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ALI-CLE Webinar: Tax Consequences Of Eminent Domain (May 13, 2025)

Want to learn of some of the options available to property owners whose land is taken by eminent domain (or, even more sadly, destroyed by a disaster)?

Then you should sign up for next week's ALI-CLE webinar, "1033 Exchanges: Advanced Strategies for Optimal Tax Deferral."

Here's a description of the program:

When property is lost due to an involuntary conversion such as a taking by eminent domain, destruction by natural disaster, or theft, many clients assume they must immediately face a significant tax burden from compensation received. However, IRS §1033 provides a powerful alternative—tax-deferral through strategic reinvestment. Understanding the nuances of 1033 exchanges allows attorneys to guide clients through the process, ensuring they maximize tax benefits and rebuild wealth effectively.

Join us for this comprehensive CLE course designed to equip legal professionals with the knowledge and tools needed to navigate 1033 transactions with confidence.

With our colleagues Alan Lichtenstein and Matthew Bryant. 

Register now. 

Friends Without Special Benefits: Direct Access To Interstate Is General Benefit

Partial taking for highway project. You know what that means: severance damages. And you also know that often means a "general or special" benefits fight over how the remainder parcel may have been improved by the project, and whether these benefits can reduce the severance owed.

Before-the-project condition: undeveloped land on a frontage road with no nearby connection to the freeway. After-the-project condition: remainder property has direct freeway access, an increase in traffic to the site and easier ability to enter/exit, and curb and sidewalk improvements. The trial court concluded these specially benefited the remainder property, and could be offset against compensation.

In Utah Dep't of Transportation v. Boggess-Draper Co., LLC, No. 20220875 (May 1, 2025), the Utah Court of Appeals disagreed. In accordance with a Utah Supreme Court decision, benefits that may be used to offset compensation must be those which "affect the land itself," and increase "the actual or usable value of the land," and not just the market or saleable value." And general benefits are those which are "enjoyed by the public." Determining which category a benefit to the remainder falls in is discretionary with the trial court.

Here's how the court of appeals treated each benefit:

• Direct interstate access and increased traffic: general benefit because "'merely increased facilities for travel and transportation by the public in general' do not qualify as a special benefit because any increase in value from such improvements 'has no relation to the use of the land as land.'"
• Increase in the number of lanes: general benefit, for the same reason.
• Curb, gutter, and sidewalk improvements: special benefit, because "[t]he improvements 'affect[ed] the land itself directly and proximately' by making 'a
  large share or all of the property abutting thereon more accessible and convenient for use.'”

Slip op. at 18-19. The court concluded that this was not harmless error:

Here, we have no trouble concluding that Boggess was harmed by the district court’s error. By classifying all the benefits as special as a matter of law, the court allowed evidence that was legally incorrect and crippling to Boggess’s ability to recover severance damages. Expert testified that the project had “significantly” benefitted the Property because the price per square foot of the Property in the “before condition” ($8.75) was less than the price per square foot in the “after condition” ($12.50). He attributed the nearly four dollar per square foot increase to “the advantage of the interchange, and the traffic exposure,” and concluded that the difference between these figures demonstrated that the Property had received “a special benefit of 2.2 million dollars” from the project. By defining the interstate access increasing traffic as a special benefit, Expert improperly inflated the Property’s after-condition valuation, which created a sizeable $2.2 million offset. Without the inclusion of the general benefits, the offset would have been significantly lower, thereby creating a reasonable likelihood that Boggess would have been awarded severance damages. This error is accordingly reversible.

Slip op. at 21-22.

Utah Dep't of Transportation v. Boggess-Draper Co., LLC, No. 20220875-CA (Utah App. May 1, 2025)

Pennsylvania: "Used Together" In Larger Parcel Statute Means "One Purpose"

There's a lot of detailed legal analysis in the Pennsylvania Supreme Court (Eastern District)'s opinion in Pignetti v. Pennsylvania, No. J-11A-2024 (Apr. 25, 2025). But in the end it boiled down to a simple concept.

The case was about what property constituted the larger parcel. As the court put it, where "the condemnation of one parcel may affect the use and the value of another to such an extent that the two parcels should be valued as one." Slip op. at 1-2 (footnote omitted). In Pennsylvania, they apparently call this "plottage," but the analysis is familiar. (Think "three unities" -- or some combination thereof.)

The Pennsylvania Legislature codified what in a lot of other jurisdictions is a common law doctrine. The statute provides:

Where all or a part of several contiguous tracts in substantially identical ownership is condemned or a part of several noncontiguous tracts in substantially identical ownership which are used together for a unified purpose is condemned, damages shall be assessed as if the tracts were one parcel.

26 Pa. C.S. § 705.

In this case the DOT condemned a portion of Parcel 44 and all of 45. Mr. and Mrs. Pignetti owned 44, while Mr. Pignetti alone owned 45. The parcels do not actually touch, because a small "unoccupied and unused sliver of land no more than several square feet in area" separates them. Slip op. at 3. The Pignettis, however, asserted they used 44 and 45 together, to store equipment and trucks for their electrical business. Thus, they argued, the two parcels should be treated as one under the statute.

After taking evidence, the trial court agreed. Slip op. at 5 ("The trial court then determined that the Parcels has substantially identical ownership and that the Pignettis used the Parcels together for a unified purpose."). But the Commonwealth Court (Pennsylvania's appellate court) reversed, holding that the statute merely codified existing case law, and thus must be "so inseparably connected in the use to which they are applied as that the injury or destruction of one must necessarily and permanently injure the other." Slip op. at 6. "Sameness" of purpose of the use isn't the standard, and the evidence merely established that the Pignetties parked vehicles for their business on both lots, and did not provide evidence about how the effects of one parcel's use on the other, or that they were "inseparably connected" by their mutual use. Slip op. at 8.

If the appellate court's analysis and conclusion has you scratching your head for the actual difference, you are not alone. The Pennsylvania Supreme Court took up the issue, and concluded the Pignettis have the better of it.

The court's analysis starts off where all statutory cases should start off -- with the language of the statute. The statute says "used together for a unified purpose[.]" Slip op. at 14. And storing vehicles and equipment for the family business on both parcels qualifies.

"Together" is the critical terms, and the court started by asking whether dictionary definitions help give more meaning to that word. But it came to the conclusion that no, checking Webster's doesn't advance the ball at all, because the definition of "together" loops you back into other, similar words: "Together is a more or less irreducible word, and one with a manifestly familiar meaning." Slip op. at 16. We don't need any dictionary to tell us what "together" means:

Two tracts are "used together" when they are used together.

Id. When you say it that way, Your Honors...

The court concluded:

If our account is consonant with a plain-language approach, then the case becomes easy. The lots, separated by a few paces, are used together for the one purpose of storing vehicles and equipment in service of Mr. Pignetti’s business. To say more is to complicate a straightforward matter, and to do so unnecessarily.

Slip op. at 17.

Game over, the Pignettis win the day. Lesson here: don't overthink things; sometimes a cigar is just a cigar. 

One Justice dissented, because that, "[i]n my mind, the phrase 'used together for a unified purpose' ultimately connotes something more than simply 'used in furtherance of a shared enterprise.'" Dissent at 1-2.

Pignetti v. Pennsylvania, No. J-11A-2024 (Pa. E.D. Apr. 25, 2025)

CA8: Private Delegee Of Federal Eminent Domain Power Does Not Owe Attorneys Fees Even If State Law Requires

A short one from the U.S. Court of Appeals for the Eighth Circuit. 

The caption of WBI Energy Transmission, Inc. v. 189.9 rods, No. 24-1693 (Mar. 24, 2025), should tell you that this is a private-delegation federal taking, and indeed it is. Another Natural Gas Act taking by a private pipeline company. 

After WBI and a property owner couldn't agree on selling a strip of land for a natural gas pipeline, WBI filed a federal condemnation action under the NGA. Eventually the parties settled on the amount of just compensation owing for the land. 

Under North Dakota law, a property owner is entitled to attorneys fees. So the owner here asserted it was entitled to such fees as part of the property. After all, full indemnity is part of its property rights, no? The District Court agreed, concluding that WBI was on the hook. 

If this all sounds familiar, it is. We detailed the same issue in a case arising in the Eleventh Circuit where the court held that because Florida law requires "full compensation," which includes the full indemnity of attorneys fees and this is part of every Florida landowner's property rights, the private-delegee condemnor there was on the hook. 

The Eighth Circuit rejected that approach. The court held that WBI merely stepped into the shoes of the federal government. And under the Fifth Amendment, attorneys fees are not included in just compensation. The NGA is silent on the subject, and therefore the owner is out of luck:

The problem is that, when it comes to eminent domain, congressional silence leaves no “gaps” to fill. See United States v. Great Plains Gasification Assocs., 813 F.2d 193, 195 (8th Cir. 1987) (observing that when we have “sufficient direction . . . , Kimbell Foods is inapplicable”). It is true that nothing in the Natural Gas Act tells certificate holders what they must pay when taking property. But we already know that any gaps are filled by the Fifth Amendment itself, including the obligation to pay “just compensation.” Bodcaw, 440 U.S. at 203; see Miller, 317 U.S. at 379–80 (applying the Fifth Amendment standard directly). The rules of the road do not change, in other words, when the federal government hands the keys over to a private party like WBI. See PennEast, 594 U.S. at 489 (observing that Congress delegated “the federal eminent domain power”).

Slip op. at 6.

What about the approach taken by the Eleventh Circuit that didn't see the issue as one of what is or isn't included in "just compensation," but rather a question of what property? In both Florida and North Dakota, attorneys fees in eminent domain cases are part and parcel of the property taken, aren't they? Or are they? The Eighth Circuit doesn't squarely confront and reject the Eleventh Circuit's approach.

Short story here: owner gets no fees.

Stay tuned.

WBI Energy Transmission, Inc. v. 189.9 rods, No. 24-1693 (8th Cir. Mar. 24, 2025)

Virginia Eminent Domain Conference: May 8-9, 2025, Williamsburg

Virginians: now is a good time to register for the Virginia Eminent Domain Conference, May 8-9, 2025, at the Kingsmill Resort in Williamsburg.

We have spoken and attended the Conference in past editions, and can report that it is excellent. We're looking forward to joining friends and colleagues again in The Burg in the spring. Check out the faculty and agenda, and then register and reserve your spot.

We'll see you there.

Texas Eminent Domain Conference - Austin, March 27-28, 2025

Texans: now is a good time to register for the 24th Annual Texas Eminent Domain Superconference, March 27-28, 2025, at the Austin Country Club in Austin.

We spoke at the Conference a couple of years agolast year and in other editions, and can report that it is excellent. Check out the faculty and agenda, and then register and reserve your spot.

Arizona: Damages For Proximity To Highway Project Available When An Easement - And Not Just Land - Is Severed

Like a lot of residential communities these days, Foothills Reserve was developed under a master plan, and you know what that means ... a homeowner's association and CCRs (covenants, conditions, and restrictions). 

The HOA owned common areas, in which the homeowners had easements under the CCR's. A "positive" easement to enter and use the common areas, and a "negative" easement which limited the common areas to use as open space. These easements ran with each homeowner's land.

As part of a highway project, the State of Arizona used eminent domain to take the common areas and the homeowners' easements. It provided just comp to the HOA for the common areas, while the HOA, on behalf of the homeowners, "sought both the value of the easements themselves and damages for the reduction in home values due to the new freeway's proximity." The State agreed it was obligated to provide comp for the easements, but disputed the "proximity damages." This isn't a taking of the homeowner's land, but only a damaging of their appurtenant easements. Severance damages are only available when land is severed in a partial taking. 

The trial court ruled for the owners and awarded $12 million for proximity damages, but the court of appeals agreed with the State, concluded that "such damages are available only when the condemned property is a physical parcel of land." The Arizona Supreme Court agreed to review.

In Arizona v. Foothills Reserve Master Owners Ass'n, No. CV-23-0292 (Jan. 28, 2025), it held in favor of the owners, concluding that these proximity damages are a type of severance damages under Arizona's statute that requires severance damages when "the property sought to be condemned constitutes only a part of a larger parcel[.]"

The court held that "[o]ne type of severance damage, proximity damages, occurs when the remaining property is in close proximity to a newly built improvement on the condemned property, like the freeway here." Slip op. at 6. Proximity isn't enough, however, and "[o]nly an owner whose property is severed by condemnation is entitled to proximity damages." Id.

When land is involved, it's easy. But what about here, where the condemned property is an appurtenant easement? As the court framed the issue, "[o]ur resolution turns on whether 'the property sought to be condemned" - the appurtenant easements - was 'part of a larger parcel' owned by Homeowners." Slip op. at 7.

The court held yes, interpreting the term "property" in the statute includes nonpossessory interests such as easements, and isn't limited to land. The court rejected the court of appeals' view that the use of the term "parcel" in "part of a larger parcel" indicates that the property must be land. No so, held the Supreme Court. "Parcel" may include a nonpossessory property interest. Yes, the meaning of "parcel" includes a tract of land, but also "broadly includes all estates and interests in property, including nonpossessory interests, like easements." Slip op. at 10.

There's a lot more in the opinion, but instead of detailing the court's reasoning here, we urge you to read the entire thing. It's definitely worth it, if only as a refresher on your dirt law basics and as a reminder that yes, easements are "private property" as that term is used in the U.S. and Arizona Constitutions.

Arizona v. Foothills Reserve Master Owners Ass'n, No. CV-23-0292 (Ariz. Jan. 28, 2025)

District Court: Fed R Civ P 71.1 Increases Discretion To Exclude Experts. CA4: No It Doesn't

In our earlier post today, we noted that on the same day last month, the U.S. Court of Appeals for the Fourth Circuit issued two published opinions about the admissibility of evidence in federal eminent domain cases under the Natural Gas Act. 

In our post about the other case, we focused on the admissibility of the owner's testimony regarding the value of her land, and noted that the second issue in that case -- the admissibility of expert valuations -- relied on the case we're delving into in this post, Mountain Valley Pipeline, LLC v. 9.89 Acres of Land, No. 23-2129 (Jan. 27, 2025).

These are takings under Fed. R. Civ. P. 71.1. The district court excluded the valuation opinion of the owner's appraiser. That opinion might have passed muster for admissibility under Federal Rules of Evidence 702 and Daubert, but the court concluded that "[t]he gatekeeping role of the district court is particularly pronounced in condemnation proceedings under Rule 71.1." Slip op. at 7.

Two of the three comparable sales relied upon by the owner's appraiser were of properties not encumbered by a pipeline easement (and here the taking is for a pipeline easement), so the expert was unreliable, held the district court. The court also excluded the owner's other appraiser on the grounds that his "conceptual subdivision [his opinion of highest and best use] was not 'legally permitted under the applicable zoning ordinance in the absence of a network of public roads that does not exist.'" Id.

With both of the owner's appraisers excluded, the condemnor sought summary judgment (its appraiser was the only evidence of value), which the district court granted.

The Fourth Circuit held that the district court abused its discretion by assuming that Rule 71.1 "requires it to exercise greater discretion for excluding evidence than would normally be permitted under the Rules of Evidence. That was error. Courts should apply the Federal Rules of Evidence identically in eminent domain cases as in other cases." Slip op. at 8.

Analogously, here, the district court apparently conflated Rule 71.1(h) with Rule 702. Relying solely on the First Circuit’s decision in United States v. 33.92356 Acres of Land, the district court concluded that its gatekeeping role in excluding expert testimony under Rule 702 “is particularly pronounced in condemnation proceedings under Rule 71.1.” 9.89 Acres of Land, 2021 WL 4398032, at *4 (quoting 33.92356 Acres of Land, 585 F.3d at 8). With all due respect to the First Circuit, we disagree. Rule 71.1(h) does not alter the Federal Rules of Evidence in eminent domain proceedings. Rather, the court must first apply those Rules to determine the universe of evidence that it will then use to “tr[y] all issues” under Rule 71.1(h)(1).

Slip op. at 9 (footnote omitted).

The Fourth Circuit concluded that "once the district court makes its initial evidentiary determinations pursuant to the normal Rules of Evidence, it can proceed to the Rule 71.1(h) stage, where it must consider all admissible evidence together." Slip op. at 10 (footnote omitted). The court held that this is an issue of first impression (both in the Fourth Circuit and, apparently, in any federal court), and that the court "must make findings of fact and conclusions of law on the record, as it would in a bench trial." Slip op. at 11.

Yes, "[g]enuine disputes of material fact are typically left for a jury to resolve. But in eminent domain cases under Rule 71.1(h), the drafters of the Federal Rules of Civil Procedure took some contested factual issues from the jury and gave them to the judge." Id. Here's how the court describes how the process should work:

To summarize, a court hearing an eminent domain case should make determinations of evidentiary admissibility using the standard Federal Rules of Evidence. Once it has established the admissible universe of evidence, it may try non-compensation issues under Rule 71.1(h) based on that evidence and should make findings of fact and conclusions of law on the record. The court may grant summary judgment if no genuine disputes of material fact remain. Otherwise, it should exclude evidence inconsistent with its Rule 71.1(h) determinations from the jury trial.

Slip op. at 13-14.

That being established, the court concluded the district court wrongly excluded both of the owner's appraisers. See slip op. at 14-19.

Mountain Valley Pipeline, LLC v. 9.89 Acres of Land, No. 23-2129 (4th Cir. Jan. 27, 2025)

CA4: Owner With Personal Knowledge Can Testify About Value Of Her Land

As the title should inform you, Mountain Valley Pipeline, LLC v. 0.32 Acres of Land, No. 23-1935 (Jan. 27, 2025) is a federal taking. Here, a taking where a private pipeline condemnor is exercising the delegated federal power of eminent domain under the Natural Gas Act.

The issue we're focusing on in this case is the district court's exclusion of the property owner's testimony about the value of her land. As you courtroom lawyers are keenly aware, a judge's decision to allow or exclude evidence is, generally speaking, a discretionary matter and subject to the very deferential "abuse of discretion" standard of review on appeal.

But here, the Fourth Circuit concluded that the district court abused its discretion. Slip op. at 8. We won't be going into great detail in this post, but instead urge you to review the opinion starting at page 8. "The threshold for admissibility of landowner testimony in takings cases is low." Id. As long as there's "a valid foundation" such as the owner's personal knowledge of the land or knowledge of comparable sales, and as long as the testimony isn't speculative or "pulled out of thin air with no basis whatsoever," slip op. at 9, the court should let it in.

