In January 2010, Scholars Academic Foundation moved into a space located at 3810 Foothill Blvd. in La Crescenta in the Glendale annex and began operating a school. In February 2010, the City of Glendale conducted an inspection of the property and found what it concluded to be serious health and safety violations. The City yellow tagged the school (temporarily closed it) to allow repairs to be made. The City ultimately obtained a restraining order barring the school from reopening without obtaining the required permits.

The school abandoned the application process and moved out of the city. Scholars filed suit against the yellow tagging and failure to issue permits constituted a Taking in violation of the California Constitution.

Following a court trial in 2012, Judge David S. Milton sided with Scholars and awarded them $135,000 in damages.  The City appealed that decision.

On April 3, 2014, a three-judge panel of the California Court of Appeal reversed the ruling and concluded that there had been no Taking and that Scholars is not entitled to any award of damages against the City.

The City feels the decision confirms that the City acted lawfully in dealing with a business that was operating in violation of state and local laws.  Scholars’ only recourse at this time is to request that the California Supreme Court review the case.