Petition for Writ of Certiorari — Georgia v. Carr

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preme Court, U.S.

FILED

| MAR 10 1993

OFFICE OF THE CLERK

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1992

ALEX STEINBERGH AND R. STANLEY BOWDEN,

TRUSTEES OF 16 CHAUNCY TRUST

Petitioners,

CITY OF CAMBRIDGE AND THE RENT

CONTROL BOARD OF CAMBRIDGE,

Respondents,

Petition for a Writ of Certiorari to

the Supreme Judicial Court of Massachusetts

PATRICIA RANDALL FREDERICK B. Hayes, Ill

Hamilton, Dahmen & Randall Hayes, Clark, Hunt & Embry

73 Tremont Street 43 Thorndike Street

Boston, Massachusetts 02108 Cambridge, Massachusetts 02141

(617) 523-3716 (617) 494-4800

Counsel of Record

No.

IN THE

SUPREME COURT OF THE UNITED STATES.

October Term, 1992

ALEX STEINBERGH AND R. STANLEY BOWDEN,

TRUSTEES OF 16 CHAUNCY TRUST

Petitioners,

CITY OF CAMBRIDGE AND

RENT CONTROL BOARD OF CAMBRIDGE

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE SUPREME JUDICIAL COURT OF MASSACHUSETTS

Alex Steinbergh and R. Stanley

Bowden, Trustees of 16 Chauncy Trust,

petition for a Writ of Certiorari to review

the judgment of the Supreme Judicial Court

of Massachusetts.

QUESTION PRESENTED

1. Whether an unconstitutional regulatory

taking of property occurs under the Fifth

and Fourteenth Amendments to the United

States Constitution and the standards

established by this Court in Nollan v.

California Coastal Commission, when an

owner is not compensated for’ losses

sustained as a result of the application to

his property of a provision of a municipal

rent control ordinance later invalidated by

the Massachusetts Supreme Judicial Court as

"not necessary" to the administration of

rent control Cambridge, Massachusetts.

LIST OF PARTIES

The caption of the case contains the

names of all parties to the proceeding in

the Massachusetts Supreme Judicial Court

whose judgment is sought to be reviewed.

TABLE OF CONTENTS

QUESTION PRESENTED ii

LIST OF PARTIES iii

TABLE OF AUTHORITIES Vv

OPINION BELOW 2

JURISDICTION 2

iii

CONSTITUTIONAL, STATUTORY AND ORDINANCE

PROVISIONS INVOLVED 3

Fifth Amendment 3

Fourteenth Amendment 3

Cambridge Rent Control Act 4

Cambridge Ordinance 5

Cambridge Ordinance, Subsectionc 1/2 8

STATEMENT OF THE CASE 9

PROCEDURAL HISTORY 11

REASONS FOR GRANTING THE WRIT 21

CONCLUSION 59

TABLE OF AUTHORITIES

CASES

Adolph v. Federal Emergency Management

Agency, 854 F.2d 732 (5th Cir.

1988) 52

Agins v. City of Tiburon, 447 U.S.

255 (1980)

30, 31, 34

Builders Service Corp. v. Planning and

Zoning Commission of the Town of

East Hampton, 208 Conn. 267;

545 A. 2d 530 (Conn. 1988) 54

Commercial Builders of Northern California

v. Sacramento, 941 F.2d 872,

(9th Cir. 1991), cert. denied,

U.S. ; 112 S.Ct 1997

(1992). 51, 52

Department of Natural Resources v.

Indiana Coal Council, Inc.

542 N.E.2d 1000 (Ind. 1989) 55

Esposito v. South Carolina Coastal Council,

939 F. 2d 165 (4th Cir.

1991) cert. denied, U.S.

; 2a2 8.0e. J0ar

(1992) 38, 39

First English Evangelical Lutheran Church

of Glendale v. County of Los Angeles,

482 U.S. 304 (1987) 23

Flynn v. Cambridge, 383 Mass. 152; 418 N.E.

2d 335 (1981) 24, 25

Fresh Pond Shopping Center, Inc. v.

Callahan, 464 U.S. 875,

appeal dismissed, (1983) 45-46

Grand Forks - Traill Water Users, Inc. v.

Hjielle, 413 N.W.2d 344 (N.D. 1987)

appeal dismissed, 484 U.S. 1053

(1988) 56, 57

J.E.D. Associates, Inc. v. Atkinson,

121 N.H. 581; 432 A2d 12

(1981) 33

Kaiser Aetna v. United States,

444 U.S. 164 (1979) 44-45, 46

Loretto v. Teleprompter Manhattan CATV

Corp. 458 U.S. 419 (.982)

44, 45, 46, 53

McKay Creek Valley Assoc. v. Washington

County, 114 Or. App. 95; 834 P.2d

482 (Or. App. 1992) 57-58

Naegele Outdoor Advertising, Inc. v. City

of Durham, 844 F.2d 172 (4th Cir.

1988) 52

Nectow v. Cambridge, 277 U.S. 502

(1928) 30

Nollan v. California Coastal Commission,

483 U.S. 825 (1987)

41, 30, 33, 33, 33, 30, 48, 46, 99, $3

Penn Central Trans. Co. v. City of New

York, 438 U.S. 104 (1978) 30

Pennell v. City of San Jose, 485 U.S. 1

(1988) 42-43

Reahard v. Lee County, 968 F.2d 1131

(11th. Cir. 1992) 53-54

River Birch Associates v. City of Raleigh,

326 N.C. 100; 388 S.E.2da 538

(N.C. 1990) 56

Saunders v_City of Jackson, 511 So. 2nd

902 (Miss. 1987) 55, 56

Seawall Associates v. City of New York,

74 N.Y. 2d. 92; 544 N.Y.S. 2d 542;

542 N.E.2d 1059 (1989),cert. denied,

493 U.S. 976 (1989) 47

St. Bartholomew’s Church v. City of

New York, 914 F.2d 348 (2d

Cir. 1990), cert. denied,

U.S. ,5 an.8 8B. Wes 2208

(1991) 52

vii

. v. City of Cambridge,

et al., 413 Mass. 736; 604 N.E. 2d

1269 (1992)

10, 14, 16, 20, 21, 22, 23, 36, 37,

38, 40-41, 44, 51-52, 58

Steinbergh, et al. v. Rent Control Board of

j 406 Mass. 147;

546 N.E. 2d 169 (1989)

10, 16, 17, 23, 25, 26, 27, 28, 29,

34, 35, 43

United States v. General Motors Corp.

323 U.S. 373 (1945) 46

Yee v. City of Escondito, U.S. ;

112 S.Ct. 1522 (1992) 42, 45, 47

CONSTITUTION

U.S. Constitution, Amendment 5 3, 18

U.S. Constitution, Amendment 14 3-4

STATUTES

28 U.S.C. § 1257(a) 2

42 U.S.C. § 1983 28, a2

Massachusetts General Laws, Chapter 79 18

viil

No.

IN THE

SUPREME COURT OF THE UNITED STATES.

October Term, 1992

ALEX STEINBERGH AND R. STANLEY BOWDEN,

TRUSTEES OF 16 CHAUNCY TRUST

Petitioners,

Vv.

CITY OF CAMBRIDGE AND

RENT CONTROL BOARD OF CAMBRIDGE

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE SUPREME JUDICIAL COURT OF MASSACHUSETTS

Alex Steinbergh and R. Stanley

Bowden, Trustees of 16 Chauncy Trust,

petition for a Writ of Certiorari to review

the judgment of the Supreme Judicial Court

of Massachusetts.

OPINION BELOW

The opinion of the Supreme Judicial

Court of Massachusetts is reported at 413

Mass. 736; 604 N.E.2d 1269 (1992). A copy

of the opinion appears as Appendix A.

JURISDICTION

The opinion and order of the Supreme

Judicial Court of Massachusetts were

entered on December 10, 1992. (Appendix A)

The jurisdiction of this Court is invoked

under 28 U.S.C. 1257(a), because a title,

right, privilege or immunity was claimed

under the Constitution of the United States

by the plaintiffs below, which claim was

denied by the Supreme Judicial Court of

Massachusetts.

The petitioners claim that the

decisions of this Court are contrary to

that result and that the Supreme Judicial

Court of Massachusetts should be so

instructed.

CONSTITUTIONAL, STATUTORY AND ORDINANCE

PROVISIONS INVOLVED

The Fifth Amendment to the United

States Constitution provides in relevant

part:

No person shall... be deprived

of...property, without due process of

law; nor shall private property be

taken... for public use, without just

compensation.

The Fourteenth Amendment to the United

States Constitution provides in

relevant part:

Section 1. All persons born or

naturalized in the United States, and

subject to the jurisdiction thereof,

are citizens of the United States and

of the State wherein they reside. No

State shall make or enforce any law

which shall abridge the privileges or

immunities of citizens of the United

States; nor shall any State deprive any

person of life, liberty, or property,

without due process of law; nor deny to

any person within its jurisdiction the

equal protection of the laws.

The Cambridge Rent Control Act,

Massachusetts St. c 36 of 1976, provides

for the control of rents and evictions for

certain rental units within the city of

Cambridge, Massachusetts. Its text is set

out, in relevant part, in the Appendix as

Appendix C.

The Cambridge Removal Permit

Ordinance, Ordinance 966, as amended, is

intended tc prevent the "removal" of

"controlled rental units" from the

Cambridge rental market. It provides in

relevant part:

(b) Definitions. As used in this

section:

(1) "Act" means Chapter 36 of the

Acts of 1976, as amended from time to time.

(2) “Board" means the Rent Control

Board established by section 5 of the Act.

(3) “Controlled rental unit" means

any unit included in the definition under

section 3(b) of the Act.

(4) "Removal from the market" as

applied to a controlled rental unit,

includes but is not limited to:

(1) occupy, as an owner of a unit

which is a condominium unit, if the most

recent occupant was a tenant, even if the

prospective owner-occupant is the tenant,

unless the prospective owner-occupant is

the current tenant of the unit who has

continuously occupied it as a tenant since

before August 10, 1979 and intends in good

faith to occupy it indefinitely as its

owner; or

(ii) demolish, but no unit has been

removed from the market by demolition until

its physical destruction has begun; or

(iii) rehabilitate, repair or

improve, other than as required by the laws

of the Commonwealth or the city, in such a

way as to prevent residential occupancy

during the course of the rehabilitation,

repair or improvement. This provision

shall not apply to rehabilitation, financed

at least in part by Community Development

Block Grant funds, of a building owned by a

non-profit corporation and intended for

owner-occupancy by low and moderate income

persons; or

(iv) convert to a cooperative, as the

term is used in section 3(b) (4) of the Act,

all or part of any building which contains

any controlled rental unit; or

(v) cause a unit, not the primary

residence of a legal unit owner, to be

vacant for one hundred twenty (120) days or

more by refusing to rent or to offer for

rent such unit in good faith or, when a

unit is cited as unfit for human

habitation, by failure to perform repairs

required to restore said unit to habitable

condition. The existence of a vacancy for

one hundred twenty (120) days or more,

without a showing of good cause, shall

constitute removal from the market....

No owner or other person shall remove

from the market any controlled rental unit,

unless the Board after a hearing grants a

permit....

Subsection c 1/2 of Cambridge

Ordinance 966, as amended, regulated the

sales of certain rent controlled

condominium units. It provided in relevant

part:

(c 1/2) Prohibited acts by

developers.

