Amicus Curiae Brief — Landgate, Inc. v. California Coastal Commission

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\ J Aue 26 1996

No. 98-183 OFFICE OF THE CLERK

In the

Supreme Court of the United States

October Term, 1997

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vy

LANDGATE, INC.,

Petitioner,

Vv.

CALIFORNIA COASTAL COMMISSION,

Respondent.

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-

On Petition for a Writ of Certiorari to

the Supreme Court of California

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Ld

BRIEF AMICI CURIAE OF PACIFIC LEGAL

FOUNDATION, LECHUZA VILLAS WEST, AND

HORWATH ASSOCIATES IN SUPPORT OF THE

PETITION FOR A WRIT OF CERTIORARI

s+.

7

ERIC GRANT

Counsel of Record

JAMES S. BURLING

Pacific Legal Foundation

2151 River Plaza Drive,

Suite 305

Sacramento, California 95833

Telephone: (916) 641-8888

Facsimile: (916) 920-3444

Counsel for Amici Curiae

i

TABLE OF CONTENTS

Page

RGR Ce Pat RE Fa 9k book oa hee var eveean il

Gd ean a Or ANGI CURIA 2 ooo Sic oe ee cee sset's l

Pe GE ESR tra rer ene Poa ser aera ara ; a

I. THE CONFLICT WITH WILLIAMSON

COUNTY AND OTHER RIPENESS

bot eS. mee ec yr ks re eee a 3

Il. THE CONFLICT WITH THE PRINCIPLE

THAT PUBLIC BURDENS SHOULD BE

CAP SEN PS sak ae eas Ces 12

Ill. THE CONFLICT WITH OTHER STATE

pe ti eet PR Seg 6 4 ene 14

A. Nebraska Supreme Court ..... 2... sce0ese: 14

i: Se LEE ph week is ce reek aces 17

aT Ta oF oe COLES wes Fhe CERN EUS OO 19

ee

il

TABLE OF AUTHORITIES

Page

Cases |

Agins v. City of Tiburon,

OOF 51 GE ok 3s Oh dike vSck bide ba ew beetix 6

Armstrong v. United States, |

SOR A RE bain is Pb ses edhe keh saneese 12

Bel Mar Estates v. California Coastal

Commission, 171 Cal. Rptr. 773

FRR: FA BEE bo ct 8 a nae oa be ba ne 11

First English Evangelical Lutheran

Church v. County of Los Angeles,

Gd Gide a Le ee res cds en eee passim

Horwath vy. City of East Palo Alto,

No. 376167 (Cal. Super. Ct.

Sak DEMOS Cov. FOG Ta SOON, i odes ooo kee s co hec e 2

Horwath Associates v. City of

East Palo Alto, No. A067695

OME Ae PE, BO eb oe 6 ores see so ksaw nds 2

Lechuza Villas West v. California Coastal

Commission, 70 Cal. Rptr. 2d 399

(Ct. App. 1997), petition for cert. filed

eee ad

(U.S. June 30, 1998) (No. 98-30) ............. 1-2, 19

Lucas v. South Carolina Coastal Council,

See Shak BO CE os oie hehe vecbeos 3,5, 11

MacDonald, Sommer & Frates v. Yolo

County, 477 U.S. 340 (1986) .............. 5-6, 10, 13

McCuskey v. Canyon County, 851 P.2d 953

COD ES) COG I EE 8 orcas o baa 6 6s wrccce 17

<a 2A RNR OREN SG TN

ill

TABLE OF AUTHORITIES—Continued

Page

McCuskey v. Canyon County Commissioners,

912 P.2d 100 (Idaho 1996) (McCuskey II) ........ 17-18

Nollan v. California Coastal Commission,

MP SEINE Ga ai ova vcs seh oes oc ode es 1, 16

Patsy v. Florida Board of Regents,

Pe a I i eg Wao < hk sp wa 8

Suitum v. Tahoe Regional Planning Agency,

bbb a Le ts Ba es enna l

Whitehead Oil Company v. City of Lincoln,

515 N.W.2d 390 (Neb. 1994)

NI ca eS Se es 14-

Whitehead Oil Company v. City of Lincoln,

515 N.W.2d 401 (Neb. 1994)

SRE a eonireae e eaS 14,

Williamson County Regional Planning

Commission v. Hamilton Bank,

a ee RPRMEUOE ip back eh b ca vende 5, 8-10,

Rules of the Supreme Court

INI rk ra) as PV ei kas ce ve ilew ns

SORE ROT US aa mG ear ee

I yo ade kh CoRR oo kb oats cis cee:

