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Mass SJC: State Requiring Municipalities To Adopt Multi-Family Zoning Is Enforceable By AG...But

The only courthouse we know where the Supreme Court
is below the Court of Appeals (SJC on the second floor,
appellate court on the third)

A brief one from the Supreme Judicial Court of Massachusetts.

In Attorney General v. Town of Milton, No. SJC-13580 (Jan. 8, 2025), the court rejected a challenge to a state statue which allowed the Massachusetts Bay Transportation Authority, the public transit authority in the Boston area, to require municipalities which access the T loosen their zoning regimes to "provide for at least one district of multifamily housing 'as of right' near their local MTBA facilities." Slip op. at 3. One town declined to do so, and the state AG sued to enforce the statute.

The town responded by challenging the statute's validity and the AG's authority to sue to enforce it. Yes on both counts held the SJC. But (and there's a big "but" here, see below)...

As a question of statutory and state constitutional interpretation, this case is mostly of local interest (see the extensive list of amici briefs filed at footnote 2, for example), but us non-Bay Staters may still find some wicked smaht stuff, especially as states nationwide are similarly employing what we call "cram-down" Dillon Ruley strategies to force slow-moving municipalities to get off the dime and loosen their development and zoning regimes to allow more housing (most notably in California).

The court first rejected the argument that the state requiring municipalities to do things violates the state constitution's separation of powers doctrine. You sep-of-powers mavens understand that Massachusetts (led by John Adams) was the first jurisdiction to write down in its constitution the notion that power should be distributed, with the various branches being pushed-and-pulled against each other. That principle manifests in the general notion that the legislature cannot delegate its power to make laws (something land users are familiar with). See pages 10-13 of the slip opinion for the court's analysis supporting its conclusion that no, this was not an illegal delegation from the legislature to the MTBA.

The court also concluded that the AG has the authority to sue in equity to enforce, notwithstanding the fact that the statute does not expressly charge the AG with this power. See slip op. at 15 ("But the Attorney General's enforcement power is not dependent upon whether a particular statute happens to reference it."). If it is in the public interest to enforce a law, the AG can sue.

But (and here's where we get to that "but" we referenced earlier), it turns out that the guidelines promulgated by MTBA on how to implement the statute were not properly adopted under the rulemaking requirements of the Massachusetts Administrative Procedures Act. Do it again and don't do anything until you do, held the court. Slip op. at 22 ("Because HLC failed to comply with the APA, HLC's guidelines are legally ineffective and must be repromulgated in accordance with G. L. c. 30A, § 3, before they may be enforced."). Who says that courts are oblivious to politics?

Attorney General v. Town of Milton, No. SJC-13580 (Mass. Jan. 8, 2025)

CA4: Challenge Public Use/Pretext Under Due Process And § 1983, Not Inverse

The facts in D.A. Realestate Inv., LLC v. City of Norfolk, No. 23-1863 (Jan. 16, 2025), a recent decision from the U.S. Court of Appeals for the Fourth Circuit, are fairly sympathetic. And the opinion starts off with a tantalizing quote:

In 1761, Massachusetts lawyer James Otis exclaimed “one of the most essential branches of English liberty is the freedom of one’s house. A man’s house is his castle.” John Adams’s Reconstruction of Otis’s Speech in the Writs of Assistance Case, in Collected Political Writings of James Otis 12–13 (Richard Samuelson, ed. 2015). American law has embraced that principle since our nation’s founding. U.S. Const. amend. V. But we have also long recognized that “all property in this country is held under the implied obligation that the owner’s use of it shall not be injurious to the community.” Mugler v. Kansas, 123 U.S. 623, 665 (1887).

Slip op. at 3.

But still no succor from the court.

While an active-duty sailor was deployed, the city determined his property was uninhabitable. It sent and posted notices, but the mailed notices were returned to sender. A few months later, the city tried again. After returning from deployment, the owner did some maintenance, but didn't directly respond to the city's determination the property was uninhabitable (the record doesn't reveal whether the owner knew of the determination).

And the next year, the Navy deployed the owner again for a short time. Upon his return he "saw a faded notice posted to the house[,]" after which he contacted the city. Slip op. at 6. But that apparently went nowhere, and "[i]n June 2018, the city prepared another notice of violation letter[,]" that gave the owner 30 days to remediate, or else the city would demolish it. Slip op. at 7. No response. At the end of 2018, the city tore down the building.

Three years later, the owner sued for, inter alia, due process, a federal taking, and a Virginia-law inverse condemnation claim. The district court granted the city summary judgment.

The owner appealed to the Fourth Circuit, but limited the issue to to whether the Virginia inverse claim was subject to disputed facts, and abandoned appeal of the federal claims. Slip op. at 10 ("Thus, the only issue before us is whether Fox showed any genuine dispute of material fact related to his Virginia inverse condemnation claim."). In other words, a federal appeals court was going to be weighing in solely on a state law issue, and even then only on the relatively narrow question of whether the owner had pointed to evidence sufficient to meet his minimal burden of production on summary judgment (not persuasion).

That, and the fact that the resulting opinion is published, should give you some clue that any truly interesting insight this was going to produce might lie in the dicta. We'll get to that intriguing dicta in a moment, but first the holding (affirmed).

The court began by noting:

When this collision [the tension between using your property how you like versus the obligation not to use it in a way that harms others] occurs in Virginia, the government has two options. It can abate a public nuisance without paying compensation. Or it can exercise its right of eminent domain based on the public use of blight elimination. In the latter situation, the government may acquire title to the property, but it must pay the owner just compensation.

Slip op. at 3.

The owner claimed that there's a factual dispute regarding whether his property was a nuisance, and that a jury alone can make that determination. The court rejected the argument, first because he had a chance to challenge the city's administrative determination that the property was a nuisance, and he failed to use the city's appeal process to chase that down. The second, and more important reason was that it is not material under Virginia law whether or not the house was a nuisance. The court noted that Virginia caselaw treats nuisance abatement as an exercise of police power exempt from the obligation to provide just compensation. So it it was a nuisance, no inverse liability.

And if it wasn't a nuisance, then the destruction was ultra vires; an essential element of a Virginia inverse claim is proof that the taking was for a public use:

As a result, if Fox is right that the house posed no danger to public health or safety, he’s correct that it is not a nuisance under Virginia law. But for the same reason, it did not constitute blight. See id. § 1-219.1(B). And since eliminating blight is the only potentially applicable public use here, Fox cannot show the “public use” element of an inverse condemnation claim. See AGCS, 800 S.E.2d at 163 (“Inverse condemnation permits recovery only when property is taken or damaged for public use.” (internal quotation omitted)). In sum, whether the house constituted a nuisance is immaterial—Fox’s inverse condemnation claim fails whether the answer is yes or no.

Slip op. at 14-15 (footnotes omitted). 

Next, the court rejected the owner's argument "that a jury must resolve whether the city pretextually stated a purpose of blight elimination or nuisance abatement." Slip op. at 15. The owner had raised vague allegations that the real reason for the demolition of the house was not that it was blighted, but because Norfolk wanted to free up the site for redevelopment. The court held this claim was not supported by any evidence to meet the owner's Rule 56 burden. See slip op. at 17. Game over.

Now, here's the useful dicta in the case. The court noted that it was not saying that these type of circumstances can never present a claim. It recognized that the pretext situation could be pressed in several ways. First, the owner might have administratively appealed the nuisance determination. Or "he could have brought at timely § 1983 due process claim for an unlawful taking." Slip op. at 16 (citations omitted).

Take that last one and keep it in your file for future deployment.

D.A. Realestate Inv., LLC v. City of Norfolk, No. 23-1863 (4th Cir. Jan. 16, 2025)

Two New Cert Petitions (Ours) - 50 Years Of Fruitless Trying Is Enough: Overrule Or Clarify Penn Central!

Two -- count 'em two! -- cert petitions from our shop, filed today. Both call for "clarifying or overruling" Penn Central.

Oh, have I got your attention now?

• Petition for a Writ of Certiorari, The Gym 24/7 Fitness, LLC v. Michigan, No. 24-____ (U.S. Jan. 15, 2025)
• Petition for a Writ of Certiorari, Mount Clemens Recreational Bowl, Inc. v. Hertel, No. 24-____ (U.S. Jan. 15, 2025)

Both arise out of the Michigan governor's orders shuttering some, but not all, businesses during Co-19. These had devastating consequences, and owners sued for, inter alia, a taking, asserting a Penn Central theory. As we noted here, the Gym 24/7 case went up through the Michigan court system, with the Supreme Court eventually denying discretionary review over an extensive dissent. The Mount Clemens Recreational Bowl case took pretty much the same path. 

We're not going to say much more because these petitions are ours, with Jon Houghton and Deb La Fetra walking point.

Here are the Questions Presented:

In the Gym 24/7 case:

In this Fifth Amendment regulatory takings case, Michigan’s Executive Order took dominion and control of the use of Petitioner’s commercial property. It barred all customers from the premises for six months, which erased the property’s economic use and destroyed Petitioner’s reasonable investment-backed expectations to benefit the general public. However, Michigan courts dismissed Petitioner’s case at the pleadings stage, generating three disparate opinions, with two different outcomes, and three conflicting interpretations of Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978). The result demonstrates Penn Central’s inability to protect fundamental property rights and to provide a clear, consistent, and uniform determination of “how far is too far.” There is also tension in this Court’s decisions, and those below, as to whether the element of time should be a determinant of takings liability. The questions presented are:

1. Whether Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 (1978), should be clarified or overruled?

2. Whether a taking occurs upon the government asserting control over a property right, as the Court held in Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021), or instead, upon the government asserting control over a property right for some undefined period of time, as the Court held in Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Plan. Agency, 535 U.S. 302 (2002)?

In the Mount Clemens Recreational Bowl case:

Whether Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978), should be clarified or overruled?

Stay tuned.

Petition for a Writ of Certiorari, The Gym 24/7 Fitness, LLC v. Michigan, No. 24-____ (U.S. Jan. 15, 2025)

Petition for a Writ of Certiorari, Mount Clemens Recreational Bowl, Inc. v. Hertel, No. 24-____ (U.S. Jan....

NJ's Forfeiture Statute Is A Taking Of Surplus Home Equity

If you thought the issue of whether it is a Fifth Amendment taking for a state or local government to "keep the change" after satisfying a tax debt was settled by the U.S. Supreme Court in Tyler v. Hennepin County, 598 U.S. 631 (2023), you'd be right.

Then what was there left for the New Jersey Supreme Court to decide in 257-261 20th Avenue Realty, LLC v. Roberto, No. A-29-23 (Jan. 9, 2025)? Some interesting stuff, it turns out.

And before you conclude that this is just piling-on, remember -- they wanted this: after Tyler, instead of reading the U.S. Supreme Court's decision and the writing on the wall, some state and local governments, unhappy with being cut off from a source of easy money, tried to figure ways to avoid or negate the rule that if there's money left over after you satisfy a tax debt, you gotta give it back. 

After a Jersey owner of a mixed-use property failed to pay $606 in sewer tax bills, the city placed liens on the property. Under the authority of a state statute (the Tax Sale Law), a a private firm purchased the tax sales certificates, after which it filed a tax foreclosure lawsuit. The owner tried to redeem by offering $9,000 but the court held the amount owed was $33 grand. The owner didn't answer the complaint, didn't redeem, and the court entered final judgment in favor of the private lienholder. Later, after the owner posted $50k in escrow, he asked the court to vacate the judgment, allow him to redeem, and to restore title. The court said yes. 

During the pendency of the lienholder's appeal, the U.S. Supreme Court issued Tyler, and the NJ appellate division affirmed the judgment in favor of the owner, rejecting the lienholder's argument that Tyler only applied when governments take surplus home equity, and that the ruling was not retroactive. The NJ Supreme Court agreed to review the case, after which many many amici jumped in (our firm, which represented the property owner in Tyler, included).

First, the court noted that local government rely on real estate taxes as their primary source of revenue, and that the Tax Sale Law's foreclosure procedure allows municipalities to "collect a stream of revenue when property owners do not pay their taxes." Slip op. at 10. The tax foreclosure process has been around in some form in New Jersey for a while (1886). And the TSL permits local governments to sell the lien to private parties. 

The court next acknowledged that may be so, but also noted Tyler held that a good reason for the taking doesn't relieve the obligation to take only with compensation, and that a state's property law only can go so far in defining what counts as "private property" under the Fifth Amendment. And "Tyler, of course, is binding precedent of the United States Supreme Court." Slip op. at 22. Indeed, we'd have pretty much the same result even without Tyler, because "New Jersey, similarly, has long recognized a property right to surplus equity in different contexts." Slip op. at 26. Thus, "[a]s in Minnesota, therefore, property owners in New Jersey have a recognized property right to surplus equity." Slip op. at 27.

The big issue the court resolved was whether Tyler was limited only to government actors, and whether the plaintiff here -- a private outfit that purchased the tax lien from the city under the TSL -- was immune. The court held no, the private actor's actions were fairly attributable to the state, and "the purpose, structure, and practical application of New Jersey’s TSL demonstrate that private lienholders who execute tax foreclosures may be considered state actors." Slip op. at 28. Collecting taxes is a traditional public function as is seizing properties to satisfy a tax debt, and the lienholder here acted under the authority of the TSL, "working in tandem" with local government. 

A final thought: maybe instead of resisting the vibe of Tyler, state and local governments should be working to meet their constitutional obligations instead of trying to craft ways to get around the Supreme Court's rulings? The whole "turn square corners" thing doesn't seem like it's too much to ask, does it? 

(And what's with the video above and what does this have to do with the case? Nothing, we just like it, and it's Friday.)

257-261 20th Avenue Realty, LLC v. Roberto, No. A-29-23 (N.J. Jan. 9, 2025)

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

Iowa: Mandatory Inspection Of Rental Units Without A Warrant Is Not Facially Unconstitutional, Because Private Inspectors Might Barge In

It's been a couple of weeks, but we're still trying to wrap our head around the Iowa Supreme Court's opinion in Singer v. City of Orange City, No. 23-1600 (Dec. 20, 2024).

The court rejected a facial challenge under the Iowa Constitution's search-and-seizure clause to a city ordinance requiring the owner of rental units to have a rental permit and to submit to "regular inspections" of those properties. The ordinance purports to create a "right of entry" for a "code official," and if the owner refuses to voluntarily allow inspection, the inspector may obtain an "administrative search warrant" to enter and search. An owner can exempt itself from inspection by a city inspector if a unit is "inspected by a certified third-party inspection organization[.]" And the ordinance says nothing about probable cause.

Several owners sued, and after discovery, the court granted the plaintiff-owners summary judgment. It declared the ordinance facially unconstitutional, and enjoined the city from seeking administrative warrants. The city appealed.

The court considered the owners' argument that the Iowa Constitution requires evidence of an actual violation before issuance of an administrative warrant. The Fourth Amendment, by contrast, allows administrative warrants even if there's no specific knowledge of a violation in a particular property. No, our Iowa standards are the same, held the court.

Also considered was the owners' argument that the city's ordinance does not require any showing of probable cause. This is a facial challenge, reminded the court, and we know how hard those are. A "facial" challenge means that the ordinance is "incapable of any valid application." Slip op. at 10. So let's make up some situations where the ordinance might be applied in an ok way. Could there be a set of facts in which the ordinance could be applied in a constitutional fashion? Court court imagined three examples.

First, there may be some circumstances where a city inspector gets an administrative warrant based on probable cause. You never know, an inspector may be willing to do more work than the ordinance requires. Second, the ordinance allows the city to pursue other "remedies provided by law" and not just an administrative search warrant. The court doesn't say what those other remedies might be, but hey, those remedies might accord with the constitution, you never know!

And finally (and this is the part where we really have trouble), an owner might have a rental unit exempt from city inspection, where a certified "private party" conduct the inspection. Who or what is a "private party" inspector? Heck if we know (and apparently neither does the court, which explicates no further on the notion). For what it is worth, we're not quite seeing this one as clearly as the court apparently did. Would not an inspection by a government-certified inspector -- even an inspector employed privately -- entering under the authority of the ordinance be treated pretty much the same as a government inspector? And if the court were to consider opting into the private-inspector exemption a voluntary act, would that not raise unconstitutional conditions problems?

Likely next up? An as-applied challenge, perhaps.

Singer v. City of Orange City, No. 23-1600 (Iowa Dec. 20, 2024)

Announcement: State & Local Govt Law Writing Competition

Heads up law students and young lawyers: the American Bar Association's Section of State & Local Government Law has called for submissions for its annual writing competition.

Topics which the Urban Lawyer publish pieces about include land use, takings, eminent domain, housing, RLUIPA, exactions ... and more. 

Here's the announcement: 

The State and Local Government Law Section of the ABA is holding its annual Writing Competition, with the winner to be published in the Section’s Law Review, The Urban Lawyer.

The Section invites all those who qualify as young lawyers (less than 36 years old or in practice for less than 10 years) and law students to submit articles of 25-50 pages in length, and properly footnoted, on any topic of state or local government law of their choice.

Membership in the ABA as a Law Student or in the ABA Young Lawyer Division is encouraged but is not required to enter the competition (join at ambar.org/join). Articles are due to the Section by January 15, and the winners will be announced by February 15. The Urban Lawyer Submission Guidelines.

