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CA11: State Can Be Ordered To Stop Withholding Just Compensation

Florida, like a lot of other jurisdictions, has an unclaimed property program whereby if an owner is deemed to have abandoned property (remember that old bank account you had in college years ago with a $2.50 balance?), the holder of that property may transfer it to the State, which keeps it until you come get it. In the meantime, however, under Florida's scheme if that property is money (or is reduced to money), any interest which accrues is used by the State to pay for public schools. (That may not be constitutional, but at least funding schools with someone else's money seems a better use of the interest than funding the State Fair.)

Florida had some of Maron's money in its unclaimed property fund, a whopping $26.24. State law allowed her to get that money back, but as noted above, also prohibited her from getting the interest, so she sued for a taking.

In federal court. 

If that sets off your alarm bells, you'd be right. You know why: the Eleventh Amendment. Which has been interpreted to bar a plaintiff from suing a state in any federal court (yes, we know that's not what the Eleventh Amendment says, but the Supreme Court reads it that way). 

But there are exceptions, most notably Ex parte Young, which says that the Eleventh only bars federal court suits for retrospective damages, and allows you to sue a state in federal court if you limit the relief sought to prospective injunctive relief.

In Maron v. Chief Financial Officer of Florida, No. 23-13178 (May 16, 2025), that's what Maron thought she did. She didn't ask the court to award just compensation.Instead, she asserted Florida was keeping the interest, and there was no way to get compensation. 

The district court agreed with Florida and held that she was suing for a taking, an act Florida already had accomplished, and thus was not something that the court could order it to stop doing. And thus the relief she sought was not prospective, only remedial. Case dismissed.

The U.S. Court of Appeals for the Eleventh Circuit rejected that argument. Here's what we think is the money quote:

That inquiry resolves in the Marons’ favor. The Marons alleged an ongoing violation of federal law—that the State has appropriated their refund and failed to give them just compensation. And they sought prospective relief—that the district court declare a part of the Act unconstitutional for precluding recovery of just compensation and that it order the State to pay just compensation when they later file a claim. The Ex parte Young exception applies.

Relying on Edelman v. Jordan, 415 U.S. 651 (1974), the State argues that the Marons’ prayer for injunctive relief is really a request for retrospective relief. The State contends that the request to “pay the Marons and class members past monetary gains when they file a claim in the future . . . amounts to nothing more than a prospective request for retroactive monetary damages.” We disagree.

Slip op. at 17.

On that, the Eleventh Circuit joined at least one other circuit (the Ninth, which held in this case that the State of Oregon could be sued in federal court when the remedy sought is injunctive relief ordering Oregon to stop withholding interest that should have gone to the property owner plaintiffs).

This can be a tricky issue. Although there's no conceptual reason supporting any distinctions in the relief sought based on the nature of the taking, courts do seem to treat these type of cases differently. On one hand, where the state appears to be wrongfully keeping property and refusing to give it back to the owner, the courts are more likely to conclude that the owner may seek a prospective injunction to command the state to stop it. See this case and that Ninth Circuit decision. On the other hand, if it appears to be a case where the taking is some kind of interference with use and the injunction looks like the plaintiff is trying to plead around the Eleventh Amendment, then the more likely it is the court will reject that effort.

None of these sort of mental gymnastics should be necessary, of course. Maybe just compensation is self-executing and not subject to the Eleventh Amendment (an issue the Supreme Court dodged last Term). Or maybe the Fourteenth Amendment waived any Eleventh Amendment immunity the states may have enjoyed. We'd hope the Supreme Court would take up the mantle and resolve these uncertainties.

The entire Eleventh Circuit opinion is worth your time. In addition to holding that the claim was not subject to Eleventh Amendment immunity, relying on Knick, the court concluded that the takings claim was ripe and that the owner had standing to assert the claim and was suffering an actual injury (an issue intertwined with the merits of the takings claim and the relief sought):

The Marons satisfied these three elements, by alleging that the State took their refund and used it. They pointed to the Act’s requirement that presumed-unclaimed property be delivered to the State’s custody, see Fla. Stat. § 717.119(1); they alleged that the State held their refund in its custody; and they alleged that the State “used the property for public purposes, including by investing the property and earning interest, and otherwise using it to fund the State’s operations and programs.” So the harm the Marons pleaded is concrete: they cannot use their refund now that it has been delivered into the State’s custody—they must apply and be approved by the Department to access the property. See Fla. Stat. § 717.124(1). The pleaded harm is also particularized: the Marons cannot use their refund. And that harm is actual: the refund has already been placed into the State’s custody, where it cannot be used by the Marons. In short, the Marons suffered an injury in fact.

Slip op. at 9-10.

Finally, the court rejected the State's argument that the takings claim was not ripe, because Maron had not applied for refund, and the State's finance department had not denied the application. The court noted this would be a "pointless formality," because doing so would be futile: the statute itself makes clear that the State has not obligated itself to provide the interest, and "[n]othing is gained by further requiring the Marons to make and be denied a request with the Department." Slip op. at 16.

Maron v. Chief Financial Officer of Florida, No. 23-13178 (11th Cir. May 16, 2025)

New Article: "Daunting Odds: Regulatory Takings Claims in The United States Circuit Courts of Appeals," 94 Miss. L. J. 637 (2025)

You know the claim: even after the federal courts opened back up to regulatory takings claims, winning a case is still pretty difficult. 

Yes, that may be by design: maybe it's not supposed to be easy to get in the way of the regulatory state and prevail on a claim that a government action has "gone too far" by having similar effects on the owner's property rights as an exercise of eminent domain. Or maybe it is. But either way, those of you who have been at this long enough can sense that something isn't quite right. That our property owners are not getting a fair shake from the courts. That there's an imbalance in The Force. 

Whether it is surviving a motion to dismiss where the court applies stricter pleadings standards than in other civil cases, or getting to the merits by escaping summary judgment, or even having a court of appeals wipe out a favorable jury verdict, it is the rare lawyer that doesn't counsel the client that these are tough cases, and not simply because they are difficult to prove. Or, in the words of student-author Ramsey Thrasher, "daunting." 