l

INTEREST OF AMICI CURIAE

For 24 years, amicus Pacific Legal Foundation (PLF) has

been litigating in support of the right of individuals to make

reasonable use of their private property. PLF attorneys have

been before this Court on two occasions representing individ-

uals whose right to use their property was unlawfully denied

by government agencies. See Nollan vy. California Coastal

Commission, 483 U.S. 825 (1987); Suitum v. Tahoe Regional

Planning Agency, 117 S. Ct. 1659 (1997). PLF has participated

as an amicus curiae in virtually every major real property

takings case heard by this Court in the past two decades. PLF

attorneys are also counsel of record in no fewer than four pend-

ing petitions for writ of certiorari seeking this Court’s review

of erroneous interpretations of the Takings Clause.

One of these petitions was filed on behalf of amicus Le-

chuza Villas West (Lechuza), a California limited partnership

whose beachfront lots respondent California Coastal Commis-

sion has forced to remain economically idle for seven years.

See Lechuza Villas West v. California Coastal Commission.

No. 98-30 (filed June 30, 1998). Like petitioner in the present

case, Lechuza was the victim of a ruling by a court determined

to escape the compensation mandate of First English Evan-

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

304 (1987). Like the court below, the state court in Lechuza’s

case held that Lechuza’s takings claim could not possibly ripen

before Lechuza had established—by a judicial decree in sep-

arate litigation against the Coastal Commission—that it had a

right to develop its land under state law. See Lechuza Villas

' Pursuant to Rule 37.3(a), all parties have consented to the filing of

this amicus curiae brief. Letters evidencing such consent have been

filed with the Clerk of the Court.

Pursuant to Rule 37.6, amici curiae affirm that no counsel for any

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

entity made a monetary contribution to the preparation or submission

of this brief.

2

West v. California Coastal Commission, 70 Cal. Rptr. 2d 399,

410-11 (Ct. App. 1997). Like the court below, therefore, the

court in Lechuza’s case held that Lechuza could not recover

damages for a temporary taking even if the Coastal Commission

had decided that Lechuza could not build on its property, even

if that decision had deprived the property of all economically

viable use, and even if state law did not justify the agency’s

decision.

Finally, amicus Horwath Associates (Horwath) is a Cali-

fornia partnership whose rental property was damaged by gov-

ernment action (refusal to approve requested rent increases)

that failed to substantially advance any legitimate state interest.

See Horwath v. City of East Palo Alto, No. 376167, slip op. at

5-6 (Cal. Super. Ct. San Mateo Cty. June 13, 1994) (“The City

and its Board further acknowledge that neither at the time nor

in this trial has any good cause been shown pursuant to either

the Ordinance or the Regulation for any delay beyond the man-

datory time limits ... .”). Despite this failure, the California

Court of Appeal ruled that Horwath could not recover damages

for a temporary taking during the period spent overturning the

government’s action in litigation. Like the court below, the

court of appeal in Horwath’s case concluded that the period

during which the taking was effective constituted merely “a

delay attributable to the normal workings of governmental and

legal processes, a situation First [English] declined to address.”

Horwath Associates v. City of East Palo Alto, No. A067695,

slip op. at 10 (Cal. Ct. App. Apr. 30, 1996). Although the Cal-

ifornia Supreme Court originally granted review in Horwath’s

case, review was dismissed once the Landgate decision was

handed down. Represented by I’LF, Horwath intends to file a

petition for certiorari seeking review of the court of appeal’s

decision on or before October 6, 1998.

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a

3

ARGUMENT

The petition has already explained how the decision below

conflicts with this Court’s temporary takings jurisprudence.

The following brief demonstrates how the decision also con-

flicts with the Court’s ripeness jurisprudence, with the axiom

of takings law that the public should bear the burdens of regu-

lation designed to benefit the public, and with the decisions of

two other state courts of last resort.

THE CONFLICT WITH WILLIAMSON COUNTY

AND OTHER RIPENESS DECISIONS

In First English, the lower court had held that “a land-

owner who claims that his property has been ‘taken’ by a land-

use regulation may not recover damages for the time before it

is finally determined that the regulation constitutes a ‘taking’

of his property.” 482 U.S. at 306-07. This Court explicitly

“disagree[d]” with that holding, concluding that the Takings

Clause “would require compensation for that period.” Jd. at

307. The Court went on to hold that “where the government’s

activities have already worked a taking of all use of property,

no subsequent action by the government can relieve it of the

duty to provide compensation for the period during which the

taking was effective.” Jd. at 321. The Court emphasized that

mere invalidation of the regulatory action “without payment of

fair value for the use of the property during this period of time

would be a constitutionally insufficient remedy.” /d. at 322.

