City and County of San Francisco v. Post ( 2018 )

Filed 4/11/18
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION TWO
CITY AND COUNTY OF SAN
FRANCISCO et al.
Plaintiffs and Respondents, A149136
v. (San Francisco City and County
CHUCK M. POST et al. Super. Ct. No. CGC-15-548551)
Defendants and Appellants.
In 1998 the San Francisco Board of Supervisors outlawed discrimination against
tenants who pay a portion of their rent with a Section 8, or similar, housing voucher.
They did this by amending San Francisco’s existing housing discrimination ordinance to
outlaw discrimination based on a person’s “source of income,” a term they defined
broadly to include government rent subsidies. (S.F. Police Code, § 3304, subd. (a).) The
following year, the California Legislature also expanded the state’s Fair Employment and
Housing Act (FEHA) to prohibit discrimination based on a tenant’s “source of income,”
but the Legislature defined the term narrowly, so that it does not reach government rent
subsidies such as Section 8. (Gov. Code, § 12955, subd. (a).) FEHA does not prevent a
landlord from declining to take Section 8 tenants. (Sabi v. Sterling (2010) 183
Cal. App. 4th 916 (Sabi).) The question this case poses is whether FEHA preempts San
Francisco’s ordinance to the extent the local ordinance outlaws discrimination based on a
tenant’s participation in the Section 8 program. The trial court found no preemption, and
we agree.
1
FACTUAL AND PROCEDURAL BACKGROUND
The material facts in this case are uncontroverted. Acting as agent for Appellant
Lem-Ray Properties I DE, LLC (Lem-Ray), Appellant Chuck Post sought tenants for
efficiency studio apartments at 935 Geary Street in San Francisco. Between May 2013
and May 2014, he posted advertisements on Craigslist and ApartmentsInSF.com
advertising these units, each advertisement stating that the landlord would not accept
Section 8 vouchers.
On October 21, 2015, the City and County of San Francisco and the People of the
State of California acting by and through San Francisco City Attorney Dennis J. Herrera
(collectively, the People) filed this case. Their complaint alleges that Post and Lem-
Ray’s actions violated San Francisco Police Code section 3304 (section 3304), the
ordinance that forbids discrimination based on source of income. Piggy-backing on these
allegations of unlawful conduct, the complaint alleges violation of California Business
and Professions Code section 17200 and of a prior injunction prohibiting Lem-Ray from
employing unfair business practices. Post and Lem-Ray demurred on the ground that
FEHA preempts the source-of-income provision in section 3304, but the trial court
overruled the demurrer.
The People then moved for a preliminary injunction to prevent appellants from
continuing to discriminate against participants in the Section 8 program. On May 20,
2016, the trial court granted the injunction, finding that the People were likely to succeed
on the merits of their claims under section 3304, and that a preliminary injunction was
necessary to prevent irreparable harm while the case was pending. This timely appeal
followed.
LEGAL BACKGROUND
The Section 8 Program
The Housing Choice Voucher program, commonly known as “Section 8,” is a
partnership between the federal government and state or local public housing authorities
(PHAs). The federal government funds the program, and the PHA administers it. (Sabi,
supra, 183 Cal.App.4th at p. 925; 24 C.F.R. § 982.1.) The program subsidizes eligible
2
low-income renters in paying for housing in the private rental market. The PHA
identifies low-income renters who are eligible to participate in the program, approves the
housing they wish to rent, and then enters into a contract with the landlord to pay directly
to the landlord a portion of the tenant’s rent each month. (Ibid.)
Certain elements of the Section 8 program vary in response to “local housing
needs and priorities.” (24 C.F.R. § 982.207.) For example, the PHA sets income
requirements for program participation based on the cost of living in a local community,
and varies the size of rent subsidies according to local market rents. (24 C.F.R.
§§ 982.201, 982.503.) Here, the PHA is the San Francisco Housing Authority.
Analyzing data from 1997, the San Francisco Housing Authority reported in 1988 that
because so little housing stock was available to Section 8 tenants in San Francisco, a third
of the households receiving Section 8 vouchers for the first time left San Francisco to
find housing in other communities.