There's still time to submit a piece for consideration.

(Un?)Happy Euclid Day!

98 years old, and still going (for better or worse)

On this day in 1926, the United States Supreme Court issued its landmark opinion in Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (Nov. 22, 1926).

You know this one (and can you call yourself a dirt lawyer if you don't?). It's the one in which the Supreme Court first upheld -- against a facial due process challenge -- the validity of this thing we call "zoning." While in the intervening century, zoning has become a catch-all term for all sorts of regulatory restrictions on the uses of real property, land users know that "zoning" -- ackshually -- refers only to the regulation and separation of uses, and restrictions on density, and height regulation. At least that's how it began.

While "Euclid" and "Euclidean zoning" have become part of the land use lexicon and landscape, the decision might have been seen at the time as somewhat surprising. After all, the Supreme Court was in the height of the so-called Lochner era, when it might have been expected to get the legal vapors over these type of restrictions on economic liberty and property. In an era when the Court was more aggressively policing the police power, for it to uphold, even generally, the validity of zoning restrictions, might not have been expected.

And perhaps even more surprisingly, the opinion was authored by none other than Justice George Sutherland, one of the notorious Four Horsemen who would later regularly vote to invalidate similar New Deal legislation.

But Sutherland and the Court went the other way on this "zoning" thing, applying what later became known as the rational basis standard of review. Fairly debatable? No sweat. Who are we, mere judges, to say otherwise?

What accounts for that? Some have noted that the "Bettman Brief," a late-filed amicus (submitted after oral argument) on behalf of the National Conference on City Planning and others, held sway. The dots are not that difficult to connect -- much of the language and imagery in the Euclid opinion such as the "parasitic" nature of (horrors!) apartments -- comes straight out of the Bettman brief. And it also isn't that hard to connect the dots between a facially-neutral tool of exclusion like zoning, and the Supreme Court's then-recent rejection of express racial discrimination in local land use regulations (we're talking Buchanan v. Warley, 245 U.S. 60 (1917)).

But despite those roots, with a few hiccups along the way -- a mere four year later, pretty much the very same Court held in Nectow v. City of Cambridge, 277 U.S. 183 (1928) that, as applied to a specific parcel, Euclidean zoning was arbitrary and capricious and violated a property owner's rights, with the very same Justice Sutherland authoring the opinion -- zoning has been widely accepted around the nation (except, most notoriously, in Houston, which has opted for a more ad hoc, less comprehensive plan-based form of use regulation), with the courts doing little to stand in the way.

These days, however, there's a renewed focus on Euclid and zoning's troublesome roots. Thus, our title's "un" headline. But even as we reckon with that history, zoning chugs along towards the century mark.

Let's see what the next two years might bring. In the meantime, we're going to recognize Euclid's birthday. Whether it is a happy one is subject to change.

Euclid is literally a landmark decision.

Brief Amici Curiae of National Conference on City Planning, Village of Euclid v. Ambler Realty Co., No. 25-...

 

 

CA11: Takings Claim Not Ready Despite Govt's Enforcement Actions

Lake Worth: the "lago" in Mar-a-Lago

You know his name. He's taken on the City of Riviera Beach twice at the U.S. Supreme Court. And won both times. The houseboat that isn't a boat. The government can't shut you out from speaking your mind simply because you irritate them.

That's right, it's Fane Lozman. A "Florida Man" that you can like and admire. And he's back for Round 3.

He owns property that's mostly in (in, not near) Lake Worth. Two-tenths of an acre is uplands, and the rest (7.75 acres) is submerged. As the Eleventh Circuit noted, "[o]nly a sliver of Lozman's property is above water." 

The city, in accordance with the usual approach to land use regulation has a comprehensive plan. That plan designates submerged lands as "Special Preservation Future Land Use," a label which should set off your Lucas bells, because it mostly sounds like no use. Sure enough, that designation originally "preclude[d] any development of Submerged Lands ... to the maximum extent permissible by law."

Perhaps understanding the legal jeopardy which that put the city in, in 2010 it amended the plan to allow some uses. At the time Lozman purchased the property in 2014, the designation at least in theory allowed private residential fishing or viewing platforms and docks, and -- get this -- included a "savings clause" that prohibited the city from denying uses that were "judicially determined vested rights to develop or alter submerged lands." We see what you did there, city. In 2021, the city tweaked the plan a bit more, limiting such vested uses to a one-per-20-acre density.

But that's not the end of the story. Turns out that until after Lozman's 2014 purchase, the underlying zoning did not conform to the restrictive "Special Preservation Land Use" general plan designation. Uh oh. Indeed, the zoning allowed development of single-family homes. That was a great disturbance in the Force, and that sound you hear is the collective voices of municipal lawyers and planners crying out in terror. Eventually the city caught on, and in 2020, when it created a zoning designation that matched the general plan preservation designation.

Lozman was not one to let that slip by:

Lozman says that when he purchased the parcel, he “expected that it could be developed for use as single-family residential lots.” Lozman purchased the property in 2014 for $24,000. But he produced an appraisal valuing the property at $49,833,500 as of October 7, 2020. This valuation depends on Lozman maximizing the property’s “highest and best use”—bulkheading and filling the sub-merged water to create “up to eight one-acre parcels.” The appraisal was also “based on the hypothetical condition that permits could be granted for bulkhead and fill.”

Lozman v. City of Riviera Beach, No. 23-1119, slip op. at 4 (11th Cir. Oct. 16, 2024).

Zoning is king, and it controls what restrictions there are on property uses (right?), so Lozman sued for a Lucas taking in federal court. The district court granted the city summary judgment, but on appeal, the Eleventh Circuit held the case wasn't ripe, under Williamson County's still-surviving "final decision" ripeness rule. You know the drill: before an owner can move forward with a claim that a land use restriction is a taking, the regulating authority must have made a "final decision" about what uses are allowed under the restriction.

While grounded in the entirely rational notion that a court is not able to evaluate whether there's been a taking until it knows what uses an owner can make of property under the challenged restrictions, we know in practice the final decision rule is mostly a finger pointing the way to municipal approval purgatory. Having been incentivized by the Supreme Court to avoid saying "no" with clarity (after all, who wants to be sued for a taking!), while at the same time not wanting to say "yes" (here, for example, the city's restrictions contemplate preservation, not development -- would the city really be ok with seven residences smack dab in the Lago?), the easiest path for the government is to direct the owner into a byzantine maze with no realistic prospect of getting to either a yes or a no. And then hope that the thousand cuts weaken body and soul, and he taps out.

Here, the Eleventh Circuit concluded that Lozman hadn't bothered to ask the city for a development permit, nor the Corps of Engineers for a section 10 dredge-and-fill permit, both of which he would need in order to build up to the use allowed by the zoning. Slip  op. at 6 ("But Lozman has not yet acquired—or applied for—federal or state permits to develop his property."). Easy case, right? No final decision unless the owner asks the city. Or, you don't have to ask if doing so would be futile.

But that isn't all the story. Both the Corps and the State of Florida were (are?) hot on Lozman's tail with enforcement actions. It turns out that he didn't wait for permission, and he built "structures in the Lagoon without authorization in violation of the Rivers and Harbors Act." The State of Florida "instituted a similar action against Lozman in December 2020." Slip op. at 6. In each case, the government agencies obtained rulings preventing Lozman from doing anything.

The Eleventh Circuit disagreed with the district court's granting of summary judgment for the city, holding instead that Lozman did not allege a ripe case, because there's no indication he ever asked the city for permission to develop. The restrictive comprehensive plan were not sufficiently restrictive to show that there's no uses possible (however remote and unrealistic obtaining permission might be). And Lozman had not sought a variance.

The same reasoning applies here. The comprehensive plan alone cannot constitute a final decision on Lozman’s property. That the comprehensive plan includes a material exception permitting development underscores that the plan alone is not a final decision precluding the development of Lozman’s property. Because he has not applied for a permit, variance, or rezoning from Riviera Beach on the application of the comprehensive plan to his property, Lozman has not yet received a final decision on the comprehensive plan’s application to his property.

Slip op. at 9.

Nor a rezoning (on this one, we have real heartburn because a property owner can never be required to seek legislation in order to ripen a takings claim).

The court also rejected -- as most courts do -- the claim that seeking permission was futile. There are always possibilities, and courts are all too willing to accept a municipal claim that if only an owner would do it right, we might approve some use. Even here, where the feds and the state are coming after Lozman when he made uses of the property well short of what the zoning would allow. Anyone actually think any government would let him do anything? 

The Eleventh Circuit may have made short work of his case. And if there's a bright side of life part of the decision is that it reversed the district court's adverse decision on merits, and dismissed his takings claim without prejudice.

And if I were a betting man, I wouldn't count Mr. Lozman out just yet.

Lozman v. City of Riviera Beach, No. 23-11119 (11th Cir. Oct. 16, 2024)

Links From Today's ABA Land Use Session

Here are the cases and other materials we discussed in today's Section of State & Local Government Law Land Use group meeting on takings:

• By The Thinnest Of Margins, SCOTUS Declines Public Use Pretext "Spite Taking" Case
• SCOTUS Declines To Review NYC Rent Control Challenge
• Sheetz pt. I - "Radical Agreement" At SCOTUS: "Your Money Or Your Rights" Isn't OK Just Because A Legislature Does It
• In DeVillier v. Texas, The Winner Takes It All
• Unanimous SCOTUS: "state law cannot be the only source" Of Property Rights, And "traditional property law principles" As Enforced By The Takings Clause Play A Role
• "Final decision" ripeness incentivizes government to be opaque, and avoid saying no.
• Texas takes a more practical (and realistic) approach to takings ripeness: City of Buda v. N.M. Edificios and City of Kemah v. Crow
• New Cert Petition: Does The Obligation To Provide Just Compensation Waive Sovereign Immunity?
• Inverse liability for wildfires?
• New Law Review Article: John Groen, "Takings, Original Meaning, and Applying Property Law Principles to Fix Penn Central," 39 Touro L. Rev. 973 (2024)
• Yee v. Escondido and physical occupation takings lower court split: CA8: Yee v. Escondido Doesn't Save Eviction Moratorium From Takings Review and CA9: No Physical Commandeering In Eviction Moratorium Because Yee Says "You Let The Tenants In, So You Can't Complain About Keeping Them (For Free)"
• Florida Appeals Court: TDRs, Beekeeping, And Camping Are Not Economically-Beneficial Uses, So Downzoning Is A Lucas Taking

PS: If you are not a member of the Land Use group, you really should be. We summed up the reasons why here.

The Old "Neighborhood Character" Trope Dressed In Environmental Clothing

Justice Sutherland asks:
whadda mean, you don't like apartments?

Check out this uncharacteristically-lengthy opinion from New York's Appellate Division (and entire 6 pages!).

In Bennett v. Troy City Council, No. CV023-0709 (Oct. 24, 2024), the court invalidated a municipal upzoning (from single-family residential to Planned Development -- which would permit apartments) because the city's conclusion that the zone change would have no significant environmental impact under New York's study-and-disclose statute.

Not content with apartments coming to the neighborhood, an adjoining owner, the "coufounder of The Friends of the Mahicantuck," sued to challenge the negative environmental declaration. Under New York's environmental study-and-disclose statute, the "environment" may include such things like historic or archaeological resources, and similar. 

Zoning and rezoning is generally subject to deferential judicial review under Euclid, with the courts applying rational basis review and generally taking a hands-off approach. But this was not a Euclid-like challenge arguing that the upzoning was arbitrary and capricious. The environmental statute empowered the court to delve into the record, and determine for itself whether the city's negative declaration had a sufficient factual basis and the city had applied the required scrutiny to those facts.

Short story: it didn't:

In view of the site's significant archaeological history, and the omission of the Stockbridge-Munsee Community as a consulting party in formulating any required data retrieval plan, we find that respondent failed to take the necessary hard look at the significant environmental impact expected from the project by issuing a negative declaration.

Slip op. at 5.

The challengers also brought a spot zoning claim which the court rejected by applying the rational basis/fairly debatable test:

While the project certainly differs from the existing single-family zoning, it does maintain a residential use and would establish a multi-use trail along the shoreline opening public access to the Hudson River. The initial rejection of the proposal by the Planning Commission is relevant to this compatibility question (see Matter of Save Our Forest Action Coalition v City of Kingston, 246 AD2d 217, 221 [3d Dept 1998]), but the record was expanded by the EDP October 2021 report prior to respondent's determination. Under these circumstances, where the question of compatibility is "fairly debatable," we conclude that petitioner did not meet her burden of demonstrating that the zoning amendment constituted illegal spot zoning (Matter of Evans v City of Saratoga Springs, 202 AD3d at 1324 [internal quotation marks and citations omitted]; see Matter of Heights of Lansing, LLC v Village of Lansing, 160 AD3d 1165, 1169 [3d Dept 2018]).

Slip op. at 6.

The presence of the spot zoning claim tells us that this was not, at heart, a true environmental challenge but more NIMBYs who don't want apartments ruining the character of their neighborhood who found a way to dress up those objections in environmental clothing.

Bennett v. Troy City Council, No. CV-23-0709 (N.Y. App. Div. Oct. 24, 2024)

Guest Post: P'Nut, The Fourth Amendment, And Property Rights

Mr. Otis would be a P'Nut fan.

Our Pacific Legal Foundation colleague and search-and-seizure expert Daniel Woislaw quickly responded to the cultural zeitgeist and looked into l'affaire P'nut le Squirrel with his keen legal eye.

That's the case in which an internet narc dropped dime on the owner of a pet squirrel, resulting in New York state game officials obtaining a warrant, searching his home, confiscating said squirrel and his little buddy Fred the Raccoon, and then through a series of unfortunate events, putting both P'Nut and Fred down. Sad!

Here's Daniel's thoughts.

+++++++++++++++++++++++++++++++++++++++++++++++

Government kills pet squirrel P'Nut in Fourth Amendment horror story

Daniel Woislaw

In a small corner of New York State, a family’s quiet, peaceful home was shattered by an unthinkable intrusion. Environmental police stormed in, seized a rescued orphan squirrel named P’Nut, took him away, and put him down. All because his owner allegedly didn’t have the right license. That’s right: In New York you need a license to shelter injured wildlife and provide them a home.  

The raid on P’Nut’s home has exposed the public to a government practice that has been festering unnoticed for too long. Increasingly, federal, state, and local authorities have been intruding on private property and employing unnecessary and exceptional force to regulate increasingly trivial aspects of Americans’ lives. 

The way government does this is straightforward. First, it makes it illegal to do something commonplace without a license—which means agents can obtain a warrant for your property over the “crime” of being unlicensed. That’s what happened in P’Nut’s case: The New York Department of Environmental Conservation raided the home on a warrant after receiving tips about “the illegal keeping of wildlife as pets.” 

But when the government does issue a license, it attaches strings. Sometimes the strings are large fees or time-consuming educational requirements, but increasingly, those strings include the power to enter homes, businesses, and other private properties at will, and without a warrant or probable cause. 

In other words, while P’Nut’s owners were raided because they didn’t have the right government license, many other Americans must tolerate home invasions because they did get the right license. Such intrusions have become all too commonplace in “the land of the free.” 

It’s not supposed to work like this. Our Constitution’s Fourth Amendment was specifically designed to prevent this kind of routine governmental overreach. At the time of the Founding, the American public knew firsthand the dangers of “general warrants”—vague permissions granted to authorities to search any home at any time. These general warrants were a major grievance leading up to the American Revolution, sparking outrage across the colonies. The concept of private property and freedom within one’s home was not just a matter of personal comfort, but a core element of the fight for independence. 

Yet consider how commonplace government intrusions are today. California, for example, requires falconers as a condition of owning their birds to agree in writing that armed conservation police can enter their homes at will. No warrant, cause, or notice is required. Refusal is a criminal offense. And if falconers simply chose not to get a license, they’d risk the same type of raid that occurred at P’Nut’s home. Thankfully, in a case brought by Pacific Legal Foundation, the falconers are fighting the requirement in court.  

In Billings, Montana, the local government did the same thing with massage therapists. Therapists who work from home and apply for a mandatory license must agree to submit to unannounced intrusions by government agents—ostensibly to make sure the therapists are not prostitutes. Continuing to practice without this license (in addition to the license, ethics, and education requirements that the state already imposes) is grounds for arrest.  

And in San Bernardino County, state environmental regulators are going door-to-door executing over-broad general warrants to look for pests. In one case, a judge signed off on a warrant covering over 500 square miles and thousands of homes so that conservation officers can snoop in people’s yards and patios looking for fruit flies. These general warrants aren’t a far cry from those that allowed British customs officials to search anywhere, anytime, in pre-Revolutionary America. In a famous legal argument then, one prominent Boston lawyer argued that general searches of this nature threaten the fundamental freedoms that make this land free. 

Even something as minor as keeping a ham radio in your bedroom can expose your home to unannounced government intrusions: To operate a ham radio, you’re required to obtain a federal license—and the licensure rules require you to allow federal inspections without a warrant.  

With Pacific Legal Foundation’s help, Americans whose constitutional rights were violated over California’s falconry regulations, Billings’ anti-massage-therapy law, and the general searches in San Bernardino are fighting back in court. 

