inversecondemnation.com

The Eminent Domain Podcast Is Back!

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

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

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

Are you as excited about this as we are?

They Say It's Your Birthday, Well It's Our Birthday Too, Yeah! Entering Our Eighteenth Year

Every year at this time, it seems, we realize once again that as you get older, you overlook birthdays. Time speeds up, or maybe slows down. Very Proustian. Thus, it occurred to us only yesterday that that this blog's "birthday" was looming and we almost let it slip by without notice.

It hardly seems like eighteen years ago tomorrow that we posted here for the first time.

In law blog years, that's quite a while. Thanks to you, our readers and contributors, we're still here, and still going pretty strong over 4,700 posts and nearly two decades later. We can't post every day, but we can try.

Because doing this in a vacuum would not be worthwhile, we'd like to recognize those who send us items, who make comments, who give us feedback, who gently prod with suggestions, and who simply read and subscribe. You guys make the efforts that go into this thing all worth it. You are why we keep it going: this blog has allowed us to connect with many of you over the years all over the country and even internationally, an opportunity we'd otherwise probably not have had. Many of you have become colleagues, and many of you have become friends.

And though there's a lot of crossover with the above, we'd also like to hail our fellow law bloggers who, like us, make the time to share thoughts about the legal issues of the day. Although you're not quite "Real Men [and Women] of Genius," today we salute you, Mr. and Ms. Law Blog Blogging Bloggers:

• Tony Della Pelle's NJ Condemnation Law
• Brad Kuhn and Nossaman's California Eminent Domain Law Report
• Tred Eyerly's Insurance Law Hawaii
• Infrastructure Junkies Podcast
• Ilya Somin at Volokh Conspiracy
• Patty Salkin's Law of the Land
• Ben Lowenthal's Hawaii Legal News
• Abbott & Kindermann's Land Use Law Blog
• Dan Dalton's RLUIPA Blog

There are others, and if we've omitted any who should be acknowledged, we apologize and plead a failing memory (see above). Besides, you know who you are. Let's keep it going.

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

This would not be authorized.

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

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

• Oregon
• Iowa
• North Dakota
• California

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

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

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

The surveys SCS wanted to do involve these activities:

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

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

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

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

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

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

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

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

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

Here's the holding:

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

Slip op. at 26.

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

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

Here's the holding:

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

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

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

Betty Jean Strom Trust v. SCS Carbon Transport, LLC, No. 30317 (S.D. Aug. 21, 2024)

New Cert Petition: When State Law Bars Owner From Challenging A Taking, Can Federal Court Abstain?

Here's the latest takings cert petition. This one seeks review of the Seventh Circuit's affirming the district court's sua sponte abstaining from considering a property owner's challenge to a Wisconsin municipality's exercise of eminent domain.

The court concluded that federal courts could -- but shouldn't -- consider the owner's public use challenge because there were ongoing parallel state proceedings (this this case, an eminent domain case in a Wisconsin court). That alone doesn't seem terribly controversial.

But as the petition points out, there was not actually a "parallel" state court proceeding here, because Wisconsin law apparently doesn't permit an owner to challenge public use in the proceeding the Village filed. As the Petition puts it:

The Seventh Circuit Court of Appeals’ particularly broad approach to the Colorado River doctrine stands out among the circuits. In the case at hand, the court of appeals expanded the doctrine even further by effectively overruling the requirement of parallel proceedings. It was clear legally that the state and federal proceedings were not parallel, yet the district court still dismissed the case. In reviewing the district court’s decision, the Seventh Circuit admitted that the two cases presented different issues and that regardless of how the state case was decided, the public use claim would go unanswered, however, the Seventh Circuit still concluded that the two cases were “parallel.”

Pet. at 7.

Ah, we get it: parallel doesn't mean, you know, exactly parallel.

What happened was that the Village took one position on whether the taking was supported by a public use or purpose, and the time for challenging that position lapsed under Wisconsin procedures. You understand that often, property owners are required by condemnation procedures to immediately challenge public use or necessity, and are subject to very short statutes of repose after which you lose the claim. Well here, that apparently occurred...but later and just before the valuation trial was set to commence, the Village said or did something that revealed its hand: the real reason for the taking was not a public use or benefit.

Too late to raise the new issue in state court, the owners filed a section 1983 claim in federal court. The district court on its own abstained, and as we noted above, the Seventh Circuit affirmed, even though it expressly acknowledged that the case didn't squarely fit into the Colorado River abstention doctrine (or any other). This was just a case the federal court shouldn't decide:

That said, the federal and state litigation present different issues. In state court, Antosh and Lashley spent two years contesting the amount of compensation owed for the taking. In federal court, they urge that the taking has been illegitimate all along, because the Village seized their property for a private use under the guise of a public one. So the two suits are not perfectly symmetrical: regardless of how the dust settles in state court, their public use takings claim in federal court will go unanswered.

This lopsidedness, however, is not fatal to a finding that the actions are parallel.

Here is the Question Presented:

Whether the court of appeals erred in affirming the district court, when the Village of Mount Pleasant admitted that it had used eminent domain to take private property for a private purpose (the Foxconn Project), and the district court applied the Colorado River doctrine sua sponte even though the state proceedings were not parallel because the state proceedings were statutorily barred from addressing the Petitioners’ Fifth Amendment public-use claim as well as other constitutional issues.

Two comments.

First, after the Supreme Court decided Knick and re-opened the federal courthouse doors that Williamson County had wrongfully slammed closed for three decades, we wrote that we didn't think that was the end of the story, because government wasn't going to go quietly into that good night and, you know, just sit there and allow property owners to press their claims in federal court.

We also thought that federal courts were not going to warmly embrace their role as civil rights forums, but would maintain the hoary trope that this land usey stuff was beneath their dignity (after all, we're not super zoning boards of appeals, are we?).

This petition is the latest chapter. We filed one in a roughly similar case not too long ago. Maybe this latest one will get more traction.

Second, we take a bit of issue with the way the lower courts characterized the property owners' approach, effectively blaming the owners for not acting sooner (how, exactly could they have challenged public use when the Village said its purpose was "A," and only after the deadline to challenge lapsed said it was "B"?), and subtly and not-so-subtly chastising the owners for doing this at the last minute.

To us, this goes back to Justice Thomas and his thought that if a federal court has jurisdiction, it darn well has the obligation to exercise it. The hands-off approach the federal court took here does not easily fit into any of the existing (and limited, as we understand them) doctrines of abstention, when concerns about comity, respect, and "Our Federalism" counsel a federal court to hold off on its Article III duties for now. Also, are not property owners who are scrapping to hold on to their property against the sovereign's nearly unassailable power entitled to do anything and everything they can to make it happen? We'd think so, even thought courts and condemnors call this bad faith and being greedy. Why should an owner have to "respect" the state court, when she is fighting for her property, and is there an obligation to favor judicial efficiency over her fundamental rights? We find the federal courts' framing of the narrative here to be quite offensive.

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

Petition for a Writ of Certiorari, Antosh v. Vill. of Mount Pleasant, No. 24-186 (U.S. Aug. 21, 2024)

PA: No Funny Business - It Isn't A Public Purpose For Railroad To Take Property To Benefit Single Customer

It is worth your time to check out the Pennsylvania Supreme Court (Middle District)'s decision in Wolfe v. Reading Blue Mountain & Northern RR Co. No. J-10A-2024 (Aug. 20, 2024).

The court invalidated an exercise of eminent domain by a railroad, concluding the taking was not for a public purpose because it was intended to keep open a road used to access a single business.

The conflict arose after the property owners exercised their right to close off the railroad's two easements on which rail siding track and a road crossing had been located. The owners' predecessor-in-title had obtained the property from the railroad's precedessor, and the grant contained express reservations of those two easements. The grant also contained a termination provision. which required the railroad to remove the siding within 90 days of the owners' demand.

The railroad had stopped using the siding and the road crossing in the 1980s or 1990s, and the siding was buried or destroyed. But flash forward two decades, and in 2021 the railroad sought to re-establish rail service over the road crossing. The PUC said ok, but when the owners caught wind of it, they exercised their rights under the termination provision, and instructed the railroad to remove the siding. When the railroad said no, the owners went to court and obtained an injunction prohibiting the railroad from entering the property.

Not to be denied, the railroad started eminent domain proceedings to take the property. Here's the public use/purpose the railroad stated in the resolution of taking:

“to promote the health, safety and general welfare of the Commonwealth of Pennsylvania by serving the public need to have goods transported via rail[,]” and that the condemnation would “further that purpose by connecting sidetrack to the crossing, as approved by the [PUC], pursuant to RBMN’s project plan to provide rail services to the business located on Route 61, Pottsville Pike, Reading, Pennsylvania as permitted in 15 Pa.C.S.A. §1511, 26 Pa.C.S.A. §204(b)(2), including (b)(2)(i) and (b)(2)(ii).”

Slip op. at 3.

As the Supreme Court noted, ""[t]he 'business' [the railroad] referred to in the declaration was Russell Standard, an asphalt company which is located to the immediate south of the Property." Id. The owners objected and the trial court took evidence. The owner testified that he thought the railroad's only purpose was to keep access for the asphalt company, and that access should be through the asphalt company's land and not his. The roofing business which leased the owners' property also testified that the "rail line would run though the driveway it uses to transport its vehicles and equipment." Slip op. at 4. Because of the disruption to its business, the roofing company renewed its lease only for a year.

The railroad introduced competing testimony, that there were not alternative routes that would work for the asphalt company, or those routes would require relocation of utility lines. But in the end, the trial court sustained the owners' objections on the grounds that the taking was "effectuated solely to benefit a single private commercial enterprise, Russell Standard[.]" Slip op. at 6. Relying on a 2014 Pennsylvania Supreme Court case, it held the taking would not benefit the public "in any way" because the only goods moved on the rail line would be Russell Standard's:

According to the court, RBMN’s refusal to consider placing the spurs on Russell Standard’s property indicated RBMN was “protecting Russell Standard’s interest not to clutter its property with tracks where the rail cars could sit indefinitely until the products are needed. Instead, it intends to clutter [the] Wolfes’ property.” Id. at 13. The court concluded “[t]o condemn land owned by the Wolfes, so Russell Standard can commercially profit from the land to the Wolfes’ detriment serves a purely private, and thus, unconstitutional interest.” Id. at 12. Alternatively, the court found even assuming arguendo that a railroad can “condemn any property it wishes,” RBMN’s condemnation is excessive. Id.

