# Amicus Curiae Brief — Del Oro Hills v. City of Oceanside > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_1970%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 1995 - **Citation:** 516 U.S. 823 ## Text aes... & -D a“ No. 94-2112 In the Supreme Court of the United States October Term, 1994 y% . DEL ORO HILLS, Petitioners, Vv. CITY OF OCEANSIDE, Respondents. >. 4 Petition for a Writ of Certiorari to the California Court of Appeal for the Fourth Appellate District + BRIEF AMICUS CURIAE OF PACIFIC LEGAL FOUNDATION IN SUPPORT OF PETITION FOR CERTIORARI FILED BY PETITIONER DEL ORO HILLS ~ The Supreme Court indicated that no compensation would be due for denial of all economically viable use if the state were merely preventing a traditional common law nuisance or enforcing a preexisting limitation in the property’s title. Lucas, 120 L. Ed. 2d at 820-21. * It is also worth noting that in Lucas the Court again stated the Agins test in the positive voice originally used in Agins: "(T]he Fifth Amendment is violated when land use regulation ‘does not substantially advance legitimate state interests or denies an owner economically viable use of his land.’ [Citation to Agins.]" Lucas, 120 L. Ed. 2d at 813 (emphasis in original). The Court of Appeal’s implication that the Supreme Court has somehow backed off the “either/or” standard originally elaborated in Agins, Del Oro Hills, 31 Cal. App. 4th at 1079, has no merit. 9 on the first prong of the Agins test. The Court explicitly Stated that the economic impact of the challenged regulation had nothing to do with the Court’s decision to invalidate a regulation as an unconstitutional taking. 129 L. Ed. 2d at 316 n.6 ("There can be no argument that the permit conditions would deprive petitioner of ‘economically beneficial us[e]’ of her property as she currently operates a retail store on the lot."). As in Nollan, the challenged regulation failed to substantially advance a legitimate government interest as required by the first prong of the Agins test. If a regulation effects a taking under Agins because it fails to substantially advance a legitimate governmental interest, then the responsible governmental agency may rescind the offending regulation, or it may decide to simply condemn property adversely affected. First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. at 321. In either event, compensation is due at least for the period of time in which the regulation was in effect. Id. In sum, the Court of Appeal’s holding that both prongs of the Agins test must be satisfied before a taking may be found directly conflicts with one of the most deeply rooted doctrines in takings law. No precedent exists to support this conclusion and the Court of Appeal lacks authority to contradict the United States Supreme Court on the interpretation of federally guaranteed constitutional rights. 10 i CONFUSION PREVAILS AMONG STATE COURTS AND FEDERAL CIRCUIT COURTS REGARDING THE CORRECT APPLICATION OF THE TWO-PRONG AGINS TEST Although this Court’s precedent supports the disjunctive interpretation of the Agins test, lower state and federal courts lack uniformity in their application of Agins to regulatory takings. The following analysis demonstrates that among state and federal courts, at least six different applications of the Agins test exist. It is not that all these formulations are wrong; some are quite cogent and practical; others consid- erably. less so. The problem is that in trying to determine whether a regulation constitutes a taking, property owners and government regulators are buried in a morass of contra- dictory doctrinal confusion. Thus, further guidance from this Court regarding the proper application of the Agins test would facilitate much needed consistency and predictability in regulatory takings doctrine. A. Some Courts Properly Apply the Disjunctive Test The disjunctive application recognizes both prongs of the Agins test. Furthermore, it presumes that satisfaction of either prong suffices to constitute a regulatory taking. Seawall Association 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.° > See also McDougal v. County of Imperial, 942 F.2d at 677 (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 (continued...) 11 In Seawall, real estate developers challenged a local law that prohibited conversion or demolition of single-room occupancy properties. Jd. at 1060. The law also required owners to restore such properties and indefinitely lease them at controlled rents. Jd. at 1061. The developers claimed that the local law was invalid and violated the Federal and State Constitutions as a regulatory taking. Jd. The New York Court of Appeals reasoned that the challenged law did not substantially advance legitimate state interests because the defendants did not show the required nexus between the law and its purpose--the reduction of homelessness. Jd. at 1069. Moreover, the Court of Appeals determined that the local law’s requirement that owners indefinitely lease their properties at controlled rents denied property owners economically viable use of their property. Jd. at 1068. Reversing the decision of the New York Supreme Court, id. at 1062, the Court of Appeals held that under either prong of the Agins test, the regulation was invalid and constituted a regulatory taking. /d. at 1068-69. Other cases have found a regulatory taking under the first prong of the Agins test without proceeding to analyze the second prong.