The right to be secure in our homes, businesses, and other private properties against arbitrary and forceful intrusions by the government stretches back to the English common law maxim that “a man’s home is his castle.” For centuries, the Anglo-American legal tradition has recognized the home as a sanctuary, shielded against arbitrary government intrusion. The principle is simple but profound: A person’s home is an extension of their freedom, an intimate space where they can retreat from the eyes of the state. Allowing government agents to enter private homes at will, especially for minor or technical infractions, erodes this sacred boundary and undermines the liberty that our nation was founded to protect. 

In the face of these historical lessons, the actions of New York State’s environmental police feel like a grave regression. By using force to raid a home over a small, compassionate act—caring for a tiny, orphaned squirrel—the government has sent a chilling message about its priorities. This was not a defense of public safety but an abuse of authority, carried out under the guise of “regulation.” 

Ultimately, the raid on P’Nut’s family home is more than just an isolated case of overreach; it reflects a troubling trend. If we allow the government to use force to intrude into homes for minor violations, we risk losing one of our most fundamental freedoms—the right to privacy and security in our own homes. Americans must demand that this sacred boundary be respected.

By holding our government accountable and insisting on the original intent of the Fourth Amendment, PLF is working to protect Americans’ liberties. If you’re a victim of an unconstitutional government intrusion, PLF may be able to help.  

 

Oral Arguments In Texas Takings Case: If The Govt Limits Use For Healthsafetywelfaremorals, Is It Exempt From Takings?

Charles McFarland, arguing.

Here's the latest in a case we've been following closely (and disclosure: our firm filed an amicus brief in the Texas Supreme Court).

In The Commons of Lake Houston, Ltd. v. City of Houston, the Texas Court of Appeals held that the city could not be liable for a taking for an ordinance that limited development and use within the city's 100-and-500-year floodplains because the ordinance was a valid exercise of police power and otherwise survived the rational basis test.

As we wrote here, that seems like utter nonsense to say that a valid police power reason categorically insulates a government action from a takings challenge. After all, the entire regulatory takings doctrine is built on the notion that an otherwise-valid exercise of government power (here, the police power, delegated from the State to the city) can so impact an owner's property rights that the law will treat it as a de facto exercise of eminent domain, and require just compensation. The doctrine pretty much presumes that the governmental action is valid, and challenges to what are claimed to be invalid government actions fall under the due process label.

Our friend and colleague Charles McFarland represents the property owner. Last week, he presented oral argument at the Texas Supreme Court (watch the video here). 

Here are the Issues Presented by the property owner:

1.     The lower court erred in applying a bright-line flooding mitigation exception to the Texas Constitution’s requirement of compensation for the taking, damaging, or destruction of private property.

2.    The lower court erred in applying a bright-line “police power” exception to the Texas Constitution’s requirement of compensation for the taking, damaging, or destruction of private property.

3.    The lower court erred in failing to apply the state-law standard of the Texas Constitution’s takings clause, which allows for compensation when government action damages private property for public use.

The State of Texas does not agree with this formulation of the issues. Instead, it argues these are the issues (apparently leaving nothing, kitchen sink included, off the table):

1.    Whether Petitioner has standing to assert purported takings/damaged property claims?

2.    Alternatively, whether Petitioner’s purported takings/damaged property claims are ripe?

3.    Alternatively, whether Petitioner’s claims are redressable; therefore, whether Petitioner was improperly deprived of review under Penn Central or any other requested test?

4.    Alternatively, whether Houston is immune from Petitioner’s takings/damaged property claims because local floodplain regulations that track FEMA/NFIP requirements do not constitute a taking?

5.    Alternatively, whether Houston is immune from Petitioner’s claims because this Court’s decision in Turtle Rock and its progeny hold that the application of Houston’s floodplain regulations to Petitioner’s property, if any, is not a compensable taking?

6.    Alternatively, whether Petitioner’s new, blanket rule—that all local land-use regulations that adversely affect property automatically constitutes a taking and/or “damaged” property under article I, section 17, entitling the landowner to Penn Central or other compensation analysis—contravenes Texas law?

7.    Whether Petitioner’s “damaged” property claim is time barred?

8.    Whether Petitioner has suffered a compensable injury under Article I, Section 17’s “damaged” property provision?

Watch the oral argument recording to see how the court addresses these seemingly very divergent worldviews.

More on the case here, including all the briefing.

Stay tuned. We'll bring you the court's ruling when it is issued.

New Cert Petition: Does A Taking For Public Use Become A Problem If The Govt Later Abandons That Use?

Here's the latest in a case we've been following, which has now results in a cert petition from Michael Berger. This one involves some very intriguing questions about what limits the Constitution places on the government acquiring property for a public use (in this case, an "airport purpose") but then later deciding it would rather do something else with the property.

Check out the Questions Presented:

The City and County of Denver condemned 8,360 acres of land from Petitioner Monaghan Farms as part of its land acquisition for the creation of the Denver International Airport, including a large area surrounding the facility to serve as an environmental buffer and safety zone. Thirty-four years later, Denver decided to use approximately half that land (which had not been used for airport purposes) for commercial nonaeronautical developments. But the power of eminent domain may only be used to take property for public use.

The Colorado courts exacerbated the situation by assuming that conversion to private, commercial, non-aeronautical use was an “airport purpose” as a matter of law, expressly refusing to permit discovery to ascertain the truth or accuracy of that assumption, and then deciding the case as a matter of law without a trial.

Question 1: Is it an appropriate application of Kelo v. City of New London, 545 U.S. 469 (2005) to take property for public use (in the sense of actual use by the public) and then later decide to devote that property to private commercial use without reconsidering the constitutional public use requirement?

Question 2: When property has been taken by eminent domain for a specific public use (construct and operate an airport), may that property later be devoted to a wholly different, commercial, nonaeronautical development that abandons the prior public use?

Question 3: Does this Court’s recent decision in Loper Bright (2024) call for re-examining the duty of the judiciary to exercise independent judgment in deciding public use under Kelo?

Question 4: When a court decides a case based on a “legal” determination of a central “fact” while denying either discovery or trial on the merits, has it denied due process of law?

Question 5: Does it satisfy the Fifth Amendment’s requirements for exercising eminent domain (incorporated through the Fourteenth Amendment against the states) for the sovereign to seize land in fee simple absolute when (1) the condemnation petition did not explicitly seek fee simple absolute title, (2) the condemnor did not pay full fair market value for the fee simple absolute rights to the property that was taken, (3) the property was not used for its intended public purpose, and (4) the property was later devoted to private use?

Stay tuned.

Petition for a Writ of Certiorari, Monaghan Farms, Inc. v. City and County of Denver, No. __ (U.S. Oct. 31,...

Call For Papers: "Housing and Exactions: The Next Frontiers After Sheetz"

Our outfit (Pacific Legal Foundation) has put out a call for papers. on the topic of land use exactions and housing law. Honorarium included for accepted papers, and there will be a workshop to follow.

Here's the description:

This workshop seeks to build on the result of Sheetz v. County of El Dorado and chart the course of the next steps in exactions/unconstitutional-conditions law. From Nollan v. California Coastal Commission, through Dolan v. City of Tigard and Koontz v. St. John’s River Water Management District, and now including Sheetz, the Supreme Court has looked to the doctrine of exactions and unconstitutional conditions to ensure property rights are protected. In doing so, it has created a constitutional bulwark protecting the right to build housing on private property, an important stick in the property rights bundle.

The Supreme Court’s unanimous decision in Sheetz held that legislatively-imposed development-fee schedules are subject to judicial scrutiny under the doctrine of unconstitutional conditions. This ruling promises to change how local and state governments extract development impact fees from property owners in exchange for building permits; and it may very well do more. This is where you come in.

We seek papers that address the questions arising from the Sheetz ruling. We welcome proposals that look at this issue from legal, economic, political, historical, and related angles, including empirical and nonempirical approaches.

Some possible topics:

• Must a permit condition imposed by a legislative body on a category of properties be tailored with the same degree of specificity as a permit condition that targets a particular single development to be constitutional?
• An article exploring the Sheetz concurrences by Justices Neil Gorsuch and Brett Kavanaugh offering different arguments about the need for legislative exactions to be tailored.
• Beyond the analysis of Koontz, is there a basis in constitutional text, history, and/or case law for holding stand-alone impact fees (as opposed to in-lieu fees) subject to the doctrine of unconstitutional conditions?
• How does the requirement that the government “make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development” work when evaluating a generally imposed legislative exaction?
• What does “essential nexus” require to be constitutional?
• Are there economic models that prove or disprove the claim that inclusionary zoning meets the nexus requirement of the Nollan-Dolan-Koontz-Sheetz exactions test?
• Does inclusionary zoning create meaningful workforce and affordable housing?
• Alternatively, does inclusionary zoning have a negative impact on the production of affordable housing? Empirical studies of communities with inclusionary zoning policies in place could yield meaningful information if studied.
• Do all inclusionary-zoning schemes rely upon Kelo v. City of New London, and if they do, then would the right inclusionary-zoning challenge have the promise of overturning Kelo?
• How have states limited local government’s ability to legislatively impose fees on developers, and is there empirical evidence of more and cheaper housing in the states with those limits?
• True or false: The weaker the nexus, the more difficult it will (or should) be for the government to establish proportionality.
• How do impact fees affect housing supply and affordability? What is the tradeoff between property taxes and fees?
• How can YIMBYs incorporate the Sheetz decision into their work and build from it to successfully encourage communities to build more housing?
• Besides inclusionary-zoning fees, are there other government-imposed fees on builders and developers that may violate the nexus prong of the Nollan-Dolan-Koontz-Sheetz test? What are they and why is there a lack of nexus between the fee and the demand?

Fertile grounds for exploration.

Details here, including deadlines. Check it out, and then submit a proposal.

New Article (Comment): "Vacancy Taxes: A Possible Taking?" (U. Chi. L. Rev.)

A new student-authored journal article worth reading, Christine Dong, "Vacancy Taxes: A Possible Taking?," 91 U. Chi. L. Rev. 1725 (2024).

Here's the Abstract:

Vacancy taxes are an increasingly popular solution to the paradoxical problem of high housing demand coupled with high vacancy. Cities across the country facing housing shortages have either implemented or are considering adopting vacancy taxes to encourage property owners to rent or sell their property. Soon after San Francisco adopted a vacancy tax with one of the broadest definitions of vacancy, property owners lobbed a constitutional challenge under the Takings Clause, taking advantage of a moment of doctrinal instability.

This Comment seeks to make sense of how this and similar potential challenges would fare, given an expanding, property-protective takings doctrine, but a high constitutional tolerance for taxes. Using the San Francisco vacancy tax as a concrete example, this Comment evaluates possible arguments that the tax effects a regulatory or physical taking. It contends that even this stringent vacancy tax would not be a taking under either framework, and highlights elements of a different vacancy tax or regulation that may tip the scales of this analysis. It explores original understandings of land use (and nonuse) regulations to argue that fines levied on the nonproductive use of property are a background principle of property law that generally precludes the conclusion that vacancy taxes are takings.

Download the pdf here.

Worth your time to check out.

By The Thinnest Of Margins, SCOTUS Declines Public Use Pretext "Spite Taking" Case

So close: if just one more Justice had agreed, the U.S. Supreme Court would have taken up a public use case we've been following, Brinkmann v. Town of Southhold. After all, this one had a lot of the usual markers: a divided court below, an allegation of a lower court split, beaucoup amicus support, and a long-festering issue that has remained open for almost 20 years.

But alas, in this Order, the Court denied the cert petition. Perhaps not surprising given the small number of cases the Supreme Court takes up these days (those of us who have been around for a while remember the days when the Court's docket was up to 140 argued cases each Term). But nonetheless a disappointment.

One hint for future similar cases: three Justices (Thomas, Gorsuch, and Kavanaugh) "would grant the petition." We wonder why one more Justice among at least three potential candidates (CJ Roberts, Alito, or Barrett) didn't add the fourth vote to grant. Lawprof Ilya Somin shares his insight in "Supreme Court Refuses to Hear 'Passive Park' Public Use Property Rights Case," where he writes:

I would very much like the Supreme Court to take another public use case, and overrule Kelo and Berman, or at least cut back on those badly flawed precedents. But, for reasons noted in my earlier post, I think this case would have been a bad vehicle for reviewing these issues[.]

The situation here is what we call a "spite taking" (where the apparent purpose of the taking is not so much to promote a public use or benefit, but to stop a property owner from making some publicly disfavored use of his or her land). Are these okay under the Public Use requirement because -- as the Second Circuit panel majority held -- that it is just fine to do good things for bad reasons, and who cares about motivation as long as the stated use is public and not a pretext to a private benefit. Or does it offend the Public Use Clause -- as other courts have held -- to say you're taking it for some public use, when your real motivation is something else (even if not a private benefit)?

Underlying all this is what we see as the predicate question: should the government be in the business of using eminent domain to forcibly acquire private property because the owner is making -- or as here, proposes to make -- an allowed use of the property that the government or the public doesn't like?

One argument is that the government should not be able to use the "despotic power" in such a fashion -- that it should be outright prohibited, or at least subject to more than rational basis review due to the potential for abuse. Countering that is the argument that all exercises of eminent domain are the government telling a property owner that it is forcibly acquiring property because the current use is disfavored: you want to use your property for a house, but the public thinks it should be a post office or fire station. Then there's also the distinction the Second Circuit made that pretext should be reserved for those situations where the stated public use is a pretext to a private use or benefit, and not, as here, another public use.

Unfortunately, we're not going to get any answers on these questions just yet.

So close, yet so far. Stay tuned.

 

New Cert Petition: Eviction Moratorium Transferred Possession Easement To Nonpaying Tenants

Here's the latest in a case we've been following, which asks whether a local ordinance which allowed non-paying tenants to remain in the lessor's property is a physical taking, or merely the regulation of the lessor/lessee relationship under the Yee theory, which posits that once an owner voluntarily rents property to a tenant, the government then allowing that tenant to remain rent free isn't facilitating an unauthorized physical occupation, but rather is merely a regulation of the existing lessor/lessee relationship. In short, you let 'em in property owner, so suck it up.

The property owner has now filed this cert petition challenging that rationale.

As we've noted previously, some courts' reliance on Yee in this and similar situations is a misreading of that decision. Besides that, these courts essentially upend the longstanding common law of property governing the owner/tenant relationship, and the contractual nature of that relationship whereby the owner mostly surrenders the right to exclude to a tenant, but only on certain conditions usually related to time (the term of the tenancy), and the tenant paying rent. Contrary to these courts' rationale, the voluntary nature of this relationship is a two-way street. If these conditions, voluntarily agreed to by the tenant, are violated, the tenant's right to exclude ends and the lessor's reverter kicks in. Eviction moratoria and rent control regulations that permit tenants to remain despite violation of these contractual provisions upend the common law.

Here's the Question Presented:

In March 2020, the City of Los Angeles adopted one of the most onerous eviction moratoria in the country, stripping property owners like Petitioners of their right to exclude nonpaying tenants. The City pressed private property into public service, foisting the cost of its coronavirus response onto housing providers to avoid expensive and less expedient—but constitutional—means to help those in need. In doing so, the City in effect imposed and transferred to defaulting tenants an exclusive easement in the private property of others without paying for it. By August 2021, when Petitioners sued the City seeking just compensation for that physical taking, back rents owed by their unremovable tenants had ballooned to over $20 million. The moratorium concluded in 2024.

Relying on a mobile home rent control case from this Court, Yee v. City of Escondido, the Ninth Circuit affirmed dismissal of Petitioners’ complaint because they “voluntarily opened” their properties to tenants in the first instance and thus could never state a physical takings claim against the City’s law, drastic as it was. The Federal and Eighth Circuits disagree. In Darby Development Co. v. United States and Heights Apartments, LLC v. Walz, both courts held Yee inapposite and validated identical claims because moratoria like the City’s deprive owners of the right to exclude akin to Cedar Point Nursery v. Hassid.

The question presented is:

Whether an eviction moratorium depriving property owners of the fundamental right to exclude nonpaying tenants effects a physical taking.

This is a festering issue in the lower courts, as the petition points out.

Stay tuned.

Petition for a Writ of Certiorari, GHP Management Corp. v. City of Los Angeles, No. 24-___ (U.S. Oct. 16,...

CA10: A Municipality Is Forcing Owners To Violate State Law ... No Problem!

This one from the Tenth Circuit didn't even merit a published opinion, but is still worth reading, just because the situation seems so absurd.

In this Order and Judgment, the court affirmed the dismissal of property owners' claim that the County wouldn't issue a septic permit until after the owners actually constructed the septic system. Colorado law, they argued, requires them to get a permit before building a septic system. That's nice, replied the County: here, we do it different; first you build, and only then do we decide whether you get a permit.

The owners alleged that without a septic permit, they could not obtain a construction permit. Which means that they couldn't build their home as planned. Next stop, federal lawsuit alleging due process violations (both kinds) and a taking. 

