March 2007

Deposit of Probable Just Compensation Fixes Date of Valuation in Eminent Domain Cases

March 2, 2007, by Meyers Nave

In Mt. San Jacinto Community College v. Superior Court (2007) 2007 WL 528655 (No. S132251), the California Supreme Court upheld the constitutionality of Code of Civil Procedure section 1263.110, which provides if a public agency deposits the probable amount of compensation to be awarded in the action, based upon an appraisal and determined by the court, the date of valuation (to be used at trial) is the date on which the deposit is made. The court noted that once a deposit is made, the property owner may petition the court to "determine or redetermine" whether it equals the probable compensation that will be awarded. If the deposit is increased, then the original deposit is void and will not be used to determine the date of valuation (section 1263.110(b)).

The court declined to apply Saratoga Fire Protection Dist. v. Hackett (2002) 97 Cal.App.4th 895, where the Court of Appeal held that section 1263.120 (if issue of compensation brought to trial within one year of filing, date of valuation is date of filing) was unconstitutional as applied (trial commenced 11 months after filing and during that time fair market value of property increased from $2 million to $3.2 million). The court in Saratoga held that section 1263.120 had to be disregarded to ensure the owner received just compensation at the time payment was tendered and the property actually taken (p. 905-906). In contract, the public agency in Mt. San Jacinto deposited the probable amount of compensation well before trial, which the property owner had the option of withdrawing.

Court of Appeal Holds State Law Preempts Local Nuisance Vehicle Abatement Ordinance

March 7, 2007, by Meyers Nave



In Hernandez v. City of Sacramento, the Third Appellate District addressed the complex field of civil asset forfeiture laws. Civil asset forfeiture laws were first instituted by the federal government in the 1970s (21 U.S.C. 881), and then gained popularity in California in the 1980s (Health & Safety Code ("H&S Code") section 11469, et seq.). More recently these laws spread to municipalities throughout the state (see, e.g., Horton v. City of Oakland (2000) 82 Cal.App.4th 580.) Civil forfeitures are actions in rem intended to be remedial in nature "'by removing the tools and profits' from persons engaged in the illicit drug trade." (People v. Superior Court (Plascencia) (2002) 103 Cal.App.4th 409, 418, 430, quoting H&S Code section 11469, subd. (j).) Federal, state, and municipal law enforcement agencies share the proceeds according to varying formulas exacted by each jurisdiction.

California's civil asset forfeiture law has endured many revisions. The present version of the California forfeiture statute requires that the government prove the owner of an interest in the property knowingly consented to the illicit use of the property, either beyond a reasonable doubt or by clear and convincing evidence, depending upon the nature of the property involved. (H&S Code sections 11488.4, subd. (i), 11488.5, subd. (d)(1).) H&S Code sections 11469 through 11495 regulate drug-related asset forfeiture, including forfeiture of vehicles. The statutes contain strict substantive and procedural conditions for the civil forfeiture of a vehicle used in the commission of a specified controlled substance offense. They also specify in detail the purpose, scope, and procedures of seizure and forfeiture, and the permissible uses to which the proceeds may be put. Unlike the Sacramento forfeiture ordinance in question, the H&S Code provisions include the requirement of a criminal conviction, proof beyond a reasonable doubt of the conditions justifying forfeiture, and the protection of innocent parties who hold an interest in the vehicle. (H & S Code sections 11470, 11488.4.)

In 1997, the City of Oakland enacted an ordinance authorizing the seizure, forfeiture, and sale of vehicles used to solicit prostitution or acquire drugs "after citizens complained about the nuisance created by persons driving through neighborhoods to buy drugs or solicit acts of prostitution." (Horton, supra, 82 Cal.App.4th at p. 584.) Sacramento also enacted a nuisance ordinance to rid its residential neighborhoods of the blight associated with prostitution and drug buying. In Horton, the First District Court of Appeal rejected the preemption challenge.

