inversecondemnation.com

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)

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.

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)

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)

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: "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.

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)

Unpublished Wednesday: Eviction Moratorium Taking, Excessive Fines Taking, And 1983 Zoning Statutes Of Limitations

Here are three federal circuit opinions, all unpublished.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

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

Check 'em out.

ND: "Minimally Invasive" Precondemnation Entries Are Not Unconstitutional

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

In SCS Carbon Transport LLC v. Malloy, No. 20230149 (May 30, 2024), the North Dakota Supreme Court held that that's state's statute which allows prospective condemnors to enter land to conduct surveys and the like before instituting eminent domain without liability is not unconstitutional, either on its face or as applied to SCS's entries.

SCS is building a CO² pipeline and decided it needed an interest in Malloy's land. It asked if could enter to take a survey, but Malloy said no. So SCS sued, asserting its power under the statute, asserting it was planning on restoring the property to its "pre-examination" condition, and it was willing to pay compensation for any damage it caused:

In all cases when land is required for public use, the person or corporation, or the person's or corporation's agents, in charge of such use may survey and locate the same, but it must be located in the manner which will be compatible with the greatest public benefit and the least private injury and subject to the provisions of section 32-15-21. Whoever is in charge of such public use may enter upon the land and make examinations, surveys, and maps thereof, and such entry constitutes no claim for relief in favor of the owner of the land except for injuries resulting from negligence, wantonness, or malice.

N.D. Cent. Code § 32-15-06. (North Dakota's statute is fairly typical of these things.)

Malloy counterclaimed, arguing the statute was unconstitutional under both the N.D. and U.S. constitutions, and sought an order prohibiting entry. The trial court granted SCS summary judgment, and the case went directly to the N.D. Supreme Court.

The court first rejected the owner's argument that the trial court's order, which did not set any limits on the "nature, extent, or duration" of SCS's entries resulted in a taking. (A judicial taking.) The court concluded that the statute does not require a court to impose any such limitations or restrictions. By incorporating the terms of the statute, the trial court's judgment did enough. While the Supreme Court recognized that trial courts have discretion to impose restrictions and conditions on entry, they are not required to. "The plain text of the statute does not describe any restrictions or conditions the court may or must consider." Slip op. at 6. Thus, the trial court's order conformed to the statutory requirements.

Next, the court concluded this was not unconstitutional, either on the face of the statute, or as applied here. Yes, Cedar Point did conclude that even relatively unintrusive physical invasions under color of state law are takings requiring compensation, but the Court there also noted that the power of prospective condemnors to enter property for pre-takings surveys and examinations is a longstanding traditional limitation on North Dakota property owner's right to exclude:

Despite the significant textual differences between the state and federal constitutional provisions, in this case the constitutional question under each turns on essentially the same legal-historical question: did the people of North Dakota in 1889 understand the eminent domain power to take private property for public use to encompass a right of entry for pre-condemnation examinations and surveys? If yes, then the original public meaning of the 1889 constitution, continued in effect through today in relevant part, does not conflict with the entry statute. Under the Fifth Amendment, answering the same question in the affirmative would establish a longstanding background principle that property rights under state law do not include the right to bar entry to pre-condemnation surveyors.

Slip op. at 9. 

The court noted that the power to enter property has been a part of N.D.'s statutory scheme for a century-plus, and that "[t]his longstanding statutory authority is consistent with the common law and the law of other states." Slip op. at 9. Even Judge Cooley recognized this limitation. See slip op. at 10. Thus, a potential condemnor's ability to enter property is a "longstanding background restriction" on an owner's unfettered rights.

The court noted that this power is not unlimited, and that the text of the statute requires that entries be undertaken with "the greatest public benefit and the least private injury," and that the statute must be interpreted to allow "limited to the innocuous surveys and examinations consistent with these historical background principles[.]" Slip op. at 11.

In other words, condemnors, don't take this opinion as carte blanche to come in any time for and do stuff that is more than "innocuous" -

A condemnor’s entry or occupation beyond this mission implicates constitutionally protected property rights. If the entry exceeds the duration or scope reasonably necessary to complete any necessary “examinations, surveys, and maps,” a temporary taking of the right to exclude may be implicated and a judicial remedy may be sought.

Id.

By analogy to traffic stops in Fourth Amenment cases, the court concluded that entries must not extend longer than the time required to fulfill the purpose of the entry: "A constitutionally permissible entry may not be longer or more invasive than necessary to complete the examination or survey need to confirm and minimize the scope of the anticipated taking of private property." Id.

While it would be easy to be seduced by what appears to be a logical standard, we have to take pause because we find it hard to see this other than some kind of "please act in good faith, condemnors" standard. First, the entire purpose of precondemnation entries are to determine if the property might be suitable for the purpose of the anticipated taking. It seems like it would be difficult to not interpret that broadly. Can a big project be studied via "innocuous" entries? How are there any judicially-manageable standards to police the limits of this? Hard to see any. Second, unless the potential condemnor is cowboying it and not acting in good faith, won't most entries be somewhat tailored to the scope of what is necessary by the potential condemnor?

We guess we should be thankful that the court left the door open to property owners having a claim in some situations. We're just not certain what those situations might look like. 

Other courts have reached similar results (generally ok with entries, provided they are not "too invasive"). Let's see what develops elsewhere.

SCS Carbon Transport LLC v. Malloy, No. 20230149 (N.D. May 30, 2024)

Oregon: Statute Of Limitations On Physical Inverse Claim Runs From The Occupation, Even If It Was Permissive

Before we go on, a disclosure: this is one of ours (we filed an amicus brief in support of the property owners).

In Walton v. Newkowin Regional Sanitary Authority, No. S069004 (May 23, 2024), the Oregon Supreme Court held that the six-year state statute of limitations applicable to physical invasion inverse condemnation claims (under both the Oregon and U.S. Constitutions) begins to run at the time of the invasion, and not when subsequent events show that the invasion was adverse to the owner's property rights. 

This case went up the appeals chain after the trial court granted the Authority's motion for summary judgment. The background of the case is that back in the day (1995, although some of us actually remember that far back), the Authority installed two sewer lines on land belonging to the plaintiffs' father. This was done without the owner's permission. Slip op. at 3. 

But three years later, the Authority entered into an agreement with the plaintiffs' father under which the Authority was granted an easement, provided that if the Authority ever required the landowner to connect to the sewer system, the owner could do so for free. "But [the Authority] 'never prepared an easement document' and 'never recorded an easement.'" Id. 

Flash forward to 2014. By now, father was no longer the owner, and the kids had it. The Authority informed them that their septic system had failed and "they needed to connect to the sewer system." Id. No sweat they thought, the Authority agreed with dad that if required, it would be a free hook up. Well you guessed it, after the kids asked the Authority, it said no. Slip op. at 4.

Next stop (2017): an Oregon trial court on state and federal inverse claims (the kids did not assert a breach of contract claim). They alleged that the Authority installed the sewer lines without acquiring an easement by agreement or by eminent domain, and sought just compensation. What about the fact that the physical invasion was in 1995, well beyond any statute of limitations? The kids asserted that a state statute cannot limit the right to seek compensation for a taking. "In other words, plaintiffs asserted that their claim could not be subject to a statute of limitations." Slip op. at 5.

The Authority responded by agreeing that it installed its sewer lines in 1995 without the owner's permission, but denied that it ever agreed with father for a free hook up if later required. And if there was an oral agreement, it wasn't in writing so therefore could not be enforced (statute of frauds). And yeah, the inverse claim was subject to Oregon's six-year statute of limitations for "waste or trespass upon or for interference with or injury to any interest of another in real property," and the SOL long ago ran, with the lawsuit window opening when the Authority installed the sewage lines in 1995. Slip op. at 6. It sought, and the trial court granted, a motion for summary judgment "on the ground that plaintiffs' inverse condemnation claim was untimely." Id. The court of appeals affirmed. 

