Judge Mitchell L. Beckloff, Case 23STCP00720 2023-05-17 Tentative Ruling

Judge: Mitchell L. Beckloff, Case: 23STCP00720, Date: 2023-05-17 Tentative Ruling

Petitioner, Apartment Association of Los Angeles County, Inc., initiated this proceeding to obtain an order compelling Respondent, the City of Los Angeles, to rescind Ordinance No. 187763 and Ordinance No. 187764. Petitioner contends the ordinances are preempted by state law.

Proposed Intervenors, Community Power Collective (CPC) and Inner City Struggle (ICS) (jointly, Proposed Intervenors) move for an order granting them leave to intervene in this proceeding. They do so pursuant to Code of Civil Procedure section 387, subdivisions (d)(1) and (d)(2).

Neither Petitioner nor Respondent oppose Proposed Intervenors’ motion. In fact, Petitioner and Respondent previously agreed to allow intervention. The court rejected the stipulation.

“An intervention takes place when a non-party, deemed an intervenor, becomes a party to an action or proceeding between other persons by doing any of the following: [¶] . . . [¶]

(3) Demanding anything adverse to both a plaintiff and a defendant.” (Code Civ. Proc., § 387, subd. (b)(3).)

“Mandatory intervention is governed by . . . section 387 subdivision (d)(1)—which ‘should be liberally construed in favor of intervention.’ [Citation.]” (Crestwood Behavioral Health, Inc. v. Lacy (2021) 70 Cal.App.5th 560, 572.) “[T]o establish mandatory intervention under subdivision (d)(1)(B), [the proposed intervenor] must show (1) “ ‘an interest relating to the property [or] transaction which is the subject of the action’ ” [citation]; (2) ‘he or she “is so situated that the disposition of the action may as a practical matter impair or impede’ ” his or her “ ‘ability to protect that interest’ ” [citation]; and (3) he or she is not “ ‘adequately represented by the existing parties’ ” [citation].” (Id. at 572-573 [fn. omitted].)

For permissive intervention, the nonparty must satisfy the following factors: “(1) the proper procedures have been followed; (2) the nonparty has a direct and immediate interest in the action; (3) the intervention will not enlarge the issues in the litigation; and (4) the reasons for the intervention outweigh any opposition by the parties presently in the action.” (Reliance Ins. Co. v. Superior Court (2000) 84 Cal.App.4th 383, 386; Code of Civ. Proc., § 387, subd. (d)(2).)

Proposed Intervenors seek both mandatory and permissive intervention in this proceeding.

Proposed Intervenors are community-based organizations comprised of thousands of tenants affected by the challenged ordinances. Specifically, CPC is a nonprofit organization comprised of community members, organizers, and artists who have historically advocated for tenants, street vendors, and affordable housing. (De Paz Decl., ¶ 2.) ICS is a nonprofit multi-issue organization that advocates for its community’s right to live in a safe, healthy, and thriving neighborhood; ICS serves a membership of predominantly very low-income and extremely low-income people of color in the Eastside of Los Angeles, including the communities of Boyle Heights, El Sereno, and Lincoln Heights – areas with many tenants. (Rivera Decl., ¶¶ 2-5.)

Intervention is mandatory under Code of Civil Procedure section 387, subdivision (d)(1)(B) where Proposed Intervenors demonstrate: (1) a protectable interest in the subject of the action; (2) the disposition of the action may impair or impede its ability to protect that interest; and (3) its interests are not adequately protected by the existing parties. (Carlsbad Police Officers Assn. v. City of Carlsbad (2020) 49 Cal.App.5th 135, 148.)

The court finds Proposed Intervenors cannot demonstrate their intervention is mandatory. They have not demonstrated that their interest will not adequately be represented by the City.

