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Sheetz Round-Up

Here's what folks are saying about yesterday's unanimous U.S. Supreme Court decision in Sheetz v. County of El Dorado, where the Court held that impact fees and exactions imposed by legislative action are not categorically immune from the close nexus and rough proportionality requirements already applicable to ad hoc/administratively-imposed exactions under Nollan, Dolan, and Koontz.

• Ilya Somin, "Supreme Court Rules There Is No 'Legislative Exception' to the Takings Clause" (Volokh) ("At oral argument, it seemed like the justices might be interested in going beyond the legislative exception issue, possibly addressing the underlying question of whether the fee imposed in this case was a taking or not. However, the Court chose not to deal with that question, which will now be remanded back to the California state courts for their consideration.")
• Editorial Board, "A Bad Day for Greedy Politicians at the Supreme Court" (Wall St. Journal) ("But Justice Neil Gorsuch wrote in a concurrence that the Court’s Nollan and Dolan tests should apply similarly when “an alleged taking affects a ‘class of properties’” as with a particular development. We tend to agree, and the question may return to the Court. The good news for now is that elected officials can’t extort property developers with impunity")
• Amy Howe, "Court rules for property owner in building fee dispute" (SCOTUSblog) ("In her 11-page opinion for a unanimous court, Barrett explained that nothing in the text of the Constitution indicates that the takings clause does not apply to fees imposed by legislatures. The same is true, she continued, for the history of the takings clause. 'In fact,' she wrote, 'special deference for legislative takings would have made little sense historically, because legislation was the conventional way that governments exercised their eminent domain power.' Nor, she added, do the Supreme Court’s cases interpreting the takings clause distinguish in any way 'between legislation and other official acts.'")
• Charles Gardner and Emily Hamilton, "Opinion: This Supreme Court case from California could ease housing shortages everywhere" (Los Angeles Times) ("When 'impact fees' are unmoored from the increased costs a city or county will incur because of a new house or development, the fees can do more than present someone with an unfair bill — they can also reduce housing construction. In a country where a shortage of homes has led to sky-high prices, this matters more than you might think.")
• Amanda Karras, "Supreme Court Decides Impact Fee Case" (IMLA blog) ("The Court’s narrow ruling was not entirely surprising after oral argument as it noted that the parties agreed on this bottom line holding as the County conceded at oral argument that 'building permits are not exempt from scrutiny under Nollan and Dolan just because a legislature imposed them.' The silver lining was that in reaching this narrow holding, the Court declined to address any other arguments 'including whether a permit condition imposed on a class of properties must be tailored with the same degree of specificity as a permit condition that targets a particular development.' In other words, the Court did not rule on Mr. Sheetz's arguments that Nollan and Dolan require local governments to make individualized determinations regarding the impact fees.")

We'll have more, including our own thoughts soon.

Unanimous SCOTUS Delivers A YIMBY Blow: "The Takings Clause does not distinguish between legislative and administrative permit conditions."

This just in: the U.S. Supreme Court has issued a unanimous opinion in Sheetz v. County of El Dorado, a case we've been following (not only because it is one of ours).

The Court, as predicted, held that an exaction (in this case a traffic impact fee) isn't immune from the Nollan/Dolan nexus and rough proportionality requirements merely because the exaction is imposed by legislation.

At heart, this is a very pro-YIMBY decision because it gives property owners and housing builders a path to object to barriers to creating housing and the government's use of the land use approval process as a way of exacting "goodies" that increase housing costs.

While we digest the opinion and the multiple concurring opinions -- we shall post more once we do so -- you can either read the opinions themselves, or see what we thought after the oral arguments. Or both.

Stay tuned.

Sheetz v. County of El Dorado, No. 22-2074 (U.S. Apr. 12, 2024)

CA9: "Traditional common law rule" That Utilities Bear The Cost Of Relocating From Public Right-of-Way Isn't A Taking

Here's one about Lucas "background principles" of property law, or maybe the Supreme Court's current focus on "history and tradition" when it comes to defining private property for purposes of the Takings Clause. 

In So. Cal. Edison Co. v. Orange County Transp. Auth., No. 22-55498 (Mar. 13, 2024), the U.S. Court of Appeals for the Ninth Circuit affirmed a grant of summary judgment denying a takings claim by a public utility which sought compensation after the County ordered it to move its equipment off of a public right-of-way for a streetcar line at its own expense.

The utility raised a physical takings claim, but the court didn't get to that issue, instead focusing on whether it owned property. The court noted that state law "generally" defines property but, citing Tyler, held that there are certain "traditional property law principles" and "historical practices" about property that no state may alter without compensation.

With that understanding in mind, we consider whether the Utilities have a property interest in maintaining their facilities at their specific locations in the face of OCTA’s efforts to construct a streetcar line. We first examine that question under California property law and then consider traditional property-law principles, historical practice, and precedent.

Slip op. at 9.

The court concluded that the utility never owned the "stick" of compensation for relocation. The court held that "California law does not give the Utilities the property interest that they assert." Id. The court noted a 1958 California Supreme Court decision which held that when a utility "accepts franchise right in public streets," it is subject to an implied obligation to relocate at its own expense when the government wants to use the right of way.

Skip to page 14 of the slip opinion for what we think is the more interesting part: does the California rule that the property rights of utilities in public-rights-of-way do not include recovering relocation costs if the government requires them to move consistent with historical and traditional property rights? The Ninth Circuit relied primarily on a U.S. Supreme Court opinion, Norfolk Redev. & Hous. Auth. v. Chesapeake & Potomac Tel. Co., 464 U.S. 30 (1983), for the notion that "utilities have been required to bear the entire cost of relocating from a public right-of-way whenever requested to do so by state or local authorities."

The Ninth Circuit also noted that this was not a new rule but goes as far back as 1905, and that "for more than a hundred years, utilities have been required to relocate to make way for a government that seeks to vindicate its right to use the streets and enact 'proper regulations in the interest of the public health, morals, and safety.'" Slip op. at 15.

The court also rejected the utility's reliance on City of Los Angeles v. Los Angeles Gas & Electric Corp., 251 U.S. 32 (1919), which held that it was a taking for the city to remove or relocate telephone poles "when necessary." That argument crashed on the shoals of the rational basis test:

we do not read Los Angeles Gas & Electric to invite us to make our own assessment of whether a streetcar line is or is not necessary for Orange County—the California Legislature, after all, believes that the project serves valuable public purposes, and the Utilities offer no reason for us to second-guess that judgment.

Slip op. at 17. In the LA Gas case, the project "apparently lacked any public-facing rationale, and it therefore lost its status of 'governmental.'" Id. The streetcar project here suffered from no such omission as the County had said aloud the magic words that its project was for a public purpose. Thus, "[i]t is a governmental project that fits comfortably within a long tradition of relocations for which franchisees must foot the bill." Id.

Finally, the Ninth Circuit rejected the utility's argument that a California statute assigns the costs for these type of relocations on the government. Check out pages 18-21 for the reasons why.

So. Cal. Edison Co. v. Orange County Transp. Auth., No. 22-55498 (9th Cir. Mar. 13, 2024)

NY App Div: Inflation, Bah! Rent Gets Cheaper In Kingston!

New York state, as you might already know, regulates the rent an owner of residential property may charge to a tenant. Under a statute adopted in 1974, regulation is triggered by a locality's declaration of a housing emergency, and the restrictions extend for the duration of the declared emergency. Most famously -- or infamously -- New York City has declared a housing emergency under the statute since that time, and indeed has considered housing an "emergency" for over a century. The 1974 statute also applied to three other NYC-adjacent counties, but not the entire Empire State.

Well, in 2019 the legislature changed that, and "allowed municipalities statewide to opt in to the rent adjustment scheme created by the [1974 Emergency statute] upon a declaration of emergency due to a housing vacancy rate of 5% or less[.]"

In 2019, Kingston was thwarted when it determined its vacancy rate was 6.7% -- too high to invoke emergency powers. But then Co-19 came, and voila! the rate dropped below the magic 5%. Soon thereafter, the city adopted a resolution declaring a housing emergency, and invoked its powers under the 1974 statute to regulate rent on building containing six or more rental units.

The statute requires the formation of a Board to administer the law and determine the rents in the regulated units. The city did so, and the Board came up with this:

On November 9, 2022, following a series of public meetings and hearings, the Board voted to adopt an annual rent adjustment guideline and a fair market rent guideline for the properties subject to the emergency declaration. The fair market rent guideline provided that a tenant could file a fair market rent appeal with respondent Division of Housing and Community Renewal (hereinafter DHCR) to seek a refund if his or her rent increased by more than 16% between January 1, 2019 and July 30, 2022; the adjustment guideline, in turn, required that rent charged for one- and two-year leases commencing between August 1, 2022 and September 30, 2023 be reduced by 15% from the base rate.

Read that again. Max rent increase of 16% over base rate between 2019 and 2022. Check. And then a 15% rent reduction from base rate between 2022 and 2023.Who knew that with inflation and the cost of seemingly everything rising, that rent in Kingston is getting cheaper. Like magic!

An association of property owners sued. They challenged the city's claim that the 5% threshold was met, and also whether the city had the authority to lower existing rents. The Supreme Court (this is New York, so "Supreme Court" means a trial court, dun dun), concluded that indeed, the city had met the very low legal bar for showing that as a matter of fact, Kingston was experiencing a vacancy rate below 5%, but also that the city lacked the authority under the 1974 statute to lower rents. Both sides appealed.

