Kingsley Management Corp. v. City of Santa Ana

• Court: Court of Appeals for the Ninth Circuit
• Decided: September 13, 2023
• Docket: 22-55701
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS SEP 13 2023 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

KINGSLEY MANAGEMENT CORP., a No. 22-55701 Utah corporation; et al., D.C. No. Plaintiffs-Appellants, 8:22-cv-00076-CJC-JDE

v. MEMORANDUM* CITY OF SANTA ANA, a municipal corporation,

Defendant-Appellee.

Appeal from the United States District Court for the Central District of California Cormac J. Carney, District Judge, Presiding

Argued and Submitted August 22, 2023 Pasadena, California

Before: RAWLINSON and BRESS, Circuit Judges, and ZOUHARY,** District Judge.

Mobile home management companies (collectively “Kingsley”) challenge

two City of Santa Ana ordinances that imposed rent control and eviction restrictions.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Jack Zouhary, United States District Judge for the Northern District of Ohio, sitting by designation. The district court stayed Kingsley’s claims based on Pullman abstention. See R.R.

Comm’n of Tex. v. Pullman Co., 312 U.S. 496 (1941). While this appeal was

pending, the City passed a new ordinance that amends and supersedes the challenged

ordinances. We have jurisdiction under 28 U.S.C. § 1291. We dismiss as moot in

part, reverse in part, and remand for further proceedings.

1. Five of Kingsley’s six causes of action sought only declaratory and

injunctive relief. Because the new ordinance amends and supersedes the prior

ordinances, “it is impossible for a court to grant any effectual relief” on Kingsley’s

causes of action for declaratory and injunctive relief as to the old ordinances.

Mission Prod. Holdings, Inc. v. Tempnology, LLC, 139 S. Ct. 1652, 1660 (2019)

(quotation omitted). We therefore dismiss as moot Kingsley’s claims that the former

ordinances are preempted by state and federal law, are unconstitutionally vague, and

violate substantive due process rights.

On remand, Kingsley may amend its complaint to assert challenges to the new

ordinance. See New York State Rifle & Pistol Ass’n, Inc. v. City of New York, 140

S. Ct. 1525, 1526 (2020) (noting that “where the mootness is attributable to a change

in the legal framework . . . and where the plaintiff may have some residual claim

under the new framework . . . our practice is to vacate the judgment and remand for

further proceedings in which the parties may, if necessary, amend their pleadings or

develop the record more fully” (quoting Lewis v. Cont’l Bank Corp., 494 U.S. 472,

2 482 (1990))). The procedure on remand, for amending the complaint in this case

and the companion case (Case No. 8:23-cv-00102-CJC-JDE (C.D. Cal.)), we leave

to the district court’s discretion.

2. This appeal is not entirely moot, however. Kingsley’s final cause of

action asserted that the former ordinances effected an uncompensated taking, in

violation of the Fifth Amendment. On this claim, Kingsley sought damages in

addition to declaratory and injunctive relief. Kingsley may no longer seek

declaratory and injunctive relief against the superseded ordinances but may still seek

damages. See Mission Prod. Holdings, 139 S. Ct. at 1660 (explaining that “nothing

so shows a continuing stake in a dispute’s outcome as a demand for dollars and

cents,” and that “[i]f there is any chance of money changing hands, [the plaintiff’s]

suit remains live”). We thus must determine whether the district court properly

stayed this claim based on Pullman abstention. Although our decision here concerns

Kingsley’s takings claim, our reasoning applies to the district court’s Pullman

analysis in toto, both in this case and in the second lawsuit referenced above, which

the district court also stayed under Pullman.

3. “We review a district court’s Pullman abstention under a modified

abuse of discretion standard.” Gearing v. City of Half Moon Bay, 54 F.4th 1144,

1147 (9th Cir. 2022). “We first review de novo whether the requirements for

Pullman abstention are satisfied.” Id. (quoting Courthouse News Serv. v. Planet,

3 750 F.3d 776, 782 (9th Cir. 2014)). “If they are not, the district court has little or no

discretion to abstain; if they are, we review the decision to abstain for an abuse of

discretion.” Id. (quoting Courthouse News Serv., 750 F.3d at 782) (internal

quotations omitted). We conclude that the district court’s Pullman analysis was

mistaken.

Pullman abstention is “an equitable doctrine that allows federal courts to

refrain from deciding sensitive federal constitutional questions when state law issues

may moot or narrow the constitutional questions.” Id. (quoting San Remo Hotel v.

City & County of San Francisco, 145 F.3d 1095, 1104 (9th Cir. 1998)). But

abstention under Pullman remains “an extraordinary and narrow exception to the

duty of a district court to adjudicate a controversy.” Wolfson v. Brammer, 616 F.3d

1045, 1066 (9th Cir. 2010) (quotation and brackets omitted). Pullman abstention is

appropriate only when “(1) the complaint [] involve[s] a sensitive area of social

policy that is best left to the states to address; (2) a definitive ruling on the state

issues by a state court could obviate the need for federal constitutional adjudication

by the federal court; and (3) the proper resolution of the potentially determinative

state law issue is uncertain.” Fireman’s Fund Ins. Co. v. City of Lodi, 302 F.3d 928,

939–40 (9th Cir. 2002) (internal quotations and alterations omitted) (quoting Cedar

Shake & Shingle Bureau v. City of Los Angeles, 997 F.2d 620, 622 (9th Cir. 1993)).

At minimum, the second Pullman factor is not met here. The only state-law

4 question the district court identified was whether the rent control ordinance

implemented “vacancy control” (i.e., whether the restrictions on annual rent increase

apply across tenants, or whether a landlord may “step up” the rent to the market rate

upon a change in tenants). But the outcome of that question would not meaningfully

narrow Kingsley’s claims. It does not bear on the separate eviction ordinance, and

even as to the takings claim, it is but one issue within a broader legal challenge.

4. We deny Kingsley’s motion to certify a question to the California

Supreme Court regarding vacancy control. “We invoke the certification process

only after careful consideration and do not do so lightly.” Cassirer v. Thyssen-

Bornemisza Collection Found., 69 F.4th 554, 557 (9th Cir. 2023) (quoting Kremen v.

Cohen, 325 F.3d 1035, 1037 (9th Cir. 2003)). Kingsley has not demonstrated that

certification is warranted here.

DISMISSED AS MOOT IN PART; REVERSED IN PART;

REMANDED.1

1 The parties shall bear their own costs on appeal.