GEORGE SHEETZ v. COUNTY OF EL DORADO
C093682
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (El Dorado)
Filed 10/19/22
CERTIFIED FOR PUBLICATION; Super. Ct. No. PC20170255
FisherBroyles, Paul James Beard II, Matthew Howard Weiner for Plaintiff and Appellant.
This is a land-use regulation case. Plaintiff George Sheetz challenges the $23,420 traffic impact mitigation fee (TIM fee or fee) imposed by defendant El Dorado County (County) as a condition of issuing him a building permit for the construction of a single-family residence on his property in Placerville. Sheetz appeals from the judgment entered after the trial court sustained the County‘s demurrer without leave to amend and denied his verified petition for writ of mandate. He contends reversal is required because the TIM fee is invalid under both the Mitigation Fee Act (
FACTUAL AND PROCEDURAL BACKGROUND
Factual Background
In July 2004, the County adopted a new general plan, titled “2004 El Dorado County General Plan A Plan for Managed Growth and Open Roads; A Plan for Quality Neighborhoods and Traffic Relief” (2004 General Plan or general plan). As relevant here, the general plan required that new development pay for road improvements necessary to mitigate the traffic impacts from such development.
In August 2006, the County permanently amended the general plan to include a traffic impact mitigation fee program (TIM fee program or program) to finance the construction of new roads and the widening of existing roads within its jurisdiction. Under the program, the County is authorized to impose a TIM fee as a condition to the approval of a building permit to mitigate the traffic impacts on state and local roads from new development. The fee is comprised of two components: the Highway 50 component
and the local road component. The amount of the fee is generally based on the location of the project (i.e., the specific geographic zone within the County) and the type of project (e.g., single-family residential, multi-family
In February 2012, the County adopted new TIM fee rates, including the fee rate challenged in this case.
In July 2016, Sheetz applied for a building permit to construct a 1,854-square-foot single-family manufactured home on his property in Placerville, which is located in geographic Zone 6. The County agreed to issue the permit on the condition that Sheetz pay a TIM fee in the amount of $23,420, consisting of $2,260 for Highway 50 improvements and $21,160 for local road improvements. After Sheetz paid the fee, the project was approved and the building permit issued in August 2016.
In December 2016, Sheetz sent a letter to the County in which he protested the validity of the TIM fee under the Mitigation Fee Act on various grounds. Thereafter, Sheetz sent the County additional letters reiterating his challenge to the fee and requesting a refund. The County did not respond to any of the letters.
Procedural Background
In June 2017, Sheetz filed a verified petition for writ of mandate and complaint for declaratory and injunctive relief, alleging seven causes of action challenging the validity
of the TIM fee and the program that authorized it.2 As for his state law claims, Sheetz asserted that the fee violated the Mitigation Fee Act because there is no “reasonable relationship” between both (1) the amount of the fee and the cost of the public facilities (i.e., road improvements) specifically attributable to his development project, and (2) the traffic impacts caused by his development project and the need for road improvements within the County. Sheetz further asserted that the fee violated the Mitigation Fee Act because it included costs attributable to existing deficiencies in the County‘s “traffic infrastructure.” As for his federal claims, Sheetz asserted that the fee violated the takings clause of the United States constitution, specifically the special application of the “unconstitutional conditions doctrine” in the context of land-use exactions established in Nollan and Dolan, as the County failed to make an individualized determination that
without regard to the cost specifically attributable to the particular project on which the fee is imposed, and an injunction preventing the County from enforcing this policy.
In April 2018, the trial court sustained the County‘s demurrer to the declaratory relief causes of action (second through seventh causes of action) without leave to amend, and overruled the demurrer to the petition for writ of mandate (first cause of action) on the ground that it stated a cognizable claim under the Mitigation Fee Act, specifically
After the administrative record was completed and the parties submitted additional briefing, the trial court denied the petition for writ of mandate in November 2020. As for the state law claim, the court concluded the County had met its burden to produce evidence showing that it used a valid method for imposing the TIM fee, one that established a reasonable relationship between the fee charged and the burden posed by Sheetz‘s development project. The court further concluded Sheetz had failed to cite evidence in the administrative record showing that the fee was arbitrary, capricious, entirely lacking in evidentiary support, or unlawfully or procedurally unfair. Sheetz did not show that the record before the County clearly did not support the underlying determinations regarding the reasonableness of the relationship
development.3 In rejecting Sheetz‘s constitutional challenge under state law, the court found the administrative record established that the fee bore a reasonable relationship, in both intended use and amount, to the deleterious public impact of the project. As for the federal claim, the trial court rejected Sheetz‘s constitutional challenge to the fee, concluding (as it did in ruling on the demurrer) that the fee was not subject to the requirements of Nollan and Dolan because it is a legislatively prescribed development fee that is generally applicable to a broad class of property owners.
