Balubhai G. Patel, et al. v. City of Henderson, et al.

• Court: District Court, D. Nevada
• Decided: November 13, 2025
• Docket: 2:24-cv-01772
• Status: Unknown

Opinion

1 UNITED STATES DISTRICT COURT

2 DISTRICT OF NEVADA

3 * * *

4 Balubhai G. Patel, et al., Case No. 2:24-cv-01772-BNW

5 Plaintiffs, ORDER 6 v.

7 City of Henderson, et al.,

8 Defendants.

9 10 Before the Court is Defendants’ motion to dismiss. ECF No. 50. Plaintiffs responded at 11 ECF Nos. 54 and 55.1 Defendants replied at ECF No. 58. The parties are familiar with the facts 12 and arguments of this case, so the Court incorporates them here only as necessary to its analysis. 13 Because Plaintiffs fail to allege sufficient facts to state claims for relief, the Court grants 14 Defendants’ motion to dismiss. As set forth below, the Court grants leave to amend only as to 15 certain claims. Defendants’ request for a more definite statement is denied as moot. 16 I. DISCUSSION 17 A. Legal Standard 18 An initial pleading must contain “a short and plain statement of the claim showing that the 19 pleader is entitled to relief.” Fed. R. Civ. P. 8(a). The court may dismiss a complaint for “failure 20 to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). In ruling on a motion 21 to dismiss, “[a]ll well-pleaded allegations of material fact in the complaint are accepted as true 22 and are construed in the light most favorable to the non-moving party.” Faulkner v. ADT Sec. 23 Services, Inc., 706 F.3d 1017, 1019 (9th Cir. 2013) (citations omitted). The court is “not bound to 24 accept as true a legal conclusion couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 25 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). 26

27 1 In the future, Plaintiffs are advised they must file a single response. See Fed. R. Civ. P. 7; see 1 To survive a motion to dismiss, a complaint need not contain “detailed factual 2 allegations,” but it must do more than assert “labels and conclusions” or “a formulaic recitation of 3 the elements of a cause of action . . . .” Id. (quoting Twombly, 550 U.S. at 555). In other words, a 4 claim will not be dismissed if it contains “sufficient factual matter, accepted as true, to state a 5 claim to relief that is plausible on its face,” meaning that the court can reasonably infer “that the 6 defendant is liable for the misconduct alleged.” Id. at 678 (internal quotation and citation 7 omitted). The Ninth Circuit, in elaborating on the pleading standard described in Twombly and 8 Iqbal, has held that for a complaint to survive dismissal, the plaintiff must allege non-conclusory 9 facts that, together with reasonable inferences from those facts, are “plausibly suggestive of a 10 claim entitling the plaintiff to relief.” Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 11 2009). 12 As a general rule, courts may not consider material beyond the pleadings when deciding a 13 motion to dismiss under Rule 12(b)(6). Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 14 2001). If they do consider such material, the motion must be treated as one for summary 15 judgment. Id. But there are two exceptions to this rule. Relevant here, courts may take judicial 16 notice of matters of public record. Id. at 689 (citing Mack v. South Bay Beer Distrib., 798 F.2d 17 1279, 1282 (9th Cir. 1986)). 18 Rule 15 requires district courts to “freely give leave [to amend] when justice so requires.” 19 Fed. R. Civ. P. 15(a)(2). This policy is “to be applied with extreme liberality.” Eminence Capital 20 LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (quotation omitted). “[A] district court 21 should grant leave to amend even if no request to amend the pleading was made, unless it 22 determines that the pleading could not possibly be cured by the allegation of other facts.” Lopez v. 23 Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (quotation omitted). Amendment is futile only if no 24 set of facts can be proven under the amendment that would constitute a valid and sufficient claim. 25 Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988). 26 B. Standing of the Individual Defendants 27 Defendants argue that the three individual Plaintiffs (Arpit, Mayurkumar, and Balubhai) 1 property. ECF No. 50 at 3. Plaintiffs respond that the individuals have standing to sue because 2 they endured harm to their business or family trust. ECF No. 55 at 10. In their reply, Defendants 3 explain that a trustee cannot bring claims on his own behalf over property solely owned by a trust 4 because the trustee has no personal possessory interest. ECF No. 58 at 2. Defendants further 5 explain that Nevada law precludes members of an LLC from suing on behalf of the company. Id. 6 In the first amended complaint, Plaintiffs state that Balubhai is the legal and beneficial 7 owner of OM Hotels, LLC; Arpit is the managing member of OM Hotels; and Mayurkumar is a 8 member of OM Hotels. ECF No. 41 ¶¶ 8–10. According to Plaintiffs, Balubhai purchased the 9 motel and leased it to Arpit, Mayurkumar, and OM Hotels. Id. ¶ 8. Later on, Plaintiffs specify that 10 Arpit and Mayurkumar were operating the motel by way of their roles at OM Hotels. Id. ¶ 10. 11 The first amended complaint contains no information about the role of the Balubhai G. Family 12 Living Trust, though the Trust is named as a Plaintiff and Balubhai is the trustee. See ECF No. 13 41. However, Defendants attached an exhibit showing that the Trust (not Balubhai individually) 14 owns the motel. ECF No. 50, Ex. C. The Court takes judicial notice of this public record. See Lee 15 v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). 16 “The question of whether a party has standing to sue under Article III is a threshold issue 17 that must be addressed before turning to the merits of a case.” Shulman v. Kaplan, 58 F.4th 404, 18 407 (9th Cir. 2023). At the pleading stage, a plaintiff must establish standing by showing “(1) an 19 injury in fact that is concrete and particularized and actual or imminent, (2) a causal connection 20 between the injury and the defendant’s conduct, and (3) a likelihood that the injury will be 21 redressed by a favorable decision.” Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 102 22 (1998). Shareholders do not have standing to redress injuries to the corporation unless they are 23 injured directly and independently of the corporation. Shell Petroleum, N.V. v. Graves, 709 F.2d 24 593, 595 (9th Cir. 1983). “[A] shareholder must assert more than personal economic injury 25 resulting from a wrong to the corporation.” Id. (citing Von Brimer v. Whirlpool Corp., 536 F.2d 26 838, 846 (9th Cir. 1976)). 27 Courts in this circuit have determined that individual plaintiffs lack standing when they 1 Kenney v. Wells Fargo Bank, N.A., No. 2:25-cv-04845-WLH-PD, 2025 WL 2117410 at *3 (C.D. 2 Cal. July 18, 2025). As one court explained, a sole member “certainly has a financial interest in 3 the success of [an LLC] and is undoubtedly affected when the LLC suffers a financial injury,” but 4 that injury “is derivative of [the LLC’s] injury, and thus [the member] was not injured directly 5 and independently.” Brown v. Dep’t of Water & Power, No. 2:24-cv-05152-SVW-JPR, 2024 WL 6 5466666, at *4 (C.D. Cal. Nov. 27, 2024). Another court noted that where “the gravamen of the 7 complaint is injury to an LLC’s property, the right of action lies with the LLC, not the individual 8 members.” Sinclair v. Fox Hollow of Turlock Owners Ass’n, No. 1:03-cv-05439-OWW, 2011 WL 9 2433289, at *4 (E.D. Cal. June 13, 2011). Similarly, only the trustee, as opposed to the 10 beneficiaries of a trust, generally has standing to pursue claims that belong to the trust. 11 Chauffeurs, Teamsters & Helpers, Local No. 391 v. Terry, 494 U.S. 558, 567 (1990); see also 12 Warren v. Ficek, No. CV 18-110-BLG-SPW-TJC, 2020 WL 6136378, at *3 (D. Mont. July 6, 13 2020), report and recommendation adopted, No. CV 18-110-BLG-SPW, 2020 WL 5525587 (D. 14 Mont. Sept. 15, 2020) (“Here, the Property was purchased by Thornton in her capacity as Trustee. 15 As such, any injury to the Property is an injury to the Trust and not to Warren personally.”). 