A property owner purchases land with a valid government permit in hand. The owner confirms with the relevant agency that the planned use is authorized. Development proceeds. Then, nearly two years after a voter-enacted growth-control measure takes effect, the government reverses course. It announces that the project had been prohibited since the day the measure passed.
That is what happened to Lockaway Storage in Alameda County. In its May 2013 decision in Lockaway Storage v. County of Alameda, Court of Appeal Case No. A130874, the California Court of Appeal held that the County’s actions resulted in a compensable temporary regulatory taking. The court upheld damages of $989,640.96 and an attorney’s fee award of $728,015.50.
The decision illustrates how government land-use restrictions can create constitutional liability and what can distinguish a compensable temporary taking from ordinary regulatory delay.
What Was the Lockaway Storage Case About?
Lockaway Storage was a general partnership that developed, owned, and operated storage facilities. In May 2000, Lockaway contracted to purchase an 8.45-acre parcel in an unincorporated area of Alameda County, between Castro Valley and the City of Dublin along Interstate 580. The property had a history of conditional use permits for vehicle storage dating back to 1989.
Before closing escrow, Lockaway’s general partner met with the County’s Zoning Administrator, who confirmed that the property could be used as Lockaway intended. In 1999, the County had approved a Conditional Use Permit authorizing a storage facility for recreational vehicles and boats on the property. Lockaway assumed the rights under that permit when escrow closed in August 2000. The purchase price was $800,000.
Lockaway planned to develop the property as a self-storage facility for boats and recreational vehicles. Based on the existing permit and the County’s representations, Lockaway had reason to believe the project was authorized.
Then Measure D changed the situation, but the dispute was not simply about the adoption of a new land-use restriction. The County later took the position that Measure D had prohibited the project from the date it was enacted, despite the permit and the County’s prior representations.
Kassouni Law represented Lockaway Storage through the litigation, including the appeal that resulted in the 2013 Court of Appeal decision. Additional information about the case is available on the firm’s Lockaway Storage case resource page.
What Happened Between Lockaway Storage and Alameda County?
Measure D became the turning point in the dispute. In November 2000, Alameda County voters enacted the growth-control initiative, which became effective on December 22, 2000. Among other restrictions, Measure D generally prohibited storage facilities in the area where Lockaway’s property was located, except by public vote.
But Measure D contained an important limitation. Section 22 provided that the restrictions applied only to development that had not received all necessary discretionary County and other approvals and permits before the ordinance took effect.
Lockaway had obtained its 1999 Conditional Use Permit before Measure D became effective. The County later conceded that the remaining permits, including the building permit, were ministerial rather than discretionary.
The County Continued Working With Lockaway
The County’s conduct after Measure D took effect became an important part of the later dispute.
County staff continued working with Lockaway on the project and did not tell the company that Measure D prohibited the development. By the end of 2000, Lockaway had spent approximately $70,000 on consultants and architects.
In February 2002, Lockaway applied for a grading permit. County staff continued working with the company through mid-2002 to address the application’s requirements.
In July 2002, County Zoning Administrator Gray participated in a project meeting by telephone. He acknowledged that Lockaway had already implemented the 1999 Conditional Use Permit. Gray indicated that if the necessary permits were not issued before the permit’s September 22, 2002 expiration date, he would prepare a formal letter confirming that the permit had been implemented. The trial court later found that Gray’s contrary testimony was not credible.
The County’s position changed shortly afterward.
On August 30, 2002, Gray informed Lockaway that the company could not proceed after September 22 without obtaining a new Conditional Use Permit. By that point, Lockaway had spent approximately $400,000 on development costs in addition to the $800,000 purchase price.
Lockaway applied for a new Conditional Use Permit under protest on September 3, 2002. The County issued a grading permit on September 19 but did not issue a building permit before the September 22 expiration date.
At an advisory council hearing on September 23, the County took the position that Measure D prohibited the entire project. The County’s stated basis was that Lockaway had not obtained all permits and begun construction before Measure D became effective on December 22, 2000. The Section 22 exemption was not addressed.
