Nozzi v. Housing Authority

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

MICHAEL NOZZI, an individual; No. 13-56223
NIDIA PELAEZ, an individual; LOS
ANGELES COALITION TO END D.C. No.
HUNGER AND HOMELESSNESS, a 2:07-cv-00380-
non-profit organization, on behalf of GW-FFM
themselves and similarly situated
persons,
Plaintiffs-Appellants, OPINION

v.

HOUSING AUTHORITY OF THE CITY
OF LOS ANGELES; RUDOLPH
MONTIEL, in his official capacity,
Defendants-Appellees.

Appeal from the United States District Court
for the Central District of California
George H. Wu, District Judge, Presiding

Argued and Submitted
July 10, 2015—Pasadena, California

Filed November 30, 2015
2 NOZZI V. HACLA

Before: Stephen Reinhardt and Richard R. Clifton, Circuit
Judges and Miranda M. Du,* District Judge.

Opinion by Judge Reinhardt

SUMMARY**

Civil Rights

The panel reversed the district court’s summary judgment
in favor of defendants, directed that summary judgment be
entered in favor of plaintiffs, and remanded for further
proceedings in a putative class action in which plaintiffs
alleged that defendants, the local administrators of the
Section 8 Housing Choice Voucher Program, reduced the
amount of Section 8 beneficiaries’ subsidies without
providing adequate notice, in violation of federal and state
law.

The panel first noted that this Court had previously held
that plaintiffs have a property interest in Section 8 benefits to
which the procedural protections of the Due Process Clause
apply. Nozzi v. Housing Authority of the City of Los Angeles,
425 F. App’x 539 (9th Cir. 2011). The panel held that the
Housing Authority failed to provide meaningful information
to Section 8 beneficiaries about a change to the program’s

*
The Honorable Miranda M. Du, District Judge for the U.S. District
Court for the District of Nevada, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
 NOZZI V. HACLA 3

subsidy payment standard and the effect of that change upon
the beneficiaries and their property interests. The panel held
that this failure violated both the requirements of the Voucher
Program regulations and the requirements of procedural due
process. It also resulted in a violation of two state statutes,
California Government Code §§ 815.6 & 815.2, which
require public entities to take reasonable efforts to comply
with the mandatory duties established by federal regulations.
The panel reversed and remanded with instructions for the
district court to enter summary judgment in favor of the
plaintiffs on the merits of the federal and state law claims.

The panel ordered that on remand, the case be reassigned
to a different district judge—a judge other than the two
identified by the current district judge who himself had
declined to hear the case further. The panel stated that further
factual development may be needed to determine the size and
validity of plaintiffs’ class and to determine the appropriate
remedy.

COUNSEL

Barrett S. Litt (argued), Kaye, McLane, Bednarski & Litt,
LLP, Pasadena, California; Patrick Dunlevy, Lisa R. Jaskol,
Stephanie Carroll, Public Counsel, Los Angeles, California,
for Plaintiffs-Appellees.

Roy G. Weatherup (argued) and Brant H. Dveirin, Lewis
Brisbois Bisgaard & Smith LLP, Los Angeles, California, for
Defendants-Appellees.
4 NOZZI V. HACLA

OPINION

REINHARDT, Circuit Judge:

The Section 8 Housing Choice Voucher Program provides
rental assistance to the most vulnerable members of our
society. For many, especially those in areas with a high cost
of living, the continuous receipt of these benefits is the only
means through which Section 8 beneficiaries and their
families can obtain safe, affordable housing. For those on a
fixed income or those living paycheck to paycheck, any
unexpected decrease in the subsidy can result in
homelessness. For this reason, the program contains
procedural protections designed to ensure that beneficiaries
have at least a full year to plan for certain changes that may
decrease the beneficiary’s subsidy and increase the rent that
they will have to pay.

Plaintiffs are the putative class representatives of a group
of tenants who receive rent subsidies through the Section 8
Housing Choice Voucher Program. They assert that the
Defendants, the local administrators of the Voucher Program,
reduced the amount of Section 8 beneficiaries’ subsidies
without providing adequate notice, in violation of federal and
state law. We agree. Accordingly, we reverse the grant of
summary judgment in favor of the defendants, direct that
summary judgment be entered in favor of the plaintiffs, and
remand for further proceedings consistent with this opinion.
 NOZZI V. HACLA 5

I. STATUTORY AND REGULATORY BACKGROUND

A. Overview of the Section 8 Housing Choice Voucher
Program

In 1974, Congress created the Section 8 housing program
in order to “aid[] low-income families in obtaining a decent
place to live” and “promot[e] economically mixed housing.”
Housing and Community Development Act of 1974, Pub. L.
93-383 § 201(a), 88 Stat. 633, 622–66 (1974) (codified as
amended at 42 U.S.C. § 1437f). For over four decades, the
program has provided rental assistance to low-income,
elderly, and disabled families. See generally Park Village
Apartment Tenants Ass’n v. Mortimer Howard Trust,
636 F.3d 1150, 1152 (9th Cir. 2011).

The majority of federal housing assistance takes place
through the Housing Choice Voucher Program, which
subsidizes the cost of renting privately-owned housing units.
42 U.S.C. § 1437f(o). The Voucher Program is funded and
regulated by the federal Department of Housing and Urban
Development, and it is administered at the local level through
“public housing agencies.” 24 C.F.R. § 982.1(a).

The public housing agencies determine whether
individuals are eligible to participate in the program.
24 C.F.R. § 982.201. When an individual is approved, the
public housing agency gives that person a voucher which
entitles him to search for qualifying privately-owned housing.
24 C.F.R. § 982.302. When a voucher-possessing individual
finds a qualifying unit, the unit owner and public housing
agency will negotiate and enter into a housing assistance
payment contract, which inter alia specifies the maximum
monthly rent that the unit owner may charge. 42 U.S.C.
6 NOZZI V. HACLA

§ 1437f(c). After that contract has been formed, the public
housing agency will make subsidy payments to the unit
owner on behalf of the tenant.1

An extensive set of statutory provisions and regulations
governs the calculation of the subsidy that must be paid on
behalf of each tenant. See 42 U.S.C. § 1437f(o); 24 C.F.R.
§ 982.501 et seq. To begin with, the Department of Housing
and Urban Development must set the fair market rent for
established geographic areas across the United States.
24 C.F.R. § 982.503(a)(1). The public housing agency must
use this fair market rent to create a local voucher “payment
standard” for each of the areas in its jurisdiction. 24 C.F.R.
§ 982.503(b)(1)(I). A payment standard is the maximum
subsidy payment that the housing agency will provide for
each type of apartment in the area. Id. It must generally be
set between 90 percent and 110 percent of the fair market rent
for the area. 24 C.F.R. § 982.503(b)(1)(i).2

All tenants are responsible for contributing 30% of their
monthly adjusted income or 10% of their gross monthly

1
As the “beneficiaries” at issue in this opinion are those Section 8
recipients who have already secured and are currently leasing apartments
that are paid for, in part, by Section 8 subsidies, the terms “beneficiary”
and “tenant” are used interchangeably throughout the opinion.
2
The public housing agency must request approval to establish a
payment standard outside of this range. 24 C.F.R. § 982.503(b)(2). The
Department of Housing and Urban Development may approve such a
variance if the public housing agency meets one of the prescribed
exceptions. See 24 C.F.R. § 982.503(c)–(d).
 NOZZI V. HACLA 7

income, whichever is greater. 42 U.S.C. § 1437f(c)(2)(A).3
Tenants whose rental units cost more than the payment
standard have a higher expected contribution. Such tenants
must also pay any amount by which their rent exceeds the
established payment standard. 42 U.S.C. § 1437f(o)(2)(B).4
In either case, the subsidy covers the balance of the rent.

