Court Opinion

ID: 9781034
Source: CourtListenerOpinion
Date Created: 2023-08-30 16:00:52.504384+00
Date Added: 2024-06-11T12:11:07.748673
License: Public Domain

FOR PUBLICATION

     UNITED STATES COURT OF APPEALS
          FOR THE NINTH CIRCUIT

HOWARD ITEN,                                      No. 22-55480

                 Plaintiff-Appellant,               D.C. No.
                                                 2:21-cv-00486-
    v.                                             DDP-JEM

COUNTY OF LOS ANGELES,
                                                    OPINION
                 Defendant-Appellee.

         Appeal from the United States District Court
            for the Central District of California
         Dean D. Pregerson, District Judge, Presiding

            Argued and Submitted April 10, 2023
                    Seattle, Washington

                     Filed August 30, 2023

     Before: Jay S. Bybee and Danielle J. Forrest, Circuit
       Judges, and Andrew P. Gordon, * District Judge.

                  Opinion by Judge Bybee;
            Partial Concurrence by Judge Gordon

*
 The Honorable Andrew P. Gordon, United States District Judge for the
District of Nevada, sitting by designation.
2                 ITEN V. COUNTY OF LOS ANGELES

                          SUMMARY **

                  Standing/Contracts Clause

    The panel reversed the district court’s dismissal for lack
of standing of commercial property landlord Howard Iten’s
complaint alleging that the County of Los Angeles’ 2020
eviction moratorium, enacted following the outbreak of
COVID-19, violated his rights under the Contracts Clause of
the United States Constitution.
    The moratorium provided tenants with an affirmative
defense against eviction if they gave monthly notice to the
landlord that they were unable to pay rent. The district court
found that because Iten’s tenant did not provide the required
monthly notice or offer extenuating circumstances for failing
to do so, Iten was free to evict his tenant and did not suffer
an injury traceable to the moratorium.
    The panel held that Iten had standing to bring his
Contracts Clause claim. Iten’s injury for Article III purposes
did not depend on whether Iten’s tenant provided notice or
was otherwise excused from doing so. Those questions went
to the merits of the claim rather than Iten’s standing to bring
suit. Iten alleged that the moratorium impaired his contract
with his tenant because it altered the remedies the parties had
agreed to at the time they entered into the lease. The panel
held that these allegations were sufficient to plead an injury
in fact and to state a claim under the Contracts Clause, and
remanded to the district court for further proceedings.

**
  This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                ITEN V. COUNTY OF LOS ANGELES               3

    Concurring in part, Judge Gordon disagreed that Iten
plausibly alleged an injury-in-fact simply because the
moratorium imposed additional terms. Moreover, there
were factual questions about the lease that made remanding
with a direction that Iten had standing premature. Because
the district court raised the issue of standing sua sponte and
the parties did not fully brief the issue, Judge Gordon would
reverse the district court’s order dismissing the case with
prejudice and remand for further development of the
standing issue.

                        COUNSEL

Kathryn D. Valois (argued), Pacific Legal Foundation, Palm
Beach Gardens, Florida; Lawrence G. Salzman and Damien
M. Schiff, Pacific Legal Foundation, Sacramento,
California; for Plaintiff-Appellant.
Edward L. Xanders (argued) and Timothy T. Coates,
Greines Martin Stein & Richland LLP, Los Angeles,
California; Andrew Baum and Jesse B. Levin, Glaser Weil
Fink Howard Jordan & Shapiro LLP, Los Angeles,
California; Sayuj Panicker, Senior Deputy County Counsel,
Transportation Division; Dawn R. Harrison, Interim County
Counsel; Los Angeles County Counsel’s Office, Los
Angeles, California; for Defendant-Appellee.
4               ITEN V. COUNTY OF LOS ANGELES

                         OPINION

BYBEE, Circuit Judge:

    In early 2020, following the outbreak of COVID-19, Los
Angeles County passed the “Resolution of the Board of
Supervisors of the County of Los Angeles Further Amending
and Restating the Executive Order for an Eviction
Moratorium During Existence of a Local Health Emergency
Regarding Novel Coronavirus (COVID-19)” (the
“Moratorium”).       The Moratorium imposed temporary
restrictions on certain residential and commercial tenant
evictions. Moratorium § IV (July 14, 2021). It provided
tenants with new affirmative defenses to eviction based on
nonpayment of rent, prohibited landlords from charging late
fees and interest, and imposed civil and criminal penalties to
landlords who violate the Moratorium. Id. § V (July 14,
2021). Howard Iten, a commercial landlord, sued the
County, arguing that the Moratorium impaired his lease, in
violation of the Contracts Clause of the U.S. Constitution.
U.S. Const. art. I, § 10, cl. 1. The district court found that
Iten had not alleged an injury in fact and dismissed his
complaint for lack of standing. We reverse and remand.
                              I
    In March 2020, Los Angeles County declared a state of
emergency due to the COVID-19 pandemic and issued an
Executive Order that imposed a temporary moratorium on
evictions for nonpayment of rent by tenants impacted by
COVID-19. In April 2020, the Board expanded the
Executive Order to include all incorporated cities within the
County. Moratorium § IV(B). The County extended the
Moratorium’s end date several times and made other
alterations that are immaterial to the case before us.
                ITEN V. COUNTY OF LOS ANGELES                5

