Posted by: Patricia Salkin | October 16, 2020

Ninth Circuit Reverses Dismissal of Procedural Due Process Claim by Motel Operator

This post was authored by Matthew Loescher, Esq.

Appellants (collectively “Patel”) operated a motel in South El Monte, California, located near the 60 Freeway. Patel initiated this 42 U.S.C. § 1983 litigation after the City cited him three times for violating a longstanding City ordinance prohibiting most outdoor businesses in a commercial zone, South El Monte Mun. Code § 17.14.200, and also for violating two interim ordinances, 1222-U and 1224-U, temporarily prohibiting automotive storage businesses within 500 feet of the 60 Freeway. The United States District Court for the Central District of California granted city’s motion to dismiss, and Patel appealed.

The record indicated that the district court dismissed this claim because Patel failed to allege that he first sought compensation in state court, as had previously been required by the Supreme Court in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172, 194 (1985). The court noted that this constituted a legal error, as the Supreme Court’s subsequent decision in Knick v. Township of Scott overruled Williamson’s requirement that a takings claim first be exhausted in state court. The court therefore reversed the dismissal of this takings claim and remanded it for further proceedings.

The court next noted that Patel failed to allege that the City treated any similarly situated entities differently than him. Specifically, Patel claimed that the City treated his motel differently than nearby service stations. However, the court found that the nature of those businesses was qualitatively different from the nature of Patel’s business under the express terms of § 17.14.200. Moreover, Patel failed to allege that these businesses also lacked a hardship exemption under 1222-U or 1224-U. As such, Patel failed to allege that he was treated differently than other, similarly situated businesses.

Patel next contended that the City retaliated against him for the exercise of free speech -his attorney speaking on Patel’s behalf against the ordinances at a City Council meeting – by thereafter citing him for violating the municipal code and interim ordinances and telling him that he had to give up his conditional use permit to operate his motel in order to obtain a hardship exemption. The court found those allegations alone were insufficient to allege a plausible retaliation claim as there was evidence the City had told Patel the aforementioned prior to his protected speech.

Patel also claimed that he was deprived of procedural due process because the City hired and paid the hearing officer on an ad hoc basis. The district court dismissed this claim since Patel could seek de novo review of the hearing officer’s decision in state court. The court found that the district court erred by doing so. Specifically, the court determined that the availability of a subsequent impartial de novo review was not a cure for a biased hearing examiner in the first instance. Nevertheless, Patel’s second amended complaint failed to allege that the hearing officer had a financial bias in the outcome of his case, as was required in a due process test. Consequently, the court affirmed the dismissal of the claim on this alternate ground.

Patel v City of South El Monte, 827 Fed. Appx. 669 (9th Cir. CA 9/16/2020)

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