B. Procedures for Decreasing the Payment Standard

Practically, the formula for calculating a tenant’s
expected rent contribution means that a decision by the public
housing agency to increase the payment standard will
generally yield larger subsidies. By contrast, a decrease in
the payment standard will generally decrease subsidies and
may increase the rental contribution of a substantial number
of tenants.5

3
This calculation must account for any welfare assistance tenants
receive that is specifically designated for housing costs. 42 U.S.C.
§ 1437f(o)(2)(A)(iii).
4
An example helps to illustrate this formula. Abel and Beth both must
contribute 30% of their monthly adjusted income, for a total of $100 each.
The payment standard for one-bedroom apartments in their area is $400.
Abel rents a $400 apartment. He must pay $100 towards his rent and will
receive the remaining $300 as a rent subsidy. Beth rents a $500
apartment. She must pay the $100 from her monthly adjusted income, but
must also pay the amount by which her $500 apartment exceeds the $400
payment standard–another $100, for a total of $200.
5
In the hypothetical above, if the public housing agency lowered the
payment standard for a one-bedroom apartment in the area from $400 to
$300, Abel, who is renting a $400 apartment, would now need to pay an
additional $100 for a total of $200. Beth, who is renting a $500
apartment, would need to pay an additional $200, for a total of $300. A
decrease in the payment standard would not cause an increase in rent
when: (1) the total rent for the unit is less than the lower payment
8 NOZZI V. HACLA

To avoid any hardship caused by this change, the
Department of Housing and Urban Development’s
regulations are designed to ensure that beneficiaries have a
one-year period of stable benefits in which to plan for
changes to the payment standard that may adversely affect
their subsidy amount and rent contribution. Each year, the
public housing agency conducts annual examinations of each
beneficiary, usually on the anniversary of the beneficiary’s
entry into the Section 8 program, to verify his continued
eligibility for benefits and to calculate his expected rent
contribution for the current year. 24 C.F.R. § 982.516.
Alterations to a tenant’s benefits may occur due to
circumstantial changes, such as adjustments to the tenant’s
income, family composition, or cost to rent his apartment, but
the regulations limit the discretion of public housing agencies
to lower subsidies based on adjustments to the payment
standards. If the public housing agency decides to lower the
payment standards, it must provide information about the
change to all beneficiaries at their annual reexaminations
following the decision, and must further advise these
beneficiaries that the change will not go into effect until their
following reexamination one year later. See 24 C.F.R.
§ 982.505(c)(3).

This requirement provides some measure of financial
stability for vulnerable Section 8 beneficiaries as it protects
against sudden decreases in subsidy at the whims of the
public housing agency. Absent any changes to a
beneficiary’s circumstances, he can be assured that his
subsidy will renew with, at a minimum, the same terms as the

standard, (2) the tenant’s adjusted income has also decreased, or (3) the
public housing agency later raised the payment standard before the
decrease went into effect.
 NOZZI V. HACLA 9

prior year unless he had previously been warned that the
public housing agency has taken an action that could
adversely affect his subsidy. The regulations cast this
warning in terms of the public housing agency’s duty to
provide information to the beneficiary that the payment
standard has been decreased, to be effective at least a year
afterward. Thus, under that mandatory procedure, the
beneficiary necessarily has an expectation in an unaffected
one-year term of benefits following the warning in which to
plan for the change’s potential adverse impact.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. Implementation of the 2004 Payment Standard
Decrease

The Housing Authority of the City of Los Angeles
(“Housing Authority”) administers the Voucher Program for
that city.6 In 2004, the Department of Housing and Urban
Development required the Housing Authority to limit
spending in order to balance the Department’s 2004 budget.
To meet the budget constraints, the Housing Authority’s
Board of Commissioners reduced the payment standard from
110% of the 50th percentile of rents in Los Angeles County
to 100% of the 40th percentile of rents. At the time, the
Board estimated that “approximately 45% of its
approximately 45,000 Section 8 tenants would be adversely
affected by the April 2004 decrease, and would have to pay
an average of $104 more in rent each month if they chose to
remain in their current units. Of this number, nearly 5,000

6
The plaintiffs in this case also sued the Executive Director of the
Housing Authority for the City of Los Angeles. Throughout the opinion,
both defendants will be referred to as the “Housing Authority.”
10 NOZZI V. HACLA

were elderly families, and nearly 4,500 were non-elderly,
disabled families.”7

That year, the Housing Authority instructed its staff to
attach a copy of a flyer to each Section 8 beneficiaries’
“notice of review determination” or “RE-38,” which is a form
sent annually to all Section 8 beneficiaries at the time of their
annual reexamination that confirms their renewed eligibility
for benefits and sets forth their rent contribution and subsidy
amount for the current year. The flyer, which was printed in
both English and Spanish, stated:

HOUSING AUTHORITY OF THE CITY OF LOS
ANGELES

NOTICE

Effective April 2, 2004 the Housing Authority
lowered the payment standards used to
determine your portion of the rent. We will
not apply these lower payment standards until
your next regular reexamination. If you
move, however, these new lower payment
standards will apply to your next unit.

That message was followed by (1) a heading stating
“PAYMENT STANDARDS AND TENANT-BASED
SHELTER PLUS CARE PAYMENT STANDARDS
EFFECTIVE APRIL 2, 2004”; (2) a table listing the new
payment standards; and (3) a statement that “Regardless of its

7
The Board also provided, for the first time, that every tenant must pay
a minimum expected contribution of $50. That change is not at issue in
this case.
 NOZZI V. HACLA 11

location, the unit’s rent can never be higher than the
comparable rents determined by the housing authority.”8 For
simplicity, this will hereinafter be referred to as the “flyer.”
The attached RE-38 form showed the tenant’s subsidy and
rent contribution for the current year, a number that was
unaffected by the decreased payment standards.

Approximately one year later and only thirty days before
the changes to the payment standard were scheduled to be
implemented and to adversely affect the tenants’ subsidies
and rent contributions, the Housing Authority sent out
another notice of review determination. This particular
notice, which will hereinafter be referred to as the “four-week
notice,” set forth the tenants’ subsidies and rents for the
upcoming year using the new, lowered payment standard.
This was the first time that tenants were actually notified that
the change would affect them personally or that there would
be an increase to their rent contributions.

B. The Impacted Beneficiaries Sue

In 2007, Plaintiffs Michael Nozzi and Nidia Palaez,
together with the Los Angeles Coalition to End Hunger and
Homelessness, filed an amended class action complaint on
behalf of affected Section 8 beneficiaries against the Housing
Authority and its Executive Director.9 They claimed that, as

8
See Appendix A.
9
Plaintiff Los Angeles Coalition to End Hunger and Homelessness is a
non-profit devoted to fighting the causes and effects of homelessness. It
advocates for more affordable housing on behalf of low-income
individuals in Los Angeles. Its membership includes people who receive
Section 8 benefits and who have been negatively affected by the 2004
decrease in the payment standard.
12 NOZZI V. HACLA

relevant here, the Defendants’ failure to provide
comprehensible information to Section 8 beneficiaries about
the payment standard change and its effect one year in
advance of the change’s implementation: (1) violated the due
process clauses of the United States and California
Constitutions, (2) violated California Government Code
§ 815.6, which governs liability for public entities that breach
mandatory duties, and (3) constituted negligence pursuant to
California Government Code § 815.2.

Plaintiff Michael Nozzi, a Section 8 beneficiary since
December 2003, is totally and permanently disabled under
Social Security’s standards. As a result of the 2004 change,
his expected rent contribution increased 48%—from $231 to
$342 per month. Plaintiff Nidia Palaez, a beneficiary since
February 2004, is a single mother with a young daughter.
She experienced a 177% increase in her portion of the rent as
a result of the 2004 change. She alleges that this increase has
adversely affected her family’s quality of life, that she has
had difficulty affording suitable school clothes for her
daughter, and that she has had to divert money from her food
budget to cover her increased rent costs.

Both Nozzi and Palaez allege that they did not understand
that their Section 8 benefits would decrease and that their
own rent obligations would increase until they received
notices approximately one year after the flyer, four weeks
before the change in the payment standard adversely affected
their rent contribution. Neither recalls receiving the original
flyer, and neither could comprehend it when it was later
shown to them.
 NOZZI V. HACLA 13

C. The District Court Disposes of Plaintiff’s Claims

On November 26, 2007, the district court for the Central
District of California dismissed the plaintiff’s negligence
claim. The court held that the plaintiffs failed to establish an
essential element for such claims against a public entity: that
a statute imposed a mandatory duty on the entity.10

In early 2009, the parties filed cross-motions for summary
judgment on the remaining issues. With respect to the due
process claims, the Housing Authority argued that the
plaintiffs did not have a property interest protected by the due
process clauses of the United States or California
Constitutions.

Furthermore, the Housing Authority asserted that, even if
the plaintiffs had a protected property interest, they received
sufficient process because the Housing Authority had sent the
flyer and “made significant efforts to increase participants’
awareness of the 2004 VPS reduction through public hearings
and community outreach.” The Housing Authority supported
its position with (1) declarations from Housing Authority
employees summarily stating that all Section 8 beneficiaries
receive instructional training upon entry into the Section 8
program, and (2) minutes of a public meeting and a
PowerPoint presentation used at the meeting discussing
changes to the Housing Authority’s operation, during which
a brief discussion occurred regarding the payment standard
decrease.

10
The district court also dismissed other claims that are not relevant to
this appeal.
14 NOZZI V. HACLA

In response, the plaintiffs argued that they had a
legitimate expectation in continued and stable Section 8
benefits. They challenged the relevance of the Defendants’
purported training sessions and public meetings to the
question whether the Housing Authority provided sufficient
notice to the affected beneficiaries. Furthermore, the
plaintiffs asserted, the only relevant question was whether the
flyer was reasonably comprehensible to the average recipient,
a question unaffected by the Housing Authority’s other
actions.

