inversecondemnation.com

Two Big Island Planning Commissions?

Following up on this post.  West Hawaii Times is reporting (free registration may be required) the County of Hawaii is one step away from putting to voters the question of whether to have two Planning Commissions.  The County Council's Planning Committee approved the measure, and the last step before it makes the ballot is the full council. 

A source of controversy in the past, the Hawaii County Planning Commission makes recommendations to the County Council regarding land use changes. However, it also possesses decision-making powers with use permits, special permits including those which regulate shoreline uses, geothermal permits and spaceport permits.

(I like that last bit about "spaceport permits."  Makes me want to apply for one.)

Maui County currently has three Planning Commisions, but as Jesse Souki has pointed out here and here there may be practical and legal problems with having more than one Commission, esp when it covers a single island.

Opening Brief Filed in Ninth Circuit Maui Vacation Rental Appeal

Today we filed the Opening_Brief (250kb pdf) in Maui Vacation Rental Association, Inc. v. County of Maui, No. 08-15251, the Ninth Circuit appeal from the Hawaii district court's dismissal of MVRA's complaint which sought to declare Maui's shut down of vacation rentals illegal. 

I won't go into details of the case since the brief spells out the facts and arguments, but here are some prior posts on the case, and links to media coverage:

• Los Angeles Times: Maui: Vacation rentals and B&Bs shut down and 50 illegal Maui B&Bs & vacation rentals shut down

• San Francisco Chronicle: Maui County closes unlicensed bed and breakfasts and vacation rentals

• The Maui News: Vacation rental suit dismissed in federal court

• Honolulu Star-Bulletin: Maui B&Bs face 'crisis'

• inversecondemnation.com: Federal Court Dismisses Vacation Rental Due Process Claims -- Details (with links to the District Court's opinion, MVRA's complaint, and the briefs in the district court)

Land Use Round Up

Some interesting items, worth reading:

• According to this story, the preferred developer of the New London, Connecticut project that gave us Kelo apparently is on the ropes.  Professor Gideon Kanner's take on the latest misstep is here.

• From Dean Patty Salkin's Law of the Land blog, a summary of Agripost, LLC v. Miami-Dade County, No. 05-16499 (11th Cir. Apr. 22, 2008), the latest case on the Williamson County ripeness/res judicata Catch-22. 

• From the Court of Federal Claims comes Schooner Harbor Ventures, LLC v. United States, No. 06-87L (Apr. 15, 2008), where the landowner sought compensation after the Fish and Wildlife Service designated property as critical habitat for the Mississippi Sandhill Crane.  The landowner asserted that the designation killed a deal for it to sell the property to the Navy.  Too bad said the CFC, the right to sell the property to the Navy without restrictions is not a "property" right subject to Fifth Amendment protections:

The plaintiff’s argument fails in that the plaintiff is asserting that it had the right to sell its property to the government, without conditions imposed, in this instance to meet regulatory burdens  imposed on the Navy, by obtaining the mitigation parcel. Whereas, the right to alienate the property is a cognizable property interest, the right to sell the property to the government at a particular price and without conditions is not a cognizable property interest which is protected by the Fifth Amendment. 

Slip op. at 13. 

• The LA Times has commentary on California's upcoming Propositions 98 and 99, two items on the ballot regarding the exercise of eminent domain power and property rights:

Your decision on Prop. 98 may come down to how you answer two questions: Is it worth risking future public works projects, including water? Is rent control bad? If the answer is yes to both questions, vote yes on 98. If the answer is no to either question, vote no -- then yes on 99.

New Article Published: "Because They Can: Judicially Excising the People from the Definition of 'County' in the Hawaii Constitution"

The ABA Section on State & Local Government has published my article "Because They Can: Judicially Excising the People from the Definition of “County” in the Hawaii Constitution" in the State & Local Government Law News (Spring 2008). 

The article is a summary and analysis of County of Kauai ex rel. Nakazawa v. Baptiste, 165 P.3d 916 (Haw. 2007), the 3-2 decision in which the Hawaii Supreme Court creatively overcame justiciability problems to hold that the term "the counties" in the Hawaii Constitution's provisions regarding property taxes means "county councils."  In doing so, the court invalidated a voter-enacted Kauai charter amendment that would have rolled back property taxes to 1998 levels, and set a yearly cap on increases.  The dissenting justices accused the majority of "subverting the judicial process," and would have dismissed the case for lack of standing. 

For those of you who are not section members and don't receive a copy in the mail, the article is reposted here.  More on the case, including the majority and dissenting opinions, a Wall St. Journal story about the decision, and the briefs and oral arguments, is posted here.   

