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New Cert Petition: "It is Time to Recognize the Judicial Takings Doctrine"

Interested in the intriguing question of whether a court ruling can "take" property? If so, check out the latest cert petition on the issue.

Let's start with the Questions Presented:

1. Is a state supreme court able to "side-step" the just compensation requirement of the Fifth and Fourteenth Amendments by simply removing preexisting property rights of owners to real property?

2. Is the North Carolina Supreme Court’s decision in holding that an established right of private property no longer exists a taking in violation of the Fifth and Fourteenth Amendments to the United States Constitution?

3. Is the North Carolina Supreme Court’s grant of title and ouster of property rights without payment of just compensation a violation of the due process clauses of the Fifth and Fourteenth Amendments to the United States Constitution?

You remember the last time that the Supreme Court ventured into this area, it wasn't exactly a satisfying result, although we got a bizarre analogy from Justice Scalia, and we personally got a law review article out of it.

This latest petition argues that the North Carolina Supreme Court altered the state's property law in a case that started off as what appears to be a rather run-of-the-mill ownership and trespass dispute between the Kisers and Duke Energy over a retaining wall on the bed of Lake Norman.

The alleged judicial taking occurred when the North Carolina Supreme Court affirmed a trial court's order that concluding the Kiser property is subject to an easement in favor of Duke Energy:

Under the Trial Court Order, property went not from A to B, but from A to C without compensation and foreclosed any economic benefit in the Kiser Lake Parcel. App.48a. This is a taking on every conceivable level. Sunset Keys cannot build on the Kiser Lake Parcel, it cannot collect rents and it cannot exclude others. The entire bundle of sticks that represents property interests were removed by the Trial Court
Order.

Pet at. 18.

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

Petition for a Writ of Certiorari, Kiser v. Duke Energy Carolinas, LLC, No. (U.S. Sep. 18, 2023)

New Cert Petition: California's Escheat Procedures Cheat Due Process (And Take Property To Boot)

Here's the cert petition, recently filed, which asks the Supreme Court to review the California courts' decision that the state's "unclaimed property" statute  -- by which the State is able to grab billions of dollars of private property on the theory that the owners abandoned it. The statute requires the State to try and locate the owners, but the petition alleges the procedures do not provide adequate notice to the owners, and that the State doesn't really try all that hard to tell them.

Here are the Questions Presented:

1. Whether the Controller’s actions under color of the California Unclaimed Property Law, Cal. Civ. Proc. Code §§ 1300, et seq. (“UPL”), violate the Due Process Clause of the Fourteenth Amendment because they deprive owners of their property without affording constitutionally adequate notice.

2. Whether the Controller’s actions under color of the California UPL violate the Takings Clause of the Fifth Amendment because they take private property without just compensation.

This issue was left open by the Supreme Court's recent decision in Tyler v. Hennepin County, which held that the government keeping excess funds after a tax foreclosure sale was a taking, and rejected the County's argument that the homeowner had abandoned the excess by failing to pay her property taxes. The Court noted that for property to be deemed abandoned, the government must, at the very least, make some kind of process available for the owner to reclaim it that is reasonably designed to let them actually reclaim it:

The County portrays this as just another example in the long tradition of States taking title to abandoned property. We upheld one such statutory scheme in Texaco. There, Indiana law dictated that a mineral interest automatically reverted to the owner of the land if not used for 20 years. 454 U. S., at 518.

...

“It is the owner’s failure to make any use of the property”—and for a lengthy period of time—“that causes the lapse of the property right.” Texaco, 454 U. S., at 530 (emphasis added). In Texaco, the owners lost their property because they made no use of their interest for 20 years and then failed to take the simple step of filing paperwork indicating that they still claimed ownership over the interest.

Tyler, slip op.at 13-14.

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

Petition for Writ of Certiorari, Hashim v. Cohen, No. 23-195 (U.S. Aug. 29, 2023)

New Cert Petition: Overrule Penn Central!

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

In this cert petition, the property owner is asking the U.S. Supreme Court to review an unpublished decision of the Ninth Circuit which rejected both Lucas and Penn Central takings claims.

Here are the Questions Presented:

1. Should this Court overrule in its entirety, or reconsider parts of, Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978)?

2. Does the “economic impact” of a regulation on the subject property have to approach total loss of use and value to weigh in favor of a taking under Penn Central, as the District Court and Ninth Circuit held below?

3. Can a property owner ever have “distinct investment-backed expectations” for the beneficial use of property, for purposes of alleging a Penn Central taking, if restrictive downzoning is adopted before development of the property is undertaken?

4. Should the “character of the government action” prong of Penn Central be expunged from takings analysis as conflicting with Loretto v. Teleprompter Manhattan CATV Corp., 458 US 419 (1982) and Lingle v. Chevron USA Inc., 544 US 528 (2005)?

5. Does a zoning regulation that places property in a zone for which no beneficial uses are authorized violate the categorical taking rule of Lucas v. South Carolina?

Follow along here as we'll be watching the case as it progresses, or on the Court's e-docket.

Petition for a Writ of Certiorari, Craneveyor Corp. v. City of Rancho Cucamonga, No. 23-169 (U.S. Aug. 18,...

Still Time To Join Us Wed Aug 9: ALI-CLE's "How Did Property Rights Fare at the Supreme Court? What Happened in the 2022 Term and What's Next"

Tomorrow, Wednesday, August 9, 2023 at 1:00 - 2:00 p.m. (Eastern Time), please join us for ALI-CLE's web program, "How Did Property Rights Fare at the Supreme Court? What Happened in the 2022 Term and What's Next."

Here's the course description:

This has been a blockbuster U.S. Supreme Court term for property law, with the Court deciding three major property cases: Tyler v. Hennepin County (government’s keeping the excess value when seizing and selling a home to satisfy a property tax debt is a taking), Wilkins v. United States (is the federal Quiet Title Act’s statute of limitations a jurisdictional bar?), and Sackett v. EPA (the scope of Clean Water Act wetlands jurisdiction). To gain a better understanding these opinions, the current state of takings and property law, and what these cases mean for your practice, join a distinguished panel of experts for this one-hour webcast. The faculty will also explore what these decisions mean for the future and what steps lawyers can take to incorporate these decisions into their practices.

Among the things we'll be analyzing and discussing:

• What happened in each case and how the Court ruled
• The practical consequences of the decisions
• What new rules practitioners must understand
• What Sackett means for the efforts to define “Waters of the United States”
• How courts will treat the question of “what is the property” in takings and eminent domain litigation
• How you can avoid statute of limitations problems
• Where the Supreme Court might be going next and what issues remain open

I'll be moderating, and joining me will be takings and property experts lawprof Emilio Longoria, and Sophia Holley (Keating Muething & Klekamp).

We will also have a preview of the 2024 Eminent Domain and Land Valuation Litigation Conference, February 1-3, 2024, New Orleans.

Come, join us. The format allows for a lot of questions, interaction, and open discussion. As usual, there are group discounts.

Recognizing A Property Rights Icon: "Mentors, A Path to Fairness, and the Joy of Taking"

We recently attended the American Bar Association's Annual Meeting in Denver to speak at the Section of State and Local Government Law's program, "The 100th Anniversary of Pennsylvania Coal v. Mahon: How the Takings Clause Became the Primary Check on Government Power When SCOTUS Abandoned Review Under the Due Process and Contracts Clauses During the New Deal."

But the real highlight of the Meeting was the Jefferson Fordham Awards which, as we noted earlier, were presented to property rights icon Michael Berger, who the Section recognized with the Daniel J. Curtin, Jr. Lifetime Achievement Award.

Also noteworthy: the presentation of the Anita P. Miller Advocacy Award to land use law giant, Professor John R. Nolon, and the Up and Comer Award to a former William and Mary student (and now colleague) of ours, Makenna X. Johnson. 

Professor Frank Schnidman introduced Michael Berger and we thought it important to share his remarks with all of you, because he highlights Berger's commitment to fairness and the rule of law, and the importance of mentorship.

Frank graciously consented to us reprinting his remarks here.

******

Chance Glance: Mentors, A Path to Fairness and the Joy of Taking

Professor Schnidman introducing Michael Berger

American Bar Association, State and Local Government Law Section

Jefferson B. Fordham Awards Luncheon, August 4, 2023

Introduction of Michael Berger, Senior Counsel, Manatt Phelps & Phillips, LLP

by Frank Schnidman, John M. DeGrove Eminent Scholar at Florida Atlantic University, School of Urban and Regional Planning

Good afternoon.

First, I want to thank the ABA State and Local Government Law Section for giving me the opportunity to introduce my friend and colleague Michael Berger.

I was introduced to Michael Berger more than 50 years ago, and for over more than 30 years I have personally had the opportunity to watch Michael carefully and patiently educate 1,000s of attorneys, public officials, academics and students about “Fairness.”

In 1975 Michael wrote a law review article, To Regulate or Not to Regulate - Is That the Question? Reflections on the Supposed Dilemma Between Environmental Protection and Private Property Rights, 8 Loy. L.A. L. Rev. 253 (1975). Yes, 1975!

As so many others have recognized, Michael spent the next 48 years working on cases that would provide a path to an understanding that the only valid understanding of constitutional property rights must recognize the concept of fairness.

Michael stated those many years ago that:

“What is urged is that 'the public' take a long, hard look at what its needs are, assess all the costs involved, and proceed accordingly.

“If ‘the public’ wants land uses (or non-uses) which benefit ‘the public’ generally, then ‘the public’ should buy the property, or an appropriate interest in the property, rather that attempt to force individual property owners to devote their property to public use without compensation.”

Michael will discuss his path to “fairness,” and his “Joy of Taking” in a moment.

He will share with you that he has argued 4 significant cases before the United States Supreme Court, and that for me, for many years, he made an annual pilgrimage to the University of Miami School of Law where I ran the LL.M. Program in Real Property Development to teach a one week one-credit, 15-hour course on regulatory takings. Ultimately, a few hundred real estate attorneys going back to practice were better able to represent their clients.

There is such great detail to mention in describing why Michael is here before us today, and Professor Patty Salkin distilled it so well in her Nomination Package, a document that highlights the litigation and scholarship. That nomination is attached at the end of my Introduction.

“Chance Glance” is the title of my introduction. That actually is how it all began.

A chance glance at a bulletin board at Washington University School of Law and the notice that Professor Dan Mandelker was looking for a research assistant started Mike on his career path. Michael worked for Dan for two years, and unhappy with the difficulty of finding a law firm job in St. Louis, Dan introduced him to Professor George Lefcoe, who provided an opportunity to pursue an LL.M. at the University of Southern California School of Law – and allowed him to devote full time to research the evolving law as it related to airports and their neighbors. The USC Law Review published an edited version of his thesis as “Nobody Loves an Airport,” 43 So. Calif. L. Rev. 631 (1970).

Beginning in 1972, Michael argued all but one of the airport noise cases that came before the California Supreme Court.

Michael Berger, remarking on a remarkable career
Best applause line: "I'm not done yet!"

In the 1949-published Proceedings of the Annual National Planning Conference of the American Society of Planning Officials held in Cleveland, Ohio October 10-12, 1949, George N. Wallace, Executive Director of the Montgomery County (Ohio) Planning Commission reported on the then-current issues with airport expansion:

“The airport people are vitally concerned with our proposed zoning pattern. They have told me that they must keep their operations somewhat flexible if they are to serve future demands and meet changing developments. However, we must make precise decisions as to the probable expansion of our airports and accessory airport uses; we have to recognize the importance of the airport in its service to the community, and, at all times, give full consideration to the rights of adjacent landowners.”

It is regarding the “give full consideration to the rights of adjacent landowners” comment that Michael Berger held municipal planners and local elected officials “feet to the fire” to follow a path to fairness!

I am limited in time in what I can say in my introduction about Michael’s life journey. I therefore ask you to read two of his law review articles and an article from Planning magazine:

• The Joy of Takings, 53 Journal of Law & Policy 189-200 (2017).
• Strong and Informed Advocacy Can Shape the Law: A Personal Journey” 4 Brigham-Kanner Property Rights Conference Journal 1-20 (2015).
• What is Fairness, Anyway, Planning, October 2006, p. 12-18.

In conclusion, let me end with another quote from Mike’s 1975 law review article:

“There is room for regulation. More than that, there is a need for regulation. But if it is truly to serve our best interests, as a people, it must be balanced regulation: a type which is fair to all.”

