inversecondemnation.com

Va App: It Doesn't Take Much To Allege Public Use In Inverse Condemnation

On the surface, the Virginia Court of Appeals' opinion in Town of Iron Gate v. Simpson, No. 1588-23-3 (Sep. 17, 2024) deals with a straightforward issue in a straightforward way: the property owner's inverse complaint adequately alleged that the Town's flooding of her property was for a public use, and thus properly survived the Town's demurrer.

As the Virginia Supreme Court has held, one of the elements of pleading a legally-adequate inverse condemnation complaint for flooding is an allegation that the flooding was for some public use. The court of appeals rejected the Town's argument that Simpson failed to allege public use, holding that the complaint's allegation that the Town "used her 'property as a 'makeshift storage site for excess stormwater,' which was accomoplished for the public use of maintaining and operating the Town's stormwater system[,]'" was certainly good enough:

She alleged that the Town “purposefully uses, operates, and maintains a stormwater system in a manner that directs storm water onto [her] property” and “purposefully declined to resolve the issues or to discontinue use of the [p]ipe, and has continued to intermittently direct stormwater through the [p]ipe for the public use of stormwater drainage, despite being fully-informed that the action will result in flooding to [her] property.” She alleged that the pipe was “part of the Town’s stormwater control system,” which was used to “direct, transport, and control the flow of stormwater,” that the Town had “full knowledge of the issues with the [p]ipe” dating back to 2011 when it “fitted a ‘boot’ on the pipe . . . to prevent leakage, but the repair was ineffective,” that the prior owner “informed the Town repeatedly of the problem,” that the Town “purposefully declined to resolve the issues or to discontinue use of the [p]ipe,” and that the Town admitted the problem “should have been dealt with a long time ago,” yet continued to use the pipe.

Slip op. at 10. Seems pretty obvious to us, too.

But we urge you to read the entire opinion (it isn't that long, a mere 18 pages) to get an understanding of how the Town acted here. If you are like us, you will come away from it thinking "what gives?" The picture the opinion paints isn't a good one: the government appeared to be obstreperous, and intent on making the conduct of the litigation hell for the property owner, despite the just compensation here being only $37,586. A significant amount for sure, but not worth going to war over.

Yet to us, that it what is appears the Town did. It claimed the trial judge was biased. Its questioning of the owner's appraiser was riddled with inappropriate questions based on facts not in evidence (that the Town tried to mitigation). The Town seemed to blame the owner for the problem by trying to create a narrative that the owner didn't give the Town time to fix the issue; the Town claimed to be ever-so-ready to fix it, but didn't do so and apparently never has. Read the opinion for more.

As a result, the Town got whacked for $206,785 in fees and costs, more than five times the amount of compensation. Forest and trees, anyone?

Congratulations to friend and colleague Joshua Baker for the win.

Town of Iron Gate v. Simpson, No. 1588-23-3 (Va. Ct. App. Sep. 17, 2024)

Blight Slight: No Taking Of Property For "The Proposed Project" When No Project Has Been Proposed

You all have likely seen 'em, those "We Buy Houses Any Condition" billboards letting the world know that no matter what condition it might be in, there's an outfit that says it is willing to buy your house.

Well, that outfit ran into the one other outfit that is willing to buy your house, except here, that outfit can force you to sell it. That's right, the government. In this case, the City of Ontario, California, exercising its power of eminent domain. (As someone once famously described the power of eminent domain: "whether you know it or not, your house is for sale.")

The city went through the usual motions to forcibly take "multiple vacant lots" next to the Ontario International(!) Airport which it claimed were blighted:

In 2021, the City held a public hearing, after which the city council adopted a resolution of necessity authorizing the City to commence eminent domain proceedings to acquire the properties. The resolution of necessity stated: “The public uses for which the real property interest is to be acquired are mitigation of airport impacts and elimination of blight in the City of Ontario, San Bernardino County, California. Sections 37350.5 and 50470 of the California Government Code authorizes [sic] the City to acquire by eminent domain real property necessary for such purposes.” The council found that “[t]he public interest and necessity require the proposed project” and “[t]he proposed project is planned or located in the manner that will be most compatible with the greatest public good and least private injury.” However, the resolution did not describe any proposed project.

The trial court agreed with the property owner, who argued that in addition to the resolution requiring a statement that the taking is for a public use, must also identify a proposed project supporting the condemnation.

In City of Ontario v. We Buy Houses Any Condition, LLC, No. D083080 (July 19, 2024), the California Court of Appeal affirmed. The court concluded that California's eminent domain statute is a "comprehensive statutory scheme to define the substantive and procedural parameters of eminent domain." Slip op. at 5. And you gotta follow the rules. One of those rules is that the condemnor may take the property, but "only if all of the following are established" --

• the "public interest and necessity" require the project
• the project is designed in such a way "that will be most compatible with the greatest public good and the least private injury:
• the property sought to be acquired is "necessary for the project"

Cal. Code Civ. P. § 1240.030.

Relying on the reasoning set out in one of our favorite California eminent domain cases, the appeal court held that the statute not only requires a statement of public use and necessity, but some reference to a project. Failing that you lose, condemnor:

Thus, a “governing entity [must] identify a ‘project’ with a public purpose before it undertakes to condemn private property.” (Marina Towers, supra, 171 Cal.App.4th at p. 107.) “[A] resolution of necessity that does not identify a project with sufficient specificity, such that persons of ordinary intelligence can discern what the ‘project’ is, cannot support the taking of private property.”

Slip op. at 5-6.

The city's resolution here did not meet that standard, and was thus a "gross abuse of discretion." Slip op. at 6.

The court rejected the city's argument that under California's Community Development Law, the condemnor doesn't need to show no stinkin' project (hat tip to Gideon Kanner), only that the properties were blighted under Cal. Health & Safety Code § 33073, which it claimed was a "safe harbor" from the usual three requirements. 

No, held the court. "As we shall explain, neither the language of Marina Towers nor what remains of the CRL authorized the City to condemn the properties without identifying a proposed project." Slip op. at 7.

We won't go into the details, but here are the salient points. Remember that back in the day, the California Supreme Court acknowledged that the legislature gutted the formerly powerful redevelopment law (the gutting wasn't because the lege was disgusted by the way that redevelopment was being accomplished, but rather so the state could grab the money the redevelopment agencies had accumulated). The court rejected the city's claim that section 33073's provision that government may "seek the acquisition of the properties by eminent domain for the elimination of blight" exempts the city from Civil Procedure section 1240.030's requirements. Nothing in the redevelopment law "suggests it creates an exception to the eminent domain law's requirement of an adequate project description." Slip op. at 10.

Finally, the court rejected the city's argument that taking properties to minimize noise and safety hazards under separate statutes means that the takings here didn't need to identify the project. Not so: "Neither of these provisions purports to excuse a local agency from following the eminent domain law’s requirement to identify a project." Slip op. at 14.

To make it worse for the city, the court affirmed the trial court's award of attorney fees to the property owner, not limited to the fees incurred in the owner's motion for summary judgment, but for all of the trial court litigation. Start at page 15 of the slip opinion for the reasons.

The opinion is not published. But should be.

City of Ontario v. We Buy Houses Any Condition, LLC, No. D083080 (Cal. Ct. App. July 19, 2024)

Statutory Fee Recovery In Minnesota Condemnations Not Limited By Contingency Fee Agreement

This is a short one, and the title of this post pretty much sums up the Minnesota Supreme Court's opinion in State of Minnesota v. Schaffer, No. A23-0036 (June 20, 2024).

The case addressed a frequently-occurring issue in jurisdictions which permit some kind of fee recovery in eminent domain cases. Where a statute permits a property owner to recover "reasonable" attorney fees, how is the recovery calculated? By the usual "lodestar" formula (reasonable time x reasonable fee), or is it limited by the actual contractual arrangement between the property owner and her lawyer (in this case a contingency fee that resulted in a fee less than a lodestar-determined fee). 

The court held rejected MDOT's argument fee recovery under the statute "cannot exceed the amount owed to the landowner's attorney in a contingency fee agreement[.]" Slip op. at 2. The court held:

We reiterate what we held in Cameron: the phrase “reasonable attorney fees” in section 117.031(a) refers to attorney fees calculated by the lodestar method, and thus we hold an award of reasonable attorney fees is not capped by a contingent fee agreement.

Slip op. at 3.

"Reasonable" means objectively reasonable, and not whatever the owner worked out with his or her lawyer, and is not limited to reimbursement of fees actually incurred or obligated to pay. The fee actually agreed to may be one of the factors a court may consider, but "it is to be just one factor." Slip op. at 7.

State of Minnesota v. Schaffer, No. A23-0036 (Minn. June 20, 2024)

Canadian Court Resolves A Very Un-Canadian Expropriation Beef

Here's one we've been meaning to post for a while, the Ontario (Canada) Land Tribunal's opinion in 13538 Ontario Inc. v. City of Stratford, No. OLF-22-002455 (Jan. 11, 2024), where the court resolved a dispute between the parties in an expropriation (eminent domain) case over which owed the other costs. 

Now that isn't our area of expertise at all, but we were intrigued after our Toronto colleagues Shane Rayman and Conner Harris sent it our way.

The matter before the Tribunal was the penultimate chapter in an interminable legal battle, of nearly Dickensian proportions, relating to the expropriation by the City of Stratford (“City”) of the lands of the historic Grand Trunk Railroad Repair Shops. This tale features a hard fought legal battle over many years, a monstrous narrative with many subplots, the tragic death of the central protagonist whose vision for the Cooper site never came to fruition, a bereft family left with a final compensation award that was far less than what their patriarch had hoped for, and a concluding chapter where, like in the fictional case of Jarndyce and Jarndyce, the last juridical debate is sadly and mostly about the payment of legal fees by or to a corporation with no assets.

Slip op. at 2.

With that introduction, who could resist reading more?

We call it a very "un-Canadian" beef because of our impression (perhaps a misimpression?) that our northerly neighbors pride themselves on decorum and politeness, and this fight seemed anything but decorpus and polite. At least that's the vibe we're getting from the opinion.

1353837 Ontario Inc. v. City of Stratford, No. OLT-22-002455 (Ont. Land Trib. Jan. 11, 2024)

Hawaii Beachfront Land Is Worth Nothing: The State May Have Taken Accreted Land, But Just Compensation Is Zero

Zip. Zilch. Zero. Nil. Nada. Squat. Bupkis.

Here's the latest in a case we've been following for a long, long time (see here and here, for example).

In Maunalua Bay Beach Ohana 28 v. State of Hawaii, No. CAAP-19-0000776 (Mar. 18, 2024), the Hawaii Intermediate Court of Appeals confirmed that a state statute declaring certain accreted littoral land to be public property was a temporary regulatory taking of littoral owners' rights (the common law says that accreted littoral lands belong to the private owner), but that the just compensation the State owes to these owners is a big fat zero.

This case goes back to a statute the Hawaii Legislature adopted in 2003, which made certain land accreted on littoral private property public land. As the court put it, "[i]t effectively made land accreted to the Beach Lots after May 20, 2003, public land not owned by [the adjacent littoral owners]." Slip op. at 3.

Sounds like a taking, and sure enough a lawsuit followed, claiming that the ipse dixiting of accreted land was a taking because it represented a change in the common law under which the adjacent owners would own the accreted land. Nine years later, the legislature "changed the law by terminating the taking effectuated by [the statute]." Slip op. at 9.

The trial court dismissed the takings claim, but the Court of Appeals held that the statute worked an uncompensated taking of the land accreted before the effective date of the statute. (The court rejected a claim that the statute also confiscated future accreted land, but that is another story.) The appeals court sent the case back for a a ruling on whether these plaintiffs own land that qualified, and if so, the valuation of the accreted land.

After a bench trial, the trial court concluded that there was a temporary (nine year) taking, not a permanent one. The parties stipulated that just compensation was to be measured by the "fair rental value of the accreted land" as of the effective date of the statute, subject to the governmental and private restrictions that burdened the land. Slip op. at 5. The trial court concluded that just compensation is $0. 

The court of appeals affirmed, and made short work of the owners' argument. It based its conclusion entirely on the appellate standard of review:

Beach Lot Owners' evidence of fair rental value was based on the testimony of Stephany Sofos. The circuit court "did not find Ms. Sofos to be a credible witness" and gave "no weight to her testimony." "It is well-settled that an appellate court will not pass upon issues dependent upon the credibility of witnesses and the weight of evidence; this is the province of the trier of fact." Fisher v. Fisher, 111 Hawaii 41, 46, 137 P.3d 355, 360 (2006) (citation omitted).

The circuit court instead credited the testimony of Craig Leong, a licensed real estate appraiser who holds the MAI designation.

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

The State's appraiser concluded there was no rental value because the size of the accretions were "irregular" and of "narrow widths," and subject to regulations and restrictions. Slip op. at 12.

