FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MANUFACTURED HOME COMMUNITIES 

INC.; MHC OPERATING LIMITED

PARTNERSHIP, an Illinois limited

partnership, No. 03-16766

Plaintiffs-Appellants, D.C. No.  v. CV-03-01713-JW

CITY OF SAN JOSE; ENIS RICE; GARY OPINION

DEWET; MARTIN VANCIL; MARSHA

SKRATT,

Defendants-Appellees. 

Appeal from the United States District Court

for the Northern District of California

James Ware, District Judge, Presiding

Argued April 14, 2005

Submitted August 17, 2005

San Francisco, California

Filed August 23, 2005

Before: Donald P. Lay,* Betty B. Fletcher, and

Michael Daly Hawkins, Circuit Judges.

Opinion by Judge B. Fletcher

*The Honorable Donald P. Lay, Senior United States Circuit Judge for

the Eighth Circuit, sitting by designation. 

11163
COUNSEL

Elliott L. Bien, Bien & Summers, LLP, Novato, California,

for the appellants. 

David Bradford and Lisa T. Scruggs, Jenner & Block, LLC,

Chicago, Illinois, for the appellants. 

Richard Doyle, George Rios, and Shannon Smyth-Mendoza,

Office of the City Attorney, San Jose, California, for appellee

City of San Jose. 

Bruce E. Stanton, Law Offices of Bruce E. Stanton, San Jose,

California, for appellees Enis Rice, Gary DeWet, Martin Vancil, and Marsha Skratt. 

OPINION

B. FLETCHER, Circuit Judge: 

Manufactured Home Communities, Inc.1 and MHC Operat1Appellant Manufactured Home Communities, Inc. recently changed its

name to Equity Lifestyle Properties, Inc. For continuity, we to refer to the

Appellant by its name at the time of filing. 

MANUFACTURED HOME CMTYS. v. SAN JOSE 11167
ing Limited Partnership2

 (collectively MHC) sued the City of

San Jose challenging the City’s Mobilehome Rent Ordinance

as unconstitutional. MHC also sued four individual tenants of

the MHC mobilehome park: Enis Rice, Gary DeWet, Martin

Vancil, and Marsha Skratt (collectively Individual Defendants). MHC argued that the Individual Defendants are not

eligible for rent control under California state law and are,

thus, in violation of the City’s Ordinance and California state

law for refusing to pay increased rent. 

MHC appeals the district court’s dismissal of MHC’s complaint for various jurisdictional and res judicata problems. We

affirm the district court’s decision on the basis of res judicata,

untimeliness, failure to state a federal question, lack of supplemental jurisdiction, and California’s statute of limitations.3

Although it does not affect the outcome of this case, we

reverse the district court’s holding on the Rooker-Feldman doctrine.4

 We reverse and remand the matter of attorneys’ fees.

Jurisdiction and Standard of Review

The district court dismissed several of MHC’s claims for

lack of subject matter jurisdiction under the Rooker-Feldman

doctrine. Manufactured Home Cmtys., Inc. v. San Jose, 358 F.

Supp. 2d 896 (N.D. Cal. 2003). The district court affirmed its

dismissal under res judicata. The district court also dismissed

MHC’s claims for lack of ripeness, want of supplemental

jurisdiction, and failure to comply with California’s statute of

limitations. This court has jurisdiction to review the district

court’s decision pursuant to 28 U.S.C. § 1291. Hacienda Valley Mobile Estates v. City of Morgan Hill Rent Review

Comm’n, 353 F.3d 651, 653 (9th Cir. 2003). 

2D/b/a Westwinds Manufactured Home Community. 

3This court “may affirm a dismissal on any basis supported by the

record, even if the district court relied on different grounds or reasoning.”

Maldonado v. Harris, 370 F.3d 945, 949 (9th Cir. 2004). 

4District Court of Columbia Court of Appeals v. Feldman, 460 U.S. 462

(1983); Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923). 

11168 MANUFACTURED HOME CMTYS. v. SAN JOSE
Rooker-Feldman jurisdiction claims are reviewed de novo.

Noel v. Hall, 341 F.3d 1148, 1154 (9th Cir. 2003). Res judicata claims are also reviewed de novo. Palomar Mobilehome

Park Ass’n. v. City of San Marcos, 989 F.2d 362, 363 (9th

Cir. 1993). Ripeness is a question of law, and it is reviewed

de novo. Ventura Mobilehome Cmtys. Owners Ass’n v. City

of San Buenaventura, 371 F.3d 1046, 1050 (9th Cir. 2004).

Whether a district court had supplemental jurisdiction is

reviewed de novo; a district court’s decision to decline supplemental jurisdiction is reviewed for abuse of discretion. Trs.

of the Constr. Indus. & Laborers Health & Welfare Trust v.

Desert Valley Landscape & Maint., Inc., 333 F.3d 923, 925

(9th Cir. 2003). Whether a claim is barred by a statute of limitations and when a statute of limitations begins to run are

reviewed de novo. Cashman v. City of Cotati, 374 F.3d 887,

892 (9th Cir. 2004). The facts alleged in a complaint dismissed for lack of subject matter jurisdiction are accepted as

true. Carson Harbor Village, Ltd. v. City of Carson, 353 F.3d

824, 826 (9th Cir. 2004). 

