The U.S. Supreme Court has declined to review a takings case involving a San Francisco housing law, but Associate Justice Antonin Scalia issued a scathing dissent in which he equated San Francisco's law with extortion and questioned a state appellate court's willingness to follow "takings" precedents.
Ten years ago, San Francisco rejected the application of Claude and Micheline Lambert, who asked to convert 24 units of their Cornell Hotel from residential to tourist use. San Francisco's hotel conversion ordinance prevents the conversion of residential hotel rooms unless the landowner provides replacement units or pays replacement costs. The city insisted replacement would cost $600,000. The Lambert's said they would pay only $100,000. But no fee was ever imposed because the Planning Commission denied the application due to affordable housing, neighborhood character and traffic concerns.
The Lamberts sued, claiming that the city's denial was based on their refusal to pay the $600,000. But the trial court and the Second District Court of Appeal, on a 2-1 decision, said the mitigation fee issue was irrelevant and they ruled for the city. The state Supreme Court granted a petition in 1998, but last year unanimously decided it was a mistake to hear the case. (See CP&DR Legal Digest, September 1999, October 1997.) The Lamberts then sought a hearing before the U.S. Supreme Court.
According to The New York Times, Scalia lobbied his colleagues for months to take the case. But in the end, only he and Justices Anthony Kennedy and Clarence Thomas voted to grant certiorari. Four votes were needed to hear the case.
In a dissent from the denial of certiorari, which justices file only a few times a year, Scalia said the Lambert's refusal to pay an excessive fee was at the heart of the matter, and the high court's Nollan/Dolan standard regarding takings should apply. Nollan v. California Coastal Comm'n 483 U.S. 825 (1987); Dolan v. City of Tigard, 512 U.S. 374 (1994). Those cases require a nexus between conditions of project approval and the project impacts that are being offset.
"It is simply and obviously not true that the commission ignored petitioners' refusal to satisfy its fee demand," Scalia wrote. He continued, "The object of the Court's holding in Nollan and Dolan was to protect against the State's cloaking within the permit process ‘an out-and-out plan of extortion.' There is no apparent reason why the phrasing of an extortionate demand as a condition precedent rather than as a condition subsequent should make a difference."
Scalia further questioned portions of the Court of Appeal decision, which he called "so implausible as to call into question the state's court's willingness" to enforce the Nollan/Dolan standard on government officials.
The case is Claude Lambert v. City and County of San Francisco, No. 99-697, 2000 Daily Journal D.A.R. 3161.
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