Petition for Writ of Certiorari — Lyndsey Ballinger, et al., Petitioners v. City of Oakland, California

Appendix A-1

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

LYNDSEY BALLINGER; SHARON

BALLINGER,

Plaintiffs-Appellants,

v.

No. 19-16550

D.C. No.

4:18-cv-07186HSG

CITY OF OAKLAND,

OPINION

Defendant-Appellee.

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Submission Withdrawn July 16, 2021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

San Francisco, California

Filed February 1, 2022

Before: Richard R. Clifton, N. Randy Smith, and

Ryan D. Nelson, Circuit Judges.

Opinion by Judge R. Nelson

Appendix A-2

SUMMARY*

Civil Rights

The panel affirmed the district court’s dismissal

of an action brought pursuant to 42 U.S.C. § 1983

challenging the City of Oakland’s Uniform Residential

Tenant Relocation Ordinance, which requires

landlords re-taking occupancy of their homes upon the

expiration of a lease to pay tenants a relocation

payment.

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 Fourth and Fourteenth

Amendments.

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 landlordtenant 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.

* This summary constitutes no part of the opinion of the court. It

has been prepared by court staff for the convenience of the

reader.

Appendix A-3

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

between 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.

_________________________________________________

Appendix A-4

OPINION

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

taking. We therefore affirm the dismissal of the

Ballingers’ physical takings, exaction, and seizure

claims.

I

In September 2016, Lyndsey and Sharon

Ballinger leased their Oakland home for one year

while fulfilling military assignments on the east coast.

After one year, the lease converted to a month-tomonth 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. Oakland, Cal. Mun. Code

§ 8.22.360(A). Ending the tenancy, or “evicting,” for

good cause, includes when a landlord chooses to move

back into her home at the end of the month. Id.

§ 8.22.360(A)(8)–(9). In January 2018, the City

adopted the Uniform Residential Tenant Relocation

Ordinance (“the Ordinance”), which requires

landlords re-taking occupancy of their homes upon the

Appendix A-5

expiration of a lease to pay tenants a relocation

payment based on rental size, average moving costs,

the duration of the tenants’ occupancy, and whether

the tenants earn a low income, are elderly or disabled,

or have minor children. See id. § 8.22.820. Half the

payment is due upon the tenant’s receipt of the notice

to vacate and the other half upon actual vacation. Id.

§ 8.22.850(D)(1). And the payment need not be spent

on relocation costs. Failing in bad faith to make the

payments allows a tenant to bring an action against

the landlord for injunctive relief, the relocation

payment, attorneys’ fees, and treble damages. Id.

§ 8.22.870(A).

When the Ballingers 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 42 U.S.C. § 1983.

Characterizing the relocation payment as a “ransom”

of their home, they claimed that the relocation fee is

an unconstitutional physical taking of their money for

a private 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

Fourth and Fourteenth Amendments.

The district court dismissed each claim under

Federal Rule of Civil Procedure 12(b)(6). It held that

Appendix A-6

“no precedent supports the Ballingers’ argument that

legislation requiring the payment of money

constitutes a physical taking.” Because “[t]he

Ordinance . . . was generally applicable legislation,”

the district court concluded that it did not give rise to

an actionable exaction claim, and the Ballingers had

not shown the requisite state action for their seizure

claim. The Ballingers appealed.1

II

We review a dismissal under Federal Rule of Civil

Procedure 12(b)(6) de novo, accepting as true all

allegations of material facts. Mendiondo v. Centinela

Hosp. Med. Ctr., 521 F.3d 1097, 1100 n.1, 1102 (9th

Cir. 2008). “Dismissal under Rule 12(b)(6) is

appropriate only where the complaint lacks a

cognizable legal theory or sufficient facts to support a

cognizable legal theory.” Id. at 1104.

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

1 The City argues that because the Ballingers neglected to

include a statement of the issues presented in their opening brief

on appeal, we should dismiss their appeal for failure to comply

with Federal Rule of Appellate Procedure 28(a)(5). See Christian

Legal Soc’y Chapter of Univ. of Cal. v. Wu, 626 F.3d 483, 485 (9th

Cir. 2010). The Ballingers should have done so, but we see no

reason to dismiss this appeal when the Ballingers’ opening brief

otherwise makes the issues presented very clear.

Appendix A-7

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.

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 Fifth Amendment

provides that “private property” shall not “be taken for

public use, without just compensation.” U.S. Const.,

amend. V; see also Chi., Burlington & Quincy R.R. Co.

v. City of Chicago, 166 U.S. 226, 238–39 (1897)

(incorporating the Takings Clause through the

Fourteenth Amendment). “Whenever a regulation

results in a physical appropriation of property, a per

se taking has occurred.” Cedar Point Nursery v.

Hassid, 141 S. Ct. 2063, 2072 (2021). “[A]ppropriation

means taking as one’s own.” Id. at 2077 (citation and

quotation marks omitted). “Government action that

physically appropriates property is no less a physical

taking because it arises from . . . a regulation (or

statute, or ordinance, or miscellaneous decree).” Id. at

2072. The “essential question . . . is whether the

government has physically taken property for itself or

someone else—by whatever means—or has instead

restricted a property owner’s ability to use his own

property.” Id. We assess physical appropriations

“using a simple, per se rule: The government must pay

for what it takes.” Id. at 2071.

Appendix A-8

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 may place ceilings on

the rents the landowner can charge, or require the

landowner to accept tenants he does not like, without

automatically having to pay compensation.” Yee v.

City of Escondido, 503 U.S. 519, 529 (1992) (citations

omitted). “Ordinary rent control often transfers

wealth from landlords to tenants by reducing the

landlords’ income and the tenants’ monthly

payments,” and “[t]raditional zoning regulations can

transfer wealth from those whose activities are

prohibited to their neighbors.” Id. The “transfer [of

wealth] in itself does not convert regulation into

physical invasion.” Id. at 530 (challenge to mobile

home rent control should be analyzed as regulatory

taking); see also Com. Builders of N. Cal. v. City of

2 In the past, this court has analyzed regulations of the landlordtenant relationship as a regulatory taking rather than a physical

taking. See, e.g., Rancho de Calistoga, 800 F.3d at 1089 n.1 (“The

Supreme Court laid to rest any argument that a mobile home

rent control ordinance constitutes a physical taking . . . .”); MHC

Fin. LP v. City of San Rafael, 714 F.3d 1118, 1126–27 (9th Cir.

2013); Guggenheim v. City of Goleta, 638 F.3d 1111, 1120 (9th

Cir. 2010) (en banc). Those challenges failed. But here, the

Ballingers “rely solely on physical takings law,” and expressly

forego a regulatory takings claim. We therefore do not address

the principles of regulatory takings. See Tahoe-Sierra Pres.

Council, Inc. v. Tahoe Reg’l Plan. Agency, 535 U.S. 302, 323–24

(2002) (courts may not apply principles of physical takings claims

to regulatory takings claims).

Appendix A-9

Sacramento, 941 F.2d 872, 875 (9th Cir. 1991) (every

fee provision cannot be a compensable taking). So

legislative enactments “regulating the economic

relations of landlord and tenants are not per se

takings.” FCC v. Fla. Power Corp., 480 U.S. 245, 252

(1987).

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

3 Further, “[t]he government effects a physical taking only where

it requires the landowner to submit to the physical occupation” of

his property. Yee, 503 U.S. at 527; see also Fla. Power, 480 U.S.

at 252 (“This element of required acquiescence is at the heart of

the concept of occupation.”). The Ballingers never asserted that

there was a physical occupation of their property. To the

contrary, they invited their tenants to lease their property and

paid the relocation fee. See Yee, 503 U.S. at 532 (citing Fla.

Power, 480 U.S. at 252–53).

Appendix A-10

“[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 pay 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

landowner over objection to rent his property or to

refrain in perpetuity from terminating a tenancy.” Id.

at 528. Here, the Ordinance “is a regulation of [the

Ballingers’] use of their property, and thus does not

amount to a per se taking.” Id. at 532.

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,

Appendix A-11

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. 524 U.S. at 514–15, 517. In sum, a fourJustice 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

Appendix A-12

540 (Kennedy, J., concurring 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

the regulated entity elects to comply or the property it

uses to do so.” Id. at 540. But he concluded the statute

violated substantive due process and thus concurred

only in the plurality’s holding. Justice Breyer, writing

for the four Justices in dissent, agreed that the

Takings Clause is limited to claims based on “the

operation of a specific, separately identifiable fund of

money,” or “a specific interest in physical or

intellectual property . . . [but not] an ordinary liability

to pay money.” Id. at 554–55 (Breyer, J., dissenting).

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 opinions 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).

Appendix A-13

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,

4 Our prior applications of Eastern Enterprises either accord with

this conclusion, were reversed by the Supreme Court, or did not

reach the issue. See Chevron U.S.A., Inc. v. Bronster, 363 F.3d

846, 852 (9th Cir. 2004) (suggesting Eastern Enterprises is “of no

precedential value outside the specific facts of that case” (citing

Ass’n of Bituminous Contractors v. Apfel, 156 F.3d 1246, 1254–

55 (D.C. Cir. 1998))), rev’d on other grounds sub nom., Lingle v.

Chevron U.S.A., Inc., 544 U.S. 528 (2005); Wash. Legal Found. v.

