Reply Brief — Gene Gonzales, et al., Petitioners v. Jay Inslee, Governor of Washington, et al.

No. 23-935

In The

Supreme Court of the United States

____________________

GENE GONZALES AND SUSAN GONZALES, HORWATH

FAMILY TWO, LLC, AND THE WASHINGTON LANDLORD

ASSOCIATION,

Petitioners,

v.

GOVERNOR JAY INSLEE AND STATE OF WASHINGTON,

Respondents.

____________________

On Petition for Writ of Certiorari

to the Supreme Court of Washington

____________________

PETITIONERS’ REPLY IN SUPPORT OF

PETITION FOR WRIT OF CERTIORARI

____________________

DEBORAH J. LA FETRA

Pacific Legal Foundation

555 Capitol Mall,

Suite 1290

Sacramento, CA 95814

RICHARD M. STEPHENS

Stephens & Klinge LLP

10900 NE 4th Street

Suite 2300

Bellevue, WA 98004

JONATHAN M. HOUGHTON

Counsel of Record

Pacific Legal Foundation

3100 Clarendon Boulevard

Suite 1000

Arlington, VA 22201

(202) 888-6881

JHoughton@pacificlegal.org

Counsel for Petitioners

i

TABLE OF CONTENTS

Table of Contents ......................................................... i

Table of Authorities .................................................... ii

Introduction ................................................................ 1

Argument .................................................................... 2

I.

Certiorari Is Needed to Resolve this Conflict of

Law ................................................................... 2

II.

The Decision Below Was Grounded in Federal

Law ................................................................... 4

III. The Decision Below Is Justiciable ................... 6

IV. The Substantial Public Interest Warrants

Review .............................................................. 9

Conclusion ................................................................. 12

ii

Table of Authorities

Cases

74 Pinehurst LLC v. New York,

218 L.Ed.2d 66 (2024) ....................................... 1–2

Ala. Ass’n of Realtors v.

Dep’t of Health & Hum. Servs.,

594 U.S. 758 (2021) ............................................... 1

Arkansas Game & Fish

Comm’n v. United States,

568 U.S. 23 (2012) ............................................... 11

Armstrong v. United States,

364 U.S. 40 (1960) ................................................. 1

ASARCO Inc. v. Kadish,

490 U.S. 605 (1989) ............................................... 9

Burlington N. R. Co. v.

Bhd. of Maint. of Way Emps.,

481 U.S. 429 (1987) ............................................... 8

Cedar Point Nursery v. Hassid,

594 U.S. 139 (2021) ................................. 1, 3, 5, 12

Collier v. City of Tacoma,

121 Wash.2d 737 (1993) ........................................ 6

Delaware v. Prouse,

440 U.S. 648 (1979) ............................................... 5

Delaware v. Van Arsdall,

475 U.S. 673 (1986) ............................................... 5

F.C.C. v. Fla. Power Corp.,

480 U.S. 245 (1987) ........................................... 3–4

First Nat. Bank of Bos. v. Bellotti,

435 U.S. 765 (1978) ............................................... 8

iii

Fitzgerald v. Racing Ass’n of Cent. Iowa,

539 U.S. 103 (2003) ............................................... 5

Florida v. Powell,

559 U.S. 50 (2010) ................................................. 4

Friends of the Earth, Inc. v.

Laidlaw Env’t Servs. (TOC), Inc.,

528 U.S. 167 (2000) ........................................... 6–7

Gannett Co. v. DePasquale,

443 U.S. 368 (1979) ............................................... 8

Heart of Atlanta Motel, Inc. v.

United States,

379 U.S. 241 (1964) ............................................. 11

Heights Apartments, LLC v. Walz,

30 F.4th 720, rehearing and

rehearing en banc denied,

39 F.4th 479 (8th Cir. 2022) .................................. 2

Illinois v. Rodriguez,

497 U.S. 177 (1990) ............................................... 5

Kaiser Aetna v. United States,

444 U.S. 164 (1979) ............................................... 3

Knox v. Serv. Emps.

