inversecondemnation.com

Land Use Round Up

Some interesting items, worth reading:

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

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

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

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

Slip op. at 13. 

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

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

The Euclidization of Public Use - A Dose of Reality For the Kelo Majority

In Kelo v. City of New London, 545 U.S. 469 (2005), the majority opinion authored by Justice Stevens, framed the issue presented in terms of the validity of "the development plan," and not whether the particular takings at issue were "for public use."

The disposition of this case therefore turns on the question whether the City's development plan serves a "public purpose."

Relying upon Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926), the case which upheld a municipality's power to zone provided it is exercised in the context of a "comprehensive plan," the Kelo majority upheld the New London taking because it was supposedly the product of a well-considered plan of "comprehensive character."

The City has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community, including--but by no means limited to--new jobs and increased tax revenue. As with other exercises in urban planning and development, the City is endeavoring to coordinate a variety of commercial, residential, and recreational uses of land, with the hope that they will form a whole greater than the sum of its parts. To effectuate this plan, the City has invoked a state statute that specifically authorizes the use of eminent domain to promote economic development. Given the comprehensive character of the plan, the thorough deliberation that preceded its adoption, and the limited scope of our review, it is appropriate for us, as it was in Berman, to resolve the challenges of the individual owners, not on a piecemeal basis, but rather in light of the entire plan. Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement of the Fifth Amendment.

Failing to see the differences between comprehensive planning (looking at land uses as a whole, rather than spot-zoning) and "comprehensive eminent domain" (I guess the more the government plans to take, the more deference its plan is due?), the Court seems to have a rather romantic vision of economic development and urban renewal plans. 

To inject a dose of reality, take read of a story entitled Urban renewal project in L.A. begets blight instead, the L.A. Times tells the tale of urban renewal gone wrong,

It was supposed to have been a model of urban renewal -- a mix of housing and classy stores to replace a decaying 20-acre shopping center at the foot of the affluent Baldwin Hills.

Instead, more than a year after the project was to be completed, Santa Barbara Plaza is a collection of dead or dying businesses surrounding a vast parking lot with weeds pushing through large cracks. Most of the housing was never built; none of the retailers ever came. The largely middle-class, African American area is stuck with a mostly deserted commercial slum.

Los Angeles leaders gambled on a check-bouncing, politically connected developer to shepherd the project. And after $15 million in government subsidies and more than $30 million in private investment, taxpayers -- and the community -- have lost.

Complete story here.  In somewhat the same vein as the L.A. Times story, read this op-ed from Professors David Beito and Ilya Somin, on how eminent domain has an "outsized impact on the constitutional rights of minorities."

I wish I could say that the Santa Barbara Plaza story was atypical, but it isn't.

Book Review: Bulldozed - "Kelo," Eminent Domain, and the American Lust for Land

"If you can fight blight, why not create beauty?  If not beauty, why not bounty?"

With that phrase, author Carla T. Main, in Bulldozed: "Kelo," Eminent Domain, and the American Lust for Land, accurately and succinctly sums up the devolution of the Supreme Court's view of the role of judicial review in eminent domain from Berman, to Midkiff, to Kelo.

Bulldozed is accessible to both lawyers and non-lawyers, and is no dull scholarly summation of the current state of Public Use Clause law.  Rather, it places the issues in an understandable context by framing the legal details with the story of the Gore family of Freeport, Texas, and their straight-out-of-Forrest Gump shrimp processing business.  The taking of the Gore's property and business for Freeport's "economic development" resulted in the case Western Seafood Co. v. United States, No. 04-41196 (5th Cir. Oct. 11, 2006) (a case I blogged about here). Main provides more details and background than the court's dry recitation of the facts ever could, and in between recounting the Gore family's story, provides the reader with an understanding of how we ended up with a case like Kelo, a decision that seemed to baffle a majority of the public. 

Main begins at the birth of the Fifth Amendment and James Madison's concern that private property rights would not be respected by the newly formed United States, and tells the stories behind many of the seminal cases on eminent domain:

• West River Bridge Co. v. Dix, 47 U.S. 507 (1848), Daniel Webster's case in which the Court held that the Contracts Clause was no impediment to a state condemning an exclusive bridge franchise. 

