Amicus Curiae Brief — Cayetano v. Chevron U.S.A. Inc.

(5)

No. 00-1198

FEB 26 200 !

|

In The

Supreme Court of the United States

+

BENJAMIN J. CAYETANO and EARL I. ANZAI,

Petitioners,

CHEVRON USA, INC.,

Respondent.

¢

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

7

BRIEF OF THE CITY AND COUNTY OF SAN

FRANCISCO AS AMICUS CURIAE SUPPORTING

PETITION FOR WRIT OF CERTIORARI

¢

Louise H. RENNE

City Attorney

City and County of San Francisco

ANDREW W. ScHWARTZ *

Burk E. DELVENTHAL

ELLEN FoRMAN

SusAN S. CLEVELAND

Deputy City Attorneys

City Hall, Room 234

1 Carlton B. Goodlett Place

San Francisco, California 94102-4682

(415) 554-4620

*Counsel of Record

Additional Counsel Continued on Inside Cover

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

OR CALL COLLECT (402) 342-2831

The following California cities join with the City and

County of San Francisco in this brief in support of peti-

tioners:

Alameda

Carol A. Korade,

City Attorney

City Hall

2263 Santa Clara Ave.,

Room 280

Alameda, CA 94501

Antioch

William Galstan,

City Attorney

P.O. Box 5007

Antioch, CA 94531-5007

Avalon

Pamela Albers,

City Attorney

P.O. Box 1676

Avalon, CA 90704

Berkeley

Zachary D. Cowan,

City Attorney

2180 Milvia St.

Berkeley, CA 94704

Capitola

Richard M. Manning,

City Attorney

420 Capitola Ave.

Capitola, CA 95010

Carlsbad

Ronald R. Ball,

City Attorney

1200 Carlsbad Village

Drive

Carlsbad, CA 92008

Chula Vista

John M. Kaheny,

City Attorney

276 Fourth Avenue

Chula Vista, CA 91910

Corte Madera

Jeffrey A. Walter,

City Attorney

Walter & Pistole

670 W. Napa, Suite F

Sonoma, CA 95416

Cotati

Jeffrey A. Walter,

City Attorney

Walter & Pistole

670 W. Napa, Suite F

Sonoma, CA 95416

Culver City

Carol Schwab,

City Attorney

9770 Culver Blvd.

Culver City, CA 90232

gre LL LOLOL OLED LTD

Hawthorne

Glen E. Shishido,

City Attorney

4456 West 126th Street

Hawthorne, CA 90250

Lafayette

Charles J. Williams,

City Attorney

1330 Arnold Dr., Suite 149

Martinez, CA 94553

Laguna Beach

Philip D. Kohn,

City Attorney

Rutan & Tucker

Post Office Box 1950

Costa Mesa, CA

92628-1950

Livermore

Thomas R. Curry,

City Attorney

1052 So. Livermore Ave.

Livermore, CA 94550

Long Beach

Robert E. Shannon,

City Attorney

City Hall

333 West Ocean Blvd.,

11th Floor

Long Beach, CA

90802-4664

Los Angeles

James K. Hahn,

City Attorney

200 N. Main St., 18th

Floor

Los Angeles, CA 90012

Montclair

Diane E. Robbins,

City Attorney

11800 Central Ave.,

Suite 125

Chino, CA 91710

Moreno Valley

Robert L. Hansen,

Asst. City Attorney

P.O. Box 88005

14177 Frederick St. \

Moreno Valley, CA 92552

Morgan Hill

Helene L. Leichter,

City Attorney

17555 Peak Avenue

Morgan Hill, CA 95037

Newark

Gary T. Galliano,

City Attorney

16101 East 14th St.

San Leandro, CA 94578

Novato

Jeffrey A. Walter,

City Attorney

Walter & Pistole

670 W. Napa, Suite F

Sonoma, CA 95416

Oceanside

Duane E. Bennett,

City Attorney

300 North Coast Highway

Oceanside, CA 92054

Palm Desert

David J. Erwin,

City Attorney

74-760 Highway 111,

Suite 200

Indian Wells, CA 92210

Piedmont

George S. Peyton, Jr.,

City Attorney

1999 Harrison St.

Suite 1950

Oakland, CA 94612

Port Hueneme

Don G. Kircher,

City Attorney

Burke, Williams &

Sorensen, LLP

611 West Sixth Street,

Suite 2500

Los Angeles, CA 90017

Poway

Stephen M. Eckis,

City Attorney

P.O. Box 789

Poway, CA 92074-0789

Redlands

Daniel J. McHugh,

City Attorney

P.O. Box 3005

Redlands, CA 92373

Roseville

Mark Doane,

City Attorney

2005 Hilltop Circle

Roseville, CA 95747

Ross

Hadden Roth,

City Attorney

1050 Northgate Dr.

San Rafael, CA 94903

Sacramento

Samuel L. Jackson,

City Attorney

980 Ninth St., Tenth Floor

Sacramento, CA

95814-2736

San Anselmo

Hadden Roth,

City Attorney

1050 Northgate Dr.

San Rafael, CA 94903

San Buenaventura

Donna Landeros,

City Manager

501 Poli Street

Ventura, CA 93002-0099

San Diego

