MHC Limited Financing v. City of San Rafael, No. 07-15982 (9th Cir. 2013)
Annotate this CaseIn this appeal, the court considered whether San Rafael's mobilehome rent regulation violated the park owners' substantive due process rights, constituted a regulatory taking under Penn Central Transportation Co. v. New York City, or ran afoul of the public use requirement of the Fifth Amendment under the standards articulated in Kelo v. City of New London. The court concluded that the district court properly rejected the City's arguments that MHC's claims were barred by the statute of limitations and precluded by res judicata, and the district court did not abuse its discretion in allowing MHC to amend its complaint. The court also concluded that the regulation did not constitute either a Penn Central or a private taking. Because the court reached the merits of the takings issue, the court need not resolve the question of ripeness. The court further concluded that the district court did not err in granting judgment on MHC's substantive due process claims; the district court did not err in submitting the breach of settlement contract claims to the jury, denying the motion for a directed verdict on that question, denying the motion for a new trial, or awarding attorneys' fees; and in its original lawsuit, MHC waived its claim for damages in order to have a bench trial on the constitutional claims. Accordingly, the court reversed the district court's holding as to the Penn Central and private takings, but affirmed the judgment in all other respects.
Court Description: Civil Rights. The panel affirmed in part and reversed in part the district court’s bench trial judgment and held that the City of San Rafael’s mobilehome rent regulation passed constitutional muster. The panel held that the district court properly rejected the City’s arguments that plaintiff’s claims were barred by the statute of limitations and precluded by res judicata, and that the district court did not abuse its discretion in allowing plaintiff to amend its complaint. Reversing the district court, the panel held that the economic impact, investment-backed expectations, and character of San Rafael’s Mobilehome Rent Stabilization Ordinance all lead to the conclusion that the Ordinance, as amended in 1999, did not constitute a Penn Central taking. The panel further held that because the Ordinance was rationally related to a conceivable public purpose, the Ordinance did not amount to a private taking, nor did it run afoul of substantive due process. The panel held that the district court did not err in submitting plaintiff’s breach of settlement agreement claims to the jury, denying the motion for a directed verdict on that question, denying the motion for a new trial, or awarding attorneys’ fees to the City for its victory on the settlement claims. Finally, the panel affirmed the district court’s dismissal of plaintiff’s second subsequent suit against the City which was filed while the original lawsuit was pending. The panel determined that the claims in both suits were the same and plaintiff had agreed to waive its damage claims in the first lawsuit.