Amicus Curiae Brief — Suitum v. Tahoe Regional Planning Agency

Supreme Court, US

FIL § D

NOV 29 1996

No. 96-243 , CLERK |

In the ‘

Supreme Court of the United States

October Term, 1996

+

BERNADINE SUITUM,

Petitioner,

v.

TAHOE REGIONAL PLANNING AGENCY,

Respondent.

—-->—

On Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

~--

BRIEF OF AMICUS CURIAE, BUILDING INDUSTRY

ASSOCIATION OF WASHINGTON, IN SUPPORT OF

PETITIONER, BERNADINE SUITUM

+

TewoTny A. BITTLE * RICHARD M. STEPHENS

Of Counsel JOHN M. GROEN

* Counsel of Record

Groen & Stephens

411 - 108th Avenue N_E.,

Suite 1750

Bellevue , Washington 98004-5515

Telephone: (206) 453-6206

Attorneys for Amicus Curiae

TABLE OF CONTENTS

TABLE OF AUTHORITIES CITED

INTEREST OF AMICUS CURIAE .

SUMMARY OF ARGUMENT... .

.

FOR RIPENESS REFORM ..........

ALLOWING THE OWNER TO TRANSFER

DEVELOPMENT RIGHTS CANNOT AVOID

A TAKING BECAUSE THE SALE OF

DEVELOPMENT RIGHTS IS NOT AN

ECONOMICALLY VIABLE USE OF LAND . .

Ill. ON THE MERITS, TRPA'S TDR ALLOTMENT

IS NOT A VALID SUBSTITUTE FOR

TABLE OF AUTHORITIES CITED

Page

CASES

Agins v. City of Tiburon, 598 P.2d

25 (Cal.Sup.Ct) (1979), aff'd on other

grounds, 447 U.S. 255 (1980)........... as 8-9, 13,16

Del Monte Dunes at Monterey v.

City of Monterey, 95 F.3d 1422

oo t- e Pree 11-12

Dolan v. City of Tigard,

$12 U.S. _, 114 S.Ct. 2309 (1994)... eee 8

Eubank v. City of Richmond,

Sao U.S. GOT GBT cw oc ccccecenstuceae 18

First English Evangelical Lutheran

Church of Glendale v. County of

Los Angeles, 482 U.S. 304 (1987)... ee cee 3,14

Florida Rock Industries, Inc. v.

United States, 18 F.3d 1560,

us. Gi. GD ow ccc ccccseeedéene eee 8

FPC v. Hope Natural Gas Company,

ES eee 2,10

Hoehne v. County of San Benito,

S70 P.26 SD Ga Gi. GRD onc ov cccsceceeeeenuu 4

Kaiser Aetna v. United States,

GOS U.B. GEC QIGTED oo vc cvccdesceceeeeuv anne 8

Loretto v. Teleprompter Manhattan

CATV Corporation, 458 U.S. 419 (1981)... 2... ee, il

eee

Lucas v. South Carolina Coastal

Council, 505 U.S. 1003 (1992) ................. 6-10,12

Lynch v. Household Finance

Corporation, 405 U.S.538(1971)................_.. 4

MacDonald, Sommer & Frates v.

Yolo County, 477 U.S. 340(1986) .............. 3,6-7,9

McNeese v. Board of Education,

ee 4

Nectow v. , 277 U.S

EE 16

Nollan v. California Coastal Commission,

rn 3,15-17

Park Avenue Tower Assoc. v.

City of New York, 746 F.2d 135

ee ecb eescccccccccccceces 2,12

Pearson v. City of Grand Blanc,

961 F.2d 1211 (6th Cir. 1992) ...................., 5

Penn Central Transportation Company v.

New York City, 438 U.S. 104(1978)............... 3,7

Pennell v. City of San Jose,

EEE 2,10

R/L Associates v. Klockars,

52 Wn. App. 726, 763 P.2d 1244,

(Wash. Ct. App. 1988) .......................... 5

Ruckelshaus v. Monsanto

CC ”

iv

Sederquist v. City of Tiburon

eK PP eee 18

Washington ex rel Seattle Trust

Company v. Roberge, 278 U.S. 116

GEE SGSSed ee sdb eueecceesesccccscecee: 3, 16,18

Webb's Fabulous Pharmacies, Inc. v.

