Amicus Curiae Brief — San Remo Hotel, LP v. City and County of San Francisco

'

| Supreme Court US~—

; ;

FILER

j@ | NOV 1 2 2004

No. 04-340 OFFICEOFTHECLERK |

In the

Supreme Court of the United States

+

SAN REMO HOTEL, L.P., THOMAS FIELD,

ROBERT FIELD, and T&R INVESTMENT CORP..,

Petitioners,

v.

CITY AND COUNTY OF SAN FRANCISCO,

DEPARTMENT OF PLANNING, CITY PLANNING

COMMISSION, BOARD OF PERMIT APPEALS,

BOARD OF SUPERVISORS OF THE CITY

AND COUNTY OF SAN FRANCISCO,

Respondents.

+

On Petition for Writ of Certiorari to the

United States Court of Appeals for the Ninth Circuit

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BRIEF AMICUS CURIAE OF PACIFIC LEGAL

FOUNDATION AND NATIONAL ASSOCIATION OF

REALTORS IN SUPPORT OF THE PETITIONERS wae

+ NOY <c |

RALPH W. HOLMEN MERIEML. HUBBARD” * » 2004

National Association of Realtors Counsel of Record

430 North Michigan Avenue R. S. RADF UPREME COUNT. US

Chicago, Illinois 6061 1 Pacific Legal Foundation = = 200"

Telephone: (312) 329-8375 3900 Lennane Drive, Suite 200

Facsimile: (312) 329-8256 Sacramento, California 95834

Telephone: (916) 419-7111

Facsimile: (916) 419-7747

Counsel for Amici Curiae Pacific Legal Foundation

and National Association of Realtors

i

QUESTIONS PRESENTED

1. Isa Fifth Amendment Takings claim brought in

federal court barred by issue preclusion based on a state court

judgment denying compensation under state takings law?

2. Maya local government avoid the “rough

proportionality” test of Dolan v. City of Tigard, 512 U.S. 374

(1994), by imposing development exactions by legislative

enactment?

il

TABLE OF CONTENTS

Page

QUES TUNG PREDIC EEED cocccccvccsvescseveusent i

TAREE GP ALUTIRGAUEED ocvcesectencseseasnusea iv

INTEREST OF AMICI CURIAE.-.....ccccscvccscvees l

STATHOGEINE OF BSS CARS cc ccccccesivcteecsnees 2

SUMMARY OF ARGUMENT .................0006- 4

ARLIIGINE oo cccvccsvesseesscavesecemaaeanenen 6

I. WILLIAMSON COUNTY REGIONAL

PLANNING COMMISSION, AS APPLIED

BY LOWER COURTS, GIVES TO STATE

COURTS THE TASK OF DEVELOPING

FEDERAL TARINGS LAW ......cccccccscvees 6

A. The Williamson County Ripeness

Requirements Must Not Preclude

Litigation of Federal Takings Claims

from the Federal Trial and Appellate Courts ... 7

B. Federal Courts Must Define the Contours of

Federal Takings Law; That Responsibility

-Cannot Be Left to the State Courts ........... i)

Il. APPLICATION OF DOLAN’S STANDARD

OF “ROUGH PROPORTIONALITY”

CANNOT DEPEND ON THE METHOD BY

WHICH EXACTIONS ARE IMPOSED ......... 12

A. The Risk of Government Extortion

Does Not Disappear When Exactions

Are Imposed Legislatively ................ 13

B. The Political Process Provides Inadequate

Protection from Extortionate Exactions ...... 14

ill

TABLE OF CONTENTS—Continued

C. The Legislative-Adjudicative Distinction

Creates Great Uncertainty ................. 15

D. The Bright-Line Test Adopted by the

California Supreme Court, and Followed by

a Number of Other State Courts, Does Not

Further the Purpose of the Takings Clause .... 16

DT, SaGuhecbaceccoscdcedsccecescccecs 18

iv

TABLE OF AUTHORITIES

Page

Cases

Armstrong v. United States, 364 U.S. 40 (1960) ........ 16

City of Monterey v. Del Monte Dunes at

Monterey, Lid., 526 U.S. 687 (1999) ............45. 2

Daniel v. County of Santa Barbara, 288 F.3d 375

(9th Cir.), cert. denied, 537 U.S. 973 (2002) ......... 6

Dolan v. City of Tigard,

Fas Sk DOSE .« Honesbnsacechsaseaneas 2, 5,12

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

(Cal.), cert. denied, 519 U.S. 929 (1996) ........ 12-13

England v. Louisiana State Board of Medical

Examiners, 375 U.S. 411 (1964) . ........... 4-5, 10-11

First English Evangelical Lutheran Church

of Glendale v. County of Los Angeles,

GEE Gs DOOD sb dcddsecacednabécdcccenes 2,8

Home Builders Association of Central Arizona v.

