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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,...

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.

 

Cert Grant #2 - SCOTUS (Finally!) To Resolve Whether Legislative Exactions Are Subject To Nollan-Dolan-Koontz Nexus And Rough Proportionality

"I'll take 'Words I Like to See' for $800, Alex."

In this Order, the U.S. Supreme Court agreed to hear two important property rights cases (are there any other kind?). Both are cases we've been following -- and indeed are now playing a part in.

The first is detailed in this post.

In the second, Sheetz v. El Dorado County, the Court is finally getting to the long-unresolved question of whether an exaction or permit condition is exempt from the usual requirements of "logical nexus" and "rough proportionality" simply because the condition is imposed uniformly by legislation, and not ad hoc via an administrative or other permit decision.

We commented on the Sheetz case in this post ("Whether $23K Traffic Fee Is Proportional To One Single-Family Home Is Beyond The Ken Of Judges") and won't repeat the facts or comments here.

But here's the cert petition -- which did a pretty good job of summarizing the case and issues -- including 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. 374, 391 (1994).

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

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

There it is. Finally.

Congratulations to Paul Beard (the lawyer who argued and won Koontz, by the way) on the hard-won grant. Our law firm colleague Brian Hodges (in our estimation, the nation's leading and most seasoned expert on the exactions issue) filed this amicus brief which urged the Court to take up the case.

Lawprof Ilya Somin offered his thoughts on the cert grant and the case here ("Supreme Court Will Hear Case on Whether there is a 'Legislative' Exception to the Takings Clause") ("But the Court need not even consider such political economy issues. They can just rely on the basic principle that the whole point of constitutional rights is to impose constraints on the political process—including legislatures."), via Volokh.

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

Brief Amicus Curiae of Pacific Legal Foundation in Support of Petitioner, Sheetz v. Cnty. of El Dorado, No....

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.

DC Circuit: US Copyright Office's Requirement To Turn Over Copies Is A Taking

The buried lede in the U.S. Court of Appeals for the D.C. Circuit's opinion in Valancourt Books, LLC v. Garland, No. 21-5205 (Aug. 29, 2023) is that the government doesn't have that big of a role in copyrights, at least in the bare minimum of copyright protections.

We're no copyright experts (that's an understatement), but we knew the basics here: in order to have a copyright and all the rights that entails, the owner need do nothing more than fix the work in a tangible medium. No formalities are necessary, including publication. As the court put it, "[c]opyright thus accrues automatically upon creation of an original work in a tangible medium, and creators need not take any further action such as publication or registration to gain the protection." Slip op. at 4.

You may register your copyright to obtain certain other benefits -- for example, registration is prima facie evidence of validity, and in order to bring a copyright infringement claim, you must be registered -- but you don't have to register a work.

The copyright statute, however -- adopted under the authority of the Constitution's Copyright Clause -- requires that upon publication (as opposed to creation), the owner deposit with the U.S. Copyright Office one (or in some situations two) physical copies of the work for the Library of Congress. If the owner does not do so, the Office may impose a modest fine, unless the Office grants "special relief" from the deposit requirement under the statute if doing so imposes a financial burden for example. The deposit requirement -- apparently a legacy of the now-supplanted copyright system which tied all the benefits of copyright to registration -- is not conditioned on registration.

Valancourt is an on-demand book publisher that focuses on out-of-print books. It neither registers its copyrights, nor deposits copies of its books with the Office. Somehow this caught the attention of the Copyright Cops, who sent Valancourt a notice to send in 341 books it had not deposited. No deal, Valancourt responded, providing copies would be prohibitively expensive and would overburden its free speech rights.

A takings lawsuit followed. Not in the Court of Federal Claims as in typical takings claims seeking just compensation from the federal government, but in the District Court for the District of Columbia, because the relief sought was an injunction against enforcement. The district court entered summary judgment in favor of the government because this is not the government forcing a copyright owner to turn over property, but rather the owner seeking a governmental benefit which can be conditioned on the owner complying with conditions.

The D.C. Circuit reversed. The takings stuff begins on page 13 of the opinion. The court characterized this as a physical appropriation and applied the categorical rule that flows from that characterization. The government demands you give up your raisins...you gotta pay. Same with books. Relying on the recently-decided Tyler decision, the court concluded this is a "classic" taking. Slip op. at 13.

When copyright owners deposit copies of works with the Library of Congress, they “lose the entire ‘bundle’ of property rights” in the relinquished copies, including “the rights to possess, use and dispose of” them.

Slip op. at 14.

The court rejected the district court's conclusion that Valancourt was only required to deposit the books as a condition of receiving a governmental benefit. The court acknowledged that when the government confers a benefit, it may, within limitations, demand the owner give up property. But here, Valancourt had not registered its copyright and was not seeking any of the benefits of doing so. Nonetheless, the Office insisted that the requirement to deposit the work did not turn on whether the owner registered the work.

Here, as in Horne, copyright owners receive no additional benefit for the works they forfeit pursuant to Section 407’s deposit requirement. Mandatory deposit is not required to secure the benefits of copyright. Copyright first “subsists” when an author “fix[es]” a work “in any tangible medium of expression.” 17 U.S.C. § 102(a). So, when a writer puts words on a page, that work gains copyright; when an artist paints on a canvas, that work gains copyright. Copyright thus is “both instant and automatic,” in that it “vests as soon as a work is captured in a tangible form, triggering a panoply of exclusive rights that can last over a century.” Georgia v. Public.Resource.Org, Inc., 140 S. Ct. 1498, 1513 (2020). Authors need not take any affirmative step to obtain

Slip op. at 15. Any benefits a copyright holder may have that are not dependent on registration exist by virtue of the work being fixed in a tangible medium, and are not governmental benefits. Slip op. at 16. Copyright may not be a "natural right," but any benefits a copyright holder may possess are not related to giving up a copy for public use.

The court responded to the government's argument that the deposit requirement isn't really a "requirement" but more like a voluntary exchange because a copyright owner can disavow copyright protection, by acknowledging that may be true, but here there's no apparent or easy way to opt-out. Slip op. at 21 ("If there were a simple, seamless, and transparent way to opt out of copyright protection, perhaps mandatory deposit would fall outside the realm of the Takings Clause because any forfeiture of property might arguably be voluntary.").

Will the government stop here, or will there be more? Stay tuned.

Valancourt Books, LLC v. Garland, No. 21-5205 (D.C. Cir. Aug. 29, 2023)

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

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

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

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

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

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

Slip op. at 9.

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

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

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

Slip op. at 10.

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

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

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

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

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

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

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

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

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

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

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

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

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

California Supreme Court Reviewing The Murderer's Creek Inverse Case

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

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

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

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

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

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

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

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

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

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

Pet. at 1-2.

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

Slip op. at 2.

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

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

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

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

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

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

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

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

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

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

Links And Materials From The 22d Annual Texas Eminent Domain Conference

Good crowd.

Here are the cases and other materials we spoke about on Friday at the 22d Annual Texas Eminent Domain Conference, in Austin. A big thank you to the Planning Chairs and to our friends at CLE International for the speaking invite.

• Sackett v. EPA (SCOTUS and WOTUS)
• Wilkins v. United States (Federal Quiet Title statute of limitations)
• Tyler v. Hennepin County (Takings, Excessive Fines - Home Equity Theft)
• Eychaner - the near-miss on revisiting Kelo
• Louisiana's successful (!) necessity challenge
• Self-executing Just Compensation: First Circuit (it is self-executing) vs Ninth Circuit (it isn't); see also Devillier v. Texas (pending)
• Property in the non-takings context: K-9 putting his paws on car is a "search" because...trespass to chattels

The other cases discussed are in your materials!

The nearby Caldwell County Courthouse. A classic.

Why did no one tell me that Jabba's Palace is in Austin?

April 27, 2023, 5-7pm, Honolulu: Join Us To Celebrate The Work And Career Of Professor David Callies

Come join us on Thursday, April 27, 2023, from 5-7pm, downtown Honolulu, to celebrate the retirement of Professor David L. Callies from the University of Hawaii Law School.

Join U.H. Law School Dean Camille Nelson, Professor Callies' colleagues, his students (present and former), the Hawaii legal community, and family and friends as we honor 43 years of scholarship, teaching, service, and practice.

Professor Callies is a prolific scholar and author, and has mentored generations of lawyers. Known especially for his work in property, land use, takings, administrative law, and state and local government law, he has also been presented with numerous awards including William and Mary's Brigham-Kanner Property Rights Prize, and the Owner's Counsel of America's Crystal Eagle. 

Invitation and how to RSVP (or click below). Space is limited, so please let us know you are attending as soon as you can.

Details:

Thursday, April 27, 2023
5:00-7:00 p.m.

Second Floor Gallery
Pauahi Tower
1003 Bishop Street
Honolulu, Hawaii 96813

Validated parking: Bishop Square garage (entrance on Alakea Street)

RSVP: [email protected]

See you there!

Professor David Callies - Retirement Celebration Invitation Apr. 27, 2023

CA4: Exactions Takings Claim Accrues When Owner Knows Of The Demand, Not When It Paid

As most of you probably already know, there's a demon lurking out there in takings claims. Not of the Levon Helm-narrated The Right Stuff variety, but maybe just as deadly in litigation.

That's right, the too-early-or-too-late thing (or in some cases, the too-early-and-too-late argument). Getting caught between arguments that a takings claim isn't ripe, and arguments that it is too late (statutes of limitation).

The U.S. Court of Appeals for the Fourth Circuit was dealing with the latter (a statute of limitations) in Epcon Homestead, LLC v. Town of Chapel Hill, No. 21-1713 (Mar. 20, 2023), but there are lessons in the case for the other side of the issue, ripeness.

The facts are pretty straightforward. If you are going to build at least five single-family units, the town's zoning ordinance contains a requirement of "inclusionary zoning" (aka affordable housing; aka below-market units. Or if you don't want to build such housing, you can pony up some cash if the town agrees.

The owner of the property wanted to build 63 units so was subject to this requirement. It didn't want to build affordable units, so opted to pay cash (approximately $800k). The town agreed, and conditioned its issuance of a special use permit which would allow the project to proceed on the developer paying this in-lieu fee: no certificates of occupancy would issue until the fee was paid.

Then Epcon bought the property. It built the 63 homes, and sold them. It made the first installment payment for the in-lieu fee, and two years later paid the final payment. Voila, certificates of occupancy. 

Next stop, state court where Epcon asserted the in-lieu fee was illegal under a variety of theories, including a section 1983 claim that the fee was an unconstitutional taking and violated Epcon's due process rights. The town removed the case to federal court and moved to dismiss the federal claims because the lawsuit was filed more than three years after the in-lieu condition was imposed (it had been four years).

As we all know, section 1983 does not have a built-in SOL, so the courts have held that the SOL of the closest state-law analogy applies. In North Carolina, that's three years. The District Court agreed with the town and dismissed. You snoozed, so you lose Epcon.

The Fourth Circuit agreed. We suggest you go read pages 9-11 of the opinion for the reasons why. The bottom line is that "there is no 'distinctive rule' in the Takings Clause context to apply for determining when the limitations period for a § 1983 claim begins to run[,]" and the usual ("standard") rule applies: a 1983 claim is ready when the plaintiffs knows or has reason to know that it is injured. Slip op. at 9. But when did the injury here occur?

Epcon argued it wasn't really injured until it finished paying. Not so, held the Fourth Circuit, it was injured when it learned of the special use permit condition after it purchased the property.

Here, Epcon alleges that it suffered an injury under § 1983 stemming from the application of an unlawful special use permit condition. As the district court concluded, Epcon first had reason to know of this injury no later than 2015, when it began purchasing the land subject to the special use permit. Thus, its claim that the permit condition violated its rights to just compensation and due process accrued at that point and extinguished three years later. By the time Epcon filed suit in October 2019, the sun had set on its federal claims.

