inversecondemnation.com

Administrative Appeal or Original Jurisdiction Lawsuit?

Jesse Souki has some interesting thoughts on the recent Intermediate Court of Appeals decision in  E & J Lounge Operating Co. v. City and County of Honolulu, No. 27940 (Dec. 24, 2007), over at his Hawaii Land Use Law blog:

Prior to the instant case, Hawaii courts strained to find a contested case before it granted standing.  See, e.g., Mahuiki v. Planning Comm'n, 65 Haw. 506 (1982) (opining that "a public hearing, conducted pursuant to public notice, has been deemed a 'contested case' within the meaning of HRS § 91-1”).

Jesse then noted that the ICA determined that while an administrative appeal under chapter 91 may not be available, the courts have "inherent power" to review agency decisions, and that application of this rule may result in better opportunities for judicial review than the limited review of the record available in an administrative appeal:

A court's "inherent power of review" is as broad as it can be argued; consequently, this decision may provide more flexibility for challenging government land use decisions in the circuit court.

Read his complete post here.  It seems to me that a trial court's "inherent power of review" is another way of saying "original jurisdiction," so I posted the following as a comment to Jesse's post:

What is left unstated in the opinion is that while an administrative appeal pursuant to chapter 91 isn't available if the agency didn't hold a "contested case," there may be other avenues for judicial review, such as filing an original jurisdiction lawsuit, or a claim for declaratory judgment. 

You're right that the courts have strained in the past to find that an agency hearing was a "contested case," such that a circuit court could exercise appellate jurisdiction.  I think the reason is that in those days, the standing doctrine was a substantial limitation on the circuit court's ability to entertain an original jurisdiction lawsuit, and when the plaintiffs were not the permit applicants or the property owners, but instead were your classic agency "intervenors," the court rightly believed these folks would have a harder time establishing standing if they could not rely on participation in a contested case.

Those standing barriers did not exist in agency appeals; as long as a person participated in an agency hearing in some fashion and could deemed to have been "aggrieved" by the result, they were entitled by HAPA to invoke the circuit court's appellate jurisdiction. 

But HAWSCT's late reformation of its standing jurisprudence has made that distinction largely irrelevant.  Today, standing in circuit courts is very nearly a pleading formality, and serves no real gatekeeping function, especially in cases which the court deem worthy of review.

Under the rationale of E & J Lounge, why should a plaintiff confine their claims to an administrative record and the other limitations of a chapter 91 appeal to circuit court?

2007 in Review: Government Gone Wild

Government Gone Wild: the sad case of Wilkie v. Robbins. In perhaps the low point of 2007, the U.S. Supreme Court held that a landowner who was subject to systematic harassment by government officials because he had the temerity to refuse to give up a public easement on his land without just compensation did not have a comprehensive federal remedy.

Details of the case here, and an op-ed I wrote about the decision for the Honolulu Advertiser, "Little-noticed decision erodes property rights," is posted here.

2007 Land Use in Review

Another year has come and gone.  In Hawaii, two of the hottest "land use" related topics in the public arena remain public beach access and transient vacation rentals.  Yet, there wasn't much to report in the way of developments in the law in these areas, as the courts did not address these issues directly in any decisions.   Nor were there any true "blockbuster" decisions from the U.S. or Hawaii Supreme Courts. No Kelo, no Lingle, no Rapanos.  But there was a fair amount of sorting out in the lower courts, and the lack of attention-grabbing cases certainly it doesn't mean that 2007 wasn't a very interesting year in land use law. 

Over the next several days, I'll post some of the highlights (or lowlights, depending on your point of view) in land use law and other topics covered on inversecondemnation.com in 2007.  Look for the category "2007 in review" linked on the right, or visit the summary page for links to the stories.

If you think I missed any key cases or events, please email me or add the topic yourself in a comment. 

Here's the 2006 summary.

NY Times Catches a Recurring Vibe

In a story dated December 30, 2007 in the New York Times Travel section, "Not in My Tropical Backyard," Christoper Pala ties together several seemingly-unrelated threads: the Hawaii Superferry, development on Molokai, the Hokulia project on the Big Island, and expanded resort development on Oahu's North Shore.  The only issue that seems to have been left out is the question of vacation rentals.  The unstated thesis seems to be that these events are spurred, in large part by "backlash" against tourists and related development, but that seems like only part of the vibe -- and it may be more the "drawbridge protectionism" discussed in this post, and a perception that we're nearing capacity and things just aren't the way we remember them, than a specific anti-tourism or anti-outsider sentiment. 

