Here's the description of Property Rights: Law and Theory (Law 608) from the course catalog:
Property rights and property theory have been essential components of Anglo-American law for centuries, and the protection of the right of private property ownership is one of the foundations on which the U.S. Constitution, the Bill of Rights, and the post-Civil War Amendments are built. In more recent times, however, property law has taken on a new role, and has been viewed differently than in the past, especially in light of the development of environmental law and the evolving concept of public trust.
Property Rights Law and Theory will focus on the history, policy, and, to some extent, the politics of property law, property rights, and related legal topics. We will examine how the right of private property was developed in common and constitutional law, the relationship of property rights to other civil rights, the role of federal and state courts in protection of property rights, how private property squares with environmental law, and the proper “place” of property rights in the modern administrative state. Included in this will be a healthy dose of practical lawyering and analysis, including the study of recent (and ongoing) on-point U.S. Supreme Court cases.
As a colleague wrote, tongue firmly in cheek: "Not since John Marshall, Thomas Jefferson and George Wythe to name but a few studied in the Wren Building have property rights been taken so seriously at America’s first law school and second oldest college!"
But seriously, this should be a lot of fun. I hope we get a good turnout. If any students at W&M are reading this, be sure to register. We'll learn stuff.
As for the pic above, it's John Marshall's shoe on the statue of Marshall and Wythe which stands outside the front entrance to the law school. Why is his shoe untied? A free prize for anyone who can tell me the answer.
Before we do so, first recall that the issue in the case is "[w]hether a compulsory public-access easement of indefinite duration is a per se physical taking." But wait, you say, this case is Property Owner, Petitioner vs. Surfrider Foundation, Respondent. Surfrider, last we checked, was a private organization and does not have the power of eminent domain, so how can this case involve a taking?
Because the essence of the petition is that this is a judicial taking.
Well yes, this kind. As we pointed out in a post-Stop the Beach Renourishment article, the posture of this case is exactly the kind of case in which the question of "judicial takings" is squarely presented. The Martin's Beach case reminds us of our old favorite, PruneYard Shopping Center v. Robins, 447 U.S. 74 (1980), where the appeal (yes, appeal) to the U.S. Supreme Court asserted that the California Supreme Court's decision holding shopping centers were a traditional forum for speech was a taking of the PruneYard's right to exclude.
Same here, where the property owner is asserting that the California Court of Appeal's decision to open the parcel to the public until such time the owner obtains a permit to "allow" him to close it "is a per se physical taking." In short, we think this is a great case in which the Court could confirm what to us is the least controversial aspect of the "judicial takings" canon: that when a court makes a ruling that is alleged to have taken property, the owners' remedy includes invalidation of the judicial act, and not only an award of just compensation. The easiest judicial takings case, like every other takings case, is the one where physical invasion is the result.
Now that we have that out of the way, here are the two items which were not featured in the petition.
First, under California law, an owner doesn't need the government's permission to exercise her right to exclude. If it were not clear enough from the common law, California statutes say so. California Civil Code § 654, presented for your consideration:
The ownership of a thing is the right of one or more persons to possess and use it to the exclusion of others. In this Code, the thing of which there may be ownership is called property.
Now, we wish we had remembered this, but fortunately a California colleague pointed it out. One of the reasons we like doing this is that we learn something new every day.
Second, since California property owners have the right to exclude others from their land (something which the courts below recognized), does it make any difference that the prohibition on excluding the public might be "temporary" or "permanent?" The courts below found that that made all the difference, because only permanent takings are physical takings. (We thought this article rebutted that argument pretty well.)
Putting that aside for the moment, our view is that another of old favorites, Kaiser Aetna v. United States, 444 U.S. 164 (1979), is very relevant here. Recall that there, the Court was asked whether the landowners' acceptance of a Corps of Engineers' section 10 dredge and fill permit, and physically connecting a private navigable waterway to the ocean, was enough to say that the owner had somehow surrendered the right to exclude. The majority held that they weren't, and reconfirmed that the right to exclude is a fundamental part of what it means to "own" something. And government-sanctioned trespassing without first taking property isn't any less of a constitutional violation just because there may be a "pull date" on the trespass, or the chance that in the future, the right to exclude may be restored. And isn't there always the possibility that an invasion won't last forever, something we pointed out in this brief in Arkansas Game & Fish, where we wrote that this is a question of compensation, not the threshold question of whether there's been a taking:
Thus, the government cannot avoid liability for a taking when it floods property simply by asserting that it did not intend for the invasion to be permanent. Temporal metaphysics are less important than the actual permanent damage and deprivation of use inflicted by an invasion.
As long as the property is damaged for a length of time, that's good enough.
As an aside, the unusual situation in Kaiser Aetna repeated itself a few years later and resulted in a Ninth Circuit decision which affirmed the principle that the right to exclude is fundamental. SeeBoone v. United States, 944 F.2d 1489 (9th Cir. 1991), where the government argued that the public's right to navigate upon a waterway predated private ownership and lay "dormant" after the property became nonnavigable, and thus any interference with right to exclude was merely temporary. Same reasoning, same result as in Kaiser Aetna.