San Francisco’s Ordinance
When San Francisco faced a shortage of low-income housing and widespread
displacement of Section 8 tenants in 1998, the San Francisco Board of Supervisors
responded by passing a package of three measures. First, they amended an existing
ordinance outlawing housing discrimination to add a person’s “source of income” as a
protected category, defining “source of income” to include Section 8 and other public or
nonprofit rent subsidies so that landlords could not refuse to accept tenants relying on
Section 8 subsidies. (S.F. Police Code, § 3304, subd. (a).) Second, they added a
requirement to the ordinance that any landlord using “a financial or income standard” to
determine whether a tenant qualified for a rental contract must account, in its calculation,
for (a) any portions of the rental payment that would be made by others, such as the PHA,
and (b) the combined income of all persons proposing to reside together or cosign the
lease. (S.F. Police Code, § 3304, subd. (b).) This measure prevents landlords from
turning away low-income tenants who could make the rent with the assistance they
receive from others. Third, the Board of Supervisors brought units occupied by Section 8
3
tenants under the umbrella of the city’s rent ordinance, limiting a landlord’s ability to
evict such tenants and raise rents. (See S.F. Admin. Code, §§ 37.2, 37.3, 37.9.)
Today, San Francisco’s housing discrimination ordinance, section 3304, continues
to prevent landlords from discriminating on the basis of a tenant’s “source of income.”
Section 3304 broadly defines the term to mean “all lawful sources of income or rental
assistance from any federal, State, local, or nonprofit-administered benefit or subsidy
program.” (S.F. Police Code, § 3304, subd. (a)(5), italics added.) Relevant portions of
the ordinance are set forth more completely in the margin, with language added in 1998
in italics.1
1
Section 3304 reads:
“(a) Prohibited Activity. It shall be unlawful for any person to do any of the
following acts wholly or partially because of a person’s actual or perceived race, color,
ancestry, national origin, place of birth, sex, age, religion, creed, disability, sexual
orientation, gender identity, source of income, weight, or height:
“(1) To interrupt, terminate, or fail or refuse to initiate or conduct any transaction
in real property, including but not limited to the rental thereof; to require different terms
for such transaction; or falsely to represent that an interest in real property is not available
for transaction; [¶] . . . [¶]
“(5) To make, print, publish, advertise or disseminate in any way, or cause to be
made, printed or published, advertised or disseminated in any way, any notice, statement
or advertisement with respect to a transaction or proposed transaction in real property, . . .
which unlawfully indicates preference, limitation or discrimination based on race, color,
ancestry, national origin, place of birth, sex, age, religion, creed, disability, sexual
orientation, gender identity, source of income, weight, or height. For purposes of this
Subsection (a), ‘source of income’ means all lawful sources of income or rental
assistance from any federal, State, local, or nonprofit-administered benefit or subsidy
program. ‘Source of income’ also means a rental assistance program, homeless
assistance program, security deposit assistance program or housing subsidy program.
“Source of income” includes any requirement of any such program or source of income,
or rental assistance.
“(b) Prohibited Economic Discrimination. It shall be unlawful for any person to
use a financial or income standard for the rental of housing that does either of the
following:
4
FEHA
FEHA is a 1980 recodification of the state’s pre-existing fair employment and fair
housing acts. (Rojo v. Kliger (1990) 52 Cal. 3d 65, 72 (Rojo).) FEHA declares that the
opportunity to obtain and retain employment and housing without discrimination based
on race, religion, or other protected attributes is “a civil right,” and the purpose of the
statute is “to provide effective remedies that will eliminate” these discriminatory
practices. (Gov. Code, §§ 12920, 12921.) To that end, the statute establishes
enforcement procedures. With regard to acts of housing discrimination that the statute
identifies as unlawful, aggrieved individuals may file complaints with the Department of
Fair Employment and Housing, or the director of the Department or the Attorney General
may file a complaint. (Gov. Code, § 12925, subd. (b), § 12980, subds. (a), (b).) The
statute sets out details on the timeline and procedures the department must follow in
investigating and resolving these complaints, including a provision that if the department
elects not to proceed with a case it must provide a right-to-sue notice to the claimant.
(Gov. Code, § 12980, subds. (c)-(j).)
