This just in: the North Carolina Supreme Court has issued an opinion in an important case we've been following for a long time, Kirby v. North Carolina Dep't of Transportation.
This is the case about the "Map Act," a statute which designates private property for future highway use, and "restricted plaintiffs’ fundamental rights to improve, develop, and subdivide their property for an unlimited period of time." Slip op. at 1. The court concluded that "[t]hese restraints, coupled with their indefinite nature, constitute a taking of plaintiffs’ elemental property rights by eminent domain." Id.
The North Carolina Court of Appeals earlier held the Act was a taking, and this 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.
Our colleague Matthew Bryant argued the case in the Supreme Court for the property owners back in February, and we predicted there was a "good chance" the court would affirm, especially after the DOT's counsel conceded that one of the express purposes of the Act was to keep the eventual acquisition price of the designated properties low. Undeveloped property, after all, is usually cheaper to take than developed land. But an indefinite development moratorium -- especially when its express purpose is to depress the eventual acquisition price -- has real takings problems as the North Carolina courts recognized.
The Supreme Court started by noting "[t]he fundamental right to property is as old as our state," and citing Locke and Madison, "[f]rom the very beginnings of our republic we have jealously guarded against the governmental taking of property." Slip op. at 10. The Act's restrictions on the owners' use and development was a taking:
“Property” clearly includes the rights to improve, develop, and subdivide, which were severely and indefinitely restricted here by the Map Act.
Slip op. at 11.
But that wasn't the end of the analysis. The court also asked whether the DOT's designations of property under the Act was an exercise of its police power or its power of eminent domain. We didn't think this analysis was necessary -- see here, bullet points 1 and 2 for why -- but no matter: the court held "[t]he language of the Map Act plainly points to future condemnation of land in the development of corridor highway projects, thus requiring NCDOT to invoke eminent domain." Slip op. at 12. Moreover, "[t]he Map Act’s indefinite restraint on fundamental property rights is squarely outside the scope of the police power." Slip op. at 13. Game, set, match.
Next, remand for a parcel-by-parcel determination of just compensation:
By recording the corridor maps at issue here, which restricted plaintiffs’ rights to improve, develop, and subdivide their property for an indefinite period of time, NCDOT effectuated a taking of fundamental property rights. On remand, the trier of fact must determine the value of the loss of these fundamental rights by calculating the value of the land before the corridor map was recorded and the value of the land afterward, taking into account all pertinent factors, including the restriction on each plaintiff’s fundamental rights, as well as any effect of the reduced ad valorem taxes.
Slip op. at 15.
Congratulations to Matthew, his firm, and his clients.
Kirby v. North Carolina Dep't of Trans., No. 56PA14-2 (N.C. June 10, 2016)