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Mass SJC: State Requiring Municipalities To Adopt Multi-Family Zoning Is Enforceable By AG...But

The only courthouse we know where the Supreme Court
is below the Court of Appeals (SJC on the second floor,
appellate court on the third)

A brief one from the Supreme Judicial Court of Massachusetts.

In Attorney General v. Town of Milton, No. SJC-13580 (Jan. 8, 2025), the court rejected a challenge to a state statue which allowed the Massachusetts Bay Transportation Authority, the public transit authority in the Boston area, to require municipalities which access the T loosen their zoning regimes to "provide for at least one district of multifamily housing 'as of right' near their local MTBA facilities." Slip op. at 3. One town declined to do so, and the state AG sued to enforce the statute.

The town responded by challenging the statute's validity and the AG's authority to sue to enforce it. Yes on both counts held the SJC. But (and there's a big "but" here, see below)...

As a question of statutory and state constitutional interpretation, this case is mostly of local interest (see the extensive list of amici briefs filed at footnote 2, for example), but us non-Bay Staters may still find some wicked smaht stuff, especially as states nationwide are similarly employing what we call "cram-down" Dillon Ruley strategies to force slow-moving municipalities to get off the dime and loosen their development and zoning regimes to allow more housing (most notably in California).

The court first rejected the argument that the state requiring municipalities to do things violates the state constitution's separation of powers doctrine. You sep-of-powers mavens understand that Massachusetts (led by John Adams) was the first jurisdiction to write down in its constitution the notion that power should be distributed, with the various branches being pushed-and-pulled against each other. That principle manifests in the general notion that the legislature cannot delegate its power to make laws (something land users are familiar with). See pages 10-13 of the slip opinion for the court's analysis supporting its conclusion that no, this was not an illegal delegation from the legislature to the MTBA.

The court also concluded that the AG has the authority to sue in equity to enforce, notwithstanding the fact that the statute does not expressly charge the AG with this power. See slip op. at 15 ("But the Attorney General's enforcement power is not dependent upon whether a particular statute happens to reference it."). If it is in the public interest to enforce a law, the AG can sue.

But (and here's where we get to that "but" we referenced earlier), it turns out that the guidelines promulgated by MTBA on how to implement the statute were not properly adopted under the rulemaking requirements of the Massachusetts Administrative Procedures Act. Do it again and don't do anything until you do, held the court. Slip op. at 22 ("Because HLC failed to comply with the APA, HLC's guidelines are legally ineffective and must be repromulgated in accordance with G. L. c. 30A, § 3, before they may be enforced."). Who says that courts are oblivious to politics?

Attorney General v. Town of Milton, No. SJC-13580 (Mass. Jan. 8, 2025)

Hawaii Supreme Court Arguments: Is Just Compensation For Even A Small Slice Of A Primo Hawaii Beach Zero?

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

As we previously noted, the Hawaii court of appeals affirmed a trial verdict that the just compensation owed to littoral property owners for the State's regulatory taking of small portions of accreted beach is zero.

Last week, the Hawaii Supreme Court heard oral arguments. Here's the video (sorry, can't embed it here). Worth watching, if only because questions of just compensation and how it is calculated rarely are presented to this court (which is a frequent flyer in regulatory takings cases).

Here's a description of the case and issues from the Hawaii Judiciary:

Petitioners Maunalua Bay Beach Ohana 28, Maunalua Bay Beach Ohana 29, and Maunalua Bay Beach Ohana 38 brought an inverse condemnation action against the State of Hawai‘i in 2005. At that time, they argued that the State effected a taking of accreted lands via Act 73 of 2005. In 2009, the Intermediate Court of Appeals (ICA) held that Act 73 “effectuated a permanent taking of littoral owners’ ownership rights to existing accretions to the owners’ oceanfront properties that had not been registered or recorded or made the subject of a then-pending quiet-title lawsuit or petition to register the accretions.” Maunalua Bay Beach Ohana 28 v. State, 122 Hawai‘i 34, 57, 222 P.3d 441, 464 (Ct. App. 2009).

On remand from the ICA, Petitioners sought just compensation for the alleged temporary taking of their accreted lands between 2005 and 2012. At trial, the circuit court concluded that $0 was just compensation for the alleged temporary taking of the accreted land and no nominal damages should be awarded to the petitioners. It also determined that the petitioners were not entitled to attorney’s fees.

The ICA affirmed the circuit court’s decision. With regard to attorney’s fees, the ICA held that the petitioners’ “claim for attorneys fees against the State for obtaining declaratory relief is barred by sovereign immunity.” The ICA further held that the Ohanas were not entitled to attorney’s fees under the private attorney general doctrine.

In their application for certiorari, the petitioners argue that the ICA erred in affirming the circuit court’s award of $0 in just compensation with no nominal or severance damages. Petitioners also contend that the ICA erred by concluding that sovereign immunity bars an award of attorney’s fees, and that they would not be entitled to fees under private attorney general doctrine. The State contends that the ICA did not err in affirming the circuit court’s award of $0 in just compensation or declining to award nominal damages to petitioners. It also argues that the ICA correctly held that sovereign immunity bars petitioners’ claim for attorney’s fees, and that even if it did not, petitioners would not be entitled to attorney’s fees under the private attorney general doctrine.