Cert Petition in Ceded Lands Case

In a very short (17 page) petition, the State of Hawaii has asked the U.S. Supreme Court to review a decision by the Hawaii Supreme Court regarding "ceded lands."  The petition argues that by basing its decision in Office of Hawaiian Affairs v. Housing and Community Dev. Corp. of Hawaii, No. 25570 (Jan. 31, 2008) on the "Apology Resolution," the Hawaii Supreme Court "effectively insulated its decision from any political check at the state level," an error only the U.S. Supreme Court can correct.  The cert petition is posted here.

The petition was filed filed by heavy-hitter Seth Waxman, a former U.S. Solicitor General, so despite its brevity, it should be taken seriously.  It asks the Court to review a single question: 

In the Joint Resolution to Acknowledge the 100th Anniversary of the January 17, 1893 Overthrow of the Kingdom of Hawaii, Congress acknowledged and apologized for the United States' role in that overthrow.  The question here is whether this symbolic resolution strips Hawaii of its sovereign authority to sell, exchange, or transfer 1.2 million acres of state land-29 percent of the total land area of the State and almost all the land owned by the State-unless and until it reaches a political settlement with native Hawaiians about the status of that land.

Petition at (i).  The petition notes, but does not focus on, a key point -- the ceded lands are supposed to be held in trust by the State "for the benefit of all citizens of Hawaii."   

First, the practical impact of this decision is enormous: it bars the State from prudently managing, for the benefit of all citizens of Hawaii, more than 1.2 million acres of State-owned land-29 per cent of the total land area of the State and almost all the land owned by the State.

Petition at 11 (emphasis added).  This point has been glossed over in recent decisions on ceded lands, and this petition gives the U.S. Supreme Court an opportunity to correct it. The petition obviously does not suggest that the usual route to SCOTUS review -- the "circuit split" -- is present, since the case presents facts and law that are unique, and have not expressly arisen in another case.  Instead, it argues that the Hawaii Supreme Court grossly misinterpreted federal law and that there is no other remedy available:

Absent review by this Court, this injunction will continue to hold the State hostage to the Hawaii Supreme Court's deeply flawed analysis of federal law.  The error and the injury in this case are unmistakable, and only this Court has the power to correct them. It should exercise that power.

Petition at 17.  Download the entire petition here.

The Euclidization of Public Use - A Dose of Reality For the Kelo Majority

In Kelo v. City of New London, 545 U.S. 469 (2005), the majority opinion authored by Justice Stevens, framed the issue presented in terms of the validity of "the development plan," and not whether the particular takings at issue were "for public use."

The disposition of this case therefore turns on the question whether the City's development plan serves a "public purpose."

Relying upon Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926), the case which upheld a municipality's power to zone provided it is exercised in the context of a "comprehensive plan," the Kelo majority upheld the New London taking because it was supposedly the product of a well-considered plan of "comprehensive character."

The City has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community, including--but by no means limited to--new jobs and increased tax revenue. As with other exercises in urban planning and development, the City is endeavoring to coordinate a variety of commercial, residential, and recreational uses of land, with the hope that they will form a whole greater than the sum of its parts. To effectuate this plan, the City has invoked a state statute that specifically authorizes the use of eminent domain to promote economic development. Given the comprehensive character of the plan, the thorough deliberation that preceded its adoption, and the limited scope of our review, it is appropriate for us, as it was in Berman, to resolve the challenges of the individual owners, not on a piecemeal basis, but rather in light of the entire plan. Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement of the Fifth Amendment.

Failing to see the differences between comprehensive planning (looking at land uses as a whole, rather than spot-zoning) and "comprehensive eminent domain" (I guess the more the government plans to take, the more deference its plan is due?), the Court seems to have a rather romantic vision of economic development and urban renewal plans. 

To inject a dose of reality, take read of a story entitled Urban renewal project in L.A. begets blight instead, the L.A. Times tells the tale of urban renewal gone wrong,

It was supposed to have been a model of urban renewal -- a mix of housing and classy stores to replace a decaying 20-acre shopping center at the foot of the affluent Baldwin Hills.

Instead, more than a year after the project was to be completed, Santa Barbara Plaza is a collection of dead or dying businesses surrounding a vast parking lot with weeds pushing through large cracks. Most of the housing was never built; none of the retailers ever came. The largely middle-class, African American area is stuck with a mostly deserted commercial slum.

Los Angeles leaders gambled on a check-bouncing, politically connected developer to shepherd the project. And after $15 million in government subsidies and more than $30 million in private investment, taxpayers -- and the community -- have lost.

Complete story here.  In somewhat the same vein as the L.A. Times story, read this op-ed from Professors David Beito and Ilya Somin, on how eminent domain has an "outsized impact on the constitutional rights of minorities."

