Opposition Brief — Gilbert v. City of Cambridge

| Supreme Court, 0.3.

FILED

AUG 30 199)

a. S| OFFICE OF THE CLERK

In the

Supreme Court of the United States

Ocroser Term, 1991

HOWARD H. GILBERT, JR., er At.,

PETITIONERS,

CITY OF CAMBRIDGE anp

CAMBRIDGE RENT CONTROL BOARD,

RESPONDENTS.

OPPOSITION TO PETITION

FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

STEPHEN B. DeuTscH

(Counsel of Record)

CLAIRE LAPORTE

Fo.tey, Hoac & E.ior

One Post Office Square

Boston, Massachusetts 02109

(617) 482-1390

Attorneys for Respondents

Blanchard Press, Inc., Boston, Mass. Law Printers (617) 426-6690

Questions Presented

1. Are property owners barred from bringing a federal

declaratory judgment action challenging a local ordinance on

its face as a taking without just compensation, where they

have failed first to seek just compensation for the alleged tak-

ing in the Massachusetts state courts under that state’s inverse

condemnation statute, Mass. Gen L. ch. 79, §10?

2. Are property owners barred from bringing a federal

declaratory judgment action challenging a local ordinance on

its face as a taking without just compensation, where the ordi-

nance merely establishes a permit system to regulate their pro-

perty?

ill

TABLE OF CONTENTS

Questions Presented .

Table of Authorities ......

Statement of The Case

Reasons for Denying the Writ

I. The Issues Raised By Petitioners Concerning The

Application Of Williamson County Regional Plan-

ning Commission Do Not Merit This Court’s Atten-

The Holding Seaaiciog Prior aes To The

Massachusetts Inverse Condemnation Proce-

dure Was Only An Alternative Ground For The

Ee

In Any Event, This _ Should Not Reopen

The Question Of Whether Massachusetts Of-

fers A Procedure For Obtaining Just Compen-

sation Sufficient To Satisfy Williamson County

i. This Court should defer to the lower courts’

finding that Massachusetts offers a remedy

2. The issue of whether a particular Massa-

chusetts statute provides a remedy is not of

sufficient importance to merit this Court's

ee

3. The issue of who bears the burden of proof

as to the availability of a remedy does not

pequire feview .................

The Court Of Appeals’ Memalicatio Qn Of

Williamson County To A Declaratory Judg-

ment Action Raises No Significant New Issue . .

1. The court of appeals decision is both

correct and consistent with Williamson

County ....... ee

Page

10

1]

13

II.

iv

to

In any event, the court of appeals did not

review the district court's exercise of discre-

tion to decline to grant a declaration, and

hence that issue is not even before the

REE os ha duce ea ce e ae a

In The Current Main Of This Case, This Court

Should Not Reach Out To Decide On The Merits

Whether The Cambridge Ordinance Is Constitu-

tional On Its Face .

A.

The Court Ot danas Decided Nothing Mute

Than That Petitioners’ Facial Takings Chal-

lenge Was Not Ripe Because The Ordinance

Provided For Permits.............

Even If The Court Of Appeals Eved On This

Ripeness Point, There Were Three Other Pro-

cedural Grounds On Which The Lower Courts

Held That The Takings Claims Must Be Dis-

missed, And Two Of Them Are Not Even Pre-

sented To This Court For Review............

Even If These Procedural Obstacles Do Not

Prevent Review At This Time, The Court

Should Avoid Reaching The Constitutional

Issues On The Current Record ......... ve

1. The court of appeals was correct in counsel-

| Re yee ec eee

This case does not involve a permanent

physical occupation, but only a restriction

on sales which must be analyzed as a

ed ee Pare

3. Loretto does not apply here in any event.

The Due Process Issues Should Not Be Renchied

On The Merits, And In Any Event Are Not

PS Se Pe ee en Pe oe eee ee

to

AS 2 0 eee Cee a

Page

15

18

21

21

TABLE OF AUTHORITIES

Cases Page

Agins v. City of Tiburon, 447 U.S. 255 (1980) ....... 24, 25

Austin v. City of Honolulu, 840 F.2d 678 (9th Cir.), cert.

denied, 488 U.S. 852 (1988) ....................... 13

Bishop v. Wood, 426 U.S. 341 (1976) ................. 10

Block v. Hirsh, 256 U.S. 135 (1921) ............. — Ta

Bowles v. Willingham, 321 U.S. 503 (1944) ............ 26

Brillhart v. Excess Ins. Co., 316 U.S. 491 (1942) ........ 16

Brockett v. Spokane Arcades, Inc., 472 U.S. 491 (1985) .. 10

Burford v. Sun Oil Co., 319 U.S. 315 (1943)... 2.2.0.0... 2

Butner v. United States, 440 U.S. 48 (1979) ............ 19

Chas. Wolff Packing Co. v. Court of Indus. Relations,

a I ona spn ot ne Gas a es are ae eee 29

Cohen v. Berger, 153 A.D.2d 920, 545 N.Y.S.2d 728,

(1989), app. dismissed, 75 N.Y.2d 809, 551 N.E.2d

604, 552 N.Y.S.2d 111 (1990), cert. denied, 111 S.Ct.

FARMS ons AQ SI aie le aa ee Pr 27

CGO, aes ee SFO on ober ences Gancveners 10

DeAnza Properties X, Ltd. v. County of Santa Cruz, 936

Fe IE I ID os boc oo cewek enue ees 4

East-Bibb Twiggs Neighborhood Ass’n v. Macon Bibb

Planning & Zoning Comm'n, 896 F.2d 1264 (11th Cir.

i elie a eh Ae aaa Sep ata TP Re ia O28 7 Cay te ee 14

Edgar A. Levy Leasing Co. v. Siegel, 258 U.S. 242 (1922) 26

Executive 100, Inc. v. Martin County, 922 F.2d 1536

(11th Cir.}, petition for cert. pending, 59 U.S.L.W.

ER Steg meet, ah ere baPaa ae 14

First English Evangelical Lutheran Church v. County of

Los Angeles, 482 U.S. 304 (1987)................... 14

Flynn v. City of Cambridge, 383 Mass. 152, 418 N.E.2d

PP aie renters wre viveesctaeln ses 4

Fresh Pond Shopping Center, Inc. v. Rent Control Bd.

of Cambridge, 388 Mass. 1051, 446 N.E.2d 1060, app.

dismissed sub. nom. Fresh Pond Shopping Center, Inc.

v. Callahan, 464 U.S. 875 (1983) ................... 22

vi

Page

Gilbert v. City of Cambridge, 745 F. Supp. 42 (D. Mass.

1900)... 2... 0k ene + 5 ee .. passim

Gilbert v. Cc ity of Cambridge, 932 F.2d 51 (1st Cir. 1991)

Pee a passim

Hall v. City of Santa Barbara, 833 F.2d 1270 (9th Cir.

