Court Opinion

ID: 803063
Source: CourtListenerOpinion
Date Created: 2012-06-26 01:49:37+00
Date Added: 2024-06-11T18:00:06.498338
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                 JUN 25 2012

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

DUNEX, INC., a California corporation;           No. 10-56871
CAVALIER MOBILE ESTATES, a
California limited partnership,                  D.C. No. 3:10-cv-01478-JLS-CAB

              Plaintiffs - Appellants,
                                                 MEMORANDUM*
  v.

CITY OF OCEANSIDE; OCEANSIDE
MANUFACTURED HOME FAIR
PRACTICES COMMISSION,

              Defendants - Appellees.

                   Appeal from the United States District Court
                      for the Southern District of California
                  Janis L. Sammartino, District Judge, Presiding

                        Argued and Submitted June 8, 2012
                              Pasadena, California

Before: TROTT and BYBEE, Circuit Judges, and DUFFY, Senior District Judge.**

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The Honorable Kevin Thomas Duffy, Senior United States District
Judge for the Southern District of New York, sitting by designation.
      Dunex, Inc. and Cavalier Mobile Estates (collectively, “Dunex”) appeal the

district court’s order granting the City of Oceanside’s (“Oceanside”) Rule 12(b)(1)

and (6) motion to dismiss. The district court determined that Dunex’s state court

action, in which it brought a writ of mandate challenging the denial of its request

for an increase in its rent ceiling, precluded Dunex from asserting federal claims in

federal court because those claims were all based on the same “primary right” as

asserted in the state action. We have jurisdiction under 28 U.S.C. § 1291, and we

affirm.

      Dunex argues that the district court misapplied California law in concluding

that Dunex’s federal claims were barred by res judicata. The res judicata question

in this case is squarely addressed by our decision in Manufactured Home

Communities Inc. v. City of San Jose (“MHC”), 420 F.3d 1022 (9th Cir. 2005),

which applied California law. MHC makes clear that if “[Dunex’s federal] claims

all relate to a single Ordinance and [the City of Oceanside’s] application of that

Ordinance to [Dunex’s] petition for a rent increase,” 420 F.3d at 1031–32, and if

Dunex already litigated its right to a rent increase in state court, then under

California’s “primary right” theory of res judicata, Dunex’s federal claims are

barred. See id.

                                           2
      In its amended petition for a writ of mandate in the state court action, Dunex

alleged that Oceanside wrongly denied Dunex’s rent increase application and

thereby denied Dunex due process and violated the state and federal constitutions.

Dunex also claimed that, as applied, the Ordinance effected a regulatory taking of

its property. Dunex’s district court action likewise alleged, among other things,

denials of due process, unconstitutional takings, an equal protection violation, and

violations of the federal Constitution. Although styled as different theories,

Dunex’s federal claims all address a single theory—that Dunex is not receiving a

fair return on its investment in its property. Because the California Superior Court

already determined that Dunex is receiving a fair return on its investment, we

would have to “upset[ the] legal conclusion[] of the California courts” to afford

Dunex relief. Id. at 1032. Res judicata prevents us from doing so.

      It is possible that Dunex could have reserved its federal claims before

bringing its state court action. See England v. La. State Bd. of Med. Exam’rs, 375
U.S. 411, 415 (1964). But because no such reservation was made, we are “unable

to pass judgment on [Dunex’s] claims without addressing the state court’s

determinations on [the fair return] issues. Any remedy for [Dunex] on these claims

                                          3
would in effect nullify that judgment in violation of res judicata.” MHC, 420 F.3d

at 1032 (internal quotation marks omitted).1

      AFFIRMED.

      1
       Because we affirm the district court on the basis of res judicata, thereby
resolving all of Dunex’s claims, we do not address Dunex’s ripeness argument.
                                          4