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Comity Of Errors: CA11 Chooses Nondisruption Of State's Administrative Process Over Constitutional Right To Compensation

In Turner v. Jordan, No. 22-13159 (Sep. 17, 2024), the U.S. Court of Appeals for the Eleventh Circuit held that even though the federal courts have jurisdiction over Turner's takings claim, the court nonetheless has the discretion to choose to wash its hands of the case in order to protect a state's administrative procedures.

This is one of those home equity takings cases, with the twist here being that Turner claims that because Florida officials failed to account for his homestead exemption, his property sold for half of what it should have at a property tax foreclosure sale. He alleged that with the exemption, the sale would have netted him some equity to which he was entitled. The district court dismissed for comity reasons, and the Eleventh Circuit affirmed.

Of course, the opinion pays lip service to the more-often-in-the-breach-than-in-the-observance principle that "federal courts have a 'virtually unflagging obligation ... to exercise the jurisdiction given them.'" Slip op. at 18 (quoting Ankenbrandt v. Richards, 504 U.S. 689, 705 (1992)). That duty may be "unflagging," but not really: federal courts should take a "hands-off" approach to cases that may implicate a state's tax administration. We wouldn't want to disrupt state tax administration now, would we?

Yes, Turner raised a federal civil rights claim, which is "entitled to be adjudicated in the federal courts." Slip op. at 18. And you don't need to exhaust section 1983 claims, or takings claims, as we recall. But that rule mostly doesn't apply when state remedies are "plain, adequate, and complete." Slip op. at 19. Although the court concluded this case presents a "close call," it nonetheless held that Florida's administrative tax scheme qualifies. See pages 19-20 of the opinion for the details of the three factors that go into this calculus. The first two factors were a wash: one cutting in Turner's favor, the other in favor of comity.

The first factor is whether the issue involves "commercial matters" or "fundamental rights." The court correctly (in our view) concludes that this is a case involving fundamental civil rights. Slip op. at 20. The second factor was "trickier" according to the court, but cut in favor of comity: the court concluded that Turner was objecting to his own tax situation, because he is objecting to the way his taxes were collected. Slip op. at 22.

The factor that cut strongly in favor of comity according to the court, was the third: are Florida courts better positioned than the federal courts to correct the violation?

For Turner to prevail on his due process claims it would re-quire a conclusion that the County failed to provide sufficient notice of the sale process under Florida Statutes sections 197.502(4)(a), 197.522, and potentially 197.512(1). For Turner to prevail on his claims under the Takings Clause, a federal court must determine, at least, that the County impermissibly applied the opening bid requirement under Florida Statutes § 197.502(6).

Turner’s requested remedies, and their implicated interpretations of those state-law provisions, “may be far from what the [Florida] Legislature would have willed.” Id. at 429. And state courts “have greater leeway to avoid constitutional holdings by adopting ‘narrowing constructions that might obviate the constitutional problem and intelligently mediate federal constitutional concerns and state interests.’” Id. at 428 n.7 (quoting Moore v. Sims, 442 U.S. 415, 429–30 (1979)). That is what would happen if the Florida courts side with the County’s interpretation of the state statutes.

Slip op. at 23-24.

And then there's the Tax Injunction Act, which "precludes relief that would diminish state revenues[.]" Slip op. at 24. And here, "Turner's interpretation of [the Florida tax statute] could diminish state revenues. After all, his property didn’t sell until it was listed for a second time with a lower opening bid amount." Id.

In the end, the court concluded that granting Turner the relief he seeks "would risk disrupting Florida's tax administration." Slip op. at 25.

Of course, Turner challenges the County’s application of Florida statutes as to his property, rather than the facial validity of the statutes. Still, “a judicial determination of official liability for the acts complained of, even though necessarily based upon a finding of bad faith, would have an undeniable chilling effect upon the actions of all County officers governed by the same practicalities . . . .” Fair Assessment, 454 U.S. at 115. If the County’s administration of tax deed sales in situations like Turner’s “is indeed unconstitutional, surely the [Florida] courts are better positioned to determine—unless and until the [Florida] Legislature weighs in—how to comply with the mandate of” procedural due process, the First Amendment, and the Takings Clause.

Slip op. at 26.

Hold on. "Surely the Florida courts are better positioned" how to comply with the U.S. Constitution's requirements? Really?

One Judge -- Judge Newsom -- wasn't having it. He dissented, respectfully, "but I'm not going to make a big stink about it." Dissent at 1. He agreed that this was a close call, but would have come out the other way, and "would allow Turner's suit to proceed." Id.

As an initial matter, I’m suspicious of court-concocted abstention rules that, in substance if not form,1 deprive federal courts of jurisdiction that the Constitution expressly authorizes and that Congress has expressly vested. I agree with Chief Justice Marshall, who explained more than two centuries ago that federal courts “have no more right to decline to exercise the jurisdiction which is given, than to usurp that which is not given”—both, he said, are “treason to the [C]onstitution.” Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 404 (1821). At the very least, I agree with the Supreme Court’s more recent (if slightly less uncompromising) admonition that “‘[a]bstention rarely should be invoked, because federal courts have a virtually unflagging obligation . . . to exercise the jurisdiction given them.” Maj. Op. at 18 (quoting Ankenbrandt v. Richards, 504 U.S. 689, 705 (1992)). In any event, all here seem to agree that abstention—pursuant to the “comity doctrine” or other-wise—“is the exception, not the rule.” Colorado River Conservation Dist. v. United States, 424 U.S. 800, 813 (1976).

Dissent at 1-2. Check out the entirety of his dissent for Judge Newsom's analysis. Dissent at 7 ("Bottom line: It’s reasonably clear to me that the local authorities misapplied Florida law when they sold Turner’s property for pennies on the dollar. Deciding Turner’s case—which alleges that they did so for unconstitutional reasons and in an unconstitutional manner—wouldn’t call into question Florida’s property-tax scheme or his individual tax liability, nor would it require any real guesswork about the meaning or application of state law.").

We think you know which way we come out on this one, no?

Turner v. Jordan, No. 2022-13159 (11th Cir. Sep. 17, 2024)

CA9: Unannounced Inspections As Condition Of Falconry License Are Subject To Nollan/Dolan Challenge

On the surface, the U.S. Court of Appeals for the Ninth Circuit's opinion in Stavrianoudakis v. U.S. Fish & Wildlife Svc., No. 22-16788 (July 25, 2024) is about Article III standing (a highly technical gateway issue that is very federal courts wonky).

But taking a deeper look offers an insight into ways other than the usual Fifth Amendment arguments for protecting property rights. [Before we go on, a disclosure: this is one of our cases, argued and won by PLF colleague Daniel Woislaw].

This is a case involving the sport of falconry. Can't say that we knew too much about that -- until maybe the occasional movie -- until this case. First (and this may not come as a surprise to you who have been observing what things the government finds worthy of regulations and licensing), did you know that every state government except Hawaii has adopted regulations governing falconry? Nor did we, until now. Second, there used to be "parallel federal and state permitting systems," but the feds backed out in light of every state doing it; now, once the feds certify a state's regulations satisfy federal standards, the feds are out. 

California's regulations are one of those, and require that falconers renew licenses annually:

Consistent with federal requirements, California authorizes unannounced inspections: CDFW “may conduct unannounced visits to inspect facilities, equipment, or raptors possessed by the licensee, and may enter the facilities of any licensee when the licensee is present during a reasonable time of the day and on any day of the week” and “may also inspect, audit, or copy any permit, license, book, or other record required to be kept by the licensee under these regulations at any time.” Cal. Code Regs. tit. 14, § 670(j)(3)(A).

Slip op. at 8. To get a California license, a falconer must certify that he or she agrees that the premises, equipment, or the falcons themselves "are subject to unannounced inspection." If you don't agree, you are not getting a license or a renewal.

Several falconers and the American Falconry Conservancy sued the feds, and state officials in federal court, challenging past unannounced inspections under the First, Fourth, and Fourteenth Amendments, and the Administrative Procedures Act. The district court dismissed for lack of standing, but granted leave to amend the Fourth Amendment claim.

Here's the breakdown of the operative second amended complaint's claims against the unannounced-and-warrantless-inspections scheme:

• A facial 4A claim: conditioning a license on the licensee's agreement to forego his rights is an unconstitutional condition.
• The same unconstitutional conditions claim, but as-applied to these plaintiffs.
• The scheme allowing warrantless searches facially violates 4A.
• Same claim, as-applied.
• A co-habitant of one of the falconers asserted the scheme violates her 4A rights.
• APA claim.

The district court didn't find the amendments did much of anything and dismissed all 4A claims without leave to amend. The threat of future inspections was too speculative, and the Conservancy lacked associational standing.

A 2-1 panel of the Ninth Circuit reversed, in part. The court held that the falconers have standing to challenge the California officials, but not the Fish & Wildlife Service. We're not going to explore in depth the court's analysis (you can read that yourself, and we recommend you do so - start on page 12 of the slip opinion).

The most interesting stuff in the opinion (in our opinion) is the court's description of the claims. Yes, the government can impose conditions on the conferral of some benefit, but those conditions cannot include the relinquishment of a constitutional right. Slip op. at 13. We are used to seeing this in the land-use exactions context, where the right to compensation is the right a plaintiff is compelled to surrender. But here, the constitutional rights in the warrant requirement in the Fourth Amendment:

We have recognized that the unconstitutional-conditions “doctrine is especially important in the Fourth Amendment context” because, “[u]nder modern Fourth Amendment jurisprudence, whether a search has occurred depends on whether a reasonable expectation of privacy has been violated.” United States v. Scott, 450 F.3d 863, 867 (9th Cir. 2006) (citing Katz v. United States, 389 U.S. 347, 361 (1967) (Harlan, J., concurring)). “Pervasively imposing an intrusive search regime as the price of [a discretionary government benefit], just like imposing such a regime outright, can contribute to the downward ratchet of privacy expectations.” Id. Accordingly, the doctrine applies when the government attempts to “exact waivers of rights as a condition of benefits, even when those benefits are fully discretionary.” Id. at 866–67.

Id.

The injury for standing purposes occurs "when the government succeeds in pressuring the plaintiff into forfeiting a constitutional right in exchange for a benefit or the government withholds the benefit based on the plaintiff's refusal to surrender a constitutional right." Slip op. at 14 (citing Koontz). It's the dirty demand that is the problem, not "whether the government ultimately succeeds in pressuring someone into forfeiting a constitutional right[.]" Id. See also slip op. at 16 ("Therefore, the Falconers’ alleged injury in fact is the forced choice: retention of their Fourth Amendment rights or receipt of a falconry license, which is required to lawfully practice falconry.").

That being so, the plaintiffs have standing to bring such a claim against the California officials:

The question presented here is whether simply agreeing to submit to those inspections, in the absence of an actual inspection—see Part II.B—amounts to the relinquishment of Fourth Amendment rights. We conclude that it does. By successfully applying for a falconry license, the Falconers certify that they will forego a claim to Fourth Amendment protections. An inspection may not occur or, if it does, it may not violate the Fourth Amendment because it is reasonable. But the idea that the Falconers surrender nothing unless and until an unlawful inspection occurs—that California extracts a blanket waiver that is, in fact, entirely superfluous—defies logic. Rather, we take the regulation to mean what it says, and agreeing to unannounced, warrantless inspections without any consideration of the reasonableness of such inspections implicates Fourth Amendment rights.

Slip op. at 15.

The court did not view the claims the same way as against the USFWS, and concluded these claims are not ripe. The feds delegated falconry licensing to California, so the plaintiffs have not suffered an injury directly traceable to the feds. And the falconers have not sought, nor have they been granted, a federal license (indeed, they could not do either of these because as noted above, the feds no longer process falconry licenses, only the states).

The court affirmed the dismissal for lack of standing the as-applied warrantless search claims, primarily "because they have not alleged that they were subject to warrantless inspection under the challenged regulations." Slip op. at 22. Unlike the unconstitutional conditions claims, the court viewed the wrong here as not merely being subject to the requirement, but on the government actually making a warrantless search.

Slip op. at 23.

One judge concurred in part and dissented in part, agreeing that the lack-of-standing dismissal was ok because there's not been any actual warrantless searches, but arguing that the "Falconers have standing to challenge the state regulations under the unconstitutional-conditions doctrine[.]" Slip op. at 29 (S.R. Thomas, J., dissenting in part). The panel majority broke new ground in focusing on the demand as the constitutional wrong: "[i]ndeed no federal court has held that the act of giving consent itself constitutes injury absent an actual or imminently impending search. The majority’s assertion that Falconers are injured 'every time they renew their licenses,' is unsupported by precedent. Id. at 33 (S.R. Thomas, J., dissenting in part).

This case is a good reminder that there's more than one way to skin the property rights cat. Yes, we focus on the Just Compensation requirement. But we should not overlook other ways to protecting private property rights.

Stavrianoudakis v. United States Fish & Wildlife Service, No. 22-16788 (9th Cir. July 25, 2024)

New Jersey: Forcing Hospital To Provide Care At A Loss Isn't A Taking

We were all set to write up a scintillating and detailed analysis of the New Jersey Appellate Division's opinion in Englewood Hospital & Med. Center v. New Jersey, No. A-2767-21 (June 27, 2024), when we thought, ah, why not just ask you to read our New Jersey colleague Joe Grather's scintillating and detailed analysis.

Short story is right there in the title of this post. As Joe puts it:

In short, the hospitals argued that requiring them to provide charity care and Medicaid care at a loss was an unconstitutional taking of private property without just compensation.  The trial court analyzed the claims as an “as-applied” challenge.  Therefore, it dismissed some of the claims because of a failure to exhaust administrative remedies.  The “slightly different reason” was that the Appellate Court found the claims were a facial challenge to the constitutionality of the statute, and therefore it analyzed the takings claims under the familiar rubric of whether there was a “direct government appropriation or physical invasion of private property,” or an “uncompensated regulatory interference with a property owner’s interest in their property.” Slip op. at 14.

No physical taking, no Penn Central taking. We recommend you read his entire post "As We Approach Our Nation's Birthday, a New Jersey Appellate Court Rejects Hospitals' Takings Claims."

Joe ends it this way: "I bet the hospitals are preparing their petition for certification to the New Jersey Supreme Court now.  Happy 4th of July!"

That means to stay tuned for more.

Englewood Hospital & Med. Center v. New Jersey, No. A-2767-21 (N.J. App. Div. June 27, 2024)

Vermont: Environmental Court Doesn't Have Jurisdiction To Determine Property Rights, But We're Going To Find No Cedar Point Taking Anyway

DJK was adding a bedroom to an existing residence and needed a wastewater permit from Vermont's environmental agency. The agency has a "presumptive isolation zone" around potable water supplies and septic systems in which a property owner is presumed to be barred from doing anything sewage related. In this case, the isolation zone for DJK's property crossed over onto the property of their neighbors, the Crowleys.

The agency granted DJK the permit, which contained a provision that not only no sewage-related construction could take place in the isolation zone, but that "[n]o buildings" could be construction which "might interfere with the operation of a wastewater system or potable water supply[.]" Remember, the isolation zone was located partially on the Crowley property.

The Crowleys were not very appreciative, so appealed (to a Vermont trial court sitting as the Environmental court). They argued that the permit was invalid because it worked a taking of their land, imposed an unconstitutional condition, and they had not received notice and an opportunity to be heard before the permit was issued.

The Environmental court granted the agency summary judgment, concluding the court lacked jurisdiction over what it called the "property-related issues and rights." But the court continued and considered if the permit imposed an uncompensated taking ("The court did consider if 'the Rules, as applied to [neighbors] by way of the Permit, amount[ed] to a taking due to the State’s placement of potential development limitations on their propert[y].'"). We're not all that clear on the distinction being drawn and how a court without jurisdiction can make a ruling on the substance of the claim, but there it is. The court concluded the permit did not impose a physical invasion taking, and the Crowleys got all the process they were due.

In In re DJK, LLC, No. 22-AP-269 (June 14, 2024), the Vermont Supreme Court affirmed. The court rejected the Crowleys' assertion that the case "involves the legality of permit conditions," which would mean that the Environmental court had jurisdiction under the Vermont statute which grants jurisdiction over such claims. Slip op. at 10.

Not so, held the court, "[t]he fact that the Environmental Division [of the trial court] has authority to consider permit appeals does not authorize it to adjudicate private property disputes, such as the existence of easements. The civil division, not the Environmental Division, has jurisdiction over such matters." Slip op. at 11. This is a "private property dispute," slip op. at 12, and thus no jurisdiction. Slip op. at 14 ("Neighbors offer no persuasive authority in support of their assertion that the Environmental Division had jurisdiction to determine if the permit created an easement in their property and we reject their first claim of error.").

Well, okay then. End of this story, no? If the Environmental division doesn't have jurisdiction but the civil division does, the Crowleys can go file their constitutional claims there, right? You might think a "no jurisdiction" conclusion would mean that any rulings by the Environmental division would be ultra vires, yes? Or maybe not:

¶ 35. As referenced above, the Environmental Division did consider if the permit condition effected a taking under the analysis in Cedar Point Nursery, that is, whether the regulation authorized a physical invasion of their property. This was consistent with its authority to consider “property-related issues and rights . . . within the scope of the regulations governing the permit application.”

Slip op. at 14-15.

Wait, what? To get to this conclusion, the Supreme Court had to make a very nuanced distinction: the Environmental court didn't have jurisdiction to consider the constitutionality of the agency's actions, but nonetheless could reach the conclusion that the permit did not impose a physical invasion taking, and this is consistent with its jurisdiction to consider property issues "within the scope of the regulations governing the permit application." See slip op. at 15 ("¶ 37. Neighbors fail to show that the court erred in finding the absence of any physical invasion here.").

There might have been an easement created by the isolation zone (and that is a matter beyond the jurisdiction of the Environmental court), but the court concluded that there hasn't yet been an "actual physical invasion" of the Crowley's property. Slip op. at 16. 

If you can figure this one out in a way that makes sense, please let us know.

In re DJK, LLC, No. 22-AP-269 (Vt. June 14, 2024)

California SCT To Review Major Challenge To Coastal Commission's Claimed Power To Overrule Local Govt's Housing Approvals

Disclosure: this one is one of ours, so we're not going to do a deep dive or do much commentary (must resist!).

Yesterday, the California Supreme Court granted a Los Osos property owner's petition, and agreed to review an (unpublished) Court of Appeal opinion which held that the California Coastal Commission has the authority to appeal (to itself!) the County of San Luis Obispo's decision to grant Shear a Coastal Development Permit to build a handful of homes in the coastal zone.

The County has adopted a Local Coastal Program ordinance regulating development in the coastal zone in the County. Under the California Coastal Act, a municipal government adopting a LCP delegates to the municipality to authority to make these type of land-use permitting decisions, with a very limited window for the Commission to inject itself. The point of the Coastal Act is to maintain a high degree of local control if a municipality has taken the effort to adopt an LCP to reflect its understanding of its obligation to protect public coastal resources when it is making land-use decisions.

In 2003, Shear began the process of building homes on its eight lots zoned by the County for residential development. In 2004, the County approved Shear building eight homes in two stages. In 2017, after Shear completed the first four homes, it sought the County’s approval to complete the balance. After consideration of Shear’s plans under the LCP, the County granted a Coastal Development Permit.

That should have been the end of it. But after the County’s approval, the Commission appealed the County's decision. And to whom did the Commission appeal? In one of the weirdest procedures we've ever heard of, California law allows two members of the Commission to institute an appeal these kind of things...to the very Commission on which they serve. Seems fair (must resist!). Despite the Coastal Act delegating exclusive land use decision-making to local governments that have adopted an LCP, the Commission's appeal claimed that it has the power to overrule all local permitting decisions.

The lower courts agreed. With the County's support, Shear sought discretionary review, and the California Supreme Court said yes.

This case is important for a few reasons beyond the legal questions presented. First, it is the first case in a decade where the California Supreme Court has agreed to review a challenge to the Commission's claimed coastal fiefdom, which appears nearly armor-clad in California's courts (although the Commission's excesses don't play all that well when courts beyond California bother to look).

Second, not only is this a home rule issue about the Commission's lack of respect for local LCP municipalities, but one where coastal property owners need to understand clearly who they need to deal with when seeing government approvals to make presumptively reasonable use of their land (remember, this property is zoned for residential uses); the Commission's position that it is the final czar on all this stuff often puts landowners in the middle of these type of intra-government jurisdiction fights where the only loser at the end is the landowner (flashback to two wolves and a lamb voting on what's for dinner). 

Finally and maybe most importantly, this case brings into sharp focus the ongoing public realization that the Commission has been a substantial impediment to coastal communities carrying their fair share of addressing the housing crisis in California. For example:

• California coastal protections versus housing: The battle is on (SF Chronicle)
• My house of my beach? How California's housing crisis could weaken its coastal protections (Cal Matters)

Will the California Supreme Court bring the Commission back in conformity with the law?

Congratulations to our colleague Jeremy Talcott (who chairs our Coastal Initiative) for the petition grant. Stay tuned here for more. Or follow along on your own on the court's docket. 

Petition for Review, Shear Dev. Co., LLC v. Cal. Coastal Comm'n, No. S284378 (Cal. Apr. 2, 2024)

Unpublished Wednesday: Eviction Moratorium Taking, Excessive Fines Taking, And 1983 Zoning Statutes Of Limitations

Here are three federal circuit opinions, all unpublished. None of them worthy of a stand-alone post, but also not to be overlooked entirely.

• GHP Management Corp. v. City of Los Angeles, No. 23-55013 (9th Cir. May 31, 2024): Lessors "failed to state a claim for a Fifth Amendment per se physical taking[,]" in their challenge to LA's eviction moratorium. You know why: you waived your right to exclude by renting your properties, so the government prohibiting you from getting breaching tenants out is merely a regulation of the landlord/tenant relationship. Yee.
  
• Innova Investment Group, LLC v. Village of Key Biscayne, No. 21-11877 (11th Cir. May 29, 2024): After the Village tagged Innova with a NOV and $4k fine for not obtaining an interior demolition permit and Innova failed to correct the violations within the 60-day deadline, the Village imposed $4k per day fines and "aggregate penalties of $924,000 and it has claimed more than $1.2 million in interest for each day the penalties have gone unpaid." Six years later, Innova sued, asserting the Village violated the Excessive Fines Clause. And yes, there's a takings claim as well. The Eleventh Circuit affirmed the district court's dismissal because the claim should have been brought long ago. Florida has a four year statute of limitations, which means that the section 1983 claim needed to be brought within four years of November 2012, when Innova "should have known how much money it would owe the village[.]" 
  
• Handsome, Inc. v. Town of Monroe, No. 23-711 (2d Cir. May 29, 2024): landowner needed a special use permit to construct industrial buildings, which was granted subject to several conditions. After the owner and the Town went back-and-forth in hearings and permit denials and grants-with-conditions, Handsome's state court lawsuit ended up in the Connecticut Supreme Court which held that Handsome did not have standing because it lost title to the property during the course of the case. Another state court action alleging Due Process and Equal Protection claims followed, after which the Town removed the case to federal court. The Second Circuit summarily affirmed the District Court's grant of summary judgment in the Town's favor, primarily because the claims were time barred. The court rejected Handsome's claim that these were continuing violations. The court also rejected the substantive due process claim, because (you guessed it) Handsome didn't have a property interest in a permit because it wasn't entitled under state law to a permit.

Check 'em out.

CA2: If You Want To Be A Land Use Player, You Gotta Play (And That Means Keep On Trying - Without Hitching Rides)!

