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CA8: You Believed The County When It Promised In The Settlement Agreement To Not Take Your Land In The Future? Shame On You!

One of the frustrations of challenging the power to take is ... let's say you win. Yay! You've stopped the taking!

So now what? Go back to your life safe in the belief that your property rights are secure? Maybe. If the government has had enough and says "no mas," your win may be the end of it.

But what if the government really really wants your property? Can it come at you again, armed with with the blueprint your successful public use challenge just provided for how to do it right this time? Probably. There are few situations where the usual "one shot" principle in civil cases -- also known as claim preclusion (res judicata to you traditionalists) -- ties a condemnor's hands and prevents it from taking a second, or third, or more shot.

So what about settling your public use challenge? If you can't stop the government from coming after your property again by the usual rules, what about getting it to agree to not come after you again?

That was the approach the property owners tried in Short v. Billings County, No 24-1612 (May 28, 2025), decided this week by the U.S. Court of Appeals for the Eighth Circuit.

There, the County began condemnation proceedings to take the Short property but the Short family preemptively sued, asserting the taking lacked a public use. In the end, they settled that case, with the County agreeing it "will not pursue eminent domain to condemn any of the Short property for a Little Missouri River Crossing or pursue any legal action against the Shorts to condemn their property..."

Well, you can guess what happened next. An election. And two years after the settlement agreement, "a newly elected Board of Commissioners voted to 'proceed with the Little Missouri River crossing bridge project in the selected location with the [Shorts' property].'" Slip op. at 3 (footnote omitted). Undeterred by its agreement to not do this, the County pressed with a quick take, with the while the Shorts responded by suing in federal court for breach of contract (inter alia) and asking it for a restraining order.

After the federal court granted the owners a preliminary injunction on the breach of contract claim, the County appealed.

The Eighth Circuit held that the "reserved powers" doctrine meant that whatever the County had agreed to couldn't be enforced. Can't "contract away" sovereign powers. And those powers include the power of eminent domain. We've seen that before in police power cases. As the Supreme Court noted in Georgia v. Chattanooga, 264 U.S. 472 (1924), The eminent domain power "is an attribute of sovereigty ... cannot be surrendered, and, if attempted to be contracted away, it may be resumed at will."

Outcome: settlement agreement unenforceable. Shame on you for trusting that the government would keep its word.

Even if this outcome might be predictable, this case highlights the danger when a property owners settles an eminent domain case, and part of that settlement is a promise by the government to not take the property in the future. The lesson here is that contracting with the government isn't like agreeing with anyone else. Rent your property to the government and down the road it doesn't want to pay the rent any longer? It can just take your property without fearing liability for breaching the lease. Settle a lawsuit with the government and enter into a settlement agreement? You better be ready to live with whatever terms you agreed to. And more.

So is there any way out of this, other than to just hope the government lives up to its promises? On that, there's a narrow ray of daylight. Remember the judiciary's power to enforce the constitution gives the courts the ability in some circumstances to remedy a violation by ordering the government to do stuff it might not otherwise do. 

We wonder if a finding that the County was violating the Fifth Amendment in the Shorts' first case might have made the difference, as the Ninth Circuit suggested here? Or whether, as Professor David Callies details here, a consent judgment or decree was possible?

Short v. Billings County, No. 24-1612 (8th Cir. May 28, 2025)

Property Owner Likely To Succeed On Claim That Prohibition Of Short-Term Rentals Is A Penn Central Taking

In this order, the U.S. District Court for the Northern District of Illinois temporarily enjoined enforcement of Chicago suburb Glen Ellyn's prohibition on renting property for less than 30 days.

Blakelick owns a five-bedroom single family home that when purchased was not located in Glen Ellyn. Since 2022, it has been offering the home for short-term rental on platforms like Airbnb. But in 2024, the property was annexed by the Village of Glen Ellyn. Blakelick continued to rent the property for less than 30 days. 

The dispute apparently began six months earlier when a neighbor began complaining about noise, culminating in the threat to "do everything in [his] capability to see to it that such use of property is banned in this area." Slip op. at 2. Apparently he was successful, because in 2025, the Village, now having jurisdiction over the property, adopted an ordinance prohibiting owners from renting property "for any period less than 30 days." Slip op. 3. 

Blakelick's federal lawsuit claiming a Penn Central taking, and motion for TRO followed:

Plaintiff contends that the Ordinance is unconstitutional and amounts to a regulatory taking because the Ordinance interferes with Plaintiff’s ability to profitably operate and maintain the Property. Plaintiff claims the Ordinance would require Plaintiff to sell the Property and suffer economic loss. During oral argument, Plaintiff argued that it could not operate the Property as a long-term rental because doing so would be unprofitable and Plaintiff could not sell the house for profit due to the large outstanding mortgage.

...

In its motion and at oral argument, Plaintiff avers that it would be economically infeasible to profitably operate and maintain the Property for rental periods extending beyond 30 days. If the Ordinance were to go into effect, Plaintiff claims that it would have to immediately sell the Property and would suffer an economic loss based on the outstanding encumbrance. Additionally, at the time Plaintiff’s members purchased the Property, it was in unincorporated DuPage County and not subject to Defendant’s laws or ordinances. Even when the Property was annexed to Glen Ellyn, Plaintiff alleges that the use of the Property for short-term rentals was a legal, non-conforming use that Plaintiff had a reasonable expectation would be “grandfathered in” pursuant to applicable Glen Ellyn ordinances.

Slip op. at 4, 5-6. 

To the court, the key is that at the time Blakelick purchased the property, it had "the assumption it could use the Property indefinitely for short-term rentals." Slip op. at 6. The court held that Blakelick is likely to prevail "because the Ordinance would prevent Plaintiff from economically utilizing the Property in a feasible manner and interferes with Plaintiff's investment-backed expectations." Id.

On one hand, this seems pretty straightforward. The before-and-after uses of the property and the fact that when the owner purchased the property there were no restrictions on length of tenancies (and indeed wasn't even subject to the Village's jurisdiction) cut in the owner's favor.

But you old hands know that these kinds of cases are not straightforward. Whether a challenge like this flounders on the shoals of "property" (compare this case with this one with this one), or the court simply says no, there's no taking, trying to pick up a common thread can be very frustrating.  

We'll keep following along, to see if this one adds any clarity. Stay tuned.

Memorandum Opinion and Order, Blakelick Properties, LLC v. Village of Glen Ellyn, No. 25-cv-04569 (N.D. Ill...

Dirt Law Wednesday: Absent Agreement Otherwise, Empty Space Remaining After Salt Mining Belongs To Surface Owner

The opinion of the Texas Supreme Court in Myers-Woodward, LLC v. Underground Services Markham, LLC, No. 22-0878 (May 16, 20205), doesn't involve eminent domain, takings, land use, or any of our usual topics. 

But we're posting it here because at bottom, students of these topics must be conversant in plain old property law, what we affectionately refer to as "dirt law." And this case is pretty dirty.

Short story: "A" owned the surface and conveyed the subsurface mineral estate to another. A portion of that mineral estate -- the right to mine salt -- was conveyed, in turn, to "B," who exercised that right. The extraction of the salt resulted in large caverns, which could be used to store (you guessed it) oil and gas storage. As a consequence, a dispute arose about who owned that cavern space, the surface owner, or the owner of the salt deed.

Here's how the court described the issues:

The parties agree that USM owns the salt under the 160-acre tract. They also agree that Myers’s surface estate includes not just the surface of the land, but also any portion of the subsurface that was not included in the 1947 conveyance of “all . . . oil, gas, and other minerals.” The question, then, is whether empty spaces within salt formations, created decades later as a byproduct of salt production, were included within the 1947 conveyance of “other minerals” to USM’s predecessors. Or, as USM frames it, whether its ownership of the “salt formations” includes the empty space created inside the salt formations by its salt-production efforts. If so, then USM owns those empty spaces. If not, then Myers owns them.

Slip op. at 8.

The Supreme Court held that, at least as the conveyances in this case were drafted, the cavern space belongs to the surface owner. Here's what the court viewed as the essential approach in these cases, and this reminder is why we're posting the opinion:

As far as we are aware, with respect to these 160 acres, Myers owns every stick in the proverbial bundle except for the mineral interest conveyed by the corrected 1947 mineral deed. Under that deed, USM’s predecessor obtained “all of the said oil, gas and other minerals in, on and under said land, together with all and singular the rights and appurtenances thereto in anywise belonging.” Out of that broad mineral estate, USM obtained only the salt—“all of Grantor’s right, title and interest, in and to all of the salt and salt formations only.”

