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Ninth Circuit:
Landlord Had Standing to Assail County’s Eviction Ban
Bybee Says That Bleak Prospects for Prevailing Based on Lack of Actual Injury Is Separate From Standing
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals held yesterday, in a 2-1 decision, that the District Court erroneously dismissed a landlord’s action alleging that the County of Los Angeles violated the U.S. Constitution’s Contracts Clause by barring the eviction of tenants during the pandemic.
District Court Judge Dean D. Pregerson of the Central District of California held on April 15, 2022 that plaintiff Howard Iten “has not alleged an injury in fact, and therefore lacks standing.” Ninth Circuit Senior Judge Jay S. Bybee, joined by Judge Danielle J. Forrest, said in an opinion reversing the dismissal that Iten might fail to show liability—given that the tenant had not given notice of an inability to pay the rent and therefore could lawfully have been evicted—but that he did have standing, explaining:
“Standing concerns who can bring a challenge to a particular law; it is an inquiry into whether and how the law in question affects the party who has brought the suit. The injury-in-fact inquiry seeks to assure that the plaintiff is not an intermeddler, generally unhappy with the law, but without any particular stake in the outcome. Whether the party can ultimately prevail in the suit is an entirely different question.”
District Court Judge Andrew P. Gordon of the District of Nevada, sitting by designation, said in a concurring opinion that he agrees there should be a remand so that arguments on standing can be developed, but disagreed that “Iten has plausibly alleged standing on this record.”
The Contracts Clause—Art. I, §10 of the Constitution—provides: “No State shall…pass any…Law impairing the Obligation of Contracts….”
Pregerson’s View
Pregerson said in his order dismissing the action with prejudice:
“Here, if the Moratorium does not prevent Plaintiff from evicting his tenant, then as a matter of course, the Moratorium cannot have caused Plaintiff any injury, and he lacks standing to bring suit.”
Bybee declared in yesterday’s opinion:
“With respect, we think this is not the right question. To show injury and causation for standing purposes, Iten need not allege that he would have been able to evict his Tenant ‘but for’ the Moratorium. Nor need he show that his Tenant qualifies for the affirmative defense provided by the Moratorium. Rather, Iten need only allege that the Moratorium imposed additional rights, remedies, conditions, or procedures that impair the obligations to which he and his Tenant had contracted. Iten has made that showing here.”
Bybee noted that Iten “has alleged that Los Angeles County changed the framework for his lease with his Tenant by creatine an additional affirmative defense for the Tenant, enacting a year-long forbearance period for unpaid rent, prohibiting Iten from charging late fees or interest, and adding civil and criminal penalties beyond those previously provided under California landlord-tenant law” and alleged a diminution of the property value.
Concurring Opinion
Gordon expressed this view:
“A plaintiff asserting a Contracts Clause claim must show an injury-in-fact to satisfy Article III standing, just as any other plaintiff would. An injury-in-fact ‘cannot be conjectural or hypothetical.’…But the majority’s theory would confer standing on a landlord whose tenant never stopped paying rent even though that landlord did not suffer a concrete, particularized, non-hypothetical injury from any of the Moratorium’s provisions. Article III standing requires more.
“In addition, as the majority opinion recognizes in footnote one, we lack sufficient information regarding when the Moratorium went into effect vis-à-vis when Iten voluntarily chose to enter into a new lease with the Tenant. As a result, Iten has not plausibly alleged he has standing because if he entered into the new lease after the Moratorium went into effect, then the Moratorium cannot plausibly be a change in the law impairing his contract and he would not have adequately alleged an injury-in-fact….Consequently, remanding with a direction that Iten has standing is premature.”
He went on to say:
“Because the district court (properly) raised the standing issue sua sponte during a hearing on the County’s motion to dismiss, the parties did not fully brief standing, and it is not clear that amendment would be futile. Iten may be able to plausibly allege facts giving him standing to challenge the Moratorium’s various provisions. Thus, I would reverse the district court’s order dismissing the case with prejudice and remand for further development of the standing issues.”
The case is Iten v. County of Los Angeles, 22-55480.
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