The Fourth Circuit also reversed the district court's exclusion of an expert appraisal report, concluding that the district court again abused its discretion by too aggressively gatekeeping. The opinion cited a separate opinion in another case which the Fourth Circuit issued the same day, a case we cover in this post. The bottom line being here is that the district court stated, "[t]he gatekeeping role of the district court is particularly pronounced in condemnation proceedings." Slip op. at 13. 

To which the Fourth Circuit replied, in essence, no it's not:

Here, rather than conducting a traditional analysis under Rule 702, the court stated that “[t]he gatekeeping role of the district court is particularly pronounced in condemnation proceedings under Rule 71.1.” 0.32 Acres of Land, 2022 WL 4091860, at *4. The court therefore identified contested factual issues in the Gruelle Report, disagreed with Gruelle’s view of those contested facts, and determined that these “errors and omissions” rendered the Report entirely inadmissible under the Rules of Evidence. Id. at *5. This was the wrong approach. “Rather, the court must first apply [the] Rules [of Evidence] to determine the universe of evidence that it will then use to ‘tr[y] all issues’ under Rule 71.1(h)(1).” 9.89 Acres, No. 23-2129, slip op. at 9. Thus, the correct inquiry at the admissibility stage is more modest than the one undertaken by the district court below: it should ask only whether the expert’s methodology was reliable and was based on sufficient facts or data, keeping in mind that the expert “need not be precisely informed about all details of the issues raised in order to offer an opinion.” Kopf v. Skyrm, 993 F.2d 374, 377 (4th Cir. 1993) (citation omitted).

Slip op. at 13.

Mountain Valley Pipeline, LLC v. 0.32 Acres of Land, No. 23-1935 (4th Cir. Jan. 27, 2025)

Hawaii Supreme Court Arguments: Is Just Compensation For Even A Small Slice Of A Primo Hawaii Beach Zero?

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

As we previously noted, the Hawaii court of appeals affirmed a trial verdict that the just compensation owed to littoral property owners for the State's regulatory taking of small portions of accreted beach is zero.

Last week, the Hawaii Supreme Court heard oral arguments. Here's the video (sorry, can't embed it here). Worth watching, if only because questions of just compensation and how it is calculated rarely are presented to this court (which is a frequent flyer in regulatory takings cases).

Here's a description of the case and issues from the Hawaii Judiciary:

Petitioners Maunalua Bay Beach Ohana 28, Maunalua Bay Beach Ohana 29, and Maunalua Bay Beach Ohana 38 brought an inverse condemnation action against the State of Hawai‘i in 2005. At that time, they argued that the State effected a taking of accreted lands via Act 73 of 2005. In 2009, the Intermediate Court of Appeals (ICA) held that Act 73 “effectuated a permanent taking of littoral owners’ ownership rights to existing accretions to the owners’ oceanfront properties that had not been registered or recorded or made the subject of a then-pending quiet-title lawsuit or petition to register the accretions.” Maunalua Bay Beach Ohana 28 v. State, 122 Hawai‘i 34, 57, 222 P.3d 441, 464 (Ct. App. 2009).

On remand from the ICA, Petitioners sought just compensation for the alleged temporary taking of their accreted lands between 2005 and 2012. At trial, the circuit court concluded that $0 was just compensation for the alleged temporary taking of the accreted land and no nominal damages should be awarded to the petitioners. It also determined that the petitioners were not entitled to attorney’s fees.

The ICA affirmed the circuit court’s decision. With regard to attorney’s fees, the ICA held that the petitioners’ “claim for attorneys fees against the State for obtaining declaratory relief is barred by sovereign immunity.” The ICA further held that the Ohanas were not entitled to attorney’s fees under the private attorney general doctrine.

In their application for certiorari, the petitioners argue that the ICA erred in affirming the circuit court’s award of $0 in just compensation with no nominal or severance damages. Petitioners also contend that the ICA erred by concluding that sovereign immunity bars an award of attorney’s fees, and that they would not be entitled to fees under private attorney general doctrine. The State contends that the ICA did not err in affirming the circuit court’s award of $0 in just compensation or declining to award nominal damages to petitioners. It also argues that the ICA correctly held that sovereign immunity bars petitioners’ claim for attorney’s fees, and that even if it did not, petitioners would not be entitled to attorney’s fees under the private attorney general doctrine.

We watched live, and have a couple of thoughts:

• Justice McKenna's questions indicate she recalls that in an earlier regulatory takings case, the court concluded that even "speculation value" was enough to place a regulatory takings claim outside a Lucas wipeout analysis, an indicator that in this court's view, property always has value, even if it has no use. Is that enough to say the owners here were entitled to, at the very least, nominal just compensation?
• Does obtaining a decision holding the State to its constitutional obligation (after which the State repeals the unconstitutional statute) qualify the plaintiff for fee recovery from the State under the private attorney general doctrine, even where the adjudicated compensation is zero? We think so, because suing to keep the State in line when it has acted beyond its authority is exactly the kind of thing that the Attorney General should do (but didn't here, because it has been too busy defending the State's action). What about the advocate for the State who argued that there was no constitutional wrong here, because of the zero compensation verdict (the notion that the Takings Clause does not prohibit takings, only uncompensated takings)? The fact that the State withdrew the offending statute after the plaintiffs won the takings claim seems to contradict that argument because at the heart of it, the court ruled that the State should have used its eminent domain power to take future accreted land, and not the police power.

Stay tuned. We'll continue to follow along and will post the court's opinion when issued.

Breaking News: Come Join Us For The 42d ALI-CLE Eminent Domain & Land Valuation Litigation Conference, San Diego, Jan 30-Feb 1

With our tongues firmly planted in cheeks, the Planning Chairs for the upcoming 42d edition of this popular and venerable Conference bring you this "breaking news" report from San Diego!

As you know, in addition to being the best nationally-focused conference on the subjects that we love and a venue that is nearly certain to have some of the warmest winter weather in the continental United States, and we went on-location from some of the local highlights: the beaches, Torrey Pines, the Zoo, Balboa Park, the Gaslamp Quarter, and Coronado to name but a few.

More about the Conference here, including registration information.

Here are some of the highlights:

• Property Rights at the Supreme Court: DeVillier and Sheetz and What's Next
• Slow Take: Possession, Rent, Relocation, and Offset
• The Jury's View: How Jurors See Your Case
• From Penn Coal to Penn Central: How to Prove "Too Far"
• Leveraging Expertise in Eminent Domain Litigation: Working with Land Planners, Engineers, and Other Predicate Experts
• Kelo at Twenty: What Changed, What Didn't, and What's on the Horizon
• Viva Las Vegas: How the Nevada Judiciary Upheld Property Rights in 180 Land's Inverse Condemnation Taking
• Ethics: Guiding the Trolley: Perspectives on Professional Ethics in Eminent Domain for Lawyers, Appraisers, and Right of Way Agents
• "I Think I Shall Never See" Just Compensation For a Tree: Strategies to Securing Recovery for Trees, Crops, and Fixtures

And more. Check out the complete agenda here. Registration information here. 

We especially welcome first-time participants, or those returning after an absence. Connect (or reconnect) with your colleagues from across the nation.

The 41st Conference was in New Orleans. Here's a report of that event, and here are our reports from prior conferences in Austin and Scottsdale.

Don't miss out on San Diego: we have had record attendance in recent years, so hold your space now. #EminentDomain2025

Ohio Ct App: Tax Assessment May Be Admissible To Prove Just Compensation

A short one from the Ohio Court of Appeals.

In City of North Canton v. Brown, No. 2024-CA00030 (Dec. 16, 2024), the court held the trial court in a just compensation action wrongly excluded the owner's evidence of the County's property tax valuation.

Hang on. Doesn't the owner usually want to exclude evidence of property tax valuation in a just compensation case? Even though an appraisal for just compensation purposes and an appraisal for property tax purposes look at "value," we know that the goals and methods of each are different, so that's an apples-to-oranges comparison no?

Not always. Here, the court didn't conclude that the tax valuation was conclusive, merely "'some' proof of value, and is thus relevant evidence." Slip op. at 7. Moreover, this "is not a case in which a city or governmental entity is arguing the tax assessment should be admissible because the taxpayer or landowner somehow 'acquiesced' or 'stipulated' to the value by paying taxes." Id.

Here, the owner asserted that just compensation included the value of the buildings on the site. The city's appraiser, however, testified that he did not place any value on the buildings. The tax valuation, where the county assigned value to the buildings, tended to show that the buildings had some value, argued the owner. The court agreed: "For years, appellant paid taxes on this assessment, and the county accepted taxed based on this assessment." Slip op. at 8.

The court rejected the city's argument that the general rule is that property tax valuation is categorically inadmissible to show just compensation. The cases relied on by the city to support that argument were either not on-point (for example, the main case cited was where property tax valuation was offered in a tort case), or "old" (during a time when property tax valuations were believed to be unreliable).

Today, however, "the modernization of the auditor’s methods and the fact that there are now uniform rules and methods of valuing and assessing real property as promulgated by the Ohio tax commissioner have made tax assessments not inherently unreliable." Slip op. at 9. Any unreliability goes to weight, not admissibility.

So what do you think? Is there (and should there be) a general rule that property tax valuations come in or stay out in just compensation cases? Do property tax valuations today bear the same stigma of unreliability as the court says they were before?

City of North Canton v. Brown, No. 2024-CA00030 (Ohio Ct. App. Dec. 16, 2024)

Kentucky: There's More Than One Way To Prove Just Comp, Esp For Income-Producing Property

A short one today, but worth reading because the Kentucky Supreme Court's opinion in Kentucky Transportation Cabinet v. Atkins, No.2023-SC-0173 (Dec. 19, 2024) highlights an important point: when offering evidence of the compensation owed for the taking of income-producing property--and "[d]etermining the value of condemned real property is not a science"-- it isn't "speculative" to consider what a hypothetical purchaser in a market free of project influence would pay for the anticipated income stream.

If that conclusion seems kind of obvious to you, it wasn't to the Kentucky Transportation Cabinet, which asserted the trial court abused its discretion by allowing the owner's appraiser to testify that the Cabinet's taking for a highway project of the fee simple interest of land containing subsurface coal obligated it to pay compensation based on the potential income from coal royalty payments for the coal.

The Supreme Court disagreed, concluding that the trial court was well within its discretion to allow presentation of evidence of the property as producing coal royalties:

Despite the Cabinet’s arguments to the contrary, a property’s capacity to produce future income for its owner can be appropriately considered as affecting its fair market value, as long as that income is “derived from the intrinsic nature of the real estate itself, as distinguished from the profits derived from a business operated on the land.” Any estimation of income expected to be produced by the condemned property can then “be capitalized to give some fair indication of what an investor would pay [at the time of condemnation] for the privilege of receiving that income over some foreseeable period of time.” The income capitalization approach is particularly well-suited to valuing real property that contains valuable minerals, because the “value of minerals under land . . . usually lies not in their value in the ground but in the future income to be gained by their eventual extraction and sale.”

Slip op. at 10-11 (citations omitted).

But you don't just take the amount of coal in the ground and multiply it by the market price of coal. Instead, "a more robust application of the income capitalization approach might consider how the costs of mining, risks associated with the coal market, or inflation affect the fair market value of the condemned property." Slip op. at 12.

The court rejected the Cabinet's argument that the evidence of this future income was too speculative. See pages 12-13 of the slip opinion for the details why. The short story is that the owner's appraiser considered the cost and risks in coal mining, and discounted the potential income stream to account for time and inflation. This considered the "'contingencies and uncertainties of business' while estimating the fair market value of the Owners' property." Slip op. at 13.

And, of course, all just compensation valuations are to some degree speculative because the court is trying to calculate the value which an arms-length transaction would assign, when by definition a forced acquisition by eminent domain is not free-market, nor arms-length:

Determining the value of condemned real property is not a science, and such an endeavor necessarily requires some degree of speculation.

Slip op. at 14 (citations omitted).

A good reminder worth checking out.

Ky. Transp. Cabinet v. Atkins, No. 2023-SC-0173-DG (Ky. Dec. 19, 2024)

Guest Post (Jennifer Polovetsky): "Trade Fixtures In New York Eminent Domain Cases - What Qualifies and How Are They Valued?"

Today we have another guest post by New York colleague Jennifer Polovetsky, who writes about trade fixtures in New York. Lots of good stuff for those of us not in NY as well. Thanks to Jennifer (and to the New York Law Journal) for allowing us to republish her intriguing piece.

_____________________________

Trade Fixtures In New York Eminent Domain Cases - What Qualifies and How Are They Valued?

by Jennifer Polovetsky

In New York, the eminent domain laws require that compensation be made to a business tenant for the loss of its compensable trade fixtures in a separate condemnation award. A business tenant is entitled to receive compensation for its “chattel” (i.e., any machinery, equipment, and/or other legally compensable installations that are used for its business purposes) separately from any compensation offered to the landlord/owner of the property for the seizure of their real estate. See Eminent Domain Procedure Law (the “EDPL”) §504 (c); Rose v. State of New York, 24 N.Y.2d 80 (1969).

Before being entitled to any payment, however, a trade fixture claimant must first prove that each item being claimed on its trade fixture inventory (filed in court as part of its eminent domain claim) is actually a compensable trade fixture under the law.

When the government takes property by eminent domain, the Constitution requires that it compensate the owner “so that he may be put in the same relative position, insofar as this is possible, as if the taking had not occurred.” City of Buffalo v. Clement Co., 28 N.Y.2d 241 [1971]. Accordingly, New York courts have held that “[a]n appropriation of land ... is an appropriation of all that is annexed to the land, whether classified as buildings or as fixtures.... The value of the fixtures ought, therefore, to [be] considered in estimating the total value of the property appropriated by the State.” See Jackson v. State of New York, 213 N.Y. 34 [1914]).

What then, constitutes a compensable trade fixture under New York law? This is one of the most heavily litigated and disputed issues amongst New York eminent domain practitioners.

The prevailing law on this issue can be found in the Court of Appeals decision Matter of In re City of New York (Kaiser Woodcraft Corp.), 11 NY3d 353, 359-63 [2008]. In Kaiser, the Court of Appeals held that in order for an item to be deemed a compensable trade fixture, it: (i) must first meet the age-old, three-pronged “annexation-adaptability-permanency” test in order to determine whether an item is a compensable trade fixture or non-compensable personalty, then (ii) must then meet the fourth prong of the trade fixture test, which only allows compensation for those improvements that are “used for business purposes and which would lose substantial value if removed.” Kaiser Woodcraft Corp., id. (citing Rose v. State of New York, 24 N.Y.2d 80 (1969)).

The first prong of the trade fixture test outlined by the Kaiser court requires that the “chattel” be “constructively annexed” to the land.

The second prong, the adaptability test, requires “both fitting the chattel to the particular purpose of the freehold, and the necessity of the chattel for complete use of the freehold, as when machinery is placed in a factory to perform a special purpose and is fitted for that purpose.”

The third prong requires an objective analysis that the chattel was installed by the owner with the intention of permanence; i.e., “even if the machinery could be removed, the critical factor was whether its installation was intended to be permanent.” See Kaiser Woodcraft Corp., id. (citing McRea v. Central Natl. Bank of Troy, 66 N.Y. 489, 494 [1876]). Assuming that the first three prongs have been met, then, as stated above, the item at issue must not only have been used by the trade fixture claimant for business purposes at the time of the eminent domain acquisition, but the claimant must prove that the item would lose substantial value if it was removed and/or moved to a new location.

What are some items that have been deemed trade fixtures under the law? The Kaiser court explained:

Several decisions are illustrative of the meaning of the phrase. A substantial loss in value would occur, for example, where machinery was specially constructed for the plant, or the building was so designed that the subject items were functionally dependent on other items or on the building (Matter of New York City Tr. Auth. [Superior Reed & Rattan Furniture Co.], 160 A.D.2d 705, 706, 553 N.Y.S.2d 785 [2d Dept 1990] ). Another example would be equipment that functions as part of a truly integrated operation, such that the removal of one item diminishes the utility of remaining items (Matter of City of New York [Fassler], 27 A.D.2d 810, 811, 278 N.Y.S.2d 33 [1st Dept 1967] )… .

Kaiser Woodcraft Corp., id.

The laws allowing compensation to a business owner for the loss of its trade fixtures evolved in the courts to protect business owners who substantially improved their demised premises, but hold less than a fee interest. Luckily for these business owners, New York has long taken an expansive view in evaluating what improvements constitute legally compensable trade fixtures. Not only is “machinery deemed a fixture ‘where it is installed in such manner that its removal will result in material injury to it or the realty, or where the building in which it is placed was specially designed to house it, or where there is other evidence that its installation was of a permanent nature”. Matter of City of New York (Whitlock Ave.), 278 N.Y. 276 (1938); see also Matter of City of New York (Allen St.).

It is important to note that the trade fixture claimant is not required to carve out its trade fixture award from their landlord’s condemnation award (oftentimes called the “Unit Rule”), because New York does not follow the Unit Rule. Both the New York Court of Appeals and the Appellate Division have consistently held that “separate interests require separate awards,” so that each property interest holder (i.e., the real estate owner, the lessee) is entitled to their own condemnation award.

Therefore, trade fixture claimants in New York are entitled to their own, separate award for trade fixtures; and no part of the property owner’s award may be offset by a trade fixture award made to a commercial tenant. See Rose v. State of New York, 24 N.Y.2d 80 (1969); Whitehall Corners, Inc. v. State of New York, 210 A.D.2d 398 (1994); Matter of Incorporated Vil. of Hempstead, 38 A.D.2d 957 (1972); see also EDPL §§101, 302, 303.

Now that we know what the courts consider a compensable trade fixture (assuming that such item meets the four prong tests outlined above), the next question you must be asking is how are trade fixtures valued in eminent domain proceedings? That is a much simpler answer.

New York courts have consistently held that the proper method of valuation for trade fixtures is reproduction cost less depreciation. This means that each fixture item is valued based on the cost of reproducing that item as of the time of the eminent domain seizure, less the depreciation of such item, to arrive at its sound value.

In Universal Empire Indus., Inc. v. State, 149 Misc. 2d 773, 566 N.Y.S.2d 442 (Ct. Cl. 1990), the court held that:

[t]he rule in New York is that the proper method of valuing trade fixtures in place is by determining their sound value [citing City of Buffalo v. J.W. Clement Co., Inc., 28 N.Y.2d 241 (1971), and the sound value of a trade fixture in place is measured by the reproduction cost of the fixture less depreciation (citing Marraro v. State of New York, 12 N.Y.2d 285 (1963)).

Courts have used this specialty approach to valuation for many years, going back more than half a century. For example, in St. Agnes Cemetery v. State of New York, 3 NY2d 37 (1957), the Court of Appeals held that:

Since a trade fixture in place consists of the functioning trade fixture, the specialty building or shell which houses the fixture, required ancillary equipment, installation and the particular real property to which it is affixed, a realistic market for such fixtures does not exist and, consequently, market value cannot be found or does not result in the owner receiving his constitutional just compensation.

