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Eagle On Regulatory Takings (4th ed. 2009)

I just received my copy of the latest edition of Professor Steven J. Eagle's definitive treatise Regulatory Takings (Lexis/Nexis, 4th ed. Dec. 2009).

Like the earlier editions, this is a must-have for every land use and property law attorney's back bookshelf.

Chapters include "Property Rights and Their Sources," "The Ascendancy of Land Use Regulation," "Analytical Issues in Regulatory Takings Litigation," and "Regulatory Takings Remedies."

The book is available here (oddly, the Lexis-Nexis web site only has the 3d edition for purchase, but I expect that to be remedied shortly).

From the preface to the fourth edition:

This book is about "regulatory takings," which is a relatively new term, but not an entirely new idea. The underlying concept is stated simply -- government may "regulate" private property, but not to the extent that it constitutes a "taking," under the United States Constitution, or a state constitution. Owners need not be compensated for losses resulting from regulations, but are entitled to just compensation for losses resulting from takings.

During recent decades the term "regulatory taking" has been used in over 2,500 federal and state legal cases, and in almost 7,500 legal commentaries. The concept also has generated considerable interest in the popular press. This culminated in the immense volume and intensity of reaction to the the United States Supreme Court's 2005 decision in Kelo v. City of New London, which permits as a "public use" the condemnation by local government of unblighted homes for retransfer to private redevelopers for urban revitalization projects.

...

Since the first edition of this book was published in 1996, numerous cases have attempted, without conspicuous success, to define the term "regulatory takings." The U.S. Supreme Court has affirmed that localities must pay compensation when regulatory actions overreach, and that changes in statutes and regulations do not automatically modify the rights of property owners and their successors. The Court also has indicated that government physical incursions are to be treated differently from regulatory contraints. It has not, however, provided any general theory by which the boundaries of the principal attributes of ownership -- the rights of exclusion of others, use, and transfer to successor owners, are to be delineated.

I have the honor of counting Professor Eagle as a colleague, as he is my immediate past predecessor as the Chair of the Condemnation Committee of the ABA's Section of State and Local Government Law.

Motions For Reconsideration In ICA Accretion Taking Appeal

Both parties have asked the Hawaii Intermediate Court of Appeals to take another look at its opinion in Maunalua Bay Beach Ohana 28 v. State of Hawaii, No. 28175 (Dec. 30, 2009).

In that case, the court held (1) the Hawaii Legislature took existing littoral accretion when it assigned ownership of the accretion from beachfront owners to the State; and (2) the Legislature did not take "future accretion." We summarized the opinion here. [Disclosure: we filed an amicus brief supporting the property owners, available here.]

The State of Hawaii asserts the opinion should not have addressed the claim that land which had accreted prior to 1985 was taken. The State's Motion for Clarification is here.

The property owners assert the ICA's conclusion that "future accretion" is not a property interest should be reexamined. The ICA relied on three federal cases from the Ninth Circuit, Western Pac. Ry. Co. v. Southern Pac. Co., 151 F. 376 (9th Cir. 1907), Cohen v. United States, 162 F. 364 (C.C.N.D. Cal. 1908), Latourette v. United States, 150 F. Supp. 123 (D. Or. 1957), to hold that accretion was similarly not "vested," and the legislature could take it without consequence. The property owners point out that a recent Ninth Circuit panel decision (United States v. Milner, No. 05-35802 (Oct. 9, 2009), an opinion we summarized here) undercuts the ICA's reliance on those older cases. Barista's note: a cert petition was recently filed seeking review of Milner. 

The property owners also seek reconsideration of three other issues: the ICA's public trust dicta (an issue we discussed in this post (scroll down to "The 'Notice' Defense Revived?")), proof of existing accretion, and the propriety of class certification. The property owners' Motion for Reconsideration is here.

Government Brief: Landowner Must Seek To Change Land Use Designations To Ripen Federal Takings Claim

The County of Maui has filed its Answering Brief in Leone v. County of Maui, No. 29696, an appeal in the Hawaii Intermediate Court of Appeals which is considering, among other issues, the question of when a regulatory takings claim is ripe for review under Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985). The brief responds to the property owners' Opening Brief (here).

The trial court determined the plaintiffs' federal regulatory takings claim -- which they brought in state court, as required by Williamson County -- were not ripe because they should have sought a legislative change to the offending land use regulations which allegedly deprive their property of all economically beneficial uses. The trial court's decision is available here.

The County's brief argues the takings claims are not ripe for review because they "have not alleged nor can they demonstrate they have attempted to obtain necessary changes in the use designation of their property." Brief at 26. 

More details on the case and the issues here.

Disclosure: we filed an amicus brief (available here) on behalf of the property owners. The brief argues Williamson County only requires a "final decision" by the government applying existing land use regulations to the property, and a property owner is under no obligation to change the law before asserting her federal takings claim.

More to follow when further briefs are filed.

New Ninth Circuit Case: Mobile Home Rent Control Ordinance Takes Property

In a lengthy opinion -- it comes in two volumes -- the Ninth Circuit again takes on a mobile home rent control ordinance, this time with a better result than usual for the property owners. The court determined the ordinance worked a taking, and remanded the case for a calculation of just compensation. Guggenheim v. City of Goleta, No. 06-56306 (Sep. 28, 2009). Because the case is long, we haven't had a chance to digest it yet, but here's the court's conclusion:

We therefore reverse the district court’s judgment on the takings claim and remand to the district court for further proceedings. On remand, the district court may of course consider  any materials presented by either party that are relevant to determining the total amount of just compensation due to the Park Owners. See, e.g., Cienega Gardens, 331 F.3d at 1354. As noted in Part III.A.1, the district court here did not consider the detailed figures included in either of the expert reports presented before it, possibly because it found that such evidence was precluded under a facial takings challenge under Penn Central. We have now held that a facial challenge under Penn Central exists as a viable legal claim, see supra pp. 13839-40, and affirmed that this court’s precedents and the nature of a takings inquiry allow for some evidence outside the text of the statute to be admissible. Id. at 13840-43. The district court may therefore properly consider such "detailed figures," in addition to any other evidence it deems relevant, in conducting its analysis to ascertain the precise amount of just compensation owed to the Park Owners. See, e.g., Richardson, 124 F.3d at 1154 n.2 (noting that an example using exact dollar amounts is “illustrative” of the economic impact of the regulation in a facial challenge).

More to follow after a chance to read the opinion.

Final Briefs On Due Process Motions In Maui Affordable Housing Exaction Case

The property owners and the County of Maui have filed their opposition and reply briefs regarding the cross motions for summary judgment in the Maui affordable housing case now being litigated in the U.S. District Court, Kamaole Pointe Development LP v. County of Maui, No. 07-00447 DAE (D. Haw.).

The case is a challenge to the County of Maui's "workforce housing" ordinance, enacted in in 2006, which imposes a 40% to 50% affordable requirement on new housing developments of five or more units, and on an application to subdivide a lot into five or more parcels. In lieu of providing actual units, a developer may either pay a fee equivalent to 30% of the total project sales, donate improved land of the same value, or donate raw land valued at 200% of the in-lieu fee. Ordinance 3418 is posted here.

The complaint asserts claims for "unconstitutional conditions," regulatory takings, substantive and procedural due process, equal protection, and claims under Hawaii law. The Complaint for Declaratory and Injunctive Relief (filed Aug. 23, 2007) is posted here (note: the Complaint was amended on September 6, 2007). The court earlier dismissed the "unconstitutional conditions" claim, holding it was a regulatory takings claim and was not ripe under Williamson County because the plaintiffs had not pursued a state compensation remedy. That order is posted here.

As detailed here, on November 25, 2008, the court issued an Order Denying Plaintiffs' Motion for Partial Summary Judgment; and Order Granting in Part and Denying in Part Defendants' Motion for Summary Judgment. The court held that the Williamson County ripeness rules also apply to the substantive due process and equal protection challenges, which were not ripe because the property owner had not obtained a "final decision" from the County. The court also dismissed the state law claims.

The only count remaining in the case is the due process claim, which is now the subject of cross-motions for summary judgment. The property owners filed this motion asserting the Maui County Council -- which under the ordinance has the power to grant waivers to the affordable housing requirement -- "irrationally refused to grant Plaintiffs' request," because "the members of the Council were so focused on the end goal, they were unable to impartially evaluate Plaintiffs' request for a waiver from the Ordinance."

The County filed this cross motion asserting, in essence, that the County was free to act arbitrarily because the plaintiffs did not have a property interest in a waiver because the Council had discretion not to grant one. No property interest means fair procedures are not merited. The County's motion also argues that even assuming the plaintiffs possessed a property interest, they received due process. 

The property owners' memorandum in opposition to the County's cross motion argues that Maui Councilmembers harbor an "irrational bias against residential developers," especially those who attempted to show a lack of nexus between the ordinance's 40-50% exaction and a proposed residential development, and that "a reasonable juror could not return a verdict for [the County]."

The County's County's memorandum in opposition to the property owners' motion asserts  "[t]his case raises a question that is unusual in the annals of constitutional litigation; namely, what do the Plaintiffs hope to gain by this expensive recourse to the busy federal court?" The County asserts the property owners are not seeking money damages for the due process violations, but a remedy that is not available: a declaration that the ordinance does not apply.

The parting shots by each party -- their reply briefs -- are available here (property owners) and here (County). The property owners clarify their requested remedy (that the request for a waiver from the exaction from the Council should be "deemed approved" because the Council's process was grossly biased and thus null and void), while the County asserts that the property owners have no protectable "property" interest in a waiver, and thus are owed no process.

The hearing on the cross-motions will be held on Monday, September 28, 2009 at 9:45 a.m. in U.S. District Court.

New Brief: Must A Property Owner Seek A Change In The Law In Order To Ripen A Takings Claim?

Today, we filed an amicus brief in Leone v. County of Maui, No. 29696, an appeal in the Hawaii Intermediate Court of Appeals which is considering, among other issues, the question of when a regulatory takings claim is ripe for review under Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985).

The trial court determined the plaintiffs' regulatory takings claims were not ripe because they should have sought a legislative change to the offending land use regulations which allegedly deprive their property of all economically beneficial uses. The trial court's decision is available here.

Our brief argues Williamson County only requires a "final decision" by the government applying existing land use regulations to the property, and a property owner is under no obligation to change the law before asserting her federal takings claim:

A claim that a land use regulation takes property in violation of the Fifth Amendment’s Takings Clause is ripe for judicial review under Williamson County Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 191 (1985), as soon as the government makes a final decision applying the regulation to the plaintiff's property, and the property owner is not required to seek a change in the law before it can come to court.

This brief first provides the context of the per se regulatory taking alleged by the Leones, which  results from an application of the Hawaii Supreme Court’s decision in GATRI v. Blane, 88 Haw. 108, 962 P.2d 367 (1998). Next, this brief addresses three issues:

First, the County’s summary refusal to process the Leones’ application under existing law was all that was required to ripen their Fifth Amendment takings claim, and is a “final decision” under Williamson County subject to judicial review. 

Second, the Leones were required to do nothing further before asserting their federal takings claims, such as subject themselves to the County’s political processes and pursue a change in the law.

Finally, in order to assert their federal takings claims, the Leones were not required to exhaust any administrative remedies that might have been available, since exhaustion of remedies plays no part in Fifth Amendment analysis.

