Here's the latest in a case we've been following, a tale from New York that reminds us of the U.S. Supreme Court's decision in Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982). Every takings lawyer worth his or her salt knows that Loretto stands for the proposition that a regulation allowing a physical invasion of private property -- no matter how de minimus the invasion might be -- is a per se regulatory taking. In that case it was the cable TV company that attached a small box to Mrs. Loretto's building.
In Corsello v. Verizon New York, Inc., No. 51 (Mar. 29, 2012), the New York Court of Appeals held that when the telephone company "attached a box to a building that plaintiffs own, and used the box to transmit telephone communications to and from Verizon's customers in other buildings," the property owner could state a valid claim for inverse condemnation. The court agreed with the appellate division, which acknowledged that the plaintiff stated a valid claim.
The telephone company attempted to disinguish Loretto, arguing that inverse condemnation was not the correct cause of action, since the physical invasion was not permanent because Verizon offered to remove the equipment (and thus trespass, which involves temporary invasions, was the appropriate form of relief). This is reminiscent of the government's argument in Arkansas Game & Fish, the case which the U.S. Supreme Court agreed to review yesterday; it should be as unsuccessful in that case as it was in Corsello.
The New York held that Verizon has the power to take (aso it can be a defendant in an inverse condemnation case), and that its argument that attaching the box to the building was merely trespass "rests on an outmoded understanding of the relationship between inverse condemnation and trespass." Slip op. at 6. The court traced the history of the term "inverse condemnation" in New York law, and concluded that the modern understanding of the term describes cases where a landowner seeks to recover just compensation for a taking of property when condemnation proceedings have not been instituted. Slip op. at 8. In other words, a property owner asserting inverse condemnation claims that the required remedy for a de facto taking is the payment of compensation. The court rejected Verizon's characterization of its actions as mere trespass:
Verizon's argument here -- that inverse condemnation is normally available only when an entity has chosen to exercise its eminent domain power -- in effect invites us to reject the more modern understanding of inverse condemnation, and to return to the time when that term described an option that might be given to a trespasser, either to vacate the property or to condemn it.
Slip op. at 9. The court held that inverse condemnation is not the exclusive remedy, and that an entity having the power of eminent domain can also be sued in trespass or ejectment if the facts warrant it.
The appellate division, while reaching the same conclusion, held that the three year statute of limitations had run. The Court of Appeals reversed, holding that the claim was "saved" by a statute that eliminates time limits when a telephone company wrongfully attaches equipment to private property (Real Property Law § 261). The court held that when the statute was enacted in 1909, the owner's remedy was trespass or ejectment, and the statute's language, which eliminates limitations in cases of "presumption of grant of, or [to] justify a prescription of any perpetual right" reveals that the legislature's purpose was to eliminate all time barriers to the property owner's claim:
When section 261 was enacted in 1909, an owner would have been expected to seek relief in an action for trespass or ejectment, in which the company might plead adverse possession or prescriptive easement as a defense. Today, as we explained above, the same facts would permit the owner to bring an inverse condemnation action, to which the company may assert a statute of limitations defense -- a defense based, like adverse possession and prescriptive easement, on lapse of time. The fact that applicable legal doctrines have changed, and that new claims and defenses, with different names, are now in use should not permit a lapse-of-time defense to succeed where the authors of section 261 clearly intended it to fail.
Slip op. at 12.
Finally, the court rejected the appellate division's conclusion that Verizon was estopped from claiming that the property owner's unfair and deceptive trade practices claim was barred by the three-year statute of limitations. The appellate division held that it would not be fair to allow Verizon to claim the statute expired, because it had concealed its allegedly wrongful conduct. The Court of Appeals rejected this reasoning, however, because Verizon didn't so much conceal its conduct of placing the box on the building, but rather simply didn't tell the property owner it had done so. That being the case, Verizon was not equitably estopped from asserting the statute of limitations had run.
The court also rejected a class certification claim, but you can read that yourself if you are interested.
Our thanks to colleague Dwight Merriam for the heads up on this case.
Corsello v. Verizon New York, Inc., No. 51 (Mar. 29, 2012)
