Source: https://caselaw.findlaw.com/us-supreme-court/393/268.html
Timestamp: 2019-04-25 01:02:52+00:00

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1. Housing authorities of federally assisted public housing projects must follow the requirements of the February 7, 1967, HUD circular before evicting any tenant residing in such projects on the date of this Court's decision herein. Pp. 274-284.
(b) The simple notification procedure required by the circular, which has only nominal effect on respondent's administration of the housing project, does not violate the congressional policy set forth in the Act for local control of federally financed housing projects. Pp. 277-278.
(c) The respective obligations of HUD and respondent under the annual contributions contract between them, and the lease agreement between petitioner and respondent, remain unchanged by the circular, which therefore does not involve any impairment of contractual obligations in violation of the Due Process Clause of the Fifth Amendment. Pp. 278-280.
(d) The circular furthers the Act's remedial purpose. Pp. 280-281.
(e) The circular applies to eviction proceedings commenced before its issuance under the general rule that a court must apply the law (here that of an administrative agency acting pursuant to legislative authorization) in effect at the time it renders decision; and that rule is particularly applicable here where ascertainment of the reason for eviction is essential to enable a tenant to defend against eviction for activity claimed to be constitutionally protected. Pp. 281-283.
2. It would be premature to decide, as petitioner urges, that this Court must establish guidelines to insure that she is given not only the reasons for her eviction but also a hearing comporting with due process requirements. Pp. 283-284.
271 N.C. 468, 157 S. E. 2d 147, reversed and remanded.
James M. Nabrit III argued the cause for petitioner. With him on the briefs were Jack Greenberg, Charles Stephen Ralston, Charles H. Jones, Jr., Anthony G. Amsterdam, and William Bennett Turner.
Daniel K. Edwards argued the cause for respondent. With him on the briefs was William Y. Manson.
This case raises the question whether a tenant of a federally assisted housing project can be evicted prior to notification of the reasons for the eviction and without an opportunity to reply to those reasons, when such a [393 U.S. 268, 270] procedure is provided for in a Department of Housing and Urban Development (hereinafter HUD) circular issued after eviction proceedings have been initiated.
On September 17, 1965, the Housing Authority brought an action for summary eviction in the Durham Justice of the Peace Court, which, three days later, ordered petitioner removed from her apartment. On appeal to the Superior Court of Durham County, petitioner alleged that she was being evicted because of her organizational activities in violation of her First Amendment rights. After a trial de novo, 5 the Superior Court affirmed the [393 U.S. 268, 272] eviction, and the Supreme Court of North Carolina also affirmed. 6 Both appellate courts held that under the lease the Authority's reasons for terminating petitioner's tenancy were immaterial. On December 5, 1966, we granted certiorari 7 to consider whether petitioner was denied due process by the Housing Authority's refusal to state the reasons for her eviction and to afford her a hearing at which she could contest the sufficiency of those reasons.
Despite the incorporation of the February 7 circular into the Management Manual in October 1967, the Housing Authority contends that on its face the circular purports to be only advisory. The Authority places particular emphasis on the circular's precatory statement that HUD "believes" that its notification procedure should be followed. In addition to overlooking the significance of the subsequent incorporation of the circular into the Management Manual, the Authority's argument is based upon a simple misconstruction of the language actually used. The import of that language, which characterizes the new notification procedure as "essential," becomes apparent when the February 7 circular is contrasted with the one it superseded. The earlier circular, issued on May 31, 1966, stated: "[W]e strongly urge, as a matter of good social policy, that Local Authorities in a [393 U.S. 268, 276] private conference inform any tenants who are given . . . [termination] notices of the reasons for this action." 21 (Emphasis added.) This circular was not incorporated into the Management Manual.
The Authority also argues that under the Due Process Clause of the Fifth Amendment HUD is powerless to impose any obligations except those mutually agreed upon in the annual contributions contract. 31 If HUD's [393 U.S. 268, 279] power is not so limited, the Authority argues, HUD would be free to impair its contractual obligations to the Authority through unilateral action. Moreover, in this particular case, the Authority contends that HUD has not only impaired its own contract with the Authority, but it has also impaired the contract between petitioner and the Authority. The obligations of each of these contracts, however, can be impaired only "by a law which renders them invalid, or releases or extinguishes them . . . [or by a law] which without destroying [the] contracts derogate[s] from substantial contractual rights." 32 The HUD circular does neither.
