CA Rental Housing Assoc. v. Newsom

1

2

3

4

5

6

7 UNITED STATES DISTRICT COURT

8 EASTERN DISTRICT OF CALIFORNIA

9

10 CALIFORNIA RENTAL HOUSING No. 2:21-cv-01394-JAM-JDP

ASSOCIATION, et al.,

11

Plaintiffs,

12 ORDER DISMISSING ACTION FOR

v. LACK OF SUBJECT MATTER

13 JURISDICTION

GAVIN NEWSOM, et al.

14

Defendants.

15

16 This matter is before the Court on Plaintiffs’ motion for

17 summary judgment (“MSJ”) and Defendants’ cross-motion for summary

18 judgment (“Cross-MSJ”). See MSJ, ECF No. 10; Cross-MSJ, ECF

19 No. 16. Plaintiffs oppose Defendants’ cross-motion for summary

20 judgment. See Pls.’ Opp’n, ECF No. 19. Defendants replied. See

21 Defs.’ Reply, ECF No. 24. Plaintiffs bring three claims against

22 Defendants in their official capacity for constitutional

23 violations. See First Amended Complaint (“FAC”), ECF No. 4. For

24 the reasons set forth below, the Court dismisses this action in

25 its entirety for lack of subject matter jurisdiction.1

26

27 1 This motion was determined to be suitable for decision without

oral argument. E.D. Cal. L.R. 230(g). The hearing was

28 scheduled for October 18, 2022.

1 I. BACKGROUND

2 On March 4, 2020, California Governor Gavin Newsom declared

3 a State of Emergency in response to the COVID-19 pandemic. See

4 Exh. 1 to Defs.’ Request for Judicial Notice (“DJRN”), ECF

5 No. 16-2. That same month, Governor Newsom issued executive

6 order N-33-20 (“Stay-at-Home Order”) directing all California

7 residents to heed the directives of the State Public Health

8 Officer and to stay home or at their place of residence. See

9 Exh. 5 to DJRN, ECF No. 16-2. Following the Stay-at-Home Order,

10 Governor Newsom issued executive order N-37-20 banning the

11 enforcement of unlawful detainer eviction orders from March 27 to

12 May 31, 2020, for renters affected by COVID-19. Defs.’ Statement

13 of Undisputed Facts (“DSUF”) ¶ 37, ECF No. 16-3. In the

14 executive order, Governor Newsom stated that “minimizing

15 evictions during this period is critical to reducing the spread

16 of COVID-19 in vulnerable populations by allowing all residents

17 to stay home or at their place of residence in compliance with

18 [the Stay-at-Home Order].” Exh. 5 to DJRN.

19 The California Legislature codified the protections of

20 Governor Newsom’s executive eviction moratorium on August 31,

21 2020, when the State enacted the COVID-19 Tenant Relief Act

22 (“Tenant Act”) in Assembly Bill 3088 (“AB 3088”). Code of Civ.

23 Proc. §§ 1179.01, et seq. The Tenant Act provided temporary

24 restrictions on unlawful detainer evictions of tenants if they

25 complied with certain declaration requirements. Id. Tenants who

26 submitted to their landlords declarations attesting that they

27 were unable to pay rent due to COVID-19 related hardships were

28 immunized from unlawful detainer actions for unpaid rent between

1 March 1 and August 31, 2020. §§ 1179.02(f), 1179.03(b). Subject

2 to limited exceptions, courts could not find a tenant guilty of

3 unlawful detainer for nonpayment of rent before February 1, 2021.

4 § 1179.03.5.

5 The State went on to extend and modify these restrictions

6 multiple times. See Senate Bill 91 (“SB 91”) (extending

7 restrictions to June 30, 2021); Assembly Bill 832 (“AB 832”)

8 (extending restrictions to September 30, 2021 and imposing other

9 restrictions until March 31, 2022); Assembly Bill 2179

10 (“AB 2179”) (extending restrictions to June 30, 2022). As a

11 result, unlawful detainer actions for nonpayment of rent did not

12 resume fully until July 1, 2022.

13 Plaintiffs, comprised of individual landlords and an

14 association of rental housing owners, brought this suit on

15 August 5, 2021, to challenge the constitutionality of AB 832.

16 FAC ¶¶ 1, 3. Plaintiffs allege that AB 832 constitutes “an

17 unconstitutional moratorium on the right of rental housing owners

18 to repossess their properties for nonpayment of rent” in

19 violation of the Due Process Clause, the Takings Clause, and the

20 Contracts Clause of the U.S. Constitution. Id. ¶¶ 2, 4.

21 Plaintiffs’ and Defendants’ cross-motions for summary judgment

22 are now before the Court.

