MANUFACTURED HOME COMMUNITIES INC.; MHC Operating Limited Partnership, an Illinois limited partnership, Plaintiffs-Appellants, v. CITY OF SAN JOSE; Enis Rice; Gary DeWet; Martin Vancil; Marsha Skratt, Defendants-Appellees.
No. 03-16766
United States Court of Appeals, Ninth Circuit
Argued April 14, 2005. Submitted Aug. 17, 2005. Filed Aug. 23, 2005.
420 F.3d 1022
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
David Bradford and Lisa T. Scruggs, Jenner & Block, LLC, Chicago, IL, for the appellants.
Richard Doyle, George Rios, and Shannon Smyth-Mendoza, Office of the City Attorney, San Jose, CA, for appellee City of San Jose.
Bruce E. Stanton, Law Offices of Bruce E. Stanton, San Jose, CA, for appellees Enis Rice, Gary DeWet, Martin Vancil, and Marsha Skratt.
Before LAY,* B. FLETCHER, and HAWKINS, Circuit Judges.
* The Honorable Donald P. Lay, Senior United States Circuit Judge for the Eighth Circuit, sitting by designation.
Manufactured Home Communities, Inc.1 and MHC Operating Limited Partnership2 (collectively MHC) sued the City of San Jose challenging the City‘s Mobilehome Rent Ordinance as unconstitutional. MHC also sued four individual tenants of the MHC mobilehome park: Enis Rice, Gary DeWet, Martin Vancil, and Marsha Skratt (collectively Individual Defendants). MHC argued that the Individual Defendants are not eligible for rent control under California state law and are, thus, in violation of the City‘s Ordinance and California state law for refusing to pay increased rent.
MHC appeals the district court‘s dismissal of MHC‘s complaint for various jurisdictional and res judicata problems. We affirm the district court‘s decision on the basis of res judicata, untimeliness, failure to state a federal question, lack of supplemental jurisdiction, and California‘s statute of limitations.3 Although it does not affect the outcome of this case, we reverse the district court‘s holding on the Rooker-Feldman doctrine.4 We reverse and remand the matter of attorneys’ fees.
Jurisdiction and Standard of Review
The district court dismissed several of MHC‘s claims for lack of subject matter jurisdiction under the Rooker-Feldman doctrine. Manufactured Home Cmtys., Inc. v. San Jose, 358 F.Supp.2d 896 (N.D.Cal.2003). The district court affirmed its dismissal under res judicata. The district court also dismissed MHC‘s claims for lack of ripeness, want of supplemental jurisdiction, and failure to comply with California‘s statute of limitations. This court has jurisdiction to review the district court‘s decision pursuant to
Rooker-Feldman jurisdiction claims are reviewed de novo. Noel v. Hall, 341 F.3d 1148, 1154 (9th Cir. 2003). Res judicata claims are also reviewed de novo. Palomar Mobilehome Park Ass‘n. v. City of San Marcos, 989 F.2d 362, 363 (9th Cir. 1993). Ripeness is a question of law, and it is reviewed de novo. Ventura Mobilehome Cmtys. Owners Ass‘n v. City of San Buenaventura, 371 F.3d 1046, 1050 (9th Cir. 2004). Whether a district court had supplemental jurisdiction is reviewed de novo; a district court‘s decision to decline supplemental jurisdiction is reviewed for abuse of discretion. Trs. of the Constr. Indus. & Laborers Health & Welfare Trust v. Desert Valley Landscape & Maint., Inc., 333 F.3d 923, 925 (9th Cir. 2003). Whether a claim is barred by a statute of limitations and when a statute of limitations begins to run are reviewed de novo. Cashman v. City of Cotati, 374 F.3d 887, 892 (9th Cir. 2004). The facts alleged in a complaint dismissed for lack of subject matter jurisdiction are accepted as true.
Factual Background and Procedural History
The City of San Jose passed a Mobilehome Rent Ordinance in 1986.
