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Cert Denied In Western Water Rights Case

The Supreme Court has denied cert in Estate of Hage v. United States, No. 12-918 (cert. petition filed Jan. 17, 2013).

That's the case in which the Federal Circuit held that a 22-year old takings case was not ripe because even though the agency denied Hage's every application for a grazing permit, it might issue a special use permit that might allow the use of the water he alleges was taken. The issue in the case was whether it is a taking for the government to cut off physical access to a property owner's vested right to use water. The Court of Federal Claims awarded $4.2 million in just compensation for the taking of Hage's water rights. But the Federal Circuit reversed because the case was not ripe.

In a different phase of the case, the U.S. District Court for the District of Nevada recently held that the government's suing Hage's estate for trespass for allegedly grazing its cattle on federal land without authorization "shocks the conscience," and is a due process violation. But that ruling had no direct relationship to the compensation case.

HAWSCT To Review Kawaiahao Church Cemetery Case

What's the difference, if any, between a "cemetery" and a burial, and are burials in cemeteries exempt from archaeological review? That's one of the issues the Hawaii Supreme Court agreed to review in this Order, by which it accepted the DLNR's application for a writ of certiorari.

In Hall v. Dep't of Land and Natural Resources, No. 12-0000061 (Dec. 14, 2012), the Intermediate Court of Appeals held that a development proposed by the historic Kawaiahao Church in Honolulu is not exempt from historic preservation review, and the state should have required the preparation of an archaelogical inventory survey prior to the State Historical Preservation Department's check off on the project, even though the development is located in the Church's cemetery.

The DLNR's application posed the following Questions Presented:

Defendant-Appellee Kawaiaha‘o Church (the "Church") is attempting to construct a multi-purpose building ("MPC Project") on its grounds for use in furtherance of its religious mission. The site of the MPC Project is located on cemetery grounds of the Church property. The Intermediate Court of Appeals (“ICA”) ruled that regardless of whether the site was considered a cemetery, an archaeological inventory survey ("AIS") was required; therefore, the Court ruled that the Department of Land and Natural Resources’ ("DLNR") State Historic Preservation Division ("SHPD") "violated its own rules in failing to require an AIS before permitting the project to go forward." In reaching its decision, the ICA relied in large part on this Court’s recent decision in Kaleikini v. Yoshioka, 128 Haw. 53, 283 P.3d 60 (2012).

The State requests this Court review the following issues:

1. That the ICA gravely erred when it ruled that an AIS was required before SHPD could concur in the MPC Project.

2. That the ICA gravely erred in ruling that it was irrelevant whether the MPC Project site was a cemetery.

3. That the ICA gravely erred when it ruled that Kaleikini v. Yoshioka, 128 Haw. 53, 283 P.3d 60 (2012) was applicable to the instant case.

4. That the ICA gravely erred by failing to recognize the State’s sovereign immunity (and failing to follow this Court’s controlling ruling on the issue) when it granted attorney’s fees and costs in favor of Respondent-Plaintiff-Appellant Dana Naone Hall ("Plaintiff") and against the Church and the State jointly and severally pursuant to the private attorney general doctrine.

Application at 2-3 (footnote omitted).

Whether the court will be issuing a ruling on all of these issues or just some of them, we don't know. All we can do now is wait for a decision (the court ordered that no oral argument would be held, meaning that the case won't get a hearing unless one of the parties successfully moves for retention).  

Petitioners-Defendants-Appellees Department of Land and Natural Resources, et al.'s Application for Writ of...

HAWICA Thwarts State's Massive Land Grab

Yesterday, the Hawaii Intermediate Court of Appeals issued an opinion in In re Trustees Under the Will of the Estate of James Campbell, No. 30006 (June 13, 2013), a fascinating case involving the nature of Torrens title. In doing so, the court rebuffed the State of Hawaii's attempted land grab, which would have undermined the sanctity of all Land Court titles, and, in a sense, the very notion of property rights and settled expectations. The ICA also rejected the State's attempt to transform the "public trust" doctrine into a physical servitude that would have allowed the State to flood land without consequence.

Before we go further, this disclosure: we filed an amicus brief on behalf of Pacific Legal Foundation in the case in support of the property owner.

Torrens (Land Court) Title

With that out of the way, some background. Hawaii is one of the few remaining states retaining its Torrens system of title registration (two others are Massachusetts and Minnesota). We call it "Land Court," a system in which the State guarantees indefeasible title to the rights and interests reflected in the title register. Torrens title derives its name from Sir Robert Torrens, an Australian by way of Ireland who became the first premier of South Australia. Largely through his efforts, South Australia adopted a system of land registration which was adopted by other common law jurisdictions, including several in the United States.

The Torrens system, in general, is a method of creating a certificate of title and then registering a legal and basically absolute title to real property. This procedure, utilizing none the less, a judicial hearing to adjudicate all claims at the outset, was at one time in effect in 20 states. At the present time only ten states still utilize the (one step) Torrens system. Eleven states have repealed the Torrens statutes. In the remaining ten, in which the Torrens system is still in effect, the system is voluntary, and it functions side by side with the "old style," evidence of title recording system. The ten states are Colorado, Georgia, Hawaii, Massachusetts, Minnesota, North Carolina, Ohio, Virginia, Pennsylvania and Washington. New York recently repealed its registration of title law. In New York State around Buffalo and on Long Island there has been some use of the registration procedure. The registration system, until fairly recently at least, was in substantial use only in Massachusetts, Minnesota and Hawaii.

Todd Barnet, The Uniform Registered State Land and Adverse Possession Reform Act, A Proposal for Reform of the United States Real Property Law, 12 Buff. Envt'l. L.J. 1, 19-20 (2004) (footnotes omitted). Hawaii first adopted the Torrens Land Act in 1903, and it is currently codified at Haw. Rev. Stat. ch. 501.

The 1938 Land Court Judgment

The Campbell case arose when Campbell submitted a petition to the Land Court in 2009 to consolidate and subdivide land it owns on the north shore of Oahu. The land was registered and had been confirmed to Campbell by the Land Court in 1938. A portion of the land derived from a royal patent in which the government reserved mineral and metallic mining rights, and another parcel had no reservation at all. The State's predecessor (the Territory of Hawaii) appeared in the Land Court and asserted several claims, but did not claim mineral or mining rights or a flowage easement. The Land Court eventually confirmed fee simple title in Campbell and noted that it was subject to various encumbrances, but this list did not include a reservation of mineral or mining rights or a flowage easement in favor of the Territory. .

The 2009 Land Court Ruling

Seventy years later, the State appeared in Campbell's new Land Court action, and claimed that Campbell's title is subject to the State's ownership of "all mineral and metallic mines of every kind or description on the property, including geothermal rights," and is subject to a flowage easement in favor of the State. The State argued that despite the 1938 Land Court registration, Campbell's title never included interests which the State had reserved, even though the State's predecessor had appeared in that case, and Campbell's title had been confirmed free of all unregistered interests. The Land Court rejected the State's arguments and held that its claim of mineral rights was extinguished by the 1938 judgment, and that the title was also not subject to a flowage easement.

The State's appeal to the ICA argued that the original grantor of the land -- the King, in his individual capacity -- did not own the mineral rights, so therefore could not have conveyed those rights to Campbell, and that the government's reservation of mineral rights is "self-effectuating" whether noted in the land grant or not. It also claims that the government always possesses a flowage easement as a function of the public trust in water resources.

ICA: Land Court Title Is "Unimpeachable and Conclusive"

The ICA soundly rejected those arguments. The court held that the intent of the registration provisions in chapter 501 is to "preserve the integrity of titles," slip op. at 11, and "a certificate of title is unimpeachable and conclusive except as otherwise provided by law." Id.  As a consequence, "[b]y virtue of the Land Court registration of the Subject Property, the Trustees held, and subsequent good faith purchasers of the Subject Property for value hold, the Subject Property free from all encumbrances, except for encumbrances noted on the certificate of title." Id.

We hold that the Original [1938] Decree and the Original Certificate of Title extinguished the express government reservations of mineral or metallic mines set forth in Royal Patent No. 5616, Royal Patent No. 5693, and Grant No. 550 and also extinguished any implicit reservation in the Kamehameha III deed.

Slip op. at 8.

The court noted that at oral argument the State conceded that the reservation of mineral or metallic mines is an "encumbrance" and an alienable right. The court concluded that the state had appeared in the 1938 Land Court action to assert some of its rights (but not the mineral rights), and the Land Court's judgment thus "extinguished the reservations of mineral or metallic mines." Slip op. at 14. 

Public Trust Doesn't Give a Flowage Easement

The court also rejected the State's attempt to transform the State's "public trust" in water resources into much more than it is. In Hawaii's version of the public trust doctrine, the State owns all water and holds it in a trust for the benefit of the public. As Professor David Callies and Cal Chipchase have pointed out, our version has already distorted the public trust's usual scope, but in the Campbell case, the State sought to make it even broader. It claimed this power gives the government a flowage easement that should be reflected on Land Court title. A flowage easement is an inherent right to flood land without consequence. In other words, the State argued that its duty to "preserve and protect" water resources virtually eliminated any claim any landowner may have for State-caused flooding. Recognizing that this claim was just too much, the ICA held:

While the State's ownership of reserved water rights under the public trust doctrine is established by Hawaii precedents, the State provides no persuasive support for its argument that the ownership of such water rights means that the State is entitled to have an easement for the free flowage of waters noted as an encumbrance on the Subject Property. We affirm the Land Court's decision to deny the State's claim for a reserved easement for the free flowage of waters on the Subject Property.

Slip op. at 19. The court rightly recognized that the State was, in effect, throwing up a wildly excessive argument just to see if it would stick: the State provided no authority and "no specifics" to support a reading of the public trust doctrine that would stray the public trust doctrine even further from its moorings than it already has, it did not identify where the easement would run on the land, it did not idenfity the scope of the claimed easement, and it did not "demonstrate that the notation of an easement for the free flowage of waters as an encumbrance on the Subject Property at the present time and in the context of this case is needed to perform such duties [under the trust]." Slip op. at 21. But these are the kind of arguments you get in these type of cases, where invocations of the magical public trust often get results, even where they should not.

The bottom line in this case is that the ICA rejected two vastly overreaching claims by the State, and in the process thwarted what would have amounted to massive land grabs.

In re Trustees Under the Will of the Estate of James Campbell, No. 30006 (Haw. App. June 13, 2013)

Upcoming ABA CLE: "Supreme Court Takings - A First Look At Koontz And Horne"

Mark your calendars for July 12, 2013 for our CLE teleconference on "Supreme Court Takings: A First Look at Koontz and Horne," sponsored by the ABA's State and Local Government Law Section. Here's the program description:

In the 2012 term, the U.S. Supreme Court heard arguments on two regulatory takings cases, Koontz v. St Johns River Water Management District, and Horne v. U.S. Department of Agriculture. Join our panel of legal scholars and expert practitioners for the first analysis of these cases, and how the Court's rulings on land use exactions (Koontz), and jurisdiction (Horne) will impact your practice.

We've assembled a great faculty with a mix of expert scholars and practitioners: Professor Michael McConnell (arguing counsel in Horne), Professor David Callies, W. Andrew Gowder, and Michael Kamprath. I will be moderating and asking some questions of our panelists as we talk raisins, exactions, jurisdiction, and all of the other things these two cases mean. 

Yes, we know the Koontz opinion has not yet been issued. But it will be by July 12. So hold the date on your calendar -- we don't have the registration details yet, but will post them as soon as they are available.

Thursday Round-Up: A SCOTUS Losing Streak, Prune Yard II Denied, Mortgage Seizures

Here's what we're reading today (in addition to the four unanimous Supreme Court decisions issued this morning):

• Obama's Supreme Court Losing Streak: 0-3 in Property Rights Cases - Damon Root at Reason.

• Supreme Court Declines to Hear Appeal Challenging Califonria Laws Allowing Unions to Picket on Private Property - Brennan Bolt at Labor Relations Today.

• The New Proposal in a Fed Report That Involves Eminent Domain and the Government Seizing Mortgages - Becket Adams at The Blaze. 

• The Fed's Eminent Mistake - The Wall St. Journal.

New Cert Petition: Do Pre-Purchase Regulations Negate A Property Owner's Expectations?

Here's the cert petition filed last week which asks the Supreme Court to review the Federal Circuit's unpublished opinion in Mehaffy v. United States (Dec. 10, 2012). In that case, the court affirmed the Court of Federal Claims' grant of summary judgment to the government, holding that Mehaffy failed the Penn Central test solely because he purchased the property alleged to have been taken after the governmentt adopted the Clean Water Act.

The Questions Presented give some additional background:

In 1970, the U.S. Army Corps of Engineers ("Corps") entered into an agreement that gave the Petitioner‘s predecessor in interest, Nomikano, Inc., the right to fill certain wetlands on its property. In exchange, the government obtained a flowage easement over a portion of the property. Petitioner was Secretary-Treasurer of Nomikano and involved in those negotiations. In 2000, Petitioner obtained the property. Subsequently, in 2006, he sought a permit from the Corps to fill certain wetlands in accordance with the agreement. The Corps denied his permit.

The U.S. Court of Appeals for the Federal Circuit held that Petitioner had zero reasonable investment-backed expectations simply because he purchased the property after the enactment of the Clean Water Act. 33 U.S.C. § 1521 et seq. The Federal Circuit then concluded that this, by itself, constituted a sufficient regulatory takings analysis, and affirmed the district court‘s dismissal of Petitioner‘s claims.

In Palazzolo v. Rhode Island, 533 U.S. 606 (2001), this Court uniformly rejected the categorical rule that "postenactment purchasers cannot challenge a regulation under the Takings Clause." Id. at 626.

The questions presented are:

1.  Can lower courts bypass Palazzolo and insert a new categorical rule to the Takings Clause that regulations existing prior to acquisition of land solely and entirely negate the reasonable investment-backed expectations of a landowner; and

2.  Can lower courts, in the land use regulatory takings context, ignore the holistic, multifactored balancing inquiry demanded in Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978), and decide a case on a single factor?

The lower courts have applied (or, in some cases, have not applied) Palazzolo in a decidedly uneven manner. Some take the Supreme Court at its word, and conclude that pre-existing regulations do not cut off a takings claim. Others view pre-acquisition regulations as part of the "background principles" which inhere in titile under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). Under this theory, a post-regulation purchaser does not possess Constitutionally-recognized "property," and thus could not assert a takings claim. See, e.g., CRV Enters. v. United States, 86 Fed. Cl. 758 (2009) (plaintiff did not own the property at the time of the taking and thus did not have a "valid property interest" entitling it to compensation), aff’d,  626 F.3d 1241 (Fed. Cir. 2010); Huntleigh USA Corp. v. United States, 525 F.3d 1270, 1377 (Fed. Cir. 2008); Bair v. United States, 515 F.3d 1323, 1327 (Fed. Cir. 2008); Cienega Gardens v. United States, 331 F.3d 1219, 1328 (Fed. Cir. 2003). Even the Federal Circuit does not apply this rule uniformly, however. See, for example, Schooner Harbor Ventures, Inc. v. United States, 569 F.3d 1359 (Fed. Cir. 2009), in which the court applied the Palazzolo rule more faithfully, concluding that a preexisting regulation was not a categorical bar to a takings claim, but "is a factor that may be considered, depending on the circumstances," and that the Supreme Court "reject[ed] the argument that one who acquires title after the relevant regulation was enacted could never bring a takings claim." Id. at 1366.

Other courts apply the same analysis as Mehaffy, holding that regulations predating acquistion as destroying investment-backed expectations, obviating the need to consider the economic impact of the regulation, or the character of the government action. These courts transform the investment-backed expectations factor into the dispositive consideration, despite the Supreme Court’s caution that no Penn Central factor is entitled to conclusive weight. Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 539 (2005). 

For more cases illustrating the lower court split, see this brief which we filed in another case (cert denied) that challenged the Ninth Circuit's failure to apply to Palazzolo rule.

We will be following Mehaffy, so stay tuned. Here's the Court's docket entry.

Petition for a Writ of Certiorari, Mehaffy v. United States, No. 12-1416 (June 3, 2013)

Unanimous SCOTUS: There's More To The Takings Clause Than Just "Just Compensation"

Having now had a chance to review in detail the U.S. Supreme Court's unanimous opinion in Horne v. U.S. Dep't of Agriculture, No. 12-123 (June 10, 2013), we were struck by how at least one of the reactions to the decision painted it as a "narrow, specialized ruling" that's more of a one-off, than a case with lasting impact. Maybe this is a natural result of the case being argued last of the three takings cases the Court considered this term. Or because it involves what Justice Kagan characterized at oral arguments as possibly "the world's most outdated law." Or because there are several very high-profile cases on the Court's docket that everyone's anticipating. Or maybe just because it's about raisins.

California raisins. 

But we respectfully dissent from the viewpoint that sees Horne as the least important and interesting of the 2013 Takings trilogy, or a case that's just about raisins and obscure, labyrinthian federal regulatory schemes. On the contrary, we think it's a very important case, and here's why.