The district court granted summary judgment in favor of
the Housing Authority on the due process claims and the
remaining state statutory claim, an alleged violation of
§ 815.6. According to the district court, the plaintiffs could
not have a protectable property interest in their Section 8
benefits because the Housing Authority had complete
discretion to reduce the payment standard. The only
restriction, the district court wrote, was 24 C.F.R.
§ 982.505(c)(3), which required the agency to provide notice,
but did not create a property interest protectable by the due
process clauses.

With regard to the California Government Code § 815.6
claim, the district court held that such a claim required the
plaintiffs to show that the Housing Authority had breached a
“mandatory duty” imposed by statute. The court reasoned
that even if 24 C.F.R. § 982.505(c)(3) or the due process
clauses created such a duty, there was no basis on which to
conclude that the Housing Authority had breached its
obligations under that regulation.
 NOZZI V. HACLA 15

D. Nozzi I

On appeal, a different panel of this Court reversed. Nozzi
v. Housing Authority of the City of Los Angeles (“Nozzi I”)
(mem.), 425 F. App’x 539 (9th Cir. 2011). With regard to the
plaintiffs’ due process claims, we held that the district court
“improperly concluded that plaintiffs’ property interest in
Section 8 benefits did not require adequate notice that their
benefits were subject to the planned reduction.” 425 F.
App’x at 541. To begin with, the plaintiffs had a “well-
settled property interest” in Section 8 benefits because “the
statute, in tandem with regulatory requirements ‘restrict[ing]
the discretion’” of the Housing Authority, “protected against
an abrupt and unexpected change in benefits.” Id.11 We
remanded for the district court to apply the Mathews v.
Eldridge balancing test to determine if the Housing
Authority’s notice was sufficient.12 Id.

11
In so holding, the prior panel held that the grant of summary judgment
in favor of the defendants was inappropriate because there was a material
issue of fact as to whether the steps taken by the Housing Authority
protected against a sudden change in benefits. The majority did not find
it necessary, for purposes of reversing the district court’s grant of
summary judgment, to address the merits of the plaintiffs’ contentions that
they had a right to a stable one-year term of benefits and that any steps by
the Housing Authority taken less than one year before the change would
be insufficient to protect this interest.
12
As described in greater detail below, Mathews v. Eldridge, 424 U.S.
319 (1976) requires courts, when determining what process is due to
protect an interest covered by the due process clause, to examine (1) the
private interest that will be affected by an official action; (2) the risk of
erroneous deprivation of such interest through the procedures used, and
the probable value of additional or substitute safeguards; and (3) the
government’s interest, which includes the administrative burdens of
additional or substitute procedures. Id. at 335.
16 NOZZI V. HACLA

As for the California Government Code § 815.6 claim, we
noted that the statute permits private individuals to sue public
entities when three elements have been met: (1) there is an
enactment imposing a mandatory duty, (2) that enactment is
intended to protect the individual from the type of injury
suffered, and (3) the breach of the mandatory duty was the
proximate cause of the injury suffered. Id. We held that the
“district court incorrectly concluded that the notice provided
by defendants satisfied the mandatory duty in § 982.505 to
provide one-year notice before implementing the reduced
[payment standard].” Id. The notice required by the
regulation must be, “[a]t a minimum,” “sufficiently effective
to protect housing benefits recipients from an abrupt and
unexpected reduction in benefits.” Id. Accordingly, this
Court remanded the § 815.6 claim for further consideration.13

Finally, we held that the district court’s dismissal of the
plaintiffs’ state law negligence claim was “erroneous”
because public entities “may be held vicariously liable for the
negligent acts of their individual employees” under California
Government Code § 815.2. Id. This claim was also
remanded for further consideration.

E. Remand and the Current Appeal

On remand from Nozzi I, pursuant to a jointly agreed
upon phased discovery plan, the plaintiffs sought discovery
of the identities of Section 8 tenants who had been sent the
flyer and whose benefits were ultimately affected by the
decreased payment standard. They also sought discovery

13
Again, for the purposes of reversing summary judgment in favor of the
defendants, the prior panel did not find it necessary to address whether
plaintiffs’ had a right to a stable one-year term of benefits.
 NOZZI V. HACLA 17

pertaining to any training sessions and public outreach efforts
by the Housing Authority that concerned the payment
standard. Before the completion of discovery, the Housing
Authority filed a renewed motion for summary judgment.
The plaintiffs objected that ruling on summary judgment
should be deferred under Federal Rule of Civil Procedure
56(d), which allows the court to defer considering a motion
for summary judgment when the nonmovant shows that it
cannot yet present facts essential to its opposition. The
Housing Authority disagreed, arguing that no further
discovery was necessary.

The district court ignored the plaintiffs’ request for more
discovery and issued a tentative ruling granting summary
judgment to the Housing Authority which it later reduced to
a final judgment. In that order, the district court determined
that, applying the Mathews test, plaintiffs received
constitutionally adequate process. Specifically, the district
court reasoned, the flyer, training sessions, public outreach
meetings, and four-week notice provided more than enough
notice to Section 8 beneficiaries.

With regard to the California Government Code § 815.6
claim, the district court rejected the plaintiffs’ claim that the
notice provided was not adequate, and held that the totality of
the Housing Authority’s efforts protected plaintiffs from an
“abrupt” and “unexpected” reduction in their Section 8
benefits. Finally, the court held that the Housing Authority
could not be vicariously liable for the conduct of its
employees, because its employees did not breach any
mandatory duty owed to the plaintiffs. This appeal followed.
18 NOZZI V. HACLA

III. STANDING AND STANDARD OF REVIEW

As an initial matter, the Housing Authority claims that the
plaintiffs lack standing to bring this action. It is incorrect. To
establish standing, plaintiffs must establish that they have:
(1) an injury in fact, (2) that is “fairly traceable to the
challenged action of the defendant” and (3) that is “likely to
be redressed by a favorable decision.” Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560–61 (1992) (quotation marks
omitted). Here, the plaintiffs alleged that the Housing
Authority decreased the amount of their Section 8 benefits
and therefore increased the amount they had to pay in rent
without adhering to the protections required by due process
and by Voucher Program regulations. As the Supreme Court
has held, “[w]hen the suit is one challenging the legality of
government action or inaction” and “the plaintiff is himself
an object of the action . . . there is ordinarily little question
that the action or inaction has caused him injury[.]” Id. at
561–62. Plaintiffs request compensatory damages, as well as
declaratory and injunctive relief, for uncompensated injuries
that were ongoing when they filed their complaint. As a
result, they met all three standing requirements.

We review the district court’s grant of summary judgment
to the Housing Authority for each claim de novo and must
determine whether, “viewing the evidence in the light most
favorable to the non-moving party, there are any genuine
issues of material fact and whether the district court correctly
applied the substantive law.” Leisik v. Brightwood Corp.,
278 F.3d 895, 898 (9th Cir. 2002).14 If we determine that

14
Plaintiffs also contend that the district court abused its discretion in
denying their motion to postpone consideration of the Defendants’ motion
for summary judgment until the completion of discovery. Because we
 NOZZI V. HACLA 19

there are no genuine issues of material fact remaining, that
the Housing Authority does not prevail, and that it has had a
“full and fair opportunity” to present its case, we may
consider whether plaintiffs are entitled to summary judgment.
Albino v. Baca, 747 F.3d 1162, 1176 (9th Cir. 2014) (en
banc). Here, we also consider, at the plaintiffs’ request,
whether to reassign this case to a different district judge,
which we may do only when a party can show “personal
biases or unusual circumstances,” such as when the district
judge can be reasonably expected to have substantial
difficulty setting aside his previous impressions of the case or
when reassignment is desirable in order to preserve the
appearance of justice. Krechman v. Cnty. of Riverside,
723 F.3d 1104, 1111 (9th Cir. 2013).

IV. PROCEDURAL DUE PROCESS

A. The Contours of the Plaintiffs’ Property Right

The Due Process Clause of the Fourteenth Amendment
imposes procedural constraints on governmental decisions
that deprive individuals of liberty or property interests.
Mathews, 424 U.S. at 332 (1976).15 Thus, the first question

hold that granting summary judgment in favor of the defendants was
improper for other reasons, and because there is no cause for further
discovery on the summary judgment issues following remand, we need not
address this contention.
15
The language of Article I § 7 of the California Constitution is
“virtually identical” to the Due Process Clause of the United States
Constitution, with the caveat that California courts place a higher
significance on the dignitary interest inherent in providing proper
procedure. Today’s Fresh Start, Inc. v. Los Angeles Cnty. Office of
Education, 303 P.3d 1140, 1150 (Cal. 2013). Recognizing this difference,
20 NOZZI V. HACLA

in any case in which a violation of procedural due process is
alleged is whether the plaintiffs have a protected property or
liberty interest and, if so, the extent or scope of that interest.
Board of Regents of State Colleges v. Roth, 408 U.S. 564,
569–70 (1972). The property interests that due process
protects extend beyond tangible property and include
anything to which a plaintiff has a “legitimate claim of
entitlement.” Id. at 576–77. A legitimate claim of
entitlement is created “and [its] dimensions are defined by
existing rules or understandings that stem from an
independent source such as state law—rules or
understandings that secure certain benefits and that support
claims of entitlement to those benefits.” Id. at 577. Further,
as we have previously held, plaintiffs have a protected
property right in public benefits when, as here, a statute
authorizes those benefits and the “implementing regulations”
“greatly restrict the discretion” of the people who administer
those benefits. See Griffeth v. Detrich, 603 F.2d 118, 121
(9th Cir. 1979).

