Ninth Circuit Court of Appeals Affirms Decision that Revocation of Conditional Use Permit is not a Taking

This post was authored by Joseph Caputo, Touro Law Center

In this case the appellant alleges that the City of Los Angeles formally revoking their conditional use permit which allowed their hotel to operate was a actionable violations of the Civil Rights Act and the Fair Housing Act. The City of Los Angeles imposed the conditional use permit due to crime in or around the area where the hotel was located, requiring that the hotel maintain a registry of clients which would be subject to warrantless search and that the property have a security guard present 24 house a day. In 2017 the City Zoning Administration had a hearing to determine compliance with the conditional use permit and decided to revoke the permit, effectively closing the hotel. The court recognizes four theories for takings claims: (1) a physical invasion of property; (2) that a regulation completely deprives a plaintiff of all economically beneficial use of property; (3) a general regulatory taking pursuant to the decision in the Penn Central case; (4) a land-use exaction violating the standards set fourth in Nollan & Dolan cases. The court decides that the facts present in this case do not support a finding that the takings clause is implicated because localities can act in response to criminal activity or in the interest of abating a public nuisance. The municipality states their decision to revoke the conditional use permit was based on the fact that the hotel’s operation created nuisance issues. The court remanded the matter to make a decision based on factual findings related to fourth amendment issues related to the warrantless search of the hotels records the rest of the issues (Fifth Amendment taking violation, Equal Protection clause, Fourteenth Amendment Due Process clause) however were dismissed.

Akshar Global Investment Corp. v. City of Los Angeles 817 Fed.Appx. 301 (9th Cir. 2020)