FindLaw - No. 01-1325 - Washington Legal Foundation, et al. v. Legal Foundation, et al. of Washington, et al.

Supreme Court Briefs

Supreme Court of the United States

No. 01-1325

================================================================

In The

Supreme Court of the United States

---------------------------------

WASHINGTON LEGAL FOUNDATION, ALLEN D. BROWN,

DENNIS H. DAUGS, GREG HAYES,

and L. DIAN MAXWELL,

Petitioners,

LEGAL FOUNDATION OF WASHINGTON;

KATRIN E. FRANK, in her official capacity as President of the

Legal Foundation of Washington; and GERRY L. ALEXANDER,

BOBBE J. BRIDGE, THOMAS CHAMBERS, FAITH IRELAND,

CHARLES W. JOHNSON, BARBARA A. MADSEN, SUSAN

OWENS, and CHARLES Z. SMITH, in their official capacities as

Justices of the Supreme Court of Washington,

Respondents.

---------------------------------

On Writ Of Certiorari To The United States Court

Of Appeals For The Ninth Circuit

---------------------------------

BRIEF OF THE CITY AND COUNTY OF SAN FRANCISCO

AMICUS CURIAE

IN SUPPORT OF RESPONDENTS

---------------------------------

ENNIS

J. H

ERRERA

City Attorney

NDREW

W. S

CHWARTZ

Counsel of Record

USAN

LEVELAND

-K

NOWLES

LLEN

ORMAN

Deputy City Attorneys

City Hall, Room 234

1 Dr. Carlton B. Goodlett

Place

San Francisco, California

94102-4603

(415) 554-4620

OHN

D. E

CHEVERRIA

EORGETOWN

NVIRONMENTAL

OLICY

NSTITUTE

EORGETOWN

NIVERSITY

ENTER

600 New Jersey Avenue, N.W.

Washington, D.C. 20001

(202) 662-9850

Attorneys for Amicus Curiae

City and County of San Francisco

================================================================

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES........................................ ii

INTRODUCTION AND SUMMARY OF ARGU-

MENT...................................................................... 1

ARGUMENT ............................................................... 2

I. MONEY DAMAGES IS THE EXCLUSIVE

REMEDY FOR A TAKING ..............................

II. PETITIONERS FAIL TO ESTABLISH AN

EXCEPTION TO THE RULE THAT

EQUITABLE RELIEF IS NOT AVAILABLE

FOR A TAKING ...............................................

A. Equitable Relief is Not Available on the

Theory that the Government Would Not

Have Intended to Maintain the Program

If It Knew that a Taking Would Result ....

B. The Asserted Unavailability of Compen-

sation in State Court Does Not Transform

the Type of Relief Available for a Taking in

Federal Court...............................................

C. An Injunction is Generally Appropriate

Relief for "Arbitrary" Government Action,

But a Claim Under the Takings Clause

Is Not Available for Arbitrary Action ....... 12

III.

BECAUSE PETITIONERS HAVE NOT

SUFFERED ECONOMIC HARM THAT CAN

BE COMPENSATED WITH MONEY

DAMAGES, THEY ARE NOT ENTITLED TO

RELIEF UNDER THE TAKINGS CLAUSE ... 15

CONCLUSION............................................................ 17

TABLE OF AUTHORITIES

Page

ASES

Agins v. Tiburon,

598 P.2d 25 (1979),

aff 'd

, 447

U.S. 255 (1980) ..................................................... 3, 12, 14

Austin v. City and County of Honolulu,

840 F.2d

678 (9th Cir. 1988),

cert. denied

, 488 U.S. 852

(1988) ................................................................................ 8

Babbitt v. Youpee,

519 U.S. 234 (1997)............................ 7, 8

City of Monterey v. Del Monte Dunes at Monterey,

Ltd.,

526 U.S. 687 (1999) ......................................... 13, 14

Commonwealth Edison Company v. United States,

271 F.3d 1327 (Fed. Cir. 2001),

cert. denied

, 122

S.Ct. 2293 (2002) .............................................................. 6

Concrete Pipe & Products v. Construction Laborers

Pension Trust,

508 U.S. 602 (1993) ................................. 7

Connolly v. Pension Benefit Guarantee Corp.,

475

U.S. 211 (1986) ................................................................. 7

Eastern Enterprises, Inc. v. Apfel,

524 U.S. 498

(1998) .......................................................................

