Appeal from the United States District Court for the Central District of California D.C. No. 5:09-cv-02203- VAP-OP Virginia A. Phillips, District Judge, Presiding
The opinion of the court was delivered by: Karen Nelson Moore, Circuit Judge:
Argued and Submitted November 8, 2011-Pasadena, California
Before: Ferdinand F. Fernandez, Karen Nelson Moore,*fn1 and M. Margaret McKeown, Circuit Judges.
Four mobilehome park owners in Yucaipa, California appeal the dismissal of their suit under the Fair Housing Amendments Act of 1988 ("FHAA") challenging a city zoning ordinance prohibiting any mobilehome park currently operating as senior housing from converting to all-age housing. Because the FHAA is silent on whether such senior-housing zones are permissible and because federal regulations allow for them, we AFFIRM the judgment of the district court.
In September 2009, the City of Yucaipa, California ("the City") adopted Ordinance Number 289 ("the Ordinance"), which amended the City's land-use plan by creating a Senior Mobilehome Park Overlay District (the "Overlay District"). The Ordinance prohibits any of the twenty-two mobilehome parks in the City that currently operate as senior housing, defined as a park in which either eighty percent of the spaces are occupied by or intended for occupancy by at least one person who is age fifty-five or older or one hundred percent of the spaces are occupied by or intended for occupancy by peo- ple who are age sixty-two or older, from converting to all-age housing. Yucaipa, Cal., Ordinance 289 §§ 7, 8 (Sept. 28, 2009). Specifically, the Ordinance requires that "[a]t least 80% of the spaces in mobilehome parks in the Senior Mobile-home Park Overlay District shall be occupied by at least one person 55 years of age or older," and that "[t]he signage, advertising, park rules, regulations, rental agreements and leases for spaces in a Senior Mobilehome Park in the MHP2 Overlay District shall state that the park is a senior park." Id. § 9. Among its findings accompanying the Ordinance, the Yucaipa City Council described the need to preserve affordable housing and independent living options for the City's significant senior population,*fn2 as well as to protect the reliance interests of those seniors who had purchased homes in existing senior-housing parks.
Plaintiffs-Appellants Putnam Family Partnership, Mission Valley Oaks, Caravan Estates, and Dejager Children's Trust (collectively, "Putnam"), mobilehome park owners that currently operate senior-housing parks in Yucaipa, filed suit, alleging that the Ordinance violated the FHAA by forcing them to discriminate on the basis of familial status, see 42 U.S.C. § 3604, and by interfering with their ability to "aid[ ] or encourage[ ]" families with children in the enjoyment of fair housing rights, id. § 3617. Putnam also argued that the Ordinance was preempted by the FHAA because it required Putnam to take action that the FHAA prohibited. See id. § 3615. In addition to these federal-law claims, Putnam alleged violations of California housing law. The City filed a motion to dismiss for failure to state a claim, arguing that the Ordinance fell within the FHAA's senior exemption, which allows communities that provide "housing for older persons" to exclude families with children. Id. § 3607(b)(1). The City contended that, as amended by the Housing for Older Persons Act of 1995 ("HOPA") and as interpreted by Department of Housing and Urban Development ("HUD") regulations in 1999, the senior exemption applied to city-zoned senior housing like the Overlay District. Putnam argued that the senior exemption did not apply because the senior exemption requires that the housing provider intend to operate senior housing, and Putnam lacked this intent.
The district court granted the City's motion to dismiss, holding that the Ordinance was covered by the federal senior exemption because, under the HOPA amendments, the required intent to provide senior housing need not be that of the private property owner. Because the City enacted the Ordinance, the court held, the required intent to provide senior housing was that of the City rather than Putnam. The court rejected Putnam's arguments to the contrary as based on pre-HOPA language requiring that the owner or manager of the housing entity intend to provide senior housing for the senior exemption to apply. For similar reasons, the court held that the Ordinance was not preempted. After dismissing the federal claims, the court declined to exercise supplemental jurisdiction over the state-law claims. Putnam timely appealed, repeating its argument that the decision whether to operate senior housing belongs exclusively to the housing provider and, thus, that the intent to provide senior housing which the senior exemption requires must be that of Putnam, not the City. In addition, Putnam contends that the HUD regulations on which the district court relied are inconsistent with the statute or otherwise outside the scope of the agency's authority.
We review de novo a district court's dismissal for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). Decker v. Advantage Fund Ltd., 362 F.3d 593, 595- 96 (9th Cir. 2004). Dismissal is proper when, even if all material factual allegations in the complaint are taken as true, plaintiffs "can prove no set of facts in support of the claim that would entitle [them] to relief." Aguayo v. U.S. Bank, 653 F.3d 912, 917 (9th Cir. 2011). We likewise review de novo questions of statutory interpretation and of preemption. Id.
B. The Federal Senior Exemption
 As originally enacted, the federal Fair Housing Act prohibited, inter alia, discrimination in the rental or sale of a dwelling on the basis of race, color, religion, sex, or national origin. 42 U.S.C. § 3604(a) (1968). In 1988, Congress enacted the FHAA, which amended the Fair Housing Act to prohibit discrimination on the basis of familial status. 42 U.S.C. § 3604; see also id. § 3602(k) (defining "familial status" as children younger than eighteen living with a parent or legal custodian). The FHAA also provided two exemptions to the new prohibition against familial-status discrimination: the prohibition would not affect local, state, or federal restrictions on maximum occupancy and would not apply to "housing for older persons." Id. § 3607(b)(1). The senior exemption "permit[s] communities satisfying certain requirements to discriminate on the basis of familial status." Balvage v. Ryderwood Improvement & Serv. Ass'n, 642 F.3d 765, 769 (9th Cir. 2011). The senior exemption is an affirmative defense, for which the defendant has the burden of proving eligibility. Id. at 776 (citing Massaro v. Mainlands Section 1 & 2 Civic Ass'n, 3 F.3d 1472, 1475 (11th Cir. 1993)). Moreover, the defendant must show that all requirements for the senior exemption were met at the time of the alleged discriminatory act. Id.
Under the senior-exemption provision as originally enacted in the FHAA, "housing for older persons" included housing "intended and operated for occupancy by at least one person 55 years of age or older per unit." 42 U.S.C. § 3607(b)(2)(C) (1988), amended by 42 U.S.C. § 3607(b)(2)(C) (1995). The FHAA further stated that, In determining whether housing qualifies as housing for older persons under this subsection, the [HUD] Secretary shall develop regulations which require at least the following factors:
(i) the existence of significant facilities and services specifically designed to meet the physical or social needs of older persons, or if the provision of such facilities and services is not practicable, that such housing is necessary to provide important housing opportunities for older persons; and
(ii) that at least 80 percent of the units are occupied by at least one person 55 years of age or older per unit; and
(iii) the publication of, and adherence to, policies and procedures which demonstrate an intent by the owner or manager to provide housing ...