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McDonell v. Harford County Housing Agency

Court of Appeals of Maryland

January 22, 2019


          Argued: October 3, 2018

          Circuit Court for Harford County Case No.: 12-C-16-000263

          Barbera, C.J. Greene [*] Adkins McDonald Watts Hotten Getty, JJ.


          ADKINS, J.

         To paraphrase Justice William Brennan in the landmark decision Goldberg v. Kelly, 397 U.S. 254, 265 (1970), public assistance programs are no mere charity. They are the very means by which we live out our creed to "promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity." U.S. Const. pmbl. To discontinue such aid is no small matter and has consequences well beyond the single individual for whom the assistance has been terminated. In this case, we evaluate housing voucher termination procedures and consider whether they are both adequately protective of public housing voucher recipients and limitedly burdensome on public housing officials.

         Today we resolve two questions:[1] (1) whether Respondent Harford County Housing Agency ("HCHA") terminated Petitioner Karen McDonell's voucher without affording appropriate procedures under Maryland law and the United States Constitution; and (2) whether the HCHA's decision to terminate McDonell's voucher was supported by substantial evidence in the record.

         We shall hold that the HCHA complied with procedural due process, that Maryland law required no additional process, and that the record contained substantial evidence.


         Factual Overview and Procedural Posture

         On November 4, 2011, Karen McDonell was enrolled in the Housing Choice Voucher Program ("HCVP" or "Voucher Program," but commonly "Section 8"). The HCVP is a federally-funded housing assistance program, administered by the HCHA[2] in Harford County, Maryland. Families enrolled in the HCVP must abide by a set of guidelines, explained in detail below, or risk termination of their monthly rental assistance.

         McDonell participated in the Voucher Program without issue for more than three years. In February 2015, she fell behind on her obligation to reimburse the HCHA for an overpayment and entered into a Restitution Agreement. Under the agreement, she was required to make monthly payments of $42.22. The amount of the payments was ultimately lowered because McDonell struggled to afford the first-prescribed amount. Even so, she failed to make payments in August and September of 2015.

         In June 2015, McDonell was involved in an altercation involving her sister, a neighbor, and the neighbor's daughter. McDonell was found guilty on two counts of second-degree assault and was incarcerated at the Harford County Detention Center. While McDonell was incarcerated, her mother twice informed the HCHA that McDonell and her family were not residing in the home: once on October 1 and once on an unknown date. During her incarceration, McDonell was allegedly denied access to her medication, and consequently, fell into a diabetic coma and was taken to Upper Chesapeake Medical Center. The HCHA was made aware of this.

         McDonell was released from jail on October 15, 2015. Days after her release, McDonell's unit failed a Housing Quality Inspection due to a rodent infestation, and she was ordered to make repairs by November 10. But on November 10, McDonell was not present at the home for the reinspection.

         On November 30, 2015, the HCHA sent McDonell a letter notifying her that her Housing Voucher was being terminated for the following reasons:

1. Failure to provide access to your unit for the required Housing Quality Standard (HQS) Inspection scheduled for November 10, 2015.
2. Failure to notify the Housing Agency that your family was not residing in the assisted unit. (According to the Maryland Judiciary Case Search, you were incarcerated from September 8, 2015, through October 14, 2015.)
3. On June 9, 2015, you were charged with two counts of Second Degree Assault in the District Court for Harford County. On September 8, 2015, the District Court of Harford County listed the disposition for both charges as guilty.
4. Failure to pay restitution to the Housing Agency in accordance with the restitution agreement you signed on February 5, 2015. The last payment made on your accoun[t] was October 19, 2015.

         The letter also advised McDonell that her housing assistance would terminate December 31, 2015 and that she had the right to request an informal hearing within 14 days. McDonell requested an informal hearing, which was held on December 21, 2015. The Hearing Officer ("HO") issued a decision upholding the termination on January 6, 2016, which is excerpted at length below.