Accordingly, courts and commentators have held that such special purpose properties cannot be valued by the market value approach and, therefore, the constitutional standard of “[j]ust compensation is properly measured by determining what the owner has lost.”

Sometimes a real property is so unique that it may be valued as a trade fixture in New York. Some examples include signs and sign structures, certain types of cross-dock trucking terminals, ready-mix concrete plants, etc. See Tinnerholm v State, 15 Misc 2d 311, 320 [Ct Cl 1958].

When a property is so unique that it cannot feasibly be used for anything other than what it was built for, courts have held that these properties constitute a “specialty” property, and that the proper method for valuing them is the cost approach, or the reproduction less depreciation method. Specifically:

“[W]hen the property is of a kind seldom traded, it lacks a market price and there must accordingly be recourse to some other method of evaluation (see, e.g., Kimball Laundry Co. v. United States, 338 U.S. 1, 6, 69 S.Ct. 1434, 93 L.Ed. 1765). Churches, hospitals, clubhouses and like structures held by nonprofit agencies as centers for community service commonly fall within this category (Keator v. State of New York, 23 N.Y.2d 337, 339, 296 N.Y.S.2d 767, 244 N.E.2d 248; Matter of Simmons, 127 N.Y.S. 940; 1 Orgel, Valuation under Eminent Domain [2d ed], § 40)… .

As is also relevant herein, a specialty may be “best defined as a structure which is uniquely adapted to the business conducted upon it or use made of it and cannot be converted to other uses without the expenditure of substantial sums of money” (Great Atlantic & Pacific Tea Co., 42 N.Y.2d at 240, 397 N.Y.S.2d 718, 366 N.E.2d 808, citing People ex rel. Hotel Paramount v. Chambers, 298 N.Y. 372, 375 [1949]; Matter of Sperry Rand v. Board of Assessors of County of Nassau, 10 A.D.2d 720 [1960] ).

In re City of New York, 21 Misc 3d 1127(A) [Sup Ct 2008](Gerges, J.)

Once the following four criteria are met, then a real property may be valued as a trade fixture based on the cost approach:

1. The improvement must be unique and be specially built for the specific purpose for which it is designed; 
2. There must be a special use for which the improvement is designed and the improvement must be so specially used;
3. There must be no market for the type of property ... and no sales of property for such use; and
4. The improvement must be an appropriate improvement at the time of the taking and its use must be economically feasible and reasonably expected to be replaced.

See Matter of County of Nassau (Colony Beach Club), 43 A.D.2d 45 (2nd Dept. 1973); aff’d 39 N.Y.2d 958 (1976); see also In re Poe Ctr., 250 A.D.2d 304 (1st Dept. 1988), 680 N.Y.S.2d 533.

Specialty properties are rare but they do exist; therefore, they are valued in such a way as to compensate the condemnee for what they have lost. Even though trade fixtures are not real estate, they are valued similarly to specialty properties, as there is no other way to compensate the owner ‒ who holds less than a real estate interest but has still expended considerable sums of money to improve their business premises ‒ for what they have lost due to the seizure of their property by eminent domain.

Despite New York having the reputation as being the state that may have the broadest eminent domain authority in the country (granted to condemnors), the New York eminent domain laws protecting condemnees (both property owners and business tenants) are some of the strictest in the country. So although eminent domain is a stressful and scary time for many who are on the receiving end of it, New York laws do protect condemnees and ensure that they are made whole.

Reprinted with permission from New York Law Journal, © ALM Media Properties LLC. All rights reserved.

NYT Word Of The Day: "Eminent Domain"

Thanks to lawprof Donald Kochan for the heads-up: the "Word of the Day" in today's New York Times is ... "eminent domain."

Defined by the piece as:

"the right of the state to take private property for public use; the Fifth Amendment that was added to the Constitution of the United States requires that just compensation be made"

Ugh. The "right?" No mate, it's a sovereign power, not a right.

The piece then challenges the reader:

Can you correctly use the word eminent domain in a sentence? Based on the definition and example provided, write a sentence using today’s Word of the Day and share it as a comment on this article. It is most important that your sentence makes sense and demonstrates that you understand the word’s definition, but we also encourage you to be creative and have fun.

OK, we'll have a go. How's this for our entry: "Remember when the New York Times was the private beneficiary of the City of New York's abuse of its power of eminent domain when it declared the existing property blighted, so it could give the land (and tax breaks) to the paper for its new Times Square office?"

Add yours in the comments.

Registration For The 42d ALI-CLE Eminent Domain & Land Valuation Litigation Conference Is Underway (Don't Miss Out!)

Get ready to join your colleagues and friends in San Diego for the 42d ALI-CLE Eminent Domain & Land Valuation Litigation Conference.

The 41st Conference was in New Orleans. Here's a report of that event, and here are our reports from prior conferences in Austin and Scottsdale.

Here are some of the highlights of the upcoming Conference:

• Property Rights at the Supreme Court: DeVillier and Sheetz and What's Next
• Slow Take: Possession, Rent, Relocation, and Offset
• The Jury's View: How Jurors See Your Case
• From Penn Coal to Penn Central: How to Prove "Too Far"
• Leveraging Expertise in Eminent Domain Litigation: Working with Land Planners, Engineers, and Other Predicate Experts
• Kelo at Twenty: What Changed, What Didn't, and What's on the Horizon
• Viva Las Vegas: How the Nevada Judiciary Upheld Property Rights in 180 Land's Inverse Condemnation Taking
• Ethics: Guiding the Trolley: Perspectives on Professional Ethics in Eminent Domain for Lawyers, Appraisers, and Right of Way Agents
• "I Think I Shall Never See" Just Compensation For a Tree: Strategies to Securing Recovery for Trees, Crops, and Fixtures

And more. Check out the complete agenda here. Registration information here. 

We especially welcome first-time participants, or those returning after an absence. Connect (or reconnect) with your colleagues from across the nation.

Don't miss out: we have had record attendance in recent years, so hold your space now.

Come, join us!

Indiana: No Compensable Property Right In Traffic Flow; No Compensation For Impairment Of Access

We like it when courts include photos and maps.

The Indiana Supreme Court's ruling in State of Indiana v. Franciscan Alliance, Inc., No. 245-PL-118 (Oct. 31, 2024) isn't all that surprising. After all, the State's eminent domain action did not take access to the undeveloped property, and the owner was not entitled to compensation for the change in traffic flow brought about by the closure of an intersection. This increased the "circuitry of travel," but did not cut off the parcel.

Here's how the court framed the issue:

Here, there is no question that the State’s condemnation of Franciscan’s 0.632-acre strip of land is a taking requiring just compensation. Likewise, it is indisputable that this condemnation amounted to a taking of SCP’s easement rights over that strip of land. But the record confirms that the State has already paid compensation for those easement rights. Thus, the only question for us to resolve is whether either Franciscan or SCP was entitled to damages stemming from the State’s closure of Fairview Road’s intersection with State Road 37.

Slip op. at 7.

The court held that the "long-established rule" is "when a property's access points remain unchanged, the landowner cannot recover damages related only to increased circuitry of travel between the property and a public roadway because such damages do not result from the taking of a property right." Id. Because the closure of the nearby intersection didn't (directly) affect the owner's points of access and only "made travel a longer route," no property right was in play, and thus no compensation. Slip op. at 8. Compensation is reserved for those situations in which access to land is actually or constructively cut off.

Here's the rule:

Today, we reaffirm our long-established rule that when a road-improvement project leaves a property’s access points unchanged, a landowner cannot recover damages from changes in traffic flow between their property and a public road, as those damages do not result from the taking of a property right. And we hold that here, because the State’s construction project did not affect the owners’ access points to their properties, damages from the intersection closure were not compensable as a matter of law.

Slip op. at 2.

We understand that this is a long-standing rule. But does it make sense? Not to us, and it seems more technical than practical, as we noted in a brief long ago. Might the "injurious affection" approach be more realistic? We think so. But for now, that doctrine hasn't crept south of the border from Canada.

State of Indiana v. Franciscan Alliance, Inc., No. 245-PL-118 (Ind. Oct. 31, 2024)

New Just Comp Cert Petition: Is $0 Just Compensation Constitutional?

Here's a recently-filed cert petition which raises two questions about the constitutional calculation of just compensation.

Here are the Questions Presented:

A county unquestionably used real property that denied access to private property and allowed the private property owner to restore the denied access at the owner’s own expense, without county reimburse- ment. Although at trial a jury awarded substantial damages, the appellate court would eventually reduce damage to zero. The questions presented are:

1. When the government undisputedly takes a real property right, does a court have an independent duty to ensure that just compensation is more than $0?

2. Where there is a temporary taking of property rights, is it required under the Fifth Amendment to measure just compensation using the rental value of the property for the time it is taken?

Follow along on the Court's docket here.

Petition for a Writ of Certiorari, CBS MN Properties, LLC v. County of Hennepin, No. 24-331 (U.S. Sep. 24,...

New Ep, Eminent Domain Podcast: Lawprof Ilya Somin

Heads up: the second episode of the rebooted Eminent Domain Podcast is live, with host Bobby Debelak and guest law professor Ilya Somin. Here's the description of this ep:

Professor Ilya Somin of George Mason University and the Cato Institute discusses his work in drafting amicus papers in the Kelo case, working with Jane Jacobs, writing a book on Kelo (The Grasping Hand) a decade after the decision, and his current work on the costs of exclusionary zoning. Throughout, Bobby and Prof. Somin discuss the common ground that otherwise-differing philosophies find in property law.

We're not going to post up every new episode (you really should subscribe and get notifications yourself), but we figured while the podcast was getting its sea legs back it couldn't hurt to remind you. Check it out.

The Eminent Domain Podcast Is Back!

As we hinted at a couple of weeks ago, we have some good -- nay, great -- news: the Eminent Domain Podcast, retired earlier this year by its originator Clint Schumacher, is back with a new host and a slightly new title: "Come and Take It: The Eminent Domain Podcast."

Bobby Debelak has stepped into the host's chair. As you might be able to tell from the new title, Bobby is also a Texas lawyer.

Here's the first episode, where Client figuratively hands the baton to Bobby. If you haven't already subscribed to the feed, now's the time so you don't miss an episode. Available on all pod feeds, so be sure to get subscribed.

Are you as excited about this as we are?

Colorado App: Executory Contracts Admissible To Prove Value Of Condemned Property

We appreciate it when courts include photos and maps in opinions.

A quick one from the Colorado Court of Appeals on an issue of first impression in that state.

In City of Westminster v. R. Dean Hawn Interests, No. 23CA0315 (Aug. 1, 2024), the court concluded "for the first time, that an executory contract for the purchase and sale of land is relevant and admissible, at the district court's discretion, as evidence of the value of the condemned property." Slip op. at 1.

Short story: the city sought to take RDHI's a 37-ish acre portion of its 105-ish acre land to build a water treatment facility. The property is zoned for mixed-use development, and everyone agrees the highest and best use was for large-scale mixed-use development (including retain, office, and multifamily housing). Slip op. at 4. In addition to just comp for the property taken, RDHI sought severance damages to the remainder.

The parties' appraisers were pretty far apart: RDHI's opined the just comp for the property was $31-ish million, plus an additional $6-ish million for severance. The city's appraiser, on the other hand, concluded $9-ish million in compensation and no severance. Before the trial got underway, the city objected to introduction of, inter alia, evidence by RDHI of an option contract between it and a third party (Erickson) for a sale of the remainder property that was not completed. The city asserted the court should exclude evidence of this executory contract as speculative. 

The court said no, and the commissioners concluded that just comp was $25-ish million and $1.6-ish million for severance.

After first affirming the trial court's related ruling that several of RDHI's appraiser's comps were ok (see slip op. at 6-15), the court held that the commissioners were property allowed to consider the executory contract as evidence of value of the condemned property. 

Here's the situation regarding the RDHI / Erickson contract:

On April 4, 2022, RDHI and Erickson executed the Erickson agreement for Erickson’s purchase of the remainder, along with a small additional parcel of land that is not part of this condemnation action. Erickson indicated that it intends to build a senior housing facility on the remainder, with 1,500 independent living units. Erickson agreed to buy 73.9 acres from RDHI for $51,500,000 and paid a $515,000 deposit. The Erickson agreement included a due diligence period during which Erickson could terminate the contract and receive a refund of its deposit. Erickson sought two extensions of that period, and that period had not expired by the time of the valuation trial. By the time of trial, Erickson had taken significant steps toward the property’s development, including hiring a government relations firm to work with Westminster to ensure certain entitlements.

Slip op. at 16-17 (footnote omitted).

Hold on, the city argued, appraisers are only allowed to use evidence of completed transactions, not things like not-fully-completed sales! Slip op. at 19. The court acknowledged the general rule that "[a]n offer to purchase land that does not result in an actual sale is inadmissible to prove value of the subject land." Slip op. at 20. But lots of other courts have allowed such evidence in, in certain circumstances, the court concluded.

These are not merely offers, but transactions that go a bit beyond that. Executory contracts are not options either, but a valid agreement to buy and sell, in which the parties have really agreed to a price. Here, you had an actual agreement and price, a deposit, and a buyer who "is in the business of developing retirement communities and had developed a retirement property in Highlands Ranch, showing that two sophisticated parties executed the Erickson agreement." Slip op. at 24-25. 

And the buyer didn't just do that. It "had undertaken substantial efforts to move the property's development forward." Slip op. at 25. Given all that, the trial court did not abuse its discretion in allowing the evidence in. After all, the standards for admitting evidence of value in just compensation cases are liberal and "expansive and favor the admissiblity of evidence." Id.

Check it out. A good lesson in fundamentals from the court. And congratulations to our friend and colleague Sean Metherell for the win.

City of Westminster v. R. Dean Hawn Interests, No. 23CA0315 (Colo. Ct. App. Aug. 1, 2024)

Back To School For Dirt Law @ William & Mary, Season VII

Yes, the mysterious ducks remain -- and seem to have multiplied.

It's that time of the year again. Fall's-a-coming, and that means that starting today, we're back at the William and Mary Law School in Williamsburg, Virginia to lead two courses:

• Eminent Domain and Property Rights (W&M is one of the few law schools in the country that offer a course in eminent domain, just compensation, and takings)
• Land Use Controls (an especially hot topic at the moment)

The registration numbers for both courses are good (really good), and two full classrooms of Dirt Law goodness tells us something about this area of law -- it's really interesting, and a good place to make your way in the practice, and law students recognize that.

We don't use $400 casebooks in either class.

Time to jack back into the (takings and land use) Matrix.

Govt: We Were Really Really Really About To Pay...Until You Forced Us To Pay! Sewer Board Seeks Rehearing In Self-Executing Just Comp Case

Just a few posts ago, we put up the Louisiana Supreme Court's opinion in a case where property owners obtained a final inverse condemnation judgment ordering the New Orleans Sewer Board to pay just compensation.

Then...crickets. The sewer board did not satisfy the judgment. It relied on a provision in the Louisiana Constitution that says that the state and local governments don't need to pay civil judgments except when they want to.

The Louisiana Supreme Court didn't see it that way, and held that just compensation is "self executing" and that paying it is a ministerial duty, meaning that no statutory authorization is needed, and mandamus to compel payment is an available remedy for non-payment.

Now, the sewer board has asked the court for a do-over. In its motion for rehearing, it asserts that that earlier federal litigation is res judicata and already resolved the issue (although that case only held that a federal civil rights claim was not available, at least absent a showing that state law mandamus is not a viable remedy, which it turned out to be).

Perhaps the oddest -- or most chutzpah-y -- claim the sewerage board makes is that it is ready to pay up ... if only you gave us more time!

In truth, Korban and the SWB have been chronologically paying judgments, consistent with the SWB’s policy. Some of Plaintiffs were next in line to be addressed pursuant to the SWB’s policy and an offer of settlement would have been made promptly even in the absence of this litigation.

Br. at 7.

Come on, man, we're getting to it!

If you want to read more, here are the briefs:

• Sewerage Board's brief in support of motion for rehearing
• Property owners' brief in opposition

Stay tuned.

Plaintiffs-Respondents' Brief in Opposition to Application for Rehearing, Watson Memorial Spiritual Temple...

NC App: "Map Act" Takings Are Temporary, Valued Not By Rent But "by taking into account all pertinent factors"

A fairly short one from the North Carolina Court of Appeals, but well worth your time to read.

Mata v. N.C. Dep't of Transportation, No. COA23-1140-1 (July 16, 2024) is the latest in the "Map Act" takings cases that we have long covered. There, N.C. legislature adopted a statute that identified future highway corridors and then "restricted [owners'] fundamental rights to improve, develop, and subdivide their property for an unlimited period of time." Kirby v. N.C. Dep’t of Transp., 239 N.C. App. 345, 769 S.E.2d 218 (2015), aff’d, 368 N.C. 847, 786 S.E.2d 919 (2016). The Map Act also classified these properties as eligible for a 20% to 50% reduction of the appraised value for property tax purposes.

In Kirby, the North Carolina Supreme Court held that the restrictions the Act imposed amounted to a taking. In response, the N.C. legislature rescinded the Map Act.

The Matas own property that was burdened by the Map Act restrictions from the time of the adoption of the Act until it was repealed (August 1996 to July 2016). The question in the case is calculation of the amount of just compensation that NCDOT must provide.

First, the court rejected NCDOT's argument that the taking here was permanent and not temporary. True, Kirby held that the Map Act restricted owners' uses "for an unlimited period of time," but that was before the lege repealed the statute. Slip op. at 9-10. As the court noted:

The Map Act restrictions dates in effect were properly defined from DOT’s recording the highway corridors on 6 August 1996 until the corridors were rescinded as of 11 July 2016. The taking was no longer “indefinite.” The trial court correctly defined and concluded the dates above are the operative dates of Plaintiffs’ alleged temporary taking.

Slip op. at 10.

The court next rejected the trial court's conclusion that rental value was the proper way to determine just compensation for the temporary taking. But wait, you say, isn't rental value the time-tested method of determining just compensation for temporary takings? Yes, for sure.

But here, the court of appeals concluded that in an earlier case, Chappell v. N.C. Dep’t of Transp., 374 N.C. 273, 841 S.E.2d 513 (2020) (which we summed up here), the court held the "before and after" method was the right way. Consequently, the court of appeals held:

The damages are calculated based upon the diminution in value of Plaintiffs’ property during said period. Id. The trial court erred in ordering a calculation based on “rental value,” as the proper measure is any proven diminution in value during the relevant period “taking into account all pertinent factors” to include the reduction in accessed [sic] ad valorem taxes Plaintiffs benefited from during the relevant temporary taking. Id.