I wish I could say that the Santa Barbara Plaza story was atypical, but it isn't.

Kauai Springs Zoning Permit Appeal

Today we filed the Opening Brief in Kauai Springs' appeal from the January 2007 decision by the Kauai Planning Commission to deny three zoning permits to the small, Kauai-family-owned water bottling company.

The case is an appeal from an agency decision under the Hawaii Administrative Procedures Act (a procedure known in other jurisdictions as a petition for a writ of administrative mandate or a petition for a writ of mandamus).  I won't go into the details of the case in this post, since the brief spells out the facts and the arguments in support.   

For more information about the case, here are some links to earlier media coverage:

• A May 2006 story about the case from the Honolulu Star-Bulletin

• A story from the Kauai newspaper about the TRO that halted the County's attempt to shut the business down while the appeal was being considered.

• Another story about the preliminary injunction that allowed Kauai Springs to stay open.

• "Kauai Springs: Still Open for Business" from Hawaii Reporter.

The Opening Brief is posted here (2.5mb pdf).

County Motion in Maui Affordable Housing Exaction Case

The County of Maui has filed a motion for summary judgment in the federal court challenge to the County's affordable housing exaction ordinance.  The memorandum in support of the motion is posted here (215k pdf).

The Maui ordinance, enacted last year, imposes a 40% to 50% affordable requirement on new housing developments.  I posted on the case earlier here (contains a link to the complaint), and analyzed the legal problems with the ordinance under state law here .

The plaintiff landowner earlier filed a motion for partial summary judgment (1.5mb pdf) asking the court to declare the ordinance unconstitutional on its face under the Nollan/Dolan doctrine of unconstitutional exactions, which requires the government to show a substantial nexus between the exaction and some problem caused by the property owner before the government may demand tribute as a condition of development.  The exaction must also be roughly proportional to the problem.  The plaintiff's motion is posted here.  See this post for more on the nexus analysis.

The hearing on both motions is currently set for June 2, 2008, at 9:45 a.m., before District Judge Ezra.

Disclosure: I presented testimony against an earlier version of the ordinance.

Upcoming Land Use and Eminent Domain Seminars

Head's up to two upcoming seminars worth attending: "Planning Zoning and Eminent Domain" (May 8-9, 2008), and "Planning and Zoning 101" (May 7, 2008), both of which will be put on by the Center for American and International Law, in Plano, Texas.  Registration information for both seminars is here.  The faculty is first-rate, and includes many of the stars in our field -- Gideon Kanner, Dwight Merriam, and Robert Freilich.  I won't be able to attend, but I have in the past, and highly recommend it.

New Federal Court Land Use Case Against County of Maui

A Lahaina business owner has sued the County of Maui in federal court in Honolulu.  In Goo v. County of Maui, CV 08-00172 DAE (filed Apr. 17, 2008), the Complaint alleges the County and Planning Department officials drove the International Open Market Place, a gift and craft fair, out of business by deliberately favoring a use prohibited under the zoning (a bank/credit union) over uses permitted under the zoning (plaintiff's business). 

The plaintiff also brings federal constitutional claims as well as claims for civil rights violations under 42 U.S.C. § 1983 and a Monell "deliberate indifference" theory.  The Complaint is posted here.

Cert Petition in Ninth Circuit Case on Reserved Powers, Contracts Clause in Repeal of Eminent Domain Ordinance (Matsuda)

The City and County of Honolulu has filed a petition for writ of certiorari in Matsuda v. City and County of Honolulu, No. 06-15337 (9th Cir. Jan. 14, 2008), asking the U.S. Supreme Court to review the case.  We don't have a copy of the cert petition yet, but when we do, we'll post it.  The Supreme Court docket report is here (No. 07-1305).

Matsuda involved th repeal of "chapter 38," Honolulu's version of the Hawaii Land Reform Act at issue in Hawaii Housing Auth. v. Midkiff, 467 U.S. 229 (1984).  Chapter 38 allowed for conversion of condominium interests to fee simple, via a condemnation process. 

In Matsuda, apartment owners applied to the city to "convert" (condemn) their apartment leases, and entered into written contracts with the city, in which the apartment owners each agreed to pay the city $1,000, in return for which the city promised that after its acquisition of the lease, it would convey it to the apartment owner.  The owners subsequently received the city's approvals, but final approval by the City Council was withheld because the council was already considering repealing chapter 38, which it did in 2005. 

