Amicus Curiae Brief — G-Max Management, Inc., et al., Petitioners v. New York, et al.

No. 23-1148

IN THE

Supreme Court of the United States

G-MAX MANAGEMENT, INC., ET AL.,

PETITIONERS,

V.

STATE OF NEW YORK, ET AL.,

RESPONDENTS.

On Petition for Writ of Certiorari

to the United States Court of Appeals

for the Second Circuit

_______

Amicus Curiae Brief Of The

Small Property Owners of San Francisco Institute

Supporting Petitioners

MICHAEL M. BERGER*

*COUNSEL OF RECORD

MANATT, PHELPS & PHILLIPS, LLP

2049 Century Park East, Suite 1700

Los Angeles, CA 90067

(310) 312-4185

mmberger@manatt.com

Counsel for Amicus Curiae

The Small Property Owners of San Francisco Institute

i

TABLE OF CONTENTS

INTEREST OF THE AMICUS CURIAE ............... 1

INTRODUCTION ................................................... 1

SUMMARY OF ARGUMENT ................................ 2

ARGUMENT ........................................................... 4

I.

“The Political Ethics Reflected in the

Fifth Amendment Reject Confiscation

as a Measure of Justice”............................... 4

A.

A Complete Takeover of

Property Would Unarguably be

a Taking ............................................. 4

B.

A Compelled Transfer of a

Recognizable Interest in

Property is a Taking .......................... 7

C.

A Taking Occurs When

Government Commands A

Property Owner To Stand Aside

And Permit Physical

Occupation Of Property By

Another .............................................. 9

1.

The General Rule is That

Physical Occupation is a

Taking. .................................... 9

2.

Yee v. City of Escondido

Is Not Compatible With

Settled Law. .......................... 11

ii

TABLE OF CONTENTS

(continued)

II.

Good Intentions Are Constitutionally

Irrelevant .................................................... 14

III.

There Is Conflict And Confusion On

How To Apply Penn Central — The

Case This Court Calls Its “Polestar” In

Regulatory Takings ................................... 22

CONCLUSION ...................................................... 24

iii

TABLE OF AUTHORITIES

CASES

Andy Warhol Foundation for the Visual

Arts, Inc. v. Goldsmith,

143 S.Ct. 1258 (2023)........................................ 13

Arverne Bay Constr. Co. v. Thatcher,

15 N.E.2d 587 (N.Y. 1938) .................................. 6

Babbitt v. Youpee,

519 U.S. 234 (1997)........................................... 13

Berman v. Parker,

348 U.S. 26 (1954)........................................... 2, 7

Cedar Point Nursery v. Hassid,

141 S.Ct. 2063 (2021)...................................13, 24

City of Monterey v. Del Monte Dunes,

526 U.S. 687 (1999) (Kennedy, J.).................... 20

City of Oakland v. Oakland Raiders,

174 Cal.App.3d 414 (1985) ................................. 8

Community Housing Improvement Program

v. City of New York,

59 F.4th 540 (2d Cir. 2023) ...............3, 12, 14, 17

Consolidated Rock Products Co. v. Du Bois,

312 U.S. 510 (1941)........................................... 13

Creppel v. United States,

41 F.3d. 627 (Fed. Cir. 1994) ............................ 20

iv

TABLE OF AUTHORITIES

(continued)

Dames & Moore v. Regan,

453 U.S. 654 (1981)........................................... 19

Dolan v. City of Tigard,

512 U.S. 374 (1994)........................................... 13

FCC v. Florida Power Corp.,

480 U.S. 245 (1987)........................................... 11

First English Evangelical Lutheran Church

v. County of Los Angeles,

482 U.S. 304 (1987)..................................5, 16, 19

Florida Rock Indus., Inc. v. U.S.,

791 F.2d 893 (Fed. Cir. 1986) ........................... 21

Florida Rock Indus, Inc. v. United States,

18 F.3d 1560 (Fed. Cir. 1994) ......................15, 20

Hawaii Housing Authority v. Midkiff,

467 U.S. 229 (1984)......................................... 2, 7

Hodel v. Irving,

481 U.S. 704 (1987)....................................6, 9, 10

Horne v. Department of Agriculture,

576 U.S. 350 (2015)......................................13, 24

Hughes v. Washington,

389 U.S. 290 (1967)........................................... 21

Hurley v. Kincaid,

285 U.S. 95 (1932)............................................. 19

In re Santiago-Monteverde,

24 N.Y.3d 283 (2014) .......................................... 3

v

TABLE OF AUTHORITIES

(continued)