Slip op. at 9 (footnote omitted).

The court rejected Epcon's argument that the injury occurred when it was compelled to actually pay the fees, and that happened when it went to the town for the certificates of occupancy. And this isn't a regulatory takings claim, Epson asserted. If it were, the SOL clock might have started earlier. No, this is an unconstitutional conditions claim, and that's different. Slip op. at 10. We didn't lose our property right until we paid, it argued.

We disagree, the court held. "The distinction Epcon attempts to draw between exactions and regulatory takings proves little more than that the government need not physically appropriate property to enact a taking." Slip op. at 10. [Barista's note: "enact" a taking?]

And here's your money quote: "Once the government conditions the grant of a land-use permit on the surrender of a landowner’s right to just compensation, a Takings Clause claim becomes cognizable." Slip op. at 10. In other words, once that happens, the lawsuit window is open and the SOL clock is ticking. In other words, the claim is ripe.

Remember that one the next time the government argues an exaction case isn't ripe because the action being challenged as unconstitutional (the government's demand, and the subsequent owner payment) isn't complete.

Epcon Homestead, LLC v. Town of Chapel Hill, No. 21-1713 (4th Cir. Mar. 20, 2023)

Exactions, Takings, And Ripeness...Oh My! When Planning Officials Say "No," That's Enough (Even If They Might Have Said "Yes" Some Other Way)

There's a lot to digest in the 36-page Order of the U.S. District Court for the Southern District of Florida in case that mostly concerns the validity of an exaction a small property owner was required to pony up in order to tear down and replace an old home on its land.

Megladon bought the residentially-zoned property in 2016 to tear down the existing building and build a new one. Simple enough, right? It demolished the old house, and applied to the Village to build a new one. But the Village also needed a road, and began making noise about a "possible road dedication." And sure enough, eventually the Village notified Megladon that "a certificate of occupancy will not be issued until dedication of the right-of-way is complete." Slip op. at 4. There's a dispute over exactly whose law requires such a dedication -- Village or County? -- but that's not terribly important for our purposes. 

Megladon balked, as dedicating a road would require it to reformulate its plans. There's apparently a procedure by which a property owner can request and exemption or waiver, but "Megladon refused because of the 'legal inconsistency of doing so[.]'" Slip op. at 4. Instead, it sued in a Florida state court. The Village then removed the action to federal court. After removal, Megladon amended its complaint to add an unconstitutional conditions claim.

The inevitable motion to dismiss under 12(b)(1) and 12(b)(6) followed.

Many pages of the court's order (mostly) denying the motion to dismiss are devoted to whether the plaintiff sued the right defendant. Important to the case and the parties, but not really of interest to us. If you might be, check out pages 9-23. 

Page 24 is where the interesting stuff heats up. The court concluded the claims are ripe over the Village's objection that -- you guessed it -- it has not yet reached a "final decision." Slip op. at 24. The court concluded "[t]his argument strains credulity[,]" because the Planning Director send Megladon an email that indeed "a certificate of occupancy will not be issued until dedication of the right-of-way is complete." To the court, this looked like a final decision:

Especially when we view this communication (from the Village’s Planning Director no less) in the light most favorable to the Plaintiff, we don’t think we’re going out on a limb by saying that it sounds a lot like a final decision. Director Olmsted made clear that the Village would issue the permit provided the Plaintiff acceded to the dedication. See ibid. “Provided” in this context means “with the provision or condition (that); it being provided, stipulated, or arranged (that).” Provided, Oxford English Dictionary Online, https://www.oed.com/view/Entry/153449 (last visited Mar. 1, 2023); accord Provided, Merriam-Webster's (defining “provided” as “on condition that, with the understanding, if only”). And, in case there was any doubt, Olmsted clarified that Megladon would “need” to consent (in writing) to the dedication “prior to” the issuance of any permit, and he was pellucid that the permit “will not be issued until dedication of the right-of-way is complete.” SAC ¶ 64 (emphases added). The word “will”—like the word “shall”—indicates the imposition of a mandatory condition. See Hewitt v. Helms, 459 U.S. 460, 471 (1983) (“[T]he Commonwealth has gone beyond simple procedural guidelines. It has used language of an unmistakably mandatory character, requiring that certain procedures ‘shall,’ ‘will,’ or ‘must’ be employed[.]”); Will, Oxford English Dictionary Online (“An utterance of the auxiliary verb ‘will’; (also) a command, promise, or determination expressed by such an utterance.”); Will, Merriam-Webster's (defining “will” as “used to express a command, exhortation, or injunction”); Scalia & Garner 112 (“Mandatory words impose a duty; permission words grant discretion.”).

And Olmsted’s unequivocal use of the phrase “will need” in relation to the dedication requirement puts to bed the Defendants’ bordering-on-frivolity contention that “the response to [the architect’s] email was not a refusal to continue processing the application absent a showing of dedication.”

Slip op. at 25 (footnote omitted).

This all in the context of an exaction or unconstitutional condition claim, where the bad act (according to the court) isn't that the government actually denied the permit asked for, but only that the government imposed the condition. Slip op. at 26.

The order noted that yes, the property owner could have gone further in the administrative process under the Village's procedures. But that's what we call "exhaustion." Id. ("But the Supreme Court has made clear that the unconstitutional-conditions doctrine isn’t subject to an exhaustion requirement." (citing See Pakdel v. City & Cnty. of San Francisco, 141 S. Ct. 2226, 2231 (2021)). And you don't need to exhaust in order to ripen a federal takings claim.

And here's the kicker: the ripeness requirement isn't some hard-and-fast "one application" rule, but rather "[t]o assert a plausible unconstitutional-conditions claim, therefore, a plaintiff need only allege that there’s 'no question . . . about how the ‘regulations at issue [apply] to the particular land in question.''" Slip op. at 27 (citing Suitum v. Tahoe Reg’l Plan. Agency, 520 U.S. 725, 739 (1997); Williamson Cnty. Reg’l Plan. Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 191 (1985)). And the availability of a variance isn't important, because "[i]n Williamson County, after all, the Court was concerned only with whether the plaintiff could seek a variance from the initial decisionmaker." Slip op. at 28.

Thus, the takings claim was not filed too early.

But, you know that -- as the court noted -- "the Plaintiff isn't out of the woods just yet[,]' because the Village also asserted the claim was filed too late. Slip op. at 31. Yeah, this happens a lot in takings-land, where you can be accused with a straight face of being both too early and too late. Check out pages 32-34 for why (it turns on the construction of the sovereign immunity waiver statute, if you are interested). 

Nothing resolved except the plaintiff is allowed to proceed. But as you all know, in takings law sometimes just surviving to continue the fight is a victory.

Order, Megladon, Inc. v. Village of Pinecrest, No. 1:21-cv-22819-ALTMAN (S.D. Fla. Mar. 2, 2023)

Ice Ice Baby: A Report From The 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-4, 2023, Austin

We were eagerly anticipating 40th American Law Institute-CLE Eminent Domain and Land Valuation Litigation Conference. The 2022 Conference in Scottsdale was one of the first meetings where everyone was back in-person (and was a smashing success), but that conference was early in the game so not everyone could or would attend. But in the past year most of us got back to some semblance of "normal," and the turnout promised to be good.

We had record registrations: with over 300 attendees, faculty, and staff signed up, things were shaping up.

Plus, we were headed to Austin, Texas. The last time we held the Conference there in 2016, we loved it so much it has been in-demand for a return visit. And this year is the debut Conference for some new planning co-chairs for both the main tracks as well as the "Condemnation 101" tracks, so the buzz for the 2023 Austin Conference was building.

But then the weather reminded us that Mother Nature is often the boss. 

Very Icy Austin on Wednesday (Conference Eve).

On Tuesday, one day before the Conference was to get underway, the 2023 Central Texas Ice Storm blew in and things were gonna get (as they say) "challenging."

Austin Airport effectively shut down with few flights in or out. Planes and cancellations stacked up nationwide. And even for those nearby, slick icy roads, and seemingly everything was closed, from gas stations to hotels to restaurants. Widespread power outages. 

Were we ready with Plan B if people couldn't get on-site? Read on.

Unless you are already here or are driving,
you ain't getting to Austin via AUS any time soon, pard.

Even flying from sunny California was a problem.

Ticket agent: Austin flight cancelled. How about flying to Houston and then driving?

Me: Sure, that'll work. Just get me to Texas and I'll figure it out from there.

Improvise, adapt, overcome: planes, trains, and automobiles (and car rentals, and long-distance rideshares, and four-layovers-from-Boise flights). Jacksonville to Austin via Chicago and Nashville.

Although those of us who made it to Austin were receiving widespread reports of people delayed and rerouted, we had only a handful who said they would not be pressing forward to get here. 

When this is what greets you when you arrive
at your conference site...uh oh.

And yes, Austin was cold and icy. Most things shuttered and widespread loss of power. But the Conference venue was up and running, and throughout the day on Wednesday, faculty, staff, and attendees were showing up. Trickling in, but showing up or on the way.

When this is what you see at the United Airlines
luggage counter, you ask yourself:
Can I make my presentation in a t-shirt and sweats? (Yes!)

We had confidence, and were prepared
for everyone to get to Austin.

So the aforementioned Plan B went into effect. Agenda items shuffled from tomorrow to today because the speaker is here, now. One speaker in the room, one speaker remote. Our audience is full of experts ... say, Billy can you pinch-hit on this panel? Sure. One speaker remoting in from his (unexpected) hotel room in Phoenix and presenting, before he went to the airport in the afternoon to continue on to Austin.

And so forth. Our long-time ALI-CLE Program Attorney, Amy Weinberg (who was delayed out of Philadelphia) was working furiously behind the scenes doing a lot of juggling, updating, texting and calling, and making alternative arrangements. And the tech team from ALI-CLE was preparing for overload if needed.

Plan A: continue to set the room up, assuming everyone is here or on the
way, and we'll have most or all of our people in the room.

Our Planning Chairs were ready, even if not
all of us were actually there (yet).

Plan B: the ALI-CLE technical crew was prepared to livestream
and record the Conference if the weather made travel
to Austin impossible or infeasible.

The tech command center.

Before we go on, a big thank you to our generous sponsors.
Without your support, this Conference would not be as
good as it is, year after year.

We're underway, with a pretty good crowd.

Thursday morning, 9:00 a.m., and we're looking not too bad. A fair number of folks have pressed forward despite the weather and travel disruptions and are in the room. More report they are not tapping out, and are pressing onwards.

We have more viewers remote than we originally anticipated, but the tech is holding up.

Over the next couple of days, our lawyers, judges, legal scholars, appraisers, law students, right-of-way agents, relocation experts, property owners, and other related professionals made their way to Austin.

The fact that folks who were experiencing some rather dramatic travel difficulties and delays (ask Jack about his late night Uber from Houston airport to Austin, or how our west coasters got re-routed all over creation), didn't quit but were determined to get to Austin told us something about why this Conference has been so successful over the decades.

It's more than great programming from the nation's experts. The Conference is also an essential venue to get acquainted with new colleagues and welcome them to the Dirt Law Bar, reconnect with long-time friends, and have a bit of fun together.

Most of the Conference attendees eventually made it, and very few (reasonably) threw in the towel and turned around for home. This was the 40th edition of the Conference, and we really know why it is one of the most-established and successful conferences in the ALI-CLE stable of programs. This year's experience really drove home why we come, and why our attendees and faculty are so dedicated and committed, despite the sacrifices we make to attend or to present. 

