Partial Regulatory Takings

Partial Regulatory Takings

1.INTRODUCTION.
When governmental regulatory action denies only part of the economically viable use of private land, the courts have recognized the right to just compensation more in theory than in practice. This article advocates: (a) an end to this reluctance to award just compensation for partial regulatory takings; (b) sharper focus on four factors which the United States Supreme Court has stated are important in determining whether partial regulatory takings are compensable; and (c) allocating the burden of proof on, instead of "balancing," these factors. This article also examines whether partial regulatory takings exist where there is no need to analyze the four factors because the affected landowners have a "categorical" right to just compensation.
2.DEFINITIONS.
Regulatory takings cases have generated their own, rich terminology, which includes the following:

Physical takings–The Takings Clause of the Fifth Amendment of the United States Constitution requires payment of just compensation when private property is "taken" for public use. Physical takings occur when the government physically seizes possession of land for public use, or when the government, by regulation, authorizes another to seize such possession.
Regulatory takings–Property can be squeezed as well as seized. Regulatory takings occur when the government tries to indirectly control property through regulatory action, without physically seizing it.
Economically viable use–The economically viable use of a property is a subset of all the uses which might be made of the property. Although not yet precisely defined, the concept presumably involves uses that are "economically realistic in light of the (affected property’s) setting and circumstances," from which the landowners can derive income sufficient to, at least, recoup reasonable capital investments, the cost of improvements, and the cost of property taxes and other basic expenses of ownership.
Deprivation fraction –The following fraction:
Numerator = % of Economically Viable Use Denied
Denominator = % of Fee Simple Absolute Interest Regulated

Total regulatory takings–These occur when the numerator and denominator of the deprivation fraction both equal 100%; i.e., when regulatory action denies landowners all economically viable use of a legal parcel of land. It has been said that the main difference between the total regulatory taking and the physical taking of land is that the former "leaves the owner with the burden of paying taxes on the property, while the (latter) relieves him of that burden."
Partial regulatory takings–These occur when the numerator or the denominator of the deprivation fraction, or both, are less than 100%; i.e., when regulatory action denies part of the economically viable use of land.
Categorical Treatment–This term is shorthand for the result in most physical takings and total regulatory takings; i.e. the government must pay just compensation. The affected landowners have a categorical right to just compensation no matter how minute the physical intrusion and no matter how weighty the governmental or public interests furthered by the regulatory action. Various exceptions are recognized, including one where the government acts to prevent a common law nuisance.

Denominator cases–In this special class of partial regulatory takings, the numerator of the deprivation fraction equals 100%, but the denominator does not; i.e., regulatory action denies all economically viable use of part of the interest in a single legal parcel of land. Part 8, infra discusses whether denominator cases should receive, in certain situations, the same categorical treatment that physical takings and total regulatory takings receive.
3.THE NEED FOR A CONSTITUTIONAL BALANCE BETWEEN THE REGULATORY POWER AND PRIVATE PROPERTY RIGHTS.
Government has broad, inherent power to regulate land use. However, this power, like any other, can be abused. The "natural tendency of human nature is to extend (the government’s already broad regulatory power) more and more until at last private property disappears." It is not entirely unheard of for governmental enthusiasm to exceed the boundaries of fair play in the takings context. Government officials are subject to political or fiscal pressures. They may be tempted to avoid payment of just compensation by using their regulatory power to indirectly control land without directly seizing it.

Regulatory takings jurisprudence addresses this conflict between the government’s broad regulatory power and the equally broad potential for abuse of that power. On the one hand, government "hardly could go on" if just compensation was required every time land use was regulated. On the other, private property rights must be protected from governmental overreaching.
4.REGULATORY TAKINGS JURISPRUDENCE AND THE PROBLEM OF PARTIAL REGULATORY TAKINGS.
In 1922, the United States Supreme Court held that when regulatory action goes "too far" in infringing on private property rights, a regulatory taking occurs, and just compensation must be paid.
Over the ensuing years, the Court has avoided any set formula for determining when regulatory action goes "too far." Instead, it has suggested "essentially ad hoc, factual inquiries," where four factors would have particular significance in determining whether the government must pay just compensation. The four factors are: (a) the economic impact of the regulatory action on the owners; (b) the extent to which the regulatory action interferes with distinct, investment-backed expectations of the owners; (c) the character of the regulatory action; and (d) whether the regulatory action forces the owners to bear burdens which the public as a whole should bear.

The Court has also focused on certain limited types of regulatory takings where the right to just compensation is apparent without an analysis of the four factors. First, the Court gave categorical treatment to physical takings and to total regulatory takings, finding that the landowners have a categorical right to just compensation no matter how minute the physical intrusion and no matter how weighty the public interests furthered by the regulatory action. Second, it shifted the burden of proof to the government in cases where landowners were forced to dedicate part of their land as a condition to development of the whole.
The Court has never awarded just compensation in a partial regulatory takings case based on an analysis of the four factors, but has commented generally on the problem. It has stated that "diminution in property value, standing alone, can(not) establish" any right to just compensation, and that even severe decreases in value may not be compensable if all of the evidence shows a proper exercise of the regulatory power. Nevertheless, because diminution in value does not always "stand alone," the Court has also recognized that the right to just compensation exists in some partial regulatory takings cases, and has stated that it is error to assume:

"that the landowner whose deprivation is one step short of complete is not entitled to compensation. Such an owner might not be able to claim the benefit of [categorical treatment], but, as we have acknowledged time and again, ‘[t]he economic impact of the regulation on the claimant and the extent to which the regulation has interfered with distinct investment-backed expectations’ are keenly relevant to takings analysis generally."
Lower federal courts and state courts have either (a) shown reluctance to award just compensation in partial regulatory takings cases in the absence of a definitive Supreme Court decision; or (b) recognized the right to just compensation, but struggled to apply the four factors described above.

. Article 1, §19 of the California Constitution goes further, requiring just compensation when private property is taken "or damaged" for public use. The state Constitution, therefore, "protects a somewhat broader range of property values" than the federal. However, it remains to be seen if this broader protection makes a practical difference in partial regulatory takings cases. (See Hensler v. City of Glendale (1994) 8 Cal.4th 1, 9, fn. 4.)

. (Lucas v. South Carolina Coastal Council (1992) 505 U.S. [120 L.Ed.2d 798, 812, 112 S.Ct. 2886, 2893] [physical seizure]; Yee v. Escondido (1992) 503 U.S. [118 L.Ed.2d 153, 162, 112 S.Ct. 1522, 1526] [authorization for physical seizure].)

. (Id., 505 U.S. [120 L.Ed.2d 798, 812, 112 S.Ct. 2886, 2892-93].)

. In Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 112 S.Ct. 2886], the United States Supreme Court proceeded on the assumption that regulatory action denied all economically viable use, even though the construction of non-habitable structures like walkways and decks was still permitted (Id., 505 U.S. [120 L.Ed.2d 798, 808, fn. 2, 112 S.Ct. 2886, 2889, fn. 2]); and even though the land could be sold as "buffer" and could still be used for camping, fishing, and the like (Id., 505 U.S. [120 L.Ed.2d 798, 844, fn. 3, 112 S.Ct. 2886, 2919, fn. 3] [dissenting opinion of Justice Stevens].).