Let's start with what we think is the critical "take away" from Justice Thomas's opinion for the Court: a "takings" claim can be more than simply a claim for "just compensation." The main thrust of the Ninth Circuit's decision and the USDA's arguments in the Supreme Court was that the Hornes could not raise their affirmative defense that the USDA is prohibited from imposing the fines and penalties under the Agricultural Marketing Agreement Act of 1937 because doing so would violate the Takings Clause. As we noted in our preview of the case, it has become increasingly common to assume that the only remedy for a "takings" claim is the payment of just compensation. Horne instructs otherwise.

The Ninth Circuit concluded it lacked jurisdiction over this defense because "takings" claims seek to recover compensation, and the only court with jurisdiction to enter an award of just compensation against the federal government is the Court of Federal Claims. In the Ninth Circuit's and the government's view, the ripeness rules of Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985) meant the takings defense was premature, and  the only procedure available was for the Hornes to pay the fines and penalties in the district court enforcement action, and then file a separate takings lawsuit in the CFC to get the money back, even if that meant the Horne's check to pay the penalties and the government's check for just compensation would figuratively cross in the mail.

The Court rejected the argument and this redundant process, holding that the Hornes could raise the takings defense in the district court.  The AMAA contains a "comprehensive remedial scheme" which allows handlers to raise -- indeed, it may require them to raise --  any challenge to a marketing order in the district court challenge to the administrative determination:

Pursuant to §§608c(15)(A)–(B), a handler may file with the Secretary a direct challenge to a marketing order and its applicability to him. We have held that "any handler" subject to a marketing order must raise any challenges to the order, including constitutional challenges, in administrative proceedings. See United States v. Ruzicka, 329 U. S. 287, 294 (1946). Once the Secretary issues a ruling, the federal district court where the "handler is an inhabitant, or has his principal place of business" is "vested with jurisdiction . . . to review [the] ruling." 8 §608c(15)(B). These statutory provisions afford handlers a ready avenue to bring takings claim against the USDA. We thus conclude that the AMAA withdraws Tucker Act jurisdiction over petitioners’ takings claim. Petitioners (as handlers) have no alternative remedy, and their takings claim was not "premature" when presented to the Ninth Circuit.

Slip op. at 13-14 (emphasis added) (footnote omitted).

We emphasize the "must raise" language because we think that it really isn't an option. If you have takings arguments and are on the business end of an enforcement action, you really better raise them in the district court, or risk losing them. Because under preclusion principles, if you have claim and don't raise it, you well may be barred from raising it in a subsequent proceeding in the CFC. So here's what we suggest you consider: make your takings defenses in the district court, file your lawsuit in the CFC for just compensation to prevent the statute of limitations from running on you, then ask to stay the CFC action while you litigate the takings issues in district court. The CFC action may eventually be moot (i.e., if you win the district court claim, you'd have no need to pursue compensation, and conversely, if you were to lose your district court takings claim, you would be barred by issue preclusion from relitigating it), but given the state of takings law these days and the propensity for the lower courts to misunderstand things, it's better to preserve all of your options. See also slip op. at 13-15, where the Court held that in the AMAA, Congress "withdrew" Tucker Act jurisdiction. 

[Update: thanks to an astute reader for pointing out something we should have: you should file your CFC action first, before asserting your takings defense in the district court, to avoid the Tohono trap and the "has pending" language in 28 U.S.C. § 1500. We should have pointed this out since we filed a brief in Tohono on this very point. By the way, did you read our disclaimer?]

Thus, we think that Horne clarifies another unanimous Supreme Court takings opinion, Lingle v. Chevron USA, Inc., 844 U.S. 528 (2005), which concluded that takings actions are "designed not to limit the governmental interference with property rights per se, but rather to secure compensation in the event of an otherwise proper interference amounting to a taking." Id. at 536 (citing First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 314, 315 (1987) (emphasis original)). After Lingle, we heard more and more the idea that the Fifth Amendment only requires compensation when the government has taken property (either affirmatively, or de facto), which ignored the fact that it also is an affirmative limitation on the power of the government to undertake actions that take property without first condemning and paying compensation. 

Horne's conclusion is really nothing new, because the district courts and regional circuits have long considered "takings" issues, just not cases in which compensation is sought as a remedy. See, e.g., Kaiser Aetna v. United States, 444 U.S. 164 (1979) (property owner raised argument in district court and Ninth Circuit that the imposition of a navigational servitude on a private marina would be a taking, and could not be accomplished unless the government first condemned and paid compensation).The Court in that case agreed, and wasn't bothered by the fact that the owner did not seek compensation. See id. at 180 ("if the Government wishes to make what was formerly Kuapa Pond into a public aquatic park after petitioners have proceeded as far as they have here, it may not, without invoking its eminent domain power and paying just compensation, require them to allow free access to the dredged pond"). But even though this is what we always believed the state of affairs was, it is nice to see a unanimous Supreme Court agree. 

The Court ended the opinion by holding that that under the rationale of the plurality opinion in Eastern Enterprises v. Apfel, 524 U.S. 498 (1998), in the AMAA, Congress withdrew Tucker Act jurisdiction over the takings claim, freeing up those like the Hornes who are on the target end of similar regulatory schemes to object on takings grounds. The AMAA is a comprehensive statutory scheme (if you're in doubt see here) that "does not bar handlers from raising constitutional defesnese to the USDA's enforcement action." Slip op. at 14.

Finally some other thoughts:

• What was the property alleged to have been taken? This was a point of confusion sowed by the government and its amici (the raisins? the money?) which the Court resolved in the first page: "Petitioners sought judicial reivew, claiming that the monetary sanctions were an unconstitutional taking of private property." Slip op. at 1. The Court assumed that money is property, or at least didn't say it wasn't. Does this tell us something about how the Court might rule in Koontz?

• It looks like the Court -- or at least some of the Justices, and certainly the Chief Justice -- is losing patience with arguments in these cases where it looks like the government is playing games. At oral argument, the Chief pointedly questioned the government's counsel, and appeared irritated at its tactics ("I have to say -- I think it comes with less than good grace for you to criticize the other side for not having raised a particular argument."). Arguments designed to avoid the merits of takings cases that are too clever by half may work in certain lower courts, but perhaps the Supreme Court is growing tired of them, especially when they come from the Ninth Circuit, and particularly from judges known for their agendas. Two takings cases against the federal government this term, and both have been unanimous. Think that's mere happenstance?

• What to make of footnote 3, in which the Court wrote: "The Hornes wrote the Secretary and to the RAC in 2002 setting out their grievances: "[W]e are growers that will pack and market our raisins. We reserve our rights under the Constitution of the United States . . . [T]he Marketing Order Regulating Raisins has become a tool for grower bankruptcy, poverty, and involuntary servitude. The Marketing Order Regulating Raisins is a complete failure for growers, handlers, and the USDA . . . [W]e will not relinquish ownership of our crop. We put forth the money and effort to grow it, not the Raisin Administrative Committee. This is America, not a communist state.” App. to Pet. for Cert. 60a." Slip op. at 5 n.3. We wonder which Justice stuck that note there.

• While the Court neither revisited nor expressly revised Williamson County, it may be open to doing so in another case, as four Justices noted in their concurring opinion in San Remo.

As noted by Lyle Denniston in his SCOTUSblog summary "Opinion recap: Much more than raisins?," "reading between the lines" of Horne "would seem to be a signal that a wide array of businessess that live under government regulatory regimes will be able to bring constitutional 'takings' claims in response to the assessment of fines or civil penalties for disobeying those regimes." We also think that in addition to waiting for the enforcement action, a property owner may intstitute an affirmative declaratory action to resolve the issue, if the situation is concrete enought to present a case and controversy.

We shall see whether the lower courts see this clearly, or, like some courts' reaction to the Court's unanimous Arkansas Game and Fish ruling, look for ways to read Horne as narrowly as possible.

Raisin Round-Up: Initial Reports On Horne v. USDA

We haven't had time to write up our thoughts about today's unanimous Supreme Court opinion in Horne v. U.S. Dep't of Agriculture, No. 12-123, but to tide you over until then, here are the initial reports on the case:

• Update: here's our thoughts on Horne.
  

• Does the Supreme Court's "raisin" case foreshadow the Koontz decision? - Brian Hodges, PLF Liberty Blog.

• About Those California Raisins ... - Gideon Kanner, Gideon's Trumpet.

• A Modest But Potentially Significant Supreme Court Victory for Property Rights - Ilya Somin at Volokh.

• Opinion recap: Much more than raisins? - Lyle Denniston at SCOTUSblog.

• Supreme Court orders new hearing for California raisin farmers - David Savage, LA Times.

• Horne Fails to Squeeze the Juice out of Williamson County Ripeness Doctrine - J. David Breemer, PLF Liberty Blog.

• Government's Legal Arguments Shrivel on the Vine - Ilya Shapiro at Cato. 

• Court Reverses Ninth Circuit Raisin Takings Clause Opinion - Professor Ruthann Robson, Constitutional Law Prof Blog,

• Justices kick raisin farmer's takings claim back to appeals court - Jeremy Jacobs, Greenwire.

• Unanimous Supreme Court Allows Raisin Farmers to Challenge New Deal-Era Farm Control Law - Damon Root, Reason.

• Supreme Court: California raisin growers can challenge marketing rules - Michael Doyle, McClatchy.

• The Government's Raisin Brand - Wall St. Journal (subscription may be required).

As more come it, we'll add them.

LA's Reply Brief In SCOTUS Homeless Property Case

As we mentioned yesterday when we posted the Brief in Opposition, here's the Reply Brief of Petitioner (the City of Los Angeles) in City of Los Angeles v. Lavan, No 12-1073 (cert. petition filed Feb. 28, 2013), the case in which the Ninth Circuit in a 2-1 panel decision held that the city could not presume that property owned by homeless people in the Skid Row area was abandoned, and enjoined the city from seizing and destroying it when the owner was "momentarily away" from it.

The Reply Brief focuss on the circuit-wide impact of the Ninth Circuit's ruling:

The problem is that while the district court’s preliminary injunction may have been limited in scope to the Skid Row area and may have been responsive to such a confined set of facts, the rule of law set forth in the published Lavan opinion is not. The opinion is not limited to the homeless population, or to the geographic area of Skid Row, or to neatly packed shopping carts, or to items that are only momentarily unattended.

Rather, the rule of law set forth by the Lavan opinion broadly applies to unattended personal property left on any public property in the entire Ninth Circuit, no matter to whom it belongs, no matter whether it is in a tidy package or an overflowing strand of shopping carts, or whether it has been there five minutes or five days. The Ninth Circuit held that these personal effects left unattended on public property are constitutionally protected and that when City employees remove and dispose of these unattended items during a cleaning operation, the City commits an unreasonable seizure in violation of the Fourth Amendment and deprives the owner of procedural due process in violation of the Fourteenth Amendment.

Reply at 1-2.

Read the whole brief if this is one of your issues. Won't take much time -- it's well-done and only 11 pages.

Petitioner's Reply Brief, City of Los Angeles v. Lavan, No. 12-1073 (June 3, 2013)

Brief In Opposition In SCOTUS Homeless Property Case

Here's the Brief in Opposition filed recently in City of Los Angeles v. Lavan, No 12-1073 (cert. petition filed Feb. 28, 2013), the case in which the Ninth Circuit in a 2-1 panel decision held that the city could not presume that property owned by homeless people in the Skid Row area was abandoned, and enjoined the city from seizing and destroying it when the owner was "momentarily away" from it.

Hawaii connection: The petiton pointed out a federal lawsuit filed in December 2012 alleging that the City and County of Honolulu violated the due process rights of "De-Occupy Honolulu" members (those folks who are still camping on the sidewalk next to Thomas Square across Beretania from the Honolulu Museum of Art). As noted here, we didn't think that Lavan would have a direct impact on Honolulu's "stored property" ordinance, or the more recently-adopted ordinance to deal with personal property in public spaces, but maybe we were wrong. We'll see. 

The cert petition detailed the conditions in the Skid Row area that purportedly resulted from the injunction, and it made it sound pretty awful. Lavan's BIO naturally does not focus on that, but rephrases the Question Presented:

Did the district court err when it issued a preliminary injunction preventing the City of Los Angeles from immediately destroying the momentarily unattended property of homeless persons without adequate notice or any post-deprivation hearing opportunity in the absence of adequate evidence that doing so is required to maintain any proffered government interest and in the absence of evidence that such property was abandoned, where state law recognizes a property interest in all tangible personal property and imposes a mandatory obligation to preserve unattended property?

The International Municipal Lawyers Association filed an amicus brief supporting the petition, which is posted here. The case is on the Court's calendar for the June 20, 2013 conference.

Stay tuned, tomorrow we will post the City's Reply Brief.

Brief in Opposition, City of Los Angeles v. Lavan, No. 12-1073 (May 24, 2013)

A Visit To Drake's Bay Oyster Farm, Epicenter Of A California Food Fight

When we originally posted about Drake's Bay Oyster Co. v. Salazar, No. 13-15227, an appeal now awaiting the Ninth Circuit's ruling (oral argument video here, key briefs here), we knew further research on the issue was in order, perhaps by making a site visit. Yesterday, we had the opportunity to do just that, and ascertain for ourselves whether there's room in the environmental community for what appears to be a pretty "green" business. As some of you know, I've been waylaid for the past few weeks, and it was the first day in many that I felt up to taking a field trip.

So off to Drake's Bay it was. Following are some photos, as well as a short video showing the processing line, and a longer video with background on the issues. 

Here is our initial post on the case with the complaint, and our follow up (about one of the amicus briefs filed by parties with impeccable environmental credentials). For a more personal side to this story, read this op-ed in today's Marin Independent Journal by one of the farm's long-time employees.

The small farm is tucked into a corner of one of the fingers of Drake's Estero.

The operation is pretty modest: a landing for the boat, a processing line,
a retail counter, and a couple of residences.

 

View towards the mouth of the Estero.

Baskets of harvested oysters.

 

Bird's-eye view of the Estero and beyond, from Mt. Vision Road.

 

The road to Pt. Reyes is lined with these signs.

The irony. Unfortunately, a bridge en route to the farm now
bears "environmental" graffiti as well.

 

Here's a short video of the processing line.
The only sound you hear is the wind, which is pretty loud. We lowered the volume on this video about 90%, which gives you an idea of the actual volume. High-definition video here.

The Framing of an Oyster Farm - Drake's Bay Oyster Company from A Visual Record on Vimeo.

An excellent video linked from the Oysterzone blog
(which also has posted all of the legal briefs in this case).

Final Briefs In Arkansas Game Remand (Flooding As A Taking)

Here are the latest (and last, presumably) briefs in the Arkansas Game & Fish Commission v. United States case, now in the Federal Circuit after remand by the U.S. Supreme Court. The Court earlier reversed the Federal Circuit's conclusion that government-induced flooding could not be a taking unless it was "permanent," and remanded the case to the Federal Circuit for more.

The Federal Circuit ordered supplemental briefing, with each party filing a brief simultaneously (initial briefs posted here), and now these, their respective briefs responding to the initial briefs:

• Plaintiff's Response Brief
  

• Response Brief of the United States

We'll bring you more when and if the court schedules arguments, or when it issues a decision.

Response Brief on Remand of Plaintiff-Cross Appellant Arkansas Game & Fish Commission, Arkansas Game an...

Supplemental Response Brief of the United States, Arkansas Game and Fish Comm'n v. United States, No. 2009-...

Audio Of HSBA Appellate Section CLE On Amicus Briefing

Earlier this week, I spoke to the Hawaii State Bar Association's Appellate Law Section about amicus briefing, along with Daniel Gluck, Senior Staff Attorney at ACLU Hawaii.

I appeared by videoconference, and we were able to record my remarks. The handout and links I mention are posted here.

Stream it here:

HSBA-appellate-amicus-briefing-thomas-5-2013

Or download it here (right-click, "save as" - 27 minutes, 12mb mp3)

New Law Review Article, "The Upside of Losing," Focuses On Kelo

Here's one that might make you feel better, particularly if you end up drawing the short straw in litigation: in The Upside of Losing, 113 Colum. L. Rev. 817 (2013), Professor Ben Depoorter writes about how winning may not be the "only thing" in public interest litigation.

Of particular interest to the readers of this blog is the section that begins on page 831, which focuses on the Kelo case and its aftermath. There's one where the litigant didn't win in the Supreme Court, but the issue jumped to the forefront of the public consciousness:

What first resembled a resounding loss eventually became a victory of a different sort for the opposition to economic development takings. The history of Kelo illustrates that, as much as a plaintiff might hope to win a favorable verdict, substantial benefits also obtain in defeat. Fundamentally, Kelo and its aftermath suggest that certain disputes are worth litigating even if there is only a low ex ante probability of obtaining success in court. The history of Kelo illustrates that plaintiffs, as much as they might hope to obtain a favorable verdict, recognize that substantial benefits might accrue in defeat.90 It suggests that, if litigation has the potential to put into motion social and political support, certain disputes are worth litigating for the plaintiff, win or lose.

