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On Judicial Takings, And The Hawaii Water Rights Backstory In Stop The Beach Renourishment

The U.S. Supreme Court last week agreed to review the Florida Supreme Court's decision in Walton County v. Stop the Beach Renourishment, Inc., 998 So.2d 1102 (Fla. Sep. 29, 2008), which held that a state statute prohibiting "beach renourishment" without a permit did not effect a taking of littoral (beachfront) property, even though it altered the long-standing rights of the owners to accretion on their land and direct access to the ocean. See Stop the Beachfront Renourishment, Inc. v. Florida Dep't of Environmental Protection, No. 08-11 (cert. granted. June 15, 2009). More background on the case at our resource page.

The Court accepted three questions for review, and the cert petition relied on two rather notorious cases with Hawaii origins to support the conclusion that a decision by a state court which unexpectedly changes established state common law rules of property is a compensable taking. See Pet. at 31-32 (citing Robinson v. Ariyoshi, 753 F.2d 1468 (9th Cir. 1985); Sotomura v. County of Hawaii, 460 F. Supp. 473 (D. Haw. 1978)).  The first Question Presented accepted for review is:

The Florida Supreme Court invoked "nonexistent rules of state substantive law" to reverse 100 years of uniform holdings that littoral rights are constitutionally protected. In doing so, did the Florida Court's decision cause a "judicial taking" proscribed by the Fifth and Fourteenth Amendments to the United States Constitution?

In this post, we explore the background to the esoteric issue of "judicial takings" presented by the two Hawaii cases.

Robinson v. Ariyoshi — The Never Ending (Water Rights) Story

The Robinson litigation is one that holds a special place in our hearts, as it is a tale interwoven with the recent history of Hawaii, taking us from the time before jet travel when sugar and pineapple -- not tourism -- were the economic engines driving politics and the economy of the Territory of Hawaii, through the salad days of the openly activist Hawaii Supreme Court under the leadership of Chief Justice William S. Richardson, and finally sputtering out (sort of) after the U.S. Supreme Court's ripeness ruling in Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985).

Here's the short summary, repeated from memory (the litigation, which is still pending, has been going on for 50 years now, so please forgive us if a few of the details are off). The case started out in 1959 in a Kauai county trial court as a dispute between several sugar plantations over which of them possessed the rights to surplus water in a Kauai stream, among other things. Nine years later, the trial court issued a 65-page decision based on long-standing Kingdom, Territory, and State water law, and declared who owned what. So far, it was just another in a long line of water disputes between private parties. The losing parties took the case to the Hawaii Supreme Court (in those days, there was no Intermediate Court of Appeals and all appeals by right went directly to the Supreme Court), where no party, including the State, argued that the controlling water law was anything but as established by long-standing Hawaii cases.

The Hawaii Supreme Court, however, "sua sponte overruled all territorial cases to the contrary and adopted the English common law doctrine of riparian rights." Robinson, 753 F.2d at 1470 (citing McBryde Sugar Co. v. Robinson, 54 Haw. 174, 504 P.2d 1330 (1973)). The court "also held sua sponte that there was no such legal category as 'normal daily surplus water' and declared that the state, as sovereign, owned and had the exclusive right to control the flow," and "that because the flow of the Hanapepe [stream] was the sovereign property of the State of Hawaii, McBryde's claim of a prescriptive right to divert water could not be sustained against the state." Robinson, 753 F.2d at 1470. In other words, in a dispute between "A" and "B" over which of them possessed water rights, the Supreme Court simply said "neither of you do, the State owns it all."

The private parties who thought they had owned something for over a hundred years were understandably a bit miffed that their property had seemingly morphed into public property by the stroke of a Justice's pen, and, to add insult to injury, without even the chance to brief the Supreme Court before it announced the new rule. But after a rehearing on a narrow issue of state law, during which the court rebuffed an attempt by the private parties to raise federal constitutional issues, the Hawaii Supreme Court reaffrimed the McBryde ruling, with two Justices dissenting. See McBryde Sugar Co. v. Robinson, 55 Haw. 260, 517 P.2d 26 (1973) (per curiam). Justice Bernard Levinson switched his vote from the first opinion, concluding that it was a "radical departure" from established law, and was a taking:

Although I voted with the majority of this court in McBryde Sugar Co. v. Robinson, 54 Haw. 174, 504 P.2d 1330 (1973) [hereinafter referred to as McBryde I], I am constrained to recant that position in view of my current understanding of the problems of this case.  In light of the arguments adduced on rehearing, historical evidence discovered upon further research subsequent to the court's previous decision in this case, and a reappraisal of the reasoning supporting that decision, it is my opinion that the court committed error in holding that all surplus water belongs to the State and that private water rights, however acquired, may not be transferred to nonappurtenant land.  Because of the importance of this case to the development of the law on the subject of Hawaii's water resources, I have undertaken to present a detailed analysis explaining why McBryde I is not in keeping with long established and unique principles of Hawaiian water law.  Precisely because McBryde I is such a radical departure from these principles as they have been heretofore understood, moreover, I have concluded that McBryde I effectuates an unconstitutional taking of the appellant's and cross-appellants' property without just compensation and should be reversed on this ground as well.