The County Ultimately Stopped the Project
The Board of Zoning Adjustments denied Lockaway’s new Conditional Use Permit application in October 2002. The County Board of Supervisors affirmed that decision in March 2003.
The County then stopped work on the project. Lockaway filed suit on April 4, 2003, asserting inverse condemnation and civil rights claims.
In November 2004, the superior court granted summary adjudication in Lockaway’s favor. The court concluded that Section 22 exempted the project because Lockaway had obtained the necessary discretionary approval before Measure D became effective.
The court issued a writ of mandate on February 28, 2005, ordering the County to recognize Lockaway’s 1999 Conditional Use Permit as vested and allow construction to proceed. The County initially resisted the writ. After contempt proceedings began, the County issued the necessary permits in August 2005.
The claims ultimately tried in the case concerned Phase II, covering September 22, 2002 through April 15, 2005. This was the period during which the County prohibited Lockaway from proceeding with the project. Lockaway’s Phase I and Phase III claims were resolved separately.
That chronology became central to the Court of Appeal’s later analysis of whether the County’s actions constituted a temporary regulatory taking.
Why Did Lockaway Storage Bring an Inverse Condemnation Claim?
Inverse condemnation allows a private property owner to seek compensation when government action effectively takes or damages property for public use without a formal eminent domain proceeding.
In traditional eminent domain, the government formally acquires private property and provides compensation through that process. Inverse condemnation works differently. The property owner brings the claim after government action has affected the property and seeks compensation for the resulting taking or damage.
The Fifth Amendment to the U.S. Constitution provides that private property shall not be taken for public use without just compensation. Article I, section 19 of the California Constitution provides similar protection.
Lockaway did not claim that Alameda County physically seized its land. The claim concerned the County’s regulatory actions and their effect on Lockaway’s authorized development project. By preventing the project from proceeding, the County allegedly deprived Lockaway of the use and economic benefits associated with its property during the relevant period.
For a broader discussion of the requirements for an inverse condemnation claim, see the firm’s inverse condemnation in California resource.
What Is a Temporary Regulatory Taking?
A government action does not have to permanently occupy or restrict property to raise a takings issue. A regulatory restriction can also produce a compensable taking when it temporarily deprives an owner of property use or value.
A physical taking generally involves a government occupation or physical invasion of private property. A regulatory taking instead arises from government restrictions on how an owner may use property.
A temporary regulatory taking occurs when a government restriction deprives an owner of property use or value for a defined period and the restriction is later lifted or invalidated. The fact that the restriction eventually ends does not automatically eliminate the possibility of compensation.
In First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304 (1987), the U.S. Supreme Court recognized that compensation may be required for the period during which a regulatory taking is in effect, even when the government later removes the restriction.
The duration of a restriction therefore matters, but it is not the only consideration. Courts examine the nature and severity of the government action, the property interests affected, and the economic consequences to the owner. The applicable takings framework also depends on the nature of the government restriction and the specific facts.
That distinction is important in Lockaway. The issue was not simply that Alameda County delayed the project or later changed its position. The case required the courts to determine whether the County’s actions during the relevant period went beyond an ordinary land-use dispute and resulted in a compensable taking.
That question leads to the central issue in the case: why did the Court of Appeal conclude that Lockaway had suffered a temporary regulatory taking?
How Did the Court Analyze the Temporary Regulatory Taking?
The trial court and the Court of Appeal applied the multifactor balancing test from Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978). The test is an ad hoc factual inquiry that considers whether the burden imposed on private property is functionally comparable to a government appropriation.
The Lockaway court focused on three primary Penn Central factors:
- The economic impact of the government action.
- The extent to which the action interfered with distinct, investment-backed expectations.
- The character of the government action.
The inquiry considers “the magnitude or character of the burden a particular regulation imposes upon private property rights.”
