Opposition Brief — Rossco Holdings Inc. v. California

t—Seeeeine Court, US,

FILED

No. 89-1314

In the Supreme Cou

OF THE

United States | JOSEPH F. SAPNIOL, JRj

MAR 23 1990

CLERK

————

OCTOBER TERM, 1989

Rossco HOLDINGS INCORPORATED,

a California Corporation

d.b.a. QUAKER CORPORATION,

MICHEL T. GHOSN,

Petitioners,

VS.

STATE OF CALIFORNIA,

CALIFORNIA COASTAL COMMISSION,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI

TO THE COURT OF APPEAL OF CALIFORNIA

SECOND APPELLATE DISTRICT,

DIVISION THREE

RESPONDENTS’ BRIEF IN OPPOSITION

JOHN K. VAN DE Kamp

Attorney General

N. GREGORY TAYLOR

Assistant Attorney General

ANTHONY M. SUMMERS

DENNIS M. EAGAN

Supervising Deputy Attorneys General

*STEVEN H. KAUFMANN

Deputy Attorneys General

3580 Wilshire Boulevard

Los Angeles, California 90010

Telephone: (213) 736-2136

Attorneys for Respondents

State of Califorma and

California Coastal Commission

*Counsel of Record

Bowne of Los Angeles. inc.. Law Pmnters (213) 742-6600

BEST AVAILABLE COPY™

i

QUESTIONS PRESENTED

(1) Whether the California Court of Appeal, applying

state law, correctly rejected petitioners’ challenge to the

State coastal zone boundary, given that the boundaries

of the coastal zone have been specifically defined by the

California Legislature by adopted maps and petitioners’

properties concededly lie within the boundaries as

depicted on those maps.

(2) Whether the California Court of Appeal correctly

refused to decide a claim of constitutional inadequacy in

the Coastal Commission’s adjudicatory hearing process,

given that the issue was never raised before the trial

court or upon a proper record when finally presented to

the appellate court.

(3) Whether the California Court of Appeal correctly

decided, applying state law, that petitioner Quaker

waived its right to attack the validity of conditions

imposed on a grant of subdivision approval and sue for

damages, given that Quaker concededly accepted the

benefits of the permit issued and complied with the

conditions.

(4) Whether the California Court of Appeal correctly

rejected Quaker’s suit for damages under principles of

res judicata, given that Quaker failed to attack in

administrative mandamus the validity of the adjudicatory

decision approving its subdivision request or the

conditions imposed thereby.

ii

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED

TABLE OF AUTHORITIES iv

JURISDICTION 1

CONSTITUTIONAL AND STATUTORY PROVISIONS

INVOLVED 2

STATEMENT OF THE CASE 2

REASONS WHY THE PETITION SHOULD BE

DENIED 6

L

Il.

