# HFH, LTD. v. Superior Court > California Supreme Court · November 12, 1975 · 15 Cal. 3d 508 URL: https://www.frixlaw.com/law-library/cases/9542591 ## Case - **Full name:** HFH, LTD., Petitioner, v. THE SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent; CITY OF CERRITOS Et Al., Real Parties in Interest; VON’S GROCERY COMPANY, Petitioner, v. THE SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent; CITY OF CERRITOS Et Al., Real Parties in Interest - **Court:** California Supreme Court - **Decided:** November 12, 1975 - **Citations:** 15 Cal. 3d 508; 125 Cal. Rptr. 365; 542 P.2d 237; 6 Envtl. L. Rep. (Envtl. Law Inst.) 20062; 1975 Cal. LEXIS 248 - **Precedential status:** Published - **Opinion:** Dissent by Clark - **Judges:** Tobriner, Clark - **Cited by:** 132 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9542591 ## How later opinions describe it (automated extraction) - recognizing mandate action to invalidate zoning ordinance; mandate action permits a party suffering from improper governmental action to correct administrative abuse - noting that the remedy for improper legislative acts is undoing the wrongful act and not in money damages ## Opinion text CLARK, J. I dissent. Article I, section 19 of the California Constitution provides: “Private property may be taken or damaged for public use only when just compensation . . . has first been paid to . . . the owner.” (Italics added.) While this court has usually applied the “or damaged” language in the context of physical damage to property (Albers v. County of Los Angeles (1965) 62 Cal.2d 250 [ 42 Cal.Rptr. 89 , 398 P.2d 129 ]; Bacich v. Board of Control (1943) 23 Cal.2d 343 [ 144 P.2d 818 ]), we have never limited compensation to physical damage. In fact, in Reardon v. San Francisco (1885) 66 Cal. 492 [ 6 P. 317 ], this court rejected such an interpretation, noting that the word damaged “refers to something more than a direct or immediate damage to private property, such as its invasion or spoliation. There is no reason why this word, should be construed in any other than its ordinary and popular sense. It embraces more than the taking.” (Id. at p. 501.) “ ‘The tendency under our system is too often to sacrifice the individual to the community;, and it seems very difficult in reason to *524 show why the [government] should not pay for property which it destroys or impairs the value, as well as for what it physically takes.’ ” (Bacich v. Board of Control, supra, 23 Cal.2d 343, 351 .) The 80 percent decrease in fair market value of the subject property clearly constitutes damage to plaintiffs. The issue then is whether plaintiffs’ damage is compensable under the California Constitution. California has long recognized that while “the police power is very broad in concept, it is not without restriction in relation to the taking or damaging of property. When it passes beyond proper bounds in its invasion of property rights, it in effect comes within the purview of the law of eminent domain and its exercise requires compensation. [Citations.]” (House v. L.A. County Flood Control Dist. (1944) 25 Cal.2d 384, 388 [ 153 P.2d 950 ]; see Berman v. Parker (1954) 348 U.S. 26 [ 99 L.Ed. 27 , 75 S.Ct. 98 ].) The point at which an injury .becomes compensable is determined by balancing two fundamental—yet inconsistent—policy considerations. (Bacich v. Board of Control, supra, 23 Cal.2d.343.) “[O]n the one hand the policy underlying the eminent domain provision in the Constitution is to distribute throughout the community the loss inflicted upon the individual by the making of public improvements .... On the other hand, fears have been expressed that compensation allowed too liberally will seriously impede, if not stop, beneficial public improvements because of the greatly increased cost.” (Id. at p. 350.) This balancing of policies in determining the point at which compensation is constitutionally mandated also has long been recognized by the United States Supreme Court. In Pennsylvania Coal Co. v. Mahon (1922) 260 U.S. 393 [ 67 L.Ed. 322 , 43 S.Ct. 158 , 28 A.L.R. 1321 ], the court noted that “Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law. As long recognized, some values are enjoyed under an implied limitation and must yield to the police power. But obviously the implied limitation must have its limits. . . . One fact for consideration in determining such limits is the extent of the diminution. When it reaches a certain magnitude, in most if not in all cases there must be an exercise of eminent domain and compensation to sustain the act.” (Id. at p. 413 [ 67 L.Ed. at p. 325 ].) As this court has recently recognized in viewing these conflicting policies, the ultimate test whether compensation is constitutionally *525 required, resolves itself'into one of fairness. (County of San Diego v. Miller (1975) 13 Cal.3d 684, 689 [ 119 Cal.Rptr. 491 , 532 P.2d 139 ]; Southern Cal. Edison Company v. Bourgerie (1973) 9 Cal.3d 169, 173-175 [ 107 Cal.Rptr. 76 , 507 P.2d 964 ].) 1 We should address any problem of loss suffered by governmental action as one demanding application of a rule of fairness. (Cf. Muskopf v. Corning Hospital Dist. (1961) 55 Cal.2d 211 [ 11 Cal.Rptr. 89 , 359 P.2d 457 ].) Although earlier cases have failed to apply the rule of fairness to losses occasioned by downzoning, there is no justification for treating such losses differently from those due to other governmental action. As Justice Traynor in his concurring opinion in House v. L.A. County Flood Control Dist., supra, 25 Cal.2d 384, 396-397 , correctly pointed out, in determining fairness “[i]t is irrelevant whether or not the injury to the property is accompanied by a corresponding benefit to the public purpose to which the improvement is dedicated, since the measure of liability is not the benefit derived from the property, but the loss to the owner [citations].” In conjunction with the statement of Justice Traynor, the cautionary note of the United States Supreme Court in Pennsylvania Coal Co. v. Mahon, supra, 260 U.S. 393, 416 [ 67 L.Ed. 322, 326 ], should not be overlooked. “We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.” The great harm which might result from downzoning was