The district court dismissed and the Tenth Circuit summarily affirmed:

• Procedural due process: yes, the conflict between the procedures required by the State of Colorado and the County of Costilla might be a problem, but it's only a problem of state law, and not a problem under the U.S. Constitution. And remember: you don't have a property interest "in a specific permitting procedure." Order at 5.
• Substantive due process (you know where this is headed): the County's procedure may not be "beyond criticism" because it might force the owners to violate state law by installing a septic system without a permit, but whatever. "The county could reasonably conclude that withholding permits until after inspection would allow it to better ensure that septic systems meet health and safety standards." Order at 5. Rational basis strikes again.
• Takings: the owners didn't properly plead a Penn Central claim. They didn't allege that the denial of a construction permit for their home would have a significant economic impact on them (that seems like a reasonable inference that could be drawn, but what do we know). The court also decided the "investment-backed expectations" factor on the merits by concluding that "[t]hey expected to be able to build a home on the property, and the county’s procedure allows them to realize that expectation." Order at 8. Yeah, but only if they violate state law. 

The owners were made to decide between violating state law or violating local law. According to the court, it's no problem to the constitution that they have to make this choice. Very odd.

Order and Judgment, Smith v. Medina, No. 23-1303 (10th Cir. Oct. 11, 2024)

Hawaii Dirt Lawyers: Don't Miss "Property Rights & Regulatory Takings" CLE At The HSBA Convention (In-Person & Webcast)

Hawaii lawyers (and those barred in the 808), take note: On October 21, 2024, the Hawaii State Bar Association will hold its annual Convention, and as always there's a full lineup of CLE programs so you can meet your MCLE requirements.

Thanks to the Real Property & Financial Services Section, there's a significant dirt law component. First, there's "Property Rights and Regulatory Takings" the program on which we are presenting along with Dwight Merriam and lawprof Shelley Saxer. Here's the official description:

This course will provide a survey of property rights and regulatory takings with an emphasis on recent decisions from the United States Supreme Court. Panelists include distinguished faculty and practitioners that will address impact fees, development rights, taking claims, rent controls, and other current issues.

Following us will be a program on "Land Use Conditions" with Cal Chipchase, Brad Saito, and a lawyer from the State of Hawaii Attorney General's office:

This course will provide a survey of the regulatory systems that govern land use in the State of Hawaii. Panelists will discuss regulatory frameworks at the state and city level together with recent legal developments from the Hawaii Supreme Court

You can attend in-person or remotely. This page has the registration information as well as more details and bios of the speakers.

As Jack Lord used to say: "Be here, Aloha."

"Build-to-Rent Homes: A Promising Solution to Chronic Housing Shortages" - CRE 2024 Jared Shales Prize

Congratulations to our Pacific Legal Foundation colleague Brian Hodges for his article "Build-to-Rent Homes: A Promising Solution to Chronic Housing Shortages" being awarded the 2024 Jared Shales Prize by the Counselors of Real Estate (CRE).

From the Introduction:

When homeownership is increasingly out of reach for many, build-to-rent (BTR) housing offers a desirable alternative to traditional homeownership. First, BTRs provide flexibility that traditional homeownership cannot match. By renting rather than owning, tenants are free to move around the city or the country as their jobs, family situations or lifestyle decisions dictate. They can enjoy the benefits of urban or suburban living without being tied down to a particular location or property. Second, BTRs are often built to higher standards than traditional rental properties, with modern amenities and communal spaces that foster a community and belonging. These properties are often professionally managed, meaning that tenants can enjoy the benefits of high-quality maintenance and management without the stress and expense of managing a property themselves. And third, BTRs offer a high-quality home without homeownership mortgage and maintenance obligations.

Where available, BTRs are quickly becoming a preferred option for many young families, empty-nesters, and itinerant retirees. Yet several local governments, especially in Georgia, have enacted laws banning BTR developments, mainly in response to misplaced NIMBY — not in my backyard — resistance to living alongside renters.

Read the entire piece here, or download the pdf.

No SWAT Takings In CA6: Police's Power To Arrest Includes Privilege To Damage Property

If there's a silver lining in the U.S. Court of Appeals for the Sixth Circuit's opinion in Slaybaugh v. Rutherford County, No. 23-5765 (Sep. 3, 2024), a case about what we call "SWAT takings" (police destroy someone's property in order to dislodge a criminal suspect), it's that the court did not adopt the usual "this was a really, really good exercise of the municipality's police power so there's no taking" approach.

But even though it applied a different analysis, the result was the same: no taking. Instead of the "police power" rationale, the court dug into the substance a bit more and determined that the police were "privileged" to physically invade and destroy the Slaybaugh property.

The court first acknowledged that owners generally have the right to exclude:

In arguing their prima facie takings claim, the Slaybaughs contend that police infringed on their property rights by invading and damaging their home to arrest Conn. Appellant Br. at 14–15. They are correct in a general sense—their home constitutes real “property,” and the Slaybaughs undoubtedly possess a “bundle of rights” with respect to that property by virtue of their obtaining title to it. See Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435 (1982) (“Property rights in a physical thing have been described as the rights ‘to possess, use and dispose of it.’” (quoting United States v. Gen. Motors Corp., 323 U.S. 373, 378 (1945))); Cedar Point Nursery, 594 U.S. at 149–50 (“According to Blackstone, the very idea of property entails ‘that sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe.’” (quoting 2 W. Blackstone, Commentaries on the Laws of England 2 (1766))).

Slip op. at 6.

But the owner's bundle of sticks never included the right to exclude Five-O:

But a property owner’s rights in his home are not absolute. Indeed, the Supreme Court has explained that “the range of interests that qualify for protection as ‘property’ under the Fifth and Fourteenth Amendments” may be limited by “‘existing rules or understandings that stem from an independent source such as state law.’” Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1030 (1992) (quoting Bd. of Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972)). True, the Slaybaughs possess a right to exclude unwanted visitors from their home—“one of the most treasured” rights of property ownership. Loretto, 458 U.S. at 435. But that does not mean that they could exclude anyone from their home, in any circumstance. Rather, their right to exclude is limited by “relevant background principles” placed upon home ownership. Lucas, 505 U.S. at 1030.

The po-po can come on your property and destroy it because that is a "pre-existing limitation" on an owner's title. The court relied on the tort concept of "search-and-arrest privilege" to conclude that reasonable invasions are ok. The opinion also took a dive into the history and tradition (issues which the Supreme Court finds particularly illuminating when it comes to understanding property rights), concluding that "[t]his 21st-century understanding of the search-and-arrest privilege is consistent with its history. In early common law, a police office generally could not break into a home to carry out an arrest or conduct a search unless he had a lawful warrant. ... But with a warrant, English law permitted police to use force to enter homes, conduct searches, and carry out arrests." Slip op. at 8 (citations omitted).

The court also recited the earlier cases which held that police could use force to effect an arrest without being worried about liability for damage. Slip op. at 10 ("Most relevant here, early state and federal court decisions (like prior English decisions) held that a police officer who used force to carry out a search or arrest was not liable for any damage resulting from his lawful actions.").

The court rejected the owners' arguments to the contrary:

The Slaybaughs provide several reasons why applying the search-and-arrest privilege does not resolve this case. They first argue that Cedar Point’s discussion of privileges is not controlling because that case involved “the mere entry upon” property; while here, officers intentionally destroyed their home. Appellant Br. at 23. But the Restatement, history, and precedent demonstrate that the privilege to enter includes a privilege to use force to enter. What’s more, the Cedar Point Court explained that its discussion of “longstanding background restrictions on property rights” referred to potential takings, and not to trespasses, which the Court defined as “[i]solated physical invasions, not undertaken pursuant to a granted right of access.” 594 U.S. at 159–60. By excluding isolated entries onto property from the realm of takings, the Court recognized that common law privileges could apply only to conduct that could be considered a taking, such as repeated violations of a landowner’s property rights. Id. Thus, even if Cedar Point itself involved only the entry onto property, the Court understood that a more severe incursion could be privileged at common law.

Slip op. at 12.

Finally, the Court avoided analyzing what we think is the most interesting issue, the question of whether "necessity" is an exception to takings liability (something we wrote about in this article).

We acknowledge that some historical evidence suggests that, in certain circumstances, persons could be compensated for the taking of property out of necessity. See United States v. Russell, 80 U.S. 623, 629 (1871) (holding that property owners may receive “full restitution” for property seized during wartime); Mitchell v. Harmony, 54 U.S. 115, 134 (1851) (holding that army officer who seized plaintiff’s workmen and chattels for use during the war was “not a trespasser,” but that “the government is bound to make full compensation to the owner”). However, that evidence is not conclusive—even the Slaybaughs acknowledge that the Supreme Court has held that no compensation is owed in other contexts where the necessity privilege would apply, such as when property is destroyed as an inevitable consequence of conflict, or when the property would have benefitted an enemy in battle. Appellant Br. at 15–16. See, e.g., Nat’l Bd. of YMCAs v. United States, 395 U.S. 85, 90–92 (1969) (holding that no compensation is required for damage to property during a riot where troops “act[ed] primarily in defense of [the owners’] buildings” and rioters would have inflicted damage on the building anyway); United States v. Caltex, 344 U.S. 149, 155 (1952) (finding no takings claim where army destroyed oil facilities that were a “potential weapon of great significance to the invader”); United States v. Pacific R.R., 120 U.S. 227, 234–35 (1887) (holding that property damaged “through necessity and by mere accident,” including “damages caused by the enemy” during battle, are not compensable).

Nonetheless, we need not resolve this “necessity” defense to an actual taking. We reject the Slaybaughs’ claim not because of that defense, but because they have failed to identify any history or precedent establishing that the police have “taken” their “property” within the meaning of the Fifth Amendment when the police damaged the property while conducting a lawful arrest.

Slip op. at 13-14. 

This case does not resolve the issue and the U.S. Supreme Court has been presented with a petition asking the Court to resolve the issue, so stay tuned.

Slaybaugh v. Rutherford County, No. 23-5765 (6th Cir. Sep. 3, 2024)

Comity Of Errors: CA11 Chooses Nondisruption Of State's Administrative Process Over Constitutional Right To Compensation

In Turner v. Jordan, No. 22-13159 (Sep. 17, 2024), the U.S. Court of Appeals for the Eleventh Circuit held that even though the federal courts have jurisdiction over Turner's takings claim, the court nonetheless has the discretion to choose to wash its hands of the case in order to protect a state's administrative procedures.

This is one of those home equity takings cases, with the twist here being that Turner claims that because Florida officials failed to account for his homestead exemption, his property sold for half of what it should have at a property tax foreclosure sale. He alleged that with the exemption, the sale would have netted him some equity to which he was entitled. The district court dismissed for comity reasons, and the Eleventh Circuit affirmed.

Of course, the opinion pays lip service to the more-often-in-the-breach-than-in-the-observance principle that "federal courts have a 'virtually unflagging obligation ... to exercise the jurisdiction given them.'" Slip op. at 18 (quoting Ankenbrandt v. Richards, 504 U.S. 689, 705 (1992)). That duty may be "unflagging," but not really: federal courts should take a "hands-off" approach to cases that may implicate a state's tax administration. We wouldn't want to disrupt state tax administration now, would we?

Yes, Turner raised a federal civil rights claim, which is "entitled to be adjudicated in the federal courts." Slip op. at 18. And you don't need to exhaust section 1983 claims, or takings claims, as we recall. But that rule mostly doesn't apply when state remedies are "plain, adequate, and complete." Slip op. at 19. Although the court concluded this case presents a "close call," it nonetheless held that Florida's administrative tax scheme qualifies. See pages 19-20 of the opinion for the details of the three factors that go into this calculus. The first two factors were a wash: one cutting in Turner's favor, the other in favor of comity.

The first factor is whether the issue involves "commercial matters" or "fundamental rights." The court correctly (in our view) concludes that this is a case involving fundamental civil rights. Slip op. at 20. The second factor was "trickier" according to the court, but cut in favor of comity: the court concluded that Turner was objecting to his own tax situation, because he is objecting to the way his taxes were collected. Slip op. at 22.

The factor that cut strongly in favor of comity according to the court, was the third: are Florida courts better positioned than the federal courts to correct the violation?

For Turner to prevail on his due process claims it would re-quire a conclusion that the County failed to provide sufficient notice of the sale process under Florida Statutes sections 197.502(4)(a), 197.522, and potentially 197.512(1). For Turner to prevail on his claims under the Takings Clause, a federal court must determine, at least, that the County impermissibly applied the opening bid requirement under Florida Statutes § 197.502(6).

Turner’s requested remedies, and their implicated interpretations of those state-law provisions, “may be far from what the [Florida] Legislature would have willed.” Id. at 429. And state courts “have greater leeway to avoid constitutional holdings by adopting ‘narrowing constructions that might obviate the constitutional problem and intelligently mediate federal constitutional concerns and state interests.’” Id. at 428 n.7 (quoting Moore v. Sims, 442 U.S. 415, 429–30 (1979)). That is what would happen if the Florida courts side with the County’s interpretation of the state statutes.

Slip op. at 23-24.

And then there's the Tax Injunction Act, which "precludes relief that would diminish state revenues[.]" Slip op. at 24. And here, "Turner's interpretation of [the Florida tax statute] could diminish state revenues. After all, his property didn’t sell until it was listed for a second time with a lower opening bid amount." Id.

In the end, the court concluded that granting Turner the relief he seeks "would risk disrupting Florida's tax administration." Slip op. at 25.

Of course, Turner challenges the County’s application of Florida statutes as to his property, rather than the facial validity of the statutes. Still, “a judicial determination of official liability for the acts complained of, even though necessarily based upon a finding of bad faith, would have an undeniable chilling effect upon the actions of all County officers governed by the same practicalities . . . .” Fair Assessment, 454 U.S. at 115. If the County’s administration of tax deed sales in situations like Turner’s “is indeed unconstitutional, surely the [Florida] courts are better positioned to determine—unless and until the [Florida] Legislature weighs in—how to comply with the mandate of” procedural due process, the First Amendment, and the Takings Clause.

Slip op. at 26.

Hold on. "Surely the Florida courts are better positioned" how to comply with the U.S. Constitution's requirements? Really?

One Judge -- Judge Newsom -- wasn't having it. He dissented, respectfully, "but I'm not going to make a big stink about it." Dissent at 1. He agreed that this was a close call, but would have come out the other way, and "would allow Turner's suit to proceed." Id.

As an initial matter, I’m suspicious of court-concocted abstention rules that, in substance if not form,1 deprive federal courts of jurisdiction that the Constitution expressly authorizes and that Congress has expressly vested. I agree with Chief Justice Marshall, who explained more than two centuries ago that federal courts “have no more right to decline to exercise the jurisdiction which is given, than to usurp that which is not given”—both, he said, are “treason to the [C]onstitution.” Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 404 (1821). At the very least, I agree with the Supreme Court’s more recent (if slightly less uncompromising) admonition that “‘[a]bstention rarely should be invoked, because federal courts have a virtually unflagging obligation . . . to exercise the jurisdiction given them.” Maj. Op. at 18 (quoting Ankenbrandt v. Richards, 504 U.S. 689, 705 (1992)). In any event, all here seem to agree that abstention—pursuant to the “comity doctrine” or other-wise—“is the exception, not the rule.” Colorado River Conservation Dist. v. United States, 424 U.S. 800, 813 (1976).

Dissent at 1-2. Check out the entirety of his dissent for Judge Newsom's analysis. Dissent at 7 ("Bottom line: It’s reasonably clear to me that the local authorities misapplied Florida law when they sold Turner’s property for pennies on the dollar. Deciding Turner’s case—which alleges that they did so for unconstitutional reasons and in an unconstitutional manner—wouldn’t call into question Florida’s property-tax scheme or his individual tax liability, nor would it require any real guesswork about the meaning or application of state law.").

We think you know which way we come out on this one, no?

Turner v. Jordan, No. 2022-13159 (11th Cir. Sep. 17, 2024)

Guns N' Encloses: While Figuring Out Gun "Sensitive Places," CA9 Backhandedly Upholds The Right To Exclude

The gunfight at the OK Corral is about all we know
about bearing arms in public places.

There's a lot going on in the U.S. Court of Appeals for the Ninth Circuit's opinion in Wolford v. Lopez, No. 23-4356 (Sep. 6, 2024), and none of it is about takings, at least directly. And the case involves a Second Amendment challenge to Hawaii and California's restrictions on where a bearer of arms can bear those arms, a topic that is beyond our full understanding as mere mortals.

So why are we covering it? Well, glad you asked. This one is peripherally about property rights and because of the posture of the case avoids what we think is the biggest issue from a property rights viewpoint. The bulk of the case analyzes the state's ability to restrict carrying weapons in public places like beaches, parks, and other public venues. But one part of the case delves into whether the state may regulate private property owners' right to say "Keep Out!" or "Gun Owners Welcome!" to those who are strapped up. So count us interested!

The challenge here came only from the arms-bearers (and not property owners), and thus the only issues the court was presented with involved whether the state regulating whether arms-bearers may do so on private property violates the Second Amendment, not the Fifth Amendment rights of the owners. Property owners were not parties to the case, apparently. But depending on how the issue of carrying on private property breaks, these restrictions may also unduly limit the property owner's ability to control who may access their property and under what circumstances. Private property rights are "adjacent" to the actual issues, but that's enough for us.

Here's that part of the story. A Hawaii statute law presumptively bans third parties carrying firearms on private property unless the owner allows it, either by posting a sign or by expressly saying okay. California takes a slightly different approach by also barring non-owners from carrying guns onto private property, but allowing it only if the owner has posted a conspicuous sign consenting to third parties bringing weapons on the premises. 