Hybrid: Pacific Legal Foundation's John Groen
remoting in while en-route via Phoenix, and
Baylor lawprof Jessica Asbridge on
"Everything Old is New Again: Why Today’s Practitioners
Need to Understand the Original Meaning of the
Takings and Just Compensation Clauses."


The "Condemnation 101" track was wildly popular
both with new members of the Eminent Domain Bar,
as well as old hands. Standing room only throughout the day.

We also had reports from the field that the remote viewing
was going well. Here's how we looked in the
mountains of North Carolina.

Let's not forget the substance of the Conference.
Lots of practical learning. Here's Hawaii's Mark Murakami
and Virginia's Steve Clarke on "Avoiding the Real Jeopardy:  
Structuring Eminent Domain Settlements."
And no, two-time Jeopardy! champion Steve did not
give answers in the form of a question.

Weather throughout Wednesday and Thursday was icy and nasty,
but towards the end of Thursday seemed to be clearing up.

Consequently, the view from the podium looked better and better
with more showing up and more reporting they were nearly there.

The programming at the Conference is traditionally
a mix of practical subjects and the more theoretical.
Here's one of the highlight latter programs,
Alan Ackerman (Michigan), Matthew Ackerman (also Michigan),
and Steve Davis (Missouri) on "What Does the Supreme Court
Mean When it Says Just Compensation is “Self-Executing?"

There's an ethics program, naturally, for those of us in jurisdictions
with mandatory CLE requirements. But we try and not do "typical"
(i.e., boring) ethics programs. Here's Sarah Kellner (Colorado) and
Shane Rayman (Ontario, CN) on "Ethics: Building Your Practice
by Mentoring the Next Generation of Eminent Domain Professionals."

An example of our practice-oriented programming: Tony DellaPelle
(New Jersey), Bernadette Duran-Brown (California), 
and Andrew Lines (Illinois) on "Preparing Your Expert
Witness to Shine in Virtual Proceedings:
Tools and Tips For Trial Lawyers." 

Andrew actually pretended he was far, far away for his "deposition"
when he was in fact one floor up from the Conference room.
Way to go all-in.

Thanks to our generous sponsors, we were able to avoid Austin's
icy roads and have our Mickelthwait barbecue
brought in for lunch. Was it well-received? See for yourself. Line
was through the lobby and nearly out the front door.

Thank you to Texas Supreme Court Justice Jimmy Blacklock
for speaking on "Developing Property Right Issues in Texas,
Questions and Answers with Justice Jimmy Blacklock"
(interviewed by Justin Hodge (Texas)

It was not an echo-chamber either. Here, in a hotly-debated
session, Jeff Redfern (Virginia), Steve Silva (Nevada), and
Lawprof Emilio Longoria (St Mary's Law, Texas)
debate "When the SWAT Team Comes (No) Knocking:
Police Power Takings."

Jeff, Steve, and Prof Longoria's session got everyone's blood pumping.

It wasn't all serious, and we had a bit of fun.
Like this after-hours live edition of the Eminent Domain & Right of Way
Clubhouse with Beth Smith (Wisconsin), Patrick McAllister (Indiana)
and some dude who was having a post-CLE session beer.

Some of our faculty are more formal and like to speak
standing at the lectern. Here, Pacific Legal Foundation's Jon Houghton
(New Jersey) and Ben Stormes (Montana) on
"Avoiding Pitfalls When Trying a Penn Central Case:
Lessons From the Takings Trenches."

Others are less formal, and speak while sitting
(and wildly gesticulating to make sure you are paying attention).
Kristen Renfro (California), and some guy on
"Your Regulatory Takings Case is in Federal Court – Now What?"

By Friday morning, the Austin weather was looking up. Really up.
And we nearly had everyone in the room.
By hook or by crook, most everyone was there.

By Friday were were pretty much back to normal.
Nearly all faculty and all attendees in the room.
And thus we turned it over to our Saturday morning stalwarts,
starting with Jim Burling, here speaking about "The Many Theories of
Property - Do They Matter in Court?" (and Pufendorf)

No one wanted to miss Michael Berger's "Regulatory Takings Update"
on Saturday morning either.

When you can fill this many seats at a CLE conference on a
Saturday morning after two full days of programming,
you know your speakers are the
right ones (thank you Jim and Michael).

After Jim and Michael did their thing, we held our "National Forum,"
a moderated "open-mic" session where Conference attendees
take to the podium and speak about their case or issue,
or crowdsource a question. Here, Pacific Legal
Foundation's Kady Valois, speaking about
our firm's latest takings cert grant.

We were happy to announce that the 41st ALI-CLE Eminent Domain &
Land Valuation Litigation Conference will be held February 1-3, 2024,
at the JW Marriott in New Orleans.
Save the date!

Ivy Cadle (Georgia - Go Dawgs!) is already planning his trip to
#EminentDomain 2024 in New Orleans.
See you there, Ivy.

With the programming wrapped up, it was time for farewells
and thank yous. Here, four of our law students from William and Mary Law,
who took the time out of their schedules to make their way to
Austin for some real-world learning and networking.
Well done, new colleagues!

Even after the proceedings closed, there was more work to be done.
Here, the ALI-CLE Tech Team breaks it down, after successfully
guiding us through the past four days. They are a large part of the
reason why this Conference works so well (plus, they make the
speakers look really good on camera).

To those who joined us - in-person or on-line, thank you. This conference reminded us of why this program is so successful, and why we all return year-after-year.

To those of you who didn't (or couldn't) join us, here's what you missed. You need to remedy that, and come join us next year in New Orleans...

We'll see you in New Orleans for
#EminentDomain2024!
(Want to keep the conversation going in the
interim? Join the ALI-CLE Eminent Domain Conference
page on LinkedIn.)

"Emerging Issues In Property Rights" - Wednesday, February 8, 2023, 3-4pm ET (Free!)

Join our Pacific Legal Foundation colleagues Jon Houghton, Daniel Woislaw, Kady Valois, and Sam Spiegelman (moderating) tomorrow, Wednesday, February 8, 2023, at 3:00 - 4:00 p.m. ET for a free webinar, "Emerging Issues in Property Rights."

Here's the agenda:

Protecting private property rights has been at the heart of PLF’s work since our founding in 1973. Our view, and that of the American Founders, is that property rights are foundational to all other constitutional rights.

Our relentless defense of property rights has secured many precedented victories, including 12 property rights wins at the U.S. Supreme Court—and counting.

Unfortunately, even today, the need for property rights champions remains critical.

Government officials too often relegate property rights to second-class status among Americans’ constitutional rights—cloaking their assaults in erroneous assertions of environmental protection or cleverly constructed land use restrictions.

To learn more about property rights’ legal landscape in 2023, join us for part two of our four-part webinar series, Emerging Issues in Property Rights. Our panel of PLF attorneys will preview the road ahead for property rights and strategies to restore these fundamental rights to their rightful constitutional status.

Join us, and register here (free!).

(Nearly) Last Call: There's Still Time To Join Us For The 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-4, Austin

We really want you there...

One (nearly) last reminder that there's still time to register for your space at the 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, February 1-4, 2023, in Austin. In the past several years, we have sold out due to the conference room capacity and the conference hotel block. But there's still space, although we are nearly full. So register now - don't delay any further! 

Here's the brochure with the complete agenda, schedule, and faculty listing. But to tempt you, here are some of the highlights of the program:

• Everything Old is New Again: Why Today’s Practitioners Need to Understand the Original Meaning of the Takings and Just Compensation Clauses
  
• When the SWAT Team Comes (No) Knocking: Police Power Takings

• Private Utility Takeovers – Lessons From a 67 Day Trial

• "Contraband": How Property Rights Helped Pave the Way for Civil Rights

• Valuation Issues When Billboards and Signs are Condemned

• Setting Client Expectations and Identifying Red Flags

• Preparing Your Expert Witness to Shine in Virtual Proceedings: Tools and Tips for Trial Lawyers

• Developing Property Right Issues in Texas - Questions and Answers from the Bench (with Texas Supreme Court Justice Jimmy Blacklock)

• Eminent Domain and Regulatory Takings Updates: Important Decisions You Need to Know

• Ethics: Building Your Practice by Mentoring the Next Generation of Eminent Domain Lawyers

• the Condemnation 101 program (a one-day course for those new to the practice, or for experienced practitioners wanting a refresher)
• ...and much more!

To register, go here.

Looking forward to seeing everyone in Austin for the 40th edition of the Conference.

Program Brochure, 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Austin, Texas, Feb 1-...

Shame On You: Govt Exerting "Irresistible Pressure" On (But Not Forcing) You To Buy Worthless Bonds Isn't A Taking

One from the U.S. Court of Appeals for the First Circuit.

In In re Financial Oversight & Management Board for Puerto Rico, No. 22-1048 (Nov. 22, 2022), the court affirmed the district court's 12(b)(6) dismissal of a takings claim because the government didn't actually force the plaintiff credit unions into buying what the complaint alleges are "worthless government-issued securities," even where "the defendants knew - but did not disclose - that these would be losing investments given the precarious state and dire financial situation in which Puerto Rico found itself at the time." Slip op. at 1.

Conned into purchasing junk bonds? That's on you.

This is another Takings Clause claim arising out of the Puerto Rico governmental bankruptcy. [Disclosure: we represent some of the property owners/Respondents in that other matter, now at the cert stage in SCOTUS.] The complaint alleged that in a series of meetings over the course of four years, Puerto Rico officials misled the credit unions into investing in securities that turned out to be worthless because the Commonwealth's finances, contrary to the picture portrayed, was in shambles. This case is an adversary proceeding in the subsequent bankruptcy case.

To understand the court's handling of the takings claim, you might want to read -- or at least skim -- the first part of the opinion in which the court affirms dismissal of the credit unions' fraud claim because (you guessed it) the claim was not pleaded with the right about of specificity. See slip op.at 24 ("specificity is the name of the game when alleging fraud, and the Credit Unions have not filled the bill here"). 

Slide down to page 29 of the slip opinion, where the takings analysis starts. Here's how the court describes the allegations in the complaint:

In the SAC, the Credit Unions allege that the defendants used "regulatory powers" to take "material portions of Plaintiffs' cash and liquid assets," resulting in "illegally appropriat[ing] the moneys of the Cooperatives to finance the government operation" by providing "materially diminished and value impaired government papers that did not constitute just compensation." According to the plaintiffs, the defendants used the circular letters to compel the Credit Unions "to purchase knowingly materially diminished and value impaired government bonds," "depriv[ing] the Cooperatives' property of any significant economic value." The Credit Unions allege the defendants' actions resulted in both a per se physical taking and a categorical regulatory taking.

Slip op. 29-30 (footnote omitted).

The court summed up the takings claim in a footnote:

As best we can tell, based on closely examining the SAC, the Credit Unions' takings claim theory seems to be that they were compelled to spend more on the bonds than the bonds were worth on the date of purchase. Problem is, merely alleging in the SAC an after-purchase decline in the value of the bonds in support of this theory does not, in and of itself, mean the bonds were not worth what the Credit Unions paid at the time of purchase. And relatedly, the allegations in the SAC about what the government and its instrumentalities knew at the time the Credit Unions purchased the bonds are all no-meat-on-the-bones conclusory in nature, e.g., the "instruments lacked true value," and the defendants pushed the bonds "with full knowledge of the government's lack of financial capacity to pay."

Slip op. at 33 n.20.

The credit unions alleged the government put them under "irresistible pressure" to buy the securities, but the court concluded this wasn't enough because they were not "require[d] to purchase." Slip op. at 34. The government "did not instruct the Credit Unions to purchase the bonds." Id. Yeah, the government "authorized and enticed the Credit Unions to purchase the bonds," but the purchase wasn't at the point of a gun, and the credit unions "voluntarily participate[d]" in the deal. Id. ("[W]here a property owner voluntarily participates in a regulated program, there can be no unconstitutional taking.") (quoting Franklin Mem'l Hosp. v. Harvey, 575 F.3d 121, 129 (1st Cir. 2009)).

