Gene Cashman and Athena Sutsos v. City of Cotati, a Municipal Corporation

170(f)(3) 392; § Proc. also bars the 96-59, Rev. U.S.C. deductions 1996-2 C.B. Proc. because, 97-57, 1997-2 substance, gave the Addises C.B. 584. NHF of a gift partial interest that 26 C.F.R. argue The Addises property. 1.170A-1(h)(4) rely permits them § any receipt and conclude the NHF’s AFFIRMED. insubstantial and or services were

goods can The Addises

need not be disclosed. protection avail themselves of the 1.170A-1(h)(4). regulation

section rely on ... may “a taxpayer

provides acknowledg written contemporaneous 170(f)(8) ... provided under section

ment any goods or the fair market value

for Sutsos, Gene and Athena CASHMAN knows, services,” taxpayer unless “the Plaintiffs-Appellants, know, that such treatment is has reason to § 1.170A- 26 C.F.R. unreasonable.” 1(h)(4). to all the privy The Addises were COTATI, municipal CITY OF arrangement. split-dollar of the details corporation, Defendant- Indeed, wrote to the NHF Charles Addis Appellee. split. The propose the benefits Addises consideration had reason to know that the No. 03-15066.

they expected was substantial. of Appeals, United States Court complete denial consequences: Ninth Circuit. deduction transfers for 170(f)(8) Argued that when its Feb. 2004. provides

Section and Submitted provisions are not satisfied substantiation July Filed pay- deduction shall be allowed” “[n]o plain or more. The lan- ments of $250 provision of the forbids a deduction

guage Having satisfy

to the Addises. failed compliance

provision intended to ensure partial the rule of contribu-

with charitable quid pro quo payments,

tion deductions to avail

the Addises nonetheless seek pro quo rule and quid

themselves partial alternative for a de-

argue partial

duction. A deduction is foreclosed statutory language. The

by the deter- 170(f)(8)’stotal deni-

rence value of section comports

al of a deduction with effec-

tive administration of self-assessment system. self-reporting deductions

As Tax Court’s denial of 170(f)(8) proper, §

based on 26 U.S.C. to reach the Commis-

we have no occasion contention that

sioner’s alternative Hubbard, Radford, L.

R.S. Meriem and Johnson, E. Legal Harold Pacific Founda- Sacramento, tion, CA, appellants. for the E. Henry Donald R. Lincoln and Heat- er, Endeman, Lincoln, Turek & Heater LLP, CA, Diego, Jeffrey and A. San Wal- ter, Pistole, CA, Sonoma, for the Walter & appellee. ALARCÓN, BEEZER, and

Before W. FLETCHER, Judges. Circuit BEEZER, Judge. Circuit and Athena Appellants Gene Cashman owners, Sutsos, al- both mobilehome control ordinance lege Cotati, appellee City of Califor- adopted by (“the regulatory taking City”) nia effects of the Fifth and Fourteenth in violation Consti- Amendments to the United States motion for granting their tution. After entering judg- and judgment ment, then va- amended district court to Federal judgment pursuant cated that 59(e) 60(b), and Procedure Rules Civil court conducted The district respectively. City. judgment for a trial and entered appeal the and Sutsos Cashman vacating amending court’s orders findings judgment, as well as original following trial. and conclusions post-trial judgment vacate the coach is transferred the coach remains remand the district for reinstate- in place. in favor of original

ment of purpose stated of Ordinance No. Cashman Sutsos. is to “stabilize the rate of mobilehome park rental rates.” to the According Ordi- I nance, the stabilization of rental rates will 23, 1998, September City- On accomplish following: adopted Ordinance No. entitled the (1) prevent exploitation of the shortage Park Space Rent Mobilehome Stabilization spaces; vacant mobilehome park (“Ordinance No. Program 680” or “the Or (2) prevent excessive and unreasonable dinance”). adopted The Ordinance park space mobilehome rent increas- of anticipation No. of its repeal es; ordinance, then-governing rent control (3) rectify disparity bargaining of (“the 19.12, Chapter adopted power which exists between mobile- Ordinance”).1 operative provisions of park home residents and mobile- limit Ordinance No. 680 the annual rental owners; home park park mobilehome increases owners can (4) provide park mobilehome owners the lesser 6% or charge percent to of with a of guaranteed rate annual age change in the Consumer Price Index space accurately rent increase which (CPI). Proposed exceeding increases this reflects rate of inflation and in- subject amount to administrative re creases in expenses; their Ordinance, view. Unlike Ordi (5) provi nance 680 contains an explicit provide No. process ensuring mobi- vacancy regarding Vacancy fair, sion control.2 just lehome park owners a prevents park control mobilehome owners rate of reasonable return their charging from a new parks base rent or increas guaranteed cases where the ing existing rent a mobilehome annual space provided rent increase space ownership of when chapter insufficient; mobilehome this proves types 1. The 1979 Ordinance covered space space all of home whenever a lawful properties. rental Pursuant to a settlement vacancy purposes occurs. For the case, agreement in an unrelated chapter, space vacancy this a lawful required place question repealing defined as follows: 1979 Ordinance on the ballot for November (1) vacancy A space of the mobilehome oc- approved repeal; 1998. voters Ordi- curring because of the termination of nance No. 680 took effect on December the tenancy of the affected mobilehome tenant in accordance with Mobile- ; Residency home Law ... Ordinance, 2. Section 19.14.150 titled (2) vacancy space A of the mobilehome "VACANCY CONTROL AND DE-CON- arising voluntary from the removal of a TROL—ESTABLISHMENT OF NEW BASE RENT,” mobilehome from the mobile home provides, part, that: space by the affected mobilehome ten- (a) Except provided as otherwise in this ant. ... 19.14.150, park Sec. a mobile home charge owner shall not a new rent base (c) In the of a absence lawful or increase the rent for a mobile home space space, space park because that mobilehome owner has become vacant tenancy prohibited or the respect raising upon with from a sale space has terminated. A mobile- of a mobilehome site to tenant-to- park permitted owner shall be be or a current tenant. charge a new base rent for a mobile- in the are described Ordi (6) ests provide continued of a mobile- transfer through Specifically, nance. Cashman Sutsos (i.e., mobilehome on the home-on-site permits No. 680 claim mobilehome owner pad) to a new premium upon tenant exploitative rental increases prevent mobilehome coach cor sale his/her vacancy de- take when place which the increased value responds to prac- control is either effect rent control. This coach attributable to by park owners. tised premium, they argue, keeps the costs for (7) duration provide options and, therefore, incoming tenants the same to prospective tenancies prevents from the Ordinance adhe- oppressive to prevent tenants interests, advancing City’s including being imposed contracts sion increasing housing. They seek affordable upon new tenants. declaratory injunctive and relief.3 that Ordi- The district court concluded purpose the additional initially granted nance No. 680 has The district court Cash- maintaining affordable providing and man’s and Sutsos’s motion for elderly resi- housing lower income and Relying decision judgment. largely our dents. County Hon- City in v. and Richardson of (9th also contains several olulu, Cir.1997),

