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Baba v. Bd. of Supervisors of City & County of San Francisco
November 29, 2004
The Court of Appeal has ruled that recent amendments to the San Francisco Rent Ordinance are unconstitutional on their face. The ruling affirms a decision made by Superior Court Judge James J. McBride that the new laws improperly criminalized certain speech by landlords and required tenants to hire lawyers before waiving their rights.

Sometimes referred to as the "Daly Amendments" to the Rent Ordinance, after the law's sponsor, Supervisor Chris Daly, the amendments immediately became the subject of controversy after their passage on April 22, 2002. A group of tenants, landlords, and eviction attorneys filed a lawsuit challenging the propriety of the amendments in October of 2002.

The Daly Amendments were supposedly designed to stop the so-called "Ellis bluff"; this is where a landlord threatens, but never actually files, an Ellis Act eviction in order to recover a unit from a tenant. If the tenant vacates the unit, the landlord receives the benefit of the Ellis eviction, but can re-rent at market rates without consequence.

The Daly Amendments made it unlawful for a landlord to request that a tenant move or threaten to recover possession unless within five days the landlord served the tenant with an actual notice stating the just cause for eviction. The amendments also provided that any waiver of rights by a tenant were void unless the tenant was represented by a lawyer and the waiver was approved by a judge.

The group challenging the Daly Amendments claimed the laws violated their constitutional rights of free speech and self-representation. Judge McBride ruled the amendments were unconstitutional and the Court of Appeals agreed. Some of the other challenges advanced by the group were determined not sufficiently ripe for judicial determination.

The San Francisco City Attorney argued on appeal that the Daly Amendments were valid because they penalized false and misleading commercial speech which isn't constitutionally protected at all. The Court of Appeal disagreed and found that the law suppressed speech which is protected by the First Amendment because it regulated (1) both commercial and noncommercial speech, and (2) speech which is neither false nor inherently misleading.

The Court of Appeal found that the law was more extensive than necessary and not narrowly tailored to serve the governmental interest in stopping the Ellis bluff. The Court said, "If coerced voluntary evictions is the perceived harm, that is the conduct that should be penalized." The law improperly criminalized a wide range of First Amendment activity regardless of whether that activity caused any harm.

The Court of Appeal was highly critical of how the Board of Supervisors passed the law without any concrete data, studies or real-life examples of the harms the amendments were designed to address. The Court found it disconcerting that the City "neglected to produce a single actual case in which a tenant vacated" pursuant to an owner-move in or Ellis Act bluff.

Supervisor Daly's anti-landlord bias is well known. But it was absurd for the Supervisor to think he could prohibit citizens from speaking. Our lawmakers have a duty to uphold the Constitution and protect a person's right to speak freely. San Francisco has a history and tradition of free speech. It's ironic that our local lawmakers want to curtail the First Amendment rights of landlords.

The Court was also quite liberal in giving examples of landlord conduct and communications that were invalid under the amendments. By striking down the amendments, the Court may be giving guidance as to what is permitted speech by landlords.

For example, a forgiving landlord who feels an obligation to the tenant beyond what is required by the Rent Ordinance may threaten to evict that tenant in the future unless the tenant remedies his or her prior breach or refrains from committing future breaches.

Or, a landlord could request that a tenant move by also expressly acknowledging that the tenant has a legal right to stay (so long as nothing false or misleading is said). A landlord could also threaten that he or she will evict a tenant if or when a proper ground for eviction arises.

As to the requirement that a tenant hire a lawyer before waiving Rent Ordinance rights, the City argued that the law was valid because it didn't violate any federal constitution or law. The Court held that there is a right to self-representation in civil matters in California which is necessary to protect and ensure the free exercise of constitutional rights including the right to acquire and protect property and to access the courts.

In reaching its determination regarding the right to self-representation, the Court made a startling comment: the Court of Appeal intimated that the Rent Ordinance may not have the power to prohibit waivers! The language of the decision may validate the buying out of tenant rights and tenancies.

The decision also supports the notion that landlord speech regarding demands for possession, made in anticipation of litigation, is protected by a litigation privilege. The language of the decision is extremely helpful since the recent decision in Action Apartments Assn. v. Santa Monica may be reviewed by the California Supreme Court. When the Supreme Court agrees to review a Court of Appeal decision, the law is in a state of uncertainty until a final decision is made by the Court. Until Action Apartment Assn. becomes final, the Baba decision may be the best authority for claiming the litigation privilege.