     The Moratorium did not prohibit property owners from
filing evictions in accordance with State law, but it provided
tenants with an affirmative defense against eviction. Id.
§ X(C). The Moratorium provided that “[a] Tenant shall not
be evicted for nonpayment of rent, late charges, interest, or
any other fees accrued if the Tenant demonstrates an
inability to pay rent . . . due to Financial Impacts Related to
COVID-19.” Id. § V(A)(1). To demonstrate such inability,
the Tenant must have provided “notice to the Landlord
within seven (7) days after the date that rent and/or such
related charges were due, unless extenuating circumstances
exist, that the Tenant is unable to pay.” Id. For commercial
tenants with nine employees or fewer, the tenants “may
provide, and Landlords must accept, a self-certification of
inability to pay rent.” Id. § V(B)(2). The Moratorium also
provided tenants with a year-long forbearance period after
the Moratorium ends to pay overdue rent. Id. § V(C)(2).
Additionally, the Moratorium prohibited the collection of
late fees and interest for overdue moratorium-period rent. Id.
§ VII. It also prohibited landlords from harassing tenants,
which was defined, in part, as attempting to evict tenants
who are protected by the Moratorium “based upon facts
which the Landlord has no reasonable cause to believe to be
true or upon a legal theory which is untenable under the facts
known to the Landlord.” Id. § VIII(I). Landlords who failed
to comply with the Moratorium are subject to criminal and
civil penalties, including fines of up to $5,000 per day. Id.
§ X(A)–(C).
     According to the complaint, Iten is a mechanic and
retired auto repair shop owner. He is part-owner of a 2,600-
square-foot commercial property located in Los Angeles
County. In August 2015, Iten executed a five-year lease
agreement, renting the property to a commercial tenant, who
6               ITEN V. COUNTY OF LOS ANGELES

then subleased the space to an auto repair franchisee (the
Tenant), who has fewer than ten employees. In April 2020,
the Tenant notified Iten that he was “very adversely
[a]ffected by Covid 19” and stopped paying rent. The
Tenant paid no rent between April and August of 2020. With
the five-year lease set to expire in August 2020, Iten
negotiated a new five-year lease with the Tenant that
included a promise to pay the back rent as well as future rent.
The new lease commenced on September 1, 2020. The
Tenant continued not paying rent.
    In January 2021, Iten brought suit for declaratory relief
under 28 U.S.C. §§ 2201–22 and for damages under 42
U.S.C. § 1983 on the grounds that the Moratorium violated
his rights under the Contracts Clause. U.S. Const. art. I,
§ 10, cl. 1 (“No State shall . . . pass any . . . Law impairing
the Obligation of Contracts.”). Iten alleged that the
Moratorium unreasonably impairs the obligations of his
lease agreement with the Tenant. Specifically, Iten claimed
that because of the Moratorium, he was prohibited from
evicting his Tenant and attempting to recover past rent, late
fees, or interest. He also claimed that at the end of the lease,
he “would have preferred to end his business relationship
with the Tenant,” but that he “concluded [because of the
Moratorium] that he had no prudent course of action open to
him other than to negotiate a new lease with the Tenant so as
to increase the chances of someday recovering the past-due
rent.”
    The County moved to dismiss Iten’s complaint, arguing
that the Moratorium did not actually prohibit Iten from
evicting his Tenant. The County argued that because the
Tenant failed to provide monthly notices of his inability to
pay rent or, alternatively, failed to articulate extenuating
circumstances excusing him from providing those notices,
                ITEN V. COUNTY OF LOS ANGELES                 7

the Tenant would not have qualified for the affirmative
defense provided by the Moratorium. Iten was therefore free
to evict the Tenant, and the Moratorium therefore did not
injure Iten. The district court agreed and dismissed Iten’s
complaint for lack of standing but granted leave to amend.
    Iten inquired from his Tenant whether there were
extenuating circumstances to excuse the Tenant from
making the monthly notices. The Tenant responded that,
“yes” there were extenuating circumstances, and that the
Tenant did not believe the Moratorium required him to
provide monthly notices. With this new information, Iten
amended his complaint.
    The County again moved to dismiss, this time on the
merits. The district court, sua sponte, raised the standing
issue once more. The court reasoned that “if the Moratorium
does not prevent [Iten] from evicting his tenant, then . . . the
Moratorium cannot have caused [Iten] any injury, and he
lacks standing to bring suit.” Because Iten failed to allege
that the “[T]enant gave timely notice of his inability to pay
rent” or that the Tenant “specifically identified extenuating
circumstances excus[ing] the [T]enant’s failure to give
notice . . . [,] the Moratorium’s protections did not apply to
[the Tenant]” and Iten “could not allege that the Moratorium
caused him any injury.” The district court concluded that
Iten lacked standing to bring his suit. “Having dismissed for
lack of jurisdiction,” the district court declined to reach
Iten’s claims under the Contracts Clause.
                               II
     The district court’s dismissal without leave to amend is
a final, appealable order. Gerritsen v. de la Madrid Hurtado,
819 F.2d 1511, 1514–15 (9th Cir. 1987). We review de novo
an order granting a motion to dismiss for lack of standing.
8               ITEN V. COUNTY OF LOS ANGELES

Southcentral Found. v. Alaska Native Tribal Health
Consortium, 983 F.3d 411, 416–17 (9th Cir. 2020). We
assume all Iten’s allegations to be true and draw all
reasonable inferences in his favor. Wolfe v. Strankman, 392
F.3d 358, 362 (9th Cir. 2004).
                              III
   We will begin with a discussion of standing and then
consider how to apply those rules in the context of a claim
brought under the Contracts Clause.
                               A
     Article III of the Constitution limits the “judicial Power”
of the federal courts to “Cases, in Law and Equity, arising
under this Constitution[ and] the Laws of the United States.”
U.S. Const. art. III, § 2, cl. 1. This provision, commonly
referred to as the “case-or-controversy” requirement of
Article III, is an independent constraint on the jurisdiction of
federal courts. The “case-or-controversy” requirement
states “fundamental limits on federal judicial power in our
system of government. The Art. III doctrine that requires a
litigant to have ‘standing’ to invoke the power of a federal
court is perhaps the most important of these doctrines.”
Allen v. Wright, 468 U.S. 737, 750 (1984); see also Raines
v. Byrd, 521 U.S. 811, 818 (1997). Accordingly, as the
district court recognized, federal courts have a duty to raise,
sua sponte, questions of standing before addressing the
merits. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83,
94 (1998). To establish standing, a plaintiff must show (1)
an “injury in fact,” (2) a “causal connection between his
injury and the conduct complained of,” and (3) that his injury
will “‘likely’ . . . be ‘redressed by a favorable decision.’”
Lujan v. Defs. of Wildlife, 504 U.S. 555, 560, 561 (1992)
                ITEN V. COUNTY OF LOS ANGELES              9