City of Scottsdale, 930 P.2d 993 (Ariz.),

cert. denied, 521 U.S. 1120 (1997) ............045: 13

J.E.D. Associates, Inc. v. Town of Atkinson,

GRADE Ce COOED kde dcndassesccccncdenss 17

Kavanau v. Santa Monica Rent Control Board,

941 P.2d 851 (Cal. 1997), cert. denied,

SES Ws CETTE BSE RG ee cde duassicconccsees 13

Krupp v. Breckenridge Sanitation District,

SPC GET ES BEE cbccncscscocccecccéccss 13

Lambert v. City and County of San Francisco,

TEP Gas COUPEE. evo dcesendedcaeeencescueue 17

Vv

TABLE OF AUTHORITIES—C ontinued

Page

Landgate, Inc. v. California Coastal Commission,

953 P.2d 1188 (Cal.), cert. denied,

TP a SUE Euchoneds ode edicsvatsaceces 12

Lucas v. South Carolina Coastal Council, :

SG DEE Dea Réaceeedectuencessnce tens 2

Nollan v. California Coastal Commission,

SP ee PEED cosrececespokocestenescns 1,17

Palazzolo v. Rhode Island, 533 U.S. 606 (2001) ......... l

Prune Yard Shopping Center v. Robins,

GF PEED Seb bee h inte cwesicedcedecisves 11

Rogers Machinery, Inc. v. Washington County,

45 P.3d 966 (Or. Ct. App. 2002), cert. denied,

Pe PUES ccdachdcasceceseccccose 13-15

San Remo Hotel v. City and County of

San Francisco, 145 F.3d 1095 (9th Cir. 1998) ........ 6

San Remo Hotel L.P. v. City and County of

San Francisco, 41 P.3d 87 (Cal. 2002) ........ 3, 12,14

San Remo Hotel, L.P. v. San Francisco City

and County, 364 F.3d 1088 (9th Cir. 2004) ........ 3-4

Santa Monica Beach, Lid. v. Superior Court of

Los Angeles County, 968 P.2d 993 (Cal. 1999) ...... 12

Santini v. Connecticut Hazardous Waste

Management Service, 342 F.3d 118

(2d Cir. 2003), cert. denied, No. 04-142,

2004 WL 2071528 (Oct. 4, 2004) ...........4.. 18-19

Suitum v. Tahoe Regional Planning Agency,

TPT TeTrITT TTT Ty |

vi

TABLE OF AUTHORITIES—Continued

Page

United States v. Hammad, 858 F.2d 834

(2d Cir. 1988), cert. denied, 498 U.S. 871 (1990) .... 11

US West Communications v. MFS Intelenet,

Inc., 193 F.3d 1112 (9th Cir. 1999),

cert. denied, 530 U.S. 1284 (2000) ...............4.. 6

Williams v. Taylor, 529 U.S. 362 (2000) ...........445. 9

Williamson County Regional Planning

Commission v. Hamilton Bank of

Johnson City, 473 U.S. 172 (1985) ........... 2, 4, 7-8

Yee v. City of Escondido, 503 U.S. 519 (1992) .......... 2

Constitution

CLS. Gameh,. GO VU sn wbcend bine ecdnnekcescedeeds 16

Rules

Ou C2 8. SUNG. Ei Re ae 1

Gan. CX 0, SUB is isin ences een 1

Miscellaneous

Berger, Michael M., Ripeness: Historical

Derivation and Lingering Dysfunction,

SE45 ALI-ABA 461 (2000) .............00cceeees 4

Berger, Michael M., Supreme Bait & Switch:

The Ripeness Ruse in Regulatory Takings,

3 Wash. U. J.L. & Pol’y 99 (2000) ............ 8-9, 11

Vii

TABLE OF AUTHORITIES—Continued

Page

Callies, David L., Regulatory Takings

and the Supreme Court: How Perspectives

on Property Rights Have Changed from

Penn Central to Dolan, and What State

and Federal Courts are Doing About It,

28 Stetson L. Rev. $23 (1999) ......cccccsecceess 18

Delaney, John J. & Desiderio, Duane J., Who Will

Clean Up the “Ripeness Mess”? A Call for Reform

so Takings Plaintiffs Can Enter the Federal

Courthouse, 31 Urb. Law. 195 (1999) .............. 6

Eagle, Steven J., Symposium: When Does Retroactivity

Cross the Line?: Winstar, Eastern Enterprises and

Beyond: Substantive Due Process and Regulatory

Takings: A Reappraisal, 51 Ala. L. Rev. 977 (2000) .. 15

Fischel, William A., Utilitarian

Balancing and Formalism in Takings,

88 Colum. L. Rev. 1581 (1988) ..............005. 15

Friedman, Barry, Under the Law of

Federal Jurisdiction: Allocating

Cases Between Federal and State

Courts, 104 Colum. L. Rev. 1211 (2004) ........... 11

Huffman, James L., Colloquium on Dolan: The

Takings Clause Doctrine of the Supreme Court

and the Federal Circuit: Dolan v. City of

Tigard: Another Step in the Right Direction,

Ps PEPE cg nbccccdeccesccecosace 17-18

Viii

TABLE OF AUTHORITIES—Continued

Kovacs, Kathryn E., Accepting the Relegation

of Takings Claims to State Courts: The

Federal Courts’ Misguided Attempts to

Avoid Preclusion Under Will amson County,

SG Boseney LAD. 1 CIGTED occ ccccccctccctovcece 9-10

Reznik, Inna, 7he Distinction Between Legislative

and Adjudicative Decisions in Dolan v. City

of Tigard, 75 N.Y.U. L. Rev. 242 (2000)........ 13-16

Roberts, Thomas E., Procedural Implications of

Williamson County/First English in Regulatory

Takings Litigation: Reservations, Removal, Diversity,

Supplemental Jurisdiction, Rooker-Feldman, and

Res Judicata, 31 Envtl. L. Rev. 10353 (2001) ........ 9

State Approaches to Protecting Private Property Rights:

Hearing Before the Subcomm. on the Constitution of

the House Comm. on the Judiciary, 105th Cong. (1997)

[Available on Westlaw, 1997 WL 626959 (F.D.C.H.)]

