Coverdell v. Schroeder et al

Filing 14

ORDER granting 5 Plaintiff's Motion for Temporary Restraining Order. A telephonic hearing on whether a preliminary injunction should issue is set for 3/11/2016 at 9:00 a.m. Signed by Chief Judge Thomas O. Rice. (BF, Judicial Assistant)

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON

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BONNIE COVERDELL,
NO: 4:16-CV-5018-TOR

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Plaintiff,
ORDER GRANTING PLAINTIFF’S
MOTION FOR TEMPORARY
RESTRAINING ORDER

v.
SARAH SCHROEDER, in her official
capacity as Rental Assistance Director
of the Walla Walla Housing Authority,
and WALLA WALLA HOUSING
AUTHORITY, a political subdivision
of the State of Washington,

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Defendants.
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BEFORE THE COURT is Plaintiff’s Emergency Motion for Temporary

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Restraining Order and Preliminary Injunction (ECF No. 5). A telephonic hearing

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was held on this matter February 26, 2016. Tyler W. Graber appeared on behalf of

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Plaintiff. John T. Kugler appeared on behalf of the Defendants (in anticipation

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that he would be retained to represent Defendants). Rick Gehlhaar, a non-attorney

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Director of Claims for HARRP, appeared and represented that he would be
ORDER GRANTING PLAINTIFF’S MOTION FOR TEMPORARY
RESTRAINING ORDER ~ 1

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engaging the services of Mr. Kugler to represent the Defendants. The Court has

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reviewed the briefing and the record and files herein, and is fully informed.

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BACKGROUND

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On February, 22, 2016, Plaintiff filed her Complaint asserting claims under

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42 U.S.C. § 1983 for violations of her due process and Section 8 rights in

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connection to the termination of her housing assistance. ECF No. 1.

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The same day, Plaintiff filed the instant motion seeking a temporary

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restraining order and preliminary injunction directing Defendants to reinstate

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Plaintiff’s federal Section 8 Housing Choice Voucher (“voucher”). ECF No. 5.
FACTS1

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Plaintiff, whose sole source of income is a combination of Supplemental

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Security Income and Social Security Disability Insurance, has resided at her

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current home with her husband since 1998. The home is a rental property located

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in Dayton, Washington and owned by Vivian Eslick McCauley.

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Unless otherwise indicated, the following facts are primarily drawn from

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Plaintiff’s complaint and documents appended to the instant motion, and are

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accepted as true for the purposes of this motion.

ORDER GRANTING PLAINTIFF’S MOTION FOR TEMPORARY
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In 2003, Plaintiff applied for and was issued a federal Section 8 voucher

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through the Walla Walla Housing Authority (“WWHA”).2 Consequently, on

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December 1, 2003, Plaintiff entered into a new lease agreement with Ms. Eslick,

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and on December 19, 2003, Plaintiff, Ms. Eslick, and WWHA entered into a

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Housing Assistance Payment (“HAP”) contract, whereby WWHA agreed to pay a

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portion of Plaintiff’s monthly rent.

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As for the remaining portion, Plaintiff and her husband made an oral

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agreement with Ms. Eslick to act as her property managers and assist in

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maintaining several of her properties, including a vacant lot next to Plaintiff’s

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home and several mobile homes. In exchange for their assistance, in lieu of

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payment Ms. Eslick forgave the portion of rent that was not covered by Plaintiff’s

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voucher.

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In October 2015, Ms. Eslick informed Plaintiff that her son would take over

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all property manager duties. After this conversation, Plaintiff was unsure if she

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was now required to pay Ms. Eslick the portion of her rent not covered by her

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voucher and did not make such payments in October and November 2015.

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WWHA receives federal funding through the Department of Housing and Urban

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Development (“HUD”) to operate and administer the voucher program within

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Columbia County, Washington.