(quoting Simon v. E. Ky. Welfare Rts. Org., 426 U.S. 26, 38,
43 (1976)).
    “[I]njury in fact [is] the ‘[f]irst and foremost’ of
standing’s three elements.” Spokeo, Inc. v. Robins, 578 U.S.
330, 338 (2016) (quoting Steel Co., 523 U.S. at 103). An
injury in fact must be both “concrete and particularized” and
“actual or imminent,” as opposed to “conjectural or
hypothetical.” Lujan, 504 U.S. at 560 (cleaned up). A
“particularized” injury must be personal, not a “generalized
grievance.” Southcentral Found., 983 F.3d at 417 (quoting
Thomas v. Mundell, 572 F.3d 756, 760 (9th Cir. 2009)).
Moreover, the injury must be “concrete,” meaning that “it
must actually exist. . . . ‘Concrete’ is not, however,
necessarily synonymous with ‘tangible.’ Although tangible
injuries are perhaps easier to recognize, . . . intangible
injuries can nevertheless be concrete.” Spokeo, 578 U.S. at
340.
    The district court below, and the parties on appeal, have
operated on the premise that Iten’s standing to bring a claim
under the Contracts Clause turns on whether the Tenant gave
Iten proper notice under the Moratorium, and, alternatively,
“the availability to Iten’s tenant of the extenuating
circumstances exception to the [M]oratorium’s monthly
notice requirement.”       Accordingly, the parties have
suggested different interpretations of the term “extenuating
circumstances” to argue why the Tenant does or does not
qualify. Iten, for example, argues that the Tenant’s
misinterpretation of the Moratorium counts as an
“extenuating circumstance[]” to excuse him from otherwise
providing monthly notices. The County argues that the
Tenant’s mistake of law is not a qualifying “extenuating
circumstance[].” But arguments from both sides over
whether the Tenant actually qualifies for the Moratorium’s
10               ITEN V. COUNTY OF LOS ANGELES

protections are arguments about how the Moratorium affects
Iten’s rights as landlord.
    Standing concerns who can bring a challenge to a
particular law; it is an inquiry into whether and how the law
in question affects the party who has brought the suit. The
injury-in-fact inquiry seeks to assure that the plaintiff is not
an intermeddler, generally unhappy with the law, but without
any particular stake in the outcome. Whether the party can
ultimately prevail in the suit is an entirely different question.
A well-pleaded complaint typically has a demand for relief,
which follows from the plaintiff’s “short and plain
statement” of how the defendant has injured him. See Fed.
R. Civ. P. 8(a). On a motion to dismiss, the district court
may conclude that the plaintiff has failed to state a claim
upon which relief can be granted, id. 12(b)(6); on summary
judgment, the court may determine that there are no disputes
of material fact and defendant is entitled to judgment as a
matter of law, id. 56(a); or, after trial, the trier of fact may
decide that the plaintiff has failed to prove his case and may
take nothing from the suit. In all three of these instances,
this may mean that the plaintiff did not suffer redressable
injury; it inevitably means that the plaintiff will, in fact,
recover nothing. We might say, conversationally, that the
plaintiff was not in fact injured. But when the jury, for
example, returns a verdict for the defendant, the court does
not dismiss the case for lack of standing. Even if the jury
determined that any damages were zero, the fact that the
court can award no relief does not mean that the court lacked
jurisdiction to hear the case. Although a merits question may
look similar to the standing question of whether there is an
injury in fact traceable to the relevant law under which the
plaintiff has brought suit, confusing the two “conflate[s]
                 ITEN V. COUNTY OF LOS ANGELES                 11

standing with the merits.” Lazar v. Kronche, 862 F.3d 1186,
1198–99 (9th Cir. 2017).
    The difference between demonstrating injury in fact for
standing and compensable injury to prevail on the merits is
reflected in the rules of procedure. At the pleading stage,
jurisdictional rules are addressed under Federal Rule of Civil
Procedure 12(b)(1), while the failure to state a claim upon
which relief may be granted—whether on the merits or
because of a procedural rule—is governed by Rule 12(b)(6).
See Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir.
2011) (“Though lack of statutory standing requires dismissal
for failure to state a claim [under Federal Rule of Procedure
12(b)(6)], lack of Article III standing requires dismissal for
lack of subject matter jurisdiction under Federal Rule of
Civil Procedure 12(b)(1).”). The difference between the two
rules is not merely academic. Many rules can be waived or
forfeited by the parties, but jurisdictional rules—such as
Article III standing—may be raised “at any time.” Fed. R.
Civ. P. 12(h)(3); see Arbaugh v. Y & H Corp., 546 U.S. 500,
506–07 (2006).
    Iten brought his complaint under the Contracts Clause.
He did not allege that either the Moratorium or California
landlord-tenant law created his cause of action. His claim is
brought directly under the Constitution; the relief he seeks is
a declaratory judgment under 28 U.S.C. § 2201 and damages
under 42 U.S.C. § 1983. See S. Cal. Gas. Co. v. City of Santa
Ana, 336 F.3d 885, 887 (9th Cir. 2003) (per curiam)
(recognizing that Contracts Clause claims may be brought
under § 1983). “Although standing in no way depends on
the merits of the plaintiff’s [case] . . . , it often turns on the
nature and source of the claim asserted.” Warth v. Seldin,
422 U.S. 490, 500 (1975) (citation omitted). In order to
understand whether Iten has standing to bring his Contracts
12              ITEN V. COUNTY OF LOS ANGELES

