Well, the best result would be that in the future, tenants won't get burned in their apartments. The tenant already has every possible incentive not to be burned. If we make the landlord liable, we add another person who shares this interest. So, this is what Klein held, maybe.
The court also recognizes the interest of retribution: punitive damages are there to hurt the landlord because he exposed tenants to this risk while making a profit. This is a major criminal law policy, of course, as well as a tort policy. As a rule, liberal judges wonder if retribution is constitutional, and appropriate, in criminal cases. Conservative judges think it's fine. Those roles reverse when we move to a civil context: conservatives are more nervous about this, whereas liberals like it.
Also, even though this will drive rents up, better to share the costs across all tenants, rather than have a lottery where some individuals get incinerated. Plus, the landlord is best able to address the problem for all the reasons we're familiar with: easiest to insure against the risk, in best position to make repairs, etc.
The courts sometimes need to goad legislatures into taking action. The legislature may not be responsive because these folks are sort of disenfranchised. If the court does not protect tenants, even though this is not the ideal of the judicial function, then nobody will, and that would be bad.
Of course, the legislature will have to be the ones to allocate money (the court has no money to allocate), but if the judiciary creates this requirement, then it is they who take the political risk, and the legislature is off the hook for it.
Punitive damages are a good thing, and the court should not be reluctant to impose them. We need them because we can not rely on governmental agencies to carry out the law in all cases. We need the ability to apply that private force. Jury-awarded punitive damages will strike fear where administrative regulation did not. It's an egalitarian re-allocation of resources; somewhat random, perhaps, but at least we're shifting money from those who have a lot to those who are in need.
And, of course, punitives are excellent for attorneys. Note that it's usually juries who award punitive damages. This is the only occaision in the society where actual folk make policy (i.e., not elected officials and life-long bureaucrats). They take that role seriously, and it's a hallmark of American democracy. It's the only time we get government of and by the people (we might get it for the people most of the time). And anyway, it's the law-- the court should let the system take its proper course.
Now, the landlord.
So, we had a long time without punitive damages-- that's a relatively recent innovation. Precedent is on the landlord's side. And courts shouldn't overrule prior cases, especially when the result is punitive: people need to be able to rely on the law. You can't change punitive law after a person has acted-- it just makes society fearful.
As far as deterrance goes, you can't order a person to take a loss: you won't get the right result. The alternative here is bankruptcy, and that's a much worse deterrant than the thought that a tenant might get burned and there might be punitive damages. Plus, if we are indeed allowed to insure against punitive damages, then we'll just do that. Punitive damages won't create philanthropic landlords.
If Maxey wasn't deterred by the potential of criminal sanctions, this isn't going to make him any less wanton. And anyway, this isn't going to do any good. If the landlord just insures, that doesn't reduce the risk to tenants-- it just ups the rent, and reduces the landlord's risk.
We're also sending a message to all people who do business with the poor: you may have to take a loss in these deals. This might drive merchants in general out of the market. Why should people invest in high-risk things, when they could invest in things with less risk? The last thing we want to do is drive private landlords out of the low-rent market.
Retribution is always unattractive. Even in criminal cases, but especially here. Possibly it's forbidden under 8A (cruel & unusual): we're doing this just to hurt (that's what "punitive" means).
And ultimately, this just leaves the public holding the bag: HUD or other subsidies will have to step in, if we're going to attract future landlords into the business. It just causes fiddling with the tax code, and then all the other beneficiaries of the tax code want some too. And plus, that's a job for the legislature.
Anyway, so what if Maxey was callous? All he really did here was fail to intervene. Do we really want to impose punitive sanctions for failures to act? If so, then who is safe? Does any of us really do enough?
Note that the Us is the only place with juries in civil cases, and also the only place with punitive damages. How are we improving low-income housing by making a big cash donation to lawyers? All that money comes out of housing. The money that got paid to Brown effectively cost the other tenants. Punitive damages are sort of random, also. Why should we allow 12 people picked at random to assess this complex economic situation?
What does "unconstitutional" mean? Pragmatically, it means that the court is interjecting itself into the legislature's policy arena, and the law itself is not allowed to stand.
Interesting story about handicapping this case in class both at the start and end of the course.
Also, some comedy: the battle of the experts saying why people bathe. Plus Brune saying he never bathed that much, and neither did his parents.
