The Supreme Court case that wasn't

Edward Sullivan and Carrie Richter
The Daily Record Newswire

For people interested in land use law, this was to be the battle of the century. Both sides had honed their arguments and press releases to justify their position in an epic confrontation in the U.S. Supreme Court over whether applicants for residential uses were required to contribute lots or apartment units to help local governments meet an affordable housing crisis.

But suddenly, the effort collapsed, so we must await an answer to this question on another occasion.

The city of San Jose, California, adopted a fairly standard (for California) ordinance that required applicants for 20 or more units of residential housing to set aside 15 percent of those units for low and moderate income users. Those units would be covenanted so that for a very long period they would be available only to people in that price range. The city had done everything that California law required it demonstrated the need for such housing in its General (Comprehensive) Plan and stayed within the limits imposed by state law and was backed by the League of California Cities in the subsequent litigation that ensued.

In the other corner was the California Building Industry Association (CBIA), which took the plausible position that the city's demands constituted an exaction that was limited by Supreme Court cases that required a "nexus" (connection) between the demand and purposes of the ordinance and required that this connection be "roughly proportional" to the need created by the development. The CBIA argued that it did not create the housing crisis that the city sought to solve and that its demand was a "taking" under the Fifth Amendment, and thus required just compensation.

The California Supreme Court determined that the inclusionary zoning requirement advanced public welfare, did not constitute an exaction and thus did not implicate the Fifth Amendment. The court added, "The San Jose ordinance is additionally aimed at a number of distinct but nonetheless important and constitutionally permissible public purposes, namely (1) to increase the amount of affordable housing in San Jose so that the municipality can meet its responsibility of providing an adequate supply of housing for individuals and families at all income levels and, at the same time, (2) to assure that new affordable housing is distributed throughout the city in economically diverse developments, avoiding the problems and detrimental effects that municipalities have experienced in the past when low income housing is relegated to separate, isolated locations within the community."

The CBIA filed a petition for certiorari to the U.S. Supreme Court, hoping to secure the four votes (out of nine) necessary for that court to take the case. As per usual, the petition was circulated at the court's weekly conferences and, also as per usual, was carried over while the justices decided whether to take up the case.

However, before that decision was made, the unforeseeable occurred. Justice Antonin Scalia passed away on Feb. 13 and the court found itself short one justice, who would not be replaced until after the next election according to Senate Republicans. Although Justice Scalia was likely to strike down the San Jose ordinance, it is a matter of conjecture as to how the case would be decided either with or without him. A 4-4 decision in the Supreme Court would have the effect of affirming the California Supreme Court decision, although it would not set binding federal precedent. Would the court take the case anyway?

In the end, the court on Feb. 29 denied the petition without comment, except from Justice Clarence Thomas, who said that there were difficulties with the timeliness of the petition, whether the takings cases had been raised properly below and over the grounds on which the California courts had decided the matter. However, Justice Thomas indicated he was likely to rule against the city and looked forward to another opportunity to review a case like this.

Whoever replaces Justice Scalia on the court will soon be required to deal with this matter, as it is very likely the court will be called upon to determine whether local ordinances may constitutionally require applicants to set aside houses or apartment units for low and moderate income dwellers. It is likely there will be another opportunity very soon to deal with this important issue.

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Edward Sullivan is a retired partner in the Portland office of Garvey Schubert Barer. He practiced land use and municipal law for more than 40 years. Contact him at esulliva@gmail. com. Carrie Richter is an owner specializing in land use and municipal law in the Portland office of Garvey Schubert Barer. Contact her at 503-553-3118 or at crichter@gsblaw.com.

Published: Fri, May 13, 2016