The maximum annual rent increase is supposed to allow mobilehome park owners a fair and reasonable return on their investment. A fair return is defined as an amount allowing an owner to maintain the same level of income, adjusted for inflation, as the owner received in the “base year.”
If a mobilehome park owner believes the maximum annual rent increase will not provide a fair return, then he may petition the City for a rent increase.
Individual mobilehome owners may voluntarily exempt themselves from the City‘s rent control provisions.
MHC, a publicly traded real estate investment company, owns and operates Westwinds mobilehome park in San Jose, California. MHC purchased Westwinds in August 1997. Due to an increase in ground rent in 1996, MHC says the park‘s operating expenses increased by $1.3 million that year. In May of 1998, MHC petitioned the City‘s rental dispute program for a special rent increase to cover the increased costs. Unfortunately, Westwinds’ financial records for the base year, 1985, were destroyed by the park‘s previous owner. MHC only has financial records for Westwinds for the years 1996 and 1997. Although MHC‘s initial petition for review included an estimate of the 1985 numbers, MHC now says an accurate estimate of the 1985 numbers is impossible. MHC submitted an amended petition using 1996 as the base year for determining whether a rent increase was appropriate.
After an administrative hearing, an administrative hearing officer ruled against MHC‘s petition for a rent increase in Octo-
In response, the City passed an Urgency Ordinance amending the Ordinance.7 City of San Jose Urgency Ordinance No. 25958. The Urgency Ordinance allowed for estimates of base year income and expenses when exact information is unavailable.
After passage of the Urgency Ordinance, MHC repetitioned for a rent increase. MHC again provided only 1996 financial information. The administrative hearing officer held a hearing in November of 1999. At the hearing MHC presented evidence that it is impossible to estimate the 1985 financial information. The City presented evidence that it is possible to estimate the 1985 financial information. The hearing officer found it possible to estimate the 1985 financial data and denied MHC‘s petition without prejudice.
MHC then petitioned for a supplemental writ of administrative mandamus in Superior Court. MHC abandoned its constitutional claims before the Superior Court and challenged only the hearing officer‘s interpretation of the Ordinance and the officer‘s factual finding that MHC is able to estimate the 1985 financial data. The Superior Court said that the City remedied the constitutional problems with the Ordinance by passing the Urgency Ordinance, noting MHC “no longer challenges its constitutionality.” The court affirmed the hearing officer‘s interpretation of the Ordinance and affirmed the officer‘s decision that estimating the 1985 financial information is possible for the purposes of calculating a fair return under the Ordinance.
MHC then appealed to the California Courts of Appeal. MHC argued that the City hearing officer and the Superior Court misinterpreted the Urgency Ordinance. MHC also revived its constitutional challenge to the Ordinance. The Courts of Appeal characterized MHC‘s challenge by quoting MHC‘s opening brief saying, “[T]he issues before this Court arise out of the legal conclusions that were drawn by
The Courts of Appeal affirmed the Superior Court‘s decision. Recognizing the constitutional considerations inherent in analyzing rent control ordinances, the Courts of Appeal said, “Fair return is the constitutional measuring stick by which every rent control board decision is evaluated.” Id. at 576 (quoting Carson Harbor Village, Ltd. v. City of Carson Mobilehome Park Rental Review Bd., 70 Cal.App.4th 281, 82 Cal.Rptr.2d 569, 574 (1999)). The court found that San Jose‘s Ordinance, on its face, provides owners with a fair return. The court also found that MHC did not prove the hearing officer‘s interpretation and application of the Ordinance were either unreasonable or unlawful. Based on the evidentiary record, the court found MHC could estimate financial expenses for 1985. Thus, the court found the Ordinance on its face and as applied does not deprive MHC of a fair return. The California Supreme Court declined discretionary review of the Courts of Appeal‘s decision.
