Wright v. Incline Village General Imp. Dist.

597 F.Supp.2d 1191

Frank WRIGHT, Plaintiff, v. INCLINE VILLAGE GENERAL IMPROVEMENT DISTRICT, and Does 1 through XX, inclusive, Defendants.

No. 3:08-CV-00119-LRH-VPC.

United States District Court, D. Nevada.

February 9, 2009.

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Michael W. Large, Daniel T. Hayward, Laxalt & Nomura, Ltd., Reno, NV, for Plaintiff.

Stephen C. Balkenbush, Thorndal Armstrong Delk, Et Al., Reno, NV, T. Scott Brooke, Brooke Shaw Zumpft, Minden, NV, for Defendants.

ORDER

LARRY R. HICKS, District Judge.

Presently before the court is Defendant Incline Village General Improvement District's ("IVGID") Motion to Dismiss (# 14¹). Plaintiff Frank Wright has filed an opposition (# 15) to which IVGID replied (# 18). Also before the court is Plaintiff's Motion for Preliminary Injunction (# 2). In response, IVGID has filed a Motion to Stay or Extend Briefing Schedule on Plaintiff's Motion for Preliminary Injunction (# 13). Plaintiff has filed an opposition (# 16) to which IVGID replied (# 17). Finally, Plaintiff has also filed a Motion for Leave to File First Amended Complaint (#21). IVGID has filed an opposition (#22) to which Plaintiff replied (#23).

I. Facts and Procedural History

This is a civil dispute arising out of Plaintiff's attempts to access beaches owned and operated by IVGID in Incline Village, Nevada. IVGID is a political subdivision of the State of Nevada and provides water, sewer, trash, and recreational services for the communities of Incline Village and Crystal Bay, Nevada.

In 1968, IVGID purchased two parcels of private beachfront property on Lake Tahoe. These parcels are known as Burnt Cedar Beach, Incline Beach, Ski Beach, and Hermit Beach (collectively, "IVGID beaches" or "beaches"). Washoe County and the State of Nevada have designated the IVGID beaches as public parks and grant the beaches tax-exempt status. The beaches are fenced and have signs that prevent nonresidents and some residents from accessing the beaches. Generally, IVGID staff monitors and controls access to the beaches.

An IVGID ordinance provides IVGID with the authority to limit access to the beaches. Ordinance 7 governs the rules and regulations concerning recreation access to IVGID facilities, including the IVGID beaches. Section 62 of Ordinance 7 provides, "Parcels annexed to the District after May 30, 1968, are not eligible for District beach access as per deed restrictions listed on the beach property." (Compl. (# 1), Ex. 2.)

Section 62 is based on a restrictive covenant in the 1968 deed conveying the beaches to IVGID ("1968 covenant" or "restrictive covenant"). The covenant indicates that IVGID is to hold, maintain, and use the IVGID beaches "only for the purposes of recreation by, and for the benefit of, property owners and their tenants (specifically including occupants of motels and hotels) within [IVGID] as now constituted, and, as the Board of Trustees of said District may determine, the guests of such property owners, and for such other purposes as are herein expressly authorized." (Compl. (# 1), Ex. 1 (emphasis added).) IVGID reads the covenant to limit access to the beaches only to those individuals owning properties that were located within the boundaries of IVGID as constituted in 1968 ("1968 property owners").

On April 30, 2008, IVGID adopted Policy and Procedure Number 136 ("Policy 136"). The policy "recognizes that public expression, speech and assembly is a fundamental right." (Pl.'s Mot. File First Am. Compl. (# 21), Ex. 3.) The policy also recognizes that IVGID must balance the public's right to First Amendment expression with IVGID's "significant interest[s]," including assuring orderly conduct, protecting the rights of the 1968 property owners, and protecting the properties' "unique environment." (Pl.'s Mot. File First Am. Compl. (# 21), Ex. 3.) To balance these interests, the policy designates "public forum areas" on IVGID properties, including the IVGID beaches, where members of the public can exercise their First Amendment rights.