The ordinance repealing chapter 38 eventually contained a provision allowing any conversion proceeding which has been approved by the City Council to be completed, but because Matsuda's had not received final council approval, the taking was denied.  Matsuda and others filed suit against the city in federal court, alleging that the repeal of chapter 38 was a violation of the U.S. Constitution's Contracts Clause.  The Ninth Circuit held that the district court should have viewed the repeal of Chapter 38 with "heightened scrutiny" because the repeal of Chapter 38 was the city voiding its own contracts.  A complete summary of the Ninth Circuit's opinion is posted here.

Tim Sandefur added his thoughts about Matsuda here, and Professor Gideon Kanner's are posted here.  More to follow when we receive a copy of the cert petition.

Book Review: Bulldozed - "Kelo," Eminent Domain, and the American Lust for Land

"If you can fight blight, why not create beauty?  If not beauty, why not bounty?"

With that phrase, author Carla T. Main, in Bulldozed: "Kelo," Eminent Domain, and the American Lust for Land, accurately and succinctly sums up the devolution of the Supreme Court's view of the role of judicial review in eminent domain from Berman, to Midkiff, to Kelo.

Bulldozed is accessible to both lawyers and non-lawyers, and is no dull scholarly summation of the current state of Public Use Clause law.  Rather, it places the issues in an understandable context by framing the legal details with the story of the Gore family of Freeport, Texas, and their straight-out-of-Forrest Gump shrimp processing business.  The taking of the Gore's property and business for Freeport's "economic development" resulted in the case Western Seafood Co. v. United States, No. 04-41196 (5th Cir. Oct. 11, 2006) (a case I blogged about here). Main provides more details and background than the court's dry recitation of the facts ever could, and in between recounting the Gore family's story, provides the reader with an understanding of how we ended up with a case like Kelo, a decision that seemed to baffle a majority of the public. 

Main begins at the birth of the Fifth Amendment and James Madison's concern that private property rights would not be respected by the newly formed United States, and tells the stories behind many of the seminal cases on eminent domain:

• West River Bridge Co. v. Dix, 47 U.S. 507 (1848), Daniel Webster's case in which the Court held that the Contracts Clause was no impediment to a state condemning an exclusive bridge franchise. 

• Berman v. Parker, 348 U.S. 26 (1954), the case in which the U.S. Supreme Court first equated the condemnation power with the police power, and held, in sweeping language by Justice Douglas, that "public use" under the Fifth Amendment includes takings for 

• Poletown Neighborhood Council v. City of Detroit, 304 N.W.2d 455 (Mich. 1981), overruled, County of Wayne v. Hathcock, 684 N.W.2d 765 (Mich. 2004), the case which opened the door to economic development takings, where an entire neighborhood was cleared to make way for a General Motors plant, based only on Detroit's hope that what was good for GM was good for Detroit.

The only case really missing from the lineup is Hawaii Housing Auth. v. Midkiff, 467 U.S. 229 (1984), the opinion authored by Justice O'Connor that set up her dramatic turnabout in her dissenting opinion in Kelo.  Midkiff is a fascinating story and could be the subject of another book, so on the whole, it's a minor omission from Bulldozed.

Main also details how beginning in 2001, the courts began to take public use objections seriously, especially in the context of economic development takings, where one person's private property is transferred to another because the new owner promises to make more intense use of it.  This awakening by the courts culminates in the Supreme Court litigation in Kelo v. City of New London, 545 U.S. 469 (2005).

Of course, given the title of the book, an entire chapter is devoted to the arguments in Kelo, the case which brought eminent domain squarely to the American public's consciousness.  The Kelo backlash is the subject of another entire chapter.  These sections are among the more enjoyable and accessible in the book.  They detail the high drama of legal cases that make their way to the Supreme Court, and highlight the depth of emotion and passion aroused when people's homes, businesses, and neighborhoods are threatened.

Anyone who may wonder why property owners fight the taking of their property and businesses, despite the often overwhelming array of government power leveled at them need to read Bulldozed.  Bulldozed is available from Amazon.

Condemnation Blight and Clouding Use

On the topic of the Willets Point case, inequitable precondemnation activities, and condemnation blight, thanks to Professor Gideon Kanner for reminding us of his seminal article on the subject, Condemnation Blight: Just How Just Is Just Compensation?, 48 Notre Dame Law Review 765 (1973) (the Notre Dame Law Review was then called the Notre Dame Lawyer).

I read it a while ago, but it's worth revisiting.  It received the Shattuck Prize from the American Institute of Real Estate Appraisers (now the Appraisal Institute) and it was the sole authority relied on by the Oregon Supreme Court in rejecting the New York Clement rule.  More about the subject here (Professor Kanner's Gideon Trumpet blog).  Check it out.