The owners couldn't believe that beachfront property in one of the most desirable residential areas in Honolulu is utterly worthless: "Beach Lot Owners argued that 'depriving [them] of oceanfront property in Maunalua Bay for 9 years cannot possibly be valued at $0.'" Slip op. at 10. Indeed isn't it intuitive that ownership of even a small and irregularly-shaped portion of beach -- even for a temporary period, and even if open to public access as the plaintiffs stipulated -- could be worth something? Especially, as the plaintiffs claimed, as a buffer to the homes built on the adjacent residential lots (what the opinion calls the "Home Lots").¹

Problem is, the plaintiffs making those claims "do not own any Home Lots." Slip op. at 11. Ouch.

Having noted that the trial court made a determination that the plaintiffs' appraiser offered incredible testimony (what that testimony was, and what value the appraiser assigned to the accreted lands we don't know because the opinion does not tell us), and that the government's appraiser was credible, the court of appeals held the factual conclusion of zero just compensation was not clearly erroneous because there was some evidence in the record to support it. Game, set match.

Also: no nominal damages because the plaintiffs, having scored no just compensation, "did not sustain a 'technical injury due to a violation of some legal right[.]'" Slip op. at 13. In the court's view, they were not injured at all.

Finally, the court rejected the argument that the plaintiffs should have been at least awarded attorneys' fees under the private attorney general doctrine. Read pages 14-20 if you care why (we don't, sorry).

--------------------------------------------
1. This intuition comes from the "Inversecondemnation on Valuation" treatise by the way. You won't find a copy of this august work in your law library, sadly. In the end, the trial court found the in-court testimony of expert valuation witnesses a lot more persuasive than your author's intuition, which, standing alone, is worth doodly-squat in a court of law (as we know). 

Maunalua Bay Beach Ohana 28 v. State of Hawaii, No. CAAP-19-0000776 (Haw. App. Mar. 18, 2024)

CA11's Eminent Domain Attorneys Fees Ruling Is Controlled By Prior Panel

The Eleventh Circuit's short opinion (really short - 1.5 pages) in Sabal Trail Transmission, LLC v. 3-921 Acres of Land, No. 22-10435 (July 25, 2023), is straightforward: to resolve whether a Florida property owner subject to a private condemnor taking under the federal Natural Gas Act has a property right in attorneys fees and costs, the court applied a recently-decided circuit panel opinion that held yes:

The Natural Gas Act authorizes private entities who have received a certificate of public convenience and necessity to acquire property “by the exercise of the right of eminent domain.” 15 U.S.C. § 717f(h). Sabal Trail Transmission, LLC, invoked this power of eminent domain to acquire easements to build a pipeline on land owned by Sunderman Groves, Inc. In the condemnation proceeding, the district court determined that the Act incorporates state eminent domain law, and it consequently applied Florida law to grant attorneys’ fees, costs, and prejudgment interest to Sunderman Groves. Sabal Trail appeals these awards, arguing that the district court should have applied federal law instead.

After this panel heard oral argument, a different panel of our Court decided a nearly identical case that arose out of Sabal Trail’s use of the eminent domain power to build this same pipeline. See Sabal Trail Transmission, LLC v. 18.27 Acres of Land, 59 F.4th 1158, 1160–62 (11th Cir. 2023). That panel determined that proceedings under § 717f(h) must look to state law to determine the measure of compensation. Id. at 1175.

It is “firmly established” that “each succeeding panel is bound by the holding of the first panel to address an issue of law, unless and until that holding is overruled en banc, or by the Supreme Court.” United States v. Hogan, 986 F.2d 1364, 1369 (11th Cir. 1993). This Court’s prior construction of the Natural Gas Act is now the law in this Circuit, and it conclusively resolves this appeal. We therefore AFFIRM the district court.

Slip op. at 2-3.

As we reported here, the issue is whether federal or state law applies in these cases. The big reason why the question of whose law applies is that under the Fifth Amendment, "just compensation" does not include attorneys' and other fees, while under the Florida Constitution's "full compensation" provision (which we noted here), a property owner may recover fees and costs.

But don't stop with the per curiam opinion, and please read on, because the interesting part of the decision is the concurring opinion of Judge Grant, which argues that the earlier panel got it wrong, and the federal "just compensation" standard should apply, not Florida's definition of property:

Like at least one member of that panel, I think Georgia Power was wrongly decided. See 59 F.4th at 1175 (Jordan, J., concurring). But unlike the panel, I do not think that our prior-panel precedent rule required us to extend Georgia Power’s incorrect reasoning about the Federal Power Act to the Natural Gas Act. See id. at 1168–69. I write to emphasize that, when facing similar interpretive questions about other statutes, we should not overread or further extend these two precedents—the compensation standards of the Fifth Amendment apply to private delegations of the federal eminent domain power unless Congress says otherwise.

Concurring opn. at 1-2.

Sabal Trail Transmission, LLC v. 3.921 Acres of Land in Lake County, Florida, No. 22-10435 (11th Cir. July...

Colorado App: Lessees Are Not "Property Owners" Under Attorney Fees Statute

When a condemnor is told "no" (or voluntarily drops an eminent domain lawsuit), many jurisdictions require it to pay attorney fees to the parties on the target end of the vs.

Colorado is one of those jurisdictions, and as the Colorado Court of Appeals noted in Mulberry Frontage Metro. Dist. v. Sunstate Equip. Co., No. 22CA0680 (July 13, 2023), the "[t]he General Assembly has provided that when a court rejects a condemnation petition on the grounds that the petitioner isn't authorized to acquire the subject property, 'the property owner who participated in the proceedings' is entitled to recover their reasonable attorney fees and costs." Slip op. at 2. Sounds good, Colorado.

Clear enough when the "property owner" claiming fees is the title (fee) owner. And here, the trial court concluded that Mulberry did not have the power to take. The fee owner plainly had the right to recover fees under the statute. But what about lessees?

Nope, not covered held the court. Yes, a lease is property. And yes, lessees are defendants in eminent domain cases (here, the condemnation petition didn't name the lessee, but it successfully sought joinder as a defendant, asserting its interests were at stake). Kind of sounds like a property interest, with the lessee being the owner of that interest.

So what gives? After all, the Colorado statute provides:

If the court finds that a petitioner is not authorized by law to acquire real property or interests therein sought in a condemnation proceeding, it shall award reasonable attorney fees, in addition to any other costs assessed, to the property owner who participated in the proceedings.

But the statute "doesn't define an 'owner' of property," so the court applied the "common useage[.]" Slip op. at 11. An "owner" owns something. Check out pages 12-13 of the slip opinion for more. The key stuff is on pages 13 and 14:

The lessee’s reliance on general property law principles is misplaced. It is true that a leasehold is a property interest. See Better Baked, LLC v. GJG Prop., LLC, 2020 COA 51, ¶ 24 (A “lease create[s] interests in real property for [the] tenant.”); Kunz v. Cycles W., Inc., 969 P.2d 781, 783 (Colo. App. 1998) (“A commercial lease is both a conveyance of an interest in real property and a contract.”). But that doesn’t make a lessee a property owner. A lessee’s interest is in the possession — not the ownership — of property. See Wilson v. Marchiondo, 124 P.3d 837, 840 (Colo. App. 2005) (recognizing a lessee’s possessory interest in leased property); Rare Air Ltd., LLC v. Prop. Tax Adm’r, 2019 COA 134, ¶ 25 (noting that “[a] possessory interest is ‘[t]he present right to control property, including the right to exclude others, by a person who is not necessarily the owner’” (quoting Black’s Law Dictionary 1353 (10th ed. 2014))); see also Cantina Grill, JV v. City & Cnty. of Denver Bd. of Equalization, 2012 COA 154, ¶ 7 (recognizing a distinction between possessory interests and ownership interests), aff’d on other grounds, 2015 CO 15; People v. Barefield, 804 P.2d 1342, 1345 (Colo. App. 1990) (same); Restatement (First) of Prop. § 7 (describing possessory interests in land).

Slip op. at 13-14.

And the court acknowledged that "lessees are generally entitled to receive compensation for any taking of their property interest in condemnation proceedings." Slip op. at 14.

But this, the court concluded "merely signifies that a lessee's possessory interest in property must be compensated if it's taken through condemnation, unless a lessor and lessee have provided in their lease. It doesn't signify that the lessee is an owner of property." Slip op. at 15 (citation omitted).

The legislature only said "owner," and not, for example, "holders of other property interests[.]" Slip op. at 20. So if you want this statute to include lessees, lessee, then take it up with the General Assembly. Slip op. at 21 ("Those arguments present a policy choice that is for the General Assembly -- not this court -- to make.").

But all was not lost: the court remanded the case for consideration of whether the lessee might be entitled to recover fees under a separate statute, which gives the courts discretion to award attorney fees in any civil action. 

So what do you think about this? Does one "own" a lease, or merely "possess" it? And is there any real difference?

Mulberry Frontage Metro. Dist. v. Sunstate Equip. Co., No. 22CA0680 (Colo. App. July 13, 2023)

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

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

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

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

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

Very Icy Austin on Wednesday (Conference Eve).

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

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

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

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

Even flying from sunny California was a problem.

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

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

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

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

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

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

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

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

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

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

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

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

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

The tech command center.

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

We're underway, with a pretty good crowd.

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We really want you there...

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

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

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

• Private Utility Takeovers – Lessons From a 67 Day Trial

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

• Valuation Issues When Billboards and Signs are Condemned

• Setting Client Expectations and Identifying Red Flags

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

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

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

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

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

To register, go here.

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

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

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

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

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

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

• Private Utility Takeovers – Lessons From a 67 Day Trial

• Valuation Issues When Billboards and Signs are Condemned

• Setting Client Expectations and Identifying Red Flags

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

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

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

• ...and much more!

To register, go here.

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

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

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

CA11 Oral Arguments In Pipeline Taking: If Florida Law Says The Owner Gets Compensation Plus A Car, Does A Federal Court Have To Recognize That?

Here's the latest in a case we've been following. The U.S. Court of Appeals recently heard oral arguments in a case where a private Natural Gas Act condemnor (the Sabal Trail pipeline) exercised the delegated federal power of eminent domain to take the property of a Florida owner.

As we reported here, the issue is whether federal or state law applies in these cases. The big reason why the question of whose law applies is that under the Fifth Amendment, "just compensation" does not include attorneys' and other fees, while under the Florida Constitution's "full compensation" provision (which we noted here), a property owner may recover fees and costs. The District Court held that Florida law, not federal, applied, and Sabal Trail appealed to the Eleventh Circuit.

The arguments are worth listening to. Is this a question of "choice of law?" Or does it go to how the "property interest" is defined in these takings (by state law). Or do the federal standard of "just compensation" govern? In our opinion, the most interesting part of the arguments starts at the 20:48 mark, where one of the judges asks the property owner's lawyer (our colleague Thor Hearne):

Let me give you what I think is a tough hypothetical for you. Maybe you'll be able to distinguish it. Florida decides in its wisdom that when any government decides to take property for eminent domain, whether it's permanent or an easement, or something like that, not only do you get just compensation as that term is commonly understood, you get attorneys fees and costs, and you get a brand new car. So a federal court has a case under the Gas Act and the question is: do you get the car?

(Note: we think the answer is "Yes, you get the car because Florida law defines the property interest being taken, and Florida law has included attorneys fees and costs and a car as part and parcel of an owner's rights when their land is taken.")

More on the arguments here: "11th Circ. Wary Of Axing Atty Fees In Pipeline Easement Cases."

Fed Cir: Uniform Relocation Act Doesn't Authorize Fees For Pro Se Lawyering

In Haggart v. United States, No. 21-1660 (June 22, 2022), the U.S. Court of Appeals for the Federal Circuit held that the Uniform Relocation Act is like a lot of other fee-shifting statutes, and does not authorize attorneys fees for work performed by a lawyer if that lawyer is one of the litigants. Slip op. at 8 ("We see no sound reason to read the URA’s fee provision to authorize an attorney pro se litigant to receive attorney’s fees when 42 U.S.C. § 1988 and other fee-shifting statutes do not.").

We're posting this here because the underlying case involves a rails-to-trails takings claim, and because we know you are interested in any decisions interpreting and applying the URA.

Haggart v. United States, No. 21-1660 (Fed. Cir. June 22, 2022)

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

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

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

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

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

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

Our 2022 Proof of Life Photo.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Our two fave tags.

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

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

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

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

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

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

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

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

Michael Berger is Watching You.

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

A pretty good showing for the alma mater.

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

Again, thank you sponsors!

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

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

Stay tuned.

 

Article: "2021 Eminent Domain Update: Key Decisions in Public Use and Just Compensation" (with Amy Boulris)

Thank you to ALI-CLE and the Practical Real Estate Lawyer for publishing an article jointly authored by us and our friend and colleague Amy Boulris, "2021 Eminent Domain Update: Key Decisions in Public Use and Just Compensation."

And a special thanks for allowing us to post and distribute it here. A subscription to PREL costs (it's a pretty good deal for a very useful publication), and it was kind of the publisher to let us post the article here for you, gratis.

Boulris & Thomas, 2021 Eminent Domain Update: Key Decisions in Public Use and Just Compensation, 37 Prac. Real Est. Lawyer 29 (Sep. 2021)

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

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

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

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

Join us in Scottsdale in January!

