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ABA Spring Conference: Public Use And Regulatory Takings Updates

We just wrapped up the spring meeting of the ABA's Section of State and Local Government Law in Nashville, which included our presentation of two updates, one on the latest in public use in eminent domain, the other on regulatory takings.

Here are the draft papers presented:

• Recent Developments in Eminent Domain: Public Use (coauthored with Mark Murakami and Bethany Ace)

• Recent Developments in Regulatory Takings

For those of you who attended, you already have these articles in your materials.

Materials From Today's Virginia Eminent Domain Conference

For those of you attending the Virginia Eminent Domain Conference, here's the expanded papers on "Tough Takings Questions: Regulatory Takings, Zoning Issues and Judicial Takings" and Public Use issues.

Use the password provided at the conference to open the pdf's. It's the same p/w for both. If you forgot the password, email me.

• Regulatory Takings

• Public Use

For those who did not attend, sorry folks, there are some benefits to coming to a conference! Y'all are going to have to wait for a bit -- after a decent interval to allow the attendees to get their money's worth, we'll remove the password.

For more about the cases and books we discussed yesterday during my presentation on "Virginia's Place in National Eminent Domain Trends, check these out:

• More about Crenshaw v. Slate River Co., 27 Va. 245 (1828).

• Arlington National Cemetery and the Takings Clause.

• Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984) (private takings, Public Use Clause).

• Lingle v. Chevron, U.S.A., Inc., 544 U.S. 528 (2005) (gas station rent control, and the demise of the "substantially advance" test as a takings test).

• Kaiser Aetna v. United States, 444 U.S. 164 (1979) (navigable waters, regulatory takings).

• Livingston v. Virginia Dep’t of Transportation, 726 S.E.2d 264 (Va. 2012) (flooding and taking liability).

• James Ely, The Guardian of Every Other Right: A Constitutional History of Property Rights (1998) (read this book!).

 

Fla Fed Ct: Exaction Scheme Is "Constitutional Mischief" To Avoid "Nettlesome Payment of 'Just Compensation'"

Here's one to brighten your day, courtesy of the the U.S. District Court for the Middle District of Flordia (that's Tampa, to all you non-Floridians). In Hillcrest Property, LLP v. Pasco County, No. 8:10-cv-819-T-23TBM (Apr. 12, 2013), the court held the county's "Right of Way Preservation Ordinance" that allows it to land bank for a future road corridors by means of an exaction (more details on the ordinance below), is "both coercive and confiscatory in nature and constitutionally offensive in both content and operation." Slip op. at 4.

We've seen this situation before -- the government wants to build roads, but it either doesn't have the money to buy or condemn the necessary property to do so, or it simply figures it can get it another way. The county had such plans, and designated future transportation corridors on its comprehensive plans. In 2005, the county adopted the ordinance which "targets landowners who own property encroached by the corridor and who aspire to build on the property adjoining the corridor." Slip op. at 4. Here's how the court described the ordinance's operation:

 In exchange for a development permit, the Ordinance requires those landowners to agree to dedicate the corridor in fee simple to Pasco County. Under the Ordinance, Pasco County withholds the construction permit until the landowner dedicates the property "by recordation on the face of the plat, deed, grant of easement, or other method acceptable to the County." Code § 319.8(A); Code § 901.2(H). If the property owner declines the dedication, Pasco County declines the construction permit.

Once a landowner dedicates the land to Pasco County, the landowner may apply to Pasco County’s Development Review Committee for permission to use his former land until Pasco County needs to build the road. The Ordinance provides a list of specific and temporary “interim uses,” such as a produce stand or a bridal path for a residential zone or a boat storage yard or a ground to host “festivals, carnivals, community fairs, and the like” for a commercial zone. Code § 319.6(C)(1); Code § 901.2(F)(3). When and if Pasco County needs the land, the former landowner must remove any permitted, temporary use (for example, a lemonade stand, a Tilt-AWhirl, or a putt-putt course).

Slip op. at 4-5. A property owner who believes that the exaction is not "roughly proportional" to the transportation impacts its development may have may seek a waiver, sought via an application requiring myriad studies and experts. ("Roughly proportional? Looks like Justice Scalia was right and a smart staffer has read Dolan). If the Review Committee agrees, she gets 115% of the value of the excess, or other credits. The Review Committee may also waive the waiver requirements via a "variance" if the owner can show the application process would impose a hardship. The court noted the ordinance "is no model of clarity." See slip op. at 9-11 & n.3.

The transportation corridor protrudes into Hillcrest's undeveloped commercially-zoned property. Hillcrest wanted to build a shopping center and it submitted a plan to the Review Committee, which rejected the application because it did not account for the corridor. Hillcrest submitted a second plan which was rejected, and a third plan which was eventually approved. It required Hillcrest dedicate the right of way to the county, although Hillcrest reserved its right to object to the dedication. Hillcrest then filed the federal action seeking to invalidate the ordinance, asserting several claims including federal due process and a takings claim under Florida law. Hillcrest had not applied for a waiver or a variance.

The court first rejected the county's argument that the substantive due process claim was not ripe under Williamson County because Hillcrest had not pursued a waiver or variance. The court noted that Williamson County only applied to takings claims, although due process claims may be subject to a similar requirement depending on the remedy sought. But the exhaustion requirement was not applicable since Hillcrest was only claiming the county acted arbitrarily and capriciously when it used the ordinance as a way to avoid condemnation and compensation, and the remedy it sought was invalidation.

Starting at page 23, the court attempted a "clarifying account of the constitutional first principles," to distinguish due process claims from taking claims. We won't detail it here, but it is well worth a read in its entirety and, we think, for the most part correct. This section of the opinion is something everyone who follows this blog should read:

Instead of finding that the Ordinance deprives a landowner of property without paying just compensation, the magistrate judge finds that the Ordinance leverages the police power to compel a landowner to relinquish rights guaranteed by the Takings Clause – a finding that the Ordinance fails to advance a legitimate governmental purpose. Although not "set[ting] forth the applicable standard," Nollan and Dolan are central to understanding the Ordinance’s perverse scheme and Nollan and Dolan "inform the due process analysis."

Slip op. at 25. In other words, it is a due process violation to use the police power to avoid taking and paying for property. We made this point a few years ago in an amicus brief in Lingle, where we argued it was not a legitimate exercise of government power to try and get property without using eminent domain. As the court noted, "[t]he government's failure to satisfy [the Nollan and Dolan] requirements violates the Takings Clause. If taking an amount of land in excess of the amount that the government has proven necessary to mitigate the development's contribution to the public hardship, the government must proceed as it always has -- through condemnation, in which the government bears the burden of proof and a disinterested fact-finder determines 'just compensation.'" Slip op. at 35.

The court concluded the Right of Way Preservation Ordinance violated the Takings Clause because it shifts the burden to disprove rough proportionality to the property owner and empowers the county to obtain land in excess of what it would otherwise get in the absence of the ordinance:

Instead of proceeding through eminent domain, in which the government proves a public need and a disinterested fact-finder determines "just compensation," the Ordinance requires Pasco County to prove nothing and empowers Pasco County to determine the "just compensation," if any, Pasco County will pay.

Slip op. at 36. This is a due process problem because "by legislative fiat, Pasco County uses a development permit to compel a landowner either to convey valuable land for free or to submit to a regime catigated by Dolan. In other words, Pasco County wields the police power to compel a landowner's abandoning rights guaranteed by the Takings Clause." Id. at 37. The ordinance also offends due process because it was desiged to circumvent the requirements of the takings clause, and was a "misuse of the police power" to avoid exercising the county's eminent domain power. The court wrapped up its takings/due process analysis with this:

In sum, the Ordinance discriminates based on economic aspiration. Against the class of landowners who never attempt to develop, Pasco County will acquire land by eminent domain, beginning when and if Pasco County needs the land. A landowner without need of a permit enjoys the protection of condemnation and receives the "just compensation" guaranteed by the Constitution. A landowner who aspires to develop property and who aspires to a permit for a grocery store, a doctor’s office, an apartment building, or the like faces an immediate confiscation of land. For these landowners, a last but forlorn hope for just compensation is in Pasco County’s prolix, opaque, and overbearing Ordinance. Further, these landowners’ just compensation is an elusive contingency, held for ransom by a committee methodically acquiring property at a steep, aggregate discount. "[M]erely an attempt to circumvent the constitutional and statutory protections afforded private property ownership under the principles of eminent domain," the Ordinance improperly uses the police power and fails to advance a legitimate governmental purpose (taking by eminent domain is a legitimate governmental purpose; extorting landowners is not).

Slip op. at 46 (citation omitted).

Order, Hillcrest Property, LLP v. Pasco County, No 8:10-cv-819-T-23TBM (M.D. Fla. Apr. 12, 2013)

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

Koontz Sets The Stage

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

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

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

Some background before we return to that concept.

Raisin Handlers vs. Raisin Producers

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

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

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

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

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

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

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

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

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

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

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

Cert Review

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

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

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

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

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

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

Koontz Continued?

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

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

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

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

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

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

Predictions

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

More to follow after the arguments on Wednesday.

Überlawyer's "Audacious" Takings Suit For AIG Chief Updated: An "Easy Case To Litigate"

An update on that "audacious" Court of Federal Claims lawsuit seeking $25 billion in just compensation for a taking for the federal takeoever of AIG.

In "Greenberg Forges Ahead With Lawsuit Over A.I.G. Bailout," the New York Times reports that the case has been granted class action status, and "[i]n the amended complaint, lawyers for Mr. Greenberg argued that A.I.G. was under pressure from its onetime largest shareholder, the federal government, not to join the legal fight."

What the piece doesn't mention is that the plaintiff is represented by legal superstar David Boies (an "überlawyer," according to this video interview about the case), which alone should make this case interesting to follow. Here's more video, in which Boies calls the lawsuit "an easy case to litigate." In the latter video, Boies mentions the CFC's earlier order, which dismissed the due process and equal protection claim, and allowed certain of the takings claims to go forward.

Here's the Second Amended Complaint.

Second Amended Verified Class Action Complaint, Starr International Co. v. United States, No. 11-CV-00779 (...

Links And Materials From Today's ABA Takings Teleconference

Here are the links to the materials and briefs from the Supreme Court's three taking cases which we are discussing at today's teleconference sponsored by the ABA's Section on Litigation's Environmental Litigation Commitee and the Condemnation, Zoning, and Land Use Committee. 

Post-telecon note: thanks to everyone for joining us. I will be posting up the briefs in the Big Oak case now pending in the Court of Federal Claims that Rob Meltz mentioned in his "what's next" talk about Arkansas Game. Update: here are the Big Oak briefs.

Still Time To Join Us Tomorrow For ABA Takings Roundable (Free!)

Did we say free? (If you are an ABA member, that is.)

Join us for a teleconference jointly sponsored by the ABA's Section on Litigation's Environmental Litigation Commitee and the Condemnation, Zoning, and Land Use Committee to discuss the latest and greatest in takings law, specifically the three cases the U.S. Supreme Court is ruling on this Term.

Moderated by Dwight Merriam (Robinson & Cole, Hartford), panelists include me, Amy Bourlris (Gunster, Yoakley & Stewart, Miami, Professor Steven Eagle (George Mason School of Law, Arlington), and Robert Meltz (Attorney-Adviser, American Law Division, Congressional Research Service, Adjunct Professor of Law, Georgetown Law, Washington)

Date: Tuesday, February 26, 2013

Time: Noon - 1:00 p.m. Eastern Time

Register here.

More information here. See you there. Come with your questions or comments.

Cal App: Plastic Bag Ban Not A "Tax" Subject To Voter Approval

Here's the latest in an issue we've been following, just because if the plastic bag ban hasn't reached your jurisdiction yet, it certainly will (it has been adopted across Hawaii's counties except for the City and County of Honolulu, for example).So it's worthwhile to keep up with developments.

In Schmeer v. County of Los Angeles, No. B240592 (Feb. 22, 2013), the California Court of Appeal concluded that L.A. County's ban in unincorporated parts of the county on plastic bags in retail stores (and a 10 cent charge for paper bags) was not a "tax" that needed to be approved by the voters.

The ordinance states that the money received for recyclable paper bags must be retained by the store and used only for (1) the costs of compliance with the ordinance; (2) the actual costs of providing recyclable paper bags; or (3) the costs of educational materials or other costs of promoting the use of reusable bags.

Slip op. at 4. Several people who had to pay the paper bag fee challenged it as a tax under article XIII of the Califonria Constitution, which requires any new general or special taxes imposed by local governments to be approved by the voters. The court of appeal undertook a long analysis of what qualifies as a "tax," but ultimately concluded that the bag ban/fee was not one because customers pay the fee to the store and not the county. Slip op. at 23. A "tax" after all, is something we pay to the government, usually designed to raise revenue for the government. Id. at 28.

Here's the tie-in to the photo above. So you will follow this issue (like we said, the ban is coming your way, trust us), we are offering for a limited time to our readers our firm's reuseable, 100%-from-recycled-materials-big-enough-to-carry-two-bags-of-groceries EnviroBag (from another angle here). These blue bags are not your typical cheap recycle bags, but are made of a sturdy woven fiber and have a built-in floor piece. They are quite strong and will hold a ton of stuff.

