Hotel & Motel Ass'n of Oakland v. City of Oakland

• Decision Date: 17 September 2003
• Docket Number: No. 02-15220.,02-15220.
• Citation: 344 F.3d 959
• Parties: Hotel & Motel Association of Oakland; Balu K. Patel; Usha B. Patel; Navin Patel; Tara N. Patel; Bharat Patel; Niketa Patel, Parsottam B. Patel; Gita Patel; Vinod P. Patel; Madhuben V. Patel; Jagdish Patel; Bharti J. Patel; Ramesh D. Patel; Thakorbhai G. Patel; Manjuben T. Patel; Kirit S. Patel; Ranjan K. Patel; Manubhai L. Patel; Shardaben M. Patel; Pravin Patel; Sima Patel; Natwarbhai Patel; Jagdishkumar B. Patel; Jayeshkumar D. Patel; Hasmukh B. Patel; Bhisma Patel; Babubhai K. Patel; Kalaben B. Patel; Vallabh H. Patel; Jamanaben V. Patel; Ranchodbhai D. Patel; Parbhubhai V. Patel; Kamuben P. Patel; Govindbhai Z. Patel; Madhuben G. Patel; Jotindra Patel; Rekha J. Patel; Dilip P. Patel; Kalpana D. Patel; Anil P. Kumar; Sunita A. Kumar; Rajendra K. Kalyan; Pushpa R. Kalyan; Bhupendra K. Kalyan; Bhartiben B. Kalyan; Narbada Kalyan Kalyan; Harish Sharma; Naresh Patel; Bobby Newman, Plaintiffs-Appellants, v. City of Oakland, a municipal corporation; City of Oakland Police Department; City of Oakland Police Officer D. Martinez Sued As Doe 1; City of Oakland Police Officer T. Martin Sued as Doe 2; Oakland Housing Inspector Ronald Abab sued as Doe 3; City Housing Inspector Gerald Donahue Sued as Doe 4, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

344 F.3d 959

Hotel & Motel Association of Oakland; Balu K. Patel; Usha B. Patel; Navin Patel; Tara N. Patel; Bharat Patel; Niketa Patel, Parsottam B. Patel; Gita Patel; Vinod P. Patel; Madhuben V. Patel; Jagdish Patel; Bharti J. Patel; Ramesh D. Patel; Thakorbhai G. Patel; Manjuben T. Patel; Kirit S. Patel; Ranjan K. Patel; Manubhai L. Patel; Shardaben M. Patel; Pravin Patel; Sima Patel; Natwarbhai Patel; Jagdishkumar B. Patel; Jayeshkumar D. Patel; Hasmukh B. Patel; Bhisma Patel; Babubhai K. Patel; Kalaben B. Patel; Vallabh H. Patel; Jamanaben V. Patel; Ranchodbhai D. Patel; Parbhubhai V. Patel; Kamuben P. Patel; Govindbhai Z. Patel; Madhuben G. Patel; Jotindra Patel; Rekha J. Patel; Dilip P. Patel; Kalpana D. Patel; Anil P. Kumar; Sunita A. Kumar; Rajendra K. Kalyan; Pushpa R. Kalyan; Bhupendra K. Kalyan; Bhartiben B. Kalyan; Narbada Kalyan Kalyan; Harish Sharma; Naresh Patel; Bobby Newman, Plaintiffs-Appellants, v. City of Oakland, a municipal corporation; City of Oakland Police Department; City of Oakland Police Officer D. Martinez Sued As Doe 1; City of Oakland Police Officer T. Martin Sued as Doe 2; Oakland Housing Inspector Ronald Abab sued as Doe 3; City Housing Inspector Gerald Donahue Sued as Doe 4, Defendants-Appellees.

No. 02-15220.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted April 10, 2003 — San Francisco, California.

Filed September 17, 2003.

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Frank A. Weiser, Los Angeles, CA, for the appellants.

John A. Russo, City Attorney; Randolph W. Hall, Assistant City Attorney; Arlene Rosen, Deputy City Attorney; and Christopher Kee, Deputy City Attorney, Oakland, CA, for the appellee.

Appeal from the United States District Court for the Northern District of California; Thelton E. Henderson, District Judge, Presiding. D.C. No. CV-99-03758-THE/JCS.

Before NOONAN, McKEOWN, and RAWLINSON, Circuit Judges.

OPINION

McKEOWN, Circuit Judge.

This case arises from a constitutional challenge to a pair of city ordinances that place maintenance and habitability restrictions on hotels, motels, and rooming houses ("hotels") located in Oakland, California. One ordinance requires all hotels to comply with certain maintenance, habitability, security and record-keeping standards. The other ordinance reclassifies those hotels with so-called "non-conforming use" status to "Deemed Approved" status, and requires Deemed Approved hotels to comply with the new standards in order to retain that status. Appellants, the owners and operators of various Oakland hotels as well as their trade association, challenge the ordinances as an unconstitutional taking under the Fifth Amendment. They also claim that the ordinances violate their Fourteenth Amendment rights to procedural due process and equal protection and are unconstitutionally vague. We conclude that the ordinances pass constitutional muster and thus affirm the district court's dismissal of the action.

BACKGROUND

In spring of 1999, the Oakland City Council enacted two ordinances for the express purpose of improving the physical conditions in and around hotels within Oakland. The Council had found over the preceding several years a continuing pattern of illegal activity, including prostitution and drug use, associated with many hotels that were poorly maintained. Steps to control the problem activities, including increased policing and the filing of civil abatement actions by the City Attorney, resulted in little success. The Council concluded that regular maintenance and adequate property management would lead to better outcomes.

