inversecondemnation.com

Land Use Round Up

Some interesting items, worth reading:

• According to this story, the preferred developer of the New London, Connecticut project that gave us Kelo apparently is on the ropes.  Professor Gideon Kanner's take on the latest misstep is here.

• From Dean Patty Salkin's Law of the Land blog, a summary of Agripost, LLC v. Miami-Dade County, No. 05-16499 (11th Cir. Apr. 22, 2008), the latest case on the Williamson County ripeness/res judicata Catch-22. 

• From the Court of Federal Claims comes Schooner Harbor Ventures, LLC v. United States, No. 06-87L (Apr. 15, 2008), where the landowner sought compensation after the Fish and Wildlife Service designated property as critical habitat for the Mississippi Sandhill Crane.  The landowner asserted that the designation killed a deal for it to sell the property to the Navy.  Too bad said the CFC, the right to sell the property to the Navy without restrictions is not a "property" right subject to Fifth Amendment protections:

The plaintiff’s argument fails in that the plaintiff is asserting that it had the right to sell its property to the government, without conditions imposed, in this instance to meet regulatory burdens  imposed on the Navy, by obtaining the mitigation parcel. Whereas, the right to alienate the property is a cognizable property interest, the right to sell the property to the government at a particular price and without conditions is not a cognizable property interest which is protected by the Fifth Amendment. 

Slip op. at 13. 

• The LA Times has commentary on California's upcoming Propositions 98 and 99, two items on the ballot regarding the exercise of eminent domain power and property rights:

Your decision on Prop. 98 may come down to how you answer two questions: Is it worth risking future public works projects, including water? Is rent control bad? If the answer is yes to both questions, vote yes on 98. If the answer is no to either question, vote no -- then yes on 99.

Kauai Springs Zoning Permit Appeal

Today we filed the Opening Brief in Kauai Springs' appeal from the January 2007 decision by the Kauai Planning Commission to deny three zoning permits to the small, Kauai-family-owned water bottling company.

The case is an appeal from an agency decision under the Hawaii Administrative Procedures Act (a procedure known in other jurisdictions as a petition for a writ of administrative mandate or a petition for a writ of mandamus).  I won't go into the details of the case in this post, since the brief spells out the facts and the arguments in support.   

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

• A May 2006 story about the case from the Honolulu Star-Bulletin

• A story from the Kauai newspaper about the TRO that halted the County's attempt to shut the business down while the appeal was being considered.

• Another story about the preliminary injunction that allowed Kauai Springs to stay open.

• "Kauai Springs: Still Open for Business" from Hawaii Reporter.

The Opening Brief is posted here (2.5mb pdf).

County Motion in Maui Affordable Housing Exaction Case

The County of Maui has filed a motion for summary judgment in the federal court challenge to the County's affordable housing exaction ordinance.  The memorandum in support of the motion is posted here (215k pdf).

The Maui ordinance, enacted last year, imposes a 40% to 50% affordable requirement on new housing developments.  I posted on the case earlier here (contains a link to the complaint), and analyzed the legal problems with the ordinance under state law here .

The plaintiff landowner earlier filed a motion for partial summary judgment (1.5mb pdf) asking the court to declare the ordinance unconstitutional on its face under the Nollan/Dolan doctrine of unconstitutional exactions, which requires the government to show a substantial nexus between the exaction and some problem caused by the property owner before the government may demand tribute as a condition of development.  The exaction must also be roughly proportional to the problem.  The plaintiff's motion is posted here.  See this post for more on the nexus analysis.

The hearing on both motions is currently set for June 2, 2008, at 9:45 a.m., before District Judge Ezra.

Disclosure: I presented testimony against an earlier version of the ordinance.

New Federal Court Land Use Case Against County of Maui

A Lahaina business owner has sued the County of Maui in federal court in Honolulu.  In Goo v. County of Maui, CV 08-00172 DAE (filed Apr. 17, 2008), the Complaint alleges the County and Planning Department officials drove the International Open Market Place, a gift and craft fair, out of business by deliberately favoring a use prohibited under the zoning (a bank/credit union) over uses permitted under the zoning (plaintiff's business). 

The plaintiff also brings federal constitutional claims as well as claims for civil rights violations under 42 U.S.C. § 1983 and a Monell "deliberate indifference" theory.  The Complaint is posted here.

