NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557- 1030; SJCReporter@sjc.state.ma.us
SJC-13412
FAIRHAVEN HOUSING AUTHORITY & others1 vs. COMMONWEALTH & another.2
Suffolk. October 2, 2023. - November 6, 2023.
Present: Budd, C.J., Gaziano, Lowy, Kafker, Wendlandt, & Georges, JJ.
Department of Housing and Community Development. Housing Authority. Contract, Employment. Statute, Construction, Amendment. Declaratory Relief. Practice, Civil, Declaratory proceeding, Motion to dismiss. Administrative Law, Agency's authority.
Civil action commenced in the Superior Court Department on January 9, 2020.
A motion to dismiss was heard by Rosemary Connolly, J.
The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.
1 Lawrence Housing Authority, Medford Housing Authority, Nantucket Housing Authority, Provincetown Housing Authority, Stoneham Housing Authority, Sudbury Housing Authority, Renee H. Ceely, Kristin Hatch, Efrain Rolon, Sharon Wilkins, Brian Costello, and the Massachusetts Chapter of the National Association of Housing and Redevelopment Officials.
2 Department of Housing and Community Development. 2
Michele Randazzo for the plaintiffs. Eric A. Haskell, Assistant Attorney General, for the defendants. Frank A. Flynn, for Southeastern Massachusetts Executive Directors Association & others, amici curiae, submitted a brief.
WENDLANDT, J. This case presents the question whether
G. L. c. 121B, § 7A, grants the Department of Housing and
Community Development (DHCD)3 the authority to decline to approve
employment contracts between local housing authorities (LHAs)
and their executive directors where those contracts fail to
conform to DHCD's guidelines. Concluding that it does, we
affirm the well-reasoned decision of the Superior Court judge
dismissing the declaratory judgment complaint.4
1. Background. "We summarize the factual allegations set
forth in the complaint and in the undisputed documents
incorporated by reference in the complaint." Osborne-Trussell
v. Children's Hosp. Corp., 488 Mass. 248, 250 (2021). We
"accept[] as true all well-pleaded facts alleged in the
3 In 2023, DHCD changed its name to the Executive Office of Housing and Livable Communities and became a cabinet-level secretariat. In the past DHCD was referred to as the Department of Community Affairs. In keeping with the complaint and briefs, we refer to the agency as DHCD.
4 We acknowledge the brief of amici curiae Southeastern Massachusetts Executive Directors Association, Central Executive Directors Association, North Shore Executive Directors Association, Small Housing Authority Directors Organization, and Western Massachusetts Housing Authority Executive Directors Association. 3
complaint." Id. at 253, quoting Ryan v. Mary Ann Morse
Healthcare Corp., 483 Mass. 612, 614 (2019).
The plaintiffs are LHAs of various cities and towns in the
Commonwealth, current and former executive directors of LHAs,
and the Massachusetts chapter of the National Association of
Housing and Redevelopment Officials, a membership association of
LHAs, community development agencies, and housing and
redevelopment officials. At the time of the complaint, DHCD was
a department within the Commonwealth's Executive Office of
Housing and Economic Development and, as "supervisor" of LHAs,
had the "power to oversee most phases of the operations of"
them. West Broadway Task Force, Inc. v. Commissioner of the
Dep't of Community Affairs, 363 Mass. 745, 748 (1973).
The plaintiffs allege that DHCD has exceeded its authority
under G. L. c. 121B, § 7A, by promulgating guidelines, referred
to as public housing notices (PHNs), that govern contracts
between an LHA and its executive director in a manner that
interferes with the authority of the LHA to "determine [the]
qualifications, duties and compensation" of its executive
directors as provided by G. L. c. 121B, § 7. Among other things,
DHCD's guidelines require that contracts between an LHA and an
executive director be in writing and be approved by DHCD. See
Department of Housing and Community Development, PHN No. 2017-21
at 2-3 (Sept. 7, 2017). The guidelines set forth an executive 4
director's maximum allowable salary based on a formula and a
schedule for executive director salary, including a capped
maximum salary amount.5 See Department of Housing and Community
Development, PHN No. 2019-21 at 3-4 (Sept. 16, 2019).
The guidelines also include a template agreement6 and
require use of a cover sheet. See Department of Housing and
Community Development, PHN No. 2017-25 at 2-4 (Oct. 31, 2017).
