In Dryden Oaks, LLC v. San Diego County Regional Airport Authority, __ Cal.App.5th __ (October 19, 2017), the Fourth District Court of Appeal published a previously unpublished opinion addressing both regulatory takings and pre-condemnation damages claims. The case arose out of a complicated set of facts involving two properties near McClellan Palomar Airport in Carlsbad.

In short, in 2002 the City approved permits for both lots despite determinations the San Diego County Regional Airport Authority’s determination the projects were incompatible with the airport. The developer completed construction of a commercial building on one of the lots in 2005, but the second permit expired in 2012 without commencement of any construction. The developer filed an application to restart the process for the second lot, but by that time the Authority had adopted an Airport Land Use Compatibility Plan that designated the property within a higher risk safety zone. Thus, despite its earlier decision to override the Authority’s objections under the predecessor plan to the ALUCP, the City now refused to do so.

The developer sued the Authority and the County alleging that his economic expectations for the property were diminished by the Authority’s adoption of the ALUCP and that the adoption constituted a “disguised” regulatory taking. He also argued that the Authority engaged in unreasonable pre-condemnation conduct. Importantly, however, the developer did not sue the City.

The Court of Appeal provided a detailed summary of regulatory takings law under Pennsylvania Coal Co. v. Mahon, Penn Central Transp. Co. v. New York City, Lucas v. South Carolina Coastal Council, and Lingle v. Chevron U.S.A. Inc. The Court noted that the developer’s argument “muddles” the type of taking he claimed to be an issue in the case and rejected his argument that the case law supports a separate category of “disguised” regulatory takings. Moreover, the Court held that the developer failed to satisfy an important first step in any regulatory takings analysis, which is to show that the decision at issue was “a sufficiently final land use determination” to support a takings claim. Here, the City was the land use agency vested with the authority to make final land use decisions, not the Authority, which had no such power. Given that the Authority’s adoption of the ALUCP was not a sufficiently final land use determination to support a takings claim, the Court also rejected the developer’s argument that the County was vicariously liable for the Authority’s action.

Finally, the Court provided a detailed summary of pre-condemnation damages law under Klopping v. City of Whittier, which provides that the “just compensation” requirement is triggered where, prior to a taking, “the condemner acts unreasonably in issuing precondemnation statements, either by excessively delaying eminent domain action or by other oppressive conduct.” The Court held that because the developer failed to provide any evidence of a public announcement of intent to condemn the property, the Authority was not liable for unreasonable pre-condemnation conduct.

Dryden Oaks is an interesting opinion with a helpful discussion of the regulatory takings and pre-condemnation damages but ultimately breaks no new ground for future cases. The case is a good reminder, however, of the complexities of this area of the law and the importance of pleading takings claims clearly in light of the well-established doctrines it discusses.