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Federal Circuit: Plaintiff Alleged Property Right To Develop Land

The US Court of Appeals has reversed the Court of Federal Claims' dismissal of a takings case, holding the right to develop land is property protected by the Takings Clause. In Schooner Harbor Ventures, Inc. v. United States, No. 2008-5084 (June 16, 2009), the property owner claimed a designation of its property (Site 28) by the U.S. Fish and Wildlife Service as a critical habitat for the Mississippi Sandhill Crane -- which required it to purchase another parcel as a mitigation measure before it could sell Site 28 to the Navy -- was a taking.

The property owner sought just compensation in an inverse condemnation action in the CFC, which entered summary judgment for the government because the owner failed to assert a property right. The CFC characterized the interest claimed as "the right to sell its property to the government, without conditions imposed, in this instance to meet regulatory burdens imposed on the Navy, by obtaining the mitigation parcel." The CFC's decision is available here.

The Federal Circuit reversed, concluding the CFC misconstrued the property owner's claim, which was not a that it was deprived of its ability to sell to the Navy, but that the critical habitat designation affected its right to sell to any other party, the right to develop the land, and its fee simple title.

This alleged regulation of Schooner Harbor’s right to develop Site 28 would have an obvious impact on any subsequent sale, regardless of the purchaser’s identity—a development-restricted parcel commands a lower price. A lower sale price, of course, is not a restriction on the right of alienation, but rather one effect of a regulation on the right to develop. A detailed reading of Schooner Harbor’s position below and on appeal thus reveals that this alleged regulation of the right to develop Site 28 is also asserted as a taking.

Slip op. at 8-9. The court remanded the case to the CFC for a ripeness determination, and (if ripe), an application of the Penn Central factors to determine whether these property interests were taken.

Of additional note is the court's admonition to the CFC about the so-called "notice defense," where the government (even after the argument was expressly rejected by the U.S. Supreme Court) continues to assert it can escape takings liability for a regulatory scheme that affects property values simply because the regulation was in place at the time the plaintiff purchased the property:

An additional consideration may arise on remand. The trial court indicated that because the critical habitat designation occurred in 1977, subjecting the property to certain regulatory restrictions, and Schooner Harbor did not purchase the land until 2000, it "stretches the credulity of the court that plaintiff, as a real estate developer, did not do due diligence and was not aware of the protected status of the land at issue." Schooner Harbor, 81 Fed. Cl. at 414. Schooner Harbor’s knowledge of the regulation is not per se dispositive, although it is a factor that may be considered, depending on the circumstances. "A blanket rule that purchasers with notice have no compensation right when a claim becomes ripe is too blunt an instrument to accord with the duty to compensate for what is taken." Palazzolo v. Rhode Island, 533 U.S. 606, 628 (2001) (rejecting the argument that one who acquires title after the relevant regulation was enacted could never bring a takings claim). Consequently, the trial court must consider if and when any claim ripened as well as all of the factors relevant to Schooner Harbor’s investment-backed expectations.

Slip op. at 12. The oral argument recording is available here (37mb mp3).

Guest Post: Of Shoes and Ships, Eggs and Farms; Or, Penn Central Through the Looking Glass

Economist Bill Wade offers his thoughts on the recent (and latest) Rose Acre decision by the Federal Circuit, a case we summarized here.
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Of shoes and ships, eggs and farms; Or, Penn Central through the Looking Glass

by William W. Wade, Ph.D.

Fans of arcane takings decisions will not find a more economically confused record and decision than Rose Acre Farms VI.  (Rose Acre Farms, Inc., v. United States, United States Court of Appeals for the Federal Circuit , 2007-5169, March 12, 2009.)  Whether the case was about eggs or farms, gross revenues or net profits, lost income or lost value, marginal costs or average costs apparently eluded the judges, the instant parties and experts.  In 15 years of writing about the economic underpinnings of regulatory takings case decisions, I have to award both the expert testimony and judicial interpretations in this case some sort of pinnacle award for sophistry, obfuscation and confusion.  But that is beyond this little note.

I want to focus on one simple question: Has anybody noticed that the government’s arguments in Cienega X and Rose Acre Farms VI do away with temporary takings?

