Petition for Writ of Certiorari — Long Beach Equities, Inc. v. County of Ventura
Supreme Court brief1992
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FILED
Sl-10%7¢6 BEC 22 I991
No.
IN THE
Supreme Court of the Gnited States
OCTOBER TERM, 1991
LONG BEACH EQUITIES, INC.,
Petitioner,
VS.
COUNTY OF VENTURA, CALIFORNIA, and
CITY OF SIMI VALLEY, CALIFORNIA,
Respondents.
PETITION FOR WRIT OF CERTIORARI
TO THE CALIFORNIA COURT OF APPEAL
SECOND APPELLATE DISTRICT, DIVISION SIX
PETITION FOR WRIT OF CERTIORARI
MICHAEL M. BERGER PAUL R. HAMILTON
of BERGER & NORTON Counsel of Record
A Law Corporation KAREN J. LEE
1620 26th Street of HAMILTON & SAMUELS
Suite 200 South 4000 MacArthur Boulevard
Santa Monica, CA 90404 Suite 5700
(310) 449-1000 Newport Beach, CA 92660
(714) 752-8600
Attorneys for Petitioner
LONG BEACH EQUITIES, INC.
Lawyers Brief Service * Appellate Brief Printers * (213) 383-4457 * (714) 720-1510
—
“ts
QUESTIONS PRESENTED
This case presents questions which are related to, but
in a broader context than, those already accepted for
review in Lucas v. South Carolina Coastal Council, cert.
granted, no. 91-453, PFZ Properties, Inc. v. Rodriguez,
cert. granted, no. 91-122, and Yee v. City of Escondido,
cert. granted, no. 90-1947.
1. Where land use regulations, adopted for an other-
wise proper municipal purpose, leave the owner of 250
acres of vacant land purchased for residential develop-
ment with no economically viable use and no way to
realize distinct, investment-backed, profit expectations,
has a taking occurred which requires compensation
under the Fifth and Fourteenth Amendments to the U.S.
Constitution?
2. Where local government agencies have made it clear
that development of vacant land will not be permitted
during at least the next decade, making it impossible for
the current owner of the property to have any chance
even to recoup its investment because the costs of carry-
ing the vacant land for that long would be prohibitive, is
the dispute “ripe” for litigation?
3. When the reasons proffered by a municipality for
preventing the use of land are devoid of factual support,
has the landowner been denied substantive due process
of law?
ae
PARTIES TO THE PROCEEDING
The parties are listed in the caption. In trial court
pr ceedings, Marr Ranch Associates, owner of neighbor-
ing property, was also a plaintiff.
RULE 29.1 STATEMENT
Long Beach Equities, Inc. is a wholly owned subsidiary
of Long Beach Servfte Corporation, a holding company
of Long Beach Bank, a state savings bank.
- ill -
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED i
PARTIES TO THE PROCEEDING il
TABLE OF AUTHORITIES Viil
OPINIONS BELOW l
JURISDICTION ]
CONSTITUTIONAL AND
STATUTORY PROVISIONS 2
STATEMENT OF THE CASE 2
REASONS FOR GRANTING THE WRIT 4
-ivV-
INTRODUCTION
I. THERE
A.
There is Confusion in the Lower
Courts About the Meaning of
“Economically Viable Use” of
Property
There is Conflict Among Lower
Courts About Whether Trial of
the Facts is Required to Find That
a Regulation “Substantially Ad-
vances a Legitimate State Inter-
est” or Whether that Finding can
be Made as a Matter of Law
There is Confusion in the Lower
Courts About What This Court
Meant by “Reasonable, Invest-
ment-Backed, Profit Expecta-
tions”
IS NO COHERENT RULE
APPLIED IN THF LOWER COURTS
GOVERNING WHAT IT TAKES TO
ESTABLISH A REGULATORY TAKING
Page
11
14
Il.
Ifl.
IV.
THE COURT BELOW CONTINUED
CALIFORNIA’S REFUSAL TO FOLLOW
THIS COURT’S DECISION IN FIRST
ENGLISH WHEN IT HELD THAT THE
GOVERNMENT’S GOOD INTENTIONS
PRECLUDED ANY FINDING OF A
TAKING
A. The Decision Below Conflicts
With Other Decisions of this
Court
B. The Decision Below is Typical of
California Decisions Since 1987
Which Pay No More Than Lip
Service to This Court’s Seminal
Decision in First English
ARBITRARY AND CAPRICIOUS LAND
USE REGULATIONS — UNRELATED
TO THE PURPOSES SUPPOSEDLY
SERVED BY THEM — VIOLATE PROP-
ERTY OWNERS’ SUBSTANTIVE DUE
PROCESS RIGHTS
THERE IS HOPELESS CONFUSION
THROUGHOUT THE COUNTRY ON
WHAT IT TAKES TO “RIPEN” A
REGULATORY TAKING CASE FOR
LITIGATION ON THE MERITS
Page
18
19
20
21
23
° ¥i -
Page
A. There Are No Rational Rules 25
B. There is No Consistency 25
C. The “Rules” Used Below Are So
Rigid That They Make No Sense
and Ensure the Property Owner
Will Lose 26
CONCLUSION 30
APPENDIX A
UNPUBLISHED OPINION, CALIFOR-
NIA COURT OF APPEAL, SECOND
APPELLATE DISTRICT, DIVISION SIX,
FILED MARCH 15, 1991 Al
APPENDIX B
PETITION FOR REHEARING IS
GRANTED, APRIL 12, 1991 Bl
APPENDIX C
OPINION ON REHEARING, CALIFOR-
NIA COURT OF APPEAL, SECOND
APPELLATE DISTRICT, DIVISION SIX,
FILED JUNE 27, 1991 Cl
- Vii -
Page
APPENDIX D
ORDER MODIFYING OPINION AND
DENYING REHEARING, CALIFORNIA
COURT OF APPEAL, SECOND APPEL-
LATE DISTRICT, DIVISION SIX, FILED
JULY 25, 1991 D1
APPENDIX E
PETITION FOR REVIEW _ DENIED,
CALIFORNIA SUPREME COURT,
FILED SEPTEMBER 26, 1991 El
APPENDIX F
JUDGMENT, SUPERIOR COURT OF
VENTURA COUNTY, FILED JUNE 30,
1989 Fl
- Vili -
TABLE OF AUTHORITIES
Page
Cases
Abbott Laboratories v. Gardner (1967)
387 U.S. 136 24
Agins v. City of Tiburon (1980)
447 U.S. 255 8, 10
Andrus v. Allard (1979)
444 U.S. 51 14
Bateson v. Geisse
(9th Cir. 1988) 857 F.2d 1300 22
Columbia Broadcasting System v.
United States (1942)
316 U.S. 407 24
Connolly v. Pension Benefit
Guaranty Corp. (1986)
475 U.S. 211 14
Dames & Moore v. Regan (1981)
453 U.S. 654 19
First English Evangelical Lutheran
Church v. County of
Los Angeles (1987) 4,5,9, 18
482 U.S. 304 19-21, 23-25, 28, 30
Florida Rock Indus., Inc. v. United States
(Fed. Cir. 1986) 791 F.2d 893 17
Glover v. St. Louis-San Francisco
Ry. Co. (1969) 393 U.S. 324 28
- {1% «
Hadacheck v. Sebastian (1915)
239 U.S. 394
Herrington v. County of Sonoma
(9th Cir. 1987) 834 F.2d 1488
Hodel v. Irving (1987)
481 U.S. 704
Hodel v. Virginia Surface Mining &
Reclamation Assn., Inc. (1981)
452 U.S. 264
Hoehne v. County of San Benito
(9th Cir. 1989) 870 F.2d 529
Hornstein v. Barry (D. C. App. 1987)
530 A.2d 1177
Houghton v. Shafer (1968)
392 U.S. 639
Kaiser Aetna v. United States (1979)
444 U.S. 164
Keystone Bituminous Coal Assn. v.
DeBenedictis (1987)
480 U.S. 470
King v. Smith (1968)
392 U.S. 309
Kinzli v. City of Santa Cruz
(9th Cir. 1987) 818 F.2d 1449
Page
9,15
22, 26
4,14
10, 14
25
17
28
10, 14, 19, 26
4, 8, 10, 14
28
29
Page
Kirby Forest Indus., Inc. v.
United States (1984)
467 U.S. 1 10, 14, 15
Lake Nacimiento Ranch Co. v. San
Luis Obispo County
(9th Cir 1987) 841 F.2d 872 10
Loretto v. Teleprompter Manhattan CATV
Corp. (1982) 458 U.S. 419 14, 19
MacDonald, Sommer & Frates v.
County of Yolo (1986)
477 U.S. 340 10, 14, 25, 26
MacLeod v. County of Santa Clara
(9th Cir. 1984) 749 F.2d 541 16
Maryland Casualty Co. v. Pacific Coal &
Oil Co. (1941) 312 U.S. 270 24
McDougal v. County of Imperial
(9th Cir. 1991) 942 F.2d 668 iZ, 13, 14, 21
Nemmers v. City of Dubuque
(8th Cir. 1985) 764 F.2d 502 17
Nollan v. California Coastal 4,5, 9, 10
Commn. (1987) 483 U.S. 825 14, 20, 24, 30
Northern Westchester Professional Park
Associates v. Town of Bedford (1983)
60 N.Y.2d 492, 458 N.E. 2d 809 17
Orion Corp. v. State (1987)
109 Wash. 2d 621 3.47
-xi-
Page
Park Avenue Tower Associates v.
City of New York
(2d Cir. 1984) 746 F.2d 135 16
Penn Central Transp. Co. v. City of
New York (1978) 438 U.S. 104 8-10, 14
Preseault v. ICC (1990)
494 US. 1 19, 25
Prune Yard Shopping Center v. Robins (1980)
447 U.S. 74 14
P.anch 57 v. City of Yuma (1986)
152 Ariz. 218, 731 P 2d 113 17
Regional Rail Reorganization Act Cases (1974)
419 U.S. 102 19
Rossco Holdings, Inc. v. State (1989)
212 Cal.App.3d 642 25
Ruckelshaus v. Monsanto Co. (1984)
“a< 467 U.S. 986 14, 15, 19
San Diego Gas & Elec. Co. v. City of
San Diego (1981) 450 U.S. 621 10, 24, 25
’
Schad v. Borough of Mount Ephraim (1981)
452 U.S. 61. 10
Sinaloa Lake Owners Assn. v.
City of Simi Valley
(9th Cir. 1989) 864 F.2d 1475 22
- Xli -
Page
U.S. v. Security Industrial Bank (1982)
459 US 70 19
United States v. Locke (1985)
471 U.S. 84 14
United States v. Riverside Bayview
Homes (1985) 474 U.S. 121 8, 10, 14
Village of Euclid v. Ambler Realty
Co. (1926) 272 U.S. 365 9,15
Wheeler v. City of Pleasant Grove
(11th Cir. 1987) 833 F.2d 267 17
William C. Haas Co. v. City of San Francisco
(9th Cir. 1979) 605 F.2d 1117 9, 15, 16
Williamson County Reg. Plan. Commn. v.
Hamilton Bank (1985) 5, 8, 10
473 U.S. 172 14, 25, 26, 28
Statutes
28 U.S.C. §1257 2
Constitution
United States Constitution
Fifth Amendment 2, 5, 19-21, 29
Fourteenth Amendment | Pe
- Xili -
Publications
Lawrence, Regulatory Takings: Beyond the
Balancing Test [1988] 20 The Urban
Lawyer 389
Mandelker & Blaesser, Applying the Ripeness
Doctrine in Federal Land Use Litigation,
11 Zoning & Planning Law Report
[July-Aug 1988]
Mandelker, Investment-Backed Expectations:
Is There a Taking? (1987) 31 J. Urb. &
Contemp. L. 3
1988 Zoning and Planning Law Handbook
342 [Gordon, ed., 1988]
Peterson, Land Use Regulatory “Takings”
Revisited: The New Supreme Court
Approaches (1988) 39 Hast. L. J. 335
Stoebuck, Police Power, Takings, and
Due Process, 37 Wash. & Lee L.
Rev. 1057 (1980)
1 N. Williams, American Land Planning
Law
Page
10, 29
ei, 29
8, 10
16
6, 10, 16
a
PETITION FOR WRIT OF CERTIORARI
The Petitioner respectfully prays that a Writ of Certiorari
issue to review a judgment and order of the California Court
of Appeal, Second Appellate District, Division Six.
OPINIONS BELOW
The California Court of Appeal issued its first (unpub-
lished) opinion on March 15, 1991. (App. A) After granting
a rehearing (App. B), the Court of Appeal issued a different
opinion on June 27, 1991. (App. C) That opinion was then
modified on July 25, 1991. (App. D) The final opinion was
published at 231 Cal. App. 3d 1016. The California Supreme
Court denied review by an unpublished order on September
26, 1991. (App. E) The trial court orders reviewed on ap-
peal are unpublished and appear in Appendix F.
JURISDICTION
This case involves a regulatory taking of 250 acres of
-undeveloped land suitable for single family residential devel-
opment which the Respondent County and City have pre-
vented from being used for any viable purpose.
The Petitioner (LBE) sought relief under the Fifth and
Fourteenth Amendments to the U.S. Constitution from the
California Superior Court because the governmental action
had taken their property without compensation, deprived
them of property without due process of law, and denied
them equal protection of the laws. The federal questions
were thus raised at the earliest opportunity and were briefed
and argued in all California courts.
The Superior Court dismissed the case against the County,
but permitted the case against the City to proceed. (App. F)
The Court of Appeal, however, ordered both cases dismissed.
ee
(App. C) The timely Petition for Review was denied by the
California Supreme Court on September 26, 1991. (App. E)
This Court’s jurisdiction is invoked pursuant to 28 U.S.C.
§ 1257.
CONSTITUTIONAL AND STATUTORY PROVISIONS
Fifth Amendment, United States Constitution:
. nor shall private property be taken for public
use, without just compensation.”
Fourteenth Amendment, United States Constitution:
“Section 1.... nor shall any State deprive any
person of life, liberty, or property without due
process of law; ...”
Pertinent provisions of County and City ordinances are
noted in Appendix C.
STATEMENT OF THE CASE
In 1984, LBE purchased a 250 acre parcel of the 2,800
acre Marr Ranch in an unincorporated part of Ventura
County, California, near the City of Simi Valley. That pur-
chase was made only after both the County and the City
assured LBE that both entities believed that the property was
uniquely suited for immediate residential development. Both
General Plans provided for 1730 homes on the entire Marr
Ranch, with 1100 of them on LBE’s property. (CT [Clerk’s
Transcript on appeal] 139, 146, 761, 771-72, 775)
Based on those representations, LBE purchased the prop-
erty and began working with the City (as required by the
County, which anticipated the property would be annexed by
the City) to achieve development. At the City’s request,
LBE prepared a Specific Plan for the entire Marr Ranch (10
times LBE’s acreage) and paid for an EIR for development of
oes
the entire Ranch. The City became the applicant for the
Specific Plan. While the Specific Plan was being processed,
and at the City’s encouragement and request, LBE paid to
have infrustructure being installed in neighboring develop-
ments built to a sufficient capacity to serve 1100 Marr Ranch
homes. When the City modified its grading ordinance, LBE
modified the Specific Plan and proposed a General Plan
amendment to reduce the units on the Marr Ranch property
from 1730 to 1059. (CT 144-47, 765, 767-68 771-72)
Then, abruptly, the City imposed a moratorium on proc-
essing all new projects and stopped processing the Specific
Plan for this property. Thereafter, the City revised its Gen-
eral Plan, reducing the desired number of homes to 325.
LBE again changed course in response to the City’s desires
and prepared a plan for 249 homes. But the City won’t
process that application until LBE prepares a new Specific
Plan for the entire 2800 acre area, not just its own 250 acre
tract. (CT 147-48, 776-77)
City employees told the County Board of Suprervisors
that it would take 8 to 10 years for LBE to complete the
Specific Plan/EIR process now demanded, and then obtain
project approval, and then seek some of the few building
permit allocations now permitted under the City’s “slow
growth” ordinance. (CT 149, 777-78)
Meanwhile the County — in whose jurisdiction the prop-
erty was and remains — has refused to permit development.
While LBE was attempting to deal with the City (as the
County insisted), the County rescinded the applicable part of
its General Plan, imposed an “urban reserve overlay”
(meaning that the property was available only for urban
development), and downzoned the property so drastically
that only 1 home can be built on it. When LBE sought to
process a rational, 249 home project through the County, the
County refused even to provide LBE with an application
form, although it had processed similar applications from
ye
other landowners who were legally indistinguishable. (CT
153-54, 784)!
Frustrated by the administrative run-around described
above, and having been told by the County that it would have
to seek justice somewhere other than from the County (CT
155, 786), LBE filed suit to vindicate its Constitutional
rights. (CT 1)
REASONS FOR GRANTING THE WRIT
INTRODUCTION
Many people believed that, with the decisions this Court
issued in 1987,2 much of the lower court confusion sur-
rounding issues of regulatory taking would disappear. For,
in its 1987 decisions, this Court supplied substantially more
guidance to lower courts than they had possessed before.
Important questions were left unanswered, however, and
commentators from all points of the spectrum have observed
the significance of the issues remaining undecided. State
courts remain frustrated, as this comment by the Supreme
Court of Washington attests:
| Additional facts are discussed as appropriate in this Petition.
Please note that the City and the County — individually and jointly
—— have prevented LBE from using its land. The separate actions of
these 2 entities are important. One of the problems with the Court of
Appeal’s opinion is that it tends to treat both entities as part of a
single development process. They are not. Each is responsible for
its own actions. Each bears individual responsibility here.
2 Including First English Evangelical Lutheran Church v. County
of Los Angeles (1987) 482 U.S. 304; Nollan v. California Coastal
Commn. (1987) 483 U.S. 825; Keystone Bituminous Coal Assn. v.
