Shelter Creek Development Corp. v. City of Oxnard

• Decision Date: 02 February 1988
• Docket Number: No. 86-6608,86-6608
• Citation: 838 F.2d 375
• Parties: SHELTER CREEK DEVELOPMENT CORPORATION; Leo A. O'Hearn; Margaret E. O'Hearn, Plaintiffs-Appellants, v. CITY OF OXNARD, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 375

838 F.2d 375

SHELTER CREEK DEVELOPMENT CORPORATION; Leo A. O'Hearn Margaret E. O'Hearn, Plaintiffs-Appellants, v. CITY OF OXNARD, Defendant-Appellee.

No. 86-6608.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Nov. 2, 1987.

Decided Feb. 2, 1988.

Donald R. Colvin, Los Angeles, Cal., for plaintiffs-appellants.

K.D. Lyders, City Attorney, Oxnard, Cal., for defendant-appellee.

Robert K. Best, Pacific Legal Foundation, Sacramento, Cal., for amicus.

Appeal from the United States District Court for the Central District of California.

Before ALARCON and NELSON, Circuit Judges, and MUECKE, ^* District Judge.

ALARCON, Circuit Judge:

Shelter Creek Development Corporation (Shelter Creek), Leo A. O'Hearn and Margaret E. O'Hearn (the O'Hearns) appeal from a judgment for the City of Oxnard (the City) in an action under 42 U.S.C. Sec. 1983 (1982) challenging the constitutionality of the City's ordinance as applied to their property. We conclude that the matter is not ripe for judicial adjudication. We vacate the district court's judgment on the merits and remand with an order that the matter be dismissed.

I. FACTS

In January 1978, the O'Hearns purchased the Shelter Creek apartment complex in the City of Oxnard. Thereafter, the O'Hearns formed Shelter Creek in order to convert the apartment complex from rental units to a stock cooperative form of ownership.

Beginning in May 1979, the City undertook to regulate the conversion of rental apartments to stock cooperatives. Following a series of interim ordinances, the City adopted Ordinance No. 1805 on April 1, 1980. Ordinance No. 1805 required, inter alia, that units to be converted into stock cooperatives substantially comply with a wide range of building and parking restrictions applicable to new residential condominiums.

Prior to the enactment of Ordinance No. 1805, the O'Hearns informed the City of their position that enactment of the ordinance without an express exemption for the Shelter Creek apartment complex would be contrary to state law. The O'Hearns relied on California Senate Bill (SB) 823, effective January 1, 1980, which expressly included stock cooperatives within the definition of a "subdivision" under the Subdivision Map Act, Cal.Gov't Code Sec. 66424 (West 1983). SB 823 contained a "grandfather clause" that exempted stock cooperative conversions from local control "under the provisions of the Subdivision Map Act," if the application for a public report and required fees had been submitted to the California Department of Real Estate prior to July 1, 1979. Because the O'Hearns had applied and paid the fees for a public report prior to July 1, 1979, they argued, SB 823 precluded the City from regulating the Shelter Creek conversion.

The City rejected the O'Hearns' position, concluding that it had power apart from the Subdivision Map Act to regulate the proposed Shelter Creek conversion. Accordingly, Ordinance No. 1805 was enacted with no exemptions. As so enacted, the ordinance effectively barred the O'Hearns from pursuing conversion of the Shelter Creek complex to a stock cooperative because they were unable to obtain the necessary insurance and funding absent the approval of the City.

It was not economically feasible or physically possible for the Shelter Creek apartment complex to comply with several of the restrictions imposed by Ordinance No. 1805. Ordinance No. 1805 provided for the issuance of special use permits. Neither Shelter Creek nor the O'Hearns, however, applied for a special use permit, nor did they formally request a variance. Instead, approximately two months after the City's enactment of Ordinance No. 1805, Shelter Creek and the O'Hearns instituted an action in Ventura County Superior Court. They sought a declaration that the ordinance was unconstitutional and that it was inapplicable to the Shelter Creek apartment complex because of the grandfather clause in SB 823.

The case was ultimately appealed to the California Supreme Court. That court agreed that the Shelter Creek apartment complex was exempt from the application of Ordinance No. 1805 because of the grandfather clause. Shelter Creek Dev. Corp. v. City of Oxnard, 34 Cal.3d 733, 669 P.2d 948, 195 Cal.Rptr. 361 (1983). The court expressly declined to address the constitutionality of the ordinance. Id. at 735, 669 P.2d at 948, 195 Cal.Rptr. at 361. ¹

Following the successful conclusion of their state court proceedings, plaintiffs instituted the present action under 42 U.S.C. Sec. 1983 (1982). They alleged that the City's policy of regulating conversion of apartments to stock cooperatives was directed solely at plaintiffs and one other developer. They further alleged that implementation of the policy deprived plaintiffs of equal protection of the laws. They also claimed that the ordinance was unconstitutional, both on its face and as applied. They contended that because the restrictions on conversion were not rationally related to legitimate governmental purposes, Ordinance No. 1805 deprived them of a property interest without due process of law. ²

Following a bench trial, the district court entered judgment for the City. Shelter Creek and the O'Hearns appeal from that judgment.

