Eva Kollsman, City National Bank, Tashi Land Corporation, a New York Corporation v. City of Los Angeles, a Municipal Corporation

737 F.2d 830, 1984 U.S. App. LEXIS 20449

• Court: Court of Appeals for the Ninth Circuit
• Decided: July 17, 1984
• Docket: 83-5798
• Status: Published

Opinions

SNEED, Circuit Judge:

Paul Kollsman sought approval from the City of Los Angeles to develop an eighty-five acre subdivision. The City denied the application on the ground that Kollsman had failed to submit requested information. Kollsman filed an action in federal district court alleging that the City’s land use regulations violate the Fifth and Fourteenth Amendments and provisions of state law. Without addressing the federal constitutional claims, the district court held that Kollsman’s subdivision application must be deemed approved under California law. We conclude that the district court, 565 F.Supp. 1081, should have abstained and allowed state courts to decide the questions of land use planning. We therefore vacate the judgment of the district court and remand.

I.

FACTS AND PROCEEDINGS BELOW

Paul Kollsman proposed to develop a seventy lot subdivision on an eighty-five acre tract of land located in the Santa Monica Mountains. On January 12, 1977, Kolls-man submitted to the City of Los Angeles a proposed tract map and an “Environmental Assessment Form.” The City notified Kollsman on February 16, 1977, that it would not accept his subdivision application before he submitted a draft Environmental Impact Report (EIR). Kollsman submitted a first draft EIR on July 28, 1977.

By a memorandum dated August 16, 1977, the City informed Kollsman that two additional sections should be added to the EIR. Kollsman submitted a second draft EIR on September 13, 1977. The City circulated this draft for comment among concerned homeowner groups. On November 30, 1977, the City sent Kollsman a memorandum requesting further environmental information. The City sought information on development alternatives that would conform to the City’s “slope density formula” and utilize “cluster development” as opposed to individual units.¹ Four months later, on March 3, 1978, Kollsman submitted certain information requested by the City. He did not, however, submit information on alternative development plans.

The City informed Kollsman in a letter dated May 11, 1978, that the draft EIR could not be completed until he submitted information on alternative development plans and the slope density formula. On advice of counsel, Kollsman did not provide the additional information. The City mailed Kollsman a form notice of “Determination of Incompleteness of Application” on November 22, 1978. Two months later, on January 12, 1979, the City informed Kollsman that a public hearing could not be held on his application without completion of the EIR. On November' 14, 1979, the City sent Kollsman a “Notice of Intent to Disapprove without Prejudice” for the reason that he had not submitted requested information. The City denied Kollsman’s subdivision application on November 26, 1979.²

Concurrent with the City’s processing of the subdivision application, Kollsman contested the land use regulations in federal district court. Kollsman filed a six-count complaint on March 1, 1977. Counts I and III sought to invalidate the slope density formula on constitutional theories of inverse condemnation and equal protection. Count II requested $6.3 million in damages for inverse condemnation. Counts IV, V, and VI involved state law claims. The district court granted the City’s motion to dismiss Count V on April 25, 1977, and granted summary judgment in favor of the City on Counts IV and VI on March 28, 1978. In March and April of 1979, a seven-day bench trial was held on the constitutional claims.

On March 21, 1980, Kollsman filed a motion to submit additional evidence that raised, for the first time, the argument that his subdivision application should be “deemed approved” pursuant to California statutes. The court held two additional days of trial in April 1981. On November 11, 1981, the court issued an opinion stating that it had found for the plaintiff on the issue of liability and directing plaintiff’s counsel to submit proposed findings of fact and conclusions of law. Over the City’s opposition, the court on February 22, 1982, granted Kollsman’s motion to amend the complaint to conform to proof. The amendment added two counts: Count VII asserts that Kollsman’s application must be “deemed approved” under California law, and Count VIII claims rights under 42 U.S.C. § 1983.