In Hudson Valley Property Owners Ass'n Inc. v. City of Kingston, No. CV-23-0327 (Mar. 21, 2024), the Appellate Division did the city a solid: it affirmed the declaration of emergency, but on the city's appeal, reversed and concluded that nothing in the term "adjustment" of rent in the 1975 statute did not mean only an upwards adjustment of rent, but could include lowering rents. 

We're not going to get into the first issue too deeply, which the court viewed as a factual challenge. Yes, the studies and other data supporting the finding the 5% threshold was satisfied might be a bit off here and there, but as we know, the courts generally don't hold the government to very high standards in this area (or anywhere else in NY law), because the city was acting in good faith. Or at least there was no proof it wasn't. Slip op. at  6. The flaws the property owners pointed to were "perceived" and not actual flaws, and the resulting studies were "adequate." And as we know, that's enough to satisfy a court when the government is involved.

On the more interesting issue of whether "adjustment" means only an upwards adjustment of rent, the court had this to say:

Nothing in the applicable statutory language explicitly requires that the Board adjust the rent upward rather than downward as petitioners claim, and petitioners' argument as to why such a requirement should be implied is less than compelling.

Slip op. at 7. That's it. Exactly why that is so, the court does not really explain.

And a blanket downwards "adjustment" was just fine, and no individualized determinations were necessary: if you don't like how this works on your property, property owner, you can appeal.

As we've always thought, facial claims are tough. But find a situation in which a downwards adjustment (or even an inadequate upwards adjustment) forces a property owner to operate in the red (and the owner has the resources, financial and emotional, to push it), or where an owner who wants to exit the rental market and is prohibited from doing so by the law, and you've likely got a different case.

Hudson Valley Property Owners Ass'n Inc. v. City of Kingston, No. CV-23-0327 (N.Y.A.D. Mar. 21, 2024)

APA Program: "Planning Law Careers in Land Development" (Wed, Mar 27, 2024)

If you've been around us long enough, you know that we're big into the notion of "generational handoff" and doing what we can to make sure that students and others who are building their careers realize that dirt law and related topics are very good areas in which to find your way.

Well, here's the latest -- a free webinar from the American Planning Association's Planning and Law Division:

Second in a series of webinars aiming to answer student questions about career paths in the planning and law field, this webinar focuses on individuals working, or interested in working, in developing the built environment. Developers, as the main constructors of the built environment, must be familiar with urban conditions and the legal requirements that govern building on or redeveloping land. In-house counsel for development firms help their clients navigate through legal matters related to developing the built environment. Join us for a 90-minute discussion with four expert panelists, covering topics that include possible career paths in the private sphere, changes in the planning and law field over the years, and the experience and skills needed to enter the field, all with a focus on developers and in-house counsel. This webinar is for students, young professionals, and anyone who is interested in learning more about where a degree in planning, law, or both can take you in the private sphere.

Details:

Date: Wednesday, March 27, 2024
Time: 10:30 a.m. - 12:00 noon EDT
Cost: Free
Registration: https://www.planning.org/events/eventsingle/9286709/

Speakers:

Kyle McClammer
General Counsel of The Garrett Companies

Ricqui Brager, AICP
Planner with the Regional Planning & Environmental Center (RPEC) of the U.S. Army Corps of Engineers, Fort Worth District

Leona Hammill
Leona Hammill joined NewQuest Properties in 2015 and has served as General Counsel since 2021

Brodie Smith
Brodie Smith is a project manager for Thrive Home Builders in Denver, Colorado

Register and attend!

New Article: "Fines, Forfeitures, and Federalism" (Jessica Asbridge)

When it comes to property rights, we're most often focused on takings, compensation, and due process. But as you all know, the concept of property rights encompasses a whole lot more.

Our colleague, lawprof Jessica Asbridge, has posted on SSRN an article that is forthcoming in the Virginia Law Review, "Fines, Forfeitures, and Federalism," in which she delves into the question of how the Excessive Fines Clause applies to state and local forfeitures and fines. To resolve the federalism concerns she identifies, the article argues that courts "should look to the exactions doctrine under the Takings Clause."

Count us as intrigued.

Here's the Abstract:

Fines are ubiquitous in modern society, and they are imposed for both serious crimes and minor civil wrongs. The U.S. Supreme Court recently recognized that the Constitution’s Excessive Fines Clause applies to the states, but that decision raises previously unexplored questions as to how to enforce the Clause’s protections in the states. A key question is what role, if any, federalism should play in crafting doctrinal rules that apply the Clause’s protections to state and local fines and related property forfeitures. This Article is the first to accord in-depth treatment to that important question.

The extent to which federalism principles should apply does not have an immediate and obvious answer. On the one hand, federalism plays a significant role in the Court’s jurisprudence on the Cruel and Unusual Punishment Clause. The Court therefore generally takes a highly deferential approach in reviewing sentences of imprisonment. Lower courts have applied that same deferential review in the context of the Excessive Fines Clause. On the other hand, fines and forfeitures are unlike other forms of punishment—such as prison—because they are often used as a revenue source for state and local governments, creating a conflict of interest for state and local decision-making bodies.

To address this conundrum, this Article makes the novel argument that the Court should look to the exactions doctrine under the Takings Clause, which often implicates similar concerns of government self-interest and overreaching. Exactions and excessive fines are conceptually similar, but scholars thus far have overlooked the close relationship between them. The exactions doctrine gives minimal weight to federalism concerns, and it applies a heightened-scrutiny standard that is well suited to the excessive fines context. Indeed, differences between federal practice and state and local practices as to fines suggest that discretionary state and local fines should be subject to closer constitutional scrutiny than federal fines. As a recent example illustrates, such heightened scrutiny would ensure that the Excessive Fines Clause is not merely a parchment barrier, while still accounting for variations between states and localities in terms of their communities’ values and needs.

Check it out. Download your copy on SSRN here.

Too Soon For CA5 To Figure Out Whether City Demolishing Property For Code Violations Is A Taking

In Rhone v. City of Texas City, No. 22-40551 (Feb. 14, 2024), the U.S. Court of Appeals for the Fifth Circuit held that a municipality's conclusion that Rhone's apartment building had not been properly maintained, and a subsequent municipal court demolition order, might be a taking ... or it might not be.

We won't get too far into the facts, except to say that Rhone argued that the city had it out for him, and that the municipal court judge who issued the demolition order was in a contractual relationship with the city by which the judge had to submit for approval all of the court's decisions to the city attorney (the very party pressing the nuisance claims against Rhone). Weird, but apparently a product of Texas law. Short story, according tot the court: "[a]ll of this, facially at least, is a declaration of a lack of independence of judge and city." Slip op. at 12. Yowza!

The district court deemed any pecuniary interest the judge may have had as "de minimis," but the Fifth Circuit noted that "[t]here is evidence that the City Attorney has final authority on what the order on his own petition for abatement would say." Slip op. at 13. Thus, the court ordered a "limited remand" to the district court for a determination of whether the municipal court's demolition order was or was not the product of independent decision-making. If it was, Rhone's constitutional claims would not survive. But "[i]f that premise changes, this opinion will as well." Slip op. at 13. In other words, if the judge's decisions were too tightly controlled by the city -- one of the parties to the very litigation the judge was deciding -- then there might be something there.

The court also rejected the city's argument that the demolition of the building rendered the takings claim moot. "Importantly, demolition of the apartment buildings does not eliminate a takings claims; indeed, it may create one. See Knick v. Twp. of Scott, Pa., 139 S. Ct. 2162, 2167 (2019). This right allows for the property owner to have “some way to obtain compensation after” the government’s unconstitutional actions. Id. at 2168." Slip op. at 7.

So what did the court say about Rhone's takings claim? Jump forward to page 13 for this:

Our limited remand will keep open the issue of whether the Municipal Court’s determination that the property was a nuisance and allowed demolition was not the result of sufficiently independent decision-making. The remainder of the opinion is premised on the Municipal Court’s decision’s being a valid one. If that premise changes, this opinion will as well.

Rhone challenges the district court’s dismissal of his Fifth Amendment takings claim, saying there are fact issues requiring a trial. A property owner may bring a Fifth Amendment takings claim under Section 1983 as soon as the government takes his property without just compensation. Knick, 139 S. Ct. at 2170. Rhone maintains he was subjected to a taking without compensation by the City’s imposing of unnecessary and expensive repair obligations before Rhone would be allowed to use his property; by requiring he keep the property vacant; and by interfering with his efforts to repair, sell, or otherwise address the identified deficiencies in the property. This claim relies on the City’s actions prior to the Municipal Court’s order of abatement that allowed the property’s demolition. Rhone’s legal argument includes that these compliance costs were invalid under the doctrine of unconstitutional conditions. See Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595 (2013).

Slip op. at 13-14.

The court concluded that what Rhone was pressing was not really an unconstitutional conditions takings claim (because, after all, the city wasn't really forcing him to choose between two rights, but was merely telling him to stop using his property as a nuisance). But the court noted, that "[t]o be fair, Rhone is not disputing that." In short, the essence of his claim is that the city's safety officials who concluded his property was a nuisance should not have been given unreviewable authority to make that determination. See slip op. at 15.

In the end, this doesn't really look all that much like a takings claim after all does it? On that, the opinion sort of wanders away into other civil rights territory, without a clear statement of what happens to the takings claim after remand. Check out pages 15 and 16 if you doubt us. We think the takings claim survives, based on the court's earlier statement that "[i]f that premise [the judge/city relationship] changes, this opinion will as well." Slip op. at 13. But maybe not.

The common law litigation process was all about narrowing, winnowing, and processing claims by forcing them into predefined forms with their own remedies. Did that occur here? Hard to say. 