DeBenedictis (1987) 480 U.S. 470; and Hodel v. Irving (1987) 481
U.S. 704.
mm
“Despite these attempts [i.e., First English, Nollan,
and Keystone], the definitive answers, so necessary
for state courts to make reasoned determinations
concerning minimum federal due process require-
ments, remain unavailable. Our task is compli-
cated further by the ambiguities contained in recent
Supreme Court decisions and by the fact that de-
spite a 3-month separation, recent cases do not cite
each other. As Justice Stevens observed, ‘[e]ven
the wisest lawyers would have to acknowledge
great uncertainty about the scope of [federal
regulatory] takings jurisprudence.’ (Orion Corp.
v. State [1987] 109 Wash. 2d 621, 653; emphasis
added.)
The lower courts have been unable to arrive at any
coherence. Much of the confusion which existed before 1987
continues now, nearly half a decade later.
Thus, in spite of this Court’s earlier efforts to clarify the
law, it remains possible to find regulatory taking decisions to
support virtually any point of view one wishes to espouse.
Guidance from this Court is made all the more necessary
because the core issue in these cases is the meaning of the
Sth Amendment. The interpretation and application of that
Amendment’s protection should not be made to depend on
the State in which a property owner happens to own land.
However, because this Court has held that litigation cannot
be considered by the federal judiciary until after the state
courts have decided whether compensation for a taking will
be made under state law (Williamson County Reg. Plan.
Commn. v. Hamilton Bank [1985] 473 U.S. 172), state courts
3 Illustrative is the litigation which has continued to rage in
California, notwithstanding that this Court pointedly told the
California judiciary that it was not affording to property owners the
protections guaranteed by the Sth Amendment’s Just Compensation
Clause (First English, 482 U.S. at 311; Nollan, 483 U.S. at 839).
~ *
will continue to be the usual locus of decisionmaking in
these cases. It is thus imperative that those 50 local jurisdic-
tions have clear guidelines to follow in applying protection
which derives from the U.S. Constitution and which will
ultimately be measured by adherance to that organic charter.
This case presents the opportunity to end major elements
of uncertainty still facing lower courts. Issues which appear
in most of the cases now being litigated are before the Court
in this Petition:
@ the extent to which a property owner's “dis-
tinct, investment-backed profit expectations”
are protected by the Just Compensation Clause
against regulatory interference;
@ the nature of the allegations which a property
owner needs to plead to establish a prima
facie case of either regulatory taking or sub-
Stantive due process denial; and
@ the scope, meaning, and elements of the re-
quirement that a regulatory taking be “ripe”
before it is eligible for judicial review.
Lower state and Federal courts are in acute disharmony on
how to decide these issues, thus increasing the confusion
among property owners and regulators about their respective
duties and responsibilities. Litigation abounds, without
resolution on the merits and with contradictory results.
Professor Williams put it pungently, but accurately, in his
nationally recognized text:
“If there are no rules specific enough to control
future decisions, then every case is decided accord-
ing to the gastronomic school of jurisprudence;
that is, this is an area where government acts ac-
cording to gut feeling in the individual case, in-
stead of by rule of law.” (1 N. Williams, American
Land Planning Law (rev. ed. 1988] 136; emphasis
added.)
u@ x
The situation in the lower courts is as chaotic as one
would expect from a “gastronomic school of jurisprudence”
operating on “gut feeling in the individual case instead of by
rule of law.” Lack of “ripeness,” for example, is now raised
as a defense in virtually every regulatory taking case. As
happened here, prodigous time, effort, and money are ex-
pended in a chimerical effort to determine whether the case
is “ripe” enough for the court to examine the merits, even
though all parties know the reality that their positions have
hardened to the point of presenting a concrete controversy.
Because the outlines of “ripeness” have no more than Will-
o’-the-wisp substance, treatment of the issue is not consistent
from State to State or Circuit to Circuit.
This case presents the opportunity for this Court to ex-
plain in a comprehensive way how the concepts of “ripe-
ness,” investment-backed expectations, substantive due
process, and the guarantee of the Just Compensation Clause
are supposed to function in the land development context.
Such guidance would be a blessing to all concerned who, at
present, are compelled to litigate cases to the last available
court in order to find an answer. It becomes essential when
the question would be answered differently on the same facts
in a different jurisdiction. At a minimum, this Court's ex-
plication would lessen the burden on the judiciary by letting
the participants in the land use process know precisely what
needs to be done before the attention of the judiciary is
available, and what sorts of controversies are entitled to be
litigated at all.
I. THERE IS NO COHERENT RULE APPLIED
IN THE LOWER COURTS GOVERNING
WHAT IT TAKES TO ESTABLISH A REGU-
LATORY TAKING
In its recent regulatory taking cases, this Court has
indicated that a taking occurs if a regulation deprives a
_ e
property owner of “economically viable use” of his land,*
and that a property owner’s “reasonable, investment-backed,
profit expectations” are protected against confiscation by
state and local government land use regulations.> The prob-
lem is that this Court has neither defined these terms nor
given guidance to lower courts in determining their meaning.
As the 1980's began, a noted commentator lamented:
“In 1978, the Supreme Court, after 91 years of
producing nearly all the leading police power
taking decisions, essentially gave up. Viewing the
facts of Penn Central ... as presenting a question
of police power takings, the Supreme Court an-
nounced that there was no ‘set formula’ to resolve
the question. Rather, said the Court, different fact
patterns require different approaches for solution.”
(Stoebuck, Police Power, Takings, and Due
Process, 37 Wash. & Lee L. Rev. 1057, 1068
[1980}).
Things haven't changed much, as a more recent survey
concluded:
“{T}his area of the law has not been clarified and
the courts continue to generate contradictory opin-
ions utilizing various aspects of the extant ‘for-
mulas,” none of which have garnered anything
approaching a consensus in the view of bench, bar,
and academe.” (/988 Zoning and Planning Law
Handbook 342 [Gordon, ed., 1988]; emphasis
added.)
4 E.g., Agins v. City of Tiburon (1980) 447 U.S. 255, 260; United
States v. Riverside Bayview Homes, Inc. (1985) 474 U.S. 121, 126;
Keystone Bituminous Coal Assn. v. DeBenedictis (1987) 480 U.S.
470, 485.
; E.g., Williamson County Reg. Plan. Commn. v. Hamilton Bank
(1985) 473 U.S. 172; Penn Central Transp. Co. v. City of New York
(1978) 438 U.S. 104.
Se
Thus, lower courts have generally sought to determine
these issues by doing what judges and lawyers are most
comfortable doing: examining the diminutions in value in
earlier cases which were held not to constitute a taking.®
That creates another problem: the older cases were de-
cided before this Court announced either the concept of
“economically viable use” or the concept of “reasonable,
investment-backed, profit expectations,” not to mention the
rules announced or emphasized in First English Evangelical
Lutheran Church v. County of Los Angeles (1987) 482 U.S.
304 and Nollan v. California Coastal Commn. (1987) 483
U.S. 825. Moreover, the decisions of this Court which
appear in this earlier group were either decided at a sig-
nificantly earlier and less complicated time in land econom-
ics and land use control sophistication, or were decided in
the context of pleadings or proof which did not present the
issue of whether the questioned regulation was confiscatory.
Clarification in the context of today’s realities is not only
warranted, it is sorely needed by ail participants in the
process.
A. There is Confusion in the Lower
Courts About the Meaning of “Econo-
mically Viable Use” of Property
Twelve times in the last decade or so, this Court has noted
that, if a regulation deprives a property owner of the
. E.g., Village of Euclid v. Ambler Realty Co. (1926) 272 U.S. 365;
Hadacheck v. Sebastian (1915) 239 U.S. 394; William C. Haas Co.
v. City of San Francisco (9th Cir. 1979) 605 F.2d 1117.
7 Neither concept appears in land use cases in any court before this
Court’s decision in Penn Central Transp. Co. v. City of New York
(1978) 438 U.S. 104, in which they were first enunciated.
= 2
“economically viable use” of his property, a taking has
occurred.
However, in none of those cases did the Court explain
how to determine economic viability. The phrase was simply
stated and then lower courts were left to shift for themselves.
Lower courts have developed no consistent, or even predict-
able, definition.
Commentators are in accord that chaos is the rule. The
following is typical:
“This virtually standardless inquiry has pro-
vided little predictability for property owners, nor
has it served as a reliable guide for government
action.” (Lawrence, Regulatory Takings: Beyond
the Balancing Test [1988] 20 The Urban Lawyer
389, 400; emphasis added.)?
As the 9th Circuit put it, “... the precise meaning of
‘economically viable use’ of land is elusive and has not been
Clarified by the Supreme Court.” (Lake Nacimiento Ranch
Co. v. San Luis Obispo County [9th Cir 1987] 841 F.2d 872,
. Kirby Forest Indus., Inc. v. United States (1984) 467 U.S. 1, 14;
Agins v. City of Tiburon (1980) 447 U.S. 255, 260; Penn Central
Transp. Co. v. City of New York (1978) 438 U.S. 104, 124; Kaiser
Aetna v. United States (1979) 444 U.S. 164, 174 n. 8; San Diego Gas
& Elec. Co. v. City of San Diego (i981) 450 U.S. 621, 653
(dissenting opinion); MacDonald, Sommer & Frates v. County of
Yolo (1986) 477 U.S. 340; Nollan v. California Coastal Commn.
(1987) 483 U.S. 825; Keystone Bituminous Coal Assn. v. DeBenidic-
tis (1987) 480 US 470; United States v. Riverside Bayview Homes
(1985) 474 U.S. 121; Williamson County Regional Planning Commn.
v. Hamilton Bank (1985) 473 U.S. 172; Hodel v. Virginia Surface
Mining & Reclamation Assn., Inc. (1981) 452 U.S. 264; Schad v.
Borough of Mount Ephraim (1981) 452 U.S. 61.
9 For similar assessments, see, e.g., 1988 Zoning and Planning
Law Handbook 14, 342 (Gordon, Ed., 1988); 1 Williams, American
Land Planning Law (1988 Cum. Supp.] 53.
ee
877) In that case, the absence of standards permitted the
court to ignore testimony that each of the supposedly permit-
ted uses of land had no evonomic value to the property
owner.
Here, while acknowledging the “elusive” nature of the
concept of economic viability (App. C, p 19), and acknowl-
edging that the County zoned the property so as to permit
one home on each 160 acres of land (App. C, p 22), the court
below concluded that no taking occurred. Aside from the
erroneous assertion by the court that LBE could have sought
rezoning to 10 acre parcels (App. C, p ) Vi the possibility
and value of available uses is a question of fact, which can-
not be decided on the pleadings.
The confusion extant in the law permits this sort of result.
Clarity from this Court would be reflected in clarity and
consistency below.
B. There is Conflict Among Lower Courts
About Whether Trial of the Facts is
Required to Find That a Regulation
“Substantially Advances a Legitimate
State Interest” or Whether that Find-
ing can be Made as a Matter of Law
As an alternative, the cases cited above hold that a taking
occurs when a land use regulation fails to substantially ad-
vance a legitimate state interest. There is, however, no lower
court agreement on how to make this determination.
The conflict on this issue is starkly apparent when the
California Court of Appeal opinion in this case is set beside
the nearly contemporaneous decision of the 9th Circuit Court
10 It could not. The County refused to process any such
applications.
«%2.
of Appeals in McDougal v. County of Imperial (9th Cir.
1991) 942 F.2d 668. °
In the case at bench, LBE attacked the County and City
ordinances for, among other things, being unnecessary to
accomplish their stated goals of ensuring that sufficient
facilities were available to support additional housing. The
reason for that was that LBE had already seen to it that
adequate infrastructure was available for far more than the
number of homes it sought to build. Thus, LBE sought a
trial at which it would prove that the ordinances being used
to prevent development of its property failed to substantially
advance a legitimate state interest because infrastructure
already existed to support this development.
The California Court of Appeal refused to permit trial.
Rather, it concluded as a matter of law, without any
evidence, that the governmental prohibitions were necessary.
Rather than examining evidence, the California court dealt in
sweeping generalities like this:
“Local government legislation is constitutional
on its face if it bears ‘a substantial relationship to
the public welfare ...’ and inflicts no irreparable
injury on the landowner. [Citation.].. .
“Both County’s Guidelines and City’s Growth
Management Ordinance satisfy this test. The
County enacted the Guidelines to promote efficient
and effective delivery of community services and
to conserve the resources of County by encourag-
ing urban development to occur wihin cities. The
Guidelines emphasize annexation as a means to
accomplish these purposes.” (App. C, p 11)
In sharp contrast, the 9th Circuit's McDougal opinion
holds that such decisions must be based on a critical exami-
nation of evidence and cannot be made as a matter of law on
a motion to dismiss (the functional equivalent of the demur-
rer rulings in this state court proceeding):
» t%
“The district court held that the McDougals ‘failed
to establish that the County’s actions do not sub-
Stantially advance a legitimate state interest.’
However, they have no obligation to ‘establish’ the
illegitimacy of the County’s motivations on a
motion to dismiss. Likewise, the McDougals
allege that the requirements for a conditional use
permit and a verified ground water model were
impossible to satisfy and did not relate to legiti-
mate concerns of the County, but the district
court’s order gives no consideration to these
charges.
“The legitimacy of the public interest involved,
how much it is furthered by the regulatory actions
at issue, the extent of the public benefit obtained or
expected, and the degree that the McDougals’
property rights and reasonable investment-backed
expectations have been impaired are all factors
which lie at the heart of the takings inquiry. These
things typically cannot be assessed properly with-
out a factual inquiry. ([Citation.]” (942 F.2d at
679-680; emphasis added.)
The decision in the case at bench and McDougal CAN-
NOT both be correct. Either a factual inquiry is needed or
the issue is one of law. This stark conflict is endemic to this
field of the law. Anarchy will continue to reign, with courts
randomly choosing whichever approach will best serve their
desires of the moment, until this Court ends the conflict and
confusion.
oe
C. There is Confusion in the Lower
Courts About What This Court Meant
by “Reasonable, Investment-Backed,
Profit Expectations”
Sixteen times in the last decade or so, this Court has noted
that the question of whether a regulation effects a taking of
private property for public use must be analyzed in terms of
the impact of the regulation on the property owner’s
“reasonable [or distinct] investment-backed expectations.”
In three of those decisions which involved land use regula-
tions, this Court considered the concept of profit or reason-
able return on investment. !
However, in none of those cases, did this Court explain
how the impact on a property owner’s profit expectations was
to be considered. It was simply said, and then left un-
elaborated. As a result, lower courts — as well as all par-
ticipants in the land use process — have little guidance.
While they have been told that the expectation must be more
11 Penn Central Transp. Co. v. City of New York (1978) 438 U.S.
104; Andrus v. Allard (1979) 444 U.S. 51; Kaiser Aetna v. United
States (1979) 444 U.S. 164; PruneYard Shopping Center v. Robins
(1980) 447 U.S. 74; Hodel v. Virginia Surface Min. & Recl. Assn.
(1981) 452 U.S. 264; Loretto v. Teleprompter Manhattan CATV
Corp. (1982) 458 U.S. 419; Kirby Forest Indus., Inc. v. United
States (1984) 467 U.S. 1; Ruckelshaus v. Monsanto Co. (1984) 467
U.S. 986; United States v. Locke (1985) 471 U.S. 84; Williamson
County Reg. Plan. Commn. v. Hamilton Bank (1985) 473 U.S. 172;
United States v. Riverside Bayview Homes, Inc. (1985) 474 U.S.
121; Connolly v. Pension Benefit Guaranty Corp. (1986) 475 U.S.
211; MacDonald, Sommer & Frates v. County of Yolo (1986) 477
U.S. 340; Keystone Bituminous Coal Assn. v. DeBenedictis (1987)
480 U.S. 470; Hodel v. Irving (1987) 481 U.S. 704; Nollan v.
California Coastal Commn. (1987) 483 U.S. 825.
12 Penn Central, 438 U.S. at 136; Williamson County, 473 U.S. at
200; Keystone, 480 U.S. at 496, 501.
« 48.
than a “... unilateral expectation or an abstract need ...”
(Ruckelshaus v. Monsanto Co. [1984] 467 U.S. 986, 1005)
and that the concept has its basis in ideas of “.. . justice and
fairness ...” (Kirby Forest Indus., Inc. v. United States
[1984] 467 U.S. 1, 14), this Court has given little more.
The Court has not yet taken the opportunity either to
reconcile its general formulation of “reasonable, investment-
backed expectations” with earlier cases emanating either
from the Court itself or from influential lower courts or to
overrule any of the earlier cases. It is time for the Court to
let the citizens of this country know whether it is serious
about its protection against regulatory takings and, if so, how
that protection is to be achieved.
For example, in Village of Euclid v. Ambler Realty Co.
(1926) 272 U.S. 365, the regulation diminished the value of
the property by 75%. In Hadacheck v. Sebastian (1915) 239
U.S. 394, the regulation diminished the value of the property
by 88%. And in what may be the most eggregious example,
the regulation in William C. Haas Co. v. City of San Fran-
cisco (9th Cir. 1979) 605 F.2d 1117, diminished the value of
the property by 95%. No taking was found in any of these
cases. Both Euclid and Hadacheck were decided before this
Court’s series of cases during the last decade introduced the
“expectations” test. Haas never discusses the test. Nonethe-
less, each of the older cases is now cited by lower courts to
demonstrate that regulations far more onerous than the one
being litigated have been upheld. (See, e.g., App. C, pp
19-22, 25.)
But can these earlier cases be so routinely relied on to
determine if there has been a taking? What light is shed on
the older cases’ validity by the more recent decisions of this
Court? Can the older cases continue to be uncritically used
as benchmarks for how far regulation may diminish property
without compensation? How does leaving the property
owner with 5% of the value of his land (or 12%, or even
25%) comport with “reasonable, investment-backed, profit
a”
expectations” or “economically viable use?” When that
question is posed to a lay audience, the universal response is
either groans or nervous laughter.