We watched live, and have a couple of thoughts:

• Justice McKenna's questions indicate she recalls that in an earlier regulatory takings case, the court concluded that even "speculation value" was enough to place a regulatory takings claim outside a Lucas wipeout analysis, an indicator that in this court's view, property always has value, even if it has no use. Is that enough to say the owners here were entitled to, at the very least, nominal just compensation?
• Does obtaining a decision holding the State to its constitutional obligation (after which the State repeals the unconstitutional statute) qualify the plaintiff for fee recovery from the State under the private attorney general doctrine, even where the adjudicated compensation is zero? We think so, because suing to keep the State in line when it has acted beyond its authority is exactly the kind of thing that the Attorney General should do (but didn't here, because it has been too busy defending the State's action). What about the advocate for the State who argued that there was no constitutional wrong here, because of the zero compensation verdict (the notion that the Takings Clause does not prohibit takings, only uncompensated takings)? The fact that the State withdrew the offending statute after the plaintiffs won the takings claim seems to contradict that argument because at the heart of it, the court ruled that the State should have used its eminent domain power to take future accreted land, and not the police power.

Stay tuned. We'll continue to follow along and will post the court's opinion when issued.

New Cert Petition: SWAT Takings, Part X

Here's the latest in a case (and issue) we've been following.

In this latest iteration of what we call the "SWAT takings" issue, the Sixth Circuit, like every other federal appellate court, denied the owner of property severely damaged in the course of a police dislodging of a criminal suspect. But the court applied a different analysis. Instead of (incorrectly, we think) looking and whether the police were acting with the scope of their (ha!) police power, the court concluded that the police had a "privilege" to enter, so thus could destroy in the course of that entry, the petitioner's property.

In short, your bundle of sticks never included the right to exclude the po-po.

Here's the Question Presented:

A few weeks ago, this Court denied certiorari in Baker v. City of McKinney, 23-1363, a case about whether the Fifth Amendment’s Takings Clause re-quires compensation when a SWAT team destroys an innocent person’s property while pursuing a fugitive. The Fifth Circuit had held that there is an implicit exception to the Takings Clause when the govern-ment’s actions were “objectively necessary.”

In a statement respecting the denial of certiorari, Justice Sotomayor, joined by Justice Gorsuch, wrote that “[w]hether any such exception exists (and how the Takings Clause applies when the government destroys property pursuant to its police power) is an important and complex question that would benefit from further percolation in the lower courts prior to this Court’s intervention.” Baker, No. 23-1363, 2024 WL 4874818, at *2 (U.S. Nov. 25, 2024).

The facts of the present case are materially identical to Baker, but the Sixth Circuit panel below denied compensation on different grounds: Because the Slaybaughs had no legal right to exclude the police, the panel reasoned, the destruction of their house was not actually a deprivation of their property rights. In sup-port of this conclusion, the panel relied on dicta from Cedar Point Nursery v. Hassid, where this Court noted that lawful searches do not “appropriate” an owner’s traditional right to exclude others from his or her property.

The question presented is: “Does a common law privilege to access property categorically absolve the government’s duty of just compensation for property it physically destroys?

The way the QP is framed to us implicates state precondemnation entry statutes under which condemnors may enter private property against the will of the owner to evaluate the property for future acquisition, but is not excused from takings liability for just compensation when that entry is more than minimal and innocuous.

Follow along on the Court's docket here, and stay tuned, with fingers crossed.

Petition for a Writ of Certiorari, Slaybaugh v. Rutherford County, No. 24-755 (U.S. Jan. 16, 2025)

Cal SCt Petition: Does "Existing Structures" Protected By The California Coastal Act Mean Only Those Existing In 1977?

You remember 1977, don't you? No? Well surely you must know the soundtrack. Sublime and deeply resonant music, accompanied by complex-yet-meaningful lyrics like these:

I'm your boogie man, that's what I am.
I'm here to do whatever I can.
Be it early morning, late afternoon.
Or at midnight, it's never too soon.

To wanna please you, to wanna keep you.
To wanna do it all, all for you.
I wanna be your, be your rubber ball.
I wanna be the one you love most of all, oh, yeah.

I'm your boogie man
I'm your boogie man, turn me on.

We dig it. After all, we there, tuning in on AM radio at a time when disco dominated, before it fell from grace and then became hip again.

Well dust off your 1977 vibes. The year Elvis left the building for good, when Star Wars was just "Star Wars" and not yet footnoted with "A New Hope," when Hutch (not Starsky) charted a Number 1 hit, when we all had a fever on Saturday Night (unless New York City lost power), and the word "shopaholic" first appeared in print -- could be back again.

At least if the California Supreme Court agrees to review a recently-filed Petition for Review in which coastal property owners are asking the court to bring some clarity to the California Coastal Act of 1976 (for that is its official name), which became effective in ... you guessed it, 1977. January 1 of that year to be precise.

In the petition, coastal property owners are asking the court to bring some clarity to a provision in the Coastal Act which requires approval of seawalls when they are required to protect "existing structures" (among other things):

30235. Revetments, breakwaters, groins, harbor channels, seawalls, cliff retaining walls, and other such construction that alters natural shoreline processes shall be permitted when required to serve coastal-dependent uses or to protect existing structures or public beaches in danger from erosion and when designed to eliminate or mitigate adverse impacts on local shoreline sand supply. Existing marine structures causing water stagnation contributing to pollution problems and fishkills should be phased out or upgraded where feasible.

Cal. Pub. Res. Code § 30235. Seems straightforward enough. 

But what does this statute have to do with 1977, you ask? In this case, the question is what does "existing structure" mean -- existing at the time an owner seeks a Coastal Permit to protect a structure in danger of erosion? Makes sense, because one of the upfront purposes of the Coastal Act is to "protect ... private property."

