Lambert v. City of San Francisco
The Supreme Court declined to hear a hotel owners' challenge to San Francisco's denial of a permit to convert residential hotel rooms to tourist use, leaving in place a California court ruling that the denial was not a 'taking' requiring constitutional scrutiny.
Three justices dissented from the denial of review, arguing that the case raised an important and recurring question about whether cities can avoid constitutional limits on permit conditions simply by denying a permit outright instead of granting it with strings attached.
How it got here: A California trial court and the California Court of Appeal rejected the Lamberts' takings claim; they asked the Supreme Court to review, which denied certiorari.
The Case in Depth
What happened
Claude and Micheline Lambert owned San Francisco's Cornell Hotel, with 24 residential and 34 tourist units. After struggling to rent the residential units, they sought a permit to convert them to tourist use. San Francisco's housing ordinance required a $600,000 replacement fee for the conversion, which the Lamberts offered only $100,000 to cover; the city's Planning Commission then denied their permit application.
The question before the Court
Could a city deny a hotel's permit to convert rooms after the owners refused to pay a $600,000 fee, without triggering the constitutional rules for permit conditions?
Why it matters
Property owners facing permit denials tied to refused fee demands are left without Supreme Court guidance on whether such denials must meet the same constitutional tests that apply to permits granted with conditions attached. Local governments retain more flexibility to deny permits without triggering heightened scrutiny under existing case law, at least for now.
What changes now
Because the Supreme Court denied certiorari, the California Court of Appeal's decision stands and the case is over; the Lamberts' permit denial and the $600,000 fee dispute are not further reviewed. The underlying legal question the dissent flagged—whether outright permit denials can constitute takings under Nollan and Dolan—remains unresolved and could resurface in a future case the Court chooses to hear.
What this does not decide
The denial of certiorari is not a ruling on the merits; it does not establish whether San Francisco's permit denial was constitutional or address whether outright permit denials, as opposed to conditional grants, can constitute takings under Nollan and Dolan.
Concurrences and dissents
Dissent — Justice Scalia
“There is no apparent reason why the phrasing of an extortionate demand as a condition precedent rather than as a condition subsequent should make a difference.”Scalia argues that denying a permit for refusing a fee should be treated the same as granting one with an illegal condition attached.
Justice Scalia argued the Court should have granted certiorari because the record showed the city's Planning Commission did in fact weigh the Lamberts' refusal to pay the $600,000 fee in denying their permit, contradicting the state court's contrary finding. He explained that allowing denials to escape Nollan/Dolan scrutiny merely because ordinary zoning criteria were also cited would let cities routinely evade constitutional limits on extortionate permit conditions. He nonetheless recognized a genuinely difficult, recurring question—whether an outright permit denial, without any completed or threatened taking of property, can itself constitute a taking—and said that question justified full review.
How the Court got there
The legal reasoning, step by step
- The dissent examined whether the city's permit denial was truly independent of its unmet fee demand, or whether the denial was effectively a punishment for refusing to pay, which would trigger the constitutional test from Nollan v. California Coastal Comm'n and Dolan v. City of Tigard requiring that permit conditions be related and proportional to the harm a project would cause.
- The dissent found the record showed the Planning Commission had directly compared the Lamberts' $100,000 offer to fees paid by other hotels and denied the permit partly because the offer was insufficient, contradicting the state court's claim that the fee played no role in the decision.
- The dissent reasoned that allowing officials to invoke ordinary zoning criteria alongside an unmet fee demand would let permitting authorities evade Nollan and Dolan simply by citing generic land-use factors whenever an applicant refuses an extortionate demand.
- The dissent identified a harder, unresolved question: whether outright denial of a permit—rather than a conditional grant—can constitute a taking at all, since no property or money was actually taken from the owners, unlike in Nollan and Dolan where an easement was taken or threatened.
- Because this third, harder question was a plausible basis for the lower court's ruling and likely to recur in future cases, the dissenting justices concluded the case merited full briefing and argument rather than outright denial of review.
Doctrinal impact
Cases affected by this decision
Reaffirms Nollan v. California Coastal Comm'n (483 U. S. 825)
Dissent relies on Nollan'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 relies on Dolan's proportionality requirement for conditions attached to development permits.