Legal Found. of Wash., 271 F.3d 835, 854 (9th Cir. 2001) (en

banc) (relying on Eastern Enterprises plurality to hold that

money may only constitute a regulatory taking), aff’d, Brown,

538 U.S. at 235 (but agreeing with dissenters in part); Quarty v.

United States, 170 F.3d 961, 969 (9th Cir. 1999) (assuming

without deciding Eastern Enterprises plurality was binding and

finding no taking had occurred).

Appendix A-14

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

By way of example, money can be subject to a

taking when the government procures the interest

5 “[P]hysical takings jurisprudence is ‘as old as the Republic.’”

Cedar Point Nursery, 141 S. Ct. at 2071 (citation omitted).

Because the lack of records of discussion on the meaning of the

Takings Clause, the statements of its author, James Madison,

“thus provide unusually significant evidence about what the

clause was originally understood to mean.” William M. Treanor,

The Original Understanding of the Takings Clause and the

Political Process, 95 Colum. L. Rev. 782, 791 (1995); Akhil Reed

Amar, The Bill of Rights 78 (1998). Generally, Madison thought

a federal constitution would best protect property interests and

other rights. See The Federalist No. 10 (James Madison). One

year after the ratification of the Bill of Rights, Madison wrote

that the same sense of property includes “land, or merchandi[s]e,

or money.” James Madison, Property, Papers 14:266–68 (Mar. 29,

1792), reprinted in The Founders’ Constitution, ch. 16, available

at https://presspubs.uchicago.edu/founders/documents/v1ch16s

23.html. “Government,” he wrote, “is instituted to protect

property of every sort.” Id. “If there be a government then which

prides itself in maintaining the inviolability of property; which

provides that none shall be taken directly even for public use

without indemnification to the owner, and yet . . . violates their

actual possessions, in the labor that acquires their daily

subsistence, . . . such a government is not a pattern for the

United States.” Id.

Appendix A-15

earned on lawyers’ trust accounts, see Brown, 538 U.S.

at 235; Phillips, 524 U.S. at 160; procures the interest

accrued in interpleader funds, see Webb’s Fabulous

Pharmacies v. Beckwith, 449 U.S. 155, 162 (1980);

seizes ownership of liens, which are the right to

receive money secured by a particular piece of

property, see Armstrong v. United States, 364 U.S. 40,

48 (1960); demands that one pay a debt owed to a third

party to the state itself, see Ware v. Hylton, 3 U.S. (3

Dall.) 199, 245 (1796) (opinion of Chase, J.); Cities

Serv. Co v. McGrath, 342 U.S. 330, 335 (1952); or

seizes money without a court order, see Cedar Point,

141 S. Ct. at 2076 (“We have recognized that the

government can commit a physical taking . . . by

simply ‘enter[ing] into physical possession of property

without authority of a court order.’”); see also

Richard A. Epstein & Eduardo M. Peñalver, The Fifth

Amendment Takings Clause, Nat’l Const. Ctr.,

https://constitutioncenter.org/interactiveconstitution/

interpretation/amendment-v/clauses/634 (“bag full of

cash” is subject to physical taking).

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 Fifth Amendment

because taxes and user fees are collected in exchange

for government benefits to the payor. See Sperry

Corp., 493 U.S. at 62 n.9 (“artificial” to treat an award

deduction from Iran-United States Claims Tribunal

Appendix A-16

as a physical taking because “[u]nlike real or personal

property, money is fungible”); Brushaber v. Union

Pac. R. Co., 240 U.S. 1, 24–25 (taxes could constitute

a taking if “the act complained of was so arbitrary as

to constrain to the conclusion that it was not the

exertion of taxation, but a confiscation of property”);

see also Koontz, 570 U.S. at 615 (collecting cases

distinguishing taxes and user fees from money that

can be taken). Thus, when it comes to takings, “[t]he

Constitution . . . is concerned with means as well as

ends.” Horne, 576 U.S. at 362; see also Dickman v.

Comm’r of Internal Rev., 465 U.S. 330, 336 (1984)

(“We have little difficulty accepting the theory that

the use of valuable property—in this case money—is

itself a legally protectible property interest.”).

Here, the Ballingers’ rely on Koontz to argue that

the relocation fee is an unconstitutional taking. But

Koontz cuts against them. The exaction in Koontz

operated on “the direct link between the government’s

demand and a specific parcel of real property,” 570

U.S. at 614. The Ballingers claim that a direct link

exists between the government’s demand for their

money and their real property. We cannot deny that

the relocation fee here is linked to real property, but

no more so than property and estate taxes. Rather

than a mere obligation to pay in relation to the use of

one’s property, the government in Koontz demanded

and specifically identified that it wanted Koontz’s

payment of money in exchange for granting a benefit

to either Koontz’s parcel of land or another identified

parcel of land. Id. at 613 (“[U]nlike Eastern

Enterprises, the monetary obligation burdened

petitioner’s ownership of a specific parcel of land.”). So

the demand for payment in Koontz was “functionally

Appendix A-17

equivalent to other types of land use exactions” and

amounted to a taking of an interest in the real

property itself. Id. at 612–13 (“In that sense, this case

bears resemblance to our cases holding that the

government must pay just compensation when it

takes a lien—a right to receive money that is secured

by a particular piece of property.”).

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 Fair and Equitable Tobacco Reform Act,

Swisher Int’l, 550 F.3d at 1057; and

Appendix A-18

•

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 placed an unconstitutional

condition, called an exaction, on their preferred use of

their Oakland home. Though the Takings Clause

prohibits the government from “deny[ing] a benefit to

a person because he exercises a constitutional right”

or “coercing people into giving [those rights] up” by

imposing unconstitutional conditions on the use of

6 Because we hold that the relocation fee is not a taking, we need

not address the Ballingers’ arguments that the relocation fee is

taking for a private, rather than public, purpose and without just

compensation.

Appendix A-19

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

Appendix A-20

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

7 At least one Justice highlighted his disagreement. See, e.g., Cal.

Bldg. Indus. Ass’n v. City of San Jose, 136 S. Ct. 928, 928 (2016)

(Thomas J., concurring in denial of certiorari) (“I continue to

doubt that the existence of a taking should turn on the type of

governmental entity responsible for the taking.” (quotation

marks and citation omitted)); Parking Ass’n of Ga. v. City of

Atlanta, 515 U.S. 1116, 1117–18 (1995) (Thomas, J., joined by

O’Connor, J., dissenting in denial of certiorari) (“It is not clear

why the existence of a taking should turn on the type of

governmental entity responsible for the taking. A city council can

take property just as well as a planning commission can.”).

Appendix A-21

But the doctrine barring unconstitutional

conditions is broader than the exactions context. See

Koontz, 570 U.S. at 604 (collecting cases relating to

different contexts); Stop the Beach Renourishment,

Inc. v. Fla. Dep’t of Env’t Prot., 560 U.S. 702, 713–14

(2010) (“The Takings Clause . . . is not addressed to

the action of a specific branch or branches. 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 further 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,

Appendix A-22

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 exactions 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

Appendix A-23

Ordinance does not conditionally grant or regulate the

grant of a government benefit, such as a permit, and

therefore does not fall under the unconstitutionalconditions umbrella.

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 Fourth Amendment

applies to searches and seizures in the civil context.

United States v. James Daniel Good Real Prop., 510

U.S. 43, 51 (1993); see also Mapp v. Ohio, 367 U.S. 643,

655 (1961) (incorporating the Fourth Amendment

through the Fourteenth Amendment). To adequately

plead a seizure claim, a plaintiff must allege a

“deprivation of any rights, privileges, or immunities

secured by the Constitution and laws.” 42 U.S.C.

§ 1983. And to establish a deprivation of Fourth

Amendment rights, the Ballingers must allege the

seizure was caused by state action. See United States

v. Jacobsen, 466 U.S. 109, 113 (1984). The Ballingers

claim their tenants were “willful participant[s] in joint

activity with the State or its agents” and that the

Ordinance authorizes a “meaningful interference with

Appendix A-24

[the Ballingers’] possessory interest in [their]

property.” The district court correctly rejected these

arguments.

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 or 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

of 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

Appendix A-25

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 the 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.

8 We affirm dismissal of the Ballingers’ facial Fourth Amendment

challenge as well. Outside the First Amendment context, a facial

challenge must prove that a law is “unconstitutional in all of its

applications,” considering only those applications “in which [the

law] actually authorizes or prohibits conduct.” City of Los Angeles

v. Patel, 576 U.S. 409, 418 (2015) (citation omitted). But the

Ballingers’ as-applied seizure claim proves the Ordinance is not

“unconstitutional in all applications,” dooming a facial challenge.

See Bell v. City of Chicago, 835 F.3d 736, 739 (7th Cir. 2016)

(rejecting a facial Fourth Amendment seizure claim as “the

Ordinances’ actual application in [the plaintiffs’] case does not

violate the Fourth Amendment” (cleaned up)); see also Patel, 576

U.S. at 444–45 (Alito, J., dissenting) (questioning whether facial

Fourth Amendment claims are ever viable given that

“reasonableness . . . is pre-eminently the sort of question which

can only be decided in the concrete factual context of an

individual case” (citation omitted)).