DHCD's guidelines require contracts to include limitations on
the numbers of hours for which the executive director may be
compensated, a provision for binding arbitration for dispute
resolution, and a "for cause" termination7 provision. Id. at 8,
10, 13. An LHA executive director's benefits must be governed
5 Four versions of the schedule have been published since the passage of G. L. c. 121B, § 7A. See Department of Housing and Community Development, PHN No. 2015-17 (July 1, 2015); Department of Housing and Community Development, PHN No. 2018- 01; Department of Housing and Community Development, PHN No. 2019-21 (Sept. 16, 2019); Department of Housing and Community, PHN No. 2022-02 (Jan. 26, 2022).
6 While DHCD does not make the template agreement mandatory, it "highly recommends use of this contract template in order to facilitate its prompt review and approval, and will provide expedited review for housing authorities utilizing the contract template." Department of Housing and Community Development, PHN No. 2017-25 at 2 (Oct. 31, 2017). According to the plaintiff's complaint, DHCD has rejected "virtually all" contracts that do not follow its template agreement.
7 Under this provision, the LHA "may and, under certain circumstances . . . , shall terminate" the employment contract of its executive director for "any lawful reason in good faith relied upon by the [LHA]." PHN No. 2017-25, supra at 10. 5
by an LHA personnel policy approved by DHCD.8 Department of
Housing and Community Development, PHN No. 2019-29 at 1 (Dec.
11, 2019). The guidelines prohibit contracts that include
provisions for longevity payments,9 automatic contract renewals
or extensions, or indemnification of the executive director.
PHN No. 2017-25, supra at 15.
DHCD has withheld funding and budget approvals when
contracts depart from the guidelines. Several executive
directors have accepted reduced compensation as a result of
DHCD's approval process.
2. Procedural history. The plaintiffs filed a complaint
pursuant to G. L. c. 231A, § 1, seeking a judgment declaring
that DHCD exceeded its authority by promulgating guidelines for
contracts between LHAs and executive directors and making
8 DHCD's guidelines require that executive director benefits may not exceed the "benefits available to DHCD's administrative union . . . employees." Department of Housing and Community Development, PHN No. 2019-29 at 1 (Dec. 11, 2019).
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NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557- 1030; SJCReporter@sjc.state.ma.us
SJC-13412
FAIRHAVEN HOUSING AUTHORITY & others1 vs. COMMONWEALTH & another.2
Suffolk. October 2, 2023. - November 6, 2023.
Present: Budd, C.J., Gaziano, Lowy, Kafker, Wendlandt, & Georges, JJ.
Department of Housing and Community Development. Housing Authority. Contract, Employment. Statute, Construction, Amendment. Declaratory Relief. Practice, Civil, Declaratory proceeding, Motion to dismiss. Administrative Law, Agency's authority.
Civil action commenced in the Superior Court Department on January 9, 2020.
A motion to dismiss was heard by Rosemary Connolly, J.
The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.
1 Lawrence Housing Authority, Medford Housing Authority, Nantucket Housing Authority, Provincetown Housing Authority, Stoneham Housing Authority, Sudbury Housing Authority, Renee H. Ceely, Kristin Hatch, Efrain Rolon, Sharon Wilkins, Brian Costello, and the Massachusetts Chapter of the National Association of Housing and Redevelopment Officials.
2 Department of Housing and Community Development. 2
Michele Randazzo for the plaintiffs. Eric A. Haskell, Assistant Attorney General, for the defendants. Frank A. Flynn, for Southeastern Massachusetts Executive Directors Association & others, amici curiae, submitted a brief.
WENDLANDT, J. This case presents the question whether
G. L. c. 121B, § 7A, grants the Department of Housing and
Community Development (DHCD)3 the authority to decline to approve
employment contracts between local housing authorities (LHAs)
and their executive directors where those contracts fail to
conform to DHCD's guidelines. Concluding that it does, we
affirm the well-reasoned decision of the Superior Court judge
dismissing the declaratory judgment complaint.4
1. Background. "We summarize the factual allegations set
forth in the complaint and in the undisputed documents
incorporated by reference in the complaint." Osborne-Trussell
v. Children's Hosp. Corp., 488 Mass. 248, 250 (2021). We
"accept[] as true all well-pleaded facts alleged in the
3 In 2023, DHCD changed its name to the Executive Office of Housing and Livable Communities and became a cabinet-level secretariat. In the past DHCD was referred to as the Department of Community Affairs. In keeping with the complaint and briefs, we refer to the agency as DHCD.
