You know how the process is supposed to work. A condemnor exercises its eminent domain power and files a lawsuit to take property for public use. If the owner believes the condemnor's price is too low, the court adjudicates the just compensation that must be paid. As we know, the point of that lawsuit is to establish the price. If the price eventually adjudicated is too dear (from the condemnor's perspective), it isn't required to acquire the property (unless, in some jurisdictions, it has taken advantage of the quick-take or immediate possession process). But if the condemnor wants the property, it must pay the adjudicated compensation. So far, so good.
But what about those cases where the court adjudicates the price the condemnor must pay to acquire the property, and the condemnor actually takes the property -- but the condemnor does not actually pay the compensation adjudicated by the court? In those kinds of cases, what remedy does the property owner have?
That's the issue presented by a recently-filed appeal, pending in the U.S. Court of Appeals for the Fifth Circuit. This is the latest phase of a case we've been following for quite a while about a Louisiana port authority efforts to seize the property of Violet Dock Port along the Mississippi, downriver from New Orleans.
As you might recall, the case was a condemnation suit to acquire the property from VDP. The owner objected to the taking and to the amount of compensation. The Louisiana court eventually allowed the taking (even though it seemed like the Port took the property simply to turn over operation of VDP's facilities to VDP's competitor). But the court also agreed with VDP about undercompensation, eventually concluding that the property was unique (and thus there's no market for similar properties), and the owner was therefore entitled to replacement cost. (disclosure: we helped with an amicus brief on the compensation issue).
And here where's the story goes off-track. Instead of simply paying the $21.6 million just compensation judgment, the Port didn't. In VDP's words, the Port "refuses to pay the state court compensation judgment and invokes state statutes and procedures to protect against collection of the judgment." After more than a year of waiting for the Port to pay, VDP sued in U.S. District Court for a violation of 42 U.S.C. § 1983, asserting the Port's having actually taken the property -- but having not provided the adjudicated compensation -- was a taking without compensation. The U.S. Supreme Court has concluded that property owners are entitled to "certain payment" of compensation "without unreasonable delay." Bragg v. Weaver, 251 U.S. 57, 62 (1919).
We've seen how other courts have dealt with similar problems. Like this case from the Northern Marianas Islands (government took property, acknowledged its obligation to pay compensation, but didn't pay for more than 20 years). Or this recent case from the Florida Court of Appeals (government simply refused to pay compensation, and refused to make any request to the legislature to appropriate the funds).
But here, the U.S. District Court granted the Port's 12(b)(6) motion to dismiss, concluding that the obligation to pay a compensation award is "discretionary," and no court may compel a condemnor to actually pay just compensation. The property right to being paid compensation "is not a right to payment at a particular time, but merely a recognition of a continuing debt of that government entity." In other words, this is mere "delay" (no matter how long the delay).
So VDP has now appealed. Yesterday, it filed its Fifth Circuit Opening Brief, which argues the District Court should not have dismissed for failure to state a claim.
To us, this doesn't seem like that hard a case (precisely because it was dismissed for failure to state a claim). Our reading of VDP's Complaint is that it made plausible factual allegations that: (1) the Port took VDP's property, and (2) that the Port unreasonably delayed payment of just compensation. And that is all you need to state a viable claim for a Fifth or Fourteenth Amendment violation based on a condemnor's unreasonable delay in paying compensation, isn't it?
Brief for the Appellant, Violet Dock Port, Inc., LLC v. Heaphy, No. 19-30993 (5th Cir. Feb. 3, 2020)
