Apartment Ass'n of Greater L.A v. City of Los Angeles

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS AUG 16 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
APARTMENT OF ASSOCIATION OF No. 21-55623
GREATER LOS ANGELES, in its
representative capacity on behalf of its D.C. No.
association members; et al., 2:20-cv-04479-ODW-JEM
Plaintiffs-Appellants,
MEMORANDUM*
v.
CITY OF LOS ANGELES, a municipal
corporation; DOES, 1 through 10 inclusive,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Otis D. Wright II, District Judge, Presiding
Argued and Submitted April 4, 2022
Pasadena, California
Before: SCHROEDER, S.R. THOMAS, and BEA, Circuit Judges.
Two trade organizations and a member from each—Apartment Association
of Greater Los Angeles, City of Los Angeles AIHM Hotel/Motel Association,
Balubhai Patel, and Harold Greenberg (collectively, “Plaintiffs”)—brought a civil
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
rights action pursuant to 42 U.S.C. § 1983 against the City of Los Angeles (“LA”
or the “City”), which challenged the constitutionality of LA’s Municipal Ordinance
No. 182986 (the “Ordinance”). The district court dismissed Plaintiffs’ first
amended complaint with prejudice. We have jurisdiction under 28 U.S.C. § 1291and affirm, except that we vacate the district court’s dismissal of Plaintiffs’ Fourth
Amendment claim with prejudice and direct the district court to dismiss that claim
for lack of Article III standing without prejudice.
I.
Plaintiffs allege that the Ordinance requires commercial establishments and
multifamily dwellings to subscribe to and pay for waste collection services;
provides that the City may award exclusive franchise agreements for the provision
of waste collection services to commercial establishments and multifamily
buildings; and makes it unlawful for anyone to provide collection services to
commercial establishments and multifamily dwellings unless that person has a
written franchise agreement with the City.1, 2
1
Because the parties are familiar with the facts of this case, we do not recite
them here unless necessary to provide context for our ruling.
2
We grant the City’s motion for judicial notice of a contract between the
City of Los Angeles and Arakelian Enterprises concerning disposal services (Dk.
No. 22). See Fed. R. Evid. 201; Disabled Rts. Action Comm. v. Las Vegas Events,
Inc., 375 F.3d 861, 866 n.1 (9th Cir. 2004) (taking judicial notice of a contract
between a state entity and private party).
2
A.
The district court properly dismissed Plaintiffs’ claim that the Ordinance
violated the Fourth Amendment’s prohibition on unreasonable searches because
Plaintiffs failed to allege facts sufficient to establish Article III standing.
Plaintiffs’ Fourth Amendment claim was predicated on a “show-your-receipt”
requirement that the Ordinance added to the Los Angeles Municipal Code
(“LAMC”):
[T]he manager or person in charge of, or in control of, any solid waste
of any residential premises or commercial establishment shall furnish
written proof, whether in the form of contracts or receipts, to any
appropriate municipal authority on request that said premises maintains
collection services that collects solid waste generated from said
premises in a manner in keeping with current health regulations and in
compliance with the requirements of this Article and other provisions
of the Los Angeles Municipal Code.
LAMC § 66.17.1.
“An ‘injury in fact’ as needed for Article III standing must be ‘(a) concrete
and particularized, and (b) actual or imminent, not conjectural or hypothetical.’”
Skyline Wesleyan Church v. Cal. Dep’t of Managed Health Care, 968 F.3d 738,
747 (9th Cir. 2020) (citation omitted). Where, as here, Plaintiffs seek to challenge
a policy that has not yet been enforced against them, Plaintiffs must establish a
“genuine threat of imminent prosecution.” Thomas v. Anchorage Equal Rts.
Comm’n, 220 F.3d 1134, 1139 (9th Cir. 2000) (citation omitted); see also Unified
Data Servs., LLC v. Fed. Trade Comm’n, 39 F.4th 1200, 1210 (9th Cir. 2022).
3
“[N]either the mere existence of a proscriptive statute nor a generalized threat of
prosecution satisfies the ‘case or controversy’ requirement.” Thomas, 220 F.3d at
1139 (citation omitted). “In evaluating the genuineness of a claimed threat of
prosecution, we look to [1] whether the plaintiffs have articulated a ‘concrete plan’
to violate the law in question, [2] whether the prosecuting authorities have
communicated a specific warning or threat to initiate proceedings, and [3] the
history of past prosecution or enforcement under the challenged statute.” Id.
(citation omitted).