Beckwith, 449 U.S. 155(1980)...................., 15

Williamson County Regional Planning

Commission v. Hamilton Bank ,

Gs Ss bb udeneudicocéecd- checbeds 9

STATUTES

Revised Code of Washington 36.70A.060(4) ............. l

MISCELLANEOUS

1! E Cooke, Institutes, (ist Amed 1812) ............... 10

Blaesser, Closing the Federal Courthouse

Door on Property Owners: The Ripeness

and Abstention Doctrines in Section 1983

Land Use Cases, 2 HOPSTRA PROP.

Eee WE 60666n60bb bees Coccecceeccodecs: 5

Overstreet, The Ripeness Doctrine of the

Takings Clause: A Survey of Just How

Far Federal Courts Will Go to Avoid

Litigating Land Use Cases, 10 J. LAND

USE & ENVTRL. L. 91 (1994)... eee eee 4

I

INTEREST OF AMICUS CURIAE

Pursuant to Supreme Court Rule No. 37, the Building

Industry Association of Washington (BIAW) respectfully

submits this amicus curiae brief in support of petitioner,

Bernadine Suitum. Consent to the filing of this brief has been

granted by counsel for all parties. Copies of the letters of

consent have been lodged with the Clerk of this Court

BIAW represents over 6,500 builders and associate

members in the residential construction industry in the State of

Washington. Its members employ over 100,000 people whose

livelihoods depend on the right to own and use land to produce

wealth

The Fifth Amendment to the federal Constitution is a

shield against overzealous land use regulation in Washington

Timely access to a judicial forum to challenge confiscatory

regulation is of paramount importance to builders This Court's

ripeness doctrine has driven more than one project into

bankruptcy.

Using Transferable Development Rights (TDR) as a

technique for obtaining public open space at no public expense

is a concept that is in its infancy in Washington State, and a

topic of much controversy. The State’s Growth Management

Act, RCW 36.70A.060(4}, prohibits designating privately

owned urban areas as long term commercial forest or

agricultural lands, unless a TDR program is implemented The

members of BIAW are concerned that without guidance of this

Court, TDRs may be used to frustrate their rights.

BIAW is interested in the outcome of this case in that it

presents the Court with an opportunity to relax the ripeness

rules governing access to the courts for aggrieved land owners

BIAW hopes the Court wiil also reach the question of the

2

legitimacy of TDRs as a substitute for monetary compensation,

and expose their illegitimacy.

——®.--

SUMMARY OF ARGUMENT

Property rights stand on equal footing with other

constitutional rights. Therefore, plaintiffs asserting taking

claims deserve to have their day in court. Despite the

constitutionally protected rights at stake, the ripeness doctrine

has been misused to close the courthouse door to property

owncrs with taking claims.

This case was dismissed under the “final decision” prong

of the ripeness doctrine because the Court of Appeals found

that the “transfer of development rights is a ‘use’ of SEZ

[Steam Environment Zone] property.” Appendix A at 8, 9.

Until Mrs. Suitum attempts to sell development rights, the

court ruled, her taking claim is not ripe. This ruling is

predicated on an unnatural definition of the word “use.” As

defined in the dictionary and this Court's precedents, “use”

means to put the land itself into service in order to derive

enjoyment or income from it. An “economically viable” use

provides landowners a “fair return on their investment”

(Pennell v. City of San Jose, 485 U.S. 1, 13 (1988))

“commensurate with retumms on investments in other

enterprises having correspr jing risks." FPC v. Hope

Natural Gas Co., 320 U.S. 591, 603 (1944). It is one that is

“sufficiently desirable to permit property owners to sell the

property to someone for that use.” Park Ave. Tower Assoc. v.

City of New York, 746 F.2d 135, 139 (2d Cir. 1984). No one

would pay Mrs. Suitum the going rate for a developable Lake

Tahoe lot solely to acquire the ability to sell 183 square feet

of lot coverage to someone else.

Rather than a use, TDRs are better viewed as a gesture

of compensation. This Court said as much in MacDonald,

3

Sommer & Frates v. Yolo County, 477 U.S. 340, 350 (1986)

in referring to the availability of TDRs in Penn Central

Transportation Co. v. New York City, 438 U.S. 104 (1978).

When the government offers TDRs to an owner whose land has

been stripped of all conventional uses, it is a tacit admission

that a taking has occurred.