° Manocherian vy. Lenox Hill Hospital, > (...continued) 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). ® See, e.g., Schultz v. City of Grants Pass, 884 P.2d at 573 (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 (holding that arbitrary and Capricious government action did not advance legitimate state interest and thus was regulatory taking). 12 643 N.E.2d 479 (N.Y. 1994), represents this line of disjunctive application cases. In Manocherian, apartment owners challenged a city ordinance requiring them to offer renewal leases on apartments to a nonprofit hospital. Id. at 480. The New York Court of Appeals opined that the challenged ordinance did not substantially advance the ordinance’s stated purpose to lessen the emergency housing shortage. Id. at 485. Rather, it subsidized the hospital. Jd. at 484. Accordingly, the Court of Appeals reversed the decision of the New York Supreme Court and held that the challenged ordinance constituted a regulatory taking. Id. at 486. The Court of Appeals concluded that in light of the ordinance’s failure to pass the first prong of the Agins test, analysis of the second prong was unnecessary. Id. at 486-87. B. Some Courts Confuse Agins and Embrace a Conjunctive Test Despite seemingly clear contrary authority, a minority of lower courts maintain that the Agins test is conjunctive. Similar to the disjunctive application, the conjunctive application recognizes both prongs of the Agins test. It does not, however, acknowledge a regulatory taking unless the plaintiff has satisfied both prongs. Thus, under the con- junctive 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. Other than the California Court of Appeal’s decision in Del Oro Hills v. City of Oceanside, 31 Cal. App. 4th at 1060, only one other lower court decision supports the conjunctive application of the Agins test. See Gerijo, Inc. v. City of Fairfield, 638 N.E.2d 533 (Ohio 1994), cert. denied, __ U.S. _, 130 L. Ed. 2d 1068 (1995) (applying conjunc- tive Agins test). In Gerijo, the Ohio Supreme Court reversed the appellate court’s finding that a zoning ordinance which fails to substantially advance a legitimate state interest is ee a 13 invalid as a regulatory taking. Relying on lower state court decisions, the Ohio Supreme Court held that to prove a regulatory taking, the plaintiff must prove both that the regulation fails to substantially advance a legitimate state interest and that it denies the owner economically viable use of her property. Jd. at 230-31. The court in Gerijo did not acknowledge this Court’s decision in Agins. Id. at 231 (Pfeifer, J., dissenting). C. A Few Courts Have Adopted What Can Best be Described as an Exclusive Substantive Due Process/Effective Conjunctive Test The exclusive substantive due process application either explicitly or implicitly analyzes the first prong of the Agins test as a substantive due process claim. As with the conjunctive application, however, it consistently requires satisfaction of the second prong in order to find a regulatory taking that merits just compensation. For this reason it shall be referred to as the effective conjunctive application. The Eleventh Circuit Court of Appeals employed the effective conjunctive application in Eide v. Sarasota County, 908 F.2d 716 (11th Cir. 1990), cert. denied, 498 U.S. 1120 (1991). There, the plaintiff advanced a substantive due process claim on the basis that a county zoning ordinance was unconstitutional as applied to his property. /d. at 718. Plaintiff sought both declaratory relief and compensatory damages. Jd. The Court of Appeals in Eide analyzed both prongs of the Agins test as separate claims. /d. at 721. Neither mentioning nor analyzing this Court’s decision in Agins, the Court of Appeals stated in dicta that “arbitrary and capricious due process" is the theory under which to challenge a regulation that is arbitrary and capricious, not takings doctrine. Jd. at 722. Thus, the Court of Appeals effectively determined that a claim brought under the first prong of Agins, the legitimate state interest requirement, is a due process claim, not a takings claim. While the court 14 averred that damages might be available, where this formulation leaves the heightened scrutiny takings standard of Nollan is in doubt. See Nollan, 483 U.S. at 834 n.3. In contrast, to bring a “due process takings claim” the Court of Appeals stated that the plaintiff must establish that the challenged regulation destroyed the value of her property, effectively taking the property by eminent domain. Id. at 722. The “due process takings claim" resembles the second prong of the Agins test which requires that the challenged regulation deny the owner economically viable use of her property. Hence, under Eide, merely satisfying the first prong of the Agins test apparently never amounts to a regulatory taking. Accordingly, to establish a regulatory taking the effective conjunctive application always requires plaintiffs to satisfy the second prong of the Agins test.’ 7 See also Christopher Lake Development Co. v. St. Louis County, 35 F.3d 1269, 1274-75 (8th Cir. 1994) (stating that arbitrary and capricious government action constitutes “arbitrary and capricious due process" claim and that "due process