Court Opinion

ID: 4711930
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:37:38.371575+00
Date Added: 2024-06-11T08:06:02.615749
License: Public Domain

Johnson, J.
(dissenting) — Although I agree with some of the majority’s analysis, I cannot support its conclusion because of three critical flaws in its reasoning. First, the majority improperly focuses its Gunwall20 analysis on the remedy provided by the Washington State Constitution, while what is at issue here is only the threshold question of whether a taking has occurred, a determination all parties agree is controlled by this court’s decision in Guimont v. Clarke, 121 Wn.2d 586, 595, 854 P.2d 1 (1993). Next, the majority states that a right of first refusal is a right of property, despite the fact that decisions of this court and the Court of Appeals have concluded it is not. E.g., Robroy Land Co. v. Prather, 95 Wn.2d 66, 70-72, 622 P.2d 367 (1980). Finally, the majority disregards the requirement that even if a property right is implicated, under a facial challenge of the type presented here no taking occurs unless the mere enactment of the statute denies the property owner all economically viable use of his or her land. Guimont, 121 Wn.2d at 602.
The parties agree our first task is to determine whether the enactment of chapter 59.23 RCW constitutes a regulatory taking. See Guimont, 121 Wn.2d at 605 (under facial challenge, party must show mere enactment of statute *385works a taking). The parties also concede Guimont provides the analytical framework for this determination. Therefore, if we conclude under Guimont that a facial taking has occurred, then it is appropriate to move to the next issue: whether article I, section 16 (amend. 9) of the Washington State Constitution provides a greater remedy than the Fifth Amendment to the United States Constitution. If, however, Guimont tells us no taking has occurred, the question of whether the state constitution might provide a more expansive remedy should be left for another day.
Under Guimonfs threshold inquiry, we ask “whether the regulation destroys or derogates any fundamental attribute of property ownership: including the right to possess; to exclude others;... to dispose of property... [or] to make some economically viable use of the property.” Guimont, 121 Wn.2d at 602 (citing Presbytery of Seattle v. King County, 114 Wn.2d 320, 329-30, 787 P.2d 907 (1990); Sintra, Inc. v. City of Seattle, 119 Wn.2d 1, 14 n.6, 829 P.2d 765 (1992); Robinson v. City of Seattle, 119 Wn.2d 34, 49-50, 830 P.2d 318 (1992); Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1015-19, 112 S. Ct. 2886, 120 L. Ed. 2d 798 (1992)). In addition, when, as here, an enactment is challenged on its face, we must ask whether “the statute denies the owner of all economically viable use of the property.” Guimont, 121 Wn.2d at 605; accord Presbytery, 114 Wn.2d at 334; Orion Corp. v. State, 109 Wn.2d 621, 656, 747 P.2d 1062 (1987); see also Lucas, 505 U.S. at 1016 & n.6; Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 495, 107 S. Ct. 1232, 94 L. Ed. 2d 472 (1987); Hodel v. Va. Surface Mining & Reclamation Ass’n, 452 U.S. 264, 296,101 S. Ct. 2352, 69 L. Ed. 2d 1 (1981).
Of course, petitioners can prevail on their takings claim only if a right of first refusal is “property.” See Penn Cent. Transp. Co. v. City of N.Y., 438 U.S. 104, 124-25, 98 S. Ct. 2646, 57 L. Ed. 2d 631 (1978) (describing dismissal of takings claims because the interests involved were not property) (citing United States v. Willow River Power Co., *386324 U.S. 499, 65 S. Ct. 761, 89 L. Ed. 1101 (1945); United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53, 33 S. Ct. 667, 57 L. Ed. 1063 (1913)); see also William B. Stoebuck, Nontrespassory Takings in Washington § 1.7, at 7 (1980) (noting the first question in a takings analysis is “to determine if that which has been ‘taken’ is ‘property’ ”).