1986), cert. denied, 485 U.S. 940 (1988).......... 17, 27

Hodel v. Virginia Surface Mining & Reclamation Ass'n,

Inc., 452 U.S. S64 (GRR scence eee teas. 21, 22

Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398

04: <) | I 17, 26, 27

Hudson v. Palmer, 468 U.S. 517 (1984)........... ivy. oe

Kaiser Aetna v. United States, 444 U.S. 164 (1979) . 21, 25

Littlefield v. City of Afton, 785 F.2d 596 (8th Cir. 1986)

SI 13, 14

Levewte v. Te le onan Manhattan CATV Corp., 458

U.S. 410 (1088) .... 5445 ee ou. £3,94,95, 3, 27

Munn v. Illinois, 94 U.S. 113 (1876) ............. tk. Oe

Nebbia v. New York, 291 U.S. 502 (1934)........... 28, 29

Pembaur v. City of Cincinnati, 475 U.S. 469 (1986) ..... 10

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

104 (1978) ... 2.2.2.0. cee . 24, 25

Pennell v. City of San Jose, 485 U.S. 1 (1988) ...... 21, 22,

27, 28, 29

Salve Regina College v. Russell, i11S.Ct.1217(1991). 10,11

640 Broadway Renaissance Co. v. Cuomo, 740 F. Supp.

1023 (S.D.N.Y. 1990), aff'd, 927 F.2d 593 (2d Cir.),

cert. denied, 111S. Ct. 2054 (1991)................. 27

Southern Pacific Transp. Co. v. City of Los Angeles, 922

F.2d 498 (9th Cir. 1990)....................... 18, 19

Southview Coop. Housing Corp. v. Rent Control Bd. of

Cambridge, 16 Mass. App. Ct. 1102 (1983) . ........ 6

Steffel v. Thompson, 415 U.S. 452 (1974) ............ 18

Steinbergh v. Cambridge Rent Control Bd., 406 iden.

147, 546 N.E.2d 169 (1989) .................. we §

Troy Ltd. v. Renna, 727 F.2d 287 (3d Cir. 1984)........ 17

Vii

Page

United States v. Riverside Bayview Homes, Inc., 474 U.S.

121 (1985) | eae ea : 18

United States v. S.A. Empresa de Viacao Aerea Rio

Grandense (Varig Airlines), 467 U.S. 797 (1984) 10

Williamson County Regional Planning Comm'n v. Ham-

ilton Bank, 473 U.S. 172 (1985) .. passim

Constitution, Statutes and Ordinances

U.S. Const. art. III, §2 18

28 U.S.C. §220i 16, 18, 20

42 U.S.C. §1983 1, 7, 13, 14

Mass. Gen. L. ch. 79, §10 2 ti, 8

1990 Mass. Acts, ch. 52 5

1976 Mass. Acts, ch. 36

§7(a) .. 17, 27

§9(a) (8) . | } 5

Cambridge (Massachusetts) Ordinance 966, as amended

(codified as City of Cambridge Code, ch. 8.44) passim

§l(a) . 4

§1(b)(4) 5, 22, 23, 24, 27, 29

§l(c 2) . 5, 24, 29

§ 1(d) 5

§1(e)(2) 20

OPPOSITION TO PETITION FOR A WRIT OF

CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE FIRST CIRCUIT

STATEMENT OF THE CASE

Proceedings Below

This lawsuit was filed in 1988 in federal district court by

petitioners, the owners of several rent-controlled apartment

buildings in Cambridge, Massachusetts. Petitioners assert that

they wish to convert their rent-controlled buildings into con-

dominiums or cooperatives and sell individual units. Com-

plaint, Paragraphs 12, 15; Petition, p. 4. The City of

Cambridge’s Removal Permit Ordinance (the “Ordinance’’),

enacted in 1979, precludes their doing so without first obtain-

ing permits from the Cambridge Rent Control Board. The

Ordinance, they allege, on its face and as applied, thus takes

their property without just compensation and violates their

due process rights.' Asserting claims under 42 U.S.C. §1983,

they seek declaratory relief only. Complaint, Prayers 1, 2.

Certain of the petitioners (the “Southview” group) sought

removal permits from the Board to convert their units to

condominiums or cooperatives in 1980. Their applications

were denied, and they did not appeal. The remaining

petitioners (the “Blevins” group) have never sought permits.

' The complaint also asserted an equal protection claim that was dismissed

by the district court. The court of appeals affirmed and petitioners do not

further press the matter.

Petitioners also asserted a state law claim: that the Board had failed to

perform a study, mandated by the Ordinance itself, to determine whether

the total number of renta! units in the city, excluding public housing units,

exceeded the number as of January 1, 1970; under a “sunset” provision, the

Ordinance would go out of effect should that condition be satisfied. This

claim was dismissed by the district court for !ack of pendent jurisdiction

when the federal claims were dismissed. The court of appeals affirmed; this

matter also is not further pressed.

None of the petitioners have ever filed an inverse condemna-

tion action in Massachusetts state court to seek compensation

for the alleged taking of their property. See Mass. Gen. L. ch.

79, §10.

The City and the Board filed a motion to dismiss, urging,

without arguing the merits, that:

(1) The lawsuit should be dismissed as unripe under

Williamson County Regional Planning Commission v.

Hamilton Bank, 473 U.S. 172 (1985), for petitioners’ fail-

ure to utilize the available Massachusetts inverse condem-

nation remedy;

(2) even if the action were technically ripe despite the

petitioners’ failure to utilize the inverse condemnation

remedy, the court should exercise its discretion to decline

to entertain this declaratory judgment action, since it

could not fashion a complete remedy;

(3) the facial claims, that the “mere enactment” of the

Ordinance had taken petitioners’ property without just

compensation, were barred by the applicable three-year

statute of limitations, since the Ordinance had been en-

acted nine years before the suit was filed;

(4) the facial claims were barred in any event because

the mere establishment of a permit system could not be

found to take petitioners’ property (or violate their due

process rights);

(5) the Southview group's as-applied claims were barred

by the statute of limitations, since the permit denials to

which the as-applied claims necessarily related had taken

place eight years before the suit was filed;

(6) the Blevins group’s as-applied claims were not ripe

since they had never sought permits; and

(7) in any event, the court should abstain under the doc-

trine of Burford v. Sun Oil Co., 319 U.S. 315 (1943).

The district court granted the motion in its entirety and dis-

missed the action. In a comprehensive memorandum, Judge

Woodlock held that:

(1) The statute of limitations barred the facial claims;

(2) the statute of limitations barred the Southview as-

applied claims;

(3) the Blevins as-applied claims were not ripe;

(4) alternatively, as a matter of discretion, the court

would decline to entertain a declaratory judgment action

on the takings claims because, even were it to find a tak-

ing, petitioners’ failure to utilize the Massachusetts in-

verse condemnation remedy meant that the court could

not find the taking to be without just compensation, and

hence could rot fully determine the controversy between

the parties; and

(5) the due process claims should be dismissed on the

merits.

Gilbert v. City of Cambridge, 745 F. Supp. 42 (D. Mass. 1990)

(Petition, p. A-30). So ruling, the district court did not reach

the City’s and the Board's other grounds for urging dismissal.

The court of appeals affirmed. In an equally comprehensive

opinion, Judge Selya held that:

(1) The facial takings claims were not ripe, in view of

the existence of a permit process that contemplated the

grant as well as the denial of permit applications;

(2) the Southview as-applied takings claims were barred

by the statute of limitations;

(3) the Blevins as-applied takings claims were not ripe;

(4) alternatively, the takings claims were barred as

unripe by petitioners’ failure to seek just compensation

under the Massachusetts inverse condemnation statute;

and

(5) the due process claims should be dismissed on the

merits, and in addition were not ripe.

Gilbert v. City of Cambridge, 932 F.2d 51 (1st Cir. 1991) (p.

A-1). In so deciding, the court of appeals referred to the dis-

trict court's dismissal of the facial claims on statute of limita-

tions grounds as “problematic,” but did not itself analyze or

decide the point.? Id. at 57, n.8 (p. A-19). Nor did that court

reach respondents’ Burford abstention argument, or the dis-

trict court’s decision to decline to entertain the declaratory

judgment action as a matter of judicial discretion. Id. at 67,

n.21 (p. A-29). Thus, none of these grounds for dismissal are

before this Court.

Cambridge's Regulation of Condominium and Cooperative

Conversion

Although minor modifications have been made over the

years, Cambridge has had its system of residential rent control

in effect continuously since 1970.

