The taking issue in the Ninth Circuit after Lucas.

I. Introduction

In 1993, the Ninth Circuit Court of Appeals decided a number of Fifth Amendment(1) "taking" cases. In most, the party asserting the claim did not prevail, calling to mind the observation that a great deal of attention is lavished on a remedy that rarely succeeds.(2)

In the first year after Lucas v. South Carolina Coastal Council,(3) the Ninth Circuit's reported decisions(4) indicate that Lucas will affect only a narrow band of cases. First, there are very few cases in which the action of government eliminates all reasonable use of property. Second, there are even fewer cases where a property owner is precluded from seeking a variance or an exception from the regulation which otherwise effects the taking.(5)

Beyond these general considerations, the Ninth Circuit's decisions carefully adhere to settled precedent which bars the exercise of federal jurisdiction over cases that clearly belong in state court. The doctrines of stare decisis, ripeness, and abstention commit the court to the position that litigants generally have a forum for taking claims in state court and they must use it.

The resolution of such claims by the Ninth Circuit follows an established structure. This structure reveals both symmetry in principles and high predictability that is extremely important for practitioners who need to provide legal advice with confidence.

II. The Taking Issue

A. Signs and Nonconforming Uses:

Outdoor Systems, Inc. v. City of Mesa(6)

In Outdoor Systems, the Ninth Circuit upheld the right of cities to require the removal of non-conforming billboards as a condition for the granting of a building or occupancy permit.(7) When the underlying use of a parcel is changed, there is a legitimate state interest in eliminating non-conforming uses, an interest that meets the "essential nexus" requirement of Nollan v. South Carolina Coastal Comm'n.(8) Such a precondition to a permit is not a per se taking under Lucas because the owner still retains economic use of the property (as shown by the desire for a commercial development permit in the first place).(9)

In a complex opinion addressing the regulation of signs and nonconforming uses, the Ninth Circuit consolidated two lower court decisions. In the first, a district court held that the city of Mesa's ordinance effected a taking.(10) The Mesa ordinance mandated the removal of billboards from property requiring a city issued certificate of occupancy. The city refused to issue a developer a building permit for a sports complex until the developer removed a billboard on the property. The developer and a sign company, Outdoor Systems, challenged the ordinance by bringing Civil Rights Act(11) claims alleging First, Fifth and Fourteenth. Amendment violations. The district court held the city could not constitutionally require the removal of a nonconforming sign as a condition for granting a building permit.(12)

In the second case, a district court upheld a city of Tucson ordinance that prohibited billboards on developed property and required their removal before issuing a certificate of occupancy for building on an undeveloped parcel.(13) Whiteco, a company that constructs billboards, unsuccessfully challenged the ordinance on the same grounds as Outdoor Systems had attacked the Mesa ordinance. (14)

On appeal, the plaintiffs, Whiteco and Outdoor Systems, argued that even if the cities' interests in restricting or eliminating signs was legitimate, the ordinances caused a taking without just compensation.(15) Whiteco and Outdoor Systems based their challenge on the "essential nexus" requirement of Nollan v. California Coastal Commission,(16) which requires that a regulation must "substantially advance" a legitimate state interest.(17) The Nollan Court held that a regulation does not advance the state's interest if no nexus exists between the effect of the regulation and the government interest sought to be advanced.(18)

In Outdoor Systems, the Ninth Circuit found "a simple and clear nexus" between the cities' interests and provisions of the sign codes which required the nonconforming billboards be removed from developed land.(19) The vacant lot provisions required removal of nonconforming billboards from developed land. "The cities' interests, in restricting billboards and eliminating nonconforming billboards, are advanced directly by these provisions, as the number of billboards in general and nonconforming billboards in particular will be reduced by their operation."(20) Plaintiffs contended a nexus was required between the building and occupancy permit requirements and the state interest in removing nonconforming signs.(21) But the court determined Nollan only required a nexus between the vacant lot provisions and the cities' interests.(22) The court found the requisite nexus in this case by observing that the building and occupancy permits (which issue when the nonconforming signs are removed), were simply the "mechanisms" by which the cities achieve their purposes.(23) The court also rejected the companies' claims that the ordinances eliminated the economically viable use of the property, holding, as in Christiansen v. Yolo County,(24) that the existence of permissible uses "determines whether a development restriction denies a property holder the economically viable use of its property."(25)

The developer in Outdoor Systems argued that the ordinance would prohibit both building on the property and retaining a non-conforming n. But the court found that any diminution in value caused by the ordinance was insufficient to constitute a taking where the land still had economically viable use.(26) The fact that the property owner chose "to develop its land, moreover, indicates that the land, absent the billboard, may still be put to another, more profitable use."(27)

The developer contended that the ordinance allowed the city to accomplish indirectly what it could not directly require, the removal of signs.(28) It relied on Frost v. Railroad Commission(29) for the principle that a state is "without power to impose an unconstitutional requirement as a condition for granting a privilege."(30) The Ninth Circuit was not persuaded by this argument. It found any degree of compulsion minor, because the determination whether to build a sports complex or to retain a sign seemed "a fairly easy decision" in economic terms.(31) Second, the ordinance did not require the immediate removal of nonconforming signs,(32) so such signs could remain as long as the property owner or developer wanted them to (and did not develop the property). The court emphasized that even if it assumed the unconstitutionality of requiring immediate removal of nonconforming signs, it does not follow that the eventual elimination of nonconforming uses is also unconstitutional.(33) If this were true, a property owner would have a perpetual right to maintain a nonconforming use. Under Arizona law, the right to continue a nonconforming use disappears once land is put to a different use.(34) Because there is no property right to continue a nonconforming use that is altered, it is not an unconstitutional taking to require removal of a nonconforming sign when the land on which it stands changes use.(35)

