# Landgate, Inc. v. California Coastal Commission

> California Supreme Court · April 30, 1998 · 17 Cal. 4th 1006

URL: https://www.frixlaw.com/law-library/cases/9609929

## Case

- **Full name:** LANDGATE, INC., Et Al., Plaintiffs and Appellants, v. CALIFORNIA COASTAL COMMISSION, Defendant and Appellant
- **Court:** California Supreme Court
- **Decided:** April 30, 1998
- **Citations:** 17 Cal. 4th 1006; 73 Cal. Rptr. 2d 841; 98 Daily Journal DAR 4453; 953 P.2d 1188; 28 Envtl. L. Rep. (Envtl. Law Inst.) 21236; 98 Cal. Daily Op. Serv. 3200; 1998 Cal. LEXIS 2461
- **Precedential status:** Published
- **Opinion:** Dissent by Brown
- **Judges:** Mosk, Chin, Brown
- **Cited by:** 54 later opinions in the Frix Law Library

## Citator (automated)

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- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9609929

## Opinion text

BROWN, J., Dissenting.
The more things change, the more they remain the same. That is certainly true with respect to this court’s takings jurisprudence. Almost 20 years ago, Justice Brennan, dissenting in San Diego Gas & Electric Co. v. San Diego (1981) 450 U.S. 621, 636 [ 101 S.Ct. 1287, 1296 , 67 L.Ed.2d 551 ], charged this court with sacrificing the right to just compensation guaranteed by the Fifth Amendment on an altar “of policy judgments made by the . . . judicial branch[].” (Id. at p. 661 [ 101 S.Ct. at p. 1309 ], fn. omitted.) Although the deference commanded by the high court’s precedents is not always “absolute,” when it has made an attempt to resolve definitively a difficult point of constitutional law that is applicable to the very issue before us, we ought either to respect its judgment or provide a reasoned basis for refusing to do so. To do otherwise, in Charles Fried’s words, is “judicial impudence.” (Fried, Impudence (1992) Sup. Ct. Rev. 155, 157, 192-193.)
I dissent.
Viewing pure democracy as incompatible with personal security or the rights of property (Madison, The Federalist No. 10 (Rossiter ed. 1961) p. 81), 1 the drafters of our Constitution went to extraordinary lengths “to control the governed” and to “oblige [the government] to control itself.” (Madison, The Federalist No. 51, supra, at p. 322.) By adopting the Constitution, the people of the United States “manifested a determination to shield themselves and their property from the effects of those sudden and strong passions to which men are exposed.” (Fletcher v. Peck (1810) 10 U.S. (6 Cranch) 87, 138 [ 3 L.Ed. 162, 178 ].)
The prohibition of the takings clause is one expression of the constitutional commitment to limiting government and maximizing individual liberty. The protection of private property guaranteed by the Fifth Amendment presupposes the property is sought for legitimate purposes, out of a desire to improve the public condition. It nevertheless prohibits appropriation of property—even for such beneficial purposes—without just compensation. The difficulty inherent in trying to reconcile popular self-government with private ownership of property has propelled the Supreme Court’s takings *1036 doctrine along an erratic course, from protection of property rights as a matter of fixed principle to ad hoc balancing tests and back to categorical rules. The result has been justifiably criticized as muddled.