. (Florida Rock Industries, Inc. v. U.S. (Fed. Cir. 1994) 18 F.3d 1560, 1571.)

. The "owner’s opportunity to recoup its investment or better, subject to the regulation, cannot be ignored" in regulatory takings analysis. (Florida Rock Industries, Inc. v. U.S. (Fed.Cir. 1986) 791 F.2d 893, 905, cert.denied 479 U.S. 1053 [93 L.Ed.2d 978, 107 S.Ct. 926].)

. For example, the term is used in Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 813, fn. 7, 112 S.Ct. 2886, 2894, fn. 7].

. (Moroney v. Mayor and Council (N.J.App.Div. 1993) 633 A.2d 1045, 1050.)

. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 812, 112 S.Ct. 2886, 2893].)

. (Id., 505 U.S. [120 L.Ed.2d 798, 815 et seq., 112 S.Ct. 2886, 2896 et seq.].)

. (Id., 505 U.S. [120 L.Ed.2d 798, 813, fn. 7, 112 S.Ct. 2886, 2894, fn. 7].)

. (Pennsylvania Coal Co. v. Mahon (1922) 260 U.S. 393, 415 [67 L.Ed. 322, 326, 43 S.Ct. 158, 160].)

. For example, in City of Los Angeles v. Decker (1977) 18 Cal.3d 860, 870 et seq., the City, through its attorney, misled the jury regarding the existence of a need for airport parking and the suitability of Decker’s property to meet that need, in order to persuade the jury to award Decker less compensation. The California Supreme Court ordered a new trial based on the misconduct, holding that the government in eminent domain cases acts in "a quasi-judicial capacity and should be encouraged to exercise (its) tremendous power fairly, equitably and with a deep understanding of the theory and practice of just compensation." (Id., at p. 871.) This high standard is not always met. In Healing v. California Coastal Commission (1994) 22 Cal.App.4th 1158, the court criticized the Coastal Commission’s regulatory conduct in the following terms:
"It is in the nature of our work that we see many virtuoso performances in the theatres of bureaucracy but we confess a sort of perverse admiration for the Commission’s role in this case. It has soared beyond both the ridiculous and the sublime . . . ." (Id., at p. 1168.)
Furthermore, California statutes recognize that the government, at times, needs deterrence in the takings context. (E.g., Gov. Code, §7267.2, §7267.5 and §7267.6 [concerning unreasonable pre-condemnation conduct and delay by the government].)

. This danger is especially apparent in the redevelopment context, because the government acts, in substance if not form, as the agent for private developers in acquiring property for redevelopment.

. (Pennsylvania Coal Co. v. Mahon, supra, 260 U.S. 393, 413 [67 L.Ed. 322, 325, 43 S.Ct. 158, 159].)

. (Id., 260 U.S. 393, 415 [67 L.Ed. 322, 326, 43 S.Ct. 158, 160].)

. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d. 798, 812, 112 S.Ct. 2886, 2893].)

. The first three factors are found in Penn Central Transportation Company v. City of New York (1978) 438 U.S. 104, 124 [57 L.Ed.2d 631, 648, 98 S.Ct. 2646, 2659]. The last is found in Yee v. Escondido, supra, 503 U.S. [118 L.Ed.2d 153, 162, 112 S.Ct. 1522, 1526].

. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 812-15, 112 S.Ct. 2886, 2892-95].)

. (Dolan v. City of Tigard (1994) 512 U.S. [129 L.Ed.2d 304, 114 S.Ct. 2309].)

. (Penn Central Transportation Co. v. City of New York, supra, 438 U.S. 104, 131 [57 L.Ed.2d. 631, 653, 98 S.Ct. 2646, 2662-63].)

. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 815, fn. 8, 112 S.Ct. 2886, 2895, fn. 8].)

. This reluctance often manifests itself in two ways. First, without detailed analysis of the four factors, the courts conclude that the regulatory action under review caused a "mere diminution" in value which is not compensable under the Supreme Court’s general comment (Ante, text accompanying fn. 21) that diminution in value, "standing alone," cannot establish a taking. Often the sense and substance of the Supreme Court’s comment is altered by omitting the phrase "standing alone." (E.g., Long Beach Equities, Inc. v. County of Ventura (1991) 231 Cal.App.3d 1016, 1036.) Second, the case is held to be unripe for adjudication on the merits, even though the government has clearly indicated that development of a certain type will not be permitted. (But see Ramona Convent of the Holy Names v. City of Alhambra (1993) 21 Cal.App.4th 10, 19-20 [where the case was found ripe for adjudication, though the Court ultimately ruled that the Convent had suffered only an uncompensable diminution in value].)

. For example, the property owner, in Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, needed two hearings before the Court of Claims, two appeals to the Federal Circuit and one denial of certiorari by the United States Supreme Court before the possibility of a partial regulatory takings cause of action became apparent, and the case was sent back down for further factfinding.
5.THE NEED FOR UNEQUIVOCAL RECOGNITION OF THE PARTIAL REGULATORY TAKINGS CAUSE OF ACTION.
The hope that over time "enough cases will be decided with sufficient care and clarity that the line (between compensable and non-compensable partial regulatory takings) will more clearly emerge," provides little comfort to those landowners whose right to just compensation is lost during the process.
Therefore, the right to just compensation in partial regulatory takings cases must be generally and unequivocally recognized in practice as well as in theory. There is:

"Nothing in the language of the Fifth Amendment (which) compels a court to find a taking only when the Government divests the total ownership of the property; the Fifth Amendment prohibits the uncompensated taking of private property without reference to the owner’s remaining property interests."
Anything less invites abuse. If only total regulatory takings are compensable, the government could evade just compensation through a simple device. Instead of denying all economically viable use, the government could simply leave the owners some arguably economic, but carefully neutered use.
Furthermore, just compensation is already required in special, limited classes of partial regulatory takings cases. These include: (a) cases where the government’s unreasonable pre-condemnation conduct or delay decreases the market value of property; (b) cases where temporary regulatory takings have occurred; and (c) as discussed above, cases where dedication of part of a given piece of land is required as a condition to development of the whole.

Therefore, any prejudice against the cause of action is unjustified. Lower courts should explore the boundaries of the cause of action without waiting for definitive guidance, in order to protect the rights of property owners, and in order to give the Supreme Court grist for review.
6.THE NEED FOR SHARPER FOCUS.
As a second step, courts must sharpen the focus on the four factors which the Supreme Court has suggested are important to the just compensation decision.
 
Impact On The Owners.
The first two factors–the economic impact of the regulatory action on the owners and the extent to which the regulatory action interferes with distinct, investment-backed owner expectations–are related in their examination of regulatory action from the owners’ standpoint. However, both are phrased in language that blurs the inquiry.
The references to "economic impact" and "the extent" of regulatory interference give the wrong impression that the severity of the decrease in market value due to regulatory action is decisive. Regulatory action that causes severe decreases in value may carry a "heightened risk" of governmental abuse. However, the Takings Clause protects more than those landowners with the deepest hurt.