On February 2, 1983, the district court held that Kollsman’s subdivision application must be “deemed approved” pursuant to California Government Code Sections 65950 and 65956(a).³ This result is based on the court’s conclusion that Kollsman’s application was complete in fact and must be “deemed complete” on November 22, 1978. The court asserted that this conclusion is valid even though the City sent Kollsman a notice on that date stating that his application was incomplete. The district court found that the City could not in good faith determine that the application was incomplete when Kollsman had submitted all information that the City could lawfully request under applicable California statutes. The application was complete, and we must read its letter of November 22, 1978 to say that. Because the City did not act on Kollsman’s application within one year from November 22, 1978, the court concluded that the application must be deemed approved.

The City filed a timely notice of appeal.⁴

Count VII raises difficult state law issues of great importance to the people of California. As already indicated, abstention is the appropriate course here.

We, therefore, vacate and remand.

II.

DISCUSSION

The abstention doctrine based on Railroad Commission v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941) is a narrow exception to the district court’s duty to decide cases properly before it. Pullman allows postponement of the exercise of federal jurisdiction when “a federal constitutional issue ... might be mooted or presented in a different posture by a state court determination of pertinent state law.” C-Y Development Co. v. City of Redlands, 703 F.2d 375, 377 (9th Cir.1983) (quoting County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 189, 79 S.Ct. 1060, 1063, 3 L.Ed.2d 1163 (1959)).

We apply an abuse of discretion test in reviewing district court abstention decisions. E.g., C-Y Development Co., 703 F.2d at 377. This standard of review, however, does not preclude invoking abstention in cases in which there exist compelling reasons to allow state courts to resolve issues of state law. Cf. Richardson v. Koshiba, 693 F.2d 911, 915-18 (9th Cir.1982) (ordering Pullman abstention after raising issue sua sponte). We believe that this is such a case.⁵

We have relied on three criteria for the application of Pullman abstention: (1) the complaint must touch a sensitive area of social policy into which the federal courts should not enter unless there is no alternative to adjudication; (2) a definitive ruling on the state issues by a state court could obviate the need for constitutional adjudication by the federal court; and (3) the proper resolution of the potentially determinative state law issue is uncertain. Richardson, 693 F.2d at 915; see C-Y Development Co., 703 F.2d at 377; Canton v. Spokane School Dist. No. 81, 498 F.2d 840, 845 (1974).

The first and second criteria are clearly satisfied in this case. We have repeatedly noted that land use planning is a sensitive area of social policy that meets the first requirement for Pullman abstention. E.g. C-Y Development Co., 703 F.2d at 377; Santa Fe Land Improvement Co. v. City of Chula Vista, 596 F.2d 838, 840 (9th Cir.1979); Ranchos Palos Verdes Corp. v. City of Laguna Beach, 547 F.2d 1092, 1094 (9th Cir.1976). The second requirement is also met. The conclusion eventually reached by the district court illustrates that a ruling on Kollsman’s state law claims could obviate the need to address the federal constitutional claims.

We also find that the third requirement for Pullman abstention is met here. The district court’s decision rests on an interpretation of interlocking statutory provisions enacted during the course of this litigation. The district court acknowledged that there have been few state cases that interpret the particular California code sections underlying its decision. Slip op. at 21. Moreover, appellants persuasively argue that resolution of this case requires attention not only to Chapter 4.5 of the California Government Code, the focus of the district court’s opinion, but also consideration of the interrelation of that chapter with the Subdivision Map Act and the California Environmental Quality Act.⁶