Blighting Property by Inequitable Precondemnation Activities

Thanks to No Land Grab for informing us of the latest eminent domain action from New York City, this time with an interesting twist.  In Willets Point Industry and Realty Ass'n v. City of New York, No. 08-1453 (E.D.N.Y. filed Apr. 9, 2008), land and business owners in Queen's, N.Y. filed a federal court complaint alleging that the City purposefully withheld vital infrastructure improvements such as sewers, paved streets, and trash removal, among other things. 

4.  Why are the City Defendants waging this campaign of neglect against one of the City's own neighborhoods?  The reasons probably have changed over the decades but, on information and belief, at least one of the reasons behind the current campaign is clear.

5.  New York City is undertaking a project to acquire Willets Point, evicting the existing businesses (which likely will lead to their destruction), and replace them with businesses that the City deems more desirable.  The City Defendants can help this project by driving down the value of the existing businesses and their property, so that the City more easily can justify and finance the exercise of its powers of eminent domain.

Complaint at 2.  Would municipal condemnocrats* do such outrageous things?  Well, allegations like those in the latest case are hardly a new story; check out Village of Willowbrook v. Olech, 528 U.S. 562 (2000) (per curiam) where the Court held that a landowner who asserted that local officials retaliated against her for winning an earlier lawsuit against the village was entitled to bring a "class of one" equal protection claim, for example.  See also Klopping v. City of Whittier, 500 P.2d 1345, 1350 n.1 (Cal. 1972), where the court noted:

it would be manifestly unfair and violate the constitutional requirement of just compensation to allow a condemning agency to depress land values in a general geographical area prior to making its decision to take a particular parcel located in that area. The length of time between the original announcement and the date of actual condemnation may be a relevant factor in determining whether recovery should be allowed for blight or for other oppressive acts by the public authority designed to depress market value.

*My colleague Mark Murakami's term for bureaucrat/condemnors.

The View From the Office (a few minutes ago)

Apropos of nothing relating to the usual topics of this blog is this view from my office window a few minutes ago. But I thought I would share it anyway.

Opening Brief in Kona Eminent Domain Appeals: Damages for Failed Condemnations, Abatement, and Pretext

Today, we filed the Opening Brief in County of Hawaii v. Richards, No. 28882, the consolidated appeal from two eminent domain lawsuits filed by the County in 2000 and 2005.  I won't go into detail about the case and will let the brief speak for itself since I am part of the legal team representing the appellant/property owner. 

The issues in the case include:

• application of Haw. Rev. Stat. § 101-27 (1993), the statute that provides that the government must make a property owner whole and pay damages when an attempt to take property by eminent domain is discontinued or dismissed

• whether the government may concurrently prosecute more than one condemnation lawsuit at the same time

• the standards for demonstrating that the government's claim of public use is pretext to hide private benefit

The brief, minus Appendices, is posted here (1.8mb pdf)

A link to the trial court's findings, along with a summary of the case is posted here.

Oral Arguments in ICA Appeal on Kuilima EIS (mp3)

The recording of today's oral arguments in Unite Here! Local 5 v. City and County of Honolulu, No. 28603 has been posted here.  (Be prepared -- it's a 93mb file).  The briefs of the parties are posted here.

A report from KHON-TV2, with video of the site and the arguments is posted here.

The appeal involves the question of whether the City should have required the Kuilima Resort to prepare a supplemental Environmental Impact Statement.

Update: Charley Foster has posted a summary of the arguments and analysis. 

Merits Briefs in Upcoming ICA Appeal on Kuilima Resort Environmental Impact Statement

On April 9, 2008, the Hawaii Intermediate Court of Appeals will be hearing oral arguments in Unite Here! Local 5 v. City and County of Honolulu, No. 28603, the appeal involving the question of whether the City should have required the Kuilima Resort to prepare a supplemental Environmental Impact Statement.  Here are the main merits briefs of the parties:

• Opening Brief (2.5mb pdf)
  

• City's Answering Brief (1.3mb pdf)
  

• Kuilima_Resort's Answering Briefs (3mb pdf)

The issue, as stated by the Appellants:

Does the Hawai'i Environmental Protection Act (HEPA) [Haw. Rev. Stat. § 343-1, et seq.] and the Environmental Council Rules (HEPA Rules) obligate a public agency to determine whether a project requires a Supplemental Environmental Impact Statement (Supplemental EIS or SEIS) where new circumstances and evidence bring to light likely increased environmental impacts not previously dealt with in the project's twenty-two (22) year old EIS?

