Kristen M. Fletcher, J.D., LL.M.

Last fall, the Ninth Circuit Court of Appeals denied damages to a developer in Seattle who charged that the city’s denial of a development application for shoreline property on Elliot Bay was a taking in violation of the Fifth Amendment of the Constitution. Applying the Supreme Court’s ruling in the 1992 Lucas decision, the Ninth Circuit found that the proposed development, houses and parking over tidelands, was inconsistent with the public trust doctrine that the State of Washington is obliged to protect.

Esplanade’s Development
After purchasing property in 1991 for $40,000, Esplanade Properties began its development process in 1992 by applying to construct nine waterfront homes, all single-family residences, on platforms supported by pilings over tidelands. The Esplanade property is “classified as first class tideland, and is submerged completely for roughly half of the day, during which time it resembles a large sand bar”1 and is located near a large city park and marina.
Under Washington’s Shoreline Management Act,2 enacted in 1971, developers like Esplanade must meet the city’s shoreline regulations, the Seattle Shoreline Master Program. Under Seattle’s Program, and at the time that Esplanade applied for permission to build, above-water residential construction was “seemingly allowed where the lots had less than 30 feet of dry land.”3 In reviewing Esplanade’s application, the city identified three significant compliance issues: the size of the proposed piers and docks, the design of the causeway access to the house, and the lack of parking on dry land.

Subsequently, the city was asked to review and interpret the code with respect to the proposal, resulting in a decision rejecting Esplanade’s application. When Esplanade failed to formally modify its plans with respect to the three design issues, the City cancelled the application. Esplanade challenged the denial on federal and state substantive due process grounds and as a violation of the constitutional provision prohibiting the taking of private property without just compensation. The district court denied the claims on both the due process and taking grounds.

Takings & the Public Trust
The Takings Clause of the Fifth Amendment prohibits the government from taking private property for public use without just compensation.4 In addition to instances of physical invasion or confiscation, a government regulation may be recognized as a taking if it “goes too far.”5 While no set formula exists for determining when a regulation amounts to a taking, the Supreme Court has found that when the landowner has lost all economically beneficial use of the property, a taking has occurred.6 In that case, known as the Lucas decision after its plaintiff landowner, the Court held that a taking has occurred unless “the nature of the owner’s estate shows that the proscribed use interests were not part of his title to begin with.”7

In other words, if the “background principles” of state law already serve to deprive the property owner of the proposed use, then the state is not liable for a taking. The district court found that there was no taking of Esplanade’s property because the City’s actions were not the proximate cause of the developer’s damages8 and because the public trust doctrine, a background principle of Washington law, already precluded Esplanade from using its property in the proposed manner. On appeal, the Ninth Circuit found that the public trust doctrine does preclude Esplanade’s proposed development.

The public trust doctrine exists in Washington common law,9 the Washington Constitution,10 and the Shoreline Management Act.11 The doctrine reserves a public interest in tidelands and the waters flowing over them, allowing the public to use them for navigation, fishing, commerce, and recreation.12

The court found that the doctrine burdens Esplanade’s property stating that “[i]n this case, because Esplanade’s tideland property is navigable for the purpose of public recreation (used for fishing and general recreation, including by Tribes), and located just 700 feet from [a public park], the development would have interfered with those uses, and thus would have been inconsistent with the public trust doctrine.”13 Having found that the doctrine “runs with the title” of Esplanade’s property, it alone precluded the proposed development. Thus, the court reasoned, Esplanade never had the right to develop the land and because “a property right must exist before it can be taken,” neither the Shoreline Management Act nor the City’s Shoreline Master Program effected a taking.

Due Process for Esplanade
The court also affirmed the lower court’s denial of Esplanade’s due process claims. Federal and state due process claims are precluded when the alleged violation (here, the taking of private property without compensation) is addressed by explicit textual provisions of the Constitution. In Esplanade’s claim, the Fifth Amendment directly provides for constitutional protection, and precludes the more generalized claim of substantive due process.

Conclusion
In affirming the district court’s decision, the Ninth Circuit found that the City of Seattle properly denied a shoreline development and did not take the property because the public trust doctrine, a background principle of Washington law, already precluded the development. Citing the district court, the Ninth Circuit explained that Esplanade took the risk “that, despite extensive federal, state, and local regulations restricting shoreline development, it could nonetheless overcome those numerous hurdles to complete its project and realize a substantial return on its limited initial investment.”14 In a clear example of the application of the Lucas decision, Esplanade could not recover damages for its failed application.

Endnotes
1. Esplanade Properties v. City of Seattle, 307 F.3d 978, 980 (9th Cir. 2002).
2. Shoreline Management Act, Wash. Rev. Code § 90.58.010 (2002).
3. 307 F.3d at 980, note 2. The Seattle City Council later changed this provision to allow for above-water residential construction “only where a lot has at least 15 feet of dry land. . . .” Id.
4. U.S. Const. amend. V.
5. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922).
6. Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1019 (1992).
7. Id. at 1027.
8. A plaintiff must show causation exists between the government action and the deprivation, i.e., the City’s regulation limiting development over water caused the loss of property value.
9. The court states that “[i]t is beyond cavil that ‘a public trust doctrine has always existed in Washington.’” Esplanade Properties, 307 F.3d at 985, citing Orion Corp. v. State, 747 P.2d 1062 (Wash. 1987), cert. denied, 486 U.S. 1022 (1988).
10. The Washington Constitution reserves state ownership in the beds and shores of all navigable waters of the state. Wash. Const. art. 17, § 1.
11. The Shoreline Management Act states that “unrestricted construction on the privately owned or public owned shorelines . . . is not in the best public interest.” Wash. Rev. Code § 90.58.020.
12. Illinois Central R.R. v. Illinois, 146 U.S. 387, 453 (1892).
13. Esplanade Properties, 307 F.3d at 987.
14. Id.