This is one we've been meaning to post for a while, but something else always seemed to intervene.

In BMG Monroe I, LLC v. Village of Monroe, No. 22-1047 (Feb. 16, 2024), the U.S. Court of Appeals for the Second Circuit affirmed the dismissal of a statutory and constitutional challenge to the Village's .

The court did so on the basis of the surviving part of the Williamson County ripeness requirement, that the government has taken a definitive position on whether it will allow some development of the plaintiff's land under the challenged regulations.

BMG wanted to build 181 homes, so it developed plans for a mix of uses across several parcels, and development of related infrastructure like roads and a community center. This "did not conform to the zoning codes of the Village and Town." Slip op. at 4. The Village and Town were ok with the proposal, however, provided BMG "satisfied certain conditions" such as the look and feel of the buildings, and other architectural style points. Slip op. at 6. Conditional use approvals followed. Eventually, all looked good and the Village and Town granted conditional final approvals.

But when BMG submitted applications for the building permits on several of its lots, the building inspector balked, asserting the architecture and design were off and not what the conditions required. Permits denied. BMG chased administrative appeals to the Zoning Board of Appeals for some -- but not all -- of the lots. The ZBA eventually denied the filed appeals, concluding that indeed, the construction plans were not in conformity with the conditions on those lots.

Having exhausted its administrative remedies on some but not all of the lots, BMG sued. There wasn't a takings claim (BMG's claims included section 1983, Fair Housing Act, and equal protection), but the district court nonetheless applied Williamson County to dismiss the complaint as unripe.

The Second Circuit affirmed. BMG had not received the Village's "final decision" denying development. But wait, you say...I thought that you said that BMG lost the ZBA appeal? That's usually enough, isn't it? Yes, it did do that, but it didn't chase an appeal on all of the lots. Thus, "BMG's failure to obtain a decision from the ZBA 'leaves undetermined the permitted use of the property in question[.]'" Slip op. at 12 (citations omitted). 

BMG responded: the reason we didn't chase a ZBA appeal on those other lots was that doing so would have been futile. And we did get final approvals and ZBA denials on the other parcels in the group, so isn't that enough? No, according to the Second Circuit, rejecting the argument that "[i]n essence, BMG argues that its otherwise-unripe claims relating to Lots 1, 2, and 3 can hitch a ride on the ripeness of its claims relating to Lots 45 and 46." Slip op. at 13. 

And it didn't matter anyway because even those lots on which BMG chased and lost its ZBA appeals are not ripe because (you guessed it), BMG didn't also seek a variance. Slip op. at 14. Apparently, the Second Circuit sees a variance as some kind of super appeal after ZBA denial. And didn't BMG already get a "variance" (also known as a conditional  use permit)?

But that wasn't enough:

We conclude that after the ZBA affirmed the Village Planning Board’s finding that BMG’s construction plans did not comply with previously agreed-upon conditions, BMG was then required to “submit[] at least one meaningful application for a variance” to the Village Planning Board or ZBA to see whether it could apply clustering techniques in the multi-family district while using the new rear elevation, roof pitch, and siding materials.5 See id. Put simply, the SEQRA Findings provided the terms BMG had to abide by in order to depart from the normally applicable land-use restrictions in the Town and Village. As a result, if BMG wished to alter those conditions, it first had to seek another variance before proceeding to federal court. Cf. Southview Assocs., Ltd. v. Bongartz, 980 F.2d 84, 98–99 (2d Cir. 1992) (holding that, even where “the Board ha[d] denied[] . . . one application,” developer still faced burden of establishing that “submission of another application would be futile” (emphasis added)).

Slip op. at 17.

And finally, didn't Pakdel change the ripeness/futility standards? Not at all, according to the Second Circuit. See slip op. at 19. The more things change, the more they stay the same, no?

What's that old adage? If at first you don't succeed, try and try again? We know that in land use, that means as long as the government says it is willing to "clarify" or "change" its decision (something it almost always asserts it is able and willing to do), a court will very likely never hold it to task. Planning authorities know this, and as a consequence are hardwired to almost never say no, and only "no, but..." or "maybe." 

Until the Supreme Court wakes up to this dynamic, nothing is likely to change.

BMG Monroe I, LLC v. Village of Monroe, No. 22-1047 (2d Cir. Feb. 16, 2024)

Pass A Good Time: Our Report From The 41st ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-3, 2024, New Orleans

When it comes to the longstanding ALI-CLE American Law Institute-CLE Eminent Domain and Land Valuation Litigation Conferences, we're always ready to go. You know that. But this year's version -- the 41st -- was buzzing like no other in recent memory.

Maybe it was the New Orleans venue with its atmo, food, and music for our after-class activities, or even the timing (the second-to-last week on the Mardi Gras parade season, and our conference hotel was right on the routes). It might have been the nice weather (oh, it rained buckets one evening, but there wasn't an ice storm like we experienced in Austin in 2023). Or maybe it was the capacity crowd, and new topics and speakers on the agenda. Or maybe it was just the prospect of seeing our friends and colleagues again after a year.

Here's a photo essay of some of the Conference highlights.

And if you missed out, the webcast was recorded and is available for viewing. Or, better yet, hold on your calendar January 30 through February 1, 2025 for the 42d Conference, to be held at the Westin Bayside San Diego.

Excitement this way...

The view from the podium.
Say "hello" to our opening plenary session in wide-angle.

Prepping the space.
The finished stage that Conference attendees
see isn't how the room starts off.
It takes a lot of work by the ALI-CLE staff
to get the place camera-ready.

The live webcasting of the sessions also takes a lot of
set-up and a ton of equipment. This is just some of it. 

Here's more. 

The badges were arranged on the table with care...

...in trust that our faculty and registrants would soon be there.

No conference would be complete without swag.
Here is but a sampling.

As always, a huge thank you to our generous sponsors.
Without your support, this Conference would not be as
good as it is, year after year.


The Conference site was right on the routes of several parades.
It was difficult to keep focusing on severance damages and larger parcel
when the music and excitement was just outside.
But we tried.


The opening plenary session -- on the U.S. Supreme Court's
big takings case -- got us off to a solid start.


Thanks to Christina Martin and Steve Silva for speaking
on Tyler v Hennepin County.

The view from the podium as Amy Boulris speaks about the most
significant eminent domain decisions of 2023.

The speakers are a mix of practicing lawyers, judges, other eminent domain
professionals, and legal academics. Here, two property scholars --
Timothy Harris and Jessica Asbridge --
discuss how state property law and state courts
can drive the constitutional issues.

Kinnon Williams, Esq. and Christina Thoreson, SR-WA, MAI, CRE 
present on "Valuation of Wasting Assets."

Lawprof Emilio Longoria and attorney Tony Francois
on "What Condemnation Lawyers Need to Understand
About the Clean Water Act After Sackett"
(hint: it goes to highest and best use).

Matthew Ackerman, Marianna Baggett, and Kenneth Haywood
on "The Pitfalls of Objectively Measured Just Compensation:
When Market Value Isn't Enough."

It was not all work and no play.
Again, a big thanks to our generous sponsors.

Our speakers take questions, of course.
We solicit them the old-fashioned way (thanks, James Masterman).

William and Mary Law School Professor
Emerita Lynda Butler (and her former student, North Carolina's
Jeremy Hopkins" discuss property rights in an age of coastal retreat.

Luis Gallardo-Rivera, Dana Berliner, and (off-camera)
Sophia Holley on "Proving and Defending Pretext,
Public Use, and Necessity."

James Masterman and Martye Kendrick on "Preparing Your Witness
to Overcome Obstacles to Highest and Best Use."

Jeff McCoy, Robert McNamara, and Kristen Renfro on
"Getting to Federal Court and Staying There:
Navigating Procedural Mazes in Federal Takings Claims."

Sean Metherell and Nathan Farris zero in on
"How to Win a Future Highest and Best Use Claim: Proving Reasonable
Probability of Rezoning and Other Issues."

Michael Berger is Watching You:
SCOTUS Property Rights Maven Michael Berger zooms in with his
annual "Regulatory Takings Update."

We always hold a spot for Jim Burling on Saturday.
Why? Because his tours-de-force always are interesting
and put people in seats, even on a Saturday morning.

More Big Michael.
Here, sharing his memories of Professor Gideon Kanner.

See you in San Diego!
January 30 - February 1, 2025
Westin San Diego Bayside

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)

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)

"Super-Zoning Board" No More - CA2 Busts The "Land Use Is Local" Trope: Town ZBA Doing Nothing On Variance Application Ripened Constitutional Claim

You remember that longstanding trope: that matters of land use are "local" issues, and thus in civil rights claims involving a state or local government interfering with the right of property federal courts should avoid adjudication until the government has had every chance to do the right thing (even where it is patently obvious that it has no intention of doing so)? This trope most often shows up as a part of a ripeness dismissal, where the court says "too soon," because, well, if given enough time and opportunity, the government might render adjudication unnecessary.

Well, in Ateres Bais Yaakov Academy of Rockland v. Town of Clarkstown, No. 22-1741 (Dec. 8, 2023), the U.S. Court of Appeals for the Second Circuit held a land use case ripe, and in the process blew up this overripe trope. Whoa!

But before you takings mavens get too excited, this is a RLUIPA claim. But that doesn't mean the applicable principles are not relevant. Indeed, this one is worth reading because the court navigates the rocky shoals of Article III ripeness in land use cases, and concluded that "federal courts have an obligation to adjudicate cases that invoke our jurisdiction, and we do not close our doors to litigants properly seeking federal review simply because their grievances touch on local zoning matters.: Slip op. at 17.

Before you get too excited again, this warning: the qualifiers "properly" and "simply" carry a lot of the work here, and the court doesn't conclude that if you make a constitutional challenge to a zoning or land use decision, your case is ripe and you are heading straight to the front of the line.

Here are the quick facts. The Academy wanted to build an Orthodox Jewish school. It entered into a purchase agreement to buy some land and lined up financing. It alleged that in response, "segments of the local community" formed to oppose the school, with one Town supervisor announcing "the the Town would 'strongly enforce' applicable zoning and building-code regulations of the property." Slip op. at 7.

Next up: a lot of the typical maneuvering during the zoning approval process, including the Town's fire inspector kiboshing a building permit application on the basis that the property lacked the minimum frontage required, and that a building permit could not be issued until the school obtained a variance from that requirement. Slip op. at 9-10. The school appealed to the Zoning Board of Appeals, asserting that the school met the frontage requirement. In response, the inspector asserted that the appeal papers were incomplete because the school had not submitted a property survey in support.

Survey? Where does it say we need a survey (said the school)? It claimed that "nothing in the Town Code or ZBA rules required such a survey, and the requirement served no practical purpose." Slip op. at 10. [Barista's note: this is typical, and local planning officials often reject applications and claim they cannot be processed because they are not complete, and when pressed about where the requirement to submit the allegedly "missing" information comes from have no answer or merely say "this is how we do things here - everyone knows that."]

But the school played ball and made and submitted a survey.

[But o]nce the survey had been completed, on May 7, [the school] requested a hearing date for its appeal to the ZBA. However, the ZBA failed to respond to this request, and the project came to a standstill. Subsequently, Investors Bank revoked its commitment to provide financing.

Id.

The ZBA's do-nothing approach continued, even in the face of the school pressing it repeatedly, at one point pointing out the failure of the financing as a reason it was considering the application revoked. Slip op. at 11. Then, to add insult to injury, {o]n October 3, the Town announced that it was purchasing the property for itself." Slip op. at 11-12.

Next up, federal court section 1983 and RLUIPA lawsuit. The district court dismissed; the federal claims were not ripe because -- you guessed it -- the ZBA had not yet decided. Slip op. at 13 ("the Zoning Board of Appeals, the municipal entity responsible for the administration of the zoning laws, never issued a final decision on the merits of [the school]'s application"). The claim was not ready, and thus failed the "case and controversy" requirement of Article III.

The Second Circuit reversed. As noted above, the court rejected the Town's argument that this, at heart, was a local zoning matter and that federal judges should therefore butt out. In holding the claims ripe, the court noted Pakdel's dictum that the ripeness requirement is "relatively modest" and that nothing more than "de facto" finality is needed. Slip op. at 18.

Applying those rules, the court concluded that the ZBA "reached a decision that was sufficiently final for ripeness purposes." Id. By "choosing not to adjudicate [the school]'s appeal[,]' the ZBA made a de facto decision. The complaint also plausibly alleged that the ZBA "declined to respond to at least five letters urging it to schedule a hearing." Id. And to cap it off, a Town official (its lawyer) "wrote to [the school] that the ZBA 'will not entertain any appeal by [the school] with respect to the [property].'" Id. 

"This letter made the ZBA's position pellucid[.]" Slip op. at 19. Dismissal reversed, and case remanded for more on the merits.

That is all well and good, but we issue a caution in cases like this, where the government has done some pretty outrageous things: it shouldn't take this much to get a court to agree that a case is ripe. As the Supreme Court reminded in Pakdel, this is a relatively modest requirement with only de facto finality required. Just because cases  like this one in which the government is going way overboard are well-within the ripeness requirement, does not mean that "lesser" government foot-dragging is okay.

Ateres Bais Yaakov Academy of Rockland v. Town of Clarkstown, No. 22-1741 (2d Cir. Dec. 8, 2023)

Legislative Exactions Merits Brief (Ours): "the text and history of the Takings Clause admit no exception for legislative takings"

Here's the merits brief in a case we've been following (naturally, because it is one of ours). This is Sheetz v. El Dorado County, the case which asks whether a condition on development (aka an "exaction") is exempt from the close nexus and rough proportionality standards of Nollan/Dolan/Koontz simply because the exaction is imposed on every owner who asks for permission to use its property, and not via an ad hoc administrative permit procedure.

Because this is one of ours, we're not going to go into in further, but leave to you to read our brief:

In this Court’s key exactions precedents—Nollan, Dolan, and Koontz—it held that when government exacts money or real property as a condition on the right to use or develop land, it must establish that the exaction bears an “essential nexus” and “rough proportionality” to an adverse public impact caused by the owner’s proposed project. In this case, the Court should confirm that Nollan/Dolan review applies, not just to so-called ad hoc or discretionary conditions, but to legislatively mandated exactions as well, such as the fee that El Dorado County imposed on Mr. Sheetz. That rule follows inexorably from this Court’s precedents, as well as the history and purpose of the Takings Clause and the unconstitutional-conditions doctrine. The rule is easy to implement. And the rule ensures that any exaction serves as genuine mitigation for public impacts attributable to the proposed use or development rather than a veiled attempt to skirt the compensation requirement of the Takings Clause.

...

[T]he text and history of the Takings Clause admit no exception for legislative takings. “The Takings Clause . . . is not addressed to the action of a specific branch or branches,” but is instead “concerned simply with the act, and not with the governmental actor.” Stop the Beach Renourishment, Inc. v. Fla. Dep’t of Env’t Prot., 560 U.S. 702, 713–14 (2010) (plurality op.). Holding all exactions accountable to the Takings Clause ensures the fulfillment of the Clause’s fundamental purpose: “to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, 364 U.S. 40, 49 (1960).

Stay tuned.

Follow along here, or on the Court's docket.

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

Here's The Program For The 41st ALI-CLE Eminent Domain And Land Valuation Litigation Conference, Feb 1-3, 2024, New Orleans

Here's the brochure and the full agenda and registration information for the upcoming ALI-CLE Eminent Domain and Land Valuation Litigation Conference at the JW Marriott in New Orleans, February 1-3, 2024.

This is the long-running nationally-focused conference on all things eminent domain, takings, valuation, and related. We have three tracks, from which you can choose a la carte - Practice, Substantive, and Condemnation 101:

For over 40 years, we’ve been bringing eminent domain practitioners together to examine the latest issues, engage in healthy debate, and get the information they need to stay current in their practice. This year – our 41st – is THE perfect time to reunite with your eminent domain colleagues. There will be plentiful opportunities to meet and mingle with the faculty and other registrants – throughout the conference and at evening social events. Attendees come back year after year to make new friendships and renew longstanding ones – in a welcoming environment and amongst others who share the same passion for this area of the law.

Please check it out. Over the next couple of weeks we shall bring you details of the various programs.

If you have joined us in the past, you know what a worthwhile conference this is. If this will be your first time, welcome; we hope that you will become a long-term colleague.

Register now, and reserve your spot. In the past few years, we've sold out the hotel block and the Conference seats. So don't miss out!

2024 ALI-CLE Eminent Domain and Land Valuation Litigation Conference Brochure, Feb. 1-3, 2024, New Orleans,...

Live The Dream! Teach Dirt Law In Hawaii: UH Law School Looking For Property & Land Use Lawprof

(Tip for applicants: understanding the symbology of the
Law School's logo will show you know the score.)

Here's your chance to teach Property and Land Use in what might be most interesting venue on Planet Earth for those subjects: the University of Hawaii School of Law has put out a call for applications for a tenured lawprof (along with six other openings in other subjects):

The University of Hawaiʻi at Mānoa, William S. Richardson School of Law seeks to fill up to seven tenured or tenure - track positions . For doctrinal faculty, we are seeking to fill positions in Constitutional Law (tenured or tenure - track) and Property /Land Use (tenured). We welcome candidates who, in addition to one of those two fields, have expertise in Administrative Law, Business and Commercial Law, Environmental Law, Family Law, Health Law, Intellectual Property, Labor and Employment Law, Native Hawaiian Law, and Pacific - Asian Legal Studies.

Here's the full description of all the openings with general information and a way to find out more.

Here's what a typical day at the office looks like.

We can report with first-hand knowledge that teaching these subjects at this law school is very good (we taught the Land Use course this past spring semester -  and we earned our JD here too many years ago to mention.

So if you are even thinking about it, now's the time: fire up that CV and "chance um" (as we say in the 808).

(Tip #2 for applicants: learning why this sign is important might be important.)

Hawai‘i Law Position Description - General (Aug. 2, 2023)

Kansas: No Private Enforcement Of State Relocation Act (And Relocation Isn't Part Of Just Compensation)

Here's a short one from the Kansas Supreme Court. In Kansas Fire and Safety Equipment v. City of Topeka, No. 123,063 (June 30, 2023), the court concluded that the requirements of the Kansas Relocation Act do not give rise to a private right of action, and that relocation costs are not a component of just compensation. 

We're not going to dwell on the decision too much, since it is limited to Kansas law. But here are your highlights:

• "Kansas Fire and Safety Equipment, Hal G. Richardson d/b/a Bueno Foods Brand and Topeka Vinyl Top, and Minuteman Solar Film (the tenants), were forced to relocate when the City of Topeka (the City) bought the real property the tenants leased for their business operations. The tenants alleged that the property was acquired before a condemnation action. And they sued the City to recover relocation expenses in an action filed directly with the district court under the [Eminent Domain Act]." Slip op. at 4.
• "Ultimately, we hold that the district court lacked subject matter jurisdiction over the tenants' petition. The EDPA neither provides a private right of action to recover relocation benefits nor authorizes judicial review of relocation-benefit determinations in eminent-domain appeals. In contrast, the KRA [Kansas Relocation Act] does provide an administrative remedy to vindicate the statutory right to relocation benefits. And once the administrative appeal is completed, the KRA also authorizes district court review of the hearing examiner's ruling. But the tenants' failure to exhaust this administrative remedy deprived the district court of subject matter jurisdiction under the KRA. Slip op. at 4-5.

Kansas Fire and Safety Equip. v. City of Topeka, No. 123,063 (Kan. June 30, 2023)

Nectow Is Meaningless Because It "relies on pre-Lochner administrative review jurisprudence"

One from the Louisiana Court of Appeal, 3000-3022 St. Claude Avenue, LLC v. City of New Orleans, No. 2022-CA-0813 (June 22, 2023) demonstrating that the standard of judicial review for zoning matters (rational basis) is pretty powerful.

The owner wanted to develop its New Orleans property, but first needed a zoning amendment from residential to commercial, followed by a conditional use permit for its proposed use. The city denied the request. After much procedural back-and-forth, including a trip to the court of appeal to resolve, the case was sent back to the city council to state the basis for the denial. The council held a public meeting at which it denied the rezoning, and declined to state more, including the reasons why.

So back to court the owner went. The trial court thought it had been clear enough: you were supposed to say why you denied the rezoning. Hearing nothing satisfactory from the city in response, the trial court held that the denial was arbitrary and capricious, and sent the case back to the city council with an order that it approve the zoning change. Next stop, the court of appeal.

The city asserted this was wrong for two reasons. First, making us state the reasons why we denied the rezoning effectively shifts the burden from a challenger showing that what we did was arbitrary and capricious, to the city showing that it wasn't. Next, the city argued that the owner hadn't met its burden to show that the rezoning denial was arbitrary and capricious because it didn't overcome the rational basis standard of review.

The court of appeal accepted both arguments. A "zoning decision by the City Council is not invalid merely because the City Council did not include an explanation of its decision." Slip op. at 9. These things are entitled to a presumption that they are valid, and it's up to you, challenger, to prove why denial of rezoning is arbitrary and capricious. It isn't the government's duty to say why it does something. See slip op. at 12 ("The trial court’s October 12, 2022 judgment and Reasons for Judgment do not demonstrate a finding that the LLC established an arbitrary and unreasonable exercise of legislative authority so as to rebut the presumption of validity attached to the City Council’s decision and shift the burden of proof to the City Council. This was error for the trial court to do so."). 

Besides, it really doesn't matter because rational basis review is really conceivable basis - what the city might say about why it denied the rezoning doesn't matter as long as one reasonable government official might think it is related to the public's health, safety, welfare, or morals. Slip op. at 15 ("It is sufficient that the municipal council could reasonably have had such considerations in mind.").

What about Nectow v. City of Cambridge, 277 U.S. 183 (1928), where the very same U.S. Supreme Court that had a couple of years earlier upheld zoning against a facial constitutional challenge held that as-applied to a particular parcel, Cambridge's residential designation was arbitrary and capricious? The Louisiana court discounted Nectow, noting only in a footnote that "[b]ecause Nectow v. City of Cambridge, 277 U.S. 183, 48 S.Ct. 447, 72 L.Ed. 842 (1928) relies on pre-Lochner administrative review jurisprudence, we do not find it persuasive in the case sub judice."). Slip op. at 16 n.3. Lacking proof that the property here is "completely unsuited" for residential development in accordance with its current zoning, there's nothing for a court to do. 

It doesn't have to be this way, as the U.S. Court of Appeals for the Fifth Circuit recently held. Facts seem like they should matter.

Finally, the court rejected the takings claim:

The City Council received information regarding the ability of the Property to generate income in its current zoning because the structures present on the rear residential portion have previously served as residential rentals, so this refutes the LLC’s contention that the current designation constitutes a taking of the LLC’s property.

Slip op. at 21.

This portion of the court's opinion is pretty incoherent as it seems to apply a due process analysis to the takings question. See, e.g., slip op. at 20-12 (analyzing the possible reasons why the city council denied the rezoning, and why residential uses are preferred by neighbors). We'd appreciate it if anyone can explain this part of the opinion to us in a way that makes some sense.

3000-3032 St. Claude Avenue, LLC v. City of New Orleans, No. 2022-CA-0813 (La. App. June 22, 2023)

Iowa Supreme Court Can't Decide Much Of Anything In Power To Take Challenge

At first, the Iowa Supreme Court's opinion in Juckette v. Iowa Utilities Board, No. 21-1788 (June 16, 2023) looks like a promising read. The issue -- is a utility expanding its use of an express road easement to install electric lines a taking? -- is one that we've been following.