Ordinance No. 680 124 F.3d 1150 its findings support of fact in legislative “the an declares Ordinance court mo- findings These describe the adoption. in regulatory taking viola- unconstitutional Cotati, including market bilehome Takings of the Fifth tion of the Clause among mobilehome vacancy 0% rate Amendment,” judgment. and enters The lower income demo- the older and spaces; grants subsequently court district own- among mobilehome graphic common pur- City’s motion amend ers; with relocat- high costs associated 59(c), holding that suant to Rule mobilehome; and the success ing is provision Ordinance’s is ordinance. There 1979 stabilization unconstitutional, not the entire Ordinance. adoption of finding that “[s]ince also ordinance, the the 1979 rent stabilization grant City appealed requir- provisions its has construed cross-ap- judgment; Sutsos Cashman is, upon the ten- ing vacancy control: district court’s deci- pealed regarding vacating space, of a rental unit ant’s judgment. sion to amend tenant entitled to successor his/her appeals pending were While these charged to the vacat- previously same USA, Inc. v. opinion filed ing tenant.” (9th Cir.2000) 1030 224 F.3d Cayetano, and Sutsos own Cashman (“Chevron I”). City’s In to the response subject Ordi- parks Cotati 60(b) motion, district court re- Rule They bring instant nance No. 680. so that it we remand case quested that alia, that Ordinance alleging, action inter interpre- its earlier whether could consider facially unconstitu- No. 680 constitutes was erroneous of Richardson tation taking it does regulatory because tional grant I whether City’s light of Chevron inter- advance damages. City’s granted claims motion 3. The district additional Cashman's and Sutsos’s to dismiss Ordinance; therefore, judgment.4 relief the amended the statute for court, to the challenge began remanded the case district their facial to run with the which, turn, passage judg vacated its amended of the 1979 Ordinance. Id. proceeded ment to trial. Cashman question We review de novo the appealed. their and Sutsos We dismissed whether claim is barred the statute of appeal. pend dismissed the other We also Immigration limitations. Assistance Pro ing appeals as moot. ject Angeles County Los Federation five-day court conducted a (AFL-CIO) INS, 842, Labor v. F.3d in the of which it bench trial5 course heard (9th Cir.2002). We also review de expert testimony parties’s from both wit the question novo when the limi statute of The trial court concludes that nesses. begins tations to run. v. Orr Bank failed to Cashman Sutsos show America, (9th SA, NT & 285 F.3d likely No. creates or to Cir.2002). create a connection with the

resale of mobilehome coaches and that properly Cashman and Sutsos exist, even if a did Cashman and bring regulatory their takings claim under Sutsos did not establish it would in § Valley 1983. Hacienda Mobile Estates purposes stated terfere with the (9th City Morgan, 353 F.3d Ordinance. Cir.2003). § accruing For 1983 actions af applicable ter statute of limita II Levald, year. tions one Id. (citing Inc. Desert, findings of fact and conclusions of v. Palm trial, (9th Cir.1993)). following law the district court con- regulatory takings Facial (1) cludes that Cashman’s and claims claims Sutsos’s accrue on either: the date com (2) by are barred the statute of pensation courts; limitations. is denied state or says The district court that because Ordi- the date passed, the ordinance is if resort nance No. 680 has the “same effect and to state courts is futile. Id. The first date provisions” operative as the 1979 Ordi- is not relevant here because Cashman and nance, on compensation Cashman and Sutsos were notice Sutsos did not seek the from alleged regulatory taking of the under the state.6 City appeal prior 4. The filed its notice of to its ripe Amendment will not be deemed until the 60(b) yet Rule property motion because had not procedure owner has followed the opinion issued our in Chevron I. make a To just compensation. and been denied Hacien- 60(b) appeal Rule after a 655; Richardson, motion notice of has Valley, da 353 F.3d at 124 filed, proper procedure been “the is to ask the (citing F.3d at County Reg’l 1165 Williamson district court to indicate whether it wishes to Bank, Planning Comm’n v. Hamilton U.S. 473 motion, it, grant entertain the or 172, 195, then 3108, 105 S.Ct. 87 L.Ed.2d 126 move, appropriate for remand of case.” (1985)). Long Analysis, v. Bureau Econ. 646 F.2d However, we hold that the denial com- 1310, (9th Cir.1981), 1318 rev’d on other pensation ripeness purposes is for irrelevant 934, 468, grounds, 454 U.S. 102 S.Ct. takings theory where claim is based on the (1981). L.Ed.2d 242 ordinance does ad- Richardson, legitimate vance a state interest. trial, Judge 5. Prior to William Orrick H. re- 1165; 124 F.3d at see also Yee himself; Judge cused Saundra Brown Arm- Escondido, 519, 534, 503 U.S. 112 S.Ct. strong presided. (1992) (“As [premium 118 L.Ed.2d 153 this Ordinarily, provides adequate argument] depend where does not extent to procedure seeking just compensation, petitioners deprived which are of the econom- regulatory takings facial particular pieces claim property under Fifth ic use of their or substantively De Anza Ordinance No. 680 differ cites

The district court X, City’s Santa rent ordi Properties Ltd. v. from control (9th Cir.1991), Cruz, nance, 936 F.2d as es well. 1979 Ordinance challenged that where a proposition for the temporary roll tablished a freeze contains same rent control ordinance after maximum base rents back which ordinance, previous as a provisions by annually appeals a rent established run from the limitations will statute of contrast, No. board. Ordinance enacted, previous date the ordinance yearly provides specific limits on rental government long as the conduct so namely, of 6% the the lesser or increases — and the ef ordinances relation both Moreover, unlike the increase in the CPI. Ap plaintiff changed. has not fect Ordinance, No. con Ordinance case, to the instant proposition this plying vacancy De express provision. tains concludes that stat court finding the district court’s spite to run when the began limitations ute of “the 1979 Ordinance had effect” vacan was enacted. 1979 Ordinance interpreted and cy control because Cotati vacancy “contained Ordinance though ordinance it con enforced the those equivalent pro provisions provision, nothing in the tained such a and the No. 680” vided legislative purpose of the 1979 Ordinance expert ... testified that “[p]laintiffs’ provisions indicate Ordinance was same effect of provide sought specifically No. 680.” as the effect of Ordinance particular applica control. Whatever inapposite with this factually Ama De ordinance, it earlier does tion of the Ama, plaintiffs challenge De case. change the fact that Ordinance No. 680 a rent control ordinance enacted enactment.7 provisionally-distinct they file suit. years five before Finally, reliance on the district court’s argue that their claim ac- They at 1085. testimony of Sutsos’s county amends the Cashman’s in 1987 when the crues John, provision. misplaced. expert, to remove a sunset Dr. Michael St. ordinance reject plaintiffs’s argu- Dr. quotes Id. at 1086. We St. The district ment, provision of the noting that “the testimony effect of the that “the John’s challenge has [plaintiffs] which ordinance the same as the effect 1979 Ordinance was exactly the same since 1982.” remained No. 680 and Ordinance Ordinance Id. on the Ordi- ‘piggy 680 backs’ 1979 No. However, collo- following nance.” in De ordinance

