Lai v. City and County of Honolulu

• Court: U.S. Court of Appeals — Ninth Circuit
• Writing for the Court: SCHROEDER
• Citation: Lai v. City and County of Honolulu, 841 F.2d 301 (9th Cir. 1988)
• Decision Date: 07 March 1988
• Docket Number: No. 87-1689,87-1689
• Parties: 18 Envtl. L. Rep. 20,737 Clifford Y.C. LAI and Victoria L. Lai, Plaintiffs-Appellees, v. CITY AND COUNTY OF HONOLULU, a municipal corporation, Defendant-Appellant.

Page 301

841 F.2d 301

18 Envtl. L. Rep. 20,737

Clifford Y.C. LAI and Victoria L. Lai, Plaintiffs-Appellees, v. CITY AND COUNTY OF HONOLULU, a municipal corporation Defendant-Appellant.

No. 87-1689.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Jan. 15, 1988.

Decided March 7, 1988.

Ronald B. Mun, Honolulu, Hawaii, for defendant-appellant.

David Bettencourt, Honolulu, Hawaii, for plaintiffs-appellees.

Appeal from the United States District Court for the District of Hawaii.

Before SKOPIL, Jr. and SCHROEDER, and ALDISERT, ^* Circuit Judges.

SCHROEDER, Circuit Judge:

The City and County of Honolulu appeal the district court's money judgment in favor of the Lais in an inverse condemnation action. In 1975, the City enacted a zoning ordinance, placing restrictions within a designated area on construction more than twenty-five feet above ground level. The purpose was to protect the view of the Punchbowl Crater from the H-1 Freeway. The Lais, owners of a development lease, were denied a Certificate of Appropriateness for their proposed high-rise condominiums due to the zoning ordinance. The Lais sued the City, contending that the ordinance constituted a compensable "taking" of their property, and won a judgment in their favor in the district court. We reverse and remand to the district court with instructions to dismiss because the plaintiffs have no "taking" claim which is yet ripe.

In 1971, the Lais purchased their leasehold interest in a 30,000 square foot lot with rental units in Honolulu. The property is located near the Punchbowl Crater, a historic and scenic attraction. In 1974, the Lais entered into an arrangement with a developer, who planned to build condominium apartments in conformance with the existing zoning height limitation of 350 feet.

In 1975, the City of Honolulu enacted Ordinance Number 4488, establishing the Punchbowl District as Historic, Cultural and Scenic District Number 3. The City's expressed purpose in enacting the ordinance was to establish a scenic easement to protect one view of the Punchbowl Crater from the H-1 Freeway. The ordinance therefore restricted construction more than twenty-five feet above ground level.

In 1976, the Lais' developer requested a Certificate of Appropriateness from the Honolulu City Council to build its condominium apartments. The City Council voted to deny the developer's application, citing eight considerations including the proposed project's height.

On September 14, 1978, the Lais sued the City and County of Honolulu under the Civil Rights Act of 1871, 42 U.S.C. Sec. 1983, challenging the scenic easement imposed upon their property as a "taking" without just compensation and seeking damages. They also asserted alternative theories for compensation or equitable relief.

The facts established at trial, as found by the district court, showed only that a scenic easement had diminished the value of the plaintiffs' property. However, the Supreme Court has specifically stated that its decisions sustaining land-use regulations that "are reasonably related to the promotion of the general welfare, uniformly reject the proposition that diminution in property value, standing alone, can establish a 'taking.' " Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 131, 98 S.Ct. 2646, 2662-63, 57 L.Ed.2d 631 (1978). The district court found that the Lais could build a 51-unit residential development on the property that would conform to the zoning requirements and restrictions. The inability to reap as great a profit as one might have absent the zoning restriction, does not equate with a "taking." William C. Haas & Co. v. City and County of San Francisco, 605 F.2d 1117, 1120-21 (9th Cir.1979), cert. denied, 445 U.S. 928, 100 S.Ct. 1315, 63 L.Ed.2d 761 (1980). In its most recent pronouncement of last Term, the Supreme Court expressly stated that a height limitation preserving the public's scenic view is not a "taking." Nollan v. California Coastal Commission, --- U.S. ----, 107 S.Ct. 3141, 3147-48, 97 L.Ed.2d 677 (1987). Plaintiffs in this case also alleged alternative "taking" theories which the district court did not reach.

We cannot rule definitively on the merits of any of plaintiffs'...