Amicus Curiae Brief — Lingle v. Chevron USA Inc.

Suprcm Court US

'

y JAN } & 2005

No. 04-163 UTRICE OF Dik CLERK

EE

In The

Supreme Court of the United States

LINDA LINGLE, Governor of Hawaii, et al.

Petitioners,

v.

CHEVRON U.S.A,, INC.,

Respondent.

On Writ Of Certiorari To The United States

Court Of Appeals For The Ninth Circuit

BRIEF OF AMICUS CURIAE

NATIONAL ASSOCIATION OF HOME BUILDERS

IN SUPPORT OF RESPONDENT

DUANE J. DESIDERIO MICHAEL M. BERGER*

NATIONAL ASSOCIATION OF MANATT, PHELPS & PHILLIPS.

HOME BUILDERS LLP

1201 15" Street, N.W, *Counsel of Record

Washington, D.C. 20005 111355 West Olympic

Telephone: (202) 866-8200 Boulevard

Los Angeles, CA 90064-1614

Telephone: (310) 312-4000

Attorneys for Amicus Curiae

The National Association of Home Builders

EES

TABLE OF CONTENTS

Page

INTEREST OF AMICUS CURIAE coccccccccccccccccscsccscccceccsceee. |

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

AGINS ESTABLISHED ITS RULE BY

HOLDING, NOT BY DICTUM, AND THE

COURT HAS HEWED TO IT EVER SINCE......... 5

TAKINGS AND DUE PROCESS ARE

DIFFERENT THEORIES, THERE IS NEED

AND ROOM FOR BOTH IN EVALUATING

THE PROPRIETY OF REGULATIONS ............... 8

A Economic Impact Has Never Been The

Sine Qua Non Of The Takings Clause. ....... 8

B A "Substantial Advancement"

Analysis Is Not The Sole Province Of

The Due Process Clause. ..........ccccccccccccceees 10

C The Regulators Over-Read The Court's

Decision in First English. ..ccccccccccccccccceee 18

TABLE OF CONTENTS

(continued)

Page

i A MERE GOVERNMENTAL STATEMENT

THAT REGULATION IS UNDERTAKEN

TO ADVANCE THE PUBLIC INTEREST

CANNOT BE ACCEPTED ON FAITH.

REAL JUDICIAL INQUIRY IS REQUIRED..... 21

A The Bill of Rights Was Designed To

Restrict The Power of Government.

This Court Has Consistently Applied

That Restriction Under The Takings

CORMBB, .coccccocevcccscesssccsssevsseseeesinnnnnninnnnnnnan 21

B An Elevated Level Of Judicial

Scrutiny Is Necessary To Vindicate

The Protection Intended By The

Takings Clause, ....c.cvcccsscsrsssseseserssossoonesssnees 24

CONCLUSION ...cccrccrrcccscscccovevcersessesessosensesonssssossssssssssnne 29

TABLE OF AUTHORITIES

Page

CASES

Agins v. City «f Tiburon,

447 U.S. 255

I iiliietiiidstcecenccccensncecs 2, 3, 5, 8, 9, 10, 15,

EES EE 17, 19, 22, 25, 28, 30

Andrus v. Allard,

Ee 6, 8

Armendariz v. Penman,

75 F.3d 1311 (9th Cir. 1996) (en banc).................. 16

Armstrong v. U.S.,

a anesuennonens 29

Babbitt v. Sweet Home Chapter of

Communities for a Great Or.,

re 2

Babbitt v. Youpee,

a 6,9

Bateman v. City of West Bountiful,

89 F.3d 704 (10th Cir. 1996)..............ccccccceceeeeeeseees 16

Berman v. Parker,

Ee 13, 15

Borden Ranch P’Ship v. U.S. Army Corps

of Engineers,

EEL 2

City of Cu —~ 4 Falls v. Buckeye Cmty.

a US. 188

I ccnenenenten 2

City of Monterey v. Del Monte Dunes,

ET 2, 5, 7, 22

TABLE OF AUTHORITIES

(continued)

Page

Collins v. Harker Heights,

ye cncinscnicennuinsnvenensitienitebivinanians 16

County of Sacramento v. Lewis,

es Ce ctnctnintictitintnincentinnaainineaiiieiediuiaiia 27

Del Monte Dunes at Monterey v. City of

Monterey, 95 F.3d 1422

re 7, 8, 23, 25, 29

Delaware, Lackawana & Western Ry. Co.

v. Morristown, 276 U.S. 182 (1928) .................0.. 11

Dolan v. City of Hoo

$12 U.S. 374 (1994)...............0.+. 2, 10, 24, 25, 27, 28

Ehrlich v. City of Culver City,

ee es Ce CR iccntececesieninisanniiiininninninnniis 25

First English Evangelical Lutheran Church

v. County of Los Angeles,

GBS U.S. SOS (IGG 7) nceccccccccoscceccscssees 2, 12, 18, 19, 23

Florida Prepaid Postsecondary Ed.

Expense Bd. v. College Savings Bank,

ST ii il 25

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

18 F.3d 1560 (Fed. Cir. 1994). 00000 16

Graham v. Connor, 490 U.S. 386 (1989) ..00000.... 16

Hawaii Housing Auth. v. Midkiff,

I a ne 12

Hodel v. re >

481 U.S. 704, 718 (1987).........6, 8, 9, 15, 18, 19, 28

Hughes v. Washington,

I 10

TABLE OF AUTHORITIES

(continued)

Page

Kaiser Aetna v. U.S.,

I Ci 15

Kelo v. City of New London,

I a a I 4

Kelo v. City of New London,

843 A.2d 500 (Conn. 2004), cert.

SE, CE > OF GD ctcccnsnnccceneesmsememmennen 2

Kennedy v. Mendoza-Martinez,

I i 21

Keystone Bituminous Coal Assn. v.

