Amicus Curiae Brief — Wong v. Carson City Council

“) ORIGINAL

No. 95-241

suoreme Court, U.S.

In the FYt £ D

Supreme Court of the United} Statés? 8% 1995

October Term, 1995

CLERK

x2

DARRYL WONG, WILLIE WONG,

and DELPHINE WONG,

Petitioners,

Vv.

CITY COUNCIL OF THE CITY

OF CARSON and PLANNING

COMMISSION OF THE CITY OF CARSON,

Respondents.

>

Petition for a Writ of

Certiorari to the California Court

of Appeal for the Second Appellate District

,%

4

BRIEF AMICUS CURIAE OF

PACIFIC LEGAL FOUNDATION IN

SUPPORT OF PETITION FOR CERTIORARI

FILED BY PETITIONERS DARRYL WONG, ET AL

+

JAMES S. BURLING

* R. S. RADFORD

DANIEL T. FITZPATRICK

*Counsel of Record

Pacific Legal Foundation

2151 Riv

Yelateall pera ep IVED

Pacife LigalfPoundenfse > — g 1995

OFFICE Ui ThE CLERK

UuRi. U.S.

x

QUESTIONS PRESENTED FOR REVIEW

1. Is the City of Carson’s Administrative Resolu-

tion 91-014, which conditions the City of Carson’s issuance

of a permit to terminate month-to-month tenancies and close

the Avalon-Carson Mobile Home Park on the owners’

payment of more than $1.4 million dollars to park tenants for

mobile home coaches, moving expenses, dislocation fees, and

stipends for low-income seniors and disabled tenants, a

regulatory or physical taking, or both, under the Fifth

Amendment of the United States Constitution?

2. Does the City of Carson’s Administrative

Resolution 91-014, which functionally requires the park

owner to refund to tenants all of the profits the park owner

has made, violate substantive due process in that it

unreasonably deprives park owners of their "fair return" to

which they are entitled under Carson’s Rent Control

Ordinance?

|

oi.

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIOS 65-6. CA iv

INTER. CF BOGS. o:c's 3:5 8b ee eee eee l

CPTI. DAPI sais cles 640s ba ee ee 4

STATERters OF Tee CASS 66 ccc ence eee eee ess 4

AIUUIOGIT «0.06 0a) bene 38 ae 654 6

I. THIS CASE PRESENTS AN

OPPORTUNITY FOR THIS COURT

TO CLARIFY THE PROPER ANALYSIS

FOR DETERMINING A COMPENSABLE

TAKING AND TO RESOLVE THE

PRESENT CONFLICT AMONG

Vea RUMSE 805-7 e eR CER ee eer 6

A. A Great Deal of Confusion Has

Arisen Among the State and Federal

Courts With Respect to the Proper

Analysis for Determining

=o Comeeee Sa a 6 Soo 0 Kae eee 7

B. The State Courts of California

Have Consistently Refused to

Apply the Heightened Standards of

Review Set Forth by This Court

in Nollan v. California Coastal

Commission and Dolan v.

Ay OF TOE 66s eS howe a eree nea 12

- iti -

Page

of A Conflict Between the New York

and California Courts Exists

Because New York Follows This

Court’s Nollan and Dolan

Decisions While California Does

0 a a re 14

II. THE APPELLATE COURT FAILED TO

APPLY HEIGHTENED SCRUTINY

AND, HAD IT DONE SO, WOULD

HAVE FOUND A COMPENSABLE

TAKING UNDER EITHER PRONG

ei. gies ut Few wit ee os ee ere 15

A. The Lower Court Did Not

Apply Heightened Scrutiny

EE a 15

B. The Conversion Ordinance

Fails to Substantially

Advance a Legitimate State

eae ae eee eae 16

C. Resolution No. 91-014

Deprives the Wongs of

Economically Viable Use

ee ee ee ee ee 18

D. The City’s Park Closure

Conditions Unfairly Require

the Wongs to Bear a General

ee ee a ee ee 19

I a 20

-iv-

TABLE OF AUTHORITIES CITED

Agins v. City of Tiburon,

Cl a BE CE oe eee Rae ee

Armstrong v. United States,

Se I 6 ono 6.46 Vices wheaes

Blue Jeans Equities West v.

City and County of San Francisco,

> Cal. Amp. 40 UGS CISFE) «cc veces

City of Pompano Beach v. Yardarm

Restaurant, 641 So.2d 1377

is. TE Es BO ee ee Sern ts

City and County of San Francisco v.

Golden Gate Heights Investments,

14 Cal. App. 4th 1203 (1993) ............

Commercial Builders v. City of

Sacramento, 941 F.2d 872 (9th Cir.

1991), cert denied, 118 L. Ed.

ye ee ere a er ee rea oe

Del Oro Hills v. City of

Oceanside, 31 Cal. App. 4th 1060

| Beane eee aa ene eas ee

Dolan v. City of Tigard,

SiIZUS. , OL.

a. A ee ee ce adda eee

Page

. 2-3,6-9,16

Page

Ehrlich v. City of Culver City,

15 Cal. App. 4th 1206 (1993),

cert. granted and judgment

vacated, 129 L. Ed. 2d 854

ES a ee ee eer ee eee 2 en eo 12

Eide v. Sarasota County,

COR F.26 716 (11 Cer, 1990). wc ccc ee teneves 9

Esposito v. South Carolina

Coastal Council, 939 F.2d 165

SE Pe eer ee ere ere ee ee 10

First English Evangelical

Lutheran Church of

Glendale v. County of

Los Angeles, 482 U.S.

