Barista's note: today's post is mostly by Benming Zhang, one of my William and Mary law students. He likes property, land use, takings, state and local government law, and related subjects. And he walks the walk: his day job is serving as an elected member of the Williamsburg, Virginia, city council. (It is his night job, actually, since he's a full-time student, and the council meets mostly in the evenings) This post is built on his summary of the case, and includes my edits and comments.
Welcome to our conversation.
-------------------------------
RT: In Starkville Lodging, LLC v. Mississippi Trans. Comm'n, No. 2018-CA-01405-COA (Aug. 27, 2019), the Mississippi Court of Appeals did what most courts do with public use and necessity challenges -- it rejected them. Not too surprising, I suppose, given the highly deferential standard of review ("well nigh conclusive," as the Supreme Court noted in Berman).
BZ: MDOT had previously deeded a parcel of land to Starkville Lodging because it was no longer needed for drainage or transportation purposes. Four years later, the City of Starkville sold approximately 20 acres of city-owned land -- formerly a sewage lagoon -- to Dr. York, a real estate developer. This abandoned sewage lagoon was southwest of the Starkville Lodging’s property and was landlocked. Thus, the city-York contract for purchase was conditioned on the State allowing access "for [the] intended use [of the] Buyer." Slip op. at 2.
RT: And guess where that access was located? You got it: on Starkville Lodging's land. Why was the State involved? Couldn't the city itself take the property?
BZ: Apparently, the city couldn't take Starkville Lodging's property itself. The opinion doesn't say, but there must have been a reason. So the city and MDOT executed a memorandum of understanding by which MDOT agreed to take it, and which described the road as a "state highway access road" that would be owned by the city, and which would connect a state highway to the "streets of the municipality." Slip op. at 3. The city, however, not the State, would end up owning the property.
After some delays, MDOT initiated an eminent domain lawsuit to condemn the access road. The public use that MDOT asserted supported the taking was "to locate, relocate, construct and /or reconstruct a segment of MS Highway 12 Access Road, a part of the Mississippi State Highway System[.]" Slip op. at 4. MDOT also found it necessity to take the Starkville Lodging property to accomplish this purpose. Id. at 4-5.RT: Under the MOU, the city did not have any obligation to pave the road, or to build a bridge needed to actually connect it to the state highway. Who, you might ask, had that obligation? The court tells us in a footnote: you guessed it, Dr. York. See slip op. at 4 n.2 ("Dr. York testified he planned to privately fund and construct both the road and the bridge connecting the future right-of-way on Starkville Lodging's property to his future development of the sewage lagoon property," even though the city would actually own the easement and the paved road and bridge, if ever built, would be open to the public.).
Ah, so now we see where this is going. Starkville Lodging didn't think that the road really was going to be used by the public, but was more like Dr. York's private driveway, yes? There wasn't a true public benefit to this (unless you could say that by providing access to York, the condemnation of Starkville Lodging's property made the city's sale of the land to York possible).
BZ: Correct. In the trial court, Starkville Lodging asserted that there was "neither a public necessity nor for a public use" supporting the condemnation, and "that the taking of its property was in fact 'for the purpose of accommodating a private landowner whose property is adjacent to that of [Starkville Lodging]' and 'to provide access to the adjacent landowner’s property.'" Slip op. at 5. And that's not all. It also accused the city of getting around its limited power of eminent domain by having MDOT do the condemning under its broader power.
(And if I might digress for a moment, the trial court was a "Special Court of Eminent Domain," which Miss. Code Ann. § 11-27-3 notes consists of “a judge, jury, and such other officers and personnel . . . and it shall have and exercise the jurisdiction and powers enumerated.” I'm not sure how that differs from a "regular" trial court, but it did stick out to me.)
RT: The Special Court denied Starkville Lodging's motion to dismiss, and concluded that MDOT met its (very minimal) burden to show a public use for the York road (access to a state highway), and also that Starkville Lodging did not meet its burden of proving a lack of necessity by "proof of fraud or abuse of discretion." Slip op. at 6. The court ordered a trial, but Starkville exercised its right to an immediate interlocutory appeal.
BZ: The court of appeals applied the very low standards of review. The case was apparently argued only under Mississippi law (not that it would have made much difference), and to affirm, the court only need conclude that the Special Court "had a sufficient basis for its decision." And necessity challenges must be supported by evidence of fraud or abuse of discretion. Slip op. at 6-7.
The court disposed on the necessity argument by concluding that Starkville Lodging did not meet that burden of proof. It made arguments "that the specific purpose for which [MDOT] seeks to condemn its property is to provide access to the abandoned sewage lagoon that the city of Starkville agreed to sell to a private individual -- Dr. Bennett York." Slip op. at 7. Starkville Lodging contended the city-York contract, conditioned on York getting access, was all the evidence needed. Slip op. at 8 ("That contract conditions the sale of the sewage lagoon to Dr. York on the 'State allowing access to [the] property for intended use [of the] Buyer." Slip op. at 8.
The Special Court had "summarily" disagreed, concluding the proof offered by Starkville Lodging was "insufficient" to show fraud or abuse of discretion. Slip op. at 8. Lacking "concrete proof," the court dismissed. And because there was a "substantial basis" for the Special Court's ruling, the court of appeals affirmed.
RT: What about the public use argument (again, presumably under Mississippi law, because the court cites no federal authority)? Didn't the fact that the city and Dr. York kept extending their agreement to await the result of the State's condemnation show that he was the true user (remember, his purchase was conditioned on there being access to the landlocked property)? Wasn't that pretty good evidence that York was the true beneficiary of the taking, not the public?
BZ: No, even though on this issue, MDOT bore the burden of proof, because its bland statement that the use for the taking was to connect some of its roads was enough. Also, the city would own the road, even though it was York who would be responsible for paving and actually connecting it with a bridge. That is enough of a "sufficient basis" for the Special Court to conclude "as a matter of law" that the taking was for public use. Slip op. at 9.
RT: And Starkville Lodging did not introduce any evidence other than the circumstances outlined above?
BZ: No, that was it.
RT: Anything else of interest here?
BZ: I did learn how to pronounce "Okitbbeha County" ("ock-TIB-ee-ha").
RT: Count me in that column too.
BZ: So absent overwhelming evidence of pretext, fraud, insider trading, or private benefit, do courts just take the condemning agency's word for it that the use is public, no matter how generic the statements are, and how the circumstances make it look?
