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Hawaii 5-80: Land Use Law At The University Of Hawaii

Starting in January, we'll be teaching the venerated, and oh-so-important Land Use course (Law 580) at the University of Hawaii's Law School.

We're at least temporarily stepping into some mighty big slippers (this is Hawaii, so we don't always wear shoes), as this is the course that our mentor Professor David Callies taught for decades. And is there a better venue in which to teach and study land use law and regulation, and its limits? After all, Hawaii may be the most heavily-regulated land on the planet, and is a focal point for every issue you can think of, from zoning to environmental restrictions to takings to public trust to subdivision to admin law to ... well, you get the drift.

We'll cover those topics, as well as the fundamentals. And we have a few surprises up our sleeve - some impressive guest lecturers, explorations of dirt law careers, and maybe a field trip or two. We'll bring you the highlights here, as they happen.

Is there a bit of pressure on us to get it right? You bet. But are we looking forward to it (not just an opportunity to head back to the 808, but because this is a great subject)? You bet.

Today's Dirt Law SCOTUS Arguments: Whether The Federal Quiet Title Act's Statute Of Limitations Is Jurisdictional Is A Property Rights Question

As we noted earlier this week, the Federal Quiet Title Act isn't exactly on the public radar screens. Especially questions about whether the Act's 12-year statute of limitations is "jurisdictional" or merely a claims processing rule.

Thus, you are not likely to see throngs of protesters on the Supreme Court steps today (Wednesday, Nov. 30, 2022 at 10:00 a.m). when the Court hears oral arguments in Wilkins v. United States, No. 21-1164.

Our law firm colleague Jeff McCoy is arguing, and you can watch him and the rest of our legal team explain what's at stake in the above video. Or you can tune in and listen live to the audio here.

To hear what others think this case is about, read on:

• A squabble over a forest road may pave the way for further narrowing of “jurisdictional” timing rules (by Ronald Mann, SCOTUSblog) ("A casual observer sees a prominent red flag when the government brief relies entirely on precedent and can’t bring itself to argue that the government’s position tracks the court’s current rules of statutory interpretation. Several other features of the case mark this as a grant for the purpose of reversal.")
• This question could seal fate of SCOTUS Forest Service fracas (by Pamela King, Greenwire)

Don't miss it.

New Cert Petition: There Must Be A Real Emergency Before Commandeerings Are Exempt From Compensation

Here's the latest in a case we've been following.

In this cert petition, business owners on the losing end of a Co-19 shutdown order assert that the Sixth Circuit got it wrong when it concluded that the "overriding public purpose" of the shutdown orders should be given what amounts to dispositive weight under the "character of the government action" Penn Central factor.

The Sixth Circuit correctly (in our view) rejected the district court's rationale that the takings claim could be rejected simply because "the state acts pursuant to its police powers to protect public health." Slip op. at 15. But the Sixth Circuit didn't stop there, and affirmed the dismissal because the "character" of responding to the Co-19 emergency was so overwhelming that it outweighed the other two factors (which the court had already concluded "weigh in favor of the Plaintiffs").

As we explained in an article on emergency takings last year, ("Evaluating Emergency Takings: Flattening the Economic Curve," 29 Wm & Mary Bill of Rights J. 1145 (2021)), the Penn Central "character" inquiry does not ask about the government's reasons or motive. That is a due process inquiry. No, the character of the government action inquiry asks about the nature of the intrusion on the owner's property rights. [Hat tip to the cert petition, which refers to our article several times.]

Here's the Question Presented:

Is the government required to prove with evidence that its action taken during an emergency which intrudes on private property rights was a necessity in order to be relieved of its duty of compensation for a taking under the Fifth Amendment?

Follow along on the Court's docket here.

Petition for a Writ of Certiorari, Bojicic v. DeWine, No. 22-493 (U.S. Nov. 23, 2022) by RHT on Scribd

Ninth Circuit: Property Owners Don't Have A Fundamental Right To Use And Occupy Their Own Property

Here's a short one you might have overlooked because it's an unpublished memorandum opinion.