The plaintiffs -- holders of concealed carry licenses -- sued and sought a preliminary injunction:

In both the Hawaii case and the California cases, the district courts held that Plaintiffs are likely to succeed on their challenges to the respective bans on the carry of firearms on private property held open to the public unless the owner or operator consents. Haw. Rev. Stat § 134-9.5(a); Cal. Penal Code § 26230(a)(26). Although the state statutes are similar, they differ in one key respect. Hawaii’s law allows a property owner to consent orally, in writing, or by posting appropriate signage on site. Haw. Rev. Stat. § 134-9.5(b). California’s law, by contrast, allows a property owner to consent only by “clearly and conspicuously post[ing] a sign at the entrance of the building or on the premises indicating that licenseholders are permitted to carry firearms on the property.” Cal. Penal Code § 26230(a)(26).

Slip op. at 61 (footnote omitted).

The bulk of the opinion analyzes the rights of the plaintiffs to keep and bear arms in public places such as those, so unless you are a Second Amendment maven, you can safely skip ahead to portion of the opinion where the court considers the Second Amendment validity of regulating the carrying of weapons on private property open to the public:

We conclude, then, that the Nation has an established tradition of arranging the default rules that apply specifically to the carrying of firearms onto private property.

...

Hawaii’s modern law falls well within the historical tradition. The law prohibits the carrying of firearms onto private property unless the owner has posted signs, otherwise has given written consent, or has given oral consent. We therefore conclude that Plaintiffs in the Hawaii case are unlikely to succeed on the merits.

But we conclude that California’s law falls outside the historical tradition. As noted at the outset of this section, California prohibits the carry of firearms on private property only if the owner has consented in one specific way: posting signs of a particular size. We find no historical support for that stringent limitation. Although two of the laws mentioned above required a person to obtain consent in writing, all of the other laws allowed a person to obtain consent in any manner. None of the laws forbade a person from obtaining permission only by convincing the owner to post signs of a specific size. Nor do modern circumstances appear to justify California’s imposing a much more stringent consent requirement; ordinary signs existed in 1791, in 1868, and today.

Slip op. at 67-68.

We view the issue more from the owner's perspective, and not as one primarily as a Second Amendment question. But also much more simply: the choice of whether to allow carrying a piece on one's property that may otherwise be open to the public should be the owner's. The no shirt, no shoes vibe. Yes, we are definitely down with the notion that Second Amendment rights are not second-class constitutional rights. Nor are Fifth Amendment rights.

We view the Ninth Circuit's decision here as (generally) consistent with that vibe, especially the notion that the owner's consent cannot be limited to only a state-defined category (signs only as in California, and not also oral or written consent as in Hawaii -- as the court put it, "Sure, you may carry your musket on my property, but only this week and only one musket."). Slip op. at 68.

The big property rights issue may arise more readily in other Circuits, where state law and policy go in the other, more pro-gun direction than blue Hawaii and California. What if, for example, a pro-gun state statute mandated that property owners allow arms-bearing on their property, even if the owner would prefer otherwise? That would definitely raise our takings hackles.

Wolford v. Lopez, No. 23-4356 (9th Cir. Sep. 6, 2024)

Court To Phoenix: Clean Up Your Act!

A frequent vibe in cases where a member of the public asks a court to compel a local government to do something about an undesired land use (i.e., "the city should stop my neighbor from illegally renting their property," or "the police should remove the pop-up unlicensed food stand on the sidewalk in front of my restaurant") is that zoning enforcement is often viewed by courts as a discretionary municipal function or a question about allocation of enforcement resources -- and therefore the judiciary takes a hands-off approach.

That vibe, however, did not carry the day when the Arizona Court of Appeals tackled Brown v. City of Phoenix, No. CV23-0273 (Aug. 27, 2024). In that case, the court upheld a trial court's preliminary injunction ordering Phoenix to do something about the notorious "zone" that the trial court determined was a public nuisance "created or maintained" by the city.

We won't go into great detail here, but recommend you check out the opinion. It offers a pretty decent roadmap for aggrieved plaintiffs to avoid the usual judicial hands-off vibe. One of the key parts of the decision in our view is the conclusion that the city can be held responsible for what other people do:

¶23 To the extent the City presses this argument for property it owns and controls in the Zone, the argument fails. The City properly may be held responsible both for a public nuisance, and to abate a public nuisance, on land it owns and controls. In requiring such abatement, the superior court properly relied on Phoenix v. Johnson, 51 Ariz. 115 (1938). Applying Arizona’s common law, Johnson addressed a sewer system the City built and installed that the City then failed to operate properly, resulting in the emission of foul odors. 51 Ariz. at 120. In addressing resulting claims, the court approved a jury instruction allowing the City to be held liable for failing to manage its sewer system, thereby causing a public nuisance. Id. at 130. That same analysis applies here.

¶24 “[O]ne who owns land and fails to act to abate a [public] nuisance originating on that land” can be held liable under a public nuisance theory. Bischofshausen v. Pinal-Gila Ctys. Air Quality Control Dist., 138 Ariz. 109, 112 (App. 1983) (citing RESTATEMENT (SECOND) OF TORTS §§ 824, 838-840 (Am. Law. Inst. 1979)). Though not expressly stated in the permanent injunction, the parties acknowledged at oral argument in this court that the “public property” reference in the permanent injunction is limited to public property the City owns and controls and does not apply to public property owned and controlled by another public entity or property owned by private individuals or entities.

Slip op. at 8-9.

Worth reading.

Brown v. City of Phoenix, No. CV23-0273 (Az. Ct. App. Aug. 27, 2024)

Michigan, Over Dissent, Declines To Hear Co-19 Shutdown Takings Case

In this Order, the Michigan Supreme Court declined to consider a case which challenges the Michigan governor's Co-19 shutdown executive orders, which, in the words of the dissenting Justices, reached "nearly every aspect of life in our state."

There have been a lot of cases asserting that Co-19 shutdowns are takings, with most (but not all) of them crashing and burning, including this one. Here, the plaintiffs -- a class of owners whose businesses suffered devastating losses as a result of the shutdown orders -- sought just compensation for the regulatory taking. They alleged both types of takings, categorical and ad hoc (Penn Central). They also asserted claims under the Michigan Constitution (a trend we approve!).

We recommend you take a dive into the Statement of the two Justices who dissented. They would have taken up the case because "the majority leaves unresolved novel and important questions regarding federal and state takings jurisprudence." What are those novel and important questions? Glad you asked:

Can the temporary impairment of business operations be a categorical taking if there are no reasonable alternative uses of the business property during the period in which its intended and normal use is prohibited? And, if not, can the prohibition of the normal business operations nonetheless constitute a taking under the multifactor test established by the United States Supreme Court and employed by our courts? Because neither that Court nor this one has given significant guidance on the actual application of the test, and because this case is an appropriate case in which to provide clarity in this area of the law, I would take the opportunity to do so. Plaintiff, on behalf of a putative class, has raised plausible claims that the government took its property without just compensation, and genuine issues of material fact exist regarding its claims. Further factual development would aid in the proper resolution of these questions that should eventually be answered, such that summary disposition prior to the close of discovery was inappropriate. I would reverse the Court of Appeals and remand to the trial court to allow discovery to continue in this case.

Dissent at 1-2.

The Justices undertake what we view as very valid criticisms of the way the Michigan Court of Appeals analyzed the the claims. On that, some humblebragging (and what else is the internet good for but a good humblebrag?): the Justices apparently appreciated the article we published on "emergency takings," Evaluating Emergency Takings: Flattening the Economic Curve, 29 Wm & Mary Bill of Rights J. 1145 (2021)), which contains our own criticisms of the way that many courts approach these type of claims generally, and specifically how they apply the ad hoc Penn Central test. 

More on the story here:

• Michigan Supreme Court won’t hear appeals on COVID-19-related compensation lawsuits
• Mich. Supreme Court sides with state in COVID-19 shutdown cases
• Mich. Supreme Court Shuts Down COVID Closure Suits

Stay tuned.

Order, The Gym 24/7 Fitness, LLC v. Michigan, No. 164557 (Mich. Aug. 30, 2024)

S Dakota: Only Way To Read Precondemnation Entry Statute Constitutionally Is Allowing "minimally invasive superficial inspections" and "minor soil disturbances"

This would not be authorized.

Here's the latest in an issue that found new vitality after the U.S. Supreme Court's decision in Cedar Point affirming that government-authorized physical entry to private property is presumptively a taking.

This is the "precondemnation entry" issue in eminent domain which several courts have addressed:

• Oregon
• Iowa
• North Dakota
• California

This is where a condemnor contemplates taking property and wants to get on site to check it out. Do things like surveys, examinations, tests, and sample-taking. Often, the owner of the property doesn't mind: pay me a bit for my trouble, indemnify me in the event someone gets injured, and you can have limited access to do your business and then go on your way, condemner. But sometimes, an owner says no.

In Betty Jean Strom Trust v. SCS Carbon Transport, No. 30317 (Aug. 21, 2024), SCS is planning a CO2 pipeline though South Dakota, and several owners said no to SCS's proposed precondemnation entries. The owners challenged the constitutionality of South Dakota's entry statute, and challenged SCS's power to take, alleging that it was not a common carrier with the delegated power of eminent domain. The trial court rejected these claims.

The South Dakota Supreme Court reversed. The court allowed some precondemnation entries, but held that anything beyond "minimally invasive superficial inspections that, at most, cause minor soil disturbances," would be unconstitutional. The court also concluded that it is premature to conclude that SCS is a common carrier and the property owners should have an opportunity to undertake discovery and make a record about whether "SCS is holding itself out to the general public as transporting a commodity for hire." Slip op. at 1.

The surveys SCS wanted to do involve these activities:

[¶8.] According to SCS, three different types of surveys would be conducted along the pipeline route. The most common would be “minimally invasive, nondestructive inquiries to assess the land . . . involv[ing] the use of ‘hand tools (e.g., spades, shovels, augers)’” that could result in “small soil disturbances at discrete locations.” The second type––geotech surveys—would “assess underlying soil and rock conditions and ‘utilize[] a track mounted drilling rig to create a small diameter hole into the soil to collect samples of subsurface soils and rocks.’” The small hole would be “backfilled with drill cuttings or with a cement/bentonite grout mixture.” However, SCS claims there would be “no impact to normal land use after drilling is complete and the hole is backfilled.”

[¶9.] Finally, “deep dig” surveys would be necessary for properties located within a floodplain to search for archaeological sites of cultural significance. These “involve the use of a backhoe to dig trenches typically 7 to 10 feet in length, 2 to 3 feet in width, and 6 to 10 feet deep.” SCS committed that “[o]nce this deep testing survey work is completed, any trenches will be backfilled and the ground will be graded to near existing conditions.” For all three survey types, SCS assured landowners that resulting property damage would be repaired or reimbursed. To this end, SCS obtained a $1 million performance bond, which was later increased to $5 million

Slip op. at 4-5 (footnote omitted).

Check out pages 10-22 for the court's analysis of the factors that go into a determination whether a private entity is a common carrier which can exercise the delegated power of eminent domain, and how this is a fact issue. The court could have stopped there, because if SCS is not a common carrier it cannot exercise the power and enter anyone's land. 

But the court viewed the allowable scope of entries as a "purely legal question[]," and decided to resolve the issue "to provide clarify and avoid protracted litigation on remand if SCS is determined to be a common carrier." Slip op. at 22. Good. We wish more courts were not anal-retentive and were willing to resolve such legal issues after full briefing, even if some other intervening action might possibly render a decision unnecessary. Id. ("Thus, we conclude a resolution of these issues will promote judicial efficiency, irrespective of the ultimate resolution of the common carrier issues on remand.").

To construe the statute, the court first applied the special rule of construction for eminent domain statutes: "eminent domain statutes are strictly construed in favor of the property owner." Slip op. at 24. Eminent domain proceedings "must be conducted in strict accordance with governing statutes." Slip op. at 25.

With that in mind, the court concluded that the terms "survey" and "examination" mean some kind of measurement of land and figuring out boundaries. This does not include soil sampling, or any activities that go beyond "innocuous" and "temporary" and which result in "minimal incidental damage, and little, if any, disturbance." Id.

As one court put it, the "right to enter private property for the purpose of examination and survey confers no license to engage in the process of conducting archaelogical digs." Id. (quoting Indiana State Highway Comm’n v. Ziliak, 428 N.E.2d 275, 279 (Ind. Ct. App. 1981)). Indiana Jones, take note.

The court rejected all of SCS's arguments for a wider scope of activities. The court again relied on a canon of statutory construction, concluding that it should strive to avoid interpreting the statute in a way that would render it unconstitutional, and "SCS’s reading of the statute would authorize any number of invasive activities directly at odds with the owner’s right to possess their property." Slip op. at 26.

Here's the holding:

Instead, we conclude that “survey” and “examination,” in the context of SDCL 21-35-31, “cannot amount to other than such innocuous entry and superficial examination as would suffice for the making of surveys or maps and as would not in the nature of things seriously impinge upon or impair the rights of the owner to the use and enjoyment of his property[.]” Kane Cnty. v. Elmhurst Nat’l Bank, 443 N.E.2d 1149, 1154 (Ill. App. Ct. 1982). We will refer herein to such a minimally invasive inspection as a “standard survey.” Accordingly, we hold that the “geotech” and “deep dig” activities, involving heavy equipment for invasive drilling and digging, do not qualify as a “survey” or “examination.”

Slip op. at 26.

Having determined that the statute only allows relatively innocuous entries, the court asked whether this level of interference with the owners' property rights amounts to a South Dakota or a federal taking. The court held no. True, Cedar Point concludes that "many" government-authorized invasions are takings, but not those which are "consistent with longstanding background restrictions on property rights." Slip op. at 28.

The court first held that the entries are takings. Slip op. at 30. So the question is whether history and tradition demonstrates that excluding innocuous entries are or are not sticks in the owners' bundles of rights. There's a longstanding history of these things. Id. ("pre-condemnation 'standard surveys' are firmly established in the legal tradition of South Dakota in a variety of contexts."). The statute has been around for "at least a century." Id. True, enactment of the law does not automatically mean its a background principle (what we call the "no ipse dixiting rule"). But that must be tempered by a decision by the South Dakota Supreme Court a few years after the statute's adopting that held the statute wasn't a taking. That, and secondary sources such as treatises and Restatements concluded that minor intrusions are not takings.

Here's the holding:

[¶65.] We thus conclude that the right to conduct pre-condemnation surveys is a longstanding background restriction on property rights. However, the scope of such surveys is limited. Indeed, we must “pause” when the proposed survey activities contemplate “a more invasive impact on individual property rights.”

Slip op. at 32. The court also concluded that minor entries do not violate owners' rights under the South Dakota Constitution, even though state law recognizes greater property rights than the U.S. Constitution as long as owners can obtain a jury trial on any invasions that exceed the relatively innocuous entries allowed by the statute.

We expect more courts to address this issue as condemnors increasingly seem to be seeking even more intense entries and owners become even more willing to assert their rights and fight back. Stay tuned.

Betty Jean Strom Trust v. SCS Carbon Transport, LLC, No. 30317 (S.D. Aug. 21, 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.

Book Launch Event, Aug 13, 2024: Jim Burling, "Nowhere to Live: The Hidden Story of America's Housing Crisis"

If you are in the California Southland (or plan to be in the next week), please be sure to reserve on your calendar Tuesday, August 13, 2024, to join us in-person for the launch of our colleague Jim Burling's forthcoming book, "Nowhere to Live: The Hidden Story of America's Housing Crisis."

Here's a blurb about the book, which is available for preorder on Amazon:

A century of policy mistakes ruined America’s cities and created an unprecedented housing crisis.   
 
For many families, homelessness is no longer someone else’s problem. It is right around the corner, a real threat in their own immediate future. Our housing crisis is the result of a long history of government policies, court cases, and political manipulation. While these disparate causes make up a tangled web, they have one surprising root: the attack on private property rights. For more than a century, government policies and court decisions have attacked, undermined, and eroded private property rights. Whether it be exclusionary zoning, eminent domain abuse, rent control, or excessive environmental regulations, the cumulative impact of these assaults on private property is that it’s become increasingly difficult—or even impossible—to build adequate housing supplies to meet market demands. We are fast approaching a time when millions of typical Americans will, quite literally, have nowhere to live. 

Nowhere to Live: The Hidden Story of America’s Housing Crisis, takes readers through the history of how we got here. With stories going back to the Civil War, the early twentieth century, and the ill-fated “urban renewal” movement of the 1950s, Nowhere to Live reveals how the government layered mistake upon mistake to create the current crisis. It also provides a way out: not by government fiat, but through the restoration of private property rights.  

The event will take place at the Pacific Club in Newport Beach, California, from 6:00-8:00 p.m., on Tuesday, August 13, 2024. It will feature Pacific Legal Foundation President Steven Anderson, and national zoning expert Nolan Gray, and, of course, Jim. The event will feature an open bar and is free. Register here.

Come, join us and learn and celebrate!

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...

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

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

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

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

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

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

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

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

Cal. Code Civ. P. § 1240.030.

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

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

Slip op. at 5-6.

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

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

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

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

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

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

The opinion is not published. But should be.

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

Federal Court In Removed Eminent Domain Case: Quick-Take/Immediate Possession Is Erie Procedural, So Does Not Apply

The site of the Erie incident, just a mile away from Mahon's home.

