Agins v. City of Tiburon

PETITIONER:Agins
RESPONDENT:City of Tiburon
LOCATION:U.S. District Court for the Western District of Texas, San Antonio Division

DOCKET NO.: 79-602
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: Supreme Court of California

CITATION: 447 US 255 (1980)
ARGUED: Apr 15, 1980
DECIDED: Jun 10, 1980

ADVOCATES:
E. Clement Shute, Jr. – for appellee
Gideon Kanner – for appellants

Facts of the case

Question

Audio Transcription for Oral Argument – April 15, 1980 in Agins v. City of Tiburon

Warren E. Burger:

We’ll hear arguments first this morning in Agins against City of Tiburon.

Mr. Kanner, you may proceed whenever you are ready.

Gideon Kanner:

Mr. Chief Justice and may it please the Court.

Particularly, in view of the controversy that erupted in the briefing, it seems appropriate to emphasize some of the facts in this case.

This case —

Warren E. Burger:

You — you observed more the volume of the briefing than the controversy, Mr. Kanner?

Gideon Kanner:

The amici have indeed been prolific, Your Honor.

We have here a combination of factors.

There is an impact of — a twofold impact on the subject property.

We have first of all, the regulatory impact, the intrusive regulation which in fact appellants contend deprives the subject property of all use and value in the marketplace.

The second factor which is not in our view received the proper amount of attention from the appellee’s side, is that we have here a fairly extensive long standing and overt accusatory activities by the city.

And there’s a long standing official announcements and commitments to acquisition of this property and long standing studies by experts indicating that this property was to be a — an indispensable part of the city’s open space.

William H. Rehnquist:

Mr. Kanner, let me ask you a — a question about the procedural posture of the case, because of my lack of familiarity with California law.

As I understand it, the — your clients brought an action in the Superior Court of Marin County and a demurrer one — a demurrer to one count was sustained and demurrers to another was overruled.

Gideon Kanner:

Not quite, Your Honor.

The — the second count was also sustained, but with leave to amend.

William H. Rehnquist:

You wouldn’t live with — with leave.

Gideon Kanner:

Yes, that was the declaratory relief count and the plaintiffs then declined to amend instead on that — on that part of the pleading.

William H. Rehnquist:

Well — well, what I’m puzzled about is, do we have any way of knowing whether ultimately, your client would be allowed to build one house per acre on this 5-acre tract or only one house on the entire 5-acre tract?

Gideon Kanner:

There is no way of knowing that and that is —

Warren E. Burger:

There — there was a way, wasn’t there?

Gideon Kanner:

I beg your pardon?

Warren E. Burger:

There was a way, wasn’t there, the administrative remedy?

Gideon Kanner:

Well, there was no administrative remedy on this ordinance, Your Honor.

There was at — would have been, had Mr. Agins gone ahead and decided to build.

The point is that one owns property not necessarily to build.

He may wish to sell it.

He may wish to do something else with it.

The point is that the property, the allegation goes, has now been rendered unusable and worthless in the marketplace.

Who is going —

Warren E. Burger:

Unusable for any purpose?

Gideon Kanner:

For any purpose.

Warren E. Burger:

Can’t you build one house on it?

Gideon Kanner:

Well, we suggest, Your Honor, that we cannot and because again, Your Honor, it has been a disadvantage precisely, because of the procedural posture mentioned by Mr. Justice Rehnquist.

And that is we have before Your Honors a complaint that has never been even amended once.

The demurrer was sustained without to — leave to amend even once.

So, we only have the bare language of the pleading and under California practice, the so called pleading of ultimate facts, which haven’t forbid, must not be evidentiary facts that is forbidden.

So, we cannot on this record, point to any facts that would present the Court with the evidence that we could put on, had we been permitted to go trial.

William H. Rehnquist:

Does the City of Tiburon have a zoning commission, before whom you could’ve gone and asked leave to build one house per acre?

Gideon Kanner:

I presume they do.

The point — our — our point here is, Your Honor, however, that we’re dealing with a legislative enactment.

We are dealing here with the zoning — an extensive zoning ordinance of — that covers a wide area.

And after this Court’s ruling in the Forest City Enterprises case and parallel California cases, which are cited on the briefs, that is a purely legislative act, so that there were no administrative remedies to exhaust.

This ordinance, the — the legislation itself, does not set up any administrative review proceedings — procedure, so that one could do it only in the same sense that if the legislature of the State of California were to adopt an unconstitutional statute, one can say — one could say, “Well, why don’t you go to Sacramento and ask them to change it before you challenge it in court?”

Now, as I understand this Court’s precedents, that is Euclid versus Ambler, which was quite explicit on the point that is not required to be done.

William H. Rehnquist:

But we don’t know what this point then, whether if you had followed some sort of zoning board or adjustment board procedure, you might or might not have been allowed to build one house per acre?

Gideon Kanner:

That is correct.

This Court does not know it on this record.

Byron R. White:

Suppose —

Gideon Kanner:

— may I — yes, sir?

Byron R. White:

Could I ask you?

What do you do about the statement by your Supreme Court and California that says, “According to the wording of the ordinance at which we may take note, the RPD-1 zoning allows plaintiff to build between one and five residences on their property?

Gideon Kanner:

That is —

Byron R. White:

This belies plaintiff’s claim that development of their land is forever prevented and that’s the — that’s what the Supreme Court in California says.

Gideon Kanner:

That was directed, Your Honor, to the second count, to the declaratory relief count and under California or law of remedies —

Byron R. White:

You won’t care whether it was directed to.

It says that — that it was — that– that under the zoning ordinance, you can build one to five houses?

Gideon Kanner:

Well, this Court and Nectow verus Cambridge, said, “The quite, the contrary.”

In that case, that is precisely what the Massachusetts Supreme Court said and this Court disagreed and said that, “The owner was — had to be permitted as he was there permitted, which we were not, to put on evidence and satisfy a triumph of fact that notwithstanding such language in the ordinance,” he in fact was not able to put the property to uses which would be economically valuable that would give him a reasonable to return.

Byron R. White:

So, you — you say, we should just — that we — that we just shouldn’t accept the statement as to what the zoning ordinance does to you?

Gideon Kanner:

On — that’s not quite our position.

The answer to that is twofold.

Number one, there are two causes of action involved there.

This one was directed only to the facial constitutionality of the ordinance.

So that the California Supreme Court said, “Since the ordinance on its face allows something, it is not amenable to challenge by declaratory relief under California law.”

However, that leaves unanswered, the first cause of action which is the Nectow versus Cambridge approach, in which we say, “Notwithstanding the face of the ordinance, let us look at the facts.”

Suppose the legislature or the local city was to make some — let’s — let’s hypothesize a bad face situation, in which they zone a swampland for — for high rise office buildings.

Now, would not the owner then be permitted to come into court and put on evidence and say, “Look, it’s impossible to build office buildings on that land.”

We make the same argument, except that our argument goes to the economics and to value the property —

Warren E. Burger:

When you say the zoning traditionally, impair a value of property for —

Gideon Kanner:

Of course.

Warren E. Burger:

— owners?

Gideon Kanner:

That’s — that’s a point of some importance by this — an allegation of this complaint not that the value has been diminished, which incidentally ought to be enough.

It’s a matter of degree under this Court’s opinion in Central Eureka Mining, but we’re alleging that it went beyond that.

