Court Opinion

ID: 4948644
Source: CourtListenerOpinion
Date Created: 2021-09-24 12:41:47.887745+00
Date Added: 2024-06-11T08:15:12.686387
License: Public Domain

ROGERS, Chief Judge,
dissenting:
The Council of the District of Columbia has enacted various forms of rent control legislation, all designed to assure that moderate and low income housing does not disappear from the city’s housing stock. Kg., D.C.Code § 45-2501(3) (1986 Repl.) (legislative finding that housing shortage is most acutely felt among low and moderate income renters); D.C.Code § 45-2502(5) (1986 Repl.) (purpose of comprehensive statutory scheme to protect rights of low or moderate income in particular). To administer its rent control laws, the Council has established a Rental Housing Commission. Of concern here is the fact that the Commission, having long interpreted its regulation in the manner urged by appellants, has now abandoned that interpretation on the basis of what can charitably be described as stilted reasoning and is probably best explained by the fact that the membership of the Commission has changed. I take no issue with the right of the Commission to change its mind. It can do so by amending its regulations so that all are on notice that its previous interpretation is no longer to control. It also can “supply a reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored.” Greater Boston Television Corp. v. FCC (Greater Boston), 143 U.S.App.D.C. 383, 394, 444 F.2d 841, 852 (Leventhal, J.), cert. denied, 403 U.S. 923, 91 S.Ct. 2229, 29 *1220L.Ed.2d 701 (1971).1 The Commission has done neither here. The majority attempts to salvage the situation by advising the Commission that it must, in fact, consider the factors of the regulation that the Commission has relegated to subsidiary status. The Commission came to its conclusion on a faulty premise and without so much as a nod to its prior interpretation or a suggestion that its new interpretation better fulfills the purposes of the statute and is consistent with the intent of the Council. Accordingly, I respectfully dissent.
The Commission, in rejecting appellants’ appeal, determined that the absence of the findings required in subsections (a) and (b) of the regulation2 was not fatal since (a) and (b) are “subsidiary criteria” not essential to the grant of a petition for substantial rehabilitation and increase in rent ceiling. The Commission acknowledged that its regulations “make an effort to provide further guidance” in determining the meaning of the statutory requirement that the Rent Administrator consider “the degree to which the housing code violations impair [ ] ... the health, welfare, and safety of the tenants.”3 This requirement the Commission viewed as “certainly not free from ambiguity.” Looking to its regulation, the Commission determined, on the one hand, that “14 D.C.M.R. 3511.8 is even more confused,” and, on the other hand, that “it is clear that criteria (c) and (d) are merely a restatement of the two fundamental criteria of § 45-1525(a)(l) and (2), and if these two are otherwise found to be met, the petition must be approved in any event, without regard to criteria (a) and (b).” This analysis will not withstand scrutiny.
First, the Commission proceeded on the basis of an error of law. The Commission errs in concluding that because its regulation includes some factors not set forth in *1221the statute that those factors cannot, in any manner, be controlling. The language of the statute is directly to the contrary, referring specifically to the possibility that there would be “other relevant factors.” See note 3 supra. The Council vested the Commission with authority to promulgate regulations that are consistent with the statute. D.C.Code § 45-2512 (1986 Repl.) See District of Columbia v. Catholic University of America, 397 A.2d 915, 919 (D.C.1979) (citing Tenants of 3039 Q Street, N. W. v. District of Columbia Rental Accommodations Commission, 391 A.2d 785, 787 (D.C.1978)). Having determined that the statute is ambiguous, the Commission could properly attempt to eliminate the ambiguity by promulgating a regulation. In its decision the Commission acknowledged that the D.C. Council, in order to assure that substantial and permanent rent increases would not follow normal or deferred maintenance or even limited capital improvements, required that the rehabilitation be “truly ‘substantial’ ” and also be in the interests of the tenants. Subsections (a) and (b) of the regulation provide some definition to the meaning of the statutory phrase “the interests of the tenants.” As promulgated, the Commission’s regulation does not appear on its face to be contrary to the statute. See D.C.Code § 45-2502(1) (statutory goal to protect existing supply of rental housing and prevent low and moderate income tenants “from the erosion of their income from increasing housing costs.”) Indeed, the Commission has expressly found that it is not.
Second, the Commission failed to explain why, after a decade, it is abandoning its interpretation of the regulation.4 Cf. Cambridge Management Co. v. District of Columbia Rental Housing Commission, 515 A.2d 721, 723 (D.C.1986) (agency must follow its own regulations); Connecticut Light & Power Co. v. Nuclear Regulatory Commission, 218 U.S.App.D.C. 134, 145, 673 F.2d 525, 536, cert. denied, 459 U.S. 835, 103 S.Ct. 79, 74 L.Ed.2d 76 (1982). In Smithy-Braedon Property Co. v. Shawmut Tenants Ass’n, SR 110 (RHC, Dec. 22, 1982), the Commission interpreted the regulation — all four subsections — to be fully consistent with the statute and the intent of the Council of the District of Columbia, noting in 1982 that its interpretation had been consistent for the past two years. As here, the issue in that case was “whether a landlord has the right to substantially rehabilitate a housing accommodation over the objection of a substantial number of tenants when renovation may be desirable but is not necessary to comply with existing housing code regulations.” Id. at 2. The Commission upheld the hearing examiner’s decision to deny the petition for substantial rehabilitation unless it was necessary to assure the health, safety, and welfare of the tenants, as consistent with the statute and with the regulation that is at issue in the instant case.5 The Commission based its interpretation of the statute and regulation on the intent of the Council to prevent unnecessary displacement of low and moderate income tenants as a result of higher rent ceilings and charges that accompany substantial rehabilitation of a property. Id. at 3. See D.C.Code § 45-1661 (“The purposes of this chapter favor resolution of ambiguity by the hearing officer or a court toward the end of strengthening the legal *1222rights of tenants or tenant organizations to the maximum extent permissible under law.”).
In the instant case the Commission did not address the reasoning of its prior interpretation and only referred to Smithy-Braedon in a footnote, stating that “[w]e do not read the decision as requiring such a result in every situation.” The result referred to was the dismissal of a substantial rehabilitation petition where “it was concluded that the renovation might be desirable but not necessary to comply with existing housing code regulations, at least as to tenants who were presently in the building.” Of course, this misses the point. All petitions for substantial rehabilitation do not, as a result of Smithy-Braedon, have to be dismissed; those that conform to the regulatory requirements can be approved. More to the point, the rationale for the Commission’s interpretation of its regulation in Smithy-Braedon is left unscathed. Consequently, appellants are right on the mark in pointing out that the Commission has been inconsistent in its interpretation and application of 14 D.C.M.R. § 3511.8.
To the extent that the regulation tracks the language of the statute, see D.C.Code § 45-2524(c)(2) (1986 Repl.), and has been interpreted by the Commission as valid, I am at a loss to understand how this court can affirm the Commission’s new interpretation without ignoring that the Commission must be “faithful and not indifferent to the rule of law.” Greyhound Corp. v. I.C.C., 179 U.S.App.D.C. 228, 230, 551 F.2d 414, 416 (1977). The District government, like the federal government, has experienced a growth in the number and power of administrative agencies, and the rationale for requiring reasoned explanation for avoiding prior agency interpretations is no less applicable. See Superior Beverages, Inc. v. District of Columbia Alcoholic Beverage Control Board, 567 A.2d 1319, 1325 (D.C.1989) (court’s deference to agency interpretation lessens when agency interpretation changes after consistent, longstanding contrary interpretation); Atwater v. District of Columbia Dept. of Consumer & Regulatory Affairs, 566 A.2d 462, 468 (D.C.1989) (same). In view of the Council’s concern about housing for low and moderate income persons, the Commission’s new “subsidiary”/“ultimate” facts interpretation is, at best, strained and, at worst, an error of law; it also is flawed for lack of a reasoned rationale. The Commission appears to want to have it both ways: the statute is ambiguous yet the regulation can provide no more guidance than the statute.6 Its opinion is, quite simply, the intolerably terse agency view decried by Judge Leven-thal. See note 1, supra. As such, it should be soundly rejected.7 See Remin v. District of Columbia Rental Housing Commission, 471 A.2d 275, 277, 279 (D.C.1984) (court will reject agency interpreta*1223tion if it is incompatible with the statutory purposes or based on faulty legal premise); Totz v. District of Columbia Rental Accommodations Commission, 412 A.2d 44, 46 (D.C.1980) (court will reject agency interpretation if plainly erroneous or ineon-sistent with the statute).