Unlike the amended indicates, it clear is quy taken context Anza, separate, 680 Ordinance No. is only Dr. John testifies St. example, For 1979 new enactment. tendency ordinances two similar types all rental applied Ordinance of mobile- bargaining power 680 increase ap- No. properties while Ordinance park owners: coach owners vis-a-vis only to The terms of home plies mobilehomes. assuming con- particular petition Even the 1979 the extent to which these vacancy provision, implied an compensated, petitioners’s facial chal tained ers and Sutsos were on Cashman ripe.”); and the earliest lenge is San Remo Hotel 1998, 8, 1095, Francisco, August, when it was notice of San F.3d time in (9th 8) takings City argued point for the first (stating 199 facial Cir. complaint in an unrelat- support of a tenant’s advanced theo claim based on ac- filed this Cashman Sutsos ry challenged ordinance ed case. ripe the instant the is 28, 1999, year one later. July less than tion passed). WELL, Q: THE ASSUMING CITY that both interlocutory orders are non- appealable. No. TO [Ordinance ENACTED 680] THE DISPARITY BAR- RECTIFY We hold that interlocutory or THEY GAINING POSITION FELT ders that are nonappealable otherwise be ..YOU EXISTED WOULD AGREE merged come the final judgment. into THAT THE ORDINANCE HAS Erectors, American Ironworks & Inc. v. ACHIEVED THAT PURPOSE? 892, North Am. Corp., Constr. 248 F.3d A: THIS ORDINANCE PIGGY (9th Cir.2001). appeal from the “[A]n ON THE OLD BACKS ORDINANCE. judgment question final all draws earlier THIS ORDINANCE DOESN’T DO rulings pro non-final all orders and which THAT. IT’S ALREADY BEEN THAT judgment.” duced the Munoz v. Small WAY. IT’S BEEN THAT WAY SINCE Admin., (9th Bus. '79. Cir.1981). The district court’s va orders Q: THE ALL RIGHT. ORIGINAL cating amending judgment became ORDINANCE DID THAT? appealable it judgm when entered final A: THE ORIGINAL ORDINANCE jurisdiction ent.8 We have to review THE INCREASED BARGAINING whether the in reopen erred POWER OF THE RESIDENTS....” ing judgment. the first Hamilton-Brown expresses opinion Dr. St. no John as to the Co., Shoe Co. v. Bros. & 240 U.S. Wolf operative ordinances, provisions of the two 258-59, (1916); 36 S.Ct. 60 L.Ed. 629 control, including vacancy or the manner see also Edwin Raphael Co. v. Maharam regulate which rents. (7th Corp., Fabrics F.2d Cir. We reverse the district court’s judgment 1960) (“[A]n vacating order judg default that the statute of limitations bars Cash- ment interlocutory in character. How man’s claim. and Sutsos’s. ever, may it appeal reviewed final judgment case, in the same it since

Ill merged judgment.”); the final Moore, al., James Wm. et Moore’s Federal jurisdiction appellate A. haveWe over ¶ (2d ed.1995). Practice 60.30 vacating the district court’s orders amending original judg- B. The district court abused its discre- ment amending judgment tion granted City’s district court mo- judgment pursuant tion to amend noted, As the district court amend 59(e), Rule finding con- ed the to find unconstitutional provision trol No. only 680 uncon- vacancy provisions control of Or remand, stitutional. On court district dinance doing, No. 680. In so the district granted the motion City’s pursuant Rule “specific to court allegations finds 60(b), vacating judgment the amended and the complaint ... vacancy focus on the setting City argues the case for trial. The portion control of the Ordinance” and “the Although City attempts 60(b) 8. to granting characterize der merely a Rule motion[] vacating judg- district court’s order vacates the and leaves the case summary judgment, ment pending as a denial of an for further determination^] order 60(b) granting order a motion under Rule is is granting akin to an order a new trial.” Id. Collins, summary judg- distinct from the (quoting denial of Parks v. 761 F.2d (5th Baldridge, 1985)) (internal ment. Ballard v. quotations F.3d 1103-04 Cir. (9th Cir.2000). Indeed, omitted). ''[w]hen or- an an sell their mo- nance No. effects unconstitutional tenants could possibility void, unenforceable, The then taking, court and is thus premium.” at a bilehomes vacancy invalidating the allege, concludes invalid.” Cashman and Sutsos eliminate the Ordi- provision would alia, control that: inter pre- infirmities: “[A] constitutional nance’s 27. protected Mobilehome coaches vacancy exist because mium could Residency and the [the Ordinance] pre- provision of the Ordinance Law a substantial increase in realize park owners from the mobilehome vents to lo- price comparable relative coaches or a sells his her rents when tenant raising subject parks cated in Ordi- [the a without mov- new owner mobilehome nance], represents The increase Cashman ing it to a new location.” a right occupy space value of the is not so complaint their argue Sutsos indefinitely at below-market rents. limited; find- dispute the court’s also 28. a of Plain- When resident one vacancy premi- control and ing regarding parks his or tiffs’ mobilehome sells her ums, ig- claiming that district coach, premium re- mobilehome a is a tenant possibility that new nores the purchaser correspond- ceived from the live in a mobile- pay a would ing to the coach’s increased value attrib- increases are park where future rent initially controlled, if that tenant utable to the effect of [the Ordinance]. even new higher a rent than did required pay is allegations complaint’s regarding The tenant. the incumbent constitutionality of Ordinance No. 680 do deci vacancy review the district court’s hinge on the existence of con 59(e) motion to City’s on the Rule provision. sion It any particular other trol discret judgment for abuse of amend the true that absent control mobi- Oakland, ion.9 v. Zimmerman park owner can increase lehome Cir.2001). (9th An erro 255 F.3d charged to a new tenant. amount of rent of the facts or law consti neous view However, consistent with Cashman’s K.V. Mart tutes abuse of discretion. allegations, an tenant incumbent Sutsos’s v. Food and Commercial Co. United can nonetheless selling his/her Union, 324, 173 F.3d Int’l Local Workers beyond any above and extract Cir.1999). (9th 1221, 1223 security increase based such rental living park in a mobilehome where first cause of action for complaint’s fu by the rental increases are limited ture declaratory “[p]laintiffs relief states that government.10 that Ordi- judicial desire a determination ei- erroneous under appropri of Ordinance No. 9. has not addressed the This court court’s ther ate standard of review for standard. 59(e) granting a motion to Rule decision responds that mobilehome amend, based, part, least which is just easily upon raise the rent owner can hold that question of law. Our sister circuits higher to a than the sale of mobilehome novo, d& not for an a motion reviewed such level, this permitting him to extract market See, e.g., Natural abuse of discretion. Pioneer on the lack of future rent based USA, Allied, Paper, Inc. Resources Red Br. 29. The overlooks increases. Cir.2003); 818, (5th v. Fideli 820 Hansmann (cid:127) aspect control the mobile- crucial of rent .in 760, (6th Serv., 326 766-67 ty Inv. Inst. F.3d i.e., ownership separate park Cir.2003); 247 Corp., Volvo Car F.3d context— v. Perez mobilehome, the with 303, (1st Cir.2001). of land and We need not 318-319 convey ownership having ability to tenant we question because hold that resolve this These circumstances of the mobilehome. con court's decision that district park possible for both tenant provision remainder make it trol is severable from the 896 substantially

