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We're Underway With The 41st ALI-CLE Eminent Domain & Land Valuation Litigation Conference, New Orleans

As the title of this post notes, we are underway with the 41st ALI-CLE Eminent Domain & Land Valuation Litigation Conference, in New Orleans. 

But the magic doesn't just happen on its own. It takes a lot of hard set-up work by the ALI-CLE staff to make #EminentDomain2024 a great event. Here's some of what goes on beforehand.

The "before" view of the Big Room

In the rear with the (AV - webcast) gear

Getting closer...

We're not all work...just outside the conference room

Dig Property Rights? Join Our Firm As A Courtroom Property Rights Lawyer

If you dream such dreams as this photo, read on.

My law firm, Pacific Legal Foundation, is on the hunt for lawyer to join our Property Rights group (yours truly is the Director of Property Rights Litigation, so you will be working with me and the other takings and con law mavens in our practice). Here's the full description of the spot:

You: An entrepreneurial freedom fighter with a passion for property rights litigation. You work with more senior-level attorneys to find and win cutting-edge property rights cases in trial and appellate across the country. You work as a part of a collaborative team, but are also self-motivated and able to work independently with minimal supervision. You are eager to learn, relentless, and a focused lawyer.

Them: Bureaucrats, city councils, mayors, governors, and federal agencies stripping Americans of their rights every day. There’s a lot of government overreach out there, and it’s backed by seemingly endless resources. But fortunately, like all lumbering giants, abusive government is most vulnerable when countered by individuals who act strategically and nimbly, take calculated risks, have each other’s backs, and are confident in, and passionate for, the cause—the very sort of property rights swashbucklers we employ in spades here at PLF.

Us: We fight back. Pacific Legal Foundation is the nation’s first and most successful public interest law firm dedicated to vindicating individual liberty and protecting the fundamental right to property as the “guardian of every other right.” PLF has an unmatched record in the United States Supreme Court, with 17 victories in the Court. We also are actively litigating more than a hundred cases in trial and appellate courtrooms across the nation.

We are a next-generation public interest law firm. What does “next-generation” mean for a legal nonprofit? It means we aren’t interested in doing the same thing as everyone else. We aspire to be the best player in a constantly changing game.

Here’s what you get to do in this role:

You will be a courtroom lawyer in PLF’s Property Rights Practice Group. From Nollan to Koontz to Knick to Cedar Point Nursery to Tyler, PLF’s property rights litigation is unparalleled. You will help find and win the next important Supreme Court property rights case, becoming recognized as a nationwide leader on property rights litigation. Occasionally, You will have opportunities to speak at conferences or with the media about your cases or important property rights issues.

You will be a key contributor to PLF’s property rights practice group. You will work in teams with junior and senior attorneys, growing in your expertise and knowledge and elevating the team’s efforts to defend property rights. You will have the latitude to think big and the resources to execute. At PLF, you will be at the forefront of shaping property rights for all Americans.

In a nutshell, we’re seeking someone passionate about liberty and property rights, someone who is magnanimous, and someone who is a bold and relentless freedom fighter.

Getting down to brass tacks, your specific job duties likely will include:

• Winning property rights cases! Finding, developing, and litigating important property rights cases.
• Working with other attorneys to develop and litigate PLF’s property rights cases to protect the constitutional rights of Americans.

Qualifications

• 1-3 years of litigation or judicial clerkship experience
• Passion to litigate property rights cases
• A deep understanding of the moral and constitutional basis for property rights is a huge plus
• A track record of successful legal work
• Outstanding interpersonal communication skills
• A knowledge of, and passion for, the ideas of freedom and individual liberty
• The ability and willingness to travel approximately 10% to 15%

General Information

Pacific Legal Foundation identifies and litigates important legal issues to set landmark precedents that benefit Americans nationwide. Using strategic and principled litigation, communications, and research, we battle for freedom in the nation’s courts and the court of public opinion.

As a national nonprofit organization, PLF has brick-and-mortar offices in Sacramento, California; Arlington, Virginia; and Palm Beach Gardens, Florida, although approximately half of the staff work from home offices across the country. You can work physically in any of our offices or request to work virtually. This position is particularly suited for a lawyer who would like to be in one of our offices, or who is a focused and relentless self-starter eager to take advantage of our cross-country virtual office environment by proactively collaborating and communicating with colleagues, clients, and other professionals.

This is a full-time, permanent position. PLF is committed to recruiting and retaining the highest-quality talent available nationwide, and we offer a total compensation package that includes a competitive salary, medical and dental insurance, and employer-paid retirement savings. We take work-life balance seriously through our generous paid leave and flextime policies. We have a flexible, collaborative, positive, and collegial work environment. We take pride in investing in your future and encourage internal advancement. PLF is the place for someone principled, tenacious, and determined to succeed in positively shaping the future of our country and restoring real limits on government power. Join us.

To Apply

Qualified candidates should submit the following application material:

• Your resume or C.V., including your experience in the liberty movement and relevant professional experience.
• A cover letter explaining why PLF is the place for you, why you want to fight for liberty, and what distinguishes you from typical applicants; your letter should detail your courtroom experience, including any experience in trial preparation and civil discovery.
• A recent writing sample, no longer than 10 pages, that demonstrates your analytical and advocacy skills.

More here, including a link to submit your application packet.

If you fit the bill, here's your chance to join us.

South Carolina's Relocation Act Benefits Are Not "Just Compensation"

A quick one from the South Carolina Supreme Court.

In Applied Building Sciences, Inc. v. South Carolina Dep't of Commerce, No. 28184 (Jan. 17, 2024), the court held that the $50,000 cap on relocation benefits provided to ABS by South Carolina's version of the Relocation Act was enough, and did not deprive ABS of just compensation.   

Applied Building Sciences was a tenant in a building taken by the South Carolina Division of Railways, and was listed as an "Other Condemnee" in the eminent domain action. The taking forced it to relocate its business, which triggered its right to seek relocation benefits. South Carolina offers those displaced up to $50,000 in benefits, even if the taking isn't federally funded (and thus not covered by the federal URA). 

ABS thought the cap was unconstitutional and asked for $560k in expenses, and raised an inverse condemnation claim. The Department said no, and "refused to pay more than $50,000." Slip op. at 2. ABS obtained its share of the lessor's compensation, after which the parties agreed to sever its inverse claim for what it claimed was the shortfall.  

The South Carolina Supreme Court concluded that relocation expenses are not a part of "just compensation" under the U.S. Constitution. Relying on United States v. Petty Motor Co., 327 U.S. 372 (1946), the court held that "removal or relocation of personal property is not to be included in valuing property taken and that businesses displaced as a result of the condemnation do not have a constitutional right to receive expenses related to relocation." Slip op. at 6.

ABS fared no better under South Carolina's just compensation clause. The court noted that "'South Carolina courts have embraced federal takings jurisprudence as providing the rubric under which we analyze whether an interference with someone's property interests amount to a constitutional taking.' ... Therefore, Petty Motor, Westinghouse, and Joslin Mfg. Co. guide our decision today." Id. (citations omitted).

The old rubric of "we're taking the property, not the business."

In short, the relocation benefits in South Carolina's Act are gravy, property owners; the legislature is doing you a solid. The court didn't say exactly that, but it did note that the S.C. legislature adopted the Act to provide something -- although limited -- to owners who incur relocation expenses in takings not covered by the federal URA:

South Carolina codified the relocation requirements of the Federal Relocation Act in sections 28-11-10 to -70, mandating relocation payments to displaced persons and businesses regardless of whether a project uses any federal dollars. See S.C. Code Ann. § 28-11-10 (2007); Brown v. City of N. Charleston, 314 S.C. 298, 299-301, 442 S.E.2d 633, 634-35 (Ct. App. 1994); Act No. 1345, 1972 S.C. Acts 2522 (referring to relocation assistance "when any program or project undertaken involving acquisition of real property will result in displacement of any person or other legal entity"); 18 S.C. Jur. Eminent Domain § 22.1 (West 2023). When the government uses the power of eminent domain to take property which is being leased, the tenants may recover moving costs and rent differential payments. See S.C. Code Ann. § 28-11-10; Brown, 314 S.C. at 299-301, 442 S.E.2d at 634-35; 18 S.C. Jur. Eminent Domain § 22.1.

Slip op. at 4.

Thank you very much.

Applied Building Sciences, Inc. v. South Carolina De'pt of Commerce, No. 28184 (S.C. Jan. 17, 2024)

Devillier Oral Argument Round-Up

One week ago today, the U.S. Supreme Court heard oral arguments in Devillier v. Texas.

We wrote up our thoughts in this post, "Rogue States: Today's Argument In Devillier v. Texas - 'Aren't the Courts supposed to do something' About Violations Of The Constitution?," and now bring you other reports:

• Niina H. Farah, "Supreme Court leans toward landowners in Texas flooding case" (Politico E&E News) (we were quoted in this piece: "Robert Thomas, director of property rights litigation at the Pacific Legal Foundation, said critiques of Texas appeared to cut across the ideological spectrum on the court. 'Even those justices who you might not usually think of as viewing property rights favorably, they didn’t seem to appreciate what I would call the gamesmanship [from Texas],' said Thomas, who wrote a friend of the court brief to the Supreme Court in support of landowners.).
• Lydia Wheeler, "Supreme Court Struggles with Right to Sue in Property Fight" (Bloomberg Law)
• Jess Huff, "U.S. Supreme Court hears Texas case that could change how states compensate landowners for their property" (Texas Tribune)
• David Holtzman, "High Court Skeptical Of Texas' Defense In Takings Case"
• Derek Fleming, "SCOTUS Case from TX Could Alter Eminent Domain Law" (Dallas Express)
• Todd Neeley, "Texas Landowners Case Argued at SCOTUS" (Progressive Farmer)

Check em out.

No FOMO: There's Still Room For You To Join Us In New Orleans Feb 1-3, 2024 For The 41st ALI-CLE Eminent Domain & Land Valuation Litigation Conference

Don't miss out!

We promise: this is the last time we're going to try to entice you to the upcoming ALI-CLE Eminent Domain & Land Valuation Litigation Conference in New Orleans. We are getting close to capacity, but there is still room. In recent years, we have standing room only in the Conference halls, and have sold out the hotel block. After all, this is a pretty niche area of law. So what gives?

When we were in Austin last year, we thought it might be nice to try and answer that question. We asked Conference participants why they come, year-after-year (and in Austin, despite massive travel disruptions). Yes, it is the various venues (Nashville, Austin, Scottsdale, Palm Springs, to name a few recent locations), and yes, it is the excellent and useful programming.