In May of 2002, MHC pursued a second avenue for raising rents at Westwinds. MHC notified four mobilehome owners, the Individual Defendants, that under
In April of 2003, MHC in its complaint petitioned the federal district court in the Northern District of California for relief against the City and the Individual Defendants. MHC brought eight “Counts” before the district court. The Counts are:
- The City‘s Ordinance denies MHC procedural due process under the Fourteenth Amendment in violation of
42 U.S.C. § 1983 by denying a fair hearing and imposing arbitrary, capricious, and unreasonable burdens on MHC. - The City‘s Ordinance denies MHC equal protection under the Fourteenth Amendment in violation of
42 U.S.C. § 1983 by according MHC‘s property rights disparate and injurious treatment compared to other mobilehome park owners. - The City‘s hearing officer is biased thus denying MHC procedural due process.
- The City denied MHC procedural due process by not giving notice and a fair hearing before determining the Individual Defendants are not subject to the second homeowner exemption.
- MHC requests declaratory relief interpreting
California Civil Code § 798.21 to mean the Individual Defendants are subject to the second homeowner exemption. - MHC requests enforcement of the second homeowner exemption against the City and the Individual Defendants.
- The City Ordinance as applied violates the Fifth Amendment‘s Takings Clause.
The Ordinance allows tenants to sell their homes for a premium (based on rent control savings), the premium transfers value of MHC‘s land to the tenants. - The Ordinance does not provide a fair and reasonable return on MHC‘s investment.
- VIII. The City‘s Ordinance does not substantially advance a legitimate governmental objective. It is facially invalid as violating the Fifth Amendment‘s Takings Clause.
The City moved to dismiss MHC‘s complaint under the Rooker-Feldman doctrine, Younger abstention, ripeness, failure to present a federal question, and California‘s statute of limitations. The City also moved for attorneys’ fees and sanctions.
The district court granted the City‘s motion to dismiss and granted the City‘s attorneys’ fees. The court denied sanctions. The district court dismissed Counts I (procedural due process), II (equal protection), and III (biased hearing officer) under Rooker-Feldman and res judicata. The district court dismissed Counts IV (procedural due process), V (declaratory relief), and VI (enforcement), as not ripe for adjudication and for failing to present a federal question. The district court also declined to exercise supplemental jurisdiction over Counts V and VI as related to the Individual Defendants. The takings claims, Counts VII (as applied) and VIII (facial), were dismissed as untimely (ripeness and statute of limitations) and as improper under Rooker-Feldman and res judicata. MHC filed a timely Notice of Appeal on September 16, 2003.
Analysis
1. Rooker-Feldman—Counts I, II, III, VII, VIII
The district court dismissed the bulk of MHC‘s complaint, including the procedural due process, equal protection, and takings claims, under the Rooker-Feldman doctrine. On appeal MHC argues the Ninth Circuit‘s opinion in Noel v. Hall, 341 F.3d 1148 (9th Cir. 2003), issued after the district court‘s order, requires reversal of the district court‘s decision.8 We agree and find the Rooker-Feldman doctrine does not bar federal jurisdiction over MHC‘s complaint.
The Rooker-Feldman doctrine stands for the proposition that “a federal district court does not have subject matter jurisdiction to hear a direct appeal from the final judgment of a state court.” Noel, 341 F.3d at 1154. This court‘s opinion in Noel provides a detailed history of how Rooker-Feldman developed. Id. at 1154-65. It also clarifies the narrow scope and application of the doctrine. Noel offers this “general formulation” of the doctrine:
If a federal plaintiff asserts as a legal wrong an allegedly erroneous decision by a state court, and seeks relief from a state court judgment based on that decision, Rooker-Feldman bars subject matter jurisdiction in federal district court. If, on the other hand, a federal plaintiff asserts as a legal wrong an allegedly illegal act or omission by an adverse party, Rooker-Feldman does not bar jurisdiction.