4 We acknowledge the brief of amici curiae Southeastern Massachusetts Executive Directors Association, Central Executive Directors Association, North Shore Executive Directors Association, Small Housing Authority Directors Organization, and Western Massachusetts Housing Authority Executive Directors Association. 3
complaint." Id. at 253, quoting Ryan v. Mary Ann Morse
Healthcare Corp., 483 Mass. 612, 614 (2019).
The plaintiffs are LHAs of various cities and towns in the
Commonwealth, current and former executive directors of LHAs,
and the Massachusetts chapter of the National Association of
Housing and Redevelopment Officials, a membership association of
LHAs, community development agencies, and housing and
redevelopment officials. At the time of the complaint, DHCD was
a department within the Commonwealth's Executive Office of
Housing and Economic Development and, as "supervisor" of LHAs,
had the "power to oversee most phases of the operations of"
them. West Broadway Task Force, Inc. v. Commissioner of the
Dep't of Community Affairs, 363 Mass. 745, 748 (1973).
The plaintiffs allege that DHCD has exceeded its authority
under G. L. c. 121B, § 7A, by promulgating guidelines, referred
to as public housing notices (PHNs), that govern contracts
between an LHA and its executive director in a manner that
interferes with the authority of the LHA to "determine [the]
qualifications, duties and compensation" of its executive
directors as provided by G. L. c. 121B, § 7. Among other things,
DHCD's guidelines require that contracts between an LHA and an
executive director be in writing and be approved by DHCD. See
Department of Housing and Community Development, PHN No. 2017-21
at 2-3 (Sept. 7, 2017). The guidelines set forth an executive 4
director's maximum allowable salary based on a formula and a
schedule for executive director salary, including a capped
maximum salary amount.5 See Department of Housing and Community
Development, PHN No. 2019-21 at 3-4 (Sept. 16, 2019).
The guidelines also include a template agreement6 and
require use of a cover sheet. See Department of Housing and
Community Development, PHN No. 2017-25 at 2-4 (Oct. 31, 2017).
DHCD's guidelines require contracts to include limitations on
the numbers of hours for which the executive director may be
compensated, a provision for binding arbitration for dispute
resolution, and a "for cause" termination7 provision. Id. at 8,
10, 13. An LHA executive director's benefits must be governed
5 Four versions of the schedule have been published since the passage of G. L. c. 121B, § 7A. See Department of Housing and Community Development, PHN No. 2015-17 (July 1, 2015); Department of Housing and Community Development, PHN No. 2018- 01; Department of Housing and Community Development, PHN No. 2019-21 (Sept. 16, 2019); Department of Housing and Community, PHN No. 2022-02 (Jan. 26, 2022).
6 While DHCD does not make the template agreement mandatory, it "highly recommends use of this contract template in order to facilitate its prompt review and approval, and will provide expedited review for housing authorities utilizing the contract template." Department of Housing and Community Development, PHN No. 2017-25 at 2 (Oct. 31, 2017). According to the plaintiff's complaint, DHCD has rejected "virtually all" contracts that do not follow its template agreement.
7 Under this provision, the LHA "may and, under certain circumstances . . . , shall terminate" the employment contract of its executive director for "any lawful reason in good faith relied upon by the [LHA]." PHN No. 2017-25, supra at 10. 5
by an LHA personnel policy approved by DHCD.8 Department of
Housing and Community Development, PHN No. 2019-29 at 1 (Dec.
11, 2019). The guidelines prohibit contracts that include
provisions for longevity payments,9 automatic contract renewals
or extensions, or indemnification of the executive director.
PHN No. 2017-25, supra at 15.
DHCD has withheld funding and budget approvals when
contracts depart from the guidelines. Several executive
directors have accepted reduced compensation as a result of
DHCD's approval process.
2. Procedural history. The plaintiffs filed a complaint
pursuant to G. L. c. 231A, § 1, seeking a judgment declaring
that DHCD exceeded its authority by promulgating guidelines for
contracts between LHAs and executive directors and making
8 DHCD's guidelines require that executive director benefits may not exceed the "benefits available to DHCD's administrative union . . . employees." Department of Housing and Community Development, PHN No. 2019-29 at 1 (Dec. 11, 2019). However, "DHCD will review and consider a request for deviation from [state employee union benefit] standards so long as it can be demonstrated that the deviation is reasonable . . . and that the contract terms will not negatively impact either the financial condition of the [L]HA or the [L]HA's staff and coverage availability." Id. at 2.