16 Here, Plaintiffs have claimed no injuries apart from the alleged injuries to the LLC or 17 Trust. While they argue that Defendants’ “closure and refusal to reopen [the motel] and 18 classifying it as a non-conforming use” harmed them, these statements only allege harm to the 19 Trust (as owner of the property) and the LLC (as the company who manages the motel). Despite 20 Plaintiffs’ conclusory arguments to the contrary, the first amended complaint is devoid of 21 individual harm allegations. See ECF No. 55 at 10. So, the Court dismisses the claims brought by 22 Plaintiffs Balubhai, Arpit, and Mayurkumar with leave to amend in the event they are able to 23 properly allege individualized injury. 24 C. Section 1983 Claims 25 i. Statute of Limitations 26 “A claim may be dismissed under Rule 12(b)(6) on the ground that it is barred by the 27 applicable statute of limitations only when ‘the running of the statute is apparent on the face of 1 Cir. 2010) (quoting Huynh v. Chase Manhattan Bank, 465 F.3d 992, 997 (9th Cir. 2006)). “[A] 2 complaint cannot be dismissed unless it appears beyond doubt that the plaintiff can prove no set 3 of facts that would establish the timeliness of the claim.” Supermail Cargo, Inc. v. U.S., 68 F.3d 4 1204, 1206 (9th Cir.1995). 5 “Nevada’s statute of limitations for personal injury actions governs the timeliness of 6 [plaintiff’s] § 1983 claims.” Hamilton v. Jasperson, 602 F. Supp. 3d 1347, 1352 (D. Nev. 2022), 7 aff’d, No. 22-15866, 2023 WL 2493732 (9th Cir. Mar. 14, 2023) (citing Jones v. Blanas, 393 8 F.3d 918, 927 (9th Cir. 2004)). The limitation period for personal injury actions in Nevada is two 9 years. Id.; Nev. Rev. Stat. § 11.190(4)(e). However, federal law governs when a claim accrues. 10 Soto v. Sweetman, 882 F.3d 865, 870 (9th Cir. 2018). The standard rule is that a claim accrues 11 “when the plaintiff has a complete and present cause of action, that is, when the plaintiff can file 12 suit and obtain relief.” Id. (quoting Wallace v. Kato, 549 U.S. 384, 388 (2007)) (simplified). 13 Plaintiffs allege that on October 26, 2021, Defendants Massey and Dwyer searched the 14 motel, issued a correction notice, and closed the second floor of the motel with no administrative 15 hearing or opportunity to be heard. ECF No. 41 ¶¶ 13–16, 33. Plaintiffs further allege that on 16 various days in June 2022, Defendants Massey and Dwyer illegally searched the motel. Id. ¶ 17. 17 Defendants argue that Plaintiffs’ claims stemming from October 2021 and June 2022 are barred 18 by the statute of limitations. 19 Here, Plaintiffs filed their complaint on July 2, 2024. Any § 1983 claims that accrued 20 before July 2, 2022, would be barred by the statute of limitations. Not only is the running of the 21 statute of limitations apparent from the face of the complaint; Plaintiffs do not contest 22 Defendants’ arguments that these claims should be dismissed as futile.2 Thus, Plaintiffs’ § 1983 23 claims that accrued on October 2021 and June 2022 are barred and dismissed with prejudice. 24 25 26

27 2 Local Rule 7-2(d) allows the Court to grant portions of Defendants’ motion to dismiss as 1 However, Plaintiffs also allege facts in support of their § 1983 claims that occurred within 2 the two-year period. So, the Court continues its analysis below. 3 ii. Defendants’ Liability 4 1. The City of Henderson 5 In their complaint, Plaintiffs allege that the actions by the City of Henderson were “taken 6 pursuant to a policy, custom, or practice to close the motel, and other properties nearby, in order 7 to transfer such properties at a reduced and depressed value to a private developer.” ECF No. 41 8 ¶ 46. Defendants argue that Plaintiffs have not pled any theories of liability as to the City. ECF 9 No. 58 at 3. “Merely alleging that some unspecified permutation of City employees acted, without 10 more, and then asking the Court to assume that those unspecified individuals have final policy- 11 making authority will not do.” ECF No. 50 at 6–7. Plaintiffs respond that “the City had a policy 12 to close the motel and drive Plaintiffs out of business, [which] can be inferred from the post- 13 closure actions by the City where it refused to reinspect the motel after the closure allowing the 14 180-day period to pass and then declaring it a non-conforming use.” ECF No. 55 at 9 (citing ECF 15 No. 41 ¶¶ 30–46). 16 Municipalities cannot be held liable under § 1983 on a respondeat superior theory. Monell 17 v. Dep’t of Soc. Servs. of City of New York, 436 U.S. 658, 691 (1978). They “can be found liable 18 under § 1983 only where the municipality itself causes the constitutional violation at issue.” City 19 of Canton v. Harris, 489 U.S. 378, 385 (1989) (citing Monell, 436 U.S. 658). In order to establish 20 municipal liability under § 1983, a plaintiff must prove: “(1) that [the plaintiff] possessed a 21 constitutional right of which he was deprived; (2) that the municipality had a policy; (3) that this 22 policy amounts to deliberate indifference to the plaintiff’s constitutional right; and (4) that the 23 policy is the moving force behind the constitutional violation.” Dougherty v. City of Covina, 654 24 F.3d 892, 900 (9th Cir. 2011). 25 Deliberate indifference is “a stringent standard of fault, requiring proof that a municipal 26 actor disregarded a known or obvious consequence of his action.” Bd. of the Cnty. Comm'rs v. 27 Brown, 520 U.S. 397, 410 (1997). When “facts available to city policymakers put them on actual 1 of the constitutional rights of their citizens,” the deliberate indifference standard is satisfied. City 2 of Canton, 489 U.S. at 396. Finally, municipal liability under § 1983 only attaches if the plaintiff 3 proves “a direct causal link between a municipal policy or custom and the alleged constitutional 4 deprivation.” Id. at 385. 5 Here, Plaintiffs do not allege sufficient facts to support a Monell claim. Rather, they 6 conclude—without more—that Defendants’ actions were taken pursuant to a policy, custom, or 7 practice to close the motel and transfer the properties to a private developer. See ECF No. 41 8 ¶ 46. This conclusory statement fails to allege facts as to how these events took place pursuant to 9 a policy, how that policy amounts to a deliberate indifference of Plaintiffs’ constitutional rights, 10 or how that policy is the moving force behind the constitutional violation. But Court cannot find, 11 at this juncture, that there are no set of facts Plaintiffs could allege to state a Monell claim. Thus, 12 Plaintiffs’ § 1983 claims against the City are dismissed with leave to amend. 13 2. Other Defendants 14 “A plaintiff must allege facts, not simply conclusions, that show that an individual was 15 personally involved in the deprivation of his civil rights.” Barren v. Harrington, 152 F.3d 1193, 16 1194 (9th Cir. 1998). Defendants argue that Plaintiffs “fail to allege any facts to distinguish 17 between the conduct of any individual defendant.” ECF No. 50 at 5. Rather, Defendants explain 18 that Plaintiffs simply reference all “Defendants” generally. ECF No. 58 at 3. Plaintiffs do not 19 address this argument. 20 Here, Plaintiffs waft back and forth between distinguishing the Defendants and lumping 21 them together. For example, Plaintiffs allege that “the City, along with the Health Department, 22 and Code Enforcement, including Defendants Dwyer and Massey, completely shut down the 23 motel.” ECF No. 41 ¶ 30. In the next sentence, Plaintiffs allege that the “Defendants, and each of 24 them, did not clear Plaintiffs to operate . . .” Id. In addition, Plaintiffs name Paul Beaton as a 25 Defendant but do not refer to him individually in the complaint (apart from the “parties” section). 26 As to Plaintiffs’ § 1983 claims, they group the Defendants together. “[T]he City and all of the 27 defendants, and each of them, violated and further threaten to violate the constitutional and civil 1 individual Defendants were personally involved in the numerous claims under § 1983, those 2 claims are dismissed against the individual Defendants with leave to amend. 