inversecondemnation.com

SCOVA Oral Argument: Does A City Have The Right To Pollute Chesapeake Bay?

Here's the latest in a case we've been following. We even visited the site with our class last year. 

Today, the Virginia Supreme Court heard argument on the petition for appeal (streaming above from the webstream, or download the mp3 here) in what we call the oyster case because it involves the property rights of Nansemond River oystermen, whose oyster beds were polluted by sewage from the City of Suffolk.

Bottom line from today's argument: no decision yet. These arguments are short (10 minutes), only the petitioner is allowed to argue, and today's argument did not elicit any questions from the three-Justice panel. So we wait. 

Some background, since this is a case at the intersection of property and takings law, and environmental protection. The oystermen own a lease from the state for the riverbed, which among other things, allows them to harvest some of the oysters that Virginia is so well known for. But they were forced to bring an inverse condemnation claim in state court, asserting that the City's dumping of wastewater in the river -- and prohibiting the harvesting of oysters during those times -- was a taking under both the U.S. Constitution, and Virginia's taking or damaging clause. 

The trial court sustained the City's demurrer, accepting the City's argument that it has the right to pollute the river, based in part on the U.S. Supreme Court's decision in Darling v. City of Newport News, 249 U.S. 540 (1919) and a. The court acknowledged that the oystermen's lease is property, but concluded that the city and sanitation district possess a superior right to pollute the river with sewage.

So now the oystermen are asking the Virginia Supreme Court for discretionary review. Virginia's inverse condemnation doctrine -- set out most recently in Livingston v. VDOT and AGCS Marine Ins. Co. v. Arlington County -- is also a big question

Will this case be resolved by a century-old precedent that recognizes a local government's ability to pollute a public river with sewage? Have our notions of private property evolved since then? Will Virginia's greater recognition of property rights make a difference?

All questions that could be answered if the court accepts review. Stay tuned.  

New Cert Petition (Ours): Must An Owner Whose Land Is Flooded Also Prove "Substantial" Loss Of Use?

US 50 in Nevada - the "Loneliest Road"

Here's the cert petition which we and our Nevada colleague Luke Busby filed today, asking the U.S. Supreme Court to review this Question Presented:

Conflicting with Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982), the Supreme Court of Nevada concluded that to prevail on a physical takings claim a property owner must show that a flood “effectually destroy[ed] or impair[ed] [the property’s] usefulness.”

The question presented is:

To constitute a taking under the Fifth and Fourteenth Amendments, must a physical invasion also destroy or substantially impair an owner’s economically beneficial uses of property?

Rather than summarize the case and the issues, here's the Introduction: 

Physical occupations—as distinctly invasive public uses of private property—are treated by this Court differently than regulatory takings. Although the Court has consistently avoided adopting categorical rules in most takings cases, it has also long-recognized that physical invasions are governed by more bright lines. See Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 322 (2002) (“When the government physically takes possession of an interest in property for some public purpose, it has a categorical duty to compensate the former owner.”) (emphasis added) (citing United States v. Pewee Coal Co., 341 U.S. 114, 115 (1951)).

One of the brightest of the bright line rules is that in cases of physical invasion, the loss of use, if any, is not a part of the takings equation, much less the dispositive factor. Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) is perhaps the most famous example. In that case, the Court concluded that even a de minimis physical occupation—the installation of a tiny cable television box on the roof of the owner’s apartment building—was a taking, even though the box in no way interfered with the owner’s use of her roof or building (and indeed may actually have enhanced her use by providing cable service).

Here, however, the Nevada Supreme Court adopted a contradictory rule that unnecessarily blurred the well-established distinction between physical and regulatory taking, and takings and torts. It concluded that when private property is intentionally flooded by the government, the physical invasion of water must also be accompanied by “substantial injury” to the owner’s economic use of the land. App. 5 (“For a taking by flood water to occur, there must be a physical invasion of flood waters resulting in substantial injury.”). The Nevada court defined “substantial injury” very broadly, as destruction or impairment of a properties’ usefulness. Id. (“For substantial injury to exist, the physical invasion must ‘effectually destroy or impair [the property’s] then usefulness.’ ”) (quoting Clark County v. Powers, 611 P.2d 1072, 1075 n.3 (Nev. 1980)).

In effect, this ruling authorizes the public to use all or a portion of private property as a drainage and storage easement for storm and surface water as long as the owner may use the flooded property at some other time, or some other part of the property for some other purpose besides the County’s intermittent flowage easement.

The Nevada Supreme Court’s ruling wrongly conflates physical invasion takings with regulatory takings, and conflicts with this Court’s precedents and the decisions of other lower courts. This Court should review the judgment of the Nevada Supreme Court.

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

1. Arkansas Game and Fish Comm’n v. United States, 568 U.S. 23, 31 (2012) (“In view of the nearly infinite variety of ways in which government actions or regulations can affect property interests, the Court has recognized few invariable rules.”).

Pet. at 2-3. Stay tuned.

Petition for a Writ of Certiorari, Fritz v. Washoe County, Nevada, No. 19-___ (Mar. 23, 2020) 

Cert Denied In Carousel Farms

This morning, in this order, the U.S. Supreme Court declined to review the Colorado Supreme Court's decision in the Carousel Farms case. 

That's it, that's all we've got. 

Unboxing The 2021 (Scottsdale) ALI-CLE Eminent Domain Conference Swag: Get Yours Today!

Missed out on the 2021 ALI-CLE Eminent Domain and Land Valuation Litigation Conference swag?

Well fear not: here's your chance to get your high-class reminder -- a kit of road warrior essentials -- to save the Conference date on your calendar. We're already underway with planning the agenda and faculty, so it's never too soon to block it off (January 28-30, 2021, at the 4-Diamond DoubleTree Resort, Scottsdale, Arizona). 

If you were not able to get your swag in Nashville, send us a note (rht@hawaiilawyer.com) and we shall gladly drop one or two in the mail to you.

While supplies last!  

Pennsylvania Coal Revisited: Outlawing Silica Mining Isn't A Taking, Even Though Mining Rights Are "Property" Under State Law

Here's the latest in a case we've been following that involves a local government prohibiting, via a zoning ordinance, the mining of silica (used as "frac sand"). Kind of like how Pennsylvania barred certain coal mining in our old friend, Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922). 

In Minnesota (where our story takes place) the right to subsurface minerals is separate from the rest of the land. Kind of like how Pennsylvania law recognized subsurface rights as a separate "stick" in Mahon. Here, the plaintiff owned several leases which allow it to mine silica. Sounds like a property interest, no? 

Well, no. At least not to a majority of the Minnesota Supreme Court, which held in Minnesota Sands, LLC v. County of Winona, No. A18-0090 (Mar. 11, 2020) (affirming the court of appeals) that the right to mine silica was a property right, but because it was "inchoate," it was not really a vested property right that covered by either the U.S. or Minnesota takings clause.

We won't go into great detail in this post (you can either read the opinion itself, or our earlier write up on the court of appeals' decision), but the overall vibe of the majority opinion is summarized in footnote 19 on page 34 of the slip opinion:

The dissent’s claim that our decision affords the government immunity to regulate the leases "out of existence" is incorrect. Our decision proceeds on the uncontroversial premise that the government cannot "take" property rights that a party never had. See Murr v. Wisconsin, __ U.S. __, __, 137 S. Ct. 1933, 1951 (2017) (Roberts, C.J., dissenting) (noting that the first question in a Takings Clause claim is “what ‘private property’ the government’s planned course of conduct will affect”). Likewise, the government does not regulate out of existence a leaseholder’s rights that terms of the lease never granted. It bears emphasizing that the rights granted under the terms of the lease agreements were determined by the parties. The decision to limit Minnesota Sands’ rights to a contingency interest that would not become definite unless the government granted a conditional-use permit was the company’s.

Slip op. at 34 n.19. In short, Minnesota Sands had not obtained a Conditional Use Permit.

We're not sure that the majority's reading of the lease terms to make the property rights granted by the lease "conditional" on the mining company obtaining a CUP, but this was the majority's way of trying to insulate the opinion from U.S. Supreme Court review. After all, what a lease means is a matter of state contract law, no? 

As we did with the court of appeals' opinion, we focused on the rationale set out by the two dissenting Justices. The dissenting opinion begins after page 39 of the slip opinion, and the "takings" analysis begins on page D-8. We urge you to read it in depth. The heart of the dissent's arguments is that the court should not have thrown the case out on the threshold property question, but should have reached the merits of whether the ban is a taking:

Because mineral leases, including the leases at issue here, have been “long recognized” as property, Phillips, 524 U.S. at 167, the protected property interest defined by those leases may not be regulated out of existence by the government, see Pa. Coal Co. v. Mahon, 260 U.S. 393, 415 (1922) (explaining that regulation will be recognized as a Fifth Amendment taking if it “goes too far”). Put another way, leasehold interests are protected by the Takings Clause of the United States Constitution. Because Minnesota Sands argues that its mineral leases were taken by the county ordinance, this case should, at a minimum, be remanded to the district court for an inquiry that considers factors “such as the economic impact of the regulation, its interference with reasonable investment-backed expectations, and the character of the government action.” Horne v. Dep’t of Agric., ___ U.S. ___, ___, 135 S. Ct. 2419, 2427 (2015) (discussing the takings factors to be considered under Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 124 (1978)).

Dissent at D-10-D-11 (Anderson, J., dissenting) (footnote omitted).

We think Justice Anderson's dissent teed up a pretty good SCOTUS cert petition on either Penn Central or Palazzolo:

Legally, even if we could accept the court’s abridged take on the leases, I disagree with its abridged take on the Fifth Amendment. Under the court’s view of this constitutional protection, it does not matter how significant the interference of a regulation is with the “reasonable investment-backed expectations” of a property owner. Horne, ___ U.S. at ___, 135 S. Ct. at 2427 (discussing the Penn Central factors). Indeed, according to the court, it does not matter if the government subjected the owner’s private property to a total regulatory taking, see Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1016 (1992), if the owner’s property was not sufficiently “vested” before the regulation became effective. An owner’s regulatory takings claim, partial or total, may proceed only after the owner has a “vested interest to use” the property as expected. Here, according to the court, that means that Minnesota Sands has no constitutionally protected property interest until Winona County approves mining silica sand for hydraulic fracturing, which is the proposed use of Minnesota Sands’ leaseholds. Therefore, under the court’s logic, Minnesota Sands may not bring a Takings Clause challenge to Winona County’s frac sand mining ban until Winona County first permits frac sand mining.

Dissent at D-12-D-13 (Anderson, J., dissenting) (footnote omitted). As we wrote in our post about the court of appeals' decision, the majority's rationale is a classic bootstrap argument:

The majority's rationale was that there's no property interest because Minnesota Sands didn't get a CUP. Which overlooks the fact that under the ban, it cannot get a CUP. So the  very ban being challenged is what eliminated the plaintiffs' claim of owning property. Bootstrapping at its finest, and inconsistent, in our view, with the rule in Palazzolo v. Rhode Island, 533 U.S. 606 (2001), that the enactment of a regulation does not deprive a property owner of the right to challenge the regulation. 

Now, just wait til the cavalry arrives.

Postscript: for you Con Law types, much of the majority and dissenting opinions delve into the question of whether the "dormant" Commerce Clause was offended by the County's ban (was this a backhanded way of discriminating against non-County miners?), but we shall leave that issue to you, if interested.  

Minnesota Sands, LLC v. County of Winona, No. A18-0090 (Minn. Mar. 11, 2020) 

New IJ Cert Petition: Purposely Destroying Your House Could Be A Taking, Even If Govt Was Exercising Its Police Power

Here's the cert petition that we've been eagerly waiting to drop in a case we've been following (and which gathered a lot of public -- and academic -- attention and outrage). 

Yes, this is the case where the Village police pretty much destroyed a family home in the course of their efforts to dislodge a shoplifter who had taken refuge there while fleeing. Homeowner sought compensation for a taking. The Tenth Circuit, however, concluded "no taking" because the police were exercising the police power. And you can't have a taking where the government is exercising the police power.

We were not terribly surprised by the ruling as grossly unfair as it is, because it is pretty typical: customs agents inspect and seize your laptop at the border to check it out but destroy the data on the hard drive? no taking; DEA holds your legal prescription drugs as evidence against a third party but eventually don't use the evidence and return it to you (but by then the drugs have expired)? no taking. But not every jurisdiction goes that way, however.

The Institute for Justice has taken up the case, and the petition poses this Question Presented: 

Using explosives and a battering ram attached to an armored personnel carrier, the Greenwood Village Police Department intentionally destroyed Petitioners’ house. Afterwards, they offered the family $5,000 “to help with temporary living expenses.” The family sued, arguing that they were entitled to Just Compensation under the Fifth Amendment for the intentional destruction of their house. The Tenth Circuit, however, held that no compensation was due because the home was destroyed pursuant to the police power rather than the power of eminent domain.

The question presented is whether there is a categorical exception to the Just Compensation Clause when the government takes property while acting pursuant to its police power.

We've always thought that basing a "no compensation" rule on the distinction between what power the government is exercising doesn't make a lot of sense, especially in an inverse claim such as this where yeah, we all know the government isn't exercising its eminent domain power. Because isn't the basis of the "takings" doctrine that even where government isn't formally taking property by eminent domain, it can still be liable for compensation, when it has in fact done so for public use? We think that there are better ways to look at the question on false distinctions about what power the government is exercising (it's all government power, man). 

This petition squarely presents the question, so we shall continue to follow along. 

Petition for a Writ of Certiorari, Lech v. City of Greenwood Village, No. 19-___ (filed Mar. 11, 2020)

Maryland Court Of Appeals Considers Statutes Of Limitations In Inverse Condemnation: Do Appeals Toll Time?

