Hermosa on Metropole, LLC v. City of Avalon

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
AUG 12 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
HERMOSA ON METROPOLE, LLC, a No. 14-56433
California limited liability company;
HERMOSA NNN, LLC, D.C. No.
2:13-cv-02439-AB-FFM
Plaintiffs-Appellants,
v. MEMORANDUM*
CITY OF AVALON, a municipal
corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
Andre Birotte, Jr., District Judge, Presiding
Argued and Submitted August 5, 2016
Pasadena, California
Before: KOZINSKI and WARDLAW, Circuit Judges, and BENCIVENGO,**
District Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Cathy Ann Bencivengo, United States District Judge
for the Southern District of California, sitting by designation.
page 2
1. Hermosa’s Due Process and Takings Clause claims require a
constitutionally protected interest in the autoette permits for which it applied. See
Nev. Dep’t of Corr. v. Greene, 648 F.3d 1014, 1019 (9th Cir. 2011) (Due Process
Clause); McIntyre v. Bayer, 339 F.3d 1097, 1099 (9th Cir. 2003) (Takings Clause).
A protected property interest exists when an individual has a “legitimate claim of
entitlement” that derives from “existing rules or understandings.” Bd. of Regents
v. Roth, 408 U.S. 564, 577 (1972). Whether a statute establishes such a claim
depends “largely upon the extent to which the statute contains mandatory language
that restricts the discretion of the decisionmaker.” Doyle v. City of Medford, 606
F.3d 667, 673 (9th Cir. 2010) (citation and internal quotation omitted). Here, the
relevant statute is the city’s ordinance governing the issuance of autoette permits.
The ordinance says that permits “may be granted,” not that they must. Avalon,
Cal., Code § 4-4.1703(g)(1) (emphasis added). There is likewise no property right
based on a “mutually explicit” understanding between Hermosa and Avalon. See
Perry v. Sindermann, 408 U.S. 593, 601 (1972). Hermosa is a commercial
enterprise applying for a large number of residential permits in a small island
community with good reason to be concerned about traffic. Avalon has a separate
procedure for commercial enterprises, and Hermosa is free to avail itself of that
page 3
process. But Hermosa established no constitutionally protected property interest in
residential permits.
2. Hermosa’s equal protection claims do not require a constitutionally
protected property interest. See Outdoor Media Grp. v. City of Beaumont, 506
F.3d 895, 903 (9th Cir. 2007). Hermosa can succeed on these claims if it shows
that it was intentionally treated differently from others, and that the difference in
treatment lacked a rational basis. See Gerhart v. Lake Cty., Mont., 637 F.3d 1013,
1022 (9th Cir. 2011). The district court properly rejected these claims. Even if
Hermosa could establish that it was intentionally singled out, a small island
community might rationally be concerned about a large increase in autoettes and
who obtains them. A sudden addition of 32 autoettes may have exceeded the
island’s optimal parking or traffic capacity; owners and occupants may be different
kinds of drivers. These reasons don’t need to clear a high bar: A rational basis
“may be based on rational speculation unsupported by evidence or empirical data.”
F.C.C. v. Beach Commc’ns, Inc., 508 U.S. 307, 315 (1993). The city did not
violate equal protection by denying Hermosa’s application or distinguishing
between mere owners and long-term occupants of city properties.
page 4
AFFIRMED. The district court did not err in granting summary judgment
to the city.