Opposition Brief — Azul Pacifico, Inc. v. City of Los Angeles

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| Supren curt, U.S

No. 92-886 | Cour, wae

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IN THE DiC 21

Supreme Court of the United States « eur

OCTOBER TERM, 1992

AZUL PACIFICO, INC.,

Petitioner,

VS.

CITY OF LOS ANGELES,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

JAMES K. HAHN

City Attorney

CLAUDIA McGEE HENRY

Senior Assistant City Attorney

ANTHONY SAUL ALPERIN

Assistant City Attorney

GWENDOLYN R. POINDEXTER

Deputy City Attorney and

Counsel of Record

Los Angeles City Attorney’s Office

200 North Main Street

Room 1700, City Hall East

Los Angeles, California 90012

(213) 485-4511

Attorneys for Respondent

Lawyers Brief Service * Appeilate Brief Printers * (213) 613-1013 / (714) 720-1510

QUESTIONS PRESENTED

1. May petitioner separately seek a remedy directly

under the Fifth Amendment of the United States Consti-

tuticn in addition to the remedy provided by 42 U.S.C.

§ 1983?

2. Should the Court review the issue of the appropriate

Statute of limitations for a claim pled directly under the

Fifth Amendment of the United States Constitution when

there is no conflict on this issue in the courts?

3. Is an alleged regulatory taking claim ripe for review

before this Court when petitioner has failed to either

litisate that claim at trial or exhaust its available ad-

ministrative and state judicial remedies?

=

PARTIES TO THE PROCEEDINGS

The parties to the proceedings below are listed in the

caption of the Brief in Opposition presented to this

Court.

TABLE OF CONTENTS

Page

ee ee eR 4 iy y 2» i

PARTIES TO THE PROCEEDING......... il

TAL GF AUTHIORILIGS. 2 ett tte ttt Vv

OPINIONS AND ORDERS BELOW........ 2

i rg gs oe 6 ke ee pe 2

CONSTITUTIONAL PROVISIONS

rr Te eeseeee SISVOQIL.VERD 1 6 se tt te tt 2

Demers Gr tvee CASE .... 1s ee ees 3

A. Statement of Facts. ......+se-s2e8-s 3

m. Procedural History. . 1. 1 6 www wee 5

REASONS WHY THE WRIT

Beecpurne? Pe WMI . ww ttt tt th th tt 10

A. There Is No Conflict In The

Courts As To Whether There Is A

Separate Direct Cause Of Action

Under The Constitution When

There Is An Available Remedy

Under Section 1983. ........... 10

B. There Is No Conflict In The

Courts As To The Appropriate

Statute of Limitations To Apply

To A Cause of Action Seeking

Relief Directly Under The United

Te a a a 15

- iv -

Page

C. There Is No Conflict In The

Courts As To When A Takings

Claim Accrues For The Purpose

of The Statute of Limitations Or

So ee ee ee ee ee 18

D. Petitioner’s Regulatory Taking

Claim Is Not Properly Before

This Court Because It Was Not

So See eee ee 20

E. Petitioner’s Regulatory Taking

Claim Is Not Ripe For Review In

This Court Because Petitioner

Has Not Exhausted Administra-

tive Remedies Nor Sought And

Been Denied Just Compensation

oe 8 ee ee ee eee 22

NE Se 6 ee sw a ee 4s 4 Owe we 4 ae

APPENDIX A

Complaint For Declaratory Re-

lief, Injunction, Damages For

Violation of Civil Rights ........ A-]

APPENDIX B

Sec. 151.01 Declaration of Purpose . . B-1

-V-

TABLE OF AUTHORITIES

Page

Cases

Adickes v. S.H. Kress & Co.

ee ti.) Pare ee ee ee ee 20

Agins v. City of Tiburon

GAT Ue. Bee Lee 6.6 a ee 6, 20, 24

Barbaccia v. County of Santa Clara

Goi Ff. SUR. Dee ea eres 66 «8 ee ae ee 19

Bieneman v. City of Chicago

662 F. Supp. 1297 (N.D. Ill 1987), appeal

dismissed, 838 F.2d 962 (7th Cir. 1988) ..... 13

Bieneman v. City of Chicago

864 F.2d 463 (7th Cir. 1988). ........ 13-17

Bireline v. Seagondollar

ee ee ne ae ) rere o- 18

Bivens v. Six Unknown Named Agents

of Federal Bureau of Narcotics

Cee Wak SOW UNPTRD 6 64 O AO OES 11-13

Bretz v. Kellman

tan @ ae wee Coen Ot. 1960). os a VR 13

Carlson v. Green

GA0 Wiah SS CRS 8 bs ee oe eG 12, 17, 20

Colony Cove Association v. The City of Carson

No. B062956 (Cal. Ct. App.,

Pees. ag SOs 0 6 a % 4. S94E BE eee 24

ee

Page

Davis v. Passman

G41 U.S. GEO UITTS) 2 wc ee Fee ri, Ef

DeAnza Properties X Ltd. v. County

of Santa Cruz

936 F.2d 1084 (9th Cir. 1991)...... 10, 15, 18

First English Evangelical Lutheran Church

v. County of Los Angeles

ee ee ee re 13, 14, 23

Hall v. City of Santa Barbara

833 F.2d 1270 (9th Cir. 1986),

cert. den, 485 U.S. 940 (1988). . . 5, 7, 18, 21, 23

Hodel v. Virginia Surface Mining and

Reclamation Association

a ee) Pr a ee a 19

Hunt v. Robeson County Dept. of Social Serv.

816 F.2d 150 (4th Cir. 1987). ........ 13,14

Jackson v. City Council of Charlottesville, VA

659 F. Supp. 470 (W.D. VA 1987), aff’d in

part, 840 F.2d 10 (4th Cir. 1988) ...... 17-19

Jacobs v. United States

Ore Vil ES UID E 6 6 6 ae ek ee in, oe

Kostka v. Hogg

Soe Fam FF CeO Ge. SPT) as 8 ss ee ee 14

Letulle v. Scofield

308 U.S. 415 (1940), reh. den.,

See Ws Som CU OOO) cls 2 ce 8 ee ee 22

- Vil -

Page

Loretto v. Teleprompter Manhattan CATV Corp.

Pe Wide EP CRED 6 4 os oe 88 ee et 7

McDougal v. County of Imperial

Pe sae Oe CPU lls EPMO De 6 5 ee ew es 15

Molina v. Richardson

pe lk a ree 14

Monell v. New York City Dept. of Social Serv.

oR Ch ee ee ee ee ee 14

Morrison v. Metropolitan Area Transit

te ome Ret Cees Se BPRS) ke ce 13

N.L.R.B. v. Pittsburgh S.S. Co.

Se te Et ) ae a a a a 14

Nollan v. California Coastal Comm’n.

ge Ss a a a ae 6, 20, 24

Norco Constr. Inc. v. King County

ul ©.g@ S165 (9 Ce. 1986). 6 wc wc 18

Ocean Acres Limited Partnership v.