Clause claim against the County, we will need to understand
the nature of claims under the Contracts Clause.
                              B
    The Contracts Clause has no common-law or state-law
antecedent. It first appeared in the Northwest Territory
Ordinance of 1787, which Congress adopted in July 1787,
just weeks before the constitutional convention began in
Philadelphia. See Matthew J. Hegreness, Note, An Organic
Law Theory of the Fourteenth Amendment: The Northwest
Ordinance as the Source of Rights, Privileges, and
Immunities, 120 Yale L.J. 1820, 1825 n.8 (2011); Denis P.
Duffey, Note, The Northwest Ordinance as a Constitutional
Document, 95 Colum. L. Rev. 929, 938, 960 (1995). Article
II of the Ordinance provided in relevant part:

       And, in the just preservation of rights and
       property, it is understood and declared, that
       no law ought ever to be made or have force
       in the said territory, that shall, in any manner
       whatever, interfere with or affect private
       contracts, or engagements, bona fine, and
       without fraud previously formed.

An Ordinance for the Government of the Territory of the
United States North-West of the River Ohio, art. II (1787).
The provision in the Northwest Ordinance was a response to
the recently-concluded Shays’ rebellion, which was a protest
over the enforcement of hard-money debts. In the post-
Revolutionary War era, many states adopted “debt
moratoriums; laws allowing debts to be paid in gradual
installments despite contrary terms of the contract; . . . and
laws requiring creditors to accept paper money . . . as legal
tender.” Michael W. McConnell, Contract Rights and
                ITEN V. COUNTY OF LOS ANGELES                13

Property Rights: A Case Study in the Relationship Between
Individual Liberties and Constitutional Structure, 76 Calif.
L. Rev. 267, 280–81 (1988). During this period “[m]ost
states had . . . passed at least some temporary legislation
designed on behalf of private debtors, most commonly laws
postponing the collection of debts.” Forrest McDonald, E
Pluribus Unum: The Formation of The American Republic
1776–1790, 322 (2d ed. 1979); see Home Bldg. & Loan
Ass’n v. Blaisdell, 290 U.S. 398, 454–64 (1934) (Sutherland,
J., dissenting) (reviewing the history of the Contracts
Clause); Douglas W. Kmiec & John O. McGinnis, The
Contract Clause: A Return to the Original Understanding,
14 Hast. Const. L.Q. 525, 533 (1987) (“State debtor relief
legislation . . . was one of the major evils that the Clause was
designed to eradicate.”).
    The Contracts Clause was the most litigated
constitutional provision in the nineteenth century. See
Barnitz v. Beverly, 163 U.S. 118, 121 (1896) (“No provision
of the [C]onstitution of the United States has received more
frequent consideration by this [C]ourt than that which
provides that no state shall pass any law impairing the
obligation of contracts.”). As the Court explained the Clause
in Sturges v. Crowninshield, a contract consisted of two
elements, the “agreement” and “the obligation.” 17 U.S. (4
Wheat.) 122, 197 (1819). The “agreement” simply meant
that the contracting parties agreed that each will “undertake[]
to do, or not to do, a particular thing.” Id. The “obligation
of [] contract” was the “law bind[ing] [the party] to perform
his undertaking,” and “[a]ny law which releases a part of this
obligation, must . . . impair it.” Id. The Contracts Clause
protected the integrity of the contract as of the time that it
was negotiated. States were free to change their laws, but
those laws would apply to future contracts only. As the
14               ITEN V. COUNTY OF LOS ANGELES

Court explained in Ogden v. Saunders, the state law at the
time of the contract “whether . . . written or unwritten . . . is
emphatically the law of the contract made within the State,
and must govern it throughout, wherever its performance is
sought to be enforced.” 25 U.S. (12 Wheat.) 213, 259
(1827); see Green v. Biddle, 21 U.S. (8 Wheat.) 1, 84 (1823)
(“Any deviation from [the contract’s] terms, by postponing,
or accelerating, the period of performance which it
prescribes, imposing conditions not expressed in the
contract, or dispensing with the performance of those which
are, however minute, or apparently immaterial, in their effect
upon the contract of the parties, impairs its obligation.”).
    Bronson v. Kinzie, 42 U.S. (1 How.) 311 (1843),
provides a good example of a case applying these principles.
As a result of the Panic of 1837, many states passed debtors’
relief legislation to assist property holders who were losing
their farms and homes through foreclosure. Illinois passed
two laws regulating the foreclosure of mortgaged property.
The first of these provided that property sold by execution
could be repurchased by the debtor within one year at the
purchase price plus ten percent. The second law provided
that the foreclosed property could not be sold at auction for
less than two-thirds of its appraised value. Id. at 312.
Bronson challenged the retroactive effect of these two laws,
arguing that they impaired his mortgage contract with
Kinzie. The Court agreed with Bronson: The effect of the
laws was “to deprive the party of his pre-existing right to
foreclose the mortgage by a sale of the premises, and to
impose upon him conditions which would frequently render
any sale altogether impossible.” Id. at 320. “[S]uch
modification of a contract by subsequent legislation, against
the consent of one of the parties, unquestionably impairs its
obligations, and is prohibited by the Constitution.” Id.
                ITEN V. COUNTY OF LOS ANGELES             15