Slip op. at 10-11.

This strike us as odd. It's one thing to say that as a general proposition compensation for a temporary taking is calculated as the "diminution of value during the relevant period 'taking into account all pertinent factors'[,]" and another entirely to reject the trial court's conclusion that rental value is a way to make the determination apparently because it didn't "show its work" and invoke the magic words. On remand, would it pass muster for the trial court to conclude, "After taking into account all pertinent factors, the court concludes that rental value to be the proper measure of damages in this temporary taking"? We'd think so.

We suspect the court of appeals isn't reading Chappell properly. To us, that case did not hold that "all pertinent factors" are words that must be expressly invoked, but instead concluded that there are multiple ways to value temporary takings, as long as those methods take into account all pertinent factors (as all valuations must do, no?). It hardly seems like error here for the trial court to have reached the conclusion (after, we assume, assessing all pertinent factors that go into an expert's valuation opinion) that indeed, rental value is the most accurate way to ensure the owner has been put in a position he would have been had his property not been taken.

Will there be more? Stay tuned.

Mata v. N.C. Dep't of Transportation, No. COA23-1140-1 (N.C. App. July 16, 2024)

New (State Court) "Project Influence" Cert Petition* - Inadmissibility Of Evidence Of Use & Value Of Property As Condemned

The famous corner of India and Milk, Boston
(at least for takings nerds)

Today, along with our friend and colleague Hawaii eminent domain lawyer Mark M. Murakami, we filed this Application for a Writ of Certiorari* in a condemnation case that has been pending for more than a decade (including more than five years in the court of appeals). We posted about the case -- including an aerial video of the property, located on Maui's south shore -- here.

The Question Presented:

May a jury determining just compensation consider evidence of the influence of the condemnation on the fair market value of property being taken?

You eminent domain types know the answer to this: No.

Indeed, no way! If you thought the "project influence" rule is a baseline requirement of the Fifth Amendment, a rule applied by courts nationwide, and for ages has held that "any increase or decrease in value to the condemned land directly attributable to the project for which the land is taken must be disregarded in determining the market value of the land," you'd be right. This is hornbook stuff. Nichols material. So obvi it almost goes without saying. Or at least should. Especially where, as here, the "project' is a single-parcel taking, so there is zero question about the scope of the project, or its influence (as you know, condemnation of a divided estate automatically terminates all lesser estates).

We won't go into great detail here on how this issue arose or why it has gotten this far, and will only recount the short story: the State of Hawaii was the tenant under a long-term lease of Williams's land. Twenty years into the lease, and with 10+ years remaining, the State decided it didn't like paying the rent and filed an eminent domain lawsuit. Kinda sus from a public use standpoint, but okay...

But then to add insult to injury, the State asserted it owed as just compensation only the value of the fee simple parcel.

Williams countered that on the date of valuation, the property was held as a divided estate, and thus must be valued as a divided estate. It was income-producing property and he was ready to introduce evidence that its actual use was also its highest and best use. And not only did the State's theory violate the project influence rule (the only way a buyer could obtain the fee simple estate from Williams would be by exercising eminent domain), it also ran afoul of another age-old Fifth Amendment rule:

But the Constitution does not require a disregard of the mode of ownership—of the state of the title. It does not require a parcel of land to be valued as an unencumbered whole when it is not held as an unencumbered whole. It merely requires that an owner of property taken should be paid for what is taken from him.

Boston Chamber of Commerce v. City of Boston, 217 U.S. 189, 195 (1910). [Ah, now you understand why in a case about Hawaii, photos of the site of the Boston Chamber  case are posted.]

But the trial court was having none of it. It not only barred Williams from offering evidence of the value of his land as income-producing property, but also adopted the State's theory that the sole admissible method of valuation was by applying the "undivided fee" rule.

The Hawaii Intermediate Court of Appeals correctly reversed in an unpublished opinion the trial court's exclusion of the market value of Williams' property as income-producing property. But the court did not, unfortunately, complete the circle and also prohibit the State from introducing evidence of the fee simple valuation. Why? Because the only way to get a fee simple valuation would be to allow the jury to consider evidence of the project's influence on value. And that is a big constitutional no-no.

Looking at the map from the Boston Chamber opinion,
while on the street at the location. So meta.

We'll have more as this case progresses. We shall also post up more photos of the Boston Chamber location, taken during one of our "takings pilgrimages" in a separate post.

----------

*Under the Hawaii Rules of Appellate Procedure, when you ask the Hawaii Supreme Court for discretionary review, it isn't a "Petition," but rather an "Application." Even though the party is designated a "Petitioner." Go figure. We kind of like funky local twists like this because they are good reminders that we haven't quite reached the bland, boring, "national-franchise" stage of law practice yet.

Application for a Writ of Certiorari, State of Hawaii by its Att'y General v. Williams, No. SCWC-18-0000879...

"A judgment for inverse condemnation, left unsatisfied, does not constitute the payment of just compensation." Government Has A Ministerial Duty To Pay (And You Know What That Means)

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

In Watson Memorial Spiritual Temple of Christ v. Korban, No. 24-0055 (June 28, 2024), the Louisiana Supreme Court unanimously affirmed the Court of Appeal, concluding the duty to actually pay just compensation for a taking is ministerial. 

That may not seem like an earth-shattering conclusion. After all, since at least 1987, the U.S. Supreme Court has labeled the Just Compensation Clause as "self-executing" which means that if there's been a taking, there must be compensation. Must means must. At least that's what it means to us.

But as readers of this blog know, you can get a final judgment for inverse condemnation from a Louisiana court, but the defendant/taker retains the discretion whether to actually pay it, and the usual judgment-enforcement procedures are not available. That comes from this provision in the Louisiana Constitution:

Notwithstanding Paragraph (A) or (B) or any other provision of this constitution, the legislature by law may limit or provide for the extent of liability of the state, a state agency, or a political subdivision in all cases, including the circumstances giving rise to liability and the kinds and amounts of recoverable damages. It shall provide a procedure for suits against the state, a state agency, or a political subdivision and provide for the effect of a judgment, but no public property or public funds shall be subject to seizure. The legislature may provide that such limitations, procedures, and effects of judgments shall be applicable to existing as well as future claims. No judgment against the state, a state agency, or a political subdivision shall be exigible, payable, or paid except from funds appropriated therefor by the legislature or by the political subdivision against which the judgment is rendered.

La. Const. art. XII, § 10(c).

A judgment for just compensation is a civil money judgment, and you cannot get paid (or use the usual tools to compel payment) unless the taker appropriates the money. In short, at least in Louisiana the "requirement" to pay just compensation is interpreted by governments as more of a suggestion than an actual requirement.

That's what happened here. Property owners obtained just compensation judgments as the result of a successful inverse condemnation case against the Sewerage and Water Board of New Orleans. The judgment withstood the SWB's appeals. You'd think that would be the end of it, and the SWB would do its duty and provide the ordered compensation for the taking. But no. SWB didn't appropriate the funds to satisfy the owners' just compensation judgment.

After waiting, the owners filed a federal action asserting the SWB had taken private property without just compensation. When the federal courts were presented with the issue, they held that the property owners were merely trying to enforce the state court inverse condemnation judgment, and not their self-executing right to just compensation. And even though the state court judgment is an inverse condemnation judgment for just compensation and failure to pay makes it a (federally) unconstitutional taking, that makes no difference because federal courts are not in the business of enforcing state court judgments. Thus, the courts held, there's nothing that can be done to force a taker to, you know, actually pay compensation. You just have to rely on the good graces of the takers.  

That didn't comport with the notion that payment of just compensation is a "must" and not a "if you feel like it" requirement. So even after the U.S. Supreme Court declined to take up the federal case, the property owners/condemnees went back to Louisiana's courts and sought a writ of mandamus and a writ of fieri facias, arguing that the duty to provide compensation for a taking is a ministerial, nondiscretionary duty, and thus a court can order a recalcitrant condemnor to pay up. 

As we posted earlier, the Louisiana Court of Appeal agreed with the property owners: After a taking, providing just compensation is a ministerial duty. Pay up, or face the usual collection methods, SWB. 

The Louisiana Supreme Court is right in the heart of the Vieux Carré.
Remember that next time you schedule a case in that court.

Not content with that outcome, the SWB sought discretionary review with the Louisiana Supreme Court, which agreed to hear the case. The unanimous opinion first noted the state constitutional provision above. But then also noted that the Louisiana Constitution (like its federal counterpart) makes the payment of compensation mandatory. See La. Const. art. I, § 4(b)(1) ("Property shall not be taken or damaged ...except for public purposes and with just compensation..."). Thus, the owners "are entitled to payment of just compensation[.]" Slip op. at 11.

The court next addressed "the narrow issue ... whether said payment may be judicially compelled." Slip op. at 11-12. If the duty to pay compensation after a taking is ministerial, a court may issue a writ of mandamus to compel performance of that mandatory duty. The opinion reviewed existing Louisiana decisional law, and distinguished those cases which held that payment of a civil judgment by the state or a local government is not a ministerial act, on the grounds that the just compensation requirement is different. A "specific constitutional or statutorily provided exception will overcome the mandates of La. Const. art. XII, § 10(C) and La. R.S. 13:5109 B (2)." Slip op. at 17. The just compensation requirement is one of those exceptions:

In the case sub judice, there exists an express constitutional provision that provides, in part: “Property shall not be taken or damaged by the state or its political subdivisions except for public purposes and with just compensation paid to the owner or into court for his benefit.” La. Const. art. 1, §4(B)(1). This constitutional provision provides the authority, as was encompassed in our reasoning in Mellor, 370 So.3d 388, and Crooks, 359 So.3d 448, for a mandamus action against a political subdivision based on a judgment for inverse condemnation. For these reasons, we find the holdings of Lowther, 320 So.3d 369, and Jazz Casino, 223 So.3d 488, applicable to the case at bar; we further find that Mellor, 370 So.3d 388, and Crooks, 359 So.3d 448, although decided correctly under the facts and law, to be distinguishable from the case herein. A judgment for inverse condemnation, left unsatisfied, does not constitute the payment of just compensation. Therefore, we conclude, based on the mandates of La. Const. art. 1, §4(B)(1), that the payment of just compensation for a judgment arising from inverse condemnation is a ministerial, non-discretionary duty; therefore, mandamus may issue to enforce a final judgment for just compensation. Accordingly, via a mandamus action, the Neighbors may seek a court to compel the SWB’s compliance with this constitutional mandate.

Slip op. at 18.

Inverse condemnation is similar and indistinguishable from straight-up expropriation, and "both are afforded protections provided under La. Const. art. 1, §4(B)(1)." Slip op. at 19.

Two Justices separately concurred. Chief Justice Weimer wrote to argue that in addition to a mandatory legal duty to pay, the judgment creditor should also have to prove a "conscious indifference" on the part of the government to pay the judgment. Justice Griffin also wrote separately to note that "most provisions in the Declaration of Rights are self-executing, and use mandatory language (e.g., 'shall' and 'shall not'), [and] their enforcement is distinguishable from contact and tort." He concluded: "Plaintiffs herein seek mandamus of a self-executing, mandatory provision of the Declaration of Rights."

Our colleagues Kady Valois, Deb La Fetra (Pacific Legal Foundation), and Sarah Harbison (Pelican Policy Institute) filed this amci brief supporting the property owners on behalf our PLF and the NFIB Small Business Legal Center ("To require the very political subdivision that violated the property owners’ constitutional rights to first consent to this essential limitation on its power would eviscerate the constitutional mandate of any effectual meaning."). 

A hearty congratulations to our friend and colleague Randy Smith and his team for this important victory.

Watson Memorial Spiritual Temple of Christ v. Korban, No. 24-0055 (La. June 28, 2024)

La Cour suprême du Canada: In Constructive Takings, Compensation Calculated Without Reference To "The Scheme"

Readers know that from time-to-time, we like to cover the going's on in the courts of our neighbors to the north. See here and here, for example. Although property rights are not a constitutional principle in Canada (the people did not include property as a fundamental constitutional right when the Constitution was amended last), there's a lot for U.S. lawyers to learn from the way Canada law treats those from whom the government must expropriate property (either directly, or in what they call "de facto" or constructive takings (i.e., regulatory takings and inverse condemnation). In some ways, their system treats property owners slightly better than our constitutional system.

Well, here's the latest in a case we've been following.

In St. John's (City) v. Lynch, 2024 SCC 17 (May 10, 2024), the Supreme Court held that compensation in a de facto taking is calculated by excluding the effects of the challenged regulation. What they call up there the "Pointe Gourde principle" -- the idea in expropriation valuation that the effects of "the scheme" should not influence the calculation of compensation -- what we call "the scope of the project" rule, or even the "before and after" rule. 

Rather than continue to delve into areas well beyond our expertise and understanding, we're going to refer you to a blog post by our Toronto friend and colleague Shane Rayman and his firm colleagues Conner Harris and Leah Cummings. They filed a friend-of-the-court factum on behalf of the Canadian Home Builders Association. The Court adopted much of their reasoning, by the way.

In "Supreme Court of Canada Clarifies Law of Constructive Takings," they write:

The Court confirmed that the Pointe Gourde principle, also known as “screening out the scheme”, applies to constructive takings in the same way as it does to statutory or de jure expropriations. The Pointe Gourde principle is a common law rule invoked as part of the determination of market value when land is expropriated. The principle seeks to remove extrinsic influences associated with the taking, ignoring both increases and decreases in value caused by the expropriation scheme to avoid placing an economic burden on the expropriated owner or granting to them a windfall gain (para 37). The Court clarified the application of the Pointe Gourde principle and confirmed that land-use regulations undertaken “with a view to the expropriation” must be screened out when determining the market value of expropriated land. This is the case regardless of whether the taking is de jure or constructive.

Check both the opinion and their post out.

Many good lessons await for U.S. property lawyers.

St. John's (City) v. Lynch, 2024 SCC 17 (Supreme Court of Canada, May 10, 2024)

CA4: Jury Is Free To Cut-And-Paste Various Just Compensation Evidence To Reach A Verdict "Within the range of credited testimony"

Check out the U.S. Court of Appeals for the Fourth Circuit's opinion in Mountain Valley Pipeline, LLC v. 8.37 Acres of Land, No. 23-1532 (May 14, 2024).

The caption tells you it is a federal eminent domain case, specifically the Mountain Valley Pipeline, a very controversial and much-objected-to natural gas pipeline in the Virginias. The issue was one of the amount of compensation.

One appraiser testified to a certain use and a certain high-low range. Another appraiser testified to different uses and a different high-low range. The jury reached a just compensation verdict that wasn't based on one appraiser's testimony or the other's, but on some amalgamation of the two. 

As we know, a oft-applied rule is that a jury's just comp verdict must be "inside the range of credited testimony." The trial judge concluded the verdict violated this rule because the jury had apparently picked-and-chosen. Slip op. at 10. ("It reasoned that to reach that amount, the jury must have combined Gruelle’s valuation of the property prior to the taking with another expert’s diminution percentage. And because Gruelle valued the land as a wind farm, applying any other expert’s diminution percentage, which were each based on a residential use, was improper."). The District Court entered JNOV (sorry kids, JMOL).

The Fourth Circuit reversed, and held that the verdict was based on the evidence presented at trial, it was not the trial judge's place to second-guess the jury. It might have been "mixed" testimony from two different appraisers based on differing uses,

[b]ut the jury may accept or reject any part of an expert’s testimony and remain within the range of credited testimony even if it does not adopt any one expert’s testimony wholesale. Smoot, 248 F.2d at 829. Moreover, when a jury views a property itself, as it did here, it has “a wide latitude” to apply its own judgment of the property’s value. Id. And, significantly, although Appellee argues that the jury here could not have come up with the award that it did without improperly mixing commercial and residential valuations, Appellants explain that the verdict can, in fact, be calculated without doing so.

Slip op.at 14-15.

For sure, the jury can't just make stuff up. So what might the jury have done to reach its conclusion?

Slip op. at 16 (for a narrative of that calculus, start on page 15).

Essentially, as long as there is some plausible explanation that would support the jury's verdict, the court should enter it, not overrule it. The court should not substitute its sense of methodology. See slip op. at 16 ("We agree with Appellants that the jury clearly could have reached its verdict using residential values alone without the need to venture beyond the credited testimony. And in doing so, the jury could accept or reject any part of each expert’s testimony -- its verdict did not have to conform to the just compensation of any one witness. Because the jury’s verdict can be supported using residential values alone, it is unnecessary for us to decide whether it is improper for a jury to mix commercial and residential valuations in just compensation cases.").

Stick with the jury: a good trend.

Mountain Valley Pipeline, LLC v. 8.37 Acres of Land, No. 23-1532 (4th Cir. May 14, 2024)

A Must-Listen Infrastructure Junkies Podcast: "Curtain Call for the Eminent Domain Podcast!"

Our friends Kristen and Dave at the Infrastructure Junkies Podcast are doing what we hoped they would: they've convinced Clint Schumacher to appear as a guest and reflect on his Eminent Domain Podcast, which has produced its final episode:

The popular Eminent Domain Podcast signed off after a successful six year run. The Eminent Domain Podcast's host, Texas attorney Clint Schumacher, joins the Infrastructure Junkies to reflect upon his show, his experiences, and all that he learned from being the pioneer podcast for the eminent domain industry. Listen in while Clint is on the business end of a rough cross examination!

It's great to hear Clint one more time. Be sure to listen!

$48 Million The Hard Zoning Way: Thanks To NIMBYs And NIMTOOs, Las Vegas Must Pony Up A Lucas Takings Judgment

If there's a money quote in yesterday's opinion by the Supreme Court of Nevada which "wholly affirm[ed] a trial court judgment awarding $48 million in just compensation for Las Vegas's regulatory taking in City of Las Vegas v. 180 Land Co., LLC, No. 24-13605 (Apr. 18, 2024), it might just be this sentence:

Although the City rejected 180 Land's development proposals, its representatives had previously recognized the site's ability to be developed residentially.

Slip op. at 8.

That alone should tell you where this one is ultimately headed. But let's break it down and see how this got there.

Residential PUD Zoning

It started off well for the property owner, who owned land it wanted to use as a golf course, part of a (much) larger 2,200 acre ranch. The city preliminarily approved a request to zone the proposed golf course for residential PUD (planned unit development - which should reveal to you land uses when this went down (1980s)). In 1990, the city was satisfied and the golf course area was zoned R-PD7 (Residential Planned Unit Development).