(Statement of Steven J. Eagle, Professor of Law,

George Mason University School of Law) ........... 7

Tribe, Laurence H., American

Constitutional Law (3d ed. 2000) ......... 5600 e eee 18

Yuhas, George A., The Ever-Shrinking Scope of Federa

Court Takings Litigation, 32 Urb. Law. 465 (2000) .... 9

|

INTEREST OF AMICI CURIAE'

For more than 30 years, Pacific Legal Foundation (PLF)

has litigated in support of the rights of individuals to make

reasonable use of their private property. PLF attorneys have

been before this Court on three occasions representing

individuals whose right to use their property was unlawfully

denied by government agencies. See Palazzolo v. Rhode Island,

533 U.S. 606 (2001); Suitum v. Tahoe Regional Planning

Agency, 520 U.S. 725 (1997); and Nollan v. California Coastal

Commission, 483 U.S. 825 (1987). And PLF has participated

as amicus curiae in nearly every other major real property

takings case heard by this Court in the past three decades.

PLF previously participated as amicus curiae in this case

and the related state court case. PLF filed amicus briefs in

support of San Remo Hotel, L.P., Thomas Field, Robert Field,

and T&R Investment Corp. (Petitioners herein) before the Ninth

Circuit Court of Appeals, the United States District Court for

the Northern District of California, the California Supreme

Court, and the California Court of Appeal.

Amicus National Association of Realtors (NAR) is a

nonprofit association representing over one million members

engaged nationwide in all phases of the real estate business,

including, but not limited to, brokerage, appraising,

management, and counseling. NAR was created to promote and

encourage the highest and best use of the land, to protect and

promote private ownership of real property, and to promote

professional competence. Its members contribute to such

' Pursuant to this Court’s Rule 37.2(a), all parties have consented to

the filing of this brief. A letter evidencing such consent has been

filed with the Clerk of the Court.

Pursuant to Rule 37.6, Amici Curiae affirm that no counsel for

any party authored this brief in whole or in part and that no person

or entity made a monetary contribution specifically for the

preparation or submission of this brief.

2

activities as promotion of equal opportunity in housing, real

estate licensing, neighborhood revitalization, safeguarding real

property rights, public service, and cultural diversity. The

National Association of Realtors has participated as amicus

curiae in numerous property rights cases before this — 1,

including City of Monterey v. Del Monte Dunes at Monterey,

Ltd., 526 U.S. 687 (1999); Dolan v. City of Tigard, 512 U.S.

374 (1994); Lucas v. South Carolina Coastal Council, 505 U.S.

1003 (1992); Yee v. City of Escondido, 503 U.S. 519 (1992);

and First English Evangelical Lutheran Church of Glendale v.

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

This case raises important issues of constitutional law.

Amici file this brief to assist the Court in considering the

conditions under which property owners may present their

claims for recovery of compensation for harm to private

property under the Fifth and Fourteenth Amendments to the

United States Constitution in a federal forum.

Specifically, PLF and NAR argue that Williamson County

Regional Planning Commission v. Hamilton Bank of Johnson

City, 473 U.S. 172 (1985), must not be interpreted to deny

federal takings claims in federal courts. Amici also argue that

the manner by which an exaction is imposed cannot determine

the applicable constitutional test. PLF and NAR believe that

their public, policy perspective and litigation experience

provides an additional viewpoint on the issues presented in this

case,

STATEMENT OF THE CASE

The San Remo Hotel is a family owned and operated hotel

located in the North Beach section of San Francisco (City).

Since at least 1971, the San Remo has been operated as a tourist

hotel. In 1979, the City imposed a moratorium on the

demolition or conversion of hotel rooms classified by the City

as “residential.” This moratorium became a permanent

prohibition in 1981, when the City adopted the initial version of

$$

3

its Residential Hotel Unit Conversion and Demolition

Ordinance (HCO). See San Remo Hotel L.P. v. City and

County of San Francisco, 41 P.3d 87, 91-92 (Cal. 2002),

Appendix (App.) at 108a-109a. The current version of the HCO

was enacted in 1990. The HCO seeks to alleviate the “adverse

impact on the housing supply and on displaced low income,

elderly, and disabled persons resulting from the loss of

residential hotel units through their conversion and demolition.”

Id.

Prior to the HCO, the City did not make distinctions

between residential hotels which house long-term tenants, and

commercial hotels that provide overnight accommodations for

tourists. The City now applies the HCO to make such

distinctions on a room-by-room basis within individual

structures. The 1981 ordinance required hotel operators to

submit a report documenting the number of tourist and

residential units in their hotels as of September 23, 1979. Since

then, the HCO has kept this distribution frozen.

Under the HCO, any “conversion” of rooms from

residential to any other use is forbidden without a permit from

the City. As a prerequisite to obtaining a conversion permit, the

hotel owner must either dedicate an equivalent amount of

housing to the City or pay an “in lieu” fee equal to the cost of

site acquisition plus 40% (since 1990, 80%) of the cost of

constructing an equivalent number of affordable housing units.

