Gallagher v. City and County of San Francisco

• Court: District Court, N.D. California
• Decided: February 9, 2024
• Docket: 3:23-cv-03579
• Status: Unknown

Opinion

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8 9 PATRICK GALLAGHER, Case No. 23-cv-03579-SI

10 Plaintiff, ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ 11 v. MOTION TO DISMISS THE SECOND AMENDED COMPL.AINT; 12 CITY AND COUNTY OF SAN SCHEDULING INITIAL CASE FRANCISCO, et al., MANAGEMENT CONFERENCE FOR 13 MARCH 1, 2024 AT 2:30 P.M. Defendants. 14 Re: Dkt. No. 29

15 16 On February 9, 2024, the Court held a hearing on defendants’ motion to dismiss the second 17 amended complaint. For the reasons set forth below, the motion is GRANTED as to the state law 18 claims, which are dismissed without prejudice, and DENIED as to the fourth cause of action under 19 42 U.S.C. § 1983. The Court schedules an initial case management conference for March 1, 2024 20 at 2:30 p.m. to be held via zoom. 21 22 BACKGROUND 23 I. Factual Background 24 Plaintiff Patrick Gallagher is a “veteran in the construction industry” with over 45 years of 25 experience. Second Amended Compl. (“SAC”) ¶ 1. Gallagher brings this case “individually and 26 as trustee for the Madison Trust FBO Patrick Gallagher.” Id. ¶ 9. In 2018, Gallagher, through his 27 trust, purchased a single family home located at 200 Naples Street in San Francisco with the 1 Gallagher alleges that once he began renovations, he became a victim of a “pay to play fraud” 2 perpetrated by San Francisco City building inspectors, planners, and the City, and that “after he 3 refused to participate” in the scheme and spoke to the FBI, the City and its employees retaliated 4 against him by “issuing and refusing to release frivolous code enforcement liens, issuing and 5 refusing to release notices of violation, issuing and refusing to release abatement orders, revoking 6 permits, and revoking a certificate of completion.” Id. ¶ 4. Gallagher claims that these retaliatory 7 actions have caused the property to fall out of escrow three times and that the City’s actions have 8 amounted to an “unjustified taking.” Id. Gallagher has sued the City and County of San Francisco, 9 (“the City”), four current and former building inspectors with the San Francisco Department of 10 Building Inspection (“SFDBI”) (Bernard Curran, Joe Duffy, Kevin Birmingham, and Mauricio 11 Hernandez), two employees of the San Francisco Planning Department (William Hughen and 12 Natalia Kwaitkowska), and a structural engineer who had been a former City employee (Rodrigo 13 Santos). 14 Gallagher alleges that Building Inspector Bernard Curran told him that he needed to obtain 15 a permit from the City in order to begin renovations, and that he needed to hire structural engineer 16 Rodrigo Santos in order to obtain the permit. Id. ¶ 31. Even though Gallagher believed a structural 17 engineer was not required for the renovations, Gallagher hired Santos. Id. Gallagher alleges that 18 Santos continually delayed the project, and that after Gallagher had paid Santos $13,000 “for work 19 that was essentially useless,” he fired Santos and hired a different structural engineer who completed 20 the work in two weeks and at a fraction of the cost charged by Santos. Id. ¶ 32. Gallagher received 21 the permit from the City in June 2019, and he began the main renovation process. Id. ¶ 33. In 22 August 2020, the project was complete and Curran issued Gallagher a signed certificate of 23 completion. Id. ¶ 34. Around May 2021, Gallagher entered into an agreement to sell the property 24 and it went into escrow. Id. ¶ 35. 25 At about the same time, the FBI contacted Gallagher about an investigation the agency was 26 conducting into Curran and Santos about an illegal “pay to play” scheme. Id. ¶¶ 36-37.1 Curran 27 1 was forced to resign from SFDBI as a result of the investigation. Id. ¶ 37. Building Inspectors 2 Duffy, Birmingham, and Hernandez, and City Planners Hughen and Kwaitkowska, were “close 3 associates” of Curran and Santos, and they “became aware and/or were under the belief” that 4 Gallagher had spoken to the FBI about Curran and Santos. Id. ¶ 38. Gallagher claims that SFDBI 5 began retaliating against him when, approximately four days before escrow was scheduled to close 6 on the property, SFDBI issued a notice of violation for an expired permit and an illegal downstairs 7 unit. Id. ¶ 39. SFDBI “falsely claimed that the certificate of completion that Curran signed never 8 got filed correctly and was now void” and that the entire