DUNEX, INC., a California corporation v. City of Oceanside; Oceanside Manufactured Home Fair Practices Commission

* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
** The Honorable Kevin Thomas Duffy, Senior United States District
Judge for the Southern District of New York, sitting by designation.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DUNEX, INC., a California corporation;
CAVALIER MOBILE ESTATES, a
California limited partnership,
Plaintiffs - Appellants,
v.
CITY OF OCEANSIDE; OCEANSIDE
MANUFACTURED HOME FAIR
PRACTICES COMMISSION,
Defendants - Appellees.
No. 10-56871
D.C. No. 3:10-cv-01478-JLS-CAB
MEMORANDUM*
Appeal from the United States District Court
for the Southern District of California
Janis L. Sammartino, District Judge, Presiding
Argued and Submitted June 8, 2012
Pasadena, California
Before: TROTT and BYBEE, Circuit Judges, and DUFFY, Senior District Judge. **
FILED
JUN 25 2012
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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Dunex, Inc. and Cavalier Mobile Estates (collectively, “Dunex”) appeal the
district court’s order granting the City of Oceanside’s (“Oceanside”) Rule 12(b)(1)
and (6) motion to dismiss. The district court determined that Dunex’s state court
action, in which it brought a writ of mandate challenging the denial of its request
for an increase in its rent ceiling, precluded Dunex from asserting federal claims in
federal court because those claims were all based on the same “primary right” as
asserted in the state action. We have jurisdiction under 28 U.S.C. § 1291, and we
affirm.
Dunex argues that the district court misapplied California law in concluding
that Dunex’s federal claims were barred by res judicata. The res judicata question
in this case is squarely addressed by our decision in Manufactured Home
Communities Inc. v. City of San Jose (“MHC”), 420 F.3d 1022 (9th Cir. 2005),
which applied California law. MHC makes clear that if “[Dunex’s federal] claims
all relate to a single Ordinance and [the City of Oceanside’s] application of that
Ordinance to [Dunex’s] petition for a rent increase,” 420 F.3d at 1031–32, and if
Dunex already litigated its right to a rent increase in state court, then under
California’s “primary right” theory of res judicata, Dunex’s federal claims are
barred. See id.

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In its amended petition for a writ of mandate in the state court action, Dunex
alleged that Oceanside wrongly denied Dunex’s rent increase application and
thereby denied Dunex due process and violated the state and federal constitutions.
Dunex also claimed that, as applied, the Ordinance effected a regulatory taking of
its property. Dunex’s district court action likewise alleged, among other things,
denials of due process, unconstitutional takings, an equal protection violation, and
violations of the federal Constitution. Although styled as different theories,
Dunex’s federal claims all address a single theory—that Dunex is not receiving a
fair return on its investment in its property. Because the California Superior Court
already determined that Dunex is receiving a fair return on its investment, we
would have to “upset[ the] legal conclusion[] of the California courts” to afford
Dunex relief. Id. at 1032. Res judicata prevents us from doing so.
It is possible that Dunex could have reserved its federal claims before
bringing its state court action. See England v. La. State Bd. of Med. Exam’rs, 375
U.S. 411, 415 (1964). But because no such reservation was made, we are “unable
to pass judgment on [Dunex’s] claims without addressing the state court’s
determinations on [the fair return] issues. Any remedy for [Dunex] on these claims

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1 Because we affirm the district court on the basis of res judicata, thereby
resolving all of Dunex’s claims, we do not address Dunex’s ripeness argument.
4
would in effect nullify that judgment in violation of res judicata.” MHC, 420 F.3d
at 1032 (internal quotation marks omitted).1
AFFIRMED.

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