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Professor Kanner's Final Article: "Eminent Domain Projects That Didn't Work Out," 12 Brigham-Kanner Prop. Rts. J. 171 (2023)

Here it is -- Professor Gideon Kanner's final law journal article, published shortly before his passing:

Gideon Kanner, Eminent Domain Projects That Didn't Work Out, 12 Brigham-Kanner Prop. Rts. J. 171 (2023).

Appropriately, we think, published in William and Mary Law School's Brigham-Kanner Property Rights Journal, named in part in Gideon's honor.

This isn't a typical law journal article, but an essay collecting Professor Kanner's thoughts, comments, and (best of all) opinions on, well, eminent domain (and redevelopment) projects that didn't work out.

In Gideon's own words, from the Introduction:

But whether you favor widespread use of eminent domain or not, and whether the projects created by its use are sound or not, it is deplorable that the power of eminent domain has been often deployed to the detriment of racial and politically powerless minorities. Typically, redevelopment projects tend to displace middle class and poor people from their homes and businesses but provides parsimonious compensation that falls short of indemnity. The displaced people are limited by the courts to recovery of “fair market value” of their real property, which fails to include compensation for a variety of economic losses inevitably inflicted when people are involuntarily displaced. To add insult to injury, while talking glibly about indemnity, courts do not provide it and have not explained the reasons for this state of affairs. Too often they rely on factually unsupported lamentations—“fearful guesstimates” as one commentator put it—that full, realistic  compensation would be too expensive or even cause an “embargo” on public works, as the California Supreme Court once asserted.

What follows is a sampling of cases that failed to live up to their planners’ projections, including but not limited to redevelopment projects. The latter are particularly egregious because the linchpin of their success is a process of generating private gains for the private parties chosen to participate in those projects, while undercompensating the displaced populations of the areas targeted for redevelopment. Thus, the benefits, if any, of such projects are attained, if at all, on the back of condemnees, in violation of the principle that such costs should be fairly spread on members of the society that benefits from them and disproportionally imposed on people in the path of those projects.

Thank you to the editors of the Brigham-Kanner Property Rights Journal for publishing it, in its unfiltered form.

Disclosure: I helped edit the piece, and Gideon even asked if it was worthy of publication (as if!). He described it as his "last" article collecting his collective thoughts. Yes, I responded, let's work on this and get it out for everyone to read (although I was secretly hoping that was not his final work). One of our University of Hawaii Law School Land Use students, Pono Arias, even volunteered his time and efforts as Gideon's Research Assistant and tracked down citations, made helpful edits and suggestions, and got the piece ready to go. We're grateful for Pono's work on this, as was Professor Kanner.

So here it is, Professor Kanner's last publication. When you read it, I am sure that - like me - you will hear it in your head in Gideon's voice.

And that's a good thing.

Gideon Kanner, Eminent Domain Projects That Didn't Work Out, 12 Brigham-Kanner Property Rts. J. 171 (2023)...

Join Us For 100 Years Of Pennsylvania Coal (Pace Land Use Conference, Dec. 8, 2023)

22nd annual Alfred B. DelBello Land Use
and Sustainable Development Conference

Come, join us (and others) on Thursday-Friday, December 7-8, 2023, at Pace Law School in White Plains, New York for the Land Use and Sustainable Development Conference (this year’s conference theme is "Balancing Economic Realities with Environmental and Social Concerns").

We're speaking about the 100th anniversary of the modern regulatory takings doctrine, which got its start nearly 101 years ago with the Supreme Court's opinion in Pennsylvania Coal Co. v. Mahon, where the Court held that property may be regulated, but if the regulation "goes too far," it will be deemed a taking.

Here's a description of the program:

The 100th Anniversary of Pennsylvania Coal vs. Mahon: How the Takings Clause Became the Primary Check on Government Power When SCOTUS Abandoned Review Under the Due Process and Contracts Clauses During the New Deal

The Takings Clause and 100 years of the Pennsylvania Coal v. Mahon doctrine have become the primary check on governmental power that the Due Process and Contracts Clause used to serve, before the Supreme Court finally and formally abandoned judicial review under those doctrines during the New Deal. Mahon transcended its primary relevance as to compensation for the taking of private property to become the fundamental means by which the Rule of Law determines of the individual’s relation with the government.

This session will survey the evolution of takings law and assess its impact on federal, state and local government authority, including not only the limits of that power over private property, but how the law as created by Mahon reconciles the essential issue of an individual’s private rights as they relate to the government’s exercise of authority in the public interest. This ambitious session will predict where these trends are taking us and what constitutional, legislative, and executive initiatives should be considered.

Carole N. Brown, Esq. Professor of Law, University of Richmond School of Law
Dwight H. Merriam, Esq., FAICP, Attorney at Law
Robert H. Thomas, Esq., Joseph T. Waldo Visiting Chair in Property Rights Law, William & Mary Law School and Director, Property Rights Litigation, Pacific Legal Foundation
Gregor I. McGregor, Esq., Founding Partner, McGregor Legere & Stevens PC
Moderator: Carolynne C. White, Esq., LEED AP, Brownstein Hyatt Farber Schreck, LLP

Should be a good (and fun) program. The other programs on the agenda are also very worthwhile (we shall be attending the entire day). Registration information and the complete agenda and speaker list here.

Please stop by and say hello if if you are there.

Harvard Law Review On Tyler v. Hennepin County: Reflecting The "Diminishing" Role Of State Property Law In Takings

Check this one out, the Harvard Law Review's summary of Tyler v. Hennepin County, the "home equity theft" takings case decided unanimously by the Supreme Court.

Some highlights:

Beginning with traditional principles, Chief Justice Roberts suggested that a property interest in surplus equity had English origins — King John proclaimed in the Magna Carta that when collecting debts owed to him by a deceased person, any surplus “shall be left to the executors.” Parliament endorsed this principle, giving the Crown the power to seize and sell a taxpayer’s property to satisfy a tax debt but requiring the surplus to be returned to the original owner.And according to Blackstone, the English common law required the same.

So too did historic and contemporary American laws.

...

While the Tyler Court continued the trend of a robust Takings Clause, it introduced novel evidence of a taking: a lack of internal consistency in Minnesota’s statutory regime. The majority’s discussion of analogous statutory contexts (where a property owner has an interest in surplus equity) exemplifies the longstanding concern justifying the Court’s diminishing of the role of state law in takings jurisprudence — state legislatures manipulating property interests to insulate themselves from takings liability. It also suggests that ordinary judicial review of positive state law may better identify and correct legislative gamesmanship than an evaluation of history and tradition can. Indeed, courts searching state property law for contradictory treatment will make it harder for a state to manipulate property interests. Tyler’s internal-consistency requirement permits the Court to restore state property law’s primacy and avoids the complications associated with the Court’s current approach of a “jurisdictionless” property law.

As early as Board of Regents of State Colleges v. Roth in 1972, the Court has recognized state law’s crucial role in articulating the “rules or understandings” defining property interests. Yet, throughout the Court’s case law, a theme persists: a fear of gamesmanship and the possibility that affirming the importance of state law incentivizes states to insulate themselves from takings liability. The worry is that, left to its own devices, a state might “transform private property into public property” via legislative enactment or define a property interest so broadly as to render regulations paltry in their interference.

Pre-Tyler, this concern appeared overstated. In one of its more prominent opinions concerned with gamesmanship, the Court failed to cite any prior examples of a state “improperly . . . fortify[ing]” itself against takings claims by passing legislation that defined land parcels strategically. In fact, Chief Justice Roberts had once emphatically argued that in most circumstances, state law should define the relevant parcel to be considered in a takings claim, and that worries surrounding state gamesmanship were unfounded.

(Footnotes omitted.)

Check it out.

(Un)Happy 97th Birthday, Euclid!

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 (shame on you if you don't!) - it is the case 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 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.

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? 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), 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 three years might bring. In the meantime, we're going to recognize Euclid's birthday. Whether it is a happy one is subject to change.

 

It is literally a landmark decision.

Brief on Behalf of the National Conference on City Planning, et al., Vill. of Euclid v. Ambler Realty Co.,...

"The courts don't need Congress's permission to enforce the self-executing constitutional right to just compensation."

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

Here's the amicus brief we just filed in a case we've (obviously) been paying close attention to.

This is Devillier v. Texas, the case in which the Supreme Court is considering what does the it mean when it describes the Just Compensation Clause as "self-executing?" Do you need statutory authorization in order to bring a takings or just compensation claim, or can you sue directly under the Constitution? Does it matter that Congress has adopted a statute which authorizes damages suits against local governments ("persons"), but has not expressly done so against states qua states?

We say no and our brief explains why.

Note that there's no Eleventh Amendment issue here, because Devillier filed his federal claims in a Texas court, and it was the State of Texas that removed it to federal court (thus forfeiting any 11A claim, because the State chose the federal forum).

We won't go into a lot of detail here, because you can read it yourself (or you can read our post on the cert grant). Here's the Summary of Argument from our brief:

The courts don’t need Congress’s permission to enforce the self-executing constitutional right to just compensation. A civil right is self-executing “if it supplies a sufficient rule by means of which the right given may be enjoyed and protected, or the duty imposed may be enforced.” Davis v. Burke, 179 U.S. 399, 403 (1900). Compensation for a taking is just such a right. The plain text of the Fifth Amendment itself supplies the rule for how the right is protected, and how it is enforced: takings of private property require compensation. This Court has said so—many times. See, e.g., First English Evangelical Lutheran Church of Glendale v. Los Angeles Cnty., 482 U.S. 304, 316 n.9 (1987) (the Just Compensation Clause “of its own force furnish[es] a basis for a court to award money damages against the government.”); Knick, 139 S.Ct. at 2172 (citing First English as holding that a “property owner acquires an irrevocable right to just compensation immediately upon a taking”).

Congress may enforce the Fourteenth Amendment by creating causes of action and remedies. U.S. Const. amend. XIV, § 5 (“The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.”). Because the Fourteenth Amendment’s plain text applies to the states as states, Congress could create a statutory cause of action for deprivations of life, liberty, or property by a state. U.S. Const. amend. XIV, § 1 (“nor shall any State deprive any person of … property, without due process of law”). But Congress need not have done so for Richard Devillier to seek compensation from Texas for a taking, because the Fifth Amendment itself specifies the remedy, and the absence of legislation does not prohibit courts from enforcing the self-executing constitutional right to just compensation.

Statutory authorization may be necessary for other civil rights claimants to sue, but not Just Compensation claimants, because with one possible exception, no right listed in the Bill of Rights other than the right to Just Compensation is self-executing. That Congress created a general civil cause of action for “persons” claiming deprivations of “rights, privileges, or immunities secured by the Constitution and laws”—Civil Rights Act of 1871, 42 U.S.C. § 1983—is of no moment here. For example, Congress has never legislatively established a cause of action for just compensation against the federal government, and owners whose property is alleged to have been taken seek compensation directly under the Constitution. The Tucker Act does not create a cause of action for compensation or money damages; it only assigns jurisdiction over constitutionally based takings claims to the Court of Federal Claims and the Federal Circuit. See 28 U.S.C. § 1491(a)(1) (“The United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded … upon the Constitution”). In federal takings, the self-executing Just Compensation Clause recognizes the right and provides the remedy. Blanchette v. Conn. Gen. Ins. Corps., 419 U.S. 102, 126 (1974). If the lack of a statutory cause of action does not stand in the way of holding the federal government to the Just Compensation Clause’s requirements, it similarly does not stand in the way of the same claim against a state. Our constitutional order cannot countenance neutering a right and remedy expressly recognized by the text of the Constitution, on the grounds that Congress has not acted.

The Fifth Circuit acknowledged Texas’ obligation to comply with the Fifth and Fourteenth Amendment’s plain requirements. But by divorcing liability from the constitutionally mandated remedy, the court below engaged in a clever, but not compelling, Texas two-step. First, the Fifth Circuit acknowledged that states cannot effect uncompensated takings. Yet the court concluded that Congress must affirmatively provide a statutory remedy before property owners may pursue compensation claims against a state—even in the state’s own courts. Petitioners sued Texas in a Texas court, alleging that the state’s deliberate flooding of their land effected a taking requiring compensation under the Fifth and Fourteenth Amendments. Texas eliminated any possible Eleventh Amendment issues that may have been lurking by removing the case to federal court. Lapides v. Bd. of Regents of Univ. Sys. of Ga., 535 U.S. 613, 622–23 (2002); Embury v. King, 361 F.3d 562, 566 (9th Cir. 2004) (“Allowing a State to waive immunity to remove a case to federal court, then ‘unwaive’ it to assert that the federal court could not act, would create a new definition of chutzpah.”) (citation omitted). By requiring that Congress first recognize a cause of action for just compensation, the Fifth Circuit ensured that Devillier’s federal civil rights cannot be enforced in any court.

This Court should reaffirm that the Just Compensation Clause is self-executing and hold that property owners need not rely on a statutory cause of action where compensation is mandated by the Fifth and Fourteenth Amendments. The Constitution itself provides the cause of action, rendering the need for a statute unnecessary.

Our colleagues at the Institute for Justice (who represent the petitioner) filed the merits brief earlier in the week (well worth your time reading it, by the way, and bravo to them for identifying this case and bringing it to the Court's attention).

Special shout-out to our law firm colleagues (and self-executing Just Compensation mavens) Deb La Fetra and Kady Valois for this brief.

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

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

New Podcast: The Cedar Point Takings Case (From The Guy Who Argued Cedar Point)

Check this out, our law firm colleague Joshua Thompson talks about regulatory takings, and his big Supreme Court victory in Cedar Point Nursery.

If you are reading this blog, you already know what that means. Regulatory takings. Bundle of sticks. Penn Central (bleh), and right to exclude. Here's the description of the program:

In this thought-provoking episode, Bob Stetson and Joshua Thompson, Director of Equality and Opportunity Litigation at the Pacific Legal Foundation, discuss the landmark case of Cedar Point Nursery vs. Hassid and explore the intricate balance between private property rights and public interests. What constitutes a 'taking' and how far government regulations can go in the name of the public good?

Stream it above, or listen on Spotify here.

(Our own thoughts on the Cedar Point case here.)

Legislative Exactions Merits Brief (Ours): "the text and history of the Takings Clause admit no exception for legislative takings"

Here's the merits brief in a case we've been following (naturally, because it is one of ours). This is Sheetz v. El Dorado County, the case which asks whether a condition on development (aka an "exaction") is exempt from the close nexus and rough proportionality standards of Nollan/Dolan/Koontz simply because the exaction is imposed on every owner who asks for permission to use its property, and not via an ad hoc administrative permit procedure.

Because this is one of ours, we're not going to go into in further, but leave to you to read our brief:

In this Court’s key exactions precedents—Nollan, Dolan, and Koontz—it held that when government exacts money or real property as a condition on the right to use or develop land, it must establish that the exaction bears an “essential nexus” and “rough proportionality” to an adverse public impact caused by the owner’s proposed project. In this case, the Court should confirm that Nollan/Dolan review applies, not just to so-called ad hoc or discretionary conditions, but to legislatively mandated exactions as well, such as the fee that El Dorado County imposed on Mr. Sheetz. That rule follows inexorably from this Court’s precedents, as well as the history and purpose of the Takings Clause and the unconstitutional-conditions doctrine. The rule is easy to implement. And the rule ensures that any exaction serves as genuine mitigation for public impacts attributable to the proposed use or development rather than a veiled attempt to skirt the compensation requirement of the Takings Clause.

...

