Opposition Brief — Ehrlich v. City of Culver City

No. 96-238 CLER®

In The

Supreme Court of the United States

October Term, 1995

.

RICHARD K. EHRLICH, as Trustee of the 1985 Ehrlich

Family Trust and as Trustee of the July 28, 1965 Trust,

Petitioner,

CITY OF CULVER CITY, CITY COUNCIL OF THE CITY

OF CULVER CITY, STEVEN GOURLEY, JOZELLE

SMITH, JAMES BOULGARIDES, PAUL A. JACOBS,

Respondents.

+

On Petition For Writ Of Certiorari

To The Supreme Court Of The State Of California

¢

BRIEF IN OPPOSITION

*

NorMan Y. HEerrinc

City Attorney

9770 Culver Boulevard

Culver City, California 90232-0507

(310) 253-5660

Counsel of Record

JosepH W. PANNONE

Kane, BALLMER & BERKMAN

515 South Figueroa Street

Suite 1850

Los Angeles, California 90071-3301

(213) 452-0128

| Additional Counsel Continued On Inside of Front Cover]

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

Additional Counsel for Respondents

BENJAMIN KAUFMAN

FremuicH, KAUFMAN, Fox & SOHAGI

The Wilshire Landmark, Suite 1230

11755 Wilshire Boulevard

Los Angeles, California 90025-1518

(310) 477-7663

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QUESTIONS PRESENTED FOR REVIEW

The questions as framed by the petitioner seriously

misstate the opinion of the California Supreme Court and

the issues before this Court. The questions presented by

the petition are more properly stated as follows:

Whether a claim that the imposition of a

recreation fee constitutes a “taking without a

payment of just compensation” under the Fifth

Amendment presents a “final judgment” within

the meaning of 28 USC § 1257, where the Cali-

fornia Supreme Court has remanded the claim

to the respondent public agency and the lower

courts of the State to determine “what, if any,

recreational fee the evidence might justify.”

Can the issue of whether an ordinance

requiring a developer to commit one percent

(1%) of the value of his proposed improvements

to public art constitutes a “physical taking”

under the Fifth Amendment, which was not

pressed or passed upon in the lower courts, be

raised for the first time in the petition?

If the first question presented is answered in

the affirmative, then may a public agency under

any circumstances condition the grant of a discre-

tionary upzoning of property on a requirement

that a developer pay a fee as a partial mitigation of

the impacts caused by the upzoning?

If the second question presented is

answered in the affirmative, then should this

Court reverse its unanimous decision in Yee v.

City of Escondido, 503 U.S. 519 (1992), and

instead hold that regulation designed to pre-

serve a community’s-aesthetics is a per se taking

under the Fifth Amendment?

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW ........... i

TABLE CP ALI URGLC GG so canteen cok casnnedt buows iv

STATEMENT. OF THB CAGE Ai occ sevasascavireens 1

A. Procedural Posture of This Case............. 2

B. The Allegation of Physical Invasion of Private

Property Has Been Raised for the First Time in

SIU TOR ak nn sn bh ddins Ci08 CON thane eet 4

C. : Se ARE PRO 0s kc ine seseeseneeccenbaneens 4

D. The City Was Not Required to Approve the

ROOMS PORE Ss a ons ian censKsapenneeenees 5

E. Culver City Was Required to Approve a Gen-

eral Plan Amendment before It Could Approve

yh FOWRMOMG PIU «onc insccccccsescasasss 7

REASONS FOR DENYING THE PETITION......... 8

I. THE CASE IS NOT PROPERLY BEFORE THIS

SIAR SOUPRPIRE Sc ce xepesiaccsbesieds 8

A. The Entire Matter Regarding the Recre-

ation Fee is Still Pending in the Trial

ROE io ind dcecccaev inca een nei nees 8

B. Until This Petition, Allegations Regarding

the Art Program Were Never Raised ...... 15

Il. MITIGATION OF THE IMPACTS FROM A

LAND USE CHANGE IS A CONSTITU-

TIONAL EXERCISE OF A CITY’S POLICE

PRPC Cass ua cadpaaee<nedaeehs BAChAew ES Rae? 18

lil. THE ART PROGRAM IS NOT A PER SE PHYSI-

CAL TAKING OF PRIVATE PROPERTY ....... 23

iii

TABLE OF CONTENTS - Continued

Page

IV. NO HEIGHTENED SCRUTINY NEED BE

APPLIED TO CULVER CITY’S ART PRO-

RIAD nods 300 peda sub cad ReE bees Meese uae 24

CREWS RAINS Since oe h sane heUrevaee uke enrhn ss cee 27

iv

TABLE OF AUTHORITIES

Page

FEDERAL CASES

Agins v. City of Tiburon, 447 U.S. 255 (1980)...... 18, 25

City Council v. Taxpayers for Vincent, 466 U.S. 789

(1984), cert. denied __ U.S. ___, 941 F.2d 872

COG CPR. DOOR). ics scccaxtavevantvedaaeweueneaeeans 25

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469

LUDT OR ccecctevsceas sib es10 0440e bes eapeReehs 8, 9, 14

Dolan v. City of Tigard, 512 U.S. __, 114 S.Ct.

CEPPR so ch dsboreeshaknacesd beatae weraskaukeane passim

Ehrlich v. City of Culver City, 512 U.S. __, 114 S.Ct.