Factual Background and Procedural History

The City of San Jose passed a Mobilehome Rent Ordinance

in 1986. San Jose Municipal Code (SJMC) ch. 17.22. The

Ordinance includes, among other things, rent control provisions. The rent control provisions allow for a maximum

annual rent increase calculated in relation to the Consumer

Price Index. SJMC § 17.22.450. Proposed increases exceeding the calculated amount are subject to administrative

review. 

The maximum annual rent increase is supposed to allow

mobilehome park owners a fair and reasonable return on their

investment. A fair return is defined as an amount allowing an

owner to maintain the same level of income, adjusted for

inflation, as the owner received in the “base year.” SJMC

§ 17.22.550. This system is known as the maintenance of net

MANUFACTURED HOME CMTYS. v. SAN JOSE 11169
operating income approach to stabilizing rents. The base year

under the Ordinance is 1985. SJMC § 17.22.490. 

If a mobilehome park owner believes the maximum annual

rent increase will not provide a fair return, then he may petition the City for a rent increase. SJMC § 17.22.700. An

administrative hearing officer will conduct a hearing on the

petition. SJMC § 17.22.750. At the hearing there is a rebuttable presumption that the level of income received in the base

year provides a fair and reasonable return. SJMC § 17.22.480.

An owner may rebut this presumption by showing that operating expenses were unusually high or low in the base year or

that gross income was disproportionate in the base year.

SJMC § 17.22.510. Decisions by the administrative hearing

officers are subject to judicial review. SJMC § 17.22.1040. 

Individual mobilehome owners may voluntarily exempt

themselves from the City’s rent control provisions. SJMC

§ 17.22.370. Certain mobilehome units are automatically

exempt from the provisions. SJMC § 17.22.350-360. Under

California’s Civil Code “if a mobilehome space within a

mobilehome park is not the principal residence of the homeowner and the homeowner has not rented the mobilehome to

another party, it shall be exempt” from the City’s Ordinance.

Cal. Civ. Code § 798.21(a). The burden of proving a unit is

exempt from the rent control provisions or that a rent increase

is exempt from the provisions rests with the park owner.

SJMC §§ 17.22.390 & 17.22.452. 

MHC, a publicly traded real estate investment company,

owns and operates Westwinds mobilehome park in San Jose,

California. MHC purchased Westwinds in August 1997. Due

to an increase in ground rent in 1996, MHC says the park’s

operating expenses increased by $1.3 million that year. In

May of 1998, MHC petitioned the City’s rental dispute program for a special rent increase to cover the increased costs.

Unfortunately, Westwinds’ financial records for the base year,

1985, were destroyed by the park’s previous owner. MHC

11170 MANUFACTURED HOME CMTYS. v. SAN JOSE
only has financial records for Westwinds for the years 1996

and 1997. Although MHC’s initial petition for review

included an estimate of the 1985 numbers, MHC now says an

accurate estimate of the 1985 numbers is impossible. MHC

submitted an amended petition using 1996 as the base year for

determining whether a rent increase was appropriate. 

After an administrative hearing, an administrative hearing

officer ruled against MHC’s petition for a rent increase in

October of 1998.5 The hearing officer determined that financial information for 1996 could not be used as a base and only

1985 could be used. MHC then sought a writ of administrative mandamus in California Superior Court pursuant to California Civil Procedure Code § 1094.5. MHC alleged that the

failure to grant a rent increase was arbitrary, capricious, an

abuse of discretion, and in disregard of the uncontradicted

evidence. MHC argued the City’s actions violated the Ordinance and the Constitutions of California and the United States.6

The Superior Court ruled in favor of MHC, deeming the Ordinance unconstitutional because it did not provide a mechanism for calculating a fair return when mobilehome park

owners cannot, through no fault of their own, prove actual

base year net operating income. 

In response, the City passed an Urgency Ordinance amending the Ordinance.7

 City of San Jose Urgency Ordinance No.

25958. The Urgency Ordinance allowed for estimates of base

5Approximately eighty-five percent of Westwinds’ unit owners settled

with MHC, accepting a rent increase, prior to the hearing officer’s decision. This leaves approximately sixty-eight mobilehome owners, subject

to a potential rent increase pending the outcome of this lawsuit. 

6

“[A] claim involving federal constitutional rights may be joined to a

California mandamus action.” Clark v. Yosemite Cmty. Coll. Dist., 785

F.2d 781, 787 n.5 (9th Cir. 1986). 

7The City also appealed the Superior Court’s decision. In light of the

City’s Urgency Ordinance, the appeal was dismissed as moot by the California Court of Appeals. MHC Operating Ltd. P’ship v. City of San Jose,

130 Cal. Rptr. 2d 564, 571 (Cal. Ct. App. 2003). 

MANUFACTURED HOME CMTYS. v. SAN JOSE 11171
year income and expenses when exact information is unavailable. SJMC § 17.22.495. It also said that “[n]o provision . . .

shall be applied so as to prohibit the Administrative Hearing

Office from granting a rent increase that is demonstrated as

necessary.” SJMC § 17.22.030. 

After passage of the Urgency Ordinance, MHC repetitioned for a rent increase. MHC again provided only 1996

financial information. The administrative hearing officer held

a hearing in November of 1999. At the hearing MHC presented evidence that it is impossible to estimate the 1985

financial information. The City presented evidence that it is

possible to estimate the 1985 financial information. The hearing officer found it possible to estimate the 1985 financial

data and denied MHC’s petition without prejudice. 