[T]he text and history of the Takings Clause admit no exception for legislative takings. “The Takings Clause . . . is not addressed to the action of a specific branch or branches,” but is instead “concerned simply with the act, and not with the governmental actor.” Stop the Beach Renourishment, Inc. v. Fla. Dep’t of Env’t Prot., 560 U.S. 702, 713–14 (2010) (plurality op.). Holding all exactions accountable to the Takings Clause ensures the fulfillment of the Clause’s fundamental purpose: “to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, 364 U.S. 40, 49 (1960).

Stay tuned.

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

Brief for Petitioner, Sheetz v. County of El Dorado, No. 22-1074 (U.S. Nov. 13, 2023)

Here's The Program For The 41st ALI-CLE Eminent Domain And Land Valuation Litigation Conference, Feb 1-3, 2024, New Orleans

Here's the brochure and the full agenda and registration information for the upcoming ALI-CLE Eminent Domain and Land Valuation Litigation Conference at the JW Marriott in New Orleans, February 1-3, 2024.

This is the long-running nationally-focused conference on all things eminent domain, takings, valuation, and related. We have three tracks, from which you can choose a la carte - Practice, Substantive, and Condemnation 101:

For over 40 years, we’ve been bringing eminent domain practitioners together to examine the latest issues, engage in healthy debate, and get the information they need to stay current in their practice. This year – our 41st – is THE perfect time to reunite with your eminent domain colleagues. There will be plentiful opportunities to meet and mingle with the faculty and other registrants – throughout the conference and at evening social events. Attendees come back year after year to make new friendships and renew longstanding ones – in a welcoming environment and amongst others who share the same passion for this area of the law.

Please check it out. Over the next couple of weeks we shall bring you details of the various programs.

If you have joined us in the past, you know what a worthwhile conference this is. If this will be your first time, welcome; we hope that you will become a long-term colleague.

Register now, and reserve your spot. In the past few years, we've sold out the hotel block and the Conference seats. So don't miss out!

2024 ALI-CLE Eminent Domain and Land Valuation Litigation Conference Brochure, Feb. 1-3, 2024, New Orleans,...

New Takings Ripeness Cert Petition (Ours): One Variance, Two Variance, Three Variance...More?

Here's a takings cert petition, filed yesterday.

Because this is one of ours, we're not going to comment much beyond reposting the Question Presented, and to let you know this one is about how the "relatively modest" requirement that the government have taken some "definitive position" about what uses are allowed and what uses are not on a claimant's property -- as the Court noted in Pakdel, a "de facto" decision is enough. Yes, prudential ripeness.

Question Presented:

Matthew Haney sought to build a home on a small undeveloped island in Popponesset Bay, Massachusetts, zoned by the Town of Mashpee exclusively for single-family residential use. But building a home requires a variance from the Town’s setback and frontage requirements. Haney twice sought this variance, and twice the Town rejected his requests. The Town’s unqualified position that Haney could not obtain the necessary variance to build his home satisfies the usual indicators that a takings claim is justiciable. Suitum v. Tahoe Reg’l Plan. Agency, 520 U.S. 725, 736–37 (1997) (development plan plus one request for a variance ripens a takings claim). But when Haney sought just compensation in federal court, the First Circuit held the case does not present a ripe controversy because the Town suggested it may grant a third application for a variance if Haney first secured permission from the State of Massachusetts to build a steel bridge to the island.

The question presented is:

Can the government evade adjudication of constitutional takings claims on prudential ripeness grounds—after it has twice definitively denied necessary variances—by indicating that it may consider a third variance request if the property owner first obtains an additional permit from a different government agency?

A special shout-out to our law firm colleagues Jeremy Talcott and Deb La Fetra, who carried the load on this one.

Now we wait.

Petition for Writ of Certiorari, Haney v. Town of Mashpee, No. 23-____ (U.S. Nov. 1, 2023)

Alabama: Banning Short-Term Rentals Is Constitutional (PS - "the Alabama Constitution does not recognize regulatory-takings claims")

A quick one from the Alabama Supreme Court. In Dixon v. City of Auburn, No SC-2022-0741 (Oct. 27, 2023), the court rejected a property owner's claim that the city outlawing short term rentals of residential properties -- when the plaintiff had been renting his basement for a while -- was not a violation of the Alabama Constitution.

The court rejected the argument that Dixon's use was a nonconforming use or vested right, and concluded that his right to do so was not so because he had no legal right to rent out his property before the STR ordinance. The court rejected his claim that in the absence of regulations limiting that right, he could rent short term, because the zoning code prohibits any uses not expressly allowed. Slip op. at 10.

And here's the interesting bit. Although Dixon styled one of his claims as "an 'unlawful taking without just compensation'" under Alabama law, slip op. at 7 n.4, the court noted that the substance of the claim sounded in due process. The court also noted in the same footnote that "in Town of Gurley v. M & N Materials, Inc., 143 S. 3d 1 (Ala. 2013), a  majority of this Court concluded that the Alabama Constitution does not recognize regulatory-takings claims, and the trial court relied upon Gurley in entering summary judgment as to [the "just compensation" claim]." Id.

The footnote goes on: "Dixon has not asked this Court to revisit Gurley, and, therefore, to the extent that Dixon attempted to present a takings claim under the Alabama Constitution, the trial court's summary judgment as to that claim must be affirmed." Id.

This sure sounds like if the court were presented with an argument that Gurley is wrong (we're not scholars of Alabama constitutional law, but we're betting it is wrong and that you can bring a claim under the Alabama Constitution for just compensation for a taking), the court just might entertain overruling or at least revisiting it.

So heads-up Alabama property lawyers, here's your mission if you choose to accept it.

Dixon v. City of Auburn, No. SC-2022-0741 (Ala. Oct. 27, 2023) (per curiam)

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)"

A short one from the Ninth Circuit on a topic that we keep revisiting, whether the various eviction moratoria adopted and enforced by the feds and many states and local governments during Co-19.

We keep revisiting the topic because the courts keep getting it wrong.

And before we go on, a disclosure: this is one of ours, and our law firm and our colleague Jon Houghton rep the property owners.

This moratorium is from the State of Washington (yes, the same State of Washington whose moratorium was recently challenged unsuccessfully in the state courts). But this challenge is to the City of Seattle's moratorium, and is in federal court.

Thus, it was the Ninth Circuit considering the question of whether, by commandeering rental property as pandemic public housing, Washington was on the hook for just compensation. Requiring to house residents -- whatever the reason -- is a physical occupation taking, right? 

Not to the Ninth Circuit (and most other courts that have considered the issue). Which in El Papel, LLC v. City of Seattle, No. 22-35656 (Oct. 26, 2023), rejected the owner/lessor's physical occupation takings claim.

Wait, you say, how is this not a physical occupation? After all, the leases which tenants sign onto all condition their right to occupy the premises on the timely payment of rent. Yes, the owner has conditionally transferred a right to occupy (and thus also transferred the right to exclude from the owner to the tenant), but the key word here is "conditionally." Pay rent on time and you can remain. Don't, and permission revoked, and the owner has the right to exclude.

Read the entire Ninth Circuit opinion (its unpublished, and thus short) for the reason why the panel rejected this reasoning. Yes, it is the Yee v. City of Escondido theory (mis)read yet again:

We likewise conclude that the district court did not err by granting summary judgment in favor of Seattle. We agree with Seattle that the Supreme Court’s decision in Yee v. City of Escondido, 503 U.S. 519 (1992), controls here and forecloses the Landlords’ per se physical-taking claim. The Landlords argue under Cedar Point Nursery v. Hassid, 141 S. Ct. 2063 (2021), that, as applied, Seattle’s eviction restrictions constituted a physical taking. While the Landlords make some compelling points, Cedar Point Nursery does not support their claim.

Unlike in Cedar Point Nursery, where a state regulation required agricultural employers to grant entry onto their property to union organizers for up to three hours a day so that the organizers could solicit support for unionization, see 141 S. Ct. at 2069–70, Seattle’s eviction restrictions did not impose a physical occupation on the Landlords, see Yee, 503 U.S. at 527 (“The government effects a physical taking only where it requires the landowner to submit to the physical occupation of his land.”). Nor did Seattle’s restrictions compel the Landlords to use their property for a specific purpose. The Landlords here chose to use their property as residential rentals; the tenants’ occupancy was not imposed over the Landlords’ objection in the first instance. Cf. Yee, 503 U.S. at 528 (finding that the government had not “required any physical invasion of [the owners’] property” by the park owners’ existing tenants).

Slip op. at 5-6.

Is the distinction that the Ninth Circuit relies on really a distinction? True enough, the moratorium didn't force open the metaphorical gate to El Papel's property like California in Cedar Point. The property owners here invited the tenants to occupy, and Seattle simply required the owners to keep the gate open and prohibited the owner from getting a trespasser out. Is that really the score, that once you invite someone in, you can be required to house them indefinitely?

When someone's property is pressed into public service and commandeered for pandemic housing, they can't be made to shoulder the cost by themselves, can they?

Something tells us this isn't the end of this issue, for not all courts misread Yee (see here and here, for example).

El Papel, LLC v. City of Seattle, No. 22-35656 (9th Cir. Oct. 26, 2023) (memo.)

Links And Materials From "Inverse Condemnation & Paying for Disasters"

Yesterday, during the Annual Meeting of the Hawaii State Bar Association, we participated in a program sponsored by the Real Property and Financial Services Section, "Inverse Condemnation & Paying for Disasters."

As you can see above, we joined lawprofs Shelley Saxer and David Callies to share thoughts about inverse claims, and the difference between these property arguments and tort negligence claims.

Here are some of the key cases and materials which we mentioned (or should have):

• Lights Out In The Land Of No: The Practical Effects Of California's Wildfire Inverse Condemnation Doctrine
• Cal Supreme Court: Stop Saying Inverse Condemnation Is "Strict Liability"
• MR-GO, Katrina Flooding: Inverse Condemnation And Schlimmbesserung At The Federal Circuit
• Evaluating Emergency Takings: Flattening the Economic Curve, 29 Wm. & Mary Bill of Rights J. 1145 (2021)
• First Lawsuit Filed (Incl. Inverse Condemnation) For Maui Wildfire: Is California-Style Inverse Condemnation Coming?
• Our Drive-Time Conversation About Hawaii Inverse Condemnation And Wildfires
• Shelley Saxer, Paying for Disasters, 68 Kan. L. Rev. 413 (2020)
• Inverse Condemnation And Wildfires

To those of you who were able to join us -- mahalo!

CA10: Absence Of Restrictions On Land Uses Isn't A Due Process Property Right

In Van Sant & Co. v. Town of Calhan, No. 22-1190 (Oct. 13, 2023), the U.S. Court of Appeals for the Tenth Circuit considered the claim of the operator of a mobile home park who asserted a due process property right to instead use its property as a RV park. Here's why the court said no.

Van Sant was using its property as a mobile home park. It decided to use its land instead as a RV park. Turns out that the local municipality doesn't much care for RV parks -- or at least the way that Van Sant was going to use its property -- so the Town shifted from a regime that didn't regulate RV parks to a regime that prohibited or tightly controlled RV parks on certain lands (lands that looked an awful lot like Van Sant's). And to cap it off, the Town's new regulations treated the two other existing RV parks as nonconforming uses, allowing them to operate.

Van Sant sued, alleging the usual (takings, due process, and equal protection), and some unusual (Sherman Act) claims. The district court granted the Town summary judgment.

We'll let you review how the Tenth Circuit dealt with the Sherman Act claim yourself (short story: summary judgment affirmed). See slip op. at 26-38. Instead, we'll focus on the due process claim (Van Sant abandoned its takings claim by filing an amended complaint in the district court which removed the previously-alleged claim). Short due process story: summary judgment in the Town's favor affirmed.

The court's analysis focused on the primary question in these kind of cases: does the plaintiff possess a "property" right which it cannot be deprived of without (substantive) due process? The court held no. It rejected the owner's claim that the right to continue to use its property in the way it had been is some kind of fundamental right.

This question turned on whether the Town had discretion to deny the use:

This means Van Sant “must show that under the applicable law,” Calhan and its Board “had limited discretion” to adopt ordinances that placed limitations on, or effectively regulated, Van Sant’s ability to operate its land as an RV park. Id. “Otherwise, the city’s decisionmaking lacks sufficient substantive limitations to invoke due process guarantees.”

Slip op. at 30 (citations omitted).

The Town didn't have any discretion, argued Van Sant, because the Town had no regulations or restrictions on using land for an RV park. See slip op. at 41 (Van Sant argues that “Calhan did not have any discretion over Van Sant’s decision in 2015 to begin renting space to RVs because there simply were no procedures to follow and no restrictions in place.”). But wait, Van Sant wasn't actually using its land as an RV park when the Town adopted the anti-RV park restrictions, it intended to.

It isn't material that it wasn't actually making the use, Van Sant argued in response, what matters is that it could have because the Town "did 'not have formal zone districts' or 'a formal process for reviewing applications to develop property into an RV park.'" Id. It may be one thing to say that an owner doesn't have a fundamental right to use land when there's some discretionary restrictions on that use, and another thing to say that in the absence of regulation that an owner can't use its land in any way that isn't injurious to its neighbors.

The court rejected the argument:

In sum, Van Sant appears to be asserting that because Calhan did not have any RV park regulations in place prior to October 19, 2018, Van Sant had a fundamental right to both convert and operate its property as an RV park and to continue operating its property as an RV park without any future regulations imposed on it by Calhan.

Id.

No deal, the court concluded. There's no Colorado statute that recognizes such a property right, which is also not a product of the Colorado Constitution. Nor did Van Sant have a vested right to use its land as an RV park, because it never sought a building permit and thus could not have reasonably relied on that kind of governmental assurance. "We therefore agree with the district court that Van Sant has failed to establish that a fundamental right is at stake here." Slip op. at 43. 

Having concluded that no fundamental right was at stake, the court dropped the tiers-of-scrutiny analysis: "[t]hat means that we apply only rational basis review to Calhan's passage of Ordinance 2018-13." Slip op. at 43. And we don't have to tell you what that means, do we?

Van Sant & Co. v. Town of Calhan, No. 22-1190 (10th Cir. Oct. 13, 2023)

Fifth Circuit Kicks Down The SWAT Takings Door (And Boots The Issue Upstairs)

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

Recall that the U.S. District Court for the Eastern District of Texas concluded that the City of McKinney, Texas was liable for the taking of Vicki Baker's home, after city police officers destroyed a large part of it while apprehending a suspect who had taken refuge therein. The court awarded just compensation and the city appealed.

Now, the other shoe drops: in Baker v. City of McKinney, No. 22-40644 (Oct. 11, 2023), the U.S. Court of Appeals for the Fifth Circuit reversed, concluding that because the invasion was necessary and a justified use of the city's police powers, it does not owe compensation.

We've been down this path before, so we won't go over it in detail (recall that the Tenth Circuit reached the same conclusion and the subsequent cert petition was denied by the Supreme Court). Our thoughts about the issue are in the amicus brief we filed in that case, in which we argued that an invocation of police power or necessity isn't dispositive or outcome-determinative. 

The Fifth Circuit has now joined the Tenth:

We conclude that, as a matter of history and precedent, the Takings Clause does not require compensation for damaged or destroyed property when it was objectively necessary for officers to damage or destroy that property in an active emergency to prevent imminent harm to persons. Baker has maintained that the officers’ actions were precisely that: necessary, in light of an active emergency, to prevent imminent harm to the hostage child, to the officers who responded on the scene, and to others in her residential community. Accordingly, and despite our sympathy for Ms. Baker, on whom misfortune fell at no fault of her own, we REVERSE.