In Kagan v. City of Los Angeles, No. 21-55233 (Nov. 10, 2022), a Ninth Circuit panel summarily affirmed the dismissal of property owners' challenge to a city ordinance prohibiting eviction of "protected status" tenants from a duplex in order to regain the unit for family use. 

The takings claim was rejected for the now-familiar Yee rationale: there's no physical invasion or a taking of the right to exclude, because the owner wasn't forced to let the tenant on the premises in the first place. In other words, once you let someone in your property, you lose the right to exclude:

Here, as in Yee, the Owners “voluntarily rented their land,” and were not required to submit to physical occupation by another. Id. at 527. Moreover, the RSO allows at-fault evictions, such as evictions for creating a nuisance, breaking the law, or failing to pay rent, L.A. Mun. Code § 151.09(A), and grants landlords the right to end a protected tenancy by removing the entire property from the rental market with one year’s notice, id. § 151.23(B). Accordingly, the Owners’ claim that the City has compelled them to “refrain in perpetuity from terminating” this tenancy is unavailing, Yee, 503 U.S. at 528, and we affirm the dismissal of their takings claim with prejudice.

Slip op. at 3.

The substantive due process claim fared no better. The panel concluded that the owners do not possess a property interest protected from deprivation by the due process clause. Say what? They do own property, just not the property interest in, you know, actually occupying their property:

As appellants cite no authority for their contention that their right “to use and occupy their own property” is a fundamental right, they can only sustain a substantive due process claim if they can allege that the RSO is “arbitrary, irrational, or lacking any reasonable justification in the service of a legitimate government interest.”

Slip op. at 3-4. Rational basis review? You know what that means: you lose.

Finally, you can guess what the panel did with the procedural due process claim: the owners, the panel concluded, were not deprived of an adequate forum because they could have challenged the tenant's "protected status" in an unlawful detainer proceeding.

Kagan v. City of Los Angeles, No. 21-55233 (9th Cir. Nov. 10, 2022) (unpub.)

SCOTUS Argument Preview: Is The Federal Quiet Title Act's Statute Of Limitations "Jurisdictional?"

The Federal Quiet Title Act isn't exactly on the public radar screens. Especially questions about whether the Act's 12-year statute of limitations is "jurisdictional" or merely a claims processing rule.

Thus, you are not likely to see throngs of protesters on the Supreme Court steps this Wednesday, Nov. 30, 2022 at 10:00 a.m. when the Court hears oral arguments in Wilkins v. United States, No. 21-1164.

Our hands are somewhat tied here from making major comments, since our law firm represents the property owners. But thankfully, our friend and colleague Stephen Davis has written up a summary of the issues in the case, and more importantly, explains why the issues are important to property rights:

The federal government’s litigation strategy in Wilkins attempts to deny landowners their remedy under the Quiet Title Act. The Supreme Court should carefully consider the potential ramifications for private property rights in deciding whether the Quiet Title Act’s statute of limitations is jurisdictional.

Read Steve's entire summary here: "Wilkins v. United States: Is the Quiet Title Act’s Statute of Limitations Jurisdictional, and How Does the Answer Affect Property Rights?"

Here's the Question Presented in the Wilkins case:

Two Montana landowners filed a quiet title action seeking to resolve a dispute over the scope of an easement held by the United States that runs across their land and the federal government's duties under the easement. The District Court held that the Quiet Title Act's statute of limitations is jurisdictional, found that the landowners did not prove that their claims arose within twelve years of the lawsuit being filed, and dismissed the case. The District Court's treatment of the statute of limitations as jurisdictional-rather than a claim-processing rule- subjected the landowners to different standards for resolving the motion to dismiss, allowing the court to dismiss the case without holding a hearing to determine and resolve disputed facts.

In conflict with the Seventh Circuit, the Ninth Circuit affirmed, holding the Quiet Title Act's statute of limitations is jurisdictional.

The question presented is:

Whether the Quiet Title Act's Statute of Limitations is a jurisdictional requirement or a claim--processing rule?

Be sure to listen in on Wednesday.

Shame On You: Govt Exerting "Irresistible Pressure" On (But Not Forcing) You To Buy Worthless Bonds Isn't A Taking

One from the U.S. Court of Appeals for the First Circuit.

