
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, April 25, 1990                   TAG: 9004250145
SECTION: BUSINESS                    PAGE: B5   EDITION: METRO 
SOURCE: By LAURENCE HAMMACK STAFF WRITER
DATELINE:                                 LENGTH: Medium

HUD TO PAY TENANTS

Roanoke public housing tenants moved one step closer Tuesday to collecting the more than $200,000 that they were overcharged for electricity in the early 1980s.

At a hearing in U.S. District Court in Roanoke, Judge James Turk approved an agreement in which the U.S. Department of Housing and Urban Development agreed to pay $216,000 to settle a class-action lawsuit that was filed eight years ago.

The lawsuit, filed on behalf of 1,100 families from Roanoke's seven low-income housing projects, claimed that the city Redevelopment and Housing Authority acted improperly when it imposed surcharges for electricity used in excess of a monthly allowance.

Although the actual amount of the overcharge has been debated, $216,000 was an "acceptable" figure, said Henry Woodward, head of the Roanoke Valley's Legal Aid office and counsel for the tenants.

The money will be divided up among the residents, with tenants receiving anywhere from several dollars to $500, Bayard Harris, a Roanoke attorney who represented the housing authority, said. After a lump sum is received from HUD and the tenants are notified, checks may be distributed within the next eight months.

In the 1982 suit, the tenants accused the housing authority of improperly computing electricity needs and then overcharging them by tacking on surcharges from 1981 to 1984. The lawsuit claimed that an allowance imposed by the housing authority was not enough to meet the basic needs of the tenants.

Because HUD agreed to fund the settlement, the local housing authority will not be financially burdened by the case, Harris said.

Woodward, who said the actual amount in question was closer to $280,000, described the settlement as "an attempt by HUD to limit the damage by saying what they will give and dividing it up."

Turk originally threw the suit out, ruling that the tenants had no right to sue in federal court over alleged violations of housing regulations. The 4th U.S. Circuit Court of Appeals agreed and Legal Aid appealed to the Supreme Court. In 1987, the high court ruled 5-4 that the tenants had a right to sue - sending the case back to Roanoke and leading to the settlement approved Tuesday.

by CNB