Appendix B-1

Filed Aug. 2, 2019

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

LYNDSEY

BALLINGER, et al.,

Case No. 18-cv-07186-HSG

ORDER GRANTING

Plaintiffs, MOTION TO DISMISS

v.

Re: Dkt. No. 32

CITY OF OAKLAND,

Defendant.

Plaintiffs Lyndsey and Sharon Ballinger brought

this challenge to Defendant City of Oakland’s Uniform

Residential Tenant Relocation Ordinance, under

which they were required to pay their tenants nearly

$7,000 to move back into their Oakland home. The

City of Oakland moved to dismiss. See Dkt. No. 32.

The Court finds that the Ballingers have not pled a

cognizable legal theory and therefore GRANTS the

City’s motion without leave to amend.

I. BACKGROUND

The Court begins by summarizing the relevant

City of Oakland ordinances before turning to the

Ballingers’ allegations.

Appendix B-2

A. City of Oakland Ordinances

In 2003, the City of Oakland passed the Just

Cause for Eviction Ordinance, which prohibits

landlords from evicting their tenants without cause.

See Oakland, Cal., Mun. Code (“OMC” or “Code”)

§ 8.22.300–390.1 The City Council found that Oakland

had a “prolonged affordable housing crisis” and that

similar good cause protections in neighboring cities

(such as San Francisco, Berkeley, and Hayward)

“have aided community stability and reduced urban

problems associated with arbitrary disruption of

stable households.” OMC § 8.22.300. That ordinance

specifies what constitutes good cause for eviction,

such as when a tenant fails to pay rent or violates a

material term of the lease. See OMC § 8.22.360.A.1–2.

In addition, two categories of permissible no-fault

evictions (as defined in the ordinance) are relevant to

this lawsuit.2 First, a tenant may be evicted if the

“owner of record seeks in good faith, without ulterior

reasons and with honest intent, to recover possession

of the rental unit for his or her occupancy as a

All OMC provisions cited in this order are included in Exhibit

A to the City’s Request for Judicial Notice, see Dkt. No. 33

(“RJN”), and are also available online at https://library.

municode.com/ca/oakland/codes/code_of_ordinances.

Because

“[m]unicipal ordinances are proper subjects for judicial notice,”

Tollis, Inc. v. Cty. of San Diego, 505 F.3d 935, 938 n.1 (9th Cir.

2007), and the Ballingers do not oppose the request, see Opp. at

1 n.1, the Court takes judicial notice of the OMC.

1

Another category allows an owner to withdraw a property from

the rental market in accordance with California’s Ellis Act. See

OMC § 8.22.360.A.11. The Ballingers’ original complaint

contended that Oakland had violated the Ellis Act, see Compl.,

Dkt. No. 1 ¶¶ 99–103, but the amended complaint dropped that

legal theory.

2

Appendix B-3

principal residence where he or she has previously

occupied the rental unit as his or her principal

residence and has the right to recover possession for

his or her occupancy as a principal residence under a

written rental agreement with the current tenants.”

OMC § 8.22.360.A.8. Second, a tenant may be evicted

if the “owner of record seeks in good faith, without

ulterior reasons and with honest intent, to recover

possession for his or her own use and occupancy as his

or her principal residence.” OMC § 8.22.360.A.9.

On March 1, 2016, the Oakland City Council

adopted Ordinance Number 13358, which requires

landlords that evict tenants when withdrawing a unit

from the rental market under the Ellis Act to make a

relocation payment to the evicted tenants. See RJN

Ex. B; see also OMC § 8.22.450(A).

On January 16, 2018, the Oakland City Council

adopted the ordinance at issue in this lawsuit—the

Uniform Residential Tenant Relocation Ordinance

(“the Ordinance”). See First Amended Complaint

(“FAC”), Dkt. No. 29-1 Ex. A; see also OMC § 8.22.800–

870. The City Council found that “all major California

rent-controlled jurisdictions surveyed . . . require

relocation payments for no-fault evictions” and that

evicted tenants “face displacement and great

hardship” and “are forced to incur substantial costs

related to new housing.” See FAC Ex. A at 2.

Therefore, the Ordinance extended the relocation

payment program established by Ordinance Number

13358 to other no-fault evictions, including owner

move-in evictions and condominium conversions. See

id. The Ordinance set the uniform relocation payment

for qualifying no-fault evictions at $6,500 per unit for

Appendix B-4

studios and one-bedroom apartments, $8,000 per unit

for two bedroom apartments, and $9,875 per unit for

apartments with three or more bedrooms. See OMC

§ 8.22.820.A. These amounts were set to increase

annually based on the Consumer Price Index

adjustment. OMC § 8.22.820.D. Under the Ordinance,

a tenant who was ultimately evicted would be eligible

for one-third of the uniform relocation payment upon

move-in, two-thirds of the uniform relocation payment

after having lived in the unit for one year, and the

entire amount after two years of occupancy. OMC

§ 8.22.850.C.

B. The Ballingers’ Allegations

Lyndsey and Sharon Ballinger live with their two

children in a three-bedroom home on MacArthur

Boulevard in Oakland. See FAC ¶¶ 6, 22–23. Both

Ballingers are members of the military: Sharon is a

nurse practitioner currently stationed at Travis Air

Force Base and Lyndsey is transitioning from the D.C.

Air National Guard to a part-time role in the

California Air National Guard. Id. ¶ 22. In 2015, the

Ballingers were both active duty personnel in the

United States Air Force and received orders to

transfer to the Washington, D.C. area. Id. ¶ 24.

Because they intended to return to Oakland following

their assignment in Washington, they “decided to

temporarily rent their house while on duty.” Id. ¶ 25.

The Ballingers leased their MacArthur Boulevard

home for one year, beginning on September 13, 2016.

Id. ¶ 26; see also id. Ex. C (lease agreement). After the

one-year lease expired, it would convert to a monthto-month tenancy. Id. ¶ 26. Because Oakland had not

yet passed the Ordinance, the lease “did not anticipate

Appendix B-5

. . . a payment requirement, nor did it specifically

acknowledge that the Ballingers intended to return to

the home and use it as their primary residence.” Id.

¶ 27.

In late 2017, the Ballingers learned that they

would be reassigned to the Bay Area. Id. ¶ 28. The

following March, the Ballingers gave their tenants

sixty days’ notice to vacate the MacArthur Boulevard

house. Id. ¶ 29. Pursuant to the Ordinance, the

Ballingers informed their tenants of their right to a

$6,582.40 relocation payment and paid them half that

amount. Id. ¶¶ 29–30. When their tenants vacated the

house in late April 2018, the Ballingers paid them the

remaining $3,291.20 required under the Ordinance.

Id. ¶¶ 31–32. However, the Ordinance forced the

Ballingers to make the relocation payment “before the

tenants claimed or incurred any relocation costs and

without any means to verify how or where they would

spend the money.” Id. ¶ 33.

C. The Ballingers Bring Suit

The Ballingers brought suit against the City of

Oakland on November 28, 2018. See Dkt. No. 1. They

filed the FAC on February 26, 2019, asserting six

causes of action: (1) a facial Takings Clause claim for

physical taking of private property for a private

purpose, FAC ¶¶ 43–53; (2) facial and as-applied

claims for unconstitutional exaction of private

property, id. ¶¶ 54–64; (3) an as-applied claim for an

uncompensated and unconstitutional physical taking,

id. ¶¶ 65–73; (4) facial and as-applied claims for an

unreasonable seizure in violation of the Fourth

Amendment, id. ¶¶ 74–84; (5) an as-applied claim for

violation of due process, id. ¶¶ 85–95; and (6) a claim

Appendix B-6

for unconstitutional interference with the obligation

of contract, id. ¶¶ 96–104. The Ballingers seek a

declaratory

judgment,

permanent

injunction,

damages, fees, and costs. See id. (Relief Sought).

D. Oakland Moves to Dismiss

Oakland moved to dismiss the amended

complaint on March 12, 2019. See Dkt. No. 32 (“Mot.”).

The Ballingers opposed on March 25, see Dkt. No. 34

(“Opp.”), and Oakland replied on April 2, see Dkt. No.

35 (“Reply”). The Court held a hearing on the motion

on April 11, 2019. See Dkt. No. 36 (minute entry).

II. LEGAL STANDARD

Federal Rule of Civil Procedure 8(a) requires that

a complaint contain “a short and plain statement of

the claim showing that the pleader is entitled to

relief[.]” A defendant may move to dismiss a complaint

for failing to state a claim upon which relief can be

granted under Federal Rule of Civil Procedure

12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate

only where the complaint lacks a cognizable legal

theory or sufficient facts to support a cognizable legal

theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521

F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule

12(b)(6) motion, a plaintiff must plead “enough facts

to state a claim to relief that is plausible on its face.”

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

A claim is facially plausible when a plaintiff pleads

“factual content that allows the court to draw the

reasonable inference that the defendant is liable for

the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009).

Appendix B-7

In reviewing the plausibility of a complaint,

courts “accept factual allegations in the complaint as

true and construe the pleadings in the light most

favorable to the nonmoving party.” Manzarek v. St.

Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th

Cir. 2008). Nonetheless, Courts do not “accept as true

allegations that are merely conclusory, unwarranted

deductions of fact, or unreasonable inferences.” In re

Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir.