As has been recognized in the literature on social movements, litigation can play a unique role in stimulating public discussion. As one commentator described it, "a 20-page complaint and a temporary injunction are worth more than a 300-page report in the media."

Id. at 832-33 (footnotes omitted).

Forgive us for being a bit skeptical, but it takes an academic to think like this. In our experience, clients hire lawyers in order to win their case, even in public interest litigation. So while "the opposition to economic development takings" can appreciate the current state of affairs, it's probably only of scant solace to the former property owners in the Fort Trumbull neighborhood that their Supreme Court loss resulted in the raising of awareness, and legislative and judicial corrections. Does "I feel like the Constitution failed me" sound like someone who is ok with the decision, even 8 years later? Not to us. They'd probably rather have their homes. Thus, Depoorter's advice to always look on the bright side of life rings hollow to us because it focuses more on the cause than the client.

Even with that caveat, however, the essay is worth reading, if only to maybe find a a silver lining in the result of your latest courtroom escapade.

Materials And Links From Today's HSBA Appellate Section CLE On Amicus Briefing

Here is the handout (2 pages) from today's CLE program on Amicus Briefing, sponsored by the Hawaii State Bar Association's Appellate Law Section.

Links to the briefs mentioned are also posted here.

Update: here's the audio of my remarks.

Amicus Briefing - Hawaii State Bar Association, Appellate Law Section - CLE 5-20-2013

HSBA Appellate Section: Amicus Briefing

On Monday, May 20, 2013, I'll be speaking at the Hawaii State Bar Association's Appellate Law Section's monthly meeting, on "Amicus Briefing."

Sorry for the short notice, but I am a last-minute substitution since one of the original panelists, retired Hawaii Supreme Court Justice Steven Levinson, is under the weather and cannot attend. The other panelist is Daniel Gluck, a Senior Staff Attorney with ACLU Hawaii. Should be a fun and interesting discussion.

In my portion of the program, I'll be discussing the how's and why's, the do's and don't's of amicus participation in state and federal courts, with an emphasis on U.S. and Hawaii Supreme Court practice. We'll also be entertaining questions from the audience.

Because this is a late-hour pinch hit and I am on the road, I'll be appearing by video conference. Should make it even more interesting. For those of you who cannot attend in-person at the HSBA downtown Honolulu offices, we'll be using Gotomeeting, so maybe you can join in that way. Contact Appellate Law Section Chair Rebecca Copeland for more.

USA's BIO In Western Water Rights Takings Case

Here's the BIO recently filed by the United States in Estate of Hage v. United States, No. 12-918 (cert. petition filed Jan. 17, 2013). This brief responds to the cert petition which seeks Supreme Court review of Estate of Hage v. United States, 687 F.3d 1281 (Fed. Cir. 2012).

In that case, the Federal Circuit held that a 22-year old takings case was not ripe because even though the agency denied Hage's every application for a grazing permit, it might issue a special use permit that might allow the use of the water he alleges was taken. The issue in the case is whether it is a taking for the government to cut off physical access to a property owner's vested right to use water. The Court of Federal Claims had awarded $4.2 million in just compensation for the taking of Hage's water rights.

The BIO reformulates the Question Presented:

1. Whether the court of appeals correctly rejected petitioners' claim that the government effected a taking of their water rights, including their easements to operate and maintain certain ditches across federal lands, because petitioners never sought (and thus were not denied) the permit required to bring and operate heavy equipment on National Forest Service lands.

2. Whether the court of appeals correctly held that petitioners' claim that the government effected a taking of their stockwater rights failed because the trial record lacked evidence that petitioners were deprived of access to any water they could have put to beneficial use.

Several amicus briefs were filed in support of the petitioners:

• Brief of Pacific Legal Foundation and the U.S. Cattlemen's Association

• Brief of the Mountain States Legal Foundation

• Brief of Public Lands Council, National Cattlemen's Beef Association, Oregon Cattlemen's Association, Washington Cattlemen's Association, and Nevada Cattlemen's Association

Here is the Court's docket report if you'd like to follow along.

Brief for the United States in Opposition, Estate of Hage v. United States, No. 12-918 (May 13, 2013)

HAWSCT Oral Argument Preview: More On The "Private Attorney General" Fee-Shifting Doctrine

Tomrrow morning (Thursday, May 16, 2013), at 9:00 a.m., the Hawaii Supreme Court will hear oral arguments in Aloha Tower Dev. Corp. v. State of Hawaii, No. SCWC-30484, in which the court is reviewing the opinion of the Intermediate Court of Appeals which held that a party was not entitled to recover attorneys fees under the "private attorney general" doctrine because the public policy vindicated by its arguments were not strong, and because the City and County of Honolulu joined the case on the same side. We summarized the ICA's opinion here.

The Supreme Court accepted cert on May 1, 2013, just over two weeks ago. Here are the cert-stage briefs (hat tip to colleague Rebecca Copeland):

• Petitioner Scenic Hawaii, Inc.'s Application for a Writ of Certiorari

• Aloha Tower Development Corporations Opposition to Application for Writ of Certiorari

• Petitioner Scenic Hawaii, Inc.'s Reply to Aloha Tower Development Corporation's Opposition to Application for Writ of Certiorari Filed April 3, 2013

The cert application phrases the Question Presented as follows:

Whether the Intermediate Court of Appeals ("ICA") gravely erred in holding that the Land Court abused its discretion by awarding Scenic Hawai‘i its attorneys’ fees and costs under the Private Attorney General Doctrine ("PAGD"). The Land Court did not abuse its discretion because it followed the precedent established by this court in Sierra Club v. Dep’t of Transp. of State of Hawai‘i, 120 Hawai‘i 181, 202 P.3d 1226 (2009) ("Sierra Club II"), and it satisfied all three prongs of the Private Attorney General Doctrine ("PAGD"). The Land Court ruled properly especially in light of the actions of the State and its Attorney General in not only completely abandoning its duty under Haw. Rev. Stat. § 206J-6(c), to preserve Irwin Memorial Park, but in driving the Petition which would have destroyed the Park. But for Scenic Hawai‘i’s intervention, the success in vindicating the public interest would have been problematic.

Here's the description of the appeal from the Judiciary web site:

Respondent Aloha Tower Development Corporation filed a Petition to expunge certain restrictive covenants in the deed and trust agreement governing the use and maintenance of Irwin Park, which is located near Honolulu Harbor. Petitioner Scenic Hawai`i, Inc. intervened in the subsequent litigation in order to preserve Irwin Park as a public park, taking the position that the restrictive covenants should not be expunged. After a bench trial, the court denied the Petition.

At the conclusion of litigation, Scenic Hawaiʻi sought attorneys’ fees and costs for its involvement in the litigation, as against Aloha Tower Development Corporation. The court granted attorneys’ fees and costs to Scenic Hawai`i under the private attorney general doctrine. Aloha Tower Development Corporation appealed to the Intermediate Court of Appeals (ICA), arguing that Scenic Hawai`i was not entitled to attorneys’ fees and costs because the court had improperly applied the private attorney general doctrine.

The ICA overturned the court’s award of fees and costs, holding that Scenic Hawai`i had not satisfied all three of the relevant factors of the private attorney general doctrine. In its Application, Scenic Hawaiʻi asks whether the ICA erred in concluding that Scenic Hawai`i did not satisfy the doctrine because it was not advocating for the public interest in the underlying litigation, and that there was no necessity for private enforcement of the public interest in this case.

The issue in this case is slightly different than presented in the court's most recent ruling about the private attorney general doctrine, as this appeal only involves the first two of the three private attorney general factors, and involves appellate and not de novo review of a claim for fees (the other case involved a party who prevailed on appeal, and thus the court was evaluating the application for fees as a matter of first instance, and not, as here, the question of whether the ICA committed "grave error" when it held that the Land Court abused its discretion when it allowed fees). 

Why all of this interest by the court in the private attorney general doctrine lately? We don't know, but the more clarification about what the doctrine means and how to apply it, the better.

More, after the court issues a ruling.

Oral Argument Video In Ninth Circuit Oyster Beef

Here's the video of today's Ninth Circuit oral arguments in Drake's Bay Oyster Co. v. Jewell, the case about an oyster farm in Marin County's Point Reyes National Seashore, and Interior Secretary Ken Salazar's decision to not renew its license. The Ninth Circuit has posted the briefs of the parties and amici here.

Here's our initial post on the case, and here's our follow up (about one of the amicus briefs).

Here's a plain language preview of the issues and the arguments. 

Predictions? It seems to us that two of the judges are skeptical of the farm's arguments, and one may be inclined to agree, but there was nothing we saw on the video that would lead us to think the outcome is obvious.

One More Amicus Brief In Railbanking Case: Growing And Well-Documented Circuit Split

Here's the third and final amicus brief supporting the petitioner in Marvin M. Brandt Revocable Trust v. United States, No. 12-1173 (cert. petition filed Mar. 22, 2013). The Pacific Legal Foundation brief argues:

This case raises important questions regarding the common law of property ownership and the certainty of titles in property.

. . . .

As fully set out in the Petition, the Tenth Circuit’s rule directly conflicts with decisions of this Court as well as decisions from the Federal Circuit, the Court of Federal Claims, and the Seventh Circuit. Pet. at 17-34. The split of authority regarding ownership of abandoned railroad rights-of-way has been growing for years, and is well-documented. See, e.g., Pet. Cert. App. at 5-6, 22-24 (discussing split of authority); Hash v. United States, 403 F.3d 1308, 1318 (Fed. Cir. 2005) (same); 11 Powell on Real Property § 78A (referring to the existing split of authority as a "mess [that] is not entirely fixed" and in need of "thorough analysis"); Roger Cunningham, et al., The Law of Property § 8.9, p. 460 (2d ed. 1993) (decisions concerning railroad rights-of-way "are in considerable disarray"). Amicus PLF urges the Court to grant the Petition to resolve this conflict, especially because the Tenth Circuit’s rule departs from ordinary understandings of property ownership.  ... If left unreviewed, the decision below will unsettle the rights and expectations of thousands of property owners within the Circuit and nationwide.

Br. at 2-3.

The brief by the Cato Institute and the National Association of Reversionary Property Owners is posted here, and the brief we filed on behalf of Owners' Counsel of America is here. The cert petition is posted here.

Brief Amicus Curiae of Pacific Legal Foundation in Support of Petition for Writ of Certiorari, Marvin M. Br...

Amicus Brief In Railbanking Case: Circuit Split May Upset Title To Millions Of Acres

Here's the amici brief of the Cato Institute and the National Association of Reversionary Property Owners supporting the petitioners in Marvin M. Brandt Revocable Trust v. United States, No. 12-1173 (cert. petition filed Mar. 22, 2013).

In that case, the Tenth Circuit's opinion held that the term railroad "right of way" as used in an 1875 federal statute was a grant of land to railroads in fee simple with an "implied reversionary interest" to the United States, and not merely an easement. The difference is that easements may be extinguished, while reversionary interests are not. In this case, the railway abandoned its use, after which the federal government instituted a quiet title action in federal court claiming it and and not Brandt owned the right of way.

The amici brief argues:

This case is important to the Association because the Tenth Circuit’s decision unsettles long-established property interests and clouds the title of many landowners whose property is (or was) encumbered by a railroad right-of-way easement established under the General Railroad Right-of-Way Act of 1875, 43 U.S.C. 934-939 ("1875 Act"). And because the Tenth Circuit’s split from the holding of the Seventh and Federal Circuits, resolution of title disputes will be more costly and time-consuming.

We filed an amicus brief in the case also. Here's the cert petition.

More, including the BIO, when filed.

Brief for the Cato Institute and the National Association of Reversionary Property Owners as Amici Curiae i...

Amicus Brief In Rails-to-Trails Case: Switching Tracks To Undermine Takings Claims

Here's the amicus brief we filed today on behalf of our colleagues at Owners' Counsel of America, urging the U.S. Supreme Court to grant cert in Marvin M. Brandt Revocable Trust v. United States, No. 12-1173 (cert. petition filed Mar. 22, 2013).

That petition asks the Court to review a Tenth Circuit decision that continued a lower court split about the meaning of the term railroad "right of way" as used in an 1875 federal statute and federal land patents subject to the 1875 Act. The issue is whether the federal government retained an "implied reversionary interest" when it issued these patents, or whether these grants were subject only to a railroad easement. The difference is that easements may be extinguished, while reversionary interests cannot. In this case, the railway abandoned its use, after which the federal government instituted a quiet title action in federal court asserting it owned the right of way, and that it did not revert to Brandt.

Our brief argues that this is an attempt to undercut takings claims in which the plaintiff's rights are based on a patent subject to the 1875 Act, since the Government's track record in the Court of Federal Claims and the Federal Circuit isn't very good.

Here's the Summary of Argument from the brief:

Unable to prevail on a variety of theories in rails-to-trails takings cases in the Federal Circuit and the Court of Federal Claims (CFC) for more than a decade, the Government appears to have switched tracks. Instead of continuing its fruitless frontal attacks on these takings claims—efforts that repeatedly have been rebuffed by the courts—the Government in this case has sought to undermine the very notion of property by redefining the “rights of way” granted for railway uses under the 1875 Act from easements that are extinguished when no longer used for a railroad, to “implied reversionary interests.”

This brief makes two points. First, the Government’s strategy to redefine property rights based on the 1875 Act will virtually wipe out an entire class of takings claims without justification. Second, this Court’s decision in Great Northern Ry. Co. v. United States, 315 U.S. 262 (1942)—holding that 1875 Act rights of way are easements—is supported by the common law definition of “right of way” prevailing at the time that the 1875 Act was adopted. In the absence of evidence of contrary intent, statutory terms used by Congress should be interpreted as having the meaning commonly assigned to them at the time. This case presents the Court with the opportunity to provide definitive guidance that terms in a federal statute that are not defined by Congress are not wholly malleable, and OCA respectfully asks this Court to review the important issues raised in the petition.

Br. at 4.

There will be other amicus briefs, and we'll post those as they become available. With a clear circuit split and the attendant weird result (two similarly-situated landowners could have entirely different rights, depending on whether their land is in the Tenth Circuit, or elsewhere), we think there's a good chance this case will catch the Court's attention.

Brief Amicus Curiae of Owners' Counsel of America in Support of Petitioners, Brandt v. United States, No. 1...

The Ninth Circuit Botches Regulatory Takings Again

When reading the Ninth Circuit's latest foray into the regulatory takings doctrine which holds that a muncipal rent control ordinance did not qualify under Penn Central (MHC Financing Ltd P'ship v. City of San Rafael, No. 07-15983 (Apr. 17, 2013), we were reminded of the opening line in Andy Williams' signature tune "Love Story" --

"Where do I begin ..."

But before we begin, two preliminary thoughts. First, the district court's decision finding that San Rafael's mobile home rent control ordinance worked a taking of the mobilehome park owner's property because it reduced the value by more than 80% was not some one-off aberration by a conservative district judge out on a lark. No, the decision was by the now-retired Vaughn R. Walker, the same judge who invalidated California's Proposition 8 in one of the same-sex marriage cases currently before the Supreme Court. Apparently a proponent of actual judicial review for all constitutional rights, he also found a taking in another case we've covered here, Yamagiwa v. City of Half Moon Bay, No. 05-4149 VRW (Nov. 28, 2007), in which he concluded that the city was liable for $37 million in compensation.

Second, San Rafael is not in some backwater, but is the heart of Marin County, which a source no less than Wikipedia tells us "is well known for its natural beauty, liberal politics, and affluence" (they forgot to mention hot tubs). San Rafael is the place where Frank Lloyd Wright designed the county courthouse, and is up the street from Tiburon and just south of George Lucas' broken dream of expanding his Lucasfilm studio. In other words, you need some serious coin to live in Marin County. Indeed, the property at issue in this case is no "trailer park" but is quite tony and just a stone's throw from Skywalker Ranch.

But the city fathers and mothers apparently thought it important to insure that owners of mobile homes could enjoy the bounty that Marin County has to offer. So they adopted a rent control ordinance in 1989, amended it in 1993, and then in 1999 amended it yet again. We'll leave it to you to read the ordinance in its entirety, but here's the short version. The ordinance initally tied the park owner's ability to increase the ground rent to the CPI, with a sliding scale. The 1993 amendment added vacancy control which gave the mobile home owner the ability to transfer the lower-than-market rent to the purchaser of a mobile home. The 1999 amendment removed the sliding scale, and all pad rent increases are limited to 75% of CPI.

The rent-control-as-a-taking issue has been before the Ninth Circuit before with pretty much the same results, most recently in Guggenheim v. City of Goleta, 638 F.3d 1111 (9th Cir.2010) (en banc), cert. denied, 131 S. Ct. 2455 (2011). [Disclosure: in that case, we filed an amicus brief for the Manufactured Housing Institute, arguing the Ninth Circuit was wrong, and that the Supreme Court should grant cert.]. See also this case and this case for more examples of challenges to mobilehome rent control ordinances. 