Until 1999, FEHA was silent on source-of-income discrimination. When San
Francisco amended section 3304 in 1998 to include discrimination based on source of
income, broadly defined, FEHA made no mention of income in the list of personal
attributes for which it was unlawful to discriminate. But the following year, the
Legislature amended the statute to add source-of-income discrimination. FEHA now
declares it to be unlawful “[f]or the owner of any housing accommodation to discriminate
against or harass any person because of the race, color, religion, sex, gender, gender
“(1) Fails to account for any rental payments or portions of rental payments that
will be made by other individuals or organizations on the same basis as rental payments
to be made directly by the tenant or prospective tenant;
“(2) Fails to account for the aggregate income of persons residing together or
proposing to reside together, or aggregate income of tenants or prospective tenants and
their cosigners or proposed cosigners, on the same basis as the aggregate income of
married persons residing together or proposing to reside together.” (§ 3304, italics
added.)
5
identity, gender expression, sexual orientation, marital status, national origin, ancestry,
familial status, source of income, disability, or genetic information of that person. (Gov.
Code, § 12955, subd. (a), italics indicating language added by Stats. 1999 (S.B. No.
1098).) The 1999 FEHA amendment defined “source of income” more narrowly than
does San Francisco’s ordinance. In FEHA, the term means “lawful, verifiable income
paid directly to a tenant or paid to a representative of a tenant,” where “a landlord is not
considered a representative of a tenant.” (Gov. Code, § 12955, subd. (p)(1).)
This definition means that Section 8 subsidies, because they are paid directly to
the landlord, do not count as a tenant’s income for purposes of FEHA’s source-of-income
provision. (Sabi, supra, 183 Cal.App.4th at p. 934.) Nothing in FEHA prevents a
landlord from opting out of the Section 8 program, but FEHA is not altogether silent on
the subject of government rent subsidies. Another provision added to FEHA in 1999
makes it unlawful, “[i]n instances where there is a government rent subsidy, to use a
financial or income standard in assessing eligibility for the rental of housing that is not
based on the portion of the rent to be paid by the tenant.” (Gov. Code, § 12955, subd.
(o).) In other words, state law requires a landlord evaluating a potential tenant’s ability to
pay rent to consider only whether the tenant can pay the portion of the market rent for
which the tenant will personally be responsible, rather than artificially including the
portion of the rent that the government will pay on the tenant’s behalf. This provision
protects Section 8 program participants from having their finances unfairly assessed, but
does not prevent a landlord from discriminating against or excluding Section 8 tenants
simply because the landlord prefers not to participate in the program.
Of central importance to this case, FEHA has a provision that expressly addresses
preemption of local ordinances. It states:
“While it is the intention of the Legislature to occupy the field of regulation of
discrimination in employment and housing encompassed by the provisions of this part,
exclusive of all other laws banning discrimination in employment and housing by any
city, city and county, county, or other political subdivision of the state, nothing contained
6
in this part shall be construed, in any manner or way, to limit or restrict the application of
Section 51 of the Civil Code.” (Gov. Code, § 12993, subd. (c).)
DISCUSSION
An order granting a preliminary injunction may be appealed. (Code Civ. Proc.,
§ 904.2, subd. (g).) Ordinarily we review such orders for an abuse of discretion, but
where, as here, the issue is purely one of law, our standard of review is de novo.
(Thomsen v. City of Escondido (1996) 49 Cal. App. 4th 884, 890.)
Where an otherwise valid local ordinance conflicts with the state’s general law,
that ordinance is preempted, and thus void. (City of Riverside v. Inland Empire Patients
Health & Wellness Center, Inc. (2013) 56 Cal. 4th 729, 743 (Riverside); Sherwin-
Williams Co. v. City of Los Angeles (1993) 4 Cal. 4th 893, 897 (Sherwin-Williams).)
“ ‘ “A conflict exists if the local legislation ‘ “duplicates, contradicts, or enters an area
fully occupied by general law, either expressly or by legislative implication.” ’ ” ’ ” (City
of Riverside, at p. 743.) Local legislation “duplicates” state law “ ‘when it is coextensive
therewith.’ ” (Ibid.) It “contradicts” state law “ ‘when it is inimical thereto.’ ” (Ibid.)