• Berman v. Parker, 348 U.S. 26 (1954), the case in which the U.S. Supreme Court first equated the condemnation power with the police power, and held, in sweeping language by Justice Douglas, that "public use" under the Fifth Amendment includes takings for 

• Poletown Neighborhood Council v. City of Detroit, 304 N.W.2d 455 (Mich. 1981), overruled, County of Wayne v. Hathcock, 684 N.W.2d 765 (Mich. 2004), the case which opened the door to economic development takings, where an entire neighborhood was cleared to make way for a General Motors plant, based only on Detroit's hope that what was good for GM was good for Detroit.

The only case really missing from the lineup is Hawaii Housing Auth. v. Midkiff, 467 U.S. 229 (1984), the opinion authored by Justice O'Connor that set up her dramatic turnabout in her dissenting opinion in Kelo.  Midkiff is a fascinating story and could be the subject of another book, so on the whole, it's a minor omission from Bulldozed.

Main also details how beginning in 2001, the courts began to take public use objections seriously, especially in the context of economic development takings, where one person's private property is transferred to another because the new owner promises to make more intense use of it.  This awakening by the courts culminates in the Supreme Court litigation in Kelo v. City of New London, 545 U.S. 469 (2005).

Of course, given the title of the book, an entire chapter is devoted to the arguments in Kelo, the case which brought eminent domain squarely to the American public's consciousness.  The Kelo backlash is the subject of another entire chapter.  These sections are among the more enjoyable and accessible in the book.  They detail the high drama of legal cases that make their way to the Supreme Court, and highlight the depth of emotion and passion aroused when people's homes, businesses, and neighborhoods are threatened.

Anyone who may wonder why property owners fight the taking of their property and businesses, despite the often overwhelming array of government power leveled at them need to read Bulldozed.  Bulldozed is available from Amazon.

Condemnation Blight and Clouding Use

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

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

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

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

The issues in the case include:

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

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

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

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

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

Cases and Links From Today's Seminar

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

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

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

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

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

From the afternoon session on Appealing an Administrative Zoning Decision:

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

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

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

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

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

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

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

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

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

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

The Questions Presented by the Goldstein petition:

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

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

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

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

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

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

Epstein on the Didden Case

In Forbes, law prof Richard Epstein writes "The Taking of Port Chester" about the Didden v. Village of Port Chester case.  The facts of Didden are particularly egregious -- in return for a private developer's promise to withhold an exercise of eminent domain, a landowner was offered a choice: give the developer $800,000, or a one-half interest in the owner's planned use of the property.  The owner had plans to put in a CVS Pharmacy, but the developer convinced the Village that his plan to put in a Walgreen's was better, and the Village agreed to use eminent domain to stop Mr. Didden.  Professor Epstein writes:

It takes no financial wizardry to see that the expenses on both sides of this high-priced battle are a social waste if all they do is replace a CVS pharmacy with a Walgreens. The Port Chester saga reveals the institutional flaw of modern takings law. Undue judicial deference creates large amounts of government discretion that in turn invites self-interested actors to game the system.

Complete article here.

Epstein Blogs His New Takings Book

In a post at PrawfsBlawg, "Takings, a Second Time," University of Chicago Law Professor Richard Epstein discusses his new book Supreme Neglect: How to Revive the Constitutional Protection for Private Property, a follow-up to Takings: Private Property and the Power of Eminent Domain (1985):

There is a sneaky character of great constitutional provisions. The shorter they are, and the more common their language, the more difficult the task of their interpretation. Private property, for example, is not just a two-word phrase, but it represents an entire world view, which necessarily needs to be distilled from sources external to the text. Takings, public use and just compensation are also terms that come easily off the tongue, but are hard to explicate in any coherent fashion. In the next few blog posts I shall work through some of the key arguments on these issues. But for the moment, I will just note that I am quite proud that my own views leave me outside the mainstream of both the political left and right.

Read the full post and comments here.  Related video from the Cato Institute here.

Missouri Supreme Court: Both Large and Small Cities May Use Eminent Domain for Redevelopment

Disappointing news out of the Missouri Supreme Court.  In City of Arnold v. Tourkakis, No. SC88647 (Mar. 18, 2008), the court held that both chartered and non-chartered Missouri cities have the power to use eminent domain to take property for "redevelopment."  The issue in the case was whether Article VI, section 21 of the Missouri Constitution allowed only larger "chartered" cities to use the power.  Background on the case here, and a summary of the issues by the Castle Coalition here.

The court's 6-1 decision is posted here.