Reply Brief — Torromeo v. Town of Fremont, New Hampshire

Supreme Court, U.S.

FILED

a MAY 15 2003

et | OFFICE OF THE CLERK

No. 02-1507

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In The

Supreme Court of the United States

HENRY TORROMEO AND MDR CORPORATION,

Petitioners,

Vv.

TOWN OF FREMONT,

Respondent.

On Petition for Writ Of Certiorari To

The Supreme Court of New Hampshire

PETITIONERS’ REPLY TO BRIEF IN OPPOSITION

DUANE J. DESIDERIO SUMNER F. KALMAN

JON W. LUTHER Counsel of Record

THOMAS J. WARD THEA S. VALVANIS

NATIONAL ASSOCIATION OF 147 MAIN STREET, BOXx 988

HOME BUILDERS PLAISTOW, NH 03865

1201 15™ STREET, NW ; (603) 382-4003

WASHINGTON, D.C. 20005

(202) 266-8200

Attorneys for Petitioners

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QUESTIONS PRESENTED

Liability for_a Fifth Amendment Taking: When a

state’s highest court declares a growth control regulation

“invalid ab initio,” but a town had enforced that illegal

regulation in excess of its police powers against a

specific piece of property, is the town liable to the

affected property owner for a taking because it has failed

to “substantially advance legitimate state interests’?

(Agins v. City of Tiburon, 447 U.S. 255, 260 (1980)).

Liability for a Fifth Amendment Taking:

Alternatively, when a state’s highest court declares a

growth control regulation “invalid ab initio” but a town

had enforced that regulation against a specific piece of

property, should that illegal municipal conduct be

considered under the “character of government action”

factor set forth in Penn Central Transp. Co. v. City of

New York, 438 U.S. 104, 124 (1978), as one element to

determine whether the town is liable for a taking?

Remedy for a Fifth Amendment Taking: Does the

“self-executing character” of the Takings Clause compel

the payment of “just compensation” to an aggrieved

property owner for the time period in which a growth

control regulation, declared “invalid ab initio” by a

state’s highest court, was enforced against a specific

piece of property? (First English Evangelical Lutheran

Church v. County of Los Angeles, 482 U.S. 304, 315

(1987)).

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED. .............cceeceeccceeeceeeeeeeeeeeeees i

TABLE OF AUTHORITIES. ...0............ccc cece eee eeeeees ee il

1. The Town’s Argument, That The Invalid Growth

Control Ordinance Was Never Challenged On A

Constitutional Basis But Was Merely Procedurally

Defective, Is Meritless .....................ccccccccceceeeeeeeeeeeees l

2. The Court Must Grant Certiorari To Clarify

Whether Landowners Must Litigate The Validity Of

A Land-Use Regulation First, Before Government

Action Can Be Considered A Fifth Amendment

IEE sccecinscotnssapiitateteniccibibaiiliampeaanpaciaiicsaunndasatentaitidebiids 3

3. Petitioners Did Not “Waive” The Penn Central

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TABLE OF AUTHORITIES

CASES Page

Agins v. City of Tiburon, 447 U.S. 255 (1980) .....ccseseseeeeees i

Ali v. City of Los Angeles, 77 Cal. App. 4" 246 (2000) ........ 6

Armstrong v. United States, 364 U.S. 40 (1960) ..............000- 3

Brown v. Legal Found. of Washington, 538 U.S. ---,

ai SGD ns ssicsnicensnsunecsaevicebersnsenveninnevundinvennes 1,8

First English Evangelical Lutheran Church v.

County of Los Angeles, 482 U.S. 304 (1987) ..........cc0ccee i, 4

Healing v. California Coastal Comm’n,

MR PU ELBE IGIG) sssscsnsecsnscsscencsscscsnssvesssussvensnsss 6

Landgate, Inc. v. California Coastal Comm’n,

953 P.2d 1188 (Cal. 1998), cert. denied,

I ceuetibmobennaes 4,5

Lucas v. South Carolina Coastal Council,

ce dnandntibandaandalbies 6-7

Manor v. Reisma, 2003 WL 1224248, No.

C.A. PC 89-2447 (R.I. Super. Feb. 24, 2003).............cccccceee 7

Nollan v. California Coastal Comm’n,

a lis betes sodaledi I

Palazzolo v. Rhode Island, 533 U.S. 606 (2001) .........0...00. 3

2 |

iV

Penn Central Transp. Co. v. City of New York,

le ee veiibisirtn nica acedsaiincca eicncavaspadunniiteiaomaiiees 1

Rock Island, A. & L.R. Co. v. United States,

Es Fe BE ie ieinencinceniciaenisimendian 2

San Diego Gas and Elec. Co. v.