Although we refer to Myers’s interest as the “surface estate” and to the interest that was severed and conveyed in 1947 as the “mineral estate,” we caution that the rights encompassed by these general labels may vary depending on the language chosen by the parties to any particular conveyance. Not all mineral estates are created equal. Resolving a dispute over the scope of a mineral conveyance should therefore begin with the text of the conveyance—not with generalizations about the default nature of a “surface estate” or a “mineral estate.” Doctrinal labels such as these—and the caselaw from which they derive—are of course very useful, indeed essential, when courts are confronted

Slip op. at 7.

The salt deed owner acknowledged the longstanding rule in Texas that voids left behind are the property of the surface owner. But, it argued, all of these cases involved voids left after the production of oil or gas, and there should be a different rule when the minerals extracted are not migratory and thus subject to the rule of capture (like oil and gas), but are in-place. We owned that salt formation, and if we improve that area by creating useful caverns, well those caverns are ours as well. See slip op. at 11 ("USM argues that if it improves its salt formations by creating useable caverns within them, then the caverns are simply a part of the salt formations it already owns, and so it owns the caverns just as surely as it owns the salt.").

While that argument "is not without intuitive appeal," the Supreme Court held that no, the salt deed owner doesn't own the salt formations, but rather the salt itself. That much is clear from the conveyance documents, and "much of this case boils down to the elementary observation that empty space is not salt." Slip op. at 14. Moreover, Texas dirt law allocates ownership of these subsurface caverns to the surface owner "absent a contrary agreements. Id.

And because you can make agreements to apportion your rights, the role of the law here is to "stick with simple, bright-line rules and to apply them consistently across a variety of fact patterns." Id. 

Myers-Woodward, LLC v. Underground Services Markham, LLC, No. 22-0878 (Tex. May 16, 2025)

New Cert Petition: To Assert A Contracts Clause Claim, Must You Predict Futurelaw?

Here's a recently-filed cert petition raising questions in a challenge to Los Angeles' County's imposition of ban on commercial evictions during Co-19. A lot of other jurisdictions around the country imposed eviction restrictions or prohibitions on residential properties, but LA County stood alone in restricting commercial evictions.

This one asks whether a party is categorically barred from asserting a claim that a local government impaired a contract solely because other jurisdictions had adopted or were adopting similar restrictions (although here, those restrictions affected only residential leases), and thus had no expectation of having his contract unimpaired.  

This is out of our shop, so we're not going to say much more about it except to post the Question Presented:

In response to the COVID-19 pandemic, the County of Los Angeles enacted a moratorium that prohibited commercial landlords from, among other things, evicting defaulting tenants and demanding immediate payment of overdue rent. Petitioner, a retired auto mechanic and small commercial landlord who suffered substantial losses by the moratorium, brought suit to challenge it as an unconstitutional “Law impairing the Obligation of Contracts,” U.S. Const. art. I, § 10. The district court dismissed Petitioner’s complaint for failure to state a claim, and the Ninth Circuit affirmed, both on the sole ground that the moratorium’s enactment and application to Petitioner’s lease contract was foreseeable. In contrast, this Court, followed by other lower courts, has used foreseeability as merely one, non-determinative factor to be considered in deciding whether a party has advanced a viable Contracts Clause claim. See, e.g., Sveen v. Melin, 584 U.S. 811, 820-24 (2018); City of El Paso v. Simmons, 379 U.S. 497, 514-15 (1965); Melendez v. City of New York, 16 F.4th 992, 1033-34 (2d Cir. 2021); Heights Apartments, LLC v. Walz, 30 F.4th 720, 728-30 (8th Cir. 2022).

The question presented is:

Whether a party is barred from stating a claim for relief for violation of the Contracts Clause merely because the party could have foreseen the enactment of the contract-impairing law?

Case is set for conference later this week.

Petition for Writ of Certiorari, Iten v. County of Los Angeles, No. 24-1141 (U.S. May 7, 2025)

Memorial Day 2025: Arlington National Cemetery And Takings

Programming note: On the weekend we've set aside to remember our nation's war dead, we thought we'd repost this one, about how Arlington National Cemetery came to be, and how yes, there's a takings story there.

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You know how we're always saying that the provisions in the Takings Clause are "self-executing," that even in the absence of a waiver of sovereign immunity, the Tucker Act, and section 1983, property owners would still be able to maintain a claim for compensation? Well here's an article that explains that how that rule was first articulated, and not in a dry academic way, but with a fascinating historical story.

It's the tale of United States v. Lee, 106 U.S. 196 (1882). We knew the land that is now Arlington National Cemetery was once owned by Robert E. Lee, but we can't say that we gave much thought to how it became public property. We always assumed that it had simply been seized as war booty from Lee during the Civil War, and that was that.

In The Arlington Cemetery Case: A Court and a Nation Divided, 37 The Journal of Supreme Court History 1 (March 2012), lawprof and historian Anthony Gaughan gives us a concise history of the legal battle that followed the Union's seizure of Arlington:

In May 1861, the United States Army seized the Virginia home of Confederate General Robert E. Lee and his wife, Mary Lee. During the Civil War, the Lincoln Administration converted the estate into a refugee camp for runaway slaves and a military cemetery, a burial ground that is known today as Arlington National Cemetery. In December 1882, seventeen years after Lee surrendered at Appomattox, the United States Supreme Court ruled that the federal government had unlawfully seized the Arlington estate without paying just compensation to the Lee family. It further held that the doctrine of sovereign immunity did not bar the Lees from bringing suit to vindicate their legal title to the property. In the aftermath of the Supreme Court’s ruling, Congress reached a settlement agreement with the Lee family. Arlington National Cemetery has remained the lawful property of the United States ever since. The Supreme Court’s ruling in United States v. Lee made clear that the Constitution is not suspended in wartime. At all times, legal and constitutional limits govern the exercise of official power. This article tells the story of United States v. Lee and places the case in historical context.

This article is an excerpt from the book The Last Battle of the Civil War: United States Versus Lee, 1861-1883 (2011), available here, and here (e-book). Highly recommended.

One final note. Arlington is the most well-known of our national cemeteries. But there are hundreds more, both domestically and overseas. So when we are in the neighborhood of one, we try and pay a visit even if only briefly to leave a silent word of thanks to these gentle heroes.

 

Programming note: On the weekend we've set aside to remember our nation's war dead, we thought we'd repost this one, about how Arlington National Cemetery came to be, and how yes, there's a takings story there.

---------------------------------------------------------

You know how we're always saying that the provisions in the Takings Clause are "self-executing," that even in the absence of a waiver of sovereign immunity, the Tucker Act, and section 1983, property owners would still be able to maintain a claim for compensation? Well here's an article that explains that how that rule was first articulated, and not in a dry academic way, but with a fascinating historical story.

It's the tale of United States v. Lee, 106 U.S. 196 (1882). We knew the land that is now Arlington National Cemetery was once owned by Robert E. Lee, but we can't say that we gave much thought to how it became public property. We always assumed that it had simply been seized as war booty from Lee during the Civil War, and that was that.

In The Arlington Cemetery Case: A Court and a Nation Divided, 37 The Journal of Supreme Court History 1 (March 2012), lawprof and historian Anthony Gaughan gives us a concise history of the legal battle that followed the Union's seizure of Arlington:

In May 1861, the United States Army seized the Virginia home of Confederate General Robert E. Lee and his wife, Mary Lee. During the Civil War, the Lincoln Administration converted the estate into a refugee camp for runaway slaves and a military cemetery, a burial ground that is known today as Arlington National Cemetery. In December 1882, seventeen years after Lee surrendered at Appomattox, the United States Supreme Court ruled that the federal government had unlawfully seized the Arlington estate without paying just compensation to the Lee family. It further held that the doctrine of sovereign immunity did not bar the Lees from bringing suit to vindicate their legal title to the property. In the aftermath of the Supreme Court’s ruling, Congress reached a settlement agreement with the Lee family. Arlington National Cemetery has remained the lawful property of the United States ever since. The Supreme Court’s ruling in United States v. Lee made clear that the Constitution is not suspended in wartime. At all times, legal and constitutional limits govern the exercise of official power. This article tells the story of United States v. Lee and places the case in historical context.

This article is an excerpt from the book The Last Battle of the Civil War: United States Versus Lee, 1861-1883 (2011), available here, and here (e-book). Highly recommended.

One final note. Arlington is the most well-known of our national cemeteries. But there are hundreds more, both domestically and overseas. So when we are in the neighborhood of one, we try and pay a visit even if only briefly to leave a silent word of thanks to these gentle heroes.

 

New Article: "The Pitfalls of Objectively Measured Just Compensation: When Market Value Isn't Enough," ALI Practical Real Estate Lawyer (2024)

Be sure to check this out. The Practical Real Estate Lawyer has published an article by colleague Matthew Ackerman (who has since become a Michigan Court of Appeals judge). 