Sheetz timely appealed. He challenges the trial court‘s rulings with respect to his first (writ of mandate), fourth (declaratory relief), and fifth (declaratory relief) causes of action.
After delays in the briefing schedule, the case was fully briefed on May 4, 2022, and assigned to this panel on May 31, 2022. The court scheduled oral argument and the case was argued and submitted on September 21, 2022.
DISCUSSION
I
Governing Law
A. Unconstitutional Conditions Doctrine
The takings clause of the
The United States Supreme Court has identified two general categories of takings: “physical takings” and “regulatory takings.” (Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency (2002) 535 U.S. 302, 321.) Apart from these two general categories of takings, the Supreme Court has also identified a “special” category of takings claims for “land-use exactions.” (Lingle, supra, 544 U.S. at p. 538.) A land use-exaction occurs when the government demands real property or money from a land-use permit applicant as a condition of obtaining a development permit. (See Koontz v. St. Johns River Water Management Dist. (2013) 570 U.S. 595, 599, 612, 616 (Koontz).) The leading examples of “exactions” come from the Supreme Court‘s decisions in Nollan, Dolan, and Koontz.
In Nollan, the California Coastal Commission conditioned its grant of a permit to landowners who sought to rebuild their house on their agreement to dedicate a public easement across their beachfront property. (Nollan, supra, 483 U.S. at p. 827.) In Dolan, a city conditioned its grant of a permit to a property owner who sought to increase the size of her existing retail business on her agreement to dedicate a portion of her property for flood control and traffic improvements. (Dolan, supra, 512 U.S. at p. 377.) And most recently in Koontz, a water district conditioned its grant of a permit to a landowner who sought to develop 3.7 acres of an undeveloped property on his agreement to either reduce the size of his development to 1 acre and dedicate a conservation easement on the remainder of the property (13.9 acres) or proceed with the development as proposed, building on 3.7 acres and deeding a conservation easement on the remainder of the property (11.2 acres), and pay money to improve certain public wetlands the water district owned. (Koontz, supra, 570 U.S. at pp. 601-602.)
To determine whether these types of demands are impermissible, courts apply a “special application of the ‘doctrine of “unconstitutional conditions.” ’ ” (Lingle, supra, 544 U.S. at p. 547.) Under that doctrine, the government may not ask a person to give up a constitutional right (e.g., the right to receive just compensation when property is taken
for a public use) “in exchange for a discretionary benefit conferred by the government where the benefit sought has little or no relationship to the property.” (Dolan, supra, 512 U.S. at p. 385.) In applying the doctrine in the context of land-use exactions, particular rules apply because of two competing realities surrounding land-use permits. On the one hand, the government can take unreasonable advantage of landowners who seek a permit. “By conditioning a building permit on the owner‘s deeding over a public right-of-way, for example, the government can pressure an owner into voluntarily giving up property for which the
The standard established in Nollan and Dolan for assessing takings claims in the context of land-use exactions is commonly referred to as the “Nollan/Dolan test,” which is viewed as a type of ” ‘heightened scrutiny.’ ” (Beach & Bluff Conservancy v. City of Solana Beach (2018) 28 Cal.App.5th 244, 266.) The Nollan part of the test is the “essential nexus” standard, i.e., there must be an “essential nexus” between the
government‘s legitimate state interest and the exaction imposed. (Nollan, supra, 483 U.S. at p. 837Dolan part of the test is the “rough proportionality” standard with regard to the “degree of connection between the exactions and the projected impact of the proposed development.” (Dolan, supra, 512 U.S. at p. 386Dolan court concluded, “No precise mathematical calculation is required, but the [government] must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development.” (Id. at p. 391.)