DeBenedictis, 480 U.S. 470

TRATES 6, 8, 11, 15, 18, 19

Levin v. Upper Makefield Township,

No. 04-300 aa el 27

Lindquist v. Buckingham Township,

9 | A LE NET LET ETT ee 27

Lochner v. New York,

8 rT eee 16, 27

Loretto v. Hoa ry r Manhattan CATV

OU 9,15

Lucas v. South Carolina Coastal Council,

os SLES E 2, 15, 28

MacDonald, Sommer & Frates v. Yolo

County, 477 U.S. 340 (1986) ..............ccccccceeeeeees 2, 15

Marbury v. Madison,

DO 21

Minnesota v. Clover Leaf Creamery Co.,

IE 26

TABLE OF AUTHORITIES

(continued)

Page

Monell v. Department of Social Services,

I 17

Monroe v. Pape, 365 U.S. 167 (1961) ...............cccceeeee 17

Moore v. City of East Cleveland,

I alan 12

Nestor Colon Medina & Sucesores, Inc. v.

Custodio, 964 F.2d 32 (1st Cir. 1992)... 26

Nollan v. California Coastal Comm'n,

483 U.S. 825 (1987) .....2, 6, 8, 14, 18, 19, 23, 24, 25

Palazzolo v. Rhode Island,

ETT EE 2,8, 12

Pearson v. C ity of Grand Blanc,

te by | f (s 5 a 26

Penn Central Transp. Co. v. City of New

York, 438 U.S. 104

TEESE SEE 3, 8, 9, 14, 15, 25, 29, 30

Pennsylvania Coal Co. v. Mahon,

EE 10, 11, 15, 22

Rochin v. California,

I i 27

S. Fla. Water Mgmt. Dist. v. Miccosukee

Tribe of Indians, 124 S. Ct. 1537

leh Daler RE, SRR eee Pome ere aE ee 2

San Diego Gas & Elec. Co. v. City of San

Diego, 450 U.S. 621 (1981) ................. 2, 10, 12, 15

San Remo Hotel v. City and County of

SD FUBMGIIOD, FED. BG SG cccccccccccccccsccccceccscccsssccsses 20

vi

TABLE OF AUTHORITIES

(continued)

Page

Solid Waste Agency of N. Cook County v.

U.S. re! y, AY Engineers,

8 ne 2

South County Sand & Gravel v. Town of

South + 160 F.3d 834

| AT, FP ae 16

Suitum v. Tahoe Reg. Planning Agency,

ERE ee 2

Tahoe-Sierra Preservation Council v.

Tahoe Reg. Plan. Agency,

a ean 2,7,8

U.S. v. Carolene Prods., 304 U.S. 144

STITT iineabiiiiiaiteiiata ape ceaiaatintanaeanaaaareaasiai 29

U.S. v. Vajakajian, 524 U.S. 321, 324

ST inseideliehcetineiiiaentinentetaitereiptma ta raatetaaaitate 25

United Artists v. Township of Warrington,

oo 26

Williamson County Reg. Plan. Comm'n v.

Hamilton Bank, 473 U.S. 172 (1985). .............. 2, 20

Winger v. Aires,

SY SETI: SONI cccernscersnnicernientenecensnnnitnciemsiis 22

Yee v. City of Escondido,

ee I ciincirsncndinnnitntinnmmnnnnidtiainiiita 12

vil

TABLE OF AUTHORITIES

(continued)

CONSTITUTION

ET AAA AR CR TNE

| TTT: Te 27

I 1, 2,4, 27

STATUTES

| Eee ne 15,17

OTHER AUTHORITIES

Eagle, Regulatory Takings,

SRE Eo 27

Hentoff, Living the Bill of Rights

GD sinceercarsnsssscbieneienicinnninnnnmnniiniiiansotinis

Michelman, Property, Utility, and

Fairness: Comments on the Ethical

Foundations of "Just Compensation"

Law, 80 Harv. L. Rev. 1165.

Van Alstyne, Taking or Damaging by

Police Power: The Search for Inverse

Condemnation Criteria, 44 §. Cal. L.

SS ae

Waite, Governmental Power and Private

Property, 16 Cath. U.L. Rev. 283

RN a PRES SANE Oe ee ee

vill

nn

With the joint written consent of the parties filed

with the Clerk of the Court, the National Association of

Home Builders (NAHB) respectfully submits this brief

as amicus curiae.’

INTEREST OF AMICUS CURIAE

NAHB represents more thar. 215,000 builder and

associate members throughout the United States. Its

members. include people and firms that construct and

supply single family homes, as well as apartment,

condominium, commercial, and industrial structures,

land developers, and remodelers. It is the voice of the

American shelter industry. It is — and historically has

been — vitally concerned with judicial decisions dealing

with government regulation of property, with a

particular interest in this Court's interpretation and

application of the 5th Amendment.

NAHB has appeared before the Court as an

amicus curiae or “of counsel" to property owners in a

number of cases involving the rights and remedies of

those adversely affected by governmental actions.

These began with the case that has become the focal

point at bench, Agins v. City of Tiburon, 447 U.S. 255

(1980), and continued with San Diego Gas & Elec. Co.

v. City of San Diego, 450 U.S. 621 (1981); Williamson

County Reg. Planning Comm'n v. Hamilton Bank, 473

U.S. 172 (1985); MacDunald, Sommer & Frates v. Yolo

Counsel for amicus curiae authored this brief in

whole and no other person or entity other than amicus, its

members or counsel have made a monetary contribution to

the preparation or submission of this brief.

County, 477 U.S. 340 (1986); First English Evangelical

Lutheran Church v. County of Los Angeles, 482 U.S.

304 (1987); Nollan v. California Coastal Comm'n, 483

U.S. 825 (1987);° Lucas v. South Carolina Coastal

Council, 505 U.S, 1003 (1992); Dolan v. City of Tigard,

512 U.S. 374 (1994); Babbitt v. Sweet Home Chapter of

Communities for a Great Or., 515 U.S. 687 (1995);

Suitum v. Tahoe Reg. Planning Agency, 520 U.S. 725

(1997), City of Monterey v. Del Monte Dunes, 526 US.

687 (1999); Palazzolo v. Rhode Island, 533 U.S. 606

(2001); Solid Waste Agency of N. Cook County v. U.S.

Army Corps of Engineers, 531 U.S. 159 (2001); Tahoe-

Sierra Preservation Council v. Tahoe Reg. Planning

Agency, 535 U.S. 302 (2002); Borden Ranch P'Ship v.

U.S. Army Corps of Engineers, 537 U.S. 99 (2002); City

of Cuyahoga Falls v. Buckeye Cmty, Hope Found., 538

U.S. 188 (2003); S. Fla. Water Mgmt. Dist. v.

