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Chandola v. Seattle Housing Authority

United States District Court, W.D. Washington, Seattle

March 13, 2014

SEATTLE HOUSING AUTHORITY, a municipal corporation, and JAMES FEARN, an individual, Defendants.


RICARDO S. MARTINEZ, District Judge.

This Matter is before the Court on Plaintiff's Motion for Reconsideration of the Court's Ruling on Defendants' Motion to Dismiss. Dkt. #24. Plaintiff contends that the Court committed manifest error in dismissing his Equal Protection and Due Process claims (Dkt. #23). Having considered the response and reply briefs submitted by the parties pursuant to Local Civil Rule 7(h) ( See Dkt. ##28, 29) as well as the remainder of the record, the Court grants Plaintiff's Motion for Reconsideration in part.


This case arises from the removal of Plaintiff, Varn Chandola, from his role as a Hearing Officer by Defendant Seattle Housing Authority ("SHA"). Defendant SHA is a public housing authority, established pursuant to the Housing Authorities Law, RCW 35.82 et seq., and operating within Seattle, Washington. SHA receives federal funding for use in administering low-income housing programs in Seattle, including the Section 8 Housing Choice Voucher Program, which is at issue in this case. See 42 U.S.C. 1437f(0). A Section 8 participant, or "voucherholder, " is entitled to request an "informal hearing" whenever the SHA seeks to terminate her participation. Dkt. #13, ¶ 4.4. A Hearing Officer presides over these termination hearings and is charged with issuing a written opinion either upholding or overturning SHA's decision. Id. at ¶ 4.6.

In June 2008, SHA consented to a judicial order that, among other things, required SHA to hire competent attorney Hearing Officers and implemented a list of Hearing Officers from which SHA would select to hear cases on a "blind rotation basis." Under the Order, exceptions to the "blind rotation basis are allowed only for good cause, '" such as for "scheduling difficulties and ethical conflicts." Dkt. #10-1, ¶ 4.8; Dkt. #15, Ex. A., p. 21; see Hendricks v. SHA, No. C07-657TSZ (W.D. Wash. June 9, 2008). SHA hired Plaintiff Varn Chandola in 2009 along with a number of other Hearing Officers under three-year written Contracts. See Dkt. #15, Ex. A. As per its terms, SHA could terminate the Contract "for [its] convenience or the failure of the Hearing Office to fulfill the contract obligations (default), " upon delivering a written Notice of Termination. Id. at p. 12. The Contract required Hearing Officers to serve as "competent and impartial decision-maker[s]" for informal voucher termination hearings. Id. at p. 17. Defendant Fearn was in charge of assigning cases to Hearing Officers and paying them for their work performed for SHA.

In June of 2010, Plaintiff presided over a hearing to review the potential termination of voucherholder Jacquelyn Nichols from the Section 8 program. Plaintiff found in favor of Ms. Nichols on July 6, 2010. Subsequently, Defendant Fearn wrote to Ms. Nichols that Plaintiff's decision would be disregarded as outside the scope of his authority and that Plaintiff would be expected to revise his decision accordingly. Dkt. #13-1, Ex. 1. Plaintiff refused to do so and Mr. Fearn continued to insist that he revise his decision, culminating in reassignment of the cases to another Hearing Officer. Dkt. #13, ¶¶ 4.36; Dkt. #13-1, Ex. 2-5.

The Hearing Officer who replaced Plaintiff found in favor of SHA, prompting Ms. Nichols to petition the King County Superior Court for a writ of review. On June 1, 2011, the Court granted the writ and ruled in favor of Plaintiff's conclusions in his 2010 ruling. See Dkt. # 13-1, Ex. 6. Upon appeal, Division I of the Washington Court of Appeals affirmed the lower court's decisions, concluding that Chandola did not exceed his authority and that his decision was therefore binding on SHA. Nichols v. Seattle Housing Authority, 171 Wash.App. 897, 288 P.3d 403 (2012).

Despite the state court's determination and Plaintiff's repeated demand for payment, Defendants have refused to pay Plaintiff for his work on the Nichols case. Dkt. #13, ¶ 4.39. Unbeknownst to Plaintiff, Defendants also removed Plaintiff from the pool of Hearing Officers used by SHA. Id. at ¶¶ 4.40-4.41. Defendants never provided Officer Chandola with a "Written Notice of Termination." Id. at ¶ 4.42.

Plaintiff filed this action in state court, alleging causes of action for violation of the Fourteen Amendment, federal statute 42 U.S.C. § 1983, breach of contract, and breach of the covenant of good faith and fair dealing. Defendants removed the case to this Court and moved to dismiss Plaintiff's claims for violation of Equal Protection and violation of Third Parties' Constitutional Right to Due Process. After the Court granted Defendants' motion to dismiss ( See Dkt. #23), Plaintiff filed the instant motion for reconsideration.


Motions for reconsideration are disfavored and will ordinarily be denied absent a showing of manifest error or of new facts or legal authority. See Local Rule 7(h)(1). No motion for reconsideration shall be granted without a Court-ordered response. See Local Rule 7(h)(3).

On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). However, the court is not required to accept as true a "legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The complaint "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Id. at 678. This requirement is met when the plaintiff "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.


A. Equal ...

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