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VH Property Corp. v. City of Rancho Palos Verdes

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA


March 23, 2009

VH PROPERTY CORP. AND VHPS LLC, PLAINTIFFS,
v.
CITY OF RANCHO PALOS VERDES; COTTON, SHIRES AND ASSOCIATES, INC.; WILLIAM COTTON; HELENSCHMIDT GEOTECHNICAL INC.; STANLEY HELENSCHMIDT; GEOKINETICS INC. A/K/A APPLIED GEOKINETICS; GLENN TOFANI; AND DOES 1-100, DEFENDANTS.

The opinion of the court was delivered by: Margaret M. Morrow United States District Judge

ORDER GRANTING PLAINTIFFS' MOTION TO REMAND

On December 18, 2008, plaintiffs VH Property Corp. and VHPS LLC (collectively, "VH") filed a complaint against the City of Rancho Palos Verdes (the "City"); Cotton, Shires and Associates, Inc. ("CSA"); William Cotton; Helenschmidt Geotechnical, Inc. ("HGI"); Stanley Helenschmidt; Geokinetics, Inc. ("Geokinetics"); and Glenn Tofani in state court. VH's complaint, which arises out of the City's alleged denial of VH's land development applications, asserts claims for violation of due process under both the federal and California constitutions, violation of equal protection under both the federal and California constitutions, fraud, breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and intentional interference with prospective economic advantage against all defendants; inverse condemnation, taking of property without just compensation, and mandamus against the City; and unfair business practices against CSA, Cotton, HGI, Helenschmidt, Geokinetics, and Tofani. On January 14, 2009, defendants removed the case to federal court pursuant to 28 U.S.C. §§ 1331 and 1441(b). Plaintiffs filed a motion to remand on February 13, 2009. Plaintiffs assert that the court should decline to exercise jurisdiction based on Pullman and Burford abstention.

I. FACTUAL BACKGROUND

VH is the owner various real property in the City, including the Trump National Golf Club.*fn1 VH wants to develop the property by constructing sixteen homes in an area now used as a driving range; by constructing four homes landward from the existing clubhouse; by constructing a terrace on the clubhouse; and by maintaining ficus trees on the property.*fn2 VH must obtain the City's permission before proceeding with these projects.*fn3 VH alleges that the City has unreasonably and pretextually withheld its permission despite knowledge that the proposed projects are safe.*fn4 As a result, VH asserts, it has been required "to spend millions of dollars on unnecessary, repetitive, unreasonable, and unlawful geologic and geotechnical studies and reviews, and in satisfaction of other unnecessary, repetitive, unreasonable, and unlawful bureaucratic requirements."*fn5 VH alleges that the City does not hold other property owners to the standards it has imposed on VH.*fn6 In particular, VH contends that the City has acted unreasonably in requiring that VH demonstrate the existence of a "1.5 safety factor" before undertaking development of the property.*fn7

The City counters that VH's property is located in an active landslide area.*fn8 The City notes that, in 1999, the eighteenth hole of VH's golf course suddenly collapsed and fell into the Pacific Ocean.*fn9 It states that "the collapse of the 18th hole. . . into the Pacific Ocean has led to closer examination of the geotechnical details [of VH's proposed development projects], to assure that occupied homes do not suffer the same fate."*fn10 It asserts that it has nonetheless approved most of VH's development applications. Regarding VH's intent to construct homes on the present location of the driving range and landward of the clubhouse, the City states that it has not yet received applications from VH for such projects. The City contends that it has already granted VH permission to construct a terrace on the clubhouse, and that the ficus trees violate the City's general prohibition against maintaining trees that block views of the ocean from neighboring residential properties.*fn11

Defendants CSA and HGI are geological consulting firms that were retained by the City to review VH's proposed development projects.*fn12 VH asserts that it has been required to pay more than $3,000,000 for work performed by CSA and HGI.*fn13 Tofani is a member of a peer review panel organized to evaluate CSA and HGI's conclusions because of the dispute between VH and the City.*fn14 VH alleges that it has spent $380,000 for work performed by Tofani and his company.*fn15

VH's complaint pleads claims for inverse condemnation, taking of property for public use without just compensation, and mandamus against the City; violation of due process and equal protection under the federal and California constitutions, fraud, breach of contract (as a third-party beneficiary), breach of the implied covenant of good faith and fair dealing, unjust enrichment, and intentional interference with prospective economic advantage against all defendants; and unfair business practices against all defendants except the City.