The district court, however, observed the interconnectedness of MHC constitutional claims with the state courts’ holding that MHC is capable of estimating the 1985 financial figures and that MHC is capable of receiving a fair return as constitutionally mandated. The district court dismissed MHC‘s constitutional claims as “inextricably intertwined” with issues raised in state court and, thus, inappropriate for federal review under Rooker-Feldman. After the district court‘s decision, this court clarified the proper application of the “inextricably intertwined” test. Noel, 341 F.3d at 1157-58. Under Noel, claims are dismissed as “inextricably intertwined” only when an improper appeal under Rooker-Feldman is already before the district court. Noel says:
The premise for the operation of the “inextricably intertwined” test in Feldman is that the federal plaintiff is seeking to bring a forbidden de facto appeal. The federal suit is not a forbidden de facto appeal because it is “inextricably intertwined” with something. Rather, it is simply a forbidden de facto appeal. Only when there is already a forbidden de facto appeal in federal court does the “inextricably intertwined” test come into play: Once a federal plaintiff seeks to bring a forbidden de facto appeal, as in Feldman, that federal plaintiff may not, as part of the suit in which the forbidden appeal is brought, seek to litigate an issue that is “inextricably intertwined” with the state court judicial decision from which the forbidden de facto appeal is brought.
Id. at 1158. We already determined MHC‘s appeal is not a forbidden appeal, thus, while MHC‘s constitutional challenges are related to the state courts’ factual and legal conclusions, they are not “inextricably intertwined” for the purposes of Rooker-Feldman. The district court‘s dismissal of MHC‘s claims on the basis of the Rooker-Feldman doctrine is reversed.
The relationship between MHC‘s constitutional challenges and the California state courts’ legal and factual conclusions is best addressed under preclusion law. As the Supreme Court recently made clear: “If a federal plaintiff ‘present[s] some independent claim, albeit one that denies a legal conclusion that a state court has reached in a case to which he was a party ..., then there is jurisdiction and state law determines whether the defendant prevails under principles of preclusion.‘” Exxon Mobil, 125 S.Ct. at 1527 (quoting GASH Assocs. v. Village of Rosemont, 995 F.2d 726, 728 (7th Cir. 1993); accord Noel v. Hall, 341 F.3d 1148, 1163-64 (9th Cir. 2003)).
2. Res Judicata—Counts I, II, III, VII, VIII
Federal courts are required to give full faith and credit to state court judgments under
[P]rovides that a “cause of action” is comprised of a “primary right” of the plaintiff, a corresponding “primary duty” of the defendant, and a wrongful act by the defendant constituting a breach of that duty. The most salient characteristic of a primary right is that it is indivisible: the violation of a single primary right gives rise to but a single cause of action.
Mycogen Corp. v. Monsanto Co., 28 Cal.4th 888, 904, 123 Cal. Rptr.2d 432, 443, 51 P.3d 297, 306 (2002) (citations omitted). A party may bring only one cause of action12 to vindicate a primary right. Id. at 897, 123 Cal. Rptr.2d at 438, 51 P.3d at 302. Claims not raised in this single cause of action may not be raised at a later date. Id.
MHC‘s claims in federal and state court all involve a single primary right: the right to receive a fair return on its investment at Westwinds. They all stem from a single injury MHC claims to suffer. See Takahashi v. Bd. of Trs., 783 F.2d 848, 851 (9th Cir. 1986) (holding the plaintiff‘s statutory mandamus proceeding in state court barred the plaintiff‘s constitutional claims in federal court because both actions stemmed from a single primary right: the contractual right to employment). MHC‘s claims all relate to a single Ordinance and the City‘s application of that Ordinance to
To adjudicate MHC‘s constitutional claims would require upsetting legal conclusions of the California courts regarding the Ordinance. The California Superior Court and the California Courts of Appeal both held the City‘s Ordinance allows MHC to receive a fair return. MHC need only estimate the financial figures for 1985, as both courts held MHC is capable of doing, to determine a fair return. As the district court recognized, “[T]his Court would be unable to pass judgment on MHC‘s claims without addressing the state court‘s determinations on those issues. Any remedy for Plaintiff on these claims would in effect nullify that judgment in violation of res judicata.” Manufactured Home Cmtys. v. San Jose, 358 F.Supp.2d 896, 906 (N.D.Cal.2003). MHC‘s claims either have been or should have been raised in state court, and MHC is precluded from raising them in federal court.