Slip op. at 7 (footnote omitted).

On appeal, the Commonwealth Court reversed because public use and benefit means something that will "contribute to the public welfare" in some way, even if "some selfish interest may have inspired the plan." Slip op. at 7-8. And this qualified. The court relied on cases where takings to extend rail service and to benefit a large retailer satisfied the public use/purpose requirement.

The unanimous Supreme Court reinstated the trial court's invalidation of the taking. The court first noted that incidental public benefits are not sufficient, even where the beneficiary of the taking has a massive influence on consumers and the public (the court noted an earlier case involving a railway transporting coal, and the retailer Sears, by way of examples). Those are different cases, because times have changed: Pennsylvania's economy and transportation infrastructure are no longer rail-heavy, and Sears...well, you know. Slip op. at 19 ("Unsurprisingly, then, the legal analysis in both opinions was undergirded by the belief that construction and maintenance of railroad branches and spurs automatically served a 'public use' because of the infrastructure it created, allowing for unparalleled expansion into areas undeveloped at the time, and often presenting the only available method to transport goods to citizens of the Commonwealth."). 

These days, under the Lands of Stone decision, the public must be the "primary and paramount beneficiary" of the exercise of eminent domain. The lower appellate court "acknowledged this standard in its opinion but apparently did not apply it' (ouch). Slip op. at 21. First, the railroad didn't have to cross the owners' land in order to connect Russell Standard. Second, the evidence showed the taking was intended mostly to save Russell Standard time and money. Slip op. at 22.

The Wolfes introduced evidence that the only beneficiary of the taking would be a private business, Russell Standard. Mr. Wolfe’s unrefuted testimony also established Russell Standard already uses trucks and private haulers to transport the materials it seeks to import via rail, and thus, does not depend upon rail service to create or distribute its goods. See N.T. Preliminary Objections Hearing, 6/2/22 at 37. In addition, the Wolfes’ expert opined the RBMN expansion would likely render the existing business on the Property non-compliant with the municipality’s zoning requirements and therefore unable to continue operations. Relying on this evidence, the trial court found RBMN’s taking “was effectuated solely to benefit a single private commercial enterprise, Russell Standard[.]” Trial Court 1925(a) Opinion, 7/27/22 at 12. In response, RBMN did not introduce any evidence of any specific benefit to the public, relying instead on the inherent benefits purportedly created by railroads qua railroads, generally. Indeed, RBMN simply claimed the expansion would “serv[e] the public need to have goods transported via rail.” Amended Declaration of Taking, 4/27/22 ¶6.

Slip op. at 22-23.

So burdens of production and proof actually work!

This approach seems like the right one to us. A fact-centric, not "rational basis" deferential analysis, based on the evidence. And not simply what the condemnor says is its purpose. The question of public use or purpose isn't the condemnation stating it and then the court simply deferring (well-nigh conclusive, as Berman put it), but the court actually asking why and for whom.

Two Justices concurred separately, and we also suggest you read those as well.  

Wolfe v. Reading Blue Mountain & Northern RR Co., No. J-10A-2024 (Pa. Aug. 20, 2024)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

New Cert Petition: Can An Owner Whose Property Has Been Taken Sue A State Directly Under The Fifth Amendment?

Check this out, a recently-filed cert petition asking whether, in order to sue for compensation for a taking, the government must first affirmatively provide a cause of action (an issue recently left unanswered by the U.S. Supreme Court). That's an issue we've been following closely (our outfit recently filed this cert petition also). 

This one is a takings challenge to California's unclaimed property scheme and the State's immunity, vel non, to being sued for just compensation.

Here are the Questions Presented:

The State of California, pursuant to its unclaimed property laws, regularly seizes possession of owners’ unclaimed personal property, holds it in custody and trust for the owners, uses it for the state’s purposes to pay its obligations, without paying the owners of that unclaimed property any compensation for its use of the owners’ property pursuant to California Code of Civil Procedure §§1540(c) and 1562. That is an unconstitutional taking without just compensation in violation of the Fifth Amendment’s Takings Clause made applicable to the states pursuant to the Fourteenth Amendment.

The issues in this case are:

1: May a property owner whose property is taken and used by the state without compensation, sue the state directly for just compensation under the Fifth Amendment’s Takings Clause where the state has not affirmatively provided the property owner with a cause of action and in fact, has affirmatively precluded any cause of action to recover compensation for its taking and use of the owner’s property?

2: Does Eleventh Amendment sovereign immunity bar a property owner’s self-executing Fifth Amendment right to just compensation for the state’s taking of his/ her property?

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

Petition for a Writ of Certiorari, Cole-Kelly v. California, No. 24-158 (U.S. Aug. 12, 2024)

Lawprof Somin: "Federal Appellate Court Rules in Favor of Takings Lawsuit Against the CDC's Covid-Era Eviction Moratorium"

Be sure to read the entirety of Lawprof Ilya Somin's recent post on Volokh, "Federal Appellate Court Rules in Favor of Takings Lawsuit Against the CDC's Covid-Era Eviction Moratorium."

There, he analyzes the Federal Circuit's recent 2-1 opinion in Darby Dev. Co., Inc. v. United States, No. 22-1929 (Aug. 7, 2024) (we wrote up the case here: "Deepening A Lower Court Split, Fed Cir (2-1) Reinstates CDC Co-19 Eviction Moratorium Temporary Takings Claim").

Professor Somin does a better job that we did offering his thoughts on the "authorized" issue, concluding:

To me, the decisive factor should be that the Takings Clause nowhere says that compensation is only required for legal government actions or for those specifically authorized by statute. Rather, the Clause imposes a general rule that compensation must be paid whenever the government takes private property for "public use." That, of course, can happen even without proper legislative authorization. I can understand if takings liability is nonetheless denied when rogue low-level officials seize property without any plausible justification. But that isn't what happened here.

He also dives into the question of whether leasing property to a tenant is an "invitation" to occupy the property that pretty much wipes out any claim that the government restricting the ability to recover the property upon expiration or breach of the lease is a physical taking:

To put it a different way, any "invitation" expires at the point where the property owner has a legal right to evict the tenant. At that point, there is no voluntary landlord-tenant relationship anymore; and if the government forces the owner to keep on housing the tenant on his land, we have a mandated physical occupation of property, which counts as a per se taking.

Well worth reading. Check it out.

Michigan: "few rights and legal principles have greater legal, historical, and constitutional pedigrees than the protection against uncompensated takings"

Here's the latest in the solved-but-not-quite-solved issue of whether the government can keep the surplus which remains after a tax-foreclosure sale (see Tyler v. Hennepin County), the Michigan Supreme Court's opinion in Schafer v. Kent County, No. 164975 (July 29, 2024), where the court concluded that its earlier decision in Rafaeli v. Oakland County is applicable not merely going forward (prospectively) but applies to those cases which are not final and closed out.

There's a lot there -- especially on the nuances of whether judicial decisions on constitutional rights apply only prospectively, or govern cases instituted in the past -- but we are focused on the opinion's analysis of property rights and takings as matters of history and tradition. We're not going to comment here because this case is one of ours, argued by Christina Martin and Pacific Legal Foundation's Home Equity Theft team. That said, here's the holding:

Respecting traditional standards of procedure and the interest of finality, Rafaeli is the rule of the law in Michigan that governs constitutional takings; it applies to all those who have been denied the surplus proceeds that remain after their property has been seized and sold as a result of tax foreclosure. There is no basis for this Court to decline application of Rafaeli to cases that are not yet final or to timely filed claims premised on events that predated our decision in Rafaeli. Therefore, Rafaeli has full retroactive effect.

Slip op. at 21 (footnote omitted).

Check it out. There's a lot there to digest, especially what we think is the money quote:

As we explained in Rafaeli, the property right to surplus proceeds dates back to the Magna Carta, through the English common-law tradition, through Michigan’s early statehood, and into twentieth century Michigan and American jurisprudence. "[A] property owner’s right to collect the surplus proceeds from the tax-foreclosure sale of his or her property has deep roots in Michigan common law." "Because this common-law property right is constitutionally protected by our state’s Takings Clause," no subsequent amendment of the GPTA can abrogate this basic right. As Rafaeli demonstrated, few rights and legal principles have greater legal, historical, and constitutional pedigrees than the protection against uncompensated takings, which applies fully to the taking of surplus proceeds following a tax-foreclosure sale.

The Supreme Court of the United States recently came to the same conclusion under the United States Constitution in Tyler v Hennepin Co. In that case, the Supreme Court held that the Takings Clause of the United States Constitution prohibited the state of Minnesota from retaining surplus proceeds after a tax foreclosure without providing any opportunity for divested property owners to claim those proceeds. The Tyler Court, like this Court in Rafaeli, cited extensive historical support and thoroughly explained that a property right to surplus proceeds exists and is protected under Takings Clause jurisprudence. As this Court recognized in Rafaeli, this right dates back centuries to the very foundations of the Anglo-American legal tradition.

Slip op. at 22-23 (footnotes omitted).

Schafer v. Kent County, No. 164975 (Mich. July 29, 2024)

A Property Rights Advocate Is An Environmentalist Who Has Been Overregulated: Anti-Takings Advocate Argues For The Right To Exclude

You remember that old adage (or maybe its a cliché?) that "a conservative is a liberal who has been mugged?" Well, here's your environmentalist analog.

In Echeverria v. Town of Tubridge, No. 23-AP-291 (Aug. 2, 2024), the Vermont Supreme Court held that property owners' lawsuit asserting their right to prohibit the town from allowing bicycling on hiking trails on their land, and to prohibit it from allowing members of the public onto the property to maintain the trails, is ripe. The owners asserted that as the owners, they alone have the authority "whether and how to maintain the legal trails that cross their property." Slip op. at 2. Here are the details: the owners assert

sole and exclusive authority to decide whether and how to maintain the legal trails that cross their property. They alleged that the expected entry onto their property by volunteers seeking to exercise the Town's maintenance authority will adversely affect their plan to maintain the trails as natural forest paths and minimize destruction of vegetation on the trails. They further alleged that such entry would constitute a trespass and taking in violation of the Vermont and U.S. Constitutions. They sought a declaration that the selectboard does not have the legal authority to engage in maintenance or repair activities on the legal trails of the town or to delegate such authority to private individuals.

Slip op. at 3.

