GHP Management Corporation v. City of Los Angeles

Opinion

Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 1 of 15 Page ID #:556

1 2 O 3 4 5 6 7 10 11 GHP MANAGEMENT CORPORATION, ) Case No. CV 21-06311 DDP (JEMx) ) 12 Plaintiff, ) ) ORDER GRANTING MOTIONS TO DISMISS 13 v. ) ) 14 CITY OF LOS ANGELES, ) [Dkt 17, 43] ) 15 Defendant. ) ) 16 17 Presently before the court are two Motions to Dismiss 18 Plaintiffs’ Complaint, one filed by Defendant City of Los Angeles 19 (“the City”) and the other filed by Intervenors Alliance for 20 Community Empowerment (“ACCE”); Strategic Actions for a Just 21 Economy (“SAJE”); and Coalition for Economic Survival (“CES”) 22 (collectively, “Intervenors”). Having considered the submissions 23 of the parties, the court grants the motions and adopts the 24 following Order. 25 I. Background 26 At the outset of the COVID-19 pandemic, the City enacted 27 Ordinance No. 186585, which was later updated by Ordinance No. 28 186606 (collectively, the “Eviction Moratorium” or “Moratorium”). Plaintiffs allege that the Eviction Moratorium “effectively Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 2 of 15 Page ID #:557

1 precludes residential evictions.” (Complaint ¶ 45.) The 2 Moratorium prohibits landlords from terminating tenancies due to 3 COVID-related nonpayment of rent, any no-fault reason, certain 4 lease violations related to additional occupants and pets, or 5 removal of rental units from the rental market. (Complaint ¶ 46; 6 LAMC § 49.99.2, 49.99.4.)1 Landlords are also prohibited from 7 charging interest or late fees on COVID-related missed rent. (LAMC 8 § 49.99.2(D).) The Moratorium further allows tenants who have 9 missed rent payments a one-year period to pay delayed rent, 10 starting from the end of the ongoing local emergency period. 11 (Compl. ¶ 46; LAMC § 49.99.2) Tenants may sue landlords and seek 12 civil penalties for violations of the Moratorium. (Compl. ¶ 49; 13 LAMC § 49.99.7.) 14 Plaintiffs, comprised of (1) thirteen limited liability 15 corporations or limited partnerships that own apartment buildings 16 and (2) the management company that manages the buildings, own or 17 manage nearly five thousand apartment units in Los Angeles. 18 Plaintiffs allege that the Moratorium constitutes an uncompensated 19 taking of private property in violation of the Fifth Amendment’s 20 Takings Clause, as well as the California Constitution’s Takings 21 Clause. Plaintiffs’ Complaint seeks an award of “just 22 compensation,” costs, and attorney’s fees, but does not seek to 23 invalidate or enjoin enforcement of the Moratorium. 24 Intervenors and the City now move separately to dismiss 25 Plaintiffs’ Complaint. 26 27 28 1 The City’s Request for Judicial Notice is granted. 2 Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 3 of 15 Page ID #:558

1 II. Legal Standard 2 A complaint will survive a motion to dismiss when it 3 “contain[s] sufficient factual matter, accepted as true, to state a 4 claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 5 556 U.S. 662, 678 (2009)(quoting Bell Atl. Corp. v. Twombly, 550 6 U.S. 544, 570 (2007)). When considering a Rule 12(b)(6) motion, a 7 court must “accept as true all allegations of material fact and 8 must construe those facts in the light most favorable to the 9 plaintiff.” Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). 10 Although a complaint need not include “detailed factual 11 allegations,” it must offer “more than an unadorned, 12 the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 13 678. Conclusory allegations or allegations that are no more than a 14 statement of a legal conclusion “are not entitled to the assumption 15 of truth.” Id. at 679. In other words, a pleading that merely 16 offers “labels and conclusions,” a “formulaic recitation of the 17 elements,” or “naked assertions” will not be sufficient to state a 18 claim upon which relief can be granted. Id. at 678 (citations and 19 internal quotation marks omitted). 20 “When there are well-pleaded factual allegations, a court 21 should assume their veracity and then determine whether they 22 plausibly give rise to an entitlement of relief.” Iqbal, 556 U.S. 23 at 679. Plaintiffs must allege “plausible grounds to infer” that 24 their claims rise “above the speculative level.” Twombly, 550 U.S. 25 at 555-56. “Determining whether a complaint states a plausible 26 claim for relief” is “a context-specific task that requires the 27 reviewing court to draw on its judicial experience and common 28 sense.” Iqbal, 556 U.S. at 679. 3 Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 4 of 15 Page ID #:559