But as we suspected it is more than that. As the above video notes, the consistent response from our participants about why the attend is the participants. The faculty and other attendees, the vendors. The collegiality, the chance to renew long-standing friendships, and especially the chance to make new friends and colleagues who share our passion for this area of law. The welcoming environment, and our desire to have lawyers and other professionals new to this area of law or new to the Bar feel at home and welcomed.

We have also made a big effort in the last few years to include a range of professionals from various perspectives, including lawyers, legal academics, jurists, appraisers and MAIs, planners, right of way and relocation experts, and jury and trial consultants. Family members also welcome (there are a lot of "adjacent" social and networking events, and families are welcome as long as they don't mind a lot of "shop talk"). Our program is a mix of practical and substantive sessions.

We also have a special track on the first day of the Conference designed as a crash course in Eminent Domain law ("Condemnation 101"), which is a good place for an overview and introduction to the practice, or as a refresher course for those with more time under your belt.

In short, we try and make the Conference not just a place to learn the latest in eminent domain and related topics, but somewhere you can return to each year, and feel welcome.

So if you have not attended before, give us a try! We'd love to see you in New Orleans in just a few months. Registration is still open. Sign up now, and don't miss out.

"The Lost World - Land Use Before Zoning" - Bound by Oath Podcast, S3 E3: Hadacheck, Buchanan

This season of the Institute for Justice's podcast series "Bound by Oath" is devoted to property rights. It's a fascinating series -- produced by John Ross, it is more like an audio documentary than a typical podcast -- focusing on constitutional issues. And we say this not just because we've been a guest a couple of times -- see "Groping in a Fog", this season's immediate prior episode about regulatory takings, and Season 1, where we guested on the episode about the origins of the "incorporation" doctrine).

In the latest episode, "A Lost World," John covers the world before zoning and the use (and abuse) of the plain-old police power to regulate the use of land and property.

Here's the description:

On Episode 3, we journey back to a lost world: the world before zoning. And we take a look at a trio of historic property rights cases. In In re Lee Sing, San Francisco officials tried to wipe Chinatown off the map. In Buchanan v. Warley, Louisville, Ky. officials mapped out where in the city residents were allowed to live based on their race. And in Hadacheck v. Sebastian, a Los Angeles city councilman sought to use the police power to protect his real estate investments.

Click here for transcript.

We were happy to share some of the backstory (and sad ending) of Hadacheck. Here's a photo looking down Pico from the site of the Victoria Park neighborhood, showing how close the two brickyards covered by the ordinance's ban were to Councilman Andrews' real estate investment. 

Which gets to the good part, the rest of the story that is not reported in the opinion:

John: And there’s one more piece to the story. It’s one that’s not in the briefs or in the court opinions, but it is in newspaper articles from the time. It turns out that just a couple blocks away from Hadacheck’s lot, real estate investors were selling lots in what was then a fancy new development. Here’s an advertisement in the Los Angeles Times printed in 1911.

Ad in L.A. Times: FOR SALE: The finest residence property in Los Angeles. Victoria Park is located in the ultra-fashionable southwest district on the very crown of West Adams Hill. The highest skill of the landscape gardener’s art has been employed to make ….

Robert Thomas: And if you take a left and drive down about a minute you turn into a neighborhood called Victoria Park. And well it turns out that this was the residential subdivision that the Los Angeles City Council was concerned with, because on one hand it was two blocks or so from Hadacheck’s brickyard, and it was literally across the street from one of the other brickyards that was subject to this ordinance. I think the homes there today when you drive around must have been the homes that were built then because they have that period look to them. Arts-and-crafts type of houses. Really kind of nice. One and two story houses with lawns and substantial lots. And of this being Los Angeles, there's a ring of palm trees.

John: Victoria Park was being developed by a consortium of real-estate investors. Robert Thomas: Well, it turns out that one of the leaders of that consortium was a fella called Josiah Andrews.

John: Josiah Andrews was a Los Angeles City Councilman, and one of the very first things he did after getting elected was to introduce the brickyard ban – not a ban in the whole city but just in the area that just so happened to be next to his investments in Victoria Park.

Robert Thomas: The story, when you piece it all together by looking outside the opinion, looks like one where it's pretty clearly self dealing on the part of Councilman Andrews. Why that does not make it into the record. Why that does not make it into the opinion. We don't know. John: In fairness, the city did get around to banning brickyards elsewhere in the city within a few years. But in 1910, the only ones they banned were the ones that threatened Josiah Andrews’ pocketbook. The Hadacheck decision remains good law, and looking back it today it appears to be a harbinger of things to come. Namely, the Supreme Court’s unwillingness to find that land-use regulations violate the due process of law – even when they seem arbitrary and even if someone’s ox is very definitely getting gored. And while you might think that invoking the police power as a pretext for a government official’s private pursuit of profit would be something of a no-no, well, stay tuned on that. We’ll come back to pretextual confiscations later in the season. Today, of course, Mr. Hadacheck’s case might be litigated differently. He probably would raise a regulatory taking claim, for instance, but as we talked about last episode the likelihood that he would achieve a more favorable result is not great.

 

For more visuals to go with your reading, see our post "Takings Pilgrimage, LA Edition: Police Power, The Zoning Game, And Nuisances" where we visited the Hadacheck site. Or read a short essay we wrote a few years back which includes more about Hadacheck.

And be sure to add this episode to your listening queue.

Thomas, Back to the Future of Land Use Regulation, 7 Brigham-Kanner Property Rights Journal 109 (2018)

Rogue States: Today's Argument In Devillier v. Texas - "Aren't the Courts supposed to do something" About Violations Of The Constitution?

We'd guess that most people, if asked whether the courts can "do something" when the government acts beyond the authority delegated to it in the Constitution, would respond that "doing something" is exactly what courts are for. 

Bottom Line Up Front

And that is what drives our BLUF on today's Supreme Court oral arguments in Devillier v. Texas: we're predicting that the property owner's arguments in will convince a majority of the Justices, and that the Court will answer the Question Presented with a "yes" -

May a person whose property is taken without compensation seek redress under the self-executing Takings Clause even if the legislature has not affirmatively provided them with a cause of action?

Courts Exist to "Do Something" When Government Violates Rights, Right?

Justice Kagan, as if often the case, drove right to the heart of the matter. For the "money quote" in the transcript or audio recording, you need look no further than this colloquy between the Justice and Texas' advocate:

JUSTICE KAGAN: But, General, do you agree with Mr. McNamara that if a state takes a person's property and doesn't give compensation, that state is violating the Constitution every day? It's an ongoing violation. Do you agree with that?

MR. NIELSON: That's not how the Court has -- I -- I -- I believe -- I certainly agree that's a violation of the Constitution. I don't think this Court's cases have ever --

JUSTICE KAGAN: But that's what I want to know. It's an ongoing violation of the Constitution, right? I've taken Mr. McNamara's property. I haven't paid him. Every day I'm violating the Constitution, correct?

MR. NIELSON: Yes, Your Honor.

JUSTICE KAGAN: Okay. So aren't courts supposed to do something about that?

MR. NIELSON: Yes, Your Honor. And what this Court said in Knick is, when there's not a cause of action, which remember there wasn't a cause of action, there were -- you have -- there's no remedies.

Tr. at 46-47.

At its core, Devillier is a case about whether and how we – through the courts – enforce our rights. In this case, the right to be justly compensated when government takes property, either directly via an exercise of eminent domain, or de facto by depriving the owner of its use and enjoyment. Texas inadvertently flooded Devillier's land, one of those "classic" inverse condemnation situations.

So Devillier asked the courts to "do something." He sued Texas for just compensation in Texas' own courts. Texas, not wanting to litigate in its own courts (where today it acknowledged that it could be sued for compensation), Texas removed the case to federal court, where Texas could argue that it could not be sued for compensation. 

Texas: There Are Rights, and There Are Procedures

As we detailed in our preview of the arguments, the federal court agreed with Devillier and held that in the absence of statutory authorization to sue (a "cause of action"), the courts can do nothing. To us (and the amicus brief we filed), the lack of a judicial remedy makes the limitations on sovereign power in the Bill of Rights seem more like suggestions that can be ignored -- the old "Pirate's Code" meme comes to mind -- than, you know, actual rules that have to be followed. 

But that alone was not apparently enough to resolve the case, and consequently, today's arguments were at time highly technical and law-wonky, with the Justices seemingly searching for distinctions between the concepts of (1) rights, (2) causes of actions, (3) remedies and (4) – as the advocate for the federal government injected -- "obligations." All of which go to that most fundamental of questions: what if anything can courts do if the government doesn't honor its constitutional obligations?

First, here's what was not disputed. We didn’t hear any disagreement that when there’s been a taking of property – something both Texas’ and the federal government's lawyer acknowledged isn't a question here – that there’s a fundamental requirement to provide just compensation. In short, everyone agrees there's a right to compensation when property is taken.

The Right To Just Compensation Alone Is Not Enough

That's all well and good, but that alone does not get you there, Texas argued. Because it addition to a right, you also need a cause of action. What that means is you need to have a legal claim, a procedural concept that is familiar to lawyers (but makes the rest of the public scratch its collective head). Texas argued that there is a cause of action to adjudicate Devillier's claim that his federal constitutional rights have been violated, but only a cause of action under Texas law and in a Texas court. Once in federal court, his claim dies because Devillier did not raise a Texas cause of action, only a claim directly under the U.S. Constitution.

Gamesmanship, bait-and-switch, and square corners

That argument caught flak from several members of the Court because it wasn't Devillier who chose federal court, it was Texas. In short, Texas shifted the forum from one where Texas argued it could be sued, to one where it argued it couldn't -- and then argued that Devillier could have brought his claim in a Texas court.

We think the colloquy you should pay attention to is between Justice Sotomayor and Texas' counsel:

JUSTICE SOTOMAYOR: And Count 2 [of Devillier's complaint] says violation of the Fifth Amendment of the U.S. Constitution.

MR. NIELSON: Yes, Your Honor.

JUSTICE SOTOMAYOR: Summarizing basically. I don't know what else they would have had to do in Texas court if I cite that case.

MR. NIELSON: It -

JUSTICE SOTOMAYOR: They said, I'm suing you in Texas court. You're the one who removed to federal court.

MR. NIELSON: Yes, Your Honor.

JUSTICE SOTOMAYOR: This seems to me like a totally made-up case because they did exactly what they had to do under Texas law. It's you who are telling me -- it's almost a bait and switch -- that you wanted to get to federal court to basically have a class action and you couldn't do it in state court, so -- but you had to fight something, which I don't know what you're fighting because you're telling me that Texas lets them have a cause of action under the Fifth Amendment.