“Three factors determine whether a party will adequately represent a nonparty's interest: ‘(1) whether the interest of a present party is such that it will undoubtedly make all of [the nonparty's] arguments[,] (2) whether the present party is capable and willing to make such arguments[,] and (3) whether [the nonparty] would offer any necessary elements to the proceeding that other parties would neglect.’ ” (Friends of Oceano Dunes v. California Coastal Commission (Cal. Ct. App. April 20, 2023: Case No. B320491) 307 Cal.Rptr.3d 495.) Generally, the burden of satisfying this test is “minimal;” it can be satisfied if the nonparty “shows that representation of [their] interest ‘may be’ inadequate.” (Trbovich v. United Mine Workers of America (1972) 404 U.S. 528, 538, fn. 10.) If the nonparty's “interest is ‘identical to that of one of the present parties,’ ” however, “ ‘a compelling showing [is] required to demonstrate inadequate representation.’ ” (Callahan v. Brookdale Senior Living Communities, Inc. (9th Cir. 2022) 42 F.4th 1013, 1020-1021.)

Proposed Intervenors argue they are focused solely on their members and the interest of the tenant population while the City is purportedly interested in “exercising and maintaining their power to legislate in the areas of rent control and eviction.” (Motion 13:7-22.) According to Proposed Intervenors, the City is also focused on “avoiding financial liability, and are faced with the challenge of balancing the interests of all their constituents, which includes both tenants and landlords alike.” (Motion 13:9-11.)

These purported differences are undeveloped and conclusory. Moreover, to the extent such “differences” exists, it is unclear how, if at all, these purported differences will manifest in the ligation such that Proposed Intervenors will not be adequately represented—the City’s interest and that of Proposed Intervenors is to uphold the ordinances. Despite (perhaps) different motivations, the City and Proposed Intervenors would make the same arguments about preemption—a purely legal issue. Proposed Intervenors are not better or uniquely situated to oppose Petitioner’s facial challenge to the ordinances.

Therefore, Proposed Intervenors have not demonstrated a conflict or misalignment between the City as to interests in litigation positions or interest in the outcome. (See e.g., Hodge v. Kirkpatrick Development, Inc. (2005) 130 Cal.App.4th 540, 555 [movant's interests were not adequately represented in underlying action where “the conflict between [the plaintiffs’] and [the movant's] interests in the outcome of the . . . lawsuit [was] palpable and real”].) Proposed Intervenors have not demonstrated they are entitled to intervene as a matter of right.

Nonetheless, the court may permit Proposed Intervenors to intervene under Code of Civil Procedure section 387, subdivision (d)(2). To intervene, Proposed Intervenors must show a “direct and immediate interest” in the subject matter of the action—an interest “of such a direct and immediate nature that the moving party ‘ “will either gain or lose by the direct legal operation and effect of the judgment.” ’ ” (City and County of San Francisco v. State of California (2005) 128 Cal.App.4th 1030, 1037.) Proposed Intervenors must also demonstrate that intervention will not enlarge the issues in the litigation, and the reasons for intervention outweigh any parties’ opposition. (Carlsbad Police Officers Association v. City of Carlsbad (2020) 49 Cal.App.5th 135, 148.)

Proposed Intervenors are organizations comprised of thousands of tenants affected by the ordinances. The court therefore finds Proposed Intervenors have a direct interest in the outcome of Petitioner’s challenge to the ordinances. That is, Proposed Intervenors are benefitted by the tenant-protection ordinances. If Petitioner is successful in this litigation, Proposed Intervenors will lose those protections.

It also appears allowing intervention will not enlarge the scope of this litigation. Petitioner’s issue is straightforward and legal—do the ordinances conflict with state law such that they are preempted? Nothing suggests Proposed Intervenors’ involvement in the litigation will result in new claims or legal theories.

Based on the foregoing, the motion to intervene is granted. Proposed Intervenors shall file their answer in intervention forthwith.

Petitioner,
Apartment Association of Los Angeles County, Inc., seeks a preliminary injunction
enjoining the City of Los Angeles from enforcing Ordinance 187763 and Ordinance
187764.

