LYNDSEY BALLINGER; SHARON BALLINGER, Plaintiffs-Appellants, v. CITY OF OAKLAND, Defendant-Appellee.
No. 19-16550
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
February 1, 2022
24 F.4th 1287
Before: Richard R. Clifton, N. Randy Smith, and Ryan D. Nelson, Circuit Judges. Opinion by Judge R. Nelson
Appeal from the United States District Court for the Northern District of California. Haywood S. Gilliam, Jr., District Judge, Presiding. Argued and Submitted October 22, 2020. Submission Withdrawn July 16, 2021. Resubmitted January 25, 2022.
SUMMARY*
Civil Rights
The panel affirmed the district court’s dismissal of an action brought pursuant to
Plaintiffs alleged that the relocation fee is an unconstitutional physical taking of their money for a private rather than public purpose and without just compensation. Alternatively, they claimed that the fee constitutes an unconstitutional exaction of their Oakland home, and an unconstitutional seizure of their money under the
The panel held that although in certain circumstances money can be the subject of a physical, also called a per se taking, the relocation fee required by the Ordinance was a regulation of the landlord-tenant relationship, not an unconstitutional taking of a specific and identifiable property interest. The panel further stated that because there was no taking, it did not need to address whether the relocation fee was required for a public purpose or what just compensation would be.
The panel rejected plaintiffs’ assertion that the City placed an unconstitutional condition, called an exaction, on their preferred use of their Oakland home. The panel held that because the relocation fee here was not a compensable taking, it did not constitute an exaction.
The panel affirmed the dismissal of plaintiffs’ seizure claim. The panel held that plaintiffs had not established a cognizable theory of state action; the City did not participate in the monetary exchange bеtween plaintiffs and their tenants.
COUNSEL
J. David Breemer (argued), Meriem Lee Hubbard, and Daniel M. Ortner, Pacific Legal Foundation, Sacramento, California, for Plaintiffs-Appellants.
Kevin P. McLaughlin (argued), Deputy City Attorney; David A. Pereda, Special Counsel; Maria Bee, Chief Assistant City Attorney; Barbara J. Parker, City Attorney; Office of the City Attorney, Oakland, California; for Defendant-Appellee.
Brendan Darrow and Matthew Siegel, Berkeley, California, for Amici Curiae League of California Cities and California State Association of Counties.
Nathaniel P. Bualat, Pilar Stillwater, and Rebecca Suarez, Crowell & Moring LLP, San Francisco, California, for Amicus Curiae Western Center on Law and Poverty.
R. NELSON, Circuit Judge:
The City of Oakland required the Ballingers to pay their tenants over $6,000 before the Ballingers could move back into their own home upon the expiration of the lease. The Ballingers challenge the payment as an unconstitutional physical taking under the Takings Clause. Instead, the requirement to pay tenants a relocation fee before an owner may move back into their home is more properly classified as a wealth-transfer provision but not an unconstitutional
I
In September 2016, Lyndsey and Sharon Ballinger leased their Oakland home for onе year while fulfilling military assignments on the east coast. After one year, the lease converted to a month-to-month tenancy.
Under the City of Oakland (“the City”) Municipal Code, even after a lease has ended and converted to a month-to-month tenancy, the tenancy may only end if the landlord has good cause.
When the Bаllingers were reassigned to the Bay area, they decided to move back into their Oakland home. The Ballingers gave their tenants sixty days’ notice to vacate the property, paying half the relocation payment up front and the remainder after the tenants vacated. In total, the Ballingers paid their tenants $6,582.40 in relocation fees.
The Ballingers sued the City, bringing facial and as-applied constitutional challenges under the Declaratory Judgment Act and
The district court dismissed each claim under
We review a dismissal under
III
We affirm the district court’s dismissal of the Ballingers’ taking claim. The Ballingers assert that the Ordinance effected an unconstitutional physical taking of their money for a private rather than public purpose and without just compensation. But we disagree—even though money can be the subject of a physical, also called a per se, taking, the relocation fee required by the Ordinance was a regulation of the landlord-tenant relationship, not an unconstitutional taking of a specific and identifiable proрerty interest. Because there was no taking, we need not address whether the relocation fee is required for a public purpose or what just compensation would be. See Rancho de Calistoga v. City of Calistoga, 800 F.3d 1083, 1093 (9th Cir. 2015) (private takings claim is not an independent cognizable claim).
