inversecondemnation.com

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

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

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

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

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

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

Flash forward years. Decades, actually:

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

Slip op. at 5.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Slip op. at 38.

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

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

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

Slip op. at 39.

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

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

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

The opinion wrapped with this:

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

Something is very wrong with this picture.

Slip op. at 108.

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

Four decades, and counting....

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

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

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

May 25 and 26, 2022, downtown Honolulu.

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

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

• Takings 

• Transit Oriented Development (TOD) 

• Seawalls and Shoreline Access 

• Climate Change 

• Affordable/Workforce Housing 

• Ethical Considerations for Real Property Practitioners and Other Professionals

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

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

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

New Article (Bethany Berger): "Property and the Right to Enter"

A new article by lawprof Bethany Berger, "Property and the Right to Enter," criticizing the Supreme Court's ruling in Cedar Point Nursery. The article builds on the amicus brief in the case, also authored by Prof Berger.

Here's the Abstract:

On June 23, 2021, the Supreme Court decided Cedar Point Nursery v. Hassid, holding that laws that authorize entry to land are takings without regard to duration, impact, or the public interest. The decision runs roughshod over precedent, but it does something more. It undermines the important place of rights to enter in preserving the virtues of property itself. This Article examines rights to enter as a matter of theory, history, and constitutional law, arguing that the law has always recognized their essential role. Throughout history, moreover, expansions of legal exclusion have often reflected unjust domination antithetical to property norms. The legal advocacy that led to Cedar Point continues this trend, both undermining protections for vulnerable immigrant workers in this case, and succeeding in a decades long effort to use exclusion as a constitutional shield against regulation.

Definitely worth reading.

New Article: Woolhandler & Mahoney, Federal Courts and Takings Litigation, 97 Notre Dame L. Rev. 679 (2022)

A new article on takings from U. Virginia Law School profs Ann Woolhandler and Julia Mahoney in the Notre Dame Law Review, "Federal Courts and Takings Litigation." Get the pdf here.

Rather than try and summarize the piece, we're just going to cut-and-paste the highlights from the article's Introduction:

While Knick clearly expands the lower federal court role in takings claims, many questions remain. We do not know how federal courts will respond to the increase in claims—whether they will embrace a robust federal role in land use cases, or use various abstention doctrines to rein them in. While pro-regulatory and pro-property rights scholars have predictably taken sharply contrasting positions as to the appropriate federal court role post-Knick, this Article will recommend a middle-of-the-road approach, based partly on history and partly on an assessment of where the lower federal courts may most usefully contribute to the fair determination of takings claims.

...

Going forward after Knick’s overturning Williamson County, we ask: What role should the federal courts play? The demise of Williamson suggests that the federal courts may significantly increase their role in land use decisions, but it may also suggest that they will more actively use abstention doctrines to reduce Knick’s impact. We evaluate the use of Pullman and Burford abstention doctrines in takings claims, and find them inapt. We suggest an abstention doctrine specially for takings cases that would sort out cases where the federal courts are most likely to contribute to fair applications of the law. Finally, we suggest that constitutionally-based actions brought under § 1331 may be better homes for takings cases than § 1983 actions.

...

[The Article] outlines categories of claims for which lower federal court jurisdiction may be more and less warranted. Finally, it suggests that constitutional claims under the federal question statute rather than § 1983 may be a better vehicle for federal courts takings claims, Knick notwithstanding.

(footnotes omitted).

Highly recommended. [Disclosure: as noted in footnote ** of the piece, we offered our thoughts to the authors on a draft of the article.]

Fla App: No Taking, Because COVID Is A Really Good Reason To Shut Bars Down

Another takings challenge to a Co-19 shutdown, another "no taking" result.

This time, it is from the Florida District Court of Appeal (Fifth District). In Orlando Bar Group, LLC v. Desantis, No.5D21-1248 (Apr. 8, 2022), the court affirmed dismissal of takings challenges to the governor's emergency order that barred certain alcohol sales, and limited the service in bars. Orlando-area bar owners sued for inverse condemnation.

The Fifth District concluded that this did not result in a taking. First, the court held that it would not apply a categorical physical rule, because Cedar Point Nursery is not applicable. In that case, the owners were asserting their right to exclude the public, but here the bar owners claimed that the restrictions abrogated their right to include patrons and others. Slip op. at 7 ("The COVID orders at issue here did not permit third parties to access Appellants’ property; they did the opposite by preventing Appellants from having patrons on their premises and temporarily prohibiting Appellants from selling alcohol for on-premises consumption. As such, the COVID orders did not result in a physical appropriation and per se taking of Appellants’ property; rather, the COVID orders regulated Appellants’ use of their property."

Next, the court rejected the categorical Lucas claim, because even though "significant," the "impact of the orders amounted to a complete prohibition on the sale of alcoholic beverages for only seventeen days, following which Appellants’ businesses were incrementally permitted to return to limited sales and operation before being allowed to return to their pre-pandemic mode in approximately six months." Slip op. at 9. No loss of beneficial and productive use, it seems.

Finally, the court considered a Penn Central ad hoc takings claim (what the court unfortunately labeled "as-applied regulatory taking" even though we all know that an "as-applied" challenge is a description of a claim's procedural posture, and not of its substance). Here's how the court evaluated the three ad hoc factors:

Applying the Penn Central factors to the case at hand, it is clear that the COVID orders did not constitute a taking. For the first factor, it is undisputed that Appellants, along with numerous other businesses, were financially impacted by the COVID orders. For the second factor, just like firework sellers, sellers of alcohol are also in a highly regulated business. See generally Ch. 561-568, Fla. Stat. (2021). For example, one of the emergency powers granted to the Governor by statute is the ability to halt the sale of alcohol during an emergency. See § 252.36(6)(h), Fla. Stat. (2021) (granting governor ability to suspend or limit the “sale, dispensing, or transportation of alcoholic beverages”). Thus, Appellants should have also been on notice that further regulations could be enacted. Lastly, in consideration of the third factor, the COVID orders represented a valid use of the state’s police power to protect the general welfare, as noted by the trial court with citations to several other contemporary COVID decisions. If the state can use its police power to temporarily prohibit the sale of fireworks to prevent wildfires during an exceptionally dry period in Florida, it stands to reason that the state can also use its police powers in an effort to limit the spread of a highly infectious and deadly virus.

Slip op. at 11-12.

In short, the "economic impact" factor cut in favor of the bar owners. "Significant" impact. But the "investment-backed expectations" cut against them because the bar industry is highly regulated because the governor's emergency powers include the power to "halt the sale of alcohol." Now hold on a minute -- that seems like a bit of bootstrap logic: the governor's power to stop alcohol sales during an emergency isn't a taking because the governor has the power to stop alcohol sales during an emergency and thus owners don't have any expectations of selling alcohol during an emergency. Call us skeptical that this is the right way to analyze this. Finally, the court seems to have equated the character inquiry with the due process test (does the government have a really good reason for doing what it did?). As we wrote here, and as the Fourth Circuit got right in this case, the character of the government action question is about the nature of the restriction, and its impact on the owner’s property rights, and does not mean the government’s reasons. It merely asks the nature of the action: Is it a regulation of property use? Does it result in a transfer of title to private property? Does the owner retain title, but is nevertheless being required to open up their property to others? Does it require the owner to destroy their property for the public good? Are the owner’s rights being interfered with temporarily, permanently, or indefinitely? So invoking the police power as the reason this isn't a taking doesn't get you anywhere.

But there it is. Will this go further up the chain? If so, will this meet with more success than other similar challenges?

Orlando Bar Group, LLC v. Desantis, No. 5D21-1248 (Fla. Dist. Ct. App. Apr. 8, 2022)

CA8: Yee v. Escondido Doesn't Save Eviction Moratorium From Takings Review

Here's the latest case challenging a pandemic-related eviction moratorium, this one from Minnesota and the U.S. Court of Appeals for the Eighth Circuit.

In Heights Apts, LLC v. Walz, No. 21-1278 (Apr. 5, 2022), the court reversed the district court's dismissal of a property owner's takings claims. The owner challenged the Minnesota governor's residential eviction moratorium and later extensions. Like a lot of these things, the Minnesota version was not a rent "holiday" (tenants were still, technically speaking, on the hook for the rent, and there were several limited exceptions under which the property owner could evict). But for the most part, the Minnesota measure, like a lot of these things, effectively left property owners holding the economic bag (good luck collecting thousands in back rent), and turned their units into public pandemic housing. 

The owner's complaint raised Contract Clause, Petition Clause, and Takings claims.

Before we get to the good stuff (takings), a short word about the Contracts and Petition claims. The Eighth Circuit reversed the district court's dismissal of the Contracts claim, concluding that "[a] cognizable Contract Clause claim requires a showing of a substantial impairment in a contractual relationship that is not reasonably tailored to advance a significant and legitimate public purpose." Slip op. at 15. "Given the breadth and impact of the EOs on landlords’ rights, as alleged by Heights, the complaint contains sufficient facts to meet the plausibility requirement for the second prong of its Contract Clause claim[.]" Id. But the Petition claim did not similarly survive because the property owner didn't plead that the damage remedy it sought was "somehow unique to its Petition Clause claim[.]" Slip op. at 16. 

With those out of the way, we get to the takings claims. The complaint alleged a physical taking, because the moratorium "forced landlords to accept the physical occupation of their property regardless of whether tenants provided compensation." Slip op. at 17. As in many other of these moratorium cases, relying on Yee v. City of Escondido, 503 U.S. 519 (1992), the state argued that the moratorium only restricted an owner's ability to evict (you let 'em in, property owner; we're only telling you that you can't get 'em out).

The Eighth Circuit instead focused on Cedar Point Nursery, concluding that that case "controls here and Yee, which the Walz Defendants rely on, is distinguishable."

The rent controls in Yee limited the amount of rent that could be charged and neither deprived landlords of their right to evict nor compelled landlords to continue leasing the property past the leases’ termination. 503 U.S. at 527–28. The landlords in Yee sought to exclude future or incoming tenants rather than existing tenants. Id. at 530–31. Here, the EOs forbade the nonrenewal and termination of ongoing leases, even after they had been materially violated, unless the tenants seriously endangered the safety of others or damaged property significantly. See 307, 712, 2103 & 3151 LLC v. City of Minneapolis, 27 F.4th 1377, No. 20-3493, slip op. at *3 (8th Cir. Mar. 14, 2022) (noting “an ordinance that would require landlords to rent to individuals they would otherwise reject might be a physical-invasion taking”).

Slip op. at 17-18. The complaint here alleged that the moratoria had made each lease "indefinite," and that was enough for the court to conclude that the complaint sufficiently alleged a physical taking.

The complaint also alleged a non-physical (regulatory) takings claim. The court first rejected the government's "notice" defense (the property owners "closed on the properties shortly after the first EO was signed"). Nope, the court concluded, the timing of the acquisition was "immaterial to our analysis," because this was too narrow a view of the property allegedly taken. Here, the complaint alleged that the moratoria "deprived it of the economic and beneficial use and decision-making related to its property and investments." Slip op. at 18. It wasn't just the value of the property, or the lost income that was alleged to have been taken. "here, since the EO's affected the least terms of every residential unit (paying or non-paying), the allegedly taken property consists of all of Heights' residential rental property." Slip op. at 18-19.

Looking at Penn Central, the court concluded that the complaint adequately pleaded the three factors. The most interesting was the court's treatment of the "character" factor, which the opinion calls "the nature of the regulation." Slip op. at 19. This perked up our ears, because it looked like the court was going to go down the valid-police-power-cannot-be-a-taking path, an analysis we've harshly criticized.

We're not quite sure whether the court went down that road (because it cited to a case in which the Supreme Court held that if a "regulation's effects are so publicly beneficial," then it cannot be a taking), but eventually distinguished that case and concluded that the complaint pleaded that the moratoria was a benefit only to a narrow class of the public. Slip op. at 19 ("Heights asserts the EOs are not in this category because, in comparison to the legislation discussed in Connolly, the EOs were not as broadly beneficial, and they improperly imposed the public cost of fighting homelessness on a subset of the population: rental property owners."). The court concluded that the complaint therefore adequately pleaded the "character" prong.

While we remain skittish of this approach, all's well that ends well, we suppose, because the court concluded, that "[c]onsidering the Supreme Court’s recent pronouncement regarding the now-defunct CDC eviction moratorium, we are unconvinced that as a matter of law the EOs are permissible non-compensable takings." Slip op. at 20.

Now that an overbroad application of Yee is off the table, but an overbroad view of Penn Central's "character" factor is in play, let's see what the district court does with this on remand.

Heights Apartments, LLC v. Walz, No. 21-1278 (8th Cir. Apr. 5, 2022)

OK: Inverse Is A Two-Way Street - Utility Has Eminent Domain Power, So Is On The Hook For Inverse

When you are building a sewer, grading is important. Otherwise, the stuff might not "flow" correctly, if you get our drift. Okay Public Works Authority built a sewer, and guess what? "The work performed by OPWA caused extensive damage" to private property, and the "lines installed by OPWA had not been properly graded."

Not good. The jury in the inverse condemnation lawsuit that followed awarded $73k in compensation. The court of appeals, however, tossed the verdict because OPWA did not possess the power of eminent domain to take property for sewage lines. And to be liable for inverse in Oklahoma, the defendant must possess the eminent domain power.

In Barnett v. Okay Public Works Authority, No. 117792 (Mar. 8, 2022), the Oklahoma Supreme Court concluded that the utility possesses the eminent domain power to take property for sewer lines. The decision turned on the language in the statute delegating the power to a "public trust" such as OPWA. The statute delegates to OPWA the power to take property for transporting, delivering, treating, and furnishing water. That, OPWA argued, is a one-way street. Taking sewage away from homes is not "delivering" clean water to those homes, it asserted.

The Supreme Court disagreed. "The transportation of potable water goes hand-in-hand with the transportation of wastewater or sewage. To take OPWA's position would leave public trusts empowered with the right of eminent domain to run potable water lines to residents but deny public trusts the power to run wastewater sewer lines from household [sic] after use." Slip op. at 9. Having concluded that, the Supreme Court also found it easy to conclude that the sewer was a public use. 

This avoids what we think is the more interesting question -- must a property owner even need to show that a public utility has the eminent domain power in order to assert an inverse claim? We don't think so, but that bridge wasn't necessary to cross in this case, so we get why the court didn't.

Barnett v. Okay Public Works Authority, No. 117792 (Okla. Mar. 8, 2022)

CA4: Just Comp Isn't The Only Remedy For A Taking

Here's a really short one from the U.S. Court of Appeals for the Fourth Circuit. Not published, so even shorter than you might expect.

In Virginia Hospital & Healthcare Ass'n v. Kimsey, No. 20-2176 (Mar. 1, 2022), the court rejected the Commonwealth's argument that the sole remedy for a takings claim is just compensation.

The plaintiff challenged a statute which limited their ability to obtain reimbursement for medical services rendered to Medicaid patients, which instead keys reimbursement to the patients' diagnoses. According to the plaintiffs, this scheme leaves them holding the financial bag in situations were they render services that the statute deems avoidable because of the final diagnosis. 

The complaint alleges a regulatory taking, because the statute "denies just compensation for federally-mandated emergency services by predicating reimbursements on the final diagnosis only - and not on the services actually provided," and for reimbursing at only 1/2 the usual rate for those patients readmitted to the hospital. Slip op. at 8.

The district court dismissed, agreeing with the Commonwealth's argument that the sole remedy for a taking is just compensation, and the relief sought here - prospective injunctive relief (the way to plead around 11th Amendment limitations on damage remedies) cannot be granted. The court concluded, "[a]s long as an adequate provision for obtaining just compensation exists, there is no basis to enjoin the government's action effecting a taking." Slip op. at 10. Because they may bring an action to recover compensation, they are "foreclosed from seeking injunctive relief." Id. The court dismissed for lack of standing.

The Fourth Circuit reversed. After first acknowledging that in Knick, the Supreme Court noted that, "[s]o long as the property owner has some way to obtain compensation after the fact, governments need not fear that courts will enjoin their activities[,]" the Fourth Circuit held that the plaintiffs here are arguing that they're asking to enjoin the Commonwealth from denying compensation. That, the court concluded, is a different matter because they are not seeking to enjoin "the taking itself." Slip op. at 13.

"We're not trying to force you to pay us damages for changing the reimbursement rules, we're trying to stop you from withholding money that you should be paying us" is how the argument goes. That's a fine distinction, for sure. But one which the Ninth Circuit approved a short time ago, for example.

Here, the Commonwealth has a duty to pay the full amount (as required, the plaintiffs allege, by federal law), and the Commonwealth isn't living up to that obligation. Thus, the injunction isn't really seeking to enjoin the taking, just enjoin the failure to provide compensation. Ah, got it.

The Fourth Circuit also noted that the district court had not actually identified any alternative cause of action (the district court probably meant that the plaintiff could have sought just comp via a Virginia-law inverse condemnation lawsuit in state or federal court, but didn't actually say so).

Vacated and remanded.

Virginia Hospital & Healthcare Ass'n v. Kimsey, No. 20-2176 (4th Cir. Mar. 1, 2022) (unpub.)

New Article: Common Sense and Common Law: Defining "Property" in Cedar Point v. Hassid

Thank you to the editors over at The Practical Real Estate Lawyer for publishing my missive on Cedar Point Nursery v. Hassid, the U.S. Supreme Court's recent blockbuster regulatory takings decision (and for letting me post a copy of the article here so it is available even if you are not a PREL subscriber). And you know this, but I'm going to disclose it again: my law firm represented the property owner in that case, so yes, I do have a viewpoint; take that into account while reading. 

By the way, you might consider becoming a subscriber. The journal publishes just what the title suggests it does - practice-oriented articles about dirt lawyering. Good stuff.

Thomas, Common Sense and Common Law: Defining "Property" in Cedar Point v. Hassid, 38 Prac. Real Estate Law...

Important Developments In Canada (No, Not That!): Supreme Court Hears Argument In "Takings" Case

Sorry about the headline, but come on, man! We have to use clickbaity headlines every now and then to get your attention. Here's the latest in a case we've been following.

Yesterday, the Supreme Court of Canada heard oral arguments in Annapolis Group Inc v. Halifax Regional Municipality, a case involving "de facto expropriation," or what we in the U.S. might think of as a regulatory taking.

We watched the livestream (along with a few of our northern colleagues), and if you missed it, the recording of the (2-hours and 30-minutes!) arguments can be found here -- in English, with simultaneous French translation, if you want to have some extra fun.

