952 F.3d 1157
9th Cir.2020Background
- San Francisco replaced a condo-conversion lottery with the Expedited Conversion Program (ECP), which required owners who rented units to offer incumbent tenants a lifetime lease as a condition of conversion.
- Peyman Pakdel and Sima Chegini (Plaintiffs) bought a tenancy-in-common interest in a six-unit building, rented their exclusive unit, applied under the ECP, agreed in writing to offer a lifetime lease, and received final approval and a partial fee refund.
- Six months after final approval, Plaintiffs asked the City not to require execution/recording of the lifetime lease (or to compensate them). The City denied the requests.
- Plaintiffs sued in federal court under § 1983, alleging the Lifetime Lease Requirement effects a regulatory taking without just compensation. The district court dismissed, relying on Williamson County’s state-litigation ripeness requirement.
- After briefing, the Supreme Court’s Knick decision eliminated Williamson County’s state-litigation requirement, but retained its separate finality requirement. The Ninth Circuit held Plaintiffs’ takings claim unripe because they never sought a timely exemption/variance and had waived that right.
- The panel affirmed dismissal; a concurring/dissenting judge argued the City’s June 2017 denials of Plaintiffs’ belated waiver requests were a final decision that ripened the claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether failure to seek state compensation bars federal takings suit | Pakdel: failure to pursue state remedies should not bar federal suit | City: Williamson County required state compensation claim | Denied — Knick eliminated Williamson County’s state-litigation requirement; failure to seek state compensation no longer bars federal suit |
| Whether the claim is unripe under Williamson County’s finality requirement | Pakdel: finality satisfied because City rejected their post-approval requests in June 2017 | City: Plaintiffs never sought timely exemption/variance during administrative process and waived objections | Held: Unripe — Plaintiffs did not obtain a final, authoritative decision because they failed to request available exemptions/variances before approval and expressly waived later challenges |
| Whether recharacterizing the claim as a “private” taking avoids finality ripeness | Pakdel: Lifetime Lease is a private taking (benefits private parties) and thus not subject to Williamson County finality | City: This is simply a regulatory-taking claim in substance | Held: Rejected — private-taking label is a relabeling of a regulatory-taking claim and remains subject to finality requirement (Rancho de Calistoga) |
| Whether court should excuse finality requirement in its discretion | Pakdel: court should exercise discretion to excuse ripening here | City: No exceptional circumstances to excuse finality; Plaintiffs had opportunities to seek relief | Held: Denied — appellate court declines to exercise discretion; no analogous circumstances warranting exception |
Key Cases Cited
- Williamson County Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (U.S. 1985) (established finality and state-litigation ripeness requirements for regulatory takings)
- Knick v. Township of Scott, 139 S. Ct. 2162 (U.S. 2019) (eliminated Williamson County’s state-litigation requirement; takings claim accrues at time of taking)
- Suitum v. Tahoe Reg’l Planning Agency, 520 U.S. 725 (U.S. 1997) (discusses finality requirement and local boards’ discretion to soften regulations)
- Palazzolo v. Rhode Island, 533 U.S. 606 (U.S. 2001) (courts must know “how far the regulation goes” before deciding takings issue)
- Rancho de Calistoga v. City of Calistoga, 800 F.3d 1083 (9th Cir. 2015) (private-taking theory is a reframing of a regulatory-taking claim when no physical seizure occurred)
- Yee v. City of Escondido, 503 U.S. 519 (U.S. 1992) (voluntary participation in regulatory scheme undermines physical-taking claim)