Apparently, the plaintiffs did not allege a due process claim.

And we close by noting two items: (1) the opinion uses Courier New (very Old School, First Circuit), and (2) the opinion has a somewhat "hip" feel to it - casual, conversational; and instead of "Conclusion," it ends with the "Wrap Up." Solid.

In re Financial Oversight & Management Board for Puerto Rico, No. 22-1048 (1st Cir. Nov. 23, 2022)

Here's The Program For The 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-4, 2023, Austin

Here it is, the official agenda and program for the 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, February 2-4, 2023 (with a special event the evening of Wednesday, February 1, 2023 to entice you to arrive early).

Here's the brochure with the complete agenda, schedule, and faculty listing. But to tempt you, here are some of the highlights of the program:

• Everything Old is New Again: Why Today’s Practitioners Need to Understand the Original Meaning of the Takings and Just Compensation Clauses

• Private Utility Takeovers – Lessons From a 67 Day Trial

• Valuation Issues When Billboards and Signs are Condemned

• Setting Client Expectations and Identifying Red Flags

• Developing Property Right Issues in Texas - Questions and Answers from the Bench: A View From the Bench (with Texas Supreme Court Justice Jimmy Blacklock)

• Eminent Domain and Regulatory Takings Updates: Important Decisions You Need to Know

• Ethics: Building Your Practice by Mentoring the Next Generation of Eminent Domain Lawyers

• ...and much more!

To register, go here.

Register now and hold your space. In the past several years, we have sold out due to the conference room capacity, and the conference hotel block. So don't delay. 

Looking forward to seeing everyone in Austin for the 40th edition of the Conference.

Program Brochure, 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Austin, Texas, Feb 1-...

Whether $23K Traffic Fee Is Proportional To One Single-Family Home Is Beyond The Ken Of Judges

The County of El Dorado requires everyone seeking a building permit for new development to pay a fee to mitigate the additional traffic that the proposed development is predicted to cause. But the County doesn't calculate the fee by actually looking at a proposed development and predicting what traffic impacts in may be responsible for. Rather, it has a generic fee schedule that applies to all proposed developments broken down by location and type (residential, commercial, etc.). We don't care whether your development actually causes more traffic (or if it does, the extent of the increase), we're hitting you all up.

Or as the California Court of Appeal put it in Sheetz v. County of El Dorado, No. C093682 (Oct. 19, 2022), "[i]n assessing the fee, the County does not make any 'individualized determinations' as to the nature and extent of the traffic impacts caused by a particular project on state and local roads." Slip op. at 3.

Thus, when Sheetz asked for a building permit for a 1,854 square foot "manufactured home" (i.e., a mobile home), the County said "sure ... just pay the scheduled traffic mitigation fee." Hitting up the schedule, the fee worked out to a whopping $23,420. It appears El Dorado County is appropriately named.

Sheetz paid up, and then protested that this fee had not been calculated legally. The County had not shown that his modest proposal would create additional traffic that only $23 Grand would mitigate. When the County didn't respond, he sued, asserting claims for an unconstitutional condition under Nollan/Dolan, and for violation of the California Mitigation Fee Act. The trial court sustained the County's demurrer and denied the petition for writ of mandate.

None of this bothered the court of appeal, and you can skip to page 12 of the opinion to understand why. As you might predict, the court concluded that the Nollan/Dolan nexus and rough proportionality requirements apply only to these things we call "exactions," and the County here is not imposing an "exaction." As the opinion put it, "while the Nollan/Dolan test applies to monetary land-use exactions which are imposed ad hoc on an individual and discretionary basis, it does not apply to generally applicable development impact fees imposed through legislative action." Slip op. at 12.

Yeah, there's "some danger" of "improper leveraging" of the power to approve or disapprove development and use of private property (ya think?), "such generally applicable legislation is subject to the ordinary restraints of the democratic political process."

Ah yes, the "leave justice to politics" rationale:

A city council that charged extortionate fees for all property development, unjustifiable by mitigation needs, would likely face widespread and well-financed opposition at the next election. Ad hoc individual monetary exactions deserve special judicial scrutiny mainly because, affecting fewer citizens and evading systematic assessment, they are more likely to escape such political controls.”

Slip op. at 13 (quoting San Remo Hotel L.P. v. City and County of San Francisco, 27 Cal.4th 643, 671 (Cal. Ct. App. 2002)).

What saved the traffic fee demand from judicial scrutiny was that it was not discretionary, and applied to everyone. Thus, the unconstitutional condition claim was subject only to rational basis review, and the Mitigation Fee Act claim was subject only to a reasonable relationship test. And we know what those mean: this stuff is just too complex for judges to figure out. Mess around with one guy and you might get a stern judicial talking to. But mess around with everyone? Sorry, we can't figure it out because your world frightens and confuses us!

This isn't a new issue, and not only is there a long-standing lower court divergence, the Supreme Court has declined offers in the past to review the legislative vs adjudicative distinction (vel non) when the government demands your money or your rights.

Will the Court staying on the sidelines continue? Stay tuned.

Sheetz v. El Dorado County, No. C093682 (Cal. Ct. App. Oct. 19, 2022)

Brigham-Kanner Property Rights Conference Wrap-Up

The William and Mary Law School has posted David Morrill's summary of the recent Brigham-Kanner Property Rights Conference.

In addition to a full day of academic and practicing bar speakers on Friday, and the award banquet on Thursday evening, the Conference included two full days of student-oriented programming earlier in the week, where practicing land use and property rights spoke about their practices, the hot topics in the field, and how they ended up in this practice area. Every session was well attended, as the photos from the events show.

Check it out. And please join us at future Conferences!

Still Time To Join Us (In-Person Or Remote) For The 19th Annual Brigham-Kanner Property Rights Conference

One last reminder that there' still time to register for the upcoming Brigham-Kanner Property Rights Conference at the William and Mary Law School in Williamsburg, Virginia, September 29-30, 2022. If you can't make it to the historic campus, there's an option to attend remotely.

In our opinion, the Conference is the best of its kind because it brings together legal scholars and the practicing bar to talk dirt law theory and practice. We also a have a full supplemental program for law students, that covers property law and careers in eminent domain law, a recruiting session, a program on international property rights, and a program on land use law.

Registration for the Conference is ongoing, and you can sign up here.

Here is the full agenda. (We'll be speaking on Panel #2, "Reshaping the Framework Protecting Property Under the Roberts Court.")

Come on, join us!

 

NC: Generally-Applicable Impact Fee Is Subject To Nollan/Dolan/Koontz

We recommend you review the North Carolina Supreme Court's opinion in Anderson Creek Partners, L.P. v. County of Harnett, No. 63PA21-1 (Aug. 19, 2022). It's long (70 page majority, plus 19 pages of concurring and dissenting opinions), but worth your time because the majority concludes that legislatively-imposed fees, applicable to all, are "exactions" that are subject to the nexus/rough proportionality requirements of Nollan/Dolan/Koontz.

The county adopted a requirement that residential property developers pay a per-lot, one-time water and sewer capacity use fee as a condition of the county accepting applications for a water or sewer permit. The details:

Section 28(h) of the ordinance provides for the collection of “capacity use” fees for the purpose of “partially recover[ing] directly from new customers the costs of capacity of the utility system to serve them.” More specifically, the ordinance provides that, for each new residential connection to a water or sewer system owned or operated by the County, the landowner must pay a one-time, non-negotiable fee of $1,000 for water service and $1,200 for sewer service, with the landowner being required to make the required payment prior to the County’s concurrence in the landowner’s application to the North Carolina Department of Environment and Natural Resources1 for the issuance of the required water and/or sewer permits. According to the ordinance, “such charges are reasonable and necessary and result in a more equitable and economically efficient method of recovery of such costs to handle new growth and to serve new customers without placing an additional financial burden on existing customers solely through inordinate enhancement of water and sewer rates.”

Slip op. at 5.

Anderson Creek had paid more than $25,000 in fees, and sought a state court declaration that the fee violated its due process and equal protection rights under the N.C. Constitution (recall that the state constitution does not contain a formal "takings" clause). The trial court entered judgment on the pleadings for the county, and the court of appeals affirmed because these are generally-applicable user fees, not subject to the N/D/K unconstitutional conditions analysis. "Exactions" are reserved for ad hoc fees, not fees imposed by legislative action. See slip op. at 14-16.

The Supreme Court disagreed. Viewing this as a due process problem, the majority noted that the point of the N/D/K doctrine is to prevent governmental coercion, and forcing people to choose which of their constitutional rights they'd like to exercise.

The heart of the court's analysis starts at page 25, where the opinion concludes that the county's "capacity use fee" is properly classified as a fee to cover new infrastructure, "a description that falls squarely within the definition of an 'impact fee' as discussed above. Slip op. at 27 (footnote omitted). 

The fees at issue in this case are not water and sewer service fees, paid by customers at a fixed rate in accordance with their monthly metered water and sewer usage for the purpose of paying for the service that they used. In addition, the challenged fees are not “tap-on fees” paid at the time that individual lots are connected to the County’s water and sewer system. Instead, the fees at issue in this case are intended to provide the County with a contribution toward the cost of expanding its water and sewer infrastructure to account for the additional customers that will be added as a result of the developer’s development. Thus, the “capacity use” fees at issue in this case, which are not intended to cover the cost of any service that is currently being provided to the person paying them “at the time of actual use,” Quality Built Homes, I, 369 N.C. at 21, are clearly different from those at issue in Homebuilders Association of Charlotte, which were specifically intended to “cover the costs of regulatory services provided by the city,” including the labor costs associated with reviewing permit applications, 336 N.C. at 45. As a result, for all of these reasons, we hold that the challenged “capacity use fees” are properly categorized as impact fees rather than “user fees,” a determination that renders much of the authority upon which the County relies inapplicable.

Slip op. at 27-28 (footnote omitted)

Next, the court determined that as "exactions," the fees are subject to N/D/K requirements, even though they were not imposed ad hoc, but applied to everyone equally. The court rejected other courts' conclusions that legislatively-imposed fees are not subject to the nexus and proportionality requirement. See slip op. at 25-26.

The court was having none of it:

A careful review of the record and the applicable law convinces us that the County’s capacity use fees are subject to scrutiny under the “essential nexus” and “rough proportionality” tests articulated in Nollan and Dolan. In Koontz, the Supreme Court specifically held that “the government’s demand for property from a land-use permit application must satisfy the requirements of Nollan and Dolan even when the government denies the permit and even when its demand is for money,” 570 U.S. at 619 (emphasis added), with the Supreme Court’s reference to “in lieu of” fees, rather than limiting the reach of the Supreme Court’s decision, simply being a response to the Florida Supreme Court’s conclusion that a governmental demand for money rather than an interference in tangible property rights did not constitute a taking.

Slip op. at 43. "As a result, we conclude that the 'monetary exactions' with which Koontz was concerned were not limited to 'in lieu of' fees and, instead, encompassed a broader range of governmental demands for the payment of money as a precondition for the approval of a land-use permit." Slip op. at 45 (footnote omitted). The county's fees were imposed upon an identified property interest, even though those fees applied to everyone with a similar interest. Slip op. at 46 ("In other words, the fee at issue in this case is, in fact, linked to a specific piece of property, in each case the specific parcel of land that has been proposed for development.").

