[00:00:01] Speaker 00:
Good morning, if it pleases the court.

[00:00:03] Speaker 00:
Frank Weiser on behalf of the plaintiffs and appellants.

[00:00:07] Speaker 00:
And I would like to address the takings issue first, and in particular, the regulatory takings issue dealing with the Penn Central test.

[00:00:19] Speaker 00:
It was our contention before the district court

[00:00:22] Speaker 00:
And before this Court, that the Penn Central Test, which talked about a multi-factor test in determining whether regulation goes too far for purposes of becoming a taking under the Fifth Amendment, is essentially an ad hoc factual inquiry and cannot be decided on a motion to dismiss under Rule 12B6.

[00:00:44] Speaker 00:
And the district court and the city contends that the economic impact, which under the Hadochek versus Sebastian case and this Ninth Circuit cases set a bar which could be decided as a matter of law, and that when we contended that the property was diminished in value of 25% to 50%, that as a matter of law, that would not have an economic impact for purposes of being a taking.

[00:01:14] Speaker 04:
But that's what the cases say, correct, that a mere diminution in value is not adequate to establish a regulatory taking, correct?

[00:01:23] Speaker 04:
The cases say that, correct?

[00:01:29] Speaker 00:
Our contention is that it can be a factor for purposes of being a regulatory taking.

[00:01:34] Speaker 04:
So if the cases say that mere diminution of value is insufficient to establish a regulatory taking,

[00:01:42] Speaker 04:
then how do you factor that into the analysis and coming up with the conclusion that there was a regulatory taking?

[00:01:51] Speaker 00:
Well, Judge Robinson, I was going to get to that.

[00:01:53] Speaker 00:
My contention is there were out-of-circuit cases, and in particular, a case called Chiena Gardens v. United States at 331 U.S.

[00:02:01] Speaker 00:
1319, page 1345.

[00:02:05] Speaker 00:
It was a federal circuit case in 2003 that pointed out that the Hattercheck case

[00:02:11] Speaker 00:
and the Euclid v. Amber Realty case did not set a bar as a matter of law.

[00:02:18] Speaker 00:
It's true, according to the Shannon Gardner's interpretation, it's true that there's no percentage which necessarily makes it a taking.

[00:02:30] Speaker 00:
But it can still be that there could be a taking below a certain percentage, and that's a very fact-sensitive inquiry.

[00:02:38] Speaker 01:
Do you have any good case in

[00:02:41] Speaker 01:
I'll call it a zoning context, but something else, because to me, part of your case really is like a zoning case, where a regulatory taking has been found.

[00:02:54] Speaker 00:
Yes, and in the— Thank you, Judge Box.

[00:02:57] Speaker 00:
In the Sienega Gardens case, that was a HUD

[00:03:02] Speaker 00:
uh... low-cost housing program uh... and uh... the court as a matter of law actually did the pencentral analysis did not remanded back to the district court and found that their pencentral analysis favored that there was a compensable take.

[00:03:18] Speaker 01:
Is that the citation you just gave?

[00:03:20] Speaker 00:
Uh, 331 F-third.

[00:03:22] Speaker 00:
F-third, I think you said U.S.

[00:03:24] Speaker 00:
Yeah, you said U.S.

[00:03:25] Speaker 00:
Okay, that's fine.

[00:03:26] Speaker 04:
So that's the Federal Circuit case.

[00:03:28] Speaker 04:
But we have to follow the precedent in our circuit.

[00:03:32] Speaker 00:
So my view is that the cases that are cited there are rent control cases.

[00:03:39] Speaker 00:
Those are different than what we have here, where you have a motel that has a business license, a property interest by way of the business license, to rent the property in a certain way.

[00:03:51] Speaker 00:
And that license is, in effect, taken by the fact that you can no longer rent a court.

[00:03:57] Speaker 01:
How is that different from a zoning change that is, in one sense,

[00:04:04] Speaker 01:
Again, this is procedurally different, but it, to me, and tell me why I'm wrong, is like a zoning to operate a motel, and then they change that to say this is only zoned for residential apartment use.

