Opposition Brief — Allegretti & Co. v. Imperial County (No. 06-581)

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FILED

No. 06-581 :

\ NOV +7 2006

| OFFICE OF THE CLERK

Jn The _ SUPREME CQUAT, U.S _

Supreme Court of the Gnited States

ALLEGRETTI & COMPANY,

Petitioner,

V.

COUNTY OF IMPERIAL, CALIFORNIA,

Respondent.

On Petition For Writ Of Certiorari

To The Court Of Appeal Of The State Of California,

Fourth Appellate District, Division One

¢

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

.

IMPERIAL COUNTY COUNSEL. ROSSMANN AND MOORE

RALPH CORDOVA ANTONIO ROSSMANN*

940 West Main Street. ROGER B. MOORE

Suite 205 DAVID R. OWEN

El Centro, CA 92243 380 Haves Street

(760) 482-4400 San Francisco, CA 94102

(415) 861-1401

“Counsel of Record

Attorneys for Respondent

Oe KER LAW BRIEF PRINTING CO) sem. 905 aoe)

fC ALE COLLECT: per2. 542 285)

QUESTIONS PRESENTED

The real questions presented by this case already

have been answered in the negative in prior decisions of

* this Court: |

1. Should a court use a physical takings analy-

sis when considering whether purely regulatory

actions (specifically, a county attempting to com-

plete environmental review prior to issuing a

well drilling permit, and then offering a modified

permit that never actually took effect) created a

taking?

2. Should a plaintiff prevail on a categorical

regulatory taking claim when that plaintiff con-

tinues to profitably use the allegedly taken prop-

erty?

3. Should a plaintiff prevail on a Penn Central

regulatory taking claim when it has demon-

strated neither the scope of its investment-

backed expettations nor that those expectations

were reasonable; and also has not shown the ex-

- tent of any interference with those expectations?

TABLE OF CONTENTS

Page

IY PIII soa. s,s seebinbbouedeessvonsvesonnecsrvneessvens i

ENDS LESLIE LEELA RT 1

SPRROURNERE OF GERD COND ccccccsecccsccvscevercecesevesererenerevconeooonses 1

Discussion ...........:0000008 ichiisahepiitibacaliiebisaaedotaiincantieneneets 4

I. The California Court of Appeal Followed

Established Principles in Rejecting Allegretti’s

EE DIINT R RII nc vatcacenvocroessonevcatdeendieccess 4

I]. The California Court of Appeal Followed

Established Principles in Rejecting Allegretti’s

Categorical Regulatory Taking Claim................ 6

III. The California Court of Appeal Followed

Established Principles in Rejecting Allegretti’s

Penn Central Regulatory Taking Claim............. 7

EES EEE TROL AS ARR RE ER AR SET EE ie)

TABLE OF AUTHORITIES

Page

CASES

Baldwin v. County of Tehama, 31 Cal.App.4th 166

Eis clatnivncssatesastelecicadich-caubicheds ebamaniiddiaecaniigsiib pe Geicaiiasaediaetaohiane 8

City of Barstow v. Mojave Water Agency, 23 Cal.4th

Fe I cesistsssiigniicinstinieapvsaheghabtendinciinaditicTbalee guiniebinekianinatanan 8

Ton Fe Bbe , BID Ck. Re CABG) cevicecnscitiviesncetctinencvertionitecinens 8

Klamath Irrigation District v. United States, 67

Fs See I CIID Acdacishasnicitd vpnedcicatescsldiceenespeeinenintbnceuetedn 6

Lingle v. Chevron USA, 544 U.S. 528 (2005)..........ccccccceeees 1

Loretto v. Teleprompter Manhattan CATV Corp.,

458 U.S. 419 (1982).............. iscbaitaiaeediaiadanchedisinbdigpiobiakdiicciucdsiti 1

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

BGT CRED aclthediininialntncnctinnbinsseatids ich tgliecpeninteddivinelaluics 1,5,6

