Zussman v. Rent Control Board of Brookline

Wilkins, J.

(concurring). I agree with the result. There are, however, matters of significance not discussed in the court’s opinion.

I read the opinion of the court as saying that (1) a new evidentiary trial is not required at the judicial level, even where confiscation is alleged, (2) a court which hears an appeal in which confiscation is asserted engages in its own analysis of the confiscation claim on the record before the administrative board, and (3) the amount of the mortgage interest obligation payable by the landlord is not an automatic floor in determining the line of confiscation. I agree with these conclusions.

1. The opinion suggests that rent control rate matters fall into a different category from public utility and insurance rate matters and, therefore, the denial of a trial de novo is justified when confiscation is alleged in a rent control case. However, the fact is that a trial de novo is not required constitutionally in any of these various rate appeals. Opinion of the Justices, 328 Mass. 679, 687 (1952). See 4 K.C. Davis, Administrative Law §29.09 (1958). Thus the rule announced today for rent control cases is no *641different from that applied under Massachusetts constitutional principles long applicable to appeals in more traditional rate regulatory proceedings (see Aetna Cas. & Sur. Co. v. Commissioner of Ins., 358 Mass. 272, 277-278 [1970], and cases cited)1 and, as we said in Sherman v. Rent Control Bd. of Brookline, 367 Mass. 1 (1975), applicable to rent control rate appeals where confiscation is not alleged.

2. Although I accept the point made in the opinion concerning the landlord’s right under the Massachusetts Constitution to an independent analysis of the facts, the opinion offers little guidance concerning the function of a judge in this situation.

We are presented here, apparently for the first time, with the problem of the role of successive courts in extending judicial review to a rent control board decision which is challenged on grounds of confiscation. The Appeals Court concluded that the finding of confiscation made by the Superior Court judge was not “clearly erroneous” within the meaning of Mass. R. Civ. P. 52 (a), 365 Mass. 816 (1974), and the Appeals Court made no independent analysis of the facts to reach its own conclusion on the constitutional point. Zussman v. Rent Control Bd. of Brookline, 4 Mass. App. Ct. 135, 142 (1976). The Appeals Court did not analyze the evidence to see whether the findings of the judge of the Municipal Court of Brook-line, who denied relief, were “clearly erroneous.” This problem of the proper handling of successive judicial review of a constitutional challenge to rates has not arisen previously in this Commonwealth because cases in the public utility and insurance rate areas have come to this court directly.

If the court were to decide this issue, I would hope that under the present statute each court would be said to be entitled to its own judgment, unfettered by the views of any court which had previously dealt with the same appeal. Each court is conducting an analysis of the same *642agency record, and there is no reason why the first court’s view should be given any special weight. In regular agency appeals, the decision of the first court is entitled to respect but no weight on further appeal. It would be peculiar if appellate courts were compelled to give greater weight to the independent views of the trial judge than the trial judge himself had to extend to the agency presumed to be the qualified expert on the subject in issue.

The court’s opinion does not discuss the extent of the duty of a court in making its independent determination of the facts when confiscation is asserted. Our opinions have articulated the principle of de novo review (see, e.g., Boston Gas Co. v. Department of Pub. Utils., 368 Mass. 51, 54 [1975], and cases cited)', but have not stated the limits, if any, on the court’s involvement in fact determinations. In my opinion, questions of credibility and the making of subsidiary fact determinations are for the agency alone (assuming substantial evidence to support the agency’s conclusions) and are not a part of the constitutional function of a reviewing court. The court’s constitutional function extends only to ultimate findings of fact, and to the conclusions to be drawn from the subsidiary facts. Moreover, a person challenging an agency determination on the ground that its decision produces confiscation has a heavy burden of overcoming the presumptive validity of the agency decision. When one recognizes and applies these limitations on the court’s constitutional function, the landlord’s proof, which I discuss next, fails to demonstrate a case for confiscation.

3. The opinion of the court seems to regard the controversy as resolved when it concludes, correctly in my view, that in this case the landlord’s interest obligation does not have to be met by the level of rents allowed by the board. The landlord has argued, however, that if a 9% return on the fair market value of its property is not required constitutionally, there is a level of return which must be allowed in order to avoid a confiscatory return on his investment. The opinion of the court does not consider whether the *643facts show that there is confiscation as the result of the agency approved rent level.

If that analysis were made, as I believe it should be, the result reached by the court would be unchanged because the landlord has not proved confiscation. A return of 6.8% was allowed by the board. That return was apparently the return allowed when rent control came into effect and was valid presumptively. On February 1, 1972, the rent control board allowed a rent adjustment based on a return of 6.8%. The landlord has neither proved that the initial return was inappropriate nor that changes have occurred which require an adjustment in that 6.8% return. Consequently, both in making an independent analysis of the ultimate facts and in assessing whether there was substantial evidence to support the rent control board’s decision, I conclude that there is no ground for reversing the board’s decision.

I put aside, as not involved here, the possibility of a constitutional right to evidentiary hearing as a result of evidence becoming available after the agency determination.