The court also concluded that neither Nollan nor Dolan turned on whether the condition being challenged was imposed administratively or legislatively:

In addition, we are not persuaded that the applicability of the test enunciated in Nollan and Dolan depends upon whether the challenged condition was imposed administratively or legislatively. As at least one member of the Supreme Court has recognized, the lower courts have reached differing conclusions with respect to this issue, which the Supreme Court has yet to address. See Cal. Bldg. Indus. Ass’n v. City of San Jose, 577 U.S. 1179 (2016) (Thomas, J., concurring in the denial of certiorari).13 After carefully reviewing the relevant decisions, we agree with plaintiffs that nothing in Nollan, Dolan, or Koontz supports a view that those decisions only apply in the context of “administrative” decisions, with the Supreme Court having consistently described the “unconstitutional conditions” doctrine as “preventing the government from coercing people into giving up” a constitutional right rather than preventing a particular branch of government from acting in a particular manner. Koontz, 570 U.S. at 604 (emphasis added); see also Dolan, 512 U.S. at 385 (noting that “the government may not require a person to give up a constitutional right—here the right to receive just compensation when property is taken for a public use—in exchange for a discretionary benefit conferred by the government where the benefit sought has little or no relationship to the property”) (emphasis added).

Slip op. at 52-52 (footnote omitted).

So there it is. Worth your time checking out. 

Disclosure: our Pacific Legal Foundation colleagues filed an amicus brief in support of the property owners here.

Anderson Creek Partners, L.P. v. County of Harnett, No. 63PA21-1 (N.C. Aug. 19, 2022)

Registration Underway - 19th Annual Brigham-Kanner Property Rights Conference (Sep 29-30, 2022)

There's still space for you to join us -- preferably in-person, but remotely if that is not possible for you -- at the 19th Annual Brigham-Kanner Property Rights Conference, September 29-30, 2022, at the William and Mary Law School in Williamsburg.

The American Law Institute was kind enough to post a notice about the Conference and the ALI members who are on the speaking faculty here.

Registration for the Conference is ongoing, and you can sign up here. Here is the full agenda. (We'll be speaking on Panel #2, "Reshaping the Framework Protecting Property Under the Roberts Court."

In our opinion, the Conference is the best of its kind, and brings together legal scholars and the practicing bar to talk dirt law. So please come join us.

Links From CRE's "Supreme Court Update: Is This Property's Moment?"

Here are the links to the cases and other materials that we mentioned (and some we didn't) earlier today at the Counselors of Real Estate's program on "Supreme Court Update: Is This Property's Moment?" Thank you to our colleagues at CRE for including us in the program.

I.  The evolving ground rules

• Takings cases can go to federal court:
  • Condemnation: PennEast Pipeline Co. v. New Jersey (eminent domain and the 11th Amendment)
  • Inverse and regulatory: Knick v. Township of Scott (opening back up federal courts to takings claims).
• How you define the “property” taken is key:
  • Murr v. Wisconsin (the larger parcel issue, applied in regulatory takings cases).
  • Koontz (money as property ... and exactions).
  • Brandt (easements, vel non)
• The exclusion “stick” is really important:
  • Any distinction between “permanent” and “temporary” takings is a matter of valuation, not liability: Cedar Point Nursery v. Hassid. 
  • Horne v. USDA (II) (California raisins and physical invasions)
  • Arkansas Game (physical invasions, again).
•  Remedies:
  • The remedy for a “taking” isn’t limited to just compensation: Horne v. USDA (I).
  • Winter v. Natural Resources Defense Council, Inc. (preliminary injunctions, diesel-electric submarines, and Pearl Harbor).

 II.  Issues on the horizon

• Compensation and timing:
  • what to do when the condemnor doesn’t promptly pay up?
  • what is the date of valuation?
• Ability of condemnor to define the taken property:
  • Is there an obligation to value severance damages?
  • Fee take vs easement.
  • Temporary vs permanent.
• Does the Constitution protect property’s use, or value? Police power or takings?
• Whither Yee and the future of the physical occupation rule.
• Are eviction moratoria “takings?”
• Can you really get to federal court and stay there?
• The undivided fee rule ... constitutional?

Here's The Full Speaker And Topic List For The Brigham-Kanner Property Rights Conference (Sep 29-30, 2022)

By now, you know that the 19th Brigham-Kanner Property Rights Conference is set for September 29-30, 2022, at the William and Mary Law School in Williamsburg, Virginia (register here - space is limited - fee ranges from free to $195 - a bargain!). And you know that our colleague Jim Burling is this year's B-K Prize winner.

But now you know who is speaking at the Conference, and the topics: here's the full agenda. The list of speakers is too long to list here but check out these topics:

• Panel 1: The Importance of Property Rights: A Tribute to James S. Burling
• Panel 2: Reshaping the Framework Protecting Property Under the Roberts Court (that's the panel we're speaking on)
  
• Roundtable: Emerging Issues in Takings and Property Rights Litigation
• Panel 3: Choosing A Property Regime
• Panel 4: Property Rights in Times of Scarcity and Crisis

Who can resist these subjects? Plan on joining join us in September.

2022 Brigham-Kanner Property Rights Conference Speaker Panels

Virginia: Property Owner Can Object To Permit Condition As Unconstitutional, Even After Accepting The Permit

The owners of the Hollymead Town Center (Route 29, LLC) located, perhaps not surprisingly along U.S. Route 29 in Albemarle County outside of Charlottesville, needed the County to rezone a portion of the property.

Part of the rezone was something called a "conditional proffer" that required a cash donation of $50,000 "[w]ithin thirty days after demand by the County after public transportation service is provided to the Project," and then additional donations of fifth large each year for 9 years for a total of a half-million.

There was some discussion among the public and County officials about whether this condition would ever be actually realized because public transportation service might not be provided in the future, but in the end the County approved the "Commuter Route" that is projected to run "from northern Albemarle County to downtown Charlottesville." But the owner objected to the cash payment, throwing up the Nollan/Dolan/Koontz batsignal: where's that essential nexus and rough proportionality? The Commuter Route is to bring people to and from the more rural parts of the County to downtown, and even though there is a stop at Hollymead, the route isn't "related to the services provided by the Project." The owner claimed the stop at its property was a "pretext," and that the bus line didn't operate during any hours that would service the site.

Nonetheless, the County went forward and opened the Commuter Route. Which, in its mind, triggered the owner's obligation to pony up that first $50k payment under the conditional proffer. The owner didn't pay, and after repeated requests were ignored (by then the amount allegedly owed was $150k) the County sent a NOV of zoning violation.

Next step: the County's zoning administrative appeal process. Owner raised again the lack of essential nexus and proportionality. "The County unanimously voted to deny the Owner's appeal."

Next stop, a Virginia trial court and the County's demurrer. The court overruled the demurrer and conducted a bench trial, after which it ruled for the owner, concluding "all of the notes and information that I have from minutes and otherwise suggest that all of the discussion is talking about moving not folks to and from the [Project], but to and from a certain area adjacent ... down to Charlottesville and Albemarle." The County appealed to the Virginia Supreme Court.

In Board of Supervisors of Albemarle Cty. v. Route 29, LLC, No. 201523 (June 2, 2022), the court rejected the County's two main arguments.

First, the court noted that "[i]n the land-use context, the unconstitutional conditions doctrine prevents a municipality from conditioning the grant of a land-use permit on the applicant’s surrender of their right to just compensation for property expropriated for public use." Slip op. at 10. This applies to land exactions and cash exactions. "In other words, while a state, under its police power, may regulate land use to further legitimate state interests, it may not use this power as a cudgel to coerce concessions from a land-use applicant who seeks to repurpose her property." Id.

The County argued that all that may be true, but here the owner voluntarily accepted the conditional proffer, so you know, none of that Nollan/Dolan/Koontz stuff applies (an argument that is often made where an owner accepts then objects -- rather than rejects and sues -- exaction demands). No, the court concluded, the owner sought the rezoning, agreed to the condition "for the purpose of receiving a land-use permit, which required the amendment of a zoning ordinance." Slip op. at 14. And that means "the unconstitutional conditions doctrine entitles the Owner to ignore or enjoin enforcement of the condition without losing the grant." Id.

Next, the court rejected the County's argument that the trigger to the conditional proffer was the County providing "public transportation," and the bus line is, you know, public transportation (a fact the owner stipped to in the trial court). The County argued that the owner's evidence showing a lack of nexus and proportionality should not have been considered. Nope:

• Government's burden. Slip op. at 15 ("The burden rests on the municipality to justify the enforcement of a conditional proffer in the face of an unconstitutional conditions challenge.").
• The owner introduced evidence that the Commuter Route "actually brings additional vehicular traffic to the Project site." Id. Oof.
• The route "does not run during the times at which traffic to the Project is greatest, and the County meeting minutes entered into evidence show little-to-no discussion concerning the identification or mitigation of traffic impacts resulting from the Project." Id.
• "One County board member described the Transit Proffer as “an asset” that they should not let go to waste, while others openly stated that ridership on the Commuter Route would increase as the population grows in commuter communities in northern Albemarle." Id.
• "The Owner’s traffic impact expert also testified that the effect of the Commuter Route on overall traffic would be negligible. In response, the County offered no evidence and relied on its argument that voluntary conditional proffers are binding even if they lack an essential nexus to the impacts of development." Slip op. at 15-16.

Taking all of that into consideration, the Supreme Court concluded the evidence was admissible:

As explained above, in order to be constitutional and enforceable, conditional proffers must bear an essential nexus and be roughly proportional to the impacts associated with the new development. The nexus requirement demands a relationship between the conditional proffer and the impacts of the development. We also explained that “rough proportionality,” while not requiring a mathematical formula to determine the degree of congruence, requires an “individual determination” by the municipality that the conditional proffer targets and addresses specific impacts of the proposed development. The evidence presented at trial, including the stipulations, and exhibits, is sufficient to support the circuit court’s conclusion that the County failed to meet its burden to prove that the Transit Proffer bears a nexus to, and is roughly proportional to, the impacts of the Project. Therefore, the circuit court did not err in denying the County’s motion to strike the evidence.

None of this is to say that the Transit Proffer is void on its face. The Owner acknowledges, and we agree, that a different public transportation service may trigger Transit Proffer payments that are enforceable at law. However, the Commuter Route, as it is presently designed, does not. See Nollan, 483 U.S. at 842.

Slip op. at 16.

Verdict affirmed.

Board of Supervisors of Albemarle Cty. v. Route 29, LLC, No. 201523 (Va. June 2, 2022)

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

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

May 25 and 26, 2022, downtown Honolulu.

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

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

• Takings 

• Transit Oriented Development (TOD) 

• Seawalls and Shoreline Access 

• Climate Change 

• Affordable/Workforce Housing 

• Ethical Considerations for Real Property Practitioners and Other Professionals

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

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

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

New Cert Petition: Are Generally-Applicable Requirements Subject To Nollan-Dollan Analysis?

Well, that was quick. Last month, as we reported here, the a Ninth Circuit panel held that the City of Oakland, California, could require property owners to pay thousands of dollars in what is branded "relocation fee" to their tenants as a precondition of the owner moving into their own property. This isn't an "exaction" subject to the nexus and rough proportionality requirements applicable to such demands when they are in land use permits. This was merely a regulation of the landlord-tenant relationship.

Now, our colleagues Dave Breemer and Brian Hodges (the team responsible for Knick v. Township of Scott) have produced this cert petition.

As this is a case in which our firm has an active part, we won't be doing much more here than posting the petition, and the Question Presented. You can read the petition yourself and get the idea of what the issues are. 

Here are the Questions Presented:

1. Whether the unconstitutional conditions tests in Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994), apply to an ordinance that requires rental owners to make a payment to a tenant before the owners may end the tenancy and reoccupy their home.