Links From Today's ABA RPTE Session

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

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

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

Thanks again, colleagues.

NY App Div: Potential Future Public Benefit Won't Support Eminent Domain

It can be somewhat of a challenge to blog about many of the opinions from New York's appellate courts (dun-dun) because they are typically short. What more (or less!) can you say about an opinion that is very short? We mean really short. Like 3 pages short.

Such it is with the Appellate Division's opinion in Gabe Realty Corp. v. City of White Plains, No. D66651 (June 30, 2021). A total of 4 pages, actually, but when you cut out the caption, introductory fluff, and the clerk's signature, you are down to a grand total of two pages of single-spaced text. It would take us more time to write about the decision than it would take you to just read the darn thing.

Highlights:

• A New York court invalidates an urban renewal taking, supported by a claim of blight remediation. Read that again: this is from a New York court, perhaps the worst system in the nation in which to try and challenge a taking.
• "Here, however, the agency relies only on conclusory assertions of blight based upon a 25-year-old urban renewal plan which itself lacks detail or documentation."
• "This Court will not act as a mere 'rubber stamp[ ]' to approve findings of blight where the condemning authority has failed to provide evidence to support its findings."
• "Here, the agency’s “bare pleading” (id. at 484) of substandard conditions did not satisfy its obligation to respond to a challenge to its finding of blight by presenting 'an adequate basis' for its conclusion."
• "Where a condemning authority does not demonstrate that property is substandard for the purpose of urban renewal, the authority must identify some public purpose other than the purported remediation of blight."
• "A mere potential future public benefit is not sufficient to satisfy the requirement that property be taken only for public benefit."
• "We agree with the Federal Court of Appeals for the Seventh Circuit that the existence of a 'public use' must be determined at the time of the taking since the requirement of public use would otherwise be rendered meaningless by bringing 'speculative future public benefits' which might never be realized within its scope."

So go read it!

Gabe Realty Corp. v. City of White Plains, No. D66651 (N.Y. App. Div. June 30, 2021)

We Pay A Return Visit To The Eminent Domain Podcast To Talk Takings

In which we pay a return visit to Clint Schumacher's Eminent Domain Podcast to catch up with Clint about our new gig, Cedar Point (briefly, since the opinion came down the day we recorded the podcast), just compensation and attorneys' fees, assessing severance damages in appraisals supporting jurisdictional offers, public use, and our favorite cool courthouses (let's just say that they range from historic courtrooms to converted doublewide trailers).

If you are not already a regular listener to the Eminent Domain Podcast, you should be! It's a great one-stop convenient way to keep current on the latest goings-on in the takings business. 

Hawaii Court Of Appeals: You Can't Sanction A Member Of The Public For Merely Asking To Unseal Court Records

A detour from our usual fare today, as we post what now is the final complete case that we participated in before we traded in our private practice hat for public interest law back in February.

In a short (5 page) Summary Disposition Order, the Hawaii Intermediate Court of Appeals held that any member of the public has standing to request that a court unseal previously sealed documents, and that a court must hold a hearing on the request. Here, the trial court concluded that Judges for Justice (an association of retired judges who are interested in remedying wrongful criminal convictions) lacked standing to request the unsealing of certain documents that the court had previously kept from public disclosure, and sanctioned Judges for Justice $17,000 for making the request. The appeals court not only concluded it was error to deny the request, but that the trial court abused its discretion when it summarily imposed sanctions. In re Schweitzer (Appeal of Judges for Justice), No. CAAP-20-0000374 (June 15, 2021).

As we noted above, we started off this case wearing our private practice hats. We didn't take the case with us when we joined Pacific Legal Foundation, so we turned it over to our (now former) colleagues at Damon Key, who saw the case through to completion.

Although unpublished, this decision strongly reaffirms that the judicial process is -- absent compelling reasons for secrecy -- a public process, and that members of the public have an interest in these matters and do not need to show any special standing to ask the court to lift the veil. And most importantly, a member of the public can't be hit with a devastating monetary sanction merely for asking.

Summary Disposition Order, In re Schweitzer (Appeal of Judges for Justice), No. CAAP-20-0000374 (Haw. App....

Louisiana SCT: No Statutory Attorneys' Fees For Pipeline Taking - But LA Constitution's Just Comp Clause Requires Owners Recover "The Full Extent" Of Their Loss (Which Includes Fees)

A private pipeline did what pipelines often do: it started negotiating with property owners for the property needed, but at the same time pressed forward. It reached agreement with some owners, others not. It filed "expropriation" lawsuits (for it is in Louisiana that our scene lies). It started to build, even before judgments of expropriation.

Aaslestad, owner of 38.00 acres (more or less) sued the pipeline to enjoin further construction. He also asserted in the expropriation case a counterclaim for due process and trespass (again, this is Louisiana, so they call that a "reconventional demand). Trial followed.

The trial court issued a judgment of expropriation and concluded the takings were for a public purpose. But it also upheld the property owner's trespass counterclaim. The owner's interest was pretty minor, so the total award was a whopping $150. Seventy five bucks for the expropriation and the same amount for the trespass. No attorneys' fees.

As we noted in this post ("Louisiana Court Slaps Down Pipeline for Just Going Ahead And Building Before Actually Taking Property"), the Court of Appeal was not too pleased with the pipeline. It upheld the expropriation but also held that occupying and starting the build on the property prior to a judgment of expropriation violated the owner's due process rights. It didn't matter that the interest was very small. The court entered a $10,000 judgment for the owner, and sent the case back down for a calculation of attorneys' fees.

Not so fast, the pipeline argued in a writ petition to the Louisiana Supreme Court. We're a pipeline, and the attorneys' fees statute only applies to the government and its agencies. And besides, this case, while it involved takings, was not a compensation proceeding.

The Supreme Court agreed that the statute did not cover this situation: "By its plain language, La. R.S. 13:5111 does not allow for an award of attorney fees in this case, as it involves expropriation by a private entity. Specifically, we find that BBP is not an 'agency' of the state." Slip op. at 5. Things looking up for the pipeline!

But hold on: maybe the statute doesn't require a private condemnor to provide attorneys' fees; but the Louisiana Constitution does.

The Louisiana Constitution of 1974 requires that landowners be compensated “to the full extent” of their loss, which “shall include, but not be limited to, the appraised value of the property and all costs of relocation, inconvenience, and any other damages actually incurred by the owner because of the expropriation.” La. Const. Art. I, § IV(B)(5).This article applies to both public and private entities and was amended in the Constitution of 1974 in order to encompass costs of litigation and attorney fees.

Slip op. at 5.

The constitution requires that all condemnors (not just public condemnors) make full and just compensation, which means attorneys' fees. The court also held that the "specific procedural posture of the case" didn't matter. Thus, the court also rejected the pipeline's argument that the award of fees was in the owner's inverse counterclaim, and not in the expropriation claim.

So check this out. We think the Louisiana Supreme Court got it right when it held:

While this Court has generally acknowledged that attorney fee awards are governed by statute or contract, we have also noted that there are exceptions to this rule. See e.g., Hernandez v. Harson, 237 La. 389, 409, 111 So.2d 320, 327 (1958) (discussing exceptions to the jurisprudential rule that attorney fees are not allowed except where authorized by statute or contract). Additionally, we note that “the constitution is the supreme law of this state, to which all legislative acts must yield.” M.J. Farms, Ltd. v. Exxon Mobil Corp., 07-2371, p. 22 (La. 7/1/08), 998 So.2d 16, 32(citations omitted). We agree with defendants that Rivet is inapplicable because it does not address the fundamental question presented herein: whether the Louisiana Constitution permits any award of attorney fees and litigation costs separate from any statutory authority explicitly authorizing an award of attorney fees and costs. We find that it does. Thus, under the specific facts of this case, we find sufficient support in the Louisiana Constitution to uphold the awards of attorney fees and costs.

Slip op. at 9-10.

We just wish more courts would see it the same way.

Bayou Bridge Pipeline, LLC v. 38.00 Acres, More or Less, No. 20-1017 (La. May 13, 2021)

N. Dakota: We Understand The Right To Exclude - Non-Permanent Precondemnation Entries Went Too Far

Check out the North Dakota Supreme Court's opinion in Cass County Joint Water Resource District v. Aaland, No. 20200171 (Mar. 24, 2021). It's a quick read, and worth your time.

North Dakota has one of those "precondemnation entry" statutes allowing a (potential) condemnor to enter private property to check it out to see if this property is suitable for the anticipated public use. Indeed, North Dakota's statute is modeled on California's pre-1963 entry statute (the one analyzed by the California Supreme Court in the somewhat-recent decision in Property Reserve):

In all cases when land is required for public use, the person or corporation, or the person's or corporation's agents, in charge of such use may survey and locate the same, but it must be located in the manner which will be compatible with the greatest public benefit and the least private injury and subject to the provisions of section 32-15-21. Whoever is in charge of such public use may enter upon the land and make examinations, surveys, and maps thereof, and such entry constitutes no claim for relief in favor of the owner of the land except for injuries resulting from negligence, wantonness, or malice.

N.D.C.C. § 32-15-06.

Here, the District's proposed entries "to conduct examinations, surveys, and mapping" to see if the land was suitable for a flood control project were opposed by the owners. The trial court agreed with the District that these were relatively small, innocuous, and nonpermanent invasions, so they were covered by the statute. Entries granted.

Not so fast, held the N.D. Supreme Court, even though one of its more recent decisions (on which we posted here (ND: Entry Statutes Are Not Takings, Even If There's A Physical Invasion") might indicate otherwise. The test borings in that case were small, eventually replaced on the land, and were compensated and therefore qualified as minimally invasive ("innocuous") entries covered by the statute. But not so here:

For sixteen and one-half months, [the trial court's] order granting right to entry gave the District access to the land to make examinations, surveys, and maps thereof. As part of the 2017 order, the District was allowed to perform geomorphic examiations, which required the installation of survey monuments on the properties. The District conceded at oral argument that these monuments were in fact installed pursuant to the 2017 order.

Slip op. at 4. Total time the District could access the owners' properties was certainly not permanent: 35 months. The survey monuments were there longer (nearly 3 years).

That was enough to convince the N.D. Supreme Court that these type of entries were not "innocuous" and qualified as more permanent (even though, factually speaking, the entries were not permanent).

In short, Loretto solved the question:

[The statute] permits entry upon the land to make examinations, surveys, and maps thereof, which is "preliminary to the condemnation action itself." Under the 2017 order, the District was afforded sixteen and one-half months to perform its examinations and surveys. Placement of survey monuments on the Landowners' properties for as long as three years is not an "innocuous entry" and would seriously impinge upon or impair the rights of the Landowners to the use and enjoyment of their properties. A physical occupation of this duration goes beyond the minimally invasive examination and testing permitted under N.D.C.C. § 32-15-06. Accordingly, we reverse the district court's May 2020 orders granting the District a right of entry onto the Landowners' properties.

Slip op. at 6.

In other words, these entries are not privileged, and are ... takings (Are you listening, SCOTUS?).

Cass County Joint Water Resource District v. Aaland, No. 20200171 (N.D. Mar. 24, 2021)

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

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

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

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

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

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

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

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

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

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

...

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

Slip op. at 9, 11.

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

Check it out.

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

Still Time To Join Us: ALI-CLE Eminent Domain & Land Valuation Litigation Conference (Online!) This Thursday & Friday. Tuition Deals! #EminentDomain2021

Yes, it starts tomorrow, Thursday, January 28, 2021, but we're "remote" this year, so it is not too late to register to join us for the 38th Annual ALI-CLE Eminent Domain & Land Valuation Litigation Conference. This is the "big one" where the nation's best practitioners, scholars, jurists, and other industry professionals gather to talk shop about the subjects we know and love.

Details here (ALI-CLE's page with faculty, agenda, and times), or here (a recent episode of Clint Schumacher's Eminent Domain Podcast, where we preview the Conference). Here's your chance to be a part of what is the best conference on these topics.

We have set it up to take advantage of the remote format, and tuition has been reduced (thank you to ALI-CLE for recognizing this, and for our sponsors for being so generous). We're seeing a lot of first-time registrations, and this is a great opportunity to give us a test drive if you've always thought about attending, but never wanted to spend 4 days away from the office to do so.

A long-timer coming back? Look for the special deal which includes a discount on the 2022 conference.

We're having programs with intriguing subjects such as "Planning to Win: Practical Strategies for a Successful Inverse Condemnation Case," "How Do I Keep My Firm’s Doors Open When the Courthouse Doors Are Closed? Making Your Practice More Efficient When You Can’t Try Cases," "Where Is the Supreme Court Headed on Takings Cases? Regulatory Takings Update and Cedar Point Preview," "No Show and All Tell: Breaking News in Property Rights and Takings," "More Than the Fifth Amendment: Other Tools for Upholding Property Rights," and "Evaluating Lockdown, Moratorium, and Emergency Claims."

Nebraska: Condemnor Asking To Overturn Jury's Compensation Verdict For (Alleged) Evidentiary Errors Asks Too Much

The docket is pretty crowded today, so we don't have that much time to digest and summarize the Nebraska Supreme Court's opinion in Douglas County School Dist. No. 10 v. Tribedo, LLC, No. S-19-986 (Nov. 6, 2020). But we recommend you read it (or at least scan it).

