Chong Yim v. City of Seattle

• Decision Date: 14 November 2019
• Docket Number: No. 95813-1,95813-1
• Citation: 451 P.3d 675
• Court: Washington Supreme Court
• Parties: CHONG and Marilyn YIM, Kelly Lyles, Beth Bylund, CNA Apartments, LLC, and Eileen, LLC, Respondents, v. CITY OF SEATTLE, Appellant.

451 P.3d 675

CHONG and Marilyn YIM, Kelly Lyles, Beth Bylund, CNA Apartments, LLC, and Eileen, LLC, Respondents,

v.CITY OF SEATTLE, Appellant.

No. 95813-1

Supreme Court of Washington.

Argued June 11, 2019

Filed: NOVEMBER 14, 2019

Sara O'Connor-Kriss, Roger D. Wynne, Seattle City Attorney's Office, 701 5th Avenue, Suite 2050, Seattle, WA 98104-7095, for Appellant.

Ethan Blevins, Attorney at Law, 839 W. 3600 S., Bountiful, UT 84010-8423, Brian Trevor Hodges, Pacific Legal Foundation, 255 S. King Street, Suite 800, Seattle, WA 98134, for Respondents.

Hannah Sarah Sells Marcley, Jackson Wilder Maynard, Jr., Attorney at Law, 111 21st Avenue S.W., Olympia, WA 98501-2809, for Amicus Curiae (Building Industry Association of Washington).

Tim Trohimovich, Futurewise, 816 2nd Avenue, Suite 200, Seattle, WA 98104-1535, for Amicus Curiae (Futurewise).

Karen Louise Osborne, Attorney at Law, 9721 N.E. Livingston Mountain Court, Camas, WA 98607-7737, for Amicus Curiae (Goldwater Institute).

Joshua A. Windham, Institute for Justice, 901 N. Glebe Road, Suite 900, Arlington, VA 22203, William R. Maurer, Institute For Justice, 600 University Street, Suite 1730, Seattle, WA 98101-2925, Amicus Curiae (Institute For Justice).

Gerry Lee Alexander, Attorney at Law, 910 Lakeridge Way S.W., Olympia, WA 98502-6036, Walter Hartvig Olsen, Jr., Olsen Law Firm PLLC, 205 S. Meridian, Puyallup, WA 98371-5915, for Amicus Curiae (Manufactured Housing Communities of Washington).

Kelly Ann Mennemeier, Foster Garvey PC, 1111 3rd Avenue, Suite 3000, Seattle, WA 98101-3296, John J. McDermott, National Apartment Association, 4300 Wilson Boulevard, Suite 400, Arlington, VA 22203, for Amici Curiae (National Apartment Association and Washington Multi-Family Housing Association).

Philip Albert Talmadge, Talmadge/Fitzpatrick, 2775 Harbor Avenue S.W., Third Floor, Suite C, Seattle, WA 98126-2138, for Amicus Curiae (Rental Housing Association of Washington).

Rory B. O'Sullivan, Student Legal Services, 4001 E. Stevens Way N.E., Room 306, Husky Union Building, Seattle, WA 98195-2236, for Amicus Curiae (Seattle Displacement Coalition).

Tony Gonzalez, Nicholas Broten Straley, Columbia Legal Services, 300 Okanogan Avenue, Suite 2A, Wenatchee, WA 98801-6940, for Amicus Curiae (Tenants Union of Washington State).

Jonathan Collins, Smith Goodfriend, 1619 8th Avenue N., Seattle, WA 98109-3007, for Amicus Curiae (Washington State Association of Municipal Attorneys).

YU, J.

¶ 1 This case concerns the constitutionality of Seattle’s "first-in-time rule" (FIT rule), Seattle Municipal Code (SMC) 14.08.050. Broadly speaking, the FIT rule provides that Seattle landlords seeking to fill vacant tenancies must provide notice of their rental criteria, screen all completed applications in chronological order, and offer tenancy to the first qualified applicant, subject to certain exceptions. The plaintiffs are Seattle landlords, who claim the FIT rule facially violates their state constitutional rights.

¶ 2 On cross motions for summary judgment, the trial court ruled that the FIT rule is unconstitutional on its face because (1) the FIT rule facially effects a per se regulatory taking for private use in violation of article I, section 16, (2) the FIT rule facially infringes on the plaintiffs’ substantive due process rights in violation of article I, section 3, and (3) the FIT rule facially infringes on the plaintiffs’ free speech rights in violation of article I, section 5. WASH. CONST. art. I, §§ 16, 3, 5. Defendant city of Seattle (City) appealed. We granted direct review and now reverse.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 In September 2014, Seattle’s mayor and the Seattle City Council appointed a committee "to evaluate potential strategies to make Seattle more affordable, equitable, and inclusive." Clerk’s Papers (CP) at 319. The committee recommended "a multi-prong approach of bold and innovative solutions." Id. After considering the committee’s recommendations, the Seattle City Council amended Seattle’s Open Housing Ordinance, ch. 14.08 SMC. These amendments included adoption of the FIT rule.