Since the Authority does not argue that the circular is proscribed by any constitutional provision other than the Due Process Clause, the only remaining inquiry is whether it is reasonably related to the purposes of the [393 U.S. 268, 281] enabling legislation under which it was promulgated. 36 One of the specific purposes of the federal housing acts is to provide "a decent home and a suitable living environment for every American family" 37 that lacks the financial means of providing such a home without governmental aid. A procedure requiring housing authorities to explain why they are evicting a tenant who is apparently among those people in need of such assistance certainly furthers this goal. We therefore cannot hold that the circular's requirements bear no reasonable relationship to the purposes for which HUD's rule-making power was authorized.
To the contrary, the general rule is particularly applicable here. The Housing Authority concedes that its power to evict is limited at least to the extent that it may not evict a tenant for engaging in constitutionally [393 U.S. 268, 283] protected activity; 44 but a tenant would have considerable difficulty effectively defending against such an admittedly illegal eviction if the Authority were under no obligation to disclose its reasons. 45 On the other hand, requiring the Authority to apply the circular before evicting petitioner not only does not infringe upon any of its rights, but also does not even constitute an imposition. The Authority admitted during oral argument that it has already begun complying with the circular. 46 It refuses to apply it to petitioner simply because it decided to evict her before the circular was issued. Since petitioner has not yet vacated, we fail to see the significance of this distinction. We conclude, therefore, that the circular should be applied to all tenants still residing in McDougald Terrace, including petitioner, not only because it is designed to insure a fairer eviction procedure in general, but also because the prescribed notification is essential to remove a serious impediment to the successful protection of constitutional rights.
[ Footnote 1 ] "This lease shall be automatically renewed for successive terms of one month each at the rental last entered and acknowledged below . . . . Provided, there is no change in the income or composition of the family of the tenant and no violation of the terms hereof. In the event of any change in the composition or income of the family of the tenant, rent for the premises shall automatically conform to the rental rates established in the approved current rent schedule which has been adopted by the Management for the operation of this Project . . . ."
[ Footnote 2 ] "This lease may be terminated by the Tenant by giving to Management notice in writing of such termination 15 days prior to the last day of the term. The Management may terminate this lease by giving to the Tenant notice in writing of such termination fifteen (15) days prior to the last day of the term. Provided, however, that this paragraph shall not be construed to prevent the termination of this lease by Management in any other method or for any other cause set forth in this lease."
The Housing Authority construes this provision to authorize termination upon the giving of the required notice even if the tenant has not violated the terms of the lease and his income and family composition have not changed. Petitioner, however, insists that since the Authority is a government agency, it may not constitutionally evict "for no reason at all, or for an unreasonable, arbitrary and capricious reason . . . ." Brief for Petitioner 27. We do not, however, reach that issue in this case. See n. 49, infra.
"Your Dwelling Lease provides that the Lease may be cancelled upon fifteen (15) days written notice. This is to notify you that your Dwelling Lease will be cancelled effective August 31, 1965, at which time you will be required to vacate the premises you now occupy."
[ Footnote 4 ] One of those attempts was made on September 1. In an affidavit filed with the Superior Court of Durham County, petitioner alleged that on that day members of the Housing Authority met with a Durham police detective who had been investigating petitioner's conduct. Although petitioner's attorney met with Housing Authority representatives on this same day to request a hearing, the attorney was not informed what information had been uncovered by the police investigation or whether it had any bearing on petitioner's eviction.
"that if Mr. C. S. Oldham, the Executive Director of the Housing Authority of the City of Durham, were present and duly sworn and were testifying, he would testify that whatever reason there may have been, if any, for giving notice to Joyce C. Thorpe of the termination of her lease, it was not for the reason that she was elected [393 U.S. 268, 272] president of any group organized in McDougald Terrace, and specifically it was not for the reason that she was elected president of any group organized in McDougald Terrace on August 10, 1965 . . . ."
[ Footnote 6 ] 267 N.C. 431, 148 S. E. 2d 290 (1966).
[ Footnote 7 ] 385 U.S. 967 .
Within the past year increasing dissatisfaction has been expressed with eviction practices in public low-rent housing projects. During [393 U.S. 268, 273] that period a number of suits have been filed throughout the United States generally challenging the right of a Local Authority to evict a tenant without advising him of the reasons for such eviction.
[ Footnote 9 ] 386 U.S. 670, 673 -674 (1967).
[ Footnote 10 ] 271 N.C. 468, 471, 157 S. E. 2d 147, 150 (1967).
[ Footnote 11 ] 271 N.C., at 470, 157 S. E. 2d, at 149.
[ Footnote 12 ] 390 U.S. 942 (1968).