Condemnation Blight and Clouding Use

On the topic of the Willets Point case, inequitable precondemnation activities, and condemnation blight, thanks to Professor Gideon Kanner for reminding us of his seminal article on the subject, Condemnation Blight: Just How Just Is Just Compensation?, 48 Notre Dame Law Review 765 (1973) (the Notre Dame Law Review was then called the Notre Dame Lawyer).

I read it a while ago, but it's worth revisiting.  It received the Shattuck Prize from the American Institute of Real Estate Appraisers (now the Appraisal Institute) and it was the sole authority relied on by the Oregon Supreme Court in rejecting the New York Clement rule.  More about the subject here (Professor Kanner's Gideon Trumpet blog).  Check it out.

Blighting Property by Inequitable Precondemnation Activities

Thanks to No Land Grab for informing us of the latest eminent domain action from New York City, this time with an interesting twist.  In Willets Point Industry and Realty Ass'n v. City of New York, No. 08-1453 (E.D.N.Y. filed Apr. 9, 2008), land and business owners in Queen's, N.Y. filed a federal court complaint alleging that the City purposefully withheld vital infrastructure improvements such as sewers, paved streets, and trash removal, among other things. 

4.  Why are the City Defendants waging this campaign of neglect against one of the City's own neighborhoods?  The reasons probably have changed over the decades but, on information and belief, at least one of the reasons behind the current campaign is clear.

5.  New York City is undertaking a project to acquire Willets Point, evicting the existing businesses (which likely will lead to their destruction), and replace them with businesses that the City deems more desirable.  The City Defendants can help this project by driving down the value of the existing businesses and their property, so that the City more easily can justify and finance the exercise of its powers of eminent domain.

Complaint at 2.  Would municipal condemnocrats* do such outrageous things?  Well, allegations like those in the latest case are hardly a new story; check out Village of Willowbrook v. Olech, 528 U.S. 562 (2000) (per curiam) where the Court held that a landowner who asserted that local officials retaliated against her for winning an earlier lawsuit against the village was entitled to bring a "class of one" equal protection claim, for example.  See also Klopping v. City of Whittier, 500 P.2d 1345, 1350 n.1 (Cal. 1972), where the court noted:

it would be manifestly unfair and violate the constitutional requirement of just compensation to allow a condemning agency to depress land values in a general geographical area prior to making its decision to take a particular parcel located in that area. The length of time between the original announcement and the date of actual condemnation may be a relevant factor in determining whether recovery should be allowed for blight or for other oppressive acts by the public authority designed to depress market value.

*My colleague Mark Murakami's term for bureaucrat/condemnors.

Opening Brief in Kona Eminent Domain Appeals: Damages for Failed Condemnations, Abatement, and Pretext

Today, we filed the Opening Brief in County of Hawaii v. Richards, No. 28882, the consolidated appeal from two eminent domain lawsuits filed by the County in 2000 and 2005.  I won't go into detail about the case and will let the brief speak for itself since I am part of the legal team representing the appellant/property owner. 

The issues in the case include:

• application of Haw. Rev. Stat. § 101-27 (1993), the statute that provides that the government must make a property owner whole and pay damages when an attempt to take property by eminent domain is discontinued or dismissed

• whether the government may concurrently prosecute more than one condemnation lawsuit at the same time

• the standards for demonstrating that the government's claim of public use is pretext to hide private benefit

The brief, minus Appendices, is posted here (1.8mb pdf)

A link to the trial court's findings, along with a summary of the case is posted here.

Cases and Links From Today's Seminar

To all those who attended today's seminar, thank you.  Here are the links to the cases I mentioned.  From the morning session on Case Law Update:

• Wilkie - Government Gone Wild! - no comprehensive federal remedy for federal interference with property
• My Advertiser op-ed on Wilkie
• Crown Point - Ninth Circuit abandons Armendariz doctrine
• Cine SK8 - one way to prove a substantive due process case
• Post-Kelo claims of pretext:

• Franco - District of Columbia Court of Appeals - allegations of pretext cannot be summarily dismissed

• Goldstein v. Pataki - Second Circuit - government's claim of public use trump claims of pretext - cert. petition filed March 31, 2008

• Brescia - shoreline setback and equitable estoppel - HAWSCT holds you gotta get your "official assurances" from the right party
• Private agreements and public process - development and settlement agreements not a substitute for zoning process