takings claim" requires showing that regulation destroys owner’s property value); Bello v. Walker, 840 F.2d 1124, 1128-31 (3d Cir. 1988), cert. denied, 488 U.S. 868 (1988) (analyzing arbitrary and capricious government action as substantive due process claim, holding that takings claim requires showing that owners have lost all use of property); City of Pompano Beach v. Yardarm Restaurant, Inc. , 641 So. 2d 1377, 1384 (Fla. Dist. Ct. App. 1994), cert. denied, _ U.S. _, 63 U.S.L.W. 3890 (1995) (rejecting plaintiff's inverse condemnation claim on ground that satisfaction of first prong of Agins was insufficient, stating that "[the lower court’s decision in plaintiff's favor] was an understandable (continued...) ; i i] 15 Because Eide discussed these issues primarily in dicta, and did not apply each formulation to the allegations in the case, it is difficult to be certain exactly how inconsistent the formulations are with the precedent of this Court regarding standards of review and burdens of proof as outlined in Nollan and Dolan. In any event, the rather ambiguous tautology of the Eleventh Circuit points out the doctrinal conflict inherent in cases like Del Oro Hills. D. Application of a Nonexclusive Substantive Due Process Standard Allows the Use of Both a Substantive Due Process and a Takings Analysis The nonexclusive substantive due process application permits first prong Agins claims under either the "arbitrary and capricious due process" theory or the Fifth Amendment takings theory. This application highlights the difference in Standards of review between a due process claim and a takings claim. Furthermore, it 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, 129 L. Ed. 2d 304, however, the burden of proof for such claims properly lies with the government. Id. at 323. Chief Judge Oakes applied the nonexclusive substantive due process analysis in his opinion for the Second Circuit Court of Appeals in Southview Association, Ltd. v. Bongartz, 980 F.2d 84 (2d Cir. 1992), cert. denied, ___ U.S. __, 7 (...continued) error given that ‘takings’ law is one of the most confused areas in American jurisprudence"). 16 123 L. Ed. 2d 153 (1993). 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). In Southview, a developer advanced substantive due process and takings claims against members of the Vermont Environ- mental Board. Jd. at 101 and 107. The complaint alleged that the Vermont Environmental Board’s denial of a permit was arbitrary and capricious and failed to substantially advance a legitimate state interest. Jd. The Second Circuit affirmed the lower court’s dismissal on ripeness grounds. /d. at 100. However, Judge Oakes proceeded to analyze the merits of the case.* Jd. at 101-09. Judge Oakes first analyzed plaintiff's substantive due process claim. Rejecting the validity of this claim, Judge Oakes reasoned that government regulation of a landowner’s property violates the landowner’s right to substantive due process “only when government acts with ‘no legitimate reason for its decision.’" Jd. at 102. Thus, to avoid liability for a substantive due process violation, government need only advance a legitimate reason for its decision. Under a substantive due process theory, plaintiff carries the greater burden of proving that the government’s decision was completely irrational. Jd. at 104. Next, Judge Oakes analyzed plaintiff's takings claim. Also rejecting the validity of the takings claim, Judge Oakes determined that government regulation effects a taking of property without just compensation when a regulation fails to "substantially advance” a legitimate state interest. Id. at 107. Accordingly, to avoid liability for a taking, the government must establish that a nexus exists between the challenged * Judge Oakes’s analysis of the merits did not necessarily represent the official view of the Second Circuit panel. Southview, 980 F.2d at 100. 17 regulation and the state’s interest. Jd. at 108. Under a takings theory, the government carries the greater burden of proving that its decision substantially advanced a legitimate State interest. This result is, of course, contrary to the formulation in Del Oro Hills. Under a nonexclusive due process theory, substantive due process merely supplements takings as a theory of recovery. Under an exclusive due process theory, however, substantive due process is the only means by which plaintiff can recover under the "legitimate state interest" prong of Agins. Because substantive due process theory places the burden on the plaintiff to prove that the challenged government regulation lacks any rational basis, the exclusive due process application eludes the "essential nexus" requirements of both Nollan and Dolan. E. A "Balancing" Test Applied by Some Courts Subsumes or Ignores the Two-Prong Agins Test The balancing 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). Courts applying the balancing test either ignore the first prong of Agins, or they conclude that plaintiff has failed to satisfy the first prong. To determine whether a regulation has denied the owner economically viable use of her property, courts employing the balancing application analyze: (1) the economic impact of the regulation on the plaintiff; (2) the extent to which the regulation interferes with the plaintiff’s investment-backed expectations; and (3) the character