Everyone is distracted today by the too-big-to-fail "Obamacare" ruling by the 6-3 Supreme Court (or, as Justice Scalia called it "SCOTUScare"), in which the Court concluded that the vibe of a statute matters more than its actual language, and the Court's ruling in the "disparate impact" fair housing case (speaking of which, we wish the Court would apply the same standards to pretext in eminent domain), and we certainly wouldn't want to divert your attention from that thrilling enterprise, so we'll keep it brief with this post.
In Teitlebaum v. South Florida Water Mgmt District, No. 3D14-0963 (June 24, 2015), the Florida District Court of Appeals held that there's no such thing as condemnation blight in an inverse condemnation case. Teitlebaum and her neighbors among them have owned 3,550 acres of Ag-zoned land on the edge of the Everglades for decades, "apparently hoping that the land would eventually be rezoned for commercial or residential use."
But that was not to be. The Water Management District designated their properties as part of the "East Coast Buffer," in order to prevent flooding throughout Miami-Dade County. The District began efforts to acquire the property in the East Coast Buffer by purchase, and when that didn't work, by eminent domain. But it never got around "formally" to take the land, even though it eventually filed a resolution of taking.
Tired of waiting, the Teitlebaum et al. sued, "alleging 'coercive acquisition policies' and 'illicit actions' by the Water District" took their properties:
The gist of the Plaintiffs’ complaint is that the Water District artificially depressed their property values through governmental action as part of its plan to acquire the Plaintiffs’ land on the cheap. More specifically, the Plaintiffs allege that the Water District has prevented the development of the land in and around the Bird Drive Basin in order to keep the cost of the property artificially low.
Slip op. at 4. The plaintiffs also alleged the District "actively prevented" the County from rezoning the property.
Four years after the complaint, the District officially withdrew its condemnation resolution. after which the plaintiffs amended their complaint to allege "condemnation blight" -
to allege that the Water District’s “voluntary acquisitions” left the area checkered with largely unusable, undevelopable, and unsellable property. The Plaintiffs have not, however, submitted evidence that their property values have been substantially diminished or that their rights have been altered since purchasing the property; and as previously stated, when the Plaintiffs purchased this property, it and the surrounding property was zoned for agricultural use only, and that zoning designation has not changed.
Slip op. at 5.
The trial court granted the District summary judgment, concluding that any decline in value due to the regulations is factored in during the calculation of just compensation, and that there's no claim at all for condemnation blight in inverse cases.
The court of appeals acknowledged an inverse condemnation claim is one which alleges that property has been taken de facto, even though there's been no formal exercise of eminent domain power, and in direct takings, condemnation blight can be raised. The court asserted that under Florida authorities, condemnation blight is "the depreciation of property value that occurs when the government announces its intentions to condemn a property, and Florida law addresses this diminution in value by requiring the condemning authority to pay full compensation for the property as of the date of the condemnation announcement rather than at some later point after the property has depreciated due to the impending condemnation." Slip op. at 10.
Relying on a combination of federal and Florida authorities, however, the court concluded that the claim isn't viable in inverse cases because Penn Central requires a balancing of ad hoc factors to determine whether there's been a taking at all, and until there's been a ruling confirming a taking, there's no "condemnation blight." But this is not a total wipeout of the claim, according to the court:
That is not to say that the government can never “take” land by declaring its intent to condemn and then engaging in unreasonable activities. Such governmental behavior may well be actionable if it satisfies one of the per se takings tests from Lingle [physical invasion or Lucas wipeout] or the ad hoc takings test from Penn Central. There may well be a case in the future where such governmental conduct could satisfy one of these tests; however, as the trial court correctly found, the Plaintiffs in this case have not established those facts.
Slip op. at 11-12. Put another way, the court concluded that the District did not act unreasonably after it filed the declaration of taking.
When we read this, however, we're left with a circular feeling. On one hand, the court concluded there was no taking because the actions the District undertook were not unreasonable and didn't wipe out the value of the property. Yet on the other, it seems that the government's conduct should be part of the inquiry into the "character of the government action" factor in Penn Central. So even if the government didn't render the properties virtually worthless (like in this case), maybe on the whole there's enough evidence to say there's been an ad hoc taking. But the court was having no part of that.
What seemed to be behind this ruling, however, was not the application of takings doctrine which the court labeled as "a thorny area for both state and federal courts," slip op. at 8 (you're tellin' us, Your Honors), but the sense that when the District announced its intent to eventually take the property it didn't do anything to either further that goal, or which had the effect of depressing the targeted property's value.
Thus, the plaintiffs are, according to the court, in no worse a situation today than they would have been had the District not filed the resolution of taking.
Maybe the correct result, but the plaintiffs might have liked the chance to prove up their Penn Central case and not get tossed on summary judgment.