Court Opinion

ID: 9631561
Source: CourtListenerOpinion
Date Created: 2023-08-22 10:42:20.166493+00
Date Added: 2024-06-11T12:25:59.579416
License: Public Domain

CHIN, J. Dissenting.
The majority, in analyzing this case, inappropriately conflates takings jurisprudence with due process jurisprudence, thus undoing much of our effort in Kavanau v. Santa Monica Rent Control Bd. (1997) 16 Cal.4th 761 [66 Cal.Rptr.2d 672, 941 P.2d 851] to disentangle these two areas of law. It cites due process cases, though we are addressing a takings clause challenge to Santa Monica’s rent control law (see, e.g., maj. opn., ante, at pp. 967-968), and it ultimately applies a due process standard (id. at pp. 967-968, 972). If the majority were to adhere to the standards applicable under the takings clause, instead of trying to alchemize those standards into due process standards, I believe it would conclude, as I do, that plaintiff has adequately stated a cause of action. Accordingly, I dissent.
The due process clauses of the state and federal Constitutions guarantee property owners “due process of law” when the state “deprive[s] [them] of . . . property.” (U.S. Const., 14th Amend., § 1; Cal. Const., art. I, §§ 7, 15.) On the other hand, the takings clauses of the state and federal Constitutions guarantee property owners “just compensation” when their property is “taken for public use.” (U.S. Const., 5th Amend.; Cal. Const., art. I, § 19.) Although these constitutional provisions are facially similar, they limit the legislative power of government in different ways, and they have given rise to two separate, though sometimes overlapping, bodies of law.
Among other things, the due process guaranty prohibits regulations that are “arbitrary” or “discriminatory” or lacking “a reasonable relation to a proper legislative purpose.” (Nebbia v. New York (1934) 291 U.S. 502, 537 [54 S.Ct. 505, 516, 78 L.Ed. 940, 89 A.L.R. 1469].) This standard is often referred to as the “rational basis” test because “regulatory legislation affecting ordinary commercial transactions is not to be pronounced unconstitutional [under the due process clause] unless . . . it is of such a character as to preclude the assumption that it rests upon some rational basis within the knowledge and experience of the legislators.” (U.S. v. Carolene Products Co. (1938) 304 U.S. 144, 152 [58 S.Ct. 778, 783, 82 L.Ed. 1234], italics added; *1019see also Washington v. Glucksberg (1997) 521 U.S. 702, 727-735 [117 S.Ct. 2258, 2271-2275, 138 L.Ed.2d 772].) As the words suggest, the rational basis test is highly deferential to legislative prerogative. Under that test, the government does not need to offer any evidentiary proof in defense of a regulation, and opponents of the regulation cannot defeat it “merely by tendering evidence in court that the legislature was mistaken.” (Minnesota v. Clover Leaf Creamery Co. (1981) 449 U.S. 456, 464 [101 S.Ct. 715, 724, 66 L.Ed.2d 659].)
The formulations applicable under the takings clause are, by comparison, quite different. Recent United States Supreme Court decisions emphasize a two-part analysis that focuses on the regulation’s economic effect and the government’s purpose. (Yee v. Escondido (1992) 503 U.S. 519, 523 [112 S.Ct. 1522, 1526, 118 L.Ed.2d 153]; Keystone Bituminous Coal Assn. v. DeBenedictis (1987) 480 U.S. 470, 484-485 [107 S.Ct. 1232, 1241, 94 L.Ed.2d 472].) Under both the “effect” and the “purpose” sides of the analysis, the court has identified an extreme at which the regulation constitutes a per se taking requiring compensation. Thus, where the regulation’s economic effect is total—that is, where it deprives a property owner of “all economically beneficial or productive use of land”—it constitutes a per se taking. (Lucas v. South Carolina Coastal Council (1992) 505 U.S. 1003, 1015 [112 S.Ct. 2886, 2893, 120 L.Ed.2d 798]; Agins v. Tiburon (1980) 447 U.S. 255, 260 [100 S.Ct. 2138, 2141, 65 L.Ed.2d 106].) Similarly, where the regulation’s purpose is purely sophistic—that is, where it does not in fact “ ‘substantially advance’ the ‘legitimate state interest’ sought to be achieved”—it also constitutes a per se taking. (Nollan v. California Coastal Comm’n (1987) 483 U.S. 825, 834, fn. 3 [107 S.Ct. 3141, 3147, 97 L.Ed.2d 677] (Nollan); see also Dolan v. City of Tigard (1994) 512 U.S. 374, 385 [114 S.Ct. 2309, 2316, 129 L.Ed.2d 304] (Dolan); Lucas v. South Carolina Coastal Council, supra, 505 U.S. at p. 1016 [112 S.Ct. at p. 2894]; Keystone Bituminous Coal Assn. v. DeBenedictis, supra, 480 U.S. at p. 485 [107 S.Ct. at p. 1241]; United States v. Riverside Bayview Homes, Inc. (1985) 474 U.S. 121, 126 [106 S.Ct. 455, 458-459, 88 L.Ed.2d 419]; Agins v. Tiburon, supra, 447 U.S. at p. 260 [100 S.Ct. at p. 2141].) The latter standard, to which I refer as the “substantially advance” standard, is thus simply the logical corollary of the former standard. In this case, plaintiff asks us to interpret and apply the “substantially advance” standard. The majority does so, but in a way that ignores the words of the standard and renders it a mere vacuous shell.