MHC then petitioned for a supplemental writ of administrative mandamus in Superior Court. MHC abandoned its constitutional claims before the Superior Court and challenged only

the hearing officer’s interpretation of the Ordinance and the

officer’s factual finding that MHC is able to estimate the 1985

financial data. The Superior Court said that the City remedied

the constitutional problems with the Ordinance by passing the

Urgency Ordinance, noting MHC “no longer challenges its

constitutionality.” The court affirmed the hearing officer’s

interpretation of the Ordinance and affirmed the officer’s

decision that estimating the 1985 financial information is possible for the purposes of calculating a fair return under the

Ordinance. 

MHC then appealed to the California Courts of Appeal.

MHC argued that the City hearing officer and the Superior

Court misinterpreted the Urgency Ordinance. MHC also

revived its constitutional challenge to the Ordinance. The

Courts of Appeal characterized MHC’s challenge by quoting

MHC’s opening brief saying, “[T]he issues before this Court

arise out of the legal conclusions that were drawn by the

Hearing Officer and whether those conclusions are constitu11172 MANUFACTURED HOME CMTYS. v. SAN JOSE
tionally proper.” MHC Operating Ltd. P’ship, 130 Cal. Rptr.

2d at 573. 

The Courts of Appeal affirmed the Superior Court’s decision. Recognizing the constitutional considerations inherent in

analyzing rent control ordinances, the Courts of Appeal said,

“Fair return is the constitutional measuring stick by which

every rent control board decision is evaluated.” Id. at 576

(quoting Carson Harbor Village, Ltd. v. City of Carson

Mobilehome Park Rental Review Bd., 82 Cal. Rptr. 2d 569,

574 (Cal. Ct. App. 1999)). The court found that San Jose’s

Ordinance, on its face, provides owners with a fair return. The

court also found that MHC did not prove the hearing officer’s

interpretation and application of the Ordinance were either

unreasonable or unlawful. Based on the evidentiary record,

the court found MHC could estimate financial expenses for

1985. Thus, the court found the Ordinance on its face and as

applied does not deprive MHC of a fair return. The California

Supreme Court declined discretionary review of the Courts of

Appeal’s decision. 

In May of 2002, MHC pursued a second avenue for raising

rents at Westwinds. MHC notified four mobilehome owners,

the Individual Defendants, that under California Civil Code

§ 798.21 they were not eligible for rent control. This section

of the Code exempts mobilehome owners who also own second homes from qualifying for rent control. MHC believes the

Code exempts the Individual Defendants from the City’s rent

control Ordinance. The Individual Defendants argue they do

not qualify as second homeowners as defined by the statute

and/or they qualify for an exception to the exemption under

the statute. Cal. Civ. Code § 798.21(f) (listing exception). The

City Attorney issued a letter saying the Individual Defendants

were not covered by the second homeowner exemption. MHC

never petitioned the City’s administrative process to raise the

Individual Defendants’ rent. Instead, MHC sued the City and

the Individual Defendants in federal court. 

MANUFACTURED HOME CMTYS. v. SAN JOSE 11173
In April of 2003, MHC in its complaint petitioned the federal district court in the Northern District of California for

relief against the City and the Individual Defendants. MHC

brought eight “Counts” before the district court. The Counts

are: 

I. The City’s Ordinance denies MHC procedural due process under the Fourteenth

Amendment in violation of 42 U.S.C. § 1983

by denying a fair hearing and imposing arbitrary, capricious, and unreasonable burdens

on MHC. 

II. The City’s Ordinance denies MHC equal

protection under the Fourteenth Amendment

in violation of 42 U.S.C. § 1983 by according MHC’s property rights disparate and

injurious treatment compared to other

mobilehome park owners. 

III. The City’s hearing officer is biased thus

denying MHC procedural due process. 

IV. The City denied MHC procedural due process by not giving notice and a fair hearing

before determining the Individual Defendants are not subject to the second homeowner exemption. 

V. MHC requests declaratory relief interpreting

California Civil Code § 798.21 to mean the

Individual Defendants are subject to the second homeowner exemption. 

VI. MHC requests enforcement of the second

homeowner exemption against the City and

the Individual Defendants. 

11174 MANUFACTURED HOME CMTYS. v. SAN JOSE
VII. The City Ordinance as applied violates the

Fifth Amendment’s Takings Clause. 

A. The Ordinance allows tenants to sell

their homes for a premium (based on

rent control savings), the premium

transfers value of MHC’s land to the

tenants. 

B. The Ordinance does not provide a fair

and reasonable return on MHC’s

investment. 

VIII. The City’s Ordinance does not substantially

advance a legitimate governmental objective.

It is facially invalid as violating the Fifth

Amendment’s Takings Clause. 

The City moved to dismiss MHC’s complaint under the

Rooker-Feldman doctrine, Younger abstention, ripeness, failure to present a federal question, and California’s statute of

limitations. The City also moved for attorneys’ fees and sanctions. 

The district court granted the City’s motion to dismiss and

granted the City’s attorneys’ fees. The court denied sanctions.

The district court dismissed Counts I (procedural due process), II (equal protection), and III (biased hearing officer)

under Rooker-Feldman and res judicata. The district court dismissed Counts IV (procedural due process), V (declaratory

relief), and VI (enforcement), as not ripe for adjudication and

for failing to present a federal question. The district court also

declined to exercise supplemental jurisdiction over Counts V

and VI as related to the Individual Defendants. The takings

claims, Counts VII (as applied) and VIII (facial), were dismissed as untimely (ripeness and statute of limitations) and as

improper under Rooker-Feldman and res judicata. MHC filed

a timely Notice of Appeal on September 16, 2003. 