The reference to "investment-backed" expectations is also unfortunate. It implies that only those landowners who have "real money" invested deserve protection from regulatory abuse. However, takings law also should protect the rights of landowners who take title by gift, and landowners whose property increases in value due to appreciation or luck. Furthermore, the just compensation decision is often influenced, though not determined, by land’s potential for development to its highest and best use, rather than its existing uses.
Instead, the focus of the inquiry should be on:
(a) The fact of decreased value. The Takings Clause requires "compensation." If landowners suffer no damages due to regulatory action, there is nothing to compensate.
(b) The cause of the decrease. The Takings Clause requires "just" compensation. The government does not have a duty to bail out property owners who have suffered losses due to their own bad business decisions, market forces or other reasons unrelated to regulatory action. "Just as the landowner should not be shortchanged, the public should not be burdened with paying a king’s ransom for a squire."

(c) The reasonableness of the owners’ expectations to realize the value decreased by the regulatory action. The government has been given broad regulatory power because an "intermediary between private interests (is needed) to provide a mutually beneficial environment from which all benefit and in which all can thrive." Landowners take title subject to this power to regulate as intermediary. Any expectation that use or development of private land can proceed in the absence of any governmental restraint is, therefore, an unreasonable expectation. On the other hand, owners’ have the right to expect that the government, in its role as intermediary, will not act arbitrarily or capriciously, changing the rules of the game unreasonably after the owners have already acted in reliance on prior rules, or treating one property differently from another similarly situated.
In making these determinations, market evidence and appraisal testimony are the starting point for the trial court. The concept of fair market value includes (a) what knowledgeable parties would do at arm’s length on the open market; (b) the property’s potential for development to its highest and best use; and (c) what the government would or could legally approve or disapprove before that highest and best use is realized. It, therefore, already reflects many of the expectations concerning a property’s potential for development that are reasonable for takings purposes.
The Government’s Ends and Means.

However, as discussed above, frustrated expectations of value, standing alone, cannot establish a compensable taking. The inquiry must, therefore, include the purposes behind the government’s regulatory action and the appropriateness of the means chosen by the government to achieve its goals.

The language of the third factor–the character of the regulatory action–implies that the government needs only a very good or important cause in order to avoid payment of just compensation. However:
"That the purpose and function of the regulatory imposition is relevant to drawing the line between mere diminution and partial taking should not be read to suggest that when government acts in pursuit of an important public purpose, its actions are excused from liability. To so hold would eviscerate the plain language of the Takings Clause, and would be inconsistent with Supreme Court guidance. It is necessary that the Government act in a good cause, but it is not sufficient."

The focus is sharpened by requiring a nexus between the regulatory action and the government’s stated purposes. The action must in fact and "substantially" further the public interests which the government says it will further. This is no mere "rational basis" test, nor is it merely a "pleading requirement" that can be satisfied by adept draftsmanship by the government’s staff. Deference to the government’s stated rationale and justification is inappropriate at this stage.
Furthermore, evidence regarding the government’s unstated purposes must also be received and considered. Regulatory action must substantially further "legitimate" public interests. It cannot be "a subterfuge for a taking of property without just compensation." The test is not "whether the (government) has recited a harm-preventing justification" for its regulatory action. Such justifications "can be formulated in practically every case" and reliance on them reduces the Takings Clause to a "test of whether the (government employs) a stupid staff." The Takings Clause requires "courts to do more than insist upon artful harm-preventing characterizations." The trial court must pierce form to get to substance, if the constitutional balance between the government’s regulatory power and private property rights is to be maintained.

. (Id., at p. 1571.)

. (Id., at p. 1568.)

. For example, Los Angeles County’s "Open Space" Zoning classification permits (among other things) beehives, campgrounds, farming and grazing without permit, and golf courses, cemeteries and hotels with permit. (L.A. County Plan. & Zon. Code, §22.40.40 et seq.) Depending on what uses are actually permitted when such classifications are applied, regulatory takings issues may arise.

. (E.g., Klopping v. City of Whittier (1972) 8 Cal.3d 39.)

. (E.g., First English Evangelical Lutheran Church of Glendale v. County of Los Angeles (1987) 482 U.S. 304 [96 L.Ed.2d 250, 107 S.Ct. 2378]; See Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1570, fn. 25 [where the court noted that temporary regulatory takings have similarities to partial regulatory takings].)

. (E.g., Dolan v. City of Tigard, supra, 512 U.S. [129 L.Ed.2d. 304, 114 S.Ct. 2309].)

. The United States Supreme Court has recognized that such a heightened risk of abuse exists for total regulatory takings because of their severity. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 814, 112 S.Ct. 2886, 2894-95].)

. Even the smallest physical takings are compensable. (Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1569.) Furthermore, if severity is the deciding factor, courts will have to determine a dividing line between severe impacts that require payment of just compensation and less severe impacts that don’t. The Constitution does not draw a bright line between the two, however.

. For example, Code of Civil Procedure §1263.321 requires a "just and equitable" method of determining just compensation for nonprofit, special use property for which there is "no relevant, comparable market."

. Otherwise, owners of real estate would be paid less just compensation during "boom" real estate markets, and courts would have to determine the relevant line of demarcation separating "real" value from mere "appreciation." That has never been the law.

. (E.g., City of San Diego v. Neumann (1993) 6 Cal.4th 738, 756 [just compensation may "reflect the development potential" of property].)

. This may be the limited thrust of the California Supreme Court’s holding in City of Los Angeles v. Ricards (1973) 10 Cal.3d 385, where the City cut off access to private property for two years. The Court held that the owner had suffered no damages, where she testified that she would not have used or developed the property during the delay, because she was holding it for investment purposes. (But see, Jones v. People ex rel. Dept. of Transportation (1978) 22 Cal.3d 144, 154-55 [distinguishing Ricards and finding a right to just compensation where evidence of damage existed].)

. (E.g., Ramona Convent of the Holy Names v. City of Alhambra, supra, 21 Cal.App.4th 10 [Convent school’s need to sell portion of its land in order to finance earthquake repairs was not an appropriate consideration in determining whether compensable taking existed].)

. (San Diego County Water Authority v. Mireiter (1993) 18 Cal.App.4th 1808, 1817, fn. 38.)

. "Reasonable" investment-backed expectations is sometimes used in place of "distinct" investment-backed expectations. (E.g. Pruneyard Shopping Center v. Robins (1980) 447 U.S. 74, 83 [64 L.Ed.2d 741, 753, 100 S.Ct. 2035, 2042].)

. The Supreme Court used the term "expectations" rather than "vested rights." Therefore, the owners’ reasonable expectations concerning development, and not just their vested rights to develop, deserve constitutional protectional in the takings context. The government cannot avoid payment of just compensation simply by withholding approval for a development project on land that the government wants to control. (But see Long Beach Equities, Inc. v. County of Ventura (1991) 231 Cal.App.3d 1016, 1038-40 [where the court relied on vested rights cases in finding that the owner had no right to just compensation, even though the owner had spent money to develop a specific plan and environmental impact report at the government’s request, and had paid for offsite infrastructure].)

