9th Circuit Punts Ruling on Defunct Rent Law

SAN FRANCISCO (CN) – A Ninth Circuit panel punted a lawsuit over San Francisco’s now-defunct rent ordinance back to a federal judge Monday, so he can consider vacating a judgment stopping the city from enforcing it.

In 2014, U.S. District Judge Charles Breyer barred the city from imposing a relocation-assistance ordinance that requires landlords to retroactively pay massive amounts to evict tenants under California’s Ellis Act.

The ordinance mandated that landlords pay tenants the difference between their current rent and market rent, which in many cases could amount to a staggering sum.

San Francisco has since adopted a new ordinance that lowers the payout amount, and at a hearing in February asked a three-judge Ninth Circuit panel to order Breyer to vacate his 2014 judgment.

Just before the hearing, Breyer clarified that his ruling applied only to the 2014 ordinance and not the amended 2015 one, but did not vacate the ruling.

“We don’t want to be collaterally bound by this judgment,” Deputy City Attorney Christine Van Aken told the judges. “If we want to revive the old ordinance we can’t defend it. A court would just say, ‘This is done.’”

On Monday, the panel remanded the case to Breyer but refused to give him any orders as to how he should rule.

The unpublished opinion from Circuit Judges Andrew Hurwitz and A. Wallace Tashima – and visiting Sixth Circuit Judge Eugene Siler – said the general rule is to let the lower court’s judgment to stand when an appellant renders it moot by its own actions, as the city did here.

“An exception may apply, however, if the appellant is a governmental entity,” the judges wrote, adding, “Rather than decide the issue in the first instance, we will remand to the district court to consider whether its judgment should be vacated in light of the adoption of the new ordinance.”

David Breemer with the Pacific Justice Institute, who represents former landlords Daniel and Maria Levin, said he and his clients are pleased with the decision and were frustrated that they had to go through the appellate process on an obsolete law.

“We’re happy with the decision. The Levins are happy with the decision and they believe the case never should have been appealed after the city decided to change its tenant law,” Breemer said in a phone interview Tuesday.

Property owners have already sued the city in state court over the new ordinance, which was enjoined from enforcement by Judge Ronald Quidachay in October 2015. That case is now on appeal.

“We continue to defend the new ordinance. That case is in the hands of the court,” city spokesman John Cote said in an email.