Casey Gwinn,

City Attorney

1200 Third Ave.,

Suite 1620

San Diego, CA 92101

San Pablo

Brian M. Libow,

City Attorney

One Alvarado Square

San Pablo, CA 94806

San Rafael

Gary T. Ragghianti,

City Attorney

1400 Fifth Avenue

San Rafael, CA 94901

Santa Clara

Michael R. Downey,

City Attorney

1500 Warburton Ave.

Santa Clara, CA 95050

Santa Cruz

John G. Baricone,

City Attorney

333 Church Street

Santa Cruz, CA 95060

Santa Monica

Marsha Jones Moutri,

City Attorney

1685 Main St.

P.O. Box 2200

Santa Monica, CA

90407-2200

Santa Paula

Phillip H. Romney,

City Attorney

P.O. Box 912

Santa Paula, CA 93061

Sunnyvale

Valerie J. Armento,

City Attorney

P.O. Box 3707

Sunnyvale, CA 94088

Mii

Tiburon

Ann R. Danforth,

City Attorney

1505 Tiburon Blvd.

Tiburon, CA 94920

Torrance

John L. Fellows III,

City Attorney

3031 Torrance Blvd.

Torrance, CA 90503-5059

Tracy

Debra E. Corbett,

City Attorney

325 East Tenth St.

Tracy, CA 95376

Union City

Gary T. Galliano,

City Attorney

16101 East 14th St.

San Leandro, CA 94578

Wasco

Alan J. Peak,

City Attorney

1601 “F” St.

Bakersfield, CA 93301

i

TABLE OF CONTENTS

TABLE OF AUT ERORREEERS 6c 6cs ce cic cecacivvesscceus ii

STATEMENT OF INTEREST OF AMICUS CURIAE..... 1

CREP RUGS 005 0c dé ctescabepuand nuns thaybaene ets 1

STATEMENT OF TEER CAB ooo icc icc cecicdvccaawsss 3

REASONS FOR GRANTING THE WRIT OF CER-

RURMUIE ons kc tadeuccindees bined pekiaseerks sate 5

I. REVIEW BY THIS COURT IS NECESSARY TO

ESTABLISH A CLEAR STANDARD OF JUDI-

CIAL REVIEW OF LEGISLATIVE LAND USE

pe bey 8 | PTET ET yy Peres pre pre 5

Il. THE COURT SHOULD GRANT REVIEW TO

PRESERVE THE POWERS OF ELECTED LEGIS-

LATURES TO DECIDE THE WISDOM AND

EFFICACY OF LAND USE REGULATION ..... 13

A. The Ninth Circuit Decision Conflicts with

Representative Democracy................. 14

B. The Ninth Circuit Decision Will Prevent

Land Use Planning and Reduce Property

We, i a0 ob dnd no 4esdes io neeekeaeetes. 15

C. The Ninth Circuit Decision Will Promote

Inefficiency and Chaos in Land Use Poli-

CPUS ook 5h cds cee epics Kc acadcaaaevacen 16

D. The Ninth Circuit Decision Will Shift Land

Use Planning to Federal Courts Unfamiliar

a Baw ar a 17

ee RT 8 PICS TTERT TPC IeT ER or ore hr eee 20

Se

TABLE OF AUTHORITIES

Page

Cases

Agins v. City of Tiburon, 447 U.S. 255

(I9GD) 055 oc ccccnsdccendiosncsdsenuenen 17,41 @B

Board of Trustees of the Univ. of Alabama v. Garrett,

No. 99-1260 (Fed. 21, SBOE) oo cccsccscscccsncccstos 18

Bonnie Briar Syndicate, Inc. v. Town of Mamaroneck,

721 N.E.2d 971 (N.Y. 1999), cert. denied, 529 U.S.

BODE CRBGE) oo on ccnccsccscassacéseaneaveenseusiaues 12

Chevron USA, Inc. v. Cayetano, 224 F.3d 1030 (9th

Che, BBGB) oc ccccscsscessstsesssnenepetyaaans 2, 3, 12

City of Columbia v. Omni Outdoor Advertising, 499

US. 365 (1991) ..ccccssccee PETTITT Te 6

City of Monterey v. Del Monte Dunes at Monterey,

L9., T26 UG. G67 (GPP) oo cccccvsscssesecvess 2, 9, 10

Clajon Production Corp. v. Petera, 70 F.3d 1566 (10th

Cle, 1956) oc cccccccccscnceuncdsensasensaeuusenes 12

Dodd v. Hood River County, 136 F.3d 1219 (9th Cir.

1998), cert. denied, 525 U.S. 923 (1998)............. 18

Dolan v. City of Tigard, 512 U.S. 374 (1994) ...2, 8, 9, 11

Eastern Enterprises, Inc. v. Apfel, 524 U.S. 498 (1998) ..9, 10

Ferguson v. Skrupa, 372 U.S. 726 (1963) ............4.. 6

Keystone Bituminous Coal Assoc. v. DeBenedictis, 480

US. GO (19G7) 0 oc cccccccestenivestedosbdneuscseees 7

Lochner v. New York, 198 U.S. 45 (1905)............ 6, 15

TABLE OF AUTHORITIES - Continued

Page

Manocherian v. Lenox Hill Hospital, 643 N.E.2d 479

(N.Y. 1994), cert. denied, 514 U.S. 1109 (1995)...... 12

Mugler v. Kansas, 123 U.S. 623 (1887)............-.... 6

Nebbia v. New York, 291 U.S. 502 (1934)............... 6

New Port Largo, Inc. v. Monroe County, 95 F.3d 1084

(11th Cir. 1996), cert. denied, 521 U.S. 1121 (1997) .... 12

Nollan v. California Coastal Commission, 483 U.S.

