1049 Market Street LLC v. San Francisco et al

Northern District of California, cand-4:2015-cv-02075

ORDER GRANTING, IN PART {{19}} MOTION to Dismiss; AND STAYING MATTER. Signed by Judge Jeffrey S. White on 9/28/15.

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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 1049 MARKET STREET LLC, No. C 15-02075 JSW 10 Plaintiff, 11 v. United States District Court ORDER GRANTING MOTION TO CITY AND COUNTY OF SAN FRANCISCO, For the Northern District of California 12 DISMISS IN PART AND STAYING Defendant. MATTER 13 / 14 15 This matter comes before the Court upon consideration of the motion to dismiss filed by 16 Defendant City and County of San Francisco (the "City"), Board of Supervisors of the City and 17 County of San Francisco, Planning Department of the City and County of San Francisco, San 18 Francisco Department of Building Inspection, San Francisco Building Inspection Commission, and 19 San Francisco Board of Appeals (collectively, "Defendants"). The Court has considered the parties' 20 papers, relevant legal authority, and the record in this case, and it finds the matter suitable for 21 disposition without oral argument. See N.D. Civ. L.R. 7-1(b). Accordingly, the hearing set for 22 October 2, 2015 is HEREBY VACATED. The Court HEREBY GRANTS IN PART the motion to 23 dismiss and STAYS the matter pursuant to the Pullman abstention doctrine. 24 BACKGROUND 25 This case involves a local land use dispute between the owner of 1049 Market Street 26 ("Plaintiff") and Defendants. Plaintiff owns the six-story building on Market Street in San Francisco 27 that was originally constructed for commercial use but has, over the years, been converted to live- 28 work spaces, largely without permits from the City. Upon receiving complaints about the building, 1 the City commenced complex enforcement proceedings against Plaintiff, and later adopted Controls 2 to address the situation. Plaintiff has filed two complaints, one in this Court and one in the Superior 3 Court of the County of San Francisco ("State Court Action"), challenging the same government 4 conduct and seeking the same or similar relief. Each of the lawsuits challenges the City's adoption 5 of Interim Controls and damages in identical amounts related to the suspension of the City's Permit. 6 The Court shall address additional relevant facts in the remainder of this order. 7 ANALYSIS 8 A. Applicable Legal Standards. 9 Defendants move to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), for lack of 10 subject matter jurisdiction, and Rule 12(b)(6), for failure to state a claim. When a defendant moves 11 to dismiss a complaint or claim for lack of subject matter jurisdiction the plaintiff bears the burden United States District Court For the Northern District of California 12 of proving that the court has jurisdiction to decide the claim. Thornhill Publ'n Co. v. Gen. Tel. & 13 Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979). A motion to dismiss for lack of subject matter 14 jurisdiction under Rule 12(b)(1) may be "facial or factual." Safe Air for Everyone v. Meyer, 373 15 F.3d 1035, 1039 (9th Cir. 2004). 16 A facial attack on the jurisdiction occurs when factual allegations of the complaint are taken 17 as true. Fed'n of African Am. Contractors v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir. 1996). 18 The plaintiff is then entitled to have those facts construed in the light most favorable to him or her. 19 Id. A factual attack on subject matter jurisdiction occurs when defendants challenge the actual lack 20 of jurisdiction with affidavits or other evidence. Thornhill, 594 F.2d at 733. In a factual attack, 21 plaintiff is not entitled to any presumptions or truthfulness with respect to the allegations in the 22 complaint, and instead must present evidence to establish subject matter jurisdiction. Id. 23 A motion to dismiss is proper under Rule 12(b)(6) where the pleadings fail to state a claim 24 upon which relief can be granted. The Court construes the allegations in the complaint in the light 25 most favorable to the non-moving party and all material allegations in the complaint are taken to be 26 true. Sanders v. Kennedy, 794 F.2d 478, 481 (9th Cir. 1986). However, even under the liberal 27 pleading standard of Rule 8(a)(2), "a plaintiff's obligation to provide the 'grounds' of his 28 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the 2 1 elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 2 (2007) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). 3 Pursuant to Twombly, a plaintiff must not merely allege conduct that is conceivable but must 4 instead allege "enough facts to state a claim to relief that is plausible on its face." Id. at 570. "A 5 claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw 6 the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 7 556 U.S.662, 678 (2009) (citing Twombly, 550 U.S. at 556). "The plausibility standard is not akin to 8 a probability requirement, but it asks for more than a sheer possibility that a defendant has acted 9 unlawfully.... When a complaint pleads facts that are merely consistent with a defendant's liability, it 10 stops short of the line between possibility and plausibility of entitlement to relief." Id. (quoting 11 Twombly, 550 U.S. at 557) (internal quotation marks omitted). If the allegations are insufficient to United States District Court For the Northern District of California 12 state a claim, a court should grant leave to amend, unless amendment would be futile. See, e.g., 13 Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990); Cook, Perkiss & Liehe, Inc. v. N. 14 Cal. Collection Serv., Inc., 911 F.2d 242, 246-47 (9th Cir. 1990). 