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Decambre v. Brookline Housing Authority

United States Court of Appeals, First Circuit

June 14, 2016

KIMBERLY P. DECAMBRE, Plaintiff, Appellant, Cross-Appellee,

         Appeals From The United States District Court for The District of Massachusetts Hon. William G. Young, U.S. District Judge

          J. Whitfield Larrabee, with whom Law Offices of J. Whitfield Larrabee, was on brief, for appellant. John Egan, with whom Amy M. McCallen and Rubin & Rudman, LLP, were on brief, for appellees.

          Emily S. Starr, Starr, Vander, Linden, LLP, Ron M. Landsman, and Ron M. Landsman, P.A., on brief for the National Academy of Elder Law Attorneys, Inc., Special Needs Alliance, Inc., and National Housing Law Project, amici curiae in support of appellant.

          Before Kayatta, Stahl, and Barron, Circuit Judges.

          KAYATTA, Circuit Judge.

         Upon learning that disabled tenant Kimberly DeCambre ("DeCambre") was receiving distributions from an irrevocable trust account funded with the proceeds from a series of legal settlements, the Brookline Housing Authority ("the BHA") determined that DeCambre was "over-income" for continued participation in a federal housing assistance program that the BHA administered at the local level. The BHA reaffirmed this determination over DeCambre's internal appeal and did not grant DeCambre's requests that it exclude all, or at least some of, these trust disbursements from its income calculation in reasonable accommodation of her disability. DeCambre then brought suit against the BHA and three of its employees, alleging that the BHA had violated state and federal law by miscalculating her income under the pertinent federal regulations and by engaging in disability-based discrimination. See DeCambre v. Brookline Hous. Auth., 95 F.Supp.3d 35, 36-37 (D. Mass. 2015). The district court voiced reservations about the BHA's income calculation, id. at 49-51, and suggested that the BHA on "remand, " id. at 51, could provide "more thorough and thoughtful analysis, " id. at 52, but nevertheless ruled for the defendants on all counts. DeCambre appealed, and the defendants cross-appealed the remand order. Because we hold that the BHA incorrectly construed federal regulations in calculating DeCambre's income, we reverse the district court's judgment in part, thereby mooting the cross-appeal.

         I. Background

         Section 8 of the United States Housing Act of 1937 ("Housing Act"), added as part of a 1974 amendment, authorizes the Department of Housing and Urban Development ("HUD") to devote federal funds to housing assistance for "the purpose of aiding lower-income families in obtaining a decent place to live and of promoting economically mixed housing." Housing and Community Development Act of 1974, tit. 2, sec. 201, § 8(a), Pub. L. No. 93-383, 88 Stat. 633, 662 (codified as amended at 42 U.S.C. § 1437f(a)). Under the Section 8 Federal Housing Choice Voucher Program ("the Program"), HUD provides housing assistance funding to state and local public housing authorities, which in turn administer the Program at the local level by making rent subsidy payments to landlords on behalf of participating tenants. See 24 C.F.R. § 982.1(a)(1)-(2). The amount of a tenant's monthly subsidy depends on her income. Specifically, the Housing Act provides that a participating tenant's subsidy is generally equal to her total monthly rent obligation minus "30 percent of the monthly adjusted income of the [tenant's] family." 42 U.S.C. § 1437f(o)(2)(A)(i).

         DeCambre has participated in the Program, as locally administered by the BHA, since 2005.[1] As part of her obligation to annually recertify her eligibility for the Program, DeCambre was required each year to submit an Application for Continued Occupancy, which asked her to list, among other things, her assets and her sources of income. In September 2013, DeCambre submitted an application for the year beginning December 1, 2013. DeCambre's application listed among her assets a trust that had been established by a Massachusetts court order in June 2010 to hold DeCambre's proceeds from a series of tort settlements. The trust had been established as an irrevocable disability-based Supplemental Needs Trust ("SNT")--a type of trust that holds funds on behalf of a disabled person, such as DeCambre, and that allows the beneficiary's eligibility for certain Social Security and state health benefits to remain unaffected by the funds held in trust. See 42 U.S.C. § 1396p(d)(4)(A); 130 C.M.R. § 520.008(H). As an SNT, DeCambre's trust assigned a trustee "sole discretion to determine how the property of the trust [would] be spent for the needs of [DeCambre], " who was not herself permitted "voluntarily or involuntarily [to] alienate the income or principal of the trust."

         Upon receiving the September 2013 application that listed DeCambre's SNT among her assets, the BHA calculated based on DeCambre's reported income that, effective December 1, 2013, DeCambre's obligation toward her monthly rent of $1, 560 would be $435, with the BHA subsidizing the remainder. At the same time, the BHA notified DeCambre that it also intended to count disbursements from her SNT toward her income and so requested that she provide the SNT's account statements from the past three years. DeCambre provided the requested information, and in mid-December 2013 the BHA issued a Notice of Rent Adjustment, informing DeCambre that because the BHA was now counting $62, 828.99 in trust disbursements toward DeCambre's 2013 income, [2] DeCambre was "over-income" for the Program and, effective February 1, 2014, would be responsible for paying the entirety of her monthly rent without any subsidy.

