Free Memorandum in Opposition - District Court of California - California

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1 RYAN D. LAPIDUS (Bar No. 196838) Email: ryanuvlapiduslaw.com 2 DANIEL C.'1.Al'IDUS (Bar No. 227170) Email: danuvlapiduslaw.com 3 JIM D. BAtlCR (Bar No. 199454) Email: .ii!J1UVlapiduslaw.com 4 LAPIDUS'& LAPIDUS A PROFESSIONAL LAW CORPORATION 5 177 SOUTH BEVERLY DRIVE BEVERLY HILLSA CALIFORNIA 90212 6 TEL: 31 0-550-870u FAX: 310-943-2471 7 Attorneys for PlaintiffU-Haul Co. of Califomia 8 and Amerco Real Estate Company
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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION U-HAUL CO. OF CALIFORNIA, a California corporation; and AMERCO REAL ESTATE COMPANY, a Nevada corporation, Plaintiffs, CASE No.: C08-02313 WDB PLAINTIFFS' MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO MOTION TO DISMISS D.ate: September 3, 2008 TIme: I :30 p.m. The Honorable Wayne D. Brazil Courtroom 4

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1I
12 13 14 15 16 17 18 19 20

v.
CITY OF BERKELEY, a municipality;

Defendant. 21 22 I I - - - - - - - - - - - - - - . J
23 24 25 26 27 28 PLAINTIFFS' MEMORANDUM OF POINTS AND AUTHORITIES IN
OPPOSITION TO MOTION TO DISMISS - CASE NO. C08-2313 WDB


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I


TABLE OF CONTENTS

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I.

Page
INTRODUCTION....... I


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6
11.
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THE CITY HAS MISREPRESENTED THE COMPLAINT.. ,..... ,., ...

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5

6

7


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111.
9

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IV. II
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LEGAL STANDARDS FOR MOTIONS TO DISMISS

THE COMPLAINTIS NOT BARRED BY RES JUDICATA............ A. There Is No Final Judgment...........................................

B. This Action Is Based on Different Primary Rights From the
State Court Writ Proceeding..... .... .. .. .. .... ..... ..... .. ... ..... ... ....
YOUNGER ABSTENTION DOES NOT APPLy.......................

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IS
V. 16


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A. This Action Does Not Interfere With Ongoing
State Proceedings.. ...... ... .. .. .. .. ... .. ..... .. .. .... .... .. .. .. .. .. ... .... B. The Bad Faith Exception Would Apply.................................
THE COMPLAINT STATES A VALID CLAIM FOR COMMERCE
CLAUSE VIOLATIONS 16
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15


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VI. 21


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VII. THE COMPLAINT STATES A VALID CLAIM FOR CEQA
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VIOLATIONS 18


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VIII. CONCLUSION.... 20


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TABLE OF CONTENTS - i

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1 2 3
4 5

TABLE OF AUTHORTTIES Pagers) California Cases
Agarwal v. Johnson, 25 Ca1.3d 932 (1979) Boeken v. Philip Morris USA, Inc., 159 Cal.AppAth 1391 (2008) Datta v. Staab, 173 Cal.App.2d 613 (1959) Dillard v. McKnight, 34 Cal.2d 209 (1949) Garcia v. Rehrig Interat. Inc, 99 CalAppAth 869 (2007) Healing v. California Coastal Com.,

7, 11, 12 6, 12 8 7
7

6
7

8
9 10

11
12

22 Cal.AppA,h 1158 (1994)
Hernandez v. City ofPomona, 154 Cal.AppA,h 701 (2006) Lewis v. Seventeenth District Agricultural Association,

9,10 12

13
14
15 16 17

165 Cal.App.3d 823 (1985)
Lynch v. Glass, 44 Cal.App.3d 943 (1975) Mara v. City ofLos Angeles, 20 Cal.AppA,h 141 (1993) Vega v. Jones, Day, Reavis & Pogue, 121 Cal.AppAth 282 (2004)

19 7 8, 9 7

18 19 20
21

Federal Cases
Allen v. McCurry,

22
23

449 U.S. 90,101 S.C!. 411, 66 L.Ed.2d 308 (1980)
Blue Circle Cement, Inc. v. Board ofCounty Commissioners,

9 18 14 20 18 5

24
25 26 27

27 F.3d 1499 (loth Cir. 1994)
Bud Antle, Inc. v. Barbosa, 45 F.3d 1261 (9th Cif. 1995) Cervantes v. City ofSan Diego, 5 F.3d 1273 (9 th Cir. 1993) Colorado Manufactured Housing v. Board ofCounty Commissioners,

28

946 F.Supp. 1539 (D. Colo. 1996)
Conley v. Gibson, 355 U.S. 41 (1957)

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1 o
3

Cullen v. Fliegner, 18 F.3d 96 (2" CiT. 1994) DCDPrograms, LTD.. v. Leighton, 833 F.2d 183 Dean Milk Co. v. Madison,

16 h W Cir. 1987) 6 17 7 15 15 15 .4 17 I5 5 17 18 10 18 7 5 ,5 .4 6 9

4
5 6 7

340 U.S. 349, 71 S.C! 295, 95 L.Ed. 329 (1951)
Eichman v. Fotomat Corporation, 759 F.2d 1434 (9'h Cir. 1985) Flowers v. Seki, 87 F.3d 1318 (9'h Cir. 1996) Gibson v. Berryhill, 411 U.S. 564 (1973) Gilbertson v. Albright, 381 FJd 965 (9 th Cir. 2004) Hishon v. King & Spalding, 467 U.S. 69 (1984)
H.P. Hood & Sons, Inc. v. Du Mond,

