353 F.3d 651 (9th Cir. 2003), 02-15986, Hacienda Valley Mobile Estates v. City of Morgan Hill

Docket Nº:02-15986
Citation:353 F.3d 651
Party Name:Hacienda Valley Mobile Estates v. City of Morgan Hill
Case Date:December 17, 2003
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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353 F.3d 651 (9th Cir. 2003)

HACIENDA VALLEY MOBILE ESTATES, a California Limited Partnership, Plaintiff-Appellant,


CITY OF MORGAN HILL; City of Morgan Hill Rent Review Opinion Commission, Defendants-Appellees.

No. 02-15986.

United States Court of Appeals, Ninth Circuit

December 17, 2003

Argued and Submitted Oct. 6, 2003.

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[Copyrighted Material Omitted]

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Robert S. Coldren and Mark D. Alpert, Hart, King & Coldren, Santa Ana, California, for the appellant.

Donald R. Lincoln, Endeman, Lincoln, Turek & Heater LLP, San Diego, California, for the appellees.

Appeal from the United States District Court for the Northern District of California, Ronald M. Whyte, District Judge, Presiding. D.C. No. CV-01-20976-RMW.

Before: HUG, JR., B. FLETCHER, and TASHIMA, Circuit Judges.


HUG, JR., Circuit Judge:

Hacienda Valley Mobile Estates ("Hacienda") brought this action to challenge the constitutionality of the City of Morgan Hill's ("City's") vacancy control ordinance, Ordinance No. 1090 ("Ordinance"). The Ordinance prevents mobile home parks from raising the rent on a mobile home "pad" when the mobile home is sold. Hacienda alleges that the Ordinance allows existing tenants to capture a "premium" on the sales price of their mobile homes because the new tenants are guaranteed low rent. Hacienda argues that this premium is an unconstitutional taking.

District Judge Whyte found that Hacienda had not met the ripeness requirements imposed on regulatory taking cases by Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172, 186, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985), and therefore dismissed the case for lack of subject matter jurisdiction. We have jurisdiction to hear appeals from final district court decisions pursuant to 28 U.S.C. § 1291, and we now affirm.

I. Background

Hacienda operates a 165-unit mobile home park ("Park") in Morgan Hill. Mobile home owners generally rent a space, or "pad," in a mobile home park, while the park provides common areas and utilities. Because it is expensive to move mobile homes, they are rarely relocated once they are installed in a park. Instead, the home is sold to new owners who continue to rent the pad from the mobile home park.

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Since 1983, Morgan Hill has imposed a rent control scheme on mobile home parkowners, limiting the amount by which parkowners can raise the rents in their parks. The present challenge addresses one of the newer elements of the rent control system. In 1992, the City amended its mobile home rent control ordinance to include a vacancy control provision, the Ordinance at issue in this case. The Ordinance prohibits a mobile home park from raising the rent on a mobile home pad when a mobile home is sold, while still allowing the park to collect a $25 administrative fee when the mobile home changes hands.

Morgan Hill's rent control scheme is administered by the City's Rent Control Commission ("Commission"). In April 2000, Hacienda petitioned the Commission for a rent increase of $200.00 per month. The Commission made its final determination in November 2000, granting Hacienda an increase of $4.03 per month. Less than one year later, on October 17, 2001, Hacienda filed this action against the City alleging that the Ordinance had combined with complex economic factors and the Commission's refusal to grant a rent increase to create a "premium" on the spaces in its Park. Hacienda argues that the below-market rate rent it is required to charge makes its Park attractive to potential mobile home buyers. Sellers of mobile homes in the Park are therefore able to command a "premium" over and above the worth of the home for the right to continue to live in the Park at below-market rates. In effect, Hacienda is arguing, the Ordinance has created an income-transfer, with the sellers of mobile homes collecting the rent that Hacienda is not allowed to charge in the form of a premium on the sale of the mobile home. This premium, Hacienda argues, constitutes a taking of its property as the Ordinance is applied.

In the district court Hacienda brought five claims: (1) an action for declaratory relief, (2) a claim of violation of the 5th amendment, (3) a claim of violation of civil rights pursuant to § 1983, (4) a claim of denial of equal protection, and (5) a petition for writ of administrative mandamus. Hacienda Valley Mobile Estates v. City of Morgan Hill, No. C-01-20976- RMW, slip op. at 3 (N.D.Cal. Apr. 15, 2002). The district court dismissed the equal protection claim with prejudice for failing to file under § 1983 and for failing to meet the statute of limitations. Id. at 11. The claim for violation of the 5th Amendment was similarly dismissed with prejudice for failure to file under § 1983. Id. at 13. The claims for declaratory relief and for violation of civil rights pursuant to § 1983 were dismissed with prejudice to the extent that they were facial claims, and without prejudice to the extent that they constituted as-applied challenges. Id. at 13. Finally, the district court declined to extend supplemental jurisdiction to the petition for writ of administrative mandamus. Id. at 12.

Hacienda appeals only the taking claim that underlies both the action for declaratory relief and the § 1983 claim.

II. Standard of Review

We review district court decisions to dismiss for lack of subject matter jurisdiction de novo. McNatt v. Apfel, 201 F.3d 1084, 1087 (9th Cir. 2000). The district court's decision to dismiss for lack of ripeness is also reviewed de novo. Ross v. Alaska, 189 F.3d 1107, 1114 (9th Cir. 1999).

III. Facial Claim

Hacienda challenges the constitutionality of the Ordinance, claiming that it creates a "premium" which amounts to an uncompensated regulatory taking. Hacienda

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vigorously argues that its challenge is as-applied. To place its argument in context we draw here the distinction between facial and as-applied challenges to regulatory taking claims.

The district court cites Levald, Inc. v. City of Palm Desert, 998 F.2d 680 (9th Cir. 1993), to support its conclusion that Hacienda's challenge, as a premium challenge, must be a facial challenge. Hacienda Valley, at 4-5. In Levald, we stated that a premium claim based on the passage of a rent-control ordinance is a facial claim: "It is not the particular application of the statute that gives rise to the premium; the premium arises solely from the existence of the statute itself." Levald, 998 F.2d at 689 (emphasis in the original) (footnote omitted). Putting aside for the moment the actual implications of Levald, if the district court is correct that Hacienda's claim is a facial claim, then the claim should fail.

To determine if facial claims are appropriately before the court, the court must perform a two-step analysis. First, it must determine whether the claim is ripe under Williamson County. Then the court must determine whether the claim is barred by a statute of limitations. The Williamson County ripeness analysis is also a two-step inquiry. 473 U.S. at 186, 105 S.Ct. 3108. The plaintiff must have obtained a final decision from the governmental authority charged with implementing the regulations and must have pursued compensation through state remedies unless doing so would be futile. Id. at 194-95.

Facial challenges are exempt from the first prong of the Williamson ripeness analysis because a facial challenge by its nature does not involve a decision applying the statute or regulation. Yee v. City of Escondido, 503 U.S. 519, 534, 112 S.Ct. 1522, 118 L.Ed.2d 153 (1992). The state remedies prong, however, does apply to facial challenges. Hacienda has not sought compensation in state courts; 1 therefore, it must argue that...

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