Barrientos v. 1801-1825 Morton LLC ( 2009 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DEBORA BARRIENTOS; ARMANDO 
BRISENO; BERTHA CARDENAS;
MARTA CHAJON; MANUEL CUEVAS;
FRANCISCO A. DEL CID; MIGUEL
GONZALEZ; JEONG SOON HWANG;
BONG CHA KIM; JAE OK KIM;
No. 07-56697
LEANNA KIM; NONG-SOON KIM;
YOUNG SUK KIM; MARIA D.C. No.
LANDAVERDE; JANE LEE; JEONG LEE;  CV-06-06437-ABC-
SUSAN LEE; YOUNG HEAN LEE; JIN FMO
M. PARK; NORMA ANGELICA PENA; OPINION
MARIA RODRIGUEZ; HELEN H. YU,
Plaintiffs-Appellees,
v.
1801-1825 MORTON LLC,
Defendant-Appellant.

Appeal from the United States District Court
for the Central District of California
Audrey B. Collins, Chief District Judge, Presiding
Argued and Submitted
March 2, 2009—Pasadena, California
Filed October 9, 2009
Before: Diarmuid F. O’Scannlain, Pamela Ann Rymer, and
Kim McLane Wardlaw, Circuit Judges.
Opinion by Judge Wardlaw
14423
14426 BARRIENTOS v. 1801-1825 MORTON LLC
COUNSEL
Chris J. Evans, Kimball, Tirey & St. John, LLP, Irvine, Cali-
fornia, for appellant 1801-1825 Morton LLC.
Michael E. Soloff, Munger, Tolles & Olson, LLP, Los Ange-
les, California, A. Christian Abasto, Legal Aid Foundation of
Los Angeles, Los Angeles, California, and James R. Grow,
National Housing Law Project, Oakland, California, for
appellees Debora Barrientos, et al.
BARRIENTOS v. 1801-1825 MORTON LLC 14427
Rockard J. Delgadillo and Gerald M. Sato, City Attorney’s
Office, Los Angeles, California, Julie Nepveu, AARP Foun-
dation Litigation, Washington, DC, Helen R. Kanovsky,
Nancy D. Christopher, Doris S. Finnerman, William C. Lane,
and David M. Reizes, Office of the General Counsel Depart-
ment of Housing & Urban Development, Washington, DC,
and Tony West, Thomas P. O’Brien, Michael S. Raab, and
Christine H. Kohl, Office of the Attorney General of the
United States, Washington, DC, as amici curiae supporting
affirmance.
Karen K. McCay and Stephen D. Pahl, Pahl & McCay, San
Jose, C California, as Amicus Curiae supporting reversal.
OPINION
WARDLAW, Circuit Judge:
1801-1825 Morton LLC (“Morton”), a landlord subject to
the Los Angeles Rent Stabilization Ordinance (“LARSO”),
Los Angeles Municipal Code §§ 151.01 et seq., served notices
of eviction upon tenants whose rent is subsidized by the fed-
eral government, because it desired to raise the rent on the
apartment units. Though LARSO prohibits eviction for that
purpose, Morton asserts that a U.S. Department of Housing
and Urban Development (“HUD”) regulation permits the
eviction of an assisted tenant during the lease term for “good
cause” grounds, which “may include [the] desire to lease the
unit at a higher rental.” 24 C.F.R. § 982.310(d)(1)(iv). We
must decide whether HUD’s “good cause” regulation pre-
empts the operation of the City of Los Angeles’s eviction con-
trol ordinance. We hold that it does not. We affirm the district
court’s grant of summary judgment in favor of the tenants,
permanent injunctive relief, and award of attorney’s fees.
14428 BARRIENTOS v. 1801-1825 MORTON LLC
I. FACTUAL AND PROCEDURAL BACKGROUND
A. The Federal Assisted Housing Program
The federal government provides rental assistance for low
and moderate income families, the elderly, and the disabled
through what is known as “the section 8 program.” Congress
added the section 8 program to the United States Housing Act
of 1937 in 1974 by enacting the Housing and Community
Development Act of 1974, Pub. L. No. 93-383, § 201(a), 88
Stat. 633, 662-66 (1974) (codified as amended at 42 U.S.C.
§ 1437f). The express congressional “purpose” of the section
8 program is “aiding low-income families in obtaining a
decent place to live and . . . promoting economically mixed
housing.” 42 U.S.C. § 1437f(a). The program is managed fed-
erally by HUD, and administered locally by public housing
authorities (“PHA”). Section 8 tenants must sign a lease and
pay a portion of their income toward rent. The remainder of
the rent charge is paid by PHA pursuant to a housing assis-
tance payment (“HAP”) contract between PHA and the
owner, which mandates that a lease “shall be for a term of not
less than [one] year,” id. § 1437f(o)(7)(A), shall “contain
terms and conditions that . . . are consistent with State and
local law,” id. § 1437f(o)(7)(B)(ii)(I), and “shall provide that
during the term of the lease, the owner shall not terminate the
tenancy except for serious or repeated violation of the terms
and conditions of the lease, for violation of applicable Fed-
eral, State, or local law, or for other good cause,” id.
§ 1437f(o)(7)(C).
There are two relevant variations of assisted housing
tenant-based voucher subsidies. Under the standard housing
choice voucher program, the voucher is portable. The tenant
may choose to live in any property if the landlord agrees to
accept the voucher and comply with the applicable regula-
tions. The government subsidy is limited to the difference
between the amount the family is required to contribute and
BARRIENTOS v. 1801-1825 MORTON LLC 14429
the payment standard established by PHA based on fair mar-
ket rents for the area. Id. § 1437f(o)(1)(B), (o)(2)(A)-(B).
The second program is called the enhanced voucher pro-
gram, a recent legislative creation aimed at keeping tenants in
their homes despite changing market conditions. Beginning in
the 1960s, the federal government subsidized and insured
mortgage loans for the construction of housing for assisted
tenants (“section 236 program”). See Housing and Urban
Development Act of 1968, Pub. L. No. 90-448, §§ 201(a),
236(a)-(g), 82 Stat. 476, 498-503 (codified as amended at 12
U.S.C. § 1715z-1 (2000)). Owners of the housing were
allowed to prepay their loans after twenty years, at which time
they could exit the assisted housing program. 24 C.F.R.
§ 221.524(a)(ii) (1970). In the 1980s, Congress became con-
cerned that a large proportion of assisted housing would dis-
appear from the market when owners prepaid their section
236 loans. To prevent massive relocation and an inadequate
supply of assisted housing, Congress passed a number of laws
aimed at restricting the prepayment option. See Low Income
Housing Preservation and Resident Homeownership Act of
1990, Pub. L. No. 101-625, § 601(a), 104 Stat. 4079, 4249
(1990); Emergency Low Income Housing Preservation Act of
1987, Pub. L. No. 100-242, Title II, 101 Stat. 1815, 1877-91
(1988). In 1999, however, Congress decided to take a differ-
ent approach. It allowed landlords to prepay their mortgages
but increased the available subsidy to fair market value so as
to allow the subsidized tenants to remain in the same apart-
ment after prepayment. See Pub. L. No. 106-74, § 538, 113
Stat. 1047, 1122-24 (1999) (currently codified as amended at
§ 1437f(t)).1 Thus, the enhanced voucher authority provides
that “the assisted family may elect to remain in the same proj-
ect in which the family was residing on the date” the loan was
1
Relevant amendments were enacted by the Military Construction
Appropriations Act of 2001, Pub. L. No. 106-246, § 2801, 114 Stat. 511,
569 (2000), to clarify specifically that “the assisted family may elect to
remain in the same project” to receive increased government assistance.