3 iii. First Amendment Petition and Grievances 4 The Petition and Grievances clause of the First Amendment protects the right of 5 individuals to appeal to courts and other government forums to resolve legal disputes. Borough of 6 Duryea, Pa. v. Guarnieri, 564 U.S. 379, 387 (2011). To successfully state a claim, Plaintiffs must 7 plead facts indicating that they were blocked from expressing their concerns to government 8 officials. See Comm. to Protect our Agric. Water v. Occidental Oil & Gas Corp., 235 F. Supp. 3d 9 1132, 1184 (E.D. Cal. 2017); see also Heights Apartments, LLC v. Walz, 30 F.4th 720, 732 (8th 10 Cir. 2022) (“To state a plausible claim under the Petition Clause, Heights must identify the claim 11 it wished to bring, [and] the official actions that frustrated its attempt to redress that 12 grievance . . . .”). Importantly, “the First Amendment does not impose any affirmative obligation 13 on the government to listen . . . .” Smith v. Ark. State Highway Emps., Local 1315, 441 U.S. 463, 14 465 (1979). “To demonstrate retaliation in violation of the First Amendment, a plaintiff must 15 prove: (1) a defendant took action that would chill a person of ordinary firmness from future First 16 Amendment activities, and (2) the defendant would not have taken the action but for the 17 defendant’s desire to chill plaintiff’s speech.” Mazzeo v. Gibbons, 649 F. Supp. 2d 1182, 1194 (D. 18 Nev. 2009) (citing Skoog v. Cnty. of Clackamas, 469 F.3d 1221, 1232 (9th Cir. 2006)). 19 Defendants argue that Plaintiffs have alleged no facts contending that any official 20 prevented them from petitioning the government. ECF No. 50 at 7. Plaintiffs respond that they 21 were not provided an administrative hearing for the alleged non-payment of delinquent transient 22 occupancy taxes. ECF No. 55 at 2. Plaintiffs further argue that after they paid the delinquency, 23 Defendants closed the motel without a hearing and never conducted a reinspection, which raise 24 issues of retaliation. Id. Defendants reply that the government is under no obligation to listen or 25 respond to grievances. ECF No. 58 at 4. They further argue that even if Plaintiffs morph their 26 claim into a retaliation theory under the First Amendment, it would still fail because Plaintiffs 27 cannot allege facts that the City retaliated against them because the alleged retaliatory acts took 1 Here, Plaintiffs failed to state a First Amendment claim under either theory. Their claims 2 that the City did not provide the required hearing or ceased motel operations do not allege they 3 were blocked from expressing their concerns to government officials. ECF No. 41 ¶¶ 28–29. Nor 4 have Plaintiffs alleged how Defendants “chilled” Plaintiffs from petitioning the government. At 5 best, Plaintiffs are alleging that Defendants did not listen to their requests for a reinspection or 6 hearing, which is insufficient to state a First Amendment claim. Given the sparse facts alleged, 7 the Court dismisses Plaintiffs’ First Amendment claim with leave to amend in the event they are 8 able to allege supporting facts. 9 iv. Fourth Amendment Unreasonable Searches and Seizures 10 The Fourth Amendment protects against unreasonable searches and seizures. U.S. Const. 11 amend. IV. “A search occurs when an expectation of privacy that society is prepared to consider 12 reasonable is infringed.” United States v. Jacobsen, 466 U.S. 109, 113 (1984). The Ninth Circuit 13 has found Fourth Amendment search claims insufficient to survive a motion to dismiss when the 14 plaintiff did not allege “how the search was conducted or what specific area of the property was 15 searched.” Dalewood Holding LLC v. City of Baldwin Park, 859 F. App’x 62, 63 (9th Cir. 2021) 16 (citing Bell v. Wolfish, 441 U.S. 520, 559 (1979)) (“Courts must consider the scope of the 17 particular intrusion, the manner in which it is conducted, the justification for initiating it, and the 18 place in which it is conducted.”). 19 “A seizure of property occurs when there is some meaningful interference with an 20 individual’s possessory interests in that property.” Jacobsen, 466 U.S. at 113. The seizure must be 21 unreasonable to violate the Fourth Amendment. Soldal v. Cook Cnty., 506 U.S. 56, 61–62 (1992); 22 see also Florida v. Jimeno, 500 U.S. 248, 250 (1991) (“The Fourth Amendment does not 23 proscribe all state-initiated searches and seizures; it merely proscribes those which are 24 unreasonable.”). To determine whether a seizure was reasonable, courts balance the intrusiveness 25 against the government’s interests. Jacobsen, 466 U.S. at 113. 26 Defendants argue that Plaintiffs failed to allege a claim under the Fourth Amendment 27 because they have not specified whether Defendants conducted an unreasonable search or an 1 No. 50 at 10. Defendants further argue that the Fourth Amendment does not protect against 2 searches in certain areas of the motel that are open to the public. Id. at 9–10. Plaintiffs respond 3 that they are alleging both an illegal search and seizure. ECF No. 55 at 3. They do not seem to 4 oppose the argument regarding the public areas of the motel but allege that there was an illegal 5 search of the locked areas of the motel and that the motel closure was an illegal seizure. Id. at 3– 6 4. Defendants reply that Plaintiffs allege no illegal searches inside the two-year statute of 7 limitations. ECF No. 58 at 5. Defendants further argue that Plaintiffs’ illegal seizure claim is 8 futile because they remain in legal and physical possession of the motel. Id. at 6 (citing Dalewood 9 Holding LLC v. City of Baldwin Park, 859 F. App’x 62, 63 (9th Cir. 2021)). 10 First, upon reviewing the amended complaint, the Court agrees with Defendants that 11 Plaintiffs alleged no facts supporting an illegal search apart from the instances in October 2021 12 and June 2022. See ECF No. 41 ¶¶ 13, 17. As discussed above, claims arising on those dates are 13 barred by the statute of limitations. See supra, Section II.C.i. Accordingly, Plaintiffs’ Fourth 14 Amendment search claim based on the events in October 2021 and June 2022 is dismissed with 15 prejudice. To the extent Plaintiffs believe that a warrantless search occurred on October 19, 2023, 16 they may amend. Should Plaintiffs choose to do so, they must allege which specific Defendants 17 were involved and “how the search was conducted or what specific area of the property was 18 searched.” Dalewood Holding LLC, 859 F. App’x at 63; Bell v. Wolfish, 441 U.S. 520 (1979). 19 Second, Plaintiffs have not alleged facts supporting how Defendants’ closure of the motel 20 was unreasonable. They seem to allege that Defendants closed the motel due to numerous safety 21 violations. For example, Plaintiffs state that on October 18, 2023, they were cited with several 22 notices of violations, including “1) mechanical equipment (the units inspected did not have 23 functional permanently installed heating equipment; 2) bathroom violations (grab bars, water 24 closet clearance, etc.) 3) no proper automatic fire sprinkler system.” ECF No. 41 ¶ 36. They 25 explain that the next day “the City, along with the Health Department, and Code Enforcement, 26 completely shut down the [motel] . . . stating the structural issue from the permit was 27 unresolved.” Id. ¶ 30. Assuming the closure constituted a seizure, it may have been reasonable 1 and fundamental duties a city can perform is to protect its residents from unsafe housing 2 conditions.”). Plaintiffs allege no facts to the contrary. Therefore, the Court dismisses their Fourth 3 Amendment seizure claim with leave to amend. 4 However, the Court grants leave to amend as this claim is not futile. Defendants’ 5 argument that this claim is futile based on Dalewood Holding LLC v. City of Baldwin Park, 859 6 F. App’x 62 (9th Cir. 2021), is not convincing because that case is distinguishable. In Dalewood, 7 the Ninth Circuit explained that the plaintiff “alleges only that the City continues to threaten to 8 seize illegally the property and remove the buildings on it. This threat does not amount to 9 meaningful interference with [Dalewood’s] possessory interest in [the] property.” Id. at 64. Here, 10 Plaintiffs are alleging more than threats; they allege that Defendants shut down the motel’s 11 operations. At this stage, the Court cannot conclude that such acts do not constitute a meaningful 12 interference with the possessory interests in the motel. 13 v. Fifth Amendment Takings Clause 14 The Fifth Amendment Takings Clause provides a cause of action when the government 15 takes private property for public use without just compensation. Knick v. Twp. of Scott, 16 Pennsylvania, 588 U.S. 180, 184 (2019). The Supreme Court defines the public use requirement 17 broadly. Kelo v. City of New London, Conn., 545 U.S. 469, 480 (2005). Two types of government 18 action may constitute a taking: physical and regulatory. Tahoe-Sierra Pres. Council, Inc. v. Tahoe 19 Reg’l Plan. Agency, 535 U.S. 302, 321 (2002). 