A federal judge refused Wednesday to block a new Portland law that requires landlords to help their tenants pay relocation costs when they receive a no-fault eviction or face rent hikes of more than 10 percent.
Judge Michael Simon handed a small, early victory to the city's attorneys in what could be a much longer legal battle.
Two landlords had sought a temporary restraining order to immediately stop the law from taking effect while their legal challenge works its way through the courts. They say the law violates Oregon's state ban on rent control.
Portland's city council is pushing the state legislature to eliminate that ban in their current session.
Simon said there was no practical way for him to block the law because the city has left it up to individual tenants to collect payments and sue landlords who do not comply.
“What would you like me to order the city to do, or not to do?” Simon pointedly asked the plaintiff's attorney, John DiLorenzo.
“We would like you to order the city to consider the ordinance stayed," DiLorenzo answered. “There will be frankly, a mess created unless this ordinance is somehow stayed.”
"It's not clear to me what that means," Simon replied, noting that the law has already taken effect and enforcement is up to individual tenants. “I can’t order them not to sue their landlords,” he said.
Simon also said the core issues in the lawsuit are questions of state — not federal — law.
In addition to their chief complaint that the city ordinance violates the state's ban on rent control, the plaintiffs also argued that the city's ordinance violated the contract clause and the due process clause of the U.S. Constitution by placing a heavy financial burden on landlords.
“I am very, very skeptical of economic due process under the contract clause of the 14th Amendment applying in this case," Simon said.
DiLorenzo agreed to drop the two constitutional claims from the complaint, and the case is being moved from federal court to state court.
Portland City Attorney Tracy Reeve said she had pushed to have the case moved to federal court last week because she believed a federal judge would quickly dismiss the plaintiff's constitutional claims.
Simon, who will no longer hear the case, indicated that it raises interesting questions for a state court to consider, including what rent control means and when state law preempts a city ordinance in a home-rule state.
The landlords who filed suit are Multnomah County residents Phillip Owen, who owns 75 rental units, and Michael Feves, who owns 465 units.
The apartment lobbying group Multifamily Northwest is paying for the suit with its legal defense fund.
According to the complaint, Owen and his wife are planning to move into one of their rental properties while they repair their home, which was recently damaged by a falling tree.
Owen has issued no-cause evictions to four tenants living at that property and objects to having to pay relocation aid to move into his own property.
The complaint also argues that the city's ordinance prevents landlords from using no-cause evictions to remove problem tenants.
It states that Owen has used no-cause evictions to remove tenants involved in sexual harassment and drug dealing and that Feves used no-cause evictions to remove two tenants with mental health problems.
The city argues that landlords can and should use for-cause evictions in cases involving problem tenants and that the relocation aid payments do not apply to tenants evicted for a cause.
OPB All Things Considered host Kate Davidson spoke with reporter Amelia Templeton about the judge's decision. Listen to their full conversation by clicking the audio player at the top of this article.