Court Opinion

ID: 4942498
Source: CourtListenerOpinion
Date Created: 2021-09-24 11:41:02.706705+00
Date Added: 2024-06-11T08:14:57.335324
License: Public Domain

HOOD, Associate Judge
(dissenting).
I think the -court avoids deciding an issue which is basic in this appeal. The petitioner makes the assertion that under section 4(b) of the Act, quoted in the court’s -opinion, he is entitled to receive “full compensation for increased expenses” unless the receipt of such would place the rents above those generally prevailing for comparable housing accommodations. The Administrator takes issue with this and says he is authorized to compensate “in whole or in part” for increased operating costs. Yet the court says this issue is not before it and refuses to decide it. I think it is incumbent on the court to decide whether petitioner is entitled to full compensation and, if so, what constitutes full compensation and how it is to be computed.
By the express wording of section 4(b) the Administrator upon proof of a substantial rise in operating costs “may by order adjust such maximum-rent ceiling * * ‡ in such manner or amount as he deems proper to compensate therefor, in whole or in part, if he finds such adjustment necessary or appropriate to carry -out the purposes of this Act.” To me it seems plain that the Administrator is not required to give full compensation but has broad discretion in making adjustments. He has a greater duty than merely determining increased -costs and computing therefrom increased rent. He has a duty to adjust in an amount compensating only in part if he finds that partial -compensation is necessary or appropriate to carry out the purposes of the Act. It follows that a landlord is not of right entitled to demand full compensation.
The discretion of the Administrator in making adjustments is, of course, not unlimited. His action must be the result of informed judgment; the increase in rent must bear a reasonable relation to the increase in costs; and his action must not be capricious or arbitrary. The burden is on petitioner to show an abuse of discretion and a showing, as claimed here, of increased costs in excess of 10% and an allowance of increase in rents of 8% does not sustain that burden.
If the foregoing is correct, it seems to me to follow that the court is in error in holding there was a lack of due process in the proceeding because the Administrator failed to disclose the process by which he reached the allowed increase. The Administrator rejected none of petitioner’s evidence. From it he found that petitioner had sustained a substantial rise in costs justifying an upward adjustment in rents. The extent of such adjustment was in his discretion and in my opinion he was not required to state the process by which in the exercise of his discretion he arrived at the allowed increase.
The court says the parties are entitled to know the basis upon which an application is granted in whole or in part or refused. *665What does this mean? The basis of any order of adjustment is of course the evidence in the case. In this case petitioner alone offered evidence and none of it was rejected. So the statement of the court as applied to this case apparently means that the Administrator should have informed petitioner why the increase allowed did not coincide exactly with the increase asked. Yet the court refuses to say whether the petitioner is entitled to an increase equal to the increase proved, or whether the increase allowed is within the Administrator’s discretion. There is a vast difference in the rights of the parties, the duties of the Administrator, and the procedure to be followed, depending upon whether the Administrator must determine the increase in costs with accounting accuracy and must from that determination grant an increase in rents equal thereto, or whether the Administrator upon proof of a substantial rise in costs may make such adjustment to compensate therefor in whole or in part as he finds necessary or appropriate to carry out the purposes of the Act.
As I understand the court’s opinion, it does not hold that the method of computation used by the Administrator in this case was erroneous but it nevertheless orders the Administrator to “determine anew the principles to be followed.” Does this mean that the method used was wrong and that a different one must be used? If this is the effect of the decision then I think the court should point out the defects in the method used and should state the principles to be followed, The court holds that the Administrator cannot adopt different “fundamental bases” in cases where the “fundamental facts” are approximately the same. But unless there was error in the fundamental basis in this case I see no reason for reversing it because some other 'basis was used in some other case, and the court points out no such error.
In my opinion the record discloses that there was no error in receipt or rejection of evidence by the Administrator; that the evidence justified the finding of a substantial rise in petitioner’s operating costs; that the allowed increase in rents bears a reá-sonable relation to the increase in costs; and that the extent of the increase in rents was within the Administrator’s discretion. Accordingly, I would affirm the Administrator’s order.
In conclusion, I think that underlying the court’s opinion is a failure to recognize that the Rent Act is an emergency law of a temporary nature. The office of the Administrator is not a permanent rate-making agency. Many rules applicable to the latter class of agency have no application here. The broad discretion given the Administrator does not and probably could not exist in the permanent agencies. “A limit in time, to tide over a passing trouble, well may justify a law that could not be upheld as a permanent change.” Block v. Hirsh, 256 U.S. 135, 157, 41 S.Ct. 458, 460, 65 L. Ed. 865, 16 A.L.R. 165. Our Act, like the National Act, 50 U.S.C.A.Appendix, § 1881 et seq., is not a permanent substitute for the normal operation of competitive forces but is a bridge over a period of emergency. Wilson v. Brown, Em.App., 137 F.2d 348.