Cienega X addressed the question of whether valuation of the lost income from use of the plaintiff’s property or valuation of the change in real property value measured before and after the taking period is the more appropriate measure of the Penn Central test.  Although inconsistent with the received cannon of finance and economics, the government argued and won the point in Cienega X that the change in real property values of the buildings should govern the Penn Central test because the buildings would recover value after the period of the taking. 

The government’s brief in Rose Acre Farms VI argues that in light of the Tahoe Sierra parcel as a temporal whole language, “[t]he exclusive focus upon Rose Acre’s lost profitability during the temporary period [of the restrictions] is an erroneous assessment of the economic impact of a temporary regulatory restriction upon the property as a whole.”  They conclude that “[t]he obvious purpose for this requirement is to assess the economic impact of the temporary regulatory action in relation to the entire life of the property.”  (Emphasis added.)

The implication of this claim would be that the plaintiff’s expert must evaluate the economic impact of a temporary loss of income with evidence to prove that the loss during the temporary taking period would eviscerate the economic prospects of the business for all time to come. 

Time values of money are important to this determination.  Depending on the length of the taking period and discount rate, plaintiff may or may not ever recover from the economic loss of a temporary loss of revenues.  If it were true that a temporary taking must prove Penn Central’s economic impact prong “in relation to the entire life of the property,” then the temporary taking actually would be equivalent to a permanent taking to surmount this hurdle.  If so, temporary takings do not exist. 

On reflection, both Cienega X and Rose Acre Farms VI so confused standard economic measurement and evaluation benchmarks that proving a temporary taking is tantamount to proving a permanent taking.  But then, why does a body of temporary takings law exist?

The recovery of value of the Tahoe-Sierra plaintiffs’ tangible real property clearly is not a competent comparison to a business’ ability to resume operations after the end of the regulatory prohibition.  Abundant case decisions show that earnings lost in time are lost forever.  The Federal Circuit Court’s decisions suggest that the inability to recover and continue in business is now the relevant criterion for payment of compensation for a temporary taking. But then, why does a body of temporary takings law exist?

Rose Acre Farms VI is the best example yet where confused presentation and faulty understanding of economics undermined judicial thinking.  I concluded in this ELR article [Confusion About "Change in Value" and "Return on Equity Approaches to the Penn Central Test in Temporary Takings, 38 ELR 10486 (2008)] that "the line of [Court of Federal Claims HUD] cases prior to Cienega X needs to become the fabric of broader jurisprudence to inform legal practitioners and jurists.  The implications of [Cienega X] are broader than the plaintiffs' losses in Cienega IX." Rose Acre Farms VI shoves takings jurisprudence thru the looking glass.

William W. Wade, Ph.D., is a resource economist and has served as an expert witness in takings cases, testifying on the economic elements of the Penn Central test. He owns the firm Energy and Water Economics in Columbia, Tennessee.

Federal Circuit: Eggonomic Impact Not Eggregious Enough To Require Feds To Shell Out Compensation

Okay, we've decided to surrender to temptation and let fly with bad (and obvious) egg puns. But at least they're out of our system in the beginning. After that, no more yolks. We promise.

In Rose Acre Farms, Inc. v. United States, No. 2007-5169 (Mar. 12, 2009), the U.S. Court of Appeals for the Federal Circuit held that a regulation restricting the sale of eggs was not a taking under Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978), because the economic impact of the regulation "was not severe" and the character of the government action "strongly favored" the government.

Rose Acre Farms owns egg-laying chickens.  A lot of them: "eight layer-hen farms with millions of hens." The USDA first promulgated temporary, then final regulations that restricted the interstate sale and transportation of eggs determined to be contaminated with salmonella. After illness outbreaks were traced to three of Rose Acre's farms, the company was forced to sell its eggs from these farms as "breaker eggs" (pasteurized eggs used in products such as cake mixes), instead of table eggs. Breaker eggs have about a 10% lower value. Approximately 43% of Rose Acre's table eggs were used as breaker eggs.

