Abshire v. Newsom

• Court: District Court, E.D. California
• Decided: August 5, 2021
• Docket: 2:21-cv-00198
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT 11 EASTERN DISTRICT OF CALIFORNIA 12 13 CINDY ABSHIRE, et al., No. 2:21-cv-00198-JAM-KJN 14 Plaintiffs, 15 v. ORDER GRANTING STATE, COUNTY, AND TOWN DEFENDANTS’ MOTIONS TO 16 GAVIN NEWSOM, in his official DISMISS WITH PREJUDICE capacity as Governor of 17 California, et al., 18 Defendants. 19 20 Plaintiffs are in the business of providing short term 21 lodging and dining services in Mammoth Lakes California (Mono 22 County). In this case they challenge various State and Regional 23 Public Health Orders enacted to stop the spread of COVID-19. See 24 generally Compl., ECF No. 1. Plaintiffs allege these orders have 25 resulted in: (1) substantive due process violations; (2) 26 procedural due process violations; (3) equal protection 27 violations; (4) uncompensated takings; and (5) commerce clause 28 violations. See generally id. Plaintiffs brought this action 1 against various State, County, and Town officials. Id. 2 Defendants now move to dismiss. 1 3 4 I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND 5 The facts of this case are familiar to the parties and will 6 not be repeated in detail here. It involves the COVID-19 7 pandemic and the state and local governments’ response thereto, 8 which has been paramount to our lives since early 2020. On March 9 4, 2020, Governor Gavin Newsom declared a State of Emergency in 10 California due to the threat of COVID-19. Compl. ¶ 46. This was 11 followed on March 19, 2020 with Executive Order N-33-20, which 12 directed all residents to shelter in place except as needed to 13 maintain a continuity of operations of defined critical 14 infrastructure sectors. Id. ¶¶ 49-50. There has since been a 15 series of executive orders, public health orders, and guidance 16 from state and local officials to respond to the evolving nature 17 of the pandemic in California. See id. ¶¶ 51-72. Following the 18 State’s guidance, Mono County generally mirrored the State’s 19 restrictions in its own public health orders. See id. ¶¶ 82-83, 20 85-87. 21 Relevant here, the initial public health orders issued in 22 March 2020 precluded hotels, private property owners, RV parks, 23 and other rental properties from renting out to the public, 24 except for essential workers, displaced residents needing 25 shelter, and for traveler safety. Id. ¶¶ 83, 85, 86, 87. In May 26

27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled 28 for June 8, 2021. 1 2020, Mono County revised the orders to permit RV parks and 2 campgrounds to operate at 75% capacity; and then followed suit 3 for hotels and short-term rentals in June 2020. Id. ¶¶ 92, 93. 4 On August 11, 2020, the County and Town issued an order reducing 5 capacity to 70% for hotels and short-term rentals in the Town. 6 Id. ¶¶ 94, 95; Town’s Request for Judicial Notice (“Town’s RJN”) 7 Ex. A, ECF No. 16. 8 In August 2020, the state adopted the Blueprint for a Safer 9 Economy and its color-coded tier system. Compl. ¶ 55. Under 10 this system restaurants were required to: (1) cease all indoor 11 dining in the purple tier; (2) limit indoor dining to 25% in the 12 red tier; or (3) limit indoor dining capacity to 50% in the 13 orange and yellow tiers. Id. 14 By December 2020, California experienced its biggest surge 15 of COVID-19 cases since the pandemic began. As a result, the 16 State issued a Regional Stay-at-Home Order that imposed new 17 restrictions, with the goal of preventing a catastrophic strain 18 on the State’s hospitals and, in particular, intensive care 19 units. Under the State Regional Stay-at-Home Order, the Southern 20 California Region, which includes Mono County, was required to 21 cease all hotel and short-term rentals between December 6, 2020 22 and January 25, 2021 except for certain mitigation and 23 containment purposes. See id. ¶¶ 97, 109; County’s Request for 24 Judicial Notice (“County’s RJN”) Ex. 22, ECF No. 19. After the 25 State Regional Stay-at-Home Order was lifted for the Southern 26 California region, hotels and short-term rentals were permitted 27 to reopen, subject to the same 70% capacity restrictions. Town’s 28 RJN Ex. A, B, C. The Town’s January 31, 