Should the Supreme Court grant cert in the Martin's Beach case? You now know what our answer is.
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*Any other reason for not filing a brief, you ask? No time, brothers and sisters, no time. Otherwise, we'd be there.
Thanks to a colleague for giving us the heads-up about a recently-filed cert petition involving an issue we covered in a different case recently: judicial takings. Specifically, an allegation that a federal court has taken property, and as a consequence, the United States owes just compensation. The background of the case is pretty interesting because it also raises the specter of civil forfeiture.
The petition isn't all that long, so it's a quick read, and we recommend you do so. But here's the short story. Mr. and Mrs. Stanford got divorced. Apparently, Mr. Stanford was a bad guy, or at least was accused of being a bad guy. Securities fraud. But Mrs. Stanford had no part of it, and was, everyone agreed, an "innocent spouse," having been separated from the miscreant for 15 years. The Securities and Exchange Commission, however, asked the local District Court to appoint a receiver, whose job it was to preserve the Stanford assets. The court did so, and "'assume[d] exclusive jurisdiction and [took] possession of the assets, monies, properties real and personal, tangible and intangible, of whatever kind and description, wherever located ...' of [Mr.] Stanford."
The receiver kicked Mrs. S out of her home, "which he alleged to have been acquired in part with proceeds of her husband's fraud," and sought disgorgement of past support payments. Thing is, this was Texas, a community property jurisdiction. Meaning that all assets acquired by either Mr. or Mrs. Stanford during the marriage are presumed to be property in which each spouse owns an undivided one-half interest. So seizing Mr. Stanford's stuff was also seizing Mrs. Stanford's stuff, and vice-versa. Sound familiar?
She settled the case with the receiver, and then sued for compensation in the Court of Federal Claims, which promptly dismissed, concluding as it had in the other case, that the CFC lacks jurisdiction to review a district court order (sort of a federal version of Rooker-Feldman), and that Mrs. S's settlement of the receiver's claims made her takings claim pointless. The Federal Circuit affirmed.
Here are the Questions Presented:
I. Is the prejudgment seizure and sale of private property by a receiver appointed by a Court at the request of the Securities and Exchange Commission a Taking under the Fifth Amendment that entitles Petitioner to make a claim for compensation?
II. If a Taking occurs by the judicial branch of the Federal government, does the United States Court of Federal Claims have jurisdiction to award compensation?
As always, stay tuned. The Court, somewhat to our surprise, asked the feds to provide a response. We'll post that when it becomes available. Follow along on the Court's e-docket here.
The underlying matter was litigated in the District Court and the Fifth Circuit. Those courts concluded that the plaintiff did not own mineral leases in Louisiana because under federal common law, it did not acquire any rights by prescription. The plaintiff then filed a Tucker Act claim in the in the CFC seeking compensation for a judicial taking on the theory that the Fifth Circuit's ruling altered the plaintiff's previously-established rights by changing the law.
In Stop the Beach Renourishment v. Florida Department of Environmental Protection, 560 U.S. 702, 715 (2010), a plurality of this Court held that “[i]f a legislature or a court declares that what was once an established right of private property no longer exists, it has taken that property, no less than if the State had physically appropriated it or destroyed its value by regulation” (emphasis in original). The Takings Clause requires just compensation as the remedy for takings by the government. First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 314-15 (1987). Under the Tucker Act, 28 U.S.C. § 1491(a)(1), the Court of Federal Claims has exclusive and compulsory jurisdiction over takings claims against the United States for just compensation greater than $10,000.
The questions presented are:
1. Whether the Takings Clause applies to the decisions of federal courts, and if so, under what circumstances may federal courts review and remedy federal judicial takings claims.
2. Whether the Court of Federal Claims may adjudicate federal judicial takings claims against the United States when the remedy sought is just compensation and not invalidation of another federal court’s decision.
We were part of the panel entitled "The Future of Land Regulation and a Tribute to David Callies," along with Professors Shelly Saxer and Jim Ely, and past B-K Prize winner Michael Berger. Professor Callies also delivered his opening remarks during this session.
If you "get" this headline and the decision by the Federal Circuit, then congratulations, you are a super takings nerd. King of the Nerds. Off-the-charts nerd. Your takings law geek certificate is in the mail.
In Petro-Hunt, LLC v. United States, No. 16-1981 (July 13, 2017), the U.S. Court of Appeals for the Federal Circuit considered Tohono, § 1500, takings statutes of limitations, judicial takings, Quiet Title, temporary takings, physical vs regulatory takings, Louisiana law mineral servitudes, and related contract claims. Lots of issues, and we leave it to you to read the whole thing. Well worth it. Bottom line: property owner loses.
But even in the midst of a loss on all substantive and procedural fronts, this bright point: the Federal Circuit concluded that if the plaintiff had followed the first-to-file process, the court would have upheld the jurisdiction of the Court of Federal Claims against the government's § 1500 challenge. We've been down this path before, see here for example, and our amicus brief in Tohono and in a follow up case.