Or does "existing structures" mean, as the Coastal Commission argues, only those structures "existing" at the time the Coastal Act went into effect, January 1, 1977? If you are asking whether the California Legislature really intend to freeze 1977 in amber, and allow the owners only of structures which existed on January 1 of that year to be protected as of right from allowing their property to fall into the ocean, you'd be like a lot of us asking the same thing. After all, "existing in 1977" is a pretty tough interpretation to swallow. But exactly what the Court of Appeal decided.

Here's the issue presented as framed by the Petition:

STATUTORY INTERPRETATION QUESTION OF FIRST IMPRESSION PRESENTED FOR REVIEW

Whether the Coastal Act’s right to build a seawall to protect private or public property under Public Resources Code § 30235 is limited to structures that existed at the time that the Coastal Act was enacted on January 1, 1977, or extends to all structures “in danger from erosion”?

The long and short of it is that even if the statutory language could be interpreted ambiguously (and what statutory language could not, if you worked hard enough to find ambiguity), then why doesn't one of the Coastal Act's primary purposes -- the "protection of private property" resolve any ambiguity in favor of protecting private property? Could the Legislature really only have meant in the Coastal Act's very first section to care only about then-existing private property?

It's right there, front-and-center in the Coastal Act: before getting to the part that most focus on when dealing with the Act -- favoring nonuse over everything else -- the legislature established the Act's foremost purposes:

The Legislature hereby finds and declares:

(a) That the California coastal zone is a distinct and valuable natural resource of vital and enduring interest to all the people and exists as a delicately balanced ecosystem.

(b) That the permanent protection of the state's natural and scenic resources is a paramount concern to present and future residents of the state and nation.

(c) That to promote the public safety, health, and welfare, and to protect public and private property, wildlife, marine fisheries, and other ocean resources, and the natural environment, it is necessary to protect the ecological balance of the coastal zone and prevent its deterioration and destruction.

(d) That existing developed uses, and future developments that are carefully planned and developed consistent with the policies of this division, are essential to the economic and social well-being of the people of this state and especially to working persons employed within the coastal zone.

Cal. Pub. Res. Code. § 30001.

That's right folks, one of the paramount purposes of the California Coastal Act is to "protect ... private property."

Who knew? You almost certainly would not have guessed so if you were to skip reading the Act, and only look at the way the Act is interpreted and applied in this case and many others. Protecting private property doesn't seem to play a big role in how the coastalcrats (sorry, the California Coastal Commission) apply the statute. 

Perhaps in this case, we shall see. Follow along here, or on the California Supreme Court's docket.

Hey, Coastal Commission, I'm your Boogie Man.

Petition for Review, Casa Mira Homeowners Ass'n v. Cal. Coastal Comm'n, No. S288855 (Cal. Jan. 16, 2025)

CA4: Challenge Public Use/Pretext Under Due Process And § 1983, Not Inverse

The facts in D.A. Realestate Inv., LLC v. City of Norfolk, No. 23-1863 (Jan. 16, 2025), a recent decision from the U.S. Court of Appeals for the Fourth Circuit, are fairly sympathetic. And the opinion starts off with a tantalizing quote:

In 1761, Massachusetts lawyer James Otis exclaimed “one of the most essential branches of English liberty is the freedom of one’s house. A man’s house is his castle.” John Adams’s Reconstruction of Otis’s Speech in the Writs of Assistance Case, in Collected Political Writings of James Otis 12–13 (Richard Samuelson, ed. 2015). American law has embraced that principle since our nation’s founding. U.S. Const. amend. V. But we have also long recognized that “all property in this country is held under the implied obligation that the owner’s use of it shall not be injurious to the community.” Mugler v. Kansas, 123 U.S. 623, 665 (1887).

Slip op. at 3.

But still no succor from the court.

While an active-duty sailor was deployed, the city determined his property was uninhabitable. It sent and posted notices, but the mailed notices were returned to sender. A few months later, the city tried again. After returning from deployment, the owner did some maintenance, but didn't directly respond to the city's determination the property was uninhabitable (the record doesn't reveal whether the owner knew of the determination).

And the next year, the Navy deployed the owner again for a short time. Upon his return he "saw a faded notice posted to the house[,]" after which he contacted the city. Slip op. at 6. But that apparently went nowhere, and "[i]n June 2018, the city prepared another notice of violation letter[,]" that gave the owner 30 days to remediate, or else the city would demolish it. Slip op. at 7. No response. At the end of 2018, the city tore down the building.

Three years later, the owner sued for, inter alia, due process, a federal taking, and a Virginia-law inverse condemnation claim. The district court granted the city summary judgment.

The owner appealed to the Fourth Circuit, but limited the issue to to whether the Virginia inverse claim was subject to disputed facts, and abandoned appeal of the federal claims. Slip op. at 10 ("Thus, the only issue before us is whether Fox showed any genuine dispute of material fact related to his Virginia inverse condemnation claim."). In other words, a federal appeals court was going to be weighing in solely on a state law issue, and even then only on the relatively narrow question of whether the owner had pointed to evidence sufficient to meet his minimal burden of production on summary judgment (not persuasion).

That, and the fact that the resulting opinion is published, should give you some clue that any truly interesting insight this was going to produce might lie in the dicta. We'll get to that intriguing dicta in a moment, but first the holding (affirmed).

The court began by noting:

When this collision [the tension between using your property how you like versus the obligation not to use it in a way that harms others] occurs in Virginia, the government has two options. It can abate a public nuisance without paying compensation. Or it can exercise its right of eminent domain based on the public use of blight elimination. In the latter situation, the government may acquire title to the property, but it must pay the owner just compensation.