20 A physical taking occurs “[w]hen the government physically takes possession of an 21 interest in property for some public purpose.” Id. at 322. A regulatory taking occurs when 22 government regulation of private property is “so onerous that its effect is tantamount to a direct 23 appropriation or ouster.” Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 528 (2005). “Regulatory 24 actions generally will be deemed per se takings for Fifth Amendment purposes (1) where 25 government requires an owner to suffer a permanent physical invasion of her property or (2) 26 where regulations completely deprive an owner of ‘all economically beneficial us[e]’ of her 27 property.” Id. (internal citations omitted). Outside these two categories, regulatory takings 1 Under Penn Central, courts consider the regulation’s economic impact on the claimant, 2 the extent to which it interferes with distinct investment-backed expectations, and the character of 3 the government action. Id. at 124. These factors seek “to identify regulatory actions that are 4 functionally equivalent to the classic taking in which government directly appropriates private 5 property or ousts the owner from his domain.” Lingle, 544 U.S. at 529. 6 First, “[i]n considering the economic impact of an alleged taking, we ‘compare the value 7 that has been taken from the property with the value that remains in the property.’” Colony Cove 8 Props., LLC v. City of Carson, 888 F.3d 445, 450 (9th Cir. 2018) (quoting Keystone Bituminous 9 Coal Ass’n v. DeBenedictis, 480 U.S. 470, 497 (1987)). As the Ninth Circuit has explained: “Not 10 every diminution in property value caused by a government regulation rises to the level of an 11 unconstitutional taking.” Id. at 451. “[W]e have observed that diminution in property value 12 because of governmental regulation ranging from 75% to 92.5% does not constitute a taking.” Id. 13 Defendants argue that Plaintiffs have not specified any conduct that would constitute a 14 taking under the Fifth Amendment because they still possess the property and have not purported 15 that the taking was for public use. ECF No. 50 at 9–11. They argue that Plaintiffs have not 16 established a taking under Penn Central either because they have not alleged that the land has 17 been wholly deprived of all economic value. Id. Plaintiffs respond that the closure of the motel is 18 a physical taking and allowing the 180-day period to lapse so that the motel was classified as a 19 non-conforming use is a regulatory taking. ECF No. 55 at 5–7. They assert that the Penn Central 20 analysis is a factual determination that cannot be decided on a motion to dismiss and that the 21 public use clause is construed broadly. Id. Defendants reply that Plaintiffs cannot plead a physical 22 taking because the Trust still owns the property. ECF No. 58 at 6–8. Citing to Ninth Circuit 23 authority stating that courts may resolve regulatory takings claims on a motion to dismiss, 24 Defendants argue that Plaintiffs cannot allege a significant diminution in their property’s value 25 under Penn Central given that they still own the property and it is zoned for mixed use. Id. (citing 26 Hotel & Motel Ass’n of Oakland v. City of Oakland, 344 F.3d 959, 966 (9th Cir. 2003)). 27 First, Plaintiffs cannot allege a physical taking based on the closure of the motel. “A 1 party, and thus cannot support a physical taking claim.” Essavi v. City of Los Angeles, No. 2:24- 2 cv-00454-RGK-AGR, 2024 WL 2743607, at *4 (C.D. Cal. Apr. 25, 2024), aff’d sub nom. Essavi, 3 Tr. of Carasso Fam. Tr. v. City of Los Angeles, No. 24-3336, 2025 WL 2048996 (9th Cir. July 22, 4 2025); see also Vaghashia v. City of Los Angeles, No. 22-56064, 2024 WL 379972, at *1 (9th 5 Cir. Feb. 1, 2024) (holding that preventing a motel from renting to transient customers does not 6 amount to a physical taking). Moreover, the Trust still owns the property. ECF No. 50, Ex. C. 7 This claim is dismissed with prejudice as there are no set of facts Plaintiffs could allege to state a 8 physical taking claim under the Fifth Amendment. 9 Second, Plaintiffs have not alleged a per se regulatory taking. They claim that Defendants 10 refused to reinspect the motel in the 180-day period, causing the motel to lose its legal 11 nonconforming status, which “raises an issue of regulatory taking.” ECF No. 55 at 7. Critically, 12 Plaintiffs fail to identify an ordinance or regulation that supposedly led to the taking. They do not 13 allege they have been deprived of all economically beneficial use of the property, or that the 14 regulation caused them to suffer a physical invasion of their property. Nor could they given that 15 the Trust still owns the property and there are other economic uses for it. To the extent Plaintiffs 16 seek to allege a per se regulatory taking, their claim is dismissed with prejudice. 17 As to their claim under Penn Central, Plaintiffs have alleged no facts that would support 18 the economic impact factor weighing in their favor. See Evans Creek, LLC v. City of Reno, No. 19 21-16620, 2022 WL 14955145, at *1 (9th Cir. Oct. 26, 2022) (“As pleaded, the complaint lacks 20 any information about the value of the property when the 2020 Application was submitted or its 21 value after the 2020 Application was denied . . . it is not possible for this Court to determine what 22 the economic impact to the property is, even taking the allegations in the complaint as true.”); see 23 also S. California Rental Hous. Ass’n v. Cnty. of San Diego, 550 F. Supp. 3d 853, 864 (S.D. Cal. 24 2021) (“It is difficult to calculate the impact that the Ordinance has on the value of Plaintiff’s 25 members’ property interests, particularly because Plaintiff has not included any facts related to a 26 diminution of value of their property.”). Even if Plaintiffs had alleged facts relevant to the Penn 27 Central factors, it is difficult to see how they could show a diminution in property value rising to 1 the level of an unconstitutional taking given that the Trust still owns the property, which is zoned 2 for multiple uses. 3 Defendants do not address the other factors in detail, so the Court will not either, other 4 than to say that Plaintiffs have alleged no facts concerning the regulation’s interference with 5 distinct investment-backed expectations or the character of the government action. Accordingly, 6 the Court dismisses this claim. However, it will grant leave to amend only to the extent Plaintiffs 7 can allege facts demonstrating the regulation’s economic impact, the extent to which the 8 regulation interferes with distinct investment-backed expectations, and the character of the 9 government action. 10 vi. Fourteenth Amendment Due Process Clause 11 1. Void for Vagueness 12 The Fourteenth Amendment precludes states from “depriv[ing] any person of life, liberty, 13 or property, without due process of law.” U.S. Const. amend. XIV, § 1. The void for vagueness 14 doctrine “addresses at least two connected but discrete due process concerns: first, that regulated 15 parties should know what is required of them so they may act accordingly; second, precision and 16 guidance are necessary so that those enforcing the law do not act in an arbitrary or discriminatory 17 way.” Fed. Commc’n Comm’n v. Fox Television Stations, Inc., 567 U.S. 239, 253 (2012). As to 18 fair notice, courts consider whether a statute “fails to provide a person of ordinary intelligence 19 fair notice of what is prohibited.” Hill v. Colorado, 530 U.S. 703, 732 (2000). As to the 20 enforcement concern, the Supreme Court has stated that “laws must provide explicit standards for 21 those who apply them,” and that “[a] vague law impermissibly delegates basic policy matters to 22 policemen, judges, and juries for resolution on an ad hoc and subjective basis.” Grayned v. City 23 of Rockford, 408 U.S. 104, 108–09 (1972). 24 Defendants argue that Plaintiffs do not articulate what law they believe is vague or 25 indefinite, let alone how the terms of that unspecified law or ordinance is unconstitutionally 26 vague. ECF No. 50 at 12. Plaintiffs do not oppose this argument or otherwise address it. See ECF 27 No. 55. In their complaint, they allege that “the Notice and Ordinance on its face and as applied to 1 No. 41 ¶ 55. They do not specify which notice or ordinance they are referring to, or how it is so 2 vague as to not provide fair notice or to lead to arbitrary enforcement. Accordingly, Plaintiffs’ 3 claim under the void for vagueness theory is dismissed with leave to amend. 