To get yours, simply send us an email with your address, and we'll post one to you forthwith. So we're not giving these away for the indefinite future, this offer closes at 11:59 p.m. Hawaii time on Thursday, February 28, 2013. 

Admin note: Our firm's servers have very aggressive spam filters, so if you do not get an email response from me ("Bag on they way" or similar) within a reasonable amount of time after your request, please ping me again. Sometimes, valid messages get caught up and I only clear my junk mail folder occasionally. Don't want to miss anyone.

Schmeer v. County of Los Angeles, No. B240592 (Cal. App. Feb. 22, 2013) 

Tuesday Tidbits

Here's what we're reading on this Tuesday-after-a-long-weekend:

• "Economic Impact in Regulatory Takings Law," a forthcoming article by lawprof Steven J. Eagle about one of the prongs of the Penn Central takings test. Professor Eagle "concludes that unresolved issues and complexities in adjudicating the 'economic impact of the regulation on the claimant' test provide an additional reason why the conceptually incoherent Penn Central doctrine must be replaced."

• Jacob Cremer posts "The Constitutional Issues at Stake in Koontz, Simplified" on his blog. 

• "Are Property Rights Human Rights?" from Forbes. 

• "NY Fed report sees cracks in eminent domain proposals" - "... a new blog from researchers at the Federal Reserve Bank of New York suggests such a plan would have proved to be ineffective anyway. Their reasoning for this conclusion is that many of the targeted borrowers have already benefited from either falling interest rates, loan modifications or voluntary prepayments and foreclosures" - via Housingwire.

• "Wukan's dilemma stems from land property rights" - the latest on this story about property protests in southern China.

ABA Takings Roundtable - The U.S. Supreme Court Property Rights Cases - Feb. 26, 2013

If you are a member of the ABA, mark your calendars for Tuesday, February 26, 2013, noon to 1:00 p.m. Eastern Time, for a free teleconference jointly sponsored by the ABA's Section on Litigation's Environmental Litigation Commitee and the Condemnation, Zoning, and Land Use Committee to discuss the latest and greatest in takings law, specifically the three cases the U.S. Supreme Court is ruling on this Term.

Here's the description:

For the first time since 2005, the U.S. Supreme Court has three property rights cases on its docket. One of them, Arkansas Game & Fish, regarding compensation for flooding, was decided in December.  Another, Koontz, concerning the applicability of the Nollan and Dolan nexus tests, has been argued. The final case, Horne, a most unusual case about what might be described as raisin sequestration, is still on the sidelines.

An expert panel -- two practitioners, a federal researcher, and a law professor, all extraordinarily conversant in the three cases -- will discuss what the claims are all about, the outcome of the case already decided and the probable outcomes in the two remaining cases, and what all lawyers who deal with any matters that may affect property rights need to know about them.

This will be a not-to-miss, lively discussion that will not only get you up to speed, but put you out ahead of others when it comes to this especially important term.

More information, including on-line registration, here. The panel will be moderated by Dwight Merriam (Robinson & Cole, Hartford), and includes:

Amy Bourlris (Gunster, Yoakley & Stewart, Miami)

Professor Steven Eagle (George Mason School of Law, Arlington)

Robert Meltz (Attorney-Adviser, American Law Division, Congressional Research Service, Adjunct Professor of Law, Georgetown Law, Washington)

I'm the fourth speaker, and hope you can join us.

Epstein's Podcast On Koontz: "The Vexed Doctrine Of Unconstitutional Conditions"

Worth listening: a 17-minute podcast by Professor Richard Epstein, with his thoughts -- apparently without a script and seemingly in a single breath -- on the oral arguments in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012). 

Download the mp3 here. If that doesn't work, go here.

We Can Try To Understand The New York Times' Effect On Man (When It Opines On Eminent Domain Law)

Does the editorial board of the New York Times really have the stones to start off its latest editorial about the Takings Clause, "Where Is the Taking?", with this:

When a city condemns private property to make way for a public highway, that is a classic "taking" for which government must provide “just compensation” under the Constitution’s Fifth Amendment.

Seriously, Times? How about when it's not a "classic" taking, and the city condemns an entire block of urban private property to make way for the 52-story office headquarters of a large corporation ... say, for example, a newspaper with the initials "NYT?" Would it be a "classic" exercise of power to use emient domain to take property so that:

A high rise office tower would be built at Site 8 South providing the Times with a new headquarters, as well as providing 700,000 square feet of space for other office tenants. The tower would additionally include condominiums, a new subway entrance, mandatory ground-floor public amenities, a 350-seat auditorium, a gallery and retail space. Witnesses at a public hearing conducted by ESDC in 2001 testified that this project would keep the Times headquartered in Times Square, add needed office space, create employment, increase retail revenue, attract further economic improvement to the larger area, and address a critical shortage of commercial space.

In West 41st Street Realty L.L.C. v. New York State Urb. Dev. Corp., 744 N.Y.S.2d 121 (App. Div. 2002), the court rejected the property owners' claims the taking for the benefit of the Times lacked public use:

Petitioners argue that the proposed taking should be barred because the benefit inures to a private party, viz. The New York Times. They also allege a taking in violation of due process protections of the state and federal constitutions on the ground that the UDC itself created any "blight" which justifies condemnation since the UDC made it impossible for the owners to reap the value of their land during the last twenty years.

In other words, the paper was "too big to fail," and keeping the Times in New York quallified as a public use supporting a taking.

What this tells us is that when the Times waxes poetic about Fifth Amendment issues -- invariably in favor of the government and against the property owner -- you've got to take its opinion in context and understand that with its history as a private beneficiary of eminent domain, it invariably gets the issue dead wrong. See its editorial regarding Arkansas Game & Fish, for a recent example. We're not suggesting the Times shut up on the subject, only that it needs to remind its readers that it has a dog in the hunt. A very big dog.

The Times' latest is about last week's oral arguments in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012). This one is about regulatory takings, not direct appropriation, but the editorial board still doesn't get it right. We filed an amicus brief in Koontz in support of the property owner/petitioner. But, unlike the Times, at least we disclose our bias.

Following the lead paragraph quoted above, the editorial wrongly paints the regulatory takings doctrine as a creation of a "divided Supreme Court" "[o]ver the last few decades:

Over the last few decades, a divided Supreme Court has extended property rights at the expense of community interests by expanding the “takings” concept to include regulatory actions that are “functionally equivalent” to direct appropriation. These might include actions that render the property essentially worthless, undermine an owner’s right to keep it private, or greatly limit its use.

Metamessage alert: in other words, the regulatory takings doctrine is a recent ideological product of those nasty conservative activist judges that we all know and dislike. But can a doctine that was recognized nearly a century ago by an 8-1 Court (as far as we can tell, only Justice Brandeis dissented from Holmes' opinion in Mahon) be accurately described as arising "over the last few decades" by a "divided" Court? 

But even assuming what the editors really meant to refer to was the muddle that regulatory takings doctrine has become in the years since Mahon, and the divided courts in Nollan and Dolan, is it really that obvious that Koontz is a slam-dunk "why are we even in this case" situation, as the editorial suggests in the remaining paragraphs? According to the Times, Koontz's cardinal sin is that he only offered to mitigate the impact his proposed development would have on wetlands (which would affect only his privately-owned wetlands as far as we can tell) by offering to preserve the remaining wetlands that he also owned, and not donate to the effort to preserve other wetlands owned by the public:

This kind of mitigation under environmental law is common in cases involving statutes protecting clean water and endangered species. The family offered to preserve 11 acres that it owned, but the water management district rightly said that preserving what already existed was not mitigation.

As Professor Epstein pointed out, this reveals the only way that the denial of the permit on the basis that Koontz did not offer to preserve wetlands owned by the public cannot be deemed a taking is for the court to say that the state has a preexisting "environmental easement" over all private property such as Koontz's. The Times' editorial concludes:

The Koontz family sought monetary compensation, but as the justices noted, the district has not condemned an iota of the land and has not required the family to do anything to its property. It simply denied the family a permit for development.

That was the gist of the Florida Supreme Court’s ruling in favor of the district. The United States Supreme Court should uphold that decision, blocking efforts by the family and its ideological allies to stretch the notion of a regulatory taking far beyond any defensible limits.

The jury is still out, and we can only hope that the board is as wrong about Koontz as it was about Arkansas Game & Fish. The Bee Gees can try to understand the Times, but we sure can't.

More On Koontz Oral Arguments: Is Nollan A Theory Dependent Upon Accepting An Unconsitutional Condition, Then Challenging It As A Taking?

We're tied up all day in the 10th Hawaii Land Use Law Conference, but two other bloggers have stepped up to fill the gap, offering cogent analysis and some contrarian thoughts about the recent oral arguments in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012).

Most of the existing commentary, ours included, thought that the decision may turn on whether Justice Scalia, the author of Nollan, thought it fatal to a takings theory that the property owner declined to accept the permit. However, Florida land use lawyer Jacob Cremer has a slightly different view, and does not share the pessimism. He attended the oral arguments and provides an eyewitness account and his analysis here. His conclusion? Don't be so quick to write off the case just yet. Same for "Koontz oral argument: Should Nollan and Dolan apply only to 'stupid districts'?" from Christina Martin, a legal fellow at PLF (who represented the property owner).

The Good, The Bad, And The Scalia: Koontz Oral Argument Round-Up

In addition to our summary of and reaction to yesterday's oral arguments in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012), here is the leading commentary from other sources:

• Lyle Denniston at SCOTUSblog: "The very idea that an unconstitutional “taking” had occurred to an owner of a small plot of ground in Florida seemed near to vanishing, propelled toward oblivion by a spreading fear on the bench that maybe the entire regulatory apparatus of government might be at risk. Credit lawyers for a state agency and the federal government for deepening this anxiety."

• Greenwire's Lawrence Hurley: Supreme court: Justices weigh Fla. property rights dispute: "Rather than focus on the two Supreme Court precedents on permitting conditions, some justices seemed to agree with the Obama administration that, if Koontz did have a claim, it would be in the form of a 'regulatory takings' argument that concerns regulations that are so burdensome they can constitute a taking."

• Jonathan Adler at Volokh: scroll down to a comment by "JHW27," who writes: "If Scalia maintains his lonely and bizarre position, the most likely outcome seems to me to be a 5-4 ruling in favor of the government, with an opinion by the four liberals arguing that there is no taking because the regulatory requirement merely required the expenditure of money, a concurring opinion by Scalia arguing that there is no taking because the permit was denied, and a dissenting opinion from the other four conservatives arguing that the distinctions drawn by the five justices in the majority are arbitrary and untenable. But even that would probably not end in a long-term loss for property owners in similar circumstances to Koontz here; the argument would have to be reformulated to win back Scalia, but that would then give them five votes, and it's not clear there would be much shift in substance necessary to accomplish that."

• Gideon Kanner: What Was the Koontz Oral Argument All About? - "Our overall view of this event suggests to us that the Justices are again out of it — e.g. Justice Scalia thought that in Nollan a permit was issued before Nollan sued (it wasn’t — Pat Nollan took his chances and built without city approval and won). Justice Kennedy was still beating his drum in favor of substantive due process with no clue as to whether he also means to relax the forbidding difficulties in winning a regulatory due process case."

• Damon Root at Reason: Scalia Gives the Government a Suprise Boost in Property Rights Case - "But the most surprising resistance came from conservative Justice Antonin Scalia, who questioned whether Koontz had suffered any injury at all under the Takings Clause. 'What has been taken?' Scalia asked Beard. 'The permit’s been denied. I can’t see where there’s a taking here. Nothing’s been taken.' Those words may spell doom for Koontz’s challenge. Scalia is the author of a key 1987 decision by the Supreme Court striking down a California regulatory agency’s imposition of a similarly problematic condition on a building permit. Until his comments in the courtroom on Tuesday morning, Scalia was seen as a solid vote in Koontz’s favor. Now he appears to be the single biggest threat. Without Scalia, Koontz is unlikely to reach the five-justice threshold needed to win."

We'll add others if they are worth reading.

SCOTUS Arguments In Monetary Exactions Case: (Sliced) Bread And Circuses

When you are a property owner making a takings argument and Justice Scalia gives you a hard time at oral argument, you would be safe in thinking that you've got an uphill battle.

That was the situation today during the oral argument (transcript here) in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012), the case in which the Court is considering whether the "essential nexus" and "rough proportionality" standards of Nollan and Dolan are applicable only to exactions for land, or whether they are generally-applicable tests for all exactions.

Justice Scalia, author of the Nollan opinion, did not seem all that concerned with the second Question Presented (whether only exactions of real property are subject to Nollan/Dolan), but more on whether a takings claim can be based on an excessive exaction attached to a permit when the property owner declined to accept the permit with the exaction:

JUSTICE SCALIA: Yes, that's fine. That -- that would enable you to challenge the denial of the permit, saying it's based upon an unconstitutional condition. But how does it -- how does it enable you to say there's been a taking? What has been taken?