The trial court dismissed, agreeing with the town that the lawsuit was not ripe. No one had actually been authorized to enter the property to maintain the trails. The owners appealed to the Vermont Supreme Court.

None of this would be particularly remarkable, except that the landowner asserting the government overriding his private property right to exclude is a taking is none other than well-known environmental advocate, takings law blogger, and lawprof John Echeverria. The former Director of the now-defunct Georgetown Environmental Law & Policy Institute (those of you who were around when GELPI was active remember it primarily as the leading anti-takings laboratory, and for its annual conference for strategizing ways of defeating takings claims). An anti-takings guy asserting a taking when it comes to his property rights.

Now don't get us wrong: we wish the good law professor well in this quest. We do love it so. Because it brings us a smile -- and perhaps a small frisson of satisfaction -- to witness this road to Damascus moment, especially on the subject of property rights, takings, and ripeness, a topic the plaintiff has written a lot about:

Oh, in case you are interested, the Vermont Supreme Court reversed, and held that the owners' claims are ripe. The court reached this conclusion by treating this as a pleadings matter and not judicial gatekeeping, an analysis we've been pushing on this side for a long time:

We conclude that plaintiffs have satisfied the actual-case-or-controversy requirement here. Plaintiffs allege that the Town has adopted a new policy for maintenance and repair of legal trails. According to plaintiffs, this is the first time in the Town’s history that it has formally asserted authority to maintain and repair legal trails. The Town also established a process for private individuals to apply for and receive permission to exercise the Town’s authority to maintain and repair legal trails. Two of the Town’s four legal trails are on plaintiffs’ property. In sum, the Town has taken concrete steps manifesting its intent to enter onto plaintiffs’ property for the purpose of improving the trails. Assuming as we must for purposes of a motion to dismiss that these allegations are true, they demonstrate a sufficiently concrete threat of physical invasion and interference with plaintiffs’ asserted right to control who enters or alters their property.

Slip op. at 9. The court rejected the town's argument that someone needs to apply for a permit first before the claim becomes ripe:

This case similarly presents a justiciable claim because the Town has formally asserted that it has authority to enter onto plaintiffs’ land for the purpose of maintaining and repairing the legal trails and has created a procedure for implementing that authority, and plaintiffs assert that the Town has no legal authority to do so. This is a purely legal dispute that is appropriate for a declaratory judgment action, and resolution of this question will settle the dispute between the parties.

...

The Town argues that plaintiffs’ action is premature because no person has yet applied to maintain the trails on plaintiffs’ property. However, plaintiffs alleged in their complaint that the selectboard chair told them the Town planned to “sit on” the procedure until plaintiffs’ litigation was resolved. It is reasonable to infer from this statement that the Town fully intends to implement the new procedure and exercise its asserted right to maintain and repair trails once the litigation concludes. Moreover, the filing or granting of an application to exercise the Town’s asserted authority to maintain trails would not add any new dimension to the purely legal question presented by plaintiffs: whether the Town has that authority in the first place. Thus, the fact that no person has yet attempted to maintain the trails on plaintiffs’ property does not render this issue unripe.

Slip op. at 11-12.

And what about the town's claim that the plaintiffs were merely anticipating future action, and the court should wait (we wonder where the town got that argument from)? Nope:

We are also unpersuaded by the Town’s contention that plaintiffs’ feared injury is subject to "voluntary avoidance." The Town argues that plaintiffs have not alleged that anyone has applied to maintain the trails on their property and even if someone did, the Town would still have to review the application. This does not change the fact that the Town has asserted the right to enter, through its agents, onto plaintiffs’ property for the purpose of maintaining the trails. As discussed above, we can reasonably infer that the Town intends to implement its new procedure once this litigation concludes. There is no indication that the Town’s exercise of its asserted authority is contingent on any other actor or regulatory process. The situation here is therefore distinguishable from the cases cited by the Town, where the facts showed that the plaintiffs could avoid the threatened injury through their own avoidance or that the occurrence of the threatened injury depended on the uncertain actions of a third party.

Slip op. at 12.

Welcome to the fight! (Call us if you need an amicus brief down the road in support of your right to exclude and for compensation for a taking if the town keeps pressing.)

Echeverria v. Town of Tubridge, No. 23-AP-291 (Vt. Aug. 2, 2024)

Register Now: 21st Brigham-Kanner Property Rights Conference, William & Mary Law School, Sep. 12-13, 2024

Come join us in Williamsburg, Virginia at the William and Mary Law School for the 21st edition of the Brigham-Kanner Property Rights Conference. The Conference is unique, because its express purpose is to bring property legal scholars and property law practitioners together to discuss, what else, property and property rights law.

Yes, there's a healthy dose of theory and academics, but also the real-world perspectives of practicing lawyers who bring the cases that put theory into practice. (New to this event and want a preview? Here's our write-up of the 2024 Conference.)

More details here. Register here.

The days prior to the Conference launch on Thursday All that week, we're putting on student-oriented programming.in conjunction with the WM Law Career Services Office. Sessions on "Careers in Dirt Law," "Land Use and Real Estate Law in Practice," and "Comparative Property Rights," for example, presented by experienced practitioners including W&M Law alums who now are lawyers in the field. Thursday is the Wren Building dinner at which lawprof Lee Fennell will join the pantheon of past winners, and will be awarded this year's Brigham-Kanner Property Rights Prize.

Friday brings us to the academic portion, where five panels of national expert legal scholars and practitioners. Here's the agenda:

• Restructuring Property: A Tribute to Lee Fennell
• Background Principles, General Law, & Constitutional Property
• Roundtable: Unfinished Business & Emerging Issues
• Property Rights and The Housing Crisis
• Government Trespass: The Open Fields Doctrine Turns 100

Register now and plan on joining us!

Deepening A Lower Court Split, Fed Cir (2-1) Reinstates CDC Co-19 Eviction Moratorium Temporary Takings Claim

This one is a must-read.

In Darby Dev. Co., Inc. v. United States, No. 22-1929 (Aug. 7, 2024), the U.S. Court of Appeals for the Federal Circuit held that the Court of Federal Claims should not have dismissed Darby's complaint for failure to state a physical invasion takings claim.

The short takeaways:

• Takings claims do not require the government action be legally authorized (here, the courts invalidated the government action, after which the plaintiff sued for a taking), only that the government action was "authorized" and thus can be "chargeable to the government."
• Prohibiting evictions is not merely a regulation of the landlord-tenant relationship. Yee v. City of Escondido is distinguishable, and does not categorically exempt all actions that implicate the landlord-tenant relationship from physical takings challenge.

We think the longer story is worth your time. Here it is.

As you may recall, the Center for Disease Control purported to impose a nationwide moratorium on residential evictions during the Co-19 lockdowns. (Sidebar: we don't know about you, but the lockdowns now seem like eons ago -- some distant fever dream, no?) When the Supreme Court got a hold of a challenge to the CDC's authority to do this, the Court concluded, "[i]t strains credulity to believe that this statute grants the CDC the sweeping authority that it asserts."

Now remember, that was one of the cases challenging the CDC moratorium on non-takings grounds, primarily asserting that the CDC's enabling statute did not give it the authority to impose such a sweeping an action (or if it does, the statute is unconstitutional). The Court invalidated the moratorium. Or, more precisely, concluded the challengers in that case stood a pretty good chance of ultimately prevailing on the merits, since this went to the Court on a preliminary injunction. In any event, that was enough, and the CDC stood down.

But as we also noted, Court's opinion contained some tantalizing takings language that we thought then (and continue to think now) predicted a physical takings claim:

Despite the CDC's determination that landlords should bear a significant financial cost of the pandemic, many landlords have modest means. And preventing them from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership - the right to exclude. See Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435 (1982).

Not surprisingly, some property owners took up the challenge, and several takings claims against the federal government in the Court of Federal Claims followed. Some of the claims were quite ... extraordinary. Others a bit more modest. But here's the general theory most of them employed:

In their operative complaint, they claimed that the Order, by preventing them from evicting non-rent-paying tenants, constituted a physical taking of their rental properties for public use, thus requiring just compensation under the Fifth Amendment’s Takings Clause. See J.A. 37 ¶ 31, 38 ¶¶ 36–37 (describing the Order as having deprived Appellants of their “fundamental right to exclude” and having “effected a government-authorized physical invasion, occupation, or appropriation of [their] private property, for the government itself or for third parties” (cleaned up)).

Slip op. at 6-7 (footnote omitted0.

To our surprise [more like "surprised not surprised"], most of those complaints went nowhere, and floundered on familiar shoals, as in the Darby case:

The government moved under Court of Federal Claims Rule 12(b)(6) to dismiss Appellants’ complaint for failing to state a claim upon which relief could be granted. The government made two primary arguments relevant here. First, it argued that a takings claim cannot be premised on government action that was unauthorized; and, in its view, the Supreme Court in Alabama Association of Realtors essentially confirmed that the Order was unauthorized. Second, it argued that, under Yee v. City of Escondido, 503 U.S. 519 (1992), the Order could not constitute a physical taking because it merely regulated the landlord-tenant relationship.

The Court of Federal Claims granted the government’s motion and dismissed the complaint. Darby Dev. Co. v. United States, 160 Fed. Cl. 45 (2022).

Apparent Authority and "Chargeable to the Government"

The Federal Circuit first considered the government's argument that only authorized actions result in takings liability. It argued that "authorized" means legal, or done with actual legal authority. The court rejected the claim, holding that "authorized" means "chargeable to the government" Slip op. at 10. So an action that is ultimately ultra vires or illegal can result in takings liability. This reminds us of the common law "apparent authority" vibe:

An action will normally be deemed authorized if it was done by government agents “within the general scope of their duties”—i.e., if it was “a natural consequence of congressionally approved measures” or “pursuant to the good faith implementation of a congressional act.” Del-Rio, 146 F.3d at 1362 (cleaned up); see also Ramirez, 724 F.2d at 152 (“[O]n numerous occasions when the government agent was acting within the ordinary scope of responsibilities conferred on him by Congress, and took private property without express statutory authority or prohibition, the Tucker Act remedy was held to lie.”).

Slip op. at 11 & n.7 (citing Restatement (Third) of Agency § 2.02 cmt. c (Am. Law. Inst. 2006) ("In determining when an agent’s act is attributable to a principal, it is not novel to define the agent’s authority based on its reasonable (even if ultimately mistaken) understanding of the authority that the principal gave it.")).

