795 F.3d 578
6th Cir.2015Background
- Plaintiffs Velez and Hatcher are Housing Choice Voucher recipients who initially signed one-year leases with K&D and thereafter entered shorter-term renewals (month-to-month or nine-month) that imposed mandatory short-term fees ranging $35–$100/month.
- K&D characterized the additional charges as separate short-term or month-to-month fees (not labeled "rent") to offset turnover, marketing, and market-risk costs; some landlords instead raise the base monthly rent to cover similar costs.
- Cuyahoga Metropolitan Housing Authority (CMHA) had a policy treating those short-term fees as not part of "rent" for voucher subsidy calculations, so it did not subsidize them; tenants paid the fees out-of-pocket.
- Plaintiffs sued CMHA under 42 U.S.C. § 1983 seeking subsidization/damages; CMHA impleaded K&D for contribution/indemnity if the fees were deemed rent.
- The district court granted summary judgment to CMHA, holding the fees were not rent; the plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether short-term lease fees are "rent" under Section 8 (42 U.S.C. § 1437f) and HUD regs | Fees are consideration paid for use/occupancy and thus constitute "rent" regardless of label | Fees are separate convenience/compensatory charges for short-term risk and not "rent" | Reversed district court: fees are "rent" (part of tenant's periodic payment for occupancy) |
| Whether labeling a charge "fee" rather than "rent" removes it from subsidy calculation | Labels cannot change substance; mandatory occupancy charges are rent | Labeling distinguishes them from "rent" for subsidy purposes | Substance controls; mandatory periodic occupancy charge is rent |
| Whether tenants forfeited subsidy claims by failing to submit fees to CMHA per regulatory procedure | Tenants seek subsidy/damages because fees were treated as non-rent by CMHA policy | CMHA argues tenants forfeited claims by not submitting fees for approval | District court did not decide; remanded for consideration |
| Statute-of-limitations for some of Hatcher’s claims | Plaintiffs did not concede timing bars | CMHA contends some claims are time-barred | Not decided by district court; remanded for determination |
Key Cases Cited
- Desert Palace, Inc. v. Costa, 539 U.S. 90 (statutory interpretation begins with text)
- Conn. Nat’l Bank v. Germain, 503 U.S. 249 (plain-meaning inquiry ends the judicial inquiry)
- Community for Creative Non-Violence v. Reid, 490 U.S. 730 (use of established federal/common-law meanings)
- Ratzlaf v. United States, 510 U.S. 135 (term usage uniformity across statute)
- Atlantic Cleaners & Dyers v. United States, 286 U.S. 427 (uniformity presumption may yield to differing subject-matter)
- M.E. Blatt Co. v. United States, 305 U.S. 267 (definition: rent is fixed sum paid at stated times for use of property)
- Duffy v. Central R. Co. of N.J., 268 U.S. 55 (defining "rentals")
- Wright v. City of Roanoke Redevelopment & Housing Auth., 479 U.S. 418 (deference to HUD interpretations)
- United States v. Pileggi, 192 F.2d 878 (payment required as condition of rental constitutes rent)
- Wuebker v. C.I.R., 205 F.3d 897 (modern appellate definition of rent as consideration for use/occupancy)
- Aujero v. CDA Todco, Inc., 756 F.2d 1374 (definition of rent in later case law)
