SCOTUS Oral Arguments In The Judicial Takings Case: Are "Background Principles" Of Property Law Completely Up To State Judges? (Part I)

Today, the U.S. Supreme Court heard oral argument in Stop the Beach Renourishment, Inc. v. Florida Dep't of Environmental Protection, No. 08-11 (cert. granted. June 15, 2009), the case in which the Court is considering the theory of "judicial takings" and whether state courts are constrained by the Fifth Amendment if they suddenly and dramatically change state property law.

The transcript is available here. Justice Stevens did not participate.

Disclosure: we filed an amicus brief in the case supporting the property owners, available here.

New Law Or Old Hat?

Florida attorney D. Kent  Safriet, attorney for the property owners, started off by reminding that the basic premise in regulatory takings is that all branches of state government, including the judiciary, are bound by the Takings Clause. Tr. at 3-4.

Justice Ginsburg, as one might expect, seemed skeptical, suggesting that if beach restoration ("renourishment," as they call it in Florida) was a "new situation," then there was no Florida precedent, and therefore noting that the Florida Supreme Court changed. Safriet responded by arguing that Florida common law long recognized the dominant feature of littoral property was contact with the ocean. Tr. at 5-6.

Justice Scalia joined in, asking whether the hurricane and the later renourishment were avulsions and not accretions, because they were not "natural, gradual phenomen[a]." Tr. at 6-7. When Safiret responded that there is no Florida case law that the placement of sand to replace a beach was avulsion, Scalia pounced: "If these is no case law, it seems to me you've just lost your case." Tr. at 7. Safiret wasn't cowed, responding that under Florida law avulsion is the result of natural forces.

Justice Breyer suggested that in this case, the Florida Supreme Court fulfilled its core common law function of applying established principles to a new fact situation. Tr. at 8. When Safiret responded by arguing that a littoral owner has a common law right to reclaim what is lost by avulsion, Breyer asserted:

You didn't lose anything. It just went out the front door there. The land ended here, and the new avulsion comes in and extends it further. You didn't lose one inch. All you lost was the right to touch the water. But the [Florida Supreme] Court here says you in effect have that right because you can walk right over it and get to the water.

Tr. at 8.

Waterborne Hot Dog Vendors

The arguments next focused on the nature of littoral rights. Justice Breyer questioned whether littoral property owners have a right to access the water, and Chief Justice Roberts joined in, asking "[i]f somebody wanted to put up a hot dog stand on this new land, would you have the right to tell them they can't?" Tr. at 9.

Chief Justice Roberts asked whether there are any property rules which the legislature "isn't free to change tomorrow," but Justice Sotomayor wanted to talk more about hot dog stands:

JUSTICE SOTOMAYOR: Counsel, before this legislation, in the seaward side of the land that belonged to the State, from the mean high water mark, a hot dog stand could have sat in the water, correct?

MR. SAFRIET: If somebody wanted to put one in the water, yes, Your Honor.

JUSTICE SOTOMAYOR: And someone could have stood there, a boat could have docked there, assuming that it was a shallow boat.

You had no control over anyone placing anything on the seaside submerged lands that belonged to the State, outside of whatever regulations the State decided it wanted to impose?

MR. SAFRIET: We had no exclusive right to exclude them from that property. But they could not unnecessarily interfere with our right to view or --

. . . .

JUSTICE SOTOMAYOR: So right now we just have to assume that it was -- that it -- it has established the line at a point where the State owns all the land seaward of the ECL, correct?

MR. SAFRIET: Yes, Your Honor.

JUSTICE SOTOMAYOR: So after this project finishes, that hot water -- that hot dog vendor will be on stateside land, correct?

MR. SAFRIET: That is correct, Your Honor.

JUSTICE SOTOMAYOR: No different than what exists today, before the legislation, which is if the hot dog vendor wanted to sit in a foot of water, it could have?

MR. SAFRIET: It certainly could sit in a foot of water.

JUSTICE SOTOMAYOR: Right. So none of your actual use rights, pleasure rights, or anything else has been changed. What you're arguing is that -- and what the Florida State Supreme Court described as the contingent future possibility that the high water mark might change and you could push that hot dog vendor back another foot or two.

MR. SAFRIET: That is correct, Your Honor. Anybody allowed --

JUSTICE SCALIA: Of course, such -- such boats floating in the water below the mean high water mark are available with respect to all littoral properties; isn't that right?

MR. SAFRIET: That is right, Your Honor.

JUSTICE SCALIA: But what can't happen with other littoral property is that folks can't come in and lay down beach blankets and occupy that sand, right, so that you have open sand in front of -- in front of your house?