We'll say. His newly-published article, "Daunting Odds: Regulatory Takings Claims in The United States Circuit Courts of Appeals" (94 Miss. L. J. 637 (2025)), puts forward some empirical proof you aren't just imagining it: "[O]ut of the 366 total cases, only twenty-four decisions have been rendered in favor of the claimant throughout every circuit." The article studied all of the regulatory takings decisions by the federal appeals courts, and lays out the stats.

Here's the summary, from the Introduction:

Since the latter half of the 20th century, the federal Circuit Courts of Appeals have ruled on numerous regulatory takings claims. The cases cover a diverse plethora of issues and industries allegedly affected by regulations, ordinances, and statutes passed by government entities throughout the country. While the factors surrounding the cases are different, the outcomes are shockingly parallel.

This paper aims to compile and compare the many cases under regulatory takings law. Part I establishes a strong foundation by providing a thorough background into Takings Law. This section not only describes regulatory takings but also introduces seminal cases such as Penn Central Transportation Company v. City of New York, which produced the standard test applied to regulatory taking claims today.

Part II consists of a detailed overview of each circuit’s approach to regulatory takings claims. Included in each analysis is a breakdown of how many regulatory takings claims have been decided by each court, how many times the courts have ruled in favor of the government entity compared to the claimant, the industries allegedly affected, reasoning commonly asserted by the courts as to why the regulatory taking claims have failed, and how the courts have applied the Penn Central test.

Part III then analyzes whether the courts have remained consistent, whether the courts seem to protect property rights or promote government intrusion, whether a prediction can be made on how the courts will rule on regulatory taking claims in the future, and whether bringing a successful regulatory takings claim is equally as daunting in each circuit.

The piece goes through each circuit, and there's a section on how the courts' track record may be used to predict how those courts will rule down the road. The bottom line: a claimant 6.6% chance of success:

The number of cases addressing regulatory takings compared to the overall low success for regulatory taking claims allows for one to predict with relative ease how the court will rule on future regulatory taking claims. Over the almost fifty-year span since the courts first began deciding regulatory taking issues, the courts have rendered decisions in 366 cases. In 342 of those cases, the court ruled in favor of the ordinance, regulation, or statute. On the other hand, the court ruled in favor of the claimant in only twenty-four cases. These figures indicate that a claimant has a 6.6 percent chance of bringing a successful regulatory taking claim in front of a federal circuit court of appeals. Considering this low success rate and the courts’ level of consistency, excluding the 2000s, it is relatively convenient to assume the courts will continue to rule against the complaint in future regulatory taking claims.

94 Miss. L. J. at 677.

The culprit? Penn Central. See id. ("Furthermore, as long as the Penn Central test remains unaltered and the standard in evaluating regulatory taking claims, claimants can expect the courts to rule in favor of the government action. While some praise the Penn Central test for its flexibility, others believe the test is “maddeningly unpredictable” and 'favor[s] the government in most situations.'").  

Check it out. This is a must-read, if only to confirm your gut sense that there's a thumb on the scale and the low success rate isn't due to bad cases.

CA11: 25-Year-Old Takings Case Isn't Ripe

In 1996 (you remember 1996, don't you?), Corey purchased a vacant parcel, adjacent to a busy crossroads, and thus an ideal location for a truck stop. Problem was that the zoning was C-2, which didn't permit truck stops (although it did allow gas stations and convenience stores).

So began a 25+ year odyssey, which in Corey v. Rockdale County, No. 23-13097 (May 7, 2025), the U.S. Court of Appeals held that Corey's takings claim was not ripe because the County amended the challenged zoning ordinance around his earlier claim, and he had not received the County's confirmation under the most recent version of its zoning that the truck stop Corey had been trying to build was a definite no-go. 

Let's start at the beginning. To us, it seems like the takings claim was ripe back in 1999:

In 1999, Corey asked the County if its zoning regulations permitted him to build a truck stop on his property. The County said no and informed Corey that truck stops were not a “specifically designated” use for C-2 properties under the then-existing zoning ordinance.

Slip op. at 3.

But instead of suing (something few property owners want to do -- they want to use their properties, not pursue takings claims), the owner made efforts to try and make it work. He tried to amend the zoning (something he was not required to do). No luck. He asked to build a "travel plaza" and not a truck stop. County shook its head. He sued, unsuccessfully, to compel the County to issue a zoning permit. He changed his plans and instead of a truck stop, tried to build a C-store "which sold fuel to automobiles and heavy trucks." Slip op. at 4. Got nowhere.

By now, we're in 2006. The County re-emphasized its earlier "no truck stops" by amending the zoning ordinance to expressly say "no truck stops." Yes, you can have a gas station on C-2 zoned land (like Corey's adjacent properties), but you can't have any combination of uses that add up to "truck stop."

Flash forward to 2018. Corey sought to construct a "travel plaza." A C-store, gas pumps, truck scales, and truck parking. This time, things looked hopeful. The County planning director seemed amenable to an amendment to the C-2 zoning ordinance to allow travel plazas like this. The Planning Commission recommended adoption of this amendment to the County board of commissioners who have the final word on zoning amendments. "But the board unanimously rejected the amendment." Slip op. at 5.

Undaunted, Corey applied for a construction permit. Unsurprisingly, the County said no. This is a dang truck stop, dude!

In 2019, roughly a year after the amendment was rejected, Corey applied for a construction permit to build the QuikTrip travel plaza. The County rejected Corey’s permit application be-cause it sought to build a truck stop prohibited by the 2006 ordi-nance. Corey appealed the denial to the County’s internal appeals board, which—after holding a hearing—affirmed the County’s decision.

Id.

He appealed the decision up through the state court system, ultimately winning a claim that the ordinance's definition of "truck stop" was unconstitutionally vague. Slip op. at 6.

What's that old saying? If at first you don't succeed, try try again? This time it was the County's turn.

Remember that infamous advice back in the day where government were advised that if they got whacked with a regulatory takings judgment that all they needed to do was amend the regulation and require the owner to start over? The County's approach here seems like a ripeness version of that advice. In 2021, it amended the C-2 zoning to clarify the definition of truck stop, and re-emphasize that such uses are prohibited.