The uncertainty of state law issues is illustrated by comparing the reasoning of the district court with the City’s arguments before this court. For example, the district court relied on section 65941 of the California Government Code to conclude that the City could not in good faith refuse to accept Kollsman’s application as complete.⁷ That section, the court held, prohibits the City from requiring Kollsman to submit the “informational equivalent” of an EIR. Because the district court found that Kollsman had submitted sufficient information to allow the City to prepare a legally adequate EIR, the court held that the City must consider Kollsman’s application complete even though the City insisted that it was not. The City rejects this interpretation and argues that the request for information was authorized by the City’s administrative guidelines for evaluating a development project’s consistency with the general plan.⁸ Moreover, the City maintains that section 65941 was not applicable to local agencies at the time it determined the application was incomplete.⁹

The district court and the City also differ on the completeness of Kollsman’s application. The district court noted that section 65943 of the California Government Code requires that “[i]n the event that the application is determined not to be complete, the agency’s determinations shall specify those parts of the application which are incomplete and shall indicate the manner in which they can be made complete.” The district court found that the City’s letter of November 22, 1978, did not satisfy this requirement and concluded that the City’s determination of incompleteness was both incorrect and ineffective. It therefore concluded that the City had failed to satisfy the time limits of section 65924.¹⁰ The district court held that the legislature intended that if the substantive'requirements of section 65943 are not satisfied within the specified time limits, a development application should be. deemed complete.¹¹ Therefore, Kollsman’s application must be deemed accepted as complete on November 22, 1978.¹²

The City disputes each link in the district court’s reasoning. The City argues that the district court erred by applying section 65943, as amended, retroactively to Kollsman’s application,¹³ and even if the section applies retroactively, an application should not be deemed complete even when an agency makes a timely, but erroneous determination that an application is incomplete. The City insists that the earliest possible date that Kollsman’s application could be deemed complete is November 26, 1978.¹⁴ If the application is deemed complete on this date, the City’s rejection of the application on November 26, 1979 satisfies the one-year time limit provided by section 65950.¹⁵

Even if we assume that the district court correctly held that Kollsman’s application must be deemed complete on November 22, 1978, uncertainty still obscures the legal consequences of that holding. The district court concluded that because the City had not satisfied the one-year deadline to approve or disapprove a completed application, the application must be deemed approved. At 1096. Various California state agencies, participating as amicus curiae, argue that Kollsman’s application may not be deemed approved because he failed to submit a project proposal that complies with the California Environmental Quality Act and the Subdivision Map Act.¹⁶ The City argues that if Kollsman’s application is deemed approved, such approval must be subject to appeal to the City Planning Commission and the City Council.¹⁷ Alternatively, the City maintains that Kollsman’s subdivision may only be deemed approved subject to the slope density formula.

These state law issues require us to conclude that the district court abused its discretion by failing to abstain. This case implicates the concerns underlying the first and third criteria for Pullman abstention.¹⁸ Land use planning is a sensitive area of social policy. At issue here is the application of Chapter 4.5 of the California Government Code, which has as its purpose the establishment of clear requirements for the approval of development projects and the expediting of decisions on such projects. Cal.Gov.Code section 65921. Chapter 4.5, however, must be reconciled with earlier legislation, such as the California Environmental Quality Act, which requires a balancing of the policies underlying Chapter 4.5 with the concerns reflected in the earlier enactments. This task is best left to the state courts. Cf. Rancho Palos Verdes Corp., 547 F.2d at 1095 (abstention appropriate in case involving recently enacted “web of statutes” that attempts to “grapple with difficult land use problems”). We conclude, therefore, that abstention is required in this case.¹⁹

III.

Because the district court should have abstained, we vacate its judgment and remand. At the request of either party, the district court should retain jurisdiction of the federal constitutional issues pending proceedings in the state courts. See, e.g., Migra v. Warren City School District Bd. of Ed., — U.S.-, 104 S.Ct. 892, 898 n. 7, 79 L.Ed.2d 56 (1984); England v. Louisiana State Board of Medical Examiners, 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964); Richardson, 693 F.2d at 918.

VACATED and REMANDED.