2021 Public Health Order 1 also required short-term rentals be left vacant for 24 hours 2 between occupancies. Town’s RJN, Ex. C. This was intended to 3 “disperse visitation to Mammoth Lakes over a longer period of 4 time thereby avoiding overcrowding and visitor concentration 5 during ‘peak’ visitation periods” and to allow time for 6 sanitization between stays. Id. On February 26, 2021, the Town 7 issued an order that removed the 70% occupancy limit but retained 8 the 24-hour vacancy requirement. Town’s RJN, Ex. D. On March 9, 9 2021, the Town rescinded all its prior Public Health Orders that 10 imposed lodging restrictions, including the 24-hour vacancy 11 requirement. Town’s RJN, Ex. E. 12 On December 9, 2020, the Town sent a letter to the local 13 lodging community advising them of the restrictions imposed by 14 the State and County. Town’s RJN, Ex F. The letter also 15 identified the potential consequences for violation of such 16 orders pursuant to the Town’s Municipal Code — fines of up to 17 $1,000 per day and potential revocation of the violator’s 18 business tax certification for up to twelve months. Id. During 19 the period that the State Regional Stay-at-Home Order was in 20 effect for the Southern California Region, Plaintiff Cindy 21 Abshire rented out a short-term rental in violation of the Stay- 22 at-Home Order, resulting in the Town issuing a citation for the 23 violation on January 21, 2021. Compl. ¶ 112. Similarly, the 24 Town issued a citation for Plaintiffs Alan and Monica Butt on 25 December 21, 2020, for violation of the Regional Stay-at-Home 26 Order when a party was hosted at their property. Id. ¶ 118. 27 On February 1, 2021 Plaintiffs filed the instant action 28 challenging the constitutionality of the restrictions issued in 1 response to the pandemic. In addition to the individual 2 Plaintiffs who were issued citations — Cindy and Timothy Abshire 3 and Alan and Monica Butts — Plaintiffs also include Nomadness 4 Corporation (“Nomadness”), a corporation that contracts with 5 property owners to manage, operate, and provide lodging services, 6 and Mammoth Lakes Business Coalition (the “Coalition”), a 7 membership association of dining and lodging businesses in 8 Mammoth Lakes. Id. ¶¶ 19-24. Plaintiffs assert claims against 9 various officials of the State, Mono County, and Town of Mammoth 10 Lakes for: (1) substantive due process violations; (2) procedural 11 due process violations; (3) equal protection violations; 12 (4) uncompensated takings; and (5) commerce clause violations. 13 See generally id. Defendants moved to dismiss all of Plaintiffs’ 14 claims. State Defs.’ Mot. to Dismiss, ECF No. 17 (“State’s 15 Mot.”); County Defs.’ Mot. to Dismiss, ECF No. 18 (“County’s 16 Mot.”; Town Defs.’ Mot. to Dismiss, ECF No. 15 (“Town’s Mot.”). 17 Plaintiffs opposed these Motions, Pls.’ Opp’n, ECF No. 29, to 18 which Defendants responded. State Defs.’ Reply (“State’s 19 Reply”), ECF No. 32; County Defs.’ Reply (“County’s Reply”), ECF 20 No. 33; Town Defs.’ Reply (“Town Reply”), ECF No. 31. For the 21 reasons set forth below, the Court finds Plaintiffs have failed 22 to state a plausible claim relief and therefore grants 23 Defendants’ Motions. 24 25 II. OPINION 26 A. Judicial Notice 27 Defendants all request the Court take judicial notice of 28 various orders enacted by the State, County, and Town. See 1 State’s Request for Judicial Notice (“State’s RJN”), ECF No. 17- 2 2; County’s Request for Judicial Notice (“County’s RJN”), ECF 3 No. 19; Town’s Request for Judicial Notice (“Town’s RJN”), ECF 4 No. 16. Additionally, State Defendants request the Court take 5 judicial notice of the Centers for Disease Control and 6 Prevention’s COVID Data Tracker and its publicly reported data, 7 and the State’s Tracking COVID-19 in California dashboard and 8 its publicly reported data. State’s RJN, Ex. 1, 2. Town 9 Defendants also request the Court take judicial notice of the 10 transcript of this Court’s own decision in Best Supplement 11 Guide, LLC v. Newsom, No. 20-cv-00965-JAM-CKD (E.D. Cal. Oct. 12 27, 2020). Town’s RJN, Ex G. Plaintiffs do not specifically 13 oppose the requests for judicial notice but rather point out 14 that the Court may not accept as true disputed issues of fact 15 found therein. Pls.’ Opp’n to RJN at 1, ECF No. 30. 16 As matters of public record, all the exhibits are proper 17 subjects of judicial notice. Accordingly, the Court GRANTS all 18 Defendants’ Request for Judicial Notice. However, the Court 19 takes judicial notice only of “the contents of the documents, 20 not [the] truth of those contents.” Gish v. Newsom, No. EDCV 21 20-755-JGB(KKx), 2020 WL 1979970 at *2 (C.D. Cal. April 23, 22 2020). 23 B. 12(b)(1) Motions 24 A defendant may move to dismiss for lack of subject matter 25 jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of 26 Civil Procedure. Fed. R. Civ. P. 12(b)(1). If the plaintiff 27 lacks standing under Article III of the United States 28 Constitution then the court lacks subject-matter jurisdiction, 1 and the case must be dismissed. See Maya v. Centex Corp., 658 2 F.3d 1060, 1067 (9th Cir. 2011). Once a party has moved to 3 dismiss for lack of subject-matter jurisdiction under Rule 4 12(b)(1), the opposing party bears the burden of establishing 5 the court’s jurisdiction. See Kokkonen v. Guardian Life Ins. 6 Co., 511 U.S. 375, 377 (1994). 7 1. Standing 8 Article III of the Constitution limits the jurisdiction of 9 federal courts to actual “Cases” and “Controversies.” U.S. 10 Const. art. III, § 2. “One element of the case-or-controversy 11 requirement is that plaintiffs must establish that they have 12 standing to sue.” Clapper v. Amnesty Int’l USA, 568 U.S. 398, 13 408 (2013) (internal quotation marks and citation omitted). To 14 establish standing “a plaintiff must show (1) [they have] 15 suffered an injury in fact that is (a) concrete and 16 particularized and (b) actual or imminent, not conjectural or 17 hypothetical; (2) the injury is fairly traceable to the 18 challenged action of the defendant; and (3) it is likely, as 19 opposed to merely speculative, that the injury will be redressed 20 by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw 21 Envtl. Serv. Inc., 528 U.S. 167, 180-81 (2000). 22 An organization has standing to sue on behalf of its 23 members when: (1) its members would otherwise have standing to 24 sue in their own right; (2) the interests it seeks to protect 25 are germane to the organization’s purpose; and (3) neither the 26 claim asserted nor the relief requested requires the 27 participation of individual members in the lawsuit. Hunt v. 28 Wash. State Apple Advert. Comm’n, 432 U.S. 333, 343 (1977). 1 Plaintiff Coalition is a membership association of dining 2 and lodging establishments in Mammoth Lakes. Compl. ¶ 15. In 3 their complaint, Plaintiffs request compensatory damages in the 4 amount of $500,000 or such other amount to be proven at trial 5 against the County and Town Defendants. Compl. at 55-56. 6 However, as the County and Town point out, that relief requires 7 the participation of Coalition’s individual members to determine 8 what, if any, damages they have incurred. Town Mot. at 6; 9 County Mot. at 5. Plaintiffs failed to address this in 10 opposition and the Court finds that such a determination cannot 11 be made without the individual members participation. See Opp’n 12 at 19. Accordingly, Plaintiff Coalition lacks standing to seek 13 compensatory damages. Hunt, 432 U.S. at 343 (an organization 14 does not have standing to sue on behalf of its members when the 15 relief requested requires the participation of individual 16 members in the lawsuit.) 17 “Even when the plaintiff has alleged an injury sufficient 18 to meet the ‘case or controversy’ requirement [. . .] the 19 plaintiff generally must assert his own legal rights and 20 interests, and cannot rest his claim to relief on the legal 21 rights or interests of third parties.” Warth v. Seldin, 422 22 U.S. 490, 499 (1975). The Supreme Court has recognized that 23 “there may be circumstances where it is necessary to grant a 24 third party standing to assert the rights of another” but has 25 set forth two additional requirements. Kowalski v. Tesmer, 543 26 U.S. 125, 129-30 (2004). First, the party asserting the right 27 must have a close relationship with the person who possesses the 28 right. Id. at 130. Second, there must be some sort of 1 hinderance to the possessor’s ability to protect their own 2 interest. Id. 3 Plaintiff Nomadness is a California corporation that 4 