"Fool me three times, shame on me" thought Corey: he sued for a taking. But the district court entered judgment on the pleadings for the County.

The Eleventh Circuit affirmed the dismissal. Despite the earlier denials of permit applications, and the current version of the ordinance expressly prohibiting truck stops, Corey's claim that being prohibited from building a truck stop is a taking isn't ripe. Why? Because "Corey did not apply for a permit or variance under the 2021 ordinance." Slip op. at 10. You never know: the County this time might say yes (despite decades of saying no in nearly every way possible).

Wouldn't this be futile in light of this history, as Corey argued? No, those earlier denials were under the then-applicable C-2 zoning ordinances. But there's been no application -- and thus no denial -- under the current zoning ordinance. Hang on. Isn't the 2021 zoning ordinance more restrictive and more clear that truck stops are banned? Yes, but the County is entitled to have a chance to apply the 2021 ordinance. To say what, exactly? That it would allow a truck stop when it clarified the ordinance to expressly prohibit truck stops?

And what about the where's-there's-smoke vibe that this ordinance was amended to thwart Corey's use of his property, and not as some general prohibition on truck stops? No, the Eleventh Circuit held, this ordinance didn't target "precisely and only" Corey and his parcel. The truck stop ban applied to all C-2 properties in the County. We wonder how many of those other properties were suitable for truck stops. Hmmm.

All Corey needs to do to ripen a takings claim is to apply for a C-2 zoning permit, and if that doesn't work, to seek a "variance" (even though you land users know that what courts identify as a "variance" isn't even in the ballpark about what variances are about -- what courts mean is some kind of decision by the County to not apply the C-2 zoning and allow a truck stop despite the ordinance's express prohibition). 

This case is a good illustration of the tail wagging the dog nature of final decision ripeness. And dntil the Supreme Court wakes up and pays attention to what is going on, nothing is going to change.

Corey v. Rockdale County, No. 23-13097 (11th Cir. May 7, 2025) (unpub.)

Happy 97th Birthday, Nectow v. City of Cambridge!

It was on this day in 1928 when the U.S. Supreme Court issued its second most famous decision about zoning, Nectow v. City of Cambridge., 277 U.S. 183 (1928). 

We say "second" because everyone knows that the first is the Court's decision issued just two years earlier which generally upheld comprehensive use, height, and density regulations as a valid exercise of the government's police power to regulate property uses to further the public health, safety, welfare, or morals. See Village of Euclid v. Ambler Realty Co., 272 U S. 365 (1926). 

Partly because of the hype surrounding Euclid and the broad governmental embrace of exclusionary land use policies that Euclid unleashed, we think that Nectow has not received the attention it is due. After all, it should be seen as the companion case to Euclid: it was authored by same Justice who wrote Euclid (Justice Sutherland), and there's a straight line between all three parts of the Court's 1920's land use trilogy (Mahon, Euclid, and Nectow), two of which are strong reaffirmations of property rights. 

But today, Nectow is often dismissed as a byproduct of an earlier time, Lochnering of the substantive due process rational basis test, or even just too archaic to pay attention to.

But unlike Euclid, which was a facial challenge to zoning generally, Nectow was an as-applied challenge, asserting that placing some of Nectow's land in a residential zone -- and thereby causing a contract for sale of the land for non-residential uses to be cancelled -- was arbitrary and capricious. A master appointed to find facts determined the residential designation was out of sync with the mixed uses in the surrounding area. But the Supreme Judicial Court of Massachusetts took Euclid and Justice Sutherland at their word and concluded "who are we, mere judges, to question what Cambridge's zoning officials say is in the public interest?" (We're paraphrasing of course, but that was the vibe.)

But Justice Sutherland was all "hang on, pay attention to what we said in Euclid; that wasn't us telling courts to be poodles." (Paraphrasing, again):

Nevertheless, if that were all, we should not be warranted in substituting our judgment for that of the zoning authorities primarily charged with the duty and responsibility of determining the question. Zahn v. Board of Public Works, 274 U. S. 325, 328, 47 S. Ct. 594, 71 L. Ed. 1074, and cases cited. But that is not all. The governmental power to interfere by zoning regulations with the general rights of the land owner by restricting the character of his use, is not unlimited, and, other questions aside, such restriction cannot be imposed if it does not bear a substantial relation to the public health, safety, morals, or general welfare. Euclid v. Ambler Co., supra, p. 395 (47 S. Ct. 114). Here, the express finding of the master, already quoted, confirmed by the court below, is that the health, safety, convenience, and general welfare of the inhabitants of the part of the city affected will not be promoted by the disposition made by the ordinance of the locus in question. This finding of the master, after a hearing and an inspection of the entire area affected, supported, as we think it is, by other findings of fact, is determinative of the case. That the invasion of the property of plaintiff in error was serious and highly injurious is clearly established; and, since a necessary basis for the support of that invasion is wanting, the action of the zoning authorities comes within the ban of the Fourteenth Amendment and cannot be sustained.

 

So yes, zoning as a concept is within the police power, but we must keep at the forefront the core principle that property rights are to be respected. Facts, and not some vague incantation of the rational basis test should serve as the standard 

As James Metzenbaum, the lawyer who represented the Village of Euclid later wrote:

It is essential that there be kept in mind the ever-true doctrine that the owner of property does have some inalienable rights. A corollary of this doctrine is that it is the duty of the lawyer to fight for the preservation of such rights and not to permit overly zealous zoning experts who draft ordinances nor obliging Councils who pass them, to promulgate legislation which is unreasonable or which unlawfully tends toward the divestment of the property owners' constitutional rights.

See James Metzenbaum, The History of Zoning - A Thumbnail Sketch, 9 W. Res. L. Rev. 36, 42 (1957).

So here's how we see it: go ahead and zone, government (Euclid). But do it carefully: it's not carte blanche to do anything you want, and its gotta make actual sense (Nectow). And even if it does makes sense but nonetheless deprives the property owner of essential rights, you have to pay for the privilege (Mahon). 