Shortly before the_effective date of the 1990 HCO, the

owners of the San Remo applied for a permit to “convert” their

hotel to full tourist use. To this end, the City Planning

Commission granted a conditional use permit for the San

Remo, subject to a requirement that the owners make a cash

payment of $567,000 to the City pursuant to the HCO. This fee

was paid under protest, and the San Remo challenged the City’s

exaction in federal court, arguing that the exaction is a

4

regulatory taking in violation of the Fifth Amendment to the

United States Constitution.

San Remo’s petition includes a detailed summary of the

procedural history of its takings claims. Petition at 4-6.

Briefly, the federal court sent San Remo to the California state

courts to ripen its takings claims pursuant to Williamson County

Regional Planning Commission v. Hamilton Bank of Johnson

City, 473 U.S. 172. The California Supreme Court denied San

Remo’s state takings claims. San Remo Hotel, L.P. v. San

Francisco City and County, 364 F.3d 1088, 1093 (9th Cir.

2004), App. at 9a-1la. Then, San Remo returned to the federal

courts to litigate its federal takings claims. San Remo lost

again. The Ninth Circuit affirmed the district court’s ruling that

San Remo was barred from litigating its federal takings claims

in federal court, because “the California Supreme Court’s

adjudication of the state takings claims was an ‘equivalent

determination’ of the federal takings claims.” Jd. at 1090,

App. at 4a. The Ninth Circuit concluded that neither federal

takings law, nor California takings law, applies a “rough

proportionality” standard to legislatively imposed exactions. Jd.

at 1097-99, App. at 17a-21a.

SUMMARY OF ARGUMENT

Petitioners in this case are not the first to be caught in the

Williamson County “trap.” The ripeness requirements of

Williamson County regularly are applied to preclude property

owners from bringing federal takings claims in federal courts.

That cannot be what this Court intended; Williamson County

itself holds out the promise of federal adjudication of federal

takings claims. And in England v. Louisiana State Board of

? See Michael M. Berger, Ripeness: Historical Derivation and

Lingering Dysfunction, SE4S ALI-ABA 461, 467 (2000) (The

interplay between Williamson County and the rules of res judicata

and collateral estoppel “can be worse than chaos; in many cases, it’s

a trap.”).

5

Medical Examiners, 375 U.S. 411 (1964), this Court

emphasized the importance of allowing litigants to have their

federal claims decided in the federal courts. It is just as

important to the development of the law. The federal courts are

precluded from defining the contours of federal takings law

when federal takings claims are relegated to the state courts.

The California Supreme Court is one of the state courts

that uses two separate standards of review to takings challenges

involving development exactions. The “rough proportionality”

standard of Dolan v. City of Tigard, 512 U.S. 374 (1994), is

applied when an exaction is imposed adjudicatively, and a

rational basis standard is applied to legislatively imposed

exactions. The California Supreme Court, and other state

courts that follow its example, are wrong to rely on a

legislative-adjudicative distinction to determine the appropriate

standard of review. The government is just as likely—perhaps

more likely—to impose -extortionate exactions through

legislation of general applicability. The difficulty of

distinguishing which local government actions are legislative

and which are adjudicative only adds to the confusion and

inconsistency exhibited by the lower courts on this issue. The

“rough proportionality standard” must be applied to all

development exactions, regardless of how they are imposed; it

is the only way to assure that property owners receive the

protections guaranteed by the Takings Clause.

6

ARGUMENT

I

WILLIAMSON COUNTY

REGIONAL PLANNING COMMISSION,

AS APPLIED BY LOWER COURTS,

GIVES TO STATE COURTS THE TASK OF

DEVELOPING FEDERAL TAKINGS LAW

The property owners in this case find themselves in a

perplexing situation. San Remo was forced to ripen its Fifth

Amendment federal regulatory takings claims by seeking

compensation in state court. Then San Remo’s federal takings

claims were dismissed because the district court found that the

process of ripening the federal claims extinguished them.

Federal takings claims are routinely dismissed as unripe when

first litigated in federal court.’ See John J. Delaney & Duane J.

Desiderio, Who Will Clean Up the “Ripeness Mess”? A Call

for Reform so Takings Plaintiffs Can Enter the Federal

Courthouse, 31 Urb. Law. 195, 234-36 (1999), which includes

testimony of Daniel R. Mandelker* before the House Judiciary

Committee Subcommittee on Courts and Intellectual Property.

Professor Mandelker expressed his opinion that “federal judges

have distorted the Supreme Court’s ripeness precedents to

achieve an undeserved and unwarranted result: they avoid the

vast majority of takings cases on their merits.” Jd. at 236.

> See, e.g., Daniel v. County of Santa Barbara, 288 F.3d 375, 381

(9th Cir.), cert. denied, 537 U.S. 973 (2002); US West

Communications v. MFS Intelenet, Inc., 193 F.3d 1112, 1126 (9th

Cir. 1999), cert. denied, 530 U.S. 1284 (2000); San Remo Hotel v.

City and County of San Francisco, 145 F.3d 1095, 1101-02 (9th Cir.

1998).

* Professor of law at the University of Washington in St. Louis,

Missouri, and a prolific author on the law of zoning and land use

planning.

7

The importance of this problem cannot be overstated.