The developer also contended the ordinances effected a per use taking under Lucas.(36) In Lucas the Supreme Court held that a regulation which deprives an owner of all economically beneficial use of the land is a taking, regardless of the governmental interest advanced, unless the use is already proscribed by existing state law.(37) The court held Lucas was not relevant to these issues since the property owners here retained their complete rights to develop or use the land.(38)

Finally, the court found that the ordinances did not deprive the sign companies of property because they did not alter the companies' leasehold interests.(39) The ordinances allowed the signs to remain on the property as long as the property owner wanted them there and they did not impair the property interest or the obligation of the lessor or lessee.(40)

Based on this analysis, the Ninth Circuit held that the ordinances did not, on their face, violate the Fifth Amendment and did not, as applied, effect a taking of the developer's property or the leasehold interests of the sign companies.(41) The court also rejected a taking challenge based on the Arizona Constitution, which has been interpreted consistently with federal decisions requiring the deprivation of all "economically viable use."

B. The D'Oench Doctrine:

The Savings and Loan Cases

The taking issue arose not only in land use regulation cases, but also in federal litigation over failed savings and loan institutions. While the savings and loan cases fall outside the traditional realm of land use and environmental law, they are a reminder of the potential reach of the Fifth Amendment. The taking issue continues to arise "in every conceivable context."(42) Even politicians have invoked the Fifth Amendment. In Nixon v. United States,(43) the former President received compensation for papers confiscated by the government pursuant to an act of Congress during the Watergate scandal.

In Notrica v. FDIC,(44) a second mortgagee brought suit against a defunct savings and loan and the Federal Deposit Insurance Company (FDIC), which had foreclosed on property under the saving and loan's first deed of trust. The district court entered judgment in favor of FDIC.(45) The mortgagee contended the FDIC had taken his property without just compensation in violation of the Fifth Amendment.(46) The mortgagee challenged the trial court's application of the doctrine of D'Oench, Duhme & Co. v. FDIC,(47) which precludes obligors from asserting side deals or secret agreements which may mislead bank examiners against the FDIC to diminish the value of written loan obligations."(48) The doctrine ensures that regulators are able to rely exclusively on a bank's records and not representations made by interested parties in evaluating the true worth of a bank's assets.(49) The Ninth Circuit rejected the mortgagee's attempt to eliminate FDIC's security interest and held there was no support for the taking claim because the D'Oench doctrine does not take property without just compensation.(50) The mortgagee merely deprived himself "of certain defenses to liability" by falling to take the steps required by the doctrine.(51)

In a second case involving D'Oench, a vendor acting as a receiver for a failed savings and loan, brought suit against the FDIC to recover a parcel of property that had been conveyed by mistake.(52) The trial court dismissed Falk's claims for reformation of the deed and inverse condemnation on summary judgment.(53) On appeal, the Ninth Circuit held the D'Oench doctrine did not preclude reconveyance of the property.(54) However, the court allowed for further proceedings on all claims which included the Fifth Amendment challenge.(55)

III. Procedural Obligations

A. The Ripeness Requirement:

Christiansen v. Yolo County(56)

In Christiansen, the Ninth Circuit dismissed a federal court challenge to a ban on commercial development for lack of ripeness because the plaintiff had not first sought a remedy in state court. The court also rejected a facial constitutional challenge because the regulations furthered legitimate state interests and did not deprive the plaintiff of all economically viable use of his land. Thus the plaintiff failed to show a taking or violation of equal protection, substantive due process, procedural due process, or the commerce clause.

The plaintiff in Christiansen wanted to commercially develop a parcel of property. The county's planning staff, after consulting with the regional development agency, viewed the project as "urban development.(57) The county and the regional development agency were committed to denying plans for further urban development in that area. The owner did not submit an application to develop the property, but instead brought suit alleging that the agreement between the city and the county constituted a talking "as applied" to the property.(58)

The Ninth Circuit, in affirming summary judgment against the plaintiff, set out the basic analysis of an inverse condemnation claim.(59) For the court to have jurisdiction, the claim must meet the ripeness requirements of Williamson County Regional Planning Comm'n v. Hamilton Bank.(60) First, before filing suit, a property owner must seek a final decision regarding the application of the regulation to the property by the agency charged with its implementation.(61) In order to satisfy this "final decision requirement," the owner must make "at least one |meaningful application'"(62) for a development project and a variance, unless the application would be futile.(63)

Second, the owner must "|seek compensation through the procedures the State has provided for doing so' before turning to the federal courts."(64) As long as the state provides "an adequate process for obtaining compensation," no constitutional violation occurs until the state denies just compensation.(65) There is an exception where it would be futile to seek compensation under existing state law.(66) This places a heavy burden on plaintiffs who must demonstrate that just compensation is unavailable "through an inverse condemnation action under any circumstances. In Christiansen, because the plaintiff did not first bring an inverse condemnation suit in state court, the Ninth Circuit upheld dismissal of this claim for lack of ripeness.(68)

The owner also maintained that the agreement between the city and the county was unconstitutional on its face. A zoning regulation may also be challenged on the basis that the "mere enactment" of the regulation is unconstitutional,(69) if the regulation does not substantially advance legitimate state interests, or if it denies economically viable use of the land.(70)

In Christiansen, the agreement between the city and the redevelopment agency referred to several policies, including the preservation of agricultural uses of land and relief from economic detriment to the county.(71) The Ninth Circuit concluded the owner had failed to show these purposes were not legitimate state interests or that the agreement did not substantially advance them.(72) The court also held the owner had failed to demonstrate the agreement deprived him of all economically viable use of his land.(73) The existence of permissible uses generally determines whether a restriction denies economically viable use of the property.(74) In this case, because uses including agriculture, agricultural buildings, garages, parking areas, stables, nurseries and day care centers existed, the court determined the agreement was not unconstitutional on its face.(75)

