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Only in Berkeley • November 1, 2005

Giant Victory for a Man, Small Victory for Mankind?

Giant Victory for a Man,

Small Victory for Mankind?

Heartfelt congratulations go to BPOA Boardmember Jim Smith, who recently defeated the rent board in Superior Court.  His experience revealed the absolute hubris of the Rent Board and City when it comes to litigation.  Even when they’re wrong, they’ll do almost anything to exact a pound of flesh from the poor soul who is in the right.  Their litigation strategy is ripped right from the playbook of the largest, nastiest corporations in America.

And remember: they’re using your money to do it.

Here’s the short version of Jim’s story.  Waaaay back before 1999, during the Costa-Hawkins phase-in period, Jim had a vacancy.  The departing tenant had been Section 8, paying rent of X.  So Jim charged the next tenant X plus 15%, which is exactly what the law allowed between 1996 and 1999.  Jim was extra certain of that because he’d been involved in drafting that part of Costa-Hawkins in the first place.

The rent board, of course, had its own “interpretation,” which was that Section 8 rents just don’t count.  Therefore, Jim could only charge 15% more than the last non-Section 8 tenant paid, however long ago that was.  They ordered rent refunds.

In court, the judge didn’t hesitate to reject the board’s “interpretation” of state law.  But if that seems like a simple matter, you’re wrong.  The total amount at issue was perhaps $4000—a nothing to the rent board, but a sizable amount to Jim.  Yet the cost of proving the Rent Board wrong was over $30,000!  (Fortunately, most of the cost has been covered by contributions from many generous landlords.)

Legally, Jim was entitled to make the rent board pay those costs.  That’s when the Board engaged in its favorite tactic:  blackmail.  Essentially, the Board threatened to appeal its dead-bang-loser case (costing tens of thousands more dollars and upping the ante, so to speak) unless Jim agreed to give up his right to recover his costs.  To add insult to injury, the Board also made Jim agree to a “payment plan” for the tenant.  You see, the tenant had already been given permission to “withhold” the $4000.  And the tenant had spent it all, leaving nothing to pay back to Jim.

Sadly, the Rent Board takes the simple position that it can do anything it wants, whether legal or not, because few landlords will spend the money to prove the Board wrong.  The City itself takes a similar approach.  In the lawsuit to set aside the City/UC settlement (see the editorial on page 2), two recent court cases indicate that the City is just plain wrong.  But rather than concede the futility of further litigation, the City told the plaintiffs that it would simply spend them into the ground, filing motions and appeals until the plaintiffs give up. 

That’s why victories like Jim’s are important.  His $4000 means the world to him, and little for the rest of us.  But righting a wrong is a victory for us all.


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