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Yarbrough v. Decatur Housing Authority

United States Court of Appeals, Eleventh Circuit

August 2, 2019

SHEENA YARBROUGH, Plaintiff – Appellant,
v.
DECATUR HOUSING AUTHORITY, Defendant-Appellee.

          Appeal from the United States District Court for the Northern District of Alabama D.C. Docket No. 5:15-cv-02325-AKK

          Before ED CARNES, Chief Judge, TJOFLAT, MARCUS, WILSON, WILLIAM PRYOR, MARTIN, JORDAN, ROSENBAUM, JILL PRYOR, BRANCH, and GRANT, Circuit Judges. [*]

          MARTIN, CIRCUIT JUDGE

         For years, this Court has allowed district courts to entertain 42 U.S.C. § 1983 suits alleging wrongful termination of housing benefits under the Housing Act of 1937, 42 U.S.C. § 1437 et seq., where the housing authority failed to prove its case for termination by a preponderance of the evidence. See Basco v. Machin, 514 F.3d 1177, 1183–84 (11th Cir. 2008). But today we recognize that neither Basco nor its progeny explained how a regulation establishing the preponderance of the evidence standard can give rise to a private cause of action under § 1983. With regard to agency regulations, the Supreme Court has been clear that although "[a]gencies may play the sorcerer's apprentice," they cannot usurp the role of "the sorcerer himself." Alexander v. Sandoval, 532 U.S. 275, 291, 121 S. Ct. 1511, 1522 (2001). By this opinion, our Court restores the apprentice to its rightful place.

         Our Court granted rehearing en banc to consider whether Basco was correct in granting a private right of action under § 1983 to people contesting the termination of their housing benefits, with the requirement that the termination decision be based on a preponderance of the evidence. The regulation establishing the authorities' burden of proof in termination proceedings neither defines nor fleshes out a right established by the Housing Act. We thus conclude Basco was wrongly decided in this regard. As a result, we overrule Basco and its progeny inasmuch as those cases held that the Housing Act or its implementing regulations create a right enforceable by § 1983 to a termination decision made by the preponderance of the evidence.

         I.

         The Housing Act assists low-income families in getting a safe and affordable place to live. See 42 U.S.C. § 1437(a). To that end, one section of the Act provides relief through "what is known as the Section 8 housing program." Cisneros v. Alpine Ridge Grp., 508 U.S. 10, 12, 113 S. Ct. 1898, 1900 (1993). The Section 8 program subsidizes private landlords who rent to low-income tenants by authorizing housing authorities to pay the difference between the tenant's contribution and the full cost of rent. Id.

         Sheena Yarbrough, the plaintiff in this case, was a beneficiary of the Section 8 housing program. While she was living in Section 8 housing, during September of 2012, the police arrested Ms. Yarbrough on drug-related charges. The Decatur Housing Authority (the "Authority") learned about her arrest from a newspaper and notified Ms. Yarbrough it intended to terminate her Section 8 housing benefits. Ms. Yarbrough requested and received an informal hearing, and a hearing officer upheld the Authority's decision to terminate her benefits.

         Despite the decision in its favor, counsel advised the Authority to continue to subsidize Ms. Yarbrough's rent until her criminal charges were resolved. Roughly six months after her arrest, Ms. Yarbrough was indicted on two charges of unlawful distribution of a controlled substance, in violation of Ala. Code § 13A-12-211. These charges remained outstanding a little less than two years when the State agreed to dismiss them "upon payment of court costs." But Ms. Yarbrough was not out of the woods yet.

         Around the same time as the State's agreement, the Authority received a tip accusing Ms. Yarbrough of new violations of the Section 8 housing program. And on October 8, 2015, the Authority sent Ms. Yarbrough a new notice advising her of its intent to terminate her Section 8 housing benefits. This time, the Authority sought to terminate Ms. Yarbrough's benefits based on her indictments as well as her alleged failures to notify the Authority of a change in family composition, to report her household income, and to make required payments.

         Ms. Yarbrough again requested a hearing, and one was held on November 10, 2015. The Authority was represented by a caseworker named Kenyetta Gray, who introduced copies of Ms. Yarbrough's indictments into evidence. Ms. Gray also testified about the Authority's communications with Ms. Yarbrough. The Hearing Officer reviewed the testimony and the record, then affirmed the Authority's decision to terminate Ms. Yarbrough's benefits. The Hearing Officer rejected three of the four grounds offered by the Authority in support of termination. However, the Officer found that Ms. Yarbrough's indictments and arrest were enough to prove by a preponderance of the evidence that she "violated her agreement with the Authority and her lease by engaging in drug-related criminal activity."

         Less than a month later, Ms. Yarbrough filed the 42 U.S.C. § 1983 suit that resulted in this appeal. She asked the U.S. District Court to restore her benefits and enjoin the Authority from evicting her. She alleged that the Authority's decision to terminate her benefits violated both federal regulations as well as her due process rights because the decision was based on legally insufficient evidence and unreliable hearsay. The District Court allowed discovery, and once that was done, the parties filed cross-motions for summary judgment. The Court granted the Authority's motion for summary judgment and denied Ms. Yarbrough's motion for the same. The District Court rejected Ms. Yarbrough's argument that the indictments were unreliable hearsay and found that they were "legally sufficient to establish by a preponderance of the evidence . . . that Yarbrough engaged in the alleged drug-related criminal activity."

         Ms. Yarbrough timely appealed the District Court's decision to our Court. Relying on Basco, a panel of this Court agreed with Ms. Yarbrough and reversed the District Court's grant of summary judgment. The panel opinion held that as a matter of law, "[t]hree probable-cause determinations [supporting one arrest and two indictments] do not add up to a finding that a person more likely than not committed a drug-related crime."[1] Yarbrough v. Decatur Hous. Auth., 905 F.3d 1222, 1226 (11th Cir. 2018) (per curiam), reh'g en banc granted, op. vacated, 914 F.3d 1290 (11th Cir. 2019).

         The Authority soon filed a petition for rehearing en banc urging our Court to revisit Basco's holding. A majority of the voting judges on this Court granted the petition, and the panel opinion was vacated as a result. See Yarbrough v. Decatur Hous. Auth., 914 F.3d 1290 (11th Cir. 2019) (en banc). The only question now before this en banc Court is whether to overrule Basco's holding that there is an individual right under the Housing Act and its implementing regulations, enforceable through ยง 1983, to a decision based on a ...


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