Background
Brianna Frye received rental assistance through the federal Project-Based Voucher program for a unit at Hamilton Crossing. After property management reported that Frye appeared to have vacated the unit and allowed relatives to live there, the Michigan State Housing Development Authority terminated her participation in the Housing Choice Voucher program. A termination notice dated September 13, 2022, made the termination effective retroactively on August 31 and advised Frye that she could request an informal hearing by October 3.
Frye maintained that she never received the notice and did not learn that her voucher had been terminated until January 2023. After obtaining the notice through a supplemental FOIA response, she requested a late hearing. MSHDA denied that request and a timely dispute of the denial, stating that its records did not support Frye’s claim of nonreceipt and directing her to the Administrative Procedures Act or the courts.
Frye appealed to the circuit court, which dismissed for lack of jurisdiction. It reasoned that no contested case had been initiated because her hearing request was untimely and that MSHDA had not issued a final decision or order following an administrative hearing.
The Court’s Holding
The Court of Appeals held that the circuit court construed the Administrative Procedures Act too narrowly. Federal regulations required MSHDA to offer Frye an opportunity for an informal evidentiary hearing before terminating assistance based on her alleged actions or absence from the unit. The matter therefore qualified as a contested case even though no hearing actually occurred.
The court further held that MSHDA’s September 7, 2023 e-mail was a final agency decision denying Frye a hearing. Although the e-mail lacked the formal findings of fact and conclusions of law required by the APA, that deficiency did not destroy its finality. The e-mail made clear that MSHDA would not grant a hearing and that Frye had no further administrative remedy, so she had exhausted the available process and the circuit court had jurisdiction.
The existing record was insufficient to decide whether MSHDA properly sent notice, whether the notice was reasonably calculated to reach Frye, or whether she violated an applicable occupancy rule. The court therefore reversed the dismissal and remanded with instructions for the circuit court to order MSHDA to take additional evidence concerning whether Frye received sufficient proper notice and was entitled to an informal hearing.
Key Takeaways
- An agency matter may qualify as a contested case when the law requires an opportunity for an evidentiary hearing, even if the agency never conducts that hearing.
- An agency’s definitive denial of further administrative relief can constitute a final decision despite failing to include the APA’s required findings of fact and conclusions of law.
- Questions remained about whether the termination notice was sent, whether sending it to the allegedly vacated unit was reasonable, and whether retroactive termination complied with federal regulations and MSHDA policy.
Why It Matters
The decision prevents a housing agency from defeating judicial review by denying the very hearing that governing regulations require. For voucher participants, it confirms that termination of housing assistance implicates a protected property interest and requires adequate notice and a meaningful opportunity to be heard.
The court did not decide whether Frye’s voucher was improperly terminated or whether MSHDA violated due process. Those questions depend on the administrative record to be developed on remand.