8
9 10

II
\2

336 U.S. 525, 69 S.C!. 657, 93 L.Ed. 865 (1949)
Huffman v. Pursue, Ltd.,

13
14 15

420 U.S. 592,95 S.C!. 1200, 43 L.Ed.2d 482 (1975)
Jackson v. Birmingham Board a/Education, 544 U.S. 167 (2005) Kassel v. Consolidated Freightways Corp.,

16
17

450 U.S. 662. 101 S.C!. 1309,67 L.Ed.2d 580 (1981)
LaCost v. Louisiana Dept. ofConservation,

18 19
20

263 U.S. 545, 44 S.C!. 186,68 L.Ed.437 (1924)
Lucas v. South Carolina Coastal Council. 505 U.S. 1003 (1992) Pittston Warehouse Corp. v. City ofRochester,

21
22 23

528 F.Supp. 653, 662-63 (W.D.N.Y. 1981)
Prudmtial Real Estate v. Croushore, 204 F.3d 867 (9'" Cir. 2000) Smilecare Dendtal Group v. Delta Dental Plan of California, Inc.,

24
25 26 27 28

88 F.3d 780 (9'h Cir. 1996)
Summit Health, Ltd. v. Pinhas, 500 U.S. 322 (1991) Swierkiewicz v. Sorema N.A .. 534 U.S. 506 (2002)

,

Taylor v. Charter Medical Corporation, 162 F.3d 827 (5'" Cir. 1998) United States v. Utah Construction Co.,

384 U.S. 394,86 S. Ct. 1545, 16L.Ed.2d 642 (1966) TABLE OF AUTHORITIES - iii

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1
3 4

United States v. Webb, 655 F. 2d 977,979 West Lynn Creamery. Inc.
v.

..

6

Healy,

512 U.S. 186, 114 S.Ct. 2205, 129 L.Ed.2d 157 (1994)..................
Younger v. Harris, 401 U.S. 37 (1971)..................................... .......

17 14

5
6 7

California Statutes California Code of Civil Procedure § 1094.5........ Federal Statutes Federal Rule of Civil Procedure 8(a)............................................. Federal Rule of Civil Procedure 12(b)(6).................................. Federal Rule of Civil Procedure 15(a)............................................. Federal Rule of Evidence 201(b) 28 U.S.C. § 1738..... Other Authorities California Environmental Quality Act Guidelines § 15300.2(c)................. California Environmental Quality Act § 15321................................. 19 18 4 5 6 6 7 9

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9

10 11 12
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14 IS 16 17 18 19 20 21 22 23 24 25 26 27 28

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I.

INTRODUCTION

The City of Berkeley has abused its power to discriminate against Plaintiffs in violation of their civil rights. Now the City seeks to avoid being held accountable for its conduct, asking this Court to dismiss the Complaint before it has heard a single piece of evidence. The City's motion to dismiss mischaracterizes the allegations of the Complaint. omits key material facts, and misstates the law. It also contains numerous factual assertions, which are improper on a motion to dismiss and should be disregarded. Specifically, the City's motion is directed at a straw man version of the Complaint. The City repeatedly characterizes the Complaint as being solely directed at the City'S revocation ofU-Haul's Use Permit. In fact, the Complaint alleges a pattern of unconstitutional and improper behavior by the City, of which the Use Permit revocation is but one example. The City also disingenuously accuses Plaintiffs of failing to disclose to this Court the existence ofa state court writ of mandate proceeding in which U-Haul challenged the revocation of the Use Permit. In fact, as the City well knows. U Haul filed concurrently with its Complaint (and served on the City) a Notice of Other Action specifically discussing that action. Furthermore, the City wrongly asselis that U-Haul failed to file a timely appeal of the state court judgment in the writ proceeding. In fact, U-Haul tiled an appeal, and the California Court of Appeal has rejected the City's argument that the appeal was untimely. Like its factual contentions, the City's legal contentions are flawed. The City's assertion that the Complaint is barred by res judicata is doubly wrong. First, there is no final judgment for res judicata purposes, because California law (which governs the finality of California judgments) provides that

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I

res judicata cannot be based upon a judgment that is on appeal. Second, this action

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seeks to vindicate different primary rights (e.g. the right to be free from
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discrimination and retaliation by state actors) than those that were at issue in the 4
state court writ proceeding. I

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6


The City'S Younger abstention argument is without merit because Younger is not applicable here. There is no ongoing state proceeding with which this action would interfere. In addition, the Complaint alleges that the City has acted in bad faith and to harass Plaintiffs, which is a well-established exception to Younger abstention. The City'S attack on the Commerce Clause claims ofthe Complaint fails
because it mischaracterizes the Complaint, misstates the law, and improperly asks the Court to resolve disputed issues of fact on a motion to dismiss.

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II


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Finally, the sixth cause of action for violation of the California

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Environmental Quality Act states a valid claim because the Complaint alleges 16
sufficient facts to invoke one of the regulatory exceptions to the "categorical
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exemption" on which the City claims to have relied, and the Complaint was timely 18
filed.

