California Land Use Blog

by Matthew Hinks

The recent spate of court cases dealing with local regulation of medical marijuana dispensaries ("MMDs") offers an interesting illustration of the interplay between federal, state and local laws that regulate the same subject matter, and the impact that dynamic has upon local land use regulation. Each of the three levels of government regulate the use and sale of marijuana, albeit for different purposes and in vastly different ways. Federal law continues to classify marijuana as a Schedule I controlled substance under the Controlled Substance Act. With the passage by voter initiative of the Compassionate Use Act of 1996 ("CUA") and the legislatively-adopted Medical Marijuana Program of 2003 ("MMP"), the State of California chose to remove certain state law obstacles from the ability of qualified patients to obtain and use marijuana for legitimate medical purposes. On the local level, many municipalities have taken steps to either outright ban MMDs or otherwise heavily regulate them through their zoning laws.

By Matthew Hinks

The California legislature has declared the availability of housing for every Californian to be a matter of "vital statewide importance." Thus, the legislature has charged local governments with facilitating the provision of housing for all economic segments of the community through the implementation of "housing elements" as part of the community's general plan. The components of those housing elements, including an assessment of housing needs for all income levels, the identification of adequate housing sites, and a program that assists in the development of such housing to meet the needs of low-income households.

San Jose's Inclusionary Housing Ordinance

To implement the state's inclusionary housing policy, the City of San Jose (the "City") passed in 2010 an Inclusionary Housing Ordinance ("IHO"). The IHO requires multi-unit residential developments including at least 20 units to set aside 15 percent of the units for purchase at a below-market rate to households earning no more than 110 percent of the area median income. Alternatively, the developer could comply with the IHO by paying an in-lieu fee not to exceed the difference between the price of a market rate and affordable housing unit or dedicating land.

By Matthew Hinks

Chief Justice John Roberts recently observed during oral argument on the Supreme Court's latest foray into the field of regulatory takings that the government does not lose a Penn Central case very often. A new opinion from the California Court of Appeal in Lockaway Storage v. County of Alameda represents one of those rare instances. But more than offering just an isolated example of a property owner victory in such cases, the court's opinion in the Lockaway case delivers a significant blow to a major obstacle that has stood in the way for developers alleging damages caused by project delays -- the California Supreme Court's seminal decision in Landgate v. California Coastal Commission.

Facts of Complaint

In May 2000, Lockaway Storage ("Lockaway") purchased an 8.45-acre parcel of land in an unincorporated area of Alameda County. The property was zoned for agricultural uses with an alternative conditional use for "open storage of recreational vehicles and boats". Prior to Lockaway's purchase of the property, the County had issued a Conditional Use Permit ("CUP") authorizing an rv storage facility, which would expire if it was not implemented by September 22, 2002.

By Matthew Hinks

Statues of limitations issues frequently loom large in litigation under the California Environmental Quality Act ("CEQA") and can confound litigants and their counsel. Depending on the challenge being made and the context in which it is made, claims brought under CEQA may be subject to a range of limitations periods -- from 30 to 180 days. Moreover, the date on which a CEQA claim accrues is not always clear. For example, an agency making a CEQA decision may file a Notice of Determination, which generally triggers the shorter CEQA limitations periods, but parties with an interest in that same decision may not always get notice of the filing. For these reasons, among others, calculating the correct statute of limitations period applicable to a CEQA claim can be risky business. A new opinion from the California court of appeal, Alliance for the Protection of the Auburn Community Environment v. County of Placer, raises the stakes even higher and holds that a party may not obtain relief from a late filing by reason of mistake, inadvertence, surprise, or excusable neglect.

By Scott Castro

On March 19, 2013, U.S. Supreme Court declined to hear an appeal of the ruling in Karuk Tribe of California v. U.S. Forest Service, a Ninth Circuit en banc decision broadly construing the scope of the Endangered Species Act (ESA) consultation requirements.

By denying the petition for certiorari brought by recreational miners and other interests, the Supreme Court lets stand the Ninth Circuit's ruling, which broadens the scope of when consultation is required under Section 7 of the ESA to include instances where an agency makes a decision not to regulate an activity.

For the mining industry and other operations on U.S. Forest Service lands, the Supreme Court's action makes clear that low-impact mining operations that could previously operate pursuant to notices to the Forest Service now are confronted with the likely need to undergo lengthy and expensive consultation under the ESA. For the regulated community in general, the implications are broader, because reach of the ESA's consultation requirement is effectively expanded to apply to instances of agency "inaction."

By Scott Castro

In a decision published on February 8, 2013, the Second Appellate District ruled in favor of the JMBM client Troesh Materials, LLC in a challenge brought pursuant to the California Environmental Quality Act ("CEQA") against the County of Santa Barbara's approval of Troesh's Diamond Rock Sand and Gravel Mine and Processing Facility (the "Diamond Rock Mine"). The decision, Save Cuyama Valley v. County of Santa Barbara (Case No. B233318), ruled on several important grounds under CEQA, and is further notable because it upholds the County's approval of an in-stream mining project within the bed of the Cuyama River. Troesh Materials, LLC was represented before the trial court and court of appeal by JMBM partner Scott N. Castro. The underlying County approval effort for Troesh's Diamond Rock Mine was led by JMBM partner Kerry Shapiro, leader of the Firm's land use group in San Francisco and co-chair of the Firm's Building Materials Group.

by Kerry Shapiro

As reported earlier this week in this blog, the recent Ninth Circuit Court of Appeals decision in Center for Biological Diversity v. Salazar allowed a uranium mine on federal lands in Arizona to re-open after being idled for seventeen years absent any new federal approval or supplemental environmental review. This decision is notable on its own, but carries added significance in California, where it now highlights a potential conflict between federal and state law regarding idle mines and the resumption of mining operations at such mines.