In Koontz, the United States Supreme Court extended the Nollan/Dolan test to “so-called ‘monetary exactions’ ” demanded by the government as a condition for a land-use permit, that is, a monetary condition that is a substitute for the property owner‘s dedication of real property to the public which is intended to mitigate the environmental impact of the proposed project. (Koontz, supra, 570 U.S. at pp. 612, 619Nollan and Dolan. (Id. at p. 612.)
Under California law, only certain development fees are subject to the heightened scrutiny of the Nollan/Dolan test. Our Supreme Court has held that the requirements of Nollan and Dolan apply to development fees imposed as a condition of permit approval where such fees are “‘imposed . . . neither generally nor ministerially, but on an individual and discretionary basis.’ ” (San Remo Hotel L.P. v. City and County of San Francisco (2002) 27 Cal.4th 643, 666-670 (San Remo Hotel); Ehrlich v. City of Culver City (1996) 12 Cal.4th 854, 859-860, 866-867, 876, 869, 881 (Ehrlich) (plur.
of property owners through legislative action. As our Supreme Court has explained, “legislatively prescribed monetary fees“--as distinguished from a monetary condition imposed on an individual permit application on an ad hoc basis--“that are imposed as a condition of development are not subject to the Nollan/Dolan test.” (California Building Industry Assn. v. City of San Jose (2015) 61 Cal.4th 435, 459, fn. 11 (CBIA), citing San Remo Hotel, supra, 27 Cal.4th at pp. 663-671 [“The ‘sine qua non’ for application of Nollan/Dolan scrutiny is . . . the ‘discretionary deployment of the police power’ in ‘the imposition of land-use conditions in individual cases’ “], and Santa Monica Beach, Ltd. v. Superior Court (1999) 19 Cal.4th 952, 966-967 (Santa Monica) [only individualized development fees--as distinguished from legislatively mandated, generally applicable development fees--are subject to the Nollan/Dolan test].)
B. Mitigation Fee Act
Effective January 1, 1989, the Mitigation Fee Act (
The Mitigation Fee Act defines a development fee as “a monetary exaction other than a tax or special assessment . . . that is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project . . . .” (
facilities to maintain the existing level of service or (2) achieve an adopted level of service that is consistent with the general plan.” (
There are two ways that a local agency can satisfy the Mitigation Fee Act‘s “reasonable relationship” requirement for the imposition of development fees.
In Ehrlich, our Supreme Court concluded that the heightened scrutiny of the Nollan/Dolan test applies to ad hoc monetary exactions imposed as a condition of approving a development project by individual property owners. (Ehrlich, supra, 12 Cal.4th at p. 881 (plur. opn. of Arabian, J).) There, the city had conditioned permits for the development of a condominium complex on the site of a former private tennis club on the owner‘s agreement to pay a $280,000 fee to be used for city recreational facilities. (Id. at pp. 861-863 (plur. opn. of Arabian, J.).) In holding that the fee at issue was subject to the Nollan/Dolan test, a plurality of our high court emphasized that because the city had exercised its discretionary powers in imposing and calculating the recreational impact fee, rather than doing so pursuant to a legislative mandate or formula, imposition of the fee bore much the same potential for illegitimate leveraging of private property as did the real
However, as we have noted ante, while the Nollan/Dolan test applies to monetary land-use exactions which are imposed ad hoc on an individual and discretionary basis, it does not apply to generally applicable development impact fees imposed through legislative action. (San Remo Hotel, supra, 27 Cal.4th at pp. 666-667, 669-671.) In San Remo Hotel, our Supreme Court expressly declined to extend the Nollan/Dolan test to all development fees, “adhering instead to the distinction [drawn] in Ehrlich . . . between ad hoc exactions and legislatively mandated, formulaic mitigation fees.” (Id. at pp. 670-671.) In doing so, the court explained: “While legislatively mandated fees do present some danger of improper leveraging, such generally applicable legislation is subject to
the ordinary restraints of the democratic political process. A city council that charged extortionate fees for all property development, unjustifiable by mitigation needs, would likely face widespread and well-financed opposition at the next election. Ad hoc individual monetary exactions deserve special judicial scrutiny mainly because, affecting fewer citizens and evading systematic assessment, they are more likely to escape such political controls.” (Id. at p. 671.)