In the late 1970's, large numbers of rental units began to be

converted to cooperatives and condominiums. Although this

trend was not confined to rent controlled housing, the Cam-

bridge City Council in 1979 found that condominium conver-

sion (and other causes) had led to the loss of more than ten per-

cent of the controlled rental units in the city, and hence that

regulation of the process was necessary to deal with the public

emergency of a shortage of affordable housing units for low

and moderate income families and the elderly. Ordinance,

§1(a)® (p. A-59). See Flynn v. City of Cambridge, 383 Mass.

152, 156-157, 418 N.E.2d 335, 337 (1981).

* The Ninth Circuit has considered the matter. In DeAnza Properties X,

Ltd. v. County of Santa Cruz, 936 F.2d 1084 (9th Cir. 1991), that court

held, as had the district court Rerein, that a facial takings challenge to a rent

control ordinance was time barred, on the ground that the statute of limita-

tions ran from the enactment of the ordinance.

* The Ordinance currently in effect, Ordinance 966, as amended, is codi-

fied as Chapter 8.44 of the City of Cambridge Code.

5

The Removal Permit Ordinance was enacted in response.

Under the Ordinance, a unit already in the rent control system

could not be removed from that system without a permit from

the Board. Removal was defined to include occupancy of a

condominium unit by its owner, demolition, or rehabilita-

tion that would prevent occupancy (except as such rehabilita-

tion was required by law).* Ordinance, §1(b)(4) (pp. A-60,

61). The Ordinance set forth standards to guide the Board in

determining whether to issue removal permits. Ordinance,

§1(d) (pp. A-62, 63). Building owners, however, continued to

be entitled to evict tenants from noncondominium units,

without obtaining permits, if they or members of their families

wished to reside in the units themselves. Ordinance, §1(b)(4)

(p. A-61). See Rent Control Enabling Act, 1976 Mass. Acts ch.

36, §9(a)(8).

As originally enacted, the Ordinance did not prohibit the

sale of individual units as cooperatives or condominiums with-

out removal permits; permits were required under Section

1(b)(4)(i) only for unit owners subsequently to occupy their

units. It soon became apparent, however, that this regulatory

system was not satisfactory. Consequently, in 1981 the Or-

dinance was amended to provide that, although an owner

could sell his entire interest in a building without a permit, in-

dividual units could not be sold as condominiums or coop-

eratives unless the building owner first obtained a removal

permit for the sale, whether or not the unit subsequently was

to be occupied by its new owner.’ Ordinance, §](c 2) (p.

A-62).

* Conversion to a cooperative was added to the definition in 1980, im-

properly causing a unit to be held vacant in 1984. Ordinance, §1(b)(4)(iv),

(v) (pp. A-60, 61).

5 In Steinbergh v. Cambridge Rent Conirol Board, 406 Mass. 147, 546

N.E.2d 169 (1989), the Massachusetts Supreme Judicial Court struck down

this amendment on the ground that Cambridge lacked the power under state

law to enact it. On June 6, 1990, by Chapter 52 of the Acts of 1990, the

Massachusetts legislature explicitly granted Cambridge the necessary power.

(The Steinbergh decision and the enactment of Chapter 52 both took place

after this lawsuit was filed but before the district court granted the motion to

dismiss.)

Petitioners’ Prior Litigation

In January, 1980 (before the Ordinance’s amendment to

regulate the sale of units) the Southview group, which owned

a rent-controlled building which it wished to convert to con-

dominiums, applied to the Board for the removal permits

necessary to permit prospective purchasers to occupy the units.

The Board, after a hearing, denied the permits, thus effec-

tively preventing the conversion.

Instead of appealing, the Southview group sought to cir-

cumvent the Ordinance. They reorganized their building as a

cooperative, took the position that the rent control law and

Ordinance did not apply to cooperatives, and began to market

individual units. When the Board concluded that the Or-

dinance continued to apply, Southview brought a state court

action seeking a declaration to the contrary. (They neither

challenged the Ordinance on constitutional grounds nor ap-

pealed the prior denial of removal permits.) The

Massachusetts Appeals Court upheld the Board's jurisdiction

over cooperatives. Southview Coop. Housing Corp. v. Rent

Control Bd. of Cambridge, 16 Mass. App. Ct. 1102 (1983)

(summary disposition).

During the pendency of that litigation, the Southview group

filed a second permit application with the Board. This appli-

cation too was denied, after a hearing and findings of fact by a

Board hearing examiner who analyzed the application with

respect to the specific factors laid out in the Ordinance.

Southview chose not to pursue judicial review of these permit

denials, which occurred in 1980, either.

The Blevins petitioners never sought removal permits to

convert any of the four buildings they owned to condominiums

or cooperatives.

Reasons for Denying the Writ

Because the lower courts were presented with, and ruled

upon, so many preliminary challenges to petitioners’ lawsuit,

petitioners face a daunting task in trying to construct a rela-

tively straightforward Petition. To do so, they abandon their

a

~

as-applied claims and seek to resurrect only their facial claims.

They challenge, as they must, the two grounds upon which the

court of appeals based its rejection of those claims: its applica-

tion of Williamson County to hold that petitioners’ failure to

utilize the Massachusetts inverse condemnation remedy bars

them from proceeding, and its holding that the existence of a

permit system precludes their facial challenge. (In their efforts

to advance their cause, petitioners wrongly describe this latter

holding as being on the merits, and thus urge this Court itself

to reach the merits.)

In order to obtain meaningful relief, petitioners must per-

suade this Court that both issues are worthy of review. This

Opposition will establish that, to the contrary, neither is.

Moreover, since petitioners urge the Court at length to reach

the merits, this Opposition also wiil establish that the merits

are not properly before the Court, both because, contrary to

petitioners argument, the lower court did not reach them,

and because in any event a multitude of preliminary rulings,

not all open to review by this Court, stand in the way.

The Opposition begins by addressing the Williamson Coun-

ty issues.

I. Tue Issues Raisep By Petitioners CONCERNING THE

APPLICATION OF Williamson County Regional Planning

Commission Do Not Merit Tuts Court’s ATTENTION.

Seeking to persuade this Court to breathe new life into their

lawsuit, petitioners urge, as they must, that the Court grant

review to determine whether the court of appeals was correct

in holding that Williamson County Regional Planning Com-

mission v. Hamilton Bank, 473 U.S. 172 (1985), bars their

action.

Williamson County precludes a Section 1983 takings action

in federal court if there is an available state inverse condemna-

tion procedure that the plaintiff has failed to utilize. Specif-

ically, petitioners seek to have this Court determine whether

the court of appeals was correct in holding that Williamson

County:

a

(1) bars petitioners’ action despite their claim that

Massachusetts state courts “have never allowed the

recovery of damages for legislation that takes property”;

and

(2) applies to declaratory judgment actions as well as

actions for damages.

(Petition, p. iv.) This Court should deny petitioners’ request.

A. The Holding Requiring Prior Resort To The Massa-

chusetts Inverse Condemnation Procedure Was

Only An Alternative Ground For The Decision

Below.

First of all, as the Statement of the Case demonstrates, both

in the district court and in the court of appeals the Williamson

County holding was nothing more than an alternative ground

for dismissing petitioners’ facial takings claims. In the court of

appeals, there were two dispositive grounds: the fact that the

availability of a permit process made the claims unripe, and

Williamson County.

Part II of this Opposition demonstrates why the former

holding, which petitioners wrongly characterize as a decision

on the merits, is not worthy of this Court’s review. Because it is

only an alternative holding, the Williamson County point by

itself cannot be dispositive of anything, and hence this Court

should not grant review solely in order to consider it.

B. In Any Event, This Court Should Not Reopen The

Question Of Whether Massachusetts Offers A Proce-

dure For Obtaining Just Compensation Sufficient

To Satisfy Williamson County.