This being Nevada, the zoning approval meant that the golf course was actually built.

General Plan: Open Space

During the construction, the city adopted a new General Plan which designated the parcel as "Parks/Schools/Recreation/Open Space." But despite the change in the GP, the zoning was not altered. Indeed, in 1986, the city confirmed in a letter that the R-PD7 zoning remained for the golf course. And in 2001, the city adopted another ordinance that "formally rezoned it to R-PD7 on the Official Zoning Map Atlas, and repealed any previous conflicting ordinances." Slip op. at 5.

By 2015, however, the golf course was struggling. "[T]he operator of the golf course informed the then-landowners, Fore Stars, Ltd., that it could not longer make a profit operating the golf course and thereafter terminated the lease in 2016." Id.

Residential Zoning, Residential Development

That same year, an outfit known as "180 Land" acquired the assets of Fore Stars, including the golf course area, and later a fellow named Yohan Lowie acquired ownership. It was time to change the use from a golf course to something more in line with the zoning.

180 Land segmented the 9 parcels of the golf course into four development areas. One of these, a 35-acre parcel, became the focus of the dispute. In 2016, 180 Land sought to develop the site, first by seeking to change the GP designation from Open Space to low-density residential, and then by submitting typical development applications such as a Tentative Map, and site review. City staff recommended approval. While these were in-progress, 180 Land also sought approval of a new Master Development Agreement. Staff was on board with that as well.

Successful Opposition to the Residential Project

Then came the opponents, a "homeowner group" which challenged the city's approval of a separate application for another one of the four former golf course parcels. Next up, the discussion of the 35-acre parcel residential development at a City Council public hearing became "contentious," with "strong public opposition to 180 Land's applications." Slip op.at 7.

The walls came tumbling down:

The City ultimately denied the applications despite the City's planning staff having recommended approval. The City's final decision stated that the denials were "due to significant public opposition to the proposed development, concerns over the impact of the proposed development on surrounding residents, and concerns on piecemeal development of the Master Development Plan area rather than a cohesive plan for the entire area." Despite rejecting the 35-acre application, in part because of concerns over "piecemeal development," the City also rejected the comprehensive Master Development application in August 2017, two months after rejecting the 35-acre application. Also in August 2017, the City rejected applications from 180 Land pending since 2016 for three access points to the golf course acreage from neighboring public streets and to install fencing around two water features on the acreage. The City stated it denied the applications because of "the various public hearings and subsequent debates concerning the development on the subject site" and instructed 180 Land to file an application for a "Major Review" under the City's municipal code. 180 Land did not file any Major Review applications. The City also denied 180 Land's application for a technical drainage study, though Las Vegas Municipal Code (LVMC) 19.16.105 requires such a study before residential development is allowed.

Slip op. at 7-8.

City's Representations

But that wasn't the end of the story. "Although the city rejected 180 Land's development proposals, its representatives had previously recognized the site's ability to be developed residentially." Slip op. at 8. Various city employees and officials confirmed that the city had already approved the residential zoning of the property and under Nevada land use law, zoning is king: if the GP is inconsistent with the zoning, the zoning trumps. 

Inverse Condemnation

Next up, an inverse claim in a Nevada state court. The trial court held that the "hard zoning" was indeed R-PD7, meaning that 180 Land had "as a right" a single-family and multiresidential development. Slip op. at 9. You know what that means: the city could either let 'em build, or condemn. It could not use its police power to deny the "as of right" development. The trial court granted 180 Land multiple summary judgments on liability, and considered valuation evidence of just compensation:

[T]he district court ultimately adopted 180 Land's expert's valuation of the land, $34,135,000, noting that the City did not present any contrary valuations or any other rebuttal evidence and did not depose 180 Land's expert. The district court also granted 180 Land's requests for reimbursement of its property taxes, prejudgment interest, and attorney fees. In doing so, the district court rejected 180 Land's request for a 23-percent prejudgment interest rate, calculating its prejudgment interest award using a prime plus 2-percent rate. The final judgment in favor of 180 Land totaled $48,114,039.30.

Slip op. at 9-10. Both sides appealed. The city sought to overturn the takings judgment, while 180 Land challenged the amount of prejudment interest.

Nevada Supreme Court: a Right to Develop

The Supreme Court described the issue as "whether the site's R-PD7 residential zoning or its PR-OS land designation [on the General Plan] governed 180 Land's ability to develop the property and/or conferred certain rights on 180 Land." Slip op. at 10. When the taking issue is framed that way (as a land usey and not a takings issue), then you can kind of see where this one is going. If the zoning defined 180 Land's property rights, game over. Vested, etc. If the city's argument -- that it could deny "any development applications" inconsistent with the GP designation were accepted, then no property and no taking.

In short, the taking issue turned on the question of whether zoning or the General Plan controlled the use of 180 Land's land. You can read pages 11-12 of the opinion for the details, but the short story is that the court concluded that indeed, zoning is law while the GP is "not a legislative mandate from which no leave can be taken." Slip op. at 11.

Plan/Zone Consistency?

What about the rubric in Nevada land use law that zoning must be consistent with a general plan? The court was not convinced because "[t]he problem with applying the consistency requirement in this case is that the substantial evidence demonstrates that the R-PD7 zoning predated the PR-OS land designation." Slip op. at 12. Zoning: 1986. GP: 1992. And the court also noted that the ordinance adopting the PR-OS GP designation expressly noted that the GP designation didn't modify or invalidate the existing zoning.

Murr Denominator Parcel

Having determined that 180 Land had a vested right to develop in accordance with the residential zoning, the court held that the city's denial of its residential development applications was a taking. The court identified the property interest: the 25-acre parcel. It rejected the city's claim that Murr v. Wisconsin required the denominator to be the entire 9-parcel former golf course.

The court applied the multi-factor Murr standard to conclude that no, the property here was only the 35-acre residentially-zoned parcel, not the other of 180 Land's holdings. The court also rejected the city's claim that the case wasn't even ripe because 180 Land submitted "only one development application[.]" Slip op. at 21. To the court, that one denied application was enough, and "any further attempts to apply for development by 180 Land would have been futile[.]" Id.

Lucas Wipeout

On the merits, we urge you to read pages 24-26 of the opinion, where the court analyzes the case to conclude that this worked a "per se regulatory taking." In short, a Lucas economic wipeout. This passage is worth quoting at length:

The City's denials of 180 Land's applications and the discussion of those applications at various city council meetings show no meaningful indication that the City would allow any development on the 35 acres. As noted above, the City's denials stated it was rejecting the applications based on strong public opposition and that 180 Land had not provided a cohesive plan for the entire golf course acreage. But the City provided no regulatory basis for the denials13 that would allow 180 Land to seek a variance or submit an amended application that would resolve any such issues. The City similarly rejected 180 Land's Master Plan application that provided a cohesive plan for the golf course acreage. That these denials occurred despite the City's planning office working with 180 Land on at least one of the proposals and repeatedly recommending that the City approve the applications underscores an unwillingness to allow any development. And the City did not provide 180 Land with any viable alternatives for it to reap economic benefit from the 35 acres when denying its applications. In short, the City's actions demonstrate that it would not approve any development on the 35 acres. Further, we discern no error in the district court adopting 180 Land's expert's opinion that, without the ability to develop the 35 acres, it had no economic value

Slip op. at 25-26.

Just Compensation

The court next considered the city's argument that the trial court got the just compensation wrong. No abuse of discretion, so judgment affirmed. The most interesting part of this part of the opinion in our opinion is on pages 28-29, where the court noted that the landowner met its burden of introducing relevant valuation evidence (an expert who opined on the land's value in its highest and best use). And, stunningly, that the city
"presented no contrary evidence[,]" and didn't even depose 180 Land's expert. Indeed, it made no effort to rebut the expert report.  Slip op. at 29. Whoa.

And what of the landowner's appeal on the amount of prejudment interest? No go because the rate it sought would not merely make up for the delay in payment, but would "reimburse it for the purported profit it lose had it been able to develop the land." Slip op. at 32.

The opinion ended by summing up:

When a governmental agency acts in a manner that removes all the economic value from privately owned land, just compensation must be paid. Here, the City's actions demonstrated a refusal to allow any development on the 35-acre parcel owned by 180 Land such that the parcel no longer had any economic value. The district court therefore did not err in finding that a taking occurred. Nor did the district court err in its just compensation award, as it based that decision on uncontroverted evidence from a duly admitted expert witness.

Slip op. at 32.

There it is.

Congratulations are in order for our Nevada colleague Kermitt Waters and his firm.

City of Las Vegas v. 180 Land Co., LLC, No. 24-13605 (Nev. Apr. 18, 2024)

New Article: 2024 National Eminent Domain Update (Practical Real Estate Lawyer, May 2024)

Thanks to our co-author, the ever-wonderful Amy Boulris, and the good people at ALI-CLE for shepherding us through the process of getting the 2024 National Eminent Domain Update published in The Practical Real Estate Lawyer, and for allowing us to post it here.

This is our summary of what we think were the most interesting -- if not the most important -- eminent domain cases over the past year from state and federal courts.

Amy Brigham Boulris & Robert H. Thomas, 2024 National Eminent Domain Update (ALI-CLE Prac. Real Est. Lawyer...

Vermont: It Doesn't Matter If Property Owner Realizes That Cashing A Check For Estimated Compensation Waives Public Use Challenge

Under many (most?) state eminent domain schemes, if a property owner withdraws the condemnor's deposit prior to the judgment of condemnation, the owner waives -- or, more technically, forfeits -- the ability to challenge public use and necessity. 

Vermont is no different, and under its statute, waiver is triggered by the owner's "acceptance and use" of a payment:

Except in the case of agreed compensation, an owner’s acceptance and use of a payment under this section does not affect his or her right to contest or appeal damages under sections 511-513 of this chapter but shall bar the owner’s right to contest necessity and public purpose.

19 Vt. Stat. Ann. § 506(c).

The Vermont Agency of Transportation was doing one of those interstate interchange reconstruction projects, and needed some nearby property. After some procedural wrangling about which property owners need to be included in the case, it sent the owners checks, which the owners or their agents deposited. The trial court determined that depositing the checks constituted "acceptance and use" of the payments, and the owners thus waived the owners' public use challenge.

In Agency of Transportation v. Timberlake Associates, LLC, No. 23-AP-059 (Mar. 2024), the Vermont Supreme Court affirmed. Most of the opinion centers on the statutory interpretation question about whether the term "acceptance and use" covers what happened here. Short story: the court held yes, depositing the checks is "use" of the payments:

The noun “use” is defined as, among other things, “the fact or state of being used,” and definitions of the verb form include “to put into action or service . . . avail oneself of,” “to expend or consume by putting to use,” and “to carry out a purpose or action by means of.” Use, Merriam-Webster Online Dictionary, https://www.merriam-webster.com/ dictionary/use [https://perma.cc/ZX52-XHDL]. Depositing a check is a means of “avail[ing] oneself of” a payment. The payment is thereby “put into action or service” because control of the amount paid passes from the issuer of the check to the payee, who gains exclusive access to those funds upon deposit. ... Thus, an interpretation of § 506(c) under which depositing a check is one “use” of a payment is consistent with the plain and ordinary meaning of the term.

Slip op. at 8 (footnote omitted).

The more interesting question to us is whether, notwithstanding the owners' waiver under the statute, "they have a constitutional ... right[] to contest necessity and public purpose ... and the Agency was therefore required to show that they knowingly, intelligently, and voluntarily waived those rights[.]" Slip op. at 12. The court held no, the statute is enough, and even if the owners didn't understand that depositing the Agency checks would trigger waiver under the statute, the notion that ignorance of the law isn't an excuse for compliance. The owners here were also represented by counsel, and the court's judgment included express notice of the statute. "Defendants have identified no basis to conclude that the Agency was required to show knowing, intelligent, and voluntary waiver in order to invoke § 506(c) under these circumstances." Slip op. at 13.

Finally, the court declined to rule on the owners' argument that the statute is unconstitutional "because it is designed to cause involuntary waivers of the constitutional and statutory right to challenge necessity and public purpose." Id. Not raising the issue when perfecting the appeal meant that argument (like the public use challenge itself) was waived. 

Agency of Transportation v. Timberlake Associates, LLC, No. 23-AP-059 (Vt. Mar. 2024)

Take It To The Limit, Eminent Domain Podcast: Fare Thee Well, Clint.

You can spend all your time making money.
You can spend all your love making time.
If it all fell to pieces tomorrow, would you still be mine?

Count me as very surprised, and a bit saddened, when earlier this week my inbox pinged with notification that the latest episode of Clint Schumacher's Eminent Domain Podcast had dropped. And instead of it being a session with a lawyer, legal scholar, appraiser, property owner, right of way agent, or other fascinating guest, I learned the Episode 128 was to be the final edition. Or as Clint puts it, the "Farewell Episode."

For the past several years, I got used to twice a month receiving notification that Clint had posted a new episode. I'd click though to the bumper music and that familiar intro:

Welcome to the Eminent Domain Podcast with your host Clint Schumacher of Dawson & Sodd LLP. This is the discussion forum for the eminent domain community. Join us as we seek insight from industry thought leaders and experts. We'll follow the latest news in the eminent domain world: cases, projects, laws, and policies through the voices of the people who are shaping how we apply the Fifth Amendment!

I knew that I was in for a half-hour or more of dirt law goodness. (Thankfully, Clint is leaving up the full 128 episode catalog, so we can continue to access it.)

And, of course, a bit of levity: Clint's "cross examination" feature -- where he asked the guest some "fun and quick-hitting questions that are designed to let our listeners get to know the guest a little bit better." Things like "if you could leave any message on a billboard for 30 days, what would it be?," or "if you could bring back one fashion trend, what would it be?" or "what books or podcasts do you recommend?" I always liked that part of the program.   

As much as I am going to miss the Eminent Domain Podcast being a regular feature on my calendar, I understand the kind of day-in-and-day-out effort that producing the podcast took. Time, energy, and putting your heart into it. Finding and booking guests, preparing for interviews, editing and making the guests sound really, really good (I can attest to this personally, thank you Clint). And when one episode was ready, doing it all over again. All for no monetary reward, and while continuing to carry on a robust courtroom calendar representing clients. Let me say one final time how much I appreciated Clint doing this for all of us who find this stuff fascinating.

Be sure to listen to this final episode. It's Clint going solo -- no guest -- and offering his thanks and saying his goodbyes. Generous and gracious as always, Clint runs down some statistics, does a bit of reminiscing, and shares a "behind the music" never-told-before story. A little reminder of what we're going to miss. 

All alone at the end of the evening.
when the bright lights have faded to blue.
I was thinking about a woman who might have
loved me, and I never knew.
You know I've always been a dreamer,
spent my life running round.
And it's so hard to change,
can't seem to settle down.
But the dreams I've seen lately
keep on turning out and burning out
and turning out the same.

So put me on a highway,
and show me a sign.
And take it to the limit one more time.

You can spend all your time making money.
You can spend all your love making time.
If it all fell to pieces tomorrow,
would you still be mine?

When you're looking for your freedom,
and nobody seems to care.
And you can't find the door,
(can't find it anywhere).
When there's nothing to believe in.
Still you're coming back,
you're running back,
you're coming back for more.

So put me on a highway,
and show me a sign
And take it to the limit one more time.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Texas Eminent Domain Conference: April 25-26, 2024, Austin

Texans: now is a good time to register for the 23d Annual Texas Eminent Domain Superconference, April 25-26, 2024, at the Austin Country Club in Austin.

We spoke at the Conference last year and in other editions, and can report that it is excellent. Check out the faculty and agenda, and then register and reserve your spot.

"What is Inverse Condemnation?" Join Us In the EDROW Clubhouse, March 6, 5pm, To Find Out (And More)

Save the date (and time): next Wednesday, March 6, 2024, at 5:00 p.m., Eastern Time, as we rejoin our friends and colleagues Patrick McAllister and Beth Smith, as they co-host the Eminent Domain and Right of Way Club.

We'll be joining them to try and answer that question, "What is Inverse Condemnation?" As Patrick and Beth note, "[w]e will find out what it is, how it works and when does it happen....and probably a lot more." Sounds intriguing.

For those of you who may not have participated in one of these sessions before, you may be wondering "what is this 'Clubhouse' thing?" Here's the description, straight from their site:

The Eminent Domain & Right of Way Club is on the Clubhouse Drop in audio app. This Club is geared toward right of way professionals & anyone interested in the acquisition of land rights for infrastructure projects.

In short, it is a smartphone-only app, that connects participants to an audio-only chat room, where you informally hang out and listen to Pat and Beth speak with a guest, followed by a moderated open-mic (again, audio) chat room. Having participated before, we can say it is a very informal, friendly, and collegial venue to learn and discuss things. No pressure, no big whoop. It's just talk.

Come give it a try!

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

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

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

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

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

Excitement this way...

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

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

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

Here's more. 

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

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

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

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


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


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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Dig Property Rights? Join Our Firm As A Courtroom Property Rights Lawyer

If you dream such dreams as this photo, read on.

My law firm, Pacific Legal Foundation, is on the hunt for lawyer to join our Property Rights group (yours truly is the Director of Property Rights Litigation, so you will be working with me and the other takings and con law mavens in our practice). Here's the full description of the spot:

You: An entrepreneurial freedom fighter with a passion for property rights litigation. You work with more senior-level attorneys to find and win cutting-edge property rights cases in trial and appellate across the country. You work as a part of a collaborative team, but are also self-motivated and able to work independently with minimal supervision. You are eager to learn, relentless, and a focused lawyer.

Them: Bureaucrats, city councils, mayors, governors, and federal agencies stripping Americans of their rights every day. There’s a lot of government overreach out there, and it’s backed by seemingly endless resources. But fortunately, like all lumbering giants, abusive government is most vulnerable when countered by individuals who act strategically and nimbly, take calculated risks, have each other’s backs, and are confident in, and passionate for, the cause—the very sort of property rights swashbucklers we employ in spades here at PLF.

Us: We fight back. Pacific Legal Foundation is the nation’s first and most successful public interest law firm dedicated to vindicating individual liberty and protecting the fundamental right to property as the “guardian of every other right.” PLF has an unmatched record in the United States Supreme Court, with 17 victories in the Court. We also are actively litigating more than a hundred cases in trial and appellate courtrooms across the nation.

We are a next-generation public interest law firm. What does “next-generation” mean for a legal nonprofit? It means we aren’t interested in doing the same thing as everyone else. We aspire to be the best player in a constantly changing game.