.Professor Davis notes that "[i]n the context of control of discretion" courts hold that "an agency must follow precedents or explain why not, and that is the prevailing law that applies to agencies that use precedents as guides." 4 Davis, Administrativk Law, § 20:11 at 37 (1983).
In Greater Boston, supra, Judge Leventhal explained that the balance between judicial restraint and judicial supervision of agency action enables the courts and the agencies to be "collaborative instrumentalities of justice.” 143 U.S.App.D.C. at 393-94, 444 F.2d at 851-52 (quoting United States v. Morgan, 313 U.S. 409, 61 S.Ct. 999, 85 L.Ed. 1429 (1941)). He further noted that the application of the judicial supervisory function that has evolved "with the enormous growth and significance of administrative determinations in the past forty or fifty years has insisted on reasoned decision-making.” Id. 143 U.S.App.D.C. at 394, 444 F.2d at 852.
Judicial vigilance to enforce the Rule of Law in the administrative process is particularly called upon where ... the area under consideration is one wherein the Commission’s policies are in flux. An agency's view of what is in the public interest may change, either with or without a change in circumstances. But an agency changing its course must supply a reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored, and if an agency glosses over or swerves from prior precedents without discussion it may cross the line from the tolerably terse to the intolerably mute.
Id., 444 F.2d at 852. [footnotes of the U.S. Circuit for the District of Columbia opinions, omitted].