1 . The "slope density formula” is part of the “community plan” for the Bel Air-Beverly Crest District of Los Angeles, which includes Kolls-man’s land. The City prepares community plans as part of the general plan required by California statutes. See Cal.Gov.Code § 65302. The community plan shows specific land uses and densities of development for the various communities of the City. The City Planning Commission adopted the Bel Air-Beverly Crest District plan on March 4, 1976; the Los Angeles City Council endorsed the plan on January 13, 1977.

The slope density formula determines the number of units allowed on land designated as "minimum density housing." Under the formula, the maximum number of dwelling units depends on the average natural slope of the land. The slope density formula indicates that no more than nine dwelling units may be permitted on Kollsman’s 85 acres.

2 . The City notified Kollsman at this time that he could appeal the denial of his application to the City Planning Commission. On December 20, 1979, the district court approved a stipulation agreed to by Kollsman and the City suspending the administrative appeal.

3 . Cal.Gov.Code § 65950 provides in pertinent part:

Any public agency which is the lead agency for a development project shall approve or disapprove such project within one year from the date on which an application requesting approval of such project has been received and accepted as complete by such agency. Cal.Gov.Code § 65956(a) provides:

In the event that a lead agency or a responsible agency fails to act to approve or to disapprove a development project within the time limits required by this article, such failure to act shall be deemed approval of the development project.

4 . Paul Kollsman died before the district court entered its judgment. We granted the motion of his widow, Eva Kollsman, and City National Bank for substitution as parties herein. Mrs. Kollsman and the bank are administrators of Paul Kollsman's estate. For convenience, we will refer to appellees as "Kollsman.”

5 . Our earlier refusal to grant a writ of mandamus requiring the district court to abstain, No. 78-1557 (9th Cir. June 7, 1978), does not preclude us from now holding that the district court should have abstained. First, we apply a more stringent standard of review under our mandamus jurisdiction than when reviewing on direct appeal a district court’s order under the abuse of discretion standard. Badham v. U.S. Dist. Ct. for N.D. Cal., 721 F.2d 1170, 1171 (9th Cir.1983). Second, our order denying the petition for mandamus was issued before Kollsman raised the argument that his application should be deemed approved under California law. Thus, our earlier order did not consider the state law issues now involved in the case.

6 . The California Environmental Quality Act, Cal.Pub.Res.Code § 21000 et seq., requires preparation of an EIR whenever a project may have a significant adverse impact on the environment. No Oil, Inc. v. City of Los Angeles, 13 Cal.3d 68, 118 Cal.Rptr. 34, 529 P.2d 66 (1974).

The California Subdivision Map Act prohibits the City from approving projects that do not comply with the general and specific area plans. Cal.Gov.Code §§ 66473.1, 66474.61; Woodland Hills Residents Ass’n, Inc. v. City Council of the City of Los Angeles, 44 Cal.App.3d 825, 118 Cal. Rptr. 856 (1975).

7 . Cal.Gov.Code § 65941 provides:

The information compiled pursuant to section 65940 shall also indicate the criteria which such agency will apply in order to determine the completeness of any application submitted to it for a development project.

In the event that a public agency is a lead agency for purposes of Division 13 (commencing with Section 21000) of the Public Resources Code, such criteria shall not require the applicant to submit the informational equivalent of an environmental impact report as part of a complete application; provided, however, that such criteria may require sufficient information to permit the agency to make the determination required by Section 21080.1 of the Public Resources Code.

8 . The City Office of Planning and Research adopted “Permit Guidelines" to carry out Chapter 4.5 of the Government Code. Permit Guidelines § 1087.1, effective January 31, 1978, provides:

Local agencies should adopt as one of their criteria for completeness the requirement that the development project be shown in the application to be consistent with the applicable general plan required by Government Code sections 65300 et seq.

The City argues that this provision authorized it to demand that Kollsman submit information on development alternatives consistent with the slope density formula.