manages, operates, and provides lodging services to customers, 5 under contract with property owners. Compl. ¶ 23. While the 6 orders may indirectly affect Nomadness, the rights it seeks to 7 assert are those of the property owners and businesses with 8 which it contracts. Plaintiffs again fail to address this 9 argument, merely stating Nomadness has suffered financially as a 10 result of the orders. Opp’n at 19. But this is not enough to 11 assert the legal rights of third parties. See Warth, 422 U.S. 12 at 499; Kowalski, 543 U.S. at 129-30. Plaintiffs point to no 13 authority, and the Court is aware of none, that the contractual 14 relationship in this case is sufficient to allow Nomadness to 15 assert the legal rights of those business and property owners. 16 See Kowalski, 543 U.S. at 130. Further, there is no indication 17 that those third parties are unable to assert their own rights. 18 Accordingly, Nomadness has failed to establish standing.2 19 2. Mootness 20 “A case becomes moot—and therefore no longer a ‘Case’ or 21 ‘Controversy’ for purposes of Article III—when the issues 22

23 2 While the Town Defendants appear to raise this argument as a 12(b)(1) motion, see generally Town’s Mot., the Court notes 24 prudential standing issues are decided under 12(b)(6) in this circuit. See Doe v. Hamburg, No. C-12-3412 EMC, 2013 WL 3783749, 25 at *5 (N.D. Cal. July 16, 2013); see also Ray Charles Foundation v. Robinson, 759 F.3d 1109, 1118 (9th Cir. 2015) (“Historically, 26 courts have treated the limitation on third-party standing as a 27 prudential principle that requires plaintiffs to assert their own legal rights.”) However, for clarity, the Court addresses it 28 with the other standing considerations. 1 presented are no longer ‘live’ or the parties lack a legally 2 cognizable interest in the outcome.” Rosebrock v. Mathis, 745 3 F.3d 963, 971 (9th Cir. 2014) (internal citations omitted). 4 However, voluntary cessation of challenged conduct does not 5 necessarily render a case moot. Id. This is because “dismissal 6 for mootness would permit a resumption of the challenged conduct 7 as soon as the case is dismissed.” Id. Courts presume that a 8 government entity is acting in good faith when it changes its 9 policy. Id. But courts “are less inclined to find mootness 10 where the new policy could be easily abandoned or altered in the 11 future.” Id. at 972 (internal citation omitted). Finally, the 12 party asserting mootness bears a “heavy burden” to show that 13 “the challenged conduct cannot reasonably be expected to 14 reoccur.” Id. 15 On June 15, 2021, the Governor rescinded the vast majority 16 of the State’s COVID-19-related industry restrictions. See 17 Beyond the Blueprint for Industry and Business Sectors Effective 18 June 15, available at https://www.cdph.ca.gov/Programs/CID/DCDC 19 /Pages/COVID-19/Beyond-Blueprint-Gramework.aspx. In light of 20 this development, the Court requested supplemental briefing on 21 the issue of mootness. See Order, ECF No. 35. 22 Plaintiffs contend the case is not moot under the voluntary 23 cessation doctrine, as the uncertainty of the pandemic means 24 Plaintiffs are under the constant threat of reinstatement of the 25 prior restrictions and Defendants retain the authority to do so. 26 Pls.’ Suppl. Brief at 4, ECF No. 37. Defendants however argue 27 that because of widespread vaccinations in the state “it is 28 absolutely clear the allegedly wrongful behavior could not 1 reasonably be expected to recur” rendering Plaintiffs’ claims 2 for injunctive and declaratory relief moot. State Defs.’ Suppl. 3 Brief at 5-6, ECF No. 36. 4 The Court agrees with Plaintiffs that their claims for 5 injunctive and declaratory relief are not moot under the 6 voluntary cessation doctrine. While Defendants have rescinded 7 the challenged orders “largely because of improved vaccine 8 availability and the overall decline in Covid-19 cases and 9 hospitalizations [. . .] it remains the case that the only 10 certainty about the future course of this pandemic is 11 uncertainty.” Jones v. Cuomo, No. 20 CIV. 4898 (KPF), 2021 WL 12 2269551, at *5 (S.D.N.Y. June 2, 2021) (internal quotation marks 13 and citation omitted). While vaccinations are a promising 14 development, the pandemic is not over. New variants and vaccine 15 hesitancy make it plausible that Defendants may determine it 16 necessary to reimpose restrictions. Accordingly, Defendants 17 have not demonstrated that “the challenged conduct cannot 18 reasonably be expected to reoccur.” Rosebrock, 745 F.3d at 972. 