Court Opinion

ID: 4517053
Source: CourtListenerOpinion
Date Created: 2020-03-17 17:00:34.286035+00
Date Added: 2024-06-11T09:15:27.493171
License: Public Domain

FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT

PEYMAN PAKDEL; SIMA CHEGINI,            No.   17-17504
             Plaintiffs-Appellants,
                                           D.C. No.
                v.                      3:17-cv-03638-
                                              RS
CITY AND COUNTY OF SAN
FRANCISCO; SAN FRANCISCO BOARD
OF SUPERVISORS; SAN FRANCISCO               OPINION
DEPARTMENT OF PUBLIC WORKS,
              Defendants-Appellees.

      Appeal from the United States District Court
         for the Northern District of California
       Richard Seeborg, District Judge, Presiding

       Argued and Submitted September 13, 2019
               San Francisco, California

                 Filed March 17, 2020

Before: Ronald M. Gould, Carlos T. Bea, and Michelle T.
               Friedland, Circuit Judges.

              Opinion by Judge Friedland;
                 Dissent by Judge Bea
2        PAKDEL V. CITY & CTY. OF SAN FRANCISCO

                          SUMMARY *

                           Civil Rights

    The panel affirmed the district court’s dismissal of an
action brought pursuant to 42 U.S.C. § 1983 against the City
and County of San Francisco asserting an as-applied
challenge to the Expedited Conversion Program, which
allows property owners to convert their tenancy-in-common
properties into condominium properties on the condition that
the owners agree to offer any existing tenants lifetime leases
in units within the converted property.

    Plaintiffs purchased an interest in a tenancy-in-common
property in 2009 and soon thereafter rented their portion of
the property to a tenant. When the Expedited Conversion
Program began, plaintiffs and their co-owners applied to
convert their property and plaintiffs agreed to offer their
tenant a lifetime lease as a condition of converting and duly
received final approval from the City to convert. During the
process, plaintiffs had several opportunities to request an
exemption from the lifetime lease requirement but did not do
so. Indeed, toward the end of the process, they expressly
waived their right to seek such an exemption. But after
securing final approval, plaintiffs requested that the City not
require them to execute and record the lifetime lease or, in
the alternative, that the City compensate them. Consistent
with plaintiffs’ previous lack of objection and their prior
express agreements not to seek an exemption, the City
refused plaintiffs’ requests. Plaintiffs sued the City,

    *
      This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
        PAKDEL V. CITY & CTY. OF SAN FRANCISCO               3

contending under various theories that the lifetime lease
requirement violated the Takings Clause of the Fifth
Amendment. The district court dismissed plaintiffs’ takings
claims because they had not sought compensation for the
alleged taking in state court, which then was required by
Williamson County Regional Planning Commission v.
Hamilton Bank of Johnson City, 473 U.S. 172 (1985).

    The panel first acknowledged that the state-litigation
requirement has since been eliminated by Knick v. Township
of Scott, 139 S. Ct. 2162 (2019), so it was no longer a proper
basis for dismissal. Nevertheless, the panel held that
because plaintiffs did not timely ask the City for an
exemption from the lifetime lease requirement, they failed to
satisfy Williamson County’s separate finality requirement,
which survived Knick and thus continued to be a requirement
for bringing regulatory takings claims such as plaintiffs’ in
federal court. The panel stated that plaintiffs’ belated
attempts to request an exemption were untimely and
expressly waived. The panel therefore affirmed the
dismissal of plaintiffs’ takings claim as unripe.

    The panel rejected plaintiffs’ argument that they were
exempt from the Williamson County ripeness requirements
because the Expedited Conversion Program effects a
“private” taking, benefitting private individuals rather than
the public. The panel held that plaintiffs’ characterization of
their claim as a “private” takings claim was foreclosed by
Rancho de Calistoga v. City of Calistoga, 800 F.3d 1083 (9th
Cir. 2015). The panel also rejected plaintiffs’ request that
the panel exercise its discretion to excuse plaintiffs from the
finality requirement. The panel concluded that none of the
cases plaintiffs used to argue that they should be excused
from the finality requirement presented circumstances
4       PAKDEL V. CITY & CTY. OF SAN FRANCISCO

analogous to those here, and the panel saw no reason to
invent a new rationale for exercising such discretion.

    Dissenting, Judge Bea stated that because the City had
reached a final decision which denied plaintiffs’ request to
be excused from executing and recording a lifetime lease to
their unit, he would vacate the district court’s order
dismissing the takings claim and remand the case for further
proceedings.

                        COUNSEL

Jeffrey W. McCoy (argued), James S. Burling, and Erin E.
Wilcox, Pacific Legal Foundation, Sacramento, California;
Paul F. Utrecht, Utrecht & Lenvin, LLP, San Francisco,
California; Thomas W. Connors, Black McCuskey Souers &
Arbaugh, LPA, Canton, Ohio; for Plaintiffs-Appellants.

Kristen A. Jensen (argued) and Christopher T. Tom, Deputy
City Attorneys; Dennis J. Herrera, City Attorney; City
Attorney’s Office, City and County of San Francisco, San
Francisco, California; for Defendants-Appellees.

                         OPINION

FRIEDLAND, Circuit Judge:

    In the City and County of San Francisco (the “City”),
ownership of multi-unit buildings is often shared by different
people through a form of property ownership known as a
tenancy in common. For years, those in the City who sought
to convert their tenancy-in-common property into
individually owned condominium property had to apply for
        PAKDEL V. CITY & CTY. OF SAN FRANCISCO              5

permission to do so through a lottery system. Because
conversion rights were granted through the lottery to only a
very limited number of properties each year, a backlog
developed. To clear that backlog, the City temporarily
suspended the lottery in 2013 and replaced it with the
Expedited Conversion Program (“ECP”), which allowed a
tenancy-in-common property to be converted into a
condominium property on the condition that its owner
agreed to offer any existing tenants lifetime leases in units
within the converted property.