The first-to-file procedure (aka the Tecon rule), allows the Court of Federal Claims to avoid the potential constitutional problems in applying § 1500 to preclude a claim for just compensation (the point raised in our Tohono brief) when a claim challenging the validity of the government action is pending in a district court. File your CFC claim for compensation first, and only then file your district court action challenging the validity of the government act:
Petro-Hunt could have avoided the force of § 1500 by following Tecon and filing its case first in the Court of Federal Claims. See Brandt v. United States, 710 F.3d 1369, 1379 n.7 (Fed. Cir. 2013) (stating that Tecon’s order-of-filing rule “remains the law of this circuit”); Hardwick Bros. Co. II v. United States, 72 F.3d 883, 886 (Fed. Cir. 1995) (the rule of Tecon “remains good law and binding on this court”).
Slip op. at 24.
This is logically backwards (the government action needs to be valid in order for there to be a taking, so the challenge to the validity of the action should be resolved before a takings challenge is ripe), but hey, who are we to quibble? The Supreme Court avoided this issue in Tohono (it really wasn't squarely presented), so we think it will be back. The Tecon dodge, as useful as it is for property owners as a practical matter, is, as a matter of principle, just that -- a dodge. Eventually, in the right case, the Supreme Court is going to have to confront this, or Congress is going to have to repeal or modify § 1500 for takings claims.
In the meantime, property owners, be sure to file first in the CFC, and only then file your district court action.
The case is a regulatory takings claim, and involves wet and dry sand beaches, public trust, and other favorite topics. The case arose because the N.C. Legislature by statute moved the "public trust" shoreline landward, and allowed the public to use what had formerly been private beach.
Here's the Summary of Argument from our brief:
The North Carolina Court of Appeals permitted the Town of Emerald Isle (Town) to impress into public service the portion of the Nies family’s property above the mean high water mark as a road and park. North Carolina law has never subjected this dry sand to public ownership, through the public trust doctrine or otherwise. The court below, however, ignored this distinction, holding that the Town’s permitting the public to use to the Nies’ dry sand was not a taking because the Nies never owned the right to exclude the public from “public trust” areas of the beach. But under North Carolina law—and the law of the vast majority of other jurisdictions—the public trust is limited to land below the mean high water mark, and cannot be extended by the legislature or by a court, and at the same time avoid the constitutional obligation to pay just compensation. Simply put, the public trust doctrine isn’t a means to transform without compensation what has always been private property under North Carolina law, into a public resource.
This brief makes three points. First, the just compensation requirement is self-executing, and even if a state may alter its property law by statute, it cannot avoid its constitutional obligation to pay for the change. Second, since its inception, the scope of North Carolina’s public trust doctrine has been strictly limited to state-owned beaches seaward of the mean high water mark; until it was extended to include the dry sand beach up to the vegetation line, the North Carolina public trust was consistent with the law of a vast majority of other jurisdictions. Third, expansion of the “public trust” beyond its traditional scope cannot completely swallow up the Just Compensation Clause.
Here's the amicus brief we filed yesterday on behalf of lawprof David Callies and our colleagues at Owners' Counsel of America in an important case involving ownership and use of the "dry sand" beach, now pending in the North Carolina Supreme Court.
In Nies v. Town of Emerald Isle, No. COA15-169 (N.C. App. Nov. 17, 2015), the court of appeals held that the dry sand portion of the beach -- the part between the mean high water mark and the dune or vegetation line -- is subject to the public trust. Consequently, the Town was not liable for a regulatory taking when it allowed the public, for a fee, to drive on the beach. The Nies family, which thought it owned the property inland of the MHWM under long-standing North Carolina law, and that the public trust only applied to property seaward of the MHWM, sought compensation. The North Carolina Supreme Court granted discretionary review.
The ownership of the dry sand beach isn't an issue limited to North Carolina, and indeed is a burgeoning question nationwide, as state and local government seek to expand the public beaches, but want to do so without condemning and paying for the private rights impacted.
Our brief argues:
The Court of Appeals permitted the Town of Emerald Isle (Town) to impress into public service the portion of the Nies family’s property above the mean high water mark as a road and park. North Carolina law has never subject this dry sand to public ownership, through the public trust doctrine or otherwise. The Court of Appeals, however, ignored this distinction, holding that the Town’s permitting the public to use the Nies’ dry sand was not a taking because the Nies never owned the right to exclude the public. This Court should reverse, and reconfirm—in accordance with its existing precedents and the vast majority of other jurisdictions—that the public trust is limited to land below the mean high water mark, and cannot be extended by the legislature or by a court to insulate the Town from avoiding its constitutional obligations to condemn the property and pay just compensation under the law of the land clause and the Fifth Amendment. Simply put, the public trust doctrine isn’t a means to transform what has always been private property under North Carolina law into a public resource, without compensation.