II. DISCUSSION

A. Legal Standard Governing Pullman Abstention

The Pullman abstention doctrine allows a federal court to postpone the exercise of federal jurisdiction when "a federal constitutional issue . . . might be mooted or presented in a different posture by a state court determination of pertinent state law." C-Y Development Co. v. City of Redlands, 703 F.2d 375, 377 (9th Cir. 1983) (quoting County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 189 (1959)); see also Pearl Investment Co. v. City and County of San Francisco, 774 F.2d 1460, 1462 (9th Cir. 1985) (under the Pullman abstention doctrine, courts should abstain in cases presenting a federal constitutional question if constitutional adjudication could be avoided or the constitutional question narrowed by a state court ruling on an uncertain question of state law). In the Ninth Circuit, three criteria must be met before Pullman abstention is appropriate:

" (1) The complaint touches a sensitive area of social policy upon which the federal courts ought not to enter unless no alternative to its adjudication is open.

(2) Such constitutional adjudication plainly can be avoided if a definitive ruling on the state issue would terminate the controversy.

(3) The possibly determinative issue of state law is doubtful."

Sinclair Oil Corp. v. County of Santa Barbara, 96 F.3d 401, 409 (9th Cir. 1996); see also Smelt v. County of Orange, 447 F.3d 673, 679 (9th Cir. 2006) (enumerating factors); Canton v. Spokane School District No. 81, 498 F.2d 840, 845 (9th Cir. 1974) (same).

Since "[t]he doctrine of abstention . . . is an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy," it is properly invoked only "where the order to parties to repair to the state court would clearly serve an important countervailing interest." Canton, 498 F.2d at 845. Thus, courts should abstain under Pullman only "where principles of comity and federalism justify postponing the exercise of jurisdiction that Congress conferred upon federal courts." Pearl Investment Co., 774 F.2d at 1462.

1. Whether VH's Complaint Involves A Sensitive Area of Social Policy

The Ninth Circuit has consistently and repeatedly held that "land use planning is a sensitive area of social policy that meets the first requirement for Pullman abstention." San Remo Hotel v. City and County of San Francisco, 145 F.3d 1095, 1105 (9th Cir. 1998) (quoting Sinclair Oil, 96 F.3d at 401 (internal quotation marks omitted) (quoting Kollsman v. City of Los Angeles, 737 F.2d 830, 833 (9th Cir.1984)), and citing Rancho Palos Verdes Corp. v. City of Laguna Beach, 547 F.2d 1092, 1094-95 (9th Cir. 1976), and Sederquist v. City of Tiburon, 590 F.2d 278, 281-82 (9th Cir.1978)); see also Heffner v. Young, 227 Fed.Appx. 586, 587 (9th Cir. Apr. 3, 2007) (Unpub. Disp.); Columbia Basin Apartment Ass'n v. City of Pasco, 268 F.3d 791, 802 (9th Cir. 2001); Cucamongans United for Reasonable Expansion v. City of Rancho Palos Verdes, No. 98-55262, 2000 WL 61312, *1 (9th Cir. Jan. 21, 2000) (Unpub. Disp.); Pearl Investment Co., 774 F.2d at 1463-64; Bank of America National Trust and Savings Ass'n v. Summerland County Water, 767 F.2d 544, 546 (9th Cir. 1985); C-Y Development, 703 F.2d at 377; Santa Fe Land Improvement Company v. City of Chula Vista, 596 F.2d 838, 840 (9th Cir. 1979). Because this case concerns a dispute over the City's land use planning policies, the court concludes the first requirement for Pullman abstention is met.*fn16

