inversecondemnation.com

Land Use Round Up

• Professor Ilya Somin posts "Once Blighted, Always Blighted" about how long-lasting "blight" designations are more likely to impede development, not encourage it."

• Charley Foster at Planet Kauai posts "Monkeypod preliminary injunction motion," his analysis of a pending motion for preliminary injunction, seeking to prevent a property owner from removing trees on its property.

• In  Noghrey v. Town of Brookhaven, No. 2006-05365 (Feb. 13, 2008), the New York Supreme Court Appellate Division held that the downzoning of property was not a regulatory taking under Penn Central.  New York Zoning and Municipal Blog posts on the case here, and Professor Patty Salkin summarizes the opinion on Law of the Land here.

• An Indiana trial court has held that a public utility cannot use eminent domain to take property because it acted in bad faith.  As reported here by the Louisville, Kentucky Courier-Journal:

Wymberly's attempt to use eminent domain was "in bad faith" because it had promised, in asking the state for a territory expansion to include the Lynn developments, that it would serve "as many customers as possible." But Whitis said its plan was to serve a "single customer, Lynn," and the proposed route would allow only two or three other property owners besides Lynn to connect.

The court's Findings of Fact and Conclusions of Law can be downloaded here (6mb pdf).

• An additional hat tip to Professor Salkin for posting a summary of the New Mexico Supreme Court's opinion in Albuquerque Commons Partnership v. City Council, No. 29792 (Feb. 18, 2008), a case about big box rezoning and moratoriums, among other things.

Nevada SCT: Upon Further Review, It's a Per Se Regulatory Taking

Thanks to Patty Salkin's Law of the Land blog for summarizing the recent Supreme Court of Nevada opinion in Hsu v. County of Clark, No. 46461 (Dec. 27, 2007).  Read Professor Salkin's summary or the opinion itself for the complete details, but these are the facts in a nutshell:

The county enacted building height restrictions on property around the Las Vegas airport.  A property owners within the zone brought an inverse condemnation action, asserting the height restriction imposed a physical occupation of their airspace, and that the ordinance was a per se regulatory taking.  In an unpublished order, the Nevada Supreme Court held that a per se taking did not occur, and that the applicable analysis was under the Penn Central test [Penn Central Trans. Co. v. City of New York, 438 U.S. 104 (1978)].  On remand, the trial court dismissed, and the property owner again appealed.

During the pendency of the second appeal, the Nevada Supreme Court published an opinion in a similar case, McCarran Int'l Airport v. Sisolak, 137 P.3d 1110 (Nev. 2006), which held that airport height restrictions were a physical invasion and thus a per se (not Penn Central) taking.  The issue presented in Hsu was whether the earlier unpublished Nevada Supreme Court controlled as "law of the case," or whether the subsequent Sisolak rule would control.

The court determined that the usual rule of law of the case must under some circumstances yield to equitable principles.  Generally speaking, when an appellate court states a rule of law applicable to a case, that rule may not be revisited as the litigation progresses.  This doctrine is related to the doctrines of stare decisis (as applied, for example, by the U.S. Supreme Court in John R. Sand & Gravel v. United States, No. 06-1164 (Jan. 8, 2008)), and issue and claim preclusion, which prevent relitigation of issues and cases in the interest of finality and judicial economy.

However, the doctrine of law of the case is merely a prudential rule, not jurisdictional, and a court may refuse to apply it if the rule in the case is "clearly erroneous" or would "work a manifest injustice."  Slip op. at 7.  The court held that the law of the case doctrine will not apply when the applicable law changes during the pendency of a case.  The court noted that Sisolak determined that an ordinance that imposes a height restriction to allow aircraft to fly through a landowner's airspace was a per se regulatory taking of private airspece, and that determination should apply to Hsu.

This case presents an interesting contrast to the recent decision in John R. Sand & Gravel, where the U.S. Supreme Court held that decisions going back to the 1880's would not be revisited under the doctrine of stare decisis.

Regulatory Takings Claims in Federal Court?

A federal regulatory takings claim being litigated in the first instance in federal court?  Why, that's as rare as hen's teeth.

Here's the deal: under Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985), a federal regulatory takings claim is not ripe until the property owners has first pursued compensation through available state procedures.  In other words, property owner, go first to state court.  But under City of Chicago v. Int'l College of Surgeons, 522 U.S. 156 (1997), the same rules don't apply to the government, since it can choose to remove a state court takings claim to federal court, and have the property owner's federal claims heard initially in federal court.  So in those rare circumstances when a local government wants to buck conventional wisdom and litigate a takings claim in federal court, it has the choice of forum.