We conclude district reduced fails to advance amending judgment creating court’s order state’s interest or maintain- II, ing view of the com affordable 2004 housing. based an erroneous Chevron * 720175, Richardson, 7; an plaint and abuse of discre WL at 124 F.3d constitutes 1166; tion. 224 F.3d Chevron at 1040 cf. (“[T]he absence of a pre- mechanism that misapplied C. The Chev- vents a transfer [does not] neces- I when it vacated the amended ron sarily destroy[ constitutionally-re- ] the judgment on remand quired connection” where other factors unavailable) (em- may make a Cashman and Sutsos maintain that the added); phasis see v. City also Yee of in vacating district court erred the amend- Escondido, 519, 530, 112 503 U.S. S.Ct. 60(b). ed judgment pursuant Rule (1992) (the 1522, 118 L.Ed.2d 153 exis- deci We review the district court’s a premium “might tence of have some judgment pursuant sion to vacate bearing whether the ordinance causes 60(b) Rule de novo. See Fireman’s Fund regulatory taking, it may as shed some (9th Stites, 1016, Inc. Co. v. 258 F.3d light on whether there is sufficient nexus Cir.2001). Although usually we review a between the effect of the ordinance and pursuant district court’s decision to Rule advance”). objectives it is supposed to 60(b) discretion, of Al Casey abuse v. original opinion granting summary (9th Inc., 1254, bertson’s F.3d Sutsos, judgment for Cashman and Cir.2004), apply we our de novo standard district court relies on Richardson v. here, where, judge cases as “the district & Honolulu hold that Ordi- considered afresh his earlier decision to of unconstitutional, nance No. grant judgment.” Fireman’s law, Co., because”[n]othing matter in the (citing Fund Inc. 258 F.3d at 1020 1047, language prevents the Ordinance a mo- v. City, Balint Carson F.3d (9th Cir.1999) (en banc)).11 capitalizing bilehome owner on his by selling below-market rents his mobile- A rent control ordinance ef premium.” This, home for a the court taking fects an it fails to unconstitutional states, prevents Ordinance 680 from No. in legitimate advance a substantially furthering City’s interest Tiburon, Agins terest. v. City 447 U.S. rent, in maintaining lessening affordable 255, 261, 100 S.Ct. 65 L.Ed.2d 106 inequality of bargaining power permit- (1980); Lingle, ting landlords a reasonable rate of return. (9th 2004) Cir. April WL (“Chevron II”). ordinary Unlike subsequently granted district court ordinances, City’s an ordinance that per motion a memorandum opin- mits to capture pre stating incumbent tenants ion grant the court’s inclination to present mium based on value of the relief from the in light amended case, capture part premium. owner In this little turns on the standard capture part tenant will apply. review The district court's Rule through price; an increased mobilehome sale 60(b) and, analysis legal questions turned on through owner increased land rent. definition, an erroneous view of the law is complaint Cashman’s and Sutsos's claims abuse discretion. Cooter & Gell v. Hart ability capitalize any that the of the tenant to 384, 405, Corp., marx 496 U.S. 110 S.Ct. value reduced rent effects a (1990). 110 L.Ed.2d 359 regulatory taking. agrees. to at The According 338. district Faced opinion of our Chevron I. evidence, court, conflicting expert I no makes clear that with Chevron to then- on the “principles relating and Sutsos failed meet court relies to Cashman summary judgment where, because premiums,” concluding as in burden condominiums, to present any evidence as they “did not the context of there is sep- No. [Ordinance 680] ownership housing likelihood that arate of the land and that could involved, would create sales government-controlled unit captured by ten- be mobilehome transferability to future right ants,” fact, “any or that as matter rent, incumbent will controlled owners interfere with such sales would to a premium upon able command the sale of the Ordinance.” purposes unit. housing F.Supp. of their at 339. district court holds that The original opinion court’s cor- pos- appropriate because this law; rectly the court misinter- applies the sibility premium prevented aof Hawaii’s opinion in I. prets our Chevron substantially rent control ordinance 1. A rent control ordinance that does affirm, Id. advancing purpose. to provide not on its a mechanism face holding that absence of a mechanism “[t]he capture is un- prevent the prevents capturing lessees from constitutional, law, absent as matter of present net value of the reduced land rent render- evidence externalities sufficient premium, in the form of a that the means ing premium unavailable substantially will not further its In Richardson v. goal creating owner-occupied affordable Honolulu, facially challenge land owners 1166; housing.” Id. at see also id. at rent control that limits Hawaii’s ordinance 1164-65. to ground increases in rent due the owners to in an effort reduce units. 802 land under condominium gasoline prices, retail Hawaii enacts an (D.Haw.1992). F.Supp. 329-30 com- capping gasoline ordinance the rent the ordinance to combat legislature passed panies charge can retail lessee-dealers of rates, inequity excessive increases lease F.Supp.2d service 1004- stations. power, and the bargaining deleterious (D.Haw.1998). The rent is in- reduced increasing effect of lease rentals on exist viability of protect tended to the continued Id. Like ing tenants. at 329. stations, leading independent parks, ordinarily involve lesse.e-dealer condominiums and, turn, to a less market concentrated is, ownership the land under dual —that Chevron, prices. Id. at 1010. lower retail is owned some neath condominium alleges that the ordinance company, an oil- one other than the condominium owner. it does regulatory taking because effects a The rent control ordinance Id. substantially advance Hawaii’s interest not owner-occupants sell Richardson allows prices. Chev- lowering gasoline retail subject to the con their condominiums argues that this the case for expert ground long trolled rents the new ron’s so (1) cap following reasons: the rent also intends be an tenant owner-occu actually independent lessee- pant. argue discourage Id. at 330. The landowners dealers, increasing concentration rais- the ordinance does (2) lessee- prices; any it retail benefit to ing further Hawaii’s interests because allows prices retail premium on in lower owner-occupants capture dealers will result can condominium, thereby existing fail lessee-dealers of their because the sale form Id. the value of the reduced ing reduce the costs new owners. a of their premium wrongly of sale lease- district court that “the concluded (3) holds; may companies oil increase prevents absence of a mechanism that a in prices up wholesale make for the loss premium necessarily destroys transfer income, thereby removing rental the possi- constitutionally-required connection.” Id. capture by bility premium added). aof lessee- (emphasis words, In other prices. retail dealers and lower Hawaii’s premium possibility of a not does render expert disputes analysis of Chevron’s an ordinance unconstitutional where other expert points. on all three may prevent premium external factors a from existing altogether. is This the case grants summary judg-