Kaiser Aetna v. U.S.,

444 U.S. 164 (1979)...................... 9, 10, 11, 12, 18

Knick v. Township of Scott,

139 S. Ct. 2162 (2019)....................................... 14

Lingle v. Chevron USA, Inc.,

544 U.S. 528 (2005)......................................16, 23

Loretto v. Teleprompter Manhattan CATV

Corp.,

458 U.S. 419 ..................... 9, 10, 11, 12, 13, 17, 18

Nollan v. California Coastal Commn.,

483 U.S. 825 (1987).......... 9, 10, 11, 12, 18, 19, 22

Palazzolo v. Rhode Island,

533 U.S. 606 (2001)......................................23, 24

Penn Central Transp. Co. v. City of New

York,

438 U.S. 104 (1978)............................9, 22, 23, 24

Pennsylvania Coal Co. v. Mahon,

260 U.S. 393 ............................... 15, 16, 17, 19, 23

Preseault v. I.C.C.,

494 U.S. 1 (1990)............................................... 19

Pumpelly v. Green Bay Co.,

13 Wall. (80 U.S.) .............................................. 12

Regional Rail Reorganization Act Cases,

419 U.S. 102 (1974) .....................................19, 20

vi

TABLE OF AUTHORITIES

(continued)

Ruckelshaus v. Monsanto Co.,

467 U.S. 986 (1984)........................8, 9, 10, 13, 19

Shelton v. Tucker,

364 U.S. 479 (1960)........................................... 22

Skaw v. United States,

740 F.2d 932 (Fed. Cir. 1984) ........................... 21

Stanley v. Illinois,

405 U.S. 645 (1972)........................................... 22

Stewart v. Abend,

495 U.S. 207 (1990)........................................... 13

Tahoe-Sierra Preservation Council v. Tahoe

Reg. Plan. Agency,

535 U.S. 302 (2002)......................................23, 24

U.S. v. Cors,

337 U.S. 325 (1949)............................................. 4

U.S. v. Security Indus. Bank,

459 U.S. 70 (1982)......................................... 9, 13

United States v. Causby,

328 U.S. 256 (1946)........................................... 12

United States v. Clarke,

445 U.S. 253 (1980)........................................... 21

United States v. General Motors Corp.,

323 U.S. 373 (1945)........................................... 13

United States v. Peewee Coal Co.,

341 U.S. 114 (1951)........................................... 15

vii

TABLE OF AUTHORITIES

(continued)

Webb's Fabulous Pharmacies, Inc. v.

Beckwith,

449 U.S. 155 (1980)............................................. 8

Whitney Benefits, Inc. v. United States,

926 F.2d 1169 (Fed. Cir. 1990) ....................20, 21

Williamson County Reg. Plan. Commn. v.

Hamilton Bank,

473 U.S. 172 (1985)........................................... 14

Winger v. Aires,

89 A.2d 521 (Pa. 1952) ........................................ 8

Yee v. City of Escondido,

503 U.S. 519 (1992)..........................11, 12, 14, 24

Youngstown Sheet & Tube Co. v. Sawyer,

343 U.S. 579 (1952)........................................... 15

STATUTES

Internal Revenue Code § 501(c)(3) .......................... 1

OTHER AUTHORITIES

Fifth Amendment ............. 2, 5, 7, 8, 9, 12, 14, 16, 18,

…………….……………………………………19, 21, 24

Epstein, Richard A., The Unfinished

Business of Horne v. Department of

Agriculture, 10 NYU J.L. & Liberty 734,

758–61 (2016) .................................................... 13

viii

TABLE OF AUTHORITIES

(continued)

Michelman, Frank, Property, Utility, and

Fairness: Comments on the Ethical

Foundations of “Just Compensation”

Law, 80 Harv. L. Rev. 1165, 1181 (1967) .......... 4

Tribe, Laurence, American Constitutional

Law § 9-5 at 602 (2d ed 1988) .......................... 11

1

INTEREST OF THE AMICUS CURIAE 1

Amicus curiae The Small Property Owners of

San Francisco Institute (“SPOSFI”) is a California

nonprofit corporation (Internal Revenue Code

§ 501(c)(3)) and organization of small property

owners that advocates for home ownership and the

rights of property owners in San Francisco.

SPOSFI’s members range from young families to the

elderly on fixed incomes, and its membership cuts

across all racial, ethnic, and socio-economic strata.

SPOSFI is also involved in education, outreach

and research. Through education, it helps owners

better understand their rights and learn how to deal

with local government; through outreach to

community groups and to the public, it demonstrates

how restrictive regulations harm both tenants and

landlords, and through research projects, it aims to

separate hyperbole from fact on the effect of rent

control on housing stock. Through legal advocacy,

SPOSFI seeks to protect the rights of small property

owners against unfair and burdensome regulations.

SPOSFI has filed amicus curiae briefs in this

Court in other land use and rent control cases.

INTRODUCTION

Philosophical differences between landlords and

tenants are hardly new. Nor are they strangers to

this Court. However, the “solutions” now being

1 No counsel for any party has authored this brief in whole or

in part and no person other than the amicus has made any

monetary contribution to this brief’s preparation or

submission. The parties were timely notified.

2

devised by some government agencies (sometimes by

state legislatures, sometimes by city councils,

sometimes by voter initiative measures voted in by

the tenants themselves) to perceived problems in the

residential rental setting have gone beyond this

Court’s consistent teachings about property takings.

Compulsory, uncompensated transfers of interests

in property are becoming commonplace.

