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PropertyProf's Summary Of The SCOTUS Beachfront Takings Case

In What's At Stake in Stop the Beach Renourishment, Lawprof D. Benjamin Barros posts a comprehensive summary of "judicial takings" case accepted for review by the US Supreme Court, Stop the Beachfront Renourishment, Inc. v. Florida Dep't of Environmental Protection, No. 08-11 (cert. granted. June 15, 2009). Raises several interesting points and worth a read.

Tuesday Round-Up

Here are items which we've been reviewing today:

• Dwight Merriam's thoughts on SCOTUS nominee, Second Circuit Judge Sonia Sotomayor.

• A report that the "Florida Hometown Democracy" initiative has made the 2010 ballot. According to the report "[i]f the proposal gets 60 percent approval at the polls, Hometown Democracy would require local referendums on changes to city and county comprehensive plans."

• From the Willets Point United blog: "Willets Point United Hires NY State's Top Eminent Domain Attorney." (They've hired our Owners' Counsel of America colleague Michael Rikon.)

• The New York Court of Appeals (that state's highest court) will be hearing arguments in the Atlantic Yards cases. The NY Observer's report here, and the NY Times report here.

• Speaking of takings for sports facilities, Professor Gideon Kanner dishes on using taxpayer money to attract and support stadiums and arenas.

• My Damon Key colleague Mark Murakami links to a Maui News article about a different approach to beach erosion issues.

Cert Denied Update

Last week's cert grant by the Supreme Court in Stop the Beachfront Renourishment, Inc. v. Florida Dep't of Environmental Protection, No. 08-11 (cert. granted, June 15, 2009) got us to thinking about other petitions in takings and land use cases which we've discussed, so here's an update on the cases denied review:

• Empress Casino Joliet Corp. v. Giannoulias, No. 08-945 (cert. petition filed Jan. 21, 2009) - the Illinois Supreme Court held (896 N.E.2d 277 (Ill. 2008) that a regulation which imposes a 3% "surcharge" on Illinois casinos with gross receipts over $200 million per year, and then gives the money to horse racing tracks is not a taking of property. Several casinos challenged the law asserting, among other arguments, that the redistribution of their money to tracks was a taking.  The Illinois Supreme Court held that the regulation was a tax, and not subject to takings analysis. Cert denied June 8, 2009.

• Fairbanks North Star Borough v. U.S. Army Corps of Engineers, 543 F.3d 586 (9th Cir. 2008)- the Ninth Circuit held that since the Corps' jurisdictional determination is not a final agency action, the property owner cannot immediately challenge it under the Administrative Procedures Act. Cert denied June 22, 2009.

• Joy Builders, Inc. v. Town of Clarkstown, 11 N.Y.3d 863 (2008) - the New York Supreme Court Appellate Division upheld the imposition of a fee in lieu of a dedication of land. Cert denied April 20, 2009.

• Navajo Nation v. United States Forest Service, 535 F.3d 1058 (9th Cir. 2008) - the Ninth Circuit determined it was not a "substantial burden" on the religious exercises of Native American tribes under the Religious Freedom Restoration Act for the Forest Service to allow a ski resort to make artificial snow from recycled sewage water on a mountain considered by the tribes to be sacred. Cert denied June 8, 2009.

• McClung v. City of Sumner, 548 F.3d 1219 (9th Cir. 2008) (cert petition filed Mar. 2, 2009) - the Ninth Circuit held that legislatively imposed exactions should be analyzed under the Penn Central ad hoc standards and not under Nollan/Dolan. Cert denied June 8, 2009.

• AmeriSource Corp. v. United States, No. 08-497 (cert. petition filed Oct. 15, 2008) - the Federal Circuit held that the seizure as evidence was not a taking for public use because the seizure was an exercise of the government's "police power," and not an exercise of eminent domain. Cert denied March 23, 2009.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Eminent Domain Academic Round-Up: Pretext And Compensation

I've been reading some noteworthy law journal articles on the subject of eminent domain --  two on the issue of pretext, and one on just compensation. Worth reviewing.