[00:04:22] Speaker 00:
Well, zoning cases where the zone changes and a property is already permitted prior to the zone change, the general rule is that there's usually some amortization period that the government gives to be able to adjust for the owner to adjust for the economic impact.

[00:04:42] Speaker 01:
Maybe there usually is, but are there cases that say it's unconstitutional not to have that?

[00:04:47] Speaker 00:
I don't know in particular of the unconstitutionality other than I would say that this particular ordinance originated out of the case up north, the San Remo Hotel Motel Association case for the city and county of San Francisco that was litigated back in 2000, I believe in 2005, and went up to U.S.

[00:05:10] Speaker 00:
Supreme Court but lost on procedural grounds because the England versus state of Louisiana reservation was not properly made

[00:05:17] Speaker 00:
in the state courts.

[00:05:20] Speaker 00:
But certainly, it's caused a lot of contention.

[00:05:23] Speaker 00:
But that would be similar for purposes of zoning.

[00:05:26] Speaker 00:
And I believe the California Supreme Court ruled four to three.

[00:05:29] Speaker 00:
There were three dissenting justices on the Supreme Court who found that that kind of a change of use was similar to a zone change that required compensation.

[00:05:40] Speaker 00:
But the point I'm trying to make is that, out of circuit cases,

[00:05:45] Speaker 00:
it's clear that Haticek is not a rule that, as a matter of law, can decide the economic impact.

[00:05:52] Speaker 00:
Because if it could, then the Penn Central analysis would be essentially worthless.

[00:05:57] Speaker 00:
If that's a bar as a matter of law, then Penn Central makes no sense in how you weigh the economic impact.

[00:06:04] Speaker 00:
I would just give one example.

[00:06:06] Speaker 00:
In fact, you may have a diminution of value, and that diminution of value prevents an owner to be able to transfer the property.

[00:06:16] Speaker 00:
They can't sell it.

[00:06:17] Speaker 00:
And then that affects then an essential right in terms of their ability to operate the property.

[00:06:25] Speaker 00:
or to sell the property.

[00:06:27] Speaker 00:
But here there were other factors.

[00:06:29] Speaker 00:
The character of the regulation here essentially takes away the right to exclude certain people from the property, and the transgenocracy tax specifically gave them the right to rent on a 30-day or less basis, and that affects landlord tenant law.

[00:06:46] Speaker 00:
under California law.

[00:06:48] Speaker 00:
And I believe I cited in my brief various California statutes in which a motel owner has a right to, in effect, evict somebody without going through the whole process if there's non-payment of rent.

[00:07:02] Speaker 00:
But now that these people are permanent residents.

[00:07:04] Speaker 01:
Here, it's not so much, I mean, when you said exclude, it's that you're wanting not to include people on short-term rentals.

[00:07:16] Speaker 00:
To an extent, except for the fact that under this program, they must take people.

[00:07:22] Speaker 01:
Must they take them or they simply can't rent except on those terms?

[00:07:29] Speaker 00:
Correct.

[00:07:30] Speaker 01:
OK, so that's why I keep saying to me it smells like zoning because now if they said, you know, we're going to put migrants in there no matter what you want and you've got to leave them there for six months,

[00:07:42] Speaker 01:
That would smell a lot more like not exclusion, but here you can do whatever you want with that property.

[00:07:48] Speaker 01:
You just can't rent it for less than six months.

[00:07:51] Speaker 00:
But once again, I believe our takings analysis was a two-pronged analysis.

[00:07:56] Speaker 00:
We talked about a physical taking under the right to exclude, but also as a regulatory taking.

[00:08:02] Speaker 00:
And even in zoning cases.

[00:08:04] Speaker 01:
So you're putting more on the regulatory taking for which you have, quote, the pin central factors.

[00:08:11] Speaker 00:
Correct.

[00:08:12] Speaker 00:
That's correct.

[00:08:13] Speaker 00:
And that was really the, I believe, the essential analysis at the district court level, which Judge Gee

[00:08:21] Speaker 01:
In that Seneca Gardens case, which I'm not familiar with, but since it's a federal circuit, you mentioned HUD.

[00:08:28] Speaker 01:
Did that involve some kind of government program?

[00:08:31] Speaker 00:
Yes.