A
The Takings Clause of the
The Supreme Court “has consistently affirmed that States have broad power to regulate housing conditions in general and the landlord-tenant relationship in particular without paying compensation for all economic injuries that such regulation entails.” Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 440 (1982).2 For example, “the government
Here, the Ordinance imposes a transaction cost to terminate a lease agreement. We see little difference between lawful regulations, like rent control, and the
Ordinance’s regulation of the landlord-tenant relationship here. Thus, the relocation fee is not an unconstitutional physical taking—it “merely regulate[s] [the Ballingers’] use of their land by regulating the relationship between landlord and tenant.” Yee, 503 U.S. at 528.3
The Ballingers argue that a taking “does not become a lesser intrusion simply because it is related to a commercial transaction” and the “decision to leave the rental market.” See Horne v. Dep’t of Agric., 576 U.S. 350, 365 (2015) (raisin growers’ decision to be raisin farmers made federal government’s confiscation of raisins no less a taking); Loretto, 458 U.S. at 439 n.17 (“[A] landlord’s ability to rent his property may not be conditioned on his forfeiting the right to compensation for a physical occupation.”). But “[w]hen a person voluntarily surrenders liberty or property,” like when the Ballingers chose to rent their property causing them to pay the relocation fee when they caused the tenants to relocate, “the State has not deprived the person of a constitutionally protected interest.” L.L. Nelson Enters., Inc. v. County of St. Louis, 673 F.3d 799, 806 (8th Cir. 2012) (citing Zinermon v. Burch, 494 U.S. 113, 117 n.3 (1990)); see Yee, 503 U.S. at 527; Fla. Power, 480 U.S. at 252.
Here, the Ballingers voluntarily chose to lease their property and to “evict” under the Ordinance—conduct that required them to pay the relocation fee, which they would
not be compelled to рay if they continued to rent their property. See Yee, 503 U.S. at 527. “A different case would be presented were the statute, on its face or as applied, to compel a
B
Based on the U.S. Supreme Court’s “long-settled view that property the government could constitutionally demand through its taxing power can also be taken by eminent domain,” Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595, 616 (2013), the relocation fee’s obligation to pay money rather than real or personal property does not mean that it cannot be an unconstitutional taking. Even though money is generally considered fungible, see United States v. Sperry Corp., 493 U.S. 52, 62 n.9 (1989), money may still be subject to a per se taking if it is a specific, identifiable pool of money, see Phillips v. Wash. Legal Found., 524 U.S. 156, 169–70 (1998). Indeed, the Supreme Court has held multiple times that money can be subject to a taking, and these cases show why the relocation fee here is not one: The Ordinance “merely impose[s] an obligation on a party to pay money on the happening of a contingency,” which happens to be related to a real property interest, but does not “seize a sum of money from a specific fund.” McCarthy v. City of Cleveland, 626 F.3d 280, 284 (6th Cir. 2010) (citing Brown v. Legal Found. of Wash., 538 U.S. 216, 223–24 (2003)).
1
To begin with, the district court concluded that Eastern Enterprises v. Apfel, 524 U.S. 498 (1998) “is the law,” so “the obligation to pay money is not a taking.” Because a majority of justices in Eastern Enterprises failed to agree to the same rationale, we reject that anything more than the Eastern Enterprises holding is binding in this court.
In Eastern Enterprises, the plaintiff challenged a statute that retroactively imposed obligations to pay for retired miners’ medical expenses, claiming that this payment obligation was an unconstitutional taking of its money and a violation of substantive due process. Id. at 514–15, 517. In sum, a four-Justice plurality held that the payment obligation was a regulatory taking. Id. at 529 (O’Connor, J., joined by Rehnquist, C.J., Scalia, and Thomas, JJ.). But five Justices, split between Justice Kennedy’s concurrence and a four-Justice dissent, conveyed that the Takings Clause is implicated only by laws that appropriate specified and identified property interests. See id. at 540 (Kennedy, J., сoncurring in the judgment and dissenting in part); id. at 555 (Breyer, J., joined by Stevens, Souter, and Ginsburg, JJ., dissenting).