Thus, as we held in Nozzi I, the plaintiffs here have a
property interest in Section 8 benefits to which the procedural
protections of the due process clause apply. 425 F. App’x at
541 (“Section 8 participants have a property interest in
housing benefits[.]”); Ressler v. Pierce, 692 F.2d 1212,
1215–16 (9th Cir. 1982) (“In addition, [the plaintiff] has a
constitutionally protected ‘property’ interest in Section 8
benefits by virtue of her membership in a class of individuals
whom the Section 8 program was intended to benefit.”); see
also Roth, 408 U.S. at 576 (“[A] person receiving . . . benefits

we nevertheless address the plaintiffs’ federal and state due process claims
together, as it is unnecessary to take the additional factor into account in
this case.
 NOZZI V. HACLA 21

under statutory and administrative standards defining
eligibility for them has an interest in continued receipt of
those benefits that is safeguarded by procedural due
process.”); Holbrook v. Pitt, 643 F.2d 1261, 1278 (7th Cir.
1981) (“Courts have held in a variety of circumstances that
certified tenants in Section 8 programs have protectable
property interests under the due process clause.”).

The “dimensions” of the property interest here “are
defined by existing rules . . . or understandings that secure
certain benefits”—in this case, the Voucher Program statute
and regulations. See Roth, 408 U.S. at 577. These
regulations limit the Housing Authority’s discretion to alter
tenants’ subsidies through changes to the payment standard
unless tenants have been advised of the change and notified
that the reduced standard will not be implemented for at least
a full year afterwards. See 24 C.F.R. § 982.505(c)(3); see
also Nozzi I, 425 F. App’x at 541–42 (“[T]he Section 8
regulations ‘closely circumscribe’ [the Housing Authority’s]
discretion—by prohibiting [it] from immediately
implementing a reduced [payment standard] and requiring [it]
to inform participants that a reduced [standard] will be
implemented[.]”). This mandatory one-year postponement is
designed to serve as an “equitable . . . safeguard[] against
reductions in subsidy.” Section 8 Housing Choice Voucher
Program; Expansion of Payment Standard Protection, 65 Fed.
Reg. 42508-01, 42508 (July 10, 2000).

Thus, plaintiffs’ property right extends beyond Section 8
benefits generally. The protected property right is in housing
benefits that continue in existence for a period of at least one
year after the beneficiary is advised that his benefits may be
decreased by a change to the payment standard. The tenant
can budget for annual leases, plan for any drastic changes,
22 NOZZI V. HACLA

and take steps to avoid his family’s eviction, secure in the
knowledge that his benefits will not be adversely affected
during the extended period his property rights remain in
effect.

The district court and the Housing Authority heavily rely
on Rosas v. McMahon, 945 F.2d 1469 (9th Cir. 1991) to
support the argument that the plaintiffs do not have a
protected property interest, but that case is inapplicable. In
Rosas, the local agency provided notice of a change to
welfare benefits 10 days before its implementation, as
required by a regulation. Id. at 1472. The plaintiffs insisted
that they were entitled to an earlier notice about which the
statutes and regulations said nothing. Id. at 1474. This court
rejected the plaintiffs’ claim and held that welfare recipients
had no right to notice of the “passage of statutes” which
reduced their benefits or to a “grace period” before benefits
were reduced. Id. at 1473–74.

Rosas, however, relied on the fact that there was no “pre-
existing regulation intended to forestall the implementation
of a congressionally mandated program change until
[program participants] were provided with notice of that
change.” Id. at 1475. Where, as here, a pre-existing
regulation does forestall the implementation of a reduction in
benefits for a one year period, it is the plaintiffs’ property
interest in that term of benefits that procedural due process
protects.16 Accordingly, the question in this case is not

16
Similarly, as the prior panel noted, the district court and the Housing
Authority’s reliance on Atkins v. Parker, 472 U.S. 115 (1985) is
misplaced. In that case, Congress changed the eligibility standards
required for benefits under the Food Stamp Act. There, the Court held
that “Congress has plenary power to define the scope and duration of the
 NOZZI V. HACLA 23

whether the plaintiffs have an interest protected by due
process—it is clear that they do—but rather “[w]hat process
is due to protect plaintiffs’ well-settled property interest.”
Nozzi, 425 F. App’x at 542.

B. The Process Due

Once a substantive right has been created, “it is the Due
Process Clause which provides the procedural minimums, and
not a statute or regulation.” Geneva Towers, 504 F.2d at 491
n.13; Nozzi, 425 F. App’x at 542 (“Technical compliance
with regulatory procedures does not automatically satisfy due
process requirements.”). For this reason, in analyzing the
plaintiffs’ due process claim, we do not address whether the
Housing Authority complied with the requirements of 24
C.F.R. § 982.505(c)(3), but whether the Housing Authority
complied with the requirements of the due process clause.
We conclude that it failed to do so, and indeed, that the flyer
was totally inadequate for that purpose.

Procedural safeguards come in many forms, including,
inter alia, “timely and adequate notice,” pre-termination
hearings, the opportunity to present written and oral
arguments, and the ability to confront adverse witnesses. See
Goldberg v. Kelly, 397 U.S. 254, 267 (1970). Which
protections are due in a given case requires a careful analysis
of the importance of the rights and the other interests at stake.

entitlement to food-stamp benefits” and thus welfare recipients were not
deprived of due process by Congress’s adjustment. Id. at 129. The
Housing Authority, however, does not have plenary power to implement
a change in the payment standard. Rather its authority is limited to
changing the amount of assistance one year or more after it has informed
beneficiaries of the change.
24 NOZZI V. HACLA

Mathews v. Eldridge, 424 U.S. 319, 334–35 (1976); Mullane
v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314
(1950). Accordingly, in Mathews v. Eldridge, the Supreme
Court set forth a three-part inquiry to determine whether the
procedures provided to protect a liberty or property interest
are constitutionally sufficient. 424 U.S. at 334–35. First,
courts must look at the nature of the interest that will be
affected by the official action, and in particular, to the
“degree of potential deprivation that may be created.” Id. at
341. Second, courts must consider the “fairness and
reliability” of the existing procedures and the “probable
value, if any, of additional procedural safeguards.” Id. at 343.
Finally, courts must assess the public interest, which
“includes the administrative burden and other societal costs
that would be associated with” additional or substitute
procedures. Id. at 347.17 Here, plaintiffs request notice of
any intended changes to their housing subsidies provided at
least one year in advance of the change.

17
As the district court noted, the Supreme Court applies a streamlined
test when the only question to be decided is whether the government has
provided sufficient notice and there is no request for further procedural
safeguards. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306
(1950). Under Mullane, courts must determine whether the notice given
was “reasonably calculated, under all the circumstances, to apprise
interested parties of the pendency of the action and afford them an
opportunity to present their objections.” Id. at 314. If we were to review
this case ab initio, we might simply apply Mullane to the facts of this case,
as might well be appropriate. See Dusenbery v. United States, 534 U.S.
161, 167–68 (2002). Because the prior panel instructed the district court
to apply Mathews, we also conduct our due process analysis in terms of
the Mathews test. We note, however, that the choice of test is not
dispositive here. For reasons that we explain below, the notice afforded
to the plaintiffs in this case was insufficient under either test.
 NOZZI V. HACLA 25

1. The Private Interest at Stake

First, the private interest at stake in this case and the
“degree of potential deprivation,” Mathews, 424 U.S. at 341,
is substantial. The 2004 decrease in payment standards
affected Section 8 beneficiaries’ rent by an average of $104
per month, a deprivation that could be “very serious to a poor
person.” Geneva Towers, 504 F.2d at 492; see also Escalera
v. New York City Hous. Auth., 425 F.2d 853, 864 (2d Cir.
1970) (“[E]ven small charges can have great impact on the
budgets of public housing tenants, who are by hypothesis
below a certain economic level.”). For plaintiffs Nozzi and
Palaez, the payment standard yielded 48% and 177%
increases in their respective rent obligations. This reduction
in a tenant’s subsidies and accompanying increase in the cost
of housing “could force tenants to forego other perhaps
necessary purchases and could even force some tenants to
seek other less expensive housing.” Geneva Towers,
504 F.2d at 491.