. (Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1571.)

. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 820, 112 S.Ct. 2886, 2899].)

. (Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1571.)

. (Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1567 ["it would be inappropriate for the court to substitute its own judgment of value for that of the market" in most cases].)

. The amount of compensation remains a jury question, but the fact of decreased value, its cause, and the reasonableness of the owners’ expectations are mixed questions of law and fact for the trial court to determine, without jury. (See People v. Ricciardi (1943) 23 Cal.2d 390, 402; Marshall v. Department of Water & Power (1990) 219 Cal.App.3d 1124, 1139-40.)

. (Code Civ. Proc., §1263.320(a).)

. (People v. Ocean Shore Railroad (1948) 32 Cal.2d 406, 425 ["the highest and most profitable use for which the property is adaptable . . . in the reasonably near future is to be considered, not as the measure of value, but to the extent that the prospect of such use affects the market value of the land"].)

. (E.g., Contra Costa County Flood Control & Water Conservation District (1992) 7 Cal.App.4th 930 [likelihood that government would legally condition development upon dedication of a portion of property must be considered in determining the value of the property as a whole].)

. (Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1571.)

. The term "nexus" is used in Dolan v. City of Tigard, supra, 512 U.S. [129 L.Ed.2d. 304, 317-318, 114 S.Ct. 2309, 2317-18].

. (Nollan v. California Coastal Commission (1987) 483 U.S. 825, 841 [97 L.Ed.2d 677, 692, 107 S.Ct. 3141, 3150-51].)

. (Id., 483 U.S. at 834, fn. 3, [97 L.Ed.2d at 688, fn. 3, 107 S.Ct. 3141, 3147, fn. 3].)

. (Id., 483 U.S. at 841, [97 L.Ed.2d at 692, 107 S.Ct. 3150].)

. (But see Long Beach Equities, Inc. v. County of Ventura (1991) 231 Cal.App.3d 1016, 1029 ["government regulations are presumed to be motivated by and to reasonably serve their avowed purposes"]. However, in light of the United State’s Supreme Court’s contrary statements in Nollan (Ante, fns. 50-52), the validity of this language seems questionable.)

. (Nollan v. California Coastal Commission, supra, 483 U.S. at 841, [97 L.Ed.2d at 692, 107 S.Ct. 3141].)

. (Salton Bay Marina, Inc. v. Imperial Irrigation District (1985) 172 Cal.App.3d 914, 938.)

. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 819, fn. 12, 112 S.Ct. 2886, 2898, fn. 12].)

Proportionality.

The fourth factor–whether the regulatory action forces owners to bear burdens which the public as a whole should bear–again involves examination of the government’s ends and means, but from a different perspective.
This factor expresses, in different language, the "rough proportionality" requirement recently recognized by the Supreme Court in Dolan v. City of Tigard, in cases where landowners are forced to dedicate part of their land as a condition to development of the whole. The Court, in Dolan, shifted the burden to the government to prove that the required dedication was roughly proportional to the impact of the landowners’ proposed use. The Court did not define the term. However, it emphasized that no "precise mathematical calculation" was required.
Any concept described by the adjective "rough" inherently lacks precision. Nevertheless, the inquiry can be focused in several ways. First, it must be realized that regulatory action may get "out of proportion" in one, or a combination of, the following different senses:

(a) Instead of using its regulatory power to act as intermediary to create a mutually beneficial environment, the government sometimes instead acts as an advocate in pursuit of public gain at the expense of private property rights. When this occurs, the benefits received by, and the burdens imposed on, the landowners are disproportionate to those of the public at large, and the regulatory action is suspect.
(b) Instead of acting as an advocate for the public at large, the government acts as an advocate for a special interest group. When this occurs, the benefits received by, and the burdens imposed on, the affected landowners are disproportionate to those of others who will primarily benefit.
(c) Less harsh regulatory options may be available which could accomplish the same desired result.
Second, although no precise mathematical calculations are required and no single formula is adequate to handle each variation on the theme of proportionality described above, quantitative evidence on the question is helpful and should be considered. Where quantitative evidence shows that the government is creating an environment that primarily benefits the government or elements of the general public at the expense of private landowners, rather than a mutually beneficial environment for all, the government’s regulatory action is suspect.

7.THE NEED TO ALLOCATE THE BURDEN OF PROOF.

The courts must then analyze the evidence received on the more sharply focused factors. This analysis has been described as "a classic exercise of judicial balancing of competing values." However, although the term "balancing" adequately describes the goal of the analysis (i.e. striking a constitutional balance between the governmental or public interests served by regulatory action and private property rights), there are better ways to describe how that goal should be reached. Balancing implies that the more sharply focused factors described above must be assigned different weights in different situations, depending on the facts. However, either landowners have reasonable expectations frustrated by regulatory action, or they do not. Either the government has acted for proper purposes with proper means, or it has not. The trial court must simply determine whether these ultimate facts exist. It must factfind, not balance.

Therefore, allocating the burden of proof is a more direct approach than balancing. As discussed above, the Supreme Court, in Dolan, has already used a variation of this method, holding that, in dedication cases, the burden of proof on rough proportionality shifts to the government. The Court distinguished generally applicable, legislative regulatory action from property-specific, adjudicative regulatory action like that found in dedication cases. Legislative regulatory action (regulatory action that applies generally to a class of similarly situated properties, such as a general zoning ordinance) is presumed constitutional because of the government’s broad power to regulate the playing field and create a mutually beneficial environment for all. However, adjudicative action (regulatory action that affects specific properties, such as action involving variances, use permits, subdivision maps and the like) carries a heightened risk of governmental abuse because it regulates particular property owners rather than the playing field as a whole. In such cases, the burden of proof should shift to the government to justify its conduct.

This principle should apply to all partial regulatory takings, with an allocation of the burden of proof along the following lines. In cases involving legislative regulatory action, the government’s conduct is presumptively valid. The burden remains with the landowners to prove by a preponderance of the evidence, first, that they have suffered a decrease in market value due to regulatory action and that their expectations of realizing that value were reasonable; and, second, any of the following: (a) that there is no nexus between the regulatory action and the government’s stated purposes; (b) that the government’s actual purpose was to evade the just compensation requirement; or (c) that the regulatory action was roughly disproportional. If the landowners meet this burden, they have established a partial regulatory taking and are entitled to just compensation.
In cases involving adjudicative regulatory action, the landowners must still, as a threshold matter, establish by a preponderance of the evidence that they have suffered a decrease in market value due to regulatory action and that their expectations of realizing that value were reasonable. However, the burden should then shift to the government to establish all of the following by a preponderance of the evidence: (a) that there is a nexus between the regulatory action and the government’s stated purposes; (b) that the government’s stated purposes do not mask an unstated purpose to evade the just compensation requirement; and (c) that the action is roughly proportional. If the landowners meet their burden, but the government does not, the landowners have established a partial regulatory taking and are entitled to just compensation.

