845 F.2d 1072 (D.C. Cir. 1988), 86-7037, Silverman v. Barry

Docket Nº:86-7037.
Citation:845 F.2d 1072
Party Name:Robert I. SILVERMAN, et al., Appellants, v. Marion BARRY, Mayor of the District of Columbia, et al.
Case Date:May 03, 1988
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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Page 1072

845 F.2d 1072 (D.C. Cir. 1988)

Robert I. SILVERMAN, et al., Appellants,

v.

Marion BARRY, Mayor of the District of Columbia, et al.

No. 86-7037.

United States Court of Appeals, District of Columbia Circuit.

May 3, 1988

Page 1073

       Rehearing En Banc Denied July 15, 1988.

       Argued Sept. 10, 1987.

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       Appeal from the United States District Court for the District of columbia.

       Burton A. Schwalb, Washington, D.C., for appellants.

       Lutz Alexander Prager, Asst. Deputy Corp. Counsel, with whom Frederick D. Cooke, Jr., Acting Corp. Counsel, and Charles L. Reischel, Deputy Corp. Counsel, Washington, D.C., were on the brief for appellees, Barry, Mayor of the District of Columbia, et al.

       Lynne Bernabei, Washington, D.C., for appellee, The Group to Save Van Ness South for Everybody, Inc.

       Before WALD, Chief Judge, MIKVA and EDWARDS, Circuit Judges.

       Opinion for the Court filed by Circuit Judge MIKVA.

       MIKVA, Circuit Judge:

       Appellants in this case are suing the District of Columbia for denying them permission to convert a rental apartment building they own to cooperative or condominium apartments. They bring both constitutional and statutory claims, and challenge both the District's actions and the conversion statutes under which it acted. Appellants seek damages in the amount of the difference between the price they sold the building for, and the price they could have obtained had they been permitted to convert it.

       Appellants are the sole general partners in a limited partnership that owned Van Ness South, an apartment building in the Northwest section of Washington, D.C. In 1979 and 1980, they attempted without success to convert the building to cooperative or condominium apartments. Eventually, they sold the still-unconverted building and filed suit in U.S. District Court alleging that they had been illegally prevented from converting it. They contended in the suit that in denying them permission to convert the building, the District of Columbia deprived them of due process and equal protection of the law in violation of the Fifth Amendment. In addition, appellants challenged the statutes regulating conversion as violating the Due Process Clause of the Fifth Amendment and the D.C. Home Rule Act.

       The district court held that neither the District's actions nor the statutes under which it acted violated appellants' rights to due process or equal protection. It also found the claim under the D.C. Home Rule Act to be without merit. We affirm that decision.

  1. BACKGROUND

           Appellants are the sole general partners in Van Ness Properties III, a District of Columbia limited partnership. The partnership built and owned a 625-unit apartment building known as Van Ness South, located at 3003 Van Ness Street, in Northwest Washington. Appellants bring this suit against the District of Columbia, the District's Department of Housing and Community Development (DHCD), and three officers of the District, including the Mayor. Appellee-intervenor, Group to Save

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    Van Ness South for Everybody, Inc., is a tenant group organized in 1980 and incorporated in 1981 for the purpose of maintaining Van Ness South as rental property.

           This case marks Silverman v. Barry 's second appearance on the docket of this court. Filed initially in the D.C. District Court, the suit was dismissed by that court for want of jurisdiction. That decision was overturned on appeal by this court, and the case was remanded to the district court for trial. See Silverman v. Barry, 727 F.2d 1121 (D.C.Cir.1984). The district court then heard the case on the merits and dismissed with prejudice. Silverman v. Barry, No. 81-0394 (D.D.C. Filed Aug. 22, 1986) (Findings of Fact and Conclusions of Law). Appellants appeal from that decision.

    1. District Regulation of Conversions

             The District of Columbia has long regulated the conversion of rental property to cooperatives and condominiums. The regulation of condominium conversion within the District began with the Condominium Act of 1976 which restricted condominium conversions to buildings that were "high rent" according to a statutory formula, that had a threshold vacancy rate, or in which a majority of the tenants consented to conversion. D.C.Law 1-89, codified in D.C.Code Secs. 5-1201 et seq. (1978 Supp.). That statute, with changes not material to this case, remained in effect until May 29, 1979, when the District's moratorium on "high rent" conversions began. As of April 1979, condominium conversions were begun by filing condominium instruments with the Recorder of Deeds. District regulations required the applicant then to obtain a Certificate of Eligibility (C/E) from the District.