After August 1, 1981, no owner of a

building for which a condominium master

deed has been recorded shall directly or

indirectly sell, or offer for sale, or

agree to sell any controlled rental unit

therein, unless the Board has granted a

removal permit for that unit, or unless the

sale or offer is to, or the agreement is

with, a current tenant of the unit who

holds an exemption certificate.... Nothing

in this subsection shall prevent an owner

of a building or any portion thereof from

conveying his entire interest in the

building in good faith to one purchaser,

who shall then be subject to the provisions

of this subsection to the same extent as

the original owner.

STATEMENT OF THE CASE

This Petition seeks review of an

opinion and order of the Supreme Judicial

Court of Massachusetts dated December 10,

1992. In that opinion the court held that

an invalid municipal rent control

ordinance, which prevented the petitioners

from selling their condominium units for

over two years, did not effect an

unconstitutional regulatory taking of that

property despite the court’s prior holding

that the disputed ordinance was invalid as

it was "not necessary" to the advancement

of rent control. Steinbergh et al v. _City

of Cambridge, et al., 413 Mass 736, 747;

604 N.E.2d 1269, 1273 (Mass. 1992)

(Steinbergh II). (Appendix A) Petitioners

contend that the decision is contrary to

the requirement that a governmental land

use regulation must "substantially advance"

a "legitimate state interest", Nollan v.

California Coastal Commission, 483 U.S.

825, 834 (1987), to avoid being an

unconstitutional taking of property.

Petitioners contend that as a matter of

constitutional law, a municipal ordinance

which has been judicially invalidated as

"not mecessary" to a legitimate state

interest cannot be deemed to "substantially

advance" that interest and hence avoid the

constitutional command of compensation for

loss.

PROCEDURAL HISTORY

A. Background.

This case has its genesis in 1976. In

that year the Massachusetts legislature

adopted St. 1976, c.36, the Cambridge Rent

Control Act ("Act"), which allowed the city

of Cambridge to control rents and restrict

evictions for certain residential rental

units within the city. In 1979, citing a

continuing loss of rental housing, the

Cambridge City Council enacted the so-

called "Removal Permit Ordinance"

("Ordinance") which, inter alia, regulates

the conversion of controlled rental units

to condominiums; forbids the

owner-occupancy of any units so converted;

prevents the demolition of these units; and

prohibits owners from withdrawing these

units from the rental market for vacancies

of more than 120 days.' (Appendix C).

The Ordinance has subsequently

been codified as Cambridge City

In 1981, the city amended the

Ordinance by adding subsection ¢c 1/2. The

subsection provided that an owner of

controlled rental units which had been

converted to condominium units in a

building could not seli less than all of

his or her units in the building without

first obtaining a removal permit from the

Rent Control Board ("board"). The

provision was passed despite the existing

Ordinance and Act which, as noted above,

already prevented such units from being

Ordinance Chapter 8.44 et seq.

For purposes of continuity with

the decision in question it will

be referred to herein under its

previous style.

owner-occupied, demolished, kept vacant or

rented for more than the legal maximum

rent. The subsection did not affect the

status of the units under the Act or the

Ordinance in any manner, except to prevent

individual unit sales.

B. Procedural History

1._Steinbergh v. Rent Control Board of

Cambridge ("Steinbergh I"). (Appendix B).

In August, 1986 the petitioners

purchased rieey-thses controlled

condominium units in a building at 16

Chauncy Street, Cambridge. The petitioners

wished to sell separate units to individual

investors, not as a block, and requested

the board’s permission to do so. In the

administrative hearing the owners first

raised their claim that a refusal to allow

individual unit sales would be an

unconstitutional regulatory taking of their

property under the state and federal

constitutions and would violate their

rights to due process and equal protection.

On September 14, 1987 the board denied the

owners’ request.

In accordance with the Act, the

petitioners appealed the board’s decision

to the Massachusetts Superior Court for

Middlesex County. The petitioners argued

that the city lacked the statutory

authority under the Massachusetts Home Rule

Amendment, G.L. Const. Amend. Act. 2

Section 7 (5) as amended by Art. 8, to

enact subsection c 1/2 since it was not

"necessary" for the furtherance of rent

control. The petitioners also renewed their

constitutional claims. Steinbergh II,

supra at 740; 604 N.E.2d at 1273. The

Superior Court, without opinion, affirmed

the board’s decision. The Massachusetts

Supreme Judicial Court, upon application

for Direct Appellate Review, reversed.

Steinbergh v. Rent Control Board of

Cambridge, 406 Mass. 147, 546 N.E. 2d 169

(1989) (Steinbergh I). (Appendix B)

In Steinbergh I the court agreed with

one of the owners’ ntigmanke that the city

lacked the statutory authority to enact

subsection c 1/2, since it was "not

necessary to the achievement of rent

control objectives." Steinbergh I, supra at

151; 546 N.E.2d at 172. The court opined

that the subsection did "absolutely

nothing to change the status of the units

whose sale it regulates", Id. at 152; 546

N.E. 2d at 172 and that its relationship to

rent control was "minimal". Id. The

subsection was declared "invalid". Id. at

155; 546 N.E.2d at 174. Since the matter

was decided on the basis of the city’s

authority, the court found it "unnecessary

to consider the other points argued", Id.

at 148; 546 N.E.2d at 170 including the

owners’ claim that the subsection and the

board’s actions had effected a taking of

their property.

a. Steinbergh v. City of Cambridge

("Steinbergh II"). (Appendix A).

After the decision in Steinbergh I, the

petitioners filed a second complaint in the

Superior Court against both the city of

Cambridge ("the city") and the board. In

the complaint, the owners alleged that the

board had wrongfully prevented them from

selling any of their 53 #£=individual

condominium units as separate units between

the board’s decision in September, 1987

until the decision of the Supreme Judicial

Court on November 20, 1989 in Steinbergh I.

The owners claimed that as a result they

were entitled to compensation from the city

for their substantial monetary losses

caused by the 26 month delay. The owners

sued pursuant to 42 U.S.C. § 1983 and

Massachusetts General Laws Chapter 79

Claiming a temporary regulatory taking of

their property. The owners alleged

violations of the just compensation clause

of the Fifth Amendment to the United States

Constitution, and the Reasonable

Compensation Clause of Article 10, Part 1

of the Massachusetts Declaration of Rights.

The owners also claimed that the b ard’s

action violated their rights to due process

and equal protection under the respective

constitutions and that they were therefore

entitled to damages pursuant to 42 U.S.C. §

1983.

The city and_ board (hereinafter

referred to collectively as "the city")

answered and denied the owners’ right to

damages. After some discovery, the city

moved for Summary Judgment claiming that

there were no genuine issues as to material

facts and that the owners as a matter of

law could not prevail on their

constitutional claims. The city also

claimed that the complaint was procedurally

barred by the doctrine of issue preclusion.

The owners filed an Opposition and

Cross-Motion for Summary Judgment. The

owners Claimed that as a matter of law they

were entitled to a Partial Summary Judgment

Since the action by the city had violated

their constitutional rights. The owners

further contended that they were entitled

to a triai on damages.

The Superior Court denied the city’s

procedural arguments but agreed that as a

matter of law the owners were not entitled

to damages. Summary Judgment was entered

for the defendants. The owners’ cross-

motion was denied. Steinbergh IJ, supra at

739; 604 N.E.2d 1269.

The owners appealed. The city

cross-appealed the denial of their

procedural arguments. The matter was

accepted by the Massachusetts Supreme

Judicial Court upon the petitioners’

Application for Direct Appellate Review.

Id.

Upon review, the court upheld the

decision of the Superior Court. Steinbergh

II, supra at 739; 604 N.E.2d at 1272. The

court held on federal constitutional

grounds that the action of the board did

not require compensation under the Just

Compensation Clause or damages for

violations of due process or equal

protection. Steinbergh II, supra at 795;

604 N.E.2d at 1278.

REASONS FOR GRANTING THE WRIT

THE MASSACHUSETTS SUPREME JUDICIAL COURT

DECISION IS IN DIRECT CONFLICT WITH THE

DECISION OF THIS COURT IN NOLLAN V.

CALIFORNIA COASTAL COMMISSION AS TO THE

APPLICATION OF THE "SUBSTANTIAL

ADVANCEMENT" STANDARD IN JUST COMPENSATION

CASES.

In Steinbergh II, the Massachusetts

Supreme Judicial Court in its decision

opines that tthe Nollan decision does

require a heightened level of scrutiny in

regulatory taking cases, Steinbergh II,

supra at 745; 604 N.E. 2d at 1276. The

court, citing Nollan, formulates the test

as “whether the regulation advanced the

objects of rent control and did so

substantially." Steinbergh II, supra at

746; 604 N.E.2d at 1276. Having stated its

concurrence with the standard however, the

court does little more than analyze the

subsection as being rationally related to

rent control. That this is so requires

little more than a brief review of the

interplay of the Act, the Ordinance,

subsection c 1/2 and a comparison of the

language used in Steinbergh I and

Steinbergh II. °

With few delineated exceptions, all

rental housing in Cambridge which was

constructed before 1969 is subject to the

The court did not reach, but

* appears to assume, that if a

"temporary taking" were found,

the owners would be entitled to

damages under First English

Evangelical Lutheran Church

of Glendale v. County of

Los Angeles, 482 U.S. 304

(1987). Steinbergh II, supra at

742, n.6; 604 N.E.2d at 1274,-

Cambridge Rent Control Act. The Act, which

was purportedly enacted to assure decent,

affordable rental housing, sets limits on

rent increases and evictions. In that

manner the Act seeks to regulate the cost

and availability of such rental housing.

Flynn v. Cambridge, 383 Mass. 152; 418 N.E.

2d 335 (1981).

However, prior to 1979, even under the

Act rental units could be legally "removed"

from the rental housing market by a variety

of means, e.g. demolition, commercial

rental, or combination of units. One

additional way in which units could be

"removed" was by conversion of the building

to the condominium form of ownership and

subsequent occupancy of the units by the

unit purchasers.

As a result, perceiving that this last

manner of “removal" was a _ threat to the

"rent control experiment", Steinbergh I,

supra at 154; 546 N.E.2d at 173, Cambridge,

in 1979, enacted the so-called "Removal

Permit Ordinance". With few exceptions the

Ordinance makes it illegal to owner-occupy

rent controlled condominiums or to withdraw

such units from the rental market for more

than one hundred and twenty (120) days.

Ordinance, § 1(b)(4). See Flynn, supra at

155-156; 418 N.E.2d. at 335. The

prohibition on such owner-occupancy was

purportedly enacted to prevent the

conversion of such units from rental to

owner-occupied housing. Id. at 159; 418

N.E.2a at 337.

Thus the stated purpose of the Act is

to assure the supply of affordable rental

housing by restricting rent increases and

evictions on those units controlled. Act

at § l. In contrast, the Ordinance seeks

to preserve the supply of rental housing

stock by assuring that the number of

controlled rental units may not be reduced,

by any means, including owner-occupancy,

unless with permission of the _ board.

Ordinance at § 1 (b) (4). The board, and

the city, were invested with a "panoply of

powers" to assure that no such units were

lost - including the right to seek

declaratory and injunctive relief as well

as criminal and civil penalties. Ordinance

at § 1(g); Steinbergh I, supra at 154; 546

N.E.2d at 173. In combination, the Act and

the Ordinance make it impossible to evict a

tenant for the purpose of owner-occupancy -

unless the board approves.

Subsection c 1/2, which was enacted in

- nn srl

1981, did “absolutely nothing to change the

status of the controlled units whose sale

it regulates." Steinbergh I, supra at 152;

546 N.E. 2d at 172. Those units remained

under rent control protection. The

subsection did not modify the provision on

illegal owner-occupancy. Such occupancy

remained forbidden under the other sections

of the Ordinance. All subsection c 1/2 did

was to require any owner of more than one

rent controlled, condominium unit in a

building which was subject to the

ordinance, to sell them all, at the same

time, to the same purchaser, unless the

board granted a permit otherwise. The

subsection had no effect whatsoever on the

rent control/ordinanced status of the

units. Ordinance, at subsection c 1/2.