property would need to be reinspected and 9 approved. Id. Escrow did not close and the sale of the property fell through. Id. 10 Building Inspectors Birmingham and Hernandez reinspected the property and issued a notice 11 of violation about windows on the second floor that had been in existence since the house was built 12 and that “had already been approved twice.” Id. ¶ 41. They also told Gallagher that he needed to 13 submit an application for an additional dwelling unit and revise the plans for the property to reflect 14 more accurately how the stairs were built. Id. During this inspection, Hernandez “sneered at 15 Plaintiff, telling him, ‘we know who you’ve been talking to.’” Id. Gallagher “had no choice but to 16 comply with SFDBI’s demands related to these unfound[ed] violations and submitted his 17 applications and revised plans accordingly.” Id. ¶ 42. Without cause, Birmingham then rejected 18 the application related to the second floor windows, now demanding that the windows needed to be 19 closed off completely. Id. ¶ 43. 20 Gallagher contacted the San Francisco Board of Supervisors for help, and the Board 21 facilitated a meeting between Gallagher and SFDBI. Id. ¶ 44. At that meeting, Gallagher “presented 22 evidence showing that the subject property had already received a certificate of completion and that 23 the recent demands of SFDBI were unreasonable and excessive.” Id. ¶ 45. “SFDBI dismissed 24 Plaintiff’s concerns and ignored the validity of his claims, refusing to approve his plans or his 25 applications.” Id. During the meeting, Duffy also “expressed that he had no doubt that Plaintiff had 26

27 18 U.S.C. § 666 and Santos pled guilty to honest services wire fraud in violation of 18 U.S.C. 1 spoken to the FBI concerning his dealings with Curran and Santos.” Id. Gallagher had “no choice 2 but to comply with SFDBI’s demands” and he closed off the second floor windows, spending 3 $30,000 for the additional work. Id. ¶ 48. 4 In October 2021, approval of Gallagher’s application for an additional dwelling unit was 5 transferred to Senior Planner Hughen. Id. ¶ 49. Hughen, and then Principal Planner Kwaitkowska, 6 “egregiously delayed the application for months on end, forcing Plaintiff to jump over more arbitrary 7 hurdles.” Id. While Gallagher’s application for an additional dwelling unit was pending, Hughen 8 “placed yet another baseless roadblock” in front of Gallagher: a citation that the driveway on the 9 property was out of code and could not be used for off-street parking. Id. ¶ 50. Gallagher claims 10 that the driveway had been in existence since the property was built and “had already been 11 approved,” and that not being able to use the driveway for parking “would place a significant 12 limitation on the property and greatly affect its overall value.” Id. Gallagher contacted the City 13 Attorney’s Office and provided Hughen with the applicable laws and ordinances showing that the 14 driveway was code compliant. Id. Hughen “dismissed Plaintiff’s pleas and demanded that he now 15 apply for a variance.” Id. Gallagher had “no choice” but to apply for a variance. His applications 16 for the variance and the additional dwelling unit were approved in May 2022, and Gallagher 17 received the necessary permits. Id. ¶ 51. 18 Around this time, Gallagher entered into another agreement to sell the property and entered 19 into escrow. Id. ¶ 52. Gallagher had not received a new certificate of completion, which negatively 20 affected the sale price, but Gallagher needed to sell the property and was “willing to do so at a 21 discount.” Id. 22 In July of 2022, while the property was still in escrow, SFDBI informed Gallagher that his 23 permits for the additional dwelling unit and the driveway were being revoked. Id. ¶ 53. SFDBI 24 “falsely claimed that the City’s Planning Department had mistakenly provided him these permits 25 and that he needed approval from SFDBI as it was within their purview.” Id. Gallagher was told 26 he needed to submit new applications and new revised plans, and that he needed to go through the 27 entire process again. Id. The sale of the property fell through a second time. Id. 1 process,” the City issued new permits for the additional dwelling unit and the driveway. Id. ¶ 54. 2 Additional inspections were required in order to obtain a final certificate of completion, and 3 “[a]lthough Plaintiff possesses valid permits, inspections have led to new, unfound, and vindictive 4 violations concerning, among other things, the legality of the windows located on the first floor of 5 the property.” Id. ¶ 55. 