Short story: Tribedo got the better of the School District at an eminent domain valuation trial on a partial taking. Although Tribedo's appraiser opined to a higher figure, the jury was closer to his number than the District's expert's. So the District appealed, arguing the trial court wrongly rejected the District's jury instruction, and that the jury's verdict -- which included severance damages -- was not supported by the evidence because neither party's expert specifically opined about severance damages.

As we know, both of these are hard hills to climb. And sure enough, the Supreme Court rejected both arguments. First, it concluded that the trial court's rejection of the condemnor's proposed jury instruction (on cost to cure), although a correct statement of law, did not result in any prejudice because the instruction actually given was, in substance, close enough to the proposed instruction. Slip op. at 729. Second, the court held that as long as the jury verdict is between the parties' appraisers, there is evidence to support the verdict. The jury isn't bound by the appraisers, and "[w]e will not speculate as to how the jury reached the amount of its award." Slip op. at 730.

Finally, the court confirmed the property owner's attorneys' fee award, and also concluded that the owner's appraisers did not offer an invalid opinion when they itemized damages to the remainder property, even though they "detailed numerous elements that influenced their valuations." Slip op. at 728. The opinions were in the ballpark and didn't need to lay these out specifically, and the jury was free to regard (or disregard) the experts' opinions. The jury regard it, and that was enough for the supreme court. 

Douglas County School Dist. No. 10 v. Tribedo, LLC, No. S-19-986 (Neb. Nov. 6, 2020)

Utah App: "All bets are off for any actions other than exactness." Close Enough Isn't Good Enough In Condemnation - When The Statute Requires Notice To Property Owners Within 10 Days, It Means 10 Days

When an opinion starts off with "[t]his case offers a feast of legal issues - ranging from procedural to constitutional - but its main course is a cautionary tale to government entities: they must follow the exact statutory requirements for bringing a condemnation action[,]" you just know that you have to read the entire thing.

That's exactly what we recommend with the Utah Court of Appeals' opinion in Salt Lake City Corp. v. Kunz, No. 20190010-CA (Oct. 16, 2020). The court concluded that when a statute requires that a condemnor provide the property owner with at least 10 days written notice and an opportunity to be heard before the condemnor takes a final vote to approve exercising eminent domain, "substantial compliance" isn't sufficient. We make this recommendation that although this sort of statutory requirement is quite common -- as are examples of condemning agencies not strictly adhering to the required procedures -- we find that courts are just as often willing to let it slide, and these requirements are honored more in the breach than in the observance. Thus, we appreciate reading decisions in which courts do what they should and hold the condemnor's feet to the fire the legislature established.

How bad was the city's deviation from the required procedures here? Not that bad, frankly. Instead of conforming to the notice and opportunity requirement, the city did this:

Based on the undisputed facts, the City fully complied with those requirements as to the first meeting by sending notice at least ten business days in advance and allowing Owners to speak at the meeting. However, it only half complied as to the second meeting because it allowed Owners to speak but did not send written notice at least ten business days in advance. And it did not comply with either requirement as to the third meeting because the notice it sent arrived only three business days before the meeting and Owners were not allowed an opportunity to be heard.

Slip op. at 16.

Responding to the owners' objection, the city responded with "ahh, close enough; besides, there's no showing that the owners didn't have actual notice or didn't have an opportunity to be heard." See slip op. at 18. Sorry, held the court, when the statute says a condemnor must do X, it must do X. Strict compliance:

Once the statute is determined to require strict compliance, all bets are off for any actions other than exactness.

Slip op. at 18-19. The whole point of these type of procedural requirements isn't process for the sake of process, but to protect the rights of the property owners:

And the statute in this case does not relate to a mere fax number, recitation of a statute in a disclaimer, or a timeframe like the ones in the cited cases; instead, it goes to the weighty matter of providing procedural fairness and placing a check on a government entity’s immense power to deprive an owner of a substantive private property right. Thus, those cases do not allow a reading of substantial compliance into this statute because the statute’s requirements are mandatory.

Slip op. at 18.

Prejudice to the property owner, vel non, is not even relevant, and the court rejected the city's argument that the owners needed to have shown some prejudice that resulted from the lack of notice and hearing. 

In sum, we view section 78B-6-504(2)(c)’s requirements as strict based on longstanding precedent. Actual notice simply won’t fly. And we conclude that Owners need not show prejudice in this context. Accordingly, we affirm the district court’s interpretation and dismissal under the statute.

Slip op. at 20-21.

One last thing (and this is related to our recent post on litigation fees under the Uniform Relocation Act). The court rejected the owners' claim to attorneys fees under the URA. The court mirrored the rationale of the Ohio Supreme Court, holding that the URA only applies to federal agencies, not Salt Lake City. The court also engaged in a somewhat weird (to us) approach to the URA's language that fees may be awarded if the agency "cannot acquire the real property by condemnation." The court read this language as meaning not that the owner defeats a particular taking, but that a court must conclude the condemnor "cannot" take the property. Slip op. at 23-24. In other words, there has to be some kind of final judgment that the taker can't take at all, not just that its case fails, as here.

We find that rationale to be just ... strange, especially in light of the court's earlier ruling on adhering to the requirements of Utah's procedural statute. Are there any circumstances in which a court will absolutely prohibit a condemnor from ever taking the property? We sure are hard-pressed to imagine any. In short, prosecuting and defending eminent domain actions are always done seriatim, and each case stands or falls on its own. A condemnor may repeatedly try to take property, but if it fails to adhere strictly to the requirements of how to do so, it should be on the hook for "not acquiring" the property. 

But despite this glitch in the court's reasoning, we (naturally) recommend you read the opinion, and incorporate its core holding: close enough is not good enough in eminent domain.

Salt Lake City Corp. v. Kunz, No. 20190010-CA (Utah App. Oct. 16, 2020)

Ohio: Uniform Relocation Act Doesn't Require Fee-Shifting For Inverse Cases (Lower Court Split Alert?)

Check this out, a recent case on the Uniform Relocation Act from the Ohio Supreme Court. Does it conflict with a decision that goes the other way from the West Virginia Supreme Court, or is it consistent with a South Dakota decision (cert. denied in that one, by the way)? Read on and find out.

In State ex rel. New Wen Inc. v. Marchbanks, No. 2017-0813 (Oct. 14, 2020), the property owner prevailed on an inverse condemnation case in the Ohio Supreme Court. (Well, not technically an "inverse condemnation" case because Ohio doesn't recognize such a claim when a government action has de facto taken property; instead, the property owner applies to the Supreme Court to issue a writ of mandamus to compel the government to institute eminent domain.) But no matter - the property owner (a Wendy's restaurant) won its takings case in the Ohio Supreme Court after the Ohio DOT's highway project closed off access to the Wendy's from the highway.

The owner sought attorneys' fees under the URA's provisions that shift the usual rule of each party bears its own fees when an owner is forced to initiate a claim for compensation.

The Ohio Supreme Court held that the URA does not require payment of attorneys' fees to a property owner who prevails in a federally-funded inverse condemnation case for two reasons:

First, the URA only governs actions by federal agencies:

When a federal agency institutes a condemnation proceeding in federal court, the act authorizes the court to award “reasonable costs, disbursements, and expenses” to the real property owner, including reasonable attorney fees, if the federal agency cannot acquire the property by condemnation or abandons the proceeding. 42 U.S.C. 4654(a)(1) and (2). And under 42 U.S.C. 4654(c), a similar award is authorized for a plaintiff who prevails in an inversecondemnation proceeding against the United States for the taking of property by a federal agency or for a plaintiff in such a proceeding that ends in a settlement; see also 49 C.F.R. 24.107. By their terms, however, these provisions apply only to exercises of eminent domain by federal agencies. The federal act does not create a statutory basis for an award of attorney fees in a state mandamus action.

Slip op. at 3. The URA only "imposes an obligation upon federal officials to ensure certain conditions are met before approving contracts. It does not purport to be a statutory authorization for this court to award attorney fees in a mandamus action." Slip op. at 3-4.

Second, the court rejected the owner's argument that Ohio has adopted the URA's requirements. "[T]he Revised Code contains no counterpart to 42 U.S.C. 4654(c) or 49 C.F.R. 24.107 authorizing an award of attorney fees in a mandamus action brought to compel an appropriation proceeding, and New Wen does not rely on any Ohio statute in its application for an award of attorney fees." Slip op. at 4. The court also rejected the argument that by regulation, the Ohio DOT had adopted the URA's requirements. The owner asserted that even though Ohio statutes had not done so, the Ohio regulations plainly mirror 49 C.F.R. 24.107's requirement to pay inverse condemnation attorneys fees.

No deal, held the court, the administrative regulation was ultra vires because it "lacks statutory authorization." Slip op. at 5. If an Ohio statute doesn't authorize URA-like fee shifting, then a regulation alone can't do it.

Finally, in what may be the weirdest quirk in the opinion, the court concluded that the fee-shifting provision in the Civil Rights Act (42 U.S.C. § 1988) does not compel an award of attorneys fees, even though the property owner alleged a section 1983 claim in its complaint. The court concluded that it -- the Ohio Supreme Court -- does not have original jurisdiction to consider 1983 or 1988 claims, and therefore rejected the claim. Now it is true enough that the Ohio Supreme Court does not have original jurisdiction to consider a 1983 claim or the related 1988 claim for fees. An Ohio trial court, however, would have (concurrent) jurisdiction over such claims.

Does it strike you as odd that simply because of a procedural quirk in how an owner raises an inverse condemnation or takings claim in Ohio -- as a mandamus action brought directly in the Supreme Court -- that the owner is deprived of the otherwise-available opportunity to recover fees and costs for a pretty plain violation of its federal constitutional rights? Does this mean that Ohio property owners should skip the Ohio Supreme Court and bring their takings and mandamus claims in a federal court, either under that court's original (Knick) or supplemental jurisdiction?

And what of the differences in analysis between the Ohio court and the West Virginia court on the URA issues? Are we seeing a lower-court split with cert potential?

Stay tuned, as always.

State ex rel. New Wen, Inc. v. Marchbanks, No. 2017-0813 (Ohio. Oct. 14, 2020)

CA11: In Eminent Domain, There's A "Low Bar" For An Owner To Testify About The Value Of His Own Property

A short one from the U.S. Court of Appeals for the Eleventh Circuit. In Sabal Trail Transmission, LLC v. 18.27 Acres, No. 19-10705 (Aug. 3, 2020) (unpub.), the court concluded that the trial court did not abuse its discretion when it allowed the property owner to testify about the value of his property. 

This is a ruling that should not be a surprise, given the same court's earlier published opinion holding the same thing in a case by the same pipeline condemnor against different property owners. Here, the court noted the "low bar" an owner must satisfy to testify (having "some basis" for the testimony).

One owner had some training as an appraiser. The other had experience buying and selling property in the relevant market:

Lee and Ryan Thomas satisfied the low bar of providing some basis for their valuation testimony. Lee trained as a land appraiser early in his career. Both men bought and sold property in Levy County over the years and knew what prospective purchasers would be looking for in a piece of property. And they explained the negative impact of the pipeline on their farming operations and residential life. Although Lee and Ryan provided little explanation for the specific values they testified to, we cannot say their testimony was purely speculative or that the district court abused its considerable discretion in admitting it.

Slip op. at 8.

And the beat goes on.

Sabal Trail Transmission, LLC v. 18.27 Acres, No. 19-10705 (11th Cir. Aug. 3, 2020) (unpub.)

Construction Impacts From Public Project Are Not "Quality Of Life" General Damages, But Takings Requiring Compensation

The Louisiana Court of Appeal's opinion in Lowenburg v. Sewerage & Water Board of New Orleans, No. 2019-CA-0524 (July 29, 2020) is long (54 pages) and detailed. But for those of you interested in inverse condemnation liability stemming from the impacts on property owners from public construction projects, this is your case.

This consolidated appeal involves a group of homeowners, Plaintiffs-
Appellees (“Lowenburg Appellees”) and a non-profit church with a daycare center Plaintiff-Appellee, Watson Memorial Spiritual Temple of Christ d/b/a Watson Memorial Teaching Ministries, (“Watson Appellee”) who claim that they, along with their properties, sustained various types of damages as a result of the construction of the Southeast Louisiana Urban Drainage Project (SELA Project). This federally sponsored and funded project involved the construction of multiple drainage canals and was carried out by the United States Army Corps of Engineers (“USACE”) and Defendant-Appellant, Sewerage and Water Board (“Appellant”).

Slip op. at 1-2 (footnotes omitted).

The owners sought compensation for things like lost and restricted access, excessive vibrations, noise, dust, dirt, debris, and "foul odors" that resulted in physical damages, and lost income and profits. After a trial, the court entered judgment for the owners that the construction had inversely condemned their property, and entered damage and compensation awards.

The Board appealed, raising a whopping 9 points of error. The owners cross-appealed, arguing that they were entitled to greater damages, plus interest and attorneys' fees on appeal.

