addition to the fact that it's at the pleading stage i think it's critical to the case that this is not a facial challenge the park owner concedes that the ordinance is valid on its face and the preventing excessive in coercive rants are valid public purposes however the important port point about the ordinance is that it allows for running creases that are quote unquote reasonable under the circumstances and the burden of proof is on the park owner to show by a preponderance of the evidence that the requested rain increase is reasonable under the circumstances and you know in this case that's exactly what happened there was an actual hearing the park owner came and submitted evidence the ten submitted evidence there was cross examination and there were briefs in the park owner ma numerous legal arguments including the ones that are before this court today that that the denial of this particular running crease would not violate any public purpose whatsoever and that it would therefore result in a private taking or if wasn't a private taking it would be a regulatory taking and there also due process and equal protection arguments made and in the park owners opinion in this case should be treated the same as a fair return case would be treated under rent control essentially that if you go before the local rent control board and argue that you're not making a fair return on investment you don't need to show that  unconstitutional you don't need to show that the ordinance wasn't working there's no debate as to the wisdom of rent control or anything like that it's just the simple question of is the ordinance being applied in a way that violates your constitutional rights because the rents have unconstitutional well it would be clearly you have a right in my opinion to a fair return on investment under you know california and u s supreme court precedent well when you say that under what constitutional provision do you say that well i mean because for your return is not in the constitution exactly and so you know this is i been doing rent control for thirty years and i have never seen a case that clearly defines where the right to a fair return comes from does it come from the due process clause or the takings clause the courts are kind of mixed on it so when i do a fair return case i pleaded that it could under one or both i'm not really sure and i've had that debate with other judges and i've never seen a court of appeal decision say it county the general rule is that you have to exhaust your administrative remedies and any state court remedies that may exist as two prongs you have to satisfy them both but there is a futility exception and since the last time this issue was before the ninth circuit the basara case came down in the state courts and in basara i was the attorney in that case and the case was essentially exactly the same as this one the parker made the exact same arguments before the rent control board had the same witnesses everything was the same trying to put forth either private taking or penn central regulatory taking claim and so after the hearing officer denied the right increase we went to the state court and it got up to the court of appeal and we only argued under the california constitution and we showed that like in guggenheim when this court indicated that if you owned a park prior to the enactment of rank trail you may have a reasonable investment back expectation that you can charge a fair rent but that if you purchased it with rent control you didn't have that expectation and they found that that was the primary reason why those park owners couldn't proceed on their facial challenge as a regulatory taking claim but then the cerro came out and the cerro we raised all of the arguments under the california constitution we raised regulatory taking private taking equal protection and due process and that court found that there was no cause of action under any of those claims even for a park owner that purchased before rent control so it's very different than what this court ruled and guggenheim so in my mind that makes it futile because now we have a public decision saying you can't proceed in state court and i still have to weigh what's the status of the state court action in this case of you if you stimulate a judgment against you know it's pending in the court of appeal right now so why should we predict what will happen in the california judiciary particularly since it is just the court of appeal and as we know well being the court of appeal is not always the last word well that's true you know in this era we filed a petition to the california supreme court and they denied it so you know i guess that's another question that's kind of unresolved in my mind and williamson how far do you really have to go do you have to go to the california court every time let me i'm assuming that you do so that's what i'm doing i ask this is part of that same question about williamson county and rightness what is the worst thing that could possibly happen to you  your california litigation that the court would rule against me on every single issue and how much would that then hurt your client financially if there is to say what would do what would the rate be them if you know ruled against on every issue what would what be every what would the rate be what would your people rent what would your clients be getting in terms of return what would the rental they would be getting if you lose on every issue in the california court if i understand your question they'd be getting zero they wouldn't get anything well they're getting something that is the question is what kind of an increase or what i mean they're obviously getting some rant so what really would they be getting if you lose on every issue in the california the same rant that they're charging today ok so if that's what if we were to conclude just hypothetically that that's not a constitutional violation why do we need to wait i'm not following you at all well the only reason to wait under williamson county this county wasn't a rate case as you know was a zoning case the same principle might apply the only reason to wait underway in some county is because there's a possibility depending upon what the state proceeding does that the rate charged or the zoning imposed will or will not be unconstitutional so my question is what if we were to decide even if you lose on everything the rental that you're intitled to does not violate the constitution why do we need to wait well i'm still not really i think that there's a difference between the guggenheim type regulatory taking and a fair return on investment you know i think what guggenheim and central are saying is that even regardless of whether you're making a fair return you still may have a regulatory taking if you're that it would be futile and therefore we don't we basically prevent chile sweep away the rightness correct and we decided right but then we're in a situation where we have one california court of appeal case which says something and to rule in your favor we basically have to step out and take the opposite  well i'm just asking i'm trying to like truth the line that i would get to where you want to go you know i guess it's how you how you interpret the futility exception what do you need in order to be convinced that it's futile i'm pretty much