AF CESSES obo xc ccd rsh awn ACERS ibe Kis 42540 5Rs passim

Illinois v. Gates, 462 U.S. 213 (1983) .............. 16, 17

Keystone Coal Association v. DeBenedictis, 480 U.S.

rei Bi og Sere en re rr rrr ary rere mere er 19

Loretto v. Teleprompter Manhattan CATV Corp., 458

U.S. G29 CEDGED «ssc ickccsndcacasiay taneeeeeee 23

Lucas v. South Carolina Coastal Council, 505 U.S.

eh AA Ds SOO ATP ME «6 cck chee 21

Metromedia, Inc. v. San Diego, 453 U.S. 490 (1981) .... 26

Nollan v. California Coastal Comm’n, 483 U.S. 825

CADET) oc on diss cevecoedst cure upa beeen Ceeieeuers passim

North Dakota State Board of Pharmacy v. Snyder's

Drug Stores, Inc., 414 U.S. 156 (1973)............4. 11

Penn Central Transp, Co. v. New York City, 438 U.S.

BOG CRRFE) 0 i sn cccsncnccdveawekeheesvaaekn 18, 20, 25

Radio Station WOW, Inc. v. Johnson, 326 U.S. 120

CIDOB) soc cess alae es aGucne dude eee eee ae eae 14

Vv

TABLE OF AUTHORITIES - Continued

Page

Village of Belle Terre v. Boraas, 416 U.S. 1 (1974)...... 19

Village of Euclid v. Ambler Realty Co, 272 U.S. 365

CERRO ss bcc cnc ch nuns ha Cie» eee eben i aseean es 18, 19

Yee v. City of Eacomiide, 503 U.S. 519 (1992) ...... 16, 23

State Cases

Call v. West Jordan, 606 P.2d 217 (Utah 1979)........ 21

College Station v. Turtle Rock Corp., 680 S.W.2d 802

(pp || Danes ere ean nee Prey eee ny pe Maes re 21

Collis v. Bloomington, 310 Minn. 5 (1976)............. 21

Dolan v. City of Tigard, 319 Or. 567 (1994)........... 13

Ehrlich v. City of Culver City, 12 Cal.4th 854 (1996) passim

Jordan v. Menomonee Falls, 28 Wis.2d 608 (1965)...... 21

Lesher Communications, Inc. v. City of Walnut Creek,

fo kG. 8s.) Sere erereere ge eee rer Tree ye 20

Metromedia, Inc. v. City of San Diego, 26 Cal.3d 848

ti | eee rene res mero Pena sapere 26

Unitep States CopEs

y BL ae Sy rr mn r rey (rere a 8, 9, 11, 14, 15

CALIFORNIA STATUTES

Cal. Government Code §§ 66410, et seq............... 7

Cal. Government Code § 66426 ...............+05. 7, 20

Cal. Government Code § 66474 ...............545. 7, 20

vi

TABLE OF AUTHORITIES - Continued

Page

U.S. Supreme Court RuLes

U.S. Supreme Court eke. 258 ocak is ccieee cise saws 1

US. Supreme Coust Ruse 15.2 «woe cw eisiecsec cen sess 1

U.S, Supreme Court Ree FOS occ v ic can tne wwe 1

CALIFORNIA RuLES OF COURT

Cal. Rules of Court Rule 29.2(a) ..................0.. z

City ORDINANCES

Culver City Municipal Code § 33H-31 ............... 5

BRIEF IN OPPOSITION

Respondents, City of Culver City, City Council of the

City of Culver City, Steven Gourley, Jozelle Smith, James

Boulgarides, Paul A. Jacobs, in their official capacities as

members of the city council (hereinafter “Culver City”)

respectfully request this Court deny the Petition of Rich-

ard K. Ehrlich, as Trustee of the 1985 Ehrlich Family Trust

and as Trustee of the July 28, 1965 Trust (hereinafter

“Petitioner”) for a writ of certiorari seeking review of the

opinion of the California Supreme Court in Ehrlich v. City

of Culver City, 12 Cal.4th 854 (1996).1

+

STATEMENT OF THE CASE

Pursuant to Supreme Court Rule 15.1,2 Culver City

presents the following statement of the case to address

the petitioner’s omissions and to supplement the state-

ment of the case presented by the petitioner. Except for a

‘ Pursuant to Supreme Court Rule 35.3, the petitioner

should have substituted the current council members for those

named herein. None of the individuals named herein are still

members of the city council.

* Respondents’ Brief in Opposition is timely pursuant to

Supreme Court Rule 15.2. The petition was placed on this

Honorable ‘“ourt’s docket on August 14, 1996.

3 The petitioner goes to great lengths to persuade this

Court with numerous inappropriate citations to (i) the first

opinion of the Court of Appeal (Appendix G to the petition)

which was voided by that court’s grant of rehearing, (ii) the

second opinion of the Court of Appeal (Appendix E to the

petition) which was vacated by this Honorable Court [Ehrlich v.

City of Culver City, 512 U.S. __, 114 S. Ct. 2731 (1994)] and (iii)

the passing reference in footnote 1 on page 2 of his

petition, petitioner has omitted any statement about the

current procedural posture of the case below. Likewise,

the petitioner has failed to explain that none of the myr-

iad challenges brought to date and addressed by any

court involving this matter has related to whether Culver

City’s art program would constitute a physical intrusion

on the petitioner’s property. Further, the petitioner failed

to accurately describe Culver City’s art program. In addi-

tion, the petitioner never made any attempt to seek mod-

ification of the type and extent of recreational uses

permitted on the subject property. Finally, the petitioner

failed to note that Culver City could not approve the

petitioner's requested residential land-use approvals

unless Culver City also approved an amendment tc its

General Plan.