In the present case, it cannot be disputed that the Coastal

Commission’s steadfast refusal to approve the application of

petitioner Landgate, Inc. (Landgate) to build a home on its lot

deprived that property of all economically viable use. As in

Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1007

(1992), that refusal “had the direct effect of barring [Landgate]

from erecting any permanent habitable structures on [its prop-

erty].” Indeed, the trial court found that

4

Landgate has been deprived, at least temporarily, of

all economically viable or productive use of its prop-

erty insofar as Landgate, at least temporarily, could

not legally obtain any valid permits or approvals to

construct any project on its property as a result of the

Commission’s actions.

Appendix to Petition for a Wnt of Certiorari (Pet. App) at 101a.

The court of appeal affirmed this finding, observing that “[t]he

Commission does not argue that a viable use of the land re-

mained after the permit denial.” Jd at 69a. Even the California

Supreme Court conceded this point (if obliquely) when it ub-

served that “each time there is a delay in the development pro-

cess”—such as the two-year delay occasioned by the Coastal

Commission’s refusal to grant Landgate a development permit

—‘the delay may be said to temporarily deprive the developer

of undeveloped property of use of that property.” /d. at 26a.

Given the rule in First English and given the fact of Land-

gate’s loss of economically viable use, it would seem a fairly

straightforward conclusion that Landgate is entitled to “pay-

ment of fair value for the use of the property during” the two ‘

years that its property was forced to remain economically idle.

First English, 482 U.S. at 322. How did the Landgate majority

escape from this conclusion? Certainly not by asserting boldly

that any delays occasioned by a judicial determination of a

land-use restriction’s validity merely constitute “normal delays

in obtaining building permits, changes in zoning ordinances,

variances, and the like,” which First English arguably excluded

from the compensation mandate. 482 U.S. at 321. No, such

an assertion would have been too obvious a departure from the

text of First English and too obvious an adoption of the First

English dissent—a point rightly emphasized by the Landgate

dissenters and by the petition. See Pet. App. at 38a (Chin, J.,

dissenting); id. at 48a (Brown, J., dissenting); Pet. at 21-24.

Rather, in the end, the Landgate majority “distinguished” this

Court’s decision on grounds of finality, reasoning thus:

5

First English merely stands for the proposition that

once a government action finally denies all eco-

nomically viable use of property, the fact that the

government later rescinds that action after a judicial

proceeding does not relieve it of its duty to pay

compensation.

Id. at 32a (emphasis added).

The notion of finality that was conceived by the California

Supreme Court in Landgate is fundamentally flawed. Not only

is that notion irreconcilably in conflict with this Court’s ripe-

ness jurisprudence, it will usher in a legal regime in which the

principle of compensation for temporary takings is rendered

wholly theoretical.

After noting generally at the beginning of its analysis that

this Court “has emphasized that the question whether proper-

ty has been taken is not ripe for decision until a government

agency has rendered a final decision on the use to which the

property in question may be put,” id. at 14a (citing Williamson

County Regional Planning Commission v. Hamilton Bank, 473

U.S. 172, 190-91 (1985)), the Landgate majority sharpened its

focus in Part ILC of its opinion. In setting forth “the critical

difference between this case and Lucas and First English,” the

court opined that “an essential prerequisite to the assertion of

a takings claim is ‘a final and authoritative determination of the

type and intensity of development legally permitted on the sub-

ject property.’” Jd at 28a (quoting MacDonald, Sommer &

Frates v. Yolo County, 477 U.S. 340, 348 (1986)). The imme-

diately following sentence set forth the court’s conception of a

final determination:

If a would-be developer fails to meet legitimate con-

ditions for obtaining a development permit, then a

government agency’s refusal to issue such a permit

would by no means be a “final and authoritative de-

termination of the intensity of development legally

6

permitted on the subject property,” but merely a

conditional denial.

Id. at 28a-29a (emphasis added).

