                           NOT FOR PUBLICATION

                   UNITED STATES COURT OF APPEALS
                                                                           FILED
                           FOR THE NINTH CIRCUIT
                                                                           AUG 12 2016
                                                                        MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS
HERMOSA ON METROPOLE, LLC, a                     No.   14-56433
California limited liability company;
HERMOSA NNN, LLC,                                D.C. No.
                                                 2:13-cv-02439-AB-FFM
              Plaintiffs-Appellants,

 v.                                              MEMORANDUM*

CITY OF AVALON, a municipal
corporation,

              Defendant-Appellee.


                    Appeal from the United States District Court
                       for the Central District of California
                    Andre Birotte, Jr., District Judge, Presiding

                       Argued and Submitted August 5, 2016
                               Pasadena, California

Before: KOZINSKI and WARDLAW, Circuit Judges, and BENCIVENGO,**
District Judge.




         *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
         **
             The Honorable Cathy Ann Bencivengo, United States District Judge
for the Southern District of California, sitting by designation.
                                                                                  page 2
      1. Hermosa’s Due Process and Takings Clause claims require a

constitutionally protected interest in the autoette permits for which it applied. See

Nev. Dep’t of Corr. v. Greene, 648 F.3d 1014, 1019 (9th Cir. 2011) (Due Process

Clause); McIntyre v. Bayer, 339 F.3d 1097, 1099 (9th Cir. 2003) (Takings Clause).

A protected property interest exists when an individual has a “legitimate claim of

entitlement” that derives from “existing rules or understandings.” Bd. of Regents

v. Roth, 408 U.S. 564, 577 (1972). Whether a statute establishes such a claim

depends “largely upon the extent to which the statute contains mandatory language

that restricts the discretion of the decisionmaker.” Doyle v. City of Medford, 606

F.3d 667, 673 (9th Cir. 2010) (citation and internal quotation omitted). Here, the

relevant statute is the city’s ordinance governing the issuance of autoette permits.

The ordinance says that permits “may be granted,” not that they must. Avalon,

Cal., Code § 4-4.1703(g)(1) (emphasis added). There is likewise no property right

based on a “mutually explicit” understanding between Hermosa and Avalon. See

Perry v. Sindermann, 408 U.S. 593, 601 (1972). Hermosa is a commercial

enterprise applying for a large number of residential permits in a small island

community with good reason to be concerned about traffic. Avalon has a separate

procedure for commercial enterprises, and Hermosa is free to avail itself of that
                                                                                 page 3
process. But Hermosa established no constitutionally protected property interest in

residential permits.


      2. Hermosa’s equal protection claims do not require a constitutionally

protected property interest. See Outdoor Media Grp. v. City of Beaumont, 506

F.3d 895, 903 (9th Cir. 2007). Hermosa can succeed on these claims if it shows

that it was intentionally treated differently from others, and that the difference in

treatment lacked a rational basis. See Gerhart v. Lake Cty., Mont., 637 F.3d 1013,

1022 (9th Cir. 2011). The district court properly rejected these claims. Even if

Hermosa could establish that it was intentionally singled out, a small island

community might rationally be concerned about a large increase in autoettes and

who obtains them. A sudden addition of 32 autoettes may have exceeded the

island’s optimal parking or traffic capacity; owners and occupants may be different

kinds of drivers. These reasons don’t need to clear a high bar: A rational basis

“may be based on rational speculation unsupported by evidence or empirical data.”

F.C.C. v. Beach Commc’ns, Inc., 508 U.S. 307, 315 (1993). The city did not

violate equal protection by denying Hermosa’s application or distinguishing

between mere owners and long-term occupants of city properties.
                                                                        page 4
       AFFIRMED. The district court did not err in granting summary judgment

to the city.