         Soon thereafter, DeCambre notified the BHA that she was appealing its rent adjustment on the grounds that her SNT distributions should have been categorically excluded from income under HUD regulations or, alternatively, on the grounds that certain specific distributions should have been excluded under the regulations as payments offsetting "the cost of medical expenses, " 24 C.F.R. § 5.609(c)(4), or as "[t]emporary, nonrecurring or sporadic income, " id. § 5.609(c)(9). While the internal appeal was pending, DeCambre also submitted a Request for Reasonable Accommodation citing state and federal disability discrimination law, asking that SNT distributions used to pay for automobiles, cellular and landline phone services, and veterinary care for her cats be excluded from her income on medical necessity grounds. Following a May 27, 2014, hearing, a BHA hearing officer issued a written opinion upholding the BHA's calculation of DeCambre's income and expressing the view that "the BHA correctly denied Ms. DeCambre's reasonable accommodation request."[3]

         On July 8, 2014, DeCambre sought reconsideration of the hearing officer's decision regarding the BHA's income calculation and also supplemented her previous Request for Reasonable Accommodation, this time requesting that all SNT distributions be excluded from income on the grounds that she needed to maintain her assets in an SNT in order to remain eligible for disability-based Social Security and state health care benefits. The next day, DeCambre filed suit against the BHA and three BHA employees in Massachusetts state court. The operative complaint alleged violation of DeCambre's civil rights under the Housing Act and the Fourteenth Amendment, with relief sought under 42 U.S.C. § 1983 ("Section 1983"); violation of state and federal antidiscrimination law; breach of lease and interference with DeCambre's quiet use and enjoyment of her residence in violation of state law; and entitlement to declaratory, injunctive, and mandamus relief under a smattering of legal and equitable remedial theories.[4]

         After the defendants timely removed the suit to federal court, [5] DeCambre moved for a preliminary injunction enjoining the BHA from including her SNT disbursements in her annual income and requiring the BHA to reinstate her subsidy payments retroactively. At a hearing on this motion, the parties agreed to collapse the preliminary injunction and merits determinations into a single proceeding and to allow the district court to resolve the case as a "case stated"--a posture in which a district court is entitled to decide a case on the merits on the basis of a factual record to which the parties have stipulated, along with any factual inferences the court draws from that record. See TLT Constr. Corp. v. RI, Inc., 484 F.3d 130, 135 n.6 (1st Cir. 2007). After hearing the parties' arguments, the district court issued an opinion denying DeCambre's Fourteenth Amendment and discrimination claims, DeCambre, 95 F.Supp.3d at 46-49, "affirm[ing] the decision of the BHA in [its] income and rent calculations, " id. at 52, and denying DeCambre's motion for a preliminary injunction, id. at 51-52.[6]

         At the same time, the district court pointed to SNT distributions that DeCambre had used to pay for cable, internet, travel, and telephone service as "non-extravagant" expenditures that could have been excluded from income, id. at 50-51; observed that the BHA should have "determine[d] whether DeCambre's cats could be categorized as emotional support animals, " such that SNT distributions used to pay for their veterinary care could have been excluded from income as medical expenses, id. at 51; and found that "the fact that title" to an automobile purchased with SNT funds was "held by [DeCambre's] trust as an asset should preclude [the SNT distribution used to purchase the car] from being counted towards income, " id. In the wake of these observations, the district court remanded DeCambre's case back to the BHA, seemingly for "a more thorough determination of each potentially excludable expense proffered by DeCambre, " id., despite having "affirm[ed] the decision of the BHA in [its] income and rent calculations, " id. at 52. DeCambre timely appealed the judgment against her, and the defendants cross-appealed the district court's remand order. With this background in place, we proceed to our analysis, starting as we must with the threshold question of whether this court has the authority to hear these appeals.

         II. Jurisdiction

         Although neither party contests this court's jurisdiction, "an appellate court has an unflagging obligation to inquire sua sponte into its own jurisdiction, " including its appellate jurisdiction. Watchtower Bible & Tract Soc'y of N.Y., Inc. v. Colombani, 712 F.3d 6, 10 (1st Cir. 2013) (quoting Charlesbank Equity Fund II v. Blinds to Go, Inc., 370 F.3d 151, 156 (1st Cir. 2004)).

         The March 26, 2015, order that the parties have appealed reads, in full:

In accordance with the Court's Memorandum and Order dated March 25, 2015, the motion for preliminary injunction is therefore DENIED, and DeCambre's appeal of her Section 8 eligibility is REMANDED to the [BHA].