14430 BARRIENTOS v. 1801-1825 MORTON LLC
prepaid, and that the government will pay the difference
between “rent for the dwelling unit” and the tenant’s required
contribution “during any period the family makes such an
election and continues to so reside” even as “rent may be
increased from time-to-time.” 42 U.S.C. § 1437f(t)(1)(B).
As evidenced by the congressional statement of purpose,
Congress and HUD have been perennially concerned about
making assisted housing available and affordable, and a key
means to that end is the creation of incentives for private
owners to participate in the section 8 program. In legislation
enacted in 1974, Congress protected tenants from arbitrary
eviction by giving the local PHA the “sole right to give notice
to vacate” and to evict the tenant. Housing and Community
Development Act of 1974, Pub. L. No. 93-383, § 201(a), 88
Stat. 633, 664 (1974); see also Swann v. Gastonia Hous.
Auth., 675 F.2d 1342, 1345 n.2 (4th Cir. 1982). In response
to owner complaints about this additional burden, HUD pro-
posed in 1978 that Congress harmonize the private and
assisted markets by eliminating PHA approval where “State
or local law governing evictions affords adequate tenant pro-
tection.” Hearings Before the Subcomm. on Hous. & Cmty.
Dev. of the Comm. on Banking, Fin. & Urban Affairs, 95th
Cong. 66-67 (1978) (statement of Patricia Harris, HUD
Sec’y). Congress refused, noting that “adoption of the pro-
posal would leave section 8 tenants to rely on state and
municipal laws for protection, and the committee does not
feel that HUD has provided ample information on the extent
to which this protection would be sufficient.” S. Rep. No. 95-
871, at 15 (1978), reprinted in 1978 U.S.C.C.A.N. 4773,
4788. To ameliorate the burden on owners within the bounds
of existing law, HUD issued a proposed regulation that
required PHA to proceed with issuance of the eviction notice
in accordance with State and local law as long as grounds to
do so existed. 45 Fed. Reg. 72,697, 72,697-99 (Nov. 30,
1980).
In 1981, HUD again proposed that Congress remove the
PHA approval requirement and legislate that state and local
BARRIENTOS v. 1801-1825 MORTON LLC 14431
law govern assisted tenants’ procedural and substantive rights.
Hearings Before the Subcomm. on Hous. & Cmty. Dev. of the
Comm. on Banking, Fin. & Urban Affairs, 97th Cong. 459
(1981). While the Senate agreed to eliminate the PHA
requirement and make “procedural and substantive rights of
the assisted tenant[s] . . . the same as those applicable to non-
subsidized tenants” in order to “encourage more owners to
participate,” S. Rep. No. 97-139 (1981), reprinted in 1981
U.S.C.C.A.N. 396, 552, the House—apparently unsure that
state and local law would provide sufficient protection—did
not. Congress reached a compromise later that year by elimi-
nating the PHA approval requirement but explicitly amending
the Senate’s version to add that “the owner shall not terminate
the tenancy except for serious or repeated violation of the
terms and conditions of the lease, applicable State, local or
Federal law, or for other good cause.” H.R. Rep. No. 97-208,
at 694-95 (1981) (Conf. Rep.), reprinted in 1981
U.S.C.C.A.N. 1010, 1053 (codified as amended at 42 U.S.C.
§ 1437f(d)(1)(B)(ii)). This new condition barring owners from
evicting a tenant mid-lease or from refusing to renew a lease
without cause became known as the “endless lease” require-
ment.
HUD issued an interim implementing rule in 1982, with-
drawing its earlier regulation permitting termination on thirty
days’ notice, and specifying that good cause was needed to
terminate a tenancy mid-lease or to refuse to renew. 47 Fed.
Reg. 33,497, 33,498 (Aug. 3, 1982). It excused the owner
from the “good cause” requirement if it wished to withdraw
a unit from the section 8 program at the end of the lease term.
Id. at 33,499. Finally, it expressly refused to define “good
cause,” providing that “[a]pplication of the statutory standards
to particular cases should be determined by the courts” on a
case-by-case basis. Id.
HUD’s final rule, issued in 1984, continued to require
“good cause” for all mid-lease terminations and nonrenewals.
49 Fed. Reg. 12,215, 12,231 (March 29, 1984). In addressing
14432 BARRIENTOS v. 1801-1825 MORTON LLC
owners’ comments about the creation of a “ ‘perpetual ten-
ancy’ terminable only for cause,” HUD noted that it “shares
the concern that [the new requirement] could reduce the
desire of private landlords to offer units for rental under the
program,” but that “the program options open to [HUD] must
accord with the 1981 statutory prohibition of a termination of
tenancy in section 8 existing housing other than for statutory
good cause grounds.” Id. It further indicated its desire to keep
“[t]enancy requirements . . . as simple as possible, with mini-
mal demands on the owner beyond the normal requirements
of an unsubsidized tenancy.” Id. at 12,233. Finally, it indi-
cated “that a comp[re]hensive regulatory definition of good
cause . . . is neither possible nor desirable,” and, therefore,
“[t]he good cause category should remain open to case by
case determination by the courts.” Id. However, for the first
time, HUD chose to provide “examples of ‘other good
cause,’ ” including among them “a business or economic rea-
son for termination of the tenancy (such as . . . desire to rent
the unit at a higher rental).” Id. at 12,233-34. This definition
is currently codified at 24 C.F.R. § 982.310(d)(1)(iv), the fed-
eral regulation before us.
In 1994, the National Apartment Association commis-
sioned a report by Abt Associates on assisted housing (“Abt
Report”). It recommended “making the Section 8 process as
similar to regular market operations as possible” by eliminat-
ing the “good cause” requirement for nonrenewal and retain-
ing protections provided to all renters in the local jurisdiction.
Thereafter, landlord groups pushed for the adoption of the Abt
Report’s recommendations, including the elimination of the
“endless lease” provision, claiming that “[s]ection 8 families
should get all the protections that their nonsubsidized friends
and neighbors receive but no greater protections.” Hearing on
H.R. 2406 Before Subcomm. on Hous. & Cmty. Opportunity
of Comm. on Banking, Fin. & Urban Affairs, 1995 WL
602577 (Oct. 13, 1995) (testimony of Christina L. Garcia,
Vice President of Wildwood Mgmt. Group, Inc.).
BARRIENTOS v. 1801-1825 MORTON LLC 14433
HUD’s 1995 final rule provides that the “good cause”
requirement applies “during the term of the assisted lease,”
but not “after a termination of the assisted lease,” 60 Fed.
Reg. 34,660, 34,673 (July 30, 1995), and emphasizes that its
regulation strikes a “reasonable balance between the interest
of the assisted tenant and the owner” because “the lease pro-
tects the tenant against arbitrary and ungrounded termination
by the owner,” while “the owner is not locked in, but may ter-
minate the tenant for lease violation or other good cause,”
including a “business or economic reason,” id. at 34,674.