MANUFACTURED HOME CMTYS. v. SAN JOSE 11175
Analysis

1. Rooker-Feldman — Counts I, II, III, VII, VIII 

The district court dismissed the bulk of MHC’s complaint,

including the procedural due process, equal protection, and

takings claims, under the Rooker-Feldman doctrine. On

appeal MHC argues the Ninth Circuit’s opinion in Noel v.

Hall, 341 F.3d 1148 (9th Cir. 2003), issued after the district

court’s order, requires reversal of the district court’s decision.8

We agree and find the Rooker-Feldman doctrine does not bar

federal jurisdiction over MHC’s complaint. 

[1] The Rooker-Feldman doctrine stands for the proposition

that “a federal district court does not have subject matter jurisdiction to hear a direct appeal from the final judgment of a

state court.” Noel, 341 F.3d at 1154. This court’s opinion in

Noel provides a detailed history of how Rooker-Feldman

developed. Id. at 1154-65. It also clarifies the narrow scope

and application of the doctrine. Noel offers this “general formulation” of the doctrine:

If a federal plaintiff asserts as a legal wrong an allegedly erroneous decision by a state court, and seeks

relief from a state court judgment based on that decision, Rooker-Feldman bars subject matter jurisdiction in federal district court. If, on the other hand, a

federal plaintiff asserts as a legal wrong an allegedly

illegal act or omission by an adverse party, RookerFeldman does not bar jurisdiction. 

8The Supreme Court affirmed Noel’s approach to Rooker-Feldman in

Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 125 S. Ct. 1517 (2005).

Since the Noel decision the Ninth Circuit has reversed several district

court decisions dismissing claims under the Rooker-Feldman doctrine.

See, e.g., Kougasian v. TMSL, Inc., 359 F.3d 1136 (9th Cir. 2004); Maldonado v. Harris, 370 F.3d 945 (9th Cir. 2004); Wolfe v. Strankman, 392

F.3d 358 (9th Cir. 2004). 

11176 MANUFACTURED HOME CMTYS. v. SAN JOSE
Id. at 1164.9

 Here MHC sues the City of San Jose10 (an

adverse party), not a state court.11 MHC is challenging the

City’s interpretation of the Ordinance. MHC’s complaint does

not directly challenge a state court’s factual or legal conclusion. MHC’s complaint to the district court is, therefore, not

a forbidden appeal under Rooker-Feldman. 

[2] The district court, however, observed the interconnectedness of MHC constitutional claims with the state courts’

holding that MHC is capable of estimating the 1985 financial

figures and that MHC is capable of receiving a fair return as

constitutionally mandated. The district court dismissed

MHC’s constitutional claims as “inextricably intertwined”

with issues raised in state court and, thus, inappropriate for

federal review under Rooker-Feldman. After the district

court’s decision, this court clarified the proper application of

the “inextricably intertwined” test. Noel, 341 F.3d at 1157-58.

Under Noel, claims are dismissed as “inextricably intertwined” only when an improper appeal under RookerFeldman is already before the district court. Noel says: 

The premise for the operation of the “inextricably

intertwined” test in Feldman is that the federal plaintiff is seeking to bring a forbidden de facto appeal.

The federal suit is not a forbidden de facto appeal

9The Supreme Court affirmed the substance of this formulation in

Exxon Mobil Corp., saying, “The Rooker-Feldman doctrine, we hold

today, is confined to cases of the kind from which the doctrine acquired

its name: cases brought by state-court losers complaining of injuries

caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those

judgments.” 125 S. Ct. at 1521-22. 

10The claims against the Individual Defendants do not involve the

Rooker-Feldman Doctrine. 

11MHC’s brief specifically says it is not suing any state court: “Accordingly, MHC’s federal complaint sought relief against the city and the second homeowner tenants — not against the state courts or their final

judgment.” 

MANUFACTURED HOME CMTYS. v. SAN JOSE 11177
because it is “inextricably intertwined” with something. Rather, it is simply a forbidden de facto

appeal. Only when there is already a forbidden de

facto appeal in federal court does the “inextricably

intertwined” test come into play: Once a federal

plaintiff seeks to bring a forbidden de facto appeal,

as in Feldman, that federal plaintiff may not, as part

of the suit in which the forbidden appeal is brought,

seek to litigate an issue that is “inextricably intertwined” with the state court judicial decision from

which the forbidden de facto appeal is brought. 

Id. at 1158. We already determined MHC’s appeal is not a

forbidden appeal, thus, while MHC’s constitutional challenges are related to the state courts’ factual and legal conclusions, they are not “inextricably intertwined” for the purposes

of Rooker-Feldman. The district court’s dismissal of MHC’s

claims on the basis of the Rooker-Feldman doctrine is

reversed. 

The relationship between MHC’s constitutional challenges

and the California state courts’ legal and factual conclusions

is best addressed under preclusion law. As the Supreme Court

recently made clear: “If a federal plaintiff ‘present[s] some

independent claim, albeit one that denies a legal conclusion

that a state court has reached in a case to which he was a party

. . . , then there is jurisdiction and state law determines

whether the defendant prevails under principles of preclusion.” Exxon Mobil, 125 S. Ct. at 1527 (quoting GASH

Assocs. v. Village of Rosemont, 995 F.2d 726, 728 (7th Cir.

1993); accord Noel v. Hall, 341 F.3d 1148, 1163-64 (9th Cir.