2008). And even where facts are accepted as true, “a

plaintiff may plead [him]self out of court” if he

“plead[s] facts which establish that he cannot prevail

on his . . . claim.” Weisbuch v. Cty. of Los Angeles, 119

F.3d 778, 783 n.1 (9th Cir. 1997) (quotation marks and

citation omitted).

If dismissal is appropriate under Rule 12(b)(6), a

court “should grant leave to amend even if no request

to amend the pleading was made, unless it determines

that the pleading could not possibly be cured by the

allegation of other facts.” Lopez v. Smith, 203 F.3d

1122, 1130 (9th Cir. 2000) (quotation marks and

citation omitted).

III. DISCUSSION

Oakland moves to dismiss all six of the Ballingers’

causes of action, as well as their requests for

injunctive and declaratory relief. The Court begins

with the Ballingers’ three Takings Clause causes of

action before turning to their other constitutional

causes of action.

Appendix B-8

A. Takings Clause Claims

The Takings Clause of the Fifth Amendment

provides that “[n]or shall private property be taken for

public use, without just compensation.” U.S. Const.

amend. V. A person who has suffered a taking at the

hands of a local government may bring a claim in

federal court under 42 U.S.C. § 1983 to obtain just

compensation. See Knick v. Twp. of Scott, 139 S. Ct.

2162, 2172 (2019).

The Supreme Court has drawn a distinction

between two types of takings: physical takings and

regulatory takings. See Tahoe-Sierra Pres. Council,

Inc. v. Tahoe Reg’l Planning Agency, 535 U.S. 302, 321

(2002). With respect to physical takings, the Fifth

Amendment’s “plain language requires the payment

of compensation whenever the government acquires

private property for a public purpose, whether the

acquisition is the result of a condemnation proceeding

or a physical appropriation.” Id. The same holds true

for “total regulatory takings,” where the government

“seeks to sustain regulation that deprives land of all

economically beneficial use.” Lucas v. S.C. Coastal

Council, 505 U.S. 1003, 1026–27 (1992). By contrast,

the Fifth Amendment “contains no comparable

reference to regulations that prohibit a property

owner from making certain uses of her private

property.” Tahoe-Sierra, 535 U.S. at 321–22. Thus, a

challenge to a regulatory taking requires “essentially

ad hoc, factual inquiries.” Penn Cent. Transp. Co. v.

City of New York, 438 U.S. 104, 124 (1978). The

government need compensate for a regulatory taking

“only if considerations such as the purpose of the

regulation or the extent to which it deprives the owner

Appendix B-9

of the economic use of the property suggest that the

regulation has unfairly singled out the property owner

to bear a burden that should be borne by the public as

a whole.” Yee v. City of Escondido, 503 U.S. 519, 523

(1992); see also Pa. Coal Co. v. Mahon, 260 U.S. 393,

415 (1922) (“The general rule at least is that while

property may be regulated to a certain extent, if

regulation goes too far it will be recognized as a

taking.”). Given the “longstanding distinction between

acquisitions of property for public use, on the one

hand, and regulations prohibiting private uses, on the

other,” the Supreme Court has warned that it is

“inappropriate to treat cases involving physical

takings as controlling precedents for the evaluation of

a claim that there has been a ‘regulatory taking,’ and

vice versa.” Tahoe-Sierra, 535 U.S. at 323.

At first glance, this case would seem to fit within

the regulatory taking category. After all, the

Ballingers challenge a city ordinance that regulates

how they make use of their property. But that is not

the theory the Ballingers have chosen to pursue.3

Rather, according to the Ballingers, the Ordinance is

an unconstitutional physical taking because it forces

them to “turn over private funds to other private

persons.” FAC ¶ 45; see also Opp. at 4. Because the

“plaintiff is the master of the complaint,” Caterpillar

Inc. v. Williams, 482 U.S. 386, 398–99 (1987), the

Court will analyze their claim as pled.

3

In fact, the Ballingers dropped their regulatory taking claim

when they filed the FAC. See Compl., Dkt. No. 1 ¶¶ 65–72.

Appendix B-10

i. Physical Taking for Private Purpose

The Ballingers’ first cause of action asserts that

the Ordinance, on its face, commands a physical

taking of private property for a private purpose, in

violation of the Fifth Amendment. See FAC ¶¶ 43–53.

The City contends that this cause of action must be

dismissed “because it does not state an independent

claim, but rather is a redundant attempt to challenge

the issue of whether the Ordinance serves a public

purpose.” Mot. at 6. Oakland relies on Rancho de

Calistoga v. City of Calistoga, in which the Ninth

Circuit held that a “‘private takings claim’ cannot

serve as an independent means to challenge an

alleged regulatory taking” but instead “must function

as part of the larger regulatory takings claim.” See 800

F.3d 1083, 1092 (9th Cir. 2015); see also MHC Fin.

Ltd. P’ship v. City of San Rafael, 714 F.3d 1118, 1129

n.5 (9th Cir. 2013) (assuming without deciding that

regulatory private taking claim was cognizable,

despite being aware of no court that has ever

recognized such a claim). The Ballingers assert that

Rancho does not apply, because it was a regulatory

takings case, and they are asserting a physical taking

of their property. Opp. at 4.

The Court agrees that Rancho’s limitation does

not apply to the Ballingers’ physical taking claims.

The Supreme Court has cautioned that courts should

“not apply . . . precedent from the physical takings

context to regulatory takings claims.” Tahoe-Sierra,

535 U.S. at 323–24. And in a challenge to a physical

taking, a plaintiff may assert that property was taken

for a private purpose in violation of the Fifth

Amendment. See Kelo v. City of New London, 545 U.S.

Appendix B-11

469, 477 (2005) (noting that “it has long been accepted

that the sovereign may not take the property of A for

the sole purpose of transferring it to another private

party B, even though A is paid just compensation”);

Haw. Hous. Auth. v. Midkiff, 467 U.S. 229, 245 (1984)

(“A purely private taking could not withstand the

scrutiny of the public use requirement; it would serve

no legitimate purpose of government and would thus

be void.”). The Court notes that the term “public use”

is construed broadly, to “afford[ ] legislatures broad

latitude in determining what public needs justify the

use of the takings power.” Kelo, 545 U.S. at 483. But

ultimately the Court need not—and, practically

speaking, cannot—decide whether there was a valid

public use, because it concludes that there was no

taking. Accordingly, the Court GRANTS the motion

to dismiss the first cause of action.

ii. Unconstitutional Exaction of Private

Property

In their second cause of action, the Ballingers

assert that the Ordinance is an unconstitutional

exaction of private property because it conditions the

exercise of their right to regain possession of their

property on paying their tenants a relocation stipend.

See FAC ¶¶ 55–57. Oakland argues that this claim

must be dismissed because the exaction analysis does

not apply, and even if it did, the Ordinance satisfies

the constitutional requirements.4 The Court begins

4 Oakland also argued that the Ballingers’ claim “is not ripe for

adjudication because [they] do not allege that they have

exhausted state law procedures for obtaining compensation,”

Mot. at 8, as was required by Williamson County Regional

Planning Commission v. Hamilton Bank of Johnson City, 473

Appendix B-12

with an overview of the unconstitutional exactions

doctrine before turning to its applicability here.

a. Unconstitutional Exactions

The “unconstitutional conditions doctrine” exists

to “vindicate[ ] the Constitution’s enumerated rights”

by ensuring that “the government may not deny a

benefit to a person because he exercises a

constitutional right.” Koontz v. St. Johns River Water

Mgmt. Dist., 570 U.S. 595, 604 (2013) (internal

quotation omitted). One “special application” of this

general principle is the exactions doctrine, which

exists to “protect[ ] the Fifth Amendment right to just

compensation for property the government takes

when owners apply for land-use permits.” Id.

The modern exactions doctrine was first

articulated in Nollan v. California Coastal

Commission, 483 U.S. 825 (1987). There, the

California Coastal Commission told the Nollans that

it would grant them a development permit to rebuild

their oceanfront home only if they created a public

easement so that beachgoers would have continued

access to the shore. Id. at 828–29. The Supreme Court

reaffirmed that “land-use regulation does not effect a

taking if it ‘substantially advance[s] legitimate state

interests’ and does not ‘den[y] an owner economically

viable use of his land.’” Id. at 834 (alterations in

original) (quoting Agins v. Tiburon, 447 U.S. 255, 260

U.S. 172, 195 (1985). Since this motion was submitted, the

Supreme Court overturned Williamson County. See Knick, 139 S.

Ct. at 2179. Thus, failure to exhaust no longer creates a

prudential barrier to federal court adjudication and the Court

will proceed to the merits.

Appendix B-13

(1980)). However, the Court found that conditioning

the permit on the creation of a public easement lacked

a nexus with the original purpose of the building

restriction, which had been to protect visual access to

the beach. See Nollan, 483 U.S. at 837. Therefore, the

condition was not a valid land-use regulation but

rather an attempt to advance state interests without

compensation, which amounted to an unconstitutional

exaction. See id. at 841–42.

Seven years later, in Dolan v. City of Tigard, the

Supreme Court considered a challenge to the city’s

attempt to condition approval of a redevelopment

permit on the property owner dedicating roughly 10%

of her property to an improved floodplain and a

pedestrian and bicycle path. See 512 U.S. 374, 379–80

(1994). The Court held this permit condition to be an

unconstitutional exaction, because the city had failed

to show a “rough proportionality,” meaning an

“individualized determination that the required

dedication is related both in nature and extent to the

impact of the proposed development.” Id. at 391.