Opening Brief at 1.  The Resort, naturally, phrases the issue somewhat differently:

Plaintiffs challenge Kuilima's development Project, which the City and State entitled in 1986 based in part on the EIS.  Since the entitlements, and until this litigation began in January 2006, the Project proceeded forward.  Plaintiffs emphasized at the trial level that the lapse in time from 1986, without completion of the Project, is a "change" in the Project that, coupled with alleged changes in the regional environment over that time, requires an SEIS.  Plaintiffs continue to rely on alleged regional changes in environmental conditions since the acceptance of the EIS, but now argue that those changes, by themselves, form a stand-alone basis to require an SEIS under the last sentence of HRS [sic] § 11-200-27.  This misinterpretation of the SEIS Rules is just another argument that the lapse of time is enough to require an SEIS. [footnote omitted]

Kuilima Resort's Answering Brief at 1.

Cases and Links From Today's Seminar

To all those who attended today's seminar, thank you.  Here are the links to the cases I mentioned.  From the morning session on Case Law Update:

• Wilkie - Government Gone Wild! - no comprehensive federal remedy for federal interference with property
• My Advertiser op-ed on Wilkie
• Crown Point - Ninth Circuit abandons Armendariz doctrine
• Cine SK8 - one way to prove a substantive due process case
• Post-Kelo claims of pretext:

• Franco - District of Columbia Court of Appeals - allegations of pretext cannot be summarily dismissed

• Goldstein v. Pataki - Second Circuit - government's claim of public use trump claims of pretext - cert. petition filed March 31, 2008

• Brescia - shoreline setback and equitable estoppel - HAWSCT holds you gotta get your "official assurances" from the right party
• Private agreements and public process - development and settlement agreements not a substitute for zoning process

From the afternoon session on Appealing an Administrative Zoning Decision:

• Hawaii Home Infusion - venue in administrative declaratory actions under § 91-7
• CARD - can a § 91-8 declaratory action substitute for an appeal?
• Colony Surf - nonconforming uses and reliance on administrative procedures
  
• E & J Lounge - what is a "contested case?"  See also Aha Hui Malama v. Kaniakapupu v. Land Use Comm'n (July 24, 2006)
• Rees v. Carlisle - private rights of action
• Silva v. City and County of Honolulu - the basis for rational basis equal protection arguments must be in the record

Questions?  Want a copy of the vested rights/zoning estoppel law review article? Drop me an email.

Discretion Wins Out Over Valor in Half Moon Bay Inverse Condemnation Case

Remember that whopping $36.8 million inverse condemnation judgment against the City of Half Moon Bay, California by the U.S. District Court back in November 2007?  Yamagiwa v. City of Half Moon Bay, No. 05-4149 VRW (Nov. 28, 2007).  The city said at the time it was going to appeal, and it hired some pretty impressive guns to do so.  Now, however, it appears that the city has changed its mind, as reported in the San Francisco Chronicle's story, "Half Moon Bay's plan to avert fiscal ruin."

In a move to save their city government, Half Moon Bay officials tonight approved a settlement agreement with a developer who won a $36.8 million court judgment last fall that threatened to leave the city in financial ruins.

The Half Moon Bay City Council signed off on an $18 million settlement to developer Charles "Chop" Keenan, whose trustee wanted to build an 83-unit subdivision on a 24-acre property that the city had inadvertently turned into protected wetlands.

Under the agreement, which was accepted by the developer, the city could get out of paying a cent if it can successfully get special legislation passed that would allow Keenan to build 129 lots on the property and an adjoining parcel, bypassing wetlands protection laws.

Read the complete report here.  The city probably should have thought about the consequences before it turned the plaintiff's property into undevelopable wetlands, but government regulators often don't seriously consider the possibility of losing.  The law is stacked against property owners, and government has no problem interposing all sorts of procedural hurtles in an effort to expense the property owner down (as one government attorney once confessed, "we'll 'motion' you for a year before we ever reach the merits").  Even if the government eventually loses, any monetary judgment will be paid with O.P.M. (Other People's Money).  In this case, however, the judgment was more than three times the annual municipal budget, an amount so large it could not be ignored by the city fathers and mothers. 

Read the District Court's 167-page Findings of Fact and Conclusions of Law if you want to find out the whole sordid story of what led up to the judgment. 

Cert Petition in Goldstein v. Pataki: How to Plead Kelo Pretext

The homeowners threatened with eminent domain for the Atlantic Yards project in Brooklyn, New York have filed a petition for a writ of certiorari in Goldstein v. Pataki, 516 F.3d 50 (2d Cir. 2008).

The petition points out the schizophrenic nature of Public Use analysis after Kelo: on one hand, the Court's holding that "pretextual" takings are prohibited, and incidental public benefits are not enough, seems to invite inquiry into the motivations of the condemnor and the "actual purpose" of the taking.  On the other, the Court's continuing reliance on the sweeping language of Berman and Midkiff may suggest that any reason that is "conceivable" would insulate a taking from further judicial scrutiny.  The Second Circuit in Goldstein chose the latter path.  As I wrote here:

The crux of the issue in Goldstein was whether factual allegations of pretext could be trumped by the invocation of the Berman-Midkiff-Kelo legal standard of conceivable public use.