6 In February 2023, Gallagher entered into another agreement to sell the property, again at a 7 discount because he lacked a certificate of completion. Id. ¶ 56. “Due to the numerous abatements 8 and notices of violation that remain on the property, the sale fell through in or around August 2023.” 9 Id. Gallagher claims that the City has intentionally and vindictively drawn out the renovation 10 process, and that as a result, he has lost a significant amount of money in lost profits, lost income, 11 lost interest, expenditures for unnecessary repairs, and increased taxes, and he has suffered severe 12 emotional distress, and irreparable harm to his reputation. Id. ¶ 57. 13 The second amended complaint alleges seven causes of action against all defendants, except 14 the second cause of action which is alleged only against the City: (1) slander of title; (2) inverse 15 condemnation; (3) intentional interference with prospective economic relations; (4) violation of civil 16 rights, 42 U.S.C. § 1983; (5) intentional infliction of emotional distress; (6) negligence; and (7) 17 declaratory relief. Gallagher seeks various forms of damages, injunctive and declaratory relief, and 18 attorneys’ fees. 19 20 II. Procedural Background 21 This case was originally filed in San Francisco Superior Court in March 2023. On July 17, 22 2023, the City removed this case from state court on the basis of federal question jurisdiction, 23 namely the addition of the fourth cause of action in the first amended complaint alleging a cause of 24 action under 42 U.S.C. § 1983 for violation of Gallagher’s First and Fourteenth Amendment rights. 25 On July 26, 2023, the City filed a motion to dismiss the first amended complaint. The Court 26 granted that motion, finding that the Monell allegations were insufficient, and granted leave to 27 amend. On November 9, 2023, Gallagher filed the SAC, adding allegations discussed infra about 1 another retaliation lawsuit brought against the City and Hernandez. The City and the individual 2 defendants who have been served (Duffy, Birmingham, Hernandez, Hughen and Kwaitkowska) 3 have moved to dismiss the SAC.2 4 5 LEGAL STANDARD 6 Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if 7 it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to 8 dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” 9 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This “facial plausibility” standard requires 10 the plaintiff to allege facts that add up to “more than a sheer possibility that a defendant has acted 11 unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While courts do not require “heightened 12 fact pleading of specifics,” a plaintiff must allege facts sufficient to “raise a right to relief above the 13 speculative level.” Twombly, 550 U.S. at 555, 570. 14 In deciding whether the plaintiff has stated a claim upon which relief can be granted, the 15 court must assume that the plaintiff’s allegations are true and must draw all reasonable inferences 16 in the plaintiff’s favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). 17 However, the court is not required to accept as true “allegations that are merely conclusory, 18 unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 19 1049, 1055 (9th Cir. 2008). 20 If the Court dismisses the complaint, it must then decide whether to grant leave to amend. 21 The Ninth Circuit has “repeatedly held that a district court should grant leave to amend even if no 22 request to amend the pleading was made, unless it determines that the pleading could not possibly 23 be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) 24 (citations and internal quotation marks omitted). 25 26

27 2 As of the filing date of this order, neither Curran nor Santos have been served. At the 1 DISCUSSION 2 III. 42 U.S.C. 1983 Retaliation 3 A. Monell Claim against the City 4 Local governments are “persons” subject to liability under 42 U.S.C. § 1983 where official 5 policy or custom causes a constitutional tort, see Monell v. Dep’t of Social Servs., 436 U.S. 658, 690 6 (1978); however, a city or county may not be held vicariously liable for the unconstitutional acts of 7 its employees under the theory of respondeat superior. See Board of Cty. Comm’rs. of Bryan Cty. 8 v. Brown, 520 U.S. 397, 403 (1997); Monell, 436 U.S. at 691; Fuller v. City of Oakland, 47 F.3d 9 1522, 1534 (9th Cir. 1995). To impose municipal liability under § 1983 for a violation of 10 constitutional rights resulting from governmental inaction or omission, a plaintiff must show: 11 “(1) that he possessed a constitutional right of which he or she was deprived; (2) that the 12 municipality had a policy; (3) that this policy amounts to deliberate indifference to the plaintiff's 13 constitutional rights; and (4) that the policy is the moving force behind the constitutional violation.” 