convinced it's futile and it's you know i feel when i represent other clients going into state court this is kind of a waste of time and in fact the briefing that i've done since basara i just say in the brief years of the cerro says we can do this so williamson county we have to go through the california state procedures so i kind of apologize for wasting everybody's time but we're going to do it even though the cerro staring us right in the face and we're going to you know go through this a period court the court of appeal and the supreme court just so we can exhaust the remedies and then come over to the federal courts and in fact that's what happened in this era we finished this era we did the petition of the california supreme court and now we're back in federal court trying to pursued the william the regulatory taking claim in federal court that's exactly what we're doing in that case is pending before the ninth circuit right now is fully briefed and but it's you know it's trailing this one it's a few you know oh well you know i guess that's it that could happen that you know it's speculation but i don't have an all i could and that you know it certainly could happen or maybe it'll be the same and then maybe the california supreme court will again not take the case but when that make you know does it make you any happier but it would certainly make the case much stronger that it is futile yeah well i mean having a single right and one of one of the problems in proceeding in california in addition to the cerro is that all of the cases that have language that benefit the park owners point of view are the federal cases especially the guggenheim case that's what kind of opens the door to t hese cases and i can't even cite that case in the state courts because if they do then they'll say i argued my federal claims in state court and i'll never have a chance to succeed in federal court so we don't mention guggenheim in a claim yes sure they could then how do you get out from under stand rema hotel once the california court has ruled because then you are a student caught on not only as to what was decided but what could have been decided and then i'd write and that's the very issue that's before the ninth circuit and basara federal and our answer which may or may not be correct but this is our position is that in california under rent control cases under clearly established law they apply the substantial remo was basically no i don't let me tell you what i have how i understand center and hotel and you can tell me i'm wrong but as understands and when the hotel the federal question was saved out and not presented to the state court the united states fact that you could have brought the federal claim means your claim concluded in federal court once you get a final decision out of state court but california law regarding residue to cotton collateral stop will also say that when the standard of review is different will don't apply and i think now you're not you're not taking my point but that's ok i understand what you're saying exactly but you know that's the issue before the ninth circuit in this other in the in the several federal is that very issue is it residue to cut a nd or collateral stoppel because because you know it's like the o j simpson case you know that he's acquitted of murder in state court but then he can be sued because he's different standard of review for on the civil action and so you know anyway i mean i briefed it the other side's brief did and we'll get a decision i'm sure in the next year or two on that issue but you know that it's really not part of this case because we're not at that point yet all right ok thank you we'll hear from the  hearing on behalf of the city of callista and i agree that we should look at the procedural posture of the case and it's important to look at what the claims are pled with respect to the as applied claims that we have here we have a record could you speak up a little of course we have a regulatory takings a private taking due process and equal protection it sounded like from the court's questions that you were interested in the regulatory taking ripeness issue so i will move to that  i have a just different a difference of opinion with counsel with respect to the sorrow i don't agree to it as saying that it completely forecloses any case or cause of action in state court what it says is that because in that case the park owner had conceded that it was returned receiving a fair return on investment then there was no violation under state law of the due process or equal or takings case so i think that it's pre mature at this point to say that california law is futile especially given the overwhelming number of cases from this circuit that have said it is an adequate remedy and also i don't think bizzaro says what the park owner says it  believe it was which is the same here but nonetheless the plaintiff in this case is not conceding that they're making a fair fair return on investment which the plaintiff i'm sorry did concede i think that's a key difference i'd like to talk  minute about the theory of liability that the plaintiff the park owner is is alleging here it's this market rent theory and it is basically in our view of a circular reasoning it says that market rent is  probable rent that a property should bring in an open and competitive market without ranking troll the park owner says that because it is negotiated under an arm's length transaction it necessarily is not excessive not  and not the result of a monopoly here the park owners has requested a rent that is slightly below the market rent and so the park owner says that because it is it is therefore not excessive not monopolistic and not exploitation and as a result applying it to t he park owner violates its constitutional rights believe there's a circularity in that argument and it essentially is a rehashing of the substantially vance's argument that was rejected and  with respect to the private taken scase hilo is dispositive on this point it talks about the fact that there's a highly differential standard of review specifically mentions that simply because  private property or private party could be benefited by an ordinance that does not mean that it's for a private purpose he'll also states that where the purpose is legitimate and the means are not irrational debates over the wisdom or the effectiveness of the regulation are not allowed in federal court and we have one circuit president in both the m h c financing case and the action apartment case that rejected very similar arguments and found that there was not a private taking with respect to the pretext argument i would simply point out that all of the cases that the park owner rely upon are completely irrelevant and in a political to what we have here there's no allegations here that are even remotely similar to those that were in the ninety nine cent case the cottonwood case and the amanda reason case with respect to due process and equal protection the district court found that those were subsumed in the takings cause of action because the claim basically was such that the ordinance causes below market rent therefore the property values decrease and therefore the rental income is discrete decreased and other calling code case this circuit found that that is basically the process claims and