The issues presented by this appeal are of national importance because the circuit court failed to adhere to well-established U.S. Supreme Court precedent requiring only a "final decision" by the County, and which does not mandate a property owner lobby the County to adopt new, more lenient regulations.

The brief is posted here. The background in the case is available here, and the property owners' Opening Brief is posted here.

Stay tuned, we'll post more as the case works its way through the appeal process and more becomes available.

First Circuit: Requiring Hospital To Provide "Free" Medical Services Not A Taking

In a case that's highly topical given the current health care debate, in Franklin Memorial Hospital v. Harvey, No. 08-2550 (Aug. 5, 2009), the U.S. Court of Appeals for the First Circuit held that Maine's requirement that hospitals provide free medical services to certain low income patients is not a regulatory taking.

The not-for-profit hospital sought a declaration that Maine's "free care laws" effected a taking because "Maine's free care laws do not reimburse the hospitals for their expenses incurred in delivering care to low income patients, and the amount of free care that the hospitals must provide is not limited under the statute." Slip op. at 2. Maine statutes require hospitals to provide free inpatient and outpatient services to residents who earn at or below 150% of the federal poverty level, upon pain of fines and private enforcement suits by the state attorney general or any affected patient. If a hospital's "economic viability...would be jeopardized by compliance," it may avoid liability if an enforcement action is instituted. The relevant details of the free care laws are:

(1) the laws mandate that a hospital provide free/uncompensated care to persons deemed eligible by the state through a penalty enforcement scheme, (2) the hospital is not reimbursed any amount for the provision of care, [and (3)] the provision of free care is not a license condition or is not linked to the state's certificate of need process.

Slip op. at 4. The hospital spent $890,212 to meet the free care obligations, but this expenditure did not threaten its economic viability.

The District Court granted the state's motion for summary judgment. The Court of Appeals affirmed, holding there was no per se taking and that upon balance, the Penn Central factors cut in the state's favor.

First, the court held the free care laws did not mandate a physical occupation of the hospital's property. The court relied upon Yee v. City of Escondido, 503 U.S. 519, 527-28 (1992), a case rejecting a physical occupation challenge to a mobile home rent control ordinance because the ordinance did not require the mobile home park owner to use her land as a mobile home park. See slip op. at 9 (citing Yee, 503 U.S. at 528). The First Circuit concluded that the free care laws did not require the hospital to allow non-paying patients to occupy its property because the hospital was free to stop using its property as a hospital. The distinction relied upon by the First Circuit is a fine one. Yee noted that a regulation cannot require even a minor physical invasion of property without running afoul of the Takings Clause. Yee, 503 U.S. at 528 (citing Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 439 n.17 (1982)). But when a property owner voluntarily opens her property to occupation, the government can regulate occupancy without it being deemed a per se taking.

Second, the court examined the three Penn Central factors: economic impact of the regulation, the interference with distinct investment-backed expectations, and the character of the government action. Slip op. at 10-15. The highlights of the analysis are the court's conclusion that requiring the hospital to donate its services does not adversely impact the hospital's bottom line. Id. at 11. With scant analysis, the court suggested that because the free care laws do not -- in this instance -- threaten the hospital's economic viability, there is no taking.  The court left open the possibility that free care could become so burdensome that compensation would be required:

We do not suggest that there can never be a taking based upon an adverse economic effect short of jeopardizing the economic viability of a plaintiff; we only note that this case is not at that end of the spectrum.

Slip op. at 12. In other words the hospital can afford it, so it loses this Penn Central factor. Also interesting was the court's rejection of the state's argument that the second factor -- investment-backed expectations -- were somehow lessened because the hospital is a not-for-profit organization. A non-profit has property rights, and may acquire property "with the expectation that it may use it for a particular purpose." Slip op. at 13. The court's conclusion on the second Penn Central factor is muddled, however, and seems to indicate (without expressly concluding) that because the hospital operates a highly regulated business, its investment-backed expectations are lower. See id. at 14-15. If there's a conclusion there, we can't find it.

Finally, the third Penn Central factor cut against the hospital because:

Maine's free care laws merely require that hospitals not refuse to treat patients based on their ability to pay and that they provide those services freely to those with incomes at or below 150% of the federal poverty level. [The hospital] may otherwise set the terms on which it provides access to its facilities and services.

Slip op. at 15. The court viewed the regulations as not overly onerous, even though it places nearly the entire burden of treating low income patients on hospitals. While the provision of medical services is undoubtedly a public good, the Takings Clause was designed to keep property owners from being forced to shoulder a disproportionate share of public burdens, if it cannot be shown individually they caused the problem. The Fifth Amendment's protections are "designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." Armstrong v. United States, 364 U.S. 40 (1960).

Petitioner's Merits Brief In SCOTUS Beachfront Takings Case

The property owners have filed their merits brief in the beachfront takings case, Stop the Beachfront Renourishment, Inc. v. Florida Dep't of Environmental Protection, No. 08-11 (cert. granted. June 15, 2009). The case presents three questions:

The Florida Supreme Court invoked "nonexistent rules of state substantive law" to reverse 100 years of uniform holdings that littoral rights are constitutionally protected. In doing so, did the Florida Court's decision cause a "judicial taking" proscribed by the Fifth and Fourteenth Amendments to the United States Constitution?

Is the Florida Supreme Court's approval of a legislative scheme that eliminates constitutional littoral rights and replaces them with statutory rights a violation of the due process clauses of the Fifth and Fourteenth Amendments to the United States Constitution?

Is the Florida Supreme Court's approval of a legislative scheme that allows an executive agency to unilaterally modify a private landowner's property boundary without a judicial hearing or the payment of just compensation a violation of the due process clauses of the Fifth and Fourteenth Amendments to the United States Constitution?

In the decision under review (Walton County v. Stop the Beach Renourishment, Inc., 998 So.2d 1102 (Fla. Sep. 29, 2008)), the Florida Supreme Court held that a state statute which prohibits "beach renourishment" without a permit did not effect a taking of littoral (beachfront) property, even though it altered the long-standing rights of the owners to accretion on their land and direct access to the ocean.

More about the case on our resource page.

Latest In Maui Affordable Housing Exaction Case: Cross-Motions On Due Process

Here's the latest in the Maui affordable housing case now being litigated in the U.S. District Court, Kamaole Pointe Development LP v. County of Maui, No. 07-00447 DAE (D. Haw.). The case is a challenge to the County of Maui's "workforce housing" ordinance, enacted in in 2006, which imposes a 40% to 50% affordable requirement on new housing developments of five or more units, and on an application to subdivide a lot into five or more parcels. In lieu of providing actual units, a developer may either pay a fee equivalent to 30% of the total project sales, donate improved land of the same value, or donate raw land valued at 200% of the in-lieu fee. Ordinance 3418 is posted here.  We posted on the case earlier here and here.

The complaint asserts claims for "unconstitutional conditions," regulatory takings, substantive due process, equal protection, and claims under Hawaii law. The Complaint for Declaratory and Injunctive Relief (filed Aug. 23, 2007) is posted here (note, the Complaint was amended on Sep. 6, 2007). The court earlier dismissed the "unconstitutional conditions" claim, holding it was a regulatory takings claim and was not ripe under Williamson County because the plaintiffs had not pursued a state compensation remedy. That order is posted here.

As detailed here, on November 25, 2008, the court issued an Order Denying Plaintiffs' Motion for Partial Summary Judgment; and Order Granting in Part and Denying in Part Defendants' Motion for Summary Judgment. The court held that the Williamson County ripeness rules also apply to the due process and equal protection challenges, which were not ripe because the property owner had not obtained a "final decision" from the County. The court also dismissed the state law claims.

The only claim left was due process, which is now the subject of cross-motions for summary judgment. The property owners filed this motion asserting the Maui County Council -- which under the ordinance has the power to grant waivers to the affordable housing requirement -- "irrationally refused to grant Plaintiffs' request," because "the members of the Council were so focused on the end goal, they were unable to impartially evaluate Plaintiffs' request for a waiver from the Ordinance."

The County filed this motion asserting, in essence, that the County was free to act arbitrarily because the plaintiffs did not have a property interest in a waiver because the Council had discretion not to grant one. No property interest means fair procedures are not merited. The County's motion also argues that even assuming the plaintiffs possessed a property interest, they received due process.

We'll post the opposition and reply briefs when they become available.

Second Circuit: State Court Statute Of Limitations Dismissal No Bar To Federal Claim

In Cloverleaf Realty of New York, Inc. v. Town of Wawayanda, No. 07-3405-cv (July 15, 2009), the Second Circuit held that a dismissal by a state court on statute of limitations ground does not preclude the plaintiff from bringing the same claim in a federal court which has a longer statute of limitations.

Needing to fund water and sewer improvements, the town approved an improvement district which included Cloverleaf's two parcels. The taxes were assessed ad valorem (on the assessed values of the properties). Notice of the hearing regarding objections was published in the newspaper. After Cloverleaf paid the taxes under protest, it brought an action in New York state court seeking to declare the town's assessments of Cloverleaf's property illegal on two grounds. First, that the assessments should have been made on a "benefit basis" -- taxation based on each parcel's proportional share of the benefits -- and second, that the newspaper notice deprived Cloverleaf of procedural due process. The New York state court dismissed the complaint because it was filed past the four month statute of limitations under state law.

Cloverleaf then instituted a federal civil rights action in U.S. District Court on the procedural due process claim under 42 U.S.C. § 1983. New York federal courts use a different statute of limitations in section 1983 claims, and apply New York's personal injury limitations period of three years. The district court dismissed, however, concluding the federal action was precluded by the state court's dismissal of the identical procedural due process claim.

The Second Circuit vacated, and held the district court was not bound to give the state court determination "full faith and credit" because the state court action was not a judgment on the merits. Recall that the U.S. Constitution's full faith and credit clause (article IV, section 1), and the full faith and credit statute (28 U.S.C. § 1738) require a federal court to give the same effect to a state judgment that a state court would give it, including the determination of whether a dismissal is "on the merits." The Second Circuit looked to New York's case law to determine whether a statute of limitations dismissal is considered "on the merits" or merely procedural. If the latter, the claim could be brought:

Stated differently, unless a state's claim-preclusion law departs from the traditional rule and treats a dismissal for timeliness as a ruling on the merits of the claim, courts in another jurisdiction need not give claim-preclusive effect to a dismissal on timeliness grounds. A federal court, exercising its federal question jurisdiction, is plainly a jurisdiction separate from that of the State of New York.

Slip op. at 6. The New York courts clarified that a dismissal on statute of limitations grounds was not "on the merits" (earlier case law suggested that perhaps a dismissal for lack of timeliness was on the merits), and the Second Circuit concluded that the dismissal on statute of limitations grounds did not extinguish the federal procedural due process claim -- it merely barred a state court remedy -- so the plaintiff was free to seek another forum in which the substantive claim may still be brought. See slip op. at 6 (citing Semtak Int'l, Inc. v. Lockheed Martin Corp., 531 U.S. 497, 504 (2001)).

Must A Property Owner Seek A Change In The Law In Order To Ripen A Takings Claim?

In a notable case worth following, the Hawaii Intermediate Court of Appeals is considering a new appeal involving whether a per se regulatory takings claim is ripe under Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), and whether in order to ripen a takings claim, a property owner is obligated to seek a legislative change to the regulations applicable to the property.

In Leone v. County of Maui, No.29696, the trial court refused to consider a property owner's claim that state law and local regulations resulted in a regulatory taking of beachfront property on the south shore of Maui. The Opening Brief filed by the property owner is available here.