1 III. Discussion 2 A. Per Se Taking 3 Movants contend that the Moratorium is not a permanent 4 physical invasion of Plaintiffs’ properties, and therefore does not 5 constitute a per se taking. (E.g., City Mot. at 15.) See Loretto 6 v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 440 (1982) 7 (“We affirm the traditional rule that a permanent physical 8 occupation of property is a taking.”) In Loretto itself, the 9 Supreme Court recognized “that States have broad power to regulate 10 housing conditions in general and the landlord-tenant relationship 11 in particular without paying compensation for all economic injuries 12 that such regulation entails[,] . . . [s]o long as these 13 regulations do not require the landlord to suffer the physical 14 occupation of a portion of his building by a third party.” Id. 15 Later, in Yee v. City of Escondido, Cal., 503 U.S. 519 (1992), the 16 Court held that a combination of rent control laws and eviction 17 protections that limited property owners’ ability to evict tenants 18 did not constitute governmental authorization of “a compelled 19 physical invasion of property” that would constitute a per se 20 taking. Yee, 503 U.S. at 527-28. 21 In Yee, a local rent control ordinance limited a mobile home 22 park owners’ ability to raise rents, while a state law 23 simultaneously protected mobile home owners’ ability to transfer 24 mobile homes sited on rented mobile home park land. Id. at 524-25. 25 The park owners alleged that the rent control scheme, against the 26 backdrop of the state law, constituted a physical taking of park 27 land, insofar as it granted tenants and their successors “the right 28 to physically permanently occupy and use the real property of 4 Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 5 of 15 Page ID #:560

1 Plaintiff.” Id. at 525. The Court disagreed. “When a landowner 2 decides to rent his land to tenants, the government may place 3 ceilings on the rents the landowner can charge, or require the 4 landowner to accept tenants he does not like, without automatically 5 having to pay compensation.” Id. at 529 (internal citations 6 omitted). “Petitioners’ tenants were invited by petitioners, not 7 forced upon them by the government. . . . A different case would 8 be presented were the statute, on its face or as applied, to compel 9 a landowner over objection to rent his property or to refrain in 10 perpetuity from terminating a tenancy.” Id. at 528. 11 In response to Movants’ arguments that Yee controls here, 12 Plaintiffs argue primarily that Yee is no longer good law because 13 “six members of the Supreme Court obviously disagree” with its 14 central premise: that once a landlord chooses to rent to tenants, 15 the government may regulate the landlord-tenant relationship 16 without automatically engaging in a per se taking. (Opp. to City 17 Mot. at 18:17.) To support their assertion, Plaintiffs point to 18 the Supreme Court’s recent decisions in Alabama Ass’n 19 of Realtors v. Department of Health & Human Services, 141 S. Ct. 20 2485 (2021), and Pakdel v. City & Cty. of San Francisco, 141 S. Ct. 21 2226 (2021). These cases bear only tangentially however, if at 22 all, on the continued validity of Yee. In Alabama Association of 23 Realtors, the Supreme Court granted an emergency application to 24 vacate a stay of a judgment invalidating the Centers for Disease 25 Control and Prevention (“CDC”)’s eviction moratorium. Alabama 26 Ass’n of Realtors, 141 S.Ct. at 2486, 2490. The Court did not 27 address any takings issue anywhere in its opinion. Although the 28 Court did, citing Loretto, recognize that the right to exclude is 5 Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 6 of 15 Page ID #:561