That the property has been deprived of all —

Warren E. Burger:

Well, are you telling the —

Gideon Kanner:

— value and —

Warren E. Burger:

— Court now that —

Gideon Kanner:

— utility.

Warren E. Burger:

— that there was anything to prevent you from making an application to build five houses, one on each acre?

Gideon Kanner:

Yes, Your Honor.

Warren E. Burger:

But —

Gideon Kanner:

The practicalities of the matter.

Let me —

Warren E. Burger:

How — how do you know, unless you did it?

Gideon Kanner:

Well, with — there is a — a fairly well settled body of state law and federal law that is and to the extent the federal courts have considered it.

We’ve cited some of it in the brief, the most recent one in California being Dahl versus City of Palo Alto, which discusses California law on that point.

And there’s a well recognized doctrine of utility.

And that is that if the position of the public body as such, that is manifest, that they have no intention of allowing it.

One is not required to perform an idle act.

Gideon Kanner:

And the same thing happened in the Dahl case, if it’s — the facts are virtually identical.

There, the City of Palo Alto pretty much said, “We want those foothills left open.

That’s going to be open space, there will be view shed for our city park and that’s that.”

William H. Rehnquist:

You say this is almost then as if, the legislature had said, “You’re 5-acre is zoned as a park and nothing — nothing should be built on it.”

Gideon Kanner:

Just about, may I invite Your Honors’ attention to page 32 of the appendix in the jurisdictional statement which contains some of these standards as the ordinance puts it.

Take a look at this for example, “Land to be preserved as open space shall be maintained as permanent open space by dedication to the city, a fee title or of scenic easements, by deed restriction approved by the city attorney or by other methods acceptable to the city.”

Now, we have here a piece of property, if it’s going to be one house per 5-acres, we’re talking here about a — an estate of unimaginable grandeur in that part of the country.

And even by one house per acre, would be quite lavish.

Now, we have to sell this land to some person who is going to have to spend a fortune and then he discovers that he has to dedicated it in fee to the city, if the city so requires.

Byron R. White:

These are economic reality, we’ll just — we’ll just mean that you cannot develop, develop, but even if you could build one house per acre, that you’re — that just won’t work.

Gideon Kanner:

Well, I — what we are saying, Your Honor, is that there is no way in which the — there is going to be one house per acre.

Again, I’m again, that the disadvantage being bound to the —

William H. Rehnquist:

Well —

Gideon Kanner:

— complaint.

William H. Rehnquist:

— it me, an illegal sense in which — which your theory or complaint boils down to is it, on the allegations in your complaint, instead of having the demurrer sustained, it should have been overruled and a trial on the facts should have been held.

Gideon Kanner:

That’s precisely our position.

If all these arguments from — for — from the other side on that point are correct, then obviously, my client would’ve lost very quickly, possibly by summary judgment, if it’s all that cut and dry.

Now — and we — we — as I’ve — as an advocate, I certainly inscribe a great deal of significance that a determined effort to keep my clients from going to trial and to put on their evidence.

Why?

If the evidence is all that bad, they’re going to loss like that, aren’t they?

But the evidence is not all that bad and I am prevented from going into it here on this record.

Thurgood Marshall:

You want us to change the procedures of California courts?

Gideon Kanner:

No sir, Your Honor.

We’re dealing here with the Fifth Amendment.

Thurgood Marshall:

Well, I thought you said, they wouldn’t let you put on evidence and that is your compliant.

Gideon Kanner:

We are —

Thurgood Marshall:

Isn’t that your complaint?

Gideon Kanner:

Our complaint is that they would —

Thurgood Marshall:

So, you want us to change that?

Gideon Kanner:

No, Your Honor.

Gideon Kanner:

Our complaint is that they wouldn’t let us put on evidence of federal constitutional violation.

Thurgood Marshall:

Like what?

Gideon Kanner:

Deprivation of property without due process, taking a property without just compensation.

Thurgood Marshall:

I don’t just — I just don’t understand how you get to that, how you get that before us, if it’s not in the record?

Gideon Kanner:

I beg your pardon, Your Honor?

Thurgood Marshall:

I don’t say you get anything before us that is not on the record?

Gideon Kanner:

We were denied the opportunity to have a day in court to put on this evidence.

Thurgood Marshall:

You did have some day — you’re in Court.

I mean, when you get summary judgments, you would say anything, don’t you?

Gideon Kanner:

Well, it wasn’t a summary judgment.

It was a dismissal here on the pleading without leave to amend.

Thurgood Marshall:

(Voice Overlap) in summary judgments, you don’t get to put your evidence in either, do you?

Gideon Kanner:

Well, of course, but had the matter gone as far to summary judgment, there are at least it would —

Thurgood Marshall:

Would you —

Gideon Kanner:

— have been evidentiary facts before the courts.

Thurgood Marshall:

You wouldn’t have been complaining then, I think you’re complaining about the procedure.

Gideon Kanner:

Oh, no, Your Honor.

I wouldn’t have been complaining then, if there had been no triable issue of facts and only an issue of law.

Lawyers know that you — there’s always a winner and a loser in every case, so you lose.

Thurgood Marshall:

Did you make an offer to proof?

Gideon Kanner:

There was no opportunity ever to make one, because this was on a general demurrer.

Thurgood Marshall:

Were you — were you handcuffed?

Gideon Kanner:

Your Honor, under California law what —

Thurgood Marshall:

I said, did you offer to make an offer of proof?

Gideon Kanner:

Your Honor, that is not —

Thurgood Marshall:

Did you ask —

Gideon Kanner:

— permitted under California law.

That is a general demurrer.

Thurgood Marshall:

Well, then you’re complaining about California procedure.

Gideon Kanner:

Well, may I make — may I use a hypothesis, Your Honor?

Gideon Kanner:

Suppose we had a criminal prosecution in which the defendant wants to offer evidence that he was in fact coerced into confessing and he is met by some state statute, which says that a — that a — the existence of a written confession is — is presumptive, is conclusive.

And he is not then permitted to offer any evidence.

Now, surely we wouldn’t have any difficulty with that would we?

Thurgood Marshall:

That’s a rock and this case is an orange.

Gideon Kanner:

[Laughter] Well, may I point out this.

There — there is nevertheless, a similarity, Your Honor.

We were never permitted —

Thurgood Marshall:

(Voice Overlap) —

Gideon Kanner:

— we were never — perhaps, only that, but we were never permitted to put on evidence or even to plead in amended form any additional facts to show that in fact, this ordinance deprives the owner of all reasonable use and value.

Byron R. White:

You would have tried to prove that this — that under this ordinance, you could — that the land was unusable?

Gideon Kanner:

Yes, we —

Byron R. White:

And —

Gideon Kanner:

— and only could’ve tried, we looked down —

Byron R. White:

You would — you would have just as an economic matter or you just couldn’t —

Gideon Kanner:

Yes, Your Honor.

Yes, Your Honor, they —

Byron R. White:

And as so in effect, this was a — this was a device, and a — and an effective device to maintain open spaces —

Gideon Kanner:

Precisely.

Byron R. White:

— without paying for it?

Gideon Kanner:

That’s precisely what happened.

It’s exactly like Nectow versus Cambridge.

We have an ordinance which on its face permits a use, but once the trier of fact heard it, he realized that that ostensibly permitted years was in fact, economically impossible.

The owner would be locked into perpetually money-losing position.

Byron R. White:

Did you ask the — did make you make this argument before the California court?

