Debate Over Defunct Rent Law Puzzles 9th Circuit

SAN FRANCISCO (CN) – At a hearing Tuesday, three Ninth Circuit judges grilled lawyers for landlords, tenants and the city of San Francisco over a now-defunct rent ordinance.

“How can we possibly give you any relief with respect to an ordinance that doesn’t exist,” Circuit Judge Andrew Hurtwitz asked Deputy City Attorney Christine Van Aken.

This seemed to be the question of the day, as the panel puzzled over why the city was fighting an injunction against the dead law.

“I want an ordinance that the city can enforce,” Van Aken replied.

After a one-day bench trial in October 2014, U.S. District Judge Charles Breyer barred the city from enforcing a relocation-assistance ordinance that requires landlords to retroactively pay massive amounts to evict tenants under California’s Ellis Act.

The city has argued that the ordinance helps mitigate the loss of rent control on tenants, a direct impact of the 1985 Ellis Act which allows landlords to evict tenants if the landlord wants to get out of the rental business. 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.

In his ruling, Breyer said the city crossed the constitutional line with its “unprecedented” massive lump-sum payout requirement.

After Breyer’s ruling, the city went back and amended the ordinance payout provision to a lower amount.

“The 2014 ordinance is not in effect,” Hurwitz said. “It’s been amended in some very substantial aspects to respond to Judge Breyer’s concerns. Judge Breyer is ordering you not to enforce an ordinance that is no longer in effect. So why are we here?”

Hurwitz added that the city’s appeal of Breyer’s judgment struck him as a waste of time.

But Van Aken said the judgment was unfair, and that the city had already asked Breyer for relief from judgment due to the law’s non-existence. Breyer clarified that his ruling applied only to the 2014 ordinance and not the amended 2015 one, but did not vacate the ruling.

“What we care to appeal is the principle,” she said.

“We’re not here about principles, we’re here about cases,” Hurwitz countered.

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

Van Aken said she would settle for a remand to Breyer’s court with instructions from the panel that due to the law’s revocation, he should vacate his judgment.

David Breemer with the Pacific Justice Institute, who represents former landlords Daniel and Maria Levin, said work remains to be done at the lower court level.

Hurwitz asked Breemer the same question he raised with Van Aken.

“I’m mystified as to why you really care. You represented two clients who won a total victory,” he said. “They may have to fight about new statute, but Judge Breyer has already said, ‘I didn’t rule on the new statute.’” So I have difficulty on both sides figuring out why this case which attacks the 2014 ordinance matters to either of you anymore.”

Breemer answered, “Because they can go back and reenact of the ordinance that were originally challenged by our clients, particularly the portions requiring payment for the sole purpose of solving the affordable housing crisis. It’s not likely they’d go back, but without that injunction in place it’s not impossible.”

He added that his son was in the gallery, attending his first Ninth Circuit hearing.

Hurwitz’s tone softened. “I ask these questions to prompt your answers, and I don’t mean to blame anyone. We love having lawyers here, and this is a very interesting case.”

The circuit judges did not indicate when they would rule, but they seemed to favor sending the case back to Breyer.

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