OD © aa og Sw asis 4s 90.40.0150 8 Se ee Et 2,13

Gardner v. New Jersey Pinelands

Commission, 593 A.2d 251

RGA A Oe eee ee oer eee ee Ce 8

Gerijo, Inc. v. City of Fairfield,

638 N.E.2d 533 (Ohio 1994)... ce cc tees 9,11

Halverson v. Skagit County,

42 F.3d 1257 (Sth Cir. 1995) ... 1... cece cere eens 10

Hodel v. Virginia Surface Mining

and Reclamation Association, Inc.,

PRS mm eee ane e ee oa 2 18

Kelly v. Tahoe Regional Planning

Agency, 855 P.2d 1027

ie, COD. bowed OR 6 Wed on 60 eb ea 4 REA 8

- Vi -

Keystone Bituminous Coal

Association v. DeBenedictis,

480 U.S. 470 (1987) ........

Kirby Forest Industries, Inc. v.

United States, 467 U.S. 1 (1984)

Lucas v. South Carolina

Coastal Council,

505 U.S. __, 120 L. Ed.

r i § i): re

Manocherian v. Lenox Hill

Hospital, 643 N.E.2d 479

4 SS. | er a re

McAndrews v. Fleet Bank of

Massachusetts, 989 F.2d 13

te

McDougal v. County of Imperial,

942 F.2d 668 (9th Cir. 1991) ..

Miller v. Columbia River Gorge

Commission, 848 P.2d 629

(Or. Ct. App. 1993) ........

Moore y. City of Costa Mesa,

886 F.2d 260 (1989) ........

Nollan y. California Coastal

Commission, 483 U.S. 825

(1987) ............02 0 ee

Page

- Vil -

Page

Parking Association of Georgia,

Inc. v. City of Atlanta,

Georgia, U.S. 132L.

Ed. 2d 273 (May 30, 1995) .......-- ee eee eeee 3,7,13

Penn Central Transportation Co. v.

New York City, 438 U.S. 104

SEE a vea ke Che eee ea Ke eRe ree ROA eee es 10

Pennsylvania Coal Co. v. Mahon,

, fk a 2.» ree eee ee 20

Reahard v. Lee County,

968 F.2d 1131 (11th Cir. 1992) ..... aaa 1]

Saad v. City of Berkeley, 24 Cal.

App. 4th 1206 (1994) .. 0... eee eee ee eee 12

Schultz v. City of Grants Pass,

884 P.2d 569 (Or. Ct. App.

MD kets 668-6 owes

Seawall Associates v. City of

New York, 542 N.E.2d 1059

i eee ere eee ee ee 2 7,14

Southview Associates, Ltd. v.

Bongartz, 980 F.2d 84

ie ae Se eee ee ea ke 10

Tahoe Keys Property Owners’

Association v. State Water

Resources Control Board,

23 Cal. App. 4th 1459 (1994) ........--- eee eee 12

United States v. General Motors

Corp., 323 U.S. 373 (1945) .....---- eee ee eres: 18

- Vill -

Page

Westwinds Mobile Home Park v.

Mobilehome Park Rental Review

Board, 30 Cal. App. 4th 84 (1994) ............... 13

Whitehead Oil Co. v. City of

Lincoln, 515 N.W. 2d 401

ee a et oes so be 6 abe 8-5-0 S88 OO 8

Woodbury Place Partners v.

City of Woodbury, 492 N.W.2d

ee ee 10

Yee v. City of Escondido,

503 U.S. _, 118 L. Ed. 2d

SUD So Shel are a a old ao 5b ew + 0.418. 8 » 084 2,12

Statutes

Ce ee ee Oe Sawa scer ees eee eeuet 4

EE ideas dog aed gos e oo 6 be 8 ve 8 0 68 84 19

Gov't Code § 65863.7-65863.8 ..........005 ee eeee 4

IG ae oaks eg bb wee 66-6 s eee seein ete ae 17

a ee ee rk ee eee eee oe ye a 5

Honlth & Safety § 1G200-1S70O ww ccc rece cc cens 4

Regulations

y RS ee Be or rear ar 6

a

No. 95-241

-

In the

Supreme Court of the United States

October Term, 1995

+

DARRYL WONG, WILLIE WONG,

and DELPHINE WONG,

Petitioners,

v.

CITY COUNCIL OF THE CITY

OF CARSON and PLANNING

COMMISSION OF THE CITY OF CARSON,

Respondents.

+

Petition for a Writ of

Certiorari to the California Court

of Appeal for the Second Appellate District

+

BRIEF AMICUS CURIAE OF

PACIFIC LEGAL FOUNDATION IN

SUPPORT OF PETITION FOR CERTIORARI

FILED BY PETITIONERS DARRYL WONG, ET AL

+

INTEREST OF AMICUS CURIAE

PLF is a nonprofit, tax-exempt corporation organized

under the laws of the State of California for the purpose of

litigating in cases affecting the public interest. PLF has over

20,000 contributors and supporters located throughout the

“bi

Se

country and maintains its principal office in Sacramento,

California.

PLF has participated in numerous cases involving issues

arising under the Takings and Due Process Clauses of the

Fifth and Fourteenth Amendments to the United States

Constitution. Its attorneys were counsel of record in the

landmark United States Supreme Court case Nollan v.