After some background on inverse condemnation doctrine (both Oregon and federal - see pages 9-17), the court noted this is a physical and not a regulatory takings claim. It reviewed and rejected each of the kids' arguments that the six-year SOL did not stand in the way of the 2017 complaint.

First, the court rejected the argument that just compensation claims generally are beyond the reach of a legislature's ability to place a time limit on them. Yes, it is a constitutional obligation to provide just compensation when property is taken, but the U.S. Supreme Court and other state courts have at least implicitly applied legislative time limits to compensation claims. See slip op. at 18. Statutes of limitations are part of the "processes for obtaining such compensation," and must be complied with. Slip op. at 21.

Second, the court rejected the argument that physical takings claims cannot be subject to time limits. Nope, these are just a subspecies of just comp claims noted above.

Third, the court rejected the argument that the trigger for the statute beginning to run is not the physical occupation, but when the government refuses to provide compensation. The kids argued that merely taking property is not unconstitutional, and as the U.S. Supreme Court has emphasized, the bad act is the failure to provide just compensation. If that's so, the statute didn't begin to run until the Authority denied that it owed anything, which didn't occur until 2014. Not so, held the court. The SOL starts to run when the aggrieved party can sue on it (noting that federal law puts it as when the cause of action is complete and present). Slip op. at 26. And owners can bring inverse claims "when the physical occupation occurs." Id. The court differentiated between Oregon law (which says that it is ok to take and not pay, as long as there's a subsequent process available for the owner to obtain compensation), and federal law says the same thing (but in a different way). 

The court rejected the kids' argument that Knick suggests otherwise, concluding that the U.S. Supreme Court has concluded that owners can't stop takings merely because compensation isn't provided contemporaneously. "Therefore, the Court continued, as long as post-taking compensation is available, prospectively preventing the government from committing the violation in the first place is unwarranted." Slip op. at 30 (citing Knick, 588 U.S. at 202). Compensation is a remedy for a taking, not a condition precedent.

Having rejected each of the owner's arguments, the court had little difficulty holding that the statute started to run when the Authority placed its sewer lines in 1995. That's when "plaintiffs' father could have initiated a takings claim." Slip op. at 34.

But what about that (alleged) oral agreement that father said he entered into with the Authority? Even assuming there was such an agreement, it only mattered if the agreement "somehow tolled the running of the limitations period." Id. But, the court concluded, "the plaintiffs have not made a tolling argument." Id. Moreover, even if there were such an agreement for a free hook up, the occupation by the Authority was permissive, and the remedy for the Authority breaching the agreement is in contract, not takings. Slip op. at 36 ("The [owner's] concern related to the breach of an agreement; it was not a claim that his property had been taken without his consent. Consequently, he needed to bring a contract or quasi-contract claim, not an inverse condemnation claim.").

We'll wrap this post up with this, from our amicus brief:

The Court of Appeals’ categorical rule has resulted in an absurdity: the only timely physical takings claim the Waltons could have asserted must have been filed at a time when they believed the Authority’s sewer line was on their property with their permission. They obviously did not know at that time that, decades later, the Authority would assert that the free hook-up agreement never existed. The Court of Appeals’ rule would require the Waltons to have brought their physical invasion takings claim in the early 2000’s, long before they even sought to connect to the Authority’s sewer line.

As we've noted previously, statutes of limitations cases can be difficult if not impossible to navigate for property owners. First, if an owner doesn't sue early and often, she is subject to government claims that she waited too long. But if the owner sues at what appears to be the first opportunity, she is very frequently met with government's claim that it is too early to sue because the claim isn't fully developed yet (ripeness). In some cases, the government actually argues that the lawsuit is both too early and too late. And courts eager to get rid of these cases are mostly just fine with it. 

Walton v. Neskowin Regional Sanitary Authority, No. S069004 (Or. May 23, 2024)

We Heard You, Justice Thomas: NY Property Owners File New Takings Cert Petition Challenging Rent Control

As we noted here ("SCOTUS Denies Review To Remaining Rent Control Takings Petitions: "Important and pressing question" (Just Not In This Case)"), a small silver lining in the Court declining review was the statement of Justice Thomas accompanying the denial, where he noted the issue is an "important question," and set out a rough roadmap to future challenges.

Here's a cert petition which asserts this is the case to take up the issue. Here's the Question Presented:

New York’s Housing Stability and Tenant Protection Act of 2019 transforms a temporary rent- regulation system into a permanent expropriation of vast swaths of private real estate, without just compensation, in the name of “affordable housing.” Among other things, the Act prohibits owners—even of small and midsized apartment buildings like Petitioners—from reclaiming rental units for their own personal use, and grants tenants a collective veto right over condo/co-op conversions. As Justice Thomas has observed, the constitutionality of regimes like New York’s is “an important and pressing question” that has divided the courts of appeals and should be addressed in “an appropriate future case.” 74 Pinehurst LLC v. New York, 2024 WL 674658, at *1 (U.S. Feb. 20, 2024) (statement respecting denials of certiorari). Although case-specific vehicle concerns may have dissuaded the Court from granting other recent petitions that sought to challenge the constitutionality of rent-control regimes in general, this case is based on a substantially different record, targeting only a specific set of amendments to New York’s regulatory regime, and thus provides an ideal vehicle for this Court’s review.

The questions presented are:

1. Whether New York’s rent-regulation laws, and in particular its new restrictions on owner reclamation and condo/co-op conversions, effect physical takings.

2. Whether this Court should overrule Penn Central or at least clarify the standards for determining when a regulatory taking occurs.

Here's the unpublished Second Circuit decision.

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

Petition for Writ of Certiorari, G-Max Mgmt, Inc. v. State of New York, No. 23-1148 (U.S. Apr. 18, 2024)

Lawprof Ilya Somin: "Squatters' Rights Laws Violate the Takings Clause"

Check this out: lawprof Ilya Somin has posted "Squatters' Rights Laws Violate the Takings Clause" at Volokh.

His thesis is just as the title suggests, arguing that state statutes that treat trespassers as tenants are government-authorized physical occupations, and thus are takings:

Ideally, state and local governments should make it easy for property owners to swiftly remove squatters, and should subject the trespassers to civil and criminal sanctions. But where they instead facilitate this violation of property rights, the laws that do so violate the Takings Clause of the Fifth Amendment, which requires payment of "just compensation" whenever the government takes "private property."

Professor Somin relies on Cedar Point, and addresses the narrow exception to the general rule from that case that all physical invasions and occupations are takings without regard to the diminution in use or value or the owner's expectations, where the government had enabled the same access as does the "traditional common law."

The common law knows about adverse possession, he writes, where a trespasser may gain a property right, but only after meeting fairly rigorous legal tests, where the owner has actual notice of the possession and its adversity to her property rights. These squatter statutes go much further, because they force property owners unwillingly to become lessors.

In other cases where the courts have upheld regulations and restrictions on an owner's right to recover possession from an actual tenant -- you know, someone with whom the owner actually and expressly agreed, and then transferred the right to exclude to the tenant -- the courts frequently note that "no one is forcing you to become a landlord."

Well here, the owner is being forced to become a landlord.

Professor Somin wraps by noting, "I hope property owners and public interest law firms give serious consideration to bringing takings challenges against these laws. They are not a panacea for the problem. But they could help."

Since we are part of a non-profit, pro bono, public interest law firm as the good professor describes, we shall note here that the welcome mat is out, and if the above-situation is your situation, let us know.

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

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

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

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

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

Excitement this way...

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

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

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

Here's more. 

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

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

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

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


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


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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here's the entire thing:

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

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

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

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

But here's how we're taking it.

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

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

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

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

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

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

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

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

Don't miss out!

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

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

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

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

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

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

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

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

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

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

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

Texas Flooded Devillier's Property

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

Removed! Texas Avoided Its Own Courts

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

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

Fifth Circuit: No Cause of Action For Compensation

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

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

The Question Presented

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

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

So what should we be looking for on Tuesday morning?