The first of these ordinances, Ordinance No. 12136, amends the Oakland Municipal Code ("OMC") to add Chapter 8.03 ("Operating Standards for Hotels, Motel[sic] and Rooming Houses"),¹ which sets forth in detail various regulations with respect to housekeeping conditions, property security, and prevention of criminal and nuisance activity.² The ordinance also amends Chapter 5.34 of the OMC to add specific record-keeping requirements relating to guest receipts.

The companion measure, Ordinance No. 12137, amends the Oakland Planning Code ("OPC") to create a "Deemed Approved Hotel Program" at Chapter 17.157. The ordinance reclassifies as "Deemed Approved Hotel Activities" all of those hotels that previously had "legal nonconforming use" status³ and requires that Deemed Approved hotels comply with the new performance standards established by Ordinance No. 12136. Failure to abide by the new performance standards constitutes an infraction, and may result in misdemeanor prosecution, fines, and enforcement actions. OPC § 17.157.180. Violations may ultimately lead, after a public hearing and administrative review, to revocation of a hotel's Deemed Approved status. OPC § 17.157.120.

The Hotel & Motel Association of Oakland and a number of individual hotel owners and operators (collectively the "Association") brought this action challenging the ordinances under both the United States and California Constitutions. After various interim rulings in which the district court dismissed certain of the Association's claims, the parties agreed to a Stipulation and Judgment of Dismissal, which was entered by the district court. Under the Stipulation and Judgment of Dismissal, certain claims were "dismissed with prejudice with no right of appeal," while the remaining claims were "preserved for appeal."

As a result of these proceedings, the only claims remaining on appeal are: a claim alleging an unconstitutional taking of property under the Fifth Amendment, claims alleging violations of the procedural Due Process and Equal Protection clauses of the Fourteenth Amendment, and a facial challenge alleging that the Oakland ordinances are unconstitutionally vague.

DISCUSSION

I. JURISDICTION

Although the parties did not question appellate jurisdiction, we raised the issue sua sponte and requested supplemental briefing. See WMX Techs., Inc. v. Miller, 104 F.3d 1133, 1135 (9th Cir.1997) (en banc) ("[W]e have raised [the question of jurisdiction] sua sponte, as we must."). Our concern arose because of the posture of the district court's initial order granting in part the City's Rule 12(b)(6) motion to dismiss. Some of the claims addressed by the order were dismissed "without prejudice," and it was not clear from the parties' initial briefing whether the court had entered a final judgment dismissing the action in its entirety.

"A ruling is final for purposes of [28 U.S.C.] § 1291 if it (1) is a full adjudication of the issues, and (2) clearly evidences the judge's intention that it be the court's final act in the matter." Nat'l Distrib. Agency v. Nationwide Mut. Ins. Co., 117 F.3d 432, 433 (9th Cir.1997) (internal quotation marks omitted). The record before us demonstrates that the district court intended to dismiss the action in its entirety after an adjudication of all the issues, despite the fact that some claims were originally dismissed without prejudice. By its terms, the Stipulation and Judgment of Dismissal signed by the district court served as an "entry of dismissal of the ... action." The procedural history leading up to that order documents the court's intent. After several of the claims in the First Amended Complaint were dismissed without prejudice, the Association reincorporated those claims in a Second Amended Complaint. Following the court's subsequent order granting judgment on the pleadings as to the Second Amended Complaint, the only claims that remained were a Fourth Amendment claim brought by individual plaintiffs against the City and an Equal Protection claim based on discriminatory intent. Both claims were dismissed with prejudice with no right of appeal in the Stipulation and Judgment of Dismissal. Accordingly, the district court's dismissal of the action constituted a reviewable final decision and we have jurisdiction pursuant to 28 U.S.C. § 1291. See De Tie v. Orange County, 152 F.3d 1109, 1111 (9th Cir.1998) ("[D]ismissal of an action, even when it is without prejudice, is a final order." (emphasis added)).

II. FIFTH AMENDMENT TAKINGS CHALLENGE

We first address the facial takings claim brought under the Takings Clause of the Fifth Amendment. "A facial challenge involves a claim that the mere enactment of a statute constitutes a taking," and is to be distinguished from an "as applied" challenge, which "involves a claim that the particular impact of a government action on a specific piece of property requires the payment of just compensation." Levald, Inc. v. City of Palm Desert, 998 F.2d 680, 686 (9th Cir.1993) (citation and internal quotation marks omitted). The Association, which faces an "uphill battle" in bringing this facial attack, Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 495, 107 S.Ct. 1232, 94 L.Ed.2d 472 (1987), urges that the mere enactment of Ordinance No. 12137 constituted a "regulatory taking" of property by the City.

As we have explained previously, "[a] regulatory taking occurs when the value or usefulness of private property is diminished by a regulatory action that does not involve a physical occupation of the property." Levald, 998 F.2d at 684. In contrast to condemnations and physical takings, which find their origin in the plain language of the Fifth Amendment, regulatory takings are "of more recent vintage" in the Supreme Court's jurisprudence and do not easily lend themselves to the straightforward application of set formulas and categorical rules. Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 322, 122 S.Ct. 1465, 152 L.Ed.2d 517 (2002). Nevertheless, "the contours have been established: a land use regulation does not constitute a taking if the regulation does not deny a landowner all economically viable use of the property and if the regulation substantially advances a legitimate government interest." Buckles v. King County, 191 F.3d 1127, 1140 (9th Cir.1999).

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