    Strict application of the Contracts Clause ended in the
Minnesota Moratorium case, Home Building & Loan
Association v. Blaisdell, 290 U.S. 398 (1934). See
Apartment Ass’n of Los Angeles Cnty., Inc. v. City of Los
Angeles, 10 F.4th 905, 912 (9th Cir. 2021) (“Blaisdell
marked the beginning of the Supreme Court significantly
curtailing the Contracts Clause’s prohibitive force.”). In
Blaisdell, the Court rejected a Contracts Clause challenge to
a Great Depression-era state law suspending foreclosures.
Blaisdell, 290 U.S. at 416, 447. The Court recognized “a
growing appreciation of public needs and of the necessity of
finding ground for a rational compromise between
individual rights and public welfare.” Id. at 442. The
modern approach to the Contract Clause now considers not
only whether the law impairs the obligation of the contract,
but asks how “substantial” that impairment is and whether
the state law is an “appropriate” and “reasonable” use of
state police power. See Sveen v. Melin, 138 S. Ct. 1815,
1821–22 (2018) (quoting Energy Reserves Group, Inc. v.
Kansas Power & Light Co., 459 U.S. 400, 411–12 (1983)).
Although, post-Blaisdell, a Contracts Clause claim analysis
requires additional inquiries, the merits of a Contracts
Clause claim has always started with whether or not there is
a change in a law (an “obligation”) that has impaired the
original agreement of the parties.
                             C
    We have recounted this history, because mortgage
moratoria were, from the beginning, at the heart of the
Contracts Clause. A law affecting or changing the terms the
parties previously agreed to is the quintessential example of
what the Contracts Clause was designed to prohibit.
Whether, after the Court’s reformation of the Contracts
Clause in Blaisdell, landlords or mortgage holders can
16              ITEN V. COUNTY OF LOS ANGELES

prevail on a Contracts Clause claim is irrelevant to whether
they have standing to bring such an action. In simple words,
Iten has alleged that the Moratorium impaired his contract
with his Tenant because it altered the “Obligation of [the]
Contract[]”—the remedies the parties had agreed to,
consistent with California landlord-tenant law at the time
they entered into the lease. In his amended complaint, Iten
pleaded:

           Because of the eviction moratorium, Mr.
       Iten is prohibited from evicting, or attempting
       to evict, his Tenant for failing to pay in full
       and in a timely fashion under the lease.
       Further Mr. Iten is prohibited from charging
       late fees or interest, as well from attempting
       to recover back-rent that came due during the
       eviction moratorium period until twelve
       months      following      the     moratoriums
       expiration—currently September 30, 2022.
           But for the eviction moratorium, Mr. Iten
       would      immediately      initiate eviction
       proceedings to gain possession of his
       property and seek other remedies available to
       collect rent and other amounts due from his
       Tenant.

Iten’s complaints about the Moratorium are not theoretical.
Iten alleged that the Moratorium “substantial[ly]” impairs
commercial lease contracts “because [it] significantly
limit[s] the remedies available to commercial landlords, such
as Mr. Iten, when tenants breach their commercial leases,
and dramatically undercut the economic value and security
of those contracts.”
                ITEN V. COUNTY OF LOS ANGELES               17

    At oral argument, the County candidly admitted that its
Moratorium not only applied to Iten, but that it was leases
like the Iten-Tenant lease that the Moratorium was designed
to reach. Oral Arg. at 15:55–16:26. The County’s forthright
admission follows from the face of the Moratorium. Section
V declared “[a] temporary moratorium on evictions of
Tenants.” Section III(K) defined “Tenant” as “Tenants of
commercial property,” while Section III(D) defined
“Landlord” to include “An owner of real property . . . for
commercial rental purposes.” The Moratorium then set forth
in great detail new, temporary restrictions on Tenant
evictions. It could not be clearer that the Moratorium
applied to commercial landlords like Iten and restricted the
remedies he thought he could employ.
    The district court focused narrowly on the question of
whether Iten could, in fact, successfully evict his Tenant
under the Moratorium. As the court analyzed it, “if the
Moratorium does not prevent [Iten] from evicting his tenant,
then as a matter of course, the Moratorium cannot have
caused [Iten] any injury, and he lacks standing to bring suit.”
With respect, we think this is not the right question. To show
injury and causation for standing purposes, Iten need not
allege that he would have been able to evict his Tenant “but
for” the Moratorium. Nor need he show that his Tenant
qualifies for the affirmative defense provided by the
Moratorium. Rather, Iten need only allege that the
Moratorium imposed additional rights, remedies, conditions,
or procedures that impair the obligations to which he and his
Tenant had contracted. Iten has made that showing here. He
has alleged that Los Angeles County changed the framework
for his lease with his Tenant by creating an additional
affirmative defense for the Tenant, enacting a year-long
forbearance period for unpaid rent, prohibiting Iten from
18              ITEN V. COUNTY OF LOS ANGELES

charging late fees or interest, and adding civil and criminal
penalties beyond those previously provided under California
landlord-tenant law. Furthermore, the value of a commercial
property is often tied to the value of its leases. Iten alleged
that the Moratorium “undercut the economic value and
security of [his commercial leases].” Thus, so long as the
Moratorium was in effect, the economic value of Iten’s
property, as influenced by the value and strength of the
leases of that property, was diminished, and “[a] specific,
concrete, and particularized allegation of a reduction in the
value of property owned by the plaintiff is sufficient to
demonstrate injury-in-fact at the pleading stage.” Barnum
Timber Co. v. EPA, 633 F.3d 894, 898 (9th Cir. 2011).
    The district court was concerned with whether the
Tenant had given Iten sufficient notice under the
Moratorium to qualify as a defense to eviction.
Section V(A) of the Moratorium required tenants to give
notice to the landlord of the inability to pay rent “within
seven (7) days after the date that rent and/or such related
charges were due, unless extenuating circumstances exist.”
Iten pleaded that the Tenant gave him oral notice that he was
“adversely [a]ffected by Covid 19” and would “not be able
to pay the rent.” The district court faulted Iten for not
pleading that he had received timely notice from his Tenant,
or that his Tenant had extenuating circumstances excusing
timely notice; without the proper notice, according to the
district court, Iten was entitled to evict the Tenant and,
therefore, was not subject to the Moratorium.
   We have several observations. First, the district court
was applying the terms of the Moratorium itself to Iten—a
near sure sign that Iten was subject to the Moratorium and
had standing to challenge its constitutionality. See Lujan,
504 U.S. at 561–62 (where “the plaintiff is himself an object
                  ITEN V. COUNTY OF LOS ANGELES                    19