     Peyman Pakdel and Sima Chegini (collectively,
“Plaintiffs”) purchased an interest in a tenancy-in-common
property in 2009 and soon thereafter rented their portion of
the property to a tenant. When the ECP began, Plaintiffs and
their co-owners applied to convert their property. Plaintiffs
initially advanced through the application process without a
hitch: They agreed to offer their tenant a lifetime lease as a
condition of converting and duly received final approval
from the City to convert. During this process, they had
several opportunities to request an exemption from the
lifetime lease requirement but did not do so. Nevertheless,
at the eleventh hour, they balked. Refusing to execute the
lifetime lease they had offered to their tenant, Plaintiffs
instead sued the City, contending under various theories that
the lifetime lease requirement violates the Takings Clause of
the Fifth Amendment.

    The district court dismissed Plaintiffs’ takings claims
because they had not sought compensation for the alleged
taking in state court, which was required by Williamson
County Regional Planning Commission v. Hamilton Bank of
Johnson City, 473 U.S. 172 (1985). That state-litigation
requirement has since been eliminated by Knick v. Township
of Scott, 139 S. Ct. 2162 (2019), so it is no longer a proper
6         PAKDEL V. CITY & CTY. OF SAN FRANCISCO

basis for dismissal. But because Plaintiffs did not ask the
City for an exemption from the lifetime lease requirement,
they failed to satisfy Williamson County’s separate finality
requirement, which survived Knick and thus continues to be
a requirement for bringing regulatory takings claims such as
Plaintiffs’ in federal court. We therefore hold that their
takings challenge is unripe, and accordingly affirm. 1

                                    I.

                                   A.

    Tenancy in common is a form of shared property
ownership in which “each owner has an equal right to
possession and use of the entire property.” Marcia Rosen &
Wendy Sullivan, From Urban Renewal and Displacement to
Economic Inclusion: San Francisco Affordable Housing
Policy 1978-2014, 25 Stan. L. & Pol’y Rev. 121, 134 n.57
(2014). In San Francisco, many multi-unit buildings are co-
owned as tenancies in common. See Carolyn Said, Strangers
Sharing Mortgages, SFGate (Aug. 25, 2005),
https://www.sfgate.com/realestate/article/Strangers-sharing-
mortgages-Many-would-be-2645563.php. Co-owners of such
properties can “make agreements among themselves[] to
give each owner an exclusive right” to occupy or use a
particular unit within the building. Tom v. City & County of
San Francisco, 16 Cal. Rptr. 3d 13, 16 (Ct. App. 2004). In
a condominium, by contrast, “each owner has exclusive
ownership and possession of a single unit and common

    1
       Plaintiffs asserted other constitutional claims as well, which the
district court dismissed with prejudice. We address Plaintiffs’ appeal of
the dismissal of those claims in a concurrently filed memorandum
disposition. Plaintiffs also asserted state law claims, which the district
court dismissed as procedurally barred. Plaintiffs have not appealed the
dismissal of those claims.
        PAKDEL V. CITY & CTY. OF SAN FRANCISCO               7

ownership only for the common areas.” Rosen & Sullivan,
supra, at 134 n.57.

    Owners of tenancy-in-common units may hope to
convert those units into condominiums in order to attain
superior title and improved credit opportunities.
Condominium owners in San Francisco may also derive
significant economic value from selling their properties after
conversion because, in contrast to most tenancy-in-common
properties, condominiums are not subject to the City’s rent
control laws once sold by the converting owner.

    In 2009, Plaintiffs purchased a tenancy-in-common
interest in a six-unit San Francisco building (the “Building”),
which, by agreement with their co-owners, afforded
Plaintiffs the right to exclusively use one unit (the “Unit”).
They rented the Unit to a tenant, intending to move in
themselves when they retired. Plaintiffs also contracted with
their co-owners to take all steps available to convert the
Building into condominiums, which would allow them to
gain independent title to their respective units.

    At the time Plaintiffs purchased and rented out the Unit,
the City granted condominium conversion rights using a
lottery system. Under the lottery system, only 200 units
were granted permission to convert each year, and a
considerable backlog of conversion applications
accumulated. In 2013, the San Francisco Board of
Supervisors acted to clear this backlog by enacting
Ordinance 117-13 (the “Ordinance”), which suspended the
conversion lottery until 2024 and replaced it with the ECP.
The ECP allowed property owners to convert their tenancy-
in-common properties into condominium properties subject
to an application fee and certain conditions. Most notably,
the ECP required owners who did not occupy their units
themselves and instead rented to tenants to furnish
8        PAKDEL V. CITY & CTY. OF SAN FRANCISCO

incumbent tenants with “a written offer to enter into a life
time lease” for the converting unit (the “Lifetime Lease
Requirement”). S.F. Subdivision Code § 1396.4(g)(1). 2
Owners who extended a lifetime lease were entitled to a
partial refund of the ECP application fee. See S.F.
Subdivision Code § 1396.4(h).         The Lifetime Lease
Requirement was designed to mitigate an adverse effect that
the City feared would result from the accelerated conversion
of tenancy-in-common properties into condominium
properties under the ECP—“a large number of tenants
[displaced] into a very expensive rental housing market.” In
other words, the ECP sought to achieve the City’s objective
of temporarily allowing more condominium conversions
while also limiting the displacing effects of such
conversions.

    In 2015, Plaintiffs and their fellow Building owners
submitted an ECP application to the San Francisco
Department of Public Works (the “Department”). Following
a public hearing, the Department approved their tentative
conversion map in January 2016. 3 In November 2016,
Plaintiffs signed an agreement with the City committing to
offer a lifetime lease to their tenant, and in fact offered their
tenant such a lease. In that agreement, Plaintiffs specifically
“covenant[ed] and agree[d] that [they] w[ould] not seek a
waiver of the provisions of the [ECP] applicable to the
Lifetime Lease Units” after that stage of the approval

    2
      A similar, but narrower, requirement existed under the lottery
system. Converting owners were required to offer lifetime leases to
tenants aged 62 or older and to permanently disabled tenants. See S.F.
Subdivision Code § 1391(c). There were also some limits on rental rates
and increases for units occupied by such tenants. See id.
    3
      A “tentative map” is “a map made for the purpose of showing the
design of a proposed subdivision.” S.F. Subdivision Code § 1309(k).
          PAKDEL V. CITY & CTY. OF SAN FRANCISCO                        9

process. In exchange for offering the lifetime lease,
Plaintiffs sought and received a partial refund of the ECP
application fee. See S.F. Subdivision Code § 1396.4(h).
Their final conversion map was approved in December
2016.