MR. NIELSON: Yes, Your Honor. There's no bait and switch here, I want to be clear on that, no bait and switch.

JUSTICE SOTOMAYOR: Well, you're the one who removed.

MR. NIELSON: We removed, and they didn't come back and say, oh, no, you misunderstand what we're saying. Instead, every step along the way, they have doubled down all the way going to cert, you know, seek certiorari review from this Court. So, if we misunderstood what they were saying -

JUSTICE SOTOMAYOR: So, if -- if they go back down and say to the district court, this has been remanded to the district court, all we want is just compensation under the Texas Constitution and the Fifth Amendment under that case that you're mentioning, that's okay and you're not going to resist that?

MR. NIELSON: We -- we -- we would not resist that, Your Honor.

Tr. at 63-64.

Another colloquy -- this time with Justices Kavanaugh and Gorsuch -- is even more stark. There, Texas' advocate recognized that as a matter of "first principles" (are there any other kind, we ask) there's a right to compensation when the government has taken property, and that failing to pay it violates the Constitution, but tough beans property owner because procedurally we just don't know how to "get there." See Tr. at 58.

To us, this is very extreme position to take, especially coming from a government lawyer. After all, we thought that the old "turn square corners" rule is particularly apt in constitutional cases. See Niz-Chavez v. Garland, 593 U.S. ___ (2021) ("If men must turn square corners when they deal with the government, it cannot be too much to expect the government to turn square corners when it deals with them."). Recognizing a right, but shrugging your shoulders (indeed, actively playing removal games) isn't exactly what we'd hope our government would do, is it?  

Texas sought to cut this off right out of the gate, when it started by touting how good it is about property rights:

MR. NIELSON: Mr. Chief Justice, and may it please the Court:

The Court will be hard-pressed to find any government more committed to property than Texas. The Texas constitution is more protective than the federal Constitution, and Texas courts under a Texas cause of action adjudicate takings claims under both constitutions.

Tr. at 38.

A staunch protector of property rights, just not here. 

The claim that we-care-about-property-rights-just-not-here didn't go over all that well, as the above-quoted passages show.

A couple of other distinct threads were present. 

What About First English?

Much of the case turns on what the Court meant when all those decades ago ("38 years ago" as Chief Justice dryly retorted, getting the date exactly right) in First English when it adopted Justice Brennan's San Diego Gas & Electric dissent and held that no state court properly limit the remedy for a taking to injunction (ordering the government to stop the taking). The Just Compensation Clause is "self-executing" and mandates that even if the government backs off of the taking, it is obligated to provide compensation for the time during which it did take the property.

When the federal government's advocate attempted to argue otherwise, Chief Justice Roberts was having none of it. After all, he seems to get particularly incensed when the government fails to remain consistent in its arguments over cases, and over time (see the "square corners" vibe above). Thus, the Chief was all over the government's lawyer:

CHIEF JUSTICE ROBERTS: -- brief that you filed in First English 38 years ago, you argued that the Constitution does not of its own force furnish a basis for a court to award money damages against the government.

Now, in the decision in First English, Justice Rehnquist rejected the idea "that the Constitution does not of its own force furnish a basis for the court to award money damages against the government."

Now it seems to me that the question turns on basis. And what you seem to be saying is it created a general theory of what the government had to do, but that doesn't mean that anybody could take that and recover compensation. They have to go get an injunction or they -- they can't proceed at all because there's no cause of action?

MR. KNEEDLER: Yes, Your Honor.

CHIEF JUSTICE ROBERTS: I mean, are you just rearguing the point that the Court rejected?

Tr. at 70-71.

The lawyers for Texas and the federal government also seemed to be swimming against the tide when they argued that "self-executing" didn't mean that the Just Compensation Clause "of its own force" provides the cause of action. All you can get, the government lawyers argued, is an injunction.

Chief Justice Roberts disagreed, pointing to the more recent opinions he authored in Knick and Cedar Point.

MR. NIELSON: Well, we would make the same argument in state or federal court that there is no federal cause of action directly under the Fifth Amendment. That is not -

CHIEF JUSTICE ROBERTS: Well, but that's what was rejected in -- in the two cases that I read you, Cedar Point and Knick.

MR. NIELSON: With respect, Your Honor, I don't read either of those cases as saying there is a federal cause of action.

Tr. at 46. 

To us, when you are arguing with the author of a judicial opinion what that opinion says, you are invariably going to lose that argument.

Rogue State

Finally, the other major thread that emerged was what everyone referred to as the "rogue state" hypothetical. As Texas' lawyer put it, "let's assume some state says, we're just not going to do that [pay compensation after a taking." Tr. at 53. Then what?

First, this isn't really a hypothetical because we don't have too look too far for two real-world examples of this. Right next door to Texas, Louisiana government do this on what seems like a semi-regular basis. See for example, where a municipal port authority exercised its eminent domain power to take a ship repair facility. After trial and a bunch of appeals, the court ultimately entered a judgment for just compensation that the municipality owed millions to the (former) property owner. Did the municipality pay up? Nope. There's a provision in the Louisiana Constitution that the state and its political subdivisions can't be forced to pay civil judgments. And here, the municipality didn't pay for years. A federal district court held this wasn't a problem. After arguments in the Fifth Circuit during which the judges kept pressing the government's lawyer for why her client had not paid compensation, the case not surprisingly settled.

In another case -- this time an inverse condemnation claim -- same thing. The trial court entered a compensation judgment against a Louisiana municipality, which eventually exhausted all of its appeals. But then it didn't pay the ordered compensation. It didn't have to, unless and until it felt like it. The owner filed a federal lawsuit, arguing that the delay in compensation violated the U.S. Constitution. But unfortunately, the Supreme Court denied our cert petition. (we filed this cert petition, which unfortunately was denied). 

In the Devillier arguments, both Texas and the federal government argued that the solution to the rogue state problem isn't a judicial order ordering the payment of just compensation for a taking. Rather, the remedy is limited to injunction. See above discussion of First English on that. On that issue, it was Justice Kagan who again supplied your moment of clarity, when she asked Texas' lawyer about the supposed injunction remedy:

JUSTICE KAGAN: So to say, well, look, you can sue for an injunction but you can't sue for payment just doesn't understand the nature of this right.

MR. NIELSON: Well, so our first-line argument is, you know, the way the United States did it for a hundred years is correct. But, if the Court disagrees with that, if the Court says, you know what, actually -

JUSTICE KAGAN: So, General, I kind of agree with that. Your best argument is like what happened between the time of the Constitution and, you know, someplace in the late 19th Century.

But suppose that I'm not such an originalist and I don't really care about that.

(Laughter.)

MR. NIELSON: Sure. All right. So that's the answer I'm going to say. So, if we -- if a court says we read First English and it requires not just a substantive relief, it requires some sort of judicial proceeding, which we don't think is consistent with the history, but let's assume, Texas does it. Texas provides a cause of action for which they can bring a federal takings claim.

So even if that is true, which we don't believe as our first-line argument is correct, Texas still wins.

Tr. at 51-52.

Bottom Line

Let's wrap up. Here's some final thoughts at what might come out of this, and what a decision here might mean.

• This case presents the Court with yet another opportunity to clear away some of the games-playing and procedural hurdles that the government (with the acquiescence of the the courts) puts up in property rights cases. The trend in recent times at the Court has been to view these hurdles with a lot of skepticism. Continues the Court’s direction in clearing procedural hurdles. Yes, like in a lot of civil litigation against the government, the Court is going to tolerate a fair degree of procedures, but only if these are "modest" (see, e.g., Pakdel) and serve the purpose other than making it difficult for the plaintiff. Here, we don't think that the Court is all that keen on cementing a distinction between "rights," "remedies," and "causes of action."
• Relatedly, this case also seems like a good opportunity for the Court to remind everyone that property rights are not second-class constitutional and civil rights, and that their inclusion in the Bill of Rights means something. Devillier's lawyer started off his argument with this, stating, "[t]he question presented in this case is resolved by the text of the Fifth Amendment, which, unlike any other provision of the Constitution, imposes on the government a -- an explicit duty to pay money." Tr. at 3. Just so.
• The Justices didn't seem to be at all focused on what a decision in this case leaves for future resolution. Issues such as whether a state enjoys sovereign immunity from just compensation claims in federal court. We think the Court will rightly leave that and other issues for later cases.

Now we wait.

Update: here's lawprof Ilya Somin's take on the arguments: "Oral Argument in Devillier v. Texas Suggests Victory for Property Rights Likely" (Volokh)

Devillier v. Texas Argument Preview: Do Courts Need Congress' Permission To Enforce The Right To Just Compensation?

"No need to ask, he's a smooth operator..."

On Tuesday, January 16, 2024, the Supreme Court will hear arguments in a case we've  been following closely because it involves the fundamental limitation on the sovereign power to take private property. In our system, the sovereign indeed has the power to take private property against the will of the owner, but only if the taking is accompanied by just compensation.

Before we go on, a disclosure: we filed an amicus brief supporting Devillier's arguments, so we've have an obvious bias. Special kudos to our law firm colleagues -- and self-executing Just Compensation mavens -- Deb La Fetra and Kady Valois for this brief.

Texas Flooded Devillier's Property

Here are the facts in Devillier v. Texas. As part of a road project, the Texas Department of Transportation caused Devillier's property to flood. The state flooding someone's property is one of those "classic" cases what are deemed to be takings, triggering the obligation to provide compensation to the owner. But Texas didn't do so, so Devillier sued Texas in a Texas court for inverse condemnation, seeking just compensation under the U.S. and Texas Constitutions. Importantly, Devillier did not seek redress under any statute, but asserted that his right to just compensation directly under the U.S. Constitution.

Removed! Texas Avoided Its Own Courts

The presence of a federal claim in state court meant that as the defendant, Texas had the choice to remove the case to federal court (a choice it alone could make). Which it did. Texas then asked the federal court to dismiss the lawsuit, arguing that absent some legislative authorization to obtain redress from the State, that the court could not consider Devillier's claim.

Devillier responded that the U.S. Supreme Court has long held that the Just Compensation requirement in the U.S. Constitution is "self-executing," meaning that by its own force the Takings Clause recognizes a civil claim for its breach (and the Fourteenth Amendment expressly applies that requirement to States and their instrumentalities (such as TDOT).

Fifth Circuit: No Cause of Action For Compensation

The Fifth Circuit disagreed with Devillier, and held that federal courts "lack jurisdiction" because "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[.]"

Congress has provided a cause of action (42 U.S.C. § 1983) to sue "persons" who, under color of state, violate someone's constitutional rights (including taking property without compensation), but it is settled law that the states themselves are not "persons," and there's no dispute that Congress has never adopted a similar statute applicable to states. No cause of action against the State of Texas means no ability to bring a lawsuit against the State of Texas; Devillier's case dismissed.