In In re Financial Oversight & Management Board for Puerto Rico, No. 22-1048 (Nov. 22, 2022), the court affirmed the district court's 12(b)(6) dismissal of a takings claim because the government didn't actually force the plaintiff credit unions into buying what the complaint alleges are "worthless government-issued securities," even where "the defendants knew - but did not disclose - that these would be losing investments given the precarious state and dire financial situation in which Puerto Rico found itself at the time." Slip op. at 1.

Conned into purchasing junk bonds? That's on you.

This is another Takings Clause claim arising out of the Puerto Rico governmental bankruptcy. [Disclosure: we represent some of the property owners/Respondents in that other matter, now at the cert stage in SCOTUS.] The complaint alleged that in a series of meetings over the course of four years, Puerto Rico officials misled the credit unions into investing in securities that turned out to be worthless because the Commonwealth's finances, contrary to the picture portrayed, was in shambles. This case is an adversary proceeding in the subsequent bankruptcy case.

To understand the court's handling of the takings claim, you might want to read -- or at least skim -- the first part of the opinion in which the court affirms dismissal of the credit unions' fraud claim because (you guessed it) the claim was not pleaded with the right about of specificity. See slip op.at 24 ("specificity is the name of the game when alleging fraud, and the Credit Unions have not filled the bill here"). 

Slide down to page 29 of the slip opinion, where the takings analysis starts. Here's how the court describes the allegations in the complaint:

In the SAC, the Credit Unions allege that the defendants used "regulatory powers" to take "material portions of Plaintiffs' cash and liquid assets," resulting in "illegally appropriat[ing] the moneys of the Cooperatives to finance the government operation" by providing "materially diminished and value impaired government papers that did not constitute just compensation." According to the plaintiffs, the defendants used the circular letters to compel the Credit Unions "to purchase knowingly materially diminished and value impaired government bonds," "depriv[ing] the Cooperatives' property of any significant economic value." The Credit Unions allege the defendants' actions resulted in both a per se physical taking and a categorical regulatory taking.

Slip op. 29-30 (footnote omitted).

The court summed up the takings claim in a footnote:

As best we can tell, based on closely examining the SAC, the Credit Unions' takings claim theory seems to be that they were compelled to spend more on the bonds than the bonds were worth on the date of purchase. Problem is, merely alleging in the SAC an after-purchase decline in the value of the bonds in support of this theory does not, in and of itself, mean the bonds were not worth what the Credit Unions paid at the time of purchase. And relatedly, the allegations in the SAC about what the government and its instrumentalities knew at the time the Credit Unions purchased the bonds are all no-meat-on-the-bones conclusory in nature, e.g., the "instruments lacked true value," and the defendants pushed the bonds "with full knowledge of the government's lack of financial capacity to pay."

Slip op. at 33 n.20.

The credit unions alleged the government put them under "irresistible pressure" to buy the securities, but the court concluded this wasn't enough because they were not "require[d] to purchase." Slip op. at 34. The government "did not instruct the Credit Unions to purchase the bonds." Id. Yeah, the government "authorized and enticed the Credit Unions to purchase the bonds," but the purchase wasn't at the point of a gun, and the credit unions "voluntarily participate[d]" in the deal. Id. ("[W]here a property owner voluntarily participates in a regulated program, there can be no unconstitutional taking.") (quoting Franklin Mem'l Hosp. v. Harvey, 575 F.3d 121, 129 (1st Cir. 2009)).

Apparently, the plaintiffs did not allege a due process claim.

And we close by noting two items: (1) the opinion uses Courier New (very Old School, First Circuit), and (2) the opinion has a somewhat "hip" feel to it - casual, conversational; and instead of "Conclusion," it ends with the "Wrap Up." Solid.

In re Financial Oversight & Management Board for Puerto Rico, No. 22-1048 (1st Cir. Nov. 23, 2022)

We're Thinkful For All You Dirt Law Lovers!

On this Thinks...uh Thanksgiving holiday, we're grateful for all you property law and property rights mavens out there. Drive on, friends.