    Until that point, Plaintiffs had given the City no
indication that they objected to the Lifetime Lease
Requirement. But on June 9 and again on June 13, 2017—
six months after they secured final approval to convert—
Plaintiffs “requested that the City not require them to
execute and record the lifetime lease,” or “in the alternative
to compensate them for transferring a lifetime lease interest
in their property.” Consistent with Plaintiffs’ previous lack
of objection to the Lifetime Lease Requirement and their
prior express agreement not to seek a waiver of ECP
requirements after November 2016, the City refused both
requests.

                                   B.

    Instead of executing and recording the lifetime lease,
Plaintiffs sued the City in federal district court, asserting an
as-applied challenge to the Ordinance under 42 U.S.C.
§ 1983. The Complaint alleged that the Lifetime Lease
Requirement effects a regulatory taking of Plaintiffs’
property without just compensation in violation of the
Takings Clause. 4 Because the Ordinance contains a clause

    4
       Plaintiffs alleged in the alternative that the Lifetime Lease
Requirement effects an exaction, a physical taking, and a private taking.
But because these alternative theories plainly fail as a matter of law, we
analyze Plaintiffs’ takings challenge as a regulatory takings claim. The
Lifetime Lease Requirement is not an exaction under Nollan v.
California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City
of Tigard, 512 U.S. 374 (1994), because it is “a general requirement
10        PAKDEL V. CITY & CTY. OF SAN FRANCISCO

providing that the filing of any legal challenge to the
Lifetime Lease Requirement triggers a suspension of the
entire ECP with respect to tenant-occupied units for the
duration of the litigation, this lawsuit has halted the City’s
processing of ECP applications for properties with tenant-
occupied units since June 2017.

    The district court granted the City’s motion to dismiss
Plaintiffs’ Complaint because Plaintiffs had not sought
compensation for the alleged taking of their property through
a state court proceeding. Plaintiffs timely appealed.

                                   II.

    We review de novo grants of motions to dismiss. Naruto
v. Slater, 888 F.3d 418, 421 (9th Cir. 2018). “We may affirm
the district court’s dismissal on any grounds supported by
the record.” Tritz v. U.S. Postal Serv., 721 F.3d 1133, 1136
(9th Cir. 2013).

imposed through legislation,” rather than “an individualized”
requirement to grant property rights to the public imposed as a condition
for approving a specific property development. McClung v. City of
Sumner, 548 F.3d 1219, 1227–29 (9th Cir. 2008), abrogated on other
grounds by Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595
(2013). And the Lifetime Lease Requirement does not amount to a
physical taking because Plaintiffs voluntarily applied for conversion
under the ECP. See Yee v. City of Escondido, 503 U.S. 519, 527 (1992)
(“The government effects a physical taking only where it requires the
landowner to submit to the physical occupation of his land.”); FCC v.
Fla. Power Corp., 480 U.S. 245, 252 (1987) (law limiting the rent that
utility companies could charge for leasing space on utility poles to cable
television operators was not a physical taking because the utility
companies “voluntarily entered into [the] leases with [the] cable
company tenants”). Finally, as explained below, Plaintiffs’ private
takings claim is simply a reframing of their regulatory takings claim.
        PAKDEL V. CITY & CTY. OF SAN FRANCISCO               11

                              III.

    “Constitutional challenges to local land use regulations
are not considered by federal courts until the posture of the
challenges makes them ‘ripe’ for federal adjudication.” S.
Pac. Transp. Co. v. City of Los Angeles, 922 F.2d 498, 502
(9th Cir. 1990). In Williamson County Regional Planning
Commission v. Hamilton Bank of Johnson City, 473 U.S. 172
(1985), the Supreme Court articulated two independent
ripeness requirements for regulatory takings claims. First,
under the finality requirement, a takings claim challenging
the application of land-use regulations was “not ripe until the
government entity charged with implementing the
regulations ha[d] reached a final decision regarding the
application of the regulations to the property at issue.” Id. at
186. Second, under the state-litigation requirement, a claim
was not ripe if the plaintiff “did not seek compensation [for
the alleged taking] through the procedures the State ha[d]
provided for doing so.” Id. at 194.

                              A.

    The district court dismissed Plaintiffs’ takings challenge
under the state-litigation requirement. While this appeal was
pending, however, the Supreme Court in Knick v. Township
of Scott, 139 S. Ct. 2162 (2019), eliminated that requirement.
The Court held in Knick that “[t]he Fifth Amendment right
to full compensation arises at the time of the taking,
regardless of post-taking remedies that may be available to
the property owner.” Id. at 2170. Accordingly, a plaintiff
need not seek compensation in state court to ripen a federal
takings claim. Id.

   In light of Knick, Plaintiffs’ failure to seek just
compensation in state court no longer bars them from
12      PAKDEL V. CITY & CTY. OF SAN FRANCISCO

bringing their takings claim in federal court in the first
instance.

                             B.

    The City nevertheless maintains that Plaintiffs’ takings
claim is unripe under the first Williamson County
requirement, which prohibits a plaintiff from filing suit
“until the government entity charged with implementing the
regulations has reached a final decision regarding the
application of the regulations to the property at issue.” 473
U.S. at 186. Knick left this finality requirement untouched,
so that aspect of Williamson County remains good law.
Knick, 139 S. Ct. at 2169 (“Knick does not question the
validity of this finality requirement, which is not at issue
here.”); see also id. at 2174 (noting that Williamson County
“could have been resolved solely on the . . . ground that no
taking had occurred because the zoning board had not yet
come to a final decision”); Campbell v. United States, 932
F.3d 1331, 1340 & n.5 (Fed. Cir. 2019) (recognizing that the
finality requirement “remains good law under Knick”).
Plaintiffs do not contend otherwise; they instead argue that
they satisfied the finality requirement. We agree with the
City, however, that Plaintiffs’ takings claim remains unripe
because they never obtained a final decision regarding the
application of the Lifetime Lease Requirement to their Unit.