BES GION) occ cccsccvcsccccssnecssvciaes 2, 8, 9, 11, 12

Northern Illinois Home Builders Ass'n, Inc. v. County

of Du Page, 649 N.E.2d 384 (Ill. 1995)............. 12

Parker v. Brown, 317 U.S. 341 (1943).................. 6

Parking Assn. of Georgia, Inc. v. City of Atlanta, 450

CEB Bee Get. WOON i hse cn cencccsvanectecesnasiee 11

Parking Assn. of Georgia, Inc. v. City of Atlanta, 515

CEG, BIOS CI i bk hdc de sbscevicdecisndsccsindscs 11

Pennell v. San Jose, 485 U.S. 1 (1988) .............44.. 7

Pennsylvania Coal v. Mahon, 260 U.S. 393 (1922)....... 8

Railroad Commission v. Pullman, 312 U.S. 496 (1941) .... 19

Richardson v. City and County of Honolulu, 124 F.3d

1150 (9th Cir. 1997), cert. denied, 525 U.S. 871

CRBGED 6 i'n vinnie ccd cadavetsccosedccbnccddeudesecdate 12

San Remo Hotel v. City and County of San Francisco,

145 F.3d 1095 (9th Cir. 1998)...............00e eee 19

Santa Monica Beach, Ltd. v. Superior Court, 968 P.2d 993

(Cal. 1999), cert. denied, 526 U.S. 1131 (1999)...... 12, 19

iv

TABLE OF AUTHORITIES - Continued

Sinclair Oil Corp. v. County of Santa Barbara, 96 F.3d

401 (9th Cir. 1996), cert. denied, 523 U.S. 1059

| PRR yer erer rrr Tererrerre rie TT rr ee

Solid Waste Agency v. United States Army Corps of

Engineers, 121 S.Ct. 675 (2001) .................

Sylvia Dev. Corp. v. Calvert County, 48 F.3d 810 (4th

GO BUD ed ovcsccadncceocccnvendseassesebanase

Texas Manufactured Hous. Ass'n v. Nederland, 101

F.3d 1095 (5th Cir. 1996), cert. denied, 521 U.S.

BER CE a 650666 cb nas ckbedacscadeesenheceduhn

Trimen Development Co. v. King County, 877 P.2d

DOr COMI ROOD 65s one sacndenercdccnsisncareces

United States v. Carolene Products Co., 304 U.S. 144

ER iain ka sieae<escnee hh bee needeeuser es aw as

United States v. Lopez, 514 U.S. 549 (1995) ........

United States v. Morrison, 529 U.S. 598 (2000).....

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

TIGR Seen iioals PO hee :

Williamson County Regional Planning Comm. v.

Hamilton Bank, 473 U.S. 172 (1985).............

OTHER AUTHORITIES

John D. Echeverria, Does a Regulation that Fails to

Advance a Legitimate Governmental Interest Result

in a Regulatory Taking?, 29 Envtl. Law 853 (1999) ....

S. Keith Garner, “Novel” Constitutional Claims:

Rent Control, Means-Ends Tests, and the Takings

Clause, 88 Calif. L. Rev. 1547 (2000)............

C. Ford Runge, The Congressional Budget Office's

Regulatory Takings and Proposals for Change: One

Sided and Uninformed, 7 Envtl. L. & Prac. 5

CRNUE 6 hc ddedecknks cade thacscaamsenesenasuneses

Page

1

STATEMENT OF INTEREST OF AMICUS CURIAE

Under Supreme Court Rule 37.4, amicus curiae City

and County of San Francisco, joined by 45 California

cities (“the cities”), submit this brief in support of the

petition for a writ of certiorari. This case involves a

challenge based on the Takings Clause of the Fifth

Amendment to the right of democratically elected legisla-

tures to establish economic and social policy. Seeking to

reduce retail gasoline prices, the State Legislature of

Hawaii limited the rent oil companies may charge

dealer/lessees to use oil company-owned service stations.

The Ninth Circuit Court of Appeals found that federal

courts have the power to strike down such statutes as

“takings” where the court determines, based on its own

weighing of evidence presented in court, that the regula-

tion will not be effective.

Each of the amici cities is within the jurisdiction of

the Ninth Circuit, and is therefore subject to that court’s

decision in this case. Because the Ninth Circuit’s transfer

of power to formulate social and economic policy from

legislatures to the courts could have pervasive implica-

tions for local regulatory authority under the police

power, this Court should consider the cities’ viewpoint.

&

vy

INTRODUCTION

At issue in this case is which branch of government

determines land use policy: elected legislatures or courts.

Language in Agins v.-City of Tiburon, 447 U.S. 255 (1980)

has led to this controversy. In that case, the Court held

that courts are empowered to find that a regulation

effects a “taking” of property under the Takings Clause of

2 *

the Fifth Amendment if the regulation fails to “substan-

tially advance legitimate state interests.” Id. at 260. This

Court has provided reasonably clear signals as to the

meaning of this phrase. Nevertheless, numerous lower

court decisions show substantial disagreement as to the

scope of judicial review under the “substantially

advances” standard. This case presents an ideal oppor-

tunity for the Court to settle the meaning of this test and

provide guidance to the lower courts and government

agencies at every level engaged in the regulation of land

use.

In the two decades since Agins, this Court and the

lower federal and state courts have interpreted the “sub-

stantially advances” takings test to require either: (1)

deferential judicial review of land use regulations of

other branches of government - a test akin to “rational

basis”; or (2) nondeferential review - known as “height-

ened scrutiny.” The nondeferential standard of judicial

review arises from this Court’s decisions in Nollan v.

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

Dolan v. City of Tigard, 512 U.S. 374 (1994). In those cases,

the Court held that the judiciary may subject exactions of

physical iriterests in land imposed on individual permit

applications to “heightened scrutiny.” However, as this

Court recognized in City of Monterey v. Del Monte Dunes at

Monterey, Ltd., 526 U.S. 687, 702 (1999): “[W]e have not

extended the rough proportionality test of Dolan beyond

the special context of exactions — land-use decisions con-

ditioning approval of development on the dedication of

property to public use... . ”

Nevertheless, in Chevron USA, Inc. v. Cayetano, 224

F.3d 1030 (9th Cir. 2000), the Ninth Circuit went beyond

administratively imposed exactions to apply nondeferen-

tial review to rent control legislation. The Ninth Circuit

3

opinion conflicts with the interpretation of the “substan-

tially advances” standard by the other circuit courts. The

decision allows the federal court to discard any notion of

deference to the decisions of a legislative body as to the

efficacy of land use regulation. Accordingly, the Ninth

Circuit has expanded judicial power to second-guess the

decisions of legislatures far beyond any limits imposed

by the Constitution. Under Chevron, courts would become

legislatures, substituting their judgment as to wise and

effective land use policy for the decisions of elected rep-

resentatives. This frontal assault on representative

democracy and the Separation of Powers warrants review

by this Court.