For one recent example of this see the Northern District of California case Yamagiwa v. City of Half Moon Bay, No. 05-4149 VRW (Nov. 28, 2007).  In that case, not only did the city remove the case to federal court, it had the audacity to ask the court after a weeks-long trial which it lost, to dismiss the case since it should have been brought in state court.  The court was having none of that, and rightly rejected the move, stating that it "smacks of bad faith."

Perhaps removal of federal takings claims to federal court by local government is becoming a trend.  A recent case filed in Hawaii state court that alleges among other things, a federal regulatory takings claim, was recently removed to federal court by the defendant county.  The state court complaint in that case is here, and the Notice of Removal is here.  At least there shouldn't be any Williamson County ripeness issues.

Podcast on $37m Federal Inverse Condemnation Judgment

In anticipation of the upcoming eminent domain conferences, ALI-ABA has posted a (free!) short podcast by Michael Berger about the recent $37 million inverse condemnation judgment against a northern California for causing the plaintiff's land to become undevelopable wetlands (Yamagiwa v. City of Half Moon Bay, No. 05-4149 VRW (Nov. 28, 2007)).  See you at the conference (Jan 3-5, 2008).

Eminent Domain Seminars - January 2008

From January 3 - 5, 2008, ALI-ABA is putting on its annual program of eminent domain seminars, this time in San Francisco, California.  Two programs are being offered: "Condemnation 101: Fundamentals of Condemnation Law and Land Valuation" for those who want a course on the basics, and "Eminent Domain and Land Valuation Litigation," for those who have some experience in this area of law.  The links above have agenda and faculty details, as well as registration information.  If you register by December 17, 2007 (midnight) using the code "DEC200730," you will get 30% off of these or any other ALI-ABA course or materials.  Great deal.

These seminars are perhaps the best of their kind offered.  The faculty is great, and the agendas look like they will be their usual high quality.  I'm attending the advanced course.  If you register, be sure to let me know and we can meet up.

What's the Difference Between "Inverse Condemnation" and a "Regulatory Taking?"

There's an interesting discussion going on over at The Volokh Conspiracy about the recent $37 million inverse condemnation/regulatory takings federal judgment against the City of Half Moon Bay, California.  I wrote about the decision here and here. 

The comments to Professor Somin's post are particularly thought-provoking, especially the ones dealing with whether the decision is an "inverse condemnation" case or a "regulatory takings" case.  On one hand, government causing flooding on private property is a classic inverse condemnation situation; the intrusion of water onto private property is the equivalent of the government taking a flowage easement, so it is required to pay fair value for it.  That's what happened in the Half Moon Bay case.  On the other hand, the "wipeout" of economically beneficial uses and a "physical invasion" are two per se categories of regulatory takings, both of which also occurred in the case. 

So the case is somewhat of a hybrid, although the difference is mostly academic and is really a question of doctrinal neatness, not something that requires a different analysis or result.  I'm going to come down on the side of "inverse condemnation," since the flooding was not the result of government regulation, and because the remedy sought was just compensation.  It just seems like more of an inverse condemnation case than a classic regulatory takings case.

In those regulatory takings cases involving physical invasions, the property owners challenged a regulation or government actions that would have allowed physical trespass.  See, e.g., Kaiser Aetna v. United States, 444 U.S. 164 (1979) (federal agency informed property owner that it could not exclude the public from a navigable marina); Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) (local ordinance required property owners to allow installation of cable TV boxes on their buildings); Nollan v. California Coastal Comm'n, 483 U.S. 825 (1987) (agency required landowner to dedicate public easement as a condition of development approvals). 

In those cases, the property owners did not seek just compensation, only invalidation of the unconstitutional regulation.  In the Half Moon Bay case, the property owner did not challenge the "wetlands" regulations that wiped out the value of the property, but sought just compensation since the government had de facto taken her land. 

In Ripeness Doctrine, What's Good For the Goose is Not Necessarily Good for the Gander

Two updates on Yamagiwa v. City of Half Moon Bay, No. 05-4149 VRW (Nov. 28, 2007), the $37 million inverse condemnation judgment about which I posted here.  In that case, the US District Court for the Northern District of California held the city liable for a taking after it caused the plaintiff's property to flood, which rendered it an undevelopable "wetland."  You flood it, you bought it.