Citizens for Political Responsibility v. Pico Rivera Redevelopment Agency, et al

March 8, 2007, by Meyers Nave

Meyers Nave successfully defended the City of Pico Rivera Redevelopment Agency in Citizens for Political Responsibility in Pico Rivera v. City of Pico Rivera Redevelopment Agency, et al. Specifically, the Court found that in reviewing the real party in interest's (Wal-Mart) application for a building permit, the Agency complied with the provisions of its Redevelopment Plan, that it did not violate CEQA and that Petitioner's request for declaratory relief was improper.

Writ of Mandamus

The first cause of action dealt with to the Agency's alleged failure to abide by its Redevelopment Plan. Here, Petitioner sought a traditional writ of mandate under Code of Civil Procedure section 1085. The Court found that Petitioner lacked standing to seek a mandamus action in this instance because they had no "beneficial interest" for a writ to be issued. The Court also found that Petitioner failed to exhaust its administrative remedies. Lastly, the Court found that the Redevelopment Plan does not inflexibly require the Agency to make written findings on review of a permit application. Rather, Debbie Lopez's approval of the building plans was an approval in writing that was acceptable under the Redevelopment Plan.

CEQA

In its second cause of action, Petitioner alleged that the Agency did not comply with the provisions of CEQA by its failure to analyze whether the Wal-Mart expansion could result in significant environmental impacts.

The Court found that the building plan approval was not a project under CEQA because it was a ministerial act. Additionally, the Court found that the building permit approval was not an "approval" of a project triggering the Agency's obligation to conduct CEQA review. Lastly, the Court found that there was no change in the project to require further CEQA review. The Court ultimately found that the record contained substantial evidence to support the Agency's decision to not conduct additional CEQA review.

Declaratory Relief

Finally, in its third cause of action, Petitioner sought a judicial determination whether the Agency should have complied with alleged procedural requirements of the Redevelopment Plan, and whether compliance with those procedures is optional. The Court found that Petitioner's declaratory relief action was a collateral means of attack on the particular actions of the Agency that Petitioner was challenging in its petition for writ of mandamus. Specifically, the court held that a declaratory relief action cannot be used to attack the approval of a building permit and a specific order or decision can only be reviewed via a writ petition.

Petitioner, a citizens group filed a petition for writ of mandate and complaint for declaratory relief against the Agency and its directors. The action challenged the Agency's review and approval of a building permit to expand an existing Wal-Mart store. The Court denied Petitioner's three causes of action and awarded the Agency its costs.

APPELLATE COURT UPHOLDS COUNTY HILLSIDE REGULATIONS

March 13, 2007, by Meyers Nave

On March 8, 2007 the California Court of Appeal, Second Appellate District, issued a unanimous decision upholding the Santa Monica Mountains Grading and Significant Ridgeline Ordinance enacted by the Los Angeles County Board of Supervisors in 2004. The “Ridgeline Ordinance,” as it is sometimes known, imposes special permit requirements on grading projects in the Santa Monica Mountains. It was adopted to provide additional protection to the Santa Monica Mountains after a spate of unregulated grading projects caused significant environmental damage.

The Court of Appeal decision, Land Use Preservation Defense Fund v. County of Los Angeles, No. B190846, puts an end to efforts by objecting landowners to overturn the ordinance on legal grounds. The plaintiffs specifically contended that the Ridgeline Ordinance conflicts with a so-called “Grandfather Clause” in the County’s Santa Monica Mountains North Area Plan, a section of the County’s general plan. According to the plaintiffs, the “Grandfather Clause” exempted all existing legal lots in the mountains from new regulations such as the Ridgeline Ordinance. The Court of Appeal found the plaintiffs’ interpretation of the Grandfather Clause “unreasonable,” noting that plaintiffs’ interpretation would effectively nullify many policies in the North Area Plan calling for more stringent regulation of grading and ridgeline development. The Court of Appeal also rejected arguments that the intent of the Grandfather Clause could be distilled from an ambiguous  conversation between several supervisors at the time of enactment, rather than by reading the clause in the overall context of the Plan.

The Court of Appeal also rejected the plaintiffs’ claims that the County should have prepared a new or supplemental environmental impact report rather than rely on a previous EIR certified at the time the North Area Plan was adopted. The Court found that substantial evidence supported the County’s conclusion that the Ridgeline Ordinance would not have any environmental impacts that had not already been fully evaluated in the previous EIR.