Furthermore, for many Section 8 beneficiaries, subsidies
from the Voucher Program for a stable and renewable one-
year term are the difference between safe, decent housing and
being homeless. A tenant’s inability to pay for an unexpected
increase in his portion of the rent and utilities could result in
eviction, which ultimately would require the public housing
agency to terminate benefits, U.S. Dep’t of Housing & Urban
Dev., Housing Choice Voucher Program Guidebook, at 15-1,
5, and render it impossible for the tenant to pay for a new
unit. This deprivation is especially dire considering the
vulnerability of Section 8 recipients, a large portion of whom
are elderly or disabled, and many of whom, like Plaintiff
Pelaez, have young children.
26 NOZZI V. HACLA

2. The Risk of Erroneous Deprivation

Turning to the second Mathews inquiry, we must examine
whether the procedures provided to the plaintiffs risked
erroneous deprivation of their right to stable and renewable
Section 8 benefits, as well as the value of any additional
safeguards. Plaintiffs here simply request fair notice: simple
and unadorned, reasonably comprehensible notice provided
at least one year in advance of the change. Thus, to
determine the fairness and reliability of the safeguards
provided by the Housing Association and the probative value
of this requested safeguard we look—as the district court
did—to Mullane and its progeny for guidance.

“[W]hen notice is a person’s due, process which is a mere
gesture is not due process.” Mullane, 339 U.S. at 314. To be
constitutionally adequate, notice must be “reasonably
calculated, under all the circumstances, to apprise interested
parties . . . with due regard for the practicalities and
particularities of the case[.]” Id. at 314. The means employed
must be “reasonably certain” to “actually inform” the party,
id., and in choosing the means, one must take account of the
“capacities and circumstances” of the parties to whom the
notice is addressed, Goldberg, 397 U.S. at 268–69; Memphis
Light, Gas & Water Division v. Craft, 436 U.S. 1, 14 n.15
(1978).

The flyer was, without doubt, entirely insufficient to meet
this standard. In no respect does it reasonably inform its
intended recipients of the changes to the payment standard,
the meaning of those changes, or, most important, their effect
upon the recipient. Because of this, Section 8 beneficiaries
were not meaningfully advised regarding the payment
standard and were, accordingly, deprived of their right to a
 NOZZI V. HACLA 27

one-year term of stable benefits in which to plan for the
impending potential hardship.

To begin with, the flyer, which essentially mirrored the
language of 24 C.F.R. § 982.505(c)(3), is incomprehensible
to anyone without a relatively sophisticated understanding of
the Voucher Program’s payment calculations. It uses the
term “payment standards” six times without ever defining or
explaining the term’s meaning. A short and simple
explanation, such as “this means that the Housing Authority
has reduced the maximum amount it will contribute towards
recipients’ rent,” would have provided at least a small
measure of clarity. The absence of such a minimal statement
is particularly troublesome because, to the ordinary Section
8 beneficiary, the flyer might well suggest that the
beneficiary’s expected rent contribution would decrease. See
ER 117 (“Effective April 2, 2004 the Housing Authority
lowered the payment standards used to determine your
portion of the rent.”). Moreover, the flyer which stated that
the change to the payment standards was “[e]ffective April 2,
2004” was attached to an RE-38 that showed the tenant’s
expected rent contribution for the current year. This could be
confusing to many tenants as that number was unaffected by
the change and could give the impression that the change to
the payment standard would not affect the tenant’s subsidy
amount at all—indeed that his subsidy would be higher than
the lower payment standard should allow.

Further, the flyer in no way explained the potential effect
of the change: that it could potentially increase the tenant’s
expected rent contribution and decrease his subsidy. Indeed,
as the Housing Authority estimated at the time, this change
would affect roughly 45% of Section 8 beneficiaries and
require them to pay an average of $104 more in rent each
28 NOZZI V. HACLA

month. None of this information, however, was included in
the flyer. Finally, the flyer was devoid of any name, address,
or other information that Section 8 beneficiaries could contact
for assistance understanding the flyer’s contents. The totality
of these deficiencies makes it is impossible to say that the
flyer was reasonably calculated to give notice to the average
recipient, or possibly even to the average reasonable jurist.18

The Housing Authority relies upon three actions that it
asserts correct this failure inherent on the face of the flyer.
None does so, singly or collectively. As discussed, absent
circumstantial changes such as an increase in income or
change in family composition, the plaintiffs had a legitimate
expectation in a one-year term of stable Section 8 benefits.
The first of the Housing Authority’s actions that it cites is the
four-week notice, which was sent only thirty days before the
increase in the tenants’ rent contribution was scheduled to be
implemented. This notice could not possibly provide notice
a full year in advance of the scheduled change.19

18
Similarly unavailing is the Housing Authority’s reliance on a letter
purportedly sent to all beneficiaries on April 19, 2005. The Housing
Authority did not assert that this letter is in the record, nor is there any
evidence of it being so. It is only mentioned in passing in a discussion in
the deposition of one of the Housing Authority’s employees. That
employee declared only that it was “similar to” the flyer. For the reasons
already discussed, any letter that was simply “similar to” the flyer would
be inadequate to provide the necessary notice for the same reasons as the
flyer itself. Furthermore, the letter, like the four-week notice discussed in
the next paragraph, was sent too late to have been of any use to many
beneficiaries.
19
The Housing Authority relies on Willis v. United States, 787 F.2d
1089 (7th Cir. 1986) for the proposition that this Court should consider
subsequent steps like the four-week notice. That case is of no relevance.
There, a plaintiff claimed that procedures attending the forfeiture of his
 NOZZI V. HACLA 29

The two other actions consisted of general advice offered
prior to the receipt of the flyer: the holding of “public
outreach meetings” and the conducting of “training sessions.”
Both fell woefully short of advising the Section 8 recipients
of the meaning or effect of the change in the payment
standards.

First, the public outreach meetings cannot serve to render
the Housing Authority’s deficient notice consistent with due
process. In 2004, the Housing Authority held several
meetings about significant changes to the agency’s operations
that were open to the public. A number of topics were
discussed at these meetings, including the challenges faced by
the Housing Authority in implementing the Section 8
program, the use of criminal background and credit checks of
Section 8 beneficiaries, the portability of Section 8 benefits
across apartments, and the Housing Authority’s efforts to
stabilize rent in the area. As the Housing Authority noted,
“part of the discussion” at these meetings, among the other
topics listed, were changes to the payment standard and the
impact on Section 8 beneficiaries.

These general meetings, however, are no substitute for
notice provided directly to the individual tenants. As Mullane

automobile did not comport with the requirements of due process because
he only received a form letter containing nothing more than “legal
‘jargon.’” Id. at 1093. The Seventh Circuit held that, while there was “no
question that the language in the letter Willis received would not be
adequate notice in itself,” that letter in combination with a second letter
enclosed within the same envelope adequately informed Willis of the
forfeiture proceedings. Id. Unlike Willis, however, the Housing
Authority’s four-week notice was not contemporaneous with the flyer, and
therefore could not possibly help Section 8 beneficiaries comprehend the
legal jargon in the flyer at the time it was to be read.
30 NOZZI V. HACLA

established, “[w]here the names and post addresses of those
affected . . . are at hand, the reasons disappear for resort to
means less likely than the mails to apprise” affected persons.
339 U.S. at 315 (emphasis added). The Housing Authority
certainly knew the names and addresses of the Section 8
tenants for whom it was supplying housing benefits, and
indeed sent the flyers directly to the tenants, but it failed to
provide an understandable notice directly to them at the time
it would be relevant to the loss or diminution of their
benefits.20 All things considered, therefore, the public
outreach meetings were not “reasonably certain to inform
those affected” of the change to the payment standard, or the
effect of such change. Mullane, 339 U.S. at 315 (emphasis
added). Indeed, even construed most favorably to the
Housing Authority, the outreach meetings when considered
along with all the other factors in this case fail to raise a
genuine issue of fact as to whether the steps taken by the
Housing Authority provided constitutionally adequate notice
of the potential change to the plaintiffs’ property rights.