First, Gideon Kanner posts his latest comments on the ripeness argument made by the city, and a recent write up of the case in the LA lawyer's daily paper, the Los Angeles Daily Journal. 
Professor Kanner writes about the city's post-trial argument that the case belonged in state court under the Williamson County ripeness doctrine (federal takings claims must be brought first in state courts).  As I mentioned, the case was originally brought by the plaintiff in state court, but was removed to the federal court by the city.  Kanner writes:

As far as we know the city never said “Oops,” or “Sorry about that,” or offered to reimburse the court and parties for the wasted time, effort and expenses it inflicted on them. By our lights Chief Judge Walker is a living saint for not sanctioning these guys. If it had been us — God forbid! – we’d have given serious consideration to reviving the medieval judicial custom of ordering that the miscreants’ hands be chopped off and nailed to the court house door as a warning to others. But what do we know?

More of Professor Kanner's thoughts here.

Second, Aaron Kinney writes up (with photo! and a reference to inversecondemnation.com!) at InsideBayArea.com, "Vaughn Walker, Half Moon Bay and a woodshed.  In addition to providing more information about the case and what led up to the litigation, he picked up on the city's unsuccessful ripeness argument:

The other item worth mentioning was how the city, after arguments were made this summer, requested to have the case taken back to state court.

Walker took exception to the gambit. Basically, if the Insider understands it correctly, the plaintiff, Joyce Yamagiwa (trustee of the property for Keenan), filed for damages in both state and federal court. The city then requested that the case be heard in federal court, because it had jurisdiction.

But after the case was heard, the city changed its tune, argued the feds didn’t have jurisdiction and asked for the case to be taken back down to state court. Two legal bloggers have more informed takes on the matter here and here.

The bottom line? To Walker, the city was taken by surprise by the strength of Yamagiwa’s case, realized it was in trouble, and tried to get a do-over in another court. Walker dismissed the city’s motion on legal grounds and noted that retrying the case would waste millions of dollars in past and future legal expenses.

Also, here is Mr. Kinney's San Mateo Times article on the decision.

Law That Requires Sex Offender Move From Home is a Regulatory Taking

Thanks to both Patty Salkin's Law of the Land blog and Gideon Kanner's Gideon's Trumpet, we've been alerted to a regulatory takings case from the Georgia Supreme Court that presents an unusual fact pattern.  In Mann v. Georgia Dep't of Corrections, No. S07A1043 (Nov. 21, 2007), the court struck down as an illegal taking a Georgia law that prohibited convicted sex offenders from living within 1,000 feet of a school or child care facility. 

Mann, an offender, was living legally in a home he owned, when a child care facility located within 1,000 feet.  The Department of Corrections ordered Mann to leave upon pain of arrest.  Professor Salkin summarizes the case here, and Professor Kanner adds his analysis here.  They both sum up the facts and holding of the case very thoroughly. 

The court noted that the effect of the Georgia statute was not simply to interfere with the owner's property rights, but to dispossess him of his home:

Unlike the situation in the typical regulatory takings case, the effect of OCGA § 42-1-15 is to mandate appellant's immediate physical removal from his Hibiscus Court residence. It is "functionally equivalent to the classic taking in which government directly . . . ousts the owner from his domain." Lingle, supra, 544 U.S. at 539. As long as the day care center remains in its current location, appellant cannot reside in his home until he is released from the registration requirement by a superior court, OCGA § 42-1-12 (g), which cannot occur until a minimum period of ten years has passed after his release from probation.

Slip op. at 8.  What was interesting about the decision was that the court utilized the "ad hoc" test for a regulatory taking from Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978).  The "Penn Central" test applies three factors:

The economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations are, of course, relevant considerations. See Goldblatt v. Hempstead, supra, at 594. So, too, is the character of the governmental action.

Id. at 124.  I don't think the court needed to use the ad hoc test to find a taking.  Because the regulation involved a physical invasion of Mann's property, this case should have been analyzed as a per se taking, and the court should have found a taking as a matter of law, regardless of the economic impact of the regulation on the owner, or his "distinct investment-backed expectations." 

The Georgia statute in effect invited anyone but Mann to occupy his house, and had the effect of evicting him.  On the scale of wrongs, this seems worse than the classic physical invasion cases such as Kaiser Aetna v. United States, 444 U.S. 164 (1979) (government invited public recreational boaters to enter a private lagoon) (a case litigated by my Damon Key colleagues Charlie Bocken and Diane Hastert, by the way), Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) (regulation required placement of cable TV box on rooftop), and Nollan v. California Coastal Commission, 483 U.S 825 (1987) (government demanded conveyance of a public easement across Nollan's land). 