¶ 4 The FIT rule provides that when a Seattle property owner seeks to fill a tenancy, the owner must first "provide notice to a prospective occupant" of "the criteria the owner will use to screen prospective occupants and the minimum threshold for each criterion," as well as "all information, documentation, and other submissions necessary for the owner to conduct screening." SMC 14.08.050(A)(1)(a)-(b). Next, the property owner must "note the date and time of when the owner receives a completed rental application" and "screen completed rental applications in chronological order." Id. at (A)(2)-(3). "If, after conducting the screening, the owner needs more information than was stated in the notice," the owner must "notify the prospective occupant in writing, by phone, or in person of what additional information is needed." Id. at (A)(3). Finally, the property owner must "offer tenancy of the available unit to the first prospective occupant meeting all the screening criteria necessary for approval of the application." Id. at (A)(4). The first qualified applicant has 48 hours in which to accept the offer of tenancy. Id. If the applicant does not accept, "the owner shall review the next completed rental application in chronological order until a prospective occupant accepts the owner’s offer of tenancy." Id.

¶ 5 There are a number of exceptions to these general procedures. No part of the FIT rule applies "to an accessory dwelling unit or detached accessory dwelling unit wherein the owner or person entitled to possession thereof maintains a permanent residence, home or abode on the same lot." Id. at (F). In addition, an owner does not have to offer tenancy to the first qualified applicant if the owner "is legally obligated to" or "voluntarily agrees to set aside the available unit to serve specific vulnerable populations." Id. at (A)(4)(a)-(b). The FIT rule also contains procedures for potential occupants with disabilities to seek "additional time to submit a complete rental application because of the need to ensure meaningful access to the application." Id. at (B).

¶ 6 The FIT rule became effective on January 1, 2017, although compliance was not required until July 1, 2017. Id. at (A), (E). On August 16, 2017, the plaintiffs filed a first amended complaint, "seeking a declaration that the City’s [FIT] rule ... violates the Takings, Due Process, and Free Speech Clauses of the Washington State Constitution, and also seeking a permanent injunction forbidding the City from enforcing its unconstitutional rule." CP at 19. The plaintiffs challenge the FIT rule only "on its face," not as applied. Id. at 30, 33.

¶ 7 The parties filed cross motions for summary judgment based on a statement of stipulated facts and a stipulated record. The trial court ruled in favor of the plaintiffs on each of their claims, concluding that the FIT rule facially violates article I, section 16 (the takings clause), section 3 (the due process clause), and section 5 (the free speech clause) of the Washington State Constitution. The City appealed, and we granted direct review. Order, No. 95813-1 (Wash. Nov. 28, 2018).

ISSUES

¶ 8 A. Does the FIT rule facially effect a regulatory taking for purposes of article I, section 16 ?

¶ 9 B. If the FIT rule does facially effect a regulatory taking, is it for private use in violation of article I, section 16 ?

¶ 10 C. Does the FIT rule facially violate the plaintiffs’ article I, section 3 right to substantive due process?

¶ 11 D. Does the FIT rule facially violate the plaintiffs’ article I, section 5 right to free speech?

ANALYSIS

¶ 12 This case presents two important questions of state constitutional law that will have consequences far beyond the particular claims at issue here. First, we must define when a law regulating the use of property crosses the line into a "regulatory taking" for purposes of article I, section 16. Second, we must determine the standard of review that applies to article I, section 3 substantive due process challenges to laws regulating the use of property.

¶ 13 As to the first issue, this court has always attempted to define regulatory takings consistently with federal courts applying the takings clause of the Fifth Amendment. U.S. CONST. amend. V. The federal definition of regulatory takings has been substantially clarified since we last considered the issue, such that the "legal underpinnings of our precedent have changed or disappeared altogether." W.G. Clark Constr. Co. v. Pac. Nw. Reg’l Council of Carpenters, 180 Wash.2d 54, 66, 322 P.3d 1207 (2014). It has not been shown that we should adopt a Washington-specific definition as a matter of independent state law at this time, and we therefore adopt the definition of regulatory takings set forth by the United States Supreme Court in Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 125 S. Ct. 2074, 161 L. Ed. 2d 876 (2005), as discussed in more detail below. The following precedent is disavowed to the extent that it defines regulatory takings in a manner that is inconsistent with Chevron U.S.A. : Orion Corp. v. State, 109 Wash.2d 621, 747 P.2d 1062 (1987) ; Presbytery of Seattle v. King County, 114 Wash.2d 320, 787 P.2d 907 (1990) ; Sintra, Inc. v. City of Seattle, 119 Wash.2d 1, 829 P.2d 765 (1992) ; Robinson v. City of Seattle, 119 Wash.2d 34, 830 P.2d 318 (1992) ; Guimont v. Clarke, 121 Wash.2d 586, 854 P.2d 1 (1993) ; Margola Associates v. City of Seattle, 121 Wash.2d 625, 854 P.2d 23 (1993) ; and Manufactured Housing Communities of Washington v. State, 142 Wash.2d 347, 13 P.3d 183 (2000) (plurality opinion).

¶ 14 Regarding the second issue, as analyzed in more detail in our opinion for Chong Yim v. City of Seattle, No. 96817-9, ––– Wash.2d ––––, 451 P.3d 694, 2019 WL 5997021 (Wash. Nov. 14, 2019) ( Yim II ), this court has always attempted to apply a standard of review to article I, section 3 substantive due process claims that...