Here's the video of the OA held this morning (March 10, 2020) in a case we've been following, about the statute of limitations governing inverse claims. Maryland Reclamation Association filed an regulatory takings claim in 2013, and eventually the jury awarded a whopping $45 million in just compensation and interest. Hartford County asserted the claim was barred by the three-year statute of limitations, and the claim accrued in 2007 when the Board of Appeals administratively denied MRA's variance request. 

The Maryland Court of Special Appeals concluded that "An inverse condemnation claim 'accrues when the affected party knew or should have known of the unlawful action and its probable effect.'" Okay, the County responded, MRA discovered the County's conduct in 2007 when the Board denied the variances. In response, MRA asserted that the taking must become "permanent or stabilized," and that didn't occur until the court of appeals affirmed the denial of the variance. The court of appeals agreed with the County that the "final decision" for purposes of both ripeness and statutes of limitation was the Board's denial of the variance.

"Stabilization" unnecessary. Appeals further up the food chain are just appeals. 

The Maryland Court of Appeals (the highest court in the state) granted discretionary review, and the court's website spells out the issues under consideration:  

No. 52 - Maryland Reclamation Associates, Inc. v. Harford County, Maryland

Issues – Constitutional Law – 1) Does a takings claim under the Maryland Constitution accrue at the time of a stayed administrative decision or at the time of a final judicial decision affirming that result? 2) May a regulatory taking become permanent and stabilized before a court of proper jurisdiction determines the validity of the regulation effecting the taking? 3) Should Petitioner’s takings claim be dismissed based on Petitioner’s failure to raise this constitutional issue in any administrative proceeding? 4) Did the decision of the Harford County Board of Appeals prohibiting a proposed use of Petitioner’s land to protect the public constitute a taking for which compensation is due? 5) Does the jury’s damages award as compensation for an unconstitutional taking contravene Maryland law when the damages are not the fair market value of Petitioner’s land but are, instead, the capitalized profits of a hypothetical business?

Watch and listen. We shall continue to follow this case. 

Final Cert-Stage Briefs In Case Asking: Does The Self-Executing Just Compensation Clause Abrogate A State's 11th Amendment Immunity?

Here are the final cert-stage briefs in a case we've been following for what seems to be a long time.

We say that because we represented the property owner the last time it was up before SCOTUS, when we came tantalizingly close to making the cut. 

After the Court denied review, the property owner sued the Commission in federal court, asserting that being undercompensated in state court was itself a violation of the U.S. Constitution.

The district court dismissed the case, followed by the Fifth Circuit affirming in Bay Point Properties, Inc. v. Mississippi Trans. Comm'n, 937 F.3d 454 (5th Cir. 2019). The Fifth Circuit held that a property owner who asserted that it was not fully compensated in state court inverse condemnation case, could not then sue the state DOT in federal court for the difference. The reason wasn't based on the substance of the allegations, but on Eleventh Amendment immunity. A footnote in the Fifth Circuit's opinion presaged the cert petition, effectively booting the case upstairs to SCOTUS. And here we are now.

The Petition presents this straightforward question:

Whether the “self-executing” Just Compensation Clause abrogates a State’s Eleventh Amendment immunity, allowing a property owner to sue the State for a taking of property.

The Commission filed a Brief in Opposition last month, and the property owners have now replied.

So we're done with the briefing, and all we need do now is wait for the conference, and the results. 

This is a fascinating issue, and a case we all should be following. Stay tuned. 

Reply in Support of Petition for Writ of Certiorari, Bay Point Props., Inc. v. Mississippi Trans. Comm'n, N... 

Brief in Opposition, Bay Point Props., Inc. v. Mississippi Trans. Comm'n, No. 19-798 (Feb. 20, 2020) 

New Cert Petition: Are Patents "Property" Protected By The Takings Clause (Is Inter Partes Review A Taking)?

You recall that a short while ago, in Oil States Energy Servs., LLC v. Greene's Energy Group, LLC, 138 S. Ct. 1365 (2018), the Supreme Court held that patents are a form of "public property" (more like a government-created entitlement), and thus Congress can withhold the usual Article III tribunal and a jury when the validity of that property is challenged. The majority held that "inter partes review," under which the Patent and Trademark Office administratively reconsiders (and may cancel) previously-issued patents, does not run afoul of the Constitution because a patent is a "public right," and therefore more like a grant of a franchise than classic common law property.

Although the Court validated inter partes review, it left open the question of whether a patent owner who has her patent (in thousands of cases, these patents were issued before inter partes review was adopted) invalidated via administrative inter partes review would have a claim against the federal government for a taking, noting that patents may be "property for purposes of the Due Process Clause or the Takings Clause" (think rails-to-trails and Preseault). 

Well, here's that claim squarely presented in a case we've been following.

In Celgene Corp. v. Peter, 931 F.3d 1342 (Fed. Cir. 2019), the Federal Circuit concluded that the invalidation of an issued patent was not a taking. The (former) patent owner's cert petition asks this Question Presented:

When Congress passed the America Invents Act (AIA) in 2011, it created a new administrative proceeding called “inter partes review” for reviewing the validity of previously issued patents. See Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 6, 125 Stat. 284, 299-313 (2011). In the same Act, Congress created the Patent Trial and Appeal Board, a new administrative tribunal for conducting inter partes review. Id. § 7. That Board, now numbering 270-plus “administrative patent judges,” was given the retroactive power to cancel patent rights conferred prior to enactment of the AIA, “even though that procedure was not in place when [those patents] issued.” Oil States Energy Servs., LLC v. Greene’s Energy Group, LLC, 138 S. Ct. 1365, 1379 (2018). In just its first four years, the Board invalidated more than 16,600 patent claims, most of which were likely issued before inter partes review was enacted.

This case presents a question expressly left open in Oil States:

Whether retroactive application of inter partes review to patents issued before passage of the America Invents Act violates the Takings Clause of the Fifth Amendment.

Lots to absorb here: takings, "vested rights" and reliance, there's even a quasi-Contracts Clause vibe. So we shall be following along. 

Petition for a Writ of Certiorari, Celgene Corp. v. Peter, No. 19-1074 (Feb. 26, 2020) 

Cases And Materials From Today's WM Law ACS Talk: "Pipelines at the Intersection of Environmental, Administrative, and Property Law: How Divergent Interests Joined Forces To Challenge Big Energy"

We just completed a fun hour-long talk with the students in the William and Mary Law School's American Constitution Society, the Native American Law Society, and the Society on Environmental and Animal Law about the various pipeline cases that are ongoing nationwide. (If our tech worked, we shall post the audio recording in a future post.)

The theme of our talk was that these cases are an excellent illustration of the need for lawyers to think outside their usual lanes when it comes to addressing and solving their clients' problems, because they present a smorgasbord of legal issues that range from property and eminent domain law, to administrative law, constitutional law, state and local government law, environmental law, federal courts, and civil procedure. 

The lawyers who are litigating these cases have done a good job of not being bound by convention and thinking creatively. They are thankfully analyzing the cases holistically. We used today's talk to emphasize to our young colleagues that despite taking law school courses segregated into discrete areas of law, practicing law and solving people's problems often requires you to wear multiple hats, as in these pipeline cases, and to think about cases in a more general way. 

Here are the links to the decisions we spoke about, and a couple others we could not fit in the time allotted:

• SCOTUS Transcript, U.S. Forest Svc. v. Cowpasture River Preservation Ass'n, No. 18-1584 (lawyers in an "enviro" case had to put on their Roman and English law property hats) 
• The "quick take by injunction" cases, in which the Supreme Court denied cert three times last Term.  Read about our amicus brief on the issue: "New SCOTUS Amici Brief (OCA, NJ Prop Owners, IJ, Cato): Quick-Take-By-Injunction Scheme Shows Complete Lack Of Respect For The Law"
• The Third Circuit case on the same issue, where one of the property owners (the State of New Jersey) actually won, by dusting off their Federal Courts and Con Law treatises, about the Eleventh Amendment. "What A Difference The Defendant Makes: The Federal Courts Finally Locate A Natural Gas Act Preliminary Injunction They Don't Like."
• FERC's pushback on the Eleventh Amendment issue on Chevron deference grounds (Admin Law alert!) "FERC Invokes Chevron Deference, Rules That Under NGA, Private Condemnors May Take State-Owned Land."
• Civil Procedure and Erie: "In Federal Natural Gas Act Takings By Private Condemnors, Just Compensation Is Determined By State Law (Incorporated Into Federal Common Law)."
• "Is Land Only Partly Owned By A Tribe Immune From Eminent Domain?"
• Admin Law Purgatory: "Waiting For FERC: DC Circuit OK's Pipeline Approval, Over Salty Concurring Opinion."

Thanks to the students for asking me to speak today. I had a great time. 

Latest Ep. Eminent Domain Podcast: Carousel Farms Cert Petition, William & Mary Law

Here's the latest episode of Clint Schumacher's Eminent Domain Podcast. Featuring an interview with the Institute for Justice's Robert McNamara about an eminent domain case we've been following, Woodcrest Homes, Inc. v. Carousel Farms Metro. Dist., No. 19-607 (cert. petition filed  Nov. 7, 2019). Also included, a short talk with Delia Root, a William and Mary Law student who attended the Nashville ALI-CLE Eminent Domain conference. 

Check it out. 

Sixth Circuit Reminds Us That Rooker-Feldman Does Not Limit Judicial Takings Cases

After the recent demise of Williamson County's state procedures requirement, we've been looking at other ways in which takings claims raised in federal courts may be challenged. You know, things like the Eleventh Amendment, the still-valid final decision rule, full faith and credit and res judicata, and our old favorite obscure legal doctrine, Rooker-Feldman. Especially in the context of judicial takings. 

You remember the Rooker-Felman doctrine (named after the two Supreme Court decisions which defined its contours), right? All it says is that U.S. District Courts do not have appellate jurisdiction to review final judgments of state supreme court. That's it. But thanks in part to an article by a law school mentor of ours (Williamson B.C. Chang, Rediscovering the Rooker Doctrine: Section 1983, Res Judicata and the Federal Courts, 31 Hastings L.J. 1337 (1980)), the doctrine was read much more expansively -- to preclude in many cases judicial takings claims -- until the Supreme Court put the brakes on. 

The Sixth Circuit's recent opinion in VanderKodde v. Mary Jane M. Elliott, PC, No. 19-1091 (Feb. 26, 2020) is a good reminder of the limited scope of the doctrine. There, the court held:

First, Rooker-Feldman “applies only when a state court renders a judgment—when the court ‘investigates, declares, and enforces liabilities’ based on application of law to fact.” Id. at 892 (brackets omitted) (quoting Feldman, 460 U.S. at 479).

Slip op. at 6. The court concluded that the district court should not have employed Rooker-Feldman to dismiss a case in which the plaintiff challenged the method of calculating interest on state court garnishment orders, alleging that the method violated the federal Fair Debt Collection Practices Act. A writ of garnishment is not a "judgment" of a state court, and thus the federal district court wasn't being asked to exercise appellate jurisdiction. Circuit Judge Sutton concurred, and laid out the doctrine more fully than the main opinion (the excerpt above is from his concurrence).

We recommend you read both the panel opinion and Judge Sutton's. Won't take long. 

Why is this case of interest to takings mavens? Short story: if you are tempted to respond to a federal district court takings complaint by asserting Rooker-Feldman ... don't.

Even if the complaint asserts a judicial takings claim that alleges a state supreme court took property without compensation. Because in those cases, the complaint isn't asking the district court to exercise appellate jurisdiction to overturn the state supreme court. Rather, it is simply alleging that the consequence of the state court decision was a taking, and that the owner is owed compensation. 

VanderKodde v. Mary Jane M. Elliott, PC, No. 19-1091 (6th Cir. Feb. 26, 2020) 

Just Compensation Site Visit: The First Right "Incorporated" Against States, And Local Govts

Where is this? The clues are all in the picture. 

You've seen the citation so many times, your eyes probably gloss over it. After all, Westlaw lists it with 4,507 "Citing References." That's a heckuva lot of citations to a single case. 

Like this one, pulled from a recent random federal district court opinion: 

And we admit that we've done it: cited (but didn't read) Chicago B. & Q.R. Co. v. Chicago, 166 U.S. 226 (1897) for the proposition that the rights in the Bill of Rights (in that case, the Fifth Amendment right to Just Compensation) have been selectively incorporated against states and local governments under the Due Process Clause of the Fourteenth Amendment. You've done it. We've all done it. 

To cure that shortcoming, we read and analyzed the case in our William and Mary class. And before we included it in the syllabus, we had to pay a visit to the land at issue in the case. Just because we do that kind of thing.

A recent guest spot on the Institute for Justice's audio documentary series about the Fourteenth Amendment, "Bound by Oath," in which we spoke about the case, its background, and the current state of the land at issue over a century ago, reminded us that we've never posted the photos we took during the site visit, or the other interesting items we pulled from the case record. So we're going to correct that oversight, too. 

First, here's the map of the property at the time of the case, showing the "Proposed Opening of Rockwell St. from W. 18th St. to W. 19th St." 

At the time of the case, the railroad was at grade. As you recall, the dispute in the case was whether the City of Chicago was bound by the Fifth Amendment's requirement of just compensation when taking property for public use.

The railroad possessed a rail right-of-way easement that ran roughly southwest to northeast (which, ironically, it had obtained earlier by exercising eminent domain), and the City desired to open up north-south Rockwell Street. To do so it needed to cross the railroad tracks, and needed to condemn the railroad's exclusive rights to use the right-of-way. The City instituted an eminent domain action to condemn a public easement over the tracks.

The jury awarded a big fat just compensation verdict of $1.00. As the IJ podcast reminds us, that's a whopping $31 in today's money. The public road crossing didn't really interfere all that much with the railroad's exclusive use, it turns out. Not satisfied, the railroad asserted the paltry verdict was not the just compensation required by the Fifth Amendment. 

