This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
STATE OF MINNESOTA
IN COURT OF APPEALS
Dakota County Community
Filed February 4, 2003
Community Development Authority
Lisa Hollingsworth, Southern Minnesota Regional Legal Services, Inc., 16174 Main Avenue, Prior Lake, MN 55372 (for relator)
Robert A. Alsop, Kennedy & Graven, 470 Pillsbury Center, 200 South Sixth Street, Minneapolis, MN 55402 (for respondent)
Considered and decided by Harten, Presiding Judge, Kalitowski, Judge, and Klaphake, Judge.
Relator June Alich seeks review by certiorari of the decision of respondent Dakota County Community Development Authority (CDA) to terminate her assistance under the Section 8 Housing Choice Voucher Program. 24 C.F.R. § 982 (2002). Alich alleges that the CDA lacked the authority to terminate her assistance based on all the circumstances of the case. Because the CDA acted in an arbitrary and capricious manner by failing to consider all relevant circumstances before terminating assistance, we reverse.
An agency’s quasi-judicial decision will be upheld unless it is not supported by substantial evidence, based on an erroneous interpretation of the law, outside the agency’s jurisdiction, procedurally defective, or arbitrary and capricious. Carter v. Olmsted County Hous. & Redev. Auth., 574 N.W.2d 725, 729 (Minn. App. 1998). “An agency’s decision is arbitrary and capricious if it represents its will and not its judgment.” Hiawatha Aviation of Rochester, Inc. v. Minn. Dept. of Health, 375 N.W.2d 496, 501 (Minn. App. 1985) (citation omitted), aff’d, 389 N.W.2d 507 (Minn. 1986). When an agency entirely fails to consider an important aspect of a problem, this is a signal that the decision is arbitrary and capricious. White v. Minn. Dep’t of Natural Res., 567 N.W.2d 724, 730 (Minn. App. 1997), review denied (Minn. Oct. 31, 1997).
The reviewing court examines the findings to determine if they support the decision, but does not retry facts or challenge the credibility determinations of the agency. Senior v. City of Edina, 547 N.W.2d 411, 416 (Minn. App. 1996). “The decision is to be upheld if the lower tribunal furnished any legal and substantial basis for the action taken.” Id. (quotation omitted). The interpretation of statutes and regulations is a question of law, which this court reviews de novo. Chancellor Manor v. Gales, 649 N.W.2d 892, 894 (Minn. App. 2002).
Regulations promulgated by the Department of Housing and Urban Development (HUD) apply to all participants in the Section 8 program. Id. HUD regulations are interpreted according to their plain language. Dep’t of Hous. & Urban Dev. v. Rucker, 535 U.S. 125, ___, 122 S. Ct. 1230, 1233 (2002). The applicable regulation in this matter states:
The PHA [Public Housing Authority] may at any time deny program assistance for an applicant, or terminate program assistance for a participant for any of the following grounds:
(i) If the family violates any family obligations under the program [including failing to supply any information requested during a regularly scheduled reexamination of family income].
24 C.F.R. § 982.552(c)(1) (2002). The regulation further states:
In determining whether to deny or terminate assistance because of action or failure to act by members of the family:
(i) The PHA may consider all relevant circumstances such as the seriousness of the case, the extent of the participation or culpability of individual family members, mitigating circumstances related to the disability of a family member, and the effects of denial or termination of assistance on other family members who were not involved in the action or failure.
24 C.F.R. § 982.552(c)(2).
The United States and Minnesota Supreme Courts both have interpreted this language as vesting discretion in the PHA to determine when termination of assistance is an appropriate remedy. See Rucker, 122 S. Ct. at 1235; Minneapolis Pub. Hous. Auth. v. Lor, 591 N.W.2d 700, 703 (Minn. 1999). The language of the governing HUD regulations, however, directs the relevant PHA to “consider all relevant circumstances such as the seriousness of the case[.]” 24 C.F.R. 982(c)(2)(i).
Here, the relevant PHA, the CDA, has failed to show that it considered the seriousness of the violation, particularly in light of the overriding purpose of the Section 8 program: to provide rental subsidies so “eligible families can afford decent, safe and sanitary housing.” 24 C.F.R. § 982.1(a)(1). The evidence before the CDA hearing officer was that (1) Alich had a history of good compliance with the requirements of the Section 8 program; (2) Alich, as directed, made an appointment to complete her annual reexamination on February 7, 2002; (3) Alich called to cancel that appointment on February 6, 2002, explaining that she intended to get married, would not need housing assistance after the wedding, and believed she should not take up the agency’s time with the reexamination process; (4) less than one week later, Alich called to ask if she could remain in the program because she had called off the wedding; and (5) the CDA did not send a termination notice until the day that Alich called.
There is no evidence that Alich’s need for housing assistance had changed. There is no evidence that the CDA had already notified Alich’s landlord that the housing subsidy would end or that the CDA had transferred Alich’s assistance to a new recipient. There is no evidence that Alich consistently and repeatedly refused or failed to cooperate with the CDA in the reexamination process; rather, she had been in compliance with program requirements since 1998. This failure to consider all relevant circumstances suggests that the CDA’s determination to terminate assistance was arbitrary and capricious. See White, 567 N.W.2d at 730 (stating that agency decision is arbitrary and capricious if agency failed to consider important aspect of problem).
Given the purpose of the Section 8 Housing Choice Voucher Program and the discretion vested in the CDA as the supervising PHA, the decision to terminate Alich’s assistance without considering mitigating circumstances was an arbitrary and capricious exercise of agency will. We therefore reverse the decision of the CDA and reinstate Alich’s housing assistance.