When properly viewed as an attempt at compensation

rather than a use of property, the question becomes, are TDRs

a legitimate substitute for the monetary compensation required

under the Constitution? The answer is no. This Court

decided in First English Evangelical Lutheran Church of

Glendale v. County of Los Angeles, 482 U.S. 304 (1987), that

the government (not another Tahoe Basin landowner) must

pay monetary compensation (not provide some administrative

remedy) when it takes private property.

Moreover, since under Nollan v. California Coastal

Commission, 483 U.S. 825 (1987), the demand for money in

exchange for permission to use one’s own land would

constitute “extortion” (id. at 837), the Tahoe Regional

Planning Agency cannot require other Tahoe Basin

landowners to buy TDRs from people like Mrs. Suitum in

exchange for permission to make a use of their land that

harms neither public health, safety or welfare nor the

environment. “Legislatures may not, under the guise of the

police power, impose restrictions that are unnecessary ... upon

the use of private property.” Washington ex rel Seattle Trust

Co. v. Roberge, 278 U.S. 116, 121 (1928).

Roberge and other cases also teach that this TDR scheme

violates due process because the constitutional ly required

remedy is contingent upon the cooperation of third parties

whose cooperation cannot be compelled.

sides

4

ARGUMENT

I

THIS CASE ILLUSTRATES

THE NEED FOR RIPENESS REFORM

A taking claim alleges a serious violation of constitu-

tional rights. “[T}he enjoyment of property rights was

regarded by the framers ... as an essential pre-condition to the

realization of other basic civil rights and liberties.” Lynch v.

Household Finance Corp., 405 U.S. 538, 544 (1971). Fed-

eral courts normally pride themselves as the defenders of civil

rights and liberties. “The First Congress created federal

courts as the chief--though not always the exclusive--isibunals

for enforcement of federal rights." McNeese v. Bd. af Educ.,

373 U.S. 668, 672 (1962).

Yet, despite the fact that our Constitution protects “[t}he

right to enjoy property without unlawful deprivation, no less

than the right to speak or the right to travel” (Lynch, 405 U.S.

at 552), federal courts seem to view taking claims as not

terribly important and somewhat beneath them. See Over-

street, The Ripeness Doctrine of the Takings Clause: A Survey

of Just How Far Federal Courts Will Go to Avoid Litigating

Land Use Cases, 10 J. LAND USE & ENVTL. L. 91 (1994).

The explanation for this attitude was given in Hoehne v.

County of San Benito, 870 F.2d 52S, 532 (9th Cir. 1989):

“[R]uling case law makes it very difficult to open the federal

courthouse door for relief from state and local land-use

decisions. The Supreme Court has erected imposing barriers

in MacDonald, Sommer & Frates v. Yolo County, 477 U.S.

340 (1986) and Williamson County [Regional Planning

Commission v. Hamilton Bank, 473 U.S. 172 (1985)}.”

One commentator has stated: “Although the Supreme

Court's holdings in Williamson ... and MacDonald ... rested

5

on procedural grounds, they have inflicted a great deal of

damage on private property rights. Indeed, more damage was

inflicted than if the Court had simply upheld the constitu-

tionality of the land use regulations.” Kassouni, The Ripeness

Doctrine and the Judicial Relegation of Constitutionally

Protected Property Rights, 29 CAL. W. L. REV. | (1992).

Federal courts have used the ripeness doctrine to turn

away approximately 95% of the regulatory taking claims filed.

See Blaesser, Closing the Federal Courthouse Door on Prop-

erty Owners: The Ripeness and Abstention Doctrines in Sec-

tion 1983 Land Use Cases, 2 HOFSTRA Prop. L. J. 73, 91

(1988).

Although many federal courts believe they are merely

diverting these cases to the state courts for decision (e.g.,

Pearson v. City of Grand Blanc, 961 F.2d 1211, 1214-15 (6th

Cir. 1992)), the ironic reality is that the state courts have

caught on to the utility of the ripeness doctrine as a means for

reducing their dockets, and they too routinely cite Williamson

and MacDonald as grounds for dismissal. E.g., R/L Assocs.

v. Klockars, 52 Wn. App. 726, 763 P.2d 1244, 1249 (Wash.

Ct. App. 1988).