Here’s what you get to do in this role:

You will be a courtroom lawyer in PLF’s Property Rights Practice Group. From Nollan to Koontz to Knick to Cedar Point Nursery to Tyler, PLF’s property rights litigation is unparalleled. You will help find and win the next important Supreme Court property rights case, becoming recognized as a nationwide leader on property rights litigation. Occasionally, You will have opportunities to speak at conferences or with the media about your cases or important property rights issues.

You will be a key contributor to PLF’s property rights practice group. You will work in teams with junior and senior attorneys, growing in your expertise and knowledge and elevating the team’s efforts to defend property rights. You will have the latitude to think big and the resources to execute. At PLF, you will be at the forefront of shaping property rights for all Americans.

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

Getting down to brass tacks, your specific job duties likely will include:

• Winning property rights cases! Finding, developing, and litigating important property rights cases.
• Working with other attorneys to develop and litigate PLF’s property rights cases to protect the constitutional rights of Americans.

Qualifications

• 1-3 years of litigation or judicial clerkship experience
• Passion to litigate property rights cases
• A deep understanding of the moral and constitutional basis for property rights is a huge plus
• A track record of successful legal work
• Outstanding interpersonal communication skills
• A knowledge of, and passion for, the ideas of freedom and individual liberty
• The ability and willingness to travel approximately 10% to 15%

General Information

Pacific Legal Foundation identifies and litigates important legal issues to set landmark precedents that benefit Americans nationwide. Using strategic and principled litigation, communications, and research, we battle for freedom in the nation’s courts and the court of public opinion.

As a national nonprofit organization, PLF has brick-and-mortar offices in Sacramento, California; Arlington, Virginia; and Palm Beach Gardens, Florida, although approximately half of the staff work from home offices across the country. You can work physically in any of our offices or request to work virtually. This position is particularly suited for a lawyer who would like to be in one of our offices, or who is a focused and relentless self-starter eager to take advantage of our cross-country virtual office environment by proactively collaborating and communicating with colleagues, clients, and other professionals.

This is a full-time, permanent position. PLF is committed to recruiting and retaining the highest-quality talent available nationwide, and we offer a total compensation package that includes a competitive salary, medical and dental insurance, and employer-paid retirement savings. We take work-life balance seriously through our generous paid leave and flextime policies. We have a flexible, collaborative, positive, and collegial work environment. We take pride in investing in your future and encourage internal advancement. PLF is the place for someone principled, tenacious, and determined to succeed in positively shaping the future of our country and restoring real limits on government power. Join us.

To Apply

Qualified candidates should submit the following application material:

• Your resume or C.V., including your experience in the liberty movement and relevant professional experience.
• A cover letter explaining why PLF is the place for you, why you want to fight for liberty, and what distinguishes you from typical applicants; your letter should detail your courtroom experience, including any experience in trial preparation and civil discovery.
• A recent writing sample, no longer than 10 pages, that demonstrates your analytical and advocacy skills.

More here, including a link to submit your application packet.

If you fit the bill, here's your chance to join us.

South Carolina's Relocation Act Benefits Are Not "Just Compensation"

A quick one from the South Carolina Supreme Court.

In Applied Building Sciences, Inc. v. South Carolina Dep't of Commerce, No. 28184 (Jan. 17, 2024), the court held that the $50,000 cap on relocation benefits provided to ABS by South Carolina's version of the Relocation Act was enough, and did not deprive ABS of just compensation.   

Applied Building Sciences was a tenant in a building taken by the South Carolina Division of Railways, and was listed as an "Other Condemnee" in the eminent domain action. The taking forced it to relocate its business, which triggered its right to seek relocation benefits. South Carolina offers those displaced up to $50,000 in benefits, even if the taking isn't federally funded (and thus not covered by the federal URA). 

ABS thought the cap was unconstitutional and asked for $560k in expenses, and raised an inverse condemnation claim. The Department said no, and "refused to pay more than $50,000." Slip op. at 2. ABS obtained its share of the lessor's compensation, after which the parties agreed to sever its inverse claim for what it claimed was the shortfall.  

The South Carolina Supreme Court concluded that relocation expenses are not a part of "just compensation" under the U.S. Constitution. Relying on United States v. Petty Motor Co., 327 U.S. 372 (1946), the court held that "removal or relocation of personal property is not to be included in valuing property taken and that businesses displaced as a result of the condemnation do not have a constitutional right to receive expenses related to relocation." Slip op. at 6.

ABS fared no better under South Carolina's just compensation clause. The court noted that "'South Carolina courts have embraced federal takings jurisprudence as providing the rubric under which we analyze whether an interference with someone's property interests amount to a constitutional taking.' ... Therefore, Petty Motor, Westinghouse, and Joslin Mfg. Co. guide our decision today." Id. (citations omitted).

The old rubric of "we're taking the property, not the business."

In short, the relocation benefits in South Carolina's Act are gravy, property owners; the legislature is doing you a solid. The court didn't say exactly that, but it did note that the S.C. legislature adopted the Act to provide something -- although limited -- to owners who incur relocation expenses in takings not covered by the federal URA:

South Carolina codified the relocation requirements of the Federal Relocation Act in sections 28-11-10 to -70, mandating relocation payments to displaced persons and businesses regardless of whether a project uses any federal dollars. See S.C. Code Ann. § 28-11-10 (2007); Brown v. City of N. Charleston, 314 S.C. 298, 299-301, 442 S.E.2d 633, 634-35 (Ct. App. 1994); Act No. 1345, 1972 S.C. Acts 2522 (referring to relocation assistance "when any program or project undertaken involving acquisition of real property will result in displacement of any person or other legal entity"); 18 S.C. Jur. Eminent Domain § 22.1 (West 2023). When the government uses the power of eminent domain to take property which is being leased, the tenants may recover moving costs and rent differential payments. See S.C. Code Ann. § 28-11-10; Brown, 314 S.C. at 299-301, 442 S.E.2d at 634-35; 18 S.C. Jur. Eminent Domain § 22.1.

Slip op. at 4.

Thank you very much.

Applied Building Sciences, Inc. v. South Carolina De'pt of Commerce, No. 28184 (S.C. Jan. 17, 2024)

Devillier Oral Argument Round-Up

One week ago today, the U.S. Supreme Court heard oral arguments in Devillier v. Texas.

We wrote up our thoughts in this post, "Rogue States: Today's Argument In Devillier v. Texas - 'Aren't the Courts supposed to do something' About Violations Of The Constitution?," and now bring you other reports:

• Niina H. Farah, "Supreme Court leans toward landowners in Texas flooding case" (Politico E&E News) (we were quoted in this piece: "Robert Thomas, director of property rights litigation at the Pacific Legal Foundation, said critiques of Texas appeared to cut across the ideological spectrum on the court. 'Even those justices who you might not usually think of as viewing property rights favorably, they didn’t seem to appreciate what I would call the gamesmanship [from Texas],' said Thomas, who wrote a friend of the court brief to the Supreme Court in support of landowners.).
• Lydia Wheeler, "Supreme Court Struggles with Right to Sue in Property Fight" (Bloomberg Law)
• Jess Huff, "U.S. Supreme Court hears Texas case that could change how states compensate landowners for their property" (Texas Tribune)
• David Holtzman, "High Court Skeptical Of Texas' Defense In Takings Case"
• Derek Fleming, "SCOTUS Case from TX Could Alter Eminent Domain Law" (Dallas Express)
• Todd Neeley, "Texas Landowners Case Argued at SCOTUS" (Progressive Farmer)

Check em out.

No FOMO: There's Still Room For You To Join Us In New Orleans Feb 1-3, 2024 For The 41st ALI-CLE Eminent Domain & Land Valuation Litigation Conference

Don't miss out!

We promise: this is the last time we're going to try to entice you to the upcoming ALI-CLE Eminent Domain & Land Valuation Litigation Conference in New Orleans. We are getting close to capacity, but there is still room. In recent years, we have standing room only in the Conference halls, and have sold out the hotel block. After all, this is a pretty niche area of law. So what gives?

When we were in Austin last year, we thought it might be nice to try and answer that question. We asked Conference participants why they come, year-after-year (and in Austin, despite massive travel disruptions). Yes, it is the various venues (Nashville, Austin, Scottsdale, Palm Springs, to name a few recent locations), and yes, it is the excellent and useful programming.

But as we suspected it is more than that. As the above video notes, the consistent response from our participants about why the attend is the participants. The faculty and other attendees, the vendors. The collegiality, the chance to renew long-standing friendships, and especially the chance to make new friends and colleagues who share our passion for this area of law. The welcoming environment, and our desire to have lawyers and other professionals new to this area of law or new to the Bar feel at home and welcomed.

We have also made a big effort in the last few years to include a range of professionals from various perspectives, including lawyers, legal academics, jurists, appraisers and MAIs, planners, right of way and relocation experts, and jury and trial consultants. Family members also welcome (there are a lot of "adjacent" social and networking events, and families are welcome as long as they don't mind a lot of "shop talk"). Our program is a mix of practical and substantive sessions.

We also have a special track on the first day of the Conference designed as a crash course in Eminent Domain law ("Condemnation 101"), which is a good place for an overview and introduction to the practice, or as a refresher course for those with more time under your belt.

In short, we try and make the Conference not just a place to learn the latest in eminent domain and related topics, but somewhere you can return to each year, and feel welcome.

So if you have not attended before, give us a try! We'd love to see you in New Orleans in just a few months. Registration is still open. Sign up now, and don't miss out.

Rogue States: Today's Argument In Devillier v. Texas - "Aren't the Courts supposed to do something" About Violations Of The Constitution?

We'd guess that most people, if asked whether the courts can "do something" when the government acts beyond the authority delegated to it in the Constitution, would respond that "doing something" is exactly what courts are for. 

Bottom Line Up Front

And that is what drives our BLUF on today's Supreme Court oral arguments in Devillier v. Texas: we're predicting that the property owner's arguments in will convince a majority of the Justices, and that the Court will answer the Question Presented with a "yes" -

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

Courts Exist to "Do Something" When Government Violates Rights, Right?

Justice Kagan, as if often the case, drove right to the heart of the matter. For the "money quote" in the transcript or audio recording, you need look no further than this colloquy between the Justice and Texas' advocate:

JUSTICE KAGAN: But, General, do you agree with Mr. McNamara that if a state takes a person's property and doesn't give compensation, that state is violating the Constitution every day? It's an ongoing violation. Do you agree with that?

MR. NIELSON: That's not how the Court has -- I -- I -- I believe -- I certainly agree that's a violation of the Constitution. I don't think this Court's cases have ever --

JUSTICE KAGAN: But that's what I want to know. It's an ongoing violation of the Constitution, right? I've taken Mr. McNamara's property. I haven't paid him. Every day I'm violating the Constitution, correct?

MR. NIELSON: Yes, Your Honor.

JUSTICE KAGAN: Okay. So aren't courts supposed to do something about that?

MR. NIELSON: Yes, Your Honor. And what this Court said in Knick is, when there's not a cause of action, which remember there wasn't a cause of action, there were -- you have -- there's no remedies.

Tr. at 46-47.

At its core, Devillier is a case about whether and how we – through the courts – enforce our rights. In this case, the right to be justly compensated when government takes property, either directly via an exercise of eminent domain, or de facto by depriving the owner of its use and enjoyment. Texas inadvertently flooded Devillier's land, one of those "classic" inverse condemnation situations.

So Devillier asked the courts to "do something." He sued Texas for just compensation in Texas' own courts. Texas, not wanting to litigate in its own courts (where today it acknowledged that it could be sued for compensation), Texas removed the case to federal court, where Texas could argue that it could not be sued for compensation. 

Texas: There Are Rights, and There Are Procedures

As we detailed in our preview of the arguments, the federal court agreed with Devillier and held that in the absence of statutory authorization to sue (a "cause of action"), the courts can do nothing. To us (and the amicus brief we filed), the lack of a judicial remedy makes the limitations on sovereign power in the Bill of Rights seem more like suggestions that can be ignored -- the old "Pirate's Code" meme comes to mind -- than, you know, actual rules that have to be followed. 

But that alone was not apparently enough to resolve the case, and consequently, today's arguments were at time highly technical and law-wonky, with the Justices seemingly searching for distinctions between the concepts of (1) rights, (2) causes of actions, (3) remedies and (4) – as the advocate for the federal government injected -- "obligations." All of which go to that most fundamental of questions: what if anything can courts do if the government doesn't honor its constitutional obligations?

First, here's what was not disputed. We didn’t hear any disagreement that when there’s been a taking of property – something both Texas’ and the federal government's lawyer acknowledged isn't a question here – that there’s a fundamental requirement to provide just compensation. In short, everyone agrees there's a right to compensation when property is taken.

The Right To Just Compensation Alone Is Not Enough

That's all well and good, but that alone does not get you there, Texas argued. Because it addition to a right, you also need a cause of action. What that means is you need to have a legal claim, a procedural concept that is familiar to lawyers (but makes the rest of the public scratch its collective head). Texas argued that there is a cause of action to adjudicate Devillier's claim that his federal constitutional rights have been violated, but only a cause of action under Texas law and in a Texas court. Once in federal court, his claim dies because Devillier did not raise a Texas cause of action, only a claim directly under the U.S. Constitution.

Gamesmanship, bait-and-switch, and square corners

That argument caught flak from several members of the Court because it wasn't Devillier who chose federal court, it was Texas. In short, Texas shifted the forum from one where Texas argued it could be sued, to one where it argued it couldn't -- and then argued that Devillier could have brought his claim in a Texas court.

We think the colloquy you should pay attention to is between Justice Sotomayor and Texas' counsel:

JUSTICE SOTOMAYOR: And Count 2 [of Devillier's complaint] says violation of the Fifth Amendment of the U.S. Constitution.

MR. NIELSON: Yes, Your Honor.

JUSTICE SOTOMAYOR: Summarizing basically. I don't know what else they would have had to do in Texas court if I cite that case.

MR. NIELSON: It -

JUSTICE SOTOMAYOR: They said, I'm suing you in Texas court. You're the one who removed to federal court.

MR. NIELSON: Yes, Your Honor.

JUSTICE SOTOMAYOR: This seems to me like a totally made-up case because they did exactly what they had to do under Texas law. It's you who are telling me -- it's almost a bait and switch -- that you wanted to get to federal court to basically have a class action and you couldn't do it in state court, so -- but you had to fight something, which I don't know what you're fighting because you're telling me that Texas lets them have a cause of action under the Fifth Amendment.

MR. NIELSON: Yes, Your Honor. There's no bait and switch here, I want to be clear on that, no bait and switch.

JUSTICE SOTOMAYOR: Well, you're the one who removed.

MR. NIELSON: We removed, and they didn't come back and say, oh, no, you misunderstand what we're saying. Instead, every step along the way, they have doubled down all the way going to cert, you know, seek certiorari review from this Court. So, if we misunderstood what they were saying -

JUSTICE SOTOMAYOR: So, if -- if they go back down and say to the district court, this has been remanded to the district court, all we want is just compensation under the Texas Constitution and the Fifth Amendment under that case that you're mentioning, that's okay and you're not going to resist that?

MR. NIELSON: We -- we -- we would not resist that, Your Honor.

Tr. at 63-64.

Another colloquy -- this time with Justices Kavanaugh and Gorsuch -- is even more stark. There, Texas' advocate recognized that as a matter of "first principles" (are there any other kind, we ask) there's a right to compensation when the government has taken property, and that failing to pay it violates the Constitution, but tough beans property owner because procedurally we just don't know how to "get there." See Tr. at 58.

To us, this is very extreme position to take, especially coming from a government lawyer. After all, we thought that the old "turn square corners" rule is particularly apt in constitutional cases. See Niz-Chavez v. Garland, 593 U.S. ___ (2021) ("If men must turn square corners when they deal with the government, it cannot be too much to expect the government to turn square corners when it deals with them."). Recognizing a right, but shrugging your shoulders (indeed, actively playing removal games) isn't exactly what we'd hope our government would do, is it?  

Texas sought to cut this off right out of the gate, when it started by touting how good it is about property rights:

MR. NIELSON: Mr. Chief Justice, and may it please the Court:

The Court will be hard-pressed to find any government more committed to property than Texas. The Texas constitution is more protective than the federal Constitution, and Texas courts under a Texas cause of action adjudicate takings claims under both constitutions.

Tr. at 38.

A staunch protector of property rights, just not here. 

The claim that we-care-about-property-rights-just-not-here didn't go over all that well, as the above-quoted passages show.

A couple of other distinct threads were present. 

What About First English?

Much of the case turns on what the Court meant when all those decades ago ("38 years ago" as Chief Justice dryly retorted, getting the date exactly right) in First English when it adopted Justice Brennan's San Diego Gas & Electric dissent and held that no state court properly limit the remedy for a taking to injunction (ordering the government to stop the taking). The Just Compensation Clause is "self-executing" and mandates that even if the government backs off of the taking, it is obligated to provide compensation for the time during which it did take the property.

When the federal government's advocate attempted to argue otherwise, Chief Justice Roberts was having none of it. After all, he seems to get particularly incensed when the government fails to remain consistent in its arguments over cases, and over time (see the "square corners" vibe above). Thus, the Chief was all over the government's lawyer:

CHIEF JUSTICE ROBERTS: -- brief that you filed in First English 38 years ago, you argued that the Constitution does not of its own force furnish a basis for a court to award money damages against the government.

Now, in the decision in First English, Justice Rehnquist rejected the idea "that the Constitution does not of its own force furnish a basis for the court to award money damages against the government."

Now it seems to me that the question turns on basis. And what you seem to be saying is it created a general theory of what the government had to do, but that doesn't mean that anybody could take that and recover compensation. They have to go get an injunction or they -- they can't proceed at all because there's no cause of action?

MR. KNEEDLER: Yes, Your Honor.

CHIEF JUSTICE ROBERTS: I mean, are you just rearguing the point that the Court rejected?

Tr. at 70-71.

The lawyers for Texas and the federal government also seemed to be swimming against the tide when they argued that "self-executing" didn't mean that the Just Compensation Clause "of its own force" provides the cause of action. All you can get, the government lawyers argued, is an injunction.

Chief Justice Roberts disagreed, pointing to the more recent opinions he authored in Knick and Cedar Point.

MR. NIELSON: Well, we would make the same argument in state or federal court that there is no federal cause of action directly under the Fifth Amendment. That is not -

CHIEF JUSTICE ROBERTS: Well, but that's what was rejected in -- in the two cases that I read you, Cedar Point and Knick.

MR. NIELSON: With respect, Your Honor, I don't read either of those cases as saying there is a federal cause of action.

Tr. at 46. 

To us, when you are arguing with the author of a judicial opinion what that opinion says, you are invariably going to lose that argument.