1 “one of the most fundamental elements of property ownership,” Yee 2 acknowledged the very same principle. Id.; Yee, 503 U.S. at 528 3 (“[T]he right to exclude is doubtless . . . one of the most 4 essential sticks in the bundle of rights that are commonly 5 characterized as property . . . .”) (internal quotation marks 6 omitted). 7 Pakdel did involve a takings claim, albeit a regulatory 8 takings claim rather than a per se claim. Pakdel, 141 S.Ct. at 9 2228. The Court’s opinion, however, was limited to the question 10 whether petitioners were required to exhaust local government 11 administrative procedures before filing suit pursuant to 42 U.S.C. 12 § 1983, even after the local government had rendered a final 13 regulatory decision. Id. In the course of answering that question 14 in the negative, the Court stated in a footnote that “[o]n remand, 15 the Ninth Circuit may give further consideration to [merits] claims 16 in light of our recent decision in Cedar Point Nursery v. Hassid.”2 17 Id. at 2229 n.1 (citation omitted). In Cedar Point, the Court 18 concluded that a California law requiring farmers to grant union 19 organizers access to private property for up to three hours per 20 day, 120 days per year, constituted a per se physical taking. 21 Cedar Point Nursery v. Hassid, 141 S. Ct. 2063, 2069, 2080 (2021). 22 Although the Court did cite Yee, it did so only once, and then only 23 as an example of a decision that has “described use restrictions 24 that go ‘too far’ as ‘regulatory takings.’” Id. at 2072. The Court 25 then observed that the “regulatory takings” label can be misleading 26 where, as in Cedar Point, “a regulation results in a physical 27 2 The district court in Pakdel did not reach the merits of the 28 takings claims. Pakdel, 141 S.Ct. at 2228-29. 6 Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 7 of 15 Page ID #:562

1 appropriation of property.” Id. The Court made no further mention 2 of Yee, let alone the principle that a regulation governing an 3 existing landlord-tenant relationship is distinguishable from a 4 regulation compelling physical occupation in the first instance, or 5 in perpetuity. Thus, contrary to Plaintiffs’ suggestion, the 6 Court’s footnote in Pakdel, indicating that the Ninth Circuit 7 remains free to consider Cedar Point if and when the Ninth Circuit, 8 on remand, reaches merits issues that were never reached by the 9 district court, does little to vitiate Yee.3 10 This Court declines Plaintiffs’ invitation to read the tea 11 leaves, such as they are, in Alabama Association of Realtors, 12 Pakdel, and Cedar Point. None of those cases can be read to 13 abrogate Yee or its prescription that laws that “merely regulate 14 [landlords’] use of their land by regulating the relationship 15 between landlord and tenant” do not constitute per se takings. 16 Yee, 503 U.S. at 528 (emphasis original). 17 Plaintiffs also argue, briefly, that the Moratorium 18 constitutes a per se taking even under Yee because it “requires 19 3 This Court acknowledges that in Heights Apartments, LLC v. 20 Walz, the Eighth Circuit found Yee distinguishable and applied Cedar Point to sustain a per se takings challenge to an eviction 21 moratorium. Heights Apartments, 30 F.4th 720, 733 (8th Cir. 2022). That has not, however, been the Ninth Circuit’s approach. In 22 Ballinger v. City of Oakland, for example, the Ninth Circuit addressed a takings challenge to an ordinance requiring payments to 23 tenants prior to an eviction, even for good cause. Ballinger, 24 F.4th 1287, 1292 (9th Cir. 2022), cert. denied sub nom. Ballinger 24 v. City of Oakland, California, 142 S. Ct. 2777 (2022). Citing to both Cedar Point and Yee, the court applied the latter, concluding 25 that even a regulation mandating payments from landlords to tenants constituted a regulation of the use of property, and not a per se 26 taking, such as those described in Yee, compelling the creation of a new landlord-tenant relationship or barring the termination of a 27 tenancy “in perpetuity.” Id. at 1293-94 (quoting Yee, 503 U.S. at 528). 28 7 Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 8 of 15 Page ID #:563