This case provides the Court with the

opportunity to reexamine, revise, and enforce the

standards for Fifth Amendment takings evaluation

in the residential rental context. SPOSFI prays that

the Court take the opportunity and rationalize this

confused area of constitutional law.

SUMMARY OF ARGUMENT

Although this Court has permitted property and

wealth redistribution schemes in the past, it has

never done so unless the party whose property was

being taken was compensated. Indeed, the presence

of compensation has been the key to upholding such

schemes. Hawaii Housing Authority v. Midkiff, 467

U.S. 229 (1984); Berman v. Parker, 348 U.S. 26

(1954). As this Court put it in Berman, when

explaining why it was permitting a forced transfer

of property from one citizen to another through the

government’s coercive eminent domain power:

“The rights of these property owners are

satisfied when they receive that just

compensation which the Fifth Amendment

exacts as the price of the taking.” 348 U.S.

at 36.

3

The State, the City, and their allies focus on what

they view as the needs and problems of lower income

tenants. Indeed, the Second Circuit’s opinion is

based on its own recent opinion in which it discussed

this rent regulation scheme as “part of a decadeslong legislative effort to address the myriad

problems resulting from a chronic shortage of

affordable housing in the City.” Community Housing

Improvement Program v. City of New York, 59 F.4th

540 (2d Cir. 2023). New York’s highest court

considers this scheme a “local public assistance

benefit” albeit provided by private property owners.

In re Santiago-Monteverde, 24 N.Y.3d 283, 290

(2014). Neither the members of SPOSFI nor, we

suspect, the New York landlords we are supporting,

are unsympathetic to the problems of their tenants.

The members represented by SPOSFI, for example,

are not large, faceless, corporate bureaucracies out

of touch with the real world. Most of them are small

“mom and pop” operations.

Ends and means. As is so often true in

constitutional litigation, that’s what this case is

about.

The problem arises when simplistic solutions are

chosen for complex problems; when, in haste, onesided “cures” are devised. The means chosen are now

before this Court.

To meet perceived needs, New York has cast its

net too broadly. It has transferred palpable interests

in property from landlords to tenants. Without

compensation. That, the constitution forbids.

4

ARGUMENT

I

“THE POLITICAL ETHICS REFLECTED

IN THE FIFTH AMENDMENT REJECT

CONFISCATION AS A MEASURE OF

JUSTICE.” 2

It is hard to improve on this Court’s vintage

words. 3 However, what the Second Circuit has

approved is the precise opposite of this Court’s

simple and fair summary of the Just Compensation

Clause’s mandate.

A.

A Complete Takeover of Property

Would Unarguably be a Taking.

Perhaps, by contrast, a hypothetical can

illustrate the reality facing owners of apartment

buildings in New York today.

Suppose that the City of New York decided that

a large set of apartment buildings housed the city’s

poorest citizens and, to protect them from joining the

ranks of the homeless, the city decided to acquire all

those apartment buildings to maintain as lowincome housing. To accomplish that, the city

assembled the apartments’ owners and informed

2 United States v. Cors, 337 U.S. 325, 332 (1949).

3 Professor Michelman’s classic expansion on that thought is

worth noting, nonetheless: “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.”

Frank Michelman, Property, Utility, and Fairness: Comments

on the Ethical Foundations of “Just Compensation” Law, 80

Harv. L. Rev. 1165, 1181 (1967).

5

them that the city was taking them over. A sort of

coup de apartments. In exchange for title to their

properties, the owners would receive contracts to

manage the new city-owned buildings and would be

paid a salary based on a percentage of the rent

collected. But the city would set the rent; the rental

rates would change only when the city decided they

could; funds for upkeep, insurance, and

maintenance would have to come from the rents

collected or money borrowed by the “managers,” as

the city would invest no money of its own; and the

tenants could either remain in perpetuity or

designate their successors in interest.

Had the City of New York actually

commandeered title to the properties and placed it

in the City’s name, there is no doubt that a Fifth

Amendment violation would have occurred.

Property would have been taken for public use

without any compensation changing hands. The

acquisition of title would have made the taking

obvious.

As this Court explained:

“government action that works a taking of

property rights necessarily implicates the

‘constitutional obligation to pay just

compensation.’ [Citation.]” First English

Evangelical Lutheran Church v. County of

Los Angeles, 482 U.S. 304, 315 (1987);

emphasis added.

When legislation is enacted which takes property

with no intent to provide compensation, the

6

legislation is invalid. Hodel v. Irving, 481 U.S. 704

(1987). 4

How does the hijacking of title from the

apartment owners in the hypothetical differ from

what the New York law actually did to these

apartment owners? In only one meaningful way: In

the hypothetical, the owners would be relieved of the

dubious honor of paying taxes on the property, as

they would no longer hold title to it. As the New York

Court of Appeals put it in its enduring exposition on

the difference between overt and covert confiscation:

“The only substantial difference, in

such case, between restriction and actual

taking, is that the restriction leaves the

owner subject to the burden of payment of

taxation, while outright confiscation

would relieve him of that burden.” Arverne

Bay Constr. Co. v. Thatcher, 15 N.E.2d

587, 592 (N.Y. 1938).