Oh no, you say, if we revive Nectow's recognition of restraints on the police power what shall become of zoning? It doesn't mean the end, only a reasonable limits, bounded by property rights. You know what term is in the Constitution? "Private property." And what term isn't? "Police power." Sure, the term, like eminent domain, may be an inherent power and didn't need to be mentioned in the text, only limited, we suppose. But aren't we more concerned with protecting an individual's freedom to choose how to use her property, unless there's some articulable harm that can be shown, and not presumed?

After all, the whole point of government isn't primarily to ensure the public health, safety, welfare or morals, but to secure individual rights:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed

And rest easy: zoning isn't the be-all-end-all of municipal land use regulation. Especially when properly constrained by the Constitution. Professor Siegan's seminal book explains why. 

So Happy Birthday, Nectow. Ninety-seven years young and looking better each day!

New Book: "Natural Property Rights" (Eric Claeys)

The long-awaited book from lawprof Eric Claeys, "Natural Property Rights" (Cambridge Press 2025) has dropped.

More, after we've had a chance to read it.

Now mind you, in the hardcover edition the thing ain't exactly cheap (£100 GBP from Cambridge, or $130 from Amazon). But frankly, for an academic book the price isn't bad.

And if the table of contents and the sampler sections posted here, it looks like it will be well worth it.

Here's a summary of what you'll get:

Natural Property Rights presents a novel theory of property based on individual, pre-political rights. The book argues that a just system of property protects people's rights to use resources and also orders those rights consistent with natural law and the public welfare. Drawing on influential property theorists such as Grotius, Locke, Blackstone, and early American statesmen and judges, as well as recent work in in normative and analytical philosophy, the book shows how natural rights guide political and legal reasoning about property law. It examines how natural rights justify the most familiar institutions in property, including public property, ownership, the system of estates and future interests, leases, servitudes, mortgages, police regulation, and eminent domain. Thought-provoking and comprehensive, the book challenges leading contemporary justifications for property and shows how property both secures individual freedom and serves the common good.

• Justifies and rehabilitates a theory of property associated with labor, natural law, natural rights, Grotius, Locke, Blackstone, Madison, and Kent
• Outlines justifications for property that have influenced English and American society for centuries
• Familiarizes legal scholars, lawyers, and law students with how moral rights guide legal reasoning

Stay tuned. If the hardcover is too spendy, we understand a softcover is in the works.

CA2: The Harm In Home Equity Theft Takings Is Government's Retention Of Surplus Equity

A brief, but important, decision from the U.S. Court of Appeals for the Second Circuit.

In Sikorsky v. City of Newbergh, No. 23-1171 (May 2, 2025), the court held that the plaintiff adequately pleaded a regulatory takings claim which was based on Tyler v. Hennepin County, where the U.S. Supreme Court held that a government violates the Fifth Amendment if it seizes and liquidates property in order to satisfy the owner's tax debt, but "keeps the change" and retains any proceeds in excess of the tax debt.

Here, Sikorsky purchased a home but failed to pay $92,786 in taxes, and the city eventually foreclosed. The city sold the home for $250,000 more than Sikorsky owed in taxes, "but refuses to give him the surplus." Slip op. at 3. He sued, and the district court dismissed:

Two months after Tyler was decided—and seemingly without reference to it—the District Court granted the defendants’ motion to dismiss. Sikorsky, pro se, timely appealed from the judgment. While Sikorsky’s appeal was pending, and in response to Tyler, New York enacted laws that provide procedures for certain claimants to recoup surplus equity from foreclosure sales. N.Y. Real Prop. Tax Law § 1197(1); 2024 N.Y. Sess. Laws ch. 55, pt. BB § 19(1)(a), (c).

Slip op. at 5-6.

The court concluded that the post-Tyler statute did not provide Sikorsky a procedure by which to claim the surplus (and thus avoid the taking) because it only applied to cases where the home was sold after the date the Supreme Court issued the Tyler opinion (May 25, 2024). Here, the home was sold before that date.

The court also held that the complaint stated a takings claim and rejected the city's res judicata argument that two earlier suits precluded Sikorsky from asserting a takings claim now. This claim, the court held, was not ripe at the time of the earlier cases because the city had not yet wrongfully kept the surplus. Thus, his takings claim only accrued and ripened, when the city withheld the surplus:

The “general rule” is “that claims are ripe once a cause of action accrues.” Somoza v. N.Y. City Dep’t of Educ., 538 F.3d 106, 115 (2d Cir. 2008). A “claim accrues when the plaintiff knows or has reason to know of the harm.” Eagleston v. Guido, 41 F.3d 865, 871 (2d Cir. 1994) (quotation marks omitted).

This Court has yet to consider when a claim for surplus equity under Tyler accrues. We hold that the “harm” at issue is the municipality’s retention of surplus equity. As the Tyler court explained, “‘[t]o withhold the surplus from the owner would be to violate the Fifth Amendment.’” Tyler, 598 U.S. at 643 (quoting United States v. Lawton, 110 U.S. 146, 150 (1884))). In this case, that harm did not occur until the City received (and began to “retain”) the money from the sale of the property, which Sikorsky alleges occurred in June 2021. Sikorsky commenced his first state court action against the City in 2017 and his second in March 2021. Thus, both of Sikorsky’s state court actions began before his claim was ripe. Claim preclusion does not bar a claim that could not have been brought in the earlier action, so it does not bar Sikorsky’s claim here.

Slip op. at 11-12 (footnote omitted).

Dismissal vacated, case returned to the district court for adjudication on the merits.

Check it out.

Sikorsky v. City of Newburgh, No. 23-1171 (2d Cir. May 2, 2025)

ALI-CLE Webinar: Tax Consequences Of Eminent Domain (May 13, 2025)

Want to learn of some of the options available to property owners whose land is taken by eminent domain (or, even more sadly, destroyed by a disaster)?

Then you should sign up for next week's ALI-CLE webinar, "1033 Exchanges: Advanced Strategies for Optimal Tax Deferral."