passim

Federal Maritime Commission v. South Carolina

State Ports Authority

, 122 S.Ct. 1864 (2002) ................ 17

First English Evangelical Lutheran Church of

Glendale v. County of Los Angeles,

482 U.S. 304

(1987) .......................................................................

passim

Hodel v. Irving,

481 U.S. 704 (1987) ............................... 7, 8

Kitt v. United States,

277 F.3d 1330,

mod. on other

grounds

, 288 F.3d 1355 (Fed. Cir. 2002).......................... 6

Lake County Estates, Inc. v. Tahoe Regional

Planning Agency,

440 U.S. 391 (1979) .......................... 16

iii

TABLE OF AUTHORITIES � Continued

Page

Lucas v. South Carolina Coastal Council,

505 U.S.

1003 (1992) ....................................................................... 3

Monongahela Nav. Co. v. United States,

148 U.S.

312 (1893) ......................................................................... 2

Penn Central Transp. Co. v. City of New York

, 438

U.S. 104 (1978) ................................................................. 1

Preseault v. Interstate Commerce Comm'n,

494 U.S.

1 (1990) ......................................................................... 4, 8

Ruckleshaus v. Monsanto Co.,

467 U.S. 986 (1984)........ 4, 8

Samaad v. City of Dallas,

940 F.2d 925 (5th Cir.

1991).................................................................................. 9

San Remo Hotel v. City and County of San

Francisco,

145 F.3d 1095 (9th Cir. 1998)..................10, 11

Sinclair Oil Corp. v. County of Santa Barbara,

F.3d 401 (9th Cir. 1996),

cert

denied

, 523 U.S.

1059 (1998) ......................................................................11

Suitum v. Tahoe Regional Planning Agency,

520

U.S. 725 (1997) ................................................................. 2

Tahoe-Sierra Preservation Council, Inc. v. Tahoe

Regional Planning Agency

, 122 S.Ct. 1465

(2002) .................................................................. 1, 3, 4, 16

United States v. 564.54 Acres of Monroe and Pike

County Land,

441 U.S. 506 (1979)................................... 2

United States v. Riverside Bayview Homes, Inc

., 474

U.S. 121 (1985) ............................................................. 4, 8

Unity Real Estate Co. v. Hudson,

178 F.3d 649 (3d

Cir. 1999),

cert

denied

, 528 U.S. 963 .............................. 6

TABLE OF AUTHORITIES � Continued

Page

Washington Legal Foundation v. Legal Foundation

of Washington,

271 F.3d 835 (9th Cir. 2001),

cert.

granted

, 122 S.Ct. 2355 (2002) ............................ 8, 10, 15

Washington Legal Foundation v. Texas Equal Access

to Justice Foundation,

94 F.3d 996 (5th Cir.

1996),

cert. denied

, 521 U.S. 1121 (1997) ...................... 16

Williamson County Regional Planning Comm'n v.

Hamilton Bank,

473 U.S. 172 (1985) ...................9, 10, 11

Yee v. City of Escondido,

503 U.S. 519 (1992) ....................11

ULES

Washington Rule of Professional Conduct Rule 1.14 ....... 15

Washington Supreme Court Admission to Practice

Rule 12.1 ......................................................................... 15

ONSTITUTIONAL

ROVISIONS

United States Constitution Amendment V..................

passim

United States Constitution Amendment XI...................16, 17

United States Constitution Amendment XIV......................14

THER

UTHORITIES

Robert Brauneis, The First Constitutional Tort: The

Remedial Revolution in Nineteenth-Century State

Just Compensation Law, 52

Vand. L. Rev.

(1999) .............................................................................. 16

INTRODUCTION AND SUMMARY OF ARGUMENT

Amicus

curiae

City and County of San Francisco urges

the Court to affirm the decision of the United States Court

of Appeals for the Ninth Circuit that the Washington

IOLTA program does not effect a taking. San Francisco

supports the arguments of respondents and other

amici

that these claims do not fall into the "relatively rare" and

"easily identified"

per se

category of physical occupations of

private property,

Tahoe-Sierra Preservation Council, Inc. v.

Tahoe Regional Planning Agenc

y, 122 S.Ct. 1465, 1479

(2002), and that these claims also fail under the test of

Penn Central Transp. Co. v. City of New York

, 438 U.S. 104

(1978) based on the facts and circumstances of this case.

This brief, however, focuses on the second issue on which

the Court has granted

certiorari

: the potential remedy if a

taking had occurred.