Whether a property interest exists for the purposes of a takings analysis is determined by reference to state law. E.g., Phillips v. Wash. Legal Found., 524 U.S. 156, 164, 118 S. Ct. 1925, 141 L. Ed. 2d 174 (1998). Our cases have unquestionably established that not only is a right of first refusal not a fundamental attribute of property ownership, it is not a property right at all. Robroy, 95 Wn.2d at 70-72; see also Bennett Veneer Factors, Inc. v. Brewer, 73 Wn.2d 849, 853, 856, 441 P.2d 128 (1968); Old Nat’l Bank v. Arneson, 54 Wn. App. 717, 721, 776 P.2d 145 (1989); Feider v. Feider, 40 Wn. App. 589, 592, 699 P.2d 801 (1985).21
The majority attempts to distinguish our holding in Robroy, but the distinction is unpersuasive. While the issue in Robroy was presented in the context of the rule against perpetuities, its holding that a right of first refusal is not a property interest is equally applicable in this case. This conclusion is consistent with cases analyzing a right of first refusal in other contexts. For example, a right of first refusal does not implicate the real property statute of frauds, nor does it run with the land for the purpose of enforcing an equitable servitude. See Old Nat’l Bank, 54 Wn. App. at 722; Feider, 40 Wn. App. at 593. Because “no interest in land is created by a right of first refusal!,] only *387personal rights are affected.” Old Nat’l Bank, 54 Wn. App. at 721 (emphasis added).22
Furthermore, although Robroy addressed a right of first refusal in the hands of a grantee, this is irrelevant for purposes of characterizing the interest as real or personal property. If a grant of a right of first refusal does not create a real property interest in a grantee, then a fortiori legislation affecting a grantor’s ability to convey such an option does not “take” any real property interest from the grantor. One cannot take what was never there to begin with.
Even if, however, the statute implicated a fundamental attribute of property ownership, this does not mean a taking has occurred. E.g., Guimont, 121 Wn.2d at 605 (regulation must “destroy” fundamental attribute of property ownership); Orion, 109 Wn.2d at 664 (addressing whether fundamental attributes of ownership have been “extinguished”). “Not every infringement on a fundamental attribute of property ownership necessarily constitutes a ‘taking5.” Guimont, 121 Wn.2d at 603 n.6 (emphasis added) (citing Presbytery, 114 Wn.2d at 333 n.21); see also PruneYard Shopping Ctr. v. Robins, 447 U.S. 74, 82-83, 100 S. Ct. 2035, 64 L. Ed. 2d 741 (1980); Armstrong v. United States, 364 U.S. 40, 48, 80 S. Ct. 1563, 4 L. Ed. 2d 1554 (1960) (contrasting “total destruction by the Government of all value” with “a mere ‘consequential incidence’ of a valid regulatory measure”); Garneau v. City of Seattle, 147 F.3d 802, 818-19 (9th Cir. 1998) (Williams, J., concurring).
“[F] acial challenges to the economic impact of land use regulations require the landowner to prove the regulation denies all economically viable use of the owner’s property . . . .” Guimont, 121 Wn.2d at 602 (emphasis added); see also Suitum v. Tahoe Reg’l Planning Agency, 520 U.S. *388725, 736 & n.10, 117 S. Ct. 1659, 137 L. Ed. 2d 980 (1997) (citing Keystone, 480 U.S. at 495; Hodel, 452 U.S. at 297). The majority erroneously omits this requirement in setting forth the standards for a facial taking. Majority at 356. For example, the majority relies on Presbytery for the premise that the destruction of a fundamental attribute of property ownership, by itself, may serve as the basis for a facial taking. Majority at 355 (citing Presbytery, 114 Wn.2d at 330). Presbytery makes clear, however, that such a challenge cannot succeed unless the property owner also establishes that all economical use of his or her property is eviscerated. Presbytery, 114 Wn.2d at 333-34.