That, my friends, has been Michael Berger’s life work, and that is why today we come together to honor him and to award him the 2023 Jefferson B. Fordham Lifetime Achievement Award.

Makenna Johnson (Up & Comer Award) with
Michael Berger (Lifetime Achievement Award)

26th Annual Jefferson Fordham Society Luncheon (Denver, Aug. 4, 2023)

Ohio S Ct In Power-To-Take Case: Too Soon!

The latest in a case we've been following doesn't get to the substantive issue: is a local park district authorized to take private property for a bike path when the statute authorizes takings for "conservation of natural resources?"

Instead, the Ohio Supreme Court dismissed the appeal for a familiar reason: lack of a final judgment. In Mill Creek Metro. Park District v. Less, No. 2022-0628 (July 11, 2023), the court did not consider the issue, but instead concluded the trial court proceedings were not yet final.

Here's how the case set up procedurally. The district instituted state court eminent domain actions to take Less's land for the bike path. Less objected, asserting that the district lacked the power to take land for a bike path. Less sought summary judgment on that issue, which the trial court denied. Normally, in the absence of some kind of interlocutory appeal, denials of summary judgment are not final, appealable orders. But the court of appeals ruled on the merits of the appeal, after concluding that the denial of Less's motion for summary judgment had the same effect as an entry of summary judgment in favor of the district. 

Not so fast, held the Ohio Supreme Court:

{¶ 12} An order denying summary judgment is not the type of order contemplated by R.C. 163.09(B)(3), because the denial of summary judgment is not a ruling “in favor of the agency in any of the matters the owner denied in the answer”; to the contrary, it is a ruling that demonstrates that there are genuine issues of material fact and therefore the moving party is not entitled to judgment as a matter of law, see Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). In other words, the denial of summary judgment merely leads to further proceedings in the trial court. See Balson v. Dodds, 62 Ohio St.2d 287, 405 N.E.2d 293 (1980), paragraph one of the syllabus (“A trial court’s denial of a motion for summary judgment is reviewable on appeal by the movant from a subsequent adverse final judgment”).

...

If the trial court rules in favor of the agency at the hearing, the case may then proceed to a jury trial to determine compensation unless the landowner exercises his or her right under R.C. 163.09(B)(3) to immediately appeal the trial court’s decision. R.C. 163.09 does not, however, give the landowner the right to an immediate appeal from the trial court’s order denying his or her summary-judgment motion. That order is not final and appealable.

Slip op. at 7.

No final order, no appellate jurisdiction. 

The court of appeals held that taking of a bike path is beyond the district's statutory authority to take because a bike path isn't a forest reserve, nor is it the conservation of natural resources, even though under a very generous and deferential reading of the statute, a bike path kinda, sorta, could be the conservation of a natural resource. To hold otherwise, the court concluded, means nearly anything could be the conservation of natural resources.

More on the case here: "Ohio Supreme Court Decision Explains Eminent Domain Procedures" (Morning Ag Clips)

So now we shall have to wait a bit more for the final answer from the Ohio Supreme Court (if any).

Mill Creek Metro. Park District v. Less, No. 2022-0628 (Ohio July 11, 2023)

Want To Find And Litigate The Next SCOTUS Landmark Property Rights Case? Come, Join Us

Ever thought to yourself when reading a Supreme Court property rights cert petition or opinion (or three), "I wish I could do that"?

That was me a couple of years ago.

And I found out. I joined the nation's premiere property rights courtroom lawyers and advocates, Pacific Legal Foundation. One of the best professional decisions I ever made.

Here's your chance. Today we posted this position opening on Talentmarket:

You find and win cutting-edge property rights cases in trial and appellate across the country. You work independently with minimal supervision, but as a part of a collaborative team. You are a leader and mentor who will elevate other PLF attorneys to be the best property rights litigators in the nation.

You will be a litigator in PLF’s Property Rights Practice Group. From Nollan to Koontz to Knick to Cedar Point Nursery to Tyler, PLF’s property rights litigation is unparalleled. You will 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.

If this is you: 4-7+ years property rights litigation experience, a deep understanding of the moral and constitutional basis for property rights, and a desire to find, develop, and press these cases as the highest levels ... come join us!

Texas Supreme Court: We Want To Resolve Whether Short-Term Renting Property A Natural Right, Just Not In This Case

In this order, the Texas Supreme Court declined to review a case we've been following, in which the court of appeals held that Grapevine's total ban on short-term renting of property -- banning even owners who had been doing so for a while -- might be a taking. The court held that even though the owners did not possess a classic vested right to continue using their properties to rent on a short-term basis, they owned their properties and that was enough. Property ownership comes with the "fundamental" right to rent it out and there's no need to show more, such as a vested right under state law. More details on the city's ban and the court's reasoning here.

The city sought discretionary review and somewhat unusually, the property owners agreed that this is an important issue worthy of the Supreme Court's review.

But even with everyone agreeing on that point, the Supreme Court passed. The court didn't offer any reasons for the denial 

Justices Young and Blacklock concurred separately to explain their reasoning. Agreeing that the "questions presented in this petition is of increasing and demonstrable importance[,]" and "this Court needs to weigh in on the heady constitutional issues at stake[,]" and that they both "tend to agree" with the parties and amici that the issue is teed up, they "nevertheless concur in the denial of the petition for review."

Why? Vehicle problems. Some of the usual administrative thicket to navigate. Maybe a future case will be simpler (in this case, the owners are challenging a single city ordinance, but in order to resolve the case, Justice Young noted that the court would be required to interpret a separate ordinance as well). And, somewhat oddly, the concurring opinion seems to invite the city to "adopt new regulatory measures if it deems necessary to do so." 

So let's wait, which might let "other lower courts ... opine on the issue."

Part of the chief appeal of the parties’ joint request that we take this case is that the issue is prevalent and important. I believe them. If that premise is right, then plenty of cases will come. If they do not, then today’s perceived importance and urgency will have turned out to be illusory. Either way, our State will be better served by a measure of patience from this Court, as frustrating as it may be to us and, even more, to the parties to this case. I accordingly concur in the denial of the petition for review.

Concurring op. at 5.

And hint for you advocates: don't forget to include analysis under the Texas Constitution (a thought Justice Young has expressed before).

So stay tuned. This one isn't likely over.

City of Grapevine v. Muns, No. 22-0044 (Tex. Jun 16, 2023) (Young, J., and Blacklock, J., concurring in the...

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)

ICYMI: "Property Rights Hat-Trick: Breaking Down PLF's Supreme Court Victories" (vid)

Missed our law firm colleagues Jeff McCoy, Damien Schiff, and Christina Martin when they were live, talking about their SCOTUS wins in Wilkins v. United States (is the statute of limitations in federal Quiet Title Act cases a jurisdictional bar?), Sackett v. E.P.A. (scope of Clean Water Act wetlands jurisdiction), and Tyler v. Hennepin County (government’s keeping the excess value when seizing and selling a home to satisfy a property tax debt is a taking)?

We recorded it, so you can watch and listen at your leisure.

This is more than just a victory lap, the advocates offer their thoughts on the implications of the wins, and what might be next.

Bon appétit.

Another Cert Petition Challenging NY's Draconian Rent Control As A Taking

Here's the latest in a case we've been following, one of the multiple challenges to New York's latest ratcheting up of rent control.

We think the Questions Presented spell out the issues pretty well:

New York has implemented the most sweeping and onerous rent control provisions the United States has ever seen in its Rent Stabilization Laws and accompanying regulations (“the RSL”). As recently amended, the RSL makes New York’s once “temporary” rent stabilization regime permanent for over one million apartments. Petitioners are owners of apartment buildings regulated by the RSL. The RSL expropriates a definitional feature of Petitioners’ real property—the right to exclude—by granting their tenants a perpetual right to renew their leases. The RSL closes off all viable exit options for Petitioners to change the use of their property and thus avoid RSL regulation. These provisions, when combined with the RSL’s ceiling on the rents that landlords can collect, have ensured that Petitioners cannot earn a just and reasonable rate of return. The RSL has dramatically reduced the economic value of Petitioners’ property beyond any reasonable expectation. Nevertheless, the Second Circuit held the RSL did not effect any taking of Petitioners’ property without just compensation.

The questions presented are:

(1) Does the RSL effect a per se physical taking by expropriating Petitioners’ right to exclude?

(2) Does the RSL effect a confiscatory taking by depriving Petitioners of a just and reasonable return?

(3) Does the RSL effect a regulatory taking as an unconstitutional use restriction of Petitioners’ property?

Stay tuned here, or follow along on the Court's docket.

Petition for a Writ of Certiorari, 335-7 LLC v. City of New York, No. 22-1170 (U.S. May 30, 2023) by RHT on Scribd

New Just Comp Cert Petition: Is Due Process Property Just Compensation Property?

A new cert petition to check out. We don't need to explain it much, because the petition does a good job of it.

Here's the Question Presented:

New York State redevelopment agency seized, via eminent domain, a large tract of real estate occupied by an existing building in downtown Brooklyn for redevelopment. The building, partially used for office space, included a useable basement of over 13,000 square feet, which had a government-issued certificate of occupancy. During eminent domain proceedings, the lower court ignored the certificate of occupancy’s determination of a usable basement as a valued property interest.

The question presented is:

1. Are government-issued attributes of private property (e.g., certificates of occupancy, building permits, business permits) entitled to constitutional protection under the Fifth Amendment when they are seized under the government’s eminent domain power, just as they are presently entitled to constitutional due process protection under the Fourteenth Amendment?

Follow along on the Court's docket here.

Petition for Writ of Certiorari, Pacific Carlton Dev. Corp. v. New York State Urban Dev. Corp., No. 22-1149...

New Takings Cert Petition (Ours): Can Govt Thwart Federal Court Regulatory Takings Claims By Seeking Abstention In Favor Of State Courts?

Here's the latest in a case we've been following since before it became one of ours.

In Gearing v. City of Half Moon Bay, No. 21-16688 (Dec. 8, 2022), the Ninth Circuit upheld the district court's dismissal of a regulatory takings case, holding that federal courts should abstain from considering regulatory takings cases in favor of pending state court eminent domain actions, even when the condemnor instituted the state court action after the federal takings lawsuit was filed.

In the time since the Ninth Circuit issued the opinion, our law firm has joined up with our colleague Kristen Renfro who represented the owner in the court of appeals. That's why we won't be commenting further, and instead suggest you read the cert petition we filed today, chiefly authored by Counsel of Record Deborah LaFetra (lately of the Tyler v. Hennepin County takings case). 

Here is the Question Presented:

Thomas and Daniel Gearing are categorically prohibited from building on residentially zoned vacant land that the City of Half Moon Bay prefers as an open space public park. They exercised their choice of forum by filing a lawsuit in federal court under 42 U.S.C. § 1983, alleging a regulatory taking in violation of the Fifth Amendment, and seeking just compensation, costs, and attorneys’ fees. The City responded by filing an eminent domain lawsuit in state court that significantly limits the issues and the Gearings’ remedies. The City then convinced the federal court to abstain from deciding the Gearings’ first-filed federal lawsuit under Railroad Commission of Texas v. Pullman Co., 312 U.S. 496 (1941). As a result of the forthcoming state court decision to which federal courts are bound to give full faith and credit, 28 U.S.C. § 1738, the Gearings will be deprived of full just compensation as well as other recovery authorized by the Civil Rights Act.

The question presented is:

Whether federal courts may deprive takings claimants of their chosen forum by invoking the prudential Pullman abstention doctrine to require them to first litigate their claims in state court.

Stay tuned, as always.

Petition for Writ of Certiorari, Gearing v. City of Half Moon Bay, No. ___ (June 1, 2023)

Who'll Stop The WOTUS? SCOTUS Dives Back In To Wetlands

Tyler v. Hennepin County wasn't the only property rights opinion issued by the Supreme Court in one of my law firm's cases last week.

There's this one, which we've been waiting a lot longer to drop (oral arguments were held on the first day of the Court's term back in October), Sackett v. Envt'l Prot. Agency, No. 21-454 (May 25, 2023). Like Tyler, this one is our law firm's, so we're not going to do much pundificating, and will leave that to others.

The clearest and most objective view (in our view) is that of lawprof Jonathan Adler, who analyzes the opinion over at Volokh Conspiracy in "In Sackett v. EPA, the Supreme Court Cuts Back Federal Regulatory Authority Over Wetlands." Or check out this Twitter thread by Ilya Shapiro.