We as judges write judicial opinions and articulate legal standards because we believe that words, though imperfect, have the power to convey objective meaning. And if words have that power, then a requirement that a law *1020“ ‘substantially advance’ the ‘legitimate state interest’ sought to be achieved” (Nollan, supra, 483 U.S. at p. 834, fn. 3 [107 S.Ct. at p. 3147]) is different from a requirement that a law not be “arbitrary,” and, of course, it is different from a requirement that a law have a “rational basis.” Nevertheless, the majority grafts these deferential due process standards onto the “substantially advance” standard.
True, the majority does not actually take the final step of expressly equating the “substantially advance” standard with the rational basis test. But it does almost the same thing when it declares that rent control constitutes a taking only if it is “arbitrary.” (Maj. opn., ante, at pp. 967, 972.) I fail to see a practical difference between the majority’s “rent control may not be arbitrary” rule and the rational basis test. If a law is not arbitrary, it is rational; if it is rational, it is not arbitrary. Thus, not surprisingly, due process cases frequently use the term “arbitrary” as a synonym for the lack of a rational basis. (See, e.g., Carolene Products Co. v. U.S. (1944) 323 U.S. 18, 31-32 [65 S.Ct. 1, 8, 89 L.Ed. 15, 155 A.L.R. 1371].) Moreover, the majority hints that the rational basis test probably applies here. (Maj. opn., ante, at p. 967.)
In Nollan, however, the high court unambiguously affirmed that the “substantially advance” standard is distinct from the rational basis test. (Nollan, supra, 483 U.S. at p. 834, fn. 3 [107 S.Ct. at p. 3147].) In an impressive display of judicial sleight of hand, the majority deftly explains away this language, stating that the “substantially advance” standard is actually not a single standard, but rather incorporates “different levels of takings scrutiny” (maj. opn., ante, at p. 966) that in Nollan meant one thing, but here mean near total deference to the Legislature. I disagree. Though the “substantially advance” standard might be applied with particular care in certain types of cases (Nollan, supra, 483 U.S. at p. 841 [107 S.Ct. at pp. 3150-3151]), it remains a single standard, not a multilevel standard that has a fluid meaning completely divorced from the natural meaning of the words that comprise it.
The majority cites footnote 8 in Dolan, supra, 512 U.S. at page 391 [114 S.Ct. at page 2320], as proof that, in this case, the “substantially advance” standard is no different from the “not arbitrary” standard applicable in due process cases. That footnote, however, hardly purports to give content to the “substantially advance” standard. Rather, it addresses an argument in Justice Stevens’s dissent concerning allocation of the burden of proof.
