503 U.S. 519
No. 90-1947.
Argued Jan. 22, 1992.
Decided April 1, 1992.
Syllabus [FN*]
FN* The syllabus
constitutes no part of the opinion of the Court but has been prepared by
the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Lumber Co., 200 U.S. 321, 337, 26 S.Ct.
282, 287, 50 L.Ed. 499.
The
Fifth Amendment's Takings Clause generally requires just compensation
where the government authorizes a physical occupation of property.
But where the government merely regulates the property's use,
compensation is required only if considerations such as the regulation's
purpose or the extent to which it deprives the owner of the property's
economic use suggests that the regulation has unfairly singled out the
property owner to bear a burden that should be borne by the public as a
whole. Petitioners,
mobile home park owners in respondent Escondido, California, rent pads of
land to mobile home owners. When
the homes are sold, the new owners generally continue to rent the pads.
Under the California Mobilehome Residency Law, the bases upon which
a park owner may terminate a mobile home owner's tenancy are limited to,
inter alia, nonpayment of rent and the park owner's desire to change the
use of his land. The
park owner may not require the removal of a mobile home when it is sold
and may neither charge a transfer fee for the sale nor disapprove of a
purchaser who is able to pay rent.
The state law does not limit the rent the park owner may charge,
but Escondido has a rent control ordinance setting mobile home rents back
to their 1986 levels and prohibiting rent increases without the city
council's approval. The
Superior Court dismissed lawsuits filed by petitioners and others
challenging the ordinance, rejecting the argument that the ordinance
effected a physical taking by depriving park owners of all use and
occupancy of their property and granting to their tenants, and their
tenants' successors, the right to physically permanently occupy and use
the property. The Court of Appeal affirmed.
Held:
1.
The rent control ordinance does not authorize an unwanted physical
occupation of petitioners' property and thus does not amount to a per se
taking. Petitioners'
argument -- that the rent control ordinance authorizes a physical taking
because, coupled with the state law's restrictions, it increases a mobile
home's value by giving the homeowner the right to occupy the pad
indefinitely at a submarket rent -- is unpersuasive.
The government effects a physical taking only where it requires the
landowner to submit to the physical occupation of his land.
Here, petitioners have voluntarily rented their land to mobile home
520 owners and are not required to continue to do so by either the
city or the State. On their face, the laws at issue merely regulate
petitioners' use of their land by regulating the relationship between
landlord and tenant. Any
transfer of wealth from park owners to incumbent mobile home owners in the
form of submarket rent does not itself convert regulation into physical
invasion. Additional
contentions made by petitioners -- that the ordinance benefits current
mobile home owners but not future owners, who must purchase the homes at
premiums resulting from the homes' increased value, and that the ordinance
deprives petitioners of the ability to choose their incoming tenants --
might have some bearing on whether the ordinance causes a regulatory
taking, but have nothing to do with whether it causes a physical taking.
Moreover, the footnote in Loretto v. Teleprompter Manhattan CATV
Corp., 458 U.S. 419, 439, n. 17, 102 S.Ct. 3164, 3178, n. 17, 73 L.Ed.2d
868 -- that a physical taking claim cannot be defeated by an argument that
a landlord can avoid a statute's restrictions by ceasing to rent his
property, because his ability to rent may not be conditioned on forfeiting
the right to compensation for a physical occupation -- has no relevance
here, where there has been no physical taking.
Since petitioners have made no attempt to change how their land is
used, this case also presents no occasion to consider whether the statute,
as applied, prevents them from making a change.
Pp. 1528-1531.
2.
Petitioners' claim that the ordinance constitutes a denial of substantive
due process is not properly before this Court because it was not raised
below or addressed by the state courts.
The question whether this Court's customary refusal to consider
claims not raised or addressed below is a jurisdictional or prudential
rule need not be resolved here, because even if the rule were prudential,
it would be adhered to in this case.
P. 1531.
3.
Also improperly before this Court is petitioners' claim that the ordinance
constitutes a regulatory taking.
The regulatory taking claim is ripe for review;
and the fact that it was not raised below does not mean that it
could not be properly raised before this Court, since once petitioners
properly raised a taking claim, they could have formulated, in this Court,
any argument they liked in support of that claim.
Nonetheless, the claim will not be considered because, under this
Court's Rule 14.1(a), only questions set forth, or fairly included, in the
petition for certiorari are considered. Rule 14.1(a) is prudential, but is
disregarded only where reasons of urgency or economy suggest the need to
address the unpresented question in the case under consideration.
The Rule provides the respondent with notice of the grounds on
which certiorari is sought, thus relieving him of the expense of
unnecessary litigation on the merits and the burden of opposing certiorari
on unpresented questions. It
also assists the Court in selecting the cases in which certiorari
521 will be granted. By
forcing the parties to focus on the questions the Court views as
particularly important, the Rule enables the Court to use its resources
efficiently. Petitioners'
question presented was whether the lower court erred in finding no
physical taking, and the regulatory taking claim is related to, but not
fairly included in, that question.