The case involves an undeveloped 1/2 acre beachfront parcel, one of 11 similarly-situated lots. The zoning on the property is “Hotel-Multifamily,” which permits residential use. The Community Plan (Maui County’s General Plan) designates the property as “Park” because in the 1980’s, the County sought to condemn the 11 parcels for a public beach park. After acquiring two of the parcels, however, the County ran out of money and the other 9 remain in private ownership, and several of them are fully or partially developed.

The entirety of the property is within the Special Management Area, a special zone subject to an additional layer of regulation under the Hawaii Coastal Zone Management Act, Haw. Rev. Stat. § 205A-1, et seq. The CZMA requires plan-zone consistency, meaning that before any "development" within the SMA can go forward, the zoning must be consistent with the Community Plan. See GATRI v. Blane, 962 P.2d 368 (Haw. 1998). The CZMA exempts a single-family residence from the definition of "development" for which a SMA permit is needed, unless the home will have a "cumulative impact, or a significant environmental or ecological effect" on the SMA. Haw. Rev. Stat. § 205A-22.

The CZMA is administered by the counties, and if a Maui property owner believes a proposed use is exempt, under the local rules she must seek an exemption determination from the county planning department and request a ruling that no SMA permit is required. Under Maui's administrative rules, an application for development cannot be processed unless the zoning is consistent with the Community Plan. Consequently, when the property owner filed a request for a determination that a SMA permit was unnecessary, the county refused to process it.

Williamson County requires that property owners initially file their regulatory takings claims in state court, and the property owner did so, asserting the regulations permitted no economically beneficial use of the land. The trial court granted summary judgment to the County, holding among other things, that in order to ripen the takings claim, the property owner had an obligation to change the Community Plan. To change the Community Plan designation on a parcel requires the County Council to enact an ordinance (in other words, it is a legislative act), and requires the production of an Environmental Impact Statement.

The appeal presents several issues, including:

• Whether the County has made a final determination of the use the owners can make of the property.

• Whether there are any "effective remedies" which the owners might seek.

• If there are remedies, whether those remedies are futile.

The County's brief is due 40 days after the filing of the Opening Brief, so look for it in late August or early September.

On Judicial Takings, And The Hawaii Water Rights Backstory In Stop The Beach Renourishment

The U.S. Supreme Court last week agreed to review the Florida Supreme Court's decision in Walton County v. Stop the Beach Renourishment, Inc., 998 So.2d 1102 (Fla. Sep. 29, 2008), which held that a state statute prohibiting "beach renourishment" without a permit did not effect a taking of littoral (beachfront) property, even though it altered the long-standing rights of the owners to accretion on their land and direct access to the ocean. See Stop the Beachfront Renourishment, Inc. v. Florida Dep't of Environmental Protection, No. 08-11 (cert. granted. June 15, 2009). More background on the case at our resource page.

The Court accepted three questions for review, and the cert petition relied on two rather notorious cases with Hawaii origins to support the conclusion that a decision by a state court which unexpectedly changes established state common law rules of property is a compensable taking. See Pet. at 31-32 (citing Robinson v. Ariyoshi, 753 F.2d 1468 (9th Cir. 1985); Sotomura v. County of Hawaii, 460 F. Supp. 473 (D. Haw. 1978)).  The first Question Presented accepted for review is:

The Florida Supreme Court invoked "nonexistent rules of state substantive law" to reverse 100 years of uniform holdings that littoral rights are constitutionally protected. In doing so, did the Florida Court's decision cause a "judicial taking" proscribed by the Fifth and Fourteenth Amendments to the United States Constitution?

In this post, we explore the background to the esoteric issue of "judicial takings" presented by the two Hawaii cases.

Robinson v. Ariyoshi — The Never Ending (Water Rights) Story

The Robinson litigation is one that holds a special place in our hearts, as it is a tale interwoven with the recent history of Hawaii, taking us from the time before jet travel when sugar and pineapple -- not tourism -- were the economic engines driving politics and the economy of the Territory of Hawaii, through the salad days of the openly activist Hawaii Supreme Court under the leadership of Chief Justice William S. Richardson, and finally sputtering out (sort of) after the U.S. Supreme Court's ripeness ruling in Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985).

Here's the short summary, repeated from memory (the litigation, which is still pending, has been going on for 50 years now, so please forgive us if a few of the details are off). The case started out in 1959 in a Kauai county trial court as a dispute between several sugar plantations over which of them possessed the rights to surplus water in a Kauai stream, among other things. Nine years later, the trial court issued a 65-page decision based on long-standing Kingdom, Territory, and State water law, and declared who owned what. So far, it was just another in a long line of water disputes between private parties. The losing parties took the case to the Hawaii Supreme Court (in those days, there was no Intermediate Court of Appeals and all appeals by right went directly to the Supreme Court), where no party, including the State, argued that the controlling water law was anything but as established by long-standing Hawaii cases.

The Hawaii Supreme Court, however, "sua sponte overruled all territorial cases to the contrary and adopted the English common law doctrine of riparian rights." Robinson, 753 F.2d at 1470 (citing McBryde Sugar Co. v. Robinson, 54 Haw. 174, 504 P.2d 1330 (1973)). The court "also held sua sponte that there was no such legal category as 'normal daily surplus water' and declared that the state, as sovereign, owned and had the exclusive right to control the flow," and "that because the flow of the Hanapepe [stream] was the sovereign property of the State of Hawaii, McBryde's claim of a prescriptive right to divert water could not be sustained against the state." Robinson, 753 F.2d at 1470. In other words, in a dispute between "A" and "B" over which of them possessed water rights, the Supreme Court simply said "neither of you do, the State owns it all."

The private parties who thought they had owned something for over a hundred years were understandably a bit miffed that their property had seemingly morphed into public property by the stroke of a Justice's pen, and, to add insult to injury, without even the chance to brief the Supreme Court before it announced the new rule. But after a rehearing on a narrow issue of state law, during which the court rebuffed an attempt by the private parties to raise federal constitutional issues, the Hawaii Supreme Court reaffrimed the McBryde ruling, with two Justices dissenting. See McBryde Sugar Co. v. Robinson, 55 Haw. 260, 517 P.2d 26 (1973) (per curiam). Justice Bernard Levinson switched his vote from the first opinion, concluding that it was a "radical departure" from established law, and was a taking:

Although I voted with the majority of this court in McBryde Sugar Co. v. Robinson, 54 Haw. 174, 504 P.2d 1330 (1973) [hereinafter referred to as McBryde I], I am constrained to recant that position in view of my current understanding of the problems of this case.  In light of the arguments adduced on rehearing, historical evidence discovered upon further research subsequent to the court's previous decision in this case, and a reappraisal of the reasoning supporting that decision, it is my opinion that the court committed error in holding that all surplus water belongs to the State and that private water rights, however acquired, may not be transferred to nonappurtenant land.  Because of the importance of this case to the development of the law on the subject of Hawaii's water resources, I have undertaken to present a detailed analysis explaining why McBryde I is not in keeping with long established and unique principles of Hawaiian water law.  Precisely because McBryde I is such a radical departure from these principles as they have been heretofore understood, moreover, I have concluded that McBryde I effectuates an unconstitutional taking of the appellant's and cross-appellants' property without just compensation and should be reversed on this ground as well.

McBryde, 55 Haw. at 262-63, 517 P.2d at 27 (Levinson, J., dissenting). The U.S. Supreme Court denied certiorari meaning the Hawaii Supreme Court's McBryde decision was final.

But it was not the last word. The sugar companies sued the state (Governor Ariyoshi, actually, since under Ex parte Young, 209 U.S. 123 (1908), a state official can be sued in federal court to enjoin unconstitutional conduct despite the 11th Amendment) in federal district court under the federal civil rights statute, 42 U.S.C. § 1983. The district judge -- the inimitable Martin Pence -- held that the Hawaii Supreme Court's McBryde decision took property without just compensation, and enjoined the state from enforcing the decision. See Robinson v. Ariyoshi, 441 F.Supp. 559 (D.Haw. 1977).

Up to the Ninth Circuit the parties went, which noted the tortured procedural path the case next took, including a detour back to the Hawaii Supreme Court on certified questions when the Ninth Circuit asked the court whether it really meant what it said in McBryde:

The leisurely pace of this litigation has produced three oral arguments in this court, two of which were followed by referral of certified questions to the Supreme Court of Hawaii. See Robinson v. Ariyoshi, 65 Hawaii 641, 658 P.2d 287 (1982) (Robinson II). Following the publication of the state court's answers to the certified questions, the parties briefed the remaining issues that had been narrowed by the earlier proceedings and reargued the case. A number of complex questions remain, but to expedite the matter we will discuss only those essential to a resolution of the main question: Can the state, by a judicial decision which creates a major change in property law, divest property interests?

Robinson, 753 F.2d at 1471. [Barista's note: are you keeping score yet? There's McBryde. McBryde II. McBryde III. Robinson I. Robinson II. Robinson III. Still to come: Robinson IV, V, VI, VII, and VIII, and then back to McBryde IV.]  After addressing jurisdictional issues, res judicata, and the Rooker/Feldman doctrine, the Ninth Circuit addressed the merits:

The state conceded at oral argument that the Fourteenth Amendment would require it to pay just compensation if it attempted to take vested property rights. The substantive question, therefore, is whether the state can declare, by court decision, that the water rights in this case have not vested. The short answer is no.

Robinson, 753 F.2d at 1473.The court determined that the water rights claimed by the private parties were vested rights, and that the state legislature or the state supreme court cannot alter those rights without condemnation and payment of just compensation.

By the time Robinson IV rolled around, the U.S. Supreme Court had issued its ruling in Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985) that certain regulatory takings case were not ripe, and it granted cert and summarily vacated the Ninth Circuit's Robinson decision, ordering it to consider the decision again in light of Williamson County's new ripeness rules. See Ariyoshi v. Robinson, 477 U.S. 902 (1986) (Robinson IV). The Ninth Circuit vacated its earlier order (Robinson v. Ariyoshi, 796 F.2d 339 (9th Cir.1986) (Robinson V) and sent the case back to Judge Pence in the District Court.

Not to be deterred, Judge Pence found the case ripe under Williamson County. See Robinson v. Ariyoshi, 676 F.Supp. 1002, 1020-21 (D.Haw. 1987) (Robinson VI). Back up to the Ninth Circuit they went, and in Robinson v. Ariyoshi, 854 F.2d 1189 (9th Cir. 1988) (Robinson VII), the Ninth Circuit ordered further briefing on the issue.  In Robinson v. Ariyoshi, 887 F.2d 215 (9th Cir. 1990) (Robinson VIII), the Ninth Circuit vacated the District Court's decision and sent it back with instructions to dismiss the case because it was not ripe under Williamson County.

A thirty-one year old case was not ripe, you say?  How so?

As noted, we previously certified six questions to the Supreme Court of Hawaii. In response, the Hawaii court stated that the decision in McBryde II did not constitute the final disposition of the case. See Robinson II, 658 P.2d at 295-97. The court explained that the McBryde litigation began and was treated throughout by the trial court as an action to determine the rights of the parties to the waters of the Hanapepe. The trial court had attempted to identify the exact quantity of water to which each party was entitled. On appeal, the Supreme Court of Hawaii affirmed the award of appurtenant rights and reversed the award of prescriptive and surplus rights. No specific instruction was imparted to the trial court, and the Supreme Court did not utilize its power to render a final judgment. Further, no further proceedings are of record in the trial court. The court explained that the partial reversal without instruction merely rendered that portion of the judgment void. Id. at 296-97. Thus the only portion of the judgment which could be considered final after appeal was the partial quantification of the parties' water rights, namely the award of appurtenant rights.