City of San Diego, 450 U.S. 621 (1981) ...cceeeeeeessesseessceeeees 6

Tahoe-Sierra Preservation Council v. Tahoe Regional

Planning Agency, 535 U.S. 302 (2002) ...........:ccccssessreeeeees 1-2

United States v. Riverside Bayview Homes,

CP Wak AERO Aiitiaieneeneinic i,2

OTHER

Jon Lycett, Landgate, Inc. v. California Coastal Commission—

Why Temporary Takings Law is “Screwed Up,”

7 Hastings W-N.W. J. Envtl. L. & Pol’y 55 (2000) .............. 6

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Petitioners Henry Torromeo and MDR Corporation

respectfully file this Reply to the Brief in Opposition (“Opp.

Br.”) of Respondent Town of Fremont (the “Town’”).

The Town argues that certiorari should not be granted

for three reasons. Each lacks merit.

1. The Town’s Argument, that the Invalid Growth

Control Ordinance was Never Challenged on a

Constitutional Basis but was Merely Procedurally

Defective, is Meritless.

To dissuade this Court from granting certiorari, the

Town argues that “this is not a case where the Growth Control

Ordinance was challenged on constitutional grounds.” Opp. Br.

at 2. The Town is wrong. Petitioner argued in the New

Hampshire courts that the illegal Ordinance was

“unconstitutional per se” because it was “invalid, ab initio.” —

(App. 3)

In any event, when the New Hampshire Supreme Court

ruled that liability to pay just compensation depends on a

_ finding that “the ordinance is unconstitutional and constitutes a

taking” (App. 6), it misconstrued the Fifth Amendment and this

Court’s cases for two reasons. First, even constitutional or

otherwise valid laws can trigger takings liability when they are

applied and “go too far.” See Brown v. Legal Found. of

Washington, 538 U.S. ---, 123 S.Ct. 1406, 1417 (2003) (one of

the “conditions” imposed by the Fifth Amendment is that a

taking must be for a valid “public use”). Second, this Court has

never hinged takings liability on the constitutionality of an

ordinance itself, but rather typically conducts a takings analysis

on an as-applied, ad hoc basis. See Tahoe-Sierra Preservation

Council v. Tahoe Regional Planning Agency, 535 U.S. 535 U.S.

302, 320 (2002) (takings claimants face a steep “uphill battle”

in arguing that the “mere enactment” of a law is per se

unconstitutional); United States v. Riverside Bayview Homes,

474 U.S. 121, 126 ((1985) (‘the mere assertion of regulatory

jurisdiction does not constitute a regulatory taking”’).

To further impede this Court’s review, the Town insists

that “[nJothing in the Court’s taking jurisprudence suggests that

a procedural defect in the adoption of a growth control

ordinance...gives rise to takings liability.” Opp. Br. at 4. We

take strong issue with the Town’s characterization that the |

illegal Ordinance suffered from an innocuous procedural

defect,’ and its reasoning provides no help. Nothing in this |

Court’s jurisprudence even hints that enforcement of a law that |

fails to satisfy mandated legislative requirements abBlves a

municipality from takings liability.

A landowner would be audacious to suggest that his

good faith but "merely procedural" non-compliance with land-

use regulations must be ignored and forgiven. Yet here, where

the Town conveniently acts as both player and referee, it seeks

Fifth Amendment sanctuary for what it deems a procedural

technicality in adopting and enforcing a law that derogates

mandated legislative requirements. "Men must turn square

corners when they deal with the Government." Rock Island, A.

& L.R. Co. v. United States, 254 U.S. 141, 143 (1920) (Holmes,

J.). That rule must be recipricol; government, too, must turn

square corners when it regulates property, or else it runs the risk

'In truth, the Town illegally adopted a growth control ordinance, |

deprived its citizens an opportunity to be heard on the important issue '

of growth management, and proceeded to enforce that invalid law

against Petitioners. See Pet. 6-7. The illegality was so egregious that

the New Hampshire courts found the Ordinance “invalid, ab initio.”

See Pet. 7-8. These facts are uncontested, and we find it curious that

Respondent ignored them entirely when it decided to restate the

Questions Presented. See Opp. Br. at i.

ERT eer Nun mMnmemE rtesrel EPT |

of "forcing some people alone to bear public burdens which, in

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

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

(1960)). Just as there is no "merely procedural" exception to

excuse a builder's non-compliance with land-use restrictions,

there can be no "merely procedural” exception allowing

government to execute an end-run around the Takings Clause.

In the end, it matters little to a property owner whether

the government takes his land by applying a substantively

unconstitutional law, or one that is “merely” defective

procedurally. It is “the effects produced by a particular

regulation [that] inform the takings analysis” (Palazzolo v.

