Cornelia Martinez et al v. Optimus Properties, Llc et al

NOTICE OF MOTION AND MOTION to Dismiss Plaintiffs' Action For Failure To State A Claim Upon Which Relief Can Be Granted

C.D. Cal.January 6, 2017

1 DEFENDANTS NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ ACTION PURSUANT TO FRCP 12(b)(6)) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 # Thomas H. Citron, Esq., State Bar No. 182142 thomas.citron@citronlaw.com Katherine A. Tatikian, Esq., State Bar No. 142665 katherine.tatikian@citronlaw.com CITRON & CITRON 3420 Ocean Park Boulevard, Suite 3030 Santa Monica, CA 90405 Telephone: (310) 450-6695; Facsimile: (310) 450-3851 Attorneys for Defendants OPTIMUS PROPERTIES, LLC; ROXBURY VENTURES, LLC; SOUTH KENMORE PROPERTIES, LLC; SOUTH NORMANDIE PROPERTIES, LLC; NORMANDIE LINDEN, LLC; MAGNOLIA AVENUE PROPERTIES, LLC; MARIPOSA/8TH STREET PROPERTIES, LLC; JEROME MICKELSON UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION, LOS ANGELES CORNELIA MARTINEZ, an individual; et al., Plaintiffs, v. OPTIMUS PROPERTIES, LLC, a limited liability company; et al., Defendants. This motion is made following the conference of counsel pursuant to L.R. 7-3 which took place on Wednesday, December 28, 2016. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No.: 2:16-cv-08598-SVW-MRW Assigned To Honorable Steven V. Wilson, District Judge, First Street Courthouse, Courtroom 10A; Also Assigned To Honorable Michael R. Wilner, Magistrate Judge, Edward R, Roybal Federal Building, Courtroom 550 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S ACTION FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED (FRCP 12(b)(6)) Hearing: Date: Monday, February 27, 2017 Time: 1:30 p.m. Place: First Street Courthouse; Courtroom 10A, 10th Floor Judge: Hon. Steven V. Wilson Case 2:16-cv-08598-SVW-MRW Document 38 Filed 01/06/17 Page 1 of 3 Page ID #:190 2 DEFENDANTS NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ ACTION PURSUANT TO FRCP 12(b)(6)) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 # TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on Monday, February 27, 2017 at 1:30 p.m., in Courtroom 10A on the 10th Floor of this Court, located in the First Street Courthouse, 350 West 1st Street, Los Angeles, CA 90012, Defendants OPTIMUS PROPERTIES, LLC; ROXBURY VENTURES, LLC; SOUTH KENMORE PROPERTIES, LLC; SOUTH NORMANDIE PROPERTIES, LLC; NORMANDIE LINDEN, LLC; MAGNOLIA AVENUE PROPERTIES, LLC; MARIPOSA/8TH STREET PROPERTIES, LLC and JEROME MICKELSON, will move this Court to dismiss Plaintiffs’ action pursuant to Federal Rule of Civil Procedure 12(b)(6) on the ground that the Complaint fails to state a claim against Defendants upon which relief can be granted. These claims include: (1) “Violations of the Fair Housing Act, 42 U.S.C. §§ 3601-3619; 24 C.F.R. §§ 100.60-100.85”; (2) “Violations of the California Fair Employment and Housing Act, Cal. Gov’t Code §§12900-12996”; (3) “Violations Of The Unruh Civil Rights Act, Cal. Civ. Code §51”; (4) “Statutory Habitability Claims, Cal. Civ. Code §1941.1; Cal. Health And Safety Code §17920.3”; (5) “Breaches Of Quiet Enjoyment, Cal. Civ. Code §1927”; (6) “Private Nuisance, Cal. Civ. Code §3479”; (7) “Negligence, Cal. Civ. Code §1714”; (8) “Charging LARSO Excessive Rent, L.A. Mun. Code §151.10(A)”; (9) “Violation Of Anti-Harassment Statutes, Cal. Civ. Code §1940.2”; (10) “Retaliation, Cal. Civ. Code §1942.5(c)”; (11) “Unfair Competition, Cal. Bus. & Prof. Code §§17200-17210”; (12) “Punitive Or Exemplary Damages.” Therefore, Defendants respectfully request this Court to dismiss these claims and Plaintiffs’ action with prejudice pursuant to Federal Rule Of Civil Procedure 12(b)(6). Case 2:16-cv-08598-SVW-MRW Document 38 Filed 01/06/17 Page 2 of 3 Page ID #:191 3 DEFENDANTS NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ ACTION PURSUANT TO FRCP 12(b)(6)) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 # In the alternative, Defendants request this Court to dismiss any cause of action included in the Complaint which this Court determines fails to state a claim on which relief may be granted. This motion will be based on (1) this Notice of Motion and Motion, (2) the Memorandum of Points and Authorities filed herewith, (3) Defendants’ Reply to any Opposition Plaintiffs may file to this motion, (4) Plaintiffs’ “Complaint For Damages, Declaratory and Injunctive Relief,” filed in this action on November 17, 2016, (5) all other pleadings and papers on file in this action and (6) the oral argument at the hearing of this motion. This motion is made following the conference of counsel pursuant to L.R. 7-3 which took place on Wednesday, December 28, 2016. Dated: January 6, 2017 CITRON & CITRON By: /s/ Katherine A. Tatikian THOMAS H. CITRON KATHERINE A. TATIKIAN Attorneys for Defendants OPTIMUS PROPERTIES, LLC; ROXBURY VENTURES, LLC; SOUTH KENMORE PROPERTIES, LLC; SOUTH NORMANDIE PROPERTIES, LLC; NORMANDIE LINDEN, LLC; MAGNOLIA AVENUE PROPERTIES, LLC; MARIPOSA/8TH STREET PROPERTIES, LLC; JEROME MICKELSON Case 2:16-cv-08598-SVW-MRW Document 38 Filed 01/06/17 Page 3 of 3 Page ID #:192 1 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7921 Thomas H. Citron, Esq., State Bar No. 182142 thomas.citron@citronlaw.com Katherine A. Tatikian, Esq., State Bar No. 142665 katherine.tatikian@citronlaw.com CITRON & CITRON 3420 Ocean Park Boulevard, Suite 3030 Santa Monica, CA 90405 Telephone: (310) 450-6695; Facsimile: (310) 450-3851 Attorneys for Defendants OPTIMUS PROPERTIES, LLC; ROXBURY VENTURES, LLC; SOUTH KENMORE PROPERTIES, LLC; SOUTH NORMANDIE PROPERTIES, LLC; NORMANDIE LINDEN, LLC; MAGNOLIA AVENUE PROPERTIES, LLC; MARIPOSA/8TH STREET PROPERTIES, LLC; JEROME MICKELSON UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION – LOS ANGELES CORNELIA MARTINEZ, an individual; et al., Plaintiffs, v. OPTIMUS PROPERTIES, LLC, a limited liability company; et al., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No.: 2:16-cv-08598-SVW-MRW Assigned To Honorable Steven V. Wilson, District Judge, First Street Courthouse, Courtroom 10A; Also Assigned To Honorable Michael R. Wilner, Magistrate Judge, Edward R, Roybal Federal Building, Courtroom 550 DEFENDANTS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ ACTION FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED (FRCP 12(b)(6)) Hearing: Date: Monday, February 27, 2017 Time: 1:30 p.m. Place: First Street Courthouse; Courtroom 10A, 10th Floor Judge: Hon. Steven V. Wilson Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 1 of 37 Page ID #:193 i DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7921 TABLE OF CONTENTS I. INTRODUCTION AND SUMMARY OF ARGUMENT……………………...2 II. STATEMENT OF FACTS……………………………………………….……....2 III. PLAINTIFFS’ CLAIMS ARE NOT LEGALLY COGNIZABLE…………….2 IV. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “VIOLATIONS OF THE FAIR HOUSING ACT, 42 U.S.C. §§3601-3619; 24 C.F.R. 100.60-100.85”…………………………….2 A. Plaintiffs’ Attempt To Impose Liability On Defendants For Renovating Vacated Units Pursuant To Defendants’ Purported “Koreatown Strategy” Is Not Legally Cognizable And Is Against Public Policy……………………………………………………2 B. Plaintiffs’ Attempt To Impose Liability On Defendants For Making Upgrades And “Extensive Renovations” To Units Rented By New Tenants Is Not Legally Cognizable……………………..4 C. Plaintiffs’ Attempt To Impose Liability On Defendants For Serving Eviction Notices And Threatening Them With Eviction Is Not Legally Cognizable…………………………………………………6 D. Plaintiffs’ Attempt To Impose Liability On Defendants Based On Rules Prohibiting Children From Playing In Hallways And/Or On Stairways Are Contrary To Law And Are Not Legally Cognizable…………………………………………7 E. Plaintiffs’ Attempt To Impose Liability On Defendants For Requiring Rent Payments To Be Paid On The First Of The Month And/Or Made By Mail, In Person At Defendants’ Offices Or Through An On-Line System Instead Of To On-Site Drop Box Or On-Site Manager, Is Not Legally Cognizable…………………...9 F. Plaintiffs’ Attempt To Impose Liability On Defendants For Failing to Post Or Explain Notices In Spanish Is Not Legally Cognizable………………………………………………..10 Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 2 of 37 Page ID #:194 ii DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7921 TABLE OF CONTENTS (cont.) G. Plaintiffs’ Attempt to Impose Liability On Defendants For Advertising Apartment Rentals On Websites Such As “Radpad, Hotpads” And “Walk Score” Is Neither Plausible Nor Legally Cognizable…………………………………………………..11 V. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “VIOLATIONS OF THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, CAL. GOV’T CODE §§12900-12966 [‘FEHA’]”………………………………………………………13 A. Plaintiffs FEHA Claim Is Not Legally Cognizable For The Same Reasons As Their FHA Claim………………………………..13 B. Plaintiffs’ Attempt To Base FEHA Liability On Defendants’ Service of Eviction Notices Is Barred By California’s Litigation Privilege – Cal. Civil Code §47(b)…………………………...14 VI. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “VIOLATIONS OF THE UNRUH CIVIL RIGHTS ACT, CAL. CIV. CODE §51”…………………………………………………...15 VII. PLAINTIFFS FAIL TO STATE PLAUSIBLE, LEGALLY COGNIZABLE “STATUTORY HABITABILITY CLAIMS, CAL. CIV. CODE §1941.1; CAL. HEALTH AND SAFETY CODE §17920.3”………………………………………………………………...16 VIII. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “BREACHES OF QUIET ENJOYMENT, CAL. CIV. CODE §1927”……………………………………………………….18 A. Plaintiffs Do Not Allege Any Legally Cognizable Basis For Imposing Liability Based On Civil Code §1927………………………...18 B. Plaintiffs Provide No Basis For Their “Unlawful Rent Increase” Claims; Even If They Had, Such Claims Would Not Be Sufficient To Impose §1927 Liability…………………..18 Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 3 of 37 Page ID #:195 iii DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7921 TABLE OF CONTENTS (cont.) IX. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “PRIVATE NUISANCE, CAL. CIV. CODE §3479”…………19 X. PLAINTIFFS FAIL TO STATE A PLAUSIBLE, LEGALLY COGNIZABLE CLAIM FOR “NEGLIGENCE, CAL. CIV. CODE §1714”……………………………………………………….20 XI. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “CHARGING LARSO EXCESSIVE RENT, L.A. MUN. CODE §151.10(A)”…………………………………………………21 XII. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “VIOLATION OF ANTI-HARASSMENT STATUTES, CAL. CIV. CODE §1940.2”……………………………………...21 XIII. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “RETALIATION, CAL. CIV. CODE §1942.5(c)”……………23 XIV. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE “UNFAIR COMPETITION, CAL. BUS. & PROF. CODE §§17200-17210” CLAIM………………………………………………………..24 A. Plaintiffs Have Not Alleged Any Unlawful, Unfair Or Fraudulent Business Act Or Practice…………………………………...24 B. Plaintiffs Have Not Alleged Standing To Sue Pursuant To The UCL……………………………………………………24 C. The UCL Does Not Allow Recovery Of The Damages Plaintiffs Seek……………………………………………………………..25 XV. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE PUNITIVE OR EXEMPLARY DAMAGES CLAIM………………………...26 XVI. CONCLUSION…………………………………………………………………..26 Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 4 of 37 Page ID #:196 iii DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES CASES Action Apartment Ass'n, Inc. v. City of Santa Monica 41 Cal.4th 1232 (2007)…………………………………………………….14 Amos v. Alpha Property Management 73 Cal.App.4th 895 (1999)………………………………………………….8 Ashcroft v. Iqbal 556 U.S. 662 (2009)…………….................................................................2 Bell Atl. Corp. v. Twombly 550 U.S. 544 (2007)…………………………………………………………2 Berkley v. Dowds 152 Cal.App.4th 518 (2007)……………………………………………….21 Bisno v. Douglas Emmett Realty Fund 1988 174 Cal.App.4th 1534 (2009)……………………………………………...14 Black v. Dep't of Mental Health 83 Cal.App.4th 739 (2000)………………………………………………...15 Cahill v. Liberty Mut. Ins. Co. 80 F.3d 336 (9th Cir. 1996)………………………………………………..26 California Motor Transport Co. v. Trucking Unlimited 404 U.S. 508 (1972)…………………………………………………………6 Californians for Disability Rights v. Mervyn's LLC 165 Cal.App.4th 571 (2008)……………………………………………….15 Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. 20 Cal.4th 163……………………..25 City of San Diego v. U.S. Gypsum Co. 30 Cal.App.4th 575 (1994)………………………………………………...20 Coalition for ICANN Transparency Inc. v. VeriSign, Inc. 452 F.Supp.2d 924 (N.D. Cal. 2006)……………………………………...25 Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 5 of 37 Page ID #:197 iv DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (cont.) CASES (cont.) Congdon v. Strine 854 F. Supp. 355 (E.D. Pa. 1994)…………………………………………..7 Cotati Alliance for Better Housing v. City of Cotati 148 Cal.App.3d 280, 294 (1983)……………………………………………5 Dominguez v. Washington Mut. Bank 168 Cal.App.4th 714 (2008)………………………………………………...8 Durell v. Sharp Healthcare 183 Cal.App.4th 1350 (2010)……………………………………………...25 El Escorial Owners' Ass'n v. DLC Plastering, Inc. 154 Cal.App.4th 1337 (2007)……………………………………………...20 Fair Housing Advocates Ass'n, Inc. v. City of Richmond Heights, Ohio 209 F.3d 626 (6th Cir. 2000)………………………………………………..8 Feldman v. 1100 Park Lane Associates 160 Cal.App.4th 1467 (2008)………………………………………….14, 18 Fellom v. Redevelopment Agency of City and County of San Francisco, 157 Cal.App.2d 243 (1958)…………..3 Freeman v. Mazzera 150 Cal.App.2d 61 (1957)…………………………………………………..8 Frontera v. Sindell 522 F.2d 1215 (6th Cir. 1975)……………………………………………..11 Gallanis-Politis v. Medina 152 Cal.App.4th 600 (2007)……………………………………………….14 Green v. Superior Court 10 Cal.3d 616 (1974)………………………………………………………17 Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 6 of 37 Page ID #:198 v DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (cont.) CASES (cont.) Gregory Village Partners, L.P. v. Chevron U.S.A., Inc. 805 F.Supp.2d 888 (N.D. Cal. 2011)………………………………………21 Griffith v. City of Santa Cruz 207 Cal.App.4th 982 (2012)……………………………………………….17 Guerrero v. Carleson 9 Cal.3d 808 (1973)…………………………………………………….10-11 Guntert v. City of Stockton 55 Cal.App.3d 131 (1976)…………………………………………………18 Hagberg v. California Federal Bank 32 Cal.4th 350 (2004)………………………………………………….14, 22 In re Tobacco II Cases 46 Cal.4th 298 (2009)……………………………………………………...25 Khoury v. Maly's of California, Inc. 14 Cal.App.4th 612 (1993)………………………………………………...24 Kolstad v. Am. Dental Ass'n 527 U.S. 526 (1999)……………………………………………………….26 Konig v. Fair Employment and Housing Com'n 28 Cal.4th 743 (2002)……………………………………………………...13 Lawrence v. La Jolla Beach and Tennis Club, Inc. 231 Cal.App.4th 11 (2014)………………………………………………….9 Lazar v. Hertz Corp. 69 Cal.App.4th 1494 (1999)……………………………………………….15 McDaniel v. Sunset Manor Co. 220 Cal.App.3d 1 (1990)……………………………………………………9 Mangini v. Aerojet-Gen. Corp. 230 Cal.App.3d 1125 (1991)………………………………………………25 Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 7 of 37 Page ID #:199 vi DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (cont.) CASES (cont.) Marina Tenants Assn. v. Deauville Marina Development Co. 181 Cal.App.3d 122 (1986)…………………………………………....24-25 Mills v. Ruppert 167 Cal.App.2d 58 (1959)…………………………………………………..9 Moradi-Shalal v. Fireman's Fund Ins. 46 Cal.3d 287 (1988)………………………………………………………18 Moua v. City of Chico 324 F.Supp.2d 1132 (E.D. Cal. 2004)……………………………………..13 Munson v. Del Taco, Inc. 46 Cal.4th 661 (2009)……………………………………………………...15 NAACP v. Hills 412 F.Supp. 102 (N.D. Cal. 1976)…………………………………………..3 Oei v. N. Star Capital Acquisitions, LLC 486 F.Supp.2d 1089 (C.D. Cal. 2006)……………………………….........26 People v. Bailey 2014 WL 7066049 (Cal. Ct. App., Dec. 12, 2014, No. A141231)……………………………………………………………...10 People v. Namchek 2015 WL 275602 (Cal. Ct. App., Jan. 21, 2015, No. 2D CRIM. B257788)………………………………………………….10 People v. Vega, 2003 WL 22022021 (Cal. Ct. App., Aug. 28, 2003, No. A098571)……………………………………………..10 People ex rel Gallegos v. Pacific Lumber Co. 158 Cal.App.4th 950 (2008)……………………………………………….22 Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 8 of 37 Page ID #:200 vii DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (cont.) CASES (cont.) People To End Homelessness, Inc. v. Develco Singles Apartments Associates 339 F.3d 1 (1st Cir. 2003)………………………………………………….16 Peterson v. Cellco Partnership 164 Cal.App.4th 1583 (2008)……………………………………………...24 Peterson v. Superior Court 10 Cal.4th 1185 (1995)…………………………………………………….17 Reno v. ACLU 521 U.S. 844 (1997)……………………………………………………11-12 Robison v. Six Flags Theme Parks, Inc. 64 Cal.App.4th 1294 (1998)………………………………………………..9 Sabi v. Sterling 183 Cal.App.4th 916 (2010)……………………………………………….16 San Diego Gas & Electric Co. v. Superior Court 13 Cal.4th 893 (1996)……………………………………………………...20 Shroyer v. New Cingular Wireless Services, Inc. 622 F.3d 1035 (9th Cir. 2010)………………………………………………2 Slaughter v. Friedman 32 Cal.3d 149 (1982)………………………………………………………22 Stockton Theatres, Inc. v. Palermo 124 Cal.App.2d 353 (1954)………………………………………………..18 Trujillo v. First Am. Registry, Inc. 157 Cal.App.4th 628 (2007)……………………………………………….24 United States v. Hillhaven Corp. 960 F. Supp. 259 (D. Utah 1997)…………………………………………...9 Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 9 of 37 Page ID #:201 viii DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (cont.) CASES (cont.) United States v. Hunter 459 F.2d 205 (4th Cir.), cert. denied, 409 U.S. 934 (1972)…………..11-12 Van Buren v. Mark L. ex rel. Mark L. 15 N.Y.S.3d 715 (N.Y. Sup. Ct. 2015)……………………………………..8 Vess v. Ciba-Geigy Corp. USA 317 F.3d 1097 (9th Cir. 2003)……………………………………………..24 Wiener v. Southcoast Childcare Centers, Inc. 32 Cal.4th 1138 (2004)……………………………………………………...9 White v. Lee 227 F.3d 1214 (9th Cir. 2000)………………………………………………7 FEDERAL STATUTES FHA………………………………………………………………………………..13 United States Code 42 U.S.C. §§3601-3619…………………………………………………….2 42 U.S.C. §3604……………………………………………………………..3 42 U.S.C. §3604(c)…………………………………………………………11 42 U.S.C. §3604(f)(1)……………………………………………………….7 42 U.S.C. §3617……………………………………………………………..7 42 U.S.C. §5301(c)………………………………………………………….3 Federal Rules of Civil Procedure Rule 9(b)…………………………………………………………………...24 Rule 12(b)(6)……………………………………………………………2, 26 FEDERAL REGULATIONS Code of Federal Regulations 24 C.F.R. 100.60-100.85…………………………………………………….2 36 C.F.R. §702.2…………………………………………………………….8 Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 10 of 37 Page ID #:202 ix DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (cont.) CALIFORNIA CONSTITUTION Art. 11, §7………………………………………………………………………...14 CALIFORNIA STATE STATUTES Business & Professions Code §§17200-17210 (“UCL”)…………………………………………………..24 § 17203……………………………………………………………………25 § 17204…………………………………………………………………….24 Civil Code § 47(b)……………………………………………………………………..14 § 51………………………………………………………………………...15 § 51.5………………………………………………………………………15 § 52………………………………………………………………………...15 § 54.3………………………………………………………………………15 § 1714……………………………………………………………………..20 § 1927……………………………………………………………………..18 § 1940.2………………………………………………………………..21-22 § 1941.1…………………………………………………………………...16 § 1942.5(a)………………………………………………………………...23 § 1942.5(c)………………………………………………………………...23 § 1942.5(d)………………………………………………………………...23 § 1947.3(a)(1)……………………………………………………………..10 § 1947.15…………………………………………………………………...5 § 1962(f)…………………………………………………………………..10 § 3294……………………………………………………………………..26 § 3479……………………………………………………………………..19 Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 11 of 37 Page ID #:203 x DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (cont.) CALIFORNIA STATE STATUTES (cont.) Government Code FEHA………………………………………………………………13-14, 16 §§ 12900-12966……………………………………………………………13 Health & Safety Code § 17920.3……………………………………………………………...16-17 §§ 17980.1, et seq………………………………………………………….17 §§ 33030—33034…………………………………………………………...3 § 33037(a)………………………………………………………………….3 CALIFORNIA REGULATIONS 13 CCR §1861……………………………………………………………………7-8 LOS ANGELES MUNICIPAL CODE LARSO…………………………………………………………………...4-6, 19, 21 § 151.02…………………………………………………………………………...5 § 151.06(C)(1)…………………………………………………………………….4 § 151.06(D)………………………………………………………………….19, 21 § 151.07(A)(6)………………………………………………………………19, 21 § 151.09(A)(1)……………………………………………………………………6 § 151.09(A)(2)……………………………………………………………………6 § 151.10(A)………………………………………………………………………21 CALIFORNIA JURY INSTRUCTIONS CACI 3060………………………………………………………………………..15 TREATISES John Paul Hanna and David Van Atta, California Common Interest Developments: Law and Practice §24:26 (2015 ed., August 2016 Update)…………………………………………….8 11 Witkin, Summary of Cal. Law (9th ed. 1990) Equity, § 122………………….20 Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 12 of 37 Page ID #:204 2 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION AND SUMMARY OF ARGUMENT Plaintiffs have not stated a claim on which relief can be granted. II. STATEMENT OF FACTS The 15 individual Plaintiffs are residents of 5 apartment buildings [C ¶¶14-28, 4:18-6:11] in which the 8 Defendants allegedly have an interest. [C ¶¶31-38, 7:4-8:6] The 2 organizational Plaintiffs – SAJE and Step-Up – allegedly provide services to Plaintiffs. [C ¶¶29-30, 6:12-7:3] III. PLAINTIFFS’ CLAIMS ARE NOT LEGALLY COGNIZABLE. A Complaint should properly be dismissed pursuant to Rule 12(b)(6) where, as here, “there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory.” Shroyer v. New Cingular Wireless Services, Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). Ashcroft v. Iqbal, 556 U.S. 662, 678-679 (2009) (only a complaint that states a plausible claim for relief survives a motion to dismiss); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545, 562-563 (2007) (dismissal for failure to state a claim upon which relief can be granted does not require appearance, beyond a doubt, that plaintiff can prove no set of facts in support of claim that would entitle him to relief). IV. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “VIOLATIONS OF THE FAIR HOUSING ACT, 42 U.S.C. §§3601- 3619; 24 C.F.R. 100.60-100.85.” A. Plaintiffs’ Attempt To Impose Liability On Defendants For Renovating Vacated Units Pursuant To Defendants’ Purported “Koreatown Strategy” Is Not Legally Cognizable And Is Against Public Policy. Plaintiffs describe Koreatown as a “neighborhood” which has “historically been characterized by dilapidated but architecturally distinct housing stock . . . .” [C ¶51, 10:24-26] They claim Defendants’ putative “Koreatown Strategy” -- renovating vacated units – is “motivated by discriminatory intent based on the Individual Plaintiffs’ membership in protected classes [Latino, families with children, mentally disabled] in Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 13 of 37 Page ID #:205 3 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 contravention of 42 U.S.C. §3604.” [C ¶429, 70:5-9; ¶438, 72:19-21] Even “if facially neutral,” they contend Defendants’ “Koreatown Strategy” has “a discriminatory impact” on them, which is “not supported by any substantial and legitimate nondiscriminatory objectives.” [C ¶429, 70:5-9] Such claims are not legally actionable. Public policy mandates renovation and redevelopment of such “dilapidated” areas by private enterprise. Cal. Health & Safety Code §33037(a), entitled “Declaration of state policy,” provides that: “For these reasons it is declared to be the policy of the State: “(a) To protect and promote the sound development and redevelopment of blighted areas and the general welfare of the inhabitants of the communities in which they exist by remedying such injurious conditions through the employment of all appropriate means. * * * “(d) That the necessity in the public interest for the provisions of this part is declared to be a matter of legislative determination.” (emphasis added) This Redevelopment Law, and the public policy it embodies, is valid and constitutional even as applied to “non-slum-type ‘blighted’ areas.” Fellom v. Redevelopment Agency of City and County of San Francisco, 157 Cal.App.2d 243, 247, 250 (1958) (“We have no doubt that the Legislature, in enacting the Community Redevelopment Law, hoped that redevelopment would be possible in areas such as the Diamond Heights Area with the participation and cooperation of the owners of the property within the ‘blighted’ area”); NAACP v. Hills, 412 F.Supp. 102, 109 (N.D. Cal. 1976) (“elimination of blight is an approved objective of community development activities,” even where the development is “not primarily for the benefit of low and moderate income people”), citing Cal. Health & Safety Code §§ 33030—33034 & 42 U.S.C. §5301(c). Plaintiffs’ attempt to impose liability based on Defendants’ efforts to renovate vacated Koreatown apartments is neither plausible nor legally cognizable. Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 14 of 37 Page ID #:206 4 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. Plaintiffs’ Attempt To Impose Liability On Defendants For Making Upgrades And “Extensive Renovations” To Units Rented By New Tenants Is Not Legally Cognizable. Plaintiffs admit that, pursuant to LARSO, they pay “below-market rents.” [C ¶53, 11:9-11] They claim that Defendants are liable for “renovat[ing] vacated units” [C ¶50, 10:19-20] only “as they become vacant” [C ¶¶58-59, 12:9-16] and “mak[ing] upgrades only to the units repopulated with more desirable tenants,” but not to Plaintiffs’ units. [C ¶55, 11:22-23; ¶431, 70:23-71:3] LARSO provides that when a property owner makes capital expenditures for upgrades and “extensive renovations” to newly rented units, that property owner may charge the market rate for those units. LAMC §151.06(C)(1) provides in relevant part: “1. The landlord may increase the maximum rent or maximum adjusted rent to any amount upon re-rental of the unit in any of the following circumstances: “(a) the rental unit was vacated voluntarily. “(b) the rental unit was vacated as a result of the landlord's termination of tenancy pursuant to Subdivisions 1 [tenant’s failure to pay rent], 2. [tenant’s violation of a lawful obligation or covenant of the tenancy and failure to cure the violation after written notice from landlord], 9. [landlord “seeks in good faith to recover possession so as to undertake Primary Renovation Work of the rental unit or the building housing the rental unit, in accordance with a Tenant Habitability Plan] . . . of Subsection A. of Section 151.09 of this Code.” “(c) the rental unit was vacated as a result of the landlord's termination of tenancy pursuant to Subdivisions 3 [tenant creating nuisance or interference with other tenants’ “comfort, safety or enjoyment]. or 4 [using unit or common areas for illegal purpose]. of Subsection A. of Section 151.09 of this Code, . . . .” Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 15 of 37 Page ID #:207 5 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAMC ¶151.02 provides that the “Maximum Adjusted Rent” allowed by LARSO does not include increases for capital improvement and rehabilitation work. Thus, if Defendants make capital expenditures for upgrades and “extensive renovations” to units of existing tenants, LARSO provides for increasing rents which would [if the Complaint’s allegations are true] price Plaintiffs out of their units. Defendants would also be required to raise rents for Plaintiffs and other existing tenants due to reasonable financial constraints resulting from these capital expenditures for renovations. Preventing them for doing so would violate both LARSO and Defendants’ due process rights. Cotati Alliance for Better Housing v. City of Cotati, 148 Cal.App.3d 280, 294 (1983) explained that a “rent control ordinance must not only protect tenants against excessive rents, but also ensure a fair rate of return to landlords.” Due process requires that landlords receive “‘a just and reasonable return on their property,’” including: “the assurance that an efficient landlord may recover all reasonable expenses actually incurred and, in addition, receive a fair profit or return on investment.” [Citation.] A failure in this regard might well violate prohibitions against the taking of private property for public use without just compensation contained in the Fifth Amendment to the United States Constitution and Article I, section 19, of the California Constitution. An unspoken purpose of rent control during inflationary times is to distribute the burdens of inflation fairly between the landlord and tenant. . . .” Id. at 293. See also, Cal. Civ. Code §1947.15 (entitled “Rent control; calculation of fair return to