Affirming the court of appeals would put North Carolina into a distinct minority: Every state, with a handful of exceptions, limits the public's rights at the mean high or low water marks. See Br. at 11-15.
We'll put up the property owners' merits brief and the other amicus brief, in a separate post.
The petitioners argue that the Maine court took their private property when it departed from its prior decisions and a statute and concluded that a road to their home was a public beach access road, and not their private driveway.
Here are the Questions Presented:
1. Did the Maine Supreme Judicial Court effect a “judicial taking” in violation of the Fifth and Fourteenth Amendments to the United States Constitution when it upheld the Superior Court’s reliance upon extrinsic evidence of the intent of petitioner’s deceased predecessor in title, John McLoon, to determine that the dedication and acceptance of “Coopers Beach Road” as a public way included the Petitioner’s driveway despite the fact that the dedication petition itself failed to specifically describe the driveway or the location of the driveway as required by the applicable state statute?
2. Did the Maine Supreme Judicial Court’s approval of the Superior Court’s reliance upon extrinsic evidence of Mr. McLoon’s intent in derogation of the express specificity requirements of the state statute arbitrarily deprive the Petitioners of their property in violation of the Due Process Clause of the Fourteenth& Amendment?
A noteworthy opinion from the Court of Federal Claims in Petro-Hunt LLC v. United States, No. 00-512L (Apr. 26, 2016), dismissing a claim for a judicial taking for lack of subject matter jurisdiction because the claim would require the CFC, an article I court, to review the actions of the Fifth Circuit, an article III court. The CFC concluded that in this situation, the Federal Circuit holds there's no jurisdiction.
The takings case came about after the Fifth Circuit held that the plaintiff did not own mineral leases in Louisiana because under federal common law, it did not acquire any rights by prescription. The plaintiff asserts in the CFC that this is a taking because the Fifth Circuit's ruling altered its previously-established rights by changing the law. The court accepted that fact as true, but concluded that the CFC has no jurisdiction to tell the Fifth Circuit it was wrong:
Indeed, deciding Petro-Hunt’s current claim on the merits would require this court to determine if Petro-Hunt had an established property right that was taken by the Fifth Circuit. See Stop the Beach Renourishment, Inc. v. Fla. Dep’t of Envtl. Prot., 560 U.S. at 715 (plurality opinion). The only way to determine if Petro-Hunt had an established property right in the mineral servitudes is to decide whether the mineral servitudes had prescribed, as a matter of federal common law, to the United States prior to the Fifth Circuit’s 2007 decision. In other words, this court would have to determine if the Fifth Circuit was correct in its finding that Little Lake Misere and Central Pines established that lands sold to the United States before the enactment of Act 315, like the surface lands in question here, were subject to Louisiana’s ten-year prescription rule. See Petro-Hunt, L.L.C. v. United States, 365 F.3d at 392–93. If the Fifth Circuit was correct in this finding, then Petro-Hunt lost possession of its land long before the 2007 Fifth Circuit decision and it had no established property right that could have been taken by the court’s decision. If the Fifth Circuit was incorrect in its application of precedent, and actually created a new rule depriving Petro-Hunt of its previously established property, then the Fifth Circuit may have effected a compensable taking of Petro-Hunt’s mineral servitudes. This court lacks jurisdiction to determine whether or not the Fifth Circuit correctly interpreted its own precedent, and, therefore, lacks jurisdiction over plaintiff’s judicial takings claim. See Shinnecock Indian Nation v. United States, 782 F.3d at 1348, 1352–53; Allustiarte v. United States, 256 F.3d at 1352.
Earlier today, we asked the Federal Circuit for its permission to file this amici brief urging the court to rehear its recent panel decision in Romanoff Equities, Inc. v. United States, No. 15-5034 (Fed. Cir. Mar. 10, 2016).
This is a rails-to-trails takings case in which the panel concluded that the words in the original easement grant "for railroad purposes and for such other purposes as the Railroad Company ... may ... desire to make" mean that the easement was a "general" easement which allowed the grantee to not only make railroad use of the easement, but literally any use it desired. Thus, when the railroad abandoned the line and the City of New York turned it into the Highline public park, the reversionary property owners were not entitled to compensation.
Our brief argues that there's no such animal as a "general" easement that allows the grantee to do anything it likes with the easement. The nature of easements are limited, and its hornbook law that an easement is supposed to be for a special purpose, not a general one. From the brief's Summary:
Words have meaning. Especially words in a document conveying an interest in real property. These words must be viewed in light of the intent of the parties as expressed by the terms of the instrument, state law, and the “special need for certainty and predictability where land titles are concerned.” Certainty and predictability in property is not a rule that exists for its own sake, sui generis, but one which forms the foundation of every other civil right. The panel, however, violated these principles when instead of certifying the question to the New York courts, it discovered in the Romanoff conveyance something never before seen in New York law (or the law of any other jurisdiction): a “general easement,” which can be used “for any purpose for which the grantee wishes.” In doing so, it permitted the Romanoff family’s property which its predecessors conveyed for railroad purposes, to be impressed into public service as a recreational space without compensation.