In 1996, Congress repealed the “endless lease” provision
by eliminating the “good cause” requirement for nonrenewal,
though it retained the requirement for termination of a ten-
ancy during the term of the lease. Pub. L. No. 104-134,
§ 203(c)(2), 110 Stat. 1321, 1321-281 (1996). In 1998, Con-
gress made the 1996 changes permanent. Pub. L. No. 105-
276, §§ 545, 549(a), 112 Stat. 2461, 2596-604, 2607-09
(1998). The current governing statute provides that “during
the term of the lease, the owner shall not terminate the ten-
ancy except for serious or repeated violation of the terms and
conditions of the lease, for violation of applicable Federal,
State, or local law, or for other good cause.” 42 U.S.C.
§ 1437f(o)(7)(C). In 1999, HUD issued final implementing
regulations, leaving its definition of “good cause” unchanged.
64 Fed. Reg. 56,894 (Oct. 21, 1999). Thus, the relevant HUD
regulation currently provides that “ ‘[o]ther good cause’ . . .
may include, but is not limited to . . . [a] business or economic
reason for termination of the tenancy (such as sale of the
property, renovation of the unit, or desire to lease the unit at
a higher rental).” 24 C.F.R. § 982.310(d)(1)(iv). The regula-
tions also provide that “[d]uring the initial lease term, the
owner may not terminate the tenancy for ‘other good cause,’
. . . based on . . . a business or economic reason,” id.
§ 982.310(d)(2), and that the initial lease term must be at least
one year, id. § 982.309(a)(1).
14434 BARRIENTOS v. 1801-1825 MORTON LLC
B. LARSO
The City of Los Angeles adopted LARSO in 1979. It is a
comprehensive rent and eviction control ordinance, which
creates an exception to the general rule allowing “no-cause”
terminations at the end of a lease term. Its express purpose is
to “regulate rents so as to safeguard tenants from excessive
rent increases, while at the same time providing landlords
with just and reasonable returns from their rental units.” L.A.
Mun. Code § 151.01. Under LARSO, landlords and tenants
may set the initial terms of the tenancy, including the rental
rate, id. at § 151.06C, but thereafter, the landlord may only
increase the rent in small increments each year, absent special
permission, id. § 151.06D. Most importantly, LARSO
restricts possible grounds for eviction to thirteen enumerated
reasons, including violation of material terms of the lease,
damage to property, or criminal activity. Id. § 151.09A(1)-(7).
The only business-related reasons are renovation, removal of
the unit from the rental market, or placement of a family
member or resident manager into the unit. Id.
§ 151.09A(8)-(11). Expiration of the lease term or the desire
to raise rent to current market levels with a new tenant are not
permissible grounds for eviction. Through “vacancy decon-
trol,” however, when a tenant voluntarily leaves or is lawfully
evicted, the landlord may raise the rent to market levels. Id.
§ 151.06C. Though some public housing is exempt, LARSO
specifically applies to “rental units for which rental assistance
is paid pursuant to the Housing Choice Voucher Program cod-
ified at 24 CFR part 982.” L.A. Mun. Code § 151.02 Rental
Units (5).
C. Factual and Procedural Background
The parties have stipulated to the relevant facts. Appellees
are twenty-two low-income tenants (“Tenants”) residing in
“Morton Gardens,” an apartment complex in Los Angeles,
California, managed by Appellant 1801-1825 Morton LLC.
All Tenants reside in apartments covered by LARSO. The
BARRIENTOS v. 1801-1825 MORTON LLC 14435
building of Morton Gardens was financed through a section
236 loan, which was prepaid in 1998. Sixteen of the Tenants
were residing in Morton Gardens at that time and received
enhanced voucher subsidies (“Enhanced Voucher Tenants”).
The other six Tenants, who moved into Morton Gardens after
the prepayment, rent their apartments with the standard hous-
ing choice vouchers (“Standard Voucher Tenants”). The
Housing Authority for the City of Los Angeles (“HACLA”)
administers Tenants’ subsidies pursuant to HAP contracts
with Morton.
On March 31, 2006, Morton served each Tenant with a
Notice of Withdrawal from Section 8 Assisted Housing Pro-
gram and Notice of Change in Terms of Your Tenancy,
informing Tenants of its intention to “remove the Subject
Premises from the Federally Assisted Section 8 Housing Pro-
gram” and “to rent the unit at market rents” (“Withdrawal
Notices”). Responding to Tenant complaints, HACLA and the
Los Angeles Housing Department informed Morton that,
absent the Tenants’ consent, the HAP contracts could be ter-
minated only upon lawful eviction of the Tenants under state
and local law. Morton therefore rescinded the Withdrawal
Notices and issued Ninety Day Notices to Terminate Tenancy
(“Eviction Notices”). The Eviction Notices informed Tenants
that
[t]he grounds for termination of your tenancy are
based upon paragraph 8 of your housing assistance
payments contract and 24 CFR 982.310(d)[(1)](iv),
which allows the landlord to terminate the rental
agreement for a business or economic reason, includ-
ing but not limited to, the desire to opt-out of the
Tenant Based Section 8 Program and or the desire to
lease the unit at a higher rental rate. Prior to the ser-
vice of this notice, the landlord made a business
decision to no longer participate in the Section 8
voucher program for your unit.
14436 BARRIENTOS v. 1801-1825 MORTON LLC
Tenants filed this action in the U.S. District Court for the
Central District of California, seeking a declaratory judgment
that the Eviction Notices violated federal law and LARSO,
and a permanent injunction barring unlawful eviction of Ten-
ants. The parties stipulated to a preliminary injunction. The
district court granted summary judgment to Tenants, entered
a permanent injunction barring Morton from evicting Tenants
without complying with LARSO and the enhanced voucher
provisions, denied Morton’s motion for reconsideration, and
granted Tenants attorney’s fees. Morton timely appeals.2
II. JURISDICTION AND STANDARDS OF REVIEW
The district court exercised jurisdiction under 28 U.S.C.
§§ 1331 and 1367(a). We have jurisdiction under 28 U.S.C.
§ 1291. We review a grant of summary judgment de novo.
Lovell v. Chandler, 303 F.3d 1039, 1052 (9th Cir. 2002). We
review a grant of permanent injunctive relief for abuse of dis-
cretion, Ting v. AT&T, 319 F.3d 1126, 1134-35 (9th Cir.
2003), and an award of attorney’s fees for abuse of discretion,
Tahara v. Matson Terminals, Inc., 511 F.3d 950, 952 (9th Cir.
2007), reviewing factual findings for clear error, and legal
conclusions de novo, Ting, 319 F.3d at 1134-35; Tahara, 511
F.3d at 952.
2
Because our analysis turns on the construction of a HUD regulation,
following oral argument we invited HUD to express its position on the fol-
lowing question:
Do local eviction controls, such as the Los Angeles Rent Stabili-
zation Ordinance, L.A. Mun. Code section 151.09A, pose an
obstacle to the accomplishment and execution of the full pur-
poses and objectives of HUD’s definition of “good cause” to ter-
minate assisted tenancies as including the desire to raise rents, set
forth in 24 C.F.R. § 982.310(d)[(1)](iv)?
The United States, appearing on behalf of HUD through the U.S. Depart-
ment of Justice, filed a Brief for the United States as Amicus Curiae Sup-
porting Affirmance of the District Court’s Judgment.
