McHugh v. Santa Monica Rent Control Bd

In McHugh v. Santa Monica Rent Control Bd. (1989) 49 Cal.3d 348, a local charter amendment authorized the rent board to issue an administrative order allowing a tenant to withhold future rent to recoup past overcharges. The tenant also could rely on the board's order as a defense to any unlawful detainer action filed for nonpayment of rent. (Id. at pp. 354, 376.) Reiterating the principle that "agencies not vested by the Constitution with judicial powers may not exercise such powers" (id. at p. 356), the California Supreme Court articulated the following standard: "An administrative agency may constitutionally hold hearings, determine facts, apply the law to those facts, and order relief--including certain types of monetary relief--so long as (i) such activities are authorized by statute or legislation and are reasonably necessary to effectuate the administrative agency's primary, legitimate regulatory purposes, and (ii) the 'essential' judicial power (i.e., the power to make enforceable, binding judgments) remains ultimately in the courts, through review of agency determinations." (Id. at p. 372.) The court found that under the local administrative charter, " 'the principle of check' " was not respected because before a court could rule on whether to stay the rent board's withholding order, the order was immediately enforceable at the discretion of a private party. (Id. at pp. 376-377)