[00:08:32] Speaker 00:
Yes, it did.

[00:08:32] Speaker 00:
And the district court found, also citing Hadochuk, that the contractual obligations

[00:08:42] Speaker 00:
or contracts that the people who were running the HUD program had been interfered with was not a taking and that it was not a compensable taking.

[00:08:51] Speaker 01:
Then the circuit sort of said the government.

[00:08:53] Speaker 00:
It reversed it.

[00:08:54] Speaker 00:
And they actually did the analysis instead of remanding it back to the district court.

[00:08:59] Speaker 01:
They actually felt that- The upshot was the government didn't get to change its own deal.

[00:09:03] Speaker 01:
No.

[00:09:04] Speaker 01:
Is that fair reading?

[00:09:05] Speaker 01:
I said I haven't read it yet.

[00:09:06] Speaker 00:
That's correct.

[00:09:08] Speaker 00:
And also, I would point out, it was a summary judgment.

[00:09:11] Speaker 00:
It wasn't even a 12b6 motion.

[00:09:14] Speaker 00:
And they felt that the factual record was sufficiently developed for purposes of the Circuit Court itself to make the analysis.

[00:09:24] Speaker 00:
So with that, I would, if there are any other further questions, I would reserve my time.

[00:09:28] Speaker 04:
Thank you, counsel.

[00:09:29] Speaker 04:
We'll hear from the city.

[00:09:40] Speaker 02:
Good morning.

[00:09:41] Speaker 02:
Rebecca Young for the city of Los Angeles.

[00:09:44] Speaker 02:
What I'd first like to direct the court to is the purpose of the regulation, which was hopefully included in counsel's excerpts of record at 19.

[00:09:57] Speaker 02:
because I think that kind of sets the table for this, which is, as anyone who is a resident of LA County knows, there is a huge underserved and unhoused population.

[00:10:10] Speaker 02:
And the city through this particular regulation is obviously trying to help both that population and folks who are affected by their inability to find housing at the moment.

[00:10:26] Speaker 02:
In this case, what appears to be at issue is the property owner's desire to churn, as Judge Boggs alluded to.

[00:10:39] Speaker 02:
And there is no such right.

[00:10:42] Speaker 01:
Well, churn, I mean, I take it is that they want to cater to a tourist trade.

[00:10:46] Speaker 01:
People come to Los Angeles for the Rose Bowl or the Oscars or whatever, and that's a legitimate commercial purpose.

[00:10:56] Speaker 01:
Since you've raised that, how is this any different from any number of possible regulations that really do take people's property?

[00:11:06] Speaker 01:
You have a three-bedroom apartment complex and the government says we need more housing so you can only rent them

[00:11:15] Speaker 01:
one bedroom so we can put more families in okay yeah would you say that that's just a zoning change that they don't have to rent to anybody it's just they can only rent as one bedroom and therefore they have to you know reconfigure to get more people in you know I think if the

[00:11:37] Speaker 02:
I think if the property owner was precluded from making any money on the unit, but that's obviously not what's at issue here.

[00:11:48] Speaker 01:
In my hypothetical, the same thing as well.

[00:11:52] Speaker 01:
The city's desire to house more people in private property.

[00:12:00] Speaker 01:
They can do that in many, many ways, which are mostly involved in taking people's property and using them in a different fashion.

[00:12:10] Speaker 04:
But wouldn't that still just be a diminution in value as opposed to a complete taking of the property?

[00:12:16] Speaker 02:
Well, and that's exactly what was alleged at the complaint.

[00:12:19] Speaker 02:
I mean, there were, as we noted in our briefing, there were a host of repercussions that simply weren't alleged.

[00:12:27] Speaker 02:
And in this case, I did want to note that,

[00:12:30] Speaker 02:
And this might be the case to do it, but these exact regulations have already, in an unpublished opinion from the Ninth Circuit, have already been upheld.

[00:12:41] Speaker 02:
And it was actually the same parties.

[00:12:44] Speaker 02:
What's the title there?

[00:12:48] Speaker 02:
I hope I'm saying this right.

[00:12:49] Speaker 02:
This is the Desai case, D-E-S-A-I.

[00:12:56] Speaker 02:
That was 2013.