15 B. Abstention Under the Pullman Doctrine. 16 In response to the motion to dismiss, Plaintiff seeks to have this Court abstain from deciding 17 this matter and to stay this action pending resolution of the State Court Action. Defendants agree. 18 The equitable doctrine created by Railroad Comm'n v. Pullman Co., 312 U.S. 496 (1941) 19 ("Pullman"), allows federal courts to refrain from deciding sensitive federal constitutional issues 20 when state law issues may moot or narrow those constitutional questions. Pullman abstention is 21 appropriate where "(1) the federal plaintiff's complaint requires resolution of a sensitive question of 22 federal constitutional law; (2) the constitutional question could be mooted or narrowed by a 23 definitive ruling on the state law issues; and (3) the possibly determinative issue of state law is 24 unclear." San Remo Hotel v. City and County of San Francisco, 145 F.3d 1095, 1104 (9th Cir. 25 1998) (citations omitted). The Pullman abstention doctrine "is a narrow exception to the district 26 court's duty to decide cases properly before it." Columbia Basin Apartment Ass'n v. City of Pasco, 27 268 F.3d 791, 801 (9th Cir. 2001). Pullman allows for the "postponement of the exercise of federal 28 jurisdiction when 'a federal constitutional issue. . . might be mooted or presented in a different 3 1 posture by a state court determination of pertinent state law.'" Id. (citing Kollsman v. City of Los 2 Angeles, 737 F.2d 830, 833 (9th Cir. 1984)). A federal plaintiff may invoke the Pullman abstention 3 doctrine, and if the district court agrees, the "federal plaintiff must then seeks a definitive ruling in 4 the state courts on the state law questions before returning to the federal forum." San Remo Hotel, 5 145 F.3d at 1104 (citations omitted). "By abstaining in such cases, federal courts "avoid both 6 unnecessary adjudication of federal questions and needless friction with state policies." Columbia 7 Basin, 268 F.3d at 802 (citing Hawaii Housing Auth. v. Midkiff, 467 U.S. 229, 236 (1984)). "When 8 a court abstains in order to avoid unnecessary constitutional adjudication. . . it is not seeking to 9 protect the rights of one of the parties; it is seeking to promote a harmonious federal system by 10 avoiding a collision between the federal courts and state (including local) legislatures." Id. at 1105 11 (quoting Waldron v. McAtee, 723 F.2d 1348, 1351 (7th Cir. 1983)). United States District Court For the Northern District of California 12 Both parties agree that the Pullman doctrine is properly invoked as the claims eliciting 13 resolution of sensitive questions of federal constitutional law in this matter will depend in large part 14 on the determination of state law issues presented in the State Court Action. There is no dispute that 15 the landlord-tenant regulation and land use planning decisions "touch a sensitive area of social 16 policy" that meets the first requirement for Pullman abstention. Columbia Basin, 268 F.3d at 802 17 (citations omitted); see also San Remo, 145 F.3d at 1105. The second factor for abstention is met 18 because the determination of the validity of Defendants' adjudicatory decisions regarding the Permit 19 and its legislative decisions promulgating the Interim Controls, may eliminate or narrow the scope of 20 whether such conduct violates the federal Constitution. Lastly, the determinative state law issues 21 regarding Defendants' alleged conduct remains unadjudicated and unclear. 22 If the Court abstains under Pullman, "retention of jurisdiction, and not dismissal of the 23 action, is the proper course." Santa Fe Land Improvement Co. v. City of Chula Vista, 596 F.2d 838, 24 841 (9th Cir. 1979). "Once Pullman abstention in invoked by the district court, the federal plaintiff 25 must then seeks a definitive ruling in the state courts on the state law questions before returning to 26 the federal forum." San Remo, 145 F.3d at 1104 (citations omitted). Accordingly, the Court 27 GRANTS IN PART Defendants' motion to dismiss, abstains from deciding the merits of the matter, 28 and stays this action. 4 1 CONCLUSION 2 Based on the foregoing, the Court GRANTS IN PART Defendants' motion to dismiss and 3 agrees with both parties that the proper course is to abstain pursuant to Pullman. Accordingly, the 4 Court STAYS this matter pending resolution of the underlying State Court Action. The Court shall 5 the Court administratively close this case. The parties shall jointly report the status of the State 6 Court Action every 120 days and no later than 10 days after the issuance of a final order in that 7 action. 8 IT IS SO ORDERED. 9 Dated: September 28, 2015 JEFFREY S. WHITE 10 UNITED STATES DISTRICT JUDGE 11 United States District Court For the Northern District of California 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5