McBryde, 55 Haw. at 262-63, 517 P.2d at 27 (Levinson, J., dissenting). The U.S. Supreme Court denied certiorari meaning the Hawaii Supreme Court's McBryde decision was final.

But it was not the last word. The sugar companies sued the state (Governor Ariyoshi, actually, since under Ex parte Young, 209 U.S. 123 (1908), a state official can be sued in federal court to enjoin unconstitutional conduct despite the 11th Amendment) in federal district court under the federal civil rights statute, 42 U.S.C. § 1983. The district judge -- the inimitable Martin Pence -- held that the Hawaii Supreme Court's McBryde decision took property without just compensation, and enjoined the state from enforcing the decision. See Robinson v. Ariyoshi, 441 F.Supp. 559 (D.Haw. 1977).

Up to the Ninth Circuit the parties went, which noted the tortured procedural path the case next took, including a detour back to the Hawaii Supreme Court on certified questions when the Ninth Circuit asked the court whether it really meant what it said in McBryde:

The leisurely pace of this litigation has produced three oral arguments in this court, two of which were followed by referral of certified questions to the Supreme Court of Hawaii. See Robinson v. Ariyoshi, 65 Hawaii 641, 658 P.2d 287 (1982) (Robinson II). Following the publication of the state court's answers to the certified questions, the parties briefed the remaining issues that had been narrowed by the earlier proceedings and reargued the case. A number of complex questions remain, but to expedite the matter we will discuss only those essential to a resolution of the main question: Can the state, by a judicial decision which creates a major change in property law, divest property interests?

Robinson, 753 F.2d at 1471. [Barista's note: are you keeping score yet? There's McBryde. McBryde II. McBryde III. Robinson I. Robinson II. Robinson III. Still to come: Robinson IV, V, VI, VII, and VIII, and then back to McBryde IV.]  After addressing jurisdictional issues, res judicata, and the Rooker/Feldman doctrine, the Ninth Circuit addressed the merits:

The state conceded at oral argument that the Fourteenth Amendment would require it to pay just compensation if it attempted to take vested property rights. The substantive question, therefore, is whether the state can declare, by court decision, that the water rights in this case have not vested. The short answer is no.

Robinson, 753 F.2d at 1473.The court determined that the water rights claimed by the private parties were vested rights, and that the state legislature or the state supreme court cannot alter those rights without condemnation and payment of just compensation.

By the time Robinson IV rolled around, the U.S. Supreme Court had issued its ruling in Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985) that certain regulatory takings case were not ripe, and it granted cert and summarily vacated the Ninth Circuit's Robinson decision, ordering it to consider the decision again in light of Williamson County's new ripeness rules. See Ariyoshi v. Robinson, 477 U.S. 902 (1986) (Robinson IV). The Ninth Circuit vacated its earlier order (Robinson v. Ariyoshi, 796 F.2d 339 (9th Cir.1986) (Robinson V) and sent the case back to Judge Pence in the District Court.

Not to be deterred, Judge Pence found the case ripe under Williamson County. See Robinson v. Ariyoshi, 676 F.Supp. 1002, 1020-21 (D.Haw. 1987) (Robinson VI). Back up to the Ninth Circuit they went, and in Robinson v. Ariyoshi, 854 F.2d 1189 (9th Cir. 1988) (Robinson VII), the Ninth Circuit ordered further briefing on the issue.  In Robinson v. Ariyoshi, 887 F.2d 215 (9th Cir. 1990) (Robinson VIII), the Ninth Circuit vacated the District Court's decision and sent it back with instructions to dismiss the case because it was not ripe under Williamson County.

A thirty-one year old case was not ripe, you say?  How so?

