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Sue Ellen Holmstrand v. Dixon Housing Partners

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA


June 29, 2011

SUE ELLEN HOLMSTRAND,
PLAINTIFF,
v.
DIXON HOUSING PARTNERS, LP; SIMPSON HOUSING, LLLP; MCA HOUSING PARTNERS, LLC; FOUNDATION FOR AFFORDABLE HOUSING, INC.; FPI MANAGEMENT, INC.; AND DOES ONE THROUGH TWENTY, DEFENDANTS.

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

MEMORANDUM AND ORDER

This action arises from the previous tenancy of Plaintiff Sue Ellen Holmstrand ("Plaintiff") at an apartment complex allegedly owned and operated by Dixon Housing, LP ("Dixon"), MCA Housing Partners, LLC ("MCA"), the Foundation for Affordable Housing, Inc. ("FAH"), and FPI Management, Inc. ("FPI") (collectively, "Defendants").

Plaintiff seeks redress for Defendants' alleged refusal to allow her to form a tenants association, in violation of the First and Fourteenth Amendments, and for Defendants' alleged unauthorized entry into her apartment and destruction of her personal property, in violation of the Fourteenth Amendment. Plaintiff also seeks redress for intentional infliction of emotional distress under California state law. Defendants have filed separate motions to dismiss Plaintiff's Second Amendment Complaint for failure to state a claim upon which relief may be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6).*fn1

(ECF Nos. 32-1, 37.) For the reasons set forth below, Defendants' Motions to Dismiss are granted.*fn2

BACKGROUND*fn3

Plaintiff is legally disabled, and was a resident of the Second Street Senior Apartments in Dixon, California from October 2007 to May 2008. The Second Street Apartments were developed under the Low Income Housing Tax Credit program, which is designed to increase the availability of affordable housing by encouraging private investment in such housing.

The "encouragement" is a tax credit to the private investors. Defendant DHA is the owner of the property, and Defendant FAH is the general partner of Defendant DHA. Defendant FPI is a property management company. The true capacity of Defendant MCA is unknown as regards to the Second Street Apartments.

In November 2007, the manager of the Second Street Apartments, Carolyn Kennedy, gave notice to the tenants that the building was being sold and that there would be frequent inspections of individual apartments. Ms. Kennedy informed tenants that they would be given no further notice before management could enter apartments, and further informed tenants that they could be evicted for dirty apartments or other breaches of their leases. Plaintiff objected, stating that she would not allow inspection of her apartment without forty-eight hours' notice.

In November 2007, Plaintiff asked Ms. Kennedy for permission to use the Second Street Apartments' clubhouse to hold a meeting for tenants to inform them of their legal rights. Ms. Kennedy denied Plaintiff use of the clubhouse. Plaintiff again requested use of the clubhouse in November and December 2007, and January 2008. Ms. Kennedy denied Plaintiff's request each time. Tenants were threatened with eviction if they supported a tenants association. In April and May 2008, Plaintiff attempted to advocate for additional handicapped parking spots at the Second Street Apartments, to no avail.

On May 30, 2008, Defendants served Plaintiff with an unlawful detainer action. Plaintiff agreed to move out of her apartment by July 31, 2008. On July 15, 2008, while the unlawful detainer proceedings were pending, Defendants entered Plaintiff's apartment and removed and destroyed Plaintiff's personal property. Plaintiff made repeated attempts to contact the management of the Second Street Apartments regarding the destruction of her property, but her calls were never returned. No property was returned to Plaintiff.

STANDARD

A. Lack of Subject Matter Jurisdiction

Federal courts are courts of limited jurisdiction, and are presumptively without jurisdiction over civil actions. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). The burden of establishing the contrary rests upon the party asserting jurisdiction. Id. Because subject matter jurisdiction involves a court's power to hear a case, it can never be forfeited or waived. United States v. Cotton, 535 U.S. 625, 630 (2002). Accordingly, lack of subject matter jurisdiction may be raised by the district court sua sponte. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999). Indeed, "courts have an independent obligation to determine whether subject matter jurisdiction exists, even in the absence of a challenge from any party." Id.; see Fed. R. Civ. P. 12(h)(3) (requiring the court to dismiss the action if subject matter jurisdiction is lacking).

B. Failure to State a Claim

On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6),*fn4 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). Rule 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." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint attacked by a Rule 12(b)(6) motion to dismiss does not require detailed factual allegations. However, "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."

Id. (internal citations and quotations omitted). A court is not required to accept as true a "legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009) (quoting Twombly, 550 U.S. at 555). "Factual allegations must be enough to raise a right to relief above the speculative level."

Twombly, 550 U.S. at 555 (citing 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1216 (3d ed. 2004) (stating that the pleading must contain something more than "a statement of facts that merely creates a suspicion [of] a legally cognizable right of action.")).