The district court in Chevron I. There no dispute is that Chevron, that, holding ment for under pre- case that Richardson, capture lessee-dealers a the absence a mechanism mium, available; parties both concede prevent capturing from lessee-dealers things remaining that all premium automatically prevents equal they will. the state substantially Remand nonetheless furthering appropriate its is to es- interest prices, rendering lower tablish the that companies retail the ordi- likelihood oil nance unconstitutional. Id. at 1011. On will their prices increase wholesale to re- appeal, judg- we vacate the district court’s gain thereby what lost in rent and ment. Chevron at 1042. As an eliminate the of any premium existence matter, initial carry we state Therefore, lessee-dealers. I Chevron cap proving burden of does conflicting holds that the expert evidence legitimate in- advance a genuine creates issues fact re- material terest, show, by has to a prepon- Chevron garding whether the cap will in fact evidence, cap derance of the that the rent (“Wheth- lower prices. retail Id. at 1042. not reasonably objec- related Hawaii’s er, extent, and to what Chevron will raise lowering tive of retail Id. prices. at 1041. price its wholesale of fuel compensate This in requires finding cap turn that the rent, whether, for lost and to what will not fact lead to lower Id. prices. extent, capture incumbent dealers will (“The possibility mere prices [retail value of the capped rent the form of a satisfy will remain the does not same] ... premium ques- remain as unanswered burden.”). Chevron’s Unlike Richard- tions.”) son, reason, disputed there are issues 2. The wrongly district court vacated of fact regarding gasoline market and judgment the amended where the Ordi- the parties’s relationship. multi-factored prevent nance does not on its mobile- face (“[0]ur Id. conclusion in Richard- capturing premium owners from son judgment appro- [that where there evidence sufficient priate] was based on the district court’s preventing possibility externalities findings incumbent owners will altogether charge price and that same.”). vacating the amended housing will remain the Remand district court necessary concludes that I to have a better understand- requires ing of Cashman general, produce and Sutsos to gasoline market empirical e.g., competitiveness evidence on the the market for likelihood rights elasticity lessee-dealer and the tenants in Cotati will gasoline. demand for Id. be able to premium, at 1040. Re- sales as a necessary fact, mand any is also to determine matter and that such whether under the a premi- circumstances will interfere purposes with the um will all. exist at note that Ordinance. City’s creating mines the interest in on a misunder

This is based conclusion in I that standing maintaining housing. a statement Chevron Richard of affordable that “findings son, on Richardson is based in Accordingly, 124 F.3d at 1166. Cash- charge a dealers will cumbent man to and Sutsos entitled housing remain price of will and that the judgment on facial unless their claim in (emphasis at the same.” F.3d City of presents sufficient evidence exter apparently court original). The district nal that prevent factors will the existence require plaintiff to a a reads this —even a premium altogether. of challenge facial estab premium-based —to incumbent by empirical evidence that lish only evidence the sub likely affected tenants in the area will report prepared is a 1990 mitted particular under capture a to expert an that who stated mobile- Tahoe-Sierra challenged. ordinance Cf. (which County in owners Sonoma Council, Reg'l Inc. Tahoe Plan Pres. Cotati) are so distrustful of rent includes (9th Cir. ning Agency, F.3d a pay will less for mobi 2000). However, court the district is than for not under rent lehome one is require, does not nor it Richardson original opin control. The district court with, To the con faced such evidence. is correctly ion finds such evidence above, relies trary, noted Richardson genuine to a insufficient create issue premi only “principles on the economic takings claim un material fact a facial ums” finds that the control ordi and der Chevron I. On a fa Richardson and nance, conjunction ownership with dual claim, court to look takings cial a is transferability will “al ownership, general scope to ordinance’s domi ” owner-occupant “enable to ] low and [ features, application its specif nant not charge premium.” F.Supp. a ic Tahoe-Sierra Pres. circumstances. added). the circum (emphasis Under Inc., Council, F.3d at 774. Unlike the stances, proof more definite is re disputes in which are over the Chevron I, 224 F.3d at 1040 quired. Chevron Cf. generally operation gasoline market (remand appropriate to determine likeli companies prevent oil will whether companies adjust pricing will hood that oil existing altogether, from of rent control law and to offset benefits mistrust of some would-be mobilehome premium for prevent the existence of deal does not purchasers Sonoma ers). impact pertain to “dominant” case, In this the district erred Ordinance. requiring Cashman and Sutsos sub dis type empirical mit evidence court’s or- conclude that We on sum to meet their burden cussed above amended vacating der Richardson, mary Like judgment. interpretation an erroneous based on dispute No. 680 there is no that Ordinance I. No. 680 does not prevent does not on face capturing from prevent tenants incumbent capturing premium. There tenants premium. Ordinance does sub- separate ownership the mobilehome interests, City’s in- stantially further the land, underlying con coaches and maintaining cluding that of affordable rent, ability trolled of incumbent district court housing. remand subject tenants to sell their mobilehomes original judgment. reinstate this creates the controlled rent. This AND REMANDED. REVERSED possibility premium, which under- FLETCHER, today’s A. But tially WILLIAM Circuit advances” test. under Judge, dissenting: holding, trigger what was the “sub- stantially has advances” test itself become return, unhappily, this case today’s holding, the test. Under there respectfully emphati- rent control. I but possibility tenants cally dissent. premium, part premium, or even of a that wrong turn in We took a Richardson v. in possibility and of itself a rent renders Honolulu, 124 F.3d of control ordinance unconstitutional. (9th Cir.1997), 1150, 1164 we held where actually captures