Rhone v. City of Texas City, No. 22-40551 (5th Cir. Feb. 14, 2024)

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

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

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

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

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

Excitement this way...

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

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

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

Here's more. 

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

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

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

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


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


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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

DC App: $350k Loss In Value Due To Home's Historic Designation Not A Penn Central Taking

The DC Court of Appeals' (note: not the U.S. Court of Appeals for the D.C. Circuit) opinion in Gordon v. District of Columbia, No. 20-CV-0568 (Feb. 15, 2024), presents a good cross-section of property rights issues. Not a good outcome on property rights issues, mind you.

If nothing else, be sure to check out the outrageous facts in the case. They will make your toes curl. 

The Gordon brothers own a home in the District, in the Forest Hills area. They didn't want to be owners of this home, and instead wanted to sell it. Consequently, they took some of the usual steps one takes when one wants to sell a home - they retained a real estate agent, authorized certain entries for looky-looks (but did not ok free access or open house showings), and the like.

This aroused the ire of some of the area's residents, who were "[c]oncerned that the property was being sold as a development opportunity" and did what people like this do: they nominated the home for historic landmark designation.

One of these buttinskys even went so far as to retain her own real estate agent (who is also the president of the Forest Hills Neighborhood Alliance) so she could pose as an interested buyer and obtain access to the inside of the house for an intel-gathering view. Believing that Ms. Buttinsky was a genuine potential buyer, the Gordons allowed unaccompanied access to her and her real estate agent. A second pretextual access also occurred during which an official with the District's Historic Preservation Office, the agency tasked with designating properties as historic landmarks, and several "friends and colleagues" -- accompanied the interloper for what the official termed a "site visit." Slip op. at 3.

Next thing you know, Ms. Buttinsky informed the Gordons' real estate agent that she was preparing an application to designate the property as a historical landmark. Then, "[o]n May 11, 2015, the Forest Hills Neighborhood Alliance submitted a petition, drafted partly by Ms. Berk, nominating the Gordon house to be designated a historic landmark. Around this same time, Ms. Berk was awarded a lifetime achievement award by the [Historic Preservation Review Board]." Slip op. at 6.

After even more questionable shenanigans (read pages 6-8 of the opinion for some astounding details), the Board approved designation of the Gordons' house as a historical landmark. Did the approval have an effect? You bet, an immediate one:

Before the designation, the Gordons had received an offer to purchase their home for $1.55 million dollars, but that offer was withdrawn the day after the Historic Preservation designation. The same buyers later made the Gordons another offer for $1.2 million dollars; they cited the landmark designation as the reason for their reduced offer.

Slip op. at 8.

Lawsuit followed. Claims included takings (natch), due process, and search-and-seizure violations. The trial court dismissed some of the claims for failure to state a claim, and granted the District summary judgment on the remainder of the claims. Next, the Gordons appealed to the DC Court of Appeals.

The Gordons asserted that the historic preservation official's entry into their home violated the Fourth Amendment and was a trespass. The trial court rejected the claim because it was Ms. Buttinsky who let the official on the premises, and the official asserted she believed Ms. Buttinsky had apparent authority to do so. And this wasn't an investigation into a crime. Concluding that there was no violation of "clearly established" law, the trial court dismissed. Qualified immunity strikes again.

The appeals court held that it didn't matter why the official entered the property, only that she did. Next, the court seemed to be heading toward rejecting the District's argument that it couldn't be liable unless the official violated some clearly established prohibition. In other words, some court must have already said that this kind of behavior was illegal. The court noted that no other court had done so in this precise situation, but that "this court spoke to the issue of apparent authority over property with sufficient specificity" in a 2023 case, such that the officials are now on notice that this kind of conduct is illegal. Slip op. at 18.

This principle applies with obvious clarity to the facts presented here and compels the conclusion that the nature of Ms. Warner’s access to the Gordon home was clearly limited to her role as a real estate agent, not a preservationist. It was therefore unreasonable for Ms. Williams to believe that Ms. Warner had the apparent authority to consent to her entry into the Gordon home for an HPO site visit. Ms. Williams was aware that Ms. Warner was “not the listing agent,” but instead a “sympathetic” agent “who want[ed] to save” the Gordon home, and she was aware that Ms. Berk had arranged the tour not because she was considering buying the home, but because she was “strategizing its rescue” and wanted to take photos for the historic nomination application.

Slip op. at 19.

Things seemed to be looking the Gordons' way. But then the court held that this 2023 case was decided after the official had entered the Gordon property, and thus it was not clearly established at the time she did so that it was wrong. Thus, the court concluded, she is entitled to immunity. We'll get you next time!

But what about the District's liability for its employee's illegal entry? Nope there as well. The complaint didn't allege that there was some official District policy to do this and that omission was fatal. The only claim the court allowed to go forward was the common law trespass claim against the official. The court rejected the trial court's conclusion that the official was entitled to qualified immunity, holding instead that QI "does not shield government officials from liability for common law torts, like a claim of trespass." Slip op. at 26.

Now on to the takings claim. As noted above, the complaint alleged that the designation of the Gordon home as a landmark resulted in a loss of the value of the property of $350,000, as evidenced by that lost sale and new lower offer. The trial court dismissed because the complaint did not plead anything about alternative economic uses of the property. (In other words, the complaint didn't allege that every other possible use of the property was not economically beneficial.)

But wait, the owners argued, we're arguing "that the court erred by . . . applying what they construe to be a categorical rule for assessing the occurrence of a total taking, rather than the multi-factor inquiry for partial takings[.]" Slip op. at 33. No deal, held the appeals court. To press a Penn Central claim, you must allege that there are no other alternative uses that are economically beneficial. Slip op. a 34.

Indeed, the court expressly considered both the fact that the Gordons had alleged the historic designation of their home reduced its value by $350,000, and the fact that they still had an offer to purchase the home, albeit at a reduced price—$1.2 million as opposed to $1.5. million. Lastly, we note that the Gordons have failed to explain what factor under the fact-specific Penn Central test the Superior Court should have considered but did not that would have made a difference in the court’s analysis. For all of these reasons, we affirm the court’s determination that the Gordons failed to allege facts sufficient to support a takings claim.

Slip op. at 35.

So there is is. What looks to us like outrageous government conduct mostly gets a pass.

And the Penn Central pleadings trap continues it yeoman's work keeping takings claims from being determined on the merits. 

Gordon v. District of Columbia, No. 20-CV-0568 (D.C. App. Feb. 15, 2024)

2024 Distinguished Gifford Property Lecture - Professor Carol N. Brown (Richmond Law) (March 12, 2024, U. Hawaii Law School)

Join us and our Land Use class, in-person on the campus of the University of Hawaii Law School (or online via Zoom, where it will be livestreamed), as Richmond Law lawprof Carol Brown delivers the 2024 Distinguished Gifford Lecture in Real Property, on March 24, 2024, at 4:40 p.m. Hawaii Time in the Cades Schutte classroom.

Her talk is titled "Affordable Housing A to Z" and is very timely. More details on this flyer.

Made possible by the generosity of one of Hawaii's premiere dirt law firms, Carlsmith Ball, LLP.

Space is limited, so please RSVP here.

2024 Distinguished Gifford Property Lecture - Professor Carol N. Brown (Richmond Law) (March 12, 2024, U. H...

SCOTUS Denies Review To Remaining Rent Control Takings Petitions: "Important and pressing question" (Just Not In This Case)

Yesterday, the other shoe dropped. In this order the U.S. Supreme Court denied review to a case that we've long been following, which challenged aspects of New York's draconian rent control laws as a taking, 74 Pinehurst v. New York.

We say the "other shoe" because ever since the Court denied review months ago to other challenges to rent control (yet kept relisting Pinehurst, which was always among the two strongest of the multiple challenges), it appeared this round of petitions was doomed, and the Court was holding off denying review, to allow one or more Justices to write something. To us, it was unlikely that the Court would deny some of the petitions outright, while at the same time agreeing to take up the issue in another case. Grant-and-hold seemed the most likely scenario there. Absent that, we didn't expect these last two to be granted. 

So count us as not surprised. But as some have noted, there might be a silver lining in this last disappointment. Justice Thomas, while agreeing with the Court to deny review in Pinehurst, wrote a short statement in which he offered his thoughts. It isn't long, and you should read it:

Here's the entire thing:

Petitioners are owners of small and midsize apartment buildings who challenge New York City’s rent stabilization laws. Among other things, they argue that New York City’s regulations grant tenants and their successors an indefinite, infinitely renewable lease terminable only for reasons outside of the landlord’s control. Petitioners argue that they have suffered a per se taking as a result. The constitutionality of regimes like New York City’s is an important and pressing question. There are roughly one million rental apartments affected in New York City alone. See Pet. for Cert. in No. 22–1130, p. 1; Brief in Opposition for City of New York et al. in No. 22–1130, p. 4. And, the Courts of Appeals have taken different approaches: The Second Circuit rejected petitioners’ takings claims at the pleading stage, but at least one other Court of Appeals has accepted similar claims. Compare 59 F. 4th 557 (CA2 2023) (case below), with Heights Apartments, LLC v. Walz, 30 F. 4th 720 (CA8 2022).

The pleadings in these petitioners’ cases, however, would complicate our review. The petitioners’ complaints primarily contain generalized allegations about their circumstances and injuries. But, to evaluate their as-applied challenges, we must consider whether specific New York City regulations prevent petitioners from evicting actual tenants for particular reasons. Similarly, petitioners’ facial challenges require a clear understanding of how New York City regulations coordinate to completely bar landlords from evicting tenants. The pleadings do not facilitate such an understanding. However, in an appropriate future case,we should grant certiorari to address this important question.