[00:12:57] Speaker 01:
Oh, quite a ways back.

[00:12:59] Speaker 01:
So this goes way back.

[00:13:01] Speaker 01:
Well, I apologize.

[00:13:02] Speaker 01:
Back into that in terms of.

[00:13:04] Speaker 02:
Did you want to correct the date?

[00:13:05] Speaker 02:
So the central district upheld, or excuse me, found for the city in 2013.

[00:13:11] Speaker 02:
Ninth Circuit affirmed 2015.

[00:13:13] Speaker 02:
2015, thank you.

[00:13:15] Speaker 02:
And the Ninth Circuit site is 602 Fed, APPX 392.

[00:13:21] Speaker 02:
392, thank you.

[00:13:23] Speaker 01:
Yeah, and that's in 2015.

[00:13:26] Speaker 01:
A similar type of ordinance might be that you can't rent to less than three people in a unit.

[00:13:37] Speaker 01:
They could still make money.

[00:13:39] Speaker 01:
They could still have control of their property as long as they wanted to rent, but you couldn't rent to less than three people in a one-bedroom.

[00:13:48] Speaker 01:
That would help alleviate some types of homelessness.

[00:13:52] Speaker 01:
Would that be a taking or simply a diminution of value?

[00:13:55] Speaker 02:
I believe that it would follow to the same umbrella of diminution of value.

[00:14:01] Speaker 01:
So in, whether you call it non-taking or zoning, they can simply make these changes in order to restructure the housing stock of LA for their purposes?

[00:14:14] Speaker 02:
Pursuant to the police power and the needs of that particular municipality.

[00:14:18] Speaker 02:
I mean, that's, and I, well, Los Angeles does have a unique problem in that respect.

[00:14:26] Speaker 02:
other cities as well.

[00:14:27] Speaker 02:
But, you know, in this case, there is no other allegation.

[00:14:32] Speaker 02:
And I understand that upholding on a demurrer is not an unusual situation, but, you know, is a big ask.

[00:14:43] Speaker 02:
from the city, but in this case, there are simply no other allegations on the face, on the four corners of the complaint, alleging anything other than diminution of value.

[00:14:55] Speaker 02:
And as Judge Bogsy noted, the percentages of diminution of value that have been upheld have actually been quite high, and this is

[00:15:08] Speaker 02:
It is simply when balancing a city's police power against what Guggenheim v. City of Goleta

[00:15:18] Speaker 02:
called the expected rent or the starry-eyed hope of winning the jackpot, this is the balance that has been struck.

[00:15:27] Speaker 02:
And the amount of due process built into this, which was, frankly, not exercised.

[00:15:34] Speaker 01:
Is there any difference between the existing ability and the future?

[00:15:39] Speaker 01:
That was why I asked about retroactive changes.

[00:15:43] Speaker 01:
If this was a case

[00:15:45] Speaker 01:
where they were running it as a residence, and they say, hey, if we convert it into a motel, then we'll make a lot more money.

[00:15:53] Speaker 01:
And the city says that we're not going to rezone it.

[00:15:58] Speaker 01:
They wouldn't have any case.

[00:16:00] Speaker 01:
But the fact that you'd allowed it in the past, you're not claiming neighborhood effects, for example.

[00:16:06] Speaker 01:
It's not like a porn shop.

[00:16:10] Speaker 01:
Does that make any difference?

[00:16:11] Speaker 01:
And I put it to him, is there any constitutional problem?

[00:16:15] Speaker 01:
He kind of didn't raise it.

[00:16:16] Speaker 01:
Are you confident that...

[00:16:19] Speaker 01:
that retroactive changes can never be unconstitutional?

[00:16:23] Speaker 02:
Oh, I would never.

[00:16:24] Speaker 01:
I mean, even if you pass the other test, you still have some economic value.

[00:16:30] Speaker 01:
You still have some economic use.

[00:16:33] Speaker 01:
But it's quite different than what you have been permitted in the past.

[00:16:35] Speaker 01:
Your expectations, right.

[00:16:37] Speaker 01:
Exactly.

[00:16:37] Speaker 01:
Well, not only expectations.