In Steinbergh I, the Massachusetts

Supreme Judicial Court agreed and concluded

that the language and "regulatory mechanism

established in subsection c 1/2 is not

ess to the achievement of rent

control objectives." Id. at 151; 546 N.E.2d

at 172 (emphasis supplied). The court

stated that the subsection created no

change in the status of the units to which

it applied, much less a change deemed

"necessary -to the furtherance of rent

control." Id. at 152; 546 N.E.2d at-172.

The court also rejected the assertion that

subsection c 1/2 was "necessary" as an

enforcement tool:

"It is unreasonable to suggest that

Simply because eieletions might be

continuing to occur despite this

panoply of powerful enforcement

mechanisms, a new remedy, of a drastic

= a

~— a ae

nature, is ‘necessary’ to save the rent

control experiment from failure".

Id. at 154; 546 N.E.2d at 173.

Indeed, precisely because subsection c

1/2 was "not necessary" to rent control, it

was deemed to be an unauthorized and

impermissible municipal action and was held

to be "invalid". Id. at 155; 546 N.E.2d at

174.

In Steinbergh I the court never

reached the takings issue. Id. at 148; 546

N.E.2d at 170. However, when Steinbergh I

is analyzed according to Nollan, there can

be little doubt that subsection c 1/2

effected an uncompensated regulatory

taking.

The axiom that a governmental

regulation may be a taking if it fails to

substantially advance a legitimate state

interest has long been recognized by this

Court. See, e.g. Nectow v. Cambridge 277

U.S. 183, (1928); enn

Transportation Company v. City of New York,

438 U.S. 104, (1978); ins v j fe)

Tiburon, 447 U.S. 255; (1980). The concept

was most thoroughly explored in Nollan v.

California Coastal Commission, supra, where

this Court clearly stated that if a

governmental regulation did not

"substantially advance a legitimate

governmental interest" that failure in

itself was a sufficient basis to find a

taking. Id., at 834. The Nollan decision

was also explicit that the standard against

which "substantial advancement" was to be

measured was much higher’ than~ the

traditional "rational relationship" test

recited in due process and equal protection

cases. Id. at 834, n.3.

In Nollan , this Court held that the

California Coastal Commission’s

conditioning of a building permit upon the

granting of an easement was a violation of

Fifth Amendment rights and failed the

"substantial advancement" standard. Id. at

842. In explanation, this Court first

noted that a "land use regulation does not

en a taking if it "substantially

advance[s] legitimate state interest..."Id.

at 834 citing Agins, supra, at 260. (1980).

The case specified that there must be a

clear connection - a "nexus" - between the

state interest and the challenged

regulation necessary to pass constitutional

scrutiny; in effect the regulatory action

must serve the same purpose which is

alleged to be the "legitimate state

interest." Id. at 837. In addition, Nollan

specified that for there to be sufficient

connection between the regulation and the

state interest to be served, the regulation

must “substantially advance" that interest.

Id. at 834.

This Court warned that the phrase

"substantially advance" is not to be taken

lightly:

"As indicated earlier, our cases

Gescribe the condition for

abridgement of property rights

through the police power as a

‘substantial advanc(ing)’ of a

legitimate State interest. We are

inclined to be particularly careful

about the adjective where the actual

conveyance of property is made a

condition to the lifting of a land

use restriction, since in that context

there is a heightened risk that the

purpose is avoidance of the

compensation requirement, rather than

the stated police power objective."

Id. at 841. (emphasis in original). Nollan

held that if the restriction does not

"Substantially advance" the legitimate

state interest which forms the original

purpose of the restriction "the..««

restriction is not a valid regulation of

land use but ‘an out-and-out plan of

Secercacn...""* i4. at 837, citing J.£.D.

Associates, Inc. v. Atkinson, 121 N.H. 581,

584, 432 A.2d 12, 14-15 (1981). The Court

expressly rejected the proposition that the

restriction need only be "rationally

related" to the state interest to survive

scrutiny. Nollan, supra at 834, n. 3.

In short, if, as in this case, a

regulation is being challenged as an "as

applied" taking of property, constitutional

doctrine, as stated in Agins and Nollan,

requires an examination of the relationship

between the challenged law and the state

interest sought to be advanced. If the law

does not "substantially" advance the state

interest, a taking has occurred even if the

owner has not been denied all use of his

land. Agins, supra at 260.

The court’s analysis in Steinbergh I

precludes approval under the ollan

standards. As noted above, instead of

finding that the subsection substantially

advanced rent control the court held that

the subsection produced "little incremental

enforcement advantage" for detecting

violations. Steinbergh I, supra at 153;

546 N.E.2d 173. To the contrary, the court

did not find that the subsection advanced

cone: control at all. Rather, the court

found that the subsection did "absolutely

nothing to change the rent control status

of the units whose sale it regulates." Id.

at 152; 546 N.E.2d 172. The subsection

"merely sets up another regulatory obstacle

which owners must overcome before they

legally may alienate their property." Id.

at 152; 546 N.E.2d 172.

The best that could be said for the

subsection was that it might ease the

enforcement of existing laws. But that

ease of enforcement was found by the court

to be unnecessary given the existing

enforcement powers contained in the

Ordinance. Id. at 154; 546 N.E.2d 169.

Under the Nollan analysis, the only

legitimate conclusion is that subsection c

1/2 did not substantially advance rent

control and resulted in a_e regulatory

taking.

Nevertheless, the Massachusetts Supreme

Judicial Court, in Steinbergh II, reached a

contrary result. In Steinbergh II the

"unnecessary" subsection was transformed

into a municipal enactment which

"substantially advanced the purpose of rent

control." Id. at 746; 604 N.E. 2d at 1276.

The analysis used by the court to reach

that conclusion reveals much about how the

court - despite its language to the

contrary - has failed to carry out the

Nollan admonition.

First, the court notes that the city

council in 1981 had information that some

owners of rent-controlled units were

unlawfully occupying them, and second, that

the task of monitoring new sales was

"intrusive" "impossible" and "financially

burdensome". Steinbergh II, supra at 746.;

604 N.E.2d. at 1277. Next, the court

opines that the city council could have

concluded that "developer sales are

tantamount to removal from the rental

market." Id. Therefore, by permitting only

group-~ sales "the ordinance provision

eliminated one circumstance (developer

sales) by which people had been owner-

occupying rent-controlljed condominium

units". Id. at 746-747; 604 N.E.2d 1277.

As a result the court states that the

subsection, though not "necessary" under

state law, is sufficient to meet the

heightened constitutional standard. Id. The

reason for approval is clearly stated:

"The elimination ... of conditions

that created a substantial risk of

difficult-to-discover violations of

an aspect of the rent control law

substantially advanced the operation

of the Cambridge rent control law."

Id. at 746-747; 604 N.E.2d 1269.

The court attempts to buttress its

conclusion by citing Esposito v. South

Carolina Coastal Council, 939 F. 2d 165.

(4th Cir. 1991) cert. denied, __ U.S.

, 112 S. Ct. 3027, (1992) and finding

that the ordinance had the "essential

nexus" required by Nollan since’ the

ordinance provision was a "logical and

sufficiently well-founded approach to

dealing" with the problem of unlawful

occupation of rent-controlled condominium

units. Steinbergh II supra at 747, 604

N.E. 2d at 1277 citing Esposito, supra at

169.

This citation and reasoning are

misplaced. It is true that the precise

"fit" needed between a regulation and a

governmental goal has not been delineated

by this Court. Nollan, supra at 834. It

is also true that "a broad range of

governmental purposes and regulations

satisfies these requirements". Id. at

835.

But that analysis, as shown in

Steinbergh II, clearly misses the point.

The "nexus" requirement means that the

regulation must, at least in a rational

way, have some connection with’ the

legitimate state interest to be served.

Nollan, supra at 837. But a rational

connection between the regulation and the

goal is not enough. Once the connection is

established, by whatever test, the

challenged regulation must "substantially

advance" the goal to be served. Though a

rational relation between the subsection

and rent control is arguably present, the

more important and telling inquiry is

whether the regulation substantially

advanced the goal of rent control. More

than a "logical and well founded"

relationship must be shown. However, no

such "substantial advancement" is

demonstrated here and in fact, was not

found in Steinbergh I. Indeed, even the

court in Steinbergh II admits that all that

was produced by the subsection was an

"incremental enforcement advantage of the

regulation" which "was too little to

constitute a necessary provision for

regulating unlawful occupation of rent-

controlled units." Steinbergh II, supra at

747; 604 N.E.2d at 1277.

In effect, after comparing Steinbergh

I and Steinbergh II it is apparent that the

Massachusetts court concluded that the

standard for determining whether an

ordinance is "necessary" to the enforcement

of a statutory scheme is ae stricter

standard than whether an ordinance

"substantially advances" a statutory

scheme. This method of analysis is backward

and directly contrary to the Nollan

decision.

In addition, the language’ used,

clearly demonstrates that in Steinbergh II

the court, despite language to- the

contrary, simply examined the relationship

of subsection c 1/2 to rent control under a

“rationally related" standard. Nowhere

does the opinion demonstrate that rent

control was "substantially advanced" by

restricting bulk sales. In short, an

unnecessary incremental advancement of rent

control cannot be deemed to be a

substantial advancement. The court,

despite its pronouncement, has only found a

rational relationship. The decision fails

the constitutional test.

There is a second, fundamental flaw in

the court’s analysis which is whether the

subsection advanced a legitimate

governmental interest. If the real

governmental interest being served by the

Subsection had been rent control that

interest might have sufficed. Yee v. City

of Escondito, B.8. : 122 8.ct.

1522, 1529 (1992); Pennell v. City of San

Jose, 485 U.S. 1, 12 (1988). However even

the Massachusetts court recognized that the

subsection did "absolutely nothing to

change the rent control status of the units

whose sale it regulates." Steinbergh I,

Supra at 152; 546 N.E.2d at 172. The

relationship between rent control and the

subsection was characterized in that

decision as "minimal". Id. at 155; 546

N.E.2d at 174.

The rea] governmental purpose served

by the subsection was to prevent "the

owners of rent-controlled condominium units

(from) unlawfully occupying them by various

devices." Steinbergh I, supra at 149; 546

N.E.2d at 171. The goal of the subsection

was to eliminate "one circumstance by which

people had been illegally (owner) occupying

rent-controlled condominium units."

Steinbergh II, supra at 746-747; 604

N.E.2d. 1269. The true purpose of

subsection c 1/2 was to preclude owner-

occupancy so that owners would be forced to

rent their apartments as required under

Ordinance section 1(b) (4) (v).

The problem, in a_ constitutional

sense, is that neither precluding owners

from occupying their own property nor

forcing them to rent is a legitimate

governmental interest. It is well

established that governmental regulations

or actions which terminate an owner’s right

to exclude third parties constitute a per

se taking. Loretto v. Teleprompter

Manhattan CATV Corp., 458 U.S. 419; 435-436

(1982). This prohibition extends to

governmental action which eliminates the

right to exclude the general public. Kaiser

Aetna v. United States, 444 U.S. 164

(1979); Nollan, supra at 832. In Yee,

supra, this Court reaffirmed this

conclusion and was explicit that if a rent

control ordinance required an owner to rent

property, the ordinance would amount to a

"compelled physical occupation giving rise

to a right to compensation..." Id. at 1530-

1531. Such a law would amount to a per se

taking requiring compensation even if the

economic impact were "minimal." Loretto,

supra at 434-435.°

Chief Justice Rehnquist has

previously expressed his belief

that the Cambridge Ordinance

"effected a permanent physical

invasion" in violation of the

Fifth and Fourteenth Amendments.