In "The Pitfalls of Objectively Measured Just Compensation: When Market Value Isn't Enough" (pdf here), he writes about the ways that "just compensation" isn't truly just. Those of you who have been around even a short time know how this works (or doesn't). Market value as the measure when, by definition, eminent domain isn't a free market transaction. The refusal to include fees and costs in the concept of just compensation (indemnity only for the property, not the property owner). Lack of relocation and business losses. 

He also suggests some ways to deal with this. Here's his summary of the piece:

This article explains why a subjective approach to just compensation would lead to more just outcomes for property owners, along with why implementing such an approach would be impractical. It then discusses ways some jurisdictions compensate property owners beyond the market value of their property to capture some of the intangible losses and make property owners closer to whole. Following that discussion, the article summarizes some of the more creative reforms academics have proposed to target this compensation conundrum.

The article concludes by suggesting that states pay displaced homeowners a multiple of fair market value based on how long the owners have occupied the home. That multiplier—based on the average difference between property owners’ subjective value and fair market value—would, on average, fairly compensate property owners and also incentivize condemnors to take property only when the value of the public project exceeds the owners’ subjective losses.

Read it.

Statute Authorizing Fiber Optic Installation On Railroad Property Authorizes Takings For Nonpublic Use, Violating Virginia's Post-Kelo Constitutional Amendment

In the wake of Kelo, the people of Virginia overwhelmingly amended their state constitution (the vote was 75% in favor) to make it much clearer about what qualifies as a public use supporting an exercise of eminent domain, what doesn't qualify, and how public use is proven:

That the General Assembly shall pass no law whereby private property, the right to which is fundamental, shall be damaged or taken except for public use. No private property shall be damaged or taken for public use without just compensation to the owner thereof. No more private property may be taken than necessary to achieve the stated public use. Just compensation shall be no less than the value of the property taken, lost profits and lost access, and damages to the residue caused by the taking. The terms "lost profits" and "lost access" are to be defined by the General Assembly. A public service company, public service corporation, or railroad exercises the power of eminent domain for public use when such exercise is for the authorized provision of utility, common carrier, or railroad services. In all other cases, a taking or damaging of private property is not for public use if the primary use is for private gain, private benefit, private enterprise, increasing jobs, increasing tax revenue, or economic development, except for the elimination of a public nuisance existing on the property. The condemnor bears the burden of proving that the use is public, without a presumption that it is.

Va. Const. art.1, § 11.

Most fundamentally, the amendment also made clear that the right to private property is a "fundamental" right, as highlighted above.

But these revisions were not universally accepted, with some opining that the amendments merely affirmed existing practice and that the new language was largely superfluous. 

The Virginia Supreme Court just cleared up any lingering uncertainty.

In Norfolk Southern Railway Co. v. State Corp. Comm'n, No. 240869 (May 22, 2025), the court held that the constitutional amendment, and the statute it enabled, "recogniz[ed] the fundamental right to own private property." Slip op. at 6. Most importantly, the court held this recognition was not hortatory. 

Here's the story. A railroad challenged a Virginia statute that permits broadband service providers to install fiber optic cables across railroad property. The statute caps the license fees a provider may be required to pay to a railroad for these installations. After a provider filed applications with the Commonwealth's State Corporation Commission to exercise its statutory rights, the railroad objected. It didn't protest initially, only after the provider rejected its request for a license fee in excess of the statutory cap:

Norfolk Southern filed a petition for relief with the Commission. Among other things, Norfolk Southern asserted that Code § 56-16.3 violated Article I, Section 11 of the Constitution of Virginia. Emphasizing that Cox was a private, for-profit company, Norfolk Southern maintained that the application of Code § 56-16.3 effectuated a taking of its property for a nonpublic use. Norfolk Southern also argued that Code § 56-16.3 eliminated the condemnor’s burden to establish the public use underlying a proposed taking.

Slip op. at 4. The Commission rejected the railroad's claim, after which the railroad appealed to the Virginia Supreme Court.

Describing the constitutional limitations as "robust," the Supreme Court held that "[a]s applied in this case, Code § 56-16.3 authorizes a private broadband service provider to take railroad property for a nonpublic use. We hold that the challenged application of Code § 56-16.3 violates Article I, Section 11 of the Constitution of Virginia." Slip op. at 1.

The court acknowledged that a party challenging a statute as unconstitutional "bears a heavy burden." Slip op. at 5. But also recognized that "[e]minent domain statutes, however, must be 'strictly construed.'" Id. (quotation omitted). And we know why: when a statute authorizes the taking of private property, "every reasonable doubt is to be resolved adversely to that right."

The railroad pointed out that the fiber optic statute authorized a taking for a nonpublic use (the statute does not mention public use), and that it "eliminates Cox's constitutionally imposed burden to establish the public use underlying the proposed taking." Slip op. at 8. The court agreed:

Pursuant to the plain terms of Article I, Section 11 of the Constitution of Virginia, “[t]he condemnor bears the burden of proving that the use is public, without a presumption that it is.” Despite this clear constitutional directive, Code § 56-16.3 does not even reference the term “public use.” The statute permits a broadband service provider to install fiber optic cables across railroad property after it files an application to do so with the affected railroad company. See Code § 56-16.3(B), (C). The broadband service provider’s application is not required to address the public use underlying the proposed crossing. See Code § 56-16.3(C)(1). Although a railroad company may petition the Commission for relief based on three specific grounds, none of these grounds address the public use of a proposed crossing. See Code § 56-16.3(H).

Id.

Installing fiber optic cables is a permanent (or more precisely, an "indefinite") physical taking, and because the broadband provider is a "private, for-profit broadband service provider" and "not a government entity, public service corporation, or public service company," the statute violates the Virginia Constitution.

The broadband provider argued that the statutory omission of the words "public use" and its failure to put the burden on the provider in accordance with the Constitution didn't matter because fiber optic broadband results in a public benefit. The court was having none of this, concluding that the Constitution distinguishes between public use and public benefit:

We acknowledge that the expansion of an existing broadband network may benefit the members of the public who would be served by the expansion. Nevertheless, a taking for a “public benefit” is not necessarily a taking for a “public use.” See Hoffman Family, LLC v. City of Alexandria, 272 Va. 274, 289 (2006); Phillips, 215 Va. at 547. “The term ‘public use’ connotes a possession, occupation, and enjoyment of the land by the general public, or by public agencies.” Hoffman Family, LLC, 272 Va. at 289. “In a condemnation proceeding, the appropriate consideration is whether a public use predominates, not whether a public benefit may result.” Id. (emphasis omitted).

Slip op. at 9-10 (footnote omitted).

Statute invalidated, case remanded for entry of judgment in the railroad's favor.

Norfolk Southern Railway Co. v. State Corp. Comm'n, No. 240869 (Va. May 22, 2025)

CFC: Allegation That Gov't Ordered Destruction Of Bump Stocks Pleaded Physical Takings Claim

We're back to bump stocks. Indeed, we have covered cases raising similar issues so we're not going into too much detail on the U.S. Court of Federal Claims' recent decision in The Modern Sportsman, LLC v. United States, No. 19-449 (May 8, 2025), and we'll just assume you, like us, have been following along with this issue.

Suffice it to say that the federal government adopted regulations defining these devices as prohibited machine guns and gave those in possession 90 days to either turn them over to the government, or to destroy them. The plaintiffs destroyed their bump stocks and then sued the federal government for a taking.

The CFC dismissed the complaint under the government's "police power" authority to prohibit contraband and noxious items. As we noted in this post, the line between uncompensated destruction and compensated takings was not as clear at the CFC saw it (the Armstrong rationale cannot be ignored, even where a taking may be for a very good public reason), and thus the Federal Circuit affirmed, but shifted the rationale from police power to a lack of a private property interest. After the Supreme Court denied cert, "that was that." Slip op. at 2.

Meanwhile, other bump stock owners challenged the validity of the administrative rule declaring these things machine guns. And there, the owners found more success, with the Supreme Court eventually concluding that the agency lacked the authority to adopt the bump stock rule. The owners here "then asked this Court to revive this lawsuit, which the Court did ... [t]he next day, plaintiffs amended their pleadings to add an illegal exaction claim in addition to their takings claim." Slip op. at 3. 

The government sought dismissal, arguing that the bump stock owners alleged a physical taking but the government hadn't physically seized anything. It merely required the owners to destroy the bump stocks: as the CFC put it, the government "acknowledges that plaintiffs alleged that 'the Rule required bump stock owners to destroy or surrender the devices to ATF.' Reply 2. That does not pass muster for the government, however, because the government 'did not seize any devices or otherwise physically invade plaintiffs’ property.' Id. at 3." Slip op. at 4. In short, we didn't actually seize anything of yours, plaintiffs; we merely required you to destroy your property. Really. 