The case at bar is an example of how government

attorneys take advantage of the ripeness doctrine to prevent

judges and juries from hearing the merits of even those cases

where an obvious constitutional violation has occurred.

Mrs. Suitum acquired her lot when construction of a

house on the lot was legal and anticipated by its residential

zoning. She paid fui! price for the lot, and subsequently also

paid utility and public improvement assessments. The lot is

surrounded on three sides by houses, and on the fourth side by

a paved street with curbs, gutters, and utility hook-ups for a

single family residence. First Amended Complaint at 3:1-8.

6

As part of its overall efforts to prevent sediment from

draining into Lake Tahoe, the Tahoe Regional Planning

Agency (TRPA) rezoned Mrs. Suitum's lot to prohibit any

land coverage or soil disturbance.

Ordinarily, this would be considered a denial of all

economically viable use and would be treated as a categorical

taking under Lucas v. South Carolina Coastal Council, 505

U.S. 1003, 1015 (1992). In such a case, the only issue left to

be decided is whether the proffered compensation is “just.”

MacDonald, 477 U.S. at 348.

Relevant to that inquiry would be TRPA's Transferable

Development Rights (TDR) program. As this Court stated in

MacDonald:

[A] Court cannot determine whether a

municipality has failed to provide “just

compensation” until it knows what, if any,

compensation the responsible administra-

tive body intends to provide. ... In Penn

Central Transportation Co. v. New York

City, for example, we recognized that the

Landmarks Preservation Commission ...

had authority in appropriate circumstances

to ... remit taxes, and iransfer develop-

ment rights.”

477 U.S. at 350 (emphasis added).

TRPA's regulations permit the owners of SEZ lots to

sell their “development rights” (after deducting 99%) if they

can find a willing buyer in TRPA's jurisdiction at a location

where TRPA will approve an increase in land coverage.

Under MacDonald, the availability of this program

should be treated as proffered compensation and considered in

7

determining what amount is yet due from TRPA to Mrs.

Suitum as just compensation. /d.

However, TRPA seeks to prevent the courts from ever

considering whether its TDR scheme fairly compensates

property owners for a taking. Therefore, they argue that the

courts may not decide whether a taking has occurred or just

compensation is due because the case is not ripe.

Citing statements in Williamson, MacDonald, and Lucas

that a property owner has a right to make economically bene-

ficial use of his property, TRPA asserts that TDRs are not an

attempt to compensate Mrs. Suitum, but are a “use” of her

land! Until Mrs. Suitum applies for approval of a TDR

transfer, they argue, no one knows exactly what uses will be

permitted on her land, and thus her taking claim is not ripe.

The Court of Appeals accepted this argument and there-

by shoe-homed this case into the “unripe” category as a quick

and easy way to dispose of it.

Property owners and their attorneys should be accorded

some leeway to decide whether government interference up to

a given point has been sufficient to establish a taking. In Mrs.

Suitum's case, for example, the Court of Appeals classified

her TDR allocation as a permissible “use.” Even if selling a

TDR were a “use,” she should have been allowed to try her

case on the theory that this “use” is not sufficient to avoid a

taking. After ali, this Court has said repeatedly that whether

the government has gone “too far” is an “essentially ad hoc,

factual inquir[y].” E.g., Lucas, 505 U.S. at 1015, Penn

Central, 438 U.S. at 124. Property owners should be allowed

to make the tactical decision whether they have assembled

enough facts to present their case.

Mrs. Suitum might also choose to try her claim on the

theory that, whether or not all uses have been denied, “the

landowner whose deprivation is one step short of complete is

... entitled to compensation.” Florida Rock Industries, Inc. v.

U.S., 18 F.3d 1560, 1569 (Fed. Cir. 1994); Lucas, 505 U.S.

at 1019 n. 8.

Or, Mrs. Suitum might try her claim on the theory that

prohibiting all construction on a residential lot “extinguish{es]

a fundamental attribute of ownership.” Agins v. City of

Tiburon, 598 P.2d 25 (Cal.Sup.Ct) (1979), aff'd on other

grounds, 447 U.S. 255, 262 (1980); Kaiser Aetna v. U.S.,

444 U.S. 164, 179-80 (1979).

Or, she might try her claim on the theory that, when she

and her husband purchased the lot it was advertised and zoned

exclusively for residential use, and that being the only purpose

for which they bought it, TRPA’s action has frustrated her

“reasonable investment-backed expectations.” Ruckelshaus v.