But by the time you get to the end of the short opinion (10 pages), you realize the court didn't decide much, other than yeah, the utility has the statutory authority to use the easement this way. The court can't reach a decision on whether that's a taking for public use. Not because there's some problem with the case or the way it was presented, but because one of the Justices on the seven-member court sat it out and the remaining six couldn't agree. Affirmed by an equally divided court, 3-3. 

This apparently is not that unusual in Iowa, as the national media noted recently. This story ("Iowa Supreme Court split 3-3 on abortion ruling - How rare is a deadlock?") notes it is rare, "with only 18 cases ending in a non-decision deadlock in the last 15 years." To us, more than one a year seems like a lot, not rare.

Well, at least the six who showed up agreed on one issue: the utility met the statutory requirements of building utilities in a public road easement.

Here's the short story. Juckette's-predecessor-in-title granted the county an easement for a "road right-of-way." That road is now a county highway. Flash forward a few decades and the electric utility wants to build new lines to "satisfy the demands created by Microsoft's new data center." Slip op. at 8. On some properties it exercised the delegated power of eminent domain. But on Juckette's land, it didn't because it thought it could just use the road easement. As the court noted, based on a decision of the Iowa Supreme Court, Keokuk Junction Railway v. EIS Indus., 618 N.W.2d 352 (Iowa 2000), "the utility "would have been obligated to pay Juckette compensation to build electric transmission lines in the road right-of-way." But in 2004, the Iowa Legislature adopted a statute that authorized utilities to go ahead and build in a public road right-of-way.

The utility petitioned the Iowa Utilities Board to let it do just that. The Board agreed that the utility met the statute's requirements and that the electric project is in the public interest. The legislature had essentially overruled the Iowa Supreme Court's Keokuk decision. But wasn't Keokuk a constitutional ruling, meaning that the statute could not supersede the obligation to pay compensation? The Board (correctly) concluded that as an agency, it lacked the jurisdiction to determine constitutional matters, and declined to address the argument.

Next stop, the courts. The trial court affirmed the Board's application of the statute, and rejected the owner's claim that this is nonetheless a taking and compensation is required. Next stop, the Iowa Supreme Court to resolve all questions.

Or so the parties thought. That court affirmed the statute-allows-this ruling. It also agreed that the Board's determination of public use and necessity under the statute (a certificate of public convenience for you PUC mavens) resolved the question of whether this is a public use of the property for takings purposes.

The owners asserted this was a taking to benefit Microsoft, not the public. The court noted, "it does seem that the most immediate need for the project is to satisfy the demands created by Microsoft's new data center. But record evidence shows that MidAmerican's planned improvements will also benefit current and future customers other than just Microsoft." Slip op. at 8-9. But we don't have to resolve which side is right, because the Board already did so: the public use inquiry required by the constitution is undertaken and determined by the Board.

On the other issue -- is expanding the scope of a granted easement to include additional uses a taking -- the court split 3-3.

The only question is whether that construction could result in a taking that requires compensation under the Fifth Amendment to the United States Constitution and article I, section 18 of the Iowa Constitution. As to this question, we are evenly divided. Christensen, C.J., and McDermott and May, JJ., would find that that construction could result in a taking; Waterman, McDonald, and Oxley, JJ., disagree. As a result, the district court is affirmed by operation of law. Iowa Code § 602.4107 (2023); Effler, 769 N.W.2d at 884.

Slip op. at 9-10.

Too bad.

Juckette v. Iowa Utilities Board, No. 21-1788 (Iowa June 16, 2023)

New Takings Ripeness Cert Petition (Ours): Knowing The Permissible Uses "to a reasonable degree of certainty" Is All You Need For A Claim To Be Ripe

Here's the cert petition, filed last week, in a case we've posted about. See here (Ninth Circuit arguments) and here (en banc petition).

The Ninth Circuit affirmed dismissal of a takings claim because (it held) the claim isn't ripe. The government hasn't made up its mind, and just might allow the owners to make some use of their residentially-zoned land (even though the property is also subject to an overlay zone that expressly prohibits residential development). More background here. 

This is one of ours, so we're not going to be saying too much more about it. The petition also lays out the situation.

Here are the Questions Presented:

Randy Ralston and Linda Mendiola (Ralstons) wish to build a retirement home on their residentially-zoned land in San Mateo County, California. However, their property sits entirely within an overlay zone, the Montecito Riparian Corridor (Corridor), which categorically bans residential development. The County nonetheless instructs landowners who wish to build a home to submit their “intention” to the Community Development (Planning) Director and County Counsel, who must undertake a “takings analysis” to decide whether to “override” the Corridor’s absolute ban to prevent a taking. When the Ralstons followed this procedure, the Planning Director and County Counsel responded that there was no justification “to override the Local Coastal Plan limitations on development within wetland and riparian areas in order to accommodate a reasonable economic use.” No procedure exists to challenge this decision. In short, the answer was an unambiguous and unappealable “no.” The Ninth Circuit held that the Planning Director and County Counsel’s response, though they were speaking for the County, was “informal,” and that the Ralstons’ takings claim is ripe only if they submit—and the County formally denies—a Coastal Development Permit application.

The questions presented are:

1. Is a takings claim ripe when the government establishes a mandatory process requiring property owners to ask whether any development on their land is possible, and responds with a definitive and unappealable denial?

2. Are takings complaints subject to a higher pleading standard than other civil rights complaints?

Stay tuned.

Petition for Writ of Certiorari, Ralston v. County of San Mateo, No. ____ (U.S. June 16, 2023)

CA1: Despite Two Variance Denials, Takings Case Not Ripe Because It Isn't Futile To Try Again

Here's the latest from the U.S. Court of Appeals for the First Circuit on takings ripeness, Haney v. Town of Mashpee, No. 22-1446 (June 6, 2023). 

The case centers on Gooseberry Island, Massachusetts, which is zoned by the Town of Mashpee as R-3. But under the Town's zoning code, any residence must have at least 150 feet of frontage and a paved access roadway within 150 feet.

Which is problematic because Gooseberry Island is, well, an island -- separated from the mainland by a 40 to 80 foot channel depending on the tides. There's no bridge, although you can wade across the channel at low tide. No bridge means no roads, and no roads means no residential development.

So the owner sought variances from the frontage and roadway requirements in 2013. Denied. The road and frontage requirements are about emergency access. Next, the owner sought approvals to build a bridge. If emergency vehicles can get to the island, then maybe we can build roads, and home. The owner proposed a wood bridge, which was opposed by the Mashpee Wampanoag Tribe, which holds a shellfish grant from the Town in the adjacent water. The Tribe claimed a bridge would adversely impact the shellfish habitat. Consequently, the bridge proposal was rejected the Town under state and municipal environmental law.

The owner sought review by the Massachusetts Department of Environmental Protection. Also denied, because 17 square feet of salt marsh would be destroyed by the bridge piles, and because the bridge itself would cast shade on shellfish. The owner appealed up the state's administrative chain, and in the interim revised its proposal to make it a steel bridge, which would not require pilings and would not cast as much shade.

That change seemed at first to have the desired effect, because the DEP told the owner that a steel bridge was entitled to approval under state environmental law. In light of that, the state appeal office -- which was considering the administrative appeal -- stated that the appeal should be granted. But the Town opposed the change, asserting that the switch from wood to steel was not authorized in accordance with the change rules. When the state appeal office issued its final decision, it was not good news for the owner: steel bridge denied, because the change didn't conform to the requirement that any plan changes are not substantially different than the original proposal.

The office of appeals concluded that if the owner wanted the state to review a bridge proposal, it would have to resubmit a new steel bridge proposal. The owner appealed to the state court of appeals, which only recently affirmed. Haney v. Dep't of Env't Prot., 173 N.E.3d 55 (Mass. App. Ct. 2021).

Undaunted, the owner set the wheels in motion again. It applied to the Town for another variance from the frontage and road requirement. "In an effort to address the perceived reason behind the Board's denial of the 2013 Variance Applications [emergency vehicle access], the Trust provided the Board with a '2014 plan depict[ing] a bridge and Gooseberry Island." Slip op. at 7.

Unanimously denied, because "the bridge needs to be approved prior to building on the lot." Slip op. at 7. At that time, the state's decision on a bridge was still in-process It would not be resolved by the court of appeals until a few years later). The owner suggested that a conditional variance would be ok: how about approving the variance, conditioned on the state's later approval of a bridge? Nope, variance denied.

Federal court takings lawsuit followed. As did the government's 12(b)(6) motion to dismiss, which the district court granted. The takings claim was not ripe "because the Trust never applied to build a steel bridge." Slip op. at 9. The owner could have (and thus should have) "followed through with the filing of a New Notice of Intent with the [state] for construction of a steel bridge, even though[it] 'expressed support for this proposal.'" Slip op. at 10. The state might just grant that application, and "pursing the steel-bridge proposal would not be futile." Id.

The First Circuit affirmed because there hasn't been a final no. Those two variance denials? Not enough. The court rejected the owner's argument that it couldn't get approval from the state for a bridge without already having a variance from the Town already in hand. According to the opinion, the owner didn't need a variance from the Town in order to apply for permission to build a bridge from the state, so that issue was irrelevant. Slip op. at 13. 

The court also rejected the owner's assertion that the Town strayed outside its jurisdiction when it considered whether to condition a variance on a bridge. The Town can issue permits with conditions generally, and here, "the Board never determined whether that permit should or should not issue." Slip op. at 14. 

And what about the owner's main argument, that the Town actually denied the two requests for a variance? The Town didn't exactly condition a variance on the owner building a bridge, it's only that some of the Town Board members mentioned it. Or so argued the owner. The Town's actual decisions, according to the owner, were clear denials. Not quite, the court concluded. And here's where it seems to get a bit ack-basswards. The court concluded the Board member's statements "constitute the reasons for its decision." Slip op. at 15.

We thus see no support for the contention that we must disregard the statements made by the Board members as recorded in the 2018 Variance Decisions, at least when such statements are plausibly related to the concluding explanation given by the Board for denying the variances.

Slip op. at 16. The court concluded that the owner's argument was "underdeveloped" and thus waived.But is ripeness concerned with the why of the denial, or just that you get a denial? What's the deal with the reasons?

The court next noted that "Haney offers no argument as to why the denial of the 2018 Variance Applications should be interpreted as with prejudice." Slip op. at 15. The written denial "fails to specify whether the denials were with or without prejudice[.]" Wait, what? What's this prejudice thing? The Supreme Court only requires a decision, not an unequivocal no and an expression that the government won't consider you again, property owner. And remember that Pakdel only requires "de facto" finality, not more.

Finally, the First Circuit rejected the owner's argument that to chase more would be futile:

This futility exception -- which has been part of our caselaw for three decades -- was recently endorsed by the Supreme Court in Pakdel. 141 S. Ct. at 2230. In addressing the state-forum finality requirement, the Court held that a landowner only needs to show "that there is no question about how the regulations at issue apply to the particular land in question." Id. (cleaned up). The finality requirement is therefore met once it is clear to the federal courts that the initial decisionmaker has reached a "definitive position on the issue." Id. at 2230 (quoting Williamson Cnty. Reg'l Plan. Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172, 193 (1985)).

Through Pakdel, our caselaw's futility exception is now simply part and parcel of the finality requirement.

Slip op. at 17-18. Here, the Town "Board has never represented that it would deny any and all variance applications -- even if the [owner] presented applications accompanied by an approved steel-bridge plan." Slip op. at 19.

So go get a steel bridge approved, property owner. And with that, come back to the Town and submit a third application for a variance. Who knows, maybe the Town just might grant that one.  

Haney v. Town of Mashpee, No. 22-1446 (1st Cir. June 6, 2023)

SCOTUS GVR's Pipeline Cert Petition On Delegation Of Eminent Domain To Private Parties

In this Order, the Supreme Court granted this cert petition which presents these questions:

Whether a facial challenge to Congress’s delegation of eminent domain power to private parties is properly filed in district court, as this Court held in PennEast Pipeline Co. v. New Jersey, 141 S. Ct. 2244 (2021), or with FERC, which has admitted it has no jurisdiction to adjudicate the constitutionality of this delegation.

Whether a facial challenge to Congress’s overly broad delegation of legislative power to FERC is properly filed in district court or with FERC, which has admitted it has no jurisdiction to adjudicate the constitutionality of this delegation.

Whether a facial challenge to Congress’s delegation of eminent domain power to FERC is properly filed in district court or with FERC, which has admitted it has no jurisdiction to adjudicate the constitutionality of this delegation.

As the Order notes:

Petition GRANTED. Judgment VACATED and case REMANDED for further consideration in light of Axon Enterprise, Inc. v. FTC, 598 U. S. ___ (2023).

So what is this Axon case the Court refers to? You might want to read some of the amicus briefs filed in the case to find out. All of them are posted on the case's docket here. Or read this summary from the Federalist Society, "Supreme Court Holds That Federal District Courts Have Jurisdiction To Hear Structural Challenges To FTC And SEC."

Or better yet, we refer you to our colleague Michael Realbuto's post on the McKirdy Riskin Olson DellaPelle Condemnation Blog, "SCOTUS Sends Pipeline Eminent Domain Case Back to the District Court." Our read of Axon is that you don't have to ask an agency to pass on the constitutionality of its own actions or the scope of its authority. As Michael writes:

On April 14, 2023, the Court released a unanimous 9-0 decision in Axon holding the district court retains § 1331 jurisdiction over structural separation-of powers challenges because that type of separation-of-powers injury cannot be remedied by the agency itself or the court of appeals. The Court’s April 2023 summary decision in the MVP matter was clearly guided by the holding in Axon and proves to be a victory for the landowners who will now have their day in Court. Notwithstanding the District Court’s ability to hear the MVP case, there are some cases on the books that the landowners must overcome. For example, in Penneast Pipeline Co. v. New Jersey, 141 S. Ct. 2244 (2021), the Supreme Court expressly held that the Federal Government can constitutionally confer on pipeline companies the authority to condemn necessary rights-of-way in which a State has an interest. While it’s going to be an uphill battle, we are tuned in to see how this fight shapes out.

What do you think will happen on remand? We think we know.

Petition for Writ of Certiorari, Bohon v. Fed. Energy Reg. Comm'n, No. 22-256 (U.S. Sep. 15, 2022)

Exactions, Takings, And Ripeness...Oh My! When Planning Officials Say "No," That's Enough (Even If They Might Have Said "Yes" Some Other Way)

There's a lot to digest in the 36-page Order of the U.S. District Court for the Southern District of Florida in case that mostly concerns the validity of an exaction a small property owner was required to pony up in order to tear down and replace an old home on its land.

Megladon bought the residentially-zoned property in 2016 to tear down the existing building and build a new one. Simple enough, right? It demolished the old house, and applied to the Village to build a new one. But the Village also needed a road, and began making noise about a "possible road dedication." And sure enough, eventually the Village notified Megladon that "a certificate of occupancy will not be issued until dedication of the right-of-way is complete." Slip op. at 4. There's a dispute over exactly whose law requires such a dedication -- Village or County? -- but that's not terribly important for our purposes. 

Megladon balked, as dedicating a road would require it to reformulate its plans. There's apparently a procedure by which a property owner can request and exemption or waiver, but "Megladon refused because of the 'legal inconsistency of doing so[.]'" Slip op. at 4. Instead, it sued in a Florida state court. The Village then removed the action to federal court. After removal, Megladon amended its complaint to add an unconstitutional conditions claim.

The inevitable motion to dismiss under 12(b)(1) and 12(b)(6) followed.

Many pages of the court's order (mostly) denying the motion to dismiss are devoted to whether the plaintiff sued the right defendant. Important to the case and the parties, but not really of interest to us. If you might be, check out pages 9-23. 

Page 24 is where the interesting stuff heats up. The court concluded the claims are ripe over the Village's objection that -- you guessed it -- it has not yet reached a "final decision." Slip op. at 24. The court concluded "[t]his argument strains credulity[,]" because the Planning Director send Megladon an email that indeed "a certificate of occupancy will not be issued until dedication of the right-of-way is complete." To the court, this looked like a final decision:

Especially when we view this communication (from the Village’s Planning Director no less) in the light most favorable to the Plaintiff, we don’t think we’re going out on a limb by saying that it sounds a lot like a final decision. Director Olmsted made clear that the Village would issue the permit provided the Plaintiff acceded to the dedication. See ibid. “Provided” in this context means “with the provision or condition (that); it being provided, stipulated, or arranged (that).” Provided, Oxford English Dictionary Online, https://www.oed.com/view/Entry/153449 (last visited Mar. 1, 2023); accord Provided, Merriam-Webster's (defining “provided” as “on condition that, with the understanding, if only”). And, in case there was any doubt, Olmsted clarified that Megladon would “need” to consent (in writing) to the dedication “prior to” the issuance of any permit, and he was pellucid that the permit “will not be issued until dedication of the right-of-way is complete.” SAC ¶ 64 (emphases added). The word “will”—like the word “shall”—indicates the imposition of a mandatory condition. See Hewitt v. Helms, 459 U.S. 460, 471 (1983) (“[T]he Commonwealth has gone beyond simple procedural guidelines. It has used language of an unmistakably mandatory character, requiring that certain procedures ‘shall,’ ‘will,’ or ‘must’ be employed[.]”); Will, Oxford English Dictionary Online (“An utterance of the auxiliary verb ‘will’; (also) a command, promise, or determination expressed by such an utterance.”); Will, Merriam-Webster's (defining “will” as “used to express a command, exhortation, or injunction”); Scalia & Garner 112 (“Mandatory words impose a duty; permission words grant discretion.”).

And Olmsted’s unequivocal use of the phrase “will need” in relation to the dedication requirement puts to bed the Defendants’ bordering-on-frivolity contention that “the response to [the architect’s] email was not a refusal to continue processing the application absent a showing of dedication.”

Slip op. at 25 (footnote omitted).

This all in the context of an exaction or unconstitutional condition claim, where the bad act (according to the court) isn't that the government actually denied the permit asked for, but only that the government imposed the condition. Slip op. at 26.

The order noted that yes, the property owner could have gone further in the administrative process under the Village's procedures. But that's what we call "exhaustion." Id. ("But the Supreme Court has made clear that the unconstitutional-conditions doctrine isn’t subject to an exhaustion requirement." (citing See Pakdel v. City & Cnty. of San Francisco, 141 S. Ct. 2226, 2231 (2021)). And you don't need to exhaust in order to ripen a federal takings claim.

And here's the kicker: the ripeness requirement isn't some hard-and-fast "one application" rule, but rather "[t]o assert a plausible unconstitutional-conditions claim, therefore, a plaintiff need only allege that there’s 'no question . . . about how the ‘regulations at issue [apply] to the particular land in question.''" Slip op. at 27 (citing Suitum v. Tahoe Reg’l Plan. Agency, 520 U.S. 725, 739 (1997); Williamson Cnty. Reg’l Plan. Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 191 (1985)). And the availability of a variance isn't important, because "[i]n Williamson County, after all, the Court was concerned only with whether the plaintiff could seek a variance from the initial decisionmaker." Slip op. at 28.

Thus, the takings claim was not filed too early.

But, you know that -- as the court noted -- "the Plaintiff isn't out of the woods just yet[,]' because the Village also asserted the claim was filed too late. Slip op. at 31. Yeah, this happens a lot in takings-land, where you can be accused with a straight face of being both too early and too late. Check out pages 32-34 for why (it turns on the construction of the sovereign immunity waiver statute, if you are interested). 

Nothing resolved except the plaintiff is allowed to proceed. But as you all know, in takings law sometimes just surviving to continue the fight is a victory.

Order, Megladon, Inc. v. Village of Pinecrest, No. 1:21-cv-22819-ALTMAN (S.D. Fla. Mar. 2, 2023)

Denying Uses (But Allowing Discretionary Ad Hoc Exceptions) Isn't A Recipe For Rational Land Use

If a zoning statute or ordinance sets out the uses permitted in a zone, and the uses not permitted in the zone, and a property owner wants to make a use not permitted in the zone, all she needs to do is apply for a variance, or a Conditional Use Permit, or a nonconforming use permit, or a Special Use Permit, right? After all, isn't the point of these exceptions to bright-line use prohibitions to build in a large degree of flexibility and afford front-line regulators in the right circumstances the discretion to grant a use the legislature prohibited? One size does not fit all, does it? 

That was the issue that closely divided the Hawaii Supreme Court in Hoomoana Foundation v. Land Use Comm'n, No. SCWC-17-181 (Mar. 10, 2023). In a 3-2 opinion, the court concluded that when a use is expressly barred by a zoning statute (and yes, here it is a zoning statute because Hawaii has state-controlled zoning) you cannot ask for a Special Permit to make that use. The only way you can make a use expressly prohibited by the statute is to change the parcel's zoning.

The Case and the Issue

Here's the story. The Foundation wanted to set up an "overnight campground for homeless and commercial campers" (slip op. at 3) on land it leased, which was zoned by the State as Agriculture (B-rated soil, if you are interested):

16. Under Ho'omoana's proposal, the Project would consist of 2 acres, while the remaining adjacent 5.9 acres would be reserved as an agricultural field to be used by the campground occupants for therapy and work. It is envisioned that the [homeless] campers may work in the agricultural field to supplement their rental fees. Homeless campers are expected to pay $10 a night, while the commercial campers would be charged more. The camping fees are anticipated to underwrite the expenses of the campground. Although some of the campers may wish to participate in farming activities on the Property, there is no guarantee that the agricultural field would result in future agricultural productivity nor is there a current requirement placed upon the campers to engage in agricultural pursuits.

17. The 2-acre area of the Project would have up to 26 pods for tents accommodating up to 80 people. Tents are to be provided by the campers. It is intended that both the homeless campers and the commercial campers would be camping alongside each other. In addition to the pods, showers, toilet facilities, fire pits or camp stove areas, a paved parking area, and a charging station for campers are proposed. Homeless campers would be allowed to stay for two to three months or more as approved by the campground manager. It is unclear how long commercial campers would be allowed to use the grounds, but any stay would need to be approved by the manager.

Slip op. at 4.

Problem is, the Agricultural district doesn't seem to allow for overnight camping. The statute says that recreational uses like day camping is permitted, but expressly excludes "overnight camps" as allowed uses:

Within the agricultural district ... all lands ... shall be restricted to the following permitted uses: ... Public and private open area types of recreational uses, including day camps ... but not including ... overnight camps[.]

Haw. Rev. Stat. § 205-4.5(a)(6).

But an adjacent statute also allows a request for a Special Use Permit, for "unusual and reasonable uses within agricultural and rural districts other than those for which the district is classified." Haw. Rev. Stat. § 205-6. So what's the deal, can a county Planning Commission or the state Land Use Commission consider a special use permit to allow a use expressly prohibited by the zoning statute?

What Happened

The Foundation thought so, and asked the Maui County Planning Commission for a Special Permit to allow the overnight homeless and commercial campground project as a "unusual and reasonable use." The Foundation also had behind it a Hawaii Supreme Court case, Mahaulepu v. Land Use Comm'n, 71 Haw. 332, 790 P.2d 906 (1990), which held that a use not permitted under section 205-4.5(a)(6) might well be authorized via a special use permit.

But neighbors who object to the project asked the State Land Use Commission for a declaratory ruling that the proposed use of Agricultural land requires a zoning change (known in the parlance of Hawaii's statewide zoning scheme as a "boundary amendment"), and cannot be accomplished ad hoc by a discretionary special use permit.