California Coastal Commission, 483 U.S. 825 (1987), and

PLF participated as amicus curiae in Lucas v. South Carolina

Coastal Council, 50S U.S. __, 120 L. Ed. 2d 798 (1992);

Yee v. City of Escondido, 503 U.S. __, 118 L. Ed. 2d 153

(1992); Keystone Bituminous Coal _ Association v.

DeBenedictis, 480 U.S. 470 (1987); and First English

Evangelical Lutheran Church of Glendaie v. County of

Los Angeles, 482 U.S. 304 (1987). Because of its public

policy perspective and experience, Pacific Legal Foundation

believes it can provide additional insight with respect to the

issues before this Court in the present case. Pursuant to

Rule 37.3, written permission from all parties to file this

brief has been lodged with the clerk of the Court.

Given PLF’s extensive involvement in cases concerning

the Takings and Due Process Clauses of the Fifth and

Fourteenth Amendments, PLF is particularly interested in

ensuring that the bedrock principles of this Court are not

eroded by implausible interpretations of takings case law by

state or federal circuit courts. In Nollan v. California

Coastal Commission, 483 U.S. 825, this Court reaffirmed the

bright-line, two-part test set forth in Agins v. City of Tiburon,

447 U.S. 255, 260 (1980), that land use regulations will

effect a taking if they fail to "‘substantially advance

legitimate state interests,’" or if they “‘den[y] an owner

economically viable use’" of property. Nollan, 483 U.S.

at 834 (quoting Agins v. City of Tiburon, 447 U.S. at 260

(brackets in original)). The two prongs of the test are stated

in the disjunctive; either is sufficient to establish a regulatory

taking without further analysis. See, e.g., Nollan v.

me

California Coastal Commission, 483 U.S. 825 (striking down

a regulatory exaction under a first-prong Agins challenge);

Lucas v. South Carolina Coastal Council, 120 L. Ed. 2d 798

(striking down a regulation under a second-prong Agins

challenge). Moreover, this Court has clearly established that

land use regulations challenged under the Takings Clause

must be subjected to a heightened standard of judicial review.

Nollan, 483 U.S. at 836 n.3.

Members of this Court have expressed dismay about the

difficulties which lower courts routinely encounter in

attempting “to make sense of th[{e] tension in [this Court’s

takings] caselaw." Parking Association of Georgia, Inc. v.

City of Atlanta, Georgia, __ U.S. ___, 132 L. Ed. 2d 273

(May 30, 1995), denial of petition for writ of certiorari,

Thomas, J. and O’Connor, J., dissenting. The case at bar

clearly illustrates the struggles of the lower courts in dealing

with “the confused nature of some of [this Court’s] takings

case law....". Id. The decision below upheld an exorbitant

financial exaction by the City of Carson that violated both

prongs of Agins. The exaction failed to substantially advance

a legitimate state interest and deprived petitioners of an

economically viable use of their land. In considering

whether the exaction was an unconstitutional taking, the court

below merely paid lip service to Nollan and declined to

engage in even the most cursory analysis.

"{T]he fact-specific nature of takings claims has led

[this Court] to grant certiorari in takings cases without the

existence of a conflict." Parking Association of Georgia,

132 L. Ed. 2d 274. Amicus Pacific Legal Foundation will

illustrate that there is a significant conflict between the

California courts and New York courts with respect to the

proper application of Nollan and Dolan. This case presents

this Court with an opportunity to clarify and expound on the

regulatory takings doctrine of Nollan and Dolan and to

resolve the current conflict between the state courts.

So

a

OPINION BELOW

The dismissal of the case by the California Supreme

Court is attached to petitioner’s Petition for Writ of

Certiorari, filed August 9, 1995. The unpublished opinion

of the California Court of Appeal is attached to petitioners’

Petition for Writ of Certiorari. The Court of Appeal held,

inter alia, that the City of Carson (City) may require

petitioners, who paid $1.7 million for a mobile home park,

to pay more than $1.4 million to the resident mobile home

owners as a condition of closing this mobile home park. The

appellate court recognized the applicability of Nollan v.

California Coastal Commission, yet found that a condition

which virtually extinguished petitioners’ investment was not

an unconstitutional taking.

.

STATEMENT OF THE CASE

Darryl, Willie, and Delphine Wong are owners of the

Avalon Carson Mobile Home Park in the City of Carson.

They acquired the property in June, 1979, and since that time

have operated it as a mobile home park. The park contains

172 spaces, most of which are leased to mobile home owners

for a monthly rental fee. Administrative Record (AR) 106,

6535.

Mobile home parks in California are a heavily regulated

industry. Comprehensive statewide regulations include the

Mobilehome Residency Law (Civ. Code § 798, et seq.) and

the Mobilehome Parks Act (Health and Safety Code

§§ 18200 to 18700). In addition, park owners seeking to

convert their property to another use must comply with

Government Code §§ 65863.7 to 65863.8 and other

provisions. Local governments are authorized to require

park owners to mitigate the impact of park closures on the

7

ability of displaced residents to find replacement housing,

but such mitigation cannot exceed the reasonable costs of

relocation. Gov’t Code § 65863.7(e).