of the action . . . at issue . . . there is ordinarily little question
that the action . . . has caused him injury”). Second, at this
stage of the proceedings, it was improper to speculate how a
California court would have responded to an eviction action
brought by Iten. In effect, the district court declared that Iten
would have prevailed in an eviction action because the
Tenant did not give him proper notice. This proves too
much, as it effectively gave Iten a green light to evict the
Tenant. This is a surprising result from a proceeding in
which the Tenant was not a party. If, in a subsequent
proceeding, the California courts took a different view, Iten
would be subject to inconsistent rulings. Even worse, if Iten
tried to evict the Tenant, the Tenant might have had a civil
action for harassment under Section X of the Moratorium,
which could cost Iten up to $5,000 per day; in the extreme,
Iten could have been subject to administrative fines and
criminal penalties as well. Moratorium §§ IX, X. Third, we
cannot see that the adequacy of the Tenant’s notice is itself
a jurisdictional prerequisite for an eviction action in
California. Iten thought the notice was adequate; if anyone
had the right to enforce a strict notice requirement, it is Iten.
At least in federal court, objections to procedural
requirements can be waived or forfeited. See Fed. R. Civ.
P. 12(h)(1). A California court might well conclude that Iten
waived the formalities of notice under the Moratorium. See,
e.g., Kern Sunset Oil Co. v. Good Roads Oil Co., 6 P.2d 71,
73–74 (Cal. 1931) (“The acceptance of rent by the landlord
from the tenant, after the breach of a condition of the lease,
with full knowledge of all the facts, is a waiver of the
breach.”); Sosin v. Richardson, 26 Cal. Rptr. 610, 613 (Cal.
Ct. App. 1962) (“A condition is waived when a promisor . .
. justifies the promisee in believing that a conditional
promise will be performed despite the failure to perform the
20                 ITEN V. COUNTY OF LOS ANGELES

condition, and the promisee relies upon the promisor’s
manifestations to his substantial detriment.”). Even if we
considered a notice requirement to be similar to an
exhaustion-of-remedies requirement, “an exhaustion
requirement . . . is a quintessential claim-processing rule,”
and is not jurisdictional. Santos-Zacaria v. Garland, 143 S.
Ct. 1103, 1112 (2023). Finally, the district court’s
speculation misconceives the nature of a Contracts Clause
claim. Iten is protesting the fact that he even has to run the
gauntlet of additional procedures that were not in place when
the Tenant signed the lease.
    In any event, if the adequacy of the Tenant’s notice is
relevant at all, it is better addressed as a question going to
the merits rather than to Iten’s standing to bring suit. Any
question of whether Iten can successfully evict his Tenant
might be relevant to “whether the state law has ‘operated as
a substantial impairment of a contractual relationship.’”
Sveen, 138 S. Ct. at 1821–22 (emphasis added) (quoting
Allied Structural Steel Co v. Spannaus, 438 U.S. 234, 244
(1978)). In other words, whether the state law impairs Iten’s
ability to evict the Tenant—and whether the Tenant qualified
for the Moratorium’s protection—are important questions.
But such questions go to the first step in a Contracts Clause
merits analysis, not standing. And whether Iten “will be
successful on the merits in [his] suit against [the County]
does not affect whether [Iten] has standing to pursue such a
suit.” 1 Barnum Timber Co., 633 F.3d at 901 n.4.

1
  The County also argues that Iten lacks standing because any claimed
injury was “self-inflicted” because Iten voluntarily chose to enter into a
new lease with the Tenant after the Moratorium had been in place. Iten
alleges he was forced to do so because “he had no prudent course of
action open to him other than to negotiate a new lease” and did so “to
                   ITEN V. COUNTY OF LOS ANGELES                        21

                                    D
    There are few cases dealing with standing to bring a
Contracts Clause action, but we think that those cases that
do exist reinforce these principles. In Lazar v. Kroncke,
Kroncke established an individual retirement account (IRA),
in which he named Lazar, his wife, as his beneficiary. 862
F.3d 1186, 1192 (9th Cir. 2017). They later divorced, and
Kroncke subsequently died. Id. Meanwhile, Arizona passed
a revocation-on-divorce statute, which automatically
revoked a beneficiary’s interest upon divorce. Id. The
statute applied retroactively back to the time the IRA was
established. Id. at 1193. The administrator of Kroncke’s
estate made a demand for the IRA proceeds, relying on
Arizona’s revocation-on-divorce statute. Id. at 1192.
    Lazar brought suit, challenging the statute as a violation
of the Contracts Clause. Lazar claimed that the statute
interfered with her contractual right to the IRA funds. Id. at
1198. The lower court dismissed for lack of standing
because Lazar merely possessed an expectation interest in
the IRA. Id. We disagreed with the district court, finding
that the court has “conflated standing with the merits.” Id.
We held that Lazar had standing for her Contracts Clause
claim because the revocation-on-divorce statute “operated to
extinguish Lazar’s valid expectancy interest in the IRA—an

increase the chances of someday recovering the past-due rent.” In
general, parties “cannot manufacture standing merely by inflicting harm
on themselves based on their fears of hypothetical future harm that is not
certainly impending.” Clapper v. Amnesty Int’l USA, 568 U.S. 398, 416
(2013). More particular to Contracts Clause claims, a “statute cannot be
said to impair a contract that did not exist at the time of its enactment.”
Texaco, Inc. v. Short, 454 U.S. 516, 531 (1982). We leave to the district
court to determine whether the timing of the Moratorium, and its various
amendments, substantially impaired Iten’s leases with his Tenant.
22              ITEN V. COUNTY OF LOS ANGELES