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II.

THE CITY HAS MISREPRESENTED THE COMPLAINT

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The City has falsely characterized the Complaint as a mere "collateral attack" on the state court writ proceeding, and engages in selective quotation and

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selective overlooking of the actual allegations of the Complaint.

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In fact, the City does not even believe its own assertion. After representing

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to this Court that this action is a "collateral attack," the City recently admitted to

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the Alameda County Superior Court that in fact, this action "does not - and could
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The City's motion fails for a third reason as to plaintiff Amerco Real Estate Company, because that entity was not a party to, nor in privity with a party to the state court action.
I

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not - seek to directly overturn the City's revocation ofV-Haul's Vse Pem,it." 2 Request for Judicial Notice, Ex. A. The Complaint speaks for itself, and it is the actual allegations, not the City's mischaracterization of it, that the Court must consider in ruling on the motion. Contrary to the City's assertions, the Complaint is based on more than simply the City's revocation of V-Haul's Vse Permit. Instead, it alleges an entire

3
4
5

6

7 course of conduct directed against PlaintitTs. See Complaint, ~ 1 ("Among other
8
9

things, Defendant has attempted to impose unlawful, disproportionate, and punitive sanctions on V-Haul, unreasonably revoked V-Haul's use permit to operate its facility, discriminated against V-Haul and its customers, and punished and retaliated against V-Haul for asserting its First Amendment rights to challenge Defendant's improper conduct.");
~

I0 II
12
13 14 15

22 ("Defendant recently began and carried out

a campaign of improper, unfair, and discriminatory conduct towards V-Haul."). That course of conduct consists of much more than one City Council decision to revoke a Vse Permit. See, e.g., Complaint ~ 23 ("For example, Defendant has issued citations to V-Haul without legal or factual bases. Defendant's officials even personally delivered these citations rather than simply mailing them, for the purpose of intimidation and disruption of V-Haul's operations. Defendant arbitrarily and without legitimate justification treats V-Haul
worse

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17 18 19

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than similar situated businesses, including car rental companies and car

share operators, such as ZipCar, FlexCar and City Car Share, that are allowed by the Defendant to park their cars on City streets and other public locations including public parking lots without the limitation or the unfair restrictions and conditions imposed on V-Haul.");
~

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23 24 25 26

26 (City officials "have informed V-Haul that the City

does not want V-Haul to operate in the area, and that it will not approve any permit application or request for a variance for which U-Haul might apply.").

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Indeed, the Complaint makes clear that the City's wrongful conduct began before the Vse Pennit was revoked, and that the revocation was in fact just one example oflhe City's retaliation against Plaintiffs for standing up to the City's abuse. See Complaint, ~ 24 ("V-Haul successfully challenged some of Defendant's conduct. Defendant responded by further unfair and discriminatory acts in order to punish and retaliate against V-Haul for exercising its First Amendment right to petition for a redress of grievances. Among other things, Defendant revoked V

SHaul's Vse Permit No. 7575.") (emphasis added). 9 10 11 12 \3 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Federal Rules of Civil Procedure require only notice pleading; a plaintiffis required only to allege sufficient facts to put the defendant on notice of the nature of the claims asserted against it, not to provide a laundry list of every piece of evidence that supports those claims. See Fed. Rule Civ. Proc. 8(a) ("A pleading which sets forth a claim for relief, whether an original claim, counterclaim, cross-claim, or third-party claim, shall contain ... (2) a short and plain statement of the claim showing that the pleader is entitled to relief... "). A plaintiff need only "give the defendant tair notice of what the plaintiffs claim is and the grounds upon which it rests." Swierkiewicz v. Sorema NA., 534 V.S. 506, 512 (2002). Indeed, "[g]iven the Federal Rules' simplilied standard for pleading, '[a] court may dismiss a complaint only ifit is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Id., quoting Hishan v. King & Spalding, 467 V.S. 69, 73 (1984). Moreover, "[i]f a pleading fails to specify the allegations in a manner that provides sufficient notice, a defendant can move for a more delinite statement under Rule 12(e) before responding." !d. Nonetheless, if necessary, Plaintiffs can amend the Complaint to allege additional specilic facts and examples of the City'S wrongful conduct. Among other things, City officials have conspired with each other and with neighborhood

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residents to use the zoning ordinance and nuisance actions as a pretext to force
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Plaintiffs' longstanding business out of the neighborhood and replace it with a business they deem more "desirable"; the City's police department has responded inadequately to - or outright ignored - Plaintiffs' repeated reports of theft, trespassing, and loitering; the City then disingenuously attempted to use the loitering problem that it refused to address as evidence against Plaintiffs; the City ignored the findings of its own administrative hearing officer, and overruled the recommendations of its own zoning staff in its zeal to punish Plaintiffs; refused to issue zoning certificates to which Plaintiffs were entitled under the law; and has attempted to stir up public sentiment against Plaintiffs.

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II

III.