And it “ ‘enters an area that is “fully occupied” by general law when the Legislature has
expressly manifested its intent to “fully occupy” the area [citation], or when it has
impliedly done so in light of’ ” certain indicia of intent. (Ibid.)
The burden of proving preemption rests on appellants as the parties asserting it.
(Big Creek Lumber Co. v. County of Santa Cruz (2006) 38 Cal. 4th 1139, 1149 (Big
Creek).) That burden is especially heavy where “there is a significant local interest to be
served which may differ from one locality to another.” (Ibid.) In such cases, a
“ ‘presumption favors the validity of the local ordinance against an attack of state
preemption.’ ” (Ibid.) “[W]hen local government regulates in an area over which it
traditionally has exercised control,” such as land use legislation, “California courts will
presume, absent a clear indication of preemptive intent from the Legislature, that such
regulation is not preempted by state statute.” (Ibid.; see also Riverside, supra, 56 Cal.4th
at p. 743; Browne v. County of Tehama (2013) 213 Cal. App. 4th 704, 719.) Conversely,
“if the subject matter is one of general or statewide concern, the Legislature has
7
paramount authority,” and a rebuttable presumption arises that state statutes preempt
local legislation covering the same matter. (Northern Cal. Psychiatric Society v. City of
Berkeley (1986) 178 Cal. App. 3d 90, 106-107 & fn. 4 (Psychiatric Society).)
Appellants argue that section 3304’s source-of-income housing discrimination
provision is preempted on two theories. First, they argue that FEHA expressly preempts
section 3304’s source-of-income provision. Pointing to the language of section 12993,
subdivision (c) that expresses “the intention of the Legislature to occupy the field of
regulation or discrimination in employment and housing encompassed by the provisions
of this part,” they argue that FEHA “expressly occupies the field of source of income
housing discrimination to the exclusion of all local laws.” Second, appellants argue that
FEHA impliedly preempts San Francisco’s source-of-income discrimination provision
because FEHA leaves a landlord free to choose whether to participate in the Section 8
housing program, whereas section 3304 compels participation. The ordinance thus
“directly contradicts the policy choice made by the [L]egislature in FEHA,” appellants
argue.
For the reasons explained below we disagree, and conclude that section 3304 is
valid and enforceable to the extent that it prohibits landlords from discriminating against
Section 8 tenants.
I. Express Preemption of an Area Occupied by State Law
“Express field preemption turns on a comparative statutory analysis: What field of
exclusivity does the state preemption clause define, what subject matter does the local
ordinance regulate, and do the two overlap?” (California Grocers Assn. v. City of Los
Angeles (2011) 52 Cal. 4th 177, 188 (California Grocers).)
A. FEHA’s Field of Exclusivity
The parties and amici offer three different answers to the first question, as to what
field of exclusivity FEHA’s preemption clause defines. The People’s answer is the
narrowest: FEHA’s field of exclusivity reaches no further than the forms of
discrimination that FEHA itself covers. The practice of refusing to rent to Section 8
participants is one that FEHA does not address, so FEHA does not preempt an ordinance
8
addressing this practice, the People argue. A brief submitted by the San Francisco
Apartment Association and others (collectively the Apartment Association) takes the
opposite view. FEHA’s field of exclusivity reaches all forms of discrimination in
employment and housing, the Apartment Association argues. On this view, section 3304
is preempted simply because it is local legislation banning a form of discrimination in
housing.
Appellants take a middle ground. They argue that FEHA’s express preemptive
reach extends no further than the categories of housing discrimination specifically set
forth in the statute. Government Code section 12955, subdivision (a) prohibits
discrimination on the basis of 14 categories, among them “race, color, religion, . . . [and]
source of income. . . .” Appellants argue that, as to each of these 14 categories, FEHA
expressly preempts local regulation, and FEHA preempts section 3304 because the
ordinance outlaws discrimination based on one of these 14 factors—source of income. In
their reply brief, appellants concede that FEHA does not preempt local ordinances
addressing housing discrimination based on attributes other than the 14 listed in
Government Code section 12955, subdivision (a), for example age discrimination in
housing. (See Rental Housing Assn. of Northern Alameda County v. City of Oakland
(2009) 171 Cal. App. 4th 741, 761 (Rental Housing).)2
We think the People have the better argument in narrowly defining FEHA’s field
of exclusivity. Consider the statutory language. The Legislature expressed its intention
“to occupy the field of regulation of discrimination in employment and housing
encompassed by the provisions of this part . . . .” (Gov. Code, § 12993, subd. (c), italics
added.) The most natural reading of the italicized language is that it modifies the phrase
that precedes it. That is, it narrows the occupied field from all “regulation of
2
At oral argument, appellants attempted to walk back this concession. Without
abandoning the argument in their brief, which counsel characterized as their stronger
argument, appellants adopted in the alternative the Apartment Association’s argument for
a broad field of exclusivity. For clarity, we will continue identifying this alternative
argument as the Apartment Association’s theory.