The LUC agreed with the neighbors, concluding that the overnight camping project could not be approved by way of a special use permit, but that there must be a change in the zoning in order to allow it. By expressly prohibiting "overnight camping," the legislature had, in effect, already made the determination that overnight camping was not an unusual and reasonable use. Thus, no special use permit.

The Foundation appealed to a state trial court under the Administrative Procedures Act. It argued that the special use permit statute doesn't expressly preclude asking for an exception for uses prohibited by the zoning, and moreover, that Mahahulepu case held that doing so is just fine. The trial court bought the Foundation's argument and reversed the Land Use Commission.

Next stop, the Hawaii Intermediate Court of Appeals, which seemed to go both ways on the issues:

The ICA concluded it was bound by Mahaʻulepu, making the LUC’s decision contradicting Mahaʻulepu palpably erroneous. However, the ICA observed that the specific exclusion of overnight camps should control over the general availability of special permits in keeping with canons of statutory construction and furthering the statutory scheme.

Slip op. at 11.

Majority: The Statute Bars Overnight Camping, And That's That

Final stop, discretionary review by the Hawaii Supreme Court. There, a three-Justice majority (Nakayama, Wilson, Eddins) overruled the Mahahulepu case, and concluded that no, you cannot ask for a special use permit if the use you are seeking is expressly prohibited in the zoning statute:

HRS §§ 205-4.5(a)(6) and 205-6 are clear: the “public and private open area types of recreational uses” of “dragstrips, airports, drive-in theaters, golf courses, golf driving ranges, country clubs, and overnight camps” are not permitted on class A and B agricultural land, and cannot be permitted by special use permit.

Slip op. at 19-20 (footnote omitted).

Relying on statutory text, legislative history, and the canon of statutory construction that the specific controls over the general, the majority concluded that the point of chapter 205 is the protection and preservation of agricultural lands, and allowing a use to be made of agricultural land that is expressly prohibited by the zoning statute would not "promote the effectiveness and objectives of this chapter" as the special use permit statute requires. Slip op. at 18.

Having concluded that a special use permit isn't the way one might ask to establish an overnight campground on agricultural land, the majority held that the only way for the Foundation to get its overnight camping project approved would be to seek a "boundary amendment" (aka zoning change) to change the zoning from Agricultural "to one where recreational overnight camps are permitted." Slip op. at 21.

As for Mahahulepu? Overruled. That decision was the product of "flawed" reasoning (that case held that golf courses, another use expressly prohibited by the statute on Agricultural land, could be approved by way of a special use permit), and "failed to engage with the plain language of [the statute] prohibiting certain uses[.]" Slip op. at 22.

Dissent: The Statute Prohibits "Recreational" Uses, Which This Isn't

Two Justices (Chief Justice Recktenwald and Justice McKenna) saw it differently. Stare decisis cautions against lightly overruling cases that are only 30 years old, "[w]hether or not we agree with its reasoning[.]" Dissent at 2. After all, the legislature has had ample time to supersede Mahahulepu, but it hasn't done so.

More interestingly, the dissenters did not view the proposal for an overnight homeless campground as a "recreational use" included in the statute's express prohibition. Dissent at 9-10 ("An overnight campground for unsheltered persons is not a 'recreational' use."). Thus, at least that part of the project might be subject to approval on Agricultural land, because the statute only bars "recreational uses" (and then lists out examples, including overnight camping. The dissenters also were troubled by the Land Use Commission barring the Foundation from intervening in the declaratory ruling process initiated by the neighbors, "some of whom asserted 'not in my backyard' concerns. Dissent at 14-15 (footnote omitted).

Some Thoughts On Bright Lines and Ad Hoccery

Overall, this one isn't terribly surprising, given the Hawaii Supreme Court's wanting to keep a tight rein on land use issues, and its record of reading exceptions to the court's view of the meaning of statutes and ordinances very narrowly. The court, for example, falls squarely in the "narrow" approach to variances.

And we have to agree more with the majority on this one, but for slightly different reasons. We don't really focus on the statutory interpretation as the majority reasoned (after all, it seems you might read the statute both as the majority and as the dissenters did). Instead, we see this one as a push in the correct direction on a larger-scope issue. That being what we see as a trend in land use regulation to paint with a very broad brush in a statute or ordinance, and then rely on administrative or agency officials to exercise discretion to craft ad hoc exceptions. 

To us, this is a bad trend. The problem with "ban use X by law, but allow a discretionary process that might allow use X" is that it shifts the locus of land use regulation from elected officials and legislative judgments to discretionary administrative determinations made by unelected officials (aka bureaucrats). It also seems to favor old-hand insiders who know how to play the system, legally or otherwise. It might not matter whether you can read the law, but it does matter who you know at the Planning Commission or the Land Use Commission.

Bear with us while we play this out. Let's say the legislature has decided to prohibit certain uses in a certain zone and writes the statute or the ordinance that way. Landowners may not like the restrictions because, well, they are restrictions on their use of their land, but at least having a clear line about what is allowed and what isn't fixes a position to which property owners can react and plan. But let's also say that the legislature also includes in the law that in specific cases, an administrative official has the discretion to effectively overrule the legislature's judgment and permit a use that is expressly prohibited. This leaves what should be legislative judgments up to the discretion of nonlegislative officials. 

What's wrong with that, you ask? After all, as noted at the start of this post, one size does not fit all and shouldn't the law itself account for situations in the grey areas that cannot be accounted for when a legislature regulates property? Don't we want to provide landowners with the chance of making a certain use of their property even though a zoning ordinance or statute prohibits it? Flexibility!

It's All Discretionary, Son

In our view, the "everything is discretionary" approach is a recipe for administrative gamesmanship, and runs counter to the idea that to be a valid exercise of police powers, land use regulation should be comprehensive and part of a bigger plan. Maybe more importantly, this type of scheme not only makes arbitrary decisions more likely, it allows government to create "permit purgatories" where property owners are sent to wither on the vine, especially where the legislatively-adopted regulation bars all uses.

In those cases, instead of having to face the takings music for a regulation that prohibits all economic uses, the government gets off the hook if it can point a court to the mere possibility that it might waive, overlook, or vary the restriction. And once a court hears from the government that there is some theoretical possibility that the use prohibited by the statute or ordinance might be allowed if only the property owner asked the right person in the right way (and that person makes a response that can be deemed "final") the judge's interest switch turns to "off" and the court can confidently kick the case for being unripe. We are referring of course to the "final decision" requirement of Williamson County. Because when there is any discretion in the process, courts are loathe to evaluate takings claims on the merits, on the theory that the government might -- just might! -- exercise its discretion and allow what its own statutes or ordinances plainly and expressly prohibit.

Discretion is Often Designed for Permit Purgatory And Takings Avoidance

Perhaps the most glaring example of how this dynamic enables administrative and judicial gamesmanship is California Public Resources Code § 30010, which has been interpreted as providing both the California Coastal Commission and local governments the complete and total discretion to overrule or ignore any restrictive regulation in the coastal zone, if the CCC or a local government can be convinced by the property owner that to apply the statute or ordinance as written would result in a taking. And believe us, the California Coastal Act and local coastal ordinances are full of restrictions that prohibit any and all economically-beneficial uses. But because section 30010 seems to leave open the possibility that these restrictions may be waived ad hoc (if only the property owner asked the right person the right way), courts never get to the merits. "Just ask for an exemption," they counsel landowners, ignoring protestations that these discretionary approvals are more imaginary than a real possibility, and that assembling a request to exercise discretion can be eye-wateringly expensive.

You don't have to be in the land use game all that long to see the evil genius in this, at least the way the courts read this statute: not only does this put the owner into permit purgatory where government is incentivized to avoid taking a concrete position about what its restrictions allow and what they prohibit, this procedure forces a property owner to present her constitutional takings claims to the very government that she claims is violating her rights, upon pain of a 12(b)(1) or 12(b)(6) dismissal if she files a takings lawsuit before the government responds. Yet the Supreme Court says it does not require exhaustion of administrative remedies in takings cases.

What About Euclid?

But these discretionary purgatories take the foundation of the constitutionality of zoning as expressed in Euclid -- the assumption that land use regulations are constitutional because they are the product of big picture thinking and a comprehensive plan -- and inverts it so that every decision is discretionary and case-by-case. The reality is that these "exceptions" are granted rarely, and the process isn't so much designed to get to a "yes" or "no" on what uses might be allowed on a particular parcel, but are often there more as a "takings avoidance" tool like section 30010, where property owners are forced into an open-ended maze and the government does everything it can to strenuously avoid making any decision. That way, the owner remains stuck in the discretionary maze, never to receive an answer, until the owner throws in the towel, after bleeding out financially or spiritually.

This is rational land use planning?

It isn't, but most federal courts have accepted it as the way the land regulation game is played. So kudos Hawaii Supreme Court, for holding the legislature to what it said in the statute, and not allowing unelected members of a county planning commission or the state Land Use Commission decide that in this case, the statute is meaningless.

Hoomoana Foundation v. Land Use Comm'n, No. SCWC-17-0000181 (Haw. Mar. 10, 2023)

Ice Ice Baby: A Report From The 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-4, 2023, Austin

We were eagerly anticipating 40th American Law Institute-CLE Eminent Domain and Land Valuation Litigation Conference. The 2022 Conference in Scottsdale was one of the first meetings where everyone was back in-person (and was a smashing success), but that conference was early in the game so not everyone could or would attend. But in the past year most of us got back to some semblance of "normal," and the turnout promised to be good.

We had record registrations: with over 300 attendees, faculty, and staff signed up, things were shaping up.

Plus, we were headed to Austin, Texas. The last time we held the Conference there in 2016, we loved it so much it has been in-demand for a return visit. And this year is the debut Conference for some new planning co-chairs for both the main tracks as well as the "Condemnation 101" tracks, so the buzz for the 2023 Austin Conference was building.

But then the weather reminded us that Mother Nature is often the boss. 

Very Icy Austin on Wednesday (Conference Eve).

On Tuesday, one day before the Conference was to get underway, the 2023 Central Texas Ice Storm blew in and things were gonna get (as they say) "challenging."

Austin Airport effectively shut down with few flights in or out. Planes and cancellations stacked up nationwide. And even for those nearby, slick icy roads, and seemingly everything was closed, from gas stations to hotels to restaurants. Widespread power outages. 

Were we ready with Plan B if people couldn't get on-site? Read on.

Unless you are already here or are driving,
you ain't getting to Austin via AUS any time soon, pard.

Even flying from sunny California was a problem.

Ticket agent: Austin flight cancelled. How about flying to Houston and then driving?

Me: Sure, that'll work. Just get me to Texas and I'll figure it out from there.

Improvise, adapt, overcome: planes, trains, and automobiles (and car rentals, and long-distance rideshares, and four-layovers-from-Boise flights). Jacksonville to Austin via Chicago and Nashville.

Although those of us who made it to Austin were receiving widespread reports of people delayed and rerouted, we had only a handful who said they would not be pressing forward to get here. 

When this is what greets you when you arrive
at your conference site...uh oh.

And yes, Austin was cold and icy. Most things shuttered and widespread loss of power. But the Conference venue was up and running, and throughout the day on Wednesday, faculty, staff, and attendees were showing up. Trickling in, but showing up or on the way.

When this is what you see at the United Airlines
luggage counter, you ask yourself:
Can I make my presentation in a t-shirt and sweats? (Yes!)

We had confidence, and were prepared
for everyone to get to Austin.

So the aforementioned Plan B went into effect. Agenda items shuffled from tomorrow to today because the speaker is here, now. One speaker in the room, one speaker remote. Our audience is full of experts ... say, Billy can you pinch-hit on this panel? Sure. One speaker remoting in from his (unexpected) hotel room in Phoenix and presenting, before he went to the airport in the afternoon to continue on to Austin.

And so forth. Our long-time ALI-CLE Program Attorney, Amy Weinberg (who was delayed out of Philadelphia) was working furiously behind the scenes doing a lot of juggling, updating, texting and calling, and making alternative arrangements. And the tech team from ALI-CLE was preparing for overload if needed.

Plan A: continue to set the room up, assuming everyone is here or on the
way, and we'll have most or all of our people in the room.

Our Planning Chairs were ready, even if not
all of us were actually there (yet).

Plan B: the ALI-CLE technical crew was prepared to livestream
and record the Conference if the weather made travel
to Austin impossible or infeasible.

The tech command center.

Before we go on, a big thank you to our generous sponsors.
Without your support, this Conference would not be as
good as it is, year after year.

We're underway, with a pretty good crowd.

Thursday morning, 9:00 a.m., and we're looking not too bad. A fair number of folks have pressed forward despite the weather and travel disruptions and are in the room. More report they are not tapping out, and are pressing onwards.

We have more viewers remote than we originally anticipated, but the tech is holding up.

Over the next couple of days, our lawyers, judges, legal scholars, appraisers, law students, right-of-way agents, relocation experts, property owners, and other related professionals made their way to Austin.

The fact that folks who were experiencing some rather dramatic travel difficulties and delays (ask Jack about his late night Uber from Houston airport to Austin, or how our west coasters got re-routed all over creation), didn't quit but were determined to get to Austin told us something about why this Conference has been so successful over the decades.

It's more than great programming from the nation's experts. The Conference is also an essential venue to get acquainted with new colleagues and welcome them to the Dirt Law Bar, reconnect with long-time friends, and have a bit of fun together.

Most of the Conference attendees eventually made it, and very few (reasonably) threw in the towel and turned around for home. This was the 40th edition of the Conference, and we really know why it is one of the most-established and successful conferences in the ALI-CLE stable of programs. This year's experience really drove home why we come, and why our attendees and faculty are so dedicated and committed, despite the sacrifices we make to attend or to present. 

Hybrid: Pacific Legal Foundation's John Groen
remoting in while en-route via Phoenix, and
Baylor lawprof Jessica Asbridge on
"Everything Old is New Again: Why Today’s Practitioners
Need to Understand the Original Meaning of the
Takings and Just Compensation Clauses."


The "Condemnation 101" track was wildly popular
both with new members of the Eminent Domain Bar,
as well as old hands. Standing room only throughout the day.

We also had reports from the field that the remote viewing
was going well. Here's how we looked in the
mountains of North Carolina.

Let's not forget the substance of the Conference.
Lots of practical learning. Here's Hawaii's Mark Murakami
and Virginia's Steve Clarke on "Avoiding the Real Jeopardy:  
Structuring Eminent Domain Settlements."
And no, two-time Jeopardy! champion Steve did not
give answers in the form of a question.

Weather throughout Wednesday and Thursday was icy and nasty,
but towards the end of Thursday seemed to be clearing up.

Consequently, the view from the podium looked better and better
with more showing up and more reporting they were nearly there.

The programming at the Conference is traditionally
a mix of practical subjects and the more theoretical.
Here's one of the highlight latter programs,
Alan Ackerman (Michigan), Matthew Ackerman (also Michigan),
and Steve Davis (Missouri) on "What Does the Supreme Court
Mean When it Says Just Compensation is “Self-Executing?"

There's an ethics program, naturally, for those of us in jurisdictions
with mandatory CLE requirements. But we try and not do "typical"
(i.e., boring) ethics programs. Here's Sarah Kellner (Colorado) and
Shane Rayman (Ontario, CN) on "Ethics: Building Your Practice
by Mentoring the Next Generation of Eminent Domain Professionals."

An example of our practice-oriented programming: Tony DellaPelle
(New Jersey), Bernadette Duran-Brown (California), 
and Andrew Lines (Illinois) on "Preparing Your Expert
Witness to Shine in Virtual Proceedings:
Tools and Tips For Trial Lawyers." 

Andrew actually pretended he was far, far away for his "deposition"
when he was in fact one floor up from the Conference room.
Way to go all-in.

Thanks to our generous sponsors, we were able to avoid Austin's
icy roads and have our Mickelthwait barbecue
brought in for lunch. Was it well-received? See for yourself. Line
was through the lobby and nearly out the front door.

Thank you to Texas Supreme Court Justice Jimmy Blacklock
for speaking on "Developing Property Right Issues in Texas,
Questions and Answers with Justice Jimmy Blacklock"
(interviewed by Justin Hodge (Texas)

It was not an echo-chamber either. Here, in a hotly-debated
session, Jeff Redfern (Virginia), Steve Silva (Nevada), and
Lawprof Emilio Longoria (St Mary's Law, Texas)
debate "When the SWAT Team Comes (No) Knocking:
Police Power Takings."

Jeff, Steve, and Prof Longoria's session got everyone's blood pumping.

It wasn't all serious, and we had a bit of fun.
Like this after-hours live edition of the Eminent Domain & Right of Way
Clubhouse with Beth Smith (Wisconsin), Patrick McAllister (Indiana)
and some dude who was having a post-CLE session beer.

Some of our faculty are more formal and like to speak
standing at the lectern. Here, Pacific Legal Foundation's Jon Houghton
(New Jersey) and Ben Stormes (Montana) on
"Avoiding Pitfalls When Trying a Penn Central Case:
Lessons From the Takings Trenches."

Others are less formal, and speak while sitting
(and wildly gesticulating to make sure you are paying attention).
Kristen Renfro (California), and some guy on
"Your Regulatory Takings Case is in Federal Court – Now What?"

By Friday morning, the Austin weather was looking up. Really up.
And we nearly had everyone in the room.
By hook or by crook, most everyone was there.

By Friday were were pretty much back to normal.
Nearly all faculty and all attendees in the room.
And thus we turned it over to our Saturday morning stalwarts,
starting with Jim Burling, here speaking about "The Many Theories of
Property - Do They Matter in Court?" (and Pufendorf)

No one wanted to miss Michael Berger's "Regulatory Takings Update"
on Saturday morning either.

When you can fill this many seats at a CLE conference on a
Saturday morning after two full days of programming,
you know your speakers are the
right ones (thank you Jim and Michael).

After Jim and Michael did their thing, we held our "National Forum,"
a moderated "open-mic" session where Conference attendees
take to the podium and speak about their case or issue,
or crowdsource a question. Here, Pacific Legal
Foundation's Kady Valois, speaking about
our firm's latest takings cert grant.

We were happy to announce that the 41st ALI-CLE Eminent Domain &
Land Valuation Litigation Conference will be held February 1-3, 2024,
at the JW Marriott in New Orleans.
Save the date!

Ivy Cadle (Georgia - Go Dawgs!) is already planning his trip to
#EminentDomain 2024 in New Orleans.
See you there, Ivy.

With the programming wrapped up, it was time for farewells
and thank yous. Here, four of our law students from William and Mary Law,
who took the time out of their schedules to make their way to
Austin for some real-world learning and networking.
Well done, new colleagues!

Even after the proceedings closed, there was more work to be done.
Here, the ALI-CLE Tech Team breaks it down, after successfully
guiding us through the past four days. They are a large part of the
reason why this Conference works so well (plus, they make the
speakers look really good on camera).

To those who joined us - in-person or on-line, thank you. This conference reminded us of why this program is so successful, and why we all return year-after-year.

To those of you who didn't (or couldn't) join us, here's what you missed. You need to remedy that, and come join us next year in New Orleans...

We'll see you in New Orleans for
#EminentDomain2024!
(Want to keep the conversation going in the
interim? Join the ALI-CLE Eminent Domain Conference
page on LinkedIn.)

We're Remote, So It's Easy To Join Us For The 36th Annual Land Use Institute

Land users: come join us online for the 36th Annual Land Use Institute. Yes, the venerable program is back again, with the usual line up of dirt law experts covering all you need to know and bringing you up to speed on the latest. Here's the description of the program:

This Annual Land Use Institute program is designed for attorneys, professional planners, and government officials involved in land use planning, zoning, permitting, property development, conservation and environmental protection, and related litigation. It not only addresses and analyzes the state-of-the-art efforts by government to manage land use and development, but also presents the key issues faced by property owners and developers in obtaining necessary governmental approvals.

This outstanding program features:

• Preeminent faculty of practitioners and academics who provide nationwide perspective without losing sight of state-specific issues.
• Critical review and analysis of the most important new cases;
• Practice-oriented discussion of basics and “hot” topics;
• Guidance on routine and complex procedural issues; and
• Substantial high-quality and well-researched course materials.

Topic and speaker details in the brochure. A very modest registration (law students are free!).

Find out more here. And come join us. We'll be speaking next week Tuesday (Feb. 14, 2023) on "The Use of Eminent Domain for Redevelopment & Economic Development Projects."

LAND USE INSTITUTE - 36th Annual Land Use Conference Program

(Nearly) Last Call: There's Still Time To Join Us For The 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-4, Austin

We really want you there...

One (nearly) last reminder that there's still time to register for your space at the 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, February 1-4, 2023, in Austin. In the past several years, we have sold out due to the conference room capacity and the conference hotel block. But there's still space, although we are nearly full. So register now - don't delay any further! 

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

• Everything Old is New Again: Why Today’s Practitioners Need to Understand the Original Meaning of the Takings and Just Compensation Clauses
  
• When the SWAT Team Comes (No) Knocking: Police Power Takings

• Private Utility Takeovers – Lessons From a 67 Day Trial

• "Contraband": How Property Rights Helped Pave the Way for Civil Rights

• Valuation Issues When Billboards and Signs are Condemned

• Setting Client Expectations and Identifying Red Flags

• Preparing Your Expert Witness to Shine in Virtual Proceedings: Tools and Tips for Trial Lawyers

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

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

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

• the Condemnation 101 program (a one-day course for those new to the practice, or for experienced practitioners wanting a refresher)
• ...and much more!

To register, go here.

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

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

Montana: Owning The Land Is Enough To Plead A Property Interest: Property Means "Rights Inherent In Ownership," Not Extent Of Govt Discretion

The Supreme Court of Montana's opinion in Tai Tam, LLC v. Missoula County, No. DA21-0660 (Nov. 15, 2022) starts off like a somewhat typical land use dispute turned into a constitutional fight. The property owner sought subdivision approvals for a 28-acre parcel to allow residential development, and the County denied the applications because "the proposal failure to adequately mitigate the loss of agricultural soils." Slip op. at 2.(Oh, and "bird habitat." Slip op. at 3.)

Next, the complaint, alleging some of the usual claims: due process, equal protection, and takings, and a statutory claim under Montana law. The trial court dismissed all claims: the statutory claims for failure to get in before the 30-day limitations period, and the constitutional property claims based on the court's conclusion that the plaintiff lacked a "property" interest.

We'll let you read the part of the opinion in which the court reversed the dismissal of the statutory claim for not filing within 30 days. Short story: the 30-day limitations period doesn't apply to the type of statutory damage claim that the plaintiff brought. See slip op. at 8 ("Ultimately, we find the plain language of [the statute] is not ambiguous and does not contain a 30-day statute of limitations.").

Now on to the good stuff - the property interest. The trial court concluded that the plaintiff did not possess a property interest in a subdivision application. Or maybe more precisely, in subdivision approval. The court also rejected the notion that the plaintiff owned the land, and that was sufficient to plead a property interest.

The Supreme Court had a different view. It started with the notion that on a motion to dismiss, every fact is deemed true and all inferences cut in the plaintiff's favor. Addressing the "threshold" question of whether the plaintiff owns property, the court held that the plaintiff's "ownership of McCauley Meadows [the land] is sufficient to state a protected property interest and bring § 1983 claims against the Board in this case." Slip op. at 13.

Rather than apply this interest to Tai Tam’s § 1983 claims, the District Court took Tai Tam’s concession it did not have a protected property interest in the subdivision application and ended its inquiry there. This was in error, as the District Court was required to address whether Tai Tam’s rights inherent in its ownership of McCauley Meadows were violated by the Board’s actions, and inactions, in this case.

Slip op. at 14.