Slip op. at 2.

The Fifth Circuit takes a slightly more nuanced view, rejecting the city's invitation to hold that any substantial police power reason would be enough to avoid the obligation to provide compensation. Instead, "the mere fact that Baker's property has been damaged or destroyed pursuant to the City's police power cannot decide this case." Slip op. at 8. So the government isn't categorically exempt. (Silver linings and all that.)

But the opinion also concluded that the worm doesn't turn in the property owner's direction either: "[w]hat Baker needs, in other words, is historical or contemporary authority that involves facts closer to those at bar and where the petitioner succeeded under the Takings Clause." Slip op. at 11. And apparently, there is "historically oriented legal scholarship" that shows that the "'necessity' or 'emergency' privilege has existed in Takings Clause jurisprudence since the Founding." Slip op. at 12. [Barista's note: our own contribution to the legal scholarship was somehow overlooked by the court - the nerve!]

Read the court's journey through the history for more. See slip op. at 12-17.

The bottom line: if the invasion by Five-O was necessary, then no taking. And here, Baker acknowledges that "it was objectively necessary for officers to damage or destroy her property in an active emergency to prevent imminent harm to persons." Slip op. at 17.

But that's not the right question in these type of cases, is it? After all, the central question isn't necessity, but of cost spreading. The court acknowledged that the core vibe of takings is the Armstrong principle:

[T]he Supreme Court has often stated that “[t]he Fifth Amendment’s guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, 364 U.S. 40, 49 (1960), quoted in Tyler, 598 U.S. at 647. This statement’s relevance to Baker, who is faultless but must “alone” bear the burdens of a misfortune that might have befallen anyone, is manifest.

Slip op. at 18. In short, although it acknowledges that Baker alone is bearing the cost for a public good, the Fifth Circuit washes its hands of the most important question: is it just and fair that this is so? To the Fifth Circuit, history says yes.

And this leads to the opinion ending on what appears to be another silver lining, the Fifth Circuit seemingly inviting a cert petition asking what it views as the only court capable of making that call:

As a lower court, however, it is not for us to decide that fairness and justice trump historical precedent, particularly Supreme Court precedent, where it has long recognized a necessity exception that excludes those like Baker from the protection of the Fifth Amendment’s Takings Clause. Such a decision would be for the Supreme Court alone.

Id.

Will one be forthcoming? We sure wouldn't bet against it.

Baker v. City of McKinney, No. 22-40644 (5th Cir. Oct. 11, 2023)

Supreme Court Property Rights Round-Up

Here's what we're reading about the Supreme Court's property rights docket -- some good, some disappointing -- this day.

• Niina Farah, "Supreme Court flooding case could ripple across the energy sector" (E & E News / Energywire) - About the Devillier case (which we summarized here), in which we were quoted: "The Supreme Court decision to hear the Devillier case comes after a concerted effort in recent years to convince the court to address procedural maneuvers that have made it challenging for property owners to bring their claims to court, said Robert Thomas, director of property rights litigation at the Pacific Legal Foundation. The nonprofit is among the groups that has asked the court to address takings cases and has lent its support for the property owners in Devillier in a 'friend of the court' brief. 'There’s a lot of gamesmanship going on trying to avoid getting to the actual core question — is compensation owed for the take?' Thomas told E&E News. 'You will see local governments, and often the federal government, interposing these procedural defenses to move the chess pieces around.' This case is an example of how court procedure is being used to stymie damage claims from property owners, he added.
• Bob Egelko, "U.S. Supreme Court agrees to decide legality of fees charged to California homebuilders" (San Francisco Chronicle) - About the Sheetz case (which we summarized here), "Christopher Elmendorf, a UC Davis law professor who has written extensively about housing issues, said a ruling in Sheetz’s favor could also allow challenges to 'inclusionary zoning' rules in San Francisco and other communities, which require new developments to contain a certain percentage of affordable-housing units. That might encourage more housing construction in the short run, he said, but it probably wouldn’t have a major impact on the housing shortage in California.
• Suzannah Cavanaugh & Kathrun Brenzel, "Supreme Court didn't save landlords. now what?" (TheRealDeal) - About the Court's denial of one of the three petitions challenging New York's draconian amendments to its rent control law (there are two other cert petitions, both of which were relisted; see here and here).
• Andria Cheng, "Supreme Court Denies Challenge to New York's Rent Regulation Law" (CoStar News) - More on the rent control petition denial.

Let's hope there's more good property rights news from SCOTUS to report soon.

 

ALI-CLE's Eminent Domain & Land Valuation Litigation Conference (Feb 1-3, 2024, New Orleans): Why Attend? Here's Why.

Why is it, you ask, that the ALI-CLE Eminent Domain & Land Valuation Litigation Conference (scheduled next February 1-3, 2024, in New Orleans) is an event that seems to be growing in popularity and attendance. In recent years, we have standing room only in the Conference halls, and have sold out the hotel block. After all, this is a pretty niche area of law. So what gives?

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

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

I can personally attest to that one, having been welcomed to a Conference long ago by Toby Brigham, who although he was one of the Chairs of the event, made it a point to notice that I was a new attendee, and to introduce me around to the "old hands."

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

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

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

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

CA9: Property Owner Has Standing To Challenge Commercial Eviction Moratorium Under Contracts Clause

This is one of ours -- argued by our Pacific Legal Foundation colleague Kady Valois -- so we won't be offering any commentary.

But we just have to post the U.S. Court of Appeals' opinion in Iten v. County of Los Angeles, No. 22-55480 (Aug. 30, 2023), because it discusses two significant issues, and sets out a roadmap for how to successfully plead a Contracts Clause claim.

First, standing. The court held that a commercial property owner -- a retired auto mechanic who leased his premises to an auto repair shop -- has Article III standing to challenge the County's commercial eviction moratorium which prevented the owner from evicting the tenant when it stopped paying rent but did not vacate. The court distinguished the standing requirement of "demonstrating injury in fact" from the question of whether the plaintiff has actually been injured. The first is a pleading requirement and turns on the nature of the claim, while the latter is a factual question for the trier-of-fact. Slip op. at 10-12. That is an important distinction that many frequently forget. We've all been in cases where the merits question gets bootstrapped into a question of whether the plaintiff is injured.

Second, to see whether Iten met the pleading requirement, the opinion goes into the nature of a claim under the Contracts Clause, noting it "was the most litigated constitutional provision in the nineteenth century." Slip op. at 13. But as we know, the Contracts Clause later fell out of favor with the courts, and "[s]trict application of the Contracts Clause ended in the Minnesota Moratorium case." Slip op. at 15. The Ninth Circuit continued:

The modern approach to the Contract Clause now considers not only whether the law impairs the obligation of the contract, but asks how “substantial” that impairment is and whether the state law is an “appropriate” and “reasonable” use of state police power. See Sveen v. Melin, 138 S. Ct. 1815, 1821–22 (2018) (quoting Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 U.S. 400, 411–12 (1983)). Although, post-Blaisdell, a Contracts Clause claim analysis requires additional inquiries, the merits of a Contracts Clause claim has always started with whether or not there is a change in a law (an “obligation”) that has impaired the original agreement of the parties.

Id.

Next, the court noted that "mortgage moratoria were, from the beginning, at the heart of the Contracts Clause. A law affecting or changing the terms the parties previously agreed to is the quintessential example of what the Contracts Clause was designed to prohibit." Id. This means that Iten, who is prohibited from evicting his non-paying commercial tenant because the County's prohibition, has standing to challenge the County's (alleged) realignment of the agreement between him and the tenant.

The court rejected the district court's rationale that despite the legal prohibition, Iten might have tried to evict the nonpaying tenant. The moratorium requires nonpaying tenants who wish to invoke the ordinance's protection to inform an owner, but the tenant here did not. Thus, the district court reasoned, Iten could have evicted for nonpayment of rent. The Ninth Circuit had a different view:

To show injury and causation for standing purposes, Iten need not allege that he would have been able to evict his Tenant “but for” the Moratorium. Nor need he show that his Tenant qualifies for the affirmative defense provided by the Moratorium. Rather, Iten need only allege that the Moratorium imposed additional rights, remedies, conditions, or procedures that impair the obligations to which he and his Tenant had contracted. Iten has made that showing here. He has alleged that Los Angeles County changed the framework for his lease with his Tenant by creating an additional affirmative defense for the Tenant, enacting a year-long forbearance period for unpaid rent, prohibiting Iten from charging late fees or interest, and adding civil and criminal penalties beyond those previously provided under California landlord-tenant law. Furthermore, the value of a commercial property is often tied to the value of its leases. Iten alleged that the Moratorium “undercut the economic value and security of [his commercial leases].” Thus, so long as the Moratorium was in effect, the economic value of Iten’s property, as influenced by the value and strength of the leases of that property, was diminished, and “[a] specific, concrete, and particularized allegation of a reduction in the value of property owned by the plaintiff is sufficient to demonstrate injury-in-fact at the pleading stage.” Barnum Timber Co. v. EPA, 633 F.3d 894, 898 (9th Cir. 2011).

Slip op. at 17-18.

The Ninth Circuit also rejected the conclusion that Iten "would have prevailed" in a state court eviction action, instead holding that "it was improper to speculate how a California court would have responded to an eviction action brought by Iten." Slip op. at 19.

The essence of the Contracts Clause claim is that the owner "is protesting the fact that he even has to run the gauntlet of additional procedures that were not in place when the Tenant signed the lease." Slip op. at 20. The court cautioned against "conflat[ing] constitutional injury with contractual impairment," and set out a roadmap for how to plead these claims (at least in the Ninth Circuit):

For purposes of standing, Iten alleged facts sufficient to state a claim that he suffered an injury traceable to the Moratorium for purposes of standing: He alleged that he was a commercial landlord living in Los Angeles County; that both he and the Tenant believed that the Moratorium applied to their lease agreement; and that the Moratorium altered the terms of his contract with his Tenant. Iten alleged that the Moratorium limited the legal procedures he may take to evict his Tenant for nonpayment of rent; that it prevented him from charging late fees or interest, which his lease otherwise allows him to do; and that it imposed additional penalties that chilled his ability to test the viability of eviction. In sum, Iten, at least for purposes of filing a complaint, has alleged that the obligations of his contract had been “taken away or materially lessened.”

Slip op. at 24.

Our congratulations to our colleague Kady for the win!

Iten v. County of Los Angeles, No. 22-55480 (9th Cir. Aug. 30, 2023)

"Zoning is the most important local law you've never heard of" - Hawaii Zoning Atlas Published

Where you can build 1-4 family residences by right

The Hawaii Zoning Atlas project has announced publication of the Hawaii Zoning Atlas, an "interactive map [that] explores how restrictive zoning laws can make it difficult to build diverse, affordable housing."

The official announcement notes:

The map is based on an original dataset compiled by over 30 students [including some of our U.H. Law students!] and volunteers who combed nearly a thousand pages of regulations to extract key policy details, including whether housing units are legally allowed in an area and how many; restrictions on height, yards, and lot coverage; and parking requirements. All in all, more than 100 data points were collected for each zone in three counties–Honolulu, Maui, and Hawaiʻi. Kauaʻi will be available in a future release.

This is designed for people who are not land use insiders, to help understand how land use regulations restrict the availability of places to live. Click a link, check the boxes on the left for how you want to filter the data, and voila!, you see what is permitted, and where. It is a graphic visualization of one of major problems with Hawaii's byzantine system of land use regulations and restrictions. The image above is where 1-4 family residences may be built without seeking discretionary approvals --  a very limited area.

And that is what the Zoning Atlas is designed to illustrate. The media advisory includes this quote from an obscure law blogger:

Robert H. Thomas (Joseph T. Waldo Visiting Chair in Property Rights, William and Mary Law School, and Director of Property Rights Litigation, Pacific Legal Foundation)

"The Hawai‘i Zoning Atlas has made us aware that exclusionary zoning is one of the primary culprits in the affordable housing crisis—causing hardship for individuals, families, and employers across the state."

The project director, Trey Gordner, joined our U. Hawaii Law School Land Use class earlier this year, where he previewed for our students the project as well as the dynamics of zoning and land use regulations (from a non-lawyer's perspective).

This is part of a national project (the National Zoning Atlas), which describes itself as "a collaborative of researchers digitizing, demystifying, & democratizing ~30,000 U.S. zoning codes. It is housed at the Cornell University Legal Constructs Lab, led by Professor Sara Bronin, and has team members working on regional and statewide atlases around the country." In short, the atlases catalog and help us understand local land use on a big scale.

Trey said this:

"Zoning is the most important law you’ve never heard of,” said Trey Gordner, director of the Hawaiʻi Zoning Atlas, “By regulating what buildings can be built where, what they look like, and what they can be used for, zoning determines the shape of our communities, the size of our houses, the length of our commutes, and more. The Hawaiʻi Zoning Atlas brings these rules to light to help our community determine whether they are delivering the future we want."

Check it out and play around with the various layers. It will open your eyes. 

Owners' Counsel Toby Prince Brigham Scholarship - Applications Being Accepted

Two years ago, Owners' Counsel of America endowed a scholarship in the name of its founder, property rights advocate and trial lawyer Toby Prince Brigham (1934-2021). The scholarship is for a second- or third- year law student to attend the annual three-day ALI-CLE Eminent Domain and Land Valuation Litigation Conference (the upcoming Conference will be in New Orleans, Louisiana, February 1-3, 2024).

The Conference affords the Scholar an all-expenses-covered opportunity to meet and network with leading property rights and eminent domain lawyers from across the country, while also learning about property law and practice. 

Here's the official description from OCA:  

In honor of Toby’s legacy of professionalism and achievement, in 2021 OCA established the Toby Prince Brigham OCA Scholarship to pay for all expenses of a second or third year law student to attend the ALI-CLE Eminent Domain conference and associated OCA events held annually in January. This unique scholarship affords the student the opportunity to learn about the substantive law of eminent domain and property rights, while also meeting and networking with the leading lawyers in these practice areas from across the country. This is what the very first Toby Prince Brigham OCA scholar, Nina Sawaya, had to say about her experience:

“Thank you Owners’ Counsel of America for the opportunity to meet and learn from the nation’s leading eminent domain and property rights lawyers. While I gained significant knowledge of the substantive law, I also learned about the importance of character as a practitioner. The OCA members taught me that you can be a strong attorney for your client, while still maintaining respect for your opponent. Learning about Mr. Brigham’s commitment to inclusion inspired me to remain true to my core values, while achieving my professional goals. The entire experience was one I will never forget!”

If you are a law student with an interest in applying for this scholarship or know of someone who may be, please contact Leslie Fields, Executive Director of OCA at o[email protected] or 303-806-5155. Applications are due by October 3, 2023. 

More here, from OCA.

Toby Prince Brigham OCA Scholarship Brochure (2023)

Live The Dream! Teach Dirt Law In Hawaii: UH Law School Looking For Property & Land Use Lawprof

(Tip for applicants: understanding the symbology of the
Law School's logo will show you know the score.)

Here's your chance to teach Property and Land Use in what might be most interesting venue on Planet Earth for those subjects: the University of Hawaii School of Law has put out a call for applications for a tenured lawprof (along with six other openings in other subjects):

The University of Hawaiʻi at Mānoa, William S. Richardson School of Law seeks to fill up to seven tenured or tenure - track positions . For doctrinal faculty, we are seeking to fill positions in Constitutional Law (tenured or tenure - track) and Property /Land Use (tenured). We welcome candidates who, in addition to one of those two fields, have expertise in Administrative Law, Business and Commercial Law, Environmental Law, Family Law, Health Law, Intellectual Property, Labor and Employment Law, Native Hawaiian Law, and Pacific - Asian Legal Studies.