A property owner's interest in physical possession of their property is so important, it does not matter how compelling the asserted governmental interest is.  When the government tells someone to "get out" of his property, it must provide just compensation.  When the regulation does not, the regulation is unconstitutional. 

Ninth Circuit: No Taking for Forced Attorney Low Bono* Labor

In Scheehle v. Justices of the Supreme Court of Arizona, No. 05-17063 (Nov. 15, 2007), the Ninth Circuit held that Arizona's "low bono" requirement that all attorneys serve as arbitrators for $75 per day, maximum two days, is not a taking.  It's probably safe to surmise that the plaintiff's position probably received little sympathy outside of certain members of the Bar:

Mark V. Scheehle, an Arizona tax lawyer, challenges as an unconstitutional taking the Arbitrator Appointment System of the Maricopa County Superior Court (“Appointment System”), which requires that an experienced attorney serve as an arbitrator for up to two days a year with minimal compensation.  Following a decision by the Arizona Supreme Court that the Appointment System was permissible under Arizona law, the district court reaffirmed its grant of defendants’ motion for summary judgment. We now affirm. We hold that Scheehle’s constitutional challenge to the Appointment System is properly considered under the regulatory takings test set forth in Penn Central Transportation Company v. City of New York, 438 U.S. 104 (1978), and applying that test, we conclude that the impact of the Appointment System on Scheehle does not amount to a taking for which Scheehle is entitled to compensation under the Fifth Amendment.

The plaintiff claimed that the government took his property (the difference between his usual hourly fee and the $75 per day stipend he received under the arbitration program, and his unreimbursed out-of-pocket expenses), and transferred it to another private party, without compensation.

I haven't had a chance to fully digest the opinion yet, so in the meantime, go here for the thoughts of University of San Diego Law School Professor Shaun Martin at his California Appellate Report, and here for a summary and links from the California Blog of Appeal.

Oral argument recording here (4mb wma).

[*I wish I could take credit for the "low bono" label, but it's not mine -- a fellow Honolulu lawyer used the term to describe those less-than-the-usual-fee cases that we sometimes undertake as a public service.]

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Carl Christensen asked a thoughtful and interesting question in a comment, so I am transferring venue here:

The Ninth Circuit’s decision relies heavily on Powell v. State of Alabama, 287 U.S. 45 (1932), United States v. Dillon, 346 F.2d 633 (9th Cir. 1965), and United States v. 30.64 Acres of Land, 795 F.2d 796 (9th Cir. 1986), to support its conclusion that attorneys may properly be required to provide pro bono representation. In all three of these cases, however, the courts were requiring attorneys to provide pro bono services to indigent litigants. The Arizona rule has no such limitation, however, and since Arizona requires arbitration in cases where the amount in controversy may be any amount up to $65,000, it would be logical to assume that a significant number of the litigants in cases subject to arbitration will not be indigent. If licensed attorneys must provide pro bono services to litigants who are not indigent, the economic effect of the rule would be to require them to subsidize private non-indigent litigants who would likely be quite capable of employing arbitrators at commercial rates (and indeed may well already be employing private attorneys who are being paid at their normal hourly rates). If Mr. Scheehle’s objection had been limited to any requirement that he provide pro bono services to non-indigent litigants, could he have argued that the court rule, as so applied, violated the Takings Clause because it provides only a purely private benefit?

There may well be a good argument that if the government's goal was to provide arbitration services to those who cannot otherwise afford them (like the pro bono programs established by many bar associations), that requiring the lawyer-plaintiff to donate his services to people who can afford them for less than full compensation does not advance that interest very well.  The indigent deserves Mr. Scheehle's reduced-fee services more than Bill Gates, for sure.  But after Lingle v. Chevron, U.S.A., Inc., 544 U.S. 528 (2005), I don't see this as a Takings Clause argument. 

In examining the question of whether the regulation improperly transferred too much of Scheehle's property to undeserving parties, a court would likely approach it as a Due Process question.  After Lingle, absent an attempt by the government to affirmatively take private property by eminent domain, the question of whether government's actions serve legitimate public goals, or will effectuate a legitimate public purpose is treated under the Due Process Clause, although Kelo and Lingle blurred the line separating public use challenges and substantive due process challenges.  Same test different label, perhaps.  If property owners are challenging the regulation as illegitimate and seek to invalidate it, they proceed under Lingle and due process; but if it's compensation they seek, the touchstones are the regulatory takings doctrine (the per se categories, or as in Scheehle, the Penn Central test).