14 Oviatt By and Through Waugh v. Pearce, 954 F.2d 1470, 1474 (9th Cir. 1992) (quoting City of 15 Canton v. Harris, 489 U.S. 378, 389 (1989) (internal quotation marks omitted). To establish an 16 official policy that would give rise to Monell liability, a plaintiff must allege facts to support one of 17 the following to survive dismissal of its claim: (1) an unconstitutional custom or policy behind the 18 violation of rights; (2) a deliberately indifferent omission, such as a failure to train or failure to have 19 a needed policy; or (3) a final policy maker’s involvement in, or ratification of, the conduct 20 underlying the violation of rights. Clouthier v. County of Contra Costa, 591 F.3d 1232, 1249-50 21 (9th Cir. 2010) (synthesizing authorities), overruled on other grounds by Castro v. Cty. of Los 22 Angeles, 833 F.3d 1060 (9th Cir. 2016). 23 Gallagher seeks to hold the City liable under a custom and policy theory as well as Duffy’s 24 involvement as a final policymaker and ratification. On custom and policy, the SAC alleges, 25 The City has a pattern, custom, and/or practice of retaliatory conduct against those who speak out against wrongful and illegal actions. Namely, much like the facts in 26 this case, a City Planning Commissioner, who also owned an investment property in San Francisco, recently filed suit alleging that he was retaliated against by SFDBI 27 employees after making complaints and speaking out against its pay-to-play scheme and corrupt practices. The Commissioner alleged that after he called on the City property with erroneous complaints, unnecessary inspections, unwarranted notices 1 of violation, and revoked nine (9) permits, all related to completed work that had already been approved, permitted, and inspected by SFDBI. The retaliation caused 2 the value of the Commissioner’s property to depreciate and caused other significant damages. The Commissioner named Defendant Mauricio Hernandez (“Hernandez”), 3 a SFDBI Building Inspector, as a defendant in his case, alleging that he was one of the employees who retaliated against him. The Commissioner settled his case against 4 the City for $1.8 Million dollars. 5 SAC ¶ 5. Gallagher also alleges that Duffy, as SFDBI’s Deputy Director, was in charge of and had 6 complete oversight over SFDBI, that he was a final policymaker, and that “[a]ll of the wrongful 7 conduct complained of herein including, without limitation, issuing and refusing to release frivolous 8 code enforcement liens, issuing and refusing to release notices of violation, issuing and refusing to 9 release abatement orders, revoking permits, and revoking a valid certificate of completion, was at 10 the behest and/or endorsement of Duffy.” Id. ¶ 46; see also id. ¶ 47 (listing Duffy’s job duties and 11 responsibilities). 12 The City contends that these allegations are insufficient to state a Monell claim. Considering 13 these allegations along with the other allegations of the SAC, the Court finds that Gallagher has 14 alleged enough to state a claim against the City. While it is correct that “isolated” incidents of 15 unconstitutional conduct do not constitute a municipal policy and custom, the additional detail 16 regarding the other recent retaliation lawsuit, combined with the allegations of Gallagher’s own 17 experiences with SFDBI, allege a pattern of numerous unnecessary inspections and unwarranted 18 notices of violations, and the revocation of many permits related to completed work that had been 19 previously approved, all related to alleged retaliation after the property owner complained about 20 corruption at SFDBI. 21 In addition, the Court finds that the new allegations about Duffy’s role and his job 22 responsibilities, as well as Duffy’s personal involvement in the meeting with Gallagher and the 23 Board of Supervisors, are sufficient to proceed on the theory that Duffy is a final policy maker who 24 was involved in and/or ratified unconstitutional conduct. The City argues that the SAC fails to 25 allege that Duffy had knowledge of the unconstitutional conduct and that he approved it. However, 26 the SAC alleges that after the retaliation began and Hernandez and Birmingham revoked permits 27 and required additional work, Gallagher met with Duffy and “presented evidence showing that the 1 SFDBI were unreasonable and excessive.” SAC ¶ 45. Gallagher alleges that SFDBI (presumably 2 Duffy) dismissed his concerns and that Duffy “expressed that he had no doubt that Plaintiff had 3 spoken to the FBI concerning his dealings with Curran and Santos.” Id. These allegations are 4 sufficient, as a pleading matter, to show that Duffy was involved in and/or ratified unconstitutional 5 conduct. 