Shortly after the Wongs purchased their mobile home

park, the City added to this existing matrix of regulation by

adopting a mobile home rent control ordinance. The

purposes of the park closure conditions promulgated by this

ordinance include “protect[ing] the investment of mobile

home coach owners, while allowing park owners to change

the use of the[ir] property without incurring unreasonable

burdens." Resolution No. 91-014, §4(D), Petition for Writ

of Certiorari Appendix (App.) 32. (emphasis added.)

In March, 1988, the Wongs applied for permission to

close the Avalon Carson Mobile Home Park. After a lengthy

series of hearings and related procedures, the City agreed to

the proposed closure only upon the condition that the Wongs

comply with "mitigation" measures set forth in a document

entitled Resolution No. 91-014. App. 23. This resolution,

adopted by the City on March 19, 1991, requires the Wongs

to make cash payments totaling $1,430,295 to mobile home

coach owners residing in their park, almost equal to the $1.7

million purchase price of the park paid by the Wongs.

AR 7, 161. The City’s price for allowing the Wongs to go

out of business exceeds all the profit the Wongs have earned

on space rentals during their entire 16-year ownership of the

park. Petition for Writ of Certiorari at 20.

The Wongs challenged the City’s park closure

conditions on the grounds that, inter alia, they effected a

taking of the Wongs’ property without just compensation,

in violation of the Takings Clause of the Fifth Amendment.

The trial court denied the Wongs’ petition for a writ of

administrative mandamus and dismissed their complaint for

damages against the City. The Court of Appeal affirmed in

an unpublished opinion. The California Supreme Court

granted review on May 12, 1994. On May 11, 1995, the

<8s

California Supreme Court dismissed the case without

decision, thereby invoking the jurisdiction of this Court,

pursuant to 28 U.S.C. § 1257(a).

This case screams for review by this Court. The

Wongs invested a substantial portion of their personal

resources in this mobile home park and have struggled for

16 years under the City’s onerous rent controls to try to

make the operation a reasonable economic venture. Only

after many years of effort did they conclude that further

struggles would be fruitless. The lower court decision forces

the Wongs to distribute the monetary value of their property

among their tenants as the price of going out of business.

Aside from the patent inequities of this situation, this Court

should also review this case because it offers the unique

opportunity to clarify the proper method for reviewing

takings claims under the bright-line, two-prong test of Agins,

as set forth in Nollan and Dolan.

7

ARGUMENT

I

THIS CASE PRESENTS AN OPPORTUNITY FOR

THIS COURT TO CLARIFY THE PROPER

ANALYSIS FOR DETERMINING A

COMPENSABLE TAKING AND TO RESOLVE

THE PRESENT CONFLICT AMONG THE STATES

The appropriate framework for evaluating regulatory

takings claims was established by this Court in Agins v. City

of Tiburon: “The application of a general zoning law to

particular property effects a taking if the ordinance does not

substantially advance legitimate state interests [citation], or

denies an owner economically viable use of his land

[citation]." 447 U.S. at 260 (emphasis added). This two-

prong approach for establishing a taking, either by a showing

that the regulation does not substantially advance a legitimate

>

state interest ("first-prong Agins challenge") or by showing

a denial of economically viable use of land ("second-prong

Agins challenge"), has been reiterated by this Court in nearly

every regulatory takings case in the last 15 years. Numerous

state decisions and dozens of federal cases have also recited

and relied on the disjunctive Agins test.

Regulatory takings have been found under either prong

of Agins. See, e.g., Nollan v. California Coastal

Commission, 483 U.S. 825 (striking down a regulatory

exaction under a first-prong Agins challenge); Lucas v. South

Carolina Coastal Council, 120 L. Ed. 2d 798 (striking down

a regulation under a second-prong Agins challenge). In the

case at bar, neither prong of the Agins test revealed a

regulatory taking because the Court of Appeal failed to even

apply the test!

A. A Great Deal of Confusion Has Arisen

Among the State and Federal Courts

With Respect to the Proper Analysis

for Determining a Compensable Taking

"The lower courts should not have to struggle to make

sense of th[e] tension in [this Court’s takings] case law."

Parking Association of Georgia, Inc. v. City of Atlanta,

Georgia, 132 L. Ed. 2d 273, denial of petition for writ of

certiorari, Thomas, J. and O’Connor, J., dissenting. Lower

state and federal courts have fallen into conflict and

confusion in their application of Agins to regulatory takings.

At least six different variations of the Agins test have arisen,

leading to unpredictable and arbitrary outcomes of takings

issues, thereby necessitating further guidance from this

Court.

Some courts properly apply the disjunctive Agins test

and recognize that satisfaction of either prong of Agins

suffices to constitute a regulatory taking. Seawall Associates

v. City of New York, 542 N.E.2d 1059 (N.Y. 1989),

exemplifies the line of cases supporting the disjunctive

~

application of the Agins test.' The New York Court of

Appeals struck down a regulation of rental property because

the challenged law did not substantially advance legitimate

state interests and denied plaintiffs economically viable use

of their property. Jd. at 1069. The Court of Appeals held

that, under either prong of the Agins test, the regulation was

invalid and constituted a regulatory taking. Jd. at 1068-69.

Conversely, in the case at bar, the Court of Appeal failed to

apply either prong of the Agins test to the regulation at issue,

instead analogizing to condominium conversion cases which

had upheld relocation assistance conditions. App. 4-5.

Because the appellate court saw “no reason why the result

ought to be different in the context of mobilehomes"

(App. 5), no Agins analysis was done.

