## Facts

- Federal housing law generally requires public housing authorities (PHAs) to provide tenants a grievance procedure before eviction.
- In crime-related evictions, PHAs may omit the grievance procedure only if HUD determines the state’s court eviction process satisfies specified due process elements.
- In December 1991, HUD issued a statewide determination that Washington’s state court eviction procedures satisfied those due process elements, allowing Washington PHAs to bypass grievance hearings for certain criminal-activity evictions.
- Washington PHAs revised leases and grievance procedures to rely on HUD’s determination.
- In March 1992, the Seattle Housing Authority served tenant Marla Davison an eviction notice for alleged criminal activity and denied her a grievance hearing based on HUD’s determination.
- The Yesler Terrace Community Council and a tenant representative (later substituted by Eric Bolden) sued HUD and the HUD Secretary seeking declaratory and injunctive relief, alleging HUD issued the determination without required notice and opportunity for comment.

## Issues

1. Whether the tenant plaintiffs and tenant organization had Article III standing, including injury in fact and interests within the relevant statutory and regulatory zone of interests.
2. Whether HUD’s statewide “due process determination” was a substantive rule of general applicability and future effect, rather than an adjudication or nonbinding policy statement.
3. Whether HUD’s failure to provide notice and an opportunity to comment, as required by HUD’s own rulemaking regulation, rendered the determination invalid.

## Decision

- The Ninth Circuit reversed the district court’s summary judgment for HUD and remanded.
- The court held plaintiffs had standing because HUD’s determination caused the loss of grievance-hearing protections and affected the terms and conditions of their tenancies; those interests fell within the zone of interests of the invoked housing statutes and HUD procedures.
- The court held HUD’s statewide determination was a substantive rule because it was generally applicable across Washington PHAs and had prospective effect on tenant rights and PHA obligations.
- Although APA notice-and-comment requirements were not statutorily compelled for this category of agency action, HUD had voluntarily required notice and comment for rules of general applicability and future effect under 24 C.F.R. § 10.1.
- Because HUD did not use notice-and-comment procedures required by its own regulation, the due process determination was invalid.

## Legal Principles

- A party has standing to challenge an agency action when the action causes a concrete procedural or legal injury that is fairly traceable to the agency and the claimant’s interests are within the zone of interests protected by the relevant statutes or regulations.
- An agency action of general applicability and future effect that changes regulated parties’ rights or obligations is properly treated as a substantive rule, not an adjudication.
- Even when the APA’s default notice-and-comment rulemaking requirements do not apply by statute, an agency must comply with notice-and-comment procedures it has imposed on itself by regulation.
- An agency’s failure to follow its own binding procedural regulations can invalidate the resulting rule.

## Conclusion

The Ninth Circuit set aside HUD’s Washington statewide due-process determination because it functioned as a substantive, prospective rule and HUD failed to provide notice and an opportunity to comment required by HUD’s own regulations, while also holding that affected tenants and their representative organization had standing to sue.


Yesler Terrace Cmty. Council v. Cisneros, 37 F.3d 442 (9th Cir. 1994)