23

24 II. OPINION

25 A. Judicial Notice

26 Plaintiffs request judicial notice of seven documents in

27 support of their motion for summary judgment. See Pls.’ Request

28 for Judicial Notice of Exhibits 1-6 (“PRJN”), ECF No. 11; see

1 also Pls.’ Second Request for Judicial Notice of Exhibit 7

2 (“PRJN2”), ECF No. 20.

3 Defendants request judicial notice of twelve documents in

4 support of their cross-motion for summary judgment. See Defs.’

5 Request for Judicial Notice of Exhibits 1-12 (“DRJN”), ECF

6 No. 16-2.

7 All of the above exhibits are matters of public record and

8 therefore proper subjects for judicial notice. See Lee v. City

9 of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Accordingly,

10 the Court GRANTS Plaintiffs’ request for judicial notice of

11 Exhibits 1-7. The Court also GRANTS Defendants’ request for

12 judicial notice of Exhibits 1-12. The Court’s judicial notice,

13 however, extends only to the existence of these documents and

14 not to their substance to the extent it is disputed or

15 irrelevant. Lee, 250, F.3d at 690.

16 B. Analysis

17 The State contends that Plaintiffs’ action is moot and that

18 the Court therefore lacks subject matter jurisdiction over this

19 case. Cross-MSJ at 10. Because federal subject matter

20 jurisdiction concerns the Court’s power to declare the law,

21 “when it ceases to exist, the only function remaining to the

22 court is that of announcing the fact and dismissing the cause.”

23 Ex parte McCardle, 74 U.S. 506, 514 (1869). As such, the Court

24 must affirm its jurisdiction before proceeding to the merits of

25 summary judgment. See Steel Co. v. Citizens for a Better Env’t,

26 523 U.S. 83, 94 (1998) (requiring that “jurisdiction be

27 established as a threshold matter”).

28 ///

1 1. Mootness

2 The threshold question before the Court is whether this

3 case is moot. “A case becomes moot—and therefore no longer a

4 ‘Case’ or ‘Controversy’ for purposes of Article III—when the

5 issues presented are no longer ‘live’ or the parties lack a

6 legally cognizable interest in the outcome.” Rosebrock v.

7 Mathis, 745 F.3d 963, 971 (9th Cir. 2014) (internal citations

8 omitted). The party asserting mootness bears the “heavy burden”

9 to show that “the challenged conduct cannot reasonably be

10 expected to reoccur.” Id.

11 The parties do not dispute that the challenged action—the

12 State’s restrictions on unlawful detainer actions for nonpayment

13 of rent—ceased on June 30, 2022 with the expiration of AB 2179.

14 See Pls.’ Opp’n at 7; Cross-MSJ at 9. As such, “[t]he actual

15 controversy has evaporated,” because “there is no longer any

16 state order for the court to declare unconstitutional or to

17 enjoin. It could not be clearer that this case is moot.” Brach

18 v. Newsom, 38 F.4th 6, 11 (2022), citing Already, LLC. V. Nike,

19 Inc., 568 U.S. 85, 91 (2013).

20 The remaining inquiry for the Court, therefore, is whether

21 Plaintiffs’ claims remain live under an exception to mootness.

22 Plaintiffs contend that the Court should find their claims

23 remain live under the voluntary cessation exception and the

24 capable of repetition yet evading review exception. Pls.’ Opp’n

25 at 7-10. For the reasons given below, the Court disagrees.

26 2. Voluntary Cessation Exception

27 “[A] defendant cannot automatically moot a case simply by

28 ending its unlawful conduct once sued.” Already, 568 U.S. at

1 91. As the Supreme Court instructed, a party “should not be

2 able to evade judicial review, or to defeat a judgment, by

3 temporarily altering questionable behavior.” City News &

4 Novelty, Inc. v. City of Waukesha, 531 U.S. 278, 284 n.1 (2001).

5 The party asserting mootness must show that “the challenged

6 behavior cannot reasonably be expected to recur.” Already, 568

7 U.S. at 96. While the Court may “treat the voluntary cessation

8 of challenged conduct by government officials with more

9 solicitude . . . than similar actions by private parties,” the

10 Court must still diligently “probe the record to determine

11 whether the government has met its burden, even as [the Court

12 grants] it a presumption of good faith.” Bell v. City of Boise,

13 709 F.3d 890, 898-99, n.13, (9th Cir. 2013); Rosebrock v.

14 Mathis, 745 F.3d 963, 971-72 (9th Cir. 2014). Once the

15 government has met its burden, it is the opposing party’s burden

16 to show there is a “reasonable expectation of reenactment” that

17 defeats the presumption of mootness. Bd. of Trs. of Glazing

18 Health & Welfare Trust v. Chambers, 941 F.3d 1195, 1199 (9th

19 Cir. 2019) (en banc). A reasonable expectation must be “founded

20 in the record [and not] on speculation alone.” Id.

