In Wardany v. City of San Jacinto, (2011 WL 2119370, C.D.Cal., May 27, 2011), a United States District Court considered whether a convenience store owner stated a claim against a city for taking his property without just compensation. The city had constructed a mile-long median in front of his store which the owner alleged resulted in a substantial loss to his business. The federal district court held that the store owner could not state a claim for inverse condemnation because he failed to establish that the ingress or egress from his property had been completely obstructed.
Facts
Saad El Wardany (“Wardany”) owns a convenience store on South Ramona Boulevard. In 2007, the State of California transferred a portion of the boulevard to the City of San Jacinto (“City”) with the condition that City must improve the safety standards along the road. City proposed constructing a mile-long median along Ramona Boulevard between San Jacinto Avenue and State Street. The purpose of the median was to slow down traffic for the public’s safety, including schoolchildren in three nearby schools. The median was designed to open at almost every intersection. Wardany’s store is located between two median openings.
Prior to constructing the median, City held public meetings to discuss the construction of the median. City sent letters to all businesses, including Wardany’s business, and individuals who reside on property abutting the portion of Ramona Boulevard on which the median was proposed to be constructed. Wardany denied that he received a letter from City regarding the median but once he became aware of the construction plans, he requested that City construct a “turn pocket,” or break in the median in front of his store. City denied his request.
Wardany claims that after the median was constructed, he noticed a reduction in sales at his store. In a letter to City, Wardany claimed the median had caused a 55% drop in sales. Wardany asked City to either place a break in the median in front of his store or to completely remove the median. Wardany claimed that drivers were prevented from accessing his store from the rear because a portion of the street to the west of his property had been converted into a one-way street. City again denied Wardany’s request and “reiterated the means of ingress and egress from Wardany’s property continue to exist, regardless of the direction one is traveling on Ramona Boulevard.”
Wardany brought a lawsuit against City alleging several causes of action including that City had denied him due process by failing to give him individualized notice of the construction project. Wardany also alleged City had engaged in a taking of his property in violation of both the Fifth Amendment to the United States Constitution and Article I, § 19 of the California Constitution.
Decision
The federal district court concluded Wardany failed to establish his Fourteenth Amendment claims. Wardany alleged City violated his rights to due process because it failed to give him individualized notice before it began construction of the median. Wardany claimed he was “exceptionally affected” by the project so that he was entitled to individualized notice and a hearing. The court found Wardany was not entitled to individualized notice because he failed to show he had suffered a deprivation of property. Under California law, a property owner’s right “to ingress and egress is not absolute.” The fact that some of Wardany’s “customers may now be required to traverse a more circuitous route to access [Wardany’s] business” does not result in a “deprivation of any protected property interest.” Furthermore, the construction of the median did not “exceptionally affect” Wardany because he is one of more than one hundred residents who own or occupy property along the portion Ramona Boulevard impacted by the median.
The federal district court also held Wardany could not establish a federal taking claim or an inverse condemnation claim under California law. “A regulatory taking occurs ‘when the value or usefulness of private property is diminished by a regulatory action that does not involve a physical occupation of the property.'” In Wardany’s case, City did not require Wardany to dedicate a portion of his property for public use. Also, City did not exercise its eminent domain power or take any action to restrict Wardany’s use or possession of his property. Wardany’s only argument could be that the median City placed on Ramona Boulevard resulted in diminished sales at his convenience store.
Federal case law provides “a land use regulation does not constitute a taking if the regulation does not deny a landowner all economically viable use of the property and if the regulation substantially advances a legitimate government interest.” The court determined that Wardany only offered unsubstantiated claims that his sales decreased by 55% percent after City installed the median but “such a loss does not constitute a denial of all economically viable use.”
The court found that Wardany’s “inverse condemnation claim under California law is similarly flawed.” A property owner’s right of access is not unlimited under California law. “Not every interference with the property owner’s access to the street upon which his property abuts and not every impairment of access, as such, to the general system of public streets constitutes a taking which entitles him to compensation.”
In a factually similar situation, the Supreme Court of California “concluded that the property owners were not entitled to damages and explained that ‘a property owner has no constitutional right to compensation simply because the streets upon which his property abuts are improved so as to affect the traffic flow on such streets.'” Because there was no evidence that the ingress or egress from Wardany’s property had been completely obstructed, the court held Wardany failed to state a cognizable claim under either the California Constitution or the Fifth Amendment to the United States Constitution.
The court concluded Wardany failed to establish City engaged in a taking of his property. Although the federal district court’s decision is not binding on California courts, it provides insight into when access impairment that results from governmental action will result in a compensable takings claim. Under the standard set out by the federal district court in Wardany’s case, a taking of property claim will only be viable if the governmental action results in a complete obstruction of ingress or egress to a property.
The court also held Wardany failed to establish his First Amendment claims against City. Wardany claimed that City retaliated against him after he requested a modification of the median. The court found no retaliatory motive in City’s denial of Wardany’s cellular tower permit application or in City’s citation of Wardany for signage violations. The zoning regulations do not permit a cellular tower on Wardany’s property, and the application for the tower was withdrawn after City advised Wardany and the cellular company of the regulations. Also, City cited Wardany for signage violations both before and after he complained to City about the median project.
The court also rejected Wardany’s establishment clause claim. Wardany alleged City refused to construct a break in the median in front of his property because City was involved in a deliberate scheme to cause his business to depreciate. City could then sell his property to a nearby church. The court found Wardany alleged no facts from which such intent on the part of City could be inferred.
The court also held that Wardany failed to establish that City discriminated against him based on his race and nationality.
Given these findings, the court granted summary judgment in favor of City as to all of Wardany’s claims against it. Wardney has filed a Notice of Appeal, so it is possible that the Ninth Circuit Court of Appeals will issue a decision modifying this opinion. We will provide any updated information once the Ninth Circuit issues its decision, but the appeal process will likely take several months.
Questions
If you have any questions concerning the content of this Legal Alert, please contact the following from our office, or the attorney with whom you normally consult.
Jeffrey L. Massey or William T. Chisum | 916.321.4500