¢

STATEMENT OF THE CASE

In response to escalating retail gasoline prices, in

1997 the State of Hawaii adopted Act 257 (“Act”). The Act

limits rents that oil companies may charge their retail gas

station dealer/lessees for company-owned stations to

15% of the dealer’s gross profit from gasoline sales. App.

3.1 The Act allows a dealer to transfer its leasehold inter-

est in the station to another dealer. According to plaintiff

Chevron, the Act creates the possibility that the dealer

assuming the lease would pay a premium to the assigning

dealer for the opportunity to lease the station at a below-

market rent. App. 4.

Chevron challenged the Act as a regulatory taking on

the ground that the Act does not “substantially advance a

legitimate state interest.” Applying heightened scrutiny

to the Act, the district court entered summary judgment

1 Citations to the decision of the Ninth Circuit are to the

Appendix to the Petition for a Writ of Certiorari.

4 —

for Chevron on its takings claim. App. 5. The district

court found that the Act would not “substantially

advances” the objective of reducing retail gasoline prices

because dealer/lessees would retain a “premium” from

assigning their leases, rather than pass on reduced rents

to consumers in the form of lower prices. App. 59, 66.

In a two to one decision, the Ninth Circuit concluded

that the district court correctly held that heightened scru-

tiny applied and would allow the court to inquire into the

efficacy of the Act. However, the two-judge majority

found that whether the Act substantially advanced a

legitimate state interest raised triable issues of fact. The

Ninth Circuit’s description of the issues to be “tried” in

the district court on remand illustrates the extent to

which the court assumed legislative powers:

The conflicting affidavits establish that genuine

issues of fact remain as to whether Act 257 will

result in lower gasoline prices. Whether, and to

what extent, Chevron will raise its wholesale

price of fuel to compensate for lost rent, and

whether, and to what extent, incumbent dealers

will capture the value of the capped rent in the

form of a premium upon transfer of the lease-

hold, remain as unanswered questions.

App. 17. The majority ordered the district court to hold

an evidentiary proceeding essentially aimed at predicting

whether the Act would serve its intended purpose to

reduce retail gasoline prices. App. 20.

Judge William Fletcher concurred in the judgment to

reverse the summary judgment for Chevron, but dissen-

ted on the instructions to the lower court on remand.

App. 28, 37-38. Judge Fletcher concluded that the proper

standard of review of the Act under the Takings Clause

was not whether the statute “substantially advances a

legitimate state interest,” but rather whether there is any

“reasonable” basis for the legislative judgment. App. 35.

anit adnan

5

Judge Fletcher went on to find that the Act can be held to

constitute a taking only if it has been established with

certainty that the law would result in the tenant captur-

ing a premium. Otherwise, Judge Fletcher wrote, a more

deferential reasonableness test should apply. App. 28,

37-38, 40.2 He punctuated his concurring opinion with a

warning that the majority was inviting a return to

Lochnerian substantive due process:

The question before the judiciary is not the

advisability of rent contro] laws but rather their

constitutionality. Ever since its retreat from eco-

nomic substantive due process at the end of the

1930s, the Supreme Court has essentially left it

to the other branches of government to decide,

in their political wisdom, whether to adopt rent

and price controls.

App. 41.

¢

REASONS FOR GRANTING THE

WRIT OF CERTIORARI

I. REVIEW BY THIS COURT IS NECESSARY TO

ESTABLISH A CLEAR STANDARD OF JUDICIAL

REVIEW OF LEGISLATIVE LAND USE REGULA-

TION.

The degree of judicial deference to legislative enact-

ments has fluctuated over time. Between 1897 and 1936,

the Court embraced a laissez faire economic philosophy,

explicitly holding that the Substantive Due Process

Clause limited the government’s power to secure the

2 While Judge Fletcher’s views as to the proper standard of

judicial review conform more closely to the decisions of this

Court than the majority’s, even Judge Fletcher’s

“reasonableness” test departs from the proper standard;

namely, the rational basis test. See footnote 4, infra.

6

general health, safety, and welfare to those regulations

(the “means”) that bore a substantial relation to a valid

public purpose (the “ends”). See, e.g., Mugler v. Kansas,

123 U.S. 623, 661 (1887). In the most extreme application

of laissez faire, Lochner v. New York, 198 U.S. 45 (1905)

struck down a state law designed to safeguard the health

of bakers by limiting their working hours. In Lochner, the

Court freely exercised its own judgment as to the appro-

priate policy for the health of bakers. See id. at 56-57.

Justice Oliver Wendell Holmes’ dissent in Lochner laid the

foundation for the eventual repudiation of Lochner’s free-

market philosophy: “Some of these laws embody convic-

tions or prejudices which judges are likely to share. Some

may not. But a Constitution is not intended to embody a

particular economic theory, whether of paternalism . . . or

of laissez faire... .” Id. at 75.

Beginning in 1934 and continuing for more than 50

years, the Court abandoned substantive due process.? In

United States v. Carolene Products Co., 304 U.S. 144 (1938),

the Court embraced the deferential standard of judicial

review of economic and social legislation:

3 See, e.g., Nebbia v. New York, 291 U.S. 502, 537 (1934) (“a

state is free to adopt whatever economic policy may reasonably

be deemed to promote public welfare, and to enforce that policy

by legislation adopted to its purpose.”); Ferguson v. Skrupa, 372

U.S. 726, 731-32 (1963) (“We refuse to sit as a ‘superlegislature to

weigh the wisdom of legislation’. . . . Whether the legislature

takes for its textbook Adam Smith, Herbert Spencer, Lord

Keynes or some other is no concern of ours.”); City of Columbia v.