Furthermore, "Rule 8(a)(2)...requires a showing, rather than a blanket assertion, of entitlement to relief." Twombly, 550 U.S. at 556 n.3 (internal citations and quotations omitted). Thus, "[w]ithout some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirements of providing not only 'fair notice' of the nature of the claim, but also 'grounds' on which the claim rests." Id. (citing 5 Charles Alan Wright & Arthur R. Miller, supra, at § 1202). A pleading must contain "only enough facts to state a claim to relief that is plausible on its face." Id. at 570. If the "plaintiffs... have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed." Id. However, "[a] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and 'that a recovery is very remote and unlikely.'" Id. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).

A court granting a motion to dismiss a complaint must then decide whether to grant leave to amend. Leave to amend should be "freely given" where there is no "undue delay, bad faith or dilatory motive on the part of the movant,...undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of the amendment...."

Foman v. Davis, 371 U.S. 178, 182 (1962); Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the Foman factors as those to be considered when deciding whether to grant leave to amend). Not all of these factors merit equal weight. Rather, "the consideration of prejudice to the opposing party...carries the greatest weight." Id. (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 185 (9th Cir. 1987). Dismissal without leave to amend is proper only if it is clear that "the complaint could not be saved by any amendment." Intri-Plex Techs. v. Crest Group, Inc., 499 F.3d 1048, 1056 (9th Cir. 2007) (citing In re Daou Sys., Inc., 411 F.3d 1006, 1013 (9th Cir. 2005); Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989) ("Leave need not be granted where the amendment of the complaint...constitutes an exercise in futility....")).

ANALYSIS

A. Lack of Subject Matter Jurisdiction

Plaintiff's first cause of action asserts that Defendants violated her right to "peacefully assemble, speak and petition for redress of grievances, and otherwise address rights under both the laws of the State of California and the Constitution of the United States" by denying Plaintiff the use of the Second Street Apartments' clubhouse for a tenants meeting. (Pl.'s 2d Am. Compl., 12:13-17, ECF No. 31.) Plaintiff further alleges that tenants were threatened with eviction if they supported a tenants association. (Pl.'s 2d Am. Compl., 12:18, ECF No. 31.)

Plaintiff's second cause of action alleges that Defendants violated her Fourteenth Amendment Right to equal protection.

Plaintiff asserts that because she seeks redress for violations of her First and Fourteenth Amendment rights, the Court has jurisdiction over Plaintiff's lawsuit. (Pl.'s 2d Am. Compl., 5:11-15, ECF No. 31.) Plaintiff claims that jurisdiction arises from 28 U.S.C. §§ 2201-02. Under 28 U.S.C. § 2201, a federal court may declare a plaintiff's rights "[i]n a case of actual controversy within its jurisdiction." 28 U.S.C. § 2201 (2006) (emphasis added). Article III, Section 2 of the Constitution provides that the federal courts shall have jurisdiction over "all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made...." U.S. Const. art. III, § 2.

The First Amendment of the Constitution provides that "Congress shall make no law...abridging the freedom of speech, or of the press; or of the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." U.S. Const. amend. I. The rights enumerated in the First Amendment apply to state and local government actors through the Fourteenth Amendment. See, e.g., Cantwell v. Conn., 310 U.S. 296, 303 (1940) ("The fundamental concept of liberty embodied in [the Fourteenth] Amendment embraces the liberties guaranteed by the First Amendment."). The Fourteenth Amendment provides in relevant part that "[n]o State shall...deny to any person within its jurisdiction the equal protection of the laws." U.S. Const. amend. XIV, § 1.

The United States Constitution protects individual rights, including those rights enumerated in the First and Fourteenth Amendments, from government action only. Jackson v. Metro. Edison Co., 419 U.S. 345, 349 (1974); Single Moms, Inc. v. Mont. Power Co., 331 F.3d 743, 746 (9th Cir. 2003). "Only when the government is responsible for a plaintiff's complaints are individual constitutional rights implicated." Single Moms, Inc., 331 F.3d at 747 (emphasis in original) (citing Brentwood Acad. v. Tenn. Secondary Sch. Athletic Ass'n, 531 U.S. 288, 295 (2001)). Thus, to state a claim for a violation of a Constitutional right, a plaintiff must show that the alleged violation was "fairly attributable to the federal or state government." Lugar v. Edmondson Oil Co., 457 U.S. 922, 936 (1982); Mathis v. Pac. Gas & Elec. Co., 75 F.3d 498, 502 (9th Cir. 1996).

Accordingly, private individuals and private entities are not normally liable for violations of most rights secured by the Constitution. Lugar, 457 U.S. at 936. The Supreme Court has held that a private actor may be characterized as a state actor when there is a sufficient "nexus" between the state and the private entity. Jackson, 419 U.S. at 351. In determining whether the action of a private entity "may be treated as that of the state," courts should consider the following four factors:

(1) whether "the government compelled the action using its coercive power or provided significant encouragement, either overt or covert, for the action;" (2) whether the government and the private actor willfully participated in the joint activity; (3) whether the government controlled a nominally private actor; and (4) whether the government delegated a "public function" to the private actor. Single Moms, Inc., 331 F.3d at 747 (internal citations and quotations omitted). "If there is no state action, the inquiry ends." United States v. Int'l Bhd. of Teamsters, 941 F.2d 1292, 1297 (2d Cir. 1991).