What Is A "Contested Case"

Although the decision is not about land use, the Hawaii Intermediate Court of Appeals' decision in E & J Lounge Operating Co. v. City and County of Honolulu, No. 27940 (Dec. 24, 2007) is worth a read since it analyzes when an agency is required to hold a "contested case" (an administrative trial) in processing license and permit applications, and when a public hearing may suffice.  The court held that an entitlement to a liquor license is a "privilege" not a right, because the liquor commission has broad discretion to determine whether to issue a license, and that since no property right was at stake, the commission was not required to conduct a contested case.

PA Supreme Court Upholds Use of Eminent Domain to Take Private Property And Turn Over to Religious School

In a case at the intersection of Kelo-style eminent domain and First Amendment church-state issues, the Pennsylvania Supreme Court in In re Condemnation of 1839 North Eighth Street, No. 36 EAP 2006 (Dec. 29, 2007), held that the taking of property designated as "blighted" pursuant to a redevelopment plan, and for a nominal price transferring it to a religious entity did not violate the U.S. Constitution's Establishment Clause.

In 1968, a Philadelphia neighborhood which included the subject property was certified as "blighted" by the city's planning commission.  Thirty-four years later, in 2002, a coalition of Catholic groups asked the city's redevelopment authority to take 39 acres of the neighborhood, including the subject property, and turn it over to establish a "non-denominational, faith-based, not tuition based school."  The city approved of the plan and condemned the property, listing the Catholic group as the developer.  The property owner objected to the taking, alleging:

the taking of the Property was not for a public purpose; that the taking was  arbitrary, capricious and discriminatory; that the taking is the result of a  predetermined illegal commitment to a religiously-affiliated private entity; and that Condemnee’s due process rights were violated.

Slip op. at 3.  The trial court upheld the taking, and held that since the property was declared blighted, it didn't matter to whom the property was transferred.  The Supreme Court affirmed the judgment for different reasons.  It relied on Justice Kennedy's concurring opinion in Kelo and held the record did not support a claim of bad faith by the redevelopment agency, and that the only question was whether turning over the property to a religious organization violated the Establishment Clause. 

The court applied the three-part test of Lemon v. Kurtzman, 403 U.S. 602 (1971), and held (1) that there was a secular purpose in the taking (to eliminate blight), (2) that the primary effect of the taking was to develop a school, and even though the organization was sectarian that religious education was not the principle reason for the taking, and (3) that the taking and transfer to a Catholic group did not "excessively entangle" church and state.

Justice Baer dissented.  He agreed with the court's analysis of parts (1) and (3), but disagreed that the principle reason for the taking was secular.  He argued that government advances religion when it takes property and transfers it to a religious organization to run a religious school for nominal consideration, it is the same thing as government providing direct aid to a religious school.  Justice Baer relied on the stated nature of the organization to support his conclusion that the school would be religious:

The Hope Partnership described the venture as being between “[t]wo  Communities of religious sisters, the Society of the Holy Child Jesus and the Sisters of Mercy. . . .” R.R. at 43, 47. It further explained that “[t]his collaborative venture is being built on the long established Holy Child and Mercy traditions of service, characterized by reverence, compassion, and belief in the life-changing power of education. As vowed religious, we are called to journey with those in need. . . .” Id. One of the purposes of the Sisters of Mercy, which is a Roman Catholic Order, is to operate schools devoted to education under the principles of commitment to God. The school that Hope Partnership seeks to run will be based on a model inspired by Judeo-Christian values that is nondenominational, but assumes the presence of God.

Dissenting slip op. at 2.  Justice Baer would have held that the transfer of the condemned property is no different than direct government aid to a religious organization, and thus the taking would not serve a public use:

I believe this is a case of direct government aid, in the form of a land transfer below market value to a religious organization for the development of a religious school. The state action here is neither directed at, nor directly benefits, individual students without regard to where they choose to apply the aid. Instead, the aid here is essentially a land grant, directly to the religious school, as a consequence of state decisionmaking.

Id. at 6. Given that the Pennsylvania Court based its decision solely on federal law, and that the authorities cited by Justice Baer seem to support his argument, a cert petition to the U.S. Supreme Court may be in the cards.   

The Philadelphia Inquirer reports on the decision here.

Takings Claim Ripe Upon Enactment of Regulation, No Permit Application Necessary

Thanks to Professor Patty Salkin for forwarding a recent $17 million inverse condemnation judgment from the Texas Court of Appeals.  Trail Enterprises, Inc. v. City of Houston, No. 10-05-00382-CV (Nov. 21, 2007).  It's a short opinion without much background, so we don't know what actions by the city resulted in Trail bringing suit, but it's Houston, so it's a safe bet that the case involves oil.  Apparently, the city passed an ordinance that prohibited or restricted Trail's ability to drill.  The trial court held there was a taking, a jury determined compensation, but the court granted the city's post-trial motion to dismiss for ripeness.