The concept of a general easement has not been recognized by any New York court (or the courts of any other jurisdiction), and we argue that the the panel made its best guess, when it should have, at minimum, certified the question to New York's state courts:
It is highly doubtful that a New York court—were it given the opportunity to consider the question—would conclude than an interest labeled by the grantor as an “easement” (usually defined as use for a “special purpose”), is a “general easement” that contemplated use for any purpose, especially uses as admittedly unrelated to the easement’s main railroad purpose as tai chi, “gender bending performances from the club and theater stage,” garden tours, and “stargazing.” Here, we have a very specific easement which was for railroad purposes to eliminate at-grade crossings. But even if the easement was granted in general terms, the rule of construction is to construe the extent of its use only as is “necessary and convenient for the purpose for which it is created.” An easement to do anything the grantee wants for as long as it wants isn’t really an “easement,” it is a grant of fee simple by another name. The panel’s ruling has effectively converted the grant of an easement for railroad purposes into a fee simple estate, contrary to both the terms of the instrument and New York law.
Another day that we're tied up, so there won't be too much analysis. But we wanted to post this fascinating case out of the California Court of Appeal, Friends of Martin Beach v. Martin Beach 1 LLC, No. A142035 (Apr. 27, 2016).
As the caption of the case indicates, it involves beach access. Specifically, access to a Northern California beach that, despite some junky Yelp reviews, is apparently popular enough to spawn a "friends of" activist defense group. The Friends want access across private property owned by a really rich Silicon Valley guy. Before he owned it, they alleged, the owners let the public cross to get to the beach. The Silicon Valley guy, however, didn't continue that practice, and the lawsuit followed.
The owner claimed he had exceptionally good title, because the land, like much land in California, could trace title back to a Spanish or Mexican grant made while this was part of Alta California in the Zorro days. Title had been federally patented, and thus was free of the tidelands trust to which littoral property is usually subject. When the United States got California after the Mexican-American War, it promised in the resultant Treaty of Guadalupe Hidalgo to recognize and protect preexisting Spanish and Mexican land grants "inviolate." In furtherance of this promise, the U.S. constituted a land commission which after a very lengthy process issued federal patents for the properties which qualified. That is a fascinating story in itself. Generally speaking, under the Equal Footing Doctrine, when a state enters the Union the new state gets title to tidelands, except in those situations where the federal government has issued such a patent.
The Friends asserted that they could access the beach pursuant to the tidelands trust, while Silicon Valley guy asserted his was one of those patented properties. The trial court granted the owner summary judgment on both his claim to patented title (thus there was no right of access under the tidelands trust), as well as his argument that the public had not acquired any rights by virtue of the alleged prior use (public dedication).
The Court of Appeal partially agreed, affirming his land is not subject to the tidelands trust. The U.S. Supreme Court (in another fascinating California case) had concluded that the trust doesn't apply to federally patented land in California. This land was similar. However, the Court of Appeal reversed the summary judgment on the public dedication issue, concluding that there remain disputed facts. Case remanded for more.
We'll have more after we have a chance to digest the opinion in detail. In the meantime, enjoy the weekend reading.
Here's the full agenda for the 2016 Eminent Domain and Land Valuation Litigation / Condemnation 101 Conference, January 28-30, 2016, in Austin, Texas.
Together with our friend and colleague Joe Waldo, we think we're put together a pretty good program that covers a lot of ground. This is the first time the conference has been to Austin, and we're starting off with a talk by Austin Mayor Steve Adler, who in his former life was an eminent domain lawyer. Other highlights:
Professor Ilya Somin will speak about his recently-published book in a segment entitled "The Impact of Kelo and the Limits of Eminent Domain."
"Pipelines and Energy Corridors: Valuation Perspectives of Condemnors and Condemnees" with the lawyers on the front lines of one of the hottest topics in eminent domain law nationwide.
Retired Minnesota Supreme Court Justice Paul H. Anderson will give us his tips in "The Art of Effective Negotiation - A Judicial View." Justice Anderson has a unique view on eminent domain, since he not only litigated cases as a lawyer and resolved them as a jurist, he was also a property owner in a condemnation action.
"Advice to Condemnees From Condemnors" - two lawyers who represent agencies with the power of eminent domain will share their thoughts on the do's and don't from a condemnor perspective.
You often hear "war stories" about lawyers' successes. But often, you learn the most from your mistakes, and your recovery from those errors. In "Eminent Domain Trials: Lessons Learned the Hard Way," three experienced eminent domain lawyers will reveal their missteps, and how they became better lawyers as a result.
Dana Berliner and W. Andrew Gowder will present about one of the cutting-edge topics in the nation's courtrooms: "First Amendment for Fifth Amendment Lawyers: Free Speech, Signs, Defamation, FOIA, and RLUIPA Claims."
The concept of highest and best use means that eminent domain lawyers are often land use lawyers as well. In "Probability of Rezoning as an Element of Valuation," land use law experts Nikelle Meade, Dwight Merriam, and Charles W. (Chase) Ruffin will get you the information you need to know.
