Its deja vu all over again: like it did just a short while back, in Lafave v. City of New Orleans, No. 21-30358 (June 1, 2022), the U.S. Court of Appeals for the Fifth Circuit once again has rejected a takings claims "based on the city’s failure to honor a judgment of the Louisiana state courts." Slip op. at 1.
Unlike the previous case, here the judgment being dishonored was not for just compensation, but a state court order that "call[ed] for the return of personal property acquired by the government unlawfully." Id.
Here's the story. New Orleans likes traffic cameras, and "used mail to collect fines for traffic violations captured by street cameras." A class action lawsuit challenged the scheme, and eventually a Louisiana court determined the city lacked the authority to designate the Department of Public Works (and not the police department) as the enforcement authority. New Orleans responded by shifting enforcement to the police department.
End of case, right? Not quite. The DPW had by then collected about $25 million in traffic fines, and the court ordered the city to give the money back: issue an "'immediate refund' of the relevant fines and fees, which included an additional $10 million in interest. Slip op. at 2. The appeals courts of Louisiana affirmed.
Did the city comply? Did it return the wrongfully-acquired and wrongfully-retained money? Nope. As in the prior case, the city did nothing. Oh, it issued a public statement promising to pay. But it didn't do anything else. Slip op. at 2 ("New Orleans still has not reimbursed the fines.").
The Fifth Circuit acknowledged that the amount to be reimbursed ($35 million) is "substantial," and "New Orleans tends to be less than prompt in the payment of judgments." Id. Boy howdy! "At oral argument, counsel for the city stated that the city's unpaid judgment stretch back 'over a decade.'" Slip op. at 2-3.
Not thrilled at the prospect of joining an ever-growing queue of judgment creditors, a class of people to whom those illegally-collected fines should have been returned sued in federal court under § 1983 for a taking. Slip op. at 3 ("The plaintiffs alleged that the city had violated the Fifth and Fourteenth Amendments by confiscating their property and keeping it without just compensation."). They alleged the taking arose when the city refused to return their money immediately, a theory the Ninth Circuit approved a few years ago.
The district court denied the city's motion to dismiss, after which the city sought interlocutory appellate review of a single certified question: "whether the failure to comply with a state court judgment may be construed as a taking.' Slip op. at 3. As our headline infers, having phrased the question presented that way, it wasn't going to be too hard to predict that the Fifth Circuit would again hold no.
First, the court held that the "illegal nature" of the traffic cam fine collection presented "a ... serious problem" because if the money was collected illegally, there's no takings claim: "an exaction of money that is completely unlawful, whether compensated or not, is not a taking." Slip op. at 4. But wait a sec, if the government simply grabs someone's property without any legal authority to do so, it isn't a taking if it keeps it ... so this is like civil forfeiture? Slip op. at 5. Here, isn't the complained-of action not so much that the government wrongly collected the fines (that much was settled in the Louisiana courts), but that it is keeping it?
The next part of the Fifth Circuit opinion - complaining that the "plaintiffs' theory suffers from a logical contradiction" -- reminds us of the struggles courts often go through to conclude that some action that sure looks like a taking, isn't a taking:
They advance two propositions: The taking did not arise until the moment the McMahon judgment became final, and it arose only because the money was initially taken with no claim of right. Both contentions are necessary—to relitigate the initial extraction of fines under ATES would raise serious res judicata concerns, while fixating on the city’s failure to return the money would turn all money judgments against governments into takings. But in their attempt to avoid those pitfalls, the plaintiffs find themselves trying to have their cake and eat it too. They conceive of the city as “taking” their money in 2019, even when that money had been in the city’s possession since 2010 at the latest. And they insist that the city’s conduct from 2008 to 2010 was necessary to effect a taking that did not actually arise until 2019. Such a theory sits uneasily with a linear conception of time and is not rooted in the text of the Fifth Amendment.
Slip op. at 5.
But taking my money and keeping it sure looks to our untrained eyes as a taking. And we thought the Supreme Court told us in cases like Cedar Point that it is taking an "intuitive" approach to this thing called "property." This isn't exactly new, right? See, e.g., United States v Dickinson, 331 US 745, 748 (1946) ("The Fifth Amendment expresses a principle of fairness, and not a technical rule of procedure enshrining old or new niceties regarding 'causes of action' -- when they are born, whether they proliferate, and when they die.").
The Fifth Circuit asserted that its theory is intuitive, see slip op. at 7 ('[t]hat conclusion makes intuitive sense..."), because "it is odd to conceive of a government as instantly 'taking' property ... that has been in its actual possession for years." Id. The panel rejected the plaintiffs' reliance on Vogt v. Bd. of Comm'rs, 294 F.3d 684 (5th Cir. 2002), which held in favor of the plaintiffs, although not because the Board's failure to satisfy a state court judgment was a taking. Slip op. at 5-6. The problem according to the Fifth Circuit, was that if it affirmed the existence of a takings claim here
it would allow plaintiffs in a case like this to bring a federal takings claim the day after receiving a favorable judgment, even if the defendant were acting quickly and diligently to return the plaintiffs' property.
Slip op. at 708.
And to us, that's the real crux of the case and the issue the court should have responded to: has the delay here been reasonable, and has the government complied without undue delay? See Joslin Mfg. Co. v. City of Providence, 262 U.S. 668, 688 (1923) (the Fifth Amendment is satisfied when "the public faith and credit are pledged to a reasonably prompt ascertainment and payment"); Bragg v. Weaver, 251 U.S. 57, 62 (1919) (compensation must be provided "without unreasonable delay").
So instead of a blanket rule that failure to satisfy a state court order can never give rise to a federal court takings claim, these standards ('reasonably prompt," and "unreasonable delay") point to a case-by-case determination, with this question presented to the factfinder: has the government unreasonably delayed? Is it taking too long? Thus, where a defendant "were acting quickly and diligently to return the plaintiffs' property" the factfinder should find for the defendant. And on the other hand, aren't there some some circumstances in which the delay might not be acceptable and becomes the "unreasonable delay" the Supreme Court focuses on? That, it seems to us, is the real question that should be addressed in these cases.
But for the time being, what can you do if a local government should pay up or return your property but doesn't ... and then a state court orders it to pay up or return your property, but it doesn't? Nothing (at least in the Fifth Circuit). Like the poor "others" forced to wait in Casablanca, all you can do is wait ... and wait ... and wait ... and wait.
Lafaye v. City of New Orleans, No. 21-30358 (5th Cir. June 1, 2022)