recognized in Metro Realty v. County of El Dorado (1963) 222 Cal.App.2d 508, 516 [ 35 Cal.Rptr. 480 ], involving an ordinance of short duration. The court stated that although the temporary restriction was a mere inconvenience, “the same restriction indefinitely prolonged might possibly metamorphize into oppression.” Compensation in appropriate downzoning cases also meets the policy reflected by the eminent domain provision. As recently reaffirmed by this court in Holtz v. Superior Court (1970) 3 Cal.3d 296, 303 [ 90 Cal.Rptr. 345 , 475 P.2d 441 ], quoting from Clement v. State Reclamation Board *526 (1950) 35 Cal.2d 628 [ 220 P.2d 897 ], “[T]he underlying purpose of our constitutional provision in inverse—as well as ordinary—condemnation is ‘to distribute throughout the community the loss inflicted upon the individual by the making of public improvements’ (Bacich v. Board of Control (1943) 23 Cal.2d 343, 350 [ 144 P.2d 818 ]); ‘to socialize the burden . . .—to afford relief to the landowner in cases in which it is unfair to ask him to bear a burden that should be assumed by society’ [citation].” Zoning is enacted for the public benefit. The need for “resolute sophistication in the face of occasional insistence that compensation payments must be limited lest society find itself unable to afford beneficial plans and improvements,” was aptly stated by Professor Michelman in his well-noted law review article: 2 “What society cannot, indeed, afford is to impoverish itself. It cannot afford to instigate measures whose costs, including costs which remain ‘unsocialized,’ exceed their benefits. Thus, it would appear that any measure which society cannot afford or, putting it another way, is unwilling to finance under conditions of full compensation, society cannot afford at all.” Not all governmental downzoning must be compensated. However, the compensatory “or damaged” provision of the California Constitution should apply when by public action land has (1) suffered substantial decrease in value, (2) the decrease is of long or potentially infinite duration and (3) the owner would incur more than his fair share of the financial burden. Applying this fairness test to the instant factual situation, plaintiffs have stated a valid cause of action in inverse condemnation. The 80 percent decrease in value of plaintiffs’ property—from a market value of $400,000 to $75,000—is obviously substantial. Because the action is taken pursuant to Government Code section 65300, this decrease clearly is of long duration. 3 Of the four quadrants of the subject intersection, three are zoned for commercial use and only plaintiffs’ quadrant has been rezoned to “low-density single family residential.” Plaintiffs therefore are being forced to shoulder a burden that surrounding landowners have not been made to share. 4 *527 Applying the tripartite test, of fairness to downzoning should not impose an undue burden on governmental agencies. Once the landowner establishes his cause of action for damage, the condemning agency has several alternatives including; (1) compensating the landowner for the decrease in value; (2) paying total value for the land and acquiring title; (3) rescinding the downzoning, in which case the agency would be abandoning a condemnation, becoming liable to the landowner for interim damage, costs and attorney’s fees. (Cf. Code Civ. Proc., § 1255a; City of Los Angeles v. Ricards (1973) 10 Cal.3d 385 [ 110 Cal.Rptr. 489 , 515 P.2d 585 ].) The first two alternatives assume the validity of the zoning ordinance and therefore are inapplicable when the ordinance itself is invalid. 5 In the case of an invalid ordinance, the court in issuing mandate should follow the third alternative, awarding interim damage, costs and attorney’s fees. 6 Plaintiffs have stated a cause of action in inverse condemnation. Therefore, it was error for the trial court to sustain' the demurrer without leave to amend. Accordingly I would grant the writ directing the trial court to overrule the demurrer. The application of petitioner Von’s Grocery Co. for a rehearing was denied December 24, 1975, and the opinion was modified to read as printed above. Clark, J., was of the opinion that the application should be granted. "The constitutional requirement of just compensation derives as much content from the basic equitable principles of fairness ... as it does from technical concepts of property law.” (United States v. Fuller (1973) 409 U.S. 488, 490 [ 35 L.Ed.2d 16, 20 . 93 S.Ct. 801 ], also quoted in Southern Cal. Edison Co. v. Bourgerie, supra, 9 Cal.3d at p. 175 ; see Mid-wav Cabinet etc. Mfg. v. County of San Joaquin (1967) 257 Cal.App.2d 181, 192 [ 65 Cal.Rptr. 37 ].) Michelman, Property, Utility and Fairness: Comments on the Ethical Foundations of “Just Compensation” Law (1967) 80 Harv.L.Rev. 1165, 1181. Section 65300 of the Government Code states: “Each planning agency shall prepare and the legislative body of each county and city shall adopt a comprehensive, long-term general plan for the physical development of the county or city, and of any land outside its boundaries which in the planning agency’s judgment bears relation-to its planning.” (Italics added.) The facts of this case do not present a situation where the property was upzoned and then subsequently downzoned while in the hands of the same owner. Whether the present zoning classification of the property is valid has not yet been decided by the trial court or by this court, as that issue is not before us. However, previous California cases have held that land use regulation creating an island of residential use surrounded by less restrictively zoned property constituted an invalid exercise of the legislative power. (Hamer v. Town of Ross (1963) 59 Cal.2d 776 [ 31 Cal.Rptr. 335 , 382 P.2d 375 ]; Reynolds v. Barrett (1938) 12 Cal.2d 244 [ 83 P.2d 29 ].) Government Code section 818.2 providing that a public entity is not liable for injury caused by the enactment of a law is inapplicable when the governmental action rises to the level of a taking or damaging within the eminent domain provisions of the Constitution. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9542591. Public record. Not legal advice.