2. Whether a State Court Ruling May Narrow the Constitutional Issues

The second prong for Pullman abstention is met where "[a] state law question . . . has the potential of at least altering the nature of the federal constitutional questions." C.Y. Development, 703 F.3d at 378; see also Sinclair Oil, 96 F.3d at 409 ("For Pullman purposes . . . it is sufficient if the state law issues might 'narrow' the federal constitutional questions," citing Pearl Investment Co., 774 F.2d at 1464). In land use cases, the Ninth Circuit has frequently found this requirement satisfied where a favorable decision on a state law claim would provide plaintiff with some or all of the relief he seeks.

In Sinclair Oil, plaintiff challenged Santa Barbara County's adoption of a community plan that reduced the number of residences that could be developed on its property. Sinclair Oil, 96 F.3d at 405. Plaintiff asserted, among other things, that adoption of the plan constituted a taking under the federal and state constitutions. The Ninth Circuit concluded that the second requirement for Pullman abstention was met "because, '[g]iven [an] opportunity, a state court might avoid the federal constitutional issues by deciding that an illegal taking under the California Constitution has occurred.'" Id. (quoting Sederquist, 590 F.2d at 282). As the court explained, the potential for a narrowing of the issues need not be certain:

"Certainly, if the California courts provide Sinclair just compensation for a taking under state law, it might be unnecessary to address the oil company's federal taking claim. Of course, adjudication of the state claims is not absolutely certain to obviate the need for considering the federal constitutional issues. Sinclair might, for example, object to the amount of compensation received. For Pullman purposes, though, it is sufficient if the state law issues might 'narrow' the federal constitutional questions. Resolution of the California law issues would most certainly narrow a federal court's constitutional inquiry in this case." Id.

Similarly, in C-Y Development, plaintiff challenged the City of Redlands' denial of its applications for building permits, seeking, among other things, a writ of mandamus requiring the city to issue the permits. C-Y Development, 703 F.3d at 378. The court held that the second requirement for Pullman abstention was met, observing that a writ of mandate directing the city to issue the permits would moot some of the federal issues in the case. Id. at 380. The fact that "following such hypothetical state adjudication [plaintiff] might return to federal court to seek damages for the alleged temporary deprivation of its property rights" did not render Pullman abstention inappropriate. Id.

Here, it is possible that resolution of VH's state constitutional takings claim in its favor will obviate the need to rule on its federal claims, particularly if VH finds the compensation awarded by the state court satisfactory. See Sinclair Oil, 96 F.3d at 405. Alternately, the state court may issue a writ of mandamus directing the City to approve VH's development plans, mooting VH's federal claims to the extent they seek redress for a permanent, rather than temporary, deprivation of property rights. See C-Y Development, 703 F.3d at 378. Accordingly, the court concludes that the second requirement for Pullman abstention is met.

3. Whether Resolution of the State Law Issues is Uncertain

Whether resolution of the state law issues is uncertain is the main point of contention between the parties. VH argues that resolution of its state law claims is uncertain given the unique and factually specific nature of individual challenges to local governments' exercise of land use planning authority. It cites the Ninth Circuit's observation in Sederquist that:

"Whether a city has abused its discretion by refusing to issue a building permit is by nature a question turning on the peculiar facts of each case in light of the many local and state-wide land use laws and regulations applicable to the area in question.

We do not claim the ability to predict whether a state court would decide that the city here abused its discretion in declining to give the Sederquists permission to pave their access road." Sederquist, 590 F.2d at 282-83.