In his concurrence, Justice Kennedy rejected the regulatory takings claim because there was no “specific property right or interest . . . at stake” and the statute did “not appropriate, transfer, or encumber an estate in land (e.g., a lien on a particular piece of property), a valuable interest in an intangible (e.g., intellectual property), or even a bank account or accrued interest.” Id. at 540–41 (Kennedy, J., concurring). Instead, the payment obligation “simply impose[d] an obligation to perform an act, the payment of benefits,” and was “indifferent as to how thе regulated entity elects to comply or the property it uses to do so.” Id. at 540.
But he concluded the
So five Justices agreed that mere obligations to pay money could not constitute a regulatory taking unless connected to a “specific property right,” but four of them dissented from the Court’s holding. Dissenting oрinions cannot be considered when determining the holding of a fractured Supreme Court decision—only the opinions of those who concurred in the judgments can be considered. Marks v. United States, 430 U.S. 188, 193 (1977).
Even then, only an opinion that “can reasonably be described as a logical subset of the other” is binding. United States v. Davis, 825 F.3d 1014, 1021–22 (9th Cir. 2016) (en banc). But neither the plurality nor Justice Kennedy’s concurrence are a logical subset of the other since they differed on why the statute was unconstitutional. Compare E. Enters., 524 U.S. at 522–38 (O’Connor, J., plurality) (unconstitutional regulatory taking), with id. at 539–47 (Kennedy, J., concurring) (substantive due process violation). Thus, “only the specific result” of Eastern Enterprises, that the statute at issue was unconstitutional, is binding in this court. Davis, 825 F.3d at 1022.4
2
That said, as the district court noted, “all circuits that have addressed the issue” of the precedential value of Eastern Enterprises “have uniformly found that a taking does not occur when the statute in question imposes a monetary assessment that does not affect a specific interest in property.” McCarthy, 626 F.3d at 285 (collecting cases). Indeed, Koontz appeared to endorse that “the relinquishment of funds linked to a specific, identifiable property interest” invoked a per se takings analysis. 570 U.S. at 614. We hold, as other circuits have, that in certain circumstances not argued here, money can be the subject of a taking. But here, the City’s Ordinance imposes a general obligation to pay money and does not identify any specific fund of money; therefore, it does not effectuate an unconstitutional physical taking.5
The money in all those cases was taken from known persons in the form of a specific, identified property interest to which those persons were already entitled. See Swisher Int’l v. Schafer, 550 F.3d 1046, 1055 n.6 (11th Cir. 2008).
In contrast, the obligation to pay money in the tax and government services user fee context is not generally compensable under the
Here, the Ballingers’ rely on Koontz to argue that the reloсation fee is an unconstitutional taking. But Koontz cuts against
Instead, the relocation fee required by the Ordinance is a monetary obligation triggered by a property owner’s actions with respect to the use of their property, not a burden on the property owner’s interest in the property. It is more akin to the obligations to pay money that other circuits have held were not takings, such as
- costs to clean up hazardous waste under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), United States v. Alcan Aluminum Corp., 315 F.3d 179, 190 (2d Cir. 2003);
- survivor’s benefits required from previous employers of coal miners who died from Black Lung Disease, W.V. CWP Fund v. Stacy, 671 F.3d 378, 387 (4th Cir. 2011);
- fines for traffic offenses caught on municipal traffic cameras, McCarthy, 626 F.3d at 286;
- quarterly monetary assessments based on tobacco manufacturers’ market share under the Fаir and Equitable Tobacco Reform Act, Swisher Int’l, 550 F.3d at 1057; and
- special monetary assessments on domestic utilities that benefit from facilities that process environmentally contaminated uranium, Commonwealth Edison Co. v. United States, 271 F.3d 1327, 1340 (Fed. Cir. 2001) (en banc) (“Requiring money to be spent is not a taking of property.” (citation omitted)).