While petitioners acknowledge the general rule that

injunctive relief is not available to remedy an alleged

taking, they contend that they are entitled to seek injunc-

tive relief in this case. They principally argue that (1) the

Court should assume that the Washington Supreme Court

would not have intended for the disciplinary rules at issue

in this case to stay in effect if the rules were found to effect

a taking, and (2) they are entitled to seek injunctive (and

compensatory) relief in this federal court case because it

would have been futile for petitioners to seek compensa-

tory relief in Washington state court. The Court should

reject both arguments because they contradict longstand-

ing Court precedent and basic, important limitations on

the scope of the Takings Clause. Petitioners also suggest

that they are entitled to an injunction because the disci-

plinary rules are "arbitrary." The Court should reject that

theory because the Takings Clause is not a proper consti-

tutional basis for challenging arbitrary or other wrongful

government conduct.

---------------------------------

ARGUMENT

I. MONEY DAMAGES IS THE EXCLUSIVE

REMEDY FOR A TAKING.

The plain language of the Takings Clause, ". . . nor

shall private property be taken for public use without just

compensation," U.S. Const. amend. V, requires that pay-

ment of compensation, not equitable relief, be the sole

remedy for a taking.

See

First English Evangelical Lu-

theran Church of Glendale v. County of Los Angeles

, 482

U.S. 304, 314 (1987). Monetary compensation is the

appropriate remedy for a taking, whether the claim

involves real or personal property, money, or any other

type of property. The Takings Clause is a "peculiar[]"

constitutional provision insofar as it

requires just (

i.e.

, full) compensation,

see

e.g.

United States v. 564.54 Acres of Monroe and Pike

County Land

, 441 U.S. 506, 510 (1979) (owner

must be put "`in as good a position pecuniarily as

if his property had not been taken' ");

Mononga-

hela Nav. Co. v. United States

, 148 U.S. 312, 326

(1893) ("[T]he compensation must be a full and

perfect equivalent for the property taken"). . . .

Suitum v. Tahoe Regional Planning Agency

, 520 U.S. 725,

748 (1997) (Scalia, J., concurring).

Before

First English

, certain courts, including the

California Supreme Court, ruled that money damages

were not available for violations of the Takings Clause.

See

Agins v. Tiburon

, 598 P.2d 25, 30-31 (1979),

aff 'd

, 447 U.S.

255 (1980). The property owner's only legal recourse was

to ask a court to invalidate the government action. In

First

English

, this Court overruled the California Supreme

Court:

[The Takings Clause] does not prohibit the tak-

ing of private property, but instead places a con-

dition on the exercise of that power. This basic

understanding of the Amendment makes clear

that it is designed not to limit the governmental

interference with property rights

per se

, but

rather to secure

compensation

in the event of

otherwise proper interference amounting to a

taking. Thus, government action that works a

taking of property rights necessarily implicates

the "constitutional obligation to pay just compen-

sation."

482 U.S. at 314-15 (emphasis original, citations omitted).

Based on this reasoning, the Court determined that if

a regulation effects a taking of property, then the govern-

ment may either rescind the regulation or leave it in place.

If the government elects to rescind the regulation, then

the government must pay just compensation for the

temporary taking of the property from the date the gov-

ernment imposed the regulation until its removal.

See id

at 318-20 & n.10;

Lucas v. South Carolina Coastal Coun-

cil

, 505 U.S. 1003, 1031 n.17 (1992). If the government

chooses to leave the regulation in place, then it must pay

the owner just compensation for the permanent taking of

the property.

See First English

, 482 U.S. at 318-20;

Tahoe-

Sierra

, 122 S.Ct. at 1482 ("

First English

was certainly a

significant decision, and nothing that we say today quali-

fies its holding.").

Thus,

First English

teaches that money damages for a

taking are mandatory. 482 U.S. at 314. Invalidation of the

regulation is not a constitutionally adequate remedy, and,

indeed, is not a remedy available to the plaintiff at all.

See

id.

at 321;

see also

Tahoe-Sierra

, 122 S.Ct. at 1482 (once

taking has been established, "no subsequent action by the

government can relieve it of the duty to provide compensa-

tion") (quoting

First English

, 482 U.S. at 321). The

First

English

rule is consistent with this Court's earlier decision

Ruckleshaus v. Monsanto Co.

, 467 U.S. 986 (1984),

where the Court held that "[e]quitable relief is not avail-

able to enjoin an alleged taking of private property for a

public use, duly authorized by law, when a suit for com-

pensation can be brought against the sovereign subse-

quent to a taking."

. at 1016; a

ccord

United States v.