Rogue State

Finally, the other major thread that emerged was what everyone referred to as the "rogue state" hypothetical. As Texas' lawyer put it, "let's assume some state says, we're just not going to do that [pay compensation after a taking." Tr. at 53. Then what?

First, this isn't really a hypothetical because we don't have too look too far for two real-world examples of this. Right next door to Texas, Louisiana government do this on what seems like a semi-regular basis. See for example, where a municipal port authority exercised its eminent domain power to take a ship repair facility. After trial and a bunch of appeals, the court ultimately entered a judgment for just compensation that the municipality owed millions to the (former) property owner. Did the municipality pay up? Nope. There's a provision in the Louisiana Constitution that the state and its political subdivisions can't be forced to pay civil judgments. And here, the municipality didn't pay for years. A federal district court held this wasn't a problem. After arguments in the Fifth Circuit during which the judges kept pressing the government's lawyer for why her client had not paid compensation, the case not surprisingly settled.

In another case -- this time an inverse condemnation claim -- same thing. The trial court entered a compensation judgment against a Louisiana municipality, which eventually exhausted all of its appeals. But then it didn't pay the ordered compensation. It didn't have to, unless and until it felt like it. The owner filed a federal lawsuit, arguing that the delay in compensation violated the U.S. Constitution. But unfortunately, the Supreme Court denied our cert petition. (we filed this cert petition, which unfortunately was denied). 

In the Devillier arguments, both Texas and the federal government argued that the solution to the rogue state problem isn't a judicial order ordering the payment of just compensation for a taking. Rather, the remedy is limited to injunction. See above discussion of First English on that. On that issue, it was Justice Kagan who again supplied your moment of clarity, when she asked Texas' lawyer about the supposed injunction remedy:

JUSTICE KAGAN: So to say, well, look, you can sue for an injunction but you can't sue for payment just doesn't understand the nature of this right.

MR. NIELSON: Well, so our first-line argument is, you know, the way the United States did it for a hundred years is correct. But, if the Court disagrees with that, if the Court says, you know what, actually -

JUSTICE KAGAN: So, General, I kind of agree with that. Your best argument is like what happened between the time of the Constitution and, you know, someplace in the late 19th Century.

But suppose that I'm not such an originalist and I don't really care about that.

(Laughter.)

MR. NIELSON: Sure. All right. So that's the answer I'm going to say. So, if we -- if a court says we read First English and it requires not just a substantive relief, it requires some sort of judicial proceeding, which we don't think is consistent with the history, but let's assume, Texas does it. Texas provides a cause of action for which they can bring a federal takings claim.

So even if that is true, which we don't believe as our first-line argument is correct, Texas still wins.

Tr. at 51-52.

Bottom Line

Let's wrap up. Here's some final thoughts at what might come out of this, and what a decision here might mean.

• This case presents the Court with yet another opportunity to clear away some of the games-playing and procedural hurdles that the government (with the acquiescence of the the courts) puts up in property rights cases. The trend in recent times at the Court has been to view these hurdles with a lot of skepticism. Continues the Court’s direction in clearing procedural hurdles. Yes, like in a lot of civil litigation against the government, the Court is going to tolerate a fair degree of procedures, but only if these are "modest" (see, e.g., Pakdel) and serve the purpose other than making it difficult for the plaintiff. Here, we don't think that the Court is all that keen on cementing a distinction between "rights," "remedies," and "causes of action."
• Relatedly, this case also seems like a good opportunity for the Court to remind everyone that property rights are not second-class constitutional and civil rights, and that their inclusion in the Bill of Rights means something. Devillier's lawyer started off his argument with this, stating, "[t]he question presented in this case is resolved by the text of the Fifth Amendment, which, unlike any other provision of the Constitution, imposes on the government a -- an explicit duty to pay money." Tr. at 3. Just so.
• The Justices didn't seem to be at all focused on what a decision in this case leaves for future resolution. Issues such as whether a state enjoys sovereign immunity from just compensation claims in federal court. We think the Court will rightly leave that and other issues for later cases.

Now we wait.

Update: here's lawprof Ilya Somin's take on the arguments: "Oral Argument in Devillier v. Texas Suggests Victory for Property Rights Likely" (Volokh)

Devillier v. Texas Argument Preview: Do Courts Need Congress' Permission To Enforce The Right To Just Compensation?

"No need to ask, he's a smooth operator..."

On Tuesday, January 16, 2024, the Supreme Court will hear arguments in a case we've  been following closely because it involves the fundamental limitation on the sovereign power to take private property. In our system, the sovereign indeed has the power to take private property against the will of the owner, but only if the taking is accompanied by just compensation.

Before we go on, a disclosure: we filed an amicus brief supporting Devillier's arguments, so we've have an obvious bias. Special kudos to our law firm colleagues -- and self-executing Just Compensation mavens -- Deb La Fetra and Kady Valois for this brief.

Texas Flooded Devillier's Property

Here are the facts in Devillier v. Texas. As part of a road project, the Texas Department of Transportation caused Devillier's property to flood. The state flooding someone's property is one of those "classic" cases what are deemed to be takings, triggering the obligation to provide compensation to the owner. But Texas didn't do so, so Devillier sued Texas in a Texas court for inverse condemnation, seeking just compensation under the U.S. and Texas Constitutions. Importantly, Devillier did not seek redress under any statute, but asserted that his right to just compensation directly under the U.S. Constitution.

Removed! Texas Avoided Its Own Courts

The presence of a federal claim in state court meant that as the defendant, Texas had the choice to remove the case to federal court (a choice it alone could make). Which it did. Texas then asked the federal court to dismiss the lawsuit, arguing that absent some legislative authorization to obtain redress from the State, that the court could not consider Devillier's claim.

Devillier responded that the U.S. Supreme Court has long held that the Just Compensation requirement in the U.S. Constitution is "self-executing," meaning that by its own force the Takings Clause recognizes a civil claim for its breach (and the Fourteenth Amendment expressly applies that requirement to States and their instrumentalities (such as TDOT).

Fifth Circuit: No Cause of Action For Compensation

The Fifth Circuit disagreed with Devillier, and held that federal courts "lack jurisdiction" because "the Fifth Amendment Takings Clause as applied to the states through the Fourteenth Amendment does not provide a right to action for takings against a state[.]"

Congress has provided a cause of action (42 U.S.C. § 1983) to sue "persons" who, under color of state, violate someone's constitutional rights (including taking property without compensation), but it is settled law that the states themselves are not "persons," and there's no dispute that Congress has never adopted a similar statute applicable to states. No cause of action against the State of Texas means no ability to bring a lawsuit against the State of Texas; Devillier's case dismissed.

The Question Presented

After some unusual appellate procedures (sua sponte denial of en banc review after the cert petition was filed), the Supreme Court granted review, limited to this Question Presented:

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

So what should we be looking for on Tuesday morning?

Calder, Barron, and Sovereignty

At heart, we think Devillier goes to the notion of the American concept of "sovereignty," and our vision of what constitutional rights mean. Despite the Ninth Amendment, we tend to treat the listing of rights in the Bill of Rights as a somewhat exclusive expression of the rights we possess. And we also tend to treat the text of the Bill of Rights as defining our rights, rather than as limitations on government power (sovereignty).

As Professor William Davenport Mercer discussed in his book Diminishing the Bill of Rights: Barron v. Baltimore and the Foundations of American Liberty (2017), this may well be a result of the U.S. Supreme Court's decision in Barron v. Mayor & City Council of Baltimore, 32 U.S. 243 (1833). That case is mostly remembered as the one which held that the Bill of Rights limits only the federal sovereign power, and if property owners wanted to assert a claim for compensation against Baltimore, they could not point to the Fifth Amendment, but must instead look to compensation requirements in their state constitution. Barron's holding, of course, was neutered by the Fourteenth Amendment and officially put to rest by the later Chicago Burlington & Quincy R. Co. v. Chicago, 166 U.S. 226 (1897). But in Professor Davenport's estimation,even though Barron is no longer good law, the general vibe of the decision -- that constitutional rights are defined by the text of the constitution -- has lived on. Maybe Devillier will be an opportunity to check the pulse of the Justices on where they stand on this.

After all, the idea that the two limitations spelled out in the Fifth Amendment and its state law counterparts are not merely admonitions to the sovereign to "don't do that" (i.e., take property without a public use or without paying compensation), but rather the notion that We the People never delegated to our governments the power to take property without a public use or without providing just compensation. If so, then you can enforce the right without needing the permission of the sovereign. This might have been best expressed by Justice Chase in Calder v. Bull, 3 U.S. (3 Dall.) 386 (1798):

A law that punished a citizen for an innocent action, or in other words for an act which when done was in violation of no existing law; a law that destroys or impairs the lawful private contracts of citizens; a law that makes a man a judge in his own cause, or a law that takes property from A. and gives it to B. It is against all reason and justice for a people to entrust a legislature with such powers, and therefore it cannot be presumed that it has done it. The genius, the nature, and the spirit of our state governments amount to a prohibition of such acts of legislation, and the general principles of law and reason forbid them. The legislature may enjoin, permit, forbid, and punish; It may declare new crimes and establish rules of conduct for all its citizens in future cases; it may command what is right and prohibit what is wrong, but it cannot change innocence into guilt or punish innocence as a crime or violate the right of an antecedent lawful private contract or the right of private property. To maintain that our federal or state legislature possesses such powers if it had not been expressly restrained would, in my opinion, be a political heresy altogether inadmissible in our free republican governments.

Id. at 388.

If Texas never had the power to take property without compensation, then doesn't it follow that Devillier does not need the permission of Congress (or Texas) to enforce that right? 

What Else to Look For on Tuesday

Other things to look for on Tuesday as you listen along:

• Incremental, QP-centric arguments. Look for the Justices viewing the issue narrowly, trying to keep the decision in the case framed within the Question Presented. Like they seemed to do in the recently-argued Sheetz case. The Court has taken a very incremental approach in takings cases, and we're thinking that if the Court wants to answer the QP -- and no more, yet -- things could go very well for Devillier. Short story: do you need a legislative cause of action to file a claim for compensation for a taking? No. End of (this) story. 
• Been there, done that. Relatedly, there's a strong argument that the Court has already made it clear that the just compensation requirement is "self-executing," meaning that if it takes property, the government must provide compensation; and if it does not, nothing more is needed for the owner to ask a court to order the government to provide it. If so, then decisions like Chicago, Burlington and First English resolve the QP, and we're done. To us, the vibe of First English (if not its express holding) has always been that no state can deny it has the obligation to provide compensation when it takes property. If the Court wasn't saying this in First English, then what was it getting at?
• History and tradition. This is a property rights case, so you know there's likely to be a lot of history talk. You may want to brush off your copy of the Court's recent decision in PennEast, which held that the State of New Jersey was not immune from an exercise of federal eminent domain power because history shows that by ratifying the Constitution, the states consented to having their property taken by the federal government, and the preexisting notion that eminent domain is, as Grotius put it, eminent. 
• CFC mavens, rejoice. If there's buy-in to the notion that the Tucker Act does not create a cause of action, but is merely a jurisdictional statute assigning claims for money against the federal government to the Court of Federal Claims, then Devillier is along the path to success. After all, the federal courts have been entertaining and deciding takings claims seeking compensation for decades.
• Restraining the temptation to go large. One might be tempted in this case to go big, because after Knick, the lower courts seem to be throwing up all sorts of procedural and technical hurdles to property owners seeking compensation for takings in federal court. But we think that this is likely something the Court will want to avoid. The facts in this one are very narrowly drawn, and don't raise a lot of the interesting and unresolved issues that are plaguing the lower courts. Save those issues for those cases, not this one.
• Keeping the judicial powder dry. Thus, if the Court answers the QP, it can leave for later resolution better cases with more developed factual records and arguments. A case in which a property owner sues a State for just compensation in federal court (and not one where the State is the party which invoked federal jurisdiction), for example. Such a case would directly raise the issue the Court need not address here: does the Eleventh Amendment change anything?
• Limiting principles. The term "Bivens" isn't exactly popular at the Court these days. If it looks like a majority is going Devillier's way, look for arguments distinguishing the right to compensation from other constitutional rights. If takings require money as a remedy, then why not the same, for example, for a violation of the Speech Clause? Hint: the distinction is right there in the text of the Fifth Amendment, which not only expresses limitations on sovereign power (no takings without public use and no takings without compensation), but also informs courts in terms that courts understand what remedy is available (compensation). Takings are sui generis.
• Game-playing. The Court has been rightly skeptical when it looks like the government is being too-clever-by-half, especially in property cases. The San Remo preclusion trap, the ripeness "Catch-22," ripeness as exhaustion-by-another-name, and states manipulating property law.
• Chicken Little. There have been some arguments here -- as in nearly every property rights case -- that a ruling in favor of the property owner will result in a flood of litigation, and the inability of the government to go on as usual. The Court has -- in nearly every case in which this argument is made -- rejected that claim. By design, a limitation on sovereign power cannot be too burdensome: if the constable must abide by the Constitution, so must the DOT.
• You say "tomato." Do you pronounce the property owner's name as "de-vill-ey-er" or "day-vill-e-ay," or some other way? As in Key-lo or Keh-low, Dow-behrr or Dau-bert, or May-hon or Mannnn? (Either way, if we were arguing on Tuesday, we'd say it exactly the way the Chief Justice pronounces it.)

What's Not at Issue

Here are some issues we think are not presented:

• Eleventh Amendment. This should not be an issue here, because Texas forfeited any immunity that it might have otherwise enjoyed under the Eleventh Amendment by removing the lawsuit from its own courts to a federal court. Lapides v. Bd. of Regents of Univ. Sys. of Ga., 535 U.S. 613, 622–23 (2002); Embury v. King, 361 F.3d 562, 566 (9th Cir. 2004) (“Allowing a State to waive immunity to remove a case to federal court, then ‘unwaive’ it to assert that the federal court could not act, would create a new definition of chutzpah.”). And if we want to get very technical, the Court has already said that the Eleventh Amendment mirrors plain-old sovereign immunity, and that the sovereign can only be sued it (a) it consents, or (b) the "plan of the convention" reflects the understanding that by ratifying the Constitution, the states gave up that sovereign immunity (again, check out the Court's recent decision in PennEast for more). If so, maybe Texas' removal of the case settled the Question Presented. 
• MAGA. The question of the meaning of "self-executing" is also raised in the Trump v. Anderson case which the Supreme Court is considering on an expedited basis. That's the one where the ex-president is challenging the Colorado Supreme Court's ruling that he can be DQ'd from the Colorado ballot because section 3 of the Fourteenth Amendment renders him ineligible. One of the arguments in the case focuses on is that section 5 of the Fourteenth Amendment, which provides that "Congress shall have the power to enforce, by appropriate legislation, the provisions of this article," means that Congress must first adopt enabling legislation before someone can be barred from running. While an interesting and unsettled question, as noted above we think that Just Compensation stands apart because Devillier is arguing that just compensation is self-executing, and not as in the Trump case, that the Fourteenth Amendment is necessarily self-executing.

See you on Tuesday!

Brief Amicus Curiae of Pacific Legal Foundation, Nat. Fed. of Ind. Bus. Small Bus. Legal Center, Inc., and...

Hawaii SCT: Most Of Those Eminent Domain Issues (Esp. Severance Damages) Are For Juries

We're not going to go into very much detail or provide commentary on the Hawaii Supreme Court's unanimous 88-page opinion in an eminent domain case we've been following, City and County of Honolulu v. Victoria Ward, Ltd., No. SCAP-22-0000335 (Dec. 29, 2023), because before we departed private practice for public interest law a couple of years ago, this was our client and our case (so we still have a bias).

Update: more on the decision from Jesse Souki, "Hawai'i Court Holds that Consideration of Severance Damages in Honolulu Rail Case Should be Left to the Jury" ("The HSCT was critical of the circuit court’s granting of summary judgment motions where there were genuine issues of material fact that should be decided by the jury[.]").

Short story: the Honolulu rail agency (we're still calling it "HART" and not the weird "Skyline" although the latter is accurate because the elevated like really does block the ... skyline) is employing eminent domain to take several easements on several properties which are in the middle of being developed by Victoria Ward as part of a long-term, multi-parcel, multi-structure residential and mixed-use project. In the run-up to the trial, the trial court disposed of a slew of issues by granting 12 (yes, twelve) motions for summary judgment. The losers of those motions sought and were granted interlocutory review, and the appeal was later transferred from the Intermediate Court of Appeals to the Hawaii Supreme Court, which heard oral arguments in June 2023. 

On the last business day of the year, the Supreme Court dropped the opinion. Here's how the Judiciary's web site described the issues:

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

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

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

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

The unanimous opinion authored by Chief Justice Recktenwald summarized the specific issues:

The circuit court granted a dozen summary judgment motions, which are the subject of this interlocutory appeal. These summary judgment orders touch on a wide variety of disputes. Most importantly, the circuit court ruled that Victoria Ward is estopped from seeking severance damages, though the orders also address such issues as the appropriate valuation methodology for lost parking spaces, the extent to which a party may be entitled to just compensation for a speculative construction project, and the effect of pre-dispute communications and local ordinances on a condemnee’s ability to seek just compensation. In addition to appealing the partial summary judgment orders, the parties appeal an order pausing the accrual of blight of summons interest, and two orders denying or denying in part motions to strike.

Slip op. at 2-3 (footnote omitted).

The court next acknowledged the "factual and legal complexity of this case, and the circuit court's legitimate concern with narrowing the issues for trial," slip op. at 3, which should give you a clue that this one was headed more for Rule 56 territory than substantive eminent domain.

Indeed, on each of the most important issues, the arguments ended more with a whimper than a bang: resist the temptation to resolve these questions by a judge when there remain genuine factual disputes which preclude the granting of summary judgment. 

Your takeaway: even where the issues are multitudinous, the case complex (neither unexpected when this much is at stake), at heart (ha) the question of just compensation is a fact determination to be decided by the jury. The judge may want the case simplified, but in the end the jury gets to decide. And that means the jury gets to hear all the evidence, even if the judge ain't buying it.