• Daniel S. Hafetz, Ferreting Out Favoritism: Bringing Pretext Claims After Kelo, 77 Fordham L. Rev. 3095 (2009).

  The plaintiffs in Goldstein based their pretext claims on both Justice John Paul Stevens's brief discussion of pretext in the majority opinion of Kelo and Justice Anthony Kennedy's more lengthy discussion in his concurrence. Acknowledging that "[t]here may be private transfers in which the risk of undetected impermissible favoritism of private parties is so acute that a presumption . . . of invalidity is warranted," Kennedy’s fifth-vote concurrence identified the possibility of "a more stringent standard of review than [rational basis review] for a more narrowly drawn category of takings." Although the Second Circuit rejected the application of this heightened pretext standard in Goldstein, it acknowledged that "Kelo opened up a separate avenue for a takings challenge" where the plaintiff alleges the asserted public purpose is a pretext for bestowing a private benefit.

  Article available here from the Fordham Law Review. (In the section on Goldstein and Twombly, this inversecondemnation.com post is cited.)

• Daniel B. Kelly, Pretextual Takings: Of Private Developers, Local Governments, and Impermissible Favoritism, 17 Sup. Ct. Econ. Rev. (forthcoming Summer 2009).

  Since Kelo v. City of New London, the preferred litigation strategy for challenging a condemnation that benefits a private party is to allege that the taking is "pretextual." This Article contends that, although pretextual takings are socially undesirable, the current judicial test for identifying such takings is problematic. Yet an alternative, intent-based test might be impracticable, as well as underinclusive: condemnors often have mixed motives, particularly when confronted with a firm’s credible threat to relocate. Instead, the Article develops a framework that emphasizes informational differences between local governments and private developers. When the government lacks information regarding the optimal site for an assembly, the government may need to rely on a private party to identify, as well as develop, a particular site. However, when the government itself possesses information regarding the site, precondemnation private involvement, as well as post-condemnation involvement by a preferred developer, is generally unnecessary. Such involvement increases the likelihood of a pretextual transfer without any corresponding public benefit. The Article concludes that a burden-shifting framework, analogous to Title VII’s test for identifying pretext, can be adopted in the takings context. The new framework is then applied to several situations in which allegations of pretext are likely to arise.

  Available here from SSRN.

• Matthew Cory Williams, Restitution, Eminent Domain, and Economic Development: Moving to a Gains-Based Conception of the Takings Clause, 41 Urban Lawyer 183 (Winter 2009) (25th Smith-Babcock-Williams Student Writing Competition Winner).

Post-Kelo, those recognizing the value of eminent domain to aggregate property for redevelopment have suggested that the real focus should not be on whether economic development is a public purpose, but on the amount of compensation given to the takees. Indeed, assuming takees werec compensated at the takee’s subjective value, the problem of forcing takees to "sell" their property to the government would be a much less divisive issue. However, current measures of "just compensation" are based on the "fair market value" of the property. In response to this "under compensation," several suggestions have been made on how to raise the level of compensation, and some states have enacted measures aimed at increasing compensation levels. Proposed solutions seek to award some of the benefit of the reaggregation and development of the land, called "after value," to the takees. This article examines whether awarding after value to takees complies with the major purposes of the Takings Clause. While it examines a few of the many proposed ways to award takees a portion of this after value, this article focuses more on whether the general idea of after value complies with the philosophies underlying the Takings Clause.

Article available here for ABA members.

More Background On The Supreme Court's Beachfront Takings Case

The Eminent Domain Law Blog, published by our colleagues at Owners' Counsel of America, has summarized Stop the Beachfront Renourishment, Inc. v. Florida Dep't of Environmental Protection, No. 08-11, the takings and due process case which the U.S. Supreme Court agreed yesterday to review. 