This portion of the opinion wraps up with this summary:

To summarize: even if an action by a government agent is unlawful, it will likely be deemed authorized for takings claim purposes if it was done within the normal scope of the agent’s duties—for example, if it was done “pursuant to the good faith implementation of a congressional act.” Del- Rio, 146 F.3d at 1362 (cleaned up). If instead the action was outside the normal scope of the government agent’s duties— or, despite being within that scope, it contravened an explicit prohibition or other positively expressed congressional intent—it will likely be deemed unauthorized. See id. at 1363; Ramirez, 724 F.2d at 151. The ultimate inquiry is whether the government agent’s action is “chargeable to the government.” Del-Rio, 146 F.3d at 1362.

Slip op. at 16.

The court concluded that "because the CDC issued the Order within the normal scope of its duties, and because it did not contravene any explicit prohibition or positively expressed congressional intent in so doing (far from it, as just discussed), we concluded that the Order was 'authorized' for takings-claim purposes." Slip op. at 20.

Yee Doesn't Go That Far: Cedar Point is More On-Point

Next, the court considered whether Yee v. Escondido -- a case which has caused all sorts of mischief in the takings field -- could be employed to deem the CDC's restriction on a lessor recovering possession of rented property via eviction merely a regulation on the landlord/tenant relationship, and not the government allowing third-party occupation of property.

The court found Cedar Point more on-point: "Cedar Point's reasoning indicates that the complaint stated a physical-takings claim. And, as explained below, we consider Yee distinguishable." Slip op. at 30.

[A]t a fundamental level, we cannot reconcile how forcing property owners to occasionally let union organizers on their property infringes their right to exclude, while forcing them to house non-rent-paying tenants (by removing their ability to evict) would not.

Slip op. at 31.

The court limited Yee ("the laws at issue in Yee expressly permitted eviction for nonpayment of rent"), and noted that "Yee was fundamentally a rent-control case." Id. The court rejected each of the government's Yee-based arguments. 

First, Yee is not a get-out-of-jail-free card, and did not hold that "government actions implicating the landlord-tenant relationship can never be a physical taking." Slip op. at 31-32. Yes, there's a broad power to regulate, but "we see nothing in Yee (or any other binding precedent we are aware of) that immunizes -- as a categorical matter -- government action implicating the landlord-tenant relationship from being treated as a physical taking." Slip op. at 32.

Second, the court rejected the notion that because the owner invited the tenant to occupy the property by entering into a lease, she thereby abandons a right to recover the property upon breach of that lease. "While we agree that this point distinguishes Cedar Point, we are not persuaded that it compels a different result." Slip op. at 33.

If a previous voluntary invitation (by itself) controlled the analysis, that would essentially mean that all government actions implicating the landlord-tenant relationship are immune from being treated as physical takings. (After all, we can safely assume that just about every landlord-tenant relationship stems from a voluntary “invitation” from the landlord to the tenant.) And yet, as noted above, we see no reason why government actions implicating that relationship must be categorically immune from being treated as a physical taking. At bottom, just because tenants (or other occupiers of property) were at one point “invited” does not mean that their continued, government-compelled occupation cannot, under any circumstances, be treated as a physical taking.

Id.

The court summarized by noting that the CDC's restriction "is hardly a run-of-the-mill law implicating the landlord-tenant relationship. Instead, it is a highly-unusual -- and, so far as the parties have shown, unprecedented -- Order that outright prevent evictions for nonpayment of rent." Slip op. at 34.

The Federal Circuit joins the Eighth in limiting the scope of Yee, while other circuits (see also this) -- and some state courts -- continue to to view Yee as allowing nearly any form of regulation as long as the tenancy originally was permissive. 

One judge dissented (Judge Dyk, in case you were wondering). He focused on the "authorized" argument, and would have concluded that the CDC's actions were not within the "normal scope" of the agency's duties, and was "well-outside" what the CDC is charged with doing. In other words, the more the CDC strayed outside the lines, the less its actions could result in a taking.

This, he asserted, would result in a massive expansion of government liability:

It would effectively make even clearly unauthorized agency action authorized for purposes of takings liability unless that action was contrary to a specific prohibition of the authorizing statute or taken in bad faith. That cannot be correct. The majority’s decision would work a sea change in our takings jurisprudence and impose significant takings liability on agencies for unauthorized acts, directly discouraging adoption of legitimate government programs because of the risk of takings liability in addition to injunctive and declaratory relief. Historically, unauthorized programs were enjoined. Now, in addition there is the specter of takings liability.

Dissent at 3.

The length of Judge Dyk's dissent tells us he was trying to set up en banc review, or even a government cert petition.

So stay tuned.

Darby Dev. Co., Inc. v. United States, No. 22-1929 (Fed. Cir. Aug. 7, 2024)

New Cert Petition: After Permit Denial, To Ripen A Takings Claim Do You Have To Keep On Trying?

Check this out, the latest takings cert petition from the Pacific Legal Foundation shop.

Since this is one of ours (our colleague Chris Kieser is in the lead), we're not going into too much detail, but will say that this involves ripeness in a regulatory takings claims, a topic we've been focused on a lot lately.

The question here is once the government says "no" to a development plan, must the owner keep on asking? What's that old adage? If at first you don't succeed, try and try again? We know that in land use, that means as long as the government says it is willing to "clarify" or "change" its decision (something it almost always asserts it is able and willing to do), most courts will very likely never hold it to task. Planning authorities know this, and as a consequence are hardwired to almost never say no, and only "no, but..." or "maybe." Which puts owners in permit purgatory. Or as The Eagles noted, "you can check out any time you like, but you can never leave."

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

Here's the Question Presented:

Lemon Bay Cove, LLC, sought permission from the United States Army Corps of Engineers to develop coastal property in Charlotte County, Florida. After soliciting public comment concerning the environmental impact of the proposed project, the Corps told Lemon Bay to look for a different parcel to develop. More than three years later, the Corps denied Lemon Bay’s permit application with prejudice. Lemon Bay sued, arguing that the denial of the permit deprived the land of all economically viable use and thus effected a per se taking under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The Court of Federal Claims held that Lemon Bay had not shown a denial of all economically viable use because it could have asked the Corps for permission to build a smaller development that might have been approved.

The question presented is whether a regulatory takings claim seeking just compensation under Lucas may be defeated by the mere possibility that a permitting authority might have approved a smaller development proposal.

Lawprof Dennis Crouch has written up the case in more details at the Patently-O blog, in his post "Bleak House Revisited: Lemon Bay Cove and the Regulatory Takings Quagmire." Recommended reading.

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

Petition for Writ of Certiorari, Lemon Bay Cove, LLC v. United States, No. 24-134 (U.S. Aug. 2, 2024)

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

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

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

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

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

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

Come, join us and learn and celebrate!

New Article: "The Ends of Means-Ends Scrutiny"

Here's an article worth reading, just posted to SSRN, Procaccini, The End of Means-End Scrutiny (July 29, 2024).

For your takings and individual liberty nerds, please focus on pages 36-38 (showing how takings analysis is not accomplished by the usual means-ends scrutiny), pages 40-42 (social and economic liberties), and pages 43-44 (searches and seizure).

Why move from means-ends scrutiny to more robust judicial review? Zero in on pages 50-52 ("Transforming Rights from Mediated Interests to Uncompromising Trumps"). We're thinking the author concludes this move is a bad thing, but we're not so sure it is.

Here's the Abstract:

It is black letter law that courts apply means-end scrutiny to evaluate laws that burden constitutional rights. Not anymore. Discreetly and pervasively, this Supreme Court has ousted means-end scrutiny from constitutional law. It has done so through a series of smaller and seemingly unconnected doctrinal incursions, including the introduction of history and tradition tests, the transformation of equality doctrines, and the embrace of formalist rules to govern constitutional law.

This Article provides a complete and interconnected critique of the numerous doctrinal transformations that together comprise the larger constitutional revolution of ending means-end scrutiny. It tracks how this upheaval now touches nearly every fundamental right and important federal power. But not in exactly the same way. Rather, the Court has selectively abandoned means-end scrutiny to benefit the same subset of authorities, rights, and groups. In particular, the end of means-end scrutiny has reoriented the landscape of constitutional law to weaken federal authority, strengthen protection for libertarian as opposed to egalitarian rights, and benefit private power and dominant political, economic, and social groups.
The upshot of this patterned end of means-end scrutiny is a foundational change not just to the prevailing methodology of constitutional adjudication but also to the very nature of constitutional rights and judicial review. By eliminating consideration of governmental means and ends from the construction of rights, the Court has crafted a new form of judicial review that is court-centric, formalist, and dominance-reinforcing. The Article tracks and critiques this doctrinal and theoretical transformation, connecting it to the most salient debates in constitutional law today and exposing the deep and troubling consequences of the seismic--and yet largely silent--collapse of means-end scrutiny.

Whether you agree or disagree with the author's premise, it is worth checking out.

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

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

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

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

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

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

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

Br. at 7.

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

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

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

Stay tuned.

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

Relying On Complaint's Allegation That City Issued A Permit As Confirmed By Chief Building Officer Email, Texas App Holds Takings Claim Ripe Even Though City Said Council Must Issue Permits

Check out City of Kemah v. Crow, No. 01-23-00417-CV (July 25, 2024), from the Texas Court of Appeal (First District).

This is yet another takings ripeness case -- here, the so-called "final decision" requirement -- the second recent opinion on this issue from the Texas court. See "Final Decision Takings Ripeness Is Based On All Circumstances, Not Hard-And-Fast Requirements (Read That Again: A Factual Question)" for our write-up of the other case.

In this one, the owner asserted that the city issued her a building permit for her "barndominium" and and two other structures to be used as short-term rentals, but later issued a stop work order. This resulted in a Penn Central taking, she asserted.   

The city sought ripeness dismissal, asserting the owner didn't actually have a permit issued by the city council as its ordinances require. The owner didn't have the actual permit, but her complaint alleged that she did have emails from the City's Planning officer and City Manager saying she had a permit, and her complaint also included allegations that these and other city officials repeatedly confirmed that she had the permit. See pages 2-9 of the slip opinion for the details as recited by the court.

The city argued that emails and other communications with city officials don't count, and only the city council can issue permits. Yes, she applied for a permit, but the city council has never approved one.

