inversecondemnation.com

2007 in Review: Taking Substantive Due Process Seriously Again

After Lingle v. Chevron, U.S.A., Inc., 544 U.S. 528 (2005) informed us that the "substantially advance a legitimate state interest" test was one of substantive due process, not regulatory takings, the courts began revisiting the long-neglected topic of substantive due process in the land use context. 

• The Ninth Circuit finally jettisoned the Armendariz v. Penman, 75 F.3d 1311 (9th Cir. 1996) (en banc) doctrine in Crown Point Development, Inc. v. City of Sun Valley, 506 F.3d 851 (9th Cir. Nov. 1, 2007).  Armendariz stood for the unusual proposition that a property owner's claim for violations of substantive due process rights were "subsumed" within the owner's claim for violation of the Takings Clause.  Thus, in land-related issues, a property owner could only bring takings claims.  No longer, as I wrote here.

• In Cine SK8, Inc. v. Town of Henrietta (No. 06-1718-cv) (Nov. 8, 2007), the Second Circuit detailed one way to prove a land use substantive due process case.  The court also noted that when a local government agency acts outside the scope of its delegated jurisdiction, it violates due process.  More here.

• In  Franco v. National Capital Revitalization Corp., No. 06-CV-645 (July 12, 2007), the Court of Appeals for the District of Columbia also provided guidance on how substantive due process principles may guide the issue of Kelo pretext.  While the issue in Franco involved the public use clause, as I noted in this post, the analysis has much crossover with substantive due process issues.

2007 Land Use in Review: Due Process Notice in Eminent Domain

Several cases focused on the issue of due process notice in eminent domain.  In Divine v Town of Nantucket, 449 Mass. 499, ___ N.E.2d ___ (July 19, 2007), the Supreme Judicial Court of Massachusetts invalidated the town's 1968 exercise of eminent domain since the town's taking listed the owners of the property as "owners unknown," which was not sufficient notice to the landowner.  In Brody v. Village of Port Chester, No. 00 Civ. 7481 (HB) (SDNY, July 18, 2007), a New York federal court held that a municipality wrongfully exercised eminent domain and denied the landowner procedural due process by not providing proper notice of his right to contest the taking.

2007 Land Use in Review: Hawaii Supreme Court Lowers the Bar in Equal Protection "Rational Basis" Analysis

It's a pretty rare event when a court invalidates a law for violating the Equal Protection clauses of either the Hawaii or U.S. Constitution under rational basis review.  In Silva v. City & County of Honolulu, No. 27385 (Aug. 10, 2007), the Hawaii Supreme Court did just that, holding that Haw. Rev. Stat. § 46-72 was irrational, and violated the Hawaii Constitution.  More here.

2007 Land Use in Review: Estoppel and Shoreline Setbacks

In Brescia v. North Shore Ohana (No. 27211, July 12, 2007), the Hawaii Supreme Court held that a property owner was not entitled to rely upon a county planning commission's determination of the location of a shoreline setback when the planning commission retained the authority to give official assurances.  The case involved Kauai property within the coastal "Special Management Area."  The SMA is, generally speaking, the land nearest the shoreline, as defined in Hawaii's Coastal Zone Management Act, Haw. Rev. Stat. ch. 205A. The CZMA established special controls for this strip of land, and the counties have authority to regulate uses within the SMA, including the location of the "shoreline setback," which is (like other setbacks) an unbuildable zone that "sets back" structures from the shoreline.  The statewide minimum setback is established by the CZMA, but the individual counties are permitted to establish greater setbacks, which vary from county-to-county.  More here.

2007 Land Use in Review: CARD v. ZBA - Administrative Procedures in Land Use Cases

Administrative Procedures in Land Use Cases:  In Citizens Against Reckless Development v. Zoning Bd. of Appeals of the City and County of Honolulu (No. 27264, May 31, 2007), the Hawaii Supreme Court tackled the issue of when a request for an agency to issue a declaratory ruling under Haw. Rev. Stat. § 91-8 can effectively substitute for an appeal of an agency decision, and when it can't.