In hybrid situations, involving action having both legislative or adjudicative characteristics, the burden of proof should be allocated according to substance not form. The government should not be allowed to evade payment of just compensation by disguising adjudicative action in legislative form.
Shifting the burden of proof should not prevent the owners or the government from meeting it. Furthermore, whether a given partial regulatory taking is compensable remains a threshold mixed question of law and fact for the trial court to decide, not the jury. The trial court does not have to engage in any balancing. The trial court weighs the evidence, it does not balance competing values. The desired constitutional balance between the government’s regulatory power and private property rights is built into the process, because the more sharply focused factors target the key points, and the burden of proof shifts when the threat to the constitutional balance is greatest.

8.DENOMINATOR CASES–CATEGORICAL TREATMENT FOR CERTAIN PARTIAL REGULATORY TAKINGS?
As discussed above, denominator cases are partial regulatory takings that arise when the numerator of the deprivation fraction equals 100%, but the denominator does not; i.e., when regulatory action denies all of the economically viable use of part of the interest in a single legal parcel of land. Therefore, as a general rule, the more sharply focused factors discussed above must also be analyzed in determining whether a given denominator case requires just compensation.
However, is analysis of these factors necessary in every denominator case? Should some denominator cases qualify for categorical treatment like that given to physical and total regulatory takings (categorical and automatic payment of just compensation without analysis of the more sharply focused factors)? The question has not been decided by the Supreme Court, which stated in Lucas v. South Carolina Coastal Council that:

"Regrettably, the rhetorical force of our ‘deprivation of all economically feasible use’ rule is greater than its precision, since the rule does not make clear the ‘property interest’ against which the loss of value is to be measured. When, for example, a regulation requires a developer to leave 90% of a rural tract in its natural state, it is unclear whether we would analyze the situation as one in which the owner has been deprived of all economically beneficial use of the burdened portion of the tract, or as one in which the owner has suffered a mere diminution in value of the tract as a whole . . . . Unsurprisingly, this uncertainty regarding the composition of the denominator in our ‘deprivation’ fraction has produced inconsistent pronouncements by the Court."
The following examples and comments illustrate the problems and principles involved.
Example 1: In 1980, Tenant leases property for the sole purpose of operating a restaurant. Tenant has no interest in the property other than the leasehold. In 1990, the government prohibits restaurant use but not other uses.
Comment: In this example, the government has denied all economically viable use of a leasehold interest, but not the entire fee. As stated in Lucas, whether categorical treatment is required in a denominator case may depend on:
"how the owner’s reasonable expectations have been shaped by the State’s law of property–i.e., whether and to what degree the State’s law has accorded legal recognition and protection to the particular interest in land with respect to which the takings claimant alleges a diminution in (or elimination of) value."

Under this test, categorical treatment is appropriate for the facts set forth in the example. Leaseholds are legally recognized and protected by state law as property interests, distinct and separate from the fee. They may be conveyed or taken in eminent domain as separate, distinct interests. Furthermore, tenants who rent property for a specific use may suffer greater economic harm than similarly situated fee owners, because the fee owners can simply change to other equally viable uses while the tenants have lost all viable use of their leasehold interest.

. (Dolan v. City of Tigard, supra, 512 U.S. [129 L.Ed.2d. 304, 114 S.Ct. 2309].)

. (Id., 512 U.S. [129 L.Ed.2d at 320, fn. 8, 114 S.Ct. at 2320, fn. 8].)

. (Id., 512 U.S. [129 L.Ed.2d at 320, 114 S.Ct. at 2319].)

. (See Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1571 ["(A)re there direct compensating benefits accruing to the property, and others similarly situated, flowing from the regulatory environment? Or are benefits, if any, general and widely shared through the community and the society, while the costs are focused on a few?"].) Analogies can be drawn to assessment district cases, where the assessment district benefits the public at the expense of a few. (E.g. Dawson v. Town of Los Altos Hills (1976) 16 Cal.3d 676, 685 [assessment must be "proportional to the benefits to be bestowed on the properties to be assessed"].)

. (See Dolan v. City of Tigard, supra, 512 U.S. [129 L.Ed.2d. 304, 321, 114 S.Ct. 2309, 2320] [City failed to explain why a public green way, as opposed to a private one, was required to further the stated interest]; Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1571 ["In short, has the Government acted in a responsible way, limiting the constraints on property ownership to those necessary to achieve the public purpose. . . ."].)

. (Ante, fn. 61.)

. (Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1570.)

. (Dolan v. City of Tigard, supra, 512 U.S. [129 L.Ed.2d. 304, 320, fn. 8, 114 S.Ct. 2309, 2320, fn. 8]. Generally, legislative regulatory action involves "the adoption of a ‘broad, generally applicable rule of conduct on the basis of general public policy.’" Adjudicative regulatory action affects "an individual" and is "determined by facts peculiar to the individual case." (Horn v. County of Ventura (1979) 24 Cal.3d 605, 613.) The distinction is not always clear, however, and hybrid situations occur. (E.g., Consaul v. City of San Diego (1992) 6 Cal.App.4th 1781, 1792 [hybrid rezoning situation].)

. The amount of the just compensation should be equal to the decrease in value due to the regulatory conduct, except that, in cases involving disproportionality, further adjustments may be necessary in order to make the compensation just, based on the extent of the disproportionality.

. (Ante, fn. 45.)

. The United States Supreme Court has stated in dicta that the denominator can never be larger than a single legal parcel of land, and that courts cannot treat all of the legal parcels owned in the area by the affected landowners as the denominator for takings purposes. (See Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 813, fn. 7, 112 S.Ct. 2886, 2894, fn. 7].)

. (Id., 505 U.S. [120 L.Ed.2d 798, 813, fn. 7, 112 S.Ct. 2886, 2894, fn. 7].)

. (Ibid.)

Example 2: Mr. A buys only the subsurface mineral rights under Blackacre, which has known coal deposits. Mrs. B buys the entire fee in the adjacent Whiteacre (which also has known coal deposits). Several years later, government regulations prohibit extraction of minerals from beneath all of the properties in the area, including Blackacre and Whiteacre, in order to preserve what remains of the natural character of the landscape, and not because extraction would create a common law nuisance.
Comment: Mineral rights, like leasehold interests, are also legally recognized and protected by state law as property interests distinct and separate from the fee. In Example 2, Mr. A has been denied all economically viable use of his entire interest in a part of Blackacre, while Mrs. B has been denied use of only a part of her interest in Whiteacre. However, the nature of the use denied, and the government’s regulatory purpose, is the same for both affected landowners. Mr. A should receive categorical treatment for the same reasons that the Tenant in Example No. 1 received it. He is left owning a property interest which state law recognizes as distinct, but he cannot use. Mrs. B has been deprived of all economically viable use of her mineral rights. However, it might be argued that she has suffered a "mere diminution in value" of Whiteacre as a whole, because she still owns and can use the surface fee. The better view is that there is no reason to treat her loss of a separate and distinct property interest recognized by state law differently than Mr. A’s. She should, therefore, also receive categorical treatment.