                             1.

    Williamson County illuminates the rationale for and
scope of the finality requirement. There, a county planning
commission disapproved a landowner’s proposed plat for
developing a tract of land after determining that the plat
violated various zoning regulations. 473 U.S. at 181. Local
government entities “had the power to grant certain
variances” from the zoning regulations that would have
        PAKDEL V. CITY & CTY. OF SAN FRANCISCO             13

resolved many of the commission’s objections to the plat.
Id. at 188. Yet the landowner did not seek such variances.
Id. Instead, the landowner brought suit in federal court
alleging that the commission’s application of the zoning
regulations amounted to a taking of the property. Id. at 182.
The Supreme Court held that the takings claim was not ripe
in part because factors central to determining whether a
regulatory taking occurred—such as “the economic impact
of the challenged action and the extent to which it interferes
with reasonable investment-backed expectations”—“simply
cannot be evaluated until the administrative agency has
arrived at a final, definitive position regarding how it will
apply the regulations at issue to the particular land in
question.” Id. at 191. Williamson County thus made clear
that the finality requirement “is compelled by the very nature
of the inquiry” required in a takings case. Id. at 190.

    The Court has further emphasized that the finality
requirement “responds to the high degree of discretion
characteristically possessed by land-use boards” in granting
variances from their general regulations with respect to
individual properties. Suitum v. Tahoe Reg’l Planning
Agency, 520 U.S. 725, 738 (1997). In light of “such
flexibility or discretion,” courts cannot make “a sound
judgment about what use will be allowed” by local land-use
authorities merely by asking whether a development
proposal “facially conform[s] to the terms of the general use
regulations.” Id. at 738–39; see also MacDonald, Sommer
& Frates v. Yolo County, 477 U.S. 340, 348 (1986)
(explaining that “[a] court cannot determine whether a
regulation has gone ‘too far’ until it knows how far the
regulation goes,” which requires “a final and authoritative
determination” of how the regulation will be applied to the
property in question). And “[b]y requiring [a plaintiff] to
seek recourse at the local level” before bringing a federal
14      PAKDEL V. CITY & CTY. OF SAN FRANCISCO

takings claim, the finality requirement “enable[s] us to
respect principles of federalism which counsel in favor of
resolving land use disputes locally.” Guatay Christian
Fellowship v. County of San Diego, 670 F.3d 957, 979 (9th
Cir. 2011).

    Accordingly, under Williamson County, “a final decision
exists when (1) a decision has been made ‘about how a
plaintiff’s own land may be used’ and (2) the local land-use
board has exercised its judgment regarding a particular use
of a specific parcel of land, eliminating the possibility that it
may ‘soften[] the strictures of the general regulations [it]
administer[s].’” Adam Bros. Farming, Inc. v. County of
Santa Barbara, 604 F.3d 1142, 1147 (9th Cir. 2010)
(alterations in original) (quoting Suitum, 520 U.S. at 738–
39). This rule means that a plaintiff must “meaningful[ly]”
request and be denied a variance from the challenged
regulation before bringing a regulatory takings claim. S.
Pac. Transp. Co., 922 F.2d at 503. But “[t]he term
‘variance’ is not definitive or talismanic; if other types of
permits or actions are available and could provide similar
relief, they must be sought.” Id.; see also, e.g., McMillan v.
Goleta Water Dist., 792 F.2d 1453, 1455, 1457 (9th Cir.
1986) (holding that a takings claim became ripe when the
plaintiffs’ request for an exemption from a moratorium on
new water connections was denied by the water district).
Plaintiffs who “have foregone an opportunity to bring their
proposal” to use their property in a manner that diverges
from the regulation alleged to effect a taking “before a
decisionmaking body with broad authority to grant different
forms of relief” therefore “cannot claim to have obtained a
‘final’ decision.” S. Pac. Transp. Co., 922 F.2d at 503.
        PAKDEL V. CITY & CTY. OF SAN FRANCISCO              15

                              2.

    The San Francisco Department of Public Works is a
decisionmaking body with broad authority over
condominium conversions in the City, including discretion
to grant relief from conversion requirements. See S.F.
Subdivision Code § 1312(a) (vesting discretion in the
Director of Public Works to “authorize exceptions to any of
the substantive requirements set forth in [the Subdivision]
Code and in the Subdivision Regulations” upon “application
by the subdivider”); Cal. Gov’t Code § 66473.5. Plaintiffs,
however, did not ask the Department for an exemption from
the Lifetime Lease Requirement during the ECP approval
process, even though they concededly had opportunities to
do so.

    Plaintiffs could have sought an exemption at or leading
up to the January 7, 2016 public hearing held on their
conversion application. Before that hearing, as required by
local and state law, Plaintiffs and their Building co-owners
submitted a tentative conversion map for the City’s
approval. See S.F. Subdivision Code § 1303(c); Cal. Gov’t
Code § 66473.5. The tentative conversion map included a
promise to extend lifetime leases to existing tenants, without
noting any objection from Plaintiffs to that condition of
conversion.

    The City notified Plaintiffs and the public that in the
twenty days before the Department’s proposed decision on
the tentative map, any interested party could raise objections.
See S.F. Subdivision Code § 1396.4(c)(2) (providing that
“any interested party may file a written objection to [a
conversion] application” before the Department rules on a
tentative map); Cal. Gov’t Code § 65009(b)(1) (providing
that interested parties may challenge a map application at
“the public hearing or in written correspondence delivered
16      PAKDEL V. CITY & CTY. OF SAN FRANCISCO

to the public agency prior to, or at, the public hearing”).
Again, Plaintiffs did not object to the requirement that their
proposed plan include an offer of a lifetime lease.