Petitioner’s
request for judicial notice (RJN) of Exhibits A through C is granted. (Evid.
Code,

The
City’s RJN of Exhibits A through K is granted. (Evid. Code, § 452, subd. (a),
(b), (c) and (h).)

The
City’s evidentiary objections are overruled except for objections 2 (as to “irreparably”
only), 3, 9, 10 and 13 which are sustained.

The
standards governing a preliminary injunction are well known. “[A] court will
deny a preliminary injunction unless there is a reasonable probability that the
plaintiff will be successful on the merits, but the granting of a preliminary
injunction does not amount to an adjudication of the merits.” (Beehan v.
Lido Isle Community Assn. (1977) 70 Cal.App.3d 858, 866.) “The function of
a preliminary injunction is the preservation of the status quo until a final
determination of the merits.” (Ibid.)

As
the parties recognize, “Trial courts traditionally consider and weigh two
factors in determining whether to issue a preliminary injunction. They are (1)
how likely it is that the moving party will prevail on the merits, and (2) the
relative harm the parties will suffer in the interim due to the issuance or
nonissuance of the injunction.” (Dodge, Warren & Peters Ins. Services,
Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1420.) “[T]he greater the . . . showing
on one, the less must be shown on the other to support an injunction.” (Ibid. [quoting Butt v. State of California, (1992) 4 Cal.4th 668, 678].) The
burden of proof is on the plaintiff as the moving party “to show all elements
necessary to support issuance of a preliminary injunction.” (O'Connell v.
Superior Court (2006) 141 Cal.App.4th 1452, 1481.)

Preliminary
injunctive relief requires the use of competent evidence to create a sufficient
factual showing on the grounds for relief. (See
e.g., Ancora-Citronelle Corp. v. Green (1974) 41 Cal.App.3d 146,
150.) A plaintiff seeking injunctive relief must also show the absence of an adequate
damages remedy at law. (Code Civ. Proc., § 526, subd. (a)(4).)

A
preliminary injunction ordinarily cannot take effect unless and until the petitioner
provides an undertaking for damages which the enjoined respondent may sustain
by reason of the injunction if the court finally decides the petitioner was not
entitled to the injunction. (See Code Civ. Proc., § 529, subd. (a); City of South San Francisco v. Cypress Lawn
Cemetery Assn. (1992) 11 Cal.App.4th 916, 920.)

Under
the California Constitution, “[a] county or city may make and enforce within
its limits all local, police, sanitary, and other ordinances and regulations
not in conflict with general [state] laws.” (Cal. Const., art. XI, § 7.)

Petitioner
brings this proceeding to challenge two ordinances adopted by the City Council
in February 2023—Ordinance No. 187763 and Ordinance No. 187764.

Petitioner’s claim is based upon preemption. “ ‘If
otherwise valid local legislation conflicts with state law, it is preempted by
such law and is void.’ ” (Sherwin-Williams Company v. City of Los Angeles (1993)
4 Cal.4th 893, 897 (Sherwin-Williams) [quoting Candid Enterprises,
Inc. v. Grossmont Union High School Dist. (1985) 39 Cal.3d 878, 885].) To
determine whether there is a “conflict” between local legislation such as the challenged
ordinances and state law, the court considers whether the local legislation “duplicates,
contradicts, or enters into an area fully occupied by general law, either
expressly or by legislative implication.” (Ibid. [cleaned up].)

Local legislation duplicates state law where it is
“coextensive therewith.” For example, in In re Portnoy (1942) 21 Cal.2d
237, 240, the Supreme Court found invalid a municipal ordinance where the
“entire text” of the ordinance could be found in the state law. The Supreme
Court invalidated the ordinance “to the extent of such duplication.” (Ibid.)

Local legislation is contradictory to state law
“when it is inimical thereto.”[1] (Sherwin-Williams,
supra, 4 Cal.4th at 897.) For example, in Ex Parte Daniels (1920)
183 Cal. 636, 641, the Supreme Court found a municipality’s motor vehicle speed
limit ordinance setting a rate lower than state law was in “direct conflict”
with state law and therefore invalid. (Id. at 637, 647-648.)

