The City of San Jose (defendant) enacted a rent control ordinance which permits a landlord to increase a tenant’s rent by eight percent. If a landlord wishes to raise the rent by more than eight percent, and the tenant objects, a hearing is required. During this hearing, a Mediation Hearing Officer is permitted to take into account several factors, including the hardship to a tenant. Richard Pennell (plaintiff), a San Jose landlord, objected to the terms of the ordinance allowing consideration of hardship to a tenant, resulting from a rent increase. He brought suit alleging that the ordinance violates the Fourteenth Amendment’s provisions against taking of private property for public use without just compensation. Pennell argued that the hearing officer’s ability to reduce the rent because of hardship to a tenant is a taking, and is impermissible because it does not serve the purpose of eliminating high rents. The Supreme Court of California ruled that the ordinance was constitutional. Pennell then petitioned for certiorari to the United States Supreme Court.