The owners of beachfront property are not entitled to compensation for a public access easement that the state required in exchange for a building permit many years earlier, the Ninth U.S. Circuit Court of Appeals has ruled.
The Santa Barbara County beachfront property owner needed to challenge the exaction when the state levied it — not years later when a public agency got around to accepting the easement, the court ruled.
The case is one of the Ninth Circuit's first applications of the U.S. Supreme Court's ruling last year in a different takings case, Palazzolo v. Rhode Island, 121 S.Ct. 2448 (see CP&DR Legal Digest, August 2001). In Palazzolo, the U.S. Supreme Court allowed to proceed a takings suit over regulations that were in effect when the landowner acquired the property. The Ninth Circuit found that the case from Santa Barbara County was different because in Santa Barbara County the taking had already occurred; whereas, Palazzolo was challenging an existing regulation that could affect a still-proposed development.
The Santa Barbara County case dates to the mid-1970s, when the California Coastal Commission and its predecessor, the California Coastal Zone Conservation Commission, exacted public access easements as a condition of approving all sorts of building projects. That practice was curtailed in 1987 when the U.S. Supreme Court ruled that requiring a coastal access easement in exchange for a permit to tear down a house and replace it with a taller model was an unconstitutional taking. Nollan v. California Coastal Commission, 483 U.S. 825.
In 1974, landowner Carl Johnson sought permission to divide beachfront property into four parcels. A regional division of the Coastal Zone Conservation Commission approved the application but required Johnson to make a 25-year offer of dedication for a five-foot-wide pedestrian and bicycle easement. Johnson appealed the exaction to the state coastal panel, but lost. Three years later, Johnson applied for a permit to build a house on one of the new lots. He received the permit but had to renew the 25-year offer of dedication. In 1987, shortly after the Nollan decision came down, the owners of the house Johnson built signed another 25-year offer of dedication at the request of the Coastal Commission.
In 1997, Ann Daniel and Leonard Hill purchased the house. In October 1998, Santa Barbara County accepted the offer of dedication that was made in 1987, despite a protest by the new homeowners.
In November 1998, Daniel filed a lawsuit against Santa Barbara County under the Civil Rights Act (42 U.S.C. § 1983) alleging a physical taking of property in violation of the Fifth Amendment. District Court Judge Margaret Morrow ruled that Daniel did not have standing to challenge the easement because she did not own the property when the offer of dedication was made. Furthermore, the lawsuit was filed too late because the offers of dedication were made many years earlier, Morrow ruled. Daniel appealed, but a unanimous three-judge panel of the Ninth Circuit upheld the decision.
Daniel argued that it was the county's acceptance of the offer of dedication that amounted to a taking. But the court disagreed and said the government requirement of the offer itself was at issue, not the county's acceptance. Previous landowners needed to challenge the requirement when the state imposed it.
"[T]he last offer to dedicate — the 1987 IOTD [irrevocable offer to dedicate] — was exacted ten years before the Daniels purchased the property," Judge William Fletcher wrote for the Ninth Circuit. "Under any possible accrual date for a takings claim based on the IOTD, the statute of limitations for a §1983 claim has now expired."
Daniel was aware of the offer of dedication when she purchased the property, and the price likely reflected the offer's existence, Fletcher wrote. Those factors were not enough to prevent the landowner in Palazzolo from pursuing a takings lawsuit. This case, however, was different.
The Palazzolo decision rejected a blanket rule regarding existing land use regulations. "But Palazzolo … did not adopt a rule that would find a taking whenever there are pre-existing restrictions on land use that reduce market value," Fletcher wrote. "If that were the rule, no land-use restriction would ever be safe from a takings challenge."
"In sum, in Palazzolo, the landowner took ownership of the property subject to pre-existing wetlands regulations that had the potential, in the context of a specific proposed project, later to effect a regulatory taking. In this case, the Daniels purchased their property subject to the County's pre-existing options to accept dedication of any easement, which were already-accomplished physical takings," Fletcher wrote. "The Daniels, who purchased with the knowledge of the County's options to accept the easement, may not, by virtue of that purchase, revive their predecessors' time-barred claims for those takings."
Ann Daniel v. County of Santa Barbara, No. 99-56887, 02 C.D.O.S. 2293, 2002 DJDAR 2839. Filed March 12, 2002.
For Daniel: Steven Amerikaner, Hatch & Parent, (805) 963-7000.
For the county: William Dillon, county counsel's office, (805) 568-2950.
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