As a consequence, commentators agree that there is no
standard which the lower courts believe they can apply. The
result is total unpredictability:
“Investment Backed Expectations.’ This is an-
other phrase which has recently been adopted and
repeated widely. Again, it is difficult to know what
to make of it... The state courts have struggled
for a long time over the same question... Close
analysis of these cases indicates that there is no
consensus in the vast body of state law on this
point; it is an area of almost pure gut juris-
prudence.” (1 Williams, American Land Planning
Law [1988 Cum. Supp.] 54-55; emphasis added.)!3
Neither regulators nor property owners are able to predict
with any degree of confidence the outcome in a specific case.
Thus, numerous cases are litigated which might otherwise be
resolved short of the courthouse. Fundamental Constitu-
tional protections deserve more identifiable road signs than
that.
Notwithstanding this Court’s repeated employment of the
“profit expectations” concept, however, lower courts are in
conflict on whether even to accept the notion of profitability
as a factor to consider in determining whether a taking has
occurred. The Second Circuit and the Ninth Circuit have
flagrantly flaunted their rejection of the idea,!* while the
13 For similar reactions, see, e.g., Mandelker, /nvestment-Backed
Expectations: Is There a Taking? (1987) 31 J. Urb. & Contemp. L.
3; Peterson, Land Use Regulatory “Takings” Revisited: The New
Supreme Court Approaches (1988) 39 Hast. L. J. 335, 345.
si E.g., Park Avenue Tower Associates v. City of New York (2d
Cir. 1984) 746 F.2d 135; William C. Haas Co. v. City of San
Francisco (9th Cir. 1979) 605 F.2d 1117; MacLeod v. County of
Santa Clara (9th Cir. 1984) 749 F.2d 541.
Eighth Circuit, the Eleventh Circuit, the Federal Circuit, and
the highest courts of New York, Washington, Arizona, and
the District of Columbia have expressed a willingness to
determine from the evidence -whether the uses permitted
by the regulation permit the owner to obtain a reasonable
return.
Here, the Court of Appeal acknowledged the “consi-
derable controversy” over whether to examine profit expecta-
tions (App. C, p 23), but concluded — again, as a matter of
law, without evidence — that LBE could not even raise the
issue (App. C, pp 24-25).
The question is: what needs to be alleged? LBE alleged
facts showing that it had worked long and hard with both the
County and the City to develop plans which were acceptable
to the regulators, received assurances from the regulators
that the project was acceptable, and then — after the expen-
diture of millions of dollars in reliance — the regulators
decided to preclude development. LBE seeks only the
chance to present its case to a trier of fact. Those facts show
sufficient interference to warrant trial.
15 E.g., Florida Rock Indus., Inc. v. United States (Fed. Cir. 1986)
791 F.2d 893; Northern Westchester Professional Park Associates v.
Town of Bedford (1983) 60 N. Y. 2d 492, 458 N.E. 2d 809; Orion
Corp. v. State (1987) 109 Wash. 2d 621, 642 (“present, possible, and
reasonably profitable use”); Ranch 57 v. City of Yuma (1986) 152
Ariz. 218, 731 P 2d 113 (“reasonable return on the property”);
Hornstein v. Barry (D. C. App. 1987) 530 A.2d 1177 (“reasonable
financial return”); Wheeler v. City of Pleasant Grove (11th Cir.
1987) 833 F.2d 267, 271 (“... the landowner’s loss takes the form
of an injury to the property’s potential for producing income or an
expected profit”); Nemmers v. City of Dubuque (8th Cir. 1985) 764
F.2d 502, 504-05 (reasonable return on the difference in value with
and without the offending regulation).
II.
<-'.
THE COURT BELOW CONTINUED CALIF-
ORNIA’S REFUSAL TO FOLLOW THIS
COURT’S DECISION IN FIRST ENGLISH
WHEN IT HELD THAT THE GOVERN-
MENT’S GOOD INTENTIONS PRECLUDED
ANY FINDING OF A TAKING
What happened in the Court of Appeal seems evident: the
Court of Appeal agreed with the goals announced by the City
and the County and, as a consequence, failed to subject those
governmental assertions to any scrutiny at all (in sharp con-
trast to McDougal, discussed above), and then went so far as
to hold that LBE could be wiped out financially without
recourse so long as the governmental intentions were per-
ceived to be legitimate. There is no mistaking the Court of
Appeal’s theory. These are its own words:
“Where the public benefits greatly, it is constitu-
tional to restrict the use of one’s land. [Citation.]
In some cases, no compensation may be required
even if almost all uses are taken. [Citation.]” (App
C, p 10; emphasis added.)
“No taking results when a partial moratorium
measure is enacted to protect the public health,
safety or morals. ([Citation.]” (App C, p 19; em-
phasis added.)
That theory is utterly at odds with this Court’s First
English decision, in which it was plainly stated that:
“This basic understanding of the [Fifth] Amend-
ment makes clear that it is designed not to limit the
governmental interference with property rights per
se, but rather to secure compensation in the event
of otherwise proper interference amounting to a
taking.” (482 U.S. at 314-315; emphasis added.)
The decision below is also in direct conflict with the 9th
Circuit’s McDougal decision which says:
2
“We cannot agree that any legitimate purpose
automatically trumps the deprivation of all eco-
nomically viable use, such that whenever a regula-
tion has a health or safety purpose, no compensa-
tion is ever required even if the land owner is
thereby denied all use of his property.
* *
“To hold that a legitimate public interest alone
precludes a taking without regard to the degree of
private deprivation turns the Court’s balancing of
interests into a bright-line test for which there is no
precedent. The Court’s own disclaimers make this
clear. [Citations.]” (942 F.2d at 676, 677)
A. The Decision Below Conflicts With
Other Decisions of this Court
This Court has consistently held that good governmental
intentions cannot be accomplished in defiance of the Fifth
Amendment. First English was express on the subject. (482
U.S. at 321) That is also the clear import of cases like
Kaiser Aetna v. U.S. (1979) 444 US 164, U.S. v. Security
Industrial Bank (1982) 459 US 70, and Loretto.!© In each
of them this Court concluded that properly motivated
governmental goals could be accomplished only in com-
pliance with the Fifth Amendment.
In a similar vein, of course, are cases such as Preseault v.
ICC (1990) 494 U.S. 1, Ruckelshaus v. Monstanto Co. (1984)
467 U.S. 986, Dames & Moore v. Regan (1981) 453 U.S.
654, and the Regional Rail Reorganization Act Cases (1974)
419 U.S. 102. In each of them, this Court was faced with the
6 Involving, respectively, public access to a private marina,
retroactive application of bankruptcy legislation, and cable TV
access to apartment buildings.
- 6.
claim that Congress, in pursuit of legitimate goals,!” had
taken private property in violation of the Fifth Amendment.
In each, this Court directed the property owners to the U.S.
Claims Court to determine whether these legitimate exercises
of legislative power required compensation.
The decision below elevates good intentions above the
Constitution. That, it cannot do.
B. The Decision Below is Typical of
California Decisions Since 1987 Which
Pay No More Than Lip Service to This
Court’s Seminal Decision in First
English
In 1987, this Court bluntly told the California courts that
they were out of step with this Court's interpretation of the
Just Compensation Clause and with most of the rest of the
country, as well:
As this Court put it in First English:
“{Tjhe California courts have decided the compen-
sation question inconsistently with the require-
ments of the Fifth Amendment.” (482 U.S. at 311)
Two weeks later, the Court decided Nollan. There, stri’:-
ing down as “extortion” (483 U.S. at 837) a standard Califor-
nia Coastal Commission permit condition (repeatedly applied
and judicially approved in Califomia), this Court said:
“Our conclusion on this point is consistent with the
approach taken by every other court that has consid-
ered the question, with the exception of the Califor-
nia state courts.” (483 U.S. at 839)
7 Respectively, the preservation of rail transportation corridors,
the registration of pesticides, the aftermath of the Iranian hostage
crisis, and the provision of rail service to the Northeast United
States.
<iha
One would have thought that double-barrelled message
would have been clear and that the California judiciary
would have responded by providing the protection demanded
by this Court and the Constitution. Everyone who thought
that has been disappointed. The California courts have
continued as though it were “business as usual,” apparently
counting on this Court's limited capacity to review state
court judgments to insulate their continued scofflaw modus
operandi from review.
The blunt fact, however, is that the California Courts of
Appeal have refused to follow this Court’s decision in First
English. (The California Supreme Court has declined to
review any regulatory taking cases since First English.) This
began with the remand of First English itself, as recently
noted by the 9th Circuit Court of Appeals, which said that it
did “not believe” that the California court’s decision on the
First English remand was based on “an accurate description
of the Chief Justice’s opinion... .” (McDougal, 942 F.2d at
679) That California attitude continues through cases like
the one at bench. The analysis in this case makes it clear
that the California judiciary remains unwilling to acknowl-
edge that government regulation can run afoul of the Fifth
Amendment. The facts alleged here are outrageous. Yet the
California courts refused even to permit the matter to go to
trial. It is time to return the law of Califc nia to that of the
rest of the Union.
III. ARBITRARY AND CAPRICIOUS LAND USE
REGULATIONS — UNRELATED TO THE
PURPOSES SUPPOSEDLY SERVED BY THEM
— VIOLATE PROPERTY OWNERS’ SUB-
STANTIVE DUE PROCESS RIGHTS
The Ninth Circuit recently summarized the rules relating
to actions alleging deprivation of substantive due process:
4.
“We have recognized that the due process clause
includes a substantive component which guards
against arbitrary and capricious government action,
even when the decision to take that action is made
through procedures that are in themselves constitu-
tionally adequate. [Citation.]” (Sinaloa Lake
Owners Assn. v. City of Simi Valley (9th Cir. 1989]
864 F.2d 1475, 1483)
The reason for this type of protection is to guard against
the human tendency to overreach:
“(GJjovernmental power is a double-edged sword; if
wielded in an abusive, irrational or malicious
fashion it can cause grave harm. ([Citation.]”
(Sinaloa, 864 F.2d at 1484)
See also Bateson v. Geisse (9th Cir. 1988) 857 F.2d 1300,
1303 (judgment finding substantive due process violation
was affirmed because “... the interference with property
rights was irrational or arbitrary”) and Herrington v. County
of Sonoma (9th Cir. 1987) 834 F.2d 1488, 1501, amended in
other respects, 857 F.2d 567 (judgment finding substantive
due process violation was affirmed because the County’s
action “. . . was irrational or arbitrary”).
To determine whether a substantive due process violation
has occurred, a factual inquiry — resulting in a balancing
process —— must be performed:
“(ijn determining whether the constitutional line
has been crossed, a court must look to such factors
as the need for the [governmental action], the
relationship between the need and the [action
taken], the extent of [damage] inflicted, and
whether [the action was taken] in a good faith
effort ... or maliciously ... for the very purpose
of causing harm.” (Sinaloa, 864 F.2d at 1486;
brackets, the Court’s.)
-%.
Here, the complaint plainly alleges that there was no
rational justification for preventing development of LBE’s
property. LBE had cooperated with both the County and the
City in planning the development of the entire area of which
its property was a small part, had contributed money toward
the construction of oversized utilities through neighboring
properties in order to service the expected development of its
own property, and purchased the property only after being
assured that its development concepts were compatible with
those of the County and City. The complaint alleges that
there were adequate facilities to service the LBE develop-
ment without burdening either the County of the City. Thus,
refusal to permit development was irrational, arbitrary, and
capricious. Enough was alleged to merit trial.
IV. THERE IS HOPELESS CONFUSION
THROUGHOUT THE COUNTRY ON WHAT
IT TAKES TO “RIPEN” A REGULATORY
TAKING CASE FOR LITIGATION ON THE
MERITS
“Ripeness” in land use litigation does not seem to be a
concept whose full ramifications have been carefully consid-
ered by this Court. Rather, in the course of not deciding the
compensation issue in cases which preceeded First English
during the 1980s, this Court concluded that the facts of the
cases before it were, for one reason or another, not suffi-
ciently well-developed to form the basis for such a
conclusion.
The rules were plainly developed in an ad hoc way, and
seem intended to be applied in later cases in a similar ad hoc
way, depending on the circumstances of those later cases.
However, as illustrated by the case at bench, some lower
courts — feeling more comfortable applying rules mechani-
cally — are treating this Court’s ad hoc determinations as
though they were carved on stone tablets and not to be
a Sto
varied. Because of the rapid proliferation of “ripeness”
decisions in the lower courts, this Court’s guidance is needed
to explain the flexible nature of the investigation required by
the “ripeness” concept. In other fields of law, for example,
the Court has not discussed “ripeness” in the rigid manner
which appears in the land use field. Rather, it has said that
the concept must be applied in a “... pragmatic way ...”
(Abbott Laboratories v. Gardner [1967] 387 U.S. 136, 149)
For example, in Columbia Broadcasting System v. United
States (1942) 316 U.S. 407, a case involving an FCC rule
which had not yet been applied to any broadcaster, the Court
found a dispute which was ripe for decision:
“Such regulations have the force of law before
their sanctions are invoked as well as after. When,
as here, they are promulgated by order of the
Commission and the expected conformity to them
Causes injury cognizable by a court of equity, they
are appropriately the subject of attack ...” (316
U.S. at 418-19; emphasis added.)
See also Maryland Casualty Co. v. Pacific Coal & Oil Co.
(1941) 312 U.S. 270, 273:
“Basically, the question in each case is whether the
facts alleged, under all the circumstances, show
that there is a substantial controversy, between
parties having adverse legal interests, of sufficient
immediacy and reality to warrant the issuance of a
declaratory judgment.”
That description, setting aside municipal game-playing,!®
aptly describes most land use controversies which reach
litigation.
18 See San Diego Gas & Elec. Co. v. City of San Diego (1981) 450
U.S. 621, 655-656, fn. 22 [Brennan, J., dissenting]; Nollan, 483 U.S.
at 841; First English, 482 U.S. at 321.
2
A. There Are No Rational Rules
The absence of rational rules is evigent merely by examin-
ing the land use/ripeness decisions rendered by this Court.
The one thing which emerges is that not even the Justices of
this Court can confidently say that they know when a land
use case is sufficiently ripe.
In San Diego Gas, for example, the issues were held not
ripe —— by a vote of 5-4. Williamson County went 6-3
against ripeness. MacDonald, Sommer & Frates was a 5-4
decision against ripeness. First English was held ripe, 6-3.
Thus, in four recent cases, the Justices of this Court cast
17 votes for ripeness and 19 votes against ripeness. When
even the Justices of this Court have that much trouble agree-
ing on the ripeness of any particular case, it seems fair to
conclude that there are no clear rules operating.
B. There is No Consistency
Nor i. there any consistency.
For example, in Preseault v. ICC (1990) 494 U.S. 1, this
Court held that an action challenging the constitutionality of
legislation could not be ripe until after the property owner
sought compensation for the legislation’s impact. In stark
contrast, California’s courts hold that an inverse condemna-
tion action seeking compensation cannot be ripe until after
the property owner challenges the constitutionality of the
legislation. (E.g., Rossco Holdings, Inc. v. State [1989] 212
Cal. App. 3d 642.)
In the case at bench, the California Court of Appeal held
that “informal” presentations of development proposals could
not suffice to ripen a controversy, while a panel of the 9th
Circuit has held to the contrary. (Compare App. C, pp 14-15
with Hoehne v. County of San Benito (9th Cir. 1989] 870
F.2d 529.)
. ©
In the case at bench, the California Court of Appeal held
that a variance must be applied for to ripen a controversy,
while a panel of the 9th Circuit has held to the contrary.
(Compare App. C, pp 16-17 with Herrington v. County of
Sonoma [9th Cir. 1987] 834 F.2d 1488, 1496.)
The vagueness of the requirements of the ripeness require-
ment in land use cases results in random and inconsistent
treatment of parties who are otherwise similarly situated. A
more unjust result is hard to picture.
C. The “Rules” Used Below Are So Rigid
That They Make No Sense and Ensure
the Property Owner Will Lose
The rigidity with which the California court believed this
Court required the ripeness “rules” in Williamson County
and MacDonald, Sommer & Frates v. County of Yolo (1986)
477 U.S. 340 to be applied is expressed in the opinion:
“The developer must establish that it has submit-
ted at least one meaningful application for a devel-
opment project which has been thoroughly
rejected, and that it has prosecuted at least one
meaningful application for a zoning variance, or
something similar, which has been finally denied.
[Citations.]” (App. C, pp 20-21; emphasis added.)
Thus, the Court below categorically refused to examine
the facts on the ad hoc basis which this Court has repeatedly
required. (See, e.g., Kaiser Aetna v. U.S. [1979] 444 U.S.
164, 175; Penn Central, 438 U.S. at 124.) Instead, the opin-
ion insists that all cases must be forced into an immutable
template of first applying for a development permit and then
applying for a variance before it will consider a case “ripe”
for judicial review.
The problem is that the opinion below takes a test de-
signed for the “ad hoc” factual examination of Williamson
*.
County and rotely applies it to all factual contexts. The
inappropriateness of doing that at bench demonstrates the
need for this Court to tell lower courts unequivocally that
there is no set formula for ripeness, but rather an ad hoc
examination of the facts of the particular case in light of its
peculiar circumstances.
Here, for example, the property owner was faced by two
different agencies. The County, which had actual, legal
charge over regulation of this property, refused to do any-
thing, abdicating in favor of the City. The City, after much
planning and replanning, refused to complete the processing
of preliminary planning work needed to permit development.
The County also refused to approve any planning and zoning
changes which would permit development. Both entities
made it clear that development was precluded. No purpose
would have been served by jumping through additional theo-
retical hoops for the sole purpose of “ripening” a case for
litigation, as opposed to actually seeking to develop prop-
erty. What could be more final than statements between
governmental decision makers that no approval would be
given and that LBE should seek its resolution in court? LBE
does not believe this Court intended its ripeness rules to be
applied solely as academic exercises, when there is no realis-
tic hope that further action will result in development
permission.
In this field, lower courts have even had trouble agreeing
on how to determine when it is “futile” for a property owner
to continue with fruitless applications:
“The lower federal court attempts to wrestle with
the meaning of ‘futility’ have led to a bewildering
set of judicial statements.” (Mandelker & Blaesser,
Applying the Ripeness Doctrine in Federal Land
Use Litigation, 11 Zoning & Planning Law Report
. 6.
