Kavanau v. Santa Monica Rent Control Board, 16 Cal. 4th 761 (1997)

Citation: Kavanau v. Santa Monica Rent Control Board, 16 Cal. 4th 761 (1997)
Parent Document: Kavanau v. Santa Monica Rent Control Board, 16 Cal. 4th 761 (1997)
Jurisdiction: California (state)
Effective Date: 1997-08-26
Original Source: https://www.courtlistener.com/opinion/5607899/kavanau-v-santa-monica-rent-con... ↗

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In Duquesne Light Co., supra, 488 U.S. 299, the court appeared to use the terms “due process” and “taking” interchangeably in referring to utility rate *790regulation that is confiscatory and therefore constitutionally defective. As the court stated, “[t]he guiding principle has been that the Constitution protects utilities from being limited to a charge for their property serving the public which is so ‘unjust’ as to be confiscatory. Covington & Lexington Turnpike Road Co. v. Sanford, 164 U. S. 578, 597 (1896) [17 S.Ct. 198, 205, 41 L.Ed. 560] (A rate is too low if it is ‘so unjust as to destroy the value of [the] property for all the purposes for which it was acquired,’ and in so doing ‘practically deprive[s] the owner of property without due process of law’); [citations]. If the rate does not afford sufficient compensation, the State has taken the use of utility property without paying just compensation and so violated the Fifth and Fourteenth Amendments.” (Duquesne Light Co., supra, 488 U.S. at pp. 307-308 [109 S.Ct. at p. 615], italics added.) However, it is clear that the Duquesne Light Co.’s equation of the two constitutional provisions was made only in reference to rate regulations that are confiscatory in their end result. (Duquesne Light Co., supra, 488 U.S. at p. 310 [109 S.Ct. at p. 617].) In other words, a rate regulation is judged to be a taking when its effect has been actually confiscatory, not when it violates substantive due process. As has been stated, “[A]bsent. . . deep financial hardship [of a regulated public utility], there is no taking, and ... no obligation to compensate . . . .” (Jersey Cent. Power & Light Co. v. F.E.R.C (D.C. Cir. 1987) 810 F.2d 1168, 1181, fn. 3 [258 App.D.C. 189]; accord, 20th Century Ins. Co., supra, 8 Cal.4th at p. 297.)

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