This is significant because it rejects the usual sleight-of-law way that many courts define the property in these type of challenges. Often, courts will define the property as the thing which the plaintiff claims the government wrongly denied. (Here, that would be a grant of the subdivision.) But if you define the property as the very action being challenged -- then the owner's property is shaped almost exclusively by the extent of the regulator's discretion, and not by the property owner's rights. Where the focus is on the scope of the government's discretion to limit property uses and not on the owner's inherent rights, it shouldn't be too surprising that most of the time the courts conclude "no property."

Not here. 

Having concluded that the complaint adequately pleaded a property interest, the court also held that the due process/1983 claim survived because the complaint alleged the County had not provided adequate notice and an opportunity to be heard by denying subdivision approval due to lack of protection for ecological concerns, despite never having adopted any regulations requiring protection of ecological concerns. Slip op. at 17 ("Specifically, Tai Tam asserts the Board has “implemented policies to protect viewsheds, protect generic ecologic values, and protect adjacent property owners, despite having no such adopted regulations.”). In short, it may violate due process if the government is implementing policies "which are not based on any adopted regulations at all." Id.

And finally, the takings claim. The court concluded that as an "ad hoc" claim, the Penn Central takings claim was adequately pleaded:

Taking the allegations of Tai Tam’s Complaint as true, which we must at this stage in the proceedings, Barthel, ¶ 9, we find Tai Tam has sufficiently pled a takings claim in this case. According to the Complaint, Tai Tam alleges the Board is applying rules and regulations to the development of McCauley Meadows which have not been adopted with proper notice and opportunity to be heard and is unfairly requiring Tai Tam to shoulder the burden of preserving agricultural lands and viewsheds which was not imposed on other landowners. Whether these burdens are so unfair that they require compensation is, again, a question for another day.

Slip op. at 18.

The majority rejected the dissent's view that because the County retained discretion to deny the subdivision (but wait, we thought subdivision approvals were ministerial?), there could never be a takings claim based on a denial of same. The dissent's reasoning is one based on its conclusion that the denial of a discretionary permit "does not sufficiently interfere with reasonable investment-backed expectations or economic value under Penn Central." Slip op. at 18-19. But that, the majority concluded, is a judgment reserved for the trier of fact, not as a matter of law. Penn Central is an ad hoc inquiry. Check out pages 18-20 for more details of the majority's reasoning (it is definitely worth your time to do so).

Tai Tam, LLC v. Missoula County, No. DA 21-0660 (Montana Nov. 15, 2022)

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

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

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

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

• Private Utility Takeovers – Lessons From a 67 Day Trial

• Valuation Issues When Billboards and Signs are Condemned

• Setting Client Expectations and Identifying Red Flags

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

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

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

• ...and much more!

To register, go here.

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

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

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

New Takings Cert Petition: Can An Agency Decide Constitutionality Of Delegation Of Federal Eminent Domain Power?

Here's a recently-filed cert petition in a pipeline case. This one asks whether an agency -- here, FERC -- has primary administrative jurisdiction over a facial challenge to Congress' delegation of federal eminent domain authority to a private party. 

Here are the Questions Presented:

Whether a facial challenge to Congress’s delegation of eminent domain power to private parties is properly filed in district court, as this Court held in PennEast Pipeline Co. v. New Jersey, 141 S. Ct. 2244 (2021), or with FERC, which has admitted it has no jurisdiction to adjudicate the constitutionality of this delegation.

Whether a facial challenge to Congress’s overly broad delegation of legislative power to FERC is properly filed in district court or with FERC, which has admitted it has no jurisdiction to adjudicate the constitutionality of this delegation.

Whether a facial challenge to Congress’s delegation of eminent domain power to FERC is properly filed in district court or with FERC, which has admitted it has no jurisdiction to adjudicate the constitutionality of this delegation.

We shall follow along, naturally. Or you can shadow the docket.

Petition for Writ of Certiorari, Bohon v. Fed. Energy Reg. Comm'n, No. 22-256 (Sep. 19, 2022)

DC Circuit OK's Pipeline That's Already Built

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

In City of Oberlin v. FERC, No. 20-1492 (July 8, 2022), the U.S. Court of Appeals for the D.C. Circuit held FERC adequately explained why, in granting a certificate of public convenience, it relied in part on evidence that some of the natural gas in the pipeline was slated to go to Canada. 

Earlier, the court held FERC had not explained why well enough (or at all), and sent the case back down to give FERC the chance to do so. The handwriting was on the wall in the remand order because the court pointedly did not vacate FERC's order granting the certificate: "we remand without vacatur, because we find it plausible that the Commission will be able to supply the explanations required, and vacatur of the Commission's orders would be quite disruptive, as the Nexus pipeline is currently operational."

If you build it, they will approve.

So full steam ahead, pipeline, while FERC gets its ducks in a row.

This is one of those Natural Gas Act pipeline cases, involving FERC's approval of a certificate of public convenience. That, as you know, is the trigger to a private pipeline exercising the NGA's delegated power of eminent domain, because it effectively settles the question of whether the takings are for a public use or purpose. Also, as you know, an agency's decision is, generally speaking, subject to a highly deferential judicial standard of review under the Admin Procedures Act, and a certificate may only be set aside if it is arbitrary and capricious.

Here, the city argued that FERC didn't do it right, and the certificate should be set aside. FERC concluded that the agreements the pipeline company already had made to distribute the gas to be transported was sufficient to support a determination of public use or purpose. But, the owners argued, a large percentage of that (42%) would be going to -- the horror! -- Canada, and FERC never reached any conclusion whether the remaining gas for distribution in the U.S. would support a finding of public use.

Perhaps not surprisingly in light of the D.C. Circuit's remand order, FERC "elaborated on its reasoning for considering the export precedent agreements in its decision to grant the certificate." Slip op. at 8. Even though some of the gas was headed to the Great White North, some gas was still in U.S. interstate commerce and not within a single state.

Was this "arbitrary and capricious" or "contrary to law" as the standard of review commanded? We'll give you one guess (no). See slip op. at 11-3. 

Let's skip to the Public Use analysis. "[T[he City maintains that FERC's crediting export precedent agreements as a benefit runs afoul of the Takings Clause because a pipeline shipping gas for export 'does not serve a public use.'" Slip op. at 15. Given the court's answer to the earlier question of whether FERC's reasons for granting the certificate of public convenience was not arbitrary and capricious, what do you think the court's answer was to the public use question?

The court upheld the taking, concluded that FERC's reasons were adequate, even if the evidence about exports was excluded. The pipeline "was needed to alleviate a bottleneck from the Appalachian Basin and to increase supply to Midwestern markets." Slip op. at 17-18. "FERC also explained that building a pipeline with excess capacity would enhance the pipeline grid for the future." Slip op. at 18.

The court rejected the city's other public use objections:

The City launches a few objections at FERC’s analysis, but none render the decision arbitrary and capricious. First, the City contends that FERC did not identify which pipelines FERC considered in determining that existing pipelines did not have enough capacity to transport the gas the Nexus Pipeline would move. But FERC identified the pipelines on remand in precisely the same manner it did in its initial order—by looking at “other pipeline compan[ies’] electronic bulletin boards.” Compare Remand Order P 27, with Certificate Order P 40 n.29. Even assuming that is insufficient, the City did not challenge this aspect of FERC’s order in Oberlin I and therefore cannot do so now. Nw. Ind. Tel. Co. v. FCC, 872 F.2d 465, 470 (D.C. Cir. 1989) (“It is elementary that where an argument could have been raised on an initial appeal, it is inappropriate to consider that argument on a second appeal following remand.”).

Second, the City complains FERC did not analyze a hypothetical pipeline specifically sized to transport 42% of the Nexus Project’s capacity. But given that FERC had analyzed a pipeline sized to transport 59% of the Nexus Project’s capacity, there was no need for FERC to start its analysis anew. FERC had already found that shrinking the project would barely reduce the amount of land that the project would require, and that excess capacity could reduce the costs and disruption from constructing additional pipelines in the future. Certificate Order PP 42–45. FERC’s determination that this reasoning applied to a pipeline sized for 42% of the Nexus Project’s capacity was reasonable.

Slip op. at 18 (footnote omitted).

City of Oberlin v. Fed. Energy Reg. Comm'n, No. 20-1492 (D.C. Cir. July 8, 2022)

New Cert Petition: Does Possibility Of Agency Regulation Restrict Property?

Here's the latest in a case we've been following from when the takings case was rejected by the Court of Federal Claims, and the dismissal affirmed by the Federal Circuit.

Yes, this is the "bump stock" takings case, and the Federal Circuit decision has now triggered a cert petition.

You remember that one. Petitioners owned "bump stocks" that apparently were legal at the time they acquired them. But later, the feds declared them illegal to own or possess, and the bump stock owners either turned theirs over to the government or destroyed them. Next up, a takings case: if getting bump stocks off the market is a good thing, the Armstrong principle compels compensation (the cost of public benefits should be distributed among the benefited public).

The CFC dismissed. We criticized the CFC's rationale that the reason the bump stock ban was not a taking was because it was a valid "police power" safety measure (putting aside for the moment that the feds don't have what you'd call a "police power" of course): the CFC "simply repeated the trope that the ban was a valid exercise of the government's regulatory power (which, we think was not really a question), and thus no taking." As we've noted before, this analysis is very unsatisfying. A takings claim like this doesn't challenge the validity of the ban, but instead says "if you are going to ban these things, the public needs to provide compensation."

The Federal Circuit took a different approach (and maybe went from bad to worse). It held that the bump stocks were not property because bump stocks were already regulated by the feds, who simply altered the ATF's interpretation of "machineguns" to include bump stocks when they were previously not covered (or at least it was not clear).

So even though the prior regs did not include bump stocks as "machineguns," bump stocks were subject to the regulations generally when the owners obtained them. Thus, the Federal Circuit concluded, the regulations limited the owner's rights.

Here's how the petition summarizes the issue:

This case raises fundamental questions about the interaction of the administrative state and the Fifth Amendment’s Takings Clause. Petitioners are owners and sellers of bump stocks. Petitioners acquired their bump stocks when their purchase, possession, and sale was unquestionably legal. After the Bureau of Alcohol, Tobacco and Firearms (ATF) promulgated a rule banning the possession of bump stocks—while affirming that prior to the effective date of the rule, the purchase, possession, and sale of them was legal—Petitioners complied with the rule and destroyed or surrendered their bump stocks. They then sought just compensation for the taking of their private property. The Federal Circuit rejected their Fifth Amendment claims, with a majority of the panel holding that there is an inherent restriction on title to any piece of personal property in America that is potentially subject to a federal agency’s general delegated legislative rulemaking authority.

The Federal Circuit’s holding raises fundamental questions about the nature of personal property in a nation in which nearly every object is subject to some general grant of legislative authority to an agency. By redefining the nature of title to personal property in a country dominated by grants of general regulatory authority to executive branch agencies, the Federal Circuit has removed a bedrock restraint on government power and eliminated a means of redress for citizens harmed by exercises of such power. If the Federal Circuit is right, then federal agencies can, with a stroke of a pen, outlaw not just the future sale but the mere private possession of cars that burn too much gas, or light bulbs deemed too inefficient, and so on—without paying a dime of compensation to their owners. The Federal Circuit’s holding thus presents questions of substantial importance that the courts below, as well as commentators in the property field, have recognized as doctrinally incoherent. And the decision conflicts with this court’s prior holdings applying the Takings Clause to personal property in Horne v. Department of Agriculture, 576 U.S. 350 (2015), and emphasizing the constitutional significance of bans on the mere possession of personal property in Andrus v. Allard, 444 U.S. 51 (1979).

Under the Federal Circuit’s decision, citizens and merchants alike are left with no recourse for the forced seizure and destruction of millions of dollars’ worth of lawfully-acquired property. This Court’s review is warranted.

Pet. 3-4.

Here's the Question Presented:

For purposes of the Fifth Amendment’s Taking Clause, does a delegation of general legislative rule-making authority to an agency constitute an inherent restraint on title to any personal property that could be subsequently subjected to a prospective legislative rule, rendering the physical taking of the property non-redressable?

Follow along on the Court's docket here.

Petition for a Writ of Certiorari, McCutchen v. United States, No. ____ (July 5, 2022)

Here's The Full Speaker And Topic List For The Brigham-Kanner Property Rights Conference (Sep 29-30, 2022)

By now, you know that the 19th Brigham-Kanner Property Rights Conference is set for September 29-30, 2022, at the William and Mary Law School in Williamsburg, Virginia (register here - space is limited - fee ranges from free to $195 - a bargain!). And you know that our colleague Jim Burling is this year's B-K Prize winner.

But now you know who is speaking at the Conference, and the topics: here's the full agenda. The list of speakers is too long to list here but check out these topics:

• Panel 1: The Importance of Property Rights: A Tribute to James S. Burling
• Panel 2: Reshaping the Framework Protecting Property Under the Roberts Court (that's the panel we're speaking on)
  
• Roundtable: Emerging Issues in Takings and Property Rights Litigation
• Panel 3: Choosing A Property Regime
• Panel 4: Property Rights in Times of Scarcity and Crisis

Who can resist these subjects? Plan on joining join us in September.

2022 Brigham-Kanner Property Rights Conference Speaker Panels

Cal App Channels Dickens' Mr. Bumble: Bumblebees Are Fish Under Cal's Endangered Species Act

A "fish" need not be "connected to a marine habitat" after all.

You remember that classic lawyer joke?

A company is on the hunt for a new CEO and decides to undertake the search from within existing management. The hiring committee schedules interviews with the company engineer, the company accountant, and the company lawyer. The committee calls each candidate into the boardroom and asks a single question: "what is two-plus-two?"

First up, the engineer. After doing calculations on a slide rule [this is an older joke, you see] and scratching figures and equations with a pencil and paper, the engineer proclaims, "What is two-plus-two? I can say with a 99% level of certainty that two-plus-two is 4, out to the fourth decimal place."

Same question to the accountant, who after consulting the actuarial tables, the IRS's schedules for mileage reimbursement, and the latest interest rates, responds, "What is two-plus-two? Two-plus-two is 4, subject to a 5% discount for net-30 payment."

Finally, the company lawyer. Checking around to make sure no outsider is within earshot, he closes the boardroom doors and walks to the head of the table and whispers:

"What is two-plus-two? ... what do you want it to be?"

All that is prelude to the California Court of Appeal's opinion in Almond Alliance of California v. Fish & Game Comm'n, No. C093542 (May 31, 2022), which reminds us of the joke's punchline. Because in that case, the court held that bumblebees qualify as "fish" under the California Endangered Species Act.

You read that right, folks: bees = fish. What do you want 'em to be?

Now before you start writing us to point out that the court wasn't smoking medical cannabis and didn't just pull this one out of thin air (it was interpreting the statute's definition of "fish," which, we must acknowledge, is very poorly drafted because it includes "invertebrates" within the definition of "fish" -- and yes, bees do not have backbones), please keep in mind that the court wasn't required to check common sense at the door either. 

So here's the setup: the Fish (ha!) & Game Commission designated four species of bumblebee (the Crotch bumble bee, the Franklin bumble bee, the Suckley cuckoo bumble bee, and the Western bumble bee, if you were wondering) as endangered. The California statute can be employed to designate "[c]ertain species of fish, wildlife, and plants" as either endangered or threatened. Bees ain't "wildlife" or "plants," so to be covered by California's Endangered Species Act, they must be "fish," right? And the statute defines "fish" as "a wild fish, mollusk, crustacean, invertebrate, amphibian, or part, spawn, or ovum of any of those animals." Cal. Fish & Game Code § 45.

But bees aren't fish, are they?

Almond growers and others certainly didn't think so, and challenged the designation in court, arguing that although bees are indeed invertebrates, they certainly are not fish. Guess what? - the trial court agreed that the inclusion of "invertebrates" in the definition of "fish" includes only, you know, "invertebrates connected to a marine habitat, not insects such as bumble bees." Slip op. at 17.

The Court of Appeal was having none of this. Pick up the opinion at page 19 if you want to really savor the court's reasoning. See slip op. at 20 ("Our task is to interpret the term fish as used in section 2062, 2067, and 2068 of the Act."). Lovers of the canons of statutory interpretation will appreciate this part of the opinion, as the court somehow navigates the rocky shoals of that method of analysis. Those of you who, by contrast, may believe that the canons of construction are mostly bunk -- tools that can be manipulated in any number of ways to justify post hoc any desired reading of a statute -- will likely conclude that this is "Exhibit A" in your indictment of Professor Sutherland.

And aren't bees ... insects? That was the conclusion of the California Attorney General, who opined that insects are ineligible for listing under the statute because insects are not included in the covered species. But the court concluded that this was "less persuasive," even though AG opinions are "entitled to great weight." Slip op. at 24. Let's just say that the court concluded that indeed "fish" includes "invertebrates," and indeed bees don't have no backbones.

"Connection to marine habitat" got nothing to do with being a fish, held the court of appeal. Indeed, "any" invertebrate will do: Ladybugs? Yes! Scorpions? You bet! Black widow spiders? Naturally. Banana slugs. Of course! Butterflies? Duh.

A fish.

Now yes, we're having a bit of fun at the expense of what to the legally-untrained eye must seem like a conclusion worthy of Twitter mockery (and Twitter analysis). A bumblebee is a fish? Come on, man! We expertly trained lawyers (unlike the great unwashed) know that context is everything and the court wasn't really concluding that bees are fish in the real world, only in the world of the California Endangered Species Act:

Although the term fish is colloquially and commonly understood to refer to aquatic species, the term of art employed by the Legislature in the definition of fish in section 45 is not so limited.

Slip op. at 2.

But seriously - don't you think that if the lege had meant to include bees and other insects in the statute's scope, it might have -- just maybe -- thought to include the term "insect?" And that to shoehorn bees into the definition of fish -- which every fiber of our being screams out is just plain goofy -- may also have the unfortunate consequence of lessening the majesty of the law in the eyes of anyone paying attention? And in that vein, we end with a quote from Dickens' coincidentally-named Mr. Bumble, quoted by no less a light than a current Supreme Court Justice:

An ordinary person of common sense would react to the Court’s decision the way Mr. Bumble famously responded when told about a legal rule that did not comport with the reality of everyday life. If that is the law, he exclaimed, "the law is a ass—a idiot." C. Dickens, Oliver Twist 277 (1867).

Collins v. Virginia, 584 U.S. ___ (2018) (Alito, J., dissenting) (cleaned up).

So there it is: a court just said a bee is a fish. With a straight face.

What do you want it to be? 

Almond Alliance of California v. Fish & Game Comm'n, No. C093542 (Cal. Ct. App. May 31, 2022)

"Something is very wrong with this picture." Cal Ct App Calls Out CEQA ("fearsome weapon"), Tiburon's "official hostility," And "combined animus of two levels of local government"

Anyone who reads this blog regularly knows Tiburon, California, even if you've never stepped foot there. Yes, that Tiburon. Well, the beat goes on: the Agins litigation wasn't the only time that the town and its residents combined forces to try and draw up the drawbridge and prevent the building of more homes in this very exclusive and chichi Marin County waterfront and hilltop community with commanding multi-million dollar views of San Francisco and the Bay. 

For the latest example, read the California Court of Appeal's opinion in Tiburon Open Space Committee v. County of Marin, No. A159860 (May 12, 2022). It's 110 pages, but don't let that discourage you (it's not necessary to dig into the details, unless you are a true California Environmental Quality Act nerd). The facts alone are hair-raising. But on the other hand, the story may be an old story to you experienced land use hands, who know that your result horizon in the development game can be a long one (buy us a beer at the next ALI-CLE Conference, and I'll regale you with the story of our own land use/takings fight that needed over two decades to resolve).

In this case, the "old story" is a really old story (for our story begins in 1974). You don't remember 1974? Watergate was in full swing, ABBA wins Eurovision, we were freaking out about the price of gas because it was 53¢ a gallon!, the war in Vietnam was winding down but still ongoing, the Cleveland Indians had Ten Cent Beer Night (with predictable results), and Muhammad Ali and George Forman were duking it out in Zaire.

Well that's when the owner of vacant land on the edge of the Town of Tiburon in unincorporated Marin County thought about building some homes. The parcel is 110 acres, and even under the then-zoning's density requirements, that meant 300 residences could be built. But the County rezoned the land to limit the homes to at most 34, and barred development of portions of the property entirely (the "Ridge" and "Upland Greenbelt" areas). Federal regulatory takings lawsuit followed. 

In '76, the landowner and the County settled the federal lawsuit by way of a stipulated judgment. The court ordered that the owner could develop 43 single-family residences on 1/2-acre lots, and that some development could take place in the Ridge and Upland Greenbelt areas. The owner dedicated half of the land to the County as open space and for trail use, and the County determined that 43 homes were consistent with the general plan. Because the owner had not yet produced specific plans or undertaken environmental review, the judgment still required the owner to submit these items for County consideration.

Flash forward years. Decades, actually:

After years of planning, [the owner] submitted its application for a development plan to the County, and the County in turn directed [the owner] to file its application with the Town for approval. After the Town conducted years of study without rendering a decision, [the owner] withdrew its application from the Town and on April 19, 2005, reapplied to the County.

Slip op. at 5.

Did the County comply with the 1976 federal judgment? No. Instead, it returned to federal court, suing the owner and other owners (who had said they would sue the County if it complied with the Judgment), asking that it "be relieved from operation of the Judgment." The main claim was that the Judgment was void because it contracted away the County's police and statutory powers. The federal court dismissed the complaint.

Which resulted in another stipulated judgment in 2007. Which mostly restated the requirements in the '76 Judgment, but also included requirements for processing a subdivision map, and other details to hold the County's feet to the fire. See slip op. at 7-9. 

The next year, 2008, the owner filed an application for development with the County. Three years later, the County prepared and circulated a draft EIR. That started the ball rolling on the CEQA show, with public hearings, comments, objections, responses, and the like. See slip op. at 10-11. As you land users know, CEQA review is ostensibly designed to provide decision-makers with information about a proposed use's impacts, vel non, on the environment, so they can, you know, make an informed decision. CEQA isn't designed to block development by itself, just to allow consideration of environmental concerns. But the reality is much different, and the statute is regularly employed to block or delay development. Justices of the California Supreme Court have said so (even as the court as a whole does nothing about it).

Death by a thousand days can be a potent tool for those committed to opposing development. "Significant environmental concerns" certainly sounds a lot better than "I've got mine." Consequently, the County Board of Supervisors refused to certify the EIR, because of "too many unknowns." Give us more information, property owner! "More than three years passed before [the owner] returned with the 'more specific proposal' demanded by the Supervisors." Slip op. at 12.

By now, we're in 2017, and the County couldn't slow-walk this any longer, and after its lawyer reminded the Supervisors about the two federal court judgments, it reluctantly (3-2) certified the EIR. See slip op. at 14-20.

Next stop, a California trial court. Other Tiburon property owners sued the County and the owner, claiming the EIR approval did not comply with CEQA's requirements, and that the federal court judgments were illegal because they contracted away the County's police and CEQA powers, and were therefore void. Slip op. at 23. The Town of Tiburon intervened to take the side of the plaintiffs. The court rejected the arguments, concluding that the County correctly certified the EIR.

That takes us to page 23 of the Court of Appeal's opinion. The next few pages are devoted to an overview of CEQA, and its ostensible purpose (information), and the limitations of EIRs. See slip op. at 26 ("Too much should not be expected of an EIR. It is not to have the exhaustive scope of a scientific textbook.").

