the "Ordinance"). Plaintiff's first cause of action, which is at issue in the cross-motions for summary judgment, seeks a declaratory judgment that the Ordinance constitutes a facially unconstitutional taking in violation of the fifth amendment to the United States Constitution. Defendants moved for dismissal of this first cause of action, alleging that plaintiff's challenge of the Ordinance was premature. By order dated March 12, 1992, this court denied defendants' request for dismissal of this first cause of action, determining that plaintiff's facial challenge was ripe for judicial review.
Defendant City and County of San Francisco duly enacted the Ordinance. Defendant Brad Paul is the Director of the Mayor's Office of Housing and Community Development. (For the sake of convenience, this Order will hereinafter collectively refer to defendant brad Paul and defendant City and County of San Francisco as "San Francisco.") Defendants Tenderloin Housing Clinic, Inc. (hereinafter "Tenderloin") and North of Market Planning Coalition (hereinafter "North of Market") are non-profit advocacy groups which purport to represent individuals who have become or may become displaced when residential hotels violate the Ordinance.
The stated purpose of the Residential Hotel Ordinance is "to benefit the general public by minimizing adverse impact on the housing supply and on displaced low income, elderly, and disabled persons resulting from the loss of residential hotel units through their conversion or demolition."
To accomplish this goal, the Ordinance designates hotel rooms occupied by the same individual for 32 days or more as a "residential unit," and a "residential hotel" is any building containing a "residential unit." In order to convert a residential hotel to, for instance, a tourist hotel, the owner must obtain a permit from the city. The city will grant a permit for conversion only if the owner provides relocation assistance to hotel residents and provides for the replacement of residential hotel units being converted by one of the following ways: (1) constructing the replacement units, (2) rehabilitating other residential hotel units, (3) constructing or rehabilitating transitional emergency housing, or (4) contributing an "in lieu" fee to the city's preservation fund or a nonprofit housing group in the amount of 80 percent of the construction cost of the number of units converted, plus site acquisition costs.
A. Tenderloin's Request for Recusal
In its moving papers, defendant Tenderloin requests that this Court disqualify itself on the grounds that statements made by this Court at a prior hearing in another case indicate that this Court is prejudiced against the Residential Hotel Ordinance. As this Court indicated at oral argument, disqualification is inappropriate.
First, Tenderloin's request for recusal is not properly before this Court, because: (1) Tenderloin merely included it as an informal suggestion within its motion for summary judgment, rather than as a formal noticed motion in accordance with Local Rule 220-2; and (2) Tenderloin did not properly bring the request pursuant to either 28 U.S.C. §§ 144 or 455 which require the filing in a timely fashion of affidavits stating grounds for bias or impartiality.
Second, Tenderloin is guilty of selective reading. At the time when this Court made the so called "biased" comments, this Court specifically made the comments with the stated caveat that: "So far as this Court has been made knowledgeable of the Ordinance, so far as I know about the Ordinance as I sit here today -- this is not a final opinion or decision, but from what I have seen and heard and read about it, [and] . . . so far as the Court is familiar with it today . . . ." Reporter's Transcript at 64, June 27, 1991 hearing. It is clear from a review of the complete record that the Court's statements were not a final opinion of the Court and do not demonstrate bias.
Therefore, Tenderloin's informal request for recusal is DENIED.
B. North of Market's Motion for Certification
North of Market requests that this court certify its prior order determining ripeness, dated March 12, 1992, for interlocutory appeal. 28 U.S.C. § 1292(b) provides that a district judge, in his discretion, may certify an order not otherwise appealable for interlocutory appeal if "such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation." This court declines to exercise such discretion.
First, this court is of the opinion that an immediate appeal from the prior order, at this time, will not materially advance the ultimate termination of this litigation. Before the court now are fully briefed and argued cross-motions for summary judgment. A decision by this court on the cross-motions will more materially advance this litigation, and may moot the question of interlocutory appeal altogether.
Second, a Supreme Court case decided after this court issued its March order further supports this Court's prior Order determining that plaintiff's first cause of action is ripe. In Yee v. City of Escondido, 118 L. Ed. 2d 153, 112 S. Ct. 1522 (1992), the Supreme Court stated: "petitioners mount a facial challenge to the ordinance . . . . As [that challenge] does not depend on the extent to which petitioners are deprived of the economic use of their particular pieces of property or to the extent to which these particular petitioners are compensated, petitioners' facial challenge is ripe." 60 U.S.L.W. 4301, 4305. Likewise, plaintiff's facial challenge does not depend on the extent of compensation, and is therefore ripe.
Accordingly, North of Market's motion for certification of the prior Order determining ripeness for interlocutory appeal is DENIED.
C. North of Market's Claim That It Is an Improper Party
North of Market has filed a joinder in Tenderloin's opposition to plaintiff's motion for summary judgment and in Tenderloin's motion for summary judgment. In its joinder, North of Market asserts that it is an improper party defendant, and thus is entitled to judgment as a matter of law. North of Market contends that it is only named as a defendant with respect to the causes of action for declaratory relief, which seek declarations regarding the alleged unconstitutionality of various San Francisco ordinances. North of Market contends that declaratory relief is available only against San Francisco, the governing body that enacted the challenged laws, and not against it.
