Ramona Morales, a landlord in Indio, California, was cited $225 because one of her tenants was raising chickens in the backyard of a home, in violation of city ordinance.
Such citations are not terribly unusual. The surprise came later. A private firm the city had hired to handle code enforcement violations billed her for thousands of dollars for the cost of her own prosecution. She ended up paying nearly $6,000.
This scheme to cash in on relatively minor code enforcement issues was investigated and exposed by Desert Sun reporter Brett Kelman last November. This week the property-rights-protecting lawyers of the Institute for Justice waded into the fight. On Tuesday they filed a class action suit against Indio, the nearby city of Coachella, and the law firm Silver & Wright. Their aim: to stop this oppressively expensive code enforcement racket.
Here's how this scheme works. In these towns, when code enforcement officers track down issues like broken windows or unpermitted construction, they don't simply cite the offenders and demand they fix it. They turn the cases over to Silver & Wright for criminal prosecution.
Typically the property owners plead guilty and are ordered to pay small fines, as happened with Morales. Then, months later, they get a bill for thousands from Silver & Wright demanding that they pay the law firm's fees for the costs of being prosecuted. They can appeal, but that brings another kick in the gut: a second bill charging them even more money for the legal costs of fighting the appeal. One Coachella man was charged tens of thousands of dollars in prosecution fees over an unpermitted expansion of his living room. Another family has been billed nearly $40,000 over code violations that were mailed to a woman who had died at a property that was sitting vacant.
When I first blogged about this nasty business, I noted that Silver & Wright's website bragged that the firm could find ways to "make nuisance abatement and code enforcement cost neutral or even revenue producing." (Interesting note: I can no longer find this quote on the site.)
The Institute for Justice also took note of the firm's promise that cities could make money off code enforcement. In its announcement of the suit, which is being pursued with the help of the lawyers of O'Melveny & Myers, the institute notes that California courts have ruled that it's illegal for prosecutors to have a direct financial stake in the cases they pursue.
Institute for Justice attorney Jeffrey Redfern breaks down the consequences:
No one should have a warrant out for their arrest and be forced to pay $6,000 to resolve a simple dispute about a few backyard chickens. This could have been resolved with a simple phone call, but it wasn't, in part, because Silver & Wright's business model creates a perverse financial incentive to prosecute cases like Ramona's in criminal court, rather than treat homeowners with goodwill.
The institute is trying to get the courts to shut this whole system of enforcement down and to return the money paid by Morales and others who have been fleeced by the firm.
Below, watch a video from the Institute for Justice explaining how this racket works: