Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-02886/USCOURTS-cand-4_05-cv-02886-4/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 42:1983 Civil Rights Act

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United States District Court

For the Northern District of California

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For a complete overview of the factual basis for this case,

see the Court's July 10, 2006 Order.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

BESARO MOBILE HOME PARK, LLC,

Plaintiff,

v.

CITY OF FREMONT,

Defendant.

 /

No. C 05-2886 CW

ORDER GRANTING

DEFENDANT'S

MOTION TO DISMISS

THE SECOND

AMENDED COMPLAINT

Defendant City of Fremont (Fremont) moves pursuant to Rules

12(b)(1) and 12(b)(6) to dismiss the second amended complaint (SAC) 

of Besaro Mobile Home Park (Besaro). Besaro opposes the motion. 

The matter is decided on the papers and the hearing set for October

27, 2006 is VACATED. Having considered all of the papers filed by

the parties, the Court GRANTS with prejudice Fremont's motion to

dismiss. 

BACKGROUND

As discussed in the order dismissing the first amended

complaint (FAC), Plaintiff Besaro is the owner of a mobile home

park in Fremont.1 Besaro's tenants own their mobile homes but rent

the underlying mobile home spaces. This controversy arises out of

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Ordinance No. 2390, which amended Fremont's rent control law. On

December 16, 2005, Plaintiff filed its FAC, alleging claims against

Fremont for: (1) taking property "without payment of just

compensation and/or due process of law" in violation of the Fifth

and Fourteenth Amendments of the United States Constitution and 42

U.S.C. § 1983; (2) taking property in violation of the California

Constitution; and (3) declaratory relief. 

The Court dismissed the FAC, finding (1) that an as-applied

challenge under the Takings Clause was not ripe due to failure to

exhaust State remedies; (2) that the federal substantive due

process claim was not properly plead because it alleges a claim

that can be analyzed under the Takings Clause; (3) that any facial

challenge stated a cause of action that accrued when the vacancy

control ordinance was originally passed in 1992 and thus was barred

by the statute of limitations; and (4) that Besaro's allegations of

the lack of a valid purpose to support its Takings Clause claims

were conclusory and failed to state a claim.

The Court granted Besaro leave to amend its complaint,

instructing (1) that it may file an as-applied challenge to the

ordinance once it is exhausted; (2) that it may replead a

substantive due process claim if it can allege a claim that cannot

be analyzed under the Takings Clause or another explicit

constitutional provision; (3) that it may replead its facial

challenge if it can allege a Takings Clause claim that accrued as a

result of the 2000 enactment of Ordinance No. 2390; and (4) that it

may replead the lack of public purpose claim if it could make nonconclusory allegations to support its claim. 

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Besaro filed its SAC on July 19, 2006, alleging the same three

claims. However, Besaro amended its § 1983 claim to clarify that

it did not "allege a taking under the just compensation clause of

the Fifth Amendment." SAC ¶ 41. Rather, Besaro claims that

Ordinance No. 2390 (1) constitutes a "taking of [its] property

without a valid public purpose and/or without due process of law;"

(2) constitutes a taking in violation of the California

Constitution; and (3) is "invalid and unenforceable, both on its

face and as applied [because it] violate[s] rights guaranteed to

Plaintiff under the federal and/or state constitutions . . .

including the right to rents that reflect 'general market

conditions.'" SAC ¶¶ 41, 60.

Fremont again moves to dismiss the complaint pursuant to Rule

12(b)(1), arguing that if Besaro is alleging a facial challenge it

is time-barred and if it is alleging an as-applied challenge it is

unripe, and Rule 12(b)(6), arguing that any claim, even if properly

before the Court, fails to state claim. 

LEGAL STANDARD

As stated in the Court's order granting the original motion to

dismiss, dismissal is appropriate under Rule 12(b)(1) when the

district court lacks subject matter jurisdiction over the claim. 