             The regulation of cooperative conversions within the District dates back considerably earlier. Since 1940, the District of Columbia Cooperative Association Act has required building owners to file articles of incorporation to convert a building to a cooperative. See D.C.Code Secs. 29-801 et seq. (1973). From 1975 to 1979, the District enacted a series of consecutive emergency and non-emergency acts that made it considerably more difficult than previously to convert rental apartments to cooperatives. The first emergency act, in effect from January 25, 1979 to April 25, 1979, prohibited conversion of rental property in the District to cooperatives except that the Mayor could grant an "exemption" in three cases: (i) if fewer than fifty percent of the units in the building were occupied; (ii) if at least 51 percent of the tenants consented to the conversion; or (iii) if the building qualified as "high rent" according to a statutory formula. D.C.Law Act 3-2, Jan. 25, 1979, 25 D.C.R. 7680 (1979). To convert to cooperatives as a "high rent" building, the District, by rule and practice, required the applicant to obtain a Certificate of Exemption ("C/Ex") from the conversion moratorium. Before issuing a "high rent" C/Ex or C/E, DHCD verified that the rents in the application exceeded the statutory minimums necessary to qualify for "high rent."

             The emergency acts regulating cooperative conversions were passed by the District in smooth succession with one exception: the seventh reenactment of the emergency act expired on April 25, 1979, and the eighth did not become effective until May 4, 1979. A nine-day gap was thus created during which a building in the District could be converted to cooperatives by the owner simply filing articles of incorporation with the Recorder of Deeds. Even during the gap, however, the DHCD took the position that an owner had to obtain a C/Ex before it would approve a cooperative conversion. (Although a nine-day gap existed in the regulation of cooperatives, appellants' application was pending for only six business days. Appellants filed their application on the second day of the gap, April 26, and two of the nine days were weekend days, on which the DHCD office was closed.)

             On May 29, 1979, the District enacted a moratorium on "high rent" cooperative and condominium conversions. The Emergency Condominium and Cooperative Stabilization Act of 1979 prohibited the District from issuing any high rent C/E's or C/Ex's. D.C.Act 3-44, 26 D.C.R. 10363 (1979). The

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      original Act lasted 90 days, but it was followed by three similar 90-day emergency acts, D.C.Act 3-95, 26 D.C.R. 1014 (1979); D.C.Act 3-132, 26 D.C.R. 2436 (1979); D.C.Act 3-151, 27 D.C.R. 849 (1980), and on February 23, 1980 by an emergency act which went into effect for 180 days. Condominium and Cooperative Conversion Stabilization Act of 1979, D.C.Law 3-53, 27 D.C.R. 37, 958 (1980). These moratoria, directed at high-rent conversions, did not affect conversions based on tenant-consent procedures or on vacancies.

             On October 19, 1979, the D.C. Superior Court held that the District's practice of enacting successive emergency acts instead of passing permanent legislation violated the District of Columbia Self-Government and Government Reorganization Act, P.L. 93-198, 1 D.C.Code Secs. 121 et seq., as amended (1979 Supp.) ("Home Rule Act"). The court enjoined enforcement of the emergency act then in effect governing cooperative and condominium conversions. Washington Home Ownership Council, Inc. v. District of Columbia, No. 10624-79 (D.C.Sup.Ct. Oct. 19, 1979). On October 22, the District of Columbia Court of Appeals stayed the Superior Court order. District of Columbia v. Washington Home Ownership Council, Inc., 415 A.2d 1349, 1350 n. 4 (1980) (en banc). During the pendency of the appeal, the District continued to pass emergency acts that imposed the same restrictions on conversion to cooperatives and condominiums that the previous acts had.

             On May 28, 1980, the Court of Appeals sitting en banc affirmed the Superior Court's holding, but stayed enforcement of its decision for 90 days to provide the District "an appropriate interval in which to deal with its emergency legislation," id. at 1360, and remanded the case. On December 3, 1980, the Superior Court ruled on remand that its decision would be prospective only. As a result, the emergency acts passed prior to August 28, 1980--the date on which the Court of Appeals mandate issued--remained valid law. Washington Home Ownership Council, Inc. v. District of Columbia, No. 10624-79 (D.C.Sup.Ct. Dec. 3, 1980).

             Before the Court of Appeals mandate issued, on August 10, 1980, the Mayor signed into law the Rental Housing Conversion and Sale Emergency Act of 1980, which was enacted for 90 days as emergency legislation. D.C.Act 3-248, 27 D.C.R. 3954 (1980). It was, in the wake of the decision in Washington Home Ownership Council, the last emergency act that the District could pass governing conversions. In September, the August 10 emergency act was superseded by a permanent District law, the Rental Housing Conversion and Sale Act of...

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