ARMF Realty LLC v. County of Orange

Background

The plaintiffs brought claims under 42 U.S.C. § 1983, a law that allows claims for violations of constitutional rights by state or local government actors. They alleged violations of the Fifth and Eighth Amendments and asserted a state-law claim for unjust enrichment.

The complaint concerned properties owned by the plaintiffs that were sold at Orange County tax auctions. The complaint alleged that the properties sold for amounts greater than the unpaid local property taxes and penalties. The plaintiffs claimed that the County’s collection of the remaining equity violated their constitutional rights and unjustly enriched the County.

Motion to Dismiss

The County moved to dismiss under Federal Rule of Civil Procedure 12(b)(6). This rule asks whether a complaint contains enough factual allegations to state a legally plausible claim, rather than merely reciting the elements of a claim or stating legal conclusions.

Judge Roman concluded that the Fifth Amendment claim contained only a conclusory assertion that the plaintiffs had been injured by a constitutional violation. The Eighth Amendment claim similarly asserted, without supporting factual allegations, that the County had imposed excessive fines. The unjust enrichment claim stated only that the plaintiffs were damaged by the County’s unjust enrichment through the confiscation of equity in their properties.

The court held that these allegations did not satisfy the requirement that a complaint contain enough facts to make entitlement to relief plausible. It therefore granted the County’s motion to dismiss without prejudice and dismissed the Second Amended Complaint in its entirety without prejudice.

Motion to Sever

The County also moved to sever the plaintiffs’ claims under Federal Rule of Civil Procedure 21. The court said it could not yet determine whether severance was appropriate because the complaint was too deficient to allow meaningful evaluation of the relevant factors. The court therefore denied the County’s motion to sever without prejudice to renew.

Result and Next Step

The court granted the plaintiffs leave to file a Third Amended Complaint by July 3, 2025. The new complaint was required to replace, rather than supplement, the existing complaint and had to include any claims the plaintiffs wished to pursue. The County’s response was due August 4, 2025, if the plaintiffs filed an amended complaint. If they did not file one by the deadline, the claims dismissed without prejudice would be deemed dismissed with prejudice. The Clerk was directed to terminate the motions at ECF No. 51.