Gideon Kanner:

Yes, Your Honor.

The — that are — those are the allegations or the complaint.

Byron R. White:

Well, I know, but did you —

Gideon Kanner:

And that is the record before the Court.

Byron R. White:

— did you — did you say that you were, you were denied — being denied due process by not — not being able to put on your proof?

Gideon Kanner:

Oh, yes, Your Honor, that was the — that was the — my argument.

Byron R. White:

What did the Court say about that?

Gideon Kanner:

The Court has simply said that —

Byron R. White:

Did they ignore it or what?

Gideon Kanner:

— it didn’t care to deal with that.

That even if there had been a taking without just compensation, the Court said that my clients could not recover any just compensation because their only remedy was in validation and then in a rather surprising turn of events, the California Supreme Court without saying so, revived the common law form of action approach.

And then because my client asked for the wrong remedy, affirmed a dismissal, which was a startling development, but that is a matter of state law.

John Paul Stevens:

Mr. Kanner, maybe I’m missing something here, but if I understand correctly, the first cause of action was action for damages?

Gideon Kanner:

Inverse condemnation, yes Your Honor.

John Paul Stevens:

And they held, there is no such remedy as in (Voice Overlap) —

Gideon Kanner:

That is correct.

John Paul Stevens:

So, they didn’t grant you leave to amend.

Then your second action is one where you attacked the bloody declaratory judgment as to the validity of the ordinance?

Gideon Kanner:

On its face.

John Paul Stevens:

Now, where in this — and you were given leave to amend, (Voice Overlap) —

Gideon Kanner:

Yes, sir.

John Paul Stevens:

— but you declined?

Gideon Kanner:

Yes, sir.

John Paul Stevens:

What allegation in the second cause of action do you principally rely on as indicating that you could prove that you can even build five houses?

Gideon Kanner:

The second cause —

John Paul Stevens:

No one here could allege that?

Gideon Kanner:

The second cause of action was not amended for that very reason, Your Honor.There isn’t really much to be said, but under —

John Paul Stevens:

But then, you concede you could build five houses?

Gideon Kanner:

No Your Honor, we do not.

John Paul Stevens:

If you haven’t alleged you couldn’t, I don’t understand —

Gideon Kanner:

Well, that’s what I’m trying to respond to, Your Honor.

Under California law when you go in declaratory relief, you may only challenge what is on the face of the ordinance.

So, that is candidly, that was a secondary consideration to our side of the case because the face of the ordinance did say all those things that you could build.

Back to Nectow versus Cambridge, that was a formidable barrier to us.

We had to have an opportunity to put on evidence and to show that de facto.

Those are ostensibly permitted.

Gideon Kanner:

Here, is where economically and in one instance physically unachievable.

And to — in order to do that —

John Paul Stevens:

It could never pleaded that.

Gideon Kanner:

Well, that was — that was —

John Paul Stevens:

Do you say is the (Voice Overlap) —

Gideon Kanner:

— pleaded on —

John Paul Stevens:

— California law they would not allow you to plead that theory?

Gideon Kanner:

Well, were not allowed to plead any evidentiary facts of course.

Even if there had been an amendment.

William O. Douglas:

You don’t even plead the conclusion.

Gideon Kanner:

I beg your pardon, Your Honor?

William O. Douglas:

You don’t even plead the conclusion, as I read the second cause of action.

Gideon Kanner:

Well, the second cause of action, Your Honor, is only directed to the face of the ordinance.

That is where we may not.

We simply may not, it is forbidden under California law to deal with the constitutionality as applied.

For that, until the California Supreme spoke — Court’s spoke in this case, the sole remedy was to go in inverse condemnation or mandamus.

And in this case they eliminated the inverse condemnation remedy.

So that under the second cause of action, it was simply — it was the wrong tool for the jobs so to speak, in California.

One click cannot go behind the face of the ordinance on declaratory relief.

It is only a facial —

William O. Douglas:

There is no way in California that you could’ve — other than asking for money damages, there’s no way as a matter California law on which you could’ve filed some kind of a complaint in which you said, there’s an ordinance here that says I can build five houses, but I really can’t build the five houses?

Gideon Kanner:

That’s what —

William O. Douglas:

No way you could — you could tender that issue.

Gideon Kanner:

Well, there was a way to tender it the way we did and that been fact.

William O. Douglas:

But you didn’t question —

Gideon Kanner:

They inverse condemnation, indeed, Your Honor.

That we allege — we alleged the ultimate facts that the effect of the ordinance and the other activities and I do ask the Court to keep in mind the other activities.

The property was rendered, worthless and useless and those were the ultimate facts.

William H. Rehnquist:

Mr. Kanner, supposing that this Court were to hold that California under our — the Federal Constitution has the perfect right to withhold the remedy of inverse condemnation, so has it grant you the right to establish the unconstitutionality of the particular ordinance.

Nonetheless, you would have to prove a taking, I suppose.

Gideon Kanner:

Yes, Your Honor.

William H. Rehnquist:

Where — where in — in the record, may I ask, or in the jurisdictional statement or appendix, is your complaint?

Gideon Kanner:

The complaint as contained in a joint appendix Your Honor.

William H. Rehnquist:

What color —

Gideon Kanner:

It is — begins at page 3, that’s brief —

William H. Rehnquist:

Oh, thank you.

Warren E. Burger:

Suppose, Mr. Kanner, that your friends on the other side had come in, in their brief and tendered on behalf of the city, assurance that you could build one house on each of the 5 acres —

Gideon Kanner:

Well —

Warren E. Burger:

— would you still be here making these arguments?

Gideon Kanner:

No, Your Honor.

I have been driven to respond in a way which I’m not sure as proper, but I think the Court should know that when this case was being argued before the California Supreme Court, Mr. Hearn, who was arguing the case, offered to dismiss the action right then and there, on a stipulation that one house per acre could be built.

And no such stipulation was proffered.

Warren E. Burger:

How about one house for the entire 5 acres?

Gideon Kanner:

That is a matter of physical impossibility.

The offsite improvements necessary for the construction of one house on that parcel would make it so expensive that no one could afford it.

That’s — that’s what it boils down to.

Now, again, I — I apologize if I transgress the boundary of the record, but that’s the sort of evidentiary matters that we would have to go into to — to persuade a trier of fact as was done in Nectow versus Cambridge, that in fact, that’s just can’t be done.

No matter what that ordinance says.

I — I did want to emphasize the other activities that took place here and that is something which this Court has never considered and that is the impact of the pre-condemnation activities of the Government, which is not content just to go ahead and condemn land when they want to, but on the contrary, they go ahead and they make announcement and they get — they get studies and they get planners.

And it’s all widely reported in the press.

This property is being acquired by the city.

This went on for a period of years here.

Who in — in the market is going to be foolish enough to spend good money to buy land which the city has announced, repeatedly, definitively, “This is an indispensable part of open space city resources.

We are going to acquire it”

And in fact, they went ahead, adopt the condemnation resolution, brought the condemnation action.

And it was then only when confronting the value of this land, because it is a very desirable part of the country and they abandoned the condemnation and chose to stand on this ordinance, but accomplishes the very same thing, the passive use.

Now, if the Government wants to go in and build a road on somebody’s property obviously, they — they have to enter at some point and do it.

But if the use that is desired by the Government is a passive one, such as open space, they don’t have to, they don’t have to cross the — the close.

They don’t have to set that tow on the property.

