Opinion ID: 3062041
Heading Depth: 2
Heading Rank: 1

Heading: Facial Takings Clause Challenges

Text: On appeal, the developers again argue their challenge is exempt from both Williamson County ripeness requirements because it is a facial challenge. In support of their argument, however, the developers rely primarily on a line of cases now made obsolete by the Supreme Court’s recent decision in Lingle. In Lingle, the Supreme Court considered the validity of challenges brought under the Takings Clause alleging the regulation at issue did not substantially advance a legitimate state interest. 544 U.S. at 545. In concluding the “substantially advances” theory was not appropriate under the Takings Clause, the Supreme Court explained that the Takings Clause merely requires compensation for an otherwise valid governmental interference with private property rights. Id. at 543. It does not, in and of itself, provide a cause of action for allegations that the interference with property rights is arbitrary or irrational, a theory that instead resembles a due process claim. Id. at 542, 544. Despite the developers’ insistence, the claim the developers bring here under the Takings Clause is not a facial claim challenging the validity of the -7- regulation itself. That type of claim is properly brought as a due process claim as decided in Lingle. Rather, they advance a regulatory takings claim that, as stated in their complaint, the ordinances “do not provide for any compensation for the burdens they place” and thus “constitute an illegal taking of property.” 2 The developers’ claim here is therefore unlike the facial claims at issue in the cases on which they rely, which concern instead the now-defunct substantially advances claims under the Takings Clause. Yee v. City of Escondido, cited by the developers, is a case in which the property owners used the “substantially advances” theory to allege a regulatory taking. 503 U.S. 519, 534 (1992). Although the Court declined to address the merits of the claim because it was not encompassed within the question presented on certiorari, the Court noted the challenge was not subject to the Williamson County requirements. Id. at 534, 537. It reasoned that the “substantially advances” claim, a means of challenging the authority of the government to regulate in a certain manner in the first place, did not depend on how the regulation applied to any particular piece of property or whether compensation was available. See id. Likewise, in San Remo Hotel, L.P. v. City & County of 2 Although it is clear the claim is not a facial claim attacking the validity of the regulatory action, the parties have uniformly referred to this as a facial claim and this court declines to recharacterize it. The sole question presented by the parties is whether the second Williamson County requirement applies to the claim. As discussed below, however the claim at issue here is labeled, there is no support for waiving the second Williamson County requirement in this case. -8- San Francisco, the Supreme Court stated the plaintiffs would not have had to ripen their facial challenges to a regulation based on the “substantially advances” theory to bring the action in federal court, with the immediate caveat that the theory had been rejected as a takings claim by Lingle. 545 U.S. 323, 340 n.23, 346 & n.25 (2005). Although these cases suggest facial challenges are not subject to the same ripeness requirements, those facial challenges are no longer available under the Takings Clause. The “substantially advances” takings theory, now obsolete, differs dramatically from a Takings Clause claim alleging that a legislative or regulatory action, while advancing an authorized purpose, effectuates a taking of property without just compensation. The former, a claim that governmental interference with property rights exceeds its permissible scope of authority, does not depend on whether the landowner subject to the regulation has been compensated; the regulatory action is invalid whether compensation is provided or not. 3 See Lingle, 544 U.S. at 543. Because no amount of compensation would alter the outcome of 3 There is a similarity in this respect between the now-obsolete “substantially advances” challenges and valid Takings Clause claims alleging the taking was not for “public use.” In “public use” Takings Clause challenges no amount of compensation would render the taking constitutional because it was in excess of the government’s authority to take private property. In the public use context, courts also have not applied the requirement that the plaintiff first seek compensation before bringing suit, decisions that support the distinction we draw today. See Fideicomiso De La Tierra Del Cano Martin Pena v. Fortuno, 604 F.3d 7, 16 (1st Cir. 2010) (collecting cases). The developers have made no claim that the provision of affordable housing is not a proper public use for which the taking of private property is authorized. -9- such a claim, a waiver of the Williamson County requirement that the plaintiff first seek compensation before mounting