Riverside Bayview Homes, Inc

., 474 U.S. 121, 127-28

(1985);

Preseault v. Interstate Commerce Comm'n

, 494 U.S.

1, 11 (1990).

II. PETITIONERS FAIL TO ESTABLISH AN

EXCEPTION TO THE RULE THAT EQUITA-

BLE RELIEF IS NOT AVAILABLE FOR A TAK-

ING.

A. Equitable Relief is Not Available on the

Theory that the Government Would Not

Have Intended to Maintain the Program If

It Knew that a Taking Would Result.

Petitioners acknowledge the general rule that equita-

ble relief is not available to enjoin an alleged taking. But

petitioners contend that the Court should recognize and

apply an exception to this general rule, on the theory that

it would be "utterly pointless" to require the government,

in a case involving the alleged taking of money, to refund

money it has taken. Brief for Petitioners at 40. Petitioners

contend that a legislature � or, in this case, the Washing-

ton Supreme Court � should be presumed to have intended

for the monetary appropriation to be halted, rather than

be required to pay compensation, if its regulation were

deemed a taking. Petitioners are mistaken for two reasons.

First, petitioners' exception would swallow the rule.

They contend that it would be "utterly pointless" to re-

quire them to seek compensation. But in every regulatory

takings case, it equally could be contended that it would be

"pointless" to enter a judgment requiring the payment of

compensation. Whenever the government adopts a police

power regulation, whether directed at real property or

personal property, it is operating on the assumption that it

can proceed without paying.

First English

, the Court emphasized that the

government has the option of rescinding a regulation

determined to effect a taking, reflecting the theory that

the government might well not wish to enforce a regula-

tion if it effects a compensable taking. But the Court did

not suggest that requiring the government to take positive

action to reverse the taking and avoid the obligation to pay

compensation was an unnecessary or "pointless" exercise.

Likewise in this case, it would not be pointless to require

the Washington Supreme Court to rescind the disciplinary

rules to avoid the obligation to pay compensation, if a

taking had been established.

Second, petitioners wrongly rely on

Eastern Enter-

prises, Inc. v. Apfel

, 524 U.S. 498 (1998), to support their

contention that the Court already adopted the proposed

exception. Petitioners' read too much into that case.

Eastern Enterprises

involved the constitutionality of the

Coal Industry Retiree Health Benefit Act. The Act re-

quired coal mining companies to pay money into health

care funds for the benefit of their former employees. A

four-justice plurality concluded that the Act worked a

taking because it imposed an extreme, retroactive finan-

cial burden on the claimant.

. at 529-37.

Petitioners rely on the plurality opinion. Brief for

Petitioners at 45, citing plurality opinion in

Eastern

Enterprises,

524 U.S. at 519-22. But the five justices who

did not join in the plurality opinion concluded, on several

different grounds, that the allegations by the plaintiffs did

not support a viable taking claim.

. at 545 (Kennedy, J.,

concurring and dissenting);

. at 554-55 (Breyer, J.,

dissenting).

Because these five justices concluded that the

Takings Clause did not even apply, it can hardly be in-

ferred, as petitioners contend, that these justices implicitly

acquiesced in the plurality's conclusion about what type of

remedy would have been available if a taking had oc-

curred. Brief for Petitioners at 39 and n.18. In fact, Justice

Kennedy explicitly repudiated any such implication in

advance.

See

. at 547 ("Given my view that the takings

The Federal Appeals Courts have uniformly followed the views

expressed by the majority in

Eastern Enterprises

Commonwealth

Edison Company v. United States

, 271 F.3d 1327 (Fed. Cir. 2001),

cert.

denied

, 122 S.Ct. 2293 (2002) (["F]ive justices of the Supreme Court in

Eastern Enterprises

agreed that regulatory actions requiring the

payment of money are not takings. We agree with the prevailing view

that we are obligated to follow the views of that majority.");

Unity Real

Estate Co. v. Hudson

, 178 F.3d 649, 659 (3d Cir. 1999),

cert

denied

, 528

U.S. 963 (lower courts "are bound to follow the five-four vote (in

Eastern

Enterprises

) against the takings claim. . . .");

Kitt v. United States,

277

F.3d 1330, 1336-37,

mod. on other grounds

, 288 F.3d 1355 (Fed. Cir.

2002) (same).

analysis is inapplicable in this case, it is unnecessary to

comment upon the plurality's effort to resolve a jurisdic-

tional question despite little briefing by the parties on a

point which has divided the Courts of Appeals.") Thus,

Eastern Enterprises

does not support petitioners' exception

to the general rule.