A. Procedural Posture of This Case.

This matter is still pending in the trial court. The

California Supreme Court has ordered this matter

returned to Culver City for further proceedings.

It is thus appropriate to return the case to the

city to reconsider its valuation of the fee in light

of the principles we have articulated. Remand to

the city was apparently what occurred in Dolan

itself after the case was returned to the Oregon

Supreme Court. (See, Dolan v. City of Tigard []

the third opinion of the Court of Appeal (Appendix C to the

petition) which was voided when the California Supreme Court

granted review. Cal. Rules of Court Rule 29.2(a).

877 P.2d 1201 [1994]) [the case is “remanded to

the City of Tigard for further proceedings.”]

Ehrlich v. City of Culver City, 12 Cal.4th 854, 885 (1996);

Petition Appendix A, p. A44.

On August 15, 1996, pursuant to the trial court's

order of August 6, 1996, Culver City filed a proposed

alternative writ of mandate (the “Proposed Writ”). On

August 22, 1996, the petitioner filed objections to the

Proposed Writ. On August 29, 1996, Culver City filed

responses to those objections. On September 26, 1996, the

trial court has scheduled a continued hearing on peti-

tioner’s request for attorney's fees. Culver City antici-

pates that the trial court will likewise discuss the

Proposed Writ at that time.

Once the matter is finally remanded to Culver City in

accordance with the California Supreme Court's direc-

tion, as noted above, Culver City must then reconsider

the appropriate amount of the mitigation fee. If upon

remand the city council were to decide that the facts do

not support any amount of mitigation fee, then no justi-

ciable controversy would remain in this case. If upon

remand, the city council were to impose some amount of

a fee, then, upon the petitioner’s challenge, that deter-

mination would first be reviewed by the trial court.

Therefore, this Honorable Court should refrain from

reviewing this matter until that remand is complete.

ee

B. The Allegation of Physical Invasion of Private

Property Has Been Raised for the First Time in

the Petition.

For the first time in the seven years this case has been

at issue, the petitioner has alleged that Culver City’s art

program should be considered a physical invasion or

appropriation of real property. The petitioner’s original

pleadings in this matter alleged eleven causes of action,

none of which included claims that a physical invasion

had occurred. Likewise, in three prior appearances before

the California Courts of Appeal, two prior appearances

before the California Supreme Court and one prior

appearance before this Honorable Court, the petitioner

never argued that Culver City’s art program constituted a

physical taking of real property. Nor has any court ruled

upon such issue.

C. The Art Program.

The California Supreme Court accurately described

Culver City’s art in public places program. |

By municipal ordinance, new residential devel- |

opment projects of more than four units, as well

as all commercial, industrial, and public build-

ing projects with a building valuation exceeding

$500,000, are required to provide “art work” (as

defined by the ordinance) for the project in an

amount equal to 1 percent of the total building

valuation, or pay an equal amount in cash to the

city art fund.

Seeeey - ee ore ae

Ehrlich, supra, at p. 862; Petition Appendix p. A7. Under

the ordinance, the art work placed on the site remains the

Pn _

property of the developer. See, Culver City Municipal

Code Section 33H-31(a); Petition Appendix N, p. N9.

Based on the foregoing, if a developer chooses to comply

with the art program by placing art work on the develop-

ment site, that art work does not become a “public art

project”, any more than would a city-imposed specific

design requirement for a certain style of architecture for a

new building. Additionally, it is the developer’s sole

option to determine whether to place art work on the

project site or pay an in lieu fee. To date, no court or

dissenting justice has found any dispute with the original

trial court’s ruling upholding the art program.

D. The City Was Not Required to Approve the

Townhome Project.

The California Supreme Court stated that:

The record before us indicates that private recre-

ational facilities were in scarce supply in the city

and merited preservation and promotion. As the

1988 city staff analysis of [petitioner's] proposed

project noted, “Culver City as a fully-developed

urban city has very little open space in which to

develop parks and related recreational facilities.

By national standards . . . the City is deficient in

park space, tennis courts, swimming facilities,

gymnasiums and the recreational activity cen-

ters needed to maintain and enhance the ‘qual-

ity of life’ in our community.”

Ehrlich, supra, at p. 882; Petition Appendix A, p. A39.

It is clear that some type of recreational use was

needed and could be operated on the subject site.* In fact,

it would have been a use similar to that which the peti-

tioner had requested at the time he originally purchased

the site. Id., at pp. 860-861; Petition Appendix, pp. A3-A4.

Therefore, the petitioner’s investment-backed expecta-

tions would have been met and an economically viable

use would have been permitted for the site, had Culver

City denied petitioner's request to change the land use in

order to build townhomes.

Notwithstanding the foregoing facts, the petitioner

never requested permission to modify the existing land

use restrictions to redevelop the site for more competitive

recreational facilities. In fact, from 1974 through 1988,

except for the subject townhome project, the petitioner

requested permission to develop only one other use on

the site. In 1961, petitioner requested permission to con-

struct an office building. That request was presented to

the Planning Commission. The Planning Commission rec-

ommended denial, and the petitioner abandoned that

application. Id., at p. 861; Petition Appendix A, p. A4.

4 The economic feasibility study prepared by the City

“concluded that [petitioner’s] club had encountered financial

problems through a combination of management problems,

poor maintenance, and a lack of competitive amenities offered

by other clubs. Without extensive capital improvements, the

study concluded the club could not ‘compete financially in

today’s health and fitness market.’ ” Ehrlich, supra, at p. 861;

Petition Appendix A, p. AS.