This proposition has a superficial plausibility, conjuring

up a would-be developer who fails to submit any development

plan at all, cf, e.g., Agins v. City of Tiburon, 447 U.S. 255, 260

(1980) (noting that the property owners had “not submitted a

plan for development of their property as the [zoning] ordi-

nances permit”), or who fails to submit a development plan that

provides for sufficient street access, sewer service, police pro-

tection, and water service, cf, e.g., MacDonald, 477 U.S. at

343. But as used by the California Supreme Court, the phrase

“fails to meet legitimate conditions for obtaining a development

permit” has an entirely different meaning, as revealed by the

court’s application of that principle to the facts of the present

case.

In rejecting Landgate’s application to build a home on its

lot, reasoned the court, the Coastal Commission did not act

with finality; rather, the agency’s “rejection of Landgate’s dev-

elopment was at most conditional.” Pet. App. at 29a (emphasis

added). What made the Coastal Commission’s rejection condi-

tional rather than final? It could not have been that Landgate

“fail[ed] to meet legitimate conditions for obtaining a develop-

ment permit” as those words are ordinarily used. If the condi-

tion in this case was that of proposing development on a legally

configured lot, then Landgate surely did not fail to meet it. In

a prior phase of the present case, the court of appeal held that

“Landgate’s predecessor owned two valid, properly recorded

lots” resulting from a lot reconfiguration done by Los Angeles

County and that the Coastal Commission lacked authority to

“reject the reconfiguration as new ‘development’ inconsistent

with the [Coastal] Act.” Jd. at 96a. The state supreme court

accepted that holding as the law of the case. See id. at 24a n.6.

If instead the condition in this case was that of obtaining the

agency’s permission to reconfigure Landgate’s lot, then that

7

condition was not /egitimate. To rephrase the previous point,

it has been determined by the California courts that “the Com-

mission had no jurisdiction to deny [Landgate’s development]

permit on that ground.” Jd. at 64a.

What, then, did the Landgate majority actually mean by

“fails to meet legitimate conditions for obtaining a development

permit”? The answer is found in the court’s conclusion that the

Coastal Commission “could not be said to have reached a final

and authoritative determination of the development on Land-

gate’s lot until after the dispute about the legality of the lot had

been resolved.” Id. at 31a (emphasis added); accord id. at 30a

(“Or to put it another way, the Commission’s denial of develop-

ment on [some lot] is not a final decision on that development

until the dispute over whether [the lot] legally existed was re-

solved.”). Indeed, the court identified the existence of a dispute

as “the difference between this case and First English,” ex-

plaining thus:

Here, there was a postponement of development

pending resolution of a threshold issue of the devel-

opment approval process—whether the lot was legal

—and not a final decision denying development. In

First English, on the other hand, . . . there was no

dispute about a threshold issue in the development

approval process, as there was in this case, that

would be a legitimate basis for postponing approval

of development.

Id. at 32a (emphasis added).

In the California Supreme Court’s conception of finality,

then, there can be no final decision, no final and authoritative

determination by a land-use agency, so long as there exists a

“dispute about a threshold issue in the development approval

process.” Jd. Moreover—and this is critical—auntil that dispute

is resolved by a court, an application for development has not

been finally denied, only conditionally denied or postponed.

8

Accordingly, even a property owner who is categorically pro-

hibited from making any use of his land suffers no compensable

taking (temporary or otherwise) if that prohibition results from

an “impasse in the regulatory process that must be resolved

through a judicial proceeding.” /d. In other words, “a judicial

determination of the validity of certain preconditions to devel-

opment is a normal part of the development process, and the

fact that a developer must resort to such a determination does

not constitute a per se temporary taking.” /d. at 32a-33a.

In short, the California Supreme Court created a category

that it labeled “threshold issue[s] in the development process”

or “preconditions to development” or “threshold development

questions.” /d. This category was undefined but nevertheless

expansive, including both “procedural conditions and substan-

tive requirements on development.” Jd. at 28a. If there arises

a “dispute” or “impasse” between the land-use agency and the

property owner regarding these questions or issues, it “must be

resolved through a judicial proceeding” before there can be “a

final decision denying development.” /d. at 32a. This passive-

voice formulation, however, hides the last, critical detail of the

Landgate majority’s scheme: the required “judicial determina-

tion” does not magically fall from the sky; rather, to obtain a

final decision regarding the use of his property that will allow

him to pursue a regulatory takings claim, “a developer must

resort to such a proceeding.” /d. at 32a-33a (emphasis added).

In one sentence: Landgate held that as to some expansive cate-

gory of development conditions imposed by a land-use agency,

a property owner must affirmatively seek judicial review of the

agency’s position in order to obtain a final decision that renders

the owner’s takings claims ripe.