As noted, we previously certified six questions to the Supreme Court of Hawaii. In response, the Hawaii court stated that the decision in McBryde II did not constitute the final disposition of the case. See Robinson II, 658 P.2d at 295-97. The court explained that the McBryde litigation began and was treated throughout by the trial court as an action to determine the rights of the parties to the waters of the Hanapepe. The trial court had attempted to identify the exact quantity of water to which each party was entitled. On appeal, the Supreme Court of Hawaii affirmed the award of appurtenant rights and reversed the award of prescriptive and surplus rights. No specific instruction was imparted to the trial court, and the Supreme Court did not utilize its power to render a final judgment. Further, no further proceedings are of record in the trial court. The court explained that the partial reversal without instruction merely rendered that portion of the judgment void. Id. at 296-97. Thus the only portion of the judgment which could be considered final after appeal was the partial quantification of the parties' water rights, namely the award of appurtenant rights.

Robinson VIII, 887 F.2d at 218 (footnote omitted). Unbelievably, a third cert petition was not sought, and the litigation (per the Hawaii Supreme Court's edict as noted above) went back to the Kauai trial court where it all began in 1959, where, as far as anyone in these parts is aware, the case remains on the docket. The state certainly has no interest in moving it forward and ripening the case, and the private parties who originated the litigation are long since out of the sugar business. [See one note of correction in the comments.] Kauai is now a place of tax revolts, zoning fights, and quiet beaches, and the sugar industry is but a distant memory.

County of Hawaii v. Sotomura — Shifting The Line in the Sand

If you have managed to come along this far, congratulations -- there's more, but thankfully it's a shorter tale and one which follows the same general plot.

McBryde/Robinson was not a unique case, and the Hawaii Supreme Court regularly accomplished similar changes in established law in other areas. In County of Hawaii v. Sotomura, 55 Haw. 176, 517 P.2d 57 (1973), the court redefined the seaward boundary of a littoral parcel in a condemnation action from the high water mark to the "upper reaches of the wash of the waves," holding that no compensation was owed for the land seaward of the new line because it was owned by the state. The trial court had awarded nominal compensation of one dollar to the property owner for the condemnation of this property, but the Supreme Court declared that was error and took the dollar away. [Disclosure: my late law partner and name partner of our firm, Charlie Key, represented the property owners in the Hawaii Supreme Court.]

The property owners followed the Robinson script and sued in federal district court (for due process violations, not under a takings theory). The court determined "[j]udicial transfers of title to private lands to the State which do not permit the owner an opportunity to be heard or to present evidence is not constitutionally valid. Whenever a party is to be deprived of property, he is entitled to a meaningful hearing before the fact." Sotomura v. County of Hawaii, 460 F. Supp. 473, 478 (D. Haw. 1978). The district court concluded:

This Court fails to find any legal, historical, factual or other precedent or basis for the conclusions of the Hawaii Supreme Court that, following erosion, the monument by which the seaward boundary of seashore land in Hawaii is to be fixed is the upper reaches of the wash of the waves. To the contrary, the evidence introduced in this case firmly establishes that the common law, followed by both legal precedent and historical practice, fixes the high water mark and seaward boundaries with reference to the tides, as opposed to the run or reach of waves on the shore. For example, on the Island of Hawaii, the seaweed line was used to indicate the level of the high tides and high water mark. The decision in Sotomura was contrary to established practice, history and precedent and, apparently, was intended to implement the court's conclusion that public policy favors extension of public use and ownership of the shoreline. A desire to promote public policy, however, does not constitute justification for a state taking private property without compensation.

Id. at 480-81. The state's appeal to the Ninth Circuit was dismissed as untimely.

Just think of the possibilities if the deadline had not been missed -- this case might still be going on today.

Fifth Circuit: Fourth Amendment Seizure Of Beachfront Land Claim Not Subject To Williamson County Ripeness

A very interesting decision from the U.S. Court of Appeals for the Fifth Circuit in Severance v. Patterson, No. 07-20409 (Apr. 23, 2009). 

While much of the commentary about the case (see, e.g., here, here, and here) has focused on the dissenting opinion's ad hominem on the plaintiff's and her attorneys' motivations and the majority opinion's slap-down of the dissent (see footnote 1), for now we will stick to what the opinion held on the merits which is as interesting, if not more so. (We will add our thoughts about what the weird dissent said about public interest legal cases in a separate post.)

The case involved constitutional challenges to a Texas statute known as the Open Beaches Act, which imposes an easement for public access over certain beachfront land. After Ms. Severance purchased two beachfront parcels in Galveston, in 2005 Hurricane Rita caused the vegetation line to move landward, which subject large portions of her properties, including two homes, to the public access easement. The Commissioner of the Texas General Land Office informed her these homes were subject to removal and offered $40,000 in relocation assistance.

Severance filed suit in federal district court under two theories: the enforcement of the easement was a taking under the Fifth Amendment, and an illegal seizure under the Fourth. Fifth Amendment takings claims in this type of situation are nothing new, but a search-and-seizure claim? Whoa, isn't that the province of criminal law practitioners, not property rights mavens? Read on.