Well, technically, the railroad didn't make a "Fifth Amendment" argument. It asserted that certain rights (here, "property") are protected by the Due Process Clause of the Fourteenth Amendment from "arbitrary assertions of power" by state and local governments, much in the same way that the Fifth Amendment limits the power of the national government. 

Here are some excerpts from the railroad's SCOTUS brief:

Just compensation when property is taken for public use is a right bound up in the law of the land (aka due process or "substantive due process"), and is a general rule that governs our society -- including state and local governments. See Grotius, Blackstone, Gardner v Village of Newbergh, and all that. 

The U.S. Supreme Court agreed, and affirmed that just compensation is an inherent part of the concept of due process of law, and governs the actions of state and their municipalities via the Fourteenth Amendment. This case was the first time the Court had applied a right in the Bill of Rights to a state or local government.

And 4,507 citing references after the first "incorporation" case, here we are (even though, as IJ's Bound by Oath correctly notes, the opinion never uses the term "incorporation" to refer to applying the just compensation requirement to the states. Indeed, a word search only reveals two instances regarding incorporation, and those both related to the corporate nature of municipalities under Illinois law).

So did the Court reverse the paltry award? Nope. Despite the Court's landmark ruling that states and municipalities are subject to the just compensation requirement, March 1, 1897 was not likely a happy day for the Chicago, Burlington & Quincy Railroad Company, because the Court also affirmed that $1 was just compensation, and the jury's verdict did not offend due process. You win some, you lose some. Here's your $1 (and your invoice for your attorneys' fees).

So armed with that background, the briefs of the parties, the record, and the Supreme Court's opinion, one late summer's afternoon we set out from downtown Chicago on our takings quest.  

The first step was the case map above, which gave us the location, which we located on today's version of a map, Google: 

A short ride on the "L" and a walk brought us to the site.  

What's the corner of W. 18th and Rockwell (the top of the case map) look like today? Like this, an industrial neighborhood that doesn't seem to have changed all too much since the days of the decision. 

Unfortunately, you can't walk further south on Rockwell to see the actual location where the tracks were crossed in the case.

First, the road south of W.16th now enters onto private property. (And you know we respect private property.)

Second (another bit of historical irony), the railroad is no longer at grade, and now runs on a elevated track. And there's no underpass or tunnel. Thus, Rockwell no longer crosses the track, and dead-ends at the location of the crossing at issue in the case. 

Fortunately, even though we are not trespassers and could not get to the site, Google Maps shows us the location here. 

That's the dead-end off in the distance in the center of this photo, past those trailers. 

Undaunted in our takings pilgrimage, we decided to go around the blockage. A quick walk one block west to South Washtenaw Avenue, a turn south past the truck entrance to the Lagunitas Brewery and there's an underpass for the tracks. 

There's the underpass which gets you the south side of the tracks.

After the underpass, take a left (east) on W. 19th Street and in a block, there's Rockwell again. Hang a left, down to where northbound Rockwell Street dead-ends in some lush foliage. 

The end of the line, so to speak.

Thus, our journey to access the actual site of the grade crossing ended in a literal and virtual dead-end. This right here is as close as you can get. (You can't see clearly, but behind these bushes are the elevated tracks -- and a couple of homeless folks who apparently live back there). 

Luckily for us a long train came through, which not only illustrated the changed nature of the right-of-way, but made it so we could see clearly where the intersection at issue in the case was, all those decades ago. 

One last tidbit from the case record. The railroad's main argument was phrased in terms we today would call a "judicial taking" -- 


Certainly not the way you'd make the same argument today, no?

While we're glad we took the time to venture to the site and poke around, we're not really recommending you do the same. There's just not a lot of "there" there. The photos above and (maybe) a look around on Google Maps and Street View should be enough to satisfy even the ultra-curious takings mavens. 

All we're asking is that you think of this place next time you cite the case for the "selective incorporation" doctrine without really thinking about why. 

Chicago, Burlington and Quincy Railroad Co. v. City of Chicago, 166 U.S. 226 (1897) 

Federal Circuit: When Road Is The Property Boundary, Owner's Fee Goes Up To The "Centerline"

They're coming so fast, we can hardly keep up.

Today, in Castillo v. United States, No. 19-1158 (Feb. 20, 2020), the U.S. Court of Appeals for the Federal Circuit resolved a common issue in rails-to-trails takings cases: when a property owner holds title and her deed describes the land as bordering on a railroad line or other easement (or the property is described as a lot in a plat that shows the lot’s “property line” as adjoining a road or railroad easement), does the owner of the adjoining fee estate own the fee interest up to the "centerline" of the right of way?

Applying Florida property law, the court held yes, there is a presumption that the owner's title goes up to the "centerline." The court reversed the Court of Federal Claims's conclusion that the presumption did not apply, and that deeds describing the property as a “less and except” a right-of-way, do not convey title to the fee estate in the land under the right-of-way. Although this case was resolved by applying Florida law, the centerline presumption is present in nearly every other state's property law, and the argument is frequently made by the Government in rails-to-trails cases nationwide that the owner's property stops at the edge of the road. The Federal Circuit's opinion noted that the centerline presumption is a doctrine in every state and has been long a fundamental doctrine of property law the Supreme Court has long recognized.

Congratulations to colleagues Meghan Largent, Thor Hearne, and Stephen Davis for the win. Check it out. 

Castillo v. United States, No. 19-1158 (Fed. Cir. Feb. 20, 2020) 

CA9: Remember That $1 The Court Awarded You For The Jury's Finding Of A Regulatory Taking? We're Taking That Away, Too

Here's the latest in a long-running, multi-forum takings case about the development of affordable housing on the Big Island of Hawaii. 

Last we saw, the District Court awarded nominal compensation ($1), after the jury concluded that the State of Hawaii took Aina Lea's property. The parties cross-appealed: the State argues the district court should have granted the State's JMOL on liability, while the property owner appealed the $1 judgment. 

Today, the Ninth Circuit reversed the District Court's 's opinion, holding that the district court should have ruled in the State's favor on liability. The court remanded the case for entry of judgment in the State's favor (meaning even the $1 just compensation judgment is gone). Bridge Aina Lea, LLC v. State of Hawaii Land Use Comm'n, No. 18-15738 (Feb. 19, 2020).

We're tied up doing lawyer stuff today, so can't read or analyze the decision in detail. But once we come up for air, we shall do so. 

Bridge Aina Lea, LLC v. State of Hawaii Land Use Comm'n, No. 18-15738 (9th Cir. Feb. 19, 2012) 

Amici Briefs: What Do You Do With A Recalcitrant Condemnor Who Won't Pay The Judgment? Magna Carta 'Em!

Check out these two amici briefs, just filed in a case we've been following, about what a property owner who is awarded just compensation in a state court eminent domain lawsuit is supposed to do if the local government that is ordered to pay the just compensation judgment ... doesn't. 

The property owner sued the local government -- a Louisiana Port District -- in U.S. District Court, alleging a violation of 42 U.S.C. § 1983. That court dismissed for failure to state a claim. The property owner appealed to the Fifth Circuit. 

Several amici have joined together to file two briefs in support of the property owner: 

• Brief of Institute for Justice, Pelican Institute for Public Policy, and Mississippi Justice Institute
• DBrief of National Federation of Independent Business Small Business Legal Center, Southeastern Legal Foundation, and the Cato Institute

The IJ brief focuses on the long-standing requirement that just compensation be provided at the time of the taking:

The decision below held that Appellants have no Fifth Amendment claim because they have already received a judgment in their favor and a mere “delay” in paying cannot give rise to a Fifth Amendment violation. The district court cited no law for these propositions. Nor could it have: Its holding runs squarely contrary to 800 years of precedent, dating back to Magna Carta.

The just-compensation requirement dates back at least to the signing of Magna Carta in 1215. Among the grievances of the barons who compelled King John to sign Magna Carta was the King’s abuse of the royal prerogative of “purveyance.” Purveyance was, as Blackstone explained, the right of the king to “bu[y] up provisions and other necessaries *** at an appraised valuation, in preference to all others, and even without consent of the owner.” 1 William Blackstone, Commentaries *277. In other words, purveyance was a species of what we now call eminent domain. See Little Rock Junction Ry. v. Woodruff, 5 S.W. 792, 793 (Ark. 1887) (“[Eminent domain] bears a striking analogy to the king’s ancient prerogative of purveyance, which was recognized and regulated by the twenty-eighth section of magna charta”).

Br. at 4-5. 

The NFIB brief focuses on the state court's just compensation judgment as a separately-recognized and protected species of property that was taken without compensation when the Port refused to pay it:

For that matter, a party entitled to a monetary judgment stands in the same position as any creditor. They hold a protected property right in the value of the outstanding debt and are entitled to immediate payment -- or payment for the fair market value of what was taken in the context of an eminent domain judgment. Therefore, any appropriation of these property rights necessarily implicates the Takings Clause and the categorical rules the Supreme Court applies in physical appropriation cases.

Br. at 9.  

We shall continue to follow along with this case. 

Brief of Amici Curiae Institute for Justice, Pelican Institute, and Mississippi Justice Institute in Suppor... 

Brief of Amici Curiae NFIB Small Business Legal Center, Southeastern Legal Foundation, and the Cato 

Cool Courts Don't Look At Explosions: Third Circuit Rejects Stigma Damage Theory For Adjacent Gas Pipelines

You all know the movie trope of the good guy setting off an explosion and then coolly turning and (in slow-motion) walking away framed by the blast (so cleverly parodied above)? Well, here's the judicial equivalent.

In UGI Sunbury LLC v. 1.75 Acres, No. 18-3126 (Feb. 11, 2020), the U.S. Court of Appeals concluded that in a bench trial to determine valuation for the taking of property for a pipeline easement under the Natural Gas Act, an expert who opined on behalf of the property owner that the proximity of a pipeline to the remainder property resulted in "stigma damages," should not have been allowed to testify about this "damaged goods" theory. The district court abused its "wide discretion" under Federal Rules of Evidence 702 and Daubert by allowing the testimony. 

Rather than paraphrase the Third Circuit's reasons for reaching this conclusion that the expert's testimony was "speculative and subjective," we set it out in full here:

Take the reports. They lack any suggestion that the “damaged goods theory” has been subject to peer review or enjoys general acceptance. Nor do they contain any analysis of a known or potential rate of error. Or any standards controlling the theory’s application. Each, instead, comes from Shearer’s anecdotal experience in his grandfather’s appliance shop, where he worked as a sales representative during his high school and college years. There, Shearer “took part in many ‘scratch and dent’ sales” of goods that “had been slightly damaged” but were otherwise “as good as any other equal model that was not affected with any scratch or dent.” (App. at 113; accord App. at 689.) Drawing on this experience, Shearer observes that “the obvious appraisal question is, [d]id my grandfather get more, the same, or less for the ‘scratch and dent’ models than the undamaged models and items?” (App. at 114; accord App. at 689.) He concludes that “the answer is equally obvious. We all learn early on that consumers will automatically discount most if not all items and merchandise that is either damaged in some way or is ‘perceived’ to be damaged in some way.” (App. at 114; accord App. at 689.) All of which may be true. But “it is impossible to test a hypothesis generated by a subjective methodology because the only person capable of testing or falsifying the hypothesis is the creator of the methodology.” In re TMI Litig., 193 F.3d at 703 n.144.

Above all, it is the speculative and subjective nature of this testimony that severs the necessary relationship to “methods which have been established to be reliable.” In re Paoli, 35 F.3d at 742 n.8. Shearer blends his observations on consumer habits in the appliance market with far-flung examples of environmental accidents involving nuclear power and oil transportation. But the two principles—that consumers prefer undented appliances and property values declined near the Three Mile Island catastrophe—meet only by assumption. And it isn’t clear whether the theory rests on analogy to buying preferences generally, or in the real estate market specifically. Nor is it clear that Shearer’s conclusions that property value decreased near Three Mile Island and the Valdez spill trace to consumer perception rather than actual, irremediable harm, because Shearer presented no quantifiable data to explain or clarify his assumptions. But in any case, there is no data supporting the application of Shearer’s theory to the Landowners’ properties.

Slip op. at 16-18. 

The court noted the expert testified that this theory is "common sense reasonable." Slip op. at 18. Yeah, pipelines blow up. Does anyone want them on or near their land? But we can't simply assume that, and need studies and stuff. Much of the merits and amicus briefing (including our amicus brief) focused on the question of how stigma damages are proven. But the court did not address that issue, instead disposing of the case on foundational issues, concluding that the expert's testimony was neither "reliable," nor "fit" (whatever that means). Slip op. at 18-19 & n.5.  

The court acknowledged a split with at least one other court of appeals on the issue of whether Daubert's requirements are "relaxed" for bench trials. See slip op. at 14-15 & n.4. But the court ultimately concluded that the district court abused its discretion in even considering the testimony, even though it (and not a jury) was the ultimate trier of the facts. 

We're going to crack our evidence manual before we reach any final conclusion about whether the court was right or wrong on the issue. But something about this one just doesn't feel right, does it? 

UGI Sunbury LLC v. 1.75 Acres, No. 18-3126 (3d Cir. Feb. 11, 2020) 

Tuesday Feb 11, 2020: Professors' Corner - The Supreme Shift in Takings Litigation - Knick v. Township of Scott

Please mark your calendars and join us next Tuesday, February 11, 2020 at 12:30pm ET for the free (for members of the ABA's Real Property, Trust and Estate Section) webinar, the monthly "Professors' Corner."

This one will be on the aftermath of Knick v. Township of Scott, 139 S. Ct. 2162 (2019), in which the Supreme Court formally overruled the "state procedures" ripeness requirement in federal regulatory takings cases. 

