Resident Didn't Properly Appeal PHA's Termination Decision

Facts: A Section 8 resident sued the local PHA and its employees for allegedly violating her constitutional rights. From March 2008 until January 2013, she entered into a lease agreement for an apartment. The PHA, through a housing inspector, conducted an annual inspection of the apartment in January 2013. The inspector noted that the resident wasn’t occupying the unit and that an unidentified man was living there. Based on the inspector’s observations, the PHA terminated the resident’s participation in the Section 8 program.

Right before the inspection, the resident had notified the PHA that she wouldn’t be recertifying for the Section 8 program because she was able to pay her monthly rent beginning March 1, 2013. She received notice of the termination in a letter dated Jan. 9, 2013, which gave notification that she had 10 days to appeal the decision and explained how to do so. She responded with a letter dated Jan. 11, 2013, stating her intention not to recertify for Section 8 housing. The letter didn’t request a hearing or appeal.

On Dec. 8, 2014, the resident filed this lawsuit, and the PHA asked the court to dismiss the case.

Ruling: A North Carolina district court granted the PHA’s request to dismiss the lawsuit.

Reasoning: The court ruled that it lacked the power to hear the case because the resident failed to “exhaust administrative remedies.” The PHA gave the resident the option to have a hearing as required by 24 C.F.R. § 982.555 in the Jan. 9 letter. But the resident chose not to exercise her appeal rights, so she is prevented from bringing the lawsuit.

To the extent that the resident sued the individuals working for the PHA, the court ruled that they are entitled to qualified immunity. Qualified immunity shields government officials from liability so long as they could reasonably believe that their conduct doesn’t violate clearly established law. The Supreme Court recognized a two-step procedure for determining whether qualified immunity applies that “asks first whether a constitutional violation occurred and second whether the right violated was clearly established.” The PHA employees are entitled to qualified immunity if the answer to either question is “no.”

Even taking the allegations in the amended complaint as true, the court stated that it cannot conclude that any one of the employees violated the resident’s constitutional rights. The employees did not play any active role whatsoever in the actions complained of by the resident. And the housing inspector merely inspected her unit and reported his findings to the PHA. One employee was responsible for terminating her Section 8 eligibility, but the resident didn’t exercise her right to appeal. So there’s no evidence that a constitutional violation occurred, and the individual PHA defendants are all entitled to qualified immunity.

• Sharrock v. Fayetteville Metropolitan Housing Authority, October 2015