Yes, there really are that many Justices
and lawyers on the argument

The Supreme Court is considering whether Halifax's refusal to approve Annapolis Group's development applications (consistent with its residential zoning, more specifically "future serviced development") on Annapolis' 965-acre parcel resulted in an de facto expropriation. Instead of granting the application, Halifax "promoted the Annapolis Lands as a park by inviting the public to use them as such and permitting its logo to be placed on trail signs directing the public onto them." Annapolis factum at 53. Come on it, the water's fine!

We all know that Canada law treats property rights differently than in the U.S. The biggest difference--as readers of this blog have long been aware--is that in Canada, property rights are not constitutional rights. Up north, property rights are either common law or statutory. But that being said, in some ways Canada does it better, so you should not presume that simply because Canada law doesn't constitutionalize property that owners' rights are somehow lesser. Before watching the arguments, you may want to review this case, which supplies much of the background: Canadian Pacific Railway v. Vancouver (City), 1 S.C.R. 227, 2006 SCC 5 (2006).

But whatever your opinion, listening to the oral arguments will be totally familiar to U.S. property mavens: de facto expropriation, loss of all reasonable uses, zoning, takings, beneficial use, De Keyser, compensation, physical invasions, and the like. And a few things that we're not used to hearing, like references to "the Crown," "the book" (the excerpts of record), and "factums" (aka briefs)." As the Supreme Court's website describes the case:

Whether exercise of a zoning power which deprives a landowner of the reasonable uses of its land in favour of creating a public park carries an implied obligation to pay compensation - Whether test for de facto expropriation should be revisited - Whether motive of government authority is a relevant consideration in considering whether a de facto taking occurred?

Annapolis Group Inc. seeks to develop lands that it owns. The lands lie within the boundary of Halifax Regional Municipality. Council of Halifax Regional Municipality declined to commence a planning process and to amend a by-law, both of which are required to permit development of the lands. Annapolis Group Inc. alleges Halifax Regional Municipality encourages members of the public to use the lands as a public park. It commenced an action seeking damages for alleged de facto expropriation, abuse of public office and unjust enrichment. Halifax Regional Municipality filed a motion for summary judgment dismissing the claim of de facto expropriation. The motions judge dismissed the motion. The Court of Appeal allowed an appeal and dismissed the claim of de facto expropriation.

This being Canada, everyone was really, really polite, even when the Justices were aggressively questioning the advocates. Lots of "sorry" (even from the Justices), and yes, "about." And the lawyers and the Court were all robed up (no wigs, sorry).

We urge you to check it out.

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.

 

Inverse Condemnation Isn't Tort, OK

A short one from the Oklahoma Supreme Court.

In Rocket Properties, LLC v. LaFortune, No. 120000 (Jan. 18, 2022), the court issued an order that, in effect, reverses the trial court's dismissal of an inverse condemnation case (we say "in effect" because the Supreme Court was considering a writ of prohibition, not an appeal). The trial court concluded that the inverse claim was governed by the procedural requirements of the Oklahoma Governmental Tort Claims Act.

The Oklahoma Supreme Court has long held that "[c]ondemnation proceedings do not involve a tort." Oklahoma City v. Wells, 91 P.2d 1077 (Okla. 1939). But recently, the legislature amended the statute to change the definition of "tort" to include a legal wrong or violation of a "duty imposed by general law, statute, the Constitution of the State of Oklahoma ...[,]" to specify that the tort claims statute governs "tort suits alleging constitutional rights." The trial court concluded this meant that inverse condemnation claims are now included.

No, the Supreme Court concluded, inverse claims are still not governed by the tort claims statute. The amendments merely "broadened the kind of torts for which the State will have immunity to include not only torts arising from common law, but also torts arising from statute and the constitution." Slip op. at 5. But "condemnation proceedings do not involve a tort. Condemnation involves the taking of private property for public use." Slip op. at 5. The only relevant questions are whether a taking has occurred, and if so the amount of compensation. "The 2014 legislative amendment to the GTCA did not change this." Slip op. at 5.

Takings ain't tort. Seems about right to us.

Rocket Properties, LLC v. LaFortune, No. 120000 (Okla. Jan. 18, 2022)

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

If you ever get the opportunity to teach in a law school -- either as a full-time legal scholar, or part-time as an expert adjunct practitioner -- take it if you can. You might think you know a lot about a particular subject, but there's nothing like spending time at the lectern in a law classroom in front of sharp and eager lawyers-in-training to sharpen your thoughts, and get you to truly understand a subject.

And folks calling you "professor" can evoke a smile.

But if there's one downside to the law school experience from the teacher's side of the lectern, it's grading. Especially at a law school like William and Mary that has a pretty strict mandatory curve. In upper-division courses that we handle like Eminent Domain and Property Rights Law and Land Use -- where we're dealing with some very high-level stuff and the quality of the students is uniformly high -- that makes for some hard choices at this time of year. Despite these challenges, we've wrapped up grading for the Fall 2021 Semester, and have submitted the official scores.

Although I cannot share with you the students' final papers in these classes, I don't think they would mind if I give you a sampling of the topics and titles, just so you can see how the next generation of lawyers is thinking about property, property rights, takings, land use, and environmental law (inter alia). 

Check out these titles:

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

And this is only a sampling.

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

Michigan: Legislature Can't Abrogate Long-Existing Property Rights Without Compensation

It's already settled in Michigan (Rafaeli) that a homeowner has a property interest in the equity in her home, and that if she fails to pay the full amount of her property taxes and the government forecloses, the government can't keep the proceeds in excess of the amount of the tax delinquency.

But that case didn't account for those tax foreclosures already underway when the Michigan Supreme Court issued its decision in July 2020. Nor did the case account (obviously) for the subsequent legislative amendments providing a limited procedure by which the former homeowner may claim the excess proceeds.

Thus, we get Proctor v. Saginaw County Bd. of Comm'rs, No. 349557 (Jan. 6, 2022), which involves plaintiffs who

Skip over the court's discussion of the immunity argument (unless that interests you, of course), and go to page 9 where it gets to our stuff: the takings and unjust enrichment claims. The court reversed the trial court's entry of summary judgment in favor of the government, concluding that the claims existed before Michigan adopted its constitution:

In the present cases, defendants contend that unjust-enrichment claims lacked viability, but Rafaeli plainly indicates otherwise as a common-law right that preexisted our state Constitution and continued to exist after the Constitution’s ratification. Rafaeli clarified that an unjust-enrichment claim for recovery of the surplus proceeds following a tax-foreclosure sale is a right protected by and enforceable under our Constitution’s Takings Clause and the Legislature could not abrogate that right through amendments to the GPTA.

...

Defendants also contend that any relief proposed by the Rafaeli decision is not available to plaintiffs because Rafaeli, decided on July 17, 2020, should be given prospective application only, and all the foreclosure proceedings in these cases occurred before July 17, 2020. We disagree.

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

The court also relied on County of Wayne v. Hathcock (the case in which the Michigan Supreme Court repudiated Poletown, and applied the public use ruling to pending public use challenges) to conclude that the Rafaeli rule applied to pending cases. Slip op. at 13.

Although this one might look like simply a question of the retroactivity of a court ruling, we think it is much more important because it recognizes that longstanding and preexisting property rights protected by the constitution cannot be abrogated by mere legislation. In short, these claims always existed, and Rafaeli merely confirmed what always was: a homeowner possesses a property interest in the equity in her home, and although the government may sell the property to satisfy outstanding tax obligations, it cannot pocket the difference between what is owed and the sales price. No lagniappe.  

Proctor v. Saginaw County Board of Comm'rs, No. 349557 (Mich. Ct. App. Jan 6, 2022)

A Tale Of Two Cities: A City's Road Barriers Might Be A Taking, Even Though The Property Taken Is In A Neighboring City

A short trial court decision. But because it deals with an interesting question, we're posting it.

Check it out: in this order, the U.S. District Court for the District of Minnesota denied the city's motion to dismiss in a case alleging, inter alia, a Fifth Amendment taking.

The property owners' complaint alleged that their property, located in Tonka Bay, Minnesota, was taken by the neighboring city of Shorewood. The back of the property, you see buts up against the Shorewood border, and the owners have an unpaved driveway to access Timber Lane. The owners have used the driveway for a dozen years. 

But Shorewood neighbors "took issue with the [plaintiffs'] use of the unpaved driveway." Slip op. at 3. (Thank goodness for neighbors, what would we do without them?). They asked Shorewood to install a barrier along the city boundary to prevent drivers from using Timber Lane, and "the unpaved driveway on the [plaintiffs]' property was the only way to access Tonka Bay via Timer [sic] Lane." Slip op. at 3. Shorewood did so, allegedly cutting off the plaintiffs.

Next step, federal takings lawsuit. Takings under the Fifth Amendment and the Minnesota Constitution. The inevitable motion to dismiss for failure to state a claim followed. 

First, the best of times: the district court denied the motion. If the plaintiffs prove the allegations in the complaint -- that Shorewood's installation of that barrier cut off or otherwise diminished their access -- it would be a federal taking. The big issue the court addressed was whether the plaintiffs possessed a "property" interest in access.

If the plaintiffs have a property interest in accessing Timber Lane via their unpaved driveway, then the defendants engaged in an indirect taking of the plaintiffs’ property by removing their access without just compensation. If the plaintiffs do not have such a property interest, their claim fails.

Slip op. at 6. The court noted that the Minnesota Supreme Court has confirmed "on multiple occasions" that disruption of access to a public road is enough interference with a property right to be a taking. See slip op. at 7. But wait, Shorewood argued, plaintiffs' property doesn't really abut Timber Road, so that doesn't count. The court rejected the argument, concluding that whether the property actually abuts Timber Road is a factual question, and not susceptible to a pleadings challenge. No dismissal of the Fifth Amendment takings claim, even though the court limited the relief to just compensation and held it would not issue an injunction to remove the barrier.

But next, the worst of times: the state law takings claim - dismissed. The plaintiffs did not file a mandamus claim as Minnesota law requires. There's no other way to raise a Minnesota takings claim, the court concluded. 

Memorandum Opinion and Order, Ugorets v. City of Shorewood, No. 21-cv-1446 (D. Minn. Jan. 5, 2022)

Pennsylvania: To Be Liable For Inverse Condemnation, Taker Need Not Have Eminent Domain Power

Here's how the Pennsylvania Supreme Court stated the issue in Hughes v. UGI Storage Co., No.J-69A-2021 (Nov. 29, 2021):

In these consolidated appeals, we consider the Commonwealth Court’s holding that, to be held liable for damages under Pennsylvania’s inverse condemnation statute, an entity must be clothed with the power of eminent domain – not only in a general sense, in that it must be a governmental or quasi-public entity to which condemnation powers may be delegated – but also, the entity must be invested with eminent domain authority specific to the property in issue.

Slip op. at 1.

If all you need to know is "what did the court answer?" you can stop right here: the court held that UGI Storage did not need to have been delegated the power of eminent domain, nor must it be delegated the power to take the property at issue, in order to be (potentially) liable for inverse condemnation under Pennsylvania law.

For more details on why, we recommend you read the entire 26-page opinion, even though the way the inverse claim arose is a bit convoluted. The short story: UGI was going to acquire underground natural gas storage fields, and made known what appeared to be its intention to obtain the necessary private property. It obtained FERC certification. There seems to be some question of whether it really intended to, or how much it accomplished, but eventually the actual owners of these properties sued UGI for inverse condemnation in a Pennsylvania court, alleging that UGI's "securing of FERC certification ... constituted a de facto taking of Plaintiff's oil, gas, and mineral rights." Slip op. at 10.

The trial court agreed that a taking had occurred, and continued with the valuation process. But UGI objected, asserting that it was not authorized by FERC to use the plaintiffs' property to store natural gas. UGI also argued that it does not possess the power to condemn, and therefore cannot be liable for inverse condemnation. The trial court agreed. Slip op. at 14. The intermediate appeals court split, and remanded the case to gather further evidence on the scope of the property allegedly acquired. On remand, the trial court doubled-down on its earlier no-eminent-domain-power-means-no-inverse ruling, and back up to the court of appeals they all went.

The divided appeals court affirmed that to be liable in inverse, a defendant must have the property-specific power of eminent domain. No inverse, but hey, try tort! Slip op. at 19 ("The majority concluded with a comment that the landowner might not be without a remedy, as they could perhaps pursue causes of action in tort.").

The Pennsylvania Supreme Court's analysis starts at page 21. The court focused on the definition in the eminent domain code of three terms. First, "condemn," which the court noted means "to 'take, injure or destroy property by authority of law for a public purpose.'" Slip op. at 22. Second, the court looked at the definition of "acquiring agency," and concluded that no part of the definition relates exercise of the power of such an agency to specific property. Finally, the court concluded that the statute references inverse condemnation as a "condemnation," which the legislature described as the taking, injuring, or destroying property by authority of law for a public purposes. In doing so, the court noted, the legislature "said nothing about a power of eminent domain." Slip op. at 23. All the inversely condemning authority needs is the authority of law and a public purpose:

The plain terms of the enactment, therefore, support Appellants’ position, or in other words, the statute simply does not signify a requirement of a property-specific power of eminent domain.

Slip op. at 23. The court also noted decisions such as Nollan, where "the Supreme Court hasn't parsed through whether or not each offending agency has a power of eminent domain." Slip op. at 24. The court concluded:

we do not presently discern a constitutional requirement that a quasi-public entity alleged to have invoked governmental power to deprive landowners of the use and enjoyment of their property for a public purpose must be invested with a power of eminent domain in order to be held to account for a de facto condemnation.

The Eminent Domain Code says so, of course, of both public and quasi-public entities, see 26 Pa.C.S. §103 (definitions of “condemn” and “acquiring agency”), and this case does not call for us to resolve any incongruities between the Legislature’s prescription that the statute provides an exclusive procedure to secure a remedy and federal constitutional takings jurisprudence. Rather, for present purposes, we merely adopt a plain-meaning interpretation of the Eminent Domain Code – which, as between the competing positions before us, is the one most consonant with constitutional norms – and we hold that a public or quasi-public entity need not possess a property-specific power of eminent domain in order to implicate inverse condemnation principles.

Slip op. at 25 (footnote omitted).

The entire opinion is worth a read.

Hughes v. UGI Storage Co., No. J-69A-2021 (Pa. Nov. 29, 2021)

New(ish) Article: "The Realities of Takings Litigation" (Dave Owen)

Another law review article worth reading. This one from lawprof Dave Owen, is about "The Realities of Takings Litigation" (forthcoming BYU Law Review). That title certainly got our attention - any time a law journal article is about 'reality' and takings, and includes empirical research, we're going to read it.

Here's the abstract:

This Article presents an empirical study of takings litigation against the United States. It reviews the cohort of takings cases filed against the federal government between 2000 and 2014, tracing each case from filing through final disposition. The result is a picture of takings litigation that is at odds with much of the conventional wisdom of the field.

That conventional wisdom suggests that most takings cases will involve alleged regulatory takings; that the most intellectually challenging issues will arise within the field of regulatory takings; and, more broadly, that takings litigation will play an important role in the United States’ efforts to balance government regulation against individual liberty. This article instead reveals that most takings litigation against the federal government involves alleged physical takings; that key recurring questions involve the selection of a method of takings analysis and the nature of property rights rather than the nuances of regulatory takings standards; and that takings litigation is only peripherally relevant to relationships between federal regulators and most regulated entities. These findings apply only to takings litigation against the federal government, however; takings litigation against state and local governments was not part of this study.

Even with that significant caveat, these findings demonstrate the need to recalibrate the focus of takings theory and doctrine. At a general level, they call for heightened attention to alleged physical takings. More specifically, they call for more careful policing of the boundaries between methods of takings analysis, for more focus on the types of property rights that should receive takings protection, and for reexamination of the premise that almost all physical takings claims should be subject to categorical analyses.

More here, from SSRN.

Links And Materials From Today's Land Use Institute Takings/Eminent Domain Session

LUI Co-Chair Prof. Frank Schnidman introducing the faculty

Here are the links to the cases and issues that we just finished speaking about at the 35th Annual Land Use Institute (more information on the LUI here). Today was day 1 of a multi-day remote program and the sessions are available ala carte, so there's still time to join in and learn.

Supreme Court

• Cedar Point Nursery: the Supreme Court affirms the "keep out" vibe in property law. Yes, there are three "exceptions" to the presumption that any physical intrusion into property is a taking (torts, entries allowed under "background principles," and legal exactions), but overall a very strong affirmation of property rights.
• Pakdel v. San Francisco: the "final decision" ripeness requirement in takings cases is "relatively modest" and turns on "de facto" readiness. Yes, it's a technical requirement, but let's not get too technical about it.
• PennEast Pipeline Co., LLC v. New Jersey: federal eminent domain -- even when delegated to a private actor under the Natural Gas Act, trumps a state's 11th Amendment immunity. Bottom line for us: the Court did not mess up eminent domain law.
• Alabama Ass'n of Realtors v. Dep't of Health and Human Svcs.: in striking down the CDC's eviction moratorium, the Court leaves a few tantalizing takings clues.
• Eychaner v. City of Chicago: the Supreme Court comes this close to deciding whether to overrule Kelo.

Regulatory Takings/Inverse Condemnation

• Andrews v. Mentor: the Sixth Circuit distinguishes between due process property and takings clause property.
• Alliance for Responsible Planning v. Taylor: a California appeals court concludes that a requirement that a developer pay "for all necessary road capacity improvements" is too broad and violates Nollan/Dolan.
• F.P. Dev., LLC v. Twp. of Canton: the Sixth Circuit rules that a "tree preservation" ordinance imposes an exaction in violation of Dolan's proportionality requirement.
• South Grande View Dev. Co. v. City of Alabaster: the Eleventh Circuit affirms a Penn Central jury verdict for a rezoning that resulted in an 86% loss of value.
• Yawn v. Dorchester County: the Fourth Circuit rejects a trial court ruling that dismissed a takings claim because the government action was a valid exercise of its emergency police power.
• Ray v. City of Rock Hill: the South Carolina Supreme Court concludes that a city reconnecting a stormwater pipe that previously flooded (that causes more flooding" is the "affirmative, positive, aggressive act" required to trigger inverse condemnation.
• Michael M. Berger, "Whither Regulatory Takings," 51 Urb. Law. 171 (2021): a must-read.