Petitioners argued in the district court that Williamson

County could not bar their action because Massachusetts did

not provide an inverse condemnation remedy for property

owners such as themselves. The district court extensively ana-

lyzed Massachusetts law and concluded, to the contrary, that

a a i

9

Mass. Gen. L. ch. 79, §10 provided such a remedy.® Gilbert,

745 F. Supp. at 52 (p. A-49).

In so concluding, the court rejected petitioners’ argument

that a clause in the Massachusetts statute, which made the

statute inapplicable if the taking were “effected by or in

accordance with a formal vote or order of . . . a body politic,”

covered the enactment of an ordinance by a city council.

Rather, the court held, the proviso was intended only to

preclude use of the statutory procedure if a tormal direct emi-

nent domain proceeding for the taking of the property had

been initiated. Jd.

This plausible statutory interpretation was reviewed by the

court of appeals, which summarized the arguments on both

sides, expressly found that the cases upon which petitioners

had placed “paramount reliance” were not applicable,

Gilbert, 932 F.2d at 65, n.18 (p. A-25), and concluded that

“we believe that the district court’s construction of Chapter 79

is correct.” Id. at 65 (pp. A-24, 25).

The court of appeals then went on to hold that it did not

need to “probe the point,” because, to the extent that the

availability of the remedy was unclear, petitioners had failed

to carry their burden to demonstrate that no remedy was

available. Id. (pp. A-25, 26).

This Court should permit matters there to rest; neither the

issue of construction of this Massachusetts statute, nor the bur-

den of proof issue, is of sufficient importance to merit the

Court’s further attention.

* Massachusetts General Laws Chapter 79, §10 provides in relevant part:

When the real estate of any person has been taken for the public use

. or has been entered for a public purpose, but such taking [or] entry

.. was not effected by or in accordance with a formal vote or order of

the board of officers of a body politic or corporate duly authorized by

law ..., and by such taking ..., entry ... or use he has suffered an

injury for which he is entitled to compensation, the damages therefor

may be recovered under this chapter.

OO

10

1. This Court Should Defer to the Lower Courts’

Finding that Massachusetts Offers A Remedy.

This Court has long deferred to lower federal court deter-

minations of state law. See, e.g., Pembaur v. City of Cincin-

nati, 475 U.S. 469, 484 n.13 (1986) (Court accords “great

deference to the interpretation and application of state law by

the courts of appeals”); United States v. S.A. Empresa de

Viacao Aerea Rio Grandense (Varig Airlines), 467 U.S. 797

(1984) (declining to undertake independent review of lower

court’s determination of state law). One reason for this

deference is that “(t]he federai judges who deal regularly with

questions of state law in their respective districts and circuits

are in a better position than we to determine how local courts

would dispose of comparable issues.” Butner v. United States,

440 U.S. 48, 58 (1979). Accord, Brockett v. Spokane Arcades,

Inc., 472 U.S. 491, 500 (1985) (“district courts and courts of

appeals are better schooled in and more able to interpret” local

law); Bishop v. Wood, 426 U.S. 341, 345-346 (1976). But this

Court has also noted a second reason for its deference: the

policy will “render unnecessary review of [the lower courts’ }

decisions in this respect,” Brockett, 472 U.S. at 500, quoting

Cort v. Ash, 422 U.S. 66, 73 n.6 (1975), and thus reduce the

volume of Court review of such decisions.

Both reasons militate against further review of the state law

issue here. The district court and the court of appeals alike

deal regularly with Massachusetts law issues. Both courts con-

sidered the statutory interpretation question herein at length;

had either court thought it necessary, it could have certified

the question for decision to the Supreme Judicial Court of

Massachusetts. Neither court did so. In these circumstances,

this Court should not devote its scarce time and resources to

second-guessing the unanimous conclusion of the lower courts

on this narrow state law issue.’

’ Nothing in Salve Regina Coliege v. Russell, 111 S.Ct. 1217 (1991), sug-

gests a different result. In that case, this Court held that courts of appeals

were to undertake de novo reviews of district court determinations of state

Cenrrernse

1]

2. The issue of whether a particular Massachusetts

statute provides a remedy is not of sufficient im-

portance to merit this Court's attention.

Even aside from the fact that the issue of state law has al-

ready been decided by two lower courts, it is not worthy of

this Court's attention.

Petitioners do not suggest, and there is no reason to think,

that other states’ inverse condemnation statutes share the

Massachusetts statute’s convoluted phraseology. Thus, a deci-

sion as to the availability or scope of a remedy under the

Massachusetts statute will have no impact whatever outside

Massachusetts.

Moreover, even were this Court to decide that issue, its deci-

sion would not be definitive. Regardless of this Court’s ruling,

the issue of whether Section 10 of Chapter 79 provides a rem-

edy to property owners such as petitioners will not be finally

and definitively resolved until the Supreme Judicial Court of

Massachusetts rules. This Court’s decision could do no more

than add a third layer of federal court prediction of state law

on top of the two already-existing layers.

In considering whether to grant review now, it is also rele-

vant that no great hardship or injustice can result, to petition-

ers or anyone else, if the lower federal courts here have erred

in their reading of Massachusetts law. Under the court of ap-

peals’ decision, a property owner who wishes to challenge

Cambridge’s Removal Permit Ordinance need only file an in-

verse condemnation action in Massachusetts court. If state

courts in that proceeding determined that Mass. Gen. L. ch.

79, §10 in fact did not provide a remedy, the state proceeding

would be truncated, but the litigant involved would be able to

law. (The First Circuit did exactly that in this case.) In Salve Regina, the

Court explicitly distinguished the question of court of appeals review of state

law issues from the question of its own review of such issues, however, noting

that “the manner in which this Court chooses to expend its limited resources

in the exercise of its discretionary jurisdiction” was an entirely separate mat-

ter from the question before it. Jd. at 1223 n.3.

12

return to federal court to press his claim, and all future

litigants would know that prior resort to state court was un-

necessary in Massachusetts.

3. The issue of who bears the burden of proof as to

the availability of a remedy does not require

review.

Although the bulk of their argument to this Court is to the

effect that Massachusetts offers no inverse condemnation rem-

edy, petitioners ultimately suggest that this Court should take

this case, not to decide that point, but in order to decide

whether it is proper to apply Williamson County if the avail-

ability of the state remedy is unclear. (Petition, p. 30.)

This issue is equally unworthy of this Court’s attention.

First of all, a fair reading of the court of appeals’ opinion, see

Gilbert, 932 F.2d at 64-65 (pp. A-24 to 26), makes absolutely

clear that the court’s conclusion with respect to burden of

proof was simply a secondary, alternative ground for its deci-

sion. As pointed out above, the court of appeals first sum-

marized the arguments on both sides, analyzed and discred-

ited the pair of cases upon which petitioners placed “para-

mount reliance,”* id. at 65, n.18 (p. A-25), and then held that

“w]e believe that the district court’s construction of Chapter

79 is correct.” Id. at 65 (p. A-25). Only after so doing did it go

on to its consideration of the burden of proof. Hence, that dis-

cussion was not essential to its decision, and the current

dispute concerning the burden of proof is no more than

academic.

Moreover, the court of appeals’ decision concerning the

burden of proof is completely consistent with this Court's

established doctrine. See Hudson v. Palmer, 468 U.S. 517, 539

(1984) (O’Connor, J., concurring) (to prevail on takings claim

“claimant must either avail himself of the [state] remedies .. .

or prove that the available remedies are inadequate’).

* The court concluded that “[wlJe do not believe either that these opinions

stand for [petitioners’] proposition or that they can carry the cargo which

[petitioners] load on them.” Gilbert, 932 F.2d at 65, n.18 (p. A-25).

13

Finally, the decision herein is in accord with decisions of the

two other courts of appeals that have addressed the matter.