[00:16:39] Speaker 01:
See, that's the difference between the Russian Hill case, where they wanted to build a 40-story building, here,

[00:16:48] Speaker 01:
They've been permitted.

[00:16:49] Speaker 01:
They've been allowed.

[00:16:50] Speaker 01:
There are no problems with it other than, as you said, the city's overarching police power that we just want you to run it in a different way for our benefit.

[00:17:01] Speaker 02:
But there's no, and I know I'm repeating case law that you are well familiar with, but there is no entitlement to best use.

[00:17:10] Speaker 02:
And in fact, it was, as we noted in our briefing, there is the fact that

[00:17:19] Speaker 02:
plaintiff owned and operated the property before the ordinance was adopted doesn't affect the analysis.

[00:17:25] Speaker 02:
And that was the Rancho de Calistoga case, 800 F third at 1090 to 1091.

[00:17:30] Speaker 02:
I think that's, I hope that that's addressing the question.

[00:17:36] Speaker 02:
Okay.

[00:17:37] Speaker 02:
Judge Thomas had a question.

[00:17:38] Speaker 03:
Oh, I'm sorry.

[00:17:39] Speaker 03:
Can you just spend a moment talking about the administrative delay and whether that creates due process problems here?

[00:17:47] Speaker 03:
I mean, it wasn't quite a long.

[00:17:49] Speaker 02:
Oh, absolutely.

[00:17:50] Speaker 02:
And I was heading down that road.

[00:17:56] Speaker 02:
It's the amount of process, due process, that's built into both the administrative process, the administrative appellate process, I guess you'd call it, and the judicial appellate process.

[00:18:12] Speaker 02:
For example, you can file a writ of mandate.

[00:18:14] Speaker 02:
And I believe that's actually what was done in the Desai case.

[00:18:19] Speaker 02:
What we have here is a combination of both administrative delay, which Judge Thomas, as you know, is in and of itself standing alone insufficient to rise to a constitutional violation.

[00:18:34] Speaker 02:
But then you also have a property owner who, in fact, did not take advantage of all of the process that he was due.

[00:18:44] Speaker 02:
And that simply can't be held against

[00:18:47] Speaker 02:
the city, clearly there was a large chunk of time where there was no communication.

[00:18:56] Speaker 02:
Right, nothing was happening.

[00:18:57] Speaker 02:
Exactly.

[00:18:57] Speaker 02:
It was just radio silence.

[00:18:59] Speaker 04:
So the test is whether or not the person who is challenging the action had the opportunity to be heard in a meaningful time and in a meaningful manner.

[00:19:15] Speaker 04:
In your view, was that requirement met?

[00:19:19] Speaker 02:
It was, I think part of the problem is that both sides were, and I simply don't know why, but neither side was communicating with the other.

[00:19:38] Speaker 02:
you aren't taking advantage of the the complaint process that is clearly laid out for you I think that that when you said the complaint process I'm sorry the I don't know what else to call it I'm fumbling with my language review thank you thank you but the

[00:20:02] Speaker 01:
Can you help me?

[00:20:03] Speaker 01:
When was, were they actually required to do something different?

[00:20:08] Speaker 01:
That is, as I was reading the record, to some degree the delay might have adhered to, inured to their benefit.

[00:20:16] Speaker 01:
Were they not required to actually do anything until the manager's appeal was concluded?

[00:20:24] Speaker 02:
I believe, wait, you meeting property owner?

[00:20:28] Speaker 01:
Yes.

[00:20:28] Speaker 01:
In other words, at least to some degree, there's this business I thought where they said, oh, we reclassified you two years ago, but we didn't tell you.

[00:20:39] Speaker 01:
Well, obviously, they didn't do anything different.

[00:20:42] Speaker 01:
And then they appealed to the first level, and then it took three years for that.

[00:20:47] Speaker 01:
And again,

[00:20:48] Speaker 01:
My understanding was, again, they didn't have to do anything.

[00:20:51] Speaker 01:
When did they finally get forced to throw out the tourists?

[00:20:57] Speaker 02:
Oh, OK, that's a good question.

[00:21:00] Speaker 01:
Seemed to be a relevant consideration.