This conclusion is based upon the

clearly established doctrine that property

rights in a physical thing are "the right

to possess, use and dispose of it."

Loretto, supra at 435, citing United

t Vv e -, 323 U.S.

373, 378 (1945). In addition "the right to

exclude [others is} one of the most

essential sticks in the bundle of rights

that are commonly characterized as

property." Nollan, supra at 831; citing

Loretto, supra at 433; quoting Kaiser

Aetna, supra at 176. As this Court

suggested in Yee, a statute that requires

Fresh Pond Shopping Center, Inc.

v. Callahan, 464 U.S. 875, 877,

appeal dismissed, (1983)

" (Rehnquist, J., dissenting).

an owner "to rent his property or to

refrain in perpetuity from terminating a

tenancy" may constitute a physical taking.

Yee, supra, at 1529. See also Seawall

Associates v. City of New York; 74 N.Y. 2d.

92; 544 N.Y.S. 2d 542; 542 N.E. 2a 1059;

cert. denied, 493 U.S. 976 (1989)

(mandatory rental requirement a per se

physical taking).

It has been well established that

government has no right, unless

compensation is paid, to require that

owners either suffer the intrusion of

others upon their property or be precluded

from occupying the property owned. It is

impossible, in light of these well-reasoned

and well-established precedents, to

conclude that subsection c 1/2 did not

effect a taking. The sole purpose of the

subsection was to impermissibly prevent

Owner-occupancy and therefore force owners

to comply with the similarly impermissible

requirement that they suffer tenancies they

do not want. There can be no "legitimate

governmental purpose" in requiring owners

to surrender long-protected property rights

without compensation.

Thus, subsection c 1/2 failed the

Nollan constitutional formula in two ways.

First, the subsection failed to

substantially advance the Act’s’ stated

governmental interest - the control of

rents and evictions. Second, the

governmental interests it purported to

serve - the mandatory exclusion of owners

from their property and the mandatory

rental of those properties - are not

"legitimate" unless compensation is paid.

The Massachusetts court, with its

conclusions to the contrary, is in error.

THE MASSACHUSETTS DECISION IS_ IN

DIRECT CONFLICT WITH THE DECISIONS OF

SEVERAL UNITED STATES COURTS OF APPEALS AND

SEVERAL STATE COURTS OF LAST RESORT

REGARDING THE LEVEL OF JUDICIAL SCRUTINY TO

BE APPLIED IN REGULATORY TAKINGS CASES.

Supreme Court Rule 10(.1) provides in

part as follows:

A petition for a writ of certiorari

will be granted only when there are

special and important reasons

therefor.

Rule 10(.1)(b) contains the following

example of a type of "special and

important" reason which will be considered:

When a state court of last resort has

decided a federal question in a way

that conflicts with the decision of

another state court of last resort or

of a United States court of appeals.

The petitioners contend that a

regulation affecting rights in real

property must meet the criteria set out in

Nollan to avoid being an uncompensated

taking of property. Therefore, any such

regulation must "substantially advance a

legitimate state interest" to avoid the

compensation requirement. Nollan, supra

at 834. Furthermore, petitioners read

Nollan as requiring a higher level of

nove iy from that utilized in due process

or equal protection cases to determine if

the constitutional command has been met.

Though petitioners dispute whether the

Nollan test was properly used by the

Massachusetts Supreme Judicial Court in

Steinbergh II (see Argument, supra), the

court did opine that the "substantial

advancement" test was appropriate in this

case, where it was claimed that a

regulation resulted in a non-physical

"taking". Steinbergh II, supra at 746;

604 N.E.2d at 1276. The position is at

odds with many federal and state courts.

This conflict is pointed out in

Steinbergh II itself where a citation to

Commercial Builders of Northern California

v._ Sacramento, 941 F.2d 872, (9th Cir.

neeae, Gere. GCenied, vU.s._., i112

S. Ct. 1997 (1992) notes that the Ninth

Circuit has rejected the argument that

Nollan materially changed the level of

scrutiny to be applied to non-physical

takings cases. Steinbergh II, supra at

745, n. 8, 604 N.E.2d at 1276.

Commercial Builders, in turn, notes

that three other circuits appear to have

rejected the proposition that Nollan

changed the level of scrutiny in non-

physical takings cases. St. Bart fe) ‘s

Church v. City cf New York,, 914 F.2d 348,

357 n. 6 (2d Cir. 1990), cert denied, sub

nom., Committee to Oppose Sale of St.

Bartholomew’s Church v_ Rector, U.S.

; aah’ BS. 0G... 2403,. .63991).5 Ado Wi.

Federal Emergency Management Agency, 854

F.2d 732, 737 (5th Cir.1988); Naegele

Outdoor Advertising, inn. wv, ity oF

Durham, 844 F.2d 172, 178 (4th Cir.1988).

Commercial Builders suggests that the

Nollan standard applies only to physical

takings cases. This is particularly

erroneous since this Court has repeatedly

held that in cases of permanent physical

occupation neither public benefit nor

minimal economic impact obviates’ the

compensation requirement. Nollan, supra at

831-832; Loretto supra at 434-435. In any

event, a conflict between the Massachusetts

view and these four circuits now exists.

At least one other circuit would also

appear to be in conflict. In Reahard v.

Lee County, 968 F.2d 1131 (11th Cir. 1992),

the court denied that the Nollan

substantial advancement test is ever used

in “just compensation" cases. In Reahard,

the court held that any "claim for ‘just

compensation’... necessarily involves a

regulation that substantially advances a

legitimate government interest..." and

that such claims "admit and assume that the

subject regulation substantially advances a

legitimate government interest." Id. at

1136. Therefore, according to the Reahard

court, the "only issue in just compensation

claims" is whether an owner has been denied

all use of his property. ld. This holding

is at wide variance both with Massachusetts

and the other circuits as well as with the

pronouncements of this Court.

The Steinbergh II decision is also in

conflict with numerous state courts.

The Connecticut Supreme Court in

Builders Service Corp. v. Planning and

Zoning Commission of the Town of East

Hampton, 205 Conn. 267; 545 A. 2d 530

(Conn. 1988), held that Nollan does not

apply in zoning cases. The court then .-

applied a rational basis standard in

determining a challenge to a minimum foot-

area ratio ordinance.

The Indiana Supreme Court in

Department of Natural Resources v. Indiana

Coal Council, Inc., 542 N.E. 2d 1000 (Ind.

1989), when analyzing the effect of the

state’s restrictions on mining in an

archaeologically sensitive area, noted that

the Nollan case had not mandated a change

in the level of scrutiny for regulatory

takings claims or, at most, only required

enhanced scrutiny when a governmentally

mandated conveyance was involved.

Mississippi has also rejected the

"substantial advancement" test. In

Saunders v. City of Jackson, 511 So. 2nd

902 (Miss. 1987), the Mississippi Supreme

Court, reviewing a zoning denial case,

opined that the Nollan decision did not

require an analysis of a city’s actions

beyond the question of whether the actions

were “arbitrary, capricious or

unreasonable or whether...(they were)

fairly debatable." Saunders at 907, n. 3.

North Carolina has also failed to

follow Nollan in a case concerning land

development. In River Birch Associates v.

City of Raleigh, 326 N.C. 100; 388 S.E.2d

538 (N.C., 1990), a case concerning an

ordinance provision that an owner convey

certain common areas to a homeowners

association, the court, citing Nollan and

North Carolina law, found no taking where

the ordinance had a "rational relation" to

the stated open space goal and was

"reasonably related" to that goal. Id. at

121; 388 S.E.2d. at 550.

North Dakota also appears to have

misinterpreted Nollan. In Grand Forks -

Traill Water Users, Inc. v. Hjelle, 413

N.W.2d 344 (N.D. 1987), appeal dismissed,

484 U.S. 1053 (1988), the court opined that

Nollan was not applicable to ae case

involving a state highway setback law. In

its reasoning the court found the Nollan

analysis unhelpful since the case at bar

was not a "permanent physical occupation"

case. Grand Forks, supra at 347-348.

Finally, in Oregon, in McKay Creek

Valley Assoc. v. Washington County, 114 Or.

App. 95; 834 P.2d 482 (Or. App. 1992), the

court rejected a takings claim when the

building of a farm dwelling was conditioned

on a provision that the parcel be " planted

in perennials capable of producing upon

harvest, an average of at least $10,000 in

gross annual income." Id. at 97; 834 P.2d

at 483. The court rejected a takings claim

under Nollan and held that the proper Fifth

Amendment test was whether the “exaction"

bears a reasonable relationship to the

impacts and public needs that are created

by the activities regulated. Id. at 100;

834 P.2d at 485.

The Massachusetts formula is in sharp

contrast to that used by the noted federal

courts and many of the states as noted

above. In this case, which did not

directly involve a physical taking, the

court formulates the test as "whether the

regulation advanced the object of rent

control and did so substantially"

Steinbergh II, supra at 746; 604 N.E.2d at

746. The court appears to reject but

actually applies the erroneous conclusion

found in Commercial Builders et al that in

a non-physical taking case ae higher

standard of scrutiny is not required. The

Massachusetts decision, taken at its word,

is in direct conflict with the methodology

used by the lower federal courts) and

numerous other states. This conflict can

only be resolved by this Court.

CONCLUSION

For the above stated reasons the

Petition for a Writ of Certiorari should be

granted.

Respectfully submitted,

“7 =

A 4 SO Me A

‘Patricia Randall —

Hamilton, Dahmen & Randall

73 Tremont Street

Boston, MA 02108

(617) 523-3716

Counsel of Record

_ — Ly 2 7 _

' Z

ff =z Ae

Frederick B. Hayes, III

HAYES, CLARK, HUNT & EMBRY

43 Thorndike Street

Cambridge, MA 02141

(617) 494-4800

APPENDIX A

Alex Steinbergh & another’, trustee’, vs.

CITY OF CAMBRIDGE & another.?

Middlesex. September 15, 1992 - December

10, 1992.

Present: Liacos, C.J., Wilkins, O’Connor &

Greaney, J.J.

Due Process of Law, Taking of property,

Rent Control.

Constitutional Law, Taking of property,

Equal protection of laws, Rent Control.

Municipal Corporations, Rent control.

Real Property, Condominium. Judgment,

Preclusive effect. Regulation.

Rent Control, Damages.

Civil action commenced in the Superior

Court Department on February 9, 1990.

The case was heard by Wendie I.

Gershengorn, J., on motions for summary

judgment.

The Supreme Judicial Court granted a

R. Stanley Bowden.

Of 16 Chauncy Trust.

Rent Control Board of Cambridge.

We shall refer to the defendants

collectively as the "city."

request for direct appellate review.

Frederick B. Hayes, III, for the

plaintiffs.

Thomas J. Urbelis (Devra G. Bailin

with him) for the defendants.

WILKINS, J. In Steinbergh v. Rent

Control Bd. of Cambridge, 406 Mass. 147

(1989) (Steinbergh I), this court held that

the city of Cambridge lacked authority to

adopt a particular ordinance provision

intended to discourage the unlawful removal

of rent-controlled housing units from the

rental market. That provision, a

subsection of the city’s ordinance

concerning the removal of rent-controlled

properties form the market, purported to

restrict the sale of individual condominium

units by a property owner owning more than

one condominium unit in a building. The

ordinance provision denied such an owner

the right to sell individual condominium

units unless the rent control board of

Cambridge (board) granted a removal permit

or the tenant had an exemption certificate.

See id. at 148 n.4, for the specific

provision.

