Opinion ID: 810963
Heading Depth: 2
Heading Rank: 2

Heading: State Takings Claim

Text: Plaintiffs next argue that, even if the ordinances do not constitute a taking under the Federal Constitution, the ordinances 12974 LAUREL PARK COMMUNITY v. CITY OF TUMWATER nevertheless effect a taking under the state constitution.4 Article I, section 16 of the Washington Constitution provides, in relevant part: “No private property shall be taken or damaged for public or private use without just compensation having been first made . . . .” Commentators have asserted that the Washington Supreme Court cases that interpret that provision are confusing and that discerning the applicable analytical framework is difficult. Roger D. Wynne, The Path Out of Washington’s Takings Quagmire: The Case for Adopting the Federal Takings Analysis, 86 Wash. L. Rev. 125 (2011); Jill M. Teutsch, Comment, Taking Issue with Takings: Has the Washington State Supreme Court Gone Too Far?, 66 Wash. L. Rev. 545 (1991); Richard L. Settle, Regulatory Taking Doctrine in Washington: Now You See It, Now You Don’t, 12 U. Puget Sound L. Rev. 339 (1989); see also Guimont v. City of Seattle, 896 P.2d 70, 75-76 (Wash. Ct. App. 1995) (describing the doctrine as “the complex, confusing and often-ethereal realm of theoretical law that has developed in Washington under the taking clause”). Quagmire or not, we need not wade far into this area of Washington law, because Plaintiffs advance only two specific arguments—both leaning heavily on the Washington Supreme Court’s decision in Manufactured Housing— concerning state takings law. We turn to that case. [10] In Manufactured Housing, 13 P.3d at 185, the Washington Supreme Court considered the constitutionality of a state law that “g[ave] qualified tenants a right of first refusal to purchase a mobile home park.”5 The court held that “a right 4 The district court did not analyze this issue. Because this is a pure issue of law that the parties have briefed fully, we decide it on the merits. Bibeau v. Pac. Nw. Research Found. Inc., 188 F.3d 1105, 1111 n.5 (9th Cir. 1999). 5 The court described the act as follows: To exercise a right of first refusal, the tenants must organize into a “qualified tenant organization” and give the park owner LAUREL PARK COMMUNITY v. CITY OF TUMWATER 12975 of first refusal, even one created by statute, can create an interest in property.” Id. at 192. The court reasoned that “[a] right of first refusal to purchase is a valuable prerogative, limiting the owner’s right to freely dispose of his property by compelling him to offer it first to the party who has the first right to buy.” Id. (internal quotation marks omitted). Citing a treatise, the court concluded that “the right to grant first refusal is a part of ‘the bundle of sticks’ which the owner enjoys as a vested incident of ownership.” Id. at 193 (footnote omitted). “Property is not one single right, but is composed of several distinct rights, which each may be subject to regulation. The right of property includes four particulars: (1) right of occupation; (2) right of excluding others; (3) right of disposition, or the right of transfer in the integral right to other persons; (4) right of transmission.” Id. (internal quotation marks and brackets omitted). Accordingly, “the statute deprives park owners of a fundamental attribute of ownership.” Id. at 194; see also id. (“The instant case falls within the rule that would generally find a taking where a regulation deprives the owner of a fundamental attribute of property ownership.”). written notice of “a present and continuing desire to purchase the mobile home park.” Once the park owner has received such notice, the park owner must notify the tenants of any agreement to sell the park to a third party, as well as disclose the agreement’s terms. If the park owner fails to properly notify the qualified tenant organization, a pending third party sale is voidable. Upon receiving proper notice, the tenants have 30 days in which to pay the park owner two percent of the third party’s agreed purchase price and to tender a purchase and sale agreement as financially favorable as the agreement between the owner and the third party. If the tenants meet these requirements within the 30-day period, the park owner must sell them the park. If, however, the tenants fail to meet these requirements or if, in the case of seller financing, the owner determines selling the park to the tenants would create a greater financial risk than selling to the third party, the owner may proceed with the sale to the third party. Manufactured Hous., 13 P.3d at 185 (citations and footnotes omitted). 12976 LAUREL PARK COMMUNITY v. CITY OF TUMWATER [11] The court held, additionally, that “we are persuaded that a taking has occurred in this case not only because an owner is deprived of a fundamental attribute of ownership, but also because this property right is statutorily transferred” to the park residents, who can exercise the right of first refusal. Id. “[T]he actual effect of [the statute] is more closely akin to the exercise of eminent domain . . . because the property right is not only taken, but it is statutorily transferred to a private party for an alleged public use.” Id. [12] Plaintiffs first argue that the ordinances have destroyed one of the sticks in the bundle representing a fundamental property right, by depriving the parks’ owners of the right to dispose of their property as they choose and effectively conferring control of that right on the tenants. We disagree. As an initial matter, the ordinances here do not at all limit the owners’ ability freely to dispose of the property. Indeed, one owner appears to have sold his property. [13] The ordinances restrict to some extent the owners’ ability to use their properties, because they can no longer build multi-family housing, for example. But imposing use restrictions on property—as distinct from restrictions on alienation—is the essence of zoning. The Washington Supreme Court consistently has defined the fundamental attributes of property rights by reference to rights that do not include the free use of the property. See id. at 193 (identifying the fundamental rights of occupation, excluding others, disposition, and transmission); see also Guimont, 854 P.2d at 10 (“[T]he court must first ask whether the regulation destroys or derogates any fundamental attribute of property ownership: including the right to possess; to exclude others; or to dispose of property.”); Presbytery of Seattle v. King County, 787 P.2d 907, 912 (Wash. 1990) (“[T]he court should ask whether the regulation destroys one or more of the fundamental attributes of ownership—the right to possess, to exclude others and to dispose of property.”). Indeed, concerning use, the court has defined a fundamental attribute of property only with respect LAUREL PARK COMMUNITY v. CITY OF TUMWATER 12977 to being able to make some economically viable use of the property. See, e.g., Guimont, 854 P.2d at 10 (“[A]nother ‘fundamental attribute of property’ appears to be the right to make some economically viable use of the property.”). Plaintiffs do not argue, of course, that the ordinances deprive them of all economically viable uses; they are instead being encouraged to continue the economically viable use that they freely chose. In sum, the ordinances do not destroy or limit any fundamental property right as defined by the Washington Supreme Court. Plaintiffs’ other argument is that a taking has occurred because some property right has been transferred to the parks’ residents. As an initial matter, it is unclear whether this alternative argument is viable. The court’s discussion of the statutory transfer issue in Manufactured Housing appears to be premised on its finding of a fundamental property right: “[W]e are persuaded that a taking has occurred in this case not only because an owner is deprived of a fundamental attribute of ownership, but also because this property right is statutorily transferred.” 13 P.3d at 194 (first emphasis added). In any event, Plaintiffs’ argument fails on its own terms. In Manufactured Housing, the statute granted the right of first refusal to the parks’ residents. Accordingly, the residents —and only the residents—could exercise that valuable property right. Here, the residents have no ability—now or in the future—to require the parks’ owners to perform any act. Nothing prohibits the owners from converting their properties to one of the many permitted uses under the ordinances (such as a cemetery, bed and breakfast, day care center, recreational facility, or single-family dwelling) or from selling to a third party. If a park owner so chose, the residents would be powerless to affect that decision. [14] We therefore hold that the ordinances do not constitute a taking under the Washington Constitution. 12978 LAUREL PARK COMMUNITY v. CITY OF TUMWATER