4 2. Substantive Due Process 5 “Substantive due process ‘forbids the government from depriving a person of life, liberty, 6 or property in such a way that ‘shocks the conscience’ or ‘interferes with the rights implicit in the 7 concept of ordered liberty.’” Corales v. Bennett, 567 F.3d 554, 568 (9th Cir. 2009) (quoting 8 Nunez v. City of Los Angeles, 147 F.3d 867, 871 (9th Cir. 1998)). Courts “begin the substantive 9 due process analysis with a ‘careful description’ of the asserted fundamental right.” Regino v. 10 Staley, 133 F.4th 951, 963 (9th Cir. 2025) (quoting Washington v. Glucksberg, 521 U.S. 702, 721 11 (1997)). When government action affects only economic interests, it does not interfere with 12 fundamental rights. Samson v. City of Bainbridge Island, 683 F.3d 1051, 1058 (9th Cir. 2012). 13 “The right to use property as one wishes is also not a fundamental right.” Slidewaters LLC v. 14 Washington State Dep’t of Lab. & Indus., 4 F.4th 747, 758 (9th Cir. 2021). 15 “Laws that do not infringe a fundamental right survive substantive-due-process scrutiny so 16 long as they are ‘rationally related to legitimate government interests.’” Stormans, Inc. v. 17 Wiesman, 794 F.3d 1064, 1085 (9th Cir. 2015) (quoting Glucksberg, 521 U.S. at 728). Under 18 rational basis review, state conduct is presumed valid and will be upheld so long as it is 19 “rationally related to a legitimate state interest,” such as public health, safety, morals or general 20 welfare. City of Cleburne, Tex. v. Cleburne Living Ctr., 473 U.S. 432, 440 (1985); Yagman v. 21 Garcetti, 852 F.3d 859, 867 (9th Cir. 2017). Plaintiffs may overcome the presumption that state 22 conduct is valid only by a clear showing of arbitrariness and irrationality. Yagman, 852 F.3d at 23 867. “This is an exceedingly high burden.” Id. (quoting Shanks v. Dressel, 540 F.3d 1082, 1088 24 (9th Cir. 2008)). 25 Defendants argue that Plaintiffs fail to identify what ordinance they seek to challenge. 26 Assuming Plaintiffs challenge the downtown master plan, Defendants argue that Plaintiffs must 27 show that the City maintains no legitimate interest in that plan, which they cannot do. ECF No. 50 1 in revoking the motel’s permits” and that the Court cannot decide this issue on a motion to 2 dismiss. ECF No. 55 at 7–8. Defendants reply that if their claim has morphed into challenging the 3 change in nonconforming status, it is still futile because Plaintiffs cannot meet the high burden to 4 show that the change in status was arbitrary or irrational given that the motel closure and 5 nonconforming status change advance legitimate interests in public welfare and safety. ECF No. 6 58 at 9–10. 7 As Defendants point out, it is unclear what state conduct Plaintiffs are alleging violates 8 their substantive due process rights. This alone constitutes failure to state a claim. Plaintiffs 9 merely state that “in doing all of things herein mentioned” Defendants violated their substantive 10 rights under the Due Process Clause. ECF No. 41 ¶ 54. Plaintiffs argue that the City violated their 11 rights by revoking their permit, but they also mention “justifying the closure imposed and the 12 classification of the motel as a non-conforming use.” ECF No. 55 at 5, 8. 13 Under either theory, Plaintiffs fail to state a substantive due process claim. Assuming the 14 unspecified state conduct did not implicate a fundamental right, Plaintiffs do not allege how the 15 conduct was arbitrary or capricious. And if Plaintiffs believe that the state conduct did implicate a 16 fundamental right, they fail to explain what that fundamental right is. The Court cannot determine 17 whether this claim is futile based on the sparse facts before it. Thus, Plaintiffs’ claim is dismissed 18 with leave to amend. However, the Court will note that the Ninth Circuit has found, in an 19 unpublished opinion, that when state conduct closed a motel to abate a nuisance, such conduct 20 was not arbitrary or unreasonable. See Patel v. City of Los Angeles, No. 24-3293, 2025 WL 21 1077132, at *2 (9th Cir. Apr. 10, 2025). 22 3. Procedural Due Process 23 “To state a procedural due process claim, [a plaintiff] must allege ‘(1) a liberty or property 24 interest protected by the Constitution; (2) a deprivation of the interest by the government; [and] 25 (3) lack of process.’” Wright v. Riveland, 219 F.3d 905, 913 (9th Cir. 2000) (quoting Portman v. 26 County of Santa Clara, 995 F.2d 898, 904 (9th Cir. 1993)). “A constitutionally protected property 27 interest arises where there is a reasonable expectation of entitlement deriving from ‘existing rules 1 City of Anaheim, 78 F. App’x 596, 597 (9th Cir. 2003) (citing Board of Regents v. Roth, 408 U.S. 2 564, 577 (1972)). A benefit is not a protected entitlement if government officials may grant or 3 deny the benefit at their discretion. Town of Castle Rock, Colorado v. Gonzales, 545 U.S. 748, 4 756 (2005). As to “lack of process,” property owners are not entitled to receive actual notice 5 before the government takes their property. Jones v. Flowers, 547 U.S. 220, 226 (2006). Due 6 process only requires the government to provide “notice reasonably calculated, under all the 7 circumstances, to apprise interested parties of the pendency of the action and afford them an 8 opportunity to present their objections.” Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 9 306, 314 (1950). 10 Defendants argue that Plaintiffs fail to state a procedural due process claim because they 11 do not allege what property interest they were deprived of or what specific process they were 12 owed but not given. ECF No. 50 at 12–13. Plaintiffs respond that they were not given a pre- or 13 post-deprivation hearing after the motel’s closure on October 19, 2023. ECF No. 55 at 8. 14 Defendants reply that Plaintiffs do not address the issue of what property interest they were 15 supposedly deprived of given that the Trust still owns the property. ECF No. 58 at 8–9. To the 16 extent Plaintiffs’ theory is that they have a property interest in the legal nonconforming status of 17 the property, Defendants argue that theory also fails because it is not a protected entitlement. Id. 18 at 9 (citing Town of Castle Rock, Colorado v. Gonzales, 545 U.S. 748, 756 (2005)). 19 It appears Plaintiffs are alleging that they have a property interest in operating the motel 20 and that they were deprived process when Defendants closed the motel without a hearing. ECF 21 No. 41 ¶ 41. However, Plaintiffs have not alleged facts showing that they had a reasonable 22 expectation of entitlement to continue operating the motel based on an independent source (like 23 municipal law) that was not subject to government discretion. 24 In addition, Plaintiffs have not sufficiently alleged lack of process. In their complaint, they 25 state that Defendants “did not clear Plaintiffs to operate stating the structural issue from the 26 permit was unresolved [] and summarily closed the entire motel.” Id. ¶ 30. But as Defendants 27 point out, Plaintiffs were provided notice of the structural issue two years prior and had been 1 enough information to determine whether this is adequate notice. See Grimm v. City of Portland, 2 125 F.4th 920, 925 (9th Cir. 2025 (“In determining what notice is appropriate under the Mullane 3 standard, we must balance the interest of the State and the individual interest sought to be 4 protected by the Fourteenth Amendment.”) (cleaned up). In sum, the Court dismisses Plaintiffs’ 5 claim with leave to amend to properly allege a constitutionally protected property interest and 6 facts demonstrating that they were not given adequate notice. 