Thus, petitioners must overcome the very heavy presumption against
consideration of the regulatory taking claim, which they have not done.
While that claim is important, lower courts have not reached
conflicting results on the claim as they have on the physical taking
claim. Prudence also
dictates awaiting a case in which the issue was fully litigated below, to
have the benefit of developed arguments and lower court opinions squarely
addressing the question. Thus,
the regulatory taking issue should be left for the California courts to
address in the first instance.
Pp. 1531-1534.
224
Cal.App.3d 1349, 274 Cal.Rptr. 551 (1990), affirmed.
O'CONNOR, J., delivered the opinion of the Court, in which
REHNQUIST, C.J., and WHITE, STEVENS, SCALIA, KENNEDY, and THOMAS, JJ.,
joined. BLACKMUN, J.,
post, p. 1534, and SOUTER, J., post, p. 1535, filed opinions concurring in
the judgment.
Robert
J. Jagiello, Running Springs, Cal., for petitioners.
Carter G. Phillips, Washington, D.C.,
for respondent.
522
Justice O'CONNOR delivered the opinion of the Court.
The
Takings Clause of the Fifth Amendment provides: "[N]or shall private property be taken for public use,
without just compensation."
Most of our cases interpreting the Clause fall within two distinct
classes. Where the
government authorizes a physical occupation of property (or actually takes
title), the Takings Clause generally requires compensation.
See, e.g., Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S.
419, 426, 102 S.Ct. 3164, 3171, 73 L.Ed.2d 868 (1982).
But where the government merely regulates the use of property,
compensation *523 is required
only if considerations such as the purpose of the regulation or the extent
to which it deprives the owner of the economic use of the property suggest
that the regulation has unfairly singled out the property owner to bear a
burden that should be borne by the public as a whole.
See, e.g., Penn Central Transportation Co. v. New York City, 438
U.S. 104, 123-125, 98 S.Ct. 2646, 2659, 57 L.Ed.2d 631 (1978).
The first category of cases requires courts to apply a clear rule;
the second necessarily entails complex factual assessments of the purposes
and economic effects of government actions.
Petitioners own mobile home parks in Escondido, California.
They contend that a local rent control ordinance, when viewed
against the backdrop of California's Mobilehome Residency Law, amounts to
a physical occupation of their property, entitling them to compensation
under the first category of cases discussed above.
I
The
term "mobile home" is somewhat misleading. Mobile homes are largely immobile as a practical
matter, because the cost of moving one is often a significant fraction of
the value of the mobile home itself.
They are generally placed permanently in parks;
once in place, only about 1 in every 100 mobile homes is ever
moved. Hirsch &
Hirsch, Legal-Economic Analysis of Rent Controls in a Mobile Home Context: Placement Values and Vacancy Decontrol, 35 UCLA L.Rev. 399,
405 (1988). A mobile
home owner typically rents a plot of land, called a "pad," from
the owner of a mobile home park. The park owner provides private roads
within the park, common facilities such as washing machines or a swimming
pool, and often utilities. The
mobile home owner often invests in site-specific improvements such as a
driveway, steps, walkways, porches, or landscaping.
When the mobile home owner wishes to move, the mobile home is
usually sold in place, and the purchaser continues to rent the pad on
which the mobile home is located.
524
In 1978, California enacted its Mobilehome Residency Law, Cal.Civ.Code
Ann. § 798 et seq. (West 1982 and Supp.1991).
The legislature found "that, because of the high cost of
moving mobilehomes, the potential for damage resulting therefrom, the
requirements relating to the installation of mobilehomes, and the cost of
landscaping or lot preparation, it is necessary that the owners of
mobilehomes occupied within mobilehome parks be provided with the unique
protection from actual or constructive eviction afforded by the provisions
of this chapter." § 798.55(a).
The
Mobilehome Residency Law limits the bases upon which a park owner may
terminate a mobile home owner's tenancy.
These include the nonpayment of rent, the mobile home owner's
violation of law or park rules, and the park owner's desire to change the
use of his land. §
798.56. While a
rental agreement is in effect, however, the park owner generally may not
require the removal of a mobile home when it is sold.
§ 798.73.
The park owner may neither charge a transfer fee for the sale, §
798.72, nor disapprove of the purchaser, provided that the purchaser has
the ability to pay the rent, § 798.74.
The Mobilehome Residency Law contains a
number of other detailed provisions, but none limit the rent the park
owner may charge.
In
the wake of the Mobilehome Residency Law, various communities in
California adopted mobile home rent control ordinances.
See Hirsch & Hirsch, supra, at 408-411. The voters of Escondido did the same in 1988 by
approving Proposition K, the rent control ordinance challenged here.
The ordinance sets rents back to their 1986 levels and prohibits
rent increases without the approval of the city council.