BARRIENTOS v. 1801-1825 MORTON LLC 14437
III. DISCUSSION
The district court granted summary judgment to Tenants,
concluding that the Eviction Notices violated the Enhanced
Voucher Tenants’ statutory right to remain in their apartments
despite rent increases under § 1437f(t)(1)(B),3 that LARSO
and HUD are in actual conflict, but that HUD’s definition of
“good cause,” insofar as it includes the desire to raise the rent,
exceeded HUD’s statutory authority.4 We affirm summary
judgment and the entry of the permanent injunction on some-
what different grounds. See Sec. Life Ins. Co. of Am. v.
Meyling, 146 F.3d 1184, 1190 (9th Cir. 1998) (per curiam)
(“[W]e can affirm on any ground supported by the record.”).
Though we agree that the eviction violated the Enhanced
Voucher Tenants’ right to remain, we hold that LARSO is not
preempted by HUD’s “good cause” regulation because it does
not actually conflict with the federal regulation.
3
The district court had ruled that the Enhanced Voucher Tenants were
protected from eviction by § 1437f(t)(1)(B) itself, which “ensured that
assisted families could remain in tenancy, even when the owner exits the
assistance program.” Judge Wardlaw would affirm this holding, which
provides an additional layer of protection to the Enhanced Voucher Ten-
ants over that provided by LARSO. Judges O’Scannlain and Rymer would
not reach the statutory right to remain issue, because under the particular
facts of this case, LARSO precludes eviction for the purpose of rent
increases.
4
The district court’s judgment assumes that Morton intended to termi-
nate the tenancies for the sole purpose of raising the rent. In its motion for
reconsideration, Morton argued that it was also motivated by the desire to
rid itself of various section 8 compliance costs. The district court rejected
this late assertion, finding that Morton put forth no evidence of compli-
ance costs, but that in any case, a bare desire to leave the section 8 pro-
gram does not constitute “good cause.” On appeal, Morton does not
dispute that both sets of Notices were solely motivated by its desire to
raise the rent. Nor does Morton address the district court’s finding that a
bare desire to withdraw from the program cannot constitute “good cause.”
Therefore, we also assume that Morton’s only reason for eviction was the
desire to raise the rent.
14438 BARRIENTOS v. 1801-1825 MORTON LLC
A. Federal Preemption of LARSO
The district court held that LARSO actually conflicts with
HUD’s “good cause” regulation because “it takes away a right
specifically granted by the HUD regulation.” It granted sum-
mary judgment to Tenants, however, because it concluded
that HUD’s definition of “good cause”—insofar as it includes
the desire to raise the rent—was “unreasonable” and “mani-
festly contrary” to the statute, and therefore exceeded HUD’s
authority. We do not agree that LARSO and the HUD regula-
tion actually conflict. The HUD regulation does not create a
“right” to evict tenants to raise the rent that LARSO takes
away. The HUD regulation merely creates a floor of protec-
tion, which local laws may enhance. Thus, although we dis-
agree with the district court’s preemption analysis, we do
agree that LARSO controls Morton’s ability to evict Tenants
when Morton desires to raise the rent.
[1] The preemption doctrine is rooted in the Supremacy
Clause of the U.S. Constitution. U.S. Const., art. VI, cl. 2.
“[T]he purpose of Congress is the ultimate touchstone in
every preemption case.” Medtronic, Inc. v. Lohr, 518 U.S.
470, 485 (1996) (alteration and internal quotation marks omit-
ted). Morton does not suggest that Congress expressly pre-
empted state law or intended federal law exclusively to
occupy the field of lease terminations. See English v. Gen.
Elec. Co., 496 U.S. 72, 78-79 (1990). State law, however, is
also “nullified to the extent that it actually conflicts with fed-
eral law.” Fid. Fed. Sav. & Loan Ass’n v. de la Cuesta, 458
U.S. 141, 153 (1982). “Such a conflict arises when compli-
ance with both federal and state regulations is a physical
impossibility or when state law stands as an obstacle to the
accomplishment and execution of the full purposes and objec-
tives of Congress.” Id. (citation and internal quotation marks
omitted); see also Wyeth v. Levine, 129 S. Ct. 1187, 1193-94
(2009).
Along with Congress, “a federal agency acting within the
scope of its congressionally delegated authority may pre-empt
BARRIENTOS v. 1801-1825 MORTON LLC 14439
state regulation.” City of N.Y. v. FCC, 486 U.S. 57, 63-64
(1988) (internal quotation marks omitted). Thus, when “Con-
gress has entrusted an agency with the task of promulgating
regulations to carry out the purposes of a statute, . . . as part
of the pre-emption analysis we must consider whether the reg-
ulations evidence a desire to occupy a field completely.” R.J.
Reynolds Tobacco Co. v. Durham County, N.C., 479 U.S.
130, 149 (1986) (citation omitted). However, a reviewing
court does not “focus on Congress’ intent to supersede state
law” because “[a] pre-emptive regulation’s force does not
depend on express congressional authorization to displace
state law.” de la Cuesta, 458 U.S. at 154. Instead, the court
asks “whether the [federal agency] meant to pre-empt [the
state law], and, if so, whether that action is within the scope
of the [federal agency’s] delegated authority.” Id. When one
“of the responsibilities conferred on federal agencies
involve[s] a broad grant of authority to reconcile conflicting
policies,” the court must uphold the federal regulation “if the
agency’s choice to pre-empt represents a reasonable accom-
modation of conflicting policies that were committed to the
agency’s care by the statute.” City of N.Y., 486 U.S. at 64
(internal quotation marks omitted). The regulation is invalid
if “it appears from the statute or its legislative history that the
accommodation is not one that Congress would have sanc-
tioned.” Id. (internal quotation marks omitted).
“Pre-emption should not be inferred . . . simply because the
agency’s regulations are comprehensive.” R.J. Reynolds
Tobacco Co., 479 U.S. at 149. Federal regulations have “to be
sufficiently comprehensive to authorize and govern programs
in States which [have] no requirements of their own as well
as cooperatively in States with such requirements.” Hillsbor-
ough County, Fla. v. Automated Med. Labs., Inc., 471 U.S.
707, 717 (1985) (alteration and internal quotation marks omit-
ted). As the Supreme Court stated, “merely because the fed-
eral provisions were sufficiently comprehensive to meet the
need identified by Congress did not mean that States and
14440 BARRIENTOS v. 1801-1825 MORTON LLC
localities were barred from identifying additional needs or
imposing further requirements in the field.” Id.
[2] The presumption against preemption applies here.
When “Congress has legislated in a field which the States
have traditionally occupied, we start with the assumption that
the historic police powers of the States were not to be super-
seded by the Federal Act unless that was the clear and mani-
fest purpose of Congress.” Wyeth, 129 S. Ct. at 1194-95
(alterations and internal quotation marks omitted). The City of
Los Angeles has “ ‘traditionally strong interests in local rent
control.’ ” Topa Equities, Ltd. v. City of L.A., 342 F.3d 1065,
1071 (9th Cir. 2003) (quoting Kargman v. Sullivan, 552 F.2d
2, 6 (1st Cir. 1977)). Morton is required to demonstrate “a
conflict between a particular local provision and the federal
scheme, that is strong enough to overcome the presumption
that state and local regulation of [local rent control] matters
can constitutionally coexist with federal regulation.” Hillsbor-
ough County, 471 U.S. at 716; see also Geier v. Am. Honda
Motor Co., Inc., 529 U.S. 861, 885 (2000) (“[A] court should
not find pre-emption too readily in the absence of clear evi-
dence of a conflict.”).
