Coe v. Housing Authority of the City of Milwaukee

Filing 50

DECISION AND ORDER signed by Judge Lynn Adelman on 2/1/16 granting 20 Defendants Motion for Summary Judgment. The Clerk shall enter judgment accordingly. Further ordering 25 Motion for Summary Judgment is denied and 44 Motion to Dismiss is denied. (cc: all counsel) (dm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
_____________________________________________________________________
TAKIA COE,
Plaintiff,
v.

Case No. 14-cv-0022

HOUSING AUTHORITY OF THE CITY
OF MILWAUKEE,
Defendant.
_____________________________________________________________________
DECISION AND ORDER
Plaintiff Takia Coe brings this Section 1983 action and a common law claim for
certiorari review alleging that the decision of the defendant, the Housing Authority of the
City of Milwaukee (“HACM”), to terminate her federal rent assistance benefits was unlawful.
Before me now are a motion to dismiss for lack of standing and cross motions for summary
judgment.
I. Background
Plaintiff has participated in the federal rent assistance program, commonly referred
to as Section 8, for approximately 15 years. Local housing authorities administer the
Section 8 program. See 24 C.F.R. § 982.51(a). Defendant administers the program in
Milwaukee. In 2009 and 2010, defendant discovered that plaintiff had earned income from
sources she had not disclosed and investigated whether she had reported all of her income
as required. In 2010, defendant received a report that an unauthorized person was living
with plaintiff and investigated that allegation. In April 2010, defendant’s employee,
Jacquelyn Loberg, met with plaintiff to discuss plaintiff’s compliance with program rules.
Soon after, defendant issued a notice to plaintiff questioning her continued eligibility for the

Section 8 program and offering plaintiff an informal hearing. Pursuant to plaintiff’s request,
defendant held a hearing, and on September 2, 2010 the hearing examiner issued a
written decision terminating plaintiff from the program.
Plaintiff challenged her termination, and a magistrate judge vacated it, finding that
defendant’s notice to plaintiff was deficient. See Coe. v. Hous. Auth. of the City of
Milwaukee, No. 10-CV-915 (E.D. Wis.). Subsequently, defendant held another hearing,
and on November 21, 2013, the hearing examiner again terminated plaintiff from the
Section 8 program, concluding (1) that plaintiff had violated defendant’s rule that
participants must report income changes within 15 business days and (2) that plaintiff had
failed to report several unauthorized household members and that this amounted to fraud.
II. Discussion
A. Standing
I asked the parties to brief an issue raised but not developed by defendant, whether
plaintiff has standing to bring her § 1983 claims inasmuch as she moved to West Allis in
2013 and “ported”1 her Section 8 benefits to West Allis’s program. To have standing, a
plaintiff must allege (1) a “personal injury” or injury in fact, (2) that the injury is “fairly
traceable to the defendant’s allegedly unlawful conduct,” and (3) that it is “likely to be
redressed by the requested relief.” Allen v. Wright, 468 U.S. 737, 751 (1984). An injury in
fact is one “that is (a) concrete and particularized and (b) actual or imminent, not
conjectural or hypothetical.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc.,