Indeed, the reasoning of the five justices in

Eastern

Enterprises

undermines the analysis of the plurality on

the remedy issue. As highlighted by petitioners (at 41), the

plurality pointed to the fact that, in several prior cases

involving alleged takings of money, the Court had assumed

the availability of injunctive relief, citing, among other

decisions,

Concrete Pipe & Products v. Construction Labor-

ers Pension Trust

, 508 U.S. 602 (1993), and

Connolly v.

Pension Benefit Guarantee Corp.

, 475 U.S. 211 (1986).

However, Justice Kennedy, in his concurring opinion, and

the four dissenting justices strongly suggested that these

decisions were incorrect insofar as they treated the claims

as raising viable takings issues.

See

524 U.S. at 547

(Kennedy, J., concurring and dissenting) ("These authori-

ties confirm my view that the case is controlled not by the

Takings Clause but by well-settled due process principles

respecting retroactive laws.");

. at 555-56 (Breyer, J.,

dissenting) (also dismissing

Concrete Pipe

and

Connolly

authoritative takings precedents). Because a majority of

the Court has repudiated these decisions as takings

precedents, they hardly can be invoked to demonstrate a

general practice of making equitable relief available in

this type of case.

The plurality in

Eastern Enterprises

also pointed to

Babbitt v. Youpee

, 519 U.S. 234 (1997) and

Hodel v. Irving

481 U.S. 704 (1987) as instances in which the Court

granted equitable relief in takings cases without discuss-

ing the claimant's obligation to seek compensation. But

Babbitt

and

Hodel

merely imply that equitable relief is

available without directly addressing the issue. Nor do

these decisions acknowledge the Court's contrary prece-

dents.

See

First English

, 482 U.S. at 314;

Ruckleshaus,

467 U.S. at 1016;

Riverside Bayview Homes

, 474 U.S. at

127-28;

Preseault

, 494 U.S. at 11.

B. The Asserted Unavailability of Compensa-

tion in State Court Does Not Transform

the Type of Relief Available for a Taking

in Federal Court.

Petitioners' second basis for arguing that equitable

relief should be available in this case is that the Ninth

Circuit determined that it would be futile to pursue

compensation in the Washington State Courts.

Washington

Legal Foundation v. Legal Foundation of Washington

, 271

F.3d 835, 851 (9th Cir. 2001),

cert. granted

, 122 S.Ct. 2355

(2002). As a result, according to petitioners, they are

entitled to sue in federal court and to seek both compensa-

tory relief and equitable relief in this forum. In other

words, petitioners contend that by moving a takings claim

from state court to federal court, petitioners have been

empowered to seek a broader array of relief than they

would be entitled to seek in state court. The argument is

wrong and should be rejected.

San Francisco questions the Ninth Circuit's conclusion that

pursuit of just compensation in the Washington State Courts would be

"futile."

See

e.g.

Austin v. City and County of Honolulu

, 840 F.2d 678,

681 (9th Cir. 1988),

cert. denied

, 488 U.S. 852 (1988) (to go directly to

(Continued on following page)

Petitioners confuse choice of forum with choice of

remedy. Under

Williamson County Regional Planning

Comm'n v. Hamilton Bank

, 473 U.S. 172, 195 (1985), a

claim for compensation is not ripe for consideration in

federal court so long as state procedures for obtaining

compensation are available. On the other hand, if compen-

sation is unavailable or inadequate, the claimant may sue

for compensation in federal court, assuming that the claim

is otherwise ripe under

Williamson County's

final decision

requirement and the claimant satisfies other jurisdictional

requirements.

. at 196. To this extent, assuming that

petitioners are correct that compensation for a taking in

the state forum is unavailable, they would be entitled to

proceed with the case in federal court.

On the other hand, the opportunity to sue for a taking

in federal court does not somehow transform the relief

available. Petitioners cite no precedent to support their

interpretation of the interplay between state and federal

court jurisdiction with respect to takings claims. And the

argument contradicts "[t]h[e] basic understanding of the

. . . [Takings Clause] that it is designed not to limit the

governmental interference with property rights

per se

, but

rather to secure

compensation

in the event of otherwise

proper interference amounting to a taking."

First English

482 U.S. at 315 (emphasis original).

federal court, takings claimant must show that it "may not obtain just

compensation through an inverse condemnation action under any

circumstances . . . .");

Samaad v. City of Dallas

, 940 F.2d 925, 934 (5th

Cir. 1991) ("[I]t must be certain that the state

would

deny that claimant

compensation were he to undertake the obviously futile act of seeking

it.") (emphasis original). Whether this case was improperly filed in

federal court, however, is not at issue in this appeal.

