Hotel & Motel Association of Oakland Balu K. Patel Usha B. Patel Navin Patel Tara N. Patel Bharat Patel Niketa Patel, Parsottam B. Patel Gita Patel Vinod P. Patel Madhuben v. Patel Jagdish Patel Bharti J. Patel Ramesh D. Patel Thakorbhai G. Patel Manjuben T. Patel Kirit S. Patel Ranjan K. Patel Manubhai L. Patel Shardaben M. Patel Pravin Patel Sima Patel Natwarbhai Patel Jagdishkumar B. Patel Jayeshkumar D. Patel Hasmukh B. Patel Bhisma Patel Babubhai K. Patel Kalaben B. Patel Vallabh H. Patel Jamanaben v. Patel Ranchodbhai D. Patel Parbhubhai v. Patel Kamuben P. Patel Govindbhai Z. Patel Madhuben G. Patel Jotindra Patel Rekha J. Patel Dilip P. Patel Kalpana D. Patel Anil P. Kumar Sunita A. Kumar Rajendra K. Kalyan Pushpa R. Kalyan Bhupendra K. Kalyan Bhartiben B. Kalyan Narbada Kalyan Kalyan Harish Sharma Naresh Patel Bobby Newman v. City of Oakland, a Municipal Corporation City of Oakland Police Department City of Oakland Police Officer D. Martinez Sued as Doe 1 City of Oakland Police Officer T. Martin Sued

Citation: 344 F.3d 959Docket: 02-15220

Court: Court of Appeals for the Ninth Circuit; September 17, 2003; Federal Appellate Court

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A constitutional challenge was brought against two city ordinances enacted by the Oakland City Council aimed at improving the conditions of hotels, motels, and rooming houses in Oakland, California. The first ordinance establishes maintenance, habitability, security, and record-keeping standards for hotels, while the second ordinance reclassifies certain hotels to "Deemed Approved" status, mandating compliance with the new standards to retain that classification. The appellants, a group of hotel owners and their trade association, argue that these ordinances constitute an unconstitutional taking under the Fifth Amendment and violate their Fourteenth Amendment rights regarding procedural due process and equal protection, as well as being unconstitutionally vague. The court, however, found the ordinances constitutional, affirming the district court's dismissal of the case. The background of the ordinances indicates that they were enacted in response to persistent illegal activities linked to poorly maintained hotels, with the City Council concluding that improved maintenance and management would mitigate these issues. The first ordinance adds detailed operating standards and record-keeping requirements to the Oakland Municipal Code.

Ordinance No. 12137 amends the Oakland Planning Code to establish a "Deemed Approved Hotel Program," reclassifying hotels with "legal nonconforming use" status to "Deemed Approved Hotel Activities." These hotels must adhere to new performance standards set by Ordinance No. 12136, with violations leading to infractions, potential misdemeanor charges, fines, and enforcement actions. Continued non-compliance may result in revocation of their Deemed Approved status after a public hearing and administrative review.

The Hotel Motel Association of Oakland, alongside individual hotel owners, challenges these ordinances based on constitutional grounds. After initial dismissals of certain claims by the district court, a Stipulation and Judgment of Dismissal was agreed upon, dismissing some claims with prejudice (no right to appeal) while preserving others for appeal. The remaining claims on appeal include allegations of an unconstitutional taking under the Fifth Amendment, violations of the procedural Due Process and Equal Protection clauses of the Fourteenth Amendment, and a vagueness challenge against the ordinances.

Jurisdiction was questioned by the appellate court, which sought supplemental briefing to clarify the district court's intent regarding finality in its rulings. The court determined that the district court intended to conclude the action entirely despite some claims being dismissed without prejudice, as indicated by the Stipulation and Judgment of Dismissal. The procedural history confirmed the finality of the dismissal, affirming the appellate court's jurisdiction under 28 U.S.C. 1291.

A facial takings claim under the Fifth Amendment's Takings Clause asserts that the enactment of a statute alone constitutes a taking, differing from an "as applied" challenge, which focuses on the specific impact of government action on property. The Association argues that Ordinance No. 12137 represents a "regulatory taking" by diminishing the value or utility of private property without physical occupation. Regulatory takings, which have evolved in Supreme Court jurisprudence, require that a regulation does not deny all economically viable use of property and must substantially advance a legitimate government interest. 