Applying de la Cuesta, we consider whether the agency
intended to preempt the local law and whether LARSO stands
as an obstacle to the accomplishment of Congressional pur-
poses.
1. HUD Did Not Intend to Preempt Local Eviction
Controls
[3] In reaching its conclusion that “HUD never explicitly
intended to preempt state and local eviction restrictions,” the
district court found that the “central purpose” of the “ ‘good
cause’ regulation” was “to mirror the private rental market so
as to encourage owner participation.” That conclusion is sup-
ported by both the language and the legislative history of the
“good cause” regulation. When HUD prompted Congress to
BARRIENTOS v. 1801-1825 MORTON LLC 14441
eliminate the requirement of PHA approval for eviction in
1978 and 1981, it sought to make assisted tenancies as similar
to unassisted tenancies as possible. Similarly, when Congress
instituted the “other good cause” requirement in 1981, HUD
initially declined to define “good cause,” instead providing
that “[a]pplication of the statutory standards to particular
cases should be determined by the courts, normally in the
course of the eviction proceeding brought by the owner.” 47
Fed. Reg. at 33,499.
[4] When HUD did create the “good cause” definition, it
again reassured owners that it was trying to make assisted ten-
ancies “as simple as possible, with minimal demands on the
owner beyond the normal requirements of an unsubsidized
tenancy,” or as similar to the private market as possible. 49
Fed. Reg. at 12,233. It explained that “a comp[re]hensive reg-
ulatory definition of good cause . . . is neither possible nor
desirable.” Id. Thus, it emphasized that its definition consti-
tuted only “examples” of “cases that may be good cause” and
reiterated its position that “[t]he good cause category should
remain open to case by case determination by the courts.” 60
Fed. Reg. at 34,673 (emphasis added) (internal quotation
marks omitted). Nothing in this language indicates that HUD
intended to prevent certain state laws from operating in such
case-by-case determinations in state courts.
[5] It is true that no regulation expressly allows the opera-
tion of local eviction controls on assisted tenancies, while a
HUD regulation expressly subjects section 8 rent reasonable-
ness determinations to local rent control. See 24 C.F.R.
§ 982.509. That regulation, however, is a specific directive to
local PHAs in setting reasonable rent. The lack of a similar
express directive to state courts to apply local eviction con-
trols in determining whether good cause exists to evict
assisted tenants, aside from the questionable permissibility of
such a directive, does not itself suggest that state courts
should reject local eviction controls. In fact, the preemption
of LARSO would nullify 24 C.F.R. § 982.509, because an
14442 BARRIENTOS v. 1801-1825 MORTON LLC
owner would be able to escape rent control by evicting tenants
in order to raise their rent. In other words, as Tenants persua-
sively argue, the preemption of local eviction controls by
HUD’s “good cause” regulation would lead to absurd results
in a vacancy decontrol jurisdiction like California, because it
would make assisted tenants special victims of eviction by
landlords desiring to take advantage of vacancy decontrol to
raise rents. We refuse to construe “[l]egislative enactments
. . . as establishing statutory schemes that are illogical, unjust,
or capricious.” Bechtel Constr., Inc. v. United Bhd. of Car-
penters, 812 F.2d 1220, 1225 (9th Cir. 1987). Thus, the dis-
trict court correctly held that HUD did not specifically intend
to preempt local eviction laws with its “good cause” regula-
tion.
2. The HUD Regulation and LARSO Do Not Actually
Conflict
We disagree with the district court’s conclusion that the
HUD regulation and LARSO actually conflict. The HUD reg-
ulation does not grant a right to terminate a tenancy based on
a desire to increase rents. Nor does LARSO otherwise present
an obstacle to the accomplishment of federal objectives.5
[6] The goals of the HUD regulation and LARSO, as
expressed in the purposes of each governing statute, are the
same—to increase the availability and affordability of hous-
ing. Compare 42 U.S.C. § 1437f(a), with L.A. Mun. Code
§ 151.01. Morton argues that HUD’s goal in defining “good
cause” was to encourage owner participation in the section 8
program, an objective not found in LARSO.6 This argument
5
Morton does not argue on appeal that it is physically impossible to
comply with both the HUD regulation and LARSO.
6
The district court agreed with Morton that “when enacting LARSO, the
City had no concern for encouraging owner participation in the section 8
program.” Though we need not resolve this question because we hold that
the primary goals of the HUD regulation and LARSO are compatible, we
note that nothing in the record suggests that the City of Los Angeles was
unaware of concerns regarding the availability of section 8 housing.
BARRIENTOS v. 1801-1825 MORTON LLC 14443
is illogical, however, as HUD and Congress have deemed
owner participation an important means to the ultimate end of
providing housing, but not a goal in itself. Thus, while HUD
may have listed examples of “good cause” in order “to pro-
vide explicit regulatory assurance to prospective section 8
owners that legitimate owner concerns will be recognized as
grounds for termination of tenancy,” 49 Fed. Reg. at 12,233,
the fact remains that the same regulation specified that “good
cause is determined in local landlord tenant courts,” id. at
12,234. Any agency assurance that it considers the desire to
raise the rent as “good cause” to terminate a lease is, by the
very terms of the regulation, necessarily subject to case-by-
case evaluation by state courts, which are also required to
apply local law.
[7] As evidenced by a variety of legislative enactments,
such as the now-repealed provision for PHA approval of evic-
tions and the “good cause” requirement at issue here, Con-
gress and HUD intended to provide assisted tenants with more
protections than unassisted tenants, not less. Congress only
rejected the application of substantive state and local law to
section 8 lease terminations when asked to eliminate federal
controls over such terminations altogether. Compare S. Rep.
97-139 (1981), reprinted in 1981 U.S.C.C.A.N. 396, 552,
with H.R. Rep. 97-208, at 694-95 (1981) (Conf. Rep.),
reprinted in 1981 U.S.C.C.A.N. 1010, 1053-54. Thus, it
refused to allow substantive state and local law to supplant
wholly federal termination standards. By enacting the federal
good cause requirement, it desired to maintain a uniform fed-
eral floor below which protections for tenants could not drop,
not a ceiling above which they could not rise. Importantly,
Congress and HUD never explicitly rejected the application of
more protective local standards to assisted tenants, and, in
certain cases, expressly allowed for it. See, e.g., 42 U.S.C.
§ 1437f(o)(7)(D)(vi) (“[N]othing in this section shall be con-
strued to supersede any provision of any Federal, State, or
local law that provides greater protection than this section for
victims of domestic violence . . . .”); 24 C.F.R. § 982.53(d)
14444 BARRIENTOS v. 1801-1825 MORTON LLC
(“Nothing in part 982 is intended to pre-empt operation of
State and local laws that prohibit discrimination against a Sec-
tion 8 voucher-holder because of status as a Section 8
voucher-holder.”).
In determining whether a state law presents an “obstacle”
to the full implementation of a federal law, however, “it is not
enough to say that the ultimate goal of both federal and state
law” is the same. Int’l Paper Co. v. Ouellette, 479 U.S. 481,
494 (1987). “A state law also is pre-empted if it interferes
with the methods by which the federal statute was designed
to reach this goal.” Id.