that when a tenant I. Background Procedural resulting from a rent control statute, the statute is an unconstitutional Cotati, of in located Sonoma regulatory “substantially unless it taking County, California, of north San Francisco legitimate furthers a state interest.” We has in Bay, controlled rents home mobile wrong path continued on the in Chevron parks since 1979. In adopted Cotati USA, (9th Cayetano, Inc. v. F.3d 1030 680, amending previous the rent Cir.2000) (Chevron I), where we concluded continuing control ordinance but the same may that when a tenant possibly general Plaintiffs-Appellants scheme. premium, “substantially the furthers” test (“plaintiffs”) Cashman and Sutsos mo- own must be for trial. satisfied remanded parks in In they bile Cotati. (now Id. at stating the test as brought challenge a facial to Ordinance “substantially whether the statute ad 680, contending regulatory that it effects a interest”) (em a legitimate vances taking the violation of Due Process added). phasis persisted on that Clause the Fourteenth Amendment. wrong path in Chevron Inc. Lin USA reading based on its of Rich (9th Cir.2003) (Chevron gle, 363 F.3d 846 ardson, the court granted district sum II), judgment where we affirmed the mary judgment to It plaintiffs. held that court, concluding the district its factu in the absence of a mechanism in Ordi finding al the control statute did 680 preventing nance mobile home park satisfy “substantially the advances” capturing premium, tenants from clearly test was not erroneous. F.3d entire ordinance effected unconstitu wrong path at 857. desert We now taking. tional district subse Richardson, I, taken in Chevron and Chev quently amended II, its under Fed only yet ron wrong to take another 59(c), eral Rule of holding Civil Procedure path. unconstitutional the vacancy control I disagreed panel with Chev- both portion entry Ordinance 680. After the I, ron cases. See Chevron 224 F.3d at of the district judgment, court’s amended (W. Fletcher, J., concurring I, in we decided Chevron which re II, judgment); at Chevron manded the district court for a determi (W. Fletcher, J., dissenting). But nation at trial whether rent control stat majority in today’s case were faithful to “substantially ute legitimate advance[d] cases, those I would concur because I, state interest.” Chevron F.3d (or were) the law the circuit. 1040, 1042. However, majority today refuses to apply the down, Chevron cases. those After Chevron I Under was handed cases, possibility of a premium capture summary judg- district court vacated triggered application Doing in- the “substan- ment this case. as we had tenancy, capitalized court to do value the differ- the district structed to deter- the rent-controlled rent and court held a trial ence between the district satisfies the This open-market phenomenon Ordinance 680 rent. mine whether After a premium.” test. “substantially “capturing advances” known trial, during which evidence was five-day Depending on the circumstances and the sides, the by experts from both presented particular nature of the rent control re- against plaintiffs. may court held to capture able gime, a tenant some, all, premium resulting even First, plain- court held the district control. barred statute tiffs’ claims were ordinance was limitations because majority there is When writes manner as later- the same applied of possibility “the its use of premium,” Thus, the 680. one- Ordinance enacted important. “a” is the indefinite article begun to limitations had statute of year “The pre- the entire premium” would mean Second, held that run in 1979. the court from control. con- resulting By mium run, had not of limitations the statute trast, majori- the “a by as used premium,” merits. It failed on the plaintiffs’ claims part any ty, premium. the The means aby had not shown plaintiffs held that that of the majority possibil- holds because that the evidence Ordi- preponderance might home ity capture that mobile owners likely premium. nance 680 is create is, premium the premium” part “a —that held, further, even if a did It plaintiffs from Ordinance resulting 680— exist, by prepon- not plaintiffs had shown “are entitled to on premi- such a of the evidence that derance City presents claim the their facial unless the from ordinance sub- prevent um would factors that sufficient evidence external advancing legitimate such stantially prevent the of a existence tenants, including protecting as purposes words, Id. at In altogether.” other 899. from exces- elderly people, low-income and that, requires order to majority rent increases. sive constitutionality of sustain the Ordinance mo- prove Cotati must defendant first holds that appeal, majority On any bile home owners would begin to limitations did not the statute of result of the ordi- part of a as a until passage run Ordinance that there majority nance. The concludes question, it is a I do Although 1998. close material fact as to genuine is no issue of majority point. on this quarrel with cap- mobile home owners would whether majority The next holds that premium, ture of such a any part amending vacating and then court erred the district court’s therefore reinstates majority The con- summary judgment. I pre-Chevron summary judgment that Or- possibility there is “the cludes dinance 680 is unconstitutional. Maj. op. Ordinance 680. premium” under here, “premi- In the sense used 899. Parks II. in Mobile Home Rent Control conferred on a capitalized um” is value in mobile home If Residential rentals of rent control. tenant virtue ordinary residen- tenancy parks are different from price of a below control lowers ordinary residential tial comparable rentals. open-market price rental, apartment or landlord can owns tenancy, existing if an tenant sub- house, house apartment rents that or or sell a rent-controlled lease otherwise brings to the tenant existing may be able to to tenant. tenancy, the tenant or own only his her obtain, apartment house or selling price of the part and, at end personal specifically effects control ordinances tailored to away tenancy, personal those effects. parks. takes mobile home Approximately 100 apart- If a raises the rent jurisdictions landlord in California have ordinances ment or and the tenant moves house out to of this kind. Most such ordinances are rent, higher avoid the the tenant incurs like the ordinances has Cotati had since only expense moving those effects to consistently has Cotati limited rent apartment different or house. tenants, and, existing increases for with some exceptions, limited rent increases for contrast,