    It appears that Plaintiffs could also have objected to the
Lifetime Lease Requirement by appealing the Department’s
approval of the tentative map. See S.F. Subdivision Code
§ 1314(a) (“The proposed subdivider[] or any interested
party may appeal to the Board [of Supervisors] from a final
decision of the Director [of Public Works] approving,
conditionally approving, or disapproving a Tentative
Map.”). The notice of tentative approval sent to Plaintiffs
informed them of their right to appeal, stating: “This
notification letter is to inform you of your right to appeal this
tentative approval. IF YOU WOULD LIKE TO FILE AN
APPEAL OF THE TENTATIVE APROVAL: You must do
so in writing with the Clerk of the Board of Supervisors
within ten (10) days of the date of this letter.” Plaintiffs,
however, did not even attempt to appeal.

    Plaintiffs do not dispute that they gave no indication of
any reservations about the Lifetime Lease Requirement
despite having had these opportunities to request an
exemption. To the contrary, after allowing each objection
period to lapse, they forged ahead with the conversion
process and entered into a written agreement with the City
to provide a lifetime lease to their tenant, in which they
expressly waived their right to thereafter seek an exemption
from the Lifetime Lease Requirement. Plaintiffs also
applied for and received from the City a partial refund of the
ECP application fee—a refund only available to property
owners who offered lifetime leases to their tenants. See S.F.
Subdivision Code § 1396.4(h). It was not until six months
after Plaintiffs had obtained final approval of their
conversion map, and seven months after they had committed
          PAKDEL V. CITY & CTY. OF SAN FRANCISCO                      17

to offering a lifetime lease in exchange for the benefits of
conversion, that they finally asked “the City not [to] require
them to execute and record the lifetime lease.”

    The dissent asserts that Plaintiffs’ belated attempts to
request an exemption satisfied the finality requirement. 5
Dissent at 26. But by that point, Plaintiffs’ request was
untimely and expressly waived. Takings plaintiffs cannot
make an end run around the finality requirement by sitting
on their hands until every applicable deadline has expired
before lodging a token exemption request that they know the
relevant agency can no longer grant. In Williamson County,
the Supreme Court expressly rejected the landowner’s
position that it could satisfy the finality requirement by

    5
       We note that Plaintiffs themselves did not even advance this
argument until their supplemental reply brief, where it was mentioned in
passing in a footnote. In the same footnote, Plaintiffs suggested that any
request for an exemption would have been futile because “the City had
no discretion to waive the lifetime lease requirement.” They offered no
argument or evidence to substantiate this assertion; they cited only
section 1396.4(g) of the Ordinance, which says nothing about depriving
the City of discretion to waive the Lifetime Lease Requirement. In light
of the City’s open-ended solicitation of objections to the conversion
application, we cannot assume that an exemption request would have
been futile.

    We have no examples before us of exemptions from the Lifetime
Lease Requirement, but that does not mean exemptions would have been
unavailable. Because Plaintiffs’ lawsuit halted the ECP for all tenant-
occupied properties, the City has not had any opportunities to consider
exemption requests.        Moreover, given that the Lifetime Lease
Requirement was animated by concerns of widespread displacement of
tenants, it is possible that the City would have been more amenable to
exemption requests from individual owners, like Plaintiffs, who were
seeking to convert a single unit that they planned to move into
themselves, than from landlords who sought to convert multiple
properties.
18      PAKDEL V. CITY & CTY. OF SAN FRANCISCO

“request[ing] variances from the Commission . . . after the
Commission approved the proposed plat,” which would
have been too late under the commission’s regulations. 473
U.S. at 190. That the commission would still theoretically
have had the power to grant a variance after plat approval
was apparently immaterial to the Court’s analysis. The
Court explained that the landowner’s “refusal to follow the
procedures for requesting a variance” was fatal to its
contention that “the Commission’s disapproval of the
preliminary plat was equivalent to a final decision that no
variances would be granted.” Id.

     Moreover, we have held in the analogous context of the
then-binding state-litigation requirement that when a
plaintiff missed deadlines or failed to comply with other
requirements for ripening a federal takings claim, the claim
must be dismissed. See Daniel v. County of Santa Barbara,
288 F.3d 375, 381 (9th Cir. 2002) (“[T]he failure of [the
plaintiffs] to seek just compensation meant that they never
created ripe federal takings claims,” and such failure “cannot
now be cured because the applicable state limitation periods
have long since expired.”); see also Pascoag Reservoir &
Dam, LLC v. Rhode Island, 337 F.3d 87, 96 (1st Cir. 2003)
(“[A takings] claimant cannot be permitted to let the time for
seeking a state remedy pass without doing anything to obtain
it and then proceed in federal court on the basis that no state
remedies are open.” (quoting Gamble v. Eau Claire County,
5 F.3d 285, 286 (7th Cir. 1993))). Other courts of appeals
have reached similar conclusions. See Liberty Mut. Ins. Co.
v. Brown, 380 F.3d 793, 799 (5th Cir. 2004) (“By failing to
utilize available state remedies for obtaining compensation,
[the plaintiff] has prevented itself from meeting the second
ripeness requirement of Williamson County. Further,
because the three-year prescriptive period for an inverse
condemnation action [under state law] has now expired, . . .
        PAKDEL V. CITY & CTY. OF SAN FRANCISCO              19

[the plaintiff] has permanently prevented the claim from ever
ripening.”); Pascoag Reservoir, 337 F.3d at 94 (similar);
Vandor, Inc. v. Militello, 301 F.3d 37, 39 (2d Cir. 2002)
(similar); Gamble, 5 F.3d at 286 (similar); Harris v. Mo.
Conservation Comm’n, 790 F.2d 678, 681 (8th Cir. 1986)
(similar).