Fifth Amendment Takings Claim Not Ripe

The district court predictably tossed the Fifth Amendment claim out of federal court. Ms. Severance had not pursued just compensation in Texas state courts, and the court held her claim was not ripe under Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985).  That case established two requirements for a regulatory taking claim to be ripe in federal court: the government must have reached a final decision applying the regulation to the property at issue, and the plaintiff must have sought -- and been denied -- just compensation through available state procedures. Only the second test requirement was at issue.

On appeal, the court rejected Severance's assertion that the state litigation requirement was not applicable to a physical -- as opposed to purely regulatory -- taking. The court relied on circuit precedent to hold that Williamson County is applicable to a physical invasion as well as a regulatory taking. See slip op. at 8-9 (citing Urban Developers LLC v. City of Jackson, 468 F.3d 281 (5th Cir. 2006)). 

The Fifth Circuit also rejected Severance's argument that Williamson County does not apply when only declaratory or injunctive relief is sought. Slip op. at 9. The court recognized that the Williamson County rules, coupled with the rules of preclusion, prevent property owners from having their federal claims heard in federal court, and that in San Remo Hotel, L.P. v. City & County of San Francisco, 545 U.S. 323 (2005), four Justices agreed Williamson County produces absurd results and denies federal court review of federal constitutional rights. But these Justices did not carry the day, and the Fifth Circuit noted that "the majority of the Supreme Court in San Remo were unconcerned by this result, observ ing that '[i]t is hardly a radical notion to recognize that, as a practical matter, a significant number of plaintiff will necessarily litigate their federal takings claims in state courts.'" Slip op. at 10 (quoting San Remo, 545 U.S. at 346). Until the Supreme Court overrules Williamson County, the Fifth Circuit -- and the rest of us -- are stuck with it.

Fourth Amendment Seizure Claim

The court reversed the district court's dismissal of the Fourth Amendment claim. The Fifth Circuit held that Williamson County's ripeness requirements are not applicable to a Fourth Amendment seizure claim. The court rejected the government's claim that the seizure claim was "subsumed" within the takings claim, because the Fourth Amendment applies to both civil and criminal seizures, and that a government act can violate more than one constitutional prohibition. Slip op. at 16. The court set out the elements of a civil seizure claim: "(a) a meaningful intereference with [the owner's] possessory interests in her property, which is (b) unreasonable because the intereference is unjustified by state law or, if justificed, then uncompensated." Slip op. at 17-18 (citing Presley v. City of Charlottesville, 464 F.3d 480, 487-88 (4th Cir. 2006)).

On the latter point, the Fifth Circuit held that Texas law was not clear.   Consequently, the court certified three questions to the Texas Supreme Court:

1. Does Texas recognize a "rolling" public beachfront access easement, i.e., an easement in favor of the public that allows access to and use of the beaches on the Gulf of Mexico, the boundary of which easement migrates solely according to naturally caused changes in the location of the vegetation line, without proof of prescription, dedication or customary rights in the property so occupied?

2. If Texas recognizes such an easement, is it derived from common law doctrines or from a construction of the OBA?

3. To what extent, if any, would a landowner be entitled to receive compensation (other than the amount already offered for removal of the houses) under Texas’s law or Constitution for the limitations on use of her property effected by the landward migration of a rolling easement onto property on which no public easement has been found by dedication, prescription, or custom?

Slip op. at 20.

After slinging mud at the plaintiff and Pacific Legal Foundation [disclosure: I do work for Pacific Legal Foundation in Hawaii], the dissent argued that the plaintiff lacked standing because she had no property interest in the land, and that the seizure was not unreasonable.

Cert Denied In Agripost (Williamson County)

The U.S. Supreme Court has denied review to Agripost, LLC v. Miami-Dade County, Florida, No. 08-567 (cert. petition filed Oct. 27, 2008), another case asking the Court to overrule Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), the decision that gave us the weird ripeness rules in regulatory takings. The order is available here.

The briefs and the 11th Circuit's opinion are available here.  This is the second petition asking the Court to overrule Williamson County that has been denied this Term.

Overrule Williamson County: Agripost Cert Petititon A "Petition To Watch"

Thank you to several of our readers for pointing out that SCOTUSblog has determined that Agripost, LLC v. Miami-Dade County, Florida, No. 08-567 (cert. petition filed Oct. 27, 2008) is a "petition to watch" for the Supreme Court's March 27, 2009 conference.

