San Remo Hotel L.P. v. City and County of San Francisco, 41 P.3d 87 (Cal. 2002), and Landgate, Inc. v. California Coastal Commission, 953 P.2d 1188 (Cal. 1998), cert. denied, 67 U.S.L.W. 3235 (1998).
San Remo concerned the San Francisco Housing Conversion Ordinance, which was enacted to “benefit the general public by minimizing adverse impact on the housing supply and on displaced low income, elderly and disabled persons resulting from the loss of residential hotel units through their conversion and demolition.” 41 P.3d at 91-92. Specifically, the court majority upheld the ordinance’s requirement that hotel owners seeking permission to eliminate such residential units and convert to tourist hotels help replace the lost rental units in San Francisco, which suffers from a severe shortage of affordable rental housing. Id. Brown vigorously dissented. She proclaimed that as a result of the decision, “private property, already an endangered species in California, is now entirely extinct in San Francisco.” Id. at 120. She asserted that the city regulation constituted an unconstitutional “taking” of property without just compensation, going so far as to maintain that the decision approved “theft” and “[t]urning a democracy into a kleptocracy.” Id. at 128. She extolled what she called the right to “free use of property,” calling it “just as important” as freedom of speech or religion. Id.
Looking beyond Brown’s heated rhetoric, the majority strongly disagreed with her views, which would fundamentally transform “takings” and “property rights” theories and seriously impede significant economic and environmental regulation. As the majority explained, the ordinance did not confiscate or take any property, or even affect its current use. Instead, it was a regulation “applying on equal terms to all properties in a sizable class defined by use, designed to benefit the City as a whole, and merely prohibiting a change of use from residential to commercial unless the owner mitigates the detrimental impact of that change.” Id. at 109.
Brown’s theory was that such regulations are not allowed unless property owners agree they would benefit them economically, which could preclude almost any economic or environmental regulation. “However strongly and sincerely the dissenting justice may believe that government should regulate property only through rules that the affected owners would agree indirectly enhance the value of their properties,” the majority explained, “nothing in the law of takings would justify an appointed judiciary in imposing that, or any other, personal theory of political economy on the people of a democratic state.” Id. at 110.
In an earlier “takings” opinion that Brown has listed as one of her ten most significant, Brown dissented from the court’s ruling in Landgate that a delay in the issuance of a development permit “partly owing to the mistaken assertion of jurisdiction by a government agency” is not an improper “temporary taking” of property. 953 P.2d at 1190. As the majority explained, “[v]irtually every court that has examined the issue” had concluded that “a regulatory mistake resulting in delay does not, by itself, amount to a taking of property.” Id. at 1195 (emphasis in original). Brown nevertheless dissented, proclaiming that “the takings clause, and the courts’ ardent defense of it, stands as a last lonely bulwark of property rights.” Id. at 1212.
This case was one of the more recent in a series of decisions by the California Supreme Court concerning challenges to local rent control ordinances. In Kavanau v. Santa Monica Rent Control Bd., 941 P.2d 851 (Cal.1997), the court ruled that adjustment of future rents was generally sufficient to compensate for prior rent ceilings that were set so low as to be confiscatory, and that landlords thus could not claim that rent control constituted an improper “taking” of their property. Brown joined one other justice in dissenting from that decision. In Galland, the court held that such adjustments also foreclose suits for damages for violation of due process rights under 42 U.S.C. 1983, so long as the adjustments adequately compensate for previous excessively low rent ceilings.
Brown wrote a vigorous dissent. She accused the majority of improperly requiring exhaustion of administrative remedies before a 1983 action could be filed, and bitterly complained that claims of racial discrimination under 1983 would not receive such treatment. As in cases like San Remo and Hamidi, she charged the majority with antipathy towards property rights and stated that her concerns led her to “wonder if we took the wrong turn long ago when we began treating rent control like any other price-regulated industry.” 16 P.3d at 163.
The majority strongly disagreed. Brown had improperly characterized its holding as an exhaustion of remedies requirement, the majority explained. Instead, a prospective rent adjustment prevents a due process violation from occurring in the first place, and Brown could not cite any “authority for the proposition that a regulatory delay in a lawful price adjustment gives rise to an actionable substantive due process violation under section 1983.” Id. at 144 n.3. “[G]iven the discretion permitted the government in regulating prices” under precedent that Brown could not distinguish, the majority stated, “delays in price adjustments cannot be considered the constitutional equivalent of intentional racial discrimination.” Id. Indeed, the majority pointed out that Brown appeared to be arguing that “landlords subject to rent control should be able to sustain a lighter burden” in a 1983 action than other civil rights plaintiffs, a proposition for which the majority pointedly noted there was “no basis.” Id. at 155 n.10 (emphasis added). And while Brown may have wanted to reach a decision inconsistent with precedent established “long ago,” the majority explained, she offered absolutely “no persuasive reason, however, for reevaluating precedent on this point.” Id. at 144 n.3.