US Supreme Court Orders

SUPREME COURT OF THE UNITED STATESCLAUDE LAMBERT ET UX. v. CITY AND COUNTY OFSAN FRANCISCO ET AL.ON PETITION FOR WRIT OF CERTIORARI TO THE COURT OFAPPEAL OF CALIFORNIA, FIRST APPELLATE DISTRICTNo. 99-697. Decided March 27, 2000    The petition for a writ of certiorari is denied.    JUSTICE SCALIA, with whom JUSTICE KENNEDY andJUSTICE THOMAS join, dissenting from the denial ofcertiorari.    Petitioners Claude and Micheline Lambert own theCornell Hotel in San Francisco.  The hotel has 24 residen-tial units and 34 tourist units.  After experiencing diffi-culty renting the hotel's residential units, petitionersapplied to the San Francisco Planning Commission for aconditional use permit to convert those units to touristuse.*   That request implicated two bodies of San Fran-cisco's land-use law: the Planning Code and the Residen-tial Hotel Unit Conversion and Demolition Ordinance(HCO).  The Planning Code provides that a tourist hotelmay not be "significantly altered, enlarged, or intensified,except upon approval of a new conditional use applica-tion."  S. F. Planning Code, Art. 1.7, S178(c) (2000).  TheHCO prohibits the issuance of a permit for the conversionof units from residential to tourist use unless the proprie-tor agrees to provide either one-to-one replacement forthose units or to pay a portion of the replacement costs.See S. F. Admin. Code, ch. 41, S41.13 (2000).    Pursuant to the HCO, the city obtained two appraisalsof the replacement costs for the units petitioners wished toconvert.  See 67 Cal. Rptr. 2d 562, 570 (1997) (Strankman,P. J., dissenting).  The first appraisal was $488,584 andthe second was $612,887; the city settled on $600,000.  Seeibid.  Petitioners, however, offered only $100,000.  Seeibid.  After the Planning Commission denied the permitapplication, petitioners brought the present suit.  Theycontended that the replacement fee is unconstitutionalunder this Court's decisions in Nollan v. California CoastalComm'n, 483 U. S. 825 (1987), and Dolan v. City of Tigard,512 U. S. 374 (1994), which held that a burden imposed as acondition of permit approval must be related to the publicharm that would justify denying the permit, and must beroughly proportional to what is needed to eliminate thatharm.  The California Court of Appeal affirmed the trialcourt's rejection of petitioners' claim.  It held that the HCOplayed no part in the commission's decision, and therefore"San Francisco did not demand anything from [petitioners]as a condition of a use permit."  67 Cal. Rptr. 2d, at 569.Instead, the court maintained, the commission relied solelyon the Planning Code and, basing its decision upon suchtraditional zoning concerns as compatibility with sur-rounding development, effect on traffic patterns, and avail-ability of housing stock, "simply denied the permit outright."Ibid.  Because, the court continued, "neither a property rightnor money was in fact taken from [petitioners], there [was]no reason to determine if a taking would have occurred had[petitioners] been required to pay $600,000 as a condition ofa use permit, and thus there [was] nothing requiring reviewunder" Nollan and Dolan.  67 Cal. Rptr. 2d, at 569.    The record belies the Court of Appeal's claim that thecommission ignored petitioners' refusal to meet its de-mand for a $600,000 payment.  After acknowledging peti-tioners' offer of $100,000, the commission compared thisfigure with the amounts offered by two other hotels thathad successfully requested similar conversions.  1 Appel-lants' App. in No. A076116 (Cal. Ct. App.), pp. 100, 102.  Itnoted that in those two applications, the fee amounted to$10,000 and $15,000 per room, respectively.  See id., at102.  (The fee in petitioners' case, by contrast, amounted toonly $3,226 per room.  See 67 Cal. Rptr. 2d, at 571.)  Thecommission then found that petitioners' application was"not comparable to those previously granted . . . ," becausepetitioners "failed to demonstrate that the amount offered"was "sufficient to mitigate the loss of housing stock."  1Appellants' App., at 102.  It is simply and obviously nottrue that the commission ignored petitioners' refusal tosatisfy its fee demand.    The Court of Appeal itself, after asserting that "SanFrancisco did not demand anything" from petitioners, 67Cal. Rptr. 2d, at 569, in the next breath found it "some-what disturbing that San Francisco's concerns aboutcongestion, parking and preservation of a neighborhoodmight have been overcome by payment of [a] significantsum of money," ibid. (emphasis added).  This observationmakes no sense, of course, unless the court concluded fromthe record that the commission might have rendered adifferent decision if petitioners had been more generous.It sought to evade the natural consequence of that conclu-sion with the following unelaborated assertion: "That thePlanning Commission might have granted the permit uponpayment of $600,000 does not make its refusal to issue thepermit into a taking."  Ibid. (emphasis added).    There are three possible readings of the Court of Ap-peal's opinion.  First, and most obviously, one might takeat face value the court's factual finding that the fee playedno role in the decision.  That would be a gross distortion ofthe record.    