Other courts have found a regulatory taking under the

first prong of the Agins test without proceeding to analyze the

second prong. Manocherian v. Lenox Hill Hospital,

643 N.E.2d 479 (N.Y. 1994), represents this line of

disjunctive application cases.”

' See also McDougal v. County of Imperial, 942 F.2d 668, 677

(9th Cir. 1991) (reciting disjunctive Agins test in negative voice);

Kelly v. Tahoe Regional Planning Agency, 855 P.2d 1027, 1033

(Nev. 1993) (reciting disjunctive Agins test); Miller v. Columbia

River Gorge Commission, 848 P.2d 629, 630 and 630 n.1 (Or. Ct.

App. 1993) (acknowledging that taking occurs if either prong of

Agins test is satisfied); Gardner v. New Jersey Pinelands

Commission, 593 A.2d 251, 257 (N.J. 1991) (reciting disjunctive

Agins test in negative voice).

2 See also Schultz v. City of Grants Pass, 884 P.2d 569, 573 (Or.

Ct. App. 1994) (holding that imposed exaction of land was

regulatory taking because exaction did not relate to impact of

plaintiffs’ proposed development); Whitehead Oil Co. v. City of

Lincoln, 515 N.W.2d 401 (Neb. 1994) (holding that arbitrary and

capricious government action did not advance legitimate state

interest and thus was regulatory taking).

icin ial ii ili a ail

= PE

Despite this Court’s clear statements and

demonstrations that the two-part Agins analysis is a

disjunctive test, some courts have applied the two prongs in

the conjunctive. Under this approach, no taking is found

unless the plaintiff has satisfied both prongs. Thus, under

the conjunctive application, one who alleges a regulatory

taking must prove both that the regulation fails to

substantially advance a legitimate state interest and that the

regulation denies the owner economically viable use of her

property. An example of this approach is Del Oro Hills v.

City of Oceanside, 31 Cal. App. 4th 1060 (1995). This

clearly erroneous interpretation of this Court’s regulatory

takings doctrine has also been adopted in other states. See

Gerijo, Inc. v. City of Fairfield, 638 N.E.2d 533 (Ohio 1994)

(applying conjunctive Agins test).

A few courts have analyzed the first prong of the Agins

test as a substantive due process claim. As with the

conjunctive interpretation, however, this method consistently

requires satisfaction of the second prong in order to find a

regulatory taking that merits just compensation. An example

of this approach is Eide v. Sarasata County, 908 F.2d 716

(11th Cir. 1990).

Still other courts have applied both a substantive due

process and a takings analysis. This method permits first

prong Agins claims under either the “arbitrary and capricious

due process” theory or the Fifth Amendment takings theory.

This approach highlights the difference in standards of

review between a due process claim and a takings claim and

demonstrates how applying an exclusive due process theory

to a takings claim permits lower courts to elude Nollan’s

heightened standard of review for takings claims. Avoidance

of the "essential nexus" test set out in Nollan, 483 U.S.

at 837, places the burden of proof for takings claims on

property owners. According to this Court’s decision in

Dolan v. City of Tigard, 512 U.S. __, 129 L. Ed. 2d 304

+. F

(1994), however, the burden of proof for such claims

properly lies with the government. /d. at 320. The

nonexclusive substantive due process analysis was applied in

Southview Associates, Lid. v. Bongartz, 980 F.2d 84 (2d Cir.

1992). See also Halverson v. Skagit County, 42 F.3d 1257,

1261 (9th Cir. 1995) (stating that facts which form basis of

“arbitrary and capricious due process” claim may also form

basis of takings claim). This flawed method may bear the

closest resemblance to the appellate court’s analysis in the

case at bar where the court declined to undertake any type of

takings analysis and simply asserted that a due process attack

is not appropriate "unless the restriction is clearly arbitrary

and unreasonable....". App. 6 (emphasis added).

Other courts apply a “balancing” test, which either

subsumes or completely ignores the two-prong Agins test.

This application effectively analyzes the second prong of the

Agins test under the three-part balancing test set out in Penn

Central Transportation Co. v. New York City, 438 U.S. 104,

124 (1978) (balancing the economic impact of the regulation

on the claimant, its interference with investment-backed

expectations, and the character of the government action).

Courts applying the balancing test either ignore the first

prong of Agins, or they conclude that plaintiff has failed to

satisfy the first prong. See McAndrews v. Fleet Bank of |

Massachusetts, 989 F.2d 13 (ist Cir. 1993); Esposito v. |

South Carolina Coastal Council, 939 F.2d 165, 170-71 |

(4th Cir. 1991) (applying Penn Central balancing test to

analyze second prong of Agins test after determining that

plaintiff has failed to satisfy first prong); Woodbury Place

Partners v. City of Woodbury, 492 N.W.2d 258, 262 (Minn.

Ct. App. 1993) (remanding to District Court to determine

existence of regulatory taking under "economically viable

use” analysis in light of Penn Central balancing test).