Then the court went through what we consider the really good stuff: are the two federal court judgments void because they "contracted away" the County's police powers and statutory powers under CEQA? Did the judgments deprive County of the discretion to act in the public interest (presumably by denying the development, or by saying yet again that the proposal was incomplete)?

The court first dismissed as "hyperbole," insinuations that the County didn't actually exercise its discretion. Slip op. at 31. The court concluded that the outcome of the CEQA process was not "pre-ordained," and rejected the argument that the County only certified the EIR because it was legally compelled to do so by the judgments. "[P]ointless kabuki," as the court put it. See slip op. at 31 (the court rejected the argument as "without merit").

The court agreed that government generally cannot contract away its police powers, but concluded that here, the County's didn't do so because it in fact did exercise its discretion. The judgments required the preparation of an EIR, which was not a "pro forma exercise." Slip op. at 34. The County could not "blow off" (court's words, not ours) CEQA, nor did it. Id. The "lengthy administrative process attending the EIR" confirmed that the County's consideration was not pretextual. The court rejected the plaintiffs' and the Town's implicit assumption that once environmental issues are present, CEQA requires that environmental concerns override everything else:

Petitioners' novel framework, under which longstanding legal obligations would become unenforceable when subject to environmental review, would turn California law on its head.

Slip op. at 35. No, the court concluded, the County was acting as CEQA envisions, because -- guess what -- even if there are impacts on the environment, the reviewing agency can override when it "deems a project sufficiently important or desirable for reasons that override the normal obligation to mitigate significant environmental effects." Slip op. at 37.

The court held that the County did not agree in the judgments "to exempt a class of applicants or ... quit the particular regulatory field." Nor has it "conditioned its exercise of authority upon the agreement of other governmental entities, thus giving those entities actual control or veto power," or agreed "to refrain from legislating in the future," or "approve a project it knew was incompatible with its general plan," or agreed "to give a developer an exemption from zoning laws." Nor was this a "situation where an otherwise valid agreement has been rendered invalid by subsequently enacted regulation." Slip op. at 37-38. 

What we have here is simply a single project with a particular set of attending circumstances, one of which is concluded litigation. There is nothing intrinsically suspect about a governmental entity settling a lawsuit brought by a property developer. Quite the contrary, the law favors and encourages the settlement of legal disputes. Indeed, the practice as applied to property development disputes is common and has been approved by our Supreme Court. Moreover, although it may look a bit like putting the cart before the horse, a lead agency can commit to a project before completing a thorough environmental review.

Slip op. at 38.

And don't forget that the underlying judgments were not just plain old civil judgments, but federal court judgments resolving a federal civil rights case, all of which the County signed on to. As the court put it, "[t]he 1976 Judgment was not an abandoned derelict that suddenly loomed out of the fog." Slip op. at 39. The Town and the plaintiffs "knew it was a dagger pointed at the heart of their campaign to defeat entirely any development of the site, or failing that, to minimize the extent of any development." Id.

And shouldn't a citizen be able to rely on the government's word (especially when that word is given in open court? 

Twice, the County pledged its name and good faith in accepting that [the owner] would be allowed to build at least 43 units on lots of at least one-half acre. To judge from the County Counsel’s remarks to the Board, it may safely be assumed that the County acceded to the 1976 Judgment in recognition that its 1974 re-zoning attempt exposed it to significant monetary liability. Certainly, no one would question [the owner]’s natural inclination to take the judgment at face value, believing the County’s word was good.

Slip op. at 39.

Having resolved that issue in favor of the County and the property owner, the opinion turned to the specifics of the plaintiffs' CEQA objections, including things like project description, analysis of alternatives, mitigation of impacts (for things like traffic safety (really), traffic density (really), pedestrian safety (sounds like an environmental impact, doesn't it?), impacts on the California Red-Legged Frog, groundwater supply, something called "fire flow," the impacts of the temporary construction road). The court also rejected the kitchen sink (we kid, we kid). See slip op. 44-104. We'll leave those to you to digest, you CEQA mavens.

The opinion ended with four pages that really are worth your time. Therein, the court made some choice comments:

• The extreme amount of time the case has taken thus far ("This dispute is almost as old as CEQA itself.")
• The sheer size of the reporting ("When finally certified in 2017, the EIR has been more than 20 years in the making, ballooning to almost three times the recommended maximum size of 300 pages. And now it is 2022, five more years later.").
• CEQA "can be manipulated to be a "formidable tool of obstruction, particularly against proposed projects that will increase housing density."
• Agreeing with the observation that "[n]ew housing projects were the most frequent target of CEQA lawsuits,” and “the percentage of CEQA lawsuits against new housing units" has even been increasing in recent years." We're not dealing with NIMBYs, More like BANANAs.
• That the record here, despite it sheer size and the length of time it took to develop it, is "woeful."

The opinion wrapped with this:

It must be tough enough when the opposition is purely private.  However, when private opposition is joined with official hostility, CEQA becomes an even more fearsome weapon. When the project proponent faces sustained private opposition, plus the combined animus of two levels of local government, the temptation to throw in the towel must be overwhelming.

Something is very wrong with this picture.

Slip op. at 108.

And even though a court has now, finally, set the record straight, this ain't over. Gas may now be nearly $7 a gallon, and the Cleveland baseball club is the "Guardians" (but ABBA is still here). Are there other ways that the Town and opponents can deny, delay, and obstruct? We're not saying no.

Four decades, and counting....

Tiburon Open Space Committee v. County of Marin, No. A159860 (Cal. Ct. App. May 12, 2022)

Hawaii Land Use Law Conference, May 25-26, 2022, Honolulu - Join Us!

It's back! After a hiatus on the in-person program, the bi-annual Hawaii Land Use Conference is back in-person (see here for a sample of one of our prior presentations at this conference).

May 25 and 26, 2022, downtown Honolulu.

The full agenda and speaker list has not yet been published, but here's a summary of the program:

Sponsored by the Hawaii State Bar Association and the Real Property and Financial Services Section. Coordinated by David Callies and Benjamin Kudo, his 2-day conference is a must attend for any attorney or professional whose practice involves land use and development. Distinguished land-use practitioners, scholars, planners, and regulators from Hawaii and the Mainland will discuss timely and relevant issues, including:

• Takings 

• Transit Oriented Development (TOD) 

• Seawalls and Shoreline Access 

• Climate Change 

• Affordable/Workforce Housing 

• Ethical Considerations for Real Property Practitioners and Other Professionals

We'll be speaking during the session on Takings, along with our colleagues Greg Kugle, Brad Saito, and Ellen Ashford.

Register here (limited to 70 registrants, no walk-ins, so be sure to get your spot now). Travel to and from Hawaii is back open and no more Co-19 hassles at the airport, so take advantage of the opportunity for a little R&R and CLE. 

As Jack Lord would say, "be there, aloha!"

CAFED: Fed Takeover Of Fannie Mae & Freddie Mac Not An "Exaction," Not A Taking

We gotta be honest here: when the substantive portion of an opinion (even an opinion about takings and exactions) begins with, "Congress created the Enterprises to, inter alia, provide liquidity to the mortgage market..." our eyes kind of glaze over. It's going to be one of those opinions.

But we soldiered on, and slogged through the Federal Circuit's opinion in Washington Federal v. United States, No. 20-2190 (Feb. 22, 2022). The case is about the 2008 federal takeover of Freddie Mac and Fannie Mae. We won't go into the details, but the basic allegations in the complaint are that the fed takeover of the entities was an exaction, and a taking.

The Federal Circuit affirmed the Court of Federal Claims' dismissal, although for other reasons. The CFC thought the plaintiffs missed the 30-day statute of repose applicable to challenging the appointment of a conservator. The Federal Circuit disagreed, concluding that the six-year statute generally applicable to takings claims governed. But it affirmed the dismissal for failure to state a claim.

'Exactions" and "takings" are "separate wrongs." An exaction claim challenges the constitutional legitimacy of the government action. Whereas in takings, the property owner seeks compensation for an otherwise legitimate government action. Check out footnote 4:

The Claims Court treated the count as two legal claims that the Washington Federal Plaintiffs pled in the alternative, and we do as well. See Wash. Fed., 149 Fed. Cl. at 288–89. In contrast to a takings claim, which involves lawful government action, an illegal exaction claim “involves money that was ‘improperly paid, exacted, or taken from the claimant in contravention of the Constitution, a statute, or a regulation.’” Norman v. United States, 429 F.3d 1081, 1095 (Fed. Cir. 2005).

Slip op. at 6 n.4.

That's all well and good, the Federal Circuit concluded, but where Congress has established a separate review process to challenge agency action as unlawful, "a plaintiff may not separately litigate the issue of whether the agency acted in violation of statute or regulation in a takings (or illegal exaction) action." Slip op. at 11. That limitation rendered the plaintiffs' exaction claim here "not plausible as a matter of law." Id.

The court did not view this as a question of a statute of limitations or repose, but that goes to the nature of exaction and takings claims:

The Washington Federal Plaintiffs also argue that interpreting § 4617(a)(5) to bar direct claims by shareholders seeking monetary relief for Fifth Amendment violations would raise serious due process concerns. We disagree. As noted, the statute of limitations in § 4617(a)(5) does not time-bar Fifth Amendment takings claims before the Claims Court. A litigant simply cannot assert a plausible takings or illegal exaction claim predicated on the unlawfulness of an agency action where Congress provided an alternate exclusive means to challenge that action.

Slip op. at 13-14.

The plaintiffs' straight-up takings claim didn't fare any better. The complaint objected to the feds' unlawful appointment of itself as conservator. And we know that in order to get to "takings" relief, the plaintiff can't be complaining about unlawful action (at least in the Federal Circuit). See slip op. at 15 ("a plaintiff may not assert a takings claim in the Claims Court claiming entitled to prevail because the agency acted in violation of a statute or regulation").

The Federal Circuit also concluded that the plaintiffs in this case lacked standing because as shareholders, they were asserting the rights of the entities, not their own. See slip op. at 17-19.

Washington Federal v. United States, No. 20-2190 (Fed. Cir. Feb. 22, 2022)

2022 ALI-CLE Eminent Domain And Land Valuation Litigation Conference, Scottsdale: You Should Have Been There!

After a two-year absence in which we went remote, in the last week of last month (our usual spot on the calendar, between the playoffs and Super Bowl), we once again met in-person for the American Law Institute-CLE Eminent Domain and Land Valuation Litigation Conference.

Approximately 200 lawyers, judges, legal scholars, appraisers, law students, right-of-way agents, relocation experts, property owners, and other related professionals gathered in-person--yes, in-person--at the Scottsdale (Arizona) Resort at McCormick Ranch, to get reacquainted, learn stuff, and renew ties last made in-person in Nashville in 2020. In addition to the live attendance, we also welcomed about 50 remote colleagues, who joined the live webstream.

This was the 39th edition of the Conference, one of the most-established and successful conferences in the ALI-CLE stable of programs.

To those who joined us - thank you. This conference reminded us of why this program is so successful, and why we all return year-after-year.

To those of you who didn't (or couldn't) join us, here's what you missed. You need to remedy that, and come join us next year...

Our 2022 Proof of Life Photo.

Every year, as we open the program, I take to the lectern for what I call my "proof of life" photo. Our Conference ends up in some really fun, exciting places. Nashville. Palm Springs. San Diego. Austin. San Francisco. Charleston. And I want to prove to the folks back in the office that yes, we really are in the room, learning stuff. And not out enjoying all that our venues have to offer (we save that for after-hours).

In this photo, we're in the room, spread out (the Resort put us in its massive ballroom, so we had room to spare).

Thank you to our sponsors. Without your generosity, the Conference would not be as good as it is.

Lawprof Karen Bradshaw presented our keynote address on Friday, "Do Animals Have Property Rights?" with more from her recent book "Wildlife as Property Owners." Her talk was followed by a book signing, too. Interesting stuff for sure.

Our main room was nicely filled for every program. A real testament to the subjects discussed, and the quality of the faculty.

The program includes a mix of practice and substantive topics. Here, Virginia's Steve Clarke in one of the breakout rooms (also nicely filled), presenting on "Federal Court and the Daubert Challenge – How To Prepare."

But it wasn't all eminent domain, property, and CLE credits. Naturally, with the beautiful Arizona winter weather, we found time to get out-of-doors and do things. Like this intra-firm golf tournament.

Which firm prevailed? You'll have to ask them who has the bragging rights.

What was especially nice was that our sponsor tables and the ALI-CLE registration table could be outside of the presentation rooms. Love that AZ weather.

New Jersey's Tony Della Pelle and Connecticut's Dwight Merriam on "COVID-19 Takings."

Our faculty includes not only lawyers and law professors. We also have other industry professionals come and present. Here, Washington's Martyn Daniel, Texas' Kristen Bennett, and (lawyer) Alan Ackerman from Michigan speaking about "Maximizing Relocation Benefits: Understanding the Law and Regulations to Ensure Fairness."

Ah, ethics. A tough subject to cover. Especially at 8am. But Georgia's Ivy Cadle (with the obligatory "go dawgs!"), Michigan's Darius Dynkowski, and (off-screen) Virginia's Kelly Sheeran and Texas' Justin Hodge filled the room with "Ethics Jeopardy! Live."

Yeah, Justin really did go for the end zone for his role as Ethics Jeopardy! host.

We understood the situation. Our faculty, staff, and attendees came to Arizona from around the nation. Some places have opened up, others are still getting there. We minimized any risks. Spread out in a huge room, and everyone was pretty cool with the modest requirements from ALI-CLE. What was especially good was that nearly every event but the actual programming were outside. 

Another featured panel was on the Supreme Court's big decision in Cedar Point Nursery. We brought together three expert perspectives on the case and what it means for the future. "Did the Supreme Court Signal a New Direction for Property Rights in Cedar Point Nursery?" featured California's Joshua Thompson (prevailing counsel in the case), U. Virginia lawprof Julia Mahoney, and (off-camera, since he remoted in) Maryland's Matthew Littleton, who filed a government-side amicus brief in the case.

Also pictured: the moderator, some guy who writes a blog.

Colorado's Katie Gray and Nebraska's Bill Blake on "Project Abandonment: How to Position Your Client for the Fallout When Projects Don't Get Built." Really useful.

Tag swag (aka badge flair) courtesy of our Platinum sponsor.

Our two fave tags.

Outdoors at night - really nice under the lights by the fire, after a long day of CLE programming.

Hawaii's Mark Murakami teamed with Wisconsin's Smitha Chintamaneni for "Why Jurisdictional Offers Must Include an Assessment of Severance Damages."

Even our final programs each day attracted a substantial crowd, often tough to do after long days of sitting in class. A testament to the strength of the faculty and the topics. Here's the audience for "Defending the Appraisal in the Courtroom - The Insider's View."

We put speakers with competing views on these panels, to get the blood pumping and keep everyone's attention.

Saturday morning, after two full days of (great) programming, is still a tough spot for a speaker, because they have to keep us focused, and interested.

That's why we always reserve these spots for two old hands, who will keep us zeroed in. Above is California's Jim Burling, with a tour-de-force solo hour on "What Are the Top 20 Ways to Increase the Cost of Housing? The Answer May Surprise You!"

Below, Michael Berger (looking a bit like Big Brother, admittedly), who remoted in from California with his annual "Regulatory Takings Update."

Feral cats and property rights had us smiling (ask Michael about what this refers to).

Michael Berger is Watching You.

A group photo of the William and Mary Law School contingent at the Conference (minus two other WM Law colleagues who could not be there for the photo). Recent and long-time alumni, current law students, a law prof, and (fourth from left) Jim Burling who later this year will be awarded WM Law's Brigham-Kanner Property Rights Prize at the B-K Conference in September 2022.

A pretty good showing for the alma mater.

There was a whole lot of podcasting going on. Thanks, Infrastructure Junkies and Eminent Domain Podcast. Can't wait for the episodes you recorded.

Again, thank you sponsors!

What about next year? Usually, on the last day of a Conference, we announce the dates and the venue for the following year. This year, due to some slowdowns, ALI-CLE couldn't quite get all the requirements in place to make a formal, official announcement. As soon as we know the venue, we'll go loud here.

As for the date: same date as usual - last week of January or first week of February, depending on the football schedule (which we're trying to avoid).

Stay tuned.

 

The Circle Is Now Complete: A Sampling Of Final Paper Topics From William and Mary Law's Eminent Domain & Property Rights, And Land Use Courses

If you ever get the opportunity to teach in a law school -- either as a full-time legal scholar, or part-time as an expert adjunct practitioner -- take it if you can. 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 folks calling you "professor" can evoke a smile.

But if there's one 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. 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 2021 Semester, 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). 

Check out these titles:

• The Many Saints of Land Use Law
• The Past, Present, and Future of Richmond Affordable Housing
• What's on the Menu? - The Future of Outdoor Dining and the Tension Between Land Use and Public Health
• Could Monetary Compensation Fully Indemnify Property Owners for Idiosyncratic Values in Takings Cases?
• The Lingering Effects of the Dawes Act on Tribal Land Use
• The Dawn of Debt and Everything Else: An Examination of the Works of Michael Graeber and the Role of Eminent Domain and Property Rights
• Inflation for Land Use Control
• Agritourism in Wine Country: Analysis of Accessory Uses in Napa Valley
• Judicial Exaction of Euclidean Deference Under Koontz
• A Review of Richard Rothstein’s The Color of Law: A Forgotten History of How Our Government Segregated America
• What’s on the Inside Counts: Why Historical Preservation Regulations Should be Allowed to Regulate Interior Landmarks and the Issue of Public Access
• Through the Buchanan Lens: Reframing Virginia Land Use Laws
• The Case for Equal Application of RLUIPA’s Equal Terms Provision
• The Government Giveth, and the Government Taketh Away: Retroactive Application of Inter Partes Review Under the Takings Clause
• The Right to Share: Is Virginia Beach’s Regulation of Short Term Rentals a Taking under the Takings Clause of the Fifth Amendment?
• The laws of nature do not recognize property rights, complicating the Commonwealth of Virginia’s adaptation to climate change
• Looking at Viniculture Through the Glass of Historic Preservation Law, or
  A Brief Wine Advocate
• Is the New York State Canal Corporation the Onceler of Upstate New York?: An Analysis of Town of Pittsford v. Power Authority of New York
• Law and Ownership as Evolving Stories: A Review of Mine!
• Incentive Zoning in New York
• The Tide is High but Norfolk's Holding on: An Analysis of Norfolk's Climate Change Adaptation Strategies and a Review of the Potential Claims in Response
• Flipping the Play: How Localities Can Use the Power of Eminent Domain to Seize Sports Franchises and Finally Stick it to Bob Irsay
• Land Use Control – Is it Important to the Average Joe?
• Re-Evaluating Bennis and Civil Forfeitures Under the Takings Clause
• The Guardian of Every Other Right - A Constitutional History of Property Rights and a Discussion on Tariffs, Redistributionism, and Capitalist Liberty
• Pipelines and Eminent Domain: A Constitutional and Environmental Analysis of Energy Takings
• Paradise Stolen: An Ethical Reexamination of Property Deprivation and the Plight of the Atakapa-Ishak Peoples of Louisiana’s Grand Bayou Indian Village
• A Flood of Pollutants: The Promises and Perils of a Regulatory-Takings Approach to the Right to a Clean Environment

And this is only a sampling.

I don't know about you, but I feel pretty good about this. I will be encouraging several of them to consider beefing up their papers and submitting them for publication.

Timing Requirements In Hawaii's Forfeiture Statute Are Not Mere Internal Deadlines

In this season of "regifting," this one from the Hawaii Supreme Court about an attempt to "re-seize" property by civil forfeiture.

In Alm v. Eleven (11) Products Direct Sweepstakes Machines, No. SCWC-15-848 (Dec. 20, 2021), the unanimous court held that the notice and related procedures in Hawaii's civil forfeiture statute are mandatory, and that the two-year statute of limitations governing when the government must institute forfeiture proceedings or return the goods is not the sole time constraint the government must adhere to.

It all started back in 2012, when Five-O (not really, it was HPD), pursuant to a search warrant seized 77 devices allegedly used for gambling. The statute of limitations on the government bringing a forfeiture action is the same as the underlying offense (here, two years). Well, nearly two years passed and HPD began the forfeiture process, but at about the same time cancelled its investigation. But it didn't give the devices back to the owner, it rebooted the process and "re-seized" the property. One week later, asked the prosecutor's office to start the forfeiture process by filing an administrative claim.

The prosecutor did so. But when the case later ended up in court, it was dismissed for failure to comply with the two-year statute of limitations. While the admin forfeiture request was timely, the judicial review process was instituted more than two years after the seizure. The court of appeals reversed, concluding that it was enough the government started the admin proceedings on time.

Having determined the case was timely, the court of appeals rejected the argument that the statute's other time deadlines -- which require that the police send the prosecutor a request to institute forfeiture within 30 days (and that the prosecutor file the petition within 45 days) are mandatory. The court concluded these deadlines are mere guidelines because there's nothing in the statute that says what happens if the government doesn't comply.

The Supreme Court disagreed that these are just internal deadlines. Slip op. at 14-15. After reviewing the legislative history of the statute, the court concluded that the legislature did indeed intend a remedy if the police don't send the prosecutor a request to institute forfeiture proceedings with 30 days or if the prosecutor doesn't file a petition with 45 days: return the property to its owner. See slip op. at 16 ("In so doing, the legislature made explicit its intent that the remedy for noncompliance with HRS § 712A-9’s deadlines was the return of the property.").

The Hawaii Supreme Court also rejected the court of appeals' analogy to the statute at issue in the U.S. Supreme Court's decision in United States v. James Daniel Good Real Prop., 510 U.S. 43 (1993):

Finally, the ICA’s reliance by on the United States Supreme Court’s decision in Good to conclude that the deadlines enumerated in HRS § 712A-7 and § 712A-9 are internal deadlines and failure to comply with these deadlines “will not serve as a bar for a petition [for forfeiture]” is misplaced. In Good, because the customs statute at issue did not provide a remedy for failure to comply with the provision, the Court interpreted the statute to be an internal guideline rather than one enforceable by the courts. 510 U.S. at 64-65. The Court explained that, because the statute lacked a consequence for noncompliance, Congress impliedly left enforcement to the administering officials. Here, the legislative history of HRS § 712A-9 explicitly provides that the seizing agency must return the seized property if the State fails to follow HRS § 712A-9.

Slip op. at 17-18.

Now you do have to keep in mind that this is a case of statutory interpretation, and the court merely concluded that the government must adhere to the requirements of the statute (even where those requirements are not spelled out in the statute as plainly as they might have been). But this remains an important case because even though the court did not cite to the rule that statues in derogation of property rights are usually interpreted strictly against the government and in favor of the owner, this case definitely has that vibe.

Before an owner can be deprived of her or his property, the government should be required to, at minimum, comply with all the requirements it imposed on itself (putting aside for the moment the separate question of whether due process would require these deadlines).

Can we count this case as a win for "property rights?" For sure.

Alm v. Eleven (11) Products Direct Sweepstakes Machines, No. SCWC-15-0000848 (Haw. Dec. 20, 2021)

Indiana App: Even When Federal Agency Steps Into The Shoes Of A Local Redevelopment Agency, It Has To Follow Local Rules

Like a lot of things in Gary, Indiana, the Housing Authority was "troubled." So troubled, the feds took it over. The Housing Authority received big money from the feds, and was required to agree to an annual contribution agreement, by which the Authority ok'd a HUD takeover in the even of the Authority's substantial default.