injury which is actual, concrete, and particularized.” Id. at
1198–99. We proceeded to decide the case on the merits,
and ultimately held there was no substantial contractual
impairment because “Lazar never possessed a vested
contractual right,” and she therefore “suffered no contractual
impairment.” Id. at 1200; see also Greene v. Dayton, 806
F.3d 1146, 1150 (8th Cir. 2015) (finding that the complaint
did not adequately allege a violation of the Contracts Clause;
implicitly rejecting defendant’s claim that plaintiffs lacked
standing).
    Several courts have considered standing to bring
Contracts Clause challenges to COVID-related moratoria.
Recently the Southern District of New York considered the
standing of landlords to challenge a COVID-era law that
made personal liability guaranties for commercial leases
unenforceable for rent not paid between March 2020 and
June 2021. Melendez v. City of New York, ___ F. Supp.
3d ___, ___, No. CV-5301, 2023 WL 2746183 (S.D.N.Y.
Mar. 31, 2023). The court held that the landlords had
standing. Id. at *6–7. As to injury in fact, the court observed
that the law “invalidated Plaintiffs’ bargained-for contract
rights,” and that “by being forced to recoup expected rent
payment by alternative means, Plaintiffs demonstrate[d]
precisely the kind of ‘direct and personal stake in the
controversy’ that the injury-in-fact inquiry seeks to answer.”
Id. at *6. The Southern District of California reached a
similar conclusion with respect to landlords challenging
eviction moratoria in San Diego. Bols v. Newsom, 515 F.
Supp. 3d 1120, 1131 (S.D. Cal. 2021). The court concluded
that a moratorium lasting “even as little as 29 days is a
                   ITEN V. COUNTY OF LOS ANGELES                       23

sufficient time to impose an actual injury.” Id. at 1131; 2 see
also Grano v. Rappahannock Elec. Coop., 552 F. Supp. 3d
563, 571–72 (W.D. Va. 2021) (plaintiffs had standing under
the Contracts Clause to challenge a law relieving easement
holders from paying compensation to plaintiff-landowner
for installation of broadband equipment). On the other hand,
in Case v. Ivey, an Alabama district court concluded that the
plaintiffs lacked standing to sue under the Contracts Clause
where COVID-19 restrictions, such as masking and social
distancing, discouraged customers from keeping their
monthly chiropractic memberships but did not require
cancellation of the contracts. 542 F. Supp. 3d 1245, 1264–
65 (M.D. Ala. 2021). In that case, the court found that any
injury was not traceable to the health measures but to the
independent actions of third parties, namely, the
chiropractor’s customers. Id. at 1265; see also Bochese v.

2
   We note that courts around the country have considered whether
COVID-19 eviction moratoria violate the Contracts Clause. These cases
have involved landlords subject to state and local moratoria, and nearly
all have been decided on the merits. See, e.g., Apartment Ass’n of Los
Angeles Cnty., 10 F.4th at 913–17 (affirming the denial of a preliminary
injunction because the Apartment Association was unlikely to succeed
on the merits of their Contracts Clause claim); Heights Apartments, LLC
v. Walz, 30 F.4th 720, 729 n.8 (8th Cir. 2022), rehearing denied, 39 F.4th
479, 481 (8th Cir. 2022) (holding that the plaintiff plausibly alleged a
Contracts Clause claim and recognizing that this decision conflicts with
Apartment Ass’n, 10 F.4th 905); see also Auracle Homes, LLC v.
Lamont, 478 F. Supp. 3d 199, 224–25 (D. Conn. 2020) (concluding that
the state moratorium did not “operate as a substantial impairment of [the
plaintiffs’] contractual rights” because it did not “eliminate [the
plaintiffs’] contractual remedies for evicting nonpaying tenants”);
Baptiste v. Kennealy, 490 F. Supp. 3d 353, 381–87 (D. Mass. 2020)
(similar); HAPCO v. City of Philadelphia, 482 F. Supp. 3d 337, 349–53
(E.D. Pa. 2020) (similar); Elmsford Apartment Associates, LLC v.
Cuomo, 469 F. Supp. 3d 148, 168–72 (S.D.N.Y. 2020) (similar).
24               ITEN V. COUNTY OF LOS ANGELES

Town of Ponce Inlet, 405 F.3d 964, 984–85 (11th Cir. 2005)
(holding that the plaintiff lacked standing to raise a Contracts
Clause claim based on rescission of a contract between a
town and a developer where the plaintiff was neither a party
to nor an interested beneficiary of the contract); TF-Harbor,
LLC v. City of Rockwall, 18 F. Supp. 3d 810, 818–22 (N.D.
Tex. 2014) (holding that the plaintiffs did not have standing
under the Contracts Clause to challenge an ordinance
regulating property development where the plaintiffs were
not the property owner and would suffer economic injury
from independent action of a third party).
    Here, we conclude that the district court conflated
constitutional injury with contractual impairment. Iten’s
injury for Article III purposes does not depend on whether
the Tenant provided notice or was otherwise excused from
doing so. Nor would it depend on the Tenant’s decision to
raise (or not raise) the Moratorium as an affirmative defense
in an unlawful detainer proceeding. For purposes of
standing, Iten alleged facts sufficient to state a claim that he
suffered an injury traceable to the Moratorium for purposes
of standing: He alleged that he was a commercial landlord
living in Los Angeles County; that both he and the Tenant
believed that the Moratorium applied to their lease
agreement; and that the Moratorium altered the terms of his
contract with his Tenant. Iten alleged that the Moratorium
limited the legal procedures he may take to evict his Tenant
for nonpayment of rent; that it prevented him from charging
late fees or interest, which his lease otherwise allows him to
do; and that it imposed additional penalties that chilled his
ability to test the viability of eviction. In sum, Iten, at least
for purposes of filing a complaint, has alleged that the
obligations of his contract had been “taken away or
materially lessened.” Lynch v. United States, 292 U.S. 571,
                     ITEN V. COUNTY OF LOS ANGELES               25

580 (1934). That is sufficient to state a claim under the
Contracts Clause. See Sveen, 138 S. Ct. at 1822 (stating that
a Contracts Clause claim considers “the extent to which the
law undermines the contractual bargain, interferes with a
party’s reasonable expectations, and prevents the party from
safeguarding or reinstating his rights”).
                                    IV
    Iten has standing to bring his Contracts Clause claim. He
has pleaded facts sufficient to demonstrate that he has
suffered an injury in fact that is traceable to the County’s
Moratorium. We express no view on the merits of Iten’s
claim. We reverse the judgment and remand to the district
court for further proceedings. 3
       REVERSED and REMANDED.