The equal protection clause: does this statute discriminate on the basis of race or religion? If so, it will be a suspect statute, deserving of strict scrutiny. Minorities and single moms are disproportionately impacted. The court doesn't make this argument, but it still lurks there.
Even if it's not discriminatory, if there's no rational basis, it'll still be struck down.
And then there's the takings clause: if the state wants to mandate hot water, they'll have to subsidize it, otherwise it amounts to taking property (by making it not worth owning) without proper payment.
And anyway, free contract: the tenants could leave if they wanted, and they're electing to stay even though there's no hot water.
And criminal sanctions are nuts: this isn't a dangerous person from whom we need to protect society. We don't need retribution against this guy-- we're actually angry ate the socioeconomic conditions that produced these effects. Criminalizing Brune just penalizes Brune: it does not solve the problem. The only way to solve the problem is to get money in there, either by allocating it from taxes or inducing investment. Criminal sanctions are not an enticement.
Of course, at some point we might want some liability for the landlord (if the failure here were for no toilets or something). The debate here is really about where that point lies.
The landlord gives notice that the lease is order, but it's slightly short of a month's notice (end of the pay period is the key). The tenant didn't leave. So now they can dispute about whether notice was effective, and the court finds that it's inadequate. This means that the landlord still hadn't given notice (horrible advice from his attorney), even though they've been litigating for years.
Nowadays the statute says 28 days notice before the rent-paying period, but a notice that's ineffective for this period is automatically effective for the next one.
Landlord wishes to evict tenant because tenant is a nuisance, always calling the housing authorities. Retaliatory eviction, basically.
Court says the landlord can evict for any reason, or no reason at all, but not a retaliatory reason. This oxymoronic statement is often repeated. Anyway, if you could do this, the benefits of the implied warranty of habitability would be rendered nugatory. If we're serious about that protection, then we have to forbid retaliatory evictions. It can be hard, incidentally, to prove that an eviction is not retaliatory.
Oral promises to make repairs. So the parol evidence rule policy comes back to hant us.
You can't get blood out of a turnip: if someone is already paying over what they can in rent, it's not possible to charge more.
Basically, you can think of this as forcing future buyers not to pay as much for the properties they want to rent out, because they're required to fix the properties up in order to collect the rent. The court sees itself as driving down the purchase price of low-income housing (i.e., declaring that they're not worth what they used to be), not driving up rent. Since rent can't be increased.
Clearly, one could see this as chilling the market for investment in housing. Investment in housing is essential: every year the housing stock depreciates by one year's wear and tear, so we must keep investing in it. Plus the population is growing, by the way.
Dissent: separation of power. Policy is made by elected representatives or a free market. If the legislature wants to take this step, it can.
On the other hand, the court can't build houses, but it could shake up the existing situation so that a new situation is forced to arise.
One theory is that new housing will get built anyway, because investors aren't thinking far enough down the road to account for depreciation at the end of the property's life. The contrary theory is that investors DO think about this stuff, and are not casual with their funds.
The court is taking away the profit made by purchasers of old property. Before the implied warranty of habitability, it was possible to buy old property, and start renting it out. Future investors, though, will be less willing to pay for old buildings.
This is a taking, though: the public is essentially taking away property for the public's benefit. That's not allowed, though.
Three standards: preponderance (more than 50%), beyond reasonable doubt (can't be defined, because we can't define "reasonable"), and clear and convincing (sort of a middle ground).
There's also the but-for test: but for the complaints to the authorities, the landlord would not have evicted. (that's the test under the statute). And the tenant has to show this just by a preponderance.
Anyway, this is how WI attempts to address questions like Edwards.
Also, this was set up by a nonprofit charity. So there's some indirect subsidy (tax exemption, at least, and donors get a tax break). So even before it becomes fully public housing, there's substantial subsidy involved. Also, because this is HUD, there's no profit motive. HUD is insuring the mortgage: that is very valuable. The mortgage rate is very low, and it's assigned to a quasi-government agency: GMNA.
Because of the mortgage guarantees, when the developer defaults, HUD becomes the owner of the building. That's atypical: they generally try to use Section 8 to give subsidies to tenants. They don't normally build or own buildings. Generally, HUD just pays the landlord on behalf of the tenant (thereby making the landlord more willing to accept the tenant, because the tenant's rent is sort of guaranteed). Generally HUD subsidizes up to 70% of a tenant's rent. So Section 8 tenants don't get relegated to public housing-- they live in regular housing, with HUD subsidy.