E. Culver City Was Required to Approve a Gen-

eral Plan Amendment before It Could Approve

the Townhome Project.

One of the land use approvals requested by the peti-

tioner in 1988 (which led to the approval of the town-

homes) was a General Plan amendment. Ehrlich, supra, at

p. 861; Petition Appendix A, p. A4. The General Plan land

use designation for the subject property prior to Culver

City’s actions to approve the townhome project was com-

mercial. Before it could approve the townhome project,

Culver City had to approve a tentative and final tract

map pursuant to the Cal. Subdivision Map Act; Cal. Gov-

ernment Code §§ 66410, et seq., specifically, Section 66426.

Pursuant to the Subdivision Map Act, Culver City could

not approve the subject project unless it could make a

finding the project was consistent with Culver City’s

General Plan. Cal. Government Code § 66474. In order to

make such a finding, Culver City had to redesignate the

petitioner’s property from the General Plan land use

designation of commercial to one permitting residential.

Therefore, notwithstanding the petitioner’s claims to the

contrary (the petition at p. 6), the townhome project was

not consistent with the existing General Plan.

+

REASONS FOR DENYING THE PETITION.

I.

THE CASE IS NOT PROPERLY BEFORE THIS HON-

ORABLE COURT

A. The Entire Matter Regarding the Recreation Fee

Is Still Pending in the Trial Court.

The California Supreme Court has remanded this

matter to the lower courts with directions to remand the

matter to Culver City for reconsideration. That recon-

sideration will include an application of the test required

by the Just Compensation Clause of the Fifth Amendment

as interpreted by this Honorable Court in Dolan v. City of

Tigard, 512 U.S. __, 114 S.Ct. 2309 (1994) and the Califor-

nia Supreme Court in Ehrlich, supra. Until that recon-

sideration is completed and the highest California court

has ruled on the appropriateness of any fee Culver City

may impose, no final judgment will have been entered in

this case and the federal question whether Culver City

has taken private property without payment of just com-

pensation, will remain unresolved. Without a final judg-

ment, this Honorable Court has no jurisdiction to hear

this matter. 28 USC § 1257.

In Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 477

(1975), this Honorable Court reiterated that there are but

a few exceptions which permit this Court to grant cer-

tiorari when a final judgment has not been rendered

below. Cox discusses the four categories of exceptions.

The first category deals with those situations where

the federal issue has been conclusively determined or

that conclusion is preordained. Cox, supra, at 479. As

described previously, that factor is not found in the

instant case. The California Supreme Court has directed

Culver City to reevaluate the mitigation fee based upon

the principles articulated by that court. Ehrlich, supra, at

p. 885; Petition Appendix A, p. A44.

Following remand, the city must determine

whether and to what extent approval of plain-

tiff’s requested land use changes justify the

imposition of a recreation fee as a means of

compensating it for the additional costs of

attracting the development of comparable recre-

ational facilities for its residents. The determina-

tion of such a fee will, of course, require the city

to make specific findings supported by substan-

tial evidence — that is, the city “must make some

effort to quantify its findings” supporting any

fee, beyond “conclusory statements,” although

“{no] precise mathematical calculation is

required” ... . (Dolan, supra, 512 at p. __, 114

S.Ct. at p. 2322.)

Ehrlich, supra, at p. 885; Petition Appendix A, p. A44.

Based on the foregoing, it is clear that the first Cox

exception to 28 USC § 1257 does not apply. The federal

issue in this matter has not been conclusively determined

nor is such conclusion preordained.

The second category of exceptions are those in which

no matter what the outcome of the lower courts, the

federal issues survive and require decision by this Court.

Cox, supra, at p. 480. After remand to Culver City, one of

three things will happen.

First, Culver City may determine that no fee could be

supported, therefore, no fee would be imposed. If that

10

happens, then no further judicial determination as to

whether a regulatory taking has occurred would be nec-

essary and this matter would be moot.

Second, Culver City could impose a fee which the

petitioner may accept. If that occurs, then there would be

no justiciable controversy remaining and this matter

would again be moot.

Finally, Culver City could impose a fee which the

petitioner might resist. If that happens, then the matter

would be returned to the trial court for a determination

of whether the fee constitutes a taking of private property

without payment of just compensation. Based on the fore-

going, there are two possible outcomes after remand

which will not require any review by this Honorable

Court. Therefore, the second Cox exception does not

apply.

The third category of exceptions are those cases

where the federal claim has been finally decided but the

further proceedings on the merits in the state courts will

preclude review of the federal claim no matter what the

outcome of the case. Id. at p. 481. As stated previously,

the federal claim has not been finally decided. However,

even assuming it had been, this exception still does not

apply. As shown above, one of the possible outcomes in

the matter below would permit the petitioner to retain his

rights to seek this Honorable Court’s review. Therefore,

exception category number three does not apply.

Finally, the fourth category of exceptions relates to

those cases where the federal issue has again been finally

resolved but the further state court proceedings could be

precluded by a different outcome on the federal issue. Id.

11

at p. 482. Here the only matter left to be resolved is the

federal question. The petitioner’s claims are based on the

Just Compensation Clause of the Fifth Amendment. The

California Supreme Court's remand directs Culver City to

reconsider its imposition of the recreation fee based on

principles required under the Fifth Amendment as it

relates to claims of a regulatory taking. If the matter is

returned to the trial court after Culver City’s reconsidera-

tion, then that Fifth Amendment claim will likewise be

reviewed and the petitioner will retain his rights to seek

review from this Court after pursuing his case through

the appellate system in California. Therefore, the fourth

category of exception also is inapplicable.