Dare County Board of Health

JOT F.26 103 (4th Cir. 1963). 2... ws ww 14,17

Palos Verdes Shores Mobile Estates, Ltd. v.

City of Los Angeles

142 Cal.App.3d 362,

ee NS EG: | a 4,5

Penfield Co. v. Securities & Exchange Comm.

ot ee 2 een ae a ne ee ak ee 22

ee ee

- Vili -

Page

Penn Central Transportation Co. v. New York City

Ce Wie MUU OEE 5 0 cs aie 8 ewe ee ee 6

Pennell v. City of San Jose

ne 6 ro ee Aca ee eee 7

Peter Henderson Oil Co. v. City of

Port Arthur, Tex.

ee ee Pe ee Sos RPP kk ee se we 18

Ross v. Moffitt

Ee ee EOP POE iis c's see Oe ee eee 19

Sandpiper Mobile Village v. City of Carpinteria

No. B058435, 1992 Cal.App. LEXIS 1228

(oR eo oe eb SS re 24

Sevier v. Turner

Fae ee oer Cee GE EROS). ee ee tes 18

Thomas v. Shipka

oT a A ys err 13

Trotter v. International Longshoremen’s

& Warehousemen’s Union

foe ve BE ee ee eer 18

United States v. Dickinson

ge | PR reer eee cee ar eee ee 19

Usher v. City of Los Angeles

Bae © ae aoe Cem Gil. 1967)... 8 es es 8, 16

Venegas v. Wagner

Joe P.ae 1144 (Fie Cis. 1963)... wt et oe 18

EEE

ie

Page

Ward v. Caulk

650 F.2d 1144 (9th Cir. 1981)...... 11-13, 19

Williamson County Regional Planning Commission

v. Hamilton Bank of Johnson City

Ce AOR Re ge eh || a a eae 23

Wilson v. Garcia

Des Mee OE RAP) ee eK ee 8, 9, 13-17

Yee v. City of Escondido

Bb A Mee oe). 4 7, 9, 20

Constitution

United States Constitution, Fifth Amend.. . . 8, 11, 16

Federal Statutes

ee ae ee ERD 60 ba ie 0 bl a 2

Se EE EE 6 cea ce ee a eee) oe Chee 2

er as Ee eos eo 2

Fo ae Bs | eee ae ord or eaeg aae 2

ee Se i a Re ee ee a ae 6

es Sees OB 6 kee a 9-11, 13, 14, 16, 21

State Statutes

California Civil Code

Sa Sek) ota kk OO eee ea ee a wea 4

Pr eee ee er oe ar rer er ee ayer ere 4

fe errr se ee et oe eee te ee ee 4

oe Cig ar astea gears etree make ERGs Aer 4

Page

Municipal Statutes

Los Angeles Municipal Code

SUR FF Sree ee eee eee ee ee

SR 6 0a ao 6 4 6s ee bee OE eel Se 2

Skok SS og. ee ae ear ae ae ee 4

Glo! £ S eee ee eee ee 4

No. 92-886

In The

SUPREME COURT OF THE UNITED STATES

October Term, 1992

AZUL PACIFICO, INC.,

Petitioner,

vs.

CITY OF LOS ANGELES,

Respondent.

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

Respondent City of Los Angeles (“City”) respectfully

requests that this Court deny petitioner, Azul Pacifico,

Inc.’s (“Azul”) Petition for Writ of Certiorari seeking

review of the decision of the Ninth Circuit Court of

Appeal vacating the judgment below. There is a lack of

subject matter jurisdiction based on the running of the

Statute of limitations. Further, the decision below

neither conflicts with any of this Court’s rulings nor

conflicts with other Courts of Appeals. Therefore, this

Court need not and should not grant Azul’s petition.

Moreover, this Court should not grant Azul’s petition

because Azul did not perfect, properly plead or preserve

any underlying claims upon which relief could be

granted.

<2

OPINIONS AND ORDERS BELOW

On July 23, 1992, the Ninth Circuit Court of Appeals

issued its Order granting rehearing. That Order resulted

in the opinion of the Ninth Circuit dated November 1,

1991, being withdrawn and the district court judgment

vacated. The July 23, 1992, Order is reported at 973

F.2d 704. See Petitioner’s Appendix (“Pet. App.”) B,

25a-27a. The November 1, 1991, opinion of the Ninth

Circuit is reported at 948 F.2d 575. Pet. App. A, 1a-24a.

On May 31, 1990, the district court filed its Opinion

after trial in this matter, which opinion is reported at 740

F.Supp 772. Pet. App. C., 28a-46a.

JURISDICTION

Jurisdiction in the district court was based upon 28

U.S.C. §§ 1331 and 1343(3). Jurisdiction in the Ninth

Circuit Court of Appeals rested upon 28 U.S.C. § 1291.

Jurisdiction before this Court is based upon 28 U.S.C.

§ 1254(1). Respondent received the Petition for Writ of

Certiorari on November 23, 1992, and is timely filing

this Brief in Opposition to the Petition for Writ of

Certiorari.

CONSTITUTIONAL PROVISIONS

AND STATUTES INVOLVED

Respondent agrees in substantial part with the state-

ment made by petitioner in this regard, with the excep-

tion that the case also involves § 151.00, et seg. of the

Los Angeles Rent Stabilization Ordinance, a portion of

which, § 151.01, is set out verbatim in Respondent’s

Appendix (“Resp. App.”) B attached herein.

>

STATEMENT OF THE CASE

A. Statement of Facts

Azul is the owner of the Tahitian Terrace Mobile

Home Park (“Park”), located in the City of Los Angeles.

The residents include senior citizens, many of whom are

on fixed incomes. As the landlord of the Park, Azul

rents mobilehome sites to its residents, who own the

individual homes located in the Park. Despite their

misnomer, mobilehomes are not truly mobile, and “in

general mobile home tenants tend to remain in the park

for many years and are a quite stable population of

renters.” Pet. App. C., 30a. This is because mobile-

homes are expensive to move, and the few available

parks to which to move them have very few spaces avail-

able. Pet. App. C., 30a. As a result, most coaches re-

main in mobilehome parks, and persons interested in

living in a particular park must purchase a coach in the

park to do so. -

Like in most California cities, there is a housing

shortage in Los Angeles, including a shortage of mobile-

home rental space. Pet. App. C., 30a. This shortage of

rental space, combined with the relative immobility of

coaches, has “historically led to abuses of mobile home

park tenants by landlords.” Pet. App. C., 30a. These

abuses have included charging exorbitant rents and

evicting tenants without cause, forcing “a tenant to sell

her mobile home to the owner at a fraction of its worth”

because there was no available space for the tenant to

move the home. Pet. App. C., 31a.

In 1978, California enacted a Mob.rehome Residency

Law designed, in part, to curb some of these abuses.

That law includes protections for mo»ilehome residents

against the termination of a tenancy ‘without cause, Cal.

