MEMORANDUM
Applegate, LP; Country Hill, LP; College Estates, LP; Fredwood, LLLP; Home Properties Hunters Glen, LLC; and Home Properties Elmwood Terrace, LLC (“Plaintiffs”) brought an action against the City of Frederick, Maryland (“Defendant” or “the City”) in the Circuit Court for Frederick County (Civ. No. 10-C-15-002035). Thereafter, Defendant filed a notice of removal, invoking this Court’s federal-question jurisdiction pursuant to 28 U.S.C. § 1441(a). Now pending before the Court are Plaintiffs’ Motion for Good Cause to Proceed Pursuant to the Local Government Tort Claims Act (“Motion to Proceed”) (ECF No. 19); Plaintiffs’ Motion for Leave to File Second Amended Complaint (“Motion to Amend”) (ECF No. 40); and Defendant’s Motion to Dismiss the Amended Complaint or, in the Alternative, for Summary Judgment (“Motion to Dismiss”) (ECF No. 26).
1. Background
Plaintiffs are business entities that own certain apartment complexes located in Frederick, Maryland. The complexes owned by Applegate, Country Hill, College Estates, and Fredwood are managed by the Maryland Management Company (“MMC”), while the complexes owned by Hunters Glen and Elmwood Terrace are managed by Home Properties, LP. (ECF No. 29 at 1-2.)
Plaintiffs allege that “[s]ometime between August 1, 2002[,] and July 1, 2004, various condominium associations within the City.. .requested relief from the application of the.. .five-tiered progressive rate structure.” (ECF No. 29 ¶22.) According to Plaintiffs, these associations lobbied the “Department of Water and Sewer” (“DWS”)
Plaintiffs acknowledge that Resolution No. 14-11 “effectively eliminated the unfair billing practices between condominiums and apartment buildings.” (ECF No. 29 ¶ 33.) Nevertheless, on July 20, 2015, Plaintiffs filed a six-count action in the Circuit Court for Frederick County, alleging breach of contract (Count I), breach of good faith (Count II),
II. Plaintiffs’ Motion to Amend (ECF No. 40)
A. Standard of Review
Because the Court has not entered a scheduling order in this matter, Plaintiffs’ Motion to Amend is governed by the liberal standard of Rule 15(a)(2) of the Federal Rules of Civil Procedure. Rule 15(a)(2) instructs, district, courts to “freely give leave” to amend “when justice so requires.” Even so, a court may deny a motion to amend if (1) the movant has acted in bad faith, (2) the new pleading would prejudice the nonmovant, or (3) the new pleading would be futile. Laber v. Harvey,
B. Analysis
In their Motion to Amend, Plaintiffs propose two new counts for violations of the Fourteenth Amendment’s procedural due process requirements and of section 25-19 of the Code of the City of Frederick. Because the Court declines to exercise supplemental jurisdiction over any of Plaintiffs’ state-law claims, see infra Part III.B, the Court confines its analysis here to Plaintiffs’ constitutional theory.
The Due Process Clause of the Fourteenth Amendment prohibits states and state actors from “depriving] any person of life, liberty, or property, without due process of law.” The Due Process Clause includes both substantive and procedural components. Procedural due process “prevents mistaken or unjust deprivation” of a' protected property interest; it requires “fair notice of impending state action and an Opportunity to be heard.” Snider Int’l Corp. v. Town of Forest Heights,
First, the City action of which Plaintiffs complain is not the sort of action that implicates individual due process rights. Over a century ago, Justice Oliver Wendell Holmes, Jr., wrote that “[w]here a rule... applies to more than a few people, it is impracticable that everyone should have a direct voice in its adoption,” and that legislative bodies may constitutionally implement general policies that “affect the person or property of individuals, sometimes to the point of ruin, without giving them a chance to be heard.” Bi-Metallic Inv. Co. v. State Bd. of Equalization,
Alternatively, even if the City’s action here could have triggered some kind of due process protection, Plaintiffs have not adequately pleaded that the City’s action deprived them of a protected property interest. “In assessing a procedural due process 'claim, ‘[ujriless there has been a “deprivation” [of a protected liberty or property interest] by “state action,” the question of what process is required.. .is irrelevant, for the constitutional right to “due process” is simply not implicated.’ ” Iota Xi Chapter of Sigma Chi Fraternity v. Patterson,
Finally, even if Plaintiffs could somehow demonstrate that they were deprived of a protected interest, such deprivation does not by itself amount to a Fourteenth Amendment violation. Rather, Plaintiffs must show that the procedures giving rise to the deprivation were “constitutionally inadequate”—i.e., that Plaintiffs were denied notice and an opportunity to be heard. Iota Xi Chapter,
Whenever any consumer of water shall report to the city treasurer that he does not have as many fixtures as he is charged with, or that some of the fixtures have been disconnected, or that the amount charged against him is excessive, the city treasurer shall notify the superintendent, who shall forthwith make an investigation of the premises -and report his findings to the, city -treasurer, and the city treasurer shall make such adjustments in.the account of any such consumer as may be necessary to conform with the provisions of [the Code].