Calder, Barron, and Sovereignty

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

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

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

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

Id. at 388.

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

What Else to Look For on Tuesday

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

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

What's Not at Issue

Here are some issues we think are not presented:

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

See you on Tuesday!

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

2023 Year-End Clean Up

As 2023 comes to a close, here are a few of the decisions that we wanted to blog about, but didn't have the time.

• Bruce v. Ogden City Corp., No. 22-4114 (10th Cir. Dec. 1, 2023): city demolishing a building that was damaged by fire was not a Lucas taking because the owner still has use of the land (even though the building is gone). And no Penn Central taking because... Penn Central.
  
• Moriarity v. Indiana, No. 22A-PL-2899 (Ind. Ct. App. Nov. 15, 2023): State ordering removal of illegal dam was not a taking under U.S. or Indiana Constitution. The owners don't have a property right to build an illegal dam. Thus, the "background principles" exception to Lucas rules the day. And no Penn Central taking because the owners never had any investment-backed expectations they could build this dam.
• Lafayette Bollinger Dev., LLC v. Town of Moraga, No. A163636 (Cal. Ct. App. July 19, 2023): No Penn Central taking because city might have allowed a smaller project.
  
• Estancias de Cerro Mar, Inc. v. Puerto Rico Aqueduct and Sewer Auth., No. 20-1644 (D.P.R. Nov. 17, 2023): the complaint plausibly alleged a categorical regulatory taking, and did not need to be pleaded under Penn Central. The complaint alleged that the plaintiff possessed a private property interest, and that the Authority's actions took that interest.
• Moskovic v. City of New Buffalo, No. 23-1165 (6th Cir. Dec. 14, 2023): city's moratorium on short-term vacation rental permits, and eventual permanent ban was not a taking or a deprivation of substantive due process because property owners have no protected interest under Michigan law in renting their properties. 
• First Floor Living LLC v. City of Cleveland, No. 22-3216 (6th Cir. Sep. 28, 2023): even though the plaintiff purchased the property to rehabilitate and redevelop it, the city declared them public nuisances and ordered their destruction. The district court correctly entered summary judgment in the city's favor on the plaintiff's due process claim because the owner received sufficient notice.
• 835 Hinesburg Road, LLC v. City of South Burlington, No. 23-218 (2d Cir. Nov. 8, 2023): takings claim not ripe when city applied restrictions that it intended to adopt and denied owner's preliminary development application [disclosure: this case is one of ours].
• In re City of New York (Coney Island Plan - Stage I), No. 517650/2016 (Kings County, N.Y. Nov. 1, 2023): compensation for city's taking of mostly-vacant land to be measured by the "three unities" test. The zoning in place at the time of the taking was part of "the project," so the pre project zoning is used to measure the value of the taking.

On to 2024!

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

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

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

Check em out.

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

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

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

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

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

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

Slip op. at 15.

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

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

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

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

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

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

Stream it above, or listen on Spotify here.

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

Some Precondemnation Entries Are Takings Requiring An Up-Front Condemnation And Compensation

We don't often post trial court orders -- especially state trial court orders -- but read on and you will understand why we made an exception here. Our thanks to an Oregon colleague for sending it our way.

Today's case involves a pretty typical situation -- a condemnor (or, "condemner" -- for it is in Oregon that our scene lies) is contemplating taking property from someone, and wants and needs to figure out whether the property it is contemplating is suitable. It needs to get on site and 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 -- as is her right -- says no. In those cases, Oregon (as many states do) has a statute. In our case, Or. Rev. Stat. § 35.220, which paraphrased says, that a condemner may enter private property to conduct tests, take samples and the like, as long as the owner is provided notice. If an owner objects, the condemner may seek a court order "providing for entry upon the property and allowing such examination, survey, testing or sampling as may be requested by the condemner."

Importantly, the statute also says that the owner is entitled to reasonable compensation for "[a]ny physical damage" resulting from the entry, and "[a]ny substantial interference with the property's possession or use" that is caused by the survey, entry, &c. 

Now that we've laid the foundation, here's how it played out in Idaho Power Co. v. Bean.

Idaho Power wants to run part of a transmission line over Bean's property in rural Oregon. It will need an easement. But it also needs to conduct studies. As the court notes:

Petitioner must ensure that the project's path complies with permitting and siting requirements, including that it does not conflict with any protected resources. To ensure compliance, Petitioner must conduct surveys. tests, and samples on Respondents' property. These include three-toed woodpecker and northern goshawk surveys, rare plant inspection, gray owl and flammulated owl surveys, wetlands inspection, terrestrial visual encounter surveys, noxious weeds surveys, cultural resource surveys, enhanced archeological surveys, and historic properties management plan surveys, geotechnical drilling, land surveys, and an appraisal field visit.

...

Although Petitioner cannot say with certainty how many entries will be required for it to accomplish these various surveys, tests and samplings (Tr. 136-160), all totaled, it appears they may amount to as many as thirty-two visits onto the property. Exhibit 2. The visits will primarily involve driving pick-up trucks and sometimes a trailer onto the property with crews of anywhere from one to five persons. Id. Four of the entries will involve some ground disturbance. Id. Two to five entries would be with "pickup trucks and trailer" Tr. 147. The geotechnical drilling will involve a "small track vehicle," Id. The "small track vehicle" is "probably larger than a F-350, but it's not quite as big as a large excavator." ld. The geotechnical drilling involves a "drilling crew" drilling "boreholes" approximately 6 to 8 inches in diameter. Exhibit 2, p. 4. The holes will be backfilled. Id. Petitioner acknowledges each entry will cause some interruption to the landowner.

Slip op. at 3-4.

The property owner said no. Next stop, a trial court in Union County, where the power company sought an order to show cause why it should not be allowed entry under section 35.220.

The owner made two arguments in opposition. First, it asserted it was entitled to compensation before the entries, and not after. Second, it argued the entries are takings under both the Oregon and U.S. Constitutions.

In this order, the court agreed that the statute permits the power company to enter the property against the will of the owner, as long as it provided notice (check). The owner is entitled to "reasonable compensation" for physical damage or substantial interference with possession or use. There's no statutory definition of those terms, but the court used the ordinary meaning, and concluded that the entry "must cause actual harm to the land, crops or structures" on the property," or cause a "hampering of their quiet enjoyment of their property and/or their ability to produce an income from their property." Slip op. at 6.The entries seem to qualify.

So what about that compensation? The owners asserted they are entitled to up front compensation "in advance of Petitioner's entry." Slip op. at 7. Here, the court was presented with a problem: it concluded the statute only allows for post-hoc compensation because of the mechanics. Compensation is based on evidence of physical damage or substantial interference, and such evidence doesn't exist until the condemner makes its entries. "That is a high bar. With the pre-condemnation entries contemplated here it would be very difficult to prove before the entry how the property would be physically damaged." Id.

But the conclusion that the owners cannot get reasonable pre-entry compensation "does not end the inquiry, however." Slip op. at 8. This takes us to the second argument, that the entries permitted by the statute are takings under the constitution(s), and thus require just compensation.

We won't go into the details, but suggest you read the order starting at page 8. Not a lot there that's terribly surprising, and takings mavens will recognize the key citations to the right to exclude being essential such as Cedar Point, and the notion that it doesn't take much of an interference to be deemed a taking of that "essential" property stick.

Oregon courts have long held that "any destruction, restriction or interruption of the common and necessary use and enjoyment of the property of a person for public purpose constitutes a 'taking' thereof." Morrision v. Clackamas County, 141 Or 564, 568 (1933). To the extent that ORS 35.220 allows a condemner to enter onto one's property to conduct examinations, surveys, tests, and samples of t he property without the consent of the owner and without just compensation, it is unconstitutional Such action a mounts to a taking, under Article I, section 18 of the Oregon Constitution. This is because it deprives the property owner of that most essential  property right: the right to exclude others from one's property. In order to comply with the Oregon Constitution, the condemner must pay "just compensation" before the pre-condemnation entry onto private property.