The court then addressed the owners' contentions that the agreement was invalid based on equal protection, substantive due process, procedural due process and commerce clause grounds. For purposes of equal protection and substantive due process, the inquiry is whether the agreement is rationally related to a legitimate state interest.(76) The court found that the government had legitimate interests in preserving agricultural uses of land and alleviating financial impacts due to adoption of a growth management plan and found the agreement was rationally related to achieving those interests.(77) The court resolved these remaining claims against the owner as well.(78)

B. Abstention, Res Judicata, and Futility: Mission Oaks,(79) Palomar(80) and Levald(81) - The Mobile Home Park Trilogy

The Ninth Circuit decided three mobile home park cases in 1993. The decisions indicate that basic inverse condemnation actions are unlikely to produce a major change in the prevailing legal analysis within the foreseeable future.(82)

1. Abstention: Mission Oaks Mobile Home Park v. City of Hollister

In Mission Oaks, the Ninth Circuit refused federal jurisdiction for a plaintiffs challenge to a rent control ordinance because its claims were already being litigated in a state court action.(83) The state court proceedings were adequate to allow the abstention of a federal court from the case.(84)

The plaintiff, a mobile home park, filed suit in state court challenging a municipal rent control ordinance, and also filed with the relevant agencies a petition to increase the allowable level of rent.(85) The agency granted the park an amount much lower than what it sought.(86) Prior to trial, the park filed a statement seeking to reserve the right to litigate its federal claims in federal court.(87) The park's subsequent action filed in federal court was then dismissed on abstention grounds.(88)

In Mission Oaks, the court found that the case met the first Younger v. Harris(89) abstention requirement because state court proceedings began before plaintiff filed suit in federal court and were ongoing when the district court reviewed the case.(90) The case satisfied the second prong because the proceedings implicated important state interests. The court found the state had a substantial interest in enforcing and considering the constitutionality of rent control ordinances based on its pervasive regulation of the area.(91) With respect to the third prong, the park contended California did not provide a legitimate forum in which to raise a federal inverse condemnation claim.(92) In fact, a previous Ninth Circuit decision in Sierra Lake Reserve v. City of Rocklin(93) seemed to reach the same conclusion.(94) The court noted the Supreme Court had vacated the Sierra Lake decision without considering the Younger doctrine.(95) It also noted that the Sierra Lake court looked askance at the California's analysis of taking claims in the context of mobile home parks because of the state's refusal to follow a prior Ninth Circuit decision.(96) Moreover, the court refused to find that California courts are inadequate forums in which to raise federal taking claims.(97) The Supreme Court held in Pennzoil Co. v. Texaco, Inc.(98) "that federal courts should assume that state procedures will afford an adequate remedy in the absence of unambiguous authority to the contrary."(99)

Finding all three prongs of the Younger doctrine present, the Ninth Circuit turned to the issue of whether the district court had abused its discretion by abstaining.(100) Based on the facts presented, the court held plaintiff could fully pursue its federal taking claim in state court.(101) The actions in both courts involved taking issues and the federal case would interfere with ongoing state proceedings. Both cases involved essentially the same questions, evidence and arguments, and a ruling in federal court would "easily disrupt" the state case.(102) Accordingly, the court held the district court did not abuse its discretion.(103)

2. Res Judicata. Palomar Mobilehome Park Ass'n v. City of San Marcos(104)

In this case, the Ninth Circuit held that res judicata prevented a plaintiff from arguing a federal claim it failed to raise in state court, as well as precluding the federal appeals courts from reviewing any state court determination of constitutional taking issues.(105) The proper forum for that review is the Supreme Court.(106)

The Palomar Mobile Home Park Association (Palomar) brought suit in state court challenging a mobile home park rent control ordinance.(107) The trial court dismissed the case and Palomar appealed. The court of appeals affirmed the dismissal.(108) Palomar then filed an action in federal court alleging basically the same facts. The district court dismissed the case under the doctrine of res judicata.(109)

In the park's appeal, the Ninth Circuit examined the Full Faith and Credit Act,(110) which requires that a federal court "give the same preclusive effect to a state-court judgment as another court of that State would give."(111) The court therefore applied California's res judicata law to decide if Palomar's suit was properly dismissed.(112)

Palomar made three contentions in its effort to overturn dismissal of the case by the district court. The park argued the doctrine could not bar its federal action because the claim did not exist or was not ripe until the state court proceedings were terminated.(113) The Ninth Circuit held that the requirement of Williamson County Regional Planning Comm'n v. Hamilton Bank(114) that a litigant must bring a taking claim in state court before it is ripe for federal adjudication "does not prevent the doctrine of res judicata from barring subsequent federal action."(115) Other circuits have reached the same result. The court cited Peduto v. City of North Wildwood(116) as an example.(117) There, the Third Circuit stated:

Appellants have exhausted their state claims, which, under Williamson, is a necessary predicate to their federal cause of action; but in doing so, they have received a full and fair adjudication of their constitutional claims against the City in state court. Due process guarantees them no less, but entitles them to no more.(118)

The park also argued the federal action could not be barred because it did not raise its federal claims in state court.(119) The court held:

A litigant cannot avoid the preclusive effect of res judicata by failing explicitly to plead federal constitutional violations in a prior state action. While every litigant deserves his or her day in court, few deserve two. Thus, Palomar's failure specifically to plead federal constitutional violations in the state court complaint does not affect the application of res judicata in this case.(120)

