SACRAMENTO - Peace Ranch, LLC, owners of a mobile home park commonly and collectively known as Rancho La Paz (RLP), filed a federal complaint on September 13 in the Eastern District of California against Gavin Newsom over Assembly Bill 978.
Rob Bonta, in his official capacity as state attorney general, is also a defendant in the case, which alleges several violations of the state and federal constitutions.
According to the complaint, when it acquired RLP, Peace Ranch lawfully raised rents on mobile home spaces to help bring them up toward market rent. Following some tenant and political push-back, Peace Ranch negotiated long-term leases with its tenants that included a schedule of agreed-to rent increases, phased in over a period of years.
Frustrated at failed attempts at the local and state level to impose rent control on mobile home parks, and setting her sights on RLP, Assemblywoman Sharon Quirk-Silva pushed through retroactive legislation to effectively nullify those negotiated leases and impose a draconian rent cap that no other rental property owner in the State is subject to, the suit says.
This civil rights action is to challenge Assembly Bill 978 as unconstitutional. Peace Ranch alleges that AB 978 singles out one property owner without notice or an opportunity to be heard before being stripped of its rights; violates the California Constitution’s prohibition against special legislation; violates the Contracts Clause of the Federal Constitution; substantially impairs Plaintiff’s existing leases by depriving its contract right to rent increases; violates Plaintiff’s right to equal protection of the laws and to due process; takes Plaintiff’s property right in past and future rent increases for the sole purpose of benefitting a narrow class of private individual; and violates the federal and state constitutional prohibitions against “private takings.” AB 978 is to take effect Jan. 1, 2022.
U.S. District Court Eastern District of California case number 2:21-cv-01651-JAM-AC