Ninth Circuit: Rent Control Ordinance Not a Taking or Due Process Violation

In Action Apartment Ass'n v. City of Santa Monica, No. 05-56533 (Dec. 3, 2007), the US Court of Appeals for the Ninth Circuit sustained Santa Monica, California's 2002 amendments to its rent control ordinance against a takings and due process challenge:

In this appeal, we are presented with a claim that Santa Monica’s rent control ordinance is unconstitutional under both the “public use” component of the Fifth Amendment’s Takings Clause and the substantive component of the Fourteenth Amendment’s Due Process Clause. We conclude that the Fifth Amendment claims are not viable, that the facial Fourteenth Amendment claim is time-barred, and that the as applied Fourteenth Amendment claim is unripe. We therefore affirm the judgment of the district court, dismissing the complaint.

Slip op. at 15619.  The court held that the case were not distinguishable from the claims in Schnuck v. City of Santa Monica, 935 F.2d 171, 172 (9th Cir. 1991), which held the ordinance was rationally related to a public purpose. 

The court next affirmed the district court dismissal of the substantive due process challenge, although for different reasons.  The district court dismissed the claim on the basis of Armendariz v. Penman, 75 F.3d 1311 (9th Cir. 1996), which held that a property owner could not bring both takings and due process challenges to a regulation.  However, the court noted that the  Amendariz rationale had been superseded by Lingle.  See Crown Point Dev., Inc. v. Sun Valley, No. 06-35189 (9th Cir. Nov. 1, 2007), a case I posted about here. 

The Action Apartment court recognized the viability of the claim, but held that the statute of limitations had expired since it was not brought within two years of the initial enactment of the rent control ordinance in 1979.  Because the plaintiff did not allege its substantive due process claims were based on the 2002 amendments, the court held its claim was time barred.  The court also held that another plaintiff's due process claims were not brought too late, but were too early and barred by ripeness because that plaintiff did not allege the city had actually enforced the 2002 amendments against him.