3 Cal. App. 5th 463
Cal. Ct. App.2016Background
- San Francisco amended Planning Code §317(e)(4) in 2013 to bar the Planning Commission from approving a residential "merger" permit for any unit where a tenant was evicted for certain no-fault reasons if the eviction notice was served within 10 years before the merger application; plaintiffs challenge only application to Ellis Act evictions.
- The Ellis Act (Gov. Code §7060 et seq.) grants property owners the absolute right to withdraw residential units from the rental market (i.e., exit the rental business), while also preserving certain local land‑use powers.
- Plaintiffs (SFAA, CBH, SFAR) sued the City and County of San Francisco seeking writ and injunction, arguing §317(e)(4) penalizes landlords for exercising Ellis Act rights and is therefore preempted.
- Trial court granted the writ, holding §317(e)(4) facially invalid as applied to Ellis Act evictions and enjoined enforcement; City appealed and challenged plaintiffs’ associational standing and the facial invalidity ruling.
- The Court of Appeal affirmed: (1) plaintiffs have associational standing based on sworn declarations showing members would be directly affected; (2) §317(e)(4)’s 10‑year merger ban, as applied to Ellis Act withdrawals, conflicts with and is preempted by the Ellis Act and is facially invalid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Associational standing | Organizations’ members are directly harmed by §317(e)(4) and thus organizations can sue | Plaintiffs failed to show members are "beneficially interested" or would have standing individually | Plaintiffs established associational standing with declarations showing members own/operate many affected units; standing affirmed |
| Preemption — conflict with Ellis Act | §317(e)(4) penalizes landlords who withdraw units (including under Ellis) by forbidding mergers for 10 years, thus imposing a "prohibitive price" on exiting the rental business | Ordinance regulates land use (not eviction rights), applies to multiple no‑fault evictions, and does not condition the right to leave the rental market | Ordinance, insofar as it bars mergers for 10 years after Ellis Act withdrawals, impermissibly intrudes on the state‑occupied field of substantive eviction controls and is preempted |
| Scope of local power post‑Ellis amendments | City may regulate subsequent use, demolition, and conversion; so local merger rules are permissible land‑use regulation | Plaintiffs: where local rule effectively prevents a landlord from using/disposing property (e.g., merging) after an Ellis withdrawal, it conflicts with Ellis | Court: local land‑use authority exists, but not where regulation imposes an inevitable substantive barrier to exercising Ellis rights; §317(e)(4) crosses that line |
| Facial vs. as‑applied challenge | Facial relief is appropriate because the ordinance text creates an absolute 10‑year barrier to any owner who withdraws to merge units | Ordinance applies to multiple eviction grounds and contains exemptions; conceivable lawful applications mean facial invalidation is improper | Court evaluated text + interaction with Ellis Act and held facial invalidation appropriate as ordinance always bars mergers within 10 years after an Ellis withdrawal |
Key Cases Cited
- Nash v. City of Santa Monica, 37 Cal.3d 97 (Cal. 1984) (upheld permit regime that limited owners’ ability to remove rental housing prior to Ellis Act reversal)
- Sherwin‑Williams Co. v. City of Los Angeles, 4 Cal.4th 893 (Cal. 1993) (preemption: local law duplicates, contradicts, or enters field occupied by general law)
- Javidzad v. City of Santa Monica, 204 Cal.App.3d 524 (Cal. Ct. App.) (ordinance conditioning demolition on prerequisites impermissibly burdened right to exit rental business)
- Reidy v. City & County of San Francisco, 123 Cal.App.4th 580 (Cal. Ct. App.) (local conversion/permit requirements that condition exit from rental market are preempted by Ellis Act)
- L.A. Lincoln Place Investors, Ltd. v. City of Los Angeles, 54 Cal.App.4th 53 (Cal. Ct. App.) (removal permit conditioned on covenants imposed a prohibitive price on exiting rental business)
- City of Riverside v. Inland Empire Patients Health & Wellness Ctr., Inc., 56 Cal.4th 729 (Cal. 2013) (preemption analysis framework; presumption favoring local regulation absent clear legislative intent)
- Tobe v. City of Santa Ana, 9 Cal.4th 1069 (Cal. 1995) (facial challenge review focuses on text of the ordinance)
- Johnson v. City & County of San Francisco, 137 Cal.App.4th 7 (Cal. Ct. App.) (Ellis Act occupies field of substantive eviction controls for owners wishing to withdraw)