Here's the full description of all the openings with general information and a way to find out more.

Here's what a typical day at the office looks like.

We can report with first-hand knowledge that teaching these subjects at this law school is very good (we taught the Land Use course this past spring semester -  and we earned our JD here too many years ago to mention.

So if you are even thinking about it, now's the time: fire up that CV and "chance um" (as we say in the 808).

(Tip #2 for applicants: learning why this sign is important might be important.)

Hawai‘i Law Position Description - General (Aug. 2, 2023)

What If The Hawaii Governor's Cutting Of The Gordian Land Use/Environmental Knot Actually Works?

The two-plus years under the declared Co-19 emergency surely have given Hawaii's executive-branch officials a clear vision of how much easier they could get their agendas accomplished without all that pesky democracy.

Hawaii's Sweeping Emergency Management Act: Governor is the "Sole Judge"

Hawaii's Emergency Management Act gives state and county executives broad and nearly unreviewable authority to suspend a wide spectrum of the usual laws, regulations, and rules. As we wrote in Hoist The Yellow Flag and Spam® Up: The Separation of Powers Limitation on Hawaii's Emergency Authority, 43 U. Hawaii L. Rev. 71 (2020), Hawaii's Act confers among the nation's most muscular and sweeping powers. For example, the governor is the "sole judge of the existence of the danger, threat, or circumstances giving rise to a declaration of a state of emergency." The Act's one limitation -- the 60-day time limit on how long an emergency may be declared and acted upon without legislative action -- is, in reality, a paper tiger, as the courts have refused to meaningfully enforce it.

Build Baby Build: Governor Green's Emergency Housing Proclamation Sidelines Decades of Land Use and Environmental Regulations and Restrictions

And it appears that executive officials really dig these powers. As you may already know, in July -- just a couple of months after the Co-19 emergency was officially declared pau -- the Governor of Hawaii discovered a new emergency, and issued a Proclamation that the longstanding "shortfall of affordable housing" is an "emergency or disaster" as defined by the Act.

If it is an emergency, it surely has been on a very long fuse, and is primarily a self-inflicted crisis. As is widely reported (see, e.g., Jason Sorens, Zoned Out: How Housing Regulation Drives Young Americans Towards Socialism (Am Inst. for Econ. Rsh. July 24, 2023)), Hawaii is the most highly-restricted and regulated residential land in the nation (see Fig. 3):

We're Number One! We're Number One!

The costs of the current regulatory and environmental system in time, expense, and effort, is cited as a leading contributor to the fact that Hawaii is one of the most expensive housing markets in the country. As the Proclamation notes:

WHEREAS, this [housing] shortfall has never been adequately addressed, contributing to a 1,200% increase in home prices over the last 45 years, which is double the 600% growth in income over the same period[.]

Not at all good.

Pointing to these infamous "regulatory barriers" to building housing (and just about anything else), the Governor deployed his office's broad powers under the Act to suspend a slew of significant land use and environmental regulations, including the State environmental impact statement and reporting requirements, historic preservation restrictions, certain county home rule and zoning laws, civil service laws, collective bargaining with public worker unions, the "open meetings" requirements, the procurement code, the rezoning powers of the State Land Use Commission for certain parcels, school impact fees, and even the Emergency Management Act's own rulemaking requirements. The Proclamation establishes a Privy Council (the "Building Beyond Barriers Working Group" -- how appropriate, given Hawaii's royal history -- or perhaps you prefer "rule-by-junta") that can, according to this report, "block projects deemed to go too far outside the guardrails that would have been in place but for the proclamation." That's comforting. 

Acting under his dictatorial emergency powers (and we are not exaggerating when we say that the powers conferred by Hawaii's Act are truly "dictatorial" as we noted in this law review article), the Governor asserts this will "streamline processes for housing development, while ensuring respect for our iwi kūpuna and environment." To emphasize the so-let-it-be-written-so-let-it-be-done nature of this enterprise, the Proclamation even comes accompanied by its own set of Rules for how it is to be implemented (you know, just like a real law). 

What Others Are Saying

For a nuanced view -- by an analyst with no dog in the Hawaii hunt -- see zoning expert and author M. Nolan Gray, who writes at Bloomberg's City Lab that this "could provide a model for chief executives in housing-strapped states across the country." See M. Nolan Gray, Can Hawaii Solve Its Housing Emergency? (Bloomberg City Lab, July 31, 2023).

Other commentators are less sanguine. Andrew Walden writes that "Housing Emergency Designed to Fail" (Hawaii Free Press, July 31, 2023), arguing that these temporary measures can only work if they are permanent ("Because it is temporary, Green’s Proclamation ensures that too few projects will be approved to actually bring down the cost of housing. ... So when the legislature reconvenes you may be 100% certain that Green’s emergency orders will not be enshrined into law.").

Schadenfreude Alert

Now don't get us wrong: the Governor is absolutely right about Hawaii's oppressive system of regulations and restrictions on building housing that ends up restricting supply, and massively driving up costs. So although we are patently against the routine use of extraordinary emergency powers to accomplish things that should be done through the normal channels of democracy, our long experience playing the land use game in the 808 can't help but turn us into a keen observer of this experiment. We also can't help but being a bit bemused by all of this gnashing of teeth by all involved. As noted above this is a self-inflicted wound and the result of longstanding voting patterns; on a very basic level you get what you vote for, and the voters of Hawaii must either want to restrict the supply of housing to keep things exclusive and preserved, or they are deep-down okay with paying a lot for their homes or living in three-generation households.

And now, instead of doing the right thing and making fundamental needed reform and convincing the voters that now is the time to realize that the system as it stands doesn't work, we get the lazy shortcut. 

Thus, although we are no longer in the day-to-day dirt law and land use game in Hawaii, we're going to be watching this closely.

Fear of Success?

Of course, the usual suspects are already voicing the predictable objections that this will result in cowboy land use (our description, not theirs) and environmental degradation, and are already mentioning possible legal challenges. See, e.g., Stewart Yerton, Can An Emergency Proclamation Solve Hawaii's Housing Crisis? 'That's the Million Dollar Question'' (Civil Beat, July 30, 2023).

Other than the Governor's sweeping repudiation of democratic processes, what is spurring the substantive objections to this? You might think that this is just one more example of NIMBYism and "drawbridge protectionism" (or maybe just a naked "I got mine" and the hell with those who don't -- those vibes play extraordinarily well in the 808, in courts and in the public).

But we sense that a more fundamental fear is driving objections. This may well be the closest we'll ever get to a real-time experiment in whether Hawaii's byzantine land use and environmental regulations -- touted for decades as absolutely necessary to "preserve paradise" -- are worth their massive costs. We've been told that the current system is the only thing standing between us and foul air, water evaporating, beaches disappearing, and historical and cultural resources being despoiled.

What if, when this experiment winds down (whenever that is, since by law an emergency can last a maximum of 60 days, even though this time limit is illusory, because the emergency can be renewed indefinitely), there are 50,000 new residential units built out and the the environmental sky has not fallen? If that's the case, what more empirical evidence does the legislature need that the touted Hawaii system of restrictions, regulations, and the precautionary principle simply are unnecessary?

Or does Hawaii just go back to business as usual? 

The Hole Card

So now we shall see. We predict a lawsuit will soon be filed to challenge this, because Hawaii's courts are the objectors' hole card. Look for a claim under the Hawaii Constitution to lead the charge, because the Hawaii Supreme Court is the final arbiter of the state constitution and a ruling from that court would be armored up against revision by the other branches of government. There's a long judicial history in Hawaii of doing just that.

Hawaii's courts will be the preferred forum: lax standing rules (nearly anyone can be a plaintiff), a Supreme Court that historically has been open to such claims (as a study published in the University of Hawaii Law Review in 2011 reported, environmental plaintiffs enjoy an enviable record of success in the Hawaii Supreme Court, which during the years studied (1993-2010) found in favor of such groups "approximately eighty-two percent of the time, sixty-five percent of which reversed the Intermediate Court of Appeals."), and a judicial ruling that would be immune from the Governor's or the Legislature's tampering. That's the play.

With two of the current bench of five Hawaii Supreme Court Justices in the process of being replaced, does this make the game even more interesting, and the moving pieces more in motion? You bet.

So stay tuned and follow along with us.

That sound you hear right now is the late-night typing of someone drafting up a state-court complaint.

Office of the Governor, State of Hawaii, Proclamation Related to Housing (July 17, 2023)

New Article - "Necessity Exceptions to Takings" (Shelley Ross Saxer)

Worth checking out: a new article from Pepperdine Law School's Shelley Ross Saxer, published in the University of Hawaii Law Review, "Necessity Exceptions to Takings," 44 U. Haw. L. Rev. 60 (2022). [Disclosure: as noted in the author's note, we reviewed an earlier draft of the piece and provided some thoughts.]

Here's the Abstract:

The doctrine of necessity has strong roots in the common law of tort and property going back hundreds of years. In the United States the doctrine has been applied in various situations to negate judicial review of constitutional challenges to government action, most recently in some of the wildfire and flood claims resulting from disasters. But now, the states’ responses to the COVID-19 pandemic have brought one of these necessity doctrines—the public health necessity relying on Jacobson v. Massachusetts—to the forefront as courts across the country review constitutional challenges to state public health measures. With such intense review of Jacobson’s public health necessity in a short timeframe, it appears that the courts, including the Supreme Court, are recognizing that common law emergency exceptions cannot be applied to prevent constitutional review. This development supports the goal of this Article, which is to discourage the use of the necessity doctrine to bypass constitutional scrutiny of asserted rights, particularly as to takings claims under the Fifth Amendment. This Article examines the historical development of the diverse categorical exceptions to takings claims under the Fifth and Fourteenth Amendments and addresses the continued viability of these exceptions following the decision in Pennsylvania Coal v. Mahon. After reviewing four categories of necessity exceptions that include: 1) the doctrine of destruction (general, military, and law enforcement); 2) the public health exception; 3) the nuisance and background principles of property law exception; and 4) the police power exception, this Article concludes that the only doctrinally acceptable categorical defenses to a regulatory taking are the nuisance and background principles of property law exceptions. Nuisance and background principles of state law will determine whether the property owner has a property interest subject to a government taking. If the property owner never had a right to use their property in a manner that constitutes a nuisance or interferes with a public resource, it cannot be taken and does not deserve compensation. Government actions that constitute a taking, but benefit the public as a whole whether by conferring a benefit or preventing a harm, should not burden individual property owners when, under the Armstrong principle, in all fairness and justice, we the public should share in paying for the benefits received.

Download the piece on SSRN here.

Tex App: Nollan/Dolan Challenge To Annexation Fees Not Ripe: You Have To Apply For Annexation To Find Out What The Fee Will Be

The city told an owner whose three parcels were outside of the city's jurisdiction that if it wanted the city's permission to replat into 74 parcels, it would need city water and sewer service to each of the proposed lots.

So the owner asked to connect to the city's water and sewer system (deliberately overbuilt to account for future users, apparently), and in response, the city told the developer that it would have to do two things. First, it would have to contribute to the cost of building the system by purchasing water/sewer chits (our term). When the system was built, the city anticipated future connections and created a chit system by which future connections would help pay for the cost of construction. Second, in order to purchase these chits, the buyer's property must be included within the city's jurisdiction. And that meant a voluntary annexation. Annexation does not come free, because a city ordinance set the price tag of annexation between $220k - $350k.

The developer was ok with buying the chits, but not with paying the annexation fees, and sued the city. It argued it had a right to purchase the chits, and the city's ordinance worked a taking under the Texas Constitution because the city had not shown an essential nexus and proportionality between the fee and the annexation exaction (apparently, the unconstitutional conditions test is the same under Texas' constitutional law as the Nollan/Dolan/Koontz federal standards).

In Consolidated Towne East Holdings, LLC v. City of Lardeo, No. 04-22-00130-CV (July 12, 2023), the Texas Court of Appeals held that Consolidated's takings challenge was not ripe. The costs were not yet "authoritatively set." Slip op. at 10. You have to apply for annexation to find out what the actual fee will be:

Consolidated’s takings claim presents an unusual challenge. Unlike in Nollan, Dolan, and Stafford Estates, in which the conditions required for the permits and plats were authoritatively determined by the government entity wishing to impose the exaction, here, the conditions the City requires for annexation and the annexation fees have not been finally determined. See Dolan, 512 U.S. at 379–83 (permit conditioned on dedication of property for use as public greenway and path); Nollan, 483 U.S. at 828–29 (permit conditioned on creation of public easement); Stafford Estates, 135 S.W.3d at 623–24 (plats conditioned on rebuilding road with concrete). The City argues that, by failing to apply for annexation, Consolidated has deprived the City of an ability to consider and rule on actual costs related to annexation. The result, according to the City, is that “actual or roughly proportional costs cannot be established,” and it asserts Consolidated is seeking an advisory opinion about hypothetical costs.

Slip op. at 9.

The court also rejected the owner's argument that the annexation fees (whatever they might be) have no nexus to water and sewer hook up, because the nexus has already been accounted for in the price of a hook-up chit. Not so, held the court, because the annexation fee covers other things: "While annexation is required to obtain [chits], the purpose of annexation, according to the City, is not coextensive with the purpose of [chits], and, therefore, the cost to annex addresses different government interests than the cost for [chits]." Id.

So let's see if we get this right: you have to apply for annexation so the city can determine how much it is going to charge for annexation? Yes. According to the city:

Although the costs may vary from year to year, they are applied using calculations based on the level of development selected by the developer and the development plans. The calculations apply to all annexation applicants based on, among other things, lot size, number of lots, and whether the property will be for residential or commercial use.

Slip op. at 10.

That was enough for the court. No final decision applying the rule to the owner's use and development plans, so any takings challenge is premature:

We stress that Consolidated’s takings claim complains principally about annexation costs. In other words, Consolidated does not complain about annexation alone. In fact, its attorney stated at the hearing on the parties’ motions for summary judgment: “There is no dispute that the City certainly can annex property within its extraterritorial jurisdiction within its discretion. [Consolidated] has no objection to that. [Consolidated] has no objection to being annexed by the City in that capacity.” However, because we do not know the cost to annex, we cannot perform the fact-specific, rough proportionality inquiry required by Nollan and Dolan.

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

Consolidated Towne East Holdings, LLC v. City of Laredo, No. 04-22-00130-CV (Tex. Ct. App. July 12, 2023)

New Article: Application of the Penn Central Test

Here's a recently-published article (ALI-CLE's The Practical Real Estate Lawyer) on a subject that we know you will want to read about: Jon Houghton, Hertha Lund, and Ben Stormes, Application of the Penn Central Test, 7 Prac. Real Estate Lawyer 7 (May 2023).

Check it out. It's short, practical (naturally), and worth your time.

Jon Houghton, Hertha Lund, and Ben Stormes, Application of the Penn Central Test, Prac. Real Estate Lawyer...

Aug 4, 2023: "The 100th Anniversary of Pennsylvania Coal v. Mahon: How the Takings Clause Became the Primary Check on Government Power" (ABA Annual Meeting, Denver)

The Mahon Property

Join us on Friday, August 4, 2023 (10:30-11:30am, MT) in Denver at the ABA Annual Meeting for our CLE session on "The 100th Anniversary of Pennsylvania Coal v. Mahon: How the Takings Clause Became the Primary Check on Government Power When SCOTUS Abandoned Review Under the Due Process and Contracts Clauses During the New Deal."

