Peinhopf v. Guerrero
| Decision Date | 14 June 2021 |
| Docket Number | CIVIL CASE NO. 20-00029 |
| Parties | THOMAS PEINHOPF, Plaintiff, v. LOURDES LEON GUERRERO, in her official capacity as Governor of Guam and in her personal capacity, and ARTHUR SAN AGUSTIN, in his official capacity as Director of the DPHSS and in his personal capacity, Defendants. |
| Court | U.S. District Court — District of Guam |
Before the court is Defendants' Motion to Dismiss Plaintiff's Amended Complaint Pursuant to Fed. R. Civ. P. 12(b). See ECF No. 32. The motion is fully briefed, and the court deems it suitable for submission without oral argument.1 For the reasons stated herein, the motion is GRANTED.
Plaintiff is a business owner of Livehouse Inc., and Livehouse Inc., dba The Shady Lady, located in Tumon, Guam. Am. Compl. at ¶ 7, ECF No. 29. On February 19, 2021, Plaintiff filedan Amended Complaint,2 alleging that various Executive Orders and Guidance Memos issued by the Governor of Guam and the Director of the Guam Department of Public Health and Social Services, respectively, due to the COVID-19 pandemic violated the Takings Clause of the Fifth Amendment, the Substantive and Procedural Due Process Clause, and the Equal Protection Clause. Id. at 7-12. The Amended Complaint seeks monetary damages and declaratory and injunctive relief. Id. at 13.
Given that the Amended Complaint contained the same exhibits as the original Complaint, the U.S. Magistrate Judge's recitation of the relevant Executive Orders and Guidance Memos3 in his Report and Recommendation is set forth herein. See ECF No. 26.
On March 14, 2020, the Governor of Guam issued Executive Order 2020-03, declaring a "state of emergency" to "protect[] against the spread of COVID-19." Exec. Order No. 2020-03 . This executive order followed the declaration of the World Health Organization ("WHO") of a "Global Health Emergency with regard to the COVID-19 outbreak" on January 30, 2020, and the United States Health and Human Services Secretary's January 31, 2020 declaration of a "public health emergency for the United States to aid the nation's healthcare community in responding to COVID-19." Id.
On March 19, 2020, the Governor of Guam issued Executive Order 2020-05. See Ex. B to Am. Compl., ECF No. 29. Under the terms of the executive order, the Governor ordered that "any place of business or public accommodation shall close and be prohibited from on-site operations" effective 12 noon on March 20, 2020 through March 30, 2020. Id. The executive order then listed various categories of businesses to whom the prohibition of operations did not apply. Id. These included grocery stores, health care supply stores, gas stations, banks, hardwarestores, and laundromats. Id.
On May 8, 2020, the Governor of Guam signed Executive Order 2020-14, moving Guam from Pandemic Condition of Readiness ("PCOR") 1 to PCOR 2 effective May 10, 2020. See Ex. C to Am. Compl., ECF No. 29. "All businesses that were allowed to operate during PCOR 1 [were permitted to] continue to operate". Id. at 2.b. The Governor of Guam further ordered that other businesses were allowed to operate as limited in Guidance Memo 2020-07, issued by the Guam Department of Public Health and Social Services ("DPHSS"). Id. These businesses included real estate and automotive sales, cosmetic establishments, flower shops, and shopping malls. See DPHSS Guidance Memo 2020-07 at ¶ 2, Ex. E to Am. Compl., ECF No. 29.
On July 19, 2020, the Governor of Guam signed Executive Order 2020-24, placing Guam in PCOR 3 effective July 20, 2020. See Ex. F to Am. Compl., ECF No. 29. "Except for such businesses and activities specifically prohibited under applicable DPHSS Guidance, [the Governor permitted] all business and activities . . . to operate under . . . occupancy limitations" set forth in the executive order. Id. at ¶ 2.b.
On August 7, 2020, the Governor of Guam issued Executive 2020-26, temporarily closing bars and taverns effective August 8, 2020 until August 22, 2020. See Exec. Order 2020-26 at ¶1.a.i., Ex. G to Am. Compl., ECF No. 29.
