Opinion ID: 2422541
Heading Depth: 1
Heading Rank: 5

Heading: The owners' constitutional contentions

Text: The owners further contend that if TOPA is construed as applying to all sales, rather than only to sales for the purpose of demolition or discontinuance of housing use, then it is a Law impairing the Obligation of Contracts, in violation of Article I, § 10, cl.1 of the Constitution. They also assert that [t]he interpretation of subsection (a) offered by appellants is a disguised tactic to assist in a redistribution of wealth that infringes on the property rights of owners and is not centered around any legitimate public policy. These contentions are without merit. It is a familiar canon of statutory construction that statutes are to be so construed as to avoid serious doubt of their constitutionality. International Ass'n of Machinists v. Street, 367 U.S. 740, 749, 81 S.Ct. 1784, 6 L.Ed.2d 1141 (1961); United States v. Rumely, 345 U.S. 41, 45, 73 S.Ct. 543, 97 L.Ed. 770 (1953); see also Gay Rights Coalition Georgetown Univ. Law Ctr. v. Georgetown University, 536 A.2d 1, 16 (D.C.1987) (en banc). Thus, if the choice before us were between one construction of TOPA which leaves no question as to the statute's validity and a second construction that raises significant doubts on that score, we would be obliged to treat such doubts as one factor in our calculus supporting the first construction. These appeals do not, however, present such a situation. As the en banc court stated in Hornstein, in sustaining another provision of the RHCSA against a constitutional challenge, [l]aws adjusting the burdens and benefits of economic life come to the courts with a presumption of constitutionality. Hornstein, 560 A.2d at 533-34. That presumption continues in effect until the contrary is shown beyond a reasonable doubt. Id. n. 5 (citations omitted). Owners must make a very compelling showing indeed before this court may invalidate the RHCSA without impermissibly encroaching upon legislative prerogatives. Id. at 534. Assuming that the Contract Clause applies in full force to the District of Columbia by operation of the Home Rule Act, see D.C.Code § 1-203.02 (2001), [23] it has long been established law that the Clause applies only to the retroactive application of statutes to existing contract obligations. See, e.g., Ogden v. Saunders, 25 U.S. 213, 12 Wheat. 213, 6 L.Ed. 606 (1827) ([t]he validity of these laws can never be questioned . . . unless they operate, by their express provisions, upon contracts previously entered into); Chicago B & Q R. Co. v. Cram, 228 U.S. 70, 85, 33 S.Ct. 437, 57 L.Ed. 734 (1913), (a complete answer to the contention that the statute impairs the[] obligation of [the contracts at issue] is that they were made subsequently to the statute and are subject to it); Lynce v. Mathis, 519 U.S. 433, 439 n. 12, 117 S.Ct. 891, 137 L.Ed.2d 63 (1997) (Article I, § 10, cl. 1, prohibits States from passing another type of retroactive legislation, laws `impairing the Obligation of Contracts'). In short, the application of an existing statute to a contract executed after the statute's enactment is not an impairment of constitutionally protected contract rights. TOPA was enacted in 1980, almost a quarter of a century before the challenged contracts here at issue were executed, and the Contract Clause therefore is not implicated. The owners also appear to attack the application of TOPA to all sales on Due Process grounds. However, notwithstanding their claim that TOPA as heretofore construed promotes what might be characterized as a Robin Hood-style redistribution of wealth in disguise, the statute is not quite as revolutionary as that. TOPA requires an owner who wishes to sell a housing accommodation to provide the tenants with an opportunity to purchase that accommodation at a price and terms which represent a bona fide offer of sale.  D.C.Code § 42-3404.02(a). (Emphasis added.) Moreover, the closely related right of first refusal, see § 42-3404.08, requires the tenants, in effect, to match any offer made by a third party. Thus, if the tenants elect to exercise that right, the owner will be able to sell the accommodation for the same price and on the same terms as if the sale were to a third party purchaser. Accordingly, it is difficult to understand how the statute redistributes wealth, regardless of whether or not its reach is limited to sales for purposes of demolition or discontinuance of housing use. TOPA does strengthen the bargaining power of tenants, but even if we assume, for the sake of argument, that the effect of the statute as heretofore construed is to improve the financial condition of some less affluent citizens, and to a very limited extent to reduce the gap between rich and poor, the same might likewise be said of the graduated income tax, publicly assisted housing, Medicare, unemployment compensation, and a host of other programs. The owners have cited no authority, and we know of none, that would support a holding that TOPA is unconstitutional because it somehow redistributes wealth.