a no-longer-available “substantially advances” Takings Clause challenge is appropriate. In contrast, an otherwise proper interference with property rights amounting to a regulatory taking, whether under Lucas, Loretto, or Penn Central, is constitutional so long as compensation is provided. Compensation negates the constitutional Takings Clause claim altogether. See Williamson County, 473 U.S. at 194. A plaintiff might argue the Williamson County requirement is met if a regulation on its face makes compensation unavailable or if compensation can be presumed unavailable by the nature of the regulation. See, e.g., Eastern Enterprises v. Apfel, 524 U.S. 498, 521 (1998) (plurality) (presuming compensation unavailable where challenged Act required direct transfer of funds). In other cases, plaintiffs may be able to demonstrate that the state has provided no procedure for seeking compensation. See Williamson County, 473 U.S. at 195. Unless a method for seeking compensation is unavailable or compensation is otherwise foreclosed, however, property owners will only be able to show compensation has been denied after first seeking compensation through an available procedure. The developers fare no better in their reliance on the post-Lingle cases in other circuits. The Fourth Circuit’s decision in Holliday Amusement Co. of Charleston v. South Carolina, 493 F.3d 404 (4th Cir. 2007), instead supports this -10- court’s decision today. There, the court notes that a facial challenge alleging a regulatory action exceeds permissible authority is immediately ripe. Id. at 407. It goes on to conclude, however, that the plaintiff’s claim is not a facial claim that regulatory action exceeds permissible scope, but rather, just like the claim at issue here, is a regulatory takings claim. See id. Accordingly, it applied the second Williamson County requirement. Id. The developers’ argument is likewise not supported by the decisions they cite from the First or Seventh Circuits. The First Circuit, in Asociacion De Subscripcion Conjunta Del Seguro De Responsabilidad Obligatorio v. Flores Galarz, stated facial claims are exempt from the requirement that plaintiffs first seek compensation, but relied on cases brought under the “substantially advances” theory. 484 F.3d 1, 13-14 (1st Cir. 2007). The First Circuit went on to analyze whether the plaintiff’s claim was ripe under Williamson County anyway, and concluded the plaintiff had met the compensation requirement by demonstrating there was no adequate procedure aimed at providing compensation. Id. at 16-17. This approach merely reflects the unremarkable proposition that the second prong for ripeness under Williamson County is inapplicable if a procedure for compensation is not available or compensation is otherwise foreclosed. 473 U.S. at 195. Thus, Asociacion, provides little support for the proposition that the second Williamson County requirement is inapplicable to the claim at issue here. The Seventh Circuit’s statements concerning facial challenges in its Peters v. -11- Village of Clifton decision are similarly dicta, and the court there concludes the plaintiff actually was subject to the Williamson County requirement that he first seek compensation. See 498 F.3d 727, 732-33 (7th Cir. 2007). Courts considering claims alleging a regulatory taking without just compensation, even when characterized as facial claims, have applied the second Williamson County requirement consistent with this court’s decision today. In Equity Lifestyle Properties, Inc. v. County of San Luis Obispo, the Ninth Circuit considered a challenge to a city ordinance as a taking without just compensation. 548 F.3d 1184, 1186 (9th Cir. 2008). The court applied the requirement to seek compensation if procedures are available to claims labeled both as facial and asapplied challenges, although it concluded that because no available procedure for seeking compensation existed, the plaintiff was excused from the requirement as to its facial claim. Id. at 1190 & n.13, 1193 (9th Cir. 2008). The Third Circuit has likewise held that plaintiffs alleging a taking without just compensation, although framed as a facial challenge, are not excused from the Williamson County requirement that they seek compensation prior to bringing suit. County Concrete Corp. v. Twp. of Roxbury, 442 F.3d 159, 164-65 (3d Cir. 2006). Thus, a plaintiff mounting a challenge to a regulation alleging a taking without just compensation is required to meet the second Williamson County requirement before bringing suit either by demonstrating a procedure for seeking compensation is unavailable or by first seeking compensation. That such -12- challenges are accordingly difficult to bring merely reflects the basic framework of the Takings Clause under which claims are inextricably tied to the question of compensation. See Lingle, 544 U.S. at 544. Here, the developers have not argued compensation procedures are unavailable, and it is undisputed they have not brought an inverse condemnation action in state court. They have thus not met the ripeness requirements of Williamson County.