Plaintiffs’ operative complaint falls far short of alleging a genuine threat of
imminent prosecution. Plaintiffs allege that because they “are subject to the
ordinance,” they would be “required to furnish written proof . . . to the City upon
request.” Plaintiffs also allege that they “are subject to [LAMC] section 11.00[,]
which imposes severe criminal and civil penalties for anyone who violates
provisions of the LAMC.” But Plaintiffs do not allege that any “municipal
authority” has ever “request[ed]” that Plaintiffs or any of their members “furnish
written proof” of compliance with the Ordinance. LAMC § 66.17.1. Plaintiffs
also fail to allege that the “show-your-receipt” requirement has ever been enforced
against anyone (or has ever been threatened to be enforced, or that anyone has ever
been warned about the possibility of enforcement). Plaintiffs do not even allege
that, if written proof were requested by an “appropriate municipal authority,” they
4
would refuse to “furnish” it.3
B.
The district court properly dismissed Plaintiffs’ due process claim. Plaintiffs
argue that “[t]he failure of the ordinance to provide any hearing process in
demanding records before imposing civil or criminal penalties under the ordinance
. . . violates fundamental procedural due process principles” under the familiar
three-part balancing test of Matthews v. Eldridge, 424 U.S. 319 (1976). But
Plaintiffs have not alleged that any civil or criminal penalties have been imposed
against them or that any authority has ever demanded records from them. Thus,
for the same reasons that Plaintiffs do not have standing to bring their Fourth
Amendment challenge, they do not have standing to argue that their due process
rights have been violated.4
3
Plaintiffs rely on City of Los Angeles v. Patel, 576 U.S. 409 (2015), to
argue that they “have standing to challenge the search scheme under the
Ordinance.” But Article III standing was not at issue in that case. Unlike here, the
parties in Patel “stipulated that [the plaintiffs] have been subjected to mandatory
record inspections under the ordinance without consent or a warrant.” Id. at 413–
14.
4
The district court found that “Plaintiffs’ procedural due process claim is
somewhat unclear” and considered two theories that Plaintiffs might have meant to
allege: (1) “that they should have been given notice and a hearing before the
Ordinance was enacted,” and (2) “that they should be given notice and a hearing
before having to provide evidence of compliance with the Ordinance” (or facing a
penalty for failing to do so). We construe Plaintiffs’ opening brief as advancing
the second theory. To the extent Plaintiffs meant to challenge the district court’s
dismissal of their due process claim under the first theory, we agree with the
5
C.
The district court properly dismissed Plaintiffs’ taking claim brought under
the Fifth and Fourteenth Amendments. First, Plaintiffs have failed to allege facts
sufficient to state a claim that the Ordinance results in a physical invasion of their
property. Plaintiffs allege that the amount they pay third-party waste collection
services has increased following the passage of the Ordinance. But Plaintiffs do
not allege that the Ordinance causes money to be “transferred from the [Plaintiffs]
to the [City].” See Horne v. Dep’t of Agric., 576 U.S. 350, 361 (2015).
Second, Plaintiffs have failed to allege facts sufficient to state a regulatory
taking claim under Penn Central Transportation Co. v. City of New York, 438 U.S.
104 (1978). “Penn Central instructs us to consider [1] the regulation’s economic
impact on the claimant, [2] the extent to which the regulation interferes with
distinct investment-backed expectations, and [3] the character of the government
action.” Colony Cove Props., LLC v. City of Carson, 888 F.3d 445, 450 (9th Cir.
2018) (citation and internal quotation marks omitted). Plaintiffs allege that due to
the Ordinance their trash hauling expenses have increased 200–400% as compared
to their expenses before the adoption of the Ordinance. But an ordinance that
results merely in the doubling or quadrupling of trash hauling expenses associated
district court’s dismissal of that claim on the merits with prejudice for the reasons
it stated.
6
with ownership of real property does not constitute a regulatory taking. See id. at
451 (“[D]iminution in property value because of governmental regulation ranging
from 75% to 92.5% does not constitute a taking.”). The district court correctly
reasoned that those who buy into ownership of commercial buildings or multi-
family residences cannot reasonably expect never to be subject to regulation
regarding waste disposal. See Hybud Equip. Corp. v. City of Akron, Ohio, 654
F.2d 1187, 1192 (6th Cir. 1981) (“Courts in literally hundreds of reported cases
have upheld the authority of local governments to monopolize and control local
garbage collection by eliminating or restraining competition among private
collectors.”), judgment vacated on other grounds, 455 U.S. 931 (1982).
D.
The district court properly dismissed Plaintiffs’ Equal Protection Clause
claim. Plaintiffs argue that the Ordinance violates the Equal Protection Clause
because the Ordinance denies the owners of multi-unit residential buildings and
commercial establishments the “right to contract in the open marketplace” for solid
waste collective services, but “[t]his barrier . . . does not apply to single family
barriers [sic] under the ordinance under §66.03b.”
