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New Just Comp Cert Petition: Is Due Process Property Just Compensation Property?

A new cert petition to check out. We don't need to explain it much, because the petition does a good job of it.

Here's the Question Presented:

New York State redevelopment agency seized, via eminent domain, a large tract of real estate occupied by an existing building in downtown Brooklyn for redevelopment. The building, partially used for office space, included a useable basement of over 13,000 square feet, which had a government-issued certificate of occupancy. During eminent domain proceedings, the lower court ignored the certificate of occupancy’s determination of a usable basement as a valued property interest.

The question presented is:

1. Are government-issued attributes of private property (e.g., certificates of occupancy, building permits, business permits) entitled to constitutional protection under the Fifth Amendment when they are seized under the government’s eminent domain power, just as they are presently entitled to constitutional due process protection under the Fourteenth Amendment?

Follow along on the Court's docket here.

Petition for Writ of Certiorari, Pacific Carlton Dev. Corp. v. New York State Urban Dev. Corp., No. 22-1149...

ALI-CLE First Look At "Sackett v. EPA and the Future of the Clean Water Act"

Want to find out what the experts -- including arguing counsel for the property owners, our law firm colleague Damien Schiff -- think about the Supreme Court's recent Clean Water Act decision, Sackett v. EPA. And most importantly, what is next?

You are in luck: on Wednesday, June 7, 2023 at 1:00 - 2:15pm Eastern, ALI-CLE is producing a webinar, "Sackett v. EPA and the Future of the Clean Water Act."

Here's the program description:

The U.S. Supreme Court’s May 25 landmark decision in Sackett v. EPA ends over 30 years of volleying between the judicial and executive branches of the federal government over the jurisdictional reach of the Clean Water Act (CWA). In finding that the “significant nexus” test is not authorized by the CWA, and instead setting out a new, much narrower test, the effect of the Sackett decision on federal and state regulation of discharges to and modification of waters and wetland will be immediate and substantial. The decision also provides important insights into the Court’s view of the federal government’s role in environmental protection and the role of the courts in reviewing agency interpretations of statutes. This hot-topic webcast, jointly organized by ALI CLE and ACOEL, features an all-star cast that includes the attorney who argued for the Sacketts at the Supreme Court, a renowned water law scholar, and two practitioners with vast experience in advising clients on CWA issues. In just 75 minutes, they will dissect the Court’s opinion and offer insights regarding the future of CWA regulations and federal environmental law in general.

More here, including the faculty list, CLE credits, tuition information, group discounts, and how to register.

Hey Boo Boo! This Case Is Better Than Your Average Warrantless Search Case: Camera-Toting Bear Accused Of Violating The Fourth Amendment

The (allegedly) offending Bear Number 119.

Check this out.

As reported in the Law360 story, "Does A Bear Film In The Woods? Couple's Suit Says Yes," a Connecticut property owner has filed this federal court complaint asserting that state game and fish officials tagged a wild bear and turned it into a state-sponsored, photo-taking, mobile-camera-platform to perform warrantless searches of the plaintiffs' persons, houses, papers, or effects.

Here are the critical allegations in the 3-page complaint:

6. During all times mentioned in this complaint, the defendant knew that bears, including a bear the defendant had tagged as Number 119, frequented the said property.

7. On an unknown date prior to May 20, 2023, but subsequent to January 1, 2023, the defendant affixed a collar to Bear Number 119 which contained a camera. The defendant thereupon released the camera-carrying bear in the vicinity of plaintiffs' property.

8. At approximately 9:30 a.m. on May 20, 2023, Bear Number 119 approached to within 200 yards of the plaintiffs' residence, which is located near the center of their property. It was wearing the aforesaid camera at the time and, upon information and belief, that camera was activated and taking and transmitting pictures or video of the interior of the plaintiffs' property to the defendant.

9. Upon information and belief, the defendant[*] did not have a search warrant authorizing or permitting photographic surveillance of the interior of the property of the plaintiffs.

And who said property law is dull?

[* We really wanted the complaint to allege the bear did not have a search warrant.]

In all seriousness, this case might be a good one to highlight the property-based vision of the Fourth Amendment.