Most recently, in Koontz, the Supreme Court

identified “the central concern of Nollan and Dolan:

the risk that the government may use its substantial

power and discretion in land-use permitting to pursue

governmental ends that lack an essential nexus and

rough proportionality to the effects of the proposed

new use of the specific property at issue, thereby

diminishing without justification the value of the

property.” 570 U.S. at 614. There, the Court held that

the exactions doctrine prohibited the government

from making “[e]xtortionate demands for property,”

meaning that a property owner could sue when the

Appendix B-14

government denied a permit for refusing to accept its

conditions. See id. at 606–07. In addition, the Court

held that monetary exactions—a requirement that a

property owner spend money, rather than give up a

property interest—were subject to the nexus and

rough proportionality requirements. Id. at 612.

b. Applicability of Exaction

Framework

Oakland contends that the Ordinance cannot be

analyzed under the exaction framework because no

property was transferred to the City and because

generally applicable legislation is not subject to the

exaction analysis. See Mot. at 8–9. The Court

considers each argument in turn.

1.

Transfer of Property

Interest

According to Oakland, the exaction framework

does not apply, because the “Ordinance works no

transfer of a property interest from Plaintiffs to the

City.” Mot. at 9. The Court does not find the analysis

nearly so simple and declines to rule on this ground.

The Supreme Court has made clear that when the

government takes physical possession of private

property, there is a taking. See Koontz, 570 U.S. at 615

(noting that policy that demanded a “transfer [of] an

interest in property from the landowner to the

government . . . would amount to a per se taking

similar to the taking of an easement or a lien”); see

also Tahoe-Sierra, 535 U.S. at 322 (“When the

government physically takes possession of an interest

in property for some public purpose, it has a

Appendix B-15

categorical duty to compensate the former owner

. . . .”). But “statutes regulating the economic relations

of landlords and tenants are not per se takings.” FCC

v. Fla. Power Corp., 480 U.S. 245, 252 (1987). And the

California Supreme Court has determined that

Nollan and Dolan apply only when the government

requires a “property owner [to] convey some

identifiable property interest.” Cal. Bldg. Indus. Ass’n

v. City of San Jose, 351 P.3d 974, 990 (Cal. 2015).

Despite the City’s characterizations, none of the

cases it cites stand for the principle that the property

must necessarily be transferred to the government to

constitute a taking. After all, in Nollan, it was the

general public, not the government, that benefitted

from the creation of a public easement to increase

beach access. See 483 U.S. at 837. Similarly, the

Ballingers have at least a plausible argument that

although no money is transferred to the government,

it is still put to public use because it helps to reduce

rental costs and prevent displacement. Moreover, Kelo

makes clear that the Takings Clause prohibits

physical takings of real property for purely private

purposes. See 545 U.S. at 477. But the Court

ultimately need not resolve this dispute because it

finds that the Ordinance cannot constitute a physical

taking for the simpler reason that it is generally

applicable legislation.

2. Generally Applicable

Legislation

Alternatively, Oakland contends that “generallyapplicable legislation is not subject to an exaction

analysis.” Mot. at 9. The Court agrees, because the

exaction doctrine exists to prevent the government

Appendix B-16

from using its coercive power to demand

unconstitutional conditions in adjudicative settings,

not to impede the enforcement of generally applicable

laws. See Koontz, 570 U.S. at 614 (noting that “direct

link between the government’s demand and a specific

parcel of real property” led to “the risk that the

government may use its substantial power and

discretion in land-use permitting” to exact

unconstitutional conditions).

In McClung v. City of Sumner, the Ninth Circuit

considered a challenge to a city ordinance requiring

that all new developments include storm drain pipes

at least 12 inches in diameter. See 548 F.3d 1219, 1227

(9th Cir. 2008). The court applied a Penn Central

regulatory takings analysis, after concluding that the

Nollan/Dolan

framework

applied

only

to

“adjudicative, individual determinations conditioning

permit approval on the grant of property rights to the

public” and not “general land use regulations.” Id. It

noted that extending Nollan/Dolan would mean

“subject[ing] any regulation governing development to

higher scrutiny and raise the concern of judicial

interference with the exercise of local government

police powers.” Id. at 1228.

The Ballingers argue that McClung does not

apply because “it was not clear that the restriction at

issue was actually an exaction, rather than a standard

land use regulation.” Opp. at 12. Perhaps—but the

same is true here. To be sure, one court in this district

has held that the Nollan/Dolan exaction framework

applies to a city ordinance requiring a monetary

payment before an owner may withdraw a housing

unit from the rental market. See Levin v. City & Cty.

Appendix B-17

of San Francisco, 71 F. Supp. 3d 1072, 1082–83 (N.D.

Cal. 2014). In so holding, Judge Breyer found that

“Koontz abrogated McClung’s holding that Nollan/

Dolan does not apply to monetary exactions, which is

intertwined

with

and

underlies

McClung’s

assumptions about legislative conditions.” Id. at 1083

n.4.

But this Court finds more persuasive Judge

Chhabria’s conclusion that Koontz did not overrule

McClung. See Bldg. Indus. Ass’n–Bay Area v. City of

Oakland, 289 F. Supp. 3d 1056, 1058 (N.D. Cal. 2018).

Judge Chhabria noted that “the Ninth Circuit and the

California Supreme Court have expressly stated that

a development condition need only meet the

requirements of Nollan and Dolan if that condition is

imposed as an ‘individual, adjudicative decision.’” Id.

(quoting McClung, 548 F.3d at 1227; citing Ehrlich v.

City of Culver City, 911 P.2d 429, 447 (Cal. 1996)). As

noted in Building Industry Association, the “exactions

doctrine . . . has historically been understood as a

means to protect against abuse of discretion by landuse officials with respect to an individual parcel[ ] of

land, and Koontz itself spoke of it in those terms.” Id.

at 1058–59. Limiting the exactions doctrine to

adjudicative decisions makes sense, because it is in

this context that the government can most easily use

its considerable power and discretion over permitting

to extract concessions from landowners when it would

otherwise be required to pay just compensation.

By contrast, property owners may exercise their

political power to oppose generally applicable

legislation that regulates their property in a manner

that they view as burdensome or unfair. See San Remo

Appendix B-18

Hotel L.P. v. City & Cty. of San Francisco, 41 P.3d 87,

105 (Cal. 2002) (“While legislatively mandated fees do

present some danger of improper leveraging, such

generally applicable legislation is subject to the

ordinary restraints of the democratic political

process.”); see also Bi-Metallic Inv. Co. v. State Bd. of

Equalization, 239 U.S. 441, 445 (1915) (Holmes, J.)

(“General statutes within the state power are passed

that affect the person or property of individuals,

sometimes to the point of ruin, without giving them a

chance to be heard. Their rights are protected in the

only way that they can be in a complex society, by

their power, immediate or remote, over those who

make the rule.”). Local governments frequently pass

laws that alter the value of property. See Loretto v.

Teleprompter Manhattan CATV Corp., 458 U.S. 419,

440 (1982) (noting that 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” and collecting cases). A

system in which every city ordinance was subject to

an unconstitutional exaction challenge would be

unworkable.

In sum, although it may be true that “lower courts

have divided over whether the Nollan/Dolan test

applies in cases where the alleged taking arises from

a legislatively imposed condition rather than an

administrative one,” Cal. Bldg. Indus. Ass’n v. City of

San Jose, 136 S. Ct. 928 (2016) (Thomas, J.,

concurring in denial of certiorari), the Ninth Circuit

has provided the answer for this Court. The

Ordinance did not constitute an unconstitutional

Appendix B-19

exaction because it was generally applicable

legislation, meaning that the Ballingers’ exaction

claim fails as a matter of law. Accordingly, the Court

need not engage in the comparatively fact-intensive

analysis of determining whether there was a nexus

and rough proportionality.

*

*

*

The Court finds that the Ballingers have not, and

cannot, plead an unconstitutional exaction claim

based on the Ordinance and thus GRANTS the

motion to dismiss this cause of action.

iii. Physical Taking

In their third cause of action, the Ballingers

contend that the Ordinance is “an unconstitutional

physical taking of property as applied to Plaintiffs,”

because it forces them to transfer money to their

tenants or otherwise “face severe financial penalties.”

See FAC ¶ 67–70. The City argues that this cause of

action must be dismissed because the Ordinance’s

“requirement that money transfer between two

private parties does not create a physical taking of

that money.” Mot. at 14–16.5

The “classic taking” is one “in which the

government directly appropriates private property for

its own use,” Tahoe-Sierra, 535 U.S. at 324 (internal

alteration and quotation omitted), such as when the

government requires landlords to allow the

5 Oakland also argued that the Ballingers failed to exhaust statelaw procedures for obtaining compensation, Mot. at 12, but the

ripeness doctrine was overruled by Knick, 139 S. Ct. at 2179.

