## Facts

- Santa Monica voters adopted a rent control charter amendment creating a Rent Control Board to set maximum rents, limit evictions, issue regulations, and hear complaints of ordinance violations.
- The charter amendment provided civil remedies for excess rent, including restitution and, for intentional overcharges, statutory multiple damages; it also made violations misdemeanors.
- The charter amendment required the Board to establish an administrative process to adjudicate tenant claims that landlords charged rent above the lawful maximum and to award relief.
- Tenants filed administrative complaints alleging that Haidy McHugh, a landlord, charged rent in excess of the lawful maximum.
- After hearings, the Board found overcharges and ordered restitution; the administrative scheme also contemplated treble damages and permitted rent withholding to satisfy an award.
- McHugh sought mandate relief in superior court, asserting that allowing the Board to adjudicate excess-rent disputes and award treble damages and rent-withholding relief impermissibly conferred judicial power on an agency.
- The trial court held the administrative excess-rent remedy unconstitutional; the Court of Appeal reversed; the California Supreme Court granted review to address the judicial powers issue.

## Issues

1. Whether administrative adjudication of excess-rent claims by a local rent control board violates article VI, section 1 of the California Constitution by conferring judicial power on an administrative agency.
2. Whether authorizing the Board to impose treble damages in the administrative proceeding violates the judicial powers clause.
3. Whether an order permitting immediate rent withholding to satisfy the Board’s award violates the judicial powers clause on the facts presented.

## Decision

- The court held that administrative adjudication of excess-rent claims, including fact-finding and an order of restitution, is constitutionally permissible and does not by itself violate the judicial powers clause.
- The court held that administrative imposition of treble damages exceeds the Board’s constitutionally permissible authority and violates the judicial powers clause.
- The court held that the Board’s order authorizing immediate rent withholding, as applied in this case, violated the judicial powers clause.
- The court affirmed in part and reversed in part, preserving the administrative mechanism for determining overcharges and ordering restitution, while invalidating the treble-damages remedy and the immediate rent-withholding enforcement feature.

## Legal Principles

- Administrative agencies may exercise quasi-judicial functions incident to a regulatory program, including adjudicating disputes and ordering remedial relief tied to the program’s administration.
- Restitution of unlawful rent overcharges is a remedial measure that may be awarded in agency adjudication without infringing article VI, section 1.
- Punitive or exemplary multiple damages (such as treble damages) are a hallmark of core judicial power and may not be imposed by an administrative body under the judicial powers clause.
- An administrative enforcement device that effectively deprives a party of ongoing payments (such as immediate rent withholding to satisfy an award), without court involvement, may constitute an impermissible exercise of judicial enforcement power.
- The constitutional line turns on the nature of the remedy and whether the agency is limited to regulatory adjudication and restitutive relief rather than judicial sanctions and enforcement.

## Conclusion

California’s judicial powers clause permits a local rent control board to adjudicate tenant overcharge complaints and order restitution, but it bars the board from imposing treble damages or authorizing immediate rent withholding as an enforcement mechanism in the administrative proceeding.


McHugh v. Santa Monica Rent Control Bd., 49 Cal. 3d 348, 777 P.2d 91 (Cal. 1989)