Pasadena v. Alhambra, 33 Cal.2d 908 (1949) ............ce00e 8

_ Penn Central Transportation Co. v. City of New

York, 438 U.S. 104 (1978)........:ccccccceceees icsicbaaas 1,6,7,9

Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984)............ 8

Tahoe-Sierra Preservation Council v. Tahoe Re-

gional Planning Agency, 535 U.S. 302 (2002) .....1, 5, 6, 7

Tulare Lake Basin Water Storage Dist. v. United

me OB RB | errata 6

United States v. California State Water Resources

Control Board, 182 Cal.App.3d 82 (1986)...............ccc00 8

Yee v. City of Escondido, 503 U.S. 519 (1992)................000 5

iv

TABLE OF AUTHORITIES — Continued

Page

CONSTITUTIONAL PROVISIONS

Cs a i occas ul gdidile 8

STATUTES

Cal Pub. Resources Code §§ 21000, et seq............::ccceseeeees 3

Cal. Public Resources Code § 21080 .............cccccesssssssesseereee 2

RULES

I TING BNE BEF icisccchtnseteinccscotentareridaencecteitammtctighns 4,9

1

INTRODUCTION

In rejecting Allegretti and Company’s inverse con-

demnation claim, the California Court of Appeal adhered

carefully to the settled principles articulated by this Court

in Lingle v. Chevron USA, 544 U.S. 528 (2005), Tahoe-

Sierra Preservation Council v. Tahoe Regional Planning

Agency, 535 U.S. 302 (2002), Lucas v. South Carolina

Coastal Commission, 505 U.S. 1003 (1992), Loretto v.

Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982),

Penn Central Transportation Co. v. City of New York, 438

U.S. 104 (1978), and many other cases. That adherence to

settled takings law creates no need for further review, and

Allegretti’s arguments to the contrary are based largely on

distortions of both the facts of the case and the legal

questions raised.

,

vv

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STATEMENT OF THE CASE

This action arose because Allegretti & Company

(Allegretti) applied for a permit to install a new groundwa-

ter well on its property, but declined to cooperate in the

environmental review procedure that under California

state and local law must precede issuance of such permits.

Allegretti owns land in Imperial County, one of the

United States’ hottest and driest areas. Allegretti leases

that land to a tenant farmer, who actively farms the land.

That tenant irrigates his crops by pumping groundwater

from four on-site groundwater wells. Those wells draw

their water from a regional aquifer.

The County never has limited the amount of water

those four wells are able to pump. Nor has the County ever

2

drawn water from the aquifer. Throughout the period that

Allegretti identified as the time of the alleged taking,

Allegretti’s tenant continued to pump water. Allegretti also

received rent payments from the tenant and participated

in the tenant’s profit-sharing plan, which Michael Alle-

gretti described as “very profitable.” Respondent’s Appen-

dix (in the California Court of Appeal) at 386.

In 1994, Allegretti applied for a conditional use permit

to install and operate a fifth well. The County’s well

drilling ordinance defines approval of a well-drilling

permit as a discretionary act and requires the County to

comply with the California Environmental Quality Act

(CEQA, Cal. Pub. Res. Code, §§ 21000, et seg.)’ before

issuing an approval. The County therefore asked Allegretti

to cooperate (by providing information about planned

pumping levels and existing hydrologic conditions) in the

preparation of environmental review.

Allegretti declined to cooperate, and later sued the

County (unsuccessfully; the case was dismissed) when the

County decided to prepare a full environmental impact

report. To resolve the conflict, the County offered Allegretti

a compromise: it would issue a permit, but that permit

would limit overall levels of pumping from Allegretti’s five

* Like the National Environmental Policy Act, on which it is partly

modeled, CEQA requires state and local government agencies to review

the envi tal consequences of government actions that may

significantly affect the environment, and to do so before those actions

are taken. See Cal. Pub. Res. Code § 21080(d) (stating that an environ-

mental impact report must be prepared before approving a project that

may have significant environmental effects).

3

wells. The proposed limit — 12,000 acre-feet’ per year on a

2,400 acre parcel — exceeded the total amount Allegretti

claimed to need or want. Allegretti refused to record the

vermit, which therefore never took effect. Allegretti

instead filed this inverse condemnation action against the

County. |

The County filed a demurrer, alleging that Allegretti

was obliged to proceed with a mandamus action rather

thaa an inverse condemnation claim. The trial court

sustained the demurrer, but the California Court of Appeal

reversed.-It held that the County’s well-driiling ordinance

did not facially recite sufficient standards to allow the

County to include pumping limitations in a permit, and

remanded for proof beyond the pleadings on that issue.

The court also held, however, that California law sup-

ported the County’s general authority to regulate ground-

water. The Court of Appeal did not exempt the County

from complying with CEQA prior to issuing a permit, and

thus its holding did not empower the County to approve

Allegretti’s permit application without first completing

environmental review.

The case then proceeded to trial, and the trial court

rejected Allegretti’s inverse condemnation claims, holding that

“plaintiff's evidence failed to show that the conditions placed on

issuance of the permit would have any economic impact at all.”

Allegretti’s App. at 46. In unanimous decisions, the California

Court of Appeal affirmed, and the California Supreme Court

denied Allegretti’s petition for review.

-

+

? An acre-foot of water is enough water ¢o flood one acre of land to

a depth of one foot. Thus, Allegretti still would have had enough water

to annually flood its entire property five feet deep.

