Kavanau

In this case, we consider the inverse condemnation claim of Earl W. Kavanau, a property owner who prevailed in a prior action against the Santa Monica Rent Control Board (Rent Board) on the ground that the rent control regulations of the City of Santa Monica (the City) violated his right to due process of law. The Court of Appeal affirmed the trial court’s dismissal order, rejecting Kavanau’s inverse condemnation claim because he *767 had not lost “all use of his property.” We disagree that a property owner must lose all use of his property in order to have a viable inverse condemnation claim. Nevertheless, we conclude Kavanau is not entitled to maintain an inverse condemnation action, because he may obtain a full and adequate remedy for any interim loss flowing from the due process violation through an adjustment of future rents under the rent regulation process. Accordingly, we affirm the judgment of the Court of Appeal.

Factual Allegations and Procedural Background

Kavanau’s complaint alleges as follows. In 1988, he purchased a 10-unit apartment building in the City. At that time, the building was already subject to the City’s rent control law, which limited rent…

I concur in the majority opinion. I write separately to attempt further clarification of the relationship between due process and takings jurisprudence in the context of rent control and rate regulation generally.

The term “due process” has at least two distinct meanings or applications in the field of rate regulation: (1) substantive due process, i.e., whether the scheme of regulation in question is “ ‘ “arbitrary, discriminatory, or demonstrably irrelevant to the policy the Legislature is free to adopt . . . ” (Pennell v. San Jose (1988) 485 U.S. 1, 11 [ 108 S.Ct. 849, 857 , 99 L.Ed.2d 1 ] (Pennell)); (2) what can be termed “confiscatory” due process, i.e., whether a given scheme of rate regulation, although not per se or facially invalid, is confiscatory in its result and has prevented an opportunity to obtain a just and reasonable rate of return on investment. (See Duquesne Light Co. v. Barasch (1989) 488 U.S. 299, 307-308 [ 109 S.Ct. 609, 615 , 102 L.Ed.2d 646 ] (Duquesne Light Co.).) As explained below, it is this latter confiscatory due process analysis that significantly overlaps the takings clause.

Substantive due process analysis of price and rate regulation is fairly…

I respectfully dissent from the majority’s holding that a compensable taking cannot occur even though the government, acting through its rent control board, deprives a landlord of the opportunity to earn a fair and reasonable return on the landlord’s property through unconstitutional and confiscatory application of its rent control regulations. I share Justice Croskey’s view, expressed in his dissent below: “I can perceive of no reason in law or logic why a confiscatory rent control regulation, found to be unconstitutional on due process grounds, would not result in a compensable taking if it were nevertheless enforced and a monetary deprivation resulted. I can imagine no clearer example of a case where compensation should be paid than where the government has illegally taken or diverted to its own social goals the private property of one of its citizens. Indeed, such a *793 common sense result and statement of principle should need no citation of authority.”

In a decision now final (Kavanau v. Santa Monica Rent Control Bd. (1993) 19 Cal.App.4th 730 [ 23 Cal.Rptr.2d 724 ] (Kavanau I), the Court of Appeal held that, as a result of the constitutionally impermissible action of…