Secondly, one might ignore the court's initial see-no-evildisclaimer, and assume that it accepted what the recordundeniably showed, that petitioners' refusal to meet thefee demand was a motivating force behind the commis-sion's decision.  On that assumption, the court's refusal toapply Nollan and Dolan might be thought to rest upon itsdetermination that that factor was irrelevant, since thecommission also relied upon ordinary criteria under thePlanning Code.  But it is always the case that if the permitapplicant does not yield to the extortionate demand, theordinary criteria will be invoked to deny his permit.  Ifindeed unjustified denial can constitute a taking (thequestion presented by the third basis for the decision,discussed below), Nollan and Dolan can surely not beevaded by simply adding boilerplate "ordinary criteria"language to the denial.  The increasing complexity of land-use permitting processes, and of the criteria by whichpermit applications are judged, makes an "ordinary crite-ria" claim almost always plausible.  When there isuncontested evidence of a demand for money or otherproperty-and still assuming that denial of a permit be-cause of failure to meet such a demand constitutes a tak-ing-it should be up to the permitting authority to estab-lish either (1) that the demand met the requirements ofNollan and Dolan, or (2) that denial would have ensuedeven if the demand had been met.  Cf. Mt. Healthy City Bd.of Ed. v. Doyle, 429 U. S. 274 (1977).  The record (and theCourt of Appeal's opinion) make clear that the lattercannot be established here.    Finally, and still on the assumption that the Court ofAppeal acknowledged that petitioners' failure to accede tothe fee demand was a motivating factor in the commis-sion's denial, the court's refusal to apply Nollan and Dolanmight rest upon the distinction that it drew between thegrant of a permit subject to an unlawful condition and thedenial of a permit when an unlawful condition is not met.See Cal. Rptr. 2d, at 569 (Strankman P. J., dissenting)(characterizing the majority's opinion in this fashion). From one standpoint, of course, such a distinction makesno sense.  The object of the Court's holding in Nollan andDolan was to protect against the State's cloaking within thepermit process " 'an out-and-out plan of extortion,' " Nollan,483 U. S., at 837 (quoting J. E. D. Associates, Inc. v. Atkin-son, 121 N. H. 581, 584, 432 A. 2d 12, 14-15 (1981)).  Thereis no apparent reason why the phrasing of an extortionatedemand as a condition precedent rather than as a conditionsubsequent should make a difference.  It is undeniable, onthe other hand, that the subject of any supposed taking inthe present case is far from clear.  Whereas in Nollan therewas arguably a completed taking of an easement (the home-owner had completed construction that had been condi-tioned upon conveyance of the easement), and in Dolanthere was at least a threatened taking of an easement (if thelandowner had gone ahead with her contemplated expan-sion plans the easement would have attached), in the pres-ent case there is neither a taking nor a threatened taking ofany money.  If petitioners go ahead with the conversion oftheir apartments, the city will not sue for $600,000 imposedas a condition of the conversion; it will sue to enjoin andpunish a conversion that has been prohibited.    The first two of the conceivable bases for the Court ofAppeal's decision are so implausible as to call into ques-tion the state court's willingness to hold state administra-tors to the Fifth Amendment standards set forth by thistribunal.  There is reason to believe that this may be morethan a local and isolated phenomenon.  See, e.g., Delaney,Development Agreements: The Road from Prohibition to"Let's Make a Deal!" 25 Urb. Law. 49, 52 (1993) ("In addi-tion to anti-development attitudes and vesting problems,property owners and developers are confronting decisionsof state courts which either ignore or do not follow the'essential nexus' standard set forth in Nollan v. CaliforniaCoastal Comm'n to validate development exactions" (foot-note omitted)); M. Berger, Recent Developments in theLaw of Inverse Condemnation, Q203 ALI-ABA Video LawReview Study 1, 4 (1991) ("Last year, we noted that theCalifornia appellate courts had reacted to the SupremeCourt's decisions in First English Evangelical LutheranChurch v. County of Los Angeles, (1987) 482 U. S. 304 andNollan v. California Coastal Comm'n (1987) 483 U. S. 825by seeking ways to evade their evident mandate, eitherprocedurally or substantively").  Were they the only argu-able bases for the decision I would favor summary rever-sal, and remand for conduct of the Nollan-Dolan analysis.The third basis, however, is at least a plausible one, andraises a question that will doubtless be presented in manycases.  Though I am unaware of a conflict of authority onthe precise point, the other grounds upon which the courtrelied entitle this case to our attention, and should over-come our usual preference for cases that present actualconflicts.  I would therefore grant certiorari and schedulethe case for argument.  * When petitioners first sought to convert their residential units totourist use, the hotel contained 31 residential units.  Petitioners weresuccessful, however, in convincing the San Francisco Board of PermitAppeals to reclassify seven of those as tourist units, producing thehotel's configuration noted in the text.

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