See Austin v. City of Honolulu, 840 F.2d 678, 680 (9th Cir.),

cert. denied, 488 U.S. 852 (1988); Littlefield v. City of Afton,

785 F.2d 596, 609 (8th Cir. 1986) (where there may be

remedy, federal action not ripe until state courts rule remedy

not available).

In sum, there is no reason for this Court to concern itself

with the matter.

C. The Court of Appeals’ Application of Williamson

County to a Declaratory Judgment Action Raises No

Significant New Issue.

Nor does the issue of the application of Williamson County

to declaratory judgment actions merit this Court’s attention.

1. The court of appeals decision is both correct and

consistent with Williamson County.

In Williamson County, this Court based its holding, that a

Section 1983 takings claim in federal court is unripe if there is

an available state inverse condemnation remedy that was not

pursued, on the unique nature of the Takings Clause. Unlike

other constitutional provisions, that Clause does not forbid

government action, but merely imposes a condition: property

may be taken (for a valid public purpose) so long as just com-

pensation is provided. Since there is no requirement of ad-

vance compensation, “no constitutional violation occurs until

just compensation has been denied.” Williamson County, 473

U.S. at 194 n.13.

Nothing in Williamson County suggests that it applies only

if the relief sought in the federai court action is damages, and

not a declaration. Williamson County based its conclusion

that there was no jurisdictional basis for a Section 1983

damages award on the fact that there is no violation of the

Constitution until compensation is denied. But if this is so,

there equally is no jurisdictional basis for a Section 1983 decla-

ration of unconstitutionality. Thus, petitioners’ argument that

14

the Court should take this case to decide that issue should be

rejected.

Petitioners cannot and do not suggest that the court of ap-

peals decision herein barring declaratory relief conflicts with

any other court of appeals decision on the point. It does not. In

fact, the few other court of appeals cases in which the issue has

arisen all reached the same conclusion as the First Circuit

herein; until this decision, no other court even found the point

worthy of discussion. See, e.g., Executive 100, Inc. v. Martin

County, 922 F.2d 1536, 1542 (11th Cir. 1991), pet. for cert.

pending on other grounds, No. 90-1707, 59 U.S.L.W. 3840

(filed May 6, 1991); East-Bibb Twiggs Neighborhood Ass'n v.

Macon Bibb Planning & Zoning Comm'n, 896 F.2d 1264, 1266

(11th Cir. 1989); Littlefield, 785 F.2d at 609. Thus, there

simply is no need for this Court to take up the matter.

There is good reason why the lower courts have not distin-

guished between declaratory and damage remedies for pur-

poses of applying Williamson County. Virtually every poten-

tial Section 1983 takings lawsuit, including this one, can prop-

erly include both a claim for declaratory (or injunctive) relief

and a claim for damages, and almost all do so.* Thus, a rule

that would provide for federal court jurisdiction over one

claim but not the other would be both artificial and highly

inefficient. Williamson County itself well illustrates the mat-

ter. That case began as a proceeding seeking both types of

relief; it was transformed into a suit solely for damages by the

time it reached this Court only by the happenstance that in the

interim the parties had reached a settlement permitting plain-

tiffs to develop their property. See Williamson County, 473

U.S. at 183 n.7.

In this circumstance, a rule such as petitioners urge, making

federal jurisdiction dependent upon the relief sought by the

® This is particularly true since First English Evangelical Lutheran Church

v. County of Los Angeles, 482 U.S. 304 (1987), held that damages could be

recovered even for temporary takings.

This is not an action where petitioners filed suit before a newly-enacted or-

dinance took effect, and hence before any claim for damages yet existed.

‘

15

piaintiff, not only would be inefficient, by encouraging the

splitting of claims, but also would permit plaintiffs an easy end

run around the holding of Williamson County. Plaintiffs could

first seek declarations in federal court and then, if they

prevailed, pursue damages in state court.

This problem of tactical claim splitting and avoidance of

Williamson County is not just a theoretical one. The district

court squarely recugnized the problem in the context of this

very litigation. In introducing its discussion of the case, the

court pointed out that petitioners “do not seek damages — at

least at this time in this court.” Gilbert, 745 F.Supp. at 43 (p.

A-30). Moreover, the Petition herein itself further highlights

the point by asking, “is a prior suit for damages in state court

necessary where the only relief sought in federal court is a dec-

laratory judgment?” (Petition, p. 23) (Emphasis added).

Thus, this Court should refrain from taking this case and

upsetting the established rule that Williamson County applies

equally to damage and declaratory judgment actions.

2. In any event, the court of appeals did not review

the district court's exercise of discretion to

decline to grant a declaration, and hence that

issue is not even before the Court.

There is a further reason why this Court should not take up

the question whether Williamson County bars petitioners’

declaratory judgment action. Even were this Court to do so

and hold that the court of appeals erred in applying William-

son County directly to an action for a declaration, that holding

still would not remove the procedural obstacles that petition-

ers face in pursuing this litigation, or permit this Court to

reach the merits of their constitutional claims. This is so be-

cause the court of appeals never reviewed the district court’s

decision to decline jurisdiction on discretionary grounds.

As pointed out above, the district court did not base its dis-

missal on a holding that Williamson County directly barred

the suit for a declaration. Rather, the court assumed that a

16

claim for a declaration technically was ripe, notwithstanding

Williamson County, and hence that the court had jurisdiction.

It then went on to analyze the specific posture of this case, and

exercised its discretion to decline jurisdiction under the

Declaratory Judgment Act, 28 U.S.C. §2201, on the ground

that the unavailability of a damages remedy under Williamson

County would prevent the court from granting a complete

remedy that would fully resolve the controversy between the

parties. Gilbert, 745 F. Supp. at 53-56 (pp. A-51 to 56). Cf

Brillhart v. Excess Ins. Co., 316 U.S. 491, 495 (1942) (issue is

“whether the questions in controversy between the parties

can better be settled in the proceeding pending in the state

court”)

The district court recognized that, even were it to assume

jurisdiction and declare that the Removal Permit Ordinance

effectuated a taking, that would not end the dispute between

the parties. Takings are !awiul, and the declaration would not

mean that the Ordinance was unconstitutional or could not be

enforced. Hence, even if they prevailed in federal court peti-

tioners would be required to file a fresh action in state court to

seek their only true remedy in this situation, compensation for

the lawful taking.

The district court was clearly correct in its analysis. In some

contexts, a federal court declaration that a taking had oc-

curred might as a practical matter end a dispute, since the

municipality involved might choose to rescind the offending

ordinance rather than be exposed to open-ended claims for

future compensation. But such speculation about the opposing

party's potential response to a declaration is an insufficient

basis for a federal court to assume jurisdiction.

Moreover, in the unique circumstances of this case, it is ex-

tremely unlikely that an abstract declaration that a taking had

occurred would lead to repeal of the Ordinance, and thus end

the controversy. The Rent Control Enabling Act, under which

petitioners’ property is regulated by Cambridge, expressly pro-

vides that property owners are entitled to a “fair net operating

income” in the form of rent from their tenants. See 1976 Mass

Acts, ch. 36, §7(a). This rent might well be all the “just com

pensation” required even were the Ordinance a taking. See,

e.g., Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398

(1934); Hall v. City of Santa Barbara, 833 F.2d 1270, 1281

(9th Cir. 1986), cert. denied, 485 U.S. 940 (1988); Troy Ltd.

v. Renna, 727 F.2d 287, 300 (3d Cir. 1984). Thus, even a

declaration that a taking had occurred would not give the par-

ties to this litigation meaningful guidance, or offer the pro-

spect of terminating the dispute between them, without fur

ther state court litigation on the compensation issue.

