Challenging a Rent Stabilization Ordinance in Court

In City of Cotati v. Cashman (2002) 29 Cal.4th 69, the parties disputed the validity of a rent stabilization ordinance applicable to mobilehome parks. (Cotati, supra, 29 Cal.4th at p. 71.) Owners of some mobilehome parks sued the city in federal court to challenge the ordinance, and the city reacted by filing its own action in state court. The owners then claimed the city's state court action arose out of their own pursuit of the federal action--which qualified as protected petitioning activity--and thus constituted a SLAPP action. The Supreme Court disagreed, explaining that while the owners' filing of the federal action may have triggered the city's decision to file its own action in state court, the claims stated in the state court suit were not based on the federal court action. Instead, the court concluded that both actions arose out of the parties' underlying controversy about the constitutionality of rent stabilization ordinance. (Id. at p. 78.)