“[RJecent cases,” according to one scholar, “have done little to clarify the [Takings] Clause, and the doctrine remains in perplexing disarray.” (McUsic, Looking Inside Out: Institutional Analysis and the Problem of Takings (1998) 92 Nw. U. L.Rev. 591, 592, fn. 2 [citing treatises and law review articles over the past 15 years]; Schroeder, Never Jam To-day: On the Impossibility of Takings Jurisprudence (1996) 84 Geo. L.J. 1531 .) Despite the general impossibility of its takings jurisprudence, in Lucas v. South Carolina Coastal Council (1992) 505 U.S. 1003 [ 112 S.Ct. 2886 , 120 L.Ed.2d 798 ] (Lucas), the United States Supreme Court made a heroic effort to bring a measure of clarity to an analytical framework that has grown doctrinally more difficult as it has become politically more fundamental. After embracing an intractably complex, ad hoc “balancing test” in Penn Central Transp. Co. v. New York City (1978) 438 U.S. 104, 124 [ 98 S.Ct. 2646, 2659 , 57 L.Ed.2d 631 ] (Penn Central), the court in Lucas enunciated the clear rule which should govern our decision in this case: “In 70-odd years of succeeding ‘regulatory takings’ jurisprudence [i.e., following Penna. Coal Co. v. Mahon (1922) 260 U.S. 393 [ 43 S.Ct. 158 , 67 L.Ed. 322 , 28 A.L.R. 1321 ]], we have generally eschewed any ‘ “set formula” ’ for determining how far is too far, preferring to ‘engagfe] in . . .ad hoc, factual inquiries.’ [Citations.] We have, however, described at least two discrete categories of regulatory action as compensable without case-specific inquiry into the public interest advanced in support of the restraint. The first encompasses regulations that compel the property owner to suffer a physical ‘invasion’ of his property. . . . HQ The second situation in which we have found categorical treatment appropriate is where regulation denies all economically beneficial or productive use of land. [Citations.]” (Lucas, supra, 505 U.S. at p. 1015 [ 112 S.Ct. at p. 2893 ], italics added.)
If Lucas means what it says, it establishes a categorical rule. No amount of judicial legerdemain can transform its objective, bright-line standard into a license for courts to engage in prohibited forms of “case-specific inquiry into the public interests advanced in support of’ (Lucas, supra, 505 U.S. at p. 1015 [ 112 S.Ct. at p. 2893 ]) a given restraint.
After paying grudging lip service to Lucas's categorical rule, the majority falls back on Penn Central’s squishy “multi-factor” test, a standard so amorphous it is capable of producing virtually any result. This is the very test Lucas overruled pro tanto in cases, like this one, where the restraint at issue denies all economic use. The tortuous logic by which today’s majority *1037 decides an order of the coastal commission—one that finally and unqualifiedly denied the landowners here all use of their property for over two years—was a mere “temporary delay” is worth examining in detail.
First, the majority resuscitates the Penn Central test in this case by ignoring another equally clear precedent. In First Lutheran Church v. Los Angeles County (1987) 482 U.S. 304 [ 107 S.Ct. 2378 , 96 L.Ed.2d 250 ] (First Lutheran), the United States Supreme Court concluded that temporary takings are compensable, repudiating this court’s contrary holding in Agins v. City of Tiburon (1979) 24 Cal.3d 266 [ 157 Cal.Rptr. 372 , 598 P.2d 25 ]. The majority dismisses the holding in First Lutheran as “narrow[]”; confined to its facts; requiring the existence of a final administrative decision before the presence of a constitutional violation can be determined; a case which did not hold that the “mere” assertion of regulatory jurisdiction constituted a taking; and so on. (Maj. opn., ante, atpp. 1017-1018.) But even if we accept all of the majority’s quibbles, both Lucas and First Lutheran indisputably apply here.
Mystifyingly, the majority then instructs us that “[virtually every court that has examined the issue has concluded . . . that a regulatory mistake resulting in delay does not, by itself, amount to a taking of property.” (Maj. opn., ante, at p. 1018.) True enough. But none of the 10 cases cited in support of this patently obvious conclusion refutes the plaintiff property owners’ claim for just compensation in this case.