21 The Court finds that the State has met its burden to prove

22 upon the record that the challenged action cannot reasonably be

23 expected to recur. First, as the Ninth Circuit noted, “the

24 repeal, amendment, or expiration of challenged legislation is

25 generally enough to render a case moot and appropriate for

26 dismissal.” Id. at 1198. The record shows that AB 2179’s

27 expiration breaks with the State’s previous pattern of behavior:

28 When AB 3088’s restrictions on unlawful detainers would have

1 expired on January 31, 2021, the State extended it with SB 91;

2 when SB 91 would have expired on June 30, 2021, the State

3 extended it with AB 832; and when AB 832 would have expired on

4 March 31, 2022, the State extended it with AB 2179. On and on

5 in an unbroken train, the State renewed its restrictions on

6 unlawful detainers against tenants for nonpayment of rent. That

7 the State allowed AB 2179 to expire on June 30, 2022 suggests,

8 therefore, that it is unlikely to renew similar restrictions in

9 the future.

10 Further, the record shows that the State’s approach to

11 unlawful detainers has been “steady and consistent” in its

12 gradual tapering. Brach, 38 F.4th at 15. At the start of the

13 pandemic, tenants with qualifying COVID-19 hardships could not

14 be evicted by unlawful detainer for nonpayment of rent between

15 March 1, and August 31, 2020. §§ 1179.02(f), 1179.03(b). This

16 protection lasted until October 1, 2021, from which point

17 forward landlords could seek unlawful detainers for all future

18 failures to pay rent. §§ 1179.03(g), 1179.03.5. Landlords

19 could also evict tenants who failed to pay at least 25 percent

20 of past rent due between September 1, 2020 and September 30,

21 2021. §§ 1179.02(i), 1179.03(g). The State continued to roll

22 back its restrictions when it passed AB 2179, which limited the

23 bar on unlawful detainers to tenants who had applied for rental

24 assistance by March 30, 2022. § 1179.03(c)(7).

25 As Defendants point out, even during the Omicron variant

26 surge, when the State’s COVID-19 case count exceeded what it was

27 early in the pandemic, the State did not reimpose a full-out

28 moratorium on evictions. Cross-MSJ at 12; See Brach, 38 F.34th

1 at 14 (finding a case moot where the State “maintained in-person

2 instruction throughout the surge of the Omicron COVID-19

3 variant, even while the State’s case count soared”). As such,

4 it is apparent that, with each bill passed, the State gradually

5 rescinded its restrictions on unlawful detainers until all

6 restrictions were finally lifted on June 30, 2022. Defs.’ Reply

7 at 4-5. Accordingly, the Court finds that the State has carried

8 its burden to show that there is no reasonable expectation of

9 reenactment.

10 As the party seeking to rebut the presumption of mootness,

11 Plaintiffs must show there is a reasonable expectation that the

12 State will reoffend. Bd. of Trs. of Glazing Health & Welfare

13 Trust, 941 F.3d at 1199. Plaintiffs point to the fact that

14 “[t]he State has not committed itself to never re-impose such a

15 moratorium again [and] the State refuses to acknowledge the harm

16 that its moratorium has caused rental housing owners.” Reply 8-

17 9, citing Brach, 38 F.4th at 15 (“Most importantly, the State

18 has ‘unequivocally renounce[d]’ the use of school closure orders

19 in the future”). Plaintiffs read too much into Brach. Although

20 the Ninth Circuit found it compelling that the State

21 “renounce[d] its use of school closure orders in the future,”

22 the court did not require an explicit renouncement for its

23 analysis. The renouncement was significant only because it

24 demonstrated the State’s “commitment” to keeping schools open.

25 Id. As such, where the State shows through other means that it

26 is committed to quitting the challenged conduct, the State does

27 need an explicit announcement denouncing its previous conduct.

28 ///

1 Plaintiffs next argue that their claims remain live because

2 Governor Newsom’s declaration of a State of Emergency is still

3 in force. Pls.’s Reply at 9. However, given that this fact was

4 immaterial in Brach, the Court declines to afford it weight

5 here. See Brach 38 F.4th at 9 (acknowledging the State of

6 Emergency but not discussing it); contra, Id. at 16 (dissent

7 opinion) (discussing the relevance of the ongoing State of

8 Emergency).

9 Plaintiffs also argue that their claims remain live because

10 the pandemic “is far from over,” and that the State has both the

11 power and incentive to reimpose an eviction moratorium in the

12 future. Pls.’ Reply at 9. Plaintiffs’ argument fails because a

13 “[r]easonable expectation means something more than ‘a mere

14 physical or theoretical possibility.’” Brach quoting Murphy v.

