MHC Financing Ltd. Partnership v. City of San Rafael
714 F.3d 1118
9th Cir.2013Background
- Contempo Marin and Grapeland Vistas own mobilehome parks in San Rafael; pad lessees pay rents to MHC.
- San Rafael’s Mobilehome Rent Stabilization Ordinance (1989) imposed CPI-based rent controls with adjustments; 1993 amendments added vacancy control.
- 1999 amendments replaced the sliding scale with a flat 75% of CPI increase and altered capital improvements provisions.
- MHC sued in 2000 challenging the ordinance as a taking; 2001 settlement contemplated vacancy-control repeal and amendments, contingent on City Council approval.
- After protracted litigation, Lingle (2005) narrowed takings theory; district court found in MHC’s favor on some claims, but panel reverses on Penn Central and private taking while affirming others.
- MHC II (2004) and related proceedings addressed damages; district court dismissed with prejudice; appellate court ultimately upheld most rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Penn Central takings | MHC: 1999 amendments takings under Penn Central. | City: regulation rationally related to public objectives; no taking. | No Penn Central regulatory taking. |
| Private taking under public use | MHC: ordinance transfers value to tenants; private taking. | Regulation rationally related to public purpose; not a private taking. | Not a private taking. |
| Substantive due process | Ordinance arbitrary/irrational and deprives owners of property rights. | Rational basis; regulation furthers public objectives. | No substantive due process violation. |
| Statute of limitations | Claims timely as to amended ordinance retroactivity. | One-year statute; timely as to amended regime. | Claims timely; not barred by limitations. |
| Res judicata | De Anza precludes only related claims. | De Anza bars relitigation. | Res judicata does not bar MHC claims here. |
Key Cases Cited
- Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (U.S. 2005) (substantive due process treatment of takings theories; no 'substantially advances' theory in takings.)
- Penn Central Transportation Co. v. New York City, 438 U.S. 104 (U.S. 1978) (three-factor test: economic impact, investment-backed expectations, character of government action.)
- Kelo v. City of New London, 545 U.S. 469 (U.S. 2005) (public-use requirement is deferential if rationally related to public purpose.)
- Guggenheim v. City of Goleta, 638 F.3d 1111 (9th Cir. 2010) (en banc; investment-backed expectations fatal to takings when property acquired under regulation.)
- Levald, Inc. v. City of Palm Desert, 998 F.2d 680 (9th Cir. 1993) (early takings decision recognizing deference to regulation in housing contexts.)
- San Remo Hotel, L.P. v. City & Cnty. of San Francisco, 545 U.S. 323 (U.S. 2005) (full faith and credit on state judgments; preclusion principles for federal claims.)
- Lindbergh v. City of Escondido, 503 U.S. 519 (U.S. 1992) (recognizes typical effects of rent controls on property values (cited in context).)