Eminent Domain - Just Compensation

• City of West Chicago v. Pietrobon (unpublished): a taking for a public road violates the public use/necessity requirement for two reasons: (1) the question is factual and not legal, and (2) the city had not shown the taking was part of a larger comprehensive plan.
• Christus Lutheran Church of Appleton v. Wis. Dep't of Transportation: the Wisconsin Supreme Court concludes that the DOT met its obligation to base its offer of just compensation on a "full narrative appraisal" even though the appraisal relied on did not detail the amounts it offered. It is enough that an appraisal (even an appraisal that concludes no damages) is a "fundamental ingredient" of the jurisdictional offer.
• Elpa Builders, Inc. v. State of New York: if the final compensation awarded is less than the deposit and the owner has withdrawn the deposit, the owner is liable for the difference, plus interest. Withdraw at your own risk, owners.
• Bayou Bridge Pipeline, LLC v. 38.00 Acres, More or Less: the Louisiana Supreme Court concludes that attorneys fees are required as part of the requirement to compensate owners for "the full extent of their loss."
• Two law journal articles on just compensation: Thomas Merrill, The Compensation Constraint and the Scope of the Takings Clause, 96 Notre Dame L. Rev. 1421 (2021), and Richard Epstein, Valuation Blunders in the Law of Eminent Domain, 96 Notre Dame L. Rev. 1441 (2021).

Thanks to all for joining us.

Georgia SCT To Govt: If You Take Or Damage Property, The Court May Order You To Fix The Problem Until You Pay Compensation

It's already the law in Georgia that the Georgia Constitution's Takings Clause waives whatever sovereign immunity the government may enjoy when it comes to monetary relief in a takings claim. See Ga. Dept. of Nat. Res. v. Center for a Sustainable Coast, 755 S.E.2d 184 (2014).

But it remained an open question whether the Georgia Constitution also allows property owners to seek injunctive relief for a taking (in this case, a claim of inverse condemnation). In Dep't of Transportation v. Mixon, No. S20G1410 (Oct. 5, 2021), the Georgia Supreme Court gave us an answer.

There, the DOT's road project allegedly caused flooding on Mixon's land. Mixon brought an inverse condemnation claim, seeking both just compensation and a permanent injunction to prevent future flooding and trespass. The trial court and the court of appeals rejected DOT's claim of immunity (based on the 2014 decision noted above). The Georgia Supreme Court granted DOT's request for discretionary review, because the 2014 case did not address whether injunctive relief may be sought. The Supreme Court concluded "the Just Compensation Provision waives sovereign immunity for some claims of injunctive relief." Slip op. at 6. What are those claims (some but not all)? Read on.

The court began by explaining that this isn't really a "waiver" of sovereign immunity situation, but more like what we'd call a "self-executing" provision. The Georgia Constitution itself requires compensation for takings, so in that sense there's no immunity to begin with. See slip op. at 9-10. OK, got it.

Second, the court noted that its precedents focused on the requirement of payment of compensation before the taking. See slip op. at 11 ("the notion that payment must be made (or at least offered) prior to a taking was part of that right"). And that, the court also noted, means that property owners "could obtain an injunction against government actors to stop a taking where compensation had not been provided." Slip op.at 12.

But that ability was subject to conditions: (1) the owner must have satisfied any prerequisites in the process to obtain compensation; and (2) the injunction only was good as long as the government had not satisfied its own obligations under that process. After running through the extensive (and often confusing) judicial history of Georgia law's treatment of injunctions in takings, damagings, and inverse cases, the court concluded:

What is important is that, as of the time Baranan was decided, this Court had held that the Just Compensation Provision’s language — “[p]rivate property shall not be taken, or damaged, for public purposes, without just and adequate compensation being first paid” — waived sovereign immunity for inverse condemnation claims for injunctive relief to stop a government encroachment on private land that amounted to a trespass, until the property is condemned. And that holding was largely consistent with the body of case law preceding it, dating back to the previous century.

Slip op. at 24.

Because the Georgia Constitution continues to require providing compensation before taking or damaging private property, the court held that injunctions are available to stop a taking or damaging until such time as the government ponies up:

The Just Compensation Provision by its plain text — at the time we construed it in Baranan, as well as today — imposes on the State an obligation, albeit with exceptions that have increased over time, to pay just and adequate compensation before taking or damaging private property. If the State could claim sovereign immunity from a suit for injunctive relief against a continuing nuisance that damages private property, then the State’s obligation to provide just compensation prior to doing the damage where the Constitution expressly requires as much would itself be hollow. And as explained above, we have previously made it clear through our decisions that a constitutional provision may waive sovereign immunity by necessary implication, not only by explicit language contained in the text of the Constitution. Therefore, the Just Compensation Provision waives sovereign immunity for a claim for injunctive relief where a requirement of prepayment applies and the compensation has not been paid.

Slip op. at 30-31. That will sure get their attention!

Having so concluded, the court held that some claims for injunctive relief in takings are not subject to injunctions (such as where there's no prepayment requirement, or the government has exercised eminent domain). But Mixon may seek an injunction because she asserted flooding caused by DOT's project, and "[t]here is no suggestion in the record that GDOT has afforded Mixon compensation for this alleged taking...[n]or is there any suggestion that GDOT has availed itself of legal process to exercise its eminent domain power over Mixon's property." Slip op. at 38.

So if property owners are entitled to just compensation, what good will also getting an injunction do? First, it will likely get the government's attention and force it to stop what might be an ongoing problem. Second, it might avoid situations like this where the government has been ordered to pay compensation for a taking, but simply chooses not to.

Sidebar: here's something we didn't know (yes, we know that's a long list). Even before the Georgia Constitution included a takings or just compensation provision, the Georgia Supreme Court applied the takings principle as a matter of common law. See slip op. at 10 (citing Parham v. Justices of Inferior Court of Decatur County, 9 Ga. 341, 349 (1851) (“It is not, therefore, necessary to go to the Federal Constitution for [the principle]. It came to us with the Common Law — it is part and parcel of our social polity — it is inherent in ours, as well as every other free government. At Common Law, the Legislature can compel the use of private property, but not arbitrarily. It treats with the citizen, as owner, for the purchase, and whilst he cannot withhold it upon offer of compensation, they cannot seize it without such tender.”)).

Dep't of Transportation v. Mixon, No. S20G1410 (Ga. Oct. 5, 2021)

New Article: "Inverse Condemnation: Standards and Burden of Proof" (ALI-CLE Practical Real Estate Lawyer)

Worth reading: an article in ALI-CLE's Practical Real Estate Lawyer, authored by our friends and colleagues Steve Clarke, Justin Hodge, Jeremy P. Hopkins, and Christian Torgrimson, "Inverse Condemnation: Standards and Burden of Proof."

A subscription to PREL costs, but for this issue the good people at ALI have made it available for free. Lucky you. But you really should get a subscription -- PREL publishes useful articles like this frequently.

And since we're on the subject of ALI-CLE, we can't resist reminding you that registration for the 2022 ALI-CLE Eminent Domain & Land Valuation Litigation Conference is underway (including reservations for the limited room block at the Scottsdale Resort). Please register and make your plans to join your colleagues (including the authors of the article!) in January in Scottsdale.

Join Us (For Free!): Lawprof Ilya Somin On "Cedar Point Nursery v. Hassid and the Future of the Takings Clause: Physical Occupation, Eviction Moratoria, and More" (Tues. Sep. 28, 2021, 12:50pm ET)

Next Tuesday, September 28, starting at 12:50pm ET, we'll be moderating a talk sponsored by the William and Mary Law School chapter of the Federalist Society.

Professor Ilya Somin, a nationally-recognized expert in eminent domain, takings, and related topics, is zooming in to speak about "Cedar Point Nursery v. Hassid and the Future of the Takings Clause: Physical Occupation, Eviction Moratoria, and More."

And guess what? You can Zoom in too. It's open to the public, and it's free.

So mark your calendars and join us for Prof Somin's thoughts on the cutting-edge issues in property rights. Here's the Zoom link: https://us02web.zoom.us/j/89365248145. See you on Tuesday!

2021 Brigham-Kanner Property Rights Conference (Sep. 30 - Oct. 1, 2021) - Still Time To Join Us

There's still plenty of time to register and join us for the 18th Annual Brigham-Kanner Property Rights Conference at the William and Mary Law School, Thursday and Friday, September 30 and October 1, 2021.

Yes, you may attend in-person, or remotely. The registration fees are very reasonable, ranging from $0 (yes, free!) to $200 (go here, and click "Tickets" for the details).

This year's Brigham-Kanner Property Rights Prize winner is Professor Vicki Been (NYU Law). The Conference includes presentations on:

• Remembering Toby Brigham
• The Role of Empirical Research in Defining the Scope of Constitutionally Protected Property Rights: A Tribute to Been
• The Relationship between Eminent Domain and Social and Racial Injustice (this is the panel on which we'll be presenting)
• Just Compensation Issues, Changing Public Uses, and Other Recent Developments
• The Interdependence of Property and First Amendment Rights
• The Distributional Implications of Land Use Regulation

Details on the agenda and the stellar faculty here.

In our opinion, this is the best one-day academy/bench/practicing bar conference on this topic. Really good stuff.

Register here. We'd love to see you in Williamsburg later this month. Or if that's not possible, join us for all or part of the day remotely.

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New Article: Lawprof Lee Anne Fennell - "Escape Room: Implicit Takings After Cedar Point"

Check this out, the latest from lawprof Lee Anne Fennell, her thoughts on the Supreme Court's Cedar Point decision, "Escape Room: Implicit Takings After Cedar Point," forthcoming in the Duke Journal of Constitutional Law & Public Policy.

Here's the abstract:

In the June 2021 case of Cedar Point Nursery v. Hassid, the Supreme Court held that a California regulation that gave union organizers limited access to agricultural worksites (three hours a day, 120 days a year) amounted to a per se taking. The Court further opined that any governmental grant of physical access, no matter how time-limited or functionally constrained, similarly works a per se taking—unless one of the Court’s exceptions applies. This essay argues that Cedar Point is best understood as part of an ongoing campaign by the Court to selectively apply heightened scrutiny to property-facing governmental acts in ways that broadly entrench the status quo. The Court has effectively created an escape room into which physical impositions on owners are thrown wholesale, along with various bewildering means of possible extrication. Although Cedar Point makes little sense as part of an analytically coherent system for assessing when burdens on owners have gone “too far,” it works well as part of a selective scrutiny machine—one designed to preserve restrictions like zoning that serve landowners’ interests while scrutinizing and financially burdening regulations that do otherwise.

There is a vulnerability in the Court’s approach, however, if the goal is to knock out unwanted impositions on property owners: the Takings Clause allows the government to simply pay for what it takes. Thus, the Court’s elaborate escape room comes with a lighted exit sign located right above the cash register. And the amounts in question will often be trivial. By one back-of-the-envelope calculation, for example, California might be able to keep its labor access law in place for less than $5 per year per grower. Thus, for all its exclusion-fetishizing rhetoric, Cedar Point’s bark may prove worse than its bite.

Read the entire piece here.

Two thoughts. First, it makes sense to emphasize that in many if not most circumstances, a court concluding there's been a taking (or that government action would be a taking), has not really limited the government's power to do things in the public interest. It simply makes sure it can't put the entire economic burden on someone, and that the government undertake the actual benefit/cost calculus.

Second, in our experience, the aftermath of these cases can be somewhat counterintuitive. For example, in matters where the compensation owed would be relatively small (think Loretto for example) the government backs off the regulation and chooses to not “pay for the change.” Conversely, where the comp was big, the government has pressed forward, insisting that its regulatory actions are in the continued public interest, and darn it, we’re going to find a way to do this, even if it means we (and by that we mean "taxpayers") have to pick up the tab.

What's your experience?

Oregon App: Six Year Statute Of Limitations For Physical Invasion Takings Begins To Run When Property Occupied, Not When Compensation Is Denied

A very short one from the Oregon Court of Appeals.

In Walton v. Neskowin Reg. Sanitary Auth., No. A168358 (Sep. 1, 2021), the court concluded that the trespass statute of limitations of six years applied to a physical takings (inverse condemnation) claim. The Sanitary Authority installed a main sewer line on the plaintiffs' property in 1995. When the plaintiffs' septic system failed in 2014, the Authority required them to connect to the sewer system. The plaintiffs asserted that they were entitled to a "no fee" connection, in accordance with an agreement with the Authority to allow the 1995 installation in exchange for a no fee connection. The Authority denied the existence of any agreement.

So in 2017 the plaintiffs sued for inverse condemnation. The Authority argued the statute of limitations on such a claim had expired. The statute began running when the invasion took place, and not when the Authority denied compensation as the plaintiffs argued.

The court of appeals affirmed, rejecting both of the property owners' arguments.

First, even though the just compensation requirements of the Oregon and U.S. Constitutions are self-executing, it is ok for a statute of limitations to put a time limit on that right. The court of appeals didn't really say why, other than it felt bound by an earlier decision by the Oregon Supreme Court that so held. Got it.

Second, the court held that rejected the property owners' argument that the SOL is triggered not by the physical invasion, but by the government's refusal to compensate. Like the first argument, the court held that "that argument is foreclosed" by an earlier court of appeals case that held that the statute "began to run when that physical occupation began." Slip op. at 4. 

A couple of thoughts while we await the owners' petition asking the Oregon Supreme Court for review. First, it isn't such an out there argument to suggest that inverse condemnation actions be subject to the same statutes of limitation as their direct condemnation counterparts (generally none). And, there's something that doesn't quite sit right with the notion that unconstitutional government conduct can become ok simply by the passage of time, or that the right to compensation can expire. Isn't each day that the government's sewer line remains on the property of the plaintiffs without compensation a new and different violation?

Second, the owners have a point that the wrong that an inverse condemnation claim seeks to remedy is not necessarily the invasion itself, but the uncompensated invasion. Thus, the court of appeals' conclusion here that the statute is triggered by the invasion isn't quite on the mark, because the invasion doesn't become bad until such time as the Authority declined to provide compensation. Or are we reading Lingle wrong on that one? The practical problem with the court of appeals' holding is that it fails to recognized that the Authority's rejection of compensation is an essential element of the property owners' takings claim. We made that point in a brief we contributed to a short time ago.

Now we wait.

Walton v. Neskowin Regional Sanitary Authority, No. A168358 (Or. App. Sep. 1, 2021)

New Comment: Cedar Point - "A New Test Or Merely A New Name For Some Regulatory Takings?"

Check this out. A short online comment at the Yale Journal on Regulation by Judge Thomas Griffith, "A New Test Or Merely A New Name For Some Regulatory Takings?"

The comment addresses the notion that the Supreme Court in Cedar Point shuffled up takings doctrine:

Much of the commentary about the Supreme Court’s recent decision in Cedar Point Nursery v. Hassid, 141 S. Ct. 2063 (2021), has focused on its implications for labor law. Yet some of the Chief Justice’s language in the majority opinion suggests a substantial reworking of the Court’s approach to “regulatory takings”—an area that the Court has acknowledged to be “a problem of considerable difficulty.” A close read of the opinion, however, suggests that even though Court may have reshuffled the categories it has used in the past to analyze takings claims, the law remains largely unchanged, if not slightly more obscure.

We're ok with that, since one way to read Cedar Point is that the Court was simply clarifying that the categorical rule isn't limited to permanent physical occupations, but that temporary physical invasions burden the same fundamental right, and thus are to be analyzed similarly.

But the author takes an interesting -- and different -- analytical path. Judge Griffith argues that in Cedar Point, the Court Penn Centralized physical invasion categorical takings by "import[ing] a factual balancing test into the per se framework." Forgive us for not seeing this, but we didn't see this in our read of the opinions. Where does that conclusion come from, then? The author points to the majority's reference to the Nollan/Dolan nexus and rough proportionality test:

Instead, the majority noted that because “the government conditions the grant of a benefit such as a permit, license, or registration on allowing access for reasonable health and safety inspections, both the nexus and rough proportionality requirements of the constitutional conditions framework should not be difficult to satisfy.” Id. at 2079. That inquiry should sound familiar. It is essentially a different articulation of the “regulatory taking” balancing test set out in Penn Central. But instead of considering “the economic impact of the regulation on the claimant,” the “extent to which the regulation has interfered with distinct investment-backed expectations,” and the “character of the government action,” Penn Central, 438 U.S. at 123, courts must consider “whether the permit condition bears an ‘essential nexus’ and ‘rough proportionality’ to the impact of the proposed use of the property,” Cedar Point, 141 S. Ct. at 2079.

Interesting. We've never viewed the nexus and rough proportionality exaction standards as the same as the ad hoc regulatory takings test in Penn Central. So what do you think of the author's conclusion that "[i]n that way, the Court imported a factual balancing test into the per se framework. And the seemingly momentous shift from regulatory taking to per se taking may ultimately be nothing more than a re-naming[?]"

SCOTUS Strikes Down CDC Eviction Moratorium And Leaves Tantalizing Clues About Takings

The other shoe -- perhaps the most predictable shoe drop in legal history -- dropped yesterday, and the Supreme Court vacated the stay on appeal in one of the cases challenging the CDC's renewed eviction moratorium, meaning that the district court's judgment vacating the moratorium can go into effect. Alabama Ass'n of Realtors v. Dep't of Health and Human Svcs, No. 21A23 (Aug. 26, 2021) (per curiam).

The six-Justice majority, in an unsigned opinion, held that ""[i]t strains credulity to believe that this statute grants the CDC the sweeping authority that it asserts." Slip op. at 1-2. Now remember, this is one of the cases challenging the CDC moratorium on non-takings grounds, primarily asserting that the CDC's authorizing statute does not authorize this sweeping an action (or if it does, the statute is unconstitutional). For a complete analysis of the opinion, see lawprof Ilya Somin's hot take: "Supreme Court Rules Against the Revised CDC Eviction Moratorium."

But takings mavens, take heart. The unidentified author of the per curiam opinion left us some tantalizing takings breadcrumbs even though this case does not contain a takings claim.

First, a citation to Loretto, noted above. As we noted, this isn't a takings case. Yet, the court seemingly went out of its way to point out that the inability to evict nonpaying tenants "intrudes" on the "fundamental" right to exclude. You know what is missing from this cite? That's right, Cedar Point Nursery. Interesting that the opinion goes back to Loretto when it decided (by the same six Justices) Cedar Point just a short while ago. In other words, don't count Loretto out entirely just yet. And what other case is missing from the opinion? That's right, any mention of Yee v. City of Escondido. You might think that a rent-control decision in which the right to exclude might also be referenced. But no. So what this tells us is that those takings claims against the various eviction moratoria (see here, here, and here, for example), just got a boost, because as we know. being able to allege a categorical taking is like the end of the yellow brick road for takings plaintiffs. 

Second, the Court cited the Steel Seizure Case for the idea that just because we're in an emergency doesn't mean that the rules don't apply.

It is indisputable that the public has a strong interest in combating the spread of the COVID–19 Delta variant. But our system does not permit agencies to act unlawfully even in pursuit of desirable ends. Cf. Youngstown Sheet & Tube Co. v. Sawyer, 343 U. S. 579, 582, 585–586 (1952) (concluding that even the Government’s belief that its action “was necessary to avert a national catastrophe” could not overcome a lack of congressional authorization).