Two of these “noncompensable delay” cases preceded Lucas-, in the remainder, the court found either that the agency had not reached a final decision or that the regulation did not deny the owner all beneficial use. (See Littoral Development Co. v. San Francisco Bay Conservation etc. Com. (1995) 33 Cal.App.4th 211, 221-222 [ 39 Cal.Rptr.2d 266 ] [no final decision]; Del Oro Hills v. City of Oceanside (1995) 31 Cal.App.4th 1060, 1065 [ 37 Cal.Rptr.2d 677 ] [no final decision]; Jacobi v. City of Miami Beach (Fla.Dist.Ct.App. 1996) 678 So.2d 1365, 1366 [no denial of all economic use]; Cannone v. Noey (Alaska 1994) 867 P.2d 797, 801 [same]; Dumont v. Town of Wolfeboro (1993) 137 N.H. 1 [ 622 A.2d 1238, 1244 ] [same]; Tabb Lakes, Ltd. v. U.S. (Fed. Cir. 1993) 10 F.3d 796, 798 [no final decision]; Steinbergh v. City of Cambridge (1992) 413 Mass. 736 [ 604 N.E.2d 1269, 1274 ] [no denial of all economic use]; Smith v. Town of Wolfeboro (1992) 136 N.H. 337 [ 615 A.2d 1252, 1257-1258 ] [same]; 1902 Atlantic Ltd. v. U. S. (1992) 26 Cl.Ct. 573 [pre-Lucas decision applying Penn Central analysis]; Lujan Home Builders v. Orangetown (1991) 150 Misc.2d 547 [ 568 N.Y.S.2d 850, 851 ] [due process rather than takings analysis].)
Lucas itself teaches that its categorical rules do not apply unless the restraint at issue deprives the property owner of all economic use. (Lucas, *1038 supra, 505 U.S. at pp. 1015-1019 [112 S.Ct. at pp. 2893-2895].) Other takings cases make clear the high court’s “insistence on knowing the nature and extent of permitted development before adjudicating the constitutionality of the regulations that purport to limit it.” (MacDonald, Sommer & Frates v. Yolo County (1986) 477 U.S. 340, 351 [ 106 S.Ct. 2561, 2567 , 91 L.Ed.2d 285 ] (MacDonaldI); see also Williamson Planning Comm’n v. Hamilton Bank (1985) 473 U.S. 172, 186 [ 105 S.Ct. 3108, 3116 , 87 L.Ed.2d 126 ] (Wil liamson County) [“Because respondent has not yet obtained a final decision regarding the application of. the zoning ordinance and subdivision regulations to its property, nor utilized the procedures Tennessee provides for obtaining just compensation, respondent’s claim is not ripe.”].) As the court has stated, however, the role served by the ripeness requirement in the takings context is “prudential”: to make clear “the economic impact of the challenged action and the extent to which it interferes with reasonable investment-backed expectations. [Citations.] Those factors simply cannot be evaluated until the administrative agency has arrived at a final, definitive position regarding how it will apply the regulations at issue to the particular land in question.” (Williamson County, supra, 473 U.S. at p. 191 [ 105 S.Ct. at p. 3118 ]; see Hodel v. Virginia Surface Mining & Reel. Assn., Inc. (1981) 452 U.S. 264 [ 101 S.Ct. 2352 , 69 L.Ed.2d 1 ] (Hodel).)
Only recently, the court underlined the limited contours of “ripeness” in the takings context. In Suitum v. Tahoe Regional Planning Agency (1997) 520 U.S. 725 [ 117 S.Ct. 1659 , 137 L.Ed.2d 980 ], it said that cases such as Williamson County, MacDonald, and Hodel “addressed the virtual impossibility of determining what development will be permitted on a particular lot of land when its use is subject to the decision of a regulatory body invested with great discretion, which it has not yet even been asked to exercise. No such question is presented here.” (Id. at p._[ 117 S.Ct. at p. 1667 ], italics added; see also Lucas, supra, 505 U.S. at pp. 1011-1012 [112 S.Ct. at pp. 2890-2891].) It is that administrative flexibility that lies behind and justifies the prudential ripeness rule in the takings context. Those concerns simply have no bearing in this case, however, where the commission made clear the extent to which it would permit plaintiffs to develop their lot: not at all. The cases relied on by the majority are thus wide of the only issue presented: Did the commission’s definitive refusal to permit plaintiffs to make any use of their property—a refusal that continued until, after two years of litigation, plaintiffs obtained judicial relief—“den[y] all economically beneficial or productive use of [their] land.” (Lucas, supra, 505 U.S. at p. 1015 [ 112 S.Ct. at p. 2893 ].)