Finally, some courts use second prong takings analysis

exclusively, calling the first prong irrelevant. Among cases

ie ee AEM ey

» iti

subscribing to the second prong application, Reahard v. Lee

County, 968 F.2d 1131 (11th Cir. 1992), provides a unique

analysis. See also, Moore v. City of Costa Mesa, 886 F.2d

260, 263 (1989) (restricting takings analysis to second prong

of Agins test despite lower court’s finding that challenged

regulation was invalid but not unconstitutional); City of

Pompano Beach v. Yardarm Restaurant, Inc, 641 So.2d

1377, 1384 (Fla. Dist. Ct. App. 1994) (court finds second

prong argument, based on an alleged invalid exercise of the

police power, insufficient for a takings, noting that the trial

court’s embrace of an Agins’ first prong takings analysis was

simply “an understandable error given that ‘takings’ law is

one of the most confused areas in American jurisprudence. ").

It may be that the Court of Appeal in the case at bar

has created yet another method of analysis, where no type of

takings analysis need even be done because the use of the

property in question (here, a mobile home park) can be

analogized to other uses on other properties (such as

condominium conversions), where no regulatory taking has

been found. App. 4-6.

These various applications of the Agins test breed

varying and unpredictable results, even when applied to the

same fact situation. For example, if the court in Gerijo,

Inc. v. City of Fairfield, 638 N.E.2d 533, had applied a

disjunctive instead of conjunctive analysis, the plaintiff could

likely have established a regulatory taking because the

challenged ordinance failed to advance a legitimate state

interest. Gerijo, 638 N.E.2d at 537. No further analysis

would have been necessary. Further guidance from this

Court regarding a uniform application of the Agins test would

alleviate the unpredictability prevalent in current takings

doctrine.

-12-

B. The State Courts of California

Have Consistently Refused to Apply

the Heightened Standards of Review Set

Forth by This Court in Nollan v. California

Coastal Commission and Dolan v. City of Tigard

Instead of accommodating the mandate of this Court,

the California judiciary responded to Nollan’s requirement

for a heightened standard of review by mischaracterizing the

decision as a physical invasion case which did not apply to

regulatory takings. The most notorious example in this line

of decisions is Blue Jeans Equities West v. City and County

of San Francisco, in which the California Court of Appeal

proclaimed that Nollan applies only to "possessory” takings--

even though no such term appears in the text of Nollan or in

any other decision ever issued by this Court! 3 Cal. App.

4th 164, 169 (1992).

Although the Blue Jeans Equities holding was flatly

preposterous on its face, it has been embraced by a majority

of California’s appellate districts as a means to avoid

applying Nollan’s requirement of heightened scrutiny to

property regulations. See Tahoe Keys Property Owners’

Association v. State Water Resources Control Board, 23 Cal.

App. 4th 1459 (1994); Saad v. City of Berkeley, 24 Cal.

App. 4th 1206 (1994); Ehrlich v. City of Culver City, 15 Cal.

App. 4th 1737 (1993), cert. granted and judgment

vacated, 129 L. Ed. 2d 854 (1994); City and County of

San Francisco v. Golden Gate Heights Investments, 14 Cal.

App. 4th 1203 (1993); see also Commercial Builders v. City

of Sacramento, 941 F.2d 872 (9th Cir. 1991), cert. denied,

118 L. Ed. 2d 593 (1992) (stating that Nollan did not

“chang[e] the level of scrutiny to be applied to regulations

that do not constitute a physical encroachment on land").

Even after this Court’s express citation to Nollan as the

standard applicable to nonphysical takings in Yee v. City of

Escondido, __ U.S. ___, 118 L. Ed. 2d at 167, California

A a cma

a ee A ce

8

courts have persisted in following the erroneous doctrine of

Blue Jeans Equities, interpreting “possessory taking" to

denote what the Supreme Court has always called a physical

taking. See, e.g., Westwinds Mobile Home Park y.

Mobilehome Park Rental Review Board, 30 Cal. App. 4th 84,

90 (1994) (refusing to apply Nollan to a regulatory takings

case and asserting that “Nollan involved a statute which

physically appropriated property"--despite the fact that no

statute of any kind was at issue in Nollan, and no physical

appropriation of property occurred or was alleged by either

party).

The California judiciary’s hostility to the Fifth

Amendment rights of property owners should be no surprise

to this Court. In First English Evangelical Lutheran

Church v. County of Los Angeles, this Court noted that "the

California courts have decided the compensation question

inconsistently with the requirements of the Fifth

Amendment.” 482 U.S. at 311. Similarly, in Nollan y.

California Coastal Commission, this Court noted that its

approach to regulatory takings “is consistent with the

approach taken by every other court ... with the exception of

the California state courts." Jd. at 839.

Since this Court’s decision in Dolan vy. City of Tigard,

129 L. Ed. 2d 304, some members of this Court have

continued to express frustration at the "confused nature of

some of [this Court’s] takings case law" and have observed

that certiorari has been granted "in takings cases without the

existence of a conflict." Parking Association of Georgia,

Inc. v. City of Atlanta, Georgia, 132 L. Ed. 2d 273, denial

of petition for writ of certiorari, Thomas, J. and O’Connor,

J., dissenting. There is no such absence of conflict in this

case because California has consistently misapplied the

takings analysis carefully developed by this Court and, as

shown above, this misapplication has been gaining an

increased acceptance among state and federal circuit courts.

Further, the recalcitrance of the California indiciary has

.

created a direct conflict with New York state courts because

those courts have followed the dictates of Nollan and Dolan.

C. A Conflict Between the New York and

California Courts Exists Because New

York Follows This Court’s Nollan and

Dolan Decisions While California Does Not

In addition to conflicting with the holdings of this

Court, the regulatory takings decisions of the state courts of

California have come into direct conflict with the New York

State Court of Appeals on federal takings issues. This

conflict between the courts of the most populous states of the

Union on federal constitutional questions can only be

resolved by a timely and forceful ruling by this Court.