owner; reasonable expenses, fees and costs for professional services”). Therefore, Plaintiffs’ claims that Defendants discriminate against them by providing “freshly renovated units” to new tenants who are charged the market rate for their apartments [C ¶431, 70:23-71:3] are neither plausible nor legally cognizable. Plaintiffs’ boilerplate contentions that Defendants are liable for “denying or delaying maintenance services and repairs or providing substandard workmanship, Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 16 of 37 Page ID #:208 6 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 fixtures, and repairs” [C ¶431, 70:27-28] to their units would, if actionable at all, could support only a California state law habitability claim. C. Plaintiffs’ Attempt To Impose Liability On Defendants For Serving Eviction Notices And Threatening Them With Eviction Is Not Legally Cognizable. Plaintiffs’ claims that Defendants discriminated against them “by serving them with baseless or unwarranted eviction notices and other documents” and “by making other threats of eviction” [C ¶430, 70:10-22] appear to be based on “notices of termination or stipulations of eviction” for failure to timely pay rent due on the first of the month [C ¶62, 13:3-17] and for allowing their children to play in common areas, i.e. hallways and stairways, in violation of their rental agreements. [C ¶63, 13:25-26] These claims are not legally cognizable. [Also, see §§IV(D-E) below] LARSO -- LAMC §151.09(A)(1) –allows eviction of a tenant who “has failed to pay the rent to which the landlord is entitled, including amounts due under Subsection D of Section 151.05.” Pursuant to LAMC §151.09(A)(2), a valid basis for eviction exists when “the tenant has violated a lawful obligation or covenant of the tenancy and has failed to cure the violation after having received written notice from the landlord.” Plaintiffs have failed to timely pay rent due and failed to cure violations in written notices. Also, an eviction proceeding, including an eviction notice, initiated by Defendants to challenge Plaintiffs’ right to continue living in their apartments after having failed to pay their rent and/or having engaged in conduct prohibited by their rental agreements constitutes conduct protected by Defendants’ First Amendment right to petition the government for redress of grievances. California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 510 (1972) (the right to petition extends to all departments of the government, including the courts). The Noerr–Pennington doctrine holds that parties who utilize their right to petition the government for redress of grievances under the First Amendment’s Petition Clause are immune from subsequent liability for having so utilized their rights. Thus, Plaintiffs are prohibited from pursuing claims under the Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 17 of 37 Page ID #:209 7 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FHA that are related to such proceedings. The Ninth Circuit explained in White v. Lee, 227 F.3d 1214, 1227, 1231 (9th Cir. 2000) that: “The Supreme Court has described the right to petition as ‘among the most precious of the liberties safeguarded by the Bill of Rights’ and ‘intimately connected, both in origin and in purpose, with the other First Amendment rights of free speech and free press.’ United Mine Workers of America, Dist. 12 v. Illinois State Bar Ass'n, 389 U.S. 217, 222, . . . (1967). It is ‘cut from the same cloth as the other guarantees of [the First] Amendment, and is an assurance of a particular freedom of expression.’ [Citation.]” Also, no Plaintiff claims that he/she was actually evicted. [C ¶¶95-136, 20:25- 28:2; ¶¶145-291, 30:1-50:24; ¶¶295-378, 51:18-62:28; ¶¶382-425, 63:21-69:14] Congdon v. Strine, 854 F. Supp. 355, 364 (E.D. Pa. 1994) held the landlord’s threat of eviction and sending of eviction notice after the mostly wheel-chair bound plaintiff filed complaints with various government agencies, was not sufficient to constitute retaliation in violation of 42 U.S.C. §3617. The landlord did not “otherwise make unavailable or deny” housing to the handicapped tenant so as to violate FHA -- 42 U.S.C. §3604(f)(1) despite sending an eviction notice to tenant, where landlord took no further actions to enforce eviction notice. Id. at 359-360. The Court reasoned that: “for such action to constitute a legal foul, there must be actual harm,” and plaintiff was never evicted. Id. at 364. D. Plaintiffs’ Attempt To Impose Liability On Defendants Based On Rules Prohibiting Children From Playing In Hallways And/Or On Stairways Are Contrary To Law And Are Not Legally Cognizable. Plaintiffs claim that Defendants discriminate against them by “unduly oppressive and burdensome rules” which prohibit children from playing in hallways and stairways. [C ¶140, 28:20-21; ¶158, 32:11-12; ¶160, 32:21-22; ¶432, 71:14; ¶433, 71:15-23] Such rules are consistent with city, state and federal laws and regulations. 13 CCR §1861 prevents a person on state property from “obstructing or interfering with the usual use of Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 18 of 37 Page ID #:210 8 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 entrances, foyers, corridors, offices, elevators, stairways.” 36 C.F.R. §702.2 prohibits persons from “Unreasonably obstructing . . . , entrances, foyers, lobbies, corridors, . . . , stairways,” in libraries. The Los Angeles Municipal Code’s (“LAMC”) “Basic Fire Prevention And Fire Preparedness Measures” require a person to: “. . . report to the owner any obstructions . . . in the hallways, stairwells, fire escapes or other means of egress.” The LAMC defines “fire hazard” to include: Any “act . . . which may obstruct, delay, hinder, or interfere with the operations of the Department or the egress of occupants in the event of fire,” which would include playing or congregating in hallways and stairways. Playing in hallways and stairways constitutes a severe danger of injury to children for which Defendants may be held liable if injury occurs. Amos v. Alpha Property Management, 73 Cal.App.4th 895, 900 (1999); Freeman v. Mazzera, 150 Cal.App.2d 61, 63 (1957); Fair Housing Advocates Ass'n, Inc. v. City of Richmond Heights, Ohio, 209 F.3d 626, 629 (6th Cir. 2000) (“unsafe environments” for children to play include hallways, elevators); Van Buren v. Mark L. ex rel. Mark L., 15 N.Y.S.3d 715 (N.Y. Sup. Ct. 2015) (person severely injured when struck by child playing tag with other children in hallway). Blocking access to hallways and stairways also constitutes a danger to the elderly and disabled. Dominguez v. Washington Mut. Bank, 168 Cal.App.4th 714, 721 (2008) (“blocking access to hallways” constituted a failure to accommodate the needs of disabled employees in building). As a result, rules against playing in hallways and stairways are frequently included in conjunction with leases and rental agreements. For example, John Paul Hanna and David Van Atta in California Common Interest Developments: Law and Practice §24:26 (2015 ed., August 2016 Update) provide the following rule for apartments which should be included in leases and rental agreements: “Halls, entrances, stairways, or sidewalks shall not be obstructed, and children shall not play in lobbies, elevators, halls, stairways, garages, storage areas, etc.” Both California and federal law impose a duty on Defendants as property owners to take reasonable steps to minimize or eliminate unreasonable risk of injury to children and Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 19 of 37 Page ID #:211 9 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 other persons on their property, especially when such injury could be reasonably anticipated. Robison v. Six Flags Theme Parks, Inc., 64 Cal.App.4th 1294, 1304-1305 (1998); Wiener v. Southcoast Childcare Centers, Inc., 32 Cal.4th 1138, 1145 (2004). A greater degree of care is generally owed to children because of their lack of capacity to appreciate risks and avoid danger. Lawrence v. La Jolla Beach and Tennis Club, Inc., 231 Cal.App.4th 11, 29 (2014); McDaniel v. Sunset Manor Co., 220 Cal.App.3d 1, 7 (1990); Wiener, supra, 32 Cal.4th at 1145–1146. Thus, as a matter of law, consideration for the children’s safety, as well as the safety of other tenants and their property, is a legitimate non-discriminatory justification for the rule prohibiting children from playing in hallways and stairways. United States v. Hillhaven Corp., 960 F. Supp. 259, 263 (D. Utah 1997). E. Plaintiffs’ Attempt To Impose Liability On Defendants For Requiring Rent Payments To Be Paid On The First Of The Month And/Or Made By Mail, In Person At Defendants’ Offices Or Through An On-Line System Instead Of To On-Site Drop Box Or On-Site Manager, Is Not Legally Cognizable. Plaintiffs allege that “imposing oppressive changes in the terms of their tenancy related to rent collection” has a “discriminatory impact on Latino tenants and tenants with mental disabilities.” [C ¶434, 71:24-72] Those “oppressive changes” allegedly include the “policy requiring rent to be paid on the first of the month” [C ¶62, 13:14-15] and “eliminating on-site payment options, including payment by drop-box or to an on- site manager, and instead requiring payment by mail, in person at Defendants’ offices in Century City. . . or through an on-line system.” [C ¶62, 13:6-9] Plaintiffs admit that their rent payments are due on the first of the month pursuant to their rental agreements, and that “late clause fees” apply to late payments. [C ¶132, 27:3-5] Enforcement of the terms of a rental agreement to which Plaintiffs agreed cannot constitute a legally cognizable basis for liability. Mills v. Ruppert, 167 Cal.App.2d 58, 62 (1959) (“the courts must give effect to and enforce such contracts” between landlord and tenant). Similarly, requiring that rent payments be made by mail, in person at Defendants’ offices or on-line does not constitute a plausible or legally cognizable basis for liability. Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 20 of 37 Page ID #:212 10 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Allowing payments to be made by mail pursuant to check or similar mode of payment satisfies the requirements of Civil Code §1947.3(a)(1) which provides that: “a landlord or a landlord's agent shall allow a tenant to pay rent and deposit of security by at least one form of payment that is neither cash nor electronic funds transfer.” Defendants allow Plaintiffs to pay by mailed check or money order. Mailing of the payment on or before the first of the month results in a conclusive presumption that the payment was timely received. Civ. Code §1962(f). Plaintiffs’ payment of the price of a stamp, if they choose not to pay on-line or at Defendants’ offices, does not constitute a plausible basis for liability. In sharp contrast, requiring Defendants to accept payments by drop-box or to an on-site manager substantially increases the risk that the payments will be stolen from the drop-box or that tenants paying their rent with cash and/or the on-site manager who accepts such payments will be injured in the course of an on-site robbery. People v. Namchek, 2015 WL 275602, at *1 (Cal. Ct. App., Jan. 21, 2015, No. 2D CRIM. B257788) (“rent check was stolen from the drop box at [victim’s] apartment complex”); People v. Vega, 2003 WL 22022021, at *5 (Cal. Ct. App., Aug. 28, 2003, No. A098571) (victim “had a large amount of cash on him, intended for payment of his rent, when he was robbed”); People v. Bailey, 2014 WL 7066049, at *1 (Cal. Ct. App., Dec. 12, 2014, No. A141231) (rent checks stolen from drop box in apartment lobby). F. Plaintiffs’ Attempt To Impose Liability On Defendants For Failing to Post Or Explain Notices In Spanish Is Not Legally Cognizable. The California Supreme Court in Guerrero v. Carleson (1973) 9 Cal.3d 808, 814, rejected the plaintiff’s contention that the failure to translate notices into Spanish “violates equal protection principles”: “It is argued that to send notices of reduction or termination of welfare benefits in English to recipients known not to be literate in that language is arbitrarily to discriminate against them by creating ‘a class of recipients who are to be denied aid without being duly and properly informed of the same.’ The argument begs the question. If, as we hold herein, the notice as now Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 21 of 37 Page ID #:213 11 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 given [in English] is constitutionally adequate under all the circumstances, plaintiffs are not denied ‘due’ and ‘proper’ information affecting their right to aid.” See also, Frontera v. Sindell, 522 F.2d 1215, 1216, 1220 (6th Cir. 1975) (failing to translate civil service exam into Spanish did not violate applicant’s constitutional or civil rights). G. Plaintiffs’ Attempt to Impose Liability On Defendants For Advertising Apartment Rentals On Websites Such As “Radpad, Hotpads” And “Walk Score” Is Neither Plausible Nor Legally Cognizable. Plaintiffs claim that Defendants discriminate based on their “advertising the rental of dwellings” which allegedly “deny particular segments of the housing market information about housing opportunities based on race, national origin, familial status or disability.” [C ¶437, 72:12-18] Specifically, they allege that Defendants advertise “newly vacated units through the internet,” principally through websites such as “Radpad, Hotpads, and, to a lesser extent, Walk Score.” [C ¶68, 15:5-11] They contend that these websites present “information solely in English,” and are “carefully curated to target young, English-speaking, single, nondisabled persons.” [C ¶68, 15:7-11] However, such websites are available to everyone. Reno v. ACLU, 521 U.S. 844, 849- 859 (1997). 42 U.S.C. §3604(c) makes it unlawful: “[t]o make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination.” 42 U.S.C. § 3604(c) is violated if a statement, when heard by an ordinary reader, would conclude that it suggests a preference. U.S. v. Hunter, 459 F.2d 205, 215 (4th Cir.), cert. denied, 409 U.S. 934 (1972) (“advertisements stating that apartments are in a Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 22 of 37 Page ID #:214 12 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ‘white home’ indicate a racial preference”). Plaintiffs do not identify any statement which Defendants made on any website which indicates a prohibited preference. Reno, supra, 521 U.S. at 849-859 found that the Internet allows: “tens of millions of people to communicate with one another and to access vast amounts of information from around the world. The Internet is ‘a unique and wholly new medium of worldwide human communication.’ * * * “Anyone with access to the Internet may take advantage of a wide variety of communication and information retrieval methods. These methods are constantly evolving and difficult to categorize precisely. But, as presently constituted, those most relevant to this case are electronic mail (e-mail), automatic mailing list services (‘mail exploders,’ sometimes referred to as ‘listservs’), ‘newsgroups,’ ‘chat rooms,’ and the ‘World Wide Web’ . . . . Taken together, these tools constitute a unique medium—known to its users as “cyberspace”—located in no particular geographical location but available to anyone, anywhere in the world, with access to the Internet.” Id. at 851. Such speech on the Internet is constitutionally protected. Id. at 874. The Court concluded that: “The record demonstrates that the growth of the Internet has been and continues to be phenomenal. As a matter of constitutional tradition, in the absence of evidence to the contrary, we presume that governmental regulation of the content of speech is more likely to interfere with the free exchange of ideas than to encourage it. The interest in encouraging freedom of expression in a democratic society outweighs any theoretical but unproven benefit of censorship.” Id. at 885. Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 23 of 37 Page ID #:215 13 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Imposing liability on Defendants based solely on the websites on which they advertise apartments would constitute a constitutionally prohibited form of censorship and would violate Defendants’ constitutional rights. V. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “VIOLATIONS OF THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, CAL. GOV’T CODE §§12900-12966 [‘FEHA’].” A. Plaintiffs FEHA Claim Is Not Legally Cognizable For The Same Reasons As Their FHA Claim. After examining the Legislative History of FEHA, the California Supreme Court determined in Konig v. Fair Employment and Housing Com'n (2002) 28 Cal.4th 743, 749 that in enacting and amending FEHA, the California Legislature: “sought to make the FEHA ‘“substantially equivalen[t]”’ (Cal. Fair Employment and Housing Com., Enrolled Bill Rep. on Sen. Bill No. 1234 (1991–1992 Reg. Sess.) July 2, 1992, p. 2) to the federal Fair Housing Act and its amendments (42 U.S.C. § 3601 et seq.).” Thus, the FEHA provisions referred to in the Complaint protect substantially the same rights as the FHA provisions and are subject to the same analysis. Moua v. City of Chico, 324 F.Supp.2d 1132, 1141 (E.D. Cal. 2004). Also, the Complaint’s FEHA allegations [C ¶¶426-443, 69:16-73:15] substantially mirror its FHA allegations. [C ¶¶444-460, 73:16-77:11] Plaintiffs’ attempt to impose FEHA liability is not legally cognizable for the same reasons as their FHA claim, including their allegations regarding Defendants’ “Koreatown Strategy” [C ¶446, 73:25-74:2] (supra §IV(A)), renovating vacant units and renting them to new tenants [C ¶448, 74:15-23] (supra §IV(B)), rules prohibiting children from playing in hallways and stairways [C ¶450, 75:8-16] (supra §IV(D)), “changes in the terms of their tenancy related to rent collection” [C ¶451, 75:17-22] (supra §IV(E)) and failing to “post or explain notices in Spanish” [C ¶452, 75:23-27] (supra §IV(F)). Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 24 of 37 Page ID #:216 14 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. Plaintiffs’ Attempt To Base FEHA Liability On Defendants’ Service of Eviction Notices Is Barred By California’s Litigation Privilege – Cal. Civil Code §47(b). The Complaint alleges that Defendants “interfered with the exercise or enjoyment of housing rights” by Plaintiffs Reynolds, Rivera, Martinez, Castro, Deras, Velasquez, Fabian, Allen, and Prudhomme by “serving them with baseless or unwarranted eviction notices.” [C ¶447, 74:3-14] Service of such eviction notices, as well as eviction proceedings themselves, constitute conduct protected by California’s Litigation Privilege -- Civ. Code §47(b) -- as to California state law claims. Action Apartment Ass'n, Inc. v. City of Santa Monica, 41 Cal.4th 1232, 1243 (2007) held that the City's “tenant harassment” ordinance authorizing civil and criminal actions against a landlord for bringing: “an action to recover possession of a rental housing unit based upon facts which the landlord had no reasonable cause to believe to be true or upon a legal theory which is untenable under the facts known to the landlord” was preempted by the litigation privilege. Id. at 1243, 1249-1250. Cal. Civ. Code §47(b). The California Supreme Court also determined the ordinance was inimical to the important purpose or privilege of affording litigants and witnesses utmost freedom of access to courts. Id. at 1244. Cal. Const., Art. 11, §7; see also, Bisno v. Douglas Emmett Realty Fund 1988 (2009) 174 Cal.App.4th 1534, 1552 (litigation privilege applied to three-day notice to quit, “which was a legally-required prerequisite to filing the unlawful detainer action”); Feldman v. 1100 Park Lane Associates, 160 Cal.App.4th 1467, 1486 (2008) (unlawful detainer filing and service of three-day notice to quit protected by litigation privilege); Hagberg v. California Federal Bank, 32 Cal.4th 350, 356-357 (2004) (litigation privilege applied to claims for racial discrimination); Gallanis-Politis v. Medina, 152 Cal.App.4th 600, 604 (2007) (litigation privilege operated as an absolute bar to plaintiff’s discrimination claim based on retaliation). Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 25 of 37 Page ID #:217 15 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 VI. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “VIOLATIONS OF THE UNRUH CIVIL RIGHTS ACT, CAL. CIV. CODE §51.” The Unruh Act “secures equal access to public accommodations and prohibits discrimination by business establishments.” Black v. Dep't of Mental Health, 83 Cal.App.4th 739, 745 (2000). Businesses “retain the right under the Act to establish reasonable regulations that are rationally related to the services performed and facilities provided.” Lazar v. Hertz Corp., 69 Cal.App.4th 1494, 1502 (1999). Elements of an Unruh Act cause of action include: (1) defendant’s denial of full and equal accommodations or services to plaintiff, (2) a motivating reason for defendant’s conduct was plaintiff’s race or disability; (3) plaintiff was harmed and (4) defendant’s conduct was a substantial factor in causing that harm. CACI 3060; CC §§51, 51.5, 52. Except for claims of disability discrimination, “a plaintiff seeking to establish a case under the Unruh Act must plead and prove intentional discrimination. . . .” Munson v. Del Taco, Inc., 46 Cal.4th 661, 672 (2009). Plaintiffs, including Latinos, disabled persons and families, do not allege that Defendants refuse to rent them apartment an apartment. Nor do they allege that any Plaintiff was actually evicted. [C ¶¶95-136, 20:25-28:2; ¶¶145-291, 30:1-50:24; ¶¶295- 378, 51:18-62:28; ¶¶382-425, 63:21-69:14] Defendants have complied with Cal. Civ. Code §54.3, as well as §§54, §54.1, by opening their doors, and providing access to housing, to all persons. Californians for Disability Rights v. Mervyn's LLC, 165 Cal.App.4th 571, 585-586 (2008). In addition, for the reasons explained above, Plaintiffs’ claims that Defendants served them with eviction notices and threatened them with eviction notices [C ¶462, 77:20-24; ¶463, 78:5-9; ¶464, 78:19-23; ¶465, 79:6-8; ¶466, 79:19-22; ¶467, 80:5-7] are barred by the litigation privilege. (Supra §V(B)) Plaintiffs’ claims that Defendants “imposed unduly oppressive changes in the terms of [their] tenancies” [C ¶462, 77:24- 26; ¶463, 78:10-11; ¶464, 78:24-25; ¶465, 79:9-10; ¶466, 79:23-24; ¶467, 80:8-9] which Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 26 of 37 Page ID #:218 16 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 are apparently based on requiring rent payments to be timely made on the first of the month and to be made by mail, on-line or at Defendants’’ Offices are not legally actionable. (Supra §IV(E)) Plaintiffs’ apparent attempt to impose liability based on Section 8 termination notices is not legally cognizable. Plaintiffs Allen [C ¶462, 77:19-20], Prudhomme, Reynolds and Rivera [C ¶463, 78:4-9] allege that they receive Section 8 subsidies and that Defendants discriminated against them by sending them eviction notices and threatening to terminate their Section 8 tenancies. Defendants’ refusal to participate, or termination of participation, in Section 8, does not constitute actionable discrimination. The legislative history of Section 8 “clearly assumes that the landlord has a right to terminate the landlord's participation in the Section 8 program” (Sabi v. Sterling, 183 Cal.App.4th 916, 930 (2010)), and is not compelled to participate. Id. at 939-940. As a matter of law, a landlord’s failure to continue participating in Section 8 does not interfere with a tenant's use of the premises where, as here, the tenant continues to reside in his/her apartment. Id. at 944 (not actionable pursuant to the Unruh Act or FEHA); People To End Homelessness, Inc. v. Develco Singles Apartments Associates, 339 F.3d 1, 3 (1st Cir. 2003) (concluded that “federal law did not obligate or even authorize HUD to ‘unilaterally extend HAP contracts against the will of owners’”). VII. PLAINTIFFS FAIL TO STATE PLAUSIBLE, LEGALLY COGNIZABLE “STATUTORY HABITABILITY CLAIMS, CAL. CIV. CODE §1941.1; CAL. HEALTH AND SAFETY CODE §17920.3.” Plaintiffs allege in boilerplate fashion that Defendants breached “the warranty of habitability in violation of Cal. Civ. Code §1941.1 and Cal. Health and Safety Code [“H&S Code”] §17920.3.” [C ¶¶469-470, 80:24-81:5] Section 1941.1 includes a boilerplate list of “characteristics” the lack of which deem a dwelling “untenantable.” However, other elements are essential to a breach of warranty of habitability claim, including: (1) the existence of a specific materially defective condition affecting habitability, (2) that was unknown to the plaintiff at the time of occupancy, (3) and that Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 27 of 37 Page ID #:219 17 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 was not apparent upon a reasonable inspection by that plaintiff, (4) notice was given to defendant within a reasonable time after plaintiff discovered the specific purported habitability problem in that plaintiff’s apartment, (5) defendant was given a reasonable amount of time to correct any such purported habitability problem after receiving the required notice, (6) causation and (7) damages. Green v. Superior Court, 10 Cal.3d 616, 637 (1974); Peterson v. Superior Court, 10 Cal.4th 1185, 1203, 1205-1206 (1995). Plaintiffs’ boilerplate list of putative problems with unidentified units [C ¶470, 81:5-12] is insufficient to state a claim on which relief may be granted. The implied warranty of habitability does not require the leased premises to be in “perfect, aesthetically pleasing condition.” Maintenance of only “bare living requirements” is required. Green, supra, 10 Cal.3d at 637. Green concluded that: “in most cases substantial compliance with those applicable building and housing code standards which materially affect health and safety will suffice to meet the landlord's obligations under the common law implied warranty of habitability.” Id. Breach Of The Warranty Of Habitability is not a strict liability tort. Peterson, supra, 10 Cal.4th at 1206. Major violations of building codes are required. Green, supra, 10 Cal.3d at 637. Plaintiffs have not alleged that Defendants violated any building code. Nor does H&S Code §17920.3 provide the basis for an individual cause of action. Griffith v. City of Santa Cruz, 207 Cal.App.4th 982 (2012), states that §17920.3 provides a list of “conditions” that, to the extent they endanger the occupants, shall be deemed “a substandard building.” The statute does not create a cause of action for any individual tenant of a qualifying building. H&S §§17980.1, et seq. provide for enforcement of H&S §17920.3 by notices or orders “issued by an enforcement agency” followed by the enforcement agency’s application to the superior court for an order authorizing it to remove any violation or abate any nuisance specified in any notice or order which is not complied with.” The statute does not provide for private enforcement. Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 28 of 37 Page ID #:220 18 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In the absence of intent to provide a private right of action, courts should not create such a right. Moradi-Shalal v. Fireman's Fund Ins., 46 Cal.3d 287, 305 (1988). VIII. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “BREACHES OF QUIET ENJOYMENT, CAL. CIV. CODE §1927.” A. Plaintiffs Do Not Allege Any Legally Cognizable Basis For Imposing Liability Based On Civil Code §1927. Plaintiffs base this cause of action on Civil Code §1927, which codifies the covenant of quiet enjoyment pursuant to California law, providing that: “An agreement to let upon hire binds the letter to secure to the hirer the quiet possession of the thing hired during the term of the hiring, against all persons lawfully claiming the same.” Section 1927 guarantees a tenant quiet possession of the leased property against rightful assertion of a paramount title. Guntert v. City of Stockton, 55 Cal.App.3d 131, 138 (1976). No person or entity has rightfully asserted a paramount title to Plaintiffs’ apartments. Stockton Theatres, Inc. v. Palermo, 124 Cal.App.2d 353, 358 (1954). Plaintiffs continue to live in their apartments. [C ¶¶95-136, 20:25-28:2; ¶¶145-291, 30:1-50:24; ¶¶295-378, 51:18-62:28; ¶¶382-425, 63:21-69:14] Plaintiffs’ attempt to impose liability on Defendants based on purported service of evictions notices [C ¶476, 82:10-12] is barred by the litigation privilege. (Supra §V(B)) See also, Feldman, supra, 160 Cal.App.4th at 1498 which held a breach of the covenant of quiet enjoyment cause of action, based on defendants’ attempt “to recover possession of the premises” and “attempted retaliatory eviction” by serving eviction notices, was barred by the litigation privilege. Plaintiffs’ claims that Defendants “impos[ed] unduly oppressive changes in the terms of Plaintiffs’ tenancies, including . . . changes in the way rent was to be paid” [C ¶476, 82:14-17] are not legally cognizable. (Supra §IV(E)) B. Plaintiffs Provide No Basis For Their “Unlawful Rent Increase” Claims; Even If They Had, Such Claims Would Not Be Sufficient To Impose §1927 Liability. Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 29 of 37 Page ID #:221 19 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintifs do not provide any basis for their claims of “unlawful rent increases.” [C ¶476, 82:15-16] LARSO allows a landlord to implement an automatic annual increase effective July 1st of each year, equal to the CPI increase for the previous year ending September 30th, but no less than 3% nor more than 8%. LAMC §151.07(A)(6). No Plaintiff alleges a rent increase in excess of 8%; they also admit that many of the proposed rent increases were reversed. [C ¶177, 35:15-18 (Martinez – 4%); ¶208, 39:14-16 (Velasquez – 4%); ¶230, 42:20-21 (Fabian – 4%); ¶274, 48:15-18 (Castro – 4%); ¶322, 66:10-12 (Ramos – 4%)] In addition, “[i]f the landlord pays all the costs of electricity and/or gas services for a rental unit then the maximum rent or maximum adjusted rent may be increased an additional one percent (1%) for each such service paid by the landlord, not to exceed a total of two percent (2%).” LAMC §151.06(D). In addition, no purported rent increases, unidentified “statements to Plaintiffs” [C ¶476, 82:13-14] or putative failure “to maintain Plaintiffs’ units in a habitable condition” interfered with Plaintiffs’ possession of their units in which they continue to reside. [C ¶¶95-136, 20:25-28:2; ¶¶145-291, 30:1-50:24; ¶¶295-378, 51:18-62:28; ¶¶382-425, 63:21-69:14] IX. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “PRIVATE NUISANCE, CAL. CIV. CODE §3479.” Plaintiffs base their attempted “Private Nuisance” claim on Cal. Civ. Code § 3479 which defines “what constitutes” a “Nuisance” as: “Anything which is injurious to health, including, but not limited to, the illegal sale of controlled substances, or is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property, or unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake, or river, bay, stream, canal, or basin, or any public park, square, street, or highway, is a nuisance.” Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 30 of 37 Page ID #:222 20 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The essential elements of a “Private Nuisance” claim include: Defendants’ (1) interference with plaintiff’s use and enjoyment of his or her property; (2) which caused that Plaintiff to suffer “substantial actual damage” and (3) was unreasonable, i.e., “of such a nature, duration or amount as to constitute unreasonable interference with the use and enjoyment of the land.” San Diego Gas & Electric Co. v. Superior Court, 13 Cal.4th 893, 938 (1996). Like the plaintiff in San Diego Gas, supra, 13 Cal.4th at 936- 938, Plaintiffs have failed to allege any interference which was substantial and unreasonable. They attempt to plead nuisance based on allegations which are identical to those in their other causes of action, which are not plausible or legally cognizable. For example, they allege that Defendants “imposed unduly oppressive changes in the terms of Plaintiffs’ tenancies,” including changes in the way rent was to be paid, which is not legally cognizable (Supra §IV(E)), that they were subjected to “unlawful rent increases” (Supra §VIII(B)), that Defendants failed to maintain their units (Supra §VII). They also allege that Defendants made unidentified “false, threatening, and derogatory statement to Plaintiffs.” [C ¶480, 83:6] Such statements could not constitute a “Nuisance” which is always a tort against land requiring that the plaintiff's action must be founded upon his interest in the land. 11 Witkin, Summary of Cal. Law (9th ed. 1990) Equity, § 122, p. 804. In addition, a “Nuisance” cause of action cannot be founded on the same claims as Plaintiffs other causes of action. City of San Diego v. U.S. Gypsum Co., 30 Cal.App.4th 575, 586 (1994) (allowing Plaintiffs here to inappropriately sweep their claims into a nuisance cause of action would transform nuisance into “a monster that would devour in one gulp the entire law of tort”); El Escorial Owners' Ass'n v. DLC Plastering, Inc., 154 Cal.App.4th 1337, 1349 (2007) (“Where negligence and nuisance causes of action rely on the same facts about lack of due care, the nuisance claim is a negligence claim”). X. PLAINTIFFS FAIL TO STATE A PLAUSIBLE, LEGALLY COGNIZABLE CLAIM FOR “NEGLIGENCE, CAL. CIV. CODE §1714.” Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 31 of 37 Page ID #:223 21 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiffs’ “Negligence” cause of action consists of a list of statutes [C ¶¶483-486, 83:16-84:10], which is insufficient to state a claim under either Federal law (Gregory Village Partners, L.P. v. Chevron U.S.A., Inc., 805 F.Supp.2d 888, 903 (N.D. Cal. 2011)) or state law Berkley v. Dowds, 152 Cal.App.4th 518, 522, 526 (2007) (demurrer properly sustained where Plaintiff “failed to allege facts describing the injury suffered or the acts or omissions negligently performed, or showing how the acts or omissions were the proximate cause of the injury”). XI. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “CHARGING LARSO EXCESSIVE RENT, L.A. MUN. CODE §151.10(A).” LARSO allows a landlord to implement an automatic annual increase effective July 1st of each year, equal to the CPI increase for the previous year ending September 30th, but no less than 3% nor more than 8%. LAMC, Ch. XV, Art. 1, §151.07(A)(6). No Plaintiff alleges a rent increase in excess of 8%; they also admit that many of the proposed rent increases were reversed. [C ¶177, 35:15-18 (Martinez – 4%); ¶208, 39:14-16 (Velasquez – 4%); ¶230, 42:20-21 (Fabian – 4%); ¶274, 48:15-18 (Castro – 4%); ¶322, 66:10-12 (Ramos – 4%)] In addition, “[i]f the landlord pays all the costs of electricity and/or gas services for a rental unit then the maximum rent or maximum adjusted rent may be increased an additional one percent (1%) for each such service paid by the landlord, not to exceed a total of two percent (2%).” LAMC §151.06(D). XII. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “VIOLATION OF ANTI-HARASSMENT STATUTES, CAL. CIV. CODE §1940.2.” Plaintiffs base this cause of action on Civil Code §1940.2 which provides that: “(a) It is unlawful for a landlord to do any of the following for the purpose of influencing a tenant to vacate a dwelling: “(1) Engage in conduct that violates subdivision (a) of Section 484 of the Penal Code [steal or fraudulently take property]; Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 32 of 37 Page ID #:224 22 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 “(2) Engage in conduct that violates Section 518 of the Penal Code [Extortion]; “(3) Use, or threaten to use, force, willful threats, or menacing conduct constituting a course of conduct that interferes with the tenant's quiet enjoyment of the premises in violation of Section 1927 that would create an apprehension of harm in a reasonable person. Nothing in this paragraph requires a tenant to be actually or constructively evicted in order to obtain relief. “(4) Commit a significant and intentional violation of Section 1954 [wrongful entry]. Plaintiffs do not base this cause of action on any conduct proscribed by §1940.2. [C ¶¶489-492, 85:1-18] Instead, they premise it on conduct which does not constitute a legally cognizable basis for liability, including Defendants’ “Koreatown Strategy” [C ¶492, 85:15-18] (Supra §IV(A)) and service of eviction notices [C ¶490, 85:6-8] (Supra §V(B)). Nor do Defendants’ alleged “menacing comments (such as threats to call immigration and social services)” [C ¶490, 85:8-10] constitute a legally cognizable basis for liability. The “‘official proceeding’ privilege has been interpreted broadly to protect communications to or from governmental officials which may precede the initiation of formal proceedings.” Slaughter v. Friedman, 32 Cal.3d 149, 156 (1982). So has the litigation privilege. Reports made to official government agencies to prompt action by such entities—even false reports made with malice—are absolutely privileged. See People ex rel Gallegos v. Pacific Lumber Co., 158 Cal.App.4th 950, 958–962 (2008) (litigation privilege bars action predicated on entity's allegedly fraudulent conduct in communicating information to government agency during administrative proceedings); Hagberg v. California Federal Bank FSB, 32 Cal.4th 350, 364 (2004) (absolute litigation privilege applies to communication concerning possible wrongdoing made to official government agency designed to prompt action by agency). Plaintiffs also allege that Defendants refused to “permit entry to locked-out tenants” [C ¶490, 85:11], who Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 33 of 37 Page ID #:225 23 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 refused to show identification. [C ¶305, 53:1-10] This basis safety requirement for the protection of tenants cannot plausibly be considered a basis to impose liability. XIII. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE CLAIM FOR “RETALIATION, CAL. CIV. CODE §1942.5(c).” Plaintiffs base this cause of action on Civil Code §1942.5(c) which provides that: “(c) It is unlawful for a lessor to increase rent, decrease services, cause a lessee to quit involuntarily, bring an action to recover possession, or threaten to do any of those acts, for the purpose of retaliating against the lessee because he or she has lawfully organized or participated in a lessees' association or an organization advocating lessees' rights or has lawfully and peaceably exercised any rights under the law. In an action brought by or against the lessee pursuant to this subdivision, the lessee shall bear the burden of producing evidence that the lessor's conduct was, in fact, retaliatory.” To recover under this statute a lessee must not be in default in rent payments (§1942.5(a)). In addition, nothing in §1942.5 shall be construed as limiting in any way the lessor’s rights “under any lease or agreement or any law pertaining to the hiring of property or his or her right to do any of the acts described in subdivision (a) or (c) for any lawful cause” (§1942.5(d)) or to “recover possession of a dwelling and do any of the other acts described in subdivision (a) within the period or periods prescribed therein, or within subdivision (c), if the notice of termination, rent increase, or other act, and any pleading or statement of issues in an arbitration, if any, states the ground upon which the lessor, in good faith, seeks to recover possession, increase rent, or do any of the other acts described in subdivision (a) or (c). . . .” Again, Plaintiffs base this cause of action on conduct which is not legally cognizable based on the facts alleged in the Complaint [C ¶494, 85:24-86:2], including eviction Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 34 of 37 Page ID #:226 24 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 notices (Supra §V(B)), rent increases (Supra §XI), changing the method of rent payments (Supra §IV(E)) and enforcement of lease terms. XIV. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE “UNFAIR COMPETITION, CAL. BUS. & PROF. CODE §§17200-17210” CLAIM. A. Plaintiffs Have Not Alleged Any Unlawful, Unfair Or Fraudulent Business Act Or Practice. Plaintiffs alleging a violation of the Cal. Bus. & Prof. Code (“BPC”) §§17200- 17210 (“UCL”) must meet the heightened pleading standards of FRCP 9(b). Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1102–1105 (9th Cir. 2003). Specific facts must be pled. Khoury v. Maly's of California, Inc., 14 Cal.App.4th 612, 619 (1993). Plaintiffs fail to plead with specificity any facts constituting an unlawful, unfair or fraudulent business act or practice. [C ¶¶ 497-505, 86:12-88:10] Instead, they base their UCL claim on conduct which does not provide any legally cognizable basis for liability, including purported “eviction notices” [C ¶¶498-500, 86:19-87:3] (Supra §V(B)), “termination of Section 8 subsidies” [C ¶500, 87:1] (Supra §VI)), “rent increases” and “charges for utility services” [C ¶500, 87:3-4; ¶503, 87:25] (Supra §§VIII(B), IX) and changes in methods of rent collection [C ¶501, 87:5-14; ¶503, 87:22-27] (Supra § IV(E)). B. Plaintiffs Have Not Alleged Standing To Sue Pursuant To The UCL. BPC §17204 requires that a private Plaintiff may only bring a UCL action if that Plaintiff “has suffered injury in fact and has lost money or property” as a direct and proximate result of an unlawful, unfair or fraudulent practice. BPC §17204; Peterson v. Cellco Partnership, 164 Cal.App.4th 1583, 1591 (2008). Where tenants’ allegations against landlords are similar to those in Complaint, no “injury-in-fact” is pled. Trujillo v. First Am. Registry, Inc., 157 Cal. App. 4th 628, 639 (2007) (tenant did not suffer “injury in fact or [lose] money or property as a result of the incomplete tenant screening report”); Marina Tenants Assn. v. Deauville Marina Development Co., 181 Cal.App.3d 122, 134 (1986) (the “mere allegation that Lessees have wrongfully acquired excessive Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 35 of 37 Page ID #:227 25 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 rentals and become unjustly enriched does not entitle the Tenants to relief, as no cognizable legal right of the Tenants has been violated”); Mangini v. Aerojet-Gen. Corp., 230 Cal.App.3d 1125, 1156 (1991) (landowners could not state a UCL cause of action based on allegations that former lessee had left hazardous waste on the property). Nor have Plaintiffs even attempted to allege facts constituting the causation and actual reliance required to plead standing to assert a UCL cause of action. In re Tobacco II Cases, 46 Cal.4th 298, 328 (2009) (“we conclude that a plaintiff must plead and prove actual reliance to satisfy the standing requirement of section 17204”). In re Tobacco II rejected the argument that the statutory phrase “as a result of” “merely requires ‘a factual nexus’ between a defendant’s conduct and a plaintiff’s injury.” An allegation that plaintiff is “one of the people from whom the defendant obtained money or property while engaging in its unfair business practice” is insufficient. Id. at 325-326. Durell v. Sharp Healthcare, 183 Cal.App.4th 1350, 1363 (2010), concluded that this rule applies to the UCL’s “unlawful” and “unfair,” as well as its “fraudulent,” prongs. The “UCL no longer permits associational standing.” Coalition for ICANN Transparency Inc. v. VeriSign, Inc., 452 F.Supp.2d 924, 939 (N.D. Cal. 2006); BPC §17203. Neither SAJE nor Step Up have standing to sue pursuant to the UCL. C. The UCL Does Not Allow Recovery Of The Damages Plaintiffs Seek. Only restitution and injunctive relief, under proper circumstances which are not alleged here, are recoverable pursuant to the UCL. BPC §17203. As a matter of law, the damages Plaintiffs seek to recover, including travel expenses, “costs of mailing, repairs, and unlawful water and trash collection fees,” “loss of use and enjoyment of their rental property” and damages allegedly caused by purported “conditions of Plaintiffs’ units” [C ¶503, 87:22-27] are not recoverable pursuant to the UCL. Nor are the damages SAJE and Step Up seek to recover, including “lost staff time and lost organizational resources.” [C ¶¶504-505, 88:1-10] Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163, 179 (1999) (“Plaintiffs may not receive damages, much less treble damages, or attorney fees” pursuant to the UCL). Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 36 of 37 Page ID #:228 26 DEFENDANTS’ MEMORANDUM SUPPORTING FRCP 12(b)(6) MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 XV. PLAINTIFFS FAIL TO STATE A LEGALLY COGNIZABLE PUNITIVE OR EXEMPLARY DAMAGES CLAIM. As explained above, Plaintiffs have not stated a claim upon which relief may be granted. Nor have they alleged facts constituting the “actual malice or conduct sufficiently outrageous to be deemed equivalent to actual malice” required for recovery of punitive damages pursuant to their federal claim (Kolstad v. Am. Dental Ass'n, 527 U.S. 526, 539 (1999)) or the malice, fraud or oppression required for recovery of punitive or exemplary damages pursuant to California law. Cal. Civ. Code §3294. They do not even include a request for recovery of punitive or exemplary damages in any of their 11 causes of action. The Complaint’s only reference to such damages is in a boilerplate request in their prayer for “Relief Sought” [C ¶506, 88:22-23] which is patently insufficient to state a punitive or exemplary damages claim under either federal or California law. XVI. CONCLUSION Plaintiffs have not stated a claim against Defendants on which relief can be granted. Where, as here, granting leave to amend a claim would be futile, that claim should be dismissed with prejudice pursuant to FRCP 12(b)(6). Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 339 (9th Cir. 1996). Therefore, Defendants respectfully request this Court to dismiss Plaintiffs’ claims against them with prejudice. See Oei v. N. Star Capital Acquisitions, LLC, 486 F. Supp. 2d 1089, 1104 (C.D. Cal. 2006). Dated: January 6, 2017 CITRON & CITRON By: /s/ Katherine A. Tatikian /s/ THOMAS H. CITRON; KATHERINE A. TATIKIAN Attorneys for Defendants OPTIMUS PROPERTIES, LLC; ROXBURY VENTURES, LLC; SOUTH KENMORE PROPERTIES, LLC; SOUTH NORMANDIE PROPERTIES, LLC; NORMANDIE LINDEN, LLC; MAGNOLIA AVENUE PROPERTIES, LLC; MARIPOSA/8TH STREET PROPERTIES, LLC; JEROME MICKELSON Case 2:16-cv-08598-SVW-MRW Document 38-1 Filed 01/06/17 Page 37 of 37 Page ID #:229 Case 2:16-cv-08598-SVW-MRW Document 38-2 Filed 01/06/17 Page 1 of 4 Page ID #:230 Case 2:16-cv-08598-SVW-MRW Document 38-2 Filed 01/06/17 Page 2 of 4 Page ID #:231 Case 2:16-cv-08598-SVW-MRW Document 38-2 Filed 01/06/17 Page 3 of 4 Page ID #:232 Case 2:16-cv-08598-SVW-MRW Document 38-2 Filed 01/06/17 Page 4 of 4 Page ID #:233