Omni Outdoor Advertising, Inc., 499 U.S. 365, 377 (1991)

(“[D]etermination of ‘the public interest’ in the manifold areas

of government regulation entails not merely economic and

mathematical analysis but value judgment, and [Parker v. Brown,

317 U.S. 341 (1943)] was not meant to shift that judgment from

elected officials to judges and juries.”).

7

[T]he existence of facts supporting the legisla-

tive judgment is to be presumed, for regulatory

legislation affecting ordinary commercial trans-

actions is not to be pronounced unconstitutional

unless . . . it is of such a character as to preclude

the assumption that it rests on some rational

basis. . .

Id. at 152.

Since the demise of Lochnerian substantive due pro-

cess, this Court has generally reviewed land use regula-

tion under the Due Process Clause applying the

deferential “rational basis” test.4 Under that test, the

court must uphold the regulation unless no reason can be

conceived to support it. Id. The burden is on the party

challenging the regulation to prove that it constitutes an

arbitrary regulation of property rights. Id.

In Agins, however, in 1980, this Court set the stage

for a potentially different standard of judicial review of

land use regulation. In that case, the Court reintroduced a

means-ends test for land use regulation under the Tak-

ings Clause. The Court held that the application of a

zoning law to property effects a taking if the law “does

not substantially advance legitimate state interests.” 447

U.S. at 260. Since 1980, two different standards of judicial

review applicable to land use regulation have evolved

under the “substantially advance” prong of the Agins test.

4 See, e.g., Pennell v. San Jose, 485 U.S. 1, 11-12, 14 (1988)

(proper standard of judicial review of legislative rent control is

deferential); Keystone Bituminous Coal Assoc. v. DeBenedictis, 480

U.S. 470, 511 n. 3 (1987) (Rehnquist, C.J., dissenting) (“[O]ur

inquiry into legislative purpose is not intended as a license to

judge the effectiveness of legislation.”); Village of Euclid v.

Ambler Realty Co., 272 U.S. 365, 388 (1926) (“If the validity of the

legislative classification for zoning purposes be fairly

debatable, the legislative judgment must be allowed to

control”).

8

Nondeferential review of the type employed here by

the Ninth Circuit, known as “heightened scrutiny,” gener-

ally applies to “exactions” imposed on a case-by-case

basis - where the government conditions approval on the

owner’s dedication of land to the public to offset the

impact of the proposed project. Nollan, 483 U.S. at 841;

Dolan, 512 U.S. at 385. Heightened scrutiny imposes the

burden on the government to “make some sort of individ-

ualized determination that the required dedication is

related both in nature and extent to the impact of the

proposed development.” Dolan, 512 U.S. at 391. Height-

ened scrutiny arises from the Court’s concern that, in

cases of unique, discretionary, adjudicatory exactions

imposed on individual applications, the danger exists

that the public agency might improperly leverage its

police power by requiring an individual property owner

to bear more than its share of responsibility for the bur-

dens caused by the development. Nollan, 483 U.S. at 841;

Dolan, 512 U.S. at 385. :

The Court has also reasoned that heightened scrutiny

is appropriate for administratively imposed exactions of

real property interests because such regulations resemble

_physical takings. See Nollan, 483 U.S. at 831; see also Dolan,

512 U.S. at 385 (“The sort of land use regulations dis-

cussed in [Euclid, Pennsylvania Coal v. Mahon, 260 U.S. 393

(1922), and Agins] . . . differ in [that] the conditions

imposed [in Dolan] were not simply a limitation on the

use petitioner might make of her own parcel, but a

requirement that she deed portions of the property to the

city.”).

In contrast, this Court has indicated that a deferential

standard continues to apply to legislative land use regu-

lations that are generally applicable because the risk of

the use of the police power to exact unconstitutional

conditions is not present. Nollan, 483 U.S. at 834-35; see

9

also Dolan, 512 U.S. at 385 (courts do not apply height-

ened scrutiny to regulations that “involve[] essentially

legislative determinations classifying entire areas of the

city”) The Court implicitly reasoned that classes of prop-

erty owners have greater power to influence land use

policy in the legislative process and thus require less

protection from government overreaching than individ-

ual property owners. See id. However,-the Court has not

directly decided whether deferential review applies to

legislative land use regulations. Recent decisions of this

Court in Eastern Enterprises, Inc. v. Apfel, 524 U.S. 498

(1998) and Del Monte Dunes, 526 U.S. 687, while clearly

suggesting that deferential review is appropriate for leg-

islative regulations, nevertheless have left this question

open.

Eastern Enterprises involved the constitutionality of

the Coal Industry Retiree Health Benefit Act. The Act

required coal mining companies to pay money into pen-

sion funds for the benefit of their former employees. A

four-justice plurality held that the Act worked a taking

because it imposed an extreme, retroactive financial bur-

den on the claimant. 524 U.S. at 529-37.

Significantly, a majority of the justices rejected the

notion that the “substantially advances” prong of Agins

enunciated a freestanding takings test outside the

Nollan/Dolan context of administratively compelled dedi-

cations of land. In Eastern Enterprises, five justices indi-

cated that the deferential substantive due process test,

rather than a takings analysis, should be applied to a law

requiring the payment of money. 524 U.S. at 545-46 (Ken-

nedy, j., concurring and dissenting), 554-58 (Breyer, J.,

dissenting, joined by Stevens, Souter, and Ginsburg, JJ.).

