Opinion ID: 3158630
Heading Depth: 3
Heading Rank: 2

Heading: The Risk of Erroneous Deprivation

Text: Turning to the second Mathews inquiry, we must examine whether the procedures provided to the plaintiffs risked erroneous deprivation of their right to stable and renewable Section 8 benefits, as well as the value of any additional safeguards. Plaintiffs here simply request fair notice: simple and unadorned, reasonably comprehensible notice provided at least one year in advance of the change. Thus, to determine the fairness and reliability of the safeguards provided by the Housing Association and the probative value of this requested safeguard we look—as the district court did—to Mullane and its progeny for guidance. “[W]hen notice is a person’s due, process which is a mere gesture is not due process.” Mullane, 339 U.S. at 314. To be constitutionally adequate, notice must be “reasonably calculated, under all the circumstances, to apprise interested parties . . . with due regard for the practicalities and particularities of the case[.]” Id. at 314. The means employed must be “reasonably certain” to “actually inform” the party, id., and in choosing the means, one must take account of the “capacities and circumstances” of the parties to whom the notice is addressed, Goldberg, 397 U.S. at 268–69; Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1, 14 n.15 (1978). The flyer was, without doubt, entirely insufficient to meet this standard. In no respect does it reasonably inform its intended recipients of the changes to the payment standard, the meaning of those changes, or, most important, their effect upon the recipient. Because of this, Section 8 beneficiaries were not meaningfully advised regarding the payment standard and were, accordingly, deprived of their right to a NOZZI V. HACLA 27 one-year term of stable benefits in which to plan for the impending potential hardship. To begin with, the flyer, which essentially mirrored the language of 24 C.F.R. § 982.505(c)(3), is incomprehensible to anyone without a relatively sophisticated understanding of the Voucher Program’s payment calculations. It uses the term “payment standards” six times without ever defining or explaining the term’s meaning. A short and simple explanation, such as “this means that the Housing Authority has reduced the maximum amount it will contribute towards recipients’ rent,” would have provided at least a small measure of clarity. The absence of such a minimal statement is particularly troublesome because, to the ordinary Section 8 beneficiary, the flyer might well suggest that the beneficiary’s expected rent contribution would decrease. See ER 117 (“Effective April 2, 2004 the Housing Authority lowered the payment standards used to determine your portion of the rent.”). Moreover, the flyer which stated that the change to the payment standards was “[e]ffective April 2, 2004” was attached to an RE-38 that showed the tenant’s expected rent contribution for the current year. This could be confusing to many tenants as that number was unaffected by the change and could give the impression that the change to the payment standard would not affect the tenant’s subsidy amount at all—indeed that his subsidy would be higher than the lower payment standard should allow. Further, the flyer in no way explained the potential effect of the change: that it could potentially increase the tenant’s expected rent contribution and decrease his subsidy. Indeed, as the Housing Authority estimated at the time, this change would affect roughly 45% of Section 8 beneficiaries and require them to pay an average of $104 more in rent each 28 NOZZI V. HACLA month. None of this information, however, was included in the flyer. Finally, the flyer was devoid of any name, address, or other information that Section 8 beneficiaries could contact for assistance understanding the flyer’s contents. The totality of these deficiencies makes it is impossible to say that the flyer was reasonably calculated to give notice to the average recipient, or possibly even to the average reasonable jurist.18 The Housing Authority relies upon three actions that it asserts correct this failure inherent on the face of the flyer. None does so, singly or collectively. As discussed, absent circumstantial changes such as an increase in income or change in family composition, the plaintiffs had a legitimate expectation in a one-year term of stable Section 8 benefits. The first of the Housing Authority’s actions that it cites is the four-week notice, which was sent only thirty days before the increase in the tenants’ rent contribution was scheduled to be implemented. This notice could not possibly provide notice a full year in advance of the scheduled change.19 18 Similarly unavailing is the Housing Authority’s reliance on a letter purportedly sent to all beneficiaries on April 19, 2005. The Housing Authority did not assert that this letter is in the record, nor is there any evidence of it being so. It is only mentioned in passing in a discussion in the deposition of one of the Housing Authority’s employees. That employee declared only that it was “similar to” the flyer. For the reasons already discussed, any letter that was simply “similar to” the flyer would be inadequate to provide the necessary notice for the same reasons as the flyer itself. Furthermore, the letter, like the four-week notice discussed in the next paragraph, was sent too late to have been of any use to many beneficiaries. 