977 F.3d 928
9th Cir.2020Background
- San Francisco replaced its condo-conversion lottery with an Expedited Conversion Program (ECP) that required owners of tenant-occupied units to offer existing tenants lifetime leases in order to convert (the "Lifetime Lease Requirement"); a legal challenge to that requirement would suspend the entire ECP while litigated.
- Peyman Pakdel and Sima Chegini (owners in a tenancy-in-common) applied under the ECP; the Department approved tentative and then final conversion maps.
- Plaintiffs signed an agreement to offer a lifetime lease and received a partial fee refund, but later sought exemptions or compensation instead of executing the lease; the City denied both requests.
- Plaintiffs sued under 42 U.S.C. § 1983, alleging a Fifth Amendment taking. The district court dismissed as unripe under Williamson County because plaintiffs had not sought state-court compensation.
- While the appeal was pending the Supreme Court decided Knick v. Township of Scott, which eliminated Williamson County’s state-court exhaustion requirement; despite that, the Ninth Circuit panel affirmed on the alternative ground that the City’s decision was not “final” for ripeness because plaintiffs bypassed available administrative procedures.
- The en banc petition was denied; Judge Collins (joined by eight judges) dissented, arguing the panel’s ripeness/procedural-default holding created an exhaustion requirement contrary to Knick and settled § 1983 law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the City’s decision imposing the Lifetime Lease Requirement is a "final decision" for Williamson ripeness | Pakdel: City's rejection of exemptions leaves no further administrative avenues; decision is final and claim is ripe | City: Plaintiffs failed to pursue available administrative remedies earlier; no final decision for judicial review | Panel (prior decision): Held claim unripe due to plaintiffs' failure to use available procedures; en banc rehearing denied; dissent says this converts finality into exhaustion |
| Whether state-court exhaustion (Williamson’s litigation requirement) still controls after Knick | Pakdel: Knick removed any state-litigation exhaustion; no need to seek state compensation before § 1983 suit | City: Focused on administrative finality and plaintiffs’ procedural choices rather than state-court exhaustion per se | Supreme Court in Knick eliminated Williamson’s state-litigation exhaustion; panel nonetheless affirmed on finality grounds; en banc denial leaves that tension unresolved |
| Whether procedural-default/exhaustion rules can bar a § 1983 takings claim | Pakdel: § 1983 claims (including takings) are not subject to exhaustion or procedural-default preclusion | City: Failure to comply with local procedural rules justifies treating the administrative action as non-final or otherwise precluding federal review | Panel majority applied procedural-default-style logic to deem claim forever unripe; dissent argues this is an improper exhaustion requirement barred by Knick |
Key Cases Cited
- Knick v. Township of Scott, 139 S. Ct. 2162 (2019) (overruled Williamson’s state-court litigation exhaustion for § 1983 takings claims)
- Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985) (takings claims require a final decision from the relevant land-use authority before federal suit)
- Patsy v. Board of Regents, 457 U.S. 496 (1982) (§ 1983 ordinarily does not require exhaustion of state remedies)
- Woodford v. Ngo, 548 U.S. 81 (2006) (defines "proper exhaustion" and procedural-default consequences in administrative-law contexts)
- Southern Pac. Transp. Co. v. City of Los Angeles, 922 F.2d 498 (9th Cir. 1990) (ripeness requires an actual plan or available administrative process so courts need not speculate)
- Hacienda Valley Mobile Estates v. City of Morgan Hill, 353 F.3d 651 (9th Cir. 2003) (finality satisfied where no further administrative procedures are available)
- Hall v. City of Santa Barbara, 833 F.2d 1270 (9th Cir. 1986) (where no administrative recourse remains, finality requirement is satisfied)
- Yee v. City of Escondido, 503 U.S. 519 (1992) (overruled parts of prior precedent on different grounds; cited for procedural context)