The CFC wasn't having any of that, and rejected this too-clever-by-half argument:

The Court cannot agree. Let us be clear that the government need not literally force private persons to turn over their property for a taking to occur; a legal requirement is sufficient. For example, in Horne, the Supreme Court held that an administrative order requiring raisin croppers to “give a percentage of their crop to the Government, free of charge” effected a compensable appropriation. 576 U.S. at 355. The government did not literally oust the farmers from possession of the raisins, yet a taking occurred because the order made a “formal demand” backed by fines and penalties. Id. at 362, 367–68. It is the same here. The Rule plainly states: “This final rule requires the destruction of existing bump-stock-type devices.” 83 Fed. Reg. at 66,549. It then instructs: “Individuals who have purchased bump-stock-type devices prior to the implementation of this rule must destroy the devices themselves prior to the effective date of the rule or abandon them at their local ATF office.” Id. Finally, it makes clear that “individuals are subject to criminal liability . . . for possessing bump-stock- type devices after the effective date of regulation.” Id. at 66,525. These statements undoubtedly constitute a formal demand to destroy or transfer possession of bump stocks, satisfying the standard under Horne.

Slip op. at 4-5.

If this argument strikes you as nonsense, welcome to our world, where arguments like this are put forth with a straight face on a regular basis. 

And if that wasn't enough, the government next argued that the regulations didn't actually require the owners to destroy their bump stocks, "but 'merely clarified' the 'longstanding statutory law' banning machineguns." Slip op. at 5. "Put plainly, the government essentially argues that the Rule is an informational document apprising the public of pre-existing legal obligations." Id. The CFC held "[t]hat too is incorrect." Id. That seems to be putting it mildly. What do you think would have happened to bump stock owners who didn't comply with this "informational" rule and held on to their bump stocks?

Short story: the complaint alleged a physical taking.

Next, however, the CFC rejected the exaction claim, based on the remedy sought. As we know, the CFC is limited to awarding monetary damages in these kind of cases. The CFC held that an "exaction" generally "involves money that was 'improperly paid, exacted, or taken from the claimant.'" Slip op. at 7 (quotations omitted). Here, the CFC held, no money changed hands and there's no statute otherwise authorizing a claim for money damages:

In sum, plaintiffs cannot be said to have paid money, directly or “in effect,” for a very straightforward reason: They lost personal property, not money. Indeed, plaintiffs have not alleged that they spent any money for any purpose; or paid any money to any In sum, plaintiffs cannot be said to have paid money, directly or “in effect,” for a very straightforward reason: They lost personal property, not money. Indeed, plaintiffs have not alleged that they spent any money for any purpose; or paid any money to any

Slip op. at 8-9.

The CFC wrapped up by -- get this -- calling out the property owners' lawyers for failing to expressly clarify that one of the cases they cited and relied on didn't actually hold that an exaction could be a demand for "money or property," only money. Slip op. at 9. The court acknowledged that the citation didn't actually misquote the case, but that the lawyers should have been more candid that they were arguing for an extension of the law, and that the case limited exactions to money.

We're fine with that (especially in the AI era), and requiring advocates to be candid. 

But where's the call-out of the government's horse hockey arguments, noted above? Dead silence, of course. In our view, the borderline frivolous, time-and-expense wasting, divorced-from-reality arguments the government made are equally if not more deserving of censure. 

Call us if that ever happens. We'll wait.

The Modern Sportsman, LLC v. United States, No. 19-449 (Fed. Cl. May 8, 2025)

CA4: No Property Right To Conduct A Business, So No Taking For Police Response To Area Crime Surge

In Brady v. City of Myrtle Beach, No. 23-1847 (May 16, 2025), the U.S. Court of Appeals for the Fourth Circuit made short work of the takings claims brought by several business owners who claimed the city directly or indirectly shut them down because their businesses contributed to a rise in crime in the area.

Myrtle Beach's "Superblock," was one of those problem areas. As the Fourth Circuit put it:

In 2015 and 2016 alone, eleven people were shot in the Superblock. Dozens more were sexually assaulted, battered, or robbed. Because most of these crimes occurred in or around a small cluster of bars, the City increased its police presence in the area and began closely investigating the establishments for compliance with state and local safety regulations. Despite these measures, crime continued unabated.

Slip op. at 2.

Some of the details of those incidents:

The crime in the Superblock during this period was both frequent and severe. Between 2015 and 2016, eight individuals were shot in or just outside Pure Ultra, another was shot inside Natalia’s, and two more were shot in neighboring bars. In addition to the shootings, many other individuals were sexually assaulted, beaten, or robbed. In Pure Ultra, for example, one man was assaulted and broke his foot, an assailant used his girlfriend as a human shield to block taser fire from police, and an 18-year-old woman was raped inside the club. In Natalia’s, an employee sold drugs to customers, a patron punched a staff member in the face, and a DJ was arrested after police found a mason jar full of marijuana in plain view and a loaded firearm in his equipment bag.

Slip op. at 4.

Yikes.

After the city shut down two of the bars by revoking their licenses for "repeated legal violations" and a third bar closed without direct city intervention for lack of business, the businesses sued claiming, inter alia, a taking (they also claimed the crack down was racially motivated). The district court directed a verdict for the city on all claims.

The Fourth Circuit affirmed. It didn't reach the merits of the takings claim, instead concluding as a threshold matter that the bar owners did not allege and prove a private property interest that was subject to a taking. Here's the entirety of the court's rationale:

We start with whether appellants have a constitutionally protected property interest. Appellants assert that they have a protected property interest in “operating their businesses free from harassment, discrimination and selective enforcement.” Opening Br. at 25. But the Supreme Court has been clear that “the activity of doing business, or the activity of making a profit is not property.” Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 675 (1999).

Nor do appellants have a protected property interest in their business licenses. Under South Carolina law, “an interest that depends totally upon regulatory licensing is not a property interest.” Mibbs, Inc. v. S.C. Dep’t of Revenue, 524 S.E.2d 626, 628 (S.C. 1999). That is consistent with traditional principles of property law. Since the days of the Early Republic, it has been well understood that an individual does not have a property interest in “mere ‘privileges’” which “belong[] to private people only so long as the legislature allowed them to exist.” Caleb Nelson, Vested Rights, “Franchises,” and the Separation of Powers, 169 U. Pa. L. Rev. 1429, 1433 (2021); see also, e.g., Brick Presbyterian Church v. City of N.Y., 5 Cow. 538 (1826); Metro. Bd. of Excise v. Barrie, 34 N.Y. 657 (1866); Bos. Beer Co. v. Massachusetts, 97 U.S. 25 (1877).

Appellants do have a protected property interest in their leaseholds. But appellants do not argue that the City “took” their leasehold interests. Nor could they. There is no suggestion in the record that the City physically interfered with appellants’ right to possess their land pursuant to their leases. And it cannot be said that the City’s enforcement actions went “too far” with respect to the appellant’s ability to use their land. The “economic impact” of the enforced regulations is minimal, the “interference with reasonable investment-backed expectations” is nonexistent, and the “character of the government regulation” is ordinary. State laws from time immemorial have expected businesses to take basic measures to prevent crime on their premises. On top of that, the licensing laws enforced here only prevent appellants from using their land to operate a bar. That hardly “saps too much of the property's value” such that it must qualify as a “taking.” Sheetz v. Cnty. of El Dorado, 601 U.S. 267, 274 (2024).

Slip op. at 7-8 (footnote omitted).

Brady v. City of Myrtle Beach, No. 23-1874 (4th Cir. May 16, 2025)

CA11: State Can Be Ordered To Stop Withholding Just Compensation

Florida, like a lot of other jurisdictions, has an unclaimed property program whereby if an owner is deemed to have abandoned property (remember that old bank account you had in college years ago with a $2.50 balance?), the holder of that property may transfer it to the State, which keeps it until you come get it. In the meantime, however, under Florida's scheme if that property is money (or is reduced to money), any interest which accrues is used by the State to pay for public schools. (That may not be constitutional, but at least funding schools with someone else's money seems a better use of the interest than funding the State Fair.)

Florida had some of Maron's money in its unclaimed property fund, a whopping $26.24. State law allowed her to get that money back, but as noted above, also prohibited her from getting the interest, so she sued for a taking.

In federal court. 

If that sets off your alarm bells, you'd be right. You know why: the Eleventh Amendment. Which has been interpreted to bar a plaintiff from suing a state in any federal court (yes, we know that's not what the Eleventh Amendment says, but the Supreme Court reads it that way). 

But there are exceptions, most notably Ex parte Young, which says that the Eleventh only bars federal court suits for retrospective damages, and allows you to sue a state in federal court if you limit the relief sought to prospective injunctive relief.

In Maron v. Chief Financial Officer of Florida, No. 23-13178 (May 16, 2025), that's what Maron thought she did. She didn't ask the court to award just compensation.Instead, she asserted Florida was keeping the interest, and there was no way to get compensation. 