The park then contended res judicata did not apply because it was not provided with a full and fair opportunity to litigate its federal claims. The Ninth Circuit rejected this argument, finding that the state courts properly considered Palomar's rights under the Constitution.(121) Both the trial court and the court of appeals specifically reviewed the park's federal constitutional claims and its state claim. Nothing in the record supported the park's position. On the contrary, the park was afforded a full and fair opportunity to litigate its claims and thus, the doctrine of res judicata applied to the subsequent federal action.(122)

In another significant aspect of Palomar, the Ninth Circuit rejected the park's request for remand in order to pursue its regulatory taking claim.(123) The dismissal in state court, even if erroneous, precludes consideration of the action in the district court.(124) District courts have no authority to review final judgments of a state court even when federal constitutional principles are involved.(125) The proper forum for review of the state court's judgment is the United States Supreme Court. Consequently, the court declined the park's "invitation to transform the district court into an appellate tribunal for state proceedings."(126)

3. Physical v. Regulatory Taking, Ripeness and Futility, Statute of Limitations for Facial Challenges: Levald, Inc. v. City of Palm Desert(127)

Levald involved several procedural issues involving the effect of federal court review of state taking cases. First, the Ninth Circuit allowed the plaintiff to raise a new argument (a claim of a regulatory versus physical taking) in support of its taking claim even though it had not been raised in the state court.(128) Second, the court decided the case was ripe for review because the regulatory taking claim would have been futile at the state level.(129) Third, the court determined that the statute of limitations on a facial challenge begins to run when the law at issue is first passed.(130) Finally, substantive due process only requires that a land use regulation have any legitimate government interest as a basis, even if the regulation does not actually advance that interest.(131)

This case involved a challenge to California's Mobilehome Residency Law,(132) which limits a park owner's ability to terminate a tenant's lease.(133) The law also prohibits a park owner from requiring the removal of a mobile home when it is sold, charging a transfer fee for its sale, or rejecting a tenant as long as the tenant is able to pay rent.(134) In addition, the city of Palm Desert enacted an ordinance prohibiting a park owner from raising the rent for a mobile home space when it became vacant or when ownership of the mobile home was transferred. The only exception to the ordinance was a "hardship rental increase" which could be obtained through administrative procedures.(135)

A park sued Palm Desert, alleging taking claims and due process violations under both the United States and the California Constitutions.(136) The park contended that the state law and the municipal ordinance effectively transferred a property interest, the right to perpetually occupy park spaces at below-market rates, from the park owner to the tenants.(137) The park asserted that the ordinance allowed tenants to capture a right that had market value when they sold their mobile homes to third parties.(138) The district court held the federal taking claim was barred by the statute of limitations, held the park failed to state a claim for violation of substantive due process,(139) and refused to exercise supplemental jurisdiction over the state law claims.(140)

On appeal, the Ninth Circuit reviewed the difference between physical and regulatory taking under the Fifth Amendment. A physical taking occurs when the government actually acquires or intrudes upon property, either directly or by authorizing others to do so.(141) A regulatory taking occurs when government takes action that diminishes property values but does not physically occupy the property.(142) The Fifth Amendment generally requires compensation where the government authorizes the physical occupation of property.(143) However, where the government

merely regulates the use of property, compensation is required only if considerations such as the purpose of the regulation or the extent to which it deprives the owner of the economic use of the property suggest that the regulation has unfairly singled out the property owner to bear a burden that should be borne by the public as a whole.(144)

Because deciding whether a regulatory action effects a taking "requires |complex factual assessments of the purposes and economic effects of government actions,' while any physical occupation by the government is a taking per se, much turns on classification of the government's action."(145) The court rejected plaintiff's claim that the regulation constituted a physical taking, citing the Supreme Court's language in Yee(146) that "neither the City nor the State compels petitioners, once they have rented their property to tenants, to continue doing so. To the contrary, the Mobilehome Residency Law provides that a park owner who wishes to change the use of his land may evict his tenants, albeit with six or twelve months notice."(147)

The park then attempted to argue for the first time on appeal that the law effected a regulatory taking. The city objected that because the park had not raised this argument before the district court, it was precluded from doing so on appeal.(148) The Ninth Circuit decided it was proper to raise the regulatory taking claim,(149) (relying on another part of Yee which noted once a federal claim is properly presented, a party is not limited to the exact arguments made below, but may make any argument in support of the claim).(150) In this case, since plaintiff had raised a taking claim below, "petitioners could have formulated any argument they liked in support of that claim here."(151)

The court then examined whether the claims were ripe. The first prong of ripeness, requiring a final decision regarding the application of the regulation to the property, does not apply to facial challenges.(152) The second prong obligates the plaintiff to "seek compensation through the procedures the state has provided" before bringing the action in federal court.(153) In Levald, the alleged taking occurred when the ordinance was enacted in 1986. California did not recognize inverse condemnation actions based on temporary regulatory takings until after the Supreme Court's decision in First English Evangelical Church v. County of Los Angeles(154) in 1987.(155) The claim was thus ripe because it would have been futile for the park to seek relief in state court.(156)

The remaining issue was whether the statute of limitations barred the facial claim.(157) To determine when the cause of action accrued, the court looked to when it became ripe.(158) The plaintiff must seek compensation using state procedures except where it is clear there is no remedy available.(159) Here, there was no remedy, so the court found the statute of limitations began to run when the law was enacted in 1986.(160) Because California has a one year statute of limitations and the complaint was not filed until 1989, the action was barred.(161) The court distinguished other situations in which the injury is continuing or does not occur until the statute is applied because the harm flowing from the ordinance was readily measurable when the ordinance was enacted.(162) The court rejected the park's argument that the cause of action accrued when property values recently increased because it had no bearing on a claim that enactment of the ordinance effects a taking.(163)