Here's an unusual, and kind of interesting one, from a U.S. District Court (Hawaii) in an eminent domain case brought by the County of Maui against the owner of Maui property which is needed for a solid waste disposal site for debris from the recent Maui wildfire.

First unusual point: the owner, a citizen of a state other than Hawaii, removed the case to federal court, asserting diversity jurisdiction. A state eminent domain action in federal court? Don't see that every day, do you? (The County has not challenged federal court jurisdiction.)

Second unusual point: when the County deposited its estimate of just compensation and sought immediate possession under Hawaii's eminent domain procedures (Hawaii does not have a true "quick take" procedure, but merely immediate possession where title does not transfer to the condemnor until final adjudication of compensation and payment of the judgment by the condemnor), the property owner asserted that this was "procedural" law under Erie, where "federal courts sitting in diversity apply state substantive law and federal procedural law." Gasperini v. Ctr. v. Humanities, Inc., 518 U.S. 415 (1996).

In this Order, the Magistrate Judge agreed. The immediate possession procedure is indeed "procedural," and does not determine the outcome. Thus in diversity cases, Erie dictates that the outcome should be the same as if the case were in state court, while the case gets processed via the federal court's procedures.

Here's the immediate possession statute:

§101-29  Possession pending action; alternative procedure. Where the plaintiff is the State or any county, the following alternative procedure may be followed. At any time after the commencement of an action pursuant to this part, the State or any county may file a motion for an order of possession invoking this section and supported by an affidavit alleging, or by oral evidence prima facie showing:

     (1)  The right of the State or county to maintain the action;

     (2)  The public use for which the real property sought to be condemned is being taken; and

     (3)  The sum of money estimated by the State or county to be just compensation or damages for the taking of the real property.

     Upon such motion and upon payment of such estimated sum of money to the clerk of the court for the use of the persons entitled thereto, the court shall issue an order ex parte putting the State or county in possession of the real property sought to be condemned and permitting the State or county to do such work thereon as may be required for the purpose for which the taking of the property is sought.  The order placing the State or county in possession shall become effective upon the expiration of ten days after service thereof; provided that for good cause shown within the ten days, the court may vacate or modify the order or postpone the effective date thereof for an additional period of time.  Service of the order shall be made personally on those defendants who are in actual possession, and in other cases may be made by depositing a copy thereof in a United States post office, postage prepaid, registered mail addressed to the defendants at their last known addresses, or to their attorneys of record.

Haw. Rev. Stat. § 101-29.

The court concluded this is a procedural tool, not outcome determinative. First, "[t]he plain language of HRS § 101-29 indicates that it is an 'alternative procedure' that may be followed in eminent domain proceedings." Slip op. at 5. The lege history shows the purpose of the statute was to make eminent domain procedures "uniform." And the Hawaii Supreme Court has referred to the quick-take/possession process "as a 'procedure,' albeit in passing[.]" Slip op. at 6.

Ultimately, the court concluded that an immediate transfer of possession from the owner to the condemnor "is not outcome determinative."

The Court acknowledges that the State or county gains leverage by obtaining immediate possession. Possession during the pending proceeding, however, does not determine the outcome of the litigation. Simply put, applying HRS § 101-29 does not affect the key issues of an eminent domain proceeding: whether the State or county may ultimately take the subject property and the amount owed as just compensation for the taking.

Slip op. at 7.

Here's the heart of the court's reasoning:

In this Court’s view, a substantive rule is one that creates the County’s right to exercise its power of eminent domain. A statute that allows the County to file a motion for immediate possession of the subject property during a pending proceeding, however, is merely a mode of enforcing this right by allowing the County to obtain possession while its eminent domain claim proceeds on the merits. The Court thus finds that HRS § 101-29 is procedural and, therefore, does not apply in this diversity action.

Slip op. at 8.

Bottom line: the court ordered the clerk to return the County's deposit of estimated compensation, and the case to proceed without immediate possession.

So what's your take, is quick-take/possession a mere procedural device that has no effect on the outcome? Eminent domain practitioners know that having the condemnor seize the property now (even under statutes like Hawaii's where the condemnor only obtains possession and not title) can totally alter the dynamic between the owner and the condemnor. And if the owner withdraws the deposit, this alters the owner's substantive rights: doing so is deemed abandonment of all challenge to the taking itself (public use, necessity, or "all defenses" other than the amount of compensation). See Haw. Rev. Stat. § 101-31 ("A payment to any party as aforesaid shall be held to constitute an abandonment by the party of all defenses interposed by the party, excepting the party's claim for greater compensation or damages.").

So in our view, the court's assumption that "[p]ossession during the pending proceeding, however, does not determine the outcome of the litigation" is doing a lot of work. In reality, very few aspects of the way an eminent domain case goes can be said to determine the outcome (the substantive law is mostly skewed against property owners, especially on power-to-take challenges), and the court's failure to recognize that dramatically altering the power relationship between the condemnor and the property owner, and forcing the owner into a withdraw-or-forfeit-substantive-defenses, can have dramatic effects on the ultimate outcome of a case.

More on the story here ("Federal Judge Rules Against Maui County Taking Private Land Soon For Lahaina Fire Debris"), from Honolulu Civil Beat.

Will the County take it further up the food chain? Stay tuned.

Order Denying Plaintiff County of Maui, Dep't of Envtl Mgmt's Motion for an Order of Immediate Possession,...

New Jersey: Forcing Hospital To Provide Care At A Loss Isn't A Taking

We were all set to write up a scintillating and detailed analysis of the New Jersey Appellate Division's opinion in Englewood Hospital & Med. Center v. New Jersey, No. A-2767-21 (June 27, 2024), when we thought, ah, why not just ask you to read our New Jersey colleague Joe Grather's scintillating and detailed analysis.

Short story is right there in the title of this post. As Joe puts it:

In short, the hospitals argued that requiring them to provide charity care and Medicaid care at a loss was an unconstitutional taking of private property without just compensation.  The trial court analyzed the claims as an “as-applied” challenge.  Therefore, it dismissed some of the claims because of a failure to exhaust administrative remedies.  The “slightly different reason” was that the Appellate Court found the claims were a facial challenge to the constitutionality of the statute, and therefore it analyzed the takings claims under the familiar rubric of whether there was a “direct government appropriation or physical invasion of private property,” or an “uncompensated regulatory interference with a property owner’s interest in their property.” Slip op. at 14.

No physical taking, no Penn Central taking. We recommend you read his entire post "As We Approach Our Nation's Birthday, a New Jersey Appellate Court Rejects Hospitals' Takings Claims."

Joe ends it this way: "I bet the hospitals are preparing their petition for certification to the New Jersey Supreme Court now.  Happy 4th of July!"

That means to stay tuned for more.

Englewood Hospital & Med. Center v. New Jersey, No. A-2767-21 (N.J. App. Div. June 27, 2024)

New Article: "Original Understanding of 'Background Principles' in Cedar Point Nursery v. Hassid"

Worth reading: a student-authored piece in the latest issue of the Harvard Journal of Law & Public Policy, "Original Understanding of 'Background Principles' in Cedar Point Nursery v. Hassid."

From the Introduction:

But in Cedar Point, when considering a regulation that authorized union organizers to enter certain businesses, the Court held that even a temporary physical occupation was a per se taking requiring compensation.

The Court’s shift to a per se rule is significant because it means a landowner can receive “just compensation” without satisfying Penn Central’s high bar required for regulatory takings. For governments, the Cedar Point holding could pose a heavy financial burden if they must compensate landowners for temporary intrusions authorized under existing regulations. Due to this imposing financial burden, some have suggested that Cedar Point threatens existing civil rights regimes, which at first blush resemble the labor rights regulation at issue in Cedar Point.

But Cedar Point also recognized three exceptions to its per se rule, one of which is particularly expansive: “longstanding background restrictions on property rights.” Writing for the majority, Chief Justice Roberts defined this exception as “background limitations [that] encompass traditional common law privileges to access private property.” The opinion listed several examples, including entering private land for public or private necessity or to enforce criminal law. For governments, these background principles could alleviate otherwise staggering financial liability due to the Cedar Point rule.

...

This Note argues that these principles are part of the original meaning of the Fifth Amendment, and then offers an originalist framework for deriving them. The Framers viewed provisions like the Takings Clause as “declaring” existing law that the American people already recognized as enforceable. When viewing the Takings Clause this way—as declarative of “general law”—it becomes apparent that the methodology of Cedar Point reflects the original understanding of the Fifth Amendment. In addition to confirming Cedar Point’s originalist pedigree, general law also informs the framework for how originalists can divine these background principles.

Check it out.

New Cert Petition: Gov't Asks Whether A Penn Central Taking Is Really A Lucas Taking

Check this out, a local government has filed a cert petition seeking reversal of one of those relatively rare circumstances where the property owner won below on a temporary regulatory takings claim for the County's denial of a development permit.

We won't go into details on this, but urge you to read the petition, especially the Questions Presented:

In First English Evangelical Lutheran Church of Glendale v. Los Angeles County, Cal., the Court held that the Fifth Amendment requires “just compensation” for temporary regulatory takings, i.e., “those regulatory takings which are ultimately invalidated by the courts.” 482 U.S. 304, 310 (1987). The appropriate compensation for a temporary regulatory taking is described as “fair value for the use of the property during this period of time.” Id. at 322. All claims for temporary regulatory takings must be analyzed using the ad-hoc, fact-based analysis set out in Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978). Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 328 (2002). The takings analysis must “focus on ‘the parcel as a whole,” including a temporal element, in determining the impact of the challenged regulation. Id., 535 U.S. at 331 (quoting Mahon, 438 U.S. at 130-131.

Judgment was entered in this case finding that the denial of a permit for a specific project – a three-story beachfront duplex – during administrative appeal proceedings was a temporary regulatory taking, even though other economically beneficial uses remained available, and there was no evidence of any effect that this denial may have had on the fair market value of the land. Compensation was awarded for the total value of claimed lost profits, plus additional estimated costs, as if the denial of the permit had completely stripped the property of all value during the litigation.

The questions presented are:

1) Does the temporary prohibition of a specific project or use constitute a compensable regulatory taking, regardless of the availability of other economically beneficial uses of the property?

2) Alternatively, whether it is “just” pursuant to the Fifth Amendment to award compensation for a temporary regulatory taking based solely on the lost profits and other costs of the prohibited project or use, without regard for any remaining value.

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

Petition for a Writ of Certiorari, Baldwin Cnty. v. Bordelon, No. 23-1337 (U.S. June 25, 2024)

When Is A Sidewalk Not -- You Know -- A "Pedestrian Way"? Wisconsin Supreme Court Clues Us In

We were all set to write up the Wisconsin Supreme Court's recent opinion in Sojenhomer LLC v. Village of Egg Harbor, No. 2021AP1589 (June 19, 2024) -- after all, we were already following the case -- when Lawprof Ilya Somin beat us to the punch: "Wisconsin Supreme Court Rules Sidewalks are not "Pedestrian Ways" - thus Allowing Local Governments to Use Eminent Domain to Take Property to Build Them."

Short story is that a Wisconsin statute prohibits using eminent domain to take property for a "pedestrian way," and the Village instituted a condemnation action to take Sojenhomer's property for a sidewalk. No way, you say?

Yes way held the Wisconsin court. The key was that pedestrian way was a defined statutory term, and thus not subject to common meanings (which would seem to include a sidewalk as a pedestrian way). The court concluded that the sidewalk did not meet the statute's definition of "a walk designated for the use of pedestrian travel."

Wait, isn't pedestrian travel what sidewalks are for? (Retired Judge Kozinski said so in this case, for example.) Nope held the court, the term must be read in context -- the old in pari materia gambit in the often-malleable rules of statutory constructions. Although as Prof. Somin points out, "[w]hen the legislature specifically defines a term, that definition trumps any indirect contextual inferences that judges can extract from other passages of the law."

The majority's "clever" argument didn't convince the entire court, and the Chief Justice wrote separately that the term "pedestrian way" includes sidewalks. Duh.

As Professor Somin points out, the majority pretty much ignored the special rule of statutory construction usually applicable to eminent domain statutes: they're supposed to be interpreted strictly against the condemnor, and liberally in favor of the constitutional right to keep property. As he puts it "[c]ounterintuitive technical legal reasoning has its place. But the Wisconsin Supreme Court was wrong to deploy it here."

Elections have consequences!

We recommend you read Professor Somin's post in its entirety.

And oh yes, bees are still fish in California.

Sojenhomer LLC v. Village of Egg Harbor, No. 2021Ap1589 (Wis. June 19, 2024)

"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)

WVa: Tort, Not Inverse (At Least Where Municipalities Are Involved)

The line between negligence torts and inverse condemnation can be a fine one. In Roman Realty, LLC v. City of Morgantown, No. 220587 (June 11, 2024), the West Virginia Supreme Court came down on the tort side.

Now before we go on, a caution: technically speaking the claimant did not assert an inverse condemnation claim. Rather, after the city removed trees and altered the slope of land such that surface water increased on the owner's land, it brought a petition for mandamus to compel the city to institute eminent domain proceedings. There are places that approach it that way.

Here's the gravamen of the petition:

In its verified petition for writ of mandamus to compel eminent domain proceedings, Petitioner alleged that during project construction, eleven trees were removed from its property and “approximately 1,000 square feet of Petitioner’s property was excavated and used as a dump site.” Additionally, Petitioner stated that eight additional trees were heavily damaged by the project. Finally, Petitioner averred that the slope of its property was greatly altered and surface water increased as a result of Respondent’s activities, leading to “a massive issue of surface water” on Petitioner’s property.

Slip op. at 2.

The trial court granted summary judgment to the city, because the owner could sue in tort (and thus has an adequate remedy at law, and thus no mandamus).

The Supreme Court affirmed. It first acknowledged that the West Virginia Constitution requires just compensation or damages when property has been taken. [B]ut it does not mention or require that such compensation be in the form of eminent domain." Slip op. at 4. Thus, a property owner's rights may be protected if West Virginia law recognizes a tort remedy here.

The court next distinguished such claims against the state (as opposed to claims against a municipality). Yes, the mandamus-to-compel-eminent-domain is a well-settled feature of West Virginia procedure. But that is only in cases against the State, because the State has sovereign immunity from tort claims. But that immunity does not necessarily cover municipalities, which can be sued in tort for damages. And here, the city's lawyer at oral argument conceded that the city does not enjoy "blanket immunity" for torts. Slip op. at 6-7 ("Because Respondent’s counsel plainly stated there was no blanket immunity for Respondent, Respondent did not raise statutory immunity in its amended summary judgment motion before the circuit court, and the circuit court did not address statutory immunity in its order, the Tort Claims Act is not a bar to Petitioner’s ability to receive just compensation through a tort action in this case.").

The court also rejected the owner's argument that a tort claim for damages is not as good as the just compensation remedy. No, the court concluded, "remedies available to a property owner in a tort action against a municipality are, in fact, the same as those available from the State in a condemnation proceeding." Slip op. at 7.

Because the owner was granted leave to amend its complaint to allege a tort claim for damages, the court was satisfied nothing would be lost substantively (at least in this case, as opposed to a future case where the municipality did assert a greater scope of sovereign immunity). Here, the owner merely alleged the incorrect cause of action, an action that amendment would remedy.

Roman Realty, LLC v. City of Morgantown, No. 22-587 (WV June 11, 2024)

Can The California Coastal Commission Be Reined In?

The California Coastal Commission is infamous for being the most out-of-control governmental agency in the nation. This regulatory leviathan fancies itself the undisputed czar of land use and other activities in its fiefdom, the California coastal zone.

Created in 1976 as an agency with regulatory authority across California's 1,000+ miles of coast (and land in a defined shoreward zone), it has since expanded to its current role as a government-outside-the-government, whose main role it often seems is more about wielding an iron fist over anything that happens in the coastal area, than protecting coastal access and resources while also respecting property rights as its governing statutes require.

The Commission has been blessed with procedures that appear insanely unfair to anyone not familiar with how things work in California. For example, any two Commissioners may file an administrative appeal of a municipalilty granting a development permit to get it overturned; and to whom do the Commissioners appeal? To the very Commission on which they sit, of course! Yeah, that seems fair.

For decades, the Commission has enjoyed unprecedented power and a legislature and judiciary unwilling to place or enforce any realistic limits on its power. For example, the courts have interpreted a statute that bars the Commission from taking property without compensation to give the Commission the discretion to waive, overrule, or ignore any restrictive state or local coastal law, if the Commission believes to apply it would result in a taking (the Coastal Act are full of these type of restrictions on use). This is tantamount to the Commission exercising legislative power to rewrite the law ad hoc.

OK, enough editorializing. (Strong letter to follow!)

But of late, there may be cracks in the edifice. In large part because of the YIMBY movement, the Commission has become subject to public criticism for being an impediment to reasonable development, something it is not all that used to. Why should Bakersfield, Fresno, and non-coastal communities bear the burden of absorbing the new housing needed to address California's housing shortage, while the while I-got-mine elite coastal enclaves maintain their exclusivity?

A group called "Circulate San Diego" has studied this phenomenon and published this report ("A Better Coastal Commission"):

This report documents numerous examples where the Coastal Commission has resisted, opposed, and delayed the construction of deed-restricted affordable homes that use programs like Density Bonus Law. This is even true for projects on land that is already zoned for multi-family housing, in plans already approved by the Coastal Commission itself.

