No less a light than Albert Einstein is reported to have said that the "definition of insanity is doing the same thing over and over again and expecting different results." That quote has always seemed more apocryphal than accurate to us, but it's a good definition regardless of who first uttered it.
Exhibit "A" appended to that definition might be New York City's "emergency" housing Rent Stablization Law, adopted for the first time in 1969 and renewed eleven times since. The RSL controls how much rent the owners of rent-stablized apartments may charge their tenants (you know, to keep poor folk like Faye Dunaway in their apartments). The city's justification for the RSL is to deal with a series of housing "emergencies" (initially, the "effects of war and the aftermath of hostilities," and then any rise in the city's vacancy rate above 5%), and to allow a "transition from regulation to a normal market of free bargaining between landord and tenant" while encouraging the new construction of apartments.
But in the 40-plus years since the RSL's initial adoption (and serial re-adoptions) the vacancy rate has never been north of 5%, and the promised transition to a free market and new construction didn't happen either.
The owner of an apartment building sued in federal court, asserting that the RSL violates due process and is an unconstitutional taking. The District Court predictably dismissed, and the Second Circuit predicatably affirmed. We say "predictably," because as Richard Epstein notes, "[t]he court’s short and uninspired opinion was undeniably correct as a matter of current constitutional law. But for that very reason, it was also hopelessly defective as a matter of constitutional theory."
In October, the property owner filed a cert petition. The respondents declined to file briefs in opposition, and the Court was originally scheduled to consider the petition in Friday's conference. But on December 5, the Court requested responses, due January 4, 2012. The HuffPo report "New York City Landlord Takes Rent Regulation Fight To Supreme Court" wondered why the Court would ask for opposition briefs if the law is as clear as Professor Epstein says it is (it is), and speculated that perhaps the cert pool memo identified an issue that at least one Justice found of interest. Of course we don't know what might have spurrred the Court's request, but in scanning the petition and the three amicus briefs submitted in support (see below for all three), one really stood out by making a very interesting argument. The amicus brief filed by two property owner organizations argued that the RSL's 40-year history of failing to accomplish its stated goals deprives it of its "rational basis" to which reviewing courts must defer:
This is a "back to the future case." The federal courts below failed to recognize the wisdom of hindsight available to them when considering whether to defer to the judgment of the City. Although transitioning from a regulated market to a free market while encouraging new construction may be a legitimate purpose, nearly half-a-century of history reveals that the RSL did not work, does not work, and will not work. Every three years, when the City again declares a housing emergency, it also acknowledges, as it must, that the RSL has again failed. The City cannot rationally believe that the RSL ever will achieve its goal. It is a sisyphean task doomed to failure and frustration that the RSL has laid on half the City's landlords. Enough is enough. Accordingly, this Court has a unique opportunity in this case to define the limits of judicial deference when there is a compelling history that a governmental program simply does not work.
Brief at 7. The brief highlights the Supreme Court's eminent domain trilogy (Berman, Midkiff, and Kelo), and argues "it is now apparent that the legitimate purposes of government action involved in those cases did not come to fruition in whole or in part. If the courts in Berman, Midkiff, and Kelo had the wisdom of hindsight available to them when considering whether to defer to the judgment of local government, they might have been decided differently." Br. at 10-11. The brief asserts that in those cases, the projected benefits of the takings were "colossal failure[s]." Br. at 13. To that list, the brief could have added the gas station rent control measure in Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005), which was ostensibly designed to lower gas prices, but did no such thing.
The brief makes sense, and seems designed to appeal to Justice Kennedy, who asserted in his Lingle concurring opinion that a regulation might be "so arbitrary or irrational as to violate due process. ...The failure of a regulation to accomplish a stated or obvious objective would be relevant to that inquiry."
But it's still a long shot in terms of constitutional law because a court applying the "rational basis" test as currently formulated will not likely care there's proof a government plan won't actually work, or that there's proof it hasn't worked. Because you never know, it might work. Cf. Einstein. As Gideon Kanner pointed out, the rational/conceivable basis test as currently applied by the courts means that judges simply will not examine the government's rationale for adopting a law:
In my post-Midkiff lectures, I have been using as an example of the absurdity inherent in this judicial formulation a hypothetical taking for senior housing for elderly Martians living among us. Would that pass muster as a "public use"? Hyperbole, you say? Be careful. In a prime example of Oscar Wilde’s dictum that life imitates art, I offer for your consideration the pertinent part of the transcript of an oral argument before the U.S. Court of Appeals for the Ninth Circuit. There, the U.S. Justice Department asserted that, if Congress were to enact laws for the benefit of unseen and undetected "space aliens" among us, the courts would have no alternative but to approve it as consistent with the Constitution:
. . . .
JUDGE FLETCHER: . . . Is it conceivable that space aliens are visiting this planet in invisible and undetectable craft?
MR. YELLIN: Is it conceivable?
JUDGE FLETCHER: That’s my question.
MR. YELLIN: Yes, it’s conceivable.
JUDGE FLETCHER: And that would be a basis for sustaining Congressional legislation, if . . . the person sponsoring the bill said, "Space aliens are visiting us in invisible and undetectable craft, and that’s the basis for my legislation," we can’t touch it?
MR. YELLIN: If Congress made a finding of that sort?
JUDGE FLETCHER: That’s my question.
MR. YELLIN: Your Honor, I think if Congress made a finding of that sort, I think, Your Honor, it would not be appropriate for this Court to second guess that.
JUDGE FLETCHER: Okay, in other words, "conceivable" is "any piece of nonsense is enough."
Gideon Kanner, "Unequal Justice Under Law": The Invidiously Disparate Treatment of American Property Owners in Takings Cases, 40 Loyola L.A. L. Rev. 1065, 1080-81 & n.68 (2009).
Oh yeah, the government won that case.
The Harmon case seems like a good vehicle by which to drive home the concept that the courts need not wear blinders in property cases any more than they do in cases involving other fundamental rights, and the RSA's amicus brief makes the point well; but given the state of the law, we're not holding out for a change of heart by the cert pool clerk.
Here are the other two amicus briefs in the case:
We'll post the BIO when it is available.
Brief Amici Curiae Rent Stabilization Assn of New York & Small Property Owners of New York in Support of Pe...