Miccosukee Tribe of Indians, 124 §, Ct. 1837 (2004) and

Kelo vy. City of New London, 843 A.2d 500 (Conn,

2004), cert. granted, 125 §.Ct. 27 (2004),

SUMMARY OF ARGUMENT

1. This Court's decision in Agins v. City of

Tiburon, 447 U.S. 255 (1980), plainly held that a Sth

Amendment taking of property occurs when a regulation

fails to substantially advance a legitimate state interest,

contrary to the repeated assertions of Petitioners and

their amici, who insist that it was mere dictum. — In

Agins, the Court first’ described its two-pronged

The Court's opinion cited NAHB's brief. (483

U.S. at 840.)

alternative test for regulatory takings and then held that

the city's regulation substantially advanced a legitimate

State interest, thus eliminating any need to determine

whether there was any adverse economic impact. It has

become a regulators’ fiction, a modern urban myth, to

describe the test as "dictum," but the regulators’ position

is nonetheless fiction. The test was an integral part of

the Court's holding. Eliminating one of the test's two

prongs would require overruling Agins and, at least in

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

U.S. 104 (1978), a result that would be as unfortunate

for takings jurisprudence as it would be out of pattern

with the Court's other decisions.

2. There is no basis for the Petitioners' charge

that the Agins formulation was the result of this Court's

"confusion" between takings and due process doctrine.

Rather, as this Court's later opinions fleshed out, there is

a substantial relationship between takings and due

process that sometimes makes them resemble each other.

The Court, for example, has explained that the breadth

of the eminent domain power is "coterminous" with the

scope of the police power, although the former is

reviewed under the Takings Clause and the latter under

the Due Process Clause.

The relationship between the two powers may be

most clearly seen in the "public use" restriction on the

power of eminent domain (otherwise an inherent power

of government). If a deliberate attempt to exercise

eminent domain is found not to be for a public use, then

the taking is enjoined as invalid.’ In similar fashion, if a

regulation fails to substantially advance a iegitimate

state interest, it 1s also enjoined as invalid (with

compensation for any temporary taking that occurred

while the invalid regulation was enforced), Both

theories operate under, and are judged by, the Takings

Clause,

3. The real crux of the regulators’ position here is

not whether their actions are challenged under a taking

theory or a due process theory, but what standard of

review is applied. Regardless of the constitutional

theory, they want a standard of review that is so

deferential as to be a virtual rubber stamp. That does not

fit with this Court's settled jurisprudence nor with this

Nation's development.”

In order to vindicate the Sth Amendment's

protection of the rights of private property owners, it is

essential that the judiciary engage in an elevated form of

review, something that will actually ensure that the

Takings Clause is effectuated, not merely mouthed.

‘ The public use issue is currently before the Court

in Kelo v. City of New London, no. 04-108, set for oral

argument the same day as this case.

’ They have perhaps lost sight of the fact that our

forebears revolted against the British because they had

no real ability to have substantial regulatory review.

(Events like the Boston tea party come to mind.)

4

AGINS ESTABLISHED ITS RULE BY HOLDING, NOT

BY DICTUM, AND THE COURT HAS HEWED TO IT

EVER SINCE,

The strange governmental premise at bench is

that the regulators are merely asking the Court to clear

away a bothersome "dictum" that has never formed a

holding of the Court. (E.g., Lingle 25.) That is a false

premise.” In opinions authored by a variety of Justices,

the Court has regularly applied the test.

In Agins, the Court laid down the rule for

evaluating regulatory taking claims (447 U.S. at 260)

and then applied that rule by holding that the city had

met the standard: "the zoning ordinances substantially

. The Solicitor General's repetition of this

argument (US 24) is particularly troublesome. The

arguments of that office are rightly respected by this

Court. But the Solicitor General never questioned the

validity of the Agins formulation before its amicus brief

in City of Monterey v. Del Monte Dunes, 526 U.S. 687

(1999) (as NAHB demonstrated in its own amicus brief

in that case, pp. 16-17, fn. 5) and this Court refused to

consider the argument there. Indeed, even in this case,

the Solicitor General concedes that the Court upheld the

regulation in Agins because it "did ‘substantially advance

legitimate governmental goals .. . ." (US 24, fn. 14;

emphasis in original), plainly denoting a holding. So

why attack the rule as "dictum" when it clearly was not

and the Solicitor General knows it was not?

5

advance legitimate governmental goals." (447 U.S. at

261 |Powell, J.].) That was not dictum; it was ratio

decidendi,

Thereafter, in Hodel v. Irving, 481 U.S, 704, 718

(1987), the Court struck down a federal statute, holding

it went "too far" because its proper purpose would not

always be advanced by its application. ({O'Connor, J.].)°

In Nollan, this Court again applied the standard

and held that the California Coastal Commission had

failed the test of advancing the public purpose and

therefore its permit condition was invalid. (483 U.S. at

837 |Scalia, J.J.)

In Andrus y. Allard, 444 U.S. 51 (1979), the

Court began its analysis of the constitutionality of the

Eagle Protection Act by concluding that its terms

reasonably advanced its purposes (444 U.S. at 57-58

[Brennan, J.]), presaging Agins and using the same kind

of Takings Clause analysis to uphold the statute.

In Keystone Bituminous Coal Assn. _ ¥v.,

DeBenedictis, 480 U.S. 470, 485 (1987), the Court

summarized the rule this way: “We have held that land

use regulation can effect a taking if it ‘does not

substantially advance legitimate state interests. .. .'

{Citing Agins.|" (Emphasis added [Stevens, J.].)

, Congress’ later attempt to "fix" the statute was

struck down for the same reasons. (Babbitt v. Youpee,

519 U.S. 234 [1997] (Ginsburg, J.].)

6

In Del Monte Dunes, a property owner proved at

trial that "none of the City's stated reasons for denying

its application was sufficiently related to the City's

legitimate interests." (Del Monte Dunes at Monterey vy.

City of Monterey, 95 F.3d 1422, 1430 [9th Cir, 1996],

affd sub nom. City of Monterey v. Del Monte Dunes,

526 U.S. 687 [1999].) The evidentiary clash is

discussed in detail in the Court of Appeals' opinion (95

F.3d at 1430-1432), and noted with this Court's

comment that the owner "submitted evidence designed

to undermine the validity of the asserted factual

premises for the city's denial of the final proposal. . . ."

