PHA Properly Denied Section 8 Voucher

Facts: A Section 8 resident sued the owner and the local PHA for allegedly unlawfully evicting her from an apartment in retaliation for filing a small claims lawsuit against the owner. The resident asked a federal district court to reverse the eviction and require the PHA to reinstate her Section 8 voucher.

With the last lease between the resident and the owner, the owner offered $150 in incentives if the resident signed and returned a renewal form by a certain date. The resident did so, after making hand-written changes to the form and signing it. Although her proposed changes would have extended the end time and date of the lease by only one day, the owner didn’t agree to the changes. Instead, the owner indicated to the resident that it wouldn’t renew the lease until the apartment passed inspection by the PHA, which is a requirement for the resident to continue participating in the PHA’s Section 8 rent assistance program.

Although the apartment didn’t pass the initial inspection, it did pass a later re-inspection. Afterwards, the owner sent the resident a letter stating that it would renew the lease effective Nov. 1, 2010, on a month-to-month basis, but only if the resident signed and returned an enclosed renewal form by Nov. 1, 2010. The owner also informed the resident that if she signed the renewal form, it would still give her the $150 in incentives.

At some point in August 2010, rather than signing that form, the resident filed a small claims action against the owner based on an alleged breach of contract and entitlement to the $150 in incentives the owner had offered. After a court commissioner dismissed that case, the resident requested a trial before the circuit court. While her request for a trial was pending, the owner informed her that if she didn’t sign the renewal form, she would become a holdover tenant. Even then, the owner advised her that she could still sign the renewal form and receive the $150. Again, the resident chose not to sign the form.

When the resident’s existing lease expired, she still tried to pay rent for the month of November. At that point, the owner decided to start the eviction process. The court entered a judgment of eviction. The resident appealed, and the state appeals court upheld the eviction. The court ruled that the parties never entered into a new lease. The court also rejected the claim that the owner retaliated against her for filing the small claims action, apparently because the state circuit court found that the evidence at the hearing didn’t suggest the eviction was retaliatory.

At some point during or after these proceedings, the PHA formally terminated the resident’s Section 8 voucher. The resident alleged that in October 2010, she received a copy of a communication between the owner and the PHA in which the owner claimed that the resident “refused to sign a lease,” a prerequisite for receiving the Section 8 voucher. At some point thereafter, the PHA held an informal hearing related to the resident’s participation in the Section 8 voucher program. The resident alleged that she received notice of the hearing via email and not the U.S. mail.

Ruling: A Wisconsin district court dismissed the resident’s claims.

Reasoning: The court dismissed the resident’s unlawful eviction claim because a federal court doesn’t have jurisdiction where a party, dissatisfied with a result in state court, sues in federal court seeking to set aside the state court judgment and requesting a remedy for an injury caused by that judgment. If the injury the plaintiff complains of resulted from a state court judgment, then lower federal courts cannot hear the claim.

However, the court could review the resident’s challenge to the denial of a Section 8 voucher. The court found that the facts submitted by the resident show that the PHA denied the voucher in a manner consistent with due process requirements. The resident claimed that the owner informed the PHA that it refused to sign a new lease, which indicates that the resident received notice of the reason for termination. Second, the allegations that the resident received notice of the informal hearing via email suggests both that there was an opportunity for informal review and notice of the ability to request an informal hearing. In addition, the resident didn’t deny actually receiving this email. Finally, the court found that the complaint includes no facts suggesting that the resident wasn’t given the opportunity to review documents and be present at the hearing.

• Goodavage v. Fiduciary Real Estate Dev., May 2018