THE COURT LACKS JURISDICTION OVER

THE QUESTION CONCERNING THE STATE

COASTAL ZONE BOUNDARY BECAUSE IT

WAS NEITHER RAISED NOR DECIDED IN

THE STATE COURT PROCEEDINGS

BELOW 6

THE COURT LACKS JURISDICTION

CONCERNING ASSERTED

CONSTITUTIONAL INADEQUACIES _IN

THE COMMISSION’S HEARING PROCESS

BECAUSE THE ISSUE WAS NEVER

RAISED BEFORE THE TRIAL COURT OR

RAISED UPON A PROPER RECORD WHEN

FINALLY PRESENTED TO THE COURT OF

APPEAL 9

iii

TABLE OF CONTENTS

Page

Il. REVIEW OF THE REMAINING FEDERAL

QUESTIONS ASSERTED IS FORECLOSED

BECAUSE THE DECISION OF THE COURT

OF APPEAL THAT QUAKER WAIVED ITS

RIGHT TO ATTACK ITS CONDITIONAL

APPROVAL AND SUE FOR DAMAGES

CONSTITUTES AN INDEPENDENT AND

ADEQUATE STATE GROUND SUFFICIENT,

BY ITSELF, TO MAINTAIN’ THE

JUDGMENT BELOW 12

A. Under California Law, a Landowner Who

Accepts a Permit and Complies with its

Conditions Waives the Right to Assert the

Invalidity of the Conditions and Sue the Issuing

Public Entity for the Costs of Complying 13

B. Apart from Waiver, the Court of Appeals

Correctly Concluded that, Under Applicable

State Court Procedure and Principles of Res

Judicata, Quaker’s Failure to Timely Challenge

~ the Validity of the Conditions of its 1983 Permit

Approval in Administrative Mandamus

Foreclosed Any Later Suit for Damages. 18

CONCLUSION 25

iv

TABLE OF AUTHORITIES

Cases Page

Agins v. City of Tiburon, 24 Cal.3d 266 (1979) 19

Beaupre’ v. Noyes, 138 U.S. 397 (1891). 13

Beck v. Washington, 369 U.S. 541 (1962) 11

Bi-Metallic Co. v. Colorado, 239 U.S. 441 (1915) 7

_ Black v. Cutter Laboratories, 351 U.S. 292 (1956) 13

Bowles v. Willingham, 321 U.S. 503 (1944) 7

California Coastal Comm’n v. Superior Court (him),

210 Cal.App.3d 1488 ai, 22

Cardinale v. Louisiana, 394 U.S. 437 (1969) 7

County of Imperial v. McDougal,

19 Cal.3d 505 (1977) 13, 15, 16

DeLuca v. Board of Supervisors,

134 Cal.App.2d 606 (1955) } 22

Dept. of Trans. ex rel. People v. Amoco Oil Co.,

528 N.E.2d 1018 (Ill. App. 2 Dist. 1988) 17

Estate of Kramme,. 20 Cal.3d 567 (1978) 9

Vv

TABLE OF AUTHORITIES

Cases Page

Eustis v. Bolles, 150 U.S. 361 (1893) 13

First English Evangelical Lutheran Church of Glendale

v. County of Los Angeles,

482 U.S. 304 (1987) 19, 20, 22

Godchaux Co. v. Estopinal, 251 U.S. 179 (1919) 11

Hill v. California, 401 U.S. 797 (1971) 7

Hulbert v. Chicago, 202 U.S. 275 (1906) 11

Hurley v. Kincaid, 285 U.S. 95 (1931) 21

Knickerbocker v. City of Stockton,

199 Cal.App.3d 235 (1988) 23

Monroe v. Trustees of the California State Colleges,

6 Cal.3d 399 (1971) 22

Natural Resources Defense Council, Inc. v. California

Coastal Zone Conservation Com.,

57 Cal.App.3d 76 (1976) 22

Nollan v. California Coastal Comm’n,

483 U.S. 825 (1987) 12, 15, 16

Paoli v. California Coastal Comm’n,

178 Cal.App.3d 544 18

vi

TABLE OF AUTHORITIES

Cases Page

Patterson v. Central Coast Etc. Conservation Com.,

58 Cal.App.3d 833, 841 (1976) 22

Pfeiffer v. City of La Mesa,

69 Cal.App.3d 74 (1977) 14-16

Presaultv. LCC, US. _,

58 U.S.L.W. 4193 (1990) 23

Romero v. County of Santa Clara,

3 Cal.App.3d 700 (1970) 22

Salton Bay Marina, Inc. v. Imperial Irr. Dist.,

172 Cal.App.3d 914 (1985) 16, 17

Stockton v. Dept. of Employment,

25 Cal.2d 264 (1944) 22

United States v. Utah Construction & Mining Co.,

384 U.S. 394 (1966) 23

University of Tennessee v. Elliott,

478 U.S. 788 (1986) 23

vii

TABLE OF AUTHORITIES

Codes and Statutes Page

28 U.S.C. § 1257(a) 1

California Evid. Code,

§ 664 | 22

California Public Resources Code,

§ 30000 et seq. 2

§ 30103 os

§ 30240 18

§ 30250 18

§ 30251 18

§ 30801 18, 21

California Code of Civil Procedure

§ 1094.5 11, 14, 20

§ 1094.6 21

1

No. 89-1314

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1989

ROSSCO HOLDINGS INCORPORATED,

a California Corporation

d.b.a. QUAKER CORPORATION,

MICHEL T. GHOSN,

Petitioners,

vs.

STATE OF CALIFORNIA,

CALIFORNIA COASTAL COMMISSION,

Respondents.

RESPONDENTS’ BRIEF IN OPPOSITION

Respondents State of California and California Coastal

Commission respectfully request that this Court deny the

petition for writ of certiorari seeking review of the

opinion of the California Court of Appeal in this case.

That opinion is reported at 212 Cal.App.3d 642 (1989).

JURISDICTION

Petitioners purport to invoke the jurisdiction of this

Court under 28 U.S.C. § 1257(a). However, jurisdiction

is lacking for three reasons.

2

First, petitioners’ state coastal zone boundary challenge

proceeded in the courts below on pure issues of state

law. The assertion that the State Legislature’s manner

of including petitioners’ properties in the coastal zone

violated due process was neither raised nor decided in

the state court proceedings below.

Second, the issue of claimed constitutional inadequacies

in the hearing process of the respondent Commission

was not decided in the proceedings below because it was

never raised before the trial court and because no

proper record was presented when it was finally raised

in the State Court of Appeal.

Finally, review of the remaining federal questions

asserted is foreclosed because the Court of Appeal, in

deciding that petitioner Quaker waived its right to attack

the validity of conditions imposed on its subdivision

approval and sue for damages, proceeded on an

independent and adequate state ground sufficient, by

itself, to maintain the judgment below.

CONSTITUTIONAL AND STATUTORY PROVISIONS

INVOLVED

The Fifth and Fourteenth Amendments to the United

States Constitution are pertinent to this case, as well as

sections 17 and 30103(a) of the California Coastal Act of

1976 (Cal. Public Resources Code, § 30000 et seq.).

STATEMENT OF THE CASE

Petitioners Rossco Holdings Inc. (dba “Quaker

Corporation") and Michel Ghosn ("Ghosn") own three

3

unrelated, undeveloped properties in the Malibu-Santa

Monica Mountains area of the County of Los Angeles,

California. Quaker owns two of those properties, the

272-acre "Mulholland" property and the 102-acre "Piuma”

property. Ghosn owns the third, the 160-acre "Ghosn"

property.

In July 1983, the California Coastal Commission

("Commission") approved Quaker’s application for a 22-

lot subdivision of the Piuma property. The approval was

made subject to conditions requiring recordation of an

offer to dedicate an open space easement and the

purchase of 21 transferable development credits

("TDCs") to offset the cumulative effects associated with

the new lots created. Though not disclosed by the

complaint filed or petition to this Court, the conditional

approval enabled the Commission to approve a 22-lot

subdivision, rather than a subdivision of eight lots as

permitted by the Area Plan. Resps. & Cr.-Apps’ Reat.

for Jud. Notice, Exh. 1. Quaker accepted the coastal

development permit authorizing the subdivision which

was issued in July 1985 and thereafter, but prior to filing

this suit, it fully satisfied both conditions./

1. The petition states the TDCs were purchased from an

“environmental group." Pet. at 2. In fact, they were purchased

from a non-profit entity implementing a lot consolidation

program in the Santa Monica Mountains established by another

State agency, the California Coastal Conservancy.