Factor One: Economic Impact
The County’s decision did not make Lockaway’s property completely worthless. Some alternative uses remained available under Measure D.
The trial court nevertheless found that Lockaway had acquired and developed the property specifically for the storage facility. Requiring the company to pursue a different use would have deprived it of the return it reasonably expected from its investment. Lockaway had also committed substantial resources to the planned storage facility before the County changed its position.
The Court of Appeal agreed that the County’s action substantially impaired the property’s value and use. The County did not challenge those factual findings on appeal.
The economic impact therefore supported Lockaway’s position under Penn Central, even though the regulation did not eliminate all economically beneficial use of the property.
Factor Two: Investment-Backed Expectations
The investment-backed expectations factor was particularly significant because Lockaway did not purchase the property speculating that the County might eventually approve its proposed use.
Before purchasing the property, Lockaway received confirmation from the County that the existing 1999 Conditional Use Permit authorized the planned development. The company then proceeded with the purchase and invested substantial amounts in the project.
The County’s conduct continued to reinforce that expectation. County staff worked with Lockaway for approximately 18 months after Measure D became effective without telling the company that the project was prohibited.
The County then reversed its position in August 2002, after Lockaway had already invested heavily in the project.
The Court of Appeal concluded that Lockaway had a reasonable, investment-backed expectation that the project could proceed. That expectation was supported not merely by Lockaway’s own plans, but by the County’s representations, the existing permit, and the County’s subsequent conduct.
Factor Three: Character of the Government Action
The third Penn Central factor considers the nature of the government action.
The County did not physically occupy or invade Lockaway’s property. The dispute instead concerned the County’s regulatory treatment of the development project.
The trial court found that the County made what it described as a “showstopping U-turn” beginning with the September 23, 2002 advisory council meeting. At that point, the County took the position that nothing Lockaway had done after Measure D’s effective date could preserve the project.
The circumstances surrounding that reversal mattered. The County had continued working with Lockaway for approximately 18 months after Measure D took effect. During that period, Lockaway continued investing in the project. The County then asserted that the project had effectively been prohibited since December 2000.
The treatment of Section 22 was particularly important. The County did not address the exemption during the administrative proceedings, even though the trial court later determined that Section 22 exempted Lockaway’s project because the necessary discretionary approval had already been obtained.
The Court of Appeal concluded that substantial evidence supported the trial court’s characterization of the County’s conduct as unreasonable. The court considered the County’s reversal, its prior conduct toward Lockaway, and its failure to address the applicable exemption when evaluating the character of the government action.
Why the Three Factors Mattered Together
No single Penn Central factor automatically establishes a regulatory taking. The court considered the circumstances as a whole.
Lockaway had invested substantial amounts in a specifically authorized development. The County’s own representations and conduct supported the company’s expectations. The County later prevented the project from proceeding and maintained that position until the courts required it to recognize Lockaway’s existing rights.
Taken together, those circumstances supported the Court of Appeal’s conclusion that the County’s actions resulted in a compensable temporary regulatory taking.
Why Did the Government’s Actions Matter?
The Lockaway case was not simply about a permit being denied or a government decision going against a developer. The constitutional significance came from the combination of circumstances surrounding the County’s conduct.
The County had confirmed Lockaway’s ability to proceed before the property was purchased and continued working with the company for approximately 18 months after Measure D became effective. Those actions supported Lockaway’s reasonable expectations and encouraged continued investment in the project.
The timing of the County’s reversal also mattered. The County did not tell Lockaway until August 2002 that it considered the project prohibited under Measure D. By then, Lockaway had already invested substantial amounts in the development and the 1999 Conditional Use Permit was approaching its expiration date.
The County also failed to address Section 22 during the administrative process. The trial court found, and the Court of Appeal affirmed, that the County had “utterly failed to analyze, account for, or even mention” the Section 22 safe-harbor provision.
That omission was significant because Section 22 ultimately provided the basis for determining that Lockaway’s project was exempt from Measure D.