Short story: all nine Justices agree that there's a limit to how far federal regulatory control extends, they just disagree about what is the limiting test; five of 'em seem to have adopted something close to the Scalia plurality from the Rapanos case, while the dissenting four go another way.

Bottom line: the EPA rule is no good, as is the Biden Admin's attempt to revise the rule midstream.

Biggest loser of the day: Justice Kennedy, since not a single Justice seems to like the "significant nexus" test.

Another victory for individual and property rights. That makes three this term for us. Not too bad. 

Sackett v. Envt'l Prot. Agency, No. 21-454 (U.S. May 25, 2023)

Tyler Takings Round-Up

Here are what others are saying about Supreme Court's recent ruling in Tyler v. Hennepin County, No. 22-166 (U.S. May 25, 2023), the case in which the Court unanimously held that the county's keeping the excess equity in Ms. Tyler's home over what she owed in property taxes and fees is an uncompensated taking of private property.

• As usual, lawprof Ilya Somin was first out of the gate with "Major Unanimous Supreme Court Victory for Property Rights in Tyler v. Hennepin County" ("While the Supreme Court decision left some notable issues unresolved, it nonetheless sets a significant precedent. Most obviously, the jurisdictions that currently authorize home equity theft—some twelve states and the District of Columbia—will no longer be allowed to do so. In addition, the holding that states cannot just redefine property rights at will has important implications for other property rights issues. It makes it harder for states to avoid takings liability.")
• Amanda Karras has this casenote at the International Municipal Lawyers Association's blog, "Supreme Court Rules Against County in Important Takings Case" ("States and local governments may also look to Nelson as guidance and provide a mechanism for the return of the surplus equity after the sale of the property.  That said, while Nelson remains good law, the question of overruling Nelson was not on the table, and it may be that such a scheme (which would allow a local government to keep surplus equity after the sale of the property if there is a mechanism for the return of the equity to the homeowner) may not be viewed favorably by the current Court and may also conflict with subsequent precedents from the Court.")
• Amy Howe, SCOTUSblog "Justices rule Minnesota county violated takings clause" ("The county pointed to a 1935 state law that strips an owner who falls behind on her property taxes of her interest in the property. Therefore, the county argued, there was no property for the government to take. The court disagreed, stressing that 'property rights cannot be so easily manipulated.' Indeed, Roberts observed, even Minnesota itself 'recognizes that in other contexts a property owner is entitled to the surplus in excess of her debt.' Although the county can sell Tyler’s condo to recover the $15,000 that she owes it, Roberts wrote, it cannot 'use the toehold of the tax debt to confiscate more property than was due.' By keeping the $25,000, Roberts concluded, the county 'effected a ‘classic taking in which the government directly appropriates private property for its own use.''
• Federalist Society webinar with Tony Francois, "Courthouse Steps Decision: Tyler v. Hennepin County, Minnesota" ("Join us as Tony Francois provides a detailed analysis of the decision and discusses the potential implications from this landmark ruling.").

We'll update as merited.

Unanimous SCOTUS: "state law cannot be the only source" Of Property Rights, And "traditional property law principles" As Enforced By The Takings Clause Play A Role

We'll be rendering to unto Caesar, but first we must
decide: classic or creamy?

That was quick: it seems like it was only yesterday -- or maybe more accurately, less than a month ago -- that we were listening in live to the Supreme Court as it heard arguments in Tyler v. Hennepin County, No. 22-166, our law firm's case which argues that Hennepin County's keeping the excess equity in Ms. Tyler's home over what she owed in property taxes and fees is an uncompensated taking of private property and also violates the Excessive Fines Clause.

This morning, the Court issued this unanimous opinion authored by Chief Justice Roberts (again proving he's the Court's "property guy"), in which the Court held that the County's seizing Ms. Tyler's condo to satisfy her tax debt and then "keeping the change" is a taking. It's a relatively short opinion with no dissents and a very short two-Justice concurring opinion laying out some thoughts on the Excessive Fines theory (which the majority avoided, see slip op. at 14 ("Because we find that Tyler has plausibly alleged a taking under the Fifth Amendment, and she agrees that relief under “the Takings Clause would fully remedy [her] harm,” we need not decide whether she has also alleged an excessive fine under the Eighth Amendment.")). 

We're not going to comment too much on this decision, because this is one of our firm's cases. But before we post what others are saying about it, we do have a few highlights to point out.

• As noted in this post's title, perhaps the most significant and interesting part of the opinion is the passage of page 4 and 5, where the Court finally gets to a question that we've been asking for a while: is state law the exclusive source of property law and property rights? True, state law can recognize more interests as property, but it cannot recognize less. Here's what the unanimous Court has to say about the issue:

The Takings Clause does not itself define property. Phillips v. Washington Legal Foundation, 524 U. S. 156, 164  (1998). For that, the Court draws on “existing rules or understandings” about property rights. Ibid. (internal quotation marks omitted). State law is one important source. Ibid.; see also Stop the Beach Renourishment, Inc. v. Florida Dept. of Environmental Protection, 560 U. S. 702, 707 (2010). But state law cannot be the only source. Otherwise, a State could “sidestep the Takings Clause by disavowing traditional property interests” in assets it wishes to appropriate. Phillips, 524 U. S., at 167; see also Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U. S. 155, 164 (1980); Hall v. Meisner, 51 F. 4th 185, 190 (CA6 2022) (Kethledge, J., for the Court) (“[T]he Takings Clause would be a dead letter if a state could simply exclude from its definition of property any interest that the state wished to take.”). So we also look to “traditional property law principles,” plus historical practice and this Court’s precedents. Phillips, 524 U. S., at 165–168; see, e.g., United States v. Causby, 328 U. S. 256, 260–267 (1946); Ruckelshaus v. Monsanto Co., 467 U. S. 986, 1001–1004 (1984).

• Thus, although Minnesota law has statutorily ipse dixited its own property law to define the excess equity as not property, the courts are not bound by the state's view of what constitutes compensable (i.e., Fifth Amendment "private") property, if "[h]istory and precedent say otherwise." Slip op. at 5. The government may have the the power to require you to pay property taxes, and the power to sell your home to exact those taxes if you fail to voluntary pony up, "[b]ut it could not use the toehold of the tax debt to confiscate more property than was due." Slip op. at 6
• OK, Chief, we get that before you ascended to the bench, as an advocate you argued Tahoe Sierra, and that you prevailed in that case. And we dig that you cite it for some good language. See, e.g., slip op. at 6 ("By doing so, it effected a “classic taking in which the government directly appropriates private property for its own use.” Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U. S. 302, 324 (2002) (internal quotation marks and alteration omitted). Tyler has stated a claim under the Takings Clause and is entitled to just compensation."). But come on man, you repped the government in that case! Retconning your own work only goes so far and let's just say that Tahoe Sierra isn't the best authority when you need to cite cases for property rights propositions. (But as long as you keep writing good property owner opinions as a judge, we're not going to complain too much.)
• After establishing the principle that state law cannot exclusively define the term "private property" as used in the Fifth Amendment and that history and tradition and what Justice Thurgood Marshall called "core" or "normative" property principles are part of it, the Court took a dive into history "at least as far back as Runnymeade in 1215" and the Magna Carta. Check out pages 6-9, where the opinion concludes that there is a "consensus that a government could not take more property than it was owed[.]"
• Court next rejected the County's argument that the issue was settled in Nelson v. City of New York, 352 U. S. 103 (1956), where the Court rejected a "belated" argument that the city keeping the excess equity was a taking (the owner had, until arguments in the Supreme Court, limited its arguments to due process and equal protection claims). There, unlike the County's procedure here, the taxpayer could have availed himself of a procedure to recover the surplus. But the County has no similar process, and there's "no opportunity for the taxpayer to recover the excess value; once absolute title has transferred to the State, any excess value always remains with the State." Slip op. at 11.
• The Court also rejected the County's "constructive abandonment" argument, which went like this: Ms. Tyler impliedly abandoned her property when she failed to timely pay her property taxes. The Court held no, an owner must do more than neglect to pay her taxes. This isn't akin to situations in which the Court has found abandonment, such as where owners fail to make any use of their property. Here, the "keep the change" statute "gives no weight to the taxpayer's use of the property. Indeed, the delinquent taxpayer can continue to live in her house for years after falling behind in taxes, up until the government sells it." Slip op. at 14.
• Armstrong Batsignal:

The Takings Clause “was designed 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, 364 U. S., at 49. A taxpayer who loses her $40,000 house to the State to fulfill a $15,000 tax debt has made a far greater contribution to the public fisc than she owed. The taxpayer must render unto Caesar what is Caesar’s, but no more.

• The Court also made short work of the County's argument that Ms. Tyler lacked standing because "she did not affirmatively 'disclaim the existence of other debts or encumbrances' on her home worth more than the $25,000 surplus." Slip op. at 3. The Court concluded that (a) none of these assertions were in the record, but even if there are such encumbrances, she still plausibly alleges a financial harm because even if the tax sale extinguishes other liens on the property, Ms. Tyler remained personally liable to the other lienor. And "[h]ad Tyler received the surplus from the tax sale, she could have at the very least used it to reduce any such liability." Slip op. at 4.
• We were really wishing for a citation to Barron v. Baltimore, 32 U.S. 243 (1833) as a way of signaling more on the "where does property come from" issue, but were sadly disappointed. Not too much, mind you. Just a bit.

More to come as the analysis and commentary rolls in.

Tyler v. Hennepin County, No. 22-166 (U.S. May 25, 2023)

New Cert Petition: Forcing Owners To Rent To Tenants Indefinitely Is A Categorical Taking

Here's the latest in a case we've been following since its inception, this cert petition seeking Supreme Court review of the U.S. Court of Appeals for the Second Circuit's affirming the district court's dismissal of a complaint alleging that New York (state)'s sweeping amendments to its Rent Stabilization (rent control) statute effected categorical and Penn Central takings:

Petitioners’ physical-takings claims would have been allowed to proceed if they were brought in the Eighth Circuit. That is because the Eighth Circuit has correctly held that property owners plead a physical taking under Cedar Point where a law prohibits them from terminating a tenancy at the end of a lease term. See Heights Apartments, LLC v. Walz, 30 F.4th 720, 733 (8th Cir. 2022), reh’g en banc denied, 30 F.4th 720. But the Second Circuit held here—as has the Ninth Circuit—that the physical-takings principles articulated in Cedar Point are not implicated when an owner voluntarily offered housing for rent in the first instance. These courts instead read Yee v. City of Escondido, 503 U.S. 519 (1992), as precluding physical-takings claims so long as the property owner may evict tenants in the event they breach the lease or engage in other forms of malfeasance—thus carving out a special and particularly deferential landlord-tenant exception to the general principles articulated in Cedar Point. Those courts misread Yee, which reserved the question whether a taking would occur if a law forced “a landowner over objection to rent his property or to refrain in perpetuity from terminating a tenancy.” Id. at 528.

In affirming the dismissal of Petitioners’ regulatory-takings claims, the Second Circuit also split from other circuits on every Penn Central factor. The court deemed irrelevant the impact that the law would have on Petitioners’ property rights, explaining that it was “of no moment” that they are forced to bear burdens that others are not. App. 16a. The court also viewed the character of the governmental action—which forces Petitioners to house tenants against their will—as counting against Petitioners’ claims because the law serves important public purposes and “courts are not in the business of second-guessing legislative determinations such as this one.” Id. The Second Circuit’s ruling confirms that this Court’s “current regulatory takings jurisprudence leaves much to be desired.” Bridge Aina Le’a, LLC v. Haw. Land Use Comm’n, 141 S. Ct. 731, 731 (2021) (Thomas, J., dissenting from denial of certiorari).

Pet. at 2-3.

Here are the Questions Presented:

Petitioners own small apartment buildings in New York City that are subject to New York’s Rent Stabilization Law (“RSL”). Once an owner leases a unit for a fixed term, the RSL grants the tenant and the ten-ant’s successors a perpetual right to renew the lease, regardless of whether the owner consents. That renewal right strips owners of their right to exclude others from their property and prevents them from living in their own apartments. The Second Circuit held that these facts failed to state a physical-takings claim because Petitioners voluntarily entered the rental market in the first instance and could, in some circumstances, evict tenants who breach their leases. Petitioners’ regulatory-takings claims likewise failed because, among other reasons, the RSL serves an important purpose and does not deprive petitioners’ property of all value. In so holding, the Second Circuit deepened or created circuit splits at each step of its analysis. The questions presented are:

1. Whether a law that prohibits owners from terminating a tenancy at the end of a fixed lease term, except on grounds outside the owner’s control, constitutes a physical taking.