In MHC, after a bench trial (two, actually) the district court held the ordinance was a taking under Penn Central, but not a due process violation:

"[p]urchasers of mobilehomes in Contempo Marin after the 1999 Amendments have paid a premium reflecting the present value of expected rent savings due to San Rafael rent regulation. This premium averages $67,000 for the right the enjoy the below market regulated rent." Because the premium is being paid to the Contempo Marin mobilehome owners, “the amendments reduced MHC’s revenue streams from Contempo Marin and the value of its property by $10,609,136." The district court also held that "the whole Ordinance reduced MHC’s net operating income by 75 percent and reduced the value of the park from $120 million to $23 million."

Slip op. at 11-12.

The Ninth Circuit, as we mentioned above, reversed. According to the panel, the central fact that made hash of the plaintiff's Penn Central claim was that when it purchased the park in 1993, the original 1989 ordinance had already been adopted.  Thus, analysis of each of the three Penn Central factors results in no taking:

Economic Impact: The property owner didn't suffer a huge economic impact because the district court should only have measured the diminution in value by comparing present market value with the market value of the property at the time of MHC's acquisition, instead of at the time of the amended ordinance. Apparently, the original ordinance had already depressed the market value of the park, and the district court should have measured the economic impact as "only" $10 million, and not $97 million (the value of the park with no rent control at all). See slip op. at 17-18. However, even if measured against the value of the park unencumbered by any ordinance, an 81% reduction in value would not be sufficient according to the court. Slip op. at 18-19. Read that again, to make sure you got it: a transfer of $97 million is not enough. Wow. Maybe this is just Marin County, and you know, a dollar doesn't go as far here as elsewhere.

Investment-backed Expectations: the Ninth Circuit rejected the district court's conclusion the property owner expected that the rent it charged would be set by the market, not by the city. "[T]hat is, MHC's expectation was that Contempo Marin would be subject to no rent control at all." Slip op. at 19. This was not a reasonable expection to the Ninth Circuit because "MHC had even less reason to expect that the rent control regime would disappear altogether." Id. Renting property is a "regulated field," and those who choose to participate in it "cannot object if the legislative scheme is buttressed by subsequent amendments to achieve the legislative end." Slip op. at 19-20. Relying upon the rationale in Guggenheim, the court held this is the "primary factor," and surmised that the "price they paid for the mobile home park doubtless refected the burden of rent control they would have to suffer." Slip op. at 20.

Character of the Government Action: This was not a physical invasion (allowing mobile home owners to occupy space in the park, or a physical taking of the rent premium), but rather a mere adjustment of the benefits and burdens of economic life. In other words, you knew the regulatory environment was harsh when you decided to buy a mobile home park. Slip op. at 22-23.

Some thoughts:

Presuming Expectations. First, the Ninth Circuit reached its conclusions as a matter of law, not because the district court misunderstood the facts. In other words, when you buy property already subject to a regulation that takes property, you simply cannot form investment-backed expectations that you can operate free of the regulation, even if it may be a taking. This was a case where the district court held two trials before concluding that the ordinance was a taking under an "essentially ad hoc, factual inquiry." But even though appellate courts usually defer to a trial court's factual findings, the Ninth Circuit didn't do so because it was simply legally impossible for those expectations to be formed when a restrictive ordinance predates purchase. But aren't someone's "expectations" and how property is priced questions to be decided by the trier of fact and not by appellate judges who surmise about what the price "doubtless" reflected?  Instead, the court substituted its view that it was "doubtless" that MHC's acquisition price for the park was already discounted to account for the rent control regulation. But was there any testimony on this? Even if there was, would it matter to the Ninth Circuit?

Where's Palazzolo? Second, where's the Ninth Circuit's analysis of Palazzolo v. Rhode Island, 533 U.S. 606, 626 (2001), in which the Supreme Court rejected the proposition that "postenactment purchasers cannot challenge a regulation under the Takings Clause[?]" The Ninth Circuit cited that case only in the section of the opinion dealing with ripeness, not in the Penn Central discussion. Our read of Palazzolo is that a property owner's right to make reasonable use of her land does not evaporate simply because restrictive regulations predate her acquisition. Purchasers of property subject to restrictive regulations maintain all of the rights protected by the Fifth Amendment and may assert a takings claim, and regulations do not become part of a parcel’s "background principles" simply because the property is transferred to a new owner. As the Court put it, the government cannot “put an expiration date on the Takings Clause." Id. at 627. The Ninth Circuit doubled down on its Guggenheim rationale, which ignores the above principle.

The Armstrong rationale. Finally, even if a rent control ordinance does not allow another to physically occupy property (we thought that in Yee v. City of Escondido, 503 U.S. 519 (1992) the Court held that rent control was a physical occupation, but that hey, you threw open your property by offering to rent it, so that's on you), the San Rafael ordinance in particular seems designed to effectively create "affordable" housing in Marin County. If so, then isn't MHC being required to provide this public benefit at its own cost, and therefore doesn't the ordinance run up against the central principle of regulatory takings theory? Shouldn't the cost of providing affordable housing be provided by the public as a whole? 

Will this case result in another cert petition challenging rent control as a taking, asking the Supreme Court for clarification on how to apply the Penn Central factors? As Andy Williams sang, "I have no answers now but this much I can say" it should.  

MHC Financing Ltd. P'ship v. City of San Rafael, No. 07-15982 (9th Cir. Apr. 17, 2013)

Federal Appeals: Tips And Hints

Earlier this week, the Hawaii State Bar Association's Appellate Law Section put on a one-hour MCLE session on federal appeals featuring Ninth Circuit Judge Richard Clifton, our Damon Key colleague Mark M. Murakami, and Clare Connors (Davis Levin).

While you can no longer earn MCLE credits (next time, attend in person!), you can take advantage of their tips and hints for how to win that next federal appeal. And most of the information is not limited to Ninth Circuit practice, so the rest of y'all should find benefit also.

Ninth Circuit: No Penn Central Taking In Rent Control Ordinance

This just in: the Ninth Circuit has issued an opinion in MHC Financing Ltd P'ship v. City of San Rafael, No. 07-15983 (Apr. 17, 2013), reversing the District Court's decision that the city's mobilehome rent control ordinance was a taking under Penn Central.

More, after a chance to review the opinion.

MHC Financing Ltd. P'ship v. City of San Rafael, No. 07-15982 (9th Cir. Apr. 17, 2013)

Sorry, Property Owners. Supreme Court Just Not That Into You

When the cert petition was filed in Ilagan v. Ungacta, No. 12-723 (cert. petition filed Dec. 7, 2012), we wrote that the case seemed like a good vehicle for the U.S. Supreme Court to revisit the pretext-in-eminent-domain issue it teased us with in Kelo, especially the part about the taking being part of a "comprehensive" eminent domain plan.

The facts of the case were egregious. The Guam Supreme Court's opinion reversed the trial court's conclusion that the taking was unconstitutional. The Guam Government refused to appeal, leaving only the benefitted private party arguing the taking was valid. The petition was well done and highlighted the lower court split in authority. When the respondent waived a reponse, the Court requested one. The petition was supported with an amici brief authored by lawprof Ilya Somin, a noted scholar on public use issues and joined by other legal scholars and property owner groups [disclosure: us included], and pointed out that the lower court split was genuine and deep.

The big question we had was whether the Court wanted to revisit the issue.

Today, we got our answer. No, it doesn't (see p. 15).

Which leaves us to ask: if not these facts, which facts? If not this case, which one? All we're left concluding is that the Court's majority was so burned by the public's reaction to its opinion in Kelo that it may be a while before four of the Justices are willing to get anywhere near a Public Use case.

Podcast On The Tombstone Federal Lands Access Case

Earlier today, the Supreme Court considered whether to grant review in City of Tombstone v. United States, No. 12-1069 (cert. petition filed Feb. 27, 2013).

The City of Tombstone's cert petition asks whether the city "is likely to succeed on the merits of the claim that the Forest Service violated the Tenth Amendment by ... [impeding] restoration of essential municipal infrastructure during a State of Emergency."

• Here's the amici brief we filed in support of the city.

• Here's the amicus brief by a coalition of Arizona/New Mexico counties. 

While we await next week's order announcing whether the Court will hear the case, here's the Federalist Society's podcast of a recent debate on the issues in the case:

Tombstone, Arizona, calls itself "the town too tough to die," but it’s gone to court to challenge the federal government’s restriction on access to nearby national forest land that the city claims bars it from repairing necessary water supply lines. Without repairing these lines—damaged by recent storms—the city claims it faces the threat of destruction by fire during the state’s long, hot summers. In its lawsuit, which has received national attention, Tombstone claims that the Tenth Amendment prohibits the federal government from using its power over national forest land in ways that would threaten destruction of cities and infringe on ordinary state powers. The Ninth Circuit Court of Appeals ruled against the city in December, but it refused to answer whether "the Tenth Amendment constrains the Forest Service’s authority to regulate Tombstone’s activities under the Property Clause." The Goldwater Institute’s Nick Dranias, who represents the City, and Professor Peter Appel of the University of Georgia School of Law discuss the case on this previously recorded conference call.

Tune in, and stay tuned.

Cert Petition: Texas Liable For A Taking Because It Caused The Feds To Deny A Permit

Here's one that's coming up for the Supreme Court's consideration at its conference next week, but which we haven't noted until now. A Texas property owner has filed this cert petition asking the Court to review the Texas Supreme Court's decision in Hearts Bluff Game Ranch, Inc. v. State of Texas, 381 S.W.3d 486 (Tex. 2012). 

The Texas court held that the ranch did not make out an inverse condemnation claim against the State when it alleged that a state agency's action resulted in a federal agency denying a federal permit. The petition contains a single Question Presented:

Whether state action that purposely prevents a permitted and beneficial use of land by its owner, but undertaken with the intent to reserve that land for a future beneficial State use, requires compensation under the takings clause of the Fifth Amendment.

The Texas Supreme Court held that "[i]t is not prudent to sanction a seventy million dollar demand against the State of Texas for an alleged taking of a property interest when 1) as acknowledged by all parties, the United States Army Corps of Engineers, not the State of Texas, exercised its exclusive authority to deny petitioner's applicaiton for a federal mitigation banking permit on the land[,]" Slip op at. 1.

The short story is that the Ranch purchased land, which lies "within the bounds of the potential Marvin Nichols Reservoir." "Potential" as is not now, but maybe in the future. When the Ranch sought a permit from the Corps, the Corps said no. Because the mitigation bank was located in the potential reservoir. Which resulted in our favorite passage in the court's opinion:

The Corps’ stated reason for denying the application was that the mitigation bank would not exist in perpetuity if the Legislature chose to build the Reservoir. Hearts Bluff then applied for a limited-term mitigation bank permit, but the Corps denied this request because mitigation banks must be perpetual.

Slip op. at 6.

But to us, it seems the issue is not whether the Corps' denial of the permit resulted in a taking, but whether the State's action of creating a "potential" reservoir that encompasses the Ranch's property was a taking. The Ranch was merely ripening its claim by applying for a permit, and once the Corps denied it, the claim against the State was ready. So it's not really important to the State's liability whether the Corps denied the permit or whether the State caused the Corps to do so, since the regulatory action that resulted in devaluing the Ranch's property was the State's designation of the "potential" reservoir.

The petition argues: 

As this Court may have observed, state courts are now using a simple grammatical strategem to avoid even analyzing the substance of a property owner's claims -- they have simply narrowed the definition of "taking" to find in favor of the government. By narrowing the definition of a "taking," state court have avoided engaging in the ad hoc analysis of government action that is constitutionally required by the decisions of this Court. It is no wonder landowners rarely, if ever, prevail on Penn Central claims.

Br. at 3.

Let's see what the Court does next week.

Petition for a Writ of Certiorari, Hearts Bluff Game Ranch, Inc. v. Texas, No. 12-1015 (FEb. 13, 2013)

Amicus Brief In Ninth Circuit Homeless Property Case: No One Has Constitutional Right To Leave Unattended Property On The Street

Here's the amici brief of the International Municipal Lawyers Association and the National League of Cities, which urges the U.S. Supreme Court to review the Ninth Circuit's decision in Lavan v. City of Los Angeles, 693 F.3d 1022 (9th Cir. 2012).

In that case, a 2-1 panel held that the city could not presume that property owned by homeless people in the Skid Row area of downtown was abandoned, and enjoined the city from seizing and destroying it when the owner was "momentarily away" from it.

The city filed a cert petition, arguing that the panel decision resulted in an invasion of vermin and other public health hazards in the area. IMLA's brief argues:

The Ninth Circuit’s Opinion distorts that balancing act and jeopardizes local governments’ ability to act for the benefit of all their citizens. Like other citizens, homeless individuals have a right to use and enjoy the public streets, but no one—homeless or not—has a federal constitutional right to leave items unattended on a public street to the detriment of other citizens, including other homeless individuals. As a practical matter, that is what the Ninth Circuit’s Opinion creates: a right to use public streets as long-term storage facilities in contravention of local law.

....

Local governments need to know when their attempts to create safe and healthy communities may subject them to liability.

....

Under the novel injunction and constitutional analysis here, however, this basic yet essential local government function always presents a Fourth Amendment question. That cannot be correct. Because public sidewalks are not constitutionally protected storage bins, and because a local government’s mere movement of unattended items from this public space does not implicate the Fourth Amendment, this Court should grant the City’s Petition and reverse the Ninth Circuit’s decision.

Br. at 2-4. The respondents waived their right to respond, and the case is on the Supreme Court's conference calendar for April 19, 2013.

Brief of Amici Curiae The International Municipal Lawyers Association and the National League of Cities, Ci...

Another Amicus Brief In Tombstone Case: Property Clause Does Not Trump City's Right To Maintain Right-of-Way

Here's the amicus brief of the Coalition of Arizona/New Mexico Counties for Stable Economic Growth, supporting the petitioner City of Tombstone in City of Tombstone v. United States, No. 12-1069 (cert. petition filed Feb. 27, 2013). [Disclosure:we also filed an amici brief in the case in support of Tombstone.]

The case arose after the combination of a devastating forest fire and later heavy rains laid waste to Tombstone's sources of muncipal water, deep in the Coronado National Forest. As the New York Times reported here:

Tombstone’s water system is as old as the city itself, and most of the parts that are functioning, which are few, were damaged last year by rocks and trees dragged downhill by runoff from the summer monsoons. The city set out to repair the system’s connections to three of the 25 springs to which it claims to have a right; connections to the other springs are inoperable or nonexistent.

Local officials were under the impression that a state of emergency declared because of a wildfire that came before the rains would make things easy. But after weighing the city’s predicament and the precarious state of the forest and its wildlife, Jim M. Upchurch, the forest supervisor at Coronado, issued a split decision: bulldozers and tractors would be allowed in the lowest of the damaged areas to move truck-size boulders that had crashed onto the pipe, but they could not be used elsewhere.

In other words, the U.S. Forest Service ruled that repairs "would have to be done by hand."

The Arizona/New Mexico Counties' amicus brief argues that the Ninth Circuit's decision in this case created a split in authority between it and the Tenth Circuit over the scope of the rights-of-ways granted under an 1866 federal statute which encouraged Americans to settle the West and build and develop the necessary infrastructure to do so such as Tombstone's water supply. The Ninth Circuit in this case held that the federal government, as the fee owner of the National Forest, has vitually unlimited rights to limit Tombstone's repair efforts pursuant to the Property Clause. The Tenth Circuit, on the other hand, treats the federal government in these circumstances as a "normal proprietor under state law, affording the [federal] government the same rights as any servient estate owner in that state." Br. at 15 (citing Southern Utah Wilderness Alliance v. Bureau of Land Management, 425 F.3d 735, 748 (10th Cir. 2005)). The brief also argues that in the Tenth Circuit, the Property Clause is never invoked.

The SG has waived the federal government's right to respond, and the case is set for the Court's conference on April 12, 2013. More to follow.

Brief of Coalition of Arizona/New Mexico Counties for Stable Economic Growth, as Amicus Curiae Supporting P...

Hawaii Supreme Court Justice Sabrina McKenna Interview

Worth watching: Hawaii Reporter's exclusive interview with Associate Justice Sabrina McKenna. No spoilers -- watch it yourself.

Voting Equality vs. Representational Equality - Cert Denied In "One Person, One Vote" Case

This morning, the Supreme Court released the order with the results of last Friday's conference, revealing the Court has declined to review Lepak v. City of Irving, No. 12-777 (petition for cert. filed Dec. 21, 2012). We're covering this issue here because as some of you might recall,  we represent the plaintiffs in a case challenging the 2012 Hawaii Reapportionment Plan, and Lepak raised related issues.

The Equal Protection Clause of the Fourteenth Amendment requires that state and local reapportionment and redistricting be accomplished so that the resulting districts are of roughly equal "population," but the Supreme Court has never defined exactly what it means by "population." Is it like Congressional reapportionment which requires that all persons get counted, i.e., the census count? Can some lesser population be counted? This is another way of describing the question of whether Equal Protection guarantees each person's right to vote equally, or each each person's right to be represented equally, and the Court has never determined which principle of Equal Protection trumps the other if they are in conflict.

