9th circuit conservatives dissent in takings case likely headed to high court

A Fifth Amendment takings case may be headed to the U.S. Supreme Court after a large contingent of conservative judges on the 9th U.S. Circuit Court of Appeals dissented Tuesday from a ruling in a property owners' dispute with San Francisco.

The appellate court majority affirmed a panel decision in the city's favor in a case involving whether a property owner who co-owned a residential building could move into one of the units if a lifetime lease was offered to the tenant.

But Judge Daniel P. Collins, an appointee of President Donald Trump, joined by eight other GOP-appointed judges, cited a U.S. Supreme Court decision from last year to argue the majority has it wrong. Knick v. Township of Scott, 139 S. Ct 2162, 2167 (2019).

A San Francisco city program allows tenants in common at residential properties to convert buildings to condominiums under a lottery if the tenant is offered a lease.

Peyman Pakdel and Sima Chegini bought an interest in the property in 2009, planned to move in upon retirement, but then asked the city to grant them an exemption or compensate them for offering the lease.

They sued in federal court claiming the city had taken their property without just compensation, in violation of the Fifth Amendment's takings clause.

U.S. District Judge Richard Seeborg sided with the city, and a 9th Circuit panel affirmed his ruling because the plaintiffs never got a final decision from the city as required by a 1985 U.S. Supreme Court ruling. Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985).

9th Circuit Judge Michelle T. Friedland, an appointee of President Barack Obama, agreed Knick eliminated a requirement that a claim be pursued in state court but said that didn't matter in this case.

"Instead of attempting to ripen their claim during the proper course, plaintiffs knowingly waived their right to seek an exemption," she wrote, concluding the claim was "unripe."

Collins, in his dissent, countered that the property owners had exhausted all possible remedies with the city, which rejected both of their requests. He argued the ruling violates Knick.

"The city has definitively imposed the lifetime lease requirement on plaintiffs' property, and there is no further avenue open to them under local law to avoid that," he wrote. Pakdel v. City and County of San Francisco, 2020 DJDAR 11063.

Jeffrey W. McCoy, an attorney with the Pacific Legal Foundation who represents the plaintiffs, said he was disappointed the 9th Circuit decided against rehearing the case en banc.

"As nine active judges on the court agreed, the panel decision was incorrect and the consequences of the opinion not only affect the Pakdels, but many other people who own property within the 9th Circuit," he wrote in an email.

Calling the case one of national significance, McCoy said he and his clients are discussing their options but said the case should be considered by the Supreme Court.

John Cote, a spokesman for the San Francisco city attorney's office, said in a statement he did not believe there was a basis for the high court to consider an appeal.

"You can't ask for something, get it, and after you get what you want, turn around and say you want to change the agreement to benefit yourself even more," Cote said of the plaintiffs. "That doesn't work. You certainly can't sue over that."