Byron R. White:

Well, I understand you to say awhile ago that if it were stipulated that — that you could build five house, one house per — per acre, that you wouldn’t be here?

Gideon Kanner:

That is correct, Your Honor.

Byron R. White:

Because then you would say the economically feasible to develop to property?

Gideon Kanner:

That is my understanding —

Byron R. White:

And there would be no taking?

Gideon Kanner:

That is correct, Your Honor.

Where —

Warren E. Burger:

But you’re — but you’re never applying for that?

Gideon Kanner:

Well —

Warren E. Burger:

You never sought to get to —

Gideon Kanner:

Well, Your Honor, again, we get back to the point of we have here an extensive record of city commitments suggest the exact position.

And there is again, a very clear matter of utility — doctrine of utility.

I — this had never arose that reason in the briefing here and I think if the Court means that appropriate, I would request leave to file a supplemental brief on the question of the — the lack of needs to pursue administrative remedies, even if they are available, which they are not here, by the way.

But even if they’re available, they need not be exhausted when there is a clear-cut case of utility, which we suggest we have here in view of the —

Byron R. White:

And what’s — what’s the clear-cut case of utility?

Suppose you applied for — what do you do, apply for a building permit to or you filed a plot or you filed a — you do something with —

Gideon Kanner:

In —

Byron R. White:

— with the authority.

Gideon Kanner:

— in California, that’s quite a major undertaking which in this case it cause —

Byron R. White:

Well, let’s assume whatever it is — let’s assume you — why do you say it would be futile?

Gideon Kanner:

We — because we have here longstanding city announcement that of commitment to the acquisition of this property for its open space (Voice Overlap) —

Byron R. White:

So you do — you think they would just turn you down to — to build five houses?

Gideon Kanner:

Yes, Your Honor.

I again, call Your Honors’ attention to the language of the ordinance at pages 32 and 33 of the appendix or jurisdictional statement.

And the — the city has a — a — there are some four subparagraphs under each of them the — any — any construction can be turned down under the most vague and subjective criteria imaginable, to minimize visual impact for example.

In any event, I would urge the Court to consider the other mode of the city activity, that is quite critical and I see that it did not capture the Court’s mind as much as the first issue.

Nevertheless, that is the kind of pragmatic issue, which the market reacts to very strongly.

And because nobody wants to buy land that has a lawsuit attached to it and nobody wants to buy land which is under a cloud of a condemnation, nobody wants to buy land that the city has shown a definite interest in and has committed itself, as clear as can be on this record even without going into the evidentiary facts, which incidentally go even further than this record.

But we have here two studies by two consultants we have the appropriation of funds, we have the issuance of bronzes, we have a condemnation resolution, we have an actual on again, off again condemnation, which in this cases is often a very common device, bring the condemnation, then abandon it, then bring it later, at a later date and so on.

William H. Rehnquist:

Your client was reimbursed for his expenses and then —

Gideon Kanner:

There was reimbursed for the attorney’s fees and — and litigation expenses.

Gideon Kanner:

He was not reimbursed of course, for any loss of value to the property or any — any constitutional laws.

That was just — that’s just attorney’s fees and expert fees.

So that, that — that side of the case particularly when combined I think, I better reserve my five minutes for rebuttal, with Court’s permission.

Warren E. Burger:

Very well, Mr. Kanner.

Mr. Shute.

E. Clement Shute, Jr.:

Mr. Chief Justice and may it please the Court.

I also would like to review the significant allegations of the complaint.

It is alleged that the appellants bought the property for residential use and as the Court has observed, the California Supreme Court required that it be made available for residential use, by the construction that placed upon the zoning ordinance.

That is at least, one home must be allowed by the city and up to five maybe allowed by the city under the terms of the zoning ordinance.

It must be recalled that complaint alleges that the City of Tiburon has the highest values of land for residential purposes of any place in California and that these land of appellants has the highest values within the city.

So, we’re talk —

William H. Rehnquist:

Mr. — Mr. Shute, let — let me refer to you to part of a page 13 of the joint appendix where the allegation is that the — number seven that the ordinance and question is arbitrary, capricious and reasonable and therefore, constituted so taking their property without payment of just compensation violation the Fifth and Fourteenth Amendment, in prohibiting such.

Now, as I say, I’m — I — I’m not familiar with California rules presently but I — I would’ve thought that in — under ordinary rules, a notice pleading in allegation such as that, the sustaining of a demurrer to what have said the — the — even if the ordinance does that, it’s perfectly all right, which strikes me as a somewhat odd results.

E. Clement Shute, Jr.:

Well, Your Honor, I think the answer lies in the fact that the California Supreme Court took judicial notice at the zoning ordinance and under California law and federal cases who have done the same, in effect, considered the terms of the zoning ordinance to be a part of the complaint or a part of the record before the Court.

Construe those ordinances as requiring the city to allow residential use, then determine under the substantive test for encroachment upon private rights that the — the remaining available reasonable use rendered nugatory that allegation.

As a matter of law, the ordinances are not arbitrary or capricious.

Warren E. Burger:

What do you have to say about Mr. Kanner’s suggestion that an application to build five houses, one per acre, would’ve been utterly futile?

E. Clement Shute, Jr.:

I think, Your Honor, that’s an incorrect contention.

The city — there’s no indication that the city would not consider such an application on its merits and perhaps grant up to five residential units.

One of the key parts of the city’s position is that it should be able to preserve its process.

It calls for the submission of a master plan and then it would act on the master plan as —

Warren E. Burger:

The master plan for how many units?

E. Clement Shute, Jr.:

For the — up to five units.

Warren E. Burger:

Just for the 5 acres?

E. Clement Shute, Jr.:

Because the zoning ordinance calls for a maximum density of one home per acre, which if the land values are such as has been alleged, would certainly, yield very substantial values.

I think that would be a matter of common knowledge.

So, what we say is the city can’t very well indicate in advance, how many units it would approve because the necessary environmental review hasn’t occurred.

There’s no way to know the physical circumstances and enough detail to indicate how many units might be approved, but the Supreme Court of our State has said, “Residential use must be approved from one to five units.”

William H. Rehnquist:

But did the city in this response, make any defense that you haven’t even taken this before the zoning board or the land development board, whatever you have.

Rather than — it’s simply demurring which is as I understand, the same as saying a motion the — if complaint fails to state a claim and which relief maybe — maybe granted?

E. Clement Shute, Jr.:

Actually, an alternative ground of the demurrer was a lack of jurisdiction which under California law, the doctrine of exhaustion the administrative remedy is jurisdictional.And one of the grounds of the city’s demurrer was the court lack jurisdiction precisely because of the failure to exhaust administrative remedies.

William H. Rehnquist:

And was it up — is — is it your contention that it was — the demurrer was sustained because of that reason or that the Supreme Court of California upheld the Superior Court’s ruling because of that reason?

E. Clement Shute, Jr.:

I think, Your Honor, that it implicitly did in the sense that it also refused to speculate as to how many units might be appropriate by court action prior to administrative of action.

And by construing the ordinance on its face said, “That is what is before us, the facial validity of the ordinance.”

Now, it might be applied in circumstances that would call on this ordinance for the submission of a master plan.

Byron R. White:

Until — until there had been some attempt to — to get a plan approved, you couldn’t really tell how the ordinance was going to be applied?

E. Clement Shute, Jr.:

That’s correct, Your Honor.