The City argued that Crow never obtained a final decision from the City on her permit application. Specifically, it asserted that although Crow claimed to have received an email from Shoaf advising her of the City’s approval of her permit application, she failed to allege facts showing the actual issuance of such a permit or the City’s denial of her application. It further argued that Crow did not allege that she obtained a variance, or that her alleged variance request was denied, and she failed to allege facts showing that re-application for a building permit would be futile. Thus, it argued, Crow failed to present a ripe claim over which the trial court could assert subject matter jurisdiction.

Slip op. at 9-10.

No official final decision from the council = takings claim not ripe.

The court limited itself to the allegations in the complaint: we take those allegations and the attachments to the complaint (including, inter alia, the emails from the planning and city officials saying 'you have a permit') as true, and if proven, this would be enough to show that the city made enough of a final decision to consider the takings claim on the merits, even though the city now claims it didn't make a formal, official permit grant. The city made enough of a final decision to show the case was ripe:

In support of her allegation that the City issued her a building permit, Crow attached copies of the emails and texts above as exhibits to her amended petition. Crow also attached a transcript of the minutes from the February 16, 2022 City Council meeting. At the meeting, Mayor Joiner stated, “[Item] 24. Discussion, consideration, and possible action on a request to lift the stop work order on 1306 Fay Road, Kemah, Texas 77565, Owner Veronica Crow, request for the city to provide a hard copy of the permit for 1306 Fay Road, Kemah, Texas 77565, issued under No. 210603007 . . . .” Also attached to Crow’s amended petition is a December 10, 2021 email from Shoaf to the Mayor and City Council providing an update on 1306 Fay Road. In the email, Shoaf stated, “It has also been brought to the attention of Walter [Gant] and myself that a member of Council has reached out to the permit holder.” (emphasis added)

Crow alleged that she was issued a permit to build on 1306 Fay Road in July 2021, constituting the final determination of her permit application, the City then denied Crow her right to proceed with construction under that permit, and later denied that the permit ever existed. Crow alleged that she sustained the loss of investment-backed expectations as a result of the City’s improper, intentional, and wrongful conduct, which amounts to a taking under the Texas Constitution. Taking her factual allegations as true, as we must, we conclude that Crow’s claim is ripe.

Slip op. at 17-18.

Here's a practical lesson that we take from this case and others: we know that in most jurisdictions, a complaint only need meet the fairly low bar of "notice pleading" tempered (in federal courts) by Twiqbal "plausibility." And that ripeness is generally a defense and not an essential element of a claim. But when pleading regulatory takings, property owners are seemingly held to a higher standard.

That being so, if you have the facts and the documents to anticipatorily plead the case is ripe, you should do what Crow's lawyers did her: plead with specificity like this was a fraud claim, and attach the documents to the complaint. Yes, it might not be required, but there's little harm in it, and doing so might avoid all kinds of mischief wrought by defendants and courts looking to get rid of your claim. 

PS - can we move all of our clients' properties to Texas, please? 

City of Kemah v. Crow, No. 01-23-00417-CV (Tex. App. July 25, 2024)

CA9: Unannounced Inspections As Condition Of Falconry License Are Subject To Nollan/Dolan Challenge

On the surface, the U.S. Court of Appeals for the Ninth Circuit's opinion in Stavrianoudakis v. U.S. Fish & Wildlife Svc., No. 22-16788 (July 25, 2024) is about Article III standing (a highly technical gateway issue that is very federal courts wonky).

But taking a deeper look offers an insight into ways other than the usual Fifth Amendment arguments for protecting property rights. [Before we go on, a disclosure: this is one of our cases, argued and won by PLF colleague Daniel Woislaw].

This is a case involving the sport of falconry. Can't say that we knew too much about that -- until maybe the occasional movie -- until this case. First (and this may not come as a surprise to you who have been observing what things the government finds worthy of regulations and licensing), did you know that every state government except Hawaii has adopted regulations governing falconry? Nor did we, until now. Second, there used to be "parallel federal and state permitting systems," but the feds backed out in light of every state doing it; now, once the feds certify a state's regulations satisfy federal standards, the feds are out. 

California's regulations are one of those, and require that falconers renew licenses annually:

Consistent with federal requirements, California authorizes unannounced inspections: CDFW “may conduct unannounced visits to inspect facilities, equipment, or raptors possessed by the licensee, and may enter the facilities of any licensee when the licensee is present during a reasonable time of the day and on any day of the week” and “may also inspect, audit, or copy any permit, license, book, or other record required to be kept by the licensee under these regulations at any time.” Cal. Code Regs. tit. 14, § 670(j)(3)(A).

Slip op. at 8. To get a California license, a falconer must certify that he or she agrees that the premises, equipment, or the falcons themselves "are subject to unannounced inspection." If you don't agree, you are not getting a license or a renewal.

Several falconers and the American Falconry Conservancy sued the feds, and state officials in federal court, challenging past unannounced inspections under the First, Fourth, and Fourteenth Amendments, and the Administrative Procedures Act. The district court dismissed for lack of standing, but granted leave to amend the Fourth Amendment claim.

Here's the breakdown of the operative second amended complaint's claims against the unannounced-and-warrantless-inspections scheme:

• A facial 4A claim: conditioning a license on the licensee's agreement to forego his rights is an unconstitutional condition.
• The same unconstitutional conditions claim, but as-applied to these plaintiffs.
• The scheme allowing warrantless searches facially violates 4A.
• Same claim, as-applied.
• A co-habitant of one of the falconers asserted the scheme violates her 4A rights.
• APA claim.

The district court didn't find the amendments did much of anything and dismissed all 4A claims without leave to amend. The threat of future inspections was too speculative, and the Conservancy lacked associational standing.

A 2-1 panel of the Ninth Circuit reversed, in part. The court held that the falconers have standing to challenge the California officials, but not the Fish & Wildlife Service. We're not going to explore in depth the court's analysis (you can read that yourself, and we recommend you do so - start on page 12 of the slip opinion).

The most interesting stuff in the opinion (in our opinion) is the court's description of the claims. Yes, the government can impose conditions on the conferral of some benefit, but those conditions cannot include the relinquishment of a constitutional right. Slip op. at 13. We are used to seeing this in the land-use exactions context, where the right to compensation is the right a plaintiff is compelled to surrender. But here, the constitutional rights in the warrant requirement in the Fourth Amendment:

We have recognized that the unconstitutional-conditions “doctrine is especially important in the Fourth Amendment context” because, “[u]nder modern Fourth Amendment jurisprudence, whether a search has occurred depends on whether a reasonable expectation of privacy has been violated.” United States v. Scott, 450 F.3d 863, 867 (9th Cir. 2006) (citing Katz v. United States, 389 U.S. 347, 361 (1967) (Harlan, J., concurring)). “Pervasively imposing an intrusive search regime as the price of [a discretionary government benefit], just like imposing such a regime outright, can contribute to the downward ratchet of privacy expectations.” Id. Accordingly, the doctrine applies when the government attempts to “exact waivers of rights as a condition of benefits, even when those benefits are fully discretionary.” Id. at 866–67.

Id.

The injury for standing purposes occurs "when the government succeeds in pressuring the plaintiff into forfeiting a constitutional right in exchange for a benefit or the government withholds the benefit based on the plaintiff's refusal to surrender a constitutional right." Slip op. at 14 (citing Koontz). It's the dirty demand that is the problem, not "whether the government ultimately succeeds in pressuring someone into forfeiting a constitutional right[.]" Id. See also slip op. at 16 ("Therefore, the Falconers’ alleged injury in fact is the forced choice: retention of their Fourth Amendment rights or receipt of a falconry license, which is required to lawfully practice falconry.").

That being so, the plaintiffs have standing to bring such a claim against the California officials:

The question presented here is whether simply agreeing to submit to those inspections, in the absence of an actual inspection—see Part II.B—amounts to the relinquishment of Fourth Amendment rights. We conclude that it does. By successfully applying for a falconry license, the Falconers certify that they will forego a claim to Fourth Amendment protections. An inspection may not occur or, if it does, it may not violate the Fourth Amendment because it is reasonable. But the idea that the Falconers surrender nothing unless and until an unlawful inspection occurs—that California extracts a blanket waiver that is, in fact, entirely superfluous—defies logic. Rather, we take the regulation to mean what it says, and agreeing to unannounced, warrantless inspections without any consideration of the reasonableness of such inspections implicates Fourth Amendment rights.

Slip op. at 15.

The court did not view the claims the same way as against the USFWS, and concluded these claims are not ripe. The feds delegated falconry licensing to California, so the plaintiffs have not suffered an injury directly traceable to the feds. And the falconers have not sought, nor have they been granted, a federal license (indeed, they could not do either of these because as noted above, the feds no longer process falconry licenses, only the states).

The court affirmed the dismissal for lack of standing the as-applied warrantless search claims, primarily "because they have not alleged that they were subject to warrantless inspection under the challenged regulations." Slip op. at 22. Unlike the unconstitutional conditions claims, the court viewed the wrong here as not merely being subject to the requirement, but on the government actually making a warrantless search.

Slip op. at 23.

One judge concurred in part and dissented in part, agreeing that the lack-of-standing dismissal was ok because there's not been any actual warrantless searches, but arguing that the "Falconers have standing to challenge the state regulations under the unconstitutional-conditions doctrine[.]" Slip op. at 29 (S.R. Thomas, J., dissenting in part). The panel majority broke new ground in focusing on the demand as the constitutional wrong: "[i]ndeed no federal court has held that the act of giving consent itself constitutes injury absent an actual or imminently impending search. The majority’s assertion that Falconers are injured 'every time they renew their licenses,' is unsupported by precedent. Id. at 33 (S.R. Thomas, J., dissenting in part).

This case is a good reminder that there's more than one way to skin the property rights cat. Yes, we focus on the Just Compensation requirement. But we should not overlook other ways to protecting private property rights.

Stavrianoudakis v. United States Fish & Wildlife Service, No. 22-16788 (9th Cir. July 25, 2024)

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

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

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

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

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

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

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

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

Cal. Code Civ. P. § 1240.030.

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

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

Slip op. at 5-6.

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

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

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

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

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

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

The opinion is not published. But should be.

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

Final Decision Takings Ripeness Is Based On All Circumstances, Not Hard-And-Fast Requirements (Read That Again: A Factual Question)

We suggest those of you interested in takings ripeness -- here, the so-called "final decision" requirement -- take a quick gander at the Texas Court of Appeals' opinion in City of Buda v. N.M. Edificios, LLC, No. 07-23-00427-CV (July 2, 2024).