In this action, commenced on February

9, 1990, the same plaintiff property owners

who were involved in Steinbergh I seek an

award of damages against the city on the

theory that the city’s unlawful restriction

on their right to sell individual

condominium units was unconstitutional and

deprived them, to their financial

detriment, of the right to sell individual

condominium units from September 14, 1987

(the date the board denied the plaintiffs’

application for removal permits) until

November 20, 1989 (the date this court’s

opinion in Steinbergh I was released

invalidating the challenged portion of the

ordinance).

The plaintiffs’ principal contention

is that the city’s application to their

property of the challenged ordinance

provision constituted an uncompensated,

temporary regulatory taking of property in

violation of art. 10 of the Massachusetts

Declaration of Rights and the Fifth

Amendment to the Constitution of the United

States, applicable to the States through

the Fourteenth Amendment. Chicago, B. & Q.

R.R. v. Chicago, 166 U.S. 226, 241 (1897).

The plaintiffs further claim a denial of

due process of law under the State and

Federal Constitutions and a denial of equal

protection of the laws under the

Constitution of the United States.

Our discussion of these issues will

focus on the claimed violations of the

Constitution of the United States. The

plaintiffs do not argue that, acting under

the Constitution of the Commonwealth, this

court should apply any principle different

from that established by the United States

Supreme Court. In considering whether

economic regulations satisfy due process,

we have established no- substantially

Gdifferent guiding standards under’ the

Commonwealth’s Constitution than the

Supreme Court has established under the

Constitution of the United States. See

Opinion of the Justices, 408 Mass. 1215,

1217-1218 (1990); Blue Hills Cemetery, Inc.

Vv. oa egi n

Funeral Directing, 379 Mass. 368, 373 n.8

(1979). Although a similarity in standards

under the "takings" clauses of the two

Constitutions has not been as clearly

established, the plaintiffs have advanced

no reason why we should create takings

principles more favorable to them than

those developed under the Federal

Constitution.

The case was heard below on cross

motions for summary judgment.‘ The city

contended that the judgment entered in

Steinbergh I barred the plaintiffs’ claims

The plaintiffs sought judgment in

their favor on the issue of

liability only.

oe |

for damages and that, in any event, as a

matter of law there had been no

uncompensated taking or other

constitutional violation. There appears to

be no dispute of material fact. The motion

judge cojackes the city’s argument that the

plaintiffs were barred by the earlier

judgment from presenting their

constitutionally-based claim for damages

but agreed with the city that its conduct

did not amount to a taking or to a denial

of due process of law or equal protection

of the laws. We allowed the plaintiffs’

application for direct appellate review of

the judgment entered in the city’s favor.

We affirm the judgment.

The city’s rent control regulations

are authorized by St. 1976, c. 36. The

provision in the city’s regulations whose

effect is in controversy here was adopted

on June 29, 1981. The plaintiffs purchased

the fifty-three condominium unit property

at 16 Chauncy Street on August 1, 1986. On

September 14, 1987, the board ruled that

the challenged regulation barred the

plaintiffs from selling individual

condominium units without permission from

the board. During the period from

September, 1987, to November, 1989, the

plaintiffs received net income from the

property of approximately $120,000. After

Steinbergh I was decided in November, 1989,

the plaintiffs sold thirty-six units to

individual buyers and on December 31, 1989,

they still owned seventeen units. The

plaintiffs assert that the market value of

their condominium units declined between

September, 1987, and November, 1989, and

seek recovery from the city for their

losses, which they allege to be

approximately $374,000.

# The judge was correct in

concluding that this action was. not

foreclosed by the judgment entered in

Steinbergh I. The plaintiffs’ claim for

damages for a temporary regulatory taking

is precluded only if their damage claim was

or should have been adjudicated in

Steinbergh I. Heacock v. Heacock, 402

Mass. 21, 23 (1988).

The damages claim was not adjudicated

in Steinbergh I. The plaintiffs’ amended

complaint in Steinbergh I, which was an

action for judicial review of the board’s

determination, pursuant to St. 1976 c. 36 §

10, did not seek damages for a temporary

taking of their property or for any other

constitutional violation. That is hardly

surprising in an appeal from the decision

of an agency that had no authority to award

damages. The amended complaint alleged

that, in ruling that the regulation applied

to the plaintiffs, the board acted in

excess of its statutory authority and, in

various other ways, in violation of law

(including in violation of the State and

Federal Constitutions). By that complaint,

the plaintiffs sought a ruling that they

were exempt from the challenged ordinance

provision, but they made no allegation or

prayer concerning an award of damages

because of a taking of property or other

constitutional violation. Indeed, a

precise determination of damages prior toa

final ruling that the regulation was

invalid and that a damage award was

appropriate would not have been possible.

The plaintiffs were not obliged, at

their peril, to include in Steinbergh I a

Claim for damages based on constitutional

violations. Steinbergh I was an appeal

governed by G.L.c. 30A and based on the

agency record. This court expressly did

not reach the plaintiffs’ constitutional

challenges to the regulation, after

concluding that the regulation was beyond

the rent board’s authority. Steinbergh I,

Supra at 148. The plaintiffs were not

reasonably able to seek damages until the

basis for their takings claim was

established. Only after the regulation was

ruled unlawful could the plaintiffs

determine precisely whether the delay had

caused them any harm. A regulatory takings

Claim often is not mature until the

validity of the challenged local regulation

has been determined. See Corn v.

Lauderdale Lakes, 904 F.2d 585, 587 (11th

Cir. 1990). Claim preclusion principles do

not reach such a contingent claim so as to

reguire that it be asserted in the first

action, if it is to be asserted at all.

2. The city did not make a taking of

property for which the plaintiffs are

entitled to compensation under the takings

clauses of the State and Federal

Constitutions. The general concept that a

government regulation that “goes too far"

is a taking was expressed seventy years

ago. See Pennsylvania Coal Co v. Mahon,

260 U.S. 393, 415 (1922). The problem over

the years has been to define how far "too

far" is. When the claim is that government

conduct, not amounting to a _ permanent

physical occupation or confiscation of

property, involves a regulatory taking, the

analysis is peculiarly fact dependent,

involving "essentially ad hoc, factual

inquiries." Penn Cent. Transp. Co. v. New

York City, 438 U.S. 104, 124 (1978). See

Yankee Atomic Elec. Co. v. Secretary of the

Commonw h, 403 Mass. 203, 209 (1988).

The alleged taring does not fall

within either of the two categories of

governmental regulatory action that

constitute compensable takings without

regard to other considerations, such as the

public interest sought to-be advanced. See

Lucas v. th oli s a

112 S. Ct. 2886, 2893 (1992). First, the

challenged regulation did not authorize,

direct, or otherwise involve a physical

intrusion into the plaintiffs’ property.

See Nollan v. California Coastal Commission

483 U.S. 825, 831 (1987); Loretto v.

Teleprompter Manhattan CATV Corp., 458 U.S.

419, 432-433 n. 9 (1982); Fragopoulos v.

ent Control Bd. of Cambridge, 408 Mass.

302, 309 (1990). Second, the challenged

regulation did not deny all economically

beneficial or productive use of the

plaintiffs’ interest in the property. See

Lucas v. South Carolina Coastal Council,

supra at 2893-2895; Agins v. Tiburon, 447

heen.

U.S. 255, 260 (1980). The plaintiffs

collected rents while they pursued their

challenge to the regulation; they received

a return on their investment during that

time; and they could seek rent adjustments

in order to obtain "a fair net operating

income for such units" (St. 1976, c. 36, §

7 {a]). This is not, therefore, a case in

which a local regulation denied all use of

the affected property while the lawfulness

of a regulation was being challenged. See

First English Evangelical Lutheran Church

of Glendale v. County of Los Angeles, 482

U.S. 304, 321 (1987) (landowner who

successfully challenges, as a temporary

taking, land use regulation that denies all

use of its property may recover damages

incurred while challenge is pending.) °

If the governmental regulation neither

results in a physical invasion of the

property nor deprives a landowner of all

economically beneficial use of land, there

may nevertheless be a regulatory taking

based, in part, on the regulation’s

economic impact on the property as a whole

and the extent to which the regailation has

interfered with a property owner’s distinct

The opinion of the Court of Appeals

of New York in Seawall Assoc.

v. City of N.Y., 74 N.Y¥.2d 92,

cert, denied, 493 U.S. 976 (1989),

on which the plaintiffs rely,

provides no guidance on the proper

disposition of this case. For

example, there the cumulative

effect of the local regulations

amounted to a denial of

economically viable use of the

regulated property. Id. at 108-110.

investment-based expectations.° See Penn

We shall assume that this principle

applies to an alleged temporary

regulatory taking in the same

manner that it applies to an

alleged permanent regulatory

taking. The United States Supreme

Court’s Fifth Amendment takings

principles concerning permanent

takings are applicable to

regulatory conduct that temporarily

denies a landowner all use of his

property. See First English

Evangelical Lutheran Church of

Glendale v. County o s Angeles,

482 U.S. 304, 318 (1987). That

Court has not explicitly stated,

however, what principles apply when

a temporary regulatory taking does

not deny all economically

beneficial use of property. There

is authority that the two

situations differ for

_ takings purposes. See First

English Evangelical Lutheran Church

of Glendale v. County of

Los Angeles, 210 Cal. App. 3d 1353,

1367 (1989), cert. denied.

493 U.S. 1056 (1990); Shopco Group

v. Springdale, 66 Ohio App. 3d 702,

707-708 (1990). But see Poirier v

Grand Blanc Township, 167 Mich.

App. 770, 772, 777 (1988) (Michigan

; sp. Co. v. New York City, supra

at 124-125, 130-131; Flynn v. Cambridge,

383 Mass. 152, 160 (1981). Cf. Wheeler v.

Pleasant Grove, 664 F.2d 99, 100 (5th Cir.

1981), cert. denied, 456 U.S. 973 (1982)

(ordinance that confiscated landowners’ |

right to construct previously authorized

apartment complex is an unconstitutional

taking). The challenged regulation did not

interfere with the plaintiffs’ investment-

based expectations. They acquired the

property when the regulation was already in

effect. See Fragopoulos v. Rent Control

Board of Cambridge, supra at 308. The

price that they paid for the property

should have reflected whatever adverse

Constitution).

impact the regulation had on the fair

market value of the property. See Flynn v.

Cambridge, supra at 160. Moreover, if, as

seems reasonably inferable, their

investment expectations were based on the

ultimate invalidation of the regulation in

a judicial proceeding, the plaintiffs’

investment expectations had to reflect the

anticipated delay in the litigation

process.’

It should not be assumed that we

would reach a different result if a

challenge were advanced by one who

had acquired an interest in rent-

controlled condominium units before

the adoption of the regulation.

Compare Flynn v. Cambridge, 383

Mass. 152, 160-161 (1981) (local

regulation barring owner of rented

condominium unit from occupying it

does not constitute taking, even as

to one owning and renting unit when

regulation enacted), with Polednak

v. Rent Control Bd. of Cambridge,

In considerable measure, the delay to

which the plaintiffs were subject is the

same kind of delay that commonly occurs in

seeking regulatory approvals or changes in

local ordinances and by-laws, which are

government-imposed processes that have not

traditionally been viewed as constituting

regulatory takings. See First English

Evangelical Lutheran Church of Glendale v.

County of Los Angeles, supra at 321 ("We

397 Mass. 854, 861-862 (1986)

(taking involved if ordinance were

to be applied retroactively to

thwart condominium unit owner’s

primary expectation of continuing

to occupy it after she bought it).