[July-Aug 1988] 49, 53; emphasis added.)!?
In First English, this Court demonstrated the flexibility
intended for the “ripeness” concept which, here, the court
below ignored. In First English, suit was filed one month
after the regulation was adopted —— without any application
for a permit or variance — because the regulation permitted
no economically viable use. The County attempted to have
this Court dismiss the appeal because of this supposedly
“unripe” condition. This Court refused to do so, and dealt
with the substantive issue presented.
Thus, where it is clearly alleged?° that the regulation
denies all economically viable use — in contrast to situa-
tions like Williamson County, where the issue was the type of
development, not whether there could be any reasonable
development — First English indicates that a case is ripe for
adjudication without more, because the regulator's final
answer is certain.
Two commentators recently surveyed the field and con-
cluded that there is little rhyme or reason to the application
of the ripeness concept. Not only did they find differences
from one court to another, they found inconsistent results
even within the single court which has treated the issue most
19 In fields other than land use, this Court has had no trouble
recognizing futility and excusing parties from engaging in it as a
prelude to litigation. (See, e.g., Glover v. St. Louis-San Francisco
Ry. Co. [1969] 393 U.S. 324, 330-331 [discrimination by labor union
against its members]; Houghton v. Shafer [1968] 392 U.S. 639, 640
[denying law book use to prison inmate]; King v. Smith [1968] 392
U.S. 309, 312, fn. 4 [denial of AFDC benefits].) In each case, there
was an available administrative avenue which, if pursued, theoreti-
cally could have yielded the relief sought. This Court lost no time in
explaining that there was no requirement to seek theoretically
available, but pragmatically futile, relief before filing suit.
20 Please recall that, like First English, this is a pleading case in
which no factual inquiry has yet been made by any court. All that is
before this Court is the factual allegations in the pleadings.
. 2
often. That sort of confusing result cries out for this Court’s
intervention:
“The ‘finality’ requirement has been the most
troublesome for the lower federal courts to apply.
Some judges have openly admitted their difficulty
in determining ‘when enough is enough’ under this
requirement. [Citations.]
“The Court of Appeals for the Ninth Circuit has
had the most opportunities to refine this first prong
of the ripeness doctrine. But its decisions have not
yet yielded any predictable approach for plaintiff
property owners.” (Mandelker & Blaesser, Apply-
ing the Ripeness Doctrine in Federal Land Use
Litigation 11 Zoning & Planning Law Report
[July-Aug. 1988] 49, 53; emphasis added.)7!
The reality of the confusion spawned by the ripeness
“rules” is that the odds overwhelmingly favor the govern-
ment. As one government lawyer expressed it, “{lJike the
vagueness of the three-factor analysis [for determining what
is a taking], this [ripeness] requirement has _ historically
worked to the advantage of government regulators.”
(Lawrence, Regulatory Takings: Beyond the Balancing Test
[1988] 20 The Urban Lawyer 389, 400 fn. 71) The playing
field needs to be levelled in order to satisfy the Fifth Amend-
ment protection guaranteed property owners.
21 The 9th Circuit’s confusion about “futility” has led it to go so
far as to hold that, in order for a property owner to prove that it
would be futile to apply for a permit, the property owner must
actually apply and be turned down! (Kinzli v. City of Santa Cruz
(9th Cir. 1987] 818 F.2d 1449, 1454)
~ wh
CONCLUSION
In First English and Nollan, this Court declared that the
rights of property owners are to be protected by the judiciary
against the “... cleverness and imagination ...” of
governmental word games (Nollan, 483 U.S. at 841), even if
that “... lessen[s] to some extent the freedom and flexibility
of land use planners and governing bodies of municipal
corporations ...” (First English, 482 U.S. at 321). In the
process, this Court recognized a meaningful, compensatory
remedy for regulatory takings.
However, if there is no way to get a regulatory taking case
to trial, the remedy is unavailable. If this Court is as serious
about Constitutional protection for private property owners
as its 1987 decisions indicate and the recent grants of Cer-
tiorari in Yee, PFZ, and Lucas appear to reinforce, further
explication is needed. Your message is not being heard by
many lower courts.
Petitioner prays that Certiorari be granted.
Dated: December 23, 1991.
Respectfully submitted,
PAUL R. HAMILTON
Counsel of Record
and
KAREN J. LEE
of HAMILTON & SAMUELS
MICHAEL M. BERGER
of BERGER & NORTON
Attorneys for Petitioner
LONG BEACH EQUITIES, INC.
Sa path RAMA Ter
EXHIBIT A
of, 40
NOT TO BE PUBLISHED
IN THE COURT OF APPEAL
OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
COURT OF APPEAL-SECOND DIST.
FILED
MAR 15 1991
ROBERT N. WILSON, Clerk
Deputy Clerk
LONG BEACH EQUITIES, INC., etc.,
Plaintiff and Appellant,
v.
COUNTY OF VENTURA, et al.,
Defendants and Respondents.
2d Civil No. B045047
(Super. Ct. No. 103364)
(Ventura County)
THE CITY OF SIMI VALLEY, et al.,
Petitioners,
Vv.
SUPERIOR COURT OF THE
COUNTY OF VENTURA,
Respondent.
LONG BEACH EQUITIES, INC., et al.,
Real Parties in Interest.
No. B046558
hh os
Long Beach Equities, Inc. (LBE) desires to build 249
single-family residences on a 250-acre parcel of land it
owns adjacent to the City of Simi Valley (City). LBE
contends that land use regulations of the County of
Ventura (County) and City, on their face and as applied,
will so greatly delay its development plans as to render
them economically infeasible.
We hold that this suit is not ripe for adjudication. We
affirm the ivdgment for County and grant City’s petition
for issuance of a writ of mandate to compel the trial
court to enter an order sustaining City’s demurrer with-
out leave to amend.
LBE sued these entities seeking damages for inverse
condemnation, among other things.’ The trial court
sustained County’s demurrer to LBE’s first amended
complaint without leave to amend. LBE moved for
reconsideration and proffered a second amended com-
plaint. The court denied the motion and sustained City’s
demurrer without leave as to several counts, but over-
ruled that demurrer on counts for inverse condemnation,
denial of due process and declaratory and injunctive
relief.
LBE appealed the judgment entered on County’s
demurrer and the ruling rendered on its motion for
reconsideration. City filed a petition for a writ of man-
date to compel the trial court to vacate its order overrul-
ing the demurrer. We have consolidated these actions on
appeal in the interest of judicial economy and to aid in
the resolution of this lawsuit. (Omaha Indemnity Co. v.
Superior Court (1989) 209 Cal.App.3d 1266, 1272; see 9
: Complainant Marr Ranch Associates is not a party to this appeal.
Also, LBE has sued the County Board of Supervisors, the Ventura
Planning Commission and the Simi Valley City Council. We shall
refer to all County and City defendants as County and City,
respectively.
i: Se
Witkin, Cal. Procedure (3d ed. 1985) Appeal, § 62,
pp. 86-87, § 64, pp. 88-89, § 65, pp. 89-90.)
STANDARDS OF REVIEW
LBE has the burden to prove that the trial court
abused its discretion in sustaining County’s demurrer
without leave to amend. (Goodman v. Kennedy (1976)
18 Cal.3d 335, 349.) The City has the burden to show
that the trial court’s order is erroneous as a matter of law
and that it will suffer harm which cannot be corrected on
further appeal. (Omaha Indemnity Co. v. Superior
Court, supra, 209 Cal.App.3d at pp. 1273-1274.)
We must construe the allegations of LBE’s complaint
liberally to attain substantial justice among the parties.
(Code Civ. Proc., § 452.) We deem true all material and
properly pleaded facts. (Pan Pacific Properties, Inc. v.
County of Santa Cruz (1978) 81 Cal.App.3d 244, 251.)
We also shall consider all the matters which have been
determined by the trial court as appropriate for judicial
notice. (Code Civ. Proc., § 430.30; First English Evan-
gelical Lutheran Church v. County of Los Angeles
(1989) 210 Cal.App.3d 1353, 1368.)?
We cannot consider, however, conclusions of fact or
law, Opinions or speculation and allegations which are
contrary either to law or to the judicially-noticed facts.
(See Pan Pacific Properties, Inc. v. County of Santa
Cruz, supra, 81 Cal.App.3d at pp. 251, 255, fn. 2; Agins
v. Tiburon (1980) 447 U.S. 255, 259, fn. 6.)
2 Tie California Court of Appeal heard First English Evangelical
Lutheran Church v. County of Los Angeles, supra, 210 Cal.App.3d
1353 (hereinafter cited as First English i]) on remand from the
Unites States Supreme Court in First Lutheran Church v. Los
Angeles County (1987) 482 U.S. 304 (hereinafter cited as First
English I).
-A 4-
BACKGROUND
On June 25, 1969, the Ventura County Planning
Commission adopted Guidelines for Orderly Urban
Development (Guidelines). The Guidelines were
adopted to assure the “efficient provision of urban
services and sound urban land use planning” and to
avoid “the problems and costs associated with urban
sprawl” through coordinated planning with other local
government entities.
The Guidelines provide policies, standards and
criteria to evaluate applications for zone changes from
rural to urban land use classifications and for “related
land use development matters.”
The Guidelines provide that urban growth of develop-
ing communities in Ventura County should proceed in a
compact and logically expanding form which includes
satisfactory permanent open space areas. Proposed
development should be functionally linked to the agen-
cies providing public services in the area for efficiency
and accessibility of community facilities, utilities and
services, employment centers and cultural opportunities.
Those areas served by the facilities and utilities of a
city should be located within the limits of that city;
urban development should be required to locate within
cities, and proposed developments at the fringe of
existing developed areas should be examined for their
impact on the costs of governmental services and antici-
pated revenue.
The stages of development contained in the Ventura
County General Plan, in their present form and as re-
vised later, are to be utilized to evaluate development
proposals and government actions which spur urban-
ization.
at Se
A revision of the Guidelines in 1976 emphasized that
urban development should occur within incorporated
cities. Applicants for development within a city’s sphere
of influence were directed to apply to the appropriate
city, instead of the county. Annexation of unincorpo-
rated properties was encouraged to ensure that urban
services are provided by municipalities rather than by
county service areas.
As of 1980, City’s General Plan designated the
subject area for residential development of a maximum
of 1,100 units and for a shopping center.
On September 15, 1981, County’s Open Space Plan
designated the area of the subject property as open
space. This designation generally allows for minimum
lot sizes of 10 acres. County also adopted City’s Gen-
eral Plan as the Simi Valley Area Plan (the SVAP)
portion of the County’s General Plan. The County’s
plan shows an “Urban Reserve overlay” for the area of
the property. This overlay contemplates residential
development, but it encourages developers to deal
directly with the appropriate city to proceed.
LBE alleges that in adopting the SVAP, the County
expressly recognized that the property should be devel-
oped with urban uses in the densities stated in the text
because: (1) the SVAP showed that over 80 percent of
the area’s valley floor had already been developed; (2)
private and public utility and sewer infrastructure had
been extended to meet the needs of the development and
is more than adequate to provide service at comfortabl.
levels of safety, adequacy and efficiency; (3) develop-
ment at the density designated is necessary to meet the
residential housing needs of the area and to fulfill the
County’s regional housing. obligations; (4) the County
recognized the City’s desire that the property be devel-
oped as shown in the City’s General Plan.
yy ©
In 1984 LBE purchased 250 acres of land located in
unincorporated territory adjacent to and within the
sphere of influence of City.?
LBE alleges that before it purchased the property, the
City agreed that if LBE submitted a specific plan for
1,100 units it would be approved. Pursuant to City’s
request, LBE prepared such a specific plan. It paid all
fees for that plan and for an Environmental Impact
Report (EIR) on the plan. The City Council then became
the applicant for the specific plan which provided for
development of 1,730 units on the combined properties.
To accommodate new grading ordinances, the specific
plan and a proposed general plan amendment were
modified to reduce the number of units to 1,059 and to
eliminate the shopping center.
LBE helped to pay for oversized infrastructure adja-
cent to its property which could service the development
project at the density set forth above. LBE shared in
engineering costs for easements it granted. All neces-
sary infrastructure and public services for the projected
residents of the property are in place. LBE asserts that
the property would be serviced by county service
districts.
In late 1985, City passed an urgency interim or-
dinance. The ordinance imposed a partial moratorium on
approval of various land use permits, particularly in
hillside areas, until City could review and revise its
General Plan. City enacted the ordinance after it
monitored development and land use trends in the
community. It realized that various land uses then
permitted might conflict with proposed revisions to its
General Plan.
3 Marr Ranch Associates purchased 2,538 acres in the same area.
a
City enacted the interim measure to consider those
proposals “in an atmosphere of land use stability ....”
LBE alleges that the ordinance “effectively imposed a
moratorium on all processing of major new projects
”
In July 1986, City also adopted a temporary growth
management plan which would severely limit the number
of building permits to be issued annually. The plan
takes note of population trends and includes provisions
for reevaluation in 1991 based on facts obtained from
the 1990 census. These facts are to be considered in
relation to the criteria set forth in the measure, in the
revised General Plan and in the County population
guidelines. The plan is effective until January 1, 1996.
The plan requires that a developer obtain approval of
its proposed project from City, among others, to become
eligible for a waiting list to apply for building permits.
The revised City General Plan, adopted in October
1988, designated approximately 325 units for LBE’s
property. LBE then prepared, but did not file, a tentative
map for 249 single family residences to meet the new
design criteria of City and County.
City now requires that another specific plan on the
entire property be prepared. LBE alleges that this
requirement is illegal.
On information and belief, LBE alleges that it would
take up to 10 years to proceed with the proposed 249-
unit development. LBE would be required to complete a
specific plan and an EIR, process other required land use
applications and get in line to compete with other devel-
opment applicants for available building permits.
LBE asserts. conclusional allegations that “[t]he
inescapable fate of delay” is clear and that its tremen-
dous carrying costs cannot be overcome. It alleges that
ai Q-
its property would diminish in value until it is worth
nothing.
Because it “recognized” the “impossibility of devel-
oping within the City’s jurisdiction, ...” LBE turned to
the County which “foreclosed all development of the
Property whatsoever.”
County amended its General Plan on May 24, 1988,
allegedly to foreclose LBE’s development project.
County temporarily rescinded the applicable area plan.
It downzoned much of the property to OS-160 (open
space zoning which allows one unit per 160 acres), and
it temporarily precluded all processing of any develop-
ment in the urban reserve overlay. Jt denied LBE’s
prescreening application which sought to amend the
County’s General Plan.
Around August 1988, County would not let LBE
make application to process the project through County.
County told LBE it must first apply for a general plan
amendment and promote the adoption of a new area plan
for Simi Valley. LBE alleges this could take two to
three years.
LBE applied for a prescreening application to seek the
general plan amendment. The County Board of Super-
visors considered LBE’s application on January 17,
1989, and denied the application, stating that any devel-
opment of the proposed project must occur in the City
after annexation. This has been the position of County
since 1969.
The Complaint
LBE recites these allegations to support its seven
causes of action. First, it alleges inverse condemnation.
LBE states that City and County’s actions in rescinding
the area plan, forbidding all development in the urban
-A 9-
reserve overlay, downzoning the property, imposing a de
facto or actual moratorium (on development) and impos-
ing a growth-control plan to preclude large scale residen-
tial development has resulted in a de facto taking in
violation of article I, sections 7 and 19 of the California
Constitution and of the Fifth and Fourteenth Amend-
ments to the United States Constitution.
LBE alleges that these actions deprive the subject
property of substantially all its value, renders it un-
marketable and forbids substantially all reasonable
economic beneficial use of the property, thereby thwart-
ing its reasonable investment-backed expectations.
The second cause of action is for denial of substantive
and procedural due process. LBE asserts that the defen-
dants have restricted the use of its property to open
Space without a legitimate purpose and without evidence
to support such action.
The third cause of action alleges denial of equal
protection because defendants have limited the use of
LBE’s property to open space in contrast to uses allowed
the owners of compara!\le properties in the County.
The fourth cause of action seeks relief for deprivation
of civil rights under 42 United States Code sections 1983
and 1988. LBE alleges that defendants knowingly and
wrongfully deprived it of due process, equal protection
and just compensation under the California and federal
constitutions under color of state law.
The fifth cause of action is captioned conspiracy to
deprive plaintiffs of civil rights. It realleges the various
actions of City and County as a pattern of conduct
intended to deprive LBE of its legal rights under color of
State law.
The sixth cause of action seeks declaratory and
injunctive relief as to the rights, duties, and obligations
-A 10-
among the parties regarding the various actions alleged
in the complaint.
Lastly, LBE seeks a writ of mandate under Code of
Civil Procedure section 1085 for abuse of discretion by
County in acting in the manner described above.
LBE alleges it exhausted all “reasonable” administra-
tive remedies; or, alternatively, that its attempts to
secure such relief would be “impractical and futile.”
DISCUSSION
To state a cause of action for inverse condemnation,
LBE must plead facts which show either that: (1) the
application of the general zoning laws to its property
does not substantially advance a legitimate state interest;
or (2) such laws deprive it of substantially all economi-
cally viable use of its land; or (3) it has been deprived of
reasonable investment-backed expectations for the
property because of such laws. (Agins v. Tiburon, supra,
447 U.S. at pp. 260, 262; also see Nollan v. California
Coastal Comm’n (1987) 483 U.S. 825, which refined the
first prong of the Agins test to require that the regulation
advance the precise state interest which avowedly
motivated it.)
No precise rule exists to determine when property has
been taken by inverse condemnation. (Agins v. Tiburon,
supra, 447 U.S. at pp. 260-261; MacDonald, Sommer &
Frates v. County of Yolo et al. (1986) 477 U.S. 340,
348-349.) We start with the proposition that government
regulations are presumed to be motivated by and to
reasonably serve their avowed purposed. (First English
II, supra, at p. 1372.) We then weigh the private interest
asserted against the public’s interest as shown in enact-
ments passed in the exercise of the state’s police powers.