The program description:

The Takings Clause and 100 years of the Pennsylvania Coal v. Mahon doctrine have become the primary check on governmental power that the Due Process and Contracts Clause used to serve, before the Supreme Court finally and formally abandoned judicial review under those doctrines during the New Deal. Mahon transcended its primary relevance as to compensation for the taking of private property to become the fundamental means by which the Rule of Law determines of the individual’s relation with the government.

This session will survey the evolution of takings law and assess its impact on federal, state and local government authority, including not only the limits of that power over private property, but how the law as created by Mahon reconciles the essential issue of an individual’s private rights as they relate to the government’s exercise of authority in the public interest. This ambitious session will predict where these trends are taking us and what constitutional, legislative, and executive initiatives should be considered.

Details here.

This is another part of our continuing series on Mahon's 100th anniversary. And there will be more, so stay tuned.

Cal Ct App: Prohibition On Short-Term Rentals Might Have A Commerce Clause Problem

The voters of South Lake Tahoe, California, adopted an ordinance that forbade the city from issuing short-term rental permits for properties in residential zones unless the owner was a permanent resident of the city, and declared that all short-term rental permits would expire three years later. The trial court granted the city summary judgment on all claims raised by an association of property owners who rented short-term. 

In South Lake Tahoe Property Owners Group v. City of South Lake Tahoe, No. C093603 (June 20, 2023), the California Court of Appeal mostly agreed, holding that the owners' vested rights and state law preemption claims did not survive. But the court disagreed with the trial court's dismissal of a (dormant) Commerce Clause challenge to the residency component. As noted in this recent Fifth Circuit decision, local ordinances that discriminate between residents and non-residents are (or at least could be) too burdensome of the right to interstate travel as a durational residency requirement. Here's the resident exception:

Despite its ban on vacation home rentals in residential zones, Measure T allows permanent residents to let their dwellings up to a total of 30 days per year, subject to obtaining a permit. For purposes of the exception, a permanent resident is a person who lives in his or her home a majority of the year and claims a homeowner’s property tax exemption under article XIII, section 3, subdivision (k) of the California Constitution.

Slip op. at 17.

The court concluded that the "resident owner exception discriminates on its face against interstate commerce" because it "unlawfully requires 'an out-of-state firm 'to become a resident in order to compete on equal terms.'" Slip op. at 26 (citations omitted). By foreclosing non-resident owners from participating in the city's short-term rental market, the ordinance benefits residents "based solely" on an owner's residency status:

Because Measure T’s permanent resident exception facially discriminates against interstate commerce, it is per se invalid unless the City can justify the discrimination by showing that the resident exception ‘ “advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.” ’

Slip op. at 33 (citations omitted).

South Lake Tahoe Property Owners Group v. City of South Lake Tahoe, No. C093603 (Cal. Ct. App. June 20, 202...

Chump Alert! Developer's Claim That City Can Be Held To Its Contract Limiting Exactions Goes About As Well As You'd Expect

We're not going to dwell all that much on the California Court of Appeal's recent opinion in Discovery Builders, Inc. v. City of Oakland, No. A164315 (June 22, 2023), mostly because it seems entirely predictable.

The developer thought it had an agreement with the city to pay certain fees (dare we say "exactions") the city required in order to approve and provide what the court calls "project oversight." The contract "provided that the fees set forth in the agreement satisfied 'all of the Developer's obligations for fees due to the City for the Project.'" Slip op. at 1. You know where this is headed, don't you?

That's right, eleven years later while the project was still underway, the city adopted new ordinances imposing new impact fees. When the developer sought additional building permits ... no permit without paying the additional exactions. The trial court thought the contract took care of that issue, and ordered that the city could not impose any new fees beyond what it had agreed to impose.

The court of appeal made short work of that, and held (as you probably predicted) that the city's agreement was pretty worthless because the new fees were a valid exercise of police power, and "the government may not contract away its right to exercise the police power in the future." Slip op. at 12. Against public policy, etc etc. You know the vibe.

"We trusted you," and "we had a deal," don't go very far when it comes down it it, and anyone who thinks they can actually hold the government to what it agrees to has a reckoning coming if the government chooses not to honor its agreement.  As Chief Justice Roberts noted in a different context: what chumps!

We're not suggesting that the developer here was in fact a chump. We feel for you -- you should be able to trust the government. But alas, no, the courts are just fine with treating those who rely on the government's promises like suckers for believing it.

Anyway, this one can't be too much of a surprise.

Discovery Builders, Inc. v. City of Oakland, No. A164315 (Cal. Ct. App. June 22, 2023)

Nectow Is Meaningless Because It "relies on pre-Lochner administrative review jurisprudence"

One from the Louisiana Court of Appeal, 3000-3022 St. Claude Avenue, LLC v. City of New Orleans, No. 2022-CA-0813 (June 22, 2023) demonstrating that the standard of judicial review for zoning matters (rational basis) is pretty powerful.

The owner wanted to develop its New Orleans property, but first needed a zoning amendment from residential to commercial, followed by a conditional use permit for its proposed use. The city denied the request. After much procedural back-and-forth, including a trip to the court of appeal to resolve, the case was sent back to the city council to state the basis for the denial. The council held a public meeting at which it denied the rezoning, and declined to state more, including the reasons why.

So back to court the owner went. The trial court thought it had been clear enough: you were supposed to say why you denied the rezoning. Hearing nothing satisfactory from the city in response, the trial court held that the denial was arbitrary and capricious, and sent the case back to the city council with an order that it approve the zoning change. Next stop, the court of appeal.

The city asserted this was wrong for two reasons. First, making us state the reasons why we denied the rezoning effectively shifts the burden from a challenger showing that what we did was arbitrary and capricious, to the city showing that it wasn't. Next, the city argued that the owner hadn't met its burden to show that the rezoning denial was arbitrary and capricious because it didn't overcome the rational basis standard of review.

The court of appeal accepted both arguments. A "zoning decision by the City Council is not invalid merely because the City Council did not include an explanation of its decision." Slip op. at 9. These things are entitled to a presumption that they are valid, and it's up to you, challenger, to prove why denial of rezoning is arbitrary and capricious. It isn't the government's duty to say why it does something. See slip op. at 12 ("The trial court’s October 12, 2022 judgment and Reasons for Judgment do not demonstrate a finding that the LLC established an arbitrary and unreasonable exercise of legislative authority so as to rebut the presumption of validity attached to the City Council’s decision and shift the burden of proof to the City Council. This was error for the trial court to do so."). 

Besides, it really doesn't matter because rational basis review is really conceivable basis - what the city might say about why it denied the rezoning doesn't matter as long as one reasonable government official might think it is related to the public's health, safety, welfare, or morals. Slip op. at 15 ("It is sufficient that the municipal council could reasonably have had such considerations in mind.").

What about Nectow v. City of Cambridge, 277 U.S. 183 (1928), where the very same U.S. Supreme Court that had a couple of years earlier upheld zoning against a facial constitutional challenge held that as-applied to a particular parcel, Cambridge's residential designation was arbitrary and capricious? The Louisiana court discounted Nectow, noting only in a footnote that "[b]ecause Nectow v. City of Cambridge, 277 U.S. 183, 48 S.Ct. 447, 72 L.Ed. 842 (1928) relies on pre-Lochner administrative review jurisprudence, we do not find it persuasive in the case sub judice."). Slip op. at 16 n.3. Lacking proof that the property here is "completely unsuited" for residential development in accordance with its current zoning, there's nothing for a court to do. 

It doesn't have to be this way, as the U.S. Court of Appeals for the Fifth Circuit recently held. Facts seem like they should matter.

Finally, the court rejected the takings claim:

The City Council received information regarding the ability of the Property to generate income in its current zoning because the structures present on the rear residential portion have previously served as residential rentals, so this refutes the LLC’s contention that the current designation constitutes a taking of the LLC’s property.

Slip op. at 21.

This portion of the court's opinion is pretty incoherent as it seems to apply a due process analysis to the takings question. See, e.g., slip op. at 20-12 (analyzing the possible reasons why the city council denied the rezoning, and why residential uses are preferred by neighbors). We'd appreciate it if anyone can explain this part of the opinion to us in a way that makes some sense.

3000-3032 St. Claude Avenue, LLC v. City of New Orleans, No. 2022-CA-0813 (La. App. June 22, 2023)

CA5 Makes Short Work Argument That Asserting A Rational Basis For A Short-Term Rental Ban Is Enough To Secure Pleadings Dismissal Of Arbitrary And Capricious Challenge

In this very short (but apparently published) opinion, the U.S. Court of Appeals held that it was not right to dismiss a claim on the pleadings and that factual development is warranted, even where the complaint alleges that a municipal land use ordinance is arbitrary and capricious, and the city claims it has a rational basis for the ordinance.

And when we say "short," we mean it. Here's the entirety of the opinion:

Plaintiffs here appeal the Rule 12(b)(6) dismissal of their complaint alleging that the City of New Braunfels’s zoning regulation banning short-term rentals of residential properties in certain areas of the city is unconstitutional. The district court ordered dismissal by approving a few conclusory paragraphs in the magistrate judge's recommendation. This court’s relevant case law, however, indicates that some factual development may often occur in these cases, and that summary judgment may often follow. See, e.g., Mahone v. Addicks Util. Dist., 836 F.2d 921, 935–37 (5th Cir. 1988). We make no prediction on the future course of this case, but based on the complaint’s well-pled allegations, plaintiffs are entitled to engage in discovery in an attempt to surmount the currently high bar for challenging local zoning ordinances under the Constitution.

VACATED and REMANDED.

One judge dissented, but didn't file an opinion.

[Before we go on, this disclosure: our law firm filed this amici brief in support of the property owners.]

This is a substantive due process challenge (yes, you read that right) to the city's ban on short-term rentals in residential areas. The district court, adopted the recommendation of the magistrate who as noted above, dismissed because "the Court need not use its imagination to conceive of the way zoning ordinances preserve the nature of a city center or understand a community member's concerns; these are scenarios that already exist." Recommendation at 14. Yes, it is arbitrary to draw a line between short and longer term rentals, but "[t]his complaint is irrelevant under rational basis review because municipalities must draw the line somewhere." Id. at 15. 

The Fifth Circuit made short work of that, concluded that some facts may be relevant to the question, and that the plaintiffs are entitled to have their day in court. Or at least engage in some discovery, Texas style.

If only more courts would do this at the pleadings stage. Instead, in land use and constitutional property cases, courts often act as gatekeepers by dismissing cases under Rule 12(b) if they deem pleadings not to have a likelihood of success on the merits, or by applying an overly-deferential standard of review, effectively shielding these type of cases from juries or other finders-of-fact.

Marfil v. City of New Braunfels, No. 22-50908 (5th Cir. June 16, 2023)

Texas Supreme Court: We Want To Resolve Whether Short-Term Renting Property A Natural Right, Just Not In This Case

In this order, the Texas Supreme Court declined to review a case we've been following, in which the court of appeals held that Grapevine's total ban on short-term renting of property -- banning even owners who had been doing so for a while -- might be a taking. The court held that even though the owners did not possess a classic vested right to continue using their properties to rent on a short-term basis, they owned their properties and that was enough. Property ownership comes with the "fundamental" right to rent it out and there's no need to show more, such as a vested right under state law. More details on the city's ban and the court's reasoning here.

The city sought discretionary review and somewhat unusually, the property owners agreed that this is an important issue worthy of the Supreme Court's review.

But even with everyone agreeing on that point, the Supreme Court passed. The court didn't offer any reasons for the denial 

Justices Young and Blacklock concurred separately to explain their reasoning. Agreeing that the "questions presented in this petition is of increasing and demonstrable importance[,]" and "this Court needs to weigh in on the heady constitutional issues at stake[,]" and that they both "tend to agree" with the parties and amici that the issue is teed up, they "nevertheless concur in the denial of the petition for review."

Why? Vehicle problems. Some of the usual administrative thicket to navigate. Maybe a future case will be simpler (in this case, the owners are challenging a single city ordinance, but in order to resolve the case, Justice Young noted that the court would be required to interpret a separate ordinance as well). And, somewhat oddly, the concurring opinion seems to invite the city to "adopt new regulatory measures if it deems necessary to do so." 

So let's wait, which might let "other lower courts ... opine on the issue."

Part of the chief appeal of the parties’ joint request that we take this case is that the issue is prevalent and important. I believe them. If that premise is right, then plenty of cases will come. If they do not, then today’s perceived importance and urgency will have turned out to be illusory. Either way, our State will be better served by a measure of patience from this Court, as frustrating as it may be to us and, even more, to the parties to this case. I accordingly concur in the denial of the petition for review.

Concurring op. at 5.

And hint for you advocates: don't forget to include analysis under the Texas Constitution (a thought Justice Young has expressed before).

So stay tuned. This one isn't likely over.

City of Grapevine v. Muns, No. 22-0044 (Tex. Jun 16, 2023) (Young, J., and Blacklock, J., concurring in the...

New Takings Ripeness Cert Petition (Ours): Knowing The Permissible Uses "to a reasonable degree of certainty" Is All You Need For A Claim To Be Ripe

Here's the cert petition, filed last week, in a case we've posted about. See here (Ninth Circuit arguments) and here (en banc petition).

The Ninth Circuit affirmed dismissal of a takings claim because (it held) the claim isn't ripe. The government hasn't made up its mind, and just might allow the owners to make some use of their residentially-zoned land (even though the property is also subject to an overlay zone that expressly prohibits residential development). More background here. 

This is one of ours, so we're not going to be saying too much more about it. The petition also lays out the situation.

Here are the Questions Presented:

Randy Ralston and Linda Mendiola (Ralstons) wish to build a retirement home on their residentially-zoned land in San Mateo County, California. However, their property sits entirely within an overlay zone, the Montecito Riparian Corridor (Corridor), which categorically bans residential development. The County nonetheless instructs landowners who wish to build a home to submit their “intention” to the Community Development (Planning) Director and County Counsel, who must undertake a “takings analysis” to decide whether to “override” the Corridor’s absolute ban to prevent a taking. When the Ralstons followed this procedure, the Planning Director and County Counsel responded that there was no justification “to override the Local Coastal Plan limitations on development within wetland and riparian areas in order to accommodate a reasonable economic use.” No procedure exists to challenge this decision. In short, the answer was an unambiguous and unappealable “no.” The Ninth Circuit held that the Planning Director and County Counsel’s response, though they were speaking for the County, was “informal,” and that the Ralstons’ takings claim is ripe only if they submit—and the County formally denies—a Coastal Development Permit application.

The questions presented are:

1. Is a takings claim ripe when the government establishes a mandatory process requiring property owners to ask whether any development on their land is possible, and responds with a definitive and unappealable denial?

2. Are takings complaints subject to a higher pleading standard than other civil rights complaints?

Stay tuned.

Petition for Writ of Certiorari, Ralston v. County of San Mateo, No. ____ (U.S. June 16, 2023)

Join Us August 9, 2023: ALI-CLE's "How Did Property Rights Fare at the Supreme Court? What Happened in the 2022 Term and What's Next"

On Wednesday, August 9, 2023 at 1:00 - 2:00 p.m. (Eastern Time), please join us for ALI-CLE's web program, "How Did Property Rights Fare at the Supreme Court? What Happened in the 2022 Term and What's Next."