Second, the training sessions held by the Housing
Authority, even when considered along with all the other
factors relied on by the Authority, also cannot have rendered
the flyer “reasonably certain to inform” the average Section
8 beneficiary of the potential reduction in benefits to occur
one year later. Federal regulations require that the Housing
Authority give certain information to beneficiaries when they

20
The Housing Authority manages the benefits of approximately 45,000
Section 8 beneficiaries, around 45% of whom were estimated to have been
adversely affected by the changes to the payment standards. The Housing
Authority’s agent did not recall how these beneficiaries were informed of
the time and place of these meetings, nor could she recall whether more
than 50 people attended the meeting that she attended.
 NOZZI V. HACLA 31

are first selected to participate in the Voucher Program. 24
C.F.R. § 982.301. According to declarations from Housing
Authority employees, the Authority fulfills this requirement
by requiring all new beneficiaries to attend a one hour
“Session,” during which Housing Authority staff explains to
the new beneficiaries how a tenant’s rent contribution is
calculated, which includes an explanation of the term
“payment standard.” The Housing Authority argues that this
explanation served to give sufficient meaning to the contents
of the otherwise incomprehensible flyer.

For many affected beneficiaries, however, this
information was provided years before the flyer was sent.
For others, it may have been only a period of up to twelve
months. As Mullane makes clear, the fact that the Housing
Authority provided tenants with this information “months and
perhaps years in advance” of the change to the payment
standard does not justify “dispensing with a serious effort to
inform [the beneficiaries] personally” of the change to their
benefits at a time the information would be directly
meaningful. Mullane, 339 U.S. at 318.21 Thus, regardless of

21
Mullane dealt with the question of what notice was sufficient to
apprise beneficiaries of a judicial settlement of accounts in a common trust
fund. In that case, when the common trust fund was created, the trust
company mailed a notice to every person who might be entitled to a share
of the fund’s income. That notice included copies of state statutes that
explained that a judicial settlement of accounts would periodically occur
after the fund’s establishment, and that participants would be notified of
the settlement through publications in their local newspaper. The
Supreme Court held that this procedure failed to comply with the
requirements of due process and that the trustee was required to undertake
a “serious effort to inform [those affected] personally of the accounting.”
Most relevant to this case, the Supreme Court held that the trustee could
not dispense with this effort merely because it had previously provided
information to those affected. Instead, the Court held, those affected must
32 NOZZI V. HACLA

whether the term “payment standard” was explained to
tenants years or months before the flyer was sent, the
Housing Authority was required to send a timely notice that
provided meaningful information about the change to the
payment standard and the change’s potential adverse effect on
the tenant’s benefits.

Furthermore, the payment standard was far from a
primary subject of the Housing Authority’s one-hour
introductory Session to the Section 8 program. At that
Session, information must be provided to new beneficiaries
regarding: where they may lease a unit, which landlords may
be willing to lease a unit to them, how long they have to find
a unit, how they may request an extension, the advantage of
choosing to live in an area that does not have a high
concentration of low-income families, how to complete the
forms required to request approval of a rental unit, 24 C.F.R.
§ 982.301, how people with disabilities can request a
reasonable accommodation, the amount of utilities that a
tenant would be allowed to use, and what steps tenants can
take to avoid housing discrimination. In that same one hour
period, the Housing Authority also attempted to explain how
the Voucher Program worked generally, including the
formula used to calculate a tenant’s portion of the rent and the
complicated and convoluted role that the payment standards
play in that calculation.

In light of the overwhelming amount of information and
the complex and variegated subject matter involved, any data
as to the meaning and effect of payment standards would
likely not be retained for a number of years or even a number

be informed, at the time of the impending settlement, “that steps were
being taken affecting their interests.” Id. at 318 (emphasis added).
 NOZZI V. HACLA 33

of months by the average Section 8 beneficiary. It certainly
could not make the flyer, which was confusing, inadequate,
and indeed unintelligible on its face, “reasonably certain” to
inform Section 8 beneficiaries of a potential reduction in their
subsidies to take place one year after receipt of the flyer.
Mullane, 339 U.S. at 318.22 Thus, even when considered
along with all the other factors relied on by the Housing
Authority, no genuine issue of fact exists with respect to
whether the beneficiaries’ attendance at a Session renders the
otherwise wholly inadequate flyer compliant with due
process.

In sum, there can be no genuine dispute of fact as to
whether the Housing Authority provided constitutionally
adequate notice of the change to the payment standard, or
more important, the meaning and effect of the change on the
plaintiffs’ Section 8 benefits. The Housing Authority simply
failed to do so. The simplest means of ensuring adequate
notice was the means requested by the plaintiffs: a simple
and clear letter, written in plain English (or Spanish), mailed
directly to the plaintiffs one year in advance of the date of the
change’s implementation—a letter that contained an
understandable explanation of the change and the effect of
that change on Section 8 benefits; in other words, a flyer that
met the requirements of due process.

22
Although we assume for the purposes of the above analysis that all
beneficiaries actually attended one of these required Sessions, we note that
some evidence suggests that not all beneficiaries actually did so. Plaintiff
Pelaez states, for example, that she did not remember attending a training
session, and has no recollection of “ever having the concept of Voucher
Payment Standards explained to [her.]”
34 NOZZI V. HACLA

A proper notice would have made plaintiffs aware of the
seriousness of the Housing Authority’s actions. It might have
stated, for example, that the Housing Authority estimated that
“approximately 45% of [the] approximately 45,000 Section
8 tenants [would] be adversely affected by the April 2004
[payment standard] decrease, and [would] have to pay an
average of $104 more in rent each month if they chose to
remain in their current units.” It might also have provided
beneficiaries with a number to call in case they had questions
about the upcoming change or needed help finding a more
affordable apartment in light of the change. Instead, the
Housing Authority’s flyer failed even to achieve the
minimum that due process requires: an explanation of the
change to the payment standard and its likely effect upon
tenants—an explanation that could reasonably be understood
by the average Section 8 beneficiary. The failure to do so
deprived the plaintiffs of the necessary one-year period of
stable benefits in which to seek to avoid any impending
hardship, and thus, of due process of law.

3. The Burden of Providing the Requested
Procedure

Turning to the third Mathews inquiry, affording the
procedure requested by the plaintiffs would place no burden
on the Housing Authority. The plaintiffs do not ask for a
hearing, an individual meeting, or even an explanation of the
precise amount by which their portion of the rent would
increase. They ask only for an elementary explanation of
what a change to the payment standard means and what effect
it has on tenants’ rights. The Housing Authority’s argument
that it could not have sent a more precise notice because it
could not have prospectively calculated whether the
plaintiffs’ rent would increase at the time it sent the flyer
 NOZZI V. HACLA 35

stems from a fundamental misunderstanding of the plaintiffs’
challenge. The plaintiffs recognize that there are situations in
which a tenant’s subsidies would not decrease despite the
change to the payment standard.23 The plaintiffs merely seek
a uniform notice that adequately explains the effect of the
change in payment standard in a manner sufficient to
reasonably ensure that plaintiffs knew that they might well
have to plan for and adjust to a potential decrease in their
subsidy and an accompanying increase in the rent they must
pay commencing one year from the time they received the
flyer.

Surely this information could be readily incorporated into
the standard form without placing any burden on the
government’s fiscal and administrative resources. There is no
reason to conclude, after all, that “printing six paragraphs of
information is any more burdensome than printing four
paragraphs of information.” Henry v. Gross, 803 F.2d 757,
768 (2d Cir. 1986). Indeed, the Housing Authority printed a
more thorough explanation in letters that it sent to people
other than those directly affected by the change. Around the
same time that the Housing Authority sent the flyer to the
existing tenants, it sent a letter to Voucher Program
beneficiaries who had not yet found a unit to rent. That letter
explained that the payment standard “is the most the Housing
Authority can pay for a unit. If the rent for your unit is
higher, you must pay the difference in rent.” An even clearer
explanation was sent to the Mayor, to members of the Los
Angeles City Council, and to the members of the United
States Congress from California just before the change in the

23
A change in the payment standard would not affect, for example, a
tenant whose entire unit cost less to rent than the new, decreased payment
standard.
36 NOZZI V. HACLA

payment standard was implemented. Those letters explained
that the change to the payment standard “means many tenants
will soon begin paying more rent or, if they choose, move to
a less expensive unit,” and that the “average increase is
estimated at $100/month.”24 Notably missing from the list of
people who received an adequate explanation are the people
who needed it most—the same people that due process
requires receive adequate notice—those Section 8
beneficiaries whose rent might actually be increased by the
change.

Accordingly, all of the Mathews v. Eldridge factors weigh
in favor of the notice that the plaintiffs seek. The Housing
Authority’s flyer, with its total absence of any effort to
explain the payment standard and its relation to tenants’
obligations, was inadequate on its face, and the Housing
Authority has not shown that any additional steps were
reasonably calculated to actually inform the plaintiffs of the
necessary information.25 Moreover, it is beyond dispute that
the Housing Authority could, at no extra cost or expense,

24
The letters sent to high-ranking officials, unlike the flyer that was sent
to the plaintiffs, also provided a list of people who could help the Section
8 beneficiaries with a housing search.
25
We reject the Housing Authority’s arguments that (1) there was a
minimal risk that plaintiffs would have been erroneously deprived of their
property interest because it legally decreased the payment standard and
that (2) any error connected with the notice was harmless because the
“benefit change would have admittedly been the same.” Again, these
arguments stem from a misunderstanding of the nature of plaintiffs’
protected property interest. While the Housing Authority could lawfully
change the payment standard, the plaintiffs have a legitimate expectation
in a one-year term of benefits to plan for and adjust to upcoming changes.
The Housing Authority’s failure to provide adequate notice deprived them
of that right.
 NOZZI V. HACLA 37

have provided the notice that would have afforded the tenants
the due process they requested.

