Here's the cert petition in a case we've been following since it was decided in the property owner's favor by the Colorado Court of Appeals.
In Carousel Farms Metro. Dist. v. Woodcrest Homes, Inc., 444 P.3d 802 (Colo. App. 2017), the court invalidated an attempt to exercise eminent domain to take property which the owner had refused to sell to developer Carousel Farms. Carousel Farms needed the parcel because without it, Carousel Farms' agreement with the local municipality to allow the development (known as -- you guessed it -- Carousel Farms), could not go forward. In response to the owners' refusal to sell, Carousel Farms formed an entity which under Colorado law has the power of eminent domain, named -- get this -- the Carousel Farms Metropolitan District. (Protip: if you are forming an entity with the power of eminent domain in order to take property for private benefit but don't want anyone to figure out your plans, it is probably a good idea to not label the condemning entity with the very same name as the privately benefited party; you know, that might just somehow give people the wrongheaded idea that the taking is primarily for private benefit.)
Although the Carousel Farms Metropolitan District couldn't point to a present public use or benefit from the taking, it asserted that in the future the public would benefit from the condemnation because if Carousel Farms were allowed to develop its property in accordance with its agreement with the town, the public would receive new infrastructure such as roads and sewers. The trial court upheld the taking, but the court of appeals reversed. The real purpose of the taking was to facilitate the developer's compliance with its agreement with the town, and speculative future benefits are not enough to overcome the true purpose of the taking.
Unfortunately, the court of appeals' ruling didn't hold up on appeal to the Supreme Court of Colorado. That court held that possible future benefits were enough, and it didn't matter what evidence of private benefit was in the record: "Here, the taking is essentially for public benefit. Parcel C will be used for public right of ways, storm drainage, and sewer improvements."
Not only did that contravene the idea of public purpose, it seemed to even violate Kelo. We also thought this was a blank check for any private beneficiary with a competent staff to avoid pretextual takings claims by asserting a taking could be supported by possible future public benefits, even if there was no way to guarantee or even predict whether these benefits would ever materialize. To us, this was the rational basis test at nearly its most farcical (sorry, the "it might have been aliens" test still occupies the bottom rung).
We also thought that this case reminded us a whole lot of the one that we did in Hawaii back in the day. So imagine the smile on our face as we read the Institute for Justice's cert petition asking the U.S. Supreme Court to review the Colorado decision, and noted that it focuses on our Hawaii case:
In any of the courts that consider pretextual public purposes, this case would have been decided differently. For instance, in contrast with the decision below, the Hawaii Supreme Court has held that “although our courts afford substantial deference to the government’s asserted public purpose for a taking in condemnation proceeding[s], where there is evidence that the asserted purpose is pretextual, courts should consider a landowner’s defense of pretext.” C & J Coupe, 198 P.3d at 620.
In that case, the County of Hawaii condemned land and transferred it to a private developer, so it could build a road to its to-be-constructed development. The property owner argued that the taking did not have a public purpose because the road at issue was only being built to advance the private interests of the developer.
The Hawaii Supreme Court took the case to address the issue of pretext, noting that Kelo “allows Courts to look behind an eminent domain plaintiff ’s asserted public purpose under certain circumstances.” Id. at 638. The majority held that “although the government’s stated public purpose is subject to prima facie acceptance, it need not be taken at face value where there is evidence that the stated purpose might be pretextual,” id. at 644, and ultimately remanded the case to the circuit court for consideration of that issue.
The disagreement between C & J Coupe’s majority and dissent neatly illustrates the judicial conflict on the issue of pretext. To wit, the dissent argued that all takings should be afforded rational-basis deference, “which includes deference to the government’s statement of public purpose.” Id. at 654 (Moon, C.J., dissenting); see also id. at 656 (“In analyzing whether the taking is for a valid public purpose, courts give great deference to the government’s determination of public purpose” unless “the party challenging the taking makes a ‘clear showing’ that the government’s stated public purpose is ‘irrational,’ with ‘only incidental or pretextual public benefits.’ ”) (citations omitted). It further proclaimed that “whenever property is taken for a highway, it is for the public use, notwithstanding that the highway may greatly benefit a private party.” Id. at 658 (emphasis and quotation marks omitted) (citing Rodgers, 781 A.2d at 1034). “[T]he power of eminent domain is merely the means to the end * * * . Once the object[, i.e., the public purpose,] is within the authority of [the government], the means by which it will be attained is also for [the government] to determine.” Id. at 656 (citing Midkiff, 467 U.S. at 240) (internal quotation marks omitted, bracketed changes in original).
The dissenting opinion in Hawaii would have been the majority in New York or Iowa or New Hampshire—and now, in light of the decision in this case, in Colorado as well. Indeed, the ruling below represents the logical conclusion against which the Hawaii Supreme Court warned in C & J Coupe. Colorado now can delegate its eminent domain power to an unsupervised private party, while Hawaii cannot. Iowa can, while Georgia cannot.
Pet. at 16-18 (footnote omitted).
Do we think this case is one the Justices should review? You bet. Are we going to be following along? Same.
Petition for a Writ of Certiorari, Woodcrest Homes, Inc. v. Carousel Farms Metro. Dist., No. ___ (U.S. Nov....