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On November 30, 2015, Defendant Sarah Schroeder mailed Plaintiff a

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Notice of Termination of Assistance Letter (“First Notice”). The First Notice

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informed Plaintiff that effective December 31, 2015, her housing assistance will be

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terminated for violation of the her lease, specifically for “failure to pay your

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portion of the rent to the landlord.” ECF No. 6-3. Attached to the First Notice

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were two complaint letters from Ms. Eslick dated November 12, 2015 and

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November 20, 2015. Plaintiff alleges these letters were the first time she was

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definitively told that her oral agreement with Ms. Eslick was no longer in effect

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and that she was obligated to resume paying rent.3

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On December 3, 2015, Plaintiff requested a fair hearing to dispute her
termination. A hearing was eventually scheduled for January 29, 2016.

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On January 29, 2016, Plaintiff and her counsel appeared and disputed the

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termination at her informal hearing conducted by Hearing Officer Keith Reilly.

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Defendant Schroeder appeared on behalf of WWHA. Hearing Officer Reilly

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instructed the parties that the sole issue before him was whether Plaintiff seriously

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or repeatedly violated her lease. ECF No. 6 at 6. However, at the hearing,

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Defendant Schroeder presented additional reasons for termination, including

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reasons that Plaintiff violated WWHA’s rules and the terms of the voucher.

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Plaintiff paid her portion of rent payments for December 2015 and January 2016.

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Later that day, after the hearing, Defendant Schroeder mailed Plaintiff a new

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Notice of Termination (“Second Notice”), based on the reasons she presented to

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Mr. Reilly at the hearing. Specifically, the notice cited violation of Plaintiff’s

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obligations (1) to supply necessary and accurate information, (2) to not commit

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fraud, bribery or any other corrupt or criminal act in connection with the program,

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and (3) to report change in income and allowances. The letter informed Plaintiff

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that the termination is “for failure to report income, failure to pay designated tenant

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portion of rent to the landlord, and for falsifying information to the Housing

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Authority.” ECF No. 6-7.

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The same day, Defendant Schroeder mailed Plaintiff and her landlord a
Notice of Termination of the HAP contract effective February 29, 2016.
On February 3, 2016, Hearing Officer Reilly issued his decision

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recommending that the termination of Plaintiff’s assistance be upheld. ECF No. 6-

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9. However, the decision only rested its determination on the violations cited in

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the Second Notice and found that Plaintiff did not properly report her income and

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falsified documents when she failed to report her agreement to act as a property

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manager in lieu of rent payments. Id. at 3. The decision acknowledged that the

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reasons specified in the First Notice, failure to pay rent, were no longer at issue

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because Plaintiff paid her portion of the rent for December 2015 and January 2016.

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Id. at 2.
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On February 5, 2016, Defendant Schroeder mailed Plaintiff a letter denying

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her request for a hearing to dispute the allegations contained in the Second Notice.

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Almost two weeks later, on February 18, 2016, Defendant Schroeder mailed

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Plaintiff another letter informing her that because of the unreported income and the

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January and February 2016 rent assistance, Plaintiff under-paid her rent portion for

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a total amount of $5,760. The letter instructed Plaintiff that she must pay the full

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amount to WWHA or enter into a repayment plan to avoid being sent to

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collections.

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Subsequently, on February 22, 2016, Plaintiff received a 20-day notice from

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her landlord to vacate her residence effective March 31, 2016. Plaintiff alleges that

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her lease is being terminated because Defendants terminated the HAP contract and

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that now she faces homelessness. Plaintiff further alleges that due to her limited

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income she is likely unable to pay March rent, and consequently, may be evicted

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prior to March 31, 2016.

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In the instant motion, Plaintiff seeks an immediate order directing
Defendants to reinstate her housing assistance.

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DISCUSSION
1. Motion for a TRO

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Pursuant to Rule 65 of the Federal Rules of Civil Procedure, the Court may

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grant preliminary injunctive relief in order to prevent “immediate and irreparable
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injury.” Fed.R.Civ.P. 65(b). The analysis for granting a temporary restraining order

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is “substantially identical” to that for a preliminary injunction. Stuhlbarg Intern.