(526 U.S. at 699; emphasis added [Kennedy, J.].)’

More recently, in Tahoe-Sierra Preservation

Council v. Tahoe Reg. Plan. Agency, 535 U.S. 687

(2002), the Court reiterated that considerations of

"fairness and justice" could require relief under the

Takings Clause if a regulation "did not substantially

advance a legitimate state interest." (535 U.S. at 334

(Stevens, J.].) In support, the Court cited both Agins and

Del Monte Dunes.

The "substantially advance" theory is an

embedded part of Takings Clause jurisprudence. The

, Del Monte Dunes was a 5-4 decision on the 7th

Amendment issue of whether liability shoula j.ave been

decided by judge or jury, but the four dissenters agreed

that a decision on the validity of the city's action was

appropriate for trial under the Takings Clause. The only

disagreement was on the question of who made that

ultimate decision. (See 526 U.S. at 755, fn. 14.)

J

Court has used it to uphold regulations (Agins, Andrus),

to strike down regulations (Nollan, Hodel), to uphold a

compensatory award (Del Monte Dunes) and has

referred to it repeatedly (e.g., Keystone, Tahoe-Sierra),

Calling it dictum doesn't change those facts.

TAKINGS AND DUE PROCESS ARE DIFFERENT

THEORIES, THERE IS NEED AND ROOM FOR

BOTH IN EVALUATING THE PROPRIETY OF

REGULATIONS.

The regulators assert that this Court was

"mistaken" and "confus[ed]" about takings and due

process when it established Agins' two part disjunctive

lest for a regulatory taking. (Lingle 23, 28.) NAHB

demurs. The Court plainly recognized a proper sphere

for each theory, and the relevance to the Takings Clause

of both substantial advancement of legitimate interests

and economic impact.

A

Economic Impact Has Never Been The Sine Qua Non

Of The Takings Clause.

Agins was decided shortly after Penn Central

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

— and Penn Central is recognized as the polestar of this

Court's modern takings jurisprudence. (E.g., Tahoe-

Sierra Preservation Council v. Tahoe Reg. Plan.

Agency, 535 U.S. 302, 327, fn. 23 [2002]; Palazzolo v.

Rhode Island, 533 U.S. 606, 633 [2001}.)

In laying out the proper mode of analysis for

regulatory taking cases, this Court made clear that there

were many factors to be considered, and economic

impact was merely one of a group of factors to consider

in what must be “essentially ad hoc, factual inquiries."

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

Thus, when Agins held that either economic

impact or failure to substantially advance legitimate

state interests would suffice to invoke the protection of

the Takings Clause, it was merely amplifying what the

Court established in Penn Central two years earlier.

Later cases continued that development.

In Loretto v. Teleprompter Manhattan CATV

Corp., 458 U.S. 419 (1982), a case challenging a New

York statute authorizing the installation of cable TV in

apartment buildings over the owners’ protests, the Court

found a taking regardless of the fact that the amounts

involved were de minimis.

In Hodel v. Irving, 481 U.S. 704 (1987), a case

challenging a congressional scheme to escheat miniscule

estates of Native Americans in order to reduce the

government's administrative costs, the Court found a

taking regardless of the fact that the property interests

involved were worth less than $100 each. (See also

Babbitt v. Youpee, 519 U.S. 234 [1997] [amended statute

struck down in similar fashion].)

In Dolan vy. City of Tigard, 512 U.S. 374 (1994),

the Court found that conditions to a land use permit

amounted to a taking because they were not “roughly

proportional” to the projected impact of the proposed

development. A taking was found even though Mrs.

Dolan “assuredly [was] able to derive some economic

use from her property." (512 U.S. at 385, fn. 6;

emphasis, the Court's.)

In short, although economic impact can be an

important factor in regulatory takings, it is not the sole

— or even determinative — factor. It never was.

A "Substantial Advancement" Analysis Is Not The

Sole Province Of The Due Process Clause.

At the heart of the regulators’ substantive

argument is the neo-Lochnerian notion that “failure to

substantially advance a legitimate state interest” is

“really” a substantive due process standard, rather than a

takings standard. (Lingle 23.)

But the Agins formulation fits with this Court's

consistent view of regulatory takings as well as its view

of the relationship of substantive due process to the

enumerated protections in the Bill of Rights.

First, since Pennsylvania Coal Co. v. Mahon, 260

U.S. 393 (1922), the Court's regulatory taking law has

been premised on the concept that a taking occurs when

an exercise of the police power goes “too far." All of the

10

Court's subsequent regulatory takings jurisprudence has

explicated the meaning of “too far" and described how

one draws that line. But the only way to determine that

answer is to examine the regulatory action and

determine precisely what it does and how it does it.

(Hughes v. Washington, 389 U.S. 290, 298 [1967];

Stewart, J., concurring. See also San Diego Gas & Elec.

Co. v. City of San Diego, 450 U.S. 621, 652-653 [1981];

Brennan, J., dissenting but apparently expressing the

substantive view of a majority of the Court [see 450 U.S.

at 633-634; Rehnquist, J., concurring]}.)

Plainly, one of the ways in which government

regulators can go “too far" is by enactuug regulations

thought to be in the public interest but which, in fact, fail

to substantially advance that interest.”

"Pennsylvania Coal instructs courts to examine

the operative provisions of a statute, not just its

stated purpose, in assessing its true nature. In

Pennsylvania Coal, that inquiry led the Court to

reject the Pennsylvania Legislature's stated

purpose for the statute... ." (Keystone, 480

U.S. at 487, fn. 16.)

Justice Stevens analyzed the Court's application

of the Takings Clause in Pennsylvania Coal this way:

. Shortly after Pennsylvania Coal, the Court struck

down another regulation as a taking because the

government lacked a proper regulatory purpose.

(Delaware, Lackawana & Western Ry. Co. ¥.

Morristown, 276 U.S. 182, 195 [1928].)

"In his opinion for the Court, Mr. Justice

Sutherland fused the two express constitutional

restrictions on any state interference with

private property — that property shall not be

taken without due process nor for a public

purpose without just compensation — into a

single standard." (Mvore v. City of East

Cleveland, 431 U.S. 494, 514 [1977]; Stevens,

J., concurring.)