We're not going to go through the details on how the court disposed of each of the Board's arguments. But the first part of the short story is that the court of appeal held that the damages suffered by the plaintiffs -- loss of use and enjoyment for day and night noise, vibration, dust, loss of parking, and property damages -- are not "quality of life" problems (as the Board characterized them) that may be considered general damages. Slip op. at 8. After all, the Board argued, the plaintiffs' "homes were never rendered uninhabitable and use was never lost." Slip op. at 9. 

The court rejected that argument, concluding instead that these impacts damaged the owners' use and enjoyment of their properties, including their property right to street access. See slip op. at 12-13. That was enough.

The second part of the short version is that the plaintiffs' proof of damages was just fine. Jump to page 21 of the slip opinion for the court's run down of how each owner proved damages and compensation. Especially interesting is the part where the court analyzes how to prove loss of use and enjoyment (slip op. 24-33), and loss of access and parking (slip op. 34-39).

Finally, the court cleaned up what looks like a typographical error in the trial court's damage judgment, and held that the owners are entitled to interest and attorneys' fees on appeal. Overall, we'd say this was a pretty resounding win for the property owners.

On that, we send felicitations to our Owners' Counsel of America colleague Randy Smith and his trial and appellate team.This one shows why they're the pros.

Lowenburg v. Sewerage & Water Board of New Orleans, No. 2019-CA-0524 (La. App. July 29, 2020)

Louisiana Court Slaps Down Pipeline for Just Going Ahead And Building Before Actually Taking Property

A pipeline needed private property. Did it wait until it had actually taken the property before it started to build the pipeline? No. 

In Bayou Bridge Pipeline, LLC v. 38.00 Acres, No. CA 19-0565 (July 2020), the Louisiana Court of Appeal addressed a host of challenges:

• A broad facial challenge to Louisiana's expropriation system. The landowners asserted that allowing private entities to exercise the sovereign power violated due process, primarily because the delegation lacks concrete standards. The court rejected the argument, concluding that the state delegating the power to a common carrier pipeline and including a process that includes a predeprivation hearing to determine public use and necessity, is not a problem. Louisiana's law "sets out appropriate standards to guide expropriating authorities and the courts, as well as providing for judicial review. Those standards are clearly set out in La.Const. art. 1, § 4, which requires that any taking be for a public and necessary purpose." Slip op. at 15. This isn't a quick take, and the expropriation only comes after judicial review.
• Necessity. The court rejected the owners' claim that the lower court should not have admitted evidence about economic development. Louisiana trial courts are "vested with vast discretion in connection with the admissibility of evidence." Slip op. at 18. The owners either waived challenges by failure to object, or the evidence was relevant. Besides this is Louisiana, and "[g]iven the long line of cases finding a public and necessary purpose for oil pipelines ... 'any allocation to a use resulting in advantages to the public at large will suffice to constitute a public purpose.'" Slip op. at 21 (quoting ExxonMobil Pipeline Co. v. Union Pac. R. Co., 35 So.3d 192, 199 (La. 2010).
• The owners had much more success with their argument that the pipeline just going ahead and building violated the owners' rights: "When BBP consciously ordered construction to begin on this property prior to obtaining a judicial determination of the public and necessary purpose for that taking, it not only trampled Defendants’ due process rights as landowners, it eviscerated the constitutional protections laid out to specifically protect those property rights. Therefore, we find the trial court committed legal error when it failed to compensate Defendants when BBP tread upon those constitutionally recognized rights." Slip op. at 25-26 (footnote omitted).
• The court rejected the pipeline's argument that the owners were "out-of-state residents who had an incredibly minor ownership interest in the property; they had no contact with the land at all, save for one visit by two of the three Defendants to see the land just prior to trial and one Defendant had still never been to the land at issue at trial; and Defendants never paid taxes or tried to posses or maintain the property in any fashion." Slip op. at 27. Sorry no, the court held: "As co-owners, Defendants’ due process rights were individually viable and as against BBP, a third-party, each were entitled to be recognized regardless of their co-ownership interest or residence." Slip op. at 28. [Barista's note: Residence? Really, pipeline?]
• Even though the individuals' interests were minor, the court was not pleased:

When the government physically invades (or authorizes third parties to invade) real estate, a taking occurs even if the financial impact is minimal.”). Thus, regardless of BBP’s assertions of limitation, each Defendant was entitled to assert their constitutionally guaranteed due process rights against BBP’s expropriation action and contest BBP’s right to such an expropriation. As such, the due process rights established and specifically recognized in La.Const. art. 1, § 4 existed to protect Defendants’ property ownership rights, and BBP willfully, wantonly, and recklessly17 violated those rights. Id.

The court sent the case back down for a determination of the attorneys' fees owed to the owners.

Bayou Bridge Pipeline, LLC v. 38.00 Acres, No. CA 19-0565 (La. App. July 2020)

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 ([email protected]) and we shall gladly drop one or two in the mail to you.

While supplies last!  

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) 

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. 

(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.  

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.)

Here's The Agenda And Faculty For The 2020 ALI-CLE Eminent Domain And Land Valuation Litigation Conference, Nashville, Jan 23-25, 2020

You overwhelmingly asked for Nashville, and we're bringing it to you!

Get ready, and hold your place now: here's the list of programs and speakers for the 36th Annual ALI-CLE Eminent Domain and Land Valuation Litigation Conference, to be held at the Downtown Nashville Hilton, January 23,- 25, 2020. Two-and-a-half days with top-notch national faculty (lawyers from both sides, judges, legal scholars, appraisers, relocation experts, and others).  

Early registration and group rates are available now. 

Here are just some of the programs:

• Featured Presentation: Property Rights as Civil Rights: Seeking Justice Though the Fourth and Fifth Amendments. Hon. Jonathan Apgar, Jamila Johnson, Alan Ackerman. Moderator: Leslie Fields.
• Making Sense of the New Rules After Knick v. Township of Scott: Where Do I Go, What Do I Do? David Breemer, Smitha Chintamaneni, Professor Bethany Berger. Moderator: Professor Steven Eagle.
• When A River Runs Thought It: Water Rights and Takings. Nancie Marzulla, Hertha Lund, and Charles McFarland. 
• Passive Takings by Government Inaction. Professor Christopher Serkin.
• Show, Don't Tell: The Dos and Don'ts of Demonstrative Evidence. John Murphy, Jeffrey Hamill.
• Is Close Enough Good Enough? Establishing the Date of Valuation in Direct and Inverse Cases. Neil Olson, Bill Ryan.
• Creative Approaches to Solving Difficult Appraisal Problems, Edward Burg, Bob Grace, MAI, Michael Rikon. Moderator: Joseph Waldo. 
• All You Need is Love: New Frontiers in Alternative Dispute Resolution in Eminent Domain. Cortney Young, Dwight Merriam.
• Road Warriors: Building and Trying an Eminent Domain Case From Your Laptop. Paul Henry, Jody McSpadden.
• Special Benefits: The Givings Clause? Heather Cunningham, Randy Smith.
• How To Try and Settle Pipeline Cases. Thomas Peebles, Melissa Glassman.
• Going Where No Court Has Gone Before: The Tension Between the Courts and Appraisal Methodology. Kevin Walsh, Kannon Conway. 
• Responding to Project Changes: Valuing a Taking When Government Action Changes or is Ongoing. Meghan Largent, W. Andrew Gowder. 
• Responding to the Abuse of Motions in Limine. Anthony Della Pelle, Williams James (invited)

There's also an Ethics program. For that, we are doing something a little different this year, with a special don't-miss presentation, "Surviving the Daily Fistfight: Finding Your Resilience When Every Day is a Battle" with Clint Schumacher, Christian Torgrimson, and Michael Ryan. 

And for those new to the field, or old hands who would like a refresher course, there's the "101" track on Thursday, going through an eminent domain case from A to Z. 

And this isn't the complete list, and there's more on relocation, regulatory takings from both sides of the case, effective strategies to determine unity of lands, fixtures, national updates for eminent domain and regulatory takings, and the "open mike" National Forum (where practitioners from around the nation share their issues and cases).

Look for the complete brochure shortly on the Conference web page on the ALI-CLE site.

And of course, there's Nashville. We're right around the corner from all that the town has to offer. Music City, USA. Hot chicken. The Grand Ole Opry. Country Music Hall of Fame. The Hermitage. 

So make your flight and hotel reservations now. Don't miss out. The attendance at the last several conferences has been record-setting, and the conference block at the hotel has sold out.

Join us - old friends and new colleagues! 

Indiana Ct of Appeals: Come On Parties, Please Resolve This Steaming Pile Of A Case

We're posting the Indiana Court of Appeals' recent opinion in Hoagland Family Ltd. P'ship v. Town of Clear Lake, No. 18A-PL-2088 (Aug. 28, 2019) not because it says much about eminent domain law, but more because (1) we commented on the case last time it was before the court, and (2) it's kind of funny. 

From what we can read between the lines, the case probably involved one of those dudes who makes local municipal officials roll their eyes when he shows up. The genesis of the long-running litigation is that the Town wants Mr. Hoagland to connect his house to the municipal sewer system, and stop using his own septic system.

We'll let you read the relatively short opinion for the details, but why we're posting it is the court's use of more than a few evocative words which tell you what the judges really thought of this case. See above for the opening "lede." We like toilet puns. It doesn't plug up there. "Things did not go smoothly on remand," the court tells us, for example.  

This same court exhibited the same opinion writing cheek in its 2017 decision::

This type of litigation tends to clog up the court system. Our courts are not flush with resources, and they are prone to getting backed up. When the system gets backed up, it produces unnecessary and unhealthy strains, which makes it more difficult for parties to obtain relief. And when these cases cannot be discharged, it is impossible for our court system to stay regular—and that means taxpayer resources down the drain. We can understand that, after such a long process, the parties are not overflowing with goodwill. But we hope that, before the case stalls and stagnates, they can put this big mess behind them.

If you want the eminent domain hook, here it is: Mr. H told the Town that if it wanted to install the sewer infrastructure on his property itself, it certainly could do so, but only if it first condemned and paid for an easement. The Town didn't want to, and the case spiraled downwards from there, with increasing fines, attorneys fee awards, and what looks like an ordinance that was targeted at undermining Mr. H's insistence on the Town recognizing his rights. The lower court ok'd it, but the Court of Appeals did not: Mr. H wins every major issue. 

The opinion finishes up with the note that "[o]n remand, we order that both parties proceed in good faith through that process [an application by Mr. H for sewer connection permits] so that this issue can finally be laid to rest." Slip op. at 17.

Hoagland Family Ltd. P'ship v. Town of Clear Lake, No. 18A-PL-2088 (Ind. Ct. App. Aug. 28, 2019)

What The US Supreme Court's Property Rights Decision Means For Hawaii's Property Owners

We've already set out our general thoughts about the Supreme Court’s decision in Knick v. Township of Scott in a series of posts on the case. But we haven't yet noted what the case might mean on the ground in Hawaii, our home turf. 

In a client alert we did: Hawaii’s property owners now have many more options for fighting back against oppressive government regulation of property than they did last week: 

• You can go straight to federal court to claim that a county ordinance or regulation has violated your Fifth Amendment rights, if the regulation allows the public to enter your land, or severely restricts your uses of your property. You no longer need to go to state court at all. You still may choose to do so—and there may be good reasons why you may want to consider state court—but you cannot be forced to.
• There may be advantages to federal court: life-tenured judges insulated from politics, who are used to protecting federal constitutional rights; a fast docket (Hawaii’s federal court has one of the fastest civil dockets in the nation); the federal courthouse is in Honolulu not on a neighbor island, so lawsuits against neighbor island counties no longer need be brought there with the associated expenses; and federal juries are selected from a statewide pool, unlike Hawaii circuit court juries which are county-by-county.
• Critically, if a property owner is successful in her federal civil rights claim, she is entitled to an award of reasonable attorneys’ fees and costs. Hawaii law does not recognize the same right. 
• Appellate review of the Hawaii federal district court is by the U.S. Court of Appeals for the Ninth Circuit comprised of judges from across the western states. Property owners who bring their federal takings claims in federal court can avoid appellate review by the Hawaii Supreme Court, a forum which is not reputed to be terribly property-rights friendly.
• This does not mean that if a local government affirmatively condemns your property by eminent domain that you can sue to stop it in federal court. Knick is, for now, reserved for claims alleging takings where a regulation so burdens a private owner’s reasonable uses, that the local government should pay compensation.

Changes Ahead for Property Owners: After More Than 30 Years, Supreme Court Reopens Federal Courthouse Door...

Alaska: You Only Get Interest On Compensation, Not On Attorneys' Fees

In Keeton v. State of Alaska, No. 7366 (May 24, 2019), the Alaska Supreme Court held that a property owner is entitled to interest only on the "amount awarded" -- the difference between the quick-take deposit and the eventual final judgment of compensation -- and not on that amount plus the statutory attorneys' fees which the court awarded.