The state due process claims are subject to the same
analysis, except that under state law there is an additional
factor to consider: the “dignitary interest in informing
individuals of the nature, grounds, and consequences of the
action.” Today’s Fresh Start, 303 P.3d at 1150. This factor
strongly favors the plaintiffs. The district court, therefore,
erred in granting summary judgment to the defendants on
both due process claims.

C. Remedy

Ordinarily, where there has not been a cross-motion for
summary judgment, we would reverse and remand to the
district court for further factual development. We conclude,
however, that even when viewing the facts in the light most
favorable to the Housing Authority, there is no genuine
dispute of material fact for a fact-finder to decide. In this
case, therefore, the appropriate remedy is to grant summary
judgment in favor of the plaintiffs nostra sponte.

“We have long recognized that, where the party moving
for summary judgment has had a full and fair opportunity to
prove its case, but has not succeeded in doing so, a court [of
appeal] may enter summary judgment sua sponte for the
nonmoving party.” Albino v. Baca, 747 F.3d 1162, 1176 (9th
Cir. 2014) (en banc); see also Gospel Missions of Am. v. City
of L.A., 328 F.3d 548, 553 (9th Cir. 2003) (“Even when there
has been no cross-motion for summary judgment, a district
court may enter summary judgment sua sponte against a
moving party if the losing party has had a ‘full and fair
opportunity to ventilate the issues involved in the matter.’”
38 NOZZI V. HACLA

(quoting Cool Fuel, Inc. v. Connett, 685 F.2d 309, 312 (9th
Cir. 1982)). So long as the moving party has “be[en] given
reasonable notice that the sufficiency of his or her claim will
be in issue,” Buckingham v. United States, 998 F.2d 735, 742
(9th Cir. 1993), and has therefore had “adequate time to
develop the facts on which the litigant [would] depend to
oppose summary judgment,” Portsmouth Square v.
Shareholders Protective Comm., 770 F.2d 866, 869 (9th Cir.
1985), sua sponte summary judgment is appropriate. Doing
so preserves judicial resources by preventing courts from
having to preside over “unnecessary trials” where no genuine
issues of fact are in dispute, which is consistent with the
overall “objective of [Federal Rule of Civil Procedure 56] of
expediting the disposition of cases.” 10A Charles A. Wright,
Arthur R. Miller & Mary K. Kane, Federal Practice and
Procedure § 2720, at 345 (3d ed. 1998).

The Housing Authority has been afforded ample
opportunity to develop the facts on which it would oppose
summary judgment. To begin with, “[a]s the movant[] for
summary judgment in this case, [the Housing Authority]
w[as] on notice of the need to come forward with all [its]
evidence in support of this motion, and [it] had every
incentive to do so.” Albino, 747 F.3d at 1177. Moreover, the
Housing Authority has had two rounds of litigation in which
to develop the facts necessary to oppose summary judgment.
The issues here are identical to those litigated before the
district court in Nozzi I. At that time, the plaintiffs made a
cross-motion for summary judgment, and the Housing
Authority had a full and complete opportunity to develop
facts to oppose it. On remand, the Housing Authority had the
opportunity to develop additional facts, but it declined to do
so. Instead, it strategically chose to move for a pre-trial
disposition before the close of discovery and effectively cut
 NOZZI V. HACLA 39

short any additional factual development. In short, the
Housing Authority had more than enough notice that the
sufficiency of its defense was at issue.

Despite having this opportunity, the Housing Authority
has not produced evidence suggesting that there is an issue of
material fact that is appropriate for resolution by a fact-finder.
As explained in greater detail above, it is beyond dispute that
the flyer was constitutionally inadequate. On its face, it was
clearly inadequate and failed to provide notice in a form that
Section 8 recipients could comprehend. The Housing
Authority’s subsequent steps cannot solve the flyer’s
deficiency as a matter of law, as those steps occurred too late
to protect the plaintiffs’ legitimate expectation in an
unaffected one-year period of benefits in which to plan for
any adverse effects of the change.

Additionally, the Housing Authority’s reliance on the
training sessions and the public outreach meetings fails to
raise a genuine issue of material fact appropriate for
resolution by a jury. The meetings it held could not, as a
matter of law, have been sufficient to afford the plaintiffs the
notice that due process requires. The training sessions when
beneficiaries first entered the program provided relatively
minimal information on the meaning of “payment standard,”
and this information was provided months or years before the
flyer was sent. Thus, the training sessions cannot have served
to ensure that the confusing and inadequate flyer was
“reasonably certain” to “actually inform” the average
beneficiary that he had one year in which to plan for a
potential reduction to his benefits. Because there are no
genuine issues of material fact as to whether the Housing
Authority complied with the requirements of due process, we
remand with instructions to the district court to grant
40 NOZZI V. HACLA

summary judgment in favor of the plaintiffs on the merits of
their federal and state due process claims.

V. THE OTHER STATE LAW CLAIMS

Next, we turn to the plaintiffs’ allegations that the
Housing Authority violated various provisions of the
California Government Code. California has abolished
common law tort liability for public entities. Miklosy v.
Regents of California, 188 P.3d 629 (Cal. 2008). Thus, under
California law, “‘[a] public entity is not liable for an injury,’
‘[e]xcept as otherwise provided by statute.’” Eastburn v.
Regional Fire Prot. Auth., 80 P.3d 656, 657–58 (Cal. 2003)
(quoting Cal. Gov. Code § 815(a)). Plaintiffs claim that the
Housing Authority is liable under two statutes: (1) California
Government Code § 815.6 which governs liability for public
entities that breach their mandatory duties, and (2) California
Government Code § 815.2 which governs vicarious liability
for public employees’ negligence.

A. California Government Code § 815.6

Under California Government Code § 815.6, a public
entity will be liable to a plaintiff for injury “when (1) a
mandatory duty is imposed [on the public entity] by
enactment, (2) the duty was designed to protect against the
kind of injury allegedly suffered, and (3) breach of the duty
proximately caused injury,” unless the public entity can
“establish that it exercised reasonable diligence” in
discharging this mandatory duty. State Dept. of State
Hospitals v. Superior Court, 349 P.3d 1013, 1018 (Cal.
2015); see also Chaudhry v. City of Los Angeles, 751 F.3d
1096, 1106–07 (9th Cir. 2014). The “mandatory duty”
breached by the public entity must be created by a
 NOZZI V. HACLA 41

“constitutional provision, statute, charter provision, ordinance
or regulation,” Cal. Gov’t Code § 810.6, including federal
regulations, id. § 811.6 (defining “regulation’ as including
federal regulations).26 Further, it must be “obligatory, rather
than merely discretionary or permissive, in its directions to
the public entity,” and must “require rather than merely
authorize or permit, that a particular action be taken[.]” State
Dept. Of State Hospitals, 349 P.3d at 1018–19 (emphasis in
original).

We hold that, even taking the facts in the light most
favorable to the Housing Authority, there can be no dispute
that it is liable under the statute. To begin with, as we have
determined above, the Voucher Program regulations create a
mandatory duty to advise plaintiffs of the change in the
payment standard, the meaning of that change, and its effect
upon them. 24 C.F.R. § 982.505(c).27 The Housing
Authority argues that Section 982.505(c) creates only a duty
to send a one-year notice, with no obligations as to the form
of that notice. This is incorrect. At a minimum, the
information given to the tenants about the change in payment
standards and the one-year period that tenants have to prepare

26
See also Hines v. United States, 60 F.3d 1442, 1448–49 (9th Cir.
1995) (holding that under California law, federal regulation created a
mandatory duty), abrogated on other grounds by United States v. Olson,
546 U.S. 43 (2005); Bowman v. Wyatt, 111 Cal. Rptr. 3d 787, 808 n.10
(Ct. App. 2010) (noting that jury was instructed that mandatory duty under
§ 815.6 could be supplied by federal regulation).
27
Notwithstanding the Housing Authority’s assertion to the contrary, the
fact that there is no federal cause of action to enforce directly 24 C.F.R.
§ 982.505(c)(3) does not defeat plaintiffs’ § 815.6 claim. See Haggis v.
City of Los Angeles, 993 P.2d 983, 988 (Cal. 2000) (“It is section 815.6,
not the predicate enactment, that creates the private right of action.”
(emphasis in original)).
42 NOZZI V. HACLA

for its implementation must be reasonably comprehensible by
the intended recipients. A mandatory obligation to provide
notice includes the obligation to provide an intelligible notice
that can be understood by its average intended recipients and
must convey the information required by the regulation.