We shall be speaking about the case and what's next along with Professors Stewart Sterk and Michael Pollack (moderated by Professor Shelby D. Green). Here's the summary of the webinar from the ABA website:

Last term, in Knick v. Township of Scott, the Supreme Court overruled the long-standing requirement that state takings claims first be litigated in state courts. The Court held that a property owner has an actionable takings claim when the government takes property without paying for it and a property owner may proceed directly to federal court, even if there are avenues for redress under state law. The panelists will offer insight on these and other weighty issues.

Register here (free). See you next Tuesday! 

CA11: Owner May Provide Opinion Of Value, Including Severance Damages

As we briefly mentioned in the "National Eminent Domain Update" at the recent ALI-CLE Eminent Domain and Land Valuation Litigation Conference in Nashville, the U.S. Court of Appeals for the Eleventh Circuit in Sabal Trail Transmission, LLC v. 3.921 Acres, No.18-11836 (Jan. 22, 2020), recently held that it isn't an abuse of discretion for a trial court to allow a property owner to testify about value if she meets the standards in Federal Rule of Evidence 701.

Two interesting aspects to this case:

1.    The owner's opinion of value was higher than the owner's appraiser's opinion of value. 

2. The owner testified about severance damages. 

The district court allowed the testimony because the property owner had direct experience with the property and sales of other parcels the company owned, even though she lacked experience with the particular use for which this parcel was taken (a natural gas pipeline). As the court of appeals held: 

Sunderman testified that the pipeline had reduced the value of the parcel. When she was asked to opine about how the pipeline had reduced the value, Sabal Trail objected, arguing that the question called for speculation. The court allowed her to answer. Sunderman testified that the pipeline had thwarted her plan to subdivide the parcel into three lots. She explained that if she subdivided the property as planned, the pipeline would run diagonally across the two 10 acre lots. With the pipeline’s presence, she opined, these two lots would be “definitely undesirable” for rural residential development and could be used only for agriculture. Doc. 130 at 100. As agricultural land, she testified, each lot was worth $35,000 or $3,500 per acre, meaning the two lots had decreased in value by more than 80%.

She testified the pipeline reduced the value of the third planned lot as well. If she subdivided the property as planned, the pipeline would run across only a small corner of this lot. She opined that it would have been possible to sell this lot for residential development. But given the presence of the pipeline, the land would have to be sold at a reduced price because a buyer would be willing to pay only $70,000 for the lot, meaning that the lot was worth approximately $10,769 per upland acre and its value had decreased by approximately 35% due to the pipeline.

Slip op. at 9-10 (footnote omitted). The Eleventh Circuit concluded:

Although she had no prior experience selling property encumbered by a pipeline, her opinions about what purchasers were looking for were drawn from her experience selling 25 similar lots for rural residential development. Based on her interactions with prospective purchasers, she understood that a purchaser who was buying a rural residential lot wanted to enjoy nature, have privacy, and be free from restrictions governing what she could do with her land. She applied this experience to opine that if she proceeded with the plan to subdivide the parcel into three lots, two of the lots would be unmarketable for residential development. She explained that a purchaser looking to build a house in a rural area would not buy either lot given that the pipeline cut diagonally across each lot, the permanent easement restricted how the landowner could use the area covered by the permanent easement, and Sabal Trail retained the right to enter each lot to access the pipeline. Because Sunderman’s opinion was based on her personal experience and knowledge, we conclude that the district court did not abuse its discretion in allowing her to testify.

Slip op. at 15-16. 

Check it out. 

We filed an amicus brief in the case (on the attorneys' fees question), an issue the court did not address, concluding instead it was premature and the court lacked appellate jurisdiction (the pipeline appealed after the district court ruled that the owner was entitled to attorneys' fees, but before the district court actually awarded a specific amount of attorneys' fees). 

Sabal Trail Transmission, LLC v. 3.921 Acres, No. 18-11836 (11th Cir. Jan. 22, 2020) 

Cases From This Morning's "Eminent Domain Update" At The 37th Annual ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Nashville

Here are the links to the cases we discussed this morning at the "Eminent Domain Update" session:

• It isn't an abuse of discretion for a trial court to let the property owner testify about value (including severance damages) if she meets the standards in Federal Rule of Evidence 701 (she has experience with the property and sales), even if she had no experience with the particular use for which the property was taken (in this case, a natural gas pipeline) Sabal Trail Transmission, LLC v. 3.921 Acres of Land, No. 18-11836 (11th Cir. Jan. 22, 2020). 
• Colorado Supreme Court: a lot of present private benefit is meaningless if the condemnor promises future public benefits. Carousel Farms Metro. Dist. v. Woodcrest Homes, 44 P.3d 802 (Colo. App. 2017). A cert petition has been filed. (Disclosure: we filed an amicus brief in support of the petition.)
• Kelo International: Supreme Court of the Republic of the Philippines goes beyond "aliens might have done it" judicial review in blight redevelopment takings. City of Manila v. Roces Prieto, No. 221366 (Phil. Aug. 29, 2019).
• What A Difference The Defendant Makes: The Federal Courts Finally Locate A Natural Gas Act Preliminary Injunction They Don't Like. In re PennEast Pipeline Co., LLC, No. 19-1191 (3d Cir. Sep. 10, 2019) 
• Owner Objects To Being Offered *More* Compensation: DOT's Offer Invalid Because It Included Severance Damages The Appraisal Omitted. Christus Lutheran Church of Appleton v. Wisconsin DOT, No. 2018AP11124 (Wis. App. Nov. 26, 2019). 
• Maryland On Relocation And Present Participles: Tenant's Departure After City Told It To Get Out Was "Voluntary." Wireless One, Inc. v. Mayor and City Council of Baltimore, No. 18-71 (Md. App. Aug. 23, 2019), 

If you are here with us in Nashville, please stop by and say hi. If you aren't here, you can catch up with the video recordings once ALI-CLE makes them available, or you should plan on joining us in-person in [location] in 2021 (we shall announce the venue for the 2021 Conference tomorrow).

Virginia Supreme Court Asks: Must A Parcel Be Completely Cut Off For Loss Of Access To Be A Taking?

The Virginia Supreme Court is set to consider a case that asks whether less than a total loss of access to a parcel is a taking, and is the government's mere invocation of a "police power" rationale to cut off access is enough to insulate it from the payment of compensation. 

When Hooked proposed to develop its property, the City of Chesapeake closed Callison Drive, the street adjacent to Hooked's property after the neighbors complained. This cut off Hooked's direct access to Callison Drive, even though it still had access from its property from another street.

The trial court dismissed (demurred) Hooked's inverse condemnation claim, concluding that the City was exercising its police power when it closed the street, and thus there was no taking as a matter of law. Hooked argued that Virginia property owners have a property right for direct access to adjacent roads, especially after the Virginia amended its constitution in 2012 to reflect that owners have the right to compensation for "lost access."

We contributed to an amici brief supporting Hooked's appeal, arguing that the mere invocation of "police power" does not solve the case:

The assertion that the City extinguished Hooked’s access to the street for safety reasons using its police power is not even relevant in a takings inquiry. Indeed, the Takings Clause imposes a condition on the lawful exercise of police powers with a requirement to pay just compensation where government goes too far in abrogating common law property rights. Thus, to state a valid claim for inverse condemnation, the property owner must first concede the validity of the government action (government actions that do not further some public purpose are ultra vires and void, and cannot result in a requirement to provide compensation). Thus, if the City had not extinguished Hooked’s access for a public purpose, Hooked would not have an inverse condemnation claim with a compensation remedy, but rather one for a due process violation with injunctive or declaratory relief.

Br. at 8 (footnotes omitted).

Here are the other briefs in the appeal:

• Hooked's Opening Brief
• City of Chesapeake's Appellee Brief
• Hooked's Reply Brief
• Amici Brief (Local Gov't Attorneys of Virginia, Virginia Municipal League, Virginia Ass's of Counties)
• Amici Curiae Brief (Owners' Counsel of America, NFIB Small Business Legal Center, Virginia Property Rights Coalition)

The court has not yet set arguments, but we shall follow along and update when it does. 

More here, from the Right of Way Law blog.

Brief Amici Curiae of Owners' Counsel of America, NFIB, and the Virginia Property Rights Coalition, Hooked... 

Record Attendance (But There's Still Time For You Last-Minute Filers) At Nashville ALI-CLE Eminent Domain Conference

Picture 1: how normal people see pie.

Picture 2: how you see pie if you're coming to the
ALI-CLE Eminent Domain Conference. 

If you get the above, you probably are already set to join us next week for the 37th Annual ALI-CLE Eminent Domain and Land Valuation Litigation Conference in Nashville. (If not, shame on you!).

And having just reviewed the latest registration list, I can report that we have an all-time record attendance.  But there's still room for those of you still not committed. Register here. Don't miss out. There will be pie. 

New Cert Petition: It's Not Enough For A Condemnor To Invoke A "Classic" Public Use

Here's the latest in a case (and issue) we've been following. 

In Puntenney v. Iowa Utilities Board, 928 N.W.2d 829 (Iowa 2019), the Iowa Supreme Court answered a question that has been making its way around: what "public" does the "public use" requirement cover? For the Iowa Constitution, for example, does a taking have to be of direct benefit to the people of Iowa?

The court there addressed the issue by not answering the the question directly, but by concluding that the Iowa public is indirectly served by the taking of private property for a pipeline, even though there are no "onramps" or "offramps" for the oil in Iowa. The taking would have the other, usual, butterfly effect Iowa benefits: some jobs, cheaper gas, and the like. Kentucky and West Virginia courts have reached the opposite conclusion (the taking must directly serve the people of the state), but Ohio and Illinois go the other way. 

The property owners have filed a cert petition, which asks the U.S. Supreme Court to address these Questions Presented:

Does a state’s exercise of eminent domain satisfy the “public use” requirement of the Fifth Amendment’s Takings Clause if the only benefits experienced within that state are incidental?

Can a state satisfy the “public use” requirement of the Fifth Amendment’s Takings Clause merely by labeling the taking with a traditional category of public use, without engaging in the “public purpose” analysis outlined by Kelo v. City of New London, 545 U.S. 469 (2005)?

The petition points out the lower courts' disarray about when a taking violates the Public Use requirement, especially after Kelo. 

The Iowa Utilities Board did not file an opposition, but the pipeline recently did, arguing that the lower court split is about "pretext," and this isn't a pretext case. While the latter assertion is true (the property owners are not claiming that the stated reason for the taking is one thing, but the real reason for the taking is something else), the lower courts' inability to settle on any consistent public use standards involves more than just the rules for pretext (see this recent brief for examples), but also includes questions about direct vs indirect benefits, and as we note above, what "public" is served by the taking (a question that is really a "denominator" problem - how can you measure whether a taking has only incidental public benefits if you don't know which public you are looking at?). And, is it enough to overcome overwhelming private benefit as long as there is a smidgen of incidental public benefits, however "public" is defined? 

In the end, the Iowa Supreme Court fell back on the idea that this was really a common carrier taking and thus just fine, because this is a "classic" public use. For several lower courts, the mere invocation of a classic public use isn't enough (others, it is), and they read Kelo (esp the concurring opinion) to require a more in-depth review of the public and private benefits before reaching a conclusion on the constitutionality of a taking. 

Will this case be the one to strike lightning on that issue? We shall see.   

Petition for Writ of Certiorari, Puntenney v. Iowa Utilities Board, No. 19-447 (Sep. 30, 2019)

(Nearly) Last Chance To Join Us In Nashville For ALI-CLE's Eminent Domain Conference

You can also fly, drive, or bike to the upcoming 37th Annual ALI-CLE Eminent Domain & Land Valuation Litigation Conference. in Nashville. Limited space still available, so don't delay further and register now. We're on track to record attendance, so you don't want to miss the best nationally-focused three-day program on our area of law.

Takings, Knick, compensation, appraisals ... and a bit of fun thrown in. We have many new attendees, and many new speakers, too.  

Biggest Case Of The Year...Or Maybe The Decade?

We're seeing a lot of "end of year" and "end of decade" wrap-ups, so figured we'd better chime in.

As the above graphic hints (this is detail of the doors of the U.S. Supreme Court), our biggest case of 2019 (and probably of the twenty-aughts) is Knick v. Township of Scott, 139 S. Ct. 2162 (2019). The federal courthouse doors are open again to federal takings claims. 

Yes, the U.S. Supreme Court doors were technically already open (via cert petitions from state supreme court takings cases), and Knick simply re-set the clock back to 1985, but if the two-thousand double-ohs were the decade of Kelo (a loss), will not the 2010's be defined by Knick (a big win) even if the ruling came at the tail end of the decade?  

Compare where we are today with where in 2016 we thought we were heading (see this starting at page 905 for example). 

Besides, Knick gave us a lot of memes. 

Space Still Available For ALI-CLE Eminent Domain Conference, Nashville Jan 23-25, 2020

If you get this, you need to attend the 37th Annual ALI-CLE Eminent Domain & Land Valuation Litigation Conference, January 23-25, 2020, in Nashville.

And if you don't get this, you need to attend more. 

Register here. 

New Cert Petition From The Knick Team: You Can Sue A State For A Taking In Federal Court

Here's the cert petition, filed today (by the same folks who brought you Knick v. Township of Scott, 139 S. Ct. 393 (1922)), which poses this straightforward question:

Whether the “self-executing” Just Compensation Clause abrogates a State’s Eleventh Amendment immunity, allowing a property owner to sue the State for a taking of property.

Now before you pooh-pooh the notion that you can sue a State for retrospective money damages in federal court despite the Eleventh Amendment, take a read. This is a topic which we've been furiously researching since Knick (more on that down the road a bit), and the issue is not as clearly on the side of "no you can't" as you might think. 