         McDonell sought judicial review in the Circuit Court for Harford County. McDonell argued that: the hearing was "unfair," she never received notice of the reinspection, her mother promptly notified the HCHA of McDonell's incarceration, she was "caught up" on her restitution payments, and she was "falsely" charged with two counts of second-degree assault. The Circuit Court determined that the record contained substantial evidence to justify the HCHA's decision to terminate McDonell's voucher. The judge upheld the termination on all four grounds listed in the notice.

         In an unreported decision, the Court of Special Appeals affirmed the decision of both the Circuit Court and the HO. While finding the due process issues unpreserved, the intermediate appellate court went on to hold that, even if the issue was properly before it, "the Housing Agency did not violate appellant's due process rights." It also held that "the [HCHA's] decision to terminate appellant's Housing Vouchers was supported by substantial evidence in the record and not premised upon an erroneous legal conclusion."

         HUD Regulations and the Informal Hearing Procedure

         Congress established the HCVP with the express purpose of "promot[ing] the general welfare of the Nation . . . ." 42 U.S.C. § 1437(a)(1). In doing so, Congress sought to "remedy the unsafe housing conditions" and "address the shortage of housing affordable to low-income families." Id. § 1437(a)(1)(A)-(B). The Voucher Program is funded by the federal government, regulated and overseen by the Department of Housing and Urban Development ("HUD") and administered by state and local public housing agencies ("PHAs"). See id. § 1437f. Congress noted its intent to "vest in public housing agencies that perform well[] the maximum amount of responsibility and flexibility in program administration," so long as the agency is "appropriate[ly] accountab[le] to public housing residents, localities, and the general public." Id. § 1437(a)(1)(C).

         PHAs are required to "comply with HUD regulations," issued in the Code of Federal Regulations, and "other binding program directives." 24 C.F.R. § 982.552(a). Among these is the requirement to provide individuals with the opportunity for an informal hearing when their housing vouchers have been terminated. See id. § 982.555. Under the regulations, a "PHA must give a participant family an opportunity for an informal hearing" to consider whether the PHA's decision is "in accordance with the law" when, inter alia, the PHA decides to terminate assistance: (1) due to "the [participant] family's action or failure to act," explained in 24 C.F.R. § 982.552; or (2) "because the participant family has been absent from the assisted unit for longer than the maximum period permitted under PHA policy and HUD rules." Id. § 982.555(a)(1)(v).

         In those circumstances, the PHA "must give the family prompt written notice" of the termination of assistance. Id. § 982.555(c)(2). This notice must include: (1) a "brief statement" of the reasons for the termination decision; (2) a statement that the family may request an informal hearing regarding the decision; and (3) the deadline for requesting the informal hearing. Id. § 982.555(c)(2)(i)-(iii). Additionally, if an informal hearing is requested, it must occur before housing assistance is terminated. Id. § 982.555(a)(2).

         HUD regulations also provide guidance regarding hearing procedures. Both the family and the PHA are given an opportunity to conduct discovery. The family "must be given the opportunity to examine . . . any PHA documents that are directly relevant" before the hearing. Id. § 982.555(e)(2)(i). Consequently, the PHA may not "rely on" any documents during the hearing that were not made "available for examination" by the family. Id. The PHA may also grant itself similar discovery rights in its Administrative Plan. See id. § 982.555(e)(2)(ii). Both the PHA and the family must also "be given the opportunity to present evidence" at the hearing and "question any witness." Id. § 982.555(e)(5). Families have the right to be represented "by a lawyer or other representative" at their own expense. Id. § 982.555(e)(3).

         Informal hearings are conducted by an HO. This individual may be "any person" designated by the PHA, so long as he or she did not "approve[] the decision under review" and is not a subordinate of that person. Id. § 982.555(e)(4)(i). The HO must issue a written decision "stating briefly the reasons for that decision," using the "preponderance of the evidence" standard for making factual determinations. Id. § 982.555(e)(6). HUD guidelines explain that "the decision required by the regulation tells the participant what was decided, and the reasons for the decision." Section 8 Housing Assistance Payments Program; Existing Housing, 49 Fed. Reg. 12215, 12230 (March 29, 1984). Furthermore, while overly "legalistic" decisions would add little value to the process, the "decision required by the regulation must be truly informative as to the reasons for the decision." Id.