The San Remo Hotel court emphasized that legislatively imposed development impact fees that are not subject to the Nollan/Dolan test remain subject to the means-end judicial review under the Mitigation Fee Act. (Id. at p. 671.) To be valid as a matter of both statutory and constitutional state law, such fees must satisfy the “reasonable relationship” test embodied in the Mitigation Fee Act. (Ibid.; see Ehrlich, supra, 12 Cal.4th at pp. 865, 867 [“developers who wish to challenge a development fee on either statutory or constitutional grounds must do so via the statutory framework provided by the [Mitigation Fee] Act“].)
II
Demurrer
Sheetz contends the trial court erred in sustaining the demurrer as to his first, fourth, and fifth causes of action. He argues that his first and fifth causes of action state cognizable federal takings claims under the “unconstitutional conditions doctrine,” and that his first and fourth causes of action state cognizable claims under the Mitigation Fee Act. As we shall explain, we find no error.
The function of a demurrer is to test whether, as a matter of law, the facts alleged in the complaint state a cause of action under any legal theory. (Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1052.) We assume the truth of all facts properly pleaded, as well as facts of which the trial court properly took judicial
notice. But we do not assume the truth of contentions, deductions, or conclusions of law. Our review of the trial court‘s decision is de novo. (Ibid.)
A trial court‘s order sustaining a demurrer without leave to amend is reviewable for abuse of discretion. (Mercury Ins. Co. v. Pearson (2008) 169 Cal.App.4th 1064, 1072.) “If we find that an amendment could cure the defect, we conclude that the trial court abused its discretion and we reverse; if not, no abuse of discretion has occurred.” (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.)
B. First Cause of Action: Writ of Mandate
1. Unconstitutional Conditions Doctrine
Sheetz‘s first cause of action for writ of mandate alleges that the TIM fee effects an unlawful taking of property in violation of the special application of the “unconstitutional conditions doctrine” established in Nollan and Dolan. On appeal, Sheetz contends the trial court erred in concluding that the Nollan/Dolan test does not apply to the fee as a matter of law. We disagree.
We conclude the trial court properly determined that the TIM fee is not subject to the heightened scrutiny of the Nollan/Dolan test. The fee is not an “ad hoc exaction” imposed on a property owner on an individual and discretionary basis. Rather, it is a development impact fee imposed pursuant to a legislatively authorized fee program that generally applies to all new development projects within the County. The fee is calculated using a formula that considers various factors. Therefore, the validity of the fee and the program that authorized it is only subject to the deferential “reasonable relationship” test embodied in the Mitigation Fee Act. (San Remo Hotel, supra, 27 Cal.4th at p. 667; Ehrlich, supra, 12 Cal.4th at pp. 865, 867 (plur. opn. of Arabian, J.).) Indeed, as our Supreme Court has explained, the heightened scrutiny of the Nollan/Dolan test does not apply to legislatively mandated development impact fees that, as here, generally apply to a broad class of permit applicants. (CBIA, supra, 61 Cal.4th at p. 459,
fn. 11, citing San Remo Hotel, supra, 27 Cal.4th at pp. 663-671; Santa Monica, supra, 19 Cal.4th at pp. 966-967.)
We are also unpersuaded by Sheetz‘s suggestion that a different result is warranted because Nollan and Dolan involved legislatively prescribed, generally applicable
exactions. In Lingle, the United States Supreme Court characterized Nollan and Dolan as involving “Fifth Amendment takings challenges to adjudicative land-use exactions--specifically, government demands that a landowner dedicate an easement allowing public access to her property as a condition of obtaining a development permit.” (Lingle, supra, 544 U.S. at p. 546.) We find Nollan and Dolan to be of no assistance to Sheetz, as neither case involved legislatively mandated, formulaic development impact fees that applied to a broad class of proposed developments. Rather, both cases involved a real property dedication condition imposed on an ad hoc basis upon an individual permit application.
