September 18, 2023. In a victory for affordable housing, the California Court of Appeal reinstated a class action lawsuit by plaintiffs who allege their former landlord evicted them from their rent-controlled Los Angeles homes to build luxury apartments and lied to the government about its plans.
In 2019, 15 former tenants sued a group of defendants who control real estate developer Wiseman Management. The suit alleges that Wiseman buys rent-controlled buildings and falsely certifies to the City of Los Angeles that it is taking them off the rental market to gain approval to evict the residents. According to the plaintiffs’ complaint, Wiseman then offers the units for long-term rental on Airbnb before eventually demolishing them and replacing them with expensive luxury apartments. The plaintiffs brought claims under California’s Ellis Act, the Los Angeles Rent Stabilization Ordinance, and the California Unfair Competition Law.
The trial court ruled that the plaintiffs could not pursue the case as a class action because each unit in a property alleged to have been re-rented would have to be examined individually to determine whether Wiseman re-rented it, making a class action unmanageable. The appeals court reversed the decision and ordered the case to be reinstated as a class action. It ruled that—contrary to the trial court’s ruling—California and Los Angeles affordable housing laws provide that if a landlord re-rents any unit in a property within the time forbidden by law, then the landlord is liable to all the former tenants it illegally evicted from that property, not just the tenants in the re-rented units. Thus, there is no need to present evidence on every unit in a property to prove that the tenant is liable, and proceeding with the case as a class action is possible. The appeals court also ruled that the plaintiffs alleged enough facts to allow the case to move forward as a class action.
“This is a really important decision for our clients and for many other low-income renters in Los Angeles. Class actions are often the only way to make systemic change and fight systemic injustice. This is one such case and we are pleased that the Court of Appeal ruled that the class action can proceed,” said Hassan Zavareei, Managing Partner of Tycko & Zavareei LLP.
The case is Jianna Maarten et al. v. Isaac Cohanzed et al., Case No.: B308055 in the Second Appellate Division, California Court of Appeal.