     The rationale for such a rule was straightforward: If a
plaintiff could have bypassed the (then-existing) state-
litigation requirement and “obtain[ed] jurisdiction in the
federal courts simply by waiting until the statute of
limitation bars the state remedies,” the state-litigation
requirement would have been meaningless. Pascoag
Reservoir, 337 F.3d at 95 (quoting Harris, 790 F.2d at 681).
This rationale applies with equal force to the finality
requirement. Allowing a takings claim to proceed when a
variance or exemption was not requested at the proper
junctures would undermine the purposes of the finality
requirement by eliminating local officials’ opportunities to
exercise discretion and by presenting federal courts with ill-
defined controversies. See Guatay Christian Fellowship,
670 F.3d at 977 (“[T]he final decision requirement . . . is the
sole means by which a court can know precisely how the
regulation at issue would finally be applied to the property”
in question, and “accords with principles of federalism . . .
by encouraging resolution of land use disputes at the local
level.”); see also FERC v. Mississippi, 456 U.S. 742, 767
n.30 (1982) (“[R]egulation of land use is perhaps the
quintessential state activity.”). The dissent does not explain
how the finality requirement can retain any force if a takings
claim brought by a plaintiff who made no attempt to follow
the prescribed procedures for obtaining a final decision can
be considered ripe. By allowing property owners to bypass
state and local governments’ processes for making land use
decisions, the dissent’s approach would subvert principles of
20      PAKDEL V. CITY & CTY. OF SAN FRANCISCO

comity and federalism. Williamson County prohibits us
from going down that path. See 473 U.S. at 186–91.

    Plaintiffs protest that requiring them to have sought an
exemption through the prescribed procedures amounts to
imposing an administrative exhaustion requirement in the
guise of a finality requirement. It is true that, in general,
“there is no requirement that a plaintiff exhaust
administrative remedies before bringing a § 1983 action.”
Williamson County, 473 U.S. at 192. But the Court in
Williamson County nevertheless held that, in the takings
context, a property owner’s failure to seek a variance
through procedures made available by the local land-use
authority meant that the authority had not reached a final
decision. See id. at 193. The Court explained that the
finality requirement would have been satisfied only by a
“conclusive determination” by the local land-use authority
“whether it would allow [the property owner] to develop the
[parcel of land] in the manner [the owner] proposed.” Id. at
193. Here, Plaintiffs never “proposed” that the City exempt
them from the Lifetime Lease Requirement. They gave the
City no inkling that they wanted an exemption, and therefore
gave it no opportunity to exercise its “flexibility or
discretion” to grant such an exemption. See Suitum, 520
U.S. at 738. At bottom, Plaintiffs’ argument is that because
they ignored the finality requirement for long enough, it no
longer applies to them. As Williamson County made clear,
that is not correct. 473 U.S. at 190 (“[I]n the face of [the
property owner’s] refusal to follow the procedures for
requesting a variance, . . . [the owner] hardly can maintain
that the Commission’s disapproval of the preliminary plat
was equivalent to a final decision that no variances would be
granted.”).
          PAKDEL V. CITY & CTY. OF SAN FRANCISCO                       21

    Instead of attempting to ripen their claim during the
proper course, Plaintiffs knowingly waived their right to
seek an exemption. We therefore affirm the dismissal of
Plaintiffs’ takings claim as unripe. 6

                                    3.

    Plaintiffs offer two further arguments in an attempt to
save their takings claim from dismissal, neither of which is
persuasive.

                                    a.

    Plaintiffs first argue that, even if their regulatory takings
claim is unripe, their first cause of action—which alleges
that the ECP effects a “private” taking because it benefits
private individuals rather than the public—is exempt from
the Williamson County ripeness requirements. We disagree.

     6
       The dissent contends that dismissing Plaintiffs’ takings claim on
the ground that they have foregone their opportunity to ripen it “is a
merits ruling rather than one about ripeness.” Dissent at 27. Certainly,
the contingent nature of Plaintiffs’ interest in condominium conversion
would tend to undermine their claim that the conversion effected a
taking. See Bowers v. Whitman, 671 F.3d 905, 913 (9th Cir. 2012)
(explaining that there is no taking “if the property interest [at issue] is
contingent and uncertain or the receipt of the interest is . . .
discretionary” (quotation marks omitted)). But as cases like Daniel and
Pascoag Reservoir illustrate, the consequence of the failure to timely
ripen a takings claim is that the claim must be dismissed before its merits
can be evaluated. See Pascoag Reservoir, 337 F.3d at 96 (affirming
dismissal of takings claim with prejudice because the plaintiff’s “failure
to bring a timely suit for compensation under state law has led to the
forfeiture of its federal taking claim.”); Daniel, 288 F.3d at 381
(affirming dismissal of takings claim with prejudice because “the failure
of [the plaintiffs] to seek just compensation meant that they never created
ripe federal takings claims”).
22        PAKDEL V. CITY & CTY. OF SAN FRANCISCO

    Even if some category of “private” takings claims could
be exempt from the finality requirement, which is a question
we need not decide, 7 Plaintiffs’ characterization of their
claim as a “private” takings claim is foreclosed by Rancho
de Calistoga v. City of Calistoga, 800 F.3d 1083 (9th Cir.
2015). In that case, a mobile home park (Rancho) alleged
that the City of Calistoga’s mobile home rent-control
ordinance, which limited the magnitude of annual rent
increases, effected “an unconstitutional private taking
because any purported ‘public use’ [was] pretextual.” Id. at
1092. Rancho insisted that the “real purpose” behind the
ordinance was to provide rent subsidies to mobile home
tenants, which violated the Supreme Court’s admonishment
in Kelo v. City of New London, 545 U.S. 469 (2005), that
“the sovereign may not take the property of A for the sole
purpose of transferring it to another private party B.”
Rancho de Calistoga, 800 F.3d at 1092–93 (quoting Kelo,
545 U.S. at 477). We explained, however, that, where no
physical seizure such as that in Kelo had occurred, a private
takings claim alleging “public takings motivated by a
‘private purpose’” was “simply a renaming of [a] regulatory
takings claim.” Id. at 1092 (citation omitted). That is,
Rancho’s argument was an attempt to “refram[e]” its
challenge to an alleged regulatory taking as a private takings
claim “through an attack on the stated purposes of the rent-
control scheme.” Id. at 1092–93.