Robinson VIII, 887 F.2d at 218 (footnote omitted). Unbelievably, a third cert petition was not sought, and the litigation (per the Hawaii Supreme Court's edict as noted above) went back to the Kauai trial court where it all began in 1959, where, as far as anyone in these parts is aware, the case remains on the docket. The state certainly has no interest in moving it forward and ripening the case, and the private parties who originated the litigation are long since out of the sugar business. [See one note of correction in the comments.] Kauai is now a place of tax revolts, zoning fights, and quiet beaches, and the sugar industry is but a distant memory.

County of Hawaii v. Sotomura — Shifting The Line in the Sand

If you have managed to come along this far, congratulations -- there's more, but thankfully it's a shorter tale and one which follows the same general plot.

McBryde/Robinson was not a unique case, and the Hawaii Supreme Court regularly accomplished similar changes in established law in other areas. In County of Hawaii v. Sotomura, 55 Haw. 176, 517 P.2d 57 (1973), the court redefined the seaward boundary of a littoral parcel in a condemnation action from the high water mark to the "upper reaches of the wash of the waves," holding that no compensation was owed for the land seaward of the new line because it was owned by the state. The trial court had awarded nominal compensation of one dollar to the property owner for the condemnation of this property, but the Supreme Court declared that was error and took the dollar away. [Disclosure: my late law partner and name partner of our firm, Charlie Key, represented the property owners in the Hawaii Supreme Court.]

The property owners followed the Robinson script and sued in federal district court (for due process violations, not under a takings theory). The court determined "[j]udicial transfers of title to private lands to the State which do not permit the owner an opportunity to be heard or to present evidence is not constitutionally valid. Whenever a party is to be deprived of property, he is entitled to a meaningful hearing before the fact." Sotomura v. County of Hawaii, 460 F. Supp. 473, 478 (D. Haw. 1978). The district court concluded:

This Court fails to find any legal, historical, factual or other precedent or basis for the conclusions of the Hawaii Supreme Court that, following erosion, the monument by which the seaward boundary of seashore land in Hawaii is to be fixed is the upper reaches of the wash of the waves. To the contrary, the evidence introduced in this case firmly establishes that the common law, followed by both legal precedent and historical practice, fixes the high water mark and seaward boundaries with reference to the tides, as opposed to the run or reach of waves on the shore. For example, on the Island of Hawaii, the seaweed line was used to indicate the level of the high tides and high water mark. The decision in Sotomura was contrary to established practice, history and precedent and, apparently, was intended to implement the court's conclusion that public policy favors extension of public use and ownership of the shoreline. A desire to promote public policy, however, does not constitute justification for a state taking private property without compensation.

Id. at 480-81. The state's appeal to the Ninth Circuit was dismissed as untimely.

Just think of the possibilities if the deadline had not been missed -- this case might still be going on today.

It Is Good To Be The King: Councilmembers Personally Immune From Charges Of Retaliatory Eminent Domain Abuse

You may remember Mel Brooks' History of the World: Part I, where Brooks, as King Louis XIV, turns to the camera and exclaims "it's good to be the King!" each time he takes advantage of one of his subjects.

Well, it turns out that it really is good.

In Sable v. Myers, No. 07-6286 (10th Cir. Apr. 24, 2009), the U.S. Court of Appeals held that city councilpersons are absolutely immune from claims they used the domain power to take the property of an owner as retaliation for his having successfully brought a quiet title action against the city. 

Mr. Sable's property was immediately north of the city's public works facility.  His predecessor in title had adversely possessed from the city a portion of a former city street on the southern boundary of the property, and this "strip" was fenced in along with Sable's main parcel.  The city wanted to expand the public works facility and entered into negotiations with Sable to purchase the strip, but he eventually refused to sell.  After Sable's state-court quiet title suit began gaining traction, however, the city council voted to condemn both the strip and Sable's main property.  The Tenth Circuit highlighted the council's deliberations which formed the basis for Sable's belief:

Before the vote the Council discussed its power to acquire Mr. Sable’s property even if he did not want to sell it:

VICE-MAYOR FELTON: But in any case, could we acquire [Mr. Sable’s land], though? I mean, if [Mr. Sable] didn’t want to sell it?

JOHN WILLIAMS [a private attorney apparently retained by the City]: Yes, we can.

VICE-MAYOR FELTON: Just because of where it’s sitting, and why we want it?

CITY ATTORNEY MOLER: That’s right. If it’s for a public purpose—

Id. Vol. III at 872. At that point, as we understand the transcript of the meeting, various conversations began simultaneously.  But one exchange (on which Mr. Sable relies to show Defendants’ improper motive) was recorded:

COUNCILMAN RAWLS: . . . There’s none.

VICE-MAYOR FELTON: It’s good to be King.

Slip op. at 4.  When the city instituted condemnation proceedings Sable objected, but the state courts upheld the taking as having a public purpose. Sable then filed suit in state court against the councilpersons and the city, seeking damages under 42 U.S.C. § 1983 for a retaliatory taking. The city removed the suit to federal court, which declined to grant the councilpersons absolute legislative immunity, and the appeal to the Tenth Circuit followed.   The Tenth Circuit held that decisions to condemn property are legislative judgments, and the councilmembers were thus completely immune from suit, regardless of their motivations:

The decision to expand the public-works facility was neither an administrative matter (such as the conduct of a meeting) nor an essentially ministerial task (as when applying the law and predetermined criteria to select a bid). Oklahoma law authorizes municipalities to exercise the power of eminent domain to obtain land for public works. The City's decision to take Mr. Sable's land was undoubtedly an exercise of discretion regarding a matter of public policy that would impact the functioning of public services for years to come. That the councilors may have exercised that discretion on the basis of motives that were irrelevant to public purposes does not affect the councilors' legislative immunity.

Slip op. at 12-13 (citations omitted). This case isn't all that groundbreaking on the legal issue -- legislators are generally completely personally immune from suits involving their legislative decisions -- but does give a peek behind the curtain at how and why decisions to take property are often made. The opinion ended with a recognition that while the legislators are immune, the city itself is not:

We appreciate the discomfort that may arise from the recognition of legislative immunity in this case. Mr. Sable's allegations (whose truth has not been adjudicated) create an ugly picture of the abuse of public power to achieve improper ends. Perhaps such pettiness is more likely to arise in municipal legislative bodies than in legislatures with more members and broader jurisdiction. It is also true, however, that charges of improper motive are likely easier to bring at the local-government level. And the honor and fortune that come from service in local government are slight enough that many capable candidates for municipal office would surely forgo the rewards of such service if faced with the possibility of being sued for every decision taken without public consensus. Moreover, those mistreated by municipal legislators are not without remedy. Not only are political remedies available, but a municipality, as opposed to its officials, is subject to suit under § 1983. History has shown that the greater good comes from protecting legislators from suit based on their legislative acts. This conclusion may be little solace to one who perceives himself to be the victim of abuse of power. But perhaps it emphasizes each citizen’s duty, for the public interest as well as one’s own, to seek the election of honest, capable leaders, or even run for office oneself.

Slip op. at 15. Thanks to Dean Patty Salkin's Law of the Land blog for bringing this decision to our attention.  Her summary of the case is here.

The Nerve Of Those Californians, Vindicating Federal Constitutional Rights In Texas Federal Courts!

As we noted in this post, the recent U.S. Court of Appeals for the Fifth Circuit decision in Severance v. Patterson, No. 07-20409 (Apr. 23, 2009) is garnering a lot of commentary for the dissenting judge's opening ad hominem and the majority's terse response.  Earlier, we summarized the substantive issues in the case, which involve the Fourth Amendment's seizure requirements in a takings-esque fact pattern -- which are, ultimately, more interesting that this distraction -- but wanted to comment briefly.

The case involves a Texas property owner -- but (quelle horreur!) a resident of California -- who seeks to prevent Texas officials from enforcing a Texas statute regulating beachfront ownership because it would either take her property without just compensation, or is an unconstitutional seizure (or both).  The Fifth Circuit affirmed the dismissal of her takings claim as unripe for federal review under Williamson County, but held that her Fourth Amendment seizure claim was not subject to that case's ripeness requirement. Ultimately, the majority certified the questions of state law relevant to the seizure issue to the Texas Supreme Court. 

One of the panel's three judges dissented, however, and to say that his dissent was unusual is somewhat of an understatement, because he begins the opinion with an attack on the plaintiff and her lawyers, Pacific Legal Foundation.  [Before we go further, I must disclose that I do PLF's work in Hawaii, so I am viewing this from the perspective of one who has a (slight) stake in the issue.  Also, a disclaimer: the views expressed here are my own, not PLF's which can be found here.]

The dissent attacked on two grounds: (1) that the plaintiff and her lawyers are from California and (2) that the case is part of a "thinly veiled Libertarian crusade." Here's the full text:

Although undoubtedly unintentionally, the panel majority today aids and abets the quixotic adventure of a California resident who is here represented by counsel furnished gratis by the Pacific Legal Foundation. (That non-profit's published mission statement declares that its raison d'être includes "defend[ing] the fundamental human right of private property," noting that such defense is part of each generation’s obligation to guard "against government encroachment.") The real alignment between Severance and the Pacific Legal Foundation is not discernable from the record on appeal, but the real object of these Californians' Cervantian tilting at Texas’s Open Beaches Act ("OBA") is clearly not to obtain reasonable compensation for a taking of properties either actually or nominally purchased by Severance, but is to eviscerate the OBA, precisely the kind of legislation that, by its own declaration, the Foundation targets. And it matters not whether Ms. Severance’s role in this litigation is genuinely that of the fair Dulcinea whose distress the Foundation cum
knight errant would alleviate or, instead, is truly that of squire Sancho Panza assisting the Foundation cum Don Quixote to achieve its goal: Either way, the panel majority's reversal of the district court (whose rulings against Severance I would affirm) has the unintentional effect of enlisting the federal courts and, via certification, the Supreme Court of Texas, as unwitting foot-soldiers in this thinly veiled Libertarian crusade. It is within this framework that I shall seek to demonstrate how the panel majority misses the mark and why Severance's action should be dismissed, once and for all, for her lack of standing to assert either a Fifth Amendment takings claim for reasonable compensation (because Severance has had nothing taken by the State) or a Fourth Amendment unreasonable seizure claim (because that which was putatively seized did not belong to Severance at the time; and even if it had, there was nothing unreasonable about the purported seizure).

Slip op. at 22-23 (footnote omitted) (emphasis original).  Most of the criticism of the dissenting opinion has focused on its knock against the "thinly veiled Libertarian crusade" (see here, here, and here, for example), and rightly asks why a litigant's or attorney's motivations are in any way relevant to the resolution of the issues. After all, hardly a peep is heard when other public interest organizations litigate pro bono on issues of public importance, and a goodly portion of the federal courts' civil docket would disappear if "test cases" and public interest cases could somehow be dismissed simply because they were part of "a [insert your political philosophy here] crusade."  Federal courts have article III standing requirements and other prudential doctrines to avoid advisory opinions and to preserve federalism, but there's little doubt that if a federal court has subject matter jurisdiction over a controversy, it has some obligation to consider it, even if the plaintiff and her lawyers may also have some larger view of the goals of the case.