And no Thanksgiving gathering would be complete without the obligatory dramatic reading of John Stossel's timeless holiday classic, "Private Property Rights Made the First Thanksgiving Possible." We're certain your relatives are eagerly awaiting your performance, including your interpretive dance. They'll be very thinkful, we're sure.

CA5: No Jurisdiction Over Federal Takings Claims Against A State

A quick one (2 page, per curiam) from the U.S. Court of Appeals for the Fifth Circuit to send you into the holiday.

In Devillier v. Texas, No. 21-40750 (Nov. 12, 2022), the court summarily concluded that "the Fifth Amendment Takings Clause as applied to the states through the Fourteenth Amendment does not provide a right to action for takings against a state[.]" Slip op. at 1-2.

This is a very short opinion. Here's the entirety of the decision (minus footnotes):

The State of Texas appeals the district court’s decision that Plaintiffs’ federal Taking Clause claims against the State may proceed in federal court. Because we hold that the Fifth Amendment Takings Clause as applied to the states through the Fourteenth Amendment does not provide a right of action for takings claims against a state, we VACATE the district court’s decision for want of jurisdiction and REMAND with instructions to return this case to the state courts. The Supreme Court of Texas recognizes takings claims under the federal and state constitutions, with differing remedies and constraints turning on the character and nature of the taking; nothing in this description of Texas law is intended to replace its role as the sole determinant of Texas state law. As such, this Court lacks jurisdiction to review these claims.

That's it.

The district court concluded otherwise, holding property owners could sue the State of Texas in federal court for inverse condemnation under the U.S. and Texas Constitutions' just compensation clauses. 

Devillier v. State of Texas, No. 21-40750 (5th Cir. Nov. 23, 2022) (per curiam)

Here's The Program For The 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-4, 2023, Austin

Here it is, the official agenda and program for the 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, February 2-4, 2023 (with a special event the evening of Wednesday, February 1, 2023 to entice you to arrive early).

Here's the brochure with the complete agenda, schedule, and faculty listing. But to tempt you, here are some of the highlights of the program:

• Everything Old is New Again: Why Today’s Practitioners Need to Understand the Original Meaning of the Takings and Just Compensation Clauses

• Private Utility Takeovers – Lessons From a 67 Day Trial

• Valuation Issues When Billboards and Signs are Condemned

• Setting Client Expectations and Identifying Red Flags

• Developing Property Right Issues in Texas - Questions and Answers from the Bench: A View From the Bench (with Texas Supreme Court Justice Jimmy Blacklock)

• Eminent Domain and Regulatory Takings Updates: Important Decisions You Need to Know

• Ethics: Building Your Practice by Mentoring the Next Generation of Eminent Domain Lawyers

• ...and much more!

To register, go here.

Register now and hold your space. In the past several years, we have sold out due to the conference room capacity, and the conference hotel block. So don't delay. 

Looking forward to seeing everyone in Austin for the 40th edition of the Conference.

Program Brochure, 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Austin, Texas, Feb 1-...

Let's Take A Deeper Look At Takings Ripeness, Ninth Circuit

Well, that was quick. As we noted here, we recently argued a case in the Ninth Circuit (October 20, 2022) about whether a regulatory takings claim is ripe. 

Not long after we posted the argument recording, the Ninth Circuit panel issued a short memorandum opinion rejecting our arguments wholesale (November 1, 2022).

So earlier this week, we asked the entire Ninth Circuit to take a look. Here's our en banc petition.

We'll leave it to you to read it and see why we think this one is ripe.

Appellants' Petition for Rehearing En Banc, Ralston v. San Mateo Cnty., No 21-16489 (9th Cir. Nov. 15, 2022...

Video: "The Future of Private Property Regulation in America"

Check it out: our Pacific Legal Foundation colleagues Jim Burling, Jon Houghton, and Jeff McCoy, along with Jeremy Hopkins (Cranfill & Sumner, North Carolina), share with us the latest on property rights, Sackett, takings, the future of Penn Central, and the upcoming SCOTUS arguments in Wilkins v. United States (is the Federal Quiet Title's statute of limitations jurisdictional?).

Don't miss it.