Fed. R. Civ. P. 12(b)(1). Federal subject matter jurisdiction must

exist at the time the action is commenced. Morongo Band of Mission

Indians v. Cal. State Bd. of Equalization, 858 F.2d 1376, 1380 (9th

Cir. 1988), cert. denied, 488 U.S. 1006 (1989). A Rule 12(b)(1)

motion may either attack the sufficiency of the pleadings to

establish federal jurisdiction, or allege an actual lack of

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jurisdiction which exists despite the formal sufficiency of the

complaint. Thornhill Publ’g Co. v. Gen. Tel. & Elecs. Corp., 594

F.2d 730, 733 (9th Cir. 1979); Roberts v. Corrothers, 812 F.2d

1173, 1177 (9th Cir. 1987).

Under Rule 12(b)(6), a motion to dismiss for failure to state

a claim will be denied unless it is "clear that no relief could be

granted under any set of facts that could be proved consistent with

the allegations." Falkowski v. Imation Corp., 309 F.3d 1123, 1132

(9th Cir. 2002), citing Swierkiewicz v. Sorema N.A., 534 U.S. 506

(2002). All material allegations in the complaint will be taken as

true and construed in the light most favorable to the plaintiff. 

NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). 

Although the court is generally confined to consideration of the

allegations in the pleadings, when the complaint is accompanied by

attached documents, such documents are deemed part of the complaint

and may be considered in evaluating the merits of a Rule 12(b)(6)

motion. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th

Cir. 1987). 

DISCUSSION

I. Due Process Claim

In addition to claims under the Takings Clause, Besaro

continues to allege claims based on substantive due process. 

However, the Court in dismissing the FAC granted leave to amend the

substantive due process claim only if Besaro could allege a claim

that cannot be analyzed under the Takings Clause or another

explicit constitutional provision. July 10, 2006 Order at 9. As

the Court noted in its earlier order, it is clear that

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"[s]ubstantive due process analysis has no place in contexts

already addressed by explicit textual provisions of constitutional

protection." Armendariz v. Penman, 75 F.3d 1311, 1325-26 (9th Cir.

1996). 

Besaro alleges that Fremont's actions are impermissible

because they are not based on a valid public purpose and therefore

cannot be analyzed under the Takings Clause or remedied by "just

compensation." Opposition at 12. However, as Fremont notes, a

Takings Clause analysis does consider whether a taking is for a

valid public purpose, because it only allows just compensation as a

remedy for "public use." Besaro bases its due process and Takings 

Clause claims on identical facts, further emphasizing the fact that

the conduct Besaro challenges is covered by the Takings Clause. 

See SAC ¶¶ 40-54. Although Besaro argues in its opposition that it

has a separate right "under the due process clause to raise the

rent at each space to reflect 'general market conditions,'" this

claim is identical to its claim under the Takings Clause. The

Court finds that Besaro has failed to allege a claim that cannot be

analyzed under the Takings Clause. Therefore, Besaro's claims

under the Fourteenth Amendment are dismissed. Because Besaro has

had an opportunity to replead these claims, but has not followed

the Court's instruction, the claims are dismissed with prejudice.

II. Ripeness

Fremont again moves to dismiss the complaint under Rule

12(b)(1) on the ground that the Court lacks jurisdiction because

the SAC makes a federal claim for unlawful taking without

compensation, and this is not ripe because Besaro has not yet

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sought a remedy in State court. Besaro counters that it does not

intend to make a claim for just compensation; rather, it argues,

the ordinance is facially unconstitutional because it lacks a valid

public purpose and is unconstitutional as applied because it

prevents Besaro from charging "rents that reflect 'general market

conditions.'" Opposition at 3. Therefore, Besaro cites Lingle v.

Chevron, 544 U.S. 528 (2005), for the proposition that this is an

"impermissible taking" and that no amount of compensation could

remedy the effect of Fremont's regulation. Opposition at 2. 

The Court has acknowledged that facial challenges are not

subject to the ripeness requirement. See July 10, 2006 Order at 7. 