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Section 8 vouchers are “portable,” meaning a participant approved for rent
assistance by one local housing authority may use the voucher in another location. See
42 U.S.C. § 1437f(r)(1); 24 C.F.R. § 982.353(b).
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528 U.S. 167, 180–81 (2000) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61
(1992)).
Plaintiff asserts two injuries which she argues are sufficient to establish standing:
(1) that her termination of benefits will likely prevent her from moving to another jurisdiction
because local housing authorities may deny her Section 8 assistance based on such
termination, and (2) that the termination prevents her from obtaining assistance in
Milwaukee. Defendant argues that these injuries are speculative because plaintiff lives in
West Allis and has not shown that she intends to move to Milwaukee or elsewhere or that
another housing authority would deny her benefits. Defendant also argues that plaintiff’s
injuries are not redressable because relief will not affect plaintiff’s current housing situation.
I conclude that plaintiff has an actual, ongoing injury that is sufficient to confer
standing. This is so because the termination has caused plaintiff harm; it affected her
housing options, and it placed a “black mark” on her in the Section 8 housing context
which, if not removed, is likely to have ongoing, adverse effects. See O’Shea v. Littleton,
414 U.S. 488, 495–96 (1974) (noting that a plaintiff who shows “continuing, present
adverse affects” has an injury in fact). This injury is concrete; it is also particularized
because it specifically affected plaintiff; and it is actual and non-speculative because if not
reversed, will be attached to her going forward. Such an injury is similar to reputational
harm, which is a cognizable injury in fact. Parsons v. U.S. Dep’t of Justice, 801 F.3d 701,
711 (6th Cir. 2015) (“Reputational injury . . . is sufficient to establish an injury-in-fact.”); Nat’l
Collegiate Athletic Ass’n v. Governor of N.J, 730 F.3d 208, 220 (3d Cir. 2013) (“As a matter
of law, reputational harm is a cognizable injury in fact.”); see also Lutheran Church-

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Missouri Synod v. F.C.C., 141 F.3d 344, 349 (D.C. Cir. 1998) (finding that a church had
standing to challenge the Federal Communication Commission’s (“FCC”) administrative
decision that the church violated equal employment opportunity regulations because the
FCC’s decision constituted “a black mark on the [c]hurch’s previously spotless licensing
record and could affect its chances of license renewal down the road”).
Lujan is not to the contrary. It distinguishes cases where “a plaintiff’s asserted injury
arises from the government’s allegedly unlawful regulation (or lack thereof) of someone
else,” and situations like the present case where “the plaintiff is himself an object of the
action (or foregone action) at issue.” 504 U.S. at 561–62. In the former category of cases,
“much more is needed” in order to establish an injury in fact, whereas in the latter, “there
is ordinarily little question that the action or inaction has caused him injury, and that a
judgment preventing or requiring the action will redress it.” Id. In the present case, plaintiff
has a personal stake in the outcome, and this stake is sufficient “to assure that concrete
adverseness” between the parties exists. Flast v. Cohen, 392 U.S. 83, 99 (1968). Further,
plaintiff’s injury was caused by defendant’s termination decision and is redressable by the
relief sought, reversal of such decision. If plaintiff achieves relief, the effect of the
termination decision on her housing opportunities will be removed.
B. Merits
I may grant summary judgment where there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). In
determining whether summary judgment is appropriate, I consider all evidence submitted
by the parties and draw all inferences in favor of the non-moving party. Anderson v. Liberty

4

Lobby, Inc., 477 U.S. 242, 255 (1986).
1.