From the afternoon session on Appealing an Administrative Zoning Decision:

• Hawaii Home Infusion - venue in administrative declaratory actions under § 91-7
• CARD - can a § 91-8 declaratory action substitute for an appeal?
• Colony Surf - nonconforming uses and reliance on administrative procedures
  
• E & J Lounge - what is a "contested case?"  See also Aha Hui Malama v. Kaniakapupu v. Land Use Comm'n (July 24, 2006)
• Rees v. Carlisle - private rights of action
• Silva v. City and County of Honolulu - the basis for rational basis equal protection arguments must be in the record

Questions?  Want a copy of the vested rights/zoning estoppel law review article? Drop me an email.

Cert Petition in Goldstein v. Pataki: How to Plead Kelo Pretext

The homeowners threatened with eminent domain for the Atlantic Yards project in Brooklyn, New York have filed a petition for a writ of certiorari in Goldstein v. Pataki, 516 F.3d 50 (2d Cir. 2008).

The petition points out the schizophrenic nature of Public Use analysis after Kelo: on one hand, the Court's holding that "pretextual" takings are prohibited, and incidental public benefits are not enough, seems to invite inquiry into the motivations of the condemnor and the "actual purpose" of the taking.  On the other, the Court's continuing reliance on the sweeping language of Berman and Midkiff may suggest that any reason that is "conceivable" would insulate a taking from further judicial scrutiny.  The Second Circuit in Goldstein chose the latter path.  As I wrote here:

The crux of the issue in Goldstein was whether factual allegations of pretext could be trumped by the invocation of the Berman-Midkiff-Kelo legal standard of conceivable public use.

In other words, the appellants have effectively conceded what Rosenthal found to have been a complete defense to a public-use challenge: that viewed objectively, the Project bears at least a rational relationship to several well-established categories of public uses, among them the redress of blight, the creation of affordable housing, the creation of a public open space, and various mass-transit improvements.

Slip op. at 13-14.  Here's the Second Circuit's rationale in a nutshell:

We need not go further. As Berman and Rosenthal illustrate, the redevelopment of a blighted area, even standing alone, represents a “classic example of a taking for a public use.”

Slip op. at 15.  In other words, according the court, it doesn't matter one whit whether a taking was accomplished by ignoring or subverting the public process, whether a taking was designed to bestow private benefit on a government insider, or whether a taking was accomplished to punish a landowner for wanting to develop her property.  Under the Goldstein holding, such facts are not relevant unless some conceivable post-hoc linkage between the project and public benefit cannot be be conjured up from the record by government lawyers or a court.  Fat chance of that happening since -- as Justice Scalia once noted -- government agencies generally do not employ "stupid staffs" who cannot paper a record with some possible public benefits that may stem from just about any project or regulation. 

The Questions Presented by the Goldstein petition:

Is the Court’s statement that the Public Use Clause prohibits the taking of “property under the mere pretext of a public purpose, when [the] actual purpose [is] to bestow a private benefit,” Kelo v. City of New London, 545 U.S. 469, 478 (2005), a rule of general application, or is it limited to takings justified solely on economic development grounds?

Does the substantial deference afforded to legislative public use determinations under Hawaii Hous. Auth. v. Midkiff, 467 U.S. 229 (1984), apply to non-legislative condemnation decisions?

What are the elements of a Public Use Clause claim, and how should such a claim be evaluated on a motion to dismiss, given the tension between Kelo’s
assurance that “purpose” and “pretext” matter and Midkiff’s statement that courts should defer to a legislative taking that appears “rationally related to a conceivable public purpose”?

The petition is posted here.  A press release with background is here.

Kelo has been wielded too broadly.  It did not, as many courts wrongly assume, validate all economic development takings, or takings supported by a blight determination.  The only question presented by that case was whether economic development takings are, in all cases, violative of the Public Use Clause.  In other words, a claim of per se invalidity, i.e., they never are legal.  The Kelo opinion was careful to leave open the possibility that in individual cases, takings supported by claims of blight or economic development would not pass muster because the claims are pretextual or a subterfuge, a position expanded upon by Justice Kennedy in his concurring (and fifth vote) opinion. 

Finally, keep in mind that Goldstein is a pleadings case -- the plaintiffs' complaint was dismissed for failing to state a claim under Rule 12(b)(6) -- where the court held that even if everything the plaintiffs claimed were true, they were not entitled to go forward and muster proof.  That's stretching Kelo too far.