Slip op. at 9.

Yes, the statute says an owner is entitled to reasonable compensation for these invasions if it causes physical damage or substantial interference. "However, the Oregon Constitution does not set such a high bar before the property owner may receive 'just compensation.'" Id.

But not all entries are takings. As Cedar Point noted, some government-authorized invasions are not takings "because they are consistent with longstanding background restrictions of property rights." Slip op. at 10. Even the property owner here agreed that some of the entries were not takings. Thus, some of the desired entries here qualify (while some do not). Land surveys are ok, as well as "an appraisal field visit." Id.

But for those entries that go beyond that, compensation is due. Just compensation, that is, for appropriating "a right of access to the Respondents' property."

By doing so the statute allows the condemner (Petitioner) to enter Respondents' property, without Respondents' consent, to examine, survey, test, and sample Respondents' property. The statute appropriates a right to physically invade the Respondents' property to conduct the various examinations, surveys, tests, and samples. Under Supreme Court precedent, this is a per se physical taking, which under the Fifth Amendment requires "just compensation." Cedar Point Nursery, 141 S,Ct. at 2074. In conclusion, Petitioner may not enter Respondents' property to conduct the surveys, tests and samples without paying "just compensation."

Slip op. at 12.

That left the question of how much compensation? Try work it out, parties held the court. If that doesn't work then the power company must institute eminent domain proceedings.

Worth your time to read the entire order.

If you wanted to see how the California Supreme Court addressed similar precondemnation entries (which it acknowledged as takings) check out this post ("California Supreme Court Rewrites Eminent Domain Entry Statutes To Give Government A Free Pass").

Opinion re Pre-Condemnation, Idaho Power Co. v. Bean, No. 23CV12213 (Or. Cir., Union Cnty, Sep. 6, 2023)

Inverse Condemnation And Hawaii's Wildfires: Lawprof Shelley Saxer Joins Clint Schumacher's Eminent Domain Podcast

Another must-listen episode of Clint's Eminent Domain Podcast. He's joined by Pepperdine Law School Professor Shelley Ross Saxer:

Professor Shelley Ross Saxer joins the show to discuss the role that the damaging clauses found in more than half of state constitutions across the United States play in inverse condemnation claims related to natural disasters such as the recent Hawaii wildfires.

Definitely worth a listen (as always with EDP). Stream above, or download here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Fifth Circuit has now joined the Tenth:

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

Slip op. at 2.

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

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

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

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

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

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

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

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

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

Id.

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

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

Supreme Court Property Rights Round-Up

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

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

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

 

PruneYard Revisited: Washington SCT Says No Physical Occupation Taking In State's Eviction Ban - You Invited Tenants In, So Forcing Owners To House Them For Free Is Merely Regulating That Voluntary Relationship

We're not going to ask you to read the entire 24 pages of the Washington Supreme Court's 5-4 opinion in Gonzales v. Inslee, No. 1000992-5 (Sep. 28, 2023), in which the court seriatim rejects every challenge to the Governor's Co-19 emergency eviction moratorium for tenants, which allowed tenants who did not pay rent to remain in occupation for the up to 15 months the moratorium was in place.

Instead, we're going to focus only on the takings challenge under the Washington Constitution. The plaintiffs asserted a physical takings claim, based on their right to exclude nonpaying tenants. Rejecting the argument (as several other courts have done), the Washington court concluded that the moratorium on evictions was merely regulation of the "voluntary relationship" between an owner and tenant.

Hang on, you say, what do you mean "voluntary relationship?" If I am an owner, yes, I voluntarily handed over the keys and established a contractual relationship with the tenant, but that relationship was based on several essential terms, foremost of which was you get to stay as long as you pay rent. I most certainly did not agree to let tenants continue to occupy my property if they do not pay rent. How can this be "voluntary."

The court rejected this notion, concluding instead that you let 'em in owner, so after that it doesn't matter what happens. Sky's the limit. Getting 'em out is merely "[g]overnment regulation of that voluntary relationship[.]" Slip op. at 16. And that, "without more, is not a taking." Id. (And if you predicted that the court relied on Yee v. City of Escondido, you'd be right.)

Yee, by the way, indeed holds that merely adjusting some of the terms of the voluntary owner/tenant relationship isn't necessarily a taking. Remember, that case involved a facial challenge to a rent control ordinance, and the Court concluded the government wasn't forcing anyone into the rental business, didn't keep anyone from getting out of the rental business, and acknowledged that there was no allegation the amount of the regulated rent kept the owner from receiving a fair return.

That case said nothing along the lines that the Gonzales opinion (and a lot of others) claim it says: once you let someone in (even if their entry was conditioned on continuing to pay rent), that you can be prohibited from getting them out. Take that, suckers!

After all, doesn't it seem like a pretty far stretch to say that a case in which the government only diddled with the amount of rent charged is the same as a case in which the government tells existing tenants "you don't have to leave if you stop paying rent." The first might not be wiping out an essential stick of property (after all, the owner can still collect rent, get out of the business, etc.). The second radically undermines an essential property stick (the ability to recover and possess property, get out of the business, etc.). Seems like a pretty darn significant difference to us.

Indeed, the U.S. Supreme Court seems to take a very dim view of the way the Yee opinion has been cited. In Alabama Ass'n of Realtors v. Dep't of Health and Human Services, the Court seemingly went out of its way to point out that the inability to evict nonpaying tenants "intrudes" on the "fundamental" right to exclude. What case is notably missing from the opinion? That's right, any mention of Yee v. City of Escondido. You might think that a rent-control decision in which the right to exclude might also be referenced. But no. So what this tells us is that maybe the Supreme Court does not share the same view of Yee as the kryptonite to physical occupation takings challenges for eviction prohibitions, temporary or permanent.

And here's the most bizarre part of the opinion, in our opinion. Indeed, one of the oddest things we've ever seen in a judicial opinion. We call your attention to footnote 9 on pages 17-18, which we reproduce here in its entirety. And we're highlighting the weirdest part, just so you don't miss it:

We are not without sympathy to the fact that the petitioners have been made to bear the cost of accommodating a public need. We note that both Congress and the Washington State Legislature have appropriated significant funds to defray at least some of that cost in situations where the tenants have not paid rent and have avoided paying their debts. See Laws of 2021, ch. 334, § 129(45) (appropriating $658 million for emergency rental and utility assistance); American Rescue Plan Act of 2021, Pub. L. No. 117-2, § 3201, 135 Stat. 4, 54-58 (2021); Consolidated Appropriations Act, 2021, Pub. L No. 116-260, 134 Stat. 1182 (2020); see also Treasury Rent Assistance Program (T-RAP), Wash. St. Dep't of Com., https://www.commerce.wa.gov/serving-communities/homelessness/cares-act-and-state-rent-assistance
[https://perma.cc/6VBV-GNH3].

Read that highlighted part again, just to make sure you got it right. We had to do so just to be sure our eyes were working. (They are.)

Yes, indeed, the court is acknowledging that impressing private rental units into public service as public housing is "accommodating a public need." And that owners of rental property are being forced to bear the cost of that accommodation.

To which we say ... what about Armstrong? Isn't this the fundamental point of the Just Compensation Clause to spread the cost of public benefits to everyone, and ensure that the poor saps whom the political process has left without a chair when the music stopped are not also left holding the economic bag? This part of Armstrong has been quoted so many times in opinions, briefs, and law review articles that surely it must be imprinted on your brain by now and like me, you can recite it from practically from memory:

The Fifth Amendment's guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.

So it isn't like the Gonzales majority doesn't get what's going on, and that property owners were forced by the eviction moratorium to provide public housing for free. Which to us makes it worse: the majority believes that the Washington Constitution doesn't require distribution of the cost of public benefits to the entire public. 

Hate to break it to you, but the Washington Constitution cannot recognize lesser rights than the U.S. Constitution.