If nothing else, this case should be a field day for headline and law journal title writers.

Complaint, Brault v. Connecticut Dep't of Energy & Envtl. Prot., No. 3:23-cv-000696-OAW (D. Conn. May 20,

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

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

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

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

Here is the Question Presented:

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

The question presented is:

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

Stay tuned, as always.

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

Clint Schumacher's Eminent Domain Podcast: "Jon Houghton and his Penn Central Quest"

Here's a don't miss episode of friend and colleague Clint Schumacher's Eminent Domain Podcast, featuring our Pacific Legal Foundation colleague Jon Houghton. With a title like "Jon Houghton and his Penn Central Quest," how can we resist listening?

In this episode, Jon Houghton with Pacific Legal Foundation joins to discuss the Penn Central test, why he wants to change it, and what he is doing about it. We also discuss NY Jets football and the big Aaron Rodgers trade.

Listen in!

Who'll Stop The WOTUS? SCOTUS Dives Back In To Wetlands

Tyler v. Hennepin County wasn't the only property rights opinion issued by the Supreme Court in one of my law firm's cases last week.

There's this one, which we've been waiting a lot longer to drop (oral arguments were held on the first day of the Court's term back in October), Sackett v. Envt'l Prot. Agency, No. 21-454 (May 25, 2023). Like Tyler, this one is our law firm's, so we're not going to do much pundificating, and will leave that to others.

The clearest and most objective view (in our view) is that of lawprof Jonathan Adler, who analyzes the opinion over at Volokh Conspiracy in "In Sackett v. EPA, the Supreme Court Cuts Back Federal Regulatory Authority Over Wetlands." Or check out this Twitter thread by Ilya Shapiro.

Short story: all nine Justices agree that there's a limit to how far federal regulatory control extends, they just disagree about what is the limiting test; five of 'em seem to have adopted something close to the Scalia plurality from the Rapanos case, while the dissenting four go another way.

Bottom line: the EPA rule is no good, as is the Biden Admin's attempt to revise the rule midstream.

Biggest loser of the day: Justice Kennedy, since not a single Justice seems to like the "significant nexus" test.

Another victory for individual and property rights. That makes three this term for us. Not too bad. 

Sackett v. Envt'l Prot. Agency, No. 21-454 (U.S. May 25, 2023)

Tyler Takings Round-Up

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

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

We'll update as merited.

Rethinking Penn Central: A Call For Symposium Papers

If you know, you know.

Pacific Legal Foundation (that's us) has put out a call for papers about "Rethinking Penn Central." Here's the details (pdf).

Here's some of the suggested topics:

• Can Penn Central be salvaged or does it need to be fully replaced?
• If it is to be replaced, what should the new test be?
• Alternatively, what improvements can be made to Penn Central that would address problems raised by critics without uprooting the test entirely?
• Is economic loss primarily relevant to compensation owed rather than the threshold question of whether a taking has occurred?
• Can a more categorical approach, like those taken in cases including Cedar Point Nursery v. Hassid, Hodel v. Irving, or Lucas v. South Carolina Coastal Council, adequately address regulatory takings?
• What insights does the original meaning of the Takings Clause offer regarding how to fix or replace Penn Central?
• Do colonial or English practices or precedents offer insights into a better approach to regulatory takings?
• How did courts during the ratification and reconstruction periods address regulatory takings prior to Oliver Wendell Holmes’s infamous "too far" statement, and what lessons do those precedents hold for how to fix or replace Penn Central?
• What are the pitfalls that a new test must be careful to avoid?

More details here.

July 1, 2023 deadline to submit proposals. Accepted papers even get a $2,500 honorarium, and travel to the October research roundtable.

Check it out, and submit!

Rethinking Penn Central Symposium Call for Papers

Unanimous SCOTUS: "state law cannot be the only source" Of Property Rights, And "traditional property law principles" As Enforced By The Takings Clause Play A Role

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

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

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

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

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

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

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

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

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

More to come as the analysis and commentary rolls in.

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

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

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

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

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

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

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

Slip op. at 2.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here are the Questions Presented:

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

The questions presented are:

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

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

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

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

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.