For example, in de la Cuesta, a federal regulation permitted
the inclusion of due-on-sale clauses in mortgages (allowing
lenders to make the entire loan immediately payable upon
transfer of property), and expressly stated that it preempted
state laws to the contrary. 458 U.S. at 146-47. California
courts had created a state law doctrine to the contrary. Id. at
149. In addition to concluding that the federal regulation
expressly preempted the state doctrine, the Supreme Court
found that the two actually conflicted. Id. at 155. It held that
while compliance with both was not physically impossible
because the federal regulation only permitted, and did not
require, the conduct that the state doctrine forbade, the state
doctrine presented an obstacle to the federal objective because
the state courts “have deprived the [regulated party] of the
‘flexibility’ given it by the” federal regulations. Id.
By contrast, in Chevron U.S.A., Inc. v. Hammond, 726 F.2d
483 (9th Cir. 1984), owners of oil tankers challenged a state
regulation forbidding the discharge of any ballast water—
clean or dirty—near the state’s shores, claiming that it was
preempted by federal agency regulations that expressly per-
mitted the discharge of clean ballast water close to shore. Id.
at 485-86. We found no actual conflict because the goals of
the two regulations were the same, id. at 496, and because it
was not physically impossible to comply with both, id. at 499.
 BARRIENTOS v. 1801-1825 MORTON LLC 14445
We recognized that “the state law prohibits acts that the fed-
eral regulations allow but do not require.” Id. at 498. We fur-
ther noted that “[a] finding of preemption is particularly
inappropriate when the state is regulating conduct permitted
by federal regulation, but only as an exception to a broad fed-
eral prohibition.” Id. (citing Exxon Corp. v. Governor of Md.,
437 U.S. 117, 132 (1978)). We then distinguished de la
Cuesta, on the ground that in Hammond, “the state is merely
eliminating one exception to a general federal prohibition,
rather than asserting authority over an area in direct conflict
with overriding federal policy.” Id. at 498 n.19.
The district court reasoned “that this case presents a ques-
tion more like the one in de la Cuesta than in Hammond,”
because, as in de la Cuesta, where the state deprived owners
of the flexibility in choosing whether to utilize the due-on-
sale clauses, LARSO deprived owners of the flexibility in
choosing whether to terminate tenants in order to increase the
rent. de la Cuesta and Hammond, however, suggest the oppo-
site reading. The federal agency in Hammond set forth an
exception (clean discharge permissible) to a federal prohibi-
tion (no discharge), that the state law took away. Similarly,
HUD set forth an exception (termination to increase the rent
permissible) to a federal prohibition (no termination without
good cause), that LARSO took away. On this reading, this
case is more like Hammond and less like de la Cuesta, in
which the federal agency permitted an action (inclusion of
due-on-sale clauses) that the state forbade. In addition, the de
la Cuesta Court relied heavily on the “unambiguous” intent of
the federal agency to preempt contrary state law. 458 U.S. at
154-59; see also id. at 158 (“The preamble unequivocally
expresses the Board’s determination to displace state law.”).
That sort of unambiguous intent, as explained above, is not
present here. Further, the district court’s finding of conflict
was based on its conclusion that “LARSO takes away a right
specifically granted by the HUD eviction regulations.” How-
ever, as in Hammond, where it was “difficult to argue con-
vincingly that the Congress or the Coast Guard intended to
14446 BARRIENTOS v. 1801-1825 MORTON LLC
create a federal right to discharge ballast containing oil into
a state’s coastal waters,” 726 F.2d at 499, it is similarly diffi-
cult to argue, given the statutory context and legislative and
administrative history, that Congress or HUD intended to
create a “federal right” to terminate assisted tenants in order
to raise the rent on their units.
[8] Moreover, LARSO conflict preemption arguments have
failed in two previous federal cases. In Topa Equities, owners
challenged the 1990 Amendments to LARSO, which set the
maximum rent subsequent to an owner’s exit from the federal
program at the amount last charged under the federal pro-
gram, thereby preventing vacancy decontrol and prohibiting
owners from raising the rent to market level. 342 F.3d at
1068-69. As here, owners argued that LARSO is conflict-
preempted by federal law because it impedes federal objec-
tives by disincentivizing private owner participation in section
8 housing. We found that LARSO was not actually preempted
because “[n]othing in the HUD regulations purports to limit
states from enacting their own rent control laws of general
applicability.” Id. at 1072. In concluding that “ ‘federal legis-
lation creating the network of subsidized housing laws is
superimposed upon and consciously interdependent with the
substructure of local law relating to housing,’ ” we placed
special emphasis on the fact that “Congress never indicated—
in either the text or legislative history of the [National Hous-
ing Act of 1934, ch. 847, 48 Stat. 1246 (codified as amended
at 12 U.S.C. §§ 1701-49)] or in any ancillary statute—that it
intended to abrogate state rent control laws.” Topa Equities,
342 F.3d at 1072 (quoting Kargman, 552 F.2d at 11). Thus,
we held that “LARSO is a generally applicable rent control
ordinance that does not unduly interfere with federal housing
programs. It is not expressly preempted by federal law, nor is
it preempted on conflict grounds.”7 Id. at 1067.
7
In a case factually distinguishable from ours (it did not concern a gen-
erally applicable state or local law), the Eighth Circuit held that “[a]ny
BARRIENTOS v. 1801-1825 MORTON LLC 14447
In Independence Park Apartments v. United States, 449
F.3d 1235 (Fed. Cir. 2006), owners successfully argued that
the government’s temporary withdrawal of their right to pre-
pay section 236 loans constituted a regulatory taking and were
awarded damages. Id. at 1238. The government argued that
the damages award should be reduced because after exiting
the federal program, owners would not be able to raise the
rent due to LARSO, and landlords responded that LARSO
was inapplicable because it was conflict-preempted by Con-
gress’s desire to incentivize private development of low-
income housing. Id. at 1243. The Federal Circuit rejected the
owners’ preemption argument. Applying the presumption
against preemption of traditionally local laws, it held that the
government made no guarantees about the effect of local laws
on profitability and so did not intend to preempt the operation
of more protective local laws. Id. at 1243-44. “The National
Housing Act provided certain benefits and imposed certain
burdens on owners of subsidized low-income housing. It did
not, however, provide them with any protection against the
state statute that forces owners to remain in a federally subsidized program
from which Congress has authorized withdrawal would eviscerate the
method Congress chose to implement the federal low-income housing
scheme.” Forest Park II v. Hadley, 336 F.3d 724, 733-34 (8th Cir. 2003).
In Forest Park II, owners who wished to prepay their section 236 mort-
gage as expressly permitted by the 1999 Veteran Affairs & HUD Appro-
priations Act, Pub. L. No. 105-276, § 219(b)(3), 112 Stat. 2461, 2488
(1998), challenged additional procedural requirements embodied in state
statutes applicable to landlords of federally subsidized rental housing. The
Eighth Circuit held that the state statutes were expressly and impliedly
preempted by federal law permitting repayment, reasoning that the “fur-
ther requirement imposed by a state statute would directly interfere with
Congress’s original intent of offering prepayment as an incentive.” Forest
Park II, 336 F.3d at 733. Here, however, LARSO does not directly inter-
fere with a federal agency regulation, because HUD explicitly left the
“good cause” determination up to state courts for case-by-case analysis,
and LARSO simply provides the relevant local law that the courts apply
in eviction proceedings. Furthermore, while the state laws at issue in For-
est Park II were aimed specifically at participants in federal housing pro-
grams, LARSO is a background law of general applicability.
14448 BARRIENTOS v. 1801-1825 MORTON LLC
application of a variety of state and local laws that could
affect the profitability of their investments.” Id. at 1244.