Slip op. at 3.

The owner claimed that there's a factual dispute regarding whether his property was a nuisance, and that a jury alone can make that determination. The court rejected the argument, first because he had a chance to challenge the city's administrative determination that the property was a nuisance, and he failed to use the city's appeal process to chase that down. The second, and more important reason was that it is not material under Virginia law whether or not the house was a nuisance. The court noted that Virginia caselaw treats nuisance abatement as an exercise of police power exempt from the obligation to provide just compensation. So it it was a nuisance, no inverse liability.

And if it wasn't a nuisance, then the destruction was ultra vires; an essential element of a Virginia inverse claim is proof that the taking was for a public use:

As a result, if Fox is right that the house posed no danger to public health or safety, he’s correct that it is not a nuisance under Virginia law. But for the same reason, it did not constitute blight. See id. § 1-219.1(B). And since eliminating blight is the only potentially applicable public use here, Fox cannot show the “public use” element of an inverse condemnation claim. See AGCS, 800 S.E.2d at 163 (“Inverse condemnation permits recovery only when property is taken or damaged for public use.” (internal quotation omitted)). In sum, whether the house constituted a nuisance is immaterial—Fox’s inverse condemnation claim fails whether the answer is yes or no.

Slip op. at 14-15 (footnotes omitted). 

Next, the court rejected the owner's argument "that a jury must resolve whether the city pretextually stated a purpose of blight elimination or nuisance abatement." Slip op. at 15. The owner had raised vague allegations that the real reason for the demolition of the house was not that it was blighted, but because Norfolk wanted to free up the site for redevelopment. The court held this claim was not supported by any evidence to meet the owner's Rule 56 burden. See slip op. at 17. Game over.

Now, here's the useful dicta in the case. The court noted that it was not saying that these type of circumstances can never present a claim. It recognized that the pretext situation could be pressed in several ways. First, the owner might have administratively appealed the nuisance determination. Or "he could have brought at timely § 1983 due process claim for an unlawful taking." Slip op. at 16 (citations omitted).

Take that last one and keep it in your file for future deployment.

D.A. Realestate Inv., LLC v. City of Norfolk, No. 23-1863 (4th Cir. Jan. 16, 2025)

New Cert Petition: To Have A Nollan-Dolan-Koontz Claim, Must You Be Forced To Give Up Land And Money?

Here's a recently-filed cert petition to watch. We won't go into the background, because the Questions Presented pretty much lay the foundation:

Respondent County of San Diego, et al. (County), a California land use agency, denied the land use permits for Village Communities et al. (Village) to develop a much-needed residential and mixed-use community in North San Diego County, California. The County denied the Project solely because Village “failed” to satisfy the County’s condition requiring Village to pay money to acquire offsite easements from 100 percent of the 50 property owners along a public road near Village’s property site in spite of the fact that the County made no individualized determination that the monetary exaction, a sum of approximately $2.5 million, bore an “essential nexus” and “rough proportionality” to the purported impacts associated with Village’s project as required by Nollan v. California Coastal Comm’n, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994).

The questions presented are:

1. Whether the Ninth Circuit’s holding that a land use permit applicant/landowner must show the government’s permit condition would coerce the applicant to give up both its own property and money to establish a Fifth Amendment takings claim under the unconstitutional conditions doctrine, conflicts with this Court’s decision in Koontz v. St. Johns River Management District, 570 U.S. 595 (2013)?

2. Whether the Ninth Circuit’s decision is contrary to Koontz, which imposes on the land use permit applicant/landowner only the burden to show that the government imposed an unconstitutional condition that required the applicant to give up property/money for which the Fifth Amendment would otherwise require just compensation under Koontz, Dolan, and Nollan?

Follow along on the Court's docket, or stay tuned here. Case set to be conferenced next month.

Petition for a Writ of Certiorari, Village Communities, LLC v. County of San Diego, No. 24-736 (U.S. Jan. 1...

Two New Cert Petitions (Ours) - 50 Years Of Fruitless Trying Is Enough: Overrule Or Clarify Penn Central!

Two -- count 'em two! -- cert petitions from our shop, filed today. Both call for "clarifying or overruling" Penn Central.

Oh, have I got your attention now?

• Petition for a Writ of Certiorari, The Gym 24/7 Fitness, LLC v. Michigan, No. 24-____ (U.S. Jan. 15, 2025)
• Petition for a Writ of Certiorari, Mount Clemens Recreational Bowl, Inc. v. Hertel, No. 24-____ (U.S. Jan. 15, 2025)

Both arise out of the Michigan governor's orders shuttering some, but not all, businesses during Co-19. These had devastating consequences, and owners sued for, inter alia, a taking, asserting a Penn Central theory. As we noted here, the Gym 24/7 case went up through the Michigan court system, with the Supreme Court eventually denying discretionary review over an extensive dissent. The Mount Clemens Recreational Bowl case took pretty much the same path. 

We're not going to say much more because these petitions are ours, with Jon Houghton and Deb La Fetra walking point.