Equally misplaced is Sheetz‘s reliance on Cedar Point Nursery v. Hassid (2021) 141 S.Ct. 2063, a case he cites for the first time in his reply brief. In Cedar Point, a California
matters for purposes of Nollan and Dolan is not who imposes an exaction, but what the exaction does’ “].)
Cedar Point is distinguishable. That case did not involve a generally applicable development impact fee imposed by a local agency as a condition for a land-use permit. Rather, it involved a state regulation that only applied to property owned by agricultural employers. And Cedar Point does not purport to address whether the heightened scrutiny of the Nollan/Dolan test applies to the circumstances presented here--a legislatively mandated, formulaic development impact fee that applies to a broad class of proposed developments. “It is axiomatic that cases are not authority for propositions not considered.” (People v. Ault (2004) 33 Cal.4th 1250, 1268, fn. 10.) Thus, contrary to Sheetz‘s contention, Cedar Point does not abrogate the rule--by which we are bound--that generally applicable development fees are not subject to the Nollan/Dolan test. (See CBIA, supra, 61 Cal.4th at p. 459, fn. 11, citing San Remo Hotel, supra, 27 Cal.4th at pp. 663-671; Santa Monica, supra, 19 Cal.4th at pp. 966-967.)
2. Mitigation Fee Act
Sheetz‘s first cause of action for writ of mandate alleges that the County violated the Mitigation Fee Act because there is no “reasonable relationship” between the public impact of his development project and the need for improvements to state and local roads. On appeal, he contends the trial court
As noted ante, there are two ways that a local agency can satisfy the Mitigation Fee Act‘s “reasonable relationship” requirement for the imposition of development fees. (
C. Fourth and Fifth Causes of Action: Declaratory Relief
Sheetz‘s fourth and fifth causes of action for declaratory relief allege that the County‘s policy of requiring new development to pay the full cost of
roads and widening of existing roads without regard to the cost specifically attributable to the particular project on which the fee is imposed resulted in an unlawful exaction of $23,420. According to Sheetz, the County‘s policy, “as applied” to him, violated the Mitigation Fee Act and the “unconstitutional conditions doctrine.” On appeal, Sheetz contends the trial court erred in determining that his fourth and fifth causes of action failed as a matter of law because the sole remedy for “as applied” challenges to local agency action is administrative mandamus, not declaratory relief. We disagree.
We conclude the trial court properly sustained the demurrer to the fourth and fifth causes of action without leave to amend. It is well established that a declaratory relief cause of action is an appropriate method for challenging a statute, regulation, or ordinance as facially unconstitutional or otherwise invalid, but that administrative mandamus is “the proper and sole remedy” to challenge a local agency‘s application of the law (e.g., application of a zoning ordinance to a particular property). (See, e.g., Hensler v. City of Glendale (1994) 8 Cal.4th 1, 13-14; Tejon Real Estate, LLC v. City of Los Angeles (2014) 223 Cal.App.4th 149, 154-155; Rezai v. City of Tustin (1994) 26 Cal.App.4th 443, 448; City of Santee v. Superior Court (1991) 228 Cal.App.3d 713, 718-719; Taylor v. Swanson (1982) 137 Cal.App.3d 416, 418.)8
III
Petition for Writ of Mandate
Sheetz contends reversal is required because the TIM fee is invalid under both the heightened scrutiny of the Nollan/Dolan test and the “reasonable relationship” test embodied in the Mitigation Fee Act. According to Sheetz, the County‘s failure to make an individualized determination as to the traffic impacts specifically attributable to his
development project resulted in a violation of the takings clause of the federal and state constitutions as well as the Mitigation Fee Act.
For the reasons we have discussed, we reject this argument. The Nollan/Dolan test does not apply to the legislatively prescribed generally applicable development impact fee at issue here (see CBIA, supra, 61 Cal.4th at p. 459, fn. 11, citing San Remo Hotel, supra, 27 Cal.4th at pp. 663-671; Santa Monica, supra, 19 Cal.4th at pp. 966-967), and California law does not require an individualized or site-specific determination of
A. Standard of Review
“The adoption of development impact fees under the Mitigation Fee Act is a quasi-legislative act, which we review under the standards of traditional mandate. [Citations.] ‘We determine only whether the action taken was arbitrary, capricious or entirely lacking in evidentiary support, or whether it failed to conform to procedures required by law.’ [Citations.] ‘The action will be upheld if the [local agency] adequately considered all relevant factors and demonstrated a rational connection between those factors, the choice made, and the purposes of the enabling statute. ’ ” (Boatworks, LLC v. City of Alameda (2019) 35 Cal.App.5th 290, 298.) ” ‘This issue is a question of law. [Citation.] “On appeal, we independently review the agency‘s decision and apply the same standard of review that governs the superior court.” ’ ” (Walker v. City of San Clemente, supra, 239 Cal.App.4th at p. 1362.)