But “[s]ocial and economic legislation . . . that does not employ suspect
classifications or impinge on fundamental rights must be upheld against equal
protection attack when the legislative means are rationally related to a legitimate
7
governmental purpose.” Hodel v. Indiana, 452 U.S. 314, 331 (1981). Plaintiffs
have provided no authority for the proposition that owners of multi-unit residential
buildings and commercial establishments are members of a suspect class or that the
Ordinance impinges a fundamental right. The district court correctly concluded
that “the Ordinance’s classification easily passes the rational basis standard of
review.” As the Ordinance states at § 66.33, the Ordinance seeks to ensure that
solid waste is “transported and processed in a manner that reduces environmental
and social impacts on the City” and the Ordinance imposes requirements
specifically on commercial and multifamily buildings because those buildings
“‘produce most of the City’s solid waste,’ and ‘a significant amount [of
commercial and multifamily solid waste . . . , including recyclables and organics,]
is going to landfills, resulting in unnecessary greenhouse gas emissions.’”
II.
“We review for abuse of discretion a district court’s decision to dismiss with
prejudice.” Missouri ex rel. Koster v. Harris, 847 F.3d 646, 656 (9th Cir. 2017)
(citation omitted). “In general, dismissal for lack of subject matter jurisdiction is
without prejudice” because “‘the merits have not been considered’ before
dismissal.” Id. (quoting Cooper v. Ramos, 704 F.3d 772, 777 (9th Cir. 2012)); see
also Fleck & Assocs., Inc. v. City of Phoenix, 471 F.3d 1100, 1106–07 (9th Cir.
2006) (instructing the district court to dismiss a claim for lack of standing without
7
prejudice). “[D]ismissal for lack of standing is a dismissal for lack of subject-
matter jurisdiction.” Hoffmann v. Pulido, 928 F.3d 1147, 1152 (9th Cir. 2019).
Moreover, ordinarily “[c]laims should be dismissed with prejudice only when it is
clear that no amendment could cure a defect in the complaint.” City of Oakland v.
Hotels.com LP, 572 F.3d 958, 962 (9th Cir. 2009).
The district court dismissed Plaintiffs’ Fourth Amendment claim “on the
merits and with prejudice” because Plaintiffs failed to allege facts sufficient to
establish Article III standing and because it determined that Plaintiffs failed to
respond to the arguments in the City’s motion to dismiss that Plaintiffs lacked
standing. However, the district court did not analyze Plaintiffs’ Fourth
Amendment claim “on the merits”—whether enforcement of the Ordinance’s
“show-your-receipt” requirement would constitute an unlawful search or seizure—
but only for lack of standing. Moreover, we cannot be certain, and the district
court did not find, that Plaintiffs could not cure the standing defect of that claim by
alleging additional facts. We therefore vacate the district court’s dismissal “on the
merits and with prejudice” of Plaintiffs’ Fourth Amendment claim, and remand to
the district court with instructions to dismiss that claim without prejudice.5
5
Although Plaintiffs’ opposition to the City’s motion to dismiss, below, did
not contain persuasive or particularly cogent responses to the City’s arguments
about standing, Plaintiffs did argue that “the ordinance impacts them individually”
and possibly meant to argue, although in error, that a facial challenge to an
7
We agree with the district court’s reasoning that amendment could not cure
Plaintiffs’ due process, taking, and equal protection claims.6 The district court did
not abuse its discretion in dismissing those claims with prejudice.
III.
For the reasons stated above, we AFFIRM the district court’s dismissal of
Plaintiffs’ claims. However, we VACATE the district court’s dismissal with
prejudice of Plaintiffs’ Fourth Amendment claim and REMAND with instructions
to dismiss that claim without prejudice.
ordinance can be maintained “without [alleging] case specific facts”
notwithstanding the requirements of Article III.
6
While we hold that Plaintiffs lack standing for their due process claim, as
we construe their theory of that claim on appeal, we affirm the district court’s
dismissal of that claim with prejudice. Plaintiffs already amended that claim once.
On appeal, Plaintiffs’ brief does not clarify which, if either, of the two theories that
the district court considered Plaintiffs mean to rely upon. See supra footnote 4.
We agree with the district court’s dismissal on the merits with prejudice of the
claim under one of those theories. See id. And what Plaintiffs would need to
allege to establish standing for their due process claim on the other theory as we
understand it—viz. that their due process rights were violated because the
Ordinance and other provisions of the LAMC fail to provide for notice and a
hearing before imposing civil or criminal penalties for noncompliance—is so far
from the facts alleged in either their initial complaint or their first amended
complaint that we agree, at this point, that further amendment could not cure the
claim.
7