Park owners may apply to the council for rent increases at any
time. The council must
approve any increases it determines to be "just, fair and
reasonable," after considering the following nonexclusive list of
factors: (1) changes in the
Consumer Price Index; (2) the
rent charged for comparable mobile home pads in Escondido;
(3) the length of time since
525 the last rent increase; (4)
the cost of any capital improvements related to the pad or pads at issue;
(5) changes in property taxes;
(6) changes in any rent paid by the park owner for the land;
(7) changes in utility charges;
(8) changes in operating and maintenance expenses;
(9) the need for repairs other than for ordinary wear and tear;
(10) the amount and quality of services provided to the affected
tenant; and (11) any lawful
existing lease. Ordinance
§ 4(g), App. 11-12.
Petitioners John and Irene Yee own the Friendly Hills and
Sunset Terrace Mobile Home Parks, both of which are located in the city of
Escondido. A few months
after the adoption of Escondido's rent control ordinance, they filed suit
in San Diego County Superior Court.
According to the complaint, "[t]he rent control law has had
the effect of depriving the plaintiffs of all use and occupancy of [their]
real property and granting to the tenants of mobilehomes presently in The
Park, as well as the successors in interest of such tenants, the right to
physically permanently occupy and use the real property of
Plaintiff." Id., at 3,
¶ 6. The Yees
requested damages of $6 million, a declaration that the rent control
ordinance is unconstitutional, and an injunction barring the ordinance's
enforcement. Id., at 5-6.
In
their opposition to the city's demurrer, the Yees relied almost entirely
on Hall v. Santa Barbara, 833 F.2d 1270 (CA9 1987), cert. denied, 485 U.S.
940, 108 S.Ct. 1120, 99 L.Ed.2d 281 (1988), which had held that a similar
mobile home rent control ordinance effected a physical taking under
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S.Ct.
3164, 73 L.Ed.2d 868 (1982). The
Yees candidly admitted that "in fact, the Hall decision was used [as]
a guide in drafting the present Complaint."
2 Tr. 318, Points & Authorities in Opposition to Demurrer 4. The Superior Court nevertheless sustained the city's
demurrer and dismissed the Yees' complaint.
App. to Pet. for Cert. C-42.
The
Yees were not alone. Eleven
other park owners filed similar suits against the city shortly afterwards,
and all were 526 dismissed.
By stipulation, all 12 cases were consolidated for appeal;
the parties agreed that all would be submitted for decision by the
California Court of Appeal on the briefs and oral argument in the Yee
case.
The
Court of Appeal affirmed, in an opinion primarily devoted to expressing
the court's disagreement with the reasoning of Hall. The court concluded:
"Loretto in no way suggests that the Escondido ordinance
authorizes a permanent physical occupation of the landlord's property and
therefore constitutes a per se taking."
224 Cal.App.3d 1349, 1358, 274 Cal.Rptr. 551, 557 (1990). The California Supreme Court denied review.
App. to Pet. for Cert. B-41.
Eight
of the twelve park owners, including the Yees, joined in a petition for
certiorari. We granted
certiorari, 502 U.S. 905, 112 S.Ct. 294, 116 L.Ed.2d 239 (1991), to
resolve the conflict between the decision below and those of two of the
Federal Courts of Appeals, in Hall, supra, and Pinewood Estates of
Michigan v. Barnegat Township Leveling Board, 898 F.2d 347 (CA3 1990).
II
Petitioners do not claim that the ordinary rent control
statutes regulating housing throughout the country violate the Takings
Clause. Brief for
Petitioners 7, 10. Cf.
Pennell v. San Jose, 485 U.S. 1, 12, n. 6, 108 S.Ct. 849, 858, n. 6, 99
L.Ed.2d 1 (1988); Loretto, supra, 458 U.S. at 440, 102 S.Ct. at 3178.
Instead, their argument is predicated on the unusual economic
relationship between park owners and mobile home owners.
Park owners may no longer set rents or decide who their tenants
will be. As a result,
according to petitioners, any reduction in the rent for a mobile home pad
causes a corresponding increase in the value of a mobile home, because the
mobile home owner now owns, in addition to a mobile home, the right to
occupy a pad at a rent below the value that would be set by the free
market. Cf. Hirsch
& Hirsch, 35 UCLA L.Rev., at 425.
Because under the California Mobilehome Residency Law the park
owner cannot evict a mobile 527
home owner or easily convert the property to other uses, the argument
goes, the mobile home owner is effectively a perpetual tenant of the park,
and the increase in the mobile home's value thus represents the right to
occupy a pad at below-market rent indefinitely.
And because the Mobilehome Residency Law permits the mobile home
owner to sell the mobile home in place, the mobile home owner can receive
a premium from the purchaser corresponding to this increase in value.
The amount of this premium is not limited by the Mobilehome
Residency Law or the Escondido ordinance.
