Update on State Court Prop M Lawsuit

On May 19, 2009, the Superior Court upheld all of Proposition M with two exceptions. First, the Court concluded that the phrase "with ulterior motive or without honest intent" is unconstitutionally vague and is therefore severed under Proposition M's severance clause, but that the phrase "in bad faith" was lawful and enforceable. Second, the Court concluded that the attorney fees provision in Section 37.10B(c)(6) violates the Equal Protection Clause because "it authorizes attorney fees to a single class of litigants or in a single class of cases." The Court rejected Petitioners' other legal arguments. Thus, except for the phrase "with ulterior motive or without honest intent" and the attorneys' fee provision in Section 37.10B(c)(6), the rest of Proposition M is now enforceable.  The stay previously issued that prevented the City from enforcing Sections 37.10B(a)(6), (7), & (8) of Prop M is no longer in effect, and the Rent Board will accept and process all tenant petitions with Prop M decreased housing service claims.

It should be noted that a separate lawsuit challenging Proposition M is still pending in federal court, and the court's ruling in the state court lawsuit may also be appealed.