As Justice Kennedy stated, the wisdom of governmental

action that does not require the dedication of possessory

interests in real property is more appropriately analyzed

10

under “general due process principles rather than under

the Takings Clause.” Id. at 545 (Kennedy, J., concurring

and dissenting); see also John D. Echeverria, Does a Regula-

tion that Fails to Advance a Legitimate Governmental Interest

Result in a Regulatory Taking?, 29 Envtl. Law 853, 866-76

(1999); S. Keith Garner, “Novel” Constitutional Claims: Rent

Control, Means-Ends Tests, and the Takings Clause, 88 Calif.

L. Rev. 1547, 1561-64 (2000).

In Del Monte Dunes, this Court observed that it had

thus far applied heightened scrutiny only in “the special

context of exactions.” 526 U.S. at 702. The Court held that

heightened scrutiny was not intended to apply to denials

of individual development applications. Id. at 702-03; see

also id. at 723 (Scalia, J., concurring), 733 (Souter, J., dis-

senting, joined by O’Connor, Ginsburg, and Breyer, JJ.).

The Court allowed the jury to determine whether the City

of Monterey’s conduct “substantially advances legitimate

public interests” under the Takings Clause only because

the city did not object to a jury instruction allowing that

question to be put to the jury. Id. at 721-22. However, the

Court reserved the question of whether means-ends

review under the Takings Clause imposes a different

standard of review for generally applicable land use reg-

ulation than substantive due process imposes on other

police power regulations. Id. at 722.

The Court also distinguished between issues of fact

in individual cases and issues of a “city’s general land-

use ordinances or policies.” In the former case, the Court

held that juries may resolve the question applying a

nondeferential standard; in the latter case, the Court

stated that the inquiry “might well fall within the prov-

ince of the judge” applying a more deferential standard.

Id. at 721-22.

In yet a third case addressing the scope of the “sub-

stantially advances” test, only two justices of this Court

11

expressed the view that heightened scrutiny should be

expanded to apply to legislation. In Parking Assn. of Geor-

gia, Inc. v. City of Atlanta, 450 S.E.2d 200 (Ga. 1994), the

Supreme Court of Georgia held that landscaping and

curb requirements for development established by a zon-

ing ordinance did not trigger heightened scrutiny

because the regulations in question were legislative. This

Court denied certiorari. 515 U.S. 1116 (1995). However,

Justices Thomas and O’Connor dissented from the denial

of certiorari, urging an expansive reading of Dolan:

It is hardly surprising that some courts have

applied Tigard’s rough proportionality test even

when considering a legislative enactment. It is

not clear why the existence of a taking should

turn on the type of governmental entity respon-

sible for the taking.

Id at 1117-18.5 The remaining justices did not join in this

opinion.

Conflict among the decisions of the circuit courts is

grounds for granting certiorari. Supreme Court Rule 10.

Despite this Court’s clear indication that legislative land

use regulations should not receive heightened scrutiny,

the lower federal courts and the state courts have issued

conflicting decisions as to the scope of heightened scru-

tiny under Nollan/Dolan. The cases addressing the appli-

cation of the “substantially advances” test to generally

applicable regulation occupy the full spectrum from

> The dissenting opinion apparently did not consider the

Court’s rationale for the adjudicatory-legislative distinction

expressed in Nollan and Dolan; namely, that the danger of the

government's unfairly leveraging its police power is far greater

in cases of individual property owners seeking approval of a

single development than in instances of regulation applying

across the board to an entire class of similarly situated property

owners. See Nollan, 483 U.S. at 834-35; Dolan, 512 U.S. at 385.

12

highly deferential review to heightened scrutiny. Compare

New Port Largo, Inc. v. Monroe County, 95 F.3d 1084, 1088

(11th Cir. 1996), cert. denied, 521 U.S. 1121 (1997) (height-

ened scrutiny not applicable to zoning regulation); Texas

Manufactured Hous. Ass'n v. Nederland, 101 F.3d 1095, 1105

(5th Cir. 1996), cert. denied, 521 U.S. 1112 (1997) (rejecting

application of Nollan to legislation regulating location of

manufactured homes); Clajon Production Corp. v. Petera, 70

F.3d 1566, 1578 (10th Cir. 1995) (heightened scrutiny inap-

plicable to hunting license scheme because regulation not

a “physical taking or its equivalent”); Bonnie Briar Syndi-

cate, Inc. v. Town of Mamaroneck, 721 N.E.2d 971, 974-75

(N.Y. 1999), cert. denied, 529 U.S. 1094 (2000) (heightened

scrutiny does not apply to downzoning); Santa Monica

Beach, Ltd. v. Superior Court, 968 P.2d 993, 1001-02 (Cal.

1999), cert. denied, 526 U.S. 1131 (deferential standard

applies to land use regulations that are “generally appli-

cable through legislative action”) with Richardson v. City

and County of Honolulu, 124 F.3d 1150, 1165-66 (9th Cir.

1997), cert. denied, 525 U.S. 871 (1998) (applying height-

ened scrutiny to legislative rent control); Chevron, 224

F.3d 1030, 1033-34 (same); Northern Illinois Home Builders

Ass'n, Inc. v. County of Du Page, 649 N.E.2d 384, 389 (Ill.

1995) (heightened scrutiny applicable to legislative devel-

opment impact fee); Trimen Development Co. v. King

County, 877 P.2d 187, 194 (Wash. 1994) (same); Man-

ocherian v. Lenox Hill Hospital, 643 N.E.2d 479, 482 (N.Y.

1994), cert. denied, 514 U.S. 1109 (1995) (applying height-

ened scrutiny to rent control legislation).