See Penn Cent. Transp. Co. v. New

York City, 438 U.S. 104, 136 (1978)

("the [local regulation] does not

interfere with what must be

regarded as [the landowner’s]

primary expectation concerning the

use of the parcel").

Ae nL.

of course do not deal with the quite

different questions that would arise in the

case of normal delays in obtaining building

permits, changes in zoning ordinances,

variances, and the like which are not

before us"); Bello v. Walker, 840 F.2d

1124, 1126 (3d Cir.), cert. denied, 488

U.S. 851, 868 (1988) ("absent extraordinary

circumstances not presented by this case,

[even lengthy] delays in issuing a building

permit do not result ina ‘’taking’"). Cf.

Wilson v. Commonwealth, 414 Mass. 352, 355

(1992) (unreasonable agency delay in

processing application could peasibiy be

regulatory taking, where delay caused total

destruction of the property). The fact

that the plaintiffs could not’ make

immediate optimum use of their property

(and thus were unable to sell the units at

prices higher than those at which they

could sell them after the regulation was

invalidated) does not constitute a taking.

See Andrus v. Allard, 444 U.S. 51, 66

(1979); Flynn v. Cambridge, supra at 160-

161.

It is, of course, true that in this

case the delay was caused, not by the

necessity of obtaining mandated

governmental approvals, but by the process

of presenting a judicial challenge to a

municipal regulation. That legal challenge

resulted in invalidation of the regulation

as beyond the authority of the city to

adopt, but not because the municipal

regulation was unconstitutional as

violating rights to due process or equal

protection of the laws. Steinbergh I,

Supra at 148. The plaintiffs make no

reasoned argument that, simply because a

municipal regulation is not authorized by

law, there is a compensable temporary

taking of property, even though the

regulation restricts the sale of reduces

the market value of the property until the

regulation is successfully challenged in

court. See _Estate of Himelstein v. Fort

Wayne, 898 F.2d 573, 576-577 n.4 (7th Cir.

1990) (delay attributable to legal

challenge to zoning laws not a taking of

property).

The plaintiffs make an_- entirely

separate takings argument based on the

principle that a taking occurs when a land-

use regulation "does not’ substantially

advance legitimate state interests." Agins

v. Tiburon, 447 U.S. 255, 260 (1980). In

Ollan v. iforni s ‘n, 483

U.S. 825, 834-835 (1987), the Court

observed that "a broad range of

governmental purposes and regulations

satisfies these requirements." The Court

also noted that its "cases have not

elaborated on the standards for determining

what constitutes a ‘legitimate state

interest’ or what type of connection

between the regulation and the state

interest satisfies the requirement that the

former ‘substantially advance’ the latter."

Id. at 834. The plaintiffs do not argue

that the control of rents in Cambridge

through local regulation is not a

‘legitimate state interest. They focus

rather on the requirement that a land-use

regulation must substantially advance a

state interest and argue that the

restriction on the sale of their

condominium units as individual units did

not substantially advance the

administration of the Cambridge Rent

Control law.

The requirement that a regulation

substantially advance the state interest

may express a higher standard at least in

certain circumstances than the rational

basis test commonly applicable in deciding

whether an exercise of the police power

satisfies due process or equal protection

requirements. Id. at 834 n.3.° It may be

that the degree of substantially required

varies depending on the character of the

state’s interest in relation to the

reduction that the local regulation causes

in the value and quality of the affected

property. See id. at 841." L. Tribe,

But see Commercial Builders of

N.Cal.. v. Sacramento, 941 F.2d

872, 874 (9th Cir. 1991), cert.

denied, 112 S. Ct. 1997 (1992)

(rejecting argument that Nollan

materially changes level of

scrutiny; no Circuit Court of

Appeals has interpreted Nollan "as

changing the level of scrutiny to

be applied to regulations that do

not constitute a physical

encroachment on land").

Regarding the phrase "substantial

advanc[{ing]", the Court stated,

"We are inclined to be

particularly careful about the

adjective where the actual

conveyance of property is made a

condition to the lifting of a

ii ca

American Constitutional Law § 9-4, at 599

n.20 (2d ed. 1988). In the case before us,

unlike the Nollan case, the city has not

attempted to acquire an interest in land at

no cost to the public, nor has Cambridge

sought to regulate the plaintiffs’ property

for a reason that has no- connection

land-use restriction, since in

that context there is heightened

risk that the purpose is avoidance

of the compensation requirement,

rather than the stated police

power objective." (Emphasis in

Original.) Nollan v. California

Coastal Comm’n, 483 U.S. 825, 841

(1987). The Nollan case involved

a condition that landowners convey

an easement across their property

in order to obtain a permit to

construct a dwelling. The Court

concluded that the governmental

purpose in requiring the grant of

an easement was not the same as

the governmental purpose in

regulating construction of the

dwelling, and thus there was a

taking. Id. at 836-842.

whatever with the reason for rent control.

Uneer traditional principles, the

burden is on the plaintiffs to demonstrate

that the regulation fails to meet the

constitutional standard (that is,

substantially advance the regulation of

rents in the city). They rely heavily on

language in this court’s opinion in

Steinbergh I. There we were concerned with

whether the regulation was necessary to the

operation of the rent control law, in which

case the city would have had implied

authority to adopt it. Steinbergh I, supra

at 151. The city had express authority to

regulate rents but only such authority to

regulate the removal of units from rent

control as was necessary to regulate rents.

We conciuded that the ordinance provision

barring an owner of a group of condominium

units from selling individual condominium

units separately was not necessary for that

purpose. Thus the city had no implied

authority to adopt it. In the case before

us, the standard is not one of necessity.

The test is rather whether the regulation

advanced the objects of rent control and

did so substantially."®

We conclude that the challenged

ordinance substantially advanced the

purpose of rent control. We may rely on

information available to the city council

The plaintiffs, we think rightly,

do not contend that a local land

use regulation that is ultra vires

cannot, as a matter of law, be

viewed for takings purposes as

substantially advancing a state

interest.

at the time of its enactment of the

regulation."

Here the legislative record,

which includes a May 28, 1981, report to

the city council, indicated that owners of

rent-controlled condominium units’ were

unlawfully occupying them by various

It is not clear that for this

purpose we may properly attribute

to the city council any apparent

reasonable ground for its action,

at least if that action is not

contradicted by facts established

on the summary judgment record.

Cf. Commonwealth v. Henry’s Drywall

Co., 366 Mass. 539, 541 (1974) (all

rational inferences are made in

favor of legislation whose

constitutionality is challenged on

due process and equal protection

grounds). Accord Matter of Tocci,

413 Mass. 542, 549 (1992). We

would be unwilling to attribute to

a yovernment agency a reason for

its action that is inconsistent

with its stated reasons for its

action. See Nollan v. California

Coastal Comm’n, supra at 840.

devices. The task of monitoring the

occupancy of newly-sold units was "an

intrusive and impossible task" and

financially burdensome. The report states

further that evidence supports a

presumption that "developer sales are

tantamount to removal from the rental

market." By permitting the sale of rent-

controlled condominium units on!’ as a

group, except a sale to a current tenant or

when the board grants a removal

certificate, the ordinance provision

eliminated one circumstance by which people

had been illegally occupying rent-

controlled condominium units. The

elimination, through the adoption of an

economically feasible restriction, of

conditions that created a substantial risk

of difficult-to-discover violations of an

aspect of the rent control law

substantially advanced the operation of the

Cambridge rent control law. '? The

After Steinbergh I had been

decided, by St. 1990 c. 52, § 2, in

language substantially identical to

the challenged regulation, the

Legislature enacted a restriction

on the sale of individual units by

an owner of a Cambridge building

with condominium units. In § 1 of

the act, the General Court made

legislative findings to the effect

that (a) it was necessary to

regulate the removal of controlled

rental units from the market, (b)

the city’s existing powers to

regulate such removals had proven

inadequate, (c) since Steinbergh I,

"hundreds of individual condominium

units have been transferred or sold

thereby creating a substantial risk

of the removal of controlled rental

housing units from the rental

market, and "(d) [1i]n order to

regulate such removals effectively,

it is necessary to regulate the

sale of condominium units by the

owners of rent controlled

incremental enforcement advantage of the

regulation was sufficient to satisfy the

constitutional standard. Although in

Steinbergh I that advantage was too little

to constitute a necessary provision for

regulating unlawful occupation of rent-

buildings, for the reasons stated

in the Report of the Cambridge City

Council Committee on Rent Control

dated May 28, 1981.

Although these findings made after

the adoption of the challenged

ordinance provision are not

supportive legislative history, the

do justify a judicial conclusion

that the ordinance substantially

advanced the operation of the

Cambridge rent control law. These

findings also make no longer

correct the dicta in Steinbergh I

that the challenged regulation had

"minimal" logical connection to

preserving Cambridge’s rental

housing stock. See Steinbergh v.

Rent Control Bd. of Cambridge, 406

Mass. 147, 155 (1989)

controlled units, it was nevertheless a

“logical and sufficiently well-founded

approach to dealing" with the problem for

us to find, under the Nollan case, that the

"essential nexus" between "the State’s

interest and its chosen means is present in

this case." Esposito v. Sout arolina

Coastal Council, 939 F.2d 165, 169 (4th

Cir. 1991), cert, denied, ii12 8. Ct. 3027

(1992) (prohibition on building seaward of

setback line not taking when adopted to

ameliorate beachfront erosion).

3. We need not discuss at length the

plaintiffs’ claims that they were denied

due process of law and equal protection of

the laws. In light of our conclusion that

the challenged regulation substantially

advanced the object of rent control in

Cambridge, it is apparent that’ the

regulation satisfied the due _ process

requirement that a law have foundation in

reason and not be an exercise of power not

rationally related to a valid legislative

purpose. See Smithfield Concerned Citizens

for Fair Zoning v. Smithfield, 907 F.2d

239, 243-244 (1st Cir. 1990). See also

Commonwealth v. B.& W. Transp. Inc., 388

Mass. 799, 805, appeal dismissed sub nom.

Burke Distrib. Corp. v. Massachusetts, 464

U.S. 957 (1983); Gilbert v. Cambridge, 932

F.2d 51, 65-66 (lst Cir.), cert. denied,

112 S. Ct. 192 (1991). The facts that the

regulation was ruled to be beyond the

city’s authority to enact and that the

plaintiffs suffered a financial loss

because they could not sell individual

condominium units while their judicial

challenge was in process do not amount to a

denial of substantive due process. There

is no claim that the city acted in bad

faith or with some other improper animus.

The regulation was of general application

and adopted before the plaintiffs purchased

their property.

For reasons already given, there was a

rational basis, for equal protection of the

laws purposes, in limiting the sale of

individual condominium units by a multiple

owner and not doing so as to an owner of

only one condominium unit. The purpose was

not to restrict sales of a _person’s

investment in one or more condominium units

but to reduce the illegal occupation of

rent controlled units by persons purchasing

such units. The two classes of owners were

treated equally because members of each

Class were free to sell their entire

ownership interests.

Judgment affirmed.

APPENDIX B

ALEX STEINBERGH & another’, trustees® vs.

RENT CONTROL BOARD of CAMBRIDGE & others. >

Middlesex. October 4, i989. - November 20,

1989.

Present: Liacos, C.J., Wilkins, Nolan,

Lynch, & Greaney, J.J.

Municipal Corporations, Rent Control. Real

Property, Condominiun. Rent Control,

Removal of unit from market. Cambridge.

The city council of Cambridge exceeded the

authority conferred on it by St. 1976, c.

36, when it adopted an amendment to the

city’s rent control ordinance providing

that no owner of a controlled condominium

unit or units may sell less than his entire

interest in such unit or units without

first obtaining a removal permit from the

rent control board. [149-155]

CIVIL ACTION commenced in the Superior

Court Department on October 9, 1987.