II. JURISDICTION

This court has jurisdiction over the appeal from the district court's final judgment under 28 U.S.C. Sec. 1291 (1982). The appeal was timely filed.

The question of ripeness goes to our subject matter jurisdiction to hear the case. See Duke City Lumber Co. v. Butz, 539 F.2d 220, 221 n. 2 (D.C.Cir.1976) (per curiam) (question of ripeness may be raised sua sponte by appellate court because it goes to court's subject matter jurisdiction), cert. denied, 429 U.S. 1039, 97 S.Ct. 737, 50 L.Ed.2d 751 (1977). We must review and decide the question de novo. See Peter Starr Prod. Co. v. Twin Continental Films, Inc., 783 F.2d 1440, 1442 (9th Cir.1986) ("Subject matter jurisdiction presents a question of law, reviewable de novo by this court.").

III. ANALYSIS

Both the Supreme Court and this court have declared that until a landowner seeks a permit or a variance under a governing land use or zoning ordinance, any claim that the ordinance is unconstitutional as applied to the landowner's property is not ripe for judicial adjudication.

In Agins v. City of Tiburon, 447 U.S. 255, 100 S.Ct. 2138, 65 L.Ed.2d 106 (1980), the appellants claimed that a municipal zoning ordinance was unconstitutional on its face because it took their unimproved land without just compensation, in violation of the fifth and fourteenth amendments. The Supreme Court ruled that because the ordinance, as authoritatively construed by the state court, permitted appellants to construct as many as five residences on their property, the ordinance was not facially unconstitutional. Id. at 260, 262-63, 100 S.Ct. at 2141, 2142-43. The Court declined, however, to address the question whether the ordinance could constitutionally be applied to prevent appellants from building the full complement of five homes: "Because the appellants have not submitted a plan for development of their property as the ordinances permit, there is as yet no concrete controversy regarding the application of the specific zoning provisions." Id. at 260, 100 S.Ct. at 2141; accord MacDonald, Sommer & Frates v. Yolo County, 477 U.S. 340, 106 S.Ct. 2561, 91 L.Ed.2d 285 (1986) (declining to rech merits of taking claim where landowner had failed to secure city's final position regarding application of the challenged zoning regulations to landowner's property); Hodel v. Virginia Surface Mining & Reclamation Ass'n, 452 U.S. 264, 297, 101 S.Ct. 2352, 2371, 69 L.Ed.2d 1 (1981) (constitutionality of application of Surface Mining Control and Reclamation Act not ripe for adjudication where "[t]here [was] no indication in the record that appellees ... availed themselves of the opportunities provided by the Act to obtain administrative relief" by requesting a variance or a waiver of Act's requirements).

In Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985), the Court found a landowner's regulatory taking claim to be premature under both the Just Compensation Clause of the fifth amendment and the Due Process Clause of the fourteenth amendment because the landowner had failed to seek a variance from the challenged ordinance and regulations. Id. at 186, 199-200, 105 S.Ct. at 3116, 3123-24. The Court explained that whether an ordinance is challenged as a taking for which just compensation must be paid under the fifth amendment or as an invalid exercise of police power under the fourteenth amendment, the courts are in no position to assess the constitutionality of the ordinance "until a final decision is made as to how the regulations will be applied to [the landowner's] property." Id. at 200, 105 S.Ct. at 3124.

The landowner in Hamilton Bank, like plaintiffs in the present case, argued that landowners should not be required to seek variances when suit is predicated on 42 U.S.C. Sec. 1983, given the Court's earlier holding that exhaustion of administrative remedies is not a prerequisite to a section 1983 action. Id. at 192, 105 S.Ct. at 3120. See Patsy v. Board of Regents, 457 U.S. 496, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982) (reaffirming prior rulings that exhaustion of state administrative remedies is not a prerequisite to an action under section 1983). The Court rejected the landowner's argument, explaining that "[t]he question whether administrative remedies must be exhausted is conceptually distinct ... from the question whether an administrative action must be final before it is judicially reviewable." 473 U.S. at 192, 105 S.Ct. at 3120.

[T]he finality requirement is concerned with whether the initial decisionmaker has arrived at a definitive position on the issue that inflicts an actual, concrete injury; the exhaustion requirement generally refers to administrative and judicial...