So what to make of this. A roadmap for a future case as some have suggested? The holding out of false hope and an invitation to more failed challenges to New York's scheme, and a way of slow-walking the continued validity of rent and vacancy controls as others have claimed? Or maybe a clue to stop focusing on New York for takings and other challenges to rent control because it is too complex and too ingrained in the social fabric?

We're not entirely sure. Probably could never be sure, unless we could arrange a meeting with Justice Thomas and ask him a few questions, and that ain't likely to happen.

But here's how we're taking it.

First, we are taking it at face value. Justice Thomas said that it's a good issue, teed up and ready, and there's even a lower court split. That's usually the promised land for SCOTUS review. But, he noted, the way this case was pleaded made it an unworthy vehicle. Get that, lawyers: the way the complaint was pleaded. Pleaded! It it just us, or are property rights cases fertile grounds for Field Code special pleading, giving us a sense of what medieval writ practice must have been like? It seems we need to plead these claims with a specificity not required in other matters, well beyond the notice pleading our Civil Procedure professors told us was the standard.

Well, with that rant out of the way, let's assume that Justice Thomas is right, and there's a way to draft a complaint to actually, you know, state a claim that a rent or vacancy control is a taking. His as-applied scenario suggests a case that has gone through the eviction-court wringer. Get ready to exhaust, property owners! This sounds like Justice Thomas is suggesting that before a takings claim would be ready, the complaint must plead facts to show who, how, and why the lessor has tried to get a tenant out, but the rent/vacancy control regulations have prevented that. The "particular reasons" he notes seem like the big ones: failure to pay rent, being a danger to other occupants, destroying the property. We often hear lessors say "going through the eviction process is futile, and a waste of time and money, when all I want it to either get the rent flowing again, or the premises returned to me so I can fix it back up and re-rent it." Maybe so, but apparently Justice Thomas believes that a legal challenge to tenant regulations is not going to be ready unless and until you go through the process and come up empty.

Second, we thought the Pinehurst complaint did a pretty good job of cutting through the complex fog that is New York's rent regulations, if that is even possible given its byzantine structure and requirements. But apparently not enough for a "clear understanding of how New York City regulations coordinate to completely bar landlords from evicting tenants." If those pleadings were not enough, what could be? Maybe here, Justice Thomas is suggesting that we look outside of New York for the case. New York may have the most well-known and (in)famous scheme, but it isn't by far the only such scheme in the nation. Identify the relevant issues (physical occupations, re-writing of the lessor/lessee contracts, and turning private rental stock into what is effectively public housing), and look beyond the Hudson for cases.

So what to make of all this? On one hand, the Court's denial is not all that surprising since the weight of statistics is never favorable, and from a practical standpoint, the Court might be reluctant to wade into an issue that would certainly draw political fire, however it ruled. Rent control is so woven into the fabric of New York, it often seems politically impossible to unweave it. On the other hand, the entire notion of rent and vacancy controls -- which started as a temporary emergency measure designed to deal with the flood of returning doughboys from the battlefields of WWI Europe, but has morphed over the past century into a private subsidy that insulates certain protected occupants from market forces -- is ripe for a recoking. Subsidizing tenants may be a public benefit, but if so, shouldn't the entire public bear the freight?

In today's parlance, this is not "sustainable," and someone is going to be left standing when the music eventually stops. The Court will have to face it, one day. Just not today.

That being said, the final word is this: we're ready to follow Justice Thomas's roadmap. If you may have a case, give us a call.

Statement of Justice Thomas respecting the denials of certiorari, 74 Pinehurst, LLC v. New York, No. 23-113...

Sad 191st Birthday To You, Barron v. Baltimore (Feb. 16, 1833) - The First SCOTUS Takings Case?

Today's the day, 191 years ago, when -- a mere 5 days after oral arguments -- the U.S. Supreme Court issued its (in)famous opinion in Barron ex rel. Tiernan v. Mayor and City Council of Baltimore, 32 U.S. 243 (1833).

Generations of law students study this one in their Con Law classes, and it is mostly known as the case which held that the Bill of Rights limits only the federal government and does not limit the power of states. For the latter, one must look to state constitutions. Barron, of course, was overruled or otherwise neutralized by the Fourteenth Amendment (privileges or immunities clause or the due process clause, take your pick).

But the reason we're posting our sad birthday wishes today isn't for that reason, but more because in our estimation, Barron was the first "takings" case considered by the U.S. Supreme Court.

The case was instituted by the owners of a mostly-prosperous wharf on Baltimore Harbor against the City of Baltimore. The municipality had undertaken street upgrades and improvements on one of the city's several hills nearby, which resulted in increased runoff into the harbor and the eventual silting up of the plaintiffs' wharf. And guess what happens when a wharf loses its access to the water? Well, it's not really a wharf any longer, is it.

Next up, a claim against the city for what today we'd call an inverse condemnation or maybe a takings claim. Your actions, Baltimore, destroyed the use and value of our property, a wharf. As the claim worked its way up the judicial food chain, it morphed from a more common-law vibe to a constitutional question: did the Fifth Amendment require that the city provide just compensation if indeed its actions effectively had taken the plaintiffs' property?

As the opinion put it:

The plaintiff in error contends that it comes within that clause in the fifth amendment to the constitution, which inhibits the taking of private property for public use without just compensation. He insists that this amendment, being in favour of the liberty of the citizen, ought to be so construed as to restrain the legislative power of a state, as well as that of the United States.

Barron, 32 U.S. at 247.

Remember, this was a time when no one really knew whether the limitations on government in the Bill of Rights was something that was supposed to apply to all governments, state and federal, or were only intended to limit the federal government (as in, say, the First Amendment, where the phrasing was "Congress shall make no law...").

As we know, it turned out badly for the property owner plaintiffs. Sorry, Chief Justice Marshall held (in the final opinion in his long career), the Bill of Rights only limits the federal government. If you want protection from your state (or local) governments, you can look to your state constitutions. Relying on no cited authority whatsoever, in the Chief's words:

The constitution was ordained and established by the people of the United States for themselves, for their own government, and not for the government of the individual states.

Id. The Chief relied on a maxim of statutory construction, concluding that if the ratifiers of the amendments wanted them to apply to the states, they would have said so. 

In light of Mr. Justice Marshall's track record on the Court of being a pretty hard-core "national" guy (his more famous rulings, after all, were all about the power of the Constitution to forge a strong, continent-wide national government, in which the states had their places), you might have been a bit surprised that he was a poodle when it came to bringing states to heel when it came to individual rights. So what gives, JM?

For some answers -- and a great backstory of the case and some its more famous personalities such as Roger Taney, Esq. -- you could not do better than Professor William Davenport Mercer's "Diminishing the Bill of Rights: Barron v. Baltimore and the Foundations of American Liberty" (U. Okla. Press 2017). Professor Davenport details the case, and the arguments. But also sees the decision in the larger context and asks the vital question: why did the Court rule the way it did?

We are of opinion that the provision in the fifth amendment to the constitution, declaring that private property shall not be taken for public use without just compensation, is intended solely as a limitation on the exercise of power by the government of the United States, and is not applicable to the legislation of the states. We are therefore of opinion that there is no repugnancy between the several acts of the general assembly of Maryland, given in evidence by the defendants at the trial of this cause, in the court of that state, and the constitution of the United States. This court, therefore, has no jurisdiction of the cause; and it is dismissed.

Id. at 250-251.

Here's the book's description:

The modern effort to locate American liberties, it turns out, began in the mud at the bottom of Baltimore harbor. John Barron Jr. and John Craig sued the city for damages after Baltimore’s rebuilt drainage system diverted water and sediment into the harbor, preventing large ships from tying up at Barron and Craig’s wharf. By the time the case reached the U.S. Supreme Court in 1833, the issue had become whether the city’s actions constituted a taking of property by the state without just compensation, a violation of the Fifth Amendment to the U.S. Constitution. The high court’s decision in Barron v. Baltimore marked a critical step in the rapid evolution of law and constitutional rights during the first half of the nineteenth century.

Diminishing the Bill of Rights examines the backstory and context of this decision as a turning point in the development of our current conception of individual rights. Since the colonial period, Americans had viewed their rights as springing from multiple sources, including the common law, natural right, and English legal tradition. Despite this rich heritage and a prohibition grounded in the Magna Carta against uncompensated state takings of property, the Court ruled against Barron’s claim. The Bill of Rights, Chief Justice John Marshall declared in his opinion for the majority, restrained only the federal government, not the states. The Fifth Amendment, accordingly, did not apply to Maryland or any of the cities it chartered.

In explaining how the Court came to reject a multisourced view of human liberties—a position seemingly inconsistent with its previous decisions—William Davenport Mercer helps explain why we now envision the Constitution as essential to guaranteeing our rights. Marshall’s view of rights in Barron, Mercer argues, helped him navigate the Court through the precarious political currents of the time. While the chief justice may have effected a shrewd political maneuver, the decision helped hasten a reconceptualization of rights as located in documents. Its legacy, as Mercer’s work makes clear, is among the Jacksonian era’s significant democratic reforms and marks the emergence of a distinctly American constitutionalism.

We read it a while ago, and do recommend it. It is a real-eye opener. 

And over the past 191 years, history has not been kind to Barron. The Civil War was the end-product of Barron's vibe, one might say. And the Fourteenth Amendment expressly recognized that indeed, states are limited by the Constitution, and that our civil liberties and freedoms are not only acknowledged in state constitutions.

If there was any doubt, the takings aspects of Barron ended up in history's dustbin with the Chicago Burlington case, which held that indeed, states and their instrumentalities are bound by the Fifth Amendment's requirement of just compensation. And whatever might have been left of Barron was finally left fully behind in Pennsylvania Coal.