In other words, the appellants have effectively conceded what Rosenthal found to have been a complete defense to a public-use challenge: that viewed objectively, the Project bears at least a rational relationship to several well-established categories of public uses, among them the redress of blight, the creation of affordable housing, the creation of a public open space, and various mass-transit improvements.

Slip op. at 13-14.  Here's the Second Circuit's rationale in a nutshell:

We need not go further. As Berman and Rosenthal illustrate, the redevelopment of a blighted area, even standing alone, represents a “classic example of a taking for a public use.”

Slip op. at 15.  In other words, according the court, it doesn't matter one whit whether a taking was accomplished by ignoring or subverting the public process, whether a taking was designed to bestow private benefit on a government insider, or whether a taking was accomplished to punish a landowner for wanting to develop her property.  Under the Goldstein holding, such facts are not relevant unless some conceivable post-hoc linkage between the project and public benefit cannot be be conjured up from the record by government lawyers or a court.  Fat chance of that happening since -- as Justice Scalia once noted -- government agencies generally do not employ "stupid staffs" who cannot paper a record with some possible public benefits that may stem from just about any project or regulation. 

The Questions Presented by the Goldstein petition:

Is the Court’s statement that the Public Use Clause prohibits the taking of “property under the mere pretext of a public purpose, when [the] actual purpose [is] to bestow a private benefit,” Kelo v. City of New London, 545 U.S. 469, 478 (2005), a rule of general application, or is it limited to takings justified solely on economic development grounds?

Does the substantial deference afforded to legislative public use determinations under Hawaii Hous. Auth. v. Midkiff, 467 U.S. 229 (1984), apply to non-legislative condemnation decisions?

What are the elements of a Public Use Clause claim, and how should such a claim be evaluated on a motion to dismiss, given the tension between Kelo’s
assurance that “purpose” and “pretext” matter and Midkiff’s statement that courts should defer to a legislative taking that appears “rationally related to a conceivable public purpose”?

The petition is posted here.  A press release with background is here.

Kelo has been wielded too broadly.  It did not, as many courts wrongly assume, validate all economic development takings, or takings supported by a blight determination.  The only question presented by that case was whether economic development takings are, in all cases, violative of the Public Use Clause.  In other words, a claim of per se invalidity, i.e., they never are legal.  The Kelo opinion was careful to leave open the possibility that in individual cases, takings supported by claims of blight or economic development would not pass muster because the claims are pretextual or a subterfuge, a position expanded upon by Justice Kennedy in his concurring (and fifth vote) opinion. 

Finally, keep in mind that Goldstein is a pleadings case -- the plaintiffs' complaint was dismissed for failing to state a claim under Rule 12(b)(6) -- where the court held that even if everything the plaintiffs claimed were true, they were not entitled to go forward and muster proof.  That's stretching Kelo too far.

Land Use Seminar This Week

There's still time to sign up for the "Practical Guide to Zoning and Land Use Law" seminar, to be held Thursday, April 3, 2008, in Honolulu.  I will be leading sessions on Current Case Law and Legislative Update, and Appealing an Administrative Zoning Decision.  A detailed agenda and registration information are posted here. 

The First Amendment, the Ninth Circuit, and the Ten Commandments

While not exactly on the usual topics of this blog, the Ninth Circuit's opinion in Card v. City of Everett, No. 05-35996 (Mar. 26, 2008) is worth a read.  It involves the question of whether the placement of a reproduction of the Ten Commandments (the tablets, not the movie) on the grounds of Old City Hall in Everett, Washington violates the state and federal establishment clauses.  As usual in these type of cases, the facts are fascinating, as is the debate over the controlling law. 

In the end, the Ninth Circuit held that the city's display does not run afoul of either the Washington or the U.S. Constitutions.  Perhaps the best line of the opinion is in the concurring opinion of Judge Fernandez:

I applaud Judge Wardlaw’s scholarly and heroic attempt to create a new world of useful principle out of the Supreme Court’s dark materials.

Slip op. at 3039 (Fernandez, J., concurring) (citing Milton, Paradise Lost).  Read the complete opinion here.

Well, What Do You Know: Condemnees Have Due Process Rights!

In a series of decisions that in any context but eminent domain would be unsurprising, the New Jersey Superior Court, Appellate Division, held that a property owner whose land is targeted for involuntary acquisition is entitled to be told about it first.

In Harrison Redevelopment Agency v. DeRose, Nos. A-0958-06T2, A-0382-07T2 (Feb. 25, 2008), the court held that a property owner was entitled to challenge the designation of his property as part of a redevelopment district despite the fact that the statute of limitations for challenging the designation had long since passed.