Appendix B-20

installation of television cables on buildings, Loretto,

458 U.S. at 421. The constitutional protection against

per se takings without just compensation applies

equally to the physical appropriation of personal

property as it does to real property. See Horne v. Dep’t

of Agric., 135 S. Ct. 2419, 2426–27 (2015) (“The

Government has a categorical duty to pay just

compensation when it takes your car, just as when it

takes your home.”).

But no precedent supports the Ballingers’

argument that legislation requiring the payment of

money constitutes a physical taking, triggering the

just compensation requirement. To the contrary, a

plurality of Justices in Eastern Enterprises v. Apfel

agreed that the Coal Act’s creation of an obligation to

pay money to fund the health care costs of retired

miners did not constitute a physical taking. See 524

U.S. 498, 540 (1998) (Kennedy, J., concurring) (“[The

Coal Act] does not operate upon or alter an identified

property interest . . . . The law simply imposes an

obligation to perform an act, the payment of benefits.

. . . To call this sort of governmental action a taking as

a matter of constitutional interpretation is both

imprecise and, with all due respect, unwise.”); id. at

554 (Breyer, J., dissenting) (“The ‘private property’

upon which the [Takings] Clause traditionally has

focused is a specific interest in physical or intellectual

property. . . . This case involves not an interest in

physical or intellectual property, but an ordinary

liability to pay money, and not to the Government, but

to third parties.”). The courts of appeal that have

considered this question have held that Eastern

Enterprises established that “the mere imposition of

an obligation to pay money does not give rise to a

Appendix B-21

claim under the Takings Clause.” W. Va. CWP Fund

v. Stacy, 671 F.3d 378, 387 (4th Cir. 2011); see also

Commonwealth Edison Co. v. United States, 271 F.3d

1327, 1339 (Fed. Cir. 2001) (finding that “five justices

of the Supreme Court in Eastern Enterprises agreed

that regulatory actions requiring the payment of

money are not takings”). This Court agrees that

Eastern Enterprises is the law: the obligation to pay

money is not a taking. See Banks v. Cty. of San Mateo,

No. 16-CV-04455-YGR, 2017 WL 3434113, at *13

(N.D. Cal. Aug. 10, 2017) (noting lack of precedent in

the Ninth Circuit and following Eastern Enterprises to

find that “the charging of fees does not constitute a

violation of the Takings Clause”).

Nor has the holding of Eastern Enterprise been

altered by subsequent authority. Koontz held only

that monetary exactions in the permitting process

were subject to Nollan/Dolan scrutiny because they

burdened the ownership of an identifiable parcel of

land. See 570 U.S. at 613–14. But it did not bring all

general legislation requiring the transfer of money

within the realm of the Takings Clause. The

Ballingers also point to Horne, in which the Supreme

Court held that “a governmental mandate to

relinquish specific, identifiable property as a

‘condition’ on permission to engage in commerce

effects a per se taking.” See 135 S. Ct. at 2430. But

money is not specific, identifiable property. Rather,

“[u]nlike real or personal property, money is fungible.”

United States v. Sperry Corp., 493 U.S. 52, 62 n.9

(1989). And just because an ordinance mandates the

transfer of wealth, that “does not convert regulation

into physical invasion.” Yee, 503 U.S. at 530. To hold

otherwise would make it impossible for state and local

Appendix B-22

governments to exercise their “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, 458 U.S. at 440.

Finally, it is difficult to envision how exactly the City

of Oakland would pay just compensation for an

ordinance requiring the payment of money between

two private parties.

The Court finds that the Ballingers’ physical

taking claim is not cognizable and therefore GRANTS

the motion to dismiss the third cause of action.

B. Fourth Amendment Seizure

The Ballingers’ fourth cause of action asserts that

the Ordinance constitutes an unreasonable seizure of

their money and real property. See FAC ¶¶ 74–84. The

City contends that this cause of action must be

dismissed because “[r]egulation of private activity is

not state action,” and even if the Fourth Amendment

were applicable, the seizure would not be

unreasonable. See Mot. at 17.

Under the Fourth Amendment, a seizure “occurs

when there is some meaningful interference with an

individual’s possessory interests in that property.”

Soldal v. Cook Cty., 506 U.S. 56, 61 (1992) (internal

quotation omitted). Though most familiar in the

criminal

context,

the

Fourth

Amendment’s

protections also apply “in the civil context.” United

States v. James Daniel Good Real Prop., 510 U.S. 43,

51 (1993). But the Constitution constrains only state

action. Blum v. Yaretsky, 457 U.S. 991, 1003 (1982).

And “state action requires both an alleged

Appendix B-23

constitutional deprivation caused by the exercise of

some right or privilege created by the State or by a

rule of conduct imposed by the State or by a person for

whom the State is responsible, and that the party

charged with the deprivation must be a person who

may fairly be said to be a state actor.” Am. Mfrs. Mut.

Ins. Co. v. Sullivan, 526 U.S. 40, 50 (1999) (internal

quotations omitted).

In the Ballingers’ view, “the Ordinance forces the

Ballingers and others to choose between one of two

City-authorized seizures for tenant benefit—your

home or your money—or face substantial penalties.”

Opp. at 16. And because the City has created a “catch22 seizure situation,” the logic goes, it is subject to the

constraints of the Fourth Amendment. See id.

Even assuming for the sake of argument that the

Ballingers have alleged a seizure of either their house

or money, they have not met the preliminary

requirement of alleging that a state actor caused the

deprivation. The Ballingers cite a Fourth Circuit case,

Presley v. City of Charlottesville, for the proposition

that the state action requirement is met because the

“City authorized and compelled a seizure of money by

third parties.” Opp. at 15. In Presley, trespasses to

land committed by private citizens were attributed to

the city because it knowingly published an erroneous

map that encouraged the public to use a hiking trail

that trespassed through the plaintiff’s property. See

464 F.3d 480, 487–88 (4th Cir. 2006). Here, by

contrast, the only state action is the passage of the

Ordinance requiring the payment of money to tenants

who are evicted for no fault of their own. But the

“subtle encouragement” of passing a law “is no more

Appendix B-24

significant than that which inheres in the State’s

creation or modification of any legal remedy,” and

finding it to be state action would destroy the

“essential dichotomy between public and private acts.”

Am. Mfrs., 526 U.S. at 53 (internal quotation omitted).

The City’s mere authorization, as opposed to

encouragement, is not state action. See Am. Mfrs., 526

U.S. at 52; Flagg Bros., Inc. v. Brooks, 436 U.S. 149,

164–66 (1978) (holding that actions by private actors

taken pursuant to state statute are not state action).

Accordingly, because the Ballingers have not

alleged a constitutional deprivation at the hands of a

state actor, the Ballingers’ Fourth Amendment claim

fails as a matter of law and the Court GRANTS the

motion to dismiss this cause of action.

C. Due Process Violation

In their fifth cause of action, the Ballingers assert

that the Ordinance does not rationally advance any

legitimate governmental interest and is arbitrary,

particularly because of its retroactive nature, which

violates the Fourteenth Amendment’s guarantee of

due process. See FAC ¶¶ 85–95. The City moves to

dismiss, asserting that the Ordinance is not

retrospective and that it even if it was, it survives

rational basis review. See Mot. at 17–20.6

A “regulation that fails to serve any legitimate

governmental objective may be so arbitrary or

6 In its opening brief, the City also argued that “the due process

claim is subsumed by the Takings Clause.” Mot. at 17. In

response, the Ballingers clarify that they are bringing a

substantive due process claim, Opp. at 17, which the City agrees

is not subsumed by the Takings Clause, Reply at 12.

Appendix B-25

irrational that it runs afoul of the Due Process

Clause.” Lingle v. Chevron U.S.A. Inc., 544 U.S. 528,

542 (2005). “To constitute a violation of substantive

due process, the alleged deprivation must ‘shock the

conscience and offend the community’s sense of fair

play and decency.’” Sylvia Landfield Tr. v. City of Los

Angeles, 729 F.3d 1189, 1195 (9th Cir. 2013) (quoting

Marsh v. Cty. of San Diego, 680 F.3d 1148, 1154 (9th

Cir. 2012)). A law is not retroactive just because it

“upsets expectations based in prior law,” but only if it

“attaches new legal consequences to events completed

before its enactment.” Landgraf v. USI Film Prods.,

511 U.S. 244, 269–70 (1994). But even “[r]etrospective

economic legislation need only survive rational basis

review in order to pass constitutional muster.” Gadda

v. State Bar of Cal., 511 F.3d 933, 938 (9th Cir. 2007);

see also Gen. Motors Corp. v. Romein, 503 U.S. 181,

191 (1992).

