Yesler Terrace Community Council v. Cisneros
37 F.3d 442 (1994)
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Rule of Law:
An agency determination that alters the legal rights of a broad class of individuals and has only future effect is a "substantive rule" that, if required by the agency's own regulations, must be promulgated through notice-and-comment rulemaking.
Facts:
- Federal law generally requires public housing authorities (PHAs) to provide tenants with an administrative grievance hearing before an eviction.
- An exception in the law permits PHAs to skip this hearing for crime-related evictions if the Department of Housing and Urban Development (HUD) determines that the state's court eviction procedures provide the basic elements of due process.
- In December 1991, without any public notice or comment period, HUD determined that Washington state's court eviction procedures satisfied the due process standard.
- As a result of HUD's determination, several Washington PHAs, including the Seattle Housing Authority, amended their policies to eliminate grievance hearings for tenants facing crime-related evictions.
- The Seattle Housing Authority subsequently served an eviction notice on tenant Marla Davison, stating she would not be afforded a grievance hearing because her eviction was due to alleged criminal activity.
- Shortly after, the Tacoma Housing Authority served a similar eviction notice on tenant Eric Bolden.
Procedural Posture:
- Yesler Terrace Community Council and a tenant sued the Department of Housing and Urban Development (HUD) in the U.S. District Court, seeking declaratory and injunctive relief.
- The plaintiffs later amended their complaint, substituting a new tenant as the named plaintiff.
- The district court, a court of first instance, granted summary judgment in favor of HUD.
- Yesler Terrace Community Council, as the appellant, appealed the district court's judgment to the U.S. Court of Appeals for the Ninth Circuit.
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Issue:
Does the Department of Housing and Urban Development's determination that a state's eviction procedures satisfy due process—thereby allowing public housing authorities to eliminate pre-eviction grievance hearings for tenants accused of criminal activity—constitute a substantive rule requiring public notice and an opportunity to comment under the agency's own regulations?
Opinions:
Majority - Canby
Yes, HUD's determination constitutes a substantive rule requiring notice and comment. An agency action is a rule, not an adjudication, when it has a prospective effect on a broad class of unidentified individuals rather than resolving a dispute between specific parties. Here, HUD's determination did not resolve a concrete dispute but instead authorized PHAs to alter procedures for all future crime-related evictions, prospectively affecting the rights of all public housing tenants in Washington. Furthermore, the determination was a 'substantive' rule, not an 'interpretive' one, because it did not merely clarify existing law but actively eliminated a statutory right to a hearing for a class of tenants, an action taken pursuant to authority delegated by Congress. Because HUD failed to follow its own regulations requiring notice and comment for substantive rules, its determination is invalid.
Dissenting - Kozinski
The court should not decide the issue because the plaintiffs lack standing. To have standing, a plaintiff must show a concrete and particularized injury, but none of the plaintiffs are currently facing eviction for criminal activity. Their alleged injury—a feeling of insecurity about a possible future eviction without a hearing—is too speculative and ethereal to constitute an 'injury in fact' under Supreme Court precedent. The only individuals with standing would be those who are actually being evicted under the new procedure, and until such a plaintiff comes forward, the case is not ripe for judicial review.
Analysis:
This case clarifies the critical distinction between agency rulemaking and adjudication under the Administrative Procedure Act (APA). The court's holding emphasizes that the nature of an agency action is defined by its practical effect, not the label the agency assigns to it. By classifying HUD's statewide determination as a substantive rule, the decision reinforces the importance of public participation through notice-and-comment procedures when an agency action prospectively alters the legal rights of a broad class of people. This precedent makes it more difficult for agencies to circumvent public input requirements by framing policy changes that have widespread future impact as case-specific 'adjudications' or 'interpretations'.
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