MR. SAFRIET: That is correct, Your Honor.

Tr. at 11-13. The point Justice Sotomayor seems to be getting at is that nothing much has changed from an absolute point of view. If you took GPS coordinates of the llittoral property and the mythical hot dog vendor before the renourishment and compared them to after, they would be exactly the same. The hot dog vendor in both instances would be on publicly-owned state property, so what's the beef, so to speak?

The problem with that view is that it that littoral rights are relative, and the location of the property boundary moves as the beach itself moves. Thus, it only matters where the hot dog vendor is relative to the mean high water mark (the public-private boundary on Florida beaches), not his or her absolute position.

Compensation (Does The Constitution Contain A Givings Clause?)

As in Kelo, the issue of compensation seemed to interest the Justices, even though it was not part of the Questions Presented. When Justice Scalia raised the issue of compensation, and whether the quid pro quo of the state maintaining the new beach instead of allowing erosion would be sufficient, Safiret responded "[t]hat may well be the case, Your Honor. But again, [the state hasn't] provided us the opportunity to go to that trial [in an eminent domain case.]" Tr. at 18. Justice Kennedy asked whether the compensation owed for any taking of littoral rights could be offset against the enhanced value to the property because it is not subject to erosion. Tr. at 19-20. Justice Scalia asked:

JUSTICE SCALIA: Did any of these beachfront owners think this was a good deal, that the State has prevented further erosion of their land and, you know, the price they pay for this is that they have this 60-foot stretch that the public can use, and that may wash away in 6 years anyway, and if they're lucky the State won't have enough money to put it back? Did any -- I'm not sure it's a bad deal. And they're guaranteed against -- against further loss of property because they will continue to own up to that, to that new line, even if it's all covered by water.

MR. SAFRIET: No, Your Honor.

JUSTICE SCALIA: Nobody, nobody thought it was a good deal? Everybody thought that they had been done out of this?

MR. SAFRIET: With respect to the Petitioner's members, they thought it was a bad deal, Your Honor.

JUSTICE SCALIA: Petitioner's members, but other people along -- along the same coast? I mean, if I had a place and it's being eroded by hurricanes constantly, you know, I'm not sure whether I wouldn't want to have the sand replaced, even at the cost of having a 60-foot stretch that the State owns.

MR. SAFRIET: I think that's the fundamental misunderstanding in this case. The beach was not eroding. It was not lapping under these houses. There was 200 feet of dry beach, and the beach was accretion, meaning it grows gradually, day by day or week by week.

. . .

JUSTICE SCALIA: It may not change the property line, but all of your property might be under water, right? That wouldn't be very good.

MR. SAFRIET: That's a risk that the Petitioner's members were willing to take. They bought ocean-front property.

JUSTICE SCALIA: Your members were, but I was asking whether some other people might not have thought it was a pretty good deal.

MR. SAFRIET: Sure. Sure, Your Honor, there are a lot of properties, probably even in this stretch, where water is lapping under the houses and the landowners will want sand and they will be willing to waive any types of property rights claims or compensation claims to get that sand. But that's not what happened in this case.

Tr. at 20-22.

Justice Kennedy And Judicial Takings Standards

Justice Kennedy inquired about what standards the federal courts could apply to tell whether a state court decision works a taking. Safiret relied upon the test set out by the concurring opinion of Justice Stewart in Hughes v. Washington, 389 U.S. 290 (1967), "that a judicial taking occurs when a State court affects a sudden and dramatic change in State law, unpredictable in terms of relevant precedents, that have no fair or substantial support in well-established background principles of State law." Tr. at 24. Kennedy responded that this test would mean that the Justices would have to "become real experts in Florida law." Kennedy next inquired by what measures can a reviewing court tell whether the state court's decision was unpredictable, and asked "[d]oes there have to be some finding that the State court's decision is clearly unreasonable?" Tr. at 24.

Safiret stuck to his guns, responding that the "fair and substantial support" gives adequate deference to state courts, and that the federal courts don't have to become experts in state law. Tr. at 25. Barista's note: federal courts interpret state law all the time in diversity cases and in federal question cases which include supplemental state law claims. For an example of how a federal court, unsure of whether a state court changed the law in a particular case, could just ask the state court, see Robinson v. Ariyoshi, 753 F.2d 1468 (9th Cir. 1985), a series of cases we detailed here. 

Safiret concluded by arguing that the state courts can gradually change property law provided they "leave the owner with the rights." Tr. at 25.

Next up, argument by the State of Florida and the Obama Administration.