The district court agreed with Florida and held that she was suing for a taking, an act Florida already had accomplished, and thus was not something that the court could order it to stop doing. And thus the relief she sought was not prospective, only remedial. Case dismissed.

The U.S. Court of Appeals for the Eleventh Circuit rejected that argument. Here's what we think is the money quote:

That inquiry resolves in the Marons’ favor. The Marons alleged an ongoing violation of federal law—that the State has appropriated their refund and failed to give them just compensation. And they sought prospective relief—that the district court declare a part of the Act unconstitutional for precluding recovery of just compensation and that it order the State to pay just compensation when they later file a claim. The Ex parte Young exception applies.

Relying on Edelman v. Jordan, 415 U.S. 651 (1974), the State argues that the Marons’ prayer for injunctive relief is really a request for retrospective relief. The State contends that the request to “pay the Marons and class members past monetary gains when they file a claim in the future . . . amounts to nothing more than a prospective request for retroactive monetary damages.” We disagree.

Slip op. at 17.

On that, the Eleventh Circuit joined at least one other circuit (the Ninth, which held in this case that the State of Oregon could be sued in federal court when the remedy sought is injunctive relief ordering Oregon to stop withholding interest that should have gone to the property owner plaintiffs).

This can be a tricky issue. Although there's no conceptual reason supporting any distinctions in the relief sought based on the nature of the taking, courts do seem to treat these type of cases differently. On one hand, where the state appears to be wrongfully keeping property and refusing to give it back to the owner, the courts are more likely to conclude that the owner may seek a prospective injunction to command the state to stop it. See this case and that Ninth Circuit decision. On the other hand, if it appears to be a case where the taking is some kind of interference with use and the injunction looks like the plaintiff is trying to plead around the Eleventh Amendment, then the more likely it is the court will reject that effort.

None of these sort of mental gymnastics should be necessary, of course. Maybe just compensation is self-executing and not subject to the Eleventh Amendment (an issue the Supreme Court dodged last Term). Or maybe the Fourteenth Amendment waived any Eleventh Amendment immunity the states may have enjoyed. We'd hope the Supreme Court would take up the mantle and resolve these uncertainties.

The entire Eleventh Circuit opinion is worth your time. In addition to holding that the claim was not subject to Eleventh Amendment immunity, relying on Knick, the court concluded that the takings claim was ripe and that the owner had standing to assert the claim and was suffering an actual injury (an issue intertwined with the merits of the takings claim and the relief sought):

The Marons satisfied these three elements, by alleging that the State took their refund and used it. They pointed to the Act’s requirement that presumed-unclaimed property be delivered to the State’s custody, see Fla. Stat. § 717.119(1); they alleged that the State held their refund in its custody; and they alleged that the State “used the property for public purposes, including by investing the property and earning interest, and otherwise using it to fund the State’s operations and programs.” So the harm the Marons pleaded is concrete: they cannot use their refund now that it has been delivered into the State’s custody—they must apply and be approved by the Department to access the property. See Fla. Stat. § 717.124(1). The pleaded harm is also particularized: the Marons cannot use their refund. And that harm is actual: the refund has already been placed into the State’s custody, where it cannot be used by the Marons. In short, the Marons suffered an injury in fact.

Slip op. at 9-10.

Finally, the court rejected the State's argument that the takings claim was not ripe, because Maron had not applied for refund, and the State's finance department had not denied the application. The court noted this would be a "pointless formality," because doing so would be futile: the statute itself makes clear that the State has not obligated itself to provide the interest, and "[n]othing is gained by further requiring the Marons to make and be denied a request with the Department." Slip op. at 16.

Maron v. Chief Financial Officer of Florida, No. 23-13178 (11th Cir. May 16, 2025)

New Article: "Daunting Odds: Regulatory Takings Claims in The United States Circuit Courts of Appeals," 94 Miss. L. J. 637 (2025)

You know the claim: even after the federal courts opened back up to regulatory takings claims, winning a case is still pretty difficult. 

Yes, that may be by design: maybe it's not supposed to be easy to get in the way of the regulatory state and prevail on a claim that a government action has "gone too far" by having similar effects on the owner's property rights as an exercise of eminent domain. Or maybe it is. But either way, those of you who have been at this long enough can sense that something isn't quite right. That our property owners are not getting a fair shake from the courts. That there's an imbalance in The Force. 

Whether it is surviving a motion to dismiss where the court applies stricter pleadings standards than in other civil cases, or getting to the merits by escaping summary judgment, or even having a court of appeals wipe out a favorable jury verdict, it is the rare lawyer that doesn't counsel the client that these are tough cases, and not simply because they are difficult to prove. Or, in the words of student-author Ramsey Thrasher, "daunting." 

We'll say. His newly-published article, "Daunting Odds: Regulatory Takings Claims in The United States Circuit Courts of Appeals" (94 Miss. L. J. 637 (2025)), puts forward some empirical proof you aren't just imagining it: "[O]ut of the 366 total cases, only twenty-four decisions have been rendered in favor of the claimant throughout every circuit." The article studied all of the regulatory takings decisions by the federal appeals courts, and lays out the stats.

Here's the summary, from the Introduction:

Since the latter half of the 20th century, the federal Circuit Courts of Appeals have ruled on numerous regulatory takings claims. The cases cover a diverse plethora of issues and industries allegedly affected by regulations, ordinances, and statutes passed by government entities throughout the country. While the factors surrounding the cases are different, the outcomes are shockingly parallel.

This paper aims to compile and compare the many cases under regulatory takings law. Part I establishes a strong foundation by providing a thorough background into Takings Law. This section not only describes regulatory takings but also introduces seminal cases such as Penn Central Transportation Company v. City of New York, which produced the standard test applied to regulatory taking claims today.

Part II consists of a detailed overview of each circuit’s approach to regulatory takings claims. Included in each analysis is a breakdown of how many regulatory takings claims have been decided by each court, how many times the courts have ruled in favor of the government entity compared to the claimant, the industries allegedly affected, reasoning commonly asserted by the courts as to why the regulatory taking claims have failed, and how the courts have applied the Penn Central test.

Part III then analyzes whether the courts have remained consistent, whether the courts seem to protect property rights or promote government intrusion, whether a prediction can be made on how the courts will rule on regulatory taking claims in the future, and whether bringing a successful regulatory takings claim is equally as daunting in each circuit.

The piece goes through each circuit, and there's a section on how the courts' track record may be used to predict how those courts will rule down the road. The bottom line: a claimant 6.6% chance of success:

The number of cases addressing regulatory takings compared to the overall low success for regulatory taking claims allows for one to predict with relative ease how the court will rule on future regulatory taking claims. Over the almost fifty-year span since the courts first began deciding regulatory taking issues, the courts have rendered decisions in 366 cases. In 342 of those cases, the court ruled in favor of the ordinance, regulation, or statute. On the other hand, the court ruled in favor of the claimant in only twenty-four cases. These figures indicate that a claimant has a 6.6 percent chance of bringing a successful regulatory taking claim in front of a federal circuit court of appeals. Considering this low success rate and the courts’ level of consistency, excluding the 2000s, it is relatively convenient to assume the courts will continue to rule against the complaint in future regulatory taking claims.

94 Miss. L. J. at 677.

The culprit? Penn Central. See id. ("Furthermore, as long as the Penn Central test remains unaltered and the standard in evaluating regulatory taking claims, claimants can expect the courts to rule in favor of the government action. While some praise the Penn Central test for its flexibility, others believe the test is “maddeningly unpredictable” and 'favor[s] the government in most situations.'").  

Check it out. This is a must-read, if only to confirm your gut sense that there's a thumb on the scale and the low success rate isn't due to bad cases.

CA11: 25-Year-Old Takings Case Isn't Ripe

In 1996 (you remember 1996, don't you?), Corey purchased a vacant parcel, adjacent to a busy crossroads, and thus an ideal location for a truck stop. Problem was that the zoning was C-2, which didn't permit truck stops (although it did allow gas stations and convenience stores).

So began a 25+ year odyssey, which in Corey v. Rockdale County, No. 23-13097 (May 7, 2025), the U.S. Court of Appeals held that Corey's takings claim was not ripe because the County amended the challenged zoning ordinance around his earlier claim, and he had not received the County's confirmation under the most recent version of its zoning that the truck stop Corey had been trying to build was a definite no-go. 

Let's start at the beginning. To us, it seems like the takings claim was ripe back in 1999:

In 1999, Corey asked the County if its zoning regulations permitted him to build a truck stop on his property. The County said no and informed Corey that truck stops were not a “specifically designated” use for C-2 properties under the then-existing zoning ordinance.

Slip op. at 3.