We especially focused on the ethics component this year, and are looking forward to the session on "Ethics: Tips and Traps for the Eminent Domain Practitioner" at the first plenary session on the second day.
Martin E. Wolf, Gordon, Wolf & Carney, Chartered, Towson, Maryland
Register here (includes hotel registration information as well as information on how to take advantage of early-bird and multiple attendee registrations).
The 2016 Conference is looking good, and we're looking forward to topping last year's San Francisco attendance.
Come, join your colleagues for three days of fantastic programming, networking, and fun in Austin. Hope to see you there.
A $1,105,000,000 (that's $1.1 billion and change) is the Nation's claim in the U.S. Court of Federal Claims for what the Hamptons are worth. Slip op. at 3. Sounds about right.
The Nation sued the State of New York in U.S. District Court, alleging that in the mid-19th Century, the State "enacted legislation allowing thousands of acres of the Nation's land to be wrongfully conveyed to the government of the Town of Southampton." Slip op. at 2.
USDC: case dismissed (laches, you know). Appeal to the Second Circuit remains pending.
Off to the CFC they went, seeking the abovementioned $1.1 billion, claiming the federal government violated its trust obligations when it failed to provide the Nation with a remedy for the misappropriation of its land (at New York's hands). The government sought dismissal, arguing the case was not ripe.
In addition to arguing the case was ripe, the Nation also asked to amend its complaint to add a new claim which asserted the District Court's dismissal of its claim on laches grounds was a "judicial taking." The CFC disagreed on both counts. Case dismissed.
Federal Circuit: the CFC case is not ripe because the Second Circuit appeal has not been resolved, and the Supreme Court avenue has not been exhausted. Pursuing these avenues are not futile (even though every time the Nation has asked the Second Circuit for similar relief, it has held that the laches doctrine is applicable to Indian land claims), because hey, the Second Circuit might grant en banc review to revisit the issue this time, or SCOTUS could grant cert. Slip op. at 7. Any bets on the likelihood of either of those happening?
Moreover, Williamson County: it applies (or at least part of its rationale does). There's a chance the Second Circuit could reverse the District Court and rule in favor of the Nation. Or the parties may settle the case. Indeed, there are many possibilities. But until the Second Circuit case is finally over, it's just too early to seek money from the CFC. In other words, the federal courts are like the administrative agency process in Williamson County: the taking cannot be evaluated until the Second Circuit has made a decision, and thus reached a final, definitive position about what uses may be allowed, and until then, there's no way to tell if anything has been taken. (Reading that last sentence back now makes us see how trying to evaluate this case under the Williamson County standard for a regulatory taking is simply ridiculous.)
Finally, no leave to amend to add the judicial takings claim, because it's a loosely-disguised collateral attack on the District Court's judgment. Slip op. at 14 ("Permitting parties aggrieved by the decisions of Article III tribunals to challenge the merits of those decisions in the Court of Federal Claims would circumvent the statutorily defined appellate process and severely undercut the orderly resolution of claims.").
The court didn't say this was a dismissal for lack of jurisdiction, but implied so by holding that "[t]he Court of Federal Claims is without authority to adjudicate the Nation's claim that it suffered a compensable taking at the hands of the district court." Slip op. at 13 (emphasis added).
OK, we get the whole "collateral attack" thing (we've read Rooker and Feldman), but that begs the question of where a plaintiff could bring a judicial takings claim against the federal government asserting that a District Court did the taking, given that the CFC has exclusive jurisdiction over takings claims against the federal government which exceed $10,000. Nowhere, we guess.
For those of you who couldn't join us at the William & Mary Law School last month for the Brigham-Kanner Property Rights Conference (see our report here), the law school has made videos of the four panel presentations available here.
They're high quality videos, so be prepared for big downloads, but the presentations are worth it. While they are all good, our favorite was the impromptu discussion/debate during the third panel, "Balancing Private Property and Community Rights," featuring panelists Kames Burling (Pacific Legal Foundation), Professors Richard Epstein (NYU), Steven Eagle (Geo. Mason), Mark Poirer (Seton Hall), and James Stern (William & Mary).
Like love, takings claims can often be found in some very unusual places. And (like love) unfortunately, those claims are not always successful.
When we think of "takings," things like eminent domain condemning land, inverse condemnation (of land) by flood waters, and cases like that spring to mind first. Even when regulatory takings are involved, the conventional view at least starts with claims about land, and although the Supreme Court hasn't come out and said it, the argument has been made that the takings and exaction/unconstitutional conditions doctrines are reserved for claims involving land.
But not always so.
Here are three recent decisions where property rights and takings came up in situations you might not have expected.
Takings and Labor Law
The first is from the U.S. Court of Appeals for the Seventh Circuit. In Sweeney v. Pence, No. 13-1264 (7th Cir. Sep. 2, 2014), the court held that Wisconsin's Right to Work Act, which prohibits unions from requiring membership (among other things), was not a taking.
