The City of Cotati (defendant) had a rent-control ordinance. 152 Valparaiso Associates and other residential landlords (plaintiffs) made capital improvements to their properties and requested rent increases to enable them to recover a fair return on their investments. The Cotati Rent Appeals Board denied the requests. The landlords sued the city, alleging that the rent-control scheme constituted a taking of their property without just compensation, in violation of the Fifth and Fourteenth Amendments. The trial court dismissed the complaint. The landlords appealed.