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8679 Trout, LLC v. North Tahoe Public Utilities District

September 7, 2010


The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge


The instant litigation arises over Plaintiff's proposed conversion of a mobile home park from a rental facility to a resident-owned park. The property owner, 8679 Trout, LLC, ("Plaintiff") commenced this litigation in the Placer County Superior Court against North Tahoe Public Utility District and North Tahoe Public Utility District Board of Directors ("Defendants"). Defendants promptly removed.

Presently before this Court are two motions*fn1 : (1) Plaintiff's Motion for Partial Remand to the state court; and (2) Defendants' 12(b)(6) Motion to Dismiss for failure to state a claim upon which relief can be granted. For the reasons set forth below, Plaintiff's Motion to Remand will be granted in part and, as a result, Defendants' Motion to Dismiss is moot.


Plaintiff owns land and improvements in the North Tahoe Public Utility District ("NTPUD"). Since late 2006, Plaintiff has operated a rental only mobile home park known as "Denny's Mobilehome Park" ("Park"), consisting of seven mobile home units. This arrangement has been in place for approximately thirty years. Beginning in early 2006, Plaintiff communicated to Defendants its intention to convert the individual units within the Park from a rental only facility owned by Plaintiff to resident ownership with common ownership of the common facilities.

Plaintiff asserts that Defendants led it to believe that the only additional improvement required was the installation of a separate service line, and that the conversion would be a "continuation of service" from the Defendants' standpoint.

In the Spring of 2009, Plaintiff contacted Defendants to obtain confirmation of service, or a "service letter," for its petition to Placer County for conversion. Defendants stated that they did not require an application for service, and that such conversions were commonly done in other circumstances without physical changes to the property. Therefore, Plaintiff began drafting CC&R language to enumerate the requirements for viability of the future owners according to Defendants' specifications.

On October 22, 2009, Plaintiff avers that Defendants altered their position and revised their requirements to include new sewer and water service to each individual unit within the Park before receiving service. Plaintiff further contends that Defendants advised it to make a variance request on December 15, 2009. An adjudicatory meeting on the variance was held before the Development and Planning Committee on February 22, 2010 despite repeated requests for a delay or withdrawal of its application. At the hearing, Defendants' staff recommended denial of the variance unless new water and sewer lines were connected to each individual unit. The board denied Plaintiff's application. A subsequent meeting was scheduled before the NTPUD Board on March 9, 2010 to consider the variance. Plaintiff again requested continuance of the hearing; however, that request along with Plaintiff's request for a variance was denied.

On June 7, 2010, Plaintiff filed the present action, which alleges both state and federal claims, to wit: (1) declaratory relief for violation of California Government Code § 656427.5; (2) inverse condemnation under both the United States and California Constitutions; and (3) violation of 42 U.S.C. § 1983.

Defendants removed to this Court on June 21, 2010. Plaintiff filed its Motion to Remand on July 21, 2010 requesting that this Court remand the state claims and stay the federal causes of action. Through its motion, Plaintiff contends that a state court must adjudicate the takings claims before they are ripe for federal court review. Defendants filed an Amended Motion to Dismiss on July 29, 2010.


A. Motion to Dismiss

On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to "give the defendant fair notice of what the...claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47 (1957). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the "grounds" of his "entitlement to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Bell Atl. Corp. v. Twombly, 2007 U.S. LEXIS 5901, 20-22 (U.S. 2007) (internal citations and quotations omitted).

Factual allegations must be enough to raise a right to relief above the speculative level. Id. at 21 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed. 2004) ("The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action").

If the court grants a motion to dismiss a complaint, it must then decide whether to grant leave to amend. The court should "freely give[]" leave to amend when there is no "undue delay, bad faith[,] dilatory motive on the part of the movant,...undue prejudice to the opposing party by virtue of...the amendment, [or] futility of the amendment...." Fed. R. Civ. P. 15(a); Foman v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is only denied when it is clear that the ...

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