Attorney Deborah Fox of Meyers, Nave, Riback, Silver & Wilson is optimistic that the appellate decision will end the litigation saga that began in 2005.

State is Not Entitled to Award of Attorneys' Fees Under Private Attorney General Doctrine

March 22, 2007, by Meyers Nave

A Court of Appeals reversed a lower court's award of $173,450 in attorneys' fees to the California Attorney General on the grounds that the state did not meet the financial burden criterion. (The People ex rel. Edmund G. Brown, Jr., as Attorney General, v. Tehama County Board of Supervisors, 2007 DJDAR 3650 filed March 16, 2007.) In the action, the People of the State of California, acting through the Attorney General, succeeded in obtaining an injunction requiring the Tehama County Board of Supervisors to apply the provisions of the Subdivision Map Act to a lot line adjustment on property owned by a corporate defendant. The court then awarded attorneys' fees to the State and against the Tehama County Board of Supervisors.

The Court of Appeals overturned the lower court's decision. The Appellate Court held that the financial burden criterion of Code of Civil Procedure section 1021.5 (the private attorney general doctrine statute), "served to limit fee awards under the statue to persons who pursue public interest litigation at a cost to themselves that is out of proportion to any personal interests they might have in the outcome of the matter." The court held that "the award of substantial attorneys' fees to public interest litigants and their attorneys, who are successful in such cases, encourages the representation of deserving interests and worthy causes." However, in this case, the court reasoned that a "fundamental anomaly arises in applying that criterion in an action brought by the Attorney General on behalf of the People of the State of California" because the Attorney General should not need encouragement to pursue litigation that is in the general interest of the state's population; that is the Attorney General's job. The court concluded: "To reward the Attorney General with attorney fees for pursuing litigation it is his or her duty to pursue would stand the private attorney general doctrine on its head."  

Court of Appeals Upholds City's Right to Audit Hotel Records

March 26, 2007, by Meyers Nave

The First Appellate District of the Court of Appeals recently upheld the constitutionality of the City of Cloverdale's transient occupancy tax ("TOT") ordinance and its right to obtain business records to conduct an audit pursuant to the ordinance. The TOT ordinance requires hotel operators to collect an occupancy tax from all hotel guests who occupy a hotel room within the City for fewer than thirty days. The hotel owner in the case refused to comply with legislative subpoenas the City issued for the production of the business records, arguing that the TOT ordinance violated the due process and equal protection clauses of the United States Constitution. The City of Cloverdale was represented in this appeal by Joseph M. Quinn, Nancy Thorington, and Leah Castella, of Meyers, Nave.

In its due process challenge, the hotel owner argued that the definition of "hotel" in the ordinance was "hopelessly circular," and thus constitutionally vague, because it referenced the terms "dwelling" and "lodging."  These latter terms, according to the owner, imply permanent residency, making it unclear who owes the tax and potentially causing it to be due in some permanent residency situations. The court rejected the owner's arguments, noting that the ordinance clearly states that a "transient" includes only those hotel guests who occupy a hotel for less than thirty consecutive calendar days. Consequently, the ordinance language is not vague. And, because the ordinance "does not attempt to impose the TOT on the basis of either the type or location of the property," it could not be applied to permanent residency situations. The court further observed that other California appellate courts have rejected the very same vagueness challenge to TOT ordinances containing language substantially similar to the City's ordinance.

The court also rejected the equal protection argument in which the owner contended that the TOT ordinance improperly classifies "persons who cannot afford month-to-month housing and can only afford residing at a motel on a day-to-day basis."  First, the court stated that the owner misinterpreted the TOT ordinance because the ordinance does not impose the tax based on the type of property or the arrangement between the person who occupies the property and the hotel operator. Instead, the TOT applies equally to all those defined as "transients" under the ordinance. Second, the court observed that the classification of "transient" hotel occupants was a proper classification for taxing purposes, and this argument had been "laid to rest long ago" in another appellate court decision.

For more information about this case, please contact Joe Quinn at (510) 808-2000.