Relying on the local nature of land use claims, and the fact that they involve interpretation of various state and local land use laws, the Ninth Circuit has required only a minimal showing of uncertainty to satisfy the third Pullman factor in land use cases. In Sinclair Oil, the court held that the third requirement was satisfied where plaintiff raised a "conventional inverse condemnation claim" that did not implicate any novel issues of statutory construction:

"Finally, we find that the determinative issues of state law are uncertain. To be sure, the conventional inverse condemnation claim advanced by Sinclair does not appear to be particularly extraordinary or unique, and Sinclair does not raise a novel claim of statutory interpretation. Still, the Plan itself has not yet been challenged in the state courts. In a somewhat similar case, this Court observed that a local government's enactment of land use regulations 'is by nature a question turning on the peculiar facts of each case in light of the many [applicable] local and state-wide land use laws. . . .' Santa Fe Land Improvement Co. v. City of Chula Vista, 596 F.2d 838, 841 (9th Cir.1979) (quotation omitted)."

Defendants argue that, despite the Ninth Circuit's liberal application of this factor in land use cases, this action does not satisfy the third requirement for Pullman abstention. In support, they cite the Pearl court's criticism of a liberal approach to the uncertainty requirement. Pearl, 774 F.2d at 1465. There, the district court abstained under Pullman in a case where plaintiff argued that the San Francisco City Planning Commission had abused its discretion by placing certain conditions on its approval of plaintiff's building permit application. Id. at 1464. The district court "reasoned that this circuit 'has taken the position that the resolution of state law questions is doubtful in virtually every case involving land use or zoning issues.'" Id. at 1464-65 (quoting district court). On appeal, the Ninth Circuit expressed its disapproval of prior circuit precedent applying the uncertainty requirement in land use cases:

"An outcome is not 'doubtful' or 'uncertain' just because it turns on the facts of the particular case. . . . [T]here is much force to Pearl's contention that the district court could have ascertained the established standards applied by the California courts in reviewing zoning decisions and accordingly should have applied those standards without deferring to state adjudication." Id. at 1465.

The Pearl court noted, however, that it was bound to follow circuit precedent, and therefore upheld the district court's decision to abstain. Id. (observing that "[w]e do not write on a clean slate" and citing Sederquist, 590 F.2d at 282-83, and Santa Fe Land Improvement Co., 596 F.2d at 838). Defendants' reliance on Pearl as binding authority is thus unpersuasive. Ninth Circuit cases decided after Pearl have continued to require only a minimal showing of uncertainty in land use cases. See, e.g., Sinclair Oil, 96 F.3d at 405.

Defendants also argue that resolution of the state law issues in this case is not uncertain because VH has not actually applied for some of the permits that have allegedly been denied, and because the City approved one of the permits VH contends was denied.*fn17 VH's complaint alleges that it has applied for the permits in question, and that they have been denied, however.*fn18

Defendants these allegations, but their argument does not address the degree of uncertainty surrounding the underlying legal issues under California law. Additionally, defendants proffer no evidence in support of their claim.

The court thus examines whether there is uncertainty as to how the California courts would resolve VH's claim. VH principally contends that the City's requirement that it demonstrate a 1.5 safety factor on its property is unreasonable. The California Court of Appeal addressed a similar question in Monks v. City of Rancho Palos Verdes, 167 Cal.App.4th 263 (2008).*fn19 Plaintiffs in Monks were owners of vacant lots in an area of Rancho Palos Verdes zoned for single-family dwellings. Id. at 269. Based on concerns over landslides, the City imposed a moratorium on construction in the area of the lots. Although owners of undeveloped property were able to seek exclusion from the moratorium, the City toughened the criteria for exclusion while plaintiffs' application for an exception was pending. Id. Under the new criteria, an owner was required to demonstrate the existence of a 1.5 safety factor*fn20 for the entire moratorium area. Previously, the City had only required that an owner demonstrate a 1.5 safety factor for his individual lot. Id. at 278-79. Because it would have been impossible for an individual landowner to demonstrate a 1.5 safety factor for the entire moratorium area, rather than for an individual lot, the court concluded that the exclusion criteria permanently prohibited development of plaintiffs' property. Id. at 304-05. It thus held that the City had effected a categorical taking of the property. Id. at 305.