While Besaro continues to state in its SAC that the ordinance is

unconstitutional as applied, see SAC at ¶¶ 42, 61, its opposition

appears to defend only its facial claims with respect to ripeness.

See Opposition at 15 ("Because the City's new ordinance can be

challenged on its face, the City's 'ripeness' argument must

fail."). As in its order on the motion to dismiss the FAC, the

Court assumes that Besaro intended to bring only a facial challenge

to the ordinance. Therefore the Court finds that to the extent

that Besaro's claims are facial challenges to the ordinance, they

are ripe, although, as discussed below, they are barred by the

statute of limitations. 

III. Statute of Limitations

Fremont also moves again to dismiss the complaint on the

grounds that the first claim is barred by the applicable statute of

limitations. 

As the Court noted in its order dismissing the FAC, when a

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plaintiff brings a facial challenge under the Takings Clause, "the

cause of action accrues and the limitations period begins to run

upon the enactment of the statute." Levald, Inc., v. City of Palm

Desert, 998 F.2d 680, 687 (9th Cir. 1993). Therefore, the Court

found that the cause of action accrued when a vacancy control

ordinance was passed in 1992, not, as Besaro argued, when Ordinance

No. 2390 was passed in 2000. The Court found that the statute of

limitations barred the action, but granted Besaro "leave to file a

SAC if it can allege, truthfully and without contradicting the

original complaint, a facial challenge under the Takings Clause

that accrued as a result of the 2000 enactment of Ordinance No.

2390." July 10, 2006 Order at 11. 

Besaro again argues that changed economic circumstances

justify the delay in bringing the action, citing the fact that "the

circumstances that may have justified the imposition of 'full

vacancy control' in 1992 no longer existed in the year 2000." 

Opposition at 19. However, the Court has already rejected this

argument, finding that it transforms the claim into an as-applied

challenge that must be dismissed as unripe. See July 10, 2006

Order at 10. Besaro attempts to argue that this claim is not

subject to the ripeness requirement because it is based on its

assertion that the ordinance lacks a public purpose. However, this

circular argument again states Besaro's claim as a facial challenge

that is barred by the statute of limitations.

IV. Valid Public Purpose

As it found in its order dismissing the FAC, the Court again

finds that even if Besaro's claim were not time-barred, it would be

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dismissed for failure to state a claim. 

Besaro's only claim not already rejected by the Court is that

it has a constitutional right to raise rents to reflect "general

market conditions." However, there is nothing to support the

existence of such a constitutional right. The State cases that

Besaro cites in support of this proposition hold only that a rent

control ordinance must contain an adjustment mechanism "to provide

for changes in circumstances and also provide for the previously

mentioned situations in which the base rent cannot reasonably be

deemed to reflect general market conditions." Birkenfield v. City

of Berkeley, 17 Cal. 3d 129, 169 (1976). Further, as Fremont

notes, such a right would make any rent control ordinance

unconstitutional "because they are designed to reduce rents below

market when the market allows excessive rents." Reply at 4.

The Court finds that Besaro has failed to include in its SAC

"additional, non-conclusory allegations to support its claim that

Fremont lacked any public purpose when it enacted Ordinance No.

2390" as instructed in the order dismissing the FAC. July 10, 2006

Order at 14. Therefore, the SAC is dismissed with prejudice. 

CONCLUSION

For the foregoing reasons, Fremont's motion to dismiss is

GRANTED (Docket No. 33). The complaint is dismissed with prejudice

to refiling a facial challenge to the ordinance and without

prejudice to refiling an as-applied challenge upon exhaustion of

State remedies. The Court also GRANTS Fremont’s request for 

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judicial notice. Judgment shall enter accordingly. Plaintiff

shall bear Defendant's costs of the action.

IT IS SO ORDERED.

10/19/06

Dated: CLAUDIA WILKEN

UNITED STATES DISTRICT JUDGE

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