Byron R. White:

And hence, the only issue that was left was the facial validity.

E. Clement Shute, Jr.:

That is correct, Your Honor.

William H. Rehnquist:

Well, how much — is it your position that the city could’ve waited five or 10 years for them to get a master plan approved and meanwhile, these owners could have been a kind of held in suspense until the master plan was finally approved?

E. Clement Shute, Jr.:

Absolutely not, Your Honor.

The choice to submit a master plan is that of the owner and could’ve been undertaken at any time.

William H. Rehnquist:

So, the owner can simply submit a master plan for his 5 acres to the zoning board?

E. Clement Shute, Jr.:

That’s correct and a further point I would make, Your Honor, is under the California Government Code and they have the numbers transverse, 65950.

There is a time limit established under California law.

An agency can take no more than one year for any kind of action such as this and as encouraged to take less time.

So, had the application been submitted, it could not have just been suspended indefinitely.

And the penalty for an agency’s failure to act is that the application is deemed to prove by operation of law.

Warren E. Burger:

After what period of time?

E. Clement Shute, Jr.:

After a one year period, but that’s on a statewide basis.

Any kind of project and there’s a legislative finding which encourages agencies to take an even shorter period of time.

John Paul Stevens:

Mr. Shute, I wonder if you’d comment on Mr. Kanner’s reference to subparagraph (e) on — on page 32 of the jurisdictional statement, “Permanents of open space that the part about land to be preserved as open space shall be maintained as permanent open space by dedication of the city of fee title or scenic easements and the like.”

E. Clement Shute, Jr.:

Well, Your Honor, I would — I respond to that in two ways.

First of all, it seems to me that if there were any improprieties that occurred in this — in the amount of dedication or the form of dedication which the city asked for during the process, then the Court would be aware of the issues and the illegal questions that would be presented and it could litigated following the completion of the administrative process.

In other words, if owner’s dedication requirements that were unreasonable under any standard were imposed, the — the owner could litigate that following the city’s action.

So, that really ties into the exhaustion point and becomes kind of an element of procedural due process.

William O. Douglas:

Well, if the city can call the dedication pursuant to that paragraph, would there be compensation paid for the debt which was dedicated?

E. Clement Shute, Jr.:

Well, no.

Ordinarily, there would not be, because the compensation — this will be an aspect of the approval for — of the activity —

John Paul Stevens:

Yes.

E. Clement Shute, Jr.:

— and part dedications, dedications for roadways and such as that have generally been held to be non-compensable.

But you see, in all candor, I don’t see how that issue can be considered before the Court at this point, because we can’t presume that the city would require an extraordinary or unfair illegal amount of dedication.

That would have to wait and see what occurs.

And also, the open space process is contemplated by California law, in this circumstance, calls for a balance between preservation of open space resources whatever they maybe, in California that would include vest amounts of agricultural land, lands which is subject to landslide or earthquake and it might very appropriate to require dedications under some circumstances to preserve the very open space features, which the law identifies.

And I think that —

Potter Stewart:

Well, Mr. Shute, you’re simply answering the questions posed to you by members of the Court, but really, aren’t all these things matters for the — for a trial court, and isn’t that — doesn’t that show why a demurrer was improper?

Here, you have a complaint that in paragraph 9 says that “the natural and proximate result of the ordinance was to prevent any sale, use, transfer or development thereof, or any part thereof.”

And then you filed a demurrer which I assume is what appears on page 25 of the jurisdictional statement and the demurrer was sustained and yet, the allegations of that complaint sound like the property was taken without any compensation whatsoever.

Now, maybe there are all sorts of factual evidence that can show that it wasn’t, but why — why does this make a demurrer proper?

E. Clement Shute, Jr.:

Because, Your Honor, the California Supreme Court took that demurrer together with the city’s zoning ordinances and pointed out that the —

Byron R. White:

Yes, but not all of us —

E. Clement Shute, Jr.:

— ordinance has allowed use.

Potter Stewart:

But you’re — you weren’t referring the zoning ordinances, you were referring to all sorts of other permutations and combinations and possibilities.

All of those things are matters for evidence in the — of evidence under trial court, aren’t they?

E. Clement Shute, Jr.:

Well, to show —

Potter Stewart:

(Voice Overlap) that the allegation of the complaint is — is factually mistaken.

E. Clement Shute, Jr.:

I think there’s a very strong policy here, of protecting zoning and land use regulation affirm —

Potter Stewart:

Well, the Constitution imposed a very strong policy, have not taken anybody’s property without paying for it.

E. Clement Shute, Jr.:

That’s quite correct, Your Honor.

William H. Rehnquist:

If they — if they allege — if the owner alleges that it has been taken, a — a demurrer is not a satisfactory responsive, it seemed to me.

It seemed to me that you have to come in and — and deny that it is been taken and that is a State’s factual proof.

Warren E. Burger:

Is that — is that issue somewhat moved from the case, by your friend’s concession, which at least I understood him to make that he understands, he can build one house on the 5 acres?

E. Clement Shute, Jr.:

I think that’s correct, in terms of substantive process.

William H. Rehnquist:

I thought it was five houses on the 5 acres?

Warren E. Burger:

No, he — his response was that he knows.

He could build one house on the 5 acres, but he has never tried to — the — the one house for one —

E. Clement Shute, Jr.:

And his further response as I recall was that if he — if they were allowed to build five, they would — that would satisfy their expectations.

And our contention is the owner has every right to litigate all constitutional issues.

There is no question about that, it’s a matter of timing and when.

Should an owner be allowed to come in and allege that a complaint constitutes a taking on conclusory facts, where the zoning that’s apparently allowed would be about one unit per acre?

E. Clement Shute, Jr.:

Frustrate the normal planning processes and carry that matter to trial.

Thurgood Marshall:

Mr. Shute has the — which it — as of right now, can the appellants apply for a master plan (Voice Overlap) —

E. Clement Shute, Jr.:

Yes, Your Honor.

Thurgood Marshall:

They — they can do that right now?

E. Clement Shute, Jr.:

They could have throughout this proceeding.

Thurgood Marshall:

And regardless of what happens in this case?

E. Clement Shute, Jr.:

Yes, Your Honor.

And if the — the —

Thurgood Marshall:

Well, what are we here for?

E. Clement Shute, Jr.:

It might — I — I believe the Court maybe interested in some of the issues raised by the complaint, but we respectfully submit that most of those issues really aren’t raised in this case.

John Paul Stevens:

Mr. Shute, just to get one thing in — through my head.

Is it correct that the only action that the city has taken with respect to the — the appellant’s property is that they passed this ordinance?

E. Clement Shute, Jr.:

They passed the ordinance and also, Your Honor, there was the imminent domain action, which was filed and terminated.

John Paul Stevens:

But that’s — that’s all over.

That’s — that’s something that — that’s aborted completely?

E. Clement Shute, Jr.:

That’s correct.

John Paul Stevens:

So, the only legal — only — only significant, only step that has any legal effect that’s outstanding now on their property is the ordinance itself and so the question really is whether the ordinance on its face, constitutes a taking, is that?

E. Clement Shute, Jr.:

That’s correct.

John Paul Stevens:

And that’s what the Supreme Court said, “If you read the ordinance the way we read it,” the California Supreme Court, they’re still free to build some houses if they file appropriate plan?

E. Clement Shute, Jr.:

That’s correct, Your Honor.