7 vii. Fourteenth Amendment Equal Protection Clause 8 Under the Equal Protection Clause, no state “may deny to any person within its 9 jurisdiction the equal protection of the laws.” U.S. Const. amend. XIV, § 1. Plaintiffs may allege 10 equal protection claims in two ways. First, they may allege that defendants intentionally 11 discriminated against them based on their membership in an identifiable class. Furnace v. 12 Sullivan, 705 F.3d 1021, 1030 (9th Cir. 2013). Second, plaintiffs may allege that defendants 13 intentionally treated them differently from similarly situated individuals, and that there was no 14 rational state purpose for the different treatment. Id. 15 Defendants contend that Plaintiffs do not allege that they belong to an identifiable class or 16 that Defendants treated them differently from similarly situated individuals. ECF No. 50 at 14– 17 15. Plaintiffs fail to address this argument. Upon review of the complaint, the Court agrees with 18 Defendants that Plaintiffs allege no facts to support an equal protection claim. The Court 19 dismisses this claim with leave to amend. Plaintiffs should specify whether they are alleging 20 discrimination based on membership in an identifiable class or disparate treatment. Plaintiffs 21 should also include allegations about how Defendants actions were intentional. 22 viii. Privileges and Immunities Clause 23 The Privileges and Immunities Clause provides that “[t]he Citizens of each State shall be 24 entitled to all Privileges and Immunities of Citizens in the several States.” U.S. Const. art. IV, § 2, 25 cl. 1. This clause was “designed to insure to a citizen of State A who ventures into State B the 26 same privileges which the citizens of State B enjoy.” Toomer v. Witsell, 334 U.S. 385, 395 27 (1948). To be a citizen for purposes of this clause, a plaintiff must be a natural person. Paul v. 1 Underwriters Ass’n, 322 U.S. 533 (1944); see also Iowa Pork Producers Ass’n v. Bonta, No. 2 2:21-cv-09940-CAS (AFMX), 2022 WL 613736 (C.D. Cal. Feb. 28, 2022), aff’d, No. 22-55336, 3 2024 WL 3158532 (9th Cir. June 25, 2024) (“The Court notes that the Privileges and Immunities 4 Clause applies to natural persons only, and not legal entities.”). 5 Courts employ a two-step inquiry. First, they consider whether the activity in question is 6 “sufficiently basic to the livelihood of the nation” to fall within the purview of the Privileges and 7 Immunities clause. Reitz v. Kipper, 674 F. Supp. 2d 1194, 1201 (D. Nev. 2009) (quoting Supreme 8 Court of Va. v. Friedman, 487 U.S. 59, 64 (1988)). Second, they analyze whether the challenged 9 restriction is closely related to the advancement of a substantial state interest. Id. 10 Defendants argue that, as an initial matter, the LLC and Trust cannot assert a claim under 11 this clause because they are not natural persons. ECF No. 50 at 17. As to the individual Plaintiffs, 12 Defendants argue that they cannot allege Defendants treated them differently from out-of-state 13 citizens because the downtown master plan and municipal code apply equally to all businesses 14 and individuals. Id. Plaintiffs do not address this argument. 15 Here, the Court agrees with Defendants that the Privileges and Immunities claim brought 16 on behalf of the LLC and Trust are futile as they are not natural persons. However, the Court 17 cannot say that the individual Plaintiffs’ claim under the Privileges and Immunities clause is futile 18 because the complaint is devoid of specific facts supporting this claim. Thus, Plaintiffs’ claim is 19 dismissed with prejudice as to the LLC and Trust but with leave to amend as to the individual 20 Plaintiffs. Should Plaintiffs amend this claim, however, they must allege facts supporting how the 21 activity in question is sufficiently basic to the livelihood of the nation to fall within the purview of 22 the clause and whether the challenged restriction is closely related to the advancement of a 23 substantial state interest. 24 ix. Privileges or Immunities Clause 25 The Privileges or Immunities Clause provides that “[n]o State shall make or enforce any 26 law which shall abridge the privileges or immunities of citizens of the United States.” U.S. Const. 27 amend. 14. “Natural persons, and they alone, are entitled to the privileges and immunities which 1 Comm. for Indus. Org., 307 U.S. 496, 514 (1939); see also Lone Star Sec. & Video, Inc. v. City of 2 Los Angeles, 989 F. Supp. 2d 981, 993 (C.D. Cal. 2013), aff’d, 827 F.3d 1192 (9th Cir. 2016) 3 (“Lone Star is a corporation, not a natural person, so the Fourteenth Amendment’s privileges or 4 immunities clause affords no relief.”). The clause only secures a narrow class of rights—those 5 which “own their existence to the Federal government, its National character, its Constitution, or 6 its laws.” Merrifield v. Lockyer, 547 F.3d 978, 983 (9th Cir. 2008) (quoting Slaughter-House 7 Cases, 83 U.S. 36, 79 (1872)). This includes rights: 8 to come to the seat of government to assert any claim [a citizen] may have upon that government, to transact any business he may have with it, to seek its protection, to share 9 its offices, to engage in administering its functions ... [and to] become a citizen of any State of the Union by a bonafide residence therein, with the same rights as other citizens 10 of that State. 11 McDonald v. City of Chicago, Ill., 561 U.S. 742, 755 (2010) (quoting Slaughter-House Cases, 83 12 U.S. at 79–80 (1872)). 13 The right of every person to pursue their profession without unequal or discriminatory 14 restrictions is not included in those protected rights, to the objection of the dissent in the 15 Slaughter-House Cases. 83 U.S. at 96–97 (Field, J., dissenting). See McDonald, 561 U.S. at 756. 16 Property rights are also not protected under this clause. Courtney v. Danner, 801 F. App’x 558 17 (9th Cir. 2020) (holding that an intrastate ferry franchise is a property right that is not protected 18 by the privileges or immunities clause because it is state right); see also Merrifield v. Lockyer, 19 547 F.3d 978, 983 (9th Cir. 2008) (holding that state licensing requirement impeding state 20 resident from practicing particular profession within the state does not implicate the privileges or 21 immunities clause). 22 Defendants argue that the LLC and Trust cannot assert a claim under the Privileges or 23 Immunities clause because they are not natural persons. ECF No. 50 at 18. They further argue that 24 any interference with Plaintiffs renting out the motel to transient guests is not a protected right. 25 Id. Plaintiffs do not address this argument. Moreover, it is unclear whether Plaintiffs intended to 26 allege a claim under this clause. In their complaint, they identify “the Privileges and Immunities 27 Clause of Article IV, Section 2 and the Fourteenth Amendment of the United States 1 Immunities clause comes from Article IV, while the Privileges or Immunities clause comes from 2 the Fourteenth Amendment. 3 To the extent Plaintiffs are even alleging a claim under the Privileges or Immunities 4 clause, the Court dismisses their claim without prejudice because they have not alleged any 5 supporting facts. If they wish to pursue a claim under the Privileges or Immunities clause, 6 Plaintiffs should carefully review the above case law to determine whether they can allege facts 7 supporting this claim. 8 x. Contract Clause 9 Article I of the United States Constitution provides that “[n]o state shall . . . pass any . . . 10 Law impairing the Obligation of Contracts.” U.S. Const., Art. I, § 10, cl. 1. Thus, the contract 11 clause restricts state power to disrupt contractual arrangements. Ashley Sveen v. Kaye Melin, 584 12 U.S. 811, 818 (2018). But not all laws that affect pre-existing contracts violate the contracts 13 clause. Id. To determine whether such a law is unconstitutional, courts apply a two-part test. First, 14 courts consider whether the state law has “operated as a substantial impairment of a contractual 15 relationship.” Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 244 (1978). Second, they 16 consider “the extent to which the law undermines the contractual bargain, interferes with a party’s 17 reasonable expectations, and prevents the party from safeguarding or reinstating his rights.” 18 Ashley Sveen, 584 U.S. at 819. 19 Defendants argue that Plaintiffs fail to plead a claim under the contracts clause because 20 they do not identify a contract that was supposedly impaired. ECF No. 50 at 18–19. Plaintiffs do 21 not address this argument. 22 The Court dismisses this claim with leave to amend. Plaintiffs do not identify a contract 23 nor the law that allegedly substantially impaired the unspecified contract. Their allegations are 24 too vague to determine whether the claim is futile at this point. Should Plaintiffs amend this 25 claim, they must identify the contract and law at issue as well as allege facts supporting a 26 substantial impairment of the contractual relationship. 