But instead of suing (something few property owners want to do -- they want to use their properties, not pursue takings claims), the owner made efforts to try and make it work. He tried to amend the zoning (something he was not required to do). No luck. He asked to build a "travel plaza" and not a truck stop. County shook its head. He sued, unsuccessfully, to compel the County to issue a zoning permit. He changed his plans and instead of a truck stop, tried to build a C-store "which sold fuel to automobiles and heavy trucks." Slip op. at 4. Got nowhere.

By now, we're in 2006. The County re-emphasized its earlier "no truck stops" by amending the zoning ordinance to expressly say "no truck stops." Yes, you can have a gas station on C-2 zoned land (like Corey's adjacent properties), but you can't have any combination of uses that add up to "truck stop."

Flash forward to 2018. Corey sought to construct a "travel plaza." A C-store, gas pumps, truck scales, and truck parking. This time, things looked hopeful. The County planning director seemed amenable to an amendment to the C-2 zoning ordinance to allow travel plazas like this. The Planning Commission recommended adoption of this amendment to the County board of commissioners who have the final word on zoning amendments. "But the board unanimously rejected the amendment." Slip op. at 5.

Undaunted, Corey applied for a construction permit. Unsurprisingly, the County said no. This is a dang truck stop, dude!

In 2019, roughly a year after the amendment was rejected, Corey applied for a construction permit to build the QuikTrip travel plaza. The County rejected Corey’s permit application be-cause it sought to build a truck stop prohibited by the 2006 ordi-nance. Corey appealed the denial to the County’s internal appeals board, which—after holding a hearing—affirmed the County’s decision.

Id.

He appealed the decision up through the state court system, ultimately winning a claim that the ordinance's definition of "truck stop" was unconstitutionally vague. Slip op. at 6.

What's that old saying? If at first you don't succeed, try try again? This time it was the County's turn.

Remember that infamous advice back in the day where government were advised that if they got whacked with a regulatory takings judgment that all they needed to do was amend the regulation and require the owner to start over? The County's approach here seems like a ripeness version of that advice. In 2021, it amended the C-2 zoning to clarify the definition of truck stop, and re-emphasize that such uses are prohibited.

"Fool me three times, shame on me" thought Corey: he sued for a taking. But the district court entered judgment on the pleadings for the County.

The Eleventh Circuit affirmed the dismissal. Despite the earlier denials of permit applications, and the current version of the ordinance expressly prohibiting truck stops, Corey's claim that being prohibited from building a truck stop is a taking isn't ripe. Why? Because "Corey did not apply for a permit or variance under the 2021 ordinance." Slip op. at 10. You never know: the County this time might say yes (despite decades of saying no in nearly every way possible).

Wouldn't this be futile in light of this history, as Corey argued? No, those earlier denials were under the then-applicable C-2 zoning ordinances. But there's been no application -- and thus no denial -- under the current zoning ordinance. Hang on. Isn't the 2021 zoning ordinance more restrictive and more clear that truck stops are banned? Yes, but the County is entitled to have a chance to apply the 2021 ordinance. To say what, exactly? That it would allow a truck stop when it clarified the ordinance to expressly prohibit truck stops?

And what about the where's-there's-smoke vibe that this ordinance was amended to thwart Corey's use of his property, and not as some general prohibition on truck stops? No, the Eleventh Circuit held, this ordinance didn't target "precisely and only" Corey and his parcel. The truck stop ban applied to all C-2 properties in the County. We wonder how many of those other properties were suitable for truck stops. Hmmm.

All Corey needs to do to ripen a takings claim is to apply for a C-2 zoning permit, and if that doesn't work, to seek a "variance" (even though you land users know that what courts identify as a "variance" isn't even in the ballpark about what variances are about -- what courts mean is some kind of decision by the County to not apply the C-2 zoning and allow a truck stop despite the ordinance's express prohibition). 

This case is a good illustration of the tail wagging the dog nature of final decision ripeness. And dntil the Supreme Court wakes up and pays attention to what is going on, nothing is going to change.

Corey v. Rockdale County, No. 23-13097 (11th Cir. May 7, 2025) (unpub.)

Happy 97th Birthday, Nectow v. City of Cambridge!

It was on this day in 1928 when the U.S. Supreme Court issued its second most famous decision about zoning, Nectow v. City of Cambridge., 277 U.S. 183 (1928). 

We say "second" because everyone knows that the first is the Court's decision issued just two years earlier which generally upheld comprehensive use, height, and density regulations as a valid exercise of the government's police power to regulate property uses to further the public health, safety, welfare, or morals. See Village of Euclid v. Ambler Realty Co., 272 U S. 365 (1926). 

Partly because of the hype surrounding Euclid and the broad governmental embrace of exclusionary land use policies that Euclid unleashed, we think that Nectow has not received the attention it is due. After all, it should be seen as the companion case to Euclid: it was authored by same Justice who wrote Euclid (Justice Sutherland), and there's a straight line between all three parts of the Court's 1920's land use trilogy (Mahon, Euclid, and Nectow), two of which are strong reaffirmations of property rights. 

But today, Nectow is often dismissed as a byproduct of an earlier time, Lochnering of the substantive due process rational basis test, or even just too archaic to pay attention to.

But unlike Euclid, which was a facial challenge to zoning generally, Nectow was an as-applied challenge, asserting that placing some of Nectow's land in a residential zone -- and thereby causing a contract for sale of the land for non-residential uses to be cancelled -- was arbitrary and capricious. A master appointed to find facts determined the residential designation was out of sync with the mixed uses in the surrounding area. But the Supreme Judicial Court of Massachusetts took Euclid and Justice Sutherland at their word and concluded "who are we, mere judges, to question what Cambridge's zoning officials say is in the public interest?" (We're paraphrasing of course, but that was the vibe.)

But Justice Sutherland was all "hang on, pay attention to what we said in Euclid; that wasn't us telling courts to be poodles." (Paraphrasing, again):

Nevertheless, if that were all, we should not be warranted in substituting our judgment for that of the zoning authorities primarily charged with the duty and responsibility of determining the question. Zahn v. Board of Public Works, 274 U. S. 325, 328, 47 S. Ct. 594, 71 L. Ed. 1074, and cases cited. But that is not all. The governmental power to interfere by zoning regulations with the general rights of the land owner by restricting the character of his use, is not unlimited, and, other questions aside, such restriction cannot be imposed if it does not bear a substantial relation to the public health, safety, morals, or general welfare. Euclid v. Ambler Co., supra, p. 395 (47 S. Ct. 114). Here, the express finding of the master, already quoted, confirmed by the court below, is that the health, safety, convenience, and general welfare of the inhabitants of the part of the city affected will not be promoted by the disposition made by the ordinance of the locus in question. This finding of the master, after a hearing and an inspection of the entire area affected, supported, as we think it is, by other findings of fact, is determinative of the case. That the invasion of the property of plaintiff in error was serious and highly injurious is clearly established; and, since a necessary basis for the support of that invasion is wanting, the action of the zoning authorities comes within the ban of the Fourteenth Amendment and cannot be sustained.

 

So yes, zoning as a concept is within the police power, but we must keep at the forefront the core principle that property rights are to be respected. Facts, and not some vague incantation of the rational basis test should serve as the standard 

As James Metzenbaum, the lawyer who represented the Village of Euclid later wrote:

It is essential that there be kept in mind the ever-true doctrine that the owner of property does have some inalienable rights. A corollary of this doctrine is that it is the duty of the lawyer to fight for the preservation of such rights and not to permit overly zealous zoning experts who draft ordinances nor obliging Councils who pass them, to promulgate legislation which is unreasonable or which unlawfully tends toward the divestment of the property owners' constitutional rights.

See James Metzenbaum, The History of Zoning - A Thumbnail Sketch, 9 W. Res. L. Rev. 36, 42 (1957).

So here's how we see it: go ahead and zone, government (Euclid). But do it carefully: it's not carte blanche to do anything you want, and its gotta make actual sense (Nectow). And even if it does makes sense but nonetheless deprives the property owner of essential rights, you have to pay for the privilege (Mahon). 

Oh no, you say, if we revive Nectow's recognition of restraints on the police power what shall become of zoning? It doesn't mean the end, only a reasonable limits, bounded by property rights. You know what term is in the Constitution? "Private property." And what term isn't? "Police power." Sure, the term, like eminent domain, may be an inherent power and didn't need to be mentioned in the text, only limited, we suppose. But aren't we more concerned with protecting an individual's freedom to choose how to use her property, unless there's some articulable harm that can be shown, and not presumed?

After all, the whole point of government isn't primarily to ensure the public health, safety, welfare or morals, but to secure individual rights:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed

And rest easy: zoning isn't the be-all-end-all of municipal land use regulation. Especially when properly constrained by the Constitution. Professor Siegan's seminal book explains why. 