Aside from the taxation issue, the New York law

has stripped apartment owners of all useful indicia

of ownership. Hyperbolic as this may sound, it is the

reality. The stringent New York regulations have

reduced the ownership of an apartment building in

New York to something akin to a public utility,

where all decisions are made by the government and

the titular owners of the properties have lost not

4 The statute in Irving was intended to solve a problem caused

by intestate succession to miniscule Native American estates.

In the process, however, the property right of devise and

descent was taken from current owners without any intent to

pay for taking that “stick” from the bundle of rights. As a

result, this Court struck down the statute.

7

only control over what they can charge and who they

can rent to, but have been compelled to transfer

substantial property interests to their tenants with

no compensation whatever.

B.

A Compelled Transfer of a Recognizable

Interest in Property is a Taking.

As noted earlier, this Court approved Hawaii’s

plan for land reform and its use of the power of

eminent domain to accomplish the breakdown of a

feudal land tenure system (Hawaii Housing

Authority v. Midkiff) and also approved the concept

of urban redevelopment in the District of Columbia

and its use of the power of eminent domain to

assemble large tracts of land for resale to developers

who would redevelop decayed city cores (Berman v.

Parker).

In neither case, however, was there any doubt

that compensation was a key element in the

package. Indeed, the entire discussion in Midkiff

was directed at the “public use” aspect of the Fifth

Amendment because, as the unanimous opinion put

it, “we assume for purposes of these appeals that the

weighty demand of just compensation has been met

….” 467 U.S. at 245. Absent this Court’s ability to

make that crucial assumption, the land title reform

system which compelled the transfer of fee simple

title from landlords to tenants could not have passed

constitutional muster.

Nor is this surprising. The extent of the power of

eminent domain has been described in terms more

suited to breathless ingenues than judges:

8

“The power of eminent domain, next to

that of conscription of man power for war,

is the most awesome grant of power under

the law of the land.” Winger v. Aires, 89

A.2d 521, 522 (Pa. 1952), quoted in City of

Oakland v. Oakland Raiders, 174

Cal.App.3d 414, 419 (1985).

When recognized property interests are

compulsorily transferred from a private citizen on

orders from the government, compensation is

mandated:

“This Court has stated that a sovereign ‘by

ipse dixit, may not transform private

property into public property without

compensation …. This is the very kind of

thing that the Taking Clause of the Fifth

Amendment was meant to prevent.’”

Ruckelshaus v. Monsanto Co., 467 U.S.

986, 1012 (1984), quoting Webb’s Fabulous

Pharmacies, Inc. v. Beckwith, 449 U.S.

155, 161 (1980).

In the context at bar, there is no issue that such

a transfer has taken place. Wordplay alone stands

between these apartment building owners and the

property right which has been taken from them and

given to their tenants.

9

C.

A Taking Occurs When Government

Commands a Property Owner to Stand Aside

and Permit Physical Occupation of Property

by Another.

1.

The General Rule is

Occupation is a Taking.

That

Physical

The New York scheme goes beyond mere wealth

transfer. It commands property owners to permit

permanent physical occupation of their property by

strangers.

Physical invasion has always been viewed by this

Court as a particularly obnoxious form of

governmental intrusion, one which can more readily

be seen as a Fifth Amendment violation. Penn

Central Transp. Co. v. City of New York, 438 U.S.

104, 122 (1978); Loretto v. Teleprompter Manhattan

CATV Corp., 458 U.S. 419, 436.

“Property” consists of many things. Indeed, the

concept is so complex that this Court has repeatedly

used the bundle of sticks analogy to help illustrate

it, concluding that either the taking of an entire

“stick” from the “bundle” or the taking of a part of all

“sticks” in the “bundle” violates the Just

Compensation Clause of the Fifth Amendment. 5

5 E.g., Kaiser Aetna v. U.S., 444 U.S. 164, 176 (1979); Loretto,

458 U.S. at 433, 435; U.S. v. Security Indus. Bank, 459 U.S. 70,

76 (1982); Ruckelshaus v. Monsanto Co., 467 US 986, 1011

(1984); Hodel v. Irving, 481 U.S. 704, 716 (1987); Nollan v.

California Coastal Commn., 483 U.S. 825, 831 (1987).

The “sticks” obviously affected here are the right to exclude

others from one’s property, the right to possession of one’s

10

One “stick” which has received special protection

from this Court has been the right of property

owners to exclude others from their property. This

Court has repeatedly referred to the right to exclude

others as “one of the most essential” 6 and “most

treasured strands in an owner's bundle of property

rights.” 7

Moreover, the Court has been particularly

protective against governmental actions which

permit strangers to invade the property of others:

“This is not a case in which the

Government is exercising its regulatory

power in a manner that will cause an

insubstantial devaluation of petitioners’

private property; rather, the imposition of

the navigable servitude in this context will

result in an actual physical invasion of the

privately owned marina.” Kaiser Aetna,

444 U.S. at 180 (emphasis added); see also

Loretto, 458 U.S. at 436.