As a result, petitioners conclude, the rent control ordinance has
transferred a discrete interest in land -- the right to occupy the land
indefinitely at a submarket rent -- from the park owner to the mobile home
owner. Petitioners
contend that what has been transferred from park owner to mobile home
owner is no less than a right of physical occupation of the park owner's
land.
This
argument, while perhaps within the scope of our regulatory taking cases,
cannot be squared easily with our cases on physical takings. The government effects a physical taking only where it
requires the landowner to submit to the physical occupation of his land.
"This element of required acquiescence is at the heart of the
concept of occupation." FCC v. Florida Power Corp., 480 U.S. 245, 252, 107 S.Ct.
1107, 1112, 94 L.Ed.2d 282 (1987).
Thus whether the government floods a landowner's property, Pumpelly
v. Green Bay Co., 13 Wall. 166, 20 L.Ed. 557 (1872), or does no more than
require the landowner to suffer the installation of a cable, Loretto,
supra, the Takings Clause requires compensation if the government
authorizes a compelled physical invasion of property.
But
the Escondido rent control ordinance, even when considered in conjunction
with the California Mobilehome Residency Law, authorizes no such thing.
Petitioners voluntarily rented their land to mobile home owners. At least on the face of the regulatory scheme, neither
the city nor the State compels petitioners, once they have rented their
property 528 to tenants, to
continue doing so. To
the contrary, the Mobilehome Residency Law provides that a park owner who
wishes to change the use of his land may evict his tenants, albeit with 6
or 12 months notice. Cal.Civ.Code
Ann. § 798.56(g). Put bluntly, no government has required any physical
invasion of petitioners' property.
Petitioners' tenants were invited by petitioners, not forced upon
them by the government. See Florida Power, supra, 480 U.S. at 252-253, 107 S.Ct.
at 1112-1113. While the
"right to exclude" is doubtless, as petitioners assert,
"one of the most essential sticks in the bundle of rights that are
commonly characterized as property," Kaiser Aetna v. United States,
444 U.S. 164, 176, 100 S.Ct. 383, 391, 62 L.Ed.2d 332 (1979), we do not
find that right to have been taken from petitioners on the mere face of
the Escondido ordinance.
Petitioners
suggest that the statutory procedure for changing the use of a mobile
home park is in practice "a kind of gauntlet," in that they
are not in fact free to change the use of their land.
Reply Brief for Petitioners 10, n. 16.
Because petitioners do not claim to have run that gauntlet,
however, this case provides no occasion to consider how the procedure has
been applied to petitioners' property, and we accordingly confine
ourselves to the face of the statute.
See Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U.S. 470,
493-495, 107 S.Ct. 1232, 1246-1247, 94 L.Ed.2d 472 (1987).
A different case would be presented were the statute, on its face
or as applied, to compel a landowner over objection to rent his property
or to refrain in perpetuity from terminating a tenancy.
See Florida Power, supra, 480 U.S., at 251-252, n. 6, 107 S.Ct., at
1111-1112, n. 6; see also
Nollan v. California Coastal Comm'n, 483 U.S. 825, 831-832, 107 S.Ct.
3141, 3145-3146, 97 L.Ed.2d 677 (1987);
Fresh Pond Shopping Center, Inc. v. Callahan, 464 U.S. 875, 877,
104 S.Ct. 218, 219, 78 L.Ed.2d 215 (1983) (REHNQUIST, J., dissenting).
On their face, the state and local laws at issue here merely
regulate petitioners' use of their land by regulating the relationship
between landlord and tenant. "This
Court has consistently affirmed that States have broad power to regulate
housing conditions in general and the landlord-tenant relationship 529 in particular without paying compensation for all economic
injuries that such regulation entails."
Loretto, 458 U.S., at 440, 102 S.Ct., at 3178. See also Florida Power, supra, 480 U.S., at 252, 107
S.Ct., at 1112 ("statutes regulating the economic relations of
landlords and tenants are not per se takings").
When a landowner decides to rent his land to tenants, the
government may place ceilings on the rents the landowner can charge, see,
e.g., Pennell, supra, 485 U.S., at 12, n. 6, 108 S.Ct., at 857‑ 858,
n. 6, or require the landowner to accept tenants he does not like, see,
e.g., Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 261, 85
S.Ct. 348, 359, 13 L.Ed.2d 258 (1964), without automatically having to pay
compensation. See also PruneYard Shopping Center v. Robins, 447 U.S.
74, 82-84, 100 S.Ct. 2035, 2041-2042, 64 L.Ed.2d 741 (1980). Such forms of regulation are analyzed by engaging in
the "essentially ad hoc, factual inquiries" necessary to
determine whether a regulatory taking has occurred. Kaiser Aetna, supra,
444 U.S., at 175, 100 S.Ct., at 390.
In the words of Justice Holmes, "while property may be
regulated to a certain extent, if regulation goes too far it will be
recognized as a taking." Pennsylvania
Coal Co. v. Mahon, 260 U.S. 393, 415, 43 S.Ct. 158, 160, 67 L.Ed. 322
(1922).