19 The Housing Authority relies on Willis v. United States, 787 F.2d 1089 (7th Cir. 1986) for the proposition that this Court should consider subsequent steps like the four-week notice. That case is of no relevance. There, a plaintiff claimed that procedures attending the forfeiture of his NOZZI V. HACLA 29 The two other actions consisted of general advice offered prior to the receipt of the flyer: the holding of “public outreach meetings” and the conducting of “training sessions.” Both fell woefully short of advising the Section 8 recipients of the meaning or effect of the change in the payment standards. First, the public outreach meetings cannot serve to render the Housing Authority’s deficient notice consistent with due process. In 2004, the Housing Authority held several meetings about significant changes to the agency’s operations that were open to the public. A number of topics were discussed at these meetings, including the challenges faced by the Housing Authority in implementing the Section 8 program, the use of criminal background and credit checks of Section 8 beneficiaries, the portability of Section 8 benefits across apartments, and the Housing Authority’s efforts to stabilize rent in the area. As the Housing Authority noted, “part of the discussion” at these meetings, among the other topics listed, were changes to the payment standard and the impact on Section 8 beneficiaries. These general meetings, however, are no substitute for notice provided directly to the individual tenants. As Mullane automobile did not comport with the requirements of due process because he only received a form letter containing nothing more than “legal ‘jargon.’” Id. at 1093. The Seventh Circuit held that, while there was “no question that the language in the letter Willis received would not be adequate notice in itself,” that letter in combination with a second letter enclosed within the same envelope adequately informed Willis of the forfeiture proceedings. Id. Unlike Willis, however, the Housing Authority’s four-week notice was not contemporaneous with the flyer, and therefore could not possibly help Section 8 beneficiaries comprehend the legal jargon in the flyer at the time it was to be read. 30 NOZZI V. HACLA established, “[w]here the names and post addresses of those affected . . . are at hand, the reasons disappear for resort to means less likely than the mails to apprise” affected persons. 339 U.S. at 315 (emphasis added). The Housing Authority certainly knew the names and addresses of the Section 8 tenants for whom it was supplying housing benefits, and indeed sent the flyers directly to the tenants, but it failed to provide an understandable notice directly to them at the time it would be relevant to the loss or diminution of their benefits.20 All things considered, therefore, the public outreach meetings were not “reasonably certain to inform those affected” of the change to the payment standard, or the effect of such change. Mullane, 339 U.S. at 315 (emphasis added). Indeed, even construed most favorably to the Housing Authority, the outreach meetings when considered along with all the other factors in this case fail to raise a genuine issue of fact as to whether the steps taken by the Housing Authority provided constitutionally adequate notice of the potential change to the plaintiffs’ property rights. Second, the training sessions held by the Housing Authority, even when considered along with all the other factors relied on by the Authority, also cannot have rendered the flyer “reasonably certain to inform” the average Section 8 beneficiary of the potential reduction in benefits to occur one year later. Federal regulations require that the Housing Authority give certain information to beneficiaries when they 20 The Housing Authority manages the benefits of approximately 45,000 Section 8 beneficiaries, around 45% of whom were estimated to have been adversely affected by the changes to the payment standards. The Housing Authority’s agent did not recall how these beneficiaries were informed of the time and place of these meetings, nor could she recall whether more than 50 people attended the meeting that she attended. NOZZI V. HACLA 31 are first selected to participate in the Voucher Program. 24 C.F.R. § 982.301. According to declarations from Housing Authority employees, the Authority fulfills this requirement by requiring all new beneficiaries to attend a one hour “Session,” during which Housing Authority staff explains to the new beneficiaries how a tenant’s rent contribution is calculated, which includes an explanation of the term “payment standard.” The Housing Authority argues that this explanation served to give sufficient meaning to the contents of the otherwise incomprehensible flyer. For many affected beneficiaries, however, this information was provided years before the flyer was sent. For others, it may have been only a period of up to twelve months. As Mullane makes clear, the fact that the Housing Authority provided tenants with this information “months and perhaps years in advance” of the change to the payment standard does not justify “dispensing with a serious effort to inform [the beneficiaries] personally” of the change to their benefits at a time the information would be directly meaningful. Mullane, 339 U.S. at 318.21 Thus, regardless of 21 Mullane dealt with the question of what notice was sufficient to apprise beneficiaries of a judicial settlement of accounts in a common trust fund. In