The Question Presented

After some unusual appellate procedures (sua sponte denial of en banc review after the cert petition was filed), the Supreme Court granted review, limited to this Question Presented:

May a person whose property is taken without compensation seek redress under the self-executing Takings Clause even if the legislature has not affirmatively provided them with a cause of action?

So what should we be looking for on Tuesday morning?

Calder, Barron, and Sovereignty

At heart, we think Devillier goes to the notion of the American concept of "sovereignty," and our vision of what constitutional rights mean. Despite the Ninth Amendment, we tend to treat the listing of rights in the Bill of Rights as a somewhat exclusive expression of the rights we possess. And we also tend to treat the text of the Bill of Rights as defining our rights, rather than as limitations on government power (sovereignty).

As Professor William Davenport Mercer discussed in his book Diminishing the Bill of Rights: Barron v. Baltimore and the Foundations of American Liberty (2017), this may well be a result of the U.S. Supreme Court's decision in Barron v. Mayor & City Council of Baltimore, 32 U.S. 243 (1833). That case is mostly remembered as the one which held that the Bill of Rights limits only the federal sovereign power, and if property owners wanted to assert a claim for compensation against Baltimore, they could not point to the Fifth Amendment, but must instead look to compensation requirements in their state constitution. Barron's holding, of course, was neutered by the Fourteenth Amendment and officially put to rest by the later Chicago Burlington & Quincy R. Co. v. Chicago, 166 U.S. 226 (1897). But in Professor Davenport's estimation,even though Barron is no longer good law, the general vibe of the decision -- that constitutional rights are defined by the text of the constitution -- has lived on. Maybe Devillier will be an opportunity to check the pulse of the Justices on where they stand on this.

After all, the idea that the two limitations spelled out in the Fifth Amendment and its state law counterparts are not merely admonitions to the sovereign to "don't do that" (i.e., take property without a public use or without paying compensation), but rather the notion that We the People never delegated to our governments the power to take property without a public use or without providing just compensation. If so, then you can enforce the right without needing the permission of the sovereign. This might have been best expressed by Justice Chase in Calder v. Bull, 3 U.S. (3 Dall.) 386 (1798):

A law that punished a citizen for an innocent action, or in other words for an act which when done was in violation of no existing law; a law that destroys or impairs the lawful private contracts of citizens; a law that makes a man a judge in his own cause, or a law that takes property from A. and gives it to B. It is against all reason and justice for a people to entrust a legislature with such powers, and therefore it cannot be presumed that it has done it. The genius, the nature, and the spirit of our state governments amount to a prohibition of such acts of legislation, and the general principles of law and reason forbid them. The legislature may enjoin, permit, forbid, and punish; It may declare new crimes and establish rules of conduct for all its citizens in future cases; it may command what is right and prohibit what is wrong, but it cannot change innocence into guilt or punish innocence as a crime or violate the right of an antecedent lawful private contract or the right of private property. To maintain that our federal or state legislature possesses such powers if it had not been expressly restrained would, in my opinion, be a political heresy altogether inadmissible in our free republican governments.

Id. at 388.

If Texas never had the power to take property without compensation, then doesn't it follow that Devillier does not need the permission of Congress (or Texas) to enforce that right? 

What Else to Look For on Tuesday

Other things to look for on Tuesday as you listen along:

• Incremental, QP-centric arguments. Look for the Justices viewing the issue narrowly, trying to keep the decision in the case framed within the Question Presented. Like they seemed to do in the recently-argued Sheetz case. The Court has taken a very incremental approach in takings cases, and we're thinking that if the Court wants to answer the QP -- and no more, yet -- things could go very well for Devillier. Short story: do you need a legislative cause of action to file a claim for compensation for a taking? No. End of (this) story. 
• Been there, done that. Relatedly, there's a strong argument that the Court has already made it clear that the just compensation requirement is "self-executing," meaning that if it takes property, the government must provide compensation; and if it does not, nothing more is needed for the owner to ask a court to order the government to provide it. If so, then decisions like Chicago, Burlington and First English resolve the QP, and we're done. To us, the vibe of First English (if not its express holding) has always been that no state can deny it has the obligation to provide compensation when it takes property. If the Court wasn't saying this in First English, then what was it getting at?
• History and tradition. This is a property rights case, so you know there's likely to be a lot of history talk. You may want to brush off your copy of the Court's recent decision in PennEast, which held that the State of New Jersey was not immune from an exercise of federal eminent domain power because history shows that by ratifying the Constitution, the states consented to having their property taken by the federal government, and the preexisting notion that eminent domain is, as Grotius put it, eminent. 
• CFC mavens, rejoice. If there's buy-in to the notion that the Tucker Act does not create a cause of action, but is merely a jurisdictional statute assigning claims for money against the federal government to the Court of Federal Claims, then Devillier is along the path to success. After all, the federal courts have been entertaining and deciding takings claims seeking compensation for decades.
• Restraining the temptation to go large. One might be tempted in this case to go big, because after Knick, the lower courts seem to be throwing up all sorts of procedural and technical hurdles to property owners seeking compensation for takings in federal court. But we think that this is likely something the Court will want to avoid. The facts in this one are very narrowly drawn, and don't raise a lot of the interesting and unresolved issues that are plaguing the lower courts. Save those issues for those cases, not this one.
• Keeping the judicial powder dry. Thus, if the Court answers the QP, it can leave for later resolution better cases with more developed factual records and arguments. A case in which a property owner sues a State for just compensation in federal court (and not one where the State is the party which invoked federal jurisdiction), for example. Such a case would directly raise the issue the Court need not address here: does the Eleventh Amendment change anything?
• Limiting principles. The term "Bivens" isn't exactly popular at the Court these days. If it looks like a majority is going Devillier's way, look for arguments distinguishing the right to compensation from other constitutional rights. If takings require money as a remedy, then why not the same, for example, for a violation of the Speech Clause? Hint: the distinction is right there in the text of the Fifth Amendment, which not only expresses limitations on sovereign power (no takings without public use and no takings without compensation), but also informs courts in terms that courts understand what remedy is available (compensation). Takings are sui generis.
• Game-playing. The Court has been rightly skeptical when it looks like the government is being too-clever-by-half, especially in property cases. The San Remo preclusion trap, the ripeness "Catch-22," ripeness as exhaustion-by-another-name, and states manipulating property law.
• Chicken Little. There have been some arguments here -- as in nearly every property rights case -- that a ruling in favor of the property owner will result in a flood of litigation, and the inability of the government to go on as usual. The Court has -- in nearly every case in which this argument is made -- rejected that claim. By design, a limitation on sovereign power cannot be too burdensome: if the constable must abide by the Constitution, so must the DOT.
• You say "tomato." Do you pronounce the property owner's name as "de-vill-ey-er" or "day-vill-e-ay," or some other way? As in Key-lo or Keh-low, Dow-behrr or Dau-bert, or May-hon or Mannnn? (Either way, if we were arguing on Tuesday, we'd say it exactly the way the Chief Justice pronounces it.)

What's Not at Issue

Here are some issues we think are not presented:

• Eleventh Amendment. This should not be an issue here, because Texas forfeited any immunity that it might have otherwise enjoyed under the Eleventh Amendment by removing the lawsuit from its own courts to a federal court. Lapides v. Bd. of Regents of Univ. Sys. of Ga., 535 U.S. 613, 622–23 (2002); Embury v. King, 361 F.3d 562, 566 (9th Cir. 2004) (“Allowing a State to waive immunity to remove a case to federal court, then ‘unwaive’ it to assert that the federal court could not act, would create a new definition of chutzpah.”). And if we want to get very technical, the Court has already said that the Eleventh Amendment mirrors plain-old sovereign immunity, and that the sovereign can only be sued it (a) it consents, or (b) the "plan of the convention" reflects the understanding that by ratifying the Constitution, the states gave up that sovereign immunity (again, check out the Court's recent decision in PennEast for more). If so, maybe Texas' removal of the case settled the Question Presented. 
• MAGA. The question of the meaning of "self-executing" is also raised in the Trump v. Anderson case which the Supreme Court is considering on an expedited basis. That's the one where the ex-president is challenging the Colorado Supreme Court's ruling that he can be DQ'd from the Colorado ballot because section 3 of the Fourteenth Amendment renders him ineligible. One of the arguments in the case focuses on is that section 5 of the Fourteenth Amendment, which provides that "Congress shall have the power to enforce, by appropriate legislation, the provisions of this article," means that Congress must first adopt enabling legislation before someone can be barred from running. While an interesting and unsettled question, as noted above we think that Just Compensation stands apart because Devillier is arguing that just compensation is self-executing, and not as in the Trump case, that the Fourteenth Amendment is necessarily self-executing.

See you on Tuesday!

Brief Amicus Curiae of Pacific Legal Foundation, Nat. Fed. of Ind. Bus. Small Bus. Legal Center, Inc., and...

Sheetz Argument Round-Up

Here is a collection of commentary on the oral arguments in Sheetz v. El Dorado County, heard by the Supreme Court earlier this week. (Our own thoughts here.)

• Lawprof Tim Mulvaney, "Mulvaney of Sheetz v. County of El Dorado" (PropertyProfBlog) ("In light of that concern, perhaps such scrutiny, Justice Jackson ruminated, should be applicable only to those legislative permitting schemes that require the dedication of land for the state’s possession. Justice Alito countered, though, that any such framework is manipulable, for a fee could be construed as offsetting the government’s acquisition of a 'no-build easement.'").
• Lawprof Ilya Somin, "Supreme Court Oral Argument Indicates 'Radical Agreement' that there is no 'Legislative Exception' to the Takings Clause" (Volokh) ("All or nearly all of the justices seem to agree there is no legislative exception. Indeed, even counsel for the County of El Dorado agreed.").
• "An interview with the attorneys behind the SCOTUS case Sheetz v. County of El Dorado" (Pacific Legal Foundation) ("Brian Hodges: What surprised us was how focused the Court was just on the question presented, which was whether legislative exactions are subject to Nollan and Dolan. The government briefs really didn’t address that issue. That’s the issue that the Court granted cert on, but they didn’t really address it. They tried to change the topic. And the fact that the Justices didn’t really take the bait was a bit surprising.").
• Bradford Kuhn, "A Taking of Just a Fee?" (California Eminent Domain Report) ("The Supreme Court’s decision will be one we’ll continue to monitor closely, as it could have widespread implications to government agencies in California if they need to change the way impact and permit fees are calculated across the board.").
• Ben Christopher, "Supreme Court case about impact fees could have huge consequences for housing in California" (Cal Matters) ("Many court watchers expect the court’s conservative majority to side with the burdened property owner and require the cities and counties to work a bit harder to justify the fees they impose on new home construction. It remains unclear for now just how far such a ruling could go and whether it might place fresh limits on other widely used housing and revenue-raising policies.").
• Chuck Slothower, "A Taking Or Just A Fee? Justices Seek To Make Distinction" (Law360) ("Court ustices adopted a skeptical line of questioning Tuesday in response to arguments that government permit fees constitute a taking under the Fifth Amendment in a case that could have broad implications for American land use planning.").
• Noel Sterett, "Supreme Court Considers Whether County Can Exact a $23,000 Fee to Build a Single Home" (Dalton Tomich) ("If the Supreme Court decides in the County’s favor, many other local governments could follow suit and enact similar legislation. As local governments look to increase revenue without raising taxes, they may look to use their permitting powers to exact money from property owners like Mr. Sheetz.").