Professor Steven J. Eagle described the “notion of ‘ripeness’”

as “the greatest barrier to the protection of property rights.”

State Approaches to Protecting Private Property Rights:

Hearing Before the Subcomm. on the Constitution of the House

Comm. on the Judiciary, 105th Cong. (1997) [Available on

Westlaw, 1997 WL 626959 (F.D.C.H.)] (Statement of Steven J.

Eagle, Professor of Law, George Mason University School of

Law). °

A. The Williamson County Ripeness

Requirements Must Not Preclude

Litigation of Federal Takings Claims

from the Federal Trial and Appellate Courts

In Williamson County Regional Planning Commission v.

Hamilton Bank of Johnson City, 473 U.S. at 195, this Court

established a test for determining if a takings case is ready to be

heard in federal court. First, administrative action must be

final,° and second, a plaintiff must have sought “compensation

through the procedures provided by the State.” Jd. Only the

second requirement is relevant to the instant case. And as to

that requirement, this Court explained as follows:

* Professor Eagle emphasized that he was not referring to the

normal requirements that a matter involves a case or

controversy over which the court has jurisdiction or the

normal prudential requirements. Rather, the Supreme Court

has developed “a special ripeness doctrine applicable only to

constitutional property rights claims.” Timothy V. Kassouni,

“The Ripeness Doctrine and the Judicial Relegation of

Constitutionally Protected Property Rights,” 29 Cal. W. Rev.

1, 2 (1992).

Id.

® “(T]he finality requirement is concerned with whether the initial

decisionmaker has arrived at a definitive position on the issue that

inflicts an actual, concrete injury ....” Jd. at 193.

8

[B]ecause the Fifth Amendment proscribes takings

without just compensation, no constitutional

violation occurs until just compensation has been

denied. The nature of the constitutional right

therefore requires that a property owner utilize

procedures for obtaining compensation before

bringing a § 1983 action.

Id. at 195 n.13.

Two years later, in First English Evangelical Lutheran

Churcn of Glendale v. County of Los Angeles, 482 U.S. 304,

315-16 (1987), this Court said that the state courts must provide

adequate procedures for recovery of just compensation when

government takes private property. Williamson County and

First English, read together, require that property owners seek

and be denied compensation in state court before bringing a

federal takings claim in federal court. That said, this Court has

not explained how the lower federal courts should resolve the

issue preclusion and claim preclusion questions that can arise

when property owners seek to ripen their federal takings claims

in state court as required by Williamson County.

What should be clear is that the very steps necessary to

ripen a federal takings claim should not serve to bar that claim.

This Court’s language holds out the promise of federal

adjudication of a federal takings claim. In Williamson County,

this Court explained that the takings claim was premature (see,

e.g., Williamson County, 473 U.S. at 185, 187, 194, 196) and

not ripe (see, e.g., id. at 186, 194).

Throughout the opinion, the Court returns to

these twin concepts, emphasizing and reemphasizing

the temporal nature of its holding, repeatedly saying

that land use cases can be ripened and then litigated

in federal court.

9

Michael M. Berger, Supreme Bait & Switch: The Ripeness

Ruse in Regulatory Takings, 3 Wash. U. J.L. & Pol’y 99, 104

(2000) (emphasis added).

In another context, habeas corpus review, this Court

explained that construing a law as ceding authority to interpret

federal law to the states would be an important change in the

Court’s jurisdiction, requiring a clear intent on the part of

Congress to do so. Williams v. Taylor, 529 U.S. 362, 379

(2000). Amici urge this Court to review this case and open the

doors of the federal courthouse to those with federal takings

claims.

B. Federal Courts Must Define the Contours of

Federal Takings Law; That Responsibility

Cannot Be Left to the State Courts

When takings claims ripened through state procedures are

precluded from resolution in the federal courts by claim or issue

preclusion, the federal courts do not contribute to the

development of the law pertaining to Fifth Amendment takings.

State courts will decide when compensation is appropriate and

how it should be measured (see George A. Yuhas, The Ever-

Shrinking Scope of Federal Court Takings Litigation, 32 Urb.

Law. 465, 475 (2000)\. and the only remaining federal court

review is direct review by this Court (see id. at 466). Some

commentators suggest that is acceptable,* but this Court

’ See Berger, Supreme Bait & Switch, supra, at 122 (“Once property

owners submit their claims to state courts, their risk of never seeing

the inside of a federal courthouse is high.”).

* E.g., Thomas E. Roberts, Procedural Implications of Williamson

County/First English in Regulatory Takings Litigation:

Reservations, Removal, Diversity, Supplemental Jurisdiction,

Rooker-Feldman, and Res Judicata, 31 Envtl. L. Rev. 10353, 10354

(2001); Kathryn E. Kovacs, Accepting the Relegation of Takings

(continued...)