Where the public benefits greatly, it is constitutional to
-A 11-
restrict the use of a person’s land. (/d., at pp. 1366-
1367, fn. 10.) In some cases, no compensation may be
required even if almost all uses are taken. (J/d., at
p. 1366.)
Facial Attack on Legislation
Local government legislation is constitutional on its
face if it bears “a substantial relationship to the public
welfare ...” and inflicts no irreparable injury on the
landowner. (Agins v. Tiburon, supra, 447 U.S. at p. 261;
Euclid v. Ambler Realty Co. (1926) 272 U.S. 365,
395-397.) This is true even where a substantial diminu-
tion in value of the property is alleged. (Agins, supra, at
p. 261.)
Both County’s Guidelines and City’s growth manage-
ment ordinances satisfy this test. The Guidelines require
the “efficient provision of urban services and sound
urban land use planning” to avoid “the problems and
costs associated with urban sprawl... .”
The criteria in the Guidelines are well designed to
accomplish precisely this legitimate purpose. They
require compact development within existing cities
which can closely link public services, employment and
cultural opportunities in an efficient and centralized
manner. Such development is intended to include and
preserve “satisfactory permanent open space areas... .”
LBE argues that County and City’s actions to thwart
LBE’s project are contrary to Government Code provi-
sions which support the development of housing, citing
Government Code sections 65583, 65580, and 65581.
Although these sections promote the development of
residential housing, such development is not encouraged
when it destroys needed open space and contributes to
urban sprawl. (See Gov. Code, § 65561, subd. (b).)
-A 12-
Government Code section 65561, subdivision (b)
promotes the enactment of local ordinances designed to
preserve open space; such ordinances discourage the
“premature and unnecessary conversion of open-space
land to urban uses ....” California recognizes that the
preservation of open space is necessary to assure “the
continued availability of land for the production of food
and fiber, for the enjoyment of scenic beauty, for recrea-
tion and for the use of natural resources.” (Gov. Code,
§ 65561, subd. (a).)
County’s Guidelines are an exercise of the govern-
ment’s police powers which substantially advance the
goals of Government Code section 65561, subdivision
(a) — to prevent the ill effects of poorly planned ur-
banization. (Agins v. Tiburon, supra, 447 U.S. at p. 261;
First English II, supra, at p. 1370.) To accomplish these
goals, the Guidelines urge landowners such as LBE to
apply for annexation to a city to assure that public
services will be properly and adequately provided by an
existing municipality.
City’s growth management ordinance is also designed
to accomplish these goals. The City expressly recog-
nizes the need for new jobs, improved shopping facilities
and housing opportunities for all the residents of the
community.
City enacted the ordinance (No. 638) “to protect the
unique, hill-surrounded environment; enhance the
quality of life; promote public health, safety or welfare
and the general well-being of the community ....” By
limiting the rate, distribution, quality and type of resi-
dential development on an annual basis, with periodic
reviews of the ongoing situation, City seeks “to improve
local air quality, reduce traffic demands ... and ensure
that future demands for such essential services as water,
sewers and the like are met... .”
-A 13-
Such government purposes, which protect the public
weal, have long been recognized as legitimate. (See
Agins v. Tiburon, supra, 447 U.S. at pp. 261-262, citing
Penn Central Transp. Co. v. New York City (1978) 438
U.S. 104, 129; Village of Belle Terra v. Boraas (1974)
416 U.S. 1, 9; Euclid v. Ambler Realty Co., supra, 272
U.S. at pp. 394-395.) Courts will not interfere with a
municipality’s determination of policy. (Associated
Home Builders Etc., Inc. v. City of Livermore (1976) 18
Cal.3d 582, 605.)
Ordinances which seek to preserve the surrounding
environment and which consider open space and the
density of development benefit both developers and the
public by “assuring careful and orderly development of
residential property with provision for open-space
areas.” (Agins v. Tiburon, supra, 447 U.S. at p. 262.)
Ripeness of Attack on Legislation as Applied
An attack on regulatory legislation as applied to a
particular parcel of property is not ripe for adjudication
in inverse condemnation unless the plaintiff shows that:
(1) the regulation has gone so far that it has accom-
plished a taking, and (2) that compensation tendered is
not just. (MacDonald, Sommer & Frates v. County of
Yolo et al., supra, 477 U.S. at p. 348; Lake Nacimiento
Ranch Co. v. San Luis Obispo Cty. (9th Cir. 1987) 841
F.2d 872, 876.)
LBE bears a heavy burden to show that its “as ap-
plied” attack is ripe. LBE must first show tha: City and
County have made a “final and authoritative determina-
tion of the type and intensity of development legally
permitted on the subject property.” (MacDonald,
Sommer & Frates v. County of Yolo et al., supra, 477
U.S. at p. 348.) “A court cannot determine whether a
-A 14-
regulation has gone ‘too far’ unless it knows how far the
regulation goes.” (/bid.)
The developer must establish that it has submitted at
least one meaningful application for a development
project which has been thoroughly rejected, and that it
has prosecuted at least one meaningful application for a
zoning variance, or something similar, which has been
finally denied. (Lake Nacimiento Ranch Co. v. San Luis
Obispo Cty., supra, 841 F.2d at pp. 876-877; see also
Williamson Planning Comm’n v. Hamilton Bank (1985)
473 U.S. 172, 187-188; Kinzli v. City of Santa Cruz (9th
Cir. 1987) 818 F.2d 1449, 1454, as amended at 830 F.2d
968.) Informal or tentative development proposals are
insufficient to meet these tests. (Lake Nacimiento,
supra, at p. 876.)
The test is not one of exhaustion of a particular
administrative remedy — whether the developer has
exhausted all administrative appeals regarding a particu-
lar application. The developer must show that it has
submitted the appropriate, meaningful applications
necessary to proceed with the particular project and that
it has received a final rejection of those applications.
(Williamson Planning Comm’n v. Hamilton Bank, supra,
473 U.S. at pp. 186-190; Lake Nacimiento Ranch Co. v.
San Luis Obispo Cty., supra, 84. ~.2d at pp. 876-877.)
The case of Kinzli v. City of Santa Cruz, supra, 818
F.2d 1449, a case similar to the instant one, illustrates
how these rules apply.
The Kinzli family owned land adjacent to the City of
Santa Cruz for many years. Gradually the property
became surrounded by urban development.
Through a stipulated judgment in eminent domain, the
city successfully obtained four acres of the property for
construction of a public street. The city promised the
Kinzlis that they could develop the property with high
-A 15-
density uses once the road was built. The city never
built the road.
In 1979, the voters passed a siow growth initiative
which limited the use of the property to open space until
1990. The measure precluded the city from providing
certain urban services in the area in which the property
was located.
The city enacted a greenbelt overlay ordinance to
implement the initiative. The ordinance set out the
requirements to obtain special use permits and the
conditions for extensions of urban services to the green-
belt area. Limited single family and accessory structures
could be built upon application for special permits.
High density development, formerly available and
sought by the Kinzlis, was forbidden.
The Kinzlis tried to sell the property on the condition
that residential building permits could be obtained. One
potential buyer abandoned an application he filed on
behalf of the Kinzlis because a government staff engi-
neer told him that the city could not provide water to the
property. The Kinzlis did not submit applications for
other uses.
In 1980, the Kinzlis sued the city charging that the
ordinance, and the city’s conduct regarding the condem-
nation proceedings, violated federal constitutional and
civil rights and rights under California laws.
At trial, the court discussed the merits of the taking
claim and denied it. The appellate court found that the
trial court erred in discussing the merits because the
claim was not ripe. Because the Kinzlis had not submit-
ted a “meaningful” development plan or an application
for a variance, the appellate court held that the claim
should have been dismissed. (See Kinzli v. City of Santa
Cruz, supra, 818 F.2d at p. 1455.) .
-A 16-
Failure to avail oneself of admiinistrative solutions,
which might obviate the need to consider constitutional
questions, renders a claim for inverse condemnation
unripe for adjudication. (Hodel v. Virginia Surface Min.
& Recl. Assn. (1981) 452 U.S. 264, 297.)
In MacDonald, Sommer & Frates v. County of Yolo et
al., supra, 477 U.S. 340, the Supreme court rejected as
unripe allegations that a city and county unconstitution-
ally restricted use of its property to open space when it
denied a tentative subdivision tract map to build 159
single and multiple family homes. (Pp. 344, 352, fn. 8.)
There, as here, the plaintiff urged that any application
for a zone change, a variance or other relief would be
futile. Its allegations that all principal and accessory
uses were no longer permitted and that its property had
no value were rejected as speculative and conclusional.
(Id., at pp. 345, 351, citing San Diego Gas & Electric
Co. v. San Diego (1981) 450 U.S. 621, 631-632, fn. 12;
and Williamson Planning Comm’n v. Hamilton Bank,
supra, 473 U.S. at pp. 187-188.)
Denial of approvals for a particular and relatively
intensive residential development, as here, cannot be
equated with a refusal to permit any beneficial use
whatsoever. (MacDonald, Sommer & Frates v. County
of Yolo et al., supra, 477 U.S. at p. 347.)
In the instant case, LBE has not submitted an applica-
tion for annexation to City even though the Guidelines,
since 1969, have urged developers who propose projects
like this one to do so. Nor has LBE applied for a zoning
change or variance. The open-space zoning ordinance at
issue here has been in effect for the subject property
since 1981. The revision of the General Plan is but a
temporary situation. If LBE does not want to wait, it
could apply for a variance to obtain a designation for
10-acre parcels per residential unit.
-A 17-
Nevertheless, LBE contends that County has fore-
closed ail developments of its property within County.
LBE relies on the following passage from the amended
general plan:
“The Urban Reserve overlay designation is applied to
all unincorporated land within a city’s adopted Sphere of
Influence. Although LAFCO has determined these areas
to be appropriate for eventual annexation and urbaniza-
tion, the Urban designation was not applied to all lands
within the LAFCO sphere boundaries because it could
result in urban development being permitted without
annexation. Accordingly, unincorporated lands within
spheres have been designated under this General Plan
either as Existing Community, Rural, Agricultural or
Open Space. Under these designations, therefore, more
intense development could not occur on affected lands
until they are annexed.”
This language does not foreclose all development, but
merely restates County’s position since 1969 on annexa-
tion. The growth management ordinance is a temporary,
partial moratorium on certain kinds of development.
If LBE successfully applied for annexation, it could
explore other possibilities for development under the
growth management ordinance. These possibilities may
not reflect what LBE desires to build. This, however,
does not constitute an unconstitutional taking. (See
Williamson Planning Comm’n v. Hamilton Bank, supra,
473 U.S. at pp. 187-188.) Proposals for affordable
housing and housing for seniors, for example, have
priority under the growth management ordinance.
Therefore, LBE’s claim of a regulatory taking, as ap-
plied, is not ripe. (Kinzli v. City of Santa Cruz, supra,
818 F.2d at pp. 1454-1455.)
-A 18-
LBE cannot take solace in First English I, supra,
which stated that damages may be available for tempo-
rary total takings. In that case, the California courts
assumed that a taking had already occurred. (See First
English I, supra, at p. 311.) Moreover, First English I,
supra, was expressly limited to its facts. Said the court:
“We limit our holding to the facts presented, and of
course do not deal with the quite different questions that
would arise in the case of normal delays in obtaining
building permits, changes in zoning ordinances, vari-
ances, and the like which are not before us.” (/d., at
p. 321.) The Supreme Court then remanded the case to
the California Supreme Court for further proceedings on
the question of whether there had been an unconstitu-
tional taking under the ordinance there in question.
Neither is it “ ‘clear beyond peradventure ...°” that
the growth management ordinance would result in such
excessive delay that it can be assumed that all of the
property’s beneficial uses have presently been destroyed.
(See Kinzli v. City of Santa Cruz, supra, 818 F.2d at
p. 1454, fn. 5, citing Norco Construction, Inc. v. King
County (9th Cir. 1986) 801 F.2d 1143, 1145.) The
instant temporary ordinance calls for a reevaluation in
1991 of its restrictions, pursuant to the 1990 census and
it automatically expires in 1996. Unless a temporary
moratorium is total and is unreasonable in purpose,
duration or scope, the restrictions it places on develop-
ment are not compensable. (First English II, supra, at
pp. 1372-1373.)
In First English II, supra, the county enacted a
temporary moratorium on building after a flood so that it
could conduct a study of the situation. This did not
constitute an unconstitutional taking. No taking results
when a partial moratorium measure is enacted to protect
the public health, safety or morals. (/d., at p. 1362; see
-A 19-
also Associated Home Builders Etc., Inc. v. City of
Livermore, supra, 18 Cal.3d 582.)
Loss of Substantially All Economic Use
The second prong of the Agins taking test is whether
the regulations deny the property owner substantially all
economically viable use of the land. (Agins v. Tiburon,
supra, 447 U.S. at p. 260.) The meaning of this concept
is elusive, but the general rule is that “the existence of
permissible uses determines whether a development
restriction denies a property holder the economically
viable use of its property.” (Lake Nacimiento Ranch Co.
v. San Luis Obispo Cty., supra, 841 F.2d at p. 877, citing
cases.)
The denial of the highest and best use does not consti-
tute an unconstitutional taking of the _ property.
(Macleod v. Santa Clara County (9th Cir. 1984) 749
F.2d 541, 548.) Even where there is a very substantial
diminution in the value of land, there is no taking. (/d.,
at pp. 547-548, citing Hadacheck v. Sebastian (1915)
239 U.S. 394 — diminution in value from $800,000 to
$60,000 not a taking; William C. Haas v. City & Cty. of
San Francisco (9th Cir. 1979) 605 F.2d 1117, 1120 —
diminution in value from $2 million to $100,000 not a
taking.) The burden of proof is on the applicant, who
faces an uphill battle. (Lake Nacimiento Ranch Co. v.
San Luis Obispo Cty, supra, 841 F.2d at p. 877.)
In MacLeod v. Santa Clara County, supra, 749 F.2d
541, MacLeod purchased cattle grazing property and
found it unprofitable. At one time the county granted
him a use permit to harvest hardwood, which he also
found to be unprofitable. Then, MacLeod attempted to
farm the land, which he found infeasible due to irriga-
tion problems.
-A 20-
He then successfully applied to the state for permis-
sion to harvest timber. He entered into a contract to sell
harvested timber to a third party. County, citing various
public health, safety and welfare concerns, denied him a
use permit. MacLeod sued for inverse condemnation.
The court, ruling for the county, found that the denial
of the permit application did not interfere with other
primary objectives; (1) holding the property for invest-
ment purposes, and (2) cattle grazing. (MacLeod v.
Santa Clara County, supra, 749 F.2d at p. 547.)
In William C. Haas v. City & Cty. of San Francisco,
supra, 605 F.2d 1117, the appellant claimed that rezon-
ing and imposition of other land use restrictions so
diminished the value of his investment property that it
amounted to a taking. The court disagreed.
On June 28, 1971, Haas contracted to purchase a large
unimproved parcel of land in San Francisco. The con-
tract was conditioned on the procurement of a valid site
permit for his proposed high-rise development project.
As of July 7, 1971, the date of application for the
permit, the property was zoned for the proposed use.
Nonetheless, the planning commission denied the permit
because the project “would have a detrimental effect on
the City as a whole and upon the residents and property
of the neighborhood.” (William C. Haas v. City & Cty.
of San Francisco, supra, 605 F.2d at p. 1119.) The city
relied on a recent urban design plan developed for
inclusion in the city’s master plan.
Haas appealed on August 13, 1971. Two weeks later
the commission formally adopted the urban design plan.
On August 26, 1971, interim height and bulk restrictions
were adopted by the commission, and Haas withdrew the
application.
On November 9, 1971, Haas sut
the commission to comply with the new height
limitations. The commission approved the application
for a site permit on the revised plans, and the board of
permit appeals denied a petition for rehearing sought by
Surrounding residents. Haas then bought the land for
$1,650,000, plus various fees. He broke ground and
commenced construction.
A neighborhood improvement association filed a wat
petition on April 20, 1972, on the growagd that Haas
failed to comply with the California Environmesta!
Quality Acts of 1970 and 1972. Although he prevauiga
in the trial court, Haas lost on all appeals. The caurrs
held that he did not state a sufficient claim for a vested
right despite the site permit, because he had not under-
taken “substantial construction” nor had he %ncurrec
substantial liabilities. Haas had to start anéw
By then, however, Haas faced “insurmountable ®
barriers” to the proposed project because the planning»
commission had adopted a 40-foot height restriction
density controls and had rezoned the property. Haas
sued to challenge the rezoning and other land\use restric-
tions On constitutional grounds. He ogre « that the
combined impact of these restrictions des
\
value of his property investment. |
The court held that, as a matter of law, nq Stated no
claim for iaverse condemnation. His _n us conten-
syed the
oe
tions all rested on the premise that the rezoning and the
land use restrictions were so grossly disproportionate in ,
their detriment to him, as opposed to the benefits con-
ceivably inured to the public’s general welfare, that they
constituted a taking. (William C. Haas v. City & Cry
San Francisco, supra, 605 F.2d at p. 1120.)
The Haas court upheld the land use regulations |
because they were reasonably related to health, safety
morals or general welfare. Such police power regula
-A 22-
tions are routinely upheld even when they nearly destroy
or severely affect recognized real property interest or
flatly prohibit the most beneficial use. (William C. Haas
v. City & Cty. of San Francisco, supra, 605 F.2d at
p. 1120.) Although the standard of reasonable relation is
lower than that set forth recently by the Supreme Court
in Agins and Nollan, the purposes of a comprehensive
plan to decrease population density, to preserve natural
resources, and to promote aesthetics are sufficient to
Support the restrictions which have been enacted here as
a matter of law. (/d. at pp. 1120-1121.)
LBE, like Haas, argued it was left with no economi-
cally viable use. Even if it wefe true that LBE’s profit
may be severely reduced, and we find this assertion
speculative, it would fail to meet the test that there be no
viable economic use of the property. This rule holds
true even if the zoning restrictions preclude recovery of
the initial investment made. (William C. Haas v. City &
Cty. of San Francisco, supra, 605 F.2d at pp. 1120-
1121.)