In Guimont, we were faced with a facial takings challenge to the Mobile Home Relocation Assistance Act, chapter 59.21 RCW. That statute required “the owner of a mobile home park to pay relocation assistance to the park’s tenants if the owner wants to close the park or convert it to another use.” Guimont, 121 Wn.2d at 591 (citing Laws of 1990, ch. 171, § 2(1)). Despite the obvious economic impacts of this regulation, this court rejected a facial challenge by mobile home park owners because they could not establish that the “regulation of their property’s use under the Act denies them all economically viable use of their property.” Guimont, 121 Wn.2d at 606.
Whereas Guimont involved an actual monetary payment by the park owners, this case involves a far less invasive regulation. Both this court and the Court of Appeals have recognized the minimal economic impact of a right of first refusal. See, e.g., Robroy, 95 Wn.2d at 70 (a right of first refusal did not create a restraint on alienation because “[t]he marketability of the property remained] unfettered”) (emphasis added); Feider, 40 Wn. App. at 593-94 (grant of right of first refusal did not “touch and concern” the land because there was “nothing in the record to indicate the value of the land of the respective parties here was increased or decreased or even affected by the agreement.” (emphasis added)).
Indeed, we have previously suggested that the creation of *389a right of first refusal may lead to a more favorable economic result for petitioners:
“The interference with alienation present in a requirement that a designated person be afforded a reasonable opportunity to meet any offer received from a third person by an owner desirous of selling is so slight that the major policies furthered by freedom of alienation are not infringed to a degree which requires invalidation. Under these circumstances, the owner has two potential buyers at the same price and is assured of a reasonably prompt culmination of the sale. Such restraints are, therefore, valid.”
Robroy, 95 Wn.2d at 70-71 (emphasis added) (quoting Restatement of Property § 413 cmt. on subsection (1) (1944)). This conclusion is compelling in the context of a facial challenge such as that presented in this case because no evidence of negative economic impact has been established.
Applying this analytical framework established by our case law is also consistent with a recent analogous case that rejected a takings challenge under a similar statute. See Greenfield Country Estates Tenants Ass’n, Inc. v. Deep, 423 Mass. 81, 87, 666 N.E.2d 988 (1996).23 The court held because the Massachusetts law (like the Washington statute) did not restrict transfers of property by gift, devise, or operation of law, or require property to be sold on terms less favorable than could be received from a third party, the owner’s freedom to transfer was minimally limited.
The statutory right of first refusal cannot be said materially to *390affect the marketability of the property so as to deprive it of economic value. We do not speculate as to the validity of [defendants’] unsubstantiated assertions that the restriction results in a diminution in property value or reduces the pool of prospective purchasers. We note only that mere conditioning the sale of the property to a right of first refusal does not amount to a taking.
Greenfield Country Estates, 423 Mass. at 87, 666 N.E.2d at 992 (citing Andrus v. Allard, 444 U.S. 51, 66, 100 S. Ct. 318, 62 L. Ed. 2d 210 (1979)). This reasoning mirrors our jurisprudence on facial regulatory takings and demonstrates that regardless of whether a successful as applied or due process challenge might be brought in the future, the mere enactment of chapter 59.23 RCW does not deprive petitioners of all economically viable use of their land.
