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Great News!
U. S. SUPREME COURT DECLINES TO HEAR GUGGENHEIM'S CHALLENGE TO THE CITY OF GOLETA'S Rent Control Ordinance

It affirms the U. S. Ninth Circuit of Appeal's December decision, and makes that decision final. With the Supreme Court choosing to decline to hear it, the U. S. Supreme Court is saying they agree, the Ninth Circuit's decision is the correct one. Owners of mobilehomes located in a park with local government agency rent control in any place in the U. S. are now free of the threat of the rent control being wiped out because the park owner asserts the rent control violates his property rights under the "takings clause" of the 5th Amendment to the Constitution. For more on the Goleta case see "Ninth Circuit Throws Out Rent Control Challenge" below.

Ninth Circuit Throws Out Rent Control Challenge

By Dean Preston

December 22, 2010.

Earlier today, an en banc panel of the Ninth Circuit Court of Appeals threw out a challenge to the City of Goleta’s mobilehome rent control ordinance. This closely watched case is a major victory for mobilehome residents and rent control.

Tenants Together, National Housing Law Project and other allies had submitted an amicus brief in support of the City of Goleta.

The Ninth Circuit panel squarely rejected the park owners' argument that the rent control law somehow denied them their "investment backed expectation." The court found that the owners knew exactly what they were buying – a property subject to rent control -- and could not now challenge the rent control law as a taking. The court also noted that "the people who really do have investment-backed expectations that might be upset by changes in the rent control system are tenants who bought their mobile homes after rent control went into effect. Ending rent control would be a windfall to the Guggenheims, and a disaster for tenants who bought their mobile homes after rent control was imposed in the 70’s and 80’s."

Speculators like the Guggenheims routinely buy property cheap because of rent control and then turn around and try to invalidate rent control laws claiming that these laws deny them their ‘investment backed expectations’. The court's opinion will make it far more difficult for speculators to use these disingenuous arguments in the future.

Today's decision reverses Judge Jay S. Bybee’s decision from last year. In that decision, Bybee wrote that mobilehome park owners had a constitutional right to compensation by the City because the rent control ordinance constituted a “regulatory taking” under the Fifth Amendment. Despite the fact that the park owner bought the park with full knowledge of the rent control law, Judge Bybee, joined by Nixon-appointee Judge Alfred T. Goodwin, found that the law improperly interfered with the park owner’s “investment backed expectation.”

Judge Bybee, of course, was controversial long before his poorly reasoned anti-rent control decision. Bybee authored the torture memos while at the Office of Legal Counsel under George W. Bush, after which he was appointed to the Ninth Circuit Court of Appeals. When his responsibility for the torture memos was exposed, there were widespread calls for his impeachment. In April, 2009, The New York Times called for Bybee’s impeachment, stating: "These memos make it clear that Mr. Bybee is unfit for a job that requires legal judgment and a respect for the Constitution." Bybee was not impeached and remains on the Ninth Circuit Court of Appeals.

Bybee’s Goleta ruling angered many advocates for renters’ rights who saw the court bending over backwards and contorting the law to find in favor of park owners and against those protected by rent control.

Today's en banc decision is an encouraging sign that the Ninth Circuit recognizes the right of cities to adopt and enforce their rent control laws, even if conservative activist judges like Judge Bybee do not.

As a result, many working families and seniors in Goleta and beyond will rest a little easier this holiday season.

April 2010. A second Amicus Brief has been filed with the support of AARP and other groups. GSMOL previously filed a similar brief to support the City of Goleta in its 9th Circuit Federal Court case. These briefs provide in-depth justification of why rent control is critical to protect mobilehome residents. (Click here for details on this case.) The briefs can be found at AARP and GSMOL links. The panel is scheduled to be heard the week of the 21st of June. The following are previous news items on this subject.

March 14, 2010. Good news on the rent control scene. As reported by Ken Tatro of Rancho Mobilehome Park in Goleta, "The U.S. Ninth Circuit Court of Appeals has voted to rehear the Guggenheim v. City of Goleta case en banc, meaning the full panel of the court will rehear this case and the three judge panel that first heard it and rendered its decision that the City of Goleta's rent control ordinance constituted a "Regulatory Taking" from Mr. Guggenheim, can not be used by any court as precedent."

Previously, on September 28, 2009, the Federal Ninth Circuit Court of Appeal issued a three-Judge decision in the case which found that Goleta's Mobilehome Rent Ordinance constitutes a regulatory "taking" of property under the United States Constitution for which just compensation must be paid. The decision sent shockwaves throughout cities and counties which either have or are contemplating a rent ordinance, as well as mobilehome resident organizations throughout California. If left to stand, the ruling could provide a means for park owners everywhere to bring new challenges to rent ordinances, and could discourage jurisdictions now considering an ordinance from adopting their own protections.

It is expected by some experts the full nine-judge panel will reverse the previous decision of a three-judge panel that threatened local rent control throughout the western U.S.