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Topa Equities v. City of Los Angeles

No. CV 00-10455 GHK (RNBx) (C.D. Ca. April 8, 2002) (Order on preemption issue), aff'd, 342 F.3d 1065 (9th Cir. 2003).
Summary: Owner brought suit to challenge application of local rent control law to former § 236 project that was prepaid, based on federal preemption provision of 42 U.S.C. § 4122 (LIHPRHA § 232). Pleadings include review of legislative history. In a useful decision on the issue, the District Court reviewed the legislative history and found that there was neither express nor implied preemption of the local rent control law. The Ninth Circuit Court of Appeals affirmed, although using different reasoning. While finding LIHPRHA § 232 "extant," it ruled that the local law did not violate that provision because it did not "restrict or inhibit" prepayment and was a "law of general applicability" exempted by the terms of § 232. The Ninth Circuit also ruled that there was no conflict preemption because there was no federal policy to assure unrestricted market rents after prepayment.

Ninth Circuit Opinion (PDF)

Ninth Circuit affirms judgment of the distrcit court that local law setting base rents for prepaid property at last federal rents is neither expressly or impliedly preempted by federal law. On the express preemption claim, although the courrt stated that LIHPRHA's Section 232 was still "extant," it held that the local law did not violate that provision because it did not "restrict or inhibit" prepayment because the owner was still free to do so. It further held that the local law was one of general applicability within the meaning of the Section 232(b)'s exemption for such laws. On conflict preemption, the court ruled that because there is no federal policy to allow owners to charge unrestricted market rents upon prepayment, no conflict existed.

Brief of Amicus Curiae In Support of the City of Los Angeles (DOC)

Appellant's Reply Brief (PDF)

City of Los Angeles' Opposition Brief(WPD)

Appellant's Opening Brief (PDF)

District Court Opinion on Preemption, April 8, 2002 (PDF)

Supplemental Briefing on History of the National Housing Act (PDF)

* Nothing In The Legislative History Of Section 236 Of The National Housing Act Indicates A Congressional Objective To Give Owners The Right To Charge Market Rents Unregulated By The Local Exercise Of Police Power After Prepayment Of A Section 236 Mortgage
* Legislative History Outside Of Section 236 Cannot Legitimately Be Used To Support A Finding Of Conflict Preemption And Should Be Subject To Careful Scrutiny By The Court

Reply Brief on Preemption (PDF) (WPD)

* Because LIHPRHA Was Impliedly Repealed Due to Congress’ Failure to Fund the LIHPRHA Program, Plaintiff Cannot Invoke The Preemption Powers Of Section 4122.
* Subsection (b) of Section 4122 Explicitly Exempts Local Rent Control Laws of General Applicability From The Scope of Section 4122.
o Under Conflict Preemption Principles, Section 4122 of LIHPRHA Does Not Preempt Local Rent Control Ordinances Of General Application Such As LARSO.
o The Second Part Of The Conflict Preemption Test Is Not Satisfied: The 1990 Amendments To LARSO Merely Clarify The Effect Of A Pre-Existing Statutory Scheme And Thus Are Not Subject To Preemption.
o Even If The Entire LARSO Statute Had Been Adopted After The Passage Of LIHPRHA, There Would Still Be No Conflict Preemption Because LARSO Is A Local Law Of General Application Specifically Exempted From Preemption By 4122(b).

Joint Brief on Issue of Preemption (WPD) (PDF)

This is the City's portion of a joint brief on preemption, prepared in an unusual procedural context where there was no motion pending, but the Court requested parties work together to draft a joint brief on this issue.

* Plaintiffs Complaint Is Barred Because Plaintiff Has No Right Of Action To Challenge The Low Income Housing Preservation And Resident Homeownership Act Of 1990.
* Section 232 Of LIHPRHA Does Not Preempt The Los Angeles Rent Control Ordinance.

o Read In Its Entirety, The Language Of LIHPRHA Does Not Preempt State Or Local Laws Of General Applicability Such As LARSO.
o The Los Angeles Rent Stabilization Ordinance Is An Ordinance Of General Applicability Within The Meaning Of Section 232(b) Of LIHPRHA.
o LIHPRHA Was Impliedly Repealed When Congress Cut Off Funding For The HUD Oversight Program Set Up By LIHPRHA.

* There Is No Direct Cause Of Action Under Article VI, Clause 2 Of The Constitution When A Direct Remedy Is Available Under 42 U.S.C. § 1983.
* The Statute Of Limitations For A 42 U.S.C. § 1983 Cause Of Action Is Applicable To All Constitutional Torts.
* The statute of limitations for plaintiff's claims accrued in 1990 when a clarifying amendment was made to LARSO and LIHPRHA was adopted.

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