These considerations suggest the wisdom of the court of ap-

peals decision applying Williamson County to actions for

declarations. They also illustrate the limited utility of any

review of that decision by this Court. Since the court of ap-

peals did not review the district court’s exercise of discretion to

deny declaratory relief, see Gilbert, 932 F.2d at 67, n.2i (p

4-29), even a decision by this Court that Williamson County

was not an absolute bar to petitioners’ declaratory judgment

action would not resolve the issue completely. It still would be

necessary to return this case to the court of appeals for con

sideration of the district court’s exercise of discretion.

IJ IN THE CurrRENT Posture Or Tus CAse, Tu1s Court

SHOULD Not REACH Out To DecipeE ON THE MenrITS

WHETHER THE CAMBRIDGE ORDINANCE Is CONSTITU-

TIONAL ON Its FACE.

When it affirmed the district court's decision, the court of

appeals was not ruling on the merits. Its concluding summary

makes this clear:

The primary thrust of our holding today is that appel-

lants’ takings claims are not timely. |A}ppeilants’ tak-

ings claims, being unripe , were properly dismissed.

18

We need go no further. ... [Appellants] cannot now ex-

pect a federal court to nurture their claims through a trial

or to be tempted by unripe fruit into a premature con-

sideration of potentially important constitutional issues

— issues which may or may not actually materialize.

Gilbert, 932 F.2d at 66-67 (pp. A-28 to 29).

A. The Court Of Appeals Decided Nothing More Than

That Petitioners’ Facial Takings Challenge Was Not

Ripe Because The Ordinance Provided For Permits.

Notwithstanding the lower court’s description of its own

decision, petitioners suggest that “the First Circuit decided the

merits and held the Ordinance constitutional on its face.” Peti-

tion, p. 5. On that basis, they urge this Court itself to take up

the issue.

In fact, although the court of appeals’ language is overbroad

in places, what that court did was considerably less sweeping

than petitioners suggest. The court held only that petitioners

could not proced with their facial takings claims because they

had not established the existence of an “actual controversy,” as

is required beth by Article IiI, Section 2 of the Constitution

and by the Declaratory Judgment Act, 28 U.S.C. §2201.

Gilbert, 932 F.2d at 55-56 (p. A-7). Citing Steffel v. Thomp-

son, 415 U.S. 452, 458 (1974), the First Circuit reasoned that,

because the Ordinance established a permit system, peti-

tioners’ failure to avail themselves of this mechanism prior to

bringing suit rendered the matter non-justiciable. Gilbert, 932

F.2d at 55-57 (pp. A-8, 9).

This conclusion, of course, is entirely consistent with this

Court’s prior precedent, and with other court of appeals cases,

both of which the First Circuit cited and explicitly followed.

See, e.g., United States v. Riverside Bayview Homes, Inc., 474

U.S. 121, 127 (1985); Southern Pacific Transp. Co v. City of

19

Los Angeles, 922 F.2d 498, 506 n.9 (9th Cir. 1990).'° There is

absolutely no need for this Court to review such settled doc-

trine.

But even were the court of appeals wrong in its conclusion,

it would not follow that it is open to this Court now to rule

that the Ordinance is facially unconstitutional. Far from it.

The issue of the constitutionality of the Ordinance has never

been fully briefed and considered by a lower court in this case._

Thus, even were this Court to conclude that the court of ap-

peals erred, at most it would mean only that, assuming all the

other procedural obstacles to this litigation also were removed,

a lower court upon remand could reach the merits.

B. Even If The Court Of Appeals Erred On This Ripe-

ness Point, There Were Three Other Procedural

Grounds On Which The Lower Courts Held That

The Takings Claims Must Be Dismissed, And Two

Of Them Are Not Even Presented To This Court For

Review.

The court of appeals emphasized its disinclination to reach

the merits by pointing out that, having “waited nearly a dec-

ade after the Ordinance was enacted” before bringing this

lawsuit, petitioners “were then too hasty, essaying a rush to

judgment without due recourse to either the permit process or

the State’s inverse condemnation procedure.” Gilbert, 932

'© In Southern Pacific, the Ninth Circuit put the matter well. It explained

that

the [Supreme] Court has noted that certain facial challenges are im-

possible to evaluate absent some factual information regarding how

the statute will be applied. This could lead to a ruling on the merits

that, facially, the statute’s “mere enactment” does not effect a taking

.., or to a jurisdictional determination that the issue is not ripe for

resolution. ... The point appears to be that some regulations, by their

very nature, are just not subject to facial attack on takings grounds.

Prior to their application, in other words, the attacks are simply

premature.

Southern Pacific, 922 F.2d at 506, n.9 (citations omitted).

i

20

F.2d at 67 (p. A-29). The Petition asking this Court to reach

the merits betrays the same haste and disregard of proper pro-

cedure.

The following holdings of the lower courts all stand in the

way of a court reaching the merits of the facial takings claims

herein:

(1) the district court’s holding that the statute of limita-

tions bars the facial takings claims;

(2) the court of appeals’ holding that Williamson

County bars the takings claims;

(3) the district court’s discretionary decision to decline

jurisdiction under the Declaratory Judgment Act, 28

U.S.C. §2201; and

(4) the court of appeals’ decision that the facial takings

claims are not ripe due to the existence of the permit

system.

In addition, the City and the Board have suggested Burford

abstention; the lower courts thus far have found it unnecessary

to reach that issue.!!

Even were this Court to take this case, it could have before

it only two of the above matters: the court of appeals’ holdings

that Williamson County bars this action, and that the exis-

tence of a permit system makes the facial takings claims

unripe. Since the court of appeals did not reach the other

points, they are not open for review by this Court. Thus,

despite petitoners’ suggestion to the contrary, this Court will

be unable to render any ruling on the merits of petitioners’

constitutional challenge regardless of its disposition of the pro-

cedural issues presented in this case.

'' Moreover, a federal court might wish to defer reaching the constitu-

tional issues even were these procedural problems not present, in view of

petitioners’ assertion in Count 3 of their complaint that under state law the

Board was required to determine whether the Ordinance was no longer in ef-

fect by virtue of a “sunset” provision which would be triggered by an increase

in the number of rental units beyond the 1970 level. See Ordinance, §1(e)(2)

(pp. A-65, 66). Such a determination of course would moot petitioners’

federal claims.

ei

21

C. Even If These Procedural Obstacles Do Not Prevent

Review At This Time, The Court Should Avoid

Reaching The Constitutional Issues On The Current

Record.

Even if, despite this case’s procedural problems, this Court

still could somehow reach and decide the merits, it should not

do sc.

1. The court of appeals was correct in counseling

restraint.

The court of appeals was hardly enunciating a novel doc-

trine in suggesting that it should avoid being “tempted” into

“premature consideration of potentially important constitu-

tional issues.” Gilbert, 932 F.2d at 67 (p. A-29). The wisdom

of restraint in constitutional adjudication has long been a

guiding principle of this Court. Moreover, restraint is par-

ticularly appropriate in a case such as this, where petitioners

seek a sweeping ruling concerning the facial constitutionality

of a complex regulatory system that has been in effect for more

than a decade.

In Pennell v. City of San Jose, 485 U.S. 1 (1988), this Court

recently underscored the need for restraint in the very same

rent control context present here. Asked to declare a rent con-

trol ordinance facially unconstitutional as a taking by virtue of

a provision which permitted the consideration of “tenant

hardship” in establishing rent, this Court refused, explaining

that

We think it would be premature to consider this conten-

tion on the present record. ... Given the “essentially ad

hoc, factual inquir[y]” involved in the takings analysis,

Kaiser Aetna v. United States, 444 U.S. 164, 175 (1979),

we have found it particularly important in taking cases to

adhere to our admonition that “the constitutionality of

statutes ought not be decided except in an actual factual

setting that makes such a decision necessary.” Hodel v.

