Supreme Court Takes Up Challenge to Tenant Harassment Law

By Jorge Casuso

February 17 -- In a major -- though perhaps temporary -- setback for landlords, the California Supreme Court on Wednesday breathed new life into a key provision in Santa Monica's tenant harassment ordinance that had been struck down by an Appeals Court.

The Second Appellate Court ruled twice -- in May and October of last year -- against the provision, which allowed the City or tenants to sue landlords they believe maliciously served an eviction notice or lawsuit.

Both the ACTION Apartment Association, the landlord group that sued the City, and City officials agree that the Supreme Court's eventual decision will be felt statewide.

"The fact that they have agreed to hear it means they believe this is an important issue, an important issue statewide," said Deputy City Attorney Adam Radinsky, who heads the Consumer Protection Division.

"We are very glad to have the opportunity to defend this very important part of the ordinance," Radinsky said. "It's been a very long and winding road."

"Our job," said ACTION attorney Rosario Perry, "is not to win individual cases, but to establish the rights of housing providers throughout the state of California.

"When we win this case, which I'm sure we will, it will establish the law of the state without any ambiguity," Perry said.

The Appeals Court ruled last May that the challenged portions of the ordinance adopted by the City Council in 1995 "prohibit, and punish, what the litigation privilege protects" and is "contradictory" to state law, which preempts the local ordinance.

Landlord advocates greeted the ruling, as well as the results of the rehearing, as a major decision that would stop the City from sending letters threatening criminal and civil prosecution to landlords sending three day notices or warning lettersto their tenants.

In overruling a lower court decision, the appeals court found that the provision violates a landlord's fundamental right to resort to the courts without fearing legal action on behalf of the tenants.

"Under the litigation privilege, a landlord serving an eviction notice or filing an unlawful detainer is immune from suit based on those notices or filings, and cannot be enjoined from that conduct, even if the motivation is malicious, the factual allegations known to be untrue, and the legal theory untenable under the true facts," the court wrote in its May ruling.

"Under the ordinance, that same landlord, with the same lawsuit, is subject to criminal penalties, a civil lawsuit, and an injunction," the court wrote. "The ordinance thus punishes what the Civil Code protects, is contradictory to state law, and is preempted."

The court disagreed with the City's argument that the ordinance does not conflict with a landlord's litigation privilege because it addresses acts, not communications, and because malicious prosecution is an exemption to the privilege.

"We find neither argument convincing," the court wrote. "An unlawful detainer complaint is a landlord's communication to the court that a tenant has failed to pay rent or has violated another portion of the rental agreement, and as such is privileged.

"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," the court wrote.

Tenant activists worry that if the Appeals Court ruling stands, landlords would be emboldened to file malicious eviction notices, which might cause the tenant to move out or put the tenant's credit at risk.

Landlords counter that the Appeals Court ruling would lead to clearer understanding between landlords and tenants.

The tenant harassment ordinance was approved after a state law allowed landlords of rent controlled buildings to charge market rates if a unit is voluntarily vacated or a tenant is evicted for not paying rent.