July 2013

Remember that “audacious” case filed in the Court of Federal Claims by überlawyer David Boies on behalf of Starr International seeking $35 billion in just compensation for the federal takeover of AIG?

Well, it’s moving along, and apparently is in discovery (every lawyer’s favorite part of the case). Boies sought the deposition testimony of Fed Chair Ben Bernanke about his “personal involvement in the Government’s decision to bail out American International Group, Inc. (‘AIG’) in September 2008, and his knowledge of the specific governmental actions taken to implement the bailout.” Mr. Bernanke didn’t want to testify, claiming that as a “high-level government official,” the plaintiffs had to show that the information sought was not merely relevant under the usual discovery rules, but essential to the case, not not obtainable elsewhere. I’ve got better things to do, so stop bothering me and get this information from someone else, argued…

Continue Reading Fed Chair Bernanke Must Testify In AIG Takings Case

Here’s what we’re reading today:

  • Our Owners’ Counsel colleague from New Jersey, Anthony Della Pelle, has posted some thoughts on the New Jersey Supreme Court’s recent decision in Borough of Harvey Cedars v. Karan, No. 070512 (July 8, 2013). That’s the case about valuation issues when there’s a partial taking of littoral property in order to erect protective dunes. Tony’s thoughts are well worth reading. 
  • In that vein, on Wednesday, August 14, 2013, starting at noon ET, we’ll be joining Tony and other experts to speak at the New Jersey Institute for Continuing Legal Education’s teleseminar on “Eminent Domain and Regulatory Takings:

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Continue Reading Wednesday Round-Up: Koontz Recording, Jersey Shore Dunes, Plastic Bag Bans

Update: Here’s more from the San Francisco Chronicle. As you read this and other stories on the issue, this begins to take on an “occupy” tone and a let’s-stick-it-to-the greedy-lenders flavor. Not a good sign for a considered use of eminent domain.

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Like a visiting relative, the proposal to use eminent domain to condemn underwater mortgages just won’t seem to go away. First attempted in large jurisdictions like San Bernardino County, it initially looked like the idea was petering out.

But now it seems like the idea has found traction in smaller municipalities that appear to be equally desperate such as North Las Vegas, and now Richmond, California, which appears on the brink of using its eminent domain power to take mortgages if the lenders don’t take the city’s offer to purchase. See “A City Works to Save Homes By Invoking …

Continue Reading Hey Look, Free Money!

What’s this, a federal court actually allowing a federal Fifth Amendment claim to be litigated in federal court? Why that’s as rare as hen’s teeth, although it shouldn’t be. 

That’s the ruling of the Fourth Circuit in Sansotta v. Town of Nags Head, No. 12-1538 (July 25, 2013), which reversed the district court’s dismissal of a takings claim under Williamson County. The court of appeals held that the Town’s removal of the case to federal court waived the state litigation Williamson County defense. Other courts have rejected the same tactic (property owner does what Williamson County requires and files its takings claim in state court, only to have the government remove the case to federal court under College of Surgeons, and then argue that the federal court should dismiss the case under Williamson County), but it’s nice to see a U.S. Court of Appeals…

Continue Reading 4th Cir: Town Waived Williamson County State Court Defense By Removing Case To Federal Court

 Babe1

Did you know that in 2002, the voters of Florida adopted a “pregnant pig” amendment to the state’s constitution? Well, neither did we. The amendment, effective in 2008, makes it unlawful for “any person to confine a pig during pregnancy in an enclosure, or to tether a pig during pregnancy, on a firm in such a way that she is prevented from turning around freely.”

Farmer Basford’s pig farm used such “gestation crates,” and he was forced by the amendment to go out of business. He tried other things like peanut farming, but those didn’t work, so in 2010, he filed an inverse condemnation claim and a claim under Florida’s Bert Harris Act, arguing that the pig amendment deprived him of all economically viable use of his far. The trial court dismissed the Bert Harris Act claim, and after a trial, held that he was entitled to $505,000…

Continue Reading Fla App: “Pregnant Pig” Constitutional Amendment Took Farmer’s Property

Here’s one for your civil procedure mavens. In TrinCo Investment Co. v. United States, No. 2012-5130 (July 18, 2013), the Federal Circuit reversed the Court of Federal Claims’ dismissal for failure to state a claim of two California property owners’ takings lawsuit.

The case involved the federal government’s response to the “Iron Complex” fires in Northern California. According to the complaint, the Forest Service intentionally lit fires on the plaintiffs’ properties in order to reduce unburned timber which might fuel the Iron Complex fire. The Forest Service fires destroyed hundreds of acres of timber, valued at approximately $6.6 million. The plaintiffs claimed that the Iron Complex fire would not have burned their land, and sued in the CFC for compensation for the taking. The CFC dismissed, holding that it was not plausible under Rule 12(b)(6) that this was a taking, because the “doctrine of necessity” absolved the Forest Service…

Continue Reading Fed Cir: Invoking “Doctrine Of “Necessity” Does Not Automatically Absolve Forest Service For Taking Of Timber

Here’s the amicus brief of Atlantic Legal Foundation which urges the Supreme Court to review the Fifth Circuit’s decision in United States v. 0.073 Acres of Land, 705 F.3d 540 (5th Cir. 2013).

That’s the case in which the Fifth Circuit held that the association’s right to collect maintenance fees, recognized as property under Louisiana law, was not “compensable property” in an eminent domain action. The court held concluded that the “consequential loss rule” governed, and thus the property interest, although taken, was not compensable because the right to collect assessments was like a business loss and a frustrated contract.

The Association filed a cert petition and was supported by several lawprofs.

ALF’s amicus brief argues:

The decision of the Fifth Circuit below raises the question whether the Takings Clause requires the government to compensate private parties for the lost value of real covenants associated with land it…

Continue Reading One More Amicus Brief In Condo-Assessments-As-Property Case

Remember that decision by the California Court of Appeal which held that the City of San Jose’s “inclusionary housing” exaction was subject only to low-level scrutiny and not the nexus-and-proportionality requirment?

Well, after Koontz, you should not be surprised that the decision has been taken to the next higher level and the California Building Industry Association has petitioned the California Supreme Court to review the case. The petition points out that the lower California courts have reached different conclusions when considering nearly identical ordinances (see here, for example):

Building Industry Association of Central California v. City of Patterson, 171 Cal. App. 4th 886, 898 (2009), holds that San Remo Hotel applies to inclusionary housing ordinances. The Opinion of the court below holds that San Remo Hotel does not apply to such ordinances. These two published decisions deal with materially identical inclusionary housing ordinances, and so cannot be…

Continue Reading First Post-Koontz Case: City’s “Inclusionary Housing” Exaction Challenged In California Supreme Court

Here’s the latest from the Wisconsin Supreme Court. In Waller v. American Transmission Co., LLC, No. 2013AP805 (July 16, 2013), the court held that when a partial taking for an easement for transmission lines substantially impaired the economic viability of the remnant parcel, the condemnor is liable for taking the entire parcel.

Gideon Kanner summarizes the opinion in “When Must the Condemnor Take the Whole Parcel, Even Though it Wants to Take Only a Part of It?” (“So we won’t go through the whole megillah in anything resembling detail. But the court’s bottom line is clear: the condemnor — in this case a public utility seeking to take an easement — must take the entire larger parcel and pay for it when the owner so wishes and in the after condition the property, if subjected only to a partial taking, would wind up in an uneconomic condition.”).…

Continue Reading Wisconsin: You Broke It, You Bought It