LEGAL STANDARDS FOR MOTIONS TO DISMISS

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The legal standard applicable to motions to dismiss is well-settled. When a claim is challenged under Federal Rule of Civil Procedure 12(b)(6), the court presumes that all well-pleaded allegations are true, resolves all doubts and inferences in the pleader's favor, and views the pleading in the light most favorable to the non-moving party. See Jackson v. Birmingham Board ofEducation. 544 U.S. 167, 171 (2005) ("Because [the] claim was dismissed under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted, 'we must assume the truth of the material facts as alleged in the complaint."), quoting Summit Health, Ltd. v. Pinhas, 500 U.S. 322, 325 (1991);

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Smilecare Dental Group v. Delta Dental Plan ofCalifornia, Inc., 88 F.3d 780,
782-783 (9th Cir. 1996) ("All allegations of material fact are taken as true and construed in the light most favorable to the plaintiff."); Conley v. Gibson, 355 U.S. 41,45-46 (1957) ("In appraising the sufficiency of the complaint we follow, of course, the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.").

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Although the court may take judicial notice of the contents of files of another court. it cannot take judicial notice of the truth of the assertions contained in those documents. See Fed.R.Evid. 201(b); Taylor v. Charter Med. Corp., 162 F.3d 827, 828 (5'h Cir. 1998) (factual findings of another court are not susceptible allegations contained in state court or other proceedings, the Court must decline. Furthermore, even if the motion to dismiss is granted, the plaintiff should be freely granted leave to amend. Federal Rule of Civil Procedure 15(a) provides that a party may amend their complaint once "as a matter of course" before a responsive pleading is served, after which the "party may amend the party's pleading only with the opposing party's written consent or the court's leave." Fed. R. Civ. P. 15(a). "The court should freely give leave when justice so requires." Id. "In exercising its discretion 'a court must be guided by the underlying purpose of Rule 15-to facilitate decision on the merits rather than on pleadings or technicalities.'" DCDPrograms, LTD., v. Leighton, 833 F.2d 183, 186 (9 1h Cir. 1987) (quoting United States v. Webb, 655 F.2d 977, 979). Thus, "[r]ule 15's policy of favoring amendments to pleadings should be applied with extreme liberality ... [and such] liberality add causes of action or parties is not dependent on whether the amendment will [provided that] amendment of the complaint does

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5 to judicial notice). Thus, to the extent the City asks the Court to rely on factual

II

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not cause the opposing party undue prejudice, is not sought in bad faith, and does not constitute an exercise in futility." Id. (Internal citations omitted). IV. THE COMPLAINT IS NOT BARRED BY RES JUDICATA The City admits in its motion that res judicata requires three elements: (I) a final judgment on the merits in the prior proceeding; (2) the present proceeding is on the same cause of action as the prior proceeding; (3) the parties in the present proceeding or parties in privity with them were parties in the prior proceeding. See City's Memorandum, p. 5; Boeken v. Philip Morris USA, Inc., 159 Cal.AppA'h

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1391, 1397-98 (2008). Here, the first two elements are missing as to both Plaintiffs.' a. There Is No Final Judgment The preclusive effect of a state court judgment is determined by the law of

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5 the state that issued it. See 28 U.S.C. § 1738 (judicial proceedings of state courts
"shall have the same full faith and credit in every court as they have by law or usage in the courts of such State, Territory or Possession from which they are taken."); Eichman v. Fotomat Corp., 759 Fold 1434, 1439 (9'h Cir. 1985) ("Under 28 U.S.C. Sec. 1738, we apply California law" to determine preclusive effect of California judgment); City'S Memorandum, p. 5 (agreeing that California law applies). "Under California law ... a judgment is not final for purposes of res judicata during the pendency of and until the resolution of an appeal." Eichman. 759 F.2d at 1439, citing Agarwal v. Johnson, 25 Ca1.3d 932, 954 n.11 (1979) ("Under the California rule, the instant judgment ... is not final for purposes of res judicata

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The third element is also missing as to plaintiff Amerco Real Estate Company, because that entity was neither a party to, nor in privity with a party to. the state court writ procee'ding. None of the reasons offered by the City suffices to show privity between Amerco Real Estate Company and U-Haul Company of California. A business relationship does not confer privity. See Dillard v. AfcKnight, 34 Ca1.2d 209 (1949) (judgment against one partner did not bind other partners in subsequent proceeding); Prudential Real Estate v. Croushore, 204 F.3d 867 (9 1h Cir. 2000) (applying California law; judgment against franchisee does not bind franchisor); Vega v. 1h .lones, Day, Reavis & Pogue. 121 Cal.AppA 282, 298-299 (2004) (fraud claim by shareholder \vas not barred by identical prior lawsuits brought by other fomler shareholders represented by the same counsel). Nor does a common interest in property rights justify binding a non-party to a lawsuit. See Lynch v. Glass, 44 Cal.App.3d 943, 949 (1975) (prior judgment against property developer finding no public easement did not bind property owners claiming same right). Accordingly, due process, as well as California res judicata law, bars the City from applying the writ proceeding judgment against Amerco Real Estate Company. See Garcia v. Rehrig lntt!rat, Inc., 99 CaLApp.4th 869, 877, (2007) ("This requirement of identity of parties or privity is a requirement of due process of law.").
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1 during the pendency of and until the resolution of the appeaL").'

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Here, U-Haul filed a Notice of Appeal of the state court judgment on June 6,

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2008. The City falsely asserts that "U-Haul's time to appeal that judgment expired 4
on April 8,2008." City's Memorandum, p. 2. In fact, the California Court of
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Appeal rejected the City's argument and denied its motion to dismiss the appeal as

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untimely. See Plaintiffs' Request for Judicial Notice, Exhs. B-D.
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Thus, the judgment in the state court writ proceeding is on appeal, and cannot have any res judicata effect. This alone is sufficient to invalidate the City's res judicata argument.