While this court has appellate jurisdiction over a denial of a preliminary injunction, see 28 U.S.C. § 1292(a)(1), our ability to assume appellate jurisdiction over a case's merits is typically triggered only by a "final decision[], " id. § 1291. In keeping with our understanding that a final decision is one that "ends the matter in dispute, leaving nothing to be done but the execution of the judgment, " Foxworth v. Maloney, 515 F.3d 1, 3 (1st Cir. 2008), "a district court order that remands to an administrative agency for further proceedings is not [necessarily] considered a 'final decision.'" Global Naps, Inc. v. Mass. Dep't of Telecomms. & Energy, 427 F.3d 34, 41 (1st Cir. 2005).

         Here, however, it is not clear from the district court's opinion exactly what further proceedings the district court anticipated following remand to the BHA. While the opinion appears to find possible error in the BHA's income calculation, see DeCambre, 95 F.Supp.3d at 49-51, and suggests that the BHA may be required to "perform a more thorough determination of each potentially excludable expense proffered by DeCambre, " id. at 51, it at the same time purports to affirm the BHA's income calculation, see id. at 52, and explicitly "upholds the BHA's determination in terminating DeCambre's Section 8 eligibility, " id. at 51.

         Compounding this uncertainty, nearly three months into the pendency of this appeal, the district court purported to reopen the case and enter a retroactive order that reads, in full:

Judgment for the Defendants on all claims asserted against them in the Plaintiff's First Amended Complaint, and the appeal of the Plaintiff's Section 8 eligibility is remanded to the [BHA].

The district court established no basis for its attempt to reassert jurisdiction over a case already embroiled in appellate proceedings, and so the order does not in itself hold legal force.[7] See Griggs v. Provident Consumer Disc. Co., 459 U.S. 56, 58 (1982) (per curiam) ("The filing of a notice of appeal is an event of jurisdictional significance--it confers jurisdiction on the court of appeals and divests the district court of its control over those aspects of the case involved in the appeal."). However, in light of the ambiguity as to the intention behind the original March 26 order, this court understood the district court's later-in-time order as an indication of its wish to provide clarification. Cf. United States v. Maldonado-Rios, 790 F.3d 62, 65 (1st Cir. 2015) (per curiam) (district court order entered after appellate court had already assumed jurisdiction could be treated as a purely indicative ruling). Accordingly, we remanded to permit the district court to do so. See 1st Cir. R. 12.1(b).

         On remand, the district court entered an order clarifying that the March 26 order that forms the subject of this appeal was intended to enter judgment for the defendants on all counts, despite referring only to DeCambre's motion for a preliminary injunction, and that the order's provision for a remand to the BHA "was simply to indicate that the [BHA] had primary jurisdiction over this matter." In other words, the March 26 order denied DeCambre all the relief she sought and required no further proceedings in the BHA.[8] It is therefore a final decision that, if left to stand, would "end[] the matter in dispute, " Foxworth, 515 F.3d at 3, and that therefore triggers this court's appellate jurisdiction over the dispute's merits.

         With our jurisdiction thus established, we turn now to the merits. Because the parties agreed to allow the district court to adjudicate the merits on a case stated basis, we review the district court's legal conclusions de novo and its factual findings and inferences for clear error. See Watson v. Deaconess Waltham Hosp., 298 F.3d 102, 108 (1st Cir. 2002).

         III. The BHA's Calculation of DeCambre's Income

         DeCambre's primary claim on appeal is that the BHA calculated her income incorrectly under the relevant HUD regulations and that the resultant overstatement of her income diminished the amount of her monthly Section 8 subsidy--in this case, to zero.[9] DeCambre contends that this alleged miscalculation violates not only the Housing Act, pursuant to which the regulations at issue were promulgated, but also the Fourteenth Amendment. We address these contentions in reverse order.

         A. DeCambre's Fourteenth Amendment Claims

         DeCambre claimed below that the BHA's allegedly erroneous income calculation deprived her of substantive and procedural due process under the Fourteenth Amendment, and she sought relief under Section 1983. See Gianfrancesco v. Town of Wrentham, 712 F.3d 634, 639 (1st Cir. 2013) (Section 1983 provides cause of action for constitutional due process claims). The district court rejected these constitutional claims on the merits, and DeCambre's opening brief on appeal does not attempt to revive them, grounding DeCambre's claim to Section 1983 relief solely on the BHA's alleged violation of rights conferred by the Housing Act rather than the Constitution. DeCambre has therefore abandoned her Fourteenth Amendment claims. See Juárez v. Select Portfolio Servicing, Inc., 708 F.3d 269, 273 n.3 (1st Cir. 2013).

         B. DeCambre's ...

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