9
discrimination in employment and housing” to only such regulation of discrimination as
is “encompassed by the provisions of” Part 2.8 of the Government Code, or FEHA. (See
Gov. Code, § 12900 et seq.) From this occupied field, “all other laws banning
discrimination in employment and housing by any city, city and county, county, or other
political subdivision of the state” are excluded, with an exception not relevant here
allowing for local enforcement of the Unruh Civil Rights Act. (Gov. Code, § 12993,
subd. (c); Rojo, supra, 52 Cal.3d at p. 78.) By adding the phrase “encompassed by the
provisions of” FEHA, the Legislature has defined the field of exclusivity as those acts of
discrimination that FEHA itself regulates.
Appellants do not so much quarrel with this analysis as seek to bring their
challenge within it, arguing that FEHA’s field of exclusivity reaches all source-of-income
housing discrimination. Appellants argue that because FEHA expressly prohibits
housing discrimination based on “source of income,” the statute’s field of exclusivity
reaches any source-of-income housing discrimination ordinance, including section 3304.
The problem with this argument is that it ignores FEHA’s definition of “source of
income.” (Gov. Code, § 12955, subd. (p).) Section 12955 expressly defines the term,
alone among the 14 categories of housing discrimination that it prohibits. It states,
“ ‘ “source of income” means lawful, verifiable income paid directly to a tenant . . . ,’ ”
expressly excluding funds paid to the landlord on the tenant’s behalf. If this definition,
which all agree excludes Section 8 subsidies (see Sabi, supra, 183 Cal.App.4th at
pp. 935, 942), is what FEHA means by “source of income,” then we see no reason to
enlarge the definition when analyzing preemption. The language of the statute provides
no principled basis for tacking discrimination against Section 8 program participants onto
FEHA’s otherwise narrow field of exclusivity.
Appellants’ middle-ground argument would have us include discrimination against
Section 8 program participants within FEHA’s field of exclusivity because of the way
San Francisco drafted its ordinance to include Section 8 payments in the definition of
“source of income.” If San Francisco had instead defined “source of income” as FEHA
does, and then added a separate provision outlawing discrimination against Section 8
10
tenants, FEHA would not preempt the Section 8 provision, according to this middle-
ground argument, because participation in the Section 8 program is not one of FEHA’s
14 enumerated categories. But it cannot be that San Francisco’s drafting choice—to call
discrimination against Section 8 participants “source of income” discrimination—
somehow expands FEHA’s field of exclusion. FEHA defines its own field of exclusivity,
which comprises housing discrimination based on “source of income” as FEHA, itself,
defines that term.
Appellants protest that this reading of the statutory language is so narrow that it
renders FEHA’s field of exclusivity meaningless. We disagree. Although narrow, this
field of exclusivity acts to prevent cities and counties from enforcing their own laws
regarding the kinds of discrimination in housing and employment that FEHA addresses.
For example, local legislation cannot add to the remedies available for victims of racial
discrimination in housing, nor create a cause of action with a more forgiving statute of
limitations if a landlord discriminates based on a tenant’s religion.
The Apartment Association avoids the problems with appellants’ middle-ground
approach by urging a much broader field of exclusivity. The Apartment Association
argues that FEHA preempts all regulation of discrimination in housing and employment,
but this interpretation of the statute runs up against problems of its own.
First, the language of FEHA’s preemption clause cannot be read to stake out such
a broad field of exclusion without rendering superfluous the statutory phrase
“encompassed by the provisions of this part.” (Gov. Code, § 12993, subd. (c).)