After its legal challenge to the validity of the regulations was upheld by the Seventh Circuit, Rose Acre sought just compensation in the Court of Federal Claims. The first trial resulted in an award of $6.1 million for a categorical taking plus $2.5 million in attorneys fees and costs, but the Federal Circuit disagreed with the applicable legal standard, and sent the case back for further consideration of the Penn Central factors.  The Penn Central test applies three factors:

The economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations are, of course, relevant considerations. See Goldblatt v. Hempstead, supra, at 594. So, too, is the character of the governmental action.

Penn Central, 438 U.S. at 124.  After a second trial in which the testimony mostly consisted of expert witnesses (or should that be eggsperts? - sorry, couldn't resist), regarding economic impact, the CFC determined that Rose Acre would suffer a diminution in profit of 219%, held the character of the government action favored the USDA, and did not reconsider its earlier decision on Rose Acre's investment-backed expectations.  Weighing these factors anew, the CFC awarded $5.4 million in compensation, plus attorneys fees and costs.

The Federal Circuit held that "there was, and still is, little dispute about the underlying economic data to be used in assessing the economic impact," but that the disagreement arose over how to analyze the data, slip op at. 13, because "the same data appear to provide vastly differing depiction as to the severity of the economic damage incurred by Rose Acre, depending on whether one looks as lost profits or lost values." Id. at 15. After identifying the relevant property as the 135 million dozen eggs Rose Farms produced on the three affected farms overall (and not the value of the farms as going concerns), the court chose diminution in value.  The court explained:

The trial court’s analysis suffers as a result of limited guidance on the profits-based measure, as the court did not compare the 219% diminution in return to anything, such as some benchmark standard. Instead, the court simply viewed the number as indicative of a severe economic impact. This examination is flawed because it does not set any baseline or standard to which to compare an inherently relative number. And, as Dr. Reiff [a testifying expert] explained, comparing diminution in return in one case to diminution in value in another case "doesn't mean much." The dearth of comparable diminution-in-return numbers in the case law may have been the root of the trial court’s cursory analysis, but comparable numbers seem necessary to assess whether the lost profits represent a severe impact.

Slip op. at 15-16. The court continued:

Because the parcel of property is now clearly defined as the diverted eggs themselves, we are convinced that it was clear error to place sole reliance on the diminution in return metric. The eggs are a discrete asset, the market value of which is readily ascertainable. Indeed, as mentioned above, the parties do not materially dispute the average market value of the eggs in the table market versus the breaker during the regulated period. These data provide a clear picture of the decrease in value of the eggs.

Instead, when we consider all three offered metrics of economic impact, with the primary weight given to the diminution in value, we conclude the trial court clearly erred in determining that Rose Acre suffered a severe economic impact due to the SE regulations. Rose Acre points to no case in which a court has found a diminution in value of 10% as being severe or as favoring a taking. Additionally, the infirmities in the diminution in return metric, as discussed above, warrant against placing much, if any, weight on that calculation on the facts of this case. We hold therefore that, although the monetary loss to Rose Acre was not insignificant, it did not even approach the level of severe economic harm and thus does not strongly favor Rose Acre.

Slip op. at 27-28 (footnote omitted).

On the "character of the government action" Penn Central factor, the court held that Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005) "changed the takings landscape" and that a court can "no longer ask whether the means chosen by the government advance the ends or whether the regulation chosen is effective in curing the alleged ill."  Slip op. at 33. Those questions are reserved for a due process inquiry, which Rose Acre had litigated and lost in the Seventh Circuit. The court held that under the character prong, a court may only look at "'the actual burden imposed on property rights, or how that burden is allocated.'" Slip op. at 34 (quoting Lingle, 544 U.S. at 543).  Because the USDA rules applied to most egg producers nationwide and did not single out Rose Acre, and because the purpose of the regulations was to protect food safety, the character factor tipped in the government's favor.

The court concluded no taking occurred:

When we review all the factual findings above, we conclude that they require a holding of no compensable taking. First, Rose Acre’s economic impact is not severe. Second, although the reasonable investment-backed expectations favor Rose Acre, they are not strong enough to be dispositive. Third, the character of the government’s regulations strongly favors a non-taking.

. . . .