2003)). We now turn to California’s preclusion law to determine if MHC’s constitutional claims are reviewable in federal

court. 

2. Res Judicata — Counts I, II, III, VII, VIII 

[3] Federal courts are required to give full faith and credit

to state court judgments under 28 U.S.C. § 1738. See San

11178 MANUFACTURED HOME CMTYS. v. SAN JOSE
Remo Hotel, L.P. v. City & County of San Francisco, 125

S. Ct. 2491 (2005). Generally “[u]nder res judicata, a final

judgment on the merits of an action precludes the parties or

their privies from relitigating issues that were or could have

been raised in that action.” Allen v. McCurry, 449 U.S. 90, 94

(1980). To determine the preclusive effect of a state court

judgment federal courts look to state law. Palomar Mobilehome Park Ass’n. v. City of San Marcos, 989 F.2d 362, 364

(9th Cir. 1993). California’s res judicata doctrine is based on

a primary rights theory. The California Supreme Court

explained that the primary rights theory: 

[P]rovides that a “cause of action” is comprised of a

“primary right” of the plaintiff, a corresponding “primary duty” of the defendant, and a wrongful act by

the defendant constituting a breach of that duty. The

most salient characteristic of a primary right is that

it is indivisible: the violation of a single primary

right gives rise to but a single cause of action. 

Mycogen Corp. v. Monsanto Co., 51 P.3d 297, 306 (Cal.

2002) (citations omitted). A party may bring only one cause

of action12 to vindicate a primary right. Id. at 302. Claims not

12MHC argues, based on a decision by the California Courts of Appeal,

that a mandamus proceeding is a special proceeding, not a cause of action,

and cannot have preclusive effect. See Mata v. City of Los Angeles, 24

Cal. Rptr. 2d 314, 319 (Cal. Ct. App. 1993). A later decision by that court

clarifies, however, that the Mata decision did not create such a holding.

See Federation of Hillside & Canyon Assns. v. City of Los Angeles, 24

Cal. Rptr. 3d 543, 559-60 (Cal. Ct. App. 2004). This later opinion held

that if the requirements of the preclusion doctrine are met, then a mandamus action will preclude further litigation. Id. at 559. The court said: 

We see no reason to distinguish between actions and special proceedings (see Code Civ. Proc., §§ 22, 23) for purposes of res

judicata if the requirements of the doctrine are satisfied and if the

issues asserted in the later proceeding could have been asserted

in the prior proceeding. Application of res judicata in those circumstances serves the purposes of the doctrine, to prevent inconMANUFACTURED HOME CMTYS. v. SAN JOSE 11179
raised in this single cause of action may not be raised at a

later date. Id.

MHC’s claims in federal and state court all involve a single

primary right: the right to receive a fair return on its investment at Westwinds. They all stem from a single injury MHC

claims to suffer. See Takahashi v. Bd. of Trs., 783 F.2d 848,

851 (9th Cir. 1986) (holding the plaintiff’s statutory mandamus proceeding in state court barred the plaintiff’s constitutional claims in federal court because both actions stemmed

from a single primary right: the contractual right to employment). MHC’s claims all relate to a single Ordinance and the

City’s application of that Ordinance to MHC’s petition for a

rent increase. MHC’s different Counts13 are simply different

legal theories under which MHC may recover. Different theories of recovery are not separate primary rights. Mycogen

Corp., 51 P.3d at 307; see also Slater v. Blackwood, 543 P.2d

593, 594-95 (Cal. 1975) (“Even where there are multiple legal

theories upon which recovery might be predicated, one injury

gives rise to only one claim for relief.”). MHC has already litigated its right to a fair return in state court. The state courts

held that if MHC will estimate the 1985 financial figures for

sistent rulings, promote judicial economy by preventing repetitive

litigation, and protect against vexatious litigation. 

Id. Moreover, it is well-settled by the California Supreme Court that “the

doctrine of res judicata applies to judgments on the merits in proceedings

in mandamus.” Hollywood Circle, Inc. v. Dep’t of Alcoholic Beverage

Control, 361 P.2d 712, 715 (Cal. 1961). MHC’s argument misrepresents

California law on this matter. A mandamus action may, and in this case

does, preclude further litigation. 

13The Counts at issue here are: substantive due process (fair hearing,

biased hearing officer, and arbitrary, capricious, and unreasonable burden); equal protection; as-applied takings claim for general application of

the Ordinance; and facial takings claim. Claims related to the second

homeowner exemption and the Individual Defendants are not affected by

this analysis. Those are separate from the MHC’s general claims against

the Ordinance. 

11180 MANUFACTURED HOME CMTYS. v. SAN JOSE
its mobilehome park, then MHC will receive a fair return.

Additional theories of recovery based on MHC’s right to a

fair return may not be asserted in federal court. 

[4] To adjudicate MHC’s constitutional claims would

require upsetting legal conclusions of the California courts

regarding the Ordinance. The California Superior Court and

the California Courts of Appeal both held the City’s Ordinance allows MHC to receive a fair return. MHC need only

estimate the financial figures for 1985, as both courts held

MHC is capable of doing, to determine a fair return. As the

district court recognized, “[T]his Court would be unable to

pass judgment on MHC’s claims without addressing the state

court’s determinations on those issues. Any remedy for Plaintiff on these claims would in effect nullify that judgment in

violation of res judicata.” Manufactured Home Cmtys. v. San

Jose, 358 F. Supp. 2d 896, 906 (N.D. Cal. 2003). MHC’s

claims either have been or should have been raised in state

court, and MHC is precluded from raising them in federal

court. 