27 / / 1 xi. Commerce Clause 2 The Commerce Clause gives Congress the power to regulate commerce with foreign 3 nations and among the states. U.S. Const., Art. I, § 8, cl. 3. “[T]he Commerce Clause not only 4 vests Congress with the power to regulate interstate trade; the Clause also ‘contain[s] a further, 5 negative command,’ one effectively forbidding the enforcement of ‘certain state [economic 6 regulations] even when Congress has failed to legislate on the subject.’” Nat’l Pork Producers 7 Council v. Ross, 598 U.S. 356, 368 (2023) (quoting Oklahoma Tax Comm’n v. Jefferson Lines, 8 Inc., 514 U.S. 175 (1995)). This “negative command” is more commonly known as the Dormant 9 Commerce Clause. Id. 10 The Dormant Commerce Clause prohibits state laws “driven by . . . ‘economic 11 protectionism—that is, regulatory measures designed to benefit in-state economic interests by 12 burdening out-of-state competitors.’” Department of Revenue of Ky. v. Davis, 553 U.S. 328, 337– 13 338 (2008) (quoting New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 273–274 (1988)). The 14 Ninth Circuit evaluates dormant Commerce Clause claims under a two-step approach. Safari Club 15 In’'l v. Becerra, 702 F. App’x 607, 607 (9th Cir. 2017). First, courts consider whether the law 16 discriminates against or directly regulates interstate commerce. Id. (citing Pharm. Research & 17 Mfrs. of Am. v. Cty. of Alameda, 768 F.3d 1037, 1041, 1044 (9th Cir. 2014)). Second, courts 18 analyze whether the burden imposed on interstate commerce is “clearly excessive in relation to 19 the putative local benefits.” Id. (quoting Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970)). 20 Defendants argue that Plaintiffs fail to state a claim because they do not identify which 21 regulation they are challenging or whether the challenge is based on the Commerce Clause or 22 Dormant Commerce Clause. ECF No. 50 at 19–20. They further argue that if Plaintiffs’ claim is 23 based on the downtown master plan or Henderson Municipal Code, it is futile because the plan 24 and code do not regulate nor burden interstate commerce as they are confined to Henderson only. 25 Id. at 20. Plaintiffs do not address this argument. 26 The Court dismisses Plaintiffs’ claim with leave to amend. As Defendants point out, 27 Plaintiffs do not specify what state law supposedly violates the Commerce Clause, nor do they 1 state a claim. However, the Court cannot find that their claim is futile given the sparse facts 2 before it. Should Plaintiffs amend this claim, they must identify whether they are bringing a claim 3 under the Commerce Clause or Dormant Commerce Clause; facts specifying what state law they 4 believe violates the clause; and allege facts that would support finding the state law substantially 5 burdens interstate commerce. 6 D. Breach of Contract Claim 7 “To prevail on a claim for breach of contract, the plaintiff must establish (1) the existence 8 of a valid contract, (2) that the plaintiff performed, (3) that the defendant breached, and (4) that 9 the breach caused the plaintiff damages.” Iliescu, Tr. of John Iliescu, Jr. & Sonnia Iliescu 1992 10 Fam. Tr. v. Reg’l Transportation Comm’n of Washoe Cnty., 522 P.3d 453, 458 (Nev. App. 2022). 11 A valid contract requires: (1) an offer and acceptance, (2) meeting of the minds, and (3) 12 consideration. CF Staffing Sols., LLC v. Dist. Healthcare Servs., LLC, No. 2:24--02355-GMN- 13 EJY, 2025 WL 1279716, at *3 (D. Nev. May 2, 2025) (citing May v. Anderson, 119 P.3d 1254, 14 1257 (Nev. 2005)). A meeting of the minds exists when the parties have agreed upon the 15 contract’s essential terms. Certified Fire Prot. Inc. v. Precision Constr., 283 P.3d 250, 255 16 (2012). Which terms are essential “‘depends on the agreement and its context and also on the 17 subsequent conduct of the parties, including the dispute which arises and the remedy sought.’” Id. 18 (quoting Restatement (Second) of Contracts § 131 cmt. g (1981)). Contracts must be definite 19 enough to enable the court to ascertain what is required of the respective parties. Id. (citing 20 Richards v. Oliver, 328 P.2d 544, 552 (1958)). 21 Defendants argue that Plaintiffs fail to establish the existence of a valid contract because 22 they do not allege who the purported contract was between or whether there was a meeting of the 23 minds. ECF No. 50 at 22. Plaintiffs respond that “Defendants Beaton, Massy, Dwyer, and 24 Dichter, at various times, had advised Plaintiffs the required inspections would be performed once 25 the code violations were completed,” and Defendants breached the contract by not performing the 26 inspections. ECF No. 54 at 5–6. Plaintiffs further contend that they upheld their end of the 27 bargain by completing work on the code violations. Id. at 6. Defendants reply that the breach of 1 and Plaintiffs fail to identify any consideration for the contract because a preexisting duty is 2 generally not adequate consideration. ECF No. 58 at 11 (citing Cain v. Price, 415 P.3d 25, 28 3 (Nev. 2018)). 4 Plaintiffs do not allege sufficient facts to state a claim for breach of contract. In their 5 complaint, Plaintiffs allege that they “complied with the terms of the oral agreement to make the 6 required and necessary repairs to the motel.” ECF No. 41 ¶ 69. They further allege that 7 Defendants breached the oral contract “when [they] failed to inspect the structural repairs prior to 8 the 180-day deadline, and failed to approve the required repairs after Defendants had been 9 informed by Defendants that all the violations had been corrected and Plaintiffs could resume 10 operations.” Id. ¶ 71. But there are no facts regarding: whom the contract was between; a valid 11 offer, acceptance, and consideration; and the contract’s essential terms. The Court cannot 12 determine whether a valid contract exists or what was required of Plaintiffs based on the facts 13 alleged in the complaint. Thus, the Court cannot say that the claim is futile at this time. Plaintiffs 14 could allege additional facts establishing offer, acceptance, consideration, and the terms of the 15 contract. Accordingly, the Court dismisses the breach of contract claim with leave to amend. 16 E. Fraud Claim 17 To state an intentional misrepresentation claim under Nevada law, plaintiffs must 18 establish three factors: (1) a false representation that is made with either knowledge or belief that 19 it is false or without a sufficient foundation, (2) an intent to induce another’s reliance, and (3) 20 damages that result from this reliance. Nelson v. Heer, 163 P.3d 420, 426 (2007). The alleged 21 damages must be proximately caused by reliance on the misrepresentation or omission. Id. 22 “Proximate cause limits liability to foreseeable consequences that are reasonably connected to 23 both the defendant’s misrepresentation or omission and the harm that the misrepresentation or 24 omission created.” Id. 25 When alleging fraud claims, Federal Rule of Civil Procedure 9(b) requires a plaintiff to 26 “state with particularity the circumstances constituting fraud or mistake, including the who, what, 27 when, where, and how of the misconduct charged.” Ebeid ex rel. U.S. v. Lungwitz, 616 F.3d 993, 1 misleading about the statement and why. Id. (quotation marks omitted). Put differently, the 2 plaintiff “must provide enough detail to give [the defendants] notice of the particular misconduct 3 which is alleged to constitute the fraud charged so that [they] can defend against the charge and 4 not just deny that [they have] done anything wrong.” Id. at 999 (quotation marks omitted). “A 5 motion to dismiss a complaint or claim ‘grounded in fraud’ under Rule 9(b) for failure to plead 6 with particularity is the functional equivalent of a motion to dismiss under Rule 12(b)(6) for 7 failure to state a claim.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003). 8 “[D]ismissals under the two rules are [thus] treated in the same manner.” Id. 9 The Ninth Circuit has recognized an exception to Rule 9(b)’s particularized pleading 10 requirement when facts constituting the circumstances of the alleged fraud are within the 11 defendant’s exclusive control. Neubronner v. Milken, 6 F.3d 666, 670, 672 (9th Cir. 1993). “In 12 such situations, plaintiffs can not be expected to have personal knowledge of the relevant facts.” 