United States District Court, D. Hawaii
ORDER SUA SPONTE RECONSIDERING THE PORTION OF THE
MARCH 16, 2016 ORDER DISMISSING WITH PREJUDICE THE SECURITY
DEPOSIT CLAIMS AGAINST DEFENDANT HAWAII AFFORDABLE
E. Kobayashi, United States District Judge
August 11, 2015, Plaintiff Lanric Hyland
("Plaintiff" or "Hyland"), who was
proceeding pro se at the time, filed his "Verified
Complaint of Lanric Hyland; Complaint for Complaint for [sic]
Declaratory & Injunctive Relief; Appeal from Declaratory
Petition" ("Complaint"). [Notice of Removal,
filed 12/9/15 (dkt. no. 1), Decl. of Melody Parker, Exh. A.]
The defendants named in the Complaint were Defendants Office
of Housing & Community Development ("OHCD") and
the County of Hawai"i (collectively "the County
Defendants"); Hawaii Affordable Properties, Inc.
("HAPI"); and Ainakea Senior Residences LLLP
March 16, 2016, this Court issued its Order Granting in Part
and Denying in Part Defendants Office of Housing &
Community Development, County of Hawaii's Motion to
Dismiss; and Granting in Part and Denying in Part Defendant
Hawaii Affordable Properties, Inc.'s Substantive Joinder
("3/16/16 Order"). [Dkt. no. 47.
of the Complaint alleged, inter alia, that the
increase in Hyland's security deposit for Ainakea Senior
Residences ("ASR") violated his right to due
process under the United States Constitution and the
Hawai"i State Constitution. See 3/16/16 Order,
2016 WL 1047344, at *2.
The Complaint alleges that, pursuant to the [Housing
Assistance Payment ("HAP")] contract between the
County Defendants and Ainakea, "the difference between
the HAP and the contract rent is the rent paid by the
resident tenant. The tenant portion varies with each
individual but it works out that tenants generally pay about
30% of their own monthly income as their rent."
[Complaint at 12, § V.F.I.] Plaintiff also describes the
process through which the contract rent is determined by the
County Defendants and Ainakea, using the [United States
Department of Housing and Urban Development determination of
fair market rent]. [Id. at 14, § V.H.] Thus,
based on the allegations in the Complaint, HAPI is not
involved in the determination of either the contract rent or
the portion of the rent that Plaintiff must pay. . . .
Id. at *3. Further, when the total rent - referred
to as the contract rent in the 3/16/16 Order - was increased
from $800 for the 2014-2015 lease year to $981 per month for
the 2015-2016 lease year, the amount of the security deposit
was increased from $800 to $981. However, tenants who were
living at ASR as of October 2014 were not subject to the
increased security deposit. Id. at *4 (citing
Complaint at 12, § V.G). This Court therefore dismissed
Hyland's claims related to the increase in the amount of
security deposit as to all of the defendants because he did
not allege that he was required to pay the increased security
deposit for the 2015-2016 lease year. Id.
Court further ruled the dismissal of Hyland's security
deposit claims against HAPI was with prejudice because it was
absolutely clear, based on the factual allegations in the
Complaint, that no amendment could cure the defect in those
claims since HAPI was not involved in the determination of
the amount of the total rent and the security deposit.
Id. at *7
Current Security Deposit Claims
operative pleading is now Plaintiffs Lanric Hyland, Karen
Martinez, and Eliza Roze's ("Plaintiffs") Third
Amended Complaint for Declaratory and Injunctive Relief
("Third Amended Complaint"), filed on May 1, 2018.
[Dkt. no. 170.] The defendants named in the Third Amended
Complaint are: OHCD; HAPI; Ainakea and Defendant Hawaii
Island Community Development Corporation (collectively
"Ainakea Defendants"). Count I of the Third Amended
Complaint alleges that Plaintiffs are or were overcharged for
their ASR security deposits. Count I alleges that the
overcharging violates various legal authorities. Plaintiffs
have pled Count I against all of the defendants, in spite of
the 3/16/16 Order's dismissal of the security deposit
claims against HAPI with prejudice. HAPI, however, did not
file a motion to dismiss Plaintiffs' claims in Count I
against it as violating the 3/16/16 Order.
Sua Sponte Reconsideration
Court has the discretion to sua sponte reconsider
one of its prior interlocutory rulings, as long as this Court
still has jurisdiction over the subject matter of the ruling.
Pac. Radiation Oncology, LLC v. Queen's Med.
Ctr., CIVIL NO. 12-00064 LEK-KSC, 2016 WL 6996982, at *6
(D. Hawai"i Nov. 23, 2016) (citing United States v.
Smith, 389 F.3d 944, 949 (9th Cir. 2004)). In
Smith, the Ninth Circuit explained that the law of
the case doctrine does not preclude such reconsideration.
The law of the case doctrine is "wholly inapposite"
to circumstances where a district court seeks to reconsider
an order over which it has not been divested of jurisdiction.
See [City of Los Angeles v.] Santa Monica Baykeeper,
2 54 F.3d [882, ] 888 [(9th Cir. 2001)]. In Santa Monica
Baykeeper, the district court sua sponte
reconsidered its own order certifying for interlocutory
appeal the denial of a motion to dismiss. Id. at
884. We were asked to assess whether the court's
reconsideration of its order violated the law of the case
doctrine. Id. Our analysis emphasized the importance
in law of the case doctrine jurisprudence of distinguishing
between a district court's consideration of its own prior
decision and the directive of a higher court:
The legal effect of the doctrine of the law of the case
depends upon whether the earlier ruling was made by a trial
court or an appellate court. All rulings of a trial
court are subject to revision at any time before the entry of
judgment. A trial court may ...