Petitioners
emphasize that the ordinance transfers wealth from park owners to
incumbent mobile home owners. Other
forms of land use regulation, however, can also be said to transfer wealth
from the one who is regulated to another.
Ordinary rent control often transfers wealth from landlords to
tenants by reducing the landlords' income and the tenants' monthly
payments, although it does not cause a one‑time transfer of value as
occurs with mobile homes. Traditional
zoning regulations can transfer wealth from those whose activities are
prohibited to their neighbors; when
a property owner is barred from mining coal on his land, for example, the
value of his property may decline but the value of his neighbor's property
may rise. The mobile
home owner's ability to sell the mobile home at a premium may make this
wealth transfer more visible than in the ordinary case, see Epstein, Rent
Control and the Theory of Efficient Regulation, 54 Brooklyn L.Rev. 741,
758-759 (1988), but the existence
530 of the transfer in itself does not convert regulation into
physical invasion.
Petitioners also rely heavily on their allegation that the
ordinance benefits incumbent mobile home owners without benefiting future
mobile home owners, who will be forced to purchase mobile homes at
premiums. Mobile homes,
like motor vehicles, ordinarily decline in value with age.
But the effect of the
rent control ordinance, coupled with the restrictions on the park owner's
freedom to reject new tenants, is to increase significantly the value of
the mobile home. This
increased value normally benefits only the tenant in possession at the
time the rent control is imposed.
See Hirsch & Hirsch, 35 UCLA L.Rev., at 430-431.
Petitioners are correct in citing the existence of this premium as
a difference between the alleged effect of the Escondido ordinance and
that of an ordinary apartment rent control statute. Most apartment tenants
do not sell anything to their successors (and are often prohibited from
charging "key money"), so a typical rent control statute will
transfer wealth from the landlord to the incumbent tenant and all future
tenants. By contrast,
petitioners contend that the Escondido ordinance transfers wealth only to
the incumbent mobile home owner.
This effect might have some bearing on whether the ordinance causes
a regulatory taking, as it may shed some light on whether there is a
sufficient nexus between the effect of the ordinance and the objectives it
is supposed to advance. See
Nollan v. California Coastal Comm'n, supra, 483 U.S., at 834-835, 107 S.Ct.,
at 3147-3148. But it
has nothing to do with whether the ordinance causes a physical taking.
Whether the ordinance benefits only current mobile home owners or
all mobile home owners, it does not require petitioners to submit to the
physical occupation of their land.
The
same may be said of petitioners' contention that the ordinance amounts to
compelled physical occupation because it deprives petitioners of the
ability to choose their incoming
531 tenants. [FN*] Again,
this effect may be relevant to a regulatory taking argument, as it may be
one factor a reviewing court would wish to consider in determining whether
the ordinance unjustly imposes a burden on petitioners that should
"be compensated by the government, rather than remain[ing]
disproportionately concentrated on a few persons."
Penn Central Transportation Co. v. New York City, 438 U.S., at 124,
98 S.Ct., at 2659. But
it does not convert regulation into the unwanted physical occupation of
land. Because they
voluntarily open their property to occupation by others, petitioners
cannot assert a per se right to compensation based on their inability to
exclude particular individuals.
See Heart of Atlanta Motel, Inc. v. United States, 379 U.S., at
261, 85 S.Ct., at 359, see also id., at 259, 85 S.Ct., at 358 ("[A]ppellant
has no 'right' to select its guests as it sees fit, free from governmental
regulation"); PruneYard
Shopping Center v. Robins, 447 U.S., at 82-84, 100 S.Ct., at 2041-2042.
FN* Strictly
speaking, the Escondido rent control ordinance only limits rents. Petitioners' inability to select their incoming tenants
is a product of the State's Mobilehome Residency Law, the
constitutionality of which has never been at issue in this case.
(The State, moreover, has never been a party.) But we understand petitioners to be making a more
subtle argument -- that before the adoption of the ordinance they were
able to influence a mobile home owner's selection of a purchaser by
threatening to increase the rent for prospective purchasers they
disfavored. To the
extent the rent control ordinance deprives petitioners of this type of
influence, petitioners' argument is one we must consider.
Petitioners' final line of argument rests on a footnote in
Loretto, in which we rejected the contention that "the landlord could
avoid the requirements of [the statute forcing her to permit cable to be
permanently placed on her property] by ceasing to rent the building to
tenants." We found
this possibility insufficient to defeat a physical taking claim, because
"a landlord's ability to rent his property may not be conditioned on
his forfeiting the right to compensation for a physical occupation."
Loretto, 458 U.S., at 439, n. 17, 102 S.Ct., at 3178 n. 17.