     7
      Plaintiffs cite only precedent holding that “a plaintiff alleging [a
private] taking would not need to seek compensation in state proceedings
before filing a federal takings claim” under the state-litigation
requirement of Williamson County. Armendariz v. Penman, 75 F.3d
1311, 1320 n.5 (9th Cir. 1996) (en banc), overruled in part on other
grounds as recognized in Crown Point Dev., Inc. v. City of Sun Valley,
506 F.3d 851 (9th Cir. 2007).
         PAKDEL V. CITY & CTY. OF SAN FRANCISCO                     23

    Plaintiffs’ private takings theory fails for the same
reason. Like Rancho, they allege that the Lifetime Lease
Requirement is “intended to favor a particular private party
with only incidental or pretextual public benefits.” Also like
Rancho, Plaintiffs argue that “the City has taken their
property for the sole purpose of benefiting another private
party” in violation of Kelo. Where, as here, full possession
of the property has not been seized, such a challenge is at
bottom a regulatory takings claim subject to Williamson
County’s finality requirement—which, as explained above,
Plaintiffs cannot satisfy.

                                  b.

    As a last resort, Plaintiffs urge us to excuse them from
the finality requirement in this instance as an exercise of our
discretion.      Because Williamson County’s ripeness
requirements are prudential, not jurisdictional, we do have
some discretion whether to impose them. See Guggenheim
v. City of Goleta, 638 F.3d 1111, 1118 (9th Cir. 2010) (en
banc). But none of the circumstances that prompted the
exercise of discretion in the cases Plaintiffs rely on for this
argument are present here.

    First, there are no concerns in this case about different
claims proceeding simultaneously in state and federal court,
as in Town of Nags Head v. Toloczko, 728 F.3d 391 (4th Cir.
2013). 8 See id. at 399. Second, the City here raised the
ripeness issue at the first opportunity, in contrast to the
defendant city in Yamagiwa v. City of Half Moon Bay, 523
    8
        Plaintiffs’ non-takings claims will not generate piecemeal
litigation. As discussed in the concurrently filed memorandum
disposition, Plaintiffs’ unreasonable seizure, due process, and equal
protection claims incurably fail as a matter of law on the merits and so
were properly dismissed without leave to amend.
24      PAKDEL V. CITY & CTY. OF SAN FRANCISCO

F. Supp. 2d 1036 (N.D. Cal. 2007), which acted in bad faith
by not asserting ripeness as a defense until more than two
years into the case, following the completion of trial. See id.
at 1108. Third, this case is unlike

     Guggenheim, in which we opted not to impose the state-
litigation requirement on the plaintiffs because we
concluded that their takings claim failed on the merits, “so it
would [have been] a waste of the parties’ and the courts’
resources to bounce the case through more rounds of
litigation.” 638 F.3d at 1118. Plaintiffs here have urged us
not to reach the merits of their takings claim in the first
instance, because “the parties have [not had] an opportunity
to develop a factual record that would allow this Court to
properly analyze” the claim. The rationale of Guggenheim
thus has no applicability in this case.

    In sum, none of the cases Plaintiffs use to argue that they
should be excused from the finality requirement presented
circumstances analogous to those here, and we see no reason
to invent a new rationale for exercising such discretion.

                             IV.

   For the foregoing reasons, we affirm the district court’s
dismissal of Plaintiffs’ takings claim.

     AFFIRMED.
          PAKDEL V. CITY & CTY. OF SAN FRANCISCO                          25

BEA, Circuit Judge, dissenting:

    The majority is correct about the state of the law on the
“ripeness” of takings claims brought under 42 U.S.C.
§ 1983, in the wake of Knick. It remains the case that a
plaintiff may not bring suit for an unconstitutional regulatory
taking until “the government entity charged with
implementing the regulations has reached a final decision
regarding the application of the regulations to the property
at issue.” Williamson County Reg’l Planning Comm’n v.
Hamilton Bank, 473 U.S. 172, 186 (1985); see Knick v.
Township of Scott, Pa., 139 S. Ct. 2162, 2169 (2019).
However, because the City here has indeed reached such a
final decision, I would vacate the district court’s order
dismissing the takings claim and remand the case for further
proceedings. 1

     Williamson County’s “finality requirement is concerned
with whether the initial decisionmaker has arrived at a
definitive position on the issue that inflicts an actual,
concrete injury,” not whether a request for “variances”
followed the decisionmaker’s administrative procedures.
Williamson County, 473 U.S. at 193. A takings claim is ripe
if, at the moment a suit is filed, it is possible for the court to
know “how far the regulation goes,” that is, whether and to
what degree a regulation or ordinance will be enforced
against the plaintiff. See Palazzolo v. Rhode Island, 533
U.S. 606, 622 (2001) (citation omitted). If the record is clear
that “no variances will be granted,” then the court knows the
scope of the regulation, it will be enforced as written, and the
claim is ripe. Williamson County, 473 U.S. at 191. Requiring

    1
      I concur in the memorandum disposition filed concurrently that
affirms the district court’s dismissal of the Plaintiffs’ other constitutional
claims.
26       PAKDEL V. CITY & CTY. OF SAN FRANCISCO

plaintiffs to adhere to specific administrative procedures for
requesting “variances” from a regulation, rather than simply
evaluating whether a decision about the application of a
regulation is final, is not mandated by Williamson County
and risks “establish[ing] an exhaustion requirement for
§ 1983 takings claims,” something the law does not allow.
See Knick, 139 S. Ct. at 2173; see also McGuire v. United
States, 550 F.3d 903, 909–10 (9th Cir. 2008).