Monsanto Co., 467 U.S. 986, 1005 (1984).

Because each case is an ad hoc factual inquiry, this

Court has recognized a full palette of approaches for finding

that government regulation has gone “too far.” The ripeness

doctrine has been misused to preclude adjudication of Mrs.

Suitum's rights, even though she and her attorney believe they

can prove a taking on the present record.

Taking claims deserve the same access to judicial review

as any other constitutional claim. “[{T]he takings clause of the

Fifth Amendment [is] as much a part of the Bill of Rights as

the First Amendment or the Fourth Amendment; [and] should

[not] be relegated to the status of a poor relation.” Dolan v.

City of Tigard, 512 U.S. __, 114. S.Ct. 2309, 2320 (1994).

This Court should recast the ripeness doctrine so that property

owners who wish to try their case on its present facts may do

so.

9

This Court should also reverse the Court of Appeals

insofar as it held that TDRs are a potential “use” and that Mrs.

Suitum's failure to request approval of a TDR transfer makes

her case premature under the finality prong of the ripeness

doctrine. Selling TDRs is not a use of property. Moreover,

where, as here, the plaintiff is willing to stipulate that the

government would approve the transfer, there is no justifica-

tion for turning the plaintiff away on ripeness grounds.

ALLOWING THE OWNER TO TRANSFER

DEVELOPMENT RIGHTS CANNOT AVOID

A TAKING BECAUSE THE SALE OF

DEVELOPMENT RIGHTS IS NOT AN

ECONOMICALLY VIABLE USE OF LAND

This Court has oft repeated that a regulation which

prohibits all economically viable uses of property is a taking.

E.g., Agins, 447 U.S. at 260; Lucas, 505 U.S. at 1016.

Declaring a taking claim unripe on finality grounds requires

a finding that some economically viable use may yet be al-

lowed on the property that would avert a taking. MacDonald,

477 U.S. at 352; Williamson County Regional Planning

Commission v. Hamilton Bank, 473 U.S. 172, 191 (1985).

In this case TRPA contends that forcing Mrs. Suitum to

leave her lot undisturbed did not necessarily take her property

because an economically viable use may yet remain--namely,

the ability to sell 183 square feet of land coverage. Until

Mrs. Suitum attempts to make that use of her lot, TRPA

argues, her taking claim cannot even be considered.

TRPA's argument is balanced upon an unnatural defini-

tion of the word “use.” Take away TRPA's definition of “use”

and its whole position topples like a house of cards.

10

Merriam-Webster’s Collegiate Dictionary (10th Ed.)

defines “use” as meaning “to put into service.” It is the uti-

lization of a thing that is available, but idle, in order to derive

“benefit or profit” from it.

People buy land because it has the potential to be used,

in the normal sense of the word. Most purchasers intend to

utilize that potential themselves. However, even those pur-

chases that investors make purely for speculation are based on

the land’s potential for use by the next buyer. It is the prop-

erty’s potential for use that gives value. That is what makes

the property worth buying in the first place. “For what is the

land but the profits thereof[?}" Lucas, 505 U.S. at 1017

(quoting 1 E Cooke, Institutes, Ch 1, § 1 (1st Am ed 1812)).

Some land is good for farming, other land is good for

mining, while other land is good for grazing animals, or

cutting timber, or pumping oil, or pumping water, or con-

structing buildings. But in every case two things are evident:

(1) the activity produces a benefit or income, and (2) the

activity could not occur on land where ali ‘and coverage and

soil disturbance was outlawed.

This Court’s recognition of an owner's right to a “fair

return on their investment” demonstrates that “use” equates

with an activity that produces income. Pennell v. City of San

Jose, 485 U.S. at 13. One who invests in land expects more

than an eventual refund of his money. As stated by this

Court, “the return to the equity owner should be commensu-

rate with returns on investments in other enterprises having

corresponding risks.” FPC v. Hope Natural Gas Co., 320

U.S. at 603.

In the case of land that is developed with a building,

construction is not the end. It is the means to an end.

Whether the owner intends to live in the building, or rent it,

2 Ale Pa

or operate a business from it, the building is the “principal”

from which enjoyment or income will be derived.