By in a typical mobile home purchasers buy existing who tenants. rental, park “park” the landlord is the 680, adopted by Cotati in park owns owner. The owner frequency limits rent increases in to once a land, on which the “pad,” mobile home year amount to the lesser of 6 pad sits. The tenant rents but owns percent change or the in the Consumer name, Despite their mobile home. mo- 19.14.004(a). § Price Ord. Index. Under not, fact, bile They homes are mobile. “vacancy provision control” the ordi- site, off put constructed wheels to nance, an existing when tenant sells his transported, and towed the site tenant, mobile to a new placed. difficulty where will be permitted owner is not to raise the rent. and very expense of moving substantial a 19.14.150(a). However, §Ord. if a resi- placed mobile once it home has been on its dent voluntarily is evicted or pad removes that it is never his means almost moved park, home from the the landowner may thereafter. establish a new base rent for the next is, A mobile home owner—that a tenant tenant. Id. in a park in mobile therefore —is very economic different situation from an Majority III. The Errs in Reinstating ordinary tenant. residential Because of Judgment Summary Plaintiffs’ prohibitive expense almost involved in home, moving a mobile a mobile home Assuming that our earlier decisions in park freedom, owner has considerable ab- Richardson, /, and Chevron II control, sent rent to raise rents all of correct, are majority errs reinstat- existing his her To state it in tenants. ing the summary district court’s terms, economic if park owner raises that Ordinance 680 is an unconstitutional existing rent on an who tenant wants regulatory taking. In reinstating that home, to living continue in the mobile judgment, majority writes: likely pay tenant rent any increase only The City evidence the submitted [at capitalized whose cost than is less the cost summary judgment] report is a 1990 Or, of moving the mobile home. prepared for the an by expert who park owner raises an the rent when exist- stated that mobilehome owners Sono- ing tenant home to sells mobile a new (which Cotati) ma County includes owner, price paid for the mobile home so distrustful of rent control that likely will by be reduced amount of pay less a mobilehome than for capitalized value the rent increase. To one that is not under rent control. The terms, it in colloquial absent original opinion correctly district court control, owner gouge existing can finds that such evidence is insufficient to tenants. create genuine issue of material fact result, many jurisdictions As a in Cali- on a takings facial claim under Richard- adopted fornia and elsewhere have son and Chevron I. On a facial takings substantially mine only to the whether Act ad- claim, to look a court is vances, scope relationship dominant or bears a reasonable general ordinance’s to, features, specific lowering gasoline application the State’s interest granting mistrust district court prices, the erred [T]he circumstances.... judgment.” 224 F.3d at purchasers 1042. some would-be court in County pertain does not Based on Chevron in Sonoma entirely impact of the Ordinance. this case was correct to vacate its the “dominant” a trial summary judgment and hold majority several The makes Id. the factual issues of whether a resolve mistakes. by created First, the na- majority misdescribes that ordinance whether A challenge. facial successful ture of a legitimate state purpose. advances an challenge to ordi- constitutional facial plaintiff show that requires Third, nance majority mischaracterizes the incapable constitutional the ordinance the district court on sum- evidence before any under circumstances. application mary judgment. It states that defendant Salerno, v. 481 U.S. “report” United States into evidence put Cotati one (1987); 2095, 95 L.Ed.2d 697 report genu- 107 S.Ct. and that this did create Seattle, Cogswell majority fact. ine issue of material (9th Cir.2003). plaintiff has the empirical referring extensive 1990 unconstitutionality. proof Lewis, Id. Dr. study Stephen burden of conducted this estab- following at 813. Instead of Impact “Economic of Rent Con- entitled law, majority lished concludes trols Mobile Home Resale Prices any part Lewis, possibility” “the Dr. and Cotati.” Sonoma Cotati, premium means the defendant who at trial for con- later testified has plaintiff the burden of no rather than as a cluded that there constitutionality. ordinance’s in proof of the rent Cota- result of mobile home majority, Indeed, to the the defendant’s According study, to Lewis’s according ti. Dr. there are “external burden is to show that to control in subject homes rent mobile prevent the of a that will existence factors at a discount rather Cotati sold substantial premium altogether.” than Dr. Lewis summarized premium. study of his as follows: results

Second, majority Chevron misapplies I, pad mobile home rents sub- possibility I. In was a there When ject rent controls and when these the tenants. did to premium capture by value, the market eco- not, rents are below possibility, require of that because theory rent dif- suggests pad nomic external factors that defendant show capitalized into the re- ferentials will be altogether prevented have exis- would subject to of mobile homes prices hold that sale premium. tence Nor did we in The data examined showing by rent controls. in the of such absence the conclusion that study leads to plaintiff was entitled to sum- this defendant the County and Rather, controls in Sonoma mary remanded to judgment. in Rohnert specifically if Cotati and court for trial determine more the district impact expected have not had the “substantially legit- Park the statute advanced Using prices. resale on mobile home imate interest.” We wrote that “[bjecause and from several sources standard factual is- data resolution these it has been deter- techniques, statistical of a sues[about existence controlling for other factors after necessary to deter- mined benefits to tenants] subject to rent From an parks housing point mobile home affordable view, it average appears for less in communi- [this control have sold control, subject ty], vacancy even with than those not controls.... initial ownership pro- costs mobilehome subject homes to rent controls Mobile purchasers ... spective lower desirable than uncontrolled ones are less in than these costs the absence vacan- of uncertainties and risks asso- because cy control. programs.... with rent control ciated added.) (Emphasis is clear that Sonoma [I]t majority properly If the had allocated subject mobile homes rent controls do plaintiffs’ the burden of proof facial at at a but rather sell properly attack it had discount. Claims that such substantial properly followed Chevron and if it had premiums exist are unwarranted and characterized put the evidence the rec- merit. without by judgment, Cotati summary ord it added.) (Emphasis would have concluded that the district Finally, majority misstates the rec- correctly summary judg- vacated the saying pre- ord in that the evidence and sent case At ment this to trial. sum- by sented Cotati at mary judgment, Dr. Lewis Dr. Baar study. presented was Dr. Lewis’s Cotati that, presented competent evidence if be- Baar, study by Dr. Kenneth addition lieved, compelled no pre- a conclusion that later at trial Cotati. who also testified was, be, mium or would created mobile Dr. Baar studied the effect of park control Cotati. Because park in a controls mobile home rentals produced Cotati sufficient evidence cre- community in different California. Vacan- genuine fact, ate a issue material cy ability limit controls required district court was under Chevron pad owner to increase rent when a mobile deny summary judgment proceed I to home owner sells the mobile home. Such to trial. have controls been a feature of Cotati mo- bile home rent control both before IV. Judgment Defendant’s after adoption after the of Ordinance Dr. Trial Should be Affirmed vacancy Baar concluded that a control fea- In reinstating the district court’s sum- a ture of rent control ordinance did not judgment, panel mary majority implic- the is, create a it does not —that itly the concludes that evidence at trial