2. Whether allegations that such a law conscripts private property for use as public housing stock, and thereby substantially reduces its value, state a regulatory takings claim.

Stay tuned.

Petition for a Writ of Ceritorari, 74 Pinehurst LLC v. New York, No. ____ (U.S. May 17, 2023)

New Cert Petition: The Supreme Court Should Resolve The Legislatively-vs-Administratively Imposed Exactions Issue

When we last visited Sheetz v. El Dorado County, we finished with "stay tuned" because we suspected that the California Court of Appeal's opinion concluding that the County's traffic mitigation fee is immune from Nollan/Dolan nexus-and-rough-proportionality review because the legislature imposed the fee on everyone (and Sheetz was not subject to paying it because of an ad hoc agency decision) was not going to be the last word, either in the case or on the legislative exactions issue.

Well, now the predicted other shoe drop: the property owner has filed this cert petition, with this Question Presented:

George Sheetz applied to the County of El Dorado, California, for a permit to build a modest manufactured house on his property. Pursuant to legislation enacted by the County, and as the condition of obtaining the permit, Mr. Sheetz was required to pay a monetary exaction of $23,420 to help finance unrelated road improvements. The County demanded payment in spite of the fact that it made no individualized determination that the exaction—a substantial sum for Mr. Sheetz—bore an “essential nexus” and “rough proportionality” to the purported impacts associated with his modest project as required in Nollan v. Cal. Coastal Comm’n, 483 U.S. 825, 837 (1987) and Dolan v. City of Tigard, 512 U.S. 374, 391 (1994).

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

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

The Sixth Circuit just last week held that these type of demands are subject to the nexus and rough-proportionality standards, and not rational basis review, deepening the lower court conflict.

So we shall say again: we don't think the California court's Sheetz opinion is the last word, so stay tuned.

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

Petition for Writ of Certiorari, Sheets v. County of El Dorado, No. 22-1074...

 

New (Michael Berger) Cert Petition: Knick "Changed the world of takings litigation" And Applies Retroactively - And Statutes Of Limitations Are Affirmative Defenses

Here's a new cert petition, filed this week by Michael Berger that asks whether Knick's no-need-to-exhaust-or-chase-state-compensation rule applies retroactively.

The Second Circuit held that no, the owner's claims were too late, and although Knick overruled the Williamson County rule that kept him from a timely filing in federal court, that's just too bad:

We also agree with the district court that the remaining claims are largely time barred. Demarest filed this lawsuit in June 2021, yet much of the conduct targeted by his complaint dates from long before. Since a § 1983 claim adopts the limitations period for a state personal injury tort-which in Vermont is three years, see Morse v. Univ. of Vt., 973 F.2d 122, 125-27 (2d Cir. 1992)-claims accruing before June 2018, which comprise the majority of Demarest's complaint, would be time barred. Although Demarest argues that his claims accrued only when a recent Supreme Court decision, Knick v. Twp. of Scott, Pennsylvania, 139 S.Ct. 2162 (2019), removed an impediment to his pursuing them, he is incorrect: "[a] decision recognizing a cause of action after the period has run does not retroactively interrupt the running of the limitations period." Fiesel v. Bd. of Educ. of N.Y.C., 675 F.2d 522, 524 (2d Cir. 1982) (internal quotation marks omitted).

Arguing that Knick rewrote the script (and righted the ship that Williamson County had upended), the petition asks the Court to give retroactive effect to its rule.

To us, this makes a lot of sense because Knick wasn't so much a new rule as a return to normalcy. Williamson County was the aberration and the Court veering takings litigation and procedures off-track. Before Williamson County, a property owner could go to federal court with her federal takings claim, and she can now. It seems like this is just what retroactivity was meant for.

The petition also points out that the Second Circuit treated the statute of limitations as some kind of jurisdictional bar, and not a claims processing rule (hang on, that sounds familiar....).

Here are the Questions Presented:

The Court of Appeals refused to give retroactive effect to this Court’s landmark decision in Knick v. Township of Scott, 139 S.Ct. 2162 (2019), which opened the federal courts to constitutional property litigation for the first time in 34 years. Compounding that error, the Court of Appeals refused to grant rehearing to consider the impact of the then pending decision in Wilkins v. United States, 143 S.Ct. 870 (2023), which ended up restricting the impact of statutes of limitation. In combination, the Court of Appeals’ refusal to apply this Court’s current law deprived Petitioner of property without just compensation and due process of law.

The questions presented are:

1. When Knick changed the world of takings litigation by allowing—for the first time since 1985—a property owner with a claim for unconstitutional taking of property to file suit in federal court, must that decision be applied retroactively, with the time to file suit tolled until the date Knick was decided, so as to give its benefit to property owners who had been precluded from suing in federal court before?

2. When Wilkins confirmed in the real property context that statutes of limitation are not jurisdictional but are merely claim processing tools, must lower courts now treat statutes of limitation as affirmative defenses to be proved at trial by the defendant?

Are we going to follow along? You bet we are (and you should also).

Petition for a Writ of Certiorari, Demarest v. Town of Underhill, No. ____ (U.S. May 8, 2023)

New Cert Petition: Is Barring You From Accessing Your Own Property A Categorical Taking?

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

This is the one where a North Carolina county went bonkers in the early days of Co-19, and truly "locked down" by banning nonresident property owners from entering the county. This wasn't done all at once, but in phases, with nonresident property owners being informed that if they didn't get to their Dare County homes by March 20, they were going to be prohibited from even entering the county. As the Fourth Circuit put it, "In effect, Dare County told non-resident property owners:'“If you want to quarantine at your beach house, get there by March 20.' This gave non-resident property owners four days to travel to the county."

Blackburn was stopped from accessing his property for 45 days.

The Fourth Circuit upheld the district court's rejection of his takings claim, concluding that this was not a physical invasion or occupation ("But temporarily excluding an owner from their own property differs from eliminating the owner’s right to exclude."), nor was it a total or near-total deprivation of the property's beneficial uses. 

The owner has now sought Supreme Court review.

Here's the Question Presented:

Whether a governmental regulation prohibiting all physical access to a landowner’s property is a “per se” taking under the Fifth Amendment of the United States Constitution.

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

Petition for a Writ of Certiorari, Blackburn v. Dare County, No. 22-1048 (U.S. Apr. 25, 2023)

Tyler SCOTUS Takings Argument Round-Up

Our Pacific Legal Foundation Property Rights Litigation Tyler team,
and Counsel of Record Christina Martin (second from right)

Here are your links to the buzz about Tyler v. Hennepin County, No. 22-166, our law firm's case which argues that Hennepin County's seizure of Ms. Tyler's condo and then keeping the excess equity over what she owed in property taxes and fees, is an uncompensated taking of private property, and also violates the Excessive Fines Clause.

• Transcript and audio recording of the oral arguments.
• Kelsey Reichmann, Grandma who lost her house to debt finds high court sympathy (Courthouse News Service)
• Lawprof Ilya Somin, Unusual Cross-Ideological Agreement in Tyler v. Hennepin County (Volokh Conspiracy)
• Steve Osunsami, Laura Romero, Dr. Mark Abdelmalek, Doug Vollmayer, Supreme Court takes on what critics call predatory tax foreclosure practice (Good Morning America)
• Amy Howe, Justices appear likely to side with homeowner in foreclosure dispute (SCOTUSblog)
• Mark Sherman, Supreme Court seems to favor woman who got $0 in condo sale (Associated Press)

More on the way. Stay tuned.

Today's Takings SCOTUS Oral Argument Transcript And Recording: Tyler v. Hennepin County

Coffee is for closers.
(Yes, we were up and at the desk at 4 a.m. local time
to listen live. We just needed a direct injection of coffee.)

Here is the transcript, and the audio recording of today's U.S. Supreme Court arguments in Tyler v. Hennepin County, No. 22-166, our law firm's case which argues that Hennepin County's keeping the excess equity in Ms. Tyler's home over what she owed in property taxes and fees, is an uncompensated taking of private property, and also violates the Excessive Fines Clause.

We will bring you the analysis of the arguments and the pundits' predictions in a subsequent posts. But for the time being here these are in case you missed out listening live. Stay tuned.

Transcript, Tyler v. Hennepin County, No. 22-166 (U.S. Apr. 26, 2023)

More SCOTUS Takings Previews (Argument Tomorrow, 10am ET)

Tomorrow, Wednesday, April 26, 2023, at 10:00 a.m. Eastern Time, the U.S. Supreme Court will be hearing oral arguments in Tyler v. Hennepin County, No. 22-166, our law firm's case which argues that Hennepin County's keeping the excess equity in Ms. Tyler's home over what she owed in property taxes and fees, is an uncompensated taking of private property, and also violates the Excessive Fines Clause.

Listen to the arguments live, here.

We posted some preview links earlier this week here. But wait, there's more!

• Amy Howe, Court to hear dispute over confiscated condo title and sale (SCOTUSblog).
• George Will, The county seized her condo, sold it and kept all the money. Not nice. (Washington Post).
• Anthony Francois, Nancie Marzulla & John Bursch, Courthouse Steps Preview: Tyler v. Hennepin County (Federalist Society) (video)
• Perry Cooper, Seized Home Sold for Profit Set for Supreme Court Consideration (Bloomberg Law)
• Cases & Controversies Podcast, Supreme Court Abortion Dispute, Ethics Sage Intesify (includes PLF attorney David Deerson on Tyler) (Bloomberg Law)

Stay tuned.

Get Ready For SCOTUS Takings Arguments (Wednesday, April 26, 2023)

Take a deep dive into the arguments and amicus briefs

This Wednesday, April 26, 2023, the U.S. Supreme Court will hear oral arguments in Tyler v. Hennepin County, No. 22-166, our law firm's case which argues that Hennepin County's keeping the excess value in Ms. Tyler's home over what she owed in property taxes and fees, is an uncompensated taking of private property, and also violates the Excessive Fines Clause.

Here are links to programs, summaries, and events to help you understand the arguments and issues, as well as registration for post-argument analysis:

• The Supreme Court Takes Up ‘Home-Equity Theft’ - Wall St. Journal. An op-ed by our Pacific Legal Foundation colleague Christina Martin, Counsel of Record for the property owner and arguing counsel.
• Deep Dive and Amicus Review: Tyler v. Hennepin County - the recording of last week's PLF webinar previewing the arguments, and focusing on the myriad amici briefs which have been filed. Click here, or wat. All briefs are posted on the Court's docket page here.
• The same day as the arguments at 2pm Eastern Time, the Federalist Society will hold a "Courthouse Steps" program, at which Ms. Martin will provide her thoughts on the arguments. Register here.
• For those of you in the Beltway, at 4:30pm Eastern Time on the day of argument, PLF will host "Home Equity Theft at the Supreme Court," an in-person program at the Top of the Hill Banquet & Conference Center, in Washington, D.C. Ms. Martin (busy day!) and other experts will answer questions. Register here.

We'll put up more links and materials over the next few days. But again, because this is one of our firm's cases, we won't be commenting that much (other than Go Christina and Geraldine! (Tyler)).

Hawaii Supreme Court To Hear Major Severance Damages Appeal In Rail Takings Cases

Update: the court has rescheduled the arguments to June 22, 2023, at 10 a.m.

The Hawaii Supreme Court has scheduled oral arguments in an important eminent domain case about severance damages for the Honolulu Rail Authority's condemnation of land in Honolulu for one of its stations (assuming, of course, that the under-construction rail line actually gets past downtown, or simply stops where its historic predecessor, the Oahu Railway terminated more than a century ago).

Here's the details and the court's description of the issues (scroll to the bottom), from the Hawaii Judiciary's web site.

[Barista's note: we won't be commenting on this one in detail, because this was our case when we were in private practice.]

Thursday May 18, 2023 – 10 a.m.

NOS.

