▪ New Ninth Circuit Regulatory Takings Case Has It All

The Ninth Circuit recently decided Vacation Village, Inc. v. Clark County, No. 05-16173 (July 23, 2007), a case that has just about everything in terms of regulatory takings issues in federal court: the Penn Central standard for regulatory takings, Williamson County ripeness, Rooker-Feldman, exhaustion of administrative remedies, federal preemption, choice of law under Erie, and independent and adequate state law grounds.

I won't go into the details, which are set forth here and in the opinion.  The basic issue in the case is whether airport-related height and use restrictions are regulatory takings under the Nevada Constitution.  The most interesting aspect to the opinion is that the court held the plaintiff complied with Williamson County's requirement that a landowner first seek state remedies before seeking federal remedies.  The court noted that the plaintiff only asserted state law claims, and the case was in federal court only because it was ancillary to a bankruptcy. Thus, the plaintiff was pursuing state law remedies first, even though the case was in federal court.

The Ninth Circuit held that under a Nevada Supreme Court decision, the height restriction was a physical invasion, and therefore a per se regulatory taking.  Even though the court noted that "[w]e respectfully disagree with our colleagues on the Nevada Supreme Court concerning their interpretation of federal takings jurisprudence," it held there was a taking under Nevada law, and "the Nevada Supreme Court is the final arbiter of that fundamental state charter."  With respect to the use restrictions, the Ninth Circuit held that under Nevada law applying the Penn Central factors, there was no ad hoc regulatory taking.  There was no per se regulatory taking because there was no wipeout of economically beneficial use. 

Hat tip to the Law of the Land blog for bringing this case to our attention.