of the government action. Id. Most prominent among cases applying the Penn Central analysis is the First Circuit’s decision in McAndrews v. Fleet Bank of Massachusetts, 989 F.2d 13 (1st Cir. 1993). See also Esposito v. South Carolina Coastal Council, 939 F.2d 165, 170-71 (4th Cir. 1991), cert. denied, ____ U.S. __, 120 L. Ed. 2d 898 (1992) (applying Penn Central balancing 18 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), cert. denied, ___ U.S. __, 124 L. Ed. 2d 679 (1993) (remanding to District Court to determine existence of regulatory taking under “economically viable use” analysis in light of Penn Central balancing test). But see Loveladies Harbor v. United States, 28 F.3d 1171, 1179 (Fed. Cir. 1994) (supplementing and partially rejecting Penn Central balancing test in favor of Lucas v. South Carolina Coastal Commission analysis). In McAndrews, a property owner challenged federal legislation which prohibited him from canceling a lease upon the lessee bank’s insolvency. McAndrews, 989 F.2d at 14. In determining whether the property owner had suffered a regulatory taking under the second prong of Agins, the First Circuit separately analyzed each factor of the Penn Central balancing test. Jd. at 18-20. The First Circuit ignored the first prong of the Agins test. The court’s avoidance of consideration of the first prong of Agins arguably led to a result less favorable to the property owner than justified. F. Other Courts Use Second Prong Takings Analysis Exclusively, Calling the First Prong Irrelevant Finally, the second prong application limits analysis to the second prong of the Agins test, while it consistently ignores analysis of the first prong. Among cases 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), cert. denied, 496 U.S. 906 (1990) (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, 641 So. 2d at 1384. The Eleventh Circuit stated in Reahard that just compensation claims always rely on a ms 19 second prong Agins analysis, and that Agins’ first prong is irrelevant to such claims. Reahard, 968 F.2d at 1136. In Reahard, landowners challenged a county land use plan which limited development on their land. Jd. at 1133. The landowners conceded that the plan was a valid exercise of police power. Jd. at 1135. However, they claimed that the county owed them just compensation because it had interfered with the landowners’ reasonable investment-backed expectations. Jd. The Court of Appeals reasoned in dicta that just compensation claims assume that the challenged regulation substantially advances a legitimate state interest. Id. at 1136. Thus, the only relevant inquiry is the extent to which the regulation deprived plaintiffs of economically viable use of their property. Jd. The Court of Appeals accordingly vacated the judgment of the District Court and remanded the case for further analysis consistent with its opinion. /d. at 1136. The Court of Appeals’ dicta regarding just compensation claims conflicts with this Court’s decision in First English Evangelical Lutheran Church v. Los Angeles County, 482 U.S. 304 (1987). In First English, this Court held that invalidation of a regulation is constitutionally insufficient without monetary payment to compensate for loss of the property’s use during the time in which the regulation was in effect. Jd. at 321. Contrary to the reasoning of the Eleventh Circuit in Reahard, under First English a just compensation claim is available when a regulation takes property because it fails to substantially advance a legitimate governmental interest. Thus while a takings case may assume the validity of the challenged regulation as in Lucas, that should not be a necessary predicate. 20 CONCLUSION Despite having suffered substantial damages as a result of an unlawful ordinance, Del Oro Hills was denied the right to establish a claim for an inverse condemnation taking. Del Oro Hills should be given an opportunity to prove there was a taking because the offending regulation failed to substantially advance a legitimate governmental interest. In proving a taking, of course, Del Oro Hills may rely on the heightened level of judicial scrutiny of regulations not other- wise available in mere due process claims. Additionally, Del Oro Hills should have right to recover whatever takings damages it can prove it suffered during the period of time in which the offending regulation was in place. The two-prong Agins test is a central pillar of takings jurisprudence. Topple it, and much of the edifice of takings law comes tumbling down; and with such a collapse the fundamental individual right to own and reasonably use property free from arbitrary and inequitable regulations will be severely abridged. If such a dramatic reduction in the constitutional protections for property rights is to occur, it will have to come from the United States Supreme Court and not the California Court of Appeal. For the foregoing reasons amicus Pacific Legal Foundation respectfully urges this Court to grant certiorari. DATED: July, 1995. Respectfully submitted, * JAMES S. BURLING *Counsel of Record Pacific Legal Foundation 2151 River Plaza Drive, Suite 305 Sacramento, California 95833 Telephone: (916) 641-8888 Attorney for Amicus Curiae Pacific Legal Foundation --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_1970%3A2. Public record. Not legal advice.