interests that due process protects extend beyond tangible property and include anything to which a plaintiff has a “legitimate claim of entitlement.” Id. at 576–77. A legitimate claim of entitlement is created “and [its] dimensions are defined by existing rules or understandings that stem from an independent source such as state law—rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.” Id. at 577. Further, as we have previously held, plaintiffs have a protected property right in public benefits when, as here, a statute authorizes those benefits and the “implementing regulations” “greatly restrict the discretion” of the people who administer those benefits. See Griffeth v. Detrich, 603 F.2d 118, 121 (9th Cir. 1979). Thus, as we held in Nozzi I, the plaintiffs here have a property interest in Section 8 benefits to which the procedural protections of the due process clause apply. 425 F. App’x at 541 (“Section 8 participants have a property interest in housing benefits[.]”); Ressler v. Pierce, 692 F.2d 1212, 1215–16 (9th Cir. 1982) (“In addition, [the plaintiff] has a constitutionally protected ‘property’ interest in Section 8 benefits by virtue of her membership in a class of individuals whom the Section 8 program was intended to benefit.”); see also Roth, 408 U.S. at 576 (“[A] person receiving . . . benefits we nevertheless address the plaintiffs’ federal and state due process claims together, as it is unnecessary to take the additional factor into account in this case. NOZZI V. HACLA 21 under statutory and administrative standards defining eligibility for them has an interest in continued receipt of those benefits that is safeguarded by procedural due process.”); Holbrook v. Pitt, 643 F.2d 1261, 1278 (7th Cir. 1981) (“Courts have held in a variety of circumstances that certified tenants in Section 8 programs have protectable property interests under the due process clause.”). The “dimensions” of the property interest here “are defined by existing rules . . . or understandings that secure certain benefits”—in this case, the Voucher Program statute and regulations. See Roth, 408 U.S. at 577. These regulations limit the Housing Authority’s discretion to alter tenants’ subsidies through changes to the payment standard unless tenants have been advised of the change and notified that the reduced standard will not be implemented for at least a full year afterwards. See 24 C.F.R. § 982.505(c)(3); see also Nozzi I, 425 F. App’x at 541–42 (“[T]he Section 8 regulations ‘closely circumscribe’ [the Housing Authority’s] discretion—by prohibiting [it] from immediately implementing a reduced [payment standard] and requiring [it] to inform participants that a reduced [standard] will be implemented[.]”). This mandatory one-year postponement is designed to serve as an “equitable . . . safeguard[] against reductions in subsidy.” Section 8 Housing Choice Voucher Program; Expansion of Payment Standard Protection, 65 Fed. Reg. 42508-01, 42508 (July 10, 2000). Thus, plaintiffs’ property right extends beyond Section 8 benefits generally. The protected property right is in housing benefits that continue in existence for a period of at least one year after the beneficiary is advised that his benefits may be decreased by a change to the payment standard. The tenant can budget for annual leases, plan for any drastic changes, 22 NOZZI V. HACLA and take steps to avoid his family’s eviction, secure in the knowledge that his benefits will not be adversely affected during the extended period his property rights remain in effect. The district court and the Housing Authority heavily rely on Rosas v. McMahon, 945 F.2d 1469 (9th Cir. 1991) to support the argument that the plaintiffs do not have a protected property interest, but that case is inapplicable. In Rosas, the local agency provided notice of a change to welfare benefits 10 days before its implementation, as required by a regulation. Id. at 1472. The plaintiffs insisted that they were entitled to an earlier notice about which the statutes and regulations said nothing. Id. at 1474. This court rejected the plaintiffs’ claim and held that welfare recipients had no right to notice of the “passage of statutes” which reduced their benefits or to a “grace period” before benefits were reduced. Id. at 1473–74. Rosas, however, relied on the fact that there was no “preexisting regulation intended to forestall the implementation of a congressionally mandated program change until [program participants] were provided with notice of that change.” Id. at 1475. Where, as here, a pre-existing regulation does forestall the implementation of a reduction in benefits for a one year period, it is the plaintiffs’ property interest in that term of benefits that procedural due process protects.16 Accordingly, the question in this case is not 16 Similarly, as the prior panel noted, the district court and the Housing Authority’s reliance on Atkins v. Parker, 472 U.S. 115 (1985) is misplaced. In that case, Congress changed the eligibility standards required for benefits under the Food Stamp Act. There, the Court held that “Congress has plenary power to define the scope and duration of the NOZZI V. HACLA 23 whether the plaintiffs have an interest protected by due process—it is clear that they do—but rather “[w]hat process is due to protect plaintiffs’ well-settled property interest.” Nozzi, 425 F. App’x at 542.