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Sales Co., Inc. v. John D. Brush and Co., Inc., 240 F.3d 832, 839 fn. 7 (9th Cir.

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2001). It “is an extraordinary remedy never awarded as of right.” Winter v.

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Natural Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). To obtain this relief, a

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plaintiff must establish that (1) she is “likely to succeed on the merits,” (2) she is

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“likely to suffer irreparable harm in the absence of preliminary relief,” (3) “the

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balance of equities tips in h[er] favor,” and (4) “an injunction is in the public

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interest.” Id. at 20. Plaintiff must satisfy each element. Though, a stronger

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showing of one element may offset a weaker showing of another. Farris v.

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Seabrook, 677 F.3d 858, 864 (9th Cir. 2012) (“We have also articulated an

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alternate formulation of the Winter test, under which serious questions going to the

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merits and a balance of hardships that tips sharply towards the plaintiff can support

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issuance of a preliminary injunction, so long as the plaintiff also shows that there is

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a likelihood of irreparable injury and that the injunction is in the public interest.”

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(internal quotation marks omitted)).

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A. Likelihood of Success on the Merits

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Plaintiff has established that she is likely to succeed on the merits

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concerning certain aspects of her claim. Specifically, her procedural due process

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claim.
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The right to be heard prior to the deprivation of a property interest is the

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fundamental protection of the due process clause in the Fourteenth Amendment.

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Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 313 (1950). The

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Fourteenth Amendment’s guarantee of procedural due process applies when a

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constitutionally protected property or liberty interest is at stake. See Ingraham v.

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Wright, 430 U.S. 651, 672 (1977); Vanelli v. Reynolds Sch. Dist. No. 7, 667 F.2d

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773, 777 (9th Cir. 1982). The Ninth Circuit has held that a low income person has

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a “constitutionally protected ‘property’ interest in Section 8 benefits by virtue of

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her membership in a class of individuals whom the Section 8 program was

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intended to benefit.” Ressler v. Pierce, 692 F.2d 1212, 1215-1216 (9th Cir. 1982).

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Accordingly, Plaintiff has legitimate property interests that require Defendants to

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provide adequate notice before she is deprived of that property interest.

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Here, the submitted evidence indicates Plaintiff did not receive the Second

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Notice of termination until after her informal hearing, yet Hearing Officer Reilly

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only relied on the reasons cited in the Second Notice in his decision to uphold the

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termination of her voucher. In fact, the decision makes no official findings

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whether the lease was violated, the violation cited in the First Notice, and bases its

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determinations on violations Plaintiff was initially notified of during the hearing

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itself and later notified in the Second Notice. Additionally, after the issuance of

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the decision and Second Notice, Defendant Schroeder denied Plaintiff’s request for

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a hearing to dispute the allegations in the Second Notice.

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The Court finds the evidence of record indicates that Defendants terminated

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Plaintiff’s housing assistance voucher without providing adequate notice and a

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meaningful opportunity to dispute the allegations. Accordingly, Plaintiff has

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shown she is likely to succeed on the merits of at least her procedural due process

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claim.

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B. Likelihood of Irreparable Injury

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Plaintiff must also “demonstrate that irreparable injury is likely in the

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absence of an injunction.” Winter, 555 U.S. at 22 (emphasis in original). Plaintiff

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alleges that irreparable injury will occur without injunctive relief, because she “is

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at imminent risk of homelessness” due to the threat of eviction and the difficulty of

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finding safe and affordable housing without housing assistance. ECF No. 5 at 13.

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The imminent threat that Plaintiff will become homeless or evicted

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constitutes irreparable harm. See Park Village Apartment Tenants Ass’n v.

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Mortimer Howard Trust, 636 F.3d 1150, 1159 (9th Cir. 2010) (finding irreparable

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harm absent preliminary relief because tenants face eviction from their rental

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units); see also Roe v. Anderson 966 F. Supp. 977, 986 (E.D. Cal. 1997) (finding

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irreparable injury were plaintiffs could not find affordable housing due to reduction

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in their public benefits). Moreover, the Ninth Circuit has held that “an alleged
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constitutional infringement will often alone constitute irreparable harm.”