Here's a description of the program:

When property is lost due to an involuntary conversion such as a taking by eminent domain, destruction by natural disaster, or theft, many clients assume they must immediately face a significant tax burden from compensation received. However, IRS §1033 provides a powerful alternative—tax-deferral through strategic reinvestment. Understanding the nuances of 1033 exchanges allows attorneys to guide clients through the process, ensuring they maximize tax benefits and rebuild wealth effectively.

Join us for this comprehensive CLE course designed to equip legal professionals with the knowledge and tools needed to navigate 1033 transactions with confidence.

With our colleagues Alan Lichtenstein and Matthew Bryant. 

Register now. 

It's The Vibe: Taking Of Condemnee's Property To Replace Property Taken From Condemnee Is A Public Use

We had to read the facts of the Tennessee Court of Appeals' opinion in City of Pigeon Forge v. RLR Investments, LLC, No. E2023-01802-COA-R3-DV (Apr. 20, 2025) a couple of times over, just to make sure we were understanding what was going on. But the effort was worth it, just because of the unusual arguments presented. Check it out.

RLR owned two adjacent properties, the first used for a hotel, the second for a duplex, parking area, and open green space. So far so good. The city took portions of each for a greenway. It also took temporary construction easements on each parcel. Check. The city sought immediate possession. Got it. The owner objected to public use and the quick take, but the trial court agreed with the city, and entered an order of possession. Understood.

Here's where it gets squirrelly. RLR, the property owner, sought to enforce the order of possession:

RLR filed a motion to enforce the terms of the Order of Possession. RLR asserted that in accordance with the Order of Possession, the City had demolished RLR’s six parking spaces on the Hotel Property to make way for the greenway. However, the City had not commenced construction of replacement parking spaces on the Duplex Property, which RLR claimed was required by the temporary construction easement granted over that tract in the Order of Possession. RLR alleged that the City was disregarding this portion of the order.

Slip op. at 4.

The city, naturally, didn't see it that way. It said that in response to RLR's earlier claims that the takings and construction of replacement parking were damaging the duplex parcel, it was standing down from the part of the project seeking temporary construction easements and replacement parking. The "C" part of the TCEs were apparently done, so the city said we don't need the TCEs any longer.

The trial court agreed with the city, concluding the order of possession did not order the city to build the replacement parking (which is not a public use or purpose), and that the public purpose of the project was to build a greenway, not to construct replacement parking. The court ordered the TCEs terminated.

Next, RLR sought summary judgment that the city had abandoned the TCE portion of the takings, and that the project lacked a public use or purpose because it was, at least in part, to take property for replacement parking, which the court -- as just noted -- concluded was not a public use. You follow so far? That's right, the owner seemed to be asserting that either the city abandoned, or alternatively that that the city's no-longer-desired taking of TCE's on its property was not a public use because it was for a private benefit: to replace the parking lost on the owner's other parcel:

RLR filed a reply, asserting that new facts had arisen since entry of the Order of Possession because during the July 2018 hearing, the City had admitted that the temporary construction easements were not for a public purpose because the replacement parking would have privately benefited RLR.

Slip op. at 5.

The court did not agree with RLR even though, in the court's words, "I don't think anybody's arguing that it [the taking for replacement parking] was proper," apparently because the city had stood down on the TCE's and the greenway project was already built. Thus, it would be "draconian" to do something. Slip op. at 5-6. (Why, we are not sure because the court never says so.)

Once more, RLR sought summary judgment, this time submitting new evidence, which it argued shed new light on the private benefit argument. This evidence:

supported the position that it was an improper use of eminent domain power to take private property to create parking spaces that would benefit other private property. RLR posited that Mr. Goodwin’s testimony indicated that the City had included replacement parking within its grant submission materials to obtain funds for the greenway project and then had not constructed the replacement parking.

Slip op. at 6.

Once again, the court's reaction was no. The taking for a greenway was a public use and purpose, and even though the city had not abandoned the TCE taking, the order of possession did not compel it to take the TCEs. This is one of those sections of the opinion that we had to read multiple times to make sure we were getting it accurately.

After the compensation phase and adjudication of the just compensation owed for the greenway takings, RLR appealed. Is posed two issues: (1) was the city's plan to take RLR's property to benefit RLR a public use or purpose; and (2) should the city be on the hook to pay statutory fees and costs because the city abandoned the TCE takings?

Skip forward to page 16 of the slip opinion for the appellate court's analysis of the public use issue. The city argued that if the order of possession required it to take RLR's other property to build replacement parking, any private benefit to RLR was "incidental to the overarching public purpose of the greenway project." Slip op. at 16.

In the end, the court agreed with the city. The greenway overall vibe of the project is what matters, not whether the city was taking RLR's property for RLR's private benefit. First, the trial court's order of possession did not, contrary to RLR's argument, require the city to build replacement parking. Accordingly, the city's only stated public use or purpose supporting the TCEs was the greenway. 

The court seemed to agree that taking RLR's property for replacement parking would have been for a private and not public use. But in the end, the court concluded that the actual purpose of the taking of the TCEs was not for replacement parking. It might have been the city's intent to do so, but after RLR objected that taking its property for parking would damage the duplex parcel, the city reconsidered and modified its plans. See slip op. at 20.

The court also rejected RLR's abandonment argument for similar reasons. The city was neither attempting to, or otherwise obligated to, take the duplex property TCEs for replacement parking. In the court's view, you can't abandon something you were never doing. 

City of Pigeon Forge v. RLR Investments, LLC, No. E2023-01802-COA-R3-DV (Tenn. App. 30, 2025)

Friends Without Special Benefits: Direct Access To Interstate Is General Benefit

Partial taking for highway project. You know what that means: severance damages. And you also know that often means a "general or special" benefits fight over how the remainder parcel may have been improved by the project, and whether these benefits can reduce the severance owed.

Before-the-project condition: undeveloped land on a frontage road with no nearby connection to the freeway. After-the-project condition: remainder property has direct freeway access, an increase in traffic to the site and easier ability to enter/exit, and curb and sidewalk improvements. The trial court concluded these specially benefited the remainder property, and could be offset against compensation.