Thus, in Justice Stevens’ view, the East Cleveland

ordinance in Moore was invalidated as a taking because

analysis showed there was no justification for the

ordinance. (431 U.S. at 520.)

In San Diego Gas, Justice Brennan's nominally

dissenting opinion concluded that California's courts had

contradicted this Court's clear precedents by holding that

“a city's exercise of its police power, however arbitrary

or excessive, cannot as a matter of law constitute a

‘taking’ within the meaning of the Fifth Amendment.”

(450 U.S. at 647.)”

In Hawaii Housing Auth. v. Midkiff, 467 U.S.

229, 240 (1984), Justice O'Connor explained for the

Court that “the ‘public use’ requirement is .. .

coterminous with the scope of a sovereign's police

powers.” Justice O'Connor amplified this thought in Yee

v. City of Escondido, 503 U.S. 519, 530 (1992), a case

° Justice Brennan's view became the basis for the

Court's decision in First English, which cites the

Brennan dissent repeatedly and tracks its analysis.

12

challenging rent control regulations as a taking of

property, concluding that a regulatory taking depends on

“whether there is a sufficient nexus between the effect of

the ordinance and the objectives it is supposed to

advance." Justice O'Connor then returned to this theme

more recently in Palazzolo, showing how “{[t)he first

question” in a takings analysis is whether "application of

a regulation constitutes a valid exercise of the police

power.” (533 U.S. at 636; O'Connor, J., concurring.)

In Berman v. Parker, 348 U.S. 26, 31 (1954), the

Court evaluated “public use” in a direct condemnation

case by noting that "[wJe deal, in other words, with what

traditionally has been known as the police power."

As the Solicitor General put it in his amicus

curiae brief in this case:

"(Indeed the ‘public use’ requirement would be

a proper basis under the Just Compensation

Clause for any examination parallel to that

under the Due Process Clause of whether the

governmental action could rationally be

expected to advance a legitimate public

purpose.” (US 22, fn. 10.)

In other words, the Takings and Die Process

Clauses are not separated in hermetically sealed

containers, as the regulators would have it. Rather, they

are closely related — “fused,” to use Justice Stevens’

13

word, or “coterminous,” to borrow Justice O'Connor's.'”

A regulation that goes “too far,” like the Hawaii statute

at bench, violates the Takings Clause, regardless of any

due process analysis. (Nollan, 483 U.S. at 835, fn. 3.)

As the polestar Penn Central opinion put it, "a use

restriction may constitute a ‘taking’ if not reasonably

necessary to the effectuation of a substantial government

purpose.” (438 U.S. at 127.)'!

10

Scholars kave long understood this, denigrating

attempts to segregate the two powers. See, e.g., Waite,

Governmental Power and Private Property, 16 Cath.

U.L. Rev. 283, 292 (1967) ("illusory"); Michelman,

Property, Utility, and Fairness: Comments on the

Ethical Foundations of "Just Compensation” Law, 80

Harv. L. Rev. 1165, 1186 (1967) Poca sn Bm

Alstyne, Taking or Damaging by Police Power:

Search for Inverse Condemnation Criteria, 44 S. Cal. L.

Rev. 1, 2 (1971) ("circular reasoning, and empty

rhetoric").

'' The Petitioners’ attempt to deconstruct the word

“substantial” (Lingle 47) is unconvincing. Plainly, the

Court meant something by its use. The assertion that the

word is “ambiguous” seems disingenuous. As the Court

itself explained in Nollan, the word means more than the

rational basis concept of due process cases. (483 U.S. at

834-835, fn. 3.) Acknowledging the Nollan analysis but

describing it as “tentative” and said "in passing” (Lingle

48) does not further the inquiry. It is plain from a

reading of the cases discussed in the text that the word

has not been used casually and was, instead, intended to

have meaning.

14

Thus, under Penn Central, it is not enough to say

that a regulation is “reasonable” or has a "rational basis."

That may be the issue under the Due Process Clause, but

it is not the issue under the Takings Clause. Takings

analysis requires examination of the necessity for the

regulation as well (Penn Central, 438 U.S. at 127) and,

accordingly, whether the regulation will actually

accomplish its stated goals. And it requires that

determination to be made on an “ad hoc" basis. The

Court's requirement of ad hoc inquiry to determine

Takings Clause liability has not been restricted to Agins'

second prong, but has been a uniform requirement. (See

Penn Central, 438 U.S. at 124; Kaiser Aetna v. U.S., 444

U.S. 164, 175 [1979]; San Diego Gas, 450 U.S. at 649-

650 [Brennan, J., dissenting]; Loretto v. lew 2rompter

Manhattan CATV Corp., 458 U.S. 419, 426 [1982];

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

340, 349 [1986]; Keystone, 480 U.S. at 474, 495; Hodel,

481 U.S. at 714; Lucas, 505 U.S. at 1015.)"”

s Some of the cases cited above involved as-

applied challenges, others were facial; some involved

regulatory takings, others were physical; some involved

development denials, others conditions on development;

some involved 42 U.S.C. § 1983, others did not; some

were from state courts, others federal. But they all

concerned Takings Clause challenges and they all

required factual examination of the regulatory action to

determine its validity. Indeed, this factual requirement

pre-dates the Court's takings decisions during the last

few decades. (See Pennsylvania Coal, 260 U.S. at 413;

Berman v. Parker, 348 U.S. 26, 32 [1954].)

15

In Lucas, 505 U.S. at 1030, the Court mandated a

"total takings inquiry" into a case's facts and background

circumstances using the Penn Central rationale, except

for those few cases that would fit within the per se, or

categorical, takings categories.

Lower courts have followed Penn Central's lead

in examining the "necessity of regulation” under a

Takings Clause analysis:

"In short, has the Government acted in a

responsible way, limiting the constraints on

property ownership to those necessary to

achieve the public purpose, and not allocating

to some number of individuals, less than all, a

burden that should be borne by all?" (Florida

Rock Indus., Inc. v. U.S., 18 F.3d 1560, 1571

(Fed. Cir. 1994]; emphasis added.)

Second, perhaps wary of resurrecting Lochner v.