Here's the course description:

This has been a blockbuster U.S. Supreme Court term for property law, with the Court deciding three major property cases: Tyler v. Hennepin County (government’s keeping the excess value when seizing and selling a home to satisfy a property tax debt is a taking), Wilkins v. United States (is the federal Quiet Title Act’s statute of limitations a jurisdictional bar?), and Sackett v. EPA (the scope of Clean Water Act wetlands jurisdiction). To gain a better understanding these opinions, the current state of takings and property law, and what these cases mean for your practice, join a distinguished panel of experts for this one-hour webcast. The faculty will also explore what these decisions mean for the future and what steps lawyers can take to incorporate these decisions into their practices.

Among the things we'll be analyzing and discussing:

• What happened in each case and how the Court ruled
• The practical consequences of the decisions
• What new rules practitioners must understand
• What Sackett means for the efforts to define “Waters of the United States”
• How courts will treat the question of “what is the property” in takings and eminent domain litigation
• How you can avoid statute of limitations problems
• Where the Supreme Court might be going next and what issues remain open

I'll be moderating, and joining me will be takings and property experts lawprof Emilio Longoria, and Sophia Holley (Keating Muething & Klekamp).

We will also have a preview of the 2024 Eminent Domain and Land Valuation Litigation Conference, February 1-3, 2024, New Orleans.

Come, join us. The format allows for a lot of questions, interaction, and open discussion. As usual, there are group discounts.

Tuesday Round-Up: Sackett, Tyler, Defending Zoning, Canada Property Rights ... And More

Here's what we're reading this Tuesday:

• Tiffany Lashmet's Ag Law in the Field podcast: "Episode #155: Jesse Richardson and Anthony Schutz (Sackett v. EPA)"
• Lawprof Ilya Somin, Brennan Center for Justice: "Supreme Court Strengthens Federal Protection for Property Rights"
• Also from Prof Somin, Volokh Conspiracy: "A Flawed Attempt at a Libertarian Defense of Exclusionary Zoning"
• Here's the piece Prof Somin is responding to - Robert Poole, "A Brief History of Single-Family Zoning"
• Professor Malcolm Lavoie, SSRN, "Property Rights, Takings, and the Rule of Law: Assessing Annapolis Group v. Halifax Regional Municipality" (assessing the Supreme Court of Canada's latest ruling on property rights)
• Note, "The Contract Clause: Reawakened in the Age of COVID-19," 136 Harv. L. Rev. 2130 (2023)
• Lawprof Ilan Wurman, "Reconstructing Reconstruction-Era Rights," 109 Va. L. Rev. 885 (2023)

Worth checking out.

ICYMI: "Property Rights Hat-Trick: Breaking Down PLF's Supreme Court Victories" (vid)

Missed our law firm colleagues Jeff McCoy, Damien Schiff, and Christina Martin when they were live, talking about their SCOTUS wins in Wilkins v. United States (is the statute of limitations in federal Quiet Title Act cases a jurisdictional bar?), Sackett v. E.P.A. (scope of Clean Water Act wetlands jurisdiction), and Tyler v. Hennepin County (government’s keeping the excess value when seizing and selling a home to satisfy a property tax debt is a taking)?

We recorded it, so you can watch and listen at your leisure.

This is more than just a victory lap, the advocates offer their thoughts on the implications of the wins, and what might be next.

Bon appétit.

California Supreme Court Reviewing The Murderer's Creek Inverse Case

Check out this now-under-consideration Petition for Review, which asks the California Supreme Court to take up a case involving Murderers Creek, in Pleasant Hill, California. (Now there's a jarring juxtaposition for you.)

The case started off as a "routine inverse condemnation case." Pet. at 2. When Murderers Creek flooded, it damaged the plaintiffs' land. The County, the plaintiffs allege, didn't maintain a 40-year old concrete spillway which is part of a drainage system the County required a private developer to install in the 1970s as a condition of subdivision. The County never actually took over the drainage system, but it did accept the dedication "for recording only."

The plaintiffs said this should have been enough to establish a claim for inverse against the County: it has been a longstanding rule in California that drainage infrastructure that diverts surface waters onto private property triggers inverse liability even if privately constructed, when the infrastructure was approved or accepted by the government. Relying on a 1963 inverse condemnation case that has been a pillar of California inverse doctrine, the plaintiffs argued that public entities are liable for inverse when public drainage improvements collect and divert surface water out of its natural drainage channels onto private property. And the government can't avoid liability by using the subdivision approval power to force private property owners to construct the public drainage improvements that cause the diversion.

But in this opinion, the Court of Appeal concluded that this leading case - and presumably about a dozen other case that had followed it over the years had been "implicitly overruled" 30 years ago in another case. Which means that unless the County had unequivocally and unconditionally accepted the dedication of the infrastructure back in the 1970s, flooding it caused wasn't the County's problem.

Hang on. You mean the County could require a developer build and dedicate the flood control infrastructure to serve public drainage needs as a condition of securing subdivision approval, but the County also has the choice of ambiguously accepting the dedication and thereby avoids any obligation for inverse? That sounds a lot like that old law maxim against having your cake and eating it too, doesn't it?

Well, that's what the plaintiffs thought too. So they submitted the petition asking the California Supreme Court to take a look. Here are the Issues Presented:

1. Did this Court, in Locklin v. City of Lafayette (1994) 7 Cal.4th 327 (Locklin), “implicitly overrule” Frustuck v. City of Fairfax (1963) 212 Cal.App.2d 345 (Frustuck), one of California’s leading inverse condemnation cases, without citing Frustuck and without addressing either of the two legal issues that Frustuck decided?

2. Does Locklin and/or the Subdivision Map Act (Gov. Code, § 66410 et seq.) establish a procedure whereby respondent County of Contra Costa (the “County”) could compel a private property owner/developer to install drainage improvements on his property to receive surface water diverted from its natural drainage channels and convey that water across his property to Murderer’s Creek (a “natural watercourse”), and also compel him to dedicate irrevocable public drainage easements over those improvements “to the County for public use,” but then allow the County to avoid any obligation to maintain either the improvements or the public drainage easements by accepting the easement dedications “for recording only”?

3. Did the Court of Appeal improperly adjudicate that the County did not enter into a contract to maintain the storm drainage improvements that it required a developer to install on private property to serve two of the County’s off-subdivision storm drainage needs, despite Petitioners’ evidence that the County did enter into such a contract?

4. Did the Court of Appeal misapply the Locklin/Van Alstyne “reasonableness analysis” by adjudicating, as matters of law, that Respondents’ joint management of the Murderer’s Creek watershed (a) did not incorporate the Creek into the public drainage system, and (b) is not placing an “unreasonable” (disproportionate) burden on the downstream riparian property owners?

Pet. at 1-2.

If left unreviewed, the court of appeal decision seems like a pretty dramatic expansion of government power and reduction of private property rights. It alone is review-worthy in our thinking for its rationale that a case can be "implicitly overruled" merely by silence (the 1994 decision which the court of appeal points to never mentions the case it is overruling, and doesn't even address the same issues). Overrule a rule, sure. But overrule it by silence? Come on.

Stay tuned. The California Supreme Court's docket shows that there's been no response from the County, which means it is now in the court's hands. Look for a decision in the next month or two.

Petition for Review, Shenson v. County of Contra Costa, No. S279857 (Cal. May 5, 2023)

Iowa: City Of The Monks Keeping Part Of Your Tax Refund Isn't A Taking, Red-Light Runners

In Livingood v. City of Des Moines, No. 22-0586 (June 9, 2023), the Iowa Supreme Court held that the city's use of the Iowa's process by which the government can satisfy all or part of a taxpayer's debt to a public agency by grabbing someone's tax refund. In a nutshell, after trying to collect the debt by more conventional means:

the income offset program allows the department of administrative services to collect debts for public agencies by offsetting the debts against any income tax refund owed to a taxpayer. The city entered into a memorandum of understanding with the department of administrative services to use the income offset program.

Slip op. at 4-5.

The debt owed in Livingood is for traffic violations caught on camera.

Is it a taking under the Iowa Constitution to not give the taxpayer/cam-violator the full amount of tax refund?

No. First, the court held that someone's income tax refund is "property" protected from uncompensated takings. So far so good for the plaintiffs. But the court held that this isn't a taking, because money property claims are treated differently under the takings clause. For that proposition, the court relied almost exclusively on authority interpreting the U.S. Constitution. And here, the city isn't taking property for a public use, and is not requiring the plaintiffs to bear a burden that should be borne by the public as a whole.

Because they are traffic violators, and the city has the power to impose a fee for driving badly and violating the law, and in keeping tax refunds it is merely collecting what's owed for the penalty. Thus, "[t]he government's collection of money for the payment of fines in the exercise of its police power is not a 'taking' for 'public use' and does not implicate the takings clause." Slip op. at 12.

Livingood v. City of Des Moines, No 22-0586 (Iowa, June 9, 2023)

Another Cert Petition Challenging NY's Draconian Rent Control As A Taking

Here's the latest in a case we've been following, one of the multiple challenges to New York's latest ratcheting up of rent control.

We think the Questions Presented spell out the issues pretty well:

New York has implemented the most sweeping and onerous rent control provisions the United States has ever seen in its Rent Stabilization Laws and accompanying regulations (“the RSL”). As recently amended, the RSL makes New York’s once “temporary” rent stabilization regime permanent for over one million apartments. Petitioners are owners of apartment buildings regulated by the RSL. The RSL expropriates a definitional feature of Petitioners’ real property—the right to exclude—by granting their tenants a perpetual right to renew their leases. The RSL closes off all viable exit options for Petitioners to change the use of their property and thus avoid RSL regulation. These provisions, when combined with the RSL’s ceiling on the rents that landlords can collect, have ensured that Petitioners cannot earn a just and reasonable rate of return. The RSL has dramatically reduced the economic value of Petitioners’ property beyond any reasonable expectation. Nevertheless, the Second Circuit held the RSL did not effect any taking of Petitioners’ property without just compensation.

The questions presented are:

(1) Does the RSL effect a per se physical taking by expropriating Petitioners’ right to exclude?

(2) Does the RSL effect a confiscatory taking by depriving Petitioners of a just and reasonable return?

(3) Does the RSL effect a regulatory taking as an unconstitutional use restriction of Petitioners’ property?

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

Petition for a Writ of Certiorari, 335-7 LLC v. City of New York, No. 22-1170 (U.S. May 30, 2023) by RHT on Scribd

New Takings Cert Petition (Ours): Can Govt Thwart Federal Court Regulatory Takings Claims By Seeking Abstention In Favor Of State Courts?

Here's the latest in a case we've been following since before it became one of ours.

In Gearing v. City of Half Moon Bay, No. 21-16688 (Dec. 8, 2022), the Ninth Circuit upheld the district court's dismissal of a regulatory takings case, holding that federal courts should abstain from considering regulatory takings cases in favor of pending state court eminent domain actions, even when the condemnor instituted the state court action after the federal takings lawsuit was filed.

In the time since the Ninth Circuit issued the opinion, our law firm has joined up with our colleague Kristen Renfro who represented the owner in the court of appeals. That's why we won't be commenting further, and instead suggest you read the cert petition we filed today, chiefly authored by Counsel of Record Deborah LaFetra (lately of the Tyler v. Hennepin County takings case). 

Here is the Question Presented:

Thomas and Daniel Gearing are categorically prohibited from building on residentially zoned vacant land that the City of Half Moon Bay prefers as an open space public park. They exercised their choice of forum by filing a lawsuit in federal court under 42 U.S.C. § 1983, alleging a regulatory taking in violation of the Fifth Amendment, and seeking just compensation, costs, and attorneys’ fees. The City responded by filing an eminent domain lawsuit in state court that significantly limits the issues and the Gearings’ remedies. The City then convinced the federal court to abstain from deciding the Gearings’ first-filed federal lawsuit under Railroad Commission of Texas v. Pullman Co., 312 U.S. 496 (1941). As a result of the forthcoming state court decision to which federal courts are bound to give full faith and credit, 28 U.S.C. § 1738, the Gearings will be deprived of full just compensation as well as other recovery authorized by the Civil Rights Act.

The question presented is:

Whether federal courts may deprive takings claimants of their chosen forum by invoking the prudential Pullman abstention doctrine to require them to first litigate their claims in state court.

Stay tuned, as always.

Petition for Writ of Certiorari, Gearing v. City of Half Moon Bay, No. ___ (June 1, 2023)

Tyler Takings Round-Up

Here are what others are saying about Supreme Court's recent ruling in Tyler v. Hennepin County, No. 22-166 (U.S. May 25, 2023), the case in which the Court unanimously held that the county's keeping the excess equity in Ms. Tyler's home over what she owed in property taxes and fees is an uncompensated taking of private property.

• As usual, lawprof Ilya Somin was first out of the gate with "Major Unanimous Supreme Court Victory for Property Rights in Tyler v. Hennepin County" ("While the Supreme Court decision left some notable issues unresolved, it nonetheless sets a significant precedent. Most obviously, the jurisdictions that currently authorize home equity theft—some twelve states and the District of Columbia—will no longer be allowed to do so. In addition, the holding that states cannot just redefine property rights at will has important implications for other property rights issues. It makes it harder for states to avoid takings liability.")
• Amanda Karras has this casenote at the International Municipal Lawyers Association's blog, "Supreme Court Rules Against County in Important Takings Case" ("States and local governments may also look to Nelson as guidance and provide a mechanism for the return of the surplus equity after the sale of the property.  That said, while Nelson remains good law, the question of overruling Nelson was not on the table, and it may be that such a scheme (which would allow a local government to keep surplus equity after the sale of the property if there is a mechanism for the return of the equity to the homeowner) may not be viewed favorably by the current Court and may also conflict with subsequent precedents from the Court.")
• Amy Howe, SCOTUSblog "Justices rule Minnesota county violated takings clause" ("The county pointed to a 1935 state law that strips an owner who falls behind on her property taxes of her interest in the property. Therefore, the county argued, there was no property for the government to take. The court disagreed, stressing that 'property rights cannot be so easily manipulated.' Indeed, Roberts observed, even Minnesota itself 'recognizes that in other contexts a property owner is entitled to the surplus in excess of her debt.' Although the county can sell Tyler’s condo to recover the $15,000 that she owes it, Roberts wrote, it cannot 'use the toehold of the tax debt to confiscate more property than was due.' By keeping the $25,000, Roberts concluded, the county 'effected a ‘classic taking in which the government directly appropriates private property for its own use.''
• Federalist Society webinar with Tony Francois, "Courthouse Steps Decision: Tyler v. Hennepin County, Minnesota" ("Join us as Tony Francois provides a detailed analysis of the decision and discusses the potential implications from this landmark ruling.").

We'll update as merited.

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

We'll be rendering to unto Caesar, but first we must
decide: classic or creamy?

That was quick: it seems like it was only yesterday -- or maybe more accurately, less than a month ago -- that we were listening in live to the Supreme Court as it heard arguments in Tyler v. Hennepin County, No. 22-166, our law firm's case which argues that Hennepin County's keeping the excess equity in Ms. Tyler's home over what she owed in property taxes and fees is an uncompensated taking of private property and also violates the Excessive Fines Clause.

This morning, the Court issued this unanimous opinion authored by Chief Justice Roberts (again proving he's the Court's "property guy"), in which the Court held that the County's seizing Ms. Tyler's condo to satisfy her tax debt and then "keeping the change" is a taking. It's a relatively short opinion with no dissents and a very short two-Justice concurring opinion laying out some thoughts on the Excessive Fines theory (which the majority avoided, see slip op. at 14 ("Because we find that Tyler has plausibly alleged a taking under the Fifth Amendment, and she agrees that relief under “the Takings Clause would fully remedy [her] harm,” we need not decide whether she has also alleged an excessive fine under the Eighth Amendment.")). 

