When Ramona Morales agreed to pay a $225 fine for failing to force her tenants to remove a few backyard chickens, she had no way of knowing that what started out as an innocent misunderstanding would ultimately cost her nearly $6,000.
Ramona was one of an untold number of California homeowners who have been caught up in an unconstitutional scheme by a private law firm, Silver & Wright, to turn cities’ property maintenance codes into big business.
On paper, the firm’s business model is straightforward: cities hire Silver & Wright to serve as their official city prosecutor. Then, whenever a property owner agrees to plead guilty and pay a fine—rather than fight it in court—Silver & Wright bills the owner for every second spent prosecuting the case at private firm rates, even if that costs ten or a hundred times more than the original fine. But the reality of Silver & Wright’s business model is much more grim. Cases like Ramona’s—along with many others’—demonstrate the dangers of allowing perverse financial incentives to distort the justice system.
California courts have made it clear that it is illegal for prosecutors to have a direct financial stake in the cases they bring. That’s why, today, Ramona has partnered with the Institute for Justice—a national, public interest law firm—and the California office of O’Melveny & Myers to file a class action lawsuit asking the California courts to shut down Silver & Wright’s unconstitutional scheme.
“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,” said Jeffrey Redfern, an attorney at the Institute for Justice, which represents Ramona. “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.”
Ramona Morales has worked for most of her life cleaning houses and selling Avon makeup in California’s Coachella Valley. In 2015, after receiving a pair of confusing warnings, Ramona received a $75 citation in the mail from the city of Indio. It said that a city inspector noticed a chicken in the backyard of a home she rents out. Rather than resolving the matter administratively—which is commonplace elsewhere—the city and Silver & Wright went directly to criminal court, which meant that Indio police also issued a warrant for Ramona’s arrest.
Shocked, Ramona went to court, explained that her tenants were confused about the legality of raising chickens in Indio, and ultimately agreed to pay the nominal fine. She thought the ordeal was over, but it was actually just getting started.
Nearly a year later, Ramona received a bill in the mail from Silver & Wright, demanding $3,030 in attorney’s fees. The firm threatened to sell her property, if she refused to pay. Ramona appealed the fees, lost, and was billed an additional $2,628 for the cost of the appeal. In the end, she paid nearly $6,000 in attorneys fees for a minor infraction of the city code.
Ramona’s fight in Indio is only one of many prosecutions initiated by Silver & Wright. Starting in 2013, dozens of California cities began to hire the newly-formed firm to, among other things, serve as official city prosecutor for code enforcement cases. The firm’s pitch was appealing. It offered “cost neutral or even revenue producing” prosecution services, so long as the city changed its ordinances to allow the firm to directly bill property owners for its full attorneys fees, which range from $159 to $175 per hour. As a result, homeowners agreeing to pay small fines for minor code infractions were later billed thousands of dollars under the guise of “cost recovery” by a law firm acting in an official capacity.
Once cities amended their codes to allow Silver & Wright to bill their time, the firm got to work prosecuting a large number of cases. Although a few cases concerned problem properties, most prosecutions were for fairly minor violations. For instance:
- Long grass;
- A broken garage door;
- Construction without required permits;
- Having address numbers that are “sun damaged”;
- Hanging decorations that encroached on public space;
- Broken windows;
- Renting parking space without a business license, and;
- Of course, keeping chickens.
Like Ramona, or like almost anyone facing a minor infraction such as a traffic ticket, property owners typically plead guilty, believing that they will only have to pay, at most, a modest fine of a few hundred dollars.
“As we’ve seen in so many other areas of law, perverse financial incentives have no place in the justice system,” said IJ Attorney Josh House. “Government prosecutors have a duty to seek justice, not maximize earnings or generate revenue for a city. In Indio, and across California, Silver & Wright is treating homeowners like ATMs. The U.S. Supreme Court has made it clear that prosecutors cannot have a personal financial stake in the cases they bring. We’re confident the California courts will see this for what it is: an illegal attempt to turn a profit off of the criminal justice system.”
Ramona and the Institute for Justice have filed a class action against the City of Indio, the City of Coachella, and Silver & Wright in its official capacity as city prosecutor for both cities. The lawsuit asks the court to vacate Ramona’s conviction and return the fees she paid because, at the time she pleaded guilty, she had no idea that her prosecutor had a personal, financial stake in the case. Had she known, she could have defended herself by pointing out that the prosecution was unconstitutional. As a class action, the lawsuit seeks to establish a precedent that would shut down Silver and Wright’s unconstitutional prosecutions across California.