[ Footnote 13 ] The Supreme Court of North Carolina stayed the execution of its judgment pending our decision. As a result, petitioner has not yet vacated her apartment.
[ Footnote 14 ] Under 10 (a) of the United States Housing Act of 1937, 50 Stat. 891, as amended, 42 U.S.C. 1410 (a) (1964 ed., Supp. III), HUD is required to enter into an annual contributions contract with the local housing authorities. In that contract, HUD guarantees to provide a certain amount of money over a certain number of years.
[ Footnote 15 ] 50 Stat. 891, as amended, 42 U.S.C. 1408 (1964 ed., Supp. III).
[ Footnote 16 ] Housing Assistance Administration, HUD, Low-Rent Management Manual.
[ Footnote 17 ] Id., 0 (preface) (April 1962).
[ Footnote 19 ] Housing Assistance Administration, HUD, Low-Rent Housing Manual 100.2, at 2 (Sept. 1963).
[ Footnote 20 ] Ibid.
[ Footnote 21 ] Circular from Commissioner Marie C. McGuire to Local Authorities, Regional Directors, and Central Office Division and Branch Heads, May 31, 1966.
[ Footnote 22 ] "[W]e intended it to be followed. . . . The circular is as binding in its present form as it will be after incorporation in the manual. . . . HUD intends to enforce the circular to the fullest extent of its ability. . . ."
[ Footnote 23 ] HUD's Chief Counsel stated that his "views are the same as those expressed" by Assistant Secretary Hummel. Letter from Mr. Joseph Burstein to Mr. Charles S. Ralston, Aug. 7, 1967.
[ Footnote 24 ] Accord, Udall v. Tallman, 380 U.S. 1 (1965). See Zemel v. Rusk, 381 U.S. 1 (1965).
[ Footnote 25 ] See Udall v. Tallman, supra.
[ Footnote 26 ] 386 U.S. 670, 673 , n. 4 (1967).
[ Footnote 27 ] This rule-making power was transferred from the Public Housing Administration to HUD by 5 (a) of the Department of Housing and Urban Development Act, 79 Stat. 669, 42 U.S.C. 3534 (a) (1964 ed., Supp. III).
[ Footnote 28 ] 50 Stat. 891, as amended, 42 U.S.C. 1408 (1964 ed., Supp. III). Such broad rule-making powers have been granted to numerous other federal administrative bodies in substantially the same language. See, e. g., 72 Stat. 743, 49 U.S.C. 1324 (a) (Civil Aeronautics Board); 49 Stat. 647, as amended, 42 U.S.C. 1302 (Department of Health, Education, and Welfare); 52 Stat. 830, 15 U.S.C. 717o (Federal Power Commission).
[ Footnote 29 ] Section 1 of the United States Housing Act of 1937, 50 Stat. 888, as amended by 501 of the Housing Act of 1959, 73 Stat. 679, 42 U.S.C. 1401.
[ Footnote 30 ] Brief for Respondent 21, 23.
[ Footnote 31 ] Although the constitutional prohibition of the impairment of contracts, U.S. Const. Art. I, 10, applies only to the States, we have held that "[v]alid contracts are property, whether the obligor be a private individual, a municipality, a State or the United States. Rights against the United States arising out of a contract with it are protected by the Fifth Amendment." Lynch v. United States, 292 U.S. 571, 579 (1934).
[ Footnote 32 ] Home Bldg. & Loan Assn. v. Blaisdell, 290 U.S. 398, 431 (1934). The statute challenged in Lynch v. United States, supra, fell into the first of these two categories. It repealed "all laws granting or pertaining to yearly renewable [War Risk term] insurance . . . ." 292 U.S., at 575 .
[ Footnote 33 ] A far different case would be presented if HUD were a party to this suit arguing that it could repudiate its obligations under the annual contributions contract because the Authority had failed to apply the circular. Cf. Lynch v. United States, supra.
[ Footnote 34 ] Cf. Home Bldg. & Loan Assn. v. Blaisdell, supra, at 425.
[ Footnote 35 ] Penniman's Case, 103 U.S. 714, 720 (1881). See El Paso v. Simmons, 379 U.S. 497 , at 508 (1965); Home Bldg. & Loan Assn. v. Blaisdell, supra.
We have consistently upheld legislation that affects contract rights far more substantially than does the HUD circular. E. g., El Paso v. Simmons, supra, upheld a state statute that placed a time limit on the right to reinstate a claim in previously forfeited public lands; East N. Y. Sav. Bank v. Hahn, 326 U.S. 230 (1945), upheld a New York statute suspending mortgage foreclosures for the 10th year in succession; and Blaisdell upheld a statute that extended mortgagors' redemption time.