SCAP-22-0000335 (Consolidated with Nos. SCAP-22-0000336,
SCAP-22-0000337, SCAP-22-0000338, SCAP-22-0000340,
SCAP-22-0000341, SCAP-22-0000343 SCAP-22-0000344,
SCAP-22-0000345, AND SCAP-22-0000352)

SCAP-22-0000335, SCAP-22-0000336, SCAP-22-0000337,
SCAP-22-0000340, SCAP-22-0000341, SCAP-22-0000343,
SCAP-22-0000344, AND SCAP-22-0000345

CITY AND COUNTY OF HONOLULU, acting by and through the HONOLULU AUTHORITY FOR RAPID TRANSPORTATION, Plaintiff/
Counterclaim Defendant-Appellee/Cross-Appellant, vs. VICTORIA WARD, LIMITED, a Delaware Corporation; et al., Defendants/Counterclaim Plaintiffs-Appellants/Cross-Appellees, and 1240 ALA MOANA, LLC, a Delaware limited liability company; et al., Defendants-Appellants/ Cross-Appellees, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association; et al., Defendants-Appellees/Cross-Appellees.

SCAP-22-0000338 CITY AND COUNTY OF HONOLULU, acting by and through the HONOLULU AUTHORITY FOR RAPID TRANSPORTATION, Plaintiff/Counterclaim Defendant-Appellee/Cross-Appellant, vs. VICTORIA WARD, LIMITED, a Delaware Corporation; et al., Defendants/Counterclaim Plaintiffs-Appellants/Cross-Appellees, and 1240 ALA MOANA, LLC, a Delaware limited liability company; et al., Defendants-Appellants/ Cross-Appellees, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association; et al., Defendants-Appellees/Cross-Appellees.

SCAP-22-0000352 CITY AND COUNTY OF HONOLULU, acting by and through the HONOLULU AUTHORITY FOR RAPID TRANSPORTATION, Plaintiff/Counterclaim Defendant-Appellant, vs. VICTORIA WARD, LIMITED, a Delaware Corporation; et al., Defendants/ Counterclaim Plaintiffs-Appellees, and 1240 ALA MOANA, LLC, a Delaware limited liability company; et al., Defendants-Appellees, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association; et al., Defendants-Appellees.

The above-captioned cases have been set for argument on the merits at:

Supreme Court Courtroom
Aliʻiōlani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813

The oral argument will also be livestreamed for public viewing via the Judiciary’s YouTube channel at YouTube.com/hawaiicourts.

Attorneys for City and County of Honolulu, acting by and through the Honolulu Authority for Rapid Transportation:

Terence J. O’Toole, Sharon V. Lovejoy, and Lindsay E. Orman, of Starn O’Toole Marcus & Fisher; Paul S. Aoki, and Rozelle A. Agag, Deputies Corporation Counsel

Attorneys for Victoria Ward, Limited, et al.:

Mark M. Murakami, Gregory W. Kugle, Nicholas K. Ernst, and Clinton K. Hamada of Damon Key Leong Kupchak Hastert

NOTE: Order Granting Application for Transfer, filed 10/13/22.

NOTE: Certificate of Recusal, by Associate Justice Paula A. Nakayama, filed 4/19/23.

NOTE: Order assigning Chief Judge of the Circuit Court of the First Circuit, R. Mark Browning due to recusal and Circuit Court of the First Circuit, Judge James S. Kawashima due to a vacancy, filed 4/19/23.

COURT: Recktenwald, C.J., McKenna, and Eddins, JJ., and Chief Circuit Judge Browning, in place of Nakayama, J., recused, and Circuit Judge Kawashima assigned by reason of vacancy

Brief Description:

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

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

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

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

The arguments will be live-streamed if you cannot make it in person to the court.

Tyler v. Hennepin County Previews: Get Yourself Prepared For The Next SCOTUS Takings Arguments

Here at our law firm, we're getting ready as one of our colleagues prepares to argue the Supreme Court's next takings case in a couple of weeks. Yes, this is what we've alternatively called the "home equity theft" or the "keep the change" case where government seizes property to satisfy the owner's tax debt, and after liquidation of the property and satisfaction of the debt, keeps any excess equity instead of returning the balance to the (former) homeowner.

The case is Tyler v. Hennepin County, No. 22-166, and it's set for argument on the last day of this term's argument calendar, Wednesday, April 26, 2023.

In the meantime you should check out the parties' merits briefs and the beaucoup amici briefs (mostly filed in support of the property owner) on the Court's docket.

But you should also see what others have to say, and how they are viewing the issues. Here are several upcoming programs and an article you might want to check out:

• Deep Dive and Amicus Review: Tyler v. Hennepin County (Pacific Legal Foundation [our firm] April 19, 2023, at 2:00 p.m. EDT/11:00 a.m. PDT)
• Courthouse Steps Preview: Tyler v. Hennepin County (Federalist Society, April 17, 2023, 1pm EDT)
• ABA publishes article by True North Law’s Steve Davis on Upcoming Property-Rights Case at the Supreme Court: Tyler v. Hennepin County (April 11, 2023, via True North Law and the ABA)

Again, because this is one of our firm's cases, I won't be commenting much and will simply point you to resources. (You already know what I think about the case.)

CA8: Where A State's Just Comp Remedy Is Inadequate, You Can Sue For Injunctive Relief For A Taking

Check out the U.S. Court of Appeals for the Eighth Circuit's opinion in Pharmaceutical Research and Manufacturers of America v. Williams, No. 21-1731 (Apr. 3, 2023), where the court reinstated a complaint dismissed by the district court for lack of standing.

The Eighth Circuit held that even though the "usual" remedy for a regulatory taking is just compensation, where a state's just compensation remedy would be inadequate, the property owner may seek equitable relief such as a declaratory judgment or an injunction. [Disclosure: our law firm filed an amicus brief in support of the plaintiffs, arguing that equitable is available in takings claims.] 

The complaint challenged Minnesota’s Insulin Affordability Act, which requires insulin manufacturers to provide insulin at no charge to eligible Minnesotans in 90-day increments for up to one year. The manufacturers argued that the Act works a taking, and sought to enjoin its enforcement. Note that the complaint was brought in federal court, against state officials in their official capacities. So the real battle here was over the forum: if compensation is the only available relief, then the Eleventh Amendment means the suit cannot be brought in federal court (at least as the current state of 11th Amendment law stands). But if declaratory or prospective injunctive relief is okay, then the Ex parte Young exception applies and green light to federal court action.

The District of Minnesota held that equitable relief was unavailable, based on its misreading of Knick v. Township of Scott, which suggested that "equitable relief is generally unavailable" for a takings claim "[a]s long as an adequate provision for obtaining just compensation exists." The District Court held that the plaintiffs could have obtained just compensation in an inverse condemnation action in the Minnesota courts (yes, Minnesota uses the mandamus remedy which is not, technically speaking, "inverse condemnation," but close enough - the court held that property owners can get money in Minnesota courts for takings).

The Eighth Circuit, however, recognized the issue was the adequacy of this remedy -- not merely its existence -- because "Knick does not hold that every state’s compensation remedy is adequate in a particular situation; implicit in Knick is the requirement that just compensation must be available to petitioners seeking a remedy." Slip op. at 11. To determine adequacy, the remedy must be "practical and efficient." Slip op. at 12. 

And that's where the district court's analysis fell short. Because the Act requires indefinite periodic donations of private property, the repetitive nature of the taking would require the plaintiffs to keep on suing for just compensation claims, ad infinitum. The Eighth Circuit held that state court compensation would not be an adequate remedy, given the endless and repetitive nature of the taking:

An inverse condemnation action to reimburse a manufacturer for each discrete alleged taking is incapable of compensating the manufacturers for the repetitive, future takings that will occur under the Act’s requirements. By contrast, equitable relief would protect manufacturers from those future harms.

Slip op. 18.

The court also rejected Minnesota's arguments that the Eleventh Amendment barred jurisdiction, and that Ex parte Young does not apply to takings claims because of the state’s "special sovereignty interest" in eminent domain. The court held that where there is no adequate remedy at law, and where a takings claimant seeks a prospective injunction that will not result in payment from the state’s treasury, the Ex parte Young exception applies and the Eleventh Amendment is no bar to a federal court action.

Pharmaceutical Research and Manufacturers of America v. Williams, No. 21-1731 (8th Cir. Apr. 3, 2023)

"Larry Steven Wilkins and Jane Stanton wanted quiet titles and a quiet road." 6-3 SCOTUS Says Federal Quiet Title Act Statute Of Limitations Is Not Jurisdictional

We all know by now that the Supreme Court recently has been on a tear about federal statutes of limitations, and is policing up a lot of earlier too-casual language in some of its opinions about whether this SOL or that SOL is "jurisdictional." In a series of opinions over the last few years, the Court has almost universally confirmed that it used the term rather loosely, and that upon further review, many statutes of limitations are not "jurisdictional" but are "claims processing rules."

The Court's 6-3 opinion in Wilkins v. United States, No. 21-1164 (Mar. 28, 2023) is another in a line of decisions so holding. Wilkins involves the Federal Quiet Title Act's 12-year SOL (see this preview of the issues by our friend and colleague Stephen Davis). The bottom line is that Wilkins concluded the QTA's SOL is a claims processing rule because Congress did not "clearly state" that the SOL is jurisdictional.

We'll leave it to you to read the six-Justice majority opinion authored by Justice Sotomayor, and the three-Justice dissent authored by Justice Thomas, because this case is one where our law firm represents a party, the prevailing petitioners. Our colleague Jeffrey McCoy argued the case a couple of months ago (nice job, Jeff!).

Unfortunately, a lot of the reporting on the decision treat it as a wonky, technical issue (which, admittedly, it is), but in so doing regrettably overlook the importance of the case. For the reasons why we think it is very important, read this. And for some of the reporting that gets why the case is important (and which note the somewhat unexpected line up of Justices) see:

• Liberals unite with Trump Supreme Court nominees in decision against federal land grab (Washington Examiner)
  
• Victory for Property Rights in Highly Technical Supreme Court Decision (Ilya Somin, Volokh Conspiracy)

The bottom line is that the property owners will get their day in court, and not get tossed out for an arcane, overly-technical reason. And that sounds like a very good thing.

Wilkins v. United States, No. 21-1164 (U.S. Mar, 28, 2023)

New Cert Petition: Do You Need Statutory Authorization To Sue For A Taking?

Check this out, a recently-filed cert petition in a case we've been following, filed by our friends and colleagues at the Institute for Justice. This one involves an issue we've been on top of also, most recently in these two cases (see here and here).

That is, what does the Supreme Court's description of the Takings Clause as "self-executing" actually mean? Do you need statutory authorization in order to bring a takings or just compensation claim, or can you sue directly under the Constitution?

In Devillier v. Texas, No. 21-40750 (Nov. 12, 2022), the Fifth Circuit's cryptic opinion concluded that "the Fifth Amendment Takings Clause as applied to the states through the Fourteenth Amendment does not provide a right to action for takings against a state[.]" Slip op. at 1-2. Here's the entirety of the decision (minus footnotes):

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

Here's the Question Presented by the Petition:

In First English Evangelical Lutheran Church v. County of Los Angeles, this Court recognized that the Fifth Amendment’s Takings Clause was “self-executing” and that “[s]tatutory recognition was not necessary” for claims for just compensation because they “are grounded in the Constitution itself[.]” 482 U.S. 304, 315 (1987). Since First English, several state courts of last resort have held that the self-executing nature of the Takings Clause requires them to entertain claims directly under the Clause without the need for statutory authorization. Two federal Circuits, the Fifth and the Ninth, disagree and have held that claims for just compensation are only available if they are legislatively authorized. The question presented is:

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

Follow along on the Court's docket here. We sure will be.

Property Owner's SCOTUS Merits Brief: "Under no circumstances can government have an unbounded ability to confiscate entire properties of any size for even the most minimal tax debts."

Here's the merits brief, filed yesterday in the above-depicted Court by our law firm colleagues, headed by Counsel of Record Christina Martin in Tyler v. Hennepin County, No. 22-166, a case and an issue we've been following closely. This is the one, where, as recounted in the petition:

Hennepin County confiscated 93-year-old Geraldine Tyler’s former home as payment for approximately $15,000 in property taxes, penalties, interest, and costs. The County sold the home for $40,000, and, consistent with a Minnesota forfeiture statute, kept all proceeds, including the $25,000 that exceeded Tyler’s debt as a windfall for the public. In all states, municipalities may take real property and sell it to collect payment for property tax debts. Most states allow the government to keep only as much as it is owed; any surplus proceeds after collecting the debt belong to the former owner. But in Minnesota and a dozen other states, local governments take absolute title, extinguishing the owner’s equity in exchange only for cancelling a smaller tax debt, code enforcement fine, or debt to government agencies.