Here are the Questions Presented:

In the Gym 24/7 case:

In this Fifth Amendment regulatory takings case, Michigan’s Executive Order took dominion and control of the use of Petitioner’s commercial property. It barred all customers from the premises for six months, which erased the property’s economic use and destroyed Petitioner’s reasonable investment-backed expectations to benefit the general public. However, Michigan courts dismissed Petitioner’s case at the pleadings stage, generating three disparate opinions, with two different outcomes, and three conflicting interpretations of Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978). The result demonstrates Penn Central’s inability to protect fundamental property rights and to provide a clear, consistent, and uniform determination of “how far is too far.” There is also tension in this Court’s decisions, and those below, as to whether the element of time should be a determinant of takings liability. The questions presented are:

1. Whether Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 (1978), should be clarified or overruled?

2. Whether a taking occurs upon the government asserting control over a property right, as the Court held in Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021), or instead, upon the government asserting control over a property right for some undefined period of time, as the Court held in Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Plan. Agency, 535 U.S. 302 (2002)?

In the Mount Clemens Recreational Bowl case:

Whether Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978), should be clarified or overruled?

Stay tuned.

Petition for a Writ of Certiorari, The Gym 24/7 Fitness, LLC v. Michigan, No. 24-____ (U.S. Jan. 15, 2025)

Petition for a Writ of Certiorari, Mount Clemens Recreational Bowl, Inc. v. Hertel, No. 24-____ (U.S. Jan....

New Article (Note): "Taking Old Ladies’ Homes: A Comparative Exploration of Eminent Domain in Islamic Law," 138 Harv. L. Rev. 841 (2025)

Check this out, a just-published unsigned student piece: Note, "Taking Old Ladies' Homes: A Comparative Exploration of Eminent Domain in Islamic Law," 138 Harv. L. Rev. 841 (2025).

Not that we have any background to be able to evaluate the author's assertions, but at the very least, the piece is very interesting (you learn stuff!), and does reach the conclusion that forced acquisitions are not absolutely necessary to "develop[] advanced built environments and economic systems[.]" See id. at 862 ("It is not enough to assume that any society, or indeed any modern society, requires a particular form of eminent domain or the eminent domain power itself.").

Here's a summary.

This Note is therefore likely the first exploration of premodern Islamic discourses and practices of “eminent domain.” It will argue three things about forced appropriation of property for public purposes in premodern Islamic law: First, that unlike in Anglo-American law, such appropriations were not justified on the basis of any inherent sovereign attributes with regard to property, but rather on wider doctrines of the limits of property rights; second, that the permissibility of takings was more varied and less unanimous than contemporary Arabic sources imply; and third, that the allowance of compulsory sale for public purposes was generally narrower in scope and required a higher level of public necessity than did eminent domain law. Finally, this Note will examine common tensions and anxieties that unite government takings across history and legal traditions: from public needs to individual rights to distributive justice concerns. It makes the overarching point, therefore, that while many communities will face the challenge of reconciling these conflicting interests, the Anglo-American practice of eminent domain is just one answer to these questions and may have surprising implications.

Worth a look.

NJ's Forfeiture Statute Is A Taking Of Surplus Home Equity

If you thought the issue of whether it is a Fifth Amendment taking for a state or local government to "keep the change" after satisfying a tax debt was settled by the U.S. Supreme Court in Tyler v. Hennepin County, 598 U.S. 631 (2023), you'd be right.

Then what was there left for the New Jersey Supreme Court to decide in 257-261 20th Avenue Realty, LLC v. Roberto, No. A-29-23 (Jan. 9, 2025)? Some interesting stuff, it turns out.

And before you conclude that this is just piling-on, remember -- they wanted this: after Tyler, instead of reading the U.S. Supreme Court's decision and the writing on the wall, some state and local governments, unhappy with being cut off from a source of easy money, tried to figure ways to avoid or negate the rule that if there's money left over after you satisfy a tax debt, you gotta give it back. 

After a Jersey owner of a mixed-use property failed to pay $606 in sewer tax bills, the city placed liens on the property. Under the authority of a state statute (the Tax Sale Law), a a private firm purchased the tax sales certificates, after which it filed a tax foreclosure lawsuit. The owner tried to redeem by offering $9,000 but the court held the amount owed was $33 grand. The owner didn't answer the complaint, didn't redeem, and the court entered final judgment in favor of the private lienholder. Later, after the owner posted $50k in escrow, he asked the court to vacate the judgment, allow him to redeem, and to restore title. The court said yes. 

During the pendency of the lienholder's appeal, the U.S. Supreme Court issued Tyler, and the NJ appellate division affirmed the judgment in favor of the owner, rejecting the lienholder's argument that Tyler only applied when governments take surplus home equity, and that the ruling was not retroactive. The NJ Supreme Court agreed to review the case, after which many many amici jumped in (our firm, which represented the property owner in Tyler, included).

First, the court noted that local government rely on real estate taxes as their primary source of revenue, and that the Tax Sale Law's foreclosure procedure allows municipalities to "collect a stream of revenue when property owners do not pay their taxes." Slip op. at 10. The tax foreclosure process has been around in some form in New Jersey for a while (1886). And the TSL permits local governments to sell the lien to private parties. 

The court next acknowledged that may be so, but also noted Tyler held that a good reason for the taking doesn't relieve the obligation to take only with compensation, and that a state's property law only can go so far in defining what counts as "private property" under the Fifth Amendment. And "Tyler, of course, is binding precedent of the United States Supreme Court." Slip op. at 22. Indeed, we'd have pretty much the same result even without Tyler, because "New Jersey, similarly, has long recognized a property right to surplus equity in different contexts." Slip op. at 26. Thus, "[a]s in Minnesota, therefore, property owners in New Jersey have a recognized property right to surplus equity." Slip op. at 27.