The petitioners' claim to equitable relief is based in

part on the Ninth Circuit's confused decision in

San Remo

Hotel v. City and County of San Francisco

, 145 F.3d 1095

(9th Cir. 1998).

See

Washington Legal Foundation

, 271

F.3d at 851 (citing

San Remo Hotel

for the right to file

takings claim directly in federal court where state com-

pensation remedy is inadequate); Brief for Petitioners at

44 (same). In

San Remo Hotel

, the Ninth Circuit decided

that a claimant asserting a facial claim that a regulation

fails to "substantially advance legitimate state interests"

need not exhaust state compensation remedies and may

proceed directly to federal court. That ruling was based on

the Ninth Circuit's assumption that a substantially

advance claimant may elect injunctive relief rather than

money damages.

. at 1101-02 ("denial of just compensa-

tion is irrelevant" for purposes of state compensation

requirement). No other Circuit Court of Appeals has

adopted this novel proposition.

San Remo Hotel

is flawed for three reasons. First, as

discussed below in Part II.C., in light of the reasoning of

the five-justice majority in

Eastern Enterprises

, it is clear

than an allegation that a government action fails to

substantially advance legitimate state interests states a

claim under the Due Process Clause, not the Takings

Clause. Second,

San Remo Hotel'

s reasoning directly

conflicts with this Court's many pronouncements that the

sole remedy for takings is monetary compensation.

E.g.

First English

, 482 U.S. at 314. Third, opening the federal

courts to takings claimants who fail to exhaust state

compensation remedies is flatly inconsistent with

William-

son County

, which requires

all

takings claimants to

exhaust state compensation remedies before proceeding to

federal court under the Fifth Amendment. 473 U.S. at 195

("[B]ecause the Fifth Amendment proscribes takings

without just compensation, no constitutional violation

occurs until just compensation has been denied. The

nature of the constitutional right therefore requires that a

property owner utilize procedures for obtaining compensa-

tion before bringing a � 1983 action.").

The

San Remo Hotel

panel's error in permitting

property owners to skirt the

state compensation require-

ment for facial "substantially advance" claims can be

traced to that court's reliance on

Sinclair Oil Corp. v.

County of Santa Barbara

, 96 F.3d 401 (9th Cir. 1996),

cert

denied

, 523 U.S. 1059 (1998).

Sinclair Oil

in turn mistak-

enly relied on

Yee v. City of Escondido

, 503 U.S. 519

(1992).

See

Sinclair Oil

, 96 F.3d at 407. In

Yee

, this Court

held that a facial takings challenge to mobilehome rent

control was ripe under the

final decision

prong of

William-

son County

. at 534;

see

Williamson County

, 473 U.S. at

186.

Yee

did not address the

state compensation

ripeness

prong of

Williamson County

, nor was that issue before the

Court. The Court granted

certiorari

Yee

after the plain-

tiffs had exhausted their state compensation remedy in a

state court action.

. at 525-26.

Petitioners' reliance on

San Remo Hotel

for the right

to elect an equitable remedy for a takings claim is there-

fore misplaced. Both petitioners' position and the Ninth

Circuit policy to allow equitable relief for certain types of

takings claims should be rejected.

C. An Injunction is Generally Appropriate

Relief for "Arbitrary" Government Action,

But a Claim Under the Takings Clause Is

Not Available for Arbitrary Action.

Petitioners also appear to argue that they are entitled

to injunctive relief under the Takings Clause because the

disciplinary rules at issue in this case are "arbitrary." As a

general matter, San Francisco does not dispute that

"arbitrary" government actions are subject to judicial

injunctions in appropriate cases, taking into account the

normal degree of deference courts owe the other branches

of government. The fundamental problem with petitioners'

argument for injunctive relief (assuming the claim of

arbitrariness could be substantiated), however, is that an

arbitrary government action may violate some other

provision of the Constitution, or some other provision of

law, but it cannot constitute a taking.

The Court resolved this issue in

Eastern Enterprises

In that case, Justice Kennedy concluded that the Coal

Industry Retiree Health Benefit Act was "arbitrary" and

had to be "invalidated as contrary to essential due process

principles." 524 U.S. at 539. On the other hand, precisely

because the suit involved an allegation of arbitrary action,

he concluded that the Takings Clause did not apply.