We won't go into the details, except to say that a property owner developing its land entered into an agreement with the city, under which the owner would grant a drainage easement to the city to alleviate citywide flooding, while the city was obligated to construct drainage improvements. When the owner submitted a plan, the city instructed it to "provide additional drainage improvements on the property." Slip op. at 2. Not so fast, said the owner: the city, not me, is on the hook for these additional improvements. If you condition approval of my development plans on me providing more drainage stuff, that's a taking (what the court calls "an investment-backed or regulatory taking," which we assume means Texas's versions of Penn Central or Nollan).

The city asserted these claims were not ripe because the owner had not submitted an application, and the city consequently had not denied said application. No application, no decision. "Buda argues that a final decision typically requires both a rejected development plan and the denial of a variance from the controlling regulations." Slip op. at 4. The owner countered by pointing out the fact that at the city's lawyer's "direction," the city stopped the application process.

While it is true that in many cases, an application, denial, and variance are what ripen a claim, That's true, the court concluded, but the application rule is merely the "usual" rule, and not a requirement in every case:

"'[U]sually' does not imply a hard and fast rule but, rather, a determination dependent on relevant circumstances. Indeed, futility may be one of those circumstances, that is, requiring a complaint to engage in futile ventures. Thus, a 'final decision' may take different forms. And, we cannot see why exclusion from the castle should be less definitive because it came from the captain as opposed to the king. It is not farfetched to conclude that directives from the City's legal counsel to those at the gate could be found sufficient to render futile additional attempts by Edificios to gain entry into the realm of the city council. And, to the extent we have an affiant attesting that such directives were made, there exists a question of fact pretermitting our adoption of the City's position on ripeness.

Slip op. at 5-6 (citations omitted).

The court emphasized that these are factual disputes, not legal questions to be resolved at the pleadings/jurisdiction stage: "the issue as presented by Buda sounds more like an attack on the merits of Edificio's cause of action rather than a jurisdictional inquiry. As said previously, consideration of the underlying merits of the claim generally lies outside the scope of review when address pleas to the trial court's jurisdiction." Slip op. at 6-7.

The court concluded: "[s]uch review will happen, if it happens at all, after the trial court has been presented with a fully developed record and comes to a final substantive judgment on the matter." Slip op. at 7.

It's good to see at least one court that "gets it." In many cases where a takings plaintiff's complaint alleges that it received some kind of final decision from the government about development plans -- even where that decision is not via the government's claimed official or usual process for eliciting such decisions -- it should be a factual question, not one for the court's pleading-stage gatekeeping.

If a factual allegation is Twiqbal-plausible that the government has made a decision such that the court on the merits can measure the owner's property losses – a determination that should not be based on any judgment call on the merits of the claim at this stage, but only on whether the facts as alleged are within the realm of possibility, that should be enough to get to the next stage.

It may be, in the court's view, a weak claim. But don’t weak - but plausible - claims have the right to move past pleadings? The purpose of 12(b) screening is to get rid of cases where there’s no actual controversy ((b)(1) jurisdictional ripeness), or those where the alleged facts are fantastic and don’t add up to a claim ((b)(6) (i.e., the complaint pleads only a diminution of value and doesn’t allege anything about character or expectations). It is the function of Rule 56 summary judgment to weed out those claims that are factually weak and should not waste judicial resources with a trial. Not, as many courts conclude, Rule 12 dismissal.

As the Texas court noted, "[s]uch review will happen, if it happens at all, after the trial court has been presented with a fully developed record and comes to a final substantive judgment on the matter."

Study this one.  

City of Buda v. N.M. Edificios, LLC, No. 07-23-00427-CV (Tex. Ct. App. July 2, 2024)

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

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

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

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

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

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

Here's the immediate possession statute:

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

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

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

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

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

Haw. Rev. Stat. § 101-29.

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

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

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

Slip op. at 7.

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

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

Slip op. at 8.

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

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

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

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

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

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

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

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

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

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

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

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

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

Slip op. at 10.

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

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

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

Slip op. at 10-11.

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

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

Will there be more? Stay tuned.

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

Statute Allowing Public To Access Formerly Private Portions Of Rhode Island Beaches Is A Taking

Check out this decision, entered by a Rhode Island Superior Court (a general jurisdiction trial court) denying the State's motion for summary judgment. The court concluded that a recently-adopted statute shifting the boundary between public and private property on RI's beaches is a taking.

We won't be commenting in too much detail because this is one of ours (PLF colleague Dave Breemer represents the plaintiffs). But here's what you need to know:

• Until recently, RI law used the high water mark (mean high-tide line) as the boundary between the public beach and private property.
• In 2023, the RI Assembly adopted a statute that redefined that boundary, and moved it shorewards to where "the land held in trust by the state for the enjoyment of all of its people ends and private property belonging to littoral owners begins."
• As a consequence, the public may enter and use "where shore exists, on wet and or dry sand or rocky beach, up to ten feet (10') landward of the recognizable high tide line."
• Takings claim under both RI and U.S. Constitutions followed. The State moved to dismiss, and the court converted it to a motion for summary judgment.
• The court first recognized that the public trust doctrine preserves the public's ability to engage in certain activities in state waters and to access the shoreline.
• In 1982, consistent with longstanding U.S. Supreme Court precedent, RI established the mean high tide line as the boundary between private property, and the area in which the public can exercise those rights.
• The court rejected the State's argument that the public trust and custom have rendered public access on this part of a beach a "background principle" that effectively removed the right to exclude stick from littoral owners' bundle.
• Not so, held the court: "The General Assembly, in enacting The Act, appropriated a public right of access onto private property when it designated up to 10' landward of the recognizable high tide line as the access point for the public's rights and privileges." Slip op. at 10-11.
• "Therefore, The Act, in disposing of the MHT line, extended the point of public access over the Plaintiff’s private property. Furthermore, rather than restraining the Plaintiff’s use of their own property, The Act extends permanently a right of access to the public and inhibits Plaintiff’s right to exclude. The extension of the access point clearly results in the taking of 'an interest in property.'" Slip op. at 11.
• "The Act reduced the Plaintiff’s “bundle of rights” inherent in the ownership of property by expanding the preexisting boundary line to ten feet landward of the recognizable high tide line and confiscated the Plaintiff’s property resulting in an unconstitutional taking." Id.

More on the decision here:

• R.I. Superior Court judge sides with property owners in shoreline access law dispute" (Rhode Island Current)
• "RI judge sides with beachfront homeowner in court fight. What does it mean for public beach access?" (The Providence Journal)
• "Initial Court Ruling Tosses Sand on R.I.'s Year-Old Beach Access Law" (ecoRI News)

According to these stories, the State indicates it is going to appeal to the RI Supreme Court, so stay tuned.

Decision, Stilts, LLC v. State of Rhode Island, No. SC-2023-0481 (R.I. Super. July 12, 2024)

New Article - "Sheetz v. County of El Dorado: Legislatures Must Comply with the Takings Clause" (Brian Hodges & Deb La Fetra)

Check this out: our Pacific Legal Foundation colleagues (Brian Hodges and Deborah La Fetra we on our Sheetz SCOTUS team), have posted a new scholarly piece on SSRN, "Sheetz v. County of El Dorado: Legislatures Must Comply with the Takings Clause."

Here's the Abstract:

For more than 30 years, the Supreme Court has recognized that building permit conditions requiring a dedication of property to the public implicate the Fifth Amendment’s Takings Clause and are therefore subject to the unconstitutional conditions doctrine as set out by Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994). But for nearly as long as the Nollan/Dolan doctrine has been in place, state and lower federal courts have divided on the foundational question of whether the doctrine applies equally to all branches of government, or if it applies only to administrative exactions imposed by agencies on an ad hoc basis. See, e.g., California Bldg. Indus. Ass’n v. City of San Jose, 136 S. Ct. 928, 929 (2016) (Thomas, J., concurring in denial of certiorari) (acknowledging a decades-long split of authority); Parking Ass'n of Georgia, Inc. v. City of Atlanta, 515 U.S. 1116, 1117-18 (1995) (recognizing that the split of authority raises an important question of constitutional law).

The United States Supreme Court’s unanimous decision in in Sheetz v. County of El Dorado settled this split of authority by ruling that the unconstitutional conditions doctrine applies to all branches of government, including the legislature. 601 U.S. 267, 280 (2024). Although the holding drew support from the full Court, the opinion drew three concurring opinions commenting on additional questions may need to be determined on remand or in future litigation. Id. at 280-84.

This article reviews the state of the law regarding Nollan/Dolan’s special application of the doctrine of unconstitutional conditions both before and after the Sheetz case and discusses the questions posed by the concurring opinions—i.e., whether an impact fee is an exaction subject to Nollan and Dolan and whether class-based exactions should be held subject to the same heightened scrutiny, “essential nexus” and “rough proportionality” tests as all other exactions. The article then discusses the decision’s implications on other emerging takings issues, including whether sovereign immunity can bar property owners’ recovery of just compensation and the cognizability of judicial takings claims.  

Download the article here.

Highly recommended.

New Cert Petition: Does The Obligation To Provide Just Compensation Waive Sovereign Immunity?

Because the latest takings cert petition is one of ours (our colleagues Dave Breemer and Deb La Fetra are counsel for the petitioner), we won't be commenting all that much on it.

Except to say that this is the latest in a series of cases where the obligation to provide just compensation for takings butts up against a state government's claim that it cannot be sued in federal court unless it agrees to be sued. We wrote up the Seventh Circuit's opinion below here ("Coming And Going: Eleventh Amendment Trumps Fifth Amendment - States Must Consent To Be Sued In Federal Court, Even For Just Compensation")

Here are the Questions Presented:

1. Whether a state’s constitutional obligation to pay just compensation when taking property waives its sovereign immunity from a claim seeking damages for an unconstitutional taking?

2. Whether a property owner may sue state officials in their personal capacity under 42 U.S.C. § 1983 for a violation of the Takings Clause, as the First Circuit holds, or whether such a personal capacity suit is barred, as the Seventh and Sixth Circuits hold?

Dust off your Federal Courts hornbooks and follow along here, or check out the Court's docket.

Petition for Writ of Certiorari, Gerlach v. Rokita, No. 24-21 (U.S July 9, 2024)

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

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

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

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

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

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

That means to stay tuned for more.