So stay tuned. That footnote is the Achilles heel, as it brings down the entirety of the opinion's no-taking conclusion. 

Gonzales v. Inslee, No. 100992-5 (Wash. Sep. 28, 2023) (en banc)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Slip op. at 14.

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

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

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

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

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

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

Washington: "The right to inverse condemnation belongs to the property owner at the time of the taking; the right does not pass to a subsequent purchaser unless expressly conveyed."

In Masloka v. Public Utility District No. 1, No. 101241-1 (Aug. 3, 2023), the Washington Supreme Court held that a takings claim did not automatically transfer to a new property owner when the property was sold.

Your first reaction might be like ours, "what about Palazzolo!?" Didn't that case say that transfer of property after an alleged taking does not wipe out the transferee's right to assert a takings claim:

Were we to accept the State's rule, the postenactment transfer of title would absolve the State of its obligation to defend any action restricting land use, no matter how extreme or unreasonable. A State would be allowed, in effect, to put an expiration date on the Takings Clause. This ought not to be the rule. Future generations, too, have a right to challenge unreasonable limitations on the use and value of land.

Palazzolo, 533 U.S. at 607.

So what gives, Washington Supreme Court?

After reading the court's opinion, and upon further reflection (always a good thing), the story becomes a bit clearer: the Washington court did not conclude that the takings claim disappeared by virtue of the transfer of the property to the new owner, but considered only how a court should determine whether a takings claim was transferred.

And one other big point: this case involved an allegation of a physical taking, not a regulatory taking as in Palazzolo. We'll see how that makes a different shortly.

Back when the first owner owned the land, the utility district maintained a nearby dam and its operation occasionally caused flooding on the land. The Maslonkas then purchased the property. "The previous owners informed the Maslonkas that the land occasionally flooded." Slip op. at 2. The flooding did not stop.

Next:

In 2016, the Maslonkas sued the PUD, alleging its operation of the dam entitled them to damages based on inverse condemnation, trespass, nuisance, and negligence.

The trial court found the subsequent purchaser rule barred the inverse condemnation claim, and that the PUD established a prescriptive easement barring the trespass and nuisance claims. The Court of Appeals reversed, holding that the PUD could not benefit from the subsequent purchaser rule because it failed to prove its conduct constituted a taking prior to the Maslonkas’ purchase. The Court of Appeals also the PUD’s alternative argument that the Maslonkas could not bring their tort claims alongside their inverse condemnation claim.

Slip op. at 2.

The issue was whether the court should presume the takings claim transferred along with the land (and thus the district had the burden to prove it didn't), or whether this was an element of the Maslonkas' claim. As the court put it, "in other words, whether the ["subsequent purchaser"] rule is a doctrine of standing or an affirmative defense." Slip op. at 2.

The court came down on the side of standing. It framed the issue as whether the Maslonkas have the ability to assert the rights of the former owners. In other words, the takings claims belong to the former owners: "[a]lthough our case law does not expressly characterize the subsequent purchaser rule as one of standing, it limits who may sue for inverse condemnation by prohibiting a subsequent purchaser from asserting the legal rights of the owner at the time of the alleged taking." Slip op. at 13.

This conclusion, although not supported in the opinion, is supported by Palazzolo, which noted:

In a direct condemnation action, or when a State has physically invaded the property without filing suit, the fact and extent of the taking are known. In such an instance, it is a general rule of the law of eminent domain that any award goes to the owner at the time of the taking, and that the right to compensation is not passed to a subsequent purchaser. See Danforth v. United States, 308 U. S. 271, 284 (1939); 2 Sackman, Eminent Domain, at § 5.01[5][d][i] ("It is well settled that when there is a taking of property by eminent domain in compliance with the law, it is the owner of the property at the time of the taking who is entitled to compensation").

Palazzolo, 533 U.S. at 628.

The Washington court didn't presume that the claim transferred upon sale, but noted that it could be transferred: "the right does not pass to a subsequent purchaser unless expressly conveyed." Slip op. at 1 (emphasis added). It wasn't here, so the court analyzed whether the Maslonkas established a new taking -- one that took place after their purchase. Sorry, no:

The Maslonkas produced no evidence that the dam’s operations changed after 1993 to increase flooding; any increase cannot be, on this record, attributed to the PUD. Without evidence of a new taking, the Maslonkas’ inverse condemnation claim cannot survive summary judgment.

Slip op. at 16.

Although the court's holding that it cannot be presumed that a takings claim transferred upon sale to new owners does not help the property owners here, we take solace that the opinion tells our transactional colleagues how to avoid this problem down the road. We'll leave it to them to come up with some reuseable language that can be used to convey everything the seller owns (including takings claims).

And breathe a sigh of relief that the court did not depart from the Palazzolo rule or, worse yet, adopt the goofy theory that the purchase price must have been a reflection of the decline in value of the land attributable to the taking.

Maslonka v. Pub. Util. Dist. No 1 of Pend Oreille Cnty., No. 101241-1 (Wash. Aug. 3, 2023) (en banc)

CAFED: Just Because The Govt Seized Property As Evidence Doesn't Mean It Can Keep It Without Compensation

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

Let's say the government thinks you have committed a crime (or someone else has). To investigate, it seizes property as evidence or potential evidence. But after things wrap up and it no longer needs the property as evidence, the government doesn't return it to its owner. Taking or no taking?

Some courts say it could be a taking. Others say no.

In Jenkins v. United States, No. 22-1378 (June 28, 2023), the U.S. Court of Appeals for the Federal Circuit said maybe. Or at least it isn't not a taking simply because the government was lawfully exercising its police power. And if there may be open questions about the whether the owner sought recovery of the property through available procedures or outright abandoned it, then a court entering summary judgment for the government isn't right.

Most of the facts of the case are clear: the DEA thought Jenkins was "involved in a drug conspiracy." In the course of its investigation, it seized two vehicles registered to Jenkins' mother, but used exclusively by Jenkins. It towed the vehicles to a private impound lot and put a "hold" on them (as the court noted, "[i]t is not entirely clear what a 'hold' is, but the parties appear to agree that it had the effect of giving the government control over the vehicles and preventing the impound lot from doing anything with the vehicles, such as selling the cars without the government's authorization.").

Jenkins eventually pled guilty to a drug charge and got a sentence of 252 months (21 years). "On October 21, 2013, between Mr. Jenkins’ guilty plea and his sentencing, the government contends that the hold on the vehicles was released." Slip op. at 3. The impound lot wrote to the titleholder (mom), telling her that if the accumulated fees were paid, the cars could be reclaimed. Mom said she never got this notice. Jenkins never got any notice at all, and the government didn't do anything to let him know beyond telling him in the underlying criminal case that he could go pick up the vehicles. And finally, the lot sent another (final) notice to mom to come get the cars in 10 days, or we're going to consider them abandoned. Mom "did not receive the letter because she was incarcerated." Slip op. at 4. Yikes. 

Jenkins had actual notice apparently, and tried to get the government to give back the cars under a special procedure available in criminal cases (Fed. R. Crim. P. 41(g) if you are interested). But even though the government told him that the cars were available in the impound lot and the court dismissed as moot Jenkins' separate claim that the government was wrongfully holding his cars (because the government indicated it was going to give back the cars), apparently the cars had been sold and the proceeds kept by the impound lot "apparently at least in part to satisfy towing and storage charges." Id. (

Next up, a Little Tucker Act physical takings claim in the district court. Yes, Little Tucker Act because these were used cars, not Sonny Crockett high-profile drug dealer cars. Jenkins threw in a due process claim for good measure and sought damages as a remedy for that. The district court dismissed the due process claim because there's nothing that allows you to get damages against the federal government for due process violations, and granted the government summary judgment on the takings claim on the basis that the cars were seized and retained by a valid exercise of police power (yes, we know the federal government arguably doesn't have general police powers, but work with us here), and there can be no takings claim in these situations. 

