From the September 2007 Newsletter:

Supreme Court delivers major victory to small property owners
Local eviction controls are invalid when they conflict with landlord’s good-faith intent to litigate; LA Appellate decision ignores Supreme Court’s ruling
By Andrew M. Zacks

On August 2, the California Supreme Court decided that Santa Monica’s tenant anti-harassment ordinance is invalid in most respects because it conflicts with and is superceded by the California Civil Code. In striking down the local law, the Court opened wide the doors to the courthouse for small property owners, who have lived in fear that an effort to evict tenants might lead to financial ruin through lawsuits against them for wrongful eviction.

In 1995, Santa Monica enacted the Tenant Harassment Ordinance (THO), prohibiting a variety of malicious acts by landlords against tenants, including abusing a tenant with offensive words, threatening a tenant with physical harm, or “maliciously serving a notice of eviction or bringing any action to recover possession of a rental unit without a reasonable factual or legal basis.” The ordinance provides for both criminal and civil penalties, including imprisonment for up to 6 months. San Francisco’s eviction control ordinance contains similar restrictions and penalties.

In 2002, Action Apartment Association and an individual owner of multiunit apartment buildings in Santa Monica filed a class action lawsuit challenging the THO. A Los Angeles trial court tossed the case, but the Court of Appeal reversed, concluding that the THO was invalid as a matter of state law: “We note, too, that a landlord’s need for access to the courts is an unusually vital one, in that the landlord’s business relationship with his customers, the tenants, is highly regulated by law. A landlord cannot end the business relationship with a tenant without access to the courts.”

The Supreme Court affirmed that decision in all but the narrowest circumstances. All actions taken as part of an eviction lawsuit are privileged under state law, and cities may not penalize owners for them in any way, no matter how malicious the action may be. However, if there is evidence that litigation was not contemplated in good faith and under serious consideration when the eviction notice is served, then the local ordinance may punish service of an eviction notice. In other words, an eviction notice that is served without a serious intention to go to court is not protected.

The State Supreme Court’s decision validates many years of hard work by local landlord attorneys, who have been pressing these arguments in the San Francisco Courts. Many of San Francisco’s wrongful endeavor and eviction penalties are now unenforceable after Action. Property owners who face lawsuits today are now armed with a powerful, even decisive, defense. The Action case is a watershed moment for California property owners.

However, the fight continues. Shockingly, just two weeks after the Supreme Court decision, an intermediate appellate court in Los Angeles ignored the Supreme Court’s edict and cleared the way for a tenant lawsuit against a landlord who sought to exit the rental business. Contradicting the Supreme Court’s holding, this appellate decision found that a landlord’s invocation of the Ellis Act and service of a Notice of Termination of Tenancy under it was not protected “petitioning activity.” Such activities are protected by statute against “Strategic Lawsuits against Public Participation”(SLAPP). A SLAPP lawsuit is one with little or no likelihood of success, filed by a person or organization with ample assets to deter opponents with limited resources from defending their rights by involving them in ever-increasing legal costs. The anti- SLAPP statute permits courts to dismiss frivolous lawsuits at the earliest possible stage of the litigation and to require the plaintiffs to pay the defendant’s attorneys’ fees. Landlords in San Francisco have enjoyed significant success by using that statute as protection against a flood of tenant lawsuits claiming wrongful eviction. (See Broustis v Drouet, Camacho v Mellett, and Hampton v Schiaapacasse at www.zulpc.com/cases.)

The Los Angeles Appellate decision will now go to the State Supreme Court, where we trust this inconsistency will be clarified in favor of property owners. Organizations such as SPOSFI, SFAA, SFAR, and others should consider weighing in with Friends of the Court Briefs and letters that will highlight the importance of these cases and the Los Angeles Court’s failure to follow the new Supreme Court precedent.

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