Price v. City of Stockton

• Citation: 390 F.3d 1105
• Decision Date: 06 December 2004
• Docket Number: No. 02-16270.,No. 02-16155.,02-16155.,02-16270.
• Parties: Richard PRICE; Dwain Henderson; Lucinda Watson; George Baker; Lance White; Stanford Cobbs; Stockton Metro Ministry, Inc., Plaintiffs-Appellees, v. CITY OF STOCKTON; Stockton City Council; Stockton Redevelopment Agency; Stockton Department of Housing and Redevelopment; Steve Pinkerton; Mark Lewis; Gary Podesto; Leslie Martin; Richard Nickerson; Larry Ruhstaller; Gary Giovanetti; Ann Johnston; Gloria Nomura, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

390 F.3d 1105

Richard PRICE; Dwain Henderson; Lucinda Watson; George Baker; Lance White; Stanford Cobbs; Stockton Metro Ministry, Inc., Plaintiffs-Appellees, v. CITY OF STOCKTON; Stockton City Council; Stockton Redevelopment Agency; Stockton Department of Housing and Redevelopment; Steve Pinkerton; Mark Lewis; Gary Podesto; Leslie Martin; Richard Nickerson; Larry Ruhstaller; Gary Giovanetti; Ann Johnston; Gloria Nomura, Defendants-Appellants.

No. 02-16155.

No. 02-16270.

United States Court of Appeals, Ninth Circuit.

Argued January 15, 2003.

Resubmitted September 15, 2004.

Filed December 6, 2004.

COPYRIGHT MATERIAL OMITTED

Rick W. Jarvis, Meyers, Nave, Riback, Silver & Wilson, San Leandro, CA; Lee Rosenthal, Goldfarb & Lipman, Oakland, CA, for the defendants-appellants.

Stephanie E. Haffner, California Rural Legal Assistance, Stockton, CA; Deborah Collins, California Affordable Housing Law Project of the Public Interest Law Project, Oakland, CA, for the plaintiffs-appellees.

Appeal from the United States District Court for the Eastern District of California; Lawrence K. Karlton, Senior District Judge, Presiding. D.C. No. CV-02-00065-LKK.

Before: HUG, ALARCON, and GRABER, Circuit Judges.

PER CURIAM:

The City of Stockton and other defendants¹ (collectively the "City") appeal interlocutorily the district court's order granting a preliminary injunction in favor of Richard Price, other residents of low income hotels, and Metro Ministry, a non-profit organization that helps the homeless in Stockton, California (collectively "Plaintiffs"). Plaintiffs brought an action alleging that the City violated its statutory duties under the Housing and Community Development Act, the Fair Housing Act, the Uniform Relocation Act, California's Redevelopment Act, and California's Relocation Assistance Act when the City began closing residential hotels and evicting the residents based on housing code violations.

The district court granted a preliminary injunction, finding that Plaintiffs had demonstrated a strong likelihood of success on the merits of their claim under the Housing and Community Development Act and that the balance of hardships tipped in their favor. The City appeals.

I. Background

Plaintiffs are six former tenants of three substandard Single Resident Occupancy hotels ("SRO Hotels") in downtown Stockton, California, and one nonprofit organization that provides assistance to the City's homeless, Stockton Metro Ministry. The six former tenants were displaced from their homes when the SRO Hotels that they lived in were closed by Stockton's Community Health Action Team ("CHAT").

CHAT is an interdepartmental code inspection team created by Stockton's City Manager in June 2001. CHAT's focus is on enforcing health, building, and safety regulations in the downtown area. The group is comprised of five city employees.

Since CHAT's formation approximately 32 multi-family residential buildings in downtown Stockton have been inspected. The inspections resulted in the closure of nine properties, six of which were vacated on an emergency basis. Some of the inspected SRO Hotels were closed after CHAT issued emergency notices for reasons such as bat infestation, fire and safety violations, and dangerous carbon monoxide emissions. Others were closed after the building owners failed to correct violations of which they had been previously notified.

After the SRO Hotels were closed due to the City's code enforcement activities, Plaintiffs filed an action against the City, seeking declaratory and injunctive relief. Plaintiffs also sought two writs of mandate, seeking relocation benefits and replacement housing.