Although Rose Acre may feel otherwise, the law of regulatory takings does not generally compensate property owners when a regulation’s economic impact is slight and temporary but the potential for physical harm to the public is significant. Here, infected eggs could have caused serious illness and possibly even death.

Slip op. at 43-44. Rose Farms' litigation with the federal government started in 1990 which resulted today 19 years, two federal trials, and three appeals later, with a finding of no liability. We hope that Rose Farm didn't and spend the millions in compensation and attorneys fees it was awarded by the CFC. That would have been counting its chickens before they were hatched.  One last bad pun to see if you read this long post to the end.

Cert Denied In Ripeness And Penn Central Case

It's easy to blog a case when you or your colleagues win it, and we've had plenty to talk about lately in that department in eminent domain and zoning law.

On the other hand, it's not so easy to write about a case when you don't prevail. Today is one of those days. The U.S. Supreme Court declined to review the California Court of Appeal's decision in Charles A. Pratt Const. Co. v. California Coastal Comm'n, 76 Cal. Rptr. 2d 466 (Cal. Ct. App. 2008) (the California court's slip opinion available here). The Supreme Court's Order List denying review is posted here.

We blogged about the lower court decision here, the rehearing petition here, and the cert petition here. We (and others) filed amicus briefs, urging the Court to review the case. Our brief is posted here. The two Questions Presented by the cert petition involved whether the ad hoc Penn Central test for whether government action effects a regulatory taking of property can be reduced to bright-line rules, and whether, under the Williamson County ripeness rules, a property owner must continue to pursue a development application when the reviewing agency makes it clear that denial of the application is the "only appropriate course."

A denial of a petition for writ of certiorari does not mean that the Supreme Court approves of the lower court decision or that the issues are not worthy, merely that the case (for whatever reason) is not appropriate for the Court's review. The Penn Central and Williamson County issues remain ripe for review in some case, just not this one.

To paraphrase the good governor of California: "We'll be back."

Materials From 2/20/2009 Land Use Seminar

Here are the links to the cases that I spoke about in my session in today's seminar "Supreme Court, Regulatory Takings and Eminent Domain Update."  Not all of the cases we discussed today are included below, so if you would like a link or more information about a case that is not listed, please email me at rht@hawaiilawyer.com and I will send it to you.

• County of Hawaii v. C & J Coupe Family Limited Partnership, No. 28882 (Dec. 24, 2008) - public use, pretext, and damages for failed taking

The majority opinion by Justice Acoba, joined by Justices Nakayama and Duffy is posted here:

We hold that (1) a landowner in a condemnation action is entitled to damages under HRS § 101-27 where the property at issue is not finally taken in the context of a particular condemnation proceeding, irrespective of whether the government attempts to take the land through subsequent condemnation proceedings; (2) abatement does not apply where the relief sought in two concurrent actions is not the same; and (3) although our courts afford substantial deference to the government's asserted public purpose for a taking in a condemnation proceeding, where there is evidence that the asserted purpose is pretextual, courts should consider a landowner's defense of pretext.  Therefore, (1) automatic denial of statutory damages under HRS §101-27 in Condemnation 1 is vacated and the case remanded for a determination of damages, (2) the court's conclusion that Condemnation 2 was not abated by Condemnation 2 is vacated and the case remanded for a determination of whether the public purpose asserted in Condemnation 2 was pretextual.

Slip op. at 5. Here's the concurring and dissenting opinion by Chief Justice Moon joined by Justice Levinson. The briefs in the case are available here:  Opening Brief, Answering Brief of the County of Hawaii, Reply Brief. Disclosure: we represent the property owner.