Justice Stevens argued that the burden of proof ought to rest on the party challenging the regulation, not on the governmental entity defending it. *1021(Dolan, supra, 512 U.S. at pp. 409, 411 [114 S.Ct. at pp. 2328-2330] (dis. opn. of Stevens, J.).) In support of his argument, Justice Stevens cited Moore v. East Cleveland (1977) 431 U.S. 494 [97 S.Ct. 1932, 52 L.Ed.2d 531], a due process case. (Dolan, supra, 512 U.S. at p. 409 [114 S.Ct. at pp. 2328-2329] (dis. opn. of Stevens, J.).) Justice Stevens does not say why he thought a due process case was relevant. In response to Justice Stevens, the Dolan court affirmed his assertion about the burden of proof in due process cases, but found it inapposite to the particular type of takings issue it was deciding. Thus, the court agreed with Justice Stevens that, “in evaluating most generally applicable zoning regulations, the burden properly rests on the party challenging the regulation to prove that it constitutes an arbitrary regulation of property rights.” (Id. at p. 391, fn. 8 [114 S.Ct. at p. 2320].) But, in making this statement, the court was merely reiterating the appropriate due process standard to which Justice Stevens had alluded in his argument. The court might also have agreed with Justice Stevens about numerous other legal standards that similarly were not relevant. In any case, the court certainly would not have used a single sentence in a footnote responding to a dissent as the place to announce a new takings clause standard. Also, if the court had been discussing the takings clause, not the due process clause, it would not likely have followed its statement with a citation to Euclid v. Ambler Co. (1926) 272 U.S. 365 [47 S.Ct. 114, 71 L.Ed. 303], a due process case. (Dolan, supra, 512 U.S. at p. 391, fn. 8 [114 S.Ct. at p. 2320].)
In sum, the court’s parenthetical discussion in Dolan of the burden of proof in due process cases cannot fairly be read as stating the proper standard applicable in takings cases.
I do not advocate a return to the era of Lochner v. New York (1905) 198 U.S. 45 [25 S.Ct. 539, 49 L.Ed. 937], when courts routinely struck down economic regulations under the due process clause, thereby inhibiting the ability of government to restore confidence to the marketplace and to prevent exploitation of those who have little bargaining power. Appropriate regulation can serve to foster, not tax, economic growth and social well-being by creating and maintaining an environment conducive to beneficial commerce. On the other hand, I do advocate judicial reasoning that is clear and credible. No fair assessment of the words, “ ‘substantially advance’ the ‘legitimate state interest’ sought to be achieved” (Nollan, supra, 483 U.S. at p. 834, fn. 3 [107 S.Ct. at p. 3147]), can equate them with a rule that limits compensable “takings” of private property to government action that is “arbitrary.” Moreover, we can apply the high court’s “substantially advance” standard faithfully, while still maintaining the appropriate deference to legitimate government efforts to regulate the use of private property.
The majority decries as “novel” (maj. opn., ante, at p. 963) and “activist” (id. at p. 973) “[t]he notion that a court may invalidate legislation that it *1022finds, after a trial, to have failed to live up to expectations” (id. at p. 963). The majority adds that “[i]n our constitutional system, it is generally assumed that only the legislative body that enacted the statute may exercise a power of repeal if that statute fails to meet legislative expectations.” (Id. at pp. 963-964.) But the trial that plaintiff requests here is hardly a new idea. It is simply applying in the context of economic regulation practices that are already quite standard with respect to social and moral regulation.
As a result of our decisions interpreting the privacy clause of the state Constitution (see, e.g., American Academy of Pediatrics v. Lungren (1997) 16 Cal.4th 307 [66 Cal.Rptr.2d 210, 940 P.2d 797] (American Academy); Loder v. City of Glendale (1997) 14 Cal.4th 846 [59 Cal.Rptr.2d 696, 927 P.2d 1200]; Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1 [26 Cal.Rptr.2d 834, 865 P.2d 633]), social and moral regulation is routinely subject to a trial evaluating the effectiveness of the regulation at achieving its goals. In American Academy, for example, we stated that “when a statute impinges upon a constitutional right, legislative findings with regard to the need for, or probable effect of, the statutory provision cannot be considered determinative for constitutional purposes.” (American Academy, supra, 16 Cal.4th at pp. 349-350 (plur. opn. of George, C. J.); see also id. at p. 383 (conc. opn. of Kennard, J.).) Rather, “greater judicial scrutiny is required.” (Id. at p. 349 (plur. opn. of George, C. J.); see also id. at p. 383 (conc. opn. of Kennard, J.); Professional Engineers v. Department of Transportation (1997) 15 Cal.4th 543, 569 [63 Cal.Rptr.2d 467, 936 P.2d 473].) We then expressly endorsed a procedure whereby the lower court did exactly what the majority decries: it “invalidate^] legislation that it [found], after a trial, [would] fail[] to live up to expectations.” (Maj. opn., ante, at p. 963; see American Academy, supra, 16 Cal.4th at pp. 328-331, 354-356 (plur. opn. of George, C. J.); id. at pp. 360, 362-368, 377, 383 (conc. opn. of Kennard, J.).) Specifically, we concluded that the law “impinge[d] upon ... a fundamental autonomy privacy interest” (American Academy, supra, 16 Cal.4th at p. 340 (plur. opn. of George, C. J.); see also id. at p. 375 (conc. opn. of Kennard, J.)) and that the Attorney General had failed to prove at trial that the law would serve the compelling interests that he urged in its defense (id. at pp. 348, 356 (plur. opn. of George, C. J.); id. at pp. 376, 383 (conc. opn. of Kennard, J.)). Accordingly, we agreed with the trial court that the law was unconstitutional. (Id. at p. 359 (plur. opn. of George, C. J.); id. at pp. 383-384 (conc. opn. of Kennard, J.).)
