On October 1, 2018, the U.S. Supreme Court denied certiorari in Martins Beach 1, LLC v. Surfrider Foundation (Docket No. 17-119), a high-profile property rights case involving Martin’s Beach in the County of San Mateo.
In 2005, in Lingle v. Chevron U.S.A. Inc., the U.S. Supreme Court unanimously overruled the first prong of a regulatory takings test established 25 years earlier, in Agins v. City of Tiburon. In Agins, the Court held that a regulation effects a taking if it (1) does not “substantially advance legitimate state interests” or (2) “denies an owner economically viable use of his land.” Writing for a unanimous Court in Lingle, then Justice Sandra Day O’Connor recognized that “the language the Court selected [in Agins] was regrettably imprecise” and “reveals nothing about the magnitude or character of the burden a particular regulation imposes upon private property rights.”
The City of Rancho Palos Verdes is the site of the ancient Portuguese Bend and Abalone Cove landslides, both of which remain active. In 1978, in response to movement of the Abalone Cove landslide, the City adopted an “urgency ordinance” establishing the “Landslide Moratorium Area,” which generally prohibits new residential development in the landslide area. The moratorium area is divided into eight zones of varying stability. The ordinance and subsequent amendments created various categories of exceptions to and exclusions from the moratorium that have been the subject of extensive litigation.
On July 23, 2018, the U.S. House of Representatives unanimously passed the Private Property Rights Protection Act of 2017 (H.R. 1689). Sponsored by Wisconsin Congressman F. James Sensenbrenner, Jr. and California Congresswoman Maxine Waters, the Act intends to address Kelo v. City of New London, the controversial 2005 U.S. Supreme Court decision that affirmed the right of a city to use the power of eminent domain to take and transfer property from one private party to another for the “public purpose” of economic development.
On March 5, 2018, the U.S. Supreme Court granted certiorari in Knick v. Township of Scott (Case No. 17-647) to address the requirement, established in Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172, 194-96 (1985), that landowners must first unsuccessfully seek compensation in state court before bringing a Fifth Amendment takings claim in federal court. No other category of plaintiffs desiring to vindicate their constitutional rights under 42 U.S.C. § 1983 is subject to this onerous requirement.
Early last summer the U.S. Supreme Court released its long-awaited, and deeply flawed decision in Murr v. Wisconsin, __ U.S. __ (2017). We wrote about this unfortunate new takings case here and in “Missed Opportunity In Takings Decision,” Daily Journal (July 13, 2017).
The short story is that the Murr family bought two adjacent parcels at separate times in the early 1960s near the St. Croix River in Wisconsin, a designated wild and scenic river. They built a small, 950-square foot cabin on one of the parcels and kept the other parcel vacant as an investment. The Murr children later acquired both parcels and sought to sell the vacant parcel in the 1990s to finance improvements to the rustic, 57-year old, cabin. But a Wisconsin statute and county zoning ordinance, enacted in the 1970s, prevented the Murrs from selling or developing the vacant parcel because it was smaller than the minimum size deemed suitable for development even though it has a half acre of developable land, meets all environmental regulations and setbacks, and is surrounded by development on similarly sized parcels. Because the parcel was still undeveloped, now held in common ownership, and deemed substandard, it was treated as “merged” with the developed parcel.
The United States Supreme Court has had numerous opportunities in recent years to address an important and unsettled issue under the Takings Clause: whether heightened scrutiny under Nollan, Dolan, and Koontz applies in cases where an alleged taking arises from a legislatively imposed condition rather than an administrative one. The Court’s most recent denial of certiorari in such a case occurred on October 30, 2017, in 616 Croft Ave., LLC v. City of West Hollywood (Case No. 16-1137).
616 Croft Ave. concerned the City of West Hollywood’s imposition of a $540,000 “in-lieu” affordable housing fee, under the City’s inclusionary housing ordinance, in connection with the development of an 11-unit condominium project. The case addressed the California Supreme Court’s denial of a petition to review a Second District Court of Appeal decision that upheld the legality of the fee pursuant to the state Supreme Court’s decision in California Building Industry Association v. City of San Jose, 61 Cal. 4th 435 (2015).
In Dryden Oaks, LLC v. San Diego County Regional Airport Authority, __ Cal.App.5th __ (October 19, 2017), the Fourth District Court of Appeal published a previously unpublished opinion addressing both regulatory takings and pre-condemnation damages claims. The case arose out of a complicated set of facts involving two properties near McClellan Palomar Airport in Carlsbad.
In short, in 2002 the City approved permits for both lots despite the San Diego County Regional Airport Authority’s determination the projects were incompatible with the airport. The developer completed construction of a commercial building on one of the lots in 2005, but the second permit expired in 2012 without commencement of any construction. The developer filed an application to restart the process for the second lot, but by that time the Authority had adopted an Airport Land Use Compatibility Plan that designated the property within a higher risk safety zone. Thus, despite its earlier decision to override the Authority’s objections under the predecessor plan to the ALUCP, the City now refused to do so.
In 2011, Pasadena was hit by a powerful storm carrying hurricane force winds that injured more than 5,000 City-owned trees, 2,000 of which were uprooted. During the course of the storm, an approximately 110 foot tall Canary Island pine tree located on City property fell on a private residence, causing severe property damage.
The homeowners’ insurer paid more than $700,000 in insurance benefits. As subrogee under the homeowners’ insurance policy, the insurer sued the City for inverse condemnation, under the California Constitution, on the theory that the City owned the tree and maintained and cared for it as part of the City’s tree protection regulations. The trial court agreed and found the City liable in inverse condemnation on the grounds that the tree that fell was a public improvement maintained for a public purpose, the damage to the residence was proximately caused by the improvements, and the City is strictly liable for the property damage. The court awarded the insurer approximately $800,000 in damages and $330,000 in costs.
On August 24, 2017, in Mercury Casualty Company v. City of Pasadena, __ Cal.App.5th __ (Case No. B266959 & B268452), the Court of Appeal for the Second Appellate District reversed the trial court judgment and cost order.
Martins Beach, near Half Moon Bay in the County of San Mateo, is the subject of protracted litigation on various fronts stemming from tech billionaire Vinod Khosla’s 2009, decision to change the public’s access to and use of Martins Beach by permanently closing and locking a gate to the public across Martins Beach Road, adding signs to the gate, changing the messages on a billboard on nearby Highway 1, and hiring security guards to deter the public from crossing or using the property to access the beach. From the 1930s or earlier, Khosla’s predecessor encouraged the public to use the road to access Martin’s Beach. They also erected the billboard, which invited the public to use the beach, and provided a general store, public toilets, and a parking area. For some of that time they charged a $.25 entry fee.
We wrote about one strand of the litigation last year—Friends of Martin’s Beach v. Martin’s Beach 1 LLC, 246 Cal.App.4th 1312 (2016)—in which the California Court of Appeal for the First Appellate District addressed an unincorporated association’s lawsuit seeking access to the coast at Martins Beach based on claimed rights of access under various theories. In Friends of Martins Beach, the Court of Appeal held that a plaintiff group had alleged facts sufficient to state a common law dedication claim and thus remanded that claim to the trial court. Because the Friends of Martin’s Beach case is still pending there, the existence of public access rights to Martins Beach is presently undetermined.