19 C. 12(b)(6) Motions 20 A Rule 12(b)(6) motion challenges the complaint as not 21 alleging sufficient facts to state a claim for relief. Fed. R. 22 Civ. P. 12(b)(6). “To survive a motion to dismiss [under 23 12(b)(6)], a complaint must contain sufficient factual matter, 24 accepted as true, to state a claim for relief that is plausible 25 on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 26 (internal quotation marks and citation omitted). While 27 “detailed factual allegations” are unnecessary, the complaint 28 must allege more than “[t]hreadbare recitals of the elements of 1 a cause of action, supported by mere conclusory statements.” 2 Id. “In sum, for a complaint to survive a motion to dismiss, 3 the non-conclusory ‘factual content,’ and reasonable inferences 4 from that content, must be plausibly suggestive of a claim 5 entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 6 572 F.3d 962, 969 (9th Cir. 2009). 7 1. Substantive Due Process Claim 8 “Substantive due process cases typically apply strict 9 scrutiny in the case of a fundamental right and rational basis 10 review in all other cases.” Witt v. Dep’t of Air Force, 527 11 F.3d 806, 817 (9th Cir. 2008). Although there is a “generalized 12 due process right to choose one’s field of private employment,” 13 subject to reasonable regulations, “[t]hese cases all deal with 14 a complete prohibition of the right to engage in a calling,” 15 rather than a brief interruption in a party’s ability to work. 16 Conn v. Gabbert, 526 U.S. 286, 292 (1999). Neither the Supreme 17 Court nor the Ninth Circuit has ever recognized the right to 18 work or pursue a business enterprise as a fundamental right 19 warranting higher scrutiny. Saga v. Tenorio, 384 F.3d 731, 743 20 (9th Cir. 2004) (“the Court has never held that the right to 21 pursue work is a fundamental right”); see also Slidewaters LLC 22 v. Washington State Dep’t of Lab. & Indus., 2021 WL 2836630 at 23 *7 (9th Cir. 2021) (instructing “the right to pursue a common 24 calling is not considered a fundamental right” and the “proper 25 test for judging the constitutionality of statutes regulating 26 economic activity is whether the legislation bears a rational 27 relationship to a legitimate state interest.”) 28 To the extent Plaintiffs argue that the orders implicate 1 the right to interstate travel, Pls.’ Opp’n at 6-8, they are 2 precluded from asserting the rights of their out-of-state 3 guests. See Warth v. Seldin, 422 U.S. 490, 499 (1975) 4 (“plaintiff generally must assert his own legal rights and 5 interests, and cannot rest his claim to relief on the legal 6 rights or interests of third parties.”) Further, neither the 7 Supreme Court nor the Ninth Circuit has recognized a 8 constitutional right to intrastate travel. Best Supplement 9 Guide, LLC v. Newsom, 20-cv-00965-JAM-CKD, 2020 WL 2615022, at 10 *5 (E.D. Cal. May 22, 2020). Because the orders do not 11 implicate a fundamental right, they are constitutional so long 12 as they are rationally related to a legitimate governmental 13 interest. 14 It is uncontroverted that “[t]here is a legitimate state 15 interest in preventing the spread of COVID-19, a deadly 16 contagious disease.” Slidewaters LLC, 2021 WL 2836630 at *7; 17 see also Roman Cath. Diocese of Brooklyn v. Cuomo, 141 S.Ct. 63, 18 67 (2020) (“Stemming the spread of COVID-19 is unquestionably a 19 compelling interest.”) The remaining issue then is whether 20 Defendants’ actions are rationally related to this interest. 21 The Court finds the challenged orders meet the requirements of 22 rational basis review as a matter of law. 23 Restrictions on lodgings, hotels, and short-term rentals 24 are rationally related to the goal of limiting the spread of 25 COVID-19. Defendants, in enacting these restrictions, 26 considered the ability to physically distance between 27 individuals from different households. State’s RJN, Ex. 3. 