Local legislation enters into an area fully occupied
by state law when the Legislature has expressly or implicitly manifested its
intent to fully occupy the area. “Where the Legislature

has manifested an intention, expressly or by
implication, wholly to occupy the field . . . municipal power [to regulate in
that area] is lost.” (O’Connell v. City of Stockton (2007) 41 Cal.4th
1061, 1068 [quoting 8 Witkin, Summary of Cal. Law (10th ed. 2005)
Constitutional Law, § 986, p. 551].)

The Legislature expressly manifests its intent to
fully occupy the area with a clear declaration. For example, in 1981, the
Legislature made clear its intent to regulate the sale of spray paint:

“ ‘It is the intent of the Legislature in enacting
this act to preempt all local government regulations relating to sales and
possession of aerosol containers of paint . . . .’ ” (Sherwin-Williams,
supra, 4 Cal.4th at 900 [citation omitted].)

The Legislature impliedly expresses its intent to
fully occupy the area in light of the

“following indicia of intent: (1) the subject matter has been so fully
and completely covered by general law as to clearly indicate that it has become
exclusively a matter of state concern; (2) the subject matter has been so fully
and completely covered by general law as to clearly indicate that it has become
exclusively a matter of state concern; or (3) the subject matter has been
partially covered by general law, and the subject is of such a nature that the
adverse effect of a local ordinance on the transient citizens of the state
outweighs the possible benefit to the locality.” (Id. at 898 [internal
quotation marks and citation omitted].)

Petitioner
contends both ordinances are preempted by state law. The ordinances became
effective March 27, 2023.

On
January 20, 2023, the City Council adopted the Just Cause for Eviction
Ordinance of the City of Los Angeles (Just Cause Ordinance). The Just Cause
Ordinance prohibits evictions without a just cause. (City’s RJN Ex. E, p. 3.)[2]

On
February 3, 2023, the City Council adopted Ordinance No. 187763. The ordinance amended
the RSO and the Just Cause Ordinance by restricting a landlord’s ability to
bring an unlawful detainer until the tenant surpasses a threshold amount of
unpaid rent—“one month of fair market rent for the Los Angeles metro area set
annually by the U.S. Department of Housing and Urban Development for an
equivalent sized rental unit as that occupied by the tenant.” (City’s RJN, Ex. G.)

On
February 7, 2023, the City Council adopted Ordinance No. 187764. The ordinance adds
a provision to the Just Cause Ordinance requiring landlords of rental units not
covered by the RSO to pay “relocation assistance” to vacating tenants following
a proposed rental increase. (City’s RJN, Ex. H.)

As
noted, Ordinance No. 187764 adds a new provision to the Just Cause Ordinance requiring
landlords of rental units not covered by the RSO to pay “relocation assistance”
to tenants who choose to end their tenancy following a proposed rent increase
“that exceeds the lesser of (1) the Consumer Price Index – All Urban Consumers,
plus five percent, or (2) ten percent.” (Verified Pet. ¶ 14; Pet.’s RJN, Ex.
A.) Under the ordinance, the amount of the required relocation assistance is
equal to three times the fair market rent in the Los Angeles Metro area for a
rental unit of a similar size, plus $1,411 in moving costs. (Verified Pet. ¶
14; Pet.’s RJN, Ex. A.)

Petitioner
argues Ordinance No. 188764 is expressly preempted by the Costa-Hawkins Act (Civ.
Code, § 1954.50, et seq.). Petitioner asserts the ordinance directly conflicts
with Civil Code section 1954.52, subdivision (a) which provides in pertinent part:

“(a) Notwithstanding any
other provision of law, an owner of residential real property may establish
the initial and all subsequent rental rates for a dwelling or a unit about
which any of the following is true:

(2) It has already been
exempt from the residential rent control ordinance of a public entity on or
before February 1, 1995, pursuant to a local exemption for newly constructed
units.