Apparently inspired by the Monks decision, VH argues that the City's requirement that VH demonstrate a 1.5 safety factor for its property is unreasonable. There are significant differences between Monks and this case, however, making it uncertain how a California court would view VH's contentions. Monks did not hold that requiring an individual landowner to show that its property satisfied a 1.5 safety factor was unreasonable. Rather, the problem the court found with the City's regulations was that they required property owners to demonstrate that the entire area in which their property was situated met the safety factor. See id. at 304-05. The Monks plaintiffs claimed that they could meet a 1.5 safety factor for their particular lots. Id. Here, by contrast, VH appears to argue that it should not be held to a 1.5 safety factor even for the property it intends to develop.*fn21 VH asserts that a 1.5 safety factor "is not necessary for safe development of [its] property," and that "the City has known for many years that [its] property is safe for the purposes for which [it] has sought development approval."*fn22 VH contends that substantial geological studies of its property have already been conducted.*fn23 In part, it bases its argument on Cotton's testimony in Monks that a 1.5 safety factor is not necessary for safe construction where a 1.3 safety factor can be determined with certainty.*fn24 VH's argument is consistent with the explanation given by the Monks court that while "a factor of at least 1.5. . . is accepted as a standard factor of safety by geotechnical professionals for residential construction," a lower safety factor "may be appropriate for construction if more is known of the geology of a particular area." See id. at 274.

Although VH does not explain why a safety factor below 1.5 is adequate for its property, it presumably believes that the geology of the property warrants a reduced safety factor requirement. A California court considering this arugment will have to apply highly specialized scientific standards to the unique geological characteristics of VH's property. Because a California court's decision will turn on the "peculiar facts" of the case, including the recent collapse of the eighteenth hole of VH's golf course into the ocean, the court cannot with confidence predict whether a California court would find that the City abused its discretion in holding VH to a 1.5 safety factor. See Sederquist, 590 F.2d at 282-83.

Under Ninth Circuit precedent addressing land use cases, this is sufficient to satisfy the uncertainty requirement for Pullman abstention. See id. ("Whether a city has abused its discretion by refusing to issue a building permit is by nature a question turning on the peculiar facts of each case in light of the many local and state-wide land use laws and regulations applicable to the area in question. We do not claim the ability to predict whether a state court would decide that the city here abused its discretion in declining to give the Sederquists permission to pave their access road"); see also Sinclair Oil, 96 F.3d at 405; Pearl, 774 F.2d at 1465; Santa Fe Land Improvement Co., 596 F.2d at 838.

Accordingly, the court finds that Pullman abstention is warranted. Because permitting a California court to determine the essentially local issues underlying VH's complaint may potentially narrow the federal constitutional issues presented, the principles of comity and federalism underlying Pullman support the court's decision to abstain. See C-Y Development, 703 F.2d at 380 ("We are satisfied that the potential for . . . a narrowing of the constitutional issues and the principles of comity that will be furthered by allowing the state courts to first pass on the validity of this municipal ordinance under state law are sufficient 'countervailing interests' to justify abstention in this case," quoting County of Allegheny, 360 U.S. at 188-89).

C. Whether the Court Should Stay or Remand the Federal Claims

Having decided that it is appropriate to abstain under Pullman, the court must consider the proper procedure to adopt with respect to VH's claims. VH requests that the court remand the entire case to state court. The geologist defendants, by contrast, contend that the court should remand only the state law claims, while retaining jurisdiction over, and staying, the federal claims.