The petition also erroneously states that “[a]t the time

this lawsuit was filed, Quaker was still making installment

payments on the $297,500 exaction, while the required ‘offer to

dedicate’ its landholding was still pending but had not yet [sic]

accepted by a government entity... ." Pet. at 3. The complaint,

4

On September 29, 1987, some four years after the

Commission’s conditional approval, Quaker and Ghosn

jointly filed the underlying action. Although several

different claims are stated, only two remain pertinent

here. The first, a claim for damages, mandate and

declaratory relief, involves a challenge by both Quaker

and Ghosn to the location of the State "coastal zone”

boundary established by the California Legislature in

enacting the Coastal Act of 1976. The second concerns

a challenge by Quaker to the Commission’s 1983

approval of its Piuma subdivision. It seeks interim

damages under various theories based on a claim that

the conditions of approval Quaker accepted constitute an

unlawful taking in violation of the "Just Compensation”

Clause of the Fifth Amendment.

In November 1987, a coalition of 16 homeowner groups

intervened in the action to oppose the relief sought by

the complaint.

On January 5, 1988, respondents demurred to all causes

of action pleaded in the complaint. On April 27, 1988,

with one exception, the trial court sustained respondents’

demurrers without leave to amend.

which was filed in September 1987, alleged that, as to the TDC

requirement, "[ajll of said sums have been paid by QUAKER to

the Mountains Restoration Trust, with the last and final payment

paid under protest in or about August 1987." Joint Appendix

("Jt. App.") #6, Complaint 1 64 (A). As to the dedication

requirement, Quaker alleged that it "has recorded an offer to

dedicate an open space easement but the same has not yet been

accepted by a government [sic] and thus the offer remains open

and pending.” Ibid., 1 64 (B).

5

Petitioners appealed from the order of dismissal and

judgment. The Commission filed a cross-appeal to

preserve its ability to argue the one ground for demurrer

overruled by the trial court as a further reason for

affirmance.

In a published opinion filed on July 26, 1989, the

California Court of Appeal for the Second Appellate

District, Division Three, reversed on the Commission’s

cross-appeal and affirmed the judgment, as modified,

holding, as pertinent here:

(1) The boundaries of the State’s "coastal zone"

have been specifically defined by maps adopted by the

California Legislature, and petitioners’ properties

concededly lie with the boundaries as depicted on those

maps;

(2) Under settled state law, by accepting the

benefits of the "Piuma" permit and complying with the

conditions imposed, Quaker waived its right to later

attack assertedly "improper" conditions;

(3) Apart from waiver, Quaker’s failure to timely

petition for administrative mandamus to invalidate the

conditions, under applicable state court procedures and

principles of res judicata, precludes suit in inverse

condemnation seeking interim damages; and

(4) Quaker failed to present a proper record by

which the Court might review the constitutional

adequacy of the State’s administrative mandamus

process relative to the Commission’s 1983 decision on

Quaker’s "Piuma” permit.

6

On November 2, 1989, the California Supreme Court

denied a petition for review.

REASONS WHY THE PETITION SHOULD BE DENIED

I.

THE COURT LACKS JURISDICTION

OVER THE QUESTION CONCERNING

THE STATE COASTAL ZONE

BOUNDARY BECAUSE IT WAS

NEITHER RAISED NOR DECIDED IN

THE STATE COURT PROCEEDINGS

BELOW

The petition attempts for the first time to convert what

was a pure question of state law before the state courts

into a federal question. Petitioners Quaker and Ghosn

below jointly challenged the location of the State "coastal

zone" boundary in the area of their respective properties

in the Santa Monica Mountains. There was no dispute

that the coastal zone boundary maps adopted by the

California Legislature show their properties to be well

within the coastal zone. Instead, petitioners contended

that the State Legislature intended the boundary, as

defined in the Coastal Act of 1976, to be controlled by

a topographic ridgeline (seaward of their properties) and

not the maps, and that the Commission’s staff misled the

Legislature by preparing the maps in violation of statute

in order to improperly expand the agency’s jurisdiction.

The petition now reframes the issue in an effort to

pose a federal question. Petitioners assert they were

denied due process because they received no hearing or

7

notice from the State Legislature before their properties

were included in the coastal zone. While the argument

offered in the petition addresses almost exclusively state

court issues of statutory interpretation, the due process

argument reveals itself for the first time at the end of

the argument in two brief sentences. Pet. at 22.

This Court has consistently refused to decide federal

constitutional questions raised before it for the first time

on review of a state court decision. dinale v.

Louisiana, 394 U.S. 437, 438 (1969). For jurisdiction to

obtain, the question presented must have been raised

and decided in the state court below. Hill v. California

401 U.S. 797, 805 (1971).

The due process question now asserted was never

raised, briefed, argued or passed upon in the trial or

appellate courts. It is, therefore, not properly reviewable

in this Court.

Even addressing the argument, moreover, it has no

merit. A host of cases squarely reject any constitutional

right of notice and hearing preceding the enactment of

legislation. Bowles v. Willingham, 321 U.S. 503, 519

(1944); Bi-Metallic Co. v. Colorado, 239 U.S. 441, 445

(1915).