However, what makes us the most uneasy about the dissenting opinion is its openly hostile labeling of the plaintiff and her lawyers as "these Californians."  We might be tempted to characterize it as an uncontrolled outburst of local Texan pride or a display of old-school "home cooking" (e.g., "'these Californians' should know that's not how we do things here in Texas"), but it appears that Judge Weiner is from Louisiana, so that dog won't hunt ("You Californians should know that's not how we do it in the Fifth Circuit" doesn't quite pack the visceral punch of the original).

It would also be different were the residence of the plaintiff and her attorneys somehow relevant to the issue in the case -- if the case were about personal jurisdiction and minimum contacts, for example.  But the residence of the plaintiff and her lawyers, their philosophical leanings, and that they are representing her without charge, have nothing to do with the case. Thus, the "meta-message" the dissenting opinion delivers is more hostile and ominous: out-of-state troublemakers do not deserve to have standing in "our" courts.

Shades of Jim Crow sentiments have no place in a judicial opinion, and in the end, any legal or logical credibility the dissent may otherwise have possessed is lost in its gratuitous references to the state of residence of the plaintiff and her lawyers. 

The majority responded with an appropriate degree of restraint in footnote 1: 

Notwithstanding the hyperbolic and unsupported assertions in Part I of the dissent "Context"), the judges of the court endeavor not to decide appeals based on who the litigants are, who their lawyers are, or what we may believe their motives to be. Whether that rule is observed in light of Part I of the dissent, however, the reader must determine.

Slip op. at 2 n.1.  Download the opinion and the dissent here.

Hawaii's Good Friday Holiday: It's Like Thanksgiving And Christmas

If you are wondering why your calls to State and County offices go unanswered tomorrow, it is because it is Good Friday, a legal holiday in the State of Hawaii pursuant to Haw. Rev. Stat. § 8-1. 

The day of the crucifixion was originally made a holiday in 1941 by the Territorial Legislature. The statute was recodified upon statehood in 1959, and the holiday has been confirmed via Haw. Rev. Stat. § 89-1, the law that makes the establishment of public holidays -- among many other things -- a product of what the statute calls "joint decision-making" process between the government and the government employee unions, also known as collective bargaining.

The Establishment Clause, which has been incorporated against the states by the due process clause of the 14th Amendment, prohibits the government from establishing an official religion (the so-called separation church and state), and in 1987, several Hawaii taxpayers challenged the designation of Good Friday as a public holiday because it was plainly -- they claimed -- a religious, not secular observance.  The Hawaii federal court held otherwise in Cammack v. Waihee, 673 F. Supp. 1524 (D. Haw. 1987), concluding among other things that the Legislature made Good Friday a holiday to insure that public workers have more days off, not to make sure they were religious: 

[T]he Good Friday holiday was primarily proposed to increase the frequency of legal holidays. It is also noteworthy to point out, as does the State in this case, that the legislative report seems to acknowledge that Good Friday is not an entirely religious day. The 1939 report characterizes Good Friday as  in theory at least a day of solemn religious observances, apparently reflecting the legislature's sentiment that Good Friday had lost much of its religious nature and had become a holiday similar in nature to Thanksgiving or Christmas which have been secularized to some extent over the centuries.
Indeed, this court is also of the opinion that Good Friday has attained a secular character; for the majority of Americans Good Friday has become more an integral part of a traditional three day secular celebration of Spring which begins on Good Friday and continues through Easter Sunday than a solemn observance of Jesus Christ's crucifixion.

This court concludes that the secular purpose behind the establishment of the Good Friday is manifest. The legislature does not offend the First Amendment by enacting a statute intended to ensure that the people of Hawaii have an adequate number of leave days. This court further concludes that any ancillary sectarian purpose which the legislature may have had in establishing Good Friday as a holiday is not fatal to the Hawaii Rev. Stat. § 8-1, since  a clearly secular purpose  for the statute exists and since Good Friday, like Christmas, has become secularized to some extent over the centuries.

An examination of the effects of Hawaii Rev. Stat. § 8-1 leads this court to the conclusion that the legislature's intended purpose in declaring Good Friday to be a legal holiday has been fulfilled. While the plaintiffs argue that the effect of the Good Friday statute is to give Christian sects the imprimatur of State approval, an analysis of the effects of the statute compels this court to find that the secular effects of the statute significantly predominate over the sectarian effects of the statute.

The Ninth Circuit affirmed. See Cammack v. Waihee, 932 F.2d 765 (9th Cir. 1991).  The majority of the three-judge panel noted that many people in Hawaii use the Good Friday holiday to go shopping, and held "[i]t is of no constitutional moment that Hawaii selected a day of traditional Christian worship, rather than a neutral date, for its spring holiday once it identified the need."  The court concluded that the presence of a plausible secular purpose for enacting the law made the holiday's religious nature effectively irrelevant; to violate the Establishment Clause, the legislature must have intended the Good Friday holiday to only serve a religious purpose: 

We conclude that the Hawaii statute has a legitimate, sincere secular purpose, specifically to provide Hawaiians with another holiday, and thus is not motivated wholly by an impermissible purpose. There is nothing impermissible about considering for holiday status days on which many people choose to be absent from work for religious reasons. That the state legislature was able to accomplish its secular purpose and at the same time accommodate the widespread religious practices of its citizenry is hardly a reason to invalidate the statute.

(citation omitted). One judge dissented, arguing that a day off for Good Friday was not in any sense secular, and was a government endorsement of religion: 

The holly and the ivy, jingling bells, red-nosed reindeer, and frosty snowmen this is not. What this case is about is Hawaii's endorsement, by means of a state holiday, of a day thoroughly infused with religious significance alone. Because I believe that such a state establishment of religion violates both the purpose and effects prongs of Lemon v. Kurtzman, 403 U.S. 602, 91 S.Ct. 2105, 29 L.Ed.2d 745 (1971). I respectfully dissent.

The dissenting judge argued that the court's duty is to seek out whether the legislature had a primarily religious purpose, rather than whether it had any legitimate secular purpose.

Zoning Permit Case Update

Here's the latest on the Kauai Springs cases. As reported in The Garden Island (Kauai's daily), the Kauai Planning Commission issued the remaining zoning permit -- "Final Kauai Springs permit approved." 

More than three years after first submitting permit applications for its Koloa bottling facility, The Kaua‘i Springs water company finally left the Planning Commission with approved permits Tuesday.

The commission, complying with a fall 2008 order from 5th Circuit Judge Kathleen Watanabe, approved a special permit four weeks after doing the same for a use permit and a Class IV zoning permit. The three documents go a long way toward lifting the cloud that had been hovering over the company as it operated on the strength of a temporary injunction since May 2007.

The final permit approval came with caveats. Conditions were attached based on representations made by the applicant in the September 2005 permit application and agreed to Tuesday by Kaua‘i Springs owner Jim Satterfield and attorney Robert Thomas, according to David Minkin, special counsel for the county in the matter.

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

• "Kauai Springs wins lawsuit against Planning Commission" (The Garden Island, Aug. 20, 2008)

• 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.

Land Use Round-Up

Some interesting reports filtering across my screen today:

• Thanks to Charley Foster for sending notice about a post at Volokh Conspiracy about whether the Takings Clause was incorporated against the states by the Due Process Clause, "Regulatory Takings and the Fourteenth Amendment."  On that subject, check out "No State Shall Abridge: The Fourteenth Amendment and the Bill of Rights" by Michael Kent Curtis (available on Amazon here), which makes a good case that the Reconstruction Congress meant for the Privileges or Immunities Clause of the Fourteenth Amendment to incorporate all of the provisions of the Bill of Rights against the states as attributes of national citizenship.

• The New York Post -- with its own inimitable headline -- has published an op-ed about the eminent domain controversy in NYC's Manhattanville neighborhood: "College Cheats - Columbia Blighted Own Hood." More on the issue here.

• Reasononline posts "Not One More Acre!" about the opposition by Colorado ranchers, environmentalists, and scientists to the U.S. Army's proposed expansion of a training area.  

• The Maui News reports "Council reviews housing statute" (actually, it's an ordinance, but close enough) about possible amendment to Maui County's 40-50% "workforce" housing (aka affordable housing) ordinance. That ordinance is also being challenged in federal court, and the latest decision in the lawsuit is posted and analyzed here.

Zoning And Land Use Round-Up

A collection of interesting reports on land use and zoning topics:

• Mission residents reject American Apparel (San Francisco Chronicle) - "Congratulations to the residents of Valencia Street. After a rowdy and sometimes misleading campaign, they managed to stop American Apparel - a socially conscious, popular, American-run clothing store - from moving into one of the street's vacant storefronts....It's another through-the-looking-glass moment in San Francisco. They love the product but hate the store solely because there are about 260 of them worldwide. That means it's a chain and unwelcome under any circumstances."

• Sixth Circuit Court of Appeals Finds Mayor Acted with Malice Intent and Violated Substantive Due Process (Law of the Land blog) - Evidence was sufficient to uphold a jury's verdict that a city violated substantive due process because the new mayor changed the way the city enforced the zoning code to "strict enforcement" and harassed a property owner who was denied a certificate of occupancy. Corr v. City of Ecorse, No. 07-1604 (6th Cir. Dec. 29, 2008).

• Panel to review housing ordinance (Maui News) - The latest chapter in the controversy surrounding Maui County's affordable housing exaction - is the County going to rethink the 40-50% donation requirement?  The latest decision from the federal court lawsuit mentioned in the article is posted and analyzed here.

• Oakland zoning rules a minefield for businesses (San Francisco Chronicle) - This story details how bureaucracy and the requirement for a Conditional Use Permit stifled at least one potential entrepreneur in Oakland, California.

Latest Developments In Maui Affordable Housing Exaction Case

For a while now, we've been meaning to post the latest order in the Maui affordable housing case from the U.S. District Court, Kamaole Pointe Development LP v. County of Maui, No. 07-00447 DAE (D. Haw.), but for one reason or another, haven't had the chance until now. 

The case is a challenge to the County of Maui's "workforce housing" ordinance, enacted in in 2006, which imposes a 40% to 50% affordable requirement on new housing developments of five or more units, and on an application to subdivide a lot into five or more parcels. In lieu of providing actual units, a developer may either pay a fee equivalent to 30% of the total project sales, donate improved land of the same value, or donate raw land valued at 200% of the in-lieu fee. Ordinance 3418 is posted here.  I posted on the case earlier here.

The complaint asserts claims for "unconstitutional conditions," regulatory takings, substantive due process, equal protection, and claims under Hawaii law. The Complaint for Declaratory and Injunctive Relief (filed Aug. 23, 2007) is posted here (note, the Complaint was amended on Sep. 6, 2007). The court earlier dismissed the "unconstitutional conditions" claim, holding it was a regulatory takings claim and was not ripe under Williamson County because the plaintiffs had not pursued a state compensation remedy. That order is posted here.

