Gene Cashman and Athena Sutsos v. City of Cotati, a Municipal Corporation

Appellants Gene Cashman and Athena Sutsos, both mobilehome park owners, allege that the rent control ordinance adopted by appellee City of Cotati, California (“the City”) effects a regulatory taking in violation of the Fifth and Fourteenth Amendments to the United States Constitution. After granting their motion for summary judgment and entering judgment, the district court amended then vacated that judgment pursuant to Federal Rules of Civil Procedure 59(e) and 60(b), respectively. The district court conducted a trial and entered judgment for the City. Cashman and Sutsos appeal the district court’s orders amending and vacating the original judgment, as well as its findings and conclusions following trial.

*890 We vacate the post-trial judgment and remand to the district court for reinstatement of the original judgment in favor of Cashman and Sutsos.

I

On September 23, 1998, the City-adopted Ordinance No. 680, entitled the Mobilehome Park Space Rent Stabilization Program (“Ordinance No. 680” or “the Ordinance”). The City adopted Ordinance No. 680 in anticipation of the repeal of its then-governing rent control ordinance, Chapter 19.12, adopted in 1979 (“the 1979 Ordinance”). 1…

dissenting:

In this case we return, unhappily, to rent control. I respectfully but emphatically dissent.

We took a wrong turn in Richardson v. City and County of Honolulu, 124 F.3d 1150, 1164 (9th Cir.1997), where we held that when a tenant actually captures a premium resulting from a rent control statute, the statute is an unconstitutional regulatory taking unless it “substantially furthers a legitimate state interest.” We continued on the wrong path in Chevron USA, Inc. v. Cayetano, 224 F.3d 1030 (9th Cir.2000) (Chevron I), where we concluded that when a tenant may possibly capture a premium, the “substantially furthers” test must be satisfied and remanded for trial. Id. at 1040, 1042 (now stating the test as whether the statute “substantially advances a legitimate state interest”) (emphasis added). We persisted on that wrong path in Chevron USA Inc. v. Lingle, 363 F.3d 846 (9th Cir.2003) (Chevron II), where we affirmed the judgment of the district court, concluding that its factual finding that the rent control statute did not satisfy the “substantially advances” test was not clearly erroneous. 363 F.3d at 857. We now desert the wrong path taken in Richardson, Chevron I, and…

374 F.3d 887 Gene CASHMAN and Athena Sutsos, Plaintiffs-Appellants, v. CITY OF COTATI, a municipal corporation, Defendant-Appellee. No. 03-15066. United States Court of Appeals, Ninth Circuit. Argued and Submitted February 11, 2004. Filed July 15, 2004. COPYRIGHT MATERIAL OMITTED R.S. Radford, Meriem L. Hubbard, and Harold E. Johnson, Pacific Legal Foundation, Sacramento, CA, for the appellants. Donald R. Lincoln and Henry E. Heater, Endeman, Lincoln, Turek & Heater LLP, San Diego, CA, and Jeffrey A. Walter, Walter & Pistole, Sonoma, CA, for the appellee. Appeal from the United States District Court for the Northern District of California; Saundra B. Armstrong, District Judge, Presiding. D.C. No. CV-99-03641-SBA/RS. Before ALARCÓN, BEEZER, and W. FLETCHER, Circuit Judges. BEEZER, Circuit Judge. 1 Appellants Gene Cashman and Athena Sutsos, both mobilehome park owners, allege that the rent control ordinance adopted by appellee City of Cotati, California ("the City") effects a regulatory taking in violation of the Fifth and Fourteenth Amendments to the United States Constitution. After granting their motion for summary judgment and entering judgment, the district court…