You might have guessed how this one was going to play out, given the usual approach of not including attorneys' fees and costs within the meaning of just compensation, and the purpose of "interest" being to compensate for the delay in payment of comp (not fees) after the condemnor has actually taken the property. But let's go through the steps.

Quick take, deposit $15k. Final award of compensation, $24k. Fees of $47k, and costs of $32k awarded to the owner by statute. Also by statute, the court awarded prejudgment interest "on the difference between the amount of DOT's initial deposit and the amount the property was ultimately determined to be worth." Slip op. at 2. 

Owner said thank you, but that's not enough. The statute says I get interest on the "amount finally awarded," and that also includes the $79k in fees and costs I also was awarded. Slip op. at 6 ("under this argument the gap between the amount deposited and the amount awarded is $61,429.12 rather than $6,440") (footnote omitted).

The court disagreed, concluding that the statute only required interest be awarded on the excess compensation, not the total amount including attorneys' fees. The statute speaks in terms of "compensation," which means for the property taken, not for legislative gravy like attorneys' fees (the court's thoughts, not ours):

All these statutes defining compensation and directly addressing its deposit and award focus on the value of the property or damage to other property; none of them mentions attorney’s fees and costs. We conclude that the “amount finally awarded” means “compensation,” which in this statutory context means the value of the property plus incidental damages but does not include attorney’s fees and costs.

Slip op. at 11.  

There's more supporting rationale in the opinion, of course, but you can read that yourself if you like. 

Keeton v. State of Alaska, No. 7366 (Alaska May 24, 2019)

ND Supreme Court Rejects City's Claim That "We Already Own The Property By Prescriptive Easement So Are Not Liable For A Taking"

Pretty simple facts in the North Dakota Supreme Court's opinion in Lincoln Land Development, LLC v. City of Lincoln, No. 20180117 (Mar. 15, 2019): back in the day (the 1980's) the City had a dirt road over private property, used to access its sewage treatment plant. Lincoln Land Development bought the property in 2005. Recently, the City graded and paved the road, raised the road bed, and added things like culverts.  

Inverse condemnation? 

The City denied liability, arguing that Lincoln Development didn't have the right to exclude the City because the City owned an easement -- either by express grant, or by implication or estoppel -- and thus Lincoln Development didn't possess property that the City had taken. 

The most interesting part of the North Dakota Supreme Court's opinion, in our opinion, starts on page 5, where the court discusses the easement by prescription claim (after having agreed with the landowner that its deed did not expressly grant and easement to the City). Both parties agreed that the City used the dirt road for more than 20 years, the prescriptive period in ND. Game over?

No. The critical facts which compelled the Supreme Court to affirm the trial court's takings verdict in favor of the property owner were the changes in the structure of the road:

The final construction plans for the 2011 project show the pre-2011 two-tire track road was between six and ten feet wide and was not elevated above the adjacent ground. The new roadway has a sixteen-foot wide surface with a seventeen-foot road top sub-base and identified stripping limits for either a 4:1 or 6:1 downslope to the original grade of the property. The construction plans showed two to three and a half foot ditches with a flat ditch bottom approximately ten feet wide. The plans also called for installation of culverts, one of which was installed on Lincoln Land Development’s property.

Slip op. at 5-6.

Lesson: just because you own something doesn't mean you own everything. A paved road isn't a dirt road. 

The court also upheld the award of attorneys' fees to the property owner as the prevailing party. It rejected the City's argument that it, not Lincoln Development, was the prevailing party, because even though Lincoln Development won only one of its five claims. The trial court held that Lincoln Development didn't actually raise five claims, just one claim with five theories of damage. Slip op. at 8. 

Lincoln Land Development, LLP v. City of Lincoln, No. 20180117 (N.D. Mar. 15, 2019)

Materials And Links From Today's Austin Eminent Domain CLE

Great crowd today in Austin for CLE International's Eminent Domain seminar, co-chaired by our colleagues Chris Clough, Sejin Brooks, and Christopher Oddo. We spoke about "National Trends and Developing Issues in Eminent Domain." 

Here are the cases I referred to which are not included in your written materials:

• "Doggone stinky" government action, but no property right in use of land. 
• Ninth Circuit: "fundamental" attributes of property may be immune from state law changes
• Property rights in a "clean and healthy environment" - Hawaii vs. DC Cir (Pennsylvania law)
• Sixth Circuit: "forced pooling" statute isn't a taking
• "Bad faith" as a way to challenge a taking
• Violet Dock Port: for "unique" property, the Louisiana Supreme Court concludes that fair market value isn't the only measure of just compensation. Replacement cost evidence is admissible
• NJ Appellate Division: "take now, decide later" will not support redevelopment necessity. Unless there's "linkage" 
• Does the takings clause require compensation for the taking of use, or of value? 
• Does the takings clause protect investment expectations, or current profitability?
• Donuts and loss of business goodwill in eminent domain
• The Uniform Relocation Act and the Pirate's code
• Kansas relocation: owner who voluntarily sold entitled to benefits if there's evidence of an intent to condemn 
• Why do lower courts continue to dis Palazzolo? see also Indiana
• Tort vs "taking" - Montana, California (wildfire liability), 
• Ninth Circuit (2-1): inverse condemnation judgment which has not been reduced to judgment can be discharged in bankruptcy 
• Antrim Truck Centre - the Supreme Court of Canada on circuitry of access and "injurious affection"

11th Cir: The Use Of Land Isn't A Fundamental Right, Even If "What happened to [the owner] here was pretty doggone s[tink]y."

We've been meaning to post the U.S. Court of Appeals for the Eleventh Circuit's opinion in Hillcrest Property, LLP v. Pasco County, No. 16-14789 (Feb. 13, 2019), mostly because of the provocative way it starts off: 

The question before us is whether a litigant in this Circuit has a substantive-due-process claim under the Due Process Clause of the Fourteenth Amendment when the alleged conduct is the unlawful application of a land-use ordinance. The answer to that question is a resounding “no”—an answer that this Court delivered in McKinney v. Pate, 20 F.3d 1550 (11th Cir. 1994) (en banc), 24 years ago and has reaffirmed ever since. We held in McKinney that executive action never gives rise to a substantive-due-process claim unless it infringes on a fundamental right. A land-use decision is classic executive, rather than legislative, action—action that, at least here, does not implicate a fundamental right under the Constitution.

Slip op. at 1-2. 

If the name of the case sounds familiar, it's because we've covered this situation before.

The county adopted the "Right of Way Preservation Ordinance," which allows it to land bank for future road corridors by means of an exaction which conditions any development permit for land that adjoins a transportation corridor on donation of a right-of-way dedication. In other words, if you want to build near the transportation corridor, you have to donate part of the transportation corridor. Oh look, free money!

Also baked into the ordinance is an administrative process by which a landowner who doesn't think that this exaction is fair may appeal to a "committee" (let's call it the Nollan-Dolan-Koontz Committee), which is tasked with determining things like rough proportionality, narrowing the exaction, or even authorizing the payment of compensation. 

Hillcrest wanted to develop its land into a shopping center, and under the ordinance, the county eventually wanted its land dedication. Hillcrest filed suit in federal court, raising the usual claims: facial and as-applied substantive due process, and takings. In the court's words, "[t]he crux of Hillcrest’s substantive-due-process claim is that the County required the dedication 'without . . . having first made an individualized determination that the exaction was reasonably related both in nature and extent to the traffic impacts of the proposed development,' 'without . . . having clearly demonstrated a reasonable connection or rational nexus between the need to 4-lane [the Road] and the traffic generated by the development and between the exaction and the benefits accruing to the development,'" Slip op. at 7.

The district court granted summary judgment on the facial due process claim. While the appeal was pending, the parties settled all claims except the pending facial and as-applied due process claims for $4.7 million. Eventually, the Eleventh Circuit reversed the district court's facial due process ruling in favor of Hillcrest, concluding that the claim was brought too late. Case remanded for a determination of the as-applied due process claim.

The district court ruled in favor of Hillcrest's as-applied substantive due process challenge, but only awarded nominal damages of $1.00. Hillcrest sought attorneys' fees, for a yet-to-be-determined amount. Next stop, Eleventh Circuit.

The panel concluded that substantive due process "'protects 'fundamental rights found to be deeply rooted in our legal tradition,' 'that is, rights that are ‘implicit in the concept of ordered liberty,'" Slip op. at 11 (citations omitted). "These rights include 'most—but not all—of the rights enumerated in the Bill of Rights' and 'certain unenumerated rights (for instance, the penumbral right of privacy[)]." Id. (citations omitted). 

"Hillcrest," the opinion concluded, "does not allege denial of any fundamental right." Id. 

OK, you are saying to yourself, Hillcrest wanted a development permit. It has, even without such permits, a property right -- the right to use and develop its property, right? No, held the court, the right which Hillcrest is saying it possessed was a state-created right:

We explained in DeKalb Stone, Inc. v. County of DeKalb, 106 F.3d 956 (11th Cir. 1997) (per curiam), that “land use rights, as property rights generally, are state-created rights.” Id. at 959; see also Greenbriar Vill., L.L.C. v. City of Mountain Brook, 345 F.3d 1258, 1263 (11th Cir. 2003) (per curiam) (noting that “state-created rights ... include land-use rights”). Under circuit precedent, then, this seems to be an open-and-shut case.

Slip op. at 11-12. The court rejected the idea that "land use rights" are fundamental rights, distinguishing both Koontz v. St. Johns River Water Management Dist., 570 U.S. 595 (2013), and Lynch v. Household Finance Corp., 405 U.S. 538 (1972). Koontz was an unconstitutional conditions case that dealt with an "enumerated" right, while Lynch held (according to the Eleventh Circuit) was about a right created by the Civil Rights Act of 1866 (42 U.S.C. § 1983). Slip op. at 15. 

Sorry, we don't get this. Isn't "property" an enumerated right in the Constitution? Isn't the use of land one of those fundamental sticks in the bundle? Maybe you can explain it to us in a way that makes sense. 

The panel then concluded that the exaction was an "executive" action (not legislative), and thus Hillcrest had no claim. See slip op. at 15-19. In short, because this was an action applying the statute, Hillcrest could not assert that it was applied in an arbitrary and capricious manner:

So too here. The whole of Hillcrest’s challenge, as alleged in their Amended Complaint, is that the County “has applied [the Ordinance] ... so as to require Hillcrest to set aside or dedicate a substantial portion of the [p]roperty for the benefit of the public for future use as a right of way.” Said in McKinney-speak, the harm that allegedly results from the County’s action is harm only to Hillcrest.

Slip op. at 19. If that's not clear (and to us, this whole section of the opinion is majorly opaque): "We cannot be clearer on this point: regardless of how arbitrarily or irrationally the County has acted with respect to Hillcrest, Hillcrest has no substantive-due-process claim." Slip op. at 22. 

In short, you don't get even rational basis review (aliens might have done it!) for executive land use actions that might be "stinky." You get no review at all. Twelve-bee-six, case dismissed for failure to state a claim. 

For what is, in our opinion, a clearer view of the analysis, check out Judge Newsom's opinion concurring in the judgment, which starts of page 23 ("What happened to Hillcrest here was pretty doggone s[tink]y"). He had two different ways to reach the same result as the majority opinion. First, he concluded that the substantive due process claim was nothing more than the settled takings claim restated. You don't get two chances, Hillcrest. Second, he agreed that under Eleventh Circuit precedent, this was the compelled result. But, he noted, "I’m just not convinced that our precedent has it exactly right."

To Judge Newsom, the best vehicle to vindicate Hillcrest's rights was the Takings Clause. Slip op. at 24 ("Sounds like a job for the Takings Clause, right?"). But Hillcrest settled that claim. To Judge Newsom, the remaining substantive due process claim looked like the takings claim dressed up. Slip op. at 25 ("Meanwhile, the federal-court litigation -- minus the Takings Clause allegation -- chugged ahead, with Hillcrest continuing to press what, to my mind, was the exact same claim parading under a different banner: 'substantive due process.'"). 

This was the big problem to Judge Newsom. The settlement of the takings claim should have terminated the litigation. And the following passage we quote in full, because it is worthwhile to read it:

The district court was (understandably) disgusted by the County’s treatment of Hillcrest. Beginning with the summary judgment hearing, the district court expressed profound “discomfort” with Pasco County’s conduct. It just “doesn’t sit well,” the court said. “You look at this and it’s disturbing and you think, this is just not right. Something—somewhere this is flawed, whether [or not] you know, the theories happen to fit it.” In the end, the court concluded: “As I sit here, I don’t quite know whether [the case] fits in any of these [constitutional] slots that [the lawyers] have laid out, but I’m not sure it shouldn’t . . . . And I’m not sure that if it doesn’t fit into one of them that I’m not going to find the one it’s closest to and give the Circuit Court of Appeals an opportunity to say that it should land there.” Memorializing its disgust—and reasoning—in a written order, the district court held:

Another judge might find . . . this opinion inexact in this or that particular of constitutional law. Nonetheless, this Ordinance [pursuant to which the County demanded the exaction] is an unmistakable, abusive, and coercive misapplication of governmental power, perpetrated to cynically evade the Constitution. The Ordinance cannot stand, whether for the precise reasons stated here or for a related reason.