[00:21:01] Speaker 02:
Yeah, no, because you're right.

[00:21:04] Speaker 02:
And we did note that in our briefing that they, in fact, have not been, they were not affected by the recategorization of the property for four years.

[00:21:19] Speaker 02:
And I did note that when arguing in our brief that a diminution in value was insufficient, I didn't see an allegation of that.

[00:21:34] Speaker 02:
There's language to that, but there's no hard numbers.

[00:21:39] Speaker 04:
But on the procedural due process point, the issue is whether or not they were

[00:21:46] Speaker 04:
they were given a meaningful opportunity to challenge the decision.

[00:21:51] Speaker 04:
So what's your response to that?

[00:21:53] Speaker 02:
I don't know that meaningful.

[00:21:58] Speaker 02:
One would think that meaningful would encompass timely.

[00:22:02] Speaker 02:
Not just only having the administrative structure that allows you to take it up the chain, but that you would receive a timely response.

[00:22:13] Speaker 02:
that would seem to be built into the definition.

[00:22:15] Speaker 02:
That just seems right.

[00:22:19] Speaker 04:
So are you saying that they didn't have a meaningful opportunity to challenge?

[00:22:24] Speaker 02:
I would say had they been affected by it as opposed to just having it out there and actually not having to comply because the city wasn't enforcing it.

[00:22:37] Speaker 02:
The city had made this, had recategorized them.

[00:22:40] Speaker 02:
and hadn't done anything with that.

[00:22:42] Speaker 03:
So I think- So because the delay, in other words, worked to their benefit, although it might not have been a timely process, it's harmless.

[00:22:54] Speaker 03:
Exactly, yes.

[00:22:57] Speaker 02:
Wait, you're the judge.

[00:23:00] Speaker 02:
But no, but I think that that's exactly right.

[00:23:02] Speaker 02:
That when things are just laying low and no side is making a move to resolve the issue, as Stalemate assembly doesn't write to that level.

[00:23:14] Speaker 04:
They had no incentive to resolve the issue because they could continue to rent as short-term rentals.

[00:23:21] Speaker 04:
And so they had no incentive to move this appeal along.

[00:23:23] Speaker 02:
Correct.

[00:23:24] Speaker 02:
That's true.

[00:23:25] Speaker 02:
That's true.

[00:23:25] Speaker 02:
Yes.

[00:23:28] Speaker 02:
Um, oh, I'm, okay, I'm yellow.

[00:23:30] Speaker 02:
Um, so, you know, the, the, I didn't know if the court, we haven't addressed it, and I didn't know if the court wanted to address, um, the Pullman or supplemental jurisdiction.

[00:23:41] Speaker 04:
Well, the court actually did not exercise Pullman extension, so I don't know why we would have to address that.

[00:23:48] Speaker 04:
But if you want to, you may.

[00:23:50] Speaker 02:
I'm good I'm good no and I just you know the obviously the test for a district court's decision as to whether or not it's going to exercise supplemental discretion is excuse me supplemental jurisdiction is you know it's a high it's an abusive discretion it's a high standard and it just it simply hasn't been it simply hasn't been met here and I would like at this point actually to just because I foresee a lot of these similar

[00:24:20] Speaker 02:
lawsuits in the future and this might be the vehicle to know it's been unpublished and decide but it might be time for the Ninth Circuit imprimatur on these particular ordinances again I know a big ask but and it might be inappropriate on a 12b6 but

[00:24:40] Speaker 02:
I foresee this being an issue throughout Los Angeles County, and this is probably the beginning of it.

[00:24:48] Speaker 04:
All right, thank you.

[00:24:49] Speaker 02:
Thank you.

[00:24:49] Speaker 04:
You normally don't publish on local law, so.

[00:24:52] Speaker 04:
I know.

[00:24:55] Speaker 04:
Might be a pipe jury.

[00:24:55] Speaker 04:
Thank you, counsel.

[00:24:56] Speaker 04:
Thank you.

[00:24:57] Speaker 04:
Rebuttal.

[00:24:59] Speaker 04:
Counselor, I was just curious why there was no reply brief filed in this case.

[00:25:04] Speaker 00:
I'm sorry, I didn't hear you.

