Reported / Citable
Background
Civil Code section 1940.1 was enacted to curb the “28-day shuffle,” the practice of some residential hotels that requires guests to move out or to check out and reregister every 28 days to avoid the legal protections that come with tenant status after 30 days of occupancy. The statute creates a private right of action for guests of qualifying “residential hotels” who can prove that the hotel required them to move out or reregister before reaching 30 days, with a purpose of maintaining transient occupancy.
Melissa Aerni and Katherine Atsaves stayed at the Red Roof Inn in San Dimas, a 134-room economy hotel, on multiple occasions in 2022. Each time, they registered for the maximum 28-day stay, were required to vacate the property for at least three days, and then re-registered. They brought a putative class action alleging that the hotel’s 28-day policy violated section 1940.1.
The trial court found the proposed class numerous, ascertainable, and adequately representative, but denied class certification on the ground that individualized issues predominated over common ones. The trial court interpreted section 1940.1 to require individualized proof that each class member used the hotel as their primary residence. Plaintiffs appealed.
The Court’s Holding
The Second District Court of Appeal, Division Three, reversed and remanded. The court held that the trial court committed legal error in interpreting section 1940.1 to require individualized proof that each class member used the hotel as their primary residence. The statute defines a “residential hotel” based on whether the hotel itself is used or intended to be used by guests as their primary residence, with an exception for hotels “primarily” used by transient guests who have other primary residences.
That definitional inquiry focuses on the character of the hotel as a whole, not on the residential status of each individual class member. A class member need only show that the hotel met the statutory definition of a residential hotel during the relevant period and that the hotel required the class member to move out or reregister before 30 days, with a purpose of maintaining transient occupancy. None of these elements requires individualized proof that the particular class member used the hotel as their own primary residence.
The court noted that there are real ambiguities in the statute, including how to determine when a hotel is “primarily” used by transient guests, what numerical threshold defines “primary residence” usage of the hotel as a whole, and what time period to use in assessing residential status. The court urged the Legislature to clarify these ambiguities, but emphasized that they go to the merits of the claim and do not change the analysis at the class certification stage. Because the trial court denied certification based on a legal error, the case must be remanded for the court to redetermine the motion under the correct legal framework.
Key Takeaways
- Civil Code section 1940.1 turns on whether the hotel itself qualifies as a residential hotel, not on whether each individual guest used the hotel as their personal primary residence.
- Class certification denials based on a misinterpretation of the substantive statute are reversible legal error.
- Plaintiffs in section 1940.1 class actions can focus their proof on the character of the hotel as a whole, the existence of the move-out or reregistration policy, and the purpose of avoiding tenant protections.
- The statutory ambiguities about “primarily” transient use and the relevant time period for evaluating a hotel’s status are merits issues, not class certification issues.
- Hotels enforcing 28-day stay policies should expect more class action litigation as plaintiffs use this opinion to defeat predominance arguments.
Why It Matters
The decision is an important development in California residential hotel law. Many low-end hotels and motels have used 28-day policies to avoid creating tenant relationships, and this opinion confirms that California law affords protection to these guests through section 1940.1. By rejecting the trial court’s individualized-proof interpretation, the Court of Appeal makes class action enforcement more viable, which is the only practical way many of these claims can be litigated.
For hotel owners and operators, the case is a strong signal to review and reconsider 28-day policies, particularly at properties where guests appear to use the hotel as a primary residence. For plaintiffs’ lawyers, the opinion provides a clear framework for class certification and underscores the importance of focusing the evidentiary record on the hotel’s character and policies rather than on each guest’s individual circumstances.