Translation: What Pasco County did here s[tink]s to high heaven; ergo, it must be unconstitutional—if not under the Takings Clause, because Hillcrest’s takings-based claim had evaporated with its amended complaint, then on some (any) other basis. The basis that the district court chose—the constitutional “slot[]” into which it slid Hillcrest’s case—was substantive due process.

Slip op. at 26-27. 

But "[t]hat's not how constitutional law works," concluded Judge Newsom , "Whatever other role substantive-due-process doctrine may play, it is not a stand-in for a failed, forfeited, or (even worse) settled Takings Clause claim." Slip op. at 27. (Barista's note: oh yeah, tell that to Justice Kennedy!)

Judge Newsom's bottom line: don't settle your takings claim and think you are going to be able to pursue the same claim as a substantive due process claim.

The balance of Judge Newsom's concurring opinion seems like his audition tape for the next SCOTUS open seat. A run down of substantive due process, the pros and cons, so to speak, and why he finds it kind of "stinky." Was it necessary to write and file this? Don't know. but we sure enjoyed reading it. 

Finally, check out the remainder of his opinion starting on page 38, where he explains, "t]o be clear, I think the majority has it exactly right under our existing precedent. I’m just not convinced that our precedent has it exactly right." He challenges McKinney and the legislative vs executive distinction, and why certain actions are deemed to deserve less exacting constitutional review than others. But a direct challenge to McKinney's conclusion and analysis will have to wait for another day. 

While we're not entirely on board with the "there's no such thing as substantive due process" line of thinking (in our view, our English predecessors were well-versed in what we now call "substantive due process," so the Founders were also), we do like Judge Newsom's clear-headed approach to applying the doctrine to stinky situations like these.

Hillcrest Property, LLP v. Pasco County, No. 17-14789 (11th Cir. Feb. 13, 2019)

ALI-CLE Palm Springs (72º, Sunny) Here We Come

If you didn't register to attend the 36th Annual ALI-CLE Eminent Domain and Land Valuation Litigation Conference later this week in Palm Springs, California, well then, shame on you!

According to the National Weather Service, while you and the rest of the country is freezing, we'll be enjoying the balmy desert climes, and discussing the topics we love: eminent domain, redevelopment, relocation, regulatory takings, trial and appeal strategies, doctrinal changes on the horizon, hot topics (border wall, pipelines, wildfires, and flooding), and others. 

Featuring a national faculty (many new to the ALI-CLE dais), and attendees from the entire spectrum of practice, academia, and the bench. 

If you are not joining us, be sure to follow along on the blog (we will post updates daily), and on Twitter (@invcondemnation, @ALI_CLE #EminentDomain2019). And plan on joining us in 2020, when we'll be in a new city (by popular demand!). And if you have topics or speakers to propose, start thinking about those as well. 

Space Remaining Is Limited - Register Now For ALI-CLE Eminent Domain And Land Valuation Litigation Conference (Palm Springs, Jan. 24-26, 2019)

We're almost there, but we still have room remaining. At the 2018 Conference in Charleston, we both sold out the registrations and the conference hotel, so we planned ahead for the upcoming 2019 Conference in Palm Springs at the Renaissance Palm Springs Resort. 

Register here. You will also be able to download the print brochure (above), or find out more details about the agenda and faculty on line. As always, we have assembled a great faculty -- many of them new speakers -- on the hottest topics in eminent domain and takings law: pipelines, jury presentations, challenging the take, an update on the most important decisions of 2018, pre-condemnation planning (from both the condemnor and property owner perspective), the border wall, and relocation. 

And of course, ethics and the "101" track for those new to the field, or experienced lawyers who would like a refresher on the basics. And these featured presentations:

• JFK: The Assassination, the Zapruder Film, and Just Compensation - Judge Andrew Edison and Justin Hodge
• Keynote Address - Property Rights: Foundation for a Free Society – President W. Taylor Reveley (College of William and Mary, Emeritus)
• Tips and Traps for the New Eminent Domain Lawyer –Andrew Brigham, Thor Hearne, Justin Hodge, Mikaela Rivera, Jack Sperber, and Joseph Suntum
• Earth, Wind, (Water), and Fire: A Report From te Front Lines of the Flood and Wildfire Inverse Cases –Thor Hearne, Professor Shelley Saxer, and Edwin Smith
• Responding to Misconceptions and Urban Legends About Eminent Domain in Popular Media – Andrew Gowder, Mark Murakami and Kelly Sheeran

As always, there are sponsored receptions and other networking events so you can meet your colleagues from across the nation. 

We have already exceeded the conference room block at the Renaissance (which means there are still rooms available at the conference hotel, just not at the discounted conference rate). But fear not: ALI has secured three overflow room blocks at nearby hotels (our Conference is in downtown Palm Springs), so there are many options for lodging remaining. ALI has also booked the very largest conference facilities, so registrations is still ongoing, and we likely will not sell out like in Charleston. 

But you never know. This program is growing in popularity and attendance, with each year exceeding the last. So don't delay, make your hotel booking now, and register to come join us in January. 

"A Property Right It Shall Be" - Fifth Amendment Requires Compensation For Whatever Interests A State Recognizes As Property

Here's the motion for leave and proposed brief amici curiae we filed yesterday in an appeal pending in the U.S. Court of Appeals for the Eleventh Circuit. 

This is a pipeline case (another one!) involving land in Florida. The district court got it right, concluding that the property owner/condemnee was entitled to recover attorneys' fees since state condemnation law governs the case, even though it was in federal court. The court also allowed the owner to testify about the fair market value of her property. The pipeline company appealed, arguing that the fact that Florida law allows recovery of attorneys' fees in eminent domain cases is irrelevant in a federal eminent domain action because attorneys' fees are not part of Fifth Amendment compensation. It also argues that the owner should not have been allowed to testify.

We filed the amicus motion and brief on behalf of Owners' Counsel of America, Southeastern Legal Foundation, and the National Federation of Independent Business Small Business Legal Center, to make two main points:

First, even if federal law controls, just compensation under the Fifth Amendment requires the owner recover the “full and perfect equivalent for the property taken.” And because Florida recognizes that one of the fundamental rights that owners of Florida property possess is the ability to recover attorney’s fees and costs, an award of compensation under the Fifth Amendment must compensate for that right.

Second, property rights are personal rights, and the personal civil right of just compensation is secured by the general rule—recognized by the district court and most other courts nationwide—that an owner has a fundamental personal right to testify about the value of her property.

Br. at 4.

Our point on what law governs compensation in federal condemnations is that under Florida law, one of the "sticks" in an owner's bundle of property rights is the right to recover fees and costs when their property is taken. And because the Fifth Amendment requires compensation for all property taken (as defined by state law), the district court was right when it allowed the owner here to do so, even if that is not a uniform national rule: 

That one state’s property law differs from others should not be surprising. Florida’s property law stands mostly alone on this. But just because a property right recognized by state law is unique or unusual, doesn’t immunize it from the Fifth’s Amendment’s compensation requirement when taken by any condemnor, including the federal government. As the Supreme Court held, if a state has recognized it as a property right, "property it will be” –

A right of this sort [in that case, a right of fishery] is somewhat different from those familiar to the common law, but it seems to be well known to Hawaii, and, if it is established, there is no more theoretical difficulty in regarding it as property and a vested right than there is regarding any ordinary easement or profit a prendre as such. The plaintiff's claim is not to be approached as if it were something anomalous or monstrous, difficult to conceive and more difficult to admit. Moreover, however anomalous it is, if it is sanctioned by legislation, if the statutes have erected it into a property right, property it will be, and there is nothing for the courts to do except to recognize it as a right.

Damon [v. Territory of Hawaii], 194 U.S. [154] at 158 [(1904)] (emphasis added).

The federal interest is not in defining the property taken (an assumption on which Sabal Trail’s arguments are premised), but in ensuring the owner receives the equivalent in cash of the value of whatever state law defines as a property interest.

Br. at 13-14.

On the "can the owner testify" question (one we've briefed before), we set out the general rule that yes, owners are competent to testify about property they own, the market for that property, and the value of what they own. Who better than the owner to know its value? 

We won't go into further details of our argument, but leave it up to you to read the brief, if interested. 

Motion and Proposed Brief Amici Curiae Owners' Counsel of America, Southeastern Legal Foundation, and

Join Us For The 36th Annual ALI-CLE Eminent Domain & Land Valuation Litigation Conference In Palm Springs (Jan 24-26, 2019)

Our colleague and co-planning chair Joe Waldo was in town yesterday, so we walked through historic Williamsburg, Virginia (cradle of the Constitution and the Bill of Rights), to invite you to join us for the 36th Annual ALI-CLE Eminent Domain & Land Valuation Litigation Conference (January 24-26, 2019, in Palm Springs, California).

As we wrote in this post, the Conference will feature the nation's best eminent domain faculty, presenting on the topics we love.

Register now here. Early registration and group discounts available. The 2018 Conference in Charleston sold out, so be sure to sign up now so you don't miss out. 

ALI-CLE 2019 Eminent Domain And Land Valuation Litigation Conference, Palm Springs Agenda - Register Now!

You've known for a while that Palm Springs, California, specifically the Renaissance Palm Springs Hotel (a resort facility, but right in town, so you will have many options for "off campus" activities like art museums, the aerial tram, golf, and whatever suits your fancy, and close-in to the Palm Springs Airport), is the venue for our 2019 ALI-CLE Eminent Domain and Land Valuation Litigation, January 24 through 26, 2019.

Of course, you also knew that the programming would be the usual spread of topical and cutting-edge topics, presented by some of the nation's experts. But we didn't give you the details. So here are some of the programs we're having: 

• Keynote Address: "Property Rights: Foundation for a Free Society" - Taylor Revley, most recently the past President of the College of William and Mary, and also former law school Dean (as well as a long-time leader of one of Virginia's most prominent private firms) will deliver the keynote. We're very lucky to have secured his participation, and his talk will focus on both the practical and the theoretical.
• Relocation: we're doing two separate panels on relocation issues. This is a growing area that many of us unfortunately overlook. No longer -- here's your chance to find out the latest: "How to Work Through a Complicated Relocation, From A to Z: Making it Happen" and "Mass Relocation and Navigating Cultural Conflicts: Displacement of Immigrant and Refugee Communities."
• "Knick of Time: A First Look at the Supreme Court's Revisit of Ripeness: Are Takings State or Federal?" We look at the arguments and the Court's opinion in the case that may upend Williamson County ripeness in regulatory and inverse cases against local governments (which may be issued by January).
• "Earth, Wind, (Water) and Fire: A Report From the Front Lines of the Flood and Wildfire Inverse Cases." Flood, wildfire, and other inverse cases present big issues, nationwide. 
• Loss of Access and Damages: How to Prove Just Compensation"
• "Palazzolo, Preexisting Regulations, and Reasonable Likelihood of a Regulatory Takings Judgment as Elements of Just Compensation." Hear directly from the source how you can present the case when preexisting regulations are claimed to depress the market value of land. 
• "Eminent Domain and Property Rights in the Popular Media: How to Respond to Misconceptions and Urban Legends."  Eminent domain and takings stories in the media and social platforms are rife with misinformation. How do you correct the record? 
• Two programs on the hot pipeline issue: the first focuses on challenges to the power to take and environmental and regulatory challenges, while the second is about "Compensation Pitfalls: How to Avoid Problems."
• "Run for the Border: Fence and Wall Condemnations." The idea of building a barrier along the southern border has burst on the headlines - what do you as a takings lawyer need to know?
• "Fight the Power: The Impact and the Valuation of Power Lines in Partial Takings" - takings for energy corridors continue to dominate; find out how this might affect value from lawyers, engineers, and scholars. 

And more (including an Ethics session for those of you who need the MCLE credits).  And the usual 101 track, for those new to the practice, or for experienced lawyers looking for a refresher.

As planning chairs, we've made a special effort to include on the faculty speakers from different backgrounds: property owner lawyers, condemning agency lawyers, right of way professionals, academics, engineers, relocation experts, and appraisers. We think you will like the line up.  

The full agenda, along with the speakers, will be published shortly by ALI-CLE. We'll announce it here, when ready. 

But don't wait, register now here. Early registration and group discounts available. 

Also: we have settled on the 2020 venue, and will make the announcement in Palm Springs. You asked for this venue, and we're bringing it to you!

Earlier this year, we had a fantastic conference in Charleston. Sold out. Attendees reported having a great time, and learning a lot. Our aim is to build and grow the Conference, and you joining us in Palm Springs is another step in that direction.

Ping me if you have questions. 

"A Lawyer May Spend A Lifetime Working For That One Magnificent Hour" - ND Court Awards Fees For "A Good Day"

We usually don't cover trial court orders, but this one is short, and, we think, worth your time reading. 

The issue before the North Dakota District Court (Ward County) was the award of attorneys' fees following a successful necessity challenge by a landowner. In North Dakota, the award of fees and costs to a defendant is within the trial court's discretion.