Petitioner
contends Ordinance No. 188764 prevents landlords from exercising their right
under the Costa-Hawkins Act “to establish ‘all subsequent rental rates for a
dwelling or unit’ by making it prohibitively expensive to do so.” (Motion 12:21-23.)
That is, Petitioner argues the ordinance discourages landlords from increasing rents
over a certain amount by imposing “substantial” relocation benefits as a form
of penalty for doing so.

Petitioner
also argues the ordinance conflicts with state law because the ordinance penalizes
landlords for raising rents—conduct state law expressly allows. (See San
Francisco Apartment Assn. v. City and County of San Francisco (2016) 3
Cal.App.5th 463, 477. See also Palmer/Sixth Street Properties, L.P. v. City
of Los Angeles (2009) 175 Cal.App.4th 1396, 1411.) A conflict between local and state law is
created even where “the ordinance does not directly impose a hard limitation or
‘cap’ on the amount rent can be increased, it accomplishes the same purpose by
financially penalizing rental housing providers who attempt to raise rents
above the specified limits.” (Pet., ¶¶ 25-27; Ex Parte 14:24-16:14.) Local ordinances
may not subvert the purpose of the Costa-Hawkins Act. (See Bullard v. San
Francisco Residential Rent Stabilization Bd. (2003) 106 Cal.App.4th 488,
492.)

The
City argues Petitioner mischaracterizes the ordinance. The City enacted the
ordinance as an eviction control. The City notes it is well-established that
local government has the authority to “regulate or monitor the grounds for
eviction.” (Civ. Code, §§ 1954.52, subd. (c). [“Nothing in this section shall
be construed to affect the authority of a public entity that may otherwise
exist to regulate or monitor the basis for eviction.”] See also 1954.53 subd.
(e). [“Nothing in this section shall be construed to affect the authority of a
public entity that may otherwise exist to regulate or monitor the grounds for
eviction.”])

First,
the court notes Ordinance No. 187764 does not—on its face—regulate the amounts
a landlord may charge for rent. That is, there is no limit to the rent increases
a landlord may wish to charge. Thus, the ordinance does not conflict with Civil
Code section 1954.52, subdivision (a) because a landlord may continue to “establish
the initial and all subsequent rental rates” for those units specified in Civil
Code section 1954.52, subdivision (a).

Petitioner
contends, however, Ordinance No. 187664 conflicts with state law because it penalizes
conduct state law allows. (See Bullard v. San Francisco Residential Rent
Stabilization Bd., supra, 106 Cal.App.4th at 492.) Petitioner argues “the
City has . . . attempted to prevent property owners from exercising their right
under the [Costa-Hawkins] Act to establish ‘all subsequent rental rates for a
dwelling or unit’ by making it prohibitively expensive to do so.” (Motion 12:21-23.)

The
City explains it enacted Ordinance No. 187664 to avoid landlords circumventing
the Just Cause Ordinance which limits no-fault evictions. Specifically, at the
time it adopted the ordinance, the City found:

“While the
adoption of a Just Cause ordinance will extend protections from arbitrary
eviction to all tenants citywide, tenants in unregulated units (not subject to
the RSO nor the Tenant Protections Act of 2019) may be economically displaced
when their landlords impose high rent increases that the tenants cannot afford.
In these cases, tenants who cannot afford the rent increases have no choice but
to vacate their homes.” (City’s RJN Ex. J, p. 4.)