The court also rejected the park's argument that it had brought an as-applied claim because plaintiff's pleadings and briefs did not reveal how the actual application of the statute effected a taking.(164) Plaintiff argued the law operated as a transfer of wealth from the park owner to the tenant.(165) This approach, while relevant to a facial challenge, was not a particular application of the statute. The court held that, even assuming that plaintiff had properly alleged an as-applied claim, plaintiff had not satisfied the second prong of the ripeness requirement, because the park had not sought compensation in state court or shown that doing so was futile.(166) Plaintiff's general assertion that California state courts are hostile to taking claims did not exempt plaintiff from first seeking relief in state court.(167)

The park also appealed the dismissal of its substantive due process claim. Under substantive due process analysis, a court's review of economic legislation requires great deference to legislative judgment.(168) In contrast to a taking claim, there is no requirement that the statute actually advance its declared purpose. Instead, the test is whether the government "could have had no legitimate reason for its decision."(169)

The purpose of the ordinance here was to reduce hardship from high rents, protect owners' investments in their mobile homes and equalize the bargaining position between park owners and tenants.(170) The Supreme Court previously upheld these goals as legitimate.(171) The court determined a rational legislator could thus have believed the rent control ordinance would accomplish the stated goals and affirmed dismissal of the substantive due process claim.(172)

The park, however, was not finished. It contended the district court should have allowed it to amend its complaint because alleging the ordinance did not allow for a fair return on its investment may have been sufficient to state an as-applied due process claim.(173) The district court acknowledged this prospect but refused to allow amendment of the pleadings. The Ninth Circuit reversed and remanded for the district court to provide an explanation for its action.(174) The court of appeals thus left the park with a portion of its case intact, but it is difficult to envision success based on simple dimunition in value.

IV. Other Taking Issues

A. Settlement Agreements: Stephens v. City of Vista(175)

In this case, the court held that a settlement agreement to resolve an inverse condemnation lawsuit is binding on the parties regardless of the merits of the original underlying taking claim.(176)

The Stephens family planned to develop an apartment complex on a parcel of their property. The city approved the lowering of a street the family intended to use for primary access to the property. This made it difficult to service the property due to the difference in elevation between the street and the land. The city also rezoned the property, reducing the density from 150 to 50 units.(177)

The Stephens filed an inverse condemnation action against the city in state court, and subsequently filed another action in federal court on the same grounds, also alleging violation of civil and constitutional rights.(178) After the district court denied the city's motion for judgment on the pleadings, the parties entered into a settlement agreement whereby the city agreed to rezone the property to "permit a maximum total development" of 140 units.(179) The district court approved the agreement and made it part of the judgment.(180)

The property was rezoned and the planning commission approved a site development plan for construction of the apartment complex for 140 units. The mayor then appealed this decision to the city council which then voted to deny the plan without prejudice and instead adopted a staff recommendation that allowed for resubmission with modifications that reduced the density.(181) The property owner simply reinstituted the original action against the city in federal court.(182)

The district court abstained from considering the inverse condemnation claim, but determined the city violated the settlement agreement because, as a matter of law, the agreement entitled the property owners to develop 140 units.(183) The court determined the difference in value between the present density (55 units) and the project under the settlement agreement (140 units) was $727,500 and awarded damages in that amount.(184)

The city contended on appeal that its inherent police power authority did not allow for 'contracting away' the exercise of its discretion.(185) The court of appeals rejected this claim and held that the city could approve 140 units and exercise its review functions over the implementation of the development without giving up its power to regulate land use.(186) The city also argued the settlement agreement only allowed for "a maximum of 140 units" and this was not a guarantee of that density.(187) The appeals court disagreed, and upheld the district court's determination that the terms of the agreement and the evidence made it clear the city was obligated to approve the higher density.(188) The court upheld the measure of damages.(189)

B. NEPA and Physical Acquisition:

United States v. 0.95 Acres of Land(190)

In United States v. 0.95 Acres of Land, the Ninth Circuit ruled that the National Environmental Policy Act (NEPA)(191) was not a defense to a taking.(192) The Forest Service acquired land for a new road system to access a timber sale in a national forest.(193) The Forest Service and adjacent property owners were unable to negotiate an agreement, so the Forest Service filed an action in federal district court to acquire the property under the Declaration of Taking Act.(194) The court issued orders of possession by the Forest Service but the property owners contended the change in land title was a major federal action requiring full compliance with NEPA.(195) The court accepted this argument and vacated its previous order.(196)

On appeal by the Forest Service, the Ninth Circuit examined the federal condemnation process.(197) The trial court's declaration that the United States had the right to possess the property is not a final, appealable decision.(198) The court said, "[t]he only question for judicial review in a condemnation proceeding is whether the purpose for which the property was taken is for a Congressionally authorized public use."(199) However, in this case, the property owners were not challenging the authority to take. They were instead, alleging that the condemnation could not stand because the government did not comply with NEPA.(200)

The Ninth Circuit relied on precedent from other circuits that compliance with NEPA was not a defense to a condemnation action.(201) The court first analogized the NEPA claim to a case concerning noncompliance with the National Historic Preservation Act (NHPA).(202) In that case, the Fifth Circuit concluded that the role of the court in the Declaration of Taking Act was: limited to a bare consideration of the legal authority to take, and where the courts have been careful to refrain from considering matters of propriety, expediency and policy with regard to the use of the property sought, we conclude that only an express statement by Congress that NHPA non-compliance is a defense to a condemnation itself would be sufficient to achieve that result.(203)