This is not a case in which the property owners contend, as the majority would have it, that “a regulatory mistake resulting in delay . . . , by itself, *1039 amount[s] to a taking of property.” (Cf. maj. opn., ante, at p. 1018.) That is not, and never has been, the law of takings. Rather, plaintiffs’ argument— and the essential meaning of both Lucas and First Lutheran—is that a final decision by a regulatory agency that denies all economically beneficial use of the property, even temporarily, is a per se compensable Fifth Amendment taking. 2 If that is so, then plaintiffs’ property has been “taken,” however temporarily, by the commission’s order, and the payment of “just” compensation is constitutionally compelled. As both the trial court and the Court of Appeal concluded, that is what happened here.
The majority dodges the otherwise inevitable result by changing the question; “The present case poses the issue of whether a legally erroneous decision of a government agency during the development approval process resulting in delay constitutes a temporary taking of property.” (Maj. opn., ante, at p. 1018.) “Legally erroneous”? “Process”? “Delay”? Of course mere “delay” in a “process” resulting from an “erroneous decision” does not qualify as a constitutional violation. If it did, every “mistake” by government land use authorities leading to any delay in the owner’s use of her property would require compensation. A massive raid on the public fisc would ensue. Suppose, however, the question were differently, more evenhandedly, framed as one that “poses the issue of whether a regulatory decision barring any use of property until the agency’s decision is overturned by a court constitutes a temporary taking of property?” What result then? That, rather than the majority’s tendentious formulation, is the issue presented by this case.
In any event, the majority’s trick question has already been asked and answered. As Justice Chin points out in his dissent (see dis. opn. of Chin, J., ante, at pp. 1033-1034), the identical position espoused by the majority— that litigation over the validity of a land use restriction is simply a “normal delay” in the permit approval process and thus cannot give rise to a temporary taking—was advanced by Justice Stevens in his dissenting opinion in First Lutheran. (See 482 U.S. at pp. 334-335 [107 S.Ct. at pp. 2396-2397].) The precise issue has thus already been considered and rejected by the high court. (See dis. opn. of Chin, J., ante, at p. 1034.)
*1040 If Lucas lays down a categorical rule, and if, as First Lutheran concludes, a final order that temporarily deprives a property owner of all economically beneficial use is a compensable taking, these propositions ought to readily yield a clear answer, one that does not depend on the majority’s elaborate, even arduous, preliminary discussion. (Cf. Florida Rock Industries, Inc. v. U.S. (Fed. Cir. 1994) 18 F.3d 1560, 1564-1565 [Lucas “teaches that the economic impact factor alone may be determinative; in some circumstances, no balancing of factors is required. If a regulation categorically prohibits all economically beneficial use of land—destroying its economic value for private ownership—the regulation has an effect equivalent to a permanent physical occupation. There is, without more, a compensable taking.” (Fns. omitted, second italics added.)].)
What the Supreme Court’s categorical rule in Lucas means for property owners, and what the majority refuses to acknowledge, is that after Lucas , Justice Holmes’s famous apothegm in the Rock Island Railroad case, that “Men must turn square comers when they deal with the Government” (Rock Island & c. R. R. v. United States (1920) 254 U.S. 141, 143 [ 41 S.Ct. 55, 56 , 65 L.Ed. 188 ]) is now reciprocal. Following Lucas , in a limited class of cases, regulators whose final action denies an owner all beneficial economic use of land are on notice that, if their decisions prove wrong when tested in court, the government may face a damages judgment for a temporary taking even if the restraint is later rescinded. In this context at least, it is government that must turn square comers when it attempts to overregulate the use of private property or is in danger of “forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” (Armstrong v. United States (1960) 364 U.S. 40, 49 [ 80 S.Ct. 1563, 1569 , 4 L.Ed.2d 1554 ]; Lucas, supra, 505 U.S. at p. 1018 [112 S.Ct. at pp. 2894-2895].)
To further confuse the discussion, the majority plunges into a lengthy disquisition on the connection between the land use regulation at issue here and the legitimate governmental purposes it arguably advances. This, of course, is the formulation developed in Dolan v. City of Tigard (1994) 512 U.S. 374 [ 114 S.Ct. 2309 , 129 L.Ed.2d 304 ], and Nollan v. California Coastal Comm’n (1987) 483 U.S. 825 [ 107 S.Ct. 3141 , 97 L.Ed.2d 677 ], a “nexus” test that is precluded by the categorical rule in Lucas . Indeed, the very nature of Lucas's categorical mle appears to bar a court from conducting a case-specific inquiry into those interests that might justify the restraint imposed on the plaintiffs’ use of their property by the commission’s order. (Lucas, supra, 505 U.S. at p. 1015 [ 112 S.Ct. at p. 2893 ] [“We have . . . described . . . two discrete categories of regulatory action as compensable without case-specific inquiry into the public interest advanced in support of the restraint.”].)