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b. This Action Is Based On Different Primary Rights From the State Court Writ Proceeding
The City's res judicata argument also fails for a second, independent reason, in that this action is based on different primary rights from those presented in the
state court writ proceeding.

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As set forth in detail in Section II above, the City selectively quotes from the

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Complaint and ignores key allegations so that it can characterize the Complaint as 18
a "collateral attack on the state court judgment." City's Memorandum, p. 2.

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In fact, the two proceedings are very different. The state court judgment was


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a denial of a petition for a writ of mandate; it is "technically not regarded as an

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action at all. It is, instead, described as a special proceeding." Mara v. Ciry ofLos


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Angeles, 20 Cal.AppA,h 141, 149 (1993). Such a special proceeding involves a
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deferential standard of review, and decides only whether there is sufficient

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evidence in the administrative record to support the administrative agency's (in this


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Nor is U-Haul of Califomi a's voluntary dismissal without prejudice of its complaint in 27
that action a final judgment for res judicata purposes. See Datta v. Staab, 173 CaLApp.2d 613. 620 (1959) (where dismi ssal is not in exchange for some consideration, it is not a final judgment
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for res judicata purposes).

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instance, the City Council's) detennination. See California Code of Civil

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Procedure § 1094.5.
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In Mata, the California Court of Appeal held that the plaintiff, a police
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officer who alleged he was wrongfully tenninated, was not barred from pursuing

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his civil rights action by reason of his prior writ petition seeking reinstatement. 6
See 20 Cal.AppAth at 149.
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In the writ proceeding, U-Haul was not permitted to introduce any evidence 8
that was not in the administrative record - a record generated at a City Council 9
meeting where witnesses were not sworn, "testimony" was by narrative statement 10
and/or hearsay, subpoenas could not be issued, and other basic due process protections were not available. In Healing v. California Coastal Com., 22 Cal.AppAth 1158, 1171 (1994),
the California Court of Appeal specifically held that an adverse decision on a
petition for writ of mandamus did not bar a takings claim. See id., 22 Cal.AppA th
at 1171 ("review by way of administrative mandate is not an adequate substitute for a court trial of the takings issues raised by an inverse condemnation claim."). The Healing court explained: "The question, then, is whether a trial court can detennine taking
liability based upon an administrative record created under circumstances where, as the Commission concedes, witnesses are not sworn, testimony is not presented by means of direct or cross-examination but rather by narrative

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statements, and the Commission does not have the authority to issue subpoenas or compel anyone to attend its hearing. Our review of the cases relied upon by the Commission does not support the Commission's position that an administrative mandate hearing is a satisfactory substitute for a trial."

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Jd., citing United States v. Utah Constr. Co., 384 U.S. 394, 422, 86 S.C!. 1545,
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1560, 16 L.Ed.2d 642 (1966) (administrative agency's factual detenninations have
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collateral estoppel effect only if the agency was acting in ajudicial capacity); Allen
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v. Mce",.,}" 449 U.S. 90, 95, 101 S.C!. 411,415, 66 L.Ed.2d 308 (1980)


2
(administrative agency's factual determinations satisfY basic concepts of due

3
process only if the party aggrieved had a full and fair opportunity to litigate his
4
claim).


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"Time has shown, we think, that although a landowner may be required to

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exhaust his administrative remedies by giving the Commission an opportunity to 7
take the appropriate action, and to pursue a petition for a writ of mandate to afford

8
the court an opportunity to declare a condition or a pemlit denial invalid, neither of
9
those procedures provides a satisfactory substitute for an evidentiary trial on the 10
takings issues." [d., 22 CaI.App.4,h at 1177.
II


In addition to the due process concems, the Healing court noted that the
issues on the writ petition were not the same as those presented by an inverse

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condemnation claim. See id. ("the mere fact that the regulation at issue has a legitimate public purpose is not a sufficient reason to deny compensation to the property owner whose land is rendered useless by the regulation.") "To win its case on the taking issue (as opposed to what it takes to prove that it properly denies a permit in the first instance), the Coastal Commission would have to do more than proffer the legislature's declaration that the use Healing desires is inconsistent with the public interest, or the conclusory assertion that Healing's proposed use might somehow injure the land of another. The
Commission, just because it says so, cannot transform private property without

22

23


compensation. To the contrary, the Commission can defeat Healing's takings

24
claim only if it is able to show that, by its refusal to issue a permit, it is taking
25
nothing from Healing. ['\I] These are questions for a court of law to decide at an 26
evidentiary trial, not by mandamus review of an administrative record of
27
proceedings where the parties' right to present evidence was limited by the very

28
nature of the administrative process." [d., 22 CaI.App.4,h at 1174, citing Lucas.
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Here, too, the issues and evidence presented in this action are very different from the writ proceeding behind which the City seeks to hide. The writ proceeding merely addressed the question of whether the City Council's decision to revoke the Use Permit was supported by the evidence in the administrative record. As discussed in Healing, that is a different question from whether a taking has occurred. In addition, the Complaint herein alleges more than just a takings claim. The writ proceeding did not, and could not, decide whether the City's other actions and inactions alleged herein were proper or - as Plaintiffs assert, and as the Court must accept as true for purposes of a motion to dismiss - discriminatory and