Justice Kennedy acknowledged that the Court had some-

times indicated a taking can occur if the government

action does not "substantially advance legitimate state

interests,"

see

e.g.

Agins v. City of Tiburon

, 447 U.S. at

260, but observed that "[t]his sort of analysis is in uneasy

tension with our basic understanding of the Takings

Clause, which has not been understood to be a substantive

or absolute limit on the government's power to act." Based

on his reading of the Court's "equivocal" precedents, he

opined "that we should proceed first to general due process

principles, reserving takings analysis for cases where the

governmental action is otherwise permissible." Justice

Kennedy concluded by observing that, because "the consti-

tutionality of the Coal Act appears to turn on the legiti-

macy of Congress' judgment rather than on the availability

of compensation, . . . the more appropriate constitutional

analysis arises under general due process principles

rather than under the Takings Clause." 524 U.S. at 545-

46.

In dissent, Justice Breyer and three other Justices

agreed that review of the arbitrariness of government

action is governed by the Due Process Clause instead of

the Takings Clause. Like Justice Kennedy, they agreed

that: "[T]he plurality views this case through the wrong

lens. The Constitution's Takings Clause does not apply."

. at 554 (Breyer, J., dissenting). These four justices

emphasized that "at the heart of the [Takings] Clause lies

a concern, not with preventing arbitrary or unfair gov-

ernment action, but with providing compensation for

legitimate government action that takes `private property'

to serve the `public' good."

. There is "no need to torture

the Takings Clause" to accommodate claims of arbitrari-

ness because these issues have a "natural home in the Due

Process Clause, a Fifth Amendment neighbor."

. at 556.

To be sure, the following year in

City of Monterey v.

Del Monte Dunes at Monterey, Ltd.

, 526 U.S. 687 (1999),

the Court upheld a takings award based on jury instruc-

tions that included the "substantially advance" formula-

tion, but that decision cannot be read to repudiate the

conclusion reached by a majority of the Court in

Eastern

Enterprises

. The defendant city in

Del Monte Dunes

waived any objection to the jury instructions incorporating

the substantially advance test, and therefore the Supreme

Court ruled that the city had no standing to challenge the

test.

. at 721-22. Thus, the fact that the Supreme Court

upheld the finding of a taking in

Del Monte Dunes

has no

precedential significance.

Furthermore, a careful reading of the different opin-

ions in

Del Monte Dunes

demonstrates that the decision

actually reinforces

Eastern Enterprises

. No member of the

Court spoke in defense of the ostensible substantially

advance takings test. In addition, five of the justices either

wrote opinions, or joined in opinions, expressly reserving

the question of the validity of the substantially advance

test, indicating that the result in the case should not be

taken as an endorsement of the test.

See

526 U.S. at 732

n.2 (Scalia, J., concurring) ("As the Court explains, peti-

tioner forfeited any objection to this standard, . . . and I

express no view as to its propriety.");

id.

at 753 n.12

(Souter, J., dissenting) ("I offer no opinion here on whether

Agins

was correct in assuming that this prong of liability

was properly cognizable as flowing from the Just Compen-

sation Clause of the Fifth Amendment, as distinct from the

Due Process Clauses of the Fifth and Fourteenth Amend-

ments.").

In sum,

Eastern Enterprises

remains the last clear

statement by the Court on whether allegations of arbitrary

government action can support a viable takings claim.

Del

Monte Dunes

supports (and certainly does not undermine)

the conclusion that the substantially advance test is not a

legitimate takings test. Petitioners should not be entitled

to sue for any type of relief under the Takings Clause on

the assumption that the disciplinary rules were arbitrary,

because allegations of arbitrary government conduct do

not state a takings claim.

III. BECAUSE PETITIONERS HAVE NOT SUF-

FERED ECONOMIC HARM THAT CAN BE

COMPENSATED WITH MONEY DAMAGES,

THEY ARE NOT ENTITLED TO RELIEF UN-

DER THE TAKINGS CLAUSE.

The foregoing analysis of the proper remedy for

takings claims informs the issue of whether the IOLTA

program effects a taking. It would be anomalous to find

that a regulation constitutes a taking where the exclusive

remedy for this type of constitutional violation is not

appropriate based on the facts of the case.

Petitioners have suffered no harm that can be com-

pensated by money. Only the petitioners who deposited

money with attorneys or escrow companies have standing

to claim that the IOLTA program has taken their property:

the interest on their deposits.