As we noted in this short post a couple of months ago, the Fifth Circuit's opinion in Bay Point Properties, Inc. v. Mississippi Trans. Comm'n, 937 F.3d 454 (5th Cir. 2019) made short work of the argument, holding that a property owner who asserted that it was not fully compensated in state court inverse condemnation case, could not then sue the state DOT in federal court for the difference. (If this case sounds somewhat familiar to you, it does to us also. We were counsel for the property owner on the earlier denied cert petition which the opinion and cert petition mention. 

A footnote in the Fifth Circuit's opinion presaged this cert petition, effectively booting the case upstairs to SCOTUS. And here we are now.  

So check it out and follow along. We will be.

Petition for Writ of Certiorari, Bay Point Properties, Inc. v. Mississippi Trans. Comm'n, No. __ (Dec. 19,... 

NC Supreme Court Considers Just Compensation For Formerly Indefinite--But Now Temporary--"Map Act" Takings

This time last week, we were sitting in the North Carolina Supreme Court's (very beautiful) courtroom, above, having just observed oral arguments in a case we've been following for quite a while, Chappell v. NCDOT, No. 51PA19 (docket here). 

This case is the follow up (after remand) of the N.C. Supreme Court's landmark decision in Kirby v. North Carolina Dep't of Transportation, No 56PA14-2 (June 10, 2016), in which the court held that the "Map Act," a statute by which DOT designated vast swaths of property for future highway acquisition, was a taking because the Act prohibited development and use of designated properties in the interim. The court concluded "[t]hese restraints, coupled with their indefinite nature, constitute a taking of plaintiffs’ elemental property rights by eminent domain." The court remanded the case for a parcel-by-parcel determination of just compensation. On remand, the trial court concluded the Chappell case was a permanent taking, and awarded compensation accordingly. DOT appealed, and here we are. 

The biggest theoretical gap we witnessed in the arguments was that each of the parties seemed to have a different conception of exactly what "property" has been taken, and thus is being valued. On one hand, DOT argued that the Map Act's restrictions were like a negative easement, severely restricting the use of the property, but not totally wiping out all uses. Thus, DOT argued, the taking could not be valued as a "permanent" taking (and by "permanent," we think they meant taking of the fee, even though they never expressly argued that). The property owners, by contrast, argued that the court in Kirby held these takings were "indefinite" and therefore "permanent," because a decades-long restriction on economically beneficial uses is the equivalent of a permanent take. 

A couple of thoughts. First, one thing we didn't hear argued in detail was the effect of the subsequent repeal of the Map Act. Immediately following the Kirby decision, the N.C. legislature repealed the statute, which in our view transformed the formerly "indefinite" takings into temporary takings, albeit very long-term takings. The advocates didn't focus on this question, and we heard only a couple of questions from the otherwise hot bench. To us, this is a critical issue, since in our view, the government always retains the authority to repeal a statute or regulation, and thus put an end date on a formerly indefinite taking. And as we all know, the U.S. Supreme Court held in First English Evangelical Lutheran Church v. Los Angeles County, 482 U.S. 304 (1987) that temporary takings are takings, and the owner is entitled to just compensation for the time which a statute or regulation "clouded" use. Here, that seems like a very long time for DOT to have, in effect, rented the property from the Chappells. But if that's how comp plays out, that's how it plays out.

Second, we're not sure if the record shows that DOT preserved its main argument by an offer of proof of the uses supposedly remaining under the Map Act "negative easement." If not, that seems like one way for the court to rule in favor of the property owners and affirm, without dealing with the temporary vs indefinite nature of the taking. If the owners are satisfied with being compensated for the fee taking in this proceeding and not seeking the rent-plus-interest, who are we to say otherwise, provided the court does not establish a (wrong) rule that these type of cases generally are valued as permanent fee takes. 

One last thing before we go (and await the court's opinion). If you are in the neighborhood of the N.C. Supreme Court, you should drop in and pay a visit, even if there isn't a case on the docket that is in your alley. It's a historical building (surrounded by other similarly historical buildings), and the courtroom itself is impressive. Very impressive. 

HAWSCT: When Agency Includes Conditions In Phase 1 Land Use Permit, But Later Removes The Conditions In Phase 2 Permit, Party Who Asked For Conditions Is Entitled To Notification

Here's the latest opinion about land use from the Hawaii Supreme Court. Unite Here! Local 5 v. Dep't of Planning & Permitting, No. SCAP-17-823 (Haw. Dec. 13, 2019).  Because our Damon Key partner Greg Kugle was the prevailing lawyer in the case, we won't go into detail about the opinion, but leave it to you to delve into it.

It is about procedural due process and the opportunity to object in the administrative appeals process, permit conditions, and the like. Land users, check it out. 

Unite Here! Local 5 v. Dep't of Planning & Permitting, No. SCAP-17-0000823 (Haw. Dec. 13, 2019) 

Amicus Brief: Legislature's "Gut-And-Replace" Procedure Violates Hawaii Constitution's Three Readings Requirement

This one is not in the usual subject area of this blog, but we figured we're allowed to stray off course a bit every now and then.

Here's the motion we filed today, asking the Hawaii appellate courts to let us file an amicus brief in a case in which the League of Women Voters and Common Cause Hawaii is challenging the Legislature's process of "gut-and-replace" whereby a bill that has progressed through one or both houses is gutted at the last minute, and the substance of the bill is wholesale replaced. This, the lawsuit alleged, violates the requirement in the Hawaii Constitution (article III, § 15) that a bill be read three times in each house. 

Here, the State claims that because the title of the bill remained the same "A Bill for an Act Relating to Public Safety," it didn't matter that the actual subject of the bill changed (from being a bill about recidivism reporting in criminal cases, to being about hurricane readiness and State buildings. Both topics are related, the State argued, to the unchanged title ("public safety") and a court can't do more than ask if the bill in its various iterations can conceivably related to the title. 

Our brief argues that in two decisions, the Hawaii Supreme Court set out the standards for judicial review of these sort of questions:

The present dispute is based on two competing, but equally true, propositions. First, there is no question this bill—if form alone measures its constitutional validity—was adopted after three readings: a bill was introduced, subject to a public reading three times, and was then adopted. The title never changed. Equally plain, however, is that the actual subject of the bill—the substance of what the legislature put out to the public for consideration—radically changed between introduction and adoption (the practice isn’t so much gut-and-replace, but more like bait-and-switch). The issue presented is whether the legislature alone possesses the power to decide if the form and title of the bill are alone determinative, or whether the people—acting through our courts—have any say in whether the substance of the bill matters at all.

At first blush, this question might seem to be one of separation of powers, asking whether the judiciary must defer to the legislature’s internal procedures. That is certainly the position staked out by the State, and its amicus. However, in Schwab v. Ariyoshi, 58 Haw. 25, 564 P.2d 135 (1977) and Taomae v. Lingle, 108 Haw. 245, 118 P.3d 1188 (2005), the Supreme Court struck a more appropriate balance between the branches of government (and the people) by concluding that the legislature does not have unfettered control, even on matters involving its own procedures. We the People have the final word, as expressed in the Hawaii Constitution. And when a dispute arises about what the Constitution requires, the courts have an essential role.

While a court will not lightly intrude on the legislature’s prerogative to establish its own internal working rules (and consequently, challengers are subject to a high burden of proof), the plain words and meaning of the Constitution govern, and the courts have a central part in ensuring the Constitution’s substantive requirements are followed. Thus, if a bill is amended so that the original and the amendment are “dissimilar and discordant” with no “legitimate connection with or relation to each other,” the Constitution requires that the public readings process be restarted. If it is not, a reviewing court must invalidate the adopted act. The circuit court concluded otherwise, however, and applied a “rational basis” test that required deference to the legislature if recidivism and hurricane preparedness could be conceivably related to “public safety.” The court’s error was in comparing each version of the bill to the title, when it should have compared the substance of each version of the bill. In short, under Schwab and Taomae, appropriate deference to the legislature does not require the courts take a hands-off approach and examine only the title of the bill and ask if it is conceivably related to the substance of the bill in any of its iterations.  

Stay tuned if this sort of thing interests you. Now back to your regular programming. 

Motion of Grassroot Institute of Hawaii for Leave to File Brief Amicus Curiae, League of Women Voters v.

Takings Maven Prof Epstein Weighs In On Latest SCOTUS Judicial Takings Case: Owners Had A "Legitimate Claim Of Entitlement" To Rent Decontrol

Here's the latest on the judicial takings/rent control case which we've been following. 

This is the case where New York property owners assert that the N.Y. Court of Appeals' decision which concluded that the luxury apartments (which were never formerly subject to rent control) are now governed by the Rent Stabilization Law. This, the petition argues, allows tenants (who hardly need the protections of rent control) to renew less-than-market rent in perpetuity. 

Some heavy hitters have weighed in on the side of the Petitioner, including takings maven Richard Epstein, who filed this amicus brief:

But another way of thinking about this case is to focus less on Petitioner’s property right in the physical building and more on its interest in the public benefits conferred under the RPTL and RSL—namely, Section 421-g benefits and luxury decontrol. New York law recognizes a “vested” property right in a public benefit (typically a building permit or a nonconforming use) whenever the government has promised that benefit and the property owner has incurred substantial detriment in reliance on that promise. Even where these conditions are not satisfied, a property right in a government benefit may still arise under New York law here a party has a "legitimate claim of entitlement" to that benefit.

The facts of this case clearly establish that Petitioner acquired a property interest in the luxury decontrol benefit available under the RSL.

Br. at 4-5.

If that quoted language sounds familiar, it is. That's from the "new property" due process case, Board of Regents v. Roth,  408 U.S. 564 (1972), which held that for purposes of procedural due process, affirmative government acts can create a property right that a person cannot be deprived of without notice and a hearing. In other words, if the government engenders reliance, that's property. Here, the owners argue that for decades before the Court of Appeals' ruling, "It was settled as a matter of New York law and practice ... that Section 421-g property was eligible for luxury decontrol[.]" Pet. at 35.

The Supreme Court has said the same thing about reliance and property in the takings context in Kaiser Aetna v. United States, 444 U.S. 164 (1979):

While the consent of individual officials representing the United States cannot "estop" the United States, see Montana v. Kennedy, 366 U.S. 308, 314-315 (1961); INS v. Hibi, 414 U.S. 5 (1973), it can lead to the fruition of a number of expectancies embodied in the concept of "property" -- expectancies that, if sufficiently important, the Government must condemn and pay for before it takes over the management of the landowner's property. In this case, we hold that the "right to exclude," so universally held to be a fundamental element of  the property right, falls within this category of interests that the Government cannot take without compensation.

444 U.S. at 177-80.

Here are the other briefs (the BIO, another amicus, and the petitioner's Reply):

• Brief in Opposition**
• Amicus Brief in Support of Petitioner (Real Estate Board of New York)
• Petitioner's Reply to Brief in Opposition
• (Here's the cert petition, also.)

**We have one comment on the BIO. It's main argument is that the case isn't a good one for the Supreme Court because -- get this -- the property owner didn't raise the judicial takings claim below. While we're usually down with arguments about preserving arguments on appeal, how exactly does one "preserve" a judicial takings claim? Short answer: you don't need to, because you are claiming the appellate decision below is the taking. For an example of how this works in this context, see PruneYard Shopping Center v. Robins, 447 U.S. 74 (1980), a case we focused on in this article. 

Now that the briefing is done, we're looking forward to the result of the Court's conference. Stay tuned, or follow along on the Court's e-docket.  

Brief of Professor Richard A. Epstein as Amicus Curiae in Support of Petitioner, 50 Murray Street Acquisiti... 

New SCOTUS Amici Brief: Invoking A "Classic" Public Use Isn't Enough When The Circumstances Reveal "A Private Purpose May Be Afoot"

Here's the amicus brief we filed yesterday in a public use case we've been following that asks whether pretext and private benefit are irrelevant as long as the condemnor invokes a "classic" public use. In this case, the Colorado Supreme Court overturned the court of appeals' conclusion that even though the purported purpose of the taking was to provide future possible public infrastructure, the overwhelming private benefit today meant the taking was not for public use. 

Here's the cert petition. 

Southeastern Legal Foundation, Cato Institute, Owners' Counsel, and NFIB Small Business Legal Center joined in the brief, which argues that the unusual circumstances (an obviously self-interested condemnor) lead to a reasonable suspicion that "a private purpose is afoot" (as Kelo put it), and thus the usual presumption of conceivable basis review is not warranted, and indeed, the courts should look at these type of takings with a particularly skeptical eye. 

Here's the Summary of Argument:

In Kelo v. City of New London, 545 U.S. 469 (2005), this Court recognized that an exercise of eminent domain “under the mere pretext of a public purpose, when its actual purpose [is] to bestow a private benefit,” is unconstitutional. Id. at 478. But the Court did not address the question directly, because “[s]uch a one-to-one transfer of property, executed outside the confines of an integrated development plan, is not presented in this case. While such an unusual exercise of government power would certainly raise a suspicion that a private purpose was afoot, the hypothetical cases posited by petitioners can be confronted if and when they arise.” Id. at 487 (footnotes omitted).

This is that case. It offers the Court an opportunity to clarify that the Public Use Clause is not mere hortatory fluff, and affirm that the Fifth Amendment limits eminent domain. The Court should grant review.

Br. at 2-3 (footnote omitted).

Stay tuned. The Respondent has asked the Court for more time to file a BIO, so we expect one shall be filed. We'll keep following along, or you can do so on the Court's e-docket. 

Brief of Amici Curiae Southeastern Legal Foundation, Cato Institute, OCA, and NFIB, Woodcrest Homes Inc. v.... 