1 the landowner to submit to the physical occupation of his land. 2 ‘This element of required acquiescence is at the heart of the 3 concept of occupation.’” (Opp. to Intervenors’ Mot. at 3:23-28.) 4 Yee, 503 U.S. at 527 (quoting FCC v. Florida Power Corp., 480 U.S. 5 245, 252 (1987) (emphasis original)). But, as in Yee, the 6 Moratorium does not swoop in out of the blue to force Plaintiffs to 7 submit to a novel use of their property. Nor does the Moratorium 8 present the type of different case, contemplated by Yee, where a 9 regulation compels a landowner to “refrain in perpetuity from 10 terminating a tenancy.” Id. at 528. The Moratorium only precludes 11 evictions for a limited, albeit indeterminate, time. Compare id. 12 (discussing Cal.Civ.Code § 798.56(g) requirement of up to 12 months 13 notice prior to eviction). “Put bluntly, no government has 14 required any physical invasion of petitioners’ property. [The] 15 tenants were invited by [the landlords], not forced upon them by 16 the government.” Yee, 503 U.S. at 528; see also Ballinger, 24 17 F.4th at 1293 (No per se taking, even where regulation required 18 payment by landlord to tenants prior to eviction for good cause, 19 because landlord plaintiffs “voluntarily chose to lease their 20 property . . . .”). A regulation affecting that pre-existing 21 relationship is not a per se taking. 22 B. Regulatory taking 23 “[W]hile property may be regulated to a certain extent, if 24 regulation goes too far it will be recognized as a taking.” 25 Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922). 26 “[C]ompensation is required only if considerations such as the 27 purpose of the regulation or the extent to which it deprives the 28 owner of the economic use of the property suggest that the 8 Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 9 of 15 Page ID #:564

1 regulation has unfairly singled out the property owner to bear a 2 burden that should be borne by the public as a whole.” Yee, 503 3 U.S. at 522–23 (citing Penn Central Transportation Co. v. New York 4 City, 438 U.S. 104, 123–125 (1978)). The relevant Penn Central 5 factors “include the regulation’s economic impact on the claimant, 6 the extent to which the regulation interferes with distinct 7 investment-backed expectations, and the character of the government 8 action.” MHC Fin. Ltd. P’ship v. City of San Rafael, 714 F.3d 9 1118, 1127 (9th Cir. 2013). 10 1. Economic Impact 11 The Ninth Circuit discussed the Penn Central factors, 12 including the economic impact factor, at length in Colony Cove 13 Properties, LLC v. City of Carson, 888 F.3d 445 (9th Cir. 2018). 14 As the court explained, “[n]ot every diminution in property value 15 caused by a government regulation rises to the level of an 16 unconstitutional taking.” Colony Cove, 888 F.3d at 451. 17 Similarly, “the mere loss of some income because of regulation does 18 not itself establish a taking.” Id. Rather, courts look to 19 whether a regulation is “functionally equivalent to the classic 20 taking in which government directly appropriates private property 21 or ousts the owner from his domain.”4 Id. (quoting Lingle v. 22 Chevron U.S.A. Inc., 544 U.S. 528, 539 (2005)). Accordingly, the 23 threshold is high. Indeed, the Ninth Circuit has observed that a 24 diminution in property value as high as 92.5% does not constitute a 25 taking, and no court has found a taking where the diminution of 26 value does not exceed 50%. Id. 27 4 This same fundamental inquiry underpins analyses of per se 28 takings. See Lingle, 544 U.S. 538-39. 9 Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 10 of 15 Page ID #:565

1 To determine a diminution in value for purpose of evaluating 2 the economic impact on a plaintiff, courts “compare the value that 3 has been taken from the property with the value that remains in the 4 property.” Colony Cove, 888 F.3d at 451 (quoting Keystone 5 Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 497 (1987)). 6 Here, however, Plaintiffs’ Complaint does not allege any particular 7 diminution in value, or specific pre- or post-Moratorium values 8 from which a level of diminution could be calculated. 9 Plaintiffs assert that this pleading deficiency is not fatal, 10 and that they need not allege any quantitative facts pertaining to 11 valuation, because the Ninth Circuit’s Colony Cove opinion is 12 wrong. (Opp. to Intervenors’ Mot. at 6:1-4, 7 n.4.) Plaintiffs 13 contend that because the Penn Central factor analysis is 14 “essentially ad hoc,” the allegation that Plaintiffs have lost 15 rents as a result of the Moratorium is alone sufficient to satisfy 16 the economic impact factor. See Penn Central, 438 U.S. at 124. 17 Even if this Court were to agree with the substance of 18 Plaintiffs’ arguments, the court could not simply disregard Colony 19 Cove and excuse Plaintiffs of their burden to allege and show the 20 requisite adverse economic impact. “A district court bound by 21 circuit authority . . . has no choice but to follow it, even if 22 convinced that such authority was wrongly decided.” Hart v. 23 Massanari, 266 F.3d 1155, 1175 (9th Cir. 2001). Plaintiffs’ 24 allegation that their tenants are $20 million in arrears is 25 presented in a vacuum, and cannot alone demonstrate a significant 26 economic impact, notwithstanding Plaintiffs’ vague and conclusory 27 allegation that “the economic impact of the Eviction Moratorium is 28 severe and ruinous.” (Compl. ¶ 71.) 10 Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 11 of 15 Page ID #:566