[00:25:05] Speaker 04:
I was curious why there was no reply brief filed in this case.

[00:25:09] Speaker 00:
I had some medical problems.

[00:25:11] Speaker 00:
Oh, I see.

[00:25:11] Speaker 00:
I apologize.

[00:25:12] Speaker 00:
Understandable.

[00:25:14] Speaker 00:
I want to touch briefly on the due process issue.

[00:25:19] Speaker 00:
I take issue as a matter of law with this issue of harmless error, and I believe I cited it in my opening brief.

[00:25:26] Speaker 00:
that there's no harmless error rule with respect to procedural due process.

[00:25:30] Speaker 00:
It's an absolute guarantee under the 14th Amendment.

[00:25:33] Speaker 00:
In the cases I cited, I believe Kerry v. Pyfus is the U.S.

[00:25:37] Speaker 00:
Supreme Court case that I cited.

[00:25:39] Speaker 00:
And in the 42 USC 1983 case, certainly you can have a procedural due process violation with only nominal damages.

[00:25:47] Speaker 00:
But it can still be, it's the guarantee that the government gives you a meaningful opportunity, a notice of opportunity to respond.

[00:25:55] Speaker 01:
I would point out... Meaningful opportunity to respond before something happens to you, if it's pre-deprivation.

[00:26:03] Speaker 01:
So if nothing is happening to you yet...

[00:26:06] Speaker 00:
Well, I disagree with that respectfully, Your Honor, because I think here.

[00:26:09] Speaker 04:
What was happening to your clients in the interim?

[00:26:12] Speaker 00:
So I think I'd like to make the distinction in the takings area that it's a deprivation, but the issue is whether the deprivation triggers the just compensation clause for purposes of being a compensable taking.

[00:26:25] Speaker 00:
In the procedural due process area, I believe there's a deprivation here immediately.

[00:26:32] Speaker 04:
What is the deprivation?

[00:26:34] Speaker 04:
Did you make the allegation that you changed the way you did your business in response to the anticipated regulation?

[00:26:46] Speaker 04:
Or I didn't see that anywhere, that there was any change in the way the property was operated.

[00:26:52] Speaker 00:
I thought we did.

[00:26:53] Speaker 04:
You have to point me to something in the record that supports the argument that a change was made in the way the properties were

[00:27:03] Speaker 04:
operated in response to the anticipated reclassification.

[00:27:09] Speaker 00:
And I believe that the first amended complaint, if I'm not mistaken, and I believe that they were paragraphs 9 through 15, and it was extensively stated how it in fact changed it.

[00:27:22] Speaker 04:
I know it said it changed it in that they would no longer be allowed

[00:27:28] Speaker 04:
to do the transit occupancy, but was there any allegation that it had already been implemented?

[00:27:37] Speaker 04:
That's what would have to be in order for there to be a procedural due process pre-deprivation.

[00:27:46] Speaker 00:
I think the city attached in their motions to dismiss the ordinance and the ordinance talks about the procedure and the procedure is is that at the time that the city makes the determination the determination is there and there you and and and but have you been affected that the problem is where you affected by it such that you were no longer able to rent your your clients were no longer able to rent their properties short-term

[00:28:15] Speaker 00:
Well, two things.

[00:28:16] Speaker 00:
I don't think it's just an effect on the use of the property.

[00:28:20] Speaker 00:
I think it's also an effect on the procedure itself.

[00:28:24] Speaker 00:
In other words, the idea of due process.

[00:28:26] Speaker 00:
If you give them a hearing, and if the hearing extends too long, then that can affect the integrity of the hearing.

[00:28:33] Speaker 00:
And the hearing itself...

[00:28:35] Speaker 00:
And the hearing itself, in other words, the evidence can become stale.

[00:28:40] Speaker 00:
Witnesses may be lost.

[00:28:42] Speaker 03:
Things that- I can understand all of that hypothetically, but did any of that happen here?

[00:28:49] Speaker 03:
I mean, are there any allegations that the delay

[00:28:54] Speaker 00:
I think those are factual issues that can't be decided until the sixth motion.

[00:29:00] Speaker 00:
I think whether, in fact, how it affected or what it would have affected is an issue that's reserved later on, but not at this point.

