Tenant-Screening Firm Accused of Circumventing Law : Housing: Assemblyman Terry Friedman says the U. D. Registry’s reports based on eviction case filings are an attempt to bypass new legislation. The company cites the First Amendment.

A Van Nuys tenant-screening firm whose policies have spurred lawsuits and state legislation aimed at protecting renters from being unfairly denied housing is deliberately flouting the intent of the law, according to a state assemblyman and housing advocates.

The aim of the law, which became effective Jan. 1, was to make it illegal for firms such as the U. D. Registry to continue reporting to landlords pending or dismissed eviction actions involving potential tenants. Such firms work much as credit reporting agencies do but focus specifically on an individual’s performance as a tenant.

With a few exceptions, the law limited the reporting of eviction cases to those actions in which the tenant’s previous landlord had prevailed.

But the registry, which claims to have more than 500,000 apartment owners as clients, is said to be trying to get around the restrictions in the new law. Now, instead of reporting that a potential tenant had been the target of an eviction action, the registry only recommends to its clients that the applicant for an apartment be rejected--without providing the basis for the recommendation.

“This is an outrageous attempt to circumvent the law, and I will do everything I can . . . to stop them,” said Assemblyman Terry B. Friedman (D-Los Angeles), who sponsored AB 1796, the bill that limits the use of such information.

“They’ve made clear . . . that they do not intend to follow the law and will do all they can to avoid it,” Friedman said, referring to thD. Registry. “That is unacceptable . . . and they deserve . . . whatever legal action is brought against them for it.”

He said his bill was intended to stop the blacklisting of a tenant merely because a landlord filed an eviction case. “Simply the filing of an eviction action should not prejudice a tenant’s ability to rent an apartment, and yet U. D. Registry was routinely including that in their reports.”

Asked about Friedman’s claim that the registry was not complying with the law, attorney Sumner Cotton, who represents the company, said the registry “is operating strictly within the law. Always has and always will.”

Cotton has filed a lawsuit in Los Angeles Superior Court on behalf of the registry, arguing that the legislation is unconstitutional because it violates the First Amendment right of free speech. He said court records reflecting evictions are available to the public and should be available for use by his clients as well.

He sought a preliminary injunction to block implementation of the law, but was unsuccessful.

“The right to talk about the public’s business is a very important right,” Cotton said. “What Mr. Friedman is trying to do is so totalitarian, so dictatorial, you might think he came out of a communist state.”

The 27,000-member Apartment Assn. of Greater Los Angeles also has filed a lawsuit claiming that the law is unconstitutional. Before the new law, the association supplied its members with reports about potential tenants that included eviction information that is now restricted.

Stephen L. Jones, an attorney for the association, said the U.S. Supreme Court has ruled in an unrelated case involving a newspaper that disclosing information lawfully obtained from court files cannot be restricted.

Besides, he said, blocking such information would prevent apartment owners from receiving facts they need to conduct business profitably.

“In the real world, what happens with an eviction is that the landlord wants to get the existing tenant out,” Jones said. What often happens is that “if a tenant leaves in the middle of the eviction proceedings, the landlord dismisses the lawsuit,” he said.

“The fact that these actions have been filed, even though there has not been a judgment against a tenant, is very important information for a landlord,” he said.

But David Pallack, an attorney with San Fernando Valley Neighborhood Legal Services, said the law is constitutional because the information being supplied by tenant screening services is considered commercial speech and does not enjoy the same broad protections as other types of expression. In addition, he said, the eviction information that was reported before the new law led landlords to reach unfair conclusions.

In a brief he filed as an intervenor in opposition to the lawsuits by thD. Registry and the apartment association, Pallack cited the example of Ruth Cisneros, a client from Burbank who was denied several apartments during a four-year period based on reports of dismissed evictions supplied by the registry.

The eviction attempts against Cisneros, Pallack said, were by a landlord who was trying to rid his building of tenants whose rent payments were publicly subsidized and not because she ever fell behind in her rent. Without the protections of Friedman’s legislation, which Pallack helped write, those eviction cases would still be showing up on Cisneros’ record and she might still be having difficulty renting apartments because of them, Pallack said.

He said the registry’s practices since the law went into effect amount to “a little charade.”

A letter registry owner Harvey Saltz sent in January to the firm’s clients states that eviction cases will not be reported because of the Friedman bill.

“However, it is lawful for UDR to give its opinion as to whether you should accept or reject an applicant,” the letter states. “Since it is the overwhelming policy of UDR members to reject anyone if they have been involved in an eviction case, UDR has adopted that standard for its decisions.

“Therefore,” the letter continues, “if UDR sees an eviction case that cannot be reported, rather than not tell you anything at all, UDR will inform you of its decision to reject this applicant.”

“What they’re doing is telling them about these cases they’re not supposed to be telling them about,” Pallack said.

Cotton said his client, and other agencies that are responding in similar ways, are abiding by the law. But, he said, “to keep completely quiet is a chilling thing, which we are attacking,” both with lawsuits and by making recommendations about potential tenants.

Grady Robertson, president of the Robertson Co. tenant-screening firm based in San Diego, said his firm is honoring the law’s restrictions while serving its clients’ needs for information by obtaining potential tenants’ rent-payment history directly from their previous landlords. “You can still get the information you need to,” Robertson said.

He said that Saltz and the U. D. Registry are trying to get around the law. “When Harvey reports a reject, you know exactly what he is talking about . . . and I don’t think that was the intention of the Legislature.”