Every year, Section 8 grows, and HUD threatens to cut back. But it can't carry that threat out-- it would mean making people homeless. So HUD usually expands.
Anyway, this building is dreadful: it has pretty much every problem we've seen. HUD first hires a consultant to try to fix it up. The consultant says it's not going to be cheap to fix all this. So HUD despairs, and decides to get the people out so they can tear it down.
Plaintiffs maybe don't want it torn down: if they had other options, they'd probably have tried to take advantage of them. So it may not be ideal, but it's the best they can do. So at the very least they want relocation expenses, on the basis of URA (a federal relocation assistance act). The purpose of that act was to help people who are:
Why not give public housing tenants relocation money? Well, they're already being given some assistence. So maybe it seems like a bit much. And who is going to pay this money? It would be HUD, which is not that deep a pocket. Essentially, this would mean fewer section 8 units next year.
HUD was taking some risks here: they held onto the security deposits ($100 bucks times 17 claimants). You'd get double in WI. Plus then the attorney's fees. They'd be on the hook for all of this, had the court found for the plaintiffs. The reason they were retaining the security deposits was because the plaintiffs had witheld rent, saying that the implied warranty of habitability entitles them to rent abatement. If there were an implied warranty of habitability, this building wouldn't fulfill it.
The court says there's no such warranty, even though the goal of the program says explicitly (42 USC §4621) that there is a goal of providing decent housing for everyone. The court finds this not to be a warranty. When the court dismisses the various state cases, they overlook the fact that Javins (which they site) is really federal, since the DC court of appeals is the 5th circuit. Also, you could say that the implied warranty of habitability is basically a common law requirement, and since Eerie Railroad, federal courts have adopted the state law (here, IN) for the jurisdiction in question.
Now, of course, there's the supremacy clause. So the Feds can trump state law, but they must make the statute explicit. Here, the statute states the objective of decent housing-- that's hardly a repudiation of Indiana's leanings. Federalism: we should use local law where possible.
So there's not a lot of reason in this opinion. There's plenty of precedent saying that there should be an implied warranty of habitability.
And here, egalite applies a fortiori: these are the poorest of the poor. There might be an equal protection issue, as well: the disproportionate impact of this ruling lands on minorities. And the usual contract of adhesion argument: these folks have no choice, and the federal government is the most powerful possible negotiating party. If this is a contract of adhesion, it is void, and no rent is due.
Maybe it would be better if HUD took care of the housing that it has; better to have fewer public housing units of minimal acceptable quality than to have this onslaught of squalor. And inferior housing is bad for all of us. Plus, if we're going to hold anybody to some minimal standard, the freaking federal government should be it. What does it do to private landlords, if they have to live up to a standard that the federal government doesn't seem to believe in?
If nobody forces HUD to toe the line, it will inevitably become self- serving. Somehow, it is finding it inconvenient to provide housing to poor people. The bureaucracy needs to be reminded who is #1: not HUD's staff, but the tenants.
HUD should also be made to conform so that it understands that the task is difficult: we don't want the government to be able to impose weighty obligations on others, if they can shirt them themselves. If they don't understand how hard it is to be a private landlord, the requirements will escalate to an utterly unreasonable level.
Still, at the very least, it is clear that there isn't a pile of extra money here. HUD's books are open, and we know there's no profit here. We also know that we can't charge higher rents, because HUD is already paying the rent. How are we going to explain to other section 8 tenants that we're contracting the housing supply in order to make IN housing units nicer?
Besides, if we impose the implied warranty of habitability, that means that this is going to a jury to decide what the rent should have been. That's crazily inefficient for everyone. Plus, in this case, the remedy is rent abatement, and there is no market rent in this case. How do we compute how much less of a subsidized rent should be paid? And how does witholding it incent the property owner in this case, since they're paying to begin with?
Even if you have the implied warranty here, you're just throwing good money after bad. The tenants destroyed the place, and will do so again.
And how is HUD going to react to the imposition of warranty? They'll just get out of the business and demolish the place. And we don't want that. There's also no retributive satisfaction to sticking it to HUD, because there's no venality here. And anyway, what is a warranty but an upholding of expectations? What are the reasonable expectations of someone in subsidized housing?