+r

Civ. Code §§ 798.55 and 798.56, and the forcible re-

moval of a coach from the park upon a sale. Cal. Civ.

Code § 798.73. State law also provides that a landlord

cannot refuse to accept a new purchaser of a coach as a

tenant, except under limited circumstances generally

related to that person’s ability to pay rent and willing-

ness to follow park rules. Cal. Civ. Code § 798.74. Pet.

App. F, 60a-64a.

In 1978, the City of Los Angeles adopted § 151.00, et

seq. of the Los Angeles Municipal Code, known as the

Rent Stabilization Ordinance (“RSO”), which became

operative on May 1, 1979. Its purpose was to “regulate

rents so as to safeguard tenants from excessive rent

increases while at the same time providing landlords

with just and reasonable returns from their rental units.”

Resp. App. B-2.

Generally under the RSO, when a tenant voluntarily

vacates a rental or is evicted under certain specified

grounds, the landlord may re-rent the rental unit for any

amount, after which it becomes subject to the provisions

of the RSO. However, because “mobile home rent con-

trol differs significantly from rent regulation of apart-

ments due to the nature of a mobile home as a significant

financial investment for the mobile home park tenant,”

the RSO was amended in 1982 to add Subsection C 5 to

§ 151.06 of the Los Angeles Municipal Code. This

provision prohibited park operators from raising rents

upon the sale of a mobilehome coach. Pet. App. C., 45a.

The RSO was amended again in 1984, repealing Subsec-

tion C 5 of § 151.06 and replacing it with Subsection F,

which allows park owners to increase rents by 10% upon

sale of the mobilehome coach. The constitutionality of

the provisions of the RSO as applied to mobilehome

parks, including its limitation of rent increases has been

upheld by the California courts in Palos Verdes Shores

~~

Mobile Estates, Ltd. v. City of Los Angeles, 142

Cal.App.3d 362, 190 Cal.Rptr. 866 (1983).

B. Procedural History

Azul filed its complaint on April 10, 1987, five years

after the 1982 amendment to the RSO prohibiting any

rent increases upon coach sales, and three years after the

1984 amendment authorized a rent increase up to 10%

upon a coach sale. Azul’s only complaint about the RSO

was that there were limits on how much it could raise the

rent upon the sale of the tenant’s coach. It objected to

the 10% limit and wanted to be able to increase rents to

any amount. It wanted to do so irrespective of the im-

pact that excessive rents might have upon the ability of

existing tenants to sell their homes. However, Azul was

faced with the decision in Palos Verdes Shores uphold-

ing the constitutionality of the RSO against due process

and equal protection challenges.

Basing its complaint on the Ninth Circuit decision in

Hall v. City of Santa Barbara, 833 F.2d 1270 (9th Cir.

1986), cert. den, 485 U.S. 940 (1988), Azul filed in the

federal district court and claimed that the RSO, in con-

junction with the California Mobilehome Residency

Law, constituted a physical taking of its property. Azul

alleged that:

“The Rent Control Law has had the

effect of depriving the Plaintiff of all

use and occupancy of its real property

and granting to the tenants of mobile

homes presently in the Park, as well

as the successors in interest of such

tenants, the right to physically per-

manently occupy and use the real

property of Plaintiff.” Resp. App. A-2.

cs

It contended that “the operation and enforcement of

the Rent Control Law effects a taking of Plaintiff’s

property for public use and benefit without payment of

just compensation” and “constitutes a taking of property

in violation of the Fifth and Fourteenth Amendments to

the United States Constitution and a deprivation of civil

rights under color of law in violation of 42 U.S.C.

§§ 1981 and 1983.” Resp. App. A-3.

Azul never alleged a regulatory taking. Penn Central

Transportation Co. v. New York City, 438 U.S. 104

(1978). It did not allege that the RSO deprived it of all

economic use under the standards enunciated in Agins v.

City of Tiburon, 447 U.S. 255 (1980), or that it failed to

“substantially advance a legitimate state interest” under

Nollan v. California Coastal Comm’n., 483 U.S. 825

(1987).

At trial, Azul relied exclusively on its claim of perma-

nent physical occupation. It presented evidence solely to

Support its allegation that the RSO constituted a physical

taking of property to prove: “(1) that the effect of the

Los Angeles Rent Stabilization Ordinance has been and

is to deprive Plaintiff of an interest in its land and trans-

fer that interest to Plaintiff’s tenants; (2) that Plaintiff’s

tenants are thereafter able to sell that transferred interest

for value, (3) that Plaintiff’s tenants do sell that trans-

ferred interest for value, (4) that Plaintiff’s tenants’

Sales of such transferred interests occur in an established

market, and (5) that Plaintiff’s tenants have and do

receive windfalls upon the sales of coaches.” Plaintiff’s

Trial Brief at 2.

1 Azul’s Section 1981 claim was dismissed upon the City’s motion

to dismiss. Pet. App. D, 55a-56a.

.

After a three-week court trial, the district court, ac-

knowledging that “[t]he parties agree that this case is

controlled by the Ninth Circuit decision in Hall ...,” not

surprisingly found that the RSO amounted to an uncon-

Stitutional physical taking.” Pet. App. C., 32a. While

acknowledging under the three-tier Hall test that the

provision of the RSO does advance a legitimate state

interest, the district court believed itself compelled un-

der Hall to find that it constituted a physical taking.° In

fact, the court noted that “the plaintiff does not argue

that there was no legitimate state interest in enacting the

Rent Stabilization Ordinance, including the vacancy

control provisions.” (Emphasis added.) Pet. App. C.,

43a. The district court went to great lengths to explain

that under this Court’s standard in Pennell v. City of San

Jose, 485 U.S. 1 (1988), ordinances which regulate

landlord and tenant relationships are a valid exercise of

the state’s police power. Thus, the court found that

where the City’s goal through “vacancy control” was to

“protect the substantial investments of tenants in a dis-

torted market where demand far exceeds supply, the

ordinance advances a legitimate governmental objec-

tive.” Pet. App. C., 44a. Nonetheless, applying Hall to

the facts before it, the district court felt constrained to

invalidate the vacancy control provision. Pet. App. C.,

46a. Accordingly, it issued an injunction against the

2 Hall, which of course has since been overruled by this Court in

Yee v. City of Escondido, 112 S.Ct. 1522 (1992), was considered a

takings case based on a physical takings theory akin to Loretto v.

Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982), as

distinct from a reguiatory taking akin to Penn Central.

> Hall provided a three-part test to evaluate a physical takings

allegation: 1) does the governmental action constitute a physical

taking; 2) does the action advance a legitimate governmental

interest; and 3) has just compensation been paid? 833 F.2d at 1274.

ci.

City’s enforcement of the provision and imposed dam-

ages in the amount of $1,002,240.