[00:29:08] Speaker 04:
Well, I think we have cases that said mere delay without any harm is not a violation of due process.

[00:29:14] Speaker 00:
Well, I disagree.

[00:29:15] Speaker 00:
I think that there's no harm with terrible.

[00:29:17] Speaker 00:
Well, do you disagree with the cases?

[00:29:18] Speaker 04:
Do you disagree?

[00:29:19] Speaker 04:
Because you can't disagree with the case holding that we've done.

[00:29:22] Speaker 00:
I think Harry V. Peifus is very clear.

[00:29:24] Speaker 00:
And there's another case that I would cite.

[00:29:27] Speaker 00:
It was Peralta versus Washington, out of Texas, versus Texas, state of Texas.

[00:29:34] Speaker 00:
It was a 1988 US Supreme Court case.

[00:29:36] Speaker 00:
In that case, there was a default judgment taken against a litigation, and a default judgment taken against the defendant did not respond.

[00:29:47] Speaker 00:
Under the Texas law, they had to attach a proposed answer to the complaint to remove the default.

[00:29:55] Speaker 00:
The defendant did not.

[00:29:56] Speaker 00:
He said, I don't have really any defense.

[00:29:59] Speaker 00:
substantively, but it's still a violation by procedural due process law rights.

[00:30:03] Speaker 03:
Well, but under our holding in CO, there isn't just an automatic number of years that go by and create a violation.

[00:30:14] Speaker 03:
We require some additional irregularity.

[00:30:17] Speaker 03:
So I guess that's what I'm trying to push for here is what's the additional irregularity?

[00:30:23] Speaker 03:
Like, what was the additional problem there?

[00:30:25] Speaker 00:
Before I get to that, Judge Thomas, if I could just say that in the Peralta case,

[00:30:30] Speaker 00:
The U.S.

[00:30:31] Speaker 00:
Supreme Court in 1988 reversed the Texas Supreme Court and made a distinction between substantive due process and procedural due process, and specifically said the guarantee is absolute.

[00:30:45] Speaker 00:
It is not contingent on the merits.

[00:30:47] Speaker 00:
It is not contingent on harmless error.

[00:30:49] Speaker 00:
It is not contingent on whether, in fact, you have any kind of a case.

[00:30:54] Speaker 00:
It's a guarantee the government must give.

[00:30:56] Speaker 00:
And that's why Carol V. Peivis.

[00:30:58] Speaker 04:
What case are you citing for that proposition?

[00:31:00] Speaker 00:
Pardon me?

[00:31:00] Speaker 04:
What case are you citing for that proposition?

[00:31:04] Speaker 00:
Peralta v. Medical Heights.

[00:31:06] Speaker 04:
Peralta?

[00:31:07] Speaker 00:
Peralta.

[00:31:07] Speaker 00:
P-E-R-A-L-T-A.

[00:31:09] Speaker 00:
It's a 1988 United States Supreme Court case.

[00:31:11] Speaker 04:
Oh, Supreme Court case.

[00:31:12] Speaker 00:
And I did cite, I believe, in my opening brief, the Berry v. Barchi case, which was a license revocation case that took too long in the post deprivation area.

[00:31:24] Speaker 04:
And the US Supreme Court found that... But there had already been a deprivation.

[00:31:27] Speaker 04:
That's the difference here.

[00:31:29] Speaker 04:
that you didn't plead that there had been a deprivation already.

[00:31:33] Speaker 00:
Well, I think those are factual issues about what they could and couldn't do with the property.

[00:31:38] Speaker 04:
The factual issue is whether or not the hotels were allowed to continue to do business the way it was doing business pre-ordinance.

[00:31:48] Speaker 00:
That would be the deprivation.

[00:31:50] Speaker 00:
I would submit once again that the judicial record dealing with the ordinance itself explains that.

[00:31:56] Speaker 04:
I understand.

[00:31:56] Speaker 04:
All right, counsel, you've exceeded your time.

[00:31:59] Speaker 04:
Thank you to both counsel for your helpful arguments in this case.

[00:32:02] Speaker 04:
The case just argued is submitted for decision by the court.