In general, "[i]f a court invokes Pullman abstention, it should stay the federal constitutional question 'until the matter has been sent to the state court for a determination of the uncertain state law issue.'" Pearl, 774 F.2d at 1462 (quoting Erwin Chemerinsky, FEDERAL JURISDICTION, § 12.2.1, at p. 737 (3d ed. 1999)); see also Harrison v. NAACP, 360 U.S. 167, 177 (1959) ("This principle does not, of course, involve the abdication of federal jurisdiction, but only the postponement of its exercise; it serves the policy of comity inherent in the doctrine of abstention; and it spares the federal courts of unnecessary constitutional adjudication," citing City of Chicago v. Fieldcrest Dairies, Inc., 316 U.S. 168, 172-73 (1942)). Pullman abstention is typically raised by a defendant when plaintiff has filed in federal court, however. Few courts have had the opportunity to consider what a district court should do when it decide to abstain under Pullman in a case removed by defendant from state court.

The only case in this circuit the court can identify that has considered such a question is Ganz v. Belvedere, 739 F.Supp. 507 (N.D. Cal. 1993). There, the court observed that invocation of Pullman abstention in a case removed by defendant to federal court is unusual. Id. at 509 ("Whether the Court, pursuant to abstaining under Pullman, should remand the federal claims in plaintiff's removed complaint presents a question not heretofore addressed. Courts have invoked Pullman abstention in many cases in which the plaintiff has initially brought suit in federal court, but this Court has not located a case where a court has abstained under Pullman following removal of the action from state court. Conventionally, in cases filed initially in federal court, a court finding Pullman abstention appropriate stays the federal action pending adjudication of the state issues in state court, and retains jurisdiction over the federal claims"). The court noted that typically, when a defendant invokes Pullman abstention, "the plaintiff may . . . return to federal court [after state court adjudication of the state law issues] to have his federal claims decided if they have not been mooted by the state proceeding." Id. In cases removed from state court, however, the court concluded that it was proper to remand after deciding to abstain under Pullman. It explained:

"[I]f the plaintiff in the action at bar had filed his complaint in federal court, the Court would abstain, stay the action pending determination of the state law issues, retain jurisdiction, and the plaintiff would be required to initiate a state proceeding to have his state claims adjudicated. Plaintiff, however, filed his complaint in state court and defendants then removed. It, thus, seems inequitable for the Court now, because it finds abstention appropriate, merely to stay the action and not remand because such action would require plaintiff to initiate yet another state lawsuit. Defendants, however, complain that if the Court were to remand the entire action to state court, they would lose their statutory right under 28 U.S.C. § 1441(b) to have plaintiff's federal claims adjudicated by a federal district court. The Court, however, does not consider remand of the entire action, including plaintiff's federal claims, to foreclose defendants' right because defendants may preserve their right to federal district court adjudication of plaintiff's federal claims by making a reservation on the state court record. [England v. Louisiana State Board of Medical Examiners, 375 U.S. 411, 421(1964)].[*fn25 ] The Supreme Court has expressly provided that a defendant may make an England reservation to preserve its right to litigate federal claims in federal district court. Id. at 422 n. 13. . . . Therefore, the Court finds that remanding plaintiff's federal claims will not forclose defendants' right to federal court adjudication of those claims if defendants make the necessary England reservation on the state court record. Accordingly, the Court finds remand of the entire action proper." Id. at 510.

The court does not find Ganz's reasoning persuasive. Ganz concluded that it would be "inequitable" not to remand the entire action, because retaining jurisdiction and staying the case would "require [the] plaintiff to initiate yet another state lawsuit." Id. The court appears to have considered remand of the entire case or retention of jurisdiction over the entire case the only options available to it; it does not appear to have considered remanding only the state law claims. In federal question cases, the district court has discretion to decline to exercise supplemental jurisdiction over related state law claims. See United Mine Workers of America v. Gibbs, 383 U.S. 715, 726 (1966) ("Th[e] power [to hear related state law claims in a federal question case] need not be exercised in every case in which it is found to exist. It has consistently been recognized that pendent jurisdiction is a doctrine of discretion, not of plaintiff's right. Its justification lies in considerations of judicial economy, convenience and fairness to litigants; if these are not present a federal court should hesitate to exercise jurisdiction over state claims, even though bound to apply state law to them" (citations and footnote omitted)).