Finally, the State Court of Appeal correctly decided the

state issues argued by petitioners. The California

“coastal zone" boundary was established by the State

Legislature over 14 years ago as part of its enactment of

the California Coastal Act of 1976. California Public

Resources Code section 30103, subdivision (a), defines

the State "coastal zone” as follows:

8

Coastal zone’ means that land and water area

of the State of California from the Oregon

border to the border of the Republic of Mexico,

specified o set in

Section 17 of that chapter of the Statutes of

1975-1976 Regular Session enacting this division,

extending seaward to the state’s outer limit of

jurisdiction . . . and extending inland generally

1,000 yards from the mean high tide line of the

sea. In significant coastal estuarine, habitat, and

recreational areas it extends inland to the first

major ridgeline paralleling the sea or five miles

from the mean high tide line of the sea,

whichever is less and in developed urban areas

the zone generally extends inland less than 1,000

yards ...." (Emphasis added.)

Section 17 of chapter 1330 of the California Statutes of

1976, as amended by section 29 of chapter 1331 of the

Statutes of 1976, in turn provides:

"The coastal zone, as generally defined in Section

30103 . . . shall include the land and water areas as

shown on the map prepared by the California Coastal

Zone Conservation Commission titled "California

Coastal Zone" dated August 11, 1976, and on file with

the Secretary of State." (Emphasis added.)

The argument below, and again here, is that the maps

are invalid because the State Legislature intended the

boundary to be controlled by a topographic ridgeline and

not the maps. The flaw in the argument is that it

ignores the plain language of Public Resources Code

section 30103, subdivision (a), and, in particular, section

9

17. Read together, these provisions refer to the coastal

zone as generally described in words and specifically

defined by the maps. Applying settled rules of statutory

construction that the specific must control over the

general (Estate of Kramme, 20 Cal.3d 567, 576 (1978)),

the Court of Appeal concluded that "the boundary

established by the maps must preponderate over the

verbal description in the statute." Pet. at A-10. The

plain language of the two provisions, two failed legislative

attempts to modify the boundary in the manner urged by

petitioners, and an opinion by the State Attorney

General reaching the identical conclusion on the very

issue some nine years earlier in 1980 readily confirm that

the Court was correct in its conclusion.

I.

THE COURT LACKS JURISDICTION

CONCERNING ASSERTED

CONSTITUTIONAL INADEQUACIES IN

THE COMMISSION’S HEARING

PROCESS BECAUSE THE ISSUE WAS

NEVER RAISED BEFORE THE TRIAL

COURT OR RAISED UPON A PROPER

RECORD WHEN FINALLY PRESENTED

TO THE COURT OF APPEAL

The second question presented in the petition is

whether there is some constitutional inadequacy in the

adjudicatory hearing process conducted by _ the

Commission. The Court of Appeal did not decide this

question because it concluded that the issue was never

raised before the trial court, that it proceeds from an

administrative hearing on an unrelated permit matter,

10

and that it is unsupported by any record demonstrating

a constitutional inadequacy in proceedings conducted by

the Commission on the Piuma development.2/Pet. at

A-17-19.) These same inadequacies in the record

foreclose any determination of that question by this

Court.

On appeal from the judgment, Quaker sought for the

first time to have the Court of Appeal take judicial

notice of a hearing before the Commission on an

application to develop another property owned by it

unrelated to proceedings on the Piuma property.

Specifically, Quaker sought to introduce evidence from

that matter that land use proceedings before the

Commission lack cross-examination, the ability to

subpoena witnesses, testimony under oath, a judicial

officer to make rulings on evidentiary questions, or

reasonable limitations on hearing time. From this, it

argued that the "limited" record a landowner is able to

create in a Commission proceeding unfairly restricts the

matters which can be argued in mandamus and prevents

proof of a taking.

The Court of Appeal rejected Quaker’s judicial notice

request, stating:

rien.

2. The Court did observe, however, that "as far as can be

determined in the absence of a proper record, the rules of

chapter 5 of title 14 of the California Administrative Code would

have afforded Quaker a fair opportunity to be heard and to place

sufficient written material in the administrative record to provide

an adequate basis upon which thereafter to seek administrative

mandate respecting any taking asserted to have resulted from the

Commission’s ruling." Pet. at A-17; footnote omitted.

11

"Based upon the present record, it can only be

concluded that any asserted inability on the part of

Quaker to present its constitutional claim adequately

in the context of a CCP section 1094.5 is self-inflicted,

and not properly before this court because Quaker

never bothered to create the necessary record. We

have no transcript of the hearing before the

Commission and no trial court record from which we

might have found Quaker’s claims had merit." Pet. at

A-19.

Just as the record did not permit the California court

to address the question, it fails to provide any factual

setting or procedural posture from which this Court can

determine the constitutional adequacy of Commission’s

1983 proceedings on the "Piuma" approval. A federal

question must be raised, presented and pursued in a

timely and proper manner at the appropriate point or

points in the state court proceedings (Godchaux Co. v.

Estopinal, 251 U.S. 179, 181 (1919); Beck v. Washington,

369 U.S. 541, 550-554 (1962)), and that includes raising

the question before the trial court. Hulbert v. Chicago,

202 U.S. 275, 279-280 (1906). Since the issue was never

timely or properly presented to the California courts, it

falls well short of raising a properly reviewable federal

question.