The Supreme Court very recently addressed res judicata in the context of a takings claim in San Remo Hotel, L.P. v. City & County of San Francisco, — U.S. —, 125 S.Ct. 2491, 162 L.Ed.2d 315 (2005). There, much like here, the claims presented in federal court “depended on issues identical to those that had previously been resolved in the state-court action.” Id. at 2495. We cannot consider MHC‘s claims without rejecting the California courts’ conclusion that MHC will receive a fair return if it estimates the necessary financial figures. The district court‘s conclusion that Counts I, II, III, VII, and VIII of MHC‘s complaint are res judicata is affirmed.
3. Ripeness—Count IV
MHC‘s Counts IV, V, and VI were not dismissed under either Rooker-Feldman or res judicata. These claims were not pursued in state court, but were brought against the City and the Individual Defendants in federal court for violations related to the second homeowner exemption under California state law. The exemption is part of California‘s Civil Code, not San Jose‘s municipal code. It exempts mobilehome owners who own second homes from rent control ordinances.
MHC believes that the Individual Defendants, four residents of Westwinds, are exempt from San Jose‘s rent control Ordinance as second homeowners. MHC notified those residents it was raising their rent. The City and the residents objected.
MHC did not pursue a rent increase through San Jose‘s administrative process; instead it sued the City and the Individual Defendants in federal court. MHC claims the City denied procedural due process by rendering a final decision without notice or an opportunity to be heard (Count IV). MHC requested declaratory relief (Count V) and enforcement of the statutory exemption (Count VI).
The district court dismissed these claims as unripe under Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985), and as failing to state a claim within the federal question jurisdiction of the court. MHC argues Count IV is not subject to the Williamson County ripeness test because Count IV is a due process claim, separate from MHC‘s takings claim. In the alternative MHC argues, that if the Williamson County test applies to Count IV, the City Attorney‘s letter was a final administrative action. Id. at 45-46. MHC believes it either fulfills or is exempt from fulfilling the Williamson County ripeness test.
We need not decide whether Count IV is subject to the Williamson County ripeness test for takings claims because Count IV fails even the basic requirements of the ripeness doctrine, to which all claims in federal court are subject. See Babbitt v. United Farm Workers Nat‘l Union, 442 U.S. 289, 297-98, 99 S.Ct. 2301, 60 L.Ed.2d 895 (1979). The Supreme Court has explained that the ripeness doctrine‘s “basic rationale is to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties.” Abbott Labs. v. Gardner, 387 U.S. 136, 148-49, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967). Premature adjudication is exactly the problem plaguing MHC‘s due process claim: MHC never engaged in the administrative process. MHC never filed a petition to raise the Individual Defendants’ rents. No final administrative decision exists for MHC‘s claims related to the second home owner exemption. If MHC files a petition, then the hearing officer may or may not grant the rent increase. Until MHC files the petition, there is no way of knowing whether a real case or controversy exists. Due process has not been denied because no process was pursued. MHC‘s due process claim is not ripe for adjudication.
The prudential aspect of ripeness is considered in a two prong test: “(1) the fitness of the issues for judicial decision; and (2) the hardship to the parties of withholding court consideration.” Principal Life Ins. Co. v. Robinson, 394 F.3d 665, 670 (9th Cir. 2004). Only four homes in MHC‘s 700+ unit mobilehome park are at issue under the second homeowner exemption. Nothing in the record suggests delaying resolution of this legal issue will significantly harm either party. MHC has not sought an administrative rent increase for the four homes. The interpretation of the statute is an issue of state law and no California court has interpreted that statute as applied in these circumstances. The fitness of these issues for judicial decision is poor, and the hardship to the parties is minor.
MHC must pursue a rate increase for the Individual Defendants before pursuing these claims in federal court. This MHC has not done. Its claims related to the second homeowner exemption are not ripe for review.
