The Hillsdale Apartments, located inside this 106-year-old building on E Street in Eureka. | File photo by Andrew Goff.

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A settlement agreement has been reached in a class-action lawsuit against Eureka landlord, real estate investor and mayoral candidate Anil Dwivedi. Next Friday, a judge is set to decide on the proposal that would pay sums to tenants who received rent increase notices and implement court-ordered monitoring provisions to prevent future unlawful hikes.

The agreement was reached by attorneys for Dwivedi and those representing multiple tenants of the Hillsdale Apartments, who sued him for rent increases in early 2025 that they said exceeded the legal limit of 8.8% under the California Tenant Protection Act. According to the lawsuit, one tenant’s rent went up by 82.5% following the January 2025 notice.

The notice informed tenants that if they did not agree to the increase, they could choose to vacate the property by February 28, something tenants previously told the Outpost felt like an ultimatum.

This settlement includes no admission of guilt from Dwivedi, who emphasized he is not admitting liability. The claims are described as “highly disputed” in the agreement.

Under this proposed agreement, Dwivedi would pay a total of $102,750 into a settlement fund. Up to $92,000 can go toward attorneys’ costs.

Each eligible tenant of the apartments would automatically receive a sum from this fund, based on an agreed-upon formula. Tenants, if they don’t opt out of the settlement and aren’t in an HUD-subsidized unit, would receive the payments on a proportional basis. Preliminary calculations of awards range from $141.35 to $675.91, according to a document in the settlement agreement. This includes any tenants of the building who received rent increases from January 24, 2025 to July 1, 2026. Dwivedi said in an email this includes 29 tenants.

Named plaintiffs would receive an additional $1,000 each.

Additionally, under an injunction lasting 18 months, Dwivedi will be held to certain monitoring and recordkeeping terms aimed at preventing him from overcharging tenants. He would be prohibited from raising rents above legal limits by court order and must submit documentation to a court monitor.

Dwivedi said he is relieved that this litigation appears to be nearing its conclusion, in an emailed response to questions from the Outpost.

Dwivedi. File photo.

“It has consumed substantial time, energy, and financial resources that I would much rather devote to my tenants, my properties, my businesses, and the Eureka community. I look forward to putting this chapter behind us and moving forward constructively,” he said.

He emphasized that his decision to settle should not be characterized as an admission that the allegations of the lawsuit were true.

“Litigation is expensive, time consuming, and uncertain for everyone involved. After considerable time, energy, and resources had already been spent on this case, I concluded that resolving it and moving forward was the practical decision. I agreed to settle because I believe it is time to put this litigation behind us not because I am admitting liability,” he said.

The lawsuit was first filed in 2025, shortly after tenants received notice their rents would be raised following Dwivedi’s purchase of the building.

Dwivedi claimed that tenants did not actually pay the increased rent, because he rescinded the announcement in writing on February 11. “No tenant ever paid a single penny of increased rent pursuant to that January announcement after its proposed effective date, because the announcement had already been rescinded,” he said.

But in their motion to the judge, the tenants’ attorneys, Janssen Malloy LLP,  said among other provisions the settlement is fair for the class members because it includes refunds of improperly collected rent, where applicable.

The agreed-upon formula to pay the class members includes a measure to calculate the total amount of rent paid that exceeded the maximum lawful rent.

And according to court documents, even while this litigation was ongoing, Dwivedi again attempted to raise rents in March 2026, allegedly violating both a preliminary injunction and the Tenant Protection Act. Plaintiffs allege rents were increased exceeding limits in the TPA, and Dwivedi collected these rents (something he denies, according to an addendum to the settlement).

Part of the settlement is a provision for Dwivedi to retract this March increase and repay all rents in excess of the maximum.

Previously, attorney Patrik Griego told the Outpost this additional increase caused an added $8,000 in attorney fees, separate from the other payment.

Griego preferred not to comment on this settlement agreement while it was pending.

The tenants’ attorneys said the settlement would avoid lengthy litigation and provide substantial relief to the settlement class — by providing monetary relief and by preventing future harm, in their motion to the judge.

The parties met in mediation in February, which was followed with negotiations that eventually landed on this settlement. The agreement was signed July 30, 2026, according to court documents. By then, rent increases were rescinded, court minutes indicate.

Judge Timothy Canning would have to agree to this settlement before it can go into effect. According to the settlement, it can be terminated if Canning doesn’t approve it.

Monday in court, attorneys for Dwivedi (Dhillon Law Group) and the tenants said one document had a clerical error that had to be rectified. Plaintiffs’ attorney Megan Yarnall estimated obtaining two remaining signatures of plaintiffs for an updated addendum would take roughly a week.

Canning indicated he would decide on the motion for preliminary approval on October 9.