So happy... er sad birthday, Barron v. Baltimore!

Barron ex rel. Tiernan v. Mayor and City Council of Baltimore, 32 U.S. 243 (Feb. 16, 1833)

Today, 12:30pm ET: Professor's Corner - Legislative Exactions & Sheetz v. County of El Dorado (ABA RPTE)

Join us at 12:30pm ET today, Tuesday, February 13, 2024, for the ABA's Section of Real Property, Trust and Estates' monthly Professor's Corner, where we will join exactions experts Prof Tim Mulvaney, Andrew Gowder, and Prof Elizabeth Elia to discuss the Supreme Court arguments, the issues in the case, and what may be down the road.

Here's the description:

Can legislative action constitute an exaction subject to the Nollan/Dolan/Koontz test? In his concurrence to the Supreme Court's 2016 denial of certiorari in California BIA v. City of San Jose, Justice Thomas made clear that he was eager to examine this issue. Justice Thomas's wait is over; the Supreme Court granted certiorari to address this very question during the 2024 session in the case Sheetz v. Co. of El Dorado. Our expert panel will discuss all sides of this extremely interesting case and its implication for takings jurisprudence.

Free, but you gotta register. Join us!

The Public Use Requirement Is Self-Executing: "In a free society, we should not expect that when a court tells the government that a taking is illegal and unconstitutional, that it would just go ahead and seize the property anyway."

The historic Supreme Court of North Carolina.

Here's the latest in a somewhat strange case we've been following about what happens after a court determines that a taking lacks a public use -- but the condemnor goes ahead and just seizes the property anyway.

The Town of Apex, North Carolina, sought to take an easement across Rubin's land. She objected, asserting the taking was not for a public use or purpose, but rather to benefit a private party: a developer who needed the easement to connect two of his non-contiguous parcels to the municipal sewer system, a precondition of the Town's development approvals for his proposed residential subdivisions.

While Rubin's public use objection was pending, the Town went ahead at installed the sewer line, purportedly under its quick-take power. That was not the best of moves, however, because the courts eventually agreed with Rubin that the taking violated the public use requirement. (We say "public use requirement" because Rubin's objections were both under the U.S. Constitution's Public Use Clause, as well as the North Carolina Constitution, which, as you may recall, does not contain an express takings clause. But North Carolina has long recognized that the public use and just compensation limitations on eminent domain power govern, under the N.C. Constitution's "Law of the Land" Clause.) More details in our earlier post on the case.

So here's the situation: the Town is now illegally occupying Rubin's property. Now what? The Town argued it was fait accompli -- all you can do is sue us for just compensation in an inverse action. Or maybe you can sue us in a common law tort trespass action to get us off your property by way of separately seeking a writ of ejectment, or an injunction. (Rubin hadn't done either of these.) She argued that she didn't need to do that, and the court in the eminent domain action had all it needed to order the Town to get off her land.

In Town of Apex v. Rubin, No. COA20-403 (May 4, 2021), the North Carolina Court of Appeals was horrified by the Town's actions. The three-judge panel held, "[t]his is not the law, nor can it be consistent with our Federal and State Constitutions[,]" "[t]he Town’s argument is not supported by the facts or the law[,]" and "the public purpose requirement serves as a shield to protect the landowner from government intrusion rather than as a sword to cut away private property rights," and accepting the Town's arguments would, "open the door to numerous constitutional harms[.]" 

All good, right? See ya later, Town of Apex?

Not so fast. The court also concluded that although the Town grossly exceeded its powers and violated Rubin's rights, Rubin had not sought the proper remedy, and in order to get the Town off her property, she needs to sue it in trespass (and win):

The question remains whether the trial court correctly concluded that the Judgment precluded mandatory injunctive relief. We hold that the trial court erred in this respect. While Ms. Rubin is not entitled to post-judgment mandatory injunctive relief in the direct condemnation action, she may bring a trespass claim against the Town in pursuit of the mandatory injunctive relief she seeks. We therefore vacate the trial court’s orders insofar as they preclude the availability of mandatory injunctive relief, but we ultimately affirm the trial court’s denial of Ms. Rubin’s motion to enforce the Judgment.

Slip op. at 31.

Neither party was happy with that outcome. The Town sought discretionary review in the N.C. Supreme Court, while Rubin conditionally cross-petitioned. The North Carolina Supreme Court granted both petitions.

This morning, the North Carolina Supreme Court allowed our motion to file this amicus brief in support of Rubin. Because this is (now) a case we're participating in, we won't go into much detail. But here's how the brief summarizes the case:

In a free society, we should not expect that when a court tells the government that a taking is illegal and unconstitutional, that it would just go ahead and seize the property anyway. Yet that is exactly what the Town of Apex did. Having been told it was acting unconstitutionally, it did not do the right thing and stand down. Instead, its only response to the court’s lawful order that the taking lacked a public use was to occupy Ms. Rubin’s land, and then claim it was too late for Ms. Rubin or the court to do anything about it. This isn’t the rule of law, but predatory government conduct that a court has the power to address even in the absence of the property owner’s trespass claim.  

This case is an opportunity to reaffirm a foundational principle of limited government: the sovereign power of eminent domain does not extend to taking private property for private use, and the Town’s attempt to do so was utterly void—not merely voidable. Neither North Carolina’s Law of the Land Clause, nor the U.S. Constitution’s Public Use Clause, is so toothless that it permits the Town to purposely violate Ms. Rubin’s property rights, with the court powerless to do anything unless and until she pursues and wins a common law trespass claim.

Underlying the Court of Appeals decision is the incorrect assumption that the Town’s invasion and occupation of Ms. Rubin’s land was a run-of-the-mill tort, redressable solely by a separate trespass action. But exercising the sovereign power of eminent domain to seize property—especially after the courts have held that the taking is not appropriate—is not merely a civil wrong, but the government acting well outside its constitutionally delegated powers. This principle goes back to the foundation of this nation. See, e.g., Calder v. Bull, 3 U.S. (3 Dall.) 386, 388–89 (1798) (“It is against all reason and justice for a people to entrust a legislature with such powers [to take property for another’s private use], and therefore it cannot be presumed that it has done it.”). Put another way, in addition to recognizing a property owner’s individual civil right to keep and use their property unless a taking is for public use, the public use requirement acknowledges an inherent limitation on sovereign power: takings for private benefit are simply beyond the power of government. In other words, the public use requirement is self-executing and does not merely give rise to a cause of action in trespass. As such, the courts of North Carolina, like any other, inherently have the power to enforce it.

Thus, once the court in the eminent domain action determined that the Town’s attempt to take Ms. Rubin’s property for private benefit was an illegitimate exercise of governmental power, she need have done nothing more. As a party which acted unconstitutionally and in derogation of fundamental property rights, the Town—and not the innocent property owner—bore the risk when the Town installed the sewer line. The Town thus also bears the affirmative burden to remove it when its gamble that it could install the sewer line, contrary to the court’s order, went bad.

More on the case from Mitch Kokai (John Locke Foundation): "Apex sewer pipe fight sends clear message about property rights."

We'll bring you more as things progress.

Brief of Amicus Curiae Pacific Legal Foundation, Town of Apex v. Rubin, No. 206PA21 (N.C. Feb. 8, 2024)

Ohio: We Really Meant It When We Remanded For Weighing Of Evidence - Appeals Court Had No Business Dismissing

A quick per curiam from the Ohio Supreme Court.

In State ex rel. AWMS Water Solutions, LLC v. Mertz, No. 2023-0125 (Ohio Jan. 24, 2024), the court issued a gentle (or maybe not-so-gentle) "benchslap" to the court of appeals. Here's the scenario.

First of all, recall that Ohio does not recognize a claim for "inverse condemnation" or "regulatory taking." Instead, if a property owner believes that the government has de facto taken property but has not provided just compensation, the owner seeks a writ of mandamus asking the court to compel the government to institute an eminent domain action (what CJ Roberts calls "an upfront taking").

AWMS thought this was the case and sought a writ to compel Mertz, an official with the state Department of Natural Resources, to take and pay. The court of appeals entered summary judgment for Mertz, but the Ohio Supreme Court held that the case should be tried. "In an earlier appeal, we reversed the court of appeals’ grant of summary judgment in favor of the state and remanded the case to the court of appeals with directions to weigh the parties’ evidence relating to AWMS’s total-takings and partial-takings claims." Slip op. at 1.

On remand, the court of appeals held a nine-day trial. [Sidebar: it is interesting that in Ohio, a three-judge panel of the court of appeals conducts trials.] So far, so good. But at the close of the evidence, "the court of appeals again ruled in favor of the state and denied the writ. This time, the court of appeals held that AWMS did not have a cognizable property interest for purposes of a takings analysis." Id. It denied the writ. Foiled again!

AWMS sought Ohio Supreme Court review, and requested oral argument.

The court said no (to the request for oral argument, that is). We don't need to hear more to conclude that the court of appeals wasn't listening to us when we said to WEIGH THE PARTIES' EVIDENCE. "[T]he court of appeals failed to follow our remand order and violated the law-of-the-case doctrine by sua sponte revisiting the issue whether AWMS possessed a cognizable property interest for Takings Clause purposes." Slip op. at 6.