Beachfront property owners along Florida's Gulfcoast, have been trying to stop an effort by local and state officials to restore the beach through renourishment, a process by which sand is dredged from the ocean floor, transported through pipes and distributed along eroded beach areas, in essence adding sand to widen the beach. This proposed beach renourishment project would cover nearly seven miles of shoreline and widen the beach by approximately 210 feet in Destin, FL.

A key issue in the litigation thus far, which has moved from Circuit Court to the First District Court of Appeal to the Florida Supreme Court, is that by adding sand to the waterfront and restoring the beach, the State of Florida will assume ownership of some of the beach. The property owners have argued that their littoral rights would be limited, amounting to a regulatory taking, without just compensation.

Check it out here. (I am the Hawaii member of Owners' Counsel.)

The Questions Presented are posted here, and links to other reports are here.

SCOTUS Beachfront Takings Case Links

Here are links and other items of interest about Stop the Beachfront Renourishment, Inc. v. Florida Dep't of Environmental Protection, No. 08-11 (cert. granted. June 15, 2009):

• Cert petition, BIO's and amicus briefs (via SCOTUSblog)

• ABA Journal: Surprise: Supreme Court Grants Cert in Beachfront Takings Case

• The decision below: Walton County v. Stop the Beach Renourishment, Inc., 998 So.2d 1102 (Fla. Sep. 29, 2008)

• ABA Journal: Up Against the Seawall

• Florida Land Use Law blog's take on the Florida Supreme Court decision

• PropertyProf Blog's brief reaction to the cert grant

• Volokh Conspiracy: Supreme Court Takes Regulatory Takings Case

• Dwight Merriam's thoughts at IMLA's Local Government blog.

• Pacific Legal Foundation's (the only organization to file an amicus at the cert stage) summary of the issues.

• Law of the Land blog's summary.

SCOTUS To Review Beachfront Takings Case: Can A Court Decision "Take" Property?

In Stop the Beachfront Renourishment, Inc. v. Florida Dep't of Environmental Protection, No. 08-11 (cert. granted. June 15, 2009), the US Supreme Court agreed to review a case that raises several important takings issues, including the issue of whether a court decision can take property. The ABA Journal's July 2006 report "Up Against the Seawall" tells the backstory on the case and highlights other beach issues.

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

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

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

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

On the first question, while the Court has implicitly recognized that a taking can occur if a court decision departs from long-standing principles it has yet to directly address the question. The cert petition raised a split in lower court authority by pointing out that in Robinson v. Ariyoshi, 753 F.2d 1468 (9th Cir. 1985), the Ninth Circuit held the Hawaii Supreme Court's radical restructuring of Hawaii riparian water rights in the McBryde case was a judicial taking (the U.S. Supreme Court reversed Robinson on the basis it was not yet ripe for review under Williamson County).

The Hawaii appellate courts are presently reviewing a similar case. In Maunalua Bay Beach Ohana 28 v. State of Hawaii, an appeal now pending in the Intermediate Court of Appeals, the issue is whether the state or littoral landowners are entitled to ownership of accreted land. In "Act 73," the Hawaii Legislature declared that shoreline land naturally accreted belongs to the State of Hawaii and is public property. The act overturned the age-old rule of shoreline accretion and erosion, which held that beachfront owners lose ownership of land when it erodes, but gain it when it accretes.  Instead of these balanced rules, Act 73 made the erosion/accretion equation one-sided: the State wins every time. We filed an amicus brief in the appeal, a copy of which is available here.

More to come.