In Utah Dep't of Transportation v. Boggess-Draper Co., LLC, No. 20220875 (May 1, 2025), the Utah Court of Appeals disagreed. In accordance with a Utah Supreme Court decision, benefits that may be used to offset compensation must be those which "affect the land itself," and increase "the actual or usable value of the land," and not just the market or saleable value." And general benefits are those which are "enjoyed by the public." Determining which category a benefit to the remainder falls in is discretionary with the trial court.

Here's how the court of appeals treated each benefit:

• Direct interstate access and increased traffic: general benefit because "'merely increased facilities for travel and transportation by the public in general' do not qualify as a special benefit because any increase in value from such improvements 'has no relation to the use of the land as land.'"
• Increase in the number of lanes: general benefit, for the same reason.
• Curb, gutter, and sidewalk improvements: special benefit, because "[t]he improvements 'affect[ed] the land itself directly and proximately' by making 'a
  large share or all of the property abutting thereon more accessible and convenient for use.'”

Slip op. at 18-19. The court concluded that this was not harmless error:

Here, we have no trouble concluding that Boggess was harmed by the district court’s error. By classifying all the benefits as special as a matter of law, the court allowed evidence that was legally incorrect and crippling to Boggess’s ability to recover severance damages. Expert testified that the project had “significantly” benefitted the Property because the price per square foot of the Property in the “before condition” ($8.75) was less than the price per square foot in the “after condition” ($12.50). He attributed the nearly four dollar per square foot increase to “the advantage of the interchange, and the traffic exposure,” and concluded that the difference between these figures demonstrated that the Property had received “a special benefit of 2.2 million dollars” from the project. By defining the interstate access increasing traffic as a special benefit, Expert improperly inflated the Property’s after-condition valuation, which created a sizeable $2.2 million offset. Without the inclusion of the general benefits, the offset would have been significantly lower, thereby creating a reasonable likelihood that Boggess would have been awarded severance damages. This error is accordingly reversible.

Slip op. at 21-22.

Utah Dep't of Transportation v. Boggess-Draper Co., LLC, No. 20220875-CA (Utah App. May 1, 2025)

SCOTUS Hat Trick? Houseboat Guy Returns For Shot At Lucas Ripeness

Here's the latest in a case we've been following.

This is Fane Lozman. You know his name. Yes, the guy who has taken on the City of Riviera Beach, Florida twice at the Supreme Court, and is now coming back for a third shot on goal. Houseboat guy. Public hearing gadfly guy. And now, maybe the ripeness guy.

Lozman has filed a cert petition asking the Court to review the Eleventh Circuit's opinion which dismissed his regulatory takings claim as unripe.

Here's the Questions Presented:

Fane Lozman has a contentious relationship with the City of Riviera Beach, Florida. The City’s mistreatment of Mr. Lozman has twice required this Court’s intervention. See Lozman v. City of Riviera Beach, 568 U.S. 115 (2013); Lozman v. City of Riviera Beach, 585 U.S. 87 (2018).

In this third chapter, Mr. Lozman was forced to sue the City because its land-use restrictions have de prived his waterfront property of all economically ben eficial use, causing a taking under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The controlling City ordinance is clear: He can use this property for “[p]rivate residential fishing or viewing plat- forms” and small “docks for non-motorized boats,” and nothing else. Yet the Eleventh Circuit held Mr. Lozman’s Lucas claim unripe. In the court’s view, because these scant private uses are permissible, Mr. Lozman must apply to the City for a “final decision” on how he can use his property.

The questions presented are:

1. Whether a claim that a local ordinance effected a regulatory taking upon enactment remains unripe until the landowner asks the local government for permission to develop his property in ways the ordinance plainly prohibits.

2. Whether a regulation that forbids any economically beneficial use causes a taking under Lucas, regardless of the property’s residual value

The petition has garnered a ton of amicus support.

The cert-stage briefing isn't quite done yet, with (presumably) Lozman's reply on the way. Then we see where this one goes.

Stay tuned.

More On That White-Tailed Deer Takings Case: Law Of Capture Subject To Public Trust

Here's more on an issue we recently covered involving Texas's "depopulation" of captive white-tailed deer in order to curb Chronic Wasting Disease. In the earlier opinion, the court held that the owner of a deer-breeding facility did not have a property interest in the deer, and thus could not assert a due process or takings claim.

The court in Young v. Texas Parks & Wildlife Dep't, No. 15-24-00052-CV (Apr. 24, 2025) reached the same conclusion. We're posting the latest opinion because it elaborates on the "ferae naturae" issue, and every law student and lawyer's old (very old) friend, the rule of capture. 

The court rejected the owner's arguments:

Comparing the facts in Tyler to those here, Young argues that the common law doctrines of ferae naturae and the rule of capture existed long before the Texas Legislature stepped in and began regulating white-tailed deer. In doing so, the Legislature “legislated away” his property rights just like Minnesota’s Legislature did when it gave the State the statutory right to retain the proceeds from the sale of real property to satisfy a delinquent tax bill. We disagree for several reasons.

....

Unlike the Minnesota law, the Texas deer breeding statutes do not regulate property in which someone has an existing vested interest (real property). They regulate a wild animal that, indulging Young’s argument, would not become a deer breeder’s property until after exercising dominion over it. That extra step to supposedly achieving a protected property interest did not exist in Tyler.

Second, we cannot accept Young’s implied invitation to ignore the historical context from which Texas’s deer breeding laws derive. Early America “welcomed the rule of capture with open arms,” but “vigorous capture rules fostered by early America’s pioneer spirit resulted in the extinction of many species in the New World and the depletion of populations of many more.” State legislatures responded by enacting legislation aimed at protecting wildlife populations, which courts upheld using a “uniquely American justification for regulation”: the public trust doctrine. Under the public trust doctrine, the State’s natural resources are held in trust for the benefit of the people. As the Third Court of Appeals explained in Bailey v. Smith, Texas “essentially codified” the doctrine in 1907 when it enacted the predecessor to Section 1.011(a) of the Parks and Wildlife Code.