The Ninth Circuit held this reasoning equally applicable to a NEPA challenge. The court further reasoned that jurisdiction in a condemnation action was limited to determining whether the purpose for which the property was taken was a Congressionally authorized public use.(204) It concluded that the filing of the condemnation order was not a major federal action "significantly affecting the environment."(205) In essence, the necessity of taking private property for public use is legislative in nature and the court lacks jurisdiction beyond the narrow confines of the Declaration of Taking Act.(206) For these reasons, the Ninth Circuit held that NEPA was not a defense to the taking legislation and reversed the district court decision.(207)

V. CONCLUSION

The Ninth Circuit's taking decisions in 1993 provide a chart to aid navigation through constitutional waters. While the issues are complex, the practitioner need only analyze the chart carefully to avoid peril. Despite the enormous amount of critical commentary that exists on the subject, the cases present a carefully conceived guide for avoiding the dangers of a difficult passage as well as the potential for expensive, and ultimately useless litigation. The Fifth Amendment is simply not a panacea for property owners who object to land use or natural resource regulation. (1.) "[N]or shall private property be taken for public use without just compensation." U.S. Const. amend. V. (2.) It is ironic that there is so much practical and scholarly discussion of a legal challenge which so rarely succeeds. The frequency with which development proponents assert regulatory taking and public officials express fears that regulatory action may run afoul of the taking limitation suggests either gross misunderstanding of the potency of the limitation or disingenuous cloaking of policy choice in legal garb to avoid political accountability. Richard Settle, Washington Land Use and Environmental Law and Practice 228 (1983). (3.) Lucas v. South Carolina Coastal Council, 112 S. Ct 2886 (1992). (4.) This review does not address decisions that have not been reported. (5.) For a more comprehensive discussion of Lucas, see generally Colloquium on Lucas, 23 Envtl. L. 869 (1993). See also, Joseph Sax, Property Rights and the Economy of Nature: Understanding Lucas v. South Carolina Coastal Council, 45 Stan. L. Rev. 1433 (1993). (6.) Outdoor Systems, Inc. v. City of Mesa, 997 F.2d 604 (9th Cir. 1993). (7.) Id. (8.) Nollan v. California Coastal Commission, 483 U.S. 825 (1987) (describing "essential nexus" as requiring that regulation "substantially advance" a legitimate state interest". (9.) Outdoor Systems, Inc., 997 F.2d at 618 (9th Cir. 1993). (10.) Id. at 607. (11.) Civil Rights Act, 42 U.S.C. [section] 1983 (1988 & Supp. IV. 1992). (12.) Outdoor Systems, Inc., 997 F.2d at 609. (13.) Id. at 608. (14.) Id. (15.) Id. (16.) Nollan, 493 U.S. at 825. (17.) See Id. at 834, 837, 841. (18.) Id. at 837. (19.) Outdoor Systems, Inc., 997 F.2d at 616. (20.) Id. (21.) Id. (22.) Id. (23.) Id. (24.) Christiansen v. Yolo County, 995 F.2d 161 (9th Cir. 1993). (25.) Outdoor Systems, Inc., 997 F.2d at 616 (quoting Lake Nacimiento Ranch Co. v. San Luis Obispo, 841 F.2d 872, 877 (9th Cir. 1987), cert. denied, 488 U.S. 827 (1988)). (26.) Id. at 616-17. (27.) Id. at 617. The land was to be used as a site of a sports complex. Id. (28.) Id. (29.) 271 U.S. 583 (1926). (30.) Id. at 598. (31.) Outdoor System, Inc., 997 F.2d at 617. (32.) Id. (33.) Id. (34.) Outdoor Systems, Inc. v. City of Mesa, 819 P.2d 44, 51 (Ariz. 1991) (answering the Ninth Circuit's certified question regarding Arizona's land use law). (35.) Outdoor Systems, Inc., 997 F.2d at 617. (36.) Lucas, 112 S. Ct. at 2886. (37.) Outdoor Systems, Inc., 997 F.2d 604, 618 (9th Cir. 1993) (citing Lucas, 112 S. Ct. at 2899-900); see also Symposium, Windfalls and Wipeouts: Environmental Regulation,Property and the |Takings' Clause After Lucas v. South Coastal Carolina Council, 17 VT. L REV. 645 (1993). (38.) Outdoor Systems, Inc., 997 F.2d at 618. The Oregon Supreme Court reached a similar result in Dodd v. Hood River County, 855 P.2d 608 (Or. 1993). The court determined that denying construction in an area zoned for farm use did not constitute a taking. Lucas, it said, had no bearing on the analysis:

