Lambert v. City of San Francisco
The Supreme Court declined to hear the appeal of hotel owners who argued San Francisco unconstitutionally demanded a $600,000 fee before allowing them to convert residential hotel units to tourist units.
Justice Scalia, joined by two other justices, dissented from the denial, arguing the state court's reasoning wrongly let cities dodge the Court's rules against permit conditions simply by denying permits outright instead of granting them with a price tag attached.
How it got here: A California trial court and the Court of Appeal rejected the hotel owners' takings claim; they asked the Supreme Court to review, which denied certiorari.
The Case in Depth
What happened
Claude and Micheline Lambert owned a San Francisco hotel with both residential and tourist units. Struggling to rent the residential units, they sought a permit to convert them to tourist use. San Francisco's housing ordinance required either replacing the units or paying replacement costs, which the city set at $600,000; the Lamberts offered only $100,000, and the city denied their permit application.
The question before the Court
Could a hotel owner challenge a $600,000 conversion fee as an unconstitutional condition on a permit, even though San Francisco denied the permit outright rather than granting it with the fee attached?
Why it matters
Property owners and developers facing permit denials — rather than permits granted with conditions attached — may find it harder to invoke Supreme Court precedent limiting what governments can demand in exchange for building permits, since this cert denial leaves unresolved whether denial itself can be challenged the same way.
What changes now
Because the Supreme Court denied certiorari, the California Court of Appeal's decision upholding the permit denial stands, and the Lamberts have no further avenue in this case. The broader legal question the dissent raised — whether denying a permit over an unmet fee demand can itself be an unconstitutional taking — remains unresolved and could resurface in a future case the Court chooses to hear.
What this does not decide
A denial of certiorari is not a ruling on the merits. The Supreme Court did not decide whether San Francisco's fee demand was unconstitutional, whether the permit denial itself was a taking, or how lower courts should distinguish denied permits from permits granted with unlawful conditions attached.
Concurrences and dissents
Dissent — Justice Scalia
“It is simply and obviously not true that the commission ignored petitioners’ refusal to satisfy its fee demand.”Scalia rejects the state court's claim that the disputed fee had no role in the permit denial.
Justice Scalia argued the Court should have granted certiorari because the state appellate court's opinion rested on implausible or troubling grounds. He contended the record clearly showed the fee demand drove the permit denial, criticized letting cities evade Nollan and Dolan by citing generic zoning criteria, and flagged as a genuinely open question whether an outright permit denial, rather than a conditioned grant, can itself constitute an unconstitutional taking.
How the Court got there
The legal reasoning, step by step
- The dissent examined whether the city's permit denial was actually driven by the Lamberts' refusal to pay the $600,000 fee, since two Supreme Court cases require that any fee imposed as a permit condition be closely tied to, and proportional to, the harm the fee is meant to address.
- The dissent found the record contradicted the state appellate court's claim that the fee played no role, pointing to the commission's own comparison of the Lamberts' offer against fees paid by other hotels and its finding that the offer failed to offset lost housing.
- The dissent identified three possible readings of the state court's reasoning: that the fee was irrelevant to the denial (contradicted by the record), that ordinary zoning criteria could independently justify denial regardless of the fee dispute, or that a flat denial differs legally from granting a permit subject to an unlawful condition.
- The dissent reasoned that allowing cities to invoke generic zoning criteria as a backstop would let governments evade the fee-proportionality rules simply by denying permits outright whenever an applicant refuses an improper demand.
- The dissent concluded that whether an unjustified permit denial (as opposed to a conditioned grant) can itself amount to an unconstitutional taking was a genuinely open and recurring question worth the Court's review, even without a documented split among lower courts.
Doctrinal impact
Cases affected by this decision
Reaffirms Nollan v. California Coastal Comm'n (483 U. S. 825)
Dissent relies on this case's rule that permit conditions must relate to, and be proportional to, the harm justifying denial.
Reaffirms Dolan v. City of Tigard (512 U. S. 374)
Dissent treats this case's proportionality test as the standard lower courts should have applied here.