9 Longevity payments refer to "increased compensation on the basis of increased years of service." PHN No. 2017-25, supra at 15. DHCD began allowing such payments as "bonuses" in 2022, but the bonus cannot be used in calculating an executive director's retirement benefits. Department of Housing and Community Development, PHN No. 2022-16 (Sept. 21, 2022) at 3. 6
compliance with the guidelines a requirement to obtain
contractual approval from DHCD. A Superior Court judge allowed
DHCD's motion to dismiss the complaint under Mass. R. Civ. P.
12 (b) (6), 365 Mass. 754 (1974).10 The plaintiffs timely
appealed, and we transferred the case to this court on our own
motion.
3. Discussion. "We review the allowance of a motion to
dismiss de novo, accepting as true all well-pleaded facts
alleged in the complaint." Osborne-Trussell, 488 Mass. at 253,
quoting Ryan, 483 Mass. at 614. "We draw all reasonable
inferences in the plaintiff's favor, and determine whether the
allegations plausibly suggest that the plaintiff is entitled to
relief on that legal claim" (quotations omitted). Osborne-
Trussell, supra, quoting Buffalo-Water 1, LLC v. Fidelity Real
Estate Co., 481 Mass. 13, 17 (2018). See Iannacchino v. Ford
Motor Co., 451 Mass. 623, 636 (2008). "To survive a motion to
dismiss, the 'factual allegations must be enough to raise a
right to relief above the speculative level based on the
assumption that all the allegations in the complaint are true
10Contrary to the plaintiffs' contention, the judge did not convert the motion to dismiss into a motion for summary judgment by considering DHCD's guidelines referenced in the complaint. See Ryan, 483 Mass. at 614 n.5 (where "the complaint makes clear reference" to document and "neither party disputes [its] existence or terms," it may be considered in connection with motion to dismiss). 7
(even if doubtful in fact)'" (alterations omitted). Osborne-
Trussell, supra, quoting Sudbury v. Massachusetts Bay Transp.
Auth., 485 Mass. 774, 779 (2020). "The facts alleged must
plausibly suggest (not merely be consistent with) an entitlement
to relief" (quotation, citation, and alteration omitted).
Osborne-Trussell, supra.
The complaint seeks a declaratory judgment regarding the
scope of DHCD's authority under G. L. c. 121B, § 7A -- a
question of statutory interpretation, which we review de novo.
See Armstrong v. Secretary of Energy & Envtl. Affairs, 490 Mass.
243, 247 (2022). In deciding whether an agency is acting within
its statutory authority, we use "conventional tools of statutory
interpretation" to determine "whether the Legislature has spoken
with certainty on the topic in question"; if the statute is
unambiguous, "we give effect to the Legislature's intent." Id.,
quoting Goldberg v. Board of Health of Granby, 444 Mass. 627,
632-633 (2005).
"[T]he general and familiar rule is that a statute must be interpreted according to the intent of the Legislature ascertained from all its words construed by the ordinary and approved usage of the language, considered in connection with the cause of its enactment, the mischief or imperfection to be remedied and the main object to be accomplished, to the end that the purpose of its framers may be effectuated."
Reagan v. Commissioner of Revenue, 491 Mass. 446, 451 (2023),
quoting Oracle USA, Inc. v. Commissioner of Revenue, 487 Mass. 8
518, 522 (2021). Accordingly, we begin our analysis with the
words of the statute. "[O]rdinarily, where the language of a
statute is plain and unambiguous, it is conclusive as to
legislative intent" (citation omitted). Osborne-Trussell, 488
Mass. at 254.
Adopted in the wake of a public scandal involving the
executive director of a local housing authority,11 G. L. c. 121B,
§ 7A, provides that:
"[DHCD] shall promulgate guidelines for contracts to be executed by the housing authority and an executive director. [DHCD] may review all contracts between the housing authorities and executive directors and all terms for payments or monetary remuneration relevant to state payments; provided, however, that [DHCD] shall review all contracts and all terms for payments or monetary remuneration worth more than $100,000 per annum. [DHCD] may strike contract provisions that do not conform to the guidelines." (Emphases added.)
The complaint alleges that DHCD has exceeded its authority to
issue "guidelines" by requiring contracts between LHAs and
executive directors to comply with the guidelines.
Specifically, the plaintiffs maintain that the Legislature's use
of the term "guidelines" evinces an intent that DHCD issue broad
parameters that lack the force of a mandate. The term
"guideline" does not support the plaintiffs' argument. A
"guideline" is "an indication or outline of policy or conduct."
