Penn Central Analysis Applies to 12-inch Pipe Upgrade Ordinance; Takings Did Not Apply where Landowner Agreed to Improvments

Tapps Brewing Inc v. City of Sumner, No. 07-35231, (9th Cir. 2008).

This case involves an issue of first impression for the 9th Circuit regarding which 5th Amendment takings analysis should apply to a land use ordinance, Penn Central or Nollan/Dolan?

Facts.  At issue before the court were two different upgrades, which the court considered separately:  Ordinance 1603 requiring that all new developments include a minimum of 12-inch storm pipe, and the City’s request that the McClungs install a 24-inch pipe.  In 1995, Daniel and Andrea McClung (the “McClungs”) sought to develop property they owned in the City of Sumner (the “City”), Washington, and learned that their underground storm drain pipe did not meet the City’s requirement for new developments to include pipes at least 12 inches in diameter.  The City Engineer offered to waive certain fees in exchange for the McClungs installing a 24-inch instead of 12-inch pipe.  The McClungs revised their development plans accordingly, which was then approved.  Despite voicing no objection to the 24-inch pipe installation, the McClungs assert that the City’s request effected an illegal taking of their property.

Question Presented.  The question before the 9th Circuit was as follows:

[W]hether a legislative, generally applicable development condition that does not require the owner to relinquish rights in the real property, as opposed to an adjudicative land-use exaction, should be reviewed pursuant to the ad hoc standards of Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978), or the nexus and proportionality standards of Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994).

Holding.  Regarding Ordinance 1603, “the facts of this case involve neither an individual, adjudicative decision, nor the requirement that the McClungs relinquish rights in their real property”; therefore, “the Penn Central analysis applies to the 12-inch pipe requirement.”  As for the installation of the 24-inch pipe, “the McClungs voluntarily contracted with the City to install the 24-inch pipe and thus the installation of that pipe was not a “taking” by the City.”  The court did not consider the City’s request in the taking’s context, because “the McClungs impliedly contracted to install a 24-inch pipe.”

Jurisdiction.  Aside from the ruling on the merits of the case, the court also had something interesting to say about its jurisdiction to hear the case.  The court found jurisdiction to hear this 5th Amendment case not on the standard articulated in Williamson, but on so called “prudential” grounds, which it described as follows:

We need not determine the exact contours of when takings claim ripeness is merely prudential and not jurisdictional.  In this case, we easily conclude that the facts presented raise only prudential concerns. The McClungs installed the storm pipe over ten years ago, resulting in a clearly defined and concrete dispute. See Thomas, 220 F.3d at 1139 (stating that Article III ripeness requires the court to analyze whether the “alleged injury is too ‘imaginary’ or ‘speculative’ to support jurisdiction”). Because this case raises only prudential ripeness concerns, we have discretion to assume ripeness is met and proceed with the merits of the McClungs’ takings claim. Accordingly, we do not resolve whether this claim is ripe under the standards articulated in Williamson, and instead assume without deciding that the takings claim is ripe in order to address the merits of the appeal.

Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), held that takings claims are not ripe for federal court adjudication until a state fails “to provide adequate compensation for the taking.”