Unpublished Disposition, 895 F.2d 1416 (9th Cir. 1989)

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U.S. Court of Appeals for the Ninth Circuit - 895 F.2d 1416 (9th Cir. 1989)

Robert DIAZ, Charles Schildmeyer, and Bueno DevelopmentCompany, Inc., a California corporation,Plaintiffs-Appellants,v.CITY OF RIVERSIDE, Defendant-Appellee.

No. 88-6457.

United States Court of Appeals, Ninth Circuit.

Feb. 5, 1990.

Before FLETCHER, FERGUSON and FERNANDEZ, Circuit Judges.


MEMORANDUM* 

Appellants are real estate developers who seek a reversal of the district court's dismissal of their suit alleging violations of state and federal law arising out of the application of a municipal zoning ordinance. We affirm.

FACTS AND PROCEDURAL HISTORY

Appellants, Robert Diaz, Charles Schildmeyer, and Bueno Development Company, Inc. ("Developers") own three parcels of land in Riverside, California. The City of Riverside ("the City") is the appellee. In 1977, the Developers filed a tentative map with the City for development of 126 lots on property zoned to permit development to a density of 180 lots. No final action had been taken on the Developers' application when in 1979 Riverside voters passed a zoning initiative, the Hillside Zoning Ordinance. The Ordinance restricted density to one residential unit per two acres on property with 15%-30% slopes, and one unit per five acres on property with greater than 30% slope. After years of applications and negotiations with the various City bodies responsible for zoning, the ordinance ultimately was applied to the Developers' property, thereby allowing a maximum 23 units on their 45 acres.

In July 1987, the Developers filed a Petition for Writ of Mandate and for Declaratory Relief in state court. The petition challenged the zoning ordinance on its face and as applied to the Developers. In March 1988, after a several-day trial, the judge upheld the zoning ordinance facially and as applied. The California Court of Appeal affirmed.

In May 1988 the Developers filed a complaint in the United State District Court for the Central District of California asserting unconstitutional takings in violation of federal and state law, denial of substantive and procedural due process and equal protection of the law in violation of the United States and California constitutions.

The District Court, in a pithy order dated August 30, 1988, dismissed the takings claims with prejudice as not ripe because plaintiffs had not sought compensation in state court, citing to Williamson Co. Regional Planning Commission v. Hamilton Bank, 473 U.S. 172 (1985); Cassettari v. County of Nevada, 824 F.2d 735 (9th Cir. 1987).

It dismissed the federal due process and the equal protection claims without prejudice under Railroad Commission of Texas v. Pullman Co., 312 U.S. 496 (1941). The remaining state claims were dismissed under United Mine Workers v. Gibbs, 383 U.S. 715 (1966).

The Developers appeal from this order.

STANDARD OF REVIEW

We determine the existence of subject matter jurisdiction de novo. We review a district court's decision to abstain for abuse of discretion. McIntyre v. McIntyre, 771 F.2d 1316, 1319 (9th Cir. 1985). In reviewing decisions of the district court, the court of appeals may affirm on any basis supported by the record. Kruso v. International Telephone & Telegraph Corp., 872 F.2d 1416, 1421 (9th Cir. 1989), Plaine v. McCabe, 797 F.2d 713, 722 (9th Cir. 1986), Smith v. Block, 784 F.2d 993, 996 n. 4 (9th Cir. 1986).

DISCUSSION

Takings Claims

The District Court dismissed the Developers' takings claims on the ground that the court lacked subject matter jurisdiction because the claims were not ripe. In Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985), the Supreme Court dismissed as premature a Tennessee property owner's claims that his property had been temporarily taken by zoning regulations without compensation. The Court held that such a claim is not ripe for federal court adjudication until the property owner has satisfied two requirements. First, an owner must obtain a final determination as to the allowable development. Without such a determination, it is impossible to determine the extent of the regulation's impact, which is necessary in order to evaluate whether the regulation constitutes a taking. Second, since the Fifth Amendment only proscribes the taking of property without just compensation, the property owner also must seek and be denied compensation through the procedures the State has provided before asserting a constitutional violation.

We are persuaded that under the specific facts of this case the Developers' claim was ripe. The Developers obtained a final decision. Unlike the plaintiffs in Agins v. City of Tiburon, 447 U.S. 255, whose claims were dismissed because they had not yet submitted a plan for developing their property, or the plaintiffs in Williamson County, 473 U.S. 172, who, although they had submitted a plan that was rejected had not gone on to seek a variance, the Developers in this case submitted several plans and sought variances when those plans were rejected. Everyone agrees the Developers could subdivide the property into 23 lots and no more. This constitutes a final determination for the purposes of the Williamson requirement. Kinzli v. City of Santa Cruz, 818 F.2d 1449, 1454 (9th Cir. 1987) (a final decision requires a rejected development plan and a denial of variance).