. 14 D.C.M.R. 3511.8 (June 1986) provides:
The hearing examiner shall approve the petition for substantial rehabilitation and authorize an increase for each affected rental unit if the following facts are determined:
(a) The existing conditions in the subject housing accommodation endanger the health, welfare, and safety of the tenants;
(b) The conditions cannot adequately be corrected by improved maintenance and repair or limited capital improvements even if it requires temporary relocation of tenants as provided in D.C.Code § 45 — 1561(f);
(c) The substantial rehabilitation of the housing accommodation is in the best interests of the tenants; and
(d) The proposed expenditures equal or exceed fifty percent (50%) of the assessed market value of the housing accommodation.

. D.C.Code § 45-1525(c)(2) (1986 Repl.) provides:
[I]n determining whether substantial rehabilitation of a housing accommodation is in keeping with the interests of the tenants, the Rent Administrator shall consider, among other relevant factors:
(1) The impact of the rehabilitation on the tenants of the unit or housing accommodation; and
(2) The existing condition of the rental unit or housing accommodation and the degree to which any violations of the housing regulations in the rental unit ... constitute an impairment of the health, welfare and safety of the tenants. [Emphasis added]

. Although the federal Administrative Procedure Act, 5 U.S.C. § 553(c) (1977) requires federal agencies to provide a statement of the basis and purpose for agency rules, the absence of such a provision from the District of Columbia Administrative Procedure Act, D.C.Code § 1-1501 et seq., (1987 Repl.) does not exempt District agencies from explaining changes in interpretation of agency regulations. When a regulation is repealed and a new regulation is promulgated, notice of the change in policy is given, but when an agency changes its interpretation of its own regulations (after years of consistent interpretation) a reasoned explanation is necessary under the rule of law. See Greater Boston, supra, 143 U.S.App.D.C. at 394, 444 F.2d at 852 (quoted note 1, supra).

. In Smithy-Braedon, the 1977 Rental Housing Act was applicable, and the regulation at issue in the instant case was, at the time, in the form of proposed regulations. The 1977 Act provided that the Rent Administrator was to consider the degree to which housing code violations impaired the health, welfare and safety of the tenants. D.C.Law 2-54, § 703(a)(1), (2), quoted in Smithy-Braedon, supra, SR 110 at 1.

. The majority also appears to want to have it both ways. While acknowledging the D.C. Council’s concern about low and moderate income persons and the "severe shortage of rental housing,” and stating that the provision for substantial rehabilitation should be given a “parsimonious interpretation rather than an expansive one,” it, nevertheless, concludes that the Commission’s reinterpretation is not plainly wrong but requires the Commission to deem as "one of the Rent Administrator’s principal areas of inquiry" whether existing conditions constitute a danger to the tenant’s health, safety and welfare. Majority opinion at 1211, 1212 & 1213-1214. The majority also acknowledges that the effect of the landlord’s substantial rehabilitation may be no less than the departure of existing tenants because of the raised rents. Majority opinion at 1214.

. The members of the Commission undoubtedly carry out their responsibilities with care. This court has not explicitly held that an agency must provide a reasoned explanation for new interpretations of agency regulations. Cf. Citizens Association of Georgetown Inc. v. Zoning Comm'n of D.C., 155 U.S.App.D.C. 233, 238, 477 F.2d 402, 407 (1973) (while commission’s actions entitled to a presumption of validity, it must "put forward, or the court [be] otherwise able to discern, some basis in fact and law to justify the action as consistent with reasonableness.”). The rent control statutes and regulations have repeatedly changed, and hence, the issue may not have been presented to the court. It is long past time, however, for agencies of the District government to appreciate that their power is accompanied by the responsibility to explain in a reasoned and rational way changes in the prior interpretations of their regulations.