It Was A Hundred Years Ago Today ... Happy Argument Birthday, Pennsylvania Coal v. Mahon

Yes, the granddaddy of all SCOTUS regulatory takings cases, from which we got such phrases as these was argued 100 years ago this day.

• "The general rule, at least, is that, while property may be regulated to a certain extent, if regulation goes too far, it will be recognized as a taking."
• "Government hardly could go on if, to some extent, values incident to property could not be diminished without paying for every such change in the general law."
• "We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change."
• "As long recognized, some values are enjoyed under an implied limitation, and must yield to the police power. But obviously the implied limitation must have its limits, or the contract and due process clauses are gone."
• "When it reaches a certain magnitude, in most if not in all cases, there must be an exercise of eminent domain and compensation to sustain the act."

That's right, Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922) was argued today a century ago. November 14, 1922. The case was argued in what is now called the Old Senate Chamber (the Court only later moved across the street to its present digs).

If only they had the arguments recorded!

Exhibits in connection with Brief of the City of Scranton, Intervenor, Pennsylvania Coal Co. v. Mahon, No. 2...

Tanning Beds v. Liquor Stores - No Equal Protection, No Physical Take, No Lucas Take For Co-19 Biz Shutdown Order

To "slow the spread" in the early days of the Co-19 thing, the City ordered businesses to shut down. But not Wal-Mart, liquor stores, or churches. Golden Glow, a tanning salon objected, and told anyone who would listen that it could operate without person-to-person contact. Sorry, no exceptions.

Federal lawsuit followed, alleging the claims you might expect: equal protection and takings claims. Predictably, the district court granted summary judgment to the City.

And just as predictably, in Golden Glow Tanning Salon, Inc. v. City of Columbus, No. 21-60898 (Nov. 8, 2022), the U.S. Court of Appeals for the Fifth Circuit affirmed. The opinion, as you might expect is short.

Was Golden Glow treated differently from other businesses similarly situated without a rational reason? No. First, Golden Glow is similar to other shut down businesses: "[e]ach class of shut-down business provides recreational, social, or, as some would say, 'nonessential' services; the clientele typically spend more than a few minutes at the location; and the likelihood of close person-to-person contact may pose risks." Slip op. at 4. Second, the distinction between which businesses got shut down and which didn't isn't subject to any meaningful judicial scrutiny because of rational basis review.

The right to work isn't a "fundamental" right so you get whatever the City wants to give:

Golden Glow contends that the City Ordinance created an arbitrary distinction between tanning salons and liquor stores that bore no rational relationship to public health given the salon’s ability to operate safely and without customer contact. The City responds that tanning salons, when compared to liquor stores, were not “so important to society that the benefits of continued operations . . . outweigh[ed] the risks of spreading the virus.” The City rationalizes that the length of time spent in a tanning bed as compared to a liquor store raised the probability that the virus was more likely to spread in a tanning salon.

Slip op. at 7-8. The ordinance's reach might have been too over or underinclusive, but so what? Invisible aliens might be walking among us.

The takings claim fared no better. The court rejected the physical invasion claim because there was not a physical invasion "because the City Ordinance did not authorize physical intrusions onto Golden Glow's property." Slip op. at 9 (footnote omitted). Of course, this was not like other physical-invasion-by-regulation cases in which the government invites third-parties to come on your property. But that conclusion dodges the real question of whether a business owner has a right to include patrons. Yeah, maybe Golden Glow would have lost that argument as well, but it would be nice to at least see the proper question being answered.

The court just as easily rejected the Lucas takings claim, concluding that the shutdown order did not render "the entire property 'valueless.'" Slip op. at 10. Apparently, Golden Glow did not assert a Penn Central taking in the district court, so the Fifth Circuit declined to rule on that issue on appeal. See slip op. at 10 n.8.

Judge Ho issued an interesting concurring opinion, arguing that "[i]f we're going to recognize unenumerated rights as fundamental, why not the right to earn a living?" Slip op. at 11, 12 ("Under the Court’s approach to unenumerated rights, we privilege a broad swath of non-economic human activities, while leaving economic activities out in the cold."). Check it out.

Golden Glow Tanning Salon, Inc. v. City of Columbus, No. 21-60898 (5th Cir. Nov. 8, 2022)

County: We're Short Of Housing, So Let's Do Rent Control! Court: Not So Fast.