§ 1983 Claims

Plaintiff alleges that defendant violated federal law by terminating her Section 8
benefits for unauthorized reasons and violated due process by providing her with
inadequate notice. Defendant is a municipality and thus may be found liable under 42
U.S.C. § 1983 only if it deprived plaintiff of rights as the result of its enforcement of a
municipal policy or custom. Monell v. Dep’t of Soc. Servs., 436 U.S. 658, 694–95 (1978).
I first address plaintiff’s claim that defendant terminated her benefits for reasons not
authorized by federal law. Defendant is a public housing agency with the authority to
administer the Section 8 program. 24 C.F.R. §§ 982.51, 982.52. Public housing agencies
have “the maximum amount of responsibility and flexibility in program administration,” 42
U.S.C. § 1437(a)(1)(c), and must establish a plan which outlines local administrative
policies, 24 C.F.R. § 982.54. Defendant must also conduct annual reexaminations of active
participants’ family income and household composition and may conduct interim
reexaminations at any time. § 982.516(a)-(b). Defendant’s administrative plan must provide
procedures for conducting interim reexaminations of family income and household
composition, § 982.54(d)(18), and “policies prescribing when and under what conditions
the family must report a change in family income or composition.” § 982.516(c).
Section 18.2 of defendant’s administrative plan entitled “Interim Reexaminations”
requires participants to:
report any change in income . . . within fifteen (15) business days from the date the
change occurs. Failure to do so may result in the family having to pay moneys back
to [HACM] and/or the family’s termination from the program. [HACM] will take timely
action to process the interim reexamination and recalculate the family share of rent.
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Families are also required to report changes in family composition to [HACM]
between regular reexaminations. These changes will trigger an interim
reexamination . . . .
LaRosa Aff. Ex. 1 at 68 (ECF No. 23-1).2
Defendant may terminate a participant’s benefits for various reasons, including fraud
in connection with the Section 8 program, 24 C.F.R. § 982.552(c)(1)(iv), or a violation of
a family obligation, § 982.552(c)(1)(i) such as the obligation to “supply any information
requested by [defendant] or HUD for use in a regularly scheduled reexamination or interim
reexamination of family income and composition,” § 982.551(b)(2).
As stated, defendant terminated plaintiff’s benefits both for violating the 15-day
income reporting rule and for failing to report unauthorized household members. Plaintiff
contends that neither of these grounds was authorized by federal law. Plaintiff argues that
defendant lacked authority to terminate her benefits for violation of a rule established by
a local housing agency that was not part of a reexamination. However, as stated, federal
law conferred on defendant the responsibility to develop procedures for conducting interim
reexaminations, and defendant had broad flexibility in exercising this responsibility.
Additionally, defendant’s administrative plan makes clear that the 15-day reporting rule is
part of the interim reexamination process. The plan lists the rule under the section entitled
“Interim Reexamination,” and the rule unequivocally states that a change in income triggers

2

Plaintiff contends that in some HACM documents, the 15-day income reporting
rule is stated as a “two week” rule and in others as a “15 business day” rule. Plaintiff
also contends that in some documents the rule requires reporting of an increase in
income and in others a change. For purposes of the present case, these discrepancies
are immaterial because the hearing examiner applied the most liberal construction, and
plaintiff failed to comply with any version of the rule.
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an interim reexamination. LaRosa Aff. Ex. 1 at 68 (ECF No. 23-1) (after a report of a
change in income, defendant “will take timely action to process the interim reexamination
and recalculate the family share of rent”). Further, plaintiff concedes that failure to report
information in conjunction with an interim reexamination constitutes a failure to comply with
a family obligation under both federal regulations, see 24 C.F.R. § 982.551(b)(2), and
defendant’s administrative plan, see LaRosa Aff. Ex. 1 at 11–12 (ECF No. 23-1). Thus,
plaintiff’s failure to report a change in income within 15 business days of the change
violated her obligation to supply information required by defendant for use in an interim
reexamination and was a permissible ground for termination of her benefits under 24
C.F.R. § 982.552(c)(1)(i). Thus, when plaintiff violated the 15-day income reporting rule
defendant was authorized to terminate her benefits, and defendant is entitled to summary
judgment on this claim.
Because I have concluded that one of defendant’s reasons for its termination
decision complied with federal law, I need not address plaintiff’s other arguments because
even if another of defendant’s reasons for termination violated federal law, plaintiff could
show no injury given the fact that defendant had at least one lawful reason to terminate.
However, to be thorough, I will also address defendant’s second ground for terminating
plaintiff’s benefits, plaintiff’s failure to report additional household members, which I
conclude was also authorized. Plaintiff assails the adequacy of the examiner’s finding of
fraud, but this does not undermine the examiner’s conclusion that plaintiff “failed to report
changes in her family composition,” Hr’g R. Part 2 at 109 (ECF No. 11-2). The examiner
explicitly found that plaintiff failed to report household composition changes, and this alone
was a permissible reason to terminate plaintiff’s benefits. As stated, defendant was
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authorized to terminate plaintiff for failure to comply with a family obligation, and one such
obligation was to supply the information requested in connection with an interim
reexamination. Under the interim reexamination section of its plan, defendant required
participants to report changes in family composition and explicitly stated that such
“changes will trigger an interim reexamination.” The plan specifically provided as an
example of when reporting was required the situation where “[a] member has been added
to the family.” LaRosa Aff. Ex. 1 at 68–69 (ECF No. 23-1).3 Thus, regardless of whether
the fraud finding was justified, the examiner’s determination that plaintiff failed to report a
change in household composition was a permissible ground, in and of itself, for terminating
plaintiff’s benefits. Thus, defendant is also entitled to summary judgment on this claim.
Plaintiff also claims that defendant violated her due process rights by terminating
her benefits for reasons not stated in the notice she received. Plaintiff, however, concedes
that she has no evidence that this alleged deficiency was part of a custom or practice as
required by Monell. Thus, defendant is entitled to summary judgment on this claim as well.
2. Certiorari Review
Plaintiff also asks me to review the examiner’s termination decision under state
common law certiorari review. Such review “test[s] the validity of a decision rendered by
. . . an administrative agency.” Ottman v. Town of Primrose, 332 Wis. 2d 3, 22 (2011). On
certiorari, I review the administrative record and may not consider additional evidence. Id.
I determine only whether defendant (1) kept within its jurisdiction; (2) proceeded on a
correct theory of law; (3) terminated plaintiff’s benefits in a manner that was oppressive,
3