The appeal was transferred from the regional circuit (CA8) to the Federal Circuit (you CFC/CAFED mavens understand that process), which disagreed with the dismissal of the takings claim.

First, it made short work of the district court's rationale. Having a valid reason for the seizure and keeping does not insulate the government from takings liability:

The district court held that there was no takings liability because the government’s action was a lawful exercise of the police power. In this respect we think the district court erred. To be sure, as the government points out, we have consistently held that the government is not liable under the takings clause for property seizure during a criminal investigation or for damage to such property in its custody, even if the decrease in value renders the property essentially worthless. None of these cases, however suggests or even considers whether the police power exception immunizes the government from liability for failing to return property legally seized after the government’s need to retain the property ends.

While the United States’ police power may insulate it from liability for an initial seizure, there is no police power exception that insulates the United States from takings liability for the period after seized property is no longer needed for criminal proceedings. In this respect, we agree with the Third Circuit in Frein v. Pennsylvania State Police that “[t]hough valid warrants immunize officers who stay within their scope, they are not blank checks,” and once criminal proceedings have concluded the government “needs some justification” to retain the property without compensation. 47 F.4th 247, 252–53 (3d Cir. 2022). Even when the initial seizure and retention of property is properly done pursuant to the police power, the police power does not insulate the government from liability for a taking if the property is not returned after the government interest in retaining the property ceases. The district court erred in concluding that the legitimacy of the initial seizure precluded liability for failure to return the property.

Slip op. at 8-10 (footnotes omitted).

A good lesson, and one that many courts have not learned.

But that wasn't enough to send the case back, and the Federal Circuit concluded the factual record was not developed enough for the district court to make a decision, such as did the government retain the cars itself or did it surrender them to the impound lot? See slip op. at 11. Did the government notify Jenkins of his ability to recover the cars in a Rule 41 proceeding? And what about that "hold," and whether Jenkins abandoned the cars. Slip op. at 13. And finally, was the impound lot the agent of the government when it sold the cars? Slip op. at 14.

So this one is not over. And by the way, the Federal Circuit affirmed the due process dismissal, kind of: "The theory is that an illegal exaction occurred when and if the government transferred the cars to the impound lot. Mr. Jenkins’ problem is that while his pro se complaint generally alleged a due process violation, it nowhere asserted an illegal exaction theory. The district court did not err in dismissing this due process claim for lack of jurisdiction. However, on remand Jenkins may seek leave to amend to assert an illegal exaction claim." Slip op. at 16. 

Jenkins v. United States, No. 22-1378 (Fed. Cir. June 28, 2023)

Twister: Can You Get There From Here At "Corner Crossing" Properties?

Your mission: go from blue squares to blue squares
without touching any of the red squares

Check out this Order from the U.S. District Court for the District of Wyoming in a case that presents a very interesting -- some might say metaphysical -- property issue; an issue we were not really aware of until one of our law students brought it up a few months ago.

The diagram above is from the court's Order, and depicts the "checkerboard" land ownership patterns in the relevant area of Wyoming. Hunters, who wanted to hunt on public BLM-managed land (blue) adjacent to Iron Bar's private property (red) needed a way to get to the public hunting grounds without trespassing on Iron Bar's private property. That meant no touching of the red squares.

The hunters' journey is called "corner crossings" because, well, they are crossing the land at the corners of the boundaries. Here are the actual parcels, and some of the corner crossings at issue (again, from the Order).

Of course, these lines on a map don't actually exist on the ground. As the Order notes, the "actual points of contact" for the parcels "meet at an infinitely small point" that "like a point in mathematics, are without length or width." Order at 2 (quoting Mackay v. Uinta Dev. Co., 219 F. 116, 118 (8th Cir. 1914)). 

But the corners are marked and the hunters could locate at least the approximate location of these infinitely small points. "[T]he three hunters were met with two steel posts, each with a 'No Trespassing' sign, that were connected together with a chain, a padlock, and some wire." Order at 6. A locked "gate" that doesn't prevent anyone from actually getting from here to the other side of that chain, but nonetheless represents the corners and the private nature of the adjoining parcels.

Schrödinger's Gate

The post in the ground between the signs is the location of the corner. Other than what is depicted above, "there were no posts, fencing, or buildings within one-quarter of a mile from the corner." Order at 7.

The hunters could not squeeze between the signs and the chain to get from one BLM parcel to another. What to do? No one seems to be watching, so how about just walking around? That would entail physically trespassing on Iron Bar's private property, and these hunters were very conscientious.

And here's where it gets metaphysical.

Did they try the Twister thing? No, "one by one, each grabbed one of the steel posts and swung around it, planting their feet only on Section 14 (BLM) and section 24 (BLM), but passing through the airspace above Section 23 (Plaintiff [Iron Horse]) and/or Section 13 (Plaintiff)." Id. In holding onto the steel posts and swinging around them to cross from Section 14 to Section 24, there is no evidence the Defendants caused any damage to Plaintiff's property." Id.

During other hunts in later years, the hunters wanted to avoid all this grabbing and swinging and "in an effort to not touch Plaintiff's steel posts when crossing ... they brought a steel A-frame ladder[.]" Order at 9. They propped up this and use it for crossing without touching Iron Bar's land, nor its posts.

Now that is dedication.

All this time, Iron Bar was objecting. It didn't really believe the hunters did not step on its land, became "much more aggressive about expelling the hunters" (Order at 11), confronted and surveilled them, drove vehicles nearby "in an effort to scare away the game" (id.), and "instituted an ongoing practice of having its employees confront or interact with a 'suspected trespasser' found on or near Plaintiff's property, even if the person was found on public land." Order at 8. It dropped dime to Wyoming Game & Fish, and pressed criminal charged. Finally, it sued the hunters in civil trespass actions.

With that background, the district court addressed whether the hunters violated Iron Bar's private property rights in its airspace. First question: does Iron Bar have any private rights in the airspace. Second, if so, did the hunters jumping over Iron Bar's land and physically entering -- if only momentarily -- the airspace when they jumped or used the ladders, violate any private rights?

We won't go into the great detail that the district court's Order does. We think it is well-worth your time to read yourself. Strap on your old school dirt law glasses and enjoy the ride.

Short story: the airspace is Iron Bar's private property. The Wyoming Supreme Court has held that the air above the ground is private property, "subject to the right of [aircraft] flight." Order at 14. You may not own all of the airspace, but you do own some of it. And as private property, Iron Bar has the right to exclude others. Essential stick, and all that.

But that wasn't the end of it, because the court held that there are some legal restrictions on the right. Among those restrictions is that members of the public have a right to a reasonable way of passage to access public lands. Next, the court analyzed the scope of that limitation, and held that there must be some damage from an intrusion into airspace. Order at 24. 

With that, the court concluded that the hunters' corner crossings are not unlawful trespasses. No physical touching of Iron Bar's land. No damage. Only airspace, and even then only briefly. And Iron Bar didn't heed its own advice: "the locked chain that was installed between the steel posts by Plaintiff hung through airspace over the adjoining public land of Section 14 and 24. Order at 27. These metaphysical "gates" also "constituted an improper attempt to 'prevent or obstruct ... any person from peaceably entering upon'" public land. Order at 28 (quoting a Wyoming statute that makes it illegal to try and keep the public off of public land).

Summary judgment to the hunters on most of Iron Bar's claims (there was one crossing, however -- not at a corner -- at which there remains a factual dispute about whether one of the hunters actually stepped on private property). So this one is mostly over, but not quite.

The entire Order is well worth your time, Dirt Lawyers.

Order on Cross Motions for Summary Judgment, Iron Bar Holdings, LLC v. Cape, No. 2:22-cv-ooo67-SWS (D. Wyo....

Iowa Trial Court: Pipeline Precondemnation Entry Statute Is Facially Unconstitutional

When a court's opinion (even a trial court's opinion) starts out with the epigram, "'Freedom and property rights are inseparable, you cannot have one without the other.'- George Washington," you know you are in for a ride.