that case, when the common trust fund was created, the trust company mailed a notice to every person who might be entitled to a share of the fund’s income. That notice included copies of state statutes that explained that a judicial settlement of accounts would periodically occur after the fund’s establishment, and that participants would be notified of the settlement through publications in their local newspaper. The Supreme Court held that this procedure failed to comply with the requirements of due process and that the trustee was required to undertake a “serious effort to inform [those affected] personally of the accounting.” Most relevant to this case, the Supreme Court held that the trustee could not dispense with this effort merely because it had previously provided information to those affected. Instead, the Court held, those affected must 32 NOZZI V. HACLA whether the term “payment standard” was explained to tenants years or months before the flyer was sent, the Housing Authority was required to send a timely notice that provided meaningful information about the change to the payment standard and the change’s potential adverse effect on the tenant’s benefits. Furthermore, the payment standard was far from a primary subject of the Housing Authority’s one-hour introductory Session to the Section 8 program. At that Session, information must be provided to new beneficiaries regarding: where they may lease a unit, which landlords may be willing to lease a unit to them, how long they have to find a unit, how they may request an extension, the advantage of choosing to live in an area that does not have a high concentration of low-income families, how to complete the forms required to request approval of a rental unit, 24 C.F.R. § 982.301, how people with disabilities can request a reasonable accommodation, the amount of utilities that a tenant would be allowed to use, and what steps tenants can take to avoid housing discrimination. In that same one hour period, the Housing Authority also attempted to explain how the Voucher Program worked generally, including the formula used to calculate a tenant’s portion of the rent and the complicated and convoluted role that the payment standards play in that calculation. In light of the overwhelming amount of information and the complex and variegated subject matter involved, any data as to the meaning and effect of payment standards would likely not be retained for a number of years or even a number be informed, at the time of the impending settlement, “that steps were being taken affecting their interests.” Id. at 318 (emphasis added). NOZZI V. HACLA 33 of months by the average Section 8 beneficiary. It certainly could not make the flyer, which was confusing, inadequate, and indeed unintelligible on its face, “reasonably certain” to inform Section 8 beneficiaries of a potential reduction in their subsidies to take place one year after receipt of the flyer. Mullane, 339 U.S. at 318.22 Thus, even when considered along with all the other factors relied on by the Housing Authority, no genuine issue of fact exists with respect to whether the beneficiaries’ attendance at a Session renders the otherwise wholly inadequate flyer compliant with due process. In sum, there can be no genuine dispute of fact as to whether the Housing Authority provided constitutionally adequate notice of the change to the payment standard, or more important, the meaning and effect of the change on the plaintiffs’ Section 8 benefits. The Housing Authority simply failed to do so. The simplest means of ensuring adequate notice was the means requested by the plaintiffs: a simple and clear letter, written in plain English (or Spanish), mailed directly to the plaintiffs one year in advance of the date of the change’s implementation—a letter that contained an understandable explanation of the change and the effect of that change on Section 8 benefits; in other words, a flyer that met the requirements of due process. 22 Although we assume for the purposes of the above analysis that all beneficiaries actually attended one of these required Sessions, we note that some evidence suggests that not all beneficiaries actually did so. Plaintiff Pelaez states, for example, that she did not remember attending a training session, and has no recollection of “ever having the concept of Voucher Payment Standards explained to [her.]” 34 NOZZI V. HACLA A proper notice would have made plaintiffs aware of the seriousness of the Housing Authority’s actions. It might have stated, for example, that the Housing Authority estimated that “approximately 45% of [the] approximately 45,000 Section 8 tenants [would] be adversely affected by the April 2004 [payment standard] decrease, and [would] have to pay an average of $104 more in rent each month if they chose to remain in their current units.” It might also have provided beneficiaries with a number to call in case they had questions about the upcoming change or needed help finding a more affordable apartment in light of the change. Instead, the Housing Authority’s flyer failed even to achieve the minimum that due process requires: an explanation of the change to the payment standard and its likely effect upon tenants—an explanation that could reasonably be understood by the average Section 8 beneficiary. The failure to do so deprived the plaintiffs of the necessary one-year period of stable benefits in which to seek to avoid any impending hardship, and thus, of due process of law.