15 Hunt, 455 U.S. 478, 482 (1982). As the Brach court explained,

16 the power to reenact a challenged policy is not a sufficient

17 basis for a court to conclude that a reasonable expectation of

18 recurrence exists. “Rather, there must be evidence indicating

19 that the challenged [policy] likely will be reenacted.” Brach

20 quoting Larsen v. U.S. Navy, 525 F.3d 1, 4 (D.C. Cir. 2008). In

21 the absence of a showing upon the record that there is a

22 reasonable expectation that the challenged conduct will reoccur,

23 the Court concludes the voluntary cessation exception does not

24 apply.

25 3. Capable of Repetition yet Evading Review

26 The Court also finds the capable of repetition yet evading

27 review exception does not apply. This exception applies only in

28 extraordinary cases where “(1) the duration of the challenged

1 action is too short to allow full litigation before it ceases,

2 and (2) there is a reasonable expectation that the plaintiffs

3 will be subjected to it again.” Alaska Ctr. For Evn’t v. U.S.

4 Forest Serv., 189 F.3d 851, 854-55 (9th Cir. 1999).

5 Plaintiffs argue their case is live under the capable of

6 repetition yet evading review exception because the duration of

7 the challenged action was too short to allow full litigation

8 before it ceases—“[e]ach moratorium extension lasted months and

9 easily evaded judicial review, allowing it to expire well before

10 a court could pass on its constitutionality.” Pls.’ Opp’n at 9.

11 The Court observes that while each moratorium extension lasted

12 only months, the extensions were consecutive such that the

13 moratorium effectively lasted from August 31, 2020 to October 1,

14 2021, and, in a more limited capacity, from October 1, 2021

15 through June 30, 2022. As Defendants point out, “[t]hat this

16 case did not resolve prior to the moratorium expiring on

17 October 1, 2021 is due entirely to Plaintiffs’ decisions to wait

18 more than a year to file their case.” Defs.’ Reply at 5.

19 Even if the moratorium were too short to allow full

20 litigation, Plaintiffs would not prevail on the second prong of

21 the capable of repetition analysis. As the Brach Court

22 instructed, the voluntary cessation and capable of repetition

23 exception are “analogous” to one another. Brach, 38 F.4th

24 at 15. Just as the Brach court’s “rationale for rejecting [the

25 capable of repetition exception] mirrors much of [its] analysis

26 regarding the voluntary cessation exception,” so too does this

27 Court’s present analysis mirror the one above. Id. Because the

28 challenged moratorium has already expired and because the public

1 health landscape is drastically different from the start of the

2 pandemic, there is no reasonable expectation that Plaintiffs

3 will be subjected to the challenged conduct again. The

4 “reasonable expectation” prong of the Court’s analysis has not

5 been met. Alaska Ctr. For Evn’t, 189 F.3d at 854-55. As such,

6 the Court finds the capable of repetition yet evading review

7 exception does not apply.

8 4. Nominal Damages

9 The Court is unpersuaded by Plaintiffs’ contention that

10 their prayer for nominal damages saves this action from

11 mootness. MSJ at 16, citing Bernhardt v. County of Los Angeles,

12 279 F.3d 862, 872 (9th Cir. 2002) (“A live claim for nominal

13 damages will prevent dismissal for mootness”). In this case,

14 Plaintiffs have only requested nominal damages against State

15 Defendants who have been sued in their official capacities. See

16 FAC. The Eleventh Amendment bars such claims. See Kentucky v.

17 Graham, 473 U.S. 159, 169-70 (1985) (holding that the Eleventh

18 Amendment immunizes state officials sued in their official

19 capacity from claims for retrospective relief, including

20 monetary damage claims.) Accordingly, the Court finds that

21 Plaintiffs’ contention regarding nominal damages is without

22 merit. There being no viable damages claim to rescue

23 Plaintiffs’ case, this case is moot.

24

25 III. ORDER

26 For the reasons set forth above, the Court DISMISSES

27 Plaintiffs’ Complaint in its entirety for lack of subject matter

28 jurisdiction. The Court further DENIES Plaintiff’s motion for

em REI ON IERIE III EEO IEE SNE SIS EE DS Oe eee

1 summary judgment and Defendants’ cross-motion for summary

2 judgment as MOOT. The Clerk of the Court is directed to CLOSE

3 this case.

4 IT IS SO ORDERED.

5 Dated: October 11, 2022

6

: APs

JOHN A. MENDEZ

8 SENIOR UNITED*STATES DISTRICT JUDGE

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

12