For example, HART contended that the location of the rail line and train station was "established" by HART's submissions of a "locally preferred alternative" to the federal transit agency (yes, mainland taxpayers, you are paying a significant portion of this project's price tag), and therefore, Victoria Ward could not recover just compensation for any planned development in that footprint because it was obligated to design its residential project around the footprint. The court held that this was a fact dispute:

The parties dispute the extent to which the LPA “established” the location of the guideway and station, as opposed to simply expressing a preference. HART asserts that, although the rail alignment changed slightly since Ordinance 07-001 was enacted, the Ordinance and LPA made clear — at least two years prior to the grant of the Master Plan Permit in 2009 — that the rail guideway and Kaka‘ako Station would be constructed within Ward Village in a manner consistent with the LPA. Consequently, HART argues that HCDA was under a legal obligation to require any Ward Village structures to “accommodate, and not conflict with,” rail as set out in the LPA. As a result of HCDA’s alleged obligation to ensure that all structures were in accord with the LPA, HART asserts that HCDA could not legally approve any projects that conflicted with the LPA. Thus, under HART’s theory, Victoria Ward is precluded from recovering severance damages for any projects that would otherwise conflict with the rail line or Kaka‘ako Station location, as defined by the LPA.

We disagree with HART’s position. There is a dispute of fact as to whether the LPA established definite plans to build the Kaka‘ako Station within Ward Village, or if the LPA instead contemplated a station near, but outside of, Ward Village.

Slip op. at 17-18. As the opinion noted, "[t]he Ordinance's test does not reflect certainty as to a rail route or station location." Slip op. at 18.

To emphasize the jury-centric approach to just compensation, a search of the opinion reveals the word "jury" at least 33 times.

In another related example, the court noted that indeed, the master plan for the overall residential project that Victoria Ward obtained permission from the state agency that regulates land uses in this district, does require Victoria Ward to "address and incorporate Rail." Slip op. at 20. But that doesn't necessarily mean that by accepting this permit condition, Victoria Ward was agreeing to "plan around" rail, and thus had voluntarily surrendered its rights to just compensation. What the term "address and incorporate" means is a fact question:

There is a genuine issue of material fact as to the meaning of the Master Plan Permit requirement that future rail plans be “addressed and incorporated,” and there is a dispute as to the contemporaneous intentions of the parties. A factfinder should have the opportunity to ascertain the parties’ understanding of the phrase “addressed and incorporated” in light of the parties’ representations and actions both at the time the Master Plan Permit was granted and after the fact. Given the existence of a genuine dispute of material fact, the circuit court erred in granting the MPSJ, thereby depriving Victoria Ward of the opportunity to have the matter of severance damages decided by a jury.

Slip op. at 21. As the court put it earlier in the opinion:

We hold that, by entering into the Master Plan Permit and Development Agreement, Victoria Ward is obligated to address and incorporate rail. But it is the province of the jury to determine the contours of this obligation and to calculate the amount of severance damages, if any, to which Victoria Ward is entitled.

Slip op. at 14.

Here's the opinion's money quote, in our view:

We acknowledge the factual and legal complexity of this case, and the circuit court’s legitimate concern with narrowing the issues for trial. However, we conclude that in several circumstances, the circuit court incorrectly used summary judgment to resolve disputed factual issues. Most notably, the question of whether Victoria Ward is estopped from seeking severance damages involves disputed questions of fact and should be presented to a jury.

Slip op. at 3.

There's a good lesson here, especially since just compensation is often a very technical issue: judges should not limiting the appraisal theories or imposing their own views of what is the "best" way to value property, and just compensation cases are not subject to any extraordinary "gatekeeping" efforts by trial courts. Apply the usual Rule 56 and evidentiary rules, and you'll be fine.   

City and Cnty. of Honolulu v. Victoria Ward, Ltd., No. SCAP-22-0000335 (Haw. Dec. 29, 2023)

2023 Year-End Clean Up

As 2023 comes to a close, here are a few of the decisions that we wanted to blog about, but didn't have the time.

• Bruce v. Ogden City Corp., No. 22-4114 (10th Cir. Dec. 1, 2023): city demolishing a building that was damaged by fire was not a Lucas taking because the owner still has use of the land (even though the building is gone). And no Penn Central taking because... Penn Central.
  
• Moriarity v. Indiana, No. 22A-PL-2899 (Ind. Ct. App. Nov. 15, 2023): State ordering removal of illegal dam was not a taking under U.S. or Indiana Constitution. The owners don't have a property right to build an illegal dam. Thus, the "background principles" exception to Lucas rules the day. And no Penn Central taking because the owners never had any investment-backed expectations they could build this dam.
• Lafayette Bollinger Dev., LLC v. Town of Moraga, No. A163636 (Cal. Ct. App. July 19, 2023): No Penn Central taking because city might have allowed a smaller project.
  
• Estancias de Cerro Mar, Inc. v. Puerto Rico Aqueduct and Sewer Auth., No. 20-1644 (D.P.R. Nov. 17, 2023): the complaint plausibly alleged a categorical regulatory taking, and did not need to be pleaded under Penn Central. The complaint alleged that the plaintiff possessed a private property interest, and that the Authority's actions took that interest.
• Moskovic v. City of New Buffalo, No. 23-1165 (6th Cir. Dec. 14, 2023): city's moratorium on short-term vacation rental permits, and eventual permanent ban was not a taking or a deprivation of substantive due process because property owners have no protected interest under Michigan law in renting their properties. 
• First Floor Living LLC v. City of Cleveland, No. 22-3216 (6th Cir. Sep. 28, 2023): even though the plaintiff purchased the property to rehabilitate and redevelop it, the city declared them public nuisances and ordered their destruction. The district court correctly entered summary judgment in the city's favor on the plaintiff's due process claim because the owner received sufficient notice.
• 835 Hinesburg Road, LLC v. City of South Burlington, No. 23-218 (2d Cir. Nov. 8, 2023): takings claim not ripe when city applied restrictions that it intended to adopt and denied owner's preliminary development application [disclosure: this case is one of ours].
• In re City of New York (Coney Island Plan - Stage I), No. 517650/2016 (Kings County, N.Y. Nov. 1, 2023): compensation for city's taking of mostly-vacant land to be measured by the "three unities" test. The zoning in place at the time of the taking was part of "the project," so the pre project zoning is used to measure the value of the taking.

On to 2024!

Cases And Links From Today's ABA State & Local Govt Law Land Use Presentation

Here are the cases that Michael Berger and I discussed in today's presentation to the ABA State and Local Government Law Section's Land Use group. It was good seeing everyone, even virtually:

• Sheetz v. County of El Dorado - are legislatively-imposed exactions subject to the nexus and proportionality requirements of Nollan/Dolan? (SCOTUS)
• Devillier v. Texas - must the government consent to be sued for just compensation? (SCOTUS)
• Watson Memorial Spiritual Temple of Christ v. Korban - the payment of a final just compensation judgment is ministerial, and may be compelled by a writ of mandamus (Louisiana Court of Appeal)
• The New York Rent Control cases - two still pending (SCOTUS)
• Gearing v. City of Half Moon Bay - abstaining from adjudicating a regulatory takings case under Pullman abstention (Ninth Circuit; cert. denied)
• Ateres Bais Yaakov Academy of Rockland v. Town of Clarkstown - RLUIPA claim is ripe; court rejected the "land use is local" trope (2d Cir.)
• Catholic Healthcare Int'l, Inc. v. Genoa Township - RLUIPA claim ripe because Township had taken a "definitive position" on what uses were allowed and not allowed on plaintiff's property, even though there remained a possibility that the Township might allow the use (6th Cir.)
• Yes in My Backyard v. City of Los Angeles - the general plan is law, and controls over zoning (Cal. Super. Ct.)
• Idaho Power Co. v. Bean - some precondemnation entries are takings (Or. Cir. Ct.)
• Town of Apex v. Rubin - after a taking is invalidated for lack of public use, what if the condemning agency just takes it anyway? (N.C. S. Ct. review granted)

Check em out.

And if you are not a member of the ABA State and Local Government Law Section, you should be. Come, join us!

Hawaii Five-80: More Land Use (Law 580) At The University Of Hawaii

Starting in January, we'll be helping our friend and former law partner Mark M. Murakami with the venerated and oh-so-important Land Use course (Law 580) at the University of Hawaii's Law School.

We're temporarily stepping into some mighty big slippers (this is Hawaii, so we don't always wear shoes), as this is the course that our mentor Professor David Callies taught for decades. And is there a better venue in which to teach and study land use law and regulation, and its limits? After all, Hawaii may be the most heavily-regulated land on the planet, and is a focal point for every issue you can think of, from zoning to environmental restrictions to takings to public trust to subdivision to admin law to ... well, you get the drift.

We'll cover those topics, as well as the fundamentals. And we have a few surprises up our sleeves -- some impressive guest lecturers, explorations of dirt law careers, and maybe a field trip or two.

We'll bring you the highlights here, as they happen. Is there a bit of pressure on us to get it right? You bet. But are we looking forward to it (not just an opportunity to head back to the 808, but because this is a great subject)? You bet.

Fieri Facias: You Take, You Pay - Providing Just Compensation After A Taking Is A Ministerial Duty

You might not think that the principle of law the Louisiana Court of Appeal (Fourth Circuit) enunciated in Watson Memorial Spiritual Temple of Christ v. Korban, No. 2023-CA-0293 (Dec. 13, 2023) is really in need of enunciating: if the government takes property, the property owner is entitled to just compensation. Entitled, as in the condemnor must pay.

But apparently, that principle isn't all that obvious. At least in Louisiana. As readers of this blog understand, you can get a final judgment for inverse condemnation from a Louisiana court, but the defendant/taker retains the discretion whether to actually pay it, and the usual judgment-enforcement procedures are not available. In short, the "requirement" to pay just compensation is more of a suggestion than an actual requirement.

That's what happened here. Property owners obtained just compensation judgments against the Sewerage and Water Board of New Orleans. The judgment withstood the SWB's appeals. You'd think that would be the end of it, and the SWB would do its duty.

But the Louisiana Constitution says that civil judgments can only be paid if the legislature or the political subdivision has appropriated the funds. And SWB didn't appropriate the funds to satisfy the owners' just compensation judgment. After waiting, the owners filed a federal action asserting the SWB had taken private property without just compensation.

When the federal courts were presented with the issue, they held that the property owners were merely trying to enforce the state court inverse condemnation judgment, and not their self-executing right to just compensation. And even though the state court judgment is an inverse condemnation judgment for just compensation, that makes no difference because federal courts are not in the business of enforcing state court judgments. Thus, the courts held, there's nothing that can be done to force a taker to, you know, actually pay compensation. You just have to rely on the good graces of the takers.  

That doesn't seem like what the constitution envisioned. So the property owners/condemnees went back to Louisiana's courts and sought a writ of mandamus and a writ of fieri facias, arguing that the duty to provide compensation for a taking is a ministerial, nondiscretionary duty, and thus a court can order a recalcitrant condemnor to pay up. 

The court of appeal framed the issue this way; "[t]his case presents a res nova issue of law: whether payment of an inverse condemnation judgment against a political subdivision is a ministerial duty." Slip op. at 8. And the court held "[w]e find that it is." Id.

Relying on a Louisiana statute that contains language mandating that compensation "shall" be paid within a certain time of the judgment, the court concluded that the duty to pay up is not discretionary (as the SWB argued), but rather a ministerial obligation. This is a "constitutional takings claim involving the mandatory duty to pay just
compensation for deprivation of property rights." Slip op. at 11.

So there you have it. The court reinstated the claims and sent the case back for the lower court to issue the writs.

Although we still continue to believe that we got it right in the federal case and that a local government's failure to pay adjudicated compensation is itself a violation of the Takings Clause and the Fourteenth Amendment, we're glad that the property owners here have met with success.

Will the SWB finally do the right thing and pay up? Or will it appeal, and continue to delay? Stay tuned.

Watson Memorial Spiritual Temple of Christ v. Korban, No. 2023-CA-0293 (La. Ct. App. Dec. 13, 2023)

Farewell To A Giant - Gideon Kanner (1930-2023)

Aloha, Gideon

This is one of those posts I wish I didn't have to write.

I'm sad to report that our teacher, mentor, and friend Professor Gideon Kanner passed away on Wednesday, November 22, 2023, in his 93d year.

Appellate advocacy, eminent domain, and land use legend. Holocaust survivor. Prolific author and speaker. Argued Agins v. Tiburon at the Supreme Court. Educated generations of dirt lawyers at Loyola LA Law School. And even more through various professional legal education programs at Practicing Law Institute, American Law Institute-American Bar Association (ALI-ABA), and ALI-CLE, among others. One of the two lawyers for whom the Brigham-Kanner Property Rights Project at William and Mary Law School is named.

A person with sharp moral and intellectual clarity. Someone who never, ever -- ever -- gave up or gave in. We could go on and on, but we shall keep it short, because his legacy is secure. 

Many people knew or learned from Gideon, but not everyone understood where he came from. Here's some of that from the LA Daily Journal note about his passing, recently published:

Kanner was born in Poland in 1930, just as the Nazis were coming to power next door in Germany. Kanner's father and uncle were business partners when Hitler invaded Poland in 1939, and the brothers took different approaches to the occupation that led to a tragic outcome.

"His father's family fled, and his uncle's family was killed in the camps. Gideon's family spent much of the war hidden behind a false wall in a peasant's cottage. His older brother Joseph eventually left that sanctuary and essentially walked to Palestine, where he joined the British army," [Michael] Berger said. "After the war, the entire family made its way to New Jersey, where they were reunited and delighted to learn they had all survived."

A high school debate coach taught Gideon Kanner to speak perfect English so he could be understood. An engineering class at Cooper Union School for the Advancement of Science and Art in New York sparked an interest in rocketry. Kanner had a career in the industry that included a stint at Rocketdyne, where he worked on designs that were used to take astronauts to the moon.

While working as an engineer, Kanner began taking night classes at the Detroit College of Law. Then, he moved to Los Angeles and enrolled in the law school at the University of Southern California, from which he graduated in 1961.

After he got his bar card, he and a friend started a real property litigation practice under the shingle Fadem and Kanner.

And all that before he began his teaching career.

Although I did not attend Loyola and was never privileged to sit in his classroom, I owe my career to Gideon. In one of life's weird twists, the very first case I worked on as a young lawyer in a private law firm was a land use and regulatory takings case. But my law school education did not include formal training in property law beyond the first year required Real Property course, and I had no clue at all about land use law, or especially about the then-developing concept of regulatory takings. So I went down to the law library and copied every article on eminent domain, takings, and land use by this apparently well-known professor, Gideon Kanner. On the bus ride home each evening, I would pore over those articles. Thus, in one view, I am "self-taught." But in reality, I had Gideon whispering (maybe yelling would be more appropriate?) in my ear, showing me the way.

One of the proudest days of my professional life is when he wrote me, years later, and asked my thoughts about some issue. Gideon Kanner asking me? Wow.

An adopted son of Hawaii, Gideon was, with his family, a frequent visitor. I loved it when instead of saying "thank you" to me for something, he'd write "mahalo." A real local touch. 

Rather than write more, I'll take the liberty of reprinting some of the thoughts that have been circulating about Gideon this past week. Here's a sampling:

"...an inspiration..."

"One of a kind."

"...a man and lawyer whose life and career fills volumes..."

"...a giant who would never hesitate to help you..."

"The appellate world has lost a legend. A founder and the first president of the California Academy of Appellate Lawyers, he led an amazing life: Holocaust survivor, actual rocket scientist, law professor, eminent domain guru, persistent advocate, fierce advocate, appellate maven, colorful writer ...(and here), blogger, inspiration, raconteur, gadfly, curmudgeon. Those are just a few ways to describe this remarkable mensch."

"Gideon will live on in so many ways."

"...my gratitude for the great work of a great man.."

"The Dean of eminent domain."

"Gideon’s trumpet may be silenced, but the voice of our friend Gideon Kanner will echo for many generations."

"Gideon ... was academically brilliant but also carried the deeply heartfelt conviction to defend liberty in the trenches of the courts as though it could be lost if even one generation took it for granted. That sense of urgency was never absent from his lectures and writing..."

"If there is such a thing in our eminent domain world, Gideon Kanner was a celebrity....He ... had a humorous, caustic cynicism and irreverence for government action and was a terrific, patient teacher....Thank you, Gideon. May your memory be for a blessing."

"His oratory skills are legendary, with many regarding him as one of the finest appellate advocates to come before the California Supreme Court and U.S. Supreme Court....As one would imagine, Gideon’s achievements have been honored by countless awards and acknowledgments. On the international scene, Gideon consulted with the Japanese Construction Ministry to reform Japan’s expropriation laws, co-organized the International Colloquium on Comparative Expropriation Law at Oxford University, England, and was a visiting professor at the University of Aberdeen, Scotland."

"...a great human being..."

"Gideon felt the pain of those who were abused and was quick to call out the abusers."

"Gideon not only thought outside of the box before that phrase even existed, he laughed at the box and delighted in tearing it down."

"In California it is hard to write a brief without citing a case that was Gideon's."

"I can truly say that I became a better lawyer after meeting and interacting with Gideon."

I don't think there is a better professional legacy than the love of your colleagues. I am better for having known him.

Aloha, Professor.

Update: be sure to read Professor Kanner's final article, "Eminent Domain Projects That Didn't Work Out," just published.

We (Re)Join Clint Schumacher's Eminent Domain Podcast: Three Impactful Issues, And The 41st ALI-CLE Conference (New Orleans, Feb 1-3, 2024)

A big thank you to Clint Schumacher and his Eminent Domain Podcast for having us on the program (this is the sixth time, not that we're counting). We joined Clint to chat about three breaking issues in eminent domain (highlighted by the intriguing cases we discuss), as well as to preview the upcoming 41st ALI-CLE Eminent Domain Conference, February 1-3, 2024, in New Orleans.

As Clint describes it:

Robert Thomas of Pacific Legal Foundation joins us for a review of three impactful cases that eminent domain practitioners should watch as they work their way through the courts. We also get a preview of the 2024 ALI-CLE Eminent Domain and Land Valuation Litigation Conference that will be held in New Orleans this coming February.

Click here for information and registration for the ALI-CLE conference.

Please share your thoughts on the show or this episode with me. I’m on X @J_Clint. If you have thoughts about future show guests or ideas for episodes, please let me know.

Stream it above or at your favorite service, or directly from the Eminent Domain Podcast's home.

One note before we leave you to your business: Clint has been producing and hosting this podcast for a while now (127 episodes is nothing to sneeze at in the broadcast world), and week-in and week-out, his audience can count on a new episode with fascinating and relevant content, often featuring the biggest players in the field. It may all seem seamless, but as someone who produces content I can say from experience that it can be a grind: selecting and inviting guests, scheduling, editing, post-production, monitoring and the like -- and then on to the next episode. It's work. All in addition to Clint's work for his clients and his community service (not to mention family). He has some help -- many of you know Claire McGehee who assists him) -- but his team isn't some huge production company. It's just them.

So when you next see or chat with Clint, be sure to let him know how much you (and we listeners) appreciate what he and Claire do.