Commissioner of Dept. of Community Affairs v. Medford Housing Authority

• Decision Date: 10 July 1973
• Citation: 363 Mass. 826,298 N.E.2d 862
• Parties: COMMISSIONER OF the DEPARTMENT OF COMMUNITY AFFAIRS v. MEDFORD HOUSING AUTHORITY. (and a companion case 1 )
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 862

298 N.E.2d 862

363 Mass. 826

COMMISSIONER OF the DEPARTMENT OF COMMUNITY AFFAIRS v. MEDFORD HOUSING AUTHORITY. (and a companion case¹)

Supreme Judicial Court of Massachusetts, Suffolk.

Argued May 9, 1973.

Decided July 10, 1973.

Danielle E. deBenedictis, Asst. Atty. Gen., Walter H. Mayo, III, Asst. Atty. Gen., with her for the Commissioner of Community Affairs.

Melvyn Zarr, Boston, Daniel D. Pearlman and Howard E. Cohen, Framingham, with him, for Daniel Bates and others.

John S. Ahern, Medford, for Medford Housing Authority.

Jeanne C. Kettleson, Cambridge, for Boston Housing Authority and another, amici curiae, submitted a brief.

Before TAURO, C.J., and REARDON, BRAUCHER, HENNESSEY and WILKINS, JJ.

BRAUCHER, Justice.

The plaintiff, the Commissioner of the Department of Community Affairs (DCA), filed a bill in equity in the county court seeking declaratory and injunctive relief against the Medford Housing Authority (MHA). DCA seeks a declaration that it had authority to promulgate five sets of regulations covering local housing authorities (LHAs) like MHA: (a) Income and Occupancy Regulations, (b) Regulations for the Determination of Rents in State-Aided Aided Low Rent Housing, (c) Regulations Prescribing Lease Provisions for Public Housing, (d) Regulations Relating to Tenant Grievance Procedures, and (e) Regulations for Tenant Participation in the Administration of Public Housing in Massachusetts. DCA also seeks injunctive relief to enforce the declaration. MHA denies the authority of DCA to promulgate the regulations and refuses to comply with them.

In the companion case, four tenants of State-aided public housing in Medford seek similar relief against MHA. A single justice of this court allowed a motion to consolidate the two suits and reserved and reported them for determination by the full court upon the pleadings and a statement of agreed facts.

We summarize the agreed facts. MHA is obliged by its 'Financial Assistance Contracts' with the Commonwealth to administer its State-aided housing projects in accordance with DCA regulations. The Income and Occupancy Regulations promulgated by DCA became effective December 30, 1971; they provided that within one month of their effective date MHA should submit to DCA a description of its procedure for determining tenants' income. MHA has not done so. Before January, 1972, MHA required all its tenants to submit annually applications for continued occupancy and copies of W--2 Forms filed with the Internal Revenue Service (IRS) in the previous year. In January, 1972, MHA notified its tenants that each was also required to furnish Form 4506, which would allow MHA to obtain a copy of page 1 of the tenants' Federal income tax return. This '4506 procedure' has never been submitted to or approved by DCA; by letters dated March 2, 1972, and April 5, 1972, DCA disapproved the procedure and directed MHA to discontinue it and to notify DCA as to the steps taken. MHA has not so notified DCA.

In July, 1972, MHA voted to initiate eviction proceedings against tenants who failed to comply with the '4506 procedure'. Forty-two of 766 tenants failed to comply, and about February 7, 1973, MHA notified the four tenant plaintiffs and two tenants of federally-aided projects of its intent to evict them. After a hearing held on February 26, 1973, at the request of those six tenants, MHA voted to evict each of them. On or before March 1, 1973, notice of intentiton to terminate the tenancy on April 1, 1973, was served on each of the six tenants.

On February 22, 1973, DCA issued the remaining four sets of regulations here in issue. Those regulations were filed with the Secretary of State on February 26, 1973, and published by him on March 2, 1973. By a letter dated March 9, 1973, DCA again disapproved the '4506 procedure' and ordered MHA to discontinue it. These suits allowed, and a preliminary injunction was issued against the threatened evictions. The Boston Housing Authority and the Somerville Housing Authority filed a brief as friends of the court supporting the position of DCA.

