Cisneros v. Alpine Ridge Group

PETITIONER: Cisneros, Secretary Of Housing And Urban Development, et al.
RESPONDENT: Alpine Ridge Group et al.
LOCATION: Superior Court of the District of Columbia

DOCKET NO.: 92-551
DECIDED BY: Rehnquist Court (1991-1993)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 508 US 10 (1993)
ARGUED: Mar 30, 1993
DECIDED: May 03, 1993

ADVOCATES:
Michael R. Dreeben - or behalf of the Petitioners
Warren J. Daheim - on behalf of the Respondents

Facts of the case

Question

Media for Cisneros v. Alpine Ridge Group

Audio Transcription for Oral Argument - March 30, 1993 in Cisneros v. Alpine Ridge Group

William H. Rehnquist:

We'll hear argument next in Number 92-551, Henry Cisneros v. Alpine Ridge Group.

Spectators are admonished to remain silent while you're in the courtroom.

The Court remains in session.

Wait to talk till you get outside.

Mr. Dreeben.

Michael R. Dreeben:

Thank you, Mr. Chief Justice, and may it please the Court:

This case involves a due process challenge to a Federal statute, section 801 of the HUD Reform Act, which revises the process for adjusting rents in the section 8 program.

Section 8 provides federally subsidized housing for low-income tenants.

The Ninth Circuit held that the statute abrogates contract rights between section 8 project owners and the Department of Housing and Urban Development.

The Court of Appeals therefore concluded that the statute is unconstitutional under the Due Process Clause of the Fifth Amendment.

In our view, that holding is wrong for three reasons:

First, the contract right on which the owners base their challenge to section 801, the right to be free of individual comparability studies when rents are adjusted, is not guaranteed by the contracts in question.

As a result, the contract claim that forms the basis for the Due Process attack does not exist.

Second, even if the owners had the contract right that they claim, section 801 does not constitute a substantial impairment of that right within the meaning of this Court's cases.

And finally, even assuming that the impairment is substantial enough to warrant further inquiry, section 801 satisfies the Due Process Clause because Congress acted rationally and permissibly in reforming the rent adjustment process in the section 8 program both to reinstate the program's market rent premise and to impose uniform national standards.

Now, the starting point in this case is the assistance contracts that the project owners enter into with HUD or with the local intermediaries.

Respondents' claim is that they have a contract right to automatic annual rent adjustments each year based on a published HUD formula.

They deny that under the contracts HUD can apply a cap to that adjustment based on the results of what has been called a comparability study, which is akin to an appraisal or a survey of local comparable rents at projects that do not receive Federal assistance.

In our view, the language of the contracts is dispositive.

It appears on pages 4 and 5 of our brief.

Section 9 of the contract first provides for adjustments based on a published factor determined by HUD, but the contract goes on to provide what is called an overall limitation, and that limitation states:

"Notwithstanding any other provisions of this contract, adjustments as provided in this section shall not result in material differences between the rents charged for assisted and comparable, unassisted units as determined by the Government. "

Now, based on that provision, HUD conducted its comparability studies... surveys of market rents at comparable properties.

When HUD concluded that the adjustments that would be produced under the factor technique would produce rents that materially differed from those charged at the comparable units, it used the comparability studies as a cap.

In our view, the contract clearly authorizes this.

The entire--

Sandra Day O'Connor:

Well, Mr. Dreeben, now, was the decision of the Ninth Circuit basically that that provision should be read as requiring the Government to factor in those differences in the published formula?

Michael R. Dreeben:

--That's correct, Justice O'Connor.

The Ninth Circuit interpreted this overall limitation as a subordinate guideline for HUD to use in composing the factors, and in our view, that interpretation is wrong for several reasons.

First, it's not justified by the plain language of the contract.