[5] The Supreme Court very recently addressed res judicata

in the context of a takings claim in San Remo Hotel, L.P. v.

City & County of San Francisco, 125 S. Ct. 2491 (2005).

There, much like here, the claims presented in federal court

“depended on issues identical to those that had previously

been resolved in the state-court action.” Id. at 2495. We cannot consider MHC’s claims without rejecting the California

courts’ conclusion that MHC will receive a fair return if it

estimates the necessary financial figures. The district court’s

conclusion that Counts I, II, III, VII, and VIII of MHC’s complaint are res judicata is affirmed. 

3. Ripeness — Count IV 

MHC’s Counts IV, V, and VI were not dismissed under

either Rooker-Feldman or res judicata. These claims were not

pursued in state court, but were brought against the City and

MANUFACTURED HOME CMTYS. v. SAN JOSE 11181
the Individual Defendants in federal court for violations

related to the second homeowner exemption under California

state law. The exemption is part of California’s Civil Code,

not San Jose’s municipal code. It exempts mobilehome owners who own second homes from rent control ordinances. Cal.

Civ. Code § 798.21. 

MHC believes that the Individual Defendants, four residents of Westwinds, are exempt from San Jose’s rent control

Ordinance as second homeowners. MHC notified those residents it was raising their rent. The City and the residents

objected. The City told MHC that it had to go through the

administrative process to raise the residents’s rent. The City

Attorney issued a letter opinion stating the residents were not

subject to the statutory exemption. The Individual Defendants

argued they qualified for exceptions to the second homeowner

exemption under California Civil Code § 798.21(f). 

MHC did not pursue a rent increase through San Jose’s

administrative process; instead it sued the City and the Individual Defendants in federal court. MHC claims the City

denied procedural due process by rendering a final decision

without notice or an opportunity to be heard (Count IV).

MHC requested declaratory relief (Count V) and enforcement

of the statutory exemption (Count VI). 

The district court dismissed these claims as unripe under

Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985), and as failing to state a claim

within the federal question jurisdiction of the court. MHC

argues Count IV is not subject to the Williamson County ripeness test because Count IV is a due process claim, separate

from MHC’s takings claim. In the alternative MHC argues,

that if the Williamson County test applies to Count IV, the

City Attorney’s letter was a final administrative action. Id. at

45-46. MHC believes it either fulfills or is exempt from fulfilling the Williamson County ripeness test. 

11182 MANUFACTURED HOME CMTYS. v. SAN JOSE
[6] We need not decide whether Count IV is subject to the

Williamson County ripeness test for takings claims because

Count IV fails even the basic requirements of the ripeness

doctrine, to which all claims in federal court are subject. See

Babbitt v. United Farm Workers Nat’l Union, 442 U.S. 289,

297-98 (1979). The Supreme Court has explained that the

ripeness doctrine’s “basic rationale is to prevent the courts,

through avoidance of premature adjudication, from entangling

themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and

its effects felt in a concrete way by the challenging parties.”

Abbott Labs. v. Gardner, 387 U.S. 136, 148-49 (1967). Premature adjudication is exactly the problem plaguing MHC’s

due process claim: MHC never engaged in the administrative

process. MHC never filed a petition to raise the Individual

Defendants’ rents. No final administrative decision exists for

MHC’s claims related to the second home owner exemption.

If MHC files a petition, then the hearing officer may or may

not grant the rent increase. Until MHC files the petition, there

is no way of knowing whether a real case or controversy

exists. Due process has not been denied because no process

was pursued. MHC’s due process claim is not ripe for adjudication. 

The prudential aspect of ripeness is considered in a two

prong test: “(1) the fitness of the issues for judicial decision;

and (2) the hardship to the parties of withholding court consideration.” Principal Life Ins. Co. v. Robinson, 394 F.3d 665,

670 (9th Cir. 2005). Only four homes in MHC’s 700+ unit

mobilehome park are at issue under the second homeowner

exemption. Nothing in the record suggests delaying resolution

of this legal issue will significantly harm either party. MHC

has not sought an administrative rent increase for the four

homes. The interpretation of the statute is an issue of state law

and no California court has interpreted that statute as applied

in these circumstances. The fitness of these issues for judicial

decision is poor, and the hardship to the parties is minor. 

MANUFACTURED HOME CMTYS. v. SAN JOSE 11183
MHC’s argument that the City Attorney’s letter is a final

interpretation of the City’s law is belied by the plain language

of the City’s municipal code. Under the code only decisions

by hearing administrators are binding and final. Opinions by

the City Attorney are not endowed with any legal authority.

Compare SJMC § 17.22.840 and SJMC § 17.22.1030. The

City Attorney’s letter is not a final administrative decision. 

[7] MHC must pursue a rate increase for the Individual

Defendants before pursuing these claims in federal court. This

MHC has not done. Its claims related to the second homeowner exception are not ripe for review. 

4. Federal question and supplemental jurisdiction —

Counts V & VI 

[8] MHC’s Counts V and VI do not raise independent federal questions. MHC does not argue otherwise. In the absence

of jurisdiction over Count IV, there is no federal jurisdiction

over Counts V and VI. See 28 U.S.C. § 1367(a). However,

even if the district court has jurisdiction over Count IV, the

court may exercise its discretion to decline supplemental

jurisdiction over Counts V and VI. 28 U.S.C. § 1367(c). The

district court declined to exercise supplemental jurisdiction

over Counts V and VI because the claims raise “novel” issues

of State law. Manufactured Home Cmtys., 358 F. Supp. 2d at

910 (citing 28 U.S.C. § 1367(c)). 

