GALLAND V. CLOVIS

Recently, on February 5, 2001, the California Supreme Court issued its decision in the case of Galland v. Clovis. The decision overturns an award by the trial court of approximately $1,000,000 against the City of Clovis for its unfair implementation of its rent review ordinance. Instead, the matter is remanded back to the Fresno Superior Court and the Clovis City Council for yet more evidentiary hearings and administrative proceedings. This resolution is very disheartening to everyone who is or may be subject to the arbitrary exercise of power by an administrative body. And it is certainly depressing to all landlords who own property in a rent controlled environment. Prior to the Supreme Court decision, the Gallands had succeeded before both the trial court and the Fifth District Appellate Court in establishing a landlord’s right to sue a city for damages under the Federal Civil Rights Act (42 USC 1983), where the City violates the landlord’s due process rights by subjecting it to arbitrary and irrational rent review proceedings. Put briefly, Galland stood for the proposition that a City that did not treat a landlord fairly in the rent control process could be held accountable. In the Gallands’ case, they had been subject to rent review proceedings that cost over $100,000 to review and then deny a $6.00 increase. The City had refused to provide the administrative record and thus thwarted judicial review of the proceedings for years, all the while forcing the Gallands to participate in additional costly rent review proceedings on a yearly basis. Thus, when both the trial court and the Fifth Appellate District held that the City had to pay for the damages it inflicted on the Gallands in the name of rent regulation, it was a great victory, not only for landlords, but for everyone who may become involved with local administrative agencies, such as planning commissions or city councils, etc.

In my opinion, the California Supreme Court decision managed to overturn the decisions of the trial and appellate courts only by ignoring and mischaracterizing the actual facts and by means of an illogical interpretation of the law. It is what is called a "result-oriented" decision. This is the same thing that the City of Clovis did in its administrative decisions that were the basis of the Gallands’ lawsuit. Time and again the Commission would ignore the facts and the law in order to arrive at a decision that it believed was "just." Naturally, for the Rent Review Commission "just" always meant a rent increase that was less than the increase requested by the landlord, even where that increase was substantially less than the inflation rate and was justified by increased costs and decreased profits. For the California Supreme Court "just" means a decision that protects the City of Clovis and its taxpayers from having to pay for its Constitutional violations. No doubt the Supreme Court believes that this is necessary for the greater public good of protecting mobile home park tenants everywhere.

Although the impulse to do "justice" derives no doubt from the better part of human nature, it is a very dangerous thing when it is unconstrained by an objective structure and substantive guarantee designed to ensure fair treatment for everyone. This objective structure and substantive guarantee are what we call due process. Although due process is often discussed by the Courts in abstract and technical terms, it is not an abstract and technical concept. Basic government classes in high school teach everyone that the founding fathers included a guarantee of due process to ensure that citizens would not be subject to disparate treatment by the government for political, religious or discriminatory reasons.

The due process clause is enforced largely by the Courts and I believe that in general Courts defend the right to due process with vigor. However, cases involving rent control and other local administrative issues that invariably involve local politics are the exception to that rule.

I believe that the implicit message of Galland and virtually every other rent control and land use case considered by the current California Supreme Court is that local agencies are not subject to due process constraints, at least in any meaningful way. This exemption frees these agencies to do "justice" as it is interpreted by the individual agencies in light of local politics. In Clovis, for example, the park manager was informed that a candidate for the City Counsel had appeared at the mobile home park for a town hall session and had promised that if he were elected there would be no new rent increases. Subsequently, the candidate was elected and the $6.00 increase was denied after rent review proceedings that cost over $100,000, as mentioned above. I am sure that the candidate felt good that he was able to do "justice" for the tenants.

I first became involved in this case in the middle of the proceedings over the $6.00 increase. When I was first told of the case I had some qualms about being involved in raising the rent of senior citizens who lived in a mobile home park. Even though the increase was only $6.00, I at first assumed that there would not be a battle if the increase was not meaningful to the tenants. I can understand how the initial reaction to this factual scenario would be to assume that the landlord is the bad guy and the tenants were the good guys. However, this assumption was not true.

I soon learned that the battle was not fired by any true concern over hardship on the part of the tenants, but that it was about political power. The tenants opposed the increase because they could, not because it would impose any hardship or because they really thought it was too high, and the Rent Review Commission denied the increase based on illogical reasoning because it thought it was doing "justice" and the City Council affirmed the Commission’s decision because it could, or believed it could, without incurring any liability to the Gallands. It turns out the City was right. Throughout the long process of this case, the Gallands’ position was always that the City was enforcing the rent review ordinance in an unreasonable fashion. We never cast the issue as an attack on rent control itself. Instead we argued that rent control could be enforced in a reasonable fashion, but that the City was refusing to do so.

After twelve years of litigating this case and becoming immersed in all the rent control cases decided in the past twenty years, I no longer believe that is true. I do not now believe that it is possible to enforce rent control in a reasonable or fair manner, due to the fact that it gives local political bodies the power to do "justice" without having to pay the bill for it. As Justice Scalia of the United States Supreme Court has noted, local governments can provide low cost housing in a politically popular manner by having individual landlords foot the bill rather than disburse the costs equally among the members of the community via taxes. City councils and rent boards are made up of human beings who cannot resist this power to do good without paying for it. If it is necessary to make inconsistent and illogical rulings in order to obtain this "just result" they will do it. And they will pretend that they are not doing it. And now in Galland, the California Supreme Court is doing it too.

These kind of "result oriented" and illogical decisions do violence not only to the individual landlord involved but to the integrity of the judicial system itself. Due process must be vigorously protected all of the time, not just must most of the time, even if the result does not comport with an individual notion of "justice." In deliberately refusing to enforce the Gallands’ rights to be treated fairly by the government, the California Supreme Court has failed not just the Gallands, but everyone in the State, landowners and tenants alike.