The facial validity of the ordinance is an issue and the ruling of the California court was that the zoning ordinance satisfied substantive due process test, did not encroach on — on private property rights, because of the available use —

Potter Stewart:

Well, I suppose —

E. Clement Shute, Jr.:

— and further observes that it could —

Potter Stewart:

— I suppose you would concede that if a zoning ordinance said you can build one house in 5 acres of real estate, in the center of Manhattan Island that would basically be a taking, because everybody knows that’s economically impossible.

E. Clement Shute, Jr.:

I think that’s correct, Your Honor.

And I —

Potter Stewart:

In the complaint and the — the allegation in this complaint is that this zoning ordinance is equivalent of that, as I understand it.

E. Clement Shute, Jr.:

With the exception that the character of the area —

Potter Stewart:

And if that doesn’t require evidence to find out if it is or isn’t?

E. Clement Shute, Jr.:

I respectfully submit, no, Your Honor, because the allegations of the complaint themselves indicate the nature of this land, the high values of the land for residential use.

E. Clement Shute, Jr.:

one acre zoning is not uncommon.

This — what really constitutes an attempt to thwart the normal process and litigate right at the front of the process, rather than going through the planned process —

Potter Stewart:

Well, you would concede I suppose, if the City of Tiburon had — had taken this property and just moved in and turned it into a public park, that there would’ve been an action for a so-called, “inverse condemnation”.

E. Clement Shute, Jr.:

Well, that would have been you’re a classic case —

Potter Stewart:

Would you concede that?

E. Clement Shute, Jr.:

— of physical invasion and that requires compensation, but there’s a world of difference between that kind of —

Potter Stewart:

Well, the — the complaint in this case says there isn’t any difference.

E. Clement Shute, Jr.:

But those are the —

Potter Stewart:

And isn’t that a matter then for evidence.

E. Clement Shute, Jr.:

To the extent the complaint equates this zoning with a physical use, it’s really making a legal argument and not — not a factual argument and that is why we think —

Potter Stewart:

Well, what if the zoning ordinances the City of New York said, if you own — said to an owner of 5 acres of unimproved land, you can build exactly one residence on there, in the middle of New York.

And he filed a complaint saying this zoning ordinance while it purports to simply be a 5-acre residential zoning actually, as the effect of taking my property, because I can’t use it for that purpose and neither — and I can’t sell it for that purpose.

Now, would that be a good a — a complaint to which a demurrer should be sustained?

E. Clement Shute, Jr.:

I think in a circumstance such as that, it might be appropriate to go beyond the demurrer stage and that is why I’ve concentrated on the facts, because I don’t believe that that can be fairly said of the facts of this case.

Warren E. Burger:

Mr. Kanner, a while ago — Mr. Justice White, put a question to your friend and summarized what the highest court of California has said namely that is — is clear said the Supreme Court of California that they can build from one to five houses on this property.

I believe Mr. Kanner agreed that that’s what the Court had held do — if you have any comment on that?

E. Clement Shute, Jr.:

That is what the Court held and it’s our position that the — that establishes the facial validity of the ordinance by indicating a substantial use and the potential for up to five homes.

The city’s zoning ordinance contemplates a planning review process — who — process which is never been involved.

Warren E. Burger:

Under California law, if — if there had been no appeal taken here, could the — the owners have applied them for five buildings on the 5 acres?

E. Clement Shute, Jr.:

Yes, Your Honor.

Warren E. Burger:

And if the decision was thought to be arbitrary in the sense that it was done for subsurface purpose of keeping this property completely open, destroying its value as he said, would that be within the reach of litigation in California courts?

E. Clement Shute, Jr.:

Yes, it would, Your Honor, because following the exhaustion of administrative remedies, all issues tendered in that proceeding would be before a court for review.

Now, we might have a quarrel over the remedy, but the issues could be litigated.

William H. Rehnquist:

Do you — you say, basically the validity of the Supreme Court of California’s judgment can be sustained on the exhaustion of I’d mean, the failure to exhaust administrative remedies regardless of whether or not, the complaint should’ve — could’ve been demurred to on the merits so to speaks, saying there was no taking?

E. Clement Shute, Jr.:

That’s correct, Your Honor.

The case could’ve been resolved on the doctrine of exhaustion of administrative ordinance.

William H. Rehnquist:

Do you think it was?

E. Clement Shute, Jr.:

I think it implicitly was because the Court construed the facial validity of the ordinance which under California law, can be attacked —

Byron R. White:

Now —

E. Clement Shute, Jr.:

— by declaratory relief.

Byron R. White:

— we say as applied issue.

E. Clement Shute, Jr.:

And did not reach, the as applied issue, which is an aspect of exhaustion.

If California courts saying, “We will not do that until there has been exhaustion, we are there — if we do it, we are missing the sifting and refinement and elimination of issues which occurred.

Byron R. White:

So, say — if you say — if – if owner applies for — files this plan and says, “I want to build five houses.”

And the city says, “Awfully, sorry, but you can only build one.”

He — he could then say, “Well, this ordinance has being applied, is unconstitutional

E. Clement Shute, Jr.:

Yes.

Byron R. White:

— because this is economically impossible.”

E. Clement Shute, Jr.:

That’s correct.

So, a large part of our position as I’ve indicated before is to try to protect the sanctity of the city’s planning zoning process.

And I would point out that the facts to the case also indicate that a significant portion of the City of Tiburon was zoned in this manner, with the same RPD-1 zoning.

So we are not talking about a circumstance where appellant’s property was the sole property put into the zoning district.

And in terms of the substantive validity of the ordinance in addition to the notion of reasonable use remaining to the property owner, there is a classic, we submit, instance of reciprocity here.

The appellant’s properties would benefit by the grading controls and the density restrictions and all as they would be applied to neighboring property.

William H. Rehnquist:

Was the ordinance passed before or after the appellants acquired their property?

E. Clement Shute, Jr.:

It was required — passed after they acquired the property.

Byron R. White:

What is the nature zone prior to that time?

E. Clement Shute, Jr.:

Your Honor, the zoning prior to that time is not alleged in the complaint and the best I can do is to go somewhat outside the record and point out and then one of the amici briefs said the conservation foundation they included as an appendix.

The prior zoning which was one acre zoning RO-1.

William H. Rehnquist:

Which would’ve automatically entitled them to build one house per acre or five houses on these 5-acres?

E. Clement Shute, Jr.:

Well, yes, Your Honor.

Except even at that time in California, there was the Subdivision Map Act, which requires going through an approval process, certain findings have to be made in order disallow the maximum density and there is the California Environmental Quality Act, which was in effect to that time.

So, it would not have been automatic even then that they would’ve received five, but their expectations certainly cannot have been much damaged by the change in the zoning.

Byron R. White:

But do you think the California Supreme Court has held in this opinion that this ordinance is valid even if the city will permit only one house on this line?

E. Clement Shute, Jr.:

Following completion of the administrative —

Byron R. White:

Well —

E. Clement Shute, Jr.:

process?

I don’t think the California Court had an opinion on that question because —

Byron R. White:

Well, that — it seemed to say that the ordinance is valid because it will allow one to five, which seems to include that it’s valid even if — even if the city allows only one house (Voice Overlap) —

E. Clement Shute, Jr.:

Well, I think — it — more, it includes the idea that it might allow up to five and looking it at that way, it would be valid and we don’t know until the process is completed.

E. Clement Shute, Jr.:

And what evidence would come forward in the administrative process would dictate the Court’s response to subsequent litigation.