1 2. Interference with investment-backed expectations 2 The next Penn Central factor is “the extent to which the 3 regulation has interfered with distinct investment-backed 4 expectations.” Penn Central, 438 U.S. at 124. “To ‘expect’ can 5 mean to anticipate or look forward to, but it can also mean ‘to 6 consider probable or certain,’ and ‘distinct’ means capable of 7 being easily perceived, or characterized by individualizing 8 qualities.” Guggenheim v. City of Goleta, 638 F.3d 1111, 1120 (9th 9 Cir. 2010) (en banc). “To form the basis for a taking claim, a 10 purported distinct investment-backed expectation must be 11 objectively reasonable.” Colony Cove, 888 F.3d at 452; see also 12 Connolly v. Pension Ben. Guar. Corp., 475 U.S. 211, 226 (1986). 13 “[W]hat is relevant and important in judging reasonable 14 expectations is the regulatory environment at the time of the 15 acquisition of the property.” Bridge Aina Le’a, LLC v. Land Use 16 Comm’n, 950 F.3d 610, 634 (9th Cir. 2020) (internal quotation marks 17 and citation omitted). “[T]hose who do business in [a] regulated 18 field cannot object if the legislative scheme is buttressed by 19 subsequent amendments to achieve the legislative end.” 20 Concrete Pipe & Prod. of California, Inc. v. Constr. Laborers 21 Pension Tr. for S. California, 508 U.S. 602, 645 (1993) (quoting 22 FHA v. The Darlington, Inc., 358 U.S. 84, 91 (1958)) (internal 23 alterations omitted). 24 Movants argue that Plaintiffs knowingly chose to invest in the 25 highly-regulated rental housing market, and that any subjective 26 expectations Plaintiffs may have had that the regulatory 27 environment would remain static were and are objectively 28 unreasonable. The City raised, and this Court rejected, a similar 11 Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 12 of 15 Page ID #:567

1 argument in the context of a Contracts Clause challenge to the same 2 Moratorium at issue here. See Apartment Ass’n of Los Angeles 3 Cnty., Inc. v. City of Los Angeles, 500 F. Supp. 3d 1088, 1095 4 (C.D. Cal. 2020), aff’d, 10 F.4th 905 (9th Cir. 2021), cert. 5 denied, 212 L. Ed. 2d 595, 142 S. Ct. 1699 (2022). Had Plaintiffs 6 acquired their rental properties in the midst of the pandemic, 7 Movants’ argument might be more compelling. The regulatory 8 environment existing prior to the pandemic, however, gave 9 Plaintiffs little reason to expect that they might be barred from 10 evicting tenants for nonpayment of rent. Bridge Aina Le’a, 950 11 F.3d at 634. “‘Distinct investment-backed expectations’ implies 12 reasonable probability, like expecting rent to be paid, not starry 13 eyed hope of winning the jackpot if the law changes. A landlord 14 buys land burdened by lease-holds in order to acquire a stream of 15 income from rents and the possibility of increased rents or resale 16 value in the future.” Guggenheim, 638 F.3d at 1120 (emphases 17 added). As this Court has stated, “the scope and nature of the 18 COVID-19 pandemic, and of the public health measures necessary to 19 combat it, have no precedent in the modern era, and [] no amount of 20 prior regulation could have led landlords to expect anything like 21 the blanket Moratorium.” Apartment Ass’n of Los Angeles, 500 22 F.Supp. 3d at 1096; see also Baptiste v. Kennealy, 490 F. Supp. 3d 23 353, 390 (D. Mass. 2020). The extent to which the Moratorium 24 interferes with Plaintiffs’ reasonable expectations thus weighs in 25 favor of a regulatory taking. 26 3. Character of the Moratorium 27 “A ‘taking’ may more readily be found when the interference 28 with property can be characterized as a physical invasion by 12 Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 13 of 15 Page ID #:568

