NC Supreme Court Hears Arguments In Important Takings Case

All of the drama playing out in the North Carolina Supreme Court yesterday as the court heard oral arguments in its review of Kirby v North Carolina Dep't of Transportation, No. COA14-184 (Feb. 17, 2015) came down -- as they often do in these things -- to a single question from the bench, and an advocate's response. At about the 8:40 mark on the the video, this colloquy took place:

Q [Justice Newby]: How would you characterize the benefit, or the purpose of the Map Act. Isn't it to set in place the value of the property ... by restricting improvements or subdivision to keep the ultimate cost of the project at a particular level?

A [NCDOT counsel]: Well that is certainly one aspect or element of the rationale behind the Map Act. The public purpose and benefit can be broadly described as coordinating future road projects with current and future land uses. In many ways, it has similarities to, say, a county or a city adopting a long-range planning document, a zoning ordinance that talks about land uses into the future, ten, twenty, or more years. It anticipates certain necessary actions or changes over time, and limits certain uses of properties in furtherance of that plan. 

Q: The major difference, though, is the county is not ultimately desirous of obtaining that property. Whereas the Department of Transportation is.

Having admitted that one purpose of the Map Act is to suppress the cost of NCDOT's future acquisitions, it should have been all over but the shouting -- at least on the major question presented about whether the Map Act effected a taking -- and having watched the entire video, it appears to us that there's a good chance the NC Supreme Court will agree (the court did not ask the property owners' lawyer -- our friend and colleague Matthew Bryant -- many questions during his portion of the argument), after being a very "hot" bench during the NCDOT's portion). 

We've been following this case for a while, especially after the North Carolina Court of Appeals held that state's "Map Act," which gives the DOT the ability to designate property for future highway use and prevent its development in the meantime, was a taking. This decision resulted in a lot of shouting and gnashing of teeth that making the DOT actually pay just compensation would crash the system and cost the state a lot of money, so we were not terribly surprised when the DOT sought review by the N.C. Supreme Court.

We've had a chance to watch the video of yesterday's arguments, and have a few thoughts:

• The arguments have been framed in an unusual way, asking whether the North Carolina Legislature intended in the Map Act to be exercising its police powers or its eminent domain powers. If the former, no taking, according to NCDOT. See, for example the very start of the video, and at the 15-minute mark, where the NDDOT's advocate argues that the purpose of the Map Act is regulation.
• Our response to that argument is "so what?" because resolving what the legislature intended to accomplish with the Act doesn't seem a terribly helpful question to ask, since it seems pretty obvious that the State has the power to regulate and land bank for future highway uses. The only question in our view is whether the impact of that regulation has been disproportionately loaded onto these property owners by forcing them to hold in place and not make use of , and the legislature's intent doesn't really play into the analysis.  
• The DOT would appear to be free to land bank, it just can't land bank and not have to pay for the privilege. Especially when one of the stated purposes of the Map Act is to keep future acquisition prices down (see admission above). 
• The Map Act sure does seem like an indefinite moratorium to us, and not mere planning ("lines on a map") as NCDOT characterizes it. It prevents development and use. And if that's the case, that's a taking. See also this case. And this one. 
• NCDOT's counsel made a curious argument: the time where compensation must be provided is only after the Department gets around to actually taking the property (whether it is 5, 10, or more years into the future, if ever), and any loss of value for the gap between Map Act designation and the actual taking for a road project can only be addressed as "blight" in the condemnation action, or as part of a "scope of the project" argument. If you are scratching your head at this one, welcome to the club.  

Here are the briefs in the appeal:

• NCDOT's "New Brief" (we haven't heard that term before; is it a NC thing?)
• Property Owners' Answering Brief
• NCDOT's Reply Brief 
• Amicus Brief: North Carolina Justice Center
• Amicus Brief: North Carolina Ass'n of Realtors, Inc.
• Amicus Brief: John Locke Foundation
• Amicus Brief: Pacific Legal Foundation
• Amicus Brief: North Carolina Advocates for Justice
• Amicus Brief: Wilmington Urban Area Metro. Planning Organization

More on the arguments here:

• Challenge to DOT's protected highway corridors before Supreme Court
• Justices hear challenge to NCDOT’s hold over landowners

Stay tuned. We'll have more when the court issues its ruling.