Environmental Protection

Guggenheim v. City of Goleta

At issue in Guggenheim v. City of Goleta was whether, under Palazzolo v. Rhode Island, the purchaser of property subject to a regulatory restriction foreclosed from challenging the restriction as a violation of the Takings Clause?

Case Summary

On May 15, 2010, Constitutional Accountability Center (CAC) filed a brief in the U.S. Court of Appeals for the Ninth Circuit to push back against an unprecedented expansion of property rights under the Fifth Amendment’s guarantee against uncompensated “takings” of private property. The full Ninth Circuit voted to reconsider en banc the panel decision in Guggenheim v. City of Goleta, in which Judge Jay Bybee ruled that the City’s rent control ordinance was unconstitutional under the Takings Clause. CAC was joined on the brief by the American Planning Association (APA), APA California, and the Western Center on Law and Poverty.

The Guggenheims sued the City of Goleta because they claim that a rent control ordinance aimed at protecting mobile home residents and ensuring affordable housing is an unconstitutional “taking” of their property in that it prevents them from extracting the maximum profits from the mobile home park they own. The problem for their claim, however, is that they purchased the park with the rent control plan in place and, accordingly, the price they paid for it reflected a discount based on the reduced rental profits. Thus, they got exactly what they paid for: a mobile home park subject to rent control. The City took nothing from what they bought.

As even Judge Bybee admitted in his ruling, the Supreme Court has never found a rent control regulation–or any regulation of any kind–to be unconstitutional on its face. Courts have been considering the constitutionality of rent control ordinances under several different theories and across many years and not a single court has found rent control to be a taking, without being overruled by the Supreme Court, that is. As CAC’s brief explains, this is not all that surprising, for it is wholly appropriate for courts to exercise particular restraint in declaring regulatory takings, given that the text and history of the Fifth Amendment show that the Founders intended to limit only physical takings of property for public use without just compensation. Nonetheless, Judge Bybee found a taking on a facial challenge, breaking new jurisprudential ground, under facts where such a result could hardly be more unjustified.

On December 22, 2010, the en banc Ninth Circuit rejected the misguided panel decision. In a lopsided 8-3 decision written by conservative Judge Anthony Kleinfeld (who had dissented from Judge Bybee’s earlier opinion for the three-judge panel), the Ninth Circuit agreed with CAC, dismissing the notion that anything had been taken from the Guggenheims. Instead, Judge Kleinfeld and seven of his colleagues – including Judge Alfred Goodwin, who had previously joined Judge Bybee’s opinion – agreed that the District Court had it right in the first place, that the Guggenheims “got exactly what they bargained for when they purchased the Park – a mobile-home park subject to” rent control.

On May 16, 2011, the Supreme Court denied the Guggenheims’ petition for a Writ of Certiorari.

Case Timeline

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