7
8 9 10 11 12 13 14 15 16

retaliatory in violation of the Fifth and Fourteenth Amendments and the Commerce Clause of the United States Constitution, and/or the Civil Rights Act. Nor did the writ proceeding, or could it, address whether the City complied with the California Environmental Quality Act. These claims present different factual and legal questions that call for evidence that was not available in the writ proceeding. Even if the claims made in the Complaint were based on that same facts

17
19

18
which they are not - they would still not be subject to res judicata, because they
involve different primary rights. See Agarwal, 25 Ca1.3d at 954 ("Under the
'primary rights' theory adhered to in California it is true there is only a single
cause of action for the invasion of one primary right. But the significant factor is
the harm suffered; that the same facts are involved in both suits is not conclusive.")
(citations omitted).
In Agarwal, the California Supreme Court held that a federal judgment against the plaintiff on his federal employment discrimination claims did not bar his state court action against the employer and individual supervisors for defamation and intentional infliction of emotional distress. "While the federal

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25 26

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action was based on the same underlying facts as the instant case, it does not

follow that the federal judgment is res judicata." Id., 25 Ca1.3d at 954.

3
4

Similarly, in Hernandez v. City ofPomona, 145 Cal.AppA'h 701 (2006), the decedent Hernandez had been shot by police officers of the City of Pomona. His

5 estate and family sued in federal court for violations of Hernandez's civil rights,
6 but a jury found in the City's favor. The plaintiffs then filed an action in state court asserting causes of action for negligence. The California Court of Appeal held that the federal judgment did not bar the plaintiffs' state law negligence claims, because even though they were based on the same facts, the primary rights were different. "The primary right at issue in the section 1983 action was Hernandez's right under the Fourth Amendment to be free from unreasonable seizure of his person. The primary right in the negligence action is Hernandez's right to be free from injury to his person. That some ofthe same facts are involved in both actions is not determinative; the significant factor is the nature of the harm." Id at 712 (footnotes omitted). "The nature of the harm in the former action was the violation of a constitutionally protected right. The nature of the harm in the latter action is the violation of a common law right. As the United States Supreme Court has observed, the tederal Constitution and traditional tort law 'do not address the same concerns...' Id. at 713 (footnote omitted). 23 24 25 26 27 28 Here, U-Hau!'s writ petition was brought to challenge violation of the primary right that administrative decisions must be supported by evidence in the
record. This action seeks to vindicate violations of a number of different primary

7
8
9

10 II 12 13 14 15 16 17 18 19 20

rights: constitutional rights to interstate commerce, to petition the government for
redress of grievances without retaliation, to be free fi.-om discrimination, to receive

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equal protection under the law, as well as to enforce the provisions of the

2
California Environmental Quality Act.
3

The City provides no relevant authority to the contrary. It does not cite any 4
case where a petition for writ of mandate was held to be the same primary right as 5
a civil rights, constitutional, or environmental claim. The City relies solely on 6
Boeken v. Philip Morris USA, Inc., 159 Cal.AppA th 1391 (2008), which is clearly

7

8

9


distinguishable. In Boeken, the plaintiff dismissed with prejudice her loss-of consortium claim against the defendant tobacco company that allegedly caused her husband's terminal cancer. Her husband (who had already collected a $55.5 million judgment from the same defendant) then died, and four years later the plaintiff filed a new suit alleging wrongful death. The California Court of Appeal held that the prior dismissal with prejudice barred the wrongful death claim, because the wrongful death claim was based on the same primary right - the right
to her husband's "love, companionship, comfort, affection, society, solace, and

10
II
12
13

14


15


th 16
moral support." [d., 159 Cal.AppA at 1396. The Court of Appeal noted that 17
"plaintiff sought in her wrongful death action to recover against the same

18
defendant for the same injury caused by the same conduct, as in her prior loss-of 19
consortium action." ld. 20
21
Here, by contrast, this action addresses different injuries (an unsupported administrative decision, compared to violation of constitutional and other rights),

22
caused by different conduct (the decision to revoke the Use Permit, as compared to 23
an entire course of discriminatory conduct beginning before and continuing after
24
that one action), and different relief(U-Haul's writ petition did not seek any 25
monetary damages,' let alone the same damages authorized by the claims made

26

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U-Hauljoined its petition for a writ of mandate with a complaint for inverse condemnation, but that claim \vas never adjudicated on the merits and ,"vas voluntarily dismissed without prejudice.
4

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here).

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3 4

v.

YOUNGER ABSTENTION DOES NOT APPLY

The City's Younger abstention argument is based on a distortion of both

Younger doctrine and the Complaint itself. Moreover, even if Younger were

5 otherwise applicable, it is well-established that Younger may not be invoked where
6 7 8
9

_ as is alleged here -- the state is engaging in harassment or other bad faith conduct.

a. This Action Does Not Interfere With Ongoing State Proceedines
Contrary to the City's portrayal, the existence of a past or present state court action between two parties does not bar the party from ever bringing an otherwise valid claim in federal court, Under the City's theory, Younger would bar a federal civil rights lawsuit against a Berkeley police officer who shoots a driver as long as the driver was also issued a traffic citation in state court. In fact, under the City's interpretation, any driver who has ever received a speeding ticket that was not appealed in state court will never be able to seek relief against the City in federal court on any matter whatsoever. Such an absurd result cannot be the law, and indeed it is not the law. The purpose of Younger is to prevent "federal court interference with state court proceedings." Younger v. Harris, 401 U.S. 37, 43 (1971).