The district court deemed the Association's claim of denied economically viable use as "unripe," noting that such claims require the property owner to first seek and be denied just compensation by the state, as established in previous case law. The court pointed out that the Association did not allege pursuing state remedies for compensation, rendering this aspect of the takings claim unripe for review.

The Association also presents an alternative theory that the ordinance does not substantially advance a legitimate state interest, which does not depend on compensation and thus does not face the same ripeness requirement. This claim asserts that the municipality lacked constitutional authority to enact the ordinance, allowing the court to address it on the merits.

The Association argues that the determination of whether the challenged ordinances substantially advance a legitimate state interest is a factual issue that cannot be resolved on a motion to dismiss before discovery. It cites the Supreme Court’s ruling in Penn Central, which emphasizes that regulatory takings cases require ad hoc factual inquiries. The Association claims there is a lack of evidence supporting a legitimate government purpose or a reasonable relationship between the regulation and such a purpose, suggesting the district court's dismissal was premature. However, the response critiques this view as overly restrictive, noting that not all inquiries into a regulation's purpose necessitate extensive factual records or jury involvement. The Supreme Court’s decision in Tahoe-Sierra reinforces that regulatory takings often require individualized scrutiny, but this does not preclude resolution through motions to dismiss or for summary judgment.

The case of Buckles is referenced, where landowners contended that the assessment of whether a decision substantially advanced a legitimate government interest was solely a jury question. The court clarified that while the Supreme Court allowed for jury examination in specific contexts, it did not intend to eliminate established summary judgment principles. Ultimately, the court concludes that it is possible to determine whether an ordinance substantially advances a legitimate state interest on its face during a motion to dismiss and rejects the Association's argument regarding the sufficiency of the record for disposition at this stage. The mention of Agins v. City of Tiburon supports the idea that state justifications in statutes can substantiate the advancement of legitimate interests through zoning ordinances.

The Association's challenge to Ordinance No. 12137 focuses on its legitimacy in advancing state interests. Both Ordinance No. 12137 and its companion, Ordinance No. 12136, share legislative findings aimed at safeguarding public health and welfare in Oakland by addressing illegal activities and unsafe conditions associated with problematic hotels. The City Council determined that the existing housing code was insufficient and that police efforts were overwhelmed by issues at certain businesses, which facilitated drug use and prostitution. It was found that these problems correlated with substandard conditions at these properties.

Ordinance No. 12136 establishes regulations for maintenance, housekeeping, and security across all hotels. In contrast, Ordinance No. 12137 modifies nonconforming use status, tying ongoing operation to compliance with the new regulations, in response to previous unsuccessful civil abatement efforts. The ordinances are deemed to substantially advance a legitimate government interest, as supported by case law indicating that regulatory actions must have a reasonable relationship to their intended purpose. Additionally, the Association raises concerns regarding the potential conflict between these new ordinances and existing protections for nonconforming uses, which traditionally allowed such uses to persist indefinitely, suggesting that Ordinance No. 12137 may undermine those guarantees.

Oakland's Ordinance No. 12137 does not alter the conditional guarantees for properties transitioning from "non-conforming" to "Deemed Approved" status. It explicitly states that the Nonconforming Use provisions will also apply to the new Deemed Approved Hotel regulations. Any potential conflict between Ordinance No. 12137 and another statute (17.114.040) does not materially affect the Association's property use, aside from compliance with universal health and safety standards for hotels. Previous case law supports the notion that municipalities can enforce regulations and abate nuisances despite grandfathered rights.

The Association's procedural due process claim, based on the lack of an individualized hearing prior to the ordinance's enactment, hinges on whether the action was legislative. Legislative actions are deemed to satisfy due process if conducted per legal norms, as individual hearings for general statutes affecting many are impractical. However, if an action disproportionately impacts a small group, greater procedural rights may be warranted. In this case, the legislative nature of the hotel regulations does not necessitate individualized notice and hearing, as the general notice provided suffices.

The City Council's actions in enacting Ordinance Nos. 12136 and 12137 are characterized as legislative acts with broad applicability, impacting all hotels in the area rather than targeting specific individuals or establishments. Ordinance No. 12136 establishes operating standards for all hotels providing services like shelter and housekeeping, while Ordinance No. 12137 amends non-conforming use regulations applicable to all legal nonconforming hotels and rooming houses within the City. 

The Association's argument, referencing the Harris case, contends that the City specifically targeted a small group of individuals. However, the ordinances are deemed general statutes affecting an entire class of hotels, not individual properties. Unlike the Harris case, where a single property was changed from commercial to residential use, the ordinances do not alter the legal status of the hotels significantly; they continue to enjoy non-conforming use privileges while adhering to basic habitability standards.

