Wilson v. D.C. Rental Hous. Comm'n

Decision Date18 May 2017
Docket NumberNo. 15–AA–1169,15–AA–1169
CourtD.C. Court of Appeals
Parties David G. WILSON, Petitioner, v. DISTRICT OF COLUMBIA RENTAL HOUSING COMMISSION, Respondent, and Smith Property Holdings Van Ness, L.P. & Archstone–Smith Communities, LLC, Intervenors.

David G. Wilson, pro se.

Karl A. Racine, Attorney General for the District of Columbia, Todd S. Kim, Solicitor General, and Loren L. AliKhan, Deputy Solicitor General, filed a statement in lieu of brief in support of intervenor.

Roger D. Luchs was on the brief for intervenors.

Before Thompson and Beckwith, Associate Judges, and Pryor, Senior Judge.

Thompson, Associate Judge:

Petitioner David G. Wilson challenges two decisions by the District of Columbia Rental Housing Commission ("RHC") in which the RHC upheld determinations by an Administrative Law Judge ("ALJ") of the Office of Administrative Hearings ("OAH"). The ALJ rejected petitioner's claims (1) that his housing provider's offer to continue his rent for the twelve-month period beginning October 2, 2004, at the same monthly rate he had theretofore paid as a holdover month-to-month tenant if he signed a new twelve-month lease—which offer petitioner accepted—constituted a rent increase, which the housing provider effected without complying with statutory and regulatory notice and filing requirements; and (2) that the housing provider's offer of that and other lease options that made it financially disadvantageous for petitioner to remain in his rental unit as a month-to-month tenant was retaliatory and coercive conduct, in violation of D.C. Code § 42–3505.02 (2003 Supp.). For the reasons explained below, we affirm the RHC's rulings.

I.

Petitioner leased an apartment unit (unit S1006) located at 3003 Van Ness Street, N.W., from intervenors Smith Property Holdings Van Ness LP and Archstone–Smith Communities LLC (the "Housing Provider") for a term starting on June 24, 2002, and ending on June 30, 2003. The leased unit was rent-controlled under the Rental Housing Act of 1985 (the "Act"), which, at that time, permitted a landlord to increase the rent charged for a housing accommodation up to the amount of the specific rent ceiling for that accommodation. See D.C. Code § 42–3502.06 (a) (2003 Supp.).

On July 1, 2003, after his lease ended, and without executing a new lease, petitioner remained on the property as a hold-over, month-to-month tenant, paying the same rent ($1303 per month) as under his prior lease. On August 4, 2004, over a year after the month-to-month tenancy began, the Housing Provider sent petitioner a letter providing him twelve leasing options should he wish to remain in the rental unit. One option allowed petitioner to remain a month-to-month tenant but increased his rent from $1303 to $1755 per month. Another option allowed petitioner to sign a twelve-month lease at a continued monthly rent of $1303. The other options involved lease terms between two and eleven months, with rent increases inversely proportional to the length of the lease. No option in the letter increased petitioner's rent to an amount above the rent ceiling, which at that time was $2411. According to the letter, the option petitioner chose would become effective on October 1, 2004. The letter also stated that if the housing provider received no response from petitioner by August 23, 2004, his tenancy would remain month-to-month at the increased rate of $1755, effective October 1, 2004.

Petitioner chose to sign a twelve-month lease at a monthly rent of $1303. However, on March 6, 2007, he filed a Tenant Petition raising two principal claims: First, petitioner alleged that his new twelve-month lease afforded the Housing Provider a benefit over and above the cash rental amount, in the form of "a guaranteed future cash flow for that [twelve]-month period." Petitioner contended that this additional "benefit" to the Housing Provider constituted a "rent increase" and, therefore, triggered notice and filing requirements (including notice about the justification for the rent increase, a summary of tenant rights, and a list of sources of technical assistance for tenants).1 Petitioner contended that because the Housing Provider had not complied with those requirements, petitioner was "entitled to a refund of $4522 for each of the [twelve] months that the violation continued ... plus treble damages for the bad faith exhibited by the Housing Provider's threats ...." Second, petitioner alleged that "[t]he Housing Provider "engaged in retaliatory action when it coerced [him] into accepting a term lease and abandoning his month-to-month lease."