"Then, as a consequence of spreading contagion, on August 14, 2020, [Governor] Leon Guerrero issued Executive Order 2020-27 which again closed all businesses except those listed in applicable [DPHSS] guidance." Am. Compl. at ¶ 18, ECF No. 29 and Ex. H thereto.
In response to the Amended Complaint, Defendants filed the instant motion to dismiss. Mot., ECF No. 32. Attached therein is DPHSS Guidance Memo 2021-07 (REV1) that provides guidance, among other things, on the reopening of eating and drinking establishments, including how a bar or a tavern is to operate . Ex. C to Mem. in Supp. of Defs.' Mot. ( ), ECF No. 33. Bars and taverns were permitted to reopen on February 24, 2021, and approved to operate at 50 percent capacity. Ex. A and Ex. D to Defs.' Reply, ECF No. 35.
Federal Rule of Civil Procedure 12(b)(6) provides that, in response to a claim for relief, a party may assert a defense of "failure to state a claim upon which relief can be granted" by way of motion. Fed. R. Civ. P. 12(b)(6). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 555 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (internal quotation marks omitted). The court must weed out the legal conclusions—that is "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements"—in the pleading that are not entitled to a presumption of truth. Id. at 678. A claim is facially plausible if "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556).
"Dismissal is proper where there is either a lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal claim." Hinds Invs., L.P. v. Angioli, 654 F.3d 846, 850 (9th Cir. 2011) (citing Johnson v. Riverside Healthcare Sys., LP, 534 F.3d 1116, 1121 (9th Cir. 2008).
As a general rule, leave to amend a complaint which has been dismissed should be freely granted. Fed. R. Civ. P. 15(a). However, leave to amend may be denied when "the court determines that the allegation of other facts consistent with the challenged pleading could notpossibly cure the deficiency." Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986).
As this court had adopted in the U.S. Magistrate Judge's Report and Recommendation, it will not apply the Jacobson test. Rather, this court will individually consider the claims under traditional constitutional scrutiny.
Count I of the Amended Complaint identifies a claim under 42 U.S.C. § 1983 for violation of the Takings Clause of the Fifth Amendment. Am. Compl. at 7-8, ECF No. 29. "The Takings Clause of the Fifth Amendment states that 'private property [shall not] be taken for public use, without just compensation.'" Knick v. Twp. of Scott, Pennsylvania, 139 S.Ct. 2162, 2167 (2019) (alternations in original). There are two types of takings compensable under the Takings Clause: paradigmatic, which is a direct government appropriation or physical invasion of private property; and regulatory, which involves government regulation of private property "that its effect is tantamount to a direct appropriation or ouster[.]" Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 537 (2005). Under the regulatory taking, they are compensable if the government regulation creates a permanent physical invasion of private property, however minor (Loretto takings); or completely deprives an owner of "all economically beneficial use" of the private property (Lucas takings). Id. at 538. These two narrow categories are deemed per se takings for Fifth Amendment purposes. Id. Anything that falls outside of these two categories are governed by the Penn Central test which considers the following factors: (1) the economic impact of the regulation on the claimant, (2) the extent to which the regulation has interfered with distinct investment-backed expectations, and (3) the character of the governmental action. Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978).
In the instant case, Plaintiff does not allege a paradigmatic taking (the Government did not appropriate or occupy Plaintiff's property), nor does he allege a Loretto taking (there was no permanent physical invasion of Plaintiff's property). See generally Am. Compl., ECF No. 29. Rather, Plaintiff alleges that the Executive Orders and DPHSS Guidance Memos "deprived him . . . of all economically beneficial use of his property without just compensation" and "worked to prohibit any use of Plaintiff's property and therefore, completely deprived him of all economically beneficial use of his property." Am. Compl. at ¶¶ 39 and 40, ECF No. 29. Accordingly, Plaintiff is alleging a Lucas taking.
A Lucas taking is a "relatively narrow and relatively rare taking category[], confined to the extraordinary circumstance when no productive or economically beneficial use of land is permitted[.]" Bridge Aina Le'a, LLC v. Land Use Comm'n, 950 F.3d 610, 626 (9th Cir. 2020) (emphasis in original) (internal citations and quotation marks omitted). Further, the regulation must permanently deny all productive use of the property. Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 330-32 (2002) ().
Here, the bar-and-tavern closure was not...
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