In Burns v. Richardson, 384 U.S. 73 (1966), the Court upheld a reapportionment plan based on a count of less than all persons (in that case, Hawaii counted "registered voters"), but only because but there was no claim that doing so would result in an apportionment substantially different than one based on a count of a "permissible population basis" such as total  population, state citizens, or U.S. citizens. Moreover, the state "need not count aliens, transients, short-term or temporary residents, or persons denied the vote." Id. at 92. Since that time the Court has avoided further defining what it meant, although when a state elects to count less than all persons, it has the burden of showing that its choice passes "close constitutional scrutiny." See Dunn v. Blumstein, 405 U.S. 330, 335 (1972). This requires the state to prove a "substantial and compelling reason," id. at 336, supporting "[a]n appropriately defined and uniformly applied requirement." Id. at 342.

The basic premise of the Lepak petition was that Equal Protection requires state and local redistricting to be on an "eligible voters" basis in order to protect the oft-quoted "one person, one vote" principle. The Question Presented by the petition was:

Whether a city violates the "one-person, one-vote" principle of the Fourteenth Amendment when it creates city council districts that, while roughly equal in total population, are grossly malapportioned with regard to eligible voters.

Lepak asserted that Equal Protection only protects those who are eligible to vote, and that if in conflict, voting equality trumps representational equality. Thus, he argued, states and local redistricting must, in some circumstances, be based on a count of eligible voters and cannot be based on population.

The city asserted that it is never a violation of Equal Protection to count everyone, even when doing so would result in districts that are not equal in numbers of eligible voters. The city had support in the Fifth Circuit's decision in its case, as well as similar rulings from the Fourth and Ninth Circuits that redistricting either may or must be accomplished on a total population basis. The denial of cert seems to indicate that a majority of the Justices are content with the idea that it is never wrong for a state or local redistricting plan to use the Census count, even when doing so might impact voting equality. Indeed, nearly every jurisdiction nationwide does so. More on the case from Supreme Court reporter Adam Liptak at the New York Times here.

Today's ruling from the Court doesn't upset the circuit court cases, nor does it directly impact the Hawaii reapportionment case, which challenges Hawaii's 2012 Plan because it has not demonstrated a "substantial and compelling reason" under Dunn for excluding nearly 8% of the actual population from the population basis. Hawaii counts only "permanent residents" -- a term the plaintiffs allege is not "appropriately defined and uniformly applied" -- to exclude approximately 108,000 military personnel, their families, and university students who do not qualify to pay resident tuition from the counted population. The State asserts it counts only "permanent residents" (which it defines as those persons who are both physically present in Hawaii, and who have demonstrated an intent to remain permanently) in order to protect the equal voting power of its citizens.

A ruling in that case would not require a court to determine which population basis a state or local reapportionment plan must use, only that if it chooses deviate from counting everyone, it has an obligation to do so in such a way that protects the right of equal representation of all persons in Hawaii. Both sides have filed motions for summary judgment, and a decision is pending from the three-judge U.S. District Court, after which the losing party would be entitled to a direct appeal to the Supreme Court.

Arkansas Game On Remand From SCOTUS - First Briefs

As you know, the U.S. Supreme Court earlier reversed the Federal Circuit's conclusion that government-induced flooding could not be a taking unless it was "permanent," and remanded the case to the Federal Circuit for more.

Although the Federal Circuit indicated it would have preferred to avoid trying to deal with the issue (its order establishing a briefing schedule on remand invited the parties "to consider mediation of the issues remaining in the case following the Supreme Court’s remand"), it looks like that's not what is happening, because the parties have filed their briefs. 

• The property owner's brief

• The government's brief

The briefs appy the multi-factor Penn Central-ish "factors and circumstances" set out by the Supreme Court: 

• "[T]ime is indeed a factor in determining the existence vel non of a compensable taking" Was the flooding "temporary and unplanned" and a result of "exigent circumstances?"

• "[T]he degree to which the invasion is intended or is the foreseeable result of authorized government action.

• "The character of the land at issue and the owner’s 'reasonable investment-backed expectations' regarding the land’s use - had the area been flooded before, and if so, was the flooding comparable to the government-caused flooding?

• The "severity of the interference," and whether the flooding was a single act, or part of a series (a "sufficient number and for a sufficient time may prove [a taking]").

Supplemental Brief on Remand of Plaintiff - Cross Appellant Arkansas Game & Fish Commission, Arkansas G...

Supplemental Brief for the United States, Arkansas Game and Fish Comm'n v. United States, No. 2009-5121 (Ma...

Amici Brief: The Tenth Amendment, The Property Clause, And The "Town Too Tough To Die"

Today, on behalf of the Cato Institute and a coalition of Western-state public policy and research foundations, we filed this amicus brief in supporting the City of Tombstone's cert petition in City of Tombstone v. United States, No. 12-1069 (cert. petition filed Feb. 27, 2013).

In that case, in 2011 a forest fire in the Coronado National Forest and later monsoon rains damaged the city's sources of municipal water. The city and the State of Arizona declared a State of Emergency, but the U.S. Forest Service limited repair efforts by requiring the city to apply for a special permit and placing limitations on its use of equipment. Because it alleged the loss of water from these sources limited its ability to repond to fires, Tombstone sought a preliminary injunction prohibiting the Service from impeding its repair efforts. The District Court denied the injunction, and the Ninth Circuit affirmed, agreeing with the District Court that the federal government had not "comandeered state property or improperly regulated the State."

Here's the summary of our brief's argument:

If the states have the power to regulate private uses of federal land to further "environmental" goals -- as this Court held in California Coastal Comm’n v. Granite Rock Co., 480 U.S. 572 (1987) -- then surely under the powers reserved to them by the Tenth Amendment, states also possess the right to access and use federal land to respond to emergencies to protect the lives and properties of their residents, without undue interference from federal bureaucrats. The national government’s expansive authority to regulate federal property is thus not exclusive, particularly when states act under their emergency powers to protect life and property. Without clear guidelines delimiting the scope of the federal government’s authority in such cases,  states and municipalities will be left wandering the virtual desert, relying on the sufferance of federal administrators alone for their continued existence.

This brief addresses a single issue: whether the City of Tombstone is likely to succeed on its claim that its ability to access and repair the sources of its municipal water located on federal land is not trumped by the federal government’s authority under the Property Clause, but rather is a traditional government function reserved to the states. Amici respectfully argue that it is, so this Court should review the important issues raised in Tombstone’s petition.

The case is scheduled for the Supreme Court's conference of April 12, 2013.

Here's more from Ilya Shapiro at Cato.

Brief of the Cato Institute, the Rio Grande Foundation, the Montana Policy Institute, the Idaho Freedom Fou... b

9th Circuit On The Constitutionality Of Hawaii's Good Friday Holiday: Go Shopping Or Something

Today is Good Friday, an official state holiday in Hawaii, so we're reposting our annual recounting of how it came to be that the State celebrates the date of the crucifixion.

Turns out that it doesn't really, it's just coincidence that the "spring holiday" occurs on the same day. Or so says the Ninth Circuit.

HAWICA Appeal: Is A Mineral Right An Inherent Servitude, Or Must It Be Reflected In Torrens Title?

Before the title of this post causes you to flee, please bear with us.

Oral arguments have just concluded in the Hawaii Intermediate Court of Appeals in a fascinating case involving the nature of "Torrens" title and, in a broader sense, the nature of property rights themselves. Disclosure: we filed an amicus brief in the case in support of the property owner. But more on that below.

Hawaii is one of the few remaining states retaining its Torrens system of title registration (two others are Massachusetts and Minnesota). We call it "Land Court," a system in which the State guarantees indefeasible title to the rights and interests reflected in the title register.  

In In re Trustees Under the Will of the Estate of James Campbell, No. 30006, the State of Hawaii claims that title to property on Oahu's north shore which was registered and confirmed to the Campbell Estate by the Land Court in 1938, is subject to the State's ownership of "all mineral and metallic mines of every kind or description on the property, including geothermal rights," and is subject to a flowage easement in favor of the State.

As background (for those of you who, like me, weren't paying attention on the day it was discussed in your Property class) Torrens title derives its name from Sir Robert Torrens, an Australian by way of Ireland who became the first premier of South Australia. Largely through his efforts, South Australia adopted a system of land registration which was adopted by other common law jurisdictions, including several in the United States.  

The Torrens system, in general, is a method of creating a certificate of title and then registering a legal and basically absolute title to real property. This procedure, utilizing none the less, a judicial hearing to adjudicate all claims at the outset, was at one time in effect in 20 states. At the present time only ten states still utilize the (one step) Torrens system. Eleven states have repealed the Torrens statutes. In the remaining ten, in which the Torrens system is still in effect, the system is voluntary, and it functions side by side with the "old style," evidence of title recording system. The ten states are Colorado, Georgia, Hawaii, Massachusetts, Minnesota, North Carolina, Ohio, Virginia, Pennsylvania and Washington. New York recently repealed its registration of title law. In New York State around Buffalo and on Long Island there has been some use of the registration procedure. The registration system, until fairly recently at least, was in substantial use only in Massachusetts, Minnesota and Hawaii.

Todd Barnet, The Uniform Registered State Land and Adverse Possession Reform Act, A Proposal for Reform of the United States Real Property Law, 12 Buff. Envt'l. L.J. 1, 19-20 (2004) (footnotes omitted). Hawaii first adopted the Torrens Land Act in 1903, and it is currently codified at Haw. Rev. Stat. ch. 501.

Back to the case. It arose when the Campbell Estate submitted a petition to the Land Court in 2009 to consolidate and subdivide the land, and the State appeared and asserted its claims. The State argued that despite the 1938 Land Court registration, Campbell's title never included interests which the State reserved, even though the State's predecessor (the Territory of Hawaii) appeared in the 1938 proceedings and asserted other claims, and Campbell's title was confirmed to be free of all unregistered interests, including the Territory's.

The Land Court disagreed, and held that the State's claim of mineral rights was extinguished by the court's 1938 judgment (decree), and that Campbell's title was free of a flowage easement. The State appealed to the Intermediate Court of Appeals, arguing in its Opening Brief that the original grantor of the land (the King as an individual) did not own the mineral rights, so could not have conveyed them to Campbell, and that the government's reservation of mineral rights is "self-effectuating" whether noted in the land grant or not. It also claims that the government always possesses a flowage easement as a function of the public trust in water resources.

Campbell's Answering Brief countered that the State was bound by a Land Court title like any other party, and the fact that its claimed mineral rights and flowage easement was not noted in the certificate of title means that it does not exist. It also argues that the 1938 proceedings were res judicata to the State regarding interests the Territory could have raised, but did not. To impose these interests now, 70 years after its title was confirmed and registered, would be a taking without compensation.

Here's our amicus brief's summary of the issues:

This appeal presents an issue left unaddressed by the Hawaii Supreme Court in In re Robinson, 49 Haw. 429, 421 P.2d 570 (1966). Namely, whether the government waives a reservation of mineral and mining rights when it fails to raise and protect it in a Land Court title registration case, or whether government’s mineral and mining rights are inherent servitudes that need not be reflected in a Land Court decree.

Under Hawaii’s Torrens Land Act – codified at Haw. Rev. Stat. § 501-1, et seq., – the State of Hawaii (State) guarantees indefeasible title to the rights and interests reflected in the register. Land Court registration insures that interests which are not reflected on title do not exist, and persons who are wrongfully deprived of land or their interest through registration or the act or omission of the registrar are entitled to be paid by an indemnity fund, and the State's guarantee operates against all claims, including claims by the State itself.

. . . .

This brief addresses two issues.

First, even if in the original land grants the State of Hawaii’s predecessor did not convey – or reserved to itself – mineral and mining rights, they are not "burdens and incidents which attach by law" inherent in all Hawaii land titles. A reservation of mineral and mining rights could have been raised when the Territory appeared asserted other interests in the 1938 Land Court proceeding. Because the 1938 Land Court decree confirming title in Campbell's predecessor did not reflect a reservation of mineral and mining rights to the Territory, any claims to such rights by the State of Hawaii (State) were extinguished. The fact the State asserted mineral and mining rights claim in the present case seriously undermines its argument that the reservation of this claim is inherent and that it need not have been raised in Land Court at all.

Second, the State’s public trust powers do not include the imposition of flowage easements. The State’s duty to "protect, control and regulate the use of Hawaii's water resources for the benefit of its people," Haw. Const. art. XI, § 7, does not include a right to physically invade all property with water. If it does, the public trust is a per se physical taking.

Again, here are the party merits briefs:

• State of Hawaii's Opening Brief

• Campbell Estate's Answering Brief

• State of Hawaii's Reply to Amicus Brief

The case are worth following because the State's position seems to undercut the nature of Torrens title and the entire Land Court registration process. It is also especially interesting for those who want a crash course in the underpinnings of Hawaii's property law.

Brief Amicus Curiae of Pacific Legal Foundation in Support of Appellee, In re Trustees Under the Will of th...

Federal Circuit: Takings Counterclaim Not Barred By Section 1500 - A Dismissed Claim Is Not "Pending" Even Though It Might Be Appealed

If that headline calls out to you, congratuations: you are officially a takings nerd.

In Brandt v. United States, No. 12-5050 (Mar. 26, 2013), the Federal Circuit held that a takings claim originally submitted as a compulsory counterclaim to the federal government's attempt to quiet title in a District Court action -- which was then subsequently filed as a separate action in the Court of Federal Claims -- was not barred by 28 U.S.C. § 1500. That statute deprives the CFC of subject-matter jurisdiction "of any claim for or in respect to which the plaintiff ... has pending in any other court any suit or process against the United States...."

If this case name sounds familiar, here's why. Last week we posted the cert petition in a companion case (the one that the government alleged was pending at the time that Brandt filed his takings counterclaim). Brandt's petition challenges the Tenth Circuit's conclusion in the quiet title action that the federal government retained an "implied reversionary interest" when it issued land patents back in the day, and not simple easements that were extinguished when the rights-of-way ceased to be used as railways.

Brandt is the succesor-in-title to land originally patented and subject to a right-of-way for railroad purposes. In 1996, the railroad filed a notice with the Surface Transportation Board that it was abandoning rail service and the right-of-way. After the abandonment process completed in 2004, the federal government instituted a quiet title action in the District of Wyoming, seeking a declaratory judgment that the right-of-way was government property and not the Brandts, because it was an "implied reversionary interest" and not an easement. Reversionary interests cannot be extinguished, while easements may be.

Brandt asserted a counterclaim arguing that "to the extent the government acquired some interest in the portion of the land formerly occupied by the railroad easement, that interest would  constitute a taking for which just compensation is owed." Slip op. at 3. Apparently Brandt's counsel was following along with Horne, and requested the District Court bifurcate the takings counterclaim and transfer it to the CFC. The District Court partially agreed, and bifurcated the quiet title and the takings issues, but stayed the takings claim while it adjudicated the quiet title claim. After the court ruled in favor of the government on the quiet title claim, it dismissed Brandt's takings counterclaim for lack of subject-matter jurisdiction. After the District Court dismissed, but before Brandt filed his Tenth Circuit appeal, he instituted a Tucker Act claim for the taking in the CFC.

The CFC action alleged the District Court's ruling effected a taking, and that "but for the court's application of [the federal rails-to-trails statute], the easement would have been terminated upon abandonment and no longer would have burdened his property." Slip op. at 6. The Tenth Circuit eventually affirmed the quiet title ruling. See United States v. Brandt, No. 09-8047, slip op. at 5 (10th Cir. Sep. 11, 2012). That's the case now up on the cert petition.

Meanwhile, back in the CFC the government moved to dismiss the takings claim under § 1500 and the Supreme Court's decision in United States v. Tohono O'odham Nation, 131 S. Ct. 1723 (2011), arguing that in Tohono, the Supreme Court held that two lawsuits are "for or in respect to the same claim" when they are based on the same operative facts, and Brandt's CFC takings claim and his District Court counterclaim were based on the same facts and were "pending" when Brandt filed the CFC complaint. The CFC agreed and dismissed:

Specifically, the court found that: (1) Brandt’s case was "pending" within the meaning of § 1500 when he filed in the Court of Federal Claims because the time for filing a notice of appeal to the Tenth Circuit had not yet expired; and (2) Brandt’s takings claim filed in the Court of Federal Claims was "for or in respect to" the claims filed in Wyoming district court because they shared "substantially the same operative facts."

Slip op. at 7.

The Federal Circuit reversed, holding that even though § 1500 was designed to "save the Government from burdens of redundant litigation," slip op. at 8 (quoting Tohono, 131 S. Ct. at 1729-30), and a counterclaim is a "suit or process," the counterclaim was no longer "pending" in the District Court at the time he filed the CFC lawsuit even though the time for Brandt to appeal to the Tenth Circuit had not yet expired (and indeed, he did appeal shortly thereafter). Brandt also argued that the takings claim did not arise from the "same operative facts" because it only ripened once the District Court ruled in the government's favor on the quiet title issue.