• When a project not being built on state or county land meets the definition of "use" of such lands triggering chapter 343 environmental review - Nuuanu Valley Ass'n v. City & County of Honolulu, No. 28599 (Oct. 24, 2008)

• Illinois Supreme Court decision about the 3% "surcharge" on casinos, which was given to horse racing tracks. Empress Casino Joliet Corp. v. Giannoulias, No. 104586 (June 5, 2008)

• Is destruction of evidence seized from an innocent third party a taking? AmeriSource Corp. v. United States, No. 08-497 (cert. petition filed Oct. 15, 2008)

• Development Moratorium a Taking Under Lucas - Monks v. City of Rancho Palos Verdes, No. B201280 (Cal. Ct. App. Oct. 1, 2008)

• No private right of action to enforce zoning - The Hawaii Intermediate Court of Appeals, in Pono v. Molokai Ranch, Ltd., 119 Haw. 163, 194 P.3d 1126 (2008), held that a private party had no standing to enforce the state's land use laws. The Hawaii Supreme Court rejected certiorari review of the case.  Disclosure: we represent the landowner. More here.

• Charles A. Pratt Constr. Co. v. California Coastal Comm'n (cert petition on Williamson County and Penn Central)

• Aspen Creek Estates, Ltd. v. Town of Brookhaven - New York Court of Appeals  (comprehensive taking plan)

• City of Stockton v. Marina Towers LLC - Cal. Court of Appeal (details required in resolution of necessity)

• Resource Investments, Inc. v. United States - Court of Federal Claims (massive opinion and primer on regulatory takings - erroneous exercise of jurisdiction as a temporary taking)

• Florida regulatory takings cases - Florida Supreme Court and District Courts of Appeals

• Substantive due process in the Ninth Circuit after Lingle - The Ninth Circuit Rediscovers Substantive Due Process in Land Use Cases

CFC: Trial Needed On Whether Wrongful Assertion Of Clean Water Act Jurisdiction Is "Extraordinary Delay"

Head's up on an interesting case from the Court of Federal Claims, Resource Investments, Inc. v. United States, No. 98-419L (Court of Federal Claims, Jan. 23, 2009), a massive opinion (84 single-spaced pages) with what at first glance seems to delve into just about every regulatory takings theory known: temporary takings, categorical takings, partial takings, parcel-as-a-whole, Mahon, Penn Central, First English, Lucas, Tahoe-Sierra, Seiber, delay, and ripeness. And those are just the subjects listed on the caption.

We're not going to digest the entire opinion here, just hit some of the highlights. The short story is that the U.S. Army Corps of Engineers wrongfully asserted jurisdiction over property in Washington state proposed to be used for a landfill, and asserted that until the owner procured a section 404 Clean Water Act permit, it could not construct the landfill. The Ninth Circuit ultimately agreed with the landowner, holding that the Corps did not have jurisdiction and that no 404 permit was necessary. The landowner then sued in the CFC, claiming it was owed compensation for a Lucas wipeout during the time it could not use its property because of the Corps' wrongful claims of CWA jurisdiction. The issue was whether this is a temporary taking, or simply "normal" planning delay and therefore not compensable.

Recall that in First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304 (1987), the U.S. Supreme Court held that the Fifth Amendment requires compensation for temporary deprivations of property by regulation. The Court cautioned, however, that "normal delays" in processing would not support claims for temporary takings:

We limit our holding to the facts presented, and, of course, do not deal with the quite different questions that would arise in the case of normal delays in obtaining building permits, changes in zoning ordinances, variances, and the like, which are not before us.

Californians should recognize this issue -- in Landgate, Inc. v. California Coastal Comm'n, 73 Cal. Rptr. 841 (Cal. 1998), the California Supreme Court held that California landowners should expect government agencies to regulate property outside the agencies' jurisdiction, and that the California Coastal Commission's wrongfully blocking a home from being built was simply normal planning delay and not a temporary taking.

Will the CFC hold otherwise?  It's too early to tell. After an exhaustive primer on regulatory takings and inverse condemnation law that starts on page 19 of the opinion ("Traveling the Path to a Taking"), the CFC held that "the court cannot determine here, at the summary judgment stage, whether plantiffs suffered delay, whether that delay was extraordinary, and to whom any such delay is attributable." Slip op. at 83-84. In other words, the parties dispute the facts and a trial is necessary.

There are other issues in the opinion, and we will follow up with another post on those, shortly.

Read the entire opinion here.

