District Court Finds Amenities Fees To Be Illegal Excess Rent for Section 8 Tenants
The Eastern District of California recently decided in Terry v. Wasatch Advantage Group, No. 2:15-cv-00799 (E.D. Cal., November 23, 2022), that certain amenities fees are illegal excess rent and violate contract terms for the Section 8 Housing Choice Voucher Program. The Court ordered the defendants, who are private property owners and managers, to repay the fees to their tenants.
As described in our previous blog post, the Terry plaintiffs represent a certified class of California tenants who receive rental assistance through the Section 8 program and were charged amenities fees for things like washers and dryers, rental insurance, and parking. Both sides sought summary judgment on the question of whether these charges were “rent,” and if so, whether they were unlawful. Judge Mueller of the Eastern District of California granted summary judgment for the Terry plaintiffs and the certified class and denied summary judgment for the defendants.
The Court determined that defendants treated the fees as “rent” in several ways. First, many of the defendants’ standard rental agreements and lease renewal letters described the amenities fees as part of tenants’ total monthly obligation due, and standard forms combined the approved rent with monthly amenities charges in several places. Second, the defendants required tenants to pay the amenities charges for the duration of the lease and viewed failure to pay amenities charges as a default under the lease. Third, the defendants applied tenant payments to amenities charges before their approved monthly rent charges to try to preserve defendants’ ability to evict tenants for failing to pay rent.
We hope the order will allow advocates across the country to challenge similar practices.
Because the fees should be considered rent, the defendants violated the Housing Assistance Payment contract between the landlord, the tenant, and the local housing authority administering the housing voucher program by exceeding the total maximum rent permissible for the units.
Having won summary judgment on their breach of contract and Unfair Competition Law claims, the plaintiffs will now ask a jury to determine the amount of damages and Defendants’ liability under the False Claims Act and Consumer Legal Remedies Act.
Housing advocates have seen increasing side fees as a widespread issue affecting housing costs for many renters. Such fees are particularly crushing for low-income renters reliant on federal subsidies affecting their ability to afford safe, stable housing. We hope the order will allow advocates across the country to challenge similar practices.
We are tremendously grateful for the work of our co-counsel Goldstein, Borgen, Dardarian & Ho, Centro Legal de la Raza, and the Law Offices of Andrew Wolff for this incredible win for low-income renters
Summary Judgment Ruling is Major Victory Against Money Bail
After nearly seven years of litigation, Equal Justice Under Law has secured an important victory in the fight against money bail.
Money bail sets a price tag on freedom by forcing arrestees to pay an arbitrary amount of money to secure release before trial. It is a common practice in criminal courts throughout the country and is a major contributor to creating one system of justice for the rich and another for the poor.
In 2016, Equal Justice Under Law filed Welchen v. Sacramento, challenging Sacramento County, CA’s pre-arraignment money bail system. Just last month, Judge Troy L. Nunley of the United States District Court for the Eastern District of California granted summary judgment to the plaintiff, agreeing that the county’s bail system violates substantive due process because inability to afford bail results in a deprivation of liberty prior to trial.
Judge Nunley found that strict scrutiny applied, denied Defendants’ arguments on mootness, and granted summary judgment to the plaintiff.
Given the fundamental interest at stake (pretrial liberty), Judge Nunley found that strict scrutiny applied. Judge Nunley found that the government did not satisfy strict scrutiny, as the bail system was not narrowly tailored and reasonable alternatives existed to satisfy relevant state interests (such as flight risk). Judge Nunley also denied Defendants’ arguments on mootness, as the judge found that our plaintiff fell within the “capable of repetition but evading review” exception.
Some may be wondering how this fits in with the California Supreme Court’s recent decision in In re Humphrey, 482 P.3d 1008 (Cal. 2021), which changed the money bail system statewide. The decisions are complimentary: Humphrey addressed the role that judges play, holding that judges must consider ability to pay when setting bail. The hope of Humphrey, then, is that people are no longer detained solely because they can’t afford bail.
Money bail sets a price tag on freedom by forcing arrestees to pay an arbitrary amount of money to secure release before trial.
Our case focuses on the period before arrestees see a judge: there is often a multi-day (and sometimes longer) wait between when someone is arrested and when they see a judge for the first time (known as the arraignment). During that waiting period, the sheriff or the district attorney or the attorney general often have their own money bail schedule, and arrestees can pay to be released before their arraignment. Our case applies to those sheriffs and prosecutors in Sacramento County; they cannot detain an arrestee pre-arraignment simply because that person can’t afford bail. In the words of Judge Nunley, our plaintiff’s pre-arraignment incarceration “significantly deprived him of his fundamental right to pretrial liberty solely due to his indigence,” and is therefore unconstitutional.
The next step is to brief the relief we want, which is to design a pretrial release process that properly considers valid concerns such as flight risk, while not resulting in people being detained simply because they can’t afford bail. Equal Justice Under Law previously secured a similar victory to end pre-arraignment money bail in San Francisco County in Buffin v. San Francisco.
We hope that one day we will get to a world where money bail doesn’t exist at all and people are no longer incarcerated for their poverty. This victory is one critical step in that direction.