What's At 712 4th Street, S.W., Washington DC? Your Invite To The 2020 ALI-CLE Eminent Domain Conference (Jan 23-25, Nashville)

We Join IJ's "Short Circuit" Podcast To Talk Virginia Oyster Takings, Colorado Wild Eminent Domain Abuse Cert Petition, And Berman International

Yesterday, our friends and colleagues at the Institute for Justice (Diana Simpson and Bob McNamara) welcomed us to their studios to record an episode of the "Short Circuit" podcast.

We talked property, takings, Virginia oysters, the cert petition about Colorado eminent domain abuse, and how the Supreme Court of the Republic of the Philippines would handle cases like Berman v. Parker and Hawaii Housing Authority v. Midkiff. 

Listen in, and subscribe to the podcast (we don't miss an ep). 

And yes, we really did write up yesterday's blog post from the Supreme Court steps. Proof:

Shades Of Preseault In Big SCOTUS Superfund Arguments

We are noted for our ability to find takings and property issues nearly anywhere, and two cases argued today at the Supreme Court -- where we had the pole position in the Bar line as the above photo proves -- are no exception, even though the first was a case about a tax refund, and the second was about the Superfund statute. 

The tax case was a bit of a stretch, we admit. But there was a brief colloquy about how a taxpayer has property rights to any refund. When we heard that, we sure perked up. There was more to glom onto in the second case on CERCLA (Superfund) where the issue is whether the federal statute allows property owners whose land is contaminated to sue the contaminator under state tort and property law to clean it up. 

As we understand the issues, Atlantic Richfield is such a contaminator, and is or has remediated certain sites in Montana under an EPA-approved Superfund plan. Private property owners sued separately under Montana law for trespass and nuisance, seeking damages (which, under Montana law, must be used to remediate the property). While the Court didn't seem too interested in any federal preemption question, many of the Justices actively questioned the three advocates about whether CERCLA leaves any room for state property and tort law to protect private property owners. 

And here's where we get to our takings gem of the day: Justice Gorsuch (who was followed up with a question from Justice Sotomayor), asked whether depriving property owners of their right to recovery under Montana law might be a taking. (We are paraphrasing, of course, but that was the drift of his question.) Although the advocate didn't answer directly -- indeed, as we see it, he didn't answer this question at all -- this perked our ears up, because we think it was getting to the point of whether this case presents one like Preseault v United States where the Court upheld the Rails-to-Trails Act against a Commerce Clause challenge, but also noted that preventing the operation of a state property law easement reversion might be a taking. As we takings nerds know, that has proven very true. 

As we saw today's thread, maybe Justice Gorsuch was getting at the idea that yes, the EPA's remediation plan can be both a "floor and ceiling" (as many Justices characterized CERCLA), setting both minimum requirements for compliance, and prohibiting state action above-and-beyond. And thus, private property owners may be prohibited from exercising their state law remedies fully, and they cannot through a state court judgment require a polluter to do more than the EPA requires. But if that's the case, maybe the EPA is on the hook for compensation for taking state law claims and remedies. 

Check it out. The transcript will be available soon. Pacific Legal Foundation's Jon Wood was also in the courtroom, and we're sure he'll have a more informed view of the environmental law aspects of the case. Stay tuned. 

Videos: Oyster Takings On The Nansemond River

Following up on the petition, filed last Friday, asking the Virginia Supreme Court to review a trial court's demurrer which failed to recognize that the owners of a state lease to harvest oysters in the Nansemond River have a property interest . The court concluded that the city and santitation district possess a superior right to pollute the river with sewage.

The case arose when the city and sanitation district declared the oysterbeds "condemned" during certain times of the year because they put sewage into the river. They denied compensation, and the trial court held that Darling v. City of Newport News, 249 U.S. 540 (1919) subjected the lease owners to the city's superior right to pollute.

We paid a visit to the site a couple of weeks ago to see the pollution source, and how the oysters are harvested in the river. The above video is from that trip. The below is from WAVY 10's report on the case.

Latest In SCOTUS Penn Central Cert Petition

Here's the latest in a case we've been following for a while, Smyth v. Conservation Comm'n of Falmouth, No. 19-223 (cert. petition filed Aug. 16, 2019). 

The petition seeks review of a Massachusetts decision which held that a judge, not a jury, determines Penn Central takings questions, and also that the owner lost anyhow because, you know, Penn Central. The petition asks the Supreme Court to review these Questions Presented:

1. Whether the loss of all developmental use of property and a 91.5% decline in its value is a sufficient “economic impact” to support a regulatory takings claim under Penn Central.
2. Whether a person who acquires land in a developed area, prior to regulation, has a legitimate “expectation” of building and, if so, whether that interest can be defeated by a lack of investment in construction?
3. Whether the Court should excise the “character” factor from Penn Central regulatory taking analysis.

We filed an amicus brief in support of the petition, arguing that for a regulatory takings "polestar" (the Supreme Court's words, not ours), Penn Central isn't doing a very good job of ensuring that trial courts decide takings cases. Other amici weighed in also:

• Mountain States Legal Foundation, Cato Institute
• Center for Constitutional Jurisprudence

The Commission responded with a Brief in Opposition, and Ms. Smyth filed a Reply Brief. Which means now we wait. The Court is scheduled to consider the case in its November 22, 2019 conference. Which means we should know soon thereafter whether the petition is granted or denied, or the case is "relisted." 

Stay tuned, as always. 

Law 608's [Continuing] Playlist: More Takings And Related Road Trip Music

You may recall that last October, we attended the first round of Supreme Court oral arguments in the Knick case with our William and Mary law class (Law 608: Eminent Domain and Property Rights).  

And even though there's not a takings case on the Court's current docket, we figured that the Maui Clean Water Act case was close enough. So we road-tripped it from Williamsburg to DC last Wednesday. And to make sure the six-plus hour round trip was not filled with awkward silence, like last year we asked each attendee to supply at least two songs for our playlist: one song a good "driving" song; the other a song that could be somehow connected to either our class topic (property rights, eminent domain, land use, and similar), or the day's Clean Water Act and environmental issues. Well done, class, for being creative. 

Here's what we came up with:

Have You Ever Seen The Rain (Creedence Clearwater Revival) - Clean Water Act, Creedence CLEARWATER Revival. You get it ("shining down like water.."). Both a good road song and related to the day's enterprise. 

Property Line - Marshall Tucker Band. A song about property that also is a good road tune. It's like the protagonist in the eminent domain film "The Castle," - the singer owner really loves his land and nothing could ever really compensate him for it: "Well my idea of a good time / is walkin' my property line / and knowin' the mud on my boots is mine."

New Shoes - Paulo Nutini. Road song with a beat that makes it hard to keep your foot off the gas pedal. 

This House is Not For Sale - Bon Jovi. "These four walls have a got a story to tell / The door is off the hinges, there's no wish in the well / Outside the sky is coal black and the streets are on fire / The picture windows cracked and there's no where to run I know, I know / This house is not for sale." Takings.  

 

Poor Man's Shangri-La - Ry Cooder. A track from his Chavez Ravine album, so this is one where you don't have to imply a connection to eminent domain and property rights, because the songwriter has already done it for you. About why owners may love their land and their property, even though it isn't upmarket. Blight, redevelopment, and the like. 

 

Take it Easy - Jackson Browne - A classic road song. ("I'm running down the road trying to loosen my load..."). Yeah, you may hate the Eagles, but this is the original version, to take it easy, man. 

 

Pink Houses - John Mellencamp. Both a good road song, and the track that lent its title to the book and move about Kelo.

 

Drive My Car - The Beatles. Road tripping and day tripping. Driver's note: we were heartened when one of our students mentioned that she likes The Beatles, and that one of their CD's is permanently in her car, for two reasons: first, much of the music selection this day was on the younger side to my ears and we're glad that John, Paul, George, and Ringo still resonate with the younger set (OK BOOMER).; and second, because it is on CD (we thought everyone has gone streaming (OK BOOMER). Bravo. 

 

Bow Down - Xavier Rudd. "I sit here now 2010 government still stealing land / Making lame excuses for their greed while that / oil spills into the sea..." Property rights, environmental awareness. Classic protest song from an Aussie singer-songwriter. 

 

Brand New City - Mitski. Pretty sure this is on that made the list because the lyrics might be related to takings: "Honey, what'd you take, what'd you take? / Honey, look at me / Tell me what you took, what'd you take?"

 

You Never Give Me Your Money - another from the Fab Four. Just Compensation related: "You never give me your money / You only give me your funny paper / And in the middle of negotiations / You break down..." The lament of many property owners who get lowballed on comp. 

 

Good Vibrations - Beach Boys. A classic song for the open road. But as any fan of "The Castle" knows, vibes mean something too.

 

This Life - Vampire Weekend. Pretty sure this is a pure "road" song. 

 

The Wicker Man - Iron Maiden. Great song to keep you going at 3am on I-95 Northbound. 

 

Once in a Lifetime  - Talking Heads. The most Clean Water Act song of the day, especially about a case involving groundwater: "Letting the days go by, let the water hold me down / Letting the days go by, water flowing underground / Into the blue again after the money's gone / Once in a lifetime, water flowing underground..."

Regulatory Takings Lawyers: Why You Should Pay Attention To The DACA Case

Yesterday's Supreme Court arguments in what is known as the "DACA case" would normally not be something we'd cover on this blog. Yeah, the issue of whether the executive branch has the power to unwind (or, as the cert petition puts it to "wind down") a prior administration's executive actions is interesting and all that, but it's just not in our usual AO (Area of Operations). 

But after reviewing the transcript, we think that those of you who are interested in regulatory takings might find it worth skimming. The reason is that the plaintiffs' case is for the most part built on their reliance on the DACA program and nonenforcement of immigration statutes. We conformed our behavior to the existing rules in reliance on those rules remaining in place, and therefore a subsequent executive administration can't revoke those rules, is how we see the argument. For example, Justice Gorsuch framed the issue as "the reliance interests that have grown up around DACA." Tr. at 19.  And uberlawyer Ted Olson argued: 

MR. OLSON: --there -- as I said, it's a combination of factors which include the government inviting people to rely upon and make decisions based upon that policy, the provision of benefits connected with it, individuals making choices, and --a nd then - -and the Heckler case -

Tr. at 53. Dreamers are "invited to participate into a program, to reveal the business that they're in, to come forward, to take advantage -- of benefits..." Tr. at 54. 

Takings lawyers are familiar with the concept of reliance. Especially reliance on government regulation, or even government inaction. As the Court noted in Kaiser Aetna v. United States, 444 U.S. 164 (1979), government action doesn't result in "estoppel," but might create a property interest:

While the consent of individual officials representing the United States cannot "estop" the United States, see Montana v. Kennedy, 366 U.S. 308, 314-315 (1961); INS v. Hibi, 414 U.S. 5 (1973), it can lead to the fruition of a number of expectancies embodied in the concept of "property" -- expectancies that, if sufficiently important, the Government must condemn and pay for before it takes over the management of the landowner's property. In this case, we hold that the "right to exclude," so universally held to be a fundamental element of  the property right, falls within this category of interests that the Government cannot take without compensation.

444 U.S. at 177-80.

But we also know that the courts conclude that this is a very limited set of circumstances, and that in most cases, reliance on government regulations (even when you are invited to participate into a program, such as taxicab medallions) do not give you the ability to compel the government to maintain that regulation or to enforce those regulations against others. In Penn Central's terms, you have no reasonable investment-backed expectations of being subject to, or free from, such regulations. (And yes, we know that Penn Central spoke only of "distinct" and not "reasonable" investment-backed expectations). Some courts see it as as an issue of defining the property interest. In short, most courts have concluded that someone who claims a property or reliance interest in the continuation of a government regulation -- even one adopted by a legislature and not the executive -- are, in the Chief Justice's words, chumps. 

If the Court goes with the plaintiffs in the DACA case (and we defer to our betters on whether that might come to pass) we at least hope that the same rationale supporting reliance interests that motivate such a ruling would apply equally to property owners who, in our view, have at least as great of an interest at stake in takings cases. 

Transcript, Dep't of Homeland Sec. v. Regents of the Univ. of Cal., No. 18-587 (U.S. Nov. 12, 2019) 

Oral Argument In Michigan "Keep The Change" Takings Case

Here's the OA video (courtesy of the Michigan Supreme Court) from last week's arguments in what we're calling the "keep the change" case. 

That's the one where the government is arguing that after a property owner was late paying $8.00 in property taxes, the government is not only entitled to foreclose on the property, but to keep the difference between the sales price and the taxes and penalties owed. As our Louisiana friends might say, that's a bit more than lagniappe. 

Eight bucks is more like a rounding error than a significant underpayment, but we get that you do owe every cent. And that when you don't pay on time, they can hit you up for the taxes owed, the interest, and penalties. But as Gilbert & Sullivan wrote in their famous treatise on Remedies, "let the punishment fit the crime." They can't just pocket the difference, no? Pacific Legal Foundation argues that's a taking under the Michigan and U.S. Constitutions.

We watched the OA live, and it is worth your time. Check out the briefing here. 

Two things to watch for:

• Starting at the 15:20 mark, Christina Martin (the owner's attorney) is wrapping her opening argument. A justice asks for the name of a particular case, which Ms. Martin cannot recall. So she responds, "I can't remember the name off the top of my head, but I will have it for you during my rebuttal. With your permission, I'd like to reserve the remainder of my time." To which Chief Justice McCormack replied, "Well done. I've never seen anyone do that that well. Reserving of the time. Your argument was great too." Smooth transitions are every advocate's goal.  
• The County's argument kept employing what we thought was a curious analogy. To illustrate the point that the property owner was provided opportunities to pay the $8 deficiency (and thus the government didn't "take" the property, as much as the owner "gave" it), the lawyer talked about how if his child doesn't pick up his toys after a number of warnings, he simply seizes them. We find this a poor analogy, as Ms. Martin noted: "the government is not our parent; its purpose is actually to protect our rights, not to police how clean we keep our room." 