MR. BEARD: What has been -- what has been taken in effect is his funds that have to be put now to a public use, the enhancement of 50 acres of public wetlands. And there is nothing in the takings clause, nothing --

JUSTICE SCALIA: It hasn't -- it hasn't been taken. I mean, he turned it down.

MR. BEARD: Nothing was taken in Nollan and Dolan, either. What was proposed there, though, was a threat of a taking.

JUSTICE SCALIA: The -- the -- the permit was granted in Nollan and Dolan. And -- and the condition attached to the permit, therefore, took effect; namely, that you had to dedicate this easement over your -- over your beach whereas -- as my colleague pointed out, anybody could walk back and forth barefooted.

(Laughter.)

MR. BEARD: Justice Scalia, in Nollan and Dolan, there was approval -- approval with conditions. There were no permits issued, and that's -- that is an important distinction to make that most agencies, including this one, you approve a permit with a -- with conditions, which means, We will give you your permits as soon as you comply; which is substantively the same as saying, We won't give you your permits until you say yes to our conditions.

Tr. at 16-18.

The other Justices echoed Justice Scalia's concerns. Their questions focused on the timing: whether it is critical to the takings question that the permit-with-conditions was turned down by the property owner, and not accepted and then challenged. That seems to be the bigger hurdle for the petitioner because it doesn't appear that the Justices are all that concerned with whether a cash exaction would fall within the Nollan/Dolan requirements were this case in the same posture as Nollan and Dolan, cases in which the Justices seem to think that the property owners were granted a permit with the condition, and then challenged the condition as a taking (an assumption the petitioner's counsel pointed out is not correct).

We're not offering a prediction on the outcome, not only because we filed an amicus brief in support of the property owner/petitioner so have a stake in the the case, but because the Justices seemed to press all three arguing counsel, and it is therefore hard to read the tea leaves with any certainty (with the exception of Justice Sotomayor, who we can safely count in the "no taking" camp, with Justice Breyer likely joining). At some points in the argument it seemed a free-for-all, with questions and comments being fired at arguing counsel without much let up.

Here's our take on what each Justice said; the highlights (or lowlights, depending on your perspective):

Justice Scalia: Turning down an extortionate demand isn't a "taking" (p. 18), but under the District's theory, a demand for cash is "magic" (p. 33).

Justice Breyer: Sliced bread: not good (p. 19). He raised this in the context of a question to petitioner's counsel about whether this is a taking, and if so, if Penn Central doesn't supply the analytical framework, because the excessive demand "goes too far," as Justice Holmes said in that case.

Justice Ginsburg: Here, the District didn't say "take it or leave it" (about the condition) (p. 7).

Justice Sotomayor: Stopping landowners from developing their property is interfering with "lost profits." (p. 17).

Justice Kennedy: Due Process, man, Due Process! (p. 26).

Chief Justice Roberts: Is there no constitutional limit on what an agency can demand, as long as it does so prior to issuing a permit? (pp. 30-31).

Justice Alito: Owners' Counsel of America, I read your brief! (He asks the hypothetical we pose at page 12 of our brief) (p.33).

Justice Kagan: I might have a problem here if District is shifting burden to the property owner to propose mitigation measures, and not inform the owner what the District wants (p. 11).

Justice Thomas: This would be a taking, but only if the planner has a Yale J.D. (we're kidding, he didn't say this - or anything else).

In a clever sleight-of-word, the District's counsel hit upon the government's core theory: that the Fifth Amendment doesn't really have a "Takings" Clause, but only a "Just Compensation" Clause:

And in Lingle, this Court reiterated that the Takings Clause is not a substantive limitation on the government's power to regulate.

The Takings Clause -- or as I should call it, the Just Compensation Clause -- is a requirement that if -- that the government will pay you just compensation for any property or property interest it has seized from you. It does not -- it does not itelf impose a -- a requirement that the government substantively justify its regulation.

Tr. at 42. This issue will likely be more squarely addressed in the remaining takings case the Court is considering this term, Horne v. United States Dep't of Agriculture, No. No. 12-122 (cert. granted. Nov. 20, 2012). In that case, the Court is considering whether a property owner can assert a takings defense to the imposition of a fine levied for violating a federal regulation, or whether the owner must pay the fine and then bring a takings case for just compensation in the Court of Federal Claims. That case is in the briefing stage, and is scheduled to be argued on March 20, 2013.

So for now, we'll have to be content with the transcript in Koontz.

SCOTUS Transcript In Koontz

For those of us who were far, far away, and thus not able to be in D.C. for today's oral arguments in person, here is the transcript in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012).

Here's the first recap of the arguments, from Greenwire's Lawrence Hurley, "Supreme court: Justices weigh Fla. property rights dispute."

More, after a chance to digest the transcript.

Transcript of oral arguments, Koontz v. St John's River Water Mgmt Dist., No. 11-1447 (Jan. 15, 2013) 

Exactions Flashback - Our Visit To The Dolan Site

With the oral arguments in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012) at last here, we thought we'd go back and revisit our write-up of our visit to the Dolan site, complete with photos: Regulatory Takings Pilgrimage Part II.

Koontz, as you know, is about whether the Nollan nexus test, and Dolan's requirement of "rough proportionality" apply only to land exactions, or is a generally-applicable test for all exactions.

LII Preview: Koontz "has the potential to drastically modify takings jurisprudence with regard to exactions"

Here's the Legal Information Institute's preview of tomorrow's U.S. Supreme Court arguments in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012). That's the case in which the Court will be addressing whether the "essential nexus" and "rough proportionality" standards of Nollan and Dolan are applicable only to exactions for land, or whether they are generally-applicable tests for all exactions.

Disclosure: we filed an amicus brief in the case in support of the property owner/petitioner. The property owner's brief on the merits is available here. The other amicus briefs supporting the property owner are available here, here, and here. The Water Management District's merits brief is posted here. The amicus briefs suporting the Water District are posted here. The property owner's reply brief is here.

The LII's preview has a good "he said she said" account of the case and the arguments, and concludes with this:

The Supreme Court’s ruling in this case will decide whether the constitutional standard set out in Nollan and Dolan apply so that the government can be held liable for an improper taking when the government refuses to issue a land-use permit on the sole basis that the permit applicant did not accede to a condition to dedicate money, services, labor, or any other type of personal property to a public use. If the Court adopts Koontz’s position, the standards will apply to cases where the government refused to issue a land use permit and to cases involving non-real property exactions. Koontz believes that these standards will protect landowners and developers from government corruption without hindering the government’s decision-making process. If the Court adopts St. Johns’ position, the standards will not apply to this case or similar cases but will continue to apply to cases where the government actually took real property from the landowner. St. Johns believes that these standards are not necessary because there are other safeguards in place to protect landowners and developers from government corruption and instead, these standards would be a detriment to the government and every community. The Supreme Court should consider Environmental Law concerns while making this decision.

As to the quote in the headline of this post, the preview starts with this:

Koontz argues that the constitutional standards set out in Nollan and Dolan should apply to this case and similar cases so that the government can be held liable for improper taking when the government refuses to issue a land-use permit on the sole basis that the permit applicant did not accede to a financial or public service condition. St. Johns River Water Management District argues that the constitutional standards set out in Nollan and Dolan should not apply to this case and similar cases where the government did not actually take any property from the landowner. This decision has the potential to drastically modify takings jurisprudence with regard to exactions. 

While yes, the case has the potential to "drastically modify" takings law, as our brief pointed out, it's not necessary for the Court to do so in order to reverse the Florida Supreme Court's decision. Several state jurisdictions (California and Texas, for example) already apply the nexus and rough proportionality requirements to all exactions. As these and other examples show, the sky will not fall should the Supreme Court apply what are relatively modest transparency requirements to the entire exaction process, and not artificially limit the test to demands for land. Nollan and Dolan do not prohibit exactions, they merely require the government to explain why an exaction is related to the use approval the property owner seeks.

To entertain yourself while we await for the release of tomorrow's transcript, revisit the recording of the oral arguments in Nollan, posted here. Listening to it, it struck us as how little the government's argument has changed in 27 years. Reading the Koontz briefs, it struck us as how little the government's argument changed in reaction to Nollan.

More, after tomorrow's oral arguments.

Koontz Preview: Request For Exaction Is Not A "Suggestion," But A "Velvet-Covered Hammer"

Here's the preview of next week's U.S. Supreme Court arguments in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012). That's the case in which the Court will be addressing whether the "essential nexus" and "rough proportionality" standards of Nollan and Dolan are applicable only to exactions for land, or whether they are generally-applicable tests for all exactions.

In Wetlands regulation at heart of Fla. property rights dispute, Greenwire's Lawrence Hurley writes:

In late 1993 and early 1994, Coy Koontz Sr. applied for two permits from a Florida agency as he sought to build on wetlands he owned just east of Orlando.

Today, Koontz has been dead for 13 years, his family no longer owns the property and the permits have long been approved. And yet a legal dispute about the permitting process is about to be argued at the Supreme Court.

As the story notes, we filed an amicus brief in the case in support of the property owner/petitioner.

In addition to the property owner's counsel Paul Beard ("the district was attempting to 'bargain its way around the takings clause'"), the Water District's lawyer Paul Wolfson ("a property owner cannot seek compensation 'for property that was never taken'"), lawprof John Echeverria ("It's a major case"), and Mike Berger (the "sky will not fall" if the Court subjects all exactions to Nollan/Dolan), the story quotes our response to the arguments made in the amici briefs supporting the Water District, that the property owner was not forced to give up anything, but merely was given "suggestions" about what he could do to get the agency to grant him permission to develop his land:

Robert Thomas, a Hawaii-based lawyer who filed a brief on behalf of the Owners' Counsel of America and represents property owners seeking permits, said his clients often accept stringent conditions on a regular basis simply so they can pursue their projects in a timely manner.

"They are willing to live with what might be unconstitutional requirements," Thomas said.

Government agency proposals are not mere "suggestions," as pro-government lawyers have argued, Thomas added. "It's a velvet-covered hammer," he said.

The property owner's brief on the merits is available here. The other amicus briefs supporting the property owner are available here, here, and here. The Water Management District's merits brief is posted here. The amicus briefs suporting the Water District are posted here. The property owner's reply brief is here.

Reply Brief In Koontz: Money Is Property

Here's petitioner's reply brief in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012), which responds to the Water Management District's merits brief.

In that case, the U.S. Supreme Court will address whether the "essential nexus" and "rough proportionality" standards of Nollan and Dolan are applicable only to exactions for land, or whether they are generally-applicable tests for all exactions.

Among other things, the reply addresses the argument made by the District and its amici that Nollan and Dolan aren't really "takings" cases, but involve due process or equal protection:

Due process and equal protection claims are also inapt. A due process claim questions whether the exaction serves some legitimate purpose, and an equal protection claim asks whether the exaction is applied equally to similarly situated individuals. But neither claim addresses whether a particular individual has been targeted to bear a public burden that should be borne by the general public, or whether he should be required to give up a constitutional right in exchange for the ability to use his land. Again, only Nollan and Dolan can answer these constitutional concerns.

Br. at 23.

This is the final brief in the case. Oral arguments are scheduled for next week, January 15, 2013. We'll bring you more as the date approaches.

We filed an amicus brief in the case in support of the property owner/petitioner. The property owner's brief on the merits is available here. The other amicus briefs supporting the property owner are available here, here, and here. The Water Management District's merits brief is posted here. The amicus briefs suporting the Water District are posted here.

Petitioner's Reply Brief, Koontz v. St. John's River Water Management Dist., No. 11-1447 (Dec. 8, 2013)

Epstein On Koontz: "Grand Theft Real Estate?"

In "When Government Takes You Hostage," lawprof Richard Epstein weighs in on the issues in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012). In that case, the U.S. Supreme Court will address whether the "essential nexus" and "rough proportionality" standards of Nollan and Dolan are applicable only to exactions for land, or whether they are generally-applicable tests for all exactions.

Professor Epstein writes:

The situation that is now before the Supreme Court in Koontz shows the folly of the current law, which rejects the long-established common law baselines between neighbors. No longer does the state have to take (and pay just compensation) to satisfy its environmental goals. Rather, the entire mitigation doctrine amounts to nothing more than a form of grand theft larceny by which the state first claims for nothing a state-wide environmental easement, which it will then sell back to the landowner for the (mitigation) price that it regards as acceptable by its own standards. It is, quite literally, no better than allowing the state to confiscate land for nothing, which it then duly sells back to its original owner for a price. Ransom money involves the same dubious strategy.

We filed an amicus brief in the case in support of the property owner/petitioner. The property owner's brief on the merits is available here. The other amicus briefs supporting the property owner are available here, here, and here. The Water Management District's merits brief is posted here. The amicus briefs suporting the Water District are posted here.

Oral arguments are scheduled for January 15, 2013.

Gov't Amicus Briefs In Koontz: A Demand For Money Is Not An Exaction (And Even If It Is, Penn Central Is The Test)

There have been five amicus briefs filed supporting the Water Management District's arguments in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012). That's the case in which the Supreme Court is considering whether the "essential nexus" and "rough proportionality" standards of Nollan and Dolan are applicable only to exactions for land, or whether they are generally-applicable tests for all exactions.