10

I1
12 13 14 15 16 17 18 19 20 21

22
23 24
O' -)

"[A ]bstention from the exercise of federal jurisdiction is considered an
extraordinary and narrow exception to the duty ofa District Court to adjudicate the controversy properly before it. Accordingly, the balance must always tip heavily in favor of exercising jurisdiction." Bud Antle. Inc. v. Barbosa, 45 F.3d 1261, 1272 (9'" Cir. 1995).

26 27

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1

There must be a sufficient connection between the federal action and an


2
ongoing state coutt proceeding. See Gilbertson v. Albright, 381 F.3d 965, 979 n.14

3
(9th Cir. 2004) (abstention is not warranted where "the underlying federal claims

4
were 'wholly unrelated' to the issues in the pending state proceeding.").


5


Here, the City fails to atticulate any such connection, nor does it explain how

6
this action would "interfere" with any state coutt proceeding. Presumably the City 7
is resotting to its false characterization of the Complaint as a mere "collateral 8
attack" on the state coutt writ proceeding. But as the City recently told the 9
Alameda County Superior Coutt, this action "does not - and could not - seek to 10
directly ovetturn the City's revocation ofU-Haul's Use Pelmit."
11

As shown in Section II, this action is based on a series of actions and

12
13
14
15
16
17
18


inactions by the City that have violated multiple rights of the Plaintiffs. The City cannot simply point to a state coutt proceeding in which U-Haul sought to exhaust
its administrative remedies and claim that it is not exempt from answering for its

violations of those rights.
b. The Bad Faith Exception Wonld Apply

Younger abstention is not applicable in actions which allege - as the


Complaint here does - that the state coutt proceedings were brought to harass. See
19
20
Huffman v. Pursue, Ltd., 420 U.S. 592, 611, 95 S.C!. 1200,43 L.Ed.2d 482 (1975)
21
("Younger, and its civil counterpatt which we apply today, do of course allow
intervention in those cases where the District Court properly finds that the state
proceeding is motivated by a desire to harass or is conducted in bad faith, or where
the challenged statute is 'flagrantly and patently violative of express constitutional

prohibitions in every clause, sentence and paragraph, and in whatever manner and


22

23


24
25
26
28


against whomever an effort might be made to apply it.'" ); Gibson v.

Ber~vhill,

411


27
U.S. 564 (1973) (affirming district court's refusal to abstain; state optometry board


was acting on bias and self interest); Flowers v. Seki, 87 F.3d 13 18 (9'" Cir. 1996)

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(no abstention where defendants acted in bad faith); Cullen v. Fliegner, 18 F.3d 96, 104 (2"' Cir. 1994) ("[A] showing of retaliatory or bad faith prosecution
establishes irreparable injury for the purposes of the Younger doctrine....").


4
5

VI.

THE COMPLAINT STATES A VALID CLAIM FOR
COMMERCE CLAUSE VIOLATIONS


has discriminated against out of state residents.'" City's Memorandum, p. 12, quoting Complaint 1]45. There is a good reason why the City did not quote the beginning of paragraph 45 of the Complaint. It alleges that "[b]y the Gcts Gnd
omissions described herein, Defendant has placed an unreasonable burden on

interstate commerce...." Complaint, 1]45 (emphasis added). As explained in Section II above, the Complaint alleges acts and omissions beyond simply the decision to revoke the Use Permit. Second, the City adopts the bold tactic of asking the Court to dispense with 20 21 22 23 24 25 26 27
28

the formalities of evidence and due process and simply assume that the City is right. The City cites several cases upholding zoning and other local ordinances from aUack on Commerce Clause grounds, and then apparently expects the Court to conclude that therefore no state action that has any connection whatsoever to a zoning ordinance could possibly violate the Commerce Clause. Once again, the City is flailing away at a straw man. Plaintiffs have not alleged that the City's zoning ordinance is facially invalid under the Commerce Clause. Rather, Plaintiffs allege that the City's overall illegal and discriminatory

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campaign against U-Haul has placed an unreasonable burden on interstate commerce. See Complaint, ~~ 43-46. Acts that are by themselves constitutional may be unconstitutional if they are part of an overall scheme to burden interstate commerce. See West Lynn Creamery, Inc. v. Healy, 512 U.S. 186, 114 S.C!. 2205,

2 3 4 6

5 129 L.Ed.2d 157 (1994) (by themselves, neither a neutral nondiscriminatory tax on
all milk sales, nor a subsidy to in-state dairy farmers would violate the Commerce Clause, but the combined scheme was "clearly unconstitutional"). Similarly, an otherwise valid law may be applied in a way that violates the Commerce Clause.

7
8
9

See H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 69 S.C!. 657, 93 L.Ed. 865
(1949) (denial oflicense was an invalid application oflaw). Simply put, the City cannot discriminate against interstate commerce and
then simply say "the zoning ordinance made me do it" and escape consequences.