2. Whether “state action” sufficient to justify a Fourth Amendment “seizure” claim exists when a law directs the transfer of property from one private citizen to another.

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

Now we wait.

Petition for Writ of Certiorari, Ballinger v. City of Oakland, No.21-1181 (Feb. 24, 2022)

CAFED: Fed Takeover Of Fannie Mae & Freddie Mac Not An "Exaction," Not A Taking

We gotta be honest here: when the substantive portion of an opinion (even an opinion about takings and exactions) begins with, "Congress created the Enterprises to, inter alia, provide liquidity to the mortgage market..." our eyes kind of glaze over. It's going to be one of those opinions.

But we soldiered on, and slogged through the Federal Circuit's opinion in Washington Federal v. United States, No. 20-2190 (Feb. 22, 2022). The case is about the 2008 federal takeover of Freddie Mac and Fannie Mae. We won't go into the details, but the basic allegations in the complaint are that the fed takeover of the entities was an exaction, and a taking.

The Federal Circuit affirmed the Court of Federal Claims' dismissal, although for other reasons. The CFC thought the plaintiffs missed the 30-day statute of repose applicable to challenging the appointment of a conservator. The Federal Circuit disagreed, concluding that the six-year statute generally applicable to takings claims governed. But it affirmed the dismissal for failure to state a claim.

'Exactions" and "takings" are "separate wrongs." An exaction claim challenges the constitutional legitimacy of the government action. Whereas in takings, the property owner seeks compensation for an otherwise legitimate government action. Check out footnote 4:

The Claims Court treated the count as two legal claims that the Washington Federal Plaintiffs pled in the alternative, and we do as well. See Wash. Fed., 149 Fed. Cl. at 288–89. In contrast to a takings claim, which involves lawful government action, an illegal exaction claim “involves money that was ‘improperly paid, exacted, or taken from the claimant in contravention of the Constitution, a statute, or a regulation.’” Norman v. United States, 429 F.3d 1081, 1095 (Fed. Cir. 2005).

Slip op. at 6 n.4.

That's all well and good, the Federal Circuit concluded, but where Congress has established a separate review process to challenge agency action as unlawful, "a plaintiff may not separately litigate the issue of whether the agency acted in violation of statute or regulation in a takings (or illegal exaction) action." Slip op. at 11. That limitation rendered the plaintiffs' exaction claim here "not plausible as a matter of law." Id.

The court did not view this as a question of a statute of limitations or repose, but that goes to the nature of exaction and takings claims:

The Washington Federal Plaintiffs also argue that interpreting § 4617(a)(5) to bar direct claims by shareholders seeking monetary relief for Fifth Amendment violations would raise serious due process concerns. We disagree. As noted, the statute of limitations in § 4617(a)(5) does not time-bar Fifth Amendment takings claims before the Claims Court. A litigant simply cannot assert a plausible takings or illegal exaction claim predicated on the unlawfulness of an agency action where Congress provided an alternate exclusive means to challenge that action.

Slip op. at 13-14.

The plaintiffs' straight-up takings claim didn't fare any better. The complaint objected to the feds' unlawful appointment of itself as conservator. And we know that in order to get to "takings" relief, the plaintiff can't be complaining about unlawful action (at least in the Federal Circuit). See slip op. at 15 ("a plaintiff may not assert a takings claim in the Claims Court claiming entitled to prevail because the agency acted in violation of a statute or regulation").

The Federal Circuit also concluded that the plaintiffs in this case lacked standing because as shareholders, they were asserting the rights of the entities, not their own. See slip op. at 17-19.

Washington Federal v. United States, No. 20-2190 (Fed. Cir. Feb. 22, 2022)

2022 ALI-CLE Eminent Domain And Land Valuation Litigation Conference, Scottsdale: You Should Have Been There!

After a two-year absence in which we went remote, in the last week of last month (our usual spot on the calendar, between the playoffs and Super Bowl), we once again met in-person for the American Law Institute-CLE Eminent Domain and Land Valuation Litigation Conference.

Approximately 200 lawyers, judges, legal scholars, appraisers, law students, right-of-way agents, relocation experts, property owners, and other related professionals gathered in-person--yes, in-person--at the Scottsdale (Arizona) Resort at McCormick Ranch, to get reacquainted, learn stuff, and renew ties last made in-person in Nashville in 2020. In addition to the live attendance, we also welcomed about 50 remote colleagues, who joined the live webstream.

This was the 39th edition of the Conference, one of the most-established and successful conferences in the ALI-CLE stable of programs.

To those who joined us - thank you. This conference reminded us of why this program is so successful, and why we all return year-after-year.

To those of you who didn't (or couldn't) join us, here's what you missed. You need to remedy that, and come join us next year...

Our 2022 Proof of Life Photo.

Every year, as we open the program, I take to the lectern for what I call my "proof of life" photo. Our Conference ends up in some really fun, exciting places. Nashville. Palm Springs. San Diego. Austin. San Francisco. Charleston. And I want to prove to the folks back in the office that yes, we really are in the room, learning stuff. And not out enjoying all that our venues have to offer (we save that for after-hours).

In this photo, we're in the room, spread out (the Resort put us in its massive ballroom, so we had room to spare).

Thank you to our sponsors. Without your generosity, the Conference would not be as good as it is.

Lawprof Karen Bradshaw presented our keynote address on Friday, "Do Animals Have Property Rights?" with more from her recent book "Wildlife as Property Owners." Her talk was followed by a book signing, too. Interesting stuff for sure.

Our main room was nicely filled for every program. A real testament to the subjects discussed, and the quality of the faculty.

The program includes a mix of practice and substantive topics. Here, Virginia's Steve Clarke in one of the breakout rooms (also nicely filled), presenting on "Federal Court and the Daubert Challenge – How To Prepare."

But it wasn't all eminent domain, property, and CLE credits. Naturally, with the beautiful Arizona winter weather, we found time to get out-of-doors and do things. Like this intra-firm golf tournament.

Which firm prevailed? You'll have to ask them who has the bragging rights.

What was especially nice was that our sponsor tables and the ALI-CLE registration table could be outside of the presentation rooms. Love that AZ weather.

New Jersey's Tony Della Pelle and Connecticut's Dwight Merriam on "COVID-19 Takings."

Our faculty includes not only lawyers and law professors. We also have other industry professionals come and present. Here, Washington's Martyn Daniel, Texas' Kristen Bennett, and (lawyer) Alan Ackerman from Michigan speaking about "Maximizing Relocation Benefits: Understanding the Law and Regulations to Ensure Fairness."

Ah, ethics. A tough subject to cover. Especially at 8am. But Georgia's Ivy Cadle (with the obligatory "go dawgs!"), Michigan's Darius Dynkowski, and (off-screen) Virginia's Kelly Sheeran and Texas' Justin Hodge filled the room with "Ethics Jeopardy! Live."

Yeah, Justin really did go for the end zone for his role as Ethics Jeopardy! host.

We understood the situation. Our faculty, staff, and attendees came to Arizona from around the nation. Some places have opened up, others are still getting there. We minimized any risks. Spread out in a huge room, and everyone was pretty cool with the modest requirements from ALI-CLE. What was especially good was that nearly every event but the actual programming were outside. 

Another featured panel was on the Supreme Court's big decision in Cedar Point Nursery. We brought together three expert perspectives on the case and what it means for the future. "Did the Supreme Court Signal a New Direction for Property Rights in Cedar Point Nursery?" featured California's Joshua Thompson (prevailing counsel in the case), U. Virginia lawprof Julia Mahoney, and (off-camera, since he remoted in) Maryland's Matthew Littleton, who filed a government-side amicus brief in the case.

Also pictured: the moderator, some guy who writes a blog.

Colorado's Katie Gray and Nebraska's Bill Blake on "Project Abandonment: How to Position Your Client for the Fallout When Projects Don't Get Built." Really useful.

Tag swag (aka badge flair) courtesy of our Platinum sponsor.

Our two fave tags.

Outdoors at night - really nice under the lights by the fire, after a long day of CLE programming.

Hawaii's Mark Murakami teamed with Wisconsin's Smitha Chintamaneni for "Why Jurisdictional Offers Must Include an Assessment of Severance Damages."

Even our final programs each day attracted a substantial crowd, often tough to do after long days of sitting in class. A testament to the strength of the faculty and the topics. Here's the audience for "Defending the Appraisal in the Courtroom - The Insider's View."

We put speakers with competing views on these panels, to get the blood pumping and keep everyone's attention.

Saturday morning, after two full days of (great) programming, is still a tough spot for a speaker, because they have to keep us focused, and interested.

That's why we always reserve these spots for two old hands, who will keep us zeroed in. Above is California's Jim Burling, with a tour-de-force solo hour on "What Are the Top 20 Ways to Increase the Cost of Housing? The Answer May Surprise You!"

Below, Michael Berger (looking a bit like Big Brother, admittedly), who remoted in from California with his annual "Regulatory Takings Update."

Feral cats and property rights had us smiling (ask Michael about what this refers to).

Michael Berger is Watching You.

A group photo of the William and Mary Law School contingent at the Conference (minus two other WM Law colleagues who could not be there for the photo). Recent and long-time alumni, current law students, a law prof, and (fourth from left) Jim Burling who later this year will be awarded WM Law's Brigham-Kanner Property Rights Prize at the B-K Conference in September 2022.

A pretty good showing for the alma mater.

There was a whole lot of podcasting going on. Thanks, Infrastructure Junkies and Eminent Domain Podcast. Can't wait for the episodes you recorded.

Again, thank you sponsors!

What about next year? Usually, on the last day of a Conference, we announce the dates and the venue for the following year. This year, due to some slowdowns, ALI-CLE couldn't quite get all the requirements in place to make a formal, official announcement. As soon as we know the venue, we'll go loud here.

As for the date: same date as usual - last week of January or first week of February, depending on the football schedule (which we're trying to avoid).

Stay tuned.

 

CA9: We Reject Legislative/Administrative Distinction In Exactions, But City Requirement That Owners Pay Tenant To Move Back Into Their Home Isn't A Taking

Before we go further into the Ninth Circuit's opinion in Ballinger v. City of Oakland, No. 19-16-550 (Feb. 2, 2022), this disclosure: this is a case in which our law firm represents the property owners. So take that into account as you read our take on the case.

The Ballingers own a home in Oakland, California, and were called away for a year while on active duty with the military. They rented their home with a one-year lease. Oakland makes property owners who want to move back into their own homes at the expiration of a lease to pay tenants a "relocation fee." The Ballingers paid $6.5k to the tenant for the relocation fee, and sued the city for, inter alia, a physical taking of their money, and for an unconstitutional exaction of their home. The district court dismissed for failure to state a claim because the relocation fee is a requirement sourced in the city's ordinances (legislation), and not the result of some kind of property-specific administrative determination or quasi-judicial adjudication.

The Ninth Circuit panel affirmed, but applied a much different analysis. 

First, the court concluded that this was not a physical taking of the Ballingers' money. No, the panel concluded, this was merely a regulation of the landlord-tenant relationship, "not an unconstitutional taking of a specific and identifiable property interest." Slip op. at 6. The court viewed this as a "transaction cost to terminate a lease agreement," something that the city may do in its "broad power" to regulate housing conditions and the landlord-tenant relationship. Slip op. at 7, 8. Relying on Yee v. City of Escondido, 503 U.S. 519 (1992), the panel concluded that the city has the power to adopt rent ceilings, and force the landlord to accept tenants she does not like. The relocation fee imposed by the city is just another one of those regulations on things the landlord can do (here, recover possession of property at the natural end of a lease):

We see little difference between lawful regulations, like rent control, and the Ordinance's regulation of the landlord-tenant relationship here. Thus, the relocation fee is not an unconstitutional physical taking--it "merely regulate[s] [the Ballingers'] use of their land by regulating the relationship between landlord and tenant."