So begins the opinion of the Clay County, Iowa District Court in Navigator Heartland, LLC v. Koenig, No. EQCV034863 (May 3, 2023). The issue was the validity under the Iowa Constitution of Iowa's precondemnation entry statute, which allows pipeline condemnors to enter property for land surveys:

After the informational meeting or after the filing of a petition if no informational meeting is required, a pipeline company may enter upon private land for the purpose of surveying and examining the land to determine direction or depth of pipelines by giving ten days’ written notice by restricted certified mail to the landowner as defined in section 479B.4 and to any person residing on or in possession of the land. The entry for land surveys shall not be deemed a trespass and may be aided by injunction. The pipeline company shall pay the actual damages caused by the entry, survey, and examination.

Navigator wanted to enter Koenig's land to conduct surveys in anticipation of condemnation. Koenig objected, and the court held a trial at which it heard testimony about the scope of the proposed entries. One witness:

identified the four types of surveys typically performed on each affected property; these include a civil survey, a biological/environmental survey, a cultural survey, and a geotechnical survey. Each of the four surveys are completed at separate times, thus at a minimum, surveyors would expect to enter onto the private land on at least four separate occasions. She additionally testified that Navigator typically hires third parties to perform each of the surveys. She conceded that her lay understanding of the Iowa Code §479B.15 does not limit the duration or number of times surveys may occur so long as they are confined to surveying purpose for the proposed pipeline path.

Opn. at 3.

The property owner argued that the statute effects a facial taking by requiring owners to open their properties to third parties without compensation: "Koenig asserts that Iowa Code §479B.15 strips landowners of their right to exclude by statutorily allowing pipeline companies to come onto private land to perform certain surveying operations, which amounts to a per se taking. Additionally, Koenig argues that the statute does not provide for just compensation in accordance with Article I section 18 of the Iowa Constitution." Opn. at 6-7.

The court noted that until recently, Penn Central "had been the leading approach to determine whether a regulatory use restriction amounts to a taking." Opn. at 8. But Cedar Point changed that, according to the court: if there's a physical invasion, that's a taking, after which the question becomes whether the government has provided compensation. 

But, the court also noted, "Cedar Point did not open the door for all government-authorized physical invasions to amount to takings[,]" if those invasions are "consistent with longstanding background restrictions on property rights." Opn. at 9.

Thus, the critical question is: are these private pipeline precondemnation invasions consistent with those background principles? The court held no, they are not. "The Court observes important similarities between the facts of this case and Cedar Point."

Like the private labor organizations in Cedar Point, Navigator presently seeks to repeatedly enter onto privately owned land despite a lack of consent from the landowner. While true the California statute in Cedar Point allowed labor organizations to enter on the property for up to 120 days per year three hours per day whereas Navigator is seeking to enter for no more than four days (ranging from thirty minutes to eight hours at a time); the Court is leery to enter into too much detailed comparison of the intrusive nature of the invasion because, as Cedar Point makes clear, the frequency and duration of the invasion is no longer relevant. Id. at 2074 (“the fact that a right to take access is exercised only from time to time does not make it any less a physical taking” and “the duration of an appropriation—just like the size of an appropriation—bears only on the amount of compensation.”)

Opn. at 10.

The court concluded that although survey access may be a "traditional privilege," the Supreme Court's lack of reference to such access or utility easements "leads to a conclusion." Opn. at 11. And that conclusion? Survey access is more like the union easement in Cedar Point than the background access exceptions also noted in the opinion.

In looking to the language in Iowa Code §479B.15, the Court concludes that the standards established in Cedar Point are applicable. The statute is not a use restriction which can be analyzed under the Penn Central “Takings Test”. Rather, because the statute grants pipeline companies right to physically enter and occupy privately owned land, the statute appropriates a right to invade the landowner’s property. When such appropriation occurs, the Court follows the traditional rule “Because the government appropriated a right to invade, compensation is due.” Cedar Point, 141 S. Ct. at 2076.

The Court finds that Iowa Code section 479B.15 appropriates Koenig’s right to exclude others from his privately owned land. Without Iowa Code §479B.15, Koenig would have had the right under Iowa law to exclude the pipeline company and any third-party surveyors from hi property. Because the statute amounts to a government authorized physical invasion, and additionally appropriates Koenig’s right to exclude, the Court is convinced Iowa Code §479B.15 effects a per se taking for which just compensation is required. 

Opn. at 12.

The court also concluded that the statute does not provide just compensation. Yes, the statute requires the pipeline company entering private property to pay "actual damages" caused by the invasion or occupation, but does not, on its face, require just compensation for the invasion if there's no physical damage resulting:

However, if no physical damage is done to the private property, does Iowa Code §479B.15 still require compensation to the landowner for the government-authorized taking? §479B.15 says no and any other interpretation of such is unreasonable. At the end of trial Navigator argued that the distinction between “actual damages” and per se damage is a distinction without a difference. Navigator’s counsel argued that Koenig’s “actual damage” is any damage that he may claim. The Court does not find such interpretation to be reasonable because the damage has to be “actual” and cannot be subjective. It has to be reasonably ascertainable. The statute requires such.

Opn. at 16 (footnote omitted).

A property owner may not be able to easily ascertain the extent of the economic damages caused by a precondemnation survey entry. The damages caused may be pretty subjective, and similar to pain and suffering in tort law. "Therefore, a clear and common sense reading of Iowa Code §479B.15 is that, if by going onto private property to survey, a pipeline company causes actual damage to the property, compensation is required to cover the damages. However, because non actual damages resulting from the government authorized taking are subjective and not readily ascertainable, the Court cannot interpret the meaning of 'actual damages' within the statute to cover a per se taking in and of itself. To find otherwise would deprive 'actual damages' of all its ordinary meaning." Opn. at 17.

Finally, the court concluded that the usual presumption of constitutionality does not save the statute, because there's no reasonable alternative construction the court might give it.

All we can say is wow.

Trial Ruling on Defendant's Counterclaim re: Constitutionality of Iowa Code § 479B.15, Navigator Heartland...

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

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

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

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

Pet. at 2-3.

Here are the Questions Presented:

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

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

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

Stay tuned.

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

New L Rev Article: "Property and the Right to Enter" (Bethany Berger)

Here's an article for your Monday reading, Bethany R. Berger, Property and the Right to Enter, 80 Wash. & Lee L. Rev. 71 (2023).

Here's the abstract:

On June 23, 2021, the Supreme Court decided Cedar Point Nursery v. Hassid, holding that laws that authorize entry to land are takings without regard to duration, impact, or the public interest. The decision runs roughshod over precedent, but it does something more. It undermines the important place of rights to enter in preserving the virtues of property itself. This Article examines rights to enter as a matter of theory, tradition, and constitutional law, arguing that the law has always recognized their essential role. Throughout history, moreover, expansions of legal exclusion have often reflected unjust domination antithetical to property norms. The legal advocacy that led to Cedar Point continues this trend, both undermining protections for vulnerable immigrant workers in this case and succeeding in a decades-long effort to use exclusion as a constitutional shield against regulation.

Download the pdf here.

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

Good crowd.

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

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

The other cases discussed are in your materials!

The nearby Caldwell County Courthouse. A classic.

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

New Article: Alex Boone, "The Tide's Coming In: A New Case for Beachfront Property Rights in South Carolina" (Wm & Mary Envt' L & Pol'y Rev)

Check this out, a new student-authored note from William and Mary third-year law student Alex Boone, "The Tide's Coming In: A New Case for Beachfront Property Rights in South Carolina," 47 Wm. & Mary Envtl. L. & Pol'y Rev. 383 (2023).