         PHAs are also required to adopt a written Administrative Plan "that establishes local policies for administration of the [Voucher Program] in accordance with HUD regulations and requirements." 24 C.F.R. § 982.54(a)-(b). These Administrative Plans flesh out and add to the regulatory guidance and provide more detailed procedures for informal hearings. See id. § 982.555(e)(1). The HO must oversee the hearing in accordance with the procedures in the PHA's Administrative Plan. See id. § 982.555(e)(4)(ii).

         Though lengthy, the relevant portions of the HCHA Administrative Plan are largely a restatement of the informal hearing requirements included in the HUD regulations. Regarding the informal hearing decisions, the Administrative Plan states that the HO's decision must: (1) "be based solely on allowable pertinent evidence presented at the time of the informal hearing"; (2) determine "if the action, inaction, or decision of the HCHA is in accordance with HUD regulations and this plan"; and (3) include "[a] clear summary of the decision," "the reasons for the decision," and "[t]he effective date of the decision." Harford County Housing Agency, Administrative Plan 171 (2016) [hereinafter Admin. Plan]. The Administrative Plan also provides timeframes for some of the HUD requirements. See id. at 161, 169.

         Procedural Due Process Overview

         The Due Process Clause is the floor upon which each of the above statutes, regulations, and administrative plans rests-it prevents procedures from falling below a certain level. There are two questions at the heart of any procedural due process case. The first question considers whether due process protections should be afforded to the interest at issue. Specifically, the Fifth and Fourteenth Amendments list "life, liberty, [and] property" as protected interests. U.S. Const. amends. V, XIV. The next question is: If a protected interest is involved, what process is due? "Due process, unlike some legal rules, is not a technical conception with a fixed content unrelated to time, place and circumstances." Cafeteria & Restaurant Workers Union, Local 473, AFL-CIO v. McElroy, 367 U.S. 886, 895 (1961) (internal citation omitted). Thus, appropriate process in one circumstance may not be appropriate in another.

         In Goldberg v. Kelly, 397 U.S. 254, 260 (1970), the United States Supreme Court addressed the issue of "whether the Due Process Clause requires that [a welfare] recipient ("Kelly") be afforded an evidentiary hearing before the termination of benefits." The Court first concluded that welfare payments are a protected property interest under the Constitution. Id. at 262. The more difficult question was the "extent to which procedural due process must be afforded . . . ." Id. at 262-63. The measure of appropriate process is not static. Rather, it is a sliding scale dependent on a balancing of two interests: (a) the private interest, or "the extent to which [the recipient] may be 'condemned to suffer grievous loss'" due to the deprivation; and (b) the governmental interest, or the monetary and efficiency incentives inherent in a "summary adjudication."[3] Id. at 263 (internal citations omitted). Thus, the question is whether "the recipient's interest in avoiding the loss outweighs the governmental" efficiency interest. Id.

         The Supreme Court first highlighted that it was "crucial" to consider that terminating aid to the private welfare recipient "pending resolution of a controversy over eligibility may deprive an eligible recipient of the very means by which to live while he waits." Id. at 264. Then, while noting the government's valid interest in conserving "the fisc and administrative time and energy," Justice Brennan, writing for the Court, also pointed out that the governmental interest is served by programs that "promote the general Welfare . . . ." Id. at 265. These programs provide citizens with "the means to obtain essential food, clothing, housing, and medical care." Id. at 264.

         Ultimately, the Court concluded that "[t]he stakes [were] simply too high for the welfare recipient," whose interest "clearly outweighs the State's competing concern . . . ." Id. at 266. Thus, a pre-termination hearing was essential "to protect a recipient against an erroneous termination of his benefits." Id. at 267. Specifically, the hearing must be "at a meaningful time and in a meaningful manner." Id. (citation omitted). The welfare recipient must have: (1) "timely access and adequate notice detailing the reasons for a proposed termination"; and (2) "an effective opportunity to defend by confronting any adverse witnesses and by presenting his own arguments and evidence orally." Id. at 267-68.