The value of Mrs. Suitum’s residential lot was its poten-

tial to be used for the construction of a custom home. With

that potential taken away, and given the lot's size, its location

in the middle of a residential subdivision, and the prohibition

on any land coverage or soil disturbance, it has lost all ability

to be “put into service” for Mrs. Suitum to enjoy or produce

an income.

In Loretto v. Teleprompter Manhattan CATV Corp., 458

U.S. 419 (1981), where the taking was in the form of a

physical occupation of approximately two square feet of roof

space, this Court described the intrusiveness of a physical

occupation in terms that could also be used to describe the

effect of TRPA’s regulation on Mrs. Suitum's lot: “[{E]ven

though the owner may retain the bare legal right to dispose of

the occupied space,” he is “unable to make any use of the

property.” Jd. at 436.

Would the taking in Loretto have been avoided if the

State of New York had given Mrs. Loretto a marketable

coupon for two square feet of air space? Obviously not. It

follows that a TDR coupon cannot restore Mrs. Suitum’s

otherwise taken use any more than it could have restored Mrs.

Loretto’s use. At most, the TDR coupon is partial compensa-

tion for the rights taken.

In Del Monte Dunes at Monterey v. City of Monterey, 95

F.3d 1422 (9th Cir. 1996), the Court considered the possibil-

ity that in conjunction with a ban on property development, a

government agency might implement a “buy-out” program for

environmentally sensitive property:

A government buy-out, of course, would

not necessarily shield the government from

12

the Takings Clause. Rather, the buy-out

would likely implicate the issue of just

compensation. Thus, a landowner who

believed that the government bought out

his property at an unfairly low price might

choose to bring an action for just compen-

sation. The fact that he already received

some money from the government in re-

turn for his property does not establish as

a matter of law that economically viable

uses for his property remain.

Id. at 1432 (emphasis added).

Thus the Del Monte court held, “the mere fact that there

is one willing buyer of the subject property ... does not, as a

matter of law, defeat a taking claim.” See also Lucas, 505

U.S. at 1018-20 & n. 8 (rejecting the dissent's view that the

fact Lucas could have sold his property indicated no taking

occurred).

To determine whether regulation permits economically

viable use of property, the Second Circuit looks to “whether

the property use allowed by the regulation is sufficiently desir-

able to permit property owners to sell the property to someone

for that use.” Park Ave. Tower Assoc. v. City of New York,

746 F.2d at 139.

The development rights TRPA says Mrs. Suitum may

sell comprise only 1% of her parcel. Hence it is highly

unlikely that anyone would pay Mrs. Suitum the going rate for

a developable Lake Tahoe lot solely to acquire the ability to

sell 183 square feet of lot coverage to someone else.

Where a property owner is forced to perpetually main-

tain her land “in its natural state” a categorical taking is

assumed. Lucas, 505 U.S. at 1018. The government's offer

13

to approve the transfer of TDRs is not an economically viable

use which saves the regulation from going too far, it is a

gesture of compensation and, as such, is a tacit admission by

the government that a taking has occurred.

Even if selling TDRs were considered an economically

viable use of property, where, as here, the plaintiff is willing

to stipulate that the government would approve the transfer,

the court has no need to insist that the transfer be consum-

mated. Just as the Coastal Council in Lucas “stipulated below

that no building permit would have been issued” (505 U.S. at

1012 n.3), Mrs. Suitum is willing to stipulate that if she could

locate a buyer in a proper location for her 183 square feet,

TRPA would approve the transfer. Given that stipulation,

going through the actual process “would have been pointless,”

and is therefore unnecessary to satisfy the ripeness doctrine.

Id. In any event, however, like sale of the property, sale of

TDRs is not a use of property. TDRs are also not a valid

substitute for compensation.

ON THE MERITS, TRPA'S

TDR ALLOTMENT IS NOT A VALID

SUBSTITUTE FOR MONETARY COMPENSATION

When properly viewed as an attempt at compensation,

rather than a use of property, the issue becomes whether

government can avoid paying money by giving the owner a

marketable TDR coupon instead.

For many years some states did not recognize a right to

receive monetary compensation as the remedy for a regulatory

taking. See e.g., Agins v. City of Tiburon, 598 P.2d 25

(Cal.Sup.Ct) (1979), aff'd on other grounds, 447 U.S. 255

(1980). Where a property owner established that regulation

had gone too far, the California courts would issue a writ of

14

mandate providing an administrative remedy. That changed

in 1987 when this Court decided First English Evangelical

Lutheran Church of Glendale v. County of Los Angeles, 482

U.S. 304.