GORDON, J., concurring in part.

    I do not agree with the principle implicit in the majority
opinion that Iten and every other landlord in the county had
standing to challenge the Moratorium the instant it went into
effect because the Moratorium “imposed additional rights,
remedies, conditions, or procedures that impair the
obligations” to which the landlords and their tenants did not
agree. A plaintiff asserting a Contracts Clause claim must
show an injury-in-fact to satisfy Article III standing, just as
any other plaintiff would. An injury-in-fact “cannot be
conjectural or hypothetical.” See Carney v. Adams, 141 S.
Ct. 493, 498 (2020) (quotation omitted). But the majority’s
theory would confer standing on a landlord whose tenant

3
    We deny the County’s requests for judicial notice as moot.
26              ITEN V. COUNTY OF LOS ANGELES

never stopped paying rent even though that landlord did not
suffer a concrete, particularized, non-hypothetical injury
from any of the Moratorium’s provisions. Article III
standing requires more.
    In addition, as the majority opinion recognizes in
footnote one, we lack sufficient information regarding when
the Moratorium went into effect vis-à-vis when Iten
voluntarily chose to enter into a new lease with the Tenant.
As a result, Iten has not plausibly alleged he has standing
because if he entered into the new lease after the Moratorium
went into effect, then the Moratorium cannot plausibly be a
change in the law impairing his contract and he would not
have adequately alleged an injury-in-fact. See Home Bldg.
& Loan Ass’n v. Blaisdell, 290 U.S. 398, 435 (1934) (noting
“existing laws [are] read into contracts in order to fix
obligations as between the parties”); Olson v. California, 62
F.4th 1206, 1221 (9th Cir. 2023) (stating that a Contracts
Clause claim requires a change in the law that impaired a
contractual relationship). Consequently, remanding with a
direction that Iten has standing is premature.
    Assuming for the moment that the new lease was signed
before the Moratorium went into effect, Iten still might lack
standing. Iten alleged that, but for the Moratorium, he would
seek to “collect rent and other amounts due from his
Tenant.” The section of the Moratorium that prohibits
landlords from collecting interest or late fees does not
specify that it applies only to tenants who are entitled to
eviction protection. Therefore, even if Iten’s Tenant failed
to provide adequate notice to come within the Moratorium’s
eviction protection, Iten may have standing to challenge the
fee prohibition based on both his inability to collect interest
and late fees and the resulting potential impact on his
commercial property’s value. On the other hand, reading the
                   ITEN V. COUNTY OF LOS ANGELES                      27

Moratorium as a whole may lead to the conclusion that all of
its protections apply only to tenants who are entitled to
eviction protection. In that case, Iten may not have standing
to challenge the fee prohibition because he has not plausibly
alleged that his Tenant qualified for the Moratorium’s
protections. The record is unclear on this point because Iten
never argued below or on appeal that regardless of whether
his Tenant qualified for eviction protection, he had standing
because he was prohibited from collecting late fees and
interest. Rather, he argued that he had sufficiently alleged
that his Tenant was entitled to protection under the eviction
moratorium. 1 As a result, standing based on the fee
prohibition was not addressed by the parties or the district
court. This is an additional reason why it is appropriate to
remand the standing issue to the district court for further
analysis.
    Because the district court (properly) raised the standing
issue sua sponte during a hearing on the County’s motion to
dismiss, the parties did not fully brief standing, and it is not
clear that amendment would be futile. Iten may be able to
plausibly allege facts giving him standing to challenge the
Moratorium’s various provisions. Thus, I would reverse the
district court’s order dismissing the case with prejudice and
remand for further development of the standing issues. 2

1
  See Appellant’s Opening Br. at 2, 11 (stating that the “moratorium’s
protections are triggered” when a tenant provides the required notice of
financial impacts related to COVID-19, and that the “causal connection
between the County’s moratorium and Iten’s injuries-in-fact turns upon
the availability to Iten’s tenant of the extenuating circumstances
exception to the moratorium’s monthly notice requirement”).
2
  Dismissal with prejudice is improper in any event because dismissal for
lack of subject matter jurisdiction is not an adjudication on the merits.
28                 ITEN V. COUNTY OF LOS ANGELES

    No further development of the standing issue is needed
under the majority opinion, as it holds that Iten has standing.
Yet after finding that he has standing, the majority does not
address whether Iten has plausibly alleged a claim. The
County’s motion giving rise to this appeal argued that Iten
failed to plausibly allege a claim. Whether a complaint
plausibly states a claim is a question of law. Heimrich v.
Dep’t of the Army, 947 F.3d 574, 577 (9th Cir. 2020); see
also Tahara v. Matson Terminals, Inc., 511 F.3d 950, 955
(9th Cir. 2007) (stating we “may affirm the district court for
any reason supported by the record”). Iten raised the issue
in his opening brief, it has been fully addressed by the
parties, and there is no need for factual development below
to determine whether the amended complaint plausibly
alleged a violation of the Contracts Clause. If Iten has
standing, judicial economy weighs in favor of the majority
deciding the issue.
    I therefore concur in the decision to remand, but I do not
agree that Iten has plausibly alleged standing on this record.

Hampton v. Pac. Inv. Mgmt. Co. LLC, 869 F.3d 844, 846 (9th Cir. 2017)
(“Dismissals for lack of subject-matter jurisdiction . . . must be without
prejudice, because a lack of jurisdiction deprives the dismissing court of
any power to adjudicate the merits of the case.”).