We know what private landlords are going to do with the implied warranty of habitability: they're going to keep trying to squirm out of it. Rent will still be collected on sub-code housing. But the government *has* to honor the warranty-- it can't bribe the inspector or skate by its audits. So only the feds would truly have this burden imposed. And now the tenants in the federal housing will be living better than HUD- subsidized people in private housing. Or even than tax-paying tenants who are NOT in HUD-subsidized apartments. This will make the rest of the population antagonistic to public housing.
Separation of powers: courts should defer to agencies and legislature. If congress wanted an implied warranty of habitability, it would have said so, and that speaks volumes about what congress actually wants. The court should not be dictating to HUD how HUD's budget should be spent. HUD knows better about how to do that, and is accountable for doing it right. Unless an agency is interpreting the law in an arbitrary and capricious manner, the court should defer to the agency. The court can't foresee the consequences of re-allocating HUD's money. And HUD has executive and legislative (i.e., budgetary) oversight. The court is not accountable in those ways.
With respect to Federalism, HUD will point to the supremacy clause, and cite Stadium Apartments. Also, the 7th Circuit is part of the Federal Government. So we could argue that Federal Courts will tend to hesitate before attacking a federal agency. Cynical, but realistic, perhaps.
Some other possibilities: they could raise the rent. That probably won't work-- and it's a tough remedy on the remaining tenants. Or they could divert funds from repairs. That, too, is problematic, and just sets the authority up for future tort suits, and implied warranty problems.
The agency could cut staff (as in Klein), or lower salaries. But then you get inferior people (as in Ponticas).
So if public housing is exposed to tort remedies for failing to provide good housing, that situation in and of itself is problematic. So, some courts say that public housing doesn't have to be responsive to these kinds of concerns: no individual duty, just a general promise to do its best. But if this doesn't work for public housing, why do we think it will work for private housing? Couldn't we challenge the whole notion that landlords should be liable in tort? At least in low-income housing circumstances?
There's no duty to protect people from random criminal acts: they are not foreseeable.
If you undertake to protect people, and then do it negligently, you are liable, but the security guards here were to protect the property against vandalism-- not to protect the tenants.
If CHI Housing Authority is liable for the crime that takes place in its buildings, it will just expend all its money on tort awards.
HUD interprets the congressional mandate to mean that it's OK to evict Section 8 tenants, as long as they take the unit off the market (i.e., don't give it to another Section 8 tenant): the individual unit loophole.
The court says that it won't honor the administrative interpretation of the law (even though other courts will; and that's actually a canon of interpretation-- the agency is supposed to know best). The court says you have to have a hearing, etc. This is a protection that private tenants don't get, incidentally.
Now a hearing is useless, unless you're required to show cause. The court hints that this might be a constitutional right. Now, that contradicts the USSC in Lindsey, where the court explicitly held that there was no constitutional right to housing.
The public housing authority can evict criminals: they're not obliged to house them. Here, though, there wasn't proper notice, and they didn't have the required hearing. Note that once again, this is a protection that private tenants don't get: they can just be evicted.
This is sort of a WI variant on Mitchell
This is the worst of the worst housing, obviously.
The question is: can the city summarily evict squatters?
Well, if they're not real tenants, then yes: they can just be evicted-- they have no legal rights.
The Federal Government challenges this quota on the basis of violating the fair housing statute. It's not a constitutional question: it's a statutory issue.
The policy stated is to achieve fair housing. Is a racial quota fair?
The court strikes it down: this quota is illegal based on the federal statute (and probably NY statute as well, but we don't need to worry about that).
The court thinks maybe a quota might be OK to achieve temporary or initial integration, but a long-term quota is problematic. White flight will always be a concern, and imposing a perpetual quota is bad. Also, this is a cieling quota, which effectively limits minority access to these facilities.
The dissent is quite pithy, quoting 2nd Cir (Learned Hand): why are we messing with the most integrated housing project in the US, by tampering with this? Let's not read the statute literally, but understand that its purpose is to promote integration. We're killing that effect by honoring the letter of the statute.
Some arguments: "fair housing" is so bland compared with "don't discriminate," and therefore we should go in the direction of the more specific terms. Likewise, words in the preamble of the statute shouldn't maybe be weighed as strongly as words in the statute itself. And, had congress wanted a different effect, they could have been more specific.
The legislative history is a spaghetti. Many conflicts canceling one another out. We have no precedent on this point.
Still, you can't *force* people to integrate. People resent being forced, and will be antagonistic.
The discrimination is overt here: nothing hidden or sneaky. And it isn't so bad to have voluntary segregation.