San
Francisco Apartment Assn. v. City and County of San Francisco (2022) 74
Cal.App.5th 288 is instructive but not controlling. There the Court
addressed a challenge to a ordinance prohibiting landlords from using bad
faith, pretextual rent increases to coerce tenants to vacate units exempt from
rent control. The Court determined the ordinance was a valid exercise of local authority
to regulate grounds for evictions. The Court rejected the landlord’s argument the
ordinance indirectly limited the amount of rent a landlord could charge in
contravention of state law. The Court explained the ordinance “do[es] not
prevent landlords from earning rent as determined by the free market, and it
imposes no caps to ensure the availability of affordable rental housing” but,
instead, “prohibit[s] a landlord from designating as rent an artificial sky-high
amount that the landlord does not intend to collect but intends to cause the
tenant to vacate the unit voluntarily or by eviction for nonpayment of the
unrealistic figure.” (Id. at 292.) “Costa Hawkins does not protect a
landlord’s right to use a pretextual rent increase to avoid lawfully imposed
local eviction regulations.” (Ibid.)

Petitioner
distinguishes San Francisco Apartment Assn. v. City and County of San
Francisco, supra, 74 Cal.App.5th at 288 by characterizing the ordinance
as applying to bad-faith “pretextual” rent increases imposed “in an effort to
avoid eviction laws while forcing the tenant to vacate.” (Id. at 292-294
[“it is not reasonable to conclude that the Legislature intended to authorize a
pretextual rent increase imposed, not for the purpose of collecting additional
rent, but to remove tenants in circumvention of applicable local eviction
regulations”].)

The
City argues Ordinance No. 187664 is about relocation assistance for tenants—not
capping rents. The City asserts: “A landlord covered by the Costa-Hawkins Act
may increase rents to whatever the market will bear. The ordinance does not
prevent a tenant from accepting that rent increase. It requires payment of relocation
assistance only when the ‘tenant elects to relinquish their tenancy’ following
a large rent increase.” (Opposition 14:5-8.)

Legislative
history aids the City’s argument. Relocation assistance—in the face of a high
rent increase—safeguards “tenants from economic displacement due to high rent
increases for non-RSO units, . . . .” (City RJN, Ex. J, p. 4.) It continues:

“Additional
protections are needed to close a loophole that allows tenants in non-RSO units
to be forced out through large rent increases amounting to a constructive
eviction of the tenant, with no allowance for relocation. Relocation assistance
based on economic displacement would provide renters who are not protected by the
RSO or State law with the financial means to secure alternative housing when
forced to relocate due to high rent increases, . . . .” (City RJN, Ex. J, p.
5.)

Petitioner’s theory the ordinance penalizes a landlord for acts
permitted by state law cannot be disregarded as completely without merit; a
landlord wishing to raise rents beyond a regulated cap incurs a substantial relocation
expense. It appears, however, the focus of the ordinance is, as claimed by the
City, relocation fees where there is a constructive eviction. Under the RSO and
Just Cause Ordinance, a no-fault eviction requires a landlord to pay relocation
fees. (See Los Angeles Municipal Code, §§ 151.09.G, 151.30.E, 165.03.H.) A
landlord who has the authority to raise rents to any level may displace a tenant
through a substantial rent increase—a constructive eviction that avoids the
Just Cause Ordinance. Ordinance No. 187664 does not preclude the landlord from
raising the rent to whatever amount chosen by the landlord. It does, however,
consistent with the RSO and Just Cause Ordinance, require the landlord to pay
relocation fees as if the tenant vacated the unit through a no-fault eviction.
To the extent the ordinance addresses constructive evictions and dislocation of
tenants, it regulates the grounds for eviction, does not regulate rent and is not
in conflict with state law.

Based on the foregoing, the court finds Petitioner has some
ability to prevail on the merits of its challenge to Ordinance No. 187664. The
likelihood of Petitioner’s success, however, is not substantial.

State
law expressly provides that a landlord may serve a three-day notice to pay rent
or quit “at any time within one year after the rent becomes due . . . .” (Code
Civ. Proc., § 1161.) The three-day notice initiates the process of bringing an
unlawful detainer action.

Ordinance
No. 187763 amended the RSO and the Just Cause Ordinance. Under the ordinance,
merely owing rent is not a ground for a tenant’s eviction. Instead, for a
landlord to proceed with an eviction, a tenant must owe the landlord more than
“one month of fair market rent for the Los Angeles metro area set annually by
the U.S. Department of Housing and Urban Development for an equivalent sized
rental unit as that occupied by the tenant.” (City’s RJN Ex. G; Los Angeles
Municipal Code §§ 151.09.A.1; 165.03.A.)