On November 25, 2008, the court issued an Order Denying Plaintiffs' Motion for Partial Summary Judgment; and Order Granting in Part and Denying in Part Defendants' Motion for Summary Judgment. The court held that the Williamson County ripeness rules also apply to the due process and equal protection challenges, which were not ripe because the property owner had not obtained a "final decision" from the County:

In this case, there is no dispute that Plaintiffs brought an appeal to the County Council requesting a waiver from the strictures of the Ordinance. The appeal for a waiver was denied. It is also undisputed that Plaintiffs have not  filed any formal application or submitted a development plan under the Ordinance. Thus, while Plaintiffs may have received a sufficient denial of a variance in the form of the Council’s waiver rejection, it is clear from the record that Plaintiffs have not received a final decision from the Council rejecting their development plan. Under the final decision jurisprudence, Plaintiffs' as-applied due process and equal protection claims must fail because they are unripe.

Slip op. at 14. The court noted that the Ninth Circuit applies the final decision prong of Williamson County's ripeness rule to substantive due process and equal protection challenges. Slip op. at 11 (citing Hoehne v. County of San Benito, 870 F.2d 529, 532 (9th Cir. 1989); Kinzli v. City of Santa Cruz, 818 F.2d 1449, 1455-56 (9th Cir.), as amended, 830 F.2d 968 (1987), cert. denied, 484 U.S. 1043 (1988); Shelter Creek Dev. Corp. v. City of Oxnard, 838 F.2d 375, 379 (9th Cir. 1988), cert. denied, 488 U.S. 851 (1988); Herrington v. County of Sonoma, 857 F.2d 567, 569 (9th Cir. 1988)). The district court noted "the policy behind requiring a final decision before a court can adjudicate [due process and equal protection] claims is that 'it is generally impossible to determine the extent of the infringement absent a final determination by the relevant governmental body.'" Slip op. at 12 (quoting Sinaloa Lake Owners Ass'n v. City of Simi Valley, 882 F.2d 1398, 1404-05 (9th Cir. 1989), overruled on other grounds Armendiz v. Penman, 75 F.3d 1311, 1326 (9th Cir. 1996)).  

The final decision rule has at least some semblance of logic applied to regulatory takings, where the Supreme Court has established a rule that the value remaining after regulation is applied to property is relevant to the question of whether the property has been taken. But the Ninth Circuit's application of this requirement to due process and equal protection claims has little logical basis, and virtually no support in the constitutional text. Why should it matter that some use might be able to be made of property if the government is acting arbitrarily, without notice and opportunity to be heard, or treating one property owner differently than another? The constitution is violated when even in the course of a preliminary decision about what uses can be made of property the government acts badly, not just when (as in regulatory takings) the government does not recognize its obligation to pay just compensation. But a District Court obviously cannot overrule circuit law, even when a rule makes no sense, so the court was bound to apply the Ninth Circuit's Hoehne rule, so any challenge to the rule itself will have to wait until appeal. 

The court also held that it would not be futile for the property owner to have submitted a development plan, even though the owner claimed that doing so would be cost-prohibitive and would force it to operate at a loss.  Slip op. at 15. The Ninth Circuit's futility rule requires that in order to prove that submitting an application for development would be futile, the property owner must -- and we are not kidding here -- submit an application and see whether it gets denied. And if that application is denied, the property owner must ask for a "variance." See Kinzli v. City of Santa Cruz, 818 F.2d 1449 (9th Cir. 1988). Again, a District Court is in no position to overrule binding circuit precedent, no matter how silly it may be, although the court in Kamaole Pointe at least recognized the "inherent contradiction in having an exception to an application requirement require submission of applications" --

This Court recognizes the inherent contradiction in having an exception to an application requirement require submission of applications. See Zilber v. Town of Moraga, 692 F. Supp. 1195, 1199 (N.D. Cal. 1988) (criticizing the logic of Kinzli’s "meaningful application test). Kinzli and its progeny, however, indicate that the "meaningful application" requirement that triggers the futility exception is designed to provide a forum for developers who have repeatedly submitted legitimate development plans to local agencies only to have them continuously delayed or denied. Moreover, this Court is bound by Ninth Circuit authority which has, in this area of law, repeatedly reinforced the "meaningful application" test. See Zilber, 692 F. Supp. at 1200 (acknowledging that "although this Court is less than comfortable with the Kinzli rule, it is well established in this circuit and therefore binding upon the Court").

Slip op. at 17, n.1. Although it dismissed the substantive due process and equal protection claims, the court held the procedural due process claim was ripe because the plaintiff asserted that the County did not provide adequate procedures in evaluating its appeal for a waiver, and thus was not a "'challenge to the application of land use regulations' to the land." Slip op. at 21. This split-decision underscores the strange dichotomy in the federal courts between "land use" and property cases and cases which seek to vindicate other constitutional rights. See, e.g., slip op. at 18, n.2 (dismissing the substantive due process claim on ripeness grounds because it involved application of land use regulations). We thought the Crown Point case finally ditched that distinction (as we noted here), but maybe, that, like the final decision and futility rules, must wait for appeal.

Finally, the district court disposed of the state law claim the County was without power to enact the ordinance because only the State can impose an "affordable housing impact fee." "Impact fees" as defined in Haw. Rev. Stat. § 46-141 are limited to those imposed to fund public facility capital improvements required by the development. The court held that this definition does not include the in-lieu fee required under the County's ordinance because the money collected goes into the general affordable housing fund and is not earmarked for offsetting capital improvement projects attributable to the development. Slip op. at 32. This seems like circular reasoning, as noted in this post.

Trial on the remaining issue is set for December 2009.

Reply In Support Of Petition In Pratt v. Cal. Coastal Comm'n - Penn Central And Williamson County

The property owner has filed its Reply in Support of Petition for a Writ of Certiorari in Charles A. Pratt Const. Co. v. California Coastal Comm'n, No. 08-668 (cert. petition filed Nov. 18, 2008) (SCOTUS docket report here). The petition seeks review of the California Court of Appeal's opinion reported at 76 Cal. Rptr. 2d 466 (Cal. Ct. App. 2008), available here.

The issues presented in the case involve the Penn Central ad-hoc test for regulatory takings, and the "final determination" prong of the Williamson County ripeness rule. The Reply brief argues:

The Brief in Opposition is liberally salted with Respondent California Coastal Commission's assertions of what it refers to as the "facts" (e.g., pp. 5, 11) as well as disparagement of the presentation in the Petition as having "no evidence" (e.g., pp. 7, 11) behind it.

The Brief in opposition thus highlights the problem that call for the Court's review: there has been no trial to establish the facts and the courts below turned what should have been an evidentiary trial into assumptions supposedly made as a matter of law. Building on those deficiencies in the lower courts' rulings, the Commission's brief substitutes self-serving prose and misdirected invective towards Petitioner's counsel in pace of a due process proceeding in which the facts of the controversy -- not just counsel's argumentation -- are presented as proper evidence to an impartial trier of fact.

In light of the standard the Court has established for deciding regulatory taking cases (i.e., "ad hoc" factual determinations [see Pet., pp. 10-18]), an inquiry into evidence is essential. Lower courts that are hostile to private property rights fail or refuse to understand that basic notion, thus showing the need for corrective action by this Court.

As shown in the Petition, the Court's decisions hold that each regulatory taking case must be decided "ad hoc"on its own facts. (E.g., Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 124 [1978].) Of necessity, that can only be done after trial, with the presentation and evaluation of evidence.

Reply at 1-2.

Disclosure: we filed an amicus brief in the case for the Western Manufactured Housing Community Association, available here, which argues:

Because [the Penn Central] framework eschews any "set formula" and relies instead on "essentially ad hoc, factual inquiries," it is, by its very nature, incapable of being subject to the rigid "20 percent is enough value" per se rule established by the California court. The decision below ignored the requirement of a "weighing of all the relevant circumstances," and established a bright-line rule focused solely on economic impact: when the government’s denial of a development proposal leaves a property owner with no more than 20 percent (or as little as 1120 square feet) of her land available for development, the remaining two Penn Central factors become irrelevant. This arbitrary rule is apparently based on nothing more than caprice, since the court below offered no analysis or rationale in support. Lacking this Court’s clarification, the default regulatory takings test has become a standardless exercise in judicial intuition, hidden behind a gloss of objectivity.

The cert petition and the other amici briefs supporting it are posted here. The Reply brief is responding to arguments made the Coastal Commission in its Brief in Opposition, posted here.

California Coastal Commission's Brief In Opposition In Charles A. Pratt Construction Co. Cert Petition (Penn Central and Williamson County)

The California Coastal Commission has filed its Brief in Opposition to the cert petition in Charles A. Pratt Const. Co. v. California Coastal Comm'n, No. 08-668 (cert. petition filed Nov. 18, 2008) (SCOTUS docket report here).  The California Court of Appeal's opinion, reported at 76 Cal. Rptr. 2d 466 (Cal. Ct. App. 2008) is available here). 

The issues presented involve the Penn Central ad-hoc test for regulatory takings, and the "final determination" prong of the Williamson County ripeness rule.

We filed an amicus brief in the case, available here. The cert petition and the other amici briefs supporting it are posted here.

2008 Land Use In Review: Ripeness Games In Regulatory Takings

In 2008, we continued to castigate the Williamson County ripeness rules, culminating in December when we filed an amicus brief urging the Supreme Court to take a harder look at how the "final determination" aspect of the rule is being applied. The rule has two parts.

First, the state-litigation rule requires a regulatory takings plaintiff to pursue -- and lose -- their claim in state court before asserting their federal constitutional claims in federal court. In San Remo Hotel, L.P. v. City & County of San Francisco, 545 U.S. 323 (2005) four Justices agreed Williamson County produces absurd results and denies federal court review of federal constitutional rights, and argued that in an "appropriate case," the Court should reconsider Williamson County. At least two cert petitions were filed suggesting they were the appropriate case. See Braun v. Ann Arbor Charter Township, No. 08-250 (cert. denied Dec. 1, 2008), and Agripost, LLC v. Miami-Dade County, Florida, No. 08-567 (cert. petition filed Oct. 27, 2008).

The second part of Williamson County is the "final determination" rule which requires that the regulator have reached a final decision of what uses would be allowed on the property. A pending cert petition (the one in which we filed the amicus brief) argues that when a property owner submits a detailed development proposal, consults with the government for years, proposes multiple alternatives for development, and the government responds that denial of the application is the "only appropriate course," then its denials are final enough for a court to evaluate, and final enough to allow the landowner to get past "Go." See Charles A. Pratt Const. Co. v. California Coastal Comm'n, No. 08-668 (cert. petition filed Nov. 18, 2008)  (seeking review of 76 Cal. Rptr. 2d 466 (Cal. Ct. App. 2008).

For an example of the strange procedures Williamson County has spawned, see West Linn Corporate Park, LLC v. City of West Linn, Nos. 05-36061, 05-46062 (9th Cir. July 28, 2008), a case in which the Ninth Circuit, after removal from state court and trial in federal court, referred the takings issues in the case to the Oregon Supreme Court, effectively handing off the decision in the case to that court. 

2008 Land Use In Review: The Ninth Circuit Rediscovers Substantive Due Process

In a development that began in November 2007 (2005 actually, if the starting point is seen as the U.S. Supreme Court's decision in Lingle v. Chevron, U.S.A., Inc., 544 U.S 528 (2005)), the Ninth Circuit finally ditched Armendariz v. Penman, 75 F.3d 1311 (9th Cir. 1996) (en banc), and recognized that property owners are not limited to regulatory takings claims when challenging land use regulation, and the government can violate substantive due process as well.  In 2008, the Ninth Circuit issued a number of decisions in which it recognized that Armendariz's forced election of a regulatory takings remedy has been truly overruled. 