It bears emphasis, moreover, that the nature of the

challenge placed here is much more focused than the

very generalized argument offered by Quaker. It seeks

to attack conditions imposed on a grant of permit. In

determining whether a conditional dedication constitutes

a "taking" under the Fifth Amendment, the question is

whether the condition imposed "substantially advances a

12

legitimate state interest." Nollan v. California Coastal

Comm’n, 483 U.S. 825, 834, 841 (1987). As the Court

of Appeal observed: "[T]he present procedure for

administrative mandate has not prevented landowners

from proving conditions imposed by the Commission

have been excessive or invalid." Pet. at A-18. For

example, in Nollan the landowner protested before the

Commission the imposition of a public access condition

on approval of a beachfront residence, and ultimately

successfully argued to this Court that the condition

worked an unconstitutional taking. id. at 837.

Fundamental principles of judicial review require that

any claim of constitutional infirmity in an agency’s

procedures proceed from a proper record. Here it does

not, and thus the question does not qualify for review by

this Court.

Il.

REVIEW OF THE REMAINING

FEDERAL QUESTIONS ASSERTED IS

FORECLOSED BECAUSE’ THE

DECISION OF THE COURT OF APPEAL

THAT QUAKER WAIVED ITS RIGHT TO

ATTACK ITS CONDITIONAL APPROVAL

AND SUE FOR DAMAGES

CONSTITUTES AN INDEPENDENT AND

ADEQUATE STATE GROUND

SUFFICIENT, BY ITSELF, TO

MAINTAIN THE JUDGMENT BELOW

The primary issue addressed in the Court of Appeal

decision concerned the propriety of Quaker’s attempt to

collaterally challenge the conditions placed on its 1983

13

"Piuma" permit approval by way of _ inverse

condemnation. The Court held, applying settled state

law, that Quaker waived its right to attack the conditions

when it accepted the benefits of the permit and

complied with the conditions. Pet. at A-13. That waiver

constitutes an independent and adequate state ground

supporting the judgment below. It precludes Quaker’s

belated attack on the permit conditions on any ground,

including federal constitutional grounds. Black v. Cutter

Laboratories, 351 U.S. 292, 297-298 (1956); Eustis v.

Bolles, 150 U.S. 361, 364-370 (1893); Beaupre’ v. Noyes,

138 U.S. 397, 401-402 (1891).

A. Under California Law, a Landowner Who

Accepts a Permit and Complies with its Conditions

Waives the Right to Assert the Invalidity of the

Conditions and Sue the Issuing Public Entity for the

Costs of Complying

Quaker below conceded that it has complied with the

conditions imposed by the Commission upon

development of its Piuma property. That it therefore

waived its right to assert the invalidity of the conditions

and-sue for damages was compelled by well established

state law and the facts presented on the face of the

complaint.

Under California law, a landowner is barred from

- challenging a condition imposed upon the granting of a

special permit if he has accepted the benefits afforded

by the permit and has acquiesced in the condition by

either specifically agreeing to the condition or failing to

challenge its validity. County of Imperial v. McDougal,

19 Cal.3d 505, 510-511 (1977).

14

Pfeiffer v. City of La Mesa, 69 Cal.App.3d 74, 78

(1977) states the rule similarly:

"It_is fundamental that a landowner who accepts

a_building permit and complies with its conditions

waives the right to assert i idi the

conditio sue the issui ublic entity for the

costs of complying with them... If the conditions

imposed by the city in their permit were invalid, Code

of Civil Procedure section 1094.5 provided plaintiffs

with the right and procedures to eliminate them. By

declining to avail themselves of those procedures,

plaintiffs cannot convert that right into a cause of

action in inverse condemnation." (Emphasis added.)

Quaker argues a party may not be "required" to waive

a constitutional challenge. Pet. at 13. That is not this

case. Nothing in the record, pleaded or argued suggests

Quaker was "required" in any manner to waive

constitutional claims and accept the benefits of, and

conditions placed upon, its subdivision approval. The

waiver here was solely of its own making, as is clear

from the allegations set forth in the complaint. The

complaint concedes that Quaker was issued its coastal

development permit for the Piuma development on July

23, 1985 and that it has since complied with the

conditions imposed by the Commission. Jt. App. #6,

Complaint 1 64. Specifically, it alleges that Quaker

entered into a contract with the Mountains Restoration

Trust, a quasi-public agency, to satisfy a requirement that

it purchase 21 transferable development credits ("TDCs"),

and that it made its last and final payment to comply

with the Commission’s conditional approval on or about

August 1987, approximately a month before this suit was

15

filed. Id., 164A. Further, it alleges that it recorded the

offer to dedicate an open space easement required as a

condition of its permit approval. Id., 1 64B.

The State’s Coastal Act contains a provision which

specifically allows for ‘udicial review of any final decision

or action of the Commission in administrative

mandamus.*/ This procedure was well known to Quaker.

As to the Commission’s decision on Quaker’s application

to subdivide the Mulholland property, Quaker timely

pursued administrative mandamus review to challenge

the validity of that adjudicatory action. By contrast, as

to its Piuma property, it simply elected not to pursue

mandate review of the permit conditions imposed on its

subdivision approval and accepted the benefits of the

permit issued. Under the County of Imperial,Pfeiffer

rule, Quaker thus waived its right to later claim damages

based on the alleged invalidity of those conditions.

