4/14/16

LA CROSSE LAWSUIT HISTORY

Submitted by Pamela J. Strittmater, President AALA; Past President WAA

In 2003, the City of La Crosse set a goal to clean up neighborhoods. Concern brewed among neighbors over unknown code violations that might exist in rentals and a desire to increase property values and reduce blight and crime resulted in the formation of an Ad Hoc Committee to study the feasibility of a Landlord Licensing program.

Three members of the Apartment Association of the La Crosse Area (AALA) were appointed to this committee, which also included council members, city staff, and citizens. Despite great efforts of the AALA members working on behalf of the rental industry to offer efficient, effective, and affordable solutions which addressed the specific information that emerged through these committee meetings, the City Council passed a city-wide mandatory inspection and registration program blanketing the entire landlord community.

City officials promised there would never be registration or inspection fees, and that the scope of the inspection would be limited to health and safety codes. The program included a 5-year sunset clause to permit a follow-up committee to study the results. This committee, which also included AALA members, reviewed various sources of data and discovered several hundred rentals to have never been registered or inspected. The committee also discovered that among those rentals registered and inspected, the overwhelming majority of violations were tenant-behavior related (extension cords used, batteries removed from smoke detectors, personal property stored too close to furnace, etc), and not a productive use of a building inspector’s time to perform repeat 5-year inspections. Owing to the small number of condemnations of structures as unfit for human habitation (9 structures in 10,000 inspections) the committee determined that instead of repeating inspections, the focus should turn to registering and inspecting unregistered rentals that had yet to be inspected at all.

Two years later, the City Council was bluffed into believing that all of the unregistered rentals had been found and inspected. Despite our efforts to work with the City and develop positive working relationships and effective solutions, the City Council passed a revised inspection program modeled directly after the Wausau program. Registration fees were newly added and the scope of the inspections was suddenly expanded to include subjective “Quality of Life” observations such as holes in drywall or condition of carpeting. With the passage of 2013 Wisconsin Act 76, the state legislature pre-empted the city’s power to enact landlord licensing schemes. The city refused to give up their newly tapped revenue stream, and 34 landlords, all members of the AALA, filed suit in May 2014. The points that emerged in the briefs and circuit court testimony:

• The La Crosse City Attorney acknowledged that this issue was of statewide concern
• The La Crosse City Attorney conceded in court testimony that BOTH the property owner and the occupant have the right to invoke the 4th Amendment right to request the City obtain a search warrant.
• The Hon. Judge Scott Horne went on record at the first ruling saying he was prepared to strike the ordinance in its entirety due to violations of constitutional rights, but for an 11th hour short-circuit amendment by City Council, the evening before the ruling, to hurriedly delete the worst offending language which threatened prosecution, fines, and even jail time for a landlord, and seizure and condemnation of the property, if the landlord refused to cooperate with forced warrantless searches.
• The Hon. Judge Scott Horne reconvened a second ruling after reviewing the deletions, determining that the language of 2013 Wisconsin Act 76 was vague in conveying legislative intent to prohibit landlord licensing versus a limit on what type of information the City was authorized to collect.
• The Hon. Judge Scott Horne took several months to produce a written decision against another portion of our lawsuit, which the AALA members took to the Wisconsin Court of Appeals. Olson v. City of La Crosse 869 NW 2d 537 2015 WI App 67.

Our Appellate Court victory was not only recommended for publishing in the official record, but was inserted directly as an annotation into Wis Stat 704 for all of posterity. The achievements of this published decision include:

1. Clarification that the lawful right of the landlord to enter a dwelling unit to inspect does not convey to the city a right for the building inspector to accompany the landlord on such an entry for a government inspection. Every mandatory rental inspection scheme across the state of Wisconsin had been based on the grey-area theory that a city inspector could “piggyback” on the landlord’s right to enter, thereby skirting any fourth amendment “hassles”.
2. Statutory language pre-empting Cities from requiring landlords communicate information to tenants (outside of state or federal requirements) removed the landlord from being stuck in the middle between city inspectors and occupants. The Appellate Court was, in fact, adamant that the City could carry out its building inspections and housing code programs perfectly fine by communicating directly to tenants, including communications specifically regarding inspections. 
3. Within just a few weeks of this ruling being handed down, it was cited several times in another Court of Appeals reversal which delivered justice to the landlords of Wausau.

Through the tireless efforts of many leaders in our industry, the unresolved concerns over the pre-emption language restricting licensing and registration was addressed through skillfully crafted language in 2015 Wisconsin Act 176, which was passed by both houses and signed by Governor Walker in Feb 2016. Act 176 explicitly forbids landlord licensing in the State of Wisconsin.

The City of Wausau has since cancelled all pending inspections and is in the process of wiping their program entirely off their books. The City of Beloit is in discussions of eliminating their mandatory inspections. The City of Kenosha has ceased their discussions of pursuing landlord licensing. The City Attorney of Milwaukee has drafted a letter to the Department of Neighborhood Services recommending complete abolishment of the Certification and Registration programs for landlords, citing in a 5-page analysis of Act 176 that “no licensing” survives under the new law.

The City of La Crosse, however, has not complied with Act 176 and continues to enforce its unlawful scheme against tenants and landlords, including members of AALA and even against several of the original plaintiffs from Olson v. City of La Crosse.

We are in the process of seeking involvement by the State Attorney General. Within a week of our initial request, we had received a response requesting additional information. We were shocked to hear back so quickly, as most inquiries go 3-6 months before a reply. A packet of evidence was crafted by our attorney and is now in the office of the State Attorney General. We anxiously await a reply. In the meantime, we are preparing ourselves for yet another court process.

Our intent is to defend and build upon the tremendous gains that have been achieved by so many of the great professionals of our state-wide industry. Unfortunately, it takes a lot of money to fight the good fight. To this point, we have raised $20,000.00 with the assistance of our members, the WAA, local affiliates, and generous individuals. This is not enough. We need your help to fortify these precedents which will protect our industry from governmental overreach and intrusion, gentrification of our tenants, perpetually burgeoning fees, and the single most core right we all value, our right to rent out our property to earn income, which ought to be an inalienable right of property ownership. Please consider a contribution to help us complete the journey!

AALA Legal Fund Attn:
Duane Roesler
1909 Sunset Drive
La Crosse, WI 54601