The opinion is mostly whether federal labor law preempts the Act (it doesn't), but the court devoted a section of the opinion, starting on page 20 to rejecting the plaintiffs takings claim on several bases, the most interesting is the "givings" argument:
we believe the union is justly compensated by federal law’s grant to the Union the right to bargain exclusively with the employer. The reason the Union must represent all employees is that the Union alone gets a seat at the negotiation table.
Slip op. at 21. Welcome to the Takings Bar, you labor lawyers.
One judge dissented, arguing that the Act is a taking because it transfers property from those who pay union dues to "free riders" (those who benefit from the union collective bargaining and other union services, but who under the Act will pay no fees). The property involved is not the dues money, but a "complusory provision of services." Dissent at 38. Interesting.
on a demurrer to a cause of action for alleged financial elder abuse under the California Elder Abuse and Dependent Adult Civil Protection Act, for a “taking” of property to have occurred it is sufficient for the Complaint to allege that an elder had entered into an unconsummated agreement which, in effect, significantly impaired the value of the elder’s property although title to the property did not occur. The elder had been deprived of a property right by means of an agreement because although title to the real property did not change hands escrow instructions had been signed which significantly impaired the value of the property owned by the Trust.
Welcome to the Takings Bar, you estate planning lawyers.
Our final nontraditional takings case of the day is Big John's Billiards, Inc. v. Nebraska, No. S-13-803 (Neb. Aug. 29, 2014), a case from the Nebraska Supreme Court. There, the court held that the Nebraska Clean Indoor Air Act, which prohibits indoor smoking in most places, but exempts certain establishments, is not a taking. The plaintiff argued it had a property right in "its ability to operate a premises that allowed smoking," a claim which the court rejected because the right was not "vested" because the ability to allow smoking was a mere expectation:
Simply stated, there is no vested right at issue here. The only “right” Big John’s had to allow its customers to smoke was created by statute—the prior version of the Act, under which smoking in billiards parlors was regulated but not prohibited. That Act created nothing more than a mere expectation based upon continuance of the existing law and did not create a vested right. There was no regulatory taking here as a matter of law.
We usually don't pay a whole lot of attention to unpublished opinions. Not that they are not interesting mind you, but if the court itself, for whatever reason doesn't believe the case is worthy of publication, then who are we to say otherwise? But occasionally, we read one that has something worth sharing. Like this case, for example.
In Dagres v. County of Hawaii Planning Dep't, No. CAAP-11- 0000071 (June 30, 2014), the Hawaii Intermediate Court of Appeals gave us one of those blogworthy tidbits, a short (one page) discussion of the appellant's judicial takings claim. We don't see many of those, so we had to follow up.
The case involved three buildings near the shoreline on the Big Island. The owner wanted to fix them up, and the Planning Department concluded that two of the buildings were exempt from the requirement to obtain a Special Management Area use permit, while the third needed only a SMA Minor permit. The neighbors didn't agree and appealed to the County Board of Appeals, which upheld the Department's conclusions. Up the chain they went under the Administrative Procedures Act, and the circuit court reversed, concluding that at least one of the buildings wasn't even permitted or legal, much less than it deserved to be exempt from the shoreline regulations. Next stop, ICA.
Fast forward to page 30 of the ICA's Memorandum Opinion, where the court addressed the property owner's contention "that the circuit court's reversal of the Planning Director's and Board's decisions to exempt Buildings A and C amounted to a judicial taking." So here's your schlimmbesserung lesson of the day: sometimes, in trying to make things better, it ends up worse, because the owner asserted that "the buildings on the Property went from being taxed by the county and in the county's records, to being no longer legally 'existing.'" Slip op. at 30. The owner asserted this was so off the charts that it "amounts to a retroactive alteration of state law that constitutes an unconstitutional taking." The ICA rejected the argument:
Even if we were to assume that HCF posits a viable judicial taking theory, the circuit court's decision was not a retroactive alteration of state law. In Waikiki Marketplace, this court merely held that a property owner "should not have been required to produce a building permit in order to establish that [an] addition was a 'nonconforming use'" under the applicable land use ordinance because terms such as "lawful use" and "previously lawful" as used in the land use ordinances only refer to compliance with previous zoning laws. The instant matter did not involve whether HCF could demonstrate status as a "nonconforming structure" or "nonconforming use" under the Zoning Code.
Slip op. at 30 (cttation omitted). Not much of a discussion of judicial takings, but we'll take what we can get.
Check this out: Vermont lawprof John Echeverria has launched a blog about "Takings Litigation." Which, given the predilections of the author (organizer of the anti-takings conference, and recently presented with the Koontz Catatonia Award), probably should be called "Takings Defense" or the "No Takings Blog," but who are we to say?
"Importantly, the decision [Sherman v. Town of Chester] does not cast doubt on the general rule that when a litigant initially files a takings claim in federal court, the government defendant can raise Williamson County and insist that the takings claim be litigated in state court."