Unlike the cases that have found a taking of funds a violation of the Takings Clause, this Ordinance neither identifies the Ballingers’ $6,582.40 as a parcel of money it intends to take, nor seeks to seize any escrow accounts or funds that meet certain criteria. Thus, the Ballingers’ physical-taking claim was not “an appropriate vehicle to challenge the power of [a legislature] to impose a mere monetary obligation without regard to an identifiable property interest.” McCarthy, 626 F.3d at 286 (quoting Swisher Int’l, 550 F.3d at 1057) (alteration in original).6
IV
For the same reasons, we disagree with the Ballingers that the City
constitutional right” or “coercing people into giving [those rights] up” by imposing unconstitutional conditions on the use of private land, the “predicate for any unconstitutional conditions claim is that the government could not have constitutionally ordered the person asserting the claim to do what it attempted to pressure that person into doing.” Koontz, 570 U.S. at 604, 612 (citation omitted). Because the relocation fee here was not a taking, it cannot have been an unconstitutional exaction.
A
The unconstitutional conditions doctrine of the Takings Clause allows the government to condition the use of one’s property on agreeing to an exaction, or the dedication of one’s other property to the public use, “so long as there is a ‘nexus’ and ‘rough proportionality’ between the property that the government demands and the social costs of the applicant’s proposal.” Id. at 605–06 (quoting Dolan v. City of Tigard, 512 U.S. 374, 391 (1994), and Nollan v. Cal. Coastal Comm’n, 483 U.S. 825, 837 (1987)). In evaluating the constitutionality of an exaction, we must balance (1) the vulnerability of “land-use permit applicants” who can be strongarmed by government entities with “broad discretion” with (2) legitimate government interests in “landowners internaliz[ing] the negative externalities of their conduct.” Id. at 604–05.
The Supreme Court has limited the scope of exaction claims to the administrative-conditions context. E.g., City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687, 702 (1999) (“[W]e have not extended the rough-proportionality test of Dolan beyond the special context of exactions—land-use decisions conditioning approval of development on the dedication of property to public use.” (emphasis added)); Lingle, 544 U.S. at 546 (describing Nollan and Dolan as “Fifth Amendment takings challenges to adjudicative land-use exactions”); Koontz, 570 U.S. at 604, 614 (describing Nollan and Dolan as “involv[ing] a special application” of the unconstitutional conditions doctrine “when owners apply for land-use permits,” where “central concern” is “the risk that the government may use its substantial power and discretion in land-use permitting” (citation omitted)). Following the Supreme Court’s lead, we have applied an exactions analysis only to generally applicable administrative, not legislative, action. See, e.g., McClung v. City of Sumner, 548 F.3d 1219, 1227 (9th Cir. 2008) (“In comparison to legislative land determinations, the Nollan/Dolan framework applies to adjudicative land-use exactions where the ‘government demands that a landowner dedicate an easement allowing public access to her property as a condition of obtaining a development permit.’” (citation omitted)); San Remo Hotel, LP v. San Francisco City & County, 364 F.3d 1088, 1097 (9th Cir. 2004).7
It is concerned simply with the act, and not with the governmental actor . . . .”).
Last year, in a now-vacated opinion, we relied on McClung to reject as an exaction “a general requirement imposed through legislation, rather than an individualized requirement to grant property rights to the public imposed as a condition for approving a specific property development.” Pakdel v. City & County of San Francisco, 952 F.3d 1157, 1162 n.4 (9th Cir. 2020) (cleaned up), vacated 5 F.4th 1099 (9th Cir. 2021). However, the Supreme Court invited us to “give furthеr consideration to [this] claim in light of [its] recent decision” in Cedar Point Nursery. Pakdel v. City & County of San Francisco, 141 S. Ct. 2226, 2229 n.1 (2021).
In Cedar Point Nursery, the Court highlighted that “[t]he essential question is not . . . whether the government action at issue comes garbed as regulation (or statute, or ordinance, or miscellaneous decree).” 141 S. Ct. at 2072. Yet the Court still limited the exactions context to “[w]hen the government conditions the grant of a benefit such as a permit, license, or registration” on giving up a property right. Id. at 2079. Thus, the Supreme Court has suggested that any government action, including administrative and legislative, that conditionally grants a benefit, such as a permit, can supply the basis for an exaction claim rather than a basic takings claim. See id. at 2072; see, e.g., Com. Builders of N. Cal., 941 F.2d at 873 (applying exаctions analysis to legislative ordinance imposing a fee to finance low-income housing in connection with the issuance of permits for nonresidential development).