The California court framed the issue in First English as

“the question whether a state may constitutionally limit the

remedy for a taking to nonmonetary relief.” Id. at 309 (em-

phasis added). This Court similarly described its task as “the

question whether the Just Compensation Clause requires the

government to pay for ‘temporary’ regulatory takings.” Jd. at

313 (emphasis added).

After reviewing prior cases and “the duty to pay imposed

by the Amendment” itself (at 315), this Court held “the Fifth

Amendment requires that the government pay the landowner

for the value of the use of the land [taken}.”

As to whether a post-deprivation administrative remedy

would suffice, this Court stated:

[WJhere the government's activities have

already worked a taking of all use of prop-

erty, no subsequent action by the govern-

ment can relieve it of the duty to provide

compensation for the period during which

the taking was effective.

Id. at 321 (emphasis added).

Similarly, TRPA's activities have taken all use of Mrs.

Suitum's property. The District Court found that the transfer

of rights is the only avenue left open to Mrs. Suitum. Appen-

dix D at 3.

TRPA's offer to approve a TDR transfer is a nonmone-

tary “subsequent action” like the administrative remedy struck

th al

a

15

down in First English. As such, it does not relieve TRPA of

the duty to pay monetary compensation.

TRPA's TDR program is a shell game, easily exposed

when one considers whether TRPA could do directly what it

now does indirectly. Suppose that, instead of imposing on

Mrs. Suitum the responsibility of finding a buyer for her

TDRs, TRPA were to pay cash to Mrs. Suitum, then sell the

TDRs itself.

Imagine one day a property owner elsewhere in TRPA's

jurisdiction approaches TRPA and asks for a permit to build

a 2,000 square foot house. He learns that TRPA's regulations

allow some land coverage on his parcel, but only enough to

build a 1,820 square foot house.

Since his plans are alread; drawn, and there is adequate

land for a 2,000 square foot nouse, the owner applies for a

variance. TRPA finds that the public health, safety, and

welfare would not be harmed by a larger house, nor would the

environment. TRPA therefore approves the variance, but

informs the owner that it will cost him $20,000 to buy the use

of the additional square footage of his land.

Under this Court's holding in Nollan v. California

Coastal Commission, 483 U.S. 825, the demand for money in

exchange for permission to use one's own land constitutes

“extortion.” Id. at 837. Applying the Nollan analysis, had

TRPA simply demanded $20,000 from the man, rather than

conditioning his variance upon such a payment, “no doubt

there would have been a taking.” id. at 831. See also Webb's

Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 164

(1980) (money is property, and is protected by the Takings

Clause).

“Given, then, that requiring [the payment] outright

would violate the Fourteenth Amendment, the question be-

16

comes whether requiring it ... as a condition for issuing a land

use permit alters the outcome.” Nollan, 483 U.S. at 834.

“[A] permit condition that serves the same legitimate

police-power purpose as a refusal to issue the permit should

not be found to be a taking if refusal to issue the permit would

not constitute a taking.” Id. at 836.

First of all, TRPA’s refusal to issue the variance would

constitute a taking. Land use regulation constitutes a taking

whenever it does not “substantially advance legitimate state

interests.” Jd. at 834; Agins, supra, 447 U.S. at 260. Since

increasing the owner's lot coverage will not harm public

health, safety, welfare, or the environment, denial of his

request to enjoy the use of his own land would be arbitrary.’

The governmental power to interfere by

zoning regulations with the general rights

of the land owner by restricting the charac-

ter of his use, is not unlimited and, other

questions aside, such restriction cannot be

imposed if it does not bear a substantial

relation to the public health, safety, mor-

als, or general welfare.”

Nectow v. Cambridge, 277 U.S. 183, 188 (1927).

“Legislatures may not, under the guise of the police

power, impose restrictions that are unnecessary ... upon the

use of private property.” Washington ex rel Seattle Trust Co.

v. Roberge, 278 U.S. at 121. For “the right to build on one’s

' If it would harm the public health, safety or welfare,

or the environment, TRPA could not approve the site as a

receiving area under its own regulations.

