Sylvia Landfield Trust v. City of Los Angeles
729 F.3d 1189
| 9th Cir. | 2013Background
- Plaintiffs are four landlords whose apartment buildings were placed into the City of Los Angeles’s Rent Escrow Account Program (REAP) for health, safety, and habitability code violations.
- REAP reduces tenant rent and permits tenants to pay reduced rent into a City-managed escrow to fund repairs; properties are placed in and released from REAP by the Los Angeles Housing Department and administrative rules.
- Plaintiffs sued, alleging REAP as applied violated their substantive due process rights (claiming improper designation, inadequate notice/hearings, and that REAP enriches the City/contractors).
- The district court dismissed the complaint under Fed. R. Civ. P. 12(b)(6) and denied leave to amend; plaintiffs appealed.
- The Ninth Circuit reviewed the dismissal de novo and the denial of leave to amend for abuse of discretion, applying rational-basis review for the as-applied substantive due process claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether placing plaintiffs’ properties into REAP violated substantive due process | REAP was improperly applied (designations based on tenant-caused damage, minor defects, or unpermitted work) and is used to transfer/enrich private parties | REAP targets legitimate public-health and safety problems; procedures allow appeals and tenant-caused damage is addressable at hearings; third-party partnerships further REAP goals | REAP is rationally related to legitimate government interests; no substantive due process violation affirmed |
| Whether REAP’s purpose is illegitimate or arbitrary | REAP’s current purpose allegedly serves private/corporate enrichment rather than public welfare | REAP was enacted and amended to address widespread substandard housing and fire-safety risks; partnerships and escrow mechanisms further public objectives | Allegation of enrichment is conclusory and implausible; court rejects claim |
| Whether procedural deficiencies (notice/inspection/hearing) support an as-applied substantive due process claim | Insufficient notice/opportunity to be heard when properties inspected/placed into REAP | REAP provides appeal/hearing mechanisms; alleged procedural issues do not amount to conscience-shocking conduct | Procedural allegations do not meet the conscience-shocking deliberate-indifference standard; claim fails |
| Whether denial of leave to amend was an abuse of discretion | Plaintiffs sought to amend to add factual allegations to save claims | District court previously allowed amendments and reasonably found further amendment would be futile under Iqbal plausibility standard | Denial of leave to amend was not an abuse of discretion; dismissal affirmed |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for Rule 12(b)(6))
- County of Sacramento v. Lewis, 523 U.S. 833 (substantive due process, conscience-shocking standard)
- Richardson v. City and County of Honolulu, 124 F.3d 1150 (rational-basis review for landlord regulatory challenges)
- Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025 (standards of review: de novo dismissal, abuse of discretion for amendment denial)
- Lebbos v. Judges of Superior Court, Santa Clara Cnty., 883 F.2d 810 (rational basis/arbitrariness test)
- Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (land-use rationality/arbitrary-unreasonable standard)
- Green v. Superior Court, 517 P.2d 1168 (California constructive eviction and limits on tenant remedies)
- Action Apartment Ass’n, Inc. v. Santa Monica Rent Control Bd., 509 F.3d 1020 (takings/substantive due process interplay)
- Brittain v. Hansen, 451 F.3d 982 (substantive due process protection from arbitrary deprivations)
- Nunez v. City of Los Angeles, 147 F.3d 867 (substantive due process standards for property-related government action)
- Marsh v. County of San Diego, 680 F.3d 1148 (conscience-shocking test application)