Here's the Abstract:

Part I of this Note explores the scientific data as it relates to the impending consequences of climate change on South Carolina’s coast and will introduce the disastrous scenarios that are predicted to arise as a result of rising sea levels and the accelerating strength and severity of extreme weather events. Part II compares the effectiveness of various coastal resiliency tools and highlights the regulatory framework that prohibits their use by beachfront property owners. Part III explores the topic of regulatory takings and their indirect prophylactic nature of protecting citizens from regulatory overreach and offers a case for a South Carolina court to find that the state’s regulations create an unconstitutional taking of private property without just compensation. Lastly, Part IV recommends a policy change designed to mitigate the consequences of the CTWA [Coastal Tidelands and Wetlands Act] on South Carolinians in the absence of a judicial finding that the CTWA constitutes a regulatory taking.

It's really rewarding to see this kind of writing and analysis from a law student. Yes, we appreciate the subject-matter and the conclusion (naturally), but that aside, it is a good day when a soon-to-be colleague does this kind of work and lays it all out there for the world to see. Congratulations to the ELPR editors, and especially to Mr. Boone!

When It Rains, It Floods: Intermittent Flooding, Inevitably Recurring, Is Treated As A Permanent Invasion

A quick one from the Indiana Supreme Court (thanks to our Pacific Legal Foundation colleague Sam Spiegelman for the heads-up on this one).

In Town of Linden v. Birge, No. 22S-PL-352 (Mar. 7, 2023), the court held that intermittent government-induced flooding of property is treated as a permanent invasion and a per se taking if the flooding is inevitably recurring.

A Town owned and maintained drain fell into disrepair, "resulting in frequent flooding of the Town" so replacement and upgrade was in order. The Town did so and formed an improvement district to fund it. The Birge property was assessed $7k, and after some back-and-forth about the location and placement of a manhole cover on the Birge property, the upgrade project went forward. But "[a]fter completion of the project in late 2012, low-lying portions of the Birges’ Property flooded after any heavy rainfall, encumbering the Birges’ farming enterprise. So, rather than pay the $7,679 assessment, the Birges sued the Town, County, and others (collectively, the Defendants) for inverse condemnation." Case dismissed for governmental immunity, but the court of appeal reversed.

Now dealing with the merits, the trial court concluded this was a taking. The Town solved its own flooding problem by, in essence, shifting the flood waters from its own property to the Birge property. Their property floods during every heavy rainfall. While merely recurring because the floodwaters eventually recede, the trial court treated this as a permanent physical invasion.

The court of appeals, however, had a different view. True, under Arkansas Game and Fish, flooding need not be permanent to be deemed a taking. But when flooding isn't permanent, the court applies that long list of factors that Arkansas Game set forth.

The Indiana Supreme Court agreed to hear the case and disagreed with the court of appeals:

Based on this precedent, we analyze a flooding-related takings claim as follows: (1) if the flooding is continuous or “intermittent but inevitably recurring,” and the invasion is “substantial,” then it results in a per se taking; (2) if, on the other hand, the flooding is temporary or of “finite duration,” then the Arkansas Game factors apply.

Slip op. at 8.

The court relied on United States v. Cress, 243 U.S. 316 (1917), where the Supreme Court held that although the flooding itself was temporary and the waters eventually receded, the government's building of a lock and dam that resulted in frequent flooding was a "permanent condition" resulting from the dam being built. "The 'character of the invasion' determines whether a taking occurred, the Court emphasized, “not the amount of damage resulting from it, so long as the damage is substantial." Slip op. at 7 (quoting Cress, 243 U.S. at 329).

In contrast to Arkansas Game where the flooding was temporary and finite (by the time the Court heard the case, the feds had stopped flooding Arkansas' property), here, the flooding is recurrent and indefinite. It rains, it floods:

Unlike in Arkansas Game, where the “recurrent floodings” were of “finite duration” (lasting from 1993 to 2000), 568 U.S. at 27 (emphasis added), the floodings here are repetitive and of indefinite duration—i.e., they amount to a “permanent condition,” see Cress, 243 U.S. at 327. As the trial court expressly found, and as the record evidence supports, the drain reconstruction project has resulted in “repeated flooding events” on the Birges’ Property due to increased pressurization at the Transfer Point during “every heavy rainfall.” App. Vol. 5, p. 59; see Tr. Vol. 2, p. 56 (expert testifying to the same effect). In other words, the flooding here amounts to a permanent physical invasion by way of “intermittent but inevitably recurring overflows.” See Cress, 243 U.S. at 328 (emphasis added). Indeed, so long as the Property sustains “heavy rainfall” (or unless and until the County takes the necessary corrective measures), the flooding will persist indefinitely. This type of physical appropriation reflects the “clearest sort of taking,” which we assess by “using a simple, per se rule: The government must pay for what it takes.” See Cedar Point Nursery v. Hassid, 141 S.Ct. 2063, 2071 (2021) (internal quotation marks and citations omitted).

Slip op. at 9.

But the Birges are not out of the woods just yet. The trial court concluded the flooding made it "more difficult" for the Birges to farm the land. The standard, the Indiana Supreme Court concluded, is a bit higher. The owner must show that the flooding resulted in "substantial" damage. Back down it goes to determine if the Birges meet this standard.

Town of Linden v. Birge, No. 22S-PL-352 (Ind. Mar. 7, 2023)

One Guess What The Second Circuit Did With A Takings Challenge To Rent Control

Let's say you know nothing else about an appeal except it is being decided by the U.S. Court of Appeals for the Second Circuit, and the case is a constitutional challenge to rent control. What's your best guess about the outcome (the district court dismissed for failure to state a claim)?

When the Second Circuit issued its summary order in just such a case last week -- a challenge to the "Housing Stability and Tenant Protection Act of 2019" -- we decided to undertake a little unscientific poll to see whether others out in the Twitterverse predicted as we did.

Looks like so. Yes, the sampling size was small, and the respondents were only those who voluntarily offered their thoughts. But 95% accurately predicted that the property owners would lose, as the Second Circuit indeed held in an appellate court's version of "laughing heartily" at an appellant's arguments: an unpublished summary order.

We could spend the rest of this post going through all of the reasons why the Second Circuit didn't find a scintilla of reversal in the property owners' arguments. But the Order is so short, you might as well read it yourself.

Short story: facial claim? Nope, no physical taking because you fool landlords let tenants in your properties. No facial reg take either, because "different landlords have greatly varying expectations." Order at 4. Rather than serve as an apt illustration of why the "expectations" part of the Penn Central test focuses on an irrelevant inquiry, the Second Circuit effectively concludes that reg takings claims can never be raised as facial claims. 

Same outcome for the as-applied claims: no plausible allegation of a physical taking because there's still the possibility of getting tenants out, and owners are not prohibited from exit the rent-controlled market by getting out of the rental market; the law merely "restricts a landlord's ability to profit by converting a rent stabilized unit to a market-rate unit[.]" Order at 6. And, for good measure, these claims are not ripe because the owners didn't plead that they tried to get anyone out. As for the as-applied regulatory takings claim, the claim is not ripe because the complaint does not allege that the owners tried to take advantage of any of the non-futile procedures to obtain a hardship exemption. And even if ripe, the owners lose "on the merits." (Remember this is an appeal from at 12(b)(6) dismissal, so what "the merits" has to do with anything is beyond us.)

So what might the 95% response indicate? People have very good predictive powers? Our colleagues are as cynical and jaded as we are? Constitutional challenges to rent control are so lacking in merit and plead-worthiness that courts rightly laugh them out of court? The Second Circuit is predictable but in other circuits you might get a more balanced view?

Or maybe -- just maybe -- something else is at play here, and, like a lot of other courts have done before it, the Second Circuit isn't about to upset the apple cart and do anything to undermine what started off, like a lot of these things do, as an "emergency" measure now fossilized into an untouchable entitlement (but an entitlement that is not paid for by the taxpayers, but by private property owners)? In these cases, the lower courts aren't likely to do doodly-squat, and rent control cases will be pushed up to the Supreme Court until that Court does something more than repeatedly decline to review the issue.  

Summary Order, 335-7 LLC v. City of New York, No. 21-823 (2d Cir. Mar. 1, 2023)