Byron R. White:

Well, I take that the city’s position is that however, since it passed this ordinance said it — that the ordinance would be valid, even if it permitted only one house on this land.

E. Clement Shute, Jr.:

Well, Your Honor, I would think that the city would be astute and fair enough to realize that if the good case was made in the planning process, that one home was totally uneconomic that they would allow additional homes.

I think that’s part of the reason and benefit of — of (Voice Overlap) letting —

Byron R. White:

You’d rather —

E. Clement Shute, Jr.:

— this process go forward.

Byron R. White:

You’d rather decide maybe to take the land and pay for it?

E. Clement Shute, Jr.:

I think we are through with that, but possibly, yes.

I just like to mention briefly this — this remedy question which has been much briefed.

If the Court agrees with our position that this ordinance is valid on — on its face or this case could be considered one were administrative remedy should be exhausted and of course, the question of what remedy to invoke following an unconstitutional action or an encroachment on private property rights would not be presented.

But the concept of the remedy to be applied to regulation is really based on the need to accommodate two very strong powers.

One is the power to regulate which this Court has observed to be one of the list limitable powers of Government.

In fact, local zoning authority has been observed to be about the most essential power held by local Government.

And where that power comes into conflict with protected property rights, then there are no absolutes involved.

What is necessary is to engage in the balancing.

And we submit that the proper balance to be struck in that circumstance is to invalidate the offending measure that preserves that police power as an essential power and it provides fairness to the property owner in the sense that a property owner normally does not commence development procedure or process with the idea of having the city and buying his property.

He commences that process with the idea of commencing some development.Invalidation allows him to go forward with some form of development.

Also under California law, declaratory relief and mandate have priority on the court calendar.

So it’s much faster to receive a judicial resolution of these kinds of conflicts to declaratory relief and mandamus than it is to go inverse condemnation which can stick around on a trial calendar for a good long time.

So, we think it’s an appropriate constitutional balance between these two strong interest and we submit that this Court has recognized that essentially, the payment of compensation or money damages is a legislative choice.

And that is an aspect to the separation of powers since legislatures under our structure of Government are the ones that appropriate and expend public funds.

And in this cases which don’t have to do with the police power, U.S. Trust versus New Jersey, involving the impairment of bondholders’ rights.

Perhaps somewhat a kin to interference with investment-backed expectations as discussed in Penn Central.

The Court was careful to note that while invalidating New Jersey’s repeal, the State of New Jersey was not frustrated in trying to carryout its new public policy.

It could invoke its power of eminent domain and compensate effective property interest and proceed with its new policy.

The critical point there is that it was a matter of legislative choice, not court decree, that compensation would be paid.

So it was reserved to the legislature as a legislative matter.

And finally, I would notice, this has been noted in cases involving the Civil Rights Act, the prospectively chilling effect that monetary damages would have in circumstances where there cannot be easily anticipated.

Where to be inadvertent —

William H. Rehnquist:

Well, does — does that mean that any claim — any cause of action for monitory damages is suspect, because it has a, “chilling effect”?

E. Clement Shute, Jr.:

I think, Your Honor, in the circumstance such as these zoning ordinances where you’re dealing with a regulatory act that —

William H. Rehnquist:

Well, all state actions in effect, are regulatory actions, aren’t they?

E. Clement Shute, Jr.:

I think that where a State moves or local agency moves by eminent domain, it’s not a regulatory act.

That isn’t — that is the exercise of sort of proprietary direct governmental powers, not adjusting the public good, but moving to the benefit of Government.

I don’t think a physical invasion of property by Government is necessarily a — a regulatory act.

So, ours — our point is that in the area of pure regulation which is intending to adjust the public good whether it been in environmental law or some other area, that the approached should be that if it goes too far under certain circumstances, it would be an invalid act.

Precisely, because it’s unaccompanied by the just compensation that would be necessary to sustain an invasion of guaranteed property rights.

Thurgood Marshall:

I have trouble with your eminent domain being legislative and attributable.I thought it was judicial?

E. Clement Shute, Jr.:

Well, I think that the — that the decision to proceed in eminent domain is a legislative decision and then the process of determining —

Thurgood Marshall:

(Voice Overlap) piece of paper.

E. Clement Shute, Jr.:

That’s correct and of course the —

Thurgood Marshall:

Therefore — then that’s the end of the legislative (Inaudible)

E. Clement Shute, Jr.:

But the key aspect is that the choice to expend public funds by beginning the proceedings starts with the legislative body.

The Court has no questions, I respect —

Byron R. White:

Well, let me, you say there was a — the question was reduced to a facial attack here.

Actually, no one — no one claimed that this ordinance is really invalid on its face in the sense that it couldn’t ever be applied to any piece of property?

The question was —

E. Clement Shute, Jr.:

Well —

Byron R. White:

— whether the ordinance was unconstitutional as applied to this piece of property?

E. Clement Shute, Jr.:

That’s correct, but still the ordinance says —

Byron R. White:

I know, but let’s assume the judgment — let’s assume the Supreme Court had — had ruled in — in the plaintiff’s saver.

It certainly would have invalidated the ordinance and has — it wouldn’t — wouldn’t have meant that the ordinance was invalid as applied to a lot of other properties, would it?

E. Clement Shute, Jr.:

That’s correct.

Unless the —

Byron R. White:

It’s just about this piece of — just about this piece — about this piece of property.

And as it stands now — as it stands now, the Supreme Court has said that it’s — that this ordinance does not amount — is not invalid even though that — or because the plaintiff can build one to five houses on his property.

And so, who’s going to — it could be anybody — anybody who reads this would think that the ordinance would be valid even if the city allows only one house?

E. Clement Shute, Jr.:

Well, Your Honor, I respectfully disagree I think that what the Court was saying is a guaranteed minimum of one and anything above that, the city might grant in taking that as a totality.

We think this ordinance is not invalid.

Why don’t you folks go to the planning department?

Byron R. White:

And —

William H. Rehnquist:

Well, did — did the Court say that in — that that was what troubled me.

Did the Court say that in so many words, I have the same impression as my brother Stewart that the plaintiffs alleged that this was a taking because as applied to their land, because very possibly, they could only build one house and that — that was simply destroying that value a demurrer was sustained.

And then, the Supreme Court of California said, “Well, the ordinance will allow one to five houses.”

But it — it didn’t seem to me it relied on exhaustion of administrative remedies.

E. Clement Shute, Jr.:

I don’t think that the — in fact, I know the Court’s opinion does not discuss administrative remedies, but I think implicit in the Court’s ruling was the notion of, “We will take today the facial validity of this ordinance.”

Byron R. White:

But the only —

E. Clement Shute, Jr.:

And we will not anticipate how many units might be approved because that is something which would require the completion of its planning process.

Byron R. White:

But if you were a prospective buyer and read or if — if somebody came around to ask you to buy this piece of property and you said, say “Well, what can I use it for?”

When you can be to put one to either have one house or five houses, up to five houses, but maybe only one?

Well, is it — and you said — well, how I’m going to find out?

Well, somebody is going to have to go through this procedure.

So, only a developer can — only the one, who really wants to develop, but can find — can find out whether — it certainly isn’t a very marketable piece of property in its present condition, is it?

E. Clement Shute, Jr.:

Well, I think —

Byron R. White:

Within under the zoning ordinance?