Applying the factors identified in United Mine Workers, the district court has discretion, when a case is removed from state court on the basis of federal question jurisdiction, to retain jurisdiction over the federal claims and remand the state law claims. See Emrich v. Touche Ross & Co., 846 F.2d 1190, 1196 (9th Cir. 1988) (citing Carnegie-Mellon Universtiy v. Cohill, 484 U.S. 343, 348 (1988), and United Mine Workers, 383 U.S. at 725). There is no reason why a similar option to remand only the state law claims is not available when a district court abstains in a removed federal question case under Pullman. Similar values guide a district court's exercise of discretion to decline supplemental jurisdiction over state law claims and its discretion to abstain under Pullman; both doctrines are based in part on concerns of comity and federalism. Compare, e.g., Carnegie-Mellon, 484 U.S. at 350 ("Under Gibbs, a federal court should consider and weigh in each case, and at every stage of the litigation, the values of judicial economy, convenience, fairness, and comity in order to decide whether to exercise jurisdiction over a case brought in that court involving pendent state-law claims") with Pearl Investment Co., 774 F.2d at 1462 (courts should abstain under Pullman only "where principles of comity and federalism justify postponing the exercise of jurisdiction that Congress conferred upon federal courts"). Indeed, when the district court concludes that it is appropriate to abstain under Pullman, the state law claims at that point predominate, and are properly remanded to state court. See, e.g., Cingular Wireless, LLC v. Thurston County, 150 Fed. Appx. 633, 636 (9th Cir. Sept. 26, 2005) (Unpub. Disp.) ("Although the district court did not dismiss the federal claims over which it had original jurisdiction, its decision to stay these claims pending resolution of the LUPA claims in state court most likely explains its decision to decline the exercise of supplemental jurisdiction over the state claims").

Further, Ganz's approach is counter to the principle that Pullman abstention "does not. . . involve the abdication of federal jurisdiction, but only the postponement of its exercise." Harrison, 360 U.S. at 177; see also Kollsman, 737 F.2d at 833 (Pullman abstention "is a narrow exception to the district court's duty to decide cases properly before it"). While it is true that defendants could protect their right to return to litigate the federal claims in a federal forum by placing an England reservation on the state court record, the court sees no need to place defendants, or the state court, in such a position because it can retain jurisdiction over the federal claims and remand only the state claims.*fn26

For these reasons, the court concludes that it should retain jurisdiction over VH's federal claims, and remand only the state law claims to state court.*fn27

III. CONCLUSION

For the reasons stated, the court grants VH's motion to remand as to its state law claims only. The court remands the following causes of action to state court: the first cause of action for inverse condemnation (regulatory taking), to the extent it relies on state law; the second cause of action for taking of property for public use without just compensation, to the extent it relies on state law; the fourth cause of action for violation of due process under the California Constitution; the sixth cause of action for violation of equal protection under the California Constitution; the seventh cause of action for fraud; the eighth cause of action for breach of contract; the ninth cause of action for breach of the implied covenant of good faith and fair dealing; the tenth cause of action for unjust enrichment; the eleventh cause of action for intentional interference with prospective economic advantage; the twelfth cause of action for unfair business practices; and the thirteenth cause of action for mandamus. The court retains jurisdiction over and stays the following claims: the first cause of action for inverse condemnation (regulatory taking), to the extent it relies on federal law; the second cause of action for taking of property for public use without just compensation, to the extent it relies on federal law; the third cause of action for violation of due process under the U.S. Constitution; and the fifth cause of action for violation of equal protection under the U.S. Constitution. The court stays the federal claims pending resolution of the state law claims in state court. The parties are directed to notify the court within ten days of any decision on those claims by the state court.


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