Addressing the City’s statute of limitations argument

raised in a summary judgment motion and renewed at

trial, the court found that the ordinance worked a

“continuing wrong” which occurred each time a mobile-

home coach was sold, and thus tolled the statute of limi-

tations as to the cause of action. It acknowledged that

the principles of Wilson v. Garcia, 471 U.S. 261 (1985)

were applicable here to determine the limitations period,

but applied Wilson to limit recovery of damages, rather

than applying it to bar the action. Thus, the district

court applied California’s personal injury statute of

limitations of one year, citing Usher v. City of Los

Angeles, 828 F.2d 556 (9th Cir. 1987), to limit the recov-

ery of damages to one year prior to the filing of the

lawsuit. (The district court drew no distinction between

a “direct” cause of action filed under the Fifth Amend-

ment, as Opposed to a § 1983 claim, but spoke broadly

about the application of the statute of limitations to the

case in general.)

The City appealed the judgment. Azul appealed the

district court’s denial of its application of costs for ex-

pert witness fees. It did not appeal the court’s ruling

that the challenged RSO provision substantially ad-

vances a legitimate governmental interest.

On November 1, 1991, the Court of Appeals affirmed

the decision below in part. In an Opinion authored by

Judge Alex Kozinski, who also authored Hall, the court

reasoned that the vacancy control provision worked a

physical taking under Hall. Pet. App. A, 11a. It also

agreed with the district court that the ordinance furthered

a legitimate governmental interest. Pet. App. A, 14a. It

recognized that the vacancy control provision serves the

Same governmental purpose as the RSO: protecting

1.

incumbent tenants “from being forced to sell the coaches

at distress-sale prices in the event landlords were to set

rents for new tenants so high that no one would want to

buy the coach.” The court held that “there is a sufficient

nexus between the challenged provision and a legitimate

justification.” Pet. App. A, 14a.

Unlike the district court, however, the Ninth Circuit

found that the “continuing wrong” theory was _ inap-

plicable to the facts in Azul and correctly determined that

the cause of action accrued when the challenged or-

dinance was enacted. Pet. App. C., 19a. It held that the

§ 1983 action was barred by the statute of limitations by

application of the rule of Wilson v. Garcia, 471 U.S. 261

(1985).

However, without the benefit of prior briefing on the

issue, the court also determined that Azul had pled a

“direct” cause of action under the Constitution which

was governed by a wholly different statute of limita-

tions.

On November 15, 1991, the City filed its petition for

rehearing. Azul filed its response. Both briefs con-

Stituted the first time the issue of the availability of a

“direct” cause of action under the facts presented here

was extensively briefed by the parties.

On July 23, 1992, the Ninth Circuit issued its Order

granting the City’s petition and withdrawing its earlier

opinion.” Citing established precedent both in the Ninth

Circuit and other circuits across the nation, the Court of

Appeal determined that Azul’s complaint was indeed

4 It also invalidated the injunction as being an inconsistent remedy

under the just compensation provision of the Constitution and

remanded the case for a different calculation of damages.

> In the interim, this Court decided Yee v. City of Escondido, 112

S.Ct. 1522 (1992), which overruled Hall.

» Ss

barred by the statute of limitations. It determined that

there is no cause of action directly under the Constitu-

tion in this instance since Azul had an available remedy

under § 1983. Since the cause of action accrued when

the challenged ordinance was adopted, DeAnza Proper-

ties X Ltd. v. County of Santa Cruz, 936 F.2d 1084, 1085

(9th Cir. 1991), Azul should have filed its complaint

“within three years of the May 1982 date of enactment

or within one year of the Supreme Court’s decision in

Wilson v. Garcia, 471 U.S. 261 (1985).” Pet. App. B.,

26a. Thus, the district court’s judgment was vacated

because of the lack of subject matter jurisdiction. This

. decision was not in error.

REASONS WHY THE WRIT

SHOULD BE DENIED

A. There Is No Conflict In The Courts

As To Whether There Is A Separate

Direct Cause Of Action Under The

Constitution When There Is An

Available Remedy Under Section

1983.

Petitioner apparently contends that this Court should

grant its petition because the decision below conflicts

with a “series of decisions by this Court,” Pet. at 13, as

well as decisions from other circuits. However, the

Ninth Circuit decision was based on existing precedent

from this Court as well as decisions from its own and

other circuits. No real or direct conflict exists. Accord-

ingly, no issue has been presented requiring a decision

by this Court.

eth«

While the Fifth Amendment is “self-executing” in the

sense that the remedy of just compensation is grounded

in the Constitution, it does not follow that a separate

direct cause of action exists in addition to an available

Statutory remedy.

This Court and others have said that a direct cause of

action is not available if a plaintiff has a statutory

remedy to redress constitutional wrongs. Davis v.

Passman, 441 U.S. 228 (1979); Ward v. Caulk, 650 F.2d

1144 (9th Cir. 1981).

In Davis v. Passman, supra, 441 U.S. 228, the Court

held that an action involving a sex discrimination claim

by a Congressional employee against a Congressman

could be filed directly under the Fifth Amendment but

only because the plaintiff did not otherwise have a statu-

tory remedy available to her, stating that litigants alleg-

ing constitutional deprivations “and who at the same

time have no effective means other than the judiciary to

enforce these rights, must be able to invoke the existing

jurisdiction of the courts for the protection of their jus-

ticiable constitutional rights.” 442 U.S. at 242.

In Jacobs v. United States, 290 U.S. 13 (1933), the

Court established that “statutory recognition [is] not

necessary,” to bring a suit for just compensation. The

question here is what remedy is appropriate when there

is a Statutory remedy available, namely § 1983, to

redress all forms of constitutional violations as torts,

including takings of property without just compensation.

In Davis, the Court relied on its reasoning in Bivens v.

Six Unknown Named Agents of Federal Bureau of

Narcotics, 403 U.S. 388 (1971), where the Court al-

lowed a direct cause of action under the Constitution

because, otherwise, plaintiffs would have been left with

no remedy to redress violations of the Constitution.

=>

Later, in Carlson v. Green, 446 USS. 14 (1980), the

Court stated:

“

- a [Bivens] cause of action may

be defeated in a particular case, how-

~ver, In two situations. The first is

when defendants demonstrate “special

factors counselling hesitation in the

absence of affirmative action by Con-

gress’ ... [citations omitted] ... The

second is when defendants show that

Congress has provided an alternative

remedy which it explicitly declared to

be a substitute for recovery directly

under the Constitution and viewed as

equally effective.” 446 U.S. at 18.

In Carlson, this Court viewed § 1983 actions as serv-

ing the same purpose as Bivens by providing a Statutorily

adequate remedy to redress constitutional wrongs, and

considered it an “equally effective” remedy as Bivens.