The cases cited by Quaker neither support a contrary

result nor elevate the issue to one of constitutional

dimension. Nollan v. California Coastal Comm’n, supra,

483 U.S. 825, did not address or decide the waiver issue.

Unlike Quaker in this case, the Nollans filed a timely

suit in administrative mandamus challenging the access

condition imposed on approval of their beachfront

residence. No permit was issued to the Nollans, and

3. California Public Resources Code section 30801 provides

in pertinent part: “Any aggrieved person shall have a right to

judicial review of any decision or action of the commission or a

regional commission by filing a petition for a writ of mandate in

accordance with the provisions of Section 1094.5 of the Code of

Civil Procedure, within 60 days after such decision or action has

become final."

16

they did not comply with the condition. The Nollans

therefore preserved their legal ability to challenge the

permit condition imposed. It is true that "[w]hile the

application was pending, the Nollans satisfied the

condition on their option to purchase by tearing down

the bungalow and building the new house and bought the

property” (Id. at 829-830), but because the Nollans timely

pursued their challenge to the Commission’s access

requirement, the Court nonetheless proceeded to address

and invalidate it.

This case, McDougal, and Pfeiffer present a strikirilily

different situation from that in Nollan: in each the

condition was accepted, the permit was issued, and no

timely review in mandate, as required, was sought.

Neither is the narrow fact-based exception to waiver in

Salton Bay Marina, Inc. v. Imperial In. Dist. 172

Cal.App.3d 914 (1985), applicable. There, as a condition

of subdivision approval, plaintiffs entered into written

agreements with the County not to sue the Irrigation

District and to hold it harmless from any damages or

injury caused by the rising of the Salton Sea. When

plaintiffs’ properties were thereafter flooded because of

changes in the District’s own management practices, they

sued in inverse condemnation. On appeal, the court

rejected application of the waiver rule for three reasons,

none of which has any conceivable relevance here.

First, the court found the agreements void as against

public policy because they exempted the District from

liability without provision for recourse where the flooding

was caused by the District’s own negligence. Id. at 941.

No factual parallel is provided here.

17

Second, the court concluded that the rule should not

apply when the intent of the land use approval is not

merely to regulate the development of land or to require

a reasonable dedication, but to effectuate a taking

without payment of compensation, as would have been

the direct effect of the District’s independent action

there in causing arise in the level of the Salton Sea. Id.

The conditions here were directed solely to the impacts

of the subdivision approval applied for, and did not seek

to immunize the Commission from liability from any

actions that it might take independent of the permit

proceeding.

Third, the court stated that before the estoppel doctrine

may be applied, it is necessary that the condition’s effects

be readily apparent to the party to be estopped. Id. at

942. In Salton Bay Marina it was not. In the instant

matter it obviously was, and Quaker has never argued it

did not comprehend the effect of the conditions placed

on approval of its request for a 22-lot subdivision.

Finally, Dept. of Trans. ex rel. People v. Amoco Oil

Co., 528 N.E.2d 1018 (Ill. App. 2 Dist. 1988), is of no

assistance. It involves a collateral attack upon a yoid

condition. In Amoco, the state Department of

Transportation granted a permit allowing Amoco access

to a state highway, but conditioned on the understanding

that any improvement placed on the property could not

serve to increase the value of the right of access when it

was eventually terminated. The Illinois appellate court

found the condition void because its purpose was solely

to depress the property value in anticipation of future

acquisition. 528 N.E.2d at 1024-1025. Amoco was

therefore permitted to collaterally challenge its validity in

18

an eminent domain action later brought against it by the

Department.

In this case, the power to impose both an open space

requirement (Cal. Pub. Resources Code, §$§ 30240,

30251; Paoli v. California Coastal Comm'n, 178

Cal.App.3d 544, 551-552 (1986)) and a transferable

development credit condition to offset the cumulative

effects associated with the grant of a subdivision permit

authorizing new lots (Cal. Pub. Resources Code,

$§ 30250, 30251) was well within the Commission’s

jurisdiction. Again, as conceded on the face of the

complaint, Quaker fully complied with those conditions

and accepted the permit issued. The Court of Appeal

correctly decided, applying state law, that it

unquestionably waived any right to collaterally attack the

allegedly erroneous imposition of those conditions in

inverse condemnation.

B. Apart from Waiver, the Court of

Appeals Correctly Concluded that, Under

Applicable State Court Procedure and

Principles of Res Judicata, Quaker’s

Failure to Timely Challenge the Validity of

the Conditions of its 1983 Permit Approval

in Administrative Mandamus Foreclosed

Any Later Suit for Damages.

While not necessary to affirmance of the judgment

below, the Court additionally concluded that Quaker’s

failure to timely petition for administrative mandamus to

invalidate the conditions, under applicable state court

procedure and principles of res judicata, precluded suit

in inverse condemnation. Pet. at A-15-16. The petition

ees Se Eee >

19

contends this conflicts with the decision of this Court in

Fires_Gosieh Rvenesiial Latberan Slurch of Glendale

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

Houswn Quaker gives First English a reading far

beyond anything considered or decided by this Court.

The Court of Appeal decision on this issue was correctly

decided and is entirely consistent with both First English

and well settled California law.

First English overruled the California Supreme Court’s

decision in Agins v. City of Tiburon, 24 Cal.3d 266

(1979), aff'd on other grounds, 447 U.S. 255 (1980), that

a landowner may not maintain an inverse condemnation

suit based on a "regulatory" taking and that his sole

remedy in such an instance is to invalidate the regulatory

action. The issue in First English concerned whether

"the Fifth Amendment, as made applicable to the states

through the Fourteenth Amendment, . . . require(s]

ie as a remedy for ‘temporary’ _t egulatory

which are ultimate]

invalidated by the courts.” (482 U.S. at 310; emphasis

added.) The Court held (at 321-322):

. that where the government’s activities have

already worked a taking of 1l] use of property, no

subsequent action by the government can relieve it of

the duty to provide compensation for the period

during which the taking was effective...