The restrictions in the growth management ordinance
and the open-space zoning designations reveal the
availability of beneficial uses upon annexation, such as
senior or affordable housing. Although County has
downzoned most of the subject property to O-S 160
(open-space designation permitting one residential
Structure per 160 acres of land), LBE may apply for a
zoning variance for permissible 10-acre parcels. (And
see Lake Nacimiento Ranch Co. v. San Luis Obispo Cty.,
supra, 841 F.2d at p. 877 — government entities need
not show the availability of such uses.)
The availability of variances or of other additional
special uses strongly suggests there are other economi-
cally beneficial uses not expressly included in such
ordinances. (Lake Nacimiento Ranch Co. v. San Luis
Obispo Cty., supra, 841 F.2d at p. 877.)
-A 23-
Reasonable Investment-Backed Expectations
LBE opines that its reasonable investment-backed
expectations (RIBE), to profitably build out a subdivi-
sion of homes, has been rendered economically in-
feasible because of delays caused by the laws and the
conduct of defendants.
There is considerable controversy whether courts
should consider a landowner’s profit expectations in an
inverse condemnation action. (See Lake Nacimiento
Ranch Co. v. San Luis Obispo Cty., supra, 841 F.2d at
pp. 877-878, esp. fn. 4, citing Williamson Planning
Comm’n v. Hamilton Bank, supra, 473 U.S. at pp. 190-
191, fn. 12; and cf. Keystone Coal Association v.
DeBenedictis (1987) 480 U.S. 470, 499.)
Although in some cases it may be a legitimate con-
sideration, here LBE has not stated facts which enable it
to proceed on this theory.
Although the developer in Avco Community
Developers, Inc. v. South Coast Regional Com. (1976)
17 Cal.3d 785, spent more that $2 million in building
infrastructure and had obtained a final map as well as a
permit to complete rough grading, the court concluded
that its failure to obtain a permit from the coastal com-
mission and obtain final building permits left it without
a vested interest upon which it could rely. (P. 793.)
The court so held even though it found that the
approvals Avco had previously received led Avco to
reasonably expect it would be allowed to build without
further discretionary approvals. (Avco Community
Developers, Inc. v. South Coast Regional Com., supra,
17 Cal.3d at p. 790.) Under Avco, one cannot obtain a
vested right to build in reliance on “the assurances of
”
city officials that construction ... was permitted, ...” or
-A 24-
on spending large sums for preliminary development
costs. (/d., at p. 792.)
According to Avco, reasonable investment-backed
interests depend upon performing substantial work and
incurring substantial liabilities based on good faith
reliance on the actual issuance of building permits in
accord with the laws applicable at the time of their
issuance. (Avco Community Developers, Inc. v. South
Coast Regional Com., supra, 17 Cal.3d at pp. 791-792.)
In MacDonald, Sommer & Frates v. County of Yolo et
al., supra, 477 U.S. at page 349, the Supreme Court
stated that until the landowner has obtained a final
decision regarding the application of zoning and subdivi-
sion regulations to his property, it is impossible to know
whether the land retains any reasonable beneficial use or
whether his reasonable investment-backed expectations
have been destroyed. LBE has not submitted an applica-
tion for annexation, much less applied for and obtained
an actual building permit. (See also Agins v. Tiburon,
supra, 447 U.S. at p. 262.)
In MacLeod v. Santa Clara County, supra, 749 F.2d
541, all three bases of this theory are discussed. On the
vested rights theory, the court said that although
MacLeod had every reason to believe his application (for
a county use permit to harvest timber) would be granted,
he “must have been aware that the standards and condi-
tions governing the issuance of the permit might cause
his application to be denied.” (/d., at p. 548.)
On the theory of economic viability, the court said
that denial of the permit did not interfere either with
holding the property for investment purposes or with the
interim, although unprofitable, use of cattle grazing.
(MacLeod v. Santa Clara County, supra, 749 F.2d at
pp. 546-548.) Diminution in expected value, even if that
loss is severe, does not constitute a taking. (/d., at
p. 548, citing Hadacheck v. Sebastian, supra, 239 U.S.
-A 25-
394 — $800,000 investment became worth $60,000; and
William C. Haas v. City & Cty. of San Francisco, supra,
605 F.2d at p. 1120 — $2 million investment became
worth $100,000.)
As here, the gravemen of MacLeod’s contention was
that a taking requiring compensation occurred “because
he has been denied the opportunity to exploit his prop-
erty by pursuing a particular project he had come to
believe would be available for development. This
argument fails.” (MacLeod v. Santa Clara County,
supra, 749 F.2d at p. 548; see esp. William C. Haas v.
City & Cty. of San Francisco, supra, 605 F.2d at
pp. 1120-1121; and also MacDonald, Sommer & Frates
v. County of Yolo et al., supra, 477 U.S. at p. 347.)
iS me
[The] [p]rediction of profitability is essentially a
matter of reasoned speculation that courts are not espe-
cially competent to perform....’” (MacLeod v. Santa
Clara County, supra, 749 F.2d at p. 548, quoting Andrus
v. Allard (1979) 444 U.S. 51, 66; and see Hodel v.
Virginia Surface Min. & Recl. Assn., supra, 452 U.S. at
pp. 296-297.) Since Penn Central Transp. Co. v. New
York City, supra, 438 U.S. 104, the Supreme Court has
rejected such arguments as “ ‘quite simply untenable.’ ”
(MacLeod, supra, at p. 548, quoting Penn Central
Transp. Co. v. New York City, supra, 438 U.S. at
p. 130.) The Fifth Amendment “is not a panacea for
less-than-perfect investments or business opportunities.”
(Id., at p. 549.)
Regardless of how we analyze RIBE, we come up
with the same conclusion — LBE has not stated facts
which support recovery for inverse condemnation as a
matter of law.
-A 26-
Due Process
LBE’s due process allegations are conclusional,
premature and, upon our review of the judicially-noticed
legislation, incorrect as a matter of law. (Kinzli v. City
of Santa Cruz, supra, 818 F.2d at p. 1456, citing the
Supreme Court in Williamson Planning Comm’n v.
Hamilton Bank, supra, 473 U.S. at p. 199.)
Even if a Fifth Amendment takings claim could
arguably be recast as one sounding in substantive due
process, it would be premature. (Kinzli v. City of Santa
Cruz, supra, 818 F.2d at p. 1456.) And, there can be no
denial of procedural due process, under the Fourteenth
Amendment, until the substantive due process claim is
ripe. ([bid.)
An ordinance that is reasonably related to the public
welfare of the population it significantly affects is
constitutional. (Associated Home Builders Etc., Inc. v.
City of Livermore, supra, 18 Cal.3d at pp. 606-607; alsu
see McMillan v. Goleta Water Dist. (9th Cir. 1986) 792
F.2d 1453, 1457.) The Guidelines and the growth
management initiative are reasonably related to the
public welfare.
Equal Protection
LBE has insufficiently and improperly alleged that
defendants have violated the equal protection clause of
the Fourteenth Amendment to the United States Con-
Stitution. LBE alleged that defendants have arbitrarily
set aside its property as open space as opposed to the use
allowed owners of other comparable property.
Absent the allegation of the invasion of fundamental
rights or the existence of a suspect classification, the
right to equal protection is not violated unless the
-A 27-
classification made bears no rational relationship to a
legitimate state interest. (McMillan v. Goleta Water
Dist., supra, 792 F.2d at p. 1456; Pennell v. San Jose
(1988) 485 U.S. 1, 14, citing Vance v. Bradley (1979)
440 U.S. 93.) This is true even if some discrimination is
alleged. (McMillan, supra, at p. 1456.)
Here, the classification of the land as open space,
which was made long before LBE purchased it, is ration-
ally celated to the legitimate state interest in preventing
urban sprawl and its concomitant effects as outlined in
the Guidelines and the growth management ordinance.
The allegation that defendants have treated LBE in a
discriminatory manner as opposed to others is ioo vague.
Although LBE’s second amended complaint, proffered at
the motion for reconsideration, more specifically alleged
that owners of other property have been treated more
equitably, there are material differences among these
projects which render the allegation unsupportable as a
matter of law.
In one instance, the development was never approved.
In the other instances, sewer and water are being pro-
vided to the properties by facilities governed by entities
other than the City Council.
The instant property, however, would likely be
serviced by the Simi Valley County Sanitation District
and the Waterworks District Number 8, both of which
are governed by the City Council of Simi Valley. The
requirement of annexation is entirely consistent with this
Situation, as explained in the Guidelines.
Civil Rights
LBE’s allegation that it has been deprived of due
process, equal protection and just compensation in
inverse condemnation under color of state law, pursuant
-A 28-
to title 42 United States Code sections 1983 and 1988, is
not ripe because there has been no final decision on
meaningful applications. (See Williamson Planning
Comm'n v. Hamilton Bank, supra, 473 U.S. at pp. 187-
188.)
Conspiracy
LBE alleges a conspiracy among the defendants to
perform the activities previously alleged. There is no
separate cause of action for civil conspiracy apart form
overt acts done in furtherance of activities which are
legally compensable. (Widdows v. Kech (1968) 263
Cal.App.2d 228, 234; and see Escamilla v. City of Santa
Ana (C.D.Cal. 1985) 606 F.Supp. 928, regarding 42
United States Code section 1983 allegations.) Because
we find LBE has not alleged any actionable activities,
we hold that there is no actionable conspiracy.
Relief by Writ, Injunction and Declaratory Relief
Because there is no basis in law or equity to grant
relief under the facts alleged, there is no ground upon
which we can grant relief by way of writ, injunction or
declaration.
ILBE has sued City and County because of disap-
po.sted expectations concerning its development plans.
LBE states no cause of action even if it has expended
substantial sums on infrastructure and _ preapproval
planning, and even though there will be some delay in
bringing some development proposal to fruition. These
expenditures and delays are the normal incidents of
development projects and are not actionable, per se.
We affirm the judgment as to County.
EXHIBIT B
RE:
M4.
OFFICE OF THE CLERK
COURT OF APPEAL
STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
ROBERT N. WILSON, CLERK
DIVISION: 6
Hamilton & Samuels B046558
Karen J. Lee
4000 Macarthur Blvd.
Suite 5700
Newport Beach, CA. 92660
Simi Valley, City of
VS.
Ventura County Superior Court
Long Beach Equities, Inc.
2 Civil B046558
Ventura No. 103364
2 2.
OFFICE OF THE CLERK
COURT OF APPEAL
STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
ROBERT N. WILSON, CLERK
DIVISION: 6 DATE: 04/12/91
Hamilton & Samuels
Karen J. Lee
4000 Macarthur Blvd.
Suite 5700
Newport Beach, CA. 92660
RE: Long Beach Equities, Inc.
VS.
Ventura, County of
2 Civil B045047
Ventura No 103364
THE COURT:
THE PETITION FOR REHEARING IS GRANTED
EXHIBIT C
fl ++
2
f
: ae : 7 1 : A
: (ai yea bas oe Poe eee oe we ee
ee ee es Te hUhLheTCTTCOh i. _
a
-C 1-
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL
OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
COURT OF APPEAL-SECOND DIST.
FILED
JUN 27 1991
ROBERT N. WILSON, Clerk
Deputy Clerk
LONG BEACH EQUITIES, INC., etc.,
Plaintiff and Appellant,
¥v.
COUNTY OF VENTURA, et al.,
Defendants and Respondents.
2d Civil No. B045047
(Super. Ct. No. 103364)
(Ventura County)
~—--
a
THE CITY OF SIMI VALLEY, et al.
Petitioners,
¥v.
SUPERIOR COURT OF THE
COUNTY OF VENTURA,
Respondent.
LONG BEACH EQUITIES, INC., et al.,
; Real Parties in Interest.
ae
—"*
No. B046558
4,
OPINION ON REHEARING
Long Beach Equities, Inc. (LBE) desires to build 249
single-family residences on a 250-acre parcel of land it
owns adjacent to the City of Simi Valley (City). LBE
contends that land use regulations of the County of
Ventura (County) and City, on their face and as applied,
will so greatly delay its development plans as to render
them economically infeasible.
We hold that this suit is not ripe for adjudication. We
affirm the judgment for County and grant City’s petition
for issuance of a writ of mandate to compel the trial
court to enter an order sustaining City’s demurrer with-
out leave to amend.
LBE sued these entities seeking damages for inverse
condemnation, among other things.’ The trial court
sustained County’s demurrer to LBE’s first amended
complaint without leave to amend. LBE moved for
reconsideration and proffered a second amended com-
plaint. The court denied the motion and sustained City’s
demurrer without leave as to several counts, but over-
ruled that demurrer on counts for inverse condemnation,
denial of due process and declaratory and injunctive
relief.
LBE appealed the judgment entered on County’s
demurrer and the ruling rendered on its motion for
reconsideration. City filed a petition for a writ of
mandate to compel the trial court to vacate its order
overruling the demurrer. We have consolidated these
actions on appeal in the interest of judicial economy and
' Complainant Marr Ranch Associates is not a party to this appeal.
Also, LBE has sued the County Board of Supervisors, the Ventura
Planning Commission and the Simi Valley City Council. We shall
refer to all County and City defendants as County and City,
respectively.
3
-C 3-
to aid in the resolution of this lawsuit. (Omaha Indem-
nity Co. v. Superior Court (1989) 209 Cal.App.3d 1266,
1272; see 9 Witkin, Cal. Procedure (3d ed. 1985)
Appeal, § 62, pp. 86-87, § 64, pp. 88-89, § 65, pp.
89-90.)
STANDARDS OF REVIEW
LBE has the burden to prove that the trial court
abused its discretion in sustaining County’s demurrer
without leave to amend. (Goodman v. Kennedy (1976)
18 Cal.3d 335, 349.) The City has the burden to show
that the trial court’s order is erroneous as a matter of law
and that it will suffer harm which cannot be corrected on
further appeal. (Omaha Indemnity Co. v. Superior
Court, supra, 209 Cal.App.3d at pp. 1273-1274.)
We must construe the allegations of LBE’s volumi-
nous complaint liberally to attain substantial justice
among the parties. (Code Civ. Proc., § 452.) We deem
true all material and properly pleaded facts. (Pan
Pacific Properties, Inc. v. County of Santa Cruz (1978)
81 Cal.App.3d 244, 251.) We also consider all docu-
ments which have been determined by the trial court as
appropriate for judicial notice, many of which are men-
tioned in the complaint. (Code Civ. Proc., § 430.30;
First English Evangelical Lutheran Church v. County of
Los Angeles (1989) 210 Cal.App.3d 1353, 1368.)? They
include resolutions, reports and other official acts of
County and City. (Pan Pacific, supra, at p. 25S, fn. 2.)
2 The California Court of Appeal heard First English Evangelical
_Lutheran Church v. County of Los Angeles, supra, 210 Cal.App.3d
1353 (hereinafter cited as First English IT) on remand from the
United States Supreme Court in First Lutheran Church v. Los
Angeles County (1987) 482 U.S. 304 (hereinafter cited as First
English 1).
-C 4-
We may not consider conclusions of fact or law,
opinions, speculation or allegations which are contrary
either to law or to judicially-noticed facts. (See Pan
Pacific Properties, Inc. v. County of Santa Cruz, supra,
81 Cal.App.3d at pp. 251, 255, fn. 2; Agins v. Tiburon
(1980) 447 U.S. 255, 259, fn. 6.)
The Complaint — The Facts
On June 25, 1969, the Ventura County Planning
Commission first adopted Guidelines for Orderly Urban
Development (Guidelines). The Guidelines provide
policies, Standards and criteria to evaluate applications
for zone changes from rural to urban land use clas-
sifications and for “related land use development
matters.”
The Guidelines initially were adopted to assure the
“efficient provision of urban services and sound urban
land use planning” and to avoid “the problems and costs
associated with urban sprawl” through coordinated
planning with other local government entities.
Those Guidelines provided that urban growth of
developing communities in Ventura County should
proceed in a compact and logically expanding form
which includes satisfactory permanent opem space areas
within physically developed land.
The revised Guidelines of 1976 and 1985 continued
the theme that urban development should occur within
existing, incorporated cities because cities provide a full
range of municipal services. County removed the
language regarding retention of permanent open space
within developed land in its revised Guidelines.
According to the Guidelines, land uses which would
be allowed by County should be equal to or more restric-
tive tham those uses allowed by City within a city’s
-C §-
sphere of influence. Before new urban development
proceeds, the land should be annexed to City to ensure
that the full range of urban services are provided by
municipalities. Within “areas of interest” to a City, as
here, such development should be allowed only within
existing communities.
The Ventura County General Plan, with its discussion
of stages of development, may be used as a tool to
evaluate proposals for urban development.
As of 1980, City’s General Plan designated the
subject area for residential development of a maximum
of 1,100 units and for a shopping center. On September
15, 1981, County’s Open Space Plan designated the
subject property as having an “Urban Reserve overlay.”
This overlay contemplates residential development, but
it encourages developers to deal directly with the appro-
priate city to proceed. County also adopted City’s
General Plan as the Simi Valley Area Plan (the SVAP)
portion of the County’s General Plan.
LBE alleges that in adopting the SVAP, the County
expressly recognized that the property should be devel-
oped with urban uses in the densities stated in the text
because: (1) the SVAP showed that over 80 percent of
the area’s valley floor had already been developed; (2)
private and public utility and sewer infrastructure had
been extended to meet the needs of the development and
is more than adequate to provide service at comfortable
levels of safety, adequacy and efficiency; (3) develop-
ment at the density designated is necessary to meet the
residential housing needs of the area and to fulfill the
County’s regional housing obligations; (4) the County
recognized the City’s desire that the property be devel-
oped as shown in the City’s General Plan.
-C 6-
In 1984 LBE purchased the subject 250 acres of land
located in unincorporated territory adjacent to and within
the “areas of interest” of City.?
LBE alleges that before it purchased the property, the
City agreed that if LBE submitted a specific plan for
1,100 units, it would be approved. Pursuant to City’s
request, LBE prepared such a specific plan. It paid all
fees for that plan and for an environmental impact report
(EIR) on the plan.