To state this holding is fairly to expose its error. Consider

first Williamson County. In setting forth the finality require-

ment in that decision, the Court rejected the argument that the

requirement was inconsistent with Patsy v. Florida Board of

Regents, 457 U.S. 496 (1982), which held that an aggrieved

9

person need not “exhaust administrative remedies before bring-

ing a § 1983 action.” Williamson County, 473 U.S. at 192. The

Court carefully explained why finality and exhaustion are “con-

ceptually distinct”: the former “is concerned with whether the

initial decisionmaker has arrived at a definitive position on the

issue that inflicts an actual, concrete injury”; the latter, by con-

trast, “refers to administrative and judicial procedures by which

an injured party may seek review of an adverse decision and

obtain a remedy if the decision is found to be unlawful or other-

wise inappropriate.” Jd. at 192, 193 (emphasis added). The

Court went on to illustrate the difference between the two con-

cepts by “comparing the procedure for seeking a variance [from

a land-use agency] with the procedures that, under Patsy, [the

owner] would not be required to exhaust.” /d. at 193. Observ-

ing that “the State provides procedures by which an aggrieved

property owner may seek a declaratory judgment regarding the

validity of zoning and planning actions taken by county author-

ities,” the Court nevertheless explicitly helc that the property

owner “would not be required to resort to those procedures be-

fore bringing its § 1983 action, because those procedures are

clearly remedial.” Jd. (emphasis added).

The contrast between Williamson County and the decision

below could not be more clear: if this Court’s decision was that

a property owner “would not be required to resort to [judicial]

procedures,” the California Supreme Court’s decision was that

a property owner “must resort to [a judicial] determination” in

order to obtain a final and authoritative determination by the

agency. Pet. App. at 33a (emphasis added). Thus, while the

respondent in Williamson County was not required to “seek a

declaratory judgment regarding the validity” of the land-use

agency’s disapproval of a subdivision plan in order to obtain a

final decision from that agency, 473 U.S. at 193, Landgate was

required to seek “a judicial determination of the validity” of the

Coastal Commission’s denial of a development permit in order

to obtain a final decision from that agency. Cf Pet. App. at 25a

(rejecting Landgate’s contention that there was a final decision

10

denying all economically viable use of its property “from the

time the development permit was denied in February 1991 until

the time it was approved in February 1993 after the lot line

issue had been resolved by litigation”).

Following Williamson County, the decision in MacDonald

confirms the conflict between this Court’s ripeness jurispru-

dence and the decision below. After having reiterated that a

takings claim is ripe when “a court knows what use, if any, may

be made of the property,” the Court spoke to the very point at

issue here: “A property owner is of course not required to re-

sort to piecemeal litigation or otherwise unfair procedures in

order to obtain this determination.” MacDonald, 477 U.S. at

350 & n.7 (emphasis added); accord id. at 363 (Powell, J.,

joined by Burger, C.J., dissenting) (quoting this statement with

approval). But “piecemeal litigation” is precisely what the

California Supreme Court has endorsed. In the present case,

the agency relented after only one round of “pre-finality” liti-

gation. Yet while remaining entirely faithful to the decision

below, the agency could have forced Landgate to sue it again

and again. If the first round of litigation concerned “lot config-

uration,” the second round could have concerned “compliance

with the Subdivision Map Act,” the third round “compliance

with CEQA [California Environmental Quality Act],” and suc-

ceeding rounds any of myriad “other threshold questions that

must be resolved before it can be determined whether a devel-

opment should be permitted to proceed.” Pet. App. at 33a; see

also id. at 33a-34a (citing, as merely exemplary, 11 different

instances of “threshold development questions”).

If the decision below is inconsistent with this Court’s ripe-

ness jurisprudence, it also takes California law back to the pre-

First English era for all practical purposes. While the Landgate

opinion would appear to hold open the possibility that there are

certain issues that do not qualify as “threshold” issues, certain

conditions that do not count as “preconditions,” that possibility

is merely theoretical. As mentioned above, the kinds of issues

11

that fall within the Landgate rubric cover the spectrum, includ-

ing both “procedural conditions and substantive requirements

on development.” Pet. App. at 28a. Indeed, as an example of

a case involving “threshold development questions,” Landgate

cited Bel Mar Estates v. California Coastal Commission, 171

Cal. Rptr. 773 (Ct. App. 1981), describing it as a case in which

the “Commission correctly construed [its] statutory authority to

deny development.” Pet. App. at 33a, 34a. The citation to Bel

Mar Estates is telling, for that case involved simply the ques-

tion whether “the grounds given by the commission for denying

the application” for development “conform[ed] to the policy of

the [Coastal Act].” 171 Cal. Rptr. at 775-76.