Int’l Union, Loc. 1000,

567 U.S. 298 (2012) ............................................... 7

Lingle v. Chevron U.S.A. Inc.,

544 U.S. 528 (2005) ............................................. 11

Loretto v. Teleprompter

Manhattan CATV Corp,

458 U.S. 419 (1982) ........................................... 3, 5

Michigan v. Long,

463 U.S. 1032 (1983) ......................................... 4–5

iv

Neb. Press Ass’n v. Stuart,

427 U.S. 539 (1976) ............................................... 8

Ohio v. Robinette,

519 U.S. 33 (1996) ................................................. 5

Pa. Coal Co. v. Mahon,

260 U.S. 393 (1922) ............................................... 9

Penn Central Transp. Co. v.

City of New York,

439 U.S. 883 (1978) ............................................... 4

Press-Enter. Co. v. Superior Ct. of

California for Riverside Cnty.,

478 U.S. 1 (1986) ................................................... 8

S. Pac. Terminal Co. v.

Interstate Com. Comm’n,

219 U.S. 498 (1911) ............................................... 8

U.S. Dep’t of Lab. v. Triplett,

494 U.S. 715 (1990) ............................................... 9

United States v. Causby,

328 U.S. 256 (1946) ......................................... 3, 11

United States v. W. T. Grant Co.,

345 U.S. 629 (1953) ............................................... 7

Wash. Food Indus. Ass’n &

Maplebear, Inc. v. City of Seattle,

1 Wash.3d 1 (2023) ................................................ 5

Weinstein v. Bradford,

423 U.S. 147 (1975) ............................................... 8

Yee v. Escondido,

503 U.S. 519 (1992) ........................... 1, 4–5, 10, 12

Yim v. City of Seattle,

194 Wash.2d 651 (2019) ........................................ 5

v

Zacchini v. Scripps-Howard Broad. Co.,

433 U.S. 562 (1977) ............................................... 6

U.S. Constitution

U.S. Const. art. III .............................................. 2, 6, 9

U.S. Const. amend. V .................................... 1, 4–5, 11

1

INTRODUCTION

When the Center for Disease Control enacted an

eviction ban to keep tenants in place during the

COVID-19 lockdown, this Court said that “preventing

[owners] from evicting tenants who breach their

leases intrudes on one of the most fundamental

elements of property ownership—the right to

exclude.” Ala. Ass’n of Realtors v. Dep’t of Health &

Hum. Servs., 594 U.S. 758, 765 (2021) (per curiam).

When the State of Washington implemented a

similar eviction ban for the same reason, the

Washington Supreme Court below “was not without

sympathy to the fact that the petitioners have been

made to bear the cost of accommodating a public

need.” Pet.App. 16a. Nonetheless, it held that

commandeering private property for public pandemic

housing was not a physical taking. It cannot be

reconciled with the precedents of this Court and the

Eighth Circuit.

Whether a local housing ordinance effects an

unconstitutional physical taking is a persistently

misunderstood

aspect

of

Fifth

Amendment

jurisprudence. It has caused splits of opinion amongst

the lower courts and is “an important and pressing

question.” 74 Pinehurst LLC v. New York, 218 L.Ed.2d

66, 66 (2024) (Thomas, J., respecting denial of

certiorari). Private property owners cannot be singled

out to bear the cost of public needs, Armstrong v.

United States, 364 U.S. 40, 49 (1960), but it still

happens nonetheless, as it did here.

This case presents an opportunity for this Court to

clarify and resolve the dispute about whether Yee v.

Escondido or Cedar Point Nursery v. Hassid governs

2

physical takings claims in the context of housing

regulations. It is an as-applied challenge to a

Washington executive order that “prevent[s]

petitioners from evicting actual tenants for particular

reasons,” 74 Pinehurst LLC, 218 L.Ed.2d at 66, but

without the reliance interests of other contexts such

as rent control.

The state court decision below was based upon

federal regulatory takings law and is justiciable.

Further, the Washington Supreme Court held that its

determination was not moot upon grounds that also

satisfy Article III.

The petition should be granted.

ARGUMENT

I.