Further support for the inapplicability of the four

recognized exceptions to the jurisdictional requirement of

28 USC § 1257 can be found in the reasons for that

requirement.

The finality requirement of 28 USC § 1257 which

limits our review of state court judgments,

serves several ends: (1) it avoids piecemeal

review by federal courts of state court decisions;

(2) it avoids giving advisory opinions in cases

where there may be no real “case” or “contro-

versy” in the sense of Art III; (3) it limits federal

review of state court determinations of federal

constitutional issues to leave at a minimum fed-

eral intrusion in state affairs.

North Dakota State Board of Pharmacy v. Snyder’s Drug

Stores, Inc., 414 U.S. 156, 159 (1973). In the instant case, all

three reasons for 28 USC § 1257 will be met by denial of

the petition.

12

First, this Honorable Court is being requested to

conduct a piecemeal review of the relevant issues. The

petition asks for review of one-half of the issues involved

in this case. This Court is being asked to review the state

court’s determination regarding the Nollan v. California

Coastal Commission, 483 U.S. 825 (1987) half of the Nollan/

Dolan test before the state courts have reached a final

decision on the Dolan half of the test. This request is

clearly a “piecemeal” approach.

Second, this Court is also being asked to give what

could very well be an advisory decision. As stated earlier,

two of the three possible outcomes which may occur after

the remand of the matter to Culver City will result in “no

real case or controversy”. With both of those outcomes,

no further judicial review of the subject issues will be

required.

Finally, if this Court grants review at this time, then it

would intrude on the pending state proceeding. As noted

before, the California Supreme Court has directed the

trial court to issue an order directing Culver City to

review the amount of the fee. Upon that review, if Culver

City imposes a fee, then the petitioner might continue his

challenge. That challenge would first be brought in the

trial court and then proceed through the state appellate

system. Those state court proceedings should be permit-

ted to continue to final judgment without intrusion from

the federal bench at this time.

In addition to the foregoing policy reasons, this

Court should deny the petition in order to give full effect

to its previous order in this matter. For the petitioner to

prevail on his argument that this matter has reached a

13

final judgment in the courts below, the two-prong test

established by Nollan and Dolan would be meaningless.

The petitioner’s argument would mean that no federal

issue remains in dispute in this matter because the Cali-

fornia Supreme Court has reached a conclusion about

only the first prong of the Nollan/Dolan test. Petitioner’s

argument, in fact, even makes this Court’s remand of the

instant case “for further reconsideration in light of Dolan

[]” ineffectual. Ehrlich v. City of Culver City, 512 U.S. __,

114 S.Ct. 2731 (1994). Clearly, this Court required the

lower courts to reconsider both prongs of the test applica-

ble to this type of regulatory taking claim.

Upon that reconsideration, the California Supreme

Court has determined that the “essential nexus” prong of

the Nollan/Dolan test has been met. Additionally, based on

the facts it had before it, that court determined that

Culver City had not met the “rough proportionality”

prong of Nollan/Dolan. On that latter issue, the matter will

be returned to Culver City for further proceedings, simi-

lar to what happened in Dolan itself after the case was

returned to the Oregon Supreme Court. See, Dolan v. City

of Tigard, 319 Or. 567 (1994).

Given that the second prong of the Nollan/Dolan test

is not yet final either administratively or in the State’s

courts, accepting the petition would constitute a gross

federal interference by this Court with ongoing state

administrative and judicial functions. As the Chief Justice

has written, the “final judgment” requirement serves an

important role in preserving harmonious State-federal

relations.

14

I consider § 1257 finality to be but one of a

number of congressional provisions reflecting

concern that uncontrolled federal judicial inter-

ference with state administrative and judicial

functions would have untoward consequences

for our federal system. [Footnote omitted.]

Cox, supra, at p. 503 (Rehnquist, J., dissenting.)

The final judgment requirement has been a cor-

nerstone of this Court’s jurisprudence since 1789. As

Justice Frankfurter has stated: “This requirement is not

one of those technicalities to be easily scorned. 't is an

important factor in the smooth working of our federal

system.” Radio Station WOW, Inc. v. Johnson, 326 U.S. 120,

124 (1945).

Moreover, even in Cox, the Court explicitly recog-

nized that in cases involving the Fifth Amendment’s tak-

ings clause, such as the case at bar, there is often an initial

interlocutory decision involving a federal question with

another federal question to be decided later by the state

courts. But this Court held in Cox that:

A state judgment is not final unless it covers

both aspects of that integral problem. [Citations

omitted. |

Cox, supra, at 479 n. 6.

In the case at bar, the petitioner has not yet received a

final state judgment on the second aspect of the integral

Fifth Amendment problem, i.e., the amount of fee that

may be constitutionally imposed on his development. As

is discussed above, under several logical scenarios that

issue may never become a “case or controversy.” This is

not the case to warrant further expansion of the “final

15

judgment” requirement and a reversal of long-standing

authorities.

Based on all of the foregoing, at this time this Honor-

able Court does not have jurisdiction to hear this matter.

A substantial federal issue remains to be decided and a

“[flinal judgment or decree [has not been] rendered by

the highest court of a State in which a decision could be

had ....” 28 USC § 1257 (a). That federal issue —- whether

the imposition of a fee meets Fifth Amendment protec-

tions against regulatory takings without just compensa-

tion — is the linchpin to the petitioner’s entire claim in

this matter. Therefore, this Honorable Court is respect-

fully requested to deny the petition.

