Takings & Inverse Condemnation

By Glen C. Hansen

In Lockaway Storage v. County of Alameda (2013) 216 Cal.App.4th 161, the Court of Appeal for the First Appellate District affirmed a trial court judgment that found that the County of Alameda was liable for $989,640.96 in damages for a temporary taking of plaintiff’s property, where the county stopped work on plaintiff’s project in light of a growth control initiative, even though the project fell within an exemption in the initiative and county officials failed to even consider such exemption, and where the county’s action in stopping the project constituted an unreasonable change from the County’s prior representations made to the property owner.


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By Glen C. Hansen

For nearly twenty years, Fifth Amendment takings challenges to adjudicative land-use exactions and permit conditions have been governed by the dual Supreme Court cases of Nollan v. California Coastal Commission, 483 U.S. 825 (1987),and Dolan v. City of Tigard, 512 U.S. 374 (1994). In Nollan, the Court held that a government could, without paying the compensation, demand the easement as a condition for granting a development permit the government was entitled to deny, provided that the exaction would substantially advance the same government interest that would furnish a valid ground for denial of the permit. The Court further refined that requirement in Dolan, holding that an adjudicative exaction requiring dedication of private property must also be “‘roughly proportional’ . . . both in nature and extent to the impact of the proposed development.” However, Nollan and Dolan involved the dedication of real property interests. In Koontz v. St. Johns River Water Management District, ___ U.S. ___, 2013 U.S. Lexis 4918 (2013), the Court held in a 5-4 decision that “the government’s demand for property from a land-use permit applicant must satisfy the requirements of Nollan and Dolan even when the government denies the permit and even when its demand is for money.” 


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By William W. Abbott

In California Building Industry Assn. v. City of San Jose (June 6, 2013, H038563) ___ Cal.App.4th ___, the City of San Jose adopted an inclusionary ordinance, requiring that new residential projects include units affordable to specified income ranges. Alternatively, the ordinance permitted the developer to pay an in lieu fee or dedicate land. The California Building Industry Association (“CBIA”) filed suit, challenging the validity of the ordinance on its face on the basis that the ordinance lacked any nexus to the deleterious effects of new residential development. CBIA did not allege that a compensable takings had occurred, but rather argued that the City lacked sufficient justification for the ordinance. The trial court agreed with CBIA and invalidated the ordinance. The City appealed.


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By Glen Hansen

In Freeny v. City of San Buenaventura (June 4, 2013, B240893) ___ Cal.App.4th ___, the Court of Appeal for the Second Appellate District held, in an action against a city and five city council members for compensatory and punitive damages for voting against an application for building permits and variances, that public employees’ tort immunity for legislative decision-making under Government Code sections 820.2, 821 and 821.2 applies even when that decision-making is also alleged to involve the making of misrepresentations motivated by actual fraud, corruption or actual malice.


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By Glen C. Hansen

Lost Tree Village Corp. v. United States, ___ F.3d ___, 2013 U.S. App. LEXIS 690 (Fed.Cir. 2013). Between 1968 and 1974, Lost Tree Village Corporation (“Lost Tree”) purchased approximately 2,750 acres of property on Florida’s mid-Atlantic coast, which included a barrier island on the Atlantic Ocean. That property included 4.99 acres now known as Plat 57, which is part of the entire peninsula known as the Island of John’s Island. From 1969 through the mid-1990s, Lost Tree developed approximately 1,300 acres it purchased into the upscale gated residential community of John’s Island. The development was made in a piecemeal manner, and not as a master-planned community.


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This case involved a city program to have property owners with property near the airport apply to voluntarily sell their properties to the city. After acquiring the properties, the city demolished all buildings and left the land vacant to mitigate for incompatible residential dwellings near the airport. Certain property owners that chose not to sell their properties sued the city on the grounds that its actions amounted to a taking. The appellate court disagreed, finding that the program was voluntary and the property owners could not be compensated for the decrease in the property value.
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In order to avoid having your takings claim dismissed, your timing has to be just right. Unfortunately for Colony Cove Properties, LLC (“Colony Cove”), the timing was off, and its takings claim was dismissed by the court for being both too late (facial challenge) and too early (as-applied challenge).
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By Cori Badgley

In 2009, a three-judge panel for the Ninth Circuit Court of Appeals made a controversial determination that a rent control ordinance relating to mobilehome parks constituted a regulatory taking. (See “Take This! Wealth-Transfer under Rent Control Ordinance Constitutes a Regulatory Taking.”) In 2010 in Guggenheim v. City of Goleta (December 22, 2010, No. 06-56306) __ F.3d __ (“Guggenheim II”), the Ninth Circuit Court of Appeals sitting en banc reversed its previous decision, holding that the plaintiffs had no distinct investment-backed expectations when they purchased the property. Therefore, the rent control ordinance did not constitute a taking of their property.


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