The big issue the court resolved was whether Tyler was limited only to government actors, and whether the plaintiff here -- a private outfit that purchased the tax lien from the city under the TSL -- was immune. The court held no, the private actor's actions were fairly attributable to the state, and "the purpose, structure, and practical application of New Jersey’s TSL demonstrate that private lienholders who execute tax foreclosures may be considered state actors." Slip op. at 28. Collecting taxes is a traditional public function as is seizing properties to satisfy a tax debt, and the lienholder here acted under the authority of the TSL, "working in tandem" with local government. 

A final thought: maybe instead of resisting the vibe of Tyler, state and local governments should be working to meet their constitutional obligations instead of trying to craft ways to get around the Supreme Court's rulings? The whole "turn square corners" thing doesn't seem like it's too much to ask, does it? 

(And what's with the video above and what does this have to do with the case? Nothing, we just like it, and it's Friday.)

257-261 20th Avenue Realty, LLC v. Roberto, No. A-29-23 (N.J. Jan. 9, 2025)

CA8 Misses An Opportunity For Penn Central Clarity: No Taking When City Bans New Private Wells, Requires City Water

At first glance, it might seem like there's a lot there in the U.S. Court of Appeals' opinion in Becker v. City of Hillsboro, No. 23-3367 (Jan. 7, 2025).

After all, the city's prohibition on new private wells and another requirement that newly built homes connect to the city's water system seems a bit arbitrary (at least the opinion doesn't give a lot of detail why, other than "the city said so"). And the opinion evaluates a Lucas wipeout, a physical invasion, a Penn Central ad hoc taking, and a Nollan/Dolan claim. Even a Murr denominator issue. This case could have been a good vehicle to examine those questions in more detail that many courts do.

But after taking a dive in, our initial impression that this case would provide a lot of insight -- or even food for deeper thought -- didn't pan out. Take a look and see if you agree.

The case involved two separate but related city restrictions on how landowners use their property. The first was a prohibition on new private wells within the city's jurisdiction, put in place five decades ago. The second is more recent (2008), and requires all residences to get water service from the city.

The plaintiff here owed an undeveloped 156-acre parcel zoned for residential uses. A prior owner voluntarily annexed the land to the city in 2000. Flash forward, and the current owner tried to sell the property in 2020. It was only then, it asserted, that it discovered the annexation and the resultant well ban and city-water requirement. Complying with the city water requirement would cost way more than it is worth, and killed potential sales. 

Takings lawsuit next, cross motions for summary judgment followed. City's motion granted, appeal followed.

Physical invasion? No. The owners "are not being compelled to tolerate a permanent physical occupation because they are not being compelled to do anything at all." Slip op. at 9. No, this is a require that if they build homes, then those homes must be on city water. "If." No one is compelling the owners to build homes: the owner "still may choose whether to build a structure and comply with the ordinance or forego building a structure." Id. Simple: don't want to be on city water? Don't build nothin!

Well, what about the owners' argument that yes, we could choose to not build but that would force us into a Lucas wipeout. That, too, failed to convince the court. You might not be able to build homes, but hey, you "may still use the Property as it is for recreational purposes, or they could sell it." Id. And, worse yet, the owners' "own expert did not suggest that the property was rendered valueless by the City’s ordinances." Slip op. at 10. The requirements "only" reduced the property's value by 70%.

What about forcing the owner to choose (develop and use city water, or not develop and get whacked for 70% value) violates Nollan/Dolan? The court held that it couldn't address this argument because it had not been raised and argued in the district court. Hold on, the owners argued, whadda mean we didn't raise this -- our district court summary judgment papers used the terms "exaction" and "Nollan/Dolan." Not good enough the court of appeals concluded: "those references and citations were made in the context of arguing that the regulations are not impermissible exactions because the Trust is not seeking permits from the City. Furthermore, the trustees made no reference to exactions, Nollan, or Dolan in their Amended Complaint." Slip op. at 12.

Finally, the owners' Penn Central argument floundered on similar shoals. The court started off by rejecting the owners' claim that the denominator should be be each of the potentially subdivided lots ("as that's how they hope to sell the tract"), or was the court going to treat the property as the entire 156 acres? One big lot, the court concluded, applying the multi-factor Murr test. That settled, the court held that each of the Penn Central factors weighed against the owners.

• Economic impact: nothing "significant" here, because owners "presented no evidence" to show impact, because the expert only declared that "the cost to the Trust of extending the City water system to the Property made the development for that highest and best use economically unfeasible," and didn't conclude anything about the economic impact of other uses."Slip op. at 16.
• Investment-backed expectations: yes, the owners might have subjectively believed that they could developed without connecting to city water, and the prior owner voluntarily annexed the property, thus subjecting it to the city's regulations. Yeah, there's Palazzolo, which doesn't categorically bar you from forming reasonable expectations, but the regulatory regime can "shape" your expectations (what's the difference?) and other nearby owners paid to hook up city water, so there's that. Slip op. at 17.
• Character: the court acknowledged that the government's reasons for the regulations are not what the Supreme Court meant by "character of the government action," but in the same breath concluded that the the "likely" reason for the city's regulations was to prevent water contamination and depletion of the aquifer. Slip op. at 18.

The court's approach to Penn Central is perplexing. On one hand, it acknowledges--as it must--that the Supreme Court directs the factors to mean a certain thing (or not mean a certain thing), and are applied a certain way. Yet despite that acknowledgement, the Eighth Circuit just goes ahead an applies the test the same old way. You have to disprove all possible uses and values (and not let the trier of fact decide how much is too much), your post-regulation acquisition of the property doesn't kill your RIBE, but merely "shapes" them negatively, and "character" doesn't mean the government's reasons (yet it does).