28 Lodgings and hotels, by their nature, tend to host people from 1 multiple households and from different communities. Mixing of 2 different households increases the chance of the virus spreading 3 because each person infected at a hotel or lodging would bring 4 the virus back to their household and community. State’s Mot. 5 at 7. It is therefore rational for the State to require 6 lodgings, hotels, and short-term rentals to take measures to 7 help prevent or slow the spread of COVID-19. 8 Restrictions on restaurants are also rational as eating and 9 drinking requires the removal of masks, making transmission more 10 likely. Id. Additionally, as with lodgings, restaurants tend 11 to host people from numerous households for an extended period 12 of time, creating the risk that one sick person will spread the 13 disease to multiple households. 14 Plaintiffs’ substantive due process claim thus fails as a 15 matter of law. Because no additional fact discovery would alter 16 this conclusion, Plaintiffs’ first claim is dismissed with 17 prejudice. See Deveraturda v. Globe Aviation Sec. Servs. 454 F. 18 3d 1043, 1046 (9th Cir. 2006 (explaining a district court need 19 not grant leave to amend where amendment would be futile). 20 2. Procedural Due Process Claim 21 When the action complained of is legislative in nature — 22 government decisions that affect large areas and are not 23 directed at one or a few individuals — the constitutional 24 procedural due process requirements of individual notice and 25 hearing are not implicated. Halverson v. Skagit Cty., 42 F.3d 26 1257, 1260-61 (9th Cir. 1994), as amended on denial of reh’g 27 (Feb. 9. 1995). “General notice as provided by law is 28 sufficient.” Id. 1 Here, the orders in question are ones of general 2 applicability affecting the entire State, County, and Town. 3 They are not directed at one or a few individuals. Accordingly, 4 general notice as provided by law was sufficient and Plaintiffs 5 have failed to state a claim for a procedural due process 6 violation.3 Id. The Court further finds that amendment would be 7 futile and dismisses this claim with prejudice. See Deveraturda, 8 454 F.3d. at 1046. 9 3. Equal Protection Claim 10 Under the Equal Protection Clause, “[w]hen no suspect class 11 is involved and no fundamental right is burdened, [courts] apply 12 a rational basis test to determine the legitimacy of the 13 classification.” Kahawaiolaa v. Norton, 386 F.3d 1271, 1277-78 14 (9th Cir. 2004). 15 As discussed above, the orders at issue do not burden a 16 fundamental right. Nor are the owners of hotels, lodgings, 17 short-term rentals, and restaurants a suspect class. 18 Accordingly, rational basis applies. For the same reasons set 19 forth above, the Court finds the orders are rationally related 20 to Defendants’ legitimate interest in reducing the spread of 21 COVID-19. Even if, as Plaintiffs contend, non-essential lodging 22 was prohibited while other non-essential, equally risky business 23 was allowed, the orders still survive rational basis review. 24 Opp’n at 14 (citing Compl. ¶ 136). Defendants are “not required 25 to draw a perfect line in determining which individual business 26 3 Plaintiffs’ argument that the orders failed to comply with 27 California law, Opp’n at 15, is precluded under Pennhurst. See Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 106 28 (1984). 1 can safely open and which cannot.” Slidewaters LLC, 2021 WL 2 2836630 at *8. This claim is also dismissed with prejudice as 3 the Court finds amendment would be futile. See Deveraturda, 454 4 F.3d at 1046. 5 4. Takings Claim 6 “The Takings Clause of the Fifth Amendment, made applicable 7 to the states through the Fourteenth, provides that private 8 property shall not be taken without just compensation.” Lingle 9 v. Chevron U.S.A Inc., 544 U.S. 528, 536 (2005). The Supreme 10 Court has “recognized that government regulation of private 11 property may in some instances, be so onerous” that it amounts 12 to a taking. Id. at 537. A regulation constitutes an 13 unconstitutional taking when: (1) it requires an owner to suffer 14 a permanent physical invasion of its property; (2) it completely 15 deprives an owner of all economically beneficial use of its 16 property; or (3) upon evaluation of the factors set forth in 17 Penn Central it is deemed to be an impermissible invasion of the 18 owners property rights. Id. at 538. Under Penn Central, to 19 determine whether a regulation constitutes a taking courts 20 consider: (1) the economic impact on the claimant; (2) the 21 extent to which the regulation has interfered with distinct 22 investment-backed expectations; and (3) the character of the 23 governmental action. Penn Cent. Transp. Co. v. City of New 24 York, 438 U.S. 104, 125 (1978). 