9th Circuit upholds ruling in favor Oakland no-fault eviction ordinance

A city of Oakland ordinance that requires landlords to pay tenants to move out, even if the lease is expired, is not an unconstitutional taking, a panel of federal appeals court judges said Tuesday.

A panel from the 9th U.S. Circuit Court of Appeals, consisting of three judges appointed by Republican presidents, ruled that a military couple who rented their home while stationed in Washington, D.C., could not move back in without first paying their tenant a $6,500 relocation fee. The tenant's lease had expired, and he was given a 60-day prior notice to leave, according to the opinion.

The relocation fee arose from the Uniform Residential Tenant Relocation Ordinance of 2018, which requires landlords seeking to reoccupy their house to pay tenants. The current cost imposed on reentering landlords is $7,447 per one-bedroom unit, $9,165 per two-bedroom unit, and $11,314 per three or more bedroom unit.

Calling the ordinance a "ransom," and an unconstitutional taking, Air Force nurse Sharon Ballinger and National Guard commander Lindsay Ballinger sued the city in an Oakland federal court in 2018.

U.S. District Judge Haywood S. Gilliam dismissed the lawsuit. "No precedent supports the Ballingers' argument that legislation requiring the payment of money constitutes a physical taking," Gilliam wrote.

The federal appeals court on Tuesday agreed with Gilliam and refused to reinstate it. "[T]he Ordinance imposes a transaction cost to terminate a lease agreement," wrote Circuit Judge Ryan D. Nelson for the unanimous panel.

"We see little difference between lawful regulations, like rent control, and the Ordinance's regulation of the landlord-tenant relationship here," wrote Nelson, an appointee of President Trump. "Thus, the relocation fee is not an unconstitutional physical taking -- it 'merely regulate[s] [the Ballingers'] use of their land by regulating the relationship between landlord and tenant."

Circuit Judges Richard R. Clifton and N. Randy Smith, both Bush appointees, concurred.

The Ballingers, represented by the pro-property rights Pacific Legal Foundation, said they might appeal the ruling to the U.S. Supreme Court.

"The Ballingers are disappointed that the court failed to recognize that the Oakland law, forcing them to pay their software industry tenants $6,500 before they could re-occupy their own home, in accordance with a lease executed before the law was enacted, is unconstitutional," J. David Breemer of the Pacific Legal Foundation wrote in an email.

City Attorney Barbara J. Parker called the opinion a victory for the City of Oakland -- and for tenants' rights.

"The Ninth Circuit Court of Appeals affirmed what we have said since this litigation began: that the City's Uniform Residential Tenant Relocation Ordinance is a lawful -- and vital -- protection for Oakland tenants against no-fault eviction," Parker said. "The Uniform Tenant Relocation Ordinance provides critical minimal relocation assistance to tenants who, through no fault of their own, are displaced by owner-move-in evictions."

The case is Ballinger et al. v. City of Oakland, 2022 DJDAR 1189 (9th Cir. Feb. 1, 2022).