6 The City also argues that the allegations about Hughen and Kwiatkowska cannot be 7 considered for the Monell claim because they are (or were) Planning Department employees, not 8 Building Inspectors. The SAC suggests that there was some degree of coordination between SFDBI 9 and the Planning Department, with the transfer of Gallagher’s application for an additional dwelling 10 unit from SFBI and the Planning Department in October 2021, and the review by both departments 11 of Gallagher’s application. SAC ¶¶ 49-51, 53-54. Whether Hughen and Kwiatkowska’s allegedly 12 retaliatory acts are in fact part of a pattern or practice of retaliation at the City is a factual matter that 13 will be resolved on a full factual record. 14 15 B. Individual Defendants 16 To bring a claim for First Amendment retaliation under § 1983, a plaintiff must allege: (1) 17 they engaged in constitutionally protected activity; (2) as a result, they were subjected to adverse 18 action by defendants that would chill a person of ordinary firmness from continuing to engage in 19 the protected activity; and (3) there was a substantial causal relationship between the constitutionally 20 protected activity and the adverse action. Blair v. Bethel Sch. Dist., 608 F.3d 540, 543 (9th Cir. 21 2010). 22 Defendants contend that the SAC fails to state a claim against any of the individual 23 defendants. Defendants argue that Gallagher has failed to allege causation, and that it is not enough 24 to show retaliatory motive and injury, but that he must show the injury would not have happened 25 without the retaliation. Defendants rely on Nieves v. Bartlett, in which the Supreme Court held in 26 the context of a First Amendment retaliation claim involving an arrest, that “[t]he plaintiff pressing 27 a retaliatory arrest claim must plead and prove the absence of probable cause for the arrest.” Nieves 1 speaks to the objective reasonableness of an arrest” and that “its absence will . . . generally provide 2 weighty evidence that the officer’s animus caused the arrest, whereas the presence of probable cause 3 will suggest the opposite.” Id. The Court instructed that “when reviewing an arrest, we ask ‘whether 4 the circumstances, viewed objectively, justify [the challenged] action,’ and if so, conclude ‘that 5 action was reasonable whatever the subjective intent motivating the relevant officials.’” Id. at 1725 6 (quoting Ashcroft v. al-Kidd, 563 U.S. 731, 736 (2011) (emphasis in original)). 7 The Court also recognized a “narrow” exception to this rule: “Although probable cause 8 should generally defeat a retaliatory arrest claim, a narrow qualification is warranted for 9 circumstances where officers have probable cause to make arrests, but typically exercise their 10 discretion not to do so.” Id. at 1727. “[T]he no-probable cause requirement should not apply when 11 a plaintiff presents objective evidence that he was arrested when otherwise similarly situated 12 individuals not engaged in the same sort of protected speech had not been.” Id. The Court provided 13 the example of jaywalking, which “is endemic but rarely results in arrest.” Id. “If an individual 14 who has been vocally complaining about police conduct is arrested for jaywalking at such an 15 intersection, it would seem insufficiently protective of First Amendment rights to dismiss the 16 individual’s retaliatory arrest claim on the ground that there was undoubted probable cause for the 17 arrest.” Id.; see also Henneberry v. City of Newark, Case No. 13-cv-05238-TSH, 2019 WL 18 4194275, at *7 (N.D. Cal. Sept. 4, 2019) (holding Nieves exception could apply where the plaintiff 19 actively criticized city officials for years and was arrested for trespassing at private function 20 involving the city, where there was no evidence the plaintiff was loud, confrontational or abusive 21 and the plaintiff submitted evidence that police rarely arrest individuals for trespassing). 