S.C. Denies Review in Takings Award Against County

Friday, August 23, 2013

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S.C. Denies Review in Takings Award Against County

By a MetNews Staff Writer

The California Supreme Court has left standing a First District Court of Appeal ruling in favor of an Alameda County property owner awarded more than $1.7 million in damages and attorney fees as a result of a permit denial.

The justices, at their weekly conference in San Francisco Wednesday, voted 6-0 to deny the county’s petition for review in Lockaway Storage v. County of Alameda, 2013 Cal.App. Lexis 365. By the same vote, the court denied a request by the California State Association of Counties that the opinion be depublished.

Justice Carol Corrigan was absent from the conference and did not participate in the vote.

Lockaway purchased property in Alameda County in 2000, relying on an existing permit that would have allowed it to build a boat and RV self-storage facility. Although it worked with county officials for the next two years on the project, according to the company’s evidence, the county concluded in 2002 that Lockaway needed a new permit, which the county denied.

The county based its actions on Measure D, a general plan amendment approved by voters in November 2000 that restricted development in areas outside several cities along the I-580 corridor. The company protested that the measure did not apply because it specifically exempted projects for which permits had already been issued.

When the county declined to allow it to proceed, the company sued, and eventually obtained the permit. It then sued for damages based on a temporary regulatory taking, and was awarded $990,000 in damages and $728,000 in attorney fees.

Justice Peter Siggins, writing for the Court of Appeal, said the plaintiff had satisfied the standard for showing a compensable regulatory taking under Penn Central Transp. Co. v. New York City (1978) 438 U.S. 104. The case requires courts to balance the “economic impact” of the regulation on the property owner; the extent to which the regulation interferes with “distinct investment-backed expectations,” and the “character of the governmental action.”

Each of those factors weighed in Lockaway’s favor, Siggins said, adding that “the County’s regulatory about face” regarding the status of the project “was manifestly unreasonable.”

Siggins questioned the continuing relevance of Landgate v. California Coastal Commission (1998) 17 Cal.4th 1006, holding that delays in the permitting process do not generally give rise to temporary takings claims. That ruling, he noted, was based on an earlier U.S. Supreme Court case that was overruled subsequent to Landgate, in Lingle v. Chevron U.S.A. Inc. (2005) 544 U.S. 528.

“In light of Lingle, we reject the County’s contention that Landgate establishes an independent test for evaluating whether government action is a regulatory taking,” Siggins wrote. And he went on to say that even if Landgate remains good law, it does not apply to Lockaway, because the county’s actions in the case were not “normal delay” caused by plausible mistakes.

The county’s position that Measure D barred the project, despite the fact that the prior owner obtained the necessary conditional use permit, was “[n]onsense,” the justice wrote. “In fact, the County does not dispute the trial court’s express finding that the County ‘utterly failed to analyze, account for, or even mention, the safe harbor language’…during the regulatory process leading up to this litigation.”