Frederick, Md., Code § 25-11 (emphasis added). “[A] procedural due process violation cannot have occurred when the governmental actor provides apparently adequate procedural remedies and the plaintiff has not availed himself of those remedies.” Kendall v. Balcerzak,
III. Defendant’s Motion to Dismiss (ECF No. 26)
A, Fourteenth Amendment Equal Protection (Count IV)
Plaintiffs claim that the Multi-Residen-tial Discount, as applied to owners of condominiums but not to owners of apartment buildings, violated the Equal Protection Clause of the Fourteenth Amendment because there is “no rational basis for distinguishing between... condominiums and apartment buildings... if the true stated goal of Resolution No. 02-32 was to provide water and ’to insure adequate revenues and fair application for all users.’” (ECF No. 29 ¶ 58.)
The Equal Protection Clause provides that no state shall “deny to any person within its jurisdiction the equal protection of the laws.” U.S. Const, amend. XIV, § l.
If the plaintiff demonstrates that he is similarly situated to his comparators, the court will next analyze the classification at issue with the appropriate degree of means-ends scrutiny. While suspect and quasi-suspect classifications, such as those based on race or gender, warrant heightened scrutiny, economic classifications are subject to rational-basis review. See Heller v. Doe ex rel. Doe,
Plaintiffs here fail both prongs of the equal protection analysis. First, they have not adequately pleaded that they are similarly situated with their comparators— i.e., condominium owners. Plaintiffs are, by their own admission, limited partnerships and limited liability companies that own large apartment compounds: in other words, they are commercial ventures. By contrast, then.- comparators—condominium owners—are presumably owner-occupiers who are more akin to private homeowners or townhome owners than they are to business ventures.
Moreover, even if Plaintiffs could somehow show that they were similarly situated to condominium owners, their claim would still fail because the City can articulate a rational basis for its classification. Specifically, the City proffers that the Multi-Residential Discount had the “net effect of making the rate structure more fair among the class of individual residential property owners.” (ECF No. 26-1 at 26.) That explanation is perfectly plausible: indeed, municipalities routinely distinguish between residential and commercial property and property owners in their policy-making, whether through zoning, taxes, special assessments, or the provision of city services. It is rational (regardless of whether it is optimal policy) for a municipality to adjust its utility rates so as to treat residential property owners alike.
In their opposition brief, Plaintiffs cite a pair of old Maryland cases addressing the provision of utility services, neither of which expressly invokes federal equal protection doctrine. In Lewis v. Mayor & City Council of Cumberland,
B. State-Law Claims
Having dismissed Plaintiffs’ Fourteenth Amendment equal protection claim, and having denied Plaintiffs’ motion to supplement their Amended Complaint with a procedural due process claim, the Court declines to exercise its supplemental jurisdiction over the remaining state-law claims. See 28 U.S.C. § 1367(c) (“The district courts may decline to exercise supplemental jurisdiction over a [state-law] claim.. .if.. .the district court has dismissed all claims over which it has original jurisdietion[.]”); see also United Mine Workers of Am. v. Gibbs,
IV. Conclusion
For the foregoing reasons, an Order shall enter DENYING WITHOUT PREJUDICE Plaintiffs’ Motion to Proceed (ECF No. 19); DENYING IN PART and DENYING WITHOUT PREJUDICE IN PART Plaintiffs’ Motion to Amend (ECF No. 40); GRANTING IN PART Defendant’s Motion to Dismiss (ECF No. 26); and REMANDING THIS CASE to the Circuit Court for Frederick County.
. The Court will construe Defendant’s motion pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. See Hart v. Lew,
. The facts are recited here as alleged by Plaintiff, this being a motion to dismiss. See Ibarra v. United States,
. Although Plaintiffs’ Amended Complaint purports to incorporate certain exhibits—including the resolutions cited in this Memorandum—no exhibits were attached to the Amended Complaint. The Court thus references the original Complaint, to which the exhibits were properly attached.
. The first 6000 gallons metered in a quarter were billed at $1.54. Monthly gallonage greater than 6000 but less than 13,000 was billed at $2.13 perTOOO gallons; monthly gallonage greater than 13,000 but less than 24,000 was billed at $2.25 per 1000 gallons; monthly gal-lonage greater than 24,000 but less than 32,-000 was billed at $2.35 per 1000 gallons; and monthly gallonage greater than 32,000 was billed at $2.55 per 1000 gallons. (ECF No. 2 at 19.)
. The City observes that there is no “Department of Water and Sewer” in Frederick, Maryland; rather, the City maintains a Department of Public Works that includes subunits for such activities as water distribution and sewer collection. (ECF No. 26-1 at 8 n.3.) In the interest of consistency, and strictly for the purpose of resolving the pending motions, the Court will adopt Plaintiffs’ vernacular.