The Federal Circuit agreed that the District Court case was not "pending" even though the appeal period had yet to expire at the time Brandt filed the CFC complaint. The District Court's judgment was final but Brandt had not yet instituted the Tenth Circuit appeal, and thus, in the interregnum there was not a "suit or process against the United States pending in any court." The case had been dismissed by the CFC which means it was no longer "pending." When the Tenth Circuit notice of appeal was subsequently filed, Brandt had already filed his CFC complaint, and subject-matter jurisdiction is measured at the time the complaint is filed.

According to the government, Brandt should have waived his right to appeal in order to be able to file his CFC takings claim. Read that again in case it didn't soak in:

According to the government, Brandt should have affirmatively waived his right to appeal the district court’s decision to signify that the case was officially terminated. The government cites no authority requiring a litigant to forgo its appellate rights in these circumstances, and we have found none. Although the government is correct that § 1500 "was enacted to prevent a claimant from seeking recovery in district court and the Court of Claims for the same conduct pleaded under different legal theories" and to prevent the government from having to defend against duplicative lawsuits, Trusted Integration, 659 F.3d at 1163, here, it was the government – not Brandt – that affirmatively chose to file suit in district court. And, as Brandt points out, once the government filed suit, he was compelled to file counterclaims relating to the abandoned railroad easement or risk waiving his right to do so. See Fed. R. Civ. P. 13(a)(1)(A) ("A pleading must state as a counterclaim any claim that – at the time of its service – the pleader has against an opposing party if the claim: arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim").

Slip op. at 18. The court rightly rejected that argument as "particularly strange," given the split in the circuits. See id. at n.8.

Because it ruled in favor of Brandt, the court did not address the argument that the District Court counterclaim and the CFC takings claim arose from the "same operative facts."

One final note. In Tohono, a case involving the Indian Tucker Act and claims of breaches of trust, we filed an amicus brief arguing that takings claims are different than statutory and common law claims because the Fifth Amendment's compensation requirement is self-executing, and warning of the types of arguments that arose in Brandt being raised in takings cases. 

Will the government seek en banc review or perhaps even a return visit to the Supreme Court? Does this decision highlight the circuit split in the other Brandt case (see, e.g., slip op. at 18 n.8)? Stay thirsty, my friends. 

Brandt v. United States, No. 12-5050 (Fed. Cir. Mar. 26, 2013)

Circuit Split Alert: New Petition Asks - What Is It About "Easement" That You Don't Understand?

When a court of appeals opinion holding that the federal government has retained a reversionary interest in railroad rights-of-way contains the following language, that sound you hear is the cracking of smiles on appellate lawyers' faces:

Though we recognize that the Seventh Circuit, the Federal Circuit and the Court of Federal Claims have concluded that the United States did not retain any reversionary interest in these railroad rights-of-way, we are bound by our precedent.

United States v. Brandt, No. 09-8047, slip op. at 5 (10th Cir. Sep. 11, 2012). That, you see, is the court acknowledging the holy grail of Supreme Court review, the vaunted "circuit split," and the presence of a genuine disagreement in the law among the lower courts is one of the tickets to getting the Justices' -- or at least the cert pool clerk's -- attention.

Thus, the cert petition filed yesterday seeking SCOTUS review of the Tenth Circuit's unpublished opinion seems like a good candidate and a case to watch, even though it involves a less-than-flashy area of the law, the conversion of abandoned railway easements into public recreational trails.

The issue is whether the federal government retained an "implied reversionary interest" when back in the day it issued land patents, or whether these patents were subject only to a railway right-of-way easement. The difference is that easements may be extinguished, while reversionary interests cannot. In this case, the railway abandoned its use, after which the federal government instituted a quiet title action in federal court asserting it owned the right of way, and that it did not revert to Brandt. So dust off your old Property hornbooks and follow along.

Let's start with the Question Presented, which details the necessary background:

This case involves the General Railroad Right-of-Way Act of 1875 ("1875 Act"), under which thousands of miles of rights-of-way exist across the United States. In Great Northern Ry. Co. v. United States, 315 U.S. 262 (1942), this Court held that 1875 Act rights-of-way are easements and not limited fees with an implied reversionary interest. Based upon the 1875 Act and this Court’s decisions, the Federal and Seventh Circuits have concluded that the United States did not retain an implied reversionary interest in 1875 Act rights-of-way after the underlying lands were patented into private ownership. In this case, the Tenth Circuit reached the opposite conclusion and acknowledged that its decision would continue a circuit split. The question presented is:

Did the United States retain an implied reversionary interest in 1875 Act rights-of-way after the underlying lands were patented into private ownership?

As noted above, the Tenth Circuit held that it did. Its opinion didn't really analyze Brandt's claims, but simply relied on circuit precedent which held that these were not easements. Marshall v. Chicago & Northwestern Transportation Co., 31 F.3d 1028 (10th Cir. 1994).

The Seventh Circuit, in Samuel C. Johnson 1988 Trust v. Bayfield County, 649 F.3d 799 (7th Cir. 2011) (Posner, J.), rejected Marshall's reasoning, and further highlighted the circuit split:

Marshall v. Chicago & Northwestern Transportation Co., 31 F.3d 1028, 1031 (10th Cir.1994), holds, it is true, that the 1875 Act created a reversionary interest in the federal government, in which event a right of way abandoned by a railroad would revert to the federal government and so be transferable to the County. But Hash v. United States, 403 F.3d 1308, 1316-17 (Fed.Cir.2005), and Beres v. United States, 64 Fed.Cl. 403, 425-28 (Fed.Ct. Cl.2005), are to the contrary, and, though criticized in Darwin P. Roberts, "The Legal History of Federally Granted Railroad Rights-of-Way and the Myth of Congress's `1871 Shift,'" 82 U. Colo. L.Rev. 85, 150-64 (2011), make better sense than Marshall, as well as being supported by the characterization in Great Northern Ry. v. United States, 315 U.S. 262, 271-79, 62 S.Ct. 529, 86 L.Ed. 836 (1942), of the rights of way created under the 1875 Act as "easements." The Act does not hint at a reversionary interest, and who searching the chain of title of a lot never owned by a railroad would suspect a lurking governmental right so unsettling to the security of private property rights?

Apparently, there are thousands of property owners across the nation that could be affected, and the rule of law applicable depends on where a parcel is located. Besides, why pay for and take all these lapsed right-of-way interests if you can simply declare that they never belonged to the owners at all?

Petition for Writ of Certiorari, Brandt Revocable Trust v. United States, No. ___ (Mar. 22, 2013)

Reply Brief In Eminent Domain Pretext Case: If The Government Won't Even Defend The Taking ... It Might Be A Private Condemnation

Here's the Reply Brief in Ilagan v. Ungacta, No. 12-723 (cert. petition filed Dec. 7, 2012), the case in which the Court is considering whether to review the Guam Supreme Court's opinion applying Kelo v. City of New London, 545 U.S. 469 (2005) to reverse a trial court decision invalidating a taking. 

The reply brief responds to the Brief in Opposition's argument that the taking of the Ilagan property did not violate the Public Use Clause because it was accomplished under the auspices of the Agana Plan:

Most notably, the Opposition does not dispute the evidence showing the private character of the transfer of the Petitioners’ (Ilagans) land to their neighbors, the Ungactas. To be precise, the Opposition does not deny: (1) that the taking of the Ilagans’ land was initiated and funded by the Ungactas; (2) that the Unguctas are politically connected, with Respondent Felix Ungacta serving as Mayor of Agana at the time of the taking; (3) that the taking was designed to give the Ungactas a driveway to their private residence; (4) that the Agana Plan was defunct at the time of taking; (5) that the taking was disconnected in time, space, and process from past Agana Plan condemnations; or (6) that the government has abandoned its defense of the taking, (ironically) leaving the "public use" argument to be made by the private party that benefitted from the taking.

Br. at 1 (footnotes omitted). For a little light eminent domain-related Friday self-entertainment, read the above list in the style of comedian Jeff Foxworthy's "You Might be a Redneck" routine. For example: "If the condemnation of your land was initiated and funded by your neighbors ... you might be the victim of a pretextual taking." And so forth.

[Disclosure: we represent the Owners' Counsel of America, which has joined an amici brief supporting the property owner/petitioner in this case, urging the Court to grant cert.]

The Court requested the respondents file a BIO after they waived their right to do so, which could mean that this case is on the Court's (or the cert clerk's) radar.

The Court's docket report for the case is here if you want to follow along.

Reply Brief of Petitioners, Ilagan v. Ungacta, No. 12-723 (Mar. 21, 2013)

Who's On First And Subject To "The World's Most Outdated Law?" - Supreme Court Oral Arguments In Horne v. USDA

Our read of the transcript of the oral arguments in Horne v. United States Dep't of Agriculture, No. 12-123, leads us to believe that despite its complexities -- Justice Kagan characterized the USDA raisin regulations that form the background of the case as "the world's most outdated law" and Justice Scalia called it "a crazy statute" -- it might be resolved on a straightforward principle of appellate procedure. But more about that below.

Who's On First, Raisin Producers On Second?

First, we turn to what was the day's Most Quotable Moment when, after a series of questions by Justices Sotomayor, Scalia, Kennedy, Ginsburg, and Alito to the petitioners' advocate Michael McConnell which revealed the Justices' confusion about whether his clients were raisin "handlers" or raisin "producers" -- and responses from Mr. McConnell that showed even he had difficulty keeping the labels straight -- Justice Breyer asked:

I'm just trying to get to what you're arguing about. And I might be off base by now. I feel like handlers, purchasers, raisins, like an old Abbott and Costello movie. I just want to see if I'm right. Tell me. Just say you're wrong and I don't go into it further.

Tr. at 19. But he followed that lighthearted pop culture reference with what is perhaps the most accurate summary of the issues in a case that has seemed to perplex commentators because even though the issue before the Court is fairly straightforward, it must be viewed though the opaque wrapper of the USDA's confounding raisin regulations:  

There -- there are some people, they've been -- they are either -- they have some raisins, all right. And these particular people, whom the Department has said have acquired the raisins, it said they acquired the raisins. And so they're there with some raisins, and then the Government says: Do this thing with your raisins. And they don't want to do it, so they don't. They don't do it even though the law says do it.

And then they say the law is unconstitutional and, moreover, you fined us a huge amount of money and we don't want to pay it because the law is unconstitutional, and we consider that money to be paid. Call it a fine, call it what you want. We consider we shouldn't have paid it and now we want it back and we want compensation and we think it's a taking and where do we go. Can't we make that argument in the Ninth Circuit? It's something like that; isn't that what we're arguing about?

Tr. at 19-20.

Constitutional Remedies and Constitutional Defenses

Mr. McConnell agreed that Justice Breyer's formulation of the issue was "almost exactly right," with the one exception that his clients argued they should not have to pay the fine, and should be able to raise the unconstitutionality of the regulations as a defense to the USDA's attempt to assess it. He then pointed out the key detail that lies at the analytical heart of the case: an action to recover just compensation in the Court of Federal Claims should not be considered the exclusive route to raise a takings claim as the USDA has argued (and that might not even be available to parties such as the Hornes, because a Tucker Act lawsuit is predicated on the taking already having been inflicted on the property owner). Mr. McConnell argued that it makes no sense to require a district court to impose a government action that the Hornes argue is a taking simply to ripen a CFC claim for compensation. To do so, he asserted, would be "pointless." Tr. at 21. 

Mr. McConnell focused on two cases, Eastern Enterprises v. Apfel, 524 U.S. 498 (1998), and Missouri Pacific Ry. Co. v. Nebraska, 164 U.S. 403 (1896) to make his point that the two levies by the USDA could be challenged as a taking. Eastern Enterprises addressed the part of the fine that represented the monetary equivalent of the raisins the USDA claims the Hornes should have given up, while Missouri Pacific addressed the penalty -- because each case concluded that a property owner could challenge a government action because it "would be a taking" if the owner were required to comply. Tr. at 22.

Our Old Friend Kaiser Aetna

As we noted in our preview, this is another way of articulating the notion that compensation is not the sole remedy under the Takings Clause, an idea my law firm colleagues have been articulating well before I went to law school, as exemplified by cases such as Kaiser Aetna v. United States, 444 U.S. 164 (1979), in which on behalf of the property owner they raised as a defense the argument that the imposition of a navigational servitude on what it believed was a private marina would be a taking, and could not be accomplished unless the government first condemned and paid for it. That case began when the Corps of Engineers instituted an action in the district court seeking a declaratory judgment that the marina was publicly navigable and an injunction prohibiting the owner from excluding the boating public. The owner asserted that to allow public navigation would be a taking, and did not seek compensation. See United States v. Kaiser Aetna, 408 F. Supp. 42 (D. Haw. 1976). Eventually, the Supreme Court agreed. Kaiser Aetna, 444 U.S. at 180 ("if the Government wishes to make what was formerly Kuapa Pond into a public aquatic park after petitioners have proceeded as far as they have here, it may not, without invoking its eminent domain power and paying just compensation, require them to allow free access to the dredged pond"). 

A Remand in the Works?

Mr. McConnell ended his argument by answering Justice Ginsburg's question of what, if anything, was left for the Ninth Circuit to do were the Supreme Court to agree with the Hornes and send the case back, given that the Ninth Circuit, it its first opinion, reached the merits of the takings defense and ruled against them before it did a 180 and concluded it had no jurisdiction. Mr. McConnell responded that all they want is a chance to go back to the Ninth Circuit and get en banc review on the merits, a process they were undertaking when the USDA claimed that the CFC was the exclusive forum in which to raise takings issues, and that the issue was a "jurisdictional" bar to the Ninth Circuit considering the merits.

About that Remand...

Up next was Joseph Palmore, the Assistant to the Solicitor General who argued the case for the USDA, who started where we suspected he might, by trying to tie the issues in this case to those in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447. But when he attempted to harken back to Justice Sotomayor's initial questioning of Mr. McConnell (a series of questions about which of the petitioner's legal entities owned the raisins at issue, and what property was being taken), Justice Kagan interrupted to ask the type of question that can make an appellate advocate squirm unless they have anticipated the question and have an answer at the ready:

Mr. Palmore, before you do that, haven't you conceded the point that this is not jurisdictional?

Tr at 27. To that question, Mr. Palmore provided a candid answer that may have given the Court all it needs to resolve this case in favor of the Hornes on narrow grounds:

MR. PALMORE: We agree that the failure to go to the Court of Claims is not properly viewed as a jurisdictional defect. We did invoke Ninth Circuit precedent below stating that it was jurisdictional. And some of this cases -- this Court's cases put it in ripeness terms, which is an Article III concept. So there has been confusion -

That piqued Chief Justice Roberts' interest enough for him to ask his first question of the day:

CHIEF JUSTICE ROBERTS: When did you first raise the argument that it was jurisdictional?

MR. PALMORE: In our opposition to the rehearing petition.

CHIEF JUSTICE ROBERTS: And now you are - now you are changing back again and saying it's not?

MR. PALMORE: There was Ninth Circuit precedent holding that it was jurisdictional, and we relied on that and there is certainly language from this Court -

CHIEF JUSTICE ROBERTS: You relied on that when you got to rehearing. You didn't rely on that before you went before the Ninth Circuit, right?

MR. PALMORE: That's correct.

We think -- we think this is properly viewed as a substantive defect in the claim, so in a sense the Ninth Circuit in its initial panel decision ruled for the Government on a substantive defect one, there's no taking. And what it did on rehearing in our view, although it attached the wrong label to it, it substantively was correct in concluding that there was substantive defect number two -

At which point Justice Kagan reenterd the fray asking once again about "conceding" the issue because it had been waived (or, more accurately, "forfeited") by the USDA's failure to raise it earlier in the courts below:

JUSTICE KAGAN: But Mr. Palmore, if you are conceding now that this is not jurisdictional, it seems to me that your Tucker Act argument as a substantive argument, I mean, has been waived. You didn't raise that argument until the rehearing petition.

MR. PALMORE: That would certainly be something that -- that the Ninth Circuit could consider in the event there were a remand here. But the Ninth Circuit did decide it. The substance of its bottom line conclusion was correct and all of its analysis was correct. It simply used the wrong words, so we think it is here.

All this talk of remand was like blood in the water to Justice Scalia, who went in for the kill:

JUSTICE SCALIA: I'm really confused. You are saying there ought to be a remand here because the question is not jurisdictional, which is just what your friend says, right?

MR. PALMORE: Well, the Ninth Circuit -

JUSTICE SCALIA: So the two of you are in agreement it ought to go back to the Ninth Circuit, they should do it on the merits, and -- and if that's wrong, we can review that.

MR. PALMORE: If that happens, of course, as Justice Ginsburg pointed out, the consequence for us is they reinstate the prior panel opinion, in which -

JUSTICE SCALIA: That may well be, but -

MR. PALMORE: I'm not going to resist too strenuously that kind of remand, but they did decide it. And moreover, they decided something separate, which is at JA-305 they said something different, which is the kind of threshold defect in the takings claim turning on raisins, which is there is a capacity problem.

