San Francisco Apartment Association; Coalition for Better Housing; Small Property Owners of San Francisco Institute; San Francisco Association of Realtors; Norman T. Larson, Plaintiffs-Appellants,
City and County of San Francisco, Defendant-Appellee.
and Submitted September 14, 2017 San Francisco, California
from the United States District Court for the Northern
District of California No. 4:15-cv-01545-PJH, Phyllis J.
Hamilton, Chief District Judge, Presiding
Christopher E. Skinnell (argued), James W. Carson, and James
R. Parrinello, Nielsen Merksamer Parrinello Gross & Leoni
LLP, San Rafael, California, for Plaintiffs-Appellants.
M. Goldman (argued) and Wayne Snodgrass, Deputy City
Attorneys; Dennis J. Herrera, City Attorney; Office of the
City Attorney, San Francisco, California; for
Before: Eugene E. Siler, [*] Richard C. Tallman, and Carlos T.
Bea, Circuit Judges.
panel affirmed the district court's judgment on the
pleadings in an action brought by an individual property
owner and several landlord organizations challenging a San
Francisco City Ordinance that limits the rights of landlords
to commence and conduct buyout negotiations.
panel first held that plaintiffs' contention that the
Ordinance prevents them from initiating buyout negotiations
unless tenants sign the disclosure form failed under the
plain language of the Ordinance. The panel then held that the
Ordinance's disclosure provision, which requires
landlords to disclose contact information for tenants'
rights organizations prior to the commencement of buyout
negotiations, did not violate plaintiffs' First Amendment
rights. In so holding, the panel determined that the
Ordinance pertains to commercial speech, that the asserted
government interest in enacting the Ordinance was
substantial, and that the Ordinance was sufficiently narrowly
tailored because the speech restrictions applied only until
the landlord provided the disclosures to the tenant.
panel held that the Ordinance's Database Provision, which
creates a publicly searchable database of buyout agreements,
did not violate the landlords' right to privacy under the
California Constitution because landlords do not have a
legally protected privacy interest or reasonable expectation
of privacy in the information made publicly available by the
Ordinance. The panel further held that the Ordinance does not
violate the landlords' rights to equal protection or due
process because the requirement that the Rent Board publish
landlords' contact information and rental unit address,
already publicly available, was rationally related to the
City's legitimate interest in improving the inferior
bargaining position of tenants in buyout negotiations while
protecting tenant privacy. Finally, the panel held that the
condominium conversion provision survived rational basis
review and did not violate plaintiffs' liberty to
determine whether a San Francisco city ordinance limiting the
rights of landlords to commence and conduct buyout
negotiations is consistent with the federal and state
constitutions. We do not, as we must not, evaluate the policy
merits of the ordinance. Appellants-an individual property
owner and several organizations that represent landlords'
interests in San Francisco-present us with assertions but no
authority which suggests the ordinance runs afoul of either
constitution. We therefore affirm the district court's
decision to grant the City and County of San Francisco's
("the City's") motion for judgment on the
AND PROCEDURAL BACKGROUND
October 21, 2014, the San Francisco Board of Supervisors
enacted Ordinance No. 225-14 (the "Ordinance"),
titled "Tenant Buyout Agreements." See
S.F. Admin. Code § 37.9E. The "Findings and
Purpose" section provides context for the enactment of
Instead of evicting tenants, some landlords offer cash
buyouts to tenants in exchange for the tenants vacating
rental units. . . . Unlike no-fault evictions, these buyouts
are unregulated, and can enable landlords to circumvent many
of the restrictions that apply when a landlord executes a
no-fault eviction. For example, a landlord who executes some
types of no-fault evictions must give tenants a certain
amount of time to move out, provide funds to tenants to cover
relocation costs, and allow tenants to move back into the
unit under specified circumstances. Two types of these no
fault evictions-the Ellis Act and owner move-in
evictions-contain restrictions on how much rent a landlord
can charge if the units are re-rented following eviction.
Analogous regulations do not exist for tenant buyouts.
Anecdotal evidence indicates that many buyout agreements are
not conducted at arms-length, and landlords sometimes employ
high-pressure tactics and intimidation to induce tenants to
sign the agreements. Some landlords threaten tenants with
eviction if they do not accept the terms of the buyout. The
frequency of these buyout offers increased significantly
following passage of a San Francisco law in 1996 which
restricted, and in many cases prohibited, condominium
conversions following no fault evictions. By threatening a
specific no fault eviction and then convincing a tenant to
vacate rather than receiving the eviction notice, a landlord
will avoid restrictions on condominium conversion as well as
restrictions on renovations, mergers, or demolitions. . . .
Disabled, senior, and catastrophically ill tenants can be
particularly vulnerable, and can face greater hurdles in
securing new housing.
The main purpose of this Section 37.9E is to increase the
fairness of buyout negotiations and agreements by requiring
landlords to provide tenants with a statement of their rights
and allowing tenants to rescind a buyout agreement for up to
45 days after signing the agreement . . . . Another goal of
this ordinance is to help the City collect data about buyout
agreements. The City lacks comprehensive information about
the number, location, and terms of buyout agreements. This
dearth of information precludes the City from understanding
the true level of tenant displacement in San Francisco.
S.F. Admin. Code §37.9E(a). The Ordinance defines
"Buyout Agreement" as "an agreement wherein
the landlord pays the tenant money or other consideration to
vacate the rental unit, " and it excludes from the
definition agreements "to settle a pending unlawful
detainer action." Id. § 37.9E(c). The
Ordinance defines "Buyout Negotiations" as
"any discussion or bargaining, whether oral or written,
between a landlord and tenant regarding the possibility of
entering into a Buyout Agreement." Id.
Ordinance has six provisions relevant to this appeal: (1) the
"Disclosure Provision, " (2) the "Notification
Provision, " (3) the "Rescission Provision, "
(4) the "Database Provision, " (5) the
"Penalty and Fee Provision, " and (6) the
"Condominium Conversion Provision." Id.
§ 37.9E; S.F. Subdivision Code § 1396.
Disclosure Provision states that, prior to the commencement
of buyout negotiations for a rental unit, landlords must
provide each tenant in that unit with a written disclosure
form written by the Rent Board. S.F. Admin. Code §
37.9E(d). The form states that a tenant has a right not to
enter into buyout negotiations or a buyout agreement, may
choose to consult with an attorney before entering into
negotiations or an agreement, has a right to rescind any
buyout agreement for up to forty-five days after the
agreement's execution, and may visit the Rent Board for
information about other buyout agreements in the tenant's
neighborhood. The form also includes a description of the