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Associated Gen. Contractors of Cal., Inc. v. Coal. for Econ. Equity, 950 F.2d 1401,

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1412 (9th Cir. 1991) (brackets omitted). Here, Plaintiff has shown the likelihood

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of proving a violation of her constitutional rights, providing further support of

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irreparable harm. As a result, the Court finds that Plaintiff is likely to suffer

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irreparable harm in the absence of injunctive relief.

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C. Balancing of the Hardships

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Next, “courts must balance the competing claims of injury and must

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consider the effect on each party of the granting or withholding of the requested

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relief.” Winter, 555 U.S. at 24. Plaintiff faces the threat of eviction and the

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prospect of homelessness. In contrast, the immediate reinstatement of Plaintiff’s

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housing assistance voucher does not appear to cause any serious tangible harm to

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Defendants, and merely continues the status quo until the Court can make a

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determination of the action on the merits. Thus, the Court finds the balance of

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hardships tips in Plaintiff’s favor.

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D. Advancement of the Public Interest

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Finally, [i]n exercising their sound discretion, courts of equity should pay

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particular regard for the public consequences in employing the extraordinary

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remedy of injunction.” Winter, 555 U.S. at 24 (citation omitted). The public

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inquiry primarily addresses impact on non-parties rather than parties. League of
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Wilderness Defenders/Blue Mountains Biodiversity Project v. Connaughton, 752

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F.3d 755, 766 (9th Cir. 2014) (citation omitted). The Court finds the public

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interest is served through the issuance of a TRO in response to a government

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agency depriving a community member of her due process.

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The Court concludes Plaintiff meets all four prongs of the Winter test, and
accordingly, her motion requesting a TRO is granted.

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2. Bond

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Federal Rule of Civil Procedure 65(c) require the posting of a security by

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Plaintiff “in an amount that the court considers proper to pay the costs and

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damages sustained by any party found to have been wrongfully enjoined or

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restrained.” However, the Ninth Circuit has “recognized that Rule 65(c) invests

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the district court with discretion as to the amount of security required, if any.”

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Jorgensen v. Cassiday, 320 F.3d 906, 919 (9th Cir. 2003) (quotation marks

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omitted; emphasis in original); see Barahona-Gomez v. Reno, 167 F.3d 1228, 1237

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(9th Cir. 1999) (waiving bond where plaintiffs were “very poor”). Accordingly,

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because of Plaintiff’s poverty and the extremely short duration of this temporary

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restraining order, at this time, the Court sets the bond amount at zero.

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ACCORDINGLY, IT IS HEREBY ORDERED:

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1. Plaintiff’s Emergency Motion for Temporary Restraining Order (ECF No. 5)

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is GRANTED. That portion of Plaintiff’s Motion, ECF No. 5, seeking a

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preliminary injunction is reserved.

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2. Effective today, February 26, 2016 at 9:30 a.m., Defendants are hereby

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required to reinstate Plaintiff’s federal Section 8 voucher and to continue

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making payments to Plaintiff’s landlord pursuant to the parties’ HAP

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contract. This restriction shall automatically expire at midnight on March

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11, 2016, unless specifically extended by further order of the Court.

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3. A telephonic hearing on whether a preliminary injunction should issue is set

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for March 11, 2016 at 9:00 a.m. The parties are directed to call the Court’s

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conference line at [phone] five (5) minutes prior to the designated

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hearing time. When prompted, enter Access Code 2982935 and Security

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Code 5018. The use of cellular or speakers phones is not permitted for

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telephonic proceedings.

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4. Plaintiff shall arrange for this Order to be personally served upon

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Defendants at the earliest possible time. Petitioner shall file proof of service

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prior to the hearing.

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The District Court Clerk is directed to enter this Order and provide copies to

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counsel.
DATED February 26, 2016.

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THOMAS O. RICE
Chief United States District Judge

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