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United Housing Foundation, Inc. v. Forman

421 U.S. 837, 95 S. Ct. 2051, 44 L. Ed. 2d 621 (1975)

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United Housing Foundation, Inc. v. Forman

United States Supreme Court

421 U.S. 837, 95 S. Ct. 2051, 44 L. Ed. 2d 621 (1975)

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Facts

United Housing Foundation (defendant) operated Co-op City, a housing project in New York City. In order to rent one of its units, potential tenants had to have an income below a certain level. Additionally, tenants were required to purchase stock in the cooperative. The stock would be repurchased by United Housing Foundation upon the tenant vacating Co-op City, at the same price that had been paid by said tenant. When United Housing Foundation attempted to raise rents in Co-Op City, the tenants (Forman) (plaintiffs) brought suit against United Housing Foundation, alleging that Forman was misled in purchasing shares of the co-op, in violation of Securities Act of 1933. The district court ruled in favor of United Housing Foundation. The Court of Appeals for the Second Circuit reversed. United Housing Foundation then petitioned for certiorari to the United States Supreme Court.

Rule of Law

Issue

Holding and Reasoning (Powell, J.)

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