Like Kaiser Aetna, this case does not involve

“insubstantial devaluation” of property. The actual

physical transfer of interests effected by the law

causes injury to the apartment owners which is

evident and substantial.

property and, because of the wealth transfer aspects of the

ordinances, the right to alienate one's property.

Kaiser Aetna, 444 U.S. at 176; Loretto, 458 U.S. at 433,

Ruckelshaus, 467 U.S. at 1011, Irving, 481 U.S. at 716; Nollan,

486 U.S. at 831.

6

7 Loretto, 458 U.S. at 435.

11

This Court later explained its rule as affording

protection to a property owner against “an interloper

with a government license.” FCC v. Florida Power

Corp., 480 U.S. 245, 253 (1987). 8 That analogy seems

apt here, where the New York law permits—or, more

properly, requires—an unending stream of

strangers to occupy the apartment units.

Coerced acceptance of physical invasion is

enough—by itself—under this Court’s precedents to

find a taking. However, the New York intrusion may

be qualitatively worse than the others already

condemned by this Court. For here we are not

talking about boats on a waterway (Kaiser Aetna) or

strollers on a beach (Nollan) or wires in a building

(Loretto). Here, we are talking about living quarters.

The landlords have lost all ability to determine who

will live in their buildings. That control has shifted

to their tenants.

2.

Yee v. City of Escondido Is Not Compatible

With Settled Law.

The Second Circuit thought that Yee v. City of

Escondido, 503 U.S. 519 (1992), a mobile home rent

control case, compelled its action. That conclusion is

in error. Yee was, in fact, an aberration that ought to

be recognized as such and discarded.

Yee was based on two concepts that are

antithetical to this Court’s takings jurisprudence,

both past and present. First, it is based on the idea

that only coerced physical occupation offends the

8 Or, as Professor Tribe colorfully expressed it, “government-

invited

gatecrashers.”

Laurence

Tribe,

Constitutional Law § 9-5 at 602 (2d ed 1988).

American

12

Fifth Amendment; and second, it relies on the fact

that the regulation did not completely eliminate the

property owner’s interests. This Court’s cases are

contrary on both counts.

First, the Court’s physical takings jurisprudence

is not limited to coerced physical occupation. The

Court’s physical takings cases are based on facts on

the ground. In United States v. Causby, 328 U.S. 256

(1946), for example, the taking was caused by

overflights. In Pumpelly v. Green Bay Co., 13 Wall.

(80 U.S.) 166 (1872), the taking was caused by

unintended flooding. Nollan authorized casual

beach use. Although, to be sure, some physical

takings cases are based on coerced physical

occupation, e.g., Loretto v. Teleprompter Manhattan

CATV Corp., 458 U.S. 419 (1982), plainly all are not.

The question is whether there was a sufficient

physical invasion to compromise property rights.

Second, Yee found no taking because the owners

retained significant value. The courts below

magnified this holding by undermining the “bundle

of sticks or rights” concept that this Court has

consistently used. According to them, a physical

taking cannot occur unless government action takes

“the entire bundle” of rights. Community Housing,

59 F.4th at 547. But that has never been the test.

This Court has viewed each of the component sticks

in the bundle as being property protected by the

Takings Clause. See, e.g., Kaiser Aetna, 444 U.S., at

176, describing the right to exclude as “one of the

most essential sticks” in the bundle (emphasis

added); Dolan v. City of Tigard, 512 U.S. 374, 393

(1994) (same); U.S. v. Security Indus. Bank, 459 U.S.

70, 76 (1982) (security interest); United States v.

13

General Motors Corp., 323 U.S. 373, 378 (1945)

(rights “to possess, use and dispose”); Consolidated

Rock Products Co. v. Du Bois, 312 U.S. 510, 528

(1941) (rights of bondholders in bankruptcy);

Babbitt v. Youpee, 519 U.S. 234, 242 (1997) (right of

devise; “completely demolish one of the sticks”)

(emphasis added); Loretto, 458 U.S. at 533 (“one of

the most essential sticks”) (emphasis added); Cedar

Point Nursery v. Hassid, 141 S.Ct. 2063, 2069 (2021)

(“one of the most important sticks”) (emphasis

added); Ruckelshaus, 467 U.S. 986, 1011 (1984)

(trade secret); Stewart v. Abend, 495 U.S. 207, 253

(1990) (right to prevent derivative publication);

Andy Warhol Foundation for the Visual Arts, Inc. v.

Goldsmith, 143 S.Ct. 1258, 1261 (2023) (right to

derivative works).

If there were any doubt, the Court swept it away

in Horne v. Department of Agriculture, 576 U.S. 350,

362-63 (2015), where the Court held that leaving the

property owner with one stick out of the bundle is

not sufficient to avoid a taking: “Whether the

government may avoid the categorical duty to pay

just compensation for a physical taking of property

by reserving to the property owner a contingent

interest in a portion of the value of the property, set

at the government’s discretion. The answer is no.”

