Articles Posted in Litigation

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By Matthew Hinks
Effective environmental review of a real estate development project under the California Environmental Quality Act (“CEQA”) often requires that the approving agency and representatives of the developer work together collaboratively to ensure that environmental review is carried out according to the dictates of the law. However, doing so raises the question of the protectability of communications shared between the developer, the CEQA lead agency and their lawyers. Communications between an attorney and his or her client are privileged and are therefore not subject to disclosure as part of the discovery process or the administrative record in CEQA litigation. But what about in situations where communications take place or are shared among a developer, a lead agency and their lawyers?

A new California Court of Appeal opinion — Citizens for Ceres v. Superior Court — offers a new answer to that question, which will have significant practical implications for property owners and developers engaged in the CEQA process. However because the opinion appears to conflict with a prior Court of Appeal opinion, it is unclear how the rule announced by the Ceres court will get applied in future litigation. Moreover, there is significant question as to whether the Ceres rule will get applied outside of the CEQA context.
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By Matthew Hinks
State density bonus law — one of many California statutes enacted to implement the state’s policy of promoting the construction of affordable housing — has withstood a significant challenge posed by the County of Napa (the “County”) in a new California Court of Appeal opinion, Latinos Unidos del Valle de Napa y Solano v. County of Napa. The Court’s opinion is good news, not only for advocates of affordable housing, but also developers of multifamily housing who rely upon the law, which provides valuable development incentives and is a useful and powerful tool in the permitting process.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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