Slip op. at 8. This is a good reminder that the "character of the government action" being an emergency response (even if a reviewing court somehow finds a way to get around the categorical nature of the physical invasion and apply Penn Central) isn't some kind of get out-of-the-Fifth-Amendment-free card, as many courts have unfortunately held (as noted in our recent article on COVID takings). 

Maybe the Takings Clause is the deus ex machina after all...

(PS - we're thinking Chief Justice Roberts might have authored this one. Just a feeling.)

Alabama Ass'n of Realtors v. Dep't of Health and Human Svcs, No. 21A23 (U.S. Aug. 26, 2021) (per curiam)

CA11: No Summary Judgment For You On Takings Claim When Town Provided Some Evidence Of Public Customary Use Of Beach

On one hand, the U.S. Court of Appeals' opinion in Buending v. Town of Redington Beach, No. 20-11354 (Aug. 20, 2021) is not a big deal, at least in terms of the issue in the case: did the Town take the plaintiffs' private beach property when it adopted an ordinance allowing the public to use it? Maybe it did, maybe it didn't. The opinion simply vacates the district court's grant of summary judgment to the property owners because there are disputed issues of fact on the Town's affirmative defense of customary use. The district court concluded the Town could not raise the customary use defense.

The Eleventh Circuit, however, held that the Town was not precluded from raising the defense that the property the plaintiffs claimed was exclusively private was also subject to the public's use under longstanding custom, and that the Town's opposition to the plaintiff's motion for summary judgment "provided a range of evidence supporting its customary use defense." Slip op. at 16. The Town submitted evidence showing actual use of the disputed beach area by the public: the Town holds a hotdog cookout on Independence Day each year, it spends public money to rake the beach (apparently including the private parts). That doesn't seem all that controversial. No facts in contention means summary judgment is ok. Conversely, any beef about the facts relevant to a material issue -- here, the Town's affirmative defense of custom -- means that the trier of fact gets to resolve the beef by looking at credibility and the other things that triers of fact get to weigh. 

But on the other hand, some of the Town's evidence the opinion points to is decidedly odd. Like "evidence that the Town was designed to accommodate visitors, who may not want to come if they could not access the beaches[.]" Slip op. at 16. That properties in the Town have been rented to visitors. Slip op.at 16-17. Evidence of "the longstanding perception that the Town's beaches are available for public use." Slip op.at 17 (emphasis added). The Mayor testifying about what other people felt. Id. ("The mayor, who moved to the Town as a child in 1955, testified that people 'just felt like the beach was there for us to enjoy and use.'").

While we're not sure that this type of evidence alone would suffice to make summary judgment appropriate, there seems to be enough other evidence of actual public use to get to the trier of fact. We hope on remand that there's a better filtering of what comes in and what stays out. 

Buending v. Town of Redington Beach, No. 20-11354 (11th Cir. Aug. 20, 2021)

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

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

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

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

Join us in Scottsdale in January!

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

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

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

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

Oh, have we got your attention now?

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

...

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

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

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

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

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

More here, including application information and deadline.

CA4 Tells Landowner To Beat It (From Federal Court): 11th Amendment "Sovereign Immunity" Bars Suing State For Fifth Amendment Compensation In Federal Court

The U.S. Court of Appeals for the Fourth Circuit's opinion in Zito v. N.C. Coastal Resources Comm'n, No. 20-1408 (Aug. 9, 2021) is just the latest in a growing list of decisions about an issue we've been following (see here, here, here, here, and here for example), including the District Court's decision in this very case.

That issue is whether a property owner can sue a state for just compensation for a taking in federal court.

You know how that works. Knick held that local governments and officials can be sued in federal court for violating the federal constitution and for civil rights violations. Check. But it didn't expressly say anything about whether there's something different about a state or a state official (in their official capacity) that prohibits the same thing. After all, the Eleventh Amendment has been interpreted, it prohibits federal court lawsuits against states (or instrumentalities of a state) for money damages. Yes, there are a number of ways around that -- mostly involving prospective injunctive relief -- but the Eleventh Amendment's plain text limitations (citizens can't sue "another state" in federal court) has over time evolved into something more general, which the courts have labeled "sovereign immunity."

In Zito, the Fourth Circuit held that Knick's throwing back open the federal court door to takings claims did not address or otherwise undermine the usual 11th Amendment rule. Slip op. at 10. Similarly, the self-executing nature of the 5th Amendment's Just Compensation requirement did not alter that calculus. Slip op. at 11 ("So Knick did nothing new with respect to the self-executing nature of the Takings Clause in federal court.") (footnote omitted). Yes, Knick made Fifth Amendment private property rights equal with other rights (under Williamson County, these rights were definitely treated as second-class right), but it didn't elevate private property rights and merely subjected them to the same 11th Amendment limitations on other constitutional rights. Slip op. at 12-13.

Of course, there's an exception to the usual "sovereign immunity" states enjoy in federal court if there isn't a "reasonable, certain, and adequate" means to obtain compensation in state court. Such remedies exist, the Fourth Circuit concluded.

Beat it, and bring you federal takings case in a North Carolina court (deja vu all over again).

Disclosure: the property owner in this one is represented by colleagues at our law firm (we had no hand in the case).

There's a growing divergence in the way the lower federal courts handle these arguments. See this case from the Ninth Circuit, for example. There's also a growing academic thread that Eleventh Amendment "sovereign immunity" isn't a blanket stay in jail free card in certain cases. See here and here, for example. 

So what's next, a cert petition? Given that counsel in the case is the same fellow who brought us Knick (and who has a 2-for-2 win record at the Court), and who also earlier petitioned the Court on the 11th Amendment issue, we suspect there's a good chance something more is coming.  

Zito v. N.C. Coastal Resources Comm'n, No. 20-1408 (4th Cir. Aug. 9, 2021)

What The Deus Ex Machina? - Federal Court Complaint: California's Eviction Moratorium Is A Taking

According to that trustworthy source Wikipedia, in drama, the term deus ex machina ("God from the machine") "is a plot device whereby a seemingly unsolvable problem in a story is suddenly and abruptly resolved by an unexpected and unlikely occurrence. Its function is generally to resolve an otherwise irresolvable plot situation, to surprise the audience, to bring the tale to a happy ending, or act as a comedic device." It is mostly considered a "lazy or cheap" trope.

And that takes us to the various federal, state, and local eviction moratoria that are (or were) in effect at various points in the covid epidemic. To us, those have mostly seemed like cases of kicking the can down the road (to use another overworn trope) because although couched as merely temporary withholding of the usual eviction remedy for nonpayment of rent, in a great number of cases the practical effect of these things is to force property owners to house third parties for free, because -- come on, who's kidding who now -- we all know that most of the back rent piling up never realistically going to get collected. In our view that turns what is sold as a mere delay in collection, into a process by which private property has been knowingly commandeered to house people during a public health calamity.

That's where the deus ex machina concept comes in. To us, it has seemed that the propounders of these things have not really thought out (in good faith, at least) where this all ends, and instead hoped for some kind of miracle plot device to swoop in and save the day once the music stops and the can-kicking can no longer continue. After all, at some point, everyone must realize that someone's got to eat the sandwich.

So maybe the deus is hoping against hope that tenants are going to make good on their merely delayed rent obligations. Or maybe it is making a pile of money available that property owners might access to offset the lost rent (but let's make the tenant's cooperation an essential element of the process to request it). Or maybe its what some have alleged: that these things are just a naked use of government power to transfer owners' property to tenants on for the public good.

And that, in turn, takes us to takings (we always get to takings, don't we?). Maybe -- just maybe -- the true deus ex machina are these takings claims we're now starting to see. (For the recent big federal takings challenge to the CDC moratorium, see here.)

With that, here's the complaint filed late last week in federal court, the latest takings challenge to an eviction moratorium.

This time, it's California's which, in August 2020, adopted AB 3088. That statute allows a tenant who claims decreased income or increased expenses due to the pandemic is automatically protected against eviction for rent due between March and August 2020. That window is extended to January 2021 for tenants who pay 25% of missed rent payments. Actual ability or inability to pay is irrelevant. In January 2021, California extended the moratorium to June 2021. And in June, the moratorium was extended again, to the end of September 2021.

In addition to a physical invasion takings claim, a claim that the takings are for private benefit, and an alternative Penn Central claim, the complaint asserts a Contracts Clause violation.

Relief sought: a declaration that California's moratoria are "null and void, and of no effect" (alleging that California has deprived the plaintiffs "of the rights, privileges, and immunities secured by the United States Constitution" (the right to just comp and freedom of contract), and "nominal and compensatory damages to individual Plaintiffs" for violation of their rights under section 1983.

So check it out. It isn't one of those massive, pages-long, complex-situation complaints. It won't take too much of your time.

Complaint for Declaratory and Injunctive Relief, Cal. Rental Housing Ass'n v. Newsom, No. 2:21-cv-01394-JAM...

South Carolina: City Reconnecting Stormwater Pipes That Previously Flooded Land Is The "Affirmative, Positive, Aggressive Act" Triggering Inverse

A short one from the South Carolina Supreme Court. In Ray v. City of Rock Hill, No. 28045 (Aug. 4, 2021), the court held that the city's re-connecting its pipe that had previously flooded Ray's property qualified as the "affirmative, positive, aggressive act" required by S.C. law as an essential element of a new inverse condemnation claim.

Short version of the facts. The city ran a stormwater pipe under Ray's property. No record of any easement for the pipe. Ray's property had "a history of sinking and settling[,]" and this went on for many years. Slip op. at 2. Eventually she sued for inverse. The lawsuit alleged that the flooding and damage to her property and home was caused by the deterioration of the city's pipe.

Apparently unrelated to this, at about the time of the filing of the lawsuit, the city began maintenance work on a sewer line. To access the line, it had to sever three nearby stormwater pipes, which happened to stop the flow through the pipe under Ray's land. That stopped the damage to her property caused by the invasion of water. So naturally, Ray asked the city to not reconnect the three pipes. The city did not respond positively, and instead reconnected all three. 

After Ray amended the complaint to allege that the re-connection of the pipes was the trigger to inverse liability, the trial court granted the city summary judgment, concluding that the city hadn't done anything affirmatively and that the re-connection was merely "maintenance." But the court of appeals reversed, concluding that a trial was needed to resolve the factual disagreement about whether what the city did qualified as affirmative conduct. 

The Supreme Court agreed. Whether the city undertook an affirmative act is a question of fact and by the time the case reached the Supreme Court, the city had acknowledged that it severed, and then re-connected the three pipes, and as a result the water flowing under Ray's land stopped. It also acknowledged that "stormwater flow into the Pipe resumed when it reconnected its three pipes to its catch basin[.]" Slip op. at 6. 

The court rejected the city's argument that its refusal to comply with Ray's demand that it not reconnect the pipes was merely a failure to act, and not an affirmative act. Wrong, the court held:

When the City reconnected its three pipes to the catch basin, it directed water into the catch basin and through the Pipe. This is sufficient evidence to overcome summary judgment on the issue of whether the City merely "failed to act" with respect to the water flowing through the Pipe. We also conclude Ray has presented sufficient evidence that the City's reconnection of its three pipes to the catch basin and the resumption of the flow of water through the Pipe caused damage to her property.

Slip op. at 7.

The court distinguished the damage and invasions resulting from earlier flooding that occurred pre-repair. Those damages were not recoverable because Ray knew of the damage as early as 2008, and her original lawsuit wasn't filed until 2012, one year after the three-year statute of limitations had expired. Slip op. at 7 ("Ray conceded this point during oral argument before this Court."). But that didn't prevent her from recovering from damage caused by the new act of the city (re-connecting the pipes, starting the problem all over again). 

File this one under the "you sure you want to do that?" department.

Ray v. City of Rock Hill, No. 28045 (S.C. Aug. 4, 2021)

New Takings Complaint: $26 Billion For CDC's Eviction Moratorium

Programming note: as we noted here, we've recently moved our email subscribers to a new service. If you are already subscribed to our email updates you should not need to do anything, except look for the emails coming from Feedblitz, not Feedburner. If you want to sign up for email updates anew, go here. If you experience technical issues, or receive duplicate email notifications, please let me know.

Now back to your regularly scheduled programming...

Check out this Complaint, filed last week which asks the U.S. Court of Federal Claims to award property owners an unspecified amount (noted as $26 billion in the cover sheet) in just compensation for the taking of the plaintiffs' property by the Center for Disease Control's order temporarily halting residential evictions.

The Complaint alleges a physical invasion taking because it precludes "property owners from excluding [tenants] and leasing the rental homes to rent-paying persons, even as the property owners must continue paying taxes, utility payments, employee salaries, maintenance costs, the cost of capital, and other expenses." Complaint at 10. Alternatively, the property owners allege that the CDC order is an "illegal exaction because the CDC exceeded and contravened its statutory and regulatory authority and as a direct result exacted Plaintiffs' private property and property interests[.]" Id. at 2.

The just compensation sought "includes the amount of rental income Plaintiffs would have received in the absence of the physical occupation and taking or exaction of their property ..." Id.

Stay tuned, we'll follow along as this one progresses.

Complaint, Nat'l Apt. Ass'n v. United States, No. 21-1621 (Fed. Cl. July 27, 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!

Cedar Point Part VI: What Others Are Saying

Talk amongst yourselves.

We've had our say, so in this post -- the sixth and final post in a series of deeper dives about June's U.S. Supreme Court opinion in Cedar Point Nursery v. Hassid , No. 20-107 (June 23, 2021) -- we're linking to what others are saying about the case.

Here are all of the posts in our Cedar Point series:

• Part I: SCOTUS's Strawberry Letter 23 To Property Rights
• Part II: Common Sense (Keep Out) And Common Law (The Right To Exclude)
• Part III: No, Chicken Little, The Sky Isn't Falling
• Part IV: The Other Opinions
  
• Part V: Help Us Help You
• Part VI: What Others Are Saying

And in case you missed the live webcast on Friday, July 16, 2021 that featured expert analysis of the case, please don't miss listening to the recording of ALI-CLE's "Takings and Eminent Domain After Cedar Point: What Practitioners Need to Know."

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(These are not in any special order):

• Cedar Point Nursery: Fighting for Private Property Rights with Pacific Legal Foundation (video from the property owners' counsel) (YouTube)
• Supreme Court's Cedar Point property rights decision protects both sides (lawprof Ilya Somin) (The Hill)
• Big Win for Property Rights (editorial board, Wall St. Journal)
• [podcast] Podcast Episode 69 – Professor Josh Blackman Discusses Cedar Point Nursery (lawprof Josh Blackman) (Clint Schumacher's Eminent Domain Podcast)
• Opinion: The Supreme Court’s conservative majority returns to its passion project (Ruth Marcus, editorial page editor, Washington Post)
• The Supreme Court just handed down disastrous news for unions (Ian Millhiser) (Vox.com)
• Is John Roberts channeling his inner Bob Ellickson? (lawprof Chris Elmendorf) (Twitter)
• Vox: SCOTUS issued "disastrous ... union-busting decision" on takings clause (Ed Morrisey) (Hot Air)
• Quick reactions to the Supreme Court's new Takings Clause blockbuster opinion in Cedar Point Nursery (lawprof Lior Strahilevitz) (Twitter)
• The Supreme Court’s Latest Union-Busting Decision Goes Far Beyond California Farmworkers (Mark Stern) (Slate)
• Is Chief Justice Roberts the Supreme Court's "Property Guy"? (lawprof Josh Blackman) (Volokh Conspiracy)
• Opinion: The Supreme Court’s pro-corporate revolution is accelerating (Paul Waldman) (Washington Post)
• U.S. Supreme Court Is ‘Fertile’ Ground for Property-Rights Group (Jordan Rubin) (BloombergLaw)
• Rory Little on Lange v. CA, Cedar Point Nursery v. Hassid, and Collins v. Yellen (Karina Demirchyan) (Hastings Law)
• The US Supreme Court's Latest Anti-Labor Ruling Goes Far Beyond Farm Workers (Jenny Breen) (Common Dreams)
• Supreme Court Issues Major Property Rights Decision in Favor of Landowners, Confirming that Government-Sanctioned Physical Invasions of Private Property are Categorically Compensable Under the Takings Clause (Bryan Wenter) (Land Use Developments)
• Cedar Point Nursery v. Hassid Quietly Rewrote Four Decades of Takings Clause Doctrine (lawprof Josh Blackman) (Volokh Conspiracy)
• Supreme Court Holds That Regulation Allowing Access to Farmers' Property Is a Per Se Physical Taking (Edward D. Rogers, Michael Sklaroff, and Nathan Farris) (Ballard Spahr)
• SCOTUS' Take on Takings (Brad Kuhn) (Nossaman)
• And Stay Out! Supreme Court Rules Golden State Regulation Giving Unions Access to Private Farmland Is Unconstitutional Taking (National Law Review)
• [podcast] Deep Dive Episode 187 – Courthouse Steps Decision: Cedar Point Nursery v. Hassid (owner's counsel Wen Fa) (Regulatory Transparency Project)
• Supreme Court win for property rights is hardly a loss for the regulatory state (Sam Spiegelman) (the Hill)
• Update On Union Access To Property (Mark Arnold) (Husch Blackwell LLP)
• Supreme Court Tackles "Takings" Question Presented by California Labor Statute (Julie Tappendorf) (Municipal Minute)
• SCOTUS Takings Decision a Huge Victory for Property Owners: California Regulation Requiring Access Is a Taking (Debra Garfinkle, Brad Kuhn) (Nossaman)
• Biggest Supreme Court Win for Property Rights in a Long, Long Time (Ilya Shapiro and Sam Spiegelman) (Cato)
• Property Rights Versus Labor Unions in the Supreme Court (Rob Natelson) (Epoch Times)
• 24 Jun Supreme Court Holds in Favor of Property Owners in Takings Case (Amanda Karras) (IMLA)
• SCOTUS takes 'takings' to a new level in union-busting decision (Hassan Kanu) (Reuters)
• Ideology Shows in Supreme Court Ruling on Union Organizing (Noah Feldman) (Bloomberg)
• Supreme Court Finds Fifth Amendment Taking in State Regulation Granting Access to Private Property (Beveridge & Diamond)
• High Court Limits Labor Union Organizing At Calif. Farms (Law360)

Did we miss any? If so, send 'em our way.

Cedar Point Part V: Help Us Help You

In this post -- the fifth and penultimate post in a series of deeper dives that we're posting about June's U.S. Supreme Court opinion in Cedar Point Nursery v. Hassid, No. 20-107 (June 23, 2021) -- we'll be trying to take some educated guesses about what the decision means for the future.

