Landlord lawsuit could benefit SMRR group
Propelled by two recent landlord victories in federal court, a local group plans to sue Santa Monica City Hall to have its 25-year-old rent control law invalidated.
Action Apartment Association, which members said represents some 1,000 landlords — most of them in Santa Monica — plans to file its lawsuit sometime in the next 30 days, according to Rosario Perry, a local landlord attorney.
“Every minute of my waking hour I’m writing this lawsuit,” Perry said. “Action feels that a lawsuit to declare rent control as unconstitutional would be successful in federal court.”
The new lawsuit will be based on two recent landlord victories, — one for oil companies in Hawaii, the other for landowners at mobile home parks in Cotati, Calif. Both lawsuits were based on landlord claims that rent control laws violated their constitutional rights.
Lawyers at City Hall and rent control experts said any new lawsuit is likely to fail.
“There are numerous U.S. Supreme Court and California Supreme Court (rulings) upholding rent control,” said Doris Ganga, one of three lawyers at City Hall who defend its rent control law. “I don’t think that the courts are going to legislate rent control out of existence. Their role is to uphold the constitution, not to be legislators — as apparently Action would like them to be.”
Both of the recent landlord-friendly rulings were handed down from the Ninth Circuit Court of Appeals. The Cotati case, which was decided earlier this month, was based on landlord claims that they were essentially subsidizing their tenants, who could sell the mobile homes for more than they were worth because they were sitting on rent-controlled lots, Perry said.
Decided this past spring, the Hawaii case was based on claims from Chevron Oil Co. that its franchisees were selling gas stations for huge amounts of money because they enjoyed rent-controlled leases. Perry said the courts agreed the rent control law was a violation of landlords’ Fifth Amendment rights because lawyers failed to show a countervailing benefit to the general public.
Action Apartment Association plans to raise $100,000 to further its goal.
“We need it to pay lawyers and filing fees,” Perry said. “The city’s going to take a tremendous toll against us. They might hire outside counsel and they’ll bury us with pleadings, fights, motions to strike and discovery. They’ll do everything they can to throw us out of court.”
There are some 30,800 rent-controlled units in Santa Monica, said Tracy Condon, a spokeswoman for the Rent Control Board. Despite being targeted in the legislation, leaders of the rent control movement may benefit from any fallout it causes in Santa Monica.
Denny Zane, co-chair of the powerful Santa Monicans for Renters Rights group, which long has controlled the majority on the City Council, said the lawsuit underscores how crucial it is to have elected leaders that back rent control. SMRR on Sunday will pick candidates to endorse in the November election.
“It just shows the importance of political vigilance to protect rent control,” Zane said. “It certainly highlights the importance of political success in both the Rent Control Board and the City Council... When you’re challenged in court, you have to have elected officials who are prepared to fight back.”
Asked what Santa Monica would look like without rent control, Zane replied, “It would be a forced evacuation, that would be a social calamity. The perfect triumph of greed.”
Originally published in the Santa Monica Daily Press print edition on July 30, 2004. Read the original PDF.