25 Plaintiffs argue that under the Penn Central factors, the 26 orders have amounted to a taking because they have reduced 27 Plaintiffs’ profits and their investment-backed expectations 28 that they would be able to use the property for short term 1 lodging and dining. Opp’n at 17. Plaintiffs also argue that 2 the character of the regulation weighs in favor of finding a 3 taking since they were not implemented through the legislative 4 process. Id. 5 But, as the Court explained in Penn Central, the relevant 6 inquiry is whether the government interference can be 7 characterized as a physical invasion rather than an 8 “interference aris[ing] from some public program adjusting the 9 benefits and burdens of economic life to promote the common 10 good.” Penn Cent., 438 U.S. at 124. “A ‘taking’ may more 11 readily be found when the interference with property can be 12 characterized as a physical invasion by the government.” Id. 13 The Court did not suggest, as Plaintiffs do here, that the 14 characterization of the action as executive rather than 15 legislative is relevant to the takings analysis. 16 Further, where a state has “reasonably concluded that ‘the 17 health, safety, morals, or general welfare’ would be promoted by 18 prohibiting particular contemplated uses of land, [the Supreme] 19 Court has upheld land-use regulations that destroyed or 20 adversely affected recognized real property interests.” Penn 21 Cent., 438 U.S. at 125. For example, Mugler v. Kansas involved 22 a challenge to Kansas’ restrictions on the sale of alcohol. 123 23 U.S. 623, 659-60 (1887). Challengers, brewery businesses, 24 argued that the prohibition interfered with their investment- 25 backed expectation when they bought the property that they could 26 use it as a brewery. Id. at 664. The Supreme Court, however, 27 rejected their argument that this amounted to a taking requiring 28 compensation. Id. Key to the Court’s ruling was that the State 1 had determined the sale of alcohol to be detrimental to public 2 health. Id. at 668-69. The Court noted that:

3 A prohibition simply upon the use of property for purposes that are declared, by valid legislation, to 4 be injurious to the health, morals, or safety of the community, cannot, in any just sense, be deemed a 5 taking or an appropriation of property for the public benefit. Such legislation does not disturb the owner 6 in the control or use of his property for lawful purposes, nor restrict his right to dispose of it, but 7 is only declared by the state that its use by anyone, for certain forbidden purposes, is prejudicial to the 8 public interest. 9 Id. While Mugler was decided pre-Penn Central, it is 10 instructive on how general prohibitions on the use of land to 11 protect public health should be considered under the factors 12 today. Plaintiffs here, short-term lodging and restaurant 13 businesses, argue, as the challengers did in Mugler, that the 14 orders interfered with their investment-backed expectations that 15 they could use their property as such. Opp’n at 17. But like 16 in Mugler, that the government forbade certain property uses it 17 determined to be injurious to public health does not constitute 18 a taking. Plaintiffs were still able to use their property for 19 lawful purposes or dispose of it. Further, under the orders, 20 Plaintiffs were not prohibited from operating their businesses 21 entirely but rather were subject to certain restrictions. 22 States’ Mot. at 9. While Plaintiffs may have lost profits as a 23 result, this does not amount to a taking. See PCG-SP Venture I 24 LLC v. Newsom, No. EDCV201138JGBKKX, 2020 WL 4344631, at *10 25 (C.D. Cal. June 23, 2020) (“To the extent the Orders temporarily 26 deprive Plaintiffs of the use and benefit of its hotel, the 27 Takings Clause is indifferent. The State is entitled to 28 prioritize the health of the public over the property rights of 1 the individual.”) Thus, this claim is dismissed with prejudice 2 because the Court finds amendment would be futile. See 3 Deveraturda, 454 F.3d at 1046. 