The Future Looks Bright: A Sampling Of Final Paper Topics From William and Mary Law's Eminent Domain & Property Rights, And Land Use Courses

We've noted this before, but we shall say it again: if you ever have the opportunity to teach in a law school -- either as a full-time legal scholar or part-time as an expert adjunct practitioner -- do it if you are at all able. You might think you know a lot about a particular subject, but there's nothing like spending time at the lectern in a law classroom in front of sharp and eager lawyers-in-training to sharpen your thoughts, and get you to truly understand a subject. And it can be oh-so-rewarding as you see law students develop into colleagues at the Bar.

(And everyone insisting on calling you "professor" can evoke a smile.)

But if there's a downside to the law school experience from the teacher's side of the lectern, it's grading. Especially at a law school like William and Mary that has a pretty strict mandatory curve that forces ranked grading. In upper-division courses that we handle like Eminent Domain and Property Rights Law, and Land Use -- where we're dealing with some very high-level stuff and the quality of the students is uniformly high -- that makes for some hard choices at this time of year. Despite these challenges, we've wrapped up grading for the Fall 2023 semester for both courses, and have submitted the official scores.

Although I cannot share with you the students' final papers in these classes, I don't think they would mind if I give you a sampling of the topics and titles, just so you can see how the next generation of lawyers is thinking about property, property rights, takings, land use, and environmental law (inter alia).

And this year, the grading curve was especially difficult. If I could grade the submissions objectively, I would not have had a problem with awarding each a top score. It seems that every year, the quality of submissions become better -- more sophisticated, more thought-out -- making distinguishing among them very (very!) difficult.

For confirmation, check out this random sample of paper titles:

• Health, Safety, and Welfare for Whom? A Comparative Historical and Legal
  Analysis of the Impact of Eminent Domain on Pittsburgh’s Chinatown
• MIMBY (Maybe In My Backyard)?: Affordable Housing and the California Coastal Commission
  
• Essay on Locke, Bataille, and the Use of Philsophy in Legal Advocacy
• Unveiling Ancient Principles: Eminent Domain in Talmudic Law
• Reclaim, Reuse, Remodel: How Office Conversions and Adaptive Reuse Can Create Affordable Housing
  
• Kern County Planning Commission Campaign Speech: Regulating CAFOs Through Land Use
• Eminent Domain in Star Wars: Government Takings of Droids
• Euclidian Zoning: A Deep Dive into the Most Influential United States Zoning Case
• You Wild Colorado: HOA Reform and Lessons to Be Learned from the Centennial State
• The Takings Dilemma: Property Rights and Public Interests in Urban Planning
• The Price of Creating the Shenandoah National Park: A Closer Look at the Government’s Use of Eminent Domain to Clear the Park’s Boundaries
• "Give It Back To The Indians": A Look at What and How the Federal Government Took (or Didn’t Take) Property During the Course of the Manhattan Project
• A Place for Everything and Everything in its Place … Except Airbnb: The Short-Term Rental Problem and Euclidean Zoning Battles Across Jurisdictions
• Ready, Set, Build: Why You Might Be Seeing an Influx of New Construction Projects and What They Mean
• Pandora’s Box of Rights: Avatar, Eminent Domain, and the Battle for Interstellar Real Estate
• Envisioning a New Lahaina: Rebuilding after the Maui Wildfire
• "Good" vs. "Bad": Regulating Morality through Land Use Restrictions
• Ninth Inning Stretch: Does Returning Dodger Stadium Constitute Just Compensation

And this is merely a small sampling, and the only reason I haven't posted all of the titles is that there are over 50 papers, and the list would be too long.

I don't know about you, but I feel pretty good about this, and believe it bodes well for our profession and especially for the Property Bar.

I will be encouraging several of them to consider beefing up their papers and submitting them for publication, so you may be seeing the substance of some of these papers down the road.

Today's Arguments In Sheetz v. El Dorado County: "[R]adical [A]greement" On The Key Issue

If you were looking for deep clarity from the Justices about land use law and whether a legislature imposing monetary conditions on property development always gets the free judicial pass of rational basis review in this morning's oral arguments in Sheetz v. County of El Dorado, you may not discover a lot of predictive insight when you listen to the argument recording or read the transcript.

But it is definitely worth your time to listen or read. Yes, there were some head-scratching moments as several of the Justices struggled with how to differentiate between monetary land use exactions that are subject to the nexus and rough proportionality standards, and other government requirements to pay money such as user fees, tolls, and property taxes that presumably are exempt. But there were also moments of clarity. Important moments.

In other words, there's gold in them thar transcript hills if you look closely. (Sorry, we had to get that out of the way.)

[Disclosure: this is one of ours, so we're not going to get into it too deeply.]

We think the outcome may turn on the Question Presented, and how "tightly" a majority of the Justices want to answer that question, and go no further. As our preview of the case noted, here's the Question Presented:

The question presented is whether a permit exaction is exempt from the unconstitutional-conditions doctrine as applied in Nollan and Dolan simply because it is authorized by legislation

Read that closely. It isn't asking whether the County's traffic impact fee violates the nexus and rough proportionality standards, but whether a property owner can even ask the question. Remember that this case comes up after the trial court sustained the County's demurrer without leave to amend (for you non-Californians, read this as a "granted the County's 12(b)(6) motion to dismiss"). In other words, the trial court held that an exaction is categorically exempt from the Nollan and Dolan standards if the exaction is authorized by legislation (in other words, is not imposed ad hoc via an administrative proceeding on a discretionary permit).

You can never even ask the nexus and proportionality questions, property owner, much less have a court answer it.

In our listen, while there was a lot of noise and confusion in today's argument, there was also a lot of focus on that narrow question. Which augurs well, we think. If the only question the Court needs to resolve is whether legislatively-adopted exactions are 100% outside the reach of Nollan and Dolan 100% of the time, then perhaps such a decision won't be too hard to get to a majority or more. And if you are searching the transcript for today's "money quotes" (or maybe "money colloquies") to back up that thought, we suggest you couldn't do better than these.

First, Justice Thomas laid the foundation. As he put it in the first question out of the gate to Paul Beard, arguing for Mr. Sheetz: 

JUSTICE THOMAS: Do we have to decide any more than whether Nollan/Dolan scrutiny applies to -- can apply here to legislative exaction?

MR. BEARD: Justice Thomas, the Court is -- is able to just answer the question presented, which is simply whether there's some kind of a legislative generally applicable exception to Nollan and Dolan, yes.

JUSTICE THOMAS: If -- if the -- if - if Respondent concedes that, is there anything else we should do?

MR. BEARD: There's nothing for the Court to do. That is the question presented.

Tr. at 5.

Later, Justice Kagan "circled back" and seemingly closed the deal during her questioning of the County's advocate. She stated there is "radical agreement" on whether an exaction should "get a pass" just because it is generally-applicable (the Question Presented), concluding that it doesn't. The County's lawyer agreed without reservation:

JUSTICE KAGAN: So, Ms. McGrath, I want to follow up on Justice Gorsuch's idea of radical agreement. And I -- I -- I want to give you -- suggest what it is that there is radical agreement on and what it is that there is not radical agreement on, and see if you agree with me.

So what there is radical agreement on is that you don't get a pass from unconstitutional conditions analysis just because you've passed generally applicable legislation. And that's, of course, true in unconstitutional conditions analysis generally, and so too it's true of unconstitutional conditions analysis in the property area. If there has been a taking and that taking is being leveraged in the permitting process by generally applicable legislation, there's no pass just because that's the mechanism that's being used.

So first let me ask you if you agree with that?

MS. McGRATH: I agree.

Tr. at 73-74.

If that's it, then game over right? Question Presented has been answered, and the follow-up questions are just gravy for remand.

Justice Kagan continued, pointing out that there might be a dispute over whether there could be a taking if the County denied a development permit (because the owner refused to voluntarily pay the exaction):

JUSTICE KAGAN: Okay. Here are two things it seems to me that the parties fundamentally disagree on, which is probably - one of these two things is going to answer this dispute in the end, but there are two things. Is -- number one, was -- is there a taking at all? Because if this is just something like a tax, unconstitutional conditions analysis never comes into play, and you say it never comes into play, and Mr. Beard says it absolutely comes into play. So that's one question that you're very much at odds on. Is that correct?

MS. McGRATH: That's correct.

JUSTICE KAGAN: The second question that you're very much at odds on is, even if you assume that there has been some kind of taking here and that unconstitutional analysis does come into play -- and by that, I mean what we have in past cases called Nollan/Dolan analysis, right?

Tr. at 74. That dispute doesn't seem to stand in the way of a narrow ruling here because this is up on a demurrer and the complaint adequately and plausibly pleaded that denial of the permit would be a taking. You don't have to figure out whether there's been a taking at this stage, only whether Sheetz has been required to choose between his plausibly-pleaded right to just compensation for the taking of his right to use and develop his land, and his plausibly-pleaded right to keep his money.

Finally, Justice Kagan suggested that there is a dispute over whether legislative exactions might be subject to some sort of different nexus and proportionality standards than applied to parcel-specific conditions: 

Even if you assume that that unconstitutional analysis comes into play, it might look very different from what Nollan/Dolan analysis looks like just because Nollan and Dolan were focused on individual parcels, individual property owners, and this is a general scheme, and it would be very difficult to apply Nollan and Dolan analysis literally to a general scheme.

So that there might be ways in which Nollan/Dolan analysis becomes something that, you know, really looks different in application. And I think Mr. Beard says no, not really, and you say, yes, really. Is that correct?

MS. McGRATH: That's also correct.

JUSTICE KAGAN: So that's the agreement. Those are the two big disagreements?

MS. McGRATH: I think that is correct, Justice Kagan.

JUSTICE KAGAN: Okay. I just wanted to make that clear.