B. Until This Petition, Allegations Regarding the

Art Program Were Never Raised.

The petitioner has never, in all the years this matter

has been winding its way up and down various levels of

state and federal courts, alleged that Culver City’s art

program constituted a physical invasion of private prop-

erty. Perhaps that is because it is clear that the art pro-

gram does not constitute a physical invasion of property.>

The petitioner’s complaint in the trial court only

alleged that the art program unconstitutionally imposed a

5 In fact, during one of the appearances at the California

Courts of Appeal, the petitioner’s counsel indicated that had it

not been for the recreation fee, the petitioner would not have

challenged the art program. It seems untenable that the

petitioner would have waived his arguments regarding the art

program, if indeed it was an actual physical intrusion on his

property.

16

fee. No allegations were made regarding the placement of

art on the petitioner’s property. This Honorable Court

should not permit the petitioner, at this late date, to

allege the art program somehow constitutes a physical

invasion of private property.

In Illinois v. Gates, 462 U.S. 213 (1983), Chief Justice

Rehnquist reiterated the importance of the rule against

deciding claims “not pressed nor passed upon” in state

court.

[D]ue regard for the appropriate relationship of

this Court to state courts requires us to decline

to consider and decide questions affecting the

validity of state statutes not urged or considered

there.

Id., at p. 219.°

Here there is no doubt that the petitioner’s original

complaint did not raise the claim that a physical taking

® In Yee v. City of Escondido, 503 U.S. 519 (1992), this Court

reiterated the Illinois rule before finding an exception to that

rule because there were ambiguities in the complaint and lower

court decisions as to whether the issue of both physical takings

and regulatory takings had been raised. Notwithstanding the

exception, this Honorable Court ultimately decided that the

issue of regulatory taking had not been properly raised in the

Yees’ petition and, therefore, refused to hear that argument. In

doing so, Justice O’Conner’s opinion stated that: “While the

regulatory taking question is no doubt important, from an

institutional perspective it is not as important as the physical

taking question.” Id. at p. 537. Because of the importance of the

physical taking question, the petitioner should have raised it

below. If permitted to raise it now for the first time, then this

Court would be permitting a party to circumvent having

fundamental issues addressed in the lower courts.

17

had occurred. The petitioner only claimed that the fee

imposed under the art program did not meet constitu-

tional standards. There is also no doubt that no court has

ruled on whether the art program could constitute a

physical invasion. This may be because the petitioner had

originally decided to pay the in lieu fee. However, even

after changing his mind and placing art work on the

townhome site, while still in the California Supreme and

appellate courts and even before this Honorable Court in

Ehrlich v. Culver City, 512 U.S. __, 114 S.Ct. 273 (1994),

the petitioner never raised the issue of a per se physical

taking.

Actually, if a physical taking had been at issue then

this Court’s previous remand would have made no sense.

That remand required the California Court of Appeal to

reconsider its decision in light of this Court's decision in

Dolan. As this Court is well aware, Dolan is not a per se

takings case. Further, no reconsideration would have

been needed if a per se taking had occurred.

In order to preserve the important policy reason,

which gives rise to the “not pressed or passed upon” rule

and which was reiterated by Chief Justice Rehnquist in

lilinois v. Gates, supra, this Court is respectfully requested

to deny the petition.

18

Il.

MITIGATION OF THE IMPACTS FROM A LAND USE

CHANGE IS A CONSTITUTIONAL EXERCISE OF A

CITY’S POLICE POWER

The petitioner attempts to overturn 70 years of prece-

dent with his argument that Culver City cannot mitigate

the impacts resulting from a change of zoning. In Dolan,

this Court noted the long line of cases [starting with the

seminal case of Village of Euclid v. Ambler Realty Co., 272

U.S. 365 (1926)] which provide great deference to govern-

mental land use regulations which do not entail physical

intrusions into private property.

A land use regulation does not effect a taking if

it “substantially advances(s) legitimate state

interests” and does not “den(y) an owner eco-

nomically viable use of his land.” Agins v.

Tiburon, 447 U.S. 255, 260 (1980). [Modifications

original. ]

Do'an, supra, at __, 114 S. Ct. at p. 2316.

A “taking” may more readily be found when the

interference with property can be characterized

as a physical invasion by government, [citation

omitted] than when interference arises from

some public program adjusting the benefits and

burdens of economic life to promote the com-

mon good.

Penn Central Transp. Co. v. New York City, 438 U.S. 104, 124

(1978).

Culver City has clear authority to plan its community

for various uses, including recreational facilities which

the city council has determined are necessary for the

PE ee

19

public health and welfare. This is a fundamental author-

ity every city has under its police power. Village of Euclid,

supra; Keystone Coal Association v. DeBenedictis, 480 U.S.

470 (1987); Village of Belle Terre v. Boraas, 416 U.S. 1 (1974).

Based on the foregoing long-recognized authority, the

City can regulate the use of land within its jurisdiction in

such a way as to provide the community with the oppor-

tunity for the placement of housing in certain areas, com-

mercial and industrial uses in other areas and

recreational facilities on the subject site.

This is true even if, as in this case, the property

owner no longer wants to provide the recreational use

provided by Culver City’s land use approvals. This

authority is no different from the Culver City’s power to

require certain properties to be designated solely for

rental housing for low- and moderate-income residents,

television and movie studios, stadiums, or a regional

shopping mall. A property owner’s options would be (i)

to leave the land fallow and exclude all others from it, (ii)

to use the property for a similar use subject to the

approval of any necessary modification or (iii) to sell the

property to another to be used as authorized or with

modifications, but for the same use. This developer had

the exact same options. It is also clear from the record

that all three of the above options provided an economi-

cally viable use for the subject site and that use was well

within the property owner’s investment-backed expecta-

tions. Ehrlich, supra, 12 Cal.4th at pp. 860-861, 882; Peti-

tion Appendix A, pp. A4-A5, A339.