10

disagreed in England v. Louisiana State Board of Medical

Examiners. in England, this Court said that appellate review by

the High Court does not provide adequate recourse to those who

want to litigate federal claims in federa: court

It is true that, after a postabstention

determination and rejection of his federal claims by

the state courts, a litigant could seek direct review in

this Court. But such review . . . is an inadequate

substitute for the initial District Court determination

. . . to which the litigant is entitled in the federal

courts. This is true as to issues of law; it is

especially true as to issues of fact. Limiting the

litigant to review here would deny him the benefit of

a federal trial court’s role in constructing a record

and making fact findings. How the facts are found

will often dictate the decision of federal claims. It is

the typical, not the rare, case in which constitutional

claims turn upon the resolution of contested factual

issues. There is always in litigation a margin of

error, representing error in factfinding .... Thus in

cases where, but for the application of the abstention

been by the District Court, a litigant may not be

unwillingly deprived of that determination. The

possibility of appellate review by this Court of a

state court determination may not be substituted,

against a party’s wishes, for his right to litigate his

federal claims fully in the federal courts.

375 U.S. at 416-17 (internal quotations, citations, and footnote

omitted).

* (...continued)

Claims to State Courts: The Federal Courts’ Misguided Attempts to

Avoid Preclusion Under Williamson County, 26 Ecology L.Q. 1, 34-

47 (1999).

Er eee

—_ Tc — —

11

England is an abstention case, not a takings case, but this

Court’s words are equally relevant to Fifth Amendment takings

cases.

[A]s the Court acknowledged in abstention cases, it

now seems necessary, as the lowest level of

protection affordable to Fifth Amendment property

rights, for the Court to acknowledge that in the

unique class of land use ripeness cases a trial in state

court may be a precondition designed to weed out

the cases where relief is granted by state law.

Obtaining state court relief may moot the federal

issue, but unsuccessful state court litigation “may not

be substituted, against a party’s wishes, for his right

to litigate his federal claims fully in federal courts.”

Berger, Supreme Bait & Switch, supra, at 129-30 (quoting

England v. Louisiana State Board of Medical Examiners, 375

U.S. at 417). See Barry Friedman, Under the Law of Federal

Jurisdiction: Allocating Cases Between Federal and State

Courts, 104 Colum. L. Rev. 1211, 1270 (2004) (Preclusion law

should provide no more of an obstacle when litigating a takings

claim than it did in England itself.).

Far more is involved than a plaintiff s desire to litigate his

or her case in federal court: an interpretation of Williamson

County that cuts lower federal courts out of federal takings

cases ignores the distinct roles of the Federal Constitution and

state constitutions. The United States Constitution “prescribes

a floor below which protections may not fall, rather than a

ceiling beyond which they may not rise.” United States v.

Hammad, 858 F.2d 834, 839 (2d Cir. 1988), cert. denied, 498

U.S. 871 (1990). State constitutions can provide protections for

civil liberties that are more expansive than those provided by

the United States Constitution. Prune Yard Shopping Center v.

Robins, 447 U.S. 74, 81 (1980). Amici PLF and National

Association of Realtors urge this Court to act now so that the

12

lower federal courts can set the floor for and define the contours

of federal takings law.

APPLICATION OF DOLAN’S STANDARD

OF “ROUGH PROPORTIONALITY”

CANNOT DEPEND ON THE METHOD

BY WHICH EXACTIONS ARE IMPOSED

As Petitioner and Amicus National Association of Home

Builders (NAHB) ably describe, there is a nationwide split of

authority on the question of whether the heightened standard of

judicial scrutiny articulated in Dolan v. City of Tigard, 512 U.S.

374, applies to legislatively adopted exactions. See petition at

11-12; and amicus curiae brief of NAHB. In California, the

“rough proportionality” standard of scrutiny described in Dolan

does not apply to legislatively imposed exactions. The

California Supreme Court adopted a bright-line test: the Dolan

standard of scrutiny applies to exactions imposed on an

individual and discretionary basis, and a rational basis standard

applies to generally applicable, legislatively formulated

exactions. Ehrlich v. City of Culver City, 911 P.2d 429, 444

(Cal.), cert. denied, 519 U.S. 929 (1996).’

° See San Remo Hotel L.P. v. City and County of San Francisco, 41

P.3d at 104-05, App. at 139a (“[A] housing fee . . . assessed under

the [San Francisco ordinance] stands in sharp contrast to the

recreational facilities replacement fee we found subject to heightened

scrutiny in Ehrlich.”); Santa Monica Beach, Lid. v. Superior Court

of Los Angeles County, 968 P.2d 993, 1002 (Cal. 1999) (The

standard of scrutiny in Nollan and Dolan do not apply. “[A]

different standard of scrutiny would apply to development fees that

are generally applicable through legislative action.”); Landgate, Inc.

v. California Coastal Commission, 953 P.2d 1188, 1198-99 (Cal.),

cert. denied, 525 U.S. 876 (1998) (A more deferential standard of

judicial review is appropriate in this case where neither conveyances

(continued...)

ee a ee ee

ETO 8

— —_ ow ae

13

A. The Risk of Government Extortion

Does Not Disappear When Exactions

Are Imposed Legislatively

In Ehrlich, the California Supreme Court opined that

heightened scrutiny is not required when analyzing the

constitutionality of legislatively formulated exactiors, because

“the heightened risk of the ‘extortionate’ use of the police

power to exact unconstitutional conditions is not present.”

Ehrlich, 911 P.2d at 444. Other state courts followed suit. See,

e.g., Rogers Machinery, Inc. v. Washington County, 45 P.3d

966, 982 (Or. Ct. App. 2002), cert. denied, 538 U.S. 906

(2003) (Dolan only applies “with the sort of governmental

leveraging that can arise in case-by-case adjudicatory

imposition of development conditions.”); Krupp v.