Notice of this obligation was also included in other documents including
plaintiff’s housing voucher.
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or unreasonable; and (4) based the decision on evidence reasonably used to make such
a determination. Id. at 22–23. I may not weigh the evidence or determine the credibility of
the witnesses, State ex rel. Harris v. Annuity & Pension Bd., 87 Wis. 2d 646, 652 (1979),
and I may not substitute my discretion for the examiner’s, State ex rel. Ziervogel v.
Washington Cty. Bd. of Adjustment, 269 Wis. 2d 549, 559 (2004). Finally, I must uphold
a decision if it is supported by substantial evidence. CBS, Inc. v. Labor & Indus. Review
Comm’n, 219 Wis. 2d 564, 568 n.4 (1998).
Plaintiff argues that terminating her benefits was unlawful for a number of reasons.
I address each in turn. First, plaintiff argues that her benefits were terminated based on
unauthorized grounds. I reject this argument for the same reasons I rejected it in the §
1983 context. Plaintiff’s violation of the 15-day reporting rule constituted a failure to supply
information in connection with an interim reexamination and was therefore a violation of
a family obligation, which is a permissible ground for termination. Plaintiff makes the
related argument that the examiner failed to consider mitigating factors and the
circumstances of her family. This contention also fails. The examiner considered mitigating
circumstances, such as the temporary nature of plaintiff’s unreported income and the fact
that plaintiff did not hide the increase in income at her annual reexamination.
Plaintiff also argues that her benefits should not have been terminated on the
ground that she failed to report changes in household composition because she did not
receive notice as to what specific rule she violated. Defendant was obligated to provide
plaintiff with “a brief statement of reasons for the decision,” 24 C.F.R. § 982.555(c)(2)(i),
including specifying “who had violated what specific obligation and when the violation