See Washington Legal

Foundation

, 271 F.3d at 847 (only petitioners who depos-

ited money with title companies have standing to sue for a

taking of the interest on their deposits). Because the

program does not receive interest from accounts where the

interest would exceed the administrative costs and bank

fees, but for the IOLTA program, petitioners' principal

would not generate any interest for petitioners.

See

Joint

Appendix ("JA") 149; Washington Rule of Professional

Conduct 1.14(c)(2) and (4); Washington Supreme Court

Admission to Practice Rule 12.1(c)(2)(iii). Moreover,

petitioners presented no evidence in the courts below that

they have incurred higher escrow fees as a result of the

IOLTA program.

See

JA 50-52, 87-88, 96-97, 100, 119, 121,

124, 131-33 (deposition testimony showing that petitioners

have no evidence that escrow companies raised rates after

IOLTA rules adopted). In fact, if petitioners were to be

paid compensation through this takings action, they would

receive a windfall; they would receive interest that, absent

the IOLTA program, they would not earn.

As demonstrated above, the exclusive remedy for a

taking is money damages. The IOLTA program of Wash-

ington did not damage petitioners in a manner that can be

compensated with money. Accordingly, the IOLTA program

cannot effect a taking of petitioners' property.

Petitioners also derive a "reciprocity of advantage" from the

IOLTA program that offsets the small amounts of interest they claim

was taken from them.

See

Tahoe-Sierra

, 122 S.Ct. at 1489 (rejecting

takings challenge to land development moratorium imposed on all

similarly situated property owners, in part because regulation con-

ferred reciprocal benefits on all property owners so burdened in the

form of enhanced property values). The advantages to petitioners and

the scores of other depositors who participate in the program are

several. The IOLTA program promotes equal access to justice. Thus, the

program benefits petitioners by enhancing the integrity of and public

confidence in the legal system. The program also protects clients' funds

from misuse by their attorneys and escrow officers.

After arguing at great length that they are entitled to pursue

both injunctive and monetary relief in federal court, petitioners

cryptically suggest that, in view of the States' Eleventh Amendment

immunity, they should at least be entitled to pursue equitable relief

alone. Brief for Petitioners at 47 n.23. Petitioners are correct in

asserting that the states are immune from claims under the Takings

Clause based on the Eleventh Amendment.

See

Lake County Estates,

Inc. v. Tahoe Regional Planning Agency

, 440 U.S. 391 (1979);

Washing-

ton Legal Foundation v. Texas Equal Access to Justice Foundation

, 94

F.3d 996, 1005 (5th Cir. 1996),

cert. denied

, 521 U.S. 1121 (1997);

see

generally

Robert Brauneis,

The First Constitutional Tort: The Remedial

Revolution in Nineteenth-Century State Just Compensation Law

, 52

Vand. L. Rev. 57, 137 (1999) ("The United States Supreme Court, while

adopting the view that the Just Compensation Clause is self-executing

with respect to compensation, has never held that the Clause abrogates

. . . sovereign immunity."). However, petitioners are incorrect in their

assumption that because a claim for compensatory relief is barred, they

(Continued on following page)

CONCLUSION

The Court should affirm the decision of the Court of

Appeals for the Ninth Circuit.

Dated: October 18, 2002

ENNIS

J. H

ERRERA

City Attorney

NDREW

W. S

CHWARTZ

Counsel of Record

USAN

LEVELAND

-K

NOWLES

LLEN

ORMAN

Deputy City Attorneys

City Hall, Room 234

1 Dr. Carlton B. Goodlett

Place

San Francisco, California

94102-4603

(415) 554-4620

Respectfully submitted,

OHN

D. E

CHEVERRIA

EORGETOWN

NVIRONMENTAL

& P

OLICY

NSTITUTE

EORGTOWN

NIVERSITY

ENTER

600 New Jersey Avenue, N.W.

Washington, D.C. 20001

(202) 662-9850

Attorneys for Amicus Curiae

City and County of San Francisco

should be permitted to seek an injunction in the alternative, for the

Eleventh Amendment "does not merely constitute a defense to mone-

tary liability . . . , it provides immunity from suit."

Federal Maritime

Commission v. South Carolina State Ports Authority

, 122 S.Ct. 1864,

1877 (2002). Ultimately, however, it will be unnecessary for the Court to

address the contours of Eleventh Amendment immunity in this case

because petitioners have an adequate � indeed exclusive � compensa-

tion remedy in state court,

see

fn. 2,

supra

, and, in any event, petition-

ers have failed to establish any type of injury sufficient to demonstrate

a taking.

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