The case was heard by Edward M.

R. Stanley Bowden.

Of Sixteen Chauncy Trust.

The residents of the building at 16

Chauncy Street in Cambridge.

Ginsburg, J. Yhe Supreme Judicial Court

granted a request for direct appellate

review.

Frederick B. Hayes, III for the

plaintiffs.

Patricia A. Cantor (Carol Wagner with

her) for Rent Control Board of

Cambridge.

James M. Shannon, Attorney General,

Robert L. Bowens, Evelynne L. Swagerty

& Harvey D. Cotton, Assistant

Attorneys General, for the

Commonwealth, amicus curiae, submitted

a brief.

Philip S. Lapatin, for Greater Boston

Real Estate Board, amicus curiae,

submitted a brief.

Jeffrey W. Purcell, for Massachusetts

Tenants Organization & another, amici

curiae, submitted a brief.

GREANEY, J. The plaintiffs, trustees

of a fifty-three unit building at 16

Chauncy Street in Cambridge which has been

converted to condominium units, appeal from

a summary judgment of the Superior Court.

That judgment upheld a decision of the rent

control board of Cambridge (board) which

determined that’ sales of individual

condominium units within the building are

subject to subsection c 1/2 of § 1° of

This specific provision is

entitled "Prohibited acts by

developers" and seads as follows:

"After August 1, 1981, no owner of

a building for which a condominium

master deed has been recorded shall

directly or indirectly sell, or

offer for sale,or agree to sell any

controlled rental unit therein,

unless the Board has granted a

removal permit for that unit, or

unless the sale or offer is to, or

the agreement is with, a current

tenant of the unit who holds an

exemption certificate. The Board

shall issue an exemption

certificate to any person who files

with it an affidavit in a form

prescribed by the Board, stating

that he is a current tenant of the

unit, that he occupied it as a

tenant before August 10, 1979, and

that he intends in good faith to

occupy it indefinitely as its

owner. No person shall file a

false affidavit under this

subsection. Nothing in

this subsection shall prevent an

Cambridge Ordinance 966 which regulates the

"Removal of Controlled Rental Units from

Market" (hereafter subsection c 1/2). The

plaintiffs make several arguments’ that

subsection c 1/2 is invalid. We agree with

their contention that subsection c 1/2

exceeds the board’s authority in the rent

control area, and, aS a consequence, is

invalid. This conclusion renders it

unnecessary to consider the other points

argued.

This litigation is the latest in a

long series of disputes surrounding the

owner of a building or any portion

thereof from conveying his entire

interest in the building in good

faith to one purchaser, who shall

then be subject to the provisions

of this subsection to the same

extent as the original owner."

establishment and operation of rent control

ordinances in various communities of the

Commonwealth. See, e.g. Perry v. Boston

Rent Equity Bd., 404 Mass. 780 (1989);

Greater Boston Real Estate Bd., v. Boston,

397 Mass. 870 (1986); Bannerman v. Fall

River, 391 Mass. 328 (1984); Flynn v.

Cambridge, 383 Mass. 152 (1981); Grace v.

Brookline, 379 Mass. 43 (1979). The

instant chapter begins with the enactment

of St. 1976, c. 36 (Rent Control Act), a

special statute which granted Cambridge the

power to continue controlling rents and

evictions.?

Cambridge first enacted rent and

eviction control ordinances based

upon the authority conferred by St.

1970, c. 842. That statute, which

applied to all cities and towns

with populations in excess of

After several years of rent and

eviction controls had apparently proven

insufficient to preserve its stock of

affordable rental housing, Cambridge turned

its attention toward regulating removal of

controlled units from the rental housing

market. In 1979, the city council of

Cambridge (city council) adopted § 1 of c.

23 of the Cambridge City Code, Ordinance

966 (ordinance). Section C of the

ordinance provides that "[n]o owner or

other person shall remove from the market

any controlled rental unit, unless the

50,000, lapsed in 1976, and was not

renewed. The Legislature, reacting

to its perception that "a serious

public emergency exists with

respect to the housing of a

substantial number of

citizens in the City of Cambridge."

then enacted St. 1976, c. 36.

Board after a hearing grants a permit."

"Removal from the market" is defined to

include occupancy of a controlled

condominium unit by its owner, if the last

previous occupant was a tenant. Id. at § b

(4) (1). Thus, the ordinance generally

prevents the legal owner occupancy of

controlled condominium units in Cambridge.

In Flynn v. Cambridge, 383 Mass. 152

(1981), we upheld the ordinance against a

challenge that Cambridge lacked the

authority to adopt it. While we implicitly

found tnat St. 1976, c. 36 did not provide

express authority for removal provisions

such as those set forth in the ordinance,

we held that the grant of express powers in

that statute carried with it a grant of

those implied powers necessary to

effectuate the statutory goals. One such

implied power is the ability to regulate

removal of controlled units from the

rental housing market. Without this

implied authority, we reasoned, "the power

conferred by c. 36 to control rents would

steadily and irreversibly be transformed

into the power to control nothing." Id. at

159. We thus held that the power to

regulate removals from the rental housing

market was conferred by implication in the

Rent Control Act. Id.

Despite the strict removal regulations

imposed by the ordinance, the city council

concluded that the city’s housing stock

still was not adequately protected. In

particular, widespread owner occupancy of

controlled condominium units was said to

— |

exist, in direct violation of the

ordinance. In an attempt to remedy this

perceived problem, the city council amended

the ordinance on June 29, 1981, by addina

subsection c 1/2, the provision at issue in

this case. The amendment provides that no

owner of a controlled condominium unit or

units shall sell anything less than his or

her entire interest in such unit or units

without first obtaining a removal permit

from the board.® Subsection c 1/2 appears

to rest on an assumption that sales of

Subsection c 1/2 also permits sales

of less than an owner’s full

interest if the buyer is a current

tenant who has occupied the unit

Since August 10, 1979, and who

holds an exemption certificate.

This exception is not relevant to

the facts in the case and does not

affect our analysis of the appeal.

individual condominium units’ inevitably

result in illegal owner-occupancy of those

units.

The plaintiffs appealed to’ the

superior Court pursuant to St. 1976, c. 36

§ 10 (judicial review provision of Rent

Control Act.) After stipulating that there

were no genuine issues of material fact,

the parties each moved for summary judgment

pursuant to Mass. R.Civ. P. 56, 365 Mass.

824 (1974). The Superior Court judge

granted the board’s motion.

The plaintiffs desire to sell less

than all of their fifty-three units at 16

Chauncy Street to individual investors.

They requested a decision from the board

stating that their property was exempt from

subsection c 1/2. After conducting an

inquiry, a hearing examiner recommended

that the plaintiffs’ request be denied.

The board accepted this recommendation, and

concluded that the plaintiffs’ units could

not be individually sold.

We discern merit in the plaintiffs’

argument that the city council lacked

authority to adopt subsection c 1/2. Like

any other municipality in this

Commonwealth, Cambridge may exercise only

those powers which have been affirmatively

granted to it. See Atherton v. Selectmen

of Bourne, 337 Mass. 250, 255-256 (1958).

See also O.M. Reynolds, Local Government

Law, § 49, at 135-136 (1982). Thus, in

order for subsection c 1/2 of the ordinance

to be upheld as valid, there must be some

positive law source’ authorizing its

adoption.

The board relies primarily on the Rent

Control Act, as providing the authority

necessary to support the adoption of

subsection c 1/2. ’

We previously have

held that the ordinance can be supported

only by implied authority granted in the

Rent Control Act. See Flynn v. Cambridge,

supra. Thus, subsection c 1/2, an

amendment to the ordinance, canbe

supported, if at all, only by implication

from the authority conferred by the Rent

Control Act.

The board does not seem to rely on

the Home Rule Amendment, art. 89 of

the Amendments to the Massachusetts

Constitution, as Cambridge did in

defending the ordinance in the

Flynn decision. Id. at 155.

Consequently, we have no occasion

to address any home rule issues.

The standard we must’ apply in

determining whether authority to adopt

subsection c 1/2 is to be implied from the

Rent Control Act is straightforward: such

power exists only if it is "necessary" to

carry the purpose expressed in the

authorizing statute. See Flynn v.

Cambridge, supra at 158; Greater Boston

Real Estate Bd. v. Boston, 397 Mass. 870,

877 (1986). This standard appears in the

Rent Control Act itself. See St. 1976, c.

36, § 5 (c) ("(tjhe rent control

board...shall recommend to the city, for

adoption, such ordinances as may _. be

necessary to carry out the purposes of this

act*). Thus, subsection c 1/2 can be

upheld as a valid exercise of implied

statutory authority only if restrictions on

piecemeal sales of controlled condominium

units are reasonably necessary to the

preservation of the affordable rental

housing stock in Cambridge.

Turning directly to the question

presented, we have little trouble in

concluding that the regulatory mechanism

established in subsection ¢ 1/2 is not

necessary to the achievement of rent

control objectives. We note initially, and

most importantly, that subsection c 1/2

does absolutely nothing to change the rent

control status of units whose sale it

regulates. The plaintiffs, for example,

own a structure containing fifty-three

controlled condominium units. Those units

are now controlled, and will remain subject

to the exact same controls regardless

whether they are sold off as a block,

individually, or anywhere in between.

Subsection c 1/2 creates no change in legal

status of the units to which it applies,

let alone a change that can be deemed

"necessary" to the furtherance of rent

control objectives. Rather, it merely sets

up another regulatory obstacle which owners

must overcome before they legally may

alienate their property.

The board set forth eight reasons in

support of its contention that subsection c

1/2 is necessary to achieve the objectives

of rent control. Of those eight, we find

only two which possibly could support the

rationale the board seeks: (1) that "[b]y

allowing a court to enjoin illegal sales,

offers, and agreements, [subsection c 1/2]

provides a meaningful civil remedy short of

an order requiring an owner-occupant to

vacate," and (2) that subsection c 1/2

“simplifies and reduces the cost of

enforcement by limiting proof of violation

to the recording of an initial unit deed

after July 1, 1981, without the issuance of

either a removal permit or an exemption

certificate. "® These claims amount to an

The remaining six reasons put forth

by the board - that subsection c

1/2 (1) does not further hurt

condominium owner occupancy; (2)

imposes a reasonable liability on

developers; (3) protects innocent

purchasers against unscrupulous

developers; (4) clears future

titles on resale; (5) prevents

harassment of older and poorer

tenants; and (6) prevents

fragmented ownership of rental

housing - are either at best only

minimally relevant to the goals of

the Rent Control Act or lack

adequate substantiation in the

assertion that the extra layer of

regulation added by subsection c 1/2 is

absolutely necessary to facilitate the

effective enforcement of other provisions

of the ordinance.

We regard this "ease of enforcement"

claim with suspicion, because we deem it an

attempt by the board to extract a second

level of derivative powers from the

language of the Rent Control Act. The

power to regulate removal at all, it will

be recalled, is derivative of the power to

regulate rents and evictions expressly

granted in the Rent Control Act. The board

now would have us hold that they also

record before us. We do not

consider any of them sufficieiit to

sustain subsection c 1/2.

possess additional implied authority to

enforce a power that is itself a creature

of implication. This, we conclude,

impermissibly extends the legislative grant

of power in the Rent Control Act beyond

what its language reasonably will bear.