The property owner's brief on the merits is available here. The Water Management District's merits brief is posted here.

The amicus briefs just filed focus on the argument that a government demand for money is not an "exaction" that even triggers takings analysis, and if it is, the multifactor Penn Central test governs, not the Nollan-Dolan test.

• Brief for the United States as Amicus Curiae Supporting Respondent

• Brief for the States of California, Alabama, Connecticut, Hawaii, Illinois, Louisiana, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Mexico, New York, Oregon, Rhode Island, Tennessee, Utah, Vermont, Washington, the District of Columbia, and the Commonwealth of Puerto Rico, as Amici Curiae Supporting Respondent

• Brief of the American Planning Association, the City of New York, and the National Trust for the Historic Preservation in the United States as Amici Curiae in Support of Respondent

• Amici Curiae Brief of the National Governors Association, National Conference of State Legislatures, Council of State Governments, National League of Cities, National Association Counties, International City/County Management Association, and International Municipal Lawyers Association in Support of Respondent

• Brief of Former Members of the National Research Council Committee on Mitigating Wetland Losses as Amicic Curiae in Support of Respondent
  

We filed an amicus brief in the case in support of the property owner/petitioner that made two points. First, that money is "property," and there's no reason why the Nollan and Dolan tests should protect property owners only when land is demanded. Second, that requiring the authorities to articulate the nexus and rough proportionality of the exaction will likely improve planning practices. The other amicus briefs supporting the property owner are available here, here, and here.

Oral arguments are scheduled for January 15, 2013. The U.S. Solicitor General has asked the Court to allow it to present oral argument along with the respondent.

Upcoming ALI-CLE Eminent Domain Conferences

It's time for the annual ALI-CLE (fka ALI-ABA) eminent domain conferences, to be held January 24-26, 2013 in Miami Beach, Florida.

In the "advanced" course, Eminent Domain and Land Valuation Litigation, we'll be covering topics such as "Condemning Underwater Mortgages," "An Engineer's Role in Damage," "How To Develop and Implement a Business Plan for an Eminent Domain Practice," and "Condemnor Beware: What Activities Will Make You Liable for Pre-Condemnation Damages." Along with Pacific Legal Foundation's Jim Burling and Cornell lawprof Robert Hockett, I'll be speaking on the panel about underwater mortgages. More details on the agenda and the faculty here.

The companion course, Condemnation 101: How to Prepare an Eminent Domain Case, covers the basics of eminent domain law, and although designed as an overview of condemnation law for the beginner or general practitioner, it's a great refresher course for the seasoned eminent domain lawyer. More details here.

These are the premiere conferences about eminent domain and condemnation law, and a great chance to learn a lot, meet your colleagues from across the nation, and depending on where you are coming from, escape winter's chill. Hope you can join us.

Brief For The Respondent In Koontz: "Mere Obligation To Spend Money Is Not A Taking"

Here's the respondent's brief in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012). That's the case in which the Supreme Court is considering whether the "essential nexus" and "rough proportionality" standards of Nollan and Dolan are applicable only to exactions for land, or whether they are generally-applicable tests for all exactions.

The respondent's brief argues that the Water District did not demand an exaction, but merely "suggested a range of ways [the] applicant may [have] become eligible for a development permit." Br. at 40. The brief argues that because the District could have denied the permit outright, it was fine for it to "suggest" ways that the property owner could convince it to issue the permit, without needing to show that there was some relationship between the suggested mitigation measures and the justification supporting the denial. Thus this was not merely the Department being helpful, but was a "suggestion" that had the law behind it.

The District also argues that even if it was an exaction, it was "a mere obligation to spend money" on off-site mitigation, and under Eastern Enterprises v. Apfel, 534 U.S. 398 I1998), that is not a takings issue because requiring a property owner to spend money does not take any "property" --

Expanding the application of Nollan and Dolan to reach conditions on the issuance of permits that merely require the expenditure of fungible money would expose a broad range of monetary obligations—application fees, usage fees, and so forth—to heightened scrutiny under Nollan and Dolan. Petitioner suggests no limiting principle that would prevent many other fees, assessments, and taxes imposed on a daily basis, for everything from obtaining a driver’s license to traveling on a toll road or parking at a metered space, from being subjected to takings litigation. But that cannot be the law.

Br. at 48-49.

We filed an amicus brief in the case that made two points. First, that money is "property," and there's no reason why the Nollan and Dolan tests should protect property owners only when land is demanded. Second, that requiring the authorities to articulate the nexus and rough proportionality of the exaction will likely improve planning practices.  

Brief for Respondent, Koontz v. St. Johns River Water Management District, No. 11-1447 (Dec. 21, 2012)

One More Top Side Amicus Brief In Koontz

We always like reading amicus briefs filed by the Center for Constitutional Jurisprudence because they tend to focus on the history of whatever issue they are addressing, and the brief they (along with the Atlantic Legal Foundation and the Reason Foundation) filed in in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012) fits the bill. Check it out.

This looks like the final amicus brief supporting the property owner/petitioner. Now we wait for the respondent's brief (and amici). Stay tuned.

More Amicus Briefs In Koontz

Here are two more amicus curiae briefs in n Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012).

That's the case asking whether the "essential nexus" and "rough proportionality" standards of Nollan and Dolan are applicable only to exactions for land, or whether they are generally-applicable tests. We filed our amicus brief last week (posted here), and the other amicus briefs in support of the property owner/petitioner are here. 

• Brief of Amicus Curiae of The National Federation of Independent Business Small Business Legal Center - "With every delay, landowners become more and more exasperated. The sense of urgency is even greater for individuals of modest means, who have tied up much of their personal assets into their property. For a small business owner or a developer, delays are all the more difficult to bear because their livelihood is at stake."

• Brief Amicus Curiea of Hillcrest Property, LLP in Support of Petitioner - The lower courts' "confusion and uncertainty encourages just the sort of extortionate leveraging of the police power Nollan and Dolan were intended to prevent, while impaling property owners like Mr. Koontz on a Morton's Fork. Their choice is between either an unreasonable delay in the permit approval process followed by years or decades of litigation, or acquiescence in an uncompensated taking -- both of which may jeopardize the economic feasability of the proposed project."

We'll post any more briefs that come our way.

More Amicus Briefs In Koontz: Nollan/Dolan Apply To All Exactions

Here they are, more amicus curiae briefs in n Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012).

That's the case asking whether the "essential nexus" and "rough proportionality" standards of Nollan and Dolan are applicable only to exactions for land, or whether they are generally-applicable tests. We filed our amicus brief yesterday (posted here).

• Brief of Amici Curiae Association of Florida Community Developers, the Florida Land Council, the Florida Farm Bureau, and the Florida Fruit and Vegetable Association in Support of the Petitioner - "By drawing the line as it did, the Florida Supreme Court invited state-sanctioned mischief.Amici now remain at the mercy of savvy but cash strapped agencies and local governments that maywell escape the Nollan/Dolan doctrine by simply recasting land dedications as impact fees or by changing the timing of an exaction, forcing applicants to submit to an exaction before challenging its constitutionality."

• Brief Amici Curiae Supporting Petitioner by National Association of Home Builders and 15 other groups- This brief, authored by Mike Berger, argues that "[n]o matter how well intentioned the government may be, the Constitution was not designed to make government's life easier at the expense of private citizens. Quite the contrary."

• Brief of Amicus Curiae the Land Use Institute, Ltd., in Suport of the Petitioner
  - This brief responds to the Florida Supreme Court's assertion that holding all exactions to the Nollan/Dolan standards will result in permit denials in order to avoid takings liability.

• Brief of Amici Curiae Institute for Justice and the Cato Institute in Support of Petitioner - This brief details the widespread abuse of non-real property exactions in the absence of judicial scrutiny.

The property owner's brief on the merits is available here. The case is scheduled for argument on January 15, 2013.

Amicus Brief: Exaction Not Subject To Lesser Standards Because Taking Measured In Dollars And Not Square Feet

Today, on behalf of our colleagues at Owners' Counsel of America, we filed this amicus brief in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012). That's the case asking whether the "essential nexus" and "rough proportionality" standards of Nollan and Dolan are applicable only to exactions for land, or whether they are generally-applicable tests.

Our brief argues:

It is no great stretch to apply the nexus and proportionality standards to all exactions, and not just those demanding land. Like land, money is property, and should be subject to the same rules. Requiring compliance with Nollan and Dolan when government seeks money or other property in exchange for discretionary permits will not impose a significant burden on land planners, other than the requirement that they, like other officials, follow the Constitution. If the constable must understand the limitations the Constitution places on her powers, so must the planner. See San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621, 661 n.26 (1981) (Brennan, J., dissenting). The standards for land exactions articulated in Nollan and Dolan have been part of the regulatory landscape for nearly two decades, yet planning has not ground to a halt as a result. Indeed, in those jurisdictions in which state and local officials must adhere to the nexus and proportionality standards for all exactions, regulation is robust and the sky has not fallen. Neither will it fall if the nexus and proportionality standards are applicable everywhere else.

This brief makes two points. First, a requirement that owners provide money or make other tribute as a condition of exercising the constitutional right to own and use property is just as much a taking as a requirement that owners donate land, because money, like land, is property protected from uncompensated expropriation. Second, applying heightened scrutiny to monetary and other exactions will not unduly interfere with land-use planning. Indeed, requiring that state and local governments demonstrate a nexus and rough proportionality for land exactions has improved planning by making the rules more concrete and the process more transparent. There is no reason to believe the same will not hold true when applied to all exactions.

The Florida Supreme Court opinion holding that the nexus and proportionality tests of Nollan/Dolan do not apply to government demands for cash and other forms of property is here. That court asserted that in Del Monte Dunes and Lingle, the U.S. Supreme Court had "specifically limited" the reach of Nollan and Dolan to land exactions. Our response:

This Court has not "specifically limited" Nollan and Dolan as the Florida court concluded, and should now confirm that the nexus and proportionality standards govern all exactions, because the dynamics in the case at bar are precisely the same as those compelling the Nollan and Dolan requirements. Those requirements are designed to restrain government’s temptation to take advantage of an owner seeking development permissions to force the owner to shoulder a greater burden than her proposed use is shown to cause. Forcing the owner to bear an excess burden violates the Takings Clause. See Armstrong, 364 U.S. at 49 (Takings Clause is designed "to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole."). A government demand for money should not be subject to lesser standards than demands for other forms of property because Armstrong’s rationale applies whether the excess burden is measured in square feet or in dollars.

The property owner's brief on the merits is available here. Others have also filed amicus briefs, and we will post those as we receive them. The case is scheduled for argument on January 15, 2013. The Court's docket entry is here.

Stay tuned.

Brief Amicus Curiae of Owners' Counsel of America in Support of the Petitioner, Koontz v. St. John's River ...

Petitioner's Brief In Koontz: No Bargaining Around The Takings Clause

Here's the property owner's merits brief in Koontz v. St Johns River Water Mgmt Dist., No. 11-1447 (cert. granted Oct. 5, 2012). 

This case presents two questions:

• Whether the government violates the Takings Clause when it refuses to issue a land-use permit on the sole basis that the permit applicant did not accede to a permit condition that, if applied, would violate the essential nexus and rough proportionality tests set out in Nollan and Dolan?

• Whether the nexus and proportionality tests set out in Nollan and Dolan apply to a land-use exaction that takes the form of a government demand that a permit applicant dedicate money, services, labor, or any other type of personal property to a public use.

The amicus briefs in support of the property owner are due next week. We'll post those when available.

Petitioner's Brief on the Merits, Koontz v. St. Johns River Water Mgmt Dist., No. 11-1447 (Nov. 21, 2012)

Three Takings Cases This Term - What's The Deal?

As you know, yesterday the Supreme Court granted cert in Horne v. U.S.D.A., No. 12-123 (cert. granted Nov. 20, 2012), the third takings claim this season. As this article asked, what, if anything, is going on? Is it just "serendipity" or a "return to the norm" as two lawprofs quoted in the article suggested, or might it be something else?

Of course, no one knows but the justices themselves (and maybe the cert pool clerks). But that won't prevent us from engaging in a little lighthearted speculation. One theory that might explain why the Court seems to be particularly interested in property cases this term is the recent election.

It takes only four of the justices to agree to review a case, and we can safely count Justices Scalia, Thomas, and Alito as very property friendly, and Justice Kennedy and Chief Justice Roberts are moderately property friendly. If at least four of them saw (for the two pre-election grants) or now see (for Horne) the handwriting on the wall -- that President Obama will continue to appoint justices who are not property friendly -- they may be open to putting more property cases on the docket before there are any new vacancies on the Court.

If this theory is correct, then now's the time for those who have certworthy issues to try and tee those cases up, because the short-term future may be your golden opportunity to get a case more noticed than it might otherwise be. We're aware of one or two cases in the pipeline (or soon to be) that seem like possible candidates.

Then again, we might be dead wrong (the Court did not grant cert in another takings case yesterday). But it sure is fun to speculate.