Tr. at 75.

Again, that should not stand in the way of a decision here on the Question Presented (are legislative exactions categorically exempt?). The Court may hold that no, legislative exactions are not 100% exempt, but remand for more on how that test is to be applied here (something on which there's no actual, developed factual record in case -- again, blame the demurrer).

A couple of final observations:

• We didn't hear any of the Justices take issue with calling the County's demand an "exaction." As you know, some lower courts fixate on semantics (is the challenged requirement an "exaction" or is it a "zoning ordinance?"). No SCOTUS Justice today seems similarly hung up on wordplay. They all seemed to look at what the ordinance does, not what the County called it.
• There seemed to be a lot of confusion wrought by the way the Court has framed the question as one of "takings" here and in past decisions. We think the more helpful view is that of "unconstitutional conditions," and not takings. Yes, one of the rights that Sheetz is being required to choose between is his right to compensation, but at heart this seems more like a question of "your money or your rights" than one about whether there's been a taking by overregulation.

Now we wait. What's your prediction?

Transcript, Sheetz v. County of El Dorado, No. 22-1074 (U.S. Jan. 9, 2024)

What We're Reading Today, Property Rights Edition

Bismarck in January is looking pretty good.

Here's what we're reading today:

• Christian Britschgi, Court's Wild Zoning Decision Blocks 'Montana Miracle', Reason (Jan. 2, 2024) ("In an eyebrow-raising decision, a Montana judge has halted the implementation of two laws legalizing duplexes and accessory dwelling units on residential land across the state, writing that they'd likely do 'irreparable' damage to residents of single-family neighborhoods.").
• Richard Frank, The U.S. Supreme Court & Environmental Law in 2024, LegalPlanet (Jan. 3, 2024) ("First up before the Court in 2024 is this “regulatory takings” case from California.... Over the past four decades, U.S. Supreme Court decisions have developed the so-called 'unconstitutional conditions' sub-doctrine of regulatory takings law, but to date have only applied it to individually-negotiated land use permit conditions and fees. California state courts–including in the Sheetz case–have consistently refused to extend the doctrine to broadly-applicable fees and conditions imposed on landowners in exchange for their obtaining development approvals–so-called “quasi-legislative” fees and conditions.... So El Dorado County appears to be facing an uphill battle in the Sheetz case. The justices will hear oral arguments on January 8th.")
• Editorial Board, The Supreme Court's Road to El Dorado, Wall St. J. (Jan. 5, 2024) ("The Supreme Court on Tuesday will hear what could be a landmark property-rights case (Sheetz v. County of El Dorado) with major economic implications. The question is simple: Can governments use building permits to extort property owners?"). 
• James Burling, Property Rights in Jamestown: Bowling and starving in the New World, Pac. Legal. Found. (Nov. 30, 2023) ("All the crops would be the collective property of the colony, with a good portion of the proceeds returned to the financiers in England to pay off the debts incurred in setting up the colony in the first place. Now, the proprietors weren’t proto-socialists; they just figured they could maximize their profits if their charges over in America didn’t try to grab too much for themselves.").
• Greg Henderson, Texas Rancher's Property Rights Case to be Heard by U.S. Supreme Court, Drovers (Jan. 4, 2024) ("Attorney’s representing a Texas rancher are preparing to test the 'pottery barn rule' – you break it you buy it – before the U.S. Supreme Court.").
• History of Building Regulations, Researching Historic Buildings in the British Isles ("The British Isles has a long history of legal controls on building construction, which have generated records of interest for building historians. This outline aims to explain the types of building control record and where to find them.").
• Conference on the Constitution. A conference produced by the Northwest Landowners Association is open to the public "to learn more about landowner issues related to our constitutional rights." Featuring two of our Pacific Legal Foundation colleagues, Mark Miller and Kady Valois.

CA5: Government Should Not Send You On A Wild Goose Chase Though Its Own Procedures: "It was the regulatory equivalent of Romeo sending Mercutio on a wild goose chase—and then admitting there never was a goose while denying he even suggested the chase."

What is a case about the U.S. Court of Appeals for the Fifth Circuit's en banc opinion on the FDA's approval procedures for e-cigarettes, Wages and White Lion Invs, L.L.C. v. Food & Drug Admin., No. 21-60766 (Jan. 3, 2023), doing here?

We consider it worthy of your time and post it here because of the way the majority addresses the FDA's central argument: that even though the public took the FDA's public instructions (including statements on its website) at face value, these procedures meant nothing. 

Government shouldn't play such games, the court concluded. It can't go back on what it holds out to the public, especially as a later litigation posture. See, e.g., slip op.at 20 ("In the MDO's, however, FDA explicitly stated that its instructions were all for naught."). Government "about-face[s]" are not appreciated. Slip op. at 28. We rightfully expect more from our government. 

You land users should read this, and see if sounds familiar:

Over several years, the Food and Drug Administration ("FDA") sent manufacturers of flavored e-cigarette products on a wild goose chase.

First, the agency gave manufacturers detailed instructions for what information federal regulators needed to approve e-cigarette products. Just as importantly, FDA gave manufacturers specific instructions on what regulators did not need. The agency said manufacturers' marketing plans would be "critical" to the success of their applications. And the agency promulgated hundreds of pages of guidance documents, hosted public meetings, and posted formal presentations to its website—all with the (false) promise that a flavored-product manufacturer could, at least in theory, satisfy FDA's instructions. The regulated manufacturers dutifully spent untold millions conforming their behavior and their applications to FDA's say-so.

Then, months after receiving hundreds of thousands of applications predicated on its instructions, FDA turned around, pretended it never gave anyone any instructions about anything, imposed new testing requirements without any notice, and denied all one million flavored e-cigarette applications for failing to predict the agency's volte face. Worse, after telling manufacturers that their marketing plans were "critical" to their applications, FDA candidly admitted that it did not read a single word of the one million plans. Then FDA denied that its voluminous guidance documents and years-long instructional processes meant anything. Why? Because, the agency said, it always reserved the implied power to ignore every instruction it ever gave and to require the very studies it said could be omitted, along with the secret power to not even read the marketing plans it previously said were "critical." It was the regulatory equivalent of Romeo sending Mercutio on a wild goose chase—and then admitting there never was a goose while denying he even suggested the chase. Cf. William Shakespeare, Romeo and Juliet act 2, sc. 4.

FDA justifies its behavior with two principal arguments. First, FDA argues that its years' worth of regulatory guidance was not worth the paper it was printed on because it was hedged with cautious qualifiers and never guaranteed that any particular submission would be granted. Second, and most disturbingly, FDA argues that its capriciousness should be forgiven as harmless because the agency promises to deny petitioners' applications even if we remand to make the agency follow the law.

Today we reject both propositions. As the Supreme Court recently reminded us: "If men must turn square corners when they deal with the government, it cannot be too much to expect the government to turn square corners when it deals with them." Niz-Chavez v. Garland, 593 U.S. 155, 172 (2021). No principle is more important when considering how the unelected administrators of the Fourth Branch of Government treat the American people. And FDA's regulatory switcheroos in this case bear no resemblance to square corners. As for the agency's harmless-error argument, the Supreme Court recently, unanimously, and summarily rejected it. Calcutt v. FDIC, 598 U.S. 623 (2023) (per curiam). We do the same here with the expectation that FDA will give petitioners the benefit of a full and fair regulatory proceeding on remand, notwithstanding its prior promises to reject their applications no matter what.

Slip op. at 1-2.

Sounds like the approach many local planning departments take: an owner wants to know what she can do with her property, and instead of helping clarify what can or can't be done -- or worse yet, holding out with what it only later asserts is an illusory procedure -- the government goes opaque and plays "gotcha" with the owner. We have our regulations and procedures, but it's up to you, property owner, to figure out how those regulations limit your property, and how to navigate our process. Do so at your peril, property owners.

If only more courts would refuse to tolerate this.

Hat tip to our law firm colleague Deb La Fetra for noticing this one.

Check it out.

Wages and White Lion Inv's, LLC v. Food & Drug Admin., No. 21-60766 (5th Cir. Jan. 3, 2024) (en banc)

New Article: "Keeping the Surplus? Examining Colorado's Real Property Tax Lien System in Light of Tyler v. Hennepin County" (Makenna Johnson)

How thrilled are we that an alum of our William and Mary Law School courses, up-and-coming Colorado property lawyer Makenna X. Johnson, has published an article in the area of law we all love (dirt law)?

Let's just say that we're thrilled. Makenna writes:

Colorado’s real property tax system resembles Minnesota’s principally in that it provides no mechanism for a property owner to recover any surplus or equity in excess of the taxes and fees owed. Although in Colorado a surplus may be retained by either a private party or a municipality, the result is the same: the owner’s property interest in the surplus is forfeited. Applying the logic of Tyler, a court might deem unconstitutional any system that requires property owners to forfeit the surplus without allowing them an opportunity to request a refund.

Check it out in the Colorado Lawyer (Jan-Feb 2024): Keeping the Surplus? Examining Colorado's Real Property Tax Lien System in Light of Tyler v. Hennepin County.

Sheetz v. El Dorado County Argument Preview: Do Blanket Exactions Present The Same Risk As Ad Hoc Exactions?

Get ready for Sheetz v. El Dorado County, No. 22-1074, the "legislative exactions" case at the Supreme Court. [Disclosure: this is one of our firm's cases, so we won't be doing an analysis here. Besides, you already know where we stand on the issue.]

With the final merits brief filed last week (Petitioner's Reply), the case is now teed up for argument next week. Wow, that seemed to come at us very quickly.

Here's the Question Presented:

George Sheetz applied, to the County of El Dorado, California, for a permit to build a modest manufactured house on his property. Pursuant to legislation enacted by the County, and as the condition of obtaining the permit, Mr. Sheetz was required to pay a monetary exaction of $23,420 to help finance unrelated road improvements. The County demanded payment in spite of the fact that it made no individualized determination that the exaction-a substantial sum for Mr. Sheetz-bore an "essential nexus" and "rough proportionality" to the purported impacts associated with his modest project as required in Nollan v. Cal. Coastal Comm'n, 483 U.S. 825, 837 (1987) and Dolan v. City of Tigard, 512 U.S. 37 4, 391 (1994).

Mr. Sheetz challenged the exaction as an unconstitutional condition under Nollan and Dolan. A California trial court upheld the exaction, holding that, because it was authorized by legislation, the exaction was immune from Nollan/Dolan review. In a published decision, the California Court of Appeal affirmed, and the California Supreme Court denied review. California's judicially-created exemption from Nollan/Dolan scrutiny for legislative exactions conflicts with the decisions of other federal and state courts across the country, and is in strong tension with this Court's more recent precedents.