10
II

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

Courts are not so naive as the City suggests, and do not simply accept a defendant's protestation of its own good motives. For example, while acknowledging the "unquestioned power to protect the health and safety of its people," the United States Supreme Court overturned a local ordinance that required milk sold in the city to be processed at local pasteurization plants. "A different view, that the ordinance is valid simply because it professes to be a health measure, would mean that the Commerce Clause of itself imposes no limitations on state action other than those laid down by the Due Process Clause, save for the rare instance where a state artlessly discloses an avowed purpose to discriminate against interstate goods." Dean Milk Co. v. Madison, 340 U.S. 349, 71 S.C!. 295, 95 L.Ed. 329 (1951); Kassel v. Consolidated Freightways Corp., 450 U.S. 662, 101 S.C!. 1309, 67 L.Ed.2d 580 (l981) ('·the incantation of a purpose to promote the public health or safety does not insulate a state law from Commerce Clause
-k attal: .") .

28
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Furthermore, these principles have been held applicable to implementation

2
3 4 5 6 7

and enforcement of zoning and similar ordinances. See Blue Circle Cement. Inc. v.

Board of County Commissioners, 27 F.3d 1499, 1511 (10th Cir. 1994) (the
"dormant Commerce Clause ... prohibits a state or local 'statute [that] regulates evenhandedly to effectuate a legitimate public interest' ifit imposes a burden on
interstate commerce that is 'clearly excessive in relation to the putative local

benefits."); Pittston Warehouse Corp. v. Cit)' ofRochester, 528 F.Supp. 653, 662 63 (W.D.N.Y. 1981) (holding that zoning ordinances were unconstitutional and invalid under Commerce Clause; "it has long been established that a state or locality 'may not enforce any law, the necessary effect of which is to prevent, obstruct, or burden interstate commerce."'), citing LaCost v. Louisiana Dept. of

8
9

10 11 12 13
14

Conservation, 263 U.S. 545, 44 S.C!. 186,68 L.Ed.437 (1924); Colorado Manufactured Housing v. Board ofCounty Commissioners, 946 F.Supp. 1539,


1555 (0. Colo. 1996) (denying summary judgment because material issue offact 15
16 existed as to comparison of burden on interstate commerce to local benefits).
17 18 19 20 21
22 23

VII. THE COMPLAINT STATES A VALID CLAIM FOR CEQA
VIOLATIONS
In its attack on the sixth cause of action for violation of the California Environmental Quality Act (CEQA), the City once again appears to expect the Court to simply rubber-stamp what the City has "decided." The City states that "[b]ecause the City's action in revoking U-Hau!'s use permit was categorically exempt from CEQA, no analysis was required." City's Memorandum, p. 15. However, the fact that the City allegedly determined that its
action was "categorically exempt" does not immunize it from judicial revie\v.

24 25 26 27 28

The same CEQA Guidelines that establish the "categorical exemptions," including the exemption upon which the City relies (§ 15321), also provide for

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exceptions to those exemptions. Among other things, "[a] categorical exemption

2 shall not be used for an activity where there is a reasonable possibility that the
3 4
activity will have a significant effect on the environment due to unLlsual circumstances." CEQA Guidelines § 15300.2(c). Here, Plaintiffs allege that, among other things, "[t]he availability of V-Haul vehicles acts to reduce the number of large capacity vehicles in and around Berkeley. Each V-Haul truck helps keep nineteen privately owned large capacity vehicles off the road. This in tum reduces greenhouse gas emissions." Complaint,
~

5
6
7

8
9

19. The Complaint further alleges that "V-Haul's location at San Pablo ... is
~

10
II

key to V-Haul's role in reducing carbon dioxide emissions." Id.,

21.

12 13 14 15 16 17 18 19 20 21

Accordingly, the City's actions have "caused an increase in carbon dioxide

emissions and hamlful greenhouse gas emissions by requiring residents seeking the use of moving trucks ... to instead buy such trucks or obtain them from dealers at more remote locations." Id.,
~

54. These and other allegations of the Complaint,

see, e.g.,

~~

1,9, 16-20, which must be assumed to be tlUe for purposes oflhis

motion, are more than sufficient to establish a "reasonable possibility" of a

"significant effect on the environment." Thus, Plaintiffs have stated a valid cause of action under CEQA. See Lewis v. Seventeenth District Agricultural Assoc., 165 Cal.App.3d 823, 831 (1985) (affirming cancellation of agricultural associations' contract with auto racing association; categorical exemption did not apply because

22 the existence of a nearby residential area constituted an "unusual circumstance"
23 24 25 26 27 28 sufficient to invoke 15300.2(c)). The City's assertion that the sixth cause of action is time-barred is also wrong. Although the City Council voted to revoke the Use Permit on October 10, 2007, that decision was stayed by the Alameda County Superior Court, which operated to toll the limitations period. Thus this action was filed well within the

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180 day limitations period. See Cervantes v. City a/San Diego, 5 F.3d 1273, 1275


2
(9'h Cir. 1993) (dismissal can be granted "only if the assertions of the complaint,
3
read with the required liberality, would not permit the plaintiff to prove that the


4
statute had been tolled.") (internal quotations omitted).

5


VIII. CONCLUSION
For the reasons set forth above, the Court should deny the City's motion. In the alternative, if the motion is granted in whole or in part, the Court should grant Plaintiffs leave to file an amended complaint.

6

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II
DATED: August 12
13

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IL 2008

LAPIDUS & LAPIDUS A PROFESSIONAL LA W CORPORAnON

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