", . . [W]e hold that invalidation of the

ordinance without payment of fair value for the use of

the property during this period of time would be a

constitutionally insufficient remedy.” (Emphasis

added.)

20

First English establishes that a landowner indeed has a

remedy in damages for a “temporary” taking -- by

definition, a taking for a distinct period which terminates

with a determination of invalidity. However, in so

deciding, the Court neither addressed nor limited state

court procedures for testing the validity of an

adjudicatory land use decision in the first instance.

Neither did it address the res judicata effect of a final

adjudicatory administrative decision as to which an

aggrieved party has elected not to seek judicial review.

The latter, in particular, controlled the decision of the

Court of Appeal in this case.

Quite clearly, an essential predicate to the interim

damage remedy is a determination that the agency’s

decision is invalid such that the presumption of validity

which ordinarily attaches to it is overcome and the

“period” of the taking is determined. In California,

administrative mandamus provides the vehicle for that

determination in the case of adjudicatory decisions of

administration agencies.= 4/ Moreover, it fosters the early

4. California Code of Civil Procedure section 1094.5

provides for judicial review of the validity of a final administrative

order by petition for writ of mandate to the superior court.

Subdivision (b) of that provision states: "The inquiry in such a

case shall extend to the questions whether the respondent has

proceeded without, or in excess of jurisdiction; whether there was

a fair trial; and whether there was any prejudicial abuse of

discretion. Abuse of discretion is established if the respondent

has not proceeded in the manner required by law, the order or

decision is not supported by the findings, or the findings are not

supported by the evidence."

21

disposition of interim damage claims.2/ Indeed, the

expeditious mandamus procedure benefits both the

landowner and government by ensuring that the validity

of its adjudicatory land use decisions does not remain in

limbo for years. Further, government is not forced to

set aside substantial contingency reserves to cover the

extended periods of time that might be associated with

a potential "temporary" taking, absent such a reasonably

short statute of limitations.‘

Quaker confuses the notion of an "interim" regulatory

taking with a permanent taking, where, as Quaker puts

it, a government act may be valid and yet still require an

award of just compensation. See, eg., Hurley v. Kincaid

285 U.S. 95 (1931). In First English, however, this Court

drew a clear distinction between the two remedies and

stated that a "landowner has no right under the Just

Compensation clause to insist that a ‘temporary’ taking

me we ee

5. Statutes of limitation governing administrative mandamus

matters are ordinarily quite brief (See, eg., Cal. Code Civ. Proc., §

1094.6(b) (90 days as to local government decisions); Cal. Pub.

Resources Code, § 30801 (60 days as to Coastal Commission

decisions)), and are usually treated as law and motion type

matters providing for their prompt resolution. (Eg., Law

Departments Policy Manual, Los Angeles Sup. Ct., Rules 421-

436.)

6. On this issue, the California Court of Appeal in

California Coastal Comm’n v. Superior Court (Ham), 210

Cal. App.3d 1488, 1496 (1989), aptly pointed out that "a property

owner could delay nearly five years until the statute of limitations

for an inverse condemnation action had almost expired, simply

allowing his damages to accrue in the interim. In given cases and

certainly in the aggregate, the financial burden on the state could

be overwhelming."

22

be deemed a permanent taking." First English, 482 U.S.

at 317. That is the prerogative of government once a

court has determined the subject regulation is "invalid."

Id. at 321. |

First_ English involved an ordinance, the facial

constitutionality of which was challenged on Fifth

Amendment taking grounds. The Court did not consider

the res judicata effect of a failure to challenge the

validity of an adjudicatory action. This is equally true of

the state court cases cited by Quaker; none involved

adjudicatory action. In this case, the challenge placed is |

to the proceedings of an administrative agency which are__- |

distinctly adjudicatory, or "quasi-judicial," in nature.

Patterson v. Central Coast Etc. Conservation Comm’n, 58

Cal.App.3d 833, 841 (1976); Natural Resources Defense

Council, Inc. v. California Coastal Zone Conservation

Comm’n, 57 Cal.App.3d 76, 83 (1976). Adjudicatory |

decisions made in this setting are entitled to a settled

“presumption of regularity and legality of official action"

(Cal. Evid. Code, § 664; DeLuca v. Board of Supervisors,

134 Cal.App.2d 606, 610 (1955)), and that presumption

“is conclusive in the absence of contrary proof." Romero

v. County of Santa Clara, 3 Cal.App.3d 700, 705 (1970).

Indeed, under California law, a failure to seek judicial

review of an adjudicatory administrative decision,

including those made by the Commission, forecloses, on

principles of res judicata, a party from later challenging

the merits of that determination in a collateral

proceeding. Monroe v. Trustees of the California State

Colleges, 6 Cal.3d 399, 405-406 (1971); Stockton v. Dept.

of Employment, 25 Cal.2d 264, 267-268 (1944); California

Coastal Comm’n v. Superior Court (Ham), 210

Cal.App.3d 1488, 1496-1500 (1989); Knickerbocker v.

———

————

TT

23

City_of Stockton, 199 Cal.App.3d 235, 243-244 (1988).

There is nothing novel in that rule. It is well recognized

in the decisions of this Court. University of Tennessee

v. Elliott, 478 U.S. 788, 796-799 (1986); United States v.

Utah Construction & Mining Co., 384 U.S. 394, 422

(1966).