Professor Ely, You Magnificent Bastard, I Read Your Book!

Here are my remarks from last week's Brigham-Kanner Property Rights Conference at the William & Mary Law School in Williamsburg, Virginia. Our panel spoke on "Property Rights in Times of Economic Crisis," and included lawprofs James W. Ely (Vanderbilt), William Fischel, (Dartmouth), and Eric Kades (William & Mary). See the complete faculty list and agenda here.

+++++++++++++++++++++++++++++++++++++++

Aloha, I bring you greetings from the land of Midkiff, the land of Lingle.

I practice in the jurisdiction that believed it would cure our economic ills to use eminent domain to bust up the legacy land trusts, and make sure that everyone who owns a home could also own the fee simple interest.

Which they may now do, provided they can afford our median price for a single-family residence, $637,000.

I practice in the jurisdiction that believed that it would be a good idea to try and bring down the price of gasoline to consumers -- and who can doubt that this is a desired public good? -- by regulating the rent that company-owned gas stations could charge service station operators.

Which only resulted in the price of gas going up.

So it is appropriate, given my origins, that I've been asked to speak on the topic of "Property Rights in Times of Economic Crises." The Fifth Amendment, after all, is the only provision in the Bill of Rights (joined perhaps by the Excessive Fines Clause) expressly phrased in terms of economic rights: public use of property, and of course, the just compensation requirement, which requires that justice be measured by the amount of money or other compensation an owner is entitled to when her property is taken.

Of course, my glib side wants to say that if we respected property rights more, we'd have economic crises less, and that if you want to understand how to avoid economic hard times, you simply need to read the scholarship of today's panelists and exclaim, to paraphrase General George Patton -- or, more accurately, actor George C. Scott:

"Professor Ely, you magnificent bastard, I read your book!"

But that would be too easy, and I'd be left yielding 12 minutes of my time to my fellow panelists, and perhaps releasing you early for our lunch break. So to fill that time, I'd like to discuss three illustrations of the importance of property rights when times are tight.

First, property rights, almost by definition, protect those who own property, and property rights are viewed as the province of the wealthy and the powerful, who, current theory goes, deserve lesser judicial protection because their wealth and power give them a means to participate in the political process on a "more equal" basis that their less fortunate fellow citizens.

But a recent decision from the Ninth Circuit repudiates that view.

In Lavan v. City of Los Angeles, No.11-56253 (Sep. 5, 2012), a 2-1 decision from a Ninth Circuit panel, two judges viewed as "liberal," including Judge Stephen Reinhardt, the judge who gave us the bizarre economic theory that eventually bore fruit in the Tahoe-Sierra majority (it's OK to wipe out all value temporarily, because the property will "eventually recover its value"), held that the City of Los Angeles could not presume that property owned by homeless people in the Skid Row area was abandoned, and prohibited the City from seizing and destroying it when the owner was "momentarily away" from it.

This being the Ninth Circuit, the majority judges were more comfortable basing the ruling on the Fourth Amendment and not the Fifth. But get a load of this quote:

As we have repeatedly made clear, "[t]he government may not take property like a thief in the night; rather, it must announce its intentions and give the property owner a chance to argue against the taking." Clement v. City of Glendale, 518 F.3d 1090, 1093 (9th Cir. 2008). This simple rule holds regardless of whether the property in question is an Escalade or an EDAR [a small, portable shelter provided to homeless people], a Cadillac or a cart. The City demonstrates that it completely misunderstands the role of due process by its contrary suggestion that homeless persons instantly and permanently lose any protected property interest in their possessions by leaving them momentarily unattended in violation of a municipal ordinance. As the district court recognized, the logic of the City’s suggestion would also allow it to seize and destroy cars parked in no-parking zones left momentarily unattended.

Slip op. at 10591.

From this case, I glean the constitutional rule that "one man's junk is another's gold," a rule that undoubtedly has allowed the creators of e-Bay to earn billions, and the producers of reality TV shows to schedule seemingly infinite programming. But all kidding aside, this is a great point by the Ninth Circuit (something I am not able to say with much frequency): if property rights are frequently asserted by those who own lots of property, they surely protect those who have little. Because there, but for the grace of God, go I.

But what about the so-called "one-percent?" Aren't they the ones who assert property rights most frequently? I turn now to the recent proposal that seems to be gaining the most traction in California, for municipal governments to use eminent domain to seize "underwater" but performing mortgages.

Proponents of the scheme argue it will fix the burst bubble and right the housing market, all at little to no cost to the public. Call me a skeptic, but this plan sounds like those from my home jurisdiction that went all farpotshket, a term that our esteemed colleague for whom the Brigham-Kanner prize is named surely recognizes.

But I'm not here today to offer my thoughts on the wisdom of the plan; let's just say I was officially agnostic until I heard the CEO of Mortgage Resolution Partners remark at a recent conference on the topic that eminent domain will have no cost, and as a consequence I am now against it, or at least highly skeptical. A "doubting Thomas" if you will. Eminent domain will have "no cost?" For a scheme that, I think, has not fully thought out whether it will pass muster under even the low Kelo bar or the particulars of California's law of necessity. And the proponents' belief that they have correctly calculated just compensation for the underwater-but-performing mortgages appears overly simplistic and too optimistic to me. If that situation ever develops into litigation, it will be the "one-percenters," not our homeless friends on Skid Row, who will be asserting and defending property rights.

How much sympathy should we have for those lenders and bankers who are supposedly keeping homeowners in economic bondage? Not much, I guess, but my point is that in the context of defending property rights, who cares who is doing the defending, since we all benefit from the result when the courts rule correctly. We speak quite often -- last night's Vice Presidential Debate being the most recent example -- of our overarching desire to protect the "middle class." But because most of the members of this group cannot afford to litigate to defend their property rights, it is left up to either outfits like Pacific Legal Foundation or the Institute for Justice who can litigate a select few cases pro bono, or the property owners who have the staying power to pay their lawyers to defend their rights, to take up the fight.

If they don't do it, property rights lose. To paraphrase Martin Niemöller, if I don't speak up when they come for the lenders and bankers, when they come for me there will be no left to speak up.

Lastly, a quick word about the case the Supreme Court agreed last week to review, Koontz v. St. Johns River Water Management Dist., No. 11-1447 (cert. granted Oct. 5, 2012). The Court has taken up the question of whether the Nollan/Dolan nexus-proportionality tests apply to government demands for cash, as well as land exactions. This case may also settle other issues such as whether compensation is the sole remedy for a regulatory taking, whether substantive due process or takings the vehicle by which to evaluate exactions, and whether money is "property."

And here I offer a prediction. Not what the Court will do (I will let you guess what position the amicus brief we're going to file will be arguing), but rather than because of the economy in which we find ourselves, and the Questions Presented are expressly about money, that the Court will deal with the contrasts I have highlighted today.

Finally, please allow me to wrap up by offering my thanks to the organizers of this program. To a property owners' lawyer, and an admitted property law nerd, to participate in this conference is like a baseball fan being offered the chance for an at-bat at Yankee Stadium in October. In other words, the pinnacle; a chance to rub shoulders, and perhaps share the limelight for a moment, with the Ruths and the Gehrigs in our field of law. Thank you.

SCOTUS Grants Cert: Does Nollan/Dolan Apply To Cash Exactions?

This just in: our Pacific Legal Foundation colleagues have informed us that the U.S. Supreme Court has agreed to review another takings case.

The questions presented are:

1. Whether the government can be held liable for a taking when it refuses to issue a land-use permit on the sole basis that the permit applicant did not accede to a permit condition that, if applied, would violate the essential nexus and rough proportionality tests set out in Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994); and

2. Whether the nexus and proportionality tests set out in Nollan and Dolan apply to a land-use exaction that takes the form of a government demand that a permit applicant dedicate money, services, labor, or any other type of personal property to a public use.

The case is Koontz v. St. Johns River Water Management Dist., No. 11-1447 (cert. granted Oct. 5, 2012). The Florida Supreme Court opinion holding that the nexus and proportionality tests of Nollan/Dolan do not apply to government demands for cash is here. PLF's cert petition is here. The water district's BIO is here. 

We're on the road at an ABA conference, so will post more details later.

A Microcosm Of Hawaii Land Use Law

If you need another reminder of what land use and zoning law looks like on Kauai in practice (and, in turn, in Hawaii generally), see this article, Hanalei vs. Hanalei in The Garden Island newspaper. It's about a proposal to develop a new resort that (not surprisingly) is "meeting staunch opposition from a rapidly growing group of people."

The developer side has its own view, touting the proposed resort as "the most environmentally and culturally responsible visitor-oriented project ever to be proposed in the state." The story reports that one of the project's backers is "billionaire and eBay founder Pierre Omidyar," so that could make this a very interesting development instead of the usual enviros vs developer scenario, since Omidyar, according to at least one of the project's opponents "has the right mind," and "right heart" to donate at least part of the land to preserve a viewplane.

The situation is shaping up as a microcosm of the development process in Hawaii, and the article is well worth a read.

BIO In SCOTUS Florida Exactions Case: Fla Supremes Ruled Only Under Fla Law

Florida land use and environmental law attorney Jake Cremer has posted the Brief in Opposition in Koontz v. St. Johs River Water Management Dist., No. 11-1447 (cert. petition filed May 30, 2012), the case asking whether the Nollan/Dolan nexus and proportionality tests  apply to a land-use exaction that takes the form of a government demand that a permit applicant dedicate money, services, labor, or any other type of personal property. We posted the cert petition here.

Jake writes:

The U.S. Supreme Court has not yet given much more guidance on exactions, and confusion has been the result. The Florida Supreme Court forged its own path, holding that the Nollan-Dolan test only applies to (1) exactions of real property (2) where a permit was actually issued and imposed an exaction. Consequently, in Florida, there are now relatively few restrictions on what a local government can ask for in exchange for a development permit. Other states, like Texas, have seen little distinction between a government asking for real property and asking for personal property (like money). This latter view seems to make the most sense to me: real and personal property are fungible, and both can be used to mitigate development impacts, so why should the government be able to avoid the Takings Clause by asking for personal property?

The District has responded to the Pacific Legal Foundation's petition for certiorari. The brief doesn't seem to be available elsewhere online, so I've posted the District's opposition brief here and below. The District makes a couple of arguments. First, the Supreme Court does not have jurisdiction because of Koontz's reservation of his rights to take claims to federal court later. Second, the District did not exact anything because it never issued a permit or collected an exaction.

These problems do not seem to be insurmountable to the Court in taking the case on. First, Florida's Takings Clause is interpreted coextensively with the federal Takings Clause, so the Court could accept jurisdiction just as it did when a very similar argument was made in the briefing of Stop the Beach Renourishment v. Florida Department of Environmental Protection,130 S. Ct. 2592 (2010). Second, if the District's exaction were unconstitutional and so onerous that the landowner could not continue with its plan (or do anything else), why should it be shielded from liability? In effect, as the trial court seemed to recognize, that may just mean a temporary taking occurred. 

I'll have an article in the American Planning Association's Planning & Law Newsletter soon taking a deeper look at these issues.

The petition is scheduled for the Court's September 24, 2012 conference. Here's the Court's docket entry for the case.

Barista's note: you really should follow Jake's blog, The Florida Land Environment, even if you are not in Florida. The topics he covers are interesting to a broad range of practitioners.

New Cert Petition: Nollan/Dolan Not Limited To Land Exactions

Here's the cert petition in a case we've been following that presents a question that has divided the lower courts - do the nexus and rough proportionality tests for whether a land use exaction works a taking apply to exactions of cash, or are they limited to land exactions? In St. Johns River Water Management Dist v. Koontz, No. SC09-713 (Nov. 3, 2011), the Florida Supreme Court added to the lower court split when it held under both the U.S. and Florida Constitutions that the Nollan and Dolan tests are only applicable "where the condition/exaction sought by the government involves a dedication of or over the owner's interest in real property in exchange for permit approval; and only when the regulatory agency actually issues the permit sought, thereby rendering the owner's interest in the real property subject to the dedication imposed."

The property owner has now sought U.S. Supreme Court review, presenting two Questions Presented:

For over eleven years, a Florida land use agency refused to issue any of the permits necessary for Coy A. Koontz, Sr., to develop his commercial property. The reason was because Koontz would not accede to a permit condition requiring him to dedicate his money and labor to make improvements to 50 acres of government-owned property located miles away from the project—a condition that was determined to be wholly unrelated to any impacts caused by Koontz’s proposed development. A Florida trial court ruled that the agency’s refusal to issue the permits was invalid and effected a temporary taking of Koontz’s property, and awarded just compensation. After the appellate court affirmed, the Florida Supreme Court reversed, holding that, as a matter of federal takings law, a landowner can never state a claim for a taking where (1) permit approval is withheld based on a landowner’s objection to an excessive exaction, and (2) the exaction demands dedication of personal property to the public.

The questions presented are:

1. Whether the government can be held liable for a taking when it refuses to issue a land-use permit on the sole basis that the permit applicant did not accede to a permit condition that, if applied, would violate the essential nexus and rough proportionality tests set out in Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994); and

2. Whether the nexus and proportionality tests set out in Nollan and Dolan apply to a land-use exaction that takes the form of a government demand that a permit applicant dedicate money, services, labor, or any other type of personal property to a public use.