Whenever possible, we “avoid a construction that makes some words surplusage,” so as
to give significance to all of the language the Legislature used to convey its purpose.
(Agnew v. State Bd. of Equalization (1999) 21 Cal. 4th 310, 330.) The Legislature
characterized the field it intended FEHA to occupy as “the field of regulation of
discrimination in employment and housing encompassed by the provisions of this part,”
and we see no reason to read the italicized language out of this description of the field.
Second, the Apartment Association’s interpretation runs contrary to cases that
have more narrowly construed FEHA’s preemptive reach. Most recently, Rental Housing
11
holds that FEHA does not preempt an ordinance prohibiting certain age discrimination in
housing. (Rental Housing, supra, 171 Cal.App.4th at p. 761.) The court reaches this
conclusion for two reasons, one being that FEHA does not address age discrimination in
housing, and FEHA’s preemption clause “limit[s] the preemptive reach of the FEHA to
discrimination on the basis of the grounds explicitly covered by the FEHA.” (Rental
Housing, at p. 762, fn. 15; see also San Jose Country Club Apartments v. County of Santa
Clara (1982) 137 Cal. App. 3d 948, 952 [FEHA does not preempt ordinance addressing
age discrimination in housing].) An earlier case reached a similar result, finding no
preemption of a local ordinance prohibiting housing discrimination against people with
HIV or AIDS. (Citizens for Uniform Laws v. County of Contra Costa (1991) 233
Cal. App. 3d 1468, 1473 (Citizens).) When Citizens was decided, FEHA’s list of protected
categories for housing discrimination did not address physical handicap, HIV, or AIDS,
although FEHA did outlaw employment discrimination on this basis. (Citizens, at
p. 1473.) In Citizens, the court observed it was at least “arguable that FEHA does not
occupy the field of housing discrimination based on physical handicap,” but then
resolved the case on the grounds that the local ordinance did not occupy the same field as
FEHA because the ordinance was a pressing public health measure, while FEHA’s
purpose was “to protect civil rights.” (Citizens, at pp. 1474-1475.)
Third, the Apartment Association’s interpretation ignores the presumption against
preemption when a local government regulates land use. Well-established under the
California Constitution is the principle that “a municipality has broad authority, under its
general police power, to regulate the development and use of real property within its
jurisdiction to promote the public welfare.” (California Building Industry Assn. v. City of
San Jose (2015) 61 Cal. 4th 435, 455.) Exercising these police powers, local governments
can interfere in the private housing market, for example with inclusionary housing
ordinances that require residential builders to set aside a certain percentage of new units
as affordable housing. (Id. at pp. 442-444.) Indeed, state law tasks local governments
with adopting plans of action to assist in meeting the housing needs of their low-income
households. (Id. at p. 445.) An ordinance prohibiting discrimination against Section 8
12
program participants thus fits well within the sphere of land use regulation in which local
ordinances are presumptively valid. 3 Courts require “a clear indication of preemptive
intent from the Legislature” before finding that a state statute preempts such regulation.
(Big Creek, supra, 38 Cal.4th at p. 1149.) Even the Apartment Association concedes that
the phrase “encompassed by the provisions of this part” introduces ambiguity into
FEHA’s preemption clause. In the face of any such ambiguity, we cannot conclude that
FEHA’s preemptive reach extends to local concerns such as discrimination against
participants in the Section 8 program.