Yet if the question whether a proposed development con-

forms with the statute administered by the land-use agency is

a “threshold” question, if the condition that such a development

comply with the statute is a precondition, then every question

is a threshold question and every condition is a precondition.

The notion of finality (or rather non-finality) conceived by the

court below has no limits. Accordingly, to paraphrase Lucas,

the concept of a threshold development question or a precon-

dition to development “cannot be the basis for departing from

[the] categorical rule that [temporary deprivations of all eco-

nomically viable use] must be compensated. If it were, de-

parture would virtually always be allowed.” 505 U.S. at 1026.

Because the California Supreme Court has decided an

important question of takings procedure in a way that conflicts

with relevant decisions of this Court, review is warranted under

Rule 10(c).

*

12

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THE CONFLICT WITH THE

PRINCIPLE THAT PUBLIC BURDENS

SHOULD BE BORNE BY THE PUBLIC

In the lower court’s own description, the Coastal Com-

mission’s refusal to allow Landgate to build a house on its lot

was “a legally erroneous decision of a government agency dur-

ing the development approval process resulting in delay.” Pet.

App. at 15a. The court conceded that, from Landgate’s point

of view, the delay resulting from this erroneous decision (or

“regulatory mistake,” id.) had an impact that was “identical”

to the “denial of all feasible use.” Jd. at 26a. In general, the

court further conceded, the delay resulting from a regulatory

mistake “may be said to temporarily deprive the developer of

undeveloped property of use of that property.” Id. Notwith-

standing these concessions, the Landgate majority heaped the

burden of governmental mistakes onto property owners, hold-

ing that such mistakes are “part of the development approval

process, and development delays that result therefrom may be

imposed on the developer rather than the general taxpayer with-

out violating the United States Constitution.” Jd. at 19a.

This allocation of burdens is fundamentally in conflict

with the bedrock principle of takings law: “It is axiomatic that

the Fifth Amendment’s just compensation provision is ‘de-

signed to bar Government from forcing some people alone to

bear public burdens which, in all fairness and justice, should be

borne by the public as a whole.’” First English, 482 U.S. at

318-19 (quoting Armstrong v. United States, 364 U.S. 40, 49

(1960)). It may well be that property owners must bear the

burdens of obtaining a final administrative decision. In all fair-

ness and justice, however, it is the public who should bear the

burden of regulatory mistakes that must be corrected through

litigation. After all, it is the public who presumably benefits

from the “reasonable regulatory process designed to advance

legitimate government interest,” Landgate, Pet. App. at 18a,

13

which produced those mistakes in the first place. It is no ex-

cuse that regulatory mistakes are somehow inevitable given that

“t]he resolution of these cases often turns on the construction

and application of complex statutory schemes.” /d. at 33a.

Again, it is the public—not the victimized property owners—

who presumably benefits from the mistake-generating schemes;

therefore, it is the public who ought to bear the burden when

the resulting mistakes “temporarily deprive the developer of

undeveloped property of use of that property” during the course

of litigation overturning those mistakes. /d. at 26a.

This, we submit, is the teaching of First English. Back in

Williamson County, this Court assigned property owners rather

than the public much of the burden of obtaining permission to

make economically viable use of their land by requiring them

to spend considerable time and effort extracting a “final deci-

sion” from the administrative process. But in MacDonald, the

Court set a limit, declaring that the burden on property owners

“of course” did not extend so far as to require them “to resort

to piecemeal litigation” to obtain this final decision. 477 U.S.

at 350 n.7. First English confirmed this limit and made it more

concrete: “invalidation of [a regulatory mistake] without pay-

ment of fair value for the use of the property during [the period

spent overturning the mistake through litigation] would be a

constitutionally insufficient remedy.” 482 U.S. at 322. Once

the property owner is forced to resort to the judicial process, the

government’s mistakes must be borne by the government. This

is fairness and justice.

e

i4

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THE CONFLICT WITH OTHER

STATE COURTS OF LAST RESORT

While the California Supreme Court’s decision is arguably

consistent with the decisions of some state courts of last resort,

see Landgate, Pet. App. at 15a (citing cases), it is definitely in

conflict with the decisions of two others.

