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Milpitas Mobile Home Estates v. City of Milpitas

United States District Court, N.D. California, San Jose Division

August 26, 2014

MILPITAS MOBILE HOME ESTATES, dba FRIENDLY VILLAGE MOBILE HOME ESTATES, Petitioner,
v.
THE CITY OF MILPITAS, THE CITY OF MILPITAS CITY COUNCIL, and THE MOBILE HOME PARK RENTAL REVIEW BOARD, Respondents.

ORDER GRANTING RESPONDENTS' MOTION TO DISMISS THE FIRST AMENDED PETITION [Re: Docket No. 29]

EDWARD J. DAVILA, District Judge.

Presently before the Court is Respondents the City of Milpitas ("the City"), the City of Milpitas City Council ("the City Council"), and the Mobile Home Park Rental Review Board's ("the Park Rental Review Board") (collectively, "Respondents") Motion to Dismiss Petitioner Milpitas Mobile Home Estates' ("Petitioner") First Amended Petition. Docket Item No. 29. The Court found this matter suitable for decision without oral argument pursuant to Civil Local Rule 7-1(b) and previously vacated the hearing. Having fully reviewed the parties' briefing, and for the following reasons, the Court GRANTS Respondents' Motion.

I. Background

a. Factual Background

Petitioner is a California limited partnership that owns and operates Friendly Village Mobile Home Estates ("Friendly Village"). First Amended Petition ("FAP") ¶¶ 5-6, Docket Item No. 28. Friendly Village is a 196-space mobile home park in Milpitas, California. FAP ¶ 6, Dkt. No. 28. Ralph Tingle, the primary investor in the partnership, acquired the park in 1975, before rent control adoption in the City. Id . ¶ 16. Mr. Tingle expected to charge a fair market rent for the park space, where the property value would appreciate in step with the market rate. Id . There was no agreement between the City and Petitioner to operate Friendly Village as a low-income residence. Id.

In 1992, the City adopted the Mobile Home Park Rent Increases Ordinance ("the Ordinance"). Req. for Judicial Notice Ex. A, Docket Item No. 16-6 (Milpitas, Cal., Code of Ordinances tit. III, ch. 30, § 1.01 (Aug. 18, 1992)).[1] Through the Ordinance, the City acknowledged that due to the "unique position" of mobile home owners, an exorbitant rent increase would fall on the owners with "particular harshness." Id . Accordingly, the Ordinance limits the amount and frequency of annual mobile home rent increases. Id . Ex. A at 6-8. Specifically, under the Ordinance, any rent increase proposal that (1) exceeds fifty percent of the increase of the Consumer Price Index, or (2) is five percent above the current rent, whichever is less, is subject to a required hearing by the City. Id . Ex. A at 6.

b. Procedural Background

On June 29, 2011, Petitioner notified park tenants of a plan to increase monthly rent to $875. FAP ¶ 18, Dkt. No. 28. Given that the monthly rent at Friendly Village was $603 or less at the time, Petitioner's proposal stood to increase the rent by 45% ($272) or more. See id. Petitioner alleges that in response to this proposal, but prior to the required hearing, the City engaged in "retaliatory conduct"-suggesting Petitioner was a "slum lord, " soliciting complaints from park tenants, and misrepresenting facts about the park's condition. FAP ¶ 20, Dkt. No. 28. On January 19, 2012, the Park Rental Review Board conducted the hearing on the proposal. Id . ¶ 26. Eight days later, the Board declined Petitioner's rent increase proposal. Id . ¶ 57. On February 6, 2012, Petitioner appealed to the City Council; the City Council affirmed the Park Rental Review Board's decision on April 4, 2012. FAP ¶¶ 58-61, Dkt. No. 28.

Petitioner filed two petitions challenging the City Council's decision: one in the Santa Clara Superior Court[2] and one in this Court. See Pet. for Writ of Admin. Mandamus, Docket Item No. 1. On December 3, 2012, Respondents filed a Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), which the Court granted on August 21, 2013. Resp't Mot. to Dismiss, Docket Item No. 16; Order, Dkt No. 27. In granting the Motion, the Court noted that Petitioner did not satisfy the required pleading standard under Federal Rule of Civil Procedure 8 because the "First Cause of Action" contained a mix of at least five separate claims. Order, Dkt. No. 27. As to the specific claims the court could ascertain, the Court dismissed Petitioner's facial challenges to the Ordinance and Petitioner's claim under California Code of Civil Procedure section 1094.5 without leave to amend and dismissed Petitioner's Private Taking, Due Process, and Equal Protection claims with leave to amend. Id.

On September 4, 2013, Petitioner filed the FAP, which included amended Private Taking, Due Process, and Equal Protection claims. FAP, Dkt. No. 28. On September 23, 2013, Respondents filed the instant Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Dkt. No. 29. The Court now turns to the substance of that motion.

II. Legal Standard

Federal Rule of Civil Procedure 12(b)(6) provides that a party may file a motion to dismiss when there is a "failure to state a claim upon which relief can be granted." Rule 12(b)(6) tests the legal sufficiency of claims asserted in the plaintiff's complaint. Ashcroft v. Iqbal , 556 U.S. 662, 678-80 (2009). A complaint requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). For purposes of Rule 12(b)(6), a "claim" means a set of facts that, if established, entitle the pleader to relief. Bell Atl. Corp. v. Twombly , 550 U.S. 554, 555 (2007).

A motion to dismiss may be granted when (1) the complaint fails to allege a cognizable legal theory, or (2) there is an absence of sufficient facts alleged under a cognizable legal theory. Shroyer v. New Cingular Wireless Servs., Inc. , 622 F.3d 1035, 1041 (9th Cir. 2010). A complaint must "state a claim to relief that is plausible on its face." Twombly , 550 U.S. at 570. The plausibility standard requires factual allegations be above speculative level. Twombly , 550 U.S. at 556-57; Iqbal , 556 U.S. at 679-80. Plausibility is not akin to probability, for a plaintiff must plead enough factual content to allow a court to reasonably infer that the defendant is liable for the alleged misconduct. Iqbal , 556 U.S. at 678.

Plausibility is analyzed under two steps. First, the court looks at the statements in the complaint and discerns factual allegations from legal conclusions. Id. at 681. The court need not accept as true legal conclusions cast in the form of factual allegations. Id . In the second step, the court relies on judicial experience and common sense, considers the claim context, and decides whether the factual allegations state a plausible claim. Id. at 679. At a minimum, the plaintiff must allege sufficient facts to "state the elements" of his claim. Johnson v. ...


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