Chastleton Corp. v. Sinclair

Background

Owners of the Chastleton apartment house and a buyer who bought it at foreclosure sued to stop a Rent Commission order that cut apartment rents. The Commission’s order was entered August 7, 1922, and said rents should be reduced retroactively to March 1. The owners argued the wartime emergency that justified rent limits in 1919 had ended by 1922, and that the buyer and his corporation had not been given proper notice of the Commission’s proceeding.

Reasoning

The Court said it was open to question whether the emergency that supported the rent law still existed and whether the law could still be applied consistently with the Fifth Amendment. Justice Holmes explained that a statute tied to an emergency can cease to operate if the facts change. He concluded the factual issues about Washington’s housing conditions and notice should be accurately determined by the trial court before any final constitutional ruling. Justice Brandeis agreed to reverse for the buyer and his corporation because the order was void as to them for lack of notice, and he thought the lower court was right to dismiss one owner’s claim whose appeal was still pending.

Real world impact

The Court reversed the dismissal and sent the case back for the lower court to gather evidence about housing conditions and notice. The decision leaves open whether the rent law remains enforceable and protects buyers who can show they were not notified of the Commission’s action.