The question presented is whether a permit exaction is exempt from the unconstitutional-conditions doctrine as applied in Nollan and Dolan simply because it is authorized by legislation.

Check out all of the merits and amici briefs on the Court's docket.

• Sheetz's merits brief
• El Dorado County's merits brief
• Sheetz's reply
• Federal government's amicus brief (the SG has asked the Court for argument time)

To find out more, register for "What's at Stake: Sheetz v. County of El Dorado," a free webinar preview on Thursday, January 4, 2024, 3-4pm ET ("At this event, panelists will give background on the case and its far-reaching implications. They’ll also discuss key precedents that laid the groundwork for this fight, including Nollan v. California Coastal Commission, Dolan v. City of Tigard, and St. Johns River Water Management District v. Koontz.").

Brief of Petitioner, Sheetz v. County of El Dorado, No. 22-1074 (U.S. Nov. 13, 2023)

Takings Pilgrimage: Boomer v. Atlantic Cement Today

As you may remember, from time to time we've visited the sites of well-known dirt law cases. Kaiser Aetna, Loretto, Mahon, PruneYard, Chicago Burlington, the High Line, Dolan, Nollan, Seneca Village, and Hadacheck are the ones that readily come to mind.

Yes, we have a lot of tech available that makes it pretty easy and inexpensive to "see" a location and get a sense of it without having to actually go there, but very often Google Maps or GIS just isn't enough. As you property lawyers know, nothing helps in your understanding of a case or issues more than being on the ground at the site, feeling the earth beneath your feet, looking around at the environs, hearing the birds, smelling the air, taking a few of your own photos, talking to neighbors and others, just seeing what is nearby. There's no substitute for being there.

In that spirit, we were in upstate New York last month en route to taking care of long-overdue family business in neighboring Vermont, and thought it might be worthwhile to take a detour over the Rip Van Winkle Bridge to the Town of Coeymans.

You might not have heard of that place, but any dirt lawyer worth their salt knows of the famous case situated there. The case where the "Defendant operates a large cement plant near Albany."

If you don't know where that quote comes from, it is the opening sentence to to the New York Court of Appeals' opinions in the famous nuisance case, Boomer v. Atlantic Cement Co., 26 N.Y.2d 219, 222 (1970).

This case is taught to first-year law students in either Torts or Property (if a law school still teaches Property in 1L, that is). We cover it in our Land Use class, of course, in the part of the course where we discuss private land use controls (the course isn't solely about public land use regulations, but includes what we call "history and antecedents"). 

It has been many years since the decision, and even more years since what was then known as the Atlantic Cement Company built a big plant in 1962 about a mile outside the Village of Ravena.

Lawprof Daniel A. Farber tells us about Atlantic Cement in what we view as the definitive piece on the backstory of Boomer, The Story of Boomer: Pollution and the Common Law, 32 Eco. L. Q. 113 (2005):

Atlantic Cement, formed in 1959 under the name "Burwill Realty Company," changed its name just before it began construction of the cement plant. Presumably, Atlantic used the original name to avoid alerting sellers to the special value that their land might have for a large industrial venture. Under the original name, Atlantic assembled a large tract of land near Albany, New York: a later tax appraisal lists it as 3,260 acres.

Atlantic was a joint venture of two mining companies. This was the joint venture's only plant, but it had distribution centers all along the east coast, served either by rail or barge. Once in operation, the plant employed approximately four hundred people, and its assessed value was about half of the total assessed value of the entire township. Although the plant was unusually large, it was not alone in the region. The Albany area had other cement plants, because the area was rich in the necessary raw materials and the Hudson provided a handy source of river transportation.

When construction of the Atlantic cement plant began in 1961, the area was unzoned. Atlantic selected a location about a mile outside the village of Ravena, in a neighborhood composed of small houses and businesses such as the auto junkyard and body shop owned by Oscar and June Boomer.

Id. at 115 (footnotes omitted). The piece is definitely worth a read even if you are not able to visit the site.

Professor Farber describes the impacts the cement plant had on its neighbors' use and enjoyment of their properties:

Despite these mitigation efforts, Atlantic had drastic effects on its neighbors, partly due to its quarrying operation rather than the cement manufacturing operation itself. The quarrying operation caused severe vibration for extended intervals. Using what was called the "millisecond delay" method, Atlantic used a series of blasts to remove layers of rock sequentially, so a new blast would go off just as the previous layer of rock was falling away. Thus, a sequence of explosions would continue for some period of time, seriously affecting neighboring landowners. For example, Floyd and Barbara Millious lived in a ranch house about half a mile from the quarry. The blasting caused large cracks in the walls, ceiling, and even the exterior of their house. Air pollution added to the troubles of the Milliouses and other neighbors. Fine dust from the cement operation coated the interior of their house with what the Milliouses described at trial as a "plastic-like coating." Mr. Millious recalls that he had to scrape cement dust from his windshield with a razor blade and that the gutters on his house filled with so much dust that they fell off the house." Joseph and Carrie Ventura, who lived about the same distance from the plant and the conveyer as the Milliouses, reported similar harm.

...

In short, the neighbors had all the disadvantages of living right on top of the San Andreas fault, without the California climate as compensation!

Id. at 116-117 (footnotes omitted).

Today, the plant is known as the Lafarge Ravena plant, and owned not by Atlantic Cement but by Holcim.

From our look, much has changed in the intervening six decades.

According to this chamber of commerce story, this is the largest cement plant in New York, and has contributed materials to some very notable projects including Giants Stadium, the Tappan Zee Bridge, and the World Trade Center memorial. There's an environmental consciousness on the plant's public face. As the video above shows, at least on the day that we were there, the traffic from Route 9W was louder than the plant's operation. That stuff coming out of the stack isn't smoke, but steam.

Thus, we did not witness a lot of nuisance-like activities. We couldn't get an up-close view because the main site is blocked by a large hill or berm, and all the roads into the plant are private (and you know we respect private property).

The plant today -- or at least those parts you can see -- from Route 9W looking south.

Google Maps does give a good overview of the site and the area. 

You know the litigation story: Boomer and his neighbors sued for a private nuisance. The trial court agreed this was a nuisance, and the question became remedy: damages or injunction? The trial court denied an injunction and awarded what seems like minimal damages. The Appellate Division affirmed. Off to the Court of Appeals.

The Boomer majority held that an injunction to stop the nuisance would deprive the area of a valuable economic resource -- at least when compared to the benefits that Boomer and other plaintiffs provided -- and thus the remedy would not be an injunction, but "permanent damages" to the plaintiffs' use and enjoyment of their properties.

Thus it seems fair to both sides to grant permanent damages to plaintiffs which will terminate this private litigation. The theory of damage is the "servitude on land" of plaintiffs imposed by defendant's nuisance. (See United States v. Causby, 328 U. S. 256, 261, 262, 267, where the term "servitude" addressed to the land was used by Justice Douglas relating to the effect of airplane noise on property near an airport.)

The judgment, by allowance of permanent damages imposing a servitude on land, which is the basis of the actions, would preclude future recovery by plaintiffs or their grantees (see Northern Indiana Public Serv. Co. v. Vesey, supra, p. 351).

This should be placed beyond debate by a provision of the judgment that the payment by defendant and the acceptance by plaintiffs of permanent damages found by the court shall be in compensation for a servitude on the land.

Id. at 228.

This has been viewed as an opinion driven by "law and economics" because it weighed the relative utility of the parties' use of their properties. Many have criticized the decision as allowing one property owner to buy a right to pollute and cause a nuisance.

The dissenting Justice accepted the view that imposing the remedy of permanent damages rather than injunction was impressing Boomer's property with what looked like a servitude, with the damages serving as just compensation. If that's the case it was a taking, but one without the requisite showing that it was for a public use. Private takings -- at least back in 1970 (not so much today) -- were verboten in New York:

I see grave dangers in overruling our long-established rule of granting an injunction where a nuisance results in substantial continuing damage. In permitting the injunction to become inoperative upon the payment of permanent damages, the majority is, in effect, licensing a continuing wrong. It is the same as saying to the cement company, you may continue to do harm to your neighbors so long as you pay a fee for it. Furthermore, once such permanent damages are assessed and paid, the incentive to alleviate the wrong would be eliminated, thereby continuing air pollution of an area without abatement.

It is true that some courts have sanctioned the remedy here proposed by the majority in a number of cases, but none of the authorities relied upon by the majority are analogous to the situation before us. In those cases, the courts, in denying an injunction and awarding money damages, grounded their decision on a showing that the use to which the property was intended to be put was primarily for the public benefit. Here, on the other hand, it is clearly established that the cement company is creating a continuing air pollution nuisance primarily for its own private interest with no public benefit.

This kind of inverse condemnation (Ferguson v. Village of Hamburg, 272 N. Y. 234) may not be invoked by a private person or corporation for private gain or advantage. Inverse condemnation should only be permitted when the public is primarily served in the taking or impairment of property. (Matter of New York City Housing Auth. v. Muller, 270 N. Y. 333, 343; Pocantico Water Works Co. v. Bird, 130 N. Y. 249, 258.) The promotion of the interests of the polluting cement company has, in my opinion, no public use or benefit.

Nor is it constitutionally permissible to impose servitude on land, without consent of the owner, by payment of permanent damages where the continuing impairment of the land is for a private use. (See Fifth Ave. Coach Lines v. City of New York, 11 N Y 2d 342, 347; Walker v. City of Hutchinson, 352 U. S. 112.) This is made clear by the State Constitution (art. I, § 7, subd. [a]) which provides that "[p]rivate property shall not be taken for public use without just compensation" (emphasis added). It is, of course, significant that the section makes no mention of taking for a private use.

In sum, then, by constitutional mandate as well as by judicial pronouncement, the permanent impairment of private property for private purposes is not authorized in the absence of clearly demonstrated public benefit and use.

Id. at 230-231 (Jasen, J., dissenting) (footnote omitted).

That smoke ... er steam .. stack is pretty visible, and there's a lot of traffic in the area that seems related to the plant. But otherwise, not a lot of evidence of nuisance-like effects.

From a nearby side road, for example, you can see the structure but it kind of blends in.

If you go, the best vantage point is along Route 9W.

And what of the Boomer and other plaintiff properties? There remain a few businesses in the area, as well as a few homes, but the biggest single use of the adjacent area is as a rather large centralized school. We took this shot from its massive parking lot).

So was this side trip worth it? On the whole yes, even though it wasn't very dramatic (or even very exciting except as a dirt lawyer thing). As we noted above, there's just something about being on the site that helps you get a better understanding -- a clearer mental picture -- of a case and the issues.