Breckenridge Sanitation District, 19 P.3d 687, 696 (Colo.

2001) (“One critical difference between a legislatively based fee

and a specific, discretionary adjudicative determination is that

the risk of leveraging or extortion on the part of the government

is virtually nonexistent in a fee system.”); and Home Builders

Association of Central Arizona v. City of Scottsdale, 930 P.2d

993, 1000 (Ariz.), cert. denied, 521 U.S. 1120 (1997) (“The

California court suggested that the Dolan analysis applied to

cases of regulatory leveraging that occur when the landowner

must bargain for approval of a particular use of its land.”).

The fact is that the risk of government extortion does not

disappear when exactions are imposed by legislation of general

applicability. See Inna Reznik, The Distinction Between

® (...continued)

nor individualized development fees are at issue.); and Kavanau v.

Santa Monica Rent Control Board, 941 P.2d 851, 867 (Cal. 1997),

cert. denied, 522 U.S. 1077 (1998) (Nollan and Dolan do not apply

because “rent control neither requires a physical dedication nor

amounts to an individual and discretionary development fee.”) /d. at

868 n.1 (Mosk, J., concurring).

14

Legislative and Adjudicative Decisions in Dolan v. City of

Tigard, 75 N.Y.U. L. Rev. 242, 251 (2000) (“The extortion and

inequitable economic burdens that local governments

potentially impose on landowners through administrative

processes can occur just as easily in the legislative context.”)

Id. at 267. Indeed, it is highly probable that grossly

disproportionate exactions will result from broadly applicable,

generalized exaction programs. Local legislative bodies acting

in their legislative capacity may be more likely to use the police

power to exact unconstitutional conditions than in the

adjudicative setting. See Reznik, supra, at 270-72. Those types

of programs do not allow government to consider widely

varying individual circumstances, and do not provide a means

to accommodate those who do not fit within a program’s

general categories.

B. The Political Process Provides Inadequate

Protection from Extortionate Exactions

Parties to adjudicative proceedings have significant

procedural rights that may enhance equal treatment for

competing interests. Reznik, supra, at 273. But the only

safeguard against legislatively imposed extortionate exactions

is found in the political process. The California Supreme Court

said that

[wJhile legislatively mandated fees do present some

danger of improper leveraging, such generally

applicable legislation is subject to the ordinary

restraints of the democratic political process. A city

council that charged extortionate fees for all property

development, unjustifiable by mitigation needs,

would likely face widespread and well-financed

opposition at the next election.

San Remo Hotel L.P. v. City and County of San Francisco, 41

P.3d at 105, App. at 141a. See Rogers Machinery, Inc. v.

15

Washington County, 45 P.3d at 982, wherein the Oregon Court

of Appeals cited the quoted language.

While the democratic political process may, as the

California Supreme Court suggested, protect against

“extortionate fees for all property development,” it is doubtful

that the political process would work as efficiently to remove

government officials who impose extortionate fees on only

some forms of property development. The cost of development

exactions is invisible to the majority of voters, and developers

are subject to the kind of majoritarian oppression that affects

seriously outnumbered groups. See Reznik, supra, at 271-72;

and William A. Fischel, Utilitarian Balancing and Formalism

in Takings, 88 Colum. L. Rev. 1581, 1582 (1988).

C. The Legislative-Adjudicative

Distinction Creates Great Uncertainty

The legislative-adjudicative distinction is not a viable

means for determining whether or not to apply Dolan’s “rough

proportionality” standard because it is difficult to pigeonhole

local government action as legislative, administrative, or

judicial. Local governments are not structured under strict

separation of powers principles, and commonly combine these

functions in land use decisionmaking. See Reznik, supra, at

257-61. See also Steven J. Eagle, Symposium: When Does

Retroactivity Cross the Line? : Winstar, Eastern Enterprises and

Beyond: Substantive Due Process and Regulatory Takings: A

Reappraisal, 51 Ala. L. Rev. 977, 1042 (2000) (“The problem

of discerning which statutes are legislative and which are

adjudicative for purposes of a Dolan analysis is apt to be open-

ended and chronic.”).

Inna Reznik authored the most comprehensive article on

the problems encountered when differentiating between

legislative and adjudicative decisions in land use cases. See

Reznik, supra. In the article, Ms. Reznik describes the results

of a survey of 29 cases. She put each case into one of three

16

categories: (1) scheduled exactions (where an amount of

money or land was specified in advance by a legislative body);

(2) negotiated (authorized by a legislative body but individually

determined in response to a specific development proposal); or

(3) not clear. Jd. at 252. The results show a great deal of

confusion among the courts, and an inconsistent application of

the legislative-adjudicative distinction.

Of the cases involving exactions that were scheduled by

the legislative body (those closest to legislative decisions), just

as many courts applied Dolan’s “rough proportionality” test as

refused to apply it because of the belief that Dolan applies only

to adjudicative decisions. Reznik, supra, at 254. In challenges

to negotiated exactions (those closest to adjudicative decisions),

five out of nine applied Dolan’s “rough proportionality”

standard. Jd. at 255. And finally, in nine cases where the court

did not clarify the nature of the exaction, eight out of nine

applied the “rough proportionality” standard. Jd. at 256.