[9] Although Topa Equities and Independence Park Apart-
ments concerned a different federal housing statute, it follows
from the reasoning in those decisions that the operation of
LARSO in conjunction with federal housing laws does not
impede federal objectives.
3. The Litigation Position of HUD and Recent HUD
Regulations Support a Finding of Nonpreemption
[10] Responding to our invitation to HUD to express its
view on whether LARSO’s eviction controls actually conflict
with 24 C.F.R. § 982.310(d)(1)(iv), the United States informs
us that “LARSO’s eviction controls do not pose an obstacle
to the accomplishment and execution of the full purposes and
objectives of HUD’s regulation providing that ‘other good
cause’ for terminating a Section 8 tenancy ‘may’—but does
not necessarily—include a landlord’s desire to raise the rent.”
In support of its position, the United States first notes that the
statutory language and its own regulations expressly contem-
plate the interdependence of federal assisted housing law and
state and local housing law: 42 U.S.C. § 1437f(o)(7)(B)(ii)(I)
provides that the lease must contain terms that are “consistent
with State and local law”; § 1437f(o)(7)(E) mandates that the
HAP contract “shall provide” that “any relief [from termina-
tion] shall be consistent with applicable State and local law”;
24 C.F.R. § 982.308(c) allows PHA the right to “decline to
approve the tenancy if the PHA determines that the lease does
not comply with State or local law”; and § 982.310(e)(2)(i)
requires section 8 owners to use the eviction notice “used
under State or local law.” Second, the United States highlights
the use of “may” in 24 C.F.R. § 982.310(d)(1), which pro-
vides that “ ‘[o]ther good cause’ for termination of tenancy by
the owner may include, but is not limited to, any of the fol-
lowing examples.” It notes that “ ‘[m]ay’ is permissive and
connotes discretion, absent clear indication to the contrary.”
BARRIENTOS v. 1801-1825 MORTON LLC 14449
Brief for the United States as Amicus Curiae supporting affir-
mance of the district court (citing Fernandez v. Brock, 840
F.2d 622, 632 (9th Cir. 1988)). Third, the United States
argues that “[n]either the wording nor the intent of [24 C.F.R.
§ 982.310] gives a landlord an unqualified ‘right’ to terminate
a Section 8 tenancy because he wants to raise the rent,” as the
regulation utilizes “general terms” and intentionally leaves the
determination of “good cause” to the courts “on a case-by-
case basis.” Finally, the United States assures us that “HUD
has never interpreted 24 C.F.R. § 982.310 as prohibiting state
and local governments from providing additional protection
from eviction to tenants.”
Moreover, a recently published HUD guidance document,
Notice PIH 2009-18 (HA), State and Local Law Applicability
to Lease Terminations in the Housing Choice Voucher (HCV)
Program, § 3 (June 22, 2009), mirrors the litigation position
expressed in the amicus brief of the United States. It states
that “while good cause ‘may include’ a business or economic
reason (e.g., [when] there is no State or local law prohibiting
termination of tenancy for such cause), in other circumstances
it may not include a business or economic reason.” Id. “If a
State or local law prohibits the termination o[f] tenancy for a
business or economic reason such as a desire to lease the unit
at a higher rental, the[n] that specific ground[ ] for termina-
tion of the tenancy does not constitute ‘other good cause’
under 24 CFR [§ ] 982.310(d) in that particular instance.” Id.
In conclusion, HUD dictates that “nothing in 24 CFR [§ ]
982.310(d)(1) pre-empts any applicable State or local laws
that restrict or prohibit the termination of tenancy. This
applies to all HCV vouchers.” Id.
[11] The position of the United States is entitled to defer-
ence, as is HUD’s most recent guidance document. “[W]hen
an agency invokes its authority to issue regulations, which
then interpret ambiguous statutory terms, the courts defer to
its reasonable interpretations.” Fed. Express Corp. v. Holo-
wecki, 128 S. Ct. 1147, 1154 (2008). “[T]he agency is entitled
14450 BARRIENTOS v. 1801-1825 MORTON LLC
to further deference when it adopts a reasonable interpretation
of regulations it has put in force.” Id. at 1155 (citing Auer v.
Robbins, 519 U.S. 452, 461 (1997) (deferring to the agency’s
position unless it is “plainly erroneous or inconsistent with the
regulation” (internal quotation marks omitted))). Further, an
agency’s litigation position in an amicus brief is entitled to
deference if there is “no reason to suspect that the interpreta-
tion does not reflect the agency’s fair and considered judg-
ment on the matter.” Auer, 519 U.S. at 462. And, as explained
above, the interpretive policy statements are at least “entitled
to a measure of respect under the less deferential Skidmore
standard.” Fed. Express Corp., 128 S. Ct. at 1156 (internal
quotation marks omitted). Of course, we do not defer “to an
agency’s conclusion that state law is pre-empted. Rather, we
have attended to an agency’s explanation of how state law
affects the regulatory scheme.” Wyeth, 129 S. Ct. at 1201.
Agencies “have a unique understanding of the statutes they
administer and an attendant ability to make informed determi-
nations about how state requirements may pose an obstacle to
the accomplishment and execution of the full purposes and
objectives of Congress.” Id. (internal quotation marks omit-
ted); see also Sprietsma v. Mercury Marine, 537 U.S. 51, 68
(2002); Geier, 529 U.S. at 883. Moreover, while “[t]he weight
we accord the agency’s explanation of state law’s impact on
the federal scheme depends on its thoroughness, consistency,
and persuasiveness,” Wyeth, 129 S. Ct. at 1201, HUD has
amply demonstrated its thoughtful consideration of, and its
commitment to, the principle that local eviction control laws
that are more protective of tenants are not preempted by its
own “good cause” regulation.
[12] Our independent analysis of the statutory language and
legislative history, the persuasive reasoning of prior LARSO
decisions by us and the Federal Circuit, the litigation position
of the United States, and HUD’s most recent publication lead
us to conclude that the HUD regulation and LARSO do not
actually conflict. LARSO does not impede the federal objec-
tive of providing affordable housing to low-income families.
BARRIENTOS v. 1801-1825 MORTON LLC 14451
LARSO, therefore, is not preempted by 24 C.F.R.
§ 982.310(d)(1)(iv) to the extent the HUD regulation permits
eviction in order to obtain a higher rental, in the absence of
contrary state or local law.8
B. Injunction Issued by the District Court
The district court granted summary judgment to Tenants on
the ground that although the HUD regulation and LARSO
actually conflict, HUD’s regulation exceeded the federal
agency’s statutory authority. Because we hold there is no
actual conflict between LARSO and the HUD regulation, we
do not reach the question of whether promulgation of the reg-
ulation was within HUD’s authority.9 Though we disagree
with the district court’s reasoning, because we may affirm the
district court’s judgment “on any ground supported by the
record,” Sec. Life Ins. Co. of Am., 146 F.3d at 1190, we affirm
the grant of summary judgment and the permanent injunction
entered by the district court.
Morton also challenges the scope of the injunction, arguing
that it must be limited to proscribing it from terminating Ten-
ants in order to raise the rent. The district court enjoined “De-
fendant and any of its agents from failing to allow the
Enhanced Voucher Plaintiffs to remain at Morton Gardens
with enhanced voucher assistance,” and “from evicting or ter-
minating the tenancy or lease of all Plaintiffs without comply-
8
Amicus California Apartments Association argues that LARSO is pre-
empted by California Civil Code § 1954.535, an issue not raised by Mor-
ton on appeal. Morton has thus waived the issue, see United States v.
