GDB Obtains California Court of Appeal Opinion in Favor of Airport Authority in Inverse Condemnation Case

Aviation Alert (October 2017)

On September 26, 2017, the California Court of Appeal, Fourth Appellate District, Division One issued a currently unpublished decision of significant interest to Airport Land Use Commissions (ALUCs) throughout California.  In Dryden Oaks, LLC et al. v. San Diego County Regional Airport Authority et al., Court of Appeal No. D069161, the Court concluded that the adoption of an Airport Land Use Compatibility Plan (ALUCP) does not amount to a government “taking” of private property, even if an ALUCP decreases property values by designating property as within a Safety Zone that carries specific limiting recommendations for compatible land uses. 

The Plaintiffs/Appellants are Dryden Oaks, LLC et al. (Dryden), owners of two industrial/office properties directly adjacent to the McClellan-Palomar Airport (Airport) in the City of Carlsbad, California (City).  Dryden sued the County of San Diego (County), which owns and operates the Airport, as well as the San Diego County Regional Airport Authority (Authority), which serves as the ALUC for the Airport.  Gatzke Dillon & Ballance LLP (GDB) successfully represented the Authority in the litigation, including the appeal. 

In this case, Dryden argued that its private property was “taken” for public use, without compensation, because the value of the property was diminished by the Authority’s adoption of the ALUCP in 2010.  Specifically, Dryden claimed that because the ALUCP designated the property as being within the Runway Protection Zone (RPZ), the City refused to renew a permit for one of his lots.  In separate causes of action, Dryden also alleged unreasonable “pre-condemnation” delay and conduct against the Authority and County. 

The trial court had granted the Authority’s motion for summary judgment on the grounds the adoption of the 2010 ALUCP did not constitute a taking giving rise to inverse condemnation liability.  The Court of Appeal affirmed the judgment, for the reasons summarized below. 

The ALUCP was not a “final” land use determination that required compensation 

As to its inverse condemnation claims, Dryden contended that its economic expectations for the properties were diminished by the Authority’s adoption of the ALUCP.  Under California and Federal law, there are discrete categories of government conduct that may constitute a “taking” of private property, and thus require compensation.  The classic taking requiring compensation is a “physical” taking – a direct government physical invasion of private property.  In addition, courts have required compensation for “regulatory” takings, if government regulations of private property are sufficiently onerous and specified requirements are met.  Here, Dryden argued that the adoption of the ALUCP constituted a “disguised” regulatory taking of his property.  However, the Authority responded – and the Court agreed – that there is no established category for a “disguised” regulatory taking.  As a result, the Court analyzed Dryden’s claim under the established takings categories.   

The Court of Appeal held that Dryden did not establish a “taking” under any of the established takings categories.  An important first step required in asserting any regulatory taking is a final and authoritative determination of the type and intensity of development legally permitted on the subject property.  The Court of Appeal held that the adoption of the ALUCP was not a sufficiently final land use determination to support a takings claim.   

To reach its holding, the Court analyzed the State Aeronautics Act (Pub. Util. Code, §§21001 et seq.) and the role of ALUCs and ALUCPs in airport planning.  The State Aeronautics Act requires each county in which an airport is located to establish a seven-member ALUC, which occupies an advisory role to “assist local agencies in ensuring compatible land uses in the vicinity of” airports.  (Id., §21674, subd. (a), see id., §21670.)  Here, the Authority, as ALUC, is responsible for the preparation, adoption, and amendment of ALUCPs in the County.  (§21670.3, subd. (a).)  ALUCPs also serve to assist local agencies in ensuring compatible land uses in the vicinity of airports.  (Id., §21674, subd. (a).)  Like a general plan, the ALUCP is an overarching planning document/recommendation, that is subject to variance by the City.  Significantly, ALUCPs may be overruled by local agencies, which have ultimate authority and responsibility for zoning and land use determinations.  (Id., §§21676.)   

Here, Dryden’s claims were based on the fact that the City denied development plans for Dryden’s property.  Because the Authority did not have the ability to make the final land use determination at issue in this case, Dryden could not establish a takings claim against the Authority.  As evidence of this, the Court noted that the City had twice overruled the Authority with respect to Dryden’s property.  Specifically, in the course of Dryden’s ownership of the two lots, Dryden twice overcame the Authority’s findings that proposed development was inconsistent with prior versions of the ALUCP.  As such, Dryden obtained permits from the City overruling the Authority and allowing development of the lots.  As a result, summary judgment in favor of the Authority was proper – the Authority does not have final say on the development of Dryden’s property.  For similar reasons, the Court also upheld summary judgment in favor of the County, and found that the County could not be indirectly liable for the Authority’s adoption of the ALUCP.  In short, the adoption of the ALUCP did not “take” Dryden’s property, and no compensation is required. 

The Authority and County did not engage in unreasonable “pre-condemnation” conduct 

Dryden also claimed that it was entitled to compensation because the Authority and County engaged in unreasonable “pre-condemnation” conduct.  As background, the California Supreme Court has held that the “just compensation” requirement of the Takings Clause is also triggered where, prior to a taking, the condemnor acts unreasonably in issuing precondemnation statements, either by excessively delaying eminent domain action or by other oppressive conduct.  (Klopping v. City of Whittier (1972) 8 Cal.3d 39.)  Here, Dryden claimed that the 2010 ALUCP was a public announcement of an intent to condemn its property, which allegedly precluded development and caused loss of rental income.   

The Court of Appeal upheld the trial court’s dismissal of the pre-condemnation causes of action, based upon its conclusion Dryden did not show that the Authority made any public announcement of an intent to acquire Dryden’s lots.  The Court held that the ALUCP did not announce an “intent to condemn.”  Dryden cited various provisions of the ALUCP, but the Court found that the provisions do not contain any statement concerning acquisition of Dryden’s property.  Even though the ALUCP contains a policy statement of the Authority’s preference that the Airport’s owner acquire property within Safety Zone 1, it does not direct such action.  In fact, the ALUCP recognizes that acquisition is not contemplated in all circumstances, because it identifies acceptable uses of property “[i]n instances where the affected property is privately owned and the airport owner does not intend to acquire property interests.”  Accordingly, the ALUCP is a “far cry” from a clear announcement of future condemnation.   

Conclusion
 

Dryden
is a significant victory for ALUCs throughout California to the extent it makes clear an ALUC’s adoption of an ALUCP does not constitute the sort of final land use determination necessary to support a taking claim. Further, in upholding the 2010 ALUCP, the Dryden opinion promotes the orderly development of California airports and surrounding areas.  As argued by the Authority and GDB, the Court likened ALUCPs to general land use plans, and noted that the process of community planning would “grind to a halt” if landowners affected by such planning documents were entitled to compensation through inverse condemnation “taking” lawsuits.

GDB’s lawyers are available to assist in addressing any questions you may have about this important development in airport land use compatibility planning. For further information, please contact GDB at 760.431.9501. By Lori D. Ballance, Stephen F. Tee, and Michael P. Masterson for GDB. 

[This E-Alert is intended to generally inform readers about current issues of importance in the field of aviation law. This E-Alert does not constitute legal advice and no attorney-client relationship is created by viewing or responding to this E-Alert. Legal counsel should be sought for answers to specific legal questions.]