1. Authority for these suits. The suit by DCA is authorized by G.L. c. 121B, § 29, inserted by St.1969, c. 751, § 1: 'Except as otherwise stated therein, compliance with this chapter, the rules and regulations adopted by the department and the terms of any low-rent housing project or clearance project authorized by this chapter, may be enforced by a proceeding in equity.' See the prior provision G.L. c. 121 § 26U; Sullivan v. Fall River Housing Authy., 348 Mass. 738, 739, 205 N.E.2d 701. The Sullivan case raises some question as to the authorization for the suit by the tenants. But no objection is made on that account, the tenants have an obvious and vital interest in the controversy, and the consolidation of the two suits is like allowance of a motion to allow the tenants to intervene in the DCA suit. It amounts to no more than an opportunity for the tenants to argue as friends of the court. See Cambridge Elec. Light Co. v. Department of Pub. Util., Mass., 295 N.E.2d 876. ^a Compare West Broadway Task Force, Inc. v. Commissioner of the Dept. of Community Affairs, Mass., 297 N.E.2d 505. ^b

2. Authority for regulations. The basic controversy relates to the scope of DCA's power to issue regulations under G.L. c. 23B, § 6, ² and c. 121B, § 29. ³ DCA contends, relying on the legislative history of the statutes, that the Legislature intended LHAs to be 'operating agencies' (G.L. c. 121B, § 1) subject to the broad supervision and control of DCA. See 1938 House Doc. No. 5263, pp. 2--3; Rep. A.G., House Doc. No. 5000, pp. 10--14; 1970 House Doc. No. 5263, pp. 2--3; Rep.A.G., Pub.Doc. No. 12 (1967) 237; Rep.A.G., Pub.Doc. No. 12 (1971) 49. It points also to G.L. c. 121B, § 11(m), as amended by St.1970, c. 851, § 2, under which an 'operating agency' has the power '(m) To make, and from time to time amend or repeal, subject to the approval of the department, by-laws, rules and regulations, not inconsistent with pertinent rules and regulations to the department to govern its proceedings and effectuate the purposes of this chapter' (emphasis supplied). MHA responds that DCA has no legislative authority to make rules for the internal operation of local housing projects, that the DCA regulations, instead of prescribing 'standards' and 'principles,' restrict the operations of the LHA and take away any individual discretion in its essential operating and management functions, and that G.L. c. 121B, § 32, spells out in detail the requirements the LHA must follow in the internal operation of its affairs.

Without extended discussion, we hold that DCA is right and MHA is wrong in this basic controversy. We have recognized the 'supervisory capacity' of the responsible State agency under predecessor statutes. G.L. c. 121, § 26EE, as appearing in St.1938, c. 484, § 1. Wellesley Housing Authy. v. S. & A. Allen Constr. Co., 340 Mass. 466, 473, 165 N.E.2d 88; Sullivan v. Fall River Housing Authy., 348 Mass. 738, 739, 205 N.E.2d 701; Belinfante v. Mayor of Revere, 352 Mass. 712, 714, 227 N.E.2d 502. We do not find in the statutes any such distinction between standards and principles, on the one hand, and internal operations, on the other, as that for which MHA contends. See Cambridge Elec. Light Co. v. Department of Pub. Util., Mass., 295 N.E.2d 876. ^c General Laws c. 121B, § 29, authorities 'regulations prescribing standards and stating principles governing the . . . maintenance and operation of . . . housing projects by housing authorities.' The authority so granted is ample to cover large matters and small, procedural and substantive, internal and external. Any type of decision which is open to LHAs is also open to supervision by DCA. See West Broadway Task Force, Inc. v. Commissioner of Dept. of Community Affairs, Mass., 297 N.E.2d 505; ^d Friedman, public Housing and the Poor: An Overview, 54 Cal.L.Rev. 642, 662--669.

3. The '4506 procedure.' It is common ground that the standards and tests of eligibility of tenants for continued occupancy are to be those prescribed by DCA in accordance with the law. Similarly, it is not disputed that to determine eligibility LHAs must determine the net income of each tenant family, nor that they may properly require annual submission of an application for continued occupancy. There is no attack on MHA's requirements that the application contain an income statement and be accompanied by W--2 Forms. But it is disputed whether MHA may properly require tenants to execute IRS Form 4506, requesting IRS to furnish to MHA a copy of page 1 of the tenants' Federal income tax return.

This '4506 procedure,' if proper, is part of the 'by-laws, rules and regulations' of MHA, and under G.L. c. 121B, § 11(m), is 'subject to the approval of the department' and must not be 'inconsistent with pertinent rules and regulations of the department.' To implement § 11(m), DCA Income and Occupancy Regulations, §§ 1.1 and 1.2, properly require LHAs to send to DCA copies of detailed descriptions of their income and rental determination procedures. HMA did not do so, nor did it seek or obtain DCA's approval of the requirement. MHA alleges that it had no knowledge of the regulation prior to suit, but it was specifically notified in writing three times that DCA disapproved the MHA requirement. It follows that the establishment of the '4506 procedure' by MHA was ineffective under G.L. c. 121B, § 11(m), in the absence of DCA approval.

Initially DCA flatly disapproved any requirement 'that tenants submit a photostatic copy of their tax return from the Internal Revenue Service, for occupancy or continued occupancy.' The DCA regulations issued February 22, 1973, however, forbid a requirement 'that tenants disclose copies of income tax returns or portions thereof, unless the LHA has established reasonable cause that the tenant is supplying false or incomplete information.' DCA Regulations for the...