Watkins v. Woods, 526
| Decision Date | 28 February 1950 |
| Docket Number | No. 526,527.,526 |
| Citation | 180 F.2d 359 |
| Court | U.S. Temporary Emergency Court of Appeals Court of Appeals |
| Parties | WATKINS et al. v. WOODS, Housing Expediter. APARTMENT BLDG. OWNERS & MANAGERS ASS'N OF CHICAGO v. WOODS, Housing Expediter. |
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Robert S. Cushman, Chicago, Ill., with whom David P. List, Chicago, Ill., was on the brief, for complainants W. A. P. Watkins and others.
Charles R. Sprowl, Chicago, Ill., for complainants Apartment Bldg. Owners & Managers Ass'n of Chicago.
Charles P. Liff, Chief, Appeals Section, Washington, D. C., with whom Ed Dupree, General Counsel, Office of the Housing Expediter, Washington, D. C., was on the brief, for respondent.
Alex Elson, Chicago, Ill., for Independent Voters of Illinois, amicus curiæ.
Before MAGRUDER, McALLISTER and LINDLEY, Judges.
Heard at Chicago February 24, 1950.
In May, 1949, the Cook County Rent Advisory Board of the Chicago Defense-Rental Area, acting under Section 204(e) of the Housing and Rent Act of 1947, as amended, 50 U.S.C.A.Appendix, § 1894(e), gave notice of a public hearing for the announced purpose of enabling the Board to take evidence on the following: "The adequacy of the general rent level of residential rental properties in Cook County, Illinois, and the net operating income of residential rental income generally in Cook County, Illinois, in the calendar year 1948, as compared with the calendar year 1942." The purpose of the hearing thus stated served to define the issue to be determined by the Board and bears also upon the scope of the issue now before us on judicial review of the Board's action.
In defining the purpose of the hearing, as above stated, the Board was proceeding according to instructions from the Housing Expediter contained in his "Handbook for Rent Advisory Boards" issued June, 1948.1 As we pointed out in Re Recommendation of Local Advisory Board of San Antonio Defense-Rental Area, 1948, 169 F.2d 955, 959, and again in Re Jamestown Defense-Rental Area, 171 F.2d 708, 710, the Act authorized the Housing Expediter to issue regulations deemed by him necessary to carry out the provisions of Section 204, and the legislative history indicates that Congress specifically contemplated that the Housing Expediter should issue instructions to local boards prescribing the manner in which they should perform their functions under the Act.
The Handbook provided that a recommendation by an advisory board for a general adjustment in rents "must be substantiated by one or more of the following:
From the announced purpose of the public hearing, it is apparent that the Board limited its inquiry to a determination of whether a recommendation for a general adjustment in rents was warranted on the first of the above three possible bases. The Handbook outlined "the specific evidence required" to substantiate a recommendation under each of the three headings. Where the recommendation is based on the comparative operating position, the Handbook provided that the Board "must submit evidence that the net operating income of rental properties generally in the area or class affected by the recommendation is lower in the current year than it was in the base year", and it was further provided that the Board "must secure income and expense data for a representative sample of residential rental properties." The term "representative sample" was defined. Where, as in the present case, the number of rental units in the area affected exceeded 500,000, it was prescribed that the maximum number of rental dwelling units in the sample must be 5,000. Moreover, and this we shall enlarge upon somewhat later, the Handbook provided that the individual properties included in the sample should be selected objectively, and that to secure a statistically accurate sample, data should be obtained for all of the properties in the sample originally selected.
From the foregoing, it is apparent that unless the record contains evidence showing the comparative operating position of rental properties in the two years, in compliance with the requirements of the Handbook, a recommendation for a general increase in rentals on that basis can not be deemed to be properly substantiated. The fact that the record might contain other evidence, of a circumstantial character, from which the inference might be drawn that the operating position of landlords generally had deteriorated, would not, of itself, be a sufficient basis for a recommended general increase of rents. The Housing Expediter has authority, within reasonable limits, to prescribe the type of proof necessary to support an affirmative recommendation; and in the Jamestown case, supra, 171 F.2d 708, 711, we gave general approval to the requirements of the Handbook in this particular as being "valid and reasonable."
On June 28, 1949, the Board, after deliberation upon the evidence introduced at the public hearing, voted its recommendation "that there be no general adjustment of the maximum rentals in Cook County, Illinois, at this time". As the sole factual basis for its recommendation, the Board found "the general level of residential rental properties in Cook County, Illinois, and the net operating income of residential properties generally in Cook County, Illinois, in the calendar year 1948 as compared with the calendar year 1942, to be adequate and that there is no need for any general adjustment of the maximum rents in that area." The Housing Expediter approved the recommendation, and the case came before us for review upon complaints filed by representative groups of landlords, as authorized by Section 204(e) of the Act. Construing the Board's sole finding to mean that the net operating income of landlords for the year 1948 was at least equal to that enjoyed by them in the year 1942, we concluded, from our examination of the record, that it did not contain adequate and substantial evidence to support that finding. We, therefore, were constrained to disapprove the negative recommendation of the Board; and we remanded the matter to the Board "to reconsider the evidence now in the record, together with such additional evidence as it may deem it appropriate to receive at a further hearing, if in its discretion it should decide to hold one within the next thirty days, and to make such findings of fact relating to the matter of an increase in maximum rents as the relevant and credible evidence, or lack of it, may justify, and thereupon to make an appropriate recommendation with respect thereto, in lieu of the recommendation which we have today disapproved." Watkins et al. v. Woods, 1949, 177 F.2d 516, 520.
On November 10, 1949, the Cook County Rent Advisory Board held a special meeting pursuant to the directions contained in the opinion of this court. After a general discussion of the import of the decision, a motion that the Board proceed to make findings of facts was presented and carried. Thereupon the secretary read three pertinent communications. The first, from member Ducey, who was not present at the meeting, proposed certain findings of fact. The second, from the Office of the Housing Expediter, was an interpretation of this court's decision of November 1, 1949, by the Expediter in response to a request submitted by one of the members of the Board. The third, from the attorneys for complainants, copies of which were distributed to the members, set forth proposed findings which would, if adopted, have necessarily resulted in a recommendation for a substantial general rent increase. After these communications had been read, Board Member Mann, having reviewed briefly the evidence on which he relied, moved adoption of findings which, in turn, were such as to necessitate a recommendation that there be no general increase. After lengthy consideration, during the course of which the Board rejected a suggestion that all proposed findings be pooled and further action thereon deferred until the members could study them, Mr. Mann's motion was carried by an 8-6 vote. Member Myer's motion that the Board recommend that there be no general rent increase was promptly carried by the same vote.
The "Findings and Recommendation of the Cook County Rent Advisory Board," copies of which were dispatched to the Housing Expediter on November 22, 1949, read, in essential part, as follows:
The Expediter approved the Board's recommendation by letter of December...
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