Certiorari Is Needed to Resolve this

Conflict of Law

Although the State does not fully acknowledge the

conflict with this Court’s takings precedents, it does

recognize the conflict with the Eighth Circuit’s

Heights Apartments, LLC v. Walz, 30 F.4th 720,

rehearing and rehearing en banc denied, 39 F.4th 479

(8th Cir. 2022). Yet, by characterizing Heights as

incorrectly decided and siding with the dissent, the

State only emphasizes the need for this Court to

resolve the question, which has citable authority on

both sides.

The court below made two related substantive

holdings that warrant this Court’s review: (1) that a

physical taking can only occur upon an original

invasion by a stranger; and (2) that regulations of the

landlord-tenant relationship are exempt from

physical takings scrutiny.

3

Specifically, it held that because Petitioners

voluntarily signed a lease with their tenants at the

outset, the tenants are not strangers; and therefore,

Petitioners are not subject to a forced occupation—

regardless of whether the lease expired or the tenants

violated the terms. Pet.App.15a. The court’s adoption

of this irrevocable invitation is unsupported and

unsupportable and transforms all leases into a new

and qualitatively different occupancy of the State’s

choosing. It cannot be reconciled with Loretto v.

Teleprompter Manhattan CATV Corp., which held

that a physical invasion was categorically

unconstitutional and not simply a permissible

regulation of use; and moreover, that a landlord’s

ability to rent its property may not be conditioned

upon the waiver of a physical takings claim. 458 U.S.

419, 438–39 (1982).

Under Washington’s eviction ban, the tenant is

only the beneficiary of the property right

commandeered by the State to serve the public need

of housing people during a lockdown. Whether

government-mandated access to property ultimately

benefits a third-party (as in Cedar Point Nursery v.

Hassid, 594 U.S. 139, 143 (2021)), the public (Kaiser

Aetna v. United States, 444 U.S. 164, 166 (1979)), or

the government itself (United States v. Causby, 328

U.S. 256, 259 (1946)), the identity of the beneficiary

does not change the fact that the State appropriated

this fundamental property right in the first place.

Loretto, 458 U.S. at 432 n.9 (a physical taking is

“without regard to whether the State, or instead a

party authorized by the State, is the occupant”). When

the State takes absolute control of the right to exclude

it is a categorical physical taking. F.C.C. v. Fla. Power

Corp., 480 U.S. 245, 252–53 (1987) (“this element of

4

required acquiescence is at the heart of the concept of

occupation” and transforms third parties into

“interloper[s] with a government license”).

Consequently, the decision below conflicted with

this Court’s precedent when it placed all regulations

of the landlord-tenant relationship in a bucket

marked “not a taking.” Yee v. Escondido does not

categorically ban all physical takings cases within the

landlord-tenant sphere. Rather, it holds that

complaints about economic use and the amount of rent

that a housing provider can charge are to be evaluated

under Penn Central. Yee v. Escondido, 503 U.S. 519,

531 (1992) (citing Penn Central Transp. Co. v. City of

New York, 439 U.S. 883 (1978)). It also specifically

determined that a forced occupation could be

actionable as a physical takings claim. Id. at 531–32.

II.

The Decision Below Was Grounded in

Federal Law

State court decisions are reviewable by this Court

when the “decision fairly appears to rest primarily on

federal law, or to be interwoven with the federal law,

and when the adequacy and independence of any

possible state law ground is not clear from the face of

the opinion.” Michigan v. Long, 463 U.S. 1032, 1040–

41 (1983); Florida v. Powell, 559 U.S. 50, 50–51

(2010). Conversely, there is no jurisdiction if the

decision was based upon an independent state ground

that is “expressly assert[ed]” to be “distinct from, or

broader than, those delineated in [the Fifth

Amendment].” Powell, 559 U.S. at 50. The

independent state ground must render any decision by

this Court superfluous; in other words, as no more

than “an advisory opinion” that the state court could

5

freely ignore, leaving the original decision intact.

Long, 463 U.S. at 1042.

This Court has jurisdiction. Takings claims

brought under the Washington constitution are

decided based upon federal law. Wash. Food Indus.