Here are all of the posts in our Cedar Point series:

• Part I: SCOTUS's Strawberry Letter 23 To Property Rights
• Part II: Common Sense (Keep Out) And Common Law (The Right To Exclude)
• Part III: No, Chicken Little, The Sky Isn't Falling
• Part IV: The Other Opinions
  
• Part V: Help Us Help You
• Part VI: What Others Are Saying

And in case you missed the live webcast on Friday, July 16, 2021 that featured expert analysis of the case, please don't miss listening to the recording of ALI-CLE's "Takings and Eminent Domain After Cedar Point: What Practitioners Need to Know."

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So what to make of Cedar Point beyond its narrowest holding that absent a few exceptional circumstances, any regulation that gives a right of access to someone's land is a "categorical" taking regardless of the duration of the access granted, and that the only issue in these cases is the amount of compensation owed?

One one hand, you might see this case simply and only as clarifying (or sub silentio overruling, take your pick) the physical takings rule of Loretto, which if you were to read that case narrowly limited categorical treatment to "permanent" occupations, and subject less-than-permanent physical access regulations to non-categorical (Penn Central) treatment. Or you might see this as the Court doubling down on the distinction between physical invasions and plain-old regulatory takings. Or maybe an invitation to strike while the property rights iron is hot. 

Our point in this post is to look at these other possible hands. Or at least try and read any tea leaves the majority laid down.

So here are some of the points that get us thinking.

The Property Guy

The biggest point we read between the lines of Chief Justice Roberts' opinion was this: the Chief is solidly the "property guy" on the Court. In addition to Cedar Point, how many of the Court's property or property-related opinions has he authored? Knick. Penn East. Horne II. Murr dissent. Winter. This recent per curiam sure reads a lot like he wrote it, too. Those opinions he didn't author he played a big part in: the fifth vote in Koontz; presumably employing his role as Chief to organize unanimous or nearly unanimous decisions in Arkansas Game, Horne I, Brandt, Hawkes, and Sackett; and joining in very pro-property rights pluralities when there wasn't a majority. (Did we miss any?)

Yes, he was counsel for the government in Tahoe-Sierra (which held that a long-term moratorium on development is not a categorical taking), but that was in his role as advocate. And as we know, a lawyer's position when serving as counsel may not necessarily be the lawyer's own views. We read the Cedar Point majority opinion's nine positive Tahoe-Sierra citations not as a sign that CJ Roberts doesn't understand his his own earlier handiwork, but more as a signal that we shouldn't hold out his role as the advocate in that case as a sign he's a police power hawk or a takings dove. Indeed, if you were to not already know that Tahoe-Sierra was decided against the property owner, the Cedar Point majority opinion would not clue you in to that fact because it cites the case very positively -- you'd think the owner won that one.

We think a more likely signal comes from his time as a clerk for then-Associate Justice Rehnquist, author of the Kaiser Aetna opinion that plays such a large role in the Cedar Point rationale. Rehnquist was also on the unanimous Pruneyard Court -- and if we're reading the timeline correctly, young Mr. Roberts was one of his clerks during consideration of that case. [Barista's edit: lawprof Josh Blackman sent us a note with the correct timeline: "Roberts clerked for Rehnquist starting in OT 1980--a few months after Pruneyard was decided."] We're guessing that he is in sync with Justice Rehnquist's property sensibilities more than his own Tahoe-Sierra advocacy.

As an exercise, you might compare the style of the Kaiser Aetna opinion (Rehnquist) with Cedar Point (Roberts). We get a lot of the same vibe. To us, the opinions are similar enough that they could have been written by the same author if you didn't know better: the centrality of the right to exclude with a nod to local property law, but not a sole reliance on it; owners' reliance interests in property as a set of shared cultural understandings; and the eschewing of an overly technical labeling of these rights. Read them side-by-side and see if you don't agree.

In sum, despite a lot of criticism of the Chief in conservative circles because he goes wobbly on a lot of those issues, there's little question in our mind that he's the solid center of gravity on the Court for property rights. Convince him, and you will very likely carry the day. (Remember that as you frame the issues in your case, brothers and sisters.)

Help Us Help You

That takes us to our second point, which is related.

After a string of love-fest decisions in which the Court issued unanimous or near-unanimous opinions (many think in a reaction to the calls for expansion of the Court), what was the first case in which we might say that the Court broke the string and split along the "usual" conservative/liberal lines and the headlines could tell us about a "sharply divided" Court? That's right, Cedar Point. Do we think it was merely coincidence that a takings case was the one in which the Court's solid public front got put aside (albeit gently - see, e.g., the majority's and dissent's "you the man" nods to each other's analytical chops). No we don't.

Now maybe we're reading too much into the fact that a property rights case was selected as the one where everyone went back to their own hill, but hear us out: we think Cedar Point sends up a clear flag that the majority might not be overly excited about considering many of the headline-grabbing hot-button political and social issues, but may be receptive to more on the property front.

What drives our conclusion?

First, Cedar Point starts off with a strong reaffirmation of the essential nature of property rights. See slip op. at 5 (which cites "the Founders" including John Adams). The Justices might not feel institutionally equipped to resolve politically-charged social issues, but property rights may be a whole different story because property questions are firmly rooted in common law lawyering, a topic that the Justices seem very comfortable speaking with expertise about. Next, the majority continued by with pooh-poohing the core argument against a broader scope of regulatory takings (that any restrictions on property rights that are a result of regulations must be analyzed under Penn Central), and concluded that the result is more important than the method. See slip op. at 7. Finally, the majority shifted the focus when a regulation regulates property's use to the point that it "appropriates" the right to exclude (or other fundamental property right), from whether there's been a taking to the amount of compensation owed, a point the property rights bar has been emphasizing for a long time. See slip op. at 11 ("The duration of an appropriation—just like the size of an appropriation ... bears only on the amount of compensation.").

We're also taking as a good sign that six Justices signed on to the Cedar Point opinion although a couple of them have been property rights ciphers so far. There's no question in our view that Cedar Point takes a bold, confident stance on property rights at a time that the Court and its members are under extreme scrutiny and could just have easily adopted a Tahoe-Sierra-ish analysis of less-than-permanent invasions. But they didn't and instead went big. So even though Cedar Point may be a good example of Chief Justice Roberts' usual incremental approach, we're taking it as a big hint that the Court wouldn't mind the opportunity to look at a lot of takings stuff with fresh eyes. Bring us cases. "Show us the pure joy of the game" (to paraphrase Jerry Maguire). Go big or go home. Help us help you. 

And if we're completely off base about this, we think that if nothing else the solid majority in Cedar Point does offer a lot of intriguing possibilities about takings and property due process cases in the next few years, whichever way they cut.

More than the "Just Compensation" Clause

Next, Cedar Point confirmed for us something we've contended for a long time: that the Fifth Amendment is not just the "Just Compensation" clause, and that declaratory and injunctive relief are available remedies for "takings" issues. In Cedar Point, the property owner did not ask for just compensation, but only "declaratory and injunctive relief prohibiting the Board from enforcing the regulation against them." Slip op. at 3. Just comp may be the usual remedy in these cases, but it isn't the only remedy.

In our thinking, this should spur us all to go back and look at a few issues. First, the jurisdiction of the federal courts to hear takings claims against the federal government, and whether they belong exclusively in the Court of Federal Claims. Second, the same issue with respect to takings claims against state governments in federal court. The real party in interest in Cedar Point, after all, was the State of California, notwithstanding the Eleventh Amendment. And finally, whether more regulation may be subject to takings challenges because the relief sought isn't limited to a massive just compensation judgment (thus taking out of contention many cases that may not present be ones the owner can convince a lawyer to undertake), but includes a remedy that puts the onus where it should be: on the government asking itself not simply whether a regulation is a good thing, but thinking about whether it wants to pay for it. 

State law isn't the be-all-end-all of "property"

In light of Cedar Point's "common sense" and "intuitive" approach to defining private property in the Fifth and Fourteenth Amendments and its re-emphasis of background principles of nuisance law, we think that there's going to be a renewed focus on what it means to own property, and more fundamentally, where that debate takes place (in state courts, state legislatures, or elsewhere). Cedar Point rejected the argument that state law alone defines "property," and can with the stroke of a pen "manipulate" certain concepts inherent in the notion of the Court’s conception of what it means to own private property.

And don't get too hung up on labels the Court cautioned, and we think this governs not only "regulatory takings," but the definition of property itself. See slip op. at 6 ("But that label can mislead."). Formalities may count for a lot in the law (and in property law specifically), but just as we don't require livery of seisin in order to convey real property any longer, the Court isn't going to be hidebound to how a state defines or redefines property if doing so undermines traditional "sticks" the majority see as fundamental.

Next up, Part VI (the final post in this series), in which we'll check out what others are saying about the case, and post up some of the many commentaries that have been written about Cedar Point.

Cedar Point Nursery v. Hassid, No. 20-107 (U.S. June 23, 2021)

New L Rev Article: "Floods, Fires, and Inverse Condemnation"

Here's what we're reading today (inter alia): Walter W. Heiser, Floods, Fires, and Inverse Condemnation, 29 N.Y.U. Envtl. L. J. 1 (2021).

From the Introduction:

This Article examines the proper application of the doctrine of inverse condemnation in two important areas: flood damage to private property caused by a public improvement (e.g., a flood control, storm drain, or sewer project), and wildfire damage to private property caused by a project (e.g., electricity or telephone lines) undertaken by either a public or privately-owned utility. Under the doctrine of inverse condemnation, a plaintiff may recover for a physical injury to private property caused by a public improvement as deliberately designed, constructed, or maintained.

....

How courts define the standard of liability in inverse condemnation cases will become increasingly important in both the flooding and wildfire contexts. The continuing nature of climate States and more wildfires in others. This Article examines issues concerning the standard of liability in both contexts with the goal of determining their proper resolution by the courts. While the analysis will often focus on California authorities, it draws upon sources from other jurisdictions as relevant.

We recommend you check it out.

Cedar Point Part IV: The Other Opinions

In this post -- the fourth in a series of deeper dives that we're posting about June's U.S. Supreme Court opinion in Cedar Point Nursery v. Hassid, No. 20-107 (June 23, 2021) -- we'll be discussing the two separate opinions, Justice Kavanaugh's concurrence, and the Justice Breyer-authored dissent.

Here are all of the posts in our Cedar Point series:

• Part I: SCOTUS's Strawberry Letter 23 To Property Rights
• Part II: Common Sense (Keep Out) And Common Law (The Right To Exclude)
• Part III: No, Chicken Little, The Sky Isn't Falling
• Part IV: The Other Opinions
  
• Part V: Help Us Help You
• Part VI: What Others Are Saying

And in case you missed the live webcast on Friday, July 16, 2021 that featured expert analysis of the case, please don't miss listening to the recording of ALI-CLE's "Takings and Eminent Domain After Cedar Point: What Practitioners Need to Know."

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Justice Kavanaugh: Only Truly Necessary Intrusions Allowed (And This One Wasn't)

Along with joining the majority's opinion in full, Justice Kavanaugh wrote a short concurring opinion to explain why an existing precedent -- about which he pointedly asked at oral argument -- also supported the outcome.

The case: NLRB v. Babcock & Wilcox, Co., 351 U.S. 105 (1956). This is the one which got several people asking "hasn't the Court already ruled that a union-access easement is constitutional?" That case upheld the federal National Labor Relations Act's requirement that certain employers open their properties to union organizers. Sounds like Cedar Point, no? 

Yes, but you have to read that decision carefully, Justice Kavanaugh cautioned, because the Court there avoided the takings question by interpreting the NLRB's requirement narrowly. The canon of construction that counsels to avoid reading statutes to create constitutional problems applied, and resulted in the Court upholding the requirement by avoiding the takings problem lurking in the statute:

Against the backdrop of the Constitution's strong protection of property rights, the court interpreted the Act to afford access to union organizers only when "needed," ibid. -- that is, when the employees live on company property and union organizers have no other reasonable means of communicating wit the employees.

Concurring op. at 2.

This looks like a form of necessity referenced in the majority opinion, although here too, some caution is in order. As we noted in this piece, necessity should only be an exception to the general rule of compensation when the action undertaken by the government really is among the least imposing alternatives to avoid a genuinely drastic result. Babcock certainly can be read through that lens, as Justice Kavanaugh pointed out when he noted that absent entry onto private property, there'd be no other way for the government to ensure that employees had access to information about unions (other than, you know, taking an access easement by eminent domain).

In Babcock, the workers apparently could not be accessed readily off-premises, because they lived on the employer's property. In Cedar Point by contrast, the workers did not live on the nursery's property, and union organizers were free to proselytize to the workers elsewhere. Yes, private property might be the most convenient venue for such activities, but that's a pretty far cry from being necessary due to no other alternatives, Justice Kavanaugh argued.

The Three-Justice Dissent: The Appropriations Clause

Justice Breyer, joined by Justices Sotomayor and Kagan -- in what the majority opinion made a point to call a "thoughtful opinion" -- dissented.

Their basic point was what you would expect -- regulations that impose a temporary or non-permanent physical invasion are not treated categorically, but instead are analyzed as plain old regulatory takings under Penn Central's three-part ad hoc test. What is interesting is the way the dissenters got there. 

They first characterized the Takings Clause as the Appropriations Clause:

The question before us is how to characterize this regulation for the purpose of the Constitution's Takings Clause.

Does the regulation physically appropriate the employer's property? If so, there is no need to look further; the Government must pay the employers "just compensation."

Dissent at 1. (Accused the majority of recasting the Takings Clause as the Appropriations Clause might be more accurate.)

The Regulatory "Hook"

That phrasing of the question ("does the regulation physically appropriate the employer's property?") telegraphed the dissenters' analysis in a couple of ways.

First, it set up a truism: the applicable test is the default "regulatory takings" analysis because these physical invasions are required by regulations (in contrast, we suppose, to invasions such as flooding). And since these are "regulatory takings" shouldn't the default Penn Central test apply? But that seems like a straw argument. After all, aren't all of these types of invasions the result of regulations, and therefore a species of "regulatory takings?" Nearly any invasion that is not the result of an affirmative exercise of eminent domain can be classified as a "regulatory" taking because it is incident to an exercise of some government regulatory power. Most non-eminent domain physical and categorical takings cases fall in this category: Loretto (police power), Kaiser Aetna (commerce power), Nollan (police power), Lucas (police power), etc., etc. But the regulatory enablement of the invasion has never alone mandated we analyze it under Penn Central simply because its a "regulatory" taking. ​

Yes, you could look at every regulation-enabled invasion through a Penn Central lens (as we did as an academic exercise here), with physical invasions being analyzed under the "character of the government action" factor, with invasions being so contrary to common notions of what it means to own property (there's that "keep out" vibe again) that both the magnitude (Loretto) and the duration (Cedar Point) of the invasion are irrelevant, and looking at the other two Penn Central factors is unnecessary. Remember that the central question in regulatory takings is "how much does this look like a classic exercise of eminent domain" --

Although our regulatory takings jurisprudence cannot be characterized as unified, these three inquiries (reflected in Loretto, Lucas, and Penn Central) share a common touchstone. Each aims to identify regulatory actions that are functionally equivalent to the classic taking in which government directly appropriates private property or ousts the owner from his domain. Accordingly, each of these tests focuses directly upon the severity of the burden that government imposes upon private property rights.

Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 539 (2005). Thus, it seems you get to the same result whether or not you treat the invasion as the deciding Penn Central factor or simply as a separate species of taking, and the debate may be a mostly-academic exercise because the Cedar Point invasion looks an awful lot like an exercise of eminent domain from the owner's point of view. In short, in our view the dissent's building its analysis on the framing of the case as a "regulatory taking" doesn't get it very far, and avoids the central question: what is the dissent's concept of "property?"

The majority pretty clearly told us what they think it means to own property, or at least a big part of it. This is the majority's "intuitive" and "common sense" approach to defining private property under the Fifth and Fourteenth Amendments. Our read of the dissent, by contrast, is that it talks all around the issue, but never explicitly lays out its property theory.

This leads into what we think is the second dissent "telegraph" -- the way it employed semantics to make its main point. The dissent asserted, "[t]he Court holds that the provision's 'access to organizers' requirement amounts to a physical appropriation of property. In its view, virtually every government-authored invasion is an 'appropriation.'" Dissent at 2. But this regulation does no such thing, they argued, it merely regulates the right to exclude because the permitted invasion is not a permanent occupation. Having set up another straw argument (appropriations are permanent, anything less is a regulation), the dissent asserted that a regulation requiring an owner open their property to others does not result in an "appropriation" of the right to exclude, merely a regulatory limitation of that right.

The dissent defended its "characterization" in several ways:

• California's regulations do not require agricultural property owners to convey an easement to the government or to the public. Whatever the regulation imposed, it was not "any traditional property interest in land." Dissent at 4. It may be a winged waterfowl that makes quacking noises when you call out "Donald" or "Daffy," but it's not really, you know, a duck.
• Second, the regulation doesn't literally transfer the nursery's right to exclude to the union organizers. Dissent at 5 ("It is important to understand, however, that technically speaking, the majority is wrong. The regulation does not appropriate anything. It does not take from the owners a right to invade (whatever that might mean). It does not give the union organizations the right to exclude anyone. It does not give the government the right to exclude anyone."). This to us illustrates the sleight-of-word that the dissenters are playing, because if the regulation indeed actually appropriated and transferred a traditional interest in property from the nursery to the union organizations, we wouldn't be having this discussion, would we? We'd be talking eminent domain and compensation.
• Ah, but we're not saying that California's regulations cannot be a taking, the dissent argued, we're only saying that the regs should not be automatically considered a taking. Dissent at 5 ("The issue is whether a regulation that temporarily limits an owner's right to exclude others from property automatically amounts to a Fifth Amendment taking."). Prove up the other two Penn Central factors, and you get your compensation!

Saving Loretto By Blowing Up Loretto

In what may be the dissent's strongest point (the majority conceded the "point is well taken"), it noted that in Loretto, the Court concluded that "[n]ot every physical invasion is a taking." Dissent at 6 (citing Loretto, 458 U.S. at 435 n.12). Indeed, the occupation in Loretto was more-or-less permanent (or, more accurately indefinite -- since very little it truly permanent), and the consequences of permanent action were the only things we were worried about in that case. Read the dissent pages 6-7 for why the dissenters think that permanent occupations always undermine the concept of private property, while less-than-permanent occupations do not. For example, a permanent occupation prevents the owner from using that space, controlling it, and wipes out every right associated with that space. As the dissent quoted Loretto, "a permanent physical occupation 'is perhaps the most serious form of invasion of an owner's property interests.'" Dissent at 7 (quoting Loretto, 458 U.S. at 435).

