Today the city of Indio, California, has agreed to settle a class action lawsuit brought by the Institute for Justice (IJ) on behalf of Ramona Morales and other Riverside County residents forced to pay outrageously high attorney’s fees to a law firm called Silver & Wright. The city had hired the firm to enforce its municipal codes. As part of the settlement, Indio has agreed to return all prosecution fees that Silver & Wright collected and not oppose IJ in its efforts to have residents’ underlying municipal code convictions vacated in court.

Unlike Indio, Coachella, Calif., which also contracted with Silver & Wright, remains a party to the lawsuit, as does the firm in its capacity as Coachella’s official city prosecutor.

“It should not have taken a class action lawsuit to expose the injustice of the cities’ and Silver & Wright’s scheme to charge homeowners outrageously high fees for minor housing code violations,” said Jeffrey Redfern, an attorney at the Institute for Justice, which represents the plaintiffs. “But it did. Thankfully, immediately after we filed suit, Indio recognized that these prosecution fees were the wrong way to enforce the law and obtain compliance. They swiftly put an end to the ‘cost recovery’ practices promoted by Silver & Wright. And now, with this settlement, they have also agreed to reimburse anyone caught up in this scheme.  We appreciate Indio re-examining its policy early in the litigation to resolve this issue.”

Three months after IJ filed its lawsuit in February 2018, the California legislature almost unanimously passed A.B. 2495, which prohibits cities from charging residents for prosecution fees in criminal code enforcement cases. Yet even though the practice is now outlawed going forward, IJ’s lawsuit against Coachella will proceed until the city agrees, or a judge orders, that the city reimburse those fees it already imposed against the plaintiffs and other residents.

The issues started in 2014, when Silver & Wright began to approach cities with an offer that seemed almost too good to be true: “cost neutral or even revenue producing” housing code prosecution services, as its promotional material stated. But Silver & Wright’s scheme was too good to be true, as it required that the cities amend their code to allow Silver & Wright to collect attorney’s fees for anyone who pleaded, or was found, guilty. That led to Silver & Wright billing residents thousands if not tens of thousands of dollars for mundane code enforcement matters that could have otherwise been resolved with a simple phone call, or, at worst, a simple ticket without drawing up criminal charges. It also led to their city clients, such as Indio, becoming entangled in unexpected litigation because of their actions toward city residents.

One of those residents was Ramona Morales, an Indio homeowner who was billed nearly $6,000 by Silver & Wright after she agreed to pay a $225 fine for her tenant’s illegal backyard chickens. Ramona, who works as a housekeeper, was flabbergasted and agreed to join IJ’s lawsuit as the class representative.
The lawsuit has already survived multiple motions to dismiss, and we anticipate it moving forward in the courts in the new year.