Because this is one of ours, we won't go into it in detail, and leave it to you to read and review. The Questions Presented:

1. Whether taking and selling a home to satisfy a debt to the government, and keeping the surplus value as a windfall, violates the Takings Clause?

2. Whether the forfeiture of property worth far more than needed to satisfy a debt plus, interest, penalties, and costs, is a fine within the meaning of the Eighth Amendment?

We shall continue to follow along with the case and the to-be-filed amicus and merits briefs (or you may follow the Court's docket here). 

This case is the third of our firm's which the Court has granted on property issues this Term (Sackett and Wilkins being the other two).

Brief for Petitioner, Tyler v. Hennepin County, No. 22-166 (U.S. Feb. 27, 2023)

New Article: "Toward Principled Background Principles in Takings Law" (Strahilevitz & Hansen)

Check this out, a new article co-authored by a federal judge's law clerk and lawprof Lior Strahilevitz (Chicago). With the title, "Toward Principled Background Principles in Takings Law" are we going to read it? You bet. (Unlike a lot of new scholarship that we post here, we read this one immediately.)

Here's the Abstract:

Blunders made by lawyers, judges, and scholars have caused the Supreme Court’s recent opinion in Cedar Point Nursery v. Hassid to be deeply misunderstood. In Cedar Point, the Court re-wrote takings law by treating temporary and part-time entries onto private property as per se takings. Prior to Cedar Point these sorts of government-authorized physical entries would have been evaluated under a balancing framework that almost invariably enabled the government to prevail. As it happens, there were two well-established rules of black letter law that California’s lawyers and amici mistakenly failed to invoke in defending the Cedar Point union organizer access regulation. First, a physical takings claim accrues when a regulation authorizing third parties to enter private property is promulgated, not when the third party actually enters the land. Second, only the party that owned the land at the time the physical taking cause of action accrued can prevail. Under these doctrines, Cedar Point Nursery’s lawsuit was filed decades too late. By the wrong plaintiff. California’s oversights were probably outcome determinative.

Moving beyond Monday-morning quarterbacking, we argue that the statute of limitations arguments available to governments in future cases help provide the essential limiting principles that went unmentioned in Cedar Point. In the aftermath of Cedar Point prominent scholars denounced the opinion as a vehicle for gutting antidiscrimination law, labor law, environmental law, rent control, and other parts of the regulatory state. Our analysis reveals that these concerns are likely exaggerated because defenders of those long-standing limits on the right to exclude can invoke the statute of limitations arguments that California’s lawyers failed to raise. On the other hand, new restrictions on owners’ rights to exclude are vulnerable to legal challenge. Properly understood, contemporary takings law grandfathers in many longstanding limits on the right to exclude while constraining governments that wish to tackle collective action problems by restricting property rights in new ways. Moreover, statutes of limitations and related doctrines can provide courts with something that has been elusive since the Supreme Court’s 1992 takings decision in Lucas v. South Carolina Coastal Council: a principled and coherent account of what restrictions on owners’ rights are impervious to takings claims because they qualify as background principles of state property law.

Read it at SSRN.

[Before we go on, Disclosure 1: my law firm represented the property owner in Cedar Point Nursery, so yes, I have a dog in the hunt.]

What do you think of the article's premise and conclusion that a regulation alleged to allow a physical invasion must be brought when the regulation is adopted, and not when property is actually invaded?

Government lawyers need not and should not repeat the mistake that California’s lawyers made, a goof that evidently went unnoticed by all three dissenting justices, all thirteen amici, and every scholar who has written about Cedar Point. By correcting Cedar Point’s litigation strategy blunder, governments may avoid having to compensate landlords who want to refuse to rent to members of a protected class, landlords whose ability to evict is constrained by rent control laws, employers who wish to fire workers involved in unionization efforts, and business owners who want to bill governments for the inconvenience of having to endure entry by health and safety inspectors. Most of these claims brought by property owners should fail if defended by competent government counsel who can learn from California’s error.

Id. at 5 (footnote omitted).

In other words, the allegedly unconstitutional act is the enactment of the regulation, and not also the failure to provide compensation when an invitee subsequently exercises the rights granted by the regulation to enter the plaintiff's property against the owner's wishes.

And what of the article's other premise, that regulations allowing physical invasions and occupations of property over time become "background principles of the State's law of property and nuisance" and disappear upon conveyance of the property?

Understandably, many observers were unnerved by Chief Justice Roberts’ decision to brush aside the notion that the California regulation – just seven years younger than the Fair Housing Act – was a background principle of state property law, unnerved many observers. If the 1975 California statute and regulation do not count by 2021 as background principles that inhere in title why shouldn’t the 1968 Fair Housing Act suffer the same fate? The response to Cedar Point from the least alarmed property scholars fell back on the idea that the Court would nonetheless treat the Fair Housing Act as a background principle. But no one has a good theory – other than a realist reading of the justices’ relative hostility to the goals of labor law – for why something magical happened between 1968 and 1975. After Cedar Point it is quite challenging to conclude that there are any principles at all underlying the Supreme Court’s conception of background principles. Our goals in this article include articulating coherent principles that are grounded in existing law and consistent with what the Court decided in Cedar Point.

Id. at 17 (footnotes omitted). 

Some preliminary impressions:

Are all physical invasion challenges facial claims? The article's premise seems to eviscerate the longstanding distinction in constitutional law generally -- and takings law specifically -- between a facial challenge and an as-applied challenge. The window opens on a facial challenge on behalf of everyone when a regulation is adopted, but we thought it was settled that individual property owners had to wait -- upon pain of being tossed out on ripeness grounds --  for the challenged regulation to actually be applied to their facts and circumstances. But the article does not mention the facial vs as-applied distinction.

Standing before incurring a concrete injury? The argument also seems a variation of the Federal Circuit's rationale in Campbell v. United States, 932 F.3d 1331 (Fed. Cir. 2019), where the court held "[i]n the case of a regulatory taking, however, the taking may occur before the effect of the regulatory action is felt and the actual damage to the property interest is entirely determinable." Disclosure 2: we thought the Federal Circuit's reasoning in that case was faulty (that a property owner has an obligation to sue even before she is actually injured seems very strange), and petitioned for certiorari (denied). But it does seem like a weird rule, and very much at odds with injury-in-fact and Article III standing requirements.

Whither Kirby Forest? The rule also seems at odds with Kirby Forest Indus. v. United States, 467 U.S. 1 (1984), where the Court upheld all sorts of government actions that muck around with an owner's property rights prior to an actual judgment and tender of compensation in eminent domain cases. No, the Court concluded, the "taking" takes place in straight takings when there's been an adjudication of compensation and a tender of actual payment. And all those things which happened before that interfere with the owner's use -- like instituting an eminent domain action, filing a lis pendens and clouding title, drying up the market for the property, and similar -- do not interfere sufficiently with property interests because "petitioner was free to make whatever use it pleased of its property." Id. at 15-16. The California provision seems similar: until the union organizers actually entered Cedar Point property under color of the statute, the owner could exclude whom it wanted.

Too early and too late: You just know that if property owners had challenged the California statute as a taking upon enactment, but before anyone had actually attempted to enter under the authority of the statute, that the claim would not have been that they filed too late, but rather too early. Property owners are used to these type of inconsistent arguments and being whipsawed between being accused of filing too early, or too late (or, in many cases, both too early and too late at the same time). We don't think that the line the courts are going to enforce between ripeness and staleness is as clear as the authors make it out to be.

Get ready for more takings claims, federal courts. Unless the article is arguing for abandoning the remaining takings ripeness requirement (something we're down for, but so far the courts are not), we're not sure that a rule that will force prudent property owners to sue upon adoption of new regulations is one that the courts will enthusiastically embrace (even if they should).

Zombie takings, or zombie statutes? The article describes Cedar Point as a "zombie takings claim" (p. 33) because it challenged a statute originally adopted decades ago. It argues that after about 40 years, regulation ossifies into a background principle, immune from challenge. Even though we'd use the "zombie" label to describe the California statute and others like it that are there on the books but are pretty obscure, let's go with the zombie takings label. That brings up an intriguing tradeoff: would we surrender Cedar Point and the ability to challenge 40 year old regulations in return for eliminating the ripeness hurdle and opening up courts to immediate challenges of newly-adopted regulations as we think the piece is advocating for? Hmmmmm... we gotta think about that one.

Cringe. No matter what, we think that calling the Cedar Point outcome the result of "blunders" by lawyers, judges, and scholars (p. 1), the government's strategy a "goof" (p. 5) and "bad lawyering" (p. 48), its lawyers "bone-headed" (id. at 49 & n.314), and accusing government counsel of committing "a colossal strategic blunder" (id. at 2), and saying that the government's lawyers in Cedar Point and Lucas committed "legal malpractice" (id.), is unnecessary and uncharitable in the extreme. We get that the authors don't care for the outcome in Cedar Point and wish their "Monday-morning quarterbacking" strategy (their words not ours, see p.1) would have been raised and tested. But in our view, these type of accusations should not be thrown about lightly, especially by those who didn't enter the amici arena themselves, and by those who don't appear to have been there, done that because their collective time actually practicing law and making strategic litigation decisions in real time in real cases appears to be, let's say, very limited. We hope there can be even vehement disagreement about the issues without slinging accusations of malfeasance, incompetence, and especially malpractice -- claims the practicing bar takes very, very seriously. We respectfully urge the authors and the law journal editors to reconsider these characterizations prior to print publication. 

We're going to meditate on the article and its arguments more. But whatever you may think of the authors' analysis and conclusions, this piece is well worth reading.

Cert Denied In Self-Executing Just Compensation Case

Most of the time these days, we're rooting for cert granted. That comes, naturally, from our work pushing cases and issues up to the Supreme Court, looking to correct lower court errors and in the process make some good law. And that usually entails being on the "petitioner" side of things. Cases like Sackett, Wilkins, and Tyler, for example.

But not always. In Financial Oversight & Management Board for Puerto Rico v. Cooperative de Ahorro y Credito Abraham Rosa, No. 22-367, we were on the "respondent" side of things, advocating for a "cert denied" because there, the First Circuit had reached what we think was the right result for the right reasons. As we noted in this post, the First Circuit correctly held that the "Fifth Amendment precludes the impairment or discharge of prepetition claims for just compensation in Title III bankruptcy."

In short, just compensation judgments are not typical civil judgments which can be treated as unsecured debt (aka blown off) when the government subsequently goes bankrupt. You take, you pay just compensation and not pennies-on-the-dollar. The First Circuit held that the self-executing nature of just compensation for takings means that it cannot be discharged or diminished in insolvency proceedings. Our law firm signed up to represent the property owners to defend what we saw as a correct result and the right analysis.

The cert petition here was not at all insubstantial: the FOMB is repped by high-class lawyers and it appeared the First Circuit expressly disagreed with the Ninth, setting up what looked at first blush like a circuit split. Our BIO, however, noted that the apparent split was not a split at all (just some inconsistent dicta), and emphasized the correctness of the First Circuit opinion. The SG filed a BIO, as did the San Juan lawyer who won the case in the First Circuit.

Today, in this order, the Court denied review.

We understand that this is not a definitive statement from the Court that the First Circuit got it right. Indeed, in another recent case involving a similar issue (what is the obligation of government to actually provide just compensation within a reasonable time after it takes property?), the Court denied our cert petition. So the issue of what happens after a taking and an adjudication of the amount of compensation owed remains open. True, in the First Circuit, the government cannot slough off its Fifth Amendment obligation by seeking bankruptcy protection, but maybe in can in the Ninth and other circuits. And at least in the Fifth Circuit, a local government cannot be compelled by a federal court to, you know, actually pay compensation after it takes property. So the issue remains for SCOTUS resolution.

So cert denied does not resolve the issue. But to us, a win is a win, especially for our clients (even a cert denial).

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.)

"Emerging Issues In Property Rights" - Wednesday, February 8, 2023, 3-4pm ET (Free!)

Join our Pacific Legal Foundation colleagues Jon Houghton, Daniel Woislaw, Kady Valois, and Sam Spiegelman (moderating) tomorrow, Wednesday, February 8, 2023, at 3:00 - 4:00 p.m. ET for a free webinar, "Emerging Issues in Property Rights."

Here's the agenda:

Protecting private property rights has been at the heart of PLF’s work since our founding in 1973. Our view, and that of the American Founders, is that property rights are foundational to all other constitutional rights.