the equal protection claims are barred as a matter of law that's would be the case the that's the supreme court case the equity lifestyle case and they'd see financing case the ordinance here is intended to stabilize park spaces prevent exploitation of the limit of the small amount of park spaces prevent excessive run increases and ensure fair return the courts have repeatedly found those to be legitimate purposes and have found that rush that rent control is a rational way to  for those purposes that's the court has any questions i think that it's been fully briefed on these issues and the ninth circuit president and supreme court precedent firmly establishes that the park owner in this case has not pled are you asking for a legal ruling from this quarter you asking for remains well we're asking that it be remain and that either the district court or even the hearing officer because the hearing officer ducked the issue he punted and said the courts should decide this which i don't think is appropriate i think that the hearing officer should be the one who takes the first crack at it hear the evidence he should make a ruling and then that can be you know if somebody disagrees with that then they can go up to the district court you know to me that makes the most sense as to how it should normally work but he punted and kind of threw this case in the chaos but i just wanted to briefly touch on the on the private taking you know we are not challenging the ordinance are challenging the decision of the hearing officer and so this is an as applied case so all of these cases that talk about the deference given to the legislature in adopting the ordinance don't apply we're not contesting that the ordinance unconstitutional we're just saying that hearing officers applied it in a manner that results in these various constitutional violations i don't understand if the question is whether what's done is public quote satisfies the public use requirement how is that different for an ad it's applied basis i mean the purpose of the ordinance is going to be the same the organs wasn't adopted for individual properties how is the public use issue  different because the enforcement agency can abuse its power and give something to somebody just because they want to as we said in our brief the hearing officer let's say his mother was a tenant at the park and he gave her a super discount on rent and so why did he do that not because of any purpose but because he wanted to because it was his mother so you can have an ordinance that's completely valid on its face and still have a private life just as you're not arguing favoritism like that this isn't a case of somebody saying well i really like the person that say or so i'm going to screw the owner of that property and give the tenant a break you're complaining about the basic economics in the basic in economics or what lie behind the ordinance we're saying that there was a trial before the hearing officer and we put on evidence to show that this particular running crease is reasonable under the circumstances because it does not resets a different question the question here is whether this is public use and i don't understand how you're not being happy with the calculations speaks to whether or not there's a public benefit from the from the law that's being applied that's what we're arguing that there is no public benefit what is the power you proposed as an alternative your client did making a direct public subsidy in the same amount to the tenets right is that something the city could have an active no they could it would make it what it violated the california constitution would have you know we don't care about california castigation for other purposes the issues you're pro posing to us would that have been on the whole i don't i think it is unlawful to give people other people's money for no reason well there are a whole lot of housing subsidy programs out there funded by the federal and state and local governments that every level are those all unconstitutional for some reason there's a reason why those people have income qualifications that's the public purpose to help poor people how about how about the g i bill no income qualification there my parents got their first house because of a loan from the predecessor to the v a i would guess that the public purpose is to encourage people to go into the military or to reward people that have been and that's a judgment made by the legislature it seems to me that it's pretty hard to distinguish between challenging the statute and this as applied challenge where there's nothing raised here other than the same public purpose of circus issues that it really would be in a facial challenge and i'm having trouble understanding what you're carving out that's different in your as well i did challenge it's exactly as i said why i believe it should be treated as like a fair return case you can have in order to says you have a constitutional right to a fair return so you go in and you say a fair return is nine percent the hearing officer says no i'm going to give you three percent so you come to court and say yeah i'm not challenge the ordinance on its face it's clear that i'm in touch you know they gave me the right to a fair return but they applied it in a way that didn't really give me the fair return so here we're saying and the reason they didn't in your view is because they're giving keeping money you're giving people money ending them with or no reason if you say that every public purpose right the public purpose is to the public purpose is to prevent let's say coersion that's one of the big ones in this ordinance that if your rents get so high the people have no choice so we're saying this particular rent we submitted evidence showing this particular rent six twenty five is not co leasehold they would have to have a negative recent these hold for the park owner to be able to coerce something out of them i mean that's the evidence the hearing officer can accept it or reject it and the tenants can rebut it but somebody needs to make a decision on the evidence and that's wh at never happened why i frankly comes back it seems to me you're trying to take a fair return argument now but pull it into a private takings label so you're not limited to whatever the pen central tells us a fair return is you're trying to  make us adopt your client's view of what a proper market price is as a definition of what's a public use and i don't know many of the already that extends the public use doctrine to that kind of level well when the hearing officer says i'm not going to give you this reading crease because the purpose of the ordinance is to prevent coersion and then we say yeah but this run increase doesn't result in any coersion so there's no correlation between the public purpose and the decision it becomes pretext at that point he's using a purpose a false purpose you know it's a legitimate purpose to prevent coersion but he's using it to deny run increase has nothing to do with coersion so that's the pretext so if they did the standard on the ordinance what's reasonable under the circumstances how can you let the hearing officer use a false pretext to deny their own increase that's all we're sane and i think we've got your argument i would also mine and we've given you an extra six minutes i'm all right