So despite the initial promise that the Eighth Circuit would grapple with the issues presented in the case -- in particular an application of the Penn Central factors -- in the end it was a tale full of sound and fury, signifying nothing.

Becker v. City of Hillsboro, No. 23-3367 (8th Cir. Jan. 7, 2025)

Breaking News: Come Join Us For The 42d ALI-CLE Eminent Domain & Land Valuation Litigation Conference, San Diego, Jan 30-Feb 1

With our tongues firmly planted in cheeks, the Planning Chairs for the upcoming 42d edition of this popular and venerable Conference bring you this "breaking news" report from San Diego!

As you know, in addition to being the best nationally-focused conference on the subjects that we love and a venue that is nearly certain to have some of the warmest winter weather in the continental United States, and we went on-location from some of the local highlights: the beaches, Torrey Pines, the Zoo, Balboa Park, the Gaslamp Quarter, and Coronado to name but a few.

More about the Conference here, including registration information.

Here are some of the highlights:

• Property Rights at the Supreme Court: DeVillier and Sheetz and What's Next
• Slow Take: Possession, Rent, Relocation, and Offset
• The Jury's View: How Jurors See Your Case
• From Penn Coal to Penn Central: How to Prove "Too Far"
• Leveraging Expertise in Eminent Domain Litigation: Working with Land Planners, Engineers, and Other Predicate Experts
• Kelo at Twenty: What Changed, What Didn't, and What's on the Horizon
• Viva Las Vegas: How the Nevada Judiciary Upheld Property Rights in 180 Land's Inverse Condemnation Taking
• Ethics: Guiding the Trolley: Perspectives on Professional Ethics in Eminent Domain for Lawyers, Appraisers, and Right of Way Agents
• "I Think I Shall Never See" Just Compensation For a Tree: Strategies to Securing Recovery for Trees, Crops, and Fixtures

And more. Check out the complete agenda here. Registration information here. 

We especially welcome first-time participants, or those returning after an absence. Connect (or reconnect) with your colleagues from across the nation.

The 41st Conference was in New Orleans. Here's a report of that event, and here are our reports from prior conferences in Austin and Scottsdale.

Don't miss out on San Diego: we have had record attendance in recent years, so hold your space now. #EminentDomain2025

New Article: Timothy Harris, "Revisiting Palazzolo: The Blurry Lines Between Ripeness and Standing that Enable Windfalls," 73 Kan. L. Rev. 289 (2024)

Check out, the latest from Professor Timothy Harris, "Revisiting Palazzolo: The Blurry Lines Between Ripeness and Standing that Enable Windfalls," 73 Kan. L. Rev. 289 (2024). He dives into the question of whether an owner who acquires property already subject to regulations that allegedly work a taking may assert a claim, or does that claim belong only to the prior owner?

Here's the Abstract:

When property changes hands, the pre-existing right of the seller to bring an inverse condemnation claim against the government does not always pass to a subsequent owner. Sometimes it does. If valid takings claims expire on sale, the government may experience a windfall. But if a buyer gets a deal on burdened property and then sues under a prior owners’ takings claim, the new property owner gets a windfall. Established Supreme Court rules draw distinctions between the character of various “takings” to determine whether a claim survives a transfer of ownership. But the character of these distinctions is blurred (along with the rights of landowners) in Washington, Louisiana, and other states that continue to follow the “subsequent purchaser role” which is inconsistent with the U.S. Supreme Court’s ruling in Palazzolo v. Rhode Island. The determination of who gets the windfall may depend on the narrow distinction of whether a subsequent purchaser’s status turns on the doctrine of “standing” or “ripeness.”

Among other cases, the article analyzes decision by the Washington Supreme Court dismissing a takings claim because the claim belonged to the prior owner of the property. We posted about that case here. Professor Harris writes that "[e]ither the Washington Supreme Court is incredibly sloppy, or it was deliberately attempting to expand the reach of the questionable 'subsequent purchaser doctrine.'" He has equally critical comments about other courts that adhere to the same analysis.

Professor Harris concludes that "[t]he fact that a claimant purchased property that was subject to a prior regulation should not be an automatic bar to an inverse condemnation claim--as it is under the "subsequent purchaser rule.'"

Worth reading. Definitely check this one out.

Iowa: Mandatory Inspection Of Rental Units Without A Warrant Is Not Facially Unconstitutional, Because Private Inspectors Might Barge In

It's been a couple of weeks, but we're still trying to wrap our head around the Iowa Supreme Court's opinion in Singer v. City of Orange City, No. 23-1600 (Dec. 20, 2024).

The court rejected a facial challenge under the Iowa Constitution's search-and-seizure clause to a city ordinance requiring the owner of rental units to have a rental permit and to submit to "regular inspections" of those properties. The ordinance purports to create a "right of entry" for a "code official," and if the owner refuses to voluntarily allow inspection, the inspector may obtain an "administrative search warrant" to enter and search. An owner can exempt itself from inspection by a city inspector if a unit is "inspected by a certified third-party inspection organization[.]" And the ordinance says nothing about probable cause.

Several owners sued, and after discovery, the court granted the plaintiff-owners summary judgment. It declared the ordinance facially unconstitutional, and enjoined the city from seeking administrative warrants. The city appealed.

The court considered the owners' argument that the Iowa Constitution requires evidence of an actual violation before issuance of an administrative warrant. The Fourth Amendment, by contrast, allows administrative warrants even if there's no specific knowledge of a violation in a particular property. No, our Iowa standards are the same, held the court.