In contrast to the labored efforts of the California

judiciary to evade this Court’s teaching in Nollan and Dolan,

the highest court of the State of New York has applied the

heightened standards of review set forth in these cases to

strike down overzealous regulation of private property both

facially and as applied. While the California Court of

Appeal was evading Nollan by concocting the “possessory

takings” doctrine of Blue Jeans Equities, the New York State

Court of Appeals promptly acknowledged that

the "close nexus" test ... requires "semi-strict or

heightened judicial scrutiny of regulatory means-

ends relationships” as articulated in Nollan.

Seawall Associates v. City of New York, 542 N.E.2d at 1068.

Five years after Seawall, the New York Court of

Appeals applied this Court’s Dolan decision to find a

regulatory taking arising from a rent control measure in

Manocherian v. Lenox Hill Hospital, 618 N.Y.S.2d 857.

Applying the heightened scrutiny required by this Court, the

New York panel observed that Nollan and Dolan “establish

a constitutional minimum floor of protection which this

Ee

~ ai

Court lacks authority to diminish under the supremacy

clause." 618 N.Y.S.2d at 860 (emphasis added).

) In sharp contrast to the New York court’s regard for

| the Supremacy Clause, California has responded to Dolan by

concocting a new rationale to evade this Court’s regulatory

takings doctrine. The case at bar exemplifies such evasion,

where this Court’s Nollan ruling was cited but not discussed.

Instead, the appellate court summarily concluded that “{oJur

courts have routinely upheld relocation assistance conditions

imposed when an apartment owner seeks permission to

convert to condominiums (citations) and we see no reason

why the result ought to be different in the context of

mobilehomes." App. 4-5. By failing to apply Nollan and

Dolan, the court below has come into direct conflict with the

state courts of New York, as well as this Court.

II

THE APPELLATE COURT FAILED TO APPLY

HEIGHTENED SCRUTINY AND, HAD IT DONE

SO, WOULD HAVE FOUND A COMPENSABLE

TAKING UNDER EITHER PRONG OF AGINS

A. The Lower Court Did Not Apply

Heightened Scrutiny to the Condition

In erroneously upholding the validity of Resolution

No. 91-014, the court below fundamentally misconstrued the

legal question that was before it. By framing the issue as

"whether the relocation assistance conditions imposed by the

City of Carson are reasonable," App. 5, the Court of Appeal

invoked a deferential standard of review which has been

twice repudiated by this Court. Instead of applying

heightened scrutiny to the City’s park closure conditions, the

appellate court merely held that "substantial evidence

supports the trial court’s findings" that the park closure

conditions did not comprise a taking. As this Court well

knows, such a deferential standard is wholly inadequate for

th.

a regulatory takings challenge, and constitutes independent

grounds for reversal.

The conclusory, highly deferential analysis of the court

below directly contravenes the constitutional mandate of this

Court as expressed in Nollan and Dolan. The Court of

Appeal’s failure to apply any semblance of heightened

scrutiny to the City’s park closure conditions was erroneous

in itself, and contributed to a clearly erroneous finding of

constitutionality.

B. The Conversion Ordinance Fails to

Substantially Advance a Legitimate State Interest

Regardless of its economic impact, a land use

restriction will constitute a taking if it fails to “substantially

advance legitimate state interests." Agins v. Tiburon, |

447 U.S. at 262. This rule was first given analytical |

substance in Nollan v. California Coastal Commission, |

483 U.S. 825. |

As set forth in Nollan, a legitimate state interest is one

directly related to a public burden that would be created by |

the proposed land use, which would justify outright denial of :

the property owner’s application. Nollan, 483 U.S. at 835-

37. Substantial advancement means directly mitigating that |

public burden.

In the case at bar, the City is requiring the Wongs to |

pay more than $1.4 million as a condition of closing their

mobile home park. The ostensible purposes of the City’s

park closure conditions are recited in Resolution No. 91-014.

These include "protect[ing]” the investment of mobile home

coach owners, while allowing park owners to "change the

use of the[ir] property without incurring unreasonable

burdens.” The record indicates that the appraised value of

the subject coaches, including all improvements, is $641,859.

Thus, even if the Wongs were responsible for insuring their

residents against any risk of loss, the maximum liability this

could generate is less than 50% of the $1.4 million demanded |

——————

se

by the City. In essence, the City is requiring the Wongs to

pay each of their residents 100% of the market value of their

mobile home coaches--plus an additional $650,000 to ransom

the Wongs’ own property! Such a requirement flies in the

face of the "rough proportionality” test of Dolan.

Rather than engaging in close scrutiny of Resolution

No. 91-014 as required by Nollan and, rather than requiring

the City to carry its burden of proof as required by Dolan,

the Court of Appeal upheld the City’s conditions without

even bothering to examine their impact. The Court of

Appeal’s inquiry began and ended with a recitation of

Government Code § 65863.7. App. 5. It was, however,

"the City’s RIR ordinance that was the issue in the case

(App. 2), not Government Code § 65863.7. Having

determined that state law authorizes relocation fees not

exceeding "reasonable costs of relocation," the appellate

panel immediately proclaimed that Resolution No. 91-014

substantially advances a legitimate state interest. Jd. The

actual impact of the City’s conditions was not even

examined!