We shall await the decision of the court and bring it to you when issued. 

Hawaii Pretext Case At Center In New IJ Cert Petition: Actual Reason For Taking Trumps Stated Reason

Here's the cert petition in a case we've been following since it was decided in the property owner's favor by the Colorado Court of Appeals.

In Carousel Farms Metro. Dist. v. Woodcrest Homes, Inc., 444 P.3d 802 (Colo. App. 2017), the court invalidated an attempt to exercise eminent domain to take property which the owner had refused to sell to developer Carousel Farms. Carousel Farms needed the parcel because without it, Carousel Farms' agreement with the local municipality to allow the development (known as -- you guessed it -- Carousel Farms), could not go forward. In response to the owners' refusal to sell, Carousel Farms formed an entity which under Colorado law has the power of eminent domain, named -- get this -- the Carousel Farms Metropolitan District. (Protip: if you are forming an entity with the power of eminent domain in order to take property for private benefit but don't want anyone to figure out your plans, it is probably a good idea to not label the condemning entity with the very same name as the privately benefited party; you know, that might just somehow give people the wrongheaded idea that the taking is primarily for private benefit.)

Although the Carousel Farms Metropolitan District couldn't point to a present public use or benefit from the taking, it asserted that in the future the public would benefit from the condemnation because if Carousel Farms were allowed to develop its property in accordance with its agreement with the town, the public would receive new infrastructure such as roads and sewers. The trial court upheld the taking, but the court of appeals reversed. The real purpose of the taking was to facilitate the developer's compliance with its agreement with the town, and speculative future benefits are not enough to overcome the true purpose of the taking. 

Unfortunately, the court of appeals' ruling didn't hold up on appeal to the Supreme Court of Colorado. That court held that possible future benefits were enough, and it didn't matter what evidence of private benefit was in the record: "Here, the taking is essentially for public benefit. Parcel C will be used for public right of ways, storm drainage, and sewer improvements." 

Not only did that contravene the idea of public purpose, it seemed to even violate Kelo. We also thought this was a blank check for any private beneficiary with a competent staff to avoid pretextual takings claims by asserting a taking could be supported by possible future public benefits, even if there was no way to guarantee or even predict whether these benefits would ever materialize. To us, this was the rational basis test at nearly its most farcical (sorry, the "it might have been aliens" test still occupies the bottom rung). 

We also thought that this case reminded us a whole lot of the one that we did in Hawaii back in the day. So imagine the smile on our face as we read the Institute for Justice's cert petition asking the U.S. Supreme Court to review the Colorado decision, and noted that it focuses on our Hawaii case:

In any of the courts that consider pretextual public purposes, this case would have been decided differently. For instance, in contrast with the decision below, the Hawaii Supreme Court has held that “although our courts afford substantial deference to the government’s asserted public purpose for a taking in condemnation proceeding[s], where there is evidence that the asserted purpose is pretextual, courts should consider a landowner’s defense of pretext.” C & J Coupe, 198 P.3d at 620.

In that case, the County of Hawaii condemned land and transferred it to a private developer, so it could build a road to its to-be-constructed development. The property owner argued that the taking did not have a public purpose because the road at issue was only being built to advance the private interests of the developer.

The Hawaii Supreme Court took the case to address the issue of pretext, noting that Kelo “allows Courts to look behind an eminent domain plaintiff ’s asserted public purpose under certain circumstances.” Id. at 638. The majority held that “although the government’s stated public purpose is subject to prima facie acceptance, it need not be taken at face value where there is evidence that the stated purpose might be pretextual,” id. at 644, and ultimately remanded the case to the circuit court for consideration of that issue.

The disagreement between C & J Coupe’s majority and dissent neatly illustrates the judicial conflict on the issue of pretext. To wit, the dissent argued that all takings should be afforded rational-basis deference, “which includes deference to the government’s statement of public purpose.” Id. at 654 (Moon, C.J., dissenting); see also id. at 656 (“In analyzing whether the taking is for a valid public purpose, courts give great deference to the government’s determination of public purpose” unless “the party challenging the taking makes a ‘clear showing’ that the government’s stated public purpose is ‘irrational,’ with ‘only incidental or pretextual public benefits.’ ”) (citations omitted). It further proclaimed that “whenever property is taken for a highway, it is for the public use, notwithstanding that the highway may greatly benefit a private party.” Id. at 658 (emphasis and quotation marks omitted) (citing Rodgers, 781 A.2d at 1034). “[T]he power of eminent domain is merely the means to the end * * * . Once the object[, i.e., the public purpose,] is within the authority of [the government], the means by which it will be attained is also for [the government] to determine.” Id. at 656 (citing Midkiff, 467 U.S. at 240) (internal quotation marks omitted, bracketed changes in original).

The dissenting opinion in Hawaii would have been the majority in New York or Iowa or New Hampshire—and now, in light of the decision in this case, in Colorado as well. Indeed, the ruling below represents the logical conclusion against which the Hawaii Supreme Court warned in C & J Coupe. Colorado now can delegate its eminent domain power to an unsupervised private party, while Hawaii cannot. Iowa can, while Georgia cannot.

Pet. at 16-18 (footnote omitted).   

Do we think this case is one the Justices should review? You bet. Are we going to be following along? Same. 

Petition for a Writ of Certiorari, Woodcrest Homes, Inc. v. Carousel Farms Metro. Dist., No. ___ (U.S. Nov.... 

Hot Take On The Maui Clean Water Act Arguments (Protip: ARRIVE EARLY)

Protip for the public line for SCOTUS arguments: you have to get there really early. As in really early. Before 5 am early. Because that's the time that we, along with some of our William and Mary Law students (pictured above, after the arguments), arrived at 1 First Street NE to take up our place in line yesterday for the arguments in the Maui Clean Water Act case. And we were -- literally -- the very last allowed in for the full arguments. We roadtripped it from Williamsburg (more on that in a future post), meaning that we awoke long before 5am, leaving the law school at an ungodly hour. It would have been a shame to have taken all that effort, only to not get in. So heads-up line standers: get there early.

Why all this effort, you may ask? After all, you can read the transcript the same day, or listen to the recording at the end of the week. Why bother being there in person? To us, there's nothing like witnessing it firsthand to catch some of the nuances. And the spectacle of U.S. Supreme Court arguments. The protests, the media scrum, the big-time lawyering. It is especially critical for soon-to-be-lawyers to see great advocates (all three who argued were, in our opinion, excellent), and observe the very jurists whose opinions they have been reading and analyzing during law school live and in-person (especially in this age of Celebrity Justices). I sure wish I had the chance to do this during my law education. Williamsburg is just within reasonable striking range of DC, so we figured we should make the effort. This is the second time we've done this (Knick was the first), and we're convinced the effort is worth it. 

As for impressions of the substance of the arguments, we think its going to be a very close one. Even though it is not bold to predict a split Court in nearly any Supreme Court case, we think this one merits it. It all turns on the language of the Clean Water Act, and what does the term "from" mean. Really. The advocates proposed various analogies about what the term means, using whiskey flasks, punchbowls, groceries. And there were all sorts of probable and improbable hypotheticals from the bench.  

In the end, the conclusion we reached is that the statute isn't all that clear one way or the other about what it means in the situation presented here: is the pollutant in the Pacific Ocean "from" the County of Maui's treated effluent injection well even though it was transported from the well to the ocean by groundwater? Several Justices pretty clearly thought yes, while others thought no. Reasonable minds apparently can differ. Which to us means that this case may be resolved more on policy grounds than by classic statutory interpretation (if there is even such a thing).

Thus, some of the Justices were looking for middle ground (see Justice Breyer's suggestion of a new "functional equivalent" test), while others (the Chief Justice, and Justices Gorsuch and Kavanaugh) probing about "limiting principles" on the Respondent's argument that any after-the-fact traceability from a point source to a jurisdictional water was enough to trigger CWA liability. That's a tough hill to die on, given the nearly unfettered liability that is triggered, so we're thinking the inability to articulate a viable limitation on liability may push several Justices to reject the argument. With several Justices appearing to have their minds set (Kagan, Sotomayor, Alito, and (presumably) Thomas), we think Justice Kavanaugh is going to be the fulcrum on this one. 

Finally, what's interesting about this case is the ongoing state court dispute about whether it has been settled. Most of the time, courts are not made aware of ongoing settlement efforts. Here, however, the Court was told about the settlement (a letter that, interestingly, no longer appears on the docket). A Justice might reasonably think to themselves: how strong is the Respondent's argument if it is so desperate to settle, especially at this stage of the game? 

So although the case was submitted yesterday, this one isn't over. It might be settled. It might not. The Court may rule by June, or it might not. 

Transcript, County of Maui v. Hawaii Wildlife Fund, No. 18-260 (U.S. Nov. 6, 2019) 

Road Trip SCOTUS: Maui Clean Water Act Oral Arguments (11/6/2019)

We're on the road early tomorrow for another visit to SCOTUS with our William and Mary Law School class. We hope to get in for the arguments in the Maui Clean Water Act case. Last year, we attended the first Knick arguments in October, and we wanted to repeat the experience for this year's students.

Yeah, we know that technically, the CWA case does not involve property or takings. But come on, it's all we've got on the docket right now, and the case is very important to property owners who -- if Earthjustice's arguments are accepted by the Court -- will only know if they are liable under the Clean Water Act for not getting a permit after they don't get a permit. As we see it, the linkage test the respondent has advanced means that if a connection between a no-permit point source of pollution and waters of the United States in fact exists, the property owner should get a CWA permit. In other words, if you don't get a permit, you are always at risk of liability. The only way to be sure is to either apply for a CWA permit, or undertake hydro testing. Either is very likely expensive. 

We'll have more after the arguments conclude.  

And what's the deal with CCR? The round trip from the law school is a long one. So everyone's contributing to the playlist (like we did last year). At least one classic "road" song, and another that can somehow be related (be creative!) to the day's arguments. So any song by Creedence Clearwater Revival qualifies. 

Register Now! ALI-CLE Eminent Domain And Land Valuation Litigation Conference (Nashville, Jan 23-25, 2020)

Registration underway, so come join us! Agenda full of hot topics in takings and appraisal law! The best national faculty! Renew friendships, and make new colleagues! And Nashville! 

Download the brochure and make your plans for January. (Don't wait, we've sold out the past three years.)

New (Judicial Takings!) Cert Petition: NY Court Took Property When It Disallowed Deregulation Of Luxury Rent Controlled Apartments

Here's a two-fer that covers very difficult and unsettled subjects in takings law: judicial takings and rent control. 

In this cert petition, New York property owners assert that the New York Court of Appeals (the state's highest court for those of you who do not watch Law & Order (dun-dun)), took private property when the court held that the petitioner's apartments are governed by the Rent Stabilization Law.

That holding subjected luxury apartments that were never formerly governed by rent control to the tenant's power to renew less-than-market rent in perpetuity. The petition asserts that before the Court of Appeals' ruling, "It was settled as a matter of New York law and practice ... that Section 421-g property was eligible for luxury decontrol[.]" Pet. at 35.

Here are the Questions Presented:

In Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, 560 U.S. 702 (2010), the Court granted certiorari to settle a question that had divided lower courts: Can a judicial decision constitute a taking under the Fifth and Fourteenth Amendments? The eight-justice Court that decided Stop the Beach was unable to resolve the question. A four-justice plurality concluded that the Takings Clause applies equally to the judicial branch as to the legislative and executive branches. But the remaining justices declined to resolve the issue. Far from clarifying the law, the Court’s fractured decision has only exacerbated the confusion in the lower courts. Some courts now follow the Stop the Beach plurality opinion and recognize judicial-takings claims. Others deny that judicial-takings claims are cognizable. This case presents an opportunity to resolve the question left open in Stop the Beach.

The questions presented are:

1. Whether the Fifth and Fourteenth Amendments prohibit courts, like other branches of government, from eliminating established property rights without just compensation.

2. Whether the New York Court of Appeals effected an unconstitutional taking by holding, contrary to decades of settled law and practice, that properties receiving benefits under Section 421-g of the New York Real Property Tax Law are ineligible for deregulation under New York’s rent-stabilization laws.

Follow along on the Court's docket here.

Petition for a Writ of Certiorari, 50 Murray Street Acquisiton LLC v. Kuzmitch, No. 19-554 (Oct. 30, 2019) 

Citizens Sue Maui Mayor (Finally) To Force Him To Settle SCOTUS Clean Water Act Case - But Is It Too Late To Scuttle The Arguments?

Here's the other shoe that we've been waiting to drop.

Recall that in our last post on the pending Clean Water Act case (SCOTUS oral arguments scheduled for November 6, 2019 - yeah, as in one week from tomorrow), we suspected that a declaratory judgment action would be filed in a Hawaii state court to resolve the internal dispute between the various branches of the Maui County government about which branch(es)'s approval is needed to settle the case. On one side, the Mayor claims that the settlement of the CWA case needs his approval (which he isn't giving). The Corporation Counsel's analysis backs his argument up. On the other side, the County Council -- which, by a one-member margin voted to settle the case because the CWA plaintiff's lawyers are terrified of what the Supreme Court might do with the case -- who assert that they alone have the power to settle. Their argument is backed up by their legislative counsel.  

Well, someone finally got it together and filed this complaint in the Second Circuit Court (Maui County), asserting the Mayor's check-off isn't needed to settle, and for good measure seeking to bar the Corporation Counsel from representing the County in the Supreme Court case. The timing, however, is problematic (what took them so long?) because the outcome of this case only is of consequence if it somehow prevents the U.S. Supreme Court from deciding the CWA issues. And the oral arguments are a mere week from now. 

Several points of interest.

