The Palo Alto City Council held a two-day hearing in April 2015 on appeals residents made that the appraised values of the properties was too low. The council then approved the closure on May 26, 2015, with the condition to pay the $8 million.

The suit alleges the city's large financial requirement went beyond "reasonable costs of relocation" as outlined in state law and violates the family's rights under the Fifth Amendment, which states that private property shall not be taken for public use without just compensation, as well as similar rights under the 14th Amendment. The family had applied to close the park in November 2012 .

Last year, the Palo Alto City Council approved the family's application to close the mobile-home park, where most of the residents are Hispanic or low-income families. The $8 million would giving tenants money not just for moving costs, but also for rent subsidies for alternative housing in the area, according to the lawsuit.

Owners Toufic and Eva Jisser and their trust filed the lawsuit in the U.S. District Court in San Jose in November 2015 claiming that the $8 million they must pay to compensate the mobile-home owners and for relocation costs far exceeds state law, and it prevents the family from closing the park and replacing it with an undisclosed project. The Jissers have owned the mobile-home park for 30 years, which is home to about 400 low-income residents.

Attorneys for the City of Palo Alto and the Jisser family squared off in federal court on Thursday over whether the closure plan for the Buena Vista Mobile Home Park is unconstitutional.

The city properly required relocation assistance as a condition of approval under state law, Siegel said. Many of the mobile homes, which are either too old to be moved or are secured to foundations, are not truly mobile, and thus residents are in need of assistance in securing new housing, he said.

U.S. Supreme Court precedent also rejected a similar claim that California's Mobilehome Residency law and local regulations are per se "taking" of private property that does not depend on the extent of the alleged take, the city told Judge Edward J. Davila.

But attorneys for Palo Alto said that the Jissers could have challenged the city ordinance in 2001 and many times thereafter. Any challenge to the ordinance, which set the conditions for the park's closure, should instead be heard in Santa Clara County Superior Court before being addressed by the federal court. But the Jissers failed to seek relief in the lower court within 90 days after the city approved the closure plan, said Kevin D. Siegel, an attorney representing the city. That failure means that the plaintiffs cannot now seek legal remedy because the statute of limitations has expired, he said.

Although the city agreed to set aside $14.5 million to help try to buy the mobile-home park, lawyers for the residents said they had an ethical obligation to protect their clients' legal rights. If the sale to Caritas didn't happen and the park is closed, filing the lawsuit by the statute of limitations deadline gave the residents the best chance of preserving their right to adequate relocation assistance, their attorneys said at the time. The Jissers then filed their lawsuit on Nov. 19, 2015.

Buena Vista residents filed a lawsuit against the city in Superior Court on Aug. 24, 2015, challenging the city's application approval. Shortly thereafter, the Jissers withdrew from negotiations with nonprofit organization the Caritas Corporation to purchase the property , which made an initial offering that included $29 in subsidies from Palo Alto and Santa Clara County .

The Jisser family had multiple opportunities to complain about the city ordinance surrounding mobile-home parks and "vigorously" defended their case to the City Council last year, said Winter Dellenbach, founder of Friends of Buena Vista.

U.S. District Judge Edward Davila took the arguments under submission and didn't indicate when he would issue his decision on the city's motion to dismiss the lawsuit.

California's Mobilehome Residency Law allows a city council to require a property owner to "mitigate any adverse impact of the (park closure) on the ability of the displaced mobile-home park residents to find adequate housing in a mobile-home park" and that the conditions "shall not exceed the reasonable costs of relocation," he noted.

The Jissers' attorney, Lawrence Salzman, said the ordinance's permit conditions amounted to extortion. The city transformed state law into an unconstitutional command forcing the Jissers to pay a massive monetary demand to satisfy the city's desire to mitigate its own lack of affordable housing, he said.

Palo Alto seeks to toss mobile-home park lawsuit

Jisser family asks federal court for an injunction from conditions placed by City of Palo Alto