114 F. Supp. 3d 663
N.D. Ill.2015Background
- Pickett participated in HACC’s Housing Choice Voucher Program since 2003 and sought larger housing after her family grew; she submitted multiple Requests for Tenancy Approval (RFTAs) in 2012–2013.
- Two proposed units (Richton Park and Country Club Hills) passed HACC housing inspections but failed to result in a signed lease/HAP contract: landlords withdrew or would not sign due to foreclosure or impatience. A third owner rented to a non-voucher tenant days before Pickett’s voucher expired.
- HACC granted multiple short extensions but on August 30, 2013 denied further extension and issued a termination notice for Pickett’s voucher; Pickett timely requested a hearing in September 2013.
- HACC denied the request for an informal hearing in a November 15, 2013 letter stating Pickett had five extensions and did not locate a unit before expiration. HACC relied on a regulation that it need not provide hearings for denial of an extension or suspension.
- Pickett sued under 42 U.S.C. § 1983 (due process) and the Housing Act claiming (1) she was deprived of a property interest without a hearing and (2) HACC abused its discretion in terminating her; she moved for a preliminary injunction seeking a hearing and immediate voucher relief. The court held a hearing and considered limited evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to a post-termination due process hearing | Pickett had a property interest in continued voucher participation and was entitled to a hearing to challenge termination based on HACC’s factual determinations | HACC: voucher expired so no post-termination hearing required; 24 C.F.R. § 982.555(b)(4) permits denying hearings for extension/suspension denials | Court: Denied dismissal; Pickett plausibly alleged entitlement to a hearing because termination was effectively for failure to act and implicated § 982.555(a)(iv) (termination for participant’s action/failure), so due process hearing required |
| Validity of termination under the Housing Act (arbitrary/capricious) | HACC’s termination was arbitrary: Pickett alleges she submitted units that passed inspection and HACC may have failed to suspend/toll voucher during processing | HACC: exercised discretionary authority to deny extensions under 24 C.F.R. § 982.303; termination was lawful | Court: Denied dismissal as to this claim — Pickett stated a plausible claim that HACC acted arbitrarily and capriciously because its stated factual basis appears incorrect and may have failed to follow its procedures |
| Whether HACC regulation precludes judicially required hearing | HACC: HUD regulation exempts PHA from providing hearing on denial of an extension/suspension | Pickett: HACC characterized the termination as a failure to act, which falls under categories requiring a hearing; regulation does not authorize denying a hearing where termination is effectively for participant failure | Court: Regulation does not insulate HACC here; its own letter treated termination as for failure to act, triggering § 982.555(a)(iv) and due process protections |
| Preliminary injunction — relief sought (hearing and immediate voucher) | Need for urgent relief: irreparable harm (imminent homelessness, family separation) and likelihood of success on merits for hearing; only hearing could restore participant status given closed waiting list | HACC offered no evidence opposing injunction at hearing | Court: Granted injunction ordering HACC to provide a due process hearing; denied immediate reissuance of a voucher pending hearing/merits |
Key Cases Cited
- Perry v. Sindermann, 408 U.S. 593 (Sup. Ct. 1972) (a property-like expectancy entitles a person to a hearing to challenge nonrenewal/termination)
- Simmons v. Drew, 716 F.2d 1160 (7th Cir. 1983) (voucher/certificate holders have a protected program-tenure interest)
- Khan v. Bland, 630 F.3d 519 (7th Cir. 2010) (procedural due process requires protected interest plus denial of required process)
- Fincher v. South Bend Heritage, 606 F.3d 331 (7th Cir. 2010) (hearing before a neutral decisionmaker can remedy erroneous termination determinations)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (Sup. Ct. 1983) (agency action must not be arbitrary or capricious and must show rational connection between facts and decision)
- Ezell v. City of Chicago, 651 F.3d 684 (7th Cir. 2011) (standard for preliminary injunction: irreparable harm and likelihood of success on merits)