Furthermore, even if we were persuaded

that enforcement considerations must

furnish some basis for upholding subsection

c 1/2, we are not convinced that the

alleged enforcement advantages are _ so

Significant that they outweigh the interest

of the owner in transferring ownership of

his condominium to an investor. The crux

of the board’s argument is that subsection

c 1/2 enables them to determine in advance

whether a proposed condominium sale is

likely to result in illegal owner

occupancy. To obtain the required removal

permit, a potential buyer would have to

appear before the board and c avince it

that his intention to maintain the unit as

rental property was bona fide. If the

board was not convinced, it simply would

deny the required permit, and monitor the

local registry of deeds to ensure that the

proposed sale was not consummated.

A close analysis of this argument

reveals that subsection c 1/2 actually

produces little incremental enforcement

advantage. First, the investigative forum

provided by the removal permit hearing

already is available under the provisions

of the ordinance. The board is empowered

to conduct hearings, to subpoena witnesses

and documents, and to require any owner or

landlord to furnish under oath ~= any

information or records the board deems

necessary. See ordinance, § 1 (5) (qd).

Subsection c 1/2, for the most part, merely

replicates these preexisting enforcement

mechanisms. Second, the alleged advantage

of having a "new" remedy - the power to

enjoin an illegal condominium sale before

it occurs - is not reasonably "necessary"

to fulfil the aims of the Rent Control Act.

The board already has at its disposal the

power to seek fines of $500 a day, or

imprisonment for up to ninety days, against

both illegal owner-occupiers and persons

who knowingly supply it with false

testimony or documents. See ordinance, §

i2 (¢é}. Furthermore, the board may seek

Civil damages, injunctive, or declaratory

relief against violators of the ordinance.

See ordinance, § 11 (d). It is

unreasonable to suggest that simply because

violations might be continuing to occur

despite this panoply of powerful

entoresnent mechanisms, a new remedy, of a

drastic nature, is "necessary" to save the

rent control experiment from failure. It

appears to us that the more likely solution

lies in more effective utilization of

existing enforcement procedures.

Our conclusion in this case follows

logically from our earlier holding in

Greater Boston Real Estate Bd. v. Boston,

397 Mass. 870 (1986). In the Greater

Boston decision, we invalidated a Boston

ordinance that banned the sale of

controlled rental units to investors who

had not first obtained a removal permit.’

The board attempts to distinguish

the Boston ordinance by noting

that, unlike subsection c 1/2, it

required that removal permits be

granted to any purchaser seeking to

occupy a unit as owner and denied

permits to any investor who planned

to continue renting the unit. This

fact, the board contends, explains

the Greater Boston court’s

inability to find any

logical nexus between the Boston

ordinance and the goals of rent

control.

We acknowledge this factual

distinction between the two

ordinances, but do not consider it

legally relevant. As we noted in

the Greater Boston decision, the

issue presented was "whether the

city has the authority to bar

{sales to investors], including

those that do not involve the

eviction of tenants nor the actual

removal of rental dwelling units

from the market"(emphasis added).

Id. at 874. Like Boston, Cambridge

is attempting to regulate the sales

of rental units, even when such

sales result neither in evictions

nor in removal of units from the

rental housing stock. And while

Like subsection c 1/2, the Boston ordinance

rested on implied rather than express

powers, and thus, to be valid, was required

to be “essential and not merely convenient

to the implementation of express powers

conferred by statute." Id. at 877. In

applying this standard, we concluded that

the ordinance had only "minimal" logical

connection to preserving Boston’s rental

the procedure selected by Cambridge

is a removal permit requirement

rather than an outright ban, the

practical effect of the two is

likely to be virtually

identical. A was noted in the

report of the committee on rent

control to the Cambridge city

council: subsection c 1/2 "would

tend to prevent future developer

sales to such investor, because

they would be unlikely to meet the

current tests for removal of such

apartment from the rent-controlled

market."

housing stock since it prohibited investors

"from obtaining permits necessary for

condominium...transfers even in

circumstances where no tenant is evicted

and no unit is in fact removed from the

rental market." i, ee. S876. This

reasoning applies with equal force to

subsection c 1/2. It follows from what

has been said that Cambridge exceeded the

authority conferred on it by the Rent

Control Act when it adopted subsection c

1/2 of the ordinance.

The judgment is’ vacated. A new

judgment is to be entered setting aside the

decision of the board because subsection c

1/2 has been determined to be invalid, and

adjudging that the plaintiffs’ property at

16 Chauncy Street in Cambridge, while

otherwise subject to the provisions of the

Cambridge rent control and removal

ordinances, is not subject to subsection c

1/2 of the removal ordinance.

So ordered.

APPENDIX C

Chapter 36

THE COMMONWEALTH OF MASSACHUSETTS

In the year One Thousand Nine Hundred

and Seventy-Six.

AN ACT ENABLING THE CITY OF CAMBRIDGE TO

CONTINUE TO CONTROL RENTS AND EVICTIONS.

ENACTED MARCH 31, 1976.

Section 1. Declaration of Emergency.

The general court finds and declares that a

serious public emergency exists with

respect to the housing of a _ substantial

number of citizens in the City of

Cambridge, which emergency has been created

by housing demolition, deterioration of a

substantial portion of the existing housing

stock, insufficient new housing

construction, increased costs of

construction and finance, inflation, influx

of young people and the desirability of

Cambridge as a place to live, and which has

resulted in a substantial and increasing

shortage of decent rental housing

accommodations especially for families of

low and moderate income and for elderly

people on fixed income and abnormally high

rents; that unless residential rents and

eviction of tenants are regulated and

controlled, such emergency and the further

inflationary pressures resulting therefrom

will produce serious threats to the public

health, safety and general welfare of the

citizens of Cambridge and in other adjacent

communities; that such emergency should be

met by the Commonwealth immediately and

with due regard for the right’ and

responsibilities of the City of

Cambridge...

SECTION 3. Definitions. The following

words or phrases as used in this act shall

have the following meanings:

(a) "Rental units", any building,

structure, or part’ thereof, or land

appurtenant thereto, or any other real or

personal property rented or offered for

rent for living or dwelling purposes,

including houses, apartments, rooming or

boardinghouse units, and other properties

used for living or dwelling purposes,

together with all services connected with

the use or occupancy or such property.

(b) "Controlled rental units", all

rental units except:

(1) rental units in hotels, motels,

inns, tourist homes and rooming or boarding

houses which are rented primarily to

transient guests for a period of less than

fourteen consecutive days ;

(2) rental units the construction of

which was completed on or after January

one, nineteen hundred and sixty-nine, or

which are housing units created by

conversion from a non-housing to a housing

use on or after said date;

(3) rental units which a governmental

unit, agency, or authority either:

(i) owns or operates; or

(ii) regulates the rents, other than

units regulated:

(a) under the provisions of this

act, or

(b) under the provisions of any

other general or special law authorizing

municipal control of rental levels for all

or certain rental units within a

municipality; or

(iii) finances or subsidizes, if the

imposition of rent control would result in

the cancellation or withdrawal, by law, of

such financing or subsidy;

(6) the rental unit or units in an

owner-occupied two or cthree-family house;

(7) that the City of Cambridge may

exempt those rental units for which the

rent charges exceed limits specified by

said municipality; provided that in no

event shall more than twenty-five per cent

of the total rental units in Cambridge be

exempted under this subsection.

SECTION 5. Rent Board.

(a) This act shall be administered by a

rent control board...

called the board, shall be responsible for

carrying out the provisions of this act...

shall promulgate such policies, rules and

regulations as will further the provisions

of this act, and shall recommend to the

city, for adoption, such ordinances as may

be necessary to carry out the purposes of

this act.

(e) The board shall have the power to

issue orders and promulgate regulations to

effectuate the purposes of this act.

SECTION 9. Evictions.

(a) No person shall bring any action to

recover possession of a controlled rental

unit unless:

(1) the tenant has failed to pay the

rent to which the landlord is entitled;

(2) the tenant has violated an

obligation or covenant of his tenancy not

inconsistent with Chapter 93A of the

General Laws or this act, or the regulation

issued pursuant thereto, other than the

obligation to surrender possession upon

proper notice and has failed to cure such

violation after having received written

notice thereof from the landlord;

(3) the tenant is committing or

permitting to exist a nuisance in or is

causing substantial damage to, the

controlled rental unit, or is creating a

substantial interference with the comfort,

safety, or enjoyment of the landlord or

other occupants of the same or any adjacent

accommodations;

(4) the tenant is convicted of using

or permitting a controlled rental unit to

be used for any illegal purpose;

(5) the tenant, who had a written

lease or rental agreement which terminated

on or after this act has taken effect has

refused, after written request or demand by

the landlord, to execute ae written

extension or renewal thereof for a further

term of like duration and in such terms

that are not inconsistent with or violative

of any provision of Chapter 93A of the

General Laws or this act, or the

regulations issued pursuant thereto;

(6) the tenant has’ refused the

landlord reasonable access to the unit for

the purpose of making necessary repairs or

improvements required by the laws of the

Commonwealth, or any political subdivision

thereof, or for the purpose of inspection

as permitted or required by the lease or by

laws, or for the purpose of showing the

rental unit to any prospective purchaser or

mortgagee;

(7) the person holding at the end of

a lease term is a subtenant not approved by

the landlord;

(8) the landlord seeks to recover

possession in good faith for use and

occupancy of himself, or his children,

parents, brother, sister, father-in-law,

mother-in-law, son-in-law, or daughter-in-

law; except that no action shall be brought

under this clause to recover possession of

a condominium unit from a tenant who is

sixty years of age or older and who

occupied the unit continuously since before

the recording of the master deed.

(9) the landlorc seeks to recover

possession to demolish or otherwise remove

the unit from housing use; and

(10) the landlord seeks to recover

possession for any other just cause,

provided that his purpose is not in

conflict with the provisions and purpose of

Chapter 93A of the General Laws or this

act, or the regulations issued pursuant

thereto. Recovery of possession in order

to convert an apartment unit to a

condominium unit shall not be a valid

reason to recover possession of a

controlled rental vnit.

(b) A landlord seeing to recover

possession of a controlled rental unit

shall apply to the board for a certificate

of eviction...

possession of a controlled rental unit

without obtaining such certificate of

eviction shall be deemed to have violated

this act, and the board may initiate a

criminal prosecution for such violation.

(e) The provisions of this section shall

be construed as additional restrictions on

the right to recover possession of a

controlled rental unit. No provision of

this section shall entitle any person to

recover possession of such a unit.

SECTION 10. Judicial Review.

(a) Any person who is aggrieved by

any action, regulation or order of the

board may file a complaint for judicial

review against the board either in the

third eastern Middlesex division of the

district court department or the superior

court department for Middlesex county....

Judicial review of adjudicatory decisions

shall be conducted in accordance with

section fourteen of chapter thirty A of the

General Laws. Judicial review of

regulations shall be in accordance with

section seven of said chapter thirty A.

SECTION 11. Civil Remedies.

(d) The board may elect to enforce the

provisions of this act or any rule or

regulation promulgated hereunder either in

a civil action for damages for declaratory

or injunctive relief or under the

provisions of section twelve.

SECTION 12. Criminal Penalties.

(a) It shall be unlawful for any

person to demand, accept, receive or retain

any rent for the use or occupancy of any

controlled rental unit in excess of the

maximum rent prescribed therefor under the

provisions of this act or any order or

regulation hereunder promulgated, or

otherwise to do or omit to do any action in

violation of the provisions of this act or

any order or regulation hereunder

promulgated.

provision of this act or any rule or

regulation hereunder promulgated, or

whoever knowingly makes any false statement

in any testimony before the rent board or

whoever knowingly supplies the rent board

with any false information shall be

punished by a fine of not more than five

hundred dollars or by imprisonment for not

more than ninety days or both; provided,

however that in the case of a second or

subsequent offense, such person shall be

punished by a fine of not more than three

thousand dollars or by imprisonment for not

more than one year, or both.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.