4. Federal question and supplemental jurisdiction—Counts V & VI
MHC‘s Counts V and VI do not raise independent federal questions. MHC does not argue otherwise. In the absence of jurisdiction over Count IV, there is no federal jurisdiction over Counts V and VI. See
MHC argues the California statute at issue does not present a novel or complex issue of law. The City and the Individual Defendants disagree. While the statute may not be complex on its face, the application of the law in these circumstances is uncertain. The second homeowner exemption does not apply to owners who are renting their mobilehome,
The Individual Defendants argue the second homeowner exemption does not apply to them under these sections of the statute. The four spaces challenged by MHC are either occupied by a co-owner, subject to a valid sublease, or held out for sale as of the original rent increase notice. Under these circumstances, the application of the exceptions to the exemption for rent control depends on how the statute is interpreted. No California state court has interpreted this statute for these purposes.
The district court was correct to conclude that MHC‘s Counts V and VI raise novel issues of state law. The district court did not abuse its discretion in declining to exercise supplemental jurisdiction.
5. Ripeness—Count VII
MHC made several arguments to support its as-applied takings claim under Count VII. The as-applied claim challenges the City‘s application of the Ordinance and the second homeowner exemption. MHC argues the City‘s application of the Ordinance creates a sales premium for mobilehomes within Westwinds. This premium, MHC argues, impermissibly transfers property from MHC to the individual homeowners. MHC also argues the City‘s application of the Ordinance does not allow MHC a fair and reasonable return on its investment. Thus, MHC argues, the City fails to “substantially advance” the stated goals of the Ordinance or any other legitimate government interest.14
A petitioner need not seek state remedies if to do so would be futile. Id. at 194-95, 105 S.Ct. 3108. The futility exception is narrow, and mere uncertainty does not establish futility. Del Monte Dunes at Monterey, Ltd. v. City of Monterey, 920 F.2d 1496, 1501 (9th Cir. 1990).15 Under the exception:
The landowner bears the burden of establishing, by more than mere allegations, the futility of pursuing any of the steps needed to obtain a final decision. Moreover, before claiming the exception, the landowner must submit at least one development proposal and one application for a variance if meaningful application and submission can be made.
Id. (citations omitted); see also Carson Harbor Vill., Ltd. v. City of Carson, 353 F.3d 824, 827 (9th Cir. 2004).
Applied takings claims—General rent increases
MHC pursued its general rate increase claims through the administrative process provided by the Ordinance. The hearing officer twice denied MHC‘s rent increase. These actions are sufficient to fulfill the first prong of the Williamson County test for MHC‘s takings claims related to a general rent increase.
As to the second prong, MHC claims to be excused from seeking compensation because doing so would be futile. MHC argues that the City‘s hearing officer was financially biased against it and, as a result, California‘s Kavanau adjustment16 is inadequate as compensation for MHC. MHC‘s argument that the hearing officer is biased is nothing more than speculation. Although the facts alleged by a plaintiff are assumed true under a motion to dismiss, this court need not accept baseless allegations as proof of futility. This court is not “required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) (reviewing motion to dismiss for failure to state a claim under Rule 12(b)(6)). MHC‘s bias allegations, at best, produce uncer-
Moreover, “The Supreme [C]ourt has indicated that at least one application must be submitted before the futility exception applies.” Kinzli v. City of Santa Cruz, 818 F.2d 1449, 1454 (9th Cir. 1987); see also Amberhill Props., 814 F.2d at 1341 (holding failure to seek a rent adjustment before bringing takings action makes a claim of futility wholly speculative). MHC did not pursue even a single petition for compensation.
At this time, MHC is foreclosed from pursuing a futility exception from the Williamson County ripeness requirements. MHC‘s as-applied takings claim against the Ordinance is not ripe for review.
Applied takings claims—Second home-owner exemption
MHC did not pursue any second homeowner exemption claims through the administrative process provided by the Ordinance. Instead, MHC says a letter from the City attorney was a “final decision” on this matter. In the alternative, MHC claims it would be futile to pursue these claims through the administrative process because the hearing officer was biased. As discussed above, neither of these claims have merit. See supra pp. 1032-34. The Ordinance does not grant any final or binding authority to opinions by the City Attorney.
