Peyman Pakdel v. City and Cty. of S.F.

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAR 17 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

PEYMAN PAKDEL; SIMA CHEGINI, No. 17-17504

Plaintiffs-Appellants, D.C. No. 3:17-cv-03638-RS

v. MEMORANDUM* CITY AND COUNTY OF SAN FRANCISCO; et al.,

Defendants-Appellees.

Appeal from the United States District Court for the Northern District of California Richard Seeborg, District Judge, Presiding

Argued and Submitted September 13, 2019 San Francisco, California

Before: GOULD, BEA, and FRIEDLAND, Circuit Judges.

Plaintiffs-Appellants (“Plaintiffs”) challenge the City of San Francisco’s

Expedited Conversion Program (“ECP”), which allows property owners to convert

a tenancy-in-common property into a condominium property on the condition that

they offer any existing tenants lifetime leases in units within the converted

property. Plaintiffs allege that this “Lifetime Lease Requirement” effectuates an

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. unreasonable seizure of their property in violation of the Fourth Amendment and

abridges their constitutional right to privacy in violation of the Due Process and

Equal Protection Clauses of the Fourteenth Amendment. The district court held

that these contentions failed to state a claim and thus dismissed them under Federal

Rule of Civil Procedure 12(b)(6). Reviewing the district court’s dismissal of

Plaintiffs’ claims de novo, Gant v. County of Los Angeles, 772 F.3d 608, 614 (9th

Cir. 2014), we affirm.1

1. The district court did not err in dismissing with prejudice Plaintiffs’

Fourth Amendment unreasonable seizure claim. There is no seizure of property

when an individual “voluntarily transfer[s] any possessory interest he may have

had in the [property].” Maryland v. Macon, 472 U.S. 463, 469 (1985); see United

States v. Sherwin, 539 F.2d 1, 7 (9th Cir. 1976). Plaintiffs made the choice to offer

their tenant a lifetime lease in exchange for the benefits of expedited condominium

conversion under the ECP. That a preexisting private agreement between Plaintiffs

and the other co-owners of their building obligated Plaintiffs to apply for

conversion does not transform this voluntary exchange into a seizure by the City.

The Fourth Amendment reaches only state action, United States v. Jacobsen, 466

U.S. 109, 113 (1984), and the City had no involvement in the formation of this

1 We resolve Plaintiffs’ other claims in a concurrently filed opinion.

2 agreement between the tenants in common, see Blum v. Yaretsky, 457 U.S. 991,

1004 (1982).

2. Nor did the district court err in dismissing Plaintiffs’ substantive due

process and equal protection claims with prejudice. A regulation challenged as

violating substantive due process or equal protection is reviewed for a rational

basis so long as it does not implicate a suspect class or impinge on fundamental

rights. See Bowers v. Whitman, 671 F.3d 905, 917 (9th Cir. 2012); Kawaoka v.

City of Arroyo Grande, 17 F.3d 1227, 1234 (9th Cir. 1994). The Lifetime Lease

Requirement does not implicate a suspect class. And Plaintiffs do not have a

fundamental right under California’s Ellis Act to exclude people from their home

once it has been converted into a condominium. The Ellis Act prohibits the

government from forcing property owners to offer accommodations for rent. Cal.

Gov’t Code § 7060(a). But the Ellis Act does not apply to condominiums. See

Valnes v. Santa Monica Rent Control Bd., 270 Cal. Rptr. 636, 638-39 (Ct. App.

1990). Nor does it apply, per its express terms, when the government is enforcing

an “agreement by which an owner of residential real property has agreed to offer

the accommodations for rent or lease in consideration for a direct financial

contribution.” Cal. Gov’t Code § 7060.1(a). Here, Plaintiffs acknowledged in a

written agreement with the City that they were offering their tenant a lifetime lease

3 in consideration for the financial benefits of expedited condominium conversion.

We thus review the Lifetime Lease Requirement for a rational basis.

The Lifetime Lease Requirement is rationally related to the legitimate

government goal of preventing existing tenants from being displaced by

widespread condominium conversions under the ECP. It therefore does not violate

substantive due process or equal protection.

AFFIRMED.