22 Here, Gallagher alleges that he received the necessary permits and received a certificate of 23 completion for the renovations, but that after he spoke to the FBI about corruption at SFDBI – a fact 24 of which the individual defendants were aware – the individual defendants began retaliating against 25 him by revoking the certificate of completion, issuing notices of violation and requiring further 26 work. The SAC also alleges that the permit denials and notices of violation and abatement were 27 without cause. The Court finds that these allegations of causation are sufficient as a pleading matter, IV. State Law Claims 1 The SAC alleges the following state law causes of action: (1) slander of title; (2) inverse 2 condemnation; (3) intentional interference with prospective economic relations;3 (5) intentional 3 infliction of emotional distress; (6) negligence; and (7) declaratory relief. Defendants contend that 4 the state law claims are subject to dismissal on numerous independent grounds. 5 Defendants argue that because “the permits and notices of violation are still pending with 6 SFDBI and Planning,” Gallagher’s state law claims are not ripe. Relatedly, defendants argue that 7 Gallagher is required to pursue his administrative remedies to challenge the notices of abatement 8 and violations and permit issues by seeking administrative review of each decision (or conditions 9 placed on them) to the San Francisco Board of Appeals. See S.F. Charter § 4.106 (general 10 jurisdiction of the Board of Appeals); S.F. Bus. & Tax Regs. Code Article 1, § 8(e)(2) (appealing 11 decisions of Department of Building Inspection); S.F. Building Code § 105A2 (appealing order of 12 abatement to Abatement Appeals Board). Defendants assert that once Gallagher receives a final 13 administrative order, the proper method for judicial review is by seeking a writ of mandate pursuant 14 to California Code of Civil Procedure § 1094.5(a) (“Review of administrative orders or decisions”). 15 The Court agrees with defendants that to the extent Gallagher seeks relief regarding the City 16 “issuing and refusing to release frivolous code enforcement liens, issuing and refusing to release 17 notices of violation, issuing and refusing to release abatement orders, revoking permits, and 18 revoking a certificate of completion,” SAC ¶ 4, he is required to seek administrative review and then 19 a writ of mandate pursuant to California Code of Civil Procedure § 1094.5. Courts have held that 20 San Francisco’s municipal codes vest administrative agencies with broad discretion to decide 21 whether and on what conditions an applicant will be granted a permit, and that applicants must 22 pursue administrative remedies prior to seeking judicial review of permit denials and related code 23 enforcement decisions. See, e.g., Martin v. City & Cnty. of San Francisco, 135 Cal. App. 4th 392, 24 400 (2005) (“It would do violence to the language and history of section 264 for a court to usurp the 25 26

27 3 The fourth cause of action is the § 1983 retaliation claim. 1 City’s discretion by concluding in advance of administrative review that, as a matter of law, a 2 particular permit application will not have an adverse effect on the public health, safety or general 3 welfare. Absent the exercise of section 26 administrative discretion, the issue of the limits of the 4 City’s section 26 powers over Martin’s project is not ripe for judicial resolution.”); see also 5 Guinnane v. San Francisco City Planning Com., 209 Cal. App. 3d 732, 735, 736-40 (1989) 6 (discussing authority of City administrative tribunals and affirming denial of administrative 7 mandamus action and noting earlier procedural history in which the court had held the plaintiff’s 8 inverse condemnation claim “was premature . . . [and that] the appropriate remedy for the denial of 9 the requested building permit was an administrative mandamus action.”). 10 Gallagher argues that his state law claims are premised on “multiple allegations” including 11 “multiple instances of fraud; threats; harassment; retaliation; wrongful conduct; false claims; 12 intentional delays; the discharge of and refusal to release numerous unfound, frivolous, and 13 vindictive notices of violation, abatement orders, and enforcement liens; revocation of valid permits; 14 and, notably, the revocation of a valid certificate of completion.” Opp’n at 14. However, Gallagher 15 does not allege in the SAC or state in his opposition any facts about alleged fraud, threats, 16 harassment, retaliation, wrongful conduct, false claims or intentional delays aside from the permit 17 denials, abatement orders, etc., and Gallagher concedes that his state law claims are premised, at 18 19 (a) Subject to subsection (b), in the granting or denying of any permit, or the revoking or the refusing to revoke any permit, the granting or revoking power may 20 take into consideration the effect of the proposed business or calling upon surrounding property and upon its residents, and inhabitants thereof; and in granting 21 or denying said permit, or revoking or refusing to revoke a permit, may exercise its sound discretion as to whether said permit should be granted, transferred, denied, or 22 revoked. 