So Happy Birthday, Nectow. Ninety-seven years young and looking better each day!

New Book: "Natural Property Rights" (Eric Claeys)

The long-awaited book from lawprof Eric Claeys, "Natural Property Rights" (Cambridge Press 2025) has dropped.

More, after we've had a chance to read it.

Now mind you, in the hardcover edition the thing ain't exactly cheap (£100 GBP from Cambridge, or $130 from Amazon). But frankly, for an academic book the price isn't bad.

And if the table of contents and the sampler sections posted here, it looks like it will be well worth it.

Here's a summary of what you'll get:

Natural Property Rights presents a novel theory of property based on individual, pre-political rights. The book argues that a just system of property protects people's rights to use resources and also orders those rights consistent with natural law and the public welfare. Drawing on influential property theorists such as Grotius, Locke, Blackstone, and early American statesmen and judges, as well as recent work in in normative and analytical philosophy, the book shows how natural rights guide political and legal reasoning about property law. It examines how natural rights justify the most familiar institutions in property, including public property, ownership, the system of estates and future interests, leases, servitudes, mortgages, police regulation, and eminent domain. Thought-provoking and comprehensive, the book challenges leading contemporary justifications for property and shows how property both secures individual freedom and serves the common good.

• Justifies and rehabilitates a theory of property associated with labor, natural law, natural rights, Grotius, Locke, Blackstone, Madison, and Kent
• Outlines justifications for property that have influenced English and American society for centuries
• Familiarizes legal scholars, lawyers, and law students with how moral rights guide legal reasoning

Stay tuned. If the hardcover is too spendy, we understand a softcover is in the works.

CA2: The Harm In Home Equity Theft Takings Is Government's Retention Of Surplus Equity

A brief, but important, decision from the U.S. Court of Appeals for the Second Circuit.

In Sikorsky v. City of Newbergh, No. 23-1171 (May 2, 2025), the court held that the plaintiff adequately pleaded a regulatory takings claim which was based on Tyler v. Hennepin County, where the U.S. Supreme Court held that a government violates the Fifth Amendment if it seizes and liquidates property in order to satisfy the owner's tax debt, but "keeps the change" and retains any proceeds in excess of the tax debt.

Here, Sikorsky purchased a home but failed to pay $92,786 in taxes, and the city eventually foreclosed. The city sold the home for $250,000 more than Sikorsky owed in taxes, "but refuses to give him the surplus." Slip op. at 3. He sued, and the district court dismissed:

Two months after Tyler was decided—and seemingly without reference to it—the District Court granted the defendants’ motion to dismiss. Sikorsky, pro se, timely appealed from the judgment. While Sikorsky’s appeal was pending, and in response to Tyler, New York enacted laws that provide procedures for certain claimants to recoup surplus equity from foreclosure sales. N.Y. Real Prop. Tax Law § 1197(1); 2024 N.Y. Sess. Laws ch. 55, pt. BB § 19(1)(a), (c).

Slip op. at 5-6.

The court concluded that the post-Tyler statute did not provide Sikorsky a procedure by which to claim the surplus (and thus avoid the taking) because it only applied to cases where the home was sold after the date the Supreme Court issued the Tyler opinion (May 25, 2024). Here, the home was sold before that date.

The court also held that the complaint stated a takings claim and rejected the city's res judicata argument that two earlier suits precluded Sikorsky from asserting a takings claim now. This claim, the court held, was not ripe at the time of the earlier cases because the city had not yet wrongfully kept the surplus. Thus, his takings claim only accrued and ripened, when the city withheld the surplus:

The “general rule” is “that claims are ripe once a cause of action accrues.” Somoza v. N.Y. City Dep’t of Educ., 538 F.3d 106, 115 (2d Cir. 2008). A “claim accrues when the plaintiff knows or has reason to know of the harm.” Eagleston v. Guido, 41 F.3d 865, 871 (2d Cir. 1994) (quotation marks omitted).

This Court has yet to consider when a claim for surplus equity under Tyler accrues. We hold that the “harm” at issue is the municipality’s retention of surplus equity. As the Tyler court explained, “‘[t]o withhold the surplus from the owner would be to violate the Fifth Amendment.’” Tyler, 598 U.S. at 643 (quoting United States v. Lawton, 110 U.S. 146, 150 (1884))). In this case, that harm did not occur until the City received (and began to “retain”) the money from the sale of the property, which Sikorsky alleges occurred in June 2021. Sikorsky commenced his first state court action against the City in 2017 and his second in March 2021. Thus, both of Sikorsky’s state court actions began before his claim was ripe. Claim preclusion does not bar a claim that could not have been brought in the earlier action, so it does not bar Sikorsky’s claim here.

Slip op. at 11-12 (footnote omitted).

Dismissal vacated, case returned to the district court for adjudication on the merits.

Check it out.

Sikorsky v. City of Newburgh, No. 23-1171 (2d Cir. May 2, 2025)

ALI-CLE Webinar: Tax Consequences Of Eminent Domain (May 13, 2025)

Want to learn of some of the options available to property owners whose land is taken by eminent domain (or, even more sadly, destroyed by a disaster)?

Then you should sign up for next week's ALI-CLE webinar, "1033 Exchanges: Advanced Strategies for Optimal Tax Deferral."

Here's a description of the program:

When property is lost due to an involuntary conversion such as a taking by eminent domain, destruction by natural disaster, or theft, many clients assume they must immediately face a significant tax burden from compensation received. However, IRS §1033 provides a powerful alternative—tax-deferral through strategic reinvestment. Understanding the nuances of 1033 exchanges allows attorneys to guide clients through the process, ensuring they maximize tax benefits and rebuild wealth effectively.

Join us for this comprehensive CLE course designed to equip legal professionals with the knowledge and tools needed to navigate 1033 transactions with confidence.

With our colleagues Alan Lichtenstein and Matthew Bryant. 

Register now. 

It's The Vibe: Taking Of Condemnee's Property To Replace Property Taken From Condemnee Is A Public Use

We had to read the facts of the Tennessee Court of Appeals' opinion in City of Pigeon Forge v. RLR Investments, LLC, No. E2023-01802-COA-R3-DV (Apr. 20, 2025) a couple of times over, just to make sure we were understanding what was going on. But the effort was worth it, just because of the unusual arguments presented. Check it out.

RLR owned two adjacent properties, the first used for a hotel, the second for a duplex, parking area, and open green space. So far so good. The city took portions of each for a greenway. It also took temporary construction easements on each parcel. Check. The city sought immediate possession. Got it. The owner objected to public use and the quick take, but the trial court agreed with the city, and entered an order of possession. Understood.

Here's where it gets squirrelly. RLR, the property owner, sought to enforce the order of possession:

RLR filed a motion to enforce the terms of the Order of Possession. RLR asserted that in accordance with the Order of Possession, the City had demolished RLR’s six parking spaces on the Hotel Property to make way for the greenway. However, the City had not commenced construction of replacement parking spaces on the Duplex Property, which RLR claimed was required by the temporary construction easement granted over that tract in the Order of Possession. RLR alleged that the City was disregarding this portion of the order.

Slip op. at 4.

The city, naturally, didn't see it that way. It said that in response to RLR's earlier claims that the takings and construction of replacement parking were damaging the duplex parcel, it was standing down from the part of the project seeking temporary construction easements and replacement parking. The "C" part of the TCEs were apparently done, so the city said we don't need the TCEs any longer.

The trial court agreed with the city, concluding the order of possession did not order the city to build the replacement parking (which is not a public use or purpose), and that the public purpose of the project was to build a greenway, not to construct replacement parking. The court ordered the TCEs terminated.

Next, RLR sought summary judgment that the city had abandoned the TCE portion of the takings, and that the project lacked a public use or purpose because it was, at least in part, to take property for replacement parking, which the court -- as just noted -- concluded was not a public use. You follow so far? That's right, the owner seemed to be asserting that either the city abandoned, or alternatively that that the city's no-longer-desired taking of TCE's on its property was not a public use because it was for a private benefit: to replace the parking lost on the owner's other parcel:

RLR filed a reply, asserting that new facts had arisen since entry of the Order of Possession because during the July 2018 hearing, the City had admitted that the temporary construction easements were not for a public purpose because the replacement parking would have privately benefited RLR.

Slip op. at 5.

The court did not agree with RLR even though, in the court's words, "I don't think anybody's arguing that it [the taking for replacement parking] was proper," apparently because the city had stood down on the TCE's and the greenway project was already built. Thus, it would be "draconian" to do something. Slip op. at 5-6. (Why, we are not sure because the court never says so.)

Once more, RLR sought summary judgment, this time submitting new evidence, which it argued shed new light on the private benefit argument. This evidence:

supported the position that it was an improper use of eminent domain power to take private property to create parking spaces that would benefit other private property. RLR posited that Mr. Goodwin’s testimony indicated that the City had included replacement parking within its grant submission materials to obtain funds for the greenway project and then had not constructed the replacement parking.