A. Nebraska Supreme Court

In Whitehead Oil Company v. City of Lincoln, 515 N.W.2d

390 (Neb. 1994) (Whitehead Oil IT), the company applied for

a use permit to build and operate a service station and conve-

nience store on its property consistent with the existing zoning.

The city, “react[ing] to the arguably valid concerns of its citi-

zens in the area,” modified the property’s zoning designation

and denied the application as inconsistent with that designation.

Id. at 678. That was in June of 1987. Nearly seven years later,

after two trips through the Nebraska court system, the company

succeeded in having the zoning change declared invalid under

state law: the Nebraska Supreme Court concluded that “the

city acted arbitrarily and capriciously in changing the zoning

designation of the [company’s] parcel”; the court “direct[ed]

the district court to remand the matter to the city, ordering it to

issue Whitehead Oil the permit it seeks.” Jd. at 678, 680.

Having ruled for the oil company on this state-law zoning

issue, the Nebraska Supreme Court then considered the com-

pany’s additional claims for “damages in inverse condemnation

under both the U.S. and Nebraska Constitutions.” Whitehead

Oil Company v. City of Lincoln, 515 N.W.2d 401, 405 (Neb.

1994) (Whitehead Oil III) (companion case decided the same

day as Whitehead Oil Il). Those takings claims sought com-

pensation in an amount equal to “the fair rental value of its

property as a site for a convenience store . . . from the date its

use permit should have issued,” not from the date on which the

city’s actions were invalidated. /d. (emphasis added).

15

How would the California Supreme Court have treated

these claims under the Landgate analysis? The answer is not at

all difficult. To paraphrase Landgate only slightly: The city

“could legitimately require” that any development of the com-

pany’s property be consistent with all validly adopted zoning

designations. Landgate, Pet. App. at 31a. Therefore, when the

city determined that the company’s development proposal was

not consistent with the newly changed zoning, “it could legiti-

mately litigate the [question of the zoning change’s validity]

without offending the takings clause.” Jd? That is, the city

“could not be said to have reached a final and authoritative de-

termination of the development on [the company’s parcel] until

after the dispute about the legality of the [zoning change] had

been resolved.” Jd. To sam up:

In light of the foregoing, the difference be-

tween this case and First English [is] clear. Here,

there was a postponement of development pending

resolution of a threshold issue of the development

process—whether the [zoning change] was [valid]

—and not a final decision denying development. In

First English, on the other hand, . . . there was no

dispute about a threshold issue in the development

approval process, as there was in this case, that

would be a legitimate basis for postponing approval

of development. The postponement of [Whitehead

Oil’s] development therefore does not constitute a

temporary taking of property as that doctrine was

conceived in First English.

Pet. App. at 32a.

? The legitimacy of this litigation derives in part from the presump-

tion of validity that attaches to all zoning ordinances in Nebraska (as

no doubt in every other jurisdiction). See, e.g., Whitehead Oil IT, 515

N.W.2d at 397 (holding that, “[i]n passing upon the validity of zoning

ordinances, an appellate court should give great weight to the deter-

mination of local authorities”).

16

But how instead did the Nebraska Supreme Court actually

treat the company’s takings claims? As opposed to a reading

of First English that emphasized that decision’s “narrowness”

and its “implied limitation[s] on the temporary takings doc-

trine,” Landgate, Pet. App. at 13a, the Nebraska Supeme Court

took First English at face value: “a landowner may sue for

damages when property is ‘taken’ by government regulation,

even if the taking is only temporary and the regulation later

invalidated.” Whitehead Oil III, 515 N.W.2d at 407 (emphasis

added). Thus, the court did not engage in sophistic(ated) in-

quiry as to whether the city could “legitimately litigate” some

“threshold issue of the development process.” Rather, the court

asked the straightforward question whether the city’s denial of

the use permit satisfied this Court’s familiar two-pronged test

for a categorical taking: “[L]and-use regulation does not effect

a taking if it ‘substantially advance[s] legitimate state interests’

and does not ‘den[y] an owner economically viable use of his

land.’” Jd. at 408 (alterations in original) (quoting Nollan v.

California Coastal Commission, 483 U.S. 823, 834 (1987)).