Florida law makes it really difficult for municipalities to adopt rent controls. State statutes and the Florida Constitution erect all sorts of substantive and procedural hurdles that must be crossed. For example, a statute requires findings that any such measures are responding to an emergency, a "grave ... menace to the general public," and places the burden on the municipality to not just make findings, but back up those findings with facts, and show that rent control will actually "eliminate" the emergency. Single-family properties cannot be rent controlled. And any ordinance adopted by a municipality must be approved by the voters.

Facing what it concluded was a problem -- a shortage of 26,500 housing units and a population increase of 25% in the last decade - Orange County's County Commission voted, 3-2, to control rents. The measure limited the frequency and amount of rent increases.

After the measure was placed on the ballot for [today's] general election, the Realtors Association sued to declare the ordinance unconstitutional and to prevent the measure from being placed on the ballot. It sought an injunction, and even though the trial court concluded the Association had a substantial likelihood of winning on the merits, it declined to remove the measure from the ballot because even if invalid, a vote would allow the public to offer its opinion on rent control. Both parties appealed.

In Florida Ass'n of Realtors v. Orange County, No. 5D22-2277 (Oct. 27, 2022), the Florida District Court of Appeal agreed that the measure was likely to be illegal, but reversed the trial court's allowing it on the ballot. The court concluded that Orange County could not meet its burden to show that there is a housing emergency, nor its burden to prove that rent control would alleviate any such emergency. "Emergency" means a "sudden or unexpected" and temporary condition, and here, the housing shortage is the result of "historical structural issues" and not a surprise. Things like population growth, and longstanding housing shortages are not sudden. Moreover, the "County Attorney warned the County that these factors would be legally insufficient before it enacted the Ordinance." Slip op. at 18.

Even if the housing shortage qualified as an emergency, the County didn't prove that that it was "so grave as to constitute a serious menace to the general public." Slip op. at 19. To be a "menace," the threat must be a "grave threat or danger to the Orange County citizens as a whole." Slip op. at 20. "At most, the County cites to a low rental vacancy rate and low availability of affordable housing." Slip op. at 21. Yes, this affects renters in Orange County, but that isn't enough. It has to affect everyone.

Next, the court concluded that even if such conditions exist, the rent control measure would not address or remedy the problems. Not only would the measure not "eliminate" the problem as the statute requires, testimony at trial showed that it would have little effect, and even the County's consultant report conclude that rent control "may actually hurt rental conditions by 'imped[ing] the objective of speeding overall housing deliveries as well as creat[ing] a number of unintended consequences.'" Slip op. at 23.

"In sum, for this third and independent reason, the trial court correctly concluded that the Association satisfied its burden to demonstrate a substantial likelihood of success on the merits of its challenge to the Ordinance's validity." Slip op. at 24.

The court of appeal also concluded the ballot summary was misleading: "[t]he summary is misleading not because of what it says, but because of what it does not say." Slip op. at 27. The summary stated:

Rent Stabilization Ordinance to
Limit Rent Increase for Certain
Residential Rental Units

Shall the Orange County Rent Stabilization Ordinance, which limits rent increases for certain residential rental unites in multifamily structures to the average annual increase in the Consumer Price Index, and requires the County to create a process for landlords to request an exception to the limitation on the rent increase based on an opportunity to receive a fair and reasonable return on investment, be approved for a period of one year?

The summary "only advises the voter about the amount of rent control, but not its frequency," even though the actual ordinance limits increases to once in a twelve-month period. Slip op. at 27. The summary thus makes the measure appear less extensive than it actually is.

Finally, the court of appeal disagreed with the trial court's refusal to enjoin the election and keep the issue from the voters:

No public interest can be served by allowing the potential enforcement of a rent control ordinance that fails to meet the facial requirements of section 125.0103, and Article 8, section 1 of the Florida Constitution. We recognize that a local government's aim to enact legislation to address a complex, multifaceted issue is noble, and citizens might believe that rent control is a harmless was to accomplish that aim. But as we stated at the outset of this opinion, the power of local government is limited, and a critical limitation on this power is the Florida Constitution.