Ass’n & Maplebear, Inc. v. City of Seattle, 1 Wash.3d

1, 29–35 (2023) (equivalent treatment of state and

federal takings claims, relying on federal caselaw);

Yim v. City of Seattle, 194 Wash.2d 651, 658–59 (2019)

(Washington “define[s] regulatory takings consistent

with federal courts applying the takings clause of the

Fifth Amendment,” and declines to recognize a

Washington-specific definition). When a state

constitution is applied identically to that of the U.S.

Constitution, jurisdiction is warranted. Fitzgerald v.

Racing Ass’n of Cent. Iowa, 539 U.S. 103, 106 (2003);

Delaware v. Prouse, 440 U.S. 648, 653 (1979).

In addition, the court below assumed that federal

law applied to its Takings question, Pet.App.15a, and

expressly based its reasoning upon its interpretation

of Cedar Point, Yee, and Loretto. Pet.App.14a–16a. It

held that the physical intrusion here was distinct from

the intrusion in Cedar Point and more akin to the

permissible regulation of the landlord-tenant

relationship in Yee. Pet.App.15a.

This Court is not deprived of jurisdiction because

the court below “assumed without deciding” that

federal law applied and cited to a state case.

Pet.App.15a. See, e.g., Ohio v. Robinette, 519 U.S. 33,

36–37 (1996); Delaware v. Van Arsdall, 475 U.S. 673,

678, n. 3 (1986). In fact, the only state case referenced

was Yim, which followed federal regulatory takings

law. Pet.App.15a. See Illinois v. Rodriguez, 497 U.S.

177, 182 (1990). Nor does the Court lack jurisdiction

6

because Petitioners raised state causes of action in

state court. The Washington Supreme Court expressly

distinguishes independent state law when it wants to.

See Collier v. City of Tacoma, 121 Wash.2d 737, 745–

46 (1993). Here it did not, and instead relied on federal

law to resolve the dispute. As such, review by this

Court is warranted. Zacchini v. Scripps-Howard

Broad. Co., 433 U.S. 562, 568 (1977) (“at the very least

the Ohio court felt compelled by what it understood to

be federal constitutional considerations to construe

and apply its own law in the manner it did”).

III.

The Decision Below Is Justiciable

The Washington Supreme Court held that this

case was justiciable even after the state rescinded the

eviction ban. It considered (1) whether the case is a

matter of public concern, (2) the need for an

authoritative determination to guide public officials,

(3) the likelihood of recurrence, and (4) the quality of

the advocacy. Pet.App.8a. “All four factors weigh[ed]

in favor of considering this case on the merits.” Id.;

Pet.App.47a–48a

(Washington’s

intermediate

appellate court held the same based on the first three

factors).

Likewise, Article III requires this Court to consider

Cases or Controversies, and mootness is one element

of general justiciability. For reasons substantially

similar to those found by the court below, both

exceptions to mootness under Article III are satisfied,

each of which independently provides jurisdiction.

Friends of the Earth, Inc. v. Laidlaw Env’t Servs.

(TOC), Inc., 528 U.S. 167, 189–91 (2000) (discussing

the voluntary cessation exception and the capable of

repetition yet evading review exception).

7

First, the State voluntarily ceased its eviction ban

after litigation was underway. “The voluntary

cessation of challenged conduct does not ordinarily

render a case moot because a dismissal for mootness

would permit a resumption of the challenged conduct

as soon as the case is dismissed.” Knox v. Serv. Emps.

Int’l Union, Loc. 1000, 567 U.S. 298, 307 (2012).

Moreover, “by the time mootness is an issue, the case

has been brought and litigated, often (as here) for

years [and] [t]o abandon the case at an advanced stage

may prove more wasteful than frugal.” Friends of the

Earth, Inc., 528 U.S. at 191–92. Thus, to defeat this

exception, the government has a “heavy burden of

persuading the court that the challenged conduct

cannot reasonably be expected to start up again.” Id.

at 189. If that burden remains unsatisfied, “the courts

have rightly refused to grant defendants such a

powerful weapon against public law enforcement.”

United States v. W. T. Grant Co., 345 U.S. 629, 632

(1953).

The State’s “triple confirmation” that the eviction

ban was rescinded (BIO.21) does not change the fact

that cessation was voluntary, nor prevent the State

from implementing it again; particularly when it was

enacted by executive order. Pet.App.79a–95a.