SCOTUS Nominee Sotomayor On Takings Issues

Second Circuit Judge Sonia Sotomayor, the nominee to fill Justice David Souter's seat on the U.S. Supreme Court, has served as either a federal District or Circuit Judge for 18 years during which she's either authored or sat on panels in cases involving eminent domain or regulatory takings.  Here's an admittedly unscientific sampling of those decisions, which reveal a mixed bag on the property issue:

• Brody v. Village of Port Chester, 434 F.3d 121 (2d Cir. 2005) (Sotomayor on panel).  This decision represents the most favorable case for property owners, although it is more a due process than a takings case.  The panel held that New York's eminent domain law deprived the property owner of due process notice, and that when the law provides a short time frame to institute a challenge to a condemnation, the government has an obligation to provide express notice of the time frame. The court held:

  Thus, while the legislative decision to condemn is not reviewable, the purpose of the condemnation is. The role of the judiciary, however narrow, in setting the outer boundaries of public use is an important constitutional limitation. To say that no right to notice or a hearing attaches to the public use requirement would be to render meaningless the court's role as an arbiter of a constitutional limitation on the sovereign's power to seize private property.

  The district court's opinion on remand is summarized here.

• In an earlier decision in the same litigation, the Second Circuit in an opinion authored by Judge Sotomayor held that a property owner had standing to challenge the lack of individual notification of the taking of his property, and that the owner was not precluded from asserting a due process challenge because he would not have raised it as a defense to the taking under New York's eminent domain law.  On the issue of the remedy available to the property owner (who sought return of his land), Judge Sotomayor refused to order the return of the property, and wrote:

  We recognize that at least one other circuit appears to order reinstatement and backpay as a remedy in employment cases before a new hearing is held. This intermediate remedy would be analogous to ordering a return of Brody's property upon a finding of a due process violation, and then requiring the Village to begin again and initiate condemnation procedures that complied with due process, regardless of the likely merits of Brody's challenge in the Article 2 process. While we express no view on what the appropriate remedy would be for denials of due process in the employment context, we find that the reliance interests of third parties in this case are sufficiently compelling that Brody is entitled to a return of his property only if he can prove that any denial of due process made a difference in the condemnation proceedings. Moreover, in cases such as this one, we believe that these same reliance interests create a strong incentive for the condemnor to comply with the requirements of due process before the property has been condemned and development has begun, in light of the risk that a court somewhere down the road might order a return of the property.

  Brody v. Village of Port Chester, 345 F.3d 103, 120-121 (2d Cir. 2003) (citations and footnote omitted).  Cf. Ciszewski v. New York, 279 Fed. Appx. 39 (2d Cir. 2008) (not reported in the Federal Reporter) (unsigned summary order; Sotomayor on panel) (property owner precluded from raising due process challenges to a taking when owner did not challenge public use).

• Didden v. Village of Port Chester, 173 Fed. Appx. 931 (2d Cir. 2006) (not reported in the Federal Reporter) (unsigned summary order; Sotomayor on panel) appears to be the the only case in which a Kelo-like situation was presented (the order cited Kelo as the reason it was "obliged to conclude that [the property owners] have articulated no basis upon which relief can be granted." Professor Richard Epstein has summarized the case and Judge Sotomayor's role in it here:

I have written about Didden in Forbes. The case involved about as naked an abuse of government power as could be imagined. Bart Didden came up with an idea to build a pharmacy on land he owned in a redevelopment district in Port Chester over which the town of Port Chester had given Greg Wasser control. Wasser told Didden that he would approve the project only if Didden paid him $800,000 or gave him a partnership interest. The "or else" was that the land would be promptly condemned by the village, and Wasser would put up a pharmacy himself. Just that came to pass. But the Second Circuit panel on which Sotomayor sat did not raise an eyebrow. Its entire analysis reads as follows: "We agree with the district court that [Wasser's] voluntary attempt to resolve appellants' demands was neither an unconstitutional exaction in the form of extortion nor an equal protection violation."

Maybe I am missing something, but American business should shudder in its boots if Judge Sotomayor takes this attitude to the Supreme Court. Justice Stevens wrote that the public deliberations over a comprehensive land use plan is what saved the condemnation of Ms. Kelo's home from constitutional attack. Just that element was missing in the Village of Port Chester fiasco. Indeed, the threats that Wasser made look all too much like the "or else" diplomacy of the Obama administration in business matters.

