The California Supreme Court on August 2 invalidated a portion of Santa Monica’s Tenant Harassment ordinance which provided for criminal and civil penalties and injunctions against landlords who maliciously bring an eviction lawsuit without a reasonable factual or legal basis; however, the Court held that such remedies are valid against landlords who maliciously serve an eviction notice when a later eviction lawsuit (often called an unlawful detainer action) is not contemplated in good faith and under serious consideration. Action Apartment Assn. v. City of Santa Monica, No. S129448.
The 5-2 decision addressed the issue of whether and to what extent the municipal ordinance was preempted by a state law known as the “litigation privilege” which provides that statements made as part of a judicial proceeding are privileged, thereby encouraging people to settle disputes in court rather than in the streets.
The case had attracted considerable attention in legal circles and the landlord/tenant community, with friend of the court (“amicus curiae”) briefs filed by the California Apartment Assn., San Francisco Apartment Assn., San Francisco Assn. of Realtors and Coalition for Better Housing in support of Action Apartment Assn., and in support of the City of Santa Monica by the city attorneys of West Hollywood, San Francisco and San Diego on behalf of the League of California Cities and the California District Attorneys Assn. and by various tenants, legal services and housing rights organizations.
Santa Monica adopted its Tenant Harassment ordinance in 1995 to prohibit a variety of malicious acts by landlords. This was in response to the state Legislature enacting “vacancy decontrol,” whereby all residential landlords were by state law allowed, with specified exceptions, to set the initial rental rate for each tenant free from local rent control. As the Supreme Court noted, the Legislature knew that “such vacancy decontrol gave landlords an incentive to evict tenants that were paying rents below market rates,” and so “the statute expressly preserves the authority of local governments ‘to regulate or monitor the grounds for eviction.’”
In 2002, Action Apartment Assn. and an individual apartment owner/manager filed a class action complaint against the City contending, among other things, that the provisions regarding eviction notices and suits were preempted by the litigation privilege. The trial court in effect granted the City’s motion to dismiss the case and entered judgment in its favor. The Court of Appeal reversed and held that all of the City’s proscriptions on the service of eviction notices and the filing of eviction lawsuits were invalidated by the litigation privilege.
The Supreme Court, in a 24-page majority opinion, affirmed the Court of Appeal as to the filing of eviction lawsuits, but said that the application of the litigation privilege to pre-litigation communications such as eviction notices (including a three-day notice to quit) depends on the factual question of whether “it relates to litigation that is contemplated in good faith and under serious consideration” and that question must be addressed on a case-by-case basis.
Santa Monica Deputy City Attorney Adam Radinsky said, “[T]he Court…held that landlords can be liable – and the Ordinance is valid – where landlords serve eviction notices on tenants with no intent to pursue litigation. The Supreme Court’s decision preserves part of Santa Monica’s wrongful-eviction penalties, unlike the Court of Appeal decision which had struck them down altogether.”