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

Join Us July 16, 2024: ALI-CLE's Webcast: "Property Rights and Regulatory Takings at the Supreme Court"

Join us next week with ALI-CLE for "Property Rights and Regulatory Takings at the Supreme Court." We've assembled legal experts including counsel in the Sheetz and DeVillier Supreme Court cases, and a dirt law legal scholar to discuss these important decisions and answer your questions (including "what's next?"):

The 2023-24 Supreme Court term has been another one of significance in the world of property rights. In particular, two unanimous cases directly addressed takings: Sheetz v. County of El Dorado, 601 U.S. __ (2024) (holding that the Fifth Amendment’s takings clause does not distinguish between legislative and administrative land-use permit conditions) and DeVillier v. Texas, 601 U.S. __ (2024) (holding that property owners adversely affected by a flood evacuation barrier should be permitted on remand to pursue their takings clause claims through the cause of action available under Texas law).

To better understand the importance of these decisions as well as other property issues in the Court this year and what these cases mean for your practice, join our experts for this one-hour webcast. The faculty will also explore what these decisions mean for the future, what steps practitioners can take to incorporate these decisions into their practices, and what may be on the horizon.

More information here, including registration. Join us and bring your questions!

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

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

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

The Question Presented:

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

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

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

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

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

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

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

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

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

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

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

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

----------

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

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

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

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

From the Introduction:

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

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

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

...

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

Check it out.

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

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

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

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

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

The questions presented are:

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

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

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

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

The Verified Complaint In Equity: The Declaration Of Independence, v.248

It's not quite "Yes Virginia..." but here is our annual Independence Day missive on the legal angle on the Declaration. This may have special significance as the nation is in the process of reexamining many of our assumptions and history. But though the Founders may have been flawed individuals -- as we all are -- there's really no question about the ideas they captured, and, thankfully, put down on for posterity.

---------------------------------------------------------------------------------------

We know lawyers are easy targets (we enjoy lawyer jokes as much as the next person, i.e., What's the difference between a good lawyer and a great lawyer? A good lawyer knows the law; a great lawyer knows the judge.).

Nonetheless, as we celebrate our independence, we note that author Thomas Jefferson and 23 other of the 56 signers of the Declaration of Independence were lawyers, and that the document was crafted and understood fundamentally as a legal pleading, and is the product of careful legal thinking.

So lawyers can't be all that bad, right?

As convincingly argued by historian Peter Charles Hoffer in his book The Law's Conscience: Equitable Constitutionalism in America (1990), the structure and style of the Declaration follows a form familiar to most modern lawyers: a complaint initiating a lawsuit.

There's the introduction and "whereas" section (why we're doing this); the bill of particulars (28 specific factual charges against George III); the Prayer for Relief (severing the colonies' political bonds to Great Britain); and finally, the verification (John Hancock and others signing and "mutually pledg[ing] to each other our lives, our fortunes and our sacred honor."). And here you thought Rule 11 was a tough standard.

As Professor Hoffer notes, Jefferson was an equity lawyer, and the Declaration advances a familiar equitable breach of trust theory, asserting that George III was a trustee for the colonies and therefore owed them fiduciary duties, and that his failure to protect them from the capriciousness of Parliament -- where the colonists had no representation -- was a breach of the trust for which equity provided the remedy of independence.

However, since equity derived its power from an appeal to the Crown's fairness, it seemed inconsistent for the colonists to seek relief for a breach of the King's fiduciary duties from the King himself. So Jefferson and his drafting team employed the then-still radical legal theory that sovereign equitable power derived from the people, and that the Continental Congress, as representatives of the people, could impose the remedy of independence.

Thus, the Declaration is much more than stirring political prose, and may not have been possible without the work and deep thinking by a bunch of lawyers.

So while you're enjoying the hot dogs, fireworks and sunshine this Fourth of July, please thank a lawyer.

We can happily return to lawyer jokes on July 5th.

It's not quite "Yes Virginia..." but here is our annual Independence Day missive on the legal angle on the Declaration. This may have special significance as the nation is in the process of reexamining many of our assumptions and history. But though the Founders may have been flawed individuals -- as we all are -- there's really no question about the ideas they captured, and, thankfully, put down on for posterity.

---------------------------------------------------------------------------------------

We know lawyers are easy targets (we enjoy lawyer jokes as much as the next person, i.e., What's the difference between a good lawyer and a great lawyer? A good lawyer knows the law; a great lawyer knows the judge.).

Nonetheless, as we celebrate our independence, we note that author Thomas Jefferson and 23 other of the 56 signers of the Declaration of Independence were lawyers, and that the document was crafted and understood fundamentally as a legal pleading, and is the product of careful legal thinking.

So lawyers can't be all that bad, right?

As convincingly argued by historian Peter Charles Hoffer in his book The Law's Conscience: Equitable Constitutionalism in America (1990), the structure and style of the Declaration follows a form familiar to most modern lawyers: a complaint initiating a lawsuit.

There's the introduction and "whereas" section (why we're doing this); the bill of particulars (28 specific factual charges against George III); the Prayer for Relief (severing the colonies' political bonds to Great Britain); and finally, the verification (John Hancock and others signing and "mutually pledg[ing] to each other our lives, our fortunes and our sacred honor."). And here you thought Rule 11 was a tough standard.

As Professor Hoffer notes, Jefferson was an equity lawyer, and the Declaration advances a familiar equitable breach of trust theory, asserting that George III was a trustee for the colonies and therefore owed them fiduciary duties, and that his failure to protect them from the capriciousness of Parliament -- where the colonists had no representation -- was a breach of the trust for which equity provided the remedy of independence.

However, since equity derived its power from an appeal to the Crown's fairness, it seemed inconsistent for the colonists to seek relief for a breach of the King's fiduciary duties from the King himself. So Jefferson and his drafting team employed the then-still radical legal theory that sovereign equitable power derived from the people, and that the Continental Congress, as representatives of the people, could impose the remedy of independence.

Thus, the Declaration is much more than stirring political prose, and may not have been possible without the work and deep thinking by a bunch of lawyers.

So while you're enjoying the hot dogs, fireworks and sunshine this Fourth of July, please thank a lawyer.

We can happily return to lawyer jokes on July 5th.

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

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

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

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

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

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

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

Elections have consequences!

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

And oh yes, bees are still fish in California.

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

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

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

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

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

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

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

La. Const. art. XII, § 10(c).

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

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

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

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

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

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

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

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

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

Slip op. at 18.

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

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

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

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

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

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

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

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

Here's the gravamen of the petition:

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

Slip op. at 2.

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

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

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

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

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

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

Unhappy 45th Birthday, Penn Central

If you know, you know.

Sad birthday wishes to our most un-favorite decision ever, Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978), which turns 45 today.

Time has not treated the opinion well. Practitioners, judges, and legal scholars across the spectrum have called the three-factor Penn Central test for an ad hoc regulatory taking "demanding," "fuzzy," a four-part test, "neither defensible as a matter of theory nor mandated as a matter of precedent," and "problematic" and "mysterious." Courts mess up the basic meaning of the factors, treat what is supposed to be a fact-centric "ad hoc" test as a legal question decided on the pleadings, and gatekeep most of these cases from juries.

The definitive deconstruction of the case was Professor Gideon Kanner's "Making Laws and Sausages: A Quarter-Century Retrospective of Penn Central Transportation Co. v. City of New York," 13 Wm. & Mary Bill Rts. J. 679 (2005). A must-read for anyone who plays in the Penn Central sandbox. 

If you want to be a part of rethinking Penn Central, listen to this episode of Clint Schumacher's Eminent Domain Podcast with our colleague Jon Houghton ("Jon Houghton and His Penn Central Quest"), or early-bird register for the 2025 ALI-CLE Eminent Domain and Land Valuation Litigation Conference in San Diego (Jan. 30-Feb 1, 2025), where we will be putting on a presentation about alternative regulatory takings tests. Penn Central is not written in amber.

But until something better comes along, let's wish Penn Central an Un-Happy Birthday.

Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978)

Argument Preview: Is Gov't Imposed "Church Purposes" Deed Restriction Void?

Today at 10am Hawaii Time (1pm PT/4pm ET), the Hawaii Supreme Court will hear oral arguments in a case asking whether a 1922 deed restriction imposed by the Territory of Hawaii on a land patent conveying fee simple title to a private owner, subject to the land always being used for "church purposes" (i.e., a fee simple determinable) void under either the Hawaii Constitution's Establishment Clause, the U.S. Constitution's Establishment Clause, or a Hawaii statute declaring that "[e]very provision in ... a written instrument relating to real property that purports to forbid or restrict the conveyance ... to individuals because of .. religion" is void? 

Here's how the Judiciary's web site describes the case:

In 1922, the Territory of Hawai‘i sold property to Heber J. Grant, trustee for the Church of Jesus Christ of Latter-Day Saints, pursuant to a Land Patent.  The Land Patent contained a restriction requiring the property be used “for Church purposes only” and a reversionary interest to the Territory if the property is “used for other than Church purposes” (Deed Restriction).

Plaintiffs-Appellants Hilo Bay Marina, LLC and Keaukaha Ministry LLC (Petitioners) are the current owners of the property.  Petitioners sued Defendants-Appellees State of Hawai‘i and Board of Land and Natural Resources, State of Hawai‘i (State) in the Circuit Court of the Third Circuit (Circuit Court) asserting the Deed Restriction is void under Hawai‘i Revised Statutes (HRS) § 515-6(b), it violates article I, section 4 and article VII, section 4 of the Hawai‘i Constitution, and it violates the Establishment Clause of the First Amendment to the United States Constitution.

The parties filed cross-motions for summary judgment and the Circuit Court granted summary judgment for the State.  Petitioners appealed and the appeal was transferred to this Court.

Petitioners assert the Circuit Court erred by concluding:

(1) The practice of selling government lands with deed restrictions was an early form of use-zoning and is interpreted as a historical practice of zoning;

(2) HRS § 515-6(b) does not void the deed restriction;

(3) the deed restriction does not violate article I, section 4 of the Hawai‘i Constitution for the same reasons that it does not violate the Establishment Clause of the First Amendment to the United States Constitution, and even if article I, section 4 of the Hawai‘i Constitution is not coextensive with the Establishment Clause in the United States Constitution, the deed restriction passes constitutional muster under Lemon v. Kurtzman, 403 U.S. 602 (1971);[**] and

(4) the deed restriction does not violate the Establishment Clause in the United States Constitution. 