The City argues that the Developers' claims must be dismissed because they failed to avail themselves of California's compensation system. Developers respond that they did pursue the system that was available to them under Agins v. Tiburon, 24 Cal. 3d 266, 157 Cal. Rptr. 372, 598 P.2d 25--relief through a declaratory judgment and mandamus--and that under then existing California law, there was no available procedure for seeking monetary compensation.

The precise nature of the remedies available under California property law during the period critical to this action is open to reasonable disagreement. Three major takings cases give rise to the uncertainty: Williamson County, 473 U.S. 172 (aggrieved landowner must first seek compensation from state before presenting a takings claim in federal court), Agins v. City of Tiburon, 598 P.2d 25 (1979), aff'd on other grounds, 447 U.S. 255 (1980) (under California law aggrieved landowner may challenge both the constitutionality of the ordinance and the manner in which it is applied to his property by seeking to establish the invalidity of the ordinance either through declaratory relief or mandamus, but may not recover damages on the theory of inverse condemnation), and First English Evangelical Lutheran Church of Glendale v. Los Angeles County, 482 U.S. 304 (1987) (overruling that part of Agins that held that once a taking has been found, the only relief is to invalidate the regulation; property owner is entitled to monetary compensation for the period of a temporary total taking that occurs between the time of the taking and the ultimate invalidation of the regulation).

We conclude that under the facts of this case, the Developers pursued the state remedies available to them. To the extent First English modified California law more broadly than merely requiring compensation for a temporary total taking,1  we are persuaded that under a straightforward reading of Agins, Developers pursued the state remedies that were available to them when the alleged taking occurred.2 

Although we conclude that the district court erred in dismissing the takings claims on the ground that they were not ripe, we affirm the dismissal on the alternative ground that the Developers failed to state a claim. The substantial development permitted by the City under the Ordinance precludes a finding of a taking. The regulation substantially advances legitimate state interests and does not deprive the Developers of all or substantially all economically viable uses of their land. Nollan v. California Coast Comm'n, 483 U.S. 825 (1987), Agins v. Tiburon, 447 U.S. 255, 260 (1980), Rossco Holdings Inc. v. State of California, 212 Cal. App. 3d 642, 260 Cal. Rptr. 736 (1989). The Developers may divide their 45 acre parcel into 23 residential units. They simply want a higher density. Limitation on use that still leaves available economic uses does not constitute a taking. See Moore v. City of Costa Mesa, 886 F.2d 260, 263 (9th Cir. 1989) (major portion of property's value must be destroyed before a regulatory taking occurs. Loss of anticipated gains or future profits is not usually sufficient to constitute a taking); Hoehne v. County of San Benito, 870 F.2d 529, 532-533 ("A government entity is not required to permit a landowner to develop property to the full extent it may desire. Denial of the intensive development desired by a landowner does not preclude less intensive, but still valuable development.") HFH, Ltd. v. Superior Court 15 Cal. 3d 508, 125 Cal. Rptr. 365, 542 P.2d 237 (1975), cert. denied 425 U.S. 904 (1976) (a zoning action that merely decreases the market value of property does not violate the constitutional provisions forbidding uncompensated taking or damaging of property); Gilliland v. Los Angeles County, 126 Cal. App. 3d 610, 179 Cal. Rptr. 73 (1981), appeal dismissed, 456 U.S. 967 (1982) (enactment by city of zoning ordinance reducing density of approved development on owners' land does not constitute a taking, zoning to protect local residents from adverse effects of urbanization is valid exercise of police power, and landowner does not have a protectable property interest in any particular zoning designation).

Substantive Due Process, Procedural Due Process, and Equal Protection

The District Court invoked the Pullman abstention doctrine to dispose of Developers' due process and equal protection claims. Since neither the procedural due process and equal protection claims involve any unresolved state law or sensitive areas of social policy peculiar to the state, reliance on Pullman abstention seems unwarranted. Nevertheless, it would be inappropriate to reach the merits of these claims. The state courts have issued a valid and final judgment that invokes the bar of res judicata. They have held that appellants failed to prove that their procedural due process rights were violated by appellee or that they were denied equal protection of the law by virtue of discriminatory application of "spot zoning." Statement of Decision, Superior Court of the State of California for the County of Riverside, March 14, 1988, No. 188244, aff'd, Diaz v. City of Riverside, No. E005352, California Court of Appeal, Fourth District, Division 1 (May 16, 1989). This state court judgment bars developers from seeking relief on these claims in federal court. It is apparent from the record that the state courts gave developers' claims careful attention and thorough consideration; the appellants had their days in court.

