Cal. Court of Appeals: Extension of Ordinance Allows New Inverse Condemnation Challenge

When must a landowner challenge a land use regulation she claims illegally impact her property?  Talk to a lawyer, and they're usually going to say that you should act sooner than later, and often the time limitations are very short. Under California law, for example, facial challenges to a zoning ordinance must be brought within 90 days of enactment:

Except as provided in subdivision (d), no action or proceeding shall be maintained in any of the following cases by any person unless the action or proceeding is commenced and service is made on the legislative body within 90 days after the legislative body's decision:

. . . .

(B) To attack, review, set aside, void, or annul the decision of a legislative body to adopt or amend a zoning ordinance.

Cal. Gov't Code § 65009(c)(1)(B). But what about when an ordinance is amended -- does the enactment of a "new" ordinance (in whole or in part) allow a challenger to go back and challenge the old bits?  In Action Apartment Ass'n, Inc. v. Santa Monica Rent Control Bd., 509 F.3d 1020 (9th Cir. 2007) (which we analyzed here), the Ninth Circuit held no (in that case it was a two year statute of limitations). The plaintiff in that case challenged an ordinance within two years after it was amended, but the new lawsuit did not challenge the amendmended parts of the ordinance, so the court dismissed the case.

In Arcadia Dev. Co. v. City of Morgan Hill, No. H032201 (6th Dist. Ct. App., Dec. 16, 2008), a landowner brought takings and equal protection challenges to the city's 10-year extension of a density restriction. The trial court dismissed since the lawsuit was not brought within 90 days of the 1990 enactment of the original ordinance.  The court of appeals reversed, noting the plaintiff was not challenging the 1990 ordinance, and that the recent amendment gave rise to a new cause of action, which was timely insituted.  The court's analysis begins on page 8 of the slip opinion, and is based on the nature of an inverse condemnation claim and when it "accrued" --

In our view, the question is best analyzed by determining whether there is a factual basis for distinguishing between City’s 1990 decision to adopt the Density Restriction and the 2004 decision to continue the restriction for an additional 10 years.

. . . .

The temporary nature of the 1990 restriction also means that extending it for 10 additional years was a new burden upon the Arcadia property, triggering a new inverse condemnation claim. Arcadia’s inverse condemnation cause of action alleged a regulatory taking as opposed to a taking based upon the actual physical occupation of or damage to real property. Where a regulatory taking is alleged, "compensation is required only if considerations such as the purpose of the regulation or the extent to which it deprives the owner of the economic use of the property suggest that the regulation has unfairly singled out the property owner to bear a burden that should be borne by the public as a whole." Arcadia alleges the type of regulatory taking that is analyzed pursuant to the Penn Central line of cases. The Penn Central
analysis requires consideration of several factors "including the regulation’s economic impact on the claimant, the extent to which it interferes with  distinct investment-backed expectations, and the character of the government action." The aim is to identify regulatory actions that are "functionally equivalent to a direct appropriation of or ouster from private property" by focusing upon "the severity of the burden that government imposes upon property rights." The duration of the regulation is one of the important factors that a court must consider in determining the severity of that burden.

Slip op. at 9, 12-13 (citations omitted). 

Note: although the court labeled Gov't Code § 65009 a "statute of limitations," it operates more like a "statute of repose" since its purpose is to "'provide certainty for property owners and local governments regarding decisions...and thus to alleviate the 'chilling effect on the confidence with which property owners and local governments can proceed with projects.'" Slip op. at 7.