The fact this case presents a facial challenge to a regulatory taking also renders inapplicable the majority’s argument that a taking may occur when property is “statutorily transferred.” Majority at 369 (emphasis omitted). While this may be true, the cases cited by the majority for this premise all involve as applied challenges where defined pieces of property were allegedly taken. Majority at 369 (citing Brazil v. City of Auburn, 93 Wn.2d 484, 490-91, 610 P.2d 909 (1980); Highline Sch. Dist. No. 401 v. Port of Seattle, 87 Wn.2d 6, 17, 548 P.2d 1085 (1976); Ackerman v. Port of Seattle, 55 Wn.2d 400, 408, 348 P.2d 664 (1960), overruled on other grounds by Highline Sch. Dist. No. 401, 87 Wn.2d 6). All three of these cases also involved physical invasions and not regulatory takings. Both Highline and Ackerman dealt with aircraft flights through private airspace over parcels near the Seattle Tacoma International Airport, while Brazil dealt with the City of Auburn’s construction of a public roadway on private land. Highline, 87 Wn.2d at 7; Ackerman, 55 Wn.2d at 402-03; Brazil, 93 Wn.2d at 485. Physical invasions are treated very differently than regulatory takings. E.g., Presbytery, 114 Wn.2d at 335; Penn Cent. Transp. Co., 438 U.S. at 124. These cases simply do not provide the majority the authority to abandon *391the facial challenge and regulatory takings jurisprudence developed over the past two decades by this court.
“[S]ome regulations, by their very nature, are just not subject to facial attack on takings grounds.” S. Pac. Transp. Co. v. City of Los Angeles, 922 F.2d 498, 506 n.9 (9th Cir. 1990), cert. denied, 502 U.S. 943, 112 S. Ct. 382, 116 L. Ed. 2d 333 (1991). Because no property has been taken from petitioners by the enactment of chapter 59.23 RCW and because petitioners cannot demonstrate the economic harm or physical invasion that must be shown in a facial challenge, I would conclude this statute is not a taking. I would, therefore, not reach the question of whether article I, section 16 (amend. 9) of the Washington State Constitution may, in some circumstances, provide greater protection than the Fifth Amendment. I would affirm the Court of Appeals and the superior court on the ground that no unconstitutional facial taking has occurred.
Smith, J., concurs with Johnson, J.

 State v. Gunwall, 106 Wn.2d 54, 720 P.2d 808 (1986).

 Numerous other jurisdictions are in accord with this position, many in the context of rejecting a takings challenge. See, e.g., Minnesota ex rel. Alexander v. Block, 660 F.2d 1240, 1256 (8th Cir. 1981) (state statute granting federal government right of first refusal not a taking even if some diminution in value results); Kaiser Dev. Co. v. City & County of Honolulu, 649 F. Supp. 926, 937 (D. Haw. 1986) (right of first refusal not a compensable interest in regulatory taking challenge); Gartley v. Ricketts, 107 N.M. 451, 453, 760 P.2d 143 (1988) (right of first refusal not a “future interest” and, therefore, not subject to rule against perpetuities); City of Ashland v. Kittle, 347 S.W.2d 522, 524 (Ky. 1961) (right of first refusal is a contract right not compensable in eminent domain proceeding).

 As the majority notes, petitioners waived their due process claim in this case. However, the majority’s jealous protection of petitioner’s contractual rights closely resembles a substantive due process analysis. “It is settled by various decisions of this court that state constitutions and state laws may regulate life in many ways which we as legislators might think as injudicious or if you like as tyrannical as this, and which equally with this interfere with the liberty to contract.” Lochner v. New York, 198 U.S. 45, 75, 25 S. Ct. 539, 49 L. Ed. 937 (1905) (Holmes, J., dissenting).

 In Greenfield Country Estates, the statutory provision granting a right of first refusal read as follows:
“An owner of a manufactured housing community must notify each tenant by certified mail of the owner’s intent to sell or lease the land on which the community is located. Such notice must occur within fourteen days after the owner makes public his or her interest to sell the manufactured housing community, and at least forty-five days before the sale or lease occurs. ... If more than fifty per cent of the tenants residing in the community,... so request in writing, the owner must notify each resident of receipt of a bona fide offer to purchase the land that the owner intends to accept. The group then has the right to purchase the community on substantially similar terms and conditions as the third-party bona fide offeror ....”
Greenfield Country Estates, 423 Mass. at 83 n.7, 666 N.E.2d at 990 (citing Mass. Gen. Laws ch. 140, § 32R (1994)).