The artificial distinction between fees imposed by

legislative acts and those imposed by quasi-adjudicative acts

creates uncertainty among the courts, property owners, and

local governments. All would benefit from a manageable and

predictable test.

D. The Bright-Line Test Adopted by the

California Supreme Court, and Followed

by a Number of Other State Courts, Does Not

Further the Purpose of the Takings Clause

The Takings Clause of the Fifth Amendment to the United

States Constitution guarantees that private property shall not

“be taken for public use without just compensation.” U.S.

Const. amend. V. In Armstrong v. United States, 364 U.S. 40,

49 (1960), this Court explained that “[t]he Fifth Amendment's

guarantee .. . was designed 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.” The

-_

17

nexus and rough proportionality requirements ensure that the

purpose of the Fifth Amendment is fulfilled by protecting

property owners from government actions that impact

arbitrarily and unevenly on isolated individuals. See James L.

Huffman, Colloquium on Dolan: The Takings Clause Doctrine

of the Supreme Court and the Federal Circuit: Dolan v. City

of Tigard: Another Step in the Right Direction, 25 Envtl. L.

143, 152 (1995) (“The takings clause . . . protects against this

majoritarian tyranny . . . by insisting that the costs imposed by

government use or regulation of private property are borne by

all to whom the benefits inure.”’).

The nexus and rough proportionality tests of Nollan v.

California Coastal Commission, 483 U.S. 825, and Dolan were

adopted for the express purpose of preventing government from

taking advantage of propertyowners seeking permits to develop

or otherwise use private property. In Nollan, this Court used

the now-famous phrase “‘an out-and-out plan of extortion’” to

describe the California Coastal Commission’s attempt to take

private property without paying just compensation. /d. at 837

(quoting J.E.D. Associates, Inc. v. Town of Atkinson, 432 A.2d

12, 14-15 (N.H. 1981)). See Lambert v. City and County of San

Francisco, 529 U.S. 1045 (2000) (Scalia, Kennedy, & Thomas,

JJ., dissenting to denial of certiorari) (“The object of the

Court’s holding in Nollan and Dolan was to protect against the

State’s cloaking within the permit process ‘“an out-and-out plan

of extortion.” ”). (Citations omitted.)

Legal scholars argue that neither the Fifth Amendment nor

the takings precedents support a legislative-adjudicative

distinction between exactions, and those scholars urge an

integrated doctrine that recognizes the constitutional

equivalency of all exactions. See Huffman, supra, at 150 (Dean

Huffman acknowledges the important procedural implications

of a legislative-adjudicative distinction, but goes on to say that

“it is not at all clear that the distinction should have any

relevance with respect to the substantive protection of property

18

rights. From the point of view of the property owner, the

consequence of a taking is the same whether done by the

legislative, executive, or judicial branches of government. The

Fifth Amendment draws no such distinction.”). See also

David L. Callies, Regulatory Takings and the Supreme Court:

How Perspectives on Property Rights Have Changed from

Penn Central to Dolan, and What State and Federal Courts are

Doing About It, 28 Stetson L. Rev. 523, 575 (1999) (Land

development conditions require a legitimate state interest,

nexus, and proportionality. “These rules extend to exactions

beyond physical dedications even though Nollan and Dolan

were land dedication cases. ... Why should a common

legislative scheme of conditions escape scrutiny if it lacks either

nexus or proportionality? An unconnected or disproportionate

condition is extortionate, regardless.”).

Legislatively imposed exactions have become an

increasingly popular method of funding local projects, and the

distinction between exactions imposed by legislative acts and

those imposed by quasi-adjudicative acts does not further the

Takings Clause’s substantive protection of private property.

CONCLUSION

This Court phrased the Williamson County prerequisites

to federal takings litigation in terms of ripeness. The ripeness

inquiry in a takings claim involves a determination that a

property owner has exhausted all avenues for obtaining

compensation.'’ The ripeness requirements cannot and should

not extinguish the opportunity to litigate in federal court. As

the Second Circuit Court of Appeals recently noted, such a

result “would be both ironic and unfair.” Santini v. Connecticut

Hazardous Waste Management Service, 342 F.3d 118, 130 (2d

‘© Laurence H. Tribe, American Constitutional Law 337 (3d ed.

2000).

19

Cir. 2003), cert. denied, No. 04-142, 2004 WL 2071528 (Oct. 4,

2004).

Equally unfair are the grossly excessive development

exactions that result when courts refuse to apply the “rough

proportionality” standard required by this Court in Dolan v.

City of Tigard. The standard of review in a constitutional

takings claim must not depend on arbitrary 4nd ill-defined

distinctions like the manner by which an exaction is imposed.

Amici Pacific Legal Foundation and National Association

of Realtors respectfully request that this Court grant certiorari

to resolve the important issues raised by the Ninth Circuit

Court’s decision in this case.

DATED: November, 2004.

Respectfully submitted,

RALPH W. HOLMEN MERIEM L. HUBBARD

National Association of Realtors Counsel of Record

430 North Michigan Avenue R. S. RADFORD

Chicago, Illinois 60611 Pacific Legal Foundation

Telephone: (312) 329-8375 3900 Lennane Drive, Suite 200

Facsimile: (312) 329-8256 Sacramento, California 95834

Telephone: (916) 419-7111

Facsimile: (916) 419-7747

Counsel for Amici Curiae Pacific Legal Foundation

and National Association of Realtors