More to come. Here's the Court's docket entry if you want to follow along on your own.

Justice Lynn "Buck" Compton

Gideon Kanner reminds us of the passing of retired California Court of Appeal Justice Lynn "Buck" Compton, famous of late for his exploits as a hard-charging paratrooper in World War II (L.A. Times story here). Gideon writes about Justice Compton's time on the bench:

No, we aren’t going to wax lyrical about the high profile criminal cases in which he was involved, first as a prosecutor and later as a judge. We leave that to the popular press. We do wish to note that "Buck" Compton was one of the few — very few — California appellate judges who would give condemnees an even break, and for that he deserves our, and your thanks. He was tough-looking and blunt, but you knew when you appeared before him on behalf of property owners in an eminent domain case that he would listen to your arguments and give them fair consideration, unlike so many of his colleagues who made only rudimentary efforts to conceal their disdain for condemnees and their arguments.

I never appeared before Justice Compton, but since I took airborne training during my short time in the army many years ago (dad was an old soldier with the 101st, so I naturally tried that before law school) and had read the Stephen Ambrose book Band of Brothers and followed the miniseries, I knew of Compton's wartime service. It also happened that a fellow resident of my mother's apartment building was also a retired L.A. deputy DA, and had spent years with Compton prosecuting cases, and over time he shared many stories of their days practicing together with me.

But I had studied only one of Justice Compton's opinions in detail before (City of Los Angeles v. Venice Peninsula Properties, 205 Cal. App. 3d 1522, 253 Cal. Rptr. 331 (1988), the case involving whether Ballona Lagoon in Southern California was subject to the state's tidelands trust, that eventually ended up in the Supreme Court. See Summa Corp. v.  California ex rel. Lands Comm'n, 466 U.S. 198 (1984)).

Today's reports and Gideon's write up compelled me to look others up. Here's a sampling:

• Smith v. State, 50 Cal. App. 3d 529 (1975) (an inverse condemnation Klopping claim for inequitable precondemnation activities; court held that delay of condemnation was not arbitrary: "Given the uncertainties of today and the multitude of obstacles to be surmounted before formal condemnation of plaintiffs' property may take place, the present adoption appears to us to be no more than a general plan no more certain of implementation than the one addressed in Selby.").

• Smart v. City of Los Angeles, 112 Cal. App. 3d 232, 169 Cal. Rptr. 174 (1980) (inverse condemnation for damages resulting from LAX overflights; court held that the statute of limitations had not expired).

• Pacific Legal Foundation v. Cal. Coastal Comm'n, 129 Cal. App. 2d 44, 180 Cal. Rptr. 858 (1982) (Justice Compton's opinion held that the Coastal Commission overstepped its authority: "Rarely, if ever, have we had occasion to note such an overt manifestation of bias and the use of such pejorative language in the official writings of an agency of the State of California. By that statement the Commission has simply declared that the very existence of privately owned residences along the shore line is an anathema to the public interest and has cast the private property owner in the role of the 'heavy' in every scenario. The regulation is in direct contradiction with the spirit of Public Resources Code section 30001(d) and the stated legislative policy."). (sorry, I can't seem to find a web-available version of this opinion since it was vacated as unripe by the California Supreme Court and presumably "depublished").

• Also, we couldn't resist this quote from that case: "In other words, the Commission takes the view that private owners of beach front property must eventually lose their property by either permitting it to be eroded away by the inevitable and unaltered 'shoreline processes' or dedicate it to the state as a price for preventing such erosion. This is a veritable 'Hobson's Choice' involving a decision which, as in the case of Jackson, et al. v. Commission, often must be made under exigent circumstances." Note that the U.S. Supreme Court in another case involving the Coastal Commission eventually upheld this view. See Nollan v. Cal. Coastal Comm'n, 483 U.S. 825 (1987).

• Tilem v. City of Los Angeles, 142 Cal. App. 3d 694, 191 Cal. Rptr. 229 (1983) (inverse and straight takings cases in which the court held for the property owner in a Klopping claim: "Without a doubt the City's conduct in the case under review placed a substantial "cloud" over both parcels of land owned by Tilem.").

• (City of Los Angeles v. Venice Peninsula Properties, 205 Cal. App. 3d 1522, 253 Cal. Rptr. 331 (1988) ("At issue on this appeal is whether, by virtue of the so-called California Tidelands Trust Doctrine, the State and its successor in interest, the City, can assert an easement for commerce, navigation and fishery over land which was part of a Mexican land grant and patented by the United States government pursuant to the Act of 1851. We hold that neither the State nor the City possess such an easement over the property in question here.") (footnote omitted)

• Baldwin Park Redev. Agency v. Irving, 156 Cal. App. 3d 428, 202 Cal. Rptr. 792 (1984) ("The essential question to be resolved on this appeal is whether the condemner's conduct entitles defendant to an award of damages for the value of her business inventory less the amount obtained at the salvage sale. The Agency maintains that such personal property is, as a matter of law, noncompensable in an action for condemnation of real property and that as a consequence defendant may not be indemnified for the loss allegedly incurred here. We have concluded, however, that since the condemnatory act in and of itself resulted in the devaluation of her stock in trade, she is entitled to be compensated for the loss of the property in question.").

• Aetna Life & Cas. Co. v. City of Los Angeles, 179 Cal. App. 3d 865, 216 Cal. Rptr. 831 (1985) (inverse condemnation includes damages from fire). 

• Redev. Agnecy of City of Huntington Park v. Norm's Slauson, 173 Cal. App. 3d 1121, 219 Cal. Rptr. 365 (1985) (agency had no right to take property because "[i]n short, the agency, without any notice to Norm's, in effect sold the property and issued bonds to obtain the money to acquire the property all before taking any steps to condemn the property.")

In addition to these opinions, you really should read the L.A. Times obituary - my gosh, what a life: Rose Bowl athlete, tough-but-humble paratrooper and warrior, police detective, high-stakes prosecutor, measured jurist, author.

Links From Today's IMLA Regulatory Takings Webinar

Here are the links to the cases and other items discussed today at the International Municipal Lawyers Association webinar with Dan Mandelker and Dwight Merriam. Most of these cases are also in your written materials.

• 9th Circuit: California Raisins Were Not Taken (Horne v. U.S.D.A., No. 10-15270 (9th Cir. July 25, 2011))

• Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982).

• Kaiser Aetna v. United States, 444 U.S. 164 (1979).

• Yee v. City of Escondido, 503 U.S. 519 (1992).

• Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992).

• Stop the Beach Renourishment, Inc. v. Fla. Dep’t of Envtl. Prot., 130 S. Ct. 2592 (2010).

• Vandevere v. Lloyd, No. 09-35957 (9th Cir. July 11, 2011).

• Vanek v. State, 193 P.3d 283, 286 (Alaska 2008).

• Brown v. Howard, 2011 WL 2535555, at *1 (S.C. June 21, 2011).

• South Carolina Bar's amicus brief in Brown.

• Johnson v. Manitowoc County, No. 10-2409 (Mar. 19, 2011).

• Amerisource Corp. v. United States, 525 F.3d 1139 (Fed. Cir. 2008).

• Bala v. North Dakota, No. 20090312 (Sup. Ct. N.D. Aug. 23, 2010).

• Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (2005).

• Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985).

• Kelo v. City of New London, 545 U.S. 469 (2005).

• DeCook v. Rochester Int’l Airport Joint Zoning Bd., No. A09-96 (Sup. Ct. Minn. Mar. 30, 2011).

• McCarthy v. City of Cleveland, No. 09-4149 (6th Cir. Nov. 9, 2010).

• Chicago v. Int’l College of Surgeons, 522 U.S. 156, 15 (1997).

• Dunlap v. City of Nooksack, No. 63747-9-9 (Oct. 25, 2010).

• Penn Central Trans. Co. v. New York City, 438 U.S. 104 (1978).

• Guggenheim v. City of Goleta, No. 06-56306 (9th Cir. Dec. 22, 2010) (en banc).

• Colony Cove Properties, LLC v. City of Carson, 640 F.3d 948 (9th Cir. 2011) (cert. denied Oct. 17, 2011).

• Downing/Salt Pond Partners v. Rhode Island, 643 F.3d 16 (1st Cir. 2011).

• Petition for Rehearing/En Banc in CCA Associates (Federal Circuit) (seeking review of this opinion).

• Avenida San Juan P'ship v. City of San Clemente, No. G043479 (Cal. Ct. App. Dec. 14, 2011).

• R&J Holding Co. v. Redevelopment Authority of Montgomery County, No. 10-1047 (3d Cir. Dec. 9, 2011).

 

ALI-ABA Annual Eminent Domain Conference, January 26-28, 2012, San Diego

Get ready, it's that time of year again: the annual eminent domain law conferences by the American Law Institute-American Bar Association, this year to be held in San Diego from January 26-28, 2012.

Here's the description of Eminent Domain and Land Valuation Litigation, the premiere program on condemnation law and related topics:

The power of eminent domain is being reshaped across the nation by court rulings and legislation. Much of the recent court activity and legislation has involved the controversial use, or attempted use, of eminent domain power to take private property for economic development by private parties. Redevelopment, however, is not the only fluid area in takings law. This national course of study addresses those areas where new developments in the law and procedure have and will reshape the practice. Learn what’s new in the cutting-edge areas of eminent domain law and how the practice in this field continues to evolve.

This popular and long running advanced course of study kicks off with a comprehensive update on eminent domain case law and legislation by a preeminent practitioner.

Each morning, the course focuses on hot issues and topics that affect practitioners today.

On Thursday and Friday afternoon, a dual track system addresses important substantive and practice topics in a series of breakout sessions. Registrants can learn about the key issues in substantive takings law from nationally recognized and experienced professionals. On the practice side, registrants can choose from another array of sessions chock full of practice pointers.

The course brings all the right participants together — lawyers, appraisers, condemning agencies, right-of-way professionals, and many others — to share valuable experiences and engage in healthy debate on these cutting-edge issues.

Networking opportunities are scheduled throughout the program, with breakfasts, networking breaks, a reception on Thursday afternoon, and social activities in the evenings arranged by a special Hospitality Committee. Come and meet with colleagues from around the nation, exchange ideas, enjoy the fellowship, and collect more than 16 hours of CLE credits.

This course runs concurrently with ALI-ABA's annual Course of Study, Condemnation 101: Making the Complex Simple in Eminent Domain. This unique format allows practitioners who are new in the field of eminent domain to network with many of the nation's most experienced condemnation lawyers, and to benefit from many of those same lawyers serving as their faculty. Special Offer: Attend Eminent Domain and Land Valuation Litigation and bring an associate to Condemnation 101 for 50% off.  ADD TO CART

We're on the faculty ("The Role of Hawaii's Unique Property Law in the U.S. Supreme Court's Takings Cases"with Professor David Callies), so if you attend either course, please stop by and say hi.

Lower Court Split On Applicablity Of Nollan/Dolan To Exactions Other Than Land Continues: West Linn Petition Denied

West Linn Corporate Park LLC v City of West Linn, No. 11-299 (petition for cert. filed Sep. 6, 2011), a petition we've been following that asked whether the nexus and "rough proportionality" tests for a regulatory taking in Nollan and Dolan are limited to government demands for land, has been denied.

California and Texas say the nexus and rough proportionality standards apply to all exactions (we don't want the government blackmailing permit applicants, regardless of the tribute that is demanded), while Florida says they don't. Other courts have also weighed in on one side or the other, and lacking guidance from the Supreme Court, will continue to flounder about on this issue.

We suspect the Court's reluctance to address the confusion has less to do with the issue at hand (must all exactions be related and proportional to the predicted impact of the development) and more to do with the Court's inabliity to describe the nature of the cause of action after Lingle. In that case, the Court "relocated" the "substantially advance" test from takings law to due process, even as it reaffirmed the validity of Nollan and Dolan. If we had to guess, we'd say Justice Kennedy wouldn't mind viewing Nollan and Dolan through due process lenses, while Justice Scalia ain't having none of that.

Meanwhile, while the Court tries to make doctrinal sense of exactions, local governments who demand them, and property owners who have to choose whether to acquiese to them, are left wondering whether and what is legal, and the federal constitutional standard now varies from state to state. 

The beat goes on.

West Linn Case A "Petition To Watch" - Are Nollan And Dolan Limited To Exactions Of Land?

SCOTUSblog has designated West Linn Corporate Park LLC v City of West Linn, No. 11-299 (petition for cert. filed Sep. 6, 2011), as a petition to watch for today's conference.

That's the case which asks whether the nexus and "rough proportionality" tests for a regulatory taking in Nollan and Dolan are limited to government demands for land.

"Petitions to watch" are those petitions which SCOTUSblog predicts have a reasonable chance of a grant (besides their own, of course).

Late-Breaking: Supplemental Brief In West Linn Case: Are Nollan And Dolan Limited To Exactions Of Land?