The petition asks the Court to overrule Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), the decision that gave us the weird ripeness rules in regulatory takings. The two Questions Presented:

Question 1. Should the Court overrule Williamson County Regional Planning Commission v. Hamilton Bank insofar as it denies property owners the right to litigate their federal causes of action in federal court, the same as all other constitutionally aggrieved citizens, and forces them to seek compensation in state court ostensibly to ripen their federal constitutional takings claims, where four Justices of this Court declared in San Remo Hotel v. City and County of San Francisco that the Williamson County rule is "mistaken" due to its lack of doctrinal underpinning and incoherent effect on federal jurisdiction?

Question 2. Where settled 11th Circuit law has for decades provided that a property owner following the Williamson County rule of state court ripening litigation may "reserve" federal issues for federal court trial, and in fact the 11th Circuit expressly so ordered in an earlier appeal of this case, can the property owner be punished for obeying such an order by having its eventual federal court suit dismissed on the basis of issue preclusion?

Here are the briefs:  

• Petition

• Brief in Opposition

• Reply Brief
  

• Pacific Legal Foundation amicus

• National Association of Home Builders, and Franklin P. Kottschade amicus

• Michigan State Bar - Real Property Law Section amicus

The Court has already denied one petition asking it to overrule Williamson County this Term, and denied another involving ripeness issues.

Conference: ABA Section Of State & Local Government Law Virtual Spring Meeting

Instead of an in-person Spring Meeting this year, the ABA Section of State & Local Government Law will be "meeting" virtually from March 31-April 2, 2009.  As part of the meeting, the Section will be featuring a series of teleconference and live audio webcasts on a variety of subjects including topics near and dear to us: workforce housing, condemnation, land use, and green regulations. You can register for all programs, or individual subjects. A complete list of programs is posted here.

I will be participating as faculty in two of the programs: Condemnation Hot Topics (April 1, 2009 from 2:00 - 3:30pm EDT) and Hot Topics in Land Use Law (April 2, 2009 from noon - 1:30 EDT).  I'll be speaking about the issue of public use and pretext in eminent domain, and recent cases questioning the government's ability to take property.

Registration information is available on the links. If you can't make it for the live programs, the ABA is making recordings available also.  I hope you can join in.

First Circuit: Williamson County Applies To Eminent Domain Challenges

In Lichoulas v. City of Lowell, No. 08-1485, 08-2023 (1st Cir., Jan. 30, 2009), the U.S. Court of Appeals declined to rule on a property owner's objection to a taking for redevelopment, holding that public use challenges belong in state court. Interestingly, the court cited Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985) for the proposition that "any objection to the taking, or deficiency in adequate compensation, could be and preferably is to be done in state proceedings." Slip op. at 6.

In 2006, the city took Lichoulas' property, on which sat a hydroelectric power facility, inactive since 1994. The Federal Energy Regulatory Commission earlier sent a notice to the owner that unless the facility began operating, it would consider the federal license abandoned. The property owner responded that he would forward a work plan to FERC, but it was never sent. Shortly thereafter, the city began eminent domain proceedings for a redevelopment project. The property owner sued in federal court seeking to enjoin the taking under two theories. First, that the Federal Power Act precluded the taking, and second, that the taking was not for a public use. The district court dismissed the case as not ripe, holding the property owner could refile the case after FERC proceedings were terminated.

The First Circuit affirmed. It did not address the property owner's two arguments, holding any claims that the property owner has that the taking is not for public use under the Fifth Amendment could be raised in the state condemnation proceedings:

Lichoulas is simply seeking to have the federal court derail a state takings proceeding in which--given the Supremacy Clause--he could presumably raise his objections.

The district court had no obligation to oblige. In general, declaratory and injunctive relief are both matters of judicial discretion. Here, the evident prospect that FERC would revoke the license made clear that the federal interest, such as it was, would likely be mooted; and any objection to the taking, or deficiency in adequate compensation, could be and preferably is to be done in state proceedings...To the extent that Lichoulas seeks compensation for the taking, the claim is properly brought in state court, as Williamson makes clear.

Slip op. at 6-7. Rather than muddy the waters by bringing in Williamson County, the court would have been on more solid footing if it based its decision on the abstention doctrine of Younger v. Harris, 401 U.S. 37 (1971), which embodies "a strong federal policy against federal-court interference with pending state judicial proceedings absent extraordinary circumstances." Middlesex County Ethics Comm. v. Garden State Bar Ass'n, 457 U.S. 423, 431 (1982). Under Younger and its progeny, "abstention is appropriate...if (1) the state proceedings are ongoing; (2) the proceedings implicate important state interests; and (3) the state proceedings provide an adequate opportunity to raise federal questions."  Fresh Int'l Corp. v. Agricultural Labor Relations Bd., 805 F.2d 1353, 1357-58 (9th Cir.1986).

