In two tenant protection cases Santa Monica City Attorneys have pursued against local landlords this year, alleged offenders received the same outcome: rather than go to a criminal trial, both sides agreed to what’s known as pretrial diversion.
The legal jargon may not be intuitive, but it essentially means landlords charged with misdeeds — from tenant harassment to price gouging — are compelled to meet some criteria to avoid a potential guilty verdict.
The city attorney’s office has opted for diversions, a tactic that puts a pause button on legal proceedings and stops short of declaring defendants guilty, in order to increase the probability that tenants are protected and landlords comply with laws moving forward, according to Deputy City Attorney Jonathan Erwin-Frank.
“We only bring a case if we feel confident that the legal standard is met and can be met in our ability to pursue it to whatever point we feel is appropriate under all the circumstances,” Erwin-Frank said in an interview with the Daily Press this week.
“That said, there can be circumstances in any legal case, criminal or otherwise, where you have a resolution that ensures compliance that’s available now, whereas, even if you feel quite confident, if you were to go to trial or potentially appeals, there’s a non-zero chance at the very least that something could happen where you’re not able to obtain a conviction,” he continued. In other words, bringing any case to trial comes with the possibility of losing the trial; reaching a pretrial diversion means tenants have issues resolved no matter what.
In the most recent instance of pretrial diversion, which was granted on Monday, Sept. 26, defendants 1433 Euclid Street, LLC and WS Communities, LLC were accused of price gouging by raising the rent on a housing unit by nearly 250% at a time when rent increases were limited to 10%. With no admittance of guilt, 1433 Euclid Street, LLC and WS Communities, LLC, have agreed to pay back thousands of dollars in rent the tenant at the apartment unit paid, as well as cutting a $15,000 check to the Santa Monica City Attorney’s Office and another $20,000 donation to homeless outreach nonprofit The People Concern. In addition, the two LLCs must post public notice in the apartment complex about rules protecting tenants and representatives must attend tenants’ rights training.
“Our primary consideration is always going to be protection of the alleged victim or victims and making sure the requirements of diversion ensure compliance,” Erwin-Frank said.
Although a conviction may have created a criminal record for the landlords in question — who, again, have not admitted guilt — Erwin-Frank also pointed out that often after a 12-month probationary period, guilty parties can have records expunged, leaving no trace of the criminal offense.
The alleged price gouging took place beginning back in February 2020, during a declared state of emergency due to wildfires in the state of California. The case itself was first filed in January 2021, and the lengthy process included a legal battle for the City Attorney’s Office to first prove defendants even fell under the price gouging statute.
“The defendant businesses argued that the law did not apply to them. We litigated the issue, and the court ruled with us and held the law does apply here and applies for the duration of a declared state of emergency,” Erwin-Frank wrote in a description of the case. “This diversion requires defendants to comply with the price gouging law and all laws. It ensures compliance. If defendants fall out of compliance within the monitoring period, then we can continue to prosecute this case. We don’t have to conduct a new investigation or file a new case. We just resume with this case. We preserved our right to prosecute this case, while at the same time obtaining compliance from these landlords, under the court’s supervision. Compliance is paramount.”
Erwin added: “The tenant remains protected. She remains in her unit and continues to pay the pre-gouging rent. She was reimbursed for the overpayment of the gouging rent. The notice requirement also helps protect other tenants.”
Pretrial diversion also leaves the door open for future legal action if defendants fail to meet commitments outlined in the diversion.
“If they were to violate other terms of the agreement … we can continue the prosecution,” Erwin-Frank said.
The Sept. 26 order approving diversion in the case (The People of the State of California vs. 1433 Euclid Street, LLC. / WS Communities, LLC.) came a few months after a similar pretrial diversion was approved for a tenant harassment case that the City brought against Adam Shekhter, MySuite, LLC., 1238 10th Street, LLC., and 1433 Euclid Street, LLC, accused of attempting to influence tenants to vacate units through fraud, intimidation or coercion.
In that diversion, defendants were ordered to make a total of $102,000 in payments, with the bulk going to the City of Santa Monica as well as two $20,000 payments made to one current and one former tenant.
Though 1433 Euclid Street, LLC, was named as a defendant in both trials, Erwin-Frank said each case was evaluated “on its own individual facts” — there is nothing to stop a defendant obtaining pretrial diversion multiple cases in a row.
“Knowledge of a particular history with a defendant would be one of a series of factors that would be considered,” Erwin-Frank said, reiterating that City Attorneys opt for pretrial diversion “if we’re confident that it’s sufficient to achieve compliance and protect the victim.”
emily@smdp.com