Petitioner
argues Ordinance No. 188763 is expressly preempted by the state’s statutes
addressing unlawful detainer actions. Petitioner argues under state law, a
landlord’s right to serve a three-day notice is not dependent on the amount of
the tenant’s default. Accordingly, Petitioner contends Ordinance No. 187763
conflicts with state law by requiring past due rent to exceed a threshold before
a landlord may serve a notice to pay rent or quit the premises thereby “unlawfully
regulat[ing] the timing of unlawful detainer actions based on
non-payment of rent . . . .” (Motion 14:16-17.) Petitioner argues the ordinance
directly conflicts with state law by prohibiting landlords, under many if not
most circumstances, from serving the three-day notice authorized by state law
immediately after any amount of rent becomes due.

The
relevant framework for whether the ordinance is preempted by the state’s
unlawful detainer statutes is set forth in Birkenfeld v. City of Berkeley
(1976) 17 Cal.3d 129 (Birkenfeld).

In
Birkenfeld, the plaintiff argued a local law limiting the grounds for
eviction of tenants in rent-controlled apartments was preempted by the state’s unlawful
detainer statutes. (Id. at 136.) The Supreme Court rejected the argument.
The Supreme Court reasoned:

“The purpose
of the unlawful detainer statutes is procedural. The statutes implement the
landlord's property rights by permitting him to recover possession once the
consensual basis for the tenant's occupancy is at an end. In contrast the
charter amendment's elimination of particular grounds for eviction is a
limitation upon the landlord's property rights under the police power, giving
rise to a substantive ground of defense in unlawful detainer proceedings. The
mere fact that a city's exercise of the police power creates such a defense
does not bring it into conflict with the state's statutory scheme. . . . [T]he
statutory remedies for recovery of possession and of unpaid rent [citations] do
not preclude a defense based on municipal rent control legislation enacted
pursuant to the police power imposing rent ceilings and limiting the grounds
for eviction for the purpose of enforcing those rent ceilings.” (Id. at 149.)

Under
Birkenfeld, “municipalities may by ordinance limit the substantive
grounds for eviction by specifying that a landlord may gain possession of a
rental unit only on certain limited grounds. [Citations.] But they may not
procedurally impair the summary eviction scheme set forth in the unlawful
detainer statutes . . . .” (Rental Housing Assn. of Northern Alameda County
v. City of Oakland (2009) 171 Cal.App.4th 741, 754 (Rental Housing Assn.)
[emphasis added].)

Petitioner
acknowledges Birkenfeld and Rental Housing Assn. Nonetheless,
Petitioner contends the “the City cites no authority that holds or suggests a
municipality may go so far as to remove a default in the payment of rent as a
substantive basis for eviction.” (Reply 7:13-14.)

The
law permits the City under its police powers to limit the substantive grounds
for eviction. The City has the authority to determine whether unpaid rent is a
ground for eviction, or in this case, the amount of unpaid rent that
constitutes grounds for eviction. Such control is about the substantive basis
for eviction. It is separate and distinct from the procedural process that
occurs after a valid ground for eviction arises. As soon as the substantive
threshold is crossed, the landlord is free to serve a three-day notice to pay
or quit the premises.

The
court finds Petitioner has not demonstrated a likelihood of success Ordinance
187763 is preempted by the state’s unlawful detainer statutes.

Based
on the foregoing, the court finds Petitioner has not demonstrated a strong probability
of prevailing on the merits of its challenge to both ordinances. Nonetheless, Petitioner
has shown some ability to prevail on its challenge to Ordinance No. 187664.

The
second part of the preliminary injunction analysis requires the court to
evaluate the harm the plaintiff is likely to sustain if the preliminary
injunction is denied compared to the harm the defendant is likely to suffer if
the injunction is issued. (IT Corp. v. County of Imperial (1983) 35
Cal.3d 63, 69-70.) “However, ‘[a] trial court may not grant a preliminary
injunction, regardless of the balance of interim harm, unless there is some
possibility that the plaintiff would ultimately prevail on the merits of the
claim.’ ” (Law School Admission Council, Inc. v. State of California (2014)
222 Cal.App.4th 1265, 1280 [quoting Butt v. State of California (1992)
4 Cal.4th at 678].)

Petitioner
notes its members would be irreparable harmed by the enforcement of both ordinances
if the preliminary injunction does not issue. As to Ordinance No. 187764, if any
of Petitioner’s members wish to raise rental rates over the limits specified,
those landlords will either forego such increases or pay thousands of dollars
to any tenant who decides to vacate a unit in the face of the rent increase. As
to Ordinance No. 187763, Petitioner’s members will be prevented from timely
collecting overdue rent and/or recovering possession of their properties. Petitioner
also argues landlords are rarely successful in collecting back rent from
tenants once the tenant is more than one month delinquent. (Yukelson Decl., ¶
6.)

Petitioner’s
members’ injuries are monetary only. None of the evidence introduced by Petitioner
suggests any landlord is in imminent danger of defaulting on mortgages or
recurring expenses.

Generally,
harm is not considered irreparable if damages will compensate an injured
plaintiff adequately. (Cf. Department of Fish & Game v.
Anderson-Cottonwood Irrigation Dist. (1992) 8 Cal.App.4th 1554, 1564-1565.
[“The usual statement of this factor is in terms of ‘inadequacy of the legal
remedy’ or, even more narrowly, ‘inadequacy of damages.’ The idea, which dates
from the time of the early courts of chancery, is that an injunction is an
unusual or extraordinary equitable remedy which will not be granted if the
remedy at law (usually damages) will adequately compensate the injured
plaintiff. [Citation.] [¶] Our statutes cover this factor in the following
language: ‘When pecuniary compensation would not afford adequate relief.’ ”])

The
City reports if the court were to grant the preliminary injunction there will
be a significant number of evictions. Petitioner has already identified 176
tenants whom its members would evict but for the ordinances. (See Amareld Decl.
¶ 5; Gurfinkel Decl. ¶ 3; Gorokhovsky ¶ 5.)

In
contrast to monetary injuries, the City argues eviction constitutes a real,
irreparable harm to those evicted. (See LAMC § 165.01 (“Displacement through
arbitrary evictions affects the public health, safety and welfare of Los
Angeles residents.”) Further, the City notes its legislative findings that the
City is current in the midst of a housing shortage crisis resulting in homelessness,
and the housing crisis has been exacerbated by “rent gouging.” (See Civ. Code,

§
1947.12, subd. (m)(1). [“The Legislature finds and declares that the unique
circumstances of the current housing crisis require a statewide response to
address rent gouging by establishing statewide limitations on gross rental rate
increases.”]; see also City’s RJN Exs. L, M.)

Based on a balance of Petitioner’s likelihood of
success on the merits of its claims and consideration of the parties’ competing
harms, the court finds Petitioner has not demonstrated it is entitled to a preliminary
injunction during the pendency of this litigation. The motion is therefore
denied.

[1] Conflict
does not merely refer to a conflict in language. It can refer to a conflict of
jurisdiction where the Legislature has adopted a general scheme for the
regulation of a particular subject. (American Financial Services Assn. v.
City of Oakland (2005) 34 Cal.4th 1239, 1252-1253.) The conflict of
jurisdiction is similar to a finding the Legislature implicitly intended to fully
occupy the subject area.

[2]
The City notes Just Cause Ordinance protections are similar to those provided
by the City’s Rent Stabilization Ordinance (RSO). The Just Cause Ordinance,
however, applies to a wider range of rental units within the City. (City’s RJN
Ex. F; LAMC §§ 165.00, 165.02, 165.03.)