Rather than plow through multiple posts, it would be easier to just download a recently published article I wrote on the subject, collecting all the cases, The Ninth Circuit Rediscovers Substantive Due Process In Land Use Cases (31 Zoning and Planning Law Report (Thomson | West Dec. 2008)). It's all in there.

New Article: The Ninth Circuit Rediscovers Substantive Due Process In Land Use Cases

The Zoning and Planning Law Report (Thomson | West) has published my article about the post-Lingle developments in substantive due process in the Ninth Circuit. Download a pdf of the article here.

From the introduction:

Substantive due process asserted as a claim for relief has a whiff of danger about it. After all, a plaintiff claiming a violation of substantive due process is asking a court to override the judgment of the political branches and invalidate an ordinance, statute, or an administrative determination because the action is somehow illegitimate. After the demise of Lochner, courts are understandably reluctant to be seen as second-guessing the policy choices made by the elected branches of government, and a suggestion that a court is "Lochnering"—legislating from the bench by invalidating economic regulations based on a judge’s contrary economic or social beliefs—can be the equivalent of judicial kryptonite.

In part because land use actions can be characterized as economic regulation, until recently, many courts preferred to resolve constitutional challenges under the Takings Clause, which seemed to provide a more defined analytical framework, at least when compared to the more generalized standards applicable to substantive due process challenges. The Ninth Circuit, for example, forced property owners to challenge land use regulations exclusively as regulatory takings under the Fifth Amendment. When regulatory takings analysis under the two-part Agins v. City of Tiburon standard included both legitimacy and diminution of value components, this forced election of remedies had at least a semblance of intellectual consistency since a landowner could challenge an action as illegitimate under the "substantially advance" test—at least theoretically—and was not limited to seeking compensation under the second part. The two-part test, however, did not survive the Supreme Court’s unanimous ruling in Lingle v. Chevron, U.S.A., at least as one of takings. Lingle clarified that the "substantially advance" prong of Agins was not a "takings" test and that courts should review the legitimacy of land use regulations under the Due Process clause.

After Lingle, the Ninth Circuit revisited its forced election of remedies requirement and expressly overruled it. This article summarizes the Ninth Circuit’s post-Lingle cases which reinvigorated substantive due process as a vehicle for reviewing land use regulations, and suggests several areas for further inquiry when asserting the claim in land use and property cases.

Overrule Williamson County

On November 25, 2008, the Supreme Court will consider whether to review the Sixth Circuit's decision in Braun v. Ann Arbor Charter Township, 519 F.3d 564 (6th Cir. 2008), a decision we analyzed here. The petition expressly asks the Court to overrule Williamson County.  We've detailed the kafkaesque nature of the Williamson County rule many times, most recently here (in a post about another pending petition which asks the Court to overrule the case).  Here are the briefs in Braun:

• Petition for writ of certiorari

• Brief in Opposition

• Reply Brief in Response to the BIO

• Brief amicus curiae of National Association of Homebuilders

The Court's docket report is available here. The cert petition contains three Questions Presented:

1.     Should the Court overrule Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City insofar as it requires property owners to seek compensation in state court to ripen a federal takings claim, where four justices of this Court declared in San Remo Hotel v. City and County of San Francisco that such a rule is “mistaken” due to its lack of doctrinal underpinning and preclusive effect on federal jurisdiction?

2.     Is a property owner barred from bringing a procedural due process claim against a defective land use hearing simply because the owner also raised a regulatory takings claim subject to Williamson County, as the Sixth Circuit has held, or does the procedural due process claim supply an independent basis for constitutional relief, as the Ninth and Fifth Circuits have held?

3.     Can a property owner raise a procedural due process challenge to a land use permit decision based on a fee simple interest in the affected land, as the Ninth and Seventh Circuits have held, or must the owner have an “entitlement” to the desired permit, as the Sixth Circuit held?

Pleading Class of One Equal Protection Land Use Claims

The most easily recognizable equal protection claim is one in which the plaintiff claims membership in a protected group, and some form of discrimination against the class. Another type of equal protection claim is the "class of one" claim under Village of Willowbrook v. Olech, 528 U.S. 562 (2000) (per curiam), where the Court held that a landowner who claimed village officials retaliated against her for winning an earlier lawsuit against them was entitled to bring a claim for an equal protection violation even though she was not a member of any protected class, or any group at all. If she was being singled out from others who were similarly situated for disparate treatement, she had a claim. The latest case is in the latter category.

In SBT Holdings, LLC v. Town of Westminster, No. 08-1512 (1st Cir. Nov. 6, 2008), the U.S. Court of Appeals for the First Circuit clarified the pleading requirements for a class of one equal protection claim. The facts of the case are straightforward. Massachusetts property owners got caught in a jurisdictional squeeze between the state environmental protection agency and a township conservation commission. After runoff from their property affected downstream wetlands, the state agency obtained exclusive jurisdiction by issuing a remediation order. Apparently, under Massachusetts law once the state agency issues such an order, its jurisdiction over the remediation process is exclusive. 

However, despite the fact that the town's conservation commission both understood state law and knew that the state agency had already acted, it subjected the property owners to several of its own remediation and enforcement orders, and is alleged to have engaged in some very underhanded conduct, including suing the property owners in a state court action dismissed as "frivolous and wholly insubstantial."  See, e.g., slip op. at 5-7. 

Off to federal court went the property owners, alleging constitutional claims for equal protection and under our old friend the federal civil rights statute, 42 U.S.C. § 1983. The district court dismissed the complaint for failure to state a claim, because the plaintiffs did not adequately allege they were treated differently from others who were similarly situated for illegitimate reasons. Slip op. at 9-10.  The First Circuit reversed:

A claim for a "class of one" equal protection violation "is cognizable when -- and only when -- a 'plaintiff alleges that she has been intentionally treated differently from others similarly situated and that there is no rational basis for the difference in treatment.'"

Slip op. at 11 (quoting Olech, 528 U.S. at 564). The court rejected the town's argument the landowners had not adequately alleged they were being treated differently. The complaint alleged the town did not attempt to subject the owners who had purchased the property after it was developed to the town's remediation measures. The First Circuit assumed that the environmental regulations ran with the land, and held that the complaint sufficiently alleged these subsequent owners were "similarly situated."  The court also held the complaint alleged the town was selectively enforcing the law since it was not disputed it attempted no enforcement against the new owners. After rejecting the town's other arguments on appeal (res judicata, lack of plaintiff standing), the court reversed the district court, and remanded the case to allow the property owners the opportunity to prove their case.

See this post for how class of one equal protection claims are treated in the Ninth Circuit.

Kauai Springs Update: Civil Rights Case, Kauai Planning Commission Appeals

The latest on the Kauai Springs cases. In the civil rights case, we've filed a motion for Kauai Springs seeking summary judgment on the substantive due process, permit approval, and 42 U.S.C. § 1983 claims. Download a copy here. The exhibits to the motion (available separately here) include the court's earlier Findings of Fact and Conclusions of Law in the related administrative appeal in which Kauai Springs prevailed in August 2008. Hearing is set for December 10, 2008 in the fifth circuit court.

Also, on October 22, the County of Kauai Planning Commission appealed the final judgment in the administrative appeal to the Hawaii Intermediate Court of Appeals. The circuit court's findings which the Planning Commission is appealing are posted here. More to follow once the briefs are filed.

For more information about these two related cases, here are some links to earlier media coverage:

• "Kauai Springs wins lawsuit against Planning Commission" (The Garden Island, Aug. 20, 2008)

• 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.

Ninth Circuit: City's (Alleged) Failure to Enforce the Zoning Code Is Not A Substantive Due Process Violation (Oh, And Armendariz is Still Overruled)

In Shanks v. Byrd, No. 06-35665 (Aug. 27, 2008), the Ninth Circuit held that a municipality's alleged failure to enforce its zoning laws was not a violation of the Fourteenth Amendment.

Developers who convert homes into student residents apparently did not obtain all of the appropriate permits from Spokane, Washington to remodel a portion of a house in the city's Mission Avenue Historic District.  The city issued a building permit, but the Spokane zoning code requires additional permissions when historic landmarks are involved, and the developers did not seek or obtain a "certificate of appropriateness" or an "administrative special permit" from the city's Historic Landmark Commission.  The city did not object, and took no steps to require the permits.

A group of neighbors and community organizations sued the property owners and the city, alleging the city's failure to enforce the zoning code was a violation of their due process rights and a violation of a federal civil rights statute (42 U.S.C. § 1983), and violated the National Historic Preservation Act and the Spokane zoning code.  The district court dismissed the complaint for failure to state a claim, and the Ninth Circuit affirmed. 

Relying on Armendariz v. Penman, 75 F.3d 1311 (9th Cir. 1996), the city first claimed the due process claims were preempted by the Takings Clause.  The city asserted that the plaintiffs' claims that the city's action in not enforcing the zoning code caused a diminution in the value of the plaintiffs' property was a "takings" claim that must be asserted under the Fifth Amendment.  The court rejected the argument, noting that Armendariz was overruled in Crown Point Dev., Inc. v. City of Sun Valley, 506 F.23d 851 (9th Cir. 2007) (a decision we discussed here and here):

Expressly repudiating Squaw Valley's suggestion that a "substantive due process challenge brought in the context of regulating use of real property might not be viable," we recently held that "the Armendariz line of cases no longer can be understood to create a blanket prohibition of all property-related substantive due process claims."

Slip op. at 11834 (citing Action Apartment Ass'n, Inc. v. Santa Monica Rent Control Bd., 509 F.3d 1020, 1025 (9th Cir. 2007)).  The court noted that the plaintiffs were not seeking just compensation, but an invalidation of the land use action that was alleged to be "arbitrary and capricious." 

The court disposed of the substantive due process claim by first determining that the developers were not acting under color of state law, and the city had done nothing -- except, perhaps, failing to protect the plaintiffs from the negative consequences of the development -- that could be said to be "state action."  Slip op. at 11836.  Further, the court held that the failure to enforce the law was not "egregious official conduct" or an "abuse of power."  Id. at 11837.  "There is no evidence of a sudden change in course, malice, bias, pretext or indeed, anything more than a lack of due care on Spokane's part."  Id. at 11838.

Addressing the procedural due process claim, the Ninth Circuit held that the plaintiffs did not have a protected property interest in the proper application of the city's zoning code, because the code does not contain mandatory language constraining the city's conduct:

Logan Neighborhood does not have a legitimate claim of entitlement to the denial of the Dressels' permit in accordance with the historic preservation provisions.

Id. at 11841.  The Ninth Circuit summarily rejected the plaintiffs' NHPA argument because that statute does not create a private right of action.  The court also rejected the plaintiffs' state law claims for lack of a substantial federal question.

Read the full decision here.  Our thanks to Honolulu attorney Andy Beaman for alerting us to this case. 

Ninth Circuit: "Lawyers Must Eat, So They Generally Won’t Take Cases Without A Reasonable Prospect Of Getting Paid."

In Moreno v. City of Sacramento, No. 06-15021 (9th Cir. July 28, 2008), the Ninth Circuit clarified the rules for calculating "prevailing party" attorneys fees in civil rights cases under 42 U.S.C. § 1988.  The district court rejected the plaintiff's claim, and reduced both the number of hours the plaintiff's attorney claimed, and the hourly rate charged.  The Ninth Circuit reversed, holding that before the district court could simply whack hours and rates, it must articulate its specific reasons for doing so. 