Tr. at 27-29. We suspect that the concession was enough to provide the Court with a way to solve this case without wading into the whole "producer" versus "handler" question and answering what was taken and when, issues that no Justice truly seemed eager to grapple with. Game over, man, game over.

With that, Mr. Palmore returned to his argument about "handlers" versus "producers," which prompted Justice Scalia to respond with the second Quotable Moment of the day:

JUSTICE SCALIA: Yes, but part of that penalty was, you know, your raisins or your life, right? I mean, it was --

  (Laughter.)

JUSTICE SCALIA: -- you don't have to pay the penalty if you give us the raisins.

Tr. at 31.

"What a pity he ain't a prig!"

Mr. Palmer, perhaps sensing that he was on the back side of a downhill argument, attempted to paint the Hornes as artful dodgers, out to game the system by adopting "a business model that was an intentional, willful attempt to evade regulatory requirements in order to secure an unfair competitive advantage." Tr. at 30. But when Justice Alito asked whether this was all stuff the Ninth Circuit should decide, Mr. Palmore again mentioned the R-word:

MR. PALMORE: That was certainly not decided below, so a remand -- to the extent that this was preserved, a remand would be possible outcome there. We think, though, that that claim suffers from separate -separate threshold defects.

Tr. at 33. After some back-and-forth about Apfel, Justice Breyer returned to his earlier theme and challenged Mr. Palmore to contradict his "feeling this is somehow not a fight fit for the Court of Claims" was wrong:

JUSTICE BREYER: Fine. So they're making that kind of constitutional claim. Now, I would think if all you told me was that and I knew nothing about all these statutes, I would say that's the kind of claim that should be made in a Federal district court, period, not the Court of Claims. Because their government isn't going to compensate them for anything. That's against the whole point of the program.

Either this program is valid or it isn't. And if it isn't, some authoritative set of courts should tell us that. So I have a feeling this is somehow not a right fit with the Court of Claims.
Now, you explain to me why that purely instinctive feeling at this point is completely wrong.

Tr. at 36-37. Mr. Palmore responded by arguing that the availability of just compensation for a taking wasn't simply a remedies problem, but was a "constitutional condition," and "[a]s long as there's just compensation, there simply is no violation." Tr. at 37. (Barista's note: Williamson County rears its ugly head again.)

Justice Kennedy then returned to an earlier thread about the issue before the Court:

JUSTICE KENNEDY: I thought that what we were going to decide was whether or not, assuming you can go to the Court of Claims, you must go to the Court of Claims, can you prefer to wait, have a penalty assessed against you and say this is unconstitutional, it's a taking. Your position is you can't say that. don't understand why. Other than, if you want to talk about Williamson and so forth, we can get into that.

Tr. at. 42.

The R-Word Again

Mr. Palmore's argument time began winding down and the Justices again returned to the question of remand, Justice Alito asking whether the USDA would be entitled to win again in the Ninth Circuit based on the reasoning in the panel's original opinion, and Justice Kagan asking whether there would be anything wrong with this disposition:

JUSTICE KAGAN: Mr. Palmore, what would be wrong -- would anything be wrong -- with a -- with a disposition of this Court that went something like this: Everybody agrees that this is not a jurisdictional issue, including the Government, so they got that wrong.

Now, as to this whole business about the Tucker Act and whether the Tucker Act provides a remedy, the Government only started talking about that in a petition for rehearing en banc, and the Government can't do that. You know, it can't introduce an argument like this in a petition for rehearing en banc. So that's waived.

And now, the Ninth Circuit can go and try to figure out whether this marketing order is a taking or it's just the world's most outdated law.

  (Laughter.)

Tr. at 48-49. This portion of the arguments ended with questions by Justice Breyer about whether as "producers" the Hornes had standing to raise the takings issues as "handlers," before Chief Justice Roberts once again showed irritation with the way the government was arguing the case:

CHIEF JUSTICE ROBERTS: I have to say -- I think it comes with less than good grace for you to criticize the other side for not having raised a particular argument. But I do want to clarify that you have no objection at this point for reversing the Ninth Circuit on the ground that they erred in saying that this -- they should have dismissed on jurisdictional grounds.

Tr. at 53. To which Mr. Palmore responded that he would not "resist that too strenuously ... [b]ut yes, we -- we frankly acknowledge and we acknowledged in our brief that we did not -- we did not suggest below that this was a jurisdictional defect," altough he expressly noted that "[o]ur position is that we're not acquiescing in a -- in remand."

In his short rebuttal, Mr. McConnell returned to the lecturn to emphasize again that the issue is is not "jurisdictional" and that his clients have standing, and the arguments ended quickly.

But the case seemed to be over, but for the shouting.

Predictions?

We're predicting a narrow ruling from the Court vacating the Ninth Circuit's amended opinion, holding that the issue is not "jurisdictional," and sending the case back to the Ninth Circuit for further consideration of the Hornes' request for en banc review. The multiple concessions from USDA's counsel are probably going to be too much to overcome, and a narrow remand would allow the Court to resolve the case without getting too far into the weeds about "handlers" and "producers," issues that no Justice seemed ready to tackle, and without getting into the merits of the takings issue.

Will we see another unanimous takings decision from the Court? Stay tuned.

Horne v. USDA Oral Argument Transcipt

Here's the transcript from today's Supreme Court oral arguments in Horne v. United States Dep't of Agriculture, No. 12-123 (cert. granted Nov. 20, 2012).

Here's a recap of the arguments from Lyle Dennison at SCOTUSblog: "If only it were simple..."

Transcript, Horne v. USDA, No. 12-123 (Mar. 20, 2013)

Reply Brief In California Raisin Takings Case (Argued Today): Don't Confuse Constitutional Rights With Remedies

Here's the Reply Brief in Horne v. United States Dep't of Agriculture, No. 12-123 (cert. granted Nov. 20, 2012), the case asking whether in an enforcement action by the USDA, California raisin farmers can raise the defense that the requirement they turn over to the government a certain percentage of their yearly crop would be a taking.

The brief responds to the USDA's brief, and argues that the issue before the Court is not "jurisdictional," which means it could be raised any time, much like the USDA did here, even after the Ninth Circuit issued its opinion. Rather, this is a choice of remedies ripeness question subject to "forfeiture." Barista's note: we're happy to see what is commonly referred to as "waiver" (a knowing and intentional relinquishment of a known right) properly labeled as "forefeiture" (relinquishment of a right by operation of law), because in civil litigation when you don't raise issues you could have, you lose them even if you don't intend to. The brief argues that every case from Williamson County to Stop the Beach Renourishment has treated "takings clause ripeness as non-jurisdictional." Br. at 5.

The Reply focuses on Eastern Enterprises v. Apfel, 524 U.S. 498 (1998) -- a case sure to get Justice Kennedy's attention because he provided the fifth vote for the property owner, but argued the case was one of Due Process, not Takings -- arguing that a takings claim should be able to be raised as a defense when the regulatory scheme being challenged does not provide for compensation:

But the government nowhere cites any case for the novel proposition that Congress would want to establish such a "one-bite" regime. It makes no sense to have the question of which court should hear a takings claim depend on a factor as difficult to ascertain as whether the Executive Branch would abandon its enforcement of the law in response to a just compensation award. That is no doubt why cases addressing takings claims on the merits have given no weight to the fact that the Executive Branch had the authority to stop the taking. See, e.g., Kaiser Aetna v. United States, 444 U.S. 164, 168-169 (1979) (government initiated enforcement action for public access to property); Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 585 (1952) (property seizure based on unilateral executive order). In these cases, federal courts simply reached the merits of the takings claim upon concluding that the underlying regime made no provision for just compensation, rather than requiring a party to proceed to the claims court to determine whether compensation was available there.

Br. at 8.

Finally, the reply argues that a defendant in an enforcement action may raise a takings defense because the USDA's argument that the availability of the Tucker Act avoids the constitutional violation "confuses constitutional rights with remedies." Br. at 13.

More, after today's oral arguments.

Reply Brief for Petitioners, Horne v. United States Dep't of Agriculture, No. 12-123 (Mar. 13, 2013)

More California Raisin Takings Case Previews

Yesterday, we posted our thoughts about the upcoming (March 20) Supreme Court oral arguments in Horne v. United States Dep't of Agriculture, No. 12-123 (cert. granted Nov. 20, 2012), the case asking whether in an enforcement action by the USDA, California raisin farmers can raise the defense that the requirement they turn over to the government a certain percentage of their yearly crop would be a taking.

Here are a few more perspectives on the arguments:

• Supreme Court will divine the legal stakes in California raisin wars - Michael Doyle at McClachy: "Dissident California raisin growers will soon get their day in the Supreme Court sun, with a case that’s juicier than it seems. Libertarians are weighing in. So, from the other side, is Sun-Maid, the largest single marketer of raisins in the world. Texas is siding with the dissidents, as is the U.S. Chamber of Commerce.Add it up and the case with roots in raisin-rich Fresno County will put the nine Supreme Court justices on the spot Wednesday morning. The eventual outcome will have consequences well beyond the vineyard and the packing shed."

• Argument preview: A vintage "takings" case - Lyle Denniston at SCOTUSblog: "This is another of those cases before the Court where the outcome may follow quite easily from the Court’s choice of which of two different theoretical boxes is the right one for this dispute.   If it sees the case as a controversy over the government’s use of a “bait-and-switch” strategy to thwart a serious challenge to its marketing program enforcement, the growers could be well on their way to winning."

• Can the government take a raisin? Farmer challenges Depression-era law - Jeremy Jacobs at Greenwire: "Echeverria, the Vermont Law School professor, said this case is unique because, technically, Horne can't argue that anything was taken since he didn't turn over raisins. Instead, he contends the fines are a taking. Typically, takings cases arise when the government takes the first step, but Horne is contending that he should be able to act first in refusing to comply with the raisin order because he maintains the program is a taking. Echeverria said that line of reasoning could theoretically be used as a defense against almost any environmental statute or regulation where the government requires something of a property owner, such as not filling in a wetland for development. 'If the Hornes are right,' he said, 'it would encourage widespread violations of the law.'"

We'll post the transcript when available.

Horne v. USDA Oral Argument Preview: Is It The Takings Clause, Or Only The Just Compensation Clause?

Koontz Sets The Stage

The apparent sticking point during the January oral arguments in n Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012), came to light via Justice Scalia's questioning of the property owner's counsel about whether anything had been "taken" when a property owner refused to accept a development permit conditioned on him paying for improvements to public land miles away from his property, because doing so would violate the unconstitutional conditions doctrine of Nollan/Dolan. For how could the owner claim that his property was taken when he didn't accept the permit? The issue was succintly stated by Justice Kagan when she asked point-blank, "where is the taking?" (see p. 11 of the Koontz transcript).

We're still waiting for the opinion in that case so don't have the Court's answer just yet, but Part II of the Koontz debate will likely be taking place on Wednesday, March 20, 2013, when the Court is scheduled to hear oral arguments in Horne v. United States Dep't of Agriculture, No. 12-123 (cert. granted Nov. 20, 2012), the third takings case to be argued this term.

In Horne, the Court is reviewing the Ninth Circuit's opinion which concluded that the court lacked jurisdiction to consider a takings defense raised by raisin farmers who asserted they did not qualify as "raisin handlers" under federal regulations, and could not be required to "reserve" (donate) 47% of their crop to the government because it would be a physical taking. The Ninth Circuit concluded it lacked jurisdiction because the farmers could seek just compensation in a Tucker Act claim in the Court of Federal Claims. "Takings" cases, in the Ninth Circuit's view, are about recovering just compensation and thus must be brought in the CFC if the amount sought is in excess of $10,000.

Some background before we return to that concept.

Raisin Handlers vs. Raisin Producers

This case involves much more than $10,000. For the 2003 and 2004 crop years, the USDA brought an enforcement action against the Hornes seeking to recover the monetary value of raisins they did not turn over to the government under the "marketing order" program, New Deal-era regulations designed to stabilize the raisin market. The Hornes believed they set up their business so they qualified as raisin "producers" and thus were not required to reserve any portion of their crop.

The USDA disagreed and pursued them for $483,843 for the value of the raisin crop they should have set aside, plus $200,000 in civil penalties. In the enforcement action, the Hornes asserted they were not "handlers" and didn't need to reserve any raisins, but even if they were, to impose the reserve requirement would be a prohibited physical taking of their raisins under Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) and Kaiser Aetna v. United States, 444 U.S. 164 (1979). After a losing appeal through the USDA's administrative process, the Hornes also lost in the District Court which ruled against them on all counts.

Ninth Circuit Round I: It's Their Market, You Just Participate In It

The Ninth Circuit affirmed, holding that the reserve requirement was not a taking because the raisin farmers could have avoided the confiscatory regulations by choosing to not enter the raisin market. The panel acknowledged the Hornes' "logic has some understandable appeal" because raisins are property, and they are being taken, but held there was no taking because "their argument rests on a fundamental misunderstanding of the nature of property rights and instead clings to a phrase divorced from context." The court recognized that a simple physical appropriation of raisins would be a taking. "No one suggests the government could come onto the Hornes' farm uninvited and walk off with forty-seven percent of their crops without offering just compensation, even if the seizure itself were justified."

But the reserve requirement in the USDA marketing orders are not the same thing as a direct seizure according to the court, and the regulations were merely the price that raisin farmers have to pay if they want to participate in the raisin market:

Far from compelling a physical taking of the Hornes' tangible property, the Raisin Marketing Order applies to the Hornes only insofar as they voluntarily choose to send their raisins into the stream of interstate commerce. Simply put, it is a use restriction, not a direct appropriation. The Secretary of Agriculture did not authorize a forced seizure of forty-seven percent of the Hornes' 2002-03 crops and thirty percent of their 2003-04 crops, but rather imposed a condition on the Hornes use of their crops by regulating their sale. As we explained in a similar context over seventy years ago, the Raisin Marketing Order "contains no absolute requirement of the delivery of [reserve-tonnage raisins] to the [RAC]" but rather only "a conditional one." Wallace v. Hudson-Duncan & Co., 98 F.2d 985, 989 (9th Cir. 1938) (rejecting a takings challenge to a reserve requirement under the walnut marketing order).

Relying on the rationale of Yee v. City of Escondido, 503 U.S. 519 (1992), the court viewed the raisin sale business as voluntary. In Yee, the Supreme Court upheld a mobile home rent control ordinance against a physical takings challenge, since the landowners were not required to use their property as a mobile home park, and thus the occupation of the land was not required by the government. Same for the raisin industry; no one is forcing the Hornes to participate: "[t]heir argument is founded on an erroneous belief that they have a property right to 'market their [raisins] free of regulatory controls.'" 

The court distinguished the ability to sell personal property such as raisins, from the right to develop real property (as in Nollan and Dolan, two cases where the government was prohibited from conditioning the right to build on the owner's agreement to surrender the right to compensation). The government's power to regulate commerce "ought to put a property owner on notice 'of the possiblity that new regulation might even render his property economically worthless (at least if the property's only economically productive use is sale or manufacture for sale)'." Thus, personal property is apparently different than real property, and the right to sell personal property is subject to the government's power to regulate the market (even to the point of requiring raisin producers to surrender their right to compensation for reserved raisins).

Ninth Circuit Round II: A New Gloss On The Old Tucker Act Shuffle

The Hornes sought rehearing and in response, the USDA for the first time asserted that the takings defense was not ripe, and the District Court and the Ninth Circuit couldn't even consider the argument. In an amended opinion, the Ninth Circuit agreed, holding that the exclusive forum for considering takings claims -- even those raised defensively -- is a CFC claim for compensation under the Tucker Act. The Ninth Circuit dismissed the Hornes' takings defense for lack of jurisdiction, effectively telling the farmers that they could not object to the imposition of fines, but must pay and then file a claim for just compensation in the CFC to get the money back. Oddly, the Ninth Circuit didn't wipe out the earlier opinion and substitute an order dismissing the case. It left intact the substantive decision over which it had just ruled it had no jursidiction. 

Old takings hands will recognize the Ninth Circuit's ruling as the latest incarnation of the Tucker Act Shuffle, which is like Williamson County ripeness writ small for takings claims against the federal government. Under that theory -- in which district courts only deal with the validity of the regulations and do not consider takings claims, leaving those exclusively to the CFC -- a property owner must either lose in the District Court, or concede the validity of the regulation at issue, and only then be able to pursue the CFC case for compensation. In these situations, the property owner's check to the government paying a fine and the government's just compensation check to the property owner for a taking could literally cross in the mail.

Cert Review

Just a few weeks after the Court granted cert in Koontz, it did the same in Horne, agreeing to consider two Questions Presented: 

1.  Whether a party may raise the Takings Clause as a defense to enjoin a "direct transfer of funds mandated by the Government." Eastern Enterprises v. Apfel, 524 U.S. 498, 521 (1998) (plurality; quotation marks omitted).

2.  Whether the federal courts have jurisdiction over petitioners’ takings claim, where petitioners, as "handlers" of raisins under the Raisin Marketing Order, 7 C.F.R. Part 989, are statutorily required to exhaust all claims and defenses in administrative proceedings with exclusive jurisdiction for review in federal district court.