Plaintiffs filed for a preliminary injunction on February 25, 2002. The district court granted the motion. In its order, the district court found that Plaintiffs had demonstrated a substantial likelihood of success in showing that federal Community Development Block Grant ("Block Grant") funds were used in the City's downtown code enforcement efforts and that relocation obligations were triggered under the Housing and Community Development Act, 42 U.S.C. § 5304(d) (hereafter "Section 104(d)"). Concluding that the balance of hardships tipped in Plaintiffs' favor, the court enjoined the City from vacating, demolishing, or converting SRO Hotels in the downtown area until it adopted and implemented an antidisplacement and relocation assistance plan consistent with Section 104(d). The injunction also required the city to provide relocation assistance and replacement housing to all persons displaced by the City's ongoing emergency code enforcement activities as well as those previously displaced. The district court later modified its injunction to make clear that the City could vacate, but not convert, units or premises posing an immediate and grave danger to the health and safety of occupants or the public, to require that Plaintiffs' counsel be given twenty-four hours' notice of such evictions, and to order the parties to meet and confer over providing adequate notice to displaced persons of their right to relocation assistance.² The City appeals, challenging the scope of the injunction, the district court's factual findings regarding the City's use of federal funds, and the court's conclusion that code enforcement triggered City responsibilities under Section 104(d).

At oral argument, it became clear that the district court did not consider whether Section 104(d) creates either a private right of action or a right enforceable under 42 U.S.C. § 1983. The City did not raise this issue below or on appeal. Nonetheless, we requested supplemental briefing as to whether such a cause of action exists. Although this question is not one of jurisdiction, and therefore may be assumed without being decided, Lapidus v. Hecht, 232 F.3d 679, 681 n. 4 (9th Cir.2000), we shall consider it on the merits in light of the supplemental briefing provided by the parties.

II. Standard of Review

A district court's order granting a preliminary injunction is subject to limited review. United States v. Peninsula Communications, Inc., 287 F.3d 832, 839 (9th Cir.2002). "The grant or denial of a preliminary injunction will be reversed only where the district court abused its discretion or based its decision on an erroneous legal standard or on clearly erroneous findings of fact." Id. To obtain a preliminary injunction, Plaintiffs must show a likelihood of success on the merits and a possibility of irreparable injury, or that there are serious questions as to the merits and the balance of hardships tips in their favor. Conn. Gen. Life Ins. Co. v. New Images of Beverly Hills, 321 F.3d 878, 881 (9th Cir.2003). "We may affirm a district court's judgment on any ground supported by the record, whether or not the decision of the district court relied on the same grounds or reasoning we adopt." Atel Fin. Corp. v. Quaker Coal Co., 321 F.3d 924, 926 (9th Cir.2003).

III. Discussion

A. Whether Plaintiffs Have an Enforceable Right to Benefits Under Section 104 of the Housing and Community Development Act

The City contends, based on the four-part test announced in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), that no private right of action may be implied from Section 104(d). Plaintiffs correctly point out, however, that the provisions of Section 104(d) may create rights enforceable under 42 U.S.C. § 1983 (hereafter "Section 1983"). In evaluating either argument, our initial inquiry is the same: "whether or not Congress intended to confer individual rights upon a class of beneficiaries." Gonzaga Univ. v. Doe, 536 U.S. 273, 285, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002).³ In Blessing v. Freestone, 520 U.S. 329, 117 S.Ct. 1353, 137 L.Ed.2d 569 (1997), the Supreme Court set forth a three-factor test to guide this inquiry: (1) whether Congress intended the provision in question to benefit the plaintiff; (2) whether the plaintiff has demonstrated that the asserted right "is not so `vague and amorphous' that its enforcement would strain judicial competence"; and (3) whether the provision giving rise to the right is "couched in mandatory, rather than precatory, terms." Id. at 340-41, 117 S.Ct. 1353.

The Court has since clarified the first part of this test, holding that it is only "unambiguously conferred right[s]..., not the broader or vaguer `benefits' or `interests,' that may be enforced" under Section 1983. Gonzaga, 536 U.S. at 283, 122 S.Ct. 2268.⁴ Accordingly, we must examine the "text and structure of the statute" to determine whether it contains "the sort of `rights-creating' language critical to showing the requisite congressional intent to create new rights." Id. at 286, 287, 122 S.Ct. 2268 (quoting Alexander, 532 U.S. at 288-89, 121 S.Ct. 1511). Such language must confer an "individual entitlement," demonstrated by an "`unmistakable focus on the benefited class'" rather than on the person or entity regulated. Id. at 287, 121 S.Ct. 1511 (quoting Cannon v. Univ. of Chicago, 441 U.S. 677, 691, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979)). In other words, to create enforceable rights the language of the statute must focus on individual entitlement to benefits rather than the aggregate or systemwide policies and practices of a regulated entity. See id. at 287-88, 121 S.Ct. 1511; see also Sabree ex rel. Sabree v. Richman, 367 F.3d 180, 187-88 (3d Cir.2004).

No court appears to have considered whether the statutory provisions at issue here create either an implied right of action or rights enforceable under Section 1983. In Walker v. City of Lakewood, 272 F.3d 1114 (9th Cir.2001), we did not find it necessary to address the defendant's argument that the Housing and Community Development Act provides no private cause of action because the plaintiff's retaliation claims in that case could proceed under the Fair Housing Act. See id. at 1127. The City in its supplemental brief points to cases holding that the anti-discrimination provisions of the ...