The Court of Appeal therefore viewed the County’s conduct in the context of the entire regulatory history. The issue was not merely that the County made an incorrect regulatory decision. The court considered whether the County’s reversal, after its prior representations and conduct, imposed an unreasonable burden on Lockaway’s property interests.
Taken together, those circumstances supported the court’s conclusion that the County’s actions went beyond an ordinary regulatory dispute and resulted in a compensable temporary regulatory taking.
What Did the California Court of Appeal Decide?
On May 9, 2013, the California Court of Appeal issued a unanimous decision in Lockaway Storage v. County of Alameda. Justice Siggins authored the opinion, joined by Presiding Justice McGuiness and Justice Jenkins of the First Appellate District, Division Three. The court affirmed the trial court’s judgment.
The decision addressed three central issues: whether Measure D applied to Lockaway’s project, whether the County’s actions constituted a temporary regulatory taking, and whether Landgate prevented recovery.
The Section 22 Exemption
The court first addressed whether the County had properly applied Measure D to the Lockaway project.
It concluded that the project was exempt under Section 22 because Lockaway had obtained all necessary discretionary approvals before Measure D became effective. The court rejected the County’s alternative interpretations of Section 22, describing them as “convoluted,” “absurd,” and based on strained readings of the measure’s plain language.
The court also noted that the County had conceded during the summary adjudication proceedings that the building permit was ministerial and that Lockaway had obtained all necessary discretionary permits before Measure D took effect. The County could not contradict those concessions on appeal.
The Temporary Regulatory Taking
The Court of Appeal then affirmed the finding that the County’s application of Measure D resulted in a temporary regulatory taking.
As discussed above, the court applied the Penn Central framework and considered the economic impact, Lockaway’s investment-backed expectations, and the character of the County’s actions.
The court agreed that the County’s conduct substantially impaired the property’s use and value, interfered with reasonable investment-backed expectations, and was sufficiently unreasonable to support compensation for the period during which the project was prohibited.
The Landgate Question
The County argued that Landgate, Inc. v. California Coastal Commission, 17 Cal.4th 1006 (1998), required a different result.
Landgate addressed whether an erroneous government decision during the development approval process could constitute a temporary taking. Under Landgate, an error occurring as part of a reasonable regulatory process designed to advance legitimate government interests generally does not constitute a taking.
The Court of Appeal rejected the County’s reliance on Landgate for two reasons.
First, the court explained that Landgate had relied on the “substantially advances” test from Agins v. City of Tiburon, 447 U.S. 255 (1980). The U.S. Supreme Court later rejected that test as a method for identifying regulatory takings in Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005). The trial court therefore properly applied the Penn Central framework instead.
Second, the court concluded that the County’s conduct would not have been protected even under Landgate‘s own reasoning.
Landgate recognized that government action can still amount to a taking when it is so unreasonable that it appears to serve no legitimate regulatory purpose other than delaying development. The Court of Appeal found substantial evidence supporting that conclusion here.
The timing of the County’s reversal, its failure to address the Section 22 exemption, and the resulting economic consequences supported the trial court’s finding that the County’s conduct went beyond an ordinary regulatory mistake.
Damages
The damages trial took place in April 2010. The trial court awarded Lockaway compensation for losses during the Phase II taking period, including:
- $504,175 in lost profits.
- $324,954 in additional construction costs resulting from the 30-month delay.
After prejudgment interest, the total inverse condemnation award reached $989,640.96.
The damages were therefore tied to the temporary period during which the County prevented the project from proceeding, rather than to a permanent loss of the property.
Attorney’s Fees
Lockaway also sought attorney’s fees under California Code of Civil Procedure section 1036. The statute requires an award of reasonable costs and attorney’s fees when a plaintiff obtains a judgment in an inverse condemnation action.
The trial court awarded $703,760 in lodestar fees, plus $24,255.50 for work on the fee motion, for a total of $728,015.50. The court declined to apply Lockaway’s requested 1.25 multiplier.