22

Virginia Surface Mining & Reclamation Ass'n, Inc., 452

U.S. 264, 294-295 (1981).

... [T]he mere fact that-a hearing officer is enjoined to

consider hardship to the tenant . . ., without any showing

in a particular case as to the consequences of that injunc-

tion in the ultimate determination of the rent, does not

present a sufficiently concrete factual setting for the adju-

dication of the takings claim appellants » . se here.

Pennell, 485 U.S. at 10. Pennell’s reasoning should be follow-

ed.

In Fresh Pond Shopping Center, Inc. v. Callahan, 464 U.S.

875 (1983), dismissing appeal from Fresh Pond Shopping

Center, Inc. v. Rent Control Bd. of Cambridge, 388 Mass.

1051, 446 N.E.2d 1060, a property owner sought a removal

permit to demolish a specific building, and the permit was

denied. The case thus presented a concrete controversy: a

specific provision of the Ordinance, its regulation of demoli-

tion, Ordinance, §1(b)(4)(ii) (p. A-60), was at issue, and to the

extent that its constitutionality might turn on specific facts,

those facts had been established through the permit applica-

tion process. Even so, this Court dismissed the appeal.

If that case did not present a substantial federal question,

this case is even less suitable for Court review. To be sure, the

Southview group sought removal permits for conversion in

1980. But they did not appeal the denial of their application,

which therefore is not before this Court, and in any event, as

the court of appeals pointed out, petitioners have acknowl-

edged that “the economic situation ... changed” between

their 1980 applications and the filing of this lawsuit in 1988.

The Blevins group has never sought permits. Gilbert, 932 F.2d

at 62 (p. A-20). Thus, there is no curent factual record on

which to rely in judging the constitutionality of the

Ordinance.

23

2. This case does not involve a permanent physical

occupation, but only a restriction on sales which

must be analyzed as a regulatory taking.

Rather than recognizing the inappropriateness of a facial

challenge, petitioners urge that one is possible. To do so, they

argue in sweeping and simplistic fashion that the Ordinance’s

requirement that a property owner obtain a permit before

removing a unit from the rental housing market establishes a

“permanent physical occupation” by tenants, akin to the “per-

manent physical occupation” held to be a per se taking in

Loretto v. Teleprompter Manhattan CATV Corp.. 458 U.S.

419 (1982). From this premise, they conclude that the permit

requirement is unconstitutional on its face, without the need

to carry out any further facial inquiry or balancing.

Even the briefest reflection suggests fundamental problems

with petitioners’ approach. Petitioners seek to focus this

Court’s attention on what they perceive to be the Ordinance’s

requirement that they permit tenants to continue to reside in

their units, urging that this establishes a “permanent physical

occupation.” But in fact petitioners are not aggrieved by those

aspects of the Ordinance, such as the restriction on holding a

unit vacant, or the restriction on demolition, which arguably

could require continued tenant occupancy of units in some

circumstances. See Ordinance, §1(b)(4)(ii), (v) (pp. A-60, 61).

As petitioners concede, the Ordinance does not limit owner-

occupancy of units in conventional apartment buildings such

as theirs; it explicitly permits petitioners to evict tenants for

the purpose of residing in units in the buildings they own. See

Ordinance, §1(b)(4) (p. A-61).

Moreover, and even more fundamentally, petitioners’ quar-

rel with the Ordinance in fact arises from a provision that is

completely unrelated to tenant occupancy. Petitioners wish to

sell their units as condominiums or cooperatives. Thus, the

Ordinance provision by which they are aggrieved is Section

24

l(c ¥2), which prohibits the sale of an individual condo-

minium unit without a permit.'* This regulation of unit sales,

however, has nothing whatever to do with protecting tenant

occupancy; it applies to sales to tenants as well as sales to non-

residents.'* See Ordinance, §1(c 2) (p. A-62).

In fact, the regulation on sales in Section l(c 2) closely

resembles a restriction on the subdivision of real property. '*

While restrictions on property subdivision can in some cir-

cumstances be so severe as to constitute takings, they simply

cannot be facially invalid as “permanent physical

occupations” under Loretto. Rather, they must be analyzed to

determine if they amount to regulatory takings when applied

to particular parcels. See, e.g., Penn Central Transp. Co. v.

City of New York, 438 U.S. 104 (1978).

The point is well illustrated by Agins v. City of Tiburon,

447 U.S. 255 (1980). A property owner there claimed that the

enactment of a zoning ordinance, which required that he ob-

tain approval before developing his property, and limited that

development to no more than five homes, was a facial taking.

This Court rejected his claim, pointing out that “[t]he applica-

tion of a general zoning law to particular property effects a

taking if the ordinance does not substantially advance

legitimate state interests, ... or denies an owner economically

'? As to Southview’s cooperative units, the governing provision regulates

“conversion to a cooperative,” not owner-occupancy. See Ordinance,

§1(b)(4) (iv).

The situation was different before the armendment of the Ordinance in

1981 to add the restriction on unit sales (and during the brief interval in

1989-1990 when the currently-governing provision was not in effect (See note

5, supra)). At that time, the governing provision with respect to condo-

minium conversion regulated the occupancy of condominium units by their

new owners after the units were sold, and thus arguably raised petitioners’

issues. See Ordinance, §1(b)(4)(i) (p. A-60). But since 1981 that provision has

effectively been superseded by the prior sale regulation. Ordinance, §1(c 2).

'? Only tenants who have resided in their units since prior to the

Ordinance’s enactment in 1979 are exempt from the need to obtain permits in

order to buy their units. See Ordinance §1(c 2) (p. A-62).

‘* Petitioners do not need a permit to sell their entire interest in a building.

Ordinance §1(c 2) (p. A-62).

i

25

viable use of his land.” Jd. at 260. It went on to point out that

“no precise rule” governed, and that resolution of the issue re-

quired “a weighing of private and public interests.” Id. at

260-261. See also Kaiser Aetna v. United States, 444 U.S. 164,

175 (i979) (Court has “examined the ‘taking’ question by

engaging in essentially ad hoc, factual inquiries”); Penn Cen-

tral Transp. Co., 438 U.S. at 124 (there is no “set formula” for

takings analysis; decisions frequently turn on “the particular

circumstances” of the case).

Such complex and fact-bound analyses cannot be carried

out in the abstract setting of a facial takings claim such as this

case presents. As the court of appeals correctly held, such a

case is not ripe until a permit is sought.

3. Loretto does not apply here in any event.

There are further reasons why, despite petitioners’ sugges-

tion, Loretto cannot be the basis of any challenge to the Ordi-

nance as facially unconstitutional. First of all, as discussed

above, the Ordinance explicitly provides that if an owner of

rent controlled housing himself wishes to occupy a unit in a

building he owns, he may do so as a matter of right without

obtaining any removal permit from the Board, and may evict

his tenant to do so. This provision alone renders any Loretto

analysis impossible.

In the Loretto case, Teleprompter, the intruding third

party, could not be displaced from its occupation of Loretto’s

property even if Loretto herself wished to install cable televi-

sion equipment in the same location. Teleprompter thus had

the absolute right permanently to occupy the space, and

Loretto was permanently barred. This is precisely what “per-

manent physical occupation” means. Petitioners’ tenants in

their conventional apartment buildings, by contrast, must

vacate if petitioners wish to occupy their units. The Ordinance

thus makes clear that petitioners’ rights to occupy their prop-

erty in such buildings are preserved and are superior to any

rights of their tenants. There thus is no absolute right of “per-

manent physical occupation” in the tenants.

a

26

Moreover, even aside from that critical distinction, the

Loretto decision itself explicitly cautions that it is not intended

to upset established principles of landlord-tenant law:

[W]e do not agree with appellees that application of the

physical occupation rule will have dire consequences for

the government's power to adjust landlord-tenant rela-

tionships. This Court has consistently affirmed that States

have broad power to regulate housing conditions in gen-

eral and the landlord-tenant relationship in part‘cular

without paying compensation for all economic injuries

that such regulation entails. See, e.g., ... Bowles v.

