Judge Refuses to Completely Dismiss Challenge to Santa Monica Rent Law

Ruling on a lawsuit aimed at overturning Santa Monica’s tough rent control law, a federal judge Monday threw out 10 of 15 claims made by attorneys for a 90-year-old landlord but denied the city’s motion to dismiss the challenge altogether.

The action by U.S. District Judge Ronald Lew allows further arguments on the broad contention of the suit that Santa Monica’s rent control law is unconstitutional because it deprives landlords of property rights.

A recently formed statewide group of landlords is sponsoring the suit on behalf of apartment owner Lena Schnuck and hopes to win a ruling that can be used as ammunition to topple rent control laws elsewhere.

Santa Monica’s law--considered one of the toughest in the nation--has survived other legal challenges. But the landlords’ group, the Foundation for the Defense of Free Enterprise, is counting on a different outcome because of a conservative U.S. Supreme Court, which recently allowed a challenge to Santa Barbara’s mobile-home rent control law to go to trial.

City officials acknowledge that, in Schnuck, who owns an eight-unit apartment building, the landlords picked a sympathetic figure to bring the legal challenge.

According to the suit, Schnuck lives in one of the building’s two-level apartments but needs to move into a one-level apartment because of a stroke she suffered last year. The suit complains that the rent control law will not let her evict the tenant now in the one-level unit.

Under Santa Monica’s law, a landlord cannot evict a tenant to occupy that tenant’s apartment if the landlord already lives in the building.

The suit alleges that the rent control law constitutes an illegal “taking” of the landlord’s property by the government without “just compensation,” in violation of the Fifth and 14th amendments.

Schnuck’s property has been devalued 40% to 50% because of rent control, her lawyer, Sherman Stacey, argued in a hearing before Lew.

But citing a recent Supreme Court decision upholding San Jose’s rent control law, Santa Monica Deputy City Atty. Barry A. Rosenbaum contended that rent control does not constitute a “taking” because landlords can collect rent and are allowed to evict tenants under certain rules.

The Schnuck case is “simply a convenient vehicle” for launching “innumerable constitutional challenges” that have already been rejected in the courts, he said.

In dismissing some of the suit’s counts, Lew said they were either redundant or would be difficult to prove in a trial, such as one claim that the Rent Control Board is biased. He gave Schnuck’s lawyers 30 days to amend and refile the dismissed counts.

Both sides called the ruling a victory.