Cedar Point does not disturb that reasoning. But whether you want to say that the majority sub silentio overruled Loretto or merely clarified its dicta or cleaned up the misunderstandings it created, did anyone accurately predict that the Court would have to burn a common reading of the Loretto opinion in order to save the common reading of the Loretto rule?

Pruneyard Distinguished

The dissenters pointed to Pruneyard, asserting that case "fits this case almost perfectly." Dissent at 8. The invasion was not round-the-clock, was limited in purpose, and was subject to government regulation on time, place, manner. In Cedar Point, the scope of entry was narrower: instead of the general public, the regulation required only that union organizers are allowed. Ah hah, if that's the case, we're in "regulatory-balancing" territory, the dissenters argued. Dissent at 9.

What we thinks that overlooks is the critical fact in Pruneyard: the shopping center owner had already thrown open its doors to the public, inviting everyone to come on in to patronize Pruneyard's tenants. Having acknowledged that it had invited the public onto its premises, the shopping center had not shown that allowing handbilling would interfere with whatever right to exclude remained. Pruneyard, 447 U.S. at 77 ("The PruneYard is open to the public for the purpose of encouraging the patronizing of its commercial establishments.”). In short, the shopping center owner "failed to demonstrate that the ‘right to exclude others’ is so essential to the use or economic value of their property that the state-authorized limitation of it amounted to a ‘taking.'"  Id. at 84. Here, Cedar Point Nursery had not thrown its doors open to the public, only what we might call "invitees" -- employees there for a limited time, and limited purpose, and the property owner's complaint alleged that the union's intrusions interfered with the owner's quiet enjoyment.

We Want to Regulate, But Can't Afford to Pay

Next, the dissenters employed a revised form of the "sky will fall" argument that is frequently employed to object to takings argument. Here, the dissent didn't so much focus on "this will tie government's hands by making every intrusion a taking" (the most-oft deployed argument), but one that isn't more compelling, but at least is more straightforward: "And it is impractical to compensate every property owner for any brief use of their land." Dissent at 12. In other words, we can't afford to pay, you know, for everything we take. The dissent employs the second most famous Justice Holmes quote from Pennsylvania Coal: "[a]s we have frequently said, '[g]overnment could hardly go on if to some extent values incident to property could not be diminished without paying for every such change in the general law.'" Dissent at 12 (quoting Pennsylvania Coal, 260 U.S. at 413). That seems to be mixing the apples of invasion-takings with the oranges of regulatory takings. The nursery isn't only claiming that the impact of California's regulations incidentally diminish the value of its property, but the main concern asserted is an interference with an essential attribute of property.

Who Keeps The Gates?

And here is where we get to the essence of the disagreement between the majority and the dissent (hint: it's not about the metaphysical distinction between permanent or temporary). Their fundamentally different world views of what it means to possess private property. As we noted here, the majority opinion is based on a view of property that maybe comes more from the heart, than from the head. Private property means "keep out." Or maybe "if you can't say 'keep out,' you really don't own 'private' property." More Locke (or Grotius), less Hobbes.

The dissent didn't see it that way, at least as we read between the lines. Your right to say "keep out" only applies to keeping everyone out, always. And we don't live in a world where you can do that. After all, "[w]e live together in communities." Dissent at 12. Rather, we live in a world where Leviathan, not private owners, determines who can come and go. All in the name of the public good, naturally. See, e.g., Dissent at 12-13 (listing regulations that require access to private property for food safety inspections, mobilehome construction inspections, coastal wetland inspections, family care inspections, school inspections, elderly care facility inspections, waste management facility inspections, and "owl surveys"). All of this based on the "regulatory" hook we mentioned earlier, without which none of this would be okay. After all, if government officials simply barged in someone's property without regulatory authorization, unannounced at 5:00 a.m. and stayed for 3 hours, 120 days per year, we'd hope dissenters would agree that this would be categorically contrary to the notion of private property.

The dissent wrapped up with a final complaint, based in procedure. In its complaint, the nursery sought only declaratory and injunctive relief, not just compensation. Dissent at 16. But as we've long suggested, even though compensation is the usual remedy in "takings" cases, it is not the exclusive remedy.

Next up: Part V, where we'll try to read between the lines of the majority opinion and have some thoughts on what this all might mean for future cases.

Cedar Point Nursery v. Hassid, No. 20-107 (U.S. June 23, 2021)

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.

Cedar Point Part III: No, Chicken Little, The Sky Isn't Falling

In this post -- the third in a series of deeper dives that we'll be posting about last week's U.S. Supreme Court opinion in Cedar Point Nursery v. Hassid, No. 20-107 (June 23, 2021) -- we'll be discussing whether the "right to exclude" is absolute, what exceptions the Court laid out, and how it responded to the arguments that the ruling will bring the system crashing down.

Here are all of the posts in our Cedar Point series:

• Part I: SCOTUS's Strawberry Letter 23 To Property Rights
• Part II: Common Sense (Keep Out) And Common Law (The Right To Exclude)
• Part III: No, Chicken Little, The Sky Isn't Falling
• Part IV: The Other Opinions
  
• Part V: Help Us Help You
• Part VI: What Others Are Saying

And in case you missed the live webcast on Friday, July 16, 2021 that featured expert analysis of the case, please don't miss listening to the recording of ALI-CLE's "Takings and Eminent Domain After Cedar Point: What Practitioners Need to Know."

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Last we left it, we had finished up reviewing the majority opinion's emphasis on the fundamental-ness of the right to exclude, a revisit (finally!) to the Pruneyard case, and figured out what factors are not going to get the Court to apply Penn Central to a physical invasion (it's not permanence of the invasion or occupation, or the number or classification of people or things doing the invading, or whether the regulation or state law describes the required access as an "easement").

So does that mean the dissenters and commentators have a point when they claimed that the Court's ruling that all physical invasions are presumed to be categorical takings is going to result in dogs and cats living together ... mass hysteria and everyday things like your postal carrier dropping off mail at your house being deemed a taking?

Well no, and the majority addressed those concerns -- often raised in opposition to takings claims, see, e.g., Justice Brennan, dissenting in San Diego Gas & Elec., where he noted, "After all, a policeman must know the Constitution, then why not a planner? In any event, one may wonder as an empirical matter whether the threat of just compensation will greatly impede the efforts of planners." -- and laid out three general exceptions to the categorical presumption:

• some entries are takings, others are torts (slip op. at 17-18)
• some entries are not takings, as long as they are "consistent with longstanding background restrictions on property rights (Lucas) (slip op. at 18-19)
• some entries may be exacted by the government as a condition of government benefits (slip op. at 19-20)

Let's take a look at each of these in turn.

Takings vs. Torts

The majority dismissed minor intrusions, concluding that things like "[i]solated physical invasions, not undertaken pursuant to a granted right of access" should be analyzed under tort law, not as takings. One-time, casual, unofficial intrusions are not going to get you to the promised land of takings. The city's Public Works truck parking on your lawn one time isn't going to require just compensation. Okay, those kind of things are the easy cases when viewed as single events. But the more they occur, and the more severe the intrusion, you depart torty territory and head for takingsville. Slip op. at 17-18 (“[W]hile a single act may not be enough, a continuance of them in sufficient number and for a sufficient time may prove [the intent to take property]. Every successive trespass adds to the force of the evidence.”).

Thus, even though the Court did not apply a categorical takings approach to temporary government-caused flooding in Arkansas Game, the Court still approached it as a taking, not a tort, and that distinction was the only question the Court addressed in that case. Cedar Point clarified that Arkansas Game's strict holding that "government-induced flooding temporary in duration gains no automatic exemption from Takings Clause inspection" simply confirmed that "temporary" isn't an automatic get-out-of-jail-free card for a physical invasion, and expressly did not address the question whether temporary invasion takings are subject to categorical treatment.

In his fantastic law review article analyzing Arkansas Game, our colleague Brian Hodges presaged the analysis in Cedar Point, when he wrote that "[t]here is real danger that the Supreme Court’s overview in Arkansas Game & Fish Commission v. United States of various takings tests in which questions of duration may be relevant will be read as establishing a new, multi-factor test applicable to temporary physical takings." See Hodges, Will Arkansas Game & Fish Commission v. United States Provide a Permanent Fix for Temporary Takings?, 41 B.C. Envtl. Aff. L. Rev. 365, 385 (2014). As Cedar Point now tells us, no Penn Central style approach.

One caution: the tort/takings distinction isn't as clear cut as the Cedar Point opinion makes out. For example, what about stuff like flooding where government action or inaction is the cause of all or part of the invasion? Should these cases be examined under a tort or takings lens? The lower courts are not settled on this issue, with some, like the Federal Circuit, the Fourth Circuit, and the Montana Supreme Court thinking these are just torts, where the issue is whether the damage to property was foreseeable and whether the sovereign has waived immunity, while others are not so limited in their approach and look at it as a self-executing claim for just compensation. But, the Cedar Point majority cautioned, you should instead look at causation, not foreseeability (an approach consistent with the takings lens some lower courts look at these situations through).

Prediction: the tort vs. taking sparring match is not yet over.

Background Principles

Next the Court noted that if an invasion of property is part and parcel of "longstanding background restrictions on property rights," there's no categorical taking. Slip op. at 18. What can we say about the Lucas exception, except that we think it is one of the most overbroad-as-applied concepts, and gets stretched way beyond the bounds intended by the Lucas case itself.

First, think nuisance prevention. Now that's a background principle of property law that the Court can wrap its head around. You can't make a noxious use of your property so there's no taking when a regulation merely codifies nuisance-prevention. Slip op. at 18. Second, think what the majority calls "privileges to access private property." Slip op. at 19. Things that fall under the umbrella of necessity (as lawprof Shelley Saxer recently wrote about). Think your letter carrier and constable, for example (unless they are blowing up your house, that is; in that case no problem at least to the Tenth Circuit).  

The Cedar Point opinion's reference to background principles as a limitation on categorical takings must be read in light of the opinion's earlier references to the right to exclude as one of those "fundamental" rights that cannot be casually or easily tweaked by state legislatures and courts to shape state property law to avoid the Fifth and Fourteenth Amendment's compensation requirements. Cedar Point does suggest that a state's ability to redefine background principles to avoid takings has its limits on those sticks the court deems fundamental.

By "fundamental" (also referred to as "core") property rights, we're talking about aspects of property such as interest following principal, obtaining ownership of accretion, the ability to transfer property, and making reasonable use and development of land. And, of course, the right to exclude others. When these core rights are threatened, the Court has had little difficulty finding them to be fundamental property rights that transcend a state’s ability to redefine them by regulating them out of existence without just compensation.

Does Cedar Point's reemphasis of “background principles” continue to insulate state legislatures and courts from federal takings jeopardy when they try and bake in a background principle into a change in property law? We don't think so because Cedar Point rejected the argument that state law alone defines “property,” and with the stroke of a pen—whether by amending a state's positive law, or by changing a state's common law—can “manipulate” certain concepts inherent in the notion of the Court’s conception of what it means to own property. As we noted earlier, the Court noted that this conclusion is an “intuitive” one, the product of “common sense” as much as Blackstone. This reemphasized Justice Marshall’s concurring opinion in Pruneyard, which asserted that “serious constitutional questions” would result if the “legislature attempted to abolish certain categories of common-law rights in some general way,” and that “’core’ common-law rights, including rights against trespass,” cannot simply be abandoned.

Prediction: if that right/stick you claim was taken is one that looks like what the common folks think of when they think "property," you're going to do a lot better on the takings front.

Exacted Access

Finally, the Cedar Point opinion ventured into exactions territory:

Third, the government may require property owners to cede a right of access as a condition of receiving certain benefits, without causing a taking.

Slip op. at 19. This covers things like "health and safety inspection regimes." Id. So what you are saying, Court, is that even though the government can't straight-up require access to property without running afoul of the Takings Clause, it can adopt regimes where, in return for a permit, the government can ask the property owner to surrender the absolute right to exclude? Kind of. Like the background principles exception, we caution against reading this one too broadly.

First, the Court noted that this was for government "benefits." Exercising your fundamental or core property rights are not government "benefits," and thus the Nollan/Dolan/Koontz (your money or your life) unconstitutional conditions doctrines are a formidable bulwark against overactive leveraging of regulatory authority in those situations.

Take, for example, Kaiser Aetna, in which the Court rejected the government's argument that by breaking through the "existing barrier beach" and connecting the dredged Marina to the Pacific Ocean, the owner had thrown open the doors to the waterway and abandoned its right to exclude, much as the shopping center owner in Pruneyard had. As the Court put it:

The Government contends that as a result of one of these improvements, the pond’s connection to the navigable water in a manner approved by the Corps of Engineers, the owner has somehow lost one of the most essential sticks in the bundle of rights that are commonly characterized as property—the right to exclude others.

In follow-on dicta, the Court foreshadowed Nollan, when it noted that "[w]e have not the slightest doubt that the Government could have refused to allow such dredging on the ground that it would have impaired navigation in the bay, or could have conditioned its approval of the dredging on petitioners’ agreement to comply with various measures that it deemed appropriate for the promotion of navigation." But critically, the Court also noted that the right to exclude was not one of those things that an owner can be asked to surrender, at least without compensation:

[W]what petitioners now have is a body of water that was private property under Hawaiian law, linked to navigable water by a channel dredged by them with the consent of the Government. While the consent of individual officials representing the United States cannot “estop” the United States, it can lead to the fruition of a number of expectancies embodied in the concept of “property”—expectancies that, if sufficiently important, the Government must condemn and pay for before it takes over the management of the landowner's property. In this case, we hold that the “right to exclude,” so universally held to be a fundamental element of the property right, falls within this category of interests that the Government cannot take without compensation.

Prediction: in spite of the Court saying in essence, "don't get too carried away with this exaction stuff, governments," we'll probably see a lot of lower court developments in this area.

Wrapping Up

So what to make of these "exceptions." Unlike some others, they don't seem to us to be ones where they will swallow up the main rule. The majority opinion ended by pooh-poohing the dissent's view of sky now set to fall:

None of these considerations undermine our determination that the access regulation here gives rise to a per se physical taking. Unlike a mere trespass, the regulation grants a formal entitlement to physically invade the growers’ land. Unlike a law enforcement search, no traditional background principle of property law requires the growers to admit union organizers onto their premises. And unlike standard health and safety inspections, the access regulation is not germane to any benefit provided to agricultural employers or any risk posed to the public. See Horne, 576 U. S., at 366 (“basic and familiar uses of property” are not a special benefit that “the Government may hold hostage, to be ransomed by the waiver of constitutional protection”). The access regulation amounts to simple appropriation of private property.

Slip op. at 20.

So, fellow dirt lawyers, put on your intuitive, common sense hats and strap in: get ready to try and figure out the nature of fundamental, core property rights. What it means to "own" something. That, in our view, is where the action is going to be.

Stay tuned for Part IV, where we'll examine the concurring opinion of Justice Kavanaugh, and the dissent authored by Justice Breyer.

Cedar Point Nursery v. Hassid, No. 20-107 (U.S. June 23, 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. 

Another SCOTUS Property Rights Win, This Time On Williamson County's "Final Decision" Requirement

Another day, another property rights decision from SCOTUS. This time, the unanimous per curiam opinion in a case we've been following, Pakdel v. City & County of San Francisco, No. 20-1212 (June 28, 2021).

[Disclosure: our PLF colleague Jeff McCoy is lead counsel on this case, and we pitched in with help on the petition and related.]

Because we're directly involved in this one, we're not going to take a deep dive analysis. But the opinion is short, and the result clear: grant, vacate, remand, with instructions:

On remand, the Ninth Circuit may give further consideration to these claims in light of our recent decision in Cedar Point Nursery v. Hassid, ante, p. ___.

Slip op. at 3, n.*.

The Pakdels sued San Francisco for a regulatory taking because of the city's requirement that as a condition of converting a tenancy-in-common to a condominium, the owners must first offer any tenant a lifetime lease. The Pakdels twice requested exemptions from the lifetime lease requirement, but the city denied both requests. That sounds like a "final decision" that qualifies under Williamson County, no? After all, the reviewing court knows exactly what uses the city is allowing or requiring, and that is the whole point of the final decision requirement. 

No, held the panel, it turned out that the Pakdels had "Committed a procedural default during the administrative process" and this meant that not only was their claim not ripe for not obtaining a final decision from the city, their claim could never become ripe because it was too late in the administrative process to "un-default" the default.

If that strikes you as weird, you are not alone. Not only did Judge Bea dissent from the panel decision, nine judges dissented from the denial of the en banc petition. The dissenters concluded that this isn't really a final decision requirement, but rather a way of backing into an administrative exhaustion requirement, something the Supreme Court has long rejected in section 1983 cases, and which the Williamson County final decision requirement doesn't really address. The dissenters concluded that the owners' failure to fulfill administrative requirements "is an exhaustion requirement pure and simple[.]" Dissent at 10. It's one thing to say they didn't go through the admin process, another to say the city hasn't reached a final decision about what they can do with their property.

Looks like the entire Supreme Court agreed:

But, contrary to the Ninth Circuit’s view, administrative missteps do not defeat ripeness once the government has adopted its final position. See Williamson County, 473 U. S., at 192–193 (distinguishing its “finality requirement” from traditional administrative “exhaust[ion]”). It may very well be, as Judge Bea observed, that misconduct during the administrative process is relevant to “evaluating the merits of the . . . clai[m]” or the measure of damages. 952 F. 3d, at 1170, n. 2 (dissenting opinion); cf. Palazzolo, 533 U. S., at 625. For the limited purpose of ripeness, however, ordinary finality is sufficient.

. . .

Given that the Fifth Amendment enjoys “full-fledged constitutional status,” the Ninth Circuit had no basis to relegate petitioners’ claim “‘to the status of a poor relation’ among the provisions of the Bill of Rights.” Knick, 588 U. S., at ___ (slip op., at 6).

Slip op. at 7.

Pakdel v. City & County of San Francisco, No. 20-1212 (U.S. June 28, 2021) (per curiam)

Cedar Point Part II: Common Sense (Keep Out) And Common Law (The Right To Exclude)

In this post -- the second in a series of deeper dives that we're posting about last week's U.S. Supreme Court opinion in Cedar Point Nursery v. Hassid, No. 20-107 (June 23, 2021) -- we'll be covering more on the "right to exclude," how the Court treated our old frenemy Pruneyard, and how the majority dealt with that case's holding that the California Supreme Court's rule that shopping center owners must allow use of their properties as forums for public speech was not a judicial taking.

