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Mhc Financing Limited Partnership Two v. City of Santee

December 21, 2012

MHC FINANCING LIMITED PARTNERSHIP TWO, PLAINTIFF,
v.
CITY OF SANTEE,
DEFENDANT.



The opinion of the court was delivered by: Hon. Thomas J. Whelan United States District Judge

AND DENYING IN PART ORDER GRANTING IN PART DEFENDANT'S MOTION TO DISMISS [DOC. 6] AND GRANTING PLAINTIFF'S EX PARTE APPLICATION [DOC. 10]

Pending before the Court is Defendant City of Santee's motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Plaintiff MHC Financing Limited Partnership Two ("MHC") opposes and requests that the Court not consider certain arguments in the City's reply.

The Court decides the matter on the papers submitted and without oral argument. See Civ. L. R. 7.1(d.1). For the reasons discussed below, the Court GRANTS IN PART and DENIES IN PART the City's motion to dismiss [Doc. 6] and GRANTS MHC's ex parte application [Doc. 10].

I. BACKGROUND

This lawsuit represents MHC's third federal court attempt at challenging the City's mobile home rent-control ordinance. MHC's previous lawsuits have been dismissed, primarily on the basis that the claims were not ripe because MHC had not sought a rent control adjustment from the City.

According to MHC, after the last federal lawsuit was dismissed, MHC applied for a rent control adjustment, which the City rejected on November 3, 2011. Thereafter, MHC sought review by the City Council, which upheld the decision. MHC then filed for a writ of mandamus in state court, which is still pending.

Based on these events, MHC contends that its claims are now ripe. The City disagrees and, in the alternative, argues that the Court should abstain from hearing MHC's claims until the state-court writ proceeding is resolved.

II. MOTION TO DISMISS STANDARD

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint. See Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory or for insufficient facts under a cognizable theory. Balisteri v. Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir. 1990). In ruling on the motion, a court must "accept all material allegations of fact as true and construe the complaint in a light most favorable to the non-moving party." Vasquez v. L.A. Cnty., 487 F.3d 1246, 1249 (9th Cir. 2007).

Complaints must contain "a short plain statement of the claim showing the that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The Supreme Court has interpreted this rule to mean that "[f]actual allegations must be enough to rise above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 554, 555 (2007). The allegations in the complaint must "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 570). Well-pled allegations in the complaint are assumed true, but a court is not required to accept legal conclusions couched as facts, unwarranted deductions, or unreasonable inferences. Papasan v. Allain, 478 U.S. 265, 286, (1986); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

III. DISCUSSION

A. MHC's private taking (as applied) and substantive due process claims are ripe.

The City argues that MHC's private takings and substantive due process claims are not ripe because MHC has failed to comply with the final decision and exhaustion requirements of Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985). (Mt. [Doc. 6-1], 7:5--18.) MHC responds that they have complied with the first requirement, and that the second is not applicable to these claims. The Court agrees with MHC.

As an initial matter, the City has not cited a single federal case supporting the proposition that Williamson's exhaustion requirement applies to a private takings claim. Morever, in Armendariz v. Penman, 75 F.3d 1311 (9th Cir. 1996), the Ninth Circuit explained that "[b]ecause a 'private taking' cannot be constitutional even if compensated, a plaintiff alleging such a taking would not need to seek compensation in state proceedings before filing a federal takings claim under the rule of Williamson." Id. at 321(abrogated on other grounds). Indeed, the City's reply appears to concede that its argument is precluded under Armendariz and instead focuses on whether MHC has failed to state a claim. Because this ...


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