    The majority’s description of the Plaintiffs as never
having “obtained a final decision regarding the application
of the Lifetime Lease Requirement to their Unit,” is belied
by the facts. Majority Op. at 12. On June 9 and 13, 2017, the
Plaintiffs specifically requested that the City excuse them
from executing and recording a lifetime lease to their Unit.
The City refused these requests on June 12 and 13, 2017. At
least by June 13, 2017, the City’s position was final. The
Plaintiffs were required to execute and record the lifetime
lease; there would be no variance. The majority correctly
notes that the Plaintiffs made their requests to the City after
several notable events had occurred: (1) they had missed the
official window for appealing the tentative approval of their
subdivision map; (2) they had entered into a contract with
the City to offer the tenant a lifetime lease; (3) they had
offered the lifetime lease to the tenant; (4) they had received
a refund of $8,000 from the City in exchange for offering the
tenant a lifetime lease; and (5) they had their final
subdivision map approved. But none of this bears on the
question whether the City had reached a final decision that
required the Plaintiffs to comply with the lifetime lease
requirement. 2 The City’s rejections of the Plaintiffs’ belated

     2
      This is not to say that these are irrelevant considerations in
evaluating the merits of the Plaintiffs’ claims. But the limited question
          PAKDEL V. CITY & CTY. OF SAN FRANCISCO                         27

requests were clear and final. Accordingly, the Plaintiffs’
claim was ripe.

    The majority dismisses the City’s rejection of the
Plaintiffs’ requests to be excused from the lifetime lease
requirement and the unavoidable conclusion that this was a
final decision by the City, because the majority finds the
Plaintiffs’ requests were “untimely and expressly waived.”
Majority Op. at 17. But such a holding is a merits ruling,
rather than one about ripeness. The proper venue for
evaluating, in the first instance, whether the Plaintiffs’ claim
may be defeated by waiver, equitable estoppel, or any other
defense is in the district court on remand. Cf. Dodd v. Hood
River County, 59 F.3d 852, 863 (9th Cir. 1995) (reversing
the district court’s holding that a takings claim was not ripe
but remanding to consider whether the defense of collateral
estoppel applied).

    The majority supports its conclusion that the Plaintiffs
lost their ability to ripen their claim because they did not
follow the City’s administrative procedures and object
earlier in the process, by citing to cases that applied the now-
defunct state-litigation requirement from Williamson
County. 3 See Majority Op. at 18–19. Though Williamson

here is whether the merits of the claims were ripe for review in the district
court.
    3
       The only Ninth Circuit case the majority references for this holding
is Daniel v. County of Santa Barbara, 288 F.3d 375, 381 (9th Cir. 2002),
which it cites for the proposition that if “a plaintiff missed deadlines or
failed to comply with other requirements for ripening the claim, the
claim must be dismissed.” Majority Op. at 18. The majority is
overreading the case. Daniel, beyond being about the Williamson County
state-litigation requirement and not the finality requirement, did not
involve generic “missed deadlines”; it involved the failure of plaintiffs
28        PAKDEL V. CITY & CTY. OF SAN FRANCISCO

County mentioned the failure of the plaintiff to comply with
regulations for requesting variances, see 473 U.S. at 190, it
did so in a context where, unlike here, the plaintiff had
requested no variance, or other relief, whatsoever. The
majority has no direct authority for its holding that a request
for a variance or exemption to a land-use ordinance, made
and denied after the administrative deadline for filing
objections, cannot satisfy Williamson County’s requirement
that “the administrative agency has arrived at a final,

to commence an action for compensation within the applicable state
statute of limitations. The difference is significant. Before Knick, failure
to seek compensation through state proceedings for an alleged taking of
property not only deprived a plaintiff of potential payment, it also meant
that no cognizable constitutional violation had occurred. This was
because a taking was not without just compensation, and thus the Fifth
Amendment was not violated, until the state had denied a request to
compensate a plaintiff for property taken. See Williamson County, 473
U.S. at 194–95, overruled Knick, 139 S. Ct. at 2172. Therefore, a failure
to file a claim for compensation within the state limitations period was
conclusive that there was no cognizable constitutional violation.

     But even after Knick, a failure to file a takings claim in the district
court within the timeframe of the state’s statute of limitations bars relief,
since claims brought under 42 U.S.C. § 1983 are subject to a state’s
statute of limitations for personal injury claims. See Wilson v. Garcia,
471 U.S. 261, 276 (1985). Seeking a variance from a land-use restriction
beyond the deadline outlined in a city regulation or ordinance does not
have the same consequence. Statutes of limitations, unlike local land-use
ordinances, are not “subject to the decision[s] of a regulatory body
invested with great discretion,” to issue waivers or exemptions. Suitum
v. Tahoe Reg’l Planning Agency, 520 U.S. 725, 739 (1997). The only
hope for a plaintiff who fails to commence an action within the period of
the state’s statute of limitations is that a future state legislative act will
amend the statute and extend the limitations period. Whereas a plaintiff
seeking a variance from a land-use ordinance after the deadline may
petition a local board, possessed with great discretion, simply to consider
his untimely request and grant him relief.
        PAKDEL V. CITY & CTY. OF SAN FRANCISCO               29

definitive position regarding how it will apply the
regulations at issue to the particular land in question.” Id. at
191.

     Moreover, the very City ordinance that allows the
majority to assume that any request to be excused from the
lifetime lease requirement may not have been futile, despite
all practical indications to the contrary, allows the Director
of Public Works to “authorize exceptions to any of the
substantive requirements” in the City Subdivision Code or
regulations. See S.F. Subdivision Code § 1312(a) (emphasis
added). Surely the same discretion that would have allowed
the Director to excuse the Plaintiffs from the lifetime lease
requirement would have also allowed the Director to treat
the Plaintiffs’ waiver requests as timely. At worst, it seems
the Plaintiffs missed a deadline imposed by an ordinance that
the City, through the Director of Public Works, had broad
authority to waive. The City denied these requests for
variances when they were made and has confirmed in the
proceedings before us that there is nothing more that the
Plaintiffs may now do to be excused from the lifetime lease
requirement. By any common understanding of the word, the
City’s decision is final.

     In sum, the Plaintiffs twice requested to be excused from
the lifetime lease requirement. The City denied these
requests in a final decision, and the Plaintiffs’ takings claim
is ripe for adjudication. The majority ignores the Plaintiffs’
requests for variances from the lifetime lease requirement
because of when they were made, and elevates adherence to
administrative procedure above the question of whether the
City has reached a final decision. Because of this error in the
majority’s opinion, I respectfully dissent.