4

DISCUSSION

In its petition for certiorari, Allegretti asserts no

conflict among the decisions of the United States Courts of

Appeals; no conflict between a federal appellate court and

a state court of last resort; no departure “from the ac-

cepted and usual course of judicial proceedings”; no con-

flict among state courts of last resort; and no conflict

between state court decisions and the decisions of this

Court. See Supreme Court Rule 10. Nor could it, for no

such conflicts exist. Allegretti instead rests its request for

certiorari entirely on a contention that the court of appeal

“decided an important question of federal law that has not

been, but should be” settled by this Court. See id.

That contention is groundless. As discussed below, and

as evinced by its carefully written opinion, the court of

appeal carefully adhered to well-established legal princi-

ples.

I. The California Court of Appeal Followed Estab-

lished Principles in Rejecting Allegretti’s

Physical Takings Claim

Allegretti’s first asserted basis for review — its request

for the Court to reject “the simplistic conclusion that

takings claims are either ‘regulatory’ or ‘physical,’” —

ignores the well-settled principles that led the California

courts to reject Allegretti’s physical taking claim.’

* Allegretti’s framing of the question - “when property owners’

right of access to water beneath their land is substantially abrogated by

a government agency, is the resulting taking measured ... ” — also

assumes several unsupportable factual and legal premises. See Petition

at 1. Allegretti never actually showed that its right of access to water

(Continued on following page)

5

In Tahoe-Sierra Preservation Council, the Court

cautioned that the difference between physical and regula-

tory takings “makes it inappropriate to treat cases involv-

ing physical takings as controlling precedents for the

evaluation of a claim that there has been a ‘regulatory

taking,’ and vice versa.” 535 U.S. at 323-24; see also Lucas

v. South Carolina Coastal Council, 505 U.S. 1003, 1015

(1992) (using a regulatory takings analysis to evaluate a

regulation that denied a plaintiff all economically viable

use of his entire property, and noting that physical takings

fell into a separate “discrete categorly]”); Yee v. City of

Escondido, 503 U.S. 519, 527 (1992) (“The government

effects a physical taking only where it requires the land-

owner to submit to the physical occupation of his land.”)

(emphasis in original).

That distinction is particularly important here, for the

County has never done anything that fits within the

traditional definition of a physical occupation or invasion.

It has not appropriated Allegretti’s water, physically

occupied or invaded the aquifer, established any physical

presence on Allegretti’s property, or enabled a third party

to do so. Its actions were classically regulatory restrictions

on use; it required Allegretti to obtain a permit and then

offered a modified permit in response to Allegretti’s unwill-

ingness to cooperate in environmental review. No authori-

tative federal or state decision supports Allegretti’s

attempt to treat those routine regulatory actions as

beneath its land was “substantially abrogated.” See Part III, infra. Nor

did it ever demonstrate the existence of a “resulting taking.”

6

physical takings, and the court of appeal followed settled

law in rejecting that attempt.*

II. The California Court of Appeal Followed Estab-

lished Principles in Rejecting Allegretti’s Cate-

gorical Regulatory Taking Claim

Allegretti next asserts that the Court must assess

whether Allegretti, which continued to profitably use the

supposedly taken property, suffered a categorical regula-

tory taking. But in rejecting that theory, the Court of

Appeal again followed well-established law.

Only in those rare circumstances where a regulation

permanently denies a property owner “all economically

beneficial or productive use” of its property may the

regulation effect a categorical taking. Lucas, 505 U.S. at

1015 (emphasis added). The Court’s use of the word “all” is

not coincidental; it has cautioned that “l[a]nything less

than a ‘complete elimination of value,’ or a ‘total loss,’...

would require the kind of analysis applied in Penn Cen-

tral” rather than application of the Lucas categorical test.

Tahoe Sierra Preservation Council, 535 U.S. at 330 (quot-

ing Lucas, 505 U.S. at 1017, 1019-20 & n.8). Consequently,

* Allegretti attempts to manufacture a cert-worthy conflict out of

one anomalous decision of the Federal Court of Claims, see Tulare Lake

Basin Water Storage Dist. v. United States, 49 Fed. Cl. 313 (2001), but

that decision has no precedential value and thus is incapable of

creating any conflict of authority. The Court of Claims itself has

neutralized that decision by rejecting its analysis. See Klamath

Irrigation District v. United States, 67 Fed. Cl. 504, 538-40 (2005). But

Allegretti’s petition, though it repeatedly cites and heavily relies upon

Tulare Lake, incongruously fails even to mention Klamath Irrigation

District.

a categorical regulatory taking arises only in an “extraor-

dinary circumstance.” Id.