13 Id. at 672. However, a plaintiff “cannot evade Rule 9(b)’s requirements simply by stating it lacks 14 specific knowledge.” Motogolf.com, LLC v. Top Shelf Golf, LLC, 528 F. Supp. 3d 1168, 1177 (D. 15 Nev. 2021). 16 Defendants argue that Plaintiffs fail to meet Rule 9’s heightened pleading standard 17 because they do not allege which Defendant(s) made the statement, when the statement was 18 made, or how the statement was false or misleading. ECF No. 50 at 20–21. Plaintiffs oppose and 19 argue that the Court should apply a relaxed pleading standard for fraud under federal and state 20 law because Defendants control specific facts regarding the fraud. ECF No. 54 at 4–5. 21 Specifically, Plaintiffs state “it is necessary to obtain all inter-office memos and emails between 22 Defendants relating to the numerous alleged code violations served on Plaintiffs, and why the 23 promised required inspections were not done.” Id. at 5. Defendants contend that this argument 24 amounts to a concession that Plaintiffs have not met the heightened pleading standard. ECF No. 25 58 at 10–11. They argue that courts cannot allow expensive discovery merely because plaintiffs 26 may be able to allege fraud. See id. at 10 (citing Oaktree Cap. Mgmt., L.P. v. KPMG, 963 F. 27 Supp. 2d 1064, 1089 (D. Nev. 2013)). Finally, Defendants contend that the fraud claim is futile 1 because Plaintiffs have not and cannot plead that Defendants made the alleged assurances to 2 inspect the motel with the intent to induce their reliance. Id. at 11. 3 As an initial matter, the Court declines to find an exception to Rule 9’s heightened 4 pleading standard because Plaintiffs fail to show that Defendants are in exclusive control of the 5 facts constituting the alleged fraud. In Motogolf, a case Plaintiffs cite, a court in this district 6 considered whether the plaintiff had satisfied Rule 9’s pleading requirement as to its claim for 7 intentional interference with contractual relations. Motogolf.com, LLC v. Top Shelf Golf, LLC, 8 528 F. Supp. 3d 1168, 1177 (D. Nev. 2021). The plaintiff alleged that the defendants had caused 9 at least one vendor to not allow the plaintiff to sell certain premium merchandise. Id. at 1173. In 10 response to the defendants’ motion to dismiss, the plaintiff argued that it lacked “specific 11 knowledge of dates, times, speakers, and the precise contents of the statements.” Id. at 1177. 12 The court rejected this argument. It reasoned that the plaintiff had not shown that the 13 defendants had exclusive control of the alleged fraudulent information given “that the vendors 14 were part of these conversations and [the plaintiff] apparently knows of at least one vendor that 15 terminated its relationship with [the plaintiff].” Here, Plaintiffs have even more information than 16 the party in Motogolf. Plaintiffs’ own allegations state that Arpit was in constant communications 17 with Defendants, who assured him that the required inspection would occur soon. ECF No. 41 18 ¶ 31. Plaintiffs state that they are in possession of “[a]ll the documents relating to the alleged code 19 violations of the Motel for the past several years, [which] contain the dates issued, the deadlines 20 to correct violations, the person who issued the violation and the person who was to inspect the 21 work done . . . .” ECF No. 54 at 4. Even if Plaintiffs are unsure whether these documents are 22 complete, Defendants are not in exclusive control of the facts regarding the alleged fraud. The 23 fact that Defendants may have some relevant information related to the fraud claim is not the 24 same as Defendants having exclusive control over the relevant facts. 25 Applying the heightened standard under Rule 9(b), the Court dismisses Plaintiffs’ fraud 26 claim with leave to amend. Plaintiffs allege that after the motel was shut down, Defendants 27 assured Plaintiffs that the required inspection would occur soon, and Plaintiffs completed the 1 No. 54 at 3; ECF No. 41 ¶¶ 30–31. But these allegations do not state specific facts regarding 2 which Defendant(s) made the statement, when/where the statement was made, and why the 3 statement is false or misleading. Given the lack of allegations before the Court, it cannot say that 4 Plaintiffs’ claim is futile. Should Plaintiffs amend this claim, they must allege the who, what, 5 when, where, and how of the claim. This includes what is false or misleading about the statement 6 and why. They must also take into account the elements of an intentional misrepresentation claim, 7 which include reliance, causation, and damages. 8 i. Punitive Damages 9 Under Nevada Revised Statute 41.035, punitive damages cannot be awarded in actions 10 sounding in tort against officers or employees of any political subdivision or against a political 11 subdivision for acts or omissions arising out of the scope of public duties. Clements v. Airport 12 Auth. of Washoe Cnty., 69 F.3d 321, 336 (9th Cir. 1995); see also Bryan v. Las Vegas Metro. 13 Police Dep’t, 349 F. App’x 132, 135 (9th Cir. 2009) (“[NRS] § 41.035(1) bars punitive damages 14 arising out of the state claims for both the individual officers and for the METRO police.”). 15 Plaintiffs request punitive damages as to their fraud claim only. ECF No. 41 at 14. Defendants 16 argue that NRS 41.035 bars Plaintiffs from recovering punitive damages. Plaintiffs do not address 17 this argument. Accordingly, the Court dismisses Plaintiffs’ request for punitive damages (as to 18 their fraud claim) with prejudice because Defendants consist of a political subdivision and its 19 officers or employees. 20 F. Motion for More Definite Statement 21 “A party may move for a more definite statement of a pleading . . . which is so vague or 22 ambiguous that the party cannot reasonably prepare a response.” Fed. R. Civ. P. 12(e). “‘Rule 23 12(e) motions are disfavored and rarely granted.’” Underwood v. O’Reilly Auto Parts, Inc., 671 F. 24 Supp. 3d 1180, 1187 (D. Nev. 2023) (quoting Buckley v. Cnty. of San Mateo, No. 14-cv-05488, 25 2015 WL 5769616, at *5 (N.D. Cal. Oct. 2, 2015)). Still, courts have discretion in deciding these 26 types of motions and granting them is generally appropriate when the responding party cannot 27 ascertain the substance of the asserted claim. Id. at 1186–87. “If the court grants a party’s motion 1 || for more definite statement, the court may allow leave to amend the pleading to make them 2 || consistent with the rules of pleading outlined in Fed. R. Civ. P. 8.” /d. at 1187. 3 Defendants move for a more definite statement in the alternative. ECF No. 50 at 23-25. 4 || They state that if the Court permits amendment, it should order a more definite statement to plead 5 || the parties and the claims. Plaintiffs oppose. ECF No. 55 at 10-11. The Court has essentially done 6 || so throughout this order by giving Plaintiffs specific instructions should they choose to amend. 7 || Asaresult, this request is denied as moot. 8 Il. CONCLUSION 9 Plaintiffs are warned to pay close attention to the instructions set forth in this order 10 || regarding any claim for which leave to amend has been granted. The Court has issued a 28-page 11 || order providing detailed, claim-by-claim guidance on how to properly plead their allegations. 12 || Plaintiffs are therefore expected to adhere strictly to these directives and ensure that any amended 13 || complaint fully complies with the Court’s instructions. Further leave to amend based on pleading 14 || deficiencies will likely not be granted given both the level of detail provided in this order and the 15 || familiarity Plaintiffs should already possess with filing complaints of this nature. 16 IT IS ORDERED that Defendants’ motion to dismiss (ECF No. 50) is GRANTED with 17 || leave to amend certain claims as set forth above. 18 IT IS FURTHER ORDERED that the second-amended complaint is due no later than 19 || December 29, 2025. The Court gives Plaintiffs 45 days to amend to account for the fact that they 20 || need to locate new local counsel. It is not inclined to grant future continuances of the second- 21 || amended complaint deadline. 22 23 DATED: November 13, 2025 24 25 Kx pn la □□□ BRENDA WEKSLER 26 UNITED STATES MAGISTRATE JUDGE 27 28