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occurred” and offering “a rudimentary description of the incidents giving rise to the
charges.” Driver v. Hous. Auth. of Racine Cty., 289 Wis. 2d 727, 732 (Ct. App. 2006).
In the present case, defendant satisfied this requirement. See Hr’g R. Part 1 at 5
(ECF No. 11) (“[Y]ou failed to follow the Program’s procedures regarding adding new
household members to your lease.”). The notice specifies the charged violations, quoting
24 C.F.R. § 982.552(c)(1)(iv)’s grant of authority to terminate participation based on fraud,
§ 982.551(b)(2)’s requirement that a participant supply information requested in connection
with an interim reexamination, as well as a participant’s obligation to report changes in
household composition. Hr’g R. Part 1 at 3 (ECF No. 11). The notice also contains detailed
allegations, including dates, a summary of defendant’s evidence, and the names of the
alleged unauthorized household members. Id. at 5. The notice states:
you failed to follow the Program’s procedures regarding adding new household
members to your lease. You had multiple unauthorized household members that
were residing in the unit that did not undergo a background check and did not have
their income included in the monthly tenant portion that is based on household
income. You also created an unsafe environment by allowing numerous people to
reside in a unit that was too small for your actual household size.
Id. This was sufficient to put plaintiff on notice of the reasons defendant sought to
terminate her participation in the Section 8 program.
Plaintiff also argues that the examiner’s decision that she had unauthorized
household members living with her was not based on substantial evidence. I disagree. The
examiner found that plaintiff and her witnesses lacked credibility and credited testimony
that plaintiff had previously acknowledged the presence of unauthorized household
members. As discussed, I do not decide questions of credibility, nor do I weigh the
evidence.
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Plaintiff also argues that the examiner lacked substantial evidence to find that her
failure to report changes in household composition was fraudulent. As discussed, I need
not determine whether the examiner’s fraud finding was supported because even without
the fraud finding, the examiner’s finding that plaintiff failed to report household composition
changes, in and of itself, was a sufficient reason to terminate.
Even if the examiner’s decision regarding household composition was flawed in
some respect, any error was harmless. Defendant needed only one legitimate reason to
terminate plaintiff’s benefits and plaintiff’s violation of the 15-day reporting rule was such
a reason. See Step Now Citizens Grp. v. Town of Utica Planning & Zoning Comm., 264
Wis. 2d 662 (Ct. App. 2003) (denying a petition for certiorari review where the record
indicated that no one was prejudiced by the error); State ex rel. Lomax v. Leik, 154 Wis.
2d 735 (Ct. App. 1990) (applying the same common law certiorari standard and noting that
a showing harmless error can defeat a certiorari review claim); see also Clark v. Waupaca
Cty. Bd. of Adjustment, 186 Wis. 2d 300, 304 (Ct. App. 1994) (concluding that if a court
concludes that any of an administrative agency’s reasons for taking an action passes
certiorari review, it should affirm even if other reasons were in error).
Finally, plaintiff argues that the examiner’s decision should be overturned because
it was untimely. 24 C.F.R. § 982.555(e)(6) requires defendant to provide its written
termination decision “promptly” after an informal hearing. Defendant’s administrative plan
requires issuance of the decision “within 14 calendar days from the date of the hearing.”
LaRosa Aff. Ex. 1 at 86 (ECF No. 23-1). In the present case, the hearing concluded on
January 10, 2013, and the examiner stated, “It’s my understanding that I have to issue a
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written decision within 14 days.” Hr’g Tr. at 329 (ECF No. 13). Plaintiff’s attorney
responded, “We can wait, and I’d like the opportunity to submit a written brief . . . to cover
the federal regulations and how I think the Housing Authority has a series of policies that
aren’t consistent with federal regulations.” Id. at 329–30. The final brief on the issue was
submitted April 8, 2013, and the examiner issued his decision on November 21, 2013.
I conclude that when plaintiff’s counsel stated “we can wait” in response to the
examiner’s mention of the 14-day rule, plaintiff waived her right to have a written decision
within 14 days of the informal hearing. Plaintiff requested the delay so she could submit
a brief with supplemental legal argument for the examiner to consider. Further, plaintiff was
not prejudiced by the delay because she continued to receive her rent subsidy.
For the foregoing reasons, I decline to overturn the examiner’s decision and grant
summary judgment on plaintiff’s certiorari claim in favor of defendants.
II. Conclusion
THEREFORE, IT IS ORDERED that defendant’s motion for summary judgment
(ECF No. 20) is GRANTED. The Clerk shall enter judgment accordingly.
IT IS FURTHER ORDERED that plaintiff’s motion for summary judgment (ECF No.
25) is DENIED.
IT IS FURTHER ORDERED that defendant’s motion to dismiss (ECF No. 44) is
DENIED.

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Dated at Milwaukee, Wisconsin, this 1st day of February, 2016.

s/ Lynn Adelman
__________________________
LYNN ADELMAN
District Judge

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