The trial plaintiff seeks in this case is no more novel than the trial we approved in American Academy. Indeed, under the takings clause, the state does not face the difficult task that it faced in American Academy of proving that a regulation serves a compelling interest justifying an intrusion on *1023constitutional rights. (American Academy, supra, 16 Cal.4th at pp. 340-341 (plur. opn. of George, C. J.); id. at pp. 376, 383 (conc. opn. of Kennard, J.).) Rather, the government will prevail so long as the regulation’s purpose is legitimate and the evidence indicates it advances its purpose in some substantial way. (Nollan, supra, 483 U.S. at p. 834, fn. 3 [107 S.Ct. at p. 3147].)
Far from being “novel” (maj. opn., ante, at p. 963) or “activist” (id. at p. 973), this rule simply represents the unremarkable conclusion that, if a regulation deprives someone of private property without substantially advancing its purpose, the government should pay compensation. In most cases, an economic regulation would quite obviously advance at least one of its purposes. Injunctions prohibiting enforcement of the regulation would not issue, and litigation would come to a quick and inexpensive conclusion by way of a defense motion for summary judgment. If a case did go to trial, then the regulatory body would likely have no difficulty demonstrating the effectiveness of the economic regulation. And, if the regulatory body did have difficulty, it should be wondering about the wisdom of its apparently failed regulatory policy, not wasting its resources on litigation.
Plaintiff argues in its complaint that the Santa Monica rent control law does not substantially advance its stated purpose of helping “tenants, especially the poor, minorities, students, young families, and senior citizens” overcome “the hardship caused by [a] serious housing shortage.” In support of its argument, plaintiff alleges recent demographic changes in Santa Monica that suggest the law may have failed.
If we allow this case to go to trial, plaintiff will have a difficult time proving its claims. Many factors other than rent control may have caused or contributed to the demographic changes in Santa Monica that plaintiff alleges. Rent control may have slowed these changes and advanced its stated purposes in that way. Also, the long-term effects of rent control may not yet have fully manifested. Finally, at the very least, rent control in Santa Monica has presumably benefited tenants who were already in their apartments when it began and who have remained there. The decision to benefit one constituency over another—for example, to benefit existing tenants by preserving their low rents at the expense of prospective tenants who cannot find housing—is a policy decision that a legislative body is generally free to make. (Schnuck v. City of Santa Monica (9th Cir. 1991) 935 F.2d 171, 175.) Therefore, in order to prevail, plaintiff would have to show that benefiting existing tenants at the expense of prospective tenants is somehow inconsistent with the stated purpose of helping “tenants, especially the poor, minorities, students, young families, and senior citizens” overcome “the hardship [of a] serious housing shortage.”
*1024In sum, I share some of the majority’s skepticism about plaintiff’s assertions. (Maj. opn., ante, at pp. 969-971.) Nevertheless, on demurrer, a court must “take the properly pleaded material allegations of the complaint as true; [its] only task is to determine whether the complaint states a cause of action.” (Snyder v. Michael’s Stores, Inc. (1997) 16 Cal.4th 991, 995 [68 Cal.Rptr.2d 476, 945 P.2d 781].) Therefore, our views of the merits of plaintiff’s allegations are irrelevant. Plaintiff might somehow establish, perhaps with expert opinion or empirical data, that sufficient time has passed since the introduction of rent control' in Santa Monica to evaluate its long-term effects and that rent control has been the critical factor behind the demographic changes that plaintiff alleges. In addition, plaintiff might somehow further establish that “the poor, minorities, students, young families, and senior citizens” whom the authors of the law “especially” intended to benefit were more likely to be prospective tenants who have not benefited from rent control than existing tenants who presumably did benefit.
Even if we are skeptical about plaintiff’s ability to prove its case, I believe it should have a chance to try. Moreover, we should not require plaintiff to prove what is tantamount to a due process violation when it has brought a takings case. Accordingly, I dissent.