The famous corner of India and Milk, Boston
(at least for takings nerds)
Today, along with our friend and colleague Hawaii eminent domain lawyer Mark M. Murakami, we filed this Application for a Writ of Certiorari* in a condemnation case that has been pending for more than a decade (including more than five years in the court of appeals). We posted about the case -- including an aerial video of the property, located on Maui's south shore -- here.
The Question Presented:
May a jury determining just compensation consider evidence of the influence of the condemnation on the fair market value of property being taken?
You eminent domain types know the answer to this: No.
Indeed, no way! If you thought the "project influence" rule is a baseline requirement of the Fifth Amendment, a rule applied by courts nationwide, and for ages has held that "any increase or decrease in value to the condemned land directly attributable to the project for which the land is taken must be disregarded in determining the market value of the land," you'd be right. This is hornbook stuff. Nichols material. So obvi it almost goes without saying. Or at least should. Especially where, as here, the "project' is a single-parcel taking, so there is zero question about the scope of the project, or its influence (as you know, condemnation of a divided estate automatically terminates all lesser estates).
We won't go into great detail here on how this issue arose or why it has gotten this far, and will only recount the short story: the State of Hawaii was the tenant under a long-term lease of Williams's land. Twenty years into the lease, and with 10+ years remaining, the State decided it didn't like paying the rent and filed an eminent domain lawsuit. Kinda sus from a public use standpoint, but okay...
But then to add insult to injury, the State asserted it owed as just compensation only the value of the fee simple parcel.
Williams countered that on the date of valuation, the property was held as a divided estate, and thus must be valued as a divided estate. It was income-producing property and he was ready to introduce evidence that its actual use was also its highest and best use. And not only did the State's theory violate the project influence rule (the only way a buyer could obtain the fee simple estate from Williams would be by exercising eminent domain), it also ran afoul of another age-old Fifth Amendment rule:
But the Constitution does not require a disregard of the mode of ownership—of the state of the title. It does not require a parcel of land to be valued as an unencumbered whole when it is not held as an unencumbered whole. It merely requires that an owner of property taken should be paid for what is taken from him.
Boston Chamber of Commerce v. City of Boston, 217 U.S. 189, 195 (1910). [Ah, now you understand why in a case about Hawaii, photos of the site of the Boston Chamber case are posted.]
But the trial court was having none of it. It not only barred Williams from offering evidence of the value of his land as income-producing property, but also adopted the State's theory that the sole admissible method of valuation was by applying the "undivided fee" rule.
The Hawaii Intermediate Court of Appeals correctly reversed in an unpublished opinion the trial court's exclusion of the market value of Williams' property as income-producing property. But the court did not, unfortunately, complete the circle and also prohibit the State from introducing evidence of the fee simple valuation. Why? Because the only way to get a fee simple valuation would be to allow the jury to consider evidence of the project's influence on value. And that is a big constitutional no-no.
Looking at the map from the Boston Chamber opinion,
while on the street at the location. So meta.
We'll have more as this case progresses. We shall also post up more photos of the Boston Chamber location, taken during one of our "takings pilgrimages" in a separate post.
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*Under the Hawaii Rules of Appellate Procedure, when you ask the Hawaii Supreme Court for discretionary review, it isn't a "Petition," but rather an "Application." Even though the party is designated a "Petitioner." Go figure. We kind of like funky local twists like this because they are good reminders that we haven't quite reached the bland, boring, "national-franchise" stage of law practice yet.