Well, What Do You Know: Condemnees Have Due Process Rights!

In a series of decisions that in any context but eminent domain would be unsurprising, the New Jersey Superior Court, Appellate Division, held that a property owner whose land is targeted for involuntary acquisition is entitled to be told about it first.

In Harrison Redevelopment Agency v. DeRose, Nos. A-0958-06T2, A-0382-07T2 (Feb. 25, 2008), the court held that a property owner was entitled to challenge the designation of his property as part of a redevelopment district despite the fact that the statute of limitations for challenging the designation had long since passed.

Many state redevelopment statutes and eminent domain codes provide that if a property owner has objections to the designation of her property as part of a redevelopment district, or has objections to public use, she has only a short time to act.  New Jersey law, for example, limits objections to 45 days; New York statutes to 30 days.  The issue, as stated by the DeRose court:

The central and recurring question before us is whether a property owner who fails to challenge a redevelopment designation containing his or her property within forty-five days of its adoption by a municipal governing body, pursuant to the Local Redevelopment and Housing Law ("LRHL"), N.J.S.A. 40A:12A-1 to -49, may still challenge, in full or in part, the public purpose of the taking of his or her property, by way of a defense in an ensuing condemnation action. To date both this court and the trial courts have rendered conflicting answers to that fundamental question in unpublished decisions.

The importance of such matters of timeliness is heightened by the fact that the LRHL does not, as it is presently worded, require a municipal governing body to provide individual advance notice to an owner that it is considering designating his or her property for redevelopment, and thus may take that property in the future through the power of eminent domain. Nor are property owners entitled under the LRHL to individual notice after a governing body approves such a designation, unless the owner had previously filed a written objection while the proposed redevelopment was being preliminarily evaluated by the local planning board.

Slip op. at 3-4.   The court held that the government has an obligation to provide property owners with "contemporaneous written notice" that "fairly alerts" the owners that their property has been designated for redevelopment, that such a designation is a finding of "public use" and allows the government to take their property by eminent domain, and that the owners have a short time in which they may object.  Slip op. at 4.  If such notice is not provided, the property owner may contest the designation when his land is condemned.  If, however, the government properly notifies the property owners, the owners must bring an action within the 45-day limitations period, and cannot wait to raise objections in their defense to a later-filed condemnation.

The notion that people whose property is targeted for acquisition deserve actual notice of that fact, and notice of a truncated objection period should not be controversial, yet it often is.  In DeRose, the redevelopment agency claimed that requiring it to actually tell property owners that their land is subject to redevelopment "would signal the 'death knell' for redevelopment in Harrison and other municipalities."  Slip op. at 39.  Telling landowners that we want your property would bring redevelopment efforts to a halt -- imagine that!   The agency never explained why this would be so, and why property owners aren't entitled to be informed of their rights (this brings to mind the other part of the Fifth Amendment -- the self-incrimination clause -- and the Miranda warnings required to be given to suspects). 

In several other recent cases, the courts rejected government's arguments that it was not required to undertake great efforts to provide an owner actual notice: 

• In Jones v. Flowers, 547 U.S. ___ (2006), the U.S. Supreme Court held that the government has an obligation to take further measures when it actually knows that its earlier attempts to notify the property owner have failed (the government's letter was marked "return to sender").

• In Brody v. Village of Port Chester, 434 F.3d 121, 132 (2d Cir. 2005), the court held that the government had an obligation to inform the landowner of the 30-day limitation period under New York law to challenge a redevelopment designation.
  

• In Divine v. Town of Nantucket, 449 Mass. 499, ___ N.E.2d ___ (July 19, 2007), the Supreme Judicial Court of Massachusetts invalidated a 40-year old taking because the owner was not provided actual notice many years ago.

The DeRose court also is worth reading because it expressly recognizes what many other eminent domain opinions fail to:

Although we have been called upon the resolve several rather abstract issues arising under our laws and constitution, we undertake that responsibility mindful that these cases, in a very tangible way, involve a real community, and the real people who live, work and own property there. 

Slip op. at 7.  Read the complete opinion here.

Thanks to New Jersey Eminent Domain Law Blog for posting links to the three opinions and summarizing their holdings here.  A report on the decision here by the New Jersey Star-Ledger.