Tuesday, February 16, 2010

PRESS RELEASE: CLASS ACTION LAWSUIT RESOLVED: CITY AGREES TO PROVIDE APPROPRIATE UTILITY SUBSIDY TO LOW-INCOME TENANTS

FOR IMMEDIATE RELEASE
February 16, 2010

Contact: Victor Geminiani, (808) 227-3845
William Durham, (808) 779-1744

HONOLULU – A class action lawsuit filed against the City and County of Honolulu (“City”) by attorneys for a group of low-income residents at the federally subsidized Westlake Apartments housing project has been provisionally resolved. The lawsuit, filed June 12, 2008, charged City officials with failing for over a decade to adjust federally mandated “utility allowances” while deceptively certifying to the federal government each year that the utility allowances had been properly calculated.

Under federal law, when owners of HUD projects like Westlake calculate rents, they must include a monthly allowance that offsets the tenants’ utility costs. Whenever utility rates increase by more than 10%, HUD guidelines require owners to recalculate this allowance to ensure that the tenants, who are all low-income persons on the verge of homelessness, can afford to make their monthly payments. Despite the skyrocketing costs of utilities, the City had failed to recalculate the tenants’ utility allowance for over ten years – causing the tenants to overpay every month. In October of 2008, shortly after the lawsuit was filed, the City increased utility allowances at the project from $40.00 per month, to $85.00 per month, effectively conceding the prospective injunctive relief Plaintiffs were seeking. A final resolution has been reached for back award, providing approximately $500.00 to each tenant who lived at the complex over the relevant period.

“The increase of $45.00 in October of 2008 made a big difference for our clients,” said Victor Geminiani, Executive Director of Lawyers for Equal Justice. “When you are on a fixed income of $400 a month, it’s surprising how far $45.00 towards buying groceries to feed the family, gas to get to work, and new clothing for your children.”

“The City acted responsibly in quickly acknowledging the problem, raising the utility allowance, and compensating the tenants for past harm,” said William Durham of Lawyers for Equal Justice. “We are pleased with the outcome and that Westlake is now functioning as federal law intends.”

A Notice of Settlement of Class Action, attached, has been issued by the Court and a final fairness hearing must be held before the case is officially completed.

Lawyers for Equal Justice (“LEJ”) is a nonprofit, 501(c)(3) law firm that was created to advocate on behalf of low income individuals and families in Hawai`i on civil legal issues of statewide importance and to complement the assistance provided by existing legal services providers in the state. LEJ’s core mission is to help its clients gain access to the resources, services and fair treatment that they need to realize their opportunities for self achievement and economic security.

Alston Hunt Floyd & Ing, one of Hawai‘i’s largest law firms, represents clients in resolving disputes in federal and state court and other dispute resolution forums.

CLICK ON LINKS BELOW FOR ALL MAJOR FILINGS IN THIS CASE:



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