Ortiz v. Department of Housing & Urban Development

448 F. Supp. 953
CourtDistrict Court, D. Puerto Rico
DecidedDecember 7, 1977
DocketCiv. No. 75-1188
StatusPublished
Cited by3 cases

This text of 448 F. Supp. 953 (Ortiz v. Department of Housing & Urban Development) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ortiz v. Department of Housing & Urban Development, 448 F. Supp. 953 (prd 1977).

Opinion

OPINION AND ORDER

PESQUERA, District Judge.

The present action seeks declaratory and injunctive relief and a writ of mandamus. Jurisdiction is claimed under 28 U.S.C. § 1331. The instant case raises important questions as to the interaction between the National Housing Act, 12 U.S.C. § 1701 et seq. and the Veterans Educational Benefits Act, 38 U.S.C. § 1681 et seq.

Plaintiff Milton Burgos 1 receives benefits under 38 U.S.C. § 1681 et seq. He is a resident of Parque de los Monacillos, a low-rent housing project located at Guaynabo, Puerto Rico, and operated by codefendant Interstate General Corporation. Said project was built with and still receives assistance by the Department of Housing and Urban Development’s (HUD) funds under 12 U.S.C. § 1701 et seq. Codefendants Rogelio Pérez and Gloria Flaqué Vergé are officials of Interstate General Corporation.

The construction of Parque de los Monacillos was financed with a mortgage insured pursuant to Section 221(d)(3) of the National Housing Act, 12 U.S.C. § 17157(d)(3). Since this section allows liberal financing and relatively low debt servicing requirements, rents are lot • than they would [955]*955normally be in similar projects. HUD also effects an additional subsidy payment to the mortgagor of the project for the benefit of eligible tenants pursuant to a separate program known as the Rent Supplement Program,2 12 U.S.C. § 1701s which has the effect of further reducing rent payments so that in most cases they do not exceed 25% of the tenant’s adjusted gross income.

On September 5,1975, codefendant Gloria Flaqué Vergé, Manager of the Parque de los Monacillos Housing Project informed the tenants thereof, including plaintiff that annual recertifications of income were to begin soon. She further informed plaintiff that educational benefits from the Veterans Administration were to be included as “income” for purposes of computing rents. This fact was confirmed, by Mr. José Carballeira, HUD occupancy specialist, who verbally explained to plaintiff that HUD regulations so required.

On September 23,1975, plaintiff received a letter from Jesús Reyes Bascarán, Director of HUD’s Housing Management Division, stating that HUD regulations were to be interpreted as considering “income” as “income from all sources”, thereby ruling that Veterans Administration educational benefits fell into such category and were to be considered as “income” for the purpose of determining rental payments. Plaintiff Edwin James Ortiz proceeded to pay his usual rent, refusing to pay for the new required rental amount, which included in its computation plaintiff’s veterans educational benefits as “income”.

Pursuant to a Stipulation filed on January 7, 1976, plaintiff’s factual allegations were accepted as true by all defendants herein.

Through its ansv/er to the complaint and subsequent motions submitted hitherto, co-defendant HUD established that its official policy had been misinterpreted by the HUD occupancy specialist, Mr. Carballeira as well as by Mr. Reyes Bascarán. Thereafter, plaintiff filed a motion for partial summary judgment requesting that the Court dispose of one of the two main issues of the instant action, i. e., whether pursuant to the provisions of 12 U.S.C. § 1701 et seq. codefendant HUD could consider all of plaintiff’s Veterans Administration educational benefits as “income”. A motion to dismiss or for summary judgment was subsequently filed by the federal codefendants wherein they challenged this Court’s jurisdiction on various grounds and further alleged plaintiff’s failure to state a claim upon which relief could be granted. The issues brought forth by these motions, including the matters related to class-certification, will be addressed forthwith.

I

At the outset, we must ascertain whether we have jurisdiction to entertain the present action. We initially address the issue of whether through a retrospective application of the amendment made to 28 U.S.C. § 1331 by P.L. 94-574, 90 Stat. 2721 (October 21, 1976) Section 2, we may acquire jurisdiction irrespective of the amount in controversy previously required by said statute. The aforecited amendment eliminated the jurisdictional amount requirement in cases “arising] under the Constitution, laws or treaties of the United States”. The instant case was filed before its enactment; thus, the possible retrospective application of P.L. 94-574 is an issue of first impression before this Court.

Plaintiff correctly alleges that the present action is one arising under the laws of the limited States; more questionably, he also claims that his cause is for damages in excess of $10,000, exclusive of interest and costs. He claims damages amounting to $20,000. Although the damages allegedly suffered are not specified in the complaint, we need not go into the sufficiency of the jurisdictional amount. We explain ourselves.

[956]*956The aforementioned amendment to the federal-question statute had the effect of extending jurisdiction to actions such as plaintiff’s where the essential purpose of the same could be to obtain non-statutory review of administrative actions and where damages may have been worth less than $10,000 or the right affected could not be valued. H.R.Rep. No. 1656, 94th Cong., 2d Sess. 16, reprinted in [1976] U.S.Code Cong. & Admin.News pp. 6121, 6136. The case at bar certainly seems to be one of that kind. However, the record does not reveal that plaintiff ever paid the increased rent; even presuming he had, we find it highly improbable that the difference would amount to more than $10,000. Nor does the record show that plaintiff was evicted or harassed in any particular way for refusing to pay the increased rent.

The instant action was commenced prior to October 21,1976, date of approval of P.L. 94-574. Notwithstanding any jurisdictional infirmities that may have existed at such time, we now find that we have federal question jurisdiction over this case.

The text and legislative history of P.L. 94-574 nowhere indicate that Congress intended the amendment to have a limited prospective application. Unless a contrary intent appears, changes in statutory jurisdiction apply to pending actions. Link v. Receivers of Seaboard Air Line Ry. Co., 73 F.2d 149, 151 (4 Cir., 1934). Such intent must appear from the text of the law or in its legislative history. The last amendment to Section 1331 enacted prior to P.L. 94-574 expressly provided:

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Bluebook (online)
448 F. Supp. 953, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ortiz-v-department-of-housing-urban-development-prd-1977.