Rhode Island, 533 U.S. 606, 634 (2001) (O’Connor, J.,

concurring) (emphasis supplied)—not whether government

committed a mistake. And this reasoning is correct, because

“the right to build on one's own property—even though its

exercise can be subjected to legitimate permitting

requirements—cannoi remotely be described as a governmental

benefit." Nollan v. California Coastal Comm'n, 483 U.S. 825,

833 (1987).

In short, the Town’s failure to follow mandatory

Statutory procedures is no reason to allow it to escape the

Takings Clause.

2. The Court Must Grant Certiorari to Clarify

Whether Landowners Must Litigate the Validity

of a Land-Use Regulation First, Before

Government Action can be Considered a Fifth

Amendment Taking.

To dissuade this Court from granting certiorari, the

Town argues: “Thus, the issue of a taking could not arise until

the [New Hampshire courts] had ruled on that issue.” Opp. Br.

at 6. But this Court has ruled the exact opposite:

It would require a considerable extension of these

decisions to say that no compensable regulatory

taking may occur until a challenged ordinance

has ultimately been held invalid.

First English Evangelical Lutheran Church v. County of

Los Angeles, 482 U.S. 304, 320 (1987).

As if the Questions Presented in the Petition were not

enough, the Town’s Opposition Brief now throws in another

issue that begs for this Court’s resolution. For the first time, in

its Opposition Brief the Town now contends that a taking only

could have occurred after the New Hampshire Supreme Court

summarily affirmed that the Ordinance was “invalid, ab initio.”

Opp. Br. 6, Section II. From the Town’s perspective, no takings

claim could have accrued when it actually enforced and applied

the illegal Ordinarice to deny Petitioner’s their permits. Thus,

the Town argues that Petitioners’ pursuit of litigation up to the

New Hampshire Supreme Court over the validity of the illegal

Ordinance was a “normal delay” in the permit approval process.

First English, 482 U.S. at 321. However, the “normal delays”

suggested by First English pertain to ordinary administrative

remedies in the land-use arena, specifically, “obtaining building

permits, changes in zoning ordinances, variances, and the like

which are not before us.” Id. (emphasis supplied.)

Now that the Town “likens” state court litigation to

“normal” administrative delay, the majority opinion of the

California Supreme Court in Landgate, Inc. v. California

Coastal Comm’n, 953 P.2d 1188, 1195 (Cal. 1998), cert.

denied, 525 U.S. 876 (1998), has been- exported eastward,

creeping into New Hampshire. In Landgate, a divided 4-3

panel decided that a property owner’s pursuit of litigation in the

state court system, challenging the validity of regulatory action,

was merely a “normal part” of the development process and

therefore was not a temporary taking under the Fifth

Amendment.” _ Three dissenting justices, in two separate

dissenting opinions, voiced sharp criticism against that result.

Two of the Landgate dissenters pointed out that Justice Stevens,

in his own First English dissent, “articulated the precise

argument...that litigation over the validity of a land-use

restriction is simply a ‘normal delay’ in the permit approval

process and, therefore, cannot give rise to a temporary

taking”—and moreover, that the majority opinion in First

English “considered Justice Stevens’ argument and rejected it.”

953 P.2d at 1206 (emphasis in original) (Justices Chin and

Baxter, dissenting). A third dissenting justice in Landgate also

rejected the notion that litigation over the validity of land-use

decisions is a “normal” part of the process. He declared the

Landgate majority’s opinion “tendentious,” and thought “[t]he

precise issue has thus been considered and rejected by the

[United States Supreme Court].” Jd. at 1209-10 (Justice Brown,

joined by Justice Baxter, dissenting). i

Does the “normal delay” exception to takings liability

really encompass litigation over the validity of a land-use

regulation up and through the state court system? Respondent

thinks yes. But the First English majority thought no, while

dissenting Justice Stevens thought yes. The Landgate majority

thought yes. And three Landgate dissenters thought no. Justice

Brennan, whose writings are so influential in this area, would

"The Landgate majority ruled: “[A] judicial determination of the

validity of certain preconditions to development is a normal part of

the development process, and the fact that a developer must resort to

such a determination [in the courts] does not constitute a per se

temporary taking.” 953 P.2d at 1203 (emphasis in original).

have thought no.’ Lower court judges, understandably, are

utterly confused.* Whatever the law is, this Court must state it.

If litigation over the validity of a land-use law is a

“normal” part of the approval process, the law is as the Town

and Landgate would have it, then when would a taking ever

arise? Under that Carrollesque scenario, compensation would

only become due after (1) litigation in state court over the

validity of an ordinance is consummated, (2) the court

invalidates that particular ordinance, (3) government ignores

that court order, running the risk of contempt, and (4)

government continues to apply that regulation after its judicial

invalidation. Application of the Takings Clause would thereby

"amount[] to a test of whether the [regulatory agency] has a

stupid staff," (Lucas v. South Carolina Coastal Council, 505

*See San Diego Gas and Elec. Co. v. City of San Diego, 450 U.S.