4 5. Dormant Commerce Clause Claim 5 “Although the Commerce Clause is by its text an affirmative 6 grant of power to Congress to regulate interstate and foreign 7 commerce, the Clause has long been recognized as a self- 8 executing limitation on the power of the States to enact laws 9 imposing substantial burdens on such commerce.” Nat’l Ass’n of 10 Optometrists & Opticians v. Harris, 682 F.3d 1144, 1147 (9th 11 Cir. 2012) (quoting South-Centr. Timber Dev., Inc. v. Wunnicke, 12 467 U.S. 82, 87 (1984)). This limitation on the states to 13 regulate commerce is “known as the dormant Commerce Clause.” 14 Id. The primary purpose of the dormant Commerce Clause is to 15 prohibit “statutes that discriminate against interstate 16 commerce” by providing benefits to “in-state economic interests” 17 while “burdening out-of-state competitors.” Id. at 1148 18 (internal quotation marks and citations omitted). 19 “If a statute discriminates against out-of-state entities 20 on its face, in its purpose, or in its practical effect, it is 21 unconstitutional unless it ‘serves a legitimate local purpose, 22 and this purpose could not be served as well by available 23 nondiscriminatory means.’” Rocky Mountain Farmers Union v. 24 Corey, 730 F.3d 1070, 1087 (9th Cir. 2013) (quoting Maine v. 25 Taylor, 477 U.S. 131, 138 (1986)). “Absent discrimination, [the 26 Court] will uphold the law ‘unless the burden imposed on 27 [interstate] commerce is clearly excessive in relation to the 28 putative local benefits.’” Id. at 1087-88 (quoting Pike v. 1 Bruce Church, Inc., 397 U.S. 137, 142 (1970)). “The party 2 challenging the statute bears the burden of showing 3 discrimination.” Black Star Farms, LLC v. Oliver, 600 F.3d 4 1225, 1230 (9th Cir. 2010). 5 Here, the orders are facially neutral, as they apply to 6 lodgings and restaurants regardless of their ties to interstate 7 commerce. See Int’l Franchise Ass’n, Inc. v. City of Seattle, 8 803 F.3d 389, 400 (9th Cir. 2015). Nor is there any indication 9 that the purpose of the orders is to discriminate rather than 10 advance the legitimate objective of curbing the spread of COVID- 11 19. Rocky Mountain Farmers Union, 730 F.3d at 1097-98 (“The 12 party challenging a regulation bears the burden of establishing 13 that a challenged statute has a discriminatory purpose or effect 14 under the Commerce Clause. We will assume that the objectives 15 articulated by the legislature are actual purposes of the 16 statute, unless an examination of the circumstances forces us to 17 conclude that they could not have been a goal of the 18 legislation.”) And any incidental effect on interstate commerce 19 is not substantially outweighed by the local benefits of 20 reducing the spread of COVID-19, a contagious and deadly 21 disease. See Chinatown Neighborhood Ass'n v. Harris, 794 F.3d 22 1136, 1146-47 (9th Cir. 2015) (finding no significant 23 interference with interstate commerce when the regulation 24 addressed legitimate matters of local concern and did not 25 involve the regulation of activities that were inherently 26 national or require a uniform system of regulation); see also 27 Hopkins Hawley LLC v. Cuomo, No. 20-CV-10932 (PAC), 2021 WL 28 465437, at *8 (S.D.N.Y. Feb. 9, 2021) (“even assuming that the em REI ONE aOR NII OEE EEE II EES Oe

1 Dining Policy has imposed incidental burdens on interstate 2 commerce—for example, on out-of-state restaurant suppliers or 3 interstate travelers—the Plaintiffs have not shown that these 4 burdens are ‘incommensurate’ with the local benefit of 5 | mitigating further transmission of the COVID-19 virus.”) 6 | Accordingly, Plaintiffs have failed to state a plausible dormant 7 Commerce Clause claim and Defendants’ motion to dismiss this 8 final claim is granted with prejudice, as the Court finds that 9 amendment would be futile. See Deveraturda, 454 F.3d at 1046. 10 11 IIl. ORDER 12 For the reasons set forth above, the Court GRANTS 13 Defendants’ Motions to Dismiss all claims against them WITH 14 PREJUDICE. 15 IT IS SO ORDERED. 16 Dated: August 4, 2021 7 ke Me 18 teiren staves odermacr 7008 19 20 21 22 23 24 25 26 27 28 21