Chico Subdivision Modifications Don't Qualify As Illegal Exaction

The apportionment of lots in a subdivision is not an "exaction" under the Mitigation Fee Act, a state appellate court has ruled.

The ruling stemmed from a Chico City Council decision to alter a subdivision approved by the Planning Commission. The council precluded development on one large parcel and transferred the permissible housing units to an adjacent parcel. The developers argued that this decision amounted to an illegal exaction under the Mitigation Fee Act. But a trial court and the Third District Court of Appeal found that the city's decision fell under the Subdivision Map Act and that the developer's lawsuit alleging an illegal taking was filed too late to challenge a map act decision.

In March 2005, the Chico Planning Commission approved the Oak Valley subdivision of up to 1,300 units on 340 acres in the foothills on the east side of town. The commission authorized 80 to 160 units on "Lot Q." Opponents appealed to the City Council, which in May 2005 affirmed the decision but also approved a motion of intent to limit Lot Q to 80 units. Upon making a final decision on September 20, 2005, the council prohibited residential use of Lot Q and increased permissible development on Lot P by 160 units. The council said Lot Q should remain open space because of its steep slopes, oak woodlands, riparian areas and rare plant species.

Developer Tom Fogarty, who has been attempting to sell the project, contended that the City's Council's ultimate decision unconstitutionally reduced the fair market value of Lot Q by $17 million. He filed a lawsuit on December 19, 2005, but did not serve the city with the suit until December 27 98 days after the City Council's final decision.

Butte County Superior Court Judge Barbara Roberts threw out the lawsuit because the Subdivision Map Act gives plaintiffs 90 days to serve a summons after the date of the public agency's decision. Fogarty appealed, arguing that the Mitigation Fee Act which gives plaintiffs 180 days applied.

The Mitigation Fee Act (Government Code 66000 et seq.) permits an attack on fees, dedications, reservations and "other exactions." Fogarty argued that the City Council's decision fell into the "other exactions" category.

However, the Third District noted that fees, dedications and reservations all concern either the payment of money or an interest in land and not land use restrictions.

"The interpretation that the plaintiffs champion violates the intrinsic principle of ejusdem generis, under which we should construe general terms following specific terms as embracing only objects similar in nature to the specific term," Justice Rodney Davis wrote for the unanimous three-judge panel. "As the plaintiffs concede, the specific terms in 66020 all involve divesting a developer of either money or a possessory interest in the subject property. The present land use conditions at issue do not result in either consequence; they are simply a restriction on the manner in which the plaintiffs may use their property."

The remedy for a violation of the Mitigation Fee Act is a refund or return of the improper exaction. But in this case, a refund or return would not be possible because nothing was transferred to the city, Davis wrote.

Thus, the Mitigation Fee Act and its 180-day time limit do not apply, the court concluded. Nothing prevented Fogarty from seeking redress under the Subdivision Map Act (Government Code 66410 et seq.), the court noted.

In May, Fogarty asked the state Supreme Court to review the case.

The Case:
Fogarty v. City of Chico, No. C052576, 07 C.D.O.S. 2660, 2007 DJDAR 3375. Filed March 12, 2007.
The Lawyers:
For Fogarty: Douglas Aikins, GCA Law Partners, (650) 428-3900.
For the city: James Meeder, Allen, Matkins, Leck, Gamble, Mallory & Natsis, (415) 837-1515.