Here's one to brighten your day, courtesy of the the U.S. District Court for the Middle District of Flordia (that's Tampa, to all you non-Floridians). In Hillcrest Property, LLP v. Pasco County, No. 8:10-cv-819-T-23TBM (Apr. 12, 2013), the court held the county's "Right of Way Preservation Ordinance" that allows it to land bank for a future road corridors by means of an exaction (more details on the ordinance below), is "both coercive and confiscatory in nature and constitutionally offensive in both content and operation." Slip op. at 4.
We've seen this situation before -- the government wants to build roads, but it either doesn't have the money to buy or condemn the necessary property to do so, or it simply figures it can get it another way. The county had such plans, and designated future transportation corridors on its comprehensive plans. In 2005, the county adopted the ordinance which "targets landowners who own property encroached by the corridor and who aspire to build on the property adjoining the corridor." Slip op. at 4. Here's how the court described the ordinance's operation:
In exchange for a development permit, the Ordinance requires those landowners to agree to dedicate the corridor in fee simple to Pasco County. Under the Ordinance, Pasco County withholds the construction permit until the landowner dedicates the property "by recordation on the face of the plat, deed, grant of easement, or other method acceptable to the County." Code § 319.8(A); Code § 901.2(H). If the property owner declines the dedication, Pasco County declines the construction permit.Once a landowner dedicates the land to Pasco County, the landowner may apply to Pasco County’s Development Review Committee for permission to use his former land until Pasco County needs to build the road. The Ordinance provides a list of specific and temporary “interim uses,” such as a produce stand or a bridal path for a residential zone or a boat storage yard or a ground to host “festivals, carnivals, community fairs, and the like” for a commercial zone. Code § 319.6(C)(1); Code § 901.2(F)(3). When and if Pasco County needs the land, the former landowner must remove any permitted, temporary use (for example, a lemonade stand, a Tilt-AWhirl, or a putt-putt course).Slip op. at 4-5. A property owner who believes that the exaction is not "roughly proportional" to the transportation impacts its development may have may seek a waiver, sought via an application requiring myriad studies and experts. ("Roughly proportional? Looks like Justice Scalia was right and a smart staffer has read Dolan). If the Review Committee agrees, she gets 115% of the value of the excess, or other credits. The Review Committee may also waive the waiver requirements via a "variance" if the owner can show the application process would impose a hardship. The court noted the ordinance "is no model of clarity." See slip op. at 9-11 & n.3.
The transportation corridor protrudes into Hillcrest's undeveloped commercially-zoned property. Hillcrest wanted to build a shopping center and it submitted a plan to the Review Committee, which rejected the application because it did not account for the corridor. Hillcrest submitted a second plan which was rejected, and a third plan which was eventually approved. It required Hillcrest dedicate the right of way to the county, although Hillcrest reserved its right to object to the dedication. Hillcrest then filed the federal action seeking to invalidate the ordinance, asserting several claims including federal due process and a takings claim under Florida law. Hillcrest had not applied for a waiver or a variance.
The court first rejected the county's argument that the substantive due process claim was not ripe under Williamson County because Hillcrest had not pursued a waiver or variance. The court noted that Williamson County only applied to takings claims, although due process claims may be subject to a similar requirement depending on the remedy sought. But the exhaustion requirement was not applicable since Hillcrest was only claiming the county acted arbitrarily and capriciously when it used the ordinance as a way to avoid condemnation and compensation, and the remedy it sought was invalidation.
Starting at page 23, the court attempted a "clarifying account of the constitutional first principles," to distinguish due process claims from taking claims. We won't detail it here, but it is well worth a read in its entirety and, we think, for the most part correct. This section of the opinion is something everyone who follows this blog should read:
Instead of finding that the Ordinance deprives a landowner of property without paying just compensation, the magistrate judge finds that the Ordinance leverages the police power to compel a landowner to relinquish rights guaranteed by the Takings Clause – a finding that the Ordinance fails to advance a legitimate governmental purpose. Although not "set[ting] forth the applicable standard," Nollan and Dolan are central to understanding the Ordinance’s perverse scheme and Nollan and Dolan "inform the due process analysis."
Slip op. at 25. In other words, it is a due process violation to use the police power to avoid taking and paying for property. We made this point a few years ago in an amicus brief in Lingle, where we argued it was not a legitimate exercise of government power to try and get property without using eminent domain. As the court noted, "[t]he government's failure to satisfy [the Nollan and Dolan] requirements violates the Takings Clause. If taking an amount of land in excess of the amount that the government has proven necessary to mitigate the development's contribution to the public hardship, the government must proceed as it always has -- through condemnation, in which the government bears the burden of proof and a disinterested fact-finder determines 'just compensation.'" Slip op. at 35.
The court concluded the Right of Way Preservation Ordinance violated the Takings Clause because it shifts the burden to disprove rough proportionality to the property owner and empowers the county to obtain land in excess of what it would otherwise get in the absence of the ordinance:
Instead of proceeding through eminent domain, in which the government proves a public need and a disinterested fact-finder determines "just compensation," the Ordinance requires Pasco County to prove nothing and empowers Pasco County to determine the "just compensation," if any, Pasco County will pay.Slip op. at 36. This is a due process problem because "by legislative fiat, Pasco County uses a development permit to compel a landowner either to convey valuable land for free or to submit to a regime catigated by Dolan. In other words, Pasco County wields the police power to compel a landowner's abandoning rights guaranteed by the Takings Clause." Id. at 37. The ordinance also offends due process because it was desiged to circumvent the requirements of the takings clause, and was a "misuse of the police power" to avoid exercising the county's eminent domain power. The court wrapped up its takings/due process analysis with this:
In sum, the Ordinance discriminates based on economic aspiration. Against the class of landowners who never attempt to develop, Pasco County will acquire land by eminent domain, beginning when and if Pasco County needs the land. A landowner without need of a permit enjoys the protection of condemnation and receives the "just compensation" guaranteed by the Constitution. A landowner who aspires to develop property and who aspires to a permit for a grocery store, a doctor’s office, an apartment building, or the like faces an immediate confiscation of land. For these landowners, a last but forlorn hope for just compensation is in Pasco County’s prolix, opaque, and overbearing Ordinance. Further, these landowners’ just compensation is an elusive contingency, held for ransom by a committee methodically acquiring property at a steep, aggregate discount. "[M]erely an attempt to circumvent the constitutional and statutory protections afforded private property ownership under the principles of eminent domain," the Ordinance improperly uses the police power and fails to advance a legitimate governmental purpose (taking by eminent domain is a legitimate governmental purpose; extorting landowners is not).
Slip op. at 46 (citation omitted).