The condemnor didn't object to the award of fees, but the court undertook its own review to determine the complexity and difficulty of the case. The judge correctly noted that "[i]n most eminent domain cases, the issue of necessity never arises." Order at  7. The order continued:

In his brief in support of his motion for fees, attorney Boughey cites to recent United States Supreme Court authority to support his argument that questioning the necessity of a taking, and standing up to the often heavy-handed authority making the case for an eminent domain taking, is a relatively new and developing area of the law. The Court would tend to agree. Indeed, the Court had to reach back more than 100 years to find an obscure California authority which discussed a challenge to a private taking in any meaningful fashion. (This may be more of a reflection of the Court's limited research ability than anything else.)

Order at 7-8. 

We won't quote the next couple of pages from the Order, because we recommend you read it yourself. In our opinion, it accurately captures the essence of what many courts can miss in these situations when evaluating fee requests. Here are a few snippets to get you going:

• "Justice Vogel wrote, in his dissent in Thorn, that a lawyer may spend a lifetime working for that one magnificent hour. When that hour arrives, he deserves more than piecemeal compensation. City of Bismarck v. Thorn, 261 NW2d 640 (ND 1977) J. Vogel, dissent."
• "While attorney Boughey may have had better days in Court, and his one magnificent hour may not yet have arrived, the result in this case would no doubt be considered a good day for attorney Boughey and Lavern Behm."
• "As President Theodore Roosevelt once said, the credit goes to the man in the arena ...  who is not numbered among the timid souls who neither know victory, nor defeat."
• "Attorney Broughey was willing to take on a case few have dared."
• "Rather than simply focusing on just compensation, he chose to fight the taking armed with little legal authority, and not much more than Lavern Behm's unwillingness to bend."

Check it out.

Order, Montana-Dakota Utilities Co. v. Behm, No. 51 2016 CIV 1678 (Mont. Dist. Ct., July 14, 2018) 

Links And Materials From Today's Transportation Research Board Session

Here are the cases and other items I either spoke about or mentioned at today's Transportation Research Board's 57th Annual Workshop on Transportation Law in Cambridge, Massachusetts:

• The Colorado public use cases: public use vs. public purpose: Lafayette and Carousel Farms
• On the Supreme Court docket: Violet Dock Port (SCOTUS, Louisiana)
• The Louisiana Supreme Court's ruling on valuation of a unique property (replacement cost vs fair market value)
• "New" property vs. "old" property - environmental rights as "property" (CADC, Hawaii)
• Tribal immunity from eminent domain (CA10, cert denied)
• Public can use the electricity produced, not the land taken (but that's good       enough) (SD)
• Utility takings: Claremont (Cal), Missoula (Montana)
• Post-Kelo statutes: how effective? (Georgia)
• The relationship between condemnation and inverse: Stimson (NC)
• Inverse vs. tort, part II: MR/GO and Katrina flooding (CAFED)
• Maryland: government inaction could result in inverse liability (Maryland)
• Objecting to eminent domain is a political opinion (CA9)
• Highest and Best Use could include "conceptual plans" (Florida)
• Causing a nonprofit to lose even more money is considered compensable "goodwill" under California law (California)
• Billboard valuation - loss of income isn't compensable, but there is more that one way to still get it (NC)
• Larger parcel, quick take deposit (Hawaii)
• Here's the amicus brief we filed in the above case, which cites Baetjer v. United States, 143 F.2d 391, 395 (1st Cir.) (condemnation on island of Vieques caused severance damages to parcels on Puerto Rico), cert. denied, 323 U.S. 772 (1944).
• Federal Relocation Act, inverse condemnation, and attorney fees  (West Virginia)
• The larger parcel in inverse cases (aka the "denominator" issue) (SCOTUS)
• Bye bye, Williamson County? (SCOTUS)
• Palazzolo applied (NY)
• Judicial Takings Redux - Martin's Beach (SCOTUS)

Thanks to my fellow speakers -- Bernadette Duran-Brown and Laura Curry -- and to the organizers of the Conference for asking me to be here. 

Montana: When An Eminent Domain Case Is Complex And Requires Out-Of-Town Talent, A Statutory Cap On Attorneys' Fees May Not Apply

Here's the latest in a case we've been tracking, the City of Missoula, Montana's takeover of a privately-owned water system. In 2016, the Montana Supreme Court held that the city could exercise its power of eminent domain to take the property for a "more necessary" public use. The court allowed the city to take the company, and on remand, the lower court determined compensation. There was also a follow up case on who pays property taxes on land while it is being condemned (the owner, although it may eventually have a claim for a refund from the city once the condemnation is completed and title transfers). 

In City of Missoula v. Mountain Water Co., No. DA-17-0272 (June 5, 2018), the Montana Supreme Court considered the payment of attorneys' fees and costs. After the owners--the water company itself and its "upstream" owner--rejected the city's offer of $50 million, the condemnation commissioners awarded $88.6 million to the water company (and $0 in separate damages to the parent owner of that company), and both owners sought reimbursement for their litigation expenses. 

The city wanted to run the local water system, owned by an out-of-state entity. The city, not content with using its own in-house lawyers to prosecute the condemnation, called in the big guns. It hired "specialized legal counsel from Seattle, Portland, and Spokane, and experts from New York, Seattle, and Minneapolis." Slip op. at 3. "Two Missoula law firms were also added to the City's legal team." Id.  In response, the property owners hired lawyers from "Denver, Chattanooga, Billings, and Missoula." These out-of-towners all charged rates higher than those in the locality, Missoula County. Slip op. at 4. 

The ensuing eminent domain battle was a slugfest, a lawyer's dream:

Carlyle filed a motion to dismiss, and later a motion for summary judgment, seeking dismissal as a party on the ground it was not the owner of the assets for which condemnation was sought. Carlyle argued the action should be prosecuted only against its subsidiary, Mountain Water. The City opposed the motion, arguing that Carlyle, as the ultimate owner who made the integral decisions regarding the water system and sale, was a proper party to the action. The District Court denied the motions, ruling the City had sufficiently alleged that Carlyle was an owner and thus a proper party to the action.

In August 2014, the District Court issued a scheduling order that gave the parties six months to complete their discovery and pre-trial filings, and scheduled a trial date shortly thereafter. The parties acknowledge that the litigation schedule was demanding, even for the large legal teams employed by both sides. The District Court recognized that the abbreviated time before trial was “undoubtedly demanding and difficult.” Ultimately, nearly 450,000 pages of discovery were exchanged, over 100 trial witnesses were identified, and 47 depositions were taken at locations across the country.

Slip op. at 4. Three-week bench trial, followed by an appeal to the Montana Supreme Court. The owners sought fees and costs.

Under Montana law, a "prevailing party" can recover its "necessary litigation expenses." Also under Montana law, however, those expenses are capped at the customary rate in the county in which the case was tried. The owners asserted this latter limit was unconstitutional, while the city responded by arguing that the upstream owner did not prevail since it was not awarded anything, and that the fees incurred were excessive (the old "they worked the file" argument often made by the losing party). The trial court sided with the owners -- they prevailed -- concluded their lawyers spent 25% too much time, and applied the local hourly rates, not the lawyers' actual rates. The court also denied the owners' request for discovery of the city's fees, so that the costs associated with each team of lawyers could be compared.

The court cut the award nearly in half.

The Montana Supreme Court considered Article II, section 26 of the Montana Constitution, which states, in part, "In the event of litigation, just compensation shall include necessary expenses of litigation to be awarded by the court when the private property owner prevails." (We like this provision, since it recognizes that the costs of litigation are not some kind of legislative largess, but are part-and-parcel of just compensation.) The Constitution does not define "necessary." 

The court concluded that the definition of the term was not a legislative question, but one for the courts, and didn't need a statute to further define it. But even though it didn't need to, the Montana legislature had adopted a statute which defined "necessary" expenses as "reasonable and necessary attorney fees, expert witness fees, exhibit costs, and court costs." These expenses are capped at the local rate. This owners claimed this rate cap was an unconstitutional limitation on their right to just compensation, and that the intent of the provision was to allow an owner's actual expenses. The court rejected the argument, first concluding that the term was not meant to award fees actually incurred, only those which the court deems necessary:

Under the plain language of the provision, Property Owners are not entitled, as they argue, to reimbursement of the “full extent” of their litigation expenses, or the expenses they “actually incurred,” but, rather, only the “necessary expenses of litigation” as determined “by the court.” See, e.g., State by Dep’t of Highways v. Helehan, 186 Mont. 286, 289, 607 P.2d 537, 538 (1980) (“The award of attorney’s fees in a condemnation case . . . . is only authorized after notice and a hearing before the District Court . . . . the amount to be paid is not decided by the defendant in a court condemnation action, but by the District Court.”). An owner’s “actually incurred” expenses may inform a court’s determination of what is “necessary,” but do not control it. We agree with the District Court’s stated disagreement with the proposition that “‘reasonable and necessary’ is synonymous with whatever a client will pay without balking.”

Slip op. at 11-12. 

The court also rejected the owners' facial challenge to the rate cap, concluding the that there might be instances in which the statute could be applied constitutionally (such as when the owner retains a local attorney or expert). The owners' as-applied challenge presented a more difficult question. The heart of their argument was that the local rate cap violated the "necessary" language in Article II, section 26, because it was "necessary" for them to hire out-of-locality talent to respond to the city's doing so:

On appeal, Property Owners argue, “[l]ike the City, the Property Owners recognized that they, too, needed the experience and resources provided by large firms outside Missoula.” Citing newspaper articles speculating on the City’s legal bills, they contend that they have “good reason to believe” that the City’s expenses equated with or exceeded their claimed litigation expenses.

Slip op. at 16-17.

The court found it important that the owners were denied discovery about the city's payments to its out-of-town talent. If the owners were required by the circumstances to hire their own outside (and higher-priced) team, they should have been able to find out what the city's lawyers were charging them, for comparison's sake. Id. at 17 ("In a uniquely complex Montana case, wherein out-of-state counsel played prominent roles in both prosecuting and defending the action, we think Property Owners were entitled to limited discovery about a relevant consideration to their necessity claim—the approach taken by the City to prosecute the action and the corresponding expenses incurred by the City."). Tit for tat.

In the end, the court punted. It declined to define "necessary" and "reasonable," and sent the case back to the trial court for a determination of whether it was necessary for the owners to retain lawyers who charged more than lawyers in Missoula County. 

Next, the court affirmed the conclusion that the "upstream" owner of the water company was a prevailing party even though it was awarded no separate damages in the condemnation. It is the parent company of the water company, which was awarded compensation.  

Finally, the court made short work of the city's argument that the owners' could not recover fees for out of state lawyers because they are not members of the Montana Bar. Limiting an owner to recovery for Montana attorneys does not in accord with the "modern practice of law" where people hire out of state lawyers all the time (Never mind that it was the city which first hired its own out of town lawyers.). 

City of Missoula v. Mountain Water Co., No. DA-17-0272 (Mont. June 5, 2018) 

Monday Readings: South Africa Takings, Redevelopment, Metes and Bounds, And More

Here's what we're reading today:

• The latest in that 15-minute jury verdict in a federal court regulatory takings case: the owner is now seeking attorneys' fees. Here's the motion. More on the case here ("State loses land-use lawsuit and must pay $1"). 
• "A Dangerous Development in Cape Town" (via City Journal) - "When the South African parliament passed a motion, by 241 votes to 83, to change the nation’s constitution to allow white-owned land to be expropriated without compensation, the Guardian, Britain’s equivalent of the Washington Post, was coy about reporting it. Even now, it has not mentioned the measure on its website, except indirectly." 
• David Crosby (of the law firm Crosby, Stills & Nash (and sometimes Young)) writes "Don't bring back redevelopment to California" in the San Francisco Chronicle - "When I learned that Kelo’s court fight would be turned into a movie, my son, James Raymond, and I offered to write a song for the film. “Home Free” expresses what every American should feel when they cross their threshold; we are in a place where each of us is shielded from the cares of the world. "
• Lawprof Molly Brady writes about "The Forgotten History of Metes and Bounds" in a forthcoming edition of the Yale Law Journal - "Using new archival research from the American colonial period, this Article reconstructs the forgotten history of metes and bounds within recording practice. Importantly, the benefits of metes and bounds were greater—and the associated costs lower—than ahistorical examination of these records would indicate."
• "Grow grass in your yard, or else," orders a Missouri court. "Blooming Ridiculous: Federal Judge Rules Property Rights Not 'Fundamental,' Okays Twenty-Year Prison Sentences for Growing Harmless Flowers" (via the Freedom Center of Missouri) -  According to the court's order, "Here, Plaintiffs have failed to identify a fundamental right that is restricted by the Turf Grass Ordinance. In their briefing, Plaintiffs characterize the allegedly fundamental right as a property right, the right to use private property in a harmless, lawful manner of the owner's choosing, and the owner's right to exclude unwanted persons and things from private property. However, these descriptions are too general and not in accord with the Supreme Court's 'tradition of carefully formulating the interest at stake in substantive-due-process-cases.' Indeed, if the Court were to recognize such broad property rights as fundamental, many, if not all, zoning laws would become subject to heightened judicial scrutiny."