Petitioners argue that if they have to leave the mobile home park
business in order to avoid the strictures of the Escondido
532 ordinance, their ability to rent their property has in fact been
conditioned on such a forfeiture.
This argument fails at its base, however, because there has simply
been no compelled physical occupation giving rise to a right to
compensation that petitioners could have forfeited. Had the city required such an occupation, of course,
petitioners would have a right to compensation, and the city might then
lack the power to condition petitioners' ability to run mobile home parks
on their waiver of this right.
Cf. Nollan v. California Coastal Comm'n, 483 U.S., at 837, 107 S.Ct.,
at 3148. But because the ordinance does not effect a physical
taking in the first place, this footnote in Loretto does not help
petitioners.
With respect to physical takings, then, this case is not far
removed from FCC v. Florida
Power Corp., 480 U.S. 245, 107 S.Ct. 1107, 94 L.Ed.2d 282 (1987), in which
the respondent had voluntarily leased space on its utility poles to a
cable television company for the installation of cables.
The Federal Government, exercising its statutory authority to
regulate pole attachment agreements, substantially reduced the annual
rent. We rejected the
respondent's claim that "it is a taking under Loretto for a tenant
invited to lease at a rent of $7.15 to remain at the regulated rent of
$1.79." Id., 480 U.S., at 252, 107 S.Ct., at 1112.
We explained that "it is the invitation, not the rent, that
makes the difference. The line which separates [this case] from Loretto is
the unambiguous distinction between a ... lessee and an interloper with a
government license." Id.,
at 252-253, 107 S.Ct., at 1112.
The distinction is equally unambiguous here.
The Escondido rent control ordinance, even considered against the
backdrop of California's Mobilehome Residency Law, does not authorize an
unwanted physical occupation of petitioners' property.
It is a regulation of petitioners' use of their property, and thus
does not amount to a per se taking.
III
In this Court, petitioners attempt to challenge the ordinance
on two additional grounds: They
argue that it constitutes a denial of substantive due process and a
regulatory 533 taking. Neither of these claims is properly before us.
The first was not raised or addressed below, and the second is not
fairly included in the question on which we granted certiorari.
A
The Yees did not include a due process claim in their complaint.
Nor did petitioners raise a due process claim in the Court of
Appeal. It was not
until their petition for review in the California Supreme Court that
petitioners finally raised a substantive due process claim.
But the California Supreme Court denied discretionary review.
Such a denial, as in this Court, expresses no view as to the
merits. See People v. Triggs, 8 Cal.3d 884, 890-891, 106
Cal.Rptr. 408, 412, 506 P.2d 232, 236 (1973).
In short, petitioners did not raise a substantive due process claim
in the state courts, and no state court has addressed such a claim.
In reviewing the judgments of state courts under the
jurisdictional grant of 28 U.S.C. § 1257, the Court has, with very rare
exceptions, refused to consider petitioners' claims that were not raised
or addressed below. Illinois v. Gates, 462 U.S. 213, 218-220, 103 S.Ct.
2317, 2321-2323, 76 L.Ed.2d 527 (1983).
While we have expressed inconsistent views as to whether this rule
is jurisdictional or prudential in cases arising from state courts, see
ibid., we need not resolve the question here.
(In cases arising from federal courts, the rule is prudential only. See, e.g., Carlson v. Green, 446 U.S. 14, 17, n. 2, 100
S.Ct. 1468, 1470, n. 2, 64 L.Ed.2d 15 (1980).) Even if the rule were
prudential, we would adhere to it in this case.
Because petitioners did not raise their substantive due process
claim below, and because the state courts did not address it, we will not
consider it here.
B
As a preliminary matter, we must address respondent's assertion
that a regulatory taking claim is unripe because petitioners have not
sought rent increases. While respondent is correct that a claim that the ordinance effects a
regulatory 534 taking as
applied to petitioners' property would be unripe for this reason, see
Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson
City, 473 U.S. 172, 186-197, 105 S.Ct. 3108, 3116-3122, 87 L.Ed.2d 126
(1985), petitioners mount a facial challenge to the ordinance.
They allege in this Court that the ordinance does not "
'substantially advance' " a " 'legitimate state interest' "
no matter how it is applied. See
Nollan v. California Coastal Comm'n, supra, 483 U.S., at 834, 107 S.Ct.,
at 3147; Agins v. Tiburon,
447 U.S. 255, 260, 100 S.Ct. 2138, 2141, 65 L.Ed.2d 106 (1980).
As this allegation does not depend on the extent to which
petitioners are deprived of the economic use of their particular pieces of
property or the extent to which these particular petitioners are
compensated, petitioners' facial challenge is ripe.
See Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U.S., at
495, 107 S.Ct., at 1247; Agins, supra, 447 U.S., at 260, 100 S.Ct., at 2141.
We must also reject respondent's contention that the regulatory
taking argument is not properly before us because it was not made below.
It is unclear whether petitioners made this argument below:
Portions of their complaint and briefing can be read either to
argue a regulatory taking or to support their physical taking argument.