17

Own property ... cannot remotely be described as a ‘govern-

ment benefit."” Nollan, 483 U.S. at 833 n. 2.

Second, even if TRPA could lawfully refuse to issue the

permit, the demand for $20,000 would not serve the same

purpose as permit denial. Permit denial would limit iand

coverage on the parcel to 1,820 square feet. The $20,000 will

neither limit land coverage on the lot nor mitigate the addi-

tional land coverage. Someone might argue that the $20,000

will be used to prevent land coverage on Mrs. Suitum’s lot.

But that is untrue. TRPA's SEZ regulations already prohibit

land coverage on Mrs. Suitum's lot, whether this other owner

shows up for a variance or not. The $20,000 will merely

replenish TRPA’s budget.

Since TRPA cannot directly charge permit applicants for

increased lot coverage, it should not be allowed to indirectly

charge them by artificially lowering their land coverage ratio

below what public health, safety, and welfare require, then

forcing them to buy back land coverage from people like Mrs.

Suitum to whom TRPA owes money.

Finally, TRPA’s TDR program is not a legitimate

substitute for monetary compensation because it makes the

constitutionally required remedy contingent upon Mrs. Suitum

obtaining the cooperation of a third party whose cooperation

she cannot compel.

To convert her TDR coupon into cash Mrs. Suitum must

find (1) a willing third party (2) who owns land under TRPA's

jurisdiction, (3) whose land is vacant or not fully utilized, (4)

who wants to build or expand, (5) now or in the near future,

and (6) whose plans, including expanded land coverage,

would be approved by TRPA. Then, if the supply and de-

mand conditions of the market are such that TDR coupons sell

for the fair market value of the land coverage they represent,

Mrs. Suitum will receive the cash value of the use (but not the

ownership) of 183 square feet, less the costs of sale (e.g.,

advertising and broker's commission). She will not be com-

pensated for the other 99% of her property. Any debt service

on the property, including the 183 square feet, will still be her

responsibility. Any taxes, including for the 183 square feet,

will still be her responsibility. 7

All of the six conditions listed above may or may not

exist, and are not within Mrs. Suitum’s control.

In Washington ex rel. Seattle Trust Co. v. Roberge,

supra, this Court struck down a Seattle zoning ordinance

requiring plaintiffs who sought to rebuild a home for the aged

poor to first get the written consent of two-thirds of the prop-

erty owners within 400 feet of the project. The Court held

that it is “repugnant to the due process clause of the Four-

teenth Amendment” to empower other property owners with

authority to frustrate plaintiff's property rights. Id., 278 U.S.

at 144, “They are not bound by any official duty, but are free

to withhold consent for selfish reasons or arbitrarily and may

subject [plaintiff] to their will or caprice.” Id.

A similar holding, although based upon citations to state

court precedents, is found in Sederquist v. City of Tiburon,

765 F.2d 756 (9th Cir. 1984) where the Court of Appeals held

that property rights cannot be constitutionally conditioned

upon the property owner securing the “joint action” of third

persons whose action cannot be compelled by him. /d. at

760-61. See also Eubank v. City of Richmond, 226 U.S. 137,

144 (1912) (“There is control of the property of plaintiff ... by

other owners of property exercised under the ordinance. This,

as we have said, is the vice of the ordinance, and makes it, we

think, an unreasonable exercise of the police power").

In the same way, requiring Mrs. Suitum to secure the

cooperation of some unidentified (and perhaps nonexistent)

third party before she can receive compensation, when the co-

19

operation of that third party is not compelled, is a violation of

her right to due process.

+

CONCLUSION

For the reasons above stated, this Court should reverse the

Court of Appeals insofar as it held that a taking of all use of the

subject property is not ripe for review until the owner pursues

the sale of TDRs, and insofar as it held that TDRs are a poten-

tially viable economic use of property. For guidance on remand,

this Court should also consider whether TRPA’s TDR scheme

acts as a legitimate substitute for monetary compensation, and

hold that it does not.

DATED: November 27, 1996.

Respectfully submitted,

TavoTny A. BirTLe RICHARD M. STEPHENS

Of Counsel Jorn M. Groen

Groen & Stephens

411 - 108th Avenue NE,

Suite 1750

Bellevue , Washingion 98004-5515

(206) 453-6206

Attorneys for Amicus Curiae