Example 3: A single legal parcel is zoned for commercial use. The government rezones an undeveloped portion of the parcel to open space. The owners claim that the rezoned portion has been taken.
Comment: State law does not, however, recognize any separate, distinct interest in pieces of a single, legally undivided parcel. Categorical treatment is not, therefore, appropriate. However, compensable partial regulatory takings may be found in cases similar to the example, without categorical treatment, after analysis of the more sharply focused factors discussed above. If the owners’ reasonable expectations were frustrated by the downzoning and they suffered damages as a result (because realistically a knowledgeable buyer would take into account the property’s potential for subdivision and separate development), and if the government’s purposes were improper or its means were disproportionate, just compensation may be required.
Example 4: Oil Company holds the mineral rights beneath a residential development but has never exercised them. The state passes a law providing that the rights will lapse if not used for 20 years, unless the owners timely file a statement of claim. Oil Company does not timely use its rights or file a statement of claim, but still contends its rights have been taken.

Comment: Categorical treatment may depend, however, on the type of regulatory action involved. The government may attach reasonable conditions to the permanent retention of property rights without paying just compensation when those conditions are violated. In Texaco, Inc. v. Short, the United States Supreme Court upheld a law similar to the example, based on the public interest in preventing dormant, absentee ownership of land interests. Although categorical treatment precludes consideration of the public interests furthered by regulatory action, there is reason to draw a distinction between (a) cases where regulatory action totally denies economically viable use of a recognized property interest, and (b) cases where landowners fail to fulfill reasonable conditions imposed by the government to the recognition of a property interest. Where conditions to recognition are left unfulfilled, state law no longer "accords legal recognition and protection" to the property interest, depriving the interest of the basis for categorical treatment.
Example 5: Community activists want to preserve a theater for its historic and architectural value. It is anticipated that the government will support the activists. In order to frustrate these plans and create a pretext for a regulatory taking claim if the building is preserved, developers buy the property, taking title by way of a conveyance of a fee simple subject to a power of termination if the developers, or their successors, use the property as a theater. The government restricts use to theater use. The developers claim this is a compensable taking.
Comment: Categorical treatment should also depend on whether evidence exists of collusion to create a pretext for a claim of just compensation. In this example, the interest of the developers is a fee interest (fee simple subject to a power of termination) recognized and protected by state law, but not a fee simple absolute interest. The regulatory action has potentially denied the developers all economically viable use of their partial interest. If the property is used as a theater (the sole use permitted by the government), the prior owner might reclaim title by exercising the power of termination. However, the developers acted deliberately to construct a colorable basis for a takings claim. There is no reason to give categorical treatment (or award just compensation) where such collusion exists. The decrease in value is not due to the regulatory action, and the developers had no reasonable expectation of realizing the lost value.
9.CONCLUSION.
Private property rights, as protected by the Takings Clause of the Fifth Amendment, are "as much a part of the Bill of Rights as the First Amendment and the Fourteenth Amendment, (and) should (not) be relegated to the status of a poor relation." The courts should vigorously and immediately protect those landowners in partial regulatory taking situations who deserve just compensation.

. (See 6 Miller & Starr, California Real Estate (2d.ed., 1989) §19.15. But see Keystone Bituminous Coal Association v. DeBenedictis (1987) 480 U.S. 470 [94 L.Ed.2d 472, 107 S.Ct. 1232] [just compensation refused for the taking of a "support estate," legally recognized as separate and distinct from both the surface fee and the subsurface mineral rights under Pennsylvania law], criticized in Lucas v. South Carolina Coastal Council, supra, 505 U.S. ___ [120 L.Ed.2d 798, 813, fn. 7, 112 S.Ct. 2886, 2894, fn. 7].)

. This example is derived from Twain Harte Associates, Ltd. v. County of Tuolumne (1990) 217 Cal.App.3d 71, where the court awarded just compensation.

. (Ibid., and cases cited therein). There is some authority for the proposition that regulatory action which downzones a single legal parcel as a whole should be distinguished from regulatory action which downzones pieces of a parcel differently from the whole. (E.g. Ramona Convent of the Holy Names v. City of Alhambra, supra, 21 Cal.App.4th 10, 20-22 [where just compensation was denied based, in part, on this distinction].) However, this is a distinction without a difference. The compensability of the partial regulatory taking should depend on an analysis of the more sharply focused factors, rather than the technical form of the government’s regulatory action.

. (Texaco, Inc. v. Short (1982) 454 U.S. 516 [70 L.Ed.2d 738, 102 S.Ct. 781].)

. (Dolan v. City of Tigard, supra, 512 U.S. [129 L.Ed.2d. 304, 321, 114 S.Ct. 2309, 2320].)