Our relentless defense of property rights has secured many precedented victories, including 12 property rights wins at the U.S. Supreme Court—and counting.

Unfortunately, even today, the need for property rights champions remains critical.

Government officials too often relegate property rights to second-class status among Americans’ constitutional rights—cloaking their assaults in erroneous assertions of environmental protection or cleverly constructed land use restrictions.

To learn more about property rights’ legal landscape in 2023, join us for part two of our four-part webinar series, Emerging Issues in Property Rights. Our panel of PLF attorneys will preview the road ahead for property rights and strategies to restore these fundamental rights to their rightful constitutional status.

Join us, and register here (free!).

(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-...

CA9: Land Use Is A "Sensitive Area Of Social Policy" So We're Gonna Let A Local Govt Bleed The Property Owner Out

Here's another one from the Ninth Circuit, argued on what one advocate called "land use day at the Ninth Circuit" (except, unlike the other two cases argued that day, the decision in this one gets published). 

In Gearing v. City of Half Moon Bay, No. 21-16688 (Dec. 8, 2022), the panel upheld the dismissal of a takings case, holding that federal courts should abstain from considering regulatory takings cases in favor of pending state court eminent domain actions, even when the condemnor instituted the state court action in response to the federal takings claim (and even though, unlike the other two cases argued that day, the federal takings claim is ripe).

This one started in federal court, where the property owner asserted the city's rejection of its development application worked a taking. In response, the city ran to state court and filed an eminent domain action to take the owner's fee simple interest in the land (we presume that's the property the city is condemning, because the opinion doesn't specify). Next, the city ran back to federal court with its state court complaint in hand and asked the federal court to exercise Pullman abstention to let the state court condemnation action play out first. The district court agreed ... federal case gone (for now).

Rejecting the owner's argument that abstention here was just a backdoor state-procedures exhaustion requirement -- both of which were rejected by the Supreme Court in Knick and Pakdel -- the Ninth Circuit affirmed. The panel first concluded that there's nothing in either of those cases that make federal takings claims immune from Pullman abstention. Those cases involved ripeness and exhaustion, and didn't say anything that prohibit federal courts from ducking federal civil rights issues. See slip op. at 7 ("As an initial matter, neither Knick nor Pakdel explicitly limit abstention in takings litigation. Neither case even addresses abstention."). Abstention is to avoid "friction" between federal and state courts, and to prevent federal courts from unduly interfering with the delicate balance between the states and the federal courts. Id.

Addressing the owner's argument that Pullman abstention results in a de facto return to the state court exhaustion requirement rejected by Knick, the panel concluded that "[t]he state court can adjudicate the eminent domain action without reaching the regulatory taking issue because eminent domain and regulatory takings suits compensate property owners for different injuries." Slip op. at 9.

Eminent domain compensates property owners for the forced sale of their properties to the government; the property is transferred to the government, and the owner is paid the property’s fair market value as of the date the government made a deposit on the property. Cal. Code Civ. Proc. § 1263.310. A regulatory taking action, on the other hand, compensates a property owner for “[t]he economic impact of [a] regulation . . . and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations.” See Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538–39 (2005) (quoting Penn Central Transp. Co v. New York City, 438 U.S. 104, 124 (1978)); Steven J. Eagle, Regulatory Takings § 8-9(a) (2021) (surveying methods of calculating compensation proportional to harm and level of interference).

Id.

In our view, the actual differences between a regulatory takings/inverse claim and an exercise of eminent domain are not those identified by the court, because it isn't so much about different injuries (eminent domain isn't at all about "injury" at all), but more like different property being taken and valued. Here, the owner's regulatory takings claim asserts that by engaging in some otherwise legitimate function (denial of permission to develop), the government has, from the owner's perspective, effectively condemned the right to use the property (the development rights), or even the fee simple interest if this is framed as a Lucas taking, but has not provided just compensation for the interest(s) taken. On the other hand, the owner's argument in the state court eminent domain case isn't that the government action is unconstitutional because it has not provided compensation, but that it has not paid (or offered) enough compensation for whatever interests it is taking. Those differences have nothing to do with the owner's "injury."

And wait, you say, in the eminent domain action, doesn't the property owner have to raise the issues he's raising in the regulatory takings action as part of his defense or as part of the highest and best use of the property? We'd think yes, that the owner has some sort of argument, or defense, or counterclaim that the eminent domain action isn't fully compensating him for the interests actually taken, and either should (or more likely must) raise these issues in the state court. Or would be taking a pretty big risk by not raising the issue. 

But the Ninth Circuit panel saw no downside, and concluded that the owner could somehow reserve the federal claim, even with an England reservation!

The Gearings could defend the eminent domain action without challenging the constitutionality of the City’s enforcement of LUP Section 9.3.5 or other regulations, and simply recover the fair market value of the property as restricted by those regulations.¹ When the eminent domain action concludes, they could then litigate their regulatory taking claim in federal court and recover damages for the economic impact of the regulation and interference with their investment-backed expectations. See Lingle, 544 U.S. at 538–39. The Gearings have not cited, and we are not aware of, any support for their assertion that the constitutionality of the City’s restrictions on their properties must be adjudicated before compensation can be determined for purposes of eminent domain.

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

¹ To the extent the Gearings argue that this would result in issue preclusion that would bar their federal claims, they are incorrect, because issue preclusion only applies to issues that were “actually litigated and decided in the prior proceedings.” Snoqualmie Indian Tribe v. Washington, 8 F.4th 853, 864 (9th Cir. 2021) (emphasis added). As noted, the Gearings would not be required to litigate their takings claim in the eminent domain action. Thus, this case is distinct from San Remo Hotel II, in which the property owners were required to litigate their takings claim in state-court proceedings in order for those claims to ripen for federal review. See 545 U.S. at 347.

Slip op. at 9-10.

Having determined that Pullman abstention was not categorically precluded, the panel found it simple to conclude that the doctrine should be invoked here because land use is a "sensitive area of social policy." But if Pakdel and Knick, stand for anything, they to reflect the Supreme Court’s thorough rejection of the longstanding trope that takings claims challenging land use regulations are “local” matters outside the competency of federal judges, and that federal courts need to give local governments a lot of leeway and right-of-first-action when it comes to restricting property owners' uses.

The Court made clear that land use and takings claims are civil rights matters and are to be treated like every other civil rights claim. If federal courts can resolve cases about monkey selfies, nude dancing, creating Valentine’s Day artwork out of naked bodies, and whether pet pigeons are diseased (all examples taken from cases in which a federal court resolved the issues) then it doesn't seem like a straightforward land use question is uniquely sensitive or so inherently local as to be beyond the ken of federal judges expressly tasked by Constitution (amend XIV) and statute (section 1983) with dealing with the issue.

More on the decision here ("Does Pullman Abstention Apply to Federal Takings Claims Post-Knick?") and here ("This Week at the Ninth: Abstention and the Golden Globes").

Will there be more on this one? Stay tuned.

Gearing v. City of Half Moon Bay, No. 21-16688 (9th Cir. Dec. 8, 2022)

Happy Birthday, Regulatory Takings - Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (Dec. 11,1922)

This story might be said to have had its roots millions of years ago.

It is about coal, after all. Anthracite coal, to be exact.

But that -- and today's date -- should give you a clue that, as we teased in this post a mere 28 days ago (the Supreme Court worked hard and fast in those days), today, Sunday, December 11, 2022, is the 100th birthday of the U.S. Supreme Court's opinion in Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (Dec. 11, 1922).

True, what became known as the "regulatory takings" doctrine did not spring from whole cloth on December 11, 1922, but had been bouncing around in the common law for quite a while (see here and here for example).

But if you want to mark and official birthday for regulatory takings, you could not do better than Pennsylvania Coal (aka Mahon).

The case that launched a thousand academic tenure quests! The case that asks the oh-so-Holmesian question "how far is too far?" (and "too far" into what or from what- the owner's rights, the government's powers?). The case responsible for instructional videos. For law student cheat sheets. For wikis. For beaucoup online PowerPoint slide shows. For flashcards, for heaven's sake. 

A case cited nearly 10,000 times (thanks Westlaw):

And still kicking, despite calls for its overruling, and claims it has been sub silentio abrogated ("Abrogated?" I don't think so):

Eight-to-one, with only Justice Brandeis (predictably) in dissent.

We spent today -- a wet and snowy one -- with a colleague (and now friend) at the actual property that gave rise to the litigation in Pittston, Pennsylvania, visiting the site, talking to the present and former owners of the Mahon home, and learning more about the case, the people involved, the arguments, and the history and process of anthracite coal mining that led to the dispute.

You know the short story as set out in the Supreme Court's opinion. But you may not know the details. So in a series of upcoming posts, we'll bring you some of the more interesting aspects of the case.

Today, as we discussed the decision in what was, a century ago, Harold John Mahon, Esq.'s office (he was a lawyer you know, and along with co-counsel repped himself in the Supreme Court), we imagined that this might have been what he saw when he received the telegraph from Washington, D.C. on December 11, 1922, notifying him that the Court had ruled against him:

Before the day was through, we paid a visit to Mr. Mahon at the nearby cemetery, just to let him know that there are no hard feelings, and that the regulatory takings doctrine his case spawned is alive if not entirely well.

Here, at the Craig-Mahon family plot, he lies in repose with Mrs. Mahon.

Her story takes a most interesting twist (more on that in future posts).

So stay tuned. This post is just a teaser because we just had to post something today, in recognition of the 100th anniversary of the opinion.

But more will come on the Pennsylvania Coal Co. v. Mahon story. 

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (Dec. 11, 1922)

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

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

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

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

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

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

Don't miss it.

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

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

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

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

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

Here's the Question Presented:

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

Follow along on the Court's docket here.

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

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

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

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

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

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

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

Here's the Question Presented in the Wilkins case:

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

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

The question presented is:

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

Be sure to listen in on Wednesday.

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

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

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

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

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

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

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

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

Slip op. 29-30 (footnote omitted).

The court summed up the takings claim in a footnote:

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

Slip op. at 33 n.20.

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

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

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

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

CA5: No Jurisdiction Over Federal Takings Claims Against A State

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

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

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

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

That's it.

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

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

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

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

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

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

• Private Utility Takeovers – Lessons From a 67 Day Trial

• Valuation Issues When Billboards and Signs are Condemned

• Setting Client Expectations and Identifying Red Flags

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

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

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

• ...and much more!

To register, go here.

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

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

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

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

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

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

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

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

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

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

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

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

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

If only they had the arguments recorded!

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

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

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

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

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

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

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

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

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

Follow along on the Court's docket here.

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

CA9 Takings Ripeness Oral Arguments: Must Property Owners Secure Govt's Agreement That Property Is Subject To Challenged Regulations Before A Court Can Review?

October 20, 2022 was what one advocate noted was "land use day at the Ninth Circuit," because three out of the four cases being argued in Courtroom 3 of the San Francisco courthouse were indeed land use -- or perhaps more accurately, regulatory takings -- cases.

Ours was one of those cases, Ralston v. San Mateo County.

Without going into too much detail, this is an appeal from the district court's 12(b)(6) dismissal of our regulatory takings complaint. The crux of the claim is that Ralston's R-1 zoned property is subject to an "overlay" district called the Montecito Riparian Corridor, a highly-restricted zone that allows only 5 environmental uses of land within the zone (none of which are consistent with the R-1 zoning). (Ralston's property is labeled "076-19" on the County's MRC map.)

Absent some kind of special dispensation -- what the County calls an "override" -- the County cannot grant a Coastal Development Permit for a residential use in accordance with the R-1 zoning, because CDPs must be consistent with both the Residential zoning, and the MRC overlay.

Following the County's instructions that "[a]ny intention to proceed with an application for development that would run counter to any of those policies must first be throughly [sic] reviewed by the Community Development Director and County Counsel[,]" Ralston did ask the Planning (Community Development) Director. He received what he thought was a pretty definite response: no development in the MRC, and no override.

But the County argued the Planning Director's response wasn't an official denial, and the district court agreed, holding that the case was not ripe under the "final decision" rule of Williamson County, because the County might have granted a waiver of the MRC restrictions and issued a CDP for a residence, if only Ralston had asked the right way by applying for a CDP and then exhausted the County's review process.