MHC argues the California statute at issue does not present

a novel or complex issue of law. The City and the Individual

Defendants disagree. While the statute may not be complex

on its face, the application of the law in these circumstances

is uncertain. The second homeowner exemption does not

apply to owners who are renting their mobilehome, Cal. Civ.

Code § 798.21(a), and it does not apply if the mobilehome is

for sale, id. § 798.21(f)(2). 

The Individual Defendants argue the second homeowner

exemption does not apply to them under these sections of the

11184 MANUFACTURED HOME CMTYS. v. SAN JOSE
statute. The four spaces challenged by MHC are either occupied by a co-owner, subject to a valid sublease, or held out for

sale as of the original rent increase notice. Under these circumstances, the application of the exceptions to the exemption for rent control depends on how the statute is interpreted.

No California state court has interpreted this statute for these

purposes. 

[9] The district court was correct to conclude that MHC’s

Counts V and VI raise novel issues of state law. The district

court did not abuse its discretion in declining to exercise supplemental jurisdiction. 

5. Ripeness — Count VII

MHC made several arguments to support its as-applied takings claim under Count VII. The as-applied claim challenges

the City’s application of the Ordinance and the second homeowner exception. MHC argues the City’s application of the

Ordinance creates a sales premium for mobilehomes within

Westwinds. This premium, MHC argues, impermissibly transfers property from MHC to the individual homeowners. MHC

also argues the City’s application of the Ordinance does not

allow MHC a fair and reasonable return on its investment.

Thus, MHC argues, the City fails to “substantially advance”

the stated goals of the Ordinance or any other legitimate government interest.14

[10] Constitutional takings claims are subject to the Williamson County ripeness test. Williamson County Reg’l Planning Comm’n v. Hamilton Bank, 473 U.S. 172 (1985). Under

Williamson County there are two parts to establishing ripeness

for a takings claim brought in federal court against a state or

14This claim is now foreclosed by the Supreme Court’s decision in

Lingle v. Chevron U.S.A., 125 S. Ct. 2074, 2087 (2005) (holding the

“ ‘substantially advances’ formula is not a valid takings test, and indeed

[ ] it has no proper place in our takings jurisprudence”). 

MANUFACTURED HOME CMTYS. v. SAN JOSE 11185
subdivision thereof. The first step requires that “the government entity charged with implementing the regulations has

reached a final decision regarding the application of the regulations to the property at issue.” Id. at 186. The second step

requires the plaintiff to “seek compensation through the procedures the State has provided for doing so.” Id. at 194. 

[11] A petitioner need not seek state remedies if to do so

would be futile. Id. at 194-95. The futility exception is narrow, and mere uncertainty does not establish futility. Del

Monte Dunes at Monterey, Ltd. v. City of Monterey, 920 F.2d

1496, 1501 (9th Cir. 1990).15 Under the exception:

The landowner bears the burden of establishing, by

more than mere allegations, the futility of pursuing

any of the steps needed to obtain a final decision.

Moreover, before claiming the exception, the landowner must submit at least one development proposal and one application for a variance if

meaningful application and submission can be made.

Id. (citations omitted); see also Carson Harbor Vill., Ltd. v.

City of Carson, 353 F.3d 824, 827 (9th Cir. 2004). 

Applied takings claims — General rent increases 

[12] MHC pursued its general rate increase claims through

the administrative process provided by the Ordinance. The

hearing officer twice denied MHC’s rent increase. These

actions are sufficient to fulfill the first prong of the Williamson County test for MHC’s takings claims related to a general

rent increase. 

[13] As to the second prong, MHC claims to be excused

15Del Monte Dunes dealt with land use regulations but the same standards apply to rent control regulations. See Amberhill Props. v. City of

Berkeley, 814 F.2d 1340, 1341 (9th Cir. 1987). 

11186 MANUFACTURED HOME CMTYS. v. SAN JOSE
from seeking compensation because doing so would be futile.

MHC argues that the City’s hearing officer was financially

biased against it and, as a result, California’s Kavanau adjustment16 is inadequate as compensation for MHC. MHC’s argument that the hearing officer is biased is nothing more than

speculation. Although the facts alleged by a plaintiff are

assumed true under a motion to dismiss, this court need not

accept baseless allegations as proof of futility. This court is

not “required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable

inferences.” Sprewell v. Golden State Warriors, 266 F.3d 979,

988 (9th Cir. 2001) (reviewing motion to dismiss for failure

to state a claim under Rule 12(b)(6)). MHC’s bias allegations,

at best, produce uncertainty and uncertainty does equal futility. See Del Monte Dunes, 920 F.2d at 1501. 

Moreover, “The Supreme [C]ourt has indicated that at least

one application must be submitted before the futility exception applies.” Kinzli v. City of Santa Cruz, 818 F.2d 1449,

1454 (9th Cir. 1987); see also Amberhill Props., 814 F.2d at

1341 (holding failure to seek a rent adjustment before bringing takings action makes a claim of futility wholly speculative). MHC did not pursue even a single petition for

compensation. 