We're not going to comment too much on this decision, because this is one of our firm's cases. But before we post what others are saying about it, we do have a few highlights to point out.

• As noted in this post's title, perhaps the most significant and interesting part of the opinion is the passage of page 4 and 5, where the Court finally gets to a question that we've been asking for a while: is state law the exclusive source of property law and property rights? True, state law can recognize more interests as property, but it cannot recognize less. Here's what the unanimous Court has to say about the issue:

The Takings Clause does not itself define property. Phillips v. Washington Legal Foundation, 524 U. S. 156, 164  (1998). For that, the Court draws on “existing rules or understandings” about property rights. Ibid. (internal quotation marks omitted). State law is one important source. Ibid.; see also Stop the Beach Renourishment, Inc. v. Florida Dept. of Environmental Protection, 560 U. S. 702, 707 (2010). But state law cannot be the only source. Otherwise, a State could “sidestep the Takings Clause by disavowing traditional property interests” in assets it wishes to appropriate. Phillips, 524 U. S., at 167; see also Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U. S. 155, 164 (1980); Hall v. Meisner, 51 F. 4th 185, 190 (CA6 2022) (Kethledge, J., for the Court) (“[T]he Takings Clause would be a dead letter if a state could simply exclude from its definition of property any interest that the state wished to take.”). So we also look to “traditional property law principles,” plus historical practice and this Court’s precedents. Phillips, 524 U. S., at 165–168; see, e.g., United States v. Causby, 328 U. S. 256, 260–267 (1946); Ruckelshaus v. Monsanto Co., 467 U. S. 986, 1001–1004 (1984).

• Thus, although Minnesota law has statutorily ipse dixited its own property law to define the excess equity as not property, the courts are not bound by the state's view of what constitutes compensable (i.e., Fifth Amendment "private") property, if "[h]istory and precedent say otherwise." Slip op. at 5. The government may have the the power to require you to pay property taxes, and the power to sell your home to exact those taxes if you fail to voluntary pony up, "[b]ut it could not use the toehold of the tax debt to confiscate more property than was due." Slip op. at 6
• OK, Chief, we get that before you ascended to the bench, as an advocate you argued Tahoe Sierra, and that you prevailed in that case. And we dig that you cite it for some good language. See, e.g., slip op. at 6 ("By doing so, it effected a “classic taking in which the government directly appropriates private property for its own use.” Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U. S. 302, 324 (2002) (internal quotation marks and alteration omitted). Tyler has stated a claim under the Takings Clause and is entitled to just compensation."). But come on man, you repped the government in that case! Retconning your own work only goes so far and let's just say that Tahoe Sierra isn't the best authority when you need to cite cases for property rights propositions. (But as long as you keep writing good property owner opinions as a judge, we're not going to complain too much.)
• After establishing the principle that state law cannot exclusively define the term "private property" as used in the Fifth Amendment and that history and tradition and what Justice Thurgood Marshall called "core" or "normative" property principles are part of it, the Court took a dive into history "at least as far back as Runnymeade in 1215" and the Magna Carta. Check out pages 6-9, where the opinion concludes that there is a "consensus that a government could not take more property than it was owed[.]"
• Court next rejected the County's argument that the issue was settled in Nelson v. City of New York, 352 U. S. 103 (1956), where the Court rejected a "belated" argument that the city keeping the excess equity was a taking (the owner had, until arguments in the Supreme Court, limited its arguments to due process and equal protection claims). There, unlike the County's procedure here, the taxpayer could have availed himself of a procedure to recover the surplus. But the County has no similar process, and there's "no opportunity for the taxpayer to recover the excess value; once absolute title has transferred to the State, any excess value always remains with the State." Slip op. at 11.
• The Court also rejected the County's "constructive abandonment" argument, which went like this: Ms. Tyler impliedly abandoned her property when she failed to timely pay her property taxes. The Court held no, an owner must do more than neglect to pay her taxes. This isn't akin to situations in which the Court has found abandonment, such as where owners fail to make any use of their property. Here, the "keep the change" statute "gives no weight to the taxpayer's use of the property. Indeed, the delinquent taxpayer can continue to live in her house for years after falling behind in taxes, up until the government sells it." Slip op. at 14.
• Armstrong Batsignal:

The Takings Clause “was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong, 364 U. S., at 49. A taxpayer who loses her $40,000 house to the State to fulfill a $15,000 tax debt has made a far greater contribution to the public fisc than she owed. The taxpayer must render unto Caesar what is Caesar’s, but no more.

• The Court also made short work of the County's argument that Ms. Tyler lacked standing because "she did not affirmatively 'disclaim the existence of other debts or encumbrances' on her home worth more than the $25,000 surplus." Slip op. at 3. The Court concluded that (a) none of these assertions were in the record, but even if there are such encumbrances, she still plausibly alleges a financial harm because even if the tax sale extinguishes other liens on the property, Ms. Tyler remained personally liable to the other lienor. And "[h]ad Tyler received the surplus from the tax sale, she could have at the very least used it to reduce any such liability." Slip op. at 4.
• We were really wishing for a citation to Barron v. Baltimore, 32 U.S. 243 (1833) as a way of signaling more on the "where does property come from" issue, but were sadly disappointed. Not too much, mind you. Just a bit.

More to come as the analysis and commentary rolls in.

Tyler v. Hennepin County, No. 22-166 (U.S. May 25, 2023)

New Cert Petition: Forcing Owners To Rent To Tenants Indefinitely Is A Categorical Taking

Here's the latest in a case we've been following since its inception, this cert petition seeking Supreme Court review of the U.S. Court of Appeals for the Second Circuit's affirming the district court's dismissal of a complaint alleging that New York (state)'s sweeping amendments to its Rent Stabilization (rent control) statute effected categorical and Penn Central takings:

Petitioners’ physical-takings claims would have been allowed to proceed if they were brought in the Eighth Circuit. That is because the Eighth Circuit has correctly held that property owners plead a physical taking under Cedar Point where a law prohibits them from terminating a tenancy at the end of a lease term. See Heights Apartments, LLC v. Walz, 30 F.4th 720, 733 (8th Cir. 2022), reh’g en banc denied, 30 F.4th 720. But the Second Circuit held here—as has the Ninth Circuit—that the physical-takings principles articulated in Cedar Point are not implicated when an owner voluntarily offered housing for rent in the first instance. These courts instead read Yee v. City of Escondido, 503 U.S. 519 (1992), as precluding physical-takings claims so long as the property owner may evict tenants in the event they breach the lease or engage in other forms of malfeasance—thus carving out a special and particularly deferential landlord-tenant exception to the general principles articulated in Cedar Point. Those courts misread Yee, which reserved the question whether a taking would occur if a law forced “a landowner over objection to rent his property or to refrain in perpetuity from terminating a tenancy.” Id. at 528.

In affirming the dismissal of Petitioners’ regulatory-takings claims, the Second Circuit also split from other circuits on every Penn Central factor. The court deemed irrelevant the impact that the law would have on Petitioners’ property rights, explaining that it was “of no moment” that they are forced to bear burdens that others are not. App. 16a. The court also viewed the character of the governmental action—which forces Petitioners to house tenants against their will—as counting against Petitioners’ claims because the law serves important public purposes and “courts are not in the business of second-guessing legislative determinations such as this one.” Id. The Second Circuit’s ruling confirms that this Court’s “current regulatory takings jurisprudence leaves much to be desired.” Bridge Aina Le’a, LLC v. Haw. Land Use Comm’n, 141 S. Ct. 731, 731 (2021) (Thomas, J., dissenting from denial of certiorari).

Pet. at 2-3.

Here are the Questions Presented:

Petitioners own small apartment buildings in New York City that are subject to New York’s Rent Stabilization Law (“RSL”). Once an owner leases a unit for a fixed term, the RSL grants the tenant and the ten-ant’s successors a perpetual right to renew the lease, regardless of whether the owner consents. That renewal right strips owners of their right to exclude others from their property and prevents them from living in their own apartments. The Second Circuit held that these facts failed to state a physical-takings claim because Petitioners voluntarily entered the rental market in the first instance and could, in some circumstances, evict tenants who breach their leases. Petitioners’ regulatory-takings claims likewise failed because, among other reasons, the RSL serves an important purpose and does not deprive petitioners’ property of all value. In so holding, the Second Circuit deepened or created circuit splits at each step of its analysis. The questions presented are:

1. Whether a law that prohibits owners from terminating a tenancy at the end of a fixed lease term, except on grounds outside the owner’s control, constitutes a physical taking.

2. Whether allegations that such a law conscripts private property for use as public housing stock, and thereby substantially reduces its value, state a regulatory takings claim.

Stay tuned.

Petition for a Writ of Ceritorari, 74 Pinehurst LLC v. New York, No. ____ (U.S. May 17, 2023)

New Cert Petition: The Supreme Court Should Resolve The Legislatively-vs-Administratively Imposed Exactions Issue

When we last visited Sheetz v. El Dorado County, we finished with "stay tuned" because we suspected that the California Court of Appeal's opinion concluding that the County's traffic mitigation fee is immune from Nollan/Dolan nexus-and-rough-proportionality review because the legislature imposed the fee on everyone (and Sheetz was not subject to paying it because of an ad hoc agency decision) was not going to be the last word, either in the case or on the legislative exactions issue.

Well, now the predicted other shoe drop: the property owner has filed this cert petition, with this Question Presented:

George Sheetz applied to the County of El Dorado, California, for a permit to build a modest manufactured house on his property. Pursuant to legislation enacted by the County, and as the condition of obtaining the permit, Mr. Sheetz was required to pay a monetary exaction of $23,420 to help finance unrelated road improvements. The County demanded payment in spite of the fact that it made no individualized determination that the exaction—a substantial sum for Mr. Sheetz—bore an “essential nexus” and “rough proportionality” to the purported impacts associated with his modest project as required in Nollan v. Cal. Coastal Comm’n, 483 U.S. 825, 837 (1987) and Dolan v. City of Tigard, 512 U.S. 374, 391 (1994).

Mr. Sheetz challenged the exaction as an unconstitutional condition under Nollan and Dolan. A California trial court upheld the exaction, holding that, because it was authorized by legislation, the exaction was immune from Nollan/Dolan review. In a published decision, the California Court of Appeal affirmed, and the California Supreme Court denied review. California’s judicially-created exemption from Nollan/Dolan scrutiny for legislative exactions conflicts with the decisions of other federal and state courts across the country, and is in strong tension with this Court’s more recent precedents.

The question presented is whether a permit exaction is exempt from the unconstitutional conditions doctrine as applied in Nollan and Dolan simply because it is authorized by legislation.

The Sixth Circuit just last week held that these type of demands are subject to the nexus and rough-proportionality standards, and not rational basis review, deepening the lower court conflict.

So we shall say again: we don't think the California court's Sheetz opinion is the last word, so stay tuned.

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

Petition for Writ of Certiorari, Sheets v. County of El Dorado, No. 22-1074...

 

CA6: Legislative Conditions Are Subject To Nexus-And-Proportionality Requirements

A good opinion from the U.S. Court of Appeals for the Sixth Circuit in Knight v. Metro. Gov't of Nashville, No. 21-6179 (May 10, 2023), holding that conditions imposed on every development -- and not just ad hoc administratively-imposed conditions -- must conform to the Nollan-Dolan-Koontz close nexus and rough proportionality standards.

You takings and land use mavens can stop right there, because you know what this means: the Sixth Circuit has added to the growing split in the lower courts about whether legislatively-imposed conditions on development which cover everyone are, as some courts characterize them, mere land use regulations subject only to Euclid's rational basis review, or are constrained by N-D-K 's requirements (see here, and here for examples). The Supreme Court has been presented with the lower court disagreement, but so far has not stepped in and resolved the issue.

The Sixth Circuit experienced no such qualms when considering a Nashville ordinance that conditions the grant of building permits on the owners agreeing to either grant an easement across their land and build a sidewalk on that easement, or give the city cash instead:

In particular, the parties here disagree over the “test” that we should use to judge whether the sidewalk ordinance commits a taking. The landowner plaintiffs ask us to apply the “unconstitutional-conditions” test that the Supreme Court adopted to assess conditions on building permits in Nollan v. California Coastal Commission, 483 U.S. 825 (1987). Nashville responds that the Court has applied Nollan’s test only to ad hoc administrative conditions that zoning officials impose on specific permit applicants—not generally applicable legislative conditions that city councils impose on all permit applicants. For legislative conditions, Nashville says, we should turn to the deferential “balancing” test that the Court adopted to assess zoning restrictions in Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978).

We side with the landowner plaintiffs. Nothing in the relevant constitutional text, history, or precedent supports Nashville’s distinction between administrative and legislative conditions. Nollan’s test thus should apply to both types, including those imposed by the sidewalk ordinance. Because the district court reached a contrary conclusion, we reverse its grant of summary judgment to Nashville and remand for proceedings consistent with this opinion.

Slip op. at 2.

We suggest you read the entire opinion -- it isn't long (29 pages) and it has pictures! -- because it really sets out the arguments, and there's even some takings history for you history buffs. The court concluded that the Takings Clause is a limit on legislative authority, not just executive power. See slip op. at 20.

And there's a whole lot of takings and property rights goodness in the opinion, including these:

• "The government does not always directly interfere with constitutional rights. It sometimes indirectly interferes with them by offering a benefit that it has no duty to provide on the condition that a party waive a right." Slip op. at 10.
• "But what rules divide constitutional from unconstitutional conditions on these otherwise discretionary benefits? One generic rule is clear: If the Constitution allows the government to directly compel a private party to undertake conduct on threat of criminal punishment, the government may indirectly compel that conduct as a condition on a benefit." Id.
• "Courts instead must look to a specific constitutional right to identify the specific rules. Id. at 913. This fact brings Nollan to the fore. It created a 'special unconstitutional-conditions framework for an “exaction” in the takings context. Slip op. at 10-11.
• "At first blush, Nashville’s enforcement of its sidewalk ordinance looks like a clear case for Nollan’s unconstitutional-conditions test." Slip op. at 14.
• "Does it matter that the sidewalk ordinance allowed Knight and Mayes to pay fees rather than build sidewalks? No again. Because these “commonplace” in-lieu fees resemble “other types of land use exactions,” Koontz held that they trigger Nollan’s test all the same." Slip op. at 16.
• See page 17 for the opinion's run-down of the different ways different courts go on this issue.
• "This case requires us to answer that question. We now hold that Nollan’s unconstitutional-conditions test applies just as much to legislatively compelled permit conditions as it does to administratively imposed ones. Nothing in the text or original understanding of the Takings Clause justifies Nashville’s requested distinction. Its requested distinction also conflicts both with the Supreme Court’s unconstitutional-conditions precedent and with its takings precedent." Slip op. at 18.

The court held that the "text and history" of the takings clause compelled the outcome, slip op. at 18- 22, as does "Supreme Court precedent." Slip op. at 22-72.

Having determined that Nashville's ordinance is subject to the nexus and proportionality requirements, the court concluded that the city waived the argument that the ordinance met the test: "Nashville has waived any argument that it can satisfy this unconstitutional-conditions test. Knight and Mayes spent pages of their brief arguing that the city could not meet Nollan’s and Dolan’s elements. ... But Nashville did not even try to respond, opting to rely exclusively on its claim that Penn Central’s test applied." Slip op. at 28.

Finally, the court thought about the remedy, and whether it is just compensation (here's your in-lieu fee back, property owner), or equitable relief in the form of a declaratory judgment or an injunction? See slip op. at 28. But the court didn't resolve that question and left it for the district court on remand.