Here, it is not clear from the opinion whether the state court eminent domain proceedings were ongoing: on one hand, the court noted the parcels "were taken" by the city and that the city "took" the property, indicating that the state case was concluded; but on the other, the court noted the property owner sought to enjoin the taking, implying the state proceedings were not yet complete. Even so, this case seems like a good candidate for Younger analysis and not an application of Williamson County, which involved a regulatory taking/inverse condemnation claim for compensation, not an effort to stop a taking because it lacked a public use.

The First Circuit's reliance on Williamson County reflects the lower courts' continuing confusion about what the case means. Some courts even apply it to cases not involving the takings clause (despite the fact that the rationale of Williamson County is based in the text of the takings clause), and now the First Circuit has applied it to public use challenges.  Contrast the decision from the D.C. Circuit in Rumber v. District of Columbia , 487 F.3d 941 (D.C.Cir. 2007), which held that a public use challenger need not seek compensation in state procedures before coming to federal court.  One of these days, the Supreme Court is going to revisit Williamson County.

New Eminent Domain Book: Current Condemnation Law: Takings, Compensation & Benefits (2d ed.)

A recent book of interest to condemnation lawyers, Current Condemnation Law: Takings, Compensation & Benefits (2d ed.).

The book is co-edited by my Owner's Counsel of America colleague Alan T. Ackerman. (He also has a blog about eminent domain issues.)

From the blurb:

Condemnation of property is an especially topical subject after the U.S. Supreme Court's controversial decision in Kelo v. City of New London. This completely revised edition of Current Condemnation Law examines the many complexities involved in the practice of eminent domain law in order to assist lawyers in best protecting the clients' interests in these cases. The book brings together experts in the specialty to provide analysis of both major and specialty areas of condemnation law, providing "how to" tips along with current discussions of case law and theory.

The chapters in Current Condemnation Law provide a thought-provoking mix of articles covering the key topics of business valuation, contamination issues, the right to take, and payment for business damages. Written by some of the ablest practitioners in condemnation law, this book will assist both new and veteran practitioners to develop and maintain a successful condemnation law practice.

Chapters include: Bulldozers at Your Doorstep: The Debris of Kelo v. City of New London; Taking Rights Away: Ripeness, Abstention, and Res Judicata Principles in Takings Cases; Condemnation Blight: Analysis and Suggested Solutions; Calculation of Damages in Temporary Takings; The Relevance of Rezoning and Comparable Sales Occurring After the Date of Taking; and Public Use Acquisitions: The Experience in England and Wales. Several chapters are authored by OCA's New York member Michael Rikon. View the complete table of contents here. Purchase your copy from the ABA here.

Cert Denied In Ripeness And Penn Central Case

It's easy to blog a case when you or your colleagues win it, and we've had plenty to talk about lately in that department in eminent domain and zoning law.

On the other hand, it's not so easy to write about a case when you don't prevail. Today is one of those days. The U.S. Supreme Court declined to review the California Court of Appeal's decision in Charles A. Pratt Const. Co. v. California Coastal Comm'n, 76 Cal. Rptr. 2d 466 (Cal. Ct. App. 2008) (the California court's slip opinion available here). The Supreme Court's Order List denying review is posted here.

We blogged about the lower court decision here, the rehearing petition here, and the cert petition here. We (and others) filed amicus briefs, urging the Court to review the case. Our brief is posted here. The two Questions Presented by the cert petition involved whether the ad hoc Penn Central test for whether government action effects a regulatory taking of property can be reduced to bright-line rules, and whether, under the Williamson County ripeness rules, a property owner must continue to pursue a development application when the reviewing agency makes it clear that denial of the application is the "only appropriate course."

A denial of a petition for writ of certiorari does not mean that the Supreme Court approves of the lower court decision or that the issues are not worthy, merely that the case (for whatever reason) is not appropriate for the Court's review. The Penn Central and Williamson County issues remain ripe for review in some case, just not this one.

To paraphrase the good governor of California: "We'll be back."

Latest Developments In Maui Affordable Housing Exaction Case

For a while now, we've been meaning to post the latest order in the Maui affordable housing case from the U.S. District Court, Kamaole Pointe Development LP v. County of Maui, No. 07-00447 DAE (D. Haw.), but for one reason or another, haven't had the chance until now. 

The case is a challenge to the County of Maui's "workforce housing" ordinance, enacted in in 2006, which imposes a 40% to 50% affordable requirement on new housing developments of five or more units, and on an application to subdivide a lot into five or more parcels. In lieu of providing actual units, a developer may either pay a fee equivalent to 30% of the total project sales, donate improved land of the same value, or donate raw land valued at 200% of the in-lieu fee. Ordinance 3418 is posted here.  I posted on the case earlier here.