11See Chelsea Hous. Auth. v. McLaughlin, 482 Mass. 579, 582 (2019) (involving unreported compensation of executive director of Chelsea Housing Authority). 9
Merriam Webster Collegiate Dictionary 555 (11th ed. 2020). This
definition does not preclude such rules from being mandatory.
Any ambiguity in this regard is clarified by the Legislature's
granting DHCD the authority to "strike contract provisions that
do not conform to the guidelines." See Malloy v. Department of
Correction, 487 Mass. 482, 496 (2021), quoting Pentucket Manor
Chronic Hosp., Inc. v. Rate Setting Comm'n, 394 Mass. 233, 240
(1985) ("we look not only to the specific words at issue but
also to other sections [of the statute], and 'construe them
together . . . so as to constitute an harmonious whole
consistent with legislative purpose'").
We disagree with the plaintiffs' contention that this
construction is at odds with the authority of LHAs, pursuant to
G. L. c. 121B, § 7, to "determine [executive directors']
qualifications, duties and compensation." "We assume that, when
it enacts legislation, the Legislature is . . . aware of
existing statutes." Suliveres v. Commonwealth, 449 Mass. 112,
116 (2007). Pursuant to the statutory scheme governing the
relationship between DHCD and LHAs, DHCD operates as "the
administrative superior" of LHAs. West Broadway Task Force,
Inc., 363 Mass. at 748 & n.4, citing G. L. c. 121B, §§ 1, 11,
29, 30-32, 34, 35, 37. DHCD has the "power to oversee most
phases of the operations of the local housing authorities, and
to that end it is given various powers of approval and veto of 10
the activities of those authorities together with rule making
power and power to demand reports and other information."12 West
Broadway Task Force, Inc., supra at 748.
Subject to DHCD's supervision, LHAs retain "operating
responsibility and corresponding powers regarding the finances,
construction, maintenance, and day-to-day management of housing
projects in [their municipalities]." Id. In view of this
framework, and against the backdrop of a public scandal, see
note 11, supra, the Legislature enacted G. L. c. 121B, § 7A, to
give DHCD further authority and oversight regarding the terms of
executive director contracts with LHAs.13 Within those
constraints and consistent with the oversight allowed to DHCD by
G. L. c. 121B, § 7A, LHAs continue to have authority to hire
12See, e.g., G. L. c. 121B, § 3 (DHCD shall certify dissolution of housing authority), § 5 (DHCD shall appoint one member of each housing authority), § 26 (j) (renovation of existing housing project "shall be undertaken in accordance with rules and regulations promulgated by [DHCD]"), § 26 (k) (DHCD must approve demolition of existing project), § 26B (DHCD must establish performance-based monitoring program for all LHAs), § 28A ("Each housing authority shall submit to [DHCD] an annual plan"), § 29 ("[DHCD] shall investigate the budgets, finances and other affairs of housing authorities and the housing authority's dealings, transactions and relationships"), § 31 ("A housing authority shall not undertake a low-rent housing project until it has submitted to [DHCD] the plans and description of the project . . .").
13Section 7A was passed alongside G. L. c. 121B, § 26B, which requires LHAs to participate in a performance-based monitoring program established by DHCD and allows DHCD to designate a housing authority as "chronically poor performing." See St. 2014, c. 235, §§ 7, 8. 11
executive directors and "determine their qualifications, duties
and compensation."14 G. L. c. 121B, § 7.
Judgment affirmed.
14The plaintiffs also contend that DHCD's use of "guidelines" to mandate material terms of an executive director's contract effectively renders them "regulations" subject to the rulemaking provisions of the Administrative Procedure Act (APA), G. L. c. 30A, § 5, which require, inter alia, that proposed regulations be published and considered at a public hearing. We disagree. The term "regulation" as used in the APA excludes "regulations concerning only the internal management or discipline of the adopting agency or any other agency . . . not substantially affecting the rights of or the procedures available to the public or that portion of the public affected by the agency's activities." G. L. c. 30A, § 1 (5). The guidelines promulgated pursuant to G. L. c. 121B, § 7A, concern the internal management of LHAs under the oversight of their supervisor, DHCD; they "do not purport directly to regulate public conduct." Commonwealth v. Trumble, 396 Mass. 81, 89 (1985). Cf. Harborview Residents' Comm., Inc. v. Quincy Hous. Auth., 368 Mass. 425, 426-427 (1975) (concerning regulations governing public housing tenant leases and grievance procedures); Commissioner of the Dep't of Community Affairs v. Medford Hous. Auth., 363 Mass. 826, 828 (1973) (concerning regulations governing LHA's interaction with public housing tenants).