Reply In Support Of Petition In Pratt v. Cal. Coastal Comm'n - Penn Central And Williamson County

The property owner has filed its Reply in Support of Petition for a Writ of Certiorari in Charles A. Pratt Const. Co. v. California Coastal Comm'n, No. 08-668 (cert. petition filed Nov. 18, 2008) (SCOTUS docket report here). The petition seeks review of the California Court of Appeal's opinion reported at 76 Cal. Rptr. 2d 466 (Cal. Ct. App. 2008), available here.

The issues presented in the case involve the Penn Central ad-hoc test for regulatory takings, and the "final determination" prong of the Williamson County ripeness rule. The Reply brief argues:

The Brief in Opposition is liberally salted with Respondent California Coastal Commission's assertions of what it refers to as the "facts" (e.g., pp. 5, 11) as well as disparagement of the presentation in the Petition as having "no evidence" (e.g., pp. 7, 11) behind it.

The Brief in opposition thus highlights the problem that call for the Court's review: there has been no trial to establish the facts and the courts below turned what should have been an evidentiary trial into assumptions supposedly made as a matter of law. Building on those deficiencies in the lower courts' rulings, the Commission's brief substitutes self-serving prose and misdirected invective towards Petitioner's counsel in pace of a due process proceeding in which the facts of the controversy -- not just counsel's argumentation -- are presented as proper evidence to an impartial trier of fact.

In light of the standard the Court has established for deciding regulatory taking cases (i.e., "ad hoc" factual determinations [see Pet., pp. 10-18]), an inquiry into evidence is essential. Lower courts that are hostile to private property rights fail or refuse to understand that basic notion, thus showing the need for corrective action by this Court.

As shown in the Petition, the Court's decisions hold that each regulatory taking case must be decided "ad hoc"on its own facts. (E.g., Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 124 [1978].) Of necessity, that can only be done after trial, with the presentation and evaluation of evidence.

Reply at 1-2.

Disclosure: we filed an amicus brief in the case for the Western Manufactured Housing Community Association, available here, which argues:

Because [the Penn Central] framework eschews any "set formula" and relies instead on "essentially ad hoc, factual inquiries," it is, by its very nature, incapable of being subject to the rigid "20 percent is enough value" per se rule established by the California court. The decision below ignored the requirement of a "weighing of all the relevant circumstances," and established a bright-line rule focused solely on economic impact: when the government’s denial of a development proposal leaves a property owner with no more than 20 percent (or as little as 1120 square feet) of her land available for development, the remaining two Penn Central factors become irrelevant. This arbitrary rule is apparently based on nothing more than caprice, since the court below offered no analysis or rationale in support. Lacking this Court’s clarification, the default regulatory takings test has become a standardless exercise in judicial intuition, hidden behind a gloss of objectivity.

The cert petition and the other amici briefs supporting it are posted here. The Reply brief is responding to arguments made the Coastal Commission in its Brief in Opposition, posted here.

Cal. Court of Appeals Revisits (Sort of) Landgate: Of Regulatory Takings, Means-End Analysis, and Due Process

In a lengthy (70 page) opinion, the California Court of Appeals (Sixth District), in Shaw v. County of Santa Cruz, No. H031108 (filed Dec. 19, 2008, ordered published Jan. 16, 2009), held that the government's denial of a ministerial permit did not amount to a regulatory taking.

The opinion sets forth a long factual and procedural history of the case, so we won't repeat it here. The discussion of takings begins on page 34 of the slip opinion, with a good short summary of regulatory takings law, and the various situations when the regulation of land will be deemed to have gone "too far" and requires the payment of just compensation. See slip op. at 34-39. Footnote 39 is particularly interesting, as it correctly notes that Lingle did not wipe out the Agins substantially advance test, but merely relocated it to due process:

The court's holding [in Lingle] is grounded in the concept that for purposes of Fifth Amendment takings jurisprudence, the legitimacy of the government’s action is assumed. What is at issue is the government’s obligation to compensate the landowner for the valid action. (Lingle, supra, 544 U.S. at pp. 543-545.) This analysis is distinct from Fourteenth Amendment due-process considerations in the application of which a court may properly probe whether a regulation substantially advances a legitimate government purpose or whether a regulation is arbitrary or unreasonable. (Id. at pp. 540-544 [formula prescribes an inquiry sounding in due process, not takings, because the failure of a regulation to accomplish a stated or obvious objective renders the regulation arbitrary or irrational so as to violate due process].)