1 government than when interference arises from some public program 2 adjusting the benefits and burdens of economic life to promote the 3 common good.” Penn Central, 438 U.S. at 124. For example, rent 4 control ordinances intended to shield residents from “excessive 5 rent increases,” have been found to constitute “precisely such a 6 program.” Colony Cove, 888 F.3d at 454. Here, there can be little 7 doubt the Moratorium is geared toward promoting the common good. 8 Indeed, the Moratorium is predicated on the City’s findings that 9 “[t]he COVID-19 pandemic threatens to undermine housing security 10 and generate unnecessary displacement of City residents.” (LAMC § 11 49.99.) There can be little dispute that, absent the Moratorium’s 12 protections, significant numbers of tenants with COVID-related loss 13 of income would have been evicted, resulting not only in the harms 14 typical of mass displacements, but exacerbating the spread of 15 COVID-19 as well, to the detriment of all. Other courts, 16 addressing similar regulations, have reached the same conclusion. 17 See, e.g., Baptiste, 490 F. Supp. At 390 (D. Mass. 2020); S. 18 California Rental Hous. Ass’n v. Cty. of San Diego, No. 19 3:21CV912-L-DEB, 2021 WL 3171919, at *9 (S.D. Cal. July 26, 2021). 20 With respect to the “character” factor, Plaintiffs largely 21 reiterate their argument, rejected above, that the Moratorium is a 22 per se taking. Beyond that, Plaintiffs contend in a footnote that, 23 although rent control schemes may qualify as sufficiently public- 24 oriented, the Moratorium “is far different and significantly more 25 serious.” (Opp. to Intervenors’ Mot. at 9 n.5.) Plaintiffs do 26 not, however, explain how a regulation intended to minimize the 27 displacement of financially vulnerable tenants in the midst and as 28 a result of a public health emergency unprecedented in modern 13 Case 2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page 14 of 15 Page ID #:569

1 history is less protective of the common good than are rent control 2 ordinances. As to seriousness, it is not clear to the court what 3 bearing the “seriousness” of the Moratorium has on the public 4 nature of its purpose. To the extent Plaintiffs intend to 5 emphasize the shifting of financial burdens from tenants to 6 landlords, the Ninth Circuit has recognized that commonplace 7 regulations, including rent control, zoning schemes, and other land 8 use restrictions, “can also be said to transfer wealth from the one 9 who is regulated to another.” Yee, 503 U.S. at 529. And, to the 10 extent Plaintiffs use the word “serious” to refer to the degree of 11 the Moratorium’s financial effects, they have failed, as discussed 12 above, to plead any facts establishing a “serious” economic impact. 13 4. Balance of Penn Central factors 14 Plaintiffs have adequately alleged that the Moratorium has 15 interfered with the reasonable, investment-backed expectations 16 Plaintiffs had when they acquired their rental properties. The 17 Complaint does not, however, allege any diminution in value, let 18 alone a diminution high enough to function as the equivalent of a 19 classic taking. Because the Moratorium also indisputably promotes 20 the common good, the balance of the Penn Central factors weighs 21 heavily against a determination that the Moratorium constitutes a 22 regulatory taking. 23 IV. Conclusion 24 For the reasons stated above, the motions to dismiss are 25 GRANTED.5 Plaintiffs’ Complaint is DISMISSED, with leave to amend. 26 5 Having determined that Plaintiffs’ Complaint fails to allege 27 either a per se or regulatory taking, the court does not reach the City’s arguments that any takings claims are unripe, or that 28 (continued...) 14 Case [2:21-cv-06311-DDP-JEM Document 53 Filed 11/17/22 Page15o0f15 Page ID#:570

1] Any amended complaint shall be filed within twenty-one days of the date of this Order. IT IS SO ORDERED. □□□ Dated: November 17, 2022 DEAN D. PREGERSON 8 United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 20 oo 59 . *(...continued) . . Plaintiffs lack standing to assert any such claims. 15