Similarly, no public interest can be served by having the electorate vote on a misleading ballot measure.

Slip op. at 32-33.

Fla. Ass'n of Realtors v. Orange County, No. 5D22-2277 (Fla. Dist. Ct. App. Oct. 27, 2022)

Whether $23K Traffic Fee Is Proportional To One Single-Family Home Is Beyond The Ken Of Judges

The County of El Dorado requires everyone seeking a building permit for new development to pay a fee to mitigate the additional traffic that the proposed development is predicted to cause. But the County doesn't calculate the fee by actually looking at a proposed development and predicting what traffic impacts in may be responsible for. Rather, it has a generic fee schedule that applies to all proposed developments broken down by location and type (residential, commercial, etc.). We don't care whether your development actually causes more traffic (or if it does, the extent of the increase), we're hitting you all up.

Or as the California Court of Appeal put it in Sheetz v. County of El Dorado, No. C093682 (Oct. 19, 2022), "[i]n assessing the fee, the County does not make any 'individualized determinations' as to the nature and extent of the traffic impacts caused by a particular project on state and local roads." Slip op. at 3.

Thus, when Sheetz asked for a building permit for a 1,854 square foot "manufactured home" (i.e., a mobile home), the County said "sure ... just pay the scheduled traffic mitigation fee." Hitting up the schedule, the fee worked out to a whopping $23,420. It appears El Dorado County is appropriately named.

Sheetz paid up, and then protested that this fee had not been calculated legally. The County had not shown that his modest proposal would create additional traffic that only $23 Grand would mitigate. When the County didn't respond, he sued, asserting claims for an unconstitutional condition under Nollan/Dolan, and for violation of the California Mitigation Fee Act. The trial court sustained the County's demurrer and denied the petition for writ of mandate.

None of this bothered the court of appeal, and you can skip to page 12 of the opinion to understand why. As you might predict, the court concluded that the Nollan/Dolan nexus and rough proportionality requirements apply only to these things we call "exactions," and the County here is not imposing an "exaction." As the opinion put it, "while the Nollan/Dolan test applies to monetary land-use exactions which are imposed ad hoc on an individual and discretionary basis, it does not apply to generally applicable development impact fees imposed through legislative action." Slip op. at 12.

Yeah, there's "some danger" of "improper leveraging" of the power to approve or disapprove development and use of private property (ya think?), "such generally applicable legislation is subject to the ordinary restraints of the democratic political process."

Ah yes, the "leave justice to politics" rationale:

A city council that charged extortionate fees for all property development, unjustifiable by mitigation needs, would likely face widespread and well-financed opposition at the next election. Ad hoc individual monetary exactions deserve special judicial scrutiny mainly because, affecting fewer citizens and evading systematic assessment, they are more likely to escape such political controls.”

Slip op. at 13 (quoting San Remo Hotel L.P. v. City and County of San Francisco, 27 Cal.4th 643, 671 (Cal. Ct. App. 2002)).

What saved the traffic fee demand from judicial scrutiny was that it was not discretionary, and applied to everyone. Thus, the unconstitutional condition claim was subject only to rational basis review, and the Mitigation Fee Act claim was subject only to a reasonable relationship test. And we know what those mean: this stuff is just too complex for judges to figure out. Mess around with one guy and you might get a stern judicial talking to. But mess around with everyone? Sorry, we can't figure it out because your world frightens and confuses us!

This isn't a new issue, and not only is there a long-standing lower court divergence, the Supreme Court has declined offers in the past to review the legislative vs adjudicative distinction (vel non) when the government demands your money or your rights.

Will the Court staying on the sidelines continue? Stay tuned.

Sheetz v. El Dorado County, No. C093682 (Cal. Ct. App. Oct. 19, 2022)

New Cert Petition: Just Compensation Claims Can Be "Adjusted" (Eliminated Or Reduced) In Bankruptcy, Right?

Remember that First Circuit opinion from a few months back, which held - contrary to a prior 2-1 Ninth Circuit panel - that just compensation claims are not dischargeable in a governmental bankruptcy?