New York, 198 U.S. 45 (1905), the Court has not looked

favorably on actions that would expand the reach of

substantive due process. (See, e.g., Collins v. Harker

Heights, 503 U.S. 115, 125 [1992] ["the Court has

always been reluctant to expand the concept of

substantive due process because the guideposts for

responsible decisionmaking in this uncharted area are

scarce and open-ended" }.)

To restrict the reach of substantive due process,

Graham v. Connor, 490 U.S. 386 (1989) holds that,

where a claim can be brought under one of the

separately stated Bill of Rights guarantees, there is no

16

substantive due process claim. Some lower courts have

interpreted Graham to preclude property owners from

suing on substantive due process grounds because the

Takings Clause provides an adequate constitutional

remedy. (E.g., Armendariz v. Penman, 75 F.3d 1311,

1318-1320 [9th Cir, 1996] [en banc]; South County Sand

& Gravel v. Town of South Kingstown, 160 F.3d 834,

835 [Ist Cir, 1998); Bateman v. City of Wes. Rountiful,

89 F.3d 704, 709 [10th Cir. 1996].)

The regulators’ briefs say they want to reverse all

that and increase the volume of substantive due process

litigation, What they really want, as briefed post, pp.

24-29, is a lessened standard of review for their actions.

Beyond that, other than a cursory mention in the

Petitioner's procedural summary (Lingle 4), the

regulators’ briefs fail even to acknowledge, much less

account for, the fact that this constitutional challenge

was brought under 42 U.S.C. § 1983.

The use of Section 1983 makes a difference.

Ignoring it allows the regulators to argue that failure to

advance a legitimate state interest cannot be a takings

theory because there can be no taking without proper

governmental action. (Lingle 18-19; US 22.) But

Section 1983 alters that. Actions under that section are

brought because of a "[m]isuse of power, possessed by

virtue of state law and made possible only because the

wrongdoer is clothed with the authority of state law . . ."

(Monroe v. Pape, 365 U.S. 167, 184 [1961].) That

Statute was enacted to protect citizens against violations

of their constitutional rights under color of state law,

17

including the specific problem of Takings Clause

violations. (Monell v. Department of Social Services,

436 U.S. 658, 685-687 & fn. 45 [1978].)

Thus, in the context of Section 1983, the

“substantial advancement" prong of Agins can be used in

cases where regulations have already been invalidated to

show the need for temporary taking compensation. The

failure to substantially advance a legitimate state interest

part of the takings rationale goes beyond due process

and establishes liability in these circumstances.

C

The Regulators Over-Read The Court's

Decision in First English.

The regulators’ position is based largely on an

over-reading of First English, asserting that it

established compensation as the only remedy for a

Takings Clause violation, thus showing that the analysis

used below properly belongs to the Due Process Clause.

(Lingle 18, 19, 22; US 17-22.)

While it is true that First English answered a

question which had plagued courts for years, by

concluding that the Takings Clause prohibits states from

holding that compensation may not be awarded for

regulatory takings of property, the Court did not hold

that compensation is the only remedy available to

Takings Clause — victims. Other cases decided

contemporaneously with First English (as well as First

English itself) make this clear. (See Keystone, 480 U.S.

470; Hodel, 481 U.S. 704; Nollan, 483 U.S. 825.)

In Keystone, the first of 1987's multiple Takings

Clause cases, the Court was faced with a challenge to

the constitutionality of a statute requiring coal

companies to leave a sufficient amount of coal in the

ground to preclude subsidence, effectively prohibiting

the mining of a substantial amount of coal. The coal

companies sought injunctive relief. The important thing

about Keystone is not that the Court upheld the statute,

but the way it did so: the merits of the coal companies’

arguments were painstakingly examined. If the only

remedy for a regulatory taking were compensation, then

the Court's opinion needed to be only one paragraph

long. It could have dismissed the case on the ground

that it sought the wrong remedy. But it did not. And

First English was under active consideration at the time,

having been argued less than two months before the

Keystone opinion was filed.

Hodel was decided two months after Keystone. It

tested the constitutionality of a federal statute designed

to halt the intense fractionalization of Native American

lands by prohibiting the transfer at death of miniscule

estates. By statute, such estates would escheat to the

appropriate tribe. There was no question about the

public purpose of the statute, but the Court held it went

too far. The statute was struck down, this time less than

a month before First English would be filed.

First English itself talks of invalidating

regulations that violate the Takings Clause. (See 482

U.S. at 317, 319, 320, 322.) Compensation is an

19

additional remedy to compensate for the temporary

taking occurring between adoption of the regulation and

its ultimate invalidation. (482 U.S. at 321.)

Then, two weeks after it decided First English,

the Court decided Nollan. There, the property owners

sought a writ of mandate to invalidate a condition

attached to a development permit. No compensation

was sought. With First English freshly on the books,

the Court concluded that the permit condition effected a

taking and turned to the remedy sought by the property

owners. The Court granted the only relief sought, i.e.,

injunctive. If, as the regulators argue here, the only

remedy for a taking is compensation, then the Court had

no business granting some other form of relief.

Plainly, this Court's series of 1987 cases

demonstrates that there is no single remedy under the

Takings Clause. Injunctive relief against excessive

regulation is not the sole province of the Due Process

Clause. Depending on the facts, either monetary relief

or injunctive relief may be appropriate. Here, in an

application of Agins' first prong, the courts below

determined that injunctive relief was the proper Takings

Clause remedy on these facts. Because the economic

impact of the regulation was not at issue, that result was

both authorized and justified.'®

5 As no compensation was sought, the case was

properly filed in U.S. District Court without "ripening"

under Williamson County Reg. Plan. Comm'n vy.

Hamilton Bank, 473 U.S. 172 (1985). The operation of

the Williamson County rule has been heavily criticized,

20

A MERE GOVERNMENTAL STATEMENT THAT

REGULATION IS UNDERTAKEN TO ADVANCE

THE PUBLIC INTEREST CANNOT BE

ACCEPTED ON FAITH. REAL JUDICIAL

INQUIRY IS REQUIRED.

Reviewing the constitutionality of legislative acts

is neither to be sought nor taken lightly. However, such

review is a necessary part of our constitutional system.

As this Court explained, such review is undertaken:

".., with all respect for the powers of Congress,

but with recognition of the transcendent status

of our Constitution." (Kennedy v. Mendoza-

Martinez, 372 U.S. 144, 159 [1963}].)