In addition to that issue, the focus of yesterday's oral arguments was also on a slightly different issue: the panel questioned the advocates (esp. me!) about whether, to ripen the claim, the County must also have confirmed that indeed, Ralston's property is subject to the above-mentioned MRC restrictions. The complaint alleged it is (see, e.g., the County's map, above). The location of the MRC is determined by how much of a property is covered by certain vegetation, and indeed, Ralston's property is covered, stem-to-stern with arroyo willow, one of the species listed in the County ordinance.

"It is like a finger, pointing a way to the subject property,
back there by the big dead pine tree..."

We argue that alleging this -- which as a factual allegation must be taken as true at this stage -- is enough to ripen the claim, but the County and the Coastal Commission assert that Ralston must have obtained the County's final confirmation that his property is subject to the MRC regulations, before his lawsuit was ripe. In other words, whether this property is indeed at least 50% covered in arroyo willow is not a fact question (for pleading), but rather a scientific and technical legal question that the County must first be given a chance to exercise its discretion about, via some kind of application and official response from the County.

Stream the arguments above, or download the mp3 (big file!) here. And along with us, keep your fingers crossed for a favorable result from the panel.

Stay tuned.

Oh, Canada! SCOCAN: Constructive Appropriation (Regulatory Takings) Claim Need Not Be Based On Land Acquisition; Taking Of Beneficial Interest Suffices

Here's one we've been waiting to drop, in a case we've been following.

Today, in Annapolis Group Inc. v. Halifax Regional Municipality, No. 39594 (Oct. 21, 2022), the Supreme Court of Canada held (and we're translating into United States here), that to state a claim for a regulatory taking based on the government's refusal to approve a development application consistent with the residential zoning, requires only that the plaintiff allege a taking of a beneficial interest, and does not require that the government have seized land.

Our northern friends do not label this claim a "taking" or "regulatory taking," but use different terms: de facto expropriation or constructive appropriation, or constructive taking, or even "disguised expropriation." You get the drift. (For the record, we really like "disguised expropriation.")

One major difference between Canadian takings law and the U.S. approach is that Canada does not consider property rights to be constitutional rights. Property rights are either common law or statutory. But that being said, in some ways Canada does it better, so you should not presume that simply because Canada law doesn't constitutionalize property that owners' rights are somehow lesser.

Here, instead of approving the plaintiff's development application, Halifax "promoted the Annapolis Lands as a park by inviting the public to use them as such and permitting its logo to be placed on trail signs directing the public onto them." Not very polite, Halifax! The landowner brought a de facto expropriation claim, asserting that the government's exercise of zoning power deprived the owner of the reasonable uses of land and instead created a public park, and seeking compensation under the common law test established in Canadian Pacific Railway v. Vancouver (City), 1 S.C.R. 227, 2006 SCC 5 (2006).

The trial court denied Halifax summary judgment. On appeal, the Nova Scotia court of appeal concluded that a claim for constructive appropriation must be based on an actual seizure of land, and Annapolis had not made that allegation. Thus, property owner had no chance for success. Reversed.

The owner sought further review. A divided Supreme Court rejected the court of appeal's analysis and affirmed the existing CPR two-part test for a regulatory taking: "the common law rule in the form of a two-part test for showing a constructive taking: '. . . (1) an acquisition of a beneficial interest in the property or flowing from it, and (2) removal of all reasonable uses of the property . . .'" Slip op. at ¶ 25. The Court also considered whether the government's motive played any part in the analysis.

There's no need for physical taking, the Court held, just deprivation of uses of a beneficial interest. "A “beneficial interest” is to be broadly understood as an “advantage”; as such, the interest acquired by the state can fall short of an actual acquisition by the state."

The issues present in this appeal require us to consider the meaning of a “beneficial interest in the property or flowing from it” under the first part of that test. In bringing greater clarity to this aspect of the CPR test, we do not change the doctrine of constructive takings, but simply apply it to the facts of the present dispute. As we will explain, the Court in CPR did not use “beneficial interest” in the technical sense that it carries in the domain of equity. Rather, a “beneficial interest” is to be more broadly understood as an “advantage” — hence the Court’s coupling of “beneficial interest” with the phrase “or flowing from [the property]”. Clearly, if the interest acquired by the state can be one which flows from the property, what must be shown by the property owner can fall short of an actual acquisition by the state.

Slip op. ¶ 25.

The majority held that beneficial interest referred to was some economic or other advantage -- even one conferred by the government -- some "benefit" that has an advantage behind it (shades of Kaiser Aetna: " But not all economic interests are 'property rights;' only those economic advantages are 'rights' which have the law back of them, and only when they are so recognized may courts compel others to forbear from interfering with them or to compensate for their invasion.").

The majority walked through each of the Court's prior constructive appropriations decisions to show that when it referred to "beneficial interest" it wasn't limited to a physical interest in land. In short, we're reading this opinion to affirm a very expansive view of property rights.

The Court also considered the government's motives, and rejected the different rationales advanced by both of the lower courts. The disguised expropriation claim is not absolutely dependent on the motive of government, good or bad -- but rather on the effect the regulation has on the owner's property rights. But evidence of motive might be evidence of the government's intent to deprive the owner of reasonable uses:

[52] Respectfully said, neither position is correct. The public authority’s intention is not an element of the test for constructive takings at common law. Again, the mischief addressed by the doctrine is one of advantage and effects, not that a public authority acted in bad faith or with an otherwise ulterior motive. Indeed, this Court held in CPR that, even if the City’s purpose were to “enable the inhabitants to use the corridor for walking and cycling,” its bylaw, in effect, neither encouraged trespassing nor prevented the historical and current use of the land (para. 33) and therefore could not be said to have deprived the landowner of all reasonable uses.

[53] This does not mean, however, that intention is irrelevant to the inquiry. Indeed, the case law we discuss below suggests that the objectives pursued by the state may be some evidence of constructive taking. Stated differently, the intention to take constructively, if proven by the claimant, may support a finding that the landowner has lost all reasonable uses of their land (inasmuch as a finding of this effect can be supported by evidence that such an effect was intended). But the absence of evidence of the state’s intention does not preclude a property holder’s claim. It follows that intent may constitute a “material fact” in the context of a constructive taking claim. We stress, however, that the focus of the inquiry must remain on the effects of state action.

Slip op. ¶ 52-53.

The Supreme Court publishes "plain language" summaries of their opinions so the public can understand the Court's rulings (how polite!). Here's how the Court described this decision:

Writing for a majority of the judges of the Supreme Court, Justices Suzanne Côté and Russell Brown found that Annapolis’ claim of constructive taking raises disputed issues of fact that must be decided at trial, based on the constructive taking test set out in the Canadian Pacific Railway Co. case.

There are two parts to the test for establishing a constructive taking. First, the test must show the government has acquired a beneficial interest in the property or flowing from the property. A beneficial interest is an advantage, such as when private property is enjoyed as a public resource. Second, the test requires showing the proposed regulatory measures would remove all reasonable uses of the private property.

The Nova Scotia Court of Appeal had interpreted the first part of the test as requiring Annapolis to show that Halifax had actually taken possession of the lands. However, Justices Côté and Brown wrote, “what must be shown by the property owner can fall short of an actual acquisition by the state.” The majority said the Court of Appeal was also wrong in holding that Halifax’s intention is irrelevant to applying the second part of the test.

The majority of the Supreme Court noted, “Annapolis is entitled to adduce evidence at trial to show that, by holding Annapolis’ land out as a public park, Halifax has acquired a beneficial interest therein; and that, because Halifax is unlikely to ever lift zoning restrictions constraining the development of Annapolis’ land, Annapolis has lost all reasonable uses of its property”. Annapolis may also adduce evidence of Halifax’s intention in not doing so, the majority said.

Read the entire summary here.

As noted above, we've been following this one for a while, even watching live as the Court heard arguments back in February.

Annapolis Group Inc. v. Halifax Regional Municipality, No. 39594 (Can. Oct. 21, 2022)

CA6: Home Equity Is Property Even If State Law Says Otherwise: Govt Can't Foreclose To Satisfy A Tax Debt, Then Keep The Change

We won't be providing our detailed thoughts on last week's U.S. Court of Appeals for the Sixth Circuit's opinion in Hall v. Meisner, No. 21-1700 (Oct. 13, 2022), because we're obviously biased: our law firm colleagues Christina Martin and Kady Valois represent the prevailing property owners, so we naturally agree with the court. Thus, you should really read the opinion in its entirety yourself. But we shall offer some commentary:

• This is another one of those "home equity theft" cases where, after foreclosing property in order to satisfy a tax or other debt, the government doesn't remit the excess equity to the property owner, but keeps it or allows a private third-party to do so.
• This case is a takings challenge to a Michigan county doing just that under the authority of state law. Hall owed a tax debt of $22k, and her home was worth close to $300k. The County foreclosed, then transferred Hall's home to a local municipality which satisfied the tax debt and in turn conveyed the home for $1 to a nonprofit, which then sold it for $308k.
• The District Court dismissed Hall's section 1983 takings claim for failure to state a claim. The court concluded that the County had not obtained the "excess equity" in Hall's home, because it merely foreclosed and then conveyed the home to a separate municipality, which in return conveyed to the County only the amounts of the tax debt. Thus, the County argued, we took nothing.
• The Sixth Circuit reversed. It framed the issue thusly: "The question, then, is whether Michigan likewise disavowed traditional property interests merely by defining them away in its General Property Tax Act." Slip op. at 6.
• The court concluded that the excess equity in one's home is a private property interest because "Anglo-American legal history" has long-recognized such an interest, and English courts of equity and law considered "irrevocable forfeiture of the debtor's entire interest in the land" if mortgaged, to be "an intolerably harsh sanction for the borrower's default." Slip op. at 7.
• American courts were similarly "uniformly hostile to strict foreclosure ... where the land's value exceeded the amount of debt." Slip op. at 9.
• The court held that the Michigan statute which permitted the County to foreclose without returning the excess equity to the homeowner "contravened all these long-settled principles[.]" Slip op. at 12. The statute was an "ipse dixit" that "sidestepp[ed] the Takings Clause by disavowing traditional property interest long recognized under state law." Id.
• The court also rejected the County's argument that the County wasn't the party doing the taking, because it only foreclosed, while it was the municipality to which the property was transferred that kept the change. Slip op. at 13.
• The court similarly rejected the Michigan Attorney General's argument that the state and local governments would suffer "serious fiscal consequences" if the statute were unconstitutional. The court responded much as we might expect, and gave little stock to this chicken little claim (as most courts do).
• "In sum, the Takings Clause “is addressed to every sort of interest the citizen may possess.” U.S. v. General Motors Corp., 323 U.S. 373, 378 (1945). The plaintiffs’ equitable title to their homes was such an interest. On the facts alleged here, the County took the plaintiffs’ property without just compensation, in violation of the Takings Clause." Slip op. at 15.

So there it is. The court looked at whether the interest claimed was a long-standing and traditional property right. It was and is. Thus, although state law may redefine that right, it can only do so if it provides just compensation. If there's a big-picture takeaway from the opinion, to us it is this:

Where we respectfully disagree with the district court, however, is in its assumption that the question whether the County took the plaintiffs’ property is answered solely by reference to Michigan law. True, the federal “Constitution protects rather than creates property interests,” which means that “the existence of a property interest,” for purposes of whether one was taken, “is determined by reference to existing rules or understandings that stem from an independent source such as state law.” Phillips v. Washington Legal Foundation, 524 U.S. 156, 164 (1998) (quotation marks omitted). But the Takings Clause would be a dead letter if a state could simply exclude from its definition of property any interest that the state wished to take. To the contrary, rather, “a State may not sidestep the Takings Clause by disavowing traditional property interests long recognized under state law.” Id. at 167.

Slip op. at 5 (emphasis added).

For more, check out Christina Martin's recent guest spot on the Eminent Domain Podcast, and John Stossel's report, "Stealing Homes."

Hall v. Meisner, No. 21-1700 (6th Cir. Oct. 13, 2022)

Brigham-Kanner Property Rights Conference Wrap-Up

The William and Mary Law School has posted David Morrill's summary of the recent Brigham-Kanner Property Rights Conference.

In addition to a full day of academic and practicing bar speakers on Friday, and the award banquet on Thursday evening, the Conference included two full days of student-oriented programming earlier in the week, where practicing land use and property rights spoke about their practices, the hot topics in the field, and how they ended up in this practice area. Every session was well attended, as the photos from the events show.

Check it out. And please join us at future Conferences!