Leaving property owners with one (or more) of the

sticks in the bundle they began with does not

immunize the government from takings liability. See

Richard A. Epstein, The Unfinished Business of

Horne v. Department of Agriculture, 10 NYU J.L. &

Liberty 734, 758-61 (2016).

14

In short, the underpinnings of Yee have been

done away with by more recent decisions, to the

extent they had validity in the first place.

In 2019, the Court did not shy away from

overruling another aberrant Takings Clause ruling

from that developing era in this field of the law, i.e.,

Williamson County Regional Planning Commission

v. Hamilton Bank, 473 U.S. 172 (1985), overruled in

Knick v. Township of Scott, 139 S. Ct. 2162 (2019).

Knick discarded Williamson County because it was

“not just wrong. Its reasoning was exceptionally ill

founded and conflicted with much of our takings

jurisprudence.” Knick, 139 S.Ct. at 2178. So, too,

with Yee.

II.

Good Intentions Are

Constitutionally Irrelevant.

This brief does not challenge the good intentions

of the New York government to care for lower income

residents. The question, however, is should their

good intentions count for anything in this

constitutional analysis, as the Second Circuit

believed (App. 9)? In a word, no.

That New York professes to be seeking to do good

is beside the point. It proceeds as though recognition

of a legitimate governmental goal validates

whatever solution is chosen. And the Second Circuit

bought into that. (App. 9; Community Housing

Improvement Program, 59 F.4th 540.) Not relevant.

Determination of a legitimate governmental

objective is the first, not the last, step. We

distinguish between means and ends, and the means

15

chosen to achieve the objective must survive

Constitutional scrutiny the same as the ends.

Good intentions are constitutionally irrelevant,

although they may be legally and morally necessary.

For the proper exercise of any governmental power,

the underpinning of such a beneficent purpose must

exist. That much was settled no later than 1922,

when this Court examined a statute designed to stop

land subsidence caused by underground coal mining

and concluded that the prerequisites for exercise of

both police power and eminent domain were present:

“We assume, of course, that the statute

was passed upon the conviction that an

exigency existed that would warrant it,

and we assume that an exigency exists

that would warrant the exercise of the

power of eminent domain. But the

question at bottom is upon whom the loss

of the changes desired should fall.” 9

More recent authority echoes that conclusion:

“the Takings Clause presupposes that the

government has acted pursuant to a valid public

9 Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 416 (emphasis

added). See also Florida Rock Indus, Inc. v. United States, 18

F.3d 1560, 1571 (Fed. Cir. 1994): “It is necessary that the

Government act in a good cause, but it is not sufficient. The

takings clause already assumes the Government is acting in

the public interest ….” More than that, it assumes that the

Government is acting pursuant to lawful authority. If not, the

action is ultra vires and void. Compare Youngstown Sheet &

Tube Co. v. Sawyer, 343 U.S. 579 (1952) (unlawful wartime

seizure voided) with United States v. Peewee Coal Co., 341 U.S.

114 (1951) (compensation mandatory after lawful wartime

seizure).

16

purpose.” Lingle v. Chevron USA, Inc., 544 U.S. 528,

543 (2005) (emphasis added).

Once it is determined that the government action

is done to achieve a legitimate goal, then the means

chosen must be examined against the constitutional

matrix to ensure that private rights have not been

violated. Governmental power is not permitted to

run roughshod over the constitutionally protected

rights of individuals. That is what the Court was

talking about when it concluded in First English

that:

“many of the provisions of the Constitution

are designed to limit the flexibility and

freedom of governmental authorities and the

Just Compensation Clause of the Fifth

Amendment is one of them.” 482 U.S. at 321.

Pennsylvania Coal was merely one in a long line

of decisions in which this Court—speaking through

various voices along its ideological spectrum

(Pennsylvania Coal having been authored for the

Court by Justice Holmes)—patiently, and

consistently, explained to regulatory agencies that

the general legal propriety of their actions and the

need to pay compensation under the Fifth

Amendment present different questions, and the

need for the latter is not obviated by the virtue of the

former.

The Second Circuit, however, seems not to have

gotten the message. Its opinion in an earlier rent

control opinion relied on below in this case opens by

explaining that the regulations before it were “part

of a decades-long legislative effort to address the

myriad problems resulting from a chronic shortage

17

of affordable housing in the City.” Community

Housing Improvement Program, 59 F.4th at 543. As

if that justified the severe regulations adopted here

by the city. Emphasizing the point, the dissenting

opinion in Pennsylvania Coal had argued the

absolute position that a “restriction imposed to

protect the public health, safety or morals from

dangers threatened is not a taking.” 10 Eight Justices

rejected that proposition.

In Loretto, New York’s highest court upheld a

statute as a valid exercise of the police power, and

therefore dismissed an action seeking compensation

for a taking. This Court put it this way as it

reversed:

“The Court of Appeals determined that

§ 828 serves [a] legitimate public purpose …

and thus is within the State’s police power.