6. Statute of limitations—Count VIII
MHC‘s facial takings claim asserts that the Ordinance fails to “substantially advance” a legitimate state interest. This claim is foreclosed by the Supreme Court‘s recent holding that the ” ‘substantially advances’ formula is not a valid takings test, and indeed [] it has no proper place in our takings jurisprudence.” Lingle, 125 S.Ct. at 2087. In any event, we would affirm the district court‘s statute of limitations decision denying relief.
7. Attorneys fees—District Court
The district court denied sanctions against MHC‘s attorneys under
Defendants requesting attorneys’ fees from a plaintiff in a civil rights action must meet a heightened standard. Hughes v. Rowe, 449 U.S. 5, 14, 101 S.Ct. 173, 66 L.Ed.2d 163 (1980). The Supreme Court said attorneys’ fees should be granted to a defendant in a civil rights action “only if the District Court finds ‘that the plaintiff‘s action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith.‘” Id. “An appeal is considered frivolous in this circuit when the result is obvious, or the appellant‘s arguments of error are wholly without merit.” Taylor v. Sentry Life Ins. Co., 729 F.2d 652, 656 (9th Cir. 1984). The district court‘s order does not mention the heightened standard for awarding attorneys fees in this situation. See Manufactured Home Cmtys., 358 F.Supp.2d at 903, 909. Rather, it cites language similar to the Hughes language on attorneys’ fees to deny Rule 11 sanctions. Id. at 909. It appears the district court overlooked the heightened standard set by the Supreme
8. Attorneys’ fees—Courts of Appeal
The City‘s motion for attorneys’ fees on appeal is denied. While the City is surely frustrated with MHC‘s unwillingness to estimate the financial data for Westwinds and instead to pursue this lengthy litigation, the claims MHC brought before this court are not wholly without merit. In light of the uncertainties in the law (see Noel, 341 F.3d 1148 and Exxon Mobil Corp., 125 S.Ct. 1517), MHC had reason to appeal the district court‘s decision. MHC‘s appeal was not “frivolous, unreasonable, or without foundation.” Hughes, 449 U.S. at 14, 101 S.Ct. 173.
9. Motion for judicial notice
The City‘s motion for judicial notice of its Answer to MHC‘s petition for review in the California Supreme Court is granted. The City‘s Answer is helpful in considering matters related to preclusion in the state courts. In Holder v. Holder, 305 F.3d 854, 866 (9th Cir. 2002), this court took judicial notice of a state court decision and the briefs filed in that court to determine if an issue was raised and decided by the state court for res judicata purposes. Likewise, in this case judicial notice of the City‘s Answer is helpful for examining the claims litigated in state court.
Conclusion
The district court‘s order dismissing MHC‘s complaint is affirmed as to res judicata, ripeness, California‘s statute of limitations, and failure to state a federal claim and lack of supplemental jurisdiction. The district court‘s order is reversed as to the Rooker-Feldman doctrine. The matter of attorneys’ fees is reversed and remanded.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Russell MEANS, Petitioner-Appellant, v. NAVAJO NATION, a federally recognized Indian Tribe; Ray Gilmore, Judge of the Judicial District of Chinle, Navajo Nation, Arizona; Robert Yazzie, Chief Justice of the Navajo Nation, Respondents-Appellees, and United States of America, Respondent-Intervenor-Appellee.
No. 01-17489
United States Court of Appeals, Ninth Circuit
Argued and Submitted Oct. 10, 2002. Submission Withdrawn Nov. 19, 2003. Resubmitted Jan. 28, 2005 *. Filed Aug. 23, 2005.
* We withdrew submission of this case when the Supreme Court granted certiorari in United States v. Lara, 324 F.3d 635 (8th Cir.), cert. granted, 539 U.S. 987, 124 S.Ct. 46, 156 L.Ed.2d 704 (2003), rev‘d, 541 U.S. 193, 124 S.Ct. 1628, 158 L.Ed.2d 420 (2004).