“[T]he local agency has the initial burden of producing evidence sufficient to demonstrate that it used a valid method for imposing the fee in question, one that
established a reasonable relationship between the fee charged and the burden posed by the development.” (Home Builders Assn. of Tulare/Kings Counties, Inc. v. City of Lemoore (2010) 185 Cal.App.4th 554, 562 (City of Lemoore).) “However, the figures upon which the public agency relies will necessarily involve predictions regarding population trends and future building costs, and they need not be exact. [Citation.] ‘As a practical matter it will not always be possible to fashion a precise accounting allocating the costs, and consequent benefits, of particular building projects to particular portions of the population. All that is required of the [agency] is that it demonstrate that development contributes to the need for the facilities, and that its choices as to what will adequately accommodate the [new population] are reasonably based.’ ” (Boatworks, LLC v. City of Alameda, supra, 35 Cal.App.5th at p. 298.)
“If the local agency does not produce evidence sufficient to avoid a ruling against it on the validity of the fee, the plaintiff challenging the fee will prevail. However, if the local agency‘s evidence is sufficient, the plaintiff must establish a requisite degree of belief in the mind of the trier of fact or
B. Analysis
We begin by noting that Sheetz relies only on a select few pages from the more than 5,000-page administrative record in support of his writ of mandate cause of action, as he did in the trial court. Having reviewed those portions as well as the broader administrative record, we find no error in the denial of the petition for writ of mandate.
As relevant here, the administrative record discloses that the County‘s adoption of the 2004 General Plan was guided by policies that limit traffic congestion, including policies that ensure that roadway improvements are developed concurrently with new development and paid for by that development and not taxpayer funds. In September 2005, the County adopted the interim 2004 General Plan traffic impact mitigation fee program (i.e., the TIM fee program), which implemented the transportation and circulation policies of the general plan and set forth the fee rates (that must be updated annually) imposed at the building permit stage to mitigate the effects of each type of new development (e.g., single-family residence) in the County‘s eight geographical fee zones.9 The interim program was adopted after the County considered the information contained in a technical report prepared by the DOT and studies analyzing the impacts of contemplated future development on existing public roadways and the need for new and improved roads as a result of the new development.
In August 2006, the County amended the general plan to permanently adopt the TIM fee program with adjusted new fee rates. This amendment occurred following the DOT‘s preparation of a detailed memorandum explaining the purpose of the fee, the use to which the fee was to be put, and
traffic volumes (average daily vehicle trips) from each type of new development. To estimate the vehicle trips or trip generation rates attributable to new development projects, the County relied on data published in the Institute of Transportation Engineers Trip Generation Manual, 7th Edition.10 Prior to the adoption of new fee rates in 2012, including the fee rate at issue here, the DOT explained the methodology it used to adjust the rates.
We conclude the County met its initial burden to demonstrate that it used a valid method for imposing the TIM fee, one that established a reasonable relationship between the fee charged and the burden posed by Sheetz‘s development of a single-family residence in geographic Zone 6. The record reflects that the County considered the relevant factors and demonstrated a rational connection between those factors and the fee imposed. We further conclude Sheetz has failed to show that the record before the County clearly did not support the County‘s determinations regarding the reasonableness of the relationship between the fee and his development project. The limited portions of the record relied upon by Sheetz do not demonstrate that the fee was arbitrary, entirely lacking in evidentiary support, or otherwise invalid.
DISPOSITION
The judgment is affirmed. The County shall recover its costs on appeal. (Cal. Rules of Court, rule 8.278(a).)
We concur:
Duarte, Acting P. J.
Hoch, J.
Earl, J.