The landowner who follows the statutory mandate

procedure and timely challenges an adjudicatory land use

decision preserves his right under the Fifth Amendment

to the just compensation remedy if the court invalidates

that decision and concludes it has worked an "interim"

taking of property. His remedy, as indicated by the

Court of Appeal, is to file "an action for administrative

mandamus before, or in conjunction with, its claim for

inverse condemnation.’ Pet. at A-22. If, however, he

fails or elects not to pursue such a challenge, then the

agency’s land use decision is res judicata on any later

collateral claim, including one for inverse

condemnation.*/

7. For example, in this case the trial court sustained

respondents’ demurrers to several causes of action in the

complaint seeking interim damages arising from the Commission’s

decision conditionally approving Quaker’s Mulholland property.

Since Quaker had timely challenged that adjudicatory decision in

a separately filed suit in administrative mandamus, the court

permitted Quaker to simply add its damage causes of action by

way of amendment to that suit. Jt. App. #5.

8. The citation by amicus Griffin Homes, Inc., to this

Court’s recent decision in Presault v. LC.C..__U.S.__, 58

U.S.L.W. 4193 (1990), is well off the mark. Presault did not

involve an attack on adjudicatory action, a claim for interim

damages based on an asserted "temporary taking," or application

of well-established principles of res judicata. It concerned a

24

In this case, the best that can be said about Quaker is

that it simply sat on its rights. Nothing prevented

Quaker from timely challenging the conditions placed on

its coastal permit approval, and thus preserving its ability

to secure interim damages in the event that decision was

invalidated on taking grounds. Instead, as to its "Piuma"

permit, Quaker accepted its permit and the benefits

afforded thereby and complied with the conditions of

approval, and gave absolutely no indication to

government until over four years after the Commission’s

decision that it was dissatisfied with the decision or the

conditions imposed. Since Quaker simply bypassed the

challenge to the facial constitutionality of a provision of the so-

called "rails-to-trails" statute. The Court reaffirmed the long-

standing rule that "taking claims against the Federal Government

are premature until the property owner has availed itself of the

process provided in the Tucker Act." Id. at 4196. Under the

Tucker Act, the Court pointed out that "[ijf there is a taking,” it

is "within the jurisdiction of the [Claims Court] to hear and

determine." Id. Since the petitioners in Presault failed to make

use of the available Tucker Act remedy, the Court found their

taking claim to be premature. Id. at 4197. It would require a

remarkable extension to read the case, as Griffin Homes does, to

state that, as to federal liability, one must seek just compensation

first in the Court of Claims, and then later a determination of

invalidity. The case merely holds that as a matter of federal

procedure, a compensable taking claim must be pursued in the

Claims Court, and not, as there, in the Court of Appeal on

appeal from a decision of the ICC.

California has no counterpart to the Tucker Act. "Temporary

taking” claims are heard and determined in the superior court. In

the case of adjudicatory administrative action, interim damages

are properly pursued by filing a claim for inverse condemnation

in conjunction with, or after, an action for administrative

mandamus.

25

mandate remedy, the Court of Appeal correctly

concluded that, apart from waiver, Quaker is foreclosed,

under well established state court procedures and

principles of res judicata, from belatedly attempting to

collaterally attack the Commission’s decision through

damage causes of action.

CONCLUSION

For these reasons, the petition for writ of certiorari

should be denied.

DATED: March 16, 1990.

Respectfully submitted,

JOHN K. VAN DE KAMP

Attorney General

of the State of California

N. GREGORY TAYLOR

Assistant Attorney General

ANTHONY M. SUMMERS

DENNIS M. EAGAN

Supervising Deputy Attorneys General

*STEVEN H. KAUFMANN

Deputy Attorney General

Attorneys for Respondents

State of California and

California Coastal Commission

*Counsel of Record

PROOF OF SERVICE BY MAIL

STATE OF CALIFORNIA =“

COUNTY OF LOS ANGELES os

I am a citizen of the United States and a resident of or

employed in the City of Los Angeles, County of Los

Angeles; I am over the age of 18 years and not a party to

the within action; my business address is 1706 Maple

Avenue, Los Angeles, California 90015.

On March 19, 1990, I served the within Respondents’

Brief in Opposition in re: “Rosseo Holdings Ine. vs. State

of California, California Coastal Commission” in the

United States Supreme Court, October Term, 1989, No.

89-1314, on all parties interested in said action, by plac-

ing three true copies thereof enclosed in a sealed envel-

ope, with postage thereon fully prepaid, in the United

States Post Office mail box at Los Angeles, California,

addressed as follows:

Joseph M. Gughemetti

Gughemetti & Spangenberg

Attorneys at Law

800 Airport Boulevard,

Suite 410

Burlingame, California 94010

Charles Moore

Deputy County Counsel

County of Los Angeles

648 Hall of Administration

Los Angeles, California 90012

G. Greg Aftergood, Esq.

15915 Ventura Boulevard

Penthouse 1

Encino, California 91436

Ronald A. Zumbrun

Edward J. Connor, Jr.

John M. Groen

Pacific Legal Foundation

2700 Gateway Oaks Drive,

Suite 200

Sacramento, California 95833

Michael M. Berger

Fadem, Berger & Norton

A Professional Corporation

P.O. Box 250050

Los Angeles, California 90025

All Parties required to be servec. have been served.

I declare under penalty of perjury that the foregoing is

true and correct. Executed on March 19, 1990, at Los

Angeles, California.

Ce Le Wresheria 2

CE CE MEDINA