First, the plaintiffs. No, the plaintiffs are not the County Council itself or its members, but an environmental group (surprise, surprise), and several individual Maui residents, all who claim interests in the outcome of the legal question of who gets to settle the case. If this were federal court with its Article III case and controversy standing requirements, we'd bet the court might have a difficult time finding standing. But this is a Hawaii court applying Hawaii law, and anyone who might be able to allege even "butterfly effect" linkage to the desired outcome has a very good argument for standing. 

Second, is the Council itself, or the council members, or both, necessary or "indispensable" parties who can and therefore should be joined before the court resolves the case. Sure looks like it to us, at least if you apply the Hawaii Supreme Court's logic in a case we were involved in, Kellberg v. Yuen, 135 Haw. 236, 349 P.3d 343 (2015). There, the court held that if an absent party might have an interest that could be "impaired" by the court's judgment, then the court needs to determine whether the party can be joined. Here, you'd think that in a case asking the court to declare what the council's collective and official rights and duties are, that the council or its members need to be present. And there's little doubt that the council and members can be joined -- they're all in the circuit and amenable to service. So very likely, the analysis stops there and the plaintiff must try to join them. (Of course, if they can't be joined, then the court will also need to do an "indispensable" analysis and resolve whether the plaintiffs' claims can be determined in the absence of the necessary parties.) But on the whole, it looks to us like the right parties need to be in court before the court can do anything on the merits. 

And that brings us to our third point, the really critical question: what does all of this mean for the looming SCOTUS oral arguments? So far, despite a flurry of back-and-forth correspondence from the Maui factions, the Court has kept the OA on schedule for next week and has been silent. Will the Justices care about the internal Maui kerfuffle? Will the Supreme Court hold up while they work it out? Will the Hawaii courts be able to act in time? Can the Maui court join the necessary parties in time to even reach the merits?

We're not certain, but we're going to be following along for sure. 

Complaint, McKelvey v. Victorino, No. -- (Haw. 2d Cir. Oct 28, 2019) 

State's Amicus Response: Two-Year Statute Of Limitations In State Law Takings Claims Because Inverse Condemnation Isn't The Same As Eminent Domain

Here's the State of Hawaii's response to an amicus brief we filed in a case that asks the Hawaii Supreme Court to resolve the question of what statute of limitations governs takings claims under the state constitution. We argued that constitutional claims such as these might not be subject to legislatively-imposed statutes of limitations, and that if they can then the majority rule in most state courts is that the adverse possession statute of limitations applies. 

The State argues that a takings claim is a breach of contract claim (as some states conclude), and thus a two-year statute of limitations applies. The property owner in this case argues that it is a six-year limitations period under Hawaii's "catch-all" civil claims statute. 

So, how does your jurisdiction do it?

Defendants-Appellees' [State of Hawaii] Response to Brief Amicus Curiae of Owners' Counsel of America 

Update On SCOTUS Property And Takings Cases

Now that the season is underway at 1 First Street NE, we thought we'd update you on some of the cases we've been following. 

Short story: no new grants in cases of interest.

• Stahl York Ave. Co., LLC v. City of New York, No. 18-1429 (cert. denied Oct. 7, 2019) - a good issue and one that is not going away: if an agency action is alleged to have take property, is the record limited to the record developed in the agency? 
• Guerin v. Fowler, No. 18-1545 (cert denied Oct 15, 2019) - a case we've been following closely, dealing with the nature of the takings remedy, and Eleventh Amendment immunity. You are not asking for money damages if all you want is an injunction ordering the State to stop keeping your money. 
• Katzin v. United States, No. 19-258 (cert. denied Oct. 21, 2019) - another case we've been following. The decision below, the 2-1 Federal Circuit (with Judge Newman filing a compelling dissent), held that it was not a taking by the USA when it claimed ownership of the plaintiff's property. 

But we're not all done yet with pending takings petitions. Smyth v. Conservation Comm'n of Falmouth, No. 19-223 (we filed an amicus brief in that one) is still there, with the government's BIO just filed. Penn Central is the issue in that one. 

And Cranston Police Retirees Action Committee v. City of Cranston, No. 19-286 is just getting underway. The Question Presented involves municipal pensions and whether there's a Contract Clause or Takings Clause violation when the city suspended the retirees' vested retirement benefits. 

Stay tuned, folks.

Who Is In Charge At The County Of Maui? SCOTUS OA Hinges On Internal Dispute Over Who Can Settle

We've been following the ongoing efforts to settle the Clean Water Act case involving the County of Maui with some amusement. 

Why, you ask? Part of it is that we like municipal law. (Perhaps sad, but true.) But we're amused mostly because the case's current posture illustrates the dual principles of "be careful what you ask for," and the legal corollary of one of Murphy's Rule of Combat ("No plan ever survives first contact"): that you may be able to start a lawsuit on your own terms, but you may not always be able to end it the same way. 

The plan here seemed pretty good. Sue the County for violating the CWA for its injection wells, asserting it should have obtained a CWA permit. Yes, the line between a "point source" and a "nonpoint source" was not settled law, but the case seemed like a very good bet. The plaintiffs would very likely find a receptive audience in both the U.S. District Court for the District of Hawaii and in the U.S. Court of Appeals for the Ninth Circuit. And when the lawsuit was instituted in 2012, the Supreme Court was not overly likely to take up the issue. Thus, the risk of making bad nationwide law (from the plaintiffs' standpoint) was low.  

At first, everything went according to plan. The plaintiffs sued the County of Maui, a Hawaii municipal corporation. The Hawaii federal court granted the plaintiff summary judgment. The Ninth Circuit, as expected, affirmed. But between the judgment in the district court, and the Ninth Circuit's ruling in 2018, the composition of the Supreme Court changed. You know why. Thus, when the County petitioned the Court late last year to hear the case, the Court agreed. Which didn't bode well for the until-now successful plaintiffs. The fortunes of war looked to be changing. 

With the looming prospect of the new Court possibly creating unfavorable nationwide precedent, the plaintiffs began a desperate effort to settle the case. That's when the current troubles arose. The defendant/Petitioner is the County of Maui, a municipal corporation organized under Hawaii law. But who, exactly, gets to decide whether the County of Maui can settle? 

The County Council thought "the County" means the Council, and thus the Council has the authority to settle the case. After a day-long hearing, the council (by a one member margin) approved of settling with the plaintiffs. The settlement was pretty much a roll-over by the County in which the plaintiffs get what they want. Not only that, but the Supreme Court thwarted! Game over, man, game over!.

Not so fast, wrote the Mayor, "the County" includes me, and I have to approve of any settlement; because I think the legal issue needs to be clarified, I won't approve. Game on! 

Meanwhile, back at 1 First Street, N.E., an impressive number of amici weighed in, (including some heavy appellate hitters and the federal government, which was granted face time) and the Supreme Court scheduled oral arguments for November 6, 2019. 

The plaintiffs wrote the Supreme Court, giving the Justices a heads-up that there was a brewing dispute over just who was the Petitioner, and that the case may or may not have been settled. The private counsel for the Petitioner County responded, asserting "I am Counsel of Record for the County of Maui," and "[t]his case has not settled," because "the Mayor must agree to settle the case and withdraw the County's petition. At this time, the Mayor has not agreed to do so."

Not content to sit on the sidelines, the Chair of the Maui County Counsel on her own wrote to the Court, "to confirm that on September 20, 2019, the Maui County Council settled the case by adopting Resolution 19-158 authorizing settlement and the withdrawal of the case from the U.S. Supreme Court." The letter described the dispute within the halls of the County building of whether the Council possesses the authority to settle the case on its own, or whether it needs to run it past the Mayor. The letter asked the Court to either dismiss the petition, "or, at the very least, postpone the hearing until Maui County can resolve our Charter crisis by determination of the Council's authority in court within the State of Hawaii or otherwise."

One more letter followed. The County's outside appellate counsel responded that the Council Chair isn't the lawyer for the County of Maui, "I am Counsel of Record for the County of Maui in this case," and that the County's corporation counsel "has asked me to submit the attached letter in response to [the Chair's] letter[.]" The "attached letter" refers to a letter which the Corporation Counsel sent to the Court the same day of the Council Chair's letter, offering "my sincerest apologies for the [Chair's letter]. The Corporation Counsel asserted she is the chief legal officer for the County, and as the lawyer for the County, she asserts "the County of Maui is not requesting a delay or dismissal in this matter," and that "[a]ny alleged conflict involving the County Charter is a matter than may be addressed independently." (emphasis original).  

So who is right? Who speaks for "the County?" Is it the Council alone which has authority to settle lawsuits for the County, or is the Mayor also a part of the process?  

We have been down this path before under Hawaii's law governing municipal governments. Although that case was in a much different context, it presented the same issue: who speaks for "the County?" County of Kauai ex rel. Nakazawa v. Baptiste, 115 Haw. 15, 165 P.3d 916 (2005), was a case about the definition of "the counties" as used in the Hawaii Constitution's article which delegates the counties the power to levy and collect property taxes. The Hawaii Supreme Court held that the term "the counties" did not include the people of a county exercising their home rule powers to adopt Charter amendments via direct democracy. The long and the short of the case is that 3 of 5 Justices concluded that the term "county" means "county council" (the 2 dissenters objected on procedural grounds, and would have never reached the substantive question). 

Baptiste, however, does not solve the present question of who gets to decide for Maui whether to settle, because Baptiste is about the allocation of power within the counties when it comes to property taxes, and how the term "county" is defined by the state constitution. The present case is more about how the Maui County Charter internally allocates the County's home rule authority to make litigation decisions. But still, Baptiste is at least a touchpoint in analysis under Hawaii municipal law.   

And that takes us to our final document of this post, an opinion letter issued in September by the Corporation Counsel. The memo concludes that it is a mixed question under the Maui Charter, and depending on the circumstances, the council has exclusive authority to settle certain cases, the mayor has exclusive authority to settle others, and both the Mayor and the Council must agree in other cases:

DOES THE COUNCIL HAVE THE AUTHORITY TO SETTLE A LAWSUIT ON BEHALF OF THE COUNTY:

A) YES, when the consideration for settlement involves the commitment of county funds in excess of $7,500, or an exercise of municipal authority exclusively vested in the council by the charter.

B) NO, when the consideration for settlement does not exceed $7,500, or where settlement involves the exercise of municipal authority exclusively vested in the executive branch by charter.

C) NO, when the consideration for settlement requires both an exercise of municipal authority vested exclusively by charter in the council and the executive branch, UNLESS the council and the executive branch concur.

Memo. at 7 (emphases original). The memo relied on a Hawaii Supreme Court case resolving a similar dispute between Honolulu's mayor and the city council, which recognized the principle of separation of powers within Hawaii municipal governments, which mandates that each coordinate branch of county government be limited to its charter-specified power.      

Any guess which circumstance is presented by the council-only-approved settlement here? Apparently, the Mayor and Corporation Counsel believe that it is the last one, "C" (where both branches are required), because the settlement would allocate way more than $7,500 in County money (so the council has a role in getting the money), and the executive branch of the County government -- the Mayor -- also must execute other parts of the settlement by directing County employees to accomplish certain actions. If that is indeed what the final terms of the settlement requires, and how the Maui Charter divides up the County's power, then the Mayor and Corporation Counsel may have a good point. 

But for Supreme Court watchers and environmental law mavens, the real question posed by all of this wrangling is whether the scheduled oral arguments on November 6 will go on, or be postponed while the County sorts out who can do what, and who represents it under Hawaii law (we're guessing there's at least one lawyer in Hawaii who is working this weekend on a state-court declaratory judgment complaint). On that, we defer to the uberlawyers who regularly practice in the Supreme Court, and their guesses about what the Justices might do. 

We'll be following closely. We had planned on taking a field trip to the Court in November with our class, just like we did for the Knick arguments. But until the Court gives us an indication whether the OA is a go or no-go, like you, we remain in limbo. 

Memorandum, Council's Authority to Settle a County Lawsuit (Sep. 16, 2019) 

Amicus Brief: Federal Circuit Assumes Plaintiffs Understand SCOTUS' Regulatory Takings Doctrine Better Than SCOTUS Understands Regulatory Takings Doctrine

We're in California, where we're playing Lincoln Lawyer for a few days because in its infinite wisdom, the utility company has preemptively shut off power for one week due to the threat of wildfire inverse condemnation lawsuits. We're actually playing Chevy Tahoe Lawyer, because we're literally working out of a truck since that's the only place with power, and we can at least drive to where there's a (weak) connection to the developed world. 

But court deadlines don't wait for California's absurdities, so we do what we need to do.

And that includes filing this amicus brief in a case we've been following, Campbell v. United States. That's the case in which a Federal Circuit panel held that the Tucker Act's six-year statute of limitations in takings claims against the United States starts to run upon the taking, and "the taking may occur before the effect of the regulatory action is felt and the actual damage to the property interest is entirely determinable."

Read that again if you didn't get that: the clock starts ticking even before the plaintiff may even know they've been injured. The plaintiffs, whose claims were dismissed for filing the complaint a few days after the expiration of the statute of limitations, have sought panel and en banc rehearing, and we filed a brief on behalf of the Center for Auto Safety urging the court to grant rehearing.

Our brief argues that the panel's approach can't be right, because it missed the critical second part of statute of limitations analysis: when did the plaintiff know (or should have known) they were injured? In short, the panel imputed better knowledge of the Supreme Court's horribly "storied but cryptic" regulatory takings doctrine to the plaintiffs than the Supreme Court admits it possesses (these are "ad hoc factual inquiries" for which there is no set formula). 

Check it out. Meanwhile, we'll continue to live life on permanent airplane mode until California turns the lights back on. 

Brief Amicus Curiae of Center for Auto Safety, Campbell v United States, No. 18-2015 (Fed. Cir. Oct. 10, 20...