The City Council then became the applicant for the
specific plan which provided for development of 1,730
units. To accommodate new grading ordinances, the
specific plan and a proposed General Plan amendment
were modified to reduce the number of units to 1,059
and to eliminate the shopping center.
LBE helped to pay for oversized infrastructure adja-
cent to its property which could service the development
project at the density set forth above. LBE shared in
engineering costs for easements it granted. All neces-
sary infrastructure and public services for the projected
residents of the property are now in place. LBE asserts
that the property could be serviced by county service
districts.
In late 1985, City passed an urgency interim ordi-
nance. The ordinance imposed a partial moratorium on
providing approval for various land use permits, particu-
larly in hillside areas, until City could review and revise
its General Plan. City enacted the ordinance after it
monitored development and land use trends in the
community. It realized that various land uses then
permitted might conflict with proposed revisions to its
General Plan. City wanted to consider those uses “in an
Marr Ranch Associates purchased approximately 2,500 acres in
the same area.
Py a
atmosphere of land use stability ....” LBE alleges that
the ordinance “effectively imposed a moratorium on all
processing of major new projects” including its own
project, “until the City could review and revise its
General Plan.”
In July 1986, City adopted a temporary growth man-
agement plan which would severely limit the number of
building permits to be issued annually. The plan takes
note of population trends and includes provisions for
reevaluation in 1991 based on facts obtained from the
1990 census. Those facts are to be considered in relation
to the criteria set forth in the measure, in the revised
General Plan and in the County population guidelines.
The plan is effective until January 1, 1996.
The plan requires that a developer obtain approval of
its proposed project from City, among others, to become
eligible for a waiting list to apply for building permits.
The revised City General Plan, adopted in October
1988, designated approximately 325 units for LBE’s
property. LBE then prepared, but did not file, a tentative
map for 249 single family residences to meet the new
design criteria of City and County.
City now requires that another specific plan on the
entire property be prepared. LBE alleges that this
requirement is illegal, and on information and belief
alleges that it would take up to 10 years to proceed with
the proposed 249-unit development. LBE would be
required to complete a specific plan and an EIR, process
other required land use applications and get in line to
compete with other development applicants for available
building permits.
LBE asserts that “[t]he inescapable fate of delay” is
clear and that its tremendous carrying costs cannot be
overcome. It alleges that its property would diminish in
value until it is worth nothing.
-C 8-
Because it “recognized” the “impossibility of devel-
oping within the City’s jurisdiction, ...” LBE turned to
the County which “foreclosed all development of the
Property whatsoever.’
County amended its General Plan on May 24, 1988,
allegedly to foreclose LBE’s development project.
County downzoned much of the property to OS-160
(open space zoning which allows one unit per 160
acres).
Around August 1988, County would not let LBE
make application to process the project through County.
County told LBE it must first apply for a General Plan
amendment and promote the adoption of a new area plan
for Simi Valley. LBE alleges it was told that it would
take two to three years to adopt a new area plan.
LBE began to seek a General Plan amendment to
amend the County General Plan for development of the
250-acre parcel. The County Board of Supervisors
considered LBE’s prescreening application on January
17, 1989, and denied it, stating that any development of
the proposed project must occur in the City after
annexation.
The Complaint — The Theory
LBE recites the foregoing allegations to support its
seven causes of action. The first is for inverse condem-
nation. LBE states that City and County’s actions in
rescinding the area plan, forbidding all development in
the urban reserve overlay, downzoning the property,
imposing a de facto or actual moratorium (on develop-
ment) and imposing a growth-control plan to preclude
large scale residential development has resulted in a de
facto taking in violation of article I, sections 7 and 19 of
-C 9-
the California Constitution and of the Fifth and Four-
teenth Amendments to the United States Constitution.
LBE alleges that these actions deprive the subject
property of substantially all its value, renders it un-
marketable and forbids substantially all reasonable
economic beneficial use of the property, thereby thwart-
ing its reasonable investment-backed expectations.
The second cause of action is for denial of substantive
and procedural due process. LBE asserts that the defen-
dants have restricted the use of its property to to open
space without a legitimate purpose and without evidence
to support such action.
The third cause of action alleges denial of equal
protection because defendants have limited the use of
LBE’s property to open space in contrast to uses allowed
the owners of comparable properties in the County.
The fourth cause of action seeks relief for deprivation
of civil rights under 42 United States Code sections 1983
and 1988. LBE alleges that defendants knowingly and
wrongfully deprived it of due process, equal protection
and just compensation under the California and federal
constitutions under color of state law.
The fifth cause of action is captioned conspiracy to
deprive plaintiffs of civil rights. It realleges the various
actions of City and County as a pattern of conduct
intended to deprive LBE of its legal rights under color of
State law.
The sixth cause of action seeks declaratory and
injunctive relief as to the rights, duties and obligations
among the parties regarding the various actions alleged
in the complaint.
Lastly, LBE seeks a writ of mandate under Code of
Civil Procedure section 1085 for abuse of discretion by
County in acting in the manner described above.
-C 10-
LBE alleges that the City and County have imposed
“an ever changing series of obstacles on the develop-
ment of the Property,” and have therefore made
“development of the Property a practical impossibility
..” Further, LBE alleges it “exhausted all reasonable
administrative remedies,” and “[f]urther attempts to
secure relief through administrative procedures
would be totally impractical and futile.”
DISCUSSION
To state a cause of action for inverse condemnation,
LBE must plead facts which show either that: (1) the
application of the general zoning laws to its property
does not substantially advance a legitimate state interest;
or (2) such laws deprive it of substantially all economi-
cally viable use of its land. (Agins v. Tiburon, supra,
447 U.S. at p. 260; also see Nollan v. California Coastal
Comm’n (1987) 483 U.S. 825, which refined the first
prong of the Agins test to require that the regulation
advance the precise state interest which avowedly
motivated it.)
No precise rule exists to determine when property has
been taken by inverse condemnation. (Agins v. Tiburon,
supra, 447 U.S. at pp. 260-261; MacDonald, Sommer &
Frates v. County of Yolo et al. (1986) 477 U.S. 340,
348-349.) We start with the proposition that government
regulations are presumed to be motivated by and to
reasonably serve their avowed purposed. (First English
IT, supra, at p. 1372.) We then weigh the private interest
asserted against the public’s interest as shown in enact-
ments passed in the exercise of the state’s police powers.
Where the public benefits greatly, it is constitutional to
restrict the use of one’s land. (/d., at pp. 1366-1367, fn.
10.) In some cases, no compensation may be required
even if almost all uses are taken. (/d., at p. 1366.)
-C 11-
Facial Attack on Legislation
Local government legislation is constitutional on its
face if it bears “a substantial relationship to the public
welfare ...” and inflicts no irreparable injury on the
landowner. (Agins v. Tiburon, supra, 447 U.S. at p. 261;
Euclid v. Ambler Realty Co. (1926) 272 U.S. 365,
395-397.) This is true even where a substantial diminu-
tion in value of the property is alleged. (Agins, supra, at
p. 261.)
Both County’s Guidelines and City’s Growth Man-
agement Ordinance satisfy this test. The County enacted
the Guidelines to promote efficient and effective deliv-
ery of community services and to conserve the resources
of County by encouraging urban development to occur
within cities. The Guidelines emphasize annexation as a
means to accomplish these purposes.
City enacted its ordinance “to protect the unique,
hill-surrounded environment; enhance the quality of life;
promote public health, safety or welfare and the general
well-being of the community ....” By limiting the rate,
distribution, quality and type of residential development
on an annual basis, with periodic reviews of the ongoing
situation, City seeks “to improve local air quality, reduce
traffic demands ... and ensure that future demands for
such essential services as water, sewers and the like are
MR.
Courts have long recognized the legitimacy of such
ordinances, because such laws are designed to protect
the public weal. (See Agins v. Tiburon, supra, 447 U.S.
at pp. 261-262, citing Penn Central Transp. Co. v. New
York City (1978) 438 U.S. 104, 129; Village of Belle
Terre v. Boraas (1974) 416 U.S. 1, 9; Euclid v. Ambler
Realty Co., supra, 272 U.S. at pp. 394-395.) Courts will
not interfere with a municipality’s determination of
-C 12-
policy. (Associated Home Builders Etc., Inc. v. City of
Livermore (1976) 18 Cal.3d 582, 605.)
LBE argues that County and City’s actions are de-
signed to thwart LBE’s project and that they are contrary
to Government Code provisions which support the
development of housing, citing Government Code sec-
tions 65583, 65580, and 65581. Although these sections
promote the development of residential housing, such
development is not encouraged when it fails to conserve
needed open space and contributes to urban sprawl. (See
Gov. Code, § 65560, et seq.)
The state also seeks to assure that open space is
conserved wherever possible through open space plans.
(Gov. Code, § 65562.) A “ ‘[l]ocal open-space plan’ is
the open-space element of a county or city general plan
.... (Gov. Code, § 65560, subd. (a).) Government
Code section 65560, subdivision (b) states that open
space is defined to mean, inter alia, “any parcel or area
of land ... essentially unimproved and devoted to an
Open-space use as defined in this section, and which is
designated on a local [or] regional ... open-space plan
as any of the following: ... (4) Open space for public
health and safety, including, but not limited to, areas ...
required for the protection of water quality and ... areas
required for the protection and enhancement of air
quality.”
The Guidelines and the Growth Management Ordi-
nance express local legislative determinations: 1. to
assure that land continues to be available for the use of
natural resources (Gov. Code, § 65561, subd. (a)); 2. to
discourage premature and unnecessary conversion of
open-space land to urban uses and to discourage noncon-
tiguous development patterns (§ 65561, subd. (b)), even
though this project is contiguous to developed land; and
3. to preserve valuable open space land by adoption and
-C 13-
Strict administration of such ordinances or by other
appropriate means (§ 65561, subd. (c)).
The Guidelines substantially advance these goals by
encouraging urban development only within cities to
asure the efficient and effective delivery of a full range
of municipal services. Although the Growth Manage-
ment Ordinance expressly acknowledges the need for
new jobs, improved shopping facilities and housing
opportunities for all the residents of the community, it
also recognizes the need to limit growth to preserve
water and air quality. (See Gov. Code, § 65560, subd.
(b)(4).) Such legislative action is well designed to
prevent the ill effects of poorly planned urbanization.
(Agins v. Tiburon, supra, 447 U.S. at p. 261; First
English II, supra, at p. 1370.)
LBE’s allegations state that as of 1980 the City’s
General Plan slated a portion of the subject property for
residential development. LBE also alleged that as of
September 1981, the County adopted the City’s General
Plan as the SVAP which recognized that the property
should be developed for urban uses.
That County and City have projected residential and
other urban uses for the area in their General Plans does
not entitle LBE to develop its land. (Avco Community
Developers, Inc. v. South Coast Regional Com. (1976)
17 Cal.3d 785, 795-796; MacLeod v. Santa Clara County
(9th Cir. 1984) 749 F.2d 541, 548.) The Guidelines and
the Growth Management Ordinance provide substantial,
legitimate bases for the protection of the public welfare
regarding such development. We may not interfere with
such policy. (Associated Home Builders Etc., Inc. v.
City of Livermore, supra, 18 Cal.3d at pp. 604-605.)
LBE acknowledged in its complaint that County’s
Land Use Plan imposed an urban reserve overlay which
encourages developers to deal directly with City so that
such development is placed within incorporated cities
a
-C 14-
whenever and wherever possible, as stated in the
Guidelines. The open-space plan maps show this urban
reserve overlay as of September 15, 1981.
Ripeness of Attack on Legislation as Applied
An attack on regulatory legislation as applied to a
particular parcel of property is not ripe for adjudication
in inverse condemnation unless the plaintiff shows that:
(1) the regulation has gone so far that it has accom-
plished a taking, and (2) compensation tendered is not
just. (MacDonald, Sommer & Frates v. County of Yolo
et al., supra, 477 U.S. at p. 348; Lake Nacimiento Ranch
Co. v. San Luis Obispo Cty. (9th Cir. 1987) 841 F.2d
872, 876.)
LBE bears a heavy burden to show that its “as ap-
plied” attack is ripe. LBE must first show that City and
County have made a “final and authoritative determina-
tion of the type and intensity of development legally
permitted on the subject property.” (MacDonald, Som-
mer & Frates v. County of Yolo et al., supra, 477 U.S. at
p. 348.) “A court cannot determine whether a regulation
has gone ‘too far’ unless it knows how far the regulation
goes.” (Ibid.)
The developer must establish that it has submitted at
least one meaningful application for a development
project which has been thoroughly rejected, and that it
has prosecuted at least one meaningful application for a
zoning variance, or something similar, which has been
fina'ly denied. (Lake Nacimiento Ranch Co. v. San Luis
Obispe Cty., supra, 841 F.2d at pp. 876-877; see also
Williamson Planning Comm’n v. Hamilton Bank (1985)
473 U.S. 172, 187-188; Kinzli v. City of Santa Cruz (9th
Cir. 1987) 818 F.2d 1449, 1454, as amended at 830 F.2d
968.) Informal or tentative development proposals are
-C 15-
insufficient to meet these tests. (Lake Nacimiento,
supra, at p. 876.)
The test is not one of exhaustion of a particular
administrative remedy — whether the developer has
exhausted all administrative appeals regarding a particu-
lar application. The developer must show that it has
submitted the appropriate applications necessary to
proceed with the particular project and that it has re-
ceived a final rejection of those applications. (William-
son Planning Comm’n v. Hamilton Bank, supra, 473
U.S. at pp. 186-190; Lake Nacimiento Ranch Co. v. San
Luis Obispo Cty., supra, 841 F.2d at pp. 876-877.)
The case of Kinzli v. City of Santa Cruz, supra, 818
F.2d 1449, a case similar to the instant one, illustrates
how these rules apply.
The Kinzli family owned land adjacent to the City of
Santa Cruz for many years. Gradually the property
became surrounded by urban development.
Through a stipulated judgment in eminent domain, the
city successfully obtained four acres of the property for
construction of a public street. The city promised the
Kinzlis that- they could develop the property with high
density uses once the road was built. The city never
built the road.
In 1979, the voters passed a slow growth initiative
which limited the use of the property to open space until
1990. The measure precluded the city from providing
certain urban services in the area in which the property
was located.
The city enacted a green belt overlay ordinance to
implement the initiative. The ordinance set out the
requirements to obtain special use permits and the
conditions for extensions of urban services to the green-
belt area. Limited single family and accessory structures
could be built upon application for special permits.
ES
-C 16-
High density development, formerly available and
sought by the Kinzlis, was forbidden.
The Kinzlis tried to sell the property on the condition
that residential building permits could be obtained. One
potential buyer abandoned an application he filed on
behalf of the Kinzlis because a government staff engi-
neer told him that the city could not provide water to the
property. The Kinzlis did not submit applications for
other uses.
In 1980, the Kinzlis sued the city charging that the
ordinance, and the city’s conduct regarding the condem-
nation proceedings, violated federal constitutional and
civil rights and rights under California laws.
At trial, the court discussed the merits of the taking
claim and denied it. The appellate court found that the
the trial court erred in discussing the merits because the
claim was not ripe. Because the Kinzlis had not submit-
ted a “meaningful” development plan or an application
for a variance, the appellate court held that the claim
should have been dismissed. (See Kinzli v. City of Santa
Cruz, supra, 818 F.2d at p. 1455.)
Failure to avail oneself of administrative solutions,
which might obviate the need to consider constitutional
questions, renders a claim for inverse condemnation
unripe for adjudication. (Hodel v. Virginia Surface Min.
& Recl. Assn. (1981) 452 U.S. 264, 297.)
In MacDonald, Sommer & Frates v. County of Yolo et
al., supra, 477 U.S. 340, the Supreme Court rejected as
unripe allegations that a city and county unconstitution-
ally restricted use of its property to open space when it
denied a tentative subdivision tract map to build 159
single and multiple family homes. (Pp. 344, 352, fn. 8.)
There, as here, the plaintiff urged that any application
for a zone change, a variance or other relief would be
futile. Its allegations that all principal and accessory
tt
uses were no longer permitted and that its property had
no value were rejected as speculative and conclusional.
(Id., at pp. 345, 351, citing San Diego Gas & Electric
Co. v. San Diego (1981) 450 U.S. 621, 631-632, fn. 12;
and Williamson Planning Comm’n v. Hamilton Bank,
supra, 473 U.S. at pp. 187-188.)
Denial of approvals for a particular and relatively
intensive residential development, as here, cannot be
equated with a refusal to permit any beneficial use what-
soever. (MacDonald, Sommer & Frates v. County of
Yolo et al., supra, 477 U.S. at p. 347.)
In the instant case, LBE has not submitted an applica-
tion for annexation to City even though the Guidelines,
since 1969, have urged developers who propose projects
like this one to do so. LBE did not follow through on its
application for a tentative tract map, nor has LBE al-
leged that it applied for a zoning change, or sought other
favored uses such as senior and affordable housing.
Nevertheless, LBE contends that County has fore-
closed all development of its property within County.
LBE relies on the following passage from the amended
General Plan:
“The Urban Reserve overlay designation is applied to
all unincorporated land within a city’s adopted Sphere of
Influence. Although LAFCO has determined these areas
to be appropriate for eventual annexation and urbaniza-
tion, the Urban designation was not applied to all lands
within the LAFCO sphere boundaries because it could
result in uban development being permitted without
annexation. Accordingly, unincorporated lands within
spheres have been designated under this General Plan
either as Existing Community, Rural, Agricultural or
Open Space. Under these designations, therefore, more
intense development could not occur on affected lands
until they are annexed.”
-C 18-
This language does not foreclose all development, but
merely restates County’s position since 1969 on annexa-
tion. City’s Growth Management Ordinance is also a
temporary, partial moratorium on certain kinds of
development.
If LBE successfully applied for annexation, it could
‘explore other possibilities for development under the
Growth Management Ordinance. These possibilities
may not reflect what LBE desires to build. This, how-
ever, does not constitute an unconstitutional taking.