The Supreme Court's speculation in dictum about what it might do in different circumstances falls far short of indicating that the Fifth Amendment provides greater protection to property owners than does Article I, section 18 [just compensation clause of Oregon constitution], where less than all beneficial use of property is taken. In Lucas, the state chose not to contest the land owner's allegation that his land had been stripped of all economically beneficial use. The test set forth in Fifth Avenue provides that there is no taking if the land owner retains "some substantial beneficial use" of the property. If all economically beneficial use had been taken, a fortiori, no substantial beneficial use remains. Dodd, 8E,5 P.2d at 615. (39.) Outdoor System, Inc., 997 F.2d at 618. (40.) Id. (41.) Id. (42.) William Rodgers, Handbook Environmental Law 203 (1977). (43.) Nixon v. United States, 978 F.2d 1269 (D.C. Cir. 1992). (44.) Notrica v. FDIC, 2 F.3d 961 (9th Cir. 1993). (45.) Id. at 962. (46.) Id. at 966. (47.) D'Oench, Duhme & Co. v. FDIC, 315 U.S. 447 (1942). (48.) Notrica, 2 F.3d at 964 (quoting FDIC v. Zook Bros. Constr. Co., 973 F.2d 1448, 1450 (9th Cir. 1992)). (49.) Id. (50.) Id. at 966. (51.) Id. (52.) Falk v. Mt. Whitney Sav. & Loan Ass'n, 5 F.3d 347, 348,49 (9th Cir. 1993). (53.) Id. (54.) Id. at 351. (55.) Id. (56.) Christiansen v. Yolo County, 995 F.2d 161 (9th Cir. 1993). (57.) Id at 163. (58.) Id. (59.) Id. at 164. (60.) Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985). See also Broughton Lumber Co. v. Columbia River Gorge Commission., 975 F.2d 616, 621 (9th Cir. 1992), cert. denied, 114 S. Ct 60 (1993) where the court stated, "The basic rationale of the ripeness doctrine is to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements. If a claim is not ripe for review, the federal courts lack subject matter jurisdiction and they must dismiss the claim." (internal quotation marks and citations omitted). See also W. Birkenfeld Trust v. Bailey, 827 F. Supp. 651 (E.D. Wash. 1993) (dismissing a taking claim against the Columbia River Gorge Commission and the U.S. Forest Service). [A] case or controversy is not presented simply because a party is subject to a general regulatory process which, when applied to the specific facts developed in some future administrative proceeding, might cause a state agency to take a particular action which some court might thereafter determine to be unconstitutional." Id. at 664 (citations omitted). (61.) Williamson County Regional Planning Comm'n, 473 U.S. at 186-87. (62.) Christiansen, 995 F.2d at 164 (quoting Kinzli v. City of Santa Cruz, 818 F.2d 1449, 1454 (9th Cir. 1987), modified, 830 F.2d 968 (9th Cir. 1987), cert. denied, 484 U.S. 1043 (1988)). (63.) Id. (64.) Id. (quoting Sinaloa Lake Owners Association v. City of Simi Valley, 882 F.2d 1398, 1402 (9th Cir. 1989)). (65.) Williamson County Regional Planning Comm'n, 473 U.S. at 194-95. (66.) Christiansen, 995 F.2d at 164. (67.) Id. (quoting Austin v. City and County of Honolulu, 840 F.2d 678, 681 (9th Cir. 1988), cert. denied, 488 U.S. 852 (1988)). (68.) Id. at 164. (69.) Id. at 164-65 (quoting Agins v. City of Tiburon, 447 U.S. 255 (1980)). (70.) Id. at 165. (71.) Id. (72.) Id. (73.) Id. (74.) Id. (75.) Id. (76.) Id. (77.) Id. (78.) Id. (79.) Mission Oaks Mobile Home Park v. City of Hollister, 989 F.2d 359 (9th Cir. 1993), cert. denied, 114 S. Ct. 1052 (1994). (80.) Palomar Mobilehome Park Ass'n v. City of San Marcos, 989 F.2d 362 (9th Cir. 1993). (81.) Levald, Inc. v. City of Palm Desert, 998 F.2d 680 (9th Cir. 1993), cert. denied, 114 S. Ct. 924 (1994). (82.) However, a recent decision of the Washington Supreme Court reveals a different approach which should be carefully evaluated. In Guimont v. Clark, 854 P.2d 1 (1993), cert. denied, 62 U.S.L.W. 3587 (Mar. 7, 1994), a group of mobile home park owners challenged legislation requiring them to pay relocation assistance when a park is closed down. The court rejected an inverse condemnation claim but struck down the statute for violation of substantive due process. Guimont, 854 P.2d at 16-17. (83.) Mission Oaks Mobile Home Park, 989 F.2d at 361. (84.) Id. at 360. (85.) Id. (86.) Id. (87.) Id. (88.) Mission Oaks Mobile Home Park, 989 F.2d at 360. (89.) Younger v. Harris, 401 U.S. 37 (1971). Abstention based on the Younger rule rests on a strong policy against "federal-court interference with pending state judicial proceedings absent extraordinary circumstances." Mission Oaks Mobile Home Park, 989 F.2d at 360 (quoting Middlesex County Ethics Commission. v. Garden State Bar Association, 457 U.S. 423, 431 (1982)). Abstention is appropriate if three requirements are met: the state proceedings are ongoing, the state proceedings implicate important state interests, and the state proceedings provide plaintiff with an adequate opportunity to raise federal questions. Id. at 360-61. (90.) Mission Oaks Mobile Home Park, 989 F.2d at 361. (91.) Id. (92.) Id. (93.) Sierra Lake Reserve v. City of Rocklin, 938 F.2d 951 (9th Cir. 1991), vacated, 113 S. Ct. 31 (1992), modified, 987 F.2d 662 (9th Cir. 1993). (94.) Id. (95.) Mission Oaks Mobile Home Park, 989 F.2d at 361. (96.) Id. at 361. The prior decision was Hall v. City of Santa Barbara, 833 F.2d 1270 (9th Cir. 1987), cert denied, 485 U.S. 940 (1988), overruled by Yee v. City of Escondido, 112 S. Ct 1522, 1526-29 (1992). (97.) Mission Oaks, 989 F.2d at 361. (98.) Pennzoil Co. v. Texaco, Inc., 481 U.S. 1 (1987). (99.) Id. at 15. (100.) Mission Oaks Mobile Home Park, 989 F.2d at 361. (101.) Id. (102.) Id. at 362. (103.) Id. (104.) Palomar Mobilehome Park Ass'n v. City of San Marcos, 989 F.2d 362 (9th Cir. 1993). (105.) Id. at 365-66. (106.) Id. (107.) Id. at 363. (108.) Id. (109.) Id. (110.) Full Faith and Credit Act, 28 U.S.C. $S 1738 (1988 & Supp. IV 1992). (111.) Palomar Mobilehome Park Ass'n, 989 F.2d at 364 (quoting Parsons Steel v. First Alabama Bank, 474 U.S. 518, 523 (1986)). (112.) Id. In California, a judgment sustaining a general demurrer is a judgment on the merits. See, e.g., Crowley v. Modern Faucet Mfg. Co., 282 P.2d 33, 34 (Cal. 1955). To the extent that it adjudicates the facts alleged to not constitute a cause of action, the judgment bars a second action on the same facts. Palomar Mobilehome Park Ass'n, 989 F.2d at 364. (113.) Palomar Mobilehome Park Ass'n, 989 F.2d at 364. (114.) Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985). (115.) Palomar Mobilehome Park Ass'n, 989 F.2d at 364. (116.) Peduto v. City of North Wildwood, 878 F.2d 725 (3d Cir. 1989). (117.) Palomar, 989 F.2d at 364. (118.) Id. at 729. (119.) Palomar Mobilehome Park Ass'n, 989 F.2d at 364-65. California, like most states, holds that the doctrine of res judicata "will bar not only claims actually litigated in a prior proceeding, but also claims that could have been litigated. Id. (120.) Id. at 365. The same issue is present is another case currently pending before the Ninth Circuit, Dodd v. Hood River County, No. 93-35207 (9th Cir.). (121.) Id. (122.) Id. (123.) Id. (124.) Id. (125.) Id. (citing District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 484-85 (1983)). (126.) Id. (127.) Levald, Inc. v. City of Palm Desert, 998 F.2d 680 (9th Cir. 1993), cert. denied, 114 S. Ct. 924 (1994). (128.) Id. at 685. (129.) Id. at 686. (130.) Id. at 687. (131.) Id. at 690. (132.) Cal Civ. Code [subsection] 798 (West 1982 & Supp. 1994). (133.) Levald, Inc., 998 F.2d at 683. (134.) Id. at 683-84. (135.) Id. (136.) Id. (137.) Id. (138.) Id. (139.) Id. (140.) Id. (141.) Id. (citing Loretto v. Teleprompter Manhattan CATV Corp., 485 U.S. 419, 426 (1982)). (142.) Id. (citing Penn Central Transp. Co. v. New York City, 438 U.S. 104, 123-25 (1978)). (143.) Id. (citing Yee v. City of Escondido, 112 S. Ct 1522, 1526 (1992)). (144.) Id. (145.) Id. (146.) Yee v. City of Escondido, 112 S. Ct. 1522 (1992). (147.) Levald, Inc., 998 F.2d at 685 (quoting Yee, 112 S. Ct. at 1528 (1992)). (148.) Id. (149.) Id. (150.) Id. (relying on Yee, 112 S. Ct. at 1532). (151.) Levald, Inc., 998 F.2d at 683. (152.) Id. at 686 (citing Yee, 112 S. Ct. at 1532). (153.) Id. (citing Sinaloa Lake Owners Ass'n v. City of Simi Valley, 882 F.2d 1398, 1402 (9th Cir. 1989)). (154.) First Evangelical Church v. County of Los Angeles, 482 U.S. 304 (1987). (155.) Guinnane v. City and County of San Francisco, 241 Cal. Rptr. 787, 789 Cal.Ct.App (1988), cert. denied, 488 U.S. 823 (1988). (156.) Levald, Inc., 998 F.2d at 686. (157.) Id. at 686-89. (158.) Id. at 687. (159.) Id. at 687-88. (160.) Id. at 688. (161.) Id. (162.) Id. (163.) Id. (164.) Id. (165.) Id. (166.) Id. (167.) Id. at 689. (168.) Id. (169.) Id. (quoting Shelton v. City of College Station, 780 F.2d 475, 483 (5th Cir. 1986) (en banc) (emphasis omitted)). (170.) Id. (171.) Pennell v. City of San Jose, 485 U.S. 1, 13-14 (1988). (172.) Levald, Inc., 998 F.2d at 691-92. (173.) Id. at 691. (174.) Id. at 691-92. (175.) Stephens v. City of Vista, 994 F.2d 651 (9th Cir. 1993). (176.) Id. at 653-54. (177.) Id. at 652-53. (178.) Id. at 652. (179.) Id. (180.) Id. (181.) Id. at 653. (182.) Id. (183.) Id. (184.) Id. at 654. (185.) Id. (186.) Id. at 655-66. (187.) Id. at 656. (188.) Id. (189.) Id. (190.) United States v. 0.95 Acres of Land, 994 F.2d 696 (9th Cir. 1993). (191.) National Environmental Policy Act, 42 U.S.C. [sub-section] 4321-70 (1988 & Supp. IV 1992). (192.) 0.95 Acres of Land, 994 F.2d at 699. (193.) Id. (194.) Id. at 696 (citing the Declaration of Taking Act, 40 U.S.C. [sections] 258(a)-258(f) (1988 & Supp. IV 1992)). (195.) Id. (citing National Environmental Policy Act of 1969, 42 U.S.C. [sub-section] 4321-4370 (1988 & Supp. IV 1992)). (196.) Id. at 698. (197.) Id. (198.) Id. (199.) Id. (quoting United States v. 416.18 Acres of Land, 514 F.2d 627, 631 (7th Cir. 1975)). (200.) Id. (201.) Id. (202.) 0.95 Acres of Land, 994 F.2d at 698. The act is codified at 16 U.S.C. [sub-section] 470-470s (1988 & Supp. V 1994). (203.) United States v. 162.20 Acres of Land, 639 F.2d 299, 304 (5th Cir. 1981), cert. denied, 454 U.S. 828 (1981). (204.) 0.95 Acres of Land, 994 F.2d at 699. (205.) Id. (206.) Id. (207.) Id.