2007 Land Use in Review: Venue in Declaratory Actions on Legality of Agency Rules is Jurisdictional

In Hawaii Home Infusion Assoc. v. Befitel, (No. 27256, Apr. 16, 2007), the Hawaii Supreme Court held that the venue provisions in the declaratory judgment section of the Hawaii Administrative Procedures Act, Haw. Rev. Stat. § 91-7, are jurisdictional, and such actions must be brought in the judicial circuit in which the petitioner is domiciled.  Find out why this decision is important in the land use arena by reading this post.

2007 in Review: Post-Kelo Claims of Pretext

In 2007, the courts started to apply the U.S. Supreme Court's decision in Kelo v. City of New London, 545 U.S. 469 (2005), especially how to mesh the Court's deferential standard of review with property owner claims of pretext. 

Kelo left intact the standard that a determination that a taking will be for public use is measured by whether the legislature "conceivably" could have believed it would result in economic benefit, while leaving open the possibility that certain takings would not pass judicial review.  Justice Kennedy elaborated on that issue, and provided the roadmap for how a court should deal with a claim of pretext:

A court applying rational-basis review under the Public Use Clause should strike down a taking that, by a clear showing, is intended to favor a particular private party, with only incidental or pretextual public benefits, just as a court applying rational-basis review under the Equal Protection Clause must strike down a government classification that is clearly intended to injure a particular class of private parties, with only incidental or pretextual public justifications.

Kelo, 545 U.S. at 491 (Kennedy, J., concurring).  Justice Kennedy added:

A court confronted with a plausible accusation of impermissible favoritism to private parties should treat the objection as a serious one and review the record to see if it has merit, though with the presumption that the government’s actions were reasonable and intended to serve a public purpose.

Id. After Kelo, property owners and property takers were left with the question of what would qualify as a "pretext" sufficient to overcome a claim by government that a condemnation was supported by a public purpose.  Several post-Kelo cases addressed the pretext issue, with varying results, and methods of analysis. 

• In 49 Wb, LLC v. Village of Haverstraw, 2007 NY Slip Op 05506 (Jun. 19, 2007), a New York state court invalidated a taking because the evidentiary record in the case demonstrated the government was attempting to take property for the sole purpose of benefiting private, not public, interests. 

• In Goldstein v. Pataki, however, a New York federal court dismissed a property owner challenge to a taking because the property owner's complaint did not allege enough facts to show a private benefit (Goldstein was appealed to the Second Circuit where it awaits a ruling). 

• Didden v. Village of Port Chester, 173 Fed. Appx. 931, 2006 WL 898093 (2d Cir. Apr. 5, 2006) held the property owner's claim that a private developer demanded cash in return for not exercising eminent domain was not actionable under the Public Use Clause.

• In Franco v. National Capital Revitalization Corp., No. 06-CV-645 (July 12, 2007), the District of Columbia Court of Appeals reinstated a pretext claim that had been dismissed by the trial court, holding that the trial court should have undertaken a factual inquiry "to determine that the legislation had 'an overriding public purpose' and 'will provide substantial benefits to the public'" as claimed by the condemnor.  The court held that the trial court's "discussion suggests that, once the legislature has declared that there is a public purpose for a condemnation, an owner is foreclosed as a matter of law from demonstrating that the stated reason is a pretext.  We do not interpret Kelo so broadly."

• In MiPro Homes, LLC 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), the New Jersey state courts held that evidence the government was taking property to stop development and preserve open space was a public use and not pretextual. 

• In Western Seafood Co. v. United States, No 04-41196 (5th Cir., Oct. 11, 2006), the court held that a private-to-private transfer for economic development that was accomplished as part of a "carefully considered development plan" passed muster. 