The foregoing authority is even more applicable in

this case because a General Plan amendment was

20

required. As stated previously, under long-standing Cali-

fornia law, in order for the subject townhome project to

be approved, Culver City had to approve a subdivision

map. Cal. Government Code Section 66426. Culver City

could not approve that map unless it could also find that

the proposed project was consistent with the city’s Gen-

eral Plan. Cal. Government Code Section 66474. To be

able to make that required finding, Culver City had to

amend its General Plan so that the land use designation

for the subject property could be changed from commer-

cial to residential. The importance of the General Plan in

California has been clearly stated by the California

Supreme Court. The General Plan is the “constitution” or

“charter” for future development in California cities.

Lesher Communications, Inc. v. City of Walnut Creek, 52

Cal.3d 531 (1990). Pursuant to the foregoing, Culver City

could not approve the townhome project without a Gen-

eral Plan amendment.

It is also important to note that the commercial land

use designation was the result of a 1974 request from the

petitioner to change the designation so that the recre-

ational facilities could be built. Under that commercial

designation, Culver City could have permitted many dif-

ferent non-residential uses on the site, including recre-

ational uses. In determining whether land-use regulations

effect a compensable taking, the owner’s reasonable

investment-backed expectations are to be taken into

account. Penn Central Transp. Co., supra, at p. 124. In this

case, the petitioner sought and the city has approved an

“upzoning” of his property beyond the petitioner’s rea-

sonable investment-backed expectation in 1974 to have

his property designated for recreational uses. Also, even

21

a regulation which deprives an owner of all economic use

of his property will not effect a compensable taking if

“the proscribed use interests were not part of [the prop-

erty owner's] title to begin with.” Lucas v. South Carolina

Coastal Council, 505 U.S. __., 112 S.Ct. 2886, 2899 (1992).

Under the instant facts, neither test would have been

violated had Culver City refused to approve the General

Plan amendment necessary for the townhome develop-

ment. The recreational use was originally requested by

the petitioner. Petition at p. 4. That recreational land use

was made applicable to the property before the petitioner

became the owner. Petition at p. 5. Based upon the fore-

going law and facts, Culver City was under no obligation

to modify its General Plan to permit the residential pro-

ject.

In addition, providing for recreational facilities

through conditions for dedication of land or payment of

fees has been upheld as a valid governmental exaction.

Even the majority of lower court decisions cited in Dolan

in support of the “rough proportionality” rule validate

the exercise of governmental authority to provide those

public benefits. Jordan v. Menomonee Falls, 28 Wis.2d 608

(1965); College Station v. Turtle Rock Corp., 680 S.W.2d 802

(Tex. 1984); Call v. West Jordan, 606 P.2d 217 (Utah 1979);

and Collis v. Bloomington, 310 Minn. 5 (1976).

Based on the foregoing, Culver City had authority to

regulate land within its jurisdiction in order to provide

for recreational uses. Under that authority, it could have

refused to change the commercial recreational land use

designation on the site or, as it did in this case, required

the payment of a fee to reduce the impacts which would

result from that change in use. With that legitimate and in

22

this case compelling state interest established, the next

inquiry is whether the recreation fee and that state inter-

est have an “essential nexus”.

There is no doubt such a connection exists. The sole

purpose of the recreation fee is to provide for recreational

facilities. In the findings made to support the imposition

of the recreation fee, Culver City expressly determined

the fee would be used for replacement of community

recreational facilities which were provided by previous

land use restrictions applicable to the site. Petition

Appendix M, p. M5; Ehrlich, supra, at p. 862; Petition

Appendix A, p. A6. Therefore, the recreation fee serves

the same legitimate interest served by Culver City’s regu-

lation of land uses, that is, to provide an opportunity for

the creation of community recreational facilities. Based

‘

upon the foregoing, the Nollan “essential nexus” require-

ment has been met.

The petitioner states that if the mitigation fee is per-

mitted to stand, then cities may require payments for

removal of grocery stores, lawyers’ offices and saloons.

Petition at p. 20. This contention is no more than unfet-

tered and unsupported hyperbole.

Any city would be hard pressed to be able to show,

through satisfactory evidence, that loss of one grocery

store, lawyer’s office or saloon could cause a significant

impact on the community. When so many other similar

establishments would likely be readily available, it would

be virtually impossible to require some special mitiga-

tion.

23

Unlike those uses, recreational facilities have been

recognized to serve legitimate public interests and bene-

fits, which can be served through development condi-

tions. Based on the foregoing, this reason for granting

review is clearly spurious.

THE ART PROGRAM IS NOT A PER SE PHYSICAL

TAKING OF PRIVATE PROPERTY

A physical taking occurs only when a governmental

agency physically occupies private property.

Because the Escondido rent control ordinance

does not compel a landowner to suffer the phys-

ical occupation of his property, it does not effect

a per se taking under Loretto.