Next up, default. The city dissolved the Housing Authority's Board of Commissioners, and HUD appointed one of its employees to be the administrator of the Authority and to serve as the Board of Commissioners. Back in business.

Part of the administrator's ... ahem ... "Authority's" business was redevelopment. The Authority decided to take 624 Broadway's property (which, not surprisingly, included 624 Broadway) to do some mixed-use and affordable housing. The taking was undertaken under Indiana's eminent domain procedures. Attempts to purchase the property were not successful, so the Authority instituted an administrative taking.

The property owner thought that the Authority wasn't adhering to the required process, and filed lawsuit which sought to enjoin the taking. The trial court entered summary judgment in favor of the Authority.

In 624 Broadway, LLC v. Gary Housing Authority, No. 21A-CT-653 (Nov. 10, 2021), the Indiana Court of Appeals agreed, but only in part.

The court first concluded that a HUD employee could step into the shoes of the Authority's Board of Commissioner's. Federal law preempts Indiana's requirement that a Board of Commissioners be comprised on seven people. Seven commissioners isn't one HUD administrator, the property owner argued. Moreover, Indiana law requires Commissioner decisions to be ok'd by the Gary Common Council, and the HUD administrator had not done so before the taking. The court concluded these requirements conflict with federal law, and in this case, Indiana law "must yield the HUD administrator's authority under the United States Code." slip op. at 12 (footnote omitted).

Next, the court also rejected the property owner's argument that the Authority was not authorized by Indiana law to exercise eminent domain for mixed-use development because the statue only authorizes low-income housing. No, the court concluded, a fair reading of the enabling statute's requirement of low-income housing only means that a part of the project be for low-income housing:

The plain language of section 36-7-18-2 does not restrict a housing authority from providing “safe and sanitary dwelling accommodations for persons of low income” in a mixed-use development, or from otherwise acquiring a specific property when that property is within an area of unsanitary or unsafe housing conditions.

Slip op. at 14.

The court also rejected the owner's argument that the HUD-helmed Authority violated the Uniform Relocation Act. But as we all are aware, the URA does not recognize a private cause of action. It's mostly the Pirate's Code.

Things were not looking good for the property owner.

But hold on! On the fourth claim -- that the Authority did not provide the owner with proper notice and a chance to be heard -- the court sided with the owner. Although the owner framed the argument as one of due process, the court treated it as a statutory claim because Indiana's eminent domain statute sets out the requirements for notice and hearing. And if the HUD administrator stepped into the shoes of the Authority, then she also has to live with whatever requirements Indiana law places on the Authority.

Strictly construing the statute (you know, the canon of construction of eminent domain statutes is that they are read strictly "both as to the extent of the power and as to the manner of its exercise," slip op. at 16-17), the court concluded that the statute's requirements for published notice at a certain time, along with service on the property owner, mean what they say, and that the record in the case was clear that the Authority didn't mail notice to the owner, and that it didn't publish notice within the prescribed time.

The court rejected the Authority's argument that this was all harmless (the owner apparently found out and showed up):

Further, while the Gary Housing Authority suggests that its failure to serve written notice of the resolutions on Allen was harmless as he still learned of the two meetings and attended, we cannot agree. 624 Broadway moved to continue the October 17 hearing to obtain its own appraisal of the property, which motion the Gary Housing Authority denied. The Gary Housing Authority’s failure to properly serve 624 Broadway and its failure to hold its damages hearing no fewer than thirty days after the date of last publication contributed to 624 Broadway’s inability to obtain its own appraisal of the property prior to the October 17 hearing and to 624 Broadway’s inability to present competing evidence of its damages at that hearing. We cannot say with confidence that, had the Gary Housing Authority complied with Chapter 2, as it was required to do, it would have assessed the same damage award for the property to 624 Broadway.

Slip op. at 21.

Will the remand for the correct process stop the HUD-led eminent domain train? Has the delay in the taking derailed the project? We shall see.

624 Broadway, LLC v. Gary Housing Authority, No. 21A-CT-653 (Ind. Ct. App. Nov. 10, 2021)

Fed Cir Tries To Avoid "Police Power" Takings Exception In Bump Stock Case By (Unsuccessfully) Finessing The Property Interest

As we've said before, you don't need to know much about takings doctrine to understand that a challenge wherein the property alleged to have been taken are "bump stocks" -- devices that allow rapid activation of a semi-automatic rifle such that it roughly imitates a fully-automatic weapon -- to understand that courts may be inherently reluctant to limit the government's authority to regulate their use and ownership even to the point of outlawing it. There's a long judicial history of courts not getting in the way when it comes to the other branches' response to the problem du jour. The judicial reluctance many not be rational, it may not be doctrinally consistent. But, in our view, it just is, and that's something that owners of such property and those of us who seek doctrinal clarity have to take into account.  

Here's the latest in a case we've been following, that in our opinion could be Exhibit "A" proving the notion that courts are unwilling to limit the power of government in these type of situations (where something has become toxic) -- either directly, by curbing its regulatory power or indirectly through the just compensation requirement -- that they put themselves through a lot of analytic twists and turns to avoid doing so. 

In McCutchen v United States, No. 20-1188 (Oct. 1, 2021), the Federal Circuit did what you might expect: it affirmed the Court of Federal Claims' dismissal of the plaintiffs' complaint which seeks just compensation for the taking of their (now-outlawed) bump stocks. We criticized the CFC's rationale that the reason the bump stock ban was not a taking was because it was a valid "police power" safety measure (putting aside for the moment that the feds don't have what you'd call a "police power" of course): the CFC "simply repeated the trope that the ban was a valid exercise of the government's regulatory power (which, we think was not really a question), and thus no taking." As we've noted before, this analysis is very unsatisfying. A takings claim like this doesn't challenge the validity of the ban (Lingle, anyone?), but instead says "if you are going to ban these things, the pubic needs to provide compensation."

The Federal Circuit avoided the CFC's erroneous analysis, claiming to go a different way: "[w]e affirm, but we do so on a threshold ground different from, though related to, the Claims Court’s grounds." Slip op. at 4. That's a good thing, because unlike many courts, some are beginning to get the idea that just because a regulation is imposed for an arguably valid police power reason (or other proper regulatory justification in the case of federal restrictions), does not insulate it from takings review. Indeed it is the first step in the takings analysis not the last. See this Fourth Circuit decision, for example, where the court concluded "[t]hat Government actions taken pursuant to the police power are not per se exempt from the Takings Clause is axiomatic in the Supreme Court’s jurisprudence." Good for the Federal and Fourth Circuits.

So how did the Federal Circuit get to the no-takings result, without going down the same (wrong) path the CFC traveled? It looked at the property interest alleged, and concluded that the owners of bump stocks were already subject to existing federal regulations that prohibit machineguns, and that the new prohibition on bump stocks is simply a new agency interpretation of the long-standing rule.

Congress has banned "machineguns" since 1934, in a statute that also defined what a machinegun is. That definition remained the same until 1986, when Congress amended it to include "any part ... for use in converting a weapon" into a device that shoots more than a single round with a single pull of the trigger. The AG has the authority to promulgate rules and regulations enforcing this provision. And that's what happened here, the Federal Circuit concluded.

The regulations being challenged define a bump stocks as a device or part that allows someone to shoot multiple rounds with a single trigger pull. The court also noted that the AG's interpretation changed over time, and in the past -- between 2008 and 2017 -- had excluded bump stocks from the machinegun definition. See slip op. at 9. But after the Las Vegas massacre in which the shooter used a bump stock, the AG "clarified" that bump stocks are, in the government's view, machineguns. The Federal Circuit focused on this as the key. Thus, this wasn't some new rule outlawing bump stocks, but a "pre-existing law circumstance" (slip op. at 15) -- merely an enforcement of the longstanding prohibition of machineguns.

The court first pointed out it was avoiding the hard question:

We do not reach the grounds on which the Claims Court relied. In particular, we do not decide under what circumstances a measure that newly bars possession of personal property (as opposed to restricting a use of property) and that serves a “police power” purpose (and is constitutionally authorized for the federal government) is not a “taking,” and thus requires no compensation. Nor do we decide whether mandating permanent dispossession by ordering destruction of personal property cannot be a “physical taking,” even if the government-specified alternative to destruction is surrender to the government and the mandate is backed by government remedies of seizure and forfeiture for a willful violation as well as criminal remedies for a knowing violation.

Slip op. at 13-14 (footnote omitted).

To do so, the court engaged in what we see as a clever sleight-of-hand, something that occurs frequently in takings cases by determining the property interest involved never included the right to make the now-barred use: courts frequently avoid addressing the Armstrong principle by narrowing the scope of the property interest claimed to be taken. Here, the Federal Circuit concluded that although the bump stock owners unquestionably possessed property as defined by state law, the longstanding federal regulation of that property was a background principle that inhered in the title to these things. See slip op. at 17 ("And valid preexisting federal-law limitations on what otherwise would be state-law property rights are among the limitations that may inhere in title so as to limit compensable property rights.").

In short, the owners of the bump stocks never had the right to keep and transfer them:

In this case, the federal-law prohibition on possession and transfer, together with a congressional grant of implementation authority, predated the existence, let alone plaintiffs’ possession, of the bump-stock-type devices that plaintiffs were compelled to destroy or surrender. That prohibition is a very specific one, defined in terms of the physical operation of particular devices, not in terms simply of a broadly stated goal. The latter situation raises issues not presented here.

Slip op. at 18 (footnote omitted).

But wait...weren't these things ok before the AG reimagined the regulations to include them in the definition of machinegun? That's where the court got creative. The sleight-of-hand we referred to above starts on pages 18 and 19, where the court rejected what at first glance might have been the property owners' most compelling argument -- that the AG's latest interpretation was a "new" prohibition because in the past it had a differing view of whether bump stocks qualifed as machineguns.

The Federal Circuit was able to avoid that argument by concluding the owners conceded the point when they acknowledged the AG's new interpretation is a "legally valid interpretation of the statutory prohibition[.]" Slip op. at 18. But we're guessing that isn't quite what the owners conceded, as it seems more likely that they merely acknowledged that they were not challenging the validity of the current prohibition, something that Federal Circuit doctrine requires them do in order to bring a takings claim in the CFC. A challenge to the validity of the prohibition is either an APA or a due process challenge, and those belong in a district court not the CFC (where jurisdiction is limited by the Tucker Act to money claims). In short, because of the split jurisdiction between the CFC and the district courts, you cannot raise both a challenge to the validity of the action and a takings claim.

But the court took that concession as also acknowledging the limitation of the challenged regulation on the owner's property rights, which to us seems like bootstrap logic. If the Federal Circuit's approach to the owner's "concession" is universally applied, it would result in a property owner acknowledging the validity of the regulation challenged as a taking as a ticket to the takings claim, but at the same time conceding that the challenged regulation is a background principle, wiping out the claimed property right.

We think the heart of the Federal Circuit's rationale that starts of page 20 of the slip opinion for why the AG was not truly switching gears and implementing a "new" prohibition, but rather was merely returning interpretation of the machinegun prohibition to where it had always been is a real exercise in the metaphysics of Chevron deference. The AG's most recent take on the definition of machinegun might or might not be the "best interpretation" of the statute's meaning, but the statute itself has always been clear, according to the court. See slip op. at 20 ("In either event, the preexisting statute itself, properly understood, barred the possession or transfer at issue. In these circumstances, the bar always limited plaintiffs’ title, and plaintiffs never had a property right against government assertion of the duty to destroy the devices at issue or surrender them.").

Or, the court alternatively concluded, even if the statute was not clear, the owners' property rights were always subject to the government changing its mind on including bump stocks in the definition of machinegun:

For plaintiffs here, the preexisting limitation on their title included subjection to future valid agency interpretations of the possession-and-transfer prohibition (as assumed here) adopted in the exercise of that authority. In these circumstances, plaintiffs had no property interest protected by the compensation requirement of the Takings Clause against such a valid interpretation when adopted.

Slip op. at 21. In short, where a statutory term might be ambiguous (and what statute isn't, we ask?), the owner's property rights must account for the ambiguity by applying Chevron deference. Slip op. at 21 ("By 1986, the Supreme Court’s 1984 decision in Chevron already made clear that the law, for a statute like 18 U.S.C. § 922(o), included the possibility of reasonable resolutions of ambiguities").

Property rights are shaped by Chevron? Holy cow, that's a new one; or perhaps just way of backing into the old claim that property rights are limited by "highly regulated" markets.

Having concluded that the bump stock owners' property interests did not include the right to be free of regulation that might outlaw the property, the court easily concluded that there was no taking. No "property," no need to even evaluate the physical deprivation or even a Penn Central claim.

To us, despite the court's claim to have avoided the CFC's rationale that a valid-police-power-regulation-is-not-a-taking, it pretty much undertakes the same analytical approach. But the Federal Circuit dresses it up better. After all, if the prohibition being challenged is part of the property's "background principles," what is left of the property itself other than the very Hobbesian notion that the state defines an owner's expectations at will? Here, the Federal Circuit endorses that idea when it concluded that despite the AG expressly excluding bump stocks from the definition of machinegun between 2008 and 2017, the AG had also put the owners on notice in the ATF Handbook where it reserved the right to change its mind. See slip op. at 23 ("Nevertheless, classifications are subject to change if later determined to be erroneous or impacted by subsequent changes in the law or regulations"). Here, the law or regulations didn't change, but the circumstances did.

In short, the official word of the the government is good...until it isn't. Proceed at your own risk.

Are we surprised by the result in the Federal Circuit? No. Are we just a little bit disappointed that the court went about it this way? Yeah, just a little.

McCutchen v. United States, No. 20-1188 (Fed. Cir. Oct. 1, 2021)

Registration Open Now: ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Jan 26-29, 2022, Scottsdale

All the topics you want to know about, presented by top-notch faculty from across the nation. Sessions include:

• Keynote: Do Animals Have Property Rights?
• Did the Supreme Court Signal a New Direction in Property Rights in Cedar Point Nursery?
• Maximizing Relocation Benefits: Understanding the Law and Regulations to Ensure Fairness
• Challenging Public Use: Lessons From a 67-Day Trial
• COVID Takings
• Property Rights as Civil Rights
• Eminent Domain National Update
• Federal Court and the Daubert Challenge: How to Prepare
• How to Position Your Client for the Fallout When Projects Don't Get Built
• Rural Broadband and the Emerging Constitutional Challenges
• Are Precondemnation Entry Statutes Still Valid After Cedar Point Nursery?
• How Condemnor and Property Owners' Counsel Prepare the Battlefield
• How Will the Trillion Dollar Infrastructure Bill Impact Your Practice?
• Ethics
• ...and more, including a full slate of networking and social events!

We've sold out the last few years, so don't miss out. Room block now taking reservations. Registration and agenda information here.

Join us in Scottsdale in January!

Takings Maven Dream Job® (x2): Property Rights Constitutional Litigator at Pacific Legal Foundation

You've got big dreams, you want fame...

If so, here's your chance: two (2!) Takings Maven Dream Jobs® are now available.

Pacific Legal Foundation requesting applications for positions as a Property Rights Constitutional Litigator. Job description includes "You will find and win the next important Supreme Court property rights case."

Oh, have we got your attention now?

You: An entrepreneurial freedom fighter with a passion for, and significant experience in, property rights litigation. You find and win cutting-edge property rights cases across the country. You are a national spokesperson for property rights—you speak at conferences, engage the media, and publish scholarship on property rights. You are a leader who will elevate PLF’s junior attorneys to be the best property rights litigators in the nation. You have demonstrated a dedication to public interest law and property rights throughout your career.

...

You will be a leader in PLF’s Property Rights Practice Group. From Nollan to Koontz to Knick to Cedar Point Nursery, PLF’s property rights litigation is unparalleled. (If you can’t describe these four cases without checking your notes, do not apply!) You will find and win the next important Supreme Court property rights case. Your ideas will help shape PLF strategy by identifying and litigating emerging property rights theories. And you will be recognized as a nationwide leader on property rights: giving speeches, attending conferences, appearing on radio and television, and publishing op-eds and scholarly articles on property rights.

You will also be a key contributor to PLF’s property rights practice group. You will work on teams with junior and senior attorneys, providing your expertise and knowledge and elevating the talent and skill of our attorneys. You will have the latitude to think big and the resources to execute. You will be at the forefront of shaping property rights for all Americans.

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

Sound good? We made the jump earlier this year, now you can join in the fun.

You love coffee, and as we know, coffee is for closers!

More here, including application information and deadline.

Join Us For The 39th Annual ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Jan 26-29, 2022 (Scottsdale, AZ)

All the topics you want to know about, presented by top-notch faculty from across the nation. Sessions include:

• Property Rights as Civil Rights
• Eminent Domain National Update
• Just Relocation: Understanding the Law and Regulations to Ensure Fairness
• Challenging Public Use: Lessons From a 67-Day Trial
• COVID Takings
• Federal Court and the Daubert Challenge: How to Prepare
• Did the Supreme Court Signal a New Direction in Property Rights in Cedar Point Nursery?
• How to Position Your Client for the Fallout When Projects Don't Get Built
• Rural Broadband and the Emerging Constitutional Challenges
• Are Precondemnation Entry Statutes Still Valid After Cedar Point Nursery?
• How Condemnor and Property Owners' Counsel Prepare the Battlefield
• How Will the Trillion Dollar Infrastructure Bill Impact Your Practice?
• Ethics
• ...and more, including a full slate of networking and social events!

We've sold out the last few years, so don't miss out. Room block now taking reservations. Registration and agenda information here.

Join us in Scottsdale in January!

Links From Today's ABA RPTE Session

Our thanks to our friends and colleagues at the ABA Section of Real Property, Probate & Trust Section's Land Use and Environmental Group for inviting us to a discussion of the latest and greatest decisions of interest.

We only had an hour together, so naturally could not cover everything of interest (indeed, we reserved a big discussion of the biggest item, the Supreme Court's decision in Cedar Point, assuming that the Group will schedule a full session on that decision alone). So here is our curated list of what we think are the most interesting recent decisions in areas of interest to the Group:

• Land use and short-term rentals: Euclid Lives! Mass SJC: "Short-Term" Rental Is Not A Permissible Primary Use In A Residential Zone Because Not Of "Residential Character"
• Environmental standing: Iowa: No Standing To Ask Court To Rule That Public Trust Doctrine Requires Legislation To Regulate Farmers
• Environmental standing, part 2: Hawaii Supreme Court: Anyone Claiming That An Affordable Housing Project Might Impact Their Property Interests In A "Clean And Healthful Environment" Has Standing To Object
• Exactions (sorry we didn't get to this one in the session, but here it is anyway because it is a good case to review): Ordinance Requiring Developer Pay For "All Necessary Road Capacity Improvements" Violates Nollan/Dolan
• Public use in eminent domain: So Close: SCOTUS Declines To Revisit Kelo (For Now) (a taking to remedy potential future blight is a "public use")
• Public use in eminent domain, part 2: Ill App (unpub, unfortunately) Strikes Down Taking For Road To Be Owned By The Public
• Just compensation in eminent domain: Louisiana SCT: No Statutory Attorneys' Fees For Pipeline Taking - But LA Constitution's Just Comp Clause Requires Owners Recover "The Full Extent" Of Their Loss (Which Includes Fees)
• Regulatory takings, emergencies, and necessity: Fourth Circuit: No Taking When Aerial Pesticide Spray Killed Bees ... But Not Why You Think

Thanks again, colleagues.

HAWSCT: Anyone Claiming That An Affordable Housing Project Might Impact Their Property Interests In A "Clean And Healthful Environment" Has Standing To Object

In Protect and Preserve Kahoma Ahupuaa Ass'n v. Maui Planning Comm'n, No. SCWC-15-0000478 (June 16, 2021), the Hawaii Supreme Court reaffirmed the idea that all members of the public have a right under the Hawaii Constitution to a "clean and healthful environment," and that this is a "property" right entitled to due process protection under the state constitution. We say "reaffirmed" because this is merely the latest case so holding (see here for the first).

Like a lot of important Hawaii cases, this one came up in the context of standing to participate in the administrative review process. A Maui developer sought a permit under the Hawaii Coastal Zone Management Act from the Maui Planning Commission for an affordable housing project near Lahaina. Members of the Association, all of whom asserted they owned property adjacent to the project, asked the Planning Commission to intervene in the admin proceeding to object to the issuance of a  CZMA permit. The Association itself also sought intervention, asserting it had a stake in the outcome because the project might impact its environmental interests (things like local traffic, beach access, tsunami evacuation congestion, the cultural and historic importance of the land, storm water drainage, scenic views), and the sale and rental values of its members' properties. Slip op. at 8-9. The Commission declined, concluding the proposed intervenors did not have standing. 

The Association appealed to the circuit (trial) court under the Administrative Procedures Act, which affirmed. On secondary appeal, the Court of Appeals agreed with the Association that its members had standing because their environmental interests were threatened by the project. The developer sought discretionary review by the Supreme Court.

The court affirmed. The Association's members have standing to assert their constitutional due process property right to a clean and healthful environment. As we noted above, the court's conclusion that the Association's members had standing and that the Commission therefore wrongly denied its request to intervene -- as radical as that may be -- is not really a new one. In In re Maui Electric Co., 141 Haw. 249, 408 P.3d 1 (2017), the court already held the same. The only extension here is that the court put it in context of a shoreline development permit.

The court was careful to (supposedly) curb the extent of its ruling by noting that the property right in a clean and healthful environment is "defined by" the CZMA. See slip op. at 18. But this isn't really any kind of real limitation, since all it requires a potential intervenor do is connect the environmental right alleged to some statute, rule, or ordinance that might conceivably involve that right. As the opinion itself demonstrates, that task is an awfully simple one. The court easily made the connection by noting that the CZMA is a "law relating to environmental quality" (a very broad category under Hawaii law). And in administrative proceedings implementing these statutes, rules, or ordinances, the connection is even more facile, because by definition, the proceeding meets the "defined by" test.  

Several thoughts:

• The decision seems like an unnecessary reach. Long ago, in Town v. Land Use Comm'n, 55 Haw. 538, 524 P.2d 84 (1974), the Supreme Court concluded that neighboring property owners have a property interest (a real and distinct property interest) in administrative proceedings that might impact those rights. Here, the Association members alleged Town standing. Seems like that should have resolved the standing issue without going further.
• Environmental standing is so broad, it has effectively swallowed up all "lesser" bases for standing, such as Town. The connection between a potential intervenor's environmental property rights, and some statute, rule, or ordinance is beyond easy to make, so why would any intervenor allege anything else but environmental standing?
• Is there a limiting principle on the scope of environmental standing? If there is, we can't see any.
• On the other hand, Hawaii's standing bar is already so notoriously low, it has little substantive consequence. Standing, as you know, is designed to keep courts away from cases that are more policy than legal disputes. Not being subject to Article III case and controversy requirements as are federal courts, the Hawaii courts have crafted their own standing doctrines, primarily to avoid advisory opinions. But that bar is already very low in original jurisdiction actions, and even lower in administrative proceedings that the doctrine fails to serve its purported function. Standing is simply a pleading game that no competent lawyer should fail: come on in, the water's fine!
• One word of caution: the court's holding that environmental interests are "property" places the rationale squarely within the "legitimate claim of entitlement" type of government-created property for purposes only of procedural due process (the type of interest that gets your some kind of pre-deprivation notice and some opportunity to be heard), and to that extent, the ruling is limited. This case and its progeny do not signal that the Hawaii Supreme Court is expanding property rights (and by those we mean actual property rights) in any way. That may come in other cases, but not this one.

Will this be the last case which concludes that generalized environmental interests are property under Hawaii law? We doubt it, so stay tuned.

