Landlord-tenant dispute is war only lawmakers can resolve, says US judge

Calling the dispute a war that only the Legislature can resolve, a federal judge denied a bid to halt Los Angeles' coronavirus-related eviction moratorium, finding although it substantially affects landlords' contract rights, the Apartment Association of Greater Los Angeles did not demonstrate a likelihood of irreparable harm, or that the balance of the equities and public interest weigh in favor of a preliminary injunction.

While Senior U.S. District Judge Dean D. Pregerson denied the landlords' preliminary injunction request Friday, he expressed great sympathy for both sides, saying they were forced into an economic war by government shutdown orders due to the pandemic. In a passionately written, 28-page order, Pregerson said lawmakers, and not the court nor city ordinances, should solve the economic calamity in which landlords and tenants find themselves. Business closures caused many tenants to lose their jobs and owners face losing their property if they can't collect due rent.

"Our citizens should not have to fight each other to avoid economic and personal ruin," Pregerson wrote. "Courts are an imperfect tool to resolve such conflicts. So too are ordinances and statutes that shift economic burdens from one group to another."

"The court respectfully implores our lawmakers to treat this calamity with the attention it deserves," Pregerson continued. "It is, but for the shooting, a war in every real sense. Hundreds of thousands of tenants pitted against tens of thousands of landlords -- that is the tragedy that brings us here. It is the court's reverent hope, expressed with great respect for the magnitude of the task at hand, that our leaders, and not the courts, lead us to a speedy and fair solution."

Filed by the apartment association in June, the lawsuit seeks to halt the emergency eviction moratorium implemented by Mayor Eric Garcetti and the LA City Council in an emergency ordinance banning evictions, charging of late fees or annual rent increases for at least a year after the declared end of the health crisis. The association argues the ordinance interferes with contracts between landlords and tenants, and violates landlords' rights under the contract and due process clauses of the U.S. Constitution. Apartment Association of Los Angeles County, Inc. v. City of Los Angeles, 20-cv-05193 (C.D. Cal., led June 11, 2020).

Tenants' rights advocates say pandemic-related job loss will lead to a tsunami of evictions that will come crashing down on the court system once moratoriums are lifted and if the city ordinance is enjoined, it will lead to an increase in homelessness. Over 16 million California households have lost employment income as a result of the coronavirus, according to the U.S. Census Bureau cited in Pregerson's order.

City Attorney Mike Feuer applauded the ruling Friday, calling it a "vital victory," for tenants in a press statement.

"This was a vital victory, because our eviction moratorium is preventing thousands of tenants from losing their homes in the midst of the pandemic," said Feuer. "Looking ahead, I renew my call for our federal government to provide long-awaited aid to COVID-affected tenants, so they can pay their landlords and remain housed while our nation's jobs market recovers."

Represented by Douglas Dennington of Rutan & Tucker LLP, landlords asked Pregerson to preliminarily halt implementation of the city ordinance because, among other things, the city refuses to defer to the statewide statute as other cities have. While landlords certainly do not endorse the statewide eviction ban enacted by Gov. Gavin Newsom in September, Dennington said, it at least offers some protections. Under AB 3088, tenants cannot be evicted for nonpayment of rent due between Sept. 1, 2020 and Jan. 31, 2021 if they sign declarations of COVID-19-related financial distress under penalty of perjury and pay 25% of that rent by Jan. 31, 2021.

Although monetary losses alone cannot, in this context, constitute irreparable harm, foreclosure theoretically could, Pregerson said, responding to the association's irreparable harm argument. However, after the association failed to raise substantial examples of its landlord members in serious risk of foreclosure, Pregerson said the association failed to demonstrate a likelihood, "as opposed to a mere possibility," that landlords would be in danger of losing their property to foreclosure if the ordinance were not enjoined.

The association "has admittedly submitted declarations from only 'a few' of its member landlords, only two of whom make any reference to mortgage difficulties," Pregerson wrote.

Faizah Malik of Public Counsel, who represents the movant in the suit -- a tenants' rights group, called Strategic Actions for a Just Economy -- said in a statement Monday that the city's ordinances have been crucial to keeping tenants stably housed during the pandemic and preventing the spread of the virus.

"The governing bodies of Los Angeles have a responsibility to protect the most vulnerable among us during the ongoing COVID-19 pandemic, where having housing is a matter of life or death," Malik said. "We're pleased with the court's ruling in favor of the health and safety of all residents in the city."

Dennington was not available for comment Monday.