The Court of Appeal affirmed the fee award. It also upheld the trial court’s decision to include fees associated with the civil rights work because that work was sufficiently related to Lockaway’s inverse condemnation claim.
What the Decision Established
The Lockaway decision is significant because it shows that a temporary regulatory taking can arise from more than a straightforward prohibition on property use. The surrounding government conduct matters.
Here, the Court of Appeal considered the County’s prior representations, Lockaway’s substantial investment, the later reversal, the failure to address the applicable exemption, and the resulting delay and losses.
The decision ultimately affirmed both the finding of a temporary regulatory taking and the resulting compensation.
How Did Lockaway Affect California Property Rights Law?
Lockaway is significant because it shows how California courts evaluate temporary regulatory takings when government conduct goes beyond an ordinary regulatory mistake.
The decision confirmed that Penn Central provides the applicable framework for evaluating the temporary regulatory taking claim. The Court of Appeal also explained why the County could not rely on Landgate to avoid the Penn Central analysis after Lingle rejected the “substantially advances” test underlying Landgate.
The case also demonstrates that the character of government conduct matters. A court does not look only at the regulation itself or the amount of economic loss. It can consider how the government exercised its regulatory authority, including whether its actions interfered with reasonable investment-backed expectations.
In Lockaway, the County’s prior representations, continued involvement with the project, later reversal, and failure to address the applicable exemption all formed part of that analysis.
The broader principles of California regulatory takings law are discussed in the firm’s article on regulatory takings in California.
Does Lockaway Mean Every Permit Delay Is a Taking?
No. Lockaway does not mean that every permit delay, erroneous interpretation, or unfavorable development decision creates constitutional liability.
The Court of Appeal distinguished Lockaway’s circumstances from ordinary regulatory delays. An agency may make a legal or administrative error as part of a reasonable regulatory process without necessarily causing a taking.
What made Lockaway different was the combination of circumstances, including:
- The County had previously represented that the project could proceed.
- County staff continued working with Lockaway for approximately 18 months after Measure D took effect.
- Lockaway continued investing in the project during that period.
- The County reversed its position shortly before the existing permit expired.
- The County failed to address the Section 22 exemption during the administrative process.
- The resulting restriction caused substantial economic losses.
The distinction is important. A property owner facing an ordinary permit delay is not automatically entitled to compensation. A stronger claim may exist when government conduct substantially interferes with property rights after the owner has reasonably relied on government representations and committed significant resources.
Under Penn Central, courts evaluate the circumstances as a whole. Economic impact, investment-backed expectations, and the character of the government action all contribute to the analysis. No single fact automatically establishes a taking.
What Does Lockaway Mean for California Property Owners Today?
Lockaway remains useful to California property owners because it shows that a regulatory taking claim does not necessarily require the government to physically occupy or permanently restrict property.
The decision may be relevant when:
- A government agency approves a development project and later changes its interpretation of the applicable regulations.
- A property owner makes substantial investments based on government approvals or representations that are later reversed.
- A zoning ordinance, growth-control measure, or other land-use restriction is applied to a project that prior government action indicated was exempt or approved.
- Government action substantially delays a planned property use under circumstances that go beyond ordinary regulatory error.
- A temporary restriction significantly impairs the property’s use or value before the government ultimately reverses or lifts the restriction.
The key point is that Lockaway provides an example, not an automatic rule for every regulatory dispute. Whether a property owner has a viable inverse condemnation or regulatory takings claim depends on the government’s specific actions, the applicable regulations, the property’s circumstances, the duration of the restriction, and the resulting economic impact.
California inverse condemnation law also covers other forms of government action, including physical damage and government-caused interference with property. The firm’s article on inverse condemnation in California discusses the broader elements of these claims.
What About Government Permit Delays?
A government permit delay does not automatically constitute a taking.
The significance of a delay depends on why the delay occurred, how long it lasted, how the government acted during the process, and how the delay affected the property owner’s rights and investment.
