Thursday, February 26, 2009

California Decision Finding Lucas "Categorical Taking" in 30-Year Moratorium. Sounds Familiar.

I downloaded the 49-page slip opinion in Monks v. City of Rancho Palos Verdes ("Monks II") after seeing it mentioned in the October 1, 2008, blog of Hawaii land use attorney Robert H. Thomas. It came back to me this week, when it was highlighted on the front page of the December 2008 issue of Gideon Kanner's newsletter, Just Compensation, with the exclamation:
"Will miracles never cease? The California Court of Appeal held that a city's moratorium forbidding all construction, and extending over a period of some 30 years, was a taking of property."

For those of us who consider California state and federal courts' interpretations of the U.S. Constitution something to be avoided, the tide seems to be changing out there. In December 2007, in Yamagiwa v. City of Half Moon Bay, a U.S. District Judge held that the city, in imposing a series of land development regulations, and excavating nearby areas for stormwater drainage -- that converted the property into undevelopable wetlands -- had "taken" the property and was liable for $37 million in Just Compensation.

Now, in Monks v. City of Rancho Palos Verdes, 167 Cal. App. 4th 263, rev. denied, 2008 Cal. LEXIS 14670 (Cal. Dec. 17, 2008), on its second trip to the Court, an intermediate California Court of Appeal held (and the California Supreme Court declined to review) that a building moratorium that started in 1978 was a permanent, categorical taking (as in Lucas v South Carolina Coastal Council, 505 U.S. 1003 (1992)).

This is a well-analyzed opinion that uses Lucas reasoning to conclude that the City's 1978 ordinance imposing a moratorium on the construction of single-family homes in the "vicinity" where landslides had recently occurred. In the earlier trip to the appellate court, that court rejected the City's one-two defense of "it ain't ripe, and besides, the statute of limitations has run." Monks v. City of Rancho Palos Verdes (Feb. 23, 2005, nonpublished opinion B172698.) ("Monks I," quoted liberally in Monks II.)

The Monks II opinion focused on the following aspects of the Supreme Court's opinion in Lucas. The California court's synopsis can be boiled down as follows.

1. The Lucas court rejected the contention that Lucas's property retained some economically beneficial use just because he could go there to picnic, swim, camp in a tent, or live in a movable trailer. See 505 US at 1044 (Blackmun's dissent).

2. The Lucas court concluded that the findings of the state legislature were of "no import in deciding the taking issue." The Lucas court held "Any limitation so severe [as to deprive land of all economically beneficial use] cannot be mewly legislated or decreed (without compensation), but must inhere in the title itself, in the restrictions that background principles of the State's law of property and nuisance already place upon land ownership."

3. "The fact that a particular use has been long engaged in by similarly situated owners ordinarily imports a lack of any common-law prohibition.... So also does the fact that other landowners, similarly situated, are permitted to continue the use denied by the claimant. ... It seems unlikely that common-law principles would have prevented the erection of any habitable or productive improvements on [Lucas's] land; they rarely support prohibition of the 'essential use' of land...." Lucas, 505 US at 1030-31 (majority opinion of Scalia, J.); 505 US at 1052, fn 15 , and 1052-55 (Blackmun's dissent).

4. The government bears the burden of proving that the property owner's intended use is not allowed under state law. " win its case South Carolina must do more than proffer the legislature's declaration that the uses Lucas desires are inconsistent with the public interest, or the conclusory assertion that they violate a common-law maxim that ... 'one must so use his rights as not to infringe on the rights of others.' ... Instead, as it would be required to do if it sought to restrain Lucas in a common-law action for public nuisance, South Carolina must identify background principles of nuisance and property law that prohibit the uses he now intends in the circumstances in which the property is presently found. Only on this showing can the State fairly claim that, in proscribing all such beneficial uses, the Beachfront Management Act is taking nothing." Lucas, 505 US at 1031-32.

Just to bring this home, the State of Florida or the local government would have to show that it could have enjoined the building of single-family homes -- on lots zoned for single-family homes -- in the Florida Keys, under the common law in existence before Florida became a state. No statutes or ordinances enacted after that date would be relevant. If it cannot do that, the prohibition on construction of single-family homes in the Florida Keys -- even if it is only a "moratorium" -- is a Lucas categorical taking.

We would like to also mention that the recent Florida 5th DCA decision in St Johns River Water Management District v Koontz, Case No 5D06-1116 (January 9, 2009),brought to mind the fact that, under the US Supreme Court's Nollan/Dolan decisions, forcing landowners to dedicate land to the government as part of the price of obtaining a building permit, is an unconstitutional exaction and a Fifth Amendment taking.

Wouldn't it be interesting if a group of property owners filed a class action against the County and the State, demanding that all of the ROGO lots "donated" to obtain building permits be deemed "unconstitutional exactions," and requiring the County to commence eminent domain proceedings against every one of those parcels, and to pay the "donor" the Fair Market Value of the "donated" lots. After adjusting for Condemnation Blight, of course, which would kick the Fair Market Value up to 125% of the assessed valuation of nearby, developed, residential lots.

Anyway, those are my thoughts for February 2009. Check back here or on to see how these ideas get transformed into action.

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