This Court has not definitively resolved the scope of

the “substantially advances” prong of the Agins takings

test, particularly as it applies to generally applicable land

use regulation. The Court should grant review in this case

to establish a uniform standard of judicial review of

13

legislative zoning and other land use regulations under

the Takings Clause.®

Il. THE COURT SHOULD GRANT REVIEW TO PRE-

SERVE THE POWERS OF ELECTED LEGISLA-

TURES TO DECIDE THE WISDOM AND

EFFICACY OF LAND USE REGULATION.

Immediate review of the Ninth Circuit’s decision is

imperative for amici cities. The cities have enacted scores

of laws regulating land use to promote the general health,

safety, and welfare and continue to enact such regulations

daily. The Ninth Circuit decision invites legal challenges

to every one of these regulations as a “taking.”

The Ninth Circuit’s decision allows aggrieved land-

owners to avoid the political process entirely. If the deci-

sion stands, courts could be permitted to assume the role

of legislatures, and the public would be denied a voice in

matters that have direct and immediate impact on their

safety, property values, economic welfare, and quality of

life. The framers of the Constitution could not possibly

have intended this result.7 This Court should therefore

© On January 29, 2001, Greenspring Racquet Club filed a

petition for certiorari requesting that the Court adjudicate the

same issue presented here; namely, the proper standard of

judicial review of a generally applicable zoning ordinance

under the “substantially advances” prong of the Agins test.

Greenspring Racquet Club, Inc. v. Baltimore County, Maryland, No.

00-1012. In that case, in upholding a zoning ordinance limiting

the height and floor-area ratio of buildings against a takings

challenge, the Fourth Circuit deferred to the legislature. The

filing of the petition in Greenspring is further evidence that the

scope of the “substantially advances” standard is an important

and unsettled issue warranting immediate review by this Court.

7 The Chevron majority noted that its decision should be

narrowly applied and that it “save[s] for another day the

14

grant the petition and establish a uniform standard of

review of the efficacy of land use regulation that pre-

serves traditional deference to the policy decisions of

legislative bodies.

A. The Ninth Circuit Decision Conflicts with Rep-

resentative Democracy.

Whether a price control such as that at issue in Chev-

ron will have its intended effect in a complex industry is

usually the subject of lengthy legislative committee hear-

ings, in which economists, consumer advocates, dealers,

and oil companies would present divergent views on the

question. Following the gathering of evidence, demo-

cratically elected legislators would weigh the opinions of

their constituents affected by the proposed regulation

and their respective experts to fashion a policy that will

promote the general health, safety, and welfare.

Predicting the impact of a price control in a complex

business such as the motor fuel industry is quintessen-

tially a legislative policy function. The courts have no

greater right to legislate this policy than they have in

dictating zoning decisions, safety requirements for autos,

or the proper procedure for pasteurizing milk.

Chevron raises the potential for abuse of judicial

power with regard to all government regulation, not

merely land use regulation. The deferential rational basis

question of whether the ‘substantially advances’ test applies

outside the context of rent contro] statutes that permit the

capture of a premium.” App. 12 n. 4. However, the court’s

reasoning that legislatures cannot be entrusted to make policy

with respect to the economic relations between commercial

landlords and tenants is easily expanded to apply to all social

and economic regulation that affects the value of assets,

including all land use regulation.

15

test, historically applicable to social and economic legisla-

tion, would become obsolete. The Ninth Circuit's pro-

posal that the federal courts would conduct their own

evidentiary hearing to predict the effects of legislation,

see App. 15-17, takes a page directly from Lochner.

B. The Ninth Circuit Decision Will Prevent Land

Use Planning and Reduce Property Values.

The prospect of defending every land use policy in

court will inevitably have a chilling effect on the entire

planning process. Governments will be less apt to experi-

ment with new initiatives to respond to rapidly changing

conditions. More social and economic problems will be

unaddressed. All communities will become more haphaz-

ard, congested, and unsafe. Ultimately, the quality of life

for all would suffer. What may promote the short-term

economic interest of a few property owners will cause

immeasurable injury to a public that relies on local gov-

ernment to create well-planned communities.8

For example, San Francisco and amici cities enact

regulations designed to reduce traffic congestion and pre-

serve open space. The cities have instituted programs to

retain affordable housing for low-income households, the

elderly, and the disabled. They limit the location of liquor

stores and pornography shops to protect children and

reduce crime. The cities regulate the size and design of

® At the same time that land use regulations deny property

owners unfettered prerogatives to do what they will with their

property, these regulations enhance the quality of communities

and make all property more valuable. See, e.g., C. Ford Runge,

The Congressional Budget Office's Regulatory Takings and Proposals

for Change: One Sided and Uninformed, 7 Envtl. L. & Prac. 5 (1999)

(documenting the “givings” from broadly applied land use

regulation that enhance property values).

\

:

:

16

buildings and billboards to preserve neighborhood char-

acter. These zoning regulations preserve property values

and create livable communities in which to work and

raise families. All of these programs would be at risk

under the Ninth Circuit’s nondeferential approach to

judicial review of land use legislation.

C. The Ninth Circuit Decision Will Promote Inef- |

ficiency and Chaos in Land Use Policymaking.

If courts are to be the final arbiter of land use policy,

the enactment of a land use policy by a legislature will

mark only the beginning of the decision-making process.

The validity of any policy could remain unsettled for

years as challenges to the legislation wind their way

through the courts. Removing certainty as to the validity

of land use regulation will chill investment in projects

involving real property.

Moreover, the Ninth Circuit’s nondeferential stan-

dard of judicial review will flood the courts with lawsuits

by property owners, as virtually any zoning regulation

would be subject to challenge as a taking. The govern-

ment could be compelled to defend thousands of land use

laws in evidentiary proceedings, at monumental cost to

the taxpayers.