The Ballingers’ substantive due process claim

fails as a matter of law because they do not meet the

“extremely high” burden, Richardson v. City & Cty. of

Honolulu, 124 F.3d 1150, 1162 (9th Cir. 1997), of

showing that the Ordinance is arbitrary and

irrational. First, the Ordinance is not retrospective,

because although it upset the Ballingers’ expectations

about the costs of evicting their tenants, it does not

attach any new legal consequences to events

completed before its passage. See Franceschi v. Yee,

887 F.3d 927, 940 (9th Cir. 2018) (holding that statute

revoking driver’s licenses for failure to pay past-due

taxes did not operate retroactively because it was

“dependent on a taxpayer’s current conduct . . . and

not on past conduct”). Second, the Ordinance passes

rational basis review, regardless of whether it acts

Appendix B-26

retroactively. The City Council’s legislative purpose,

to promote community stability and help tenants

avoid displacement and high moving costs, was a

legitimate one. See Pennell v. City of San Jose, 485

U.S. 1, 12–13 (1988) (holding that protection of

tenants is legitimate governmental purpose);

Apartment Ass’n of Greater L.A. v. City of Beverly

Hills, No. CV 18-6840 PSG (EX), 2019 WL 1930136,

at *7 (C.D. Cal. Apr. 17, 2019) (upholding challenge to

relocation payment ordinance against substantive due

process challenge). And the Ordinance is rationally

related to that legitimate end because it shifts some of

the costs of relocation from tenants evicted for no fault

of their own onto their landlords based on the size of

the rental property and the duration of the tenant’s

occupancy. Cf. Guggenheim v. City of Goleta, 638 F.3d

1111, 1122 (9th Cir. 2010) (en banc) (upholding rent

control ordinance against substantive due process

challenge). Thus, the Ballingers have not satisfied the

extremely high bar of showing that the duly-passed

Ordinance shocks the conscience so as to violate their

substantive due process rights.

The Court GRANTS the motion to dismiss the

due process claim because it concludes that the

Ballingers have not pled any facts to reasonably

support the conclusion that the Ordinance is

impermissibly retroactive, arbitrary, or irrational.

D. Contract Clause

The Ballingers’ sixth and final cause of action

asserts that the Ordinance violates the Constitution’s

Contract Clause. FAC ¶¶ 96–104.

Appendix B-27

The Contract Clause provides that “[n]o State

shall . . . pass any . . . Law impairing the Obligation of

Contracts.” U.S. Const. art. I, § 10, cl. 1. The “Contract

Clause limits the power of the States to modify their

own contracts as well as to regulate those between

private parties” but “does not prohibit the States from

repealing or amending statutes generally, or from

enacting legislation with retroactive effects.” U.S. Tr.

Co. of N.Y. v. New Jersey, 431 U.S. 1, 17 (1977). The

Clause is “narrowly construe[d]” in order “to ensure

that local governments can effectively exercise their

police powers.” S. Cal. Gas Co. v. City of Santa Ana,

336 F.3d 885, 889 (9th Cir. 2003).

To assess whether “laws affecting pre-existing

contracts violate the Clause,” courts engage in a twostep inquiry. Sveen v. Melin, 138 S. Ct. 1815, 1821

(2018). First, courts determine whether the state law

has “operated as a substantial impairment of a

contractual relationship.” Allied Structural Steel Co.

v. Spannaus, 438 U.S. 234, 244 (1978). This step

includes considering “the extent to which the law

undermines the contractual bargain, interferes with a

party’s reasonable expectations, and prevents the

party from safeguarding or reinstating his rights.”

Sveen, 138 S. Ct. at 1822. And “when considering

substantial impairment, [courts] focus on the

importance of the term which is impaired, not the

dollar amount.” S. Cal. Gas Co., 336 F.3d at 892.

Second, if there is substantial impairment, courts look

to the “means and ends of the legislation,” Sveen, 138

S. Ct. at 1822, including whether there is a

“significant and legitimate public purpose behind the

regulation,” Energy Reserves Grp., Inc. v. Kan. Power

& Light Co., 459 U.S. 400, 411 (1983). When the

Appendix B-28

government is not a party to the contract, courts must

“defer to legislative judgment as to the necessity and

reasonableness of a particular measure.” Id. at 413

(internal quotation omitted).

The Court finds that the Ordinance does not

substantially impair the agreement between the

Ballingers and their tenants. Tellingly, the Ballingers

are not able to muster any precedent to support their

arguments. And given the “existence of extensive

regulation” of the landlord-tenant relationship, the

Ballingers could not reasonably have expected the

regulatory

landscape

to

remain

unchanged

indefinitely. See id. at 416 (finding no impairment of

reasonable expectations where parties recognized

“existence of extensive regulation” in field); see also

Rancho de Calistoga, 800 F.3d at 1091 (noting that

“those who do business in a regulated field cannot

object if the legislative scheme is buttressed by

subsequent amendments to achieve the legislative

end”) (internal quotation and alterations omitted);

Chi. Bd. of Realtors, Inc. v. City of Chicago, 819 F.2d

732, 737 (7th Cir. 1987) (considering extent of prior

landlord-tenant regulation and denying motion for

preliminary injunction on Contract Clause claim).

After all, when they leased their house, the Ballingers

would have been required to make a relocation

payment to a tenant they evicted under the Ellis Act.

The Ordinance simply extended this obligation to

include no-fault evictions for owner move-ins. And the

Ordinance does not prohibit owner move-ins, it just

redistributes the costs so that tenants are not forced

to bear the full financial brunt of being evicted. Thus,

the relocation payment is not a “ransom requirement,”

Opp. at 21, but merely one more regulation added to

Appendix B-29

the stack of those governing the relationship between

Oakland landlords and their tenants.

The Court finds that the Ballingers have not

alleged a substantial impairment of their contractual

relationship and thus GRANTS the motion to dismiss

the Contract Clause cause of action.

E. Standing to Pursue Injunctive or

Declaratory Relief

Oakland contends that the Ballingers lack

standing to pursue either injunctive or declaratory

relief and that these claims for relief must be

dismissed. Mot. at 22–23. The Ballingers do not

respond to this argument.

A plaintiff “must show standing with respect to

each form of relief sought.” Ellis v. Costco Wholesale

Corp., 657 F.3d 970, 978 (9th Cir. 2011). To establish

standing, a plaintiff “must have suffered an injury-infact that is fairly traceable to the challenged conduct

and that is likely to be redressed by a favorable

judicial decision.” California v. Azar, 911 F.3d 558,

570 (9th Cir. 2018). And when a plaintiff seeks

prospective injunctive relief, he must establish “a real

and immediate threat of repeated injury” so as to show

“a sufficient likelihood that he will again be wronged

in a similar way.” Bates v. United Parcel Serv., Inc.,

511 F.3d 974, 985 (9th Cir. 2007) (quotations omitted).

Given that the Ballingers did not oppose this

ground for dismissal, and the Court has dismissed the

substantive claims, the Court declines to rule on

whether the Ballingers have adequately pled standing

to pursue injunctive or declaratory relief.

Appendix B-30

IV. CONCLUSION

The Court finds that the Ballingers have failed to

plead a cognizable legal theory on any of their

constitutional challenges to the Ordinance and thus

GRANTS the motion to dismiss. Further, the Court

grants the motion without leave to amend because it

finds that leave would be futile, as counsel for the

Ballingers acknowledged at the hearing that the

factual underpinnings are not disputed. Of course, in

granting this motion, the Court does not opine on the

wisdom or the effectiveness of the Ordinance in

alleviating what is undoubtedly a housing crisis in the

Bay Area. Cf. Miralle v. City of Oakland, No. 18-CV06823-HSG, 2018 WL 6199929, at *4 (N.D. Cal.

Nov.28, 2018) (noting that “the question before the

Court is not whether the City’s policy approach” to

addressing the “homelessness crisis” is “the ideal

policy approach”). But the Ballingers lack a cognizable

legal claim for the reasons discussed above, and that

finding ends the Court’s inquiry here.

The Clerk is directed to close the case and enter

judgment in favor of Defendants.

IT IS SO ORDERED.

Dated: 8/2/19

/s/ Haywood S. Gilliam, Jr.

HAYWOOD S. GILLIAM, JR.

United States District Judge

Appendix C-1

ARTICLE VII. UNIFORM RESIDENTIAL

TENANT RELOCATION ORDINANCE

8.22.800 - Purpose.

The purpose of this Section is to establish an

uniform amount for relocation payments for tenants

displaced by no-fault evictions.

(Ord. No. 13468, § 1, 1-16-2018)

8.22.810 - Definitions.

“Disabled” means a person with a disability, as

defined in Section 12955.3 of the Government Code.

“Elderly” means a person sixty-two (62) years old

or older.

“Lower-Income Tenant Household” means Tenant

Households whose income is not more than that

permitted for lower income households, as defined by

California Health and Safety Code Section 50079.5.

“Minor Child(ren)” means a person(s) who is

eighteen (18) years or younger at the time the notice

is served.

“Owner” or “Property Owner” means a person,

persons, corporation, partnership, limited liability

company, or any other entity holding fee title to the

subject real property. In the case of multiple

ownership of the subject real property, “Owner” or

“Property Owner” refers to each entity holding any

portion of the fee interest in the property, and the

property owner’s obligations in this Chapter shall be

joint and several as to each property owner.

Appendix C-2

“Qualifying Relocation Event” means any event or

vacancy that triggers a Tenant’s right to relocation

payments under the Oakland Municipal Code.

“Rental Unit” means a dwelling space in the City

containing a separate bathroom, kitchen, and living

area, including a single-family dwelling or unit in a

multifamily or multipurpose dwelling, or a unit in a

condominium or cooperative housing project, or a unit

in a structure that is being used for residential uses

whether or not the residential use is a conforming use

permitted under the Oakland Municipal Code or

Oakland Planning Code, which is hired, rented, or

leased to a household within the meaning of California

Civil Code Section 1940. This definition applies to any

dwelling space that is actually used for residential

purposes, including live-work spaces, whether or not

the residential use is legally permitted.

