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9th Circuit Overturns Damages Verdict Against City of Carson

http://cdn.ca9.uscourts.gov/datastore/opinions/2018/04/23/16-56255.pdfThumbnail image for !!me-opera-2017-cropped ---1.jpg

Deja Vu. Park owner loses a property rights battle in the 9th circuit. It may be, as I have said before, that working in the system and maximizing the advantage with a solid case-in-chief for rent adjustments is the park owners' best option in dealing with a broken municipality.

The courts will only support the mobilehome rent controls in effect now---which are wealth-protection systems for incumbent tenants. These greedy sellers (in the name of protecting their investment) freely exploit needy home seeking families themselves. Sellers peddling often substandard product sell above home value because of the home shortages.  In some areas, this illict profit is criminalized. In New York, it is a felony: sharp contrast to the hypocrisy of vacancy controls.

See, COLONY COVE PROPERTIES, LLC v. CITY OF CARSON; CITY OF CARSON MOBILEHOME PARK RENTAL REVIEW BOARD. 

The Takings Clause of the Fifth Amendment, made applicable to the States by the Due Process Clause of the Fourteenth Amendment, provides that "private property" may not "be taken for public use, without just compensation." The issue in this case is whether a California city engaged in an unconstitutional taking when it approved a lower rent increase for a mobile home park than the park had requested.

After a jury trial, the district court entered a judgment finding an unconstitutional taking and awarding the park more than $3 million in damages. 

Applying the factors set forth in Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978) the panel first held that plaintiff did not present sufficient evidence to create a triable question of fact as to the economic impact caused by the City's denial of larger rent increases. The panel then held that plaintiff failed to present sufficient evidence supporting its investment-backed expectations claim. Finally, the panel held that the character of the City's action could not be characterized as a physical invasion by the government. The panel concluded that based on the evidence, no reasonable finder of fact could conclude that the denials of plaintiff's requested rent increases were the functional equivalent of a direct appropriation of the property.

Accordingly, the panel held that the district court should have granted the City's motion for judgment as a matter of law.

The case was presented by some of the best lawyers this country has to offer. World class, really. The result may suggest that most park owners may want to reconsider options and alternatives in dealing with rent controls, which navigate to success without entanglement in costly, protracted and ultimately risky litigation  attacking local rent controls in California outside the statute of limitaitons for facial attacks under current precedent. 

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