[**Hawaii still applies the Lemon test for establishment cases under the Hawaii Constitution.]

Here are the briefs (a reminder that this case was fast-tracked to the Supreme Court by transfer from the court of appeals, so the Opening and Answering Briefs were filed in the appeals court before transfer, while the Reply was filed after, and thus has a slightly different caption:

• Property owner's Opening Brief
• State of Hawaii's Answering Brief
• Property owner's Reply Brief

The case is worth following. Check it out.

Hawaii: Permit Conditions Not Subject To Nollan/Dolan When There's No Taking Claim

A short one (for us takings types) from the Hawaii Supreme Court.

In In re Surface Water Use Permit Applications, No. SCOT-21-0000581 (June 20, 2024), the court considered a challenge to the State of Hawaii Commission on Water Resource Management's authority to impose conditions on a water permit. The applicant asserted that the nexus and proportionality requirements of Nollan and Dolan must have been complied with.

No, the court concluded, those standards only apply where there's a takings claim present. And there's no takings claims here:

WWC relies on Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994), to argue that any conditions the Commission attaches to its SWUP for system losses must relate to those losses. WWC attempts to frame Nollan and Dolan as providing a “clear statement of the unconstitutional conditions doctrine,” but fails to specify which constitutional provisions the conditions violate and of which constitution. Nollan and Dolan specifically apply to takings claims. WWC is not asserting a taking. Thus, WWC’s reliance on them necessarily fails.

Of course, the Commission cannot condition SWUPs on anything it wishes; as WWC states, those conditions must relate to the Commission’s jurisdictional powers. That is the applicable limit on the Commission’s powers – not Nollan and Dolan. And as explained above, the conditions here are within the Commission’s broad jurisdictional powers to implement and administer all aspects of the Water Code.

Slip op. at 129-130 (footnotes omitted).

How can we call a 134-page opinion "short?" Well, the good stuff is only at the tail end, and only a couple of pages long, and was just one sidebar issue in a whole panoply of arguments.

What about the rest of it? No surprises there: like many Hawaii Supreme Court opinions on water rights and the public trust, it is is gargantuan, detailed, and the Commission fares no better in this case than it does in practically every other case it is involved in in this court (it loses).

Unless you fancy yourself a 808 water rights maven, you can skip all but the good stuff.

In re Surface Water Use Permit Applications, SCOT-21-0000581 (Haw. June 20, 2024)

Statutory Fee Recovery In Minnesota Condemnations Not Limited By Contingency Fee Agreement

This is a short one, and the title of this post pretty much sums up the Minnesota Supreme Court's opinion in State of Minnesota v. Schaffer, No. A23-0036 (June 20, 2024).

The case addressed a frequently-occurring issue in jurisdictions which permit some kind of fee recovery in eminent domain cases. Where a statute permits a property owner to recover "reasonable" attorney fees, how is the recovery calculated? By the usual "lodestar" formula (reasonable time x reasonable fee), or is it limited by the actual contractual arrangement between the property owner and her lawyer (in this case a contingency fee that resulted in a fee less than a lodestar-determined fee). 

The court held rejected MDOT's argument fee recovery under the statute "cannot exceed the amount owed to the landowner's attorney in a contingency fee agreement[.]" Slip op. at 2. The court held:

We reiterate what we held in Cameron: the phrase “reasonable attorney fees” in section 117.031(a) refers to attorney fees calculated by the lodestar method, and thus we hold an award of reasonable attorney fees is not capped by a contingent fee agreement.

Slip op. at 3.

"Reasonable" means objectively reasonable, and not whatever the owner worked out with his or her lawyer, and is not limited to reimbursement of fees actually incurred or obligated to pay. The fee actually agreed to may be one of the factors a court may consider, but "it is to be just one factor." Slip op. at 7.

State of Minnesota v. Schaffer, No. A23-0036 (Minn. June 20, 2024)

Can The California Coastal Commission Be Reined In?

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

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

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

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

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

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

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

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

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

The report makes some modest recommendations for reform:

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

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

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

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

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

Juneteenth Reminder: Emancipation Had Its Roots In The Property-Based "Contraband" Legal Theory

Today is a good day to remember that legal emancipation had its roots in the "contraband" property theory. Here's a post from a few years ago where we visited what we called "The Birthplace of a More Perfect Union" (Fort Monroe, Virginia).

The contraband property theory was itself very imperfect, and a compromise theory driven by practicality and politics. But it was a legal theory that laid the foundation for a general acceptance of emancipation, and led inexorably to the Emancipation Proclamation, and the Thirteenth, Fourteenth, and Fifteenth Amendments. 

A good reminder that property law and property rights are not primarily about land, or dirt, or "development," but about freedom and human rights.

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

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

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

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

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

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

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

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

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

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

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

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

Vermont: Environmental Court Doesn't Have Jurisdiction To Determine Property Rights, But We're Going To Find No Cedar Point Taking Anyway

DJK was adding a bedroom to an existing residence and needed a wastewater permit from Vermont's environmental agency. The agency has a "presumptive isolation zone" around potable water supplies and septic systems in which a property owner is presumed to be barred from doing anything sewage related. In this case, the isolation zone for DJK's property crossed over onto the property of their neighbors, the Crowleys.

The agency granted DJK the permit, which contained a provision that not only no sewage-related construction could take place in the isolation zone, but that "[n]o buildings" could be construction which "might interfere with the operation of a wastewater system or potable water supply[.]" Remember, the isolation zone was located partially on the Crowley property.

The Crowleys were not very appreciative, so appealed (to a Vermont trial court sitting as the Environmental court). They argued that the permit was invalid because it worked a taking of their land, imposed an unconstitutional condition, and they had not received notice and an opportunity to be heard before the permit was issued.

The Environmental court granted the agency summary judgment, concluding the court lacked jurisdiction over what it called the "property-related issues and rights." But the court continued and considered if the permit imposed an uncompensated taking ("The court did consider if 'the Rules, as applied to [neighbors] by way of the Permit, amount[ed] to a taking due to the State’s placement of potential development limitations on their propert[y].'"). We're not all that clear on the distinction being drawn and how a court without jurisdiction can make a ruling on the substance of the claim, but there it is. The court concluded the permit did not impose a physical invasion taking, and the Crowleys got all the process they were due.

In In re DJK, LLC, No. 22-AP-269 (June 14, 2024), the Vermont Supreme Court affirmed. The court rejected the Crowleys' assertion that the case "involves the legality of permit conditions," which would mean that the Environmental court had jurisdiction under the Vermont statute which grants jurisdiction over such claims. Slip op. at 10.

Not so, held the court, "[t]he fact that the Environmental Division [of the trial court] has authority to consider permit appeals does not authorize it to adjudicate private property disputes, such as the existence of easements. The civil division, not the Environmental Division, has jurisdiction over such matters." Slip op. at 11. This is a "private property dispute," slip op. at 12, and thus no jurisdiction. Slip op. at 14 ("Neighbors offer no persuasive authority in support of their assertion that the Environmental Division had jurisdiction to determine if the permit created an easement in their property and we reject their first claim of error.").

Well, okay then. End of this story, no? If the Environmental division doesn't have jurisdiction but the civil division does, the Crowleys can go file their constitutional claims there, right? You might think a "no jurisdiction" conclusion would mean that any rulings by the Environmental division would be ultra vires, yes? Or maybe not:

¶ 35. As referenced above, the Environmental Division did consider if the permit condition effected a taking under the analysis in Cedar Point Nursery, that is, whether the regulation authorized a physical invasion of their property. This was consistent with its authority to consider “property-related issues and rights . . . within the scope of the regulations governing the permit application.”

Slip op. at 14-15.

Wait, what? To get to this conclusion, the Supreme Court had to make a very nuanced distinction: the Environmental court didn't have jurisdiction to consider the constitutionality of the agency's actions, but nonetheless could reach the conclusion that the permit did not impose a physical invasion taking, and this is consistent with its jurisdiction to consider property issues "within the scope of the regulations governing the permit application." See slip op. at 15 ("¶ 37. Neighbors fail to show that the court erred in finding the absence of any physical invasion here.").

There might have been an easement created by the isolation zone (and that is a matter beyond the jurisdiction of the Environmental court), but the court concluded that there hasn't yet been an "actual physical invasion" of the Crowley's property. Slip op. at 16. 

If you can figure this one out in a way that makes sense, please let us know.

In re DJK, LLC, No. 22-AP-269 (Vt. June 14, 2024)

King John: Sure, I'll Affix My Seal To This Charter...What Could Go Wrong?

Our annual reminder that 809 years ago tomorrow (June 15), the "great charter" (Magna Carta) was executed at Runnymeade. (And yes, we know that due to the change in calendars in the interim it wasn't necessarily this very day, and also that King John didn't sign the document, but rather sealed several copies of it.)

We naturally focus on Article XXVIII as the foundation for the limitations on the sovereign's power to forcibly acquire private property, but let's not forget the other bits as well.

So Happy Birthday, Magna Carta! You don't look a day over 800.

Register Now! ALI-CLE Webinar "Property Rights and Regulatory Takings at the Supreme Court" (With Counsel For Sheetz & Devillier) - July 16, 2024

Mark your calendars and register now for the upcoming American Law Institute-CLE webinar "Property Rights and Regulatory Takings at the Supreme Court." The focus of this program is a summary and analysis (including "what's next?") of the two big property and eminent domain cases decided by the U.S. Supreme Court, Sheetz (exactions), and Devillier (just compensation remedy).

We've brought together counsel for the property owners in the cases, as well as a legal scholar to provide an academic view of the cases and issues.

The faculty:

• Larry Salzman - Vice President for Litigation, Policy & Research, Pacific Legal Foundation
• Robert McNamara - Deputy Litigation Director, Institute for Justice
• Professor Elizabeth Elia - University of New Mexico School of Law

Details:

• Date: July 16, 2024
• Time: 12n - 1pm Eastern Time
• Format: webinar, with audience questions
• CLE credits: ALI-CLE programs are approved for CLE credits in most jurisdictions

Come join us!

More details including registration information here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here's the Question Presented:

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

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

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

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

Stay tuned for more.

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

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

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

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

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

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

Be sure to check it out.

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

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

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

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

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

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

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

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

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

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

Id.

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

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

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

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

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

Slip op. at 17-18. 

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

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

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

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

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

Be sure to check it out.

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

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