23 (b) In the granting or denying of any permit, or the revoking or the refusing to revoke any permit with respect to a “dwelling” in which “protected class members” 24 are likely to reside (each as defined in Administrative Code Chapter 87), the granting or revoking power shall comply with the requirements of San Francisco 25 Administrative Code Chapter 87 which requires, among other things, that the granting or revoking power not base any decision regarding the development of 26 “dwellings” in which “protected class” members are likely to reside on information which may be discriminatory to any member of a “protected class” (As all such terms 27 are defined in San Francisco Administrative Code Chapter 87). 1 least in large part, on the contention that the various permit denials, abatement orders etc. were 2 erroneous. 3 Gallagher also argues that he sought administrative review by requesting assistance from the 4 Board of Supervisors, who then facilitated a meeting between Gallagher and SFDBI, and that the 5 results of that meeting demonstrate that any further administrative review would be futile. Gallagher 6 does not cite any authority for the proposition that seeking assistance from the Board of Supervisors 7 satisfies the administrative review requirement, and to the contrary, the City’s municipal code 8 explicitly lays out the process for administrative review to challenge decisions by SFDBI and the 9 Planning Department. 10 Gallagher also has not demonstrated that administrative review would be futile. “The futility 11 exception to the ripeness doctrine relieves a developer from submitting ‘multiple applications when 12 the manner in which the first application was rejected makes it clear that no project will be 13 approved.’” Milagra Ridge Partners, Ltd. v. City of Pacifica, 62 Cal. App. 4th 108, 120 (1998) 14 (quoting Southern Pacific v. City of Los Angeles, 922 F.2d 498, 504 (9th Cir. 1990). “’When the 15 regulatory authority has ‘drawn the line, clearly and emphatically,’ as to the permissible use of the 16 property, the developer is not required to submit additional development applications.” Id. (quoting 17 Hoehne v. County of San Benito, 870 F.2d 529, 533 (9th Cir. 1989)); see also Sea & Sage Audubon 18 Soc., Inc. v. Planning Com., 34 Cal. 3d 412, 418 (holding exhaustion of administrative remedies is 19 required “unless the petitioner can positively state that the commission has declared what its ruling 20 will be in a particular case”). “The exception is narrowly construed and the burden of establishing 21 it lies with the developer.” Id. Gallagher does not allege that the relevant administrative bodies 22 have declared what their rulings would be if he were to challenge the various permit denials and 23 notices at issue. 24 At the hearing on this motion, Gallagher’s counsel stated that Gallagher had filed some 25 appeals of denials but had not sought administrative review of many of the denials and notices 26 mentioned in the SAC, and he stated that Gallagher had not sought judicial review through a writ of 27 mandate pursuant to California Code of Civil Procedure § 1094.5. Thus, the record before the Court 1 state law claims are DISMISSED WITHOUT PREJUDICE. Further, the Court finds that 2 || Gallagher’s state law claims raise complex issues of state law, and thus to the extent that any state 3 || law claims are not subject to administrative exhaustion, the Court declines supplemental jurisdiction 4 over those claims pursuant to 28 U.S.C. § 1367(c)(1). 5 6 CONCLUSION 7 For the reasons set forth above, the Court DENIES defendants’ motion to dismiss the fourth 8 cause of action under 42 U.S.C. § 1983 and GRANTS defendants’ motion to dismiss the state law 9 claims. Those claims are DISMISSED WITHOUT PREJUDICE. An initial case management 10 conference is scheduled for March 1, 2024 at 2:30 p.m. 11 12 IT IS SO ORDERED.

|| Dated: February 9, 2024 | Lf ja SUSAN ILLSTON 15 United States District Judge 16

18 19 20 21 22 23 24 25 26 27 28