Thus, “complimentary” relief under both Bivens, (i.e., a

“direct” cause of action under the Constitution) and a

Statutory remedy is not necessary where the Statutory

remedy is effective.°

Following the Court’s lead in these cases, the Ninth

Circuit judgment below relied on established precedent,

overlooked in its initial November 1, 1991 opinion, but

cited in support of its July 23, 1992 opinion. For ex-

ample, Ward v. Caulk, 650 F.2d 1144 (9th Cir. 1981)

looked to the Court’s decision in Carlson vy. Green,

° In Carlson, the Court determined that the Statutory remedy

involved there, the Federal Tort Claims Act (FTCA), was not as

effective as a Bivens remedy and allowed the Bivens Suit, even

though plaintiff’s allegations could also Support a suit under the

FTCA.

=. oe

supra, 446 U.S. 14, in holding that the plaintiff there did

not have a separate cause of action under the Constitu-

tion because it had a remedy under § 1983. In Bretz v.

Kellman, 722 F.2d 503 (9th Cir. 1983), the court fol-

lowed the precedent established in Ward v. Caulk and,

applying the Bivens rationale, came to the same

conclusion.

As the Ninth Circuit noted, other circuits are in ac-

cord, citing Thomas v. Shipka, 818 F.2d 496 (6th Cir.

1987); Hunt v. Robeson County Dept. of Social Serv.,

816 F.2d 150 (4th Cir. 1987); Morrison v. Metropolitan

Area Transit, 702 F.2d 1037 (D.C. Cir. 1983); and

Bieneman v. City of Chicago, 662 F. Supp. 1297 (N.D.

11] 1987), appeal dismissed, 838 F.2d 962 (7th Cir.

1988).’

Azul contends that this Court’s enunciation of the

“self-executing” nature of the just compensation clause

discussed in First English Evangelical Lutheran Church

v. County of Los Angeles, 482 U.S. 304 (1987), allows

for essentially dual relief for a single federal violation

based upon a single set of facts. In First English, the

Court noted that this principle of the “self-executing”

character of the just compensation clause has been estab-

lished since Jacobs v. United States, 290 U.S. 13 (1933).

There, the Court acknowledged that the right to compen-

Sation is grounded in the Constitution itself and guaran-

teed by the Constitution. Of course, since the Court

enunciated those principles in Jacobs, this Court has

ruled that § 1983 actions may be filed against local

’ While the Seventh Circuit in Bieneman v. City of Chicago, 864

F.2d 463 (7th Cir. 1988) rejected the district court’s conclusion

about the availability of a direct cause of action, the court deter-

mined nonetheless that the same statute of limitations applicable to a

1983 claim applied under Wilson to a direct cause of action under

the Constitution.

-14-

governments and municipal corporations, providing a re-

medy which was previously unavailable. Monell v. New

York City Dept. of Social Serv., 436 U.S. 658 (1978).

Contrary to petitioner’s assertion, the Ninth Circuit

correctly applied the reasoning of the Supreme Court,

and its decision is not in conflict with First English or

other decisions of this Court.

Neither is there a “real and embarrassing conflict of

Opinion and authority between the Courts of Appeals.”

N.L.R.B. v, Pittsburgh S.S. Co., 340 U.S. 498, 502-503

(1950).

The only circuit that Azul cites that is in conflict with

the other circuits on the issue of the availability of a

direct cause of action irrespective of available Statutory

remedies is the Seventh Circuit, as reflected by the

Bieneman case.® Yet the result in Bieneman, as here, is

the same regardless of whether this court finds a direct

cause of action. In Bieneman, the court hejd that even if

there is a direct cause of action under the Constitution,

the statute of limitations applicable to a § 1983 claim

under Wilson should be applied.

8 The City is not unmindful of petitioner’s citation to Ocean Acres

Limited Partnership v. Dare County Board of Health, 707 F.2d 103

(4th Cir. 1983), to suggest that a conflict on this issue also exists in

the Fourth Circuit. Yet, in light of Hunt v. Robeson County Dept. of

Social Serv., 816 F.2d 150 (4th Cir. 1987), albeit in a nontakings

context, where the court limited plaintiff to his remedy under

§ 1983, Ocean Acres is now of limited utility. Similarly, the holding

in Kostka v. Hogg, 560 F.2d 37 (Ist Cir. 1977) does not Squarely

present a conflict on these issues requiring this Court’s intervention.

In that case and in Molina vy. Richardson, 578 F.2d 846 (9th Cir.

1978), the courts, in dicta, posed but did not answer questions

whether takings cases are somehow different from other protected

rights under the Constitution. Wilson, however, treats all violations

of the Constitution as torts, including “damages to property.”

7.

Thus, even if the Seventh Circuit, being the only

circuit at odds with the Second, Fourth, Sixth, Eight and

Ninth on this issue, is correct, the application of that

court’s thinking would still result in the federal court

being deprived of its subject matter jurisdiction here.

Bieneman thus hardly presents a reason to grant the writ,

and for prudential reasons alone, the petition should be

denied.

B. There Is No Conflict In The Courts

As To The Appropriate Statute of

Limitations To Apply To A Cause of

Action Seeking Relief Directly Un-

der The United States Constitution.

Contrary to Azul’s assertion, there is no conflict

among the courts as to what the appropriate statute of

limitations is for a constitutional tort. Both the Ninth

Circuit (Azul and DeAnza) and the Eight Circuit

(Bieneman) have said that § 1983 statute of limitations

rules would apply to a direct cause of action. No court

in the post-Wilson era has concluded differently.

Thus, the law is clear concerning the statute of limita-

tions that applies to all constitutional violations and

needs no further clarification.’ See Wilson v. Garcia,

. Despite petitioner’s assertion to the contrary, “unclarity in the

law” played no part in the Ninth Circuit’s recent decision in

McDougal v. County of Imperial, 942 F.2d 668 (9th Cir. 1991), to

“defer consideration of the appropriate statute of limitations for the

surviving inverse condemnation claim.” Pet. Brief at 22. Rather,

the court stated that it would “not consider whether this claim is also

barred by the one-year statute of limitations, Cf. DeAnza Properties

X Lid., v. County of Santa Cruz, 936 F.2d 1084, 1085 (9th Cir.

1991), as the issue has not been properly raised on appeal. It may,

of course, be addressed on remand.” 942 F.2d 668, 675 n.S. In any

(continued)

Ve

me

471 U.S. 261 (1985); Usher v. Los Angeles, 828 F.2d

556 (1987).

Constitutional violations are torts, and this Court in

Wilson determined that state law governs the length of

the limitations period and that a standard “broad charac-

terization” of all § 1983 claims best fits the statute’s

remedial interests and furthers the “federal interest in

uniformity.” 471 U.S. at 270.

This Court concluded that all constitutional wrongs

Should indeed be characterized in the same way and

acknowledged that “injuries to property” fall within the

panoply of “potential tort analogies.” 471 U.S. at 277.

Thus, Wilson resolved any conflicts that may have

existed.

Adopting the Court’s reasoning in Wilson, the Eighth

Circuit in Bieneman reasoned that any “direct” cause of

action under the Constitution’s Fifth Amendment takings

clause should also be filed within the time allowed for a

§ 1983 suit based upon the same federal right.