The Apartment Association protests that the California Supreme Court has already
construed FEHA’s preemption clause as occupying the broad field of all local regulation
of housing discrimination. They point to dicta in Rojo, a case in which the court held that
FEHA does not preempt state common law remedies for housing discrimination. (Rojo,
supra, 52 Cal.3d at p. 76.) In reaching this conclusion, the court confronted two
ambiguities in the language of FEHA’s preemption clause: whether “occupy the field”
means to displace all law or only local law, and whether “ ‘exclusive of all other laws’ ”
passed by local governments means “ ‘to the exclusion of’ ” local laws, or something
else. Analyzing legislative history, the court resolved these ambiguities. It concluded
that, “consistent with the Legislature’s intent to occupy the field of housing
discrimination regulation, the fair housing act was to exclude all other local laws banning
housing discrimination,” except for those relating to enforcement of the Unruh Civil
Rights Act. (Rojo, at pp. 76, 78, italics added.) But the court did not construe the phrase
3
By contrast, Delaney v. Superior Fast Freight (1993) 14 Cal. App. 4th 590, 596-
598 (Delaney) (overruled in part on other grounds by Claxton v. Waters (2004) 34
Cal. 4th 367), on which the Apartment Association relies, addresses discrimination in
employment, which Delaney characterizes as a matter of statewide concern. (Delaney, at
p. 598.) Employees working for a freight company move across jurisdictional
boundaries, which real estate does not, and the ordinance at issue in Delaney barred
employment discrimination on the basis of sexual orientation, a problem that, although
FEHA did not yet reach it, was expressly addressed in the state’s Labor Code. (Delaney,
at pp. 596-598; see also Psychiatric Society, supra, 178 Cal.App.3d at p. 101.)
13
“encompassed by the provisions of this part,” nor determine the field of exclusivity from
which these local laws relating to housing discrimination were excluded. Because “cases
are not authority for propositions not considered” (People v. Alvarez (2002) 27 Cal. 4th
1161, 1176), Rojo sheds no light on the issue before this court.
Having defined FEHA’s field of exclusivity, we turn now to the related questions
of what subject matter the local ordinance regulates, and whether that subject matter
overlaps with FEHA’s narrow field of exclusivity.
B. FEHA’s Overlap with the Subject Matter of Section 3304
Section 3304 is broad in scope, and while other portions of it may overlap with
FEHA, Section 3304’s prohibition on discrimination against participants in the Section 8
program does not. When the Board of Supervisors first amended section 3304 to add
what it called “source of income” discrimination in 1998, there was no overlap between
the subject matter of the ordinance and FEHA, so the “source of income” provision of the
ordinance was not preempted at all. When FEHA was amended the following year, a
portion of what section 3304 termed “source of income” discrimination came to duplicate
a practice that FEHA now covers. Specifically, section 3304, like FEHA, outlaws
discrimination based on the source of a tenant’s lawful income, to the extent that income
is paid directly to the tenant. For example, both section 3304 and FEHA outlaw
discrimination against a tenant based on where she earns her wages, or whether she
receives general assistance or private grant money that she then puts toward the rent. But
this kind of discrimination is not our case.
The portion of section 3304’s source-of-income provision that is relevant here is
the portion that protects from discrimination tenants who receive rent subsidies paid to
the landlord rather than directly to the tenant, including Section 8 subsidies from the San
Francisco Housing Authority. All agree that FEHA’s prohibition on source-of-income
discrimination does not reach landlords avoiding the Section 8 program (Sabi, supra, 183
Cal.App.4th at p. 942), so the relevant portion of section 3304 does not overlap with
FEHA’s anti-discrimination provision. (Compare Gov. Code, § 12955, subds. (a), (p)(1)
with S.F. Police Code, § 3304, subd. (a)(5).) The portion of section 3304 that protects
14
tenants receiving rental assistance paid directly to their landlords is, accordingly, not
preempted.
The People argue that section 3304’s source-of-income provision is not within
FEHA’s field of exclusivity because it serves a different purpose. Certainly case law
provides authority for the proposition that “local laws are not preempted by state statutes
when they serve different purposes.” (Rental Housing, supra, 171 Cal.App.4th at p. 761;
see also Birkenfeld v. City of Berkeley (1976) 17 Cal. 3d 129, 149 [local legislation and
state law “not necessarily in conflict” if their purposes are “sufficiently distinct”].) But
we are mindful of the teaching of California Grocers, supra, 52 Cal. 4th 177, that
“[p]urpose alone is not a basis for concluding a local measure is preempted.” (Id. at
p. 190 & fn. 4.) Instead of purpose, California Grocers focuses us on “whether the effect
of the local ordinance is in fact to regulate in the very field the state has reserved to
itself,” which is a succinct summary of the approach for analyzing express preemption.
(Id. at p. 191.)