9 . Section 65940, referred to in the first paragraph of § 65941, did not apply to local agencies until June 30, 1983. Before it was amended in 1982, see 1982 Cal.State Ch. 84, § 1, the first paragraph referred only to state agencies.

Kollsman responds by noting that the language in the second paragraph of § 65941 refers to "a public agency" and that the City comes under the statutory definition of "public agency." See Cal.Gov.Code § 65932.

10 . Cal.Gov.Code § 65924 provides:

With respect to any development project an application for which has been accepted as complete prior to January 1, 1978; the deadlines specified in Sections 65950 and 65952 shall be measured from January 1, 1978. With respect to such application received pri- or to January 1, 1978, but not determined to be complete as of that date, a determination that the application is complete or incomplete shall be made not later than 60 days after the effective date of the act amending this section in 1978.

The amendment adding the last sentence to § 65924 became effective on September 26, 1978. Thus, the City had until November 26, 1978, to determine whether Kollsman’s application was complete.

11 . Section 65943 provides in pertinent part:

Not later than 30 calendar days after any public agency has received an application for a development project, such agency shall determine in writing whether such application is complete and shall immediately transmit such determination to the applicant for the development project.

As originally enacted, § 65943 did not specify the consequences of a public agency’s failure to make the determination within the specified time limit. Moreover, § 65924 provides a separate time period for the determination of completeness on applications, such as Kollsman's, that were submitted before January 1, 1978. See supra note 10. In 1979, § 65943 was amended to provide that “if such written determination is not made within 30 days after receipt of the application, the application shall be deemed complete for purposes of this chapter.” This amendment became effective on October 2, 1979.

12 . The district court's rationale for concluding that the application must be deemed complete on November 22, 1978, is somewhat opaque. The district court stated that as early as May 12, 1978, the City had all of the information that it could lawfully require Kollsman to supply. At 1095. The City, the district court found, suspended processing of the application and did not make a bona fide determination of completeness or incompleteness at any time prior to November 22, 1978. Id. After observing that the legislature intended that applications should be deemed complete "in the event of failure to meet the substantive requirements prescribed in § 65943 within the time limits,” and that Kolls-man’s application was in fact complete, the district court concluded that the application must be deemed complete as of November 22, 1978. At 1095.

Kollsman argues that a letter from the City dated November 14, 1979, may be read as a concession that the application was complete on November 22, 1978. The letter notified Kolls-man that the City intended to disapprove the application on November 21, 1979, in order to meet the one-year deadline. The district court observed that "the notice of November 14, 1979, reflects an awareness that the Kollsman application was complete in fact on November 22, 1978." At 1096. Nonetheless, the district court did not specifically rely on this observation in concluding that the application must be deemed complete on November 22, 1978. Instead, the court made its comments concerning the November 14, 1979, letter when it considered whether the. application should be deemed approved. See at 1096.

13 . The legislature specifically addressed the problem of pending applications when it amended § 65924. See supra note 10. When the legislature amended § 65943, however, it did not distinguish between pending and subsequent applications.

The City argues that before the effective date of the "deemed complete" provision of § 65943, an applicant’s remedy for-failure to comply with the time limits was to seek a writ of mandamus directing the agency to make the completeness determination.

14 . The City was not required to make a determination of the completeness of Kollsman’s application before November 26, 1978. See supra note 10. The City argues that if the district court correctly held that the determination of incompleteness on November 22, 1978, was ineffective, the proper conclusion is that this determination must 'be disregarded. Thus, if § 65943 applies retroactively, the City reasons that the earliest date that the application could be deemed complete is November 26, 1978.