2007 in Review: Hawaii Supreme Court Rewrites the Constitution

In August, by a 3-2 vote, the Hawaii Supreme Court determined that the term "county" in article VIII, section 3 of the Hawaii Constitution means "county councils."  The majority held that only county councils may establish property tax policies, and that voters of the county have no power to do so directly by amending their county charter. 

The majority first determined that it was perfectly acceptable for government officials to be both the plaintiffs and the defendants, and sue each other in a friendly lawsuit in which the County Attorney represented both sides.  The majority also approved of the county council hiring a private law firm to prosecute the case in which it was a defendant, with $250,000 of public funds.

The dissenting justices accused the majority of "subverting the judicial process" by ignoring standing and justiciability requirements by rearranging the parties after oral arguments, and by attributing the arguments of the defendants to the plaintiff.  Disclosure: I had a dog in this hunt, as I was counsel for the homeowners/intervenors who challenged the collusive lawsuit. 

Here are all the inversecondemnation.com posts on the case: opinion, briefs, oral argument transcripts, commentary, and the Wall Street Journal's take on the case.

2007 in Review: All Superferry All The Time

The Hawaii Supreme Court's decision in the Hawaii Superferry case, coming as it did mere hours after oral argument and just days before the ferry was scheduled to sail, certainly was the issue dominating the headlines in the last quarter of 2007, especially after the Legislature was called into special session to pass legislation allowing the Superferry and other large capacity ferries to sail while the state conducted an environmental assessment. 

Despite the high drama, the issue in the Sierra Club's lawsuit was fairly straightforward: did the Superferry qualify for a categorical exemption from having to undertake an EA.  The Supreme Court held as a matter of law that it did not, and that secondary impacts should have been considered. 

Everything on inversecondemnation.com about the case, including the briefs of the parties, oral argument recordings, the court's decision, and commentary, is posted here.

2007 in Review: Private Agreements and Public Process

These seemingly unrelated court decisions were tied together with a common thread: private agreements for the most part are not substitutes for public processes, whether it is eminent domain, rezoning, or the granting of permits.   

Several courts determined that agreements in which government agreed with private parties to exercise eminent domain were invalid: 

• One case (in which I am involved as counsel for the property owners so won't comment in detail) involved a development agreement between the County of Hawaii and a developer to take property for a road.  The trial court struck down the attempt -- here is the court's Findings of Fact and Conclusions of Law.  More on the case here.

• In a similar vein, a Washington state court of appeals in HTK Mgm't, L.L.C. v. Rokan Partners, No. 58113-9-I (Wash. Ct. App., July 23, 2007) held that eminent domain "is an inherent power of the state and redelegations of that power to private parties are invalid."  The court struck down an assignment of rights allowing a private party to, in effect, exercise eminent domain, holding that by agreeing to do so, the government abandoned the attempt to take the property. 

• In Wheat Ridge Urban Renewal Auth. v. Cornerstone Group XXII, LLC, No. 06SC591 (Dec. 3, 2007), the Colorado Supreme Court refused to order a redevelopment agency to condemn private property and turn it over to a developer to build a Walgreen's store.  The court held that judges have no authority to compel an agency to take property even if the agency had entered into a contract with the developer in which it agreed to do so.  The court denied the developer's attempt to enforce specific performance of the contract.

This wasn't limited to eminent domain, and other courts applied a similar rationale to other land use areas: 

• In Neighbors in Support of Appropriate Land Use v. County of Tuolumne, No. F051690 (Dec. 7, 2007), a California District Court of Appeals held that a development agreement cannot be used to avoid zoning restrictions, and can't substitute for the rezoning process.  Development agreements are vested rights agreements only.

• In The League of Residential Neighborhood Advocates v. City of Los Angeles, No. 06-56211 (Aug. 21, 2007), the Ninth Circuit held that an agreement settling a RLUIPA claim can't override state law.  Details and analysis here and here.  The petition for rehearing/en banc review is posted here.