Hold the presses! In an unusual move spurred by a recent decision by the Florida Supreme Court, the petitioner has filed a supplemental brief in West Linn Corporate Park LLC v City of West Linn, No. 11-299 (petition for cert. filed Sep. 6, 2011), the case which asks whether the nexus and "rough proportionality" tests for a regulatory taking in Nollan and Dolan are limited to government demands for land.

Earlier this week, we thought we had seen the final briefs in the case, but alas no. The petitioner's supplemental brief discusses the Florida Supreme Court's opinion in St. Johns River Water Management Dist v. Koontz, No. SC09-713 (Nov. 3, 2011), which held that Nollan and Dolan analysis is limited to real estate exactions, and do not apply to demands for offsite mitigation. The brief argues:

The Florida Supreme Court’s decision in Koontz underscores the importance of the issue posed by the petition in this case. Moreover, it demonstrates the deepening divide between those courts such as the Supreme Courts of California and Texas which perceive no principled reason to distinguish between disproportional exactions of personal as opposed to real property and those Courts such as the Supreme Courts of Oregon and Florida, as well as the Ninth Circuit, that erroneously perceive in this Court’s decision in Lingle an unstated intent to limit Nollan and Dolan. Only this Court can decide this important conflict and bring clarity to this area of constitutional law.

Brief at 5.

Supplemntal Brief for the Petitioner, West Linn Corp. Park LLC v. City of W. Linn, No. 11-299 (11-8-2011)No...

Final Cert Briefs In West Linn Case: Are Nollan And Dolan Limited To Exactions Of Land?

We've been thinking a lot about exactions lately.

First, it was the petition for certiorari in West Linn Corporate Park LLC v City of West Linn, No. 11-299 (petition for cert. filed Sep. 6, 2011), which asks whether the nexus and "rough proportionality" tests for a regulatory taking in Nollan and Dolan are limited to government demands for land. Then, late last week the Florida Supreme Court disagreed with the California and Texas Supreme Courts, and held in St. Johns River Water Management Dist v. Koontz, No. SC09-713 (Nov. 3, 2011) that Nollan and Dolan analysis is limited to real estate exactions, and do not apply to demands for offsite mitigation.

Now we're back to the West Linn case, since the parties have filed their final briefs, and the Court is scheduled to decide whether to take the case at its upcoming November 10, 2011 conference. So here are the city's Brief in Opposition and the property owner's Reply Brief.

We're following this case closely, so will have more after the Court releases its order from the conference. This seems like an issue that is ripe for resolution so to us the chances of a grant are as good as they can be.

Fla S Ct: Nollan/Dolan Applies Only To Exactions Of Land

This just in: on November 10, 2011, the U.S. Supreme Court will consider whether it has found the vehicle to resolve an issue the lower courts have vehemently disagreed upon, whether the Nollan/Dolan nexus/rough proportionality analysis is limited to exactions of real property. See West Linn Corporate Park, LLC v. City of West Linn, No. 11-299.

The Ninth Circuit concluded it does not, disagreeing with the California and Texas Supreme Courts, which have held that Nollan/Dolan is applicable to all exactions, not just demands for land. Yesterday, the Florida Supreme Court weighed in, holding in St. Johns River Water Management Dist v. Koontz, No. SC09-713 (Nov. 3, 2011):

Accordingly, we hold that under the takings clauses of the United States and Florida Constitutions, the Nollan/Dolan rule with regard to "essential nexus" and "rough proportionality" is applicable only where the condition/exaction sought by the government involves a dedication of or over the owner's interest in real property in exchange for permit approval; and only when the regulatory agency actually issues the permit sought, thereby rendering the owner's interest in the real property subject to the dedication imposed.

Slip op. at 19. The court acknowleged the lower court split, and the West Linn petition:

Our holding today is consistent with the 2011 decisions of two federal appellate courts, both of which held that Nollan and Dolan are inapplicable to cases that do not involve the dedication of real property for a public use. See Iowa Assurance Corp. v. City of Indianola, 650 F.3d 1094, 1096-97 (8th Cir. 2011) (ordinance which required an enclosed fence to surround areas where two or more race cars are present not subject to a Nollan/Dolan exactions analysis); West Linn Corporate Park, LLC v. City of West Linn, 428 F. App'x 700, 702 (9th Cir. 2011) (refusing to extend Nollan/Dolan where city required developer to construct several off-site public improvements but did not require dedication of developer‟s interest in real property), petition for cert. filed, 80 U.S.L.W. 3135 (U.S. Sept. 6, 2011) (No. 11-299).

Slip op. at 19 n.3. More details to follow after we've had a chance to make a deeper reading of the opinion, but the larger question remains: will this influence the Supreme Court when it is deciding whether to grant the West Linn petition? Stay tuned.

St Johns River Water Mgmt Dist v Koontz, No. SC09-713 (Nov. 3, 2011)

Yosemite Seminar Summary - Regulatory Takings: Looking Back And Looking Forward

"Yosemite," according to California Place Names, Erwin Gudde's seminal work on the origins of (surprise) California place names, means "they are killers." It was "[e]vidently a name given to the Indians of the valley by those outside it."

I raise this historical tidbit because I must admit to feeling a little like "those outside it" when I was invited to speak about regulatory takings at the California State Bar's Environmental Law Conference at Yosemite. I figured as a conference devoted to environmental law, it was a going to be a decidedly skeptical audience, given my advocacy for property owners and property rights. I accepted the invitation nonetheless, heartened that this conference wasn't going to be an echo chamber and that they were at least open to hearing competing ideas.

It turns out that my prediction about "they are killers" was not accurate -- the audience, while not exactly sympathetic to my viewpoints, was was certainly open and friendly and welcoming while I spoke about "Regulatory Takings: Looking Back and Looking Forward" with U.C. Berkeley law professor Joseph Sax and Deputy California Attorney General Daniel L. Siegel. We focused on seminal regulatory takings cases from the recent past, and each made predictions of what might be next. "The panelists, who have been involved in several of the most significant takings cases since even before the founding of the annual Yosemite Environmental Law Conference twenty years ago, will highlight key decisions, offer their views on the evolution of takings law, and discuss cutting-edge issues raised by more recent court decisions."

Sidebar: if you were not able to attend, the audio recording is now available for purchase for a very modest price ($34 gets you the two CD set and the written materials, and includes the 1.5 hours of MCLE credit) from Versa Tape. Go here to order (if that link does not work, go here and enter "11ELC-15AB" in the search box). I've posted some short sound bytes of each presentation to give you a flavor of the session.

To start us off, Clem Shute provided us with a quick history of regulatory takings law over the last 40-plus years since Penn Central. He also moderated the panel discussion. Listen to his introduction here:

I was up next. I focused on five takings issues that I predict will be important to watch: (1) the definition of "property" (including the judicial takings question); (2) how courts define "regulatory taking," and whether those cases holding that a government action is not a taking simply because the government is not purporting to exercise its eminent domain power will survive close scrutiny; (3) the growing body of state court decisions on takings under state constitutions; (4) what to do with the Penn Central three-part standard now that the Court has reaffirmed is as the default test; and (5) will the Court abandon or modify the Williamson County ripeness test, as four Justices suggested in the San Remo Hotel case?

What it looked like from where I sat.

I also mentioned one "non takings" issue that is worth watching: whether substantive due process will become more important now that the Supreme Court has removed the "substantially advance" test from takings analysis, and moved it over to due process (more detail on this issue here). In this area, Justice Kennedy is the one to watch, as his concurring opinions in Kelo and Lingle both telegraph his notion that on questions of the legitimacy of government actions that impact property, the due process clause is more critical than the takings clause. Links to all of the cases I discussed and that are referenced in my written materials are posted here.

Next, Dan Siegel noted the sharp decline in the number of regulatory takings/inverse condemnation cases heard by the Supreme Court since the mid-1980's.

Dan Siegel (Deputy California Attorney General)

Dan also noted areas he believes are still unresolved: (1) whether the nexus and rough proportionality standards of Nollan and Dolan are limited to exactions of real property, an issue the subject of a pending cert petititon; (2) whether water use restrictions are analyzed as physical or regulatory takings (see the Casitas decision from the Federal Circuit for an example of a court treating it as a physical take); (3) Williamson County's future; (4) is there such a thing as a "judicial taking;" and (5) the parcel-as-a-whole question. On whether these issues are open, I agree wholeheartedly with Dan; our differences are on how the Court should resolve them.

Professor Sax ended the session by providing his scholarly view. He rightly suggested that the law of regulatory takings has largely escaped clear doctrinal development. Thus, it appears that decisions in which the Court has found a taking are driven more by the apparent unfairness of the situation than by the application of clear or consistent rules. See, e.g., the government's repeated rejections of development proposals while informing the property owner that it might approve its application if only it returned with a more modest proposal in the Del Monte Dunes case.

Professor Joseph Sax sums it all up.

Professor Sax concluded that the Court will be reluctant in the next few years to take up cases in order to articulate "large general principles or major doctrinal theories of property," but that if a situation appears to involve "serious over-reaching by regulators (especially land use regulators)," the Court will step in. He also agreed with Dan and I that the judicial takings issue is an open question, as are issues involving the boundary between public and private property at the shoreline. Of course, this being Professor Sax, the public trust issue and the question of what are "background principles" of state property law were never far from our minds.

In sum, it was an enjoyable and informative session (as was the remainder of the presentations at the Conference).I appreciate the invitation to speak, as well as the warm welcome I received.

The written materials were not distributed on paper, but
on a USB drive. With a faux wood casing, no less. Very green.
There was a lot of quality swag at the conference: backpacks,
water bottles, flashlights, and more post-its and pens
than you could possibly take.

This photo has nothing to do with the conference, except that we
passed by this sign on the drive out of the mountains via the National
Park. Call it "bad marketing," since I am not going anywhere near
any body of water labeled "Mosquito Creek."

New Cert Petition: Are Nollan And Dolan Limited To Exactions Of Land?

Here's the latest in the lengthy West Linn Corporate Park tale from Oregon. After having bounced from federal court, to the Oregon state courts, then back to federal court, the case is now in the hands of the U.S. Supreme Court.

The issue in the case is whether the Ninth Circuit was correct when it held in an unpublished memorandum opinion that "[t]he Supreme Court has not extended Nollan and Dolan beyond situations in which the government requires a dedication of private real property. See Lingle v. Chevron USA, Inc., 844 U.S. 528, 547 (2005). We decline to do so here." Slip op. at 4-5.

Weak, Ninth Circuit, weak. Is the issue of whether Nollan and Dolan's nexus and rough proportionality requirements apply only to exactions of land -- but do not govern exactions of other types of property such as money -- so settled that you blow it off with a one-liner in an unpublished decision? We think not, since this issue was hardly settled by Lingle, and has been bouncing around in the lower courts for quite a while, several of which, including courts that are not exactly property owner-friendly such as California's Supreme Court (does Ehrlich v City of Culver City, 911 P.2d 429 (Cal. 1996) ring a bell?), have decided that the law is exactly opposite.

And what does page 547 of the Lingle opinion, the case cited by the Ninth Circuit in support of its conclusion, say? Well, it does not limit the nexus and proportionality rationales to exactions of land as concluded by the opinion, but rather addressed the question of whether either Nollan or Dolan supported the "substantially advance" rationale from Agins. The Court concluded they did not, and removed any doubt that the substantially advance test was one of under takings law. Yes, Nollan and Dolan involved exactions of land, but Lingle sure didn't hold that the exaction requirements only applied to those type of cases.

The unpublished opinion format appears to us to be a feeble attempt by the Ninth Circuit panel to make the case as uninviting as possible to the Supreme Court's cert pool clerk. But despite the effort to minimize the import of the opinion, it has resulted in a cert petition. Which in our humble opinion has a good shot of a grant, since the Ninth Circuit's opinion directly conflicts with both Ehrlich and the Texas Supreme Court's opinion in City of Flower Mound v. Stafford Est. Ltd. P'ships, 135 S.W.3d 620 (Tex. 2004), both of which held that the nexus and proportionality requirements apply to an attempt to exact property other than real property (in those cases, fees and the requirement that a property owner rebuild a public road). Here's the Question Presented:

Local governments frequently require property owners to dedicate private property to public use as a condition for governmental approval of discretionary property development permits. In Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994), this Court held that such adjudicative property exactions violate the Fifth Amendment to the United States Constitution as uncompensated takings unless an "essential nexus" exists between the property exaction and a legitimate state interest, and the property exaction is "roughly proportional" to the projected impact of the development. In this case, a local governmental entity required petitioner to construct and dedicate numerous off-site physical improvements on public property as a condition for governmental approval of discretionary permits to develop petitioner’s property notwithstanding the absence of proportionality between the property exacted and the projected impact of the development. The two questions presented are:

1. Do the "essential nexus" and "rough proportionality" requirements of Nollan and Dolan apply equally to exactions of personal property as they do to exactions of real property?

2. Did the court below misconstrue this Court’s decision in Lingle v. Chevron USA Inc., 544 U.S. 528 (2005), when it refused to apply the protection of the Fifth Amendment to an exaction of personal property?

