FOR IMMEDIATE RELEASE
DATE: November 10, 2020
PUBLIC HOUSING TENANTS REACH SETTLEMENT WITH HOPEWELL REDEVELOPMENT AND HOUSING AUTHORITY ON CLASS ACTION LAWSUIT
Richmond, VA — Public housing tenants and the Hopewell Redevelopment and Housing Authority (HRHA) have reached a proposed settlement valued at nearly $300,000 in a federal class-action lawsuit challenging HRHA’s failure to properly set and implement tenant utility allowances. This morning, the Parties appeared in the U.S. District Court for the Eastern District of Virginia, Richmond Division, to ask the court for preliminary approval of the settlement. This is an important step in the settlement approval process and with this preliminary approval, HRHA will begin sending notices to class members regarding their proposed recovery.
Under the terms of the proposed agreement, $220,000 will be distributed among current and former Hopewell public housing tenants who were subjected to HRHA’s utility surcharges from June 1, 2014, through September 30, 2018. Approximately $95,000 was previously saved by tenants through the waiver of gas and electric utility charges during the pendency of the lawsuit. The new gas and electric utility allowances negotiated as part of this settlement are expected to further reduce charges to tenants by approximately $144,000 over just the first three years.
“The settlement is the result of hard work by both parties, and we are very pleased that in addition to relief for past charges, our clients will be billed fairly and in compliance with HUD rules going forward,” said Sylvia Jones, LAJC attorney for the plaintiff tenants. “Improperly implemented utility allowances are a common problem for public housing. After the conclusion of this case, we will have been able to bring relief to public housing tenants across all of Central Virginia, having previously addressed the matter with the other housing authorities as well.”
The class-action lawsuit, filed in April 2019, alleges that HRHA’s failure to properly set, implement, and charge electric and gas utility allowances resulted in unlawful excessive charges to current and former public housing tenants. Federal law requires that public housing tenants not be charged more than 30% of their income for rent and utilities. A proposed class of plaintiffs, represented by lawyers at Legal Aid Justice Center (LAJC), and Crowell & Moring LLP, contend that these excessive charges increased tenants’ share of their housing costs and caused tenants to pay more than allowed in violation of federal law, state law, and tenants’ leases.
While HRHA denies any wrongdoing, the parties have agreed to the proposed settlement in order to avoid the uncertainty and expense associated with continued litigation and believe that the proposed settlement agreement is in the best interest of HRHA and all impacted public housing tenants.
The proposed settlement, filed yesterday, must be approved by Federal District Court Judge Hannah M. Lauck before it is final. In addition to monetary relief, under the terms of the proposed agreement, HRHA also agreed to:
- Set and implement new, higher utility allowances that will stay in place for at least three years, and which became effective January 1, 2019.
- Create new notices, policies, and procedures for elderly and disabled tenants needing additional electric usage due to their conditions.
- Change its billing statements to give tenants more information about their utility surcharges.
- Change its lease so that late fees and other non-rent charges are not treated as rent.
- Change its lease so that it states whether a tenant has submetered utilities and list each tenant’s utility allowance.
- Ensure HRHA staff is trained regarding utility billing procedures, tenant requests for relief from utility billing, and the grievance procedure for tenants to contest charges.
- Suspend all charges for gas consumption between October 1, 2016 and January 1, 2019.
- Suspend all charges for electricity consumption between October 1, 2018 usage and January 1, 2019.
“The bills should not be so complicated that you need assistance in understanding what you owe,” said Natasha Brown, a plaintiff in the case and an HRHA resident, “The old bills were nearly impossible to figure out and it led to my paying money I didn’t owe. I am glad that no one will have to deal with that in the future.”
“If the Court approves the settlement, the agreement will provide tenants significant monetary relief to compensate them for the improper past charges,” Rachel McFarland, one of the tenants’ lawyers added, “Additionally, and importantly, the non-monetary relief in the form of changes to HRHA’s utility allowances, leases, billing statements, policies, and practices will ensure that current residents are sufficiently informed of the charges assessed, have adequate access to relief from excess charges where appropriate, and are charged no more for their utilities than permitted by law.”
About the Legal Aid Justice Center
The Legal Aid Justice Center (LAJC), representing Plaintiffs in this case, partners with communities and clients to achieve justice by dismantling systems that create and perpetuate poverty. By justice, we mean racial, social, and economic justice. We integrate individual representation, impact litigation, policy advocacy, and organizing strategies to identify and address root causes of poverty while mitigating acute impacts.
About Crowell & Moring LLP
Crowell & Moring LLP is an international law firm with approximately 550 lawyers representing clients in litigation and arbitration, regulatory, and transactional matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation, as well as its ongoing commitment to pro bono service and diversity. The firm has offices in Washington, D.C., New York, Los Angeles, San Francisco, Orange County, London, and Brussels.