In this case, whether one focuses on purpose or effect the result is the same
because of the way FEHA itself defines its purpose. Government Code section 12920,
recites the 14 categories of housing discrimination that FEHA forbids and then states,
“the purpose of [FEHA is] to provide effective remedies that will eliminate these
discriminatory practices.” (Gov. Code, § 12920, italics added.) In other words, the
purpose of FEHA is precisely as broad—and as narrow—as the field of exclusivity that
FEHA’s preemption clause demarcates. The statute’s purpose is “to provide effective
remedies” for the 14 categories of “discriminatory practice[]” that FEHA itself addresses.
All agree that FEHA does not reach the discriminatory practice of a landlord refusing to
rent to a participant in the Section 8 program. This means that San Francisco’s ordinance
prohibiting such conduct has, by definition, a different purpose from FEHA. To the
extent that “purpose” is relevant in analyzing whether state law expressly preempts an
ordinance, the analysis only confirms our view that, to the extent San Francisco’s
ordinance prohibits landlords from opting out of the Section 8 program, FEHA does not
expressly preempt it.
15
II. Implied Preemption
Appellants argue in their opening brief that FEHA not only expressly preempts
section 3304, but it does so by implication because FEHA embodies a policy choice that
Section 3304 directly contradicts. Appellants argue that the Legislature chose to leave to
landlords the decision whether they would participate in the Section 8 program, and
section 3304 deprives landlords of this choice.
To the extent that appellants are urging the “ ‘contradictory and inimical’ form of
preemption,” their argument fails because section 3304 does not “require[] what the state
statute forbids or prohibit[] what the state enactment demands.” (Riverside, supra, 56
Cal.4th at p. 743.) FEHA does not expressly authorize landlords to abstain from
participating in Section 8, nor does it clearly promote this practice. A landlord who does
not discriminate against Section 8 tenants complies with both FEHA and section 3304.
This means there is no inherent contradiction between FEHA and the San Francisco
ordinance, and no preemption on this theory. (See also Sherwin-Williams, supra, 4
Cal.4th at p. 902.) Psychiatric Society, the primary case on which appellants rely, is
distinguishable because there the state statute expressly stated its purpose was to assure
the “free choice” of patients to undergo a medical procedure that the local ordinance
prohibited. (Psychiatric Society, supra, 178 Cal.App.3d at p. 105.) Here, FEHA
expresses no similar preference for leaving to landlords the decision whether or not to
participate in the Section 8 program.
To the extent that appellants are urging preemption on a theory of implied field
preemption, their argument likewise fails. Where, as here, the Legislature has expressly
set forth the field it intends a statute to preempt, courts are reluctant to find preemption
elsewhere. (Big Creek, supra, 38 Cal.4th at p. 1157.) Especially in a case such as this
one, where the ordinance being challenged addresses a land use issue of local concern,
we decline to find field preemption beyond the bounds expressly set forth by the
Legislature in FEHA’s preemption provision. (See Psychiatric Society, supra, 178
Cal.App.3d at p. 101.)
16
The challenged provision of Section 3304 is not preempted by implication or by
contradiction. It remains fully in force.
DISPOSITION
We affirm the decision of the trial court and remand for further proceedings not
inconsistent with this decision. Appellants are to bear costs on appeal.
17
_________________________
Tucher, J.*
We concur:
_________________________
Richman, Acting P.J.
_________________________
Miller, J.
A149136
* Judge of the Alameda County Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.
Trial Judge:
18
Trial Court: San Francisco County Superior Court
Trial Judge: Ronald E. Quidachay
Attorneys for Defendants and Appellants: Law Offices of Edward Singer
Edward Charles Singer, Jr.
Attorneys for Amicus Curiae: Zacks Freedman & Patterson
San Francisco Apartment Association, Andrew Zacks
San Francisco Association of Realtors,
Small Property Owners of San Francisco Law Office of Paul J. Katz
Institute, and California Apartment Paul J. Katz
Association
Attorneys for Plaintiffs and Respondents: Office of the City Attorney
Dennis J. Herrera
Yvonne R. Meré
Chief Attorney
Sara J. Eisenberg
Deputy City Attorney
Bradley A. Russi
Deputy City Attorney
Attorneys for Amicus Curiae Munger, Tolles & Olson LLP
Tenants Together Michael E. Soloff
19