Payment Ordered in Land-Use Curbs : High Court Upholds Zoning but Makes Governments Liable for Compensation

The Supreme Court, in a decision that may profoundly alter the power of government officials to control land use, ruled Tuesday that property owners must be paid compensation if zoning boards or other agencies impose rules that prevent or drastically restrict them from developing their land.

The 6-3 vote, on a lawsuit filed by a Glendale church against Los Angeles County, overturned a California Supreme Court ruling that had largely protected local governments from suits for compensation by disgruntled land owners and developers.

Although upholding the power of state and local governments to impose zoning restrictions and placing heavy burdens of proof on property owners who challenge such curbs, the high court served notice that if government officials go too far they may find themselves compelled to pay compensation to property owners.

New Legal Controversies

As a result, the decision is likely not only to spawn extensive new legal controversies but to force a reevaluation of government actions in such areas as coastal management, flood plain restrictions, open space development and the common practice of requiring real estate developers to donate land for parks or other public uses.

“This is the biggest land-use decision from the Supreme Court since 1926,” when the court issued the landmark ruling that upheld the concept of zoning, said a jubilant Gus Bauman, counsel for the National Assn. of Home Builders.

“It clearly will raise the stakes and the costs of government regulation,” said Benna Ruth Solomon, counsel for the National League of Cities, the National Assn. of Counties and other government groups. “Even if a local government proceeds carefully and regulates in good faith, it now may be second guessed by a court and found liable for damages,” she said.

The decision was issued at a time when tensions between builders and local officials have been steadily increasing, especially in California. Government agencies are under increasing political pressure to slow the pace and scope of private development. In response, attorneys for builders have increasingly turned to the courts to challenge land-use restrictions.

The legal challenges have focused on a provision in the Fifth Amendment to the Constitution that says in part that “private property (shall not) be taken for public use, without just compensation.”

Tuesday’s ruling was grounded in that provision.

Forging a coalition of some of the court’s most liberal and conservative members, Chief Justice William H. Rehnquist declared in the majority opinion that “government action that works a taking of property rights necessarily implicates the constitutional obligation to pay just compensation.”

The Fifth Amendment, he added, “is designed to bar government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”

Voting with Rehnquist were Justices William J. Brennan Jr., Byron R. White, Thurgood Marshall, Lewis F. Powell Jr. and Antonin Scalia.

Even if a municipality later revokes a restrictive ordinance, the property owner deserves payment for a “temporary taking” of his property, the high court said.

Rehnquist stressed that property owners still must prove in court that a land-use regulation took away the use of their property. The chief justice noted also that compensation is not required “in the case of normal delays” in gaining building permits or zoning changes.

Justices John Paul Stevens, Harry A. Blackmun and Sandra Day O’Connor dissented. Stevens said that the majority had “fired a loose cannon” that calls into question all varieties of zoning regulations and one that will spawn “a great deal of . . . unproductive litigation.”

Further litigation is likely in part because the line between reasonable government restrictions and unconstitutional taking of property remains unclear, lawyers said after reading the decision. The ultimate impact of Tuesday’s decision will depend on how that line is defined in future cases.

The court is expected to decide this month, for example, whether the California Coastal Commission may require homeowners to open up their beachfronts to the public as a condition of getting a building permit.

At least potentially, however, the decision appears to have altered substantially the potential penalties and rewards for government officials, on the one hand, and land developers on the other.

In 1979, the California Supreme Court under then-Chief Justice Rose Bird said that a property owner who felt he had been denied the right to develop his land could go to court to seek invalidation of the zoning regulation. This would preserve “a degree of freedom in land-use planning” and remove the threat of suits seeking money damages, the state court said.

Critics and supporters of Tuesday’s decision (First Lutheran Church vs. Los Angeles County, 85-1199), although differing on the desirability of the ruling, agreed that the possibility of having to pay substantial compensation is likely to have a substantial impact on the deliberations of officials dealing with land-use issues.

Alan Beals, executive director of the National League of Cities, said that the “chilling prospect of a large and retroactive damage claim . . . will surely intimidate” local officials. Moreover, because the court did not define clearly what constitutes a “taking” of property, Beals said, officials will be forced “into an unfair and costly game of Russian roulette in which we never know what will make the gun go off.”

On the other hand, Michael Berger, the winning attorney in the Los Angeles case, said: “I think this will make planning agencies take seriously the rights of property owners.”

Potentially sweeping as the decision was, the high court did not settle the case before it.

In February, 1978, a flash flood in the Angeles National Forest washed away several buildings on a 21-acre camp owned by the First English Evangelical Lutheran Church of Glendale. Soon after, the Los Angeles County Board of Supervisors declared the area a flood zone and prohibited the church from rebuilding there.

The church filed suit, alleging that the property effectively had been taken from it. Without a hearing, a trial court in Los Angeles dismissed the suit, saying that the only remedy for the church was to seek an invalidation of the flood control ordinance. The state Supreme Court upheld this decision.

In 1986, without a day of court hearings, the case went to the Supreme Court, which Tuesday sent it back to the Los Angeles courts for trial.

“I thrilled that . . . we have finally won the right to go to trial,” Berger, who represented the church, said. “I think it should be clear to a court that the church has no use of their land. If the county wanted a flood control channel . . . they should buy it and pay for it.”

Jack R. White, a Los Angeles lawyer representing the county, said that officials acted in 1979 because of the threat of a future flood, which could wash buildings downstream. Had the county not acted, he noted, it could have been found liable for damages in areas below the canyons.

Rehnquist held out some hope for the county in his opinion, noting that it could seek to prove that its ordinance was justified as a “safety” regulation.