Similarly, this report documents examples where the Coastal Commission opposes projects that the Legislature encourages as a part of California’s efforts to combat climate change. Crosswalks, bicycle lanes, and infill development near transit are all goals of recent statewide legislation, yet the Coastal Commission opposes or delays many of these projects. Their decisions to prioritize car travel above all other modes is inconsistent with modern climate goals, as adopted by the Legislature.

The report makes some modest recommendations for reform:

• Amend Density Bonus Law to require its implementation by the Coastal Commission, as proposed in AB 2560 (2024).
• Remove or narrow the special exemptions that keep housing reforms from applying to the coast.
• Mandate procedural reforms at the Coastal Commission.
• Apply transportation and climate policy to the Coastal Zone.
• Avoid creating, or narrowly draw, coastal exemptions to new housing legislation.
• Look skeptically on Coastal Commission requests for more authority.

Reacting as you might expect (with affront), the Commission is "offended at even the suggestion" it gets in the way of housing in the coastal zone. See this story from the San Diego Union-Tribune ("Has the Coastal Commission made housing and climate crises worse? It's offended at even the suggestion"). 

But this seems to be one of those "moments." After all, even the Commission's usual allies are asking questions and proposing reforms. When you've lost San Francisco democrats, and the California Supreme Court agrees to take up the first case in a decade which may call your power into question, Coastal Commission, you are missing the cultural zeitgeist. 

Will anything come of this report, and the reform movement generally? Will there be a reckoning for the California Coastal Commission?

If one is in the cards it won't be easy because we know that when there's a threat to its power, it pulls out all the stops and fights like hell. Stay tuned. 

Fla App: Govt Agreed To Be Bound By Restrictive Covenant, But So What!

A short one (per curiam is one two-sentence paragraph), with an interesting concurring opinions from the Florida District Court of Appeals (4th District).

In Vazquez v. City of Hallandale Beach, No. 4D2023-0833 (June 12, 2024), the court held that a restrictive covenant that ran with Vazquez' land (and others in his subdivision, including the city, which had agreed to be bound by the covenant in the settlement of a 1969 lawsuit) is not a compensable real property interest that must be compensated when wiped out by what otherwise would be a regulatory taking.

Vazquez sued the city, asserting that its marina and parking lot violated a buffer zone which had been created by the 1969 settlement. The city was a party to that lawsuit and settlement agreement. The city agreed that yes, the buffer zone indeed had that effect. But we're the government and even though we agreed to be bound by the restrictive covenant in that settlement agreement back in the day, we're not bound by it now. These are contract rights not property rights, and thus unenforceable against the government.

Chief Judge Klingensmith "reluctantly" concurred, noting that the precedents support the court's conclusion when the government has not bound itself via agreement to the covenant. However, he found it important that the city was a party to the settlement and had agreed to be bound:

Phrased differently—in contrast to Bay Harbor and Ryan—the City did not simply acquire land with an existing restrictive covenant attached to the land. Rather, the City created the same restrictive covenant that it now seeks to destroy. Thus, the fact that the City did not own the property in question at the time of the 1969 settlement is irrelevant.

The City also argues that even though it was a party to the 1969 agreement which created the restrictive covenant, and despite the City being involved in a 2012 declaratory judgment action to enforce the restrictive covenant, the City itself was not—nor was it ever—bound by that restrictive covenant. Indeed, the City claims it was free to violate the restrictive covenant at will and has no obligation whatsoever pursuant to Bay Harbor and Ryan to use the power of eminent domain to extinguish the restrictive covenant. In my opinion, this is the very definition of an illusory contract. Despite the City’s assertions that the contract is not illusory, the City has wholly failed to explain under these circumstances why it is not. Pan-Am Tobacco Corp. v. Dep’t of Corr., 471 So. 2d 4, 5 (Fla. 1984) (a contract is illusory if it is not mutually enforceable).

Slip op. at 3 (Klingensmith, C.J., specially concurring).

Judge K didn't like this, but felt "constrained" by the Florida Supreme Court's decisions in the Bay Harbor and Ryan cases that restrictive covenants are categorically contract rights not enforceable against the government, and not property rights. In his view, "both private and public parties should be held to the agreements which they freely enter." Slip op. at 3-4 (Klingensmith, C.J., specially concurring).

One other judge also specially concurred, noting that the 1969 settlement agreement did not contain a clear and express waiver of the city's sovereign immunity.

With two judges offering their input, might this not be the end of this one? Stay tuned.

Vazquez v. City of Hallandale Beach, No. 4D2023-0833 (Fla. Dist. Ct. App. June 12, 2024) (per curiam)

California SCT To Review Major Challenge To Coastal Commission's Claimed Power To Overrule Local Govt's Housing Approvals

Disclosure: this one is one of ours, so we're not going to do a deep dive or do much commentary (must resist!).

Yesterday, the California Supreme Court granted a Los Osos property owner's petition, and agreed to review an (unpublished) Court of Appeal opinion which held that the California Coastal Commission has the authority to appeal (to itself!) the County of San Luis Obispo's decision to grant Shear a Coastal Development Permit to build a handful of homes in the coastal zone.

The County has adopted a Local Coastal Program ordinance regulating development in the coastal zone in the County. Under the California Coastal Act, a municipal government adopting a LCP delegates to the municipality to authority to make these type of land-use permitting decisions, with a very limited window for the Commission to inject itself. The point of the Coastal Act is to maintain a high degree of local control if a municipality has taken the effort to adopt an LCP to reflect its understanding of its obligation to protect public coastal resources when it is making land-use decisions.

In 2003, Shear began the process of building homes on its eight lots zoned by the County for residential development. In 2004, the County approved Shear building eight homes in two stages. In 2017, after Shear completed the first four homes, it sought the County’s approval to complete the balance. After consideration of Shear’s plans under the LCP, the County granted a Coastal Development Permit.

That should have been the end of it. But after the County’s approval, the Commission appealed the County's decision. And to whom did the Commission appeal? In one of the weirdest procedures we've ever heard of, California law allows two members of the Commission to institute an appeal these kind of things...to the very Commission on which they serve. Seems fair (must resist!). Despite the Coastal Act delegating exclusive land use decision-making to local governments that have adopted an LCP, the Commission's appeal claimed that it has the power to overrule all local permitting decisions.

The lower courts agreed. With the County's support, Shear sought discretionary review, and the California Supreme Court said yes.

This case is important for a few reasons beyond the legal questions presented. First, it is the first case in a decade where the California Supreme Court has agreed to review a challenge to the Commission's claimed coastal fiefdom, which appears nearly armor-clad in California's courts (although the Commission's excesses don't play all that well when courts beyond California bother to look).

Second, not only is this a home rule issue about the Commission's lack of respect for local LCP municipalities, but one where coastal property owners need to understand clearly who they need to deal with when seeing government approvals to make presumptively reasonable use of their land (remember, this property is zoned for residential uses); the Commission's position that it is the final czar on all this stuff often puts landowners in the middle of these type of intra-government jurisdiction fights where the only loser at the end is the landowner (flashback to two wolves and a lamb voting on what's for dinner). 

Finally and maybe most importantly, this case brings into sharp focus the ongoing public realization that the Commission has been a substantial impediment to coastal communities carrying their fair share of addressing the housing crisis in California. For example:

• California coastal protections versus housing: The battle is on (SF Chronicle)
• My house of my beach? How California's housing crisis could weaken its coastal protections (Cal Matters)

Will the California Supreme Court bring the Commission back in conformity with the law?

Congratulations to our colleague Jeremy Talcott (who chairs our Coastal Initiative) for the petition grant. Stay tuned here for more. Or follow along on your own on the court's docket. 

Petition for Review, Shear Dev. Co., LLC v. Cal. Coastal Comm'n, No. S284378 (Cal. Apr. 2, 2024)

New "Spite Taking" Cert Petition: Can Govt Take Property To Stop Owner From Making An Allowed - But Disfavored - Use?

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

Our friends at the Institute for Justice have filed this cert petition asking the Supreme Court to take up the case where a New York town eminent domained the Brinkmann property for a public park.

What's wrong with that, you ask...isn't a public park a "classic" public use? Yes. But the twist here is there was also a showing that what actually motivated the taking wasn't some need for another public park in the town, but rather the public's dislike of the use the Brinkmanns intended for their land.

These are what we call "spite takings," where the main purpose behind a condemnation isn't really to do something public with the land, but to stop a disfavored use. Are these ok under the Public Use requirement because -- as the Second Circuit panel majority held -- that who cares about motivation as long as the use is public and not a pretext to a private benefit. Or does it offend the Public Use Clause -- as other courts have held -- to say you're taking it for some public use, when your real motivation is something else (even if not a private benefit)?

Underlying all this is what we see as the predicate question: should the government be in the business of using eminent domain to forcibly acquire private property because the owner is making -- or as here, proposes to make -- an allowed use of the property that the government or the public doesn't like?

Here's the Question Presented:

The Second Circuit, in a 2-1 decision over a dissent by Judge Menashi, held that the Public Use Clause does not prohibit taking property when the asserted public use is a sham. The panel agreed that the complaint alleges “facts sufficient to support a finding” that Respondent Town of Southold’s “decision to create a park was a pretext” for stopping Petitioners from opening a hardware store. But the majority held that, as long as the Town puts a park on the land, it does not matter that the government’s true purpose is to run an otherwise law-abiding property owner out of town.

Judge Menashi would have held that “the Constitution contains no Fake Park Exception to the public use requirement of the Takings Clause.” A park does not satisfy the public-use requirement when its actual purpose and but-for cause is illegitimate, as stopping lawful activity is. Judge Menashi would have “adhere[ d] to precedent providing that a pretextual, bad faith taking violates the public use requirement.” He recognized that “the court’s decision creates a split with decisions of several state supreme courts,” including Connecticut, meaning that the Takings Clause rights of Connecticut citizens now depend entirely on whether the case is in state or federal court.

As framed by the majority below, the question presented— indeed “[t]he only question”—is “whether the Takings Clause is violated when a property is taken for a public amenity as a pretext for defeating an owner’s plans for another use.”

Here's IJ's media release about the petition.

Stay tuned for more.

Petition for a Writ of Certiorari, Brinkmann v. Town of Southold, No. 23-___ (U.S. June 11, 2024)

(Another) Must-Listen Podcast: Infrastructure Junkies' "The Greatest Eminent Domain Story That You've Never Heard!"

This one is about Robert Moses. Yeah, that guy. You may think you know the story, but even if you do, it will be worth your time to listen to this episode of Dave and Kristen's Infrastructure Junkies podcast. You will probably learn something new like me.

Here's the pod's description of the episode:

The best way to understand why we have our standard eminent domain laws and procedures may be to learn through a good story.

Houston attorney Bobby Debelak of the law firm McDowell Hetherington joins Infrastructure Junkies to tell the story of Robert Moses, who amassed incredible power despite never being elected to a public office. Morris utilized eminent domain to accomplish some of the most amazing infrastructure projects in New York. During his amazing reign, virtually all of the City, State and Federal infrastructure spending in New York flowed through Moses. Hear more about his amazing rise to power, projects and controversial legacy.

Be sure to check it out.

Games Government Play: Ninth Circuit Doesn't Buy Attempt To Moot Constitutional Challenge To Co-19 Vaccination Policy By Sandbagging And Withdrawing

Games people play
Night or day they're just not matchin'
What they should do
Keeps me feelin' blue
Been down too long
Right, wrong, I just can't stop it

This one isn't about takings, but is nonetheless a must-read.

In Health Freedom Defense Fund, Inc. v. Carvalho, No. 22-55908 (June 7, 2024), a panel of the U.S. Court of Appeals for the Ninth Circuit (yes, the Ninth Circuit!) held that the litigation was not moot even though the government had revised the challenged regulation. The Ninth Circuit also vacated and remanded the District Court's dismissal of the challenge to the Los Angeles Unified School District's requirement that its employees be vaccinated 

The sequence of facts is important. Check out the shell game shenanigans that LAUSD went through, after which it told the courts with a straight face that this was just routine and not it playing litigation games:

• LAUSD required all employees to have or get the Co-19 vaccination, and was silent about any exceptions.
• The plaintiffs sued, arguing that mandatory vaccinations are unconstitutional.
• The next day, LAUSD issued a "clarifying memorandum" that said that employees who didn't want to get the vaccine could get tested. Thus, it argued, we're not imposing a mandatory vaccine.
• LAUSD sought dismissal - the complaint was either unripe or moot.
• District Court agreed and dismissed for ripeness ("because that policy was changed before it was ever enforced, the dispute remained unripe").
• After dismissal, LAUSD "reversed course again two weeks later[,]" to eliminate the testing option.
• A second lawsuit followed. This time the plaintiffs also alleged that the vaccine is not really a vaccine as that term has been commonly used, meaning something to prevent transmission. Instead, they alleged, the Co-19 was merely a treatment, not a preventative.
• LAUSD sought judgment on the pleadings, which the District Court granted. It relied on Jacobson and rational basis review. As long as there's a conceivable public purpose all's ok. And here it is conceivable that the mandatory vaccine policy would help the public health.
• Next stop, Ninth Circuit. After its answering brief "vigorously defended" the vaccine mandate without making any suggestion that the mandate might be revoked, the court heard oral arguments, with LAUSD confirming during argument that the policy was "still in place."
• After the arguments, however, LAUSD's lawyer (at least according to a declaration submitted by plaintiffs' counsel) said to him "What are you going to do when we rescind the mandate?" Slip op. at 11.
• Same day: LAUSD began the process to rescind, and less than two weeks later, LAUSD "voted to rescind the Policy[.]" But it still kept its options open, and cautioned that if the situation required a return to the vaccine requirement, "LAUSD would reconsider the Policy."
• LAUSD then asked the Ninth Circuit to dismiss, arguing that the complaint was moot: after all we reversed the policy, right?

The Ninth Circuit concluded that the case was not moot: LAUSD's actions came after the litigation was instituted, and did not fall under the "voluntary cessation" exception to mootness. In most cases, the defendant stopping the challenged conduct on its own does not moot a case, unless it is "reasonably clear that the challenged practice will not happen again," and that "any effects of the alleged violation must be permanently reversed." Slip op. at 13.

Here, the Ninth Circuit held, "LAUSD's pattern of withdrawing and then reinstating its vaccination policies is enough to keep this case alive." Id. The pattern here was that "[t]wice LAUSD has withdrawing its policy only after facing some litigation risk[,]" after which it returned "to its old ways." Slip op. at 14. The court characterized this as a "willingness to tactically manipulate the federal courts[,]" rendering "LAUSD's timing ... suspect." Id.

This conclusion was driven by a practical and common sense view of the government's  pattern of strategic litigation behavior (we'd call it "sandbagging"), and not by simply accepting its arguments about what it was up to:

Given the detailed procedural history summarized earlier, the record at least supports a strong inference that LAUSD waited to see how the oral argument in this court proceeded before determining whether to maintain the Policy or to go forward with a pre-prepared repeal option. LAUSD appears to have twice sought to manipulate the federal courts to avoid an adverse ruling on this issue. Moreover, the Board expressly reserved the option to again consider imposing a vaccine mandate. This confirms that LAUSD has not carried its heavy burden to show that there is no reasonable possibility that it will again revert to imposing a similar policy.

Id.

On the merits, the panel rejected Jacobson's "direct" application, concluding that Jacobson only governs when the government requires a vaccine, which is an inoculation to prevent the spread of a disease. This distinction is critical:

The district court relied on Jacobson to hold that the Policy was rooted in a legitimate government interest. Reilly, 2022 WL 5442479, at *5−6. But Jacobson does not directly control based on Plaintiffs’ allegations. In Jacobson, the Supreme Court balanced an individual’s liberty interest in declining an unwanted smallpox vaccine against the State’s interest in preventing disease. 197 U.S. at 38. The Court explained that the “principle of vaccination” is “to prevent the spread of smallpox.” Id. at 31–32. Because of this, the Court concluded that the State’s interest superseded Jacobson’s liberty interest, and the vaccine requirement was constitutional. Id.

Plaintiffs argue that a “traditional vaccine” must provide immunity and prevent transmission, meaning that it must “prevent the spread” of COVID-19. Plaintiffs allege that the vaccine does not effectively prevent spread, but only mitigates symptoms for the recipient. And Plaintiffs claim that something that only does the latter, but not the former, is like a medical treatment, not a “traditional” vaccine. This interpretation distinguishes Jacobson, thus presenting a different government interest.

Putting that aside, the district court held that, even if it is true that the vaccine does not “prevent the spread,” Jacobson still dictates that the vaccine mandate challenged here is subject to, and survives, the rational basis test. The district court reasoned that “Jacobson does not require that a vaccine have the specific purpose of preventing disease.” Reilly, 2022 WL 5442479, at *5 (emphasis in original). It acknowledged Plaintiffs’ allegations that the vaccine did not “prevent transmission or contraction of COVID-19.” Id. at *6. But it declared that “these features of the vaccine further the purpose of protecting LAUSD students and employees from COVID-19,” and thus “the Policy survives rational basis review.” Id.

This misapplies Jacobson. Jacobson held that mandatory vaccinations were rationally related to “preventing the spread” of smallpox. 197 U.S. at 30[.]