The complaint asserts claims for "unconstitutional conditions," regulatory takings, substantive due process, equal protection, and claims under Hawaii law. The Complaint for Declaratory and Injunctive Relief (filed Aug. 23, 2007) is posted here (note, the Complaint was amended on Sep. 6, 2007). The court earlier dismissed the "unconstitutional conditions" claim, holding it was a regulatory takings claim and was not ripe under Williamson County because the plaintiffs had not pursued a state compensation remedy. That order is posted here.

On November 25, 2008, the court issued an Order Denying Plaintiffs' Motion for Partial Summary Judgment; and Order Granting in Part and Denying in Part Defendants' Motion for Summary Judgment. The court held that the Williamson County ripeness rules also apply to the due process and equal protection challenges, which were not ripe because the property owner had not obtained a "final decision" from the County:

In this case, there is no dispute that Plaintiffs brought an appeal to the County Council requesting a waiver from the strictures of the Ordinance. The appeal for a waiver was denied. It is also undisputed that Plaintiffs have not  filed any formal application or submitted a development plan under the Ordinance. Thus, while Plaintiffs may have received a sufficient denial of a variance in the form of the Council’s waiver rejection, it is clear from the record that Plaintiffs have not received a final decision from the Council rejecting their development plan. Under the final decision jurisprudence, Plaintiffs' as-applied due process and equal protection claims must fail because they are unripe.

Slip op. at 14. The court noted that the Ninth Circuit applies the final decision prong of Williamson County's ripeness rule to substantive due process and equal protection challenges. Slip op. at 11 (citing Hoehne v. County of San Benito, 870 F.2d 529, 532 (9th Cir. 1989); Kinzli v. City of Santa Cruz, 818 F.2d 1449, 1455-56 (9th Cir.), as amended, 830 F.2d 968 (1987), cert. denied, 484 U.S. 1043 (1988); Shelter Creek Dev. Corp. v. City of Oxnard, 838 F.2d 375, 379 (9th Cir. 1988), cert. denied, 488 U.S. 851 (1988); Herrington v. County of Sonoma, 857 F.2d 567, 569 (9th Cir. 1988)). The district court noted "the policy behind requiring a final decision before a court can adjudicate [due process and equal protection] claims is that 'it is generally impossible to determine the extent of the infringement absent a final determination by the relevant governmental body.'" Slip op. at 12 (quoting Sinaloa Lake Owners Ass'n v. City of Simi Valley, 882 F.2d 1398, 1404-05 (9th Cir. 1989), overruled on other grounds Armendiz v. Penman, 75 F.3d 1311, 1326 (9th Cir. 1996)).  

The final decision rule has at least some semblance of logic applied to regulatory takings, where the Supreme Court has established a rule that the value remaining after regulation is applied to property is relevant to the question of whether the property has been taken. But the Ninth Circuit's application of this requirement to due process and equal protection claims has little logical basis, and virtually no support in the constitutional text. Why should it matter that some use might be able to be made of property if the government is acting arbitrarily, without notice and opportunity to be heard, or treating one property owner differently than another? The constitution is violated when even in the course of a preliminary decision about what uses can be made of property the government acts badly, not just when (as in regulatory takings) the government does not recognize its obligation to pay just compensation. But a District Court obviously cannot overrule circuit law, even when a rule makes no sense, so the court was bound to apply the Ninth Circuit's Hoehne rule, so any challenge to the rule itself will have to wait until appeal. 

The court also held that it would not be futile for the property owner to have submitted a development plan, even though the owner claimed that doing so would be cost-prohibitive and would force it to operate at a loss.  Slip op. at 15. The Ninth Circuit's futility rule requires that in order to prove that submitting an application for development would be futile, the property owner must -- and we are not kidding here -- submit an application and see whether it gets denied. And if that application is denied, the property owner must ask for a "variance." See Kinzli v. City of Santa Cruz, 818 F.2d 1449 (9th Cir. 1988). Again, a District Court is in no position to overrule binding circuit precedent, no matter how silly it may be, although the court in Kamaole Pointe at least recognized the "inherent contradiction in having an exception to an application requirement require submission of applications" --

This Court recognizes the inherent contradiction in having an exception to an application requirement require submission of applications. See Zilber v. Town of Moraga, 692 F. Supp. 1195, 1199 (N.D. Cal. 1988) (criticizing the logic of Kinzli’s "meaningful application test). Kinzli and its progeny, however, indicate that the "meaningful application" requirement that triggers the futility exception is designed to provide a forum for developers who have repeatedly submitted legitimate development plans to local agencies only to have them continuously delayed or denied. Moreover, this Court is bound by Ninth Circuit authority which has, in this area of law, repeatedly reinforced the "meaningful application" test. See Zilber, 692 F. Supp. at 1200 (acknowledging that "although this Court is less than comfortable with the Kinzli rule, it is well established in this circuit and therefore binding upon the Court").