The Daly Amendments were illogical and illegal from the start. The tenant advocates and lawyers advising Mr. Daly should have known better. Now, San Francisco taxpayers, most of whom are the tenants Mr. Daly purportedly represents, will have to pay for both the City's and the prevailing parties' legal expenses.

The group challenging the Daly Amendments was represented by Wiegel & Fried, LLP. The law firm of Wiegel & Fried, LLP has now been successful in four out of four challenges it has filed to invalidate San Francisco rent laws.


S.F. Board of Supervisors Restricts Condominium Conversions of 2 Unit Buildings
November 23, 2004
The San Francisco Board of Supervisors has passed legislation that will limit the two unit exemption from the condominium conversion process. The new law provides protections for seniors, the disabled, and catastrophically ill in the condominium conversion process by giving buildings, where there have not been evictions of those tenants, preference in the lottery process.

The prior law limited condominium conversions to a pool of 200 units chosen through an annual lottery. In the past, subdividers of two unit buildings were exempt from the lottery if owners of both units were occupants of the building for at least one year.

The new law deletes the exemption for certain two unit buildings from the condominium conversion lottery where certain evictions of elderly, disabled, or catastrophically ill tenants have occurred since November 16, 2004.

The two unit buildings that no longer qualify for the exemption will have to participate in the lottery in order to convert. The legislation amends the lottery process applicable to buildings with 2 6 units for the annual 200 unit lottery.

The new law adds a requirement that applicants for the first 175 of the 200 units in the lottery must now establish that certain evictions of elderly, disabled, or catastrophically ill tenants have not taken place since November 16, 2004. The remaining 25 units will be allocated in accordance with the current lottery process and will be available to all lottery participants, including those 2 6 unit buildings where the eviction of elderly, disabled or catastrophically ill have occurred.

The legislation was presented by San Francisco Supervisor Chris Daly. Originally the plan was to bring all two unit buildings into the lottery process. Amendments to the proposal by Supervisor Michela Alioto Pier limited the plan to include only two unit buildings where owners have evicted disabled, elderly and catastrophically ill tenants.

The legislation passed 9 0 with Supervisors Jake McGoldrick and Fiona Ma not present to vote.

The new law amends the Subdivision Code by repealing portions of Sections 1302, 1308, 1359, 1388, 1396 and 1396.1; by repealing Section 1316 in its entirety; amending Section 1359 to delete the exception for certain two unit buildings in which a specified eviction has occurred; and by amending Section 1396.1 to give preference in the condominium lottery to buildings where certain evictions have not taken place.

Click here for a copy of new law

Action Apartment Association v. City of Santa Monica May 25, 2004

Can a landlord be sued for merely serving an eviction notice? Not according to a case coming out of Santa Monica.

The Santa Monica City Council passed a law that said no landlord shall maliciously take any action to terminate a tenancy, including serving an eviction notice based upon facts which the landlord has no reasonable basis for believing. Severe penalties were imposed for violating the ordinance.

The ordinance also prohibited landlords from abusing a tenant with offensive words, threatening a tenant with physical harm, or interfering with a tenant's right to quiet use and enjoyment of the rental unit.

Santa Monica's Action Apartment Association challenged the ordinance on several grounds. One theory was that State law preempted the Santa Monica law. The courts agreed and held that the ordinance prohibits and punishes what the litigation privilege of Civil Code Sec. 47(b) protects. When a state law preempts the local law, the local law is invalid.

The Court of Appeals explained that the litigation privilege is intended to encourage parties to exercise their fundamental right of resort to the courts for resolving their disputes without fear of being sued in another lawsuit arising out of something said or done in the context of the litigation.

The litigation privilege applies to any communication made in judicial proceedings by litigants to achieve the objective of the litigation so long as the communication has some logical connection to the litigation. The privilege is absolute which means it applies regardless of malice or intent to harm!

The privilege applies to statements made during litigation as well as pre-litigation communications so long as they have a connection with anticipated litigation. The Court said that statutory eviction notices are covered by the litigation privilege.

This decision seems to say that threatening to evict a tenant is a protected communication. The San Francisco Board of Supervisors passed an ordinance similar to the Santa Monica law. San Francisco's law was also declared improper by the trial court and the matter is now on appeal (Baba v. Superior Court).

While the published Santa Monica decision may have some precedential value in the San Francisco case, tenant advocates convinced the Court of Appeal to rehear the Santa Monica case later this year. A decision in the Baba case is expected later this year.