By Scott Castro

On February 4, 2013, a Ninth Circuit Court of Appeals panel issued a ruling in Center for Biological Diversity v. Salazar holding that a mine idled for seventeen years could restart operations without obtaining a new approval from the Bureau of Land Management (BLM) or conducting additional environmental review. The Ninth Circuit's ruling is notable because it clarifies that:

(1) The need for new ancillary permits for an already-approved federal project -- even after being idle for seventeen years -- does not create a "major Federal action" requiring supplemental environmental analysis under the National Environmental Policy Act (NEPA);

(2) A mine may be idle for extended periods of time if the mine is maintained in accordance with an interim management plan set forth in a plan of operations; and

(3) There is no provision under the BLM's surface management regulations (43 CFR subpart 3809) requiring a new plan of operations to restart mining operations following a period of idleness.

On February 5, 2013, Jeffer Mangels Butler & Mitchell (JMBM) filed a lawsuit in Los Angeles Superior Court (Case # BS141623) against the City of Los Angeles on behalf of Tower Lane Properties LLP whose beneficial owner is Saudi prince Abdul-Aziz ibn Abdul-Aziz al Saud, the current Deputy Foreign Minister of Saudi Arabia. The lawsuit seeks a writ of mandate to compel the city to issue the building permits and damages in the amount of $25 million caused by the city's allegedly illegal and discriminatory conduct.

By Matthew Hinks

Evidence of just compensation to be awarded in an eminent domain action is all but invariably put on through expert opinion. In a bit of good news for property owners facing eminent domain proceedings, the California Court of Appeal has issued a new opinion offering a relaxed view of the admissibility of expert opinions relating to comparable sales.

By Matthew Hinks

For those of us involved or merely interested in the seemingly endless spate of sign-related litigation, the Court of Appeal's opinion in Summit Media LLC v. City of Los Angeles has been long anticipated. The Summit case was unlike many of the sign cases winding their way through California's state and federal courts, which have largely involved constitutional challenges to various sign-related laws and actions or enforcement actions by local municipalities against non-complying signs. Summit involved litigation between sign companies -- including two of the largest sign companies in the country. The court of appeal's opinion in the Summit case, which holds that a city may not enter into a settlement agreement allowing for digital billboards when they are expressly prohibited by ordinance, is a stunning defeat for those two particular companies, but surely will not be the last we hear of digital sign conversions in the City of Los Angeles.

By Matthew Hinks

In a question of first impression, the California Court of Appeal has held in, People ex rel. Department of Transportation v. Dry Canyon Enters., LLC, that "a business owner is entitled to a jury trial on the amount of goodwill lost by a taking only if he or she first establishes, as a threshold matter, that the business had goodwill to lose." The court's analysis seems correct; nevertheless, the result is a troubling one for property owners.

Background Facts

Dry Canyon is a wine maker. As part of its business plan, Dry Canyon planned to develop a flagship wine to be made from grapes grown on property it owns in Paso Robles. In 2009, Caltrans initiated eminent domain proceedings to acquire a strip of Dry Canyon's Paso Robles property on which was located 21 percent of the vines Dry Canyon was growing for its new flagship wine. By the time the proceedings were initiated, Dry Canyon had blended and sold a few vintages but had yet to turn a profit on the new flagship brand. The parties agreed to a valuation of $203,500 for the real property, which was paid to Dry Canyon, leaving one remaining issue: the amount of lost goodwill.

Dry Canyon's expert testified that Dry Canyon lost $240,000 in goodwill as a result of the taking, which he calculated using two different methodologies. First, the expert utilized a "cost-to-create" methodology in which he added all expenses incurred in cultivating the new wine and divided by four (being that Caltrans took one-fourth of the vines). The second methodology was defined as a "premium pricing" approach in which the expert calculated that the new vintage would fetch a premium of $10.62 more per bottle than comparable wines, then multiplied that figure by the total number of bottles that would not be sold as a result of the taking. Both methodologies yielded a $240,000 lost goodwill figure.

Unfortunately for Dry Canyon, the trial court disagreed that Dry Canyon had any goodwill at all and granted a motion for judgment. The court of appeal affirmed.

By Matthew Hinks

The billboard wars rage on. In the latest battle, the court in West Washington Properties, LLC v. California Department of Transportation narrowly interpreted a provision of the Outdoor Advertising Act ("OAA"), which provides a rebuttable presumption of legality to advertising displays erected for more than five years without Caltrans enforcement, rejected equitable defenses and dismissed at the pleading stage plaintiff's inverse condemnation claims. The opinion should be a wake up call for companies engaged in or considering transactions involving the transfer of sign rights.

By Matthew Hinks

A new opinion from the Ninth Circuit out of the State of Washington -- Laurel Park Community, LLC v. City of Tumwater -- offers an interesting application of the Supreme Court's regulatory taking jurisprudence.

By Matthew Hinks

The Ninth Circuit has issued a new "chapter in 'the story of billboards.'" Billboard companies and advertisers should take note of the court's opinion. Although the opinion refused to extend full First Amendment protection to billboards and advertising related to underlying expressive works, the court -- recognizing its central role in defining the contours of Constitutional liberties -- rejected the trial court's reasoning that a municipality should be afforded deference to define the divide between commercial and noncommercial speech.