Furthermore, the procedural due process and equal protection claims could not withstand the City's motion to dismiss for failure to state a claim.3  Though the process of making one's way through the City of Riverside's zoning system may try the patience of Job, it does not violate procedural due process. See Mathews v. Eldridge, 424 U.S. 319 (1976) (adopting a balancing test to determine which procedures will be required); Rotunda, Nowak & Young, Treatise on Constitutional Law: Substance and Procedure, Sec. 17.8, 250-251 (When the legislature or administrative agency passes laws or promulgates rules which affect a general class of persons, those persons have all received procedural due process--the legislative or administrative process. However, when an agency makes rules that affect a very defined group of interests, then those affected individuals should be granted some fair procedure. The essential elements of procedural due process are adequate notice, a neutral decision-maker, an opportunity to present one's case, representation by an attorney, and a decision based on the record with a statement of reasons for the decision); Gilliland v. County of Los Angeles, 179 Cal. Rptr. 73, 76 (" [W]hen zoning is enacted by initiative, constitutional protections are fulfilled by the equal opportunities of those favoring and opposing the zoning to be heard by the electorate. Those affected by the zoning or rezoning also enjoy the option to obtain administrative or judicial relief in the event the zoning restriction produces arbitrary or capricious results"). Developers had adequate notice, participated in a public hearing, and engaged in ample negotiations with the local planning officials.

Nor have the Developers been denied equal protection of the law. The basis for Developers' claim is that other property owners were granted a more generous zoning designation. The equal protection clause is violated only if the City's treatment of Developers bears no rational relationship to a legitimate government purpose. Kinzli v. City of Santa Cruz, 818 F.2d 1449, 1455 n. 7 (9th Cir. 1987). Even viewing the complaint in Developers' favor, they have failed to state an equal protection violation. We agree with the State Court that the Developers failed to demonstrate that discriminatory "spot zoning" occurred. From the record, it appears that other topographically similar properties had been zoned in a similarly restrictive manner and that exceptions, if any, were very rare.

We affirm the district court's dismissal of Developers' takings, due process and equal protection claims.

AFFIRMED.

 *

This disposition is not appropriate for publication and may not be cited to or by the Courts of this Circuit except as provided by Circuit Rule 36-3

 1

See California Coastal Comm'n v. Superior Court, 210 Cal. App. 3d 1488, 258 Cal. Rptr. 567 for a recent discussion of the extent to which First English modified California takings law procedures. Prior to Agins, it was unclear in California the extent to which inverse condemnation damages could be recovered for a regulatory taking. The California Supreme Court decided in Agins that a public entity was not required "to compensate a landowner for a regulatory taking until two requirements were satisifed: (1) the entity's action was determined to be excessive in an action for declaratory relief or administrative mandate, and (2) the government thereafter continued the taking. In other words, damages were not available for the 'temporary taking' that existed pending final determination of the matter.... As we read it, First Lutheran addressed a relatively narrow issue. Under the Agins rule, a property owner adversely affected by an excessive land use regulation had only one remedy: sue to invalidate the regulation.... First Lutheran overruled Agins, concluding that the Agins rule was unconstitutional because it allowed the government to temporarily take private property without compensation. In that sense, the Supreme Court held that an inverse condemnation remedy for a temporary taking was constitutionally mandated." Id at 795-797

 2

Sinaloa Lake Owners Ass'n v. Simi Valley, 864 F.2d 1475, 1479 (9th Cir. 1989), and Hoehne v. County of San Benito, 870 F.2d 529 (9th Cir. 1989) state that the pertinent point in time for determining the adequacy of state compensation is when the alleged taking occurred. Both Sinaloa and Hoehne involved suits filed before First English was decided so this aspect of the opinions may be considered dicta. It may be more appropriate to impose the compensation exhaustion requirement as of the day of filing the state complaint rather than as of the date of the taking. The entire issue is the question of what state remedies were available to the plaintiff and whether he availed himself of them before turning to federal court. When a landowner files suit in state court after First English, he is on sufficient notice that he must seek whatever compensation the state makes available. Sinaloa and Hoehne follow Williamson County, 473 U.S. at 194 ("all that is required is that a 'reasonable, certain and adequate provision for obtaining compensation' exist at the time of the taking.")

 3

The substantive due process claim is governed directly by the state court's finding that the zoning restriction reasonably relates to a legitimate governmental purpose. To prove a substantive due process violation, the Developers would have to show the zoning was arbitrary and irrational. Usery v. Turner Elkhorn Mining Co. 428 U.S. 1 (1976), Barancik v. County of Marin, 872 F.2d 834, 836 (9th Cir. 1989). The state court held that it was not