## Facts

- Private landlords participated in HUD’s Section 8 program under housing assistance payments contracts, which set a “contract rent” subsidized by HUD.
- The contracts provided for annual rent adjustments using HUD’s automatic adjustment factors.
- The same contracts also included a separate cap providing that, “[n]otwithstanding any other provisions,” adjustments could not create “material differences” between assisted rents and rents for comparable unassisted units, as determined by the Government.
- HUD concluded that formula-based adjustments in some markets produced rents above market levels and began using comparability studies to limit rent increases.
- Congress enacted § 801 of the Department of Housing and Urban Development Reform Act of 1989, authorizing HUD to limit future automatic rent adjustments through comparability studies.
- Landlords claimed § 801 violated the Fifth Amendment Due Process Clause by abrogating purported vested contractual rights to formula-based increases without an independent cap.

## Issues

1. Whether § 801 violated the Fifth Amendment Due Process Clause by abrogating landlords’ contract rights to annual rent adjustments based solely on automatic adjustment factors.
2. Whether the assistance contracts permitted HUD to use comparability studies to cap rent adjustments notwithstanding the automatic adjustment provision.

## Decision

- The Supreme Court unanimously reversed the Ninth Circuit.
- The Court held it need not decide the constitutional question because the landlords lacked a contract right to “unobstructed” formula-based rent adjustments.
- The “notwithstanding” comparability clause controlled and prevented adjustments that would create material differences from comparable unassisted market rents.
- The contracts did not prohibit HUD from using comparability studies to determine market comparability and impose an independent cap on adjustments.

## Legal Principles

- A “notwithstanding” clause is read to override conflicting provisions within the same instrument when its text directly addresses the dispute.
- Claimed “vested” contractual rights are defined and limited by the contract’s own conditions; a party cannot treat a qualified contractual benefit as an unconditional entitlement.
- Courts may avoid deciding a constitutional challenge when the asserted predicate contract right does not exist under ordinary contract interpretation.

## Conclusion

Because the Section 8 assistance contracts subordinated automatic annual adjustments to a government-determined comparability cap, landlords had no contractual entitlement to formula-only increases, and HUD could use comparability studies to limit rent adjustments without triggering a due process violation.


Cisneros v. Alpine Ridge Grp., 508 U.S. 10 (1993)