In Lockaway Storage v. County of Alameda, published May 9, 2013, the First District Court of Appeal, Division 3, upheld a trial court's ruling that the county defendant was liable for a temporary regulatory taking of a business project. The plaintiff bought property zoned for an alternative conditional use for storage of recreational vehicles and boats. The county approved a conditional use permit for the property approving that use. The CUP had to be implemented within three years or terminate. The plaintiff bought the property eight months into the CUP's term. The county assured plaintiff that the property could be developed as a storage facility. A few months later, the county's voters enacted a growth control initiative that prohibited development of a storage facility on the property, but specified it applied to developments that had not received all necessary discretionary county and other approvals and permits before the effective date of the ordinance. After the measure became effective, the plaintiff continued developing the property. The county did not issue ministerial permits as the CUP neared its end, and then did not renew the CUP, based on the ordinance. When the plaintiff sued, the trial court issued a writ of mandate requiring that the county provide the ministerial permits, holding that by its language the ordinance did not apply to the project because the plaintiff had obtained a discretionary permit (the CUP) before the ordinance went into effect. The plaintiff completed its project. The court then tried the plaintiff's regulatory taking claim. The court concluded under the Penn Central takings test that the county's application of the ordinance was a temporary regulatory taking, and awarded the plaintiff damages for lost profits and increased construction costs due to the 30-month delay in construction.
The appellate court affirmed the trial court's decisions. It concluded that the county's appeal of the writ of mandate was moot, because the county did not apply for a stay of the writ and the project had been completed. It held that the ordinance could only be interpreted to permit the property's development because the CUP had issued before the ordinance's effective date. It held that Penn Central's temporary regulatory takings test (based on interference with reasonable investment-backed expectations) rather than the California Supreme Court's ruling in Landgate v. California Coastal Comm., which holds that development delays caused by reasonable errors by local government in interpreting the law are not temporary takings. The court questioned whether Landgate was still good law, in light of post-Landgate changes in takings law from the U.S. Supreme Court. It also concluded that Landgate did not apply, because it upheld the trial court's determination that the county's interpretation of the ordinance was not a reasonable error.
The appellate court also upheld the fee award to the plaintiff under Code of Civil Procedure section 1036. It rejected the county's argument that the court should have segregated the fees expended on the unsuccessful civil rights claim from those expended proving inverse condemnation. It concluded that the trial court had impliedly found that the work on the civil rights claim was also necessary to the inverse claim.