We can't say this one is worth a special trip, but if you are in the area or like us it is just a short detour, head on up route 9W and check it out. 

Boomer v. Atlantic Cement Co., 26 N.Y.2d 219 (1970)

Hawaii SCT: Most Of Those Eminent Domain Issues (Esp. Severance Damages) Are For Juries

We're not going to go into very much detail or provide commentary on the Hawaii Supreme Court's unanimous 88-page opinion in an eminent domain case we've been following, City and County of Honolulu v. Victoria Ward, Ltd., No. SCAP-22-0000335 (Dec. 29, 2023), because before we departed private practice for public interest law a couple of years ago, this was our client and our case (so we still have a bias).

Update: more on the decision from Jesse Souki, "Hawai'i Court Holds that Consideration of Severance Damages in Honolulu Rail Case Should be Left to the Jury" ("The HSCT was critical of the circuit court’s granting of summary judgment motions where there were genuine issues of material fact that should be decided by the jury[.]").

Short story: the Honolulu rail agency (we're still calling it "HART" and not the weird "Skyline" although the latter is accurate because the elevated like really does block the ... skyline) is employing eminent domain to take several easements on several properties which are in the middle of being developed by Victoria Ward as part of a long-term, multi-parcel, multi-structure residential and mixed-use project. In the run-up to the trial, the trial court disposed of a slew of issues by granting 12 (yes, twelve) motions for summary judgment. The losers of those motions sought and were granted interlocutory review, and the appeal was later transferred from the Intermediate Court of Appeals to the Hawaii Supreme Court, which heard oral arguments in June 2023. 

On the last business day of the year, the Supreme Court dropped the opinion. Here's how the Judiciary's web site described the issues:

These interlocutory appeals arise out of a condemnation action filed in 2018 by HART against Victoria Ward to take several acres of Victoria Ward’s mixed-use development community located in the Kakaʻako neighborhood of Honolulu (Ward Village). The purpose of HART’s taking was to construct a segment of railway and the Kakaʻako Station within Ward Village.

A number of the appeals at issue concern Victoria Ward’s claims for severance damages. The Hawaiʻi Community Development Authority (HCDA) issued Victoria Ward a Master Plan Permit in 2009. The Master Plan Permit states, in part: “a more detailed transit route and station location shall be addressed and incorporated.” The parties disagree as to whether this language in the Master Plan Permit, together with Victoria Ward’s conduct, preclude Victoria Ward from recovering severance damages for impacts to non-taken property.

The circuit court issued a number of summary judgment orders precluding Victoria Ward from seeking severance damages. The circuit court also ruled on several related matters, specifying that “blight of summons” interest accrual would be paused during the pendency of the interlocutory appeals, and that Victoria Ward may not recover for loss of a luxury tower that allegedly could have been built on the site of the Kakaʻako station, for relocation of units from that tower to less valuable locations, for severance damages to property stipulated to be distinct from those where condemnations took place, or for replacing lost parking if replacement costs exceed loss in value. HART appeals from other circuit court rulings, including those specifying that some of Victoria Ward’s damages may not be offset by certain alleged “special benefits” flowing from the rail project.

We granted transfer and consolidated HART and Victoria Ward’s appeals for all purposes including oral argument and disposition.

The unanimous opinion authored by Chief Justice Recktenwald summarized the specific issues:

The circuit court granted a dozen summary judgment motions, which are the subject of this interlocutory appeal. These summary judgment orders touch on a wide variety of disputes. Most importantly, the circuit court ruled that Victoria Ward is estopped from seeking severance damages, though the orders also address such issues as the appropriate valuation methodology for lost parking spaces, the extent to which a party may be entitled to just compensation for a speculative construction project, and the effect of pre-dispute communications and local ordinances on a condemnee’s ability to seek just compensation. In addition to appealing the partial summary judgment orders, the parties appeal an order pausing the accrual of blight of summons interest, and two orders denying or denying in part motions to strike.

Slip op. at 2-3 (footnote omitted).

The court next acknowledged the "factual and legal complexity of this case, and the circuit court's legitimate concern with narrowing the issues for trial," slip op. at 3, which should give you a clue that this one was headed more for Rule 56 territory than substantive eminent domain.

Indeed, on each of the most important issues, the arguments ended more with a whimper than a bang: resist the temptation to resolve these questions by a judge when there remain genuine factual disputes which preclude the granting of summary judgment. 

Your takeaway: even where the issues are multitudinous, the case complex (neither unexpected when this much is at stake), at heart (ha) the question of just compensation is a fact determination to be decided by the jury. The judge may want the case simplified, but in the end the jury gets to decide. And that means the jury gets to hear all the evidence, even if the judge ain't buying it.

For example, HART contended that the location of the rail line and train station was "established" by HART's submissions of a "locally preferred alternative" to the federal transit agency (yes, mainland taxpayers, you are paying a significant portion of this project's price tag), and therefore, Victoria Ward could not recover just compensation for any planned development in that footprint because it was obligated to design its residential project around the footprint. The court held that this was a fact dispute:

The parties dispute the extent to which the LPA “established” the location of the guideway and station, as opposed to simply expressing a preference. HART asserts that, although the rail alignment changed slightly since Ordinance 07-001 was enacted, the Ordinance and LPA made clear — at least two years prior to the grant of the Master Plan Permit in 2009 — that the rail guideway and Kaka‘ako Station would be constructed within Ward Village in a manner consistent with the LPA. Consequently, HART argues that HCDA was under a legal obligation to require any Ward Village structures to “accommodate, and not conflict with,” rail as set out in the LPA. As a result of HCDA’s alleged obligation to ensure that all structures were in accord with the LPA, HART asserts that HCDA could not legally approve any projects that conflicted with the LPA. Thus, under HART’s theory, Victoria Ward is precluded from recovering severance damages for any projects that would otherwise conflict with the rail line or Kaka‘ako Station location, as defined by the LPA.

We disagree with HART’s position. There is a dispute of fact as to whether the LPA established definite plans to build the Kaka‘ako Station within Ward Village, or if the LPA instead contemplated a station near, but outside of, Ward Village.

Slip op. at 17-18. As the opinion noted, "[t]he Ordinance's test does not reflect certainty as to a rail route or station location." Slip op. at 18.

To emphasize the jury-centric approach to just compensation, a search of the opinion reveals the word "jury" at least 33 times.

In another related example, the court noted that indeed, the master plan for the overall residential project that Victoria Ward obtained permission from the state agency that regulates land uses in this district, does require Victoria Ward to "address and incorporate Rail." Slip op. at 20. But that doesn't necessarily mean that by accepting this permit condition, Victoria Ward was agreeing to "plan around" rail, and thus had voluntarily surrendered its rights to just compensation. What the term "address and incorporate" means is a fact question:

There is a genuine issue of material fact as to the meaning of the Master Plan Permit requirement that future rail plans be “addressed and incorporated,” and there is a dispute as to the contemporaneous intentions of the parties. A factfinder should have the opportunity to ascertain the parties’ understanding of the phrase “addressed and incorporated” in light of the parties’ representations and actions both at the time the Master Plan Permit was granted and after the fact. Given the existence of a genuine dispute of material fact, the circuit court erred in granting the MPSJ, thereby depriving Victoria Ward of the opportunity to have the matter of severance damages decided by a jury.

Slip op. at 21. As the court put it earlier in the opinion:

We hold that, by entering into the Master Plan Permit and Development Agreement, Victoria Ward is obligated to address and incorporate rail. But it is the province of the jury to determine the contours of this obligation and to calculate the amount of severance damages, if any, to which Victoria Ward is entitled.

Slip op. at 14.

Here's the opinion's money quote, in our view:

We acknowledge the factual and legal complexity of this case, and the circuit court’s legitimate concern with narrowing the issues for trial. However, we conclude that in several circumstances, the circuit court incorrectly used summary judgment to resolve disputed factual issues. Most notably, the question of whether Victoria Ward is estopped from seeking severance damages involves disputed questions of fact and should be presented to a jury.

Slip op. at 3.

There's a good lesson here, especially since just compensation is often a very technical issue: judges should not limiting the appraisal theories or imposing their own views of what is the "best" way to value property, and just compensation cases are not subject to any extraordinary "gatekeeping" efforts by trial courts. Apply the usual Rule 56 and evidentiary rules, and you'll be fine.   

City and Cnty. of Honolulu v. Victoria Ward, Ltd., No. SCAP-22-0000335 (Haw. Dec. 29, 2023)

Happy New Year: Say Goodbye To The Right To Exclude, Steamboat Willie

As of today, the copyright protection for the "Steamboat Willie" version of Mickey Mouse has lapsed, meaning it is in the public domain.

What can and can't you do with this, as of January 1, 2024? As Duke lawprof Jennifer Jenkins writes as "Mickey, Disney, and the Public Domain: a 95-year Love Triangle," you have to be a bit careful:

Steamboat Willie and the characters it depicts – which include both Mickey and Minnie Mouse – will be in the public domain. As indicated in the green circle, this means that anyone can share, adapt, or remix that material. You can start your creative engines too—full steam ahead! You could take a page out of the Winnie-the-Pooh: the Deforested Edition playbook and create “Steamboat Willie: the Climate Change Edition,” in which Mickey’s boat is grounded in a dry riverbed. You could create a feminist remake with Minnie Mouse as the central figure. You could reimagine Mickey and Minnie dedicating themselves to animal welfare. (The animals in Steamboat Willie are contorted rather uncomfortably into musical instruments. PETA would not approve.)

You can do all of this and more, so long as you steer clear of the subsisting rights indicated by the orange circles, namely:

• Use the original versions of Mickey and Minnie Mouse from 1928, without copyrightable elements of later iterations (though not every later iteration will be copyrightable, as I explain below) and

• Do not confuse consumers into thinking that your creation is produced or sponsored by Disney as a matter of trademark law. One way to help ensure that your audience is not confused is to make the actual source of the work – you or your company – clear on the title screen or cover, along with a prominent disclaimer indicating that your work was not produced, endorsed, licensed, or approved by Disney.

So, is January 1, 2024 doomsday for Disney? No. Disney still retains copyright over newer iterations of Mickey such as the “Sorcerer’s Apprentice” Mickey from Fantasia (1940) as well as trademarks over Mickey as a brand identifier. People will still go to its theme parks, pay to see its movies, buy its merchandise. Its brand identity will remain intact.

In sum, yes, you can use Mickey in new creative works.

We're thinking Steamboat Willie and the Navigation Servitude, Mickey's Penn Central Adventures, or even The Condemning Agency's Apprentice (if you want to get closer to that line), n'est-ce pas?

Professor Jenkins's entire piece is a worthy read.