*1041 Although Justice Holmes’s caution that when regulation “goes too far it will be recognized as a taking” is foundational to much takings jurisprudence (Penna. Coal Co. v. Mahon (1922) 260 U.S. 393, 415 [ 43 S.Ct. 158, 160 , 67 L.Ed.2d 322 , 28 A.L.R. 1321 ]), the high court “ha[s] never set forth the justification for this rule.” (Lucas, supra, 505 U.S. at p. 1017 [ 112 S.Ct. at p. 2894 ].) As Justice Scalia explains: “Perhaps it is simply . . . that total deprivation of beneficial use is, from the landowner’s point of view, the equivalent of a physical appropriation. [Citation.] . . . Surely, at least, in the extraordinary circumstance when no productive or economically beneficial use of land is permitted, it is less realistic to indulge our usual assumption that the legislature is simply ‘adjusting the benefits and burdens of economic life’ [citation] in a manner that secures an ‘average reciprocity of advantage’ to everyone concerned [citation]. And the functional basis for permitting the government ... to affect property values without compensation . . . does not apply to the relatively rare situations where the government has deprived a landowner of all economically beneficial uses.” (505 U.S. at pp. 1017-1018 [ 112 S.Ct. at p. 2894 ], italics in original.)
“On the other side of the balance,” the Lucas majority continued, “affirmatively supporting a compensation requirement, is the fact that regulations that leave the owner of land without economically beneficial or productive options for its use—typically, as here, by requiring land to be left substantially in its natural state—carry with them a heightened risk that private property is being pressed into some form of public service under the guise of mitigating serious public harm. [Citations.] As Justice Brennan explained: ‘From the government’s point of view, the benefits flowing to the public from preservation of open space through regulations may be equally great as from creating a wildlife refuge through formal condemnation or increasing electricity production through a dam project that floods private property.’ ” ( 505 U.S. at p. 1018 [112 S.Ct. at pp. 2894-2895].) In short, Justice Scalia concluded, “there are good reasons for our frequently expressed belief that when the owner of real property has been called upon to sacrifice all economically beneficial use in the name of the common good, that is, to leave his property economically idle, he has suffered a taking.” ( 505 U.S. at p. 1019 [ 112 S.Ct. at p. 2895 ], fn. omitted, italics in original.)
It is evident the majority is unwilling to come to terms with the true meaning and operative effect of Lucas and First Lutheran. At every turn, its opinion reflects the abiding conviction that takings jurisprudence has not advanced a single step beyond the “regulatory friendly” analysis of Penn Central. At every opportunity, the majority reverts to Penn Central's ad hoc factual inquiry. Limning all this reasoning is the vocabulary of “balance.” Instead of confronting the meaning of Lucas as it applies in this case, the *1042 majority chatters endlessly of “delay . . . owing to the mistaken assertion of jurisdiction” (maj. opn., ante, at p. 1010), “ ‘normal delay’ ” (ibid.), “normal delay rather than a temporary taking” (ibid.), “legally erroneous decision . . . during the development. . . process resulting in delay” (id. at p. 1018), “reasonable regulatory process designed to advance legitimate government interests” (id. at p. 1021), “[mjere fluctuations in value during the process of government decisionmaking” (ibid.), “mistaken assertion of jurisdiction” (ibid.), “normal development delay” (id. atp. 1026), “conditional denial” (id. at p. 1028), “condition . . . erroneously imposed” (ibid.), “plausible, though perhaps legally erroneous” (ibid.), “postponement of development” (id. at p. 1029), “bona fide dispute” (id. at p. 1031), “delay [as] an incident of property ownership” (ibid.), and plaintiffs’ “unfortunate position of suffering from a delay.” (Ibid.) Thus is reality ruthlessly revised. (Cf. Nollan v. California Coastal Comm’n, supra, 483 U.S. at p. 831 [107 S.Ct. at p. 3145] [“To say that the appropriation of a public easement across a landowner’s premises does not constitute the taking of a property interest but rather . . . ‘a mere restriction on its use,’ . . . is to use words in a manner that deprives them of all their ordinary meaning.”].)