[14] At this time, MHC is foreclosed from pursuing a futility exception from the Williamson County ripeness require16Under Kavanau v. Santa Monica Rent Control Board, 941 P.2d 851

(Cal. 1997), and Galland v. City of Clovis, 16 P.3d 130 (Cal. 2001), California’s procedure for seeking just compensation after a local rent control

board denies an adjustment requires petitioners to file a writ of mandamus

in state court. If the writ is granted, the property owner may seek an

adjustment of future rents before the local rent control board. The rent

control board is supposed to take the past improper denial into account

when calculating the future adjustment. The future adjustment is called a

Kavanau adjustment. The writ and the Kavanau adjustment must be pursued before any inverse condemnation or § 1983 action may be pursued

in state court. 

MANUFACTURED HOME CMTYS. v. SAN JOSE 11187
ments. MHC’s as-applied takings claim against the Ordinance

is not ripe for review. 

Applied takings claims — Second homeowner exemption 

[15] MHC did not pursue any second homeowner exemption claims through the administrative process provided by the

Ordinance. Instead, MHC says a letter from the City attorney

was a “final decision” on this matter. In the alternative, MHC

claims it would be futile to pursue these claims through the

administrative process because the hearing officer was biased.

As discussed above, neither of these claims have merit. See

infra pp. 11182-84. The Ordinance does not grant any final or

binding authority to opinions by the City Attorney. SJMC

§ 17.22.1040. MHC never petitioned the City to grant the second homeowner exemption nor did it make an application for

compensation under the second homeowner exemption.

MHC’s as-applied takings claim regarding the second homeowner exemption is not ripe under either prong of the Williamson County ripeness test.

6. Statute of limitations — Count VIII 

[16] MHC’s facial takings claim asserts that the Ordinance

fails to “substantially advance” a legitimate state interest. This

claim is foreclosed by the Supreme Court’s recent holding

that the “ ‘substantially advances’ formula is not a valid takings test, and indeed [ ] it has no proper place in our takings

jurisprudence.” Lingle, 125 S. Ct. at 2087. In any event, we

would affirm the district court’s statute of limitations decision

denying relief. 

7. Attorneys fees — District Court 

The district court denied sanctions against MHC’s attorneys under Rule 11 and granted the City of San Jose’s attorneys’ fees under Rule 54. Fed. R. Civ. Pro. 11 & 54(b).

Manufactured Home Cmtys., 358 F. Supp. 2d at 909. A dis11188 MANUFACTURED HOME CMTYS. v. SAN JOSE
trict court’s decision to award attorneys’ fees is reviewed for

abuse of discretion. Barry v. Fowler, 902 F.2d 770, 773 (9th

Cir. 1990). 

[17] Defendants requesting attorneys’ fees from a plaintiff

in a civil rights action must meet a heightened standard.

Hughes v. Rowe, 449 U.S. 5, 14 (1980). The Supreme Court

said attorneys’ fees should be granted to a defendant in a civil

rights action “only if the District Court finds ‘that the plaintiff’s action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith.’ ” Id.

“An appeal is considered frivolous in this circuit when the

result is obvious, or the appellant’s arguments of error are

wholly without merit.” Taylor v. Sentry Life Ins. Co., 729

F.2d 652, 656 (9th Cir. 1984). The district court’s order does

not mention the heightened standard for awarding attorneys

fees in this situation. See Manufactured Home Cmtys., 358 F.

Supp. 2d at 903, 909. Rather, it cites language similar to the

Hughes language on attorneys’ fees to deny Rule 11 sanctions. Id. at 909. It appears the district court overlooked the

heightened standard set by the Supreme Court for awarding

attorneys’ fees and applied the wrong legal standard for granting fees. Applying the incorrect legal standard is an abuse of

discretion. Casey v. Albertson’s Inc., 362 F.3d 1254, 1257

(9th Cir. 2004). We remand to the district court for a determination of whether granting attorneys’ fees to the City of San

Jose is proper in this case. 

8. Attorneys’ fees — Courts of Appeal

[18] The City’s motion for attorneys’ fees on appeal is

denied. While the City is surely frustrated with MHC’s

unwillingness to estimate the financial data for Westwinds

and instead to pursue this lengthy litigation, the claims MHC

brought before this court are not wholly without merit. In

light of the uncertainties in the law (see Noel, 341 F.3d 1148

and Exxon Mobil Corp., 125 S. Ct. 1517), MHC had reason

to appeal the district court’s decision. MHC’s appeal was not

MANUFACTURED HOME CMTYS. v. SAN JOSE 11189
“frivolous, unreasonable, or without foundation.” Hughes,

449 U.S. at 14. 

9. Motion for judicial notice 

The City’s motion for judicial notice of its Answer to

MHC’s petition for review in the California Supreme Court is

granted. The City’s Answer is helpful in considering matters

related to preclusion in the state courts. In Holder v. Holder,

305 F.3d 854, 866 (9th Cir. 2002), this court took judicial

notice of a state court decision and the briefs filed in that

court to determine if an issue was raised and decided by the

state court for res judicata purposes. Likewise, in this case

judicial notice of the City’s Answer is helpful for examining

the claims litigated in state court. 

Conclusion

The district court’s order dismissing MHC’s complaint is

affirmed as to res judicata, ripeness, California’s statute of

limitations, and failure to state a federal claim and lack of

supplemental jurisdiction. The district court’s order is

reversed as to the Rooker-Feldman doctrine. The matter of

attorneys’ fees is reversed and remanded.

AFFIRMED IN PART, REVERSED IN PART, AND

REMANDED. 

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