Also considered was the owners' argument that the city's ordinance does not require any showing of probable cause. This is a facial challenge, reminded the court, and we know how hard those are. A "facial" challenge means that the ordinance is "incapable of any valid application." Slip op. at 10. So let's make up some situations where the ordinance might be applied in an ok way. Could there be a set of facts in which the ordinance could be applied in a constitutional fashion? Court court imagined three examples.

First, there may be some circumstances where a city inspector gets an administrative warrant based on probable cause. You never know, an inspector may be willing to do more work than the ordinance requires. Second, the ordinance allows the city to pursue other "remedies provided by law" and not just an administrative search warrant. The court doesn't say what those other remedies might be, but hey, those remedies might accord with the constitution, you never know!

And finally (and this is the part where we really have trouble), an owner might have a rental unit exempt from city inspection, where a certified "private party" conduct the inspection. Who or what is a "private party" inspector? Heck if we know (and apparently neither does the court, which explicates no further on the notion). For what it is worth, we're not quite seeing this one as clearly as the court apparently did. Would not an inspection by a government-certified inspector -- even an inspector employed privately -- entering under the authority of the ordinance be treated pretty much the same as a government inspector? And if the court were to consider opting into the private-inspector exemption a voluntary act, would that not raise unconstitutional conditions problems?

Likely next up? An as-applied challenge, perhaps.

Singer v. City of Orange City, No. 23-1600 (Iowa Dec. 20, 2024)

Announcement: State & Local Govt Law Writing Competition

Heads up law students and young lawyers: the American Bar Association's Section of State & Local Government Law has called for submissions for its annual writing competition.

Topics which the Urban Lawyer publish pieces about include land use, takings, eminent domain, housing, RLUIPA, exactions ... and more. 

Here's the announcement: 

The State and Local Government Law Section of the ABA is holding its annual Writing Competition, with the winner to be published in the Section’s Law Review, The Urban Lawyer.

The Section invites all those who qualify as young lawyers (less than 36 years old or in practice for less than 10 years) and law students to submit articles of 25-50 pages in length, and properly footnoted, on any topic of state or local government law of their choice.

Membership in the ABA as a Law Student or in the ABA Young Lawyer Division is encouraged but is not required to enter the competition (join at ambar.org/join). Articles are due to the Section by January 15, and the winners will be announced by February 15. The Urban Lawyer Submission Guidelines.

There's still time to submit a piece for consideration.

Montana: It Doesn't Take Much To Allege An Inverse/Takings Claim (Nor Should It)

The owner's land is a peninsula most of the time, but when Flathead Lake, Montana, rises a few months each year, it needed a bridge to access. So it asked the County "How about a bridge? We will only use it when the water rises." County said yes, issued a permit.

NIMBY neighbors, however, had another idea, They sued the County to void the permit: "What about the Montana Lakeshore Protection Act?" they asked. Trial court agreed, declared the permit void, and ordered the owner to restore the area to its natural state. Montana Supreme Court affirmed.

Next up: the owner's inverse claim against the County. We got a vested property interest, and "removal of the bridge by court order amounted to a taking[.]" Slip op. at 3. Trial court agreed with the County that the permit was void ab initio, and thus no vested property right. Moreover, the owner could not show that the County had taken or damaged the partial bridge for public use (the bridge came down because of the Montana Lakeshore Act, not us said the County). Back up to the Montana Supreme Court.

In Flathead Props. v Flathead County, No. DA-24-0233 (Dec. 31, 2024), the court reversed. This was an appeal from a motion to dismiss, so the court took as true the allegations in the complaint. There was reliance on the permit, and "[o]nce the bridge was constructed, Appellant presumably owned the bridge in fee and had the right to use, exclude, transfer, or dispose of the property ... [and] seemingly had a constitutionally protected property interest in the bridge itself." Slip op. at 7.

The court also analyzed the complaint's allegations as a regulatory taking (even though it was pleaded as an "inverse" claim):

Here, appellant’s complaint asserts it had a vested property right in the bridge, as described above. Additionally, appellant asserted the bridge added value to its property and the removal of the bridge thus deprived appellant of all use of the bridge. Appellant’s complaint also asserts it relied on the County’s permit to expend money and construct its bridge. Finally, appellant asserts the County deliberately issued the permit which later turned out to be faulty. As such, we find the facts asserted by appellant’s complaint are also sufficient to withstand a 12(b)(6) dismissal under a regulatory takings analysis

Slip op. at 8-9.

What about the notion that an owner cannot reasonably rely on an invalidly-issued permit? Not dispositive: "[t]his Court has not yet considered whether reliance on a faulty permit" can result in a vested right. Slip op. at 5. And what about the idea that no bridge for part of the year does not seem to lead to a conclusion that the entire property can't be used, or that the bridge removal rendered it valueless. Indeed, the court carefully avoided the merits of the case, noting only that "[w]e make no judgments on whether Appellant's claims would win at trial or survive a motion for summary judgment after further development of the factual record." Id.

This is the right approach at the pleading stage. The place to weed out factually weak claims is summary judgment, not motions to dismiss. More courts should take heed and approach this the same way. Instead, we see most courts serving as gatekeepers, throwing out many if not most takings claims at the pleadings. Rather than having the complaint do what complaints do (provide notice of the basic facts and the plaintiff's beef with the defendant), takings complaints are often treated by courts as technical exercises like when you plead fraud -- they require particularity, invocation of magic words, and hypertechnical pleading.

Be like Montana!

Flathead Props. v Flathead County, No. DA-24-0233 (Montana Dec. 31, 2024)