.Defendant attached minutes from the 2003 and 2004 meetings to its Motion to Dismiss. Although the Court’s analysis at the pleading stage is generally constrained to the complaint and documents incorporated therein, the Court may also consider matters of public record in testing the sufficiency of the complaint. See Haley v. Corcoran,
.In their opposition brief, Plaintiffs concede that Count II is a "reverberation” of Count I. (See ECF No. 33 at 29.) Cf. Mount Vernon Props., LLC v. Branch Banking & Tr. Co.,
. Plaintiffs pleaded unjust enrichment in the alternative, "should the validity of the Contracts be in , dispute.” (ECF No. 29 at 10.)
. Plaintiffs retained these six counts in their Amended Complaint, which was docketed on November 16, 2015. (See ECF No. 29.)
. With the exception of Country Hill, whose properties are rent-controlled. Plaintiffs admit that they passed along their water costs to their tenants in the form of increased rent. (See ECF No. 29 ¶¶ 36, 38). It is thus unclear to what extent Plaintiffs themselves were disadvantaged by the uneven application of the Multi-Residential Discount.
. Plaintiffs denounce the Board’s use of a budget vote to implement the Multi-Residen-tial Discount, rather than an independent resolution as the city code appears to prescribe. See Frederick, Md., Code §, 2549(b) ("The rates of water rent.. .shall be established by resolution of the mayor and board of aider-men.”). However, it is not clear what difference the Board’s use of a budget vote versus a freestanding resolution might have made: had Plaintiffs attended either of the open meetings at which the water-rate issue was addressed, they could have expressed whatever dissenting views they might have held. Moreover, assuming arguendo that the City breached a technical requirement of its code through its implementation of the discount, such a breach likely does not constitute a due process violation. See Riccio v. County of Fairfax,
. The fact that the -City responded promptly to Plaintiffs’ concerns in 2014 and ultimately revoked the Multi-Residential Discount suggests that the City’s procedures were more than adequate: as Plaintiffs themselves admit, "Resolution No, 14-11.. .effectively eliminated the unfair billing practices.” (ECF No. 29 ¶ 33.)
. The standard of review for a motion to dismiss pursuant to Rule 12(b)(6) is equivalent to the standard that the Court has employed in analyzing the futility of Plaintiffs’ proposed procedural due process count—i.e., the Court examines Plaintiffs’ well-pleaded allegations to determine whether Plaintiffs have stated a plausible claim for relief. See Bell Atl. Corp. v. Twombly,
. Plaintiffs derive this “true stated goal” from a line in Resolution No. 02-32, which indicates that the rates would be reviewed after roughly a year to insure adequate revenues and fair application. (ECF No. 2 at 19.)
. Plaintiffs'invocation of § 1981 is puzzling. That statute prohibits race-based discrimination in contract formation/enforcement and judicial proceedings, see Murrell v. Ocean Mecca Motel, Inc.,
.It is well-settled that a business entity may constitute a “person” under the Equal Protection Clause. See Santa Clara County v. S. Pac. R.R. Co.,
. At the Rule 12(b)(6) stage, while the Court takes as true all well-pleaded allegations in the complaint, it construes those allegations in light of the deferential rational-basis standard. "To survive a motion to dismiss for failure to state a claim, a plaintiff must allege facts sufficient to overcome the presumption of rationality that applies to government classifications.” Giarratano v. Johnson,
. Plaintiffs do not allege that any of these condominium owners are engaged in commercial real-estate investment.
. Plaintiffs observe that, in Resolution No. 14-11, the City acknowledged that the "only distinction” supporting its classification was' the "ownership structure of the buildings/units.” (ECF No. 33 at 25.) From this acknowledgement, Plaintiffs, surmise that Defendant "specifically acknowledged its disparate and discriminatory billing of water rates.” (Id.) Plaintiffs’ rather dubious characterization aside, City officials may well have concluded in 2014 that the. Multi-Residential Discount was no longer suitable policy. That is not relevant, however, to the Court’s analysis: the only question for purposes of equal protection is whether the discount constituted an irrational difference in the treatment of two similarly situated groups. Cf. Van Der Linde Hous., Inc. v. Rivanna Solid Waste Auth.,
. Plaintiffs separately complain that, apart from addressing the Multi-Residential Discount in its brief, Defendant has not "offered any basis... suggesting why the discount was implemented,” and Plaintiffs propose that they are entitled to "explore whether there was, in fact, a rational basis related to the furtherance of a legitimate government interest.” (ECF No. 33 at 28.) Plaintiffs apparently misapprehend rational-basis review. The burden rests on them to “negat[e] every conceivable basis which might reasonably support the challenged classification.” Van Der Linde Hous.,
, Having dismissed Count IV on substantive grounds, the Court does not address Defendant's separate theory that the claim is time-barred.