Wilson teaches that the nature of the claim, whether it

is filed “directly” under the Fifth Amendment or asserted

under § 1983 based upon the Fifth Amendment, is the

same. In either case, the claim lies in tort.

Accordingly, the Bieneman court applied the same

Statute of limitations for takings cases filed directly

under the Constitution as those filed under § 1983. It

Stated:

“There is no reason to have a differ-

ent period of limitations, and a strong

reason not to: any difference would

give the plaintiff an incentive to pick

(fn. continued)

event, conflict within a circuit should first be resolved intra-circuit

before review to this Court is sought.

ie.

whichever jurisdiction provided the

longer period, recreating the uncer-

tainty that the Supreme Court sought

to eliminate. We conclude, therefore,

that there should be a single period of

limitations for all suits in which the

Constitution supplies the remedy.”

864 F.2d at 469.

Azul relies primarily on the Fourth Circuit case of

Ocean Acres Limited Partnership v. Dare County Board

of Health, 707 F.2d 103 (4th Cir. 1983) (a pre-Wilson

case) as purportedly in conflict with the Ninth Circuit

(as well as the Eighth Circuit, based on Bieneman).

However, Ocean Acres applied pre-Wilson rules. Since

Wilson, cases out of the Fourth Circuit now follow the

Eighth Circuit’s approach and apply the state’s personal

injury limitations based upon Wilson even to “direct

takings” claims. See Jackson v. City Council of

Charlottesville, VA, 659 F. Supp. 470 (W.D. VA 1987),

aff'd in part, 840 F.2d 10 (4th Cir. 1988). Any conflict

posed by Ocean Acres has now been re-evaluated by that

circuit in light of this Court’s Wilson decision.

Since any conflict that may once have existed has

been resolved by Wilson, Davis and Carlson, this Court

need not review this case to reiterate its position on this

issue. Thus, petitioner seeks this Court’s review only to

obtain a longer statute of limitations to present its

claims. At stake, however, is only Azul’s interest to

raise rents beyond the ordinance’s limitations, despite its

acknowledgment that the park operates profitably even

under “vacancy control.” Trial transcript, Vol. 1 at

154:4-6.

- 18 -

C. There Is No Conflict In The Courts

As To When A Takings Claim Ac-

crues For The Purpose of The Stat-

ute of Limitations Or Otherwise.

When a federal claim accrues is a question of federal

law. Venegas v. Wagner, 704 F.2d 1144, 1145 (9th Cir.

1983). Courts of various circuits have all concurred that

the statute of limitations begins to run when a plaintiff

“knows or has reason to know of the injury which forms

the basis for the action.” Peter Henderson Oil Co. v.

City of Port Arthur, Tex., 806 F.2d 1273, 1275 (Sth Cir.

1987). See also Norco Constr. Inc. v. King County, 801

F.2d 1143, 1145 (9th Cir. 1986), citing to Trotter v.

International Longshoremen’s & Warehousemen’s

Union, 704 F.2d 1141, 1143 (9th Cir. 1983); Jackson v.

City Council of Charlottesville, VA, 659 F. Supp. 470,

474 (W.D. VA 1987), citing to Bireline v. Seagondollar,

567 F.2d 260, 263 (4th Cir. 1977); Sevier v. Turner, 742

F.2d 262 (6th Cir. 1984).

When that “knowledge of injury occurs” is, of course,

a factual question dependant upon the peculiarity of each

case.

Federal courts have determined in certain cases that a

cause of action challenging an ordinance accrues on the

date the ordinance is adopted. Peter Henderson Oil ca.

supra. Here, evaluating a Hall physical takings claim,

the Ninth Circuit relied on DeAnza Properties X Ltd. v.

County of Santa Cruz, 936 F.2d 1084 (9th Cir. 1991),

and determined that the claim accrued upon the passage

of the challenged provision of the RSO.

Azul cites to no authority contradicting these deci-

sions. Instead, Azul suggests that cases applying a

“continuing wrong” doctrine should be applied. Yet the

“continuing wrong” doctrine does not supply the Court

«80s

with a methodology to determine when a cause of action

accrues; rather, it tolls the running of the statute of

limitations under circumstances where it is shown, and a

factual determination is made, that the prohibited activ-

ity is a continuing one. See e.g. United States v.

Dickinson, 331 U.S. 750, 751 (1947); Jackson v. City

Council of Charlottesville, VA, 659 F. Supp. 470, 474

(W.D. VA 1987); (Cf. Ward v. Caulk, 650 F.2d 1144,

1147, acknowledging the existence of the doctrine but

rejecting the “continuing wrong” doctrine under the facts

there because “a continuing violation is occasioned by

continual unlawful acts, not by continual ill effects from

an original violation.”)

That different courts have applied the “continuing

wrong” doctrine to the particular factual settings before

them does not illustrate an analytical conflict between

the courts at all but merely evidences conflicting results

based on an “ad hoc, factual inquiry” into each case to

determine what principles to apply. Hodel v. Virginia

Surface Mining and Reclamation Association, 452 US.

264, 295 (1981).

In contrast to cases involving the continual filling of a

dam with water (Dickinson), or a “continuous chain of

events” (Barbaccia v. County of Santa Clara, 451

F. Supp. 260 (1978)), or “continual unlawful acts”

(Ward), the Ninth Circuit correctly determined that this

theory was inapplicable to the facts here. The enactment

of the challenged RSO provision occurred at one time.

Thus, based on the allegations in the complaint about

the invalidity of the ordinance, the Ninth Circuit cor-

rectly found that the taking occurred when the ordinance

was adopted. Since no real analytical conflict is pre-

sented on this issue, it is not appropriate for this Court’s

review. Ross v. Moffitt, 417 U.S. 600, 616-617 (1974).

— -

D. Petitioner’s Regulatory Taking

Claim Is Not Properly Before This

Court Because It Was Not Litigated

Below.

It is a general rule of this Court that it will not decide

federal constitutional issues raised for the first time in

this Court and not fully considered by the Court of

Appeals. Carlson v. Green, 446 U.S. 14 (1980); Adickes

v. S.H. Kress & Co., 398 U.S. 144, 148 n.2 (1970). We

recognize that based on Carlson as well as Yee v. City of

Escondido, 112 S.Ct. 1522, 1531 (1992), with respect to

cases arising from the federal courts the rule is pruden-

tial and does not deprive the Court of jurisdiction. Yet,

for prudential reasons, the Court should not consider the

question here.?°

Unlike Yee (a pleading case) where “it is unclear

whether petitioners made [the regulatory taking] argu-

ment below” or plead the requisite facts in its complaint,

112 S.Ct. at 1532 (emphasis added), the record here is

unambiguous in this regard. Azul never alleged that the

ordinance did not “substantially advance a legitimate

State interest.” See Nollan vy. California Coastal

Comm’n., 483 U.S. 825 (1987). Nor did Azul allege that

it was deprived of any economic use of its property

under the test of Agins v. City of Tiburon, 447 U.S. 255

(1980). Resp. App. A1-AS.