Gementera, 379 F.3d 596, 607-08 (9th Cir. 2004), and we typically “do
not consider on appeal an issue raised only by an amicus.” Engine Mfrs.
Ass’n v. S. Coast Air Quality Mgmt. Dist., 498 F.3d 1031, 1043 (9th Cir.
2007) (internal quotation marks omitted). Accordingly, we do not address
Amicus’s argument on the merits.
9
Because we do not affirm the district court’s invalidation of HUD’s
regulation, we need not decide whether the district court’s decision on that
ground should be applied only prospectively.
14452 BARRIENTOS v. 1801-1825 MORTON LLC
ing with all the requirements of [LARSO].” Tenants respond
that Morton did not object to the scope of the injunction
before the district court and, therefore, has waived the objec-
tion. See Ritchie v. United States, 451 F.3d 1019, 1026 n.12
(9th Cir. 2006) (concluding that failure to raise an issue
before the district court waives it on appeal when the issue
involves an exercise of the district court’s discretion and the
district court “might have been able to deal with the prob-
lem”); see also Conn. Gen. Life Ins. Co. v. New Images of
Beverly Hills, 321 F.3d 878, 883 (9th Cir. 2003) (“This issue
is . . . raised for the first time on appeal, and we cannot enter-
tain the argument because further factual development would
be required.”). We agree with Tenants that Morton waived the
objection to the scope of relief by failing to raise it before the
district court. Accordingly, we decline to address it.
C. Attorney’s Fees
[13] The district court awarded Tenants attorney’s fees in
the amount of $180,029.50, based on an attorney’s fees provi-
sion contained in their leases. California Civil Code § 1717(a)
authorizes reasonable attorney’s fees “[i]n any action on a
contract, where the contract specifically provides that attor-
ney’s fees and costs, which are incurred to enforce the con-
tract, shall be awarded either to one of the parties or to the
prevailing party.” The provision is interpreted liberally. See
Lafarge Conseils Et Etudes, S.A. v. Kaiser Cement & Gypsum
Corp., 791 F.2d 1334, 1340 n.16 (9th Cir. 1986).
[14] Morton contends that Tenants’ action is not an “action
on a contract” because Tenants sued to enforce their rights
under federal housing law and LARSO. We disagree. In
Lafarge, we awarded attorney’s fees to the plaintiff for oppos-
ing the defendant’s motion to vacate an arbitration award,
which was based on a contract. We held that “the underlying
contract between the parties is not collateral to the proceed-
ings but plays an integral part in defining the rights of the par-
ties.” Id. at 1340. By contrast, in In re Johnson, 756 F.2d 738
 BARRIENTOS v. 1801-1825 MORTON LLC 14453
(9th Cir. 1985), relied upon by Morton, we refused to award
debtors attorney’s fees for opposing the creditors’ unsuccess-
ful motion for relief from an automatic stay. We held that
because the “[s]tay litigation is limited to issues of the lack of
adequate protection, the debtor’s equity in the property, and
the necessity of the property to an effective reorganization,”
“[t]he validity of the . . . contract underlying the claim is not
litigated during the hearing.” Id. at 740. Here, Tenants’ lease
contracts are not collateral to the litigation because they incor-
porate and define the rights and obligations of Tenants and
Morton, the applicability of relevant federal and state law, and
the role of federal and state actors. Thus, Tenants’ action for
a declaratory judgment regarding their right to remain in their
apartments is properly considered an action “on a contract.”
As the district court noted, Tenants’ “complaint was one to
enforce their rights as tenants under the lease.”
[15] Morton further argues that the district court erred in
awarding fees to all Tenants because there were two different
fee provisions in the leases, and certain Tenants failed to pro-
vide copies of their leases. The district court correctly found
that “[t]he 17 leases offered into evidence by Plaintiffs are
sufficient to establish entitlement to fees for all Plaintiffs.”10
The merits issues concerning all Tenants were “so factually
interrelated that it would have been impossible to separate the
activities into compensable and noncompensable time units.”
Cruz v. Ayromloo, 66 Cal. Rptr. 3d 725, 730 (Ct. App. 2007)
(alteration and internal quotation marks omitted). Considering
that there is no meaningful difference between the relevant
portions of the two fee provisions on record, and the lack of
10
Fifteen Tenants submitted leases providing that “[i]f any legal action
or proceeding be brought by either party to enforce any part of this Agree-
ment, the prevailing party shall recover . . . reasonable attorney fees and
costs.” Two Tenants submitted leases providing that “[i]f any legal action
or proceeding be brought by either party to enforce any part of this Agree-
ment, the prevailing party shall recover . . . reasonable costs, including
attorney’s fees.” Five Tenants did not submit their leases because they no
longer have copies of them, and Morton refused to provide the originals.
14454 BARRIENTOS v. 1801-1825 MORTON LLC
evidence that the five leases not in evidence contained materi-
ally different fee provisions, we affirm the district court’s
conclusion.
[16] Morton also argues that the district court abused its
discretion by failing to hold an evidentiary hearing on the rea-
sonableness of fees. The district court properly concluded that
Morton, without reason or justification, failed to submit any
evidence opposing the Tenants’ contentions of reasonable-
ness, and that there was no reason to grant Morton another
opportunity to do so. This does not constitute an abuse of dis-
cretion. See Sablan v. Dep’t of Fin. of N. Mar. I., 856 F.2d
1317, 1322-23 (9th Cir. 1988).
[17] Morton further asserts that the district court should not
have considered the leases because they were not entered at
the summary judgment stage and proven as damages. Federal
Rule of Civil Procedure 54(d)(2)(A) requires that “[a] claim
for attorney’s fees . . . must be made by motion unless the
substantive law requires those fees to be proved at trial as an
element of damages.” The district court correctly found that
California substantive law did not so require, a conclusion
evidenced by California Civil Code § 1717(a) itself, which
provides that “[r]easonable attorney’s fees shall be fixed by
the court, and shall be an element of the costs of suit.” There-
fore, it was not error for the district court to consider as evi-
dence leases entered for the first time on a post-judgment
motion for attorney’s fees and costs.
Finally, Morton argues that the Legal Aid Foundation of
Los Angeles (“LAFLA”) is not entitled to attorney’s fees
because of a statutory prohibition on such fees, see 45 C.F.R.
§ 1642.3, another argument it failed to raise before the district
court. Because, as a general rule, we do “not consider an issue
not passed upon below,” Dodd v. Hood River County, 59 F.3d
852, 863 (9th Cir. 1995) (internal quotation marks omitted),
we decline to consider this challenge and affirm the district
court’s award of fees to LAFLA.
BARRIENTOS v. 1801-1825 MORTON LLC 14455
IV. CONCLUSION
We affirm the district court’s grant of summary judgment
to Tenants. The eviction notices are invalid for failure to com-
ply with LARSO. LARSO is not preempted by HUD’s “good
cause” regulation because HUD did not intend to preempt
local eviction controls when it enacted 24 C.F.R.
§ 982.310(d)(1)(iv) and LARSO does not pose any obstacle to
the accomplishment of HUD’s objectives.
We affirm the entry of the permanent injunction and the
award of attorney’s fees.
AFFIRMED.