This case presented no such extraordinary circum-

stance. Allegretti received both profit-sharing and rent

payments throughout the period of the alleged taking. it

has always had access to as much water as its four exist-

ing wells could pump. To hold, under such circumstances,

that Allegretti was denied “all economically viable use” of

its property would render that phrase meaningless.

Ill. The California Court of Appeal Followed Estab-

lished Principles in Rejecting Allegretti’s Penn

Central Regulatory Taking Claim

In challenging the California court’s Penn Central

analysis, Allegretti contends that the Supreme Court

should use this case to refine the meaning of the phrase

“investment-backed expectations.” But even if one as-

sumes, arguendo, that such refinement is needed, this is

not the case to provide it. Allegretti failed to demonstrate

what its investment-backed expectations were, whether its

expectations were reasonable, and the extent, if any, to

which the County’s actions interfered with those expecta-—=

tions. Accordingly, the Court of Appeal’s application of the

second prong of the Penn Central analysis was also en-

tirely consistent with settled law.

Allegretti never clarified the scope of its expectations.

Instead, as the Court of Appeal explained, “Joe Allegretti’s

testimony was only that he purchased the farm having

been given lots of reassurances that it could be a viable

farming operation.” Allegretti’s App. at 21 (emphasis in

original). At the trial itself, Michae] Allegretti specifically

testified that when asked how much water Allegretti

8

expected to use, “I told different amounts at different

times.” Reporter’s Transcript at 240:13-15. Accordingly,

_ the court of appeal’s demand for more specific evidence

simply applied traditional legal standards and requires no

correction from this Court. See Allegretti’s App. at 21

(citing Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005-

06 (1984)).

Nor did Allegretti demonstrate that its unspecified,

inchoate expectations were reasonable. Based on Alle-

gretti’s subsequent litigation posture, and on its failure to

even attempt to prove the scope of its groundwater use

rights, Allegretti may have expected to pump without any

regulatory constraint. But because of both long-

established law and the realities of an arid and variable

climate, all California water use rights are necessarily

“limited and uncertain.” United States v. California State

Water Resources Control Board, 182 Cal.App.3d 82, 104

(1986); Cal. Const. art. X § 2 (limiting rights to uses that

are “reasonable”). Growndwater use rights are further

constrained by the requirement that no user can take

more than its “proportionate fair share” of the waters in a

shared aquifer, City of Barstow v. Mojave Water Agency, 23

Cal.4th 1224, 1253 (2000). California counties may also

impose limits designed to protect scarce groundwater

resources. In re Maas, 219 Cal. 422, 424-25 (1933); Bald-

win v. County of Tehama, 31 Cal.App.4th 166 (1994). For

those reasons, Allegretti could not reasonably anticipate

limitless pumping from a shared desert aquifer — particu-

larly where, as Allegretti’s own consultant acknowledged,

water levels in that aquifer were steadily declining. See

Respondent’s Appendix at 257-58 (documenting the draw-

down); Pasadena v. Alhambra, 33 Cal.2d 908 (1949)

9

(holding that a user may be enjoined from taking more

than an aquifer’s safe yield).

Having demonstrated neither what its expectations

were nor why they were reasonable, Allegretti failed to

establish any interference with reasonable investment-

backed expectations. The 12,000 acre-feet per year limita-

tion the County proposed never actually took effect, and

even if it had, that limitation would have exceeded Alle-

gretti’s claimed water needs. See Allegretti’s App. at 4-5

(explaining that Allegretti sought only a modest increase

in its farming acreage). Similarly, directing Allegretti to

comply with standard permitting requirements could not

interfere with reasonable expectations, for Allegretti could

not reasonably assume the County would grant a permit

without first complying with the mandates of applicable

law.

This case therefore creates no need for the Court to

reject the court of appeal’s routine application of the Penn

Central standard, or to revisit the meaning of “reasonable

investment-backed expectations.” Under any plausible

interpretation and application of that phrase, the court of

appeal’s decision was correct, and indeed was compelled by

the facts of this case.

¢

CONCLUSION

Supreme Court Rule 10 cautions that “[a] petition for

writ of certiorari is rarely granted when the asserted error

consists of ... the misapplication of a properly stated rule

of law.” Yet those are the types of claims Allegretti’s

petition asserts, and its contentions of misapplication, like

its factual assertions, lack foundation. The California

10

courts carefully adhered to settled legal standards and

correctly applied those standards to facts that could not,

under any reasonable analysis, sustain a takings claim.

That adherence to settled law creates no need for this

Court’s review.

Respectfully submitted,

ANTONIO ROSSMANN

Counsel of Record

ROSSMANN AND MOORE

380 Hayes Street

San Francisco, CA 94102

(415) 861-1401