         Regarding the decision rendered from the pre-termination hearing, the Goldberg Court determined that "the decisionmaker's conclusion as to the recipient's eligibility must rest solely on the legal rules and evidence adduced at the hearing." Id. at 271. "To demonstrate compliance with this elementary requirement, the decision maker should state the reasons for his determination and indicate the evidence he relied on, though his statement need not amount to a full opinion or even formal findings of fact and conclusions of law." Id. (internal citation omitted).

         The underlying importance of appropriate pre-deprivation procedures and a resulting adequate decision was discussed in Moore v. Ross, 502 F.Supp. 543 (S.D.N.Y. 1980). In Moore, the United States District Court for the Southern District of New York enumerated the "major purposes" of the Goldberg requirements, which are: (1) to "protect against arbitrary and capricious decisions"; (2) to "safeguard against a decision on ex parte evidence"; and (3) "perhaps most importantly[, ] to facilitate judicial review by enabling a court to determine whether the decision was based upon 'an impermissible reason,' or 'no reason at all.'" Id. at 555-56 (internal citations omitted). Moreover, any statement or decision "must 'evince the [HO's] consideration of relevant factors' and make accessible 'the essential facts from which the [HO's] inferences have been drawn.'" Id. at 556 (citation omitted).

         We first addressed Goldberg as it relates to informal hearing procedures in Walker v. Department of Housing and Community Development, 422 Md. 80 (2011). In Walker, the main issue was whether the housing voucher recipient was entitled to the more protective contested case hearing procedures under the Maryland Administrative Procedure Act ("MD APA"), as opposed to the lesser informal hearing procedures outlined in the HUD regulations and the PHA's administrative plan. See id. at 82. We concluded that, because the PHA at issue was administered directly by the State, it constituted an "agency" under the MD APA and recipients were entitled to a contested case hearing before their benefits were terminated. Id. at 92. Also relevant to the current case, we said that "the informal hearing framework set forth in [the HUD regulations] meets Goldberg's due process requirements." Id. at 94. We address these same procedures again today.



         We first discuss HCHA's contention that McDonell did not preserve her due process challenge. The Court of Special Appeals agreed with the HCHA that McDonell "failed to properly preserve all issues regarding due process" because she did not "seek judicial review of the Agency's decision on due process grounds . . . ." Ultimately, the intermediate appellate court concluded that McDonell waived her appellate rights pursuant to Maryland Rule 8-131(a).

         In Maryland, generally, "the appellate court will not decide any other issue [not related to jurisdiction] unless it plainly appears by the record to have been raised in or decided by the trial court . . . ." Md. Rule 8-131(a). Nonetheless, we may still choose to decide an unraised issue "if necessary or desirable to guide the trial court or to avoid the expense and delay of another appeal." Id. "[T]he animating policy behind Rule 8-131(a) is to ensure fairness for the parties involved and to promote orderly judicial administration." Jones v. State, 379 Md. 704, 714 (2004). An appellate court must consider these "twin goals" before reviewing an unpreserved issue. See id. at 714-15.

         McDonell filed a pro se memorandum in the Circuit Court for Harford County. In her memorandum, McDonell states among her reasons for appealing her voucher termination that she "was given an unfair hearing." Both the United States Supreme Court and this Court have repeatedly and consistently emphasized that the purpose underlying the procedural due process guarantee is fundamental fairness. See Mathews v. Eldridge, 424 U.S. 319, 343, 349 (1976) (considering the "fairness and reliability of existing pretermination procedures" and stating the procedures must "assure fair consideration"); Goldberg, 397 U.S. at 261, 268 (referring to "constitutionally fair proceeding[s]" and what "fairness would require" in evaluating the scope of the Due Process Clause); Calvert Cty. Planning Comm'n v. Howlin Realty Mgmt., Inc., 364 Md. 301, 322 (2001) (asserting that ...

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