10 Even if this Court were to find that the Ninth Circuit was wrong

in holding that the statute of limitations barred the action, any

review by this Court of a regulatory taking claim would be inap-

propriate.

einai

«Dts

Instead, Azul alleged that the ordinance caused a

physical occupation of its property as the basis of its

taking claim. Consequently, at trial Azul presented

evidence to support its physical occupation theory. Not

Surprisingly, the district court found:

“In this case, the plaintiff does not

argue that there was no legitimate

State interest in enacting the Rent

Stabilization Ordinance, including the

vacancy control provisions.” Pet.

App. C., 43a!

Since petitioner did not argue or present evidence

relating to a regulatory taking at the trial below, and

since neither the trial court nor the Ninth Circuit

“squarely” addressed or made any ruling on this issue,

Yee, 112 S.Ct. at 1534, this issue is not properly pre-

served for this Court’s review.

Azul’s petition for review relies heavily on the

withdrawn Ninth Circuit opinion and the vacated district

court judgment. It claims that it was error on the part of

both courts to find that the City’s ordinance substantially

advanced a legitimate state interest and seeks this

Court’s review of that issue. Petitioner, however, is

precluded from seeking review of both those decisions,

now vacated and withdrawn, because of its failure to file

a cross-appeal of either decision.

The Court has previously held that a party who has

earlier failed to cross-appeal in a lower appellate court

cannot On an appeal from the lower court attack the

11 The district court held that the vacancy control provision ad-

vanced a legitimate governmental interest. It did so because that

issue was one of the elements to consider as part of Hall’s “three-

part analysis.” Pet. App. C., 33a. It never decided whether the

vacancy control provision resulted in a regulatory taking.

—-.

judgment which was at issue in the earlier appeal for

purposes of obtaining a modification in his favor.

Penfield Co. v. Securties & Exchan. Comm. 330 U.S.

585 (1947). That is what Azul seeks to do here. In its

cross-appeal, Azul chose not to appeal the decisions

below that hold that the RSO substantially advances a

legitimate governmental interest. It instead chose to

limit its issue on cross-appeal to the availability of ex-

pert witness fees. See U.S. Court of Appeals Docket No.

90-56066, Appellee’s Brief.

Azul should thus be barred from now attacking the

portion of the judgment below that it disagrees with,

when it did not seek review of that portion by way of

cross-appeal. Letulle v. Scofield, 308 U.S. 415 (1940),

reh. den., 309 U.S. 694 (1940).

E. Petitioner’s Regulatory Taking

Claim Is Not Ripe For Review In

This Court Because Petitioner Has

Not Exhausted Administrative

Remedies Nor Sought And Been

Denied Just Compensation In State

Court.

For this Court to review petitioner’s newly-fashioned

regulatory takings claim, this Court would have to find

that the Ninth Circuit erred in its ruling on the statute of

limitations, would have to overlook the fact that neither

the district court nor the Court of Appeals reviewed a

regulatory takings claim, and overlook the fact that Azul

never sought a final administrative determination of the

application of the ordinance to it and never first

presented its claims in state court. This Court has ruled

that under these circumstances, no federal court should

;

:

~-e.

review a Claim such as this unless remedies have first

been exhausted.

This Court established under a two-tier analysis in

Williamson County Regional Planning Commission v.

Hamilton Bank, 473 U.S. 172 (1985), that a regulatory

takings claim is not ripe for review in federal court

unless the plaintiff has obtained a final administrative

determination of the application of the ordinance to it

and first requested and been denied just compensation in

State court. Azul has done neither.

The district court excused Azul from meeting the

Williamson test because petitioner’s physical occupation

theory of liability did not require an exhaustion of ad-

ministrative remedies. Hall, supra, 833 F.2d at 1282

n.28. However, that same reasoning cannot be applied

to Azul’s newly fashioned regulatory takings claim.

Rather, Azul was required to obtain a final decision from

the City on the ordinance’s application to its property

and seek compensation through the state courts, as re-

quired by Williamson."

This Court has already analyzed the “Yee factors” and

concluded they do not give rise to a physical taking. In

essence, petitioner is seeking review of the Ninth

Circuit’s original decision by refashioning the Yee physi-

cal taking factors and giving them another name.

12 Azul might argue that when it filed its complaint, prior to First

English, California did not recognize the remedy of damages for a

regulatory taking, and that it had no adequate remedy at that time.

The lack of damages as a remedy did not excuse Azul from seeking

compensation in state court as required by Williamson. Nothing

prevented Azul from presenting its claim in state court, as the

landowner in First English did, and then proceeding to federal court,

as the landowner did there.

>

Petitioner now suggests that the “Yee factors” should be

considered as the standard for analyzing regulatory

takings. Petitioner seeks to have the Court depart from

the standards established by Agins and Nollan. To date,

nothing stated by this Court or lower courts suggests the

appropriateness of such a novel approach. Moreover,

there is no conflict among the circuits on this issue.!3

Therefore, no issue has been framed which justifies

review by this Court. As this Court observed in Yee:

6“

were we to address _ the

{regulatory taking] issue here, we

would apparently be the first court in

the nation to determine whether an

Ordinance like this one effects a

regulatory taking.” 112 S.Ct. at 1534.

This Court, therefore, should “leave the regulatory

taking issue for the California Courts to address in the

first instance.” Jd. at 1534.

13 To the extent Sandpiper Mobile Village v. City of Carpinteria

No. B058435, 1992 Cal.App. LEXIS 1228 (Cal. Ct. App., Oct. 15,

1992) and Colony Cove Association y. The City of Carson No.

B062956 (Cal. Ct. App., Oct. 22, 1992), may represent such a

conflict, the California Supreme Court should have the first Opportu-

nity to resolve it.

-

CONCLUSION

Based on the foregoing, the City of Los Angeles

respectfully submits that the decision of the Ninth

Circuit Court of Appeal was proper, and Azul’s petition

should be denied.

DATED: December 21, 1992.

Respectfully submitted,

JAMES K. HAHN

City Attorney

CLAUDIA McGEE HENRY

Senior Assistant City Attorney

ANTHONY SAUL ALPERIN

Assistant City Attorney

GWENDOLYN R. POINDEXTER

Deputy City Attorney and

Counsel of Record

LOS ANGELES CITY

ATTORNEY’S OFFICE

Attorneys for Respondent

CITY OF LOS ANGELES

APPENDIX A

nA te

SHERMAN L. STACEY

JONATHAN S. HORNE

1299 Ocean Avenue, Suite 313

Santa Monica, California 90401

(213) 394-1163 -

Attorneys for Plaintiff

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

AZUL PACIFICO, INC.,

a California corporation,

Plaintiff,

VS.

CITY OF LOS ANGELES,

a Municipal corporation,

Defendant.

