71 F. Supp. 3d 1072
N.D. Cal.2014Background
- San Francisco Ordinance 54-14 (2014) requires a lump-sum payout to tenants displaced by an Ellis Act withdrawal, equal to the greater of the pre-2014 payout or 24 times the two-year rent differential as calculated by a Controller's Office schedule.
- The Controller’s Schedule uses a single multiplier to compute a purported market-differential; it does not reflect neighborhood- or unit-specific rent data.
- Payouts are split, with half due at service of Notice of Termination and half due when the tenant vacates; disabled or 62+ tenants receive additional payments consistent with the 2005 rules.
- Plaintiffs, Park Lane and the Levins, challenge the 2014 Ordinance as an unconstitutional taking under the Fifth Amendment on facial grounds.
- The district court held the ordinance unconstitutional as a monetary exaction lacking essential nexus and rough proportionality to the impact of the withdrawal, granting declaratory and injunctive relief and staying the order to permit potential Ninth Circuit review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2014 Ordinance constitutes an unconstitutional taking under Nollan/Dolan/Koontz. | Exaction has no essential nexus or rough proportionality to withdrawal impact. | Exaction furthers a legitimate public purpose of mitigating displacement and is rationally related to withdrawal. | No; the exaction fails essential nexus and rough proportionality. |
| Whether the payout is a permissible form of public-use regulation or an impermissible monetary exaction. | The lump-sum payment is not tied to the actual impact of withdrawal and is a de facto wealth transfer. | The payout is a permissible instrument within the public-use framework to address housing displacement. | Unconstitutional monetary exaction; not a valid public-use concession. |
| Whether Nollan/Dolan Koontz framework applies to facial takings challenges and monetary exactions. | Koontz extends Nollan/Dolan to monetary exactions; facial challenges are covered. | Nollan/Dolan do not apply to facial challenges or to non-monetary exactions in all settings. | Framework applies to this facial monetary exaction; invalid as to nexus/proportionality. |
| Whether the 2014 Ordinance satisfies the Public Use Clause in light of Kelo and related precedent. | Even if public-purpose rhetoric exists, the linking exaction is not tied to the harmed land-use decision. | The ordinance advances a broad public purpose to reduce displacement and stabilize communities. | Public Use Clause satisfied in broad terms, but the monetary exaction fails under nexus/proportionality. |
Key Cases Cited
- Nollan v. California Coastal Comm’n, 483 U.S. 825 (1987) (essential nexus and rough proportionality for land-use conditions)
- Dolan v. City of Tigard, 512 U.S. 374 (1994) (rough proportionality requirement for exactions tied to land use)
- Koontz v. St. Johns River Water Mgmt. Dist., 133 S. Ct. 2586 (2013) (monetary exactions must satisfy Nollan/Dolan nexus and proportionality)
- Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005) (takings claim outcomes depend on whether government action is a taking after public-use analysis)
- San Remo Hotel, L.P. v. City & Cnty. of S.F., 545 U.S. 323 (2005) (facial takings claims ripeness and relief considerations)
- Yee v. City of Escondido, 503 U.S. 519 (1992) (rent control context and regulatory power to regulate housing conditions)
- Armstrong v. United States, 364 U.S. 40 (1960) (public burdens and constitutional limits on governmental actions)