This Court’s requirement that challenged regulations

must substantially advance legitimate state interests requires

more than a mere genuflection toward the government’s

police power. In Nollan, this Court looked past the Coastal

Commission’s avowed objective and found that the actual

purpose served by its permit condition was, “quite simply,

the obtaining of an easement to serve some valid govern-

mental purpose, but without payment of compensation."

483 U.S. at 837. Comparable scrutiny of Resolution No. 91-

014 would reveal that its purpose and effect is simply to

transfer a valuable property interest from mobile home park

owners to the coach owners who reside on their land. It

cannot seriously be argued that such a special interest

transfer, extorting assets from one class of property owners

and shifting them to another, complies with the “substantial

- 18 -

advancement" test as that standard has been set forth in

Nollan and Dolan.

C. Resolution No. 91-014 Deprives the Wongs

of Economically Viable Use of Property

Turning to the second prong of the regulatory takings

inquiry, this Court has made it clear that land use restrictions

which deprive owners of economically viable use of their

property will violate the Takings Clause regardless of the

merits of the state interests which they may advance.

Lucas v. South Carolina Coastal Council, 120 L. Ed. 2d

798; Hodel v. Virginia Surface Mining and Reclamation

Association, Inc. , 452 U.S. 264, 295-96 (1981); Kirby Forest

Industries, Inc. v. United States, 467 U.S. 1, 14 (1984). The

Court of Appeal committed yet another fundamental error by

failing to subject Resolution No. 91-014 to this

constitutionally mandated, independently sufficient test for a

regulatory taking.

There can be no doubt that the Wong’s right to occupy

a rent-controlled space on their land in perpetuity is a

protected property interest under the Takings Clause. This

Court has defined the interests subject to constitutional

protection as all those rights inhering in an individual’s

relation to the thing owned, including the rights of

possession, use, and disposal. United States v. General

Motors Corp. , 323 U.S. 373, 378 (1945). Protected property

interests include not just fee interests and leaseholds, but

"every sort of interest the citizen may possess." Jd.

Requiring the Wongs to make cash payments to recover

the value of their own property graphically demonstrates that

the City has deprived the Wongs of any economically viable

use of this valuable property interest. Under the clear

standards laid down by this Court, this deprivation violates

the Takings Clause in and of itself, without regard to the

legitimacy of the governmental purposes which might be

advanced thereby.

MM

D. The City’s Park Closure Conditions Unfairly

Require the Wongs to Bear a General Public Burden

The essential purpose of the Takings Clause is to place

a check on the government’s exercise of the police power at

the expense of individual rights. The ultimate question in

considering whether a regulation has gone too far is whether

it "forc[es] some people alone to bear public burdens which,

in all fairness and justice, should be borne by the public as

a whole." Armstrong v. United States, 364 U.S. 40, 49

(1960).

In addition to examining the nature of the state action

embodied in a regulation and its economic impact on prop-

erty owners, the Supreme Court has assigned primary

significance to this question of basic equity. The issue of

disproportionate impact permeates the Nollan and Dolan

decisions and underlies all of the specific "ad hoc” balancing

tests this Court has applied to the takings question.

In the case at bar, the conditions set forth in Resolution

No. 91-014 are intended to benefit a narrowly circumscribed

class of citizens, namely those persons of low or moderate

income whose principal asset is their mobile home coach.

No one would dispute that the protection of people whose

circumstances make them deserving of "unique protection”

is a worthy objective. See, e.g., Civ. Code § 798.55(a).

But that does not establish that the Wongs and other park

owners may be compelled to bear the full costs of such a

"comprehensive program." Nollan, 483 U.S. at 841.

For 15 years, the Wongs have provided affordable

housing for the residents of the Avalon Carson Mobile Home

Park. During this time, the City has continuously regulated

the Wongs’ property to ensure that their residents have

enjoyed rents below competitive market levels. In addition

to bearing this long burden, distributing the full value of

their own property to the residents of their park, or

ransoming the right to occupy their own land, grossly

- 2.

exceeds the Wongs’ rightful share of the societal burden of

providing affordable housing.

The issue is not whether special subsidies to mobile

home coach owners are worth the costs, but rather who

should pay. "[T]Jhe question at bottom is upon whom the

loss ... should fall." Pennsylvania Coal Co. v. Mahon,

260 U.S. 393, 416 (1922). As Justice Scalia concluded

regarding the governmental objective in Nollan, "[t]he

Commission may well be right that it is a good idea, but that

does not establish that the Nollans (and other coastal

residents) alone can be compelled to contribute to its ;

realization. ... [If California] wants an easement across the

Nollans’ property, it must pay for it." 483 U.S. at 841-42.

This conclusion is directly applicable to the case at bar. If

the City wants to redistribute the value of the Wongs’

property to the owners of mobile home coaches, it is

constitutionally required to pay for it.

CONCLUSION

For the foregoing reasons, amicus Pacific Legal

Foundation respectfully urges this Court to grant certiorari.

DATED: August, 1995.

a —=

Respectfully submitted,

JAMES S. BURLING :

*R. S. RADFORD

DANIEL T. FITZPATRICK

*Counsel of Record

Pacific Legal Foundation

2151 River Plaza Drive,

Suite 305

Sacramento, California 95833

Telephone: (916) 641-8888

Attorneys for Amicus Curiae

Pacific Legal Foundation

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