The issue on appeal was whether Trail's claims were ripe since it challenged the regulation without first applying -- and being denied -- a drilling permit or a variance from the prohibition.  "Ripeness" in this context usually requires that a property owner file, and be denied, a use permit, since without such an application, there is no way to establish the degree of diminution of value that is claimed to be a taking.  However, when the regulation prohibits the very use the property owner intends to make, it is ripe for challenge upon its enactment.  Trail also claimed that to seek a permit would have been futile, and that the ordinance did not provide any variance process.  The court of appeals agreed, and held that the claims were ripe. 

New HAWSCT Case on Nonconforming Use

The Hawaii Supreme Court has issued an opinion in Colony Surf, Ltd. v. Director of the Dep't of Planning and Permitting, No 26037 (Dec. 26, 2007).  The case involves the issue of "nonconforming uses."  More to follow after a chance to review.

New HAWSCT Water Law/Public Trust Decision

Haven't had a chance to read and digest it yet, but the Hawaii Supreme Court has issued a new opinion on water rights and the public trust, In re Water Use Permit Application Filed by Kukui (Molokai), Inc., No 24856 (Dec. 26, 2007).  More details to follow.

Comprehensive Eminent Domain Plan: If You Don't Have One, The Court Will Make One Up

In Aspen Creek Estates, Ltd. v. Town of Brookhaven, 2007 NY Slip Op 09583 (Dec. 4, 2007), the Appellate Division of the New York Supreme Court approved a taking of private property to preserve it as farmland.  The court's majority held that the goal of preserving farmland generally qualifies as a public use/purpose, and that there was no evidence of pretext in the record demonstrating that the presumption of public use should be questioned, even though the property owner asserted that the land would eventually be leased or sold to another private owner.  The facts of the case are set out in the opinion, and by Professor Patty Salkin in her analysis of the decision, so I won't repeat them in detail here.  Two points, however, merit discussion.

First, the property owner asserted that because the taking was not part of a plan, it did not deserve judicial deference.  Recall that in  Kelo v. City of New London, 545 U.S. 469 (2005), the majority took great pains to establish that the taking of Mrs. Kelo's house was part of a "'carefully considered' development plan," and was therefore entitled to judicial deference.  Kelo reviewed the decision to take property by eminent domain in much the same fashion that the courts review police power zoning decisions under due process analysis: courts wash their hands for the most part as long as the zoning is enacted "in accordance with a comprehensive plan."  This aspect of the Kelo decision has received some attention, but little traction so far.  See, e.g., MiPro Homes, L.L.C. v. Mount Laurel Township, 878 A.2d 38 (N.J. Super. 2005), aff'd 910 A.2d 617 (N.J.) (per curiam), cert. denied, ___ U.S. ___ (2007); Western Seafood Co. v. United States, No 04-41196 (5th Cir., Oct. 11, 2006). 

The Aspen Creek court wasn't bothered at all by the utter lack of a formal (or even an informal) plan, Kelo's "carefully considered" language notwithstanding.  The court simply implied one:

In any event, while it does not appear from the record that the precise boundaries of the Manorville Farmland Protection Area [the alleged "plan"] have been carefully considered by the Town, it is clear from the comments made by various speakers at the hearing that the desirability of preserving farmland in Manorville has indeed been recognized by civic associations and public officials.  A plan prepared by the Manorville Taxpayers Association in 1993 set preservation of the remaining farms in the hamlet as a goal. . . .

Slip op. at 6.  So let's see if I get this straight.  There was no plan to preserve farmland, but since someone "commented" at a public hearing that preserving farmland is desirable, the court is free to imply that a plan not only exists, but that it is "carefully considered" and therefore due judicial deference?  Is is highly doubtful that a plan by civic groups gleaned from comments at a public hearing is the kind of comprehensive action the majority had in mind in Kelo.  The fact that a condemnation takes place within the context of a comprehensive plan is, in theory, designed to give the courts confidence in the result, but if an action takes place without a plan, courts should be more willing to give it a hard look, as in cases of "spot zoning," for example. 

The second point is also spurred by the above quote.  If the plan to take property to preserve farmland has been in existence since 1993, then the just compensation awarded to the property owner should take into account the rise in value from that date to the time of the taking, since the so-called "plan" has blighted the property since 1993.