Slip op. at 6.

Once again, the court's reaction was no. The taking for a greenway was a public use and purpose, and even though the city had not abandoned the TCE taking, the order of possession did not compel it to take the TCEs. This is one of those sections of the opinion that we had to read multiple times to make sure we were getting it accurately.

After the compensation phase and adjudication of the just compensation owed for the greenway takings, RLR appealed. Is posed two issues: (1) was the city's plan to take RLR's property to benefit RLR a public use or purpose; and (2) should the city be on the hook to pay statutory fees and costs because the city abandoned the TCE takings?

Skip forward to page 16 of the slip opinion for the appellate court's analysis of the public use issue. The city argued that if the order of possession required it to take RLR's other property to build replacement parking, any private benefit to RLR was "incidental to the overarching public purpose of the greenway project." Slip op. at 16.

In the end, the court agreed with the city. The greenway overall vibe of the project is what matters, not whether the city was taking RLR's property for RLR's private benefit. First, the trial court's order of possession did not, contrary to RLR's argument, require the city to build replacement parking. Accordingly, the city's only stated public use or purpose supporting the TCEs was the greenway. 

The court seemed to agree that taking RLR's property for replacement parking would have been for a private and not public use. But in the end, the court concluded that the actual purpose of the taking of the TCEs was not for replacement parking. It might have been the city's intent to do so, but after RLR objected that taking its property for parking would damage the duplex parcel, the city reconsidered and modified its plans. See slip op. at 20.

The court also rejected RLR's abandonment argument for similar reasons. The city was neither attempting to, or otherwise obligated to, take the duplex property TCEs for replacement parking. In the court's view, you can't abandon something you were never doing. 

City of Pigeon Forge v. RLR Investments, LLC, No. E2023-01802-COA-R3-DV (Tenn. App. 30, 2025)

Friends Without Special Benefits: Direct Access To Interstate Is General Benefit

Partial taking for highway project. You know what that means: severance damages. And you also know that often means a "general or special" benefits fight over how the remainder parcel may have been improved by the project, and whether these benefits can reduce the severance owed.

Before-the-project condition: undeveloped land on a frontage road with no nearby connection to the freeway. After-the-project condition: remainder property has direct freeway access, an increase in traffic to the site and easier ability to enter/exit, and curb and sidewalk improvements. The trial court concluded these specially benefited the remainder property, and could be offset against compensation.

In Utah Dep't of Transportation v. Boggess-Draper Co., LLC, No. 20220875 (May 1, 2025), the Utah Court of Appeals disagreed. In accordance with a Utah Supreme Court decision, benefits that may be used to offset compensation must be those which "affect the land itself," and increase "the actual or usable value of the land," and not just the market or saleable value." And general benefits are those which are "enjoyed by the public." Determining which category a benefit to the remainder falls in is discretionary with the trial court.

Here's how the court of appeals treated each benefit:

• Direct interstate access and increased traffic: general benefit because "'merely increased facilities for travel and transportation by the public in general' do not qualify as a special benefit because any increase in value from such improvements 'has no relation to the use of the land as land.'"
• Increase in the number of lanes: general benefit, for the same reason.
• Curb, gutter, and sidewalk improvements: special benefit, because "[t]he improvements 'affect[ed] the land itself directly and proximately' by making 'a
  large share or all of the property abutting thereon more accessible and convenient for use.'”

Slip op. at 18-19. The court concluded that this was not harmless error:

Here, we have no trouble concluding that Boggess was harmed by the district court’s error. By classifying all the benefits as special as a matter of law, the court allowed evidence that was legally incorrect and crippling to Boggess’s ability to recover severance damages. Expert testified that the project had “significantly” benefitted the Property because the price per square foot of the Property in the “before condition” ($8.75) was less than the price per square foot in the “after condition” ($12.50). He attributed the nearly four dollar per square foot increase to “the advantage of the interchange, and the traffic exposure,” and concluded that the difference between these figures demonstrated that the Property had received “a special benefit of 2.2 million dollars” from the project. By defining the interstate access increasing traffic as a special benefit, Expert improperly inflated the Property’s after-condition valuation, which created a sizeable $2.2 million offset. Without the inclusion of the general benefits, the offset would have been significantly lower, thereby creating a reasonable likelihood that Boggess would have been awarded severance damages. This error is accordingly reversible.

Slip op. at 21-22.

Utah Dep't of Transportation v. Boggess-Draper Co., LLC, No. 20220875-CA (Utah App. May 1, 2025)

SCOTUS Hat Trick? Houseboat Guy Returns For Shot At Lucas Ripeness

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

This is Fane Lozman. You know his name. Yes, the guy who has taken on the City of Riviera Beach, Florida twice at the Supreme Court, and is now coming back for a third shot on goal. Houseboat guy. Public hearing gadfly guy. And now, maybe the ripeness guy.

Lozman has filed a cert petition asking the Court to review the Eleventh Circuit's opinion which dismissed his regulatory takings claim as unripe.

Here's the Questions Presented:

Fane Lozman has a contentious relationship with the City of Riviera Beach, Florida. The City’s mistreatment of Mr. Lozman has twice required this Court’s intervention. See Lozman v. City of Riviera Beach, 568 U.S. 115 (2013); Lozman v. City of Riviera Beach, 585 U.S. 87 (2018).

In this third chapter, Mr. Lozman was forced to sue the City because its land-use restrictions have de prived his waterfront property of all economically ben eficial use, causing a taking under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The controlling City ordinance is clear: He can use this property for “[p]rivate residential fishing or viewing plat- forms” and small “docks for non-motorized boats,” and nothing else. Yet the Eleventh Circuit held Mr. Lozman’s Lucas claim unripe. In the court’s view, because these scant private uses are permissible, Mr. Lozman must apply to the City for a “final decision” on how he can use his property.

The questions presented are:

1. Whether a claim that a local ordinance effected a regulatory taking upon enactment remains unripe until the landowner asks the local government for permission to develop his property in ways the ordinance plainly prohibits.

2. Whether a regulation that forbids any economically beneficial use causes a taking under Lucas, regardless of the property’s residual value

The petition has garnered a ton of amicus support.

The cert-stage briefing isn't quite done yet, with (presumably) Lozman's reply on the way. Then we see where this one goes.

Stay tuned.

More On That White-Tailed Deer Takings Case: Law Of Capture Subject To Public Trust

Here's more on an issue we recently covered involving Texas's "depopulation" of captive white-tailed deer in order to curb Chronic Wasting Disease. In the earlier opinion, the court held that the owner of a deer-breeding facility did not have a property interest in the deer, and thus could not assert a due process or takings claim.

The court in Young v. Texas Parks & Wildlife Dep't, No. 15-24-00052-CV (Apr. 24, 2025) reached the same conclusion. We're posting the latest opinion because it elaborates on the "ferae naturae" issue, and every law student and lawyer's old (very old) friend, the rule of capture. 

The court rejected the owner's arguments:

Comparing the facts in Tyler to those here, Young argues that the common law doctrines of ferae naturae and the rule of capture existed long before the Texas Legislature stepped in and began regulating white-tailed deer. In doing so, the Legislature “legislated away” his property rights just like Minnesota’s Legislature did when it gave the State the statutory right to retain the proceeds from the sale of real property to satisfy a delinquent tax bill. We disagree for several reasons.

....

Unlike the Minnesota law, the Texas deer breeding statutes do not regulate property in which someone has an existing vested interest (real property). They regulate a wild animal that, indulging Young’s argument, would not become a deer breeder’s property until after exercising dominion over it. That extra step to supposedly achieving a protected property interest did not exist in Tyler.

Second, we cannot accept Young’s implied invitation to ignore the historical context from which Texas’s deer breeding laws derive. Early America “welcomed the rule of capture with open arms,” but “vigorous capture rules fostered by early America’s pioneer spirit resulted in the extinction of many species in the New World and the depletion of populations of many more.” State legislatures responded by enacting legislation aimed at protecting wildlife populations, which courts upheld using a “uniquely American justification for regulation”: the public trust doctrine. Under the public trust doctrine, the State’s natural resources are held in trust for the benefit of the people. As the Third Court of Appeals explained in Bailey v. Smith, Texas “essentially codified” the doctrine in 1907 when it enacted the predecessor to Section 1.011(a) of the Parks and Wildlife Code.

....

The State’s authority to regulate wildlife as part of its police power to protect this natural resource is beyond question.

Slip op. at 7-9 (footnotes omitted).

Check it out.

Young v. Texas Parks & Wildlife Dep't, No. 15-24-00052-CV (Tex. Ct. App. Apr. 24, 2025)