Here are all of the posts in our Cedar Point series:

• Part I: SCOTUS's Strawberry Letter 23 To Property Rights
• Part II: Common Sense (Keep Out) And Common Law (The Right To Exclude)
• Part III: No, Chicken Little, The Sky Isn't Falling
• Part IV: The Other Opinions
  
• Part V: Help Us Help You
• Part VI: What Others Are Saying

And in case you missed the live webcast on Friday, July 16, 2021 that featured expert analysis of the case, please don't miss listening to the recording of ALI-CLE's "Takings and Eminent Domain After Cedar Point: What Practitioners Need to Know."

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Last we left it, the Cedar Point majority (Roberts, CJ, joined by Justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett) had distinguished regulations that require or result in physical invasions of private property from regulations that otherwise "restrict an owner's ability to use his own property." Slip op. at 6. A majority of the latter cases are analyzed under Penn Central (or, in cases where the regulation results in a significant diminution of beneficial use or value, under Lucas), while the former, the majority concluded, result in a categorical obligation to compensate without balancing the Penn Central factors:

The regulation grants union organizers a right to physically enter and occupy the growers’ land for three hours per day, 120 days per year. Rather than restraining the growers’ use of their own property, the regulation appropriates for the enjoyment of third parties the owners’ right to exclude.

Slip op. at 7.

In the core of the opinion, the Court rejected the argument (based on language in Loretto) that categorical treatment is only appropriate for "permanent" invasions, and anything less than a 24/7/365 intrusion is simply a regulation on use, meaning the invasion is merely one of the Penn Central factors to consider. Not so, held the Court, infringing on the right to exclude inflicts a special form of constitutional wrong, and a “different standard applies” to analysis of any regulation that allows a physical invasion, than to other regulations that merely regulate use.

Leaning heavily on Kaiser Aetna's view of the right to exclude as the stick in the property rights bundle "universally held the be a fundamental element of the property right" and "one of the most essential sticks,” the Court held that physical invasions at the invitation of the government undermine the "central importance” of property's exclusive use. See slip op. at 7-8 (citing Thomas W. Merrill, Property and the Right to Exclude, 77 Neb. L. Rev. 730 (1998) (noting the right to exclude is the “sine qua non” of property)). [Barista's note: although not cited in the opinion, you may also want to read Professor Merrill's follow up, "Property and the Right to Exclude II."] The Court called this an "intuitive approach" based as much on "common sense" as precedent. Slip op. at 10. In short, if you don't have the ability to control who can come on your property -- and the law backing you up -- you don't really possess what most folks would think is "property," do you?

The Court addressed the "permanent" language in Loretto and clarified that when it used the phrase there, it was being more descriptive than normative, because the occupation by the cable TV box in that case was indeed "permanent" (even though in reality, very little is really permanent, as our cert stage amicus brief points out). But permanent occupations didn't close out the field of per se takings, the Cedar Point majority clarified, it merely set the ceiling. Intrusions of a lesser duration are also categorical takings. If you took us at our word in Loretto that "permanent" was a hard-and-fast requirement for categorical treatment, you apparently missed Nollan where were told you that wasn't really the rule:

To be sure, Loretto emphasized the heightened concerns associated with “[t]he permanence and absolute exclusivity of a physical occupation” in contrast to “temporary limitations on the right to exclude,” and stated that “[n]ot every physical invasion is a taking.” 458 U. S., at 435, n. 12; see also id., at 432–435. The latter point is well taken, as we will explain. But Nollan clarified that appropriation of a right to physically invade property may constitute a taking “even though no particular individual is permitted to station himself permanently upon the premises.” 483 U. S., at 832.

Slip op. at 11.

Did anyone accurately predict that the Court would have
to burn the Loretto opinion in order to save the Loretto rule?

So "permanence," vel non, is not where the line is. Nor are the purpose or scope of the the access regulation particularly relevant. See slip op. at 12 (rejecting the Board's argument that California's regulations are more limited than the easement in Nollan because they are designed only to allow a limited class of union organizers and not the general public to access property). That does not change the essential character of the regulation from one requiring access to one regulating use. The Cedar Point opinion reemphasized the nature of the imposition: 3 hours per day, up to 120 days per year, with the union organizers in the event that triggered the lawsuit showing up unannounced at 5am.

Nor is the label put on the access terribly important. The Court rejected the argument that California's regulation does not impose an actual easement because it is neither labeled an easement nor has all of the usual attributes of an easement (a burden on a specific parcel, is not recordable, for example). Slip op. at 12-13. Yes, state law is the source of most of the sticks in property, but (a) California law otherwise would recognize Cedar Point's right to control who comes onto its property, and (2) most importantly, state law has never been the be-all-end-all of what counts as "property" under the U.S. Constitution.

In that regard, the Court has traditionally been most protective of the right to exclude (and a few other sticks), and it is one of the areas in which the Court has exhibited some “anti-federalism” leanings—by concluding that there are certain "fundamental" or "core" notions of private property in which state law may not intrude, even if state law for the most part defines and shapes property law.

Justice Thurgood Marshall said it best in Pruneyard Shopping Center v. Robins, 447 U.S. 74 (1980). where the Court considered whether a shopping center open to the public was a forum for public speech. The California Supreme Court had expressly changed its prior view of the California Constitution’s free speech provision, overruled an earlier decision holding that it did not protect speech on shopping center property, and held that shopping centers therefore were fora for public speech. The shopping center owner appealed (yes, appealed) to the U.S. Supreme Court, asserting what later became known as a judicial taking: the owner argued that when the California Supreme Court changed its speech jurisprudence to allow a physical invasion of its property by handbillers the owner wished to exclude, a taking resulted.

The U.S. Supreme Court held that the California Supreme Court’s decision was not a taking, even though the California court acknowledged it had changed California law. The change in law did not interfere with the shopping center owner’s right to exclude because it had voluntarily opened its property to the public for shopping for the owner’s commercial gain, it thus possessed only a limited right to exclude; the shopping center failed to demonstrate that allowing both handbillers and shoppers would interfere with whatever right to exclude remained. Having invited the public in to shop, the owner could not be heard to complain that others entered as well. In short, the shopping center owner “failed to demonstrate that the ‘right to exclude others’ is so essential to the use or economic value of their property that the state-authorized limitation of it amounted to a ‘taking.’” Pruneyard, 447 U.S. at 84. Despite that holding, however, the Justices did not seem at all bothered by the notion that the takings doctrine might require them to make qualitative judgments about state property law.

Justice Marshall concurred in a separate opinion setting forth his view that property has a “normative dimension” which the U.S. Constitution protects from state court redefinition:

I do not understand the Court to suggest that rights of property are to be defined solely by state law, or that there is no federal constitutional barrier to the abrogation of common law rights by Congress or a state government. The constitutional terms “life, liberty, and property” do not derive their meaning solely from the provisions of positive law. They have a normative dimension as well, establishing a sphere of private autonomy which government is bound to respect.

Id. at 93 (Marshall, J., concurring). Justice Marshall continued:

Quite serious constitutional questions might be raised if a legislature attempted to abolish certain categories of common-law rights in some general way. Indeed, our cases demonstrate that there are limits on governmental authority to abolish “core” common-law rights, including rights against trespass, at least without a compelling showing of necessity or a provision for a reasonable alternative remedy.

Id. at 93–94 (Marshall, J., concurring). Justice Marshall noted that in Ingraham v. Wright, 430 U.S. 651 (1977), the Court determined the Due Process Clause prohibits abolishment of “those privileges long recognized at common law as essential to the orderly pursuit of happiness by free men.” Id. at 94 n.3 (Marshall J., concurring) (quoting Ingraham, 430 U.S. at 672–73).

In Stop the Beach Renourishment, for example, six Justices agreed that “private property” is not a completely malleable concept that may be redefined at will by state courts. The plurality noted that in Lucas, the Court had reserved for itself the determination whether the restriction in the regulation that was claimed to work a taking was inherent in title and a preexisting limitation on land ownership.

The “core” common law property rights referenced by Justice Marshall include aspects of property such as interest following principal. Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 162 (1980) (legislature may not simply declare that interest on principal is state-owned property); Phillips v. Wash. Legal Found., 524 U.S. 156, 172 (1998) (interest on lawyers’ trust accounts is “property”). Obtaining ownership of accretion. Cnty. of St. Clair v. Lovingston, 90 U.S. 46, 68–69 (1874) (right to future accretions is a vested right and “rests in the law of nature”). The  the ability to transfer property. Hodel v. Irving, 481 U.S. 704, 716 (1987) (passing property by inheritance is a fundamental attribute of property). Importantly, making reasonable use and development of land. Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1019 (1992). And, of course, the right to exclude others.

When these core rights are threatened, the Justices now in the majority have had little difficulty finding them to be fundamental property rights that transcend a state’s ability to redefine them by regulating them out of existence without just compensation, and without detailed reliance on state law. See Lucas, 505 U.S. at 1014 (“[T]he government’s power to redefine the range of interests included in the ownership of property was necessarily constrained by constitutional limits.”) (citation omitted).

But what about Murr, you ask? In that case the tables were turned, with the Chief Justice dissent arguing that Wisconsin law should define (or at least be the presumptive controlling law) for the "larger parcel" issue. There's no direct mention of Murr in the Cedar Point majority opinion, but we're guessing that the Chief reconciled what might be viewed as his contrary dissent that state law should define the parcel, but not the property right

I think the answer is far more straightforward: State laws define the boundaries of distinct units of land, and those boundaries should, in all but the most exceptional circumstances, determine the parcel at issue.

Murr v. Wisconsin, 137 S. Ct. 1933, 1953 (2017) (Roberts, CJ, dissenting) (emphasis added). We'll see if that distinction is challenged.

In what's been a long time coming (in our opinion), the Court definitively clarified Pruneyard. That case merely stands for the proposition that by opening its property to the public for some purpose, the owner can't really say it has some absolute right to keep the public out:

Limitations on how a business is generally open to the public may treat individuals on the premises are readily distinguishable from regulations granting a right to invade property closed to the public.

Slip op. at 14-15. There's some nuance in Pruneyard, naturally. Opening up your property to A, doesn't necessarily mean you think its okay for B to come on and shout political slogans at you, A, and others who might just want to shop or work in peace, and there may be limitations on how deeply the government may dictate what members of the public do once they are on the property. But that doesn't really seem like a categorical takings problem.

In sum, the Cedar Point majority accepted the notion that by inviting the agricultural workers on its property, the property owners did not also open up the property to others who might be, let's say, "appurtenant" to those workers. Absent some Pruneyard-like facts, the choice remains with the property owner.

To wrap up this post, here's the short story about what will not automatically get a regulation requiring access to property off the takings hook after Cedar Point:

• permanence
• the number or classification of people or things doing the invading
• whether the regulation or state law describes the access as an "easement"

That, as we concluded in our first post is a strong affirmation of property rights generally, and for common understandings of what it means to own something more specifically.

What does this portend for regulations that impose a "lesser" level of invasion? And are there exceptions to the general rule that all invasions -- whether straight-up government incursions, or regulations that throw open otherwise closed doors to third parties -- are presumed to be takings?

Stay tuned for Part III, where we'll take a look at that.

Cedar Point Nursery v. Hassid, No. 20-107 (U.S. June 23, 2021)

11th Circuit Affirms Penn Central Jury Verdict For Rezoning Resulting In 86% Loss Of Value

More good takings news, hot off the press.

Before Cedar Point came down last week, we were all set to let you know about the Eleventh Circuit's opinion in South Grande View Dev. Co., Inc. v City of Alabaster, No. 18-14044 (June 21, 2021), in which the court affirmed a jury verdict that the city's reduction in the developable density on residential-zoned parcel (from R-7 and R-4) to R-2) was a Penn Central regulatory taking. 

The city appealed on an evidentiary issue, arguing that the jury should not have heard evidence of its reasons for downzoning the property, which were not relevant to the takings question and only went to whether the government acted arbitrarily and capriciously (a due process inquiry). The city also raised a ripeness question: the owner had not sought a variance from application of the new zoning, and indeed had never asked the city to apply the R-2 zoning to the property. 

The Eleventh Circuit rejected both arguments.

First, the city had made a final decision applying the R-2 zoning to the property:

• "[O]ur binding precedent holds that a zoning ordinance can itself be a final decision on the merits." Slip op. at 11.
• The rezoning only applied to South Grande's property, and no other. Unlike the rezoning in Williamson County, which applied to a wide swath of properties, this one was specifically targeted at South Grande. Thus, "there was no ambiguity as to how a general plan would be applied to a specific project—the zoning ordinance itself was the City’s final decision on the matter." Slip op. at 14.

Second, the court agreed that evidence of the city's motive for the downzoning was not relevant to the takings issue, but that the jury hearing this irrelevant evidence was harmless error. The owner introduced evidence of the city's motive, arguing it was part of the "character of the government action" Penn Central factor. Slip op. at 21. But Lingle, the court concluded, made that evidence only relevant to a due process inquiry and not to takings. See slip op. at 22-23 ("The Lingle court explicitly rejected the argument that the Penn Central factor of the “character of government action” addressed the purpose of the regulation[.]"). But no harm, no foul, and this was "not reversible error." Id. at 25-26.

Verdict affirmed. The reason the error was harmless (and here's the really important part of the opinion, in our opinion), was because "substantial, permissible evidence produced at trial supports the jury's [Penn Central] verdict." Slip op. at 26.

That evidence:

• Developing the parcels for just residences per acre was not economically feasible.
• The owner spent a "significant sum of money preparing the property for R-4 homes." Slip op. at 24.
• Neither the parties nor the court looked at whether the owner's rights had "vested" under Alabama law. In other words, Penn Central does not turn on a race to vest.
• The owner also testified that it "did not finish" developing the properties because of a market downturn "and they were going to wait until after the recession to continue developing." Slip op. at 8.
• The owner's purchase price and the amount later spent to develop the property counted towards its investment-backed expectations. Slip op. at 8.
• The before value of the property: $3.52 million. The after value: $500k. An 86% decline due to the regulation. Whether this qualified as a substantial loss was left to the jury, and the court did not apply the (wrong) rule that courts often do and conclude that although 86% is significant, it isn't enough.

In closing, the court noted that the city didn't put on contrary evidence of value, and that it only challenged the owner's valuation evidence "for the first time on appeal." Thus, the city had forfeited those arguments and the court did not consider them. 

Definitely check out this opinion and the facts. There's some gems there.

South Grande View Dev. Co., Inc. v. City of Alabaster, No. 18-14044 (11th Cir. June 21, 2021)

Join Us Friday, July 16, 2-3pm ET: ALI-CLE's "Takings and Eminent Domain After Cedar Point: What Practitioners Need to Know"

The ink's not quite yet dry on the U.S. Supreme Court's landmark decision in Cedar Point Nursery v. Hassid, No. 20-107 (June 23, 2021), but we're already ready to roll with a program about what this decision means for you and your clients, and for takings law.

Find out from the experts in a one-hour webcast, "Takings and Eminent Domain After Cedar Point: What Practitioners Need to Know" from ALI-CLE. Registration and more information here.

In Cedar Point, a 6-3 majority affirmed a bright-line rule that physical invasions of whatever duration are takings, and held that "[w]henever a regulation results in a physical appropriation of property, a per se taking has occurred, and Penn Central has no place." Questions about duration of the invasion "bears only on the amount of compensation."

Our highly respected faculty will discuss the effect of this fascinating case on takings, eminent domain, and property law. With a short investment of your time, you’ll learn about this landmark ruling and why the Court's decision is important to your practice. The faculty includes Joshua Thompson (arguing counsel for the prevailing property owners); Professor Julia Mahoney (University of Virginia School of Law, and a nationally-renown property scholar); and Matthew Littleton (who authored a government-side amicus brief in the case).

This program is an adjunct (and preview) to the full, three-day ALI-CLE Eminent Domain & Land Valuation Litigation Conference, which is scheduled for January 27-29, 2022 at the McCormick Ranch Resort in Scottsdale, Arizona. Stay tuned for more information on our big reunion event, which we'll post very shortly.

In the meantime, please register for the Cedar Point program and join us. Bring your questions and comments, and come prepared to learn.

Cedar Point Part I: SCOTUS's Strawberry Letter 23 To Property Rights

In this post -- the first in a series of deeper dives that we'll be posting about over the next few days about yesterday's U.S. Supreme Court opinion in Cedar Point Nursery v. Hassid, No. 20-107 (June 23, 2021) -- we'll be covering the background of the case, and the heart of the majority opinion.

Here are all of the posts in our Cedar Point series:

• Part I: SCOTUS's Strawberry Letter 23 To Property Rights
• Part II: Common Sense (Keep Out) And Common Law (The Right To Exclude)
• Part III: No, Chicken Little, The Sky Isn't Falling
• Part IV: The Other Opinions
  
• Part V: Help Us Help You
• Part VI: What Others Are Saying

And in case you missed the live webcast on Friday, July 16, 2021 that featured expert analysis of the case, please don't miss listening to the recording of ALI-CLE's "Takings and Eminent Domain After Cedar Point: What Practitioners Need to Know."

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Take off your lawyer hat for a minute and hark back to your days before law school. You remember, don't you? (Do you?) If you could go back in time and ask your younger self what it means to own property, what might you have responded?

We're guessing that like most regular people, your younger self would have replied that it meant, at heart, the owner could say "keep out," or "this is mine" (which is another way, we think, of saying keep out). (If that isn't what you think you would have responded, we're curious what first came to mind. If that's you, please let us know what your lay self would have answered.)

Our sense after reading (and re-reading) the 6-3 majority opinion authored by Chief Justice Roberts in Cedar Point Nursery v. Hassid, No. 20-107 (June 23, 2021) is that the Court was fueled by the same vibe, even though it never expressly said so. Yes, there was a lot of great technical, lawyerish stuff in the opinion about the "right to exclude," Blackstone, Loretto, Kaiser Aetna, and all that, but now that we've digested the opinions (majority, concurrence (Kavanaugh), and dissent (Breyer, Sotomayor, and Kagan)), we've come to the conclusion that the Court was undertaking what it called an "intuitive approach" (slip op. at 18) to defining the critical term in the case, the meaning of "private property" in the Fifth Amendment. Granted, the Court never says that's what it is doing, but read along and we think you will agree with our read of it.

Before we go further, a necessary disclosure: our law firm, Pacific Legal Foundation, represents the successful petitioners/property owners. I had little to do with the case since I only joined PLF a few months ago (although I did author an amicus brief at the cert stage prior to joining the firm). Now back to your regular programming.

Because we've been following the case for a long time and predicted that this one would end up at the Court, we're not going to go into great detail about the facts, and it might be simpler just to read one of our earlier posts. But here's the short story.

