CLAUDE LAMBERT et ux. v. CITY AND COUNTY OF SAN FRANCISCO et al.
ON PETITION FOR WRIT OF CERTIORARI TO THE COURT OF APPEAL OF CALIFORNIA, FIRST APPELLATE DISTRICT
The petition for a writ of certiorari is denied.
Justice Scalia, with whom Justice Kennedy and Justice Thomas join, dissenting from the denial of
Petitioners Claude and Micheline Lambert own the Cornell Hotel in San Francisco. The hotel has 24 residential units and 34 tourist units. After experiencing difficulty renting the hotels residential units, petitioners applied to the San Francisco Planning Commission for a conditional use permit to convert those units to tourist use.1 That request implicated two bodies of San Franciscos land-use law: the Planning Code and the Residential Hotel Unit Conversion and Demolition Ordinance (HCO). The Planning Code provides that a tourist hotel may not be significantly altered, enlarged, or intensified, except upon approval of a new conditional use application. S. F. Planning Code, Art. 1.7, §178(c) (2000). The HCO prohibits the issuance of a permit for the conversion of units from residential to tourist use unless the proprietor agrees to provide either one-to-one replacement for those units or to pay a portion of the replacement costs. See S. F. Admin. Code, ch. 41, §41.13 (2000).
Pursuant to the HCO, the city obtained two appraisals of the replacement costs for the units petitioners wished to convert. See 67 Cal. Rptr. 2d 562, 570 (1997) (Strankman, P. J., dissenting). The first appraisal was $488,584 and the second was $612,887; the city settled on $600,000. See ibid. Petitioners, however, offered only $100,000. See ibid. After the Planning Commission denied the permit application, petitioners brought the present suit. They contended that the replacement fee is unconstitutional under this Courts decisions in Nollan v. California Coastal Commn, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994), which held that a burden imposed as a condition of permit approval must be related to the public harm that would justify denying the permit, and must be roughly proportional to what is needed to eliminate that harm. The California Court of Appeal affirmed the trial courts rejection of petitioners claim. It held that the HCO played no part in the commissions 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 solely on the Planning Code and, basing its decision upon such traditional zoning concerns as compatibility with surrounding development, effect on traffic patterns, and availability of housing stock, simply denied the permit outright. Ibid. Because, the court continued, neither a property right nor 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 of a use permit, and thus there [was] nothing requiring review under Nollan and Dolan. 67 Cal. Rptr. 2d, at 569.
The record belies the Court of Appeals claim that the commission ignored petitioners refusal to meet its demand for a $600,000 payment. After acknowledging petitioners offer of $100,000, the commission compared this figure with the amounts offered by two other hotels that had successfully requested similar conversions. 1 Appellants App. in No. A076116 (Cal. Ct. App.), pp. 100, 102. It noted that in those two applications, the fee amounted to $10,000 and $15,000 per room, respectively. See id., at 102. (The fee in petitioners case, by contrast, amounted to only $3,226 per room. See 67 Cal. Rptr. 2d, at 571.) The commission then found that petitioners application was not comparable to those previously granted , because petitioners failed to demonstrate that the amount offered was sufficient to mitigate the loss of housing stock. 1 Appellants App., at 102. It is simply and obviously not true that the commission ignored petitioners refusal to satisfy its fee demand.
The Court of Appeal itself, after asserting that San Francisco did not demand anything from petitioners, 67 Cal. Rptr. 2d, at 569, in the next breath found it somewhat disturbing that San Franciscos concerns about congestion, parking and preservation of a neighborhood might have been overcome by payment of [a] significant sum of money, ibid. (emphasis added). This observation makes no sense, of course, unless the court concluded from the record that the commission might have rendered a different decision if petitioners had been more generous. It sought to evade the natural consequence of that conclusion with the following unelaborated assertion: That the Planning Commission might have granted the permit upon payment of $600,000 does not make its refusal to issue the permit into a taking. Ibid. (emphasis added).
There are three possible readings of the Court of Appeals opinion. First, and most obviously, one might take at face value the courts factual finding that the fee played no role in the decision. That would be a gross distortion of the record.
Secondly, one might ignore the courts initial see-no-evil disclaimer, and assume that it accepted what the record undeniably showed, that petitioners refusal to meet the fee demand was a motivating force behind the commissions decision. On that assumption, the courts refusal to apply Nollan and Dolan might be thought to rest upon its determination that that factor was irrelevant, since the commission also relied upon ordinary criteria under the Planning Code. But it is always the case that if the permit applicant does not yield to the extortionate demand, the ordinary criteria will be invoked to deny his permit. If indeed unjustified denial can constitute a taking (the question presented by the third basis for the decision, discussed below), Nollan and Dolan can surely not be evaded by simply adding boilerplate ordinary criteria language to the denial. The increasing complexity of land-use permitting processes, and of the criteria by which permit applications are judged, makes an ordinary criteria claim almost always plausible. When there is uncontested evidence of a demand for money or other propertyand still assuming that denial of a permit because of failure to meet such a demand constitutes a takingit should be up to the permitting authority to establish either (1) that the demand met the requirements of Nollan and Dolan, or (2) that denial would have ensued even if the demand had been met. Cf. Mt. Healthy City Bd. of Ed. v. Doyle, 429 U.S. 274 (1977). The record (and the Court of Appeals opinion) make clear that the latter cannot be established here.
Finally, and still on the assumption that the Court of Appeal acknowledged that petitioners failure to accede to the fee demand was a motivating factor in the commissions denial, the courts refusal to apply Nollan and Dolan might rest upon the distinction that it drew between the grant of a permit subject to an unlawful condition and the denial of a permit when an unlawful condition is not met. See Cal. Rptr. 2d, at 569 (Strankman P. J., dissenting) (characterizing the majoritys opinion in this fashion). From one standpoint, of course, such a distinction makes no sense. The object of the Courts holding in Nollan and Dolan was to protect against the States cloaking within the permit process
The first two of the conceivable bases for the Court of Appeals decision are so implausible as to call into question the state courts willingness to hold state administrators to the Fifth Amendment standards set forth by this tribunal. There is reason to believe that this may be more than a local and isolated phenomenon. See, e.g., Delaney, Development Agreements: The Road from Prohibition to Lets Make a Deal! 25 Urb. Law. 49, 52 (1993) (In addition to anti-development attitudes and vesting problems, property owners and developers are confronting decisions of state courts which either ignore or do not follow the essential nexus standard set forth in Nollan v. California Coastal Commn to validate development exactions (footnote omitted)); M. Berger, Recent Developments in the Law of Inverse Condemnation, Q203 ALIABA Video Law Review Study 1, 4 (1991) (Last year, we noted that the California appellate courts had reacted to the Supreme Courts decisions in First English Evangelical Lutheran Church v. County of Los Angeles, (1987) 482 U.S. 304 and Nollan v. California Coastal Commn (1987) 483 U.S. 825 by seeking ways to evade their evident mandate, either procedurally or substantively). Were they the only arguable bases for the decision I would favor summary reversal, and remand for conduct of the Nollan-Dolan analysis. The third basis, however, is at least a plausible one, and raises a question that will doubtless be presented in many cases. Though I am unaware of a conflict of authority on the precise point, the other grounds upon which the court relied entitle this case to our attention, and should overcome our usual preference for cases that present actual conflicts. I would therefore grant certiorari and schedule the case for argument.
1. When petitioners first sought to convert their residential units to tourist use, the hotel contained 31 residential units. Petitioners were successful, however, in convincing the San Francisco Board of Permit Appeals to reclassify seven of those as tourist units, producing the hotels configuration noted in the text.