Here are the briefs, including the amicus brief our own firm filed:

• Property Owners' Opening Brief
• Nashville's Answering Brief
• Owners' Reply Brief
• Pacific Legal Foundation's amicus brief in support of property owners

Is this decision the last word on the issue? Most certainly not, and this question won't be definitively resolved until the Supreme Court decides to decide. But in the interim, this one is good in the Sixth Circuit. 

Knight v. Metro. Gov't of Nashville, No. 21-6179 (6th Cir. May 10, 2023)

New (Michael Berger) Cert Petition: Knick "Changed the world of takings litigation" And Applies Retroactively - And Statutes Of Limitations Are Affirmative Defenses

Here's a new cert petition, filed this week by Michael Berger that asks whether Knick's no-need-to-exhaust-or-chase-state-compensation rule applies retroactively.

The Second Circuit held that no, the owner's claims were too late, and although Knick overruled the Williamson County rule that kept him from a timely filing in federal court, that's just too bad:

We also agree with the district court that the remaining claims are largely time barred. Demarest filed this lawsuit in June 2021, yet much of the conduct targeted by his complaint dates from long before. Since a § 1983 claim adopts the limitations period for a state personal injury tort-which in Vermont is three years, see Morse v. Univ. of Vt., 973 F.2d 122, 125-27 (2d Cir. 1992)-claims accruing before June 2018, which comprise the majority of Demarest's complaint, would be time barred. Although Demarest argues that his claims accrued only when a recent Supreme Court decision, Knick v. Twp. of Scott, Pennsylvania, 139 S.Ct. 2162 (2019), removed an impediment to his pursuing them, he is incorrect: "[a] decision recognizing a cause of action after the period has run does not retroactively interrupt the running of the limitations period." Fiesel v. Bd. of Educ. of N.Y.C., 675 F.2d 522, 524 (2d Cir. 1982) (internal quotation marks omitted).

Arguing that Knick rewrote the script (and righted the ship that Williamson County had upended), the petition asks the Court to give retroactive effect to its rule.

To us, this makes a lot of sense because Knick wasn't so much a new rule as a return to normalcy. Williamson County was the aberration and the Court veering takings litigation and procedures off-track. Before Williamson County, a property owner could go to federal court with her federal takings claim, and she can now. It seems like this is just what retroactivity was meant for.

The petition also points out that the Second Circuit treated the statute of limitations as some kind of jurisdictional bar, and not a claims processing rule (hang on, that sounds familiar....).

Here are the Questions Presented:

The Court of Appeals refused to give retroactive effect to this Court’s landmark decision in Knick v. Township of Scott, 139 S.Ct. 2162 (2019), which opened the federal courts to constitutional property litigation for the first time in 34 years. Compounding that error, the Court of Appeals refused to grant rehearing to consider the impact of the then pending decision in Wilkins v. United States, 143 S.Ct. 870 (2023), which ended up restricting the impact of statutes of limitation. In combination, the Court of Appeals’ refusal to apply this Court’s current law deprived Petitioner of property without just compensation and due process of law.

The questions presented are:

1. When Knick changed the world of takings litigation by allowing—for the first time since 1985—a property owner with a claim for unconstitutional taking of property to file suit in federal court, must that decision be applied retroactively, with the time to file suit tolled until the date Knick was decided, so as to give its benefit to property owners who had been precluded from suing in federal court before?

2. When Wilkins confirmed in the real property context that statutes of limitation are not jurisdictional but are merely claim processing tools, must lower courts now treat statutes of limitation as affirmative defenses to be proved at trial by the defendant?

Are we going to follow along? You bet we are (and you should also).

Petition for a Writ of Certiorari, Demarest v. Town of Underhill, No. ____ (U.S. May 8, 2023)

This Just In - Florida Appeals Court: TDRs, Beekeeping, And Camping Are Not Economically-Beneficial Uses, So Downzoning Is A Lucas Taking

Shands Key, with the City of Marathon in the background

This just in: in Shands v. City of Marathon, No. 3D21-1987 (May 3, 2023), Florida's Third District Court of Appeals held that the city's downzoning the property (Shands Key, shown above in an exhibit from the Key West trial we participated in in June 2021) from General Use (density: one home per acre) to Conservation Offshore Island (one home per 10 acres; Shands Key is just under 8 acres) effected a Lucas taking.

We're not going to go into too much detail, because this case is one of ours. Our Pacific Legal Foundation colleague Jeremy Talcott was the lead trial and appellate counsel, backed by Kady Valois.

Trial (and appeal) team after closing arguments in Key West:
Valois, inversecondemnation.com, Talcott

But we're not going to let you go without noting a few highlights from the Court of Appeal opinion:

• "This inverse condemnation appeal presents a novel issue regarding the role that transferred development rights (“TDRs”) occupy in adjudicating a per se as-applied regulatory taking claim advanced under the landmark case of Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992)." Slip op. at 1.
• "Finding that an award of TDRs and Building Permit Allocation System (“BPAS”) points, considered in tandem with the residual land value derived from personal recreation and beekeeping, precluded a per se as-applied claim, the trial court denied the motion. The primary issue on appeal is the propriety of that ruling." Slip op. at 1-2.
• "In the aftermath of Penn Central, Lucas, and their progeny, TDRs have emerged as a popular and effective tool for local governments to promote conservation efforts and urban growth management. Such rights typically benefit the landowner by allowing for expanded “development beyond the restricted level on [another] piece of land.” Ralph A. DeMeo, Transfer Development Rights, in II Florida Environmental and Land Use Law ch. 23 (1996)." Slip op. at 10.
• "The significance of TDRs in the regulatory takings matrix has been sharply debated. Some legal experts have opined that TDRs are irrelevant to the takings side of the equation because they do nothing to impact the nature and extent of the property interest taken by the government. Others have espoused the belief that TDRs necessarily mitigate the economic impact of regulation by infusing the property with value; therefore, they should be considered before determining whether the government has effectuated a taking." Slip op. at 10-11 (footnotes omitted).
• "Appellants established that regulation deprived them of any use of the property, other than for beekeeping or personal camping. These do not constitute economically beneficial uses, as 'a State may not evade the duty to compensate on the premise that the landowner is left with a token interest.' Palazzolo v. Rhode Island, 533 U.S. 606, 631 (2001). As Justice Scalia observed in his Suitum concurrence, any income associated with TDRs does not flow from the cultivation or development of the property in the traditional framework of ownership. Instead, the potential revenue is generated from the non-use of the property." Slip op. at 13-14.
• "Consistent with this logic, while “[p]utting TDRs on the taking rather than the just compensation side of the equation . . . is a clever, albeit transparent, device that seeks to take advantage of a peculiarity of our Takings Clause jurisprudence,” doing so allows the government to provide some compensation without the constitutional stricture of just compensation. Suitum, 520 U.S. at 748–49 (Scalia, J., concurring in part and concurring in judgment)." Slip op. at 14.
• "To reason otherwise would render Lucas nugatory." Id.
• "In accord with the foregoing analysis, we conclude that appellants established overly burdensome government regulation deprived them of “all economically beneficial uses” of their property. Lucas, 505 U.S. at 1019. Consequently, they were entitled to an award of partial summary judgment on their per se as-applied Lucas claim. We therefore reverse and remand for the trial court to vacate the final judgment, enter partial summary judgment in favor of appellants, and conduct further proceedings consistent with this opinion." Slip op. at 17.

Here are the briefs of the parties, so you can see the arguments:

• Initial Brief On Merits (property owners)
• Appellee's Answer Brief (City)
• Appellant's Reply Brief (property owners)

Watch the court of appeal oral arguments (YouTube) here.

A hearty well done to our PLF team for this big win.

Shands v. City of Marathon, No. 3D21-1987 (Fla. Dist. Ct. App. May 3, 2023)

New Cert Petition: Is Barring You From Accessing Your Own Property A Categorical Taking?

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

This is the one where a North Carolina county went bonkers in the early days of Co-19, and truly "locked down" by banning nonresident property owners from entering the county. This wasn't done all at once, but in phases, with nonresident property owners being informed that if they didn't get to their Dare County homes by March 20, they were going to be prohibited from even entering the county. As the Fourth Circuit put it, "In effect, Dare County told non-resident property owners:'“If you want to quarantine at your beach house, get there by March 20.' This gave non-resident property owners four days to travel to the county."

Blackburn was stopped from accessing his property for 45 days.

The Fourth Circuit upheld the district court's rejection of his takings claim, concluding that this was not a physical invasion or occupation ("But temporarily excluding an owner from their own property differs from eliminating the owner’s right to exclude."), nor was it a total or near-total deprivation of the property's beneficial uses. 

The owner has now sought Supreme Court review.

Here's the Question Presented:

Whether a governmental regulation prohibiting all physical access to a landowner’s property is a “per se” taking under the Fifth Amendment of the United States Constitution.

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

Petition for a Writ of Certiorari, Blackburn v. Dare County, No. 22-1048 (U.S. Apr. 25, 2023)

Tyler SCOTUS Takings Argument Round-Up

Our Pacific Legal Foundation Property Rights Litigation Tyler team,
and Counsel of Record Christina Martin (second from right)

Here are your links to the buzz about Tyler v. Hennepin County, No. 22-166, our law firm's case which argues that Hennepin County's seizure of Ms. Tyler's condo and then keeping the excess equity over what she owed in property taxes and fees, is an uncompensated taking of private property, and also violates the Excessive Fines Clause.

• Transcript and audio recording of the oral arguments.
• Kelsey Reichmann, Grandma who lost her house to debt finds high court sympathy (Courthouse News Service)
• Lawprof Ilya Somin, Unusual Cross-Ideological Agreement in Tyler v. Hennepin County (Volokh Conspiracy)
• Steve Osunsami, Laura Romero, Dr. Mark Abdelmalek, Doug Vollmayer, Supreme Court takes on what critics call predatory tax foreclosure practice (Good Morning America)
• Amy Howe, Justices appear likely to side with homeowner in foreclosure dispute (SCOTUSblog)
• Mark Sherman, Supreme Court seems to favor woman who got $0 in condo sale (Associated Press)

More on the way. Stay tuned.

Today's Takings SCOTUS Oral Argument Transcript And Recording: Tyler v. Hennepin County

Coffee is for closers.
(Yes, we were up and at the desk at 4 a.m. local time
to listen live. We just needed a direct injection of coffee.)

Here is the transcript, and the audio recording of today's U.S. Supreme Court arguments in Tyler v. Hennepin County, No. 22-166, our law firm's case which argues that Hennepin County's keeping the excess equity in Ms. Tyler's home over what she owed in property taxes and fees, is an uncompensated taking of private property, and also violates the Excessive Fines Clause.

We will bring you the analysis of the arguments and the pundits' predictions in a subsequent posts. But for the time being here these are in case you missed out listening live. Stay tuned.

Transcript, Tyler v. Hennepin County, No. 22-166 (U.S. Apr. 26, 2023)

More SCOTUS Takings Previews (Argument Tomorrow, 10am ET)

Tomorrow, Wednesday, April 26, 2023, at 10:00 a.m. Eastern Time, the U.S. Supreme Court will be hearing oral arguments in Tyler v. Hennepin County, No. 22-166, our law firm's case which argues that Hennepin County's keeping the excess equity in Ms. Tyler's home over what she owed in property taxes and fees, is an uncompensated taking of private property, and also violates the Excessive Fines Clause.

Listen to the arguments live, here.

We posted some preview links earlier this week here. But wait, there's more!

• Amy Howe, Court to hear dispute over confiscated condo title and sale (SCOTUSblog).
• George Will, The county seized her condo, sold it and kept all the money. Not nice. (Washington Post).
• Anthony Francois, Nancie Marzulla & John Bursch, Courthouse Steps Preview: Tyler v. Hennepin County (Federalist Society) (video)
• Perry Cooper, Seized Home Sold for Profit Set for Supreme Court Consideration (Bloomberg Law)
• Cases & Controversies Podcast, Supreme Court Abortion Dispute, Ethics Sage Intesify (includes PLF attorney David Deerson on Tyler) (Bloomberg Law)

Stay tuned.

Ninth Circuit Invalidates Berkeley's Too-Clever-By-Half Ban On New Natural Gas Piping

Proving there's more than one way to protect property rights and, you know, our basic freedom to (1) diversify our energy uses so when the power goes out as it frequently does in California, we don't lose the use of every single appliance and modern convenience, and (2) heat up our dinner the way humans have been doing it for a long time, in California Restaurant Ass'n v. City of Berkeley, No. 21-16276 (Apr. 17, 2023), the U.S. Court of Appeals for the Ninth Circuit invalidated Berkeley, California's too-cute-by-half attempt to ban new gas appliances.

Gas stoves are the latest villain from The Land of No (aka The Golden State), but instead of trying to ban gas stoves directly (after all, a crafty home chef might just go to Emeryville or Albany and obtain one of these kitchen cabinet Death Stars, at least until those cities also get on the Berkeley bandwagon), Berkeley got clever: it adopted an ordinance that banned gas piping in new construction under the Building Code. Buy and install all the gas stoves you like, homebuilder; there'll just be nothing to hook it up to. A gas stove without gas piping is like an assault rifle without bullets.

And after all, what can be more local than a building code? The ordinance also expressly disclaimed that it was prohibiting, you know, gas stoves or anything, or mandating electric. No, it was merely eliminating "obsolete natural gas infrastructure and associated greenhouse gas emissions," which will help save the planet.

The Restaurant Association sued, asserting the ordinance was preempted both by California and federal law -- in the latter case, the Energy Policy and Conservation Act, 42 U.S.C. § 6297(c).

Now we're a takings and property blog, so we are not going to go into the preemption details, which frighten and confuse us. You can read the opinion yourself if you are a preemption nerd. The bottom line, in our reading of the opinion, is that the EPCA prohibits any state or local laws that concern energy efficiency, or use. The court concluded that Berkeley's ordinance involved "energy use." As the opinion notes:

Berkeley’s main contention is that its Ordinance doesn’t regulate “energy use” because it bans natural gas rather than prescribes an affirmative “quantity of energy.” While Berkeley concedes that a prohibition on natural gas infrastructure reduces the energy consumed by natural gas appliances in new buildings to “zero,” it argues that “zero” is not a “quantity” and so the Ordinance is not an “energy use” regulation. But that defies the ordinary meaning of “quantity.”

Slip op. at 13.

There's more, both in the opinions (46 pages to cover the majority and the two separate concurring opinions), and in the media, where it has generated a lot of coverage and analysis, including these:

• Federal court strikes down a California city's natural gas ban (Emma Newburger, CNBC)
• Does the 9th Circuit’s rejection of Berkeley, CA’s municipal gas ban spell doom for Massachusetts’ own gas-banning “Demonstration Program”? (Paula M. Devereaux, Pierce Atwood's Massachusetts Dirt and Development Law blog)

Given the tenor of the times, we seriously doubt that this is the last word on this topic, either in this case or overall. Berkeley ain't a quitter after all, and it sure knows how to double-down on those municipal policies that have resulted in its two main nicknames, "Berzerkely," and "The People's Republic of Berkeley." Maybe calling out the National Guard to take those gas stoves quartered in your homes? (Don't give them ideas!)

Now if only we could reduce the greenhouse gas emissions from politicians, we'd be going a long way to saving the planet. One can dream, can't one?

California Restaurant Ass'n v. City of Berkeley, No. 21-16278 (9th Cir. Apr. 17, 2023)