There is no reason why the principles that control legislation that affects contractual rights should not also control administrative rule making that affects contractual rights. Cf. Permian Basin Area Rate Cases, 390 U.S. 747, 779 -780 (1968), which upheld a Federal Power Commission order limiting the application of "escalation clauses" in contracts for the sale of natural gas; and 24 CFR 1.1-1.12 (1968), which proscribe a wide range of racially discriminatory practices by both governmental and private interests that receive any federal financial assistance whether or not pursuant to a pre-existing contract. This regulation was promulgated under 602 of the Civil Rights Act of 1964, 78 Stat. 252, 42 U.S.C. 2000d-1, which directs each federal agency that administers federal financial assistance "by way of grant, loan, or contract other than a contract of insurance or guaranty . . . to effectuate the provisions of section 601 [which prohibits racial discrimination in the administration of any program receiving federal financial assistance] . . . by issuing rules, regulations, or orders of general applicability which shall be consistent with achievement of the objectives of the statute authorizing the financial assistance in connection with which the action is taken."
[ Footnote 36 ] See, e. g., FCC v. Schreiber, 381 U.S. 279, 289 -294 (1965); American Trucking Assns., Inc. v. United States, 344 U.S. 298 (1953).
[ Footnote 37 ] Section 2 of the Housing Act of 1949, 63 Stat. 413, 42 U.S.C. 1441. That section further directs all agencies of the Federal Government "having powers, functions, or duties with respect to housing . . . [to] exercise their powers, functions, and duties under this or any other law, consistently with the national housing policy declared by this Act . . . ." Ibid.
[ Footnote 38 ] "A change in the law between a nisi prius and an appellate decision requires the appellate court to apply the changed law." Ziffrin, Inc. v. United States, 318 U.S. 73, 78 (1943). Accord, e. g., Vandenbark v. Owens-Illinois Glass Co., 311 U.S. 538 (1941); United States v. Chambers, 291 U.S. 217 (1934).
[ Footnote 39 ] United States v. Schooner Peggy, 1 Cranch 103, 110 (1801).
[ Footnote 40 ] See, e. g., United States v. Chambers, supra.
[ Footnote 41 ] See, e. g., Carpenter v. Wabash R. Co., 309 U.S. 23 (1940).
[ Footnote 42 ] See, e. g., Vandenbark v. Owens-Illinois Glass Co., supra.
[ Footnote 43 ] See Greene v. United States, 376 U.S. 149 (1964), in which we held that the petitioner's right to recover lost pay for a wrongful discharge was "vested" as a result of our earlier decision in Greene v. McElroy, 360 U.S. 474 (1959), which we construed to have made a "final" and "favorable" determination, 376 U.S., at 159 , that petitioner had been wrongfully deprived of his employment.
[ Footnote 44 ] "We do not contend that, in the case of Housing Authority leases if the purpose of the notice of termination of the lease is to proscribe the exercise of a constitutional right by the tenant the notice would be effective; the notice would be invalid, and the term of the lease and its automatic renewal would not thereby be affected." Brief for Respondent 11.
[ Footnote 45 ] See generally Thorpe v. Housing Authority of the City of Durham, 386 U.S. 670, 674 -681 (1967) (DOUGLAS, J., concurring).
[ Footnote 46 ] Transcript of Argument 28. Despite this admission, counsel for the Authority insisted throughout his oral argument that HUD has no power to require compliance with the circular. See id., at 26-27, 28, 30-32, 48-49. He even expressly suggested that the Authority could depart from its requirements "without violating any kind of Federal law." Id., at 48.
[ Footnote 47 ] Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 461 (1945). Cf. Zemel v. Rusk, supra, at 18-20; United States v. Fruehauf, 365 U.S. 146 (1961).
[ Footnote 48 ] Moreover, if the procedure followed by the Authority proves inadequate, HUD may well decide to provide for an appropriate hearing. Cf. 24 CFR 1.1-1.12 (1968), which establish a detailed procedure to dispose of complaints of racial discrimination in any federally assisted program.
[ Footnote 49 ] These same considerations lead us to conclude that it would be equally premature for us to reach a decision on petitioner's contention that it would violate due process for the Authority to evict her arbitrarily. That issue can be more appropriately considered if petitioner is in fact evicted arbitrarily. See Alabama State Federation of Labor v. McAdory, supra.

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