Slip op. at 9 (quoting Yee, 503 U.S. at 528) (footnote omitted).

Yes, the panel concluded, the city cannot condition an owner's right to rent her property on surrendering the right to compensation for a taking, but here, the Ballingers voluntarily surrendered their liberty or property, because they "chose to rent their property causing them to pay the relocation fee when they caused the tenants to relocate." Slip op. at 9. Your fault, Ballingers; the city has done nothing: "the State has not deprived the person of a constitutionally protected interest." Slip op. at 9 (quoting L.L. Nelson Enters., Inc. v. County of St. Louis, 673 F.3d 199, 806 (98th Cir. 2012)).

You can check out [of the rental market] any time you like, but you can never leave.

Here, the Ballingers voluntarily chose to lease their property and to “evict” under the Ordinance—conduct that required them to pay the relocation fee, which they would not be compelled to pay if they continued to rent their property. See Yee, 503 U.S. at 527. “A different case would be presented were the statute, on its face or as applied, to compel a landowner over objection to rent his property or to refrain in perpetuity from terminating a tenancy.” Id. at 528. Here, the Ordinance “is a regulation of [the Ballingers’] use of their property, and thus does not amount to a per se taking.” Id. at 532.

Slip op. at 9-10. In short, this wasn't the government grabbing specific funds (or raisins). No, this was the city merely imposing a monetary obligation on one party when something happens, which also just "happens to be related to a real property interest." Slip op. at 10.

And now for the small silver linings. The panel held that "we hold, as other circuits have, that in certain circumstances not argued here, money can be the subject of a taking." Slip op. at 13. To make that argument, the court concluded, the plaintiff must also identify a "specific fund of money." Remember that, complaint drafters.

The court seemed to find a difference between the situation in Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595 (2013) (where the Supreme Court held that the demand for money in return for development permissions on a specific piece of property was a taking), and the Ballingers' case:

Here, the Ballingers’ rely on Koontz to argue that the relocation fee is an unconstitutional taking. But Koontz cuts against them. The exaction in Koontz operated on “the direct link between the government’s demand and a specific parcel of real property,” 570 U.S. at 614. The Ballingers claim that a direct link exists between the government’s demand for their money and their real property. We cannot deny that the relocation fee here is linked to real property, but no more so than property and estate taxes. Rather than a mere obligation to pay in relation to the use of one’s property, the government in Koontz demanded and specifically identified that it wanted Koontz’s payment of money in exchange for granting a benefit to either Koontz’s parcel of land or another identified parcel of land. Id. at 613 (“[U]nlike Eastern Enterprises, the monetary obligation burdened petitioner’s ownership of a specific parcel of land.”). So the demand for payment in Koontz was “functionally equivalent to other types of land use exactions” and amounted to a taking of an interest in the real property itself. Id. at 612–13 (“In that sense, this case bears resemblance to our cases holding that the government must pay just compensation when it takes a lien—a right to receive money that is secured by a particular piece of property.”).

Instead, the relocation fee required by the Ordinance is a monetary obligation triggered by a property owner’s actions with respect to the use of their property, not a burden on the property owner’s interest in the property. It is more akin to the obligations to pay money that other circuits have held were not takings[.]

Slip op. at 15-16.

Based on the same logical foundation, the panel concluded that the relocation fee requirement was not an unconstitutional condition. If the Ballingers were not entitled to just compensation for a taking for the requirement to pay the relocation fee, then the city wasn't acting unconstitutionally when it required them to pay the fee as a condition of renting their property. Slip op. at 17.

Nor does the ordinance does not require property owners to apply for some kind of city permit. Slip op. at 21 ("Here, the Ordinance does not conditionally grant or regulate the grant of a government benefit, such as a permit, and therefore does not fall under the unconstitutional-conditions umbrella."). In short, the Ballingers had no rights that the city coerced them into surrendering (remember, this is all the Balllingers' fault for choosing to rent their home). To us, that seems to overlook the fact that the city has conditioned participation in the rental market on property owners either surrendering their dough, or forever be locked into the rental market. Yeah, that's not a permit for some government "benefit" as the panel characterized it. But it seems much worse - the requirement burdens a fundamental right and a core use of private property.

But despite the bad news, there was, like above, a small silver lining in the panel's conclusion. Check out pages 19 and onward for the court's rejection of the legislative/adjudicative distinction in exactions analysis.

Here, the Ballingers claim that the City’s Ordinance (a legislatively imposed condition) is an unconstitutional exaction. The district court rejected their exaction claim as based on a generally applicable legislative condition when a properly pled exaction claim can only arise from administrative, not legislative, conditions.

In light of Pakdel, 141 S. Ct. at 2229 n.1, and Cedar Point Nursery, 141 S. Ct. at 2072, 2079, we agree with the Ballingers that “[w]hat matters for purposes of Nollan and Dolan is not who imposes an exaction, but what the exaction does,” and the fact “[t]hat the payment requirement comes from a [c]ity ordinance is irrelevant.”

Slip op. at 20-21. Yes, the legislative/adjudicative distinction is done in the Ninth Circuit.

Finally, the court rejected the owners' third claim: that the tenants seized the Ballinger property without a warrant. The court rejected the claim because there wasn't sufficient "state action" and the tenants were private actors.

So there it is. No taking, no unconstitutional condition or exaction. But a confirmation that money can be "private property" as that term is used in the Fifth Amendment, and (finally) a recognition that legislative exactions -- when they qualify as "exactions" -- are subject to the same Nollan/Dolan/Koontz analysis as are administrative and adjudicative exactions.

Stay tuned.

Ballinger v. City of Oakland, No. 19-16550 (9th Cir. Feb. 2, 2022)

 

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

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

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

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

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

Check out these titles:

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

And this is only a sampling.

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

New Article: "Takings, PASH, and the Changing Coastal Environment," 43 U. Haw. L. Rev. 525 (2021)

Back in February, we were honored to be part of the University of Hawaii Law Review's symposium "25 Years of PASH," a retrospective of one of the Hawaii Supreme Court's most famous (or infamous) decisions, Pub. Access Shoreline Haw. v. Haw. Cnty. Plan. Comm’n, 79 Haw. 425, 903 P.2d 1246 (1993), cert. denied sub nom., Nansay Haw. v. Pub. Access Shoreline Haw., 517 U.S. 1163 (1996) (PASH).

At the conference, we spoke on the panel about "PASH and the Changing Coastal Environment" (see video here at the 2:02:25 mark if you want to watch our panel's summations). The Law Review has now published the symposium, and here's our contribution, Takings PASH and the Changing Coastal Environment, 43 U. Haw. L. Rev. 525 (2021).

For those of you not totally tuned in, in the PASH case the Hawaii Supreme Court concluded that subject to certain qualifications, the Hawaii Constitution allows native Hawaiians to exercise traditional practices, even on private property, and that "[o]ur examination of the relevant legal developments in Hawaiian history leads us to the conclusion that the western concept of exclusivity is not universally applicable in Hawaii." Yes, the right to exclude is not "universally applicable" in the 808. Let that one sink in. (The U.S. Supreme Court denied the takings cert petition.)

Here's our piece's Introduction:

The topic of this portion of the Symposium is “Takings and the Changing Coastal Environment” and in this comment I focus on the “takings” part of that title, as well as offer some thoughts on our guiding subject, the Hawai‘i Supreme Court’s decision from a quarter-century ago in PASH, which most famously noted “that the western concept of exclusivity is not universally applicable in Hawaii.” How might this statement be considered today through the lens of property law and property rights, especially if we account for the changes in the U.S. Supreme Court’s approach to takings in the time since PASH was decided? And what implications does PASH have, if any, for property rights in the coastal zone?

This comment is in three parts. Section I summarizes the PASH opinion, and concludes that the jurisdictional questions presented in the case should have resolved the case, and the court should have avoided the takings questions, and the court reached out to resolve an issue it need not have. Next, Sections II, II, and IV offer up my three main criticisms of PASH, the first on the court’s seemingly incomplete view of how Hawai‘i property law treated the right to exclude, the second on whether defining “property” for purposes of federal takings analysis is only a matter of state law, and the third on separation of powers. Finally, Section V concludes with some thoughts about how courts should consider property rights in a changing coastal environment in light of these criticisms of PASH.

Check out the symposium issue, which has similar articles from a variety of perspectives.

Takings, PASH, and the Changing Coastal Environment, 43 U Haw L Rev 525 (2021)

City's Tree-Preservation-And-Mitigation Scheme Is A Dolan Taking

Check out the U.S. Court of Appeals' opinion in F.P. Development, LLC v. Charter Twp. of Canton, No. 20-1147 (Oct. 13, 2021), in which the court affirmed the district court's grant of summary judgment to the property owner on its unconstitutional conditions takings claim. 

Short story: Canton's tree ordinance prohibits property owners from removing trees on their land without Canton's permission, and also requires owners to either replace any trees removed, or pay between $300 - $450 into the tree fund.

In the course of developing its property, the owner cleared a county drainage ditch of trees and debris after the county refused to do so. But it didn't get a permit, "someone" dropped dime, and Canton issued a NOV.

The owner sued, alleging all theories of takings: (1) a per se Horne-type taking, (2) a regulatory Penn Central taking, and (3) an unconstitutional conditions Nollan/Dolan taking. After going into the historical background of trees (see slip op. at 7-8 if that floats your boat), and acknowledging the parties' agreement that the ordinance did not offend Nollan's "essential nexus" test, the court concluded that the exaction (plant three trees for every "landmark" tree removed and one tree for every plain-old boring unlandmark tree removed) lacked Dolan rough proportionality. Or, more technically, that Canton had not met its burden of showing that the ordinance was roughly proportional to any actions the owner took.

Canton has pointed to nothing indicating, for example, that F.P.’s tree removal effects a certain level of environmental degradation on the surrounding area. Nor does it demonstrate whether it considered that F.P.’s clearing of the clogged ditch on its property or its removal of dead trees may have improved the surrounding environment. The only evidence on that point suggests that even if F.P. offset its tree removal in a manner not contemplated by the township, Canton would still demand its pre-set mitigation. At bottom, Canton’s support fails to get it over the bar set by Nollan and Dolan. See id. at 395–96 (noting that “the city must make some effort to quantify its findings in support” of its exactions); see also Goss v. City of Little Rock, 151 F.3d 861, 863 (8th Cir. 1998) (holding that local traffic mitigation requirements did not satisfy Dolan’s rough-proportionality test because they were based on pre-set assumptions, rather than an individualized impact assessment).

That a representative from Canton went to F.P.’s property to count and categorize the trees F.P. cut down does not alter our conclusion. And the “individualized assessment” that Canton points to in the ordinance relates to the initial review of a permit application, not to the proportionality of the mitigation requirements. See Canton Code of Ordinances Art. § 5A.05(F). According to Canton’s own representative, F.P.’s removal of regulated trees triggers the mitigation requirements, regardless of the specific impact caused by their removal. Canton has not made the necessary individualized determination here.

Slip op. at 10-11.

F.P. Development, LLC v. Charter Twp. of Canton, No. 20-1447 (6th Cir. Oct. 13, 2021)

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

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

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

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

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

Details on the agenda and the stellar faculty here.

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

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

XXXX

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

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

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

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

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

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

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

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

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

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

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

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

Join us in Scottsdale in January!

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

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

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

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

Oh, have we got your attention now?

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

...

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

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

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

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

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

More here, including application information and deadline.

New Cert Petition: Building Permit That Comes With Requirement To Preserve Plants Is An "Exaction"

Check out this recently-filed cert petition, which asks the Court to review a California Court of Appeal decision about exactions.