Whether legislative action complies with the

Constitution is a question for the judiciary — and has

been since Marbury v. Madison, | Cr. 137 (1803).

A

The Bill of Rights Was Designed To Restrict The

Power of Government. This Court Has Consistently

Applied That Restriction Under The Takin, Clause.

As Justice Holmes explained for the Court in its

first regulatory taking case of the 20th century, "[t}he

and will be reviewed later in the Term in San Remo

Hotel v. City and County of San Francisco, No. 04-340.

21

greatest weight is given to the judgment of the

legislature, but it always is open to interested parties to

contend that the legislature has gone beyond its

constitutional power." (Pennsylvania Coal Co, vy.

Mahon, 260 U.S. 393, 413 [1922].)""

The problem is that the regulators refuse to

recognize limits; they seek virtually unreviewable

deference. With respect, as this Court recently held in

Del Monte Dunes, 526 U.S. 687, that position is

untenable. In Del Monte, the city and its amici protested

against judicial "second-guessing" of regulatory

decisions under the first prong of Agins, asking for the

same kind of abject deference sought at bench. The

Question Presented by the city was this: |

"Whether liability for a regulatory taking can be

based upon a standard that allows a jury or

court to reweigh evidence concerning the

reasonableness of the public entity's land use

decision." (Petition, p. i; emphasis added.)

This Court's response was crisp and clear:

"To the extent the city argues that, as a matter

of law, its land-use decisions are immune from

judicial scrutiny under all circumstances, its

” See also Winger v. Aires, 89 A.2d 521, 522 (Pa.

1952) (enjoining use of eminent domain as

unnecessary): "The genius of our democracy springs

from the bedrock foundation on which rests the

proposition that office is held by no one whose orders,

commands or directives are not subject to review."

22

position is contrary to settled regulatory takings

principles. We reject this claim of error." (Del

Monte Dunes, 526 U.S. at 707.)

Del Monte was a continuation of the Court's

modern regulatory taking decisions. In First English,

the Court concluded that compensation is an available

remedy for a regulatory taking. The defendant county

and its many amici had voiced fears that a governmental

loss would cripple government's ability to gov.rn. The

Court rejected that hyperbolic plea, concluding that

“many of the provisions of the Constitution are

designed to limit the flexibility and freedom of

governmental authorities ...." (482 U.S. at 321.)

Indeed, one might say that the entire purpose of

the Bill of Rights is to restrict the exercise of

governmental power. ”

Two weeks after First English, the Court

amplified its insistence that the protection afforded the

rights of property owners be enforced, not evaded: “We

view the Fifth Amendment's Property Clause to be more

than a pleading requirement, and compliance with it to

be more than an exercise in cleverness and imagination.”

(Nollan, 483 U.S. at 841.)

As shown below, the Court's decisions under the

Takings Clause have enforced this choice of protection

'S As Justice Douglas put it, "The Constitution and

the Bill of Rights were designed to get Government off

the backs of the people — all the people." (Quoted in

Hentoff, Living the Bill of Rights 2 [1998).)

23

over inventive wordplay. Accepting the regulators’

arguments at bench, and subjecting their actions only to

minimal review, will undo the protection intended by the

Constitution and enforced by the Court until now.

An Elevated Level Of Judicia! S« rutiny Is Necessary

To Vindicate The Protection Intended By The ~

Takings Clause.

Candor is necessary. What the regulators are

really complaining about is the standard of review

(eventually discussed late in the Petitioners’ brief [Lingle

37]}). The theory under which review is made cannot be

divorced from its standard of review. Indeed, the

labeling process is otherwise meaningless: it would

make no difference which constitutional violation was

charged if the standard of review were the same.

What the regulators seek is to evade the

heightened scrutiny for regulatory takings established in

cases like Nollan v. California Coastal Comm'n, 483

U.S. 825, 834, 841 (1987)."° Instead, they want to

‘© The regulators’ briefs concede that Nollan and its

eventual companion Dolan are fully applicable to

property exactions attached as conditions to permits

(Lingle 33; US 28). but seek to evade any Nollan/Dolan

analysis by saying that those cases involve a special rule

applicable only to such permit conditions.

They are right about the continuing validity of

Nollan and Dolan, but wrong about their application

24

beyond the exaction context. First, nowhere in either

case — or in Agins or Penn Central, for that matter —

did the Court hold that the substantial advancement test

required land dedication. To the contrary, in Ehrlich v.

City of Culver City, 512 U.S. 1231 (1994), involving

development fees, the Court issued a writ of certiorari,

vacated the state court judgment, and remanded the

matter for consideration in light of Dolan, which had

just been decided. Ultimately, the California Supreme

Court agreed with this Court and applied the

Nollan/Dolan analysis to a purely monetary issue.

(Ehrlich v. City of Culver City, 911 P.2d 429 [Cal.

1996], cert. den., 117 S. Ct. 299 [1996].)

Second, their reliance on Del Monte Dunes

(Lingle 32; US 27) is misplaced. There, this Court dealt

with Dolan's “rough proportionality” component, not the

Nollan/Agins issue of “substantial advancement.” In that

context, the Court said that it had not yet applied the

rough proportionality test beyond the exaction context

(526 U.S. at 702), but never said that it would be

improper to do so. In any event, assuming that the

rough proportionality concept is restricted to exactions,

nothing in the Court's jurisprudence suggests that the

entire first prong of Agins is so restricted.

Third, both before and after Del *!-"te Dunes,

the Court has stressed the proper role of proportionality

analysis in judging the validity of legislative responses

to perceived problems. (See U.S. v. Vajakajian, 524

U.S. 321, 324 [1998]; Florida Prepaid Postsecondary

Ed. Expense Bd. v. College Savings Bank, 527 U.S. 627,

25

substitute due process, whose standard they gloss over

as “rational basis” (US 21, fn. 9), ie., that a regulation is

acceptable if there is some rational basis for it that can

be conjured up by a court after the fact, regardless of

whether anyone who voted on the regulation ever

considered it at all. (E.g., Minnesota v. Clover Leaf

Creamery Co., 449 U.S. 456, 466 [1981].)

But that is not an accurate picture of due process

as it is applied in land use cases. Property owners have

not even had that loose standard applied to their claims.