“Room” means an unsubdivided portion of the

interior of a residential building in the City which is

used for the purpose of sleeping, and is occupied by a

Tenant Household for at least thirty (30) consecutive

days. This includes, but is not limited to, a rooming

unit or efficiency unit located in a residential hotel, as

that term is defined in accordance with California

Health and Safety Code Section 50519. This definition

applies to any space that is actually used for

residential purposes whether or not the residential

use is legally permitted. For purposes of determining

the amount of relocation payments, a room is the

equivalent of a studio apartment.

“Tenant” means a Tenant as that term is defined

in O.M.C. 8.22.340.

Appendix C-3

“Tenant Household” means one (1) or more

individual Tenants who rent or lease a Rental Unit or

Room as their primary residence and who share living

accommodations. In the case where an individual

Room is rented to multiple Tenants under separate

agreements, each individual Tenant of such Room

shall constitute a “Tenant Household” for purposes of

this article.

(Ord. No. 13608, § 6(Att. E),

No. 13468, § 1, 1-16-2018)

7-21-2020;

Ord.

8.22.820 - Amount of relocation payments.

A. Unless otherwise specified in a Section of the

Oakland Municipal Code requiring relocation

payments, Tenant Households who are

required to move as a result of a Qualifying

Relocation Event shall be entitled to a

relocation payment from the Owner in the

sum of six thousand five hundred dollars

($6,500.00) per unit for studios and onebedroom apartments; eight thousand dollars

($8,000.00) per unit for two-bedroom

apartments; and nine thousand eight

hundred seventy-five dollars ($9,875.00) per

unit for units with three or more bedrooms.

The payment shall be divided equally among

all Tenants occupying the Rental Unit at the

time of service on the Tenants of the notice of

termination of tenancy.

B. Unless otherwise specified in a Section of the

Oakland Municipal Code requiring relocation

payments, Tenant Households in Rental

Units that include lower income, elderly or

Appendix C-4

disabled Tenants, and/or minor children shall

be entitled to a single additional relocation

payment of two thousand five hundred dollars

($2,500.00) per unit from the Owner. If a

household qualifies for this additional

payment, the payment shall be divided

equally among eligible (lower-income, elderly,

disabled,

parents/guardians

of

minor

children) Tenants.

C. In the case of temporary relocations under

O.M.C. 15.60.110 B., the amounts in

paragraphs A-B shall be a cap on relocation

payments.

D. The relocation payments specified in

subsection 8.22.820 A. shall increase annually

on July 1 in accordance with the CPI

Adjustment as calculated in OMC subsection

8.22.070 B.3, and the increase shall apply to

all eviction notices served on or after July 1.

The first increase shall take place on July 1,

2017.

(Ord. No. 13608, § 6(Att. E),

No. 13468, § 1, 1-16-2018)

7-21-2020;

Ord.

ARTICLE VIII. RELOCATION PAYMENTS FOR

OWNER OR RELATIVE MOVE-INS

8.22.850 - Relocation Payments for Owner or

Relative Move-Ins.

A. Applicability. An owner who evicts a tenant

pursuant to O.M.C. Section 8.22.360 A.9. or

where a tenant vacates following a notice or

Appendix C-5

other communication stating the owner’s

intent to seek recovery of possession of the

unit under this O.M.C. Section must provide

relocation payment under this Section.

Relocation payment procedures pursuant to

code compliance or Ellis Act evictions will be

governed by the Code Compliance Relocation

Ordinance and the Ellis Act Ordinance.

B. The property owner shall be responsible for

providing relocation payments, in the

amounts specified in Section 8.22.820, to an

eligible tenant household in the form and

manner prescribed under this article and any

rules and regulations adopted under this

article.

C. Tenant Eligibility for Payment. Tenants will

be eligible for relocation payments according

to the following schedule based on the

effective date of ay notice to terminate:

1. Upon taking possession of the rental unit,

the tenant will be eligible for one-third (⅓)

of the total payment pursuant to

subsection B., above.

2. After one (1) year of occupancy of the

rental unit, the tenant will be eligible for

two-thirds (⅔) of the total payment

pursuant to subsection B., above.

3. After two (2) years of occupancy of the

rental unit, the tenant will be eligible for

the full amount of the total payment

pursuant to subsection B., above.

Appendix C-6

D. Time for Payment.

1. The owner must pay the tenant half of the

relocation payment provided for in

Subsection

8.22.820 A.

when

the

termination notice is given to the

household and the remaining half when

the tenant vacates the unit.

2. The owner must pay the tenant the

additional payment provided for in Section

8.22.820 B. within fifteen (15) days of the

tenant’s notice of eligibility or the tenant

supplying documentation of the tenant’s

eligibility.

3. An owner who pays relocation expenses in

conjunction with a notice to quit as

required by this Section need not pay the

same relocation expenses with any further

notices to quit based on O.M.C. Section

8.22.360 A.9. for the same unit that are

served within one hundred eighty (180)

days of the notice that included the

required relocation payment. Nothing in

this paragraph relieves the owner from

portions of relocation expenses not yet

paid by the owner or received by the

tenant, including the remaining half due

when the tenant vacates the unit.

E. If an owner fails to make the relocation

payment as prescribed, the tenant may file an

action against the owner and, if the tenant is

found eligible for the relocation payments, the

tenant will be entitled to recover the amount

Appendix C-7

of the relocation payments plus an equal

amount as damages and the tenant’s

attorney’s fees. Should the owner’s failure to

make the payments as prescribed be found to

be in bad faith, the tenant shall be entitled to

the relocation payments plus an additional

amount of three (3) times the amount of the

relocation payments and the tenant’s

attorney’s fees.

F. Owners may apply for a zero-interest loan

from the City of Oakland for the purpose of

satisfying their relocation payment obligation

under this O.M.C Section if they meet the

eligibility criteria set forth below. An owner

qualifies for a relocation payment assistance

loan if they meet the following two (2)

conditions:

1. Ownership of fewer than five (5) units in

the City of Oakland. In the case of a

relative move-in, the relative must also

not own any other real estate property and

must be of low or moderate income as

defined by California Health and Safety

Code Section 50093.

2. The owner must be ineligible for a cash-out

refinance loan based on the underwriting

criteria for investment properties set

forward by Fannie Mae regulations.

Appendix C-8

The owner must also meet at least one (1) of the

following two (2) conditions to qualify:

1. The owner must not have more than six (6)

months of liquid financial reserves as

defined by Fannie Mae regulations.

2. The owner must qualify as low or

moderate income as defined by California

Health and Safety Code Section 50093.

The City Administrator may issue additional

regulations or guidance to implement this subsection.

(Ord. No. 13608, § 7(Att. F), 7-21-2020; Ord.

No. 13468, § 2, 1-16-2018; Ord. No. 13499, § 1, 7-242018)

8.22.860 - Violation—Penalty.

A. Criminal Penalties.

1. Infraction. Any property Owner violating

any provision or failing to comply with any

requirements of this article shall be guilty

of an infraction for the first offense.

2. Misdemeanor. Any property Owner

violating any provision or failing to comply

with any requirements of this article

multiple times shall be guilty of a

misdemeanor.

B. Administrative Penalties.

1. Administrative Citation. Any person

violating any provision or failing to comply

Appendix C-9

with any requirements of this article may

be assessed an administrative citation

pursuant to O.M.C. Chapter 1.12 for the

first offense.

2. Civil Penalties. Any person violating any

provision or failing to comply with any

requirements of this article multiple times

may be assessed a civil penalty for each

violation pursuant to O.M.C. Chapter

1.08.

C. Violation includes attempted violation. In

addition to failing to comply with this article,

it is also violation to attempt to have a Tenant

accept terms that fail to comply with this

article, including any of the following actions:

1. Asking the Tenant to accept an agreement

that pays less than the required relocation

payments;

2. Asking the Tenant to accept an agreement

that waives the Tenant’s rights; or

3. Upon a return to the unit, asking the

Tenant to pay a higher rent than is

permitted under this article or O.M.C.

Chapter 8.22.

(Ord. No. 13468, § 2, 1-16-2018)

8.22.870 - Civil Remedies.

A. Any person or organization who believes that

a property Owner or Tenant Household has

Appendix C-10

violated provisions of this article or the

program rules and regulations adopted

pursuant to this article shall have the right to

file an action for injunctive relief and/or

actual damages against such party. Whoever

is found to have violated this article shall be

subject to appropriate injunctive relief and

shall be liable for damages, costs and

reasonable attorneys’ fees. Treble damages

shall be awarded for a property Owner’s

willful failure to comply with the payment

obligation established under this article.

B. Nothing herein shall be deemed to interfere

with the right of a property Owner to file an

action against a Tenant or non-Tenant third

party for the damage done to said Owner’s

property. Nothing herein is intended to limit

the damages recoverable by any party

through a private action.

C. The City Attorney may bring an action

against a property Owner that the City

Attorney believes has violated provisions of

this article or any program rules and

regulations adopted pursuant to this article.

Such an action may include injunctive relief

and recovery of damages, penalties—

including any administrative citations or civil

penalties—treble damages, and costs and

reasonable attorney’s fees. The City Attorney

has sole discretion to determine whether to

bring such an action.

(Ord. No. 13468, § 2, 1-16-2018)