E. Clement Shute, Jr.:

There just —

Byron R. White:

Until somebody goes through this — this operation and finds out whether you can build five or four or three?

E. Clement Shute, Jr.:

That’s why — that’s why I think the allegations of the complaint are so important.

They alleged that this land has the highest residential land, virtually of any land in the State.

The prospective purchaser looks at that and sees the possibility of up to one unit per acre.

I would think that looks fairly attractive.

Byron R. White:

Up to one unit?

Yes, but [Laughs] accepted it, you may only have one.

He — he may have one — one house on 5 acres.

Warren E. Burger:

Well, as I read the California Supreme Court’s opinion again, the very point that Mr. Justice White called attention to before.

They review the statements of the appellant here as claiming it deprived of the land over — landowner of all reasonable use of his property and then the Court said this, “The ordinance before us had no such effect.”

According to the wording of the ordinance, the zoning allows plaintiffs to build between one and five residences on their property.

So, the perspective purchaser would know that he could build one for the Supreme Court of California having said so and that it has an administrative process for a modification of the zoning would possibly more?

E. Clement Shute, Jr.:

That’s correct, Your Honor.

In fact, not only this planning process, but a modification of the zoning would always be possible too.

E. Clement Shute, Jr.:

And I think that given the — the fake — the facts of the complaint, the —

Byron R. White:

Let me ask you this — let me ask you this.

Suppose — suppose, this property were put on the market under this decree and let’s assume that you get an offer, X, the highest off you get as X.

Now, let’s suppose that instead of — let’s suppose that the property was — was subject not to this one to five restriction, but that it was perfectly clear you could build five?

And then you put it on the market, you think you can get a higher price for it?

E. Clement Shute, Jr.:

I don’t dispute that Your Honor, but I think —

Byron R. White:

It would be how many X?

10 X or —

E. Clement Shute, Jr.:

I’m not in an appraiser and a land expert.

Byron R. White:

You may not — well, that’s it.

That’s really what they — that’s what the complaint is all about here, isn’t it?

E. Clement Shute, Jr.:

That’s true, but I think the — the regulatory authority is entitled to say, “Here’s a piece of land with many variables.

There are hazard conditions there.

There are possible offsite impacts and we can’t know in advance precisely how much densities should be allowed, so a range is provided.”

John Paul Stevens:

Mr. Shute —

Warren E. Burger:

And so what they are expected to do is apply for the five before the complaint, is that (Voice Overlap) —

E. Clement Shute, Jr.:

That’s — that is correct, Your Honor.

John Paul Stevens:

There’d been something like 29 or 30 briefs filed in this case, how many of them do you think, I have to read to understand the issue?

[Laughter]

E. Clement Shute, Jr.:

Of course, just my brief, Your Honor.

Thank you.

Warren E. Burger:

Mr. Kanner?

Gideon Kanner:

May it please the Court.

Most remarkable argument, this is a case in which the demurrer was sustained.

They’re arguing rise to traditional Anglo-American issue of pure law.

And yet, virtually, all we have been arguing about this facts.

Warren E. Burger:

Well, that’s perhaps because of the way you undertook to set this litigation in motion, instead of asking for what is provided under California — under the city’s ordinance, an opportunity to get five sites and you passed that opportunity and plunged right in to the total litigation.

Gideon Kanner:

Well, may I respectfully point up and call to the Court’s attention the basic American seminal case, Euclid versus Ambler, whereat 272 U.S. 386.

That very issue was presented.

The Court said, “A motion was made in the court below to dismiss the bill on the grounds that because the complainant had made no effort to obtain a building permit or applied to the Zoning Board of Appeals for relief, as it might have done under the terms of the ordinance, the suit was premature.”

Gideon Kanner:

The motion was properly overruled.

The effect of the allegations to the bill is that the ordinance on its own force operates greatly to reduce the value of appellee’s land and destroy their marketability for industrial, commercial and residential uses.”

I won’t go on to the quotation.

We were and still are relying on that and it seems to us that the Court would have to overrule not only Nectow versus Cambridge, but Euclid as well, to deprive ourselves of an opportunity to rely on that, what was until now, a clear principle of law.

May I touch on the — on just of a couple of facts?

Mr. Chief Justice, I — I wanted to make very clear that in responding to your question, sir, I intended to indicate that even one — one house cannot be built because of the prohibit of cost of our offsite improvements, that is a large 5-acre parcel on a ridge and in order to prepare it and provide access to it, utilities and so on, it would be prohibited.

Now, as to the — the question also, Mr. Chief Justice, you commented on the California Supreme Court’s opinion as to what they did decide.

May I respectfully call your attention to page 9 in the appendix that a jurisdictional statement where they tell us as to that first part of the opinion.

In HFH Ltd., we specifically noted that, “This case does not present and we therefore do not decide the question of entitlement to compensation in the event a zoning regulation forbade substantially all,” that’s emphasized, “substantially all use of a land in question, we leave that question for another day.”

That was the HFH quotation.

They now go on and say, “We now reached that issue.

They did reach that issue as to what happens when substantially all use of his owned land is destroyed.”

So I respectfully disagree with my colleague and I urge the Court to consider that passage because there, the California Supreme Court tells us expressly what they did reach and which they did decide.

Byron R. White:

(Voice Overlap) that’s — that’s — they — they were there talking about whether you could get damages and —

Gideon Kanner:

That’s right.

Byron R. White:

I — as I read — as I read that — the opinion it’s on the assumption there was a taking, can you get a — can you get damages or are you limited to do an injunction.

Gideon Kanner:

Well —

Byron R. White:

And they reached that issue and we don’t — and if we agree there is a taking here, I suppose we don’t even reach this part of the case.

Gideon Kanner:

Well, but yet, that was the — that is what made Agins versus Tiburon the landmark California case.

Byron R. White:

What maybe —

Gideon Kanner:

So we now wind up and —

Byron R. White:

— maybe — maybe but you can’t — but we don’t do our — we don’t —

Gideon Kanner:

We wind up, Your Honor and I’m —

Byron R. White:

Well, you can’t cram issues —

Gideon Kanner:

I’m sorry.

Byron R. White:

— down our throat because we don’t need to [Laughter] — that we don’t need to decide.

Gideon Kanner:

That would be beyond my meager powers, but may I point out, Your Honor, that that’s — that leads us however, into a very anomalous position whereby as counsel says, “The California Supreme Court had no jurisdiction to even reach all these stuff and yet they did and yet they decided.”

Can you imagine a California lawyer walking into a trial court and saying, “Pay no attention to what our Supreme Court said, they had no jurisdiction to do it.”

And manifestly, the Court intended to decide this, did decide it and told us in so many words that they did decide it.

The —

Warren E. Burger:

Do you think you can still apply if — if we affirmed here hypothetically, that you can go back and apply for five sites?

Gideon Kanner:

I — I don’t know, Your Honor.

I’m an appellate lawyer and I — I don’t deal with that —

Warren E. Burger:

(Voice Overlap) —

Gideon Kanner:

— I suppose so I see no reason why not.

Thurgood Marshall:

I don’t think (Voice Overlap) —

Warren E. Burger:

Does this —

Thurgood Marshall:

You could apply?

Gideon Kanner:

Oh, I’m sure you can apply whether it’ll be granted is another story.

Thank you, Your Honor.

Warren E. Burger:

Thank you gentlemen.

The case is submitted.

We’ll hear arguments next in Carrey against —