(See Williamson Planning Comm'n v. Hamilton Bank,
supra, 473 U.S. at pp. 187-188.)
LBE cannot take solace in First English I, supra,
which stated that damages may be available for tempo-
rary total takings. In that case, the California courts
assumed that a taking had already occurred. (See First
English I, supra, at p. 311.) Moreover, First English 1,
supra, was expressly limited to its facts. Said the court:
“We limit our holding to the facts presented, and of
course do not deal with the quite different questions
that would arise in the case of normal delays in obtain-
ing building permits, changes in zoning ordinances,
variances, and the like which are not before us.” (/d., at
p. 321.) The Supreme Court then remanded the case to
the California Supreme Court for further proceedings on
the question of whether there had been an unconstitu-
tional taking under the ordinance there in question.
Neither is it “ ‘clear beyond peradventure ...’” that
the Growth Management Ordinance would result in such
excessive delay that it can be assumed that all of the
property’s beneficial uses have presently been destroyed.
(See Kinzli v. City of Santa Cruz, supra, 818 F.2d at p.
1454, fn. 5, citing Norco Construction, Inc. v. King
County (9th Cir. 1986) 801 F.2d 1143, 1145.) The
instant temporary ordinance calls for a reevaluation in
1991 of its restrictions, pursuant to the 1990 census and
-C 19-
it automatically expires in 1996. Unless a temporary
moratorium is total and is unreasonable in purpose
duration or scope, the restrictions it places on develop-
ment are not compensable. (First Cnglish II, supra, at
pp. 1372-1373.)
In First English II, supra, the county enacted a
temporary moratorium on building after a flood so that it
could conduct a study of the situation. This did not
constitute an unconstitutional taking. No taking results
when a partial moratorium measure is enacted to protect
the public health, safety or morals. (/d., at p. 1362; see
also Associated Home Builders Etc., Inc. v. City of
Livermore, supra, 18 Cal.3d 582.)
Loss of Substantially All Economic Use
The second prong of the Agins taking test is whether
the regulations deny the property owner substantially all
economically viable use of the land. ‘Agins v. Tiburon,
supra, 447 U.S. at p. 260.) The meaning of this concept
is elusive, but the general rule is that “the existence of
permissible uses determines whether a development
restriction denies a property holder the economically
viable use of its property.” (Lake Nacimiento Ranch Co.
v. San Luis Obispo Cty., supra, 841 F.2d at p. 877, citing
cases.)
The denial of the highest and best use does not con-
Stitute an unconstitutional taking of the property.
(MacLeod v. Santa Clara County, supra, 749 F.2d at p.
548.) Even where there is a very substantial diminution
in the value of land, there is no taking. (J/d., at pp.
547-548, citing Hadacheck v. Sebastian (1915) 239 U.S.
394 — diminution in value from $800,000 to $60,000
not a taking; William C. Haas v. City & Cty. of San
Francisco (9th Cir. 1979) 605 F.2d 1117, 1120 —
diminution in value from $2 million to $100,000 not a
-C 20-
taking.) The burden of proof is on the applicant, who
faces an uphill battle. (Lake Nacimiento Ranch Co. v.
San Luis Obispo Cty., supra, 841 F.2d at p. 877.)
In MacLeod v. Santa Clara County, supra, 749 F.2d
541, MacLeod purchased cattle grazing property and
found it unprofitable. At one time the county granted
him a use permit to harvest hardwood, which he also
found to be unprofitable. Then, MacLeod attempted to
farm the land, which he found infeasible due to irriga-
tion problems.
He then successfully applied to the state for permis-
sion to harvest timber. He entered into a contract to sell
harvested timber to a third party. County, citing various
public health, safety and welfare concerns, denied him a
use permit. MacLeod sued for inverse condemnation.
The court, ruling for the county, found that the denial
of the permit application did not interfere with other
primary objectives: (1) holding the property for invest-
ment purposes, and (2) cattle grazing. (MacLeod v.
Santa Clara County, supra, 749 F.2d at p. 547.)
In William C. Haas v. City & Cty. of San Francisco,
supra, 605 F.2d 1117, the appellant claimed that rezon-
ing and imposition of other land use restrictions so
diminished the value of his investment property that it
amounted to a taking. The court disagreed.
On June 28, 1971, Haas contracted to purchase a large
unimproved parcel of land in San Francisco. The con-
tract was conditioned on the procurement of a valid site
permit for his proposed high-rise development project.
As of July 7, 1971, the date of application for the
permit, the property was zoned for the proposed use.
Nonetheless, the planning commission denied the permit
because the project “would have a detrimental effect on
the City as a whole and upon the residents and property
of the neighborhood.” (William C. Haas v. City & Cty.
-C 21-
of San Francisco, supra, 605 F.2d at p. 1119.) The city
relied on a recent urban design plan developed for
inclusion in the city’s master plan.
Haas appealed on August 13, 1971. Two weeks later
the commission formally adopted the urban design plan.
On August 26, 1971, interim height and bulk restrictions
were adopted by the commission, and Haas withdrew the
application.
On November 9, 1971, Haas submitted a new plan to
the commission to comply with the new height and bulk
limitations. The commission approved the application
for a site permit on the revised plans, and the board of
permit appeals denied a petition for rehearing sought by
surrounding residents. Haas then bought the land for
$1,650,000, plus various fees. He broke ground and
commenced construction.
A neighborhood improvement association filed a writ
petition on April 20, 1972, on the ground that Haas
failed to comply with the California Environmental
Quality Acts of 1970 and 1972. Although he prevailed
in the trial court, Haas lost on all appeals. The courts
held that he did not state a sufficient claim for a vested
right despite the site permit, because he had not under-
taken “substantial construction” nor had he incurred
substantial liabilities. Haas had to start anew.
By then, however, Haas faced “insurmountable
barriers” to the proposed project because the planning
commission had adopted a 40-foot height restriction,
density controls and had rezoned the property. Haas
sued to challenge the rezoning and other land use restric-
tions on constitutional grounds. He contended that the
combined impact of these restrictions destroyed the
value of his property investment.
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The court held that, as a matter of law, he stated no
claim for inverse condemnation. His numerous conten-
tions all rested on the premise that the rezoning and the
land use restrictions were so grossly disproportionate in
their detriment to him, as opposed to the benefits con-
ceivably inured to the public’s general welfare, that they
constituted a taking. (William C. Haas v. City & Cty. of
San Francisco, supra, 605 F.2d at p. 1120.)
The Haas court upheld the land use regulations
because they were reasonably related to health, safety,
morals or general welfare. Such police power regula-
tions are routinely upheld even when they nearly destroy
or severely affect recognized real property interests or
flatly prohibit the most beneficial use. (William C. Haas
v. City & Cty. of San Francisco, supra, 605 F.2d at p.
1120.) Although the standard of reasonable relation is
lower than that set forth recently by the Supreme Court
in Agins and Nollan, the purposes of a comprehensive
plan to decrease population density, to preserve natural
resources, and to promote aesthetics are sufficient to
support the restrictions which have been enacted here as
a matter of law. (/d., at pp. 1120-1121.)
LBE, like Haas, argued it was left with no econo-
mically viable use. Even if it were true that LBE’s
profit may be severely reduced, it would fail to meet the
test that there be no viable economic use of the property.
This rule holds true even if the zoning restrictions
preclude recovery of the initial investment made.
(William C. Haas v. City & Cty. of San Francisco,
supra, 605 F.2d at pp. 1120-1121.)
The restrictions in the Growth Management Ordi-
nance and the open-space zoning designations do not
rule out development upon annexation. Although
County has downzoned most of the subject property to
OS-160 (open-space designation permitting one residen-
tial structure per 160 acres of land), LBE may apply for
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a zoning change for permissible 10-acre parcels. (And
see Lake Nacimiento Ranch Co. v. San Luis Obispo Cty.,
supra, 841 F.2d at p. 877 — government entities need
not show the availability of such uses.)
The possibility of obtaining a zoning change or
applying for other additional special uses strongly
Suggests there are other economically beneficial uses
not expressly included in such ordinances. (Lake
Nacimiento Ranch Co. v. San Luis Obispo Cty., supra,
841 F.2d at p. 877.)
Reasonable Investment-Backed Expectations
LBE opines that its reasonable investment-backed
expectations (RIBE), to profitably build out a subdivi-
sion of homes, has been rendered economically in-
feasible because of delays caused by the laws and the
conduct of defendants.
There is considerable controversy whether courts
should consider a landowner’s profit expectations in an
inverse condemnation action. (See Lake Nacimiento
Ranch Co. v. San Luis Obispo Cty., supra, 841 F.2d at
pp. 877-878, esp. fn. 4, citing Williamson Planning
Comm’n v. Hamilton Bank, supra, 473 U.S. at pp.
190-191, fn. 12; and°cf. Keystone Coal Association v.
DeBenedictis (1987) 480 U.S. 470, 499.)
Although in some cases it may be a legitimate con-
sideration, here LBE has not stated facts which enable it
to proceed on this theory.
Although the developer in Avco Community
Developers, Inc. v. South Coast Regional Com., supra,
17 Cal.3d 785, spent more than $2 million in building
infrastructure and had obtained a final map as well as a
permit to complete rough grading, the court concluded
that its failure to obtain a permit from the coastal
-C 24-
commission and obtain final building permits left it
without a vested interest upon which it could rely. (P.
793.)
The court so held even though it found that the
approvals Avco has previously received led Avco to
reasonably expect it would be allowed to build without
further discretionary approvals. (Avco Community
Developers, Inc. v. South Coast Regional Com., supra,
17 Cal.3d at p. 790.) Under Avco, one cannot obtain a
vested right to build in reliance to “the assurances of city
officials that construction ... was permitted, ...” or on
spending large sums for preliminary development costs.
(Id., at pp. 792-793.)
In MacDonald, Sommer & Frates v. County of Yolo et
al., supra, 477 U.S. at page 349, the Supreme Court
stated that until the landowner has obtained a final
decision regarding the application of zoning and subdivi-
sion regulations to his property, it is impossible to know
whether the land retains any reasonable beneficial use or
whether his reasonable investment-backed expectations
have been destroyed. LBE has not submitted an appli-
cation for annexation, much less applied for and ob-
tained an actual building permit. (See also Agins v.
Tiburon, supra, 447 U.S. at p. 262.)
In MacLeod v. Santa Clara County, supra, 749 F.2d
541, the concept of reasonable investment-backed
expectations is discussed in conjunction with the Agins
prongs of vested rights and economic viability. As to
the vested rights theory, the court said that although
MacLeod had every reason to believe his application (for
a county use permit to harvest timber) would be granted,
he “must have been aware that the standards and condi-
tions governing the issuance of the permit might cause
his application to be denied.” (/d., at p. 548.)
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On the theory of economic viability, the court said
that denial of the permit did not interfere either with
holding the property for investment purposes or with the
interim, although unprofitable, use of cattle grazing.
(MacLeod v. Santa Clara County, supra, 749 F.2d at pp.
546-548.) Diminution in expected value, even if that
loss is severe, does not constitute a taking. (J/d., at p.
548, citing Hadacheck v. Sebastian, supra, 239 U.S. 394
— $800,000 investment became worth $60,000; and
William C. Haas v. City & Cty. of San Francisco, supra,
605 F.2d at p. 1120 — $2 million investment became
worth $100,000.)
As here, the gravamen of MacLeod’s contention was
that a taking requiring compensation occurred “because
he has been denied the opportunity to exploit his prop-
erty by pursuing particular project he had come to
believe would be available for development. This
argument fails.” (MacLeod v. Santa Clara County,
supra, 749 F.2d at p. 548; see esp. William C. Haas v.
City & Cty. of San Francisco, supra, 605 F.2d at pp.
1120-1121; and also MacDonald, Sommer & Frates v.
County of Yolo et al., supra, 477 U.S. at p. 347.)
“oe.
[The] [p]rediction of profitability is essentially a
matter of reasoned speculation that courts are not espe-
cially competent to perform....’” (MacLeod v. Santa
Clara County, supra, 749 F.2d at p. 548, quoting Andrus
v. Allard (1979) 444 U.S. 51, 66; and see Hodel v.
Virginia Surface Min. & Recl. Assn., supra, 452 U.S. at
pp. 296-297.) Since Penn Central Transp. Co. v. New
York City, supra, 438 U.S. 104, the Supreme Court has
rejected such arguments as “ ‘quite simply untenable.
> 99
(MacLeod, supra, at p. 548, quoting Penn Central,
supra, at p. 130.) The Fifth Amendment “is not a
panacea for less-than-perfect investment or business
opportunities.” (/d., at p. 549.)
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Regardless of how we analyze RIBE, we come up
with the same conclusion — LBE has not stated facts
which support recovery for inverse condemnation as a
matter of law.
Due Process
LBE’s due process allegations are conclusional and
premature. (Kinzli v. City of Santa Cruz, supra, 818
F.2d at p. 1456, citing the Supreme Court in Williamson
Planning Comm’n v. Hamilton Bank, supra, 473 U.S. at
p. 199.)
Even if a Fifth Amendment takings claim could
arguably be recast as one sounding in substantive due
process, it would be premature. (Kinzli v. City of Santa
Cruz, supra, 818 F.2d at p. 1456.) And, there can be no
denial of procedural due process, under the Fourteenth
Amendment, until the substantive due process claim is
ripe. ([bid.)
An ordinance that is reasonable related to the public
welfare of the population it significantly affects is
constitutional. (Associated Home Builders Etc., Inc. v.
City of Livermore, supra, 18 Cal.3d at pp. 606-607; also
see McMillan v. Goleta Water Dist. (9th Cir. 1986) 792
F.2d 1453, 1457.) The Guidelines and the Growth
Management Ordinance are reasonably related to the
public welfare. -
ys
Equal Protection
LBE alleges that defendants have arbitrarily set aside
its property as open space, whereas comparable property
in the County has not been similarly restricted.
Absent the allegation of the invasion of fundamental
rights or the existence of a suspect classification, there is
no violation of equal protection unless the classification
bears no rational relationship to a legitimate state inter-
est. (McMillan v. Goleta Water Dist., supra, 792 F.2d at
p. 1456; Pennell v. San Jose (1988) 485 U.S. 1, 14,
citing Vance v. Bradley (1979) 440 U.S. 93.) This is
true even if some discrimination is alleged. (McMillan,
supra, at p. 1456.)
As with the due process cause of action, the claim
here is not ripe. LBE’s second amended complaint,
proffered as a motion for reconsideration, provided more
specific allegations concerning owners of other property
who have allegedly been treated more equitably. Even
if the trial court had allowed the second amended com-
plaint to be filed, it would still be subject to demurrer
absent LBE’s filing a proper application.
Civil Rights
LBE’s allegation that it has been deprived of due
process, equal protection and just compensation in
inverse condemnation under color of state law, pursuant
to title 42 United States Code sections 1983 and 1988, is
not ripe because there has been no final decision on
meaningful applications. (See Williamson Planning
Comm’n v. Hamilton Bank, supra, 473 U.S. at pp.
187-188.)
-C 28-
Conspiracy
LBE alleges a conspiracy among the defendants to
perform the activities previously alleged. There is no
separate cause of action for civil conspiracy apart from
overt acts done in furtherance of activities which are
legally compensable. (Widdows v. Koch (1968) 263
Cal.App.2d 228, 234; and see Escamilla v. City of Santa
Ana (C.D.Cal. 1985) 606 F.Supp. 928, regarding 42
U.S.C. §1983 allegations.) Because we find LBE has
not alleged any actionable activities, we hold that there
is no actionable conspiracy.
Relief by Writ, Injunction and Declaratory Relief
Because there is no basis in law or equity to grant
relief under the facts alleged, there is no ground upon
which we can grant relief by way of writ, injunction or
declaration.
LBE has sued City and County because of disap-
pointed expectations concerning its development plans.
LBE states no cause of action even if it has expended
substantial sums on infrastructure and _ preapproval
planning, and even though there will be some delay in
bringing some development proposal to fruition. These
expenditures and delays are the normal incidents of
development projects and are not actionable, per se.
We affirm the judgment as to County.
As to City’s petition, let a writ of mandate issue to
compel the trial court to enter a new and different order
sustaining City’s demurrer in its entirety without leave
to amend. Costs to City and County.
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CERTIFIED FOR PUBLICATION
GILBERT, Acting P.J.
We concur:
YEGAN, J.
ABBE, J.”
” Retired Associate Justice of the Court of Appeal sitting under
assignment by the Chairperson of the Judicial Council.
-C 30-
Bruce A. Thompson, Judge
Superior Court County of Ventura
Hamilton & Samuels and Paul R. Hamilton, Karen J.
Lee and Deborah M. Rosenthal, for Plaintiff, Appellant
and Real Party in Interest Long Beach Equities, Inc.
James L. McBride, County Counsel, Dennis L.
Slivinski, Assistant County Counsel, for Defendant and
Respondent, County of Ventura.
John Torrance, City Attorney, Marjorie Baxter,
Assistant City Attorney; Freilich, Stone, Leitner &
Carlisle and Katherine E. Stone and Margaret A. Sohagi,
for Defendants, Respondents, and Petitioners City of
Simi Valley and City Council of The City of Simi
Valley.
No appearance for Respondent Superior Court of the
County of Ventura.
Baker & McKenzie and Robert H. Philibosian, for
Real Party in Interest Marr Ranch Associates, Inc.
Burke, Williams & Sorensen and J. Robert Flandrick,
Virginia R. Pesola as Amici Curiae on behalf of Peti-
tioner City of Simi Valley.
Pacific Legal Foundation and Ronald A. Zumbrun,
Edward J. Connor, Jr., Timothy V. Kassouni as Amici
Curiae on behalf of Real Party in Interest Long Beach
Equities, Inc.
-C 31-
OFFICE OF THE CLERK
COURT OF APPEAL
STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
ROBERT N. WILSON, CLERK
DIVISION: 6
Hamilton & Samuels
Karen J. Lee
4000 Macarthur Blvd.
Suite 5700
Ne
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