621, 661 n.26 (1981) (Brennan, J., dissenting) (liability to pay just

compensation for the time during which an invalid regulation is in

effect “encourage[s] municipalities to err on the constitutional side of

police power regulations, and to develop internal rules and operating

procedures to minimize overzealous regulatory attempts’’).

‘See, e.g., Jon Lycett, Landgate, Inc. v. California Coastal

Commission—-Why Temporary Takings Law is “Screwed Up,” 7

Hastings W-N.W. J. Envtl. L. & Pol’y 55 (2000). The California

cases alone are incoherent. Other decisions there have not followed

the approach taken by Landgate. See, e.g., Ali v. City of Los Angeles,

77 Cal. App. 4" 246, 254-55 (2000) (affirming finding of regulatory

taking requiring payment of compensation; refusing to apply

Landgate, because it is “not a normal’ delay in the process [where

agency action] is so unreasonable from a legal standpoint as to be

arbitrary”); Healing v. California Coastal Comm’n, 22 Cal. App. 4"

1158, 1171 n.7 (1994) (“summarily” rejecting the Coastal

Commission’s contention that delay suffered by plaintiff is “normal”

and holding that the Commission “may be liable for a regulatory

taking even if it ultimately issues a permit”).

7

U.S. 1003, 1025 n. 12 (1992)), because government could easily

circumvent the compensation remedy through "an exercise in

cleverness and imagination." Nollan y. California Coastal

Comm'n, 483 U.S. 825, 841 (1987).

“Framing the issue as the [Town] would have us do here

would be tantamount to accepting a categorical rule that

precludes agency mistakes from ever amounting to a taking.”

Respectfully, certiorari must be granted to address whether

litigation over the validity of a regulation falls within the First

English “normal delay” exception to a taking.

3. Petitioners did not “Waive” the Penn Central

Argument.

Finally, the Town argues that certiorari should be denied

because “Petitioners fail to cite the Penn Central case or its

holding [before the New Hampshire Supreme Court]; therefore,

any argument based on that case has been waived and is not

properly before this Court.” Opp. Br. at 6. True, Petitioners did

not cite Penn Central in the state court proceedings, but they

did cite First English, which in turn cites Penn Central (as well

as Justice Brennan’s plurality dissent in San Diego Gas, which

cites Penn Central.) Moreover, at oral argument before the

New Hampshire Supreme Court, on July 11, 2002, New

Hampshire Justice Dalainis directly asked counsel of record for

both parties whether Tahoe-Sierra was “dispositive” in the case

at bench.° And Tahoe-Sierra, in turn, relies so heavily on Penn

> Manor v. Reisma, 2003 WL 1224248, No. C.A. PC 89-2447 (R.1.

Super. Feb. 24, 2003) at *11 - *12 (expressly rejecting analysis of

Landgate majority, and following analysis of Landgate dissenting

Justice Brown).

° In response, counsel for both Petitioners and Respondent stated that

Tahoe-Sierra was not dispositive in the case at bench. Counsel for

Central to the point of homage. Takings claims under the

United States and New Hampshire Constitutions were pled and

briefed. Just because the New Hampshire Supreme Court failed

to cite Penn Central in its decision does not mean that

Petitioners waived the argument.

The New Hampshire Supreme Court’s failure to conduct

the ad hoc balancing test first enunciated in Penn Central, and

reconfirmed in Tahoe-Sierra, Palazzolo, and as recently as last

March in Brown v. Legal Found. of Washington, 538 U.S. ---,

123 S.Ct. 1406, 1417-18 (2003), is fairly in play.

[CONCLUSION PAGE FOLLOWS]

Petitioners reasoned that Tahoe-Sierra did not apply because the

moratoria halting development in the Lake Tahoe basin were valid,

while the Ordinance at issue here was “invalid, ab_ initio.”

Petitioners have requested a transcript of the oral argument before the

New Hampshire Supreme Court, and will expeditiously file a

supplemental appendix with this Court once it is received.

CONCLUSION

Tahoe-Sierra emphasizes _ that “{cJonsiderations of

fairness and justice” underlie the takings analysis. 535 U.S. at

333. It is neither fair nor just for municipalities to immunize

themselves from takings liability when they fail to follow thei:

own laws and enforce illegal ones.

For the foregoing reasons, and for those stated in the

underlying Petition, the writ for certiorari should be granted.

DATED: May 15, 2003

Respectfully submitted,

Duane J. Desiderio Sumner F. Kalman

Jon W. Luther Counsel of Record

Thomas Jon Ward Thea S. Valvanis

National Association of 147 Main Street, Box 988

Home Builders Plaistow, NH 03865

1201 15" Street, NW (603) 382-4003

Washington, D.C. 20005

(202) 266-8200

Attorneys for Petitioner