Protect and Preserve Kahoma Ahupuaa Ass'n v. Maui Planning Comm'n, No. SCWC-15-0000478 (Haw. June 16, 2021)

Euclid Lives! Mass SJC: "Short-Term" Rental Is Not A Permissible Primary Use In A Residential Zone Because Not Of "Residential Character"

A short, land-usey one today, from the Massachusetts Supreme Judicial Court. In Styller v. Zoning Board of Appeals, No. SJC-12901 (June 7, 2021), the court held that the plaintiff's "occasional" use of a home to rent to others short-term is not a legal primary use of property in a "single residence' zoning district.

The facts were not in dispute:

• 5,000 sf, five bedroom, single-family home, three acres of land
• "single-residence" zoning district
• owner rented premises 13 times, totaling 65 days
• rentals were between 2 and 15 days
• most were 5 days or less
• use during the rentals: reunions, board meetings, business retreats,

The town cited the owner, and the Land Court agreed that these uses were illegal "additional" uses because they constituted unauthorized use either as a boarding house or a tourist home. 

The owner appealed, and the SJC took over the case. The owner argued that these uses were not unauthorized "additional uses," but were instead permissible principal uses as a single-family detached home. In response, the town argued that the zoning code prohibits any uses not expressly permitted, and since short-term rentals are not expressly permitted, the uses are illegal.

Skip all the way down to page 15 of the slip opinion unless you want to get into the reasons why the SJC considered the case despite the landowner having sold the property during the pendency of the case (short story: the issue is really important, so we're going to address it).

The court first agreed with the owner, and held that the owner's use was "was not an unauthorized 'additional' use" (say that three times). The use did not qualify as a "lodging house" (an authorized additional use), because in lodging houses, the renters are given specific rooms, and not, as here, the entire premises. Slip op. at 16-17. And in lodging houses, the owner maintains the home as their own residence. The court also rejected the characterization of the use as a "tourist home." Again, these things rent rooms, not the entire house. Slip op. at 19. Things looking up for the owner.

But the court ultimately made a broader ruling. It held that the uses the owner was making were illegal as a principal use in a residential zone:

The plaintiff's argument is fundamentally flawed because it fails to recognize that short-term rental use of a one family home is inconsistent with the zoning purpose of the single-residence zoning district in which it is situated, i.e., to preserve the residential character of the neighborhood. See, e.g., Rogers v. Norfolk, 432 Mass. 374, 380 (2000) ("preservation of the residential character of neighborhoods is a legitimate municipal purpose to be achieved by local zoning control"). Indeed, courts have long recognized that municipalities may regulate in order to protect communities' "residential character," Euclid v. Ambler Realty Co., 272 U.S. 365, 394 (1926), and to make neighborhoods "a sanctuary for people," Belle Terre v. Boraas, 416 U.S. 1, 9 (1974).

Slip op. at 19-20.

The court didn't focus on the duration of the rentals (see slip op. at 4, n.6; 15 n.15), and instead looked at the character of the use. Short-term occupants don't have that sense of community, the "stability and permanence" in a neighborhood. "Residence," the court concluded "is commonly understood to mean 'the place where one actually lives as distinguished from his domicile or a place of temporary sojourn.'" Slip op. at 21 (quoting Webster's New Collegiate Dictionary 1003 (1985)).

And here's the "buried lede" in the story that, we think, had a lot to do with the outcome:

Most frequently, the rented premises were used for family reunions, but they also were used for a college reunion, a corporate board meeting, business retreats, and "photo shoots." Renters were given exclusive possession of the property during the applicable rental period; the Styller family stayed elsewhere. Although each rental was arranged by a single booking guest, ten of the plaintiff's thirteen rentals had a group of six or more guests (including the booking guest).

In May 2016, a shooting incident during a weekend rental left an individual dead at the plaintiff's property. [Cue "record scratch" sound.]

Slip op. at 4-5 (footnote omitted) ("Styller rented the premises to an individual who was part of a group of six overnight guests, purportedly for the purpose of hosting a college reunion. More than one hundred people came to the premises for the event, and one person was shot and killed.").

Many news stories covering the shooting called the home a "mansion" or a "party house." Not exactly the most sympathetic plaintiff to bring this issue up, we're guessing, and this had a lot to do with the court concluding this wasn't a "residential" use of the property (we know it when we see it).

Check it out.

Styller v. Zoning Board of Appeals, No. SJC-12901 (Mass. June 7, 2021)

NM Supreme Court's Advisory Opinion: COVID Orders "cannot support a claim for a regulatory taking" - Health Measures Are "Background Principles"

The New Mexico Supreme Court

In what amounts to an advisory opinion, in State of New Mexico v. Wilson, No. S-1-SC-3850 (June 7, 2021), the New Mexico Supreme Court (courthouse pictured above) concluded that the State's public health orders that impose "restrictions on business operations regarding occupancy limits and closures cannot support a claim for a regulatory taking requiring compensation[,]" either under the New Mexico Constitution or under New Mexico's statutes.

We just published an article in the William and Mary Bill of Rights Journal about the subject of "coronavirus takings," so naturally we're intrigued by what the New Mexico court has to say. If you are also interested, read on.

This case is in the Supreme Court as a result of the State's petition, asking the court to weigh in after 14 separate lawsuits were filed by business owners and others challenging the state's orders that "restricted mass gatherings and the operations of certain businesses, requiring some to close entirely." Slip op. at 4. The restrictions included capacity limitations, differentiated between types of establishments, and tiered reopenings. In each of the cases, the plaintiffs are seeking compensation (inter alia, one presumes).

The Supreme Court ordered briefing and stayed the lower court lawsuits. 

Hold on, you say, shouldn't the court let the lower court lawsuits develop, and just rule on one of them that works its way up the appellate food chain? No, the court concluded, these are "exceptional circumstances" in which the court's exercise of its superintending control because "[t]he potential compensability of alleged injuries caused by the PHOs raises a question of public importance that will benefit from resolution. There is an obvious public interest in ensuring fair and consistent adjudication of an issue touching the concerns of thousands of owners of business property throughout New Mexico." Slip op. at 11.

So let's settle the question now, employing what the court called "legislative facts."

The court first addressed the claims under the New Mexico constitution. The State's main argument was that these orders were valid exercises of police power to respond to a public health emergency. Slip op. at 13. Thus, the State argued, no taking. [Barista's note: our article referenced above addresses such arguments, concluding that the validity of the government's exercise of police powers should not play any substantial role in a takings analysis.]

The opinion thus spends a lot of time on what we think is a red-herring issue. Yes, the State has the power to act to preserve the public health. But as we noted, this is a very "due processey" analysis, not really one for takings. See slip op. at 17 ("Otherwise, a reasonable exercise of the police power comports with due process."). See also slip op. at 25 ("Regulation under the police power that does not bear a reasonable relationship to the object for which it was enacted will be 'deemed ... invalid.'").

The court concluded that the regulations were reasonable exercises of the police power. Slip op. at 27. To us, that merely establishes the predicate question (takings generally must be the product of valid exercises of government power).

The court gets to what we think is the heart of the analysis at page 32 of the opinion. Likening COVID regulations to those that address a public nuisance, the court concluded that "[s]ince 'there is no ‘taking'' where this exception applies, id., the PHOs, as reasonable use regulation to prevent injury to the public health, are insulated from further takings analysis." Slip op. at 33-34. [Barista's note: if that's correct, there is no such thing as a regulatory taking, is there? After all, under the rational basis test, courts are not supposed to weigh or rank-order various species of police power regulations, are they?]

Next, the court concluded that the temporary nature of the COVID regulations means they are not takings. Slip op. at 35. We think this one is pretty weak sauce on the court's part, since we all know that temporary restrictions can be takings requiring compensation, and the temporary nature of the regulations does not give the government a free pass.

The court pays what we see as lip service to the notion that "courts cannot simply ratify the decisions of a coordinate branch of government," and that "[e]ven during a public health emergency, the judiciary cannot write a blank check to the executive or legislative branch." Slip op. at 36. But in our view, that's exactly what results from the court's faulty analysis for a couple of reasons.

First, it effectively recasted the takings and compensation claims as due process claims. As we've noted, however, these are radically different inquiries, with the due process question asking whether the regulations are (un)reasonable, and the takings question by contrast asking whether it is fair to impose the costs of otherwise reasonable regulations on the plaintiffs. Second, having taken the wrong fork in the road, the court then exacerbated the error by concluding that the regulations can't be takings because the regulations are reasonable. See slip op. at 36 ("It is in this light that we have taken judicial notice of changes over time regarding the PHOs and the circumstances of the public health emergency. Our reasonableness conclusion herein incorporates those changed realities.").

In the very next sentence, the court concluded:

However, the only question for this stage of analysis is whether the uncontested public health purpose of the PHOs insulates those orders against takings analysis. As we have established, the answer is “yes.”

Slip op. at 36.

The opinion dismisses the economic impact calculation (under Lucas and [presumably] Penn Central) by likening the public health regulations as "nuisance prevention" measures:

New Mexico’s background principles of public nuisance law clearly affirm the power of the State to prevent injurious use applicable to the PHOs.

...

Based on our clearly established background principles of state nuisance law, the public nuisance exception to the categorical rule in Lucas would apply to a claim against the PHOs alleging total deprivation of all beneficial use.

For the foregoing reasons, a Lucas claim against the PHOs cannot avail the Real Parties.

Slip op. at 38, 40. 

Finally, the court concluded that the business owners would not be entitled to compensation under the New Mexico statute requiring compensation for property taken during emergencies. The court held that when the statute refers to "property," it means "health care supplies" and "health facilities," not literally any property such as business (in other words, when your hospital or medical supplies are commandeered). Check out that part of the opinion if you are interested.

In sum, here are your takeaway points from the opinion:

• Advisory opinion (or pretty close to one). We think the court wanted to nip these cases in the bud, and tamp down any takings claims.
• Although the court cited a lot of U.S. Supreme Court takings cases, this case was solely under the New Mexico Constitution, not the Fifth or Fourteenth Amendments. So we suppose it is still an open question if the business owners take their federal takings claims to a federal court.
• The conflating of the due process and takings inquires really throws the court's analysis askew, in our view.
• If health regulations are really just background principles and nuisance prevention, is there anything left of the regulatory takings doctrine?

New Mexico v. Wilson, No. S-1-SC-38510 (N.M. June 7, 2021)

Sixth Circuit Says No To Res Judicata As The Latest Williamson County Workaround

Check out the U.S. Court of Appeals for the Sixth Circuit's opinion in Harrison v. Montgomery County, No. 20-4-51 (May 11, 2021). It's short, readable. And, most importantly, involves a subject that's near and dear: takings, and the myriad potential traps that await an unsuspecting property owner making such a claim.

If you've ever asserted a takings claim, you know what we mean. The other side may argue you are too late (statute of limitations, for example), or too early (ripeness, in one form or another), or, remarkably, you are both too early and too late (yeah, that happens). Or simply that property questions are not worthy of the court (abstention). And these arguments are often not presented in a clear way -- more like "here's a bunch of reasons to throw this case out Judge, see which one you like" -- and navigating through them is often like dealing with the Gordian knot.

Harrison wasn't much different, but the court -- thankfully -- parsed it out.

There, the takings claim challenged Ohio's scheme that allows municipal boards of revision to foreclose tax delinquent properties then transfer them to a land bank instead of selling the properties. An owner may reclaim the property by squaring up the back taxes owed, or may challenge the process in the board of revision, or may appeal the board's decision in a state court.

The program differs from the usual process (foreclosure followed by sale at auction) by allowing municipalities to retain the entire value of the properties without regard to the amount of the tax delinquency. By contrast, in the usual process the government only has a right to the amount of the sales proceeds to cover the delinquent taxes plus fees, and if the proceeds exceed the amount owed in taxes, the government is required to provide the owner with the difference.

The land bank scheme was a taking the (former) owner argued because he had no way to get the surplus back, and he sued. The district court dismissed, concluding that the owner could have -- and therefore must have -- raised a takings defense in either the board of revision proceedings on on appeal in an Ohio state court. Because the owner did not raise a takings defense, and the board's decision is now final because the owner didn't appeal, he was precluded from raising takings in a subsequent complaint. Could have raised a takings claim in a now-final case but didn't = res judicata. 

The Sixth Circuit disagreed, primarily because Harrison was not required to have raised a takings defense in the administrative process. See slip op. at 10 ("But whether Harrison could have raised her takings claim on appeal is a far cry from insisting she had to.").

Harrison conceivably might have raised a takings defense in the board (although as noted below, that would have been anticipatory pleading), or in the course of an appeal to Ohio's courts (presumably under the state's administrative procedures act). But he did neither. Before Knick, that might have been a problem, the Sixth Circuit concluded. But not after Knick:

Harrison had no obligation to invoke the federal takings clause before the Board of Revision to stop title transfer in the first place. In the State’s view, she should have answered the foreclosure complaint by arguing that the takings clause barred transferring title to the property. But, again, this approach shortchanges the reality that Williamson County’s first requirement—that there be a “final decision” effecting a taking—remains in place after Knick. The taking, so far as federal law is concerned, happened when the Board adjudicated the foreclosure of Harrison’s property through the land bank process, not before.

Besides, how could Harrison have known to bring a takings-based defense in the first place? The Board did not find that her home’s value outstripped the total delinquent taxes until it decided the foreclosure action. The final decision came a year after the County treasurer brought proceedings and nearly ten months after Harrison answered the complaint. Consider, too, that in the foreclosure complaint, the County Treasurer asked that the property “be sold according to law” or that it be “conveyed to a township.” R.17-2 at 7. As the County concedes, its complaint did not establish that Harrison’s property would be transferred to a land bank. See Appellant’s Br. at 7. Had the County sold the property at a public auction, Ohio law would have permitted Harrison to recover any surplus. See O.R.C. § 5721.20. Until it became clear the State would seize Harrison’s surplus equity by transferring title—a decision reached only when the Board adjudicated the foreclosure—no taking occurred. See Williamson Cnty., 473 U.S. at 186.

Slip op. at 9.

In other words, any attempt by Harrison to assert a takings defense would likely have been challenged as not ripe by the Town for lack of a "final decision." 

So yes, if you (1) can raise a ripe takings defense in admin proceedings, and (2) you choose to do so, and (3) you later fail to administratively appeal (administrative res judicata or full faith and credit), you may be precluded from asserting the same argument in a later complaint. See slip op. at 10 ("if a plaintiff chooses to pursue an administrative appeal, claim preclusion may bar a later attempt to seek the same relief"). But you don't have to raise the defense, especially when would have been too early to do so.

Before remanding the case to the district court to allow it to address the merits of Harrison's takings claim, the Sixth Circuit posed this missive, and gave the parties and the court below a hint on how the panel sees it:

That leaves the merits of Harrison’s federal takings claim, which implicates debates going back to the founding. On the one hand, in the words of Justice Chase, Harrison’s argument rests on the venerable proposition that “a law that takes property from A. and gives it to B . . . is against all reason and justice.” Calder v. Bull, 3 U.S. 386, 388 (1798). “If, on the other hand,” in the words of Justice Iredell, “the Legislature . . . shall pass a law, within the general scope of their constitutional power, the Court cannot pronounce it to be void, merely because it is, in their judgment, contrary to the principles of natural justice. The ideas of natural justice are regulated by no fixed standard: the ablest and the purest men have differed upon the subject; and all that the Court could properly say, in such an event, would be, that the Legislature (possessed of an equal right of opinion) had passed an act which, in the opinion of the judges, was inconsistent with the abstract principles of natural justice.” Id. at 399. As a court that specializes in sequels, not premiers, we think it prudent to allow the district court to consider the merits of this claim in the first instance. In doing so, it may wish to solicit historical evidence about the meaning of a taking in 1791 and 1868 with respect to this kind of government action. Should either party appeal the district court’s ruling, this panel stands ready to handle the appeal promptly.

Slip op. at 11-12.

This one isn't over, so we shall keep following along. Disclosure: my law firm colleagues at Pacific Legal Foundation filed an amicus brief in support of the property owner.

Harrison v. Montgomery County, No. 20-4051 (6th Cir. May 11, 2021)

Fed Cir: FCC Giving Isn't A Taking - Don't Disguise Your Challenge To Reduction In Subsidies As A Takings Case

Go read the Federal Circuit's opinion in Sandwich Isles Communications, Inc. v. United States, No. 20-1446 (Apr. 1, 2021), especially the very-dense fact section. There's a lot there: acronyms, bureaucracy-speak, family-insider politician dealings, tax fraud convictions, and the like. So what's a case like this doing in the Court of Federal Claims and the Federal Circuit, which (for our purposes) deals with takings claims against the United States?

Skip forward to page 7, where we get to the heart of the plaintiff's complaint:

In January 2019, SIC filed this suit in the Claims Court, alleging that the cumulative effect of the FCC’s reductions in SIC’s federal subsidies resulted in a taking of property without just compensation.

Slip op. at 7 (footnote omitted).

Yes, you read that right: this was a violation of the Givings Clause.

Consequently, the CFC dismissed the complaint for lack of subject matter jurisdiction. First, because this really sought review of the FCC's actions (and you know you don't go to the CFC for that kind of review, you go to the court of appeals. Second, because there's no property interest "in receiving support payments from FCC-administered funds." Slip op. at 8.

The Federal Circuit affirmed. You can't bring a Tucker Act claim (a "gap filler" as the court noted) when Congress has otherwise provided a comprehensive, detailed statute that provides its own remedies. The Federal Communications Act is one of those latter types. Comprehensive. Detailed. With a specific judicial review provision. The question the Federal Circuit resolved was whether in the Communications Act, Congress intended to withdraw Tucker Act jurisdiction. Yes, the court concluded (and it wasn't a new issue). In a recent 2018 decision, the Federal Circuit held that the Communications Act did just that. Examining the "true nature" of the plaintiff's claim, the court concluded that it really just seeks review of the FCC's order:

In analyzing whether subsection 402(a) applies, we “must look to the true nature of [the plaintiff’s] claim, not how plaintiff characterize[s] it.” Folden, 379 F.3d at 1359 n.13. Here, SIC’s takings claim is based on its disagreement with FCC decisions regarding the amount of subsidies SIC could receive from the USF and NECA pools. SIC also takes issue with the FCC’s 2013 order, which denied SIC’s petition for waiver of the $250 per-line, per-month cap on high-cost universal service support. These allegations take aim at FCC orders and seek to “enjoin, set aside, annul, or suspend” them. See 47 U.S.C. § 402(a). Because SIC’s takings claim challenges FCC actions and orders governed by 47 U.S.C. § 402(a), the statutory scheme set forth in the Communications Act displaces the Claims Court’s Tucker Act jurisdiction.

Slip op. at 14-15. No we didn't, the plaintiff asserted, "this is a takings case, not a challenge to the order."

Sorry, no deal held the court. The claim "is premised on [the plaintiff's] disagreement with the amount of subsidy funding it has received from the FCC-administered funds[.]" Slip op. at 15. Go take it up -- including your takings claim -- with the FCC as the statute requires.

SIC also maintains that it could not have raised its takings claim as a challenge to any FCC order because “a takings claim asserted in an appeal from the FCC’s order would be unripe.” Appellant’s Br. 12–13. At the same time, however, SIC alleges that “a confiscatory rate takings claim is ripe when its impacts are known” and the “impacts of the FCC’s 2011 rates have been fully manifested.” Id. ready ripe when SIC filed its 2015 petition.” Id. SIC’s ripeness allegations, which seem to be a moving target, miss the mark. The fact remains that SIC has not raised its takings claim before the FCC, which it was required to do be-fore seeking judicial review. See Williamson Cnty. Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 194–95 (1985) (“[A] claim that the application of government regulations effects a taking of a property interest is not ripe until the government entity charged with implementing the regulations has reached a final decision regarding the application of the regulations to the property at issue.”), overruled on other grounds by Knick v. Twp. of Scott, 139 S. Ct. 2162, 2179 (2019).

Slip op. at 15-16.

What about the CFC's alternative basis for dismissal, the conclusion that the plaintiff does not possess a property interest in a government subsidy? No analysis from the Federal Circuit, other than "[w]e have considered SIC's remaining arguments and find them unpersuasive." Slip op. at 17.

There's a lesson this case teaches: takings claims are takings claims, and not a desperate last-line-of-defense solution to every legal problem.

Sandwich Isles Communications, Inc. v. United States, No. 20-1446 (Fed. Cir. Apr. 1, 2021)

Cal App: Taking Verdict Affirmed - When City Asserts That Its No-Development Law "trumps whatever you might submit," It Would Have Been Futile For Property Owner To Submit Development Application

We suggest you take a read through the California Court of Appeal's opinion in Felkay v. City of Santa Barbara, No. B304964 (Mar. 18, 2021). It's all there: Lucas wipeout takings, futility and exhaustion, coastal zone property rights.

This is an inverse condemnation case, seeing compensation for the city denying the owner any economically beneficial use of his property, because it was on a bluff face. Under the city's ordinances, bluff faces can't be built on. The planning commission staff said so, but they also recommended to the commission that this would be a taking, and the commission should therefore employ the takings safety-valve provision in the ordinance which allows the city to approve development if denial would be a taking (to paraphrase that old lung-dart commercial, "it's better to switch than to fight").

"No deal" the commission said, rejecting staff's recommendation, "we'll show 'em who is boss! We'd rather fight. Our law says there's no building on land we think is on a bluff face." City council concluded the same.

Property owner then filed both a writ of administrative mandate (APA appeal for all you non-Californians) and an inverse condemnation complaint, collectively asking the court to allow development and require compensation. Responding to the writ request, the city argued that substantial evidence supported its conclusion that the owner's land fit within the definition of "bluff," and the court agreed. But the court allowed the inverse claim to go to trial to test the city's claim that the takings/inverse claim wasn't ripe (hey, there may be other uses that can be made on that bluff!), and to determine compensation. 

The city's project planner (Kennedy) testified, and when asked by the trial judge whether anything could be built on property deemed to be on a bluff, she responded:

“I would say that they received a denial for that, so that’s the case.” The court later asked Kennedy why the city did not just tell Felkay at the beginning that “8.2 trumps whatever you might submit. We’re not going to allow anything on the bluff face. Don’t submit anything. . . .

Slip op. at 6. The court concluded that it would be futile for the owner to seek further denials of development, and that there was a taking. After the court concluded there was a taking, it gave the city a choice: pay up for the taking or back off. The court convened a jury to determine compensation. The jury awarded compensation of $2.4 million.

The court of appeal affirmed both the ripeness conclusion and the (unappealed) jury verdict:

The city contends that the inverse condemnation claim was not ripe because after the city denied his permit application, Felkay did not submit a revised application. We disagree.

...

The trial court found the city’s expert, Kennedy, to be “a defining witness in the case” who “convinced [the court] that there would be NO POINT in going back to seek mitigation.” The court did not err in crediting her testimony. (Cf. Benson v. California Coastal Com. (2006) 139 Cal.App.4th 348 [commission not estopped by staff member’s telephone call that applicant need not attend hearing].) Felkay was not required to submit a second proposal because the city “made plain” it would not allow any development below the 127-foot elevation, and because the area above that elevation was “not buildable.”

Slip op. at 9, 11.

In short, when the law itself prohibits any development, and that is confirmed both by the city's own actions and the testimony of its expert that the law "trumps" any application, an owner doesn't need to ask to get denied again.

Check it out.

Felkay v. City of Santa Barbara, No. B304964 (Cal. App. Mar. 18, 2021)