Well, the government recently filed a cert petition asking the Supreme Court to take the case and hold that there's nothing special about a just compensation judgment or claim, and that the govermnent's obligation to provide compensation for takings is just plain-old debt. And you know what happens to plain-old debt in bankruptcy: the creditor often gets bupkis. 

And before we go further, a disclosure: we represent some of the property owners/Respondents in the case. So we're not going to comment in detail, but shall leave it to you to review the petition, and the Question Presented:

The decision below is the first by a circuit court in history to hold that the Constitution prohibits a category of unsecured claims from being discharged in bankruptcy. Specifically, the First Circuit held that unsecured claims for just compensation that arise under the Fifth Amendment’s Takings Clause before bankruptcy cannot be adjusted in a bankruptcy case, even though claims for money damages arising under other constitutional provisions can. The court believed the Takings Clause mandates a remedy and that unique feature renders the remedy non-dischargeable.

The First Circuit acknowledged it was creating a split with the Ninth Circuit, which, when faced with the identical question, held that pre-bankruptcy unsecured claims for just compensation are dischargeable. The First Circuit’s novel ruling frustrates both pillars of the Constitution’s bankruptcy power—fresh starts for debtors and equitable treatment of unsecured claimholders.

The Question Presented is: Are pre-bankruptcy unsecured claims for just compensation under the Takings Clause uniquely non-dischargeable, unlike every other type of unsecured claim?

Stay tuned. We're thinking there is something different and special about Just Compensation judgments and claims. After all, the Supreme Court has repeatedly told us that the obligation to provide compensation for takings is "self-executing," and we think that means something more than the soverign's solemn constitutional obligation can be wiped out with a wave of the bankruptcy wand. 

Follow along on the Court's docket here.

Petition for a Writ of Certiorari, Financial Oversight & Mgmt Bd for Puerto Rico v. Cooperative de Ahorro y...

CAFED Hears Arguments In Two Takings Cases

Ideker Farms, Inc. v. United States, No. 21-1849

As written up in the FedCircuitBlog (a must-follow for all you federal takings mavens):

It concerns the federal government’s liability for taking private property. Specifically, in this case, the Federal Circuit will review the conclusion of the Court of Federal Claims that the government’s action was the cause-in-fact of flooding damage and that, as a result, a taking-by-flooding occurred. The government appeals the CFC’s judgment, while Ideker Farms cross-appeals.

Behrens v. United States, No. 22-1277

Also from the FedCircuitBlog:

Behrens v. United States, which concerns a claim the federal government was liable for taking land for public use through the National Trails System Act. Specifically, in this case, the Federal Circuit will review the determination by the Court of Federal Claims that the plaintiffs were not entitled to compensation because the scope of the easement in question was broad enough to encompass railbanking and the construction of a hiking and biking trail.

What's "The State of Takings Law: 100 Years After Pennsylvania Coal Co. v. Mahon and One Year After Cedar Point Nursery v. Hassid"? Incoherent (But Getting Better)

For the last week, the blog has been a bit idle. That hasn't been because we're slowing down, but was mostly the result of our blog platform being worked on behind-the-scenes, which knocked a lot of the hosted blogs offline, this one included. But things look good now, so here we are.

We were also on the road, traveling to New York for the Seventeenth Meeting of the American College of Business Court Judges, where we were able to join an august panel of takings mavens (pictured above, L-to-R: Judge Paul Wallace, Professor Julia Mahoney, some guy, Nancie Marzulla, and Professor Richard Epstein) to talk about the state of takings law.

The title of our program was "The State of Takings Law: 100 Years After Pennsylvania Coal Co. v. Mahon and One Year After Cedar Point Nursery v. Hassid," and we spent our time discussing and debating the state of takings law and theory.

When it came our turn at the mic, we started by answering the call of the question: the current state of takings law is "incoherent...but with the footnote that it appears to be getting better." We won't go into the details of why we so concluded, but you can guess: the default test for a regulatory taking, Penn Central, is hardly a model of coherence and when you add in the various procedural traps that remain, you get ... a lot of fodder for panels like these.

Our appreciation goes out to George Mason U. Law School and Professor Donald Kochan, who were kind enough to include us among these august speakers.