produce higher price resale for mobile enough justify judgment was not to sus- Dr. home owners. Baar wrote: taining constitutionality the of Ordinance a purely From perspective, theoretical because, say I 680. this Cotati although resulting the reduced rents from vacan- presented more evidence at than trial at cy might precisely by control offset summary judgment, that evidence was to the increase in of the value the same effect as Lewis and Baar fact, vacancy space. controlled In already presented by studies Cotati at however, markets for the mobile- summary judgment. majority If the space operate and the mobilehome willing to of disregard the evidence fashions, in substantially different so studies, equal- and Baar it Lewis would be that of effects control do not ly willing disregard to the additional evi- foregoing follow the theoretical model. dence. This additional evidence consists of empirical by

four studies conducted James 905 See, e.g., v. Brabant, apprais- Agins lations. Tibu real estate professional ron, 255, 261, 2138, 100 447 U.S. S.Ct. in Sonoma er, actual mobile home sales (1980) zoning (upholding L.Ed.2d 106 County. adjoining Napa Mr. County and “substantially ordinance because it ad that from these studies Brabant concluded legitimate governmental goals”); vanced] by created Ordinance no 385, 374, City Tigard, Dolan 512 U.S. at trial evidence presented Plaintiffs (1994); 129 L.Ed.2d 304 S.Ct. Hirsch, Dr. Robert through Dr. Werner Comm’n, 483 Nollan v. Coastal California Edelstein, Patrick Neet. and John Howev- 825, 834, U.S. S.Ct. L.Ed.2d er, as a matter of the district court found (1987). experts’ that studies and plaintiffs’ fact Richardson, ap- In decided we testimony less believable than those were “substantially advances” to plied the test Baar, Lewis, Dr. Dr. and Mr. Brabant. rent invalidate a control ordinance under implicit disagree majority’s I with which concluded that the tenant was we by presented the evidence conclusion that capture to re- actually able support was insufficient to dis- Cotati at sulting from rent control. See 124 F.3d uphold I judgment. would trict court’s (“Incumbent occupants owner who court after trial factfinding of the district occupy who sell those intend standard, clearly as under erroneous premium for the apartment charge will factfinding of the district upheld we living in a condo- benefit of rent controlled II, 363 F.3d at after trial Chevron court price housing ultimately minium. The I affirm same.”) added). and would (emphasis will remain the later, the district court. In three went years Chevron we Richardson, that beyond holding the “sub- A Activism Return Judicial V. applied must be stantially test advances” to the control at issue because statute in the that economic We learned 1930s premium capture. “possibility” by po- done better regulation generally “sub- (applying See legislators than litically accountable stantially advances” test because of say I judges. regret life-tenured “stipulated possibility [a tenant] unlearning pain- the Ninth Circuit value of the de- be able to fully lesson. learned premium.”). in the form of a creased rent constitutional There are two different II, just year, upheld last conceivably apply to rent tests that could factfinding clearly erroneous is the “rea control ordinance. first “substantially ad- ordinarily applied sonableness” test satisfied, and had not been vances” test See, e.g., Pen price control statutes. was unconsti- that the rent statute Jose, 1, 11, 485 U.S. nell v. San (“Based on at 857 tutional. See F.3d (1988) 849, a (upholding L.Ed.2d S.Ct. trial, the dis- all the adduced evidence it was not rent control ordinance because that rent control trict court concluded [the “arbitrary, discriminatory, or demonstra a not advance statute] policy legislature the the bly irrelevant to price gasoline. in the retail reduction adopt”) (quoting free to Permian Basin findings conclu- The factual court’s Cases, 747, 769-70, Area Rate U.S. with the views sions law are consistent (1968)). The S.Ct. 20 L.Ed.2d 312 clearly experts the parties’ “substantially erroneous.”). advances a today majority second the Finally, ordinarily a legitimate “possibility” interest” test that holds that mere of the capture part regu- land use tenant could applied zoning other enough from a rent control ordinance is It is a very long way from this passage majority’s holding render ordinance unconstitutional. It Yee to the this case. summary judgment say, a The Court Yee did not then reinstates even in a case where there was an actual unconstitutionality premi- despite evidence um, “substantially the Nollan ad- premium actually resulted, no record that vances” apply. test would Nor did result, or would from Ordinance 680. say Court in Yee there where was possible majori- for the only basis only the possibility premium, of a the “sub- ty’s is dictum in Yee v. holding stantially apply. advances” test would Escondido, U.S. S.Ct. Nor, finally, say did the Court in Yee (1992), which 118 L.Ed.2d 153 the Su- possibility of a alone would preme upheld a mobile home Court render a rent control ordinance unconstitu- against takings a chal- ordinance tional, regard “substantially without to the lenge. upheld Court ordinance advances” test. against physical takings challenge, but Yee, Based on a slender hint in we have consider refused to whether ordinance constructed a new doctrine out of whole regulatory taking. constituted cloth. interpretation This is the Ninth noting course of that it consider- alone; I Circuit’s no have found case out- issue, ing regulatory takings the Court side our circuit that reads Yee as the ma- wrote in dictum: jority decision, it. today’s reads After of the rent control [T]he effect ordi- possibility any part of a nance, coupled with the restrictions on premium by a tenant a rent renders con- reject owner’s freedom to new trol ordinance unconstitutional. Even if tenants, significantly increase qualified two experts present evidence that value of the mobile in- home. This is, fact, there premium, in actual no normally only creased value benefits plaintiff is entitled to possession at tenant in the time the rent the ordinance is unconstitutional. imposed.... control is Petitioners are respect With all my colleagues, due this citing correct in the existence of this simply cannot be the law. premium as difference between the alleged effect Escondido ordi- that of ordinary

nance apartment

rent control statute.... [Petitioners

contend that Escondido ordinance transfers wealth incumbent Tony BARTEE, Plaintiff-Appellant/ mobile home owner. This might effect Cross-Appellee, bearing have some on whether the ordi- regulatory nance causes taking, as it light

may some shed whether there is AMERICA, MICHELIN INC., NORTH nexus sufficient between effect of corporation, a New York Defendant- objectives ordinance and the it is Appellee/ Cross-Appellant. supposed to advance. See Nollan v. 03-6071, Nos. 03-6086. Comm’n, Coastal [483 U.S. California Appeals, United States Court of (1987)]. 834-35 But it has nothing to Tenth Circuit. do with whether the ordinance causes a physical taking. June Id. at 112 S.Ct. (emphasis

original).

Case Details

Case Name: Gene Cashman and Athena Sutsos v. City of Cotati, a Municipal Corporation

Court Name: Court of Appeals for the Ninth Circuit

Date Published: Jul 15, 2004

Citation: 374 F.3d 887

Docket Number: 03-15066

Court Abbreviation: 9th Cir.