San Diego Gas & Electric Co. v. City of San Diego

In 1966, San Diego Gas & Electric Company (the company) (plaintiff) acquired a parcel of land in the city of San Diego (defendant). The company intended to use the land to construct a nuclear power plant. In 1973, the city rezoned 39 acres of the property from industrial to agricultural and established an open-space plan. The city categorized the company’s land as an open-space area. The company did not submit any applications to the city to use or develop the property and instead filed suit in superior court against the city, alleging that the city followed a policy of refusing to approve any development that was inconsistent with the open-space plan. The company alleged that the only beneficial use of the property was industrial and that the city would prohibit such use, thus depriving the company of the entire beneficial use of the property and resulting in a taking without compensation. The superior court granted judgment in favor of the company, and the city appealed. The court of appeals affirmed. The state supreme court granted the city’s petition but retransferred the case to the court of appeals for reconsideration in light of the Supreme Court’s holding in Agins v. City of Tiburon, 447 U.S. 255 (1980), in which the court held that an individual that is deprived of all beneficial use of their property by a zoning regulation is not entitled to damages in an inverse-condemnation proceeding and may only seek invalidation of the regulation in an action for mandamus or declaratory relief. The court of appeals reversed the superior court’s judgment and held that the company could not recover compensation through inverse condemnation and that there were factual disputes that prevented a finding for mandamus or declaratory relief. The company appealed to the Supreme Court.