The majority’s discussion concludes with a proposition that is flatly incompatible with Lucas : “[W]e must determine not whether a sinister purpose lurked behind the [c]ommission’s decision, but rather whether the development restrictions imposed . . . substantially advanced some legitimate state purposes so as to justify the denial of the development permit.” (Maj. opn., ante, at p. 1022, italics added.) Had Lucas never been decided; had the commission not denied plaintiffs all use of their property; had Penn Central’s ad hoc test the slightest relevance to this case, the majority’s conclusion might have some bearing here. But none of these things is true.
The remainder of the majority opinion continues to joust with its own strawman. Yet, to repeat: The test is not “whether the development restrictions imposed on the subject property substantially advanced some legitimate state purposes.” (Maj. opn., ante, at p. 1022.) That formula, lifted from Penn Central, simply is no longer relevant under the circumstances here; indeed, the inquiry is barred by Lucas . And the majority’s conclusion—that though the commission may have been “mistaken given the peculiar facts of this case, its position was not so objectively unreasonable as to give rise to the inference that it was adopting that position solely for purposes of delay' or some other illegitimate reason” (maj. opn., ante, at p. 1025)—is obstinately beside the point.
The majority persistently misstates and mischaracterizes both the issue before us and governing takings law. In the end, however, the majority is *1043 finally forced to concede the meaning of First Lutheran: “[It\ . . . stands for the proposition that once a government action finally denies all economically viable use of property, the fact that the government later rescinds that action after a judicial proceeding does not relieve it of its duty to pay compensation.” (Maj. opn., ante, at p. 1030, italics added.)
Yes, exactly; and that is this case. As plaintiffs point out, were that not the law, the holding of Lucas would be emasculated. If any “threshold,” “jurisdictional” assertion by a government land use agency that has the effect of barring all economically beneficial use of property can be converted into “the recognition that a judicial determination of the validity of certain preconditions to development is a normal part of the development process” (maj. opn., ante, at p. 1030, italics in original), then, in California, at least for now, Lucas is a dead letter.
Conclusion
When the answer to every question about what the public needs or wants or should have is always “more,” the demand for free public goods is infinite. Against this relentless siphon, the takings clause, and the courts’ ardent defense of it, stands as a last lonely bulwark of property rights. It is, and will continue to be, a difficult rampart to maintain. That difficulty is built right into our constitutional structure. But, in one area at least we have arrived at a clear understanding: When the government denies all economically viable use of property, even temporarily, it may not achieve its ends “by a shorter cut than the constitutional way of paying for the change.” (Penna. Coal Co. v. Mahon, supra, 260 U.S. at p. 416 [ 43 S.Ct. at p. 160 ].) In these limited circumstances, government must turn square comers— except in California.
Baxter, J., concurred.
Had the Federalists lost the argument, our republic might more closely resemble P.J. O’Rourke’s wry description, “The whole idea of our government is this: If enough people get together and act in concert, they can take something and not pay for it.” (O’Rourke, Parliament of Whores (1991) p. 232.)
As Lucas itself and following cases have pointed out, there is one recognized exception even to the court’s categorical takings rule. If the government can demonstrate that controlling principles of “background law”—typically embodied in a state’s nuisance law—do not permit the use at issue, compensation is not required. (See 505 U.S. at p. 1029 [ 112 S.Ct. at p. 1200 ] [“A law or decree with such an effect [i.e., prohibiting all economically beneficial use] must ... do no more than duplicate the result that could have been achieved in the courts—by adjacent landowners . . . under the State’s law of private nuisance, or by the State under its complementary power to abate nuisances that affect the public generally. . . .” (Fn. omitted.)].)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9609929. Public record. Not legal advice.