It's a somewhat odd situation: the county issued a building permit, but conditioned it (yes, the county tried to put a condition in a ministerial building permit!) on the property owners recording a deed restriction that they will forever preserve the natural vegetation on a portion of the lot. "Visually important ridgelines" and all that.

Land use types will immediately understand our puzzlement. Building permits are the classic ministerial ("shall issue") development permits. Meaning that the issuing official has no discretion to deny a permit if the applicant meets the straightforward requirements of the building code, and certainly doesn't have the authority to grant a permit with conditions. That's way outside the building department's authority, and the applicant should be able to get a court to issue a writ of mandamus.

Well, that's what happened, and eventually, the court agreed, and invalidated the condition and struck it. Score one for the owner. The owner's lawsuit also included a takings claim, and the court concluded that the condition violated the county's own ordinances, and that the county's attempt to impose a conservation easement in exchange for a permit was an exaction that didn't meet the Nollan/Dolan nexus and proportionality requirements. Things were really looking up!

Not quite. The court also held that the owners were not owed just compensation because the five years they were in limbo due to the county's illegal actions were just plain old "normal planning delay," and thus there had been no taking. (If this reminds you of the infamous Landgate case you are not alone.)

The owners appealed the question of whether this was planning delay. If the court of appeals agreed and concluded this was a taking and reversed, there was no barrier to the trial court determining compensation on remand. But the court of appeals blew off the issue presented on appeal, and instead held that this was not an "exaction" (an issue the county had not appealed).

Relying on the California Supreme Court's CBIA case, the court of appeal concluded the county's demand was not an exaction subject to Nollan/Dolan because it didn't require the owners to covey some property interest to the county. You might justifiably ask whether the fact that it conditioned the BP on the owners recording a deed restriction kinda qualifies as conveyance of an interest, because your flashbacks to Property I in law school tell you that these things "run with the land" and the like - but what do you know?

Denial of discretionary review by the California Supremes, so the cert petition followed. The petition doesn't suggest there's some unresolved lower court split, but that this one is so darned obvious, the Court should GVR it. It's a deed restriction. The condition is tantamount to a conservation easement. One might even say that being required to maintain trees and plants on your land (even if you own the trees and plants) goes against some very basic notions of what it means to own private property.

The Question Presented:

Does an exaction occur when a County, in violation of its own ordinances, refuses to issue a building permit it previously approved for a single-family residence unless the applicants consent to record an ad hoc deed restriction on their lot which would conserve all trees and vegetation in a specified area?

We'll follow along. Here's the e-docket if you want to do so on the Court's site.

Petition for Writ of Certiorari, Erickson v. County of Nevada, No. 21-112 (July 22, 2021)

Join Us For The 39th Annual ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Jan 26-29, 2022 (Scottsdale, AZ)

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

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

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

Join us in Scottsdale in January!

Cedar Point Part V: Help Us Help You

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

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

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

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

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

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

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

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

The Property Guy

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

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

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

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

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

Help Us Help You

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

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

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

What drives our conclusion?

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

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

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

More than the "Just Compensation" Clause

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

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

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

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

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

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

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

Cedar Point Part IV: The Other Opinions

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

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

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

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

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

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

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

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

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

Concurring op. at 2.

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

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

The Three-Justice Dissent: The Appropriations Clause

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

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

They first characterized the Takings Clause as the Appropriations Clause:

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

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

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

The Regulatory "Hook"

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

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

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

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

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

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

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

The dissent defended its "characterization" in several ways:

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

Saving Loretto By Blowing Up Loretto

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

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

Pruneyard Distinguished

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

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

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

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

Who Keeps The Gates?

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

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

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

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

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

Links From Today's ABA RPTE Session

Our thanks to our friends and colleagues at the ABA Section of Real Property, Probate & Trust Section's Land Use and Environmental Group for inviting us to a discussion of the latest and greatest decisions of interest.

We only had an hour together, so naturally could not cover everything of interest (indeed, we reserved a big discussion of the biggest item, the Supreme Court's decision in Cedar Point, assuming that the Group will schedule a full session on that decision alone). So here is our curated list of what we think are the most interesting recent decisions in areas of interest to the Group:

• Land use and short-term rentals: Euclid Lives! Mass SJC: "Short-Term" Rental Is Not A Permissible Primary Use In A Residential Zone Because Not Of "Residential Character"
• Environmental standing: Iowa: No Standing To Ask Court To Rule That Public Trust Doctrine Requires Legislation To Regulate Farmers
• Environmental standing, part 2: Hawaii Supreme Court: Anyone Claiming That An Affordable Housing Project Might Impact Their Property Interests In A "Clean And Healthful Environment" Has Standing To Object
• Exactions (sorry we didn't get to this one in the session, but here it is anyway because it is a good case to review): Ordinance Requiring Developer Pay For "All Necessary Road Capacity Improvements" Violates Nollan/Dolan
• Public use in eminent domain: So Close: SCOTUS Declines To Revisit Kelo (For Now) (a taking to remedy potential future blight is a "public use")
• Public use in eminent domain, part 2: Ill App (unpub, unfortunately) Strikes Down Taking For Road To Be Owned By The Public
• Just compensation in eminent domain: Louisiana SCT: No Statutory Attorneys' Fees For Pipeline Taking - But LA Constitution's Just Comp Clause Requires Owners Recover "The Full Extent" Of Their Loss (Which Includes Fees)
• Regulatory takings, emergencies, and necessity: Fourth Circuit: No Taking When Aerial Pesticide Spray Killed Bees ... But Not Why You Think

Thanks again, colleagues.

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

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

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

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

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

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

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

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

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

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

Takings vs. Torts

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

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

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

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

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

Background Principles

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

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

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

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

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

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

Exacted Access

Finally, the Cedar Point opinion ventured into exactions territory:

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

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

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

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

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

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

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

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

Wrapping Up

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

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

Slip op. at 20.

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

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

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

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

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

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

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

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

Slip op. at 3, n.*.

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

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

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

Looks like the entire Supreme Court agreed:

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

. . .

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

Slip op. at 7.

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

Links From Today's Oregon Eminent Domain Conference

Earlier today, I presented the "National Takings Update" at The Seminar Group's Eminent Domain in Oregon conference. It was good to see old friends and colleagues again, even though on-screen and not in-person. Hopefully next time we'll all be able to join together.

Here are the links to the cases we discussed that are not in your written materials (mostly because they were issued after I submitted my materials):

• Ill App (unpub, unfortunately) Strikes Down Taking For Road To Be Owned By The Public
• California Trial Court: No Greater Public Interest In Town Seizing Private Water Company To Operate It Itself (Generic "Vision Statements" Don't Count)
• Listen (Or Read) As SCOTUS Hears Arguments In A (Sorta) Eminent Domain Case
• What If A Court Invalidates A Taking, But They've Already Taken It?
• How "Res Judicata" Is A Failed Condemnation?
• Sixth Circuit Says No To Res Judicata As The Latest Williamson County Workaround
• New Law Review Article (Ours) - "Evaluating Emergency Takings: Flattening the Economic Curve," 29 Wm. & Mary Bill of Rights J. 1145 (2021)
• Louisiana SCT: No Statutory Attorneys' Fees For Pipeline Taking - But LA Constitution's Just Comp Clause Requires Owners Recover "The Full Extent" Of Their Loss (Which Includes Fees)

Until next time!

Ordinance Requiring Developer Pay For "All Necessary Road Capacity Improvements" Violates Nollan/Dolan

We've been meaning to post up the California Court of Appeal's (now published) opinion in Alliance for Responsible Planning v. Taylor, No. C085712 (May 4, 2021) for a bit, and while we were distracted by lawyer work last week, our friend and colleague Bryan Wenter beat us to it with "County’s Initiative-Enacted General Plan Traffic Mitigation Policies Are Unconstitutional Exactions."

So rather than do our own summary, we're just going to recommend you read his analysis. Some high points of that and the opinion:

• The court called the Nollan/Dolan/Koontz doctrine the "unconstitutional conditions doctrine." Slip op. at 6. We like that. In our view, N/D/K really isn't a takings doctrine so much as it is one that says the government can't force you to choose among your rights (in these cases, one of those rights being your right to just compensation).
• The N/D/K problem was that the ordinance required the completion of "all necessary road capacity improvements" as a condition of development approval, and to the court this meant the permit applicant pay for everything, not just those improvements brought about by the proposed project. As Bryan writes, "The court reasoned that a developer seeking approval of a single project is solely responsible to pay for construction of all road improvements necessary to bring the traffic volume on the roads affected by the project to a specified level. This would require developers to pay for not only the their own project’s incremental impact to traffic congestion, but also be responsible to pay for improvements that arise from the cumulative effect of other projects, and in some instances to pay for projected future increases in traffic."
• The court also rejected the city's attempt to paint the measure as a land use regulation, and get it from N/D/K-land into CBIA v. San Jose territory. As Bryan writes, "the Third District Court of Appeal explained that under Measure E a developer must give up a property interest as a condition of approval: the developer must complete or construct road improvements."
• Alliance for Responsible Planning appears to be the first time a court has invalidated a California ballot initiative as an unconstitutional exaction under Nollan and Dolan. It also appears to be the first time a traffic mitigation requirement has been invalidated as an unconstitutional exaction.  And while the case does not shed much helpful light on the thinly reasoned California Building Industry Assn. v. City of San Jose case, it does make clear that mitigation measures requiring construction of improvements implicates constitutionally-protected property interests."

Check both the opinion and Bryan's analysis out. Worth it.

Alliance for Responsible Planning v. Taylor, No. C085712 (Cal. Ct. App. May 4, 2021)

Mark Your Calendars: 2021 Brigham-Kanner Property Rights Conference, Williamsburg, Virginia, Sept 30-Oct 1 (in-person)

Mark your calendars for September 30 - October 1, 2021, and join us at the William and Mary Law School in Williamsburg, Virginia for the 18th Annual Brigham-Kanner Property Rights Conference. It's planned to be in-person, so when we mean "join us" we really mean join us.

This year the Conference will recognize the lifetime work of Professor Vicki Been (NYU Law) with the Brigham--Kanner Property Rights Prize. As noted in the Law School's press release:

The Brigham-Kanner Property Rights Prize is named in honor of the lifetime contributions to property rights of Toby Prince Brigham, founding partner of Brigham Moore, LLP, and Gideon Kanner, professor of law emeritus at Loyola Law School in Los Angeles. Brigham died earlier this month in Miami. A true legend in the law, he was esteemed by colleagues for the invaluable counsel, knowledge and skills he possessed and shared so generously. The prize is presented annually to a scholar, practitioner or jurist whose work affirms the fundamental importance of property rights.

Been is the Judge Edward Weinfeld Professor of Law at NYU School of Law, an Affiliated Professor of Public Policy of the NYU Wagner Graduate School of Public Service, and Faculty Director of NYU’s Furman Center for Real Estate and Urban Policy. Her scholarship focuses on the interplay of land use, urban policy and housing. She is currently on leave from NYU, serving as Deputy Mayor for Housing and Economic Development for the City of New York. 

Among other topics, Been has examined inclusionary zoning, historic preservation, affordable housing, gentrification, mortgage foreclosure, racial and economic integration, community benefit agreements, and the effects of supportive housing developments on neighbors. She often uses the City of New York as her laboratory.

Been also writes about the Fifth Amendment prohibition against the taking of property without just compensation, environmental justice, and international protections for property owners. She is a co-author of a leading land use casebook, Land Use Controls.

Save the date, plan on joining us (Williamsburg is great in the fall), and stay tuned for the full agenda and speaker list, as well as how to register.