Yee v. City of Escondido, supra, at p. 539. Prior to that

holding, this Court decided Loretto v. Teleprompter Man-

hattan CATV Corp., 458 U.S. 419, 441 (1982):

Our holding today is very narrow. We affirm the

traditional rule that a permanent physical occu-

pation of property is a taking. In such a case, the

property owner entertains a historically rooted

expectation of compensation, and the character

of the invasion is qualitatively more intrusive

than perhaps any other category of property

regulation. We do not, however, question the

equally substantial authority upholding a State’s

broad authority to impose appropriate restric-

tions upon an owner’s use of his property.

{Emphasis original.]

As stated earlier, pursuant to Culver City’s art pro-

gram a developer may place art work on a subject project

24

site and retain all ownership interest in that art work and

the site. No publicly owned art work would be placed on

the developer’s property nor is any property given to the

city. Alternatively, the developer may pay an in lieu fee. If

that fee is paid, then no art work, either private or public,

is placed on the developer’s property. As discussed

below, the program is more akin to aesthetic use regula-

tions which require certain types of architectural design.

Based on the foregoing, it is clear that no physical occu-

pation of private property is required or even implicated

by the art program.

IV.

NO HEIGHTENED SCRUTINY NEED BE APPLIED TO

CULVER CITY’S ART PROGRAM

Culver City’s art program requires neither a dedica-

tion of land or other property, nor the payment of any

fees. Instead, it provides the owner of a large develop-

ment with at least two options.? An art work can be

incorporated into the development project or an in lieu

fee can be paid to the city which is deposited into a

special fund for the purchase of art work. In the first

instance, the developer retains all right, title and interest

in the art work. In the latter, Culver City could use the

money to purchase art work to be placed on public prop-

erty. The choice is left to the absolute discretion of the

developer. The art requirement was adopted by ordinance

through a legislative process and applies throughout the

7 The program exempts small developers and developers of

affordable or senior housing projects.

25

city. Petition Appendix N, pp. N1-N12. The city made

specific findings regarding the purpose of and reasons for

the art program. Petition Appendix N, pp. N1-N2. The

requirement is similar to other development conditions

related to aesthetics, such as setbacks, open space, land-

scaping, color schemes, materials used and architectural

design, all of which are valid exercises of a city’s police

power. The art program does not require the developer to

give anything to the city.

Nothing in Nollan or Dolan indicates this Court

intended to limit a city’s police power as it relates to

aesthetic regulations. The art program is merely a logical

extension of the city’s authority to regulate in the area of

aesthetics. In numerous cases, this Honorable Court has

stated that the police power extends to community aes-

thetics. Penn Central Transp. Co., supra (requirement to

preserve landmark structures); Agins, supra (condition

requiring scenic views); City Council v. Taxpayers for Vin-

cent, 466 U.S. 789 (1984) (prohibition against posting signs

in the public right of way). The city’s art program is no

more an exaction than are typical requirements for devel-

opers to incorporate into their developments certain

architectural and design elements. As noted by the Cali-

fornia Supreme Court, such development conditions are

clearly within the City’s police power. Ehrlich, supra, at

pp- 885-886. Based upon the foregoing, Cuiver City’s art

program does not constitute an exaction subject to review

under the Nollan/Dolan standards.

“We accept beauty as a proper community

objective, attainable through use of the police

power.” [Citation.] [J] Present day city planning

would be virtually impossible under a doctrine

26

which denied a city authority to legislate for

aesthetic purposes under the police power. Vir-

tually every city in this state has enacted zoning

ordinances for the purpose of improving the

appearance of the urban environment and the

quality of metropolitan life.

Metromedia, Inc. v. City of San Diego, 26 Cal.3d 848, 861-862

(1980) (footnote omitted).§

If this Court embraces the petitioner’s bold assertions

that the art program must and cannot meet the Nollan and

Dolan tests, then no city could require general landscap-

ing, architectural amenities or other aesthetic related

requirements as conditions of development. Under the

petitioner’s theory, unless Culver City could deny a

requested permit because of its direct impact on land-

scaping, architecture or aesthetics in the city, it could not

attach landscaping, and other design criteria as condi-

tions of approval for a development. Such an absurd

result is obviously not what this Court had in mind when

it decided Nollan and Dolan. In fact, such a conclusion

would be contrary to this Court’s direction relating to a

city’s authority regarding aesthetics. As noted previously,

this Court has stated time and again community aes-

thetics are concerns to which a city’s police power

8 Although this ruling was reversed on other grounds in

Metromedia, Inc. v. City of San Diego, 453 U.S. 490 (1981), the

majority applauded the California Supreme Court’s holding

that the police power extends to aesthetic regulation, pointing

out that this had placed California law “in accord with that of

most other jurisdictions.” Id. at p. 508 fn. 13; see, also Id. at pp.

530, 541 and 557 (agreement by concurring and dissenting

opinions).

27

extends. The petitioner should not be permitted to uproot

the long-standing holdings of this Honorable Court -

holdings which have concluded that a substantial police

power goal is promoted when a city regulates in order to

advance aesthetic interests.

CONCLUSION

For the reasons stated herein, this Honorable Court is

respectfully requested to deny the petition.

Respectfully submitted,

NorMAN Y. HERRING

City Attorney

9770 Culver Boulevard

Culver City, California 90232-0507

(310) 253-5660 |

Counsel of Record

JosepH W. PANNONE

Kane, BALLMER & BERKMAN

515 South Figueroa Street

Suite 1850

Los Angeles, California 90071-3301

(213) 452-0128

BENJAMIN KAUFMAN

FREILICH, KAUFMAN, Fox & SOHAGI

The Wilshire Landmark

Suite 1230

11755 Wilshire Boulevard

Los Angeles, California 90025-1518

(310) 477-7663