In the present action, Plaintiff has failed to allege facts sufficient to establish any state action. Plaintiff alleges that Defendants received a tax credit through the Low Income Housing Tax Credit program. (Pl.'s 2d Am. Compl., 2:4-9, ECF No. 31.) Plaintiff also alleges that the Solano County Tax Assessor is a co-owner of the Second Street Apartments. (Pl.'s 2d Am. Compl, 4:15, ECF No. 31.) However, these facts do not establish that the government used its coercive power or encouraged Defendants to violate Plaintiff's rights, that the government willfully participated with Defendants in the joint activity of denying Plaintiff's rights, that the government controlled any of the nominally private Defendants, or that the government delegated a public function to Defendants. In short, Plaintiff has failed to establish a sufficient "nexus" between the private Defendants and any state actor.

Because Plaintiff has failed to allege a government action, or any facts that would permit the Court to characterize the private Defendants as government actors, Plaintiff does not have a cause of action arising under the Constitution or the laws of the United States. As such, the present action is not within the Court's jurisdiction as set forth by Article III of the Constitution.

B. Failure to State a Claim Upon Which Relief Can Be Granted

Plaintiff alleges both federal and state causes of action and requests relief accordingly. The issue before the Court is not the substance of these various claims, but whether Plaintiff has pled sufficient facts as a general matter. While the complaint does not need detailed factual allegations, it must still provide sufficient facts alleged under a cognizable theory. See supra.

C. Plaintiff's First and Second Causes of Action

Plaintiff alleges that Defendants violated Plaintiff's First and Fourteenth Amendment rights by refusing to allow her to form a tenants association, entering her home without permission, and destroying her personal property. As indicated above, in order for a plaintiff to properly bring suit against a private actor for violations of these Constitutional rights, the plaintiff must establish a sufficient "nexus" between the state and the private entity may establish that a private actor is properly characterized as a state actor. Jackson, 419 U.S. at 351.

However, Plaintiff has failed to plead any facts that establish such a nexus between the state and Defendants in the present case. See supra. Plaintiff has plead no facts that show that the government coerced or encouraged Defendants to violate Plaintiff's rights, that the government willfully participated in Defendants' activities, that the government controlled Defendants, or that the government delegated a public function to Defendants. See supra; see also Single Moms, Inc., 331 F.3d at 747 (articulating the four factors for a court to consider).

Even assuming the Court had subject matter jurisdiction over Plaintiff's claims, Plaintiff has failed to plead facts sufficient to state a claim upon which relief can be granted. While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not require detailed factual allegations, a plaintiff must nonetheless provide "the grounds of his entitlement to relief." Twombly, 550 U.S. at 555. A plaintiff must make a "showing, rather than a blanket assertion, of entitlement to relief." Id. at 556 n.3. In the present case, Plaintiff has failed to make such a showing. Plaintiff has not pled facts sufficient to show that Defendants may be properly characterized as state actors, and Plaintiff has likewise failed to plead facts sufficient to establish the requisite state action. Plaintiff has therefore failed to state a claim upon which relief can be granted. Thus, even were jurisdiction proper, Plaintiff's claims would nonetheless fail under the standards of Rule 12(b)(6). Defendants' Motions to Dismiss are therefore granted as to Plaintiff's first and second causes of action.

D. Plaintiff's Remaining Cause of Action

Plaintiff's federal claims presently dismissed, the Court declines to exercise supplemental jurisdiction over the remaining state law causes of action. The Court need not address the merits of the Motions to Dismiss with respect to the remaining state law cause of action, as the issue is now moot.

E. Leave to Amend

Having granted Defendants' Motions to Dismiss, the Court must decide whether to grant Plaintiff leave to amend. Leave to amend should not be granted when doing so constitutes an exercise in futility. Foman, 371 U.S. 178, 182. In the present action, Plaintiff has filed three complaints, and each has failed to properly state a cause of action. Allowing Plaintiff additional amendments would, at this point, constitute an exercise in futility. Furthermore, Plaintiff has no standing to bring the claims that she asserts against Defendants in this lawsuit. See supra. As such, the Court fails to understand how further amendment could save the complaint. Accordingly, Defendants' Motions to Dismiss are granted without leave to amend.

CONCLUSION

As a matter of law, and for the reasons set forth above, Defendants' Motions to Dismiss (ECF Nos. 32-1, 37) Plaintiff's Second Amended Complaint (ECF No. 31) are GRANTED without leave to amend. The Clerk is ordered to close the case.

IT IS SO ORDERED.


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