Many state redevelopment statutes and eminent domain codes provide that if a property owner has objections to the designation of her property as part of a redevelopment district, or has objections to public use, she has only a short time to act.  New Jersey law, for example, limits objections to 45 days; New York statutes to 30 days.  The issue, as stated by the DeRose court:

The central and recurring question before us is whether a property owner who fails to challenge a redevelopment designation containing his or her property within forty-five days of its adoption by a municipal governing body, pursuant to the Local Redevelopment and Housing Law ("LRHL"), N.J.S.A. 40A:12A-1 to -49, may still challenge, in full or in part, the public purpose of the taking of his or her property, by way of a defense in an ensuing condemnation action. To date both this court and the trial courts have rendered conflicting answers to that fundamental question in unpublished decisions.

The importance of such matters of timeliness is heightened by the fact that the LRHL does not, as it is presently worded, require a municipal governing body to provide individual advance notice to an owner that it is considering designating his or her property for redevelopment, and thus may take that property in the future through the power of eminent domain. Nor are property owners entitled under the LRHL to individual notice after a governing body approves such a designation, unless the owner had previously filed a written objection while the proposed redevelopment was being preliminarily evaluated by the local planning board.

Slip op. at 3-4.   The court held that the government has an obligation to provide property owners with "contemporaneous written notice" that "fairly alerts" the owners that their property has been designated for redevelopment, that such a designation is a finding of "public use" and allows the government to take their property by eminent domain, and that the owners have a short time in which they may object.  Slip op. at 4.  If such notice is not provided, the property owner may contest the designation when his land is condemned.  If, however, the government properly notifies the property owners, the owners must bring an action within the 45-day limitations period, and cannot wait to raise objections in their defense to a later-filed condemnation.

The notion that people whose property is targeted for acquisition deserve actual notice of that fact, and notice of a truncated objection period should not be controversial, yet it often is.  In DeRose, the redevelopment agency claimed that requiring it to actually tell property owners that their land is subject to redevelopment "would signal the 'death knell' for redevelopment in Harrison and other municipalities."  Slip op. at 39.  Telling landowners that we want your property would bring redevelopment efforts to a halt -- imagine that!   The agency never explained why this would be so, and why property owners aren't entitled to be informed of their rights (this brings to mind the other part of the Fifth Amendment -- the self-incrimination clause -- and the Miranda warnings required to be given to suspects). 

In several other recent cases, the courts rejected government's arguments that it was not required to undertake great efforts to provide an owner actual notice: 

• In Jones v. Flowers, 547 U.S. ___ (2006), the U.S. Supreme Court held that the government has an obligation to take further measures when it actually knows that its earlier attempts to notify the property owner have failed (the government's letter was marked "return to sender").

• In Brody v. Village of Port Chester, 434 F.3d 121, 132 (2d Cir. 2005), the court held that the government had an obligation to inform the landowner of the 30-day limitation period under New York law to challenge a redevelopment designation.
  

• In Divine v. Town of Nantucket, 449 Mass. 499, ___ N.E.2d ___ (July 19, 2007), the Supreme Judicial Court of Massachusetts invalidated a 40-year old taking because the owner was not provided actual notice many years ago.

The DeRose court also is worth reading because it expressly recognizes what many other eminent domain opinions fail to:

Although we have been called upon the resolve several rather abstract issues arising under our laws and constitution, we undertake that responsibility mindful that these cases, in a very tangible way, involve a real community, and the real people who live, work and own property there. 

Slip op. at 7.  Read the complete opinion here.

Thanks to New Jersey Eminent Domain Law Blog for posting links to the three opinions and summarizing their holdings here.  A report on the decision here by the New Jersey Star-Ledger.

Epstein on the Didden Case

In Forbes, law prof Richard Epstein writes "The Taking of Port Chester" about the Didden v. Village of Port Chester case.  The facts of Didden are particularly egregious -- in return for a private developer's promise to withhold an exercise of eminent domain, a landowner was offered a choice: give the developer $800,000, or a one-half interest in the owner's planned use of the property.  The owner had plans to put in a CVS Pharmacy, but the developer convinced the Village that his plan to put in a Walgreen's was better, and the Village agreed to use eminent domain to stop Mr. Didden.  Professor Epstein writes:

It takes no financial wizardry to see that the expenses on both sides of this high-priced battle are a social waste if all they do is replace a CVS pharmacy with a Walgreens. The Port Chester saga reveals the institutional flaw of modern takings law. Undue judicial deference creates large amounts of government discretion that in turn invites self-interested actors to game the system.

Complete article here.