Although North of Market's arguments may seem logical at first glance, its active participation in this litigation belies its assertions that it is not a proper party to this case. North of Market has actively participated in this litigation since its inception by filing the motion to certify (discussed above), by joining in Tenderloin's second motion for summary judgment (also discussed above), by filing numerous briefs in support of the other defendants' motions and in opposition to plaintiff's motion for summary judgment, by requesting a continuance, and by participating in oral argument. Not until now, the eleventh hour, has North of Market brought this issue to the attention of the Court, and only then by way of an informal suggestion, rather than by a properly noticed motion filed and served in accordance with Local Rule 220-2. Due to North of Market's extensive participation in this case, its contention seems unmeritorious; nonetheless, this Court declines to address the merits of an argument not properly before the court.
Therefore, North of Market's informal request for summary judgment, based on its claim to be an improper party, is DENIED.
D. Tenderloin's Second Motion for Summary Judgment
After the parties had fully briefed and argued the cross-motions for summary judgment, and while the motions were under submission, Tenderloin filed a second motion for summary judgment on September 11, 1992, contending that plaintiff's claims are barred by the statute of limitations. Defendants San Francisco and North of Market joined in Tenderloin's motion. Defendants assert that under De Anza Properties X, Ltd. v. Santa Cruz County, 936 F.2d 1084 (9th Cir. 1991), plaintiff must bring its facial constitutional challenge to the Ordinance under 42 U.S.C. § 1983, and such suit must be filed within one year of the enactment of the Ordinance. As plaintiff's suit was filed more than one year after enactment of the Ordinance, defendants contend that plaintiff's claim is time-barred.
In response, plaintiff moves to strike defendants' motion, contending that defendants already had their chance to assert any affirmative defenses when filing opposition to plaintiff's motion for summary judgment and when filing their own cross-motions for summary judgment.
Whatever the merit of defendants' statute of limitations defense, it will not now be considered by the court. It would be inappropriate for the court to consider further, unrequested briefing on a motion already briefed, argued, and submitted. In the same vein, then, it would be improper for the court, having taken one motion under submission, to consider a new motion that went to the merits of the submitted motion. At bottom here is a sense of fairness; a party should not be given a chance to rebrief one motion by filing a second motion. Defendants' second motion for summary judgment is nakedly an attempt to get another bite of the apple. This court only gives one bite. Accordingly, plaintiff's motion to strike defendants' second motion for summary judgment is hereby GRANTED.
CROSS-MOTIONS FOR SUMMARY JUDGMENT
I. The Standard for Summary Judgment
Summary judgment should be granted where it is shown that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). In Celotex, the Supreme Court made it clear that summary judgment, when appropriate, is a favored method of resolution, and that:
summary judgment is mandated, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial.
Celotex, 477 U.S. at 322, 106 S. Ct. at 2552.
In addition, the Court emphasized in Anderson that, under Fed. R. Civ. P. 56(e), "when a properly supported motion for summary judgment is made, the adverse party 'must set forth specific facts showing that there is a genuine issue for trial.'" Anderson, 477 U.S. at 250, 106 S. Ct. at 2511.
The issue before this Court, on what are essentially cross-motions for summary judgment, is whether the Residential Hotel Ordinance, on its face, violates the takings clause of the fifth amendment to the United States Constitution.
The takings clause of the fifth amendment provides: "Nor shall private property be taken for public use, without just compensation." This guarantee of the fifth amendment, that private property shall not be taken for a public use without just compensation, was designed to bar government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole. Armstrong v. United States, 364 U.S. 40, 80 S. Ct. 1563, 1569, 4 L. Ed. 2d 1554 (1959). The question in this case is whether the uncompensated restrictions imposed by the Residential Hotel Ordinance force the hotel owners to bear more than a fair share of obligations which are rightfully those of society as a whole.
Legislation can constitute an unconstitutional taking in two different ways: (1) a taking by physical occupation; and (2) a taking by regulation. Plaintiff contends that the Ordinance violates the takings clause in both manners. The court will address plaintiff's claims under these distinct categories in turn.
III. Taking by Physical Occupation
The physical occupation cases delineate a fairly clear standard: "Where the government authorizes a physical occupation of property (or actually takes title), the Takings Clause generally requires compensation. See, e.g., Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 426, 73 L. Ed. 2d 868, 102 S. Ct. 3164 (1982)." Yee v. City of Escondido, 118 L. Ed. 2d 153, 112 S. Ct. 1522, 1526 (1992).
Defendants argue that the opinion in Yee conclusively forecloses any challenge by the plaintiff that the Residential Hotel Ordinance constitutes an unconstitutional taking by physical occupation. This Court disagrees.