Plaintiff is a resident of Crystal Bay, Nevada, and his property lies within the boundaries of IVGID. However, IVGID annexed his property into the district after 1968. As a result, pursuant to the 1968 covenant, IVGID maintains that Plaintiff is not eligible for unrestricted access to the IVGID beaches.

In the complaint, Plaintiff alleges that, through enforcement of the 1968 covenant and Ordinance 7, IVGID has deprived him of his rights under the First and Fourteenth Amendments to the United States Constitution in violation of 42 U.S.C. § 1983. The complaint further alleges that the restrictive covenant and Ordinance 7 facially violate the First and Fourteenth Amendments to the United States Constitution. Plaintiff seeks a declaration that Ordinance 7 is unconstitutional on its face and as applied to Plaintiff and that the 1968 covenant is likewise unconstitutional. Plaintiff also seeks "temporary, preliminary, and permanent injunctive relief enjoining IVGID from enforcing Ordinance 7, the restrictive covenant ... and its policy of exclusion of nonresidents and some residents."

II. Motion to Dismiss²

Defendant has filed a motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(7), arguing that this court lacks jurisdiction to hear Plaintiff's claims and that Plaintiff has failed to join necessary and indispensable parties. The court will address each of these arguments below.

A. Subject-Matter Jurisdiction

Federal courts are courts of limited jurisdiction. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978). "A federal court is presumed to lack jurisdiction in a particular case unless the contrary affirmatively appears." Stock West, Inc. v. Confederated Tribes of the Colville Reservation, 873 F.2d 1221, 1225 (9th Cir.1989).

Federal Rule of Civil Procedure 12(b)(1) provides that a court may dismiss a claim for lack of subject-matter jurisdiction. Fed.R.Civ.P. 12(b)(1). Although the defendant is the moving party in a motion to dismiss, the plaintiff is the party invoking the court's jurisdiction. As a result, the plaintiff bears the burden of proving that the case is properly in federal court. McCauley v. Ford Motor Co., 264 F.3d 952, 957 (9th Cir.2001) (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936)).

A motion to dismiss pursuant to Rule 12(b)(1) may be brought as a factual challenge or as a facial challenge. Thornhill Publ'g Co., Inc. v. General Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir.1979). "In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction." Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.2004).

Here, IVGID asserts a factual attack on jurisdiction. When resolving a factual attack on jurisdiction, the district court may review evidence beyond the complaint. Id. at 1039. Thus, the party attacking the substance of the complaint may present affidavits or other evidence properly before the court. St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989). If the moving party presents such affidavits or other evidence, the party opposing the motion must present affidavits or other evidence necessary to demonstrate that the court has jurisdiction. Id. In addition, the court may look beyond the complaint to matters of the public record without converting the motion into a motion for summary judgment. White v. Lee, 227 F.3d 1214, 1242 (9th Cir.2000) (citations omitted).

When faced with a factual attack, "[n]o presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Thornhill Publ'g Co., Inc., 594 F.2d at 733 (quoting Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3rd Cir. 1977)). "However, where the jurisdictional issue and substantive issues are so intertwined that the question of jurisdiction is dependent on the resolution of factual issues going to the merits, the jurisdictional determination should await a determination of the relevant facts on either a motion going to the merits or at trial." Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir.1983). "[A]n action should not be dismissed for lack of jurisdiction without giving the plaintiff an opportunity to be heard unless it is clear the deficiency cannot be overcome by amendment." May Dep't Store v. Graphic Process Co., 637 F.2d 1211, 1216 (9th Cir.1980).

1. Standing

IVGID first argues Plaintiff lacks standing to bring this action. Lack of standing is a defect in subject-matter jurisdiction and may properly be challenged under Rule 12(b)(1). See Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986).

Article III of the United States Constitution requires federal courts to adjudicate only actual cases and controversies. Allen v. Wright, 468 U.S. 737, 750, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984). "In essence the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues." Id. at 750-51, 104 S.Ct. 3315 (quoting Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). Generally, "the standing inquiry requires careful judicial examination of a complaint's allegations to ascertain whether the particular plaintiff is entitled to an adjudication of the particular claims asserted." Id. at 752, 104 S.Ct. 3315. "Although standing in no way depends on the merits of the plaintiff's contention that particular conduct is illegal, it often turns...