We have no reason to question that

determination. It is a separate question,

however, whether an otherwise valid

regulation so frustrates property rights that

compensation must be paid.” 11

Similarly, in Kaiser Aetna, the Corps of

Engineers decreed that a private marina be opened

to public use without compensation. This Court

disagreed, and explained the relationship between

justifiable regulatory actions and the just

compensation guarantee of the Fifth Amendment:

10 260 U.S. at 417 (Brandeis, J. [Holmes’ usual constitutional

soulmate], dissenting).

11 458 U.S. at 425 (Marshall, J.) (emphasis added).

18

“In light of its expansive authority under the

Commerce Clause, there is no question but

that Congress could assure the public a free

right of access to the Hawaii Kai Marina if

it so chose. Whether a statute or regulation

that went so far amounted to a taking,

however, is an entirely separate question.” 12

Or, as the Court put it in Nollan:

“That is simply an expression of the

Commission’s belief that the public

interest will be served by a continuous

strip of publicly accessible beach along the

coast. The Commission may well be right

that it is a good idea, but that does not

establish that the Nollans (and other

coastal residents) alone can be compelled

to contribute to its realization. Rather,

California is free to advance its

‘comprehensive program,’ if it wishes, by

using its power of eminent domain for this

‘public purpose.’” 13

That is why the Court concluded in First English

that the Fifth Amendment was designed “to secure

compensation in the event of otherwise proper

interference amounting to a taking.” 14 This bedrock

principle of the law of constitutional remedies goes

back to the unanimous decision in Hurley v.

12 444 U.S. at 174 (Rehnquist, J.) (emphasis added).

13 483 U.S. at 841 (Scalia, J.).

14 482 U.S. at 315 (Rehnquist, C.J.) (first emphasis, the Court’s;

second emphasis added).

19

Kincaid, 15 where the Court held that the basic

remedy for a taking resulting from valid

governmental action is just compensation, not

judicial second-guessing of governmental policies

and decisions through disruptive injunctions. 16

In a similar vein are cases like Preseault v.

I.C.C., 17 Ruckelshaus v. Monsanto Co., 18 Dames &

Moore v. Regan, 19 and the Regional Rail

Reorganization Act Cases. 20 In each of them, the

Court was faced with the claim that Congress, in

pursuit of legitimate objectives, had taken private

property without just compensation. The goal in

each was plainly legitimate (respectively, the

creation of recreational trails over abandoned

railroad right-of-way easements; obtaining expert

input prior to licensing pesticides, dealing with the

issue of compensation in the aftermath of the

Iranian hostage crisis; and widespread railroad

bankruptcy). Nonetheless, the Court did not permit

those virtuous legislative goals to trump the

constitutional need for compensation when private

property was taken in the process. In each, the Court

directed the property owners to the Court of Federal

15 285 U.S. 95 (1932) (Brandeis, J.).

16 Justice Brandeis’ opinion for the Court in Hurley shows his

acceptance of the Court’s holding in Mahon that takings

require compensation. Justice Brandeis had been the lone

dissenter in the latter case, expressing the belief (abandoned

in Hurley) that valid regulation does not require compensation.

17 494 U.S. 1 (1990) (Brennan, J.).

18 467 U.S. 986 (1984) (Blackmun, J.).

19 453 U.S. 654 (1981) (Rehnquist, J.).

20 419 U.S. 102 (1974) (Brennan, J.).

20

Claims 21 to determine whether these exercises of

legislative power, though substantively legitimate,

nonetheless required compensation. 22

This consistent teaching probably explains why

the Court of Appeals for the Federal Circuit (forum

for takings cases against the United States), has had

no trouble recognizing that the Just Compensation

Clause operates against proper governmental

action:

“In such cases the characteristic feature is

the defendant’s use of rightful …

regulatory rights to control and prevent

exercise of [private] ownership rights the

defendant is unwilling to purchase and

pay for.” 23

21 When litigation is brought in that court, the Court of Appeals

for the Federal Circuit has consistently affirmed judgments

making the United States liable for takings that precluded

development in order to further proper environmental goals.

E.g., Whitney Benefits, Inc. v. United States, 926 F.2d 1169

(Fed. Cir. 1990) (surface coal mining); Florida Rock Indus., Inc.

v. United States, 18 F.3d 1560 (Fed Cir. 1994) (limestone

mining); Creppel v. United States, 41 F.3d. 627 (Fed. Cir. 1994)

(dredging and filling wetlands).

To this end, the Fifth Amendment’s just compensation

guarantee has been held self-executing. The availability of

compensation validates and constitutionalizes the otherwise

wrongful government action. City of Monterey v. Del Monte

Dunes, 526 U.S. 687, 714-15 (1999) (Kennedy, J.); United

States v. Clarke, 445 U.S. 253, 257 (1980) (Rehnquist, J.).

22

23 Florida Rock Indus., Inc. v. United States, 791 F.2d 893, 899

(Fed. Cir. 1986) (quoting with approval; emphasis the Court’s).

