Rethinking the facial takings claim.

• Author: Zhou, David

In 1979, Santa Barbara County, California enacted a rent-control ordinance to regulate the fees levied by owners of mobile home parks on their tenants. Housing prices later climbed dramatically throughout the state, but due to the ordinance "the rents charged by the Park Owners did not keep pace with this increase." (1) Three co-owners of a mobile home park filed a lawsuit in federal court that included a facial takings claim under the Fifth Amendment. (2) In Guggenheim v. City of Goleta, decided last year, the U.S. Court of Appeals for the Ninth Circuit accepted the facial takings claim and, reaching the merits, ruled in favor of the plaintiffs. (3)

The opinion endorsed the shaky proposition that there is a meaningful difference between facial and as-applied regulatory takings claims. A facial challenge alleges that the disputed law is "inherently unconstitutional, regardless of factual circumstances of a particular case." (4) In theory, the factual situation of the specific plaintiff is irrelevant in a facial claim. In practice, almost every takings challenge requires a fact-driven inquiry: to decide if a government has "taken" private property, a court must ask whether the challenged ordinance "denies an owner economically viable use of his land." (5) This question is hard to answer without inquiring into particularized facts. Indeed, the Guggenheim court used the fact-intensive framework established in Penn Central Transportation Co. v. New York City (6) to assess the supposedly facial takings claim. (7)

The blurry distinction between facial and as-applied takings challenges is problematic. Federal courts are more inclined to hear facial regulatory takings claims thanks to more lenient ripeness rules. (8) Using the "facial" label, an unhappy landowner can bring a federal lawsuit without waiting for the local government to reach a final decision on how the regulation will actually affect the plaintiff's property. (9) And in one circuit the plaintiff does not even need to exhaust all his state law claims before going to federal court. (10)

Most troubling, the Guggenheim decision is evidence that some federal courts are willing to rule on the merits in these routine land disputes. Unfortunately, federal courts are ill suited to adjudicate takings cases. With most constitutional claims, if a court finds that a law violates the Constitution, the court invalidates the offending portion of the statute. Takings claims, however, have two steps: once the court determines that the government effected a taking, the court then must decide the amount of money that constitutes "just compensation" to the landowner. (11) On the compensation question, federal courts are at a clear comparative disadvantage relative to local governments and state courts. Federal courts are often geographically distant from the land at issue, and federal judges are not electorally accountable to landowners. (12) Not surprisingly, the federal courts historically have refused to interfere with the land-use decisions of local governments or to second-guess the rulings of state courts. This long-standing division of labor will be upended if disgruntled landowners can skip local processes and move quickly to federal courts with facial takings claims.

To avoid this result, this Comment urges the elimination of the facial regulatory takings claim, with two narrow caveats. (13) The federal courts should only recognize as-applied regulatory takings challenges, a decision that would force landowners to wait for the final decisions of local governments before going to the courts. Because regulatory takings determinations are grounded in facts, Part I argues that the as-applied label is more appropriate than a facial designation. Part II explains how the just-compensation question distinguishes facial takings claims from other facial challenges and why the answer is best supplied by local governments and courts.

1. FACT-BASED INQUIRIES MASQUERADING AS "FACIAL" TAKINGS CLAIMS

   The distinction between facial and as-applied challenges is familiar to students of constitutional law. The plaintiff who brings a facial challenge to the validity of a law argues that the law cannot be enforced against anyone in a constitutional manner. (14) The as-applied plaintiff makes the narrower assertion that the enforcement against him in particular violates the Constitution. (15) Unlike a facial challenge, an as-applied case requires a factual inquiry into the plaintiff's specific situation. (16)

   This distinction has collapsed with regard to takings claims. Facial takings claims now appear to be as fact-reliant as the as-applied takings challenges. This Part will discuss two recent developments that have, in effect, folded the claims together: the Supreme Court's elimination of the "substantially advances" test for takings and the Ninth Circuit's decision to apply Penn Central to a facial taking claim. The logical extension of these rulings is to consider all regulatory takings claims to be as-applied.

   1. The Elimination of "Substantially Advances" as a Takings Test

      For twenty-five years, plaintiffs had two independent ways to prove a facial taking. In Agins v. City of Tiburon, the Supreme Court announced that a land regulation "effects a taking if the ordinance does not substantially advance legitimate state interests, or denies an owner economically viable use of his land." (17) The lower courts interpreted Agins to mean that proof of either element is sufficient to support a takings finding. (18)

      In 2005's Lingle v. Chevron U.S.A. Inc., however, a unanimous Court eliminated the "substantially advances" test announced in Agins. (19) The Court explained that the question of whether a regulation "substantially advances" a government interest too closely resembled a due process inquiry (20) that asked whether the government acted arbitrarily or irrationally in enacting a law. (21) The Court decided that the "substantially advances" portion of Agins is "not a takings[] test, and ... it has no proper place in our takings jurisprudence." (22)

      The demise of the "substantially advances" test should have doomed the facial takings claim. (23) To prove a taking under the truncated Agins test, the plaintiff must show that the regulation prevents him from using his property in an economically viable fashion. While some commentators still assume that Agins applies to facial claims, (24) they fail to recognize that the Agins land-use test requires the presentation of plaintiff-specific facts at trial. The "owner" must demonstrate the regulation's effect on "his land." (25)...