Lambert v. City of San Francisco

Citations: 529 U.S. 1045; 120 S. Ct. 1549; 2000 Daily Journal DAR 3161; 2000 Cal. Daily Op. Serv. 2360; 146 L. Ed. 2d 360; 68 U.S.L.W. 3612; 2000 U.S. LEXIS 2202Docket: No. 99-697

Court: Supreme Court of the United States; March 26, 2000; Federal Supreme Court; Federal Appellate Court

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Justice Scalia, joined by Justices Kennedy and Thomas, dissents regarding the case involving petitioners Claude and Micheline Lambert, who own the Cornell Hotel in San Francisco. The hotel comprises 24 residential units and 34 tourist units. Due to difficulties in renting the residential units, the Lamberts sought a conditional use permit from the San Francisco Planning Commission to convert these units to tourist use. This request fell under two regulations: the San Francisco Planning Code, which restricts significant alterations to tourist hotels without a new conditional use application, and the Residential Hotel Unit Conversion and Demolition Ordinance (HCO), which mandates either a one-to-one replacement of residential units or payment for replacement costs before conversion permits can be issued.

The city conducted appraisals for the replacement costs, determining them to be approximately $600,000, but the petitioners only offered $100,000. The Planning Commission denied the permit application, leading the petitioners to file a lawsuit claiming the replacement fee was unconstitutional based on precedents from Nollan v. California Coastal Commission and Dolan v. City of Tigard. These cases establish that any conditions imposed for permit approval must be directly related to public harm and proportionate to the mitigation required.

The California Court of Appeal upheld the trial court's decision, asserting that the HCO did not influence the Planning Commission's denial, which was based solely on traditional zoning concerns. The court concluded that since no property or funds were taken from the petitioners, there was no basis for examining potential constitutional violations under Nollan and Dolan.

Contrary to the Court of Appeal's assertion, the record indicates that the Planning Commission considered the petitioners' inadequate fee offer and compared it to fees from other hotels that had received similar conversions. The commission found that the petitioners’ proposal did not sufficiently address the loss of housing stock, leading to the conclusion that their application was not comparable to those previously approved. The dissent highlights inconsistencies in the Court of Appeal's reasoning regarding San Francisco's demands and the implications of monetary settlements on zoning concerns.

The court's assertion that the Planning Commission's potential decision to grant a permit upon a $600,000 payment does not equate to a taking is challenged by the notion that the refusal to meet this fee was a significant factor in the commission's decision. The Court of Appeal presented three interpretations of its opinion. First, if taken literally, the court's finding that the fee did not influence the decision misrepresents the record. Second, if the court acknowledged the fee demand as a motivating factor, its failure to apply the precedents established in Nollan and Dolan could imply that the commission's reliance on standard Planning Code criteria was deemed sufficient, despite the fact that such criteria could be invoked to deny permits when applicants refuse to comply with extortionate demands. The burden should fall on the permitting authority to demonstrate that either the fee demand was justified under Nollan and Dolan or that the denial would have occurred irrespective of the demand. The record indicates that the latter cannot be substantiated. Lastly, even if the Court of Appeal recognized the fee demand's influence, its distinction between denying a permit for failing to meet an unlawful condition versus granting one under such a condition is questioned, as the purpose of Nollan and Dolan is to prevent extortionate practices within the permitting process. Furthermore, unlike in Nollan and Dolan, where there were clear issues of taking related to easements, the present case does not involve a definitive taking or threat of taking of any money.

Petitioners' attempt to convert their apartments may provoke legal action from the city, which would seek to prevent and penalize the conversion rather than collect a $600,000 fee. The Court of Appeal's decision is questioned due to its implausible bases, suggesting a reluctance to enforce Fifth Amendment standards against state administrators. This issue appears widespread, reflecting anti-development sentiments and challenges regarding property rights. State courts seem to be avoiding the 'essential nexus' standard established by the Supreme Court in Nollan v. California Coastal Commission, as noted in previous cases. Although the appellate courts have attempted to sidestep mandates from key Supreme Court decisions, one plausible basis for their ruling merits further examination. The case is significant enough to warrant certiorari for argument, particularly as it involves the conversion of a hotel with 31 residential units, where petitioners successfully reclassified seven units for tourist use with the Board of Permit Appeals' approval.