See also Whitney Benefits, Inc. v. United States, 926 F.2d 1169,

1177 (Fed. Cir. 1991); Skaw v. United States, 740 F.2d 932, 939

(Fed. Cir. 1984).

21

In sum, for a taking to occur, it matters not

whether the regulators acted in good or bad faith, or

for good or bad reasons. What matters is the impact

of their acts, not the purity vel non of their motives.

Indeed, if their motives are benign—or done for the

best of reasons—that only fortifies the need for

compensation required by the Just Compensation

Clause of the Fifth Amendment. 24

“[T]he Constitution recognizes higher

values than speed and efficiency. Indeed,

one might fairly say of the Bill of Rights in

general, and of the Due Process Clause in

particular, that they were designed to

protect the fragile values of a vulnerable

citizenry from the overbearing concern for

efficiency

and

efficacy

that

may

characterize praiseworthy government

officials no less, and perhaps more than

mediocre ones.” 25

Thus, it is not enough to conclude that it is a good

thing to radically reorganize our system of property

ownership. As a matter of Constitutional policy,

severe invasions of protected property rights cannot

occur unless compensation is paid. Such radical

change cannot be accomplished with the stroke of a

word processor. If New York believes that the idea is

24 See Hughes v. Washington, 389 U.S. 290, 298 (1967): “[T]he

Constitution measures a taking of property not by what a State

says, or by what it intends, but by what it does.” (Stewart, J.,

concurring) (emphasis original).

Stanley v. Illinois, 405 U.S. 645, 656 (1972) (footnote

omitted.) See also Shelton v. Tucker, 364 U.S. 479, 488 (1960).

25

22

otherwise worthwhile then, as this Court put it in

Nollan, “it must pay for it.” 483 U.S. at 842.

III.

THERE IS CONFLICT AND CONFUSION ON

HOW TO APPLY PENN CENTRAL—THE

CASE THIS COURT CALLS ITS “POLESTAR”

IN REGULATORY TAKINGS.

It would be easy to cite treatises and law reviews

attesting to the absence of standards in regulatory

taking law and the need for guidance from this

Court.

Easy, but not necessary. The Court’s own

opinions make the point clearly, and decisions like

the one below show the current need for pragmatic

and comprehensive guidance.

“In Justice Holmes’ well-known, if less

than self-defining, formulation, ‘while

property may be regulated to a certain

extent, if a regulation goes too far it will be

recognized as a taking.’” Palazzolo v. Rhode

Island, 533 U.S. 606, 617 (2001) [quoting

Pennsylvania Coal Co. v. Mahon, 260 U.S.

393, 415 (1922)].

“The rub, of course, has been—and

remains—how to discern how far is ‘too far.’”

Lingle v. Chevron U.S.A., Inc., 544 U.S. 528,

538 (2005).

“[W]e have ‘generally eschewed’ any set

formula for determining how far is too far,

choosing instead to engage in ‘essentially ad

hoc factual inquiries.’” Tahoe-Sierra

Preservation Council v. Tahoe Reg. Plan.

23

Agency, 535 U.S. 302, 326 (2002) (quoting

Lucas, 438 U.S. at 1005 which, in turn,

quoted Penn Central, 438 U.S. at 124).

“Since Mahon, we have given some, but

not too specific, guidance to courts

confronted with deciding whether a

particular government action goes too far

and effects a regulatory taking.” Palazzolo,

533 U.S. at 617.

“Indeed, we still resist the temptation to

adopt per se rules in our cases involving

partial regulatory takings, preferring to

examine ‘a number of factors” rather than a

simple ‘mathematically precise’ formula.”

Tahoe-Sierra, 535 U.S. at 326.

“Our polestar instead remains the

principles set forth in Penn Central itself

and our other cases that govern partial

regulatory takings.” Tahoe-Sierra, 535 U.S.

at 326, n.23 (quoting with approval from

Palazzolo, 533 U.S. at 633 (O’Connor, J.,

concurring)).

The Court has created a “rule” that provides no

guidance to those who either have to live with it or

apply it. There has been enough litigation of this

sort during the last four decades for the law to have

developed meaningful guidelines.

And, yet, we have none. This case is an exemplar.

Despite detailed allegations about the severe impact

of the regulations at issue, the District Court found

nothing that could even be subject to factual inquiry

at trial. The Second Circuit compounded the injury

24

by applying the inapplicable Yee decision and then

refusing to consider the directly applicable decisions

in Cedar Point and Horne on the spurious ground

that they were not rent control cases. They were,

however, Fifth Amendment cases, and this Court’s

analysis

warranted

serious

consideration.

Something is wrong with this picture, and only this

Court can fix it.

CONCLUSION

Certiorari should be granted.

Respectfully Submitted,

MICHAEL M. BERGER*

*COUNSEL OF RECORD

MANATT, PHELPS & PHILLIPS, LLP

2049 Century Park East, Suite 1700

Los Angeles, CA 90067

(310) 312-4000

mmberger@manatt.com

Counsel for Amicus Curiae

The Small Property Owners

of San Francisco Institute