The petitioners have filed their reply brief in Guggenheim v. City of Goleta, No. 10-1125 (petition for cert. filed Mar. 11, 2011), the case involving California mobile home park owners who are asking the Court to review the decision of a sharply divided en banc Ninth Circuit which held that Goleta’s mobile home rent control ordinance did not work a regulatory taking under Penn Central because the Guggenheims purchased their mobile home park after it was rent regulated. Disclosure: we filed an amicus brief in the case in support of the property owners.
The reply brief responds to the City’s BIO, and argues:
Instead of defending the Ninth Circuit’s decision on its own terms, the City rewrites it. According to the City, the Ninth Circuit conducted a fact-intensive Penn Central analysis that did not turn solely on the fact that petitioners had purchased the mobile-home park after the rent-control regime had gone into effect. But the City’s own analysis gives the game away: Echoing the Ninth Circuit, the City argues that each of the three Penn Central factors turns solely on the timing of petitioners’ purchase. In the City’s view, the challenged ordinance has no “economic impact” on petitioners because it “had applied to the property for the preceding two decades”; their investment-backed expectations were not upset because they purchased the property “ten years after the County amended the challenged rent limits”; and the character of the government action was such that it “did not change the status quo.” Brief in Opp. 1–2. Repackaging the forbidden “blanket rule” as a Penn Central analysis cannot reconcile the Ninth Circuit’s holding with Palazzolo.
In reality, the Ninth Circuit squarely held that petitioners “could have no ‘distinct investment-backed expectations'” that they could obtain rent in excess of what was permitted by the preexisting rent-control law, and that this sole fact was “fatal to [petitioners’] claim.” Pet. App. 18a–19a. It distinguished Palazzolo on the ground that in that case the transfer of property had occurred by operation of law, while petitioners had purchased their mobile-home park, and so “the price they paid for the mobile home park doubtless reflected the burden of rent control they would have to suffer.” Id. at 18a; see also at 36a (Bea, J., dissenting) (“[T]he majority points out the transfer in Palazzolo was by operation of law … whereas [petitioners] purchased the mobile home
park on the open market. So?”). As the numerous amici curiae supporting this petition recognize, the Ninth Circuit’s holding “directly contravenes Supreme Court precedent.” Id. at 35a (Bea, J., dissenting). Accordingly, this Court should grant review.
Reply Brief for Petitioners, Guggenheim v City of Goleta, No 10-1125