A short delay resulting from an ordinary regulatory disagreement is different from a prolonged restriction involving conduct that substantially interferes with a property owner’s reasonable expectations.
The firm’s article on when permit delays become inverse condemnation in California addresses the circumstances in which government delays may support an inverse condemnation claim.
How Is Lockaway Different From a Physical Taking?
Lockaway involved a regulatory taking, not a physical taking. Alameda County did not occupy Lockaway’s property or physically seize it. Instead, the County’s application of Measure D restricted Lockaway’s ability to proceed with its planned development.
Because the property was not physically occupied and the regulation did not eliminate all economically beneficial use, the Court of Appeal evaluated the claim under the Penn Central framework rather than applying a categorical taking rule.
The distinction between physical and regulatory takings is discussed in the firm’s article on physical and regulatory takings in California.
What Should Property Owners Do When Government Action Restricts Development?
When a government agency restricts a development project or changes its position about an approved project, preserving the record can become important to any later legal evaluation.
Property owners should consider preserving:
- Permit applications and supporting materials.
- Government letters, emails, and other communications.
- Written records of statements or assurances made by agency officials.
- Planning documents, meeting minutes, and agency findings.
- Permit denials, notices of violation, and other adverse decisions.
- Development plans, architectural drawings, and engineering documents.
- Project timelines showing when government restrictions were imposed or lifted.
- Financial records documenting development expenditures.
- Appraisals or other evidence concerning changes in property value.
- Records showing changes in the government’s interpretation or position.
- Evidence documenting how the restriction affected planned or permitted property uses.
These records can help establish what the government said, what the owner relied on, what the owner invested, and how the government’s position changed over time.
They may also provide evidence relevant to the Penn Central factors, including economic impact, investment-backed expectations, and the character of the government action.
Property owners facing a significant government restriction should preserve the record early and obtain legal advice before abandoning development plans or administrative options.
Questions About Lockaway Storage or California Regulatory Takings?
Lockaway Storage v. County of Alameda demonstrates that government land-use restrictions can create constitutional compensation obligations when the circumstances rise to the level of a temporary regulatory taking. The decision does not mean every permit delay or government error creates liability. It does show that government conduct, including prior assurances, changes in regulatory position, and the resulting economic impact, can matter when courts evaluate a takings claim.
Kassouni Law represented Lockaway Storage in the litigation that produced this published decision. The firm represents private property owners in California regulatory takings, inverse condemnation, land-use, and constitutional property-rights disputes. The firm represents private parties exclusively and has never represented a government agency.
Property owners facing prolonged development restrictions, significant permit delays, or other government actions affecting the use or value of their property may have legal options worth evaluating.
Call 877-770-7379 or submit an inquiry to discuss the specific facts of your situation. The firm responds to all inquiries within one business day. Submitting a contact form does not create an attorney-client relationship.
Frequently Asked Questions
What was the Lockaway Storage v. County of Alameda case about?
The case involved Alameda County’s decision to block an approved storage facility project after previously allowing the project to proceed. The California Court of Appeal held that the County’s actions resulted in a compensable temporary regulatory taking.
Did Lockaway establish that every permit delay is a regulatory taking?
No. The decision does not make every permit delay a taking. Courts consider factors such as the economic impact, the owner’s investment-backed expectations, the duration of the restriction, and the character of the government’s conduct.
What test did the court use in Lockaway?
The Court of Appeal applied the Penn Central factors, which examine economic impact, interference with reasonable investment-backed expectations, and the character of the government action.
Can a temporary government restriction result in an inverse condemnation claim?
Yes. A temporary restriction can support an inverse condemnation claim when government action amounts to a taking during the period the restriction remains in effect. The fact that the restriction is later removed does not automatically eliminate the possibility of compensation.
What should a property owner do if a government agency changes its position about an approved project?
The owner should preserve permits, agency communications, project records, financial documents, and evidence showing how the agency’s position changed. Prompt legal review can also help determine whether administrative remedies or a potential inverse condemnation or regulatory takings claim should be pursued.