Furthermore, “since the [State] continues to defend

the legality of [its action], it is not clear why the

[State] would necessarily refrain from [the same

conduct] in the future.” Knox, 567 U.S. at 307. Thus,

the Washington Supreme Court expressly held that

there was a “likelihood of recurrence” of the

government conduct at issue and a corresponding

need for an authoritative determination to guide

public officials. Pet.App.8a (“Undoubtedly, our state

will face crisis again that will call for the use of

8

emergency power. It is appropriate for this court to

consider whether that power was used lawfully here

to guide its use in the future”).

Second, the eviction ban is capable of repetition yet

evading review. See Weinstein v. Bradford, 423 U.S.

147, 149 (1975) (when the disputed action was too

short in duration to be fully litigated and there was a

reasonable expectation that the complaining party

would be subject to the same action again). For short

lived orders especially, review shall not be denied

“simply because the order attacked has expired[.]”

Gannett Co. v. DePasquale, 443 U.S. 368, 377 (1979);

Neb. Press Ass’n v. Stuart, 427 U.S. 539, 547 (1976).

Here, the executive order that stripped Petitioners

of their right to exclude lasted just fifteen months.

Pet.App.79a–95a. The short duration of the eviction

ban evades review. First Nat. Bank of Bos. v. Bellotti,

435 U.S. 765, 774 (1978) (eighteen months was “too

short a period of time for appellants to obtain complete

judicial review”); S. Pac. Terminal Co. v. Interstate

Com. Comm’n, 219 U.S. 498, 514–16 (1911) (two-year

period was too short); Burlington N. R. Co. v. Bhd. of

Maint. of Way Emps., 481 U.S. 429, 436, n. 4 (1987)

(disputes resolved by executive or legislative action

are capable of repetition yet evading review).

It can also be reasonably assumed that Petitioners

will someday be subjected to a similar order. PressEnter. Co. v. Superior Ct. of California for Riverside

Cnty., 478 U.S. 1, 6 (1986). The Petitioners remain

housing providers in Washington, Pet.App.37a, and

the court below, familiar with the practices of

Washington’s political branches, recognized a

likelihood of future recurrence that mandated judicial

guidance. Pet.App.8a. The anticipated recurrence

9

does not depend on a future pandemic, but an eviction

ban enacted in response to any perceived emergency.

See Cal. Apt. Ass’n (CAA) Amicus Br. 5, 17–19 (“local

jurisdictions are increasingly inclined to treat such

moratoria as just another tool in their regulatory

toolbox”) (citing San Diego’s eviction ban in response

to flooding and Los Angeles’s eviction ban to prevent

homelessness).1

IV.

The Substantial Public Interest Warrants

Review

In the rush to protect tenants, government officials

often overlook that housing providers are worthy of

protection, too. And when the government attempts to

improve the public condition by forcing private owners

to pay for public benefits, there are often cascading,

negative impacts beyond just the constitutional

implications of taking “[the] shorter cut.” Pa. Coal Co.

v. Mahon, 260 U.S. 393, 416 (1922). Recognizing this,

Oregon, for example, compensated its landlords after

it forced them to provide public pandemic housing. See

More Housing Now Amicus Br. 12–14. But most

governments, including Washington, do not. The

Constitution exists to correct such oversights.

Petitioners Gene and Susan Gonzales exemplify

many of the nation’s housing providers. Pet.App.37a.

These small “mom and pop” landlords collectively own

approximately 50% of the single-family rental units

and 77% of the small building units; and one-third are

1 It is also arguable whether the constraints of Article III apply

this circumstance, where the Washington Supreme Court determined that this case was justiciable and there were no subsequent intervening events. See ASARCO Inc. v. Kadish, 490 U.S.

605, 617–23 (1989); U.S. Dep’t of Lab. v. Triplett, 494 U.S. 715,

730 (1990) (Marshall, J., concurring).

10

retirees who need the rental income to survive. See

Cato Inst. Amicus Br. 17. This group was also the

most likely to have tenants default on rent during the

pandemic. See Minn. Multi-Housing Ass’n (MMHA)

Amicus Br. 5.