15 . See supra note 3. If the one-year period commenced on November 26, 1978, the City’s disapproval of the project on November 26, 1979 was timely. November 25, 1979 was a Sunday, which extended the City’s time to act until the next working day. See Cal.Civ.Code §§ 7, 10. The City also maintains that its requests for additional information should be interpreted as implicit denials of Kollsman’s application. Cf. Carmel Valley View, Ltd. v. Maggini, 91 Cal.App.3d 318, 323, 155 Cal.Rptr. 208, 211-12 (1979) (request for supplemental information considered implicit disapproval for purposes of "deemed approved” provision of Subdivision Map Act). Kollsman attempts to distinguish Maggini by arguing that here the district court found that the City acted in bad faith.

16 . See supra note 6. Kollsman counters by arguing that the later enactment of Chapter 4.5 of the California Government Code takes precedence over the earlier legislation.

17 . The City relies on Woodland Hills Residents Ass'n, Inc. v. City Council, 44 Cal.App.3d 825, 118 Cal.Rptr. 856 (1975), which construed a then effective "deemed approved” provision of the Subdivision Map Act. Appellants challenged an advisory agency's approval of a subdivision. The trial court concluded that this action was deemed approved by the Planning Commission and the City Council because each body had voted by a tie vote to deny appeal from the advisory agency's decision. The Court of Appeals reversed, and held that the City Council had to determine if the project was consistent with the City’s general plan. See id. at 830-31, 837-38, 118 Cal.Rptr. at 858-59, 863-69.

18 . The Supreme Court's recent decision in Penn-hurst State School & Hospital v. Halderman, — U.S.-, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984), indicates that abstention often will be appropriate when state land use regulations are challenged on state and federal grounds. Pennhurst held that the Eleventh Amendment bars federal courts from ordering state officials to conform their conduct to state law. The Court acknowledged that under Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), and Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974), the Eleventh Amendment poses no barrier to prospective relief against state officials for violation of federal law. Justice Powell, writing for the Court in Pennhurst, noted:

A federal court’s grant of relief against state officials on the basis of state law, whether prospective or retroactive, does not vindicate the supreme authority of federal law. On the contrary, it is difficult to think of a greater intrusion on state sovereignty than when a federal court instructs state officials on how to conform their conduct to state law. Such a result conflicts directly with the principles of federalism that underlie the Eleventh Amendment. We conclude that Young and Edelman are inapplicable in a suit against state officials on the basis of state law.

104 S.Ct. at 911.

In a suit in which relief would run against the state, Pennhurst indicates that plaintiffs must go to state court to obtain relief based on state law. This is true even in cases in which the state law claims are pendent to federal claims. See id. at 919-20. Our holding in this case does not depend on Pennhurst; we need not determine if Kollsman’s suit is in fact a suit against the state. Cf. id. at 920 n. 34 (noting that suit nominally against local government officials is barred if relief effectively runs against state). We merely observe that state courts may be the sole forum for effective relief for state law claims in land use cases involving state and federal law. This fact provides a very persuasive grounds for abstention in such cases.

19 . Kollsman relies on Shamrock Development Co. v. City of Concord, 656 F.2d 1380 (9th Cir.1981) and Midkiff v. Tom, 702 F.2d 788 (9th Cir.1983) to support his argument that abstention is not required in this case. We believe that Shamrock Development and Midkiff are distinguishable. In the former case, we held that although abstention would have been appropriate, the district court had not abused its discretion by retaining the case. In Shamrock Development, a developer claimed that a city had violated state law and the state and federal constitutions by conditioning approval of a subdivision on the developer’s dedication of land for city street expansion. We believe that the case before us involves issues that are more complicated and more intrusive into a sensitive area of social concern than those involved in Shamrock Development. In Midkiff, the state law issues were not uncertain and their resolution would not obviate the need to address federal constitutional issues. See 702 F.2d at 789 n. 1.

Kollsman also argues that abstention will create unjust delay in the determination of his state law claims. This consequence, however, must be accepted when the demands of comity and federalism require abstention. See C-Y Development Co., 703 F.2d at 381. Nor does the fact that Kollsman also raised claims under 42 U.S.C. § 1983 alter our conclusion that abstention is appropriate. See id.