. Article 1, §19 of the California Constitution goes further, requiring just compensation when private property is taken "or damaged" for public use. The state Constitution, therefore, "protects a somewhat broader range of property values" than the federal. However, it remains to be seen if this broader protection makes a practical difference in partial regulatory takings cases. (See Hensler v. City of Glendale (1994) 8 Cal.4th 1, 9, fn. 4.)
. (Lucas v. South Carolina Coastal Council (1992) 505 U.S. [120 L.Ed.2d 798, 812, 112 S.Ct. 2886, 2893] [physical seizure]; Yee v. Escondido (1992) 503 U.S. [118 L.Ed.2d 153, 162, 112 S.Ct. 1522, 1526] [authorization for physical seizure].)
. (Id., 505 U.S. [120 L.Ed.2d 798, 812, 112 S.Ct. 2886, 2892-93].)
. In Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 112 S.Ct. 2886], the United States Supreme Court proceeded on the assumption that regulatory action denied all economically viable use, even though the construction of non-habitable structures like walkways and decks was still permitted (Id., 505 U.S. [120 L.Ed.2d 798, 808, fn. 2, 112 S.Ct. 2886, 2889, fn. 2]); and even though the land could be sold as "buffer" and could still be used for camping, fishing, and the like (Id., 505 U.S. [120 L.Ed.2d 798, 844, fn. 3, 112 S.Ct. 2886, 2919, fn. 3] [dissenting opinion of Justice Stevens].).
. (Florida Rock Industries, Inc. v. U.S. (Fed. Cir. 1994) 18 F.3d 1560, 1571.)
. The "owner’s opportunity to recoup its investment or better, subject to the regulation, cannot be ignored" in regulatory takings analysis. (Florida Rock Industries, Inc. v. U.S. (Fed.Cir. 1986) 791 F.2d 893, 905, cert.denied 479 U.S. 1053 [93 L.Ed.2d 978, 107 S.Ct. 926].)
. For example, the term is used in Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 813, fn. 7, 112 S.Ct. 2886, 2894, fn. 7].
. (Moroney v. Mayor and Council (N.J.App.Div. 1993) 633 A.2d 1045, 1050.)
. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 812, 112 S.Ct. 2886, 2893].)
. (Id., 505 U.S. [120 L.Ed.2d 798, 815 et seq., 112 S.Ct. 2886, 2896 et seq.].)
. (Id., 505 U.S. [120 L.Ed.2d 798, 813, fn. 7, 112 S.Ct. 2886, 2894, fn. 7].)
. (Pennsylvania Coal Co. v. Mahon (1922) 260 U.S. 393, 415 [67 L.Ed. 322, 326, 43 S.Ct. 158, 160].)
. For example, in City of Los Angeles v. Decker (1977) 18 Cal.3d 860, 870 et seq., the City, through its attorney, misled the jury regarding the existence of a need for airport parking and the suitability of Decker’s property to meet that need, in order to persuade the jury to award Decker less compensation. The California Supreme Court ordered a new trial based on the misconduct, holding that the government in eminent domain cases acts in "a quasi-judicial capacity and should be encouraged to exercise (its) tremendous power fairly, equitably and with a deep understanding of the theory and practice of just compensation." (Id., at p. 871.) This high standard is not always met. In Healing v. California Coastal Commission (1994) 22 Cal.App.4th 1158, the court criticized the Coastal Commission’s regulatory conduct in the following terms:
"It is in the nature of our work that we see many virtuoso performances in the theatres of bureaucracy but we confess a sort of perverse admiration for the Commission’s role in this case. It has soared beyond both the ridiculous and the sublime . . . ." (Id., at p. 1168.)
Furthermore, California statutes recognize that the government, at times, needs deterrence in the takings context. (E.g., Gov. Code, §7267.2, §7267.5 and §7267.6 [concerning unreasonable pre-condemnation conduct and delay by the government].)
. This danger is especially apparent in the redevelopment context, because the government acts, in substance if not form, as the agent for private developers in acquiring property for redevelopment.
. (Pennsylvania Coal Co. v. Mahon, supra, 260 U.S. 393, 413 [67 L.Ed. 322, 325, 43 S.Ct. 158, 159].)
. (Id., 260 U.S. 393, 415 [67 L.Ed. 322, 326, 43 S.Ct. 158, 160].)
. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d. 798, 812, 112 S.Ct. 2886, 2893].)
. The first three factors are found in Penn Central Transportation Company v. City of New York (1978) 438 U.S. 104, 124 [57 L.Ed.2d 631, 648, 98 S.Ct. 2646, 2659]. The last is found in Yee v. Escondido, supra, 503 U.S. [118 L.Ed.2d 153, 162, 112 S.Ct. 1522, 1526].
. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 812-15, 112 S.Ct. 2886, 2892-95].)
. (Dolan v. City of Tigard (1994) 512 U.S. [129 L.Ed.2d 304, 114 S.Ct. 2309].)
. (Penn Central Transportation Co. v. City of New York, supra, 438 U.S. 104, 131 [57 L.Ed.2d. 631, 653, 98 S.Ct. 2646, 2662-63].)
. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 815, fn. 8, 112 S.Ct. 2886, 2895, fn. 8].)
. This reluctance often manifests itself in two ways. First, without detailed analysis of the four factors, the courts conclude that the regulatory action under review caused a "mere diminution" in value which is not compensable under the Supreme Court’s general comment (Ante, text accompanying fn. 21) that diminution in value, "standing alone," cannot establish a taking. Often the sense and substance of the Supreme Court’s comment is altered by omitting the phrase "standing alone." (E.g., Long Beach Equities, Inc. v. County of Ventura (1991) 231 Cal.App.3d 1016, 1036.) Second, the case is held to be unripe for adjudication on the merits, even though the government has clearly indicated that development of a certain type will not be permitted. (But see Ramona Convent of the Holy Names v. City of Alhambra (1993) 21 Cal.App.4th 10, 19-20 [where the case was found ripe for adjudication, though the Court ultimately ruled that the Convent had suffered only an uncompensable diminution in value].)
. For example, the property owner, in Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, needed two hearings before the Court of Claims, two appeals to the Federal Circuit and one denial of certiorari by the United States Supreme Court before the possibility of a partial regulatory takings cause of action became apparent, and the case was sent back down for further factfinding.
. (Id., at p. 1571.)
. (Id., at p. 1568.)
. For example, Los Angeles County’s "Open Space" Zoning classification permits (among other things) beehives, campgrounds, farming and grazing without permit, and golf courses, cemeteries and hotels with permit. (L.A. County Plan. & Zon. Code, §22.40.40 et seq.) Depending on what uses are actually permitted when such classifications are applied, regulatory takings issues may arise.
. (E.g., Klopping v. City of Whittier (1972) 8 Cal.3d 39.)
. (E.g., First English Evangelical Lutheran Church of Glendale v. County of Los Angeles (1987) 482 U.S. 304 [96 L.Ed.2d 250, 107 S.Ct. 2378]; See Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1570, fn. 25 [where the court noted that temporary regulatory takings have similarities to partial regulatory takings].)
. (E.g., Dolan v. City of Tigard, supra, 512 U.S. [129 L.Ed.2d. 304, 114 S.Ct. 2309].)
. The United States Supreme Court has recognized that such a heightened risk of abuse exists for total regulatory takings because of their severity. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 814, 112 S.Ct. 2886, 2894-95].)
. Even the smallest physical takings are compensable. (Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1569.) Furthermore, if severity is the deciding factor, courts will have to determine a dividing line between severe impacts that require payment of just compensation and less severe impacts that don’t. The Constitution does not draw a bright line between the two, however.
. For example, Code of Civil Procedure §1263.321 requires a "just and equitable" method of determining just compensation for nonprofit, special use property for which there is "no relevant, comparable market."
. Otherwise, owners of real estate would be paid less just compensation during "boom" real estate markets, and courts would have to determine the relevant line of demarcation separating "real" value from mere "appreciation." That has never been the law.
. (E.g., City of San Diego v. Neumann (1993) 6 Cal.4th 738, 756 [just compensation may "reflect the development potential" of property].)