Yee involved a challenge to the City of Escondido's Rent Control Ordinance as it applied to mobile home parks in conjunction with the California Mobilehome Residency Law, Cal. Civ. Code § 798. The Mobilehome Residency Law limits the basis upon which a park owner can terminate a mobile home owner's tenancy -- the park owner may not require the removal of a mobile home when it is sold, nor charge a transfer fee for the sale or disapprove of the purchaser, provided the purchaser can pay rent. Further, park owners in Yee were affected by a 1988 local rent control ordinance which set rents back to their 1986 levels and prohibited rent increases without approval of the City Council. Thus, under this combination of laws, mobile home park owners in Yee were, in essence, precluded from setting rents or choosing their tenants.
Faced with that factual record, the Supreme Court held that "the government effects a physical taking only where it requires the landowner to submit to the physical occupation of his land." Id. at 1528 (emphasis in the original). Because the park owners voluntarily rented their land to the mobile home owners, and the Mobilehome Residency Law allows a park owner to change the use of his land, the Court held that no taking by physical occupation occurred. The Court reasoned that:
[The land owners] voluntarily rented their land to mobile home owners. At least on the face of the regulatory scheme, neither the City nor the State compels [the land owners], once they have rented their property to tenants, to continue doing so. To the contrary, the Mobilehome Residency Law provides that a park owner who wishes to change the use of his land may evict his tenants, albeit with six or twelve months notice. Cal. Civ. Code Ann. § 798.56(g).
In the instant case, as in Yee, the land owners voluntarily rented their land to the tenants in the first instance. However, the land owners in this case (unlike those in Yee) are denied, for all practical purposes, the freedom to terminate such rentals. Under the Residential Hotel Ordinance, hotel owners can discontinue rentals only by providing for relocation assistance to hotel residents and providing for the replacement of residential hotel units being converted by either (1) constructing the replacement units, (2) rehabilitating other residential hotel units, (3) constructing or rehabilitating transitional emergency housing, or (4) contributing an "in lieu" fee to the city's preservation fund or a nonprofit housing group in the amount of 80 percent of the construction cost of the number of units converted, plus site acquisition costs.
Thus, unlike the laws at issue in Yee, the Residential Hotel Ordinance provides that a hotel owner who wishes to change the use of his land may not simply evict his tenants, but must pay a king's ransom in order to discontinue the use of his property as a residential hotel. Even the Yee court acknowledged that "[a] different case would be presented were the statute . . . to compel a landowner over objection to rent his property or to refrain in perpetuity from terminating a tenancy." Yee at 1529.
"The one incontestable case for compensation (short of formal expropriation) seems to occur when the government deliberately brings it about that its agents, or the public at large, 'regularly' use, or 'permanently' occupy, space or a thing which theretofore was understood to be under private ownership." Michelman, Property, Utility, and Fairness: Comments on the Ethical Foundations of "Just Compensation" Law, 80 Harv. L. Rev. 1165, 1184 (1967), quoted with approval in Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S. Ct. 3164, 73 L. Ed. 2d 868 (1981). In this case, San Francisco, by enacting the Ordinance, has enabled members of the public to "regularly" use and "permanently" occupy property privately owned by the plaintiffs. Through the Residential Hotel Ordinance, San Francisco exercises forced control over the hotel owners' possessory interests in their properties, including the denial of the hotel owners' right to exclude others.
Under the traditional conception of property, the right to exclude has long been recognized as "one of the most essential sticks in the bundle of rights that are commonly characterized as property." Kaiser Aetna v. United States, 444 U.S. 164, 176, 62 L. Ed. 2d 332, 100 S. Ct. 383 (1979). See also, Loretto, 102 S. Ct. at 3176 ("the power to exclude has traditionally been considered one of the most treasured strands in an owner's bundle of property rights"). Where, as here, the hotel owners are forced to accept the occupation of their properties, the resulting deprivation of property rights is sufficient to constitute a physical taking for which compensation is required under the Fifth Amendment.
In conclusion, this Court finds that, unlike the state and local laws at issue in Yee, the Residential Hotel Ordinance, on its face, has effected a per se physical taking because it interferes so drastically with the hotel property owner's fundamental rights to possess and exclude as to amount to compelled physical occupation.
IV. Regulatory Taking
Even if the Residential Hotel Ordinance was not found to be a physical taking, it would still be facially invalid because it further constitutes a regulatory taking without just compensation. "While property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking." Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 67 L. Ed. 322, 43 S. Ct. 158 (1922).
Since the inception of regulatory takings jurisprudence, "70-odd years" ago, the Supreme Court has avoided the enunciation and application of a "set formula" for determining just how far is too far. Lucas v. South Carolina Coastal Council, 120 L. Ed. 2d 798, 112 S. Ct. 2886, 2893 (1992). Indeed, one commentator has opined that the distinction between a regulation and a taking has become "the most haunting jurisprudential problem in the field of contemporary land-use law . . . one that may be the lawyer's equivalent of the physicist's hunt for the quark." Haar, Land-Use Planning 766 (3d ed. 1976). The Supreme Court itself has numerous times noted that no reliable test exists for distinguishing a taking from a regulation.
What has emerged from the body of Supreme Court regulatory jurisprudence is the abiding notion that each case must be analyzed closely for its own factual nuances. Reference to a past situation where a taking has been found can be instructive, but often not controlling. Nonetheless, several factors have been regularly considered by the Court as particularly significant. These include the following:
a) the character of the governmental regulation;