When the government compels an owner to house

a non-paying, non-lease abiding tenant, often for an

indefinite term, the resulting distress hurts everyone.

The financial implications can be both lasting and

profound. See MMHA Amicus Br. 5, 8, 11–12

(estimating $97 million in rental debt in Minnesota in

2024); Apt. Ass’n of Greater L.A. Amicus Br. 21; GRE

Downtowner Amicus Br. 8–9. Particularly when the

owner remains responsible for the mortgage, taxes,

insurance, and maintenance. See MMHA Amicus Br.

6–7; CAA Amicus Br. 14–15; Rental Prop. Ass’n of

Wisc. Amicus Br. 7, 10. Eviction bans also force

owners to house tenants who engage in abusive or

criminal conduct or damage the property. See MMHA

Amicus Br. 10; CAA Amicus Br. 15.

Money judgments can be an insufficient remedy.

See MMHA Amicus Br. 13. And ultimately, eviction

bans decrease the availability of affordable housing as

owners struggle to shoulder the heavy burden of

maintaining this public benefit. See Rental Prop.

Ass’n of Wisc. Amicus Br. 10–14; Rental Housing

Ass’n of Wash. Amicus Br. 4; Cato Inst. Amicus Br.

14–16, 18–19. This is no small problem considering

the severe national housing shortage and the fact that

in 2020, there were 9.2 million units in arrears on

rent. Cato Inst. Amicus Br. 16, 18–19.

Moreover, neither Washington’s eviction ban, nor

COVID eviction bans in general, are isolated

incidents. Yee “inadvertently let a genie out of the

11

bottle.” CAA Amicus Br. 2. Forced transfers of

property rights, “are becoming commonplace,” Small

Prop. Owners of S.F. Inst. Amicus Br. 2, and part of

“an already growing trend … applied to residential

rental housing.” CAA Amicus Br. 4. Aspects of the

bans have remained permanent in some jurisdictions,

id. at 4–5, 11–15, 17–20, new bans have arisen, id. at

5, 17–18, and declarations of emergency foreshadow

more. Id. at 5, 19.

Nonetheless, the government, as always, retains

the power to regulate the landlord-tenant

relationship. The Fifth Amendment does not

circumscribe that power but simply holds that when

regulation “goes too far,” the government must also

pay for the property rights taken. Lingle v. Chevron

U.S.A. Inc., 544 U.S. 528, 536–37 (2005).

Consequently, the State’s concerns about the

potential impact upon its legislative prerogative are

unfounded. Arkansas Game & Fish Comm’n v. United

States, 568 U.S. 23, 36–37 (2012) (“Time and again in

Takings Clause cases, the Court has heard the

prophecy that recognizing a just compensation claim

would unduly impede the government’s ability to act

in the public interest. … The sky did not fall after

Causby, and today’s modest decision augurs no deluge

of takings liability.”) (cleaned up).

Nor do Petitioners seek the all-encompassing rule

that the State claims. Petitioners agree that antidiscrimination laws, such as those that drew the

State’s concern, could be implemented free of the

claim that their enactment was an unconstitutional

physical invasion. See, e.g., Heart of Atlanta Motel,

Inc. v. United States, 379 U.S. 241, 261 (1964). Rather,

Gonzales asks this Court to determine the narrow but

12

critically important question of whether Yee or Cedar

Point applies to regulations that force property

owners to cede their fundamental right to exclude to

tenants beyond the terms of a valid lease.

CONCLUSION

This Court should grant the petition.

DATED: May 2024.

Respectfully submitted,

JONATHAN M. HOUGHTON

Counsel of Record

Pacific Legal Foundation

3100 Clarendon Boulevard

Suite 1000

Arlington, VA 22201

(202) 888-6881

JHoughton@pacificlegal.org

DEBORAH J. LA FETRA

Pacific Legal Foundation

555 Capitol Mall,

Suite 1290

Sacramento, CA 95814

RICHARD M. STEPHENS

Stephens & Klinge LLP

10900 NE 4th Street

Suite 2300

Bellevue, WA 98004