The City Council's legislative process was lawful, providing the Association with due process through their ability to influence rule-making, without the need for additional individualized notice or hearing. 

The Association also raises equal protection and vagueness challenges. Their equal protection claim asserts that Ordinance No. 12137 improperly targets nonconforming hotels. Since the ordinance does not affect a suspect class or fundamental interest, the City must only show that the classification is rationally related to a legitimate state interest. Ordinance No. 12137 meets this rational basis standard, as previously discussed in the context of takings claims, affirming that the legislation is both substantially advancing and rationally related to legitimate state interests.

The Oakland ordinances are distinguished from the case of City of Cleburne v. Cleburne Living Center, as the latter was deemed unconstitutional for being based on irrational prejudices without evidence of a special threat to the city. In contrast, Oakland's Ordinance No. 12137 applies uniform standards to Deemed Approved hotels, justified by the unique characteristics of these businesses, addressing an enforcement issue related to nonconforming businesses lacking revocable land use permits. The ordinance does not violate equal protection principles, as rational-basis review allows states to act on distinguishing characteristics relevant to their interests.

The Association's vagueness claim presents challenges, as a successful facial challenge requires demonstrating that no circumstances exist under which the statute could be valid. The court first assesses whether the law implicates constitutionally protected conduct; if not, the overbreadth challenge fails. For a vagueness challenge to succeed, the law must be impermissibly vague in all its applications. Recent Supreme Court discussions have questioned the strict application of the "no set of circumstances" requirement, particularly in City of Chicago v. Morales, where the Court upheld an ordinance without applying the Salerno test. The Morales decision indicates that while federal courts may consider the Salerno standard, state courts are not bound by it.

The legal document addresses the application of the "void-for-vagueness" doctrine in the context of facial challenges to ordinances. It references the case S.D. Myers, Inc. v. City and County of San Francisco, where the court upheld the Salerno standard for facial challenges under the Commerce Clause, despite discussions in Morales suggesting otherwise. The court acknowledges that while Planned Parenthood v. Casey overruled Salerno concerning abortion statutes, it will maintain the Salerno standard in other contexts until a Supreme Court majority directs otherwise.

The court affirms that for a successful vagueness challenge, the burden is on the party to demonstrate that the ordinance is impermissibly vague in all applications. In the case at hand, the Association's challenge to Ordinance No. 12136, which prohibits hotel operators from contributing to nuisance activities, fails as it does not show how the ordinance is vague in any application. The ordinance provides clear notice of prohibited conduct and standards for law enforcement.

The term "close proximity" is clarified to mean activities occurring "on" or "very near" hotel property, and the ordinance lists specific prohibited behaviors, ensuring sufficient notice and guidance for enforcement. The phrase is deemed to provide the necessary definiteness and standards, thereby meeting constitutional requirements.

Ordinance No. 12137, according to the Association, lacks a mens rea requirement, which they argue conflicts with Supreme Court precedent regarding vagueness challenges. However, the Court has not indicated that the absence of a mens rea requirement alone makes a statute unconstitutional, nor has it suggested that such an omission overrides the need to demonstrate that the law is vague in all applications. The Court has acknowledged that while the lack of a scienter requirement may lessen a statute's vagueness, a complainant must prove the law is impermissibly vague in all contexts to succeed in a vagueness claim. The Association failed to show that Ordinance No. 12137 is unconstitutionally vague in all applications. Consequently, it is determined that neither Ordinance No. 12137 nor Ordinance No. 12136 is unconstitutionally vague on its face. Furthermore, the ordinances do not constitute an unconstitutional taking of the Association's property under the Fifth Amendment, nor do they violate the rights to procedural due process and equal protection. The judgment of the district court is affirmed.

Nonconforming use rights can be maintained indefinitely and are tied to the land, subject to specified nonconforming use regulations. The guarantees of Section 17.114.040 are not absolute and are contingent upon those regulations. The Association does not invoke the overbreadth doctrine, which would allow for challenges based on broader implications for free speech, but instead claims that the ordinances are unconstitutionally vague. The discussion includes the Salerno rule, relevant to facial vagueness challenges, and its potential impact on Fifth Amendment takings claims, although the application of Salerno to such claims remains unresolved in this context. The dismissal of the Association's takings claim is upheld on other grounds.