B
Here, the Ballingers claim that the City’s Ordinance (a legislatively imposed condition) is an unconstitutional exaction. The district court rejected their exaction claim as based on a generally applicable legislative condition when a properly pled exaction claim can only arise from administrative, not legislative, conditions.
In light of Pakdel, 141 S. Ct. at 2229 n.1, and Cedar Point Nursery, 141 S. Ct. at 2072, 2079, we agree with the Ballingers that “[w]hat matters for purposes of Nollan and Dolan is not who imposes an exaction, but what the exaction does,” and the fact “[t]hat the payment requirement comes from a [c]ity ordinance is irrelevant.” But the Ballingers miss, under the Nollan/Dolan framework, that whatever the government action is, it must condition the grant of a benefit on an unconstitutional taking. See Dolan, 512 U.S. at 391–92 (exactions where government bodies “make some sort of individualized determination that the required dedication [or condition] is related both in nature and extent to the impact of the proposed development.”); McClung, 548 F.3d at 1227 (exactions analysis applies to “determinations conditioning permit approval on the grant of property rights to the public”). Here, the Ordinance does not conditionally grant or regulate
Lastly, even so, the “starting point to our analysis” of exactions claims is still whether the substance of the condition, such as granting an easement as in Nollan and Dolan, would be a taking independent of the conditioned benefit. Cedar Point, 141 S. Ct. at 2073; Koontz, 570 U.S. at 612; see Nollan, 483 U.S. at 831; Dolan, 512 U.S. at 384. Here, the relocation fee is not a compensable taking, so the relocation fee did not constitute an exaction. We therefore affirm the dismissal of the Ballingers’ exaction claim.
V
Finally, we also affirm the dismissal of the Ballingers’ seizure claim. The
A private individual’s actions can only be considered state action if a “sufficiently close nexus” makes private action “treat[able] as that of the [government entity] itself.” Blum v. Yaretsky, 457 U.S. 991, 1004 (1982) (citation omitted). Merely “authoriz[ing],” “approv[ing,] or acquiesc[ing]” to private action—such as the “creation оr modification of any legal remedy”—is not enough to show state action. Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 52–53 (1999) (citations omitted). And an “[a]ction by a private party pursuant to [a] statute, without something more, [is] not sufficient to justify a characterization of that party as a ‘state actor.’” Lugar v. Edmondson Oil Co., 457 U.S. 922, 939 (1982).
The Ballingers have not established a cognizable theory of state action. The City did not participate in the monetary exchange between the Ballingers and their tenants. See Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 164–65 (1978). Neither did it “exercise[] coercive power” over the Ballingers’ tenants or “provide[] such significant encouragement, either overt or covert, that the [tenants’] choice must in law be deemed to be that оf the State.” Blum, 457 U.S. at 1004. Because the tenants were not willful participants in joint activity with the State, they cannot be fairly treated as the State itself. Cf. Stypmann v. City & County of San Francisco, 557 F.2d 1338, 1341–42 (9th Cir. 1977). Nor did the City actively encourage, endorse, or participate in any wrongful interference by the tenants with the Ballingers’ money. Cf. Presley v. City of Charlottesville, 464 F.3d 480, 488 (4th Cir. 2006). At most, the City was only involved in adopting an ordinance providing the terms of eviction and payment. See Sullivan, 526 U.S. at 53. But enacting the Ordinance of this nature is not enough—entitling tenants to demand a relocation payment is a “kind of subtle encouragement . . . no more significant than that which inheres in [a government entity]’s creation or modification of any legal remedy.” See id. (emphasis added). Adopting thе Ballingers’ expansive notion of state action would eviscerate the “essential dichotomy between public and private acts.” Id. (citation and quotation marks omitted). Thus, we affirm the district court’s dismissal of the Ballingers’ seizure claim.8
AFFIRMED.