The city has filed its Brief in Opposition in Guggenheim v. City of Goleta, No. 10-1125.
That’s the case in which the owners of a mobile home park asserted the city’s mobile home rent control ordinance which the city adopted in 2002, is a taking under the three factor ad hoc test in Penn Central Trans. Co. v. City of New York, 438 U.S. 104 (1978). The en banc Ninth Circuit held that the ordinance was not a taking, since the Guggenheims purchased their park years after the County of Santa Barbara adopted its rent control ordinance, and when the City of Goleta was incorporated in 2002, it adopted and continued the County’s ordinance. According to the Ninth Circuit, the fact that the Guggenheims purchased their land after it was rent controlled was “fatal” to their Penn Central claim, because they could not have “investment-backed expectations” at the time of purchase that their property was free of rent control.
The Guggenheims filed a petition for certiorari, asserting that the Ninth Circuit’s conclusion directly contravened the Supreme Court’s opinion in Palazzolo v. Rhode Island, 533 U.S. 606 (2001), which rejected the proposition that “postenactment purchasers cannot challenge a regulation under the Takings Clause.” Id. at 626. Disclosure: we filed an amicus brief supporting the petition urging the Court to review the case, joining the petitioners in their argument that it was error for the Ninth Circuit to treat the preexisting ordinance as “fatal” to the takings claim in contravention of Palazzolo, and to not analyze the other two Penn Central factors.
The city’s BIO argues that the Ninth Circuit applied all three Penn Central factors, and did not ignore Palazzolo:
Petitioners contend that, in rejecting their claim, the Ninth Circuit, en banc, flouted this Court’s decision in Palazzolo v. Rhode Island, 533 U.S. 606 (2001). Their petition is founded on the false premise that the en banc court adopted a categorical rule barring takings claims by property owners who acquired their property after it became subject to regulation.
Eight judges of the Court of Appeals did not blithely ignore this Court’s holding in Palazzolo and adopt such a categorical rule. Rather, the en banc court found no taking after faithfully applying the three-factor test of Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978), to the unusual facts of this case.
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Second, Petitioners had no investment-backed expectation of using the property in a manner inconsistent with the longstanding rent control regulation. They purchased the property in 1997, ten years after the County amended the challenged rent limits, and they paid a price that reflected those limits. When they purchased the property, Petitioners could not have expected that they could avoid the regulation. Accordingly, in continuing the existing regulation, Respondent did not impair any legitimate expectation about the return Petitioners could earn on that investment.
BIO at 1-2. We’ll post other briefs on our resource page when they become available.