The Supreme Court didn't seem that happy with the appeals court:

It is axiomatic that an inferior court lacks jurisdiction to depart from a superior court’s mandate. State ex rel. Heck v. Kessler, 72 Ohio St.3d 98, 104, 647 N.E.2d 792 (1995). In AWMS, we reversed the court of appeals’ grant of summary judgment to the state and remanded the case specifically for the purpose of conducting the proper takings analysis. In this regard, we did not leave the court of appeals’ task open-ended. Rather, we specified that the court of appeals “must weigh the parties’ evidence relating to AWMS’s total-takings claim” and “must weigh the parties’ evidence in accordance with this opinion and balance all three Penn Cent.[, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631] factors to determine whether AWMS suffered a partial taking.” (Emphasis added.) AWMS at ¶ 88-89.

{¶ 20} The court of appeals did not follow our instructions. Instead, after a trial and posttrial briefing, the court of appeals sua sponte ordered the parties to file supplemental briefs on the threshold issue of whether AWMS has a cognizable property interest that is compensable under the Takings Clause.

Slip op. at 7.

The court didn't really deal with the court of appeals' legal conclusion (AWMS has no property interest) other than to say "we already decided that." Slip op. at 11 ("it is the law of the case that AWMS possesses a cognizable property interest in the leasehold right").

Although this opinion is really more about law of the case than about takings, there's a good lesson here. The Ohio Supreme Court saw this case as one about facts (as most Penn Central takings claims inherently are). Having so concluded -- and apparently treating this takings claim like any other civil claim, and not one subject to judges imposing their own views of the law -- the court rebuked the court of appeals for not understanding that these are factbound claims, not generally resolved by law.

"Ad hoc factual inquiry" rules the day!

State ex rel. AWMS Water Solutions, LLC v. Mertz, No. 2023-0125 (Ohio Jan. 24, 2024)

New Article: Missed Opportunities in State Takings Challenges to Pandemic-Era Restrictions (Brennan Center's State Court Report)

Thank you to the Brennan Center for Justice at NYU Law School's State Court Report (#statecourtreport) for publishing our piece "Missed Opportunities in State Takings Challenges to Pandemic-Era Restrictions." The title gives a hint about what this is about: how state and local government's reaction to Co-19 spurred challenges not only under the U.S. Constitution, but under state constitutions. We give examples of -- and comment on -- missed opportunities and out-and-out errors in several approaches.

Here are the opening paragraphs:

Responding to the Covid-19 pandemic, the federal government and many state and local governments imposed a variety of restrictions on individuals and businesses. The Centers for Disease Control and Prevention, for example, purported to suspend the ability of property owners to evict nonpaying tenants — a move the U.S. Supreme Court rejected as beyond the agency’s power. State and local governments adopted similar eviction moratoria, and many directed businesses to close or curtail operations. Litigation followed.

Much of that litigation focused on the federal Fifth Amendment’s requirement that the government provide just compensation when it takes private property for public use. Property and business owners have generally been unsuccessful in pressing federal takings claims for Covid-19 restrictions. But it is established that the rights acknowledged by the U.S. Constitution are merely a floor, not a ceiling. This notion recognizes that states may freely offer a higher level of protection of rights under their own laws or more severely restrict the state’s powers (or both). And many state constitutions go further, guaranteeing compensation when property is damaged. 

We also take a quick look at a still-pending case in Michigan, with the hope that the Michigan Supreme Court does not fall into these same traps.

We'd appreciate it if you were to read the entire piece -- it's short, we promise!

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

Don't miss out!

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

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

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

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

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

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

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

"The Lost World - Land Use Before Zoning" - Bound by Oath Podcast, S3 E3: Hadacheck, Buchanan

This season of the Institute for Justice's podcast series "Bound by Oath" is devoted to property rights. It's a fascinating series -- produced by John Ross, it is more like an audio documentary than a typical podcast -- focusing on constitutional issues. And we say this not just because we've been a guest a couple of times -- see "Groping in a Fog", this season's immediate prior episode about regulatory takings, and Season 1, where we guested on the episode about the origins of the "incorporation" doctrine).

In the latest episode, "A Lost World," John covers the world before zoning and the use (and abuse) of the plain-old police power to regulate the use of land and property.

Here's the description:

On Episode 3, we journey back to a lost world: the world before zoning. And we take a look at a trio of historic property rights cases. In In re Lee Sing, San Francisco officials tried to wipe Chinatown off the map. In Buchanan v. Warley, Louisville, Ky. officials mapped out where in the city residents were allowed to live based on their race. And in Hadacheck v. Sebastian, a Los Angeles city councilman sought to use the police power to protect his real estate investments.

Click here for transcript.

We were happy to share some of the backstory (and sad ending) of Hadacheck. Here's a photo looking down Pico from the site of the Victoria Park neighborhood, showing how close the two brickyards covered by the ordinance's ban were to Councilman Andrews' real estate investment. 

Which gets to the good part, the rest of the story that is not reported in the opinion:

John: And there’s one more piece to the story. It’s one that’s not in the briefs or in the court opinions, but it is in newspaper articles from the time. It turns out that just a couple blocks away from Hadacheck’s lot, real estate investors were selling lots in what was then a fancy new development. Here’s an advertisement in the Los Angeles Times printed in 1911.

Ad in L.A. Times: FOR SALE: The finest residence property in Los Angeles. Victoria Park is located in the ultra-fashionable southwest district on the very crown of West Adams Hill. The highest skill of the landscape gardener’s art has been employed to make ….

Robert Thomas: And if you take a left and drive down about a minute you turn into a neighborhood called Victoria Park. And well it turns out that this was the residential subdivision that the Los Angeles City Council was concerned with, because on one hand it was two blocks or so from Hadacheck’s brickyard, and it was literally across the street from one of the other brickyards that was subject to this ordinance. I think the homes there today when you drive around must have been the homes that were built then because they have that period look to them. Arts-and-crafts type of houses. Really kind of nice. One and two story houses with lawns and substantial lots. And of this being Los Angeles, there's a ring of palm trees.

John: Victoria Park was being developed by a consortium of real-estate investors. Robert Thomas: Well, it turns out that one of the leaders of that consortium was a fella called Josiah Andrews.

John: Josiah Andrews was a Los Angeles City Councilman, and one of the very first things he did after getting elected was to introduce the brickyard ban – not a ban in the whole city but just in the area that just so happened to be next to his investments in Victoria Park.

Robert Thomas: The story, when you piece it all together by looking outside the opinion, looks like one where it's pretty clearly self dealing on the part of Councilman Andrews. Why that does not make it into the record. Why that does not make it into the opinion. We don't know. John: In fairness, the city did get around to banning brickyards elsewhere in the city within a few years. But in 1910, the only ones they banned were the ones that threatened Josiah Andrews’ pocketbook. The Hadacheck decision remains good law, and looking back it today it appears to be a harbinger of things to come. Namely, the Supreme Court’s unwillingness to find that land-use regulations violate the due process of law – even when they seem arbitrary and even if someone’s ox is very definitely getting gored. And while you might think that invoking the police power as a pretext for a government official’s private pursuit of profit would be something of a no-no, well, stay tuned on that. We’ll come back to pretextual confiscations later in the season. Today, of course, Mr. Hadacheck’s case might be litigated differently. He probably would raise a regulatory taking claim, for instance, but as we talked about last episode the likelihood that he would achieve a more favorable result is not great.

 

For more visuals to go with your reading, see our post "Takings Pilgrimage, LA Edition: Police Power, The Zoning Game, And Nuisances" where we visited the Hadacheck site. Or read a short essay we wrote a few years back which includes more about Hadacheck.

And be sure to add this episode to your listening queue.

Thomas, Back to the Future of Land Use Regulation, 7 Brigham-Kanner Property Rights Journal 109 (2018)

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

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

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

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

Texas Flooded Devillier's Property

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

Removed! Texas Avoided Its Own Courts

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

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

Fifth Circuit: No Cause of Action For Compensation

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

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

The Question Presented

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

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

So what should we be looking for on Tuesday morning?

Calder, Barron, and Sovereignty

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

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

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

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

Id. at 388.

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

What Else to Look For on Tuesday

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

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

What's Not at Issue

Here are some issues we think are not presented:

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

See you on Tuesday!

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

Sheetz Argument Round-Up

Here is a collection of commentary on the oral arguments in Sheetz v. El Dorado County, heard by the Supreme Court earlier this week. (Our own thoughts here.)

• Lawprof Tim Mulvaney, "Mulvaney of Sheetz v. County of El Dorado" (PropertyProfBlog) ("In light of that concern, perhaps such scrutiny, Justice Jackson ruminated, should be applicable only to those legislative permitting schemes that require the dedication of land for the state’s possession. Justice Alito countered, though, that any such framework is manipulable, for a fee could be construed as offsetting the government’s acquisition of a 'no-build easement.'").
• Lawprof Ilya Somin, "Supreme Court Oral Argument Indicates 'Radical Agreement' that there is no 'Legislative Exception' to the Takings Clause" (Volokh) ("All or nearly all of the justices seem to agree there is no legislative exception. Indeed, even counsel for the County of El Dorado agreed.").
• "An interview with the attorneys behind the SCOTUS case Sheetz v. County of El Dorado" (Pacific Legal Foundation) ("Brian Hodges: What surprised us was how focused the Court was just on the question presented, which was whether legislative exactions are subject to Nollan and Dolan. The government briefs really didn’t address that issue. That’s the issue that the Court granted cert on, but they didn’t really address it. They tried to change the topic. And the fact that the Justices didn’t really take the bait was a bit surprising.").
• Bradford Kuhn, "A Taking of Just a Fee?" (California Eminent Domain Report) ("The Supreme Court’s decision will be one we’ll continue to monitor closely, as it could have widespread implications to government agencies in California if they need to change the way impact and permit fees are calculated across the board.").
• Ben Christopher, "Supreme Court case about impact fees could have huge consequences for housing in California" (Cal Matters) ("Many court watchers expect the court’s conservative majority to side with the burdened property owner and require the cities and counties to work a bit harder to justify the fees they impose on new home construction. It remains unclear for now just how far such a ruling could go and whether it might place fresh limits on other widely used housing and revenue-raising policies.").
• Chuck Slothower, "A Taking Or Just A Fee? Justices Seek To Make Distinction" (Law360) ("Court ustices adopted a skeptical line of questioning Tuesday in response to arguments that government permit fees constitute a taking under the Fifth Amendment in a case that could have broad implications for American land use planning.").
• Noel Sterett, "Supreme Court Considers Whether County Can Exact a $23,000 Fee to Build a Single Home" (Dalton Tomich) ("If the Supreme Court decides in the County’s favor, many other local governments could follow suit and enact similar legislation. As local governments look to increase revenue without raising taxes, they may look to use their permitting powers to exact money from property owners like Mr. Sheetz.").