For a long time -- indeed decades -- California's Agricultural Labor Relations Board has had a regulation that requires agricultural employers to open their land to labor union organizers. The regulation is framed as protecting the rights of ag employees to "access by union organizers to the premises of an agricultural employer for the purpose of meeting and talking with employees and soliciting their support." The time, place, and manner of the union entries are not unlimited but are nonetheless pretty severe, giving the union to, in the words of the regulation a "right to take access" to an employer's property for up to 3 hours per day, 120 days per year. Remember the phrase "right to take access" because it's going to come back and haunt the Board once the case gets to the Supreme Court.

Two separate agricultural employers (one a strawberry farm, the other a grower of grapes and citrus) filed a § 1983 complaint against the Board in federal court for declaratory and injunctive relief, alleging the regulation was a taking under the Fifth Amendment, and an unlawful seizure under the Fourth Amendment. The district court granted the Board's motion to dismiss for failure to state a claim (12(b)(6)).

The Ninth Circuit affirmed (2-1), and over a strong dissental, denied en banc review, concluding that the allegations of the complaint did not state a plausible Loretto physical invasion takings claim under Twombly/Iqbal. The complaint pointedly did not raise a Penn Central ad hoc taking. The Ninth Circuit rejected the claim because the invasions were not permanent.

The Supreme Court agreed to review this question presented:

California law forces agricultural businesses to allow labor organizers onto their property three times a day for 120 days each year. The regulation provides no mechanism for compensation. A divided panel below held that, although the regulation takes an uncompensated easement, it does not effect a per se physical taking of private property because it does not allow “24 hours a day, 365 days a year” occupation. As an eight-judge dissent from denial of rehearing en banc noted, the panel “decision not only contradicts Supreme Court precedent but also causes a conflict split.”

The question presented is whether the uncompensated appropriation of an easement that is limited in time effects a per se physical taking under the Fifth Amendment.

Chief Justice Roberts authored the majority opinion, in which Justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett joined. Right off the bat, you knew where this one was going when the opinion began with "[a] California regulation grants labor organizations a 'right to take access' to an agricultural employer's property in order to solicit support for unionization." Slip op. at 1. (If you're the government and the question is whether there's been a taking, and your regulation is phrased in terms of "taking," it's not likely going to be a good day.)

And it wasn't, at least from the government side of things. The Court concluded that "[w]hen the government physically acquires private property for a public use, the Takings Clause imposes a clear and categorical obligation to provide the owner with just compensation." Slip op. at 5 (citing Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 321 (2002)).

The majority noted three situations in which fall within the "physical taking" category:

• affirmative ("formal") exercises of eminent domain
• when government takes physical possession of property without obtaining title
• when government action results ("effects") an occupation of property

When any of these occur, that results in a categorical obligation to compensate.

The Court contrasted what it called "restrict[ions on] an owner's ability to use his own property," noting that "a different standard applies." Slip op. at 6. These are what are commonly known as "regulatory takings," but the Court cautioned that the "label can mislead." Id.

What we think the Court is getting at here is an essential point (and a preemptive rebuff of Justice Breyer's dissent): what we know as "physical takings" cases such as Loretto and Kaiser Aetna and Nollan do indeed fall under the general umbrella of "regulatory" takings because in those cases, the physical invasions were required by the government's exercise of its regulatory power (in Loretto and Nollan, the police power), and in Kaiser Aetna, the federal government's commerce power). That may be so, the Cedar Point opinion reminds, but the "regulatory" aspect of it should not distract us from the essential point: what matters is "whether the government has physically taken property for itself or someone else." Slip op. at 7. The means isn't as important as the result. A physical invasion is a physical invasion, "by whatever means." Id.

Having taken the steam out of the dissent's main argument, the majority then explained why California's regulation qualified as a physical invasion. That might seem obvious. Union organizers, under the regulation have the ability to enter Cedar Point's property 120 days per year for up to 3 hours per entry, and had exercised that right as the Court described in the opinion. See slip op. at 2 (noting the complaint alleged an unannounced 0500 hrs entry, with blaring bullhorns). But the Ninth Circuit's main sticking point -- that the entries the regulations require are not "permanent" ("24/7" as the Ninth Circuit put it) -- seemed to be supported by the language of Loretto, which spoke of permanent physical invasions being categorical takings. The question after Loretto was whether non-permanent invasions were also categorical takings, or should be subject to the Penn Central ad hoc takings test in which the nature of the government action as either requiring a physical invasion or simply adjusting the benefits and burdens of society was just one of the things a court would look at, as opposed to the only factor to consider.

The Court came down squarely on the side of nonpermanent invasions as being categorical takings. The reason why is the sanctity of the right to exclude. In other words, "keep out." Relying on the classic canon of physical invasion cases -- Causby (B-25's), Portsmouth (cannon fire), our old friend KaiserAetna (uninvited boaters), Loretto (that cable TV box), Nollan (beachcombers) and Horne (segregating raisins) -- the Court emphasized the "fundamental" nature of the right to exclude. Limiting that right really deprives the word "property" of its essential meaning:

The upshot of this line of precedent is that government-authorized invasions of property—whether by plane, boat,cable, or beachcomber—are physical takings requiring just compensation. As in those cases, the government here has appropriated a right of access to the growers’ property, allowing union organizers to traverse it at will for three hours a day, 120 days a year. The regulation appropriates a right to physically invade the growers’ property—to literally “take access,” as the regulation provides. Cal. Code Regs., tit. 8, §20900(e)(1)(C). It is therefore a per se physical taking under our precedents. Accordingly, the growers’ complaint states a claim for an uncompensated taking in violation of the Fifth and Fourteenth Amendments.

Slip op. at 10.

The Court next took down the Ninth Circuit's reasoning on that only "24/7" occupations are categorical takings. Permanent or temporary, what matters from a "common sense" point of view (see slip op. at 10) is that there's been an invasion, not its duration. The question of the duration of the invasion "bears only on the amount of compensation." Slip op. at 12. The Court clarified that (in)famous footnote in Loretto on which the Ninth Circuit relied, reemphasizing that the focus is on the invasion, not the duration or the size. Id.

Although the Court called this an "intuitive approach" (id. at 13), we suggest you read this part of the opinion in detail. There's a lot there, especially for property advocates. It's an ode -- or maybe even a love letter (hence the title, and the video above) -- to the right to exclude, and its role as a (maybe the?) central stick in the bundle of sticks.

"Keep out" indeed!

Next, in Part II, we'll take a look at how the Court treated our old friend, the Pruneyard case, and how the majority dealt with that case's holding that the California Supreme Court's rule that shopping center owners must allow use of their properties as forums for public speech was not a judicial taking.

Stay tuned.

Cedar Point Nursery v. Hassid, No. 20-107 (U.S. June 23, 2021)

Well, You Really Can Say "Keep Out" In California (Cedar Point - A Per Se Taking)

We haven't had time to read it in detail yet, but here's the slip opinion in a case we have been following for a long time, Cedar Point Nursery v. Hassid, No. 20-107 (June 23, 2021).

Writing for a six-Justice majority (no one went wobbly!), Chief Justice Roberts concluded that California's labor regulations, which require that an owner of agricultural property allow union labor organizers to enter the property to access potential union members, is a per se taking.

Robustly reaffirming the rule that a physical invasion is a categorical taking, the majority concluded:

The upshot of this line of precedent is that government-authorized invasions of property—whether by plane, boat, cable, or beachcomber—are physical takings requiring just compensation. As in those cases, the government here has appropriated a right of access to the growers’ property, allowing union organizers to traverse it at will for three hours a day, 120 days a year. The regulation appropriates a right to physically invade the growers’ property—to literally “take access,” as the regulation provides. Cal. Code Regs., tit. 8, §20900(e)(1)(C). It is therefore a per se physical taking under our precedents. Accordingly, the growers’ complaint states a claim for an uncompensated taking in violation of the Fifth and Fourteenth Amendments.

Slip op. at 10.

More, after a chance to digest the opinion in detail.

Cedar Point Nursery v. Hassid, No. 20-107 (U.S. June 23, 2021)

Texas: Makin' Copies Of A Photograph Is Copyright Infringement, Not A Taking

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

In Jim Olive Photography v. Univ. of Houston, No. 19-0605 (June 18, 2021), the Texas Supreme Court affirmed the court of appeals, concluding that a public university's unauthorized use of a photograph on its website was merely copyright infringement, and not a taking. 

The opinion is short, and mostly mirrors the rationale of the court of appeals, so if you just want to read our summary of the court of appeals' opinion, you may stop here. But if not, read on.

The facts: Jim Olive took a photograph that the University of Houston used on its website after stripping off all attribution. When Olive discovered the unauthorized use, he demanded the University take it down. It did, but it refused to pay for its use. Olive sued in a Texas state court for taking his intellectual property, seeking just compensation under both the Texas and U.S. Constitutions.

The University made two arguments in opposition: (1) intellectual property isn't "property" protected by the takings clauses; and (2) if it is, the University's unauthorized use was merely copyright infringement, not a taking. The court of appeals agreed with the University, at least on the second argument. But it avoided the foundational issue of whether IP qualifies as takings clause property. The Texas Supreme Court granted a discretionary writ.

The Supreme Court opinion, like that of the Court of Appeals, acknowledged the disagreement among scholars over whether IP is takings clause property, and that the U.S. Supreme Court has concluded that IP is property for purposes of due process protections. But like the court of appeals, the Texas Supreme Court avoided the issue and simply assumed that Olive's copyright qualifies as property for takings clause purposes.

It did so because it concluded that copyright infringement cannot be a taking, at least in the situation here. Starting on page 9 of the slip opinion is where you will find the good stuff:

• A copyright may be property, but it is intangible property and not like the raisins in Horne. So this was not a "physical" taking because the University didn't seize the actual photograph, it used it without permission.
• But what about the various "sticks" in the non-tangible thing? The University's use did not seize possession or control of the Olive's rights, and did not destroy his right to use or dispose of his rights.
• But, Olive argued, I have the right to use the photo exclusively. The University's unauthorized use violated that exclusive right, he asserted. Just because you didn't take all my rights, the right to exclusivity is maybe the most important stick, and should be subject to per se analysis. 
• The court rejected that argument, concluding that Olive could still do all (most?) of the things he could do before the unauthorized use: he could exclude third parties from using it (except the University, apparently!), he could use the photo himself and license it to others. He can dispose of the picture, give it away, sell it, and the like. What the court termed "nonrivalrous" use. Slip op. at 15.

Three Justices concurred to note that the Texas Constitution also includes a "damaging" clause, and that some circumstances might trigger damage liability. See Concurring Op. at 9 ("For example, would compensation be required if a state university allowed its employees and students to stream copyrights movies without the owners' permission, or if it gave an unauthorized license to a printer to make copies of a copyrighted textbook and then distributed them to its students (or students across Texas) for free?"). But Olive didn't raise a damaging claim, only a per se taking claim.

• Read the briefs
• Watch the oral argument recording

Jim Olive Photography v. Univ. of Houston, No. 19-0605 (Tex. June 18, 2021)

CA4: No Taking When Aerial Pesticide Spray Killed Bees ... But Not Why You Think

The facts that compelled the U.S. Court of Appeal to conclude as it did in Yawn v. Dorchester County, No. 20-1584 (June 11, 2011) are pretty straightforward.

In response to a threatened public health viral crisis (no, not COVID, but Zika [remember that one?]), the county decided to spray insecticide. Some areas could not be reached by truck, so it was decided that aerial delivery was the way to go. The county put out press releases, and called local beekeepers to allow them to cover their hives (the insecticide, you see, doesn't discriminate between mosquitos and bees, and is equally fatal to the latter unless the hive is covered). The pilot even testified that he had a map of the location of beehives, and that he turned off the sprayers as he approached those areas.

But Yawn, a beekeeper, did not get the warnings. The result: lots of dead bees. Slip op. at 5 ("the morning after the aerial spray, Appellants discovered mounds of dead bees surrounding their hives"). There's no direct evidence that the pesticide killed the bees, but an investigation concluded that the the dead bees were "consistent with pesticide exposure." Id.  

A federal lawsuit, including both a takings claim as well as a claim under South Carolina tort law, followed.

The district court entered summary judgment in favor of the county, concluding that the pesticide spraying was "squarely within the police power" and that the injury to Yawn's bees was only incidental, and therefore no taking: "[b]ecause [the County] was exercising its police power, and not its power of eminent domain, the Takings Clause is not implicated." On to the Fourth Circuit.

Barista's note: before we go further, disclosures. The property owners are represented by my law firm (Pacific Legal Foundation) and as co-counsel with my friend and colleague W. Andrew Gowder.

First, the good news. The appeals court rejected the district court's conclusion that the mere fact that the court was (validly) exercising its police power in the furtherance of the public health was not blanket immunity from takings liability. As the court put it, "[t]hat Government actions taken pursuant to the police power are not per se exempt from the Takings Clause is axiomatic in the Supreme Court’s jurisprudence." Slip op. at 8.

That's a point we've often made, most recently in the context of COVID restrictions, and in this amicus brief in the "SWAT takings" case. The entire regulatory takings doctrine would make no sense if all the government need do to avoid liability is show that the regulations claimed to effect a taking are valid exercises of the police power. Indeed, the takings doctrine pretty much presumes that the taking is the consequence of an otherwise valid exercise of power. To conclude, as the district court did, that the regulation can't be a taking because it isn't an exercise of eminent domain power simply gets you into a self-proving rule. And of course regulatory takings claims are not based on the government's exercise of eminent domain power. In those instances, the government acknowledges it is taking property and has an obligation to provide compensation. Not so in regulatory takings. 

The Fourth Circuit didn't exactly say it that way (instead, the opinion puts it in terms of takings remedies not putting direct limits on government's ability to act for the public good), but who's complaining? That's the good.

Now the not-so-good. The court nonetheless affirmed the district court's conclusion that the bee apocalypse was not a taking. Why? Because "the death of Appellants' bees was neither intentional nor foreseeable." Slip op. at 9. Concluding that bee death was merely a consequential damage resulting from a valid exercise of the county's police power, the court held that "[i]f the invasion is not intended or foreseeable, then it does not constitute a taking." Slip op. at 9.

Relying on dicta in Chicago, B. & Q. Railroad and Arkansas Game and Fish cases, (and otherwise notable for the lack of on-point Supreme Court authority, presumably because there isn't any), and adopting the Federal Circuit's tort/takings distinction, the court held that because the invasion here was unintentional, there could be no takings liability. Slip op. at 9 ("Here, the death of Appellants' bees was plainly unintentional."). The court rejected the owners' argument that the bee deaths were foreseeable because the insecticide is highly toxic to all insects, including bees:

Appellants argue that the death of the bees was nonetheless foreseeable because of an “explicit warning in the pesticide use instructions stating that dispersal of the substance is ‘highly toxic’ to bees.” Appellants’ Reply Br. 10 (citing J.A. 157). But this frames the foreseeability analysis too narrowly. The question is not simply whether applying the pesticide to bees would foreseeably result in their death, but rather, whether the bees would die despite the County’s specific efforts to avoid exposing the bees to the pesticide. We conclude that it was not foreseeable that the press release would fail to reach Appellants, leaving Appellants and their bees unprepared for the spray. Appellants testified that they had previously successfully taken protective measures prior to sprays of which they were aware, such as closing the hive entrances and laying a damp bed sheets across the hives. Thus, previous sprays did not result in the death of Appellants’ bees. And the fact that the spray in question was conducted aerially while previous sprays were conducted via truck is likewise not enough to conclude that the bees’ death was foreseeable. This is because there is no evidence that Appellants’ protective measures would have been ineffective in this instance had they known about the spray, especially given the pilot’s effort to avoid direct exposure by turning off the sprayer. Indeed, this spray did not kill other local beekeepers’ bees.

The death of Appellants' bees is undoubtedly a tragedy, but we cannot conclude that it was the foreseeable or probable result of the County’s action when it is a clear outlier in terms of collateral damage arising out of the County’s mosquito abatement effort.

Slip op. at 10. 

To us, this approach presents two potential problems.

First, identifying the property alleged to have been taken. If it was the invasion of the owner's airspace that resulted in injury to his other property, as in United States v. Causby, 328 U.S. 256 (1946), then foreseeability does not seem to count for all that much, as long as the invasion was "substantial" and "direct." See id. at 265-266 ("In this case as in Portsmouth Co. v. United States supra, the damages were not merely consequential. They were the produce of a direct invasion of respondents' domain."). Maybe the single incursion here, not being the "regular" flights in Causby that resulted in takings liability when those incursions resulted in dead chickens instead of dead bees, was not considered substantial. But since a single invasion is, according to Arkansas Game, not an automatic exemption, you might think the Fourth Circuit would at least walk through the factors which the Arkansas Game opinion laid out, instead of Penn Centralizing the foreseeability factor alone. In Arkansas Game, for example, the Court told us to look at the length of the invasion, the foreseeabilty of the consequences, the character of the property, the owner's investment-backed expectations regarding use of the property, and the severity of the interference. Arkansas Game, 568 U.S. at 38-39. Or was the property alleged to have been taken limited to the bees themselves?

Second, as noted above, the Fourth Circuit adopted the Federal Circuit's very torty approach, which looks at whether the alleged condemnor predicted the consequences of its actions. In these cases, the court looks at the "direct, natural, or probable" result of the government action, which sounds to us an awful lot like a tort analysis despite the Federal Circuit's disclaimer in Moden v. United States, 404 F.3d 1335, 1345 (Fed. Cir. 2005) (the sole case on which the Fourth Circuit cited in its opinion) that "the government's liability for a taking does not turn, as it would in tort, on its level of care." Id. Sure does to us, sorry.

But this is not the only approach that courts have taken. In California and a few other states, for example, inverse condemnation liability does not look at predictability or foreseeability, but on causal connection.

Public entities are not strictly or otherwise automatically liable for any conceivable damage bearing some kind of connection, however remote, to a public improvement. To succeed on an inverse condemnation action, a plaintiff must ordinarily show — assuming the public entity made reasonable assumptions about the public improvement in question –– that the damage to private property was substantially caused by inherent risks associated with the design, construction, or maintenance of the public improvement.

City of Oroville v. Superior Court, 446 P.3d 304, 307 (Cal. 2019).

The most notable example is in wildfire cases, but the California courts also apply this analysis in physical flood cases as well. If that analysis were applicable, it would not venture (unnecessarily, in our view) into the tort sphere, and would not make takings liability turn on the implied reasonableless of the government's beliefs about what might happen. Instead, takings would turn on a factual question about whether the damage was substantially caused by the government's action.

Yawn v. Dorchester County, No. 20-1584 (4th Cir. June 11, 2011)

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

The New Mexico Supreme Court

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

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

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

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

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

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

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

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

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

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

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

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

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

In the very next sentence, the court concluded:

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

Slip op. at 36.

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

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

...

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

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

Slip op. at 38, 40. 

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

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

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

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