. This may be the limited thrust of the California Supreme Court’s holding in City of Los Angeles v. Ricards (1973) 10 Cal.3d 385, where the City cut off access to private property for two years. The Court held that the owner had suffered no damages, where she testified that she would not have used or developed the property during the delay, because she was holding it for investment purposes. (But see, Jones v. People ex rel. Dept. of Transportation (1978) 22 Cal.3d 144, 154-55 [distinguishing Ricards and finding a right to just compensation where evidence of damage existed].)
. (E.g., Ramona Convent of the Holy Names v. City of Alhambra, supra, 21 Cal.App.4th 10 [Convent school’s need to sell portion of its land in order to finance earthquake repairs was not an appropriate consideration in determining whether compensable taking existed].)
. (San Diego County Water Authority v. Mireiter (1993) 18 Cal.App.4th 1808, 1817, fn. 38.)
. "Reasonable" investment-backed expectations is sometimes used in place of "distinct" investment-backed expectations. (E.g. Pruneyard Shopping Center v. Robins (1980) 447 U.S. 74, 83 [64 L.Ed.2d 741, 753, 100 S.Ct. 2035, 2042].)
. The Supreme Court used the term "expectations" rather than "vested rights." Therefore, the owners’ reasonable expectations concerning development, and not just their vested rights to develop, deserve constitutional protectional in the takings context. The government cannot avoid payment of just compensation simply by withholding approval for a development project on land that the government wants to control. (But see Long Beach Equities, Inc. v. County of Ventura (1991) 231 Cal.App.3d 1016, 1038-40 [where the court relied on vested rights cases in finding that the owner had no right to just compensation, even though the owner had spent money to develop a specific plan and environmental impact report at the government’s request, and had paid for offsite infrastructure].)
. (Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1571.)
. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 820, 112 S.Ct. 2886, 2899].)
. (Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1571.)
. (Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1567 ["it would be inappropriate for the court to substitute its own judgment of value for that of the market" in most cases].)
. The amount of compensation remains a jury question, but the fact of decreased value, its cause, and the reasonableness of the owners’ expectations are mixed questions of law and fact for the trial court to determine, without jury. (See People v. Ricciardi (1943) 23 Cal.2d 390, 402; Marshall v. Department of Water & Power (1990) 219 Cal.App.3d 1124, 1139-40.)
. (Code Civ. Proc., §1263.320(a).)
. (People v. Ocean Shore Railroad (1948) 32 Cal.2d 406, 425 ["the highest and most profitable use for which the property is adaptable . . . in the reasonably near future is to be considered, not as the measure of value, but to the extent that the prospect of such use affects the market value of the land"].)
. (E.g., Contra Costa County Flood Control & Water Conservation District (1992) 7 Cal.App.4th 930 [likelihood that government would legally condition development upon dedication of a portion of property must be considered in determining the value of the property as a whole].)
. (Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1571.)
. The term "nexus" is used in Dolan v. City of Tigard, supra, 512 U.S. [129 L.Ed.2d. 304, 317-318, 114 S.Ct. 2309, 2317-18].
. (Nollan v. California Coastal Commission (1987) 483 U.S. 825, 841 [97 L.Ed.2d 677, 692, 107 S.Ct. 3141, 3150-51].)
. (Id., 483 U.S. at 834, fn. 3, [97 L.Ed.2d at 688, fn. 3, 107 S.Ct. 3141, 3147, fn. 3].)
. (Id., 483 U.S. at 841, [97 L.Ed.2d at 692, 107 S.Ct. 3150].)
. (But see Long Beach Equities, Inc. v. County of Ventura (1991) 231 Cal.App.3d 1016, 1029 ["government regulations are presumed to be motivated by and to reasonably serve their avowed purposes"]. However, in light of the United State’s Supreme Court’s contrary statements in Nollan (Ante, fns. 50-52), the validity of this language seems questionable.)
. (Nollan v. California Coastal Commission, supra, 483 U.S. at 841, [97 L.Ed.2d at 692, 107 S.Ct. 3141].)
. (Salton Bay Marina, Inc. v. Imperial Irrigation District (1985) 172 Cal.App.3d 914, 938.)
. (Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 819, fn. 12, 112 S.Ct. 2886, 2898, fn. 12].)
. (Dolan v. City of Tigard, supra, 512 U.S. [129 L.Ed.2d. 304, 114 S.Ct. 2309].)
. (Id., 512 U.S. [129 L.Ed.2d at 320, fn. 8, 114 S.Ct. at 2320, fn. 8].)
. (Id., 512 U.S. [129 L.Ed.2d at 320, 114 S.Ct. at 2319].)
. (See Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1571 ["(A)re there direct compensating benefits accruing to the property, and others similarly situated, flowing from the regulatory environment? Or are benefits, if any, general and widely shared through the community and the society, while the costs are focused on a few?"].) Analogies can be drawn to assessment district cases, where the assessment district benefits the public at the expense of a few. (E.g. Dawson v. Town of Los Altos Hills (1976) 16 Cal.3d 676, 685 [assessment must be "proportional to the benefits to be bestowed on the properties to be assessed"].)
. (See Dolan v. City of Tigard, supra, 512 U.S. [129 L.Ed.2d. 304, 321, 114 S.Ct. 2309, 2320] [City failed to explain why a public green way, as opposed to a private one, was required to further the stated interest]; Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1571 ["In short, has the Government acted in a responsible way, limiting the constraints on property ownership to those necessary to achieve the public purpose. . . ."].)
. (Ante, fn. 61.)
. (Florida Rock Industries, Inc. v. U.S., supra, 18 F.3d 1560, 1570.)
. (Dolan v. City of Tigard, supra, 512 U.S. [129 L.Ed.2d. 304, 320, fn. 8, 114 S.Ct. 2309, 2320, fn. 8]. Generally, legislative regulatory action involves "the adoption of a ‘broad, generally applicable rule of conduct on the basis of general public policy.’" Adjudicative regulatory action affects "an individual" and is "determined by facts peculiar to the individual case." (Horn v. County of Ventura (1979) 24 Cal.3d 605, 613.) The distinction is not always clear, however, and hybrid situations occur. (E.g., Consaul v. City of San Diego (1992) 6 Cal.App.4th 1781, 1792 [hybrid rezoning situation].)
. The amount of the just compensation should be equal to the decrease in value due to the regulatory conduct, except that, in cases involving disproportionality, further adjustments may be necessary in order to make the compensation just, based on the extent of the disproportionality.
. (Ante, fn. 45.)
. The United States Supreme Court has stated in dicta that the denominator can never be larger than a single legal parcel of land, and that courts cannot treat all of the legal parcels owned in the area by the affected landowners as the denominator for takings purposes. (See Lucas v. South Carolina Coastal Council, supra, 505 U.S. [120 L.Ed.2d 798, 813, fn. 7, 112 S.Ct. 2886, 2894, fn. 7].)
. (Id., 505 U.S. [120 L.Ed.2d 798, 813, fn. 7, 112 S.Ct. 2886, 2894, fn. 7].)
. (Ibid.)
. (See 6 Miller & Starr, California Real Estate (2d.ed., 1989) §19.15. But see Keystone Bituminous Coal Association v. DeBenedictis (1987) 480 U.S. 470 [94 L.Ed.2d 472, 107 S.Ct. 1232] [just compensation refused for the taking of a "support estate," legally recognized as separate and distinct from both the surface fee and the subsurface mineral rights under Pennsylvania law], criticized in Lucas v. South Carolina Coastal Council, supra, 505 U.S. ___ [120 L.Ed.2d 798, 813, fn. 7, 112 S.Ct. 2886, 2894, fn. 7].)
. This example is derived from Twain Harte Associates, Ltd. v. County of Tuolumne (1990) 217 Cal.App.3d 71, where the court awarded just compensation.
. (Ibid., and cases cited therein). There is some authority for the proposition that regulatory action which downzones a single legal parcel as a whole should be distinguished from regulatory action which downzones pieces of a parcel differently from the whole. (E.g. Ramona Convent of the Holy Names v. City of Alhambra, supra, 21 Cal.App.4th 10, 20-22 [where just compensation was denied based, in part, on this distinction].) However, this is a distinction without a difference. The compensability of the partial regulatory taking should depend on an analysis of the more sharply focused factors, rather than the technical form of the government’s regulatory action.
. (Texaco, Inc. v. Short (1982) 454 U.S. 516 [70 L.Ed.2d 738, 102 S.Ct. 781].)
. (Dolan v. City of Tigard, supra, 512 U.S. [129 L.Ed.2d. 304, 321, 114 S.Ct. 2309, 2320].)

Posted: 08/28/13 Joseph Dzida

Categories: CRD Attorneys