Today's Arguments In Sheetz v. El Dorado County: "[R]adical [A]greement" On The Key Issue

If you were looking for deep clarity from the Justices about land use law and whether a legislature imposing monetary conditions on property development always gets the free judicial pass of rational basis review in this morning's oral arguments in Sheetz v. County of El Dorado, you may not discover a lot of predictive insight when you listen to the argument recording or read the transcript.

But it is definitely worth your time to listen or read. Yes, there were some head-scratching moments as several of the Justices struggled with how to differentiate between monetary land use exactions that are subject to the nexus and rough proportionality standards, and other government requirements to pay money such as user fees, tolls, and property taxes that presumably are exempt. But there were also moments of clarity. Important moments.

In other words, there's gold in them thar transcript hills if you look closely. (Sorry, we had to get that out of the way.)

[Disclosure: this is one of ours, so we're not going to get into it too deeply.]

We think the outcome may turn on the Question Presented, and how "tightly" a majority of the Justices want to answer that question, and go no further. As our preview of the case noted, here's the Question Presented:

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

Read that closely. It isn't asking whether the County's traffic impact fee violates the nexus and rough proportionality standards, but whether a property owner can even ask the question. Remember that this case comes up after the trial court sustained the County's demurrer without leave to amend (for you non-Californians, read this as a "granted the County's 12(b)(6) motion to dismiss"). In other words, the trial court held that an exaction is categorically exempt from the Nollan and Dolan standards if the exaction is authorized by legislation (in other words, is not imposed ad hoc via an administrative proceeding on a discretionary permit).

You can never even ask the nexus and proportionality questions, property owner, much less have a court answer it.

In our listen, while there was a lot of noise and confusion in today's argument, there was also a lot of focus on that narrow question. Which augurs well, we think. If the only question the Court needs to resolve is whether legislatively-adopted exactions are 100% outside the reach of Nollan and Dolan 100% of the time, then perhaps such a decision won't be too hard to get to a majority or more. And if you are searching the transcript for today's "money quotes" (or maybe "money colloquies") to back up that thought, we suggest you couldn't do better than these.

First, Justice Thomas laid the foundation. As he put it in the first question out of the gate to Paul Beard, arguing for Mr. Sheetz: 

JUSTICE THOMAS: Do we have to decide any more than whether Nollan/Dolan scrutiny applies to -- can apply here to legislative exaction?

MR. BEARD: Justice Thomas, the Court is -- is able to just answer the question presented, which is simply whether there's some kind of a legislative generally applicable exception to Nollan and Dolan, yes.

JUSTICE THOMAS: If -- if the -- if - if Respondent concedes that, is there anything else we should do?

MR. BEARD: There's nothing for the Court to do. That is the question presented.

Tr. at 5.

Later, Justice Kagan "circled back" and seemingly closed the deal during her questioning of the County's advocate. She stated there is "radical agreement" on whether an exaction should "get a pass" just because it is generally-applicable (the Question Presented), concluding that it doesn't. The County's lawyer agreed without reservation:

JUSTICE KAGAN: So, Ms. McGrath, I want to follow up on Justice Gorsuch's idea of radical agreement. And I -- I -- I want to give you -- suggest what it is that there is radical agreement on and what it is that there is not radical agreement on, and see if you agree with me.

So what there is radical agreement on is that you don't get a pass from unconstitutional conditions analysis just because you've passed generally applicable legislation. And that's, of course, true in unconstitutional conditions analysis generally, and so too it's true of unconstitutional conditions analysis in the property area. If there has been a taking and that taking is being leveraged in the permitting process by generally applicable legislation, there's no pass just because that's the mechanism that's being used.

So first let me ask you if you agree with that?

MS. McGRATH: I agree.

Tr. at 73-74.

If that's it, then game over right? Question Presented has been answered, and the follow-up questions are just gravy for remand.

Justice Kagan continued, pointing out that there might be a dispute over whether there could be a taking if the County denied a development permit (because the owner refused to voluntarily pay the exaction):

JUSTICE KAGAN: Okay. Here are two things it seems to me that the parties fundamentally disagree on, which is probably - one of these two things is going to answer this dispute in the end, but there are two things. Is -- number one, was -- is there a taking at all? Because if this is just something like a tax, unconstitutional conditions analysis never comes into play, and you say it never comes into play, and Mr. Beard says it absolutely comes into play. So that's one question that you're very much at odds on. Is that correct?

MS. McGRATH: That's correct.

JUSTICE KAGAN: The second question that you're very much at odds on is, even if you assume that there has been some kind of taking here and that unconstitutional analysis does come into play -- and by that, I mean what we have in past cases called Nollan/Dolan analysis, right?

Tr. at 74. That dispute doesn't seem to stand in the way of a narrow ruling here because this is up on a demurrer and the complaint adequately and plausibly pleaded that denial of the permit would be a taking. You don't have to figure out whether there's been a taking at this stage, only whether Sheetz has been required to choose between his plausibly-pleaded right to just compensation for the taking of his right to use and develop his land, and his plausibly-pleaded right to keep his money.

Finally, Justice Kagan suggested that there is a dispute over whether legislative exactions might be subject to some sort of different nexus and proportionality standards than applied to parcel-specific conditions: 

Even if you assume that that unconstitutional analysis comes into play, it might look very different from what Nollan/Dolan analysis looks like just because Nollan and Dolan were focused on individual parcels, individual property owners, and this is a general scheme, and it would be very difficult to apply Nollan and Dolan analysis literally to a general scheme.

So that there might be ways in which Nollan/Dolan analysis becomes something that, you know, really looks different in application. And I think Mr. Beard says no, not really, and you say, yes, really. Is that correct?

MS. McGRATH: That's also correct.

JUSTICE KAGAN: So that's the agreement. Those are the two big disagreements?

MS. McGRATH: I think that is correct, Justice Kagan.

JUSTICE KAGAN: Okay. I just wanted to make that clear.

Tr. at 75.

Again, that should not stand in the way of a decision here on the Question Presented (are legislative exactions categorically exempt?). The Court may hold that no, legislative exactions are not 100% exempt, but remand for more on how that test is to be applied here (something on which there's no actual, developed factual record in case -- again, blame the demurrer).

A couple of final observations:

• We didn't hear any of the Justices take issue with calling the County's demand an "exaction." As you know, some lower courts fixate on semantics (is the challenged requirement an "exaction" or is it a "zoning ordinance?"). No SCOTUS Justice today seems similarly hung up on wordplay. They all seemed to look at what the ordinance does, not what the County called it.
• There seemed to be a lot of confusion wrought by the way the Court has framed the question as one of "takings" here and in past decisions. We think the more helpful view is that of "unconstitutional conditions," and not takings. Yes, one of the rights that Sheetz is being required to choose between is his right to compensation, but at heart this seems more like a question of "your money or your rights" than one about whether there's been a taking by overregulation.

Now we wait. What's your prediction?

Transcript, Sheetz v. County of El Dorado, No. 22-1074 (U.S. Jan. 9, 2024)

What We're Reading Today, Property Rights Edition

Bismarck in January is looking pretty good.

Here's what we're reading today:

• Christian Britschgi, Court's Wild Zoning Decision Blocks 'Montana Miracle', Reason (Jan. 2, 2024) ("In an eyebrow-raising decision, a Montana judge has halted the implementation of two laws legalizing duplexes and accessory dwelling units on residential land across the state, writing that they'd likely do 'irreparable' damage to residents of single-family neighborhoods.").
• Richard Frank, The U.S. Supreme Court & Environmental Law in 2024, LegalPlanet (Jan. 3, 2024) ("First up before the Court in 2024 is this “regulatory takings” case from California.... Over the past four decades, U.S. Supreme Court decisions have developed the so-called 'unconstitutional conditions' sub-doctrine of regulatory takings law, but to date have only applied it to individually-negotiated land use permit conditions and fees. California state courts–including in the Sheetz case–have consistently refused to extend the doctrine to broadly-applicable fees and conditions imposed on landowners in exchange for their obtaining development approvals–so-called “quasi-legislative” fees and conditions.... So El Dorado County appears to be facing an uphill battle in the Sheetz case. The justices will hear oral arguments on January 8th.")
• Editorial Board, The Supreme Court's Road to El Dorado, Wall St. J. (Jan. 5, 2024) ("The Supreme Court on Tuesday will hear what could be a landmark property-rights case (Sheetz v. County of El Dorado) with major economic implications. The question is simple: Can governments use building permits to extort property owners?"). 
• James Burling, Property Rights in Jamestown: Bowling and starving in the New World, Pac. Legal. Found. (Nov. 30, 2023) ("All the crops would be the collective property of the colony, with a good portion of the proceeds returned to the financiers in England to pay off the debts incurred in setting up the colony in the first place. Now, the proprietors weren’t proto-socialists; they just figured they could maximize their profits if their charges over in America didn’t try to grab too much for themselves.").
• Greg Henderson, Texas Rancher's Property Rights Case to be Heard by U.S. Supreme Court, Drovers (Jan. 4, 2024) ("Attorney’s representing a Texas rancher are preparing to test the 'pottery barn rule' – you break it you buy it – before the U.S. Supreme Court.").
• History of Building Regulations, Researching Historic Buildings in the British Isles ("The British Isles has a long history of legal controls on building construction, which have generated records of interest for building historians. This outline aims to explain the types of building control record and where to find them.").
• Conference on the Constitution. A conference produced by the Northwest Landowners Association is open to the public "to learn more about landowner issues related to our constitutional rights." Featuring two of our Pacific Legal Foundation colleagues, Mark Miller and Kady Valois.