The opinion was authored by Judge Kozinski, so it's an enjoyable read and I won't go into details since you can read the full analysis yourself here.  There are some enjoyable and informative quotes worth remembering, however:

Lawyers must eat, so they generally won’t take cases without a reasonable prospect of getting paid. (p. 9522)

By and large, the court should defer to the winning lawyer’s professional judgment as to how much time he was required to spend on the case; after all, he won, and might not have, had he been more of a slacker. (p. 9524)

The district court has a greater familiarity with the case than we do, but even the district court cannot tell by a cursory examination which hours are unnecessarily duplicative. Nevertheless, the district court can impose a small reduction, no greater than 10 percent—a “haircut”—based on its exercise of discretion and without a more specific explanation. Here, however, the district court cut the number of hours by 25 percent, and gave no specific explanation as to which fees it thought were duplicative, or why. While we don’t require the explanation to be elaborate, it must be clear, and this one isn’t. (p. 9524)

The district court has discretion to determine the appropriate fee award, because its familiarity with the case allows it to distinguish reasonable from excessive fee requests. But gut feelings are not enough; if the district court is going to make substantial cuts to a winning lawyer’s fee request, it needs to explain why with sufficient specificity that the lawyer can meaningfully object and we can meaningfully review the objection. We can’t defer to reasoning that we can’t review; if all the district court offers is a conclusory statement that a fee request is too high, then we can’t tell if the court is applying its superior knowledge to trim an excessive request or if it is randomly lopping off chunks of the winning lawyer’s reasonably billed fees. (p. 9531)

Attorneys fees awards under § 1988 are important to land use lawyers since Fifth Amendment property rights are civil rights, violations of which are actionable under 42 U.S.C. § 1983.

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.

6th Circuit: We Have No Jurisdiction, But We Rule Against The Property Owner Anyway

If you picked up and read a copy of Braun v. Ann Arbor Charter Township, No. 07-1370 (Mar. 13, 2008), an opinion by the US Court of Appeals for the Sixth Circuit, without having read the briefs of the parties and the decision of the court below, you might not see anything terribly unusual. 

The case arose after property owners asked the Township to rezone their parcels from Agricultural to Residential, and the Township refused.  The property owners did not seek a variance because the Township informed them that none was available.  The property owners then dutifully went to state court to seek compensation, arguing that the only economically beneficial use of the property was residential.  The state courts did not reach the constitutional claims, and dismissed the case on procedural grounds because the property owners had not sought a variance.  See Braun v. Ann Arbor Township, 683 N.W.2d 755 (Mich. Ct. App. 2004).  The Township's Zoning Board of Appeals denied the variance because it lacked jurisdiction .

Probably believing it was futile to thrash about in this state court procedural shell game (hadn't the Michigan Court of Appeals just held the ZBA did have jurisdiction?), the property owners filed suit in federal district court, asserting the denial of their zoning change request deprived them of substantive and procedural due process, denied them equal protection, was a regulatory taking and a violation of a federal civil rights statute (42 USC § 1983). 

They fared no better in federal court, however, which dismissed all of their claims on Williamson County ripeness grounds because they had not sought and been denied just compensation by the state courts (more on the Williamson County rule here). 

But wait, you say, the regulatory takings claim was only one of the property owners' claims; what about the due process and equal protection claims -- those are not subject to Williamson County because denial of just compensation is not an element of a due process and equal protection claim.  You'd be right, but apparently the District Court was following the now-discredited and overruled Armendariz doctrine from the Ninth Circuit which treats all property owner claims as takings claims, even when they plainly are not. 

The court of appeals affirmed, holding that the regulatory takings claim was not ripe under the Williamson County rule, and that the due process, equal protection, and 1983 claims were "ancillary" to the takings claim, and thus were also not ripe.  See Braun, slip op. at 3.  The court of appeals held:

Because the plaintiffs did not fulfill their obligation of seeing just compensation in state court, we do not have jurisdiction to reach the merits of their takings claim.

Slip op. at 5 (emphasis added). 

If the Sixth Circuit's opinion stopped there, it would be "nothing to see here, folks, just move along" time -- yet another case to add to the growing list of certworthy decisions highlighting the weird regulatory takings ripeness rules property owners find themselves up against when they have the audacity to believe they can assert federal constitutional claims in federal court.  However, having just held it did "not have jurisdiction" to reach the merits of the property owners' claims, the Sixth Circuit spent the next four pages doing just that, on issues not analyzed by the District Court's opinion (the District Court dismissed the case without prejudice), and not raised, briefed, or argued by either party to the appeal.  The Sixth Circuit apparently believed it possesses the power to raise and decide these issues on its own initiative, without the benefit of input by the parties.  See slip op. at 6-9. 

But the Federal courts are limited by Article III of the Constitution to hear only "cases" and "controversies," meaning that they have no power to decide cases over which they lack jurisdiction, especially when a court expressly acknowledges it does "not have jurisdiction" over a case, as the Sixth Circuit did here.      

▪ Ninth Circuit: Landowner May Assert Both Takings and Due Process Claims

A must-read decision today from the Ninth Circuit -- Crown Point Development, Inc. v. City of Sun Valley, No. 06-35189 (Nov. 1, 2007).  The court clarified a point that has been a long time coming: a property owner may assert claims under both the Takings and the Due Process Clauses.  In other words, land use guys, the court has finally torpedoed Armendariz v. Penman, 75 F.3d 1311 (9th Cir. 1996) (en banc). 

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.

Sun Valley rejected Crown Point's development application.  After pursuing relief in state court, Crown Point filed a federal civil rights action pursuant to 42 USC § 1983, alleging that Sun Valley arbitrarily interfered with its property rights and the denial of the permit was arbitrary.  In other words, a substantive due process claim.  The district court dismissed, relying on Armendariz.  "Constitutional claim involving land?  Must be a takings claim."  This forced election of claims and remedies was an odd rule to say the least: as any first-year student of Civil Procedure will tell you, the rules of pleading generally allow a plaintiff to assert alternate theories of liability, even if those theories may overlap or even conflict.  See, e.g., Fed. R. Civ. P. 8(a) (in a federal complaint "[r]elief in the alternative or of several different types may be demanded"). 

In Lingle v. Chevron, U.S.A., Inc., 544 U.S. 528 (2005), the US Supreme Court held that a claim that a government regulation does not substantially advance a legitimate state interest is grounded in Due Process concerns, not takings.  If a property owner asserts a regulation interferes with economically beneficial uses, it is a takings claim, if the claim is that the government's action is irrational, it is a due process claim.  The Ninth Circuit's rule of forced election of remedies in Armendariz could not have survived Lingle's holding, yet the Ninth Circuit had not expressly revisited the issue in the two years since the Supreme Court decision.  Now it has, holding:

Accordingly, it is no longer possible in light of Lingle and [County of Sacramento v.] Lewis[, 523 U.S. 833 (1998)] to read Armendariz as imposing a blanket obstacle to all substantive due process challenges to land use regulation.

Slip op. at 14459.  The court compared takings claims and substantive due process claims in the land use context.  When a property owner claims a per se taking under Loretto or Lucas, or an ad hoc taking under Penn Central, the claim is analyzed under the Fifth Amendment.  If, on the other hand, the property owner asserts, as Crown Point does, that the government has acted illegitimately, it is a due process claim:

Lewis and Lingle indicate that a due process claim is not precluded.  Lingle, 544 U.S. at 542 (“[A] regulation that fails to serve any legitimate governmental objective may be so arbitrary or irrational that it runs afoul of the Due Process Clause.”) (citing Lewis, 523 U.S. at 846); see Lingle, 544 U.S. at 549  Kennedy, J. concurring) (noting that the Lingle decision “does not foreclose the possibility that a regulation might be so arbitrary or irrational as to violate due process”).

The Ninth Circuit remanded the case to the district court for further proceedings.  Tom Caso's thoughts are posted on his Opening Brief blog, "Due Process rights for property owners live again in the 9th Circuit," and Professor Patty Salkin's are posted on her Law of the Land blog here.  The opinion is posted here.  

▪ SCOTUS: "Prevailing Party," Attorney's Fees, and Land Use Litigation

The US Supreme Court has issued a unanimous opinion in Sole v. Wyner (No. 06-531) (docket listing here), a case involving whether a party who obtains a preliminary injunction -- but ultimately loses the case on the merits -- can be a "prevailing party" entitled to civil rights attorneys fees.  The Court, in an opinion by Justice Ginsburg, answered no.  I've previously posted about the case background here, and the oral arguments here.  SCOTUSblog summarizes the opinion here, and National Public Radio reports on the case here (with audio).

This case has impact on land use litigation.  A key federal civil rights law, 42 USC  § 1988, allows the prevailing party to recover attorneys fees from the other side.  The right to own and make economically beneficial use of property is one of those federal civil rights, and land use and property issues are often litigated under 42 USC  § 1983, so attorneys fees may be available to the winning party.

A few of us predicted a "slam dunk" reversal, since obtaining a preliminary injunction, but losing summary judgment on the merits is not, in any real sense "prevailing" in litigation: you have to be ahead at the end of the game to be deemed to have "won," not just after the first quarter.

▪ 2006 Land Use in Review: Hawaii Water Law is Not a Federal Case

Just in case you were wondering whether Hawaii water rights issues were matters of federal or state law, the Hawaii Supreme Court has provided the answer. 

In Maui Tomorrow v. State of Hawaii, 110 Haw. 234, 131 P.3d 517 (Apr. 5, 2006), the court held that prevailing on a state law water rights claim in state court does not entitle the victor to federal civil rights attorneys fees. 

That conclusion may seem a touch obvious, one might think, but despite a rather clever and "tenuous" argument by the party seeking to fee-shift, the court correctly determined that issues of water rights and the common law public trust were matters of state law.  Disclosure: I represented the Hawaii Farm Bureau Federation, one of the prevailing parties in this appeal.

The appeal arose when the owner of a private water transport system on Maui sought a long term lease from the State Board of Land and Natural Resources, allowing the use of surface water originating in state-owned land.  Several individuals and organizations intervened in the administrative process, alleging that the lease would interfere with their preexisting water rights, rights as Native Hawaiians, and rights under Hawaii's public trust in water, and that before entering into a lease, the agency must undertake an environmental assessment under the  Hawaii Environmental Policy Act, Haw. Rev. Stat. ch. 343.

The agency rejected the claims, and the intervenors appealed to state court, adding a claim for due process violations.  The trial court ruled against the intervenors and in favor of the state on the due process claims, for the intervenors on the EA and public trust claims, and remanded the case back to the agency.  After judgment was entered, the intervenors sought nearly a quarter of a million dollars in attorneys fee under the federal fee-shifting statute, 42 U.S.C. § 1988.  That statute allows a party who prevails on a federal civil rights claim (42 U.S.C. § 1983) to make the loser pay attorneys fees.  The trial court denied the motion and the intervenors appealed.

The Supreme Court held that despite characterizing their water rights and public trust claims as claims under the law admitting Hawaii as the 50th state (the Admission Act), the claims made by the intervenors were, in reality, arguments under state law. The court compared the claims actually made by the intervenors to the claims the intervenors said they made, and found no federal civil rights claim was present, much less a federal claim on which the intervenors prevailed.  The court characterized the request for attorneys fees as "tenuous," but refused to impose Rule 11 sanctions for a frivolous argument.