• Gherardi v. New York, 161 Fed. Appx. 60 (2d Cir. 2005) (not reported in the Federal Reporter) (unsigned summary order; Sotomayor on panel) gives some indication that Judge Sotomayor has no real issues with the regulatory ripeness rules of Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985).  The court in Gherardi rejected an as applied takings challenge because the plaintiffs did not allege they applied for, and were denied, development approvals.  See also Leone v. Whitford, 300 Fed. Appx. 99 (2d Cir. 2008) (not reported in the Federal Reporter) (unsigned summary order; Sotomayor on panel) (affirming the dismissal of a regulatory takings claim for failure to exhaust administrative remedies under Williamson County); Webster v. National Fuel Gas Supply Corp., 268 Fed. Appx. 85 (2d Cir. 2008) (not reported in the Federal Reporter) (unsigned summary order; Sotomayor on panel) ("We dismiss the inverse condemnation claim encompassed in Webster's complaint in order to allow the New York state courts to adjudicate this claim in the first instance.").

• Also in the ripeness context, Judge Sotomayor was on the panel in a prisoner habeas corpus appeal, in which the court contrasted prudential ripeness with "more fundamental and more rigid, constitutionally-based" ripeness:

  The notion of ripeness, as a doctrine of prudence, has become a staple in the adjudication of claims that a state or municipality has taken property without providing just compensation. In that context, a plaintiff must obtain a final decision from the regulatory body that the plaintiff alleges has taken his or her property, and the plaintiff must also seek compensation through any procedures the state has in place. See Suitum v. Tahoe Reg'l Planning Agency, 520 U.S. 725, 733-34, 117 S.Ct. 1659, 137 L.Ed.2d 980 (1997). Until a plaintiff can demonstrate that both of these requirements are met, the plaintiff's regulatory takings claim is generally deemed not ripe. Id. But since the doctrine is driven by judicial prudence rather than the Constitution, a court is free to exercise jurisdiction over such a case when the circumstances so warrant. See Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1012-13, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992) (noting that a takings plaintiff's opportunity to apply for a special permit "goes only to the prudential 'ripeness'" and deciding that prudence dictated that the Court reach the merits in that case-given that Article III injury had properly been alleged-since the special permit scheme that the plaintiff had not complied with had been established only late in the litigation).

  Simmonds v. INS, 326 F.3d 351, 358 n.7 (2d Cir. 2003).

• Judge Sotomayor was the district judge in a bankruptcy case which involved a claim of a regulatory taking.  In In re St. Johnsbury Trucking Co., 199 Bankr. 83 (S.D.N.Y. 1996) and 191 Bankr. 122 (S.D.N.Y. 1996), she summarily dismissed a claim that the regulation was a taking even though she agreed that they wiped out the value of property ("St. Johnsbury protests that these two sections, as distinct from the other undercharge defenses, "destroy the entire economic value of St. Johnsbury's undercharge claims" against small shippers and for claims accruing prior to September 30, 1990. Indeed they do."):

  As a matter of law, the question of whether a regulatory action rises to the level of an unconstitutional taking is governed by the three-part test enunciated in Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978) and refined in Connolly v. Pension Benefit Guarantee Corp., 475 U.S. 211, 106 S.Ct. 1018, 89 L.Ed.2d 166 (1986). The Whittier court analyzed the takings issue raised by St. Johnsbury in light of Connolly and I agree with its analysis. Whittier, 57 F.3d at 650-51. Connolly held that Congress has the freedom to "adjust the benefits and burdens of economic life to promote the common good." Connolly, 475 U.S. at 225, 106 S.Ct. at 1026. That is what Congress did by enacting the Rates Act.

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

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

Well, it turns out that it really is good.

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

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

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

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

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

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

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

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

COUNCILMAN RAWLS: . . . There’s none.

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

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

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

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

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

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