(I recently wrote about the substantially-advance-as-due-process issue in this article.)

The court struggled with what to do with Landgate, Inc. v. California Coastal Comm'n, 17 Cal. 4th 1006, 73 Cal. Rptr. 841 (1998), the case in which the California Supreme Court announced the rule -- apparently tracking Agins -- that governmental authority not advancing a valid objective would amount to a taking. The Shaw court noted that "there are no California appellate cases that expressly hold that Landgate did not survive Lingle," slip op. at 41. The court noted "[b]ecause we conclude that there was no taking under any theory, we need not and do not decide whether Lingle undercuts Landgate." Slip op. at 55, n.47. But, you say, Landgate relied upon an Agins-like takings analysis, and Lingle relocated that test to due process, so isn't the Shaw court just being coy in that footnote? California courts of appeals -- like all intermediate courts -- cannot overrule a California Supreme Court decision, but c'mon, Lingle wiped out the Landgate rule, right?

Maybe not. Recall that the U.S. Supreme Court's decisions on the Fifth and Fourteenth Amendments only set the "floor" below which no state court or state constitution may go, but do not -- as Kelo reminded -- prohibit the states from recognizing greater protections (or differering legal standards) for takings under state constitutions. So even though Lingle held that the substantially advance test is no longer a test for regulatory takings under the U.S. Constitution's takings clause, there is nothing prohibiting the California courts from continuing to adhere to the Landgate rule and hold that the same inquiry is entirely legitimate under the California constitution. Although the California Supreme Court has held that the state takings clause is construed the same way as the federal takings clause, until such time as the California Supreme Court revisits Landgate and conforms it to Lingle, it remains the rule of decision that the lower courts should apply. The Shaw court did just that. See slip op. at 55-59.

The Shaw opinion also discusses substantive due process in the land use context starting at page 42 of the opinion, contrasting it with regulatory takings, and going through some of the recent cases such as Action Apartment, North Pacifica, and Crown Point. Check it out.

Procedural note - read footnote 52 on page 69 of the slip opinion for a clarification of the overused term "waiver," and the distinction between waiver and "forfeiture."  It has always bothered me that lawyers and courts use "waiver" when they really mean "forfeiture," and it is nice to see a court recognize the distinction. 

California Coastal Commission's Brief In Opposition In Charles A. Pratt Construction Co. Cert Petition (Penn Central and Williamson County)

The California Coastal Commission has filed its Brief in Opposition to the cert petition in Charles A. Pratt Const. Co. v. California Coastal Comm'n, No. 08-668 (cert. petition filed Nov. 18, 2008) (SCOTUS docket report here).  The California Court of Appeal's opinion, reported at 76 Cal. Rptr. 2d 466 (Cal. Ct. App. 2008) is available here). 

The issues presented involve the Penn Central ad-hoc test for regulatory takings, and the "final determination" prong of the Williamson County ripeness rule.

We filed an amicus brief in the case, available here. The cert petition and the other amici briefs supporting it are posted here.

More Amici Supporting Grant of Cert in Pratt (Penn Central and Williamson County)

There have now been a total of five briefs amicus curiae filed supporting the petition for writ of certiorari in Charles A. Pratt Construction Co. v. California Coastal Commission, No. 08-668 (cert. petition filed Nov. 18, 2008) (SCOTUS docket report here). 

We wrote here about the California Court of Appeal's decision, reported at  76 Cal. Rptr. 2d 466 (slip opinion available here), the rehearing petition here, and the cert petition here.  The amicus briefs:

• The brief we filed on behalf of Western Manufactured Housing Community Association

• Brief of National Association of Home Builders, California Building Industry Association, Building Industry Association Legal Defense Foundation, and Home Builders Association of Northern California 

• Brief of Pacific Legal Foundation

• Brief of Matteoni, O'Laughlin & Hechtman

• Brief of San Leandro Rock Co., Inc.

The Brief in Opposition of the California Coastal Commission is due January 16, 2009.