The Ist Circuit, for example, has held that

substantive due process is virtually unavailable in land

use disputes, saying it has only “left the door slightly

ajar for federal relief in truly horrendous situations.

But . . . the threshold for establishing the requisite ‘abuse

of governmental power’ is a high one indeed.” (Nestor

Colon Medina & Sucesores, Inc. v. Custodio, 964 F.2d

32, 45 [1st Cir. 1992]; emphasis added.)'”

The 3d Circuit applies a “shocks the conscience”

standard (United Artists v. Township of Warrington, 316

646 [1999].) Thus, nothing in Del Monte Dunes or any

other of this Court's cases suggests that there is no need

for a close nexus between regulatory means and ends.

Quite the contrary.

‘The 2d Circuit has been called “even more

hostile” to such property owner claims than the Ist.

(Pearson v. City of Grand Blanc, 961 F.2d 1211, 1218

[6th Cir: 1992].)

26

F.3d 392, 400 [3d Cir. 2003]),"* even though that

standard devolved from police actions like Rochin v.

California, 342 U.S. 165 (1952) (forced stomach

pumping) and County of Sacramento v. Lewis, 523 US.

833 (1998) (high speed car chase through residential

neighborhood), which had nothing to do with the more

carefully thought out economic and land use regulations

dealt with in cases like this.

Thus, the regulators’ desire to be thrown into the

briar patch of substantive due proccss (a desire

unthinkable for regulators in the Lochner era) comes

from an evident wish to slide into a form of judicial

review that is exceedingly regulator-friendly.'”

This Court is already on record as seeing “no

reason why the Takings Clause of the Fifth Amendment,

‘8 The validity of the 3d Circuit's standard 1s the

subject of Petitions for Certiorari this Term in Lindquist

v. Buckingham Township, No. 04-681 and Levin v.

Upper Makefield Township., No. 04-500, cert den., 73

U.S.L.W. 3248 (Dec. 13, 2004).

'? Professor Eagle has urged that, if the Court were

to enforce a standard of “meaningful substantive due

process” (Eagle, Regulatory Takings, § 12-2, p. 977 [2d

ed. 2001]; emphasis added), i... review with a

heightened level of actual scrutiny, then such a standard

might provide appropriate constitutional protection. But

that would require more than “rational basis” review and

would certainly not subject property owners to the

‘standards discussed above.

27

—

as much a part of the Bill of Rights as the First

Amendment or the-Fourth Amendment, should be

relegated to the status of a poor relation... ." (Dolan v.

City of Tigard, 512 U.S. 374, 392 [1994].) The Court, in

furtherance of that protection for property owners, has

expressly refused to apply “rational basis” scrutiny to

Takings Clause cases. (Dolan, 512 U.S. at 391.)°

If the first prong of Agins is eliminated, the rights

protected by the Takings Clause will become poor

relations, indeed. If regulators need do no more than

appear in court and suggest possible reasons that might

have supported their regulations, then the regulators will

always prevail. That's not a rule of law, but an imperial

ukase that ill serves our Constitution. As the Court put

it, “such a justification can be formulated in practically

every case" making review of even expressly stated

regulatory intentions “a test of whether the legislature

has a stupid staff." (Lucas v. South Carolina Coastal

Council, 505 U.S. 1003, 1025, fn. 12 [1992].)

That is why the Court was quite explicit when it

remanded Lucas so the State could defend its legislation.

The Court “emphasized{d] that to win its case, South

Carolina must do more than proffer the legislature's

declaration . . . or its conclusory assertion... ." (Lucas,

505 U.S. at 1031.) A fortiori, if the legislature's actual

20

The reason for that should be apparent: a

regulation can be perfectly “rational” or “reasonable” but

still not advance legitimate state interests one iota and

may, in fact, be counterproductive. (See, e.g., Hodel v.

Irving.) The courts below found that to be the case here.

28

formulation of a supposed justification is insufficient to

validate legislation challenged under the Takings Clause

—- unless supported by facts produced at trial — then

conjectured rationalizations under a “rational basis”

review should not suffice either.

Reliance on U.S. v. Carolene Prods., 304 U.S.

144 (1938) (Lingle 38; Govt. Organizations 10)

overlooks that opinion's express recognition that any

presumption of regulatory regularity is "narrower .. .

when legislation appears on its face to be within a

specific prohibition of the . . . first ten amendments.”

(304 U.S. at 152, fn. 4.) That is this case.

The ultimate goal in a takings inquiry is “to bar

Government from forcing some people alone to bear

public burdens which in all fairness and justice, should

be borne by the public as a whole.” (Armstrong v. U.S.,

364 U.S. 40, 49 [1960].) The way to achieve that goal is

for a court to scrutinize the burden imposed on the

property owner and measure, as Penn Central instructs

(438 U.S. at 127), whether the means chosen are

necessary to the desired end, and whether they will

achieve that end.

CONCLUSION

The Takings Clause standard being challenged

here is one that this Court has applied and discussed for

decades. It has consistently inquired whether

regulations “substantially advance a legitimate state

interest,” upholding some while striking down others.

29

The standard has worked well, allowing (as in

Del Monte Dunes) an impartial examination of the

workings of a regulatory scheme to determine whether it

has the capacity to accomplish its goals or whether, in

the alternative, it is an unnecessary imposition on the

property owner (as the Court instructed lower courts to

investigate in Penn Central).

The major item of concern in this case is not the

legal theory of liability, but the standard of review of

governmental action. The positions are starkly laid out.

The regulators want virtual free rein, under a standard

that — in the Court's words — only “a stupid staff"

could fail to satisfy. Property owners, by contrast, ask

for a standard that allows them to demonstrate a

regulation's constitutional failure.

NAHB prays that the decision be affirmed, with

an opinion explaining the continuing vitality of the

Agins formula for enforcing the Takings Clause.

Respectfully submitted,

Duane J. Desiderio Mi-hael M. Berger*

The National Association Manatt, Phelps & Phillips

of Home Builders *Counsel of Record

1201 15th Street, N.W. 11355 W. Olympic Blvd.

Washington, D.C. 20005 Los Angeles, CA 90064

(202 266-8200 (310) 312-4185

Attorneys for Amicus Curiae

The National Association of Home Builders

30