On January 7, 2011, the OAH ALJ dismissed the Tenant Petition with prejudice, finding that "[a] discount in the amount of legal rent charged in return for a lease is not illegal," that "[t]he notice and filing requirements were not necessary," and that the "tenant [was not] coerced into ‘abandoning a month-to-month tenancy.’ " Petitioner appealed to the RHC, which, in a March 10, 2015, Decision and Order, affirmed the ALJ's decision except with respect to the retaliation claim. The RHC remanded as to that claim, concluding that "the ALJ failed to address the legal requirements of a claim of retaliation under the Act[ ] and [to] make factual findings and provide conclusions of law with respect to the merits of the Tenant's claim ...." On remand, the ALJ again rejected petitioner's retaliation claim, finding that "[o]ffering a lease option was a decision Housing Provider made independent of any action on part of [petitioner] or any tenant [and, therefore,] was not retaliatory." In a September 25, 2015, Decision and Order, the RHC affirmed the ALJ's determination on remand. Petitioner now seeks review of the RHC rulings.

II.

This court will affirm an agency decision unless the ruling is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law. See Panutat, LLC v. District of Columbia Alcoholic Beverage Control Bd. , 75 A.3d 269, 272 (D.C. 2013). "Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which [the legislature] has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise." Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co. , 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). This court "owe[s] considerable deference to the RHC's interpretation of the statutes it administers and the regulations it promulgates." Sawyer Prop. Mgmt. of Maryland, Inc. v. District of Columbia Rental Hous. Comm'n , 877 A.2d 96, 102 (D.C. 2005). "We are obliged to sustain the RHC's interpretation of those statutes and regulations unless it is unreasonable or embodies ‘a material misconception of the law,’ even if a different interpretation also may be supportable." Id. at 102–03 (quoting Jerome Mgmt., Inc. v. District of Columbia Rental Hous. Comm'n , 682 A.2d 178, 182 (D.C. 1996) ).

"[T]o persuade us to reject the Commission's construction ..., the [challenging party] must show that it is plainly wrong or incompatible with the statutory purpose." Sawyer Prop. Mgmt. , 877 A.2d at 103 (quoting Winchester Van Buren Tenants Ass'n v. District of Columbia Rental Hous. Comm'n , 550 A.2d 51, 55 (D.C. 1988) ); see also United States v. Shimer , 367 U.S. 374, 382–83, 81 S.Ct. 1554, 6 L.Ed.2d 908 (1961) (stating that the court "should not disturb" an agency's policy choice "unless it appears from the statute or its legislative history that the accommodation is not one that [the legislature] would have sanctioned"); Money v. Office of Pers. Mgmt. , 811 F.2d 1474, 1477 (Fed. Cir. 1987) ("The longstanding interpretation placed on a statute by the agency charged with its administration should be followed unless there are compelling indications that it is wrong." (citing Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. 837, 843–44, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) )).

III.

We turn first to petitioner's argument that the RHC erred in rejecting his argument that the twelve-month lease the Housing Provider required as a condition of the $1303 monthly rent payment was a guaranteed-cash-flow benefit that constituted an additional rent amount that the provider could not lawfully charge without compliance with the statutory notice and filing requirements. We disagree because we conclude that the RHC's determination that such benefit was not the type of benefit cognizable as "rent" under the Act was consistent with the understanding of the term "rent" in previous court and RHC decisions and is not manifestly "wrong or incompatible with the statutory purpose." Sawyer Prop. Mgmt. , 877 A.2d at 103 (internal quotation marks omitted).

The Act defines "[r]ent" as "the entire amount of money, money's worth , benefit , bonus, or gratuity demanded, received, or charged by a housing provider as a condition of occupancy or use of a rental unit, its related services, and its related facilities." D.C. Code § 42–3501.03 (28) (2003 Supp.) (emphasis added). Nothing in the statute or implementing regulations explicitly addresses whether "rent" includes within its scope the types of benefits (such as what petitioner has referred to as "bankable" cash-flow, and as reduction of "constant turnover" in an apartment building) that may accrue to a housing provider from a twelve-month lease. In analyzing petitioner's claim, however, the RHC relied on the "typical[ ]," "limited" meaning of the term as utilized in a decision of this court and previous RHC decisions, all of which referred to the term "rent" as including money, goods, or services.3 Specifically, the RHC reasoned that "the meaning of ‘benefit’ within the Act's definition of ‘rent’ [is] limited to situations where a tenant...

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