For the same reason it is equally ambiguous whether the Court of
Appeal addressed the issue. Yet
petitioners' regulatory taking argument stands in a posture different from
their substantive due process claim.
Petitioners unquestionably raised a taking claim in the state
courts. The question whether
the rent control ordinance took their property without compensation, in
violation of the Fifth Amendment's Takings Clause, is thus properly before
us. Once a federal
claim is properly presented, a party can make any argument in support of
that claim; parties are not
limited to the precise arguments they made below.
Bankers Life & Casualty Co. v. Crenshaw, 486 U.S. 71, 78, n. 2,
108 S.Ct. 1645, 1650, n. 2, 100 L.Ed.2d 62 (1988); Gates, supra, 462 U.S.,
at 219-220, 103 S.Ct., at 2322-2323;
Dewey v. Des Moines, 173 U.S. 193, 197-198, 19 S.Ct. 379, 380-381,
43 L.Ed. 665 (1899). Petitioners' arguments that the ordinance constitutes
a taking in two different 535
ways, by physical occupation and by regulation, are not separate claims.
They are, rather, separate arguments in support of a single claim
-- that the ordinance effects an unconstitutional taking. Having raised a taking claim in the state courts,
therefore, petitioners could have formulated any argument they liked in
support of that claim here.
A litigant seeking review in this Court of a claim properly
raised in the lower courts thus generally possesses the ability to frame
the question to be decided in any way he chooses, without being limited to
the manner in which the question was framed below.
While we have on occasion rephrased the question presented by a
petitioner, see, e.g., Ankenbrandt v. Richards, 502 U.S. 1023, 112 S.Ct.
855, 116 L.Ed.2d 764 (1992), or requested the parties to address an
important question of law not raised in the petition for certiorari, see,
e.g., Payne v. Tennessee, 498 U.S. 1080, 111 S.Ct. 1407, 112 L.Ed.2d 1038
(1991), by and large it is the petitioner himself who controls the scope
of the question presented. The
petitioner can generally frame the question as broadly or as narrowly as
he sees fit.
The framing of the question presented has significant
consequences, however, because under this Court's Rule 14.1(a), "[o]nly
the questions set forth in the petition, or fairly included therein, will
be considered by the Court." While "[t]he statement of any
question presented will be deemed to comprise every subsidiary question
fairly included therein," ibid., we ordinarily do not consider
questions outside those presented in the petition for certiorari. See,
e.g., Berkemer v. McCarty, 468 U.S. 420, 443, n. 38, 104 S.Ct.
3138, 3152, n. 38, 82 L.Ed.2d 317 (1984).
This rule is prudential in nature, but we disregard it "only
in the most exceptional cases," Stone v. Powell, 428 U.S. 465, 481,
n. 15, 96 S.Ct. 3037, 3046, n. 15, 49 L.Ed.2d 1067 (1976), where reasons
of urgency or of economy suggest the need to address the unpresented
question in the case under consideration.
Rule 14.1(a) serves two important and related purposes.
First, it provides the respondent with notice of the grounds upon
which the petitioner is seeking certiorari, and enables
536 the respondent to sharpen the arguments as to why certiorari
should not be granted. Were we routinely to consider questions beyond those
raised in the petition, the respondent would lack any opportunity in
advance of litigation on the merits to argue that such questions are not
worthy of review. Where,
as is not unusual, the decision below involves issues on which the
petitioner does not seek certiorari, the respondent would face the
formidable task of opposing certiorari on every issue the Court might
conceivably find present in the case.
By forcing the petitioner to choose his questions at the outset,
Rule 14.1(a) relieves the respondent of the expense of unnecessary
litigation on the merits and the burden of opposing certiorari on
unpresented questions.
Second, Rule 14.1(a) assists the Court in selecting the cases
in which certiorari will be granted.
Last Term alone we received over 5,000 petitions for certiorari,
but we have the capacity to decide only a small fraction of these cases on
the merits. To use our
resources most efficiently, we must grant certiorari only in those cases
that will enable us to resolve particularly important questions.
Were we routinely to entertain questions not presented in the
petition for certiorari, much of this efficiency would vanish, as parties
who feared an inability to prevail on the question presented would be
encouraged to fill their limited briefing space and argument time with
discussion of issues other than the one on which certiorari was granted.
Rule 14.1(a) forces the parties to focus on the questions the Court has
viewed as particularly important, thus enabling us to make efficient use
of our resources.
We granted certiorari on a single question pertaining to the
Takings Clause: "Two
federal courts of appeal have held that the transfer of a premium value to
a departing mobilehome tenant, representing the value of the right to
occupy at a reduced rate under local mobilehome rent control ordinances,
constitute[s] an impermissible taking.
Was it error for the state appellate court to disregard the rulings
and 537 hold that there was no taking under the fifth and fourteenth
amendments?" This
was the question presented by petitioners.