Next, it is apparent that the regulation was “designed to
protect against the kind of injury” the plaintiffs suffered.
Haggis, 993 P.2d at 987–88. The regulation was created as
an equitable “safeguard” for tenants “against reductions in
subsidy,” that would give Section 8 beneficiaries one year in
which to plan for adjustments to the payment standard that
could adversely affect their subsidy. Section 8 Housing
Choice Voucher Program; Expansion of Payment Standard
Protection, 65 Fed. Reg. at 42508. Here, because plaintiffs
were not given meaningful information about the change in
the payment standard and its meaning and effect, the
plaintiffs were deprived of the very one-year stable planning
period that the regulation was designed to protect.

Finally, the Housing Authority breached this mandatory
duty and this breach was the proximate cause of injury to the
plaintiffs. As described earlier, the flyer was totally
incomprehensible to anyone without a relatively sophisticated
understanding of the machinations of Section 8 subsidy
payments. It did not provide the average recipient with any
meaningful information about the change or its potential
adverse impact. As with the due process claims, the Housing
Authority argues that no injury could have occurred because
it had total discretion to decrease the payment standard. Once
again, the Authority misunderstands the nature of the
plaintiffs’ challenge. The question here is not whether the
payment standard could be decreased, but whether the
manner in which the Housing Authority implemented the
 NOZZI V. HACLA 43

decrease breached its mandatory duty to provide advance
notice to plaintiffs of the intended action. The answer is that
it did, and that plaintiffs, who experienced an unexpected and
dramatic increase in their rental obligations, suffered from
that breach.

What remains then, is the question whether the Housing
Authority “exercised reasonable diligence to discharge the
duty.” Cal. Gov’t Code § 815.6. As described in greater
detail above, there are extreme deficiencies in the flyer
provided to the plaintiffs. The Housing Authority has had
two opportunities to come forward with evidence in support
of its motion for summary judgment and a further opportunity
to rebut the cross-motion for summary judgment brought by
the plaintiffs in Nozzi I. Despite this, it has fallen far short of
producing evidence sufficient to raise a genuine issue of fact
as to whether it made reasonable efforts to provide
meaningful information to the plaintiffs about the payment
standard change and its adverse effect upon them.

The Housing Authority initially took the position that it
was “impossible” to draft a different, more comprehensible
notice, but that position is plainly contradicted by the
undisputed evidence. The Housing Authority was clearly
capable of explaining the meaning and effect of the payment
standard. It provided a comprehensible notice to Voucher
Program beneficiaries who had not yet found a unit to rent.
Indeed, it provided an even more thorough explanation of the
meaning and effect of the change to the Mayor, members of
the Los Angeles City Council, and California congressmen.

The Housing Authority produced evidence, in the form of
a declaration by the individual who wrote the flyer,
purportedly showing that he exercised reasonable efforts.
44 NOZZI V. HACLA

Even construing this declaration in the light most favorable
to the defendants, however, it is insufficient to raise a genuine
issue of fact as to whether the Housing Authority exercised
reasonable efforts to comply with the regulation. The
declaration states that the employee drafts all of his notices in
language that can be understood by a person with an eighth
grade education. This is a conclusion that is belied by the
evidence. The flyer unquestionably does not explain the
meaning and effect of the change in the payment standard in
any terms at all, let alone in terms that can be understood by
a person with an eighth grade education. The employee
admittedly simply took the flyer’s language directly from the
regulation, and the Housing Authority did not offer any
evidence that he took any steps to ensure that the language
would provide any meaningful information about the change
that would advise the average recipient of its meaning or
effect. Nor did the Housing Authority offer any evidence
suggesting that the employee considered alternatives to
merely parroting the regulation, such as, inter alia, defining
payment standard—as did the letters sent to house-hunting
Section 8 beneficiaries and to the public officials.

Thus, as with the due process claims, the Housing
Authority had ample opportunity to develop facts to support
its defense against the state law claims, but failed to do so.
Accordingly, we reverse the judgment of the district court and
remand with instructions to grant summary judgment in favor
of the plaintiffs on the merits of this statutory claim.

B. California Government Code § 815.2

Under California Government Code § 815.2, a public
entity is “vicariously liable for its employees’ [non-immune]
negligent acts or omissions within the scope of
 NOZZI V. HACLA 45

employment[.]” Eastburn v. Regional Fire Protection
Authority, 80 P.3d 656, 658 (Cal. 2003). The Housing
Authority asserts, and the plaintiffs do not dispute, that
plaintiffs theory of negligence is “essentially
interchangeable” with its § 815.6 claim discussed in Section
V.A above. Indeed, the elements of a vicarious liability claim
against a public entity in California are “virtually identical”
to the elements of a § 815.6 claim. Alejo v. City of Alhambra,
89 Cal. Rptr. 2d 768, 771 & n.3 (Ct. App. 1999); see also San
Mateo Union High School District v. Cnty. of San Mateo,
152 Cal. Rptr. 3d 530, 542–544 (Ct. App. 2013). The above
discussion of the plaintiffs’ § 815.6 claim, therefore, applies
equally to their vicarious liability claim and they are entitled
to summary judgment on the merits of this claim as well.

VI. REASSIGNMENT

Plaintiffs have requested that we use our supervisory
power to reassign this case to a different district judge on
remand. We reassign a case to a different district judge in
“unusual circumstances.” Krechman v. County of Riverside,
723 F.3d 1104, 1111 (9th Cir. 2013). To determine whether
such reassignment is appropriate we look to three factors:
(1) whether the original judge could “reasonably be expected
upon remand to have substantial difficulty in putting out of
his or her mind previously-expressed views or findings
determined to be erroneous or based on evidence that must be
rejected,” (2) whether reassignment is advisable to preserve
the appearance of justice, and (3) whether reassignment
would “entail waste and duplication out of proportion to any
gain in preserving the appearance of fairness.” Id. at
1111–12.
46 NOZZI V. HACLA

On remand from Nozzi I, the district judge made a number
of statements indicating his strong disagreement with this
Court’s holding in Nozzi I. Then, before ruling in favor of the
Housing Authority for the second time, the judge stated,
“When you do argue this in the Ninth Circuit, don’t make just
that argument, because if you do . . . we’ll be back here again,
and I’ll be tearing out my hair and saying I don’t understand
why this happened the way it did. In fact, let me just indicate
that if this case gets reversed, I want it to be like Judge
Wright or Judge Real. I want it to go to some other district
court judge, because I have spent a lot of time on this case.
. . . I pretty much have done all I can.”

The district judge’s statements constitute a “rare and
extraordinary circumstance[]” justifying reassignment.
Krechman, 723 F.3d at 1112. The judge repeatedly made
clear that he would have substantial difficulty setting aside
his previous views of the case. Under these circumstances,
remand is not only “advisable,” Krechman, 723 F.3d at 1111,
but essential in order to preserve the appearance of justice.
Accordingly, we need not consider the third factor.
Krechman, 723 F.3d at 1102 (“The first two factors are
equally important and a finding of either is sufficient to
support reassignment on remand.”). Regardless whether
duplication of effort would be involved, we have no choice
but to send the case to a judge whose designation would
appear to be consistent with the interests of justice.28 Lastly,
we hold that this case must be reassigned to a district judge

28
Although it does not affect our decision, we note that reassignment
will not entail more than minimal duplication as there is little, if any,
overlap between issues to be resolved on remand and the issues previously
considered by the district court.
 NOZZI V. HACLA 47

other than one of the two judges named by Judge Wu in order
to “preserve the appearance of justice.” Id.

VII. CONCLUSION

In sum, the district court erred by granting summary
judgment to the Housing Authority. There is no genuine
dispute of fact as to whether the Housing Authority failed to
provide meaningful information to Section 8 beneficiaries
about the change to the payment standard and the effect of
that change upon the beneficiaries and their property
interests. That failure violated both the requirements of the
Voucher Program regulations and the requirements of
procedural due process. It also resulted in a violation of two
state statutes which require public entities to take reasonable
efforts to comply with the mandatory duties established by
federal regulations. Accordingly, we reverse and remand
with instructions for the district court to enter summary
judgment in favor of the plaintiffs on the merits of the federal
and state law claims at issue on this appeal. In order to
preserve the appearance of justice, we order the case
reassigned to a different district judge—a judge other than the
two identified by the current district judge who himself has
declined to hear the case further. On remand, further factual
development may be needed to determine the size and
validity of plaintiffs’ class and to determine the appropriate
remedy.

REVERSED AND REMANDED.
48 NOZZI V. HACLA

APPENDIX A