Willingham, 321 U.S. 503 (1944) (rent control); Home

Building & Loan Ass’n v. Blaisdell, 290 U.S. 398 (1934)

(mortgage moratorium); Edgar A. Levy Leasing Co. v.

Siegel, 258 U.S. 242 (1922) (emergency housing law);

Block v. Hirsh, 256 U.S. 135 (1921) (rent control).

Loretto, 458 U.S. at 439-440.

In making explicit that it was not interfering with the states’

“broad power to regulate ... the landlord-tenant relation-

ship,” the Loretto Court was recognizing the fact that that

relationship always has been subject to special rules. In Block

v. Hirsh, 256 U.S. 135 (1921), the first of the many cases in

which this Court has upheld restrictions on eviction in the con-

text of rent control, Justice Holmes wrote:

The preference given to the tenant in possession is an

almost necessary incident of the policy, and is traditional

in English law. If the tenant remained subject to the

landlord’s power to evict, the attempt to limit the land-

lord’s demands would fail.

Block, 256 U.S. at 157-158. Thus, it is clear that provisions

protecting tenants have long enjoyed special status and were

not called into question by Loretto. (In this regard, it is signifi-

cant that the Loretto decision itself specifically cites the deci-

sions since Block in which this Court upheld eviction restric-

tions against constitutional challenge.)

a

27

Moreover, this Court repeatedly has declined to apply

Loretto as petitioners would have it do. For example, in Pen-

nell, 485 U.S. at 12, n.6, the Court pointed out that “some

amici” had argued that “rent control is per se a taking.” Citing

the passage from Loretto quoted above, however, this Court

concluded that “we see no need to reconsider the constitution-

ality of rent control per se.” Moreover, this Court has demon-

strated that it means just that by declining to review subse-

quent rent control cases. See 640 Broadway Renaissance Co. v.

Cuomo, 111 S.Ct. 2054 (1991), denying cert. to 927 F.2d 593

(2d Cir.), aff'g 740 F. Supp. 1023 (S.D.N.Y. 1990); Cohen v.

Berger, 111 S.Ct. 1586 (1991), denying cert. to 75 N.Y.2d 809,

551 N.E.2d 604, 552 N.Y.S.2d 111 (1990), dismissing appeal

from 153 A.D.2d 920, 545 N.Y.S.2d 728 (1989). There simply

is no reason for the Court to depart from that rule here.'*

Finally, even were a Loretto analysis somehow appropriate,

any finding of unconstitutionality herein is precluded by the

fact that petitioners already are receiving all the compensa-

tion to which they would be constitutionally entitled for the

occupation of their buildings in any event; they a.e guaran-

teed a “fair net operating income” in the form of rent from the

occupying tenants. 1976 Mass. Acts, ch. 36, §7(a). This is in

sharp contrast to the situation in Loretto, where the property

owner was given only a one-time $1 payment. See Loretto, 458

U.S. at 423-424. For this reason alone, Loretto cannot govern

and the Ordinance is constitutional on its face. See Home

Bldg. & Loan Ass’n v. Blaisdell, 290 U.S. 398, 425 (1934)

(upholding statute extending period for redemption of real

'S Petitioners suggest that Hall v. City of Santa Barbara, 833 F.2d 1270

(9th Cir. 1986), cert. denied, 485 U.S. 940 (1988), conflicts with the decision

herein, and that the conflict justifies Court intervention. There is no conflict.

As petitioners themselves concede, Petition, p. 21, the Ninth Circuit in Hall

viewed as “crucial” to its finding that a constitutional claim was stated, id. at

1279, the fact that an existing tenant could sell the right to indefinitely

occupy his site, and indeed that tenants were doing so and receiving large

sums. The Ninth Circuit correctly viewed this provision as distinguishing the

case before it from the conventional rent control situation. It meant that the

landowner retained no control whatever over the property involved. The

Cambridge Ordinance contains no such provision; hence, Hall in no way

conflicts with the decision herein.

a

28

property sold after foreclosure, since “while the mortgagor re-

mains in possession, he must pay the rental value”).

D. The Due Process Issues Should Not Be Reached On

The Merits, And In Any Event, Are Not Significant.

Petitioners also suggest that this Court should take this case

to review the court of appeals decision that the Ordinance does

not violate their due process rights.

Both lower courts found this issue easy to resolve on the

merits. The district court dismissed petitioners’ due process

claims in a footnote, Gilbert, 745 F.Supp. at 51, n.7 (p. A-46),

and the court of appeals affirmed in a single paragraph.

Gilbert, 932 F.2d at 65-66 (pp. A-26 to 27). That court, citing

Nebbia v. New York, 291 U.S. 502, 537 (1934), found that

an ordinance controlling the removal of rental units is not

“arbitrary, discriminatory, or demonstrably irrelevant”

to its stated and presumptively legitimate goal of assuring

an adequate supply of rental housing ... but instead

“represents a rational attempt to accommodate the con-

flicting interests of protecting tenants ... while at the

same time ensuring that landlords are guaranteed a fair

return on their investment.”

Gilbert, 932 F.2d at 65-66 (pp. A-26 to 27), quoting Pennell,

485 U.S. at 11. Petitioners’ efforts to suggest that the court of

appeals somehow erred in this analysis need not detain the

Court.

First of all, the issue is not even open for review in this

Court. In addition to its ruling on the merits, the court of ap-

peals also held, Gilbert, 932 F.2d at 66, n.20 (p. A-28) that the

due process claim: were not ripe because there had been no

permit applications, »nd hence no concrete application of the

Ordinance to petitic...«s’ property. That procedural ruling as

to the due process claim is not challenged by petitioners.

Moreover, upon reaching the merits the court of appeals ap-

plied the conventional and correct due process analysis, as

29

illustrated recently in the rent control context by Pennell, and

its decision is clearly correct. Petitioners’ heavy reliance on

Chas. Wolff Packing Co. v. Court of Industrial Relations, 262

U.S. 522 (1923), only demonstrates the emptiness of their

argument. That case held that it was beyond the power of a

state to fix the minimum wages a meatpacking company was

required to pay, on the ground that such regulation interfered

with the employer's, and the employees’, freedom of contract.

Neither that holding, nor the dictum quoted by petitioners

from Munn vy. Illinois, 94 U.S. 113, 126 (1877), with respect to

compelling a business to continue in operation, can be con-

sidered governing due process law. See, e.g., Nebbia, 291 U.S.

at 502.

Moreover, even were it the law, Chas. Wolff would not be

relevant. As pointed out above, the provision of the Ordinance

that affects petitioners is the one that forbids their sale of in-

dividual units. Since they may sell the building as a whole,

however, Ordinance §l(c¢ 2) (p. A-62), it is clear that the

restriction on unit sales does not compel them to remain in any

business against their wiil.'®

'© To the extent that any issue of compelling petitioners to remain in

business could be raised by the Ordinance, it would be by Section

§1(b)(4)(v), which regulates the holding vacant of units. Petitioners are not

aggrieved by that provision, however. They do not assert that they wish to

hold units vacant, and they would not be assisted in their program to convert

to condominiums were they permitted to do so.

ciel

30

Conclusion

For the foregoing reasons, the petition for writ of certiorari

loes not present any question warranting the Court's review,

and the Court should deny the petition

Respectfully submitted,

STEPHEN B. DeuTscH

Counsel of Record

CLAIRE LAPORTE

Fo.tey, Hoac & ELio1

One Post Office Square

30ston, MA 02109

(617) 482-1390

Attorneys for Respondents