Amici have filed briefs supporting the petition, and we will post those and the BIO shortly.

The Court's docket entry is here.

Petition for a Writ of Certiorari, West Linn Corporate Park LLC v. City of West Linn (filed 9-6-2011)

Links From "Regulatory Takings: Looking Back And Looking Forward" (Cal. State Bar Yosemite Conference)

Here are the links to the cases and other items discussed today at the session Regulatory Takings - Looking Back and Looking Forward at the Cal State Bar's Environmental Law Section's Environmental Law Conference at Yosemite.

These cases are also in your written materials.

• 9th Circuit: California Raisins Were Not Taken (Horne v. U.S.D.A., No. 10-15270 (9th Cir. July 25, 2011))

• Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982).

• Kaiser Aetna v. United States, 444 U.S. 164 (1979).

• Yee v. City of Escondido, 503 U.S. 519 (1992).

• Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992).

• Stop the Beach Renourishment, Inc. v. Fla. Dep’t of Envtl. Prot., 130 S. Ct. 2592 (2010).

• Vandevere v. Lloyd, No. 09-35957 (9th Cir. July 11, 2011).

• Vanek v. State, 193 P.3d 283, 286 (Alaska 2008).

• Brown v. Howard, 2011 WL 2535555, at *1 (S.C. June 21, 2011).

• South Carolina Bar's amicus brief in Brown.

• Johnson v. Manitowoc County, No. 10-2409 (Mar. 19, 2011).

• Amerisource Corp. v. United States, 525 F.3d 1139 (Fed. Cir. 2008).

• Bala v. North Dakota, No. 20090312 (Sup. Ct. N.D. Aug. 23, 2010).

• Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (2005).

• Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985).

• Kelo v. City of New London, 545 U.S. 469 (2005).

• DeCook v. Rochester Int’l Airport Joint Zoning Bd., No. A09-96 (Sup. Ct. Minn. Mar. 30, 2011).

• McCarthy v. City of Cleveland, No. 09-4149 (6th Cir. Nov. 9, 2010).

• Chicago v. Int’l College of Surgeons, 522 U.S. 156, 15 (1997).

• Dunlap v. City of Nooksack, No. 63747-9-9 (Oct. 25, 2010).

• Penn Central Trans. Co. v. New York City, 438 U.S. 104 (1978).

• Guggenheim v. City of Goleta, No. 06-56306 (9th Cir. Dec. 22, 2010) (en banc).

• Colony Cove Properties, LLC v. City of Carson, 640 F.3d 948 (9th Cir. 2011) (cert. denied Oct. 17, 2011).

• Downing/Salt Pond Partners v. Rhode Island, 643 F.3d 16 (1st Cir. 2011).

 

California Bar's Yosemite Conference: "Regulatory Takings: Looking Back and Looking Forward"

One conference down, one to go.

We're on the way back from the Brigham-Kanner Property Rights Conference in Beijing, and on our way to the California State Bar Environmental Law Section's annual conference at Yosemite N.P., which begins later this week. More information about the conference here.

Along with U.C. Berkeley law professor Joseph Sax and Deputy California Attorney General Daniel L. Siegel, I will be speaking about "Regulatory Takings: Looking Back and Looking Forward." E. Clement Shute will moderate the panel discussion.

We will be discussing the seminal regulatory takings cases from the past 20 years. "The panelists, who have been involved in several of the most significant takings cases since even before the founding of the annual Yosemite Environmental Law Conference twenty years ago, will highlight key decisions, offer their views on the evolution of takings law, and discuss cutting-edge issues raised by more recent court decisions." 

I'll be focusing on five areas and issues I think will be the touchpoints for regulatory takings law in the immediate future. What are those five areas? You'll have to attend to find out (or stay tuned here for a post-conference report).

Climate Change And Regulatory Takings In Coastal Hawaii

"There is strong consensus in the international scientific community that climate change is occurring and that greenhouse gas emissions from human activities contribute to climate change."

So begins Climate Change and Regulatory Takings in Coastal Hawaii, a monograph by Douglas Codiga, Dennis Hwang, and Chris Delaunay, published by the University of Hawaii Sea Grant College Program's Center for Island Climate Adaptation and Policy. 

We're not entering into the debate about whether global warming/climate change is or isn't happening. But the one certain thing is that every regulatory entity from the U.N. on down to your local neighborhood board believes it is real, and seems to want to do something about it. Thus, the question is how property owners may be affected by those actions, and what they can do in response. This report doesn't really resolve anything, but it does establish the framework and makes some recommenations. From the summary:

The Center for Island Climate Adaptation and Policy (“ICAP”) at the University of Hawai‘i Sea Grant College Program has prepared this paper to examine the interactions among climate change, the regulation of shoreline development in Hawai‘i, and Constitutional law regarding unpermitted takings of private property for public benefit. The use and development of coastal property in Hawai‘i is governed by a complex array of laws and regulations addressing a range of concerns, from protecting human health and safety from life-threatening natural hazards to preserving public access and scenic view planes. A critical aspect of the interaction between climate change and the law is the requirement under the U.S. and Hawai‘i Constitutions that the government compensate private property owners for unpermitted "takings" of their properties.

. . .

Hawai‘i’s current regulatory regimes related to climate change impacts in coastal areas may generally be expected to withstand anticipated takings claims. By focusing on hazard reduction and mitigation, government actions may be better insulated from takings challenges brought by owners and developers of coastal properties in Hawai‘i. Regulatory decisions rarely leave property completely valueless and therefore few regulatory decisions are likely to violate the Lucas "total loss" takings test. Enforcement of climate change-related regulations to prevent harm to public trust resources will likely withstand takings challenges if the court considers the resources to be part of Hawai‘i’s background principles of property law and nuisance.

The report notes that "existing property laws, however, may pose limits to regulation of coastal development of private property by government agencies seeking to address climate change impacts," and discusses the takings limitations on the power of the government to regulate freely. The report walks through the basic principles of regulatory takings law (the government cannot force "some people alone to bear public burdens which, in all fairness and justice, should be borned by the public as a whole"), and sets out the Lucas per se test, as well as the ad hoc Penn Central test for determining when regulation "goes too far" and requires compensation.

The report focuses on the Penn Central test (economic impact, character of the government action, interference with distinct investment backed expectations), and provides a rough roadmap for regulators on how to avoid takings claims (object on ripeness grounds, avoid categorical claims by asserting the regulations are part of "background principles" of nuisance law, argue the owner benefits from the regulations, assert the impacted property is only part of the landowner's holdings so she can afford the regulatory burden, argue that the regulations are designed to protect the public and that the owner purchased the property after the regulatory regime was imposed [so hurry up and regulate!], make public trust claims, and use PASH rights to overcome taking objections). This is nothing new of course, and is simply a summary of the current state of the law, which is stacked against property owners and in favor of regulators.

This section concludes:

Although no definitive conclusions about the potential viability of takings claims may be drawn absent the specific facts of a specific case, the following discussion suggests Hawai‘i’s current regulatory regimes related to climate change impacts in coastal areas may generally be expected to withstand anticipated takings claims.

Report at 9. Regulate away, in other words. The report then reviews specific situations and makes recommendations:

• "Use setbacks in a manner that leaves some economically viable use of the land."

• Regulate early in the process and back up regs with data to prevent owners from claiming that their significant investment-backed expectations are "reasonable" (note that the test vacillates between "reasonable investment-backed expectations" and "distinct investment-backed expectations;" whether that is a true distinction remains an open question).

• Emphasize the hazard mitigation aspects of regulation, rather than the environmental or aesthetic concerns.

• Deny subdivision of land early rather than wait for later in the process. Amend subdivision rules to add provisions requiring hazard assessment as a condition of subdivision approval. Include a variance process (barista's note: to avoid Lucas claims, and throw up a Williamson County barrier by adding a claim that the landowner whose subdivision is denied "should have sought a variance").

• Avoid takings claims by emphasizing the hazard mitigation aspect of shoreline setbacks, so even if a setback prohibits all use it might be deemed to be part of a "background principle."

• In cases of shoreline hardening cases, focus on public trust resources, emphasize that littoral landowners understand that their property boundaries are ambulatory, and (again) emphasize that the denial of a request for shoreline hardening is based on the need to mitigate hazards to the property and the entire beach.

• "Consistent with the paramount importance of hazard-based planning and regulating,
  however, flood hazards should be addressed at the siting rather than construction stage of development."

• Consider "rolling easements" and "managed retreat" regulations. 

None of the above should come as a huge surprise for anyone who follows this issue in Hawaii and elsewhere. In a report sponsored by the "Center for Island Climate Adaptation and Policy," we should not expect to see a primer on how to minimize regulation or how to compensate property owners, but a call for more regulation, guidelines for how to avoid takings claims, and little discussion of cases in which a regulatory regime was successfully challenged (see here and here, for examples). Nor is there a recognition that in some takings cases, the government's justification for the regulation is not relevant, and therefore a claim of "hazard mitigation" will not insulate the government from providing compensation.

Now don't get us wrong: we're not suggesting that global warming and sea level rise aren't legitimate issues, or are we calling for unbridled coastal development. But what seems to be missing from this report is an acknowledgement that it is important to consider the rights of private property owners when regulators are deciding how to address these issues, and not treat them merely as inconvenient speedbumps along the road to hazard mitigtion and an eventual depopulating of private shoreline property.

We'll be talking about these issues at the January 11, 2012 Hawaii Water Law Conference. We have two sessions devoted to climate change, hazard mitigation, and coastal zone issues. Two of our featured presenters are lawprof David Callies and Ed Thomas, both of whom are acknowledged in the above report.

Our thanks to Michael Cote (Association of Climate Change Officers) for the heads-up.

Eighth Circuit: No Physical Take For Fence Requirement

You have to like any sport that the New York Times describes as "like driving full speed through an endless loop of red lights. Luck often expires in a cloudburst of steam and scattered auto parts." That's how the Times described "figure 8 car racing."

But not everyone likes figure 8 racing or related activities, it seems. After a property owner stored several of his race cars on his land and annoyed some residents of Indianola, Iowa, the city adopted an ordinance requiring land on which figure 8 cars (and others) are stored to be enclosed by a fence if two or more cars are present. The property owner sued the city in state court alleging a regulatory taking and the city removed the case to federal court. After a bench trial, the district court held that the ordinance was not a taking.

In Iowa Assuarnce Corp. v. City of Indianola, No. 10-3815 (Aug. 16, 2011), the U.S. Court of Appeals for the Eighth Circuit affirmed. The court rejected the property owner's claim that the ordinance should be evaluated as a physical taking under the per se rule of Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982). The court held that the ordinance did not require the owner to install a fence, it only required the owner to install a fence if he wanted to store two race cars on his property. The court applied the same rationale as the recent Ninth Circuit decision in Horne v. U.S. Dep't of Agriculture, No. 10-15270 (July 25, 2011) (the raisin case), holding that because the owner is not required to use his property for car storage, the city's ordinance did not interfere with his right to exclude:

By its own terms, the ordinance does not require Watson to permit either the City or any third party to enter the property and install a fence. Consequently, the ordinance does not erode Watson's right to exclude others from the property, which is central to establishing a Loretto claim. Id. at 435 (noting that the New York law requiring landlords to allow cable providers to install equipment on their property curtailed landlords' right to exclude—"one of the most treasured strands in an owner's bundle of property rights"); see also Lingle, 544 U.S. at 539 (noting that a Loretto regulatory taking "eviscerates the owner's right to exclude others from entering and using her property—perhaps the most fundamental of all property interests"). Watson attempts to avoid this conclusion by arguing that he is compelled to permit a physical intrusion because he must install a fence in order to continue storing race cars on his property. However, Watson is not required to continue storing vehicles on his property, and so long as he still may choose whether to build the fence or forgo placing more than one vehicle outside, he cannot establish the required compliance necessary for a Loretto claim. See Yee v. City of Escondido, 503 U.S. 519, 527 (1992).

Slip op. at 6-7. (In Horne, the Ninth Circuit concluded that a federal regulation that required raisin handlers to set aside a certain percentage of their crop was not a Loretto-style physical taking because nothing required them to market their raisins.)

Latest In Big Island Takings And Vested Rights Challenge To LUC Reclassification

Here's the latest in a case we've been following. In Bridge Aina Lea, LLC v. State of Hawaii Land Use Comm'n, the plaintiff filed its complaint in state circuit court alleging that the LUC violated state and federal law (due process, takings, vested rights, and more) when it reclassified "urban" land on the Big Island to "agriculture." 

The defendants then removed the case to federal court, and have now filed a motion to dismiss that contains a host of defenses: immunity, the unavailability of prospective injunctive relief, whether certain defendants are "persons" under 42 U.S.C. § 1983, abstention on the federal takings claim, the lack of a state damage remedy for deprivation of constitutional rights, and zoning estoppel, among others.

Just the thing to give you flashbacks to your Federal Courts class.

Update: here's the errata filed just after the motion to dismiss.

Motion to Dismiss, Bridge at Aina Lea, LLC v. State of Hawaii Land Use Comm'n, No. 11-00414 ACK (July 27, 2...