Slip op. at 17-18. 

In short, "government's power to mandate prophylactic measures aimed at preventing the recipient from spreading disease to others" is not the same as "forced medical treatment" claimed to protect the recipient. Slip op. at 18. The property analogy is that you don't have a property right to use your property in a way that injures someone else's property, but it isn't a nuisance to make a use that is harmful to your property interests. That's your right.

This is a correct (narrow) reading of Jacobson, a case which, in our opinion, has been widely over-read (esp during the Co-19 lockdowns) to conclude that your life, liberty, and property could be curtailed as long as the government claims to be acting generally for the public health, and if taken to the logical extreme, in the public interest. That, in our view, is the limited exception swallowing the rule. But most courts have bought the argument. 

Before you get too excited about this, remember that this was up on appeal from a 12(b)(6) dismissal, so the complaint's factual allegations -- including, critically, the allegation that the Co-19 vaccine does not prevent the spread and only relieves symptoms -- are going to be subject to proof as the case progresses after remand. See slip op. at 19 ("We note the preliminary nature of our holding. We do not prejudge whether, on a more developed factual record, Plaintiffs’ allegations will prove true.").

A few thoughts for how this opinion might be useful for you takings mavens:

• Trial courts have no business evaluating the veracity of the factual allegations in the complaint, and Twiqbal doesn't change that by allowing a court to be skeptical under the guise of plausibility and act as a gatekeeper to screen the government from what the court views as claims that are unlikely to be proven. Yet we dirt lawyers know that in takings cases, trial courts do it all the time. Whether it is balancing the Penn Central factors at the pleadings stage, or the court apparently concluding that it doesn't buy the pleaded facts, courts are happy to bounce takings complaints at the pleadings stages. This opinion offers a better model.
• Courts often just take the government at its word. "Our law is ____." "Our procedures require ______." And the plaintiff's response that "what the government says its law is isn't really what its law says ... here, read it yourselves, Your Honors," and "the court is the expert on what the law requires, not the government" often fall on deaf ears. (It's also intellectually lazy, but you didn't hear that from us.) We see this most frequently in takings ripeness cases where the plaintiff says the government has taken a solid position about what uses are and are not allowed on the property, but then the government responds by asserting either that the plaintiff didn't follow the proper procedure to seek permission, or that the process isn't done just yet and the government has room to change its mind. There, courts frequently defer to whatever the government says the law or its own procedures require or even allow. Again, this case is a better model, with the court taking an active hand in evaluating for itself, and reaching its own conclusions about what the government did, and what the government's procedures are. 
• We often hear that when dealing with its constituents, government has an obligation to "turn square corners." But this case, in our experience, illustrates the reality. Government very often has its own interests in mind and zealously and aggressively scorched-earths it. It should not take the level of bad faith on exhibit in this case to convince a court that the government is more interested in playing games than it is a fair treatment of its constituents. For more, check our our colleague Deb LaFetra's recent Daily Journal piece, "Encouraging government lawyers to engage in the worst legal shenanigans" ("Playing games with people's constitutional rights is unworthy of our government, and their counsel.").

Be sure to check it out.

With both of the judges in the two-judge panel majority writing concurring opinions, and with a strong dissent, we don't anticipate that the panel opinion is going to be the final word in this one. Stay tuned.

Health Freedom Defense Fund, Inc. v. Carvalho, No. 22-55908 (9th Cir. June 7, 2024)

New Bound by Oath Episode: Berman, Public Use, And Urban Renewal

This is a must-listen, the latest episode of John Ross's Bound by Oath podcast. This season is covering property rights, and this episode details Berman v. Parker, which may be the first case in what we'll call the "modern era" where the Supreme Court set the judicial hands-off tone for public use challenges.

The guest this episode is our friend and colleague Amy Lavine, who wrote what we think is the seminal article deconstructing Berman (we include it as required reading in our William and Mary Eminent Domain course).

This episode is a great companion piece to BBO's episodes on Euclid (zoning), and Pennsylvania Coal (reg takings).

On this episode: Berman v. Parker, the Supreme Court’s decision in 1954 to abandon previous constitutional limits on the government’s power to take property from Person A to give it to Person B. The decision greenlit the era of urban renewal, which saw over a thousand cities across the country seize and bulldoze entire neighborhoods en masse.

Be sure to listen to this episode (and indeed the entire season).

Unpublished Wednesday: Eviction Moratorium Taking, Excessive Fines Taking, And 1983 Zoning Statutes Of Limitations

Here are three federal circuit opinions, all unpublished. None of them worthy of a stand-alone post, but also not to be overlooked entirely.

• GHP Management Corp. v. City of Los Angeles, No. 23-55013 (9th Cir. May 31, 2024): Lessors "failed to state a claim for a Fifth Amendment per se physical taking[,]" in their challenge to LA's eviction moratorium. You know why: you waived your right to exclude by renting your properties, so the government prohibiting you from getting breaching tenants out is merely a regulation of the landlord/tenant relationship. Yee.
  
• Innova Investment Group, LLC v. Village of Key Biscayne, No. 21-11877 (11th Cir. May 29, 2024): After the Village tagged Innova with a NOV and $4k fine for not obtaining an interior demolition permit and Innova failed to correct the violations within the 60-day deadline, the Village imposed $4k per day fines and "aggregate penalties of $924,000 and it has claimed more than $1.2 million in interest for each day the penalties have gone unpaid." Six years later, Innova sued, asserting the Village violated the Excessive Fines Clause. And yes, there's a takings claim as well. The Eleventh Circuit affirmed the district court's dismissal because the claim should have been brought long ago. Florida has a four year statute of limitations, which means that the section 1983 claim needed to be brought within four years of November 2012, when Innova "should have known how much money it would owe the village[.]" 
  
• Handsome, Inc. v. Town of Monroe, No. 23-711 (2d Cir. May 29, 2024): landowner needed a special use permit to construct industrial buildings, which was granted subject to several conditions. After the owner and the Town went back-and-forth in hearings and permit denials and grants-with-conditions, Handsome's state court lawsuit ended up in the Connecticut Supreme Court which held that Handsome did not have standing because it lost title to the property during the course of the case. Another state court action alleging Due Process and Equal Protection claims followed, after which the Town removed the case to federal court. The Second Circuit summarily affirmed the District Court's grant of summary judgment in the Town's favor, primarily because the claims were time barred. The court rejected Handsome's claim that these were continuing violations. The court also rejected the substantive due process claim, because (you guessed it) Handsome didn't have a property interest in a permit because it wasn't entitled under state law to a permit.

Check 'em out.

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)

Happy Birthday, Nectow v. City of Cambridge!

It was on this day in 1928 when the U.S. Supreme Court issued its second most famous decision about zoning, Nectow v. City of Cambridge., 277 U.S. 183 (1928). 

We say "second" because everyone knows that the first is the Court's decision issued just two years earlier which generally upheld comprehensive use, height, and density regulations as a valid exercise of the government's police power to regulate property uses to further the public health, safety, welfare, or morals. See Village of Euclid v. Ambler Realty Co., 272 U S. 365 (1926). 

Partly because of the hype surrounding Euclid and the broad governmental embrace of exclusionary land use policies that Euclid unleashed, we think that Nectow has not received the attention it is due. After all, it should be seen as the companion case to Euclid: it was authored by same Justice who wrote Euclid (Justice Sutherland), and there's a straight line between all three parts of the Court's 1920's land use trilogy (Mahon, Euclid, and Nectow), two of which are strong reaffirmations of property rights. 

But today, Nectow is often dismissed as a byproduct of an earlier time, Lochnering of the substantive due process rational basis test, or even just too archaic to pay attention to.

But unlike Euclid, which was a facial challenge to zoning generally, Nectow was an as-applied challenge, asserting that placing some of Nectow's land in a residential zone -- and thereby causing a contract for sale of the land for non-residential uses to be cancelled -- was arbitrary and capricious. A master appointed to find facts determined the residential designation was out of sync with the mixed uses in the surrounding area. But the Supreme Judicial Court of Massachusetts took Euclid and Justice Sutherland at their word and concluded "who are we, mere judges, to question what Cambridge's zoning officials say is in the public interest?" (We're paraphrasing of course, but that was the vibe.)

But Justice Sutherland was all "hang on, pay attention to what we said in Euclid; that wasn't us telling courts to be poodles." (Paraphrasing, again):

Nevertheless, if that were all, we should not be warranted in substituting our judgment for that of the zoning authorities primarily charged with the duty and responsibility of determining the question. Zahn v. Board of Public Works, 274 U. S. 325, 328, 47 S. Ct. 594, 71 L. Ed. 1074, and cases cited. But that is not all. The governmental power to interfere by zoning regulations with the general rights of the land owner by restricting the character of his use, is not unlimited, and, other questions aside, such restriction cannot be imposed if it does not bear a substantial relation to the public health, safety, morals, or general welfare. Euclid v. Ambler Co., supra, p. 395 (47 S. Ct. 114). Here, the express finding of the master, already quoted, confirmed by the court below, is that the health, safety, convenience, and general welfare of the inhabitants of the part of the city affected will not be promoted by the disposition made by the ordinance of the locus in question. This finding of the master, after a hearing and an inspection of the entire area affected, supported, as we think it is, by other findings of fact, is determinative of the case. That the invasion of the property of plaintiff in error was serious and highly injurious is clearly established; and, since a necessary basis for the support of that invasion is wanting, the action of the zoning authorities comes within the ban of the Fourteenth Amendment and cannot be sustained.

 

So yes, zoning as a concept is within the police power, but we must keep at the forefront the core principle that property rights are to be respected. Facts, and not some vague incantation of the rational basis test should serve as the standard 

As James Metzenbaum, the lawyer who represented the Village of Euclid later wrote:

It is essential that there be kept in mind the ever-true doctrine that the owner of property doas have some inalienable rights. A corollary of this doctrine is that it is the duty of the lawyer to fight for the preservation of such rights and not to permit overly zealous zoning experts who draft ordinances nor obliging Councils who pass them, to promulgate legislation which is unreasonable or which unlawfully tends toward the divestment of the property owners' constitutional rights.

See James Metzenbaum, The History of Zoning - A Thumbnail Sketch, 9 W. Res. L. Rev. 36, 42 (1957).

So here's how we see it: go ahead and zone, government. But it's gotta make actual sense (Nectow). And even if it does makes sense but nonetheless deprives the property owner of essential rights, you have to pay for the privilege (Mahon). 

Oh no, you say, if we revive Nectow's recognition of restraints on the police power what shall become of zoning? It doesn't mean the end, only a reasonable limits, bounded by property rights. You know what term is in the Constitution? "Private property." And what term isn't? "Police power." Sure, the term, like element domain, is inherent, we suppose. But aren't we more concerned with protecting an individual's freedom to choose how to use her property, unless there's some articulable harm that can be shown, and not presumed?

And rest easy: zoning isn't the be-all-end-all of municipal land use regulation. Especially when properly constrained by the Constitution. Professor Siegan's seminal book explains why. 

So Happy Birthday, Nectow. Ninety-six years young and looking better each day!

Blinded Me With Science! No Taking For Selective Co-19 Business Shut-Down, But Might Violate North Carolina's Fruits Of Labor Clause

Check out the North Carolina Court of Appeals opinion in North Carolina Bar and Tavern Ass'n v. Cooper, No. COA22-725 (Apr. 16, 2024).

We're not going to go into great detail, mostly because this one tracks the most common judicial approach to takings challenges to business shut-down orders during the Co-19 period. The court concluded that the State's selective shut down of certain bars but not others was neither an "emergency commandeering" under North Carolina's emergency response statute, not a physical, Lucas, or Penn Central taking. Read the opinion for the reasons why.

But there is more than one way to skin that cat. The court held that the trial court should not have rejected the plaintiff's motion for summary judgment on its North Carolina's Fruits of Labor Clause claim.

That provision states:

We hold it to be self-evident that all persons are created equal; that they are endowed by their Creator with certain inalienable rights; that among these are life, liberty, the enjoyment of the fruits of their own labor, and the pursuit of happiness.

N.C. Const. art. I, § 1.

The court held that the State's invocation that its treatment of the plaintiffs was backed by "data and science" was not enough. A government action violates the Fruits of Labor Clause if it bears "no rational, real, or substantial relation to the public health, morals, order, or safety, or the general welfare." Slip op. at 24.

In other words, "if the restrictions are arbitrary and unreasonable." Id. But unlike those situations where a court is reviewing governmental action under the rational basis test where the mere invocation of "science" is usually enough to satisfy the test, under the Fruits of Labor Clause that science has to be kinda good science. See slip op. at 27 ("Although we view the evidence in the light most favorable to Defendant for purposes of summary judgment, we must also review the scientific evidence that was before the trial court, which acts in its capacity as the gatekeeper of expert testimony, to determine whether it is sufficiently reliable.").

Check it out.

North Carolina Bar and Tavern Ass'n v. Cooper, No. COA22-725 (N.C. App. Apr. 16, 2024)

CA2: If You Want To Be A Land Use Player, You Gotta Play (And That Means Keep On Trying - Without Hitching Rides)!

This is one we've been meaning to post for a while, but something else always seemed to intervene.

In BMG Monroe I, LLC v. Village of Monroe, No. 22-1047 (Feb. 16, 2024), the U.S. Court of Appeals for the Second Circuit affirmed the dismissal of a statutory and constitutional challenge to the Village's .

The court did so on the basis of the surviving part of the Williamson County ripeness requirement, that the government has taken a definitive position on whether it will allow some development of the plaintiff's land under the challenged regulations.

BMG wanted to build 181 homes, so it developed plans for a mix of uses across several parcels, and development of related infrastructure like roads and a community center. This "did not conform to the zoning codes of the Village and Town." Slip op. at 4. The Village and Town were ok with the proposal, however, provided BMG "satisfied certain conditions" such as the look and feel of the buildings, and other architectural style points. Slip op. at 6. Conditional use approvals followed. Eventually, all looked good and the Village and Town granted conditional final approvals.

But when BMG submitted applications for the building permits on several of its lots, the building inspector balked, asserting the architecture and design were off and not what the conditions required. Permits denied. BMG chased administrative appeals to the Zoning Board of Appeals for some -- but not all -- of the lots. The ZBA eventually denied the filed appeals, concluding that indeed, the construction plans were not in conformity with the conditions on those lots.

Having exhausted its administrative remedies on some but not all of the lots, BMG sued. There wasn't a takings claim (BMG's claims included section 1983, Fair Housing Act, and equal protection), but the district court nonetheless applied Williamson County to dismiss the complaint as unripe.

The Second Circuit affirmed. BMG had not received the Village's "final decision" denying development. But wait, you say...I thought that you said that BMG lost the ZBA appeal? That's usually enough, isn't it? Yes, it did do that, but it didn't chase an appeal on all of the lots. Thus, "BMG's failure to obtain a decision from the ZBA 'leaves undetermined the permitted use of the property in question[.]'" Slip op. at 12 (citations omitted). 

BMG responded: the reason we didn't chase a ZBA appeal on those other lots was that doing so would have been futile. And we did get final approvals and ZBA denials on the other parcels in the group, so isn't that enough? No, according to the Second Circuit, rejecting the argument that "[i]n essence, BMG argues that its otherwise-unripe claims relating to Lots 1, 2, and 3 can hitch a ride on the ripeness of its claims relating to Lots 45 and 46." Slip op. at 13. 

And it didn't matter anyway because even those lots on which BMG chased and lost its ZBA appeals are not ripe because (you guessed it), BMG didn't also seek a variance. Slip op. at 14. Apparently, the Second Circuit sees a variance as some kind of super appeal after ZBA denial. And didn't BMG already get a "variance" (also known as a conditional  use permit)?

But that wasn't enough:

We conclude that after the ZBA affirmed the Village Planning Board’s finding that BMG’s construction plans did not comply with previously agreed-upon conditions, BMG was then required to “submit[] at least one meaningful application for a variance” to the Village Planning Board or ZBA to see whether it could apply clustering techniques in the multi-family district while using the new rear elevation, roof pitch, and siding materials.5 See id. Put simply, the SEQRA Findings provided the terms BMG had to abide by in order to depart from the normally applicable land-use restrictions in the Town and Village. As a result, if BMG wished to alter those conditions, it first had to seek another variance before proceeding to federal court. Cf. Southview Assocs., Ltd. v. Bongartz, 980 F.2d 84, 98–99 (2d Cir. 1992) (holding that, even where “the Board ha[d] denied[] . . . one application,” developer still faced burden of establishing that “submission of another application would be futile” (emphasis added)).

Slip op. at 17.

And finally, didn't Pakdel change the ripeness/futility standards? Not at all, according to the Second Circuit. See slip op. at 19. The more things change, the more they stay the same, no?

What's that old adage? If at first you don't succeed, try and try again? We know that in land use, that means as long as the government says it is willing to "clarify" or "change" its decision (something it almost always asserts it is able and willing to do), a court will very likely never hold it to task. Planning authorities know this, and as a consequence are hardwired to almost never say no, and only "no, but..." or "maybe." 

Until the Supreme Court wakes up to this dynamic, nothing is likely to change.

BMG Monroe I, LLC v. Village of Monroe, No. 22-1047 (2d Cir. Feb. 16, 2024)