▪ Ninth Circuit: Landowner May Assert Both Takings and Due Process Claims

A must-read decision today from the Ninth Circuit -- Crown Point Development, Inc. v. City of Sun Valley, No. 06-35189 (Nov. 1, 2007).  The court clarified a point that has been a long time coming: a property owner may assert claims under both the Takings and the Due Process Clauses.  In other words, land use guys, the court has finally torpedoed Armendariz v. Penman, 75 F.3d 1311 (9th Cir. 1996) (en banc). 

Armendariz stood for the unusual proposition that a property owner's claim for violations of substantive due process rights were "subsumed" within the owner's claim for violation of the Takings Clause.  Thus, in land-related issues, a property owner could only bring takings claims.

Sun Valley rejected Crown Point's development application.  After pursuing relief in state court, Crown Point filed a federal civil rights action pursuant to 42 USC § 1983, alleging that Sun Valley arbitrarily interfered with its property rights and the denial of the permit was arbitrary.  In other words, a substantive due process claim.  The district court dismissed, relying on Armendariz.  "Constitutional claim involving land?  Must be a takings claim."  This forced election of claims and remedies was an odd rule to say the least: as any first-year student of Civil Procedure will tell you, the rules of pleading generally allow a plaintiff to assert alternate theories of liability, even if those theories may overlap or even conflict.  See, e.g., Fed. R. Civ. P. 8(a) (in a federal complaint "[r]elief in the alternative or of several different types may be demanded"). 

In Lingle v. Chevron, U.S.A., Inc., 544 U.S. 528 (2005), the US Supreme Court held that a claim that a government regulation does not substantially advance a legitimate state interest is grounded in Due Process concerns, not takings.  If a property owner asserts a regulation interferes with economically beneficial uses, it is a takings claim, if the claim is that the government's action is irrational, it is a due process claim.  The Ninth Circuit's rule of forced election of remedies in Armendariz could not have survived Lingle's holding, yet the Ninth Circuit had not expressly revisited the issue in the two years since the Supreme Court decision.  Now it has, holding:

Accordingly, it is no longer possible in light of Lingle and [County of Sacramento v.] Lewis[, 523 U.S. 833 (1998)] to read Armendariz as imposing a blanket obstacle to all substantive due process challenges to land use regulation.

Slip op. at 14459.  The court compared takings claims and substantive due process claims in the land use context.  When a property owner claims a per se taking under Loretto or Lucas, or an ad hoc taking under Penn Central, the claim is analyzed under the Fifth Amendment.  If, on the other hand, the property owner asserts, as Crown Point does, that the government has acted illegitimately, it is a due process claim:

Lewis and Lingle indicate that a due process claim is not precluded.  Lingle, 544 U.S. at 542 (“[A] regulation that fails to serve any legitimate governmental objective may be so arbitrary or irrational that it runs afoul of the Due Process Clause.”) (citing Lewis, 523 U.S. at 846); see Lingle, 544 U.S. at 549  Kennedy, J. concurring) (noting that the Lingle decision “does not foreclose the possibility that a regulation might be so arbitrary or irrational as to violate due process”).

The Ninth Circuit remanded the case to the district court for further proceedings.  Tom Caso's thoughts are posted on his Opening Brief blog, "Due Process rights for property owners live again in the 9th Circuit," and Professor Patty Salkin's are posted on her Law of the Land blog here.  The opinion is posted here.