Slip op. at 17, n.1. Although it dismissed the substantive due process and equal protection claims, the court held the procedural due process claim was ripe because the plaintiff asserted that the County did not provide adequate procedures in evaluating its appeal for a waiver, and thus was not a "'challenge to the application of land use regulations' to the land." Slip op. at 21. This split-decision underscores the strange dichotomy in the federal courts between "land use" and property cases and cases which seek to vindicate other constitutional rights. See, e.g., slip op. at 18, n.2 (dismissing the substantive due process claim on ripeness grounds because it involved application of land use regulations). We thought the Crown Point case finally ditched that distinction (as we noted here), but maybe, that, like the final decision and futility rules, must wait for appeal.

Finally, the district court disposed of the state law claim the County was without power to enact the ordinance because only the State can impose an "affordable housing impact fee." "Impact fees" as defined in Haw. Rev. Stat. § 46-141 are limited to those imposed to fund public facility capital improvements required by the development. The court held that this definition does not include the in-lieu fee required under the County's ordinance because the money collected goes into the general affordable housing fund and is not earmarked for offsetting capital improvement projects attributable to the development. Slip op. at 32. This seems like circular reasoning, as noted in this post.

Trial on the remaining issue is set for December 2009.

Reply In Support Of Petition In Pratt v. Cal. Coastal Comm'n - Penn Central And Williamson County

The property owner has filed its Reply in Support of Petition for a Writ of Certiorari in Charles A. Pratt Const. Co. v. California Coastal Comm'n, No. 08-668 (cert. petition filed Nov. 18, 2008) (SCOTUS docket report here). The petition seeks review of the California Court of Appeal's opinion reported at 76 Cal. Rptr. 2d 466 (Cal. Ct. App. 2008), available here.

The issues presented in the case involve the Penn Central ad-hoc test for regulatory takings, and the "final determination" prong of the Williamson County ripeness rule. The Reply brief argues:

The Brief in Opposition is liberally salted with Respondent California Coastal Commission's assertions of what it refers to as the "facts" (e.g., pp. 5, 11) as well as disparagement of the presentation in the Petition as having "no evidence" (e.g., pp. 7, 11) behind it.

The Brief in opposition thus highlights the problem that call for the Court's review: there has been no trial to establish the facts and the courts below turned what should have been an evidentiary trial into assumptions supposedly made as a matter of law. Building on those deficiencies in the lower courts' rulings, the Commission's brief substitutes self-serving prose and misdirected invective towards Petitioner's counsel in pace of a due process proceeding in which the facts of the controversy -- not just counsel's argumentation -- are presented as proper evidence to an impartial trier of fact.

In light of the standard the Court has established for deciding regulatory taking cases (i.e., "ad hoc" factual determinations [see Pet., pp. 10-18]), an inquiry into evidence is essential. Lower courts that are hostile to private property rights fail or refuse to understand that basic notion, thus showing the need for corrective action by this Court.

As shown in the Petition, the Court's decisions hold that each regulatory taking case must be decided "ad hoc"on its own facts. (E.g., Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 124 [1978].) Of necessity, that can only be done after trial, with the presentation and evaluation of evidence.

Reply at 1-2.

Disclosure: we filed an amicus brief in the case for the Western Manufactured Housing Community Association, available here, which argues:

Because [the Penn Central] framework eschews any "set formula" and relies instead on "essentially ad hoc, factual inquiries," it is, by its very nature, incapable of being subject to the rigid "20 percent is enough value" per se rule established by the California court. The decision below ignored the requirement of a "weighing of all the relevant circumstances," and established a bright-line rule focused solely on economic impact: when the government’s denial of a development proposal leaves a property owner with no more than 20 percent (or as little as 1120 square feet) of her land available for development, the remaining two Penn Central factors become irrelevant. This arbitrary rule is apparently based on nothing more than caprice, since the court below offered no analysis or rationale in support. Lacking this Court’s clarification, the default regulatory takings test has become a standardless exercise in judicial intuition, hidden behind a gloss of objectivity.

The cert petition and the other amici briefs supporting it are posted here. The Reply brief is responding to arguments made the Coastal Commission in its Brief in Opposition, posted here.