Nor do the courts have the institutional competence

to study and mediate between competing interests in

land use - a function that is the essence of law making. A

court confronted with a complex issue of land use plan-

ning is no substitute for a local legislative agency that can

see the larger picture in the jurisdiction or region. Land

uses are interdependent. Effective land use planning

requires a broader perspective than one isolated case at

one point in time. Indeed, land use regulation is no

different than other exercises of the police power that

mediate private economic interests and other socially

17

important goals. Decisions as to the most effective land

use policies are best made by legislatures taking~the

initiative to identify problems, receive evidence from

affected parties, debate the advantages of alternative pol-

icies, and compromise in order to reach a majority deci-

sion. A court with hundreds of cases on its docket is not

the proper forum to make land use policy.

D. The Ninth Circuit Decision Will Shift Land Use

Planning to Federal Courts Unfamiliar with

Local Conditions.

The Ninth Circuit decision will break down the Sep-

aration of Powers at both the federal and state levels, but

this problem would be particularly acute where federal

courts are involved. Federal courts are not equipped to

assume the planning function now performed by state

and local legislative agencies. Zoning and planning

requires the careful weighing of individual property

rights against public values within a local context. Fed-

eral judges rarely come from the communities in which

land use disputes before them arise. Thus, federal courts

cannot be expected to-develop the thorough appreciation

of local conditions and interests necessary to engage in

effective land use planning.

For example, there is no comparison between condi-

tions prevailing in urbanized cities like San Francisco and

the patterns of development in Silicon Valley or the rural

communities of California’s Central Valley. Yet, the Ninth

Circuit would have federal judges unfamiliar with local

conditions dictating land use rules to each of these div-

erse communities. Federal judicial policymaking simply

does not work in the realm of land use. Not surprisingly,

with the exception of the Ninth Circuit, federal courts

18

have wisely declined to usurp the roles of local zoning

boards and state courts.9

Indeed, the Ninth Circuit decision runs counter to the

pronounced trend away from federal preemption of state

and local regulation. In a series of recent decisions, this

Court has restricted the federal role in economic and

social regulation, indicating that such matters are within

the purview of the state and local governments. For

example, in holding that the Army Corps of Engineers

has no regulatory authority to protect migratory birds

using non-navigable bodies of water, the Court stated:

[T]he States’ [retain] traditional and primary

power over land and water use. (“[RJegulation

of land use [is] a function traditionally per-

formed by local governments”). . . . Congress

chose to “recognize, preserve, and protect the

primary responsibilities and rights of States

... to plan the development and use... of land

and water resources. .

Solid Waste Agency v. United States Army Corps of Engi-

neers, 121 S.Ct. 675, 684 (2001) (citations omitted). In areas

such as disability rights, gender discrimination, and gun

control, this Court has returned control of functions pre-

viously centralized in the federal government to the

states.1°

9 See, e.g., Dodd v. Hood River County, 136 F.3d 1219, 1230

(9th Cir. 1998), cert. denied, 525 U.S. 923 (1998) (“The Courts of

Appeals were not created to be ‘the Grand Mufti of local zoning

_ boards’ ”); Sylvia Dev. Corp. v. Calvert County, 48 F.3d 810, 828-29

(4th Cir. 1995) (“Resolving the routine land-use disputes that

inevitably and constantly arise among developers, local

residents, and municipal officials is simply not the business of

the federal courts.”)

10 See, e.g., Board of Trustees of the Univ. of Alabama v. Garrett,

No. 99-1240 (Feb. 21, 2001) (barring recovery by state employees

19

The ripeness and abstention doctrines constitute

additional grounds for reserving land use disputes for

resolution by the state courts. These sound policies are

designed to preserve the discretion of local legislative

agencies and local courts to regulate the use of land. See

Williamson County Reg’l Planning Comm’n v. Hamilton

Bank, 473 U.S. 172, 192-95 (1985) (takings claimant must

seek compensation in state court under state procedures

before a federal takings claim arises); Railroad Commission

v. Pullman, 312 U.S. 496, 498 (1941) (land use

planning is sensitive area of social policy that federal

courts should leave to state courts). These doctrines

insure that land use disputes involving state and local

governments are heard and determined in the state courts

under state law in part because local agencies and courts,

not federal courts, have the greatest familiarity with local

conditions.1!

based on state’s failure to comply with federal ADA); United

States v. Morrison, 529 U.S. 598 (2000) (federal law proscribing

violence against women inapplicable to state claim of sexual

harassment); United States v. Lopez, 514 U.S. 549 (1995) (striking

down federal regulation of guns in schools).

1) Although it is settled law in California that heightened

scrutiny does not apply to land use legislation, see Santa Monica

Beach, Ltd. v. Superior Court, 968 P.2d at 1001-02 (deferential

standard applies to land use regulations that are “generally

applicable through legislative action”), the Ninth Circuit

decision nevertheless could have an immediate impact on

California government agencies. The Ninth Circuit has flouted

Williamson's state compensation requirement by allowing

takings cases to circumvent the state courts. In Sinclair Oil Corp.

v. County of Santa Barbara, 96 F.3d 401, 407 (9th Cir. 1996), cert.

denied, 523 U.S. 1059 (1996) and San Remo Hotel v. City and

County of San Francisco, 145 F.3d 1095, 1102 (9th Cir. 1998), the

Ninth Circuit held that a facial challenge to regulation on the

ground that it does not “substantially advance legitimate state

20

Here, rent control is a quintessential state and local

issue. By adjudicating Chevron’s takings claim, the Ninth

Circuit has improperly federalized this issue.

,

~~

CONCLUSION

The petition for a writ of certiorari should be

granted.

Dated: February 23, 2001

Respectfully submitted,

Louise H. RENNE

City Attorney

ANDREW W. SCHWARTZ

Deputy City Attorney

Counsel of Record

By ANDREW W. SCHWARTZ

Attorneys for Amicus Curiae City

County of San Francisco

interests” is ripe in federal court even though the claimant has

not sought compensation in state court.