Emphasizing an obvious point that seemed to escape the

California Supreme Court—that the foregoing is “a disjunctive

test under which a taking results if either element is not met,”

the Nebraska Supreme Court concluded that the city’s action

failed the first prong of the test. Jd. That conclusion alone was

sufficient to award damages to the company for a temporary

taking; no further inquiry was necessary. See id. Moreover,

these damages accrued not from the date of the “judicial deter-

mination of the validity of certain preconditions to develop-

ment,” Landgate, Pet. App. at 32a, but from “the date of the

city’s refusal to permit [the requested] use of the land” to “the

date the city issues the permit Whitehead Oil seeks,” Whitehead

Oil ITI, 515 N.W.2d at 412. In Nebraska, therefore, a property

owner can “recover damages for the time before it is finally de-

termined that the [challenged government action] constitutes a

‘taking’ of his property.” First English, 482 U.S. at 306-07. In

so holding, Whitehead Oil cannot be reconciled with Landgate.

Nee eee ee em ae ae

17

B. Idaho Supreme Court

Also in conflict with the decision below is the decision of

the Idaho Supreme Court in McCuskey v. Canyon County Com-

missioners, 912 P.2d 100 (Idaho 1996) (McCuskey II). In that

case, a property owner sought to construct a convenience store,

a use authorized by the zoning in existence when he purchased

the property. In 1986, the county initially granted a building

permit, but quickly revoked it on the ground that the conve-

nience store was inconsistent with a 1979 zoning ordinance that

purported to downzone the property from “heavy industrial” to

“rural residential.” See id. at 101-02. The property owner chal-

lenged the county’s action in a declaratory judgment action;

more than six years later, the Idaho Supreme Court declared the

1979 ordinance void under state law. McCuskey v. Canyon

County, 851 P.2d 953, 959 (Idaho 1993) (McCuskey I). The

owner then sought “compensation for the County’s interference

with his use of the property, which he contends constituted a

taking, during the period following the [revocation of the build-

ing permit] and until the date the opinion in McCuskey I was

filed.” McCuskey II, 912 P.2d at 103. That is, the property

owner sought damages for a temporary taking pursuant to First

English. The trial court denied relief on the ground that the

takings claim was barred by the statute of limitations. See id.

On appeal, the critical question was when did the takings claim

first accrue.

Under Landgate, this would be an easy question: Because

the judicial decision voiding the 1979 zoning ordinance was

nothing more than “a judicial determination of the validity of

certain preconditions to development” (namely, the precondi-

tion of compliance with 1979 zoning ordinance), the time spent

obtaining that decision was “a normal part of the development

process,” and the six-year “postponement of [the owner’s] de-

velopment therefore does not constitute a temporary taking of

property.” Landgate, Pet. App. at 32a. Under this analysis, the

takings claim could have accrued no earlier than the decision in

18

McCuskey I in 1993. The Idaho Supreme Court, however, gave

an ir.econcilably different answer:

The time of taking occurs . . . as of the time that the

full extent of the plaintiff's loss of use and enjoy-

ment of the property becomes apparent. In this case,

[the property owner] was fully aware of the extent to

which Canyon County interfered with his full use

and enjoyment of the property in question on No-

vember 13, 1986, the date that [he] was notified...

that he could not build the convenience store.

McCuskey II, 912 P.2d at 104 (citations omitted and emphasis

added).

In Landgate, the “full extent of the p’aintiff’s loss of use

and enjoyment of the property” became apparent no later than

February of 1991, the date that the Coastal Commission denied

Landgate’s application to build a house on its property, in the

process making clear that it would not approve any develop-

ment. See supra pp. 3-4. Yet, in contrast to the Idaho Supreme

Court in McCuskey II, the California Supreme Court in Land-

gate ruled that a taking did not occur—and, indeed, could not

have occurred—at that time. This conflict, in conjunction with

the conflict between the decision below and the decision of the

Nebraska Supreme Court in Whitehead Oil, demonstrates that

the present case warrants review under Rule 10(b).

s+.

» 4

19

CONCLUSION

Landgate’s petition for certiorari should be granted.

In light of the close connections between the present case

and Lechuza Villas West v. California Coastal Commission

(No. 98-30), see supra pp. 1-2, the Court may also wish to con-

sider consolidating the two cases or at least holding Lechuza

pending the final disposition of the present case.

DATED: August, 1998.

Respectfully submitted,

ERIC GRANT

Counsel of Record

JAMES S. BURLING

Pacific Legal Foundation

2151 River Plaza Drive,

Suite 305

Sacramento, California 95833

Telephone: (916) 641-8888

Facsimile: (916) 920-3444

Counsel for Amici Curiae