Pet. for Cert. i. It
asks whether the court below erred in disagreeing with the holdings of the
Courts of Appeals for the Third and Ninth Circuits in Pinewood Estates of
Michigan v. Barnegat Township Leveling Board, 898 F.2d 347 (CA3 1990), and
Hall v. Santa Barbara, 833 F.2d 1270 (CA9 1987), cert. denied, 485 U.S.
940, 108 S.Ct. 1120, 99 L.Ed.2d 281 (1988).
These cases, in turn, held that mobile home ordinances
effected physical takings, not regulatory takings.
Fairly construed, then, petitioners' question presented is the
equivalent of the question "Did the court below err in finding no
physical taking?"
Whether or not the ordinance effects a regulatory taking is a
question related to the one petitioners presented, and perhaps
complementary to the one petitioners presented, but it is not "fairly
included therein." Consideration
of whether a regulatory taking occurred would not assist in resolving
whether a physical taking occurred as well;
neither of the two questions is subsidiary to the other.
Both might be subsidiary to a question embracing both -- Was there
a taking? -- but they exist side by side, neither encompassing the other.
Cf. American Nat. Bank & Trust Co. of Chicago v. Haroco, Inc., 473
U.S. 606, 608, 105 S.Ct. 3291, 3292, 87 L.Ed.2d 437 (1985) (question
whether complaint adequately alleges conduct of racketeering enterprise is
not fairly included in question whether statute requires that plaintiff suffer damages
through defendant's conduct of such an enterprise).
Rule 14.1(a) accordingly creates a heavy presumption against
our consideration of petitioners' claim that the ordinance causes a
regulatory taking. Petitioners
have not overcome that presumption.
While the regulatory taking question is no doubt important, from an
institutional perspective it is not as important as the physical taking
question. The lower courts have not reached conflicting results,
so far as we know, on whether similar mobile home rent 538 control ordinances effect regulatory takings.
They have reached conflicting results over whether such ordinances
cause physical takings; such a conflict is, of course, a substantial reason for
granting certiorari under this Court's Rule 10.
Moreover, the conflict is between two courts whose jurisdiction
includes California, the State with the largest population and one with a
relatively high percentage of the Nation's mobile homes.
Forum shopping is thus of particular concern. See Azul Pacifico, Inc. v. Los Angeles, 948 F.2d 575,
579 (CA9 1991) (mobile home park owners may file physical taking suits in
either state or federal court). Prudence also dictates awaiting a case in
which the issue was fully litigated below, so that we will have the
benefit of developed arguments on both sides and lower court opinions
squarely addressing the question.
See Lytle v. Household Mfg., Inc., 494 U.S. 545, 552, n. 3, 110
S.Ct. 1331, 1336, n. 3, 108 L.Ed.2d 504 (1990) ("Applying our
analysis ... to the facts of a particular case without the benefit of a
full record or lower court determinations is not a sensible exercise of
this Court's discretion"). In fact, were we to address the issue here, we would
apparently be the first court in the Nation to determine whether an
ordinance like this one effects a regulatory taking.
We will accordingly follow Rule 14.1(a), and consider only the
question petitioners raised in seeking certiorari.
We leave the regulatory taking issue for the California courts to
address in the first instance.
IV
We made this observation in Loretto:
"Our holding
today is very narrow. We
affirm the traditional rule that a permanent physical occupation of
property is a taking. In
such a case, the property owner entertains a historically rooted
expectation of compensation, and the character of the invasion is
qualitatively more intrusive than perhaps any other category of property
regulation. We do not,
however, question the equally substantial authority upholding a State's
539 broad power to impose appropriate restrictions upon an owner's use
of his property." 458
U.S., at 441, 102 S.Ct., at 3179.
We respected this distinction again in Florida Power, where we
held that no taking occurs under Loretto when a tenant invited to lease at
one rent remains at a lower regulated rent.
Florida Power, 480 U.S., at 252-253, 107 S.Ct., at 1112-1113.
We continue to observe the distinction today.
Because the Escondido rent control ordinance does not compel a
landowner to suffer the physical occupation of his property, it does not
effect a per se taking under Loretto.
The judgment of the Court of Appeal is accordingly
Affirmed.
Justice BLACKMUN, concurring in the judgment.
I agree with the Court that the Escondido ordinance is not a
taking under this Court's analysis in Loretto v. Teleprompter Manhattan
CATV Corp., 458 U.S. 419, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982).
I also conclude that the substantive due process and regulatory
taking claims are not properly raised in this Court.
For that reason, I, unlike the Court, do not decide whether the
regulatory taking claim is or is not ripe, or which of
petitioners' arguments would or would not be relevant to such a claim.
Justice SOUTER, concurring in the judgment.
I concur in the judgment and would join the Court's opinion
except for its references to the relevance and significance of
petitioners' allegations to a claim of regulatory taking.
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