....

The State’s authority to regulate wildlife as part of its police power to protect this natural resource is beyond question.

Slip op. at 7-9 (footnotes omitted).

Check it out.

Young v. Texas Parks & Wildlife Dep't, No. 15-24-00052-CV (Tex. Ct. App. Apr. 24, 2025)

Pennsylvania: "Used Together" In Larger Parcel Statute Means "One Purpose"

There's a lot of detailed legal analysis in the Pennsylvania Supreme Court (Eastern District)'s opinion in Pignetti v. Pennsylvania, No. J-11A-2024 (Apr. 25, 2025). But in the end it boiled down to a simple concept.

The case was about what property constituted the larger parcel. As the court put it, where "the condemnation of one parcel may affect the use and the value of another to such an extent that the two parcels should be valued as one." Slip op. at 1-2 (footnote omitted). In Pennsylvania, they apparently call this "plottage," but the analysis is familiar. (Think "three unities" -- or some combination thereof.)

The Pennsylvania Legislature codified what in a lot of other jurisdictions is a common law doctrine. The statute provides:

Where all or a part of several contiguous tracts in substantially identical ownership is condemned or a part of several noncontiguous tracts in substantially identical ownership which are used together for a unified purpose is condemned, damages shall be assessed as if the tracts were one parcel.

26 Pa. C.S. § 705.

In this case the DOT condemned a portion of Parcel 44 and all of 45. Mr. and Mrs. Pignetti owned 44, while Mr. Pignetti alone owned 45. The parcels do not actually touch, because a small "unoccupied and unused sliver of land no more than several square feet in area" separates them. Slip op. at 3. The Pignettis, however, asserted they used 44 and 45 together, to store equipment and trucks for their electrical business. Thus, they argued, the two parcels should be treated as one under the statute.

After taking evidence, the trial court agreed. Slip op. at 5 ("The trial court then determined that the Parcels has substantially identical ownership and that the Pignettis used the Parcels together for a unified purpose."). But the Commonwealth Court (Pennsylvania's appellate court) reversed, holding that the statute merely codified existing case law, and thus must be "so inseparably connected in the use to which they are applied as that the injury or destruction of one must necessarily and permanently injure the other." Slip op. at 6. "Sameness" of purpose of the use isn't the standard, and the evidence merely established that the Pignetties parked vehicles for their business on both lots, and did not provide evidence about how the effects of one parcel's use on the other, or that they were "inseparably connected" by their mutual use. Slip op. at 8.

If the appellate court's analysis and conclusion has you scratching your head for the actual difference, you are not alone. The Pennsylvania Supreme Court took up the issue, and concluded the Pignettis have the better of it.

The court's analysis starts off where all statutory cases should start off -- with the language of the statute. The statute says "used together for a unified purpose[.]" Slip op. at 14. And storing vehicles and equipment for the family business on both parcels qualifies.

"Together" is the critical terms, and the court started by asking whether dictionary definitions help give more meaning to that word. But it came to the conclusion that no, checking Webster's doesn't advance the ball at all, because the definition of "together" loops you back into other, similar words: "Together is a more or less irreducible word, and one with a manifestly familiar meaning." Slip op. at 16. We don't need any dictionary to tell us what "together" means:

Two tracts are "used together" when they are used together.

Id. When you say it that way, Your Honors...

The court concluded:

If our account is consonant with a plain-language approach, then the case becomes easy. The lots, separated by a few paces, are used together for the one purpose of storing vehicles and equipment in service of Mr. Pignetti’s business. To say more is to complicate a straightforward matter, and to do so unnecessarily.

Slip op. at 17.

Game over, the Pignettis win the day. Lesson here: don't overthink things; sometimes a cigar is just a cigar. 

One Justice dissented, because that, "[i]n my mind, the phrase 'used together for a unified purpose' ultimately connotes something more than simply 'used in furtherance of a shared enterprise.'" Dissent at 1-2.

Pignetti v. Pennsylvania, No. J-11A-2024 (Pa. E.D. Apr. 25, 2025)

Cal Supreme Court Reviewing Necessity Challenge To Public Utility Takeover

The California Supreme Court has agreed to review and resolve a lower (California) court split regarding the standard of review a court should apply in challenges to a government taking of a privately-owned public utility.

In Town of Apple Valley v. Apple Valley Ranchos Water, No. E078348M (Feb. 13, 2025), the California Court of Appeal held that when a privately-owner public utility objects under the California Eminent Domain Code to the public use of a governmental takeover of the utility, the court must review the Resolution of Necessity with extreme deference (gross abuse of discretion). This means the reviewing court starts off with the presumption that the resolution is valid and its conclusions are true, and that no additional evidence may be considered to counter that conclusion.

One other Court of Appeal held otherwise, and the California Supreme Court agreed to resolve the divergence of analysis. Here's the Petition for Review.

Here is the question the Supreme Court agreed to review:

When a public entity files an eminent domain action seeking to take privately held public utility property, and the owner objects to the right to take, what is the proper standard of judicial review for the trial court to apply to determine whether the property owner has rebutted the presumptions under Code of Civil Procedure sections 1245.250, subdivision (b) and 1240.650, subdivision (c)?

Note: the issue here is how the a court reviews such challenges under the statutory scheme, and not as a matter of constitutional law.

Stay tuned.

Town of Apple Valley v. Apple Valley Ranchos Water, No. E078348M (Cal. App. Feb. 13, 2025)

New Report: "How to Protect Property Rights from Improperly Assessed Exactions" (Sweetland & Hodges)

Check out the new report by our Pacific Legal Foundation colleagues Kyle Sweetland and Brian Hodges, "How to Protect Property Rights from Improperly Assessed Exactions" (Apr. 2025).

This research in brief shows how exactions grew and increased home construction costs over a 16-year period. It provides a history of exactions, showing how they have frequently moved away from their original impact-mitigation purpose and how that shift in purpose risks violating the Constitution. It illustrates an improperly assessed exaction and provides examples of how exactions have hampered construction during the present housing crisis. It concludes by examining how state legislatures can help set boundaries on local exactions and protect property rights.