The petitioners' merits brief argued that ripeness prohibits a plaintiff from bringing a claim only where it seeks "anticipatory relief against government action that has not yet taken place," and "does not apply when a party seeks to interpose a constitutional defense to an enforcement action brought by the government at the time and in the forum of the government’s own choosing."

The USDA's merits brief countered that the Hornes only have standing to assert the takings defense as "producers," but the USDA's order was imposed on them "only as handlers." Moreover, claims under the "Just Compensation Clause" must be brought in the CFC, and cannot be raised in the District Courts, even defensively.

A number of amicus briefs were submitted. The brief filed by Texas supporting the Hornes is here. The brief supporting the Hornes filed by the Cato Institute, the NFIB, the Center for Constitutional Jurisprudence, and the Reason Foundation is here. Also supporting the Hornes are the U.S. Chamber of Commerce (here), and five constitutional law scholars (here). The USDA is supported with an amicus brief from the International Municipal Lawyers
Assoociation (here), and by a brief filed by Sun-Maid Raisins (here).

Koontz Continued?

The reason we began this post with a reference to the arguments in Koontz is that we're predicting that the questions that dogged the property owner's counsel in that case will continue to interest the Court here. In Justice Kagan's words, "where is the taking?" In Koontz, the Justices seemed hung up on the semantics of what was alleged to have been taken -- was it the permit, the property owner's right to develop his land, or the cash that was "suggested" he donate to improve the government's land? In Horne, the USDA has taken a similar approach, arguing that the Hornes have not identified what property has been taken -- is it the raisins they were required to turn over, the cash they must pay as a penalty for not doins so, or their right to sell their raisins? Hopefully, counsel for the Hornes will use the oral arguments to clarify that issue, for if the Court can identify "the taking," then the Hornes will have gone a long way to convincing it that they should be able to raise it as a defense.

"Takings" Or "Just Compensation?" -- A Remedies Question

This lead us to what we believe is the issue at the heart of the case: whether the Fifth Amendment contains a "Takings" Clause, or only a "Just Compensation" Clause. The focus of the analysis in regulatory takings law recently, especially after Lingle v. Chevron USA, Inc., 544 U.S. 528 (2005), has been whether a government action is the functional equivalent of an exercise of eminent domain. In many regulatory takings and inverse cases, the usual remedy being sought -- just like in most eminent domain cases -- is the recovery of just compensation. But that's only part of the equation, and there's no reason that after-the-fact compensation is the exclusive remedy under the Fifth Amendment.

The USDA's brief carefully labels it the "Just Compensation Clause" as if that were the only remedy available to a property owner objecting to what it believes is unconstitutional action by the government. But that's never been the case, and property owners have the ablity to challenge an action because it would be a taking if the government were to do it, even if they do not pursue compensation. For example, in Kaiser Aetna, the property owner was not seeking compensation, but only a declaratory judgment that were the Corps of Engineers to impose a navigational servitude on the private marina, it would be a taking. The Court agreed, holding that "if the Government wishes to make what was formerly Kuapa Pond into a public aquatic park after petitioners have proceeded as far as they have here, it may not, without invoking its eminent domain power and paying just compensation, require them to allow free access to the dredged pond." Kaiser Aetna, 444 U.S. at 180. In Loretto, the property owner was not only seeking compensation but an injunction. In Nollan, the property owner sought a writ of mandate ordering the offending condition struck from the permit, and not compensation.  

The USDA’s argument is based on the idea that a court does not have the power to stop the agency action that is claimed to be a taking. In other words, a court cannot tell the USDA that it can’t impose reserve requirement (or the fines) on the Hornes because to do so would be a taking. Instead, the Hornes must either reserve the raisins or pay the fine and then seek "reimbursement" by way of an action in the CFC. This doesn’t make much sense, and it is a duplication of legal process and a waste of time to shuttle back and forth from a District Court to the CFC when the same issues are at stake. Indeed, where fines are at issue, the USDA’s "pay-first-then-sue-for-reimbursement" theory reeks of inefficiency and needless process.

If a majority of the Court is inclined to rule in the Hornes' favor, it can limit its ruling by issuing a narrow opinion that deals only with their ability to defend against the USDA, and offering no opinion on the merits of the takings defense. Doing so should allay the fears expressed by the USDA and its amici that a ruling in favor of the Hornes will open the floodgates to courts invalidating vast segments of the regulatory state under the Takings Clause.

Predictions

We're not going to predict the outcome, at least not yet. But we do offer these prognostications: as in Koontz, Justice Scalia may be the key. If he's convinced that the Hornes can articulate where's the taking, it doesn't seem like a stretch to conclude they can raise that claim defensively. And Scalia has shown an ability to get other Justices to join him in takings cases. Justice Breyer will probably talk about the Penn Central test, as he always seems to, and Justice Kennedy will likely do likewise about Due Process. As for the others, we don't expect them to cross the usual lines in takings cases. And, of course, Justice Thomas won't ask anything (we end on an easy one).

More to follow after the arguments on Wednesday.

BIO In Eminent Domain Pretext Case: Redevelopment Plan Established "Order Out Of Chaos"

Here's the Brief in Opposition which responds to the cert petition in Ilagan v. Ungacta, No. 12-723 (cert. petition filed Dec. 7, 2012).

In that case, an Agana, Guam property owner is alleging that a taking of his residential property so that his neighbor (the former mayor of Agana) could have a driveway for his lot, violated the Public Use Clause. Of course, the taking was not justified by private necessity but as part of the "Agana Plan," an economic development plan adopted following World War II to reconfigure irregular lot lines in the city. The Guam trial court invalidated the taking, but the Guam Supreme Court unanimously reversed, holding that under Kelo v. City of New London, 545 U.S. 469 (2005), the taking was for a public use.

Disclosure: we represent the Owners' Counsel of America, which has joined an amici brief supporting the property owner/petitioner in this case.

The BIO argues that the taking was accomplished pursuant to the Agana Plan, and therefore served a valid public purpose because it remedied the problem of oddly-shaped lots in Agana:

The Agana Plan was adopted shortly after the devastation of Agana during World War II to promote the economic development of Guam’s capital city and to establish "order out of chaos" by straightening the border lines and uniting fractional lots in order to form geometric, orderly blocks. In holding that the taking in this case was for a public purpose, the Court rejected the trial court’s finding that multiple, contemporaneous takings were required to establish a valid economic development plan, and thus rejected the trial court’s isolated review of the taking at issue separate and apart from the Agana Plan.

....

Petitioners allege the taking of Lot 237-3-2-1 provided no public purpose and was simply a disguised impermissible taking benefitting only the Respondents. Petitioners effectively request that the taking in the matter be reviewed in isolation from the Agana Plan from which it resulted. However, the record reflects that there is no dispute that the Agana Plan was adopted for valid public purposes consistent with the Public Use Clause. Petitioners did not dispute such a fact in the lower courts, and each of the trial court, the Supreme Court of Guam, and the Ninth Circuit Court have found that the Agana Plan was adopted for valid public purposes.

In conclusion, this case raises no issue of takings law of general importance warranting this Court’s review.

BIO at 1-2 (footnotes omitted). In other words, "nothing to see here folks, move along."

The BIO argues that the Agana Plan is for redevelopment and thus serves a public purpose. It points out that indeed, the Plan was validated by the Ninth Circuit many years ago in Government of Guam v. Moylan Motor Co., Inc., 407 F.2d 567 (9th Cir. 1969). It attempts to narrow the issue down to whether Kelo required that the taking of a single parcel be part of "multiple and contemporaneous takings." We thought differently of course, and the amici brief ably argues that this is a case where pretext is at issue, and the Supreme Court should provide the lower courts with standards for what that means.

The Supreme Court's docket report for the case is here,

Brief in Opposition, Ilagan v. Ungacta, No. 12-723 (Mar. 13, 2013)

Food Fight: Environmentalist Top Chef Supports Oyster Farmer Against Other Enviros In Ninth Circuit

Undercutting the trope that the lawsuit by a Marin County, California oyster farm to keep operating is all a right-wing plot (see also this story), famed Berkeley chef and food guru Alice Waters has asked the Ninth Circuit to file an amicus brief in support of Drakes Bay Oyster Company in its appeal of the District Court's denial of its request for a preliminary injunction. As we noted here, the Secretary of the Interior denied the Company's efforts to renew its license for its decades-old farming operation in the Point Reyes National Seashore. The Ninth Circuit has issued an injunction pending appeal, and ordered expedited calendaring.

Joining Waters on the brief is another nearby oyster farmer (located on private land), a San Francisco restaurant, the California Farm Bureau and two county farm bureaus, and "Food Democracy Now," "Marin Organic," and the "Alliance For Local Sustainable Agriculture."

The point of the brief is to repudiate the notion expressed by what the brief calls "traditional conservationists and wilderness advocates" that a human or commercial presence in the area is repugnant. A fine example of that appears in a quote in this story on the case from the San Francisco Chronicle: 

Conservation groups were pleased [with Interior's decision to shut down the farm]. The ruling "affirms that our national parks will be safe from privatization schemes, and that special places like Drakes Estero will rise above attempts to hijack Americans' wilderness," said Neal Desai of the National Parks Conservation Association.

We're not sure how an operation that has been there since the 1930's -- well before the existence of the National Seashore -- can be considered "hijacking" of wilderness or a "privatization scheme," but there you have a reflection of a certain mindset in a tidy little quote. As a reminder we provide the above video, a classic bit from The Matrix wherein the bad guy expresses this thoughts on humans and the environment.

Waters' amicus brief begins:

There is no single voice that can speak for the "public interest" in keeping the Drakes Bay Oyster Company [Oyster Farm or DBOC] open until the Secretary of the Department of the Interior’s [DOI] Order to close can be reviewed.

Closing the Oyster Farm would have a broad, negative and immediate impact, on the local economy and the sustainable agriculture and food industry in the San Francisco Bay Area, on the school children of the workers who live in the housing units onsite, and, in the longer term, on food security and the U.S. balance of trade. Closing down the oyster farm in Drakes Estero, which has existed since the early 1930s, would be inconsistent with the best thinking of the modern environmental movement and further tear at the fabric of an historic rural community that the Point Reyes National Seashore [Seashore] was created to help preserve.

On the other hand, the sounds of motorcycles racing by Drakes Estero on the adjacent highway will not cease if the Oyster Farm is closed. The ranches that surround Drakes Estero will remain in the area zoned "pastoral" right up to its shoreline. California’s retained fishing and mineral rights in Drakes Estero will still exist. Closing down the Oyster Farm would simply be a mark in the “win column” for the National Park Service [NPS] and other traditional conservationists, wilderness advocates stuck in an archaic and discredited preservationist paradigm, whose apparent aim is to convert Drakes Estero to titular wilderness status at any cost.

Br. at 1-2 (emphasis original). Pages 10-14 detail how "the environmental movement is evolving ... to become more 'people friendly and to deal with 'working landscapes,' including fisheries." The brief is also worth reading for its history of shellfish farming in California and the impacts, vel non, of oyster cultivation on the environment.

[Proposed] Amici Curiae Brief of Alice Waters, et al., Drakes Bay Oyster Company v. Salazar, No. 13-15227 (...

Kelo Counsel To Speak At U. Hawaii

Scott Bullock, the Institute for Justice lawyer who argued Kelo will be speaking next Monday at the University of Hawaii School of Law about "Litigating for Liberty: Non-traditional Public Interest Law."

Details here.

One More Amicus Brief In Western Water Rights Takings Case

Here's one more amicus brief (Public Lands Council, National Cattlemen's Beef Association, Oregon Cattlemen's Association, Washington Cattlemen's Association, and Nevada Cattlemen's Association) supporting the cert petition in Estate of Hage v. United States, No. 12-918 (cert. petition filed Jan. 17, 2013).

Estate of Hage is the case in which the Federal Circuit held that a 22-year old takings case was not ripe because even though the agency denied Hage's every application for a grazing permit, it might issue a special use permit that might allow the use of the water he alleges was taken. The issue in the case is whether it is a taking for the government to cut off physical access to a property owner's vested right to use water.

Earlier, we posted two other amicus briefs supporting the granting of cert:

• Brief of Pacific Legal Foundation and the U.S. Cattlemen's Association

• Brief of the Mountain States Legal Foundation

Next up is the BIO. We'll post it when filed.

Brief Amici Curiae of the Public Lands Council, National Cattlemen's Beef Association, Oregon Cattlemen's A... 

Enviro Lawyers Off Target With Criticism Of Callies, Says Callies

The other shoe has dropped, and in "Environmental Lawyers Off Target With Criticism Of Callies," U. Hawaii lawprof David Callies responds to and rebuts an earlier op-ed by the Director of the Sierra Club and an Earthjustice lawyer which criticized Professor Callies' recently-published law review article (and follow-up interview) detailing the stunning success rates certain parties such as the Sierra Club and Earthjustice enjoyed in the Hawaii Supreme Court from 1993-2010.

In that article, Callies labeled the record of the court on property issues "appalling" (80% overall success rate, 65% of cases reversing the Intermediate Court of Appeals). As Callies said in an earlier presentation, "Ninety percent of the time, government and the private sector are wrong? Give me a break." (Remember, this is the court that held "western concepts" of property law such as exclusivity "is not universally applicable in Hawaii.")

The responsive op-ed by the environmental lawyers upped the ante by calling Callies a liar ("a lie told often enough [that it] becomes the truth"), and a sell-out (listing all of the "bad" clients he's represented).

We believed the response in the law review to Callies by his U.H. Law colleague Professor Denise Antolini that defended the Supreme Court's record on an opinion-by-opinion basis was a more effective comeback than ad hominems, but what do we know.

Given the attack, it shouldn't be surprising that Callies has offered up an response, writing in Honolulu Civil Beat:

There they go again, vilifying and attacking the messenger rather than sticking to the issues. In response:

I have never ever suggested that the Hawaii Supreme Court is corrupt, as Harris and Moriwake clearly imply. Previously biased, yes. Consistently ruling in favor of the Sierra Club, Native Hawaiian Legal Corporation and Earth Justice and similar NGO interest groups and against property owners and government nearly 90 percent of the time speaks for itself.

I make no apologies for attempting to defend the rights of all landowners to use their property. The U.S. Supreme Court has equated protection of such rights with civil rights like freedom of press, expression, and security against unreasonable search and seizure. I agree. The use of land is not a privilege but a right subject to governmental exercise of its police power for the protection of the health, safety and welfare of its citizens. That does not mean any landowner can develop at any level or density anywhere, and for Harris and Moriwake to suggest otherwise is a gross mischaracterization of my position, as I expect they know.

Read Callies' entire rebuttal here.

Will this prompt a sur-reply? We doubt it, since, as we noted earlier, perhaps the best response when you have a 90% Supreme Court success rate is no response at all. But we were wrong before, so maybe this is one of those "stay tuned" stories.

New Cert Petition: Tombstone v. United States

This one is not about takings, but this cert petition does relate to land and water, and come on, when the case involves Tombstone, Arizona calling out the federal government to a showdown -- not at High Noon, but in the High Court -- do you think we could have passed up the opportunity to post it? No way, hombre.

Here are the Questions Presented. It's one of those QP's with a short introduction which lays out the facts, so we won't repeat them here:

Most fundamentally, this petition asks whether a state has any right to exist under the Tenth Amendment. Under the authority of a State of Emergency declared by the Governor of Arizona, the historic City of Tombstone sought to freely restore its municipal water supply infrastructure inholdings, located within Arizona’s Coronado National Forest, after they were destroyed by a natural disaster. Even though the City faced a serious public health and safety emergency consisting of the loss of adequate water for public consumption and fire suppression, the Forest Service refused to allow the City to restore its essential infrastructure without first obtaining special use authorizations. The specific questions presented for review are:

1. Whether the City of Tombstone is likely to succeed on the merits of the claim that the Forest Service violated the Tenth Amendment by directly regulating the City in such a way as to impede restoration of essential municipal infrastructure during a State of Emergency, and thereby threaten the continued existence of a political subdivision of the State of Arizona.

2.  Whether the City of Tombstone is likely to succeed on the merits of the claim that this Court has implicitly overturned Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528 (1985), and that, under the traditional governmental functions test applied in National League of Cities v. Usery, 426 U.S. 833 (1976), the U.S. Forest Service violated the Tenth Amendment by preventing the City from freely restoring its essential municipal infrastructure during a State of Emergency.

3.  Whether the City of Tombstone is likely to succeed on the merits of the claim that the Forest Service violated the Tenth Amendment by preventing the City from freely restoring its essential municipal infrastructure during a State of Emergency because the Property Clause, like all other delegated powers of the federal government, is limited by the principle of state sovereignty.

When the Tenth Amendment is involved, who knows what is in the cards, and we'll leave it up to others who can more accurately predict what the Court will do with this petition.

Will Tombstone continue to be "The Town Too Tough to Die?" Stay tuned.

Petition for a Writ of Certiorari, City of Tombstone v. United States, No. 12-1069 (Feb. 27, 2013)