"One thing seems clear about this case [Horne, on remand to the 9th Cir]: the Ninth Circuit reached the correct result. In no sane legal universe could it be said that the Hornes suffered the kind of economic injury at the hands of government that would justify a finding of a taking as a matter of “fairness and justice,” to quote the Supreme Court’s lodestar for taking cases."
You get the drift. We don't see a RSS feed link (our preferred -- if antiquated -- method for following blogs), but you can follow along with an email subscription.
In Public Lands Access Ass'n v. Bd of County Commissioners of Madison County, No. DA 12-0312 (Jan. 16, 2014), the Montana Supreme Court held that a riparian owner's efforts to fence his land to keep the public from crossing it and accessing the Ruby River were not effective. Montana has a statute that allows public access to and use of streams up to the high water mark, and the property owner asserted that the lower court's ruling allowing access across his land and use of the River under the statute was an unconstitutional taking. The Supreme Court rejected this argument. As the court's synopsis stated:
The Court also explained that Kennedy’s takings argument is precluded by well-settled law in Montana. Montana’s well-settled law provides that the State owns all waters in trust for the people; that a riparian owner may not exclude the public from areas that are minimally necessary for the public to use its water resource; and that a riparian owner takes his property interest subject to a dominant estate in favor of the public.
In other words, the property owner owned no property that was taken. He did not have the right to exclude the public from wading into the river or floating on it, so requiring him to do so was not a taking.
It's a detailed and lengthy series of opinions (70 pages including the concurring and dissenting opinions), but well worth reading if these issues are your cup of tea.
Next week, we'll be in New Orleans for the 2014 edition of the ALI-CLE Eminent Domain program, now in its 31st year.
As usual, my Owners' Counsel colleagues Leslie Fields and Joe Waldo (the programming co-chairs) have put together a fantastic 2.5 day of programming, taught by expert faculty. At 11:00 a.m. on the first day of the program, I will be joining Professor James Ely to speak about "The Full and Perfect Equivalent for Just Compensation: The Historical Context and Practice."
Should be fun. If you are not joining us in-person, ALI-CLE is producing it as a live webcast, and will make the coursebook and video and audio available for later listening or viewing.
More details here, or download the brochure here, or below.
Here's the second of two amicus briefs filed in support of the petitioner in the judicial takings case we mentioned last week. This brief, filed by beverage distributors, who although they are respondents, urged the Supreme Court to take the case.
The brief argues that "Connecticut reached backwards in time to target and sweep a few private bank accounts into the general Treasury just because 'the legislature wanted as much money as possible' to redress a general budget deficit." Brief at 1. "the Connecticut Supreme Court held that this retroactive seizure was not a taking because the distributors' funds ceased being their property even before the funds were confiscated, at the moment the funds were deposited into special segregated acccounts. That court's re-writing of Connecticut property law 'contravene[d] the established property rights of' the beverage distributors and thereby effected a taking." Id. at 1-2 (emphasis original).
We'll post the BIO when available. Follow along on the Court's docket report here.
Here's the first of two amicus briefs filed in support of the petitioner in the judicial takings case we mentioned last week.
This brief, filed by the New England Legal Foundation, the Cato Institute, the National Federation of Independent Businesses, and the Southeastern Legal Foundation, urges the Court to take the case, arguing that the Connecticut legislature's raiding of the bottle fund is a "classic case" of the type of burden-shifting that Armstrong tells us is a taking. The judicial takings problem arose because in order to uphold the legislative action, the Connecticut Supreme Court had to blow by established property rights:
Amici’s interest in this case arises out of their commitment to the protection of private property rights and economic freedom. The case involves Connecticut’s assertion of the power to take private property (i.e., targeted funds of money) for public use without compensation, in violation of the U.S. Constitution.
In the midst of a fiscal crisis, the state legislature passed a bill that imposed on Petitioners a financial exaction so that the state could pay for public benefits that should properly be borne by the public as a whole. Although Petitioners successfully challenged the law in the trial court, the state Supreme Court ruled that Petitioners had no right to the money at all. The ruling was contrary to decades of settled expectations concerning their rights to such funds, rights acknowledged even by the state agency charged with implementing the Bottle Bill.
devoted to recent developments and commentary on regulatory takings, eminent domain, inverse condemnation, property rights, land use law, and (occasionally) election law.
Author
Robert H. Thomas is a land use, eminent domain, and appellate lawyer based in Honolulu, Hawaii
All upcoming and past seminars, conferences, and events here
At the 2016 Brigham-Kanner Property Rights Conference in the Hague, The Netherlands (October 19-20, 2016, I'm speaking on two panels: "Property's Role in the Fundamental Political Structure of Nations," and "Defining and Protecting Property Rights in Intangible Assets." More information here.
This blog is not legal advice. But you knew that already. Reading this blog does not make you a client, nor are any posts or comments on this blog subject to the attorney-client privilege. For legal advice, please retain an attorney licensed in your jurisdiction.
This blog is not sponsored by the author's firm, and the views expressed by the author are just that; they are not the views of his clients, his firm or its clients, or anyone but for the author.