New Article: "Keeping the Surplus? Examining Colorado's Real Property Tax Lien System in Light of Tyler v. Hennepin County" (Makenna Johnson)

How thrilled are we that an alum of our William and Mary Law School courses, up-and-coming Colorado property lawyer Makenna X. Johnson, has published an article in the area of law we all love (dirt law)?

Let's just say that we're thrilled. Makenna writes:

Colorado’s real property tax system resembles Minnesota’s principally in that it provides no mechanism for a property owner to recover any surplus or equity in excess of the taxes and fees owed. Although in Colorado a surplus may be retained by either a private party or a municipality, the result is the same: the owner’s property interest in the surplus is forfeited. Applying the logic of Tyler, a court might deem unconstitutional any system that requires property owners to forfeit the surplus without allowing them an opportunity to request a refund.

Check it out in the Colorado Lawyer (Jan-Feb 2024): Keeping the Surplus? Examining Colorado's Real Property Tax Lien System in Light of Tyler v. Hennepin County.

Sheetz v. El Dorado County Argument Preview: Do Blanket Exactions Present The Same Risk As Ad Hoc Exactions?

Get ready for Sheetz v. El Dorado County, No. 22-1074, the "legislative exactions" case at the Supreme Court. [Disclosure: this is one of our firm's cases, so we won't be doing an analysis here. Besides, you already know where we stand on the issue.]

With the final merits brief filed last week (Petitioner's Reply), the case is now teed up for argument next week. Wow, that seemed to come at us very quickly.

Here's the 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. 37 4, 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.

Check out all of the merits and amici briefs on the Court's docket.

• Sheetz's merits brief
• El Dorado County's merits brief
• Sheetz's reply
• Federal government's amicus brief (the SG has asked the Court for argument time)

To find out more, register for "What's at Stake: Sheetz v. County of El Dorado," a free webinar preview on Thursday, January 4, 2024, 3-4pm ET ("At this event, panelists will give background on the case and its far-reaching implications. They’ll also discuss key precedents that laid the groundwork for this fight, including Nollan v. California Coastal Commission, Dolan v. City of Tigard, and St. Johns River Water Management District v. Koontz.").

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Slip op. at 14.

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

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

Slip op. at 3.

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

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

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

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

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

Check em out.

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

Hawaii Federal Court: Honolulu Can't Increase Minimum Rental Term To 90 Days Without Accommodating Existing Uses

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

In this Order, the U.S. District Court for the District of Hawaii made permanent its earlier ruling that Honolulu's ordinance which expanded the minimum rental term to 90 days because it did not account for those owners who were already legally renting their properties for 30 days. The state Zoning Enabling Act requires zoning ordinances account for preexisting uses.

We covered the issues and the court's preliminary injunction ruling here, and won't go over those again. About the only difference between that one and this one is that the court rejects the City's "several new legal arguments[,]" including Pullman abstention, and the claim that this isn't a zoning ordinance covered by the ZEA, but rather a "rental regulation." See slip op. at 10.

The City’s attempt to reframe the issue first presented during preliminary injunction proceedings more than a year ago is unavailing. In Yee, the Supreme Court explained that the ordinance at issue “regulate[d] petitioners’ use of their land by regulating the relationship between landlord and tenant.” Yee, 503 U.S. at 528 (emphasis added). It did not create the land use versus landlord-tenant distinction that the City now imagines.

Slip op. at 15.

Check it out. Kudos to our former law partner and land use lawyer extraordinaire Greg Kugle for the compelling win. 

Order Granting in Part and Denying in Part Pltf's Motion for Summary Judgment, Hawaii Legal Short-Term Rent...

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

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

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

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

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

"Super-Zoning Board" No More - CA2 Busts The "Land Use Is Local" Trope: Town ZBA Doing Nothing On Variance Application Ripened Constitutional Claim

You remember that longstanding trope: that matters of land use are "local" issues, and thus in civil rights claims involving a state or local government interfering with the right of property federal courts should avoid adjudication until the government has had every chance to do the right thing (even where it is patently obvious that it has no intention of doing so)? This trope most often shows up as a part of a ripeness dismissal, where the court says "too soon," because, well, if given enough time and opportunity, the government might render adjudication unnecessary.

Well, in Ateres Bais Yaakov Academy of Rockland v. Town of Clarkstown, No. 22-1741 (Dec. 8, 2023), the U.S. Court of Appeals for the Second Circuit held a land use case ripe, and in the process blew up this overripe trope. Whoa!

But before you takings mavens get too excited, this is a RLUIPA claim. But that doesn't mean the applicable principles are not relevant. Indeed, this one is worth reading because the court navigates the rocky shoals of Article III ripeness in land use cases, and concluded that "federal courts have an obligation to adjudicate cases that invoke our jurisdiction, and we do not close our doors to litigants properly seeking federal review simply because their grievances touch on local zoning matters.: Slip op. at 17.

Before you get too excited again, this warning: the qualifiers "properly" and "simply" carry a lot of the work here, and the court doesn't conclude that if you make a constitutional challenge to a zoning or land use decision, your case is ripe and you are heading straight to the front of the line.

Here are the quick facts. The Academy wanted to build an Orthodox Jewish school. It entered into a purchase agreement to buy some land and lined up financing. It alleged that in response, "segments of the local community" formed to oppose the school, with one Town supervisor announcing "the the Town would 'strongly enforce' applicable zoning and building-code regulations of the property." Slip op. at 7.

Next up: a lot of the typical maneuvering during the zoning approval process, including the Town's fire inspector kiboshing a building permit application on the basis that the property lacked the minimum frontage required, and that a building permit could not be issued until the school obtained a variance from that requirement. Slip op. at 9-10. The school appealed to the Zoning Board of Appeals, asserting that the school met the frontage requirement. In response, the inspector asserted that the appeal papers were incomplete because the school had not submitted a property survey in support.

Survey? Where does it say we need a survey (said the school)? It claimed that "nothing in the Town Code or ZBA rules required such a survey, and the requirement served no practical purpose." Slip op. at 10. [Barista's note: this is typical, and local planning officials often reject applications and claim they cannot be processed because they are not complete, and when pressed about where the requirement to submit the allegedly "missing" information comes from have no answer or merely say "this is how we do things here - everyone knows that."]

But the school played ball and made and submitted a survey.

[But o]nce the survey had been completed, on May 7, [the school] requested a hearing date for its appeal to the ZBA. However, the ZBA failed to respond to this request, and the project came to a standstill. Subsequently, Investors Bank revoked its commitment to provide financing.

Id.

The ZBA's do-nothing approach continued, even in the face of the school pressing it repeatedly, at one point pointing out the failure of the financing as a reason it was considering the application revoked. Slip op. at 11. Then, to add insult to injury, {o]n October 3, the Town announced that it was purchasing the property for itself." Slip op. at 11-12.

Next up, federal court section 1983 and RLUIPA lawsuit. The district court dismissed; the federal claims were not ripe because -- you guessed it -- the ZBA had not yet decided. Slip op. at 13 ("the Zoning Board of Appeals, the municipal entity responsible for the administration of the zoning laws, never issued a final decision on the merits of [the school]'s application"). The claim was not ready, and thus failed the "case and controversy" requirement of Article III.

The Second Circuit reversed. As noted above, the court rejected the Town's argument that this, at heart, was a local zoning matter and that federal judges should therefore butt out. In holding the claims ripe, the court noted Pakdel's dictum that the ripeness requirement is "relatively modest" and that nothing more than "de facto" finality is needed. Slip op. at 18.

Applying those rules, the court concluded that the ZBA "reached a decision that was sufficiently final for ripeness purposes." Id. By "choosing not to adjudicate [the school]'s appeal[,]' the ZBA made a de facto decision. The complaint also plausibly alleged that the ZBA "declined to respond to at least five letters urging it to schedule a hearing." Id. And to cap it off, a Town official (its lawyer) "wrote to [the school] that the ZBA 'will not entertain any appeal by [the school] with respect to the [property].'" Id. 

"This letter made the ZBA's position pellucid[.]" Slip op. at 19. Dismissal reversed, and case remanded for more on the merits.

That is all well and good, but we issue a caution in cases like this, where the government has done some pretty outrageous things: it shouldn't take this much to get a court to agree that a case is ripe. As the Supreme Court reminded in Pakdel, this is a relatively modest requirement with only de facto finality required. Just because cases  like this one in which the government is going way overboard are well-within the ripeness requirement, does not mean that "lesser" government foot-dragging is okay.

Ateres Bais Yaakov Academy of Rockland v. Town of Clarkstown, No. 22-1741 (2d Cir. Dec. 8, 2023)

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 [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)