Case No. 87 02287

COMPLAINT FOR DECLARATORY

RELIEF, INJUNCTION, DAMAGES FOR

VIOLATION OF CIVIL RIGHTS

A JURY TRIAL IS DEMANDED

PLAINTIFF AZUL PACIFICO, INC., a California

corporation, hereby alleges:

JURISDICTION

1. The Court has jurisdiction under 28 U.S.C.

1331(a) and 1343(3) in that the claim arises under the

First and Fourteenth Amendments to the Constitution of

the United States, and under 42 U.S.C. §§1981, 1983

Ad

and 1988 as more fully appears herein. This is a Civil

action where the matter in controversy exceeds in sum of

$10,000.00 exclusive of interest and costs.

PARTIES

2. Plaintiff AZUL PACIFICO, INC. is a corporation

duly organized and in good Standing under the laws of

the State of California.

3. Defendant CITY OF LOS ANGELES is a munici-

pal corporation located in the County of Los Angeles,

State of California.

4. Plaintiff is the owner of the Tahitian Terrace

Mobile Home Park (the “Park”) within the City of Los

Angeles. The Park contains 158 Spaces rented for

occupancy by mobile homes used by the owner of such

mobile homes for residential purposes.

FIRST CLAIM

5. On or about April 21, 1979, the City of Los

Angeles adopted Ordinance No. 152,120 and amended

Said Ordinance on September 1, 1980 by adoption of

Ordinance No. 154,237, (such Ordinances, as amended,

being referred to herein as the “Rent Control Law”).

The City of Los Angeles, through its agents, employees

and personnel, is enforcing the provisions of the Rent

Control Law.

6. The Rent Control Law has had the effect of depriv-

ing the Plaintiff of all use and occupancy of its real

property and granting to the tenants of mobile homes

presently in the Park, as well as the successors in inter-

est of such tenants, the right to physically permanently

occupy and use the real property of Plaintiff. Plaintiff

has no legal right to receive any compensation for the

=

-A 3-

rights now enjoyed by the tenants of the Park other than

the stream of income from rents as regulated by the Rent

Control Law.

7. The tenants of the Park have the power and ability,

and have used that power and ability on many occasions,

to sell the rights of use and occupancy of Plaintiff’s real

property, which have been transferred to said tenants by

operation and enforcement of the Rent Control Law, to

Other parties without the consent of Plaintiff and to

receive consideration from such other parties for the

transfer of such rights.

8. The consideration for which the tenants of the Park

can, and do, transfer the ownership of individual coaches

is substantially in excess of the value of those coaches

and the excess consideration over the value of the

coaches is due to the rights of permanent physical

occupation at a fixed rent which have been transferred to

the tenants of the Park by the operation and enforcement

of the Rent Control Law.

9. The tenants of the Park have no obligation to

account to Plaintiff for the proceeds of the sale of the

rights which have been transferred to the tenants of the

Park by the operation and enforcement of the Rent

Control Law.

10. The operation and enforcement of the Rent

Control Law effects a taking of Plaintiff’s property for

public use and benefit without payment of just compen-

sation. The enforcement of the Rent Control Law by the

City of Los Angeles constitutes a taking of property by

said defendant for private purpose in violation of the

Fifth and Fourteenth Amendments to the United States

Constitution and a deprivation of civil rights under color

of law in violation of 42 U.S.C. §§1981 and 1983.

-A 4-

11. As a direct and proximate result of the Operation

and enforcement of the Rent Control Law by Defendant,

Plaintiff has suffered damages in the amount of

$15,000,000.00.

SECOND CLAIM

12. Plaintiff incorporates herein by reference all of

the allegations contained in Paragraphs 1 through 11

hereof as though fully set forth.

13. The Rent Control Law is constitutionally infirm

in that no emergency exists which justifies its imposition

on plaintiff, and, therefore, continued enforcement

thereof violates the Fifth and Fourteenth Amendments to

the United States Constitution as well as 42 U.S.C.

§$§1981 and 1983.

WHEREFORE, plaintiff prays against defendant as

follows:

1. For damages in the amount of $15,000,000.00

2. For declaration that the Rent Control Law is

unconstitutional, invalid and unenforceable and that

none of the parties hereto have any right, duty or obliga-

tion to comply with the terms or provisions thereof:

3. For a permanent injunction enjoining defendant,

its agents, employees and all those acting by, through,

for, on behalf, or in concert with defendant, or pursuant

to any of the provisions of the ordinance, from authoriz-

ing or engaging in, directly or indirectly, the enforce-

ment of the ordinance;

4. For costs of suit;

5. For attorneys’ fees as provided by 42 U.S.C.

$1988; and

5

-A 5-

6. For such other and further relief as the court deems

proper.

Dated: April 9, 1987.

SHERMAN L. STACEY

JONATHAN S. HORNE

By /s/ Sherman L. Stacey

Sherman L. Stacey

Attorney for Plaintiff

A JURY TRIAL IS DEMANDED.

SHERMAN L. STACEY

JONATHAN S. HORNE

By /s/ Sherman L. Stacey

Sherman L. Stacey

Attorney for Plaintiff

APPENDIX B

oF

SEC. 151.01. DECLARATION OF PURPOSE.

There is a shortage of decent, safe and Sanitary hous-

ing in the City of Los Angeles resulting in a critically

low vacancy factor.

Tenants displaced as a result of their inability to pay

increased rents must relocate but as a result of such

housing shortage are unable to find decent, safe and

Sanitary housing at affordable rent levels. Aware of the

difficulty in finding decent housing, some tenants

attempt to pay requested rent increases, but as a conse-

quence must expend less on other necessities of life.

This situation has had a detrimental effect on substantial

numbers of renters in the City, especially creating

hardships on senior citizens, persons on fixed incomes

and low and moderate income households. This problem

reached crisis level in the summer of 1978 following the

passage of Proposition 13.

At that time, the Council of the City of Los Angeles

conducted hearings and caused studies to be made on the

feasibility and desirability of various measures designed

to address the problems created by the housing shortage.

In August, 1978, pending development and adoption

of measures designed ‘to alleviate the City’s housing

crisis, Council adopted Ordinance No. 151,415 which

temporarily rolled back recently imposed rent increases,

and prohibited most rent increases on residential rental

properties for six months. Ordinance No. 151,415 ex-

pires on April 30, 1979.

This ordinance has successfully reduced the rate of

rent increases in the City, along with the concomitant

hardships and displacements. However, a housing

shortage still exists within the City of Los Angeles and

total deregulation of rents at this time would immedi-

ately lead to widespread exorbitant rent increases, and

3.

recurrence of the crisis, problems and hardships which

existed prior to the adoption of the moratorium measure.

Therefore, it is necessary and reasonable to regulate

rents so as to safeguard tenants from excessive rent

increases, while at the sam¢ time providing landlords

with just and reasonable returns from their rental units.

In order to assure compliance with the provisions of this

chapter violations of any of the provisions of this chap-

ter may be raised as affirmative defenses in unlawful

detainer proceedings. (Amended by Ord. No. 166,130,

Eff. 9/16/90.)