It's short, its sweet, it's straightforward and understandable. What more could you want? Oh yeah, unlike exactions ... it's free. No strings attached. Check it out.

Sweetland & Hodges, How to Protect Property Rights from Improperly Assessed Exactions (Pac. Legal Found. Ap...

CA6: The Predeprivation Hearing Required By Due Process Can't Just Exist On Paper (And An Informal, And Possibly Made-Up Chance To Negotiate Isn't Enough)

We've had this one in our queue for a bit, but it seems now is a good time to lay out the U.S. Court of Appeals for the Sixth Circuit's opinion in McIntosh v. Madisonville, No. 24-5383 (Jan. 21, 2025). After all, the Due Process Clause seems to be in the news a lot lately, and this case explains what process is due property owners before they are deprived of that property.

Here's the story. The city, after a code enforcement officer's inspection (responding to a tenant complaint) declared that one of McIntosh's mobile homes had mold and deemed it unsafe and unsalvageable. Letter followed notifying the owner of the city's condemnation of the property, advising him that he had 30 days to submit plans for getting things in order, or else the city was going to tear it down. The city also put notice on the property itself. Both sides agree that the owner got these notices, and that he wrote back.

But that's about all they agreed on. What followed seems like a pretty typical scenario, where the owner claims to have made efforts, all of which were fruitless. McIntosh says he tried to contact city officials, but got no responses except for if he "didn't like [the decision], sue them." Slip op. at 3. Another call got a similar response: "When Mr. McIntosh again called Wallace’s office about his letter, Phillips told him: 'We do not care what your letter said . . . I’m going to tear that house down.'" Slip op. at 4. Apparently, the owner checked the city's code which said that if you disagreed with a decision like this you must administratively appeal to the City Board of Adjustment.  Problem is, the city's doesn't have a Board of Adjustment. The owner also asserted that no inspector ever came back to see whether his repairs were satisfactory.

The city said otherwise: no, the owner didn't contact us; we offered to work with this fellow; we did reinspect the property but found only minor, cosmetic repairs. Pretty wide gap in those stories. But a "month after the initial condemnation, the time for demolition arrived." Id.

Next up, a state court § 1983 due process claim and a state law claim for trespass. The city removed and sought summary judgment: we provided enough notice and an opportunity to be heard. The district court granted the motion, concluding that the city had done enough. 

The Sixth Circuit reversed. First, it agreed with the district court that McIntosh got enough predeprivation notice to tell him that something was up, and that he better respond. Slip op. at 5. Notice doesn't need to be all that specific, and here it wasn't. And there doesn't need to be some kind of roadmap to what to do next if the next stop is a courtroom. [Barista's note: this analysis is consistent with those cases where the courts hold that if a property owner is going to be required to chase administrative procedures, the government should provide a roadmap.]

But what about a predeprivation hearing of some kind? Here, the court agreed with the owner. There wasn't an emergency, so a hearing was required. Yes, what form that hearing took may not be fixed but "some kind of hearing" is an "imperative." Slip op. at 6. Here, the "key problem is that the City Code says that property owners have a right to a hearing before the Local Appeals board over a grievance against 'any decision of the Building Inspector[.]'" Slip op. at 7. And as we noted above, the city doesn't have an Appeals Board. Yeah, we meant to get around to it, but ultimately decided that our informal process was enough:

While Wallace agreed that § 150.13 “does call for an appeals council or appeals board for appealing any” of his decisions, he insisted that the City did not have one. R.24-6 at 10. When pressed about this deviation from the municipal code, Wallace explained that city officials have considered setting one up but concluded it “didn’t feel . . . necessary” given other, more informal means of disputing a condemnation. R.24-6 at 10. This could be why, when Mr. McIntosh asked an employee of Wallace’s office how to appeal (albeit, to what he called the “Board of Adjustment”), she told Mr. McIntosh that no such board existed. R.24-5 at 10. Wallace’s certainty that no board existed and his employee’s response to the McIntoshes’ inquiry along the same lines would permit a reasonable juror to characterize the City’s statutory promise of a hearing as illusory.

Id.

But who needs compliance with the law, the city argued. Everyone knows that's not the way we do things around here. We have "less formal opportunities for a pre-deprivation hearing[.]" Id. Shame on McIntosh for not knowing about this and for not "sitting down" with us for a "conversation." Id.

The court was as incredulous at this as you might expect.

Let us assume for the sake of argument that this option—not mentioned in the City’s generally applicable laws—constitutes an adequate chance to be heard. Problems remain even still. The only evidence of such a policy arises from Wallace’s testimony, not a provision in the City’s Code. Unlike appeals processes engrained in statutes, this “procedure, if it existed at all, depended on the vagaries of word of mouth referral,” creating the imperative that the City tell the McIntoshes about this opportunity. Memphis Light, 436 U.S. at 14 n.14 (quotation omitted); see Palmer, 479 F.2d at 168 (rejecting the claim that “the mere theoretical possibility of informal resolution” with company figures—a possibility unknown to customers—meets due process standards). Yet neither the condemnation flyer nor its related letter nor the statements of any official conveyed to the McIntoshes the opportunity to speak with Wallace and the City Attorney about the proposed demolition. Making matters worse, none of those sources ever informed the McIntoshes precisely what provisions of the municipal code their unit violated—and had to be repaired. A reasonable juror could find that no such policy existed or that, even if it did, the City never told the property owners about it.

Slip op. at 7-8.

At bottom, there was a factual dispute about what the owner knew about this, so the court held it was wrong to enter summary judgment while those facts remained in dispute.

By the way, the owner's due process claim was not limited to procedural due process. He also challenged the city's condemnation as arbitrary and capricious. You can guess how well that went. This is a "routine" exercise of police power and the city "condemned the home due to its mold, moisture, and structural weaknessess[.]" Slip op. at 9. District court's summary judgment on substantive due process affirmed.

McIntosh v. City of Madisonville, No. 24-5383 (6th Cir. Jan. 21, 2025)