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

Shands Key, with the City of Marathon in the background

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

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

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

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

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

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

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

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

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

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

SCOTUS GVR's Pipeline Cert Petition On Delegation Of Eminent Domain To Private Parties

In this Order, the Supreme Court granted this cert petition which presents these questions:

Whether a facial challenge to Congress’s delegation of eminent domain power to private parties is properly filed in district court, as this Court held in PennEast Pipeline Co. v. New Jersey, 141 S. Ct. 2244 (2021), or with FERC, which has admitted it has no jurisdiction to adjudicate the constitutionality of this delegation.

Whether a facial challenge to Congress’s overly broad delegation of legislative power to FERC is properly filed in district court or with FERC, which has admitted it has no jurisdiction to adjudicate the constitutionality of this delegation.

Whether a facial challenge to Congress’s delegation of eminent domain power to FERC is properly filed in district court or with FERC, which has admitted it has no jurisdiction to adjudicate the constitutionality of this delegation.

As the Order notes:

Petition GRANTED. Judgment VACATED and case REMANDED for further consideration in light of Axon Enterprise, Inc. v. FTC, 598 U. S. ___ (2023).

So what is this Axon case the Court refers to? You might want to read some of the amicus briefs filed in the case to find out. All of them are posted on the case's docket here. Or read this summary from the Federalist Society, "Supreme Court Holds That Federal District Courts Have Jurisdiction To Hear Structural Challenges To FTC And SEC."

Or better yet, we refer you to our colleague Michael Realbuto's post on the McKirdy Riskin Olson DellaPelle Condemnation Blog, "SCOTUS Sends Pipeline Eminent Domain Case Back to the District Court." Our read of Axon is that you don't have to ask an agency to pass on the constitutionality of its own actions or the scope of its authority. As Michael writes:

On April 14, 2023, the Court released a unanimous 9-0 decision in Axon holding the district court retains § 1331 jurisdiction over structural separation-of powers challenges because that type of separation-of-powers injury cannot be remedied by the agency itself or the court of appeals. The Court’s April 2023 summary decision in the MVP matter was clearly guided by the holding in Axon and proves to be a victory for the landowners who will now have their day in Court. Notwithstanding the District Court’s ability to hear the MVP case, there are some cases on the books that the landowners must overcome. For example, in Penneast Pipeline Co. v. New Jersey, 141 S. Ct. 2244 (2021), the Supreme Court expressly held that the Federal Government can constitutionally confer on pipeline companies the authority to condemn necessary rights-of-way in which a State has an interest. While it’s going to be an uphill battle, we are tuned in to see how this fight shapes out.

What do you think will happen on remand? We think we know.

Petition for Writ of Certiorari, Bohon v. Fed. Energy Reg. Comm'n, No. 22-256 (U.S. Sep. 15, 2022)

No Class: CA6 Rejects Class Certification For Home Equity Theft Takings Case

We're not going to dwell too much on the U.S. Court of Appeals' opinion in Fox v. Saginaw County, No. 22-1265 (Apr. 28, 2023), because even though it is a case involving the "home equity theft" takings issue argued at the Supreme Court last week, this one tells us more about civil procedure than takings. 

The Fox case is a class action, and several of the defendant counties may engage in the practice of seizing property and liquidating it to satisfy a tax debt (and then keep any excess), but they didn't do it to the lead plaintiff Mr. Fox.

The district court held that the class action could proceed, but the Sixth Circuit said no: Fox may have standing to assert the one county that kept his equity has taken his property, but has no standing to assert claims against the other governmental defendants because those defendants did not injure him, and he could not bring claims "on behalf of absent parties against a defendant who had not harmed the plaintiff." Slip op. at 2-3.

There's some neat stuff in the opinion worth reviewing, even if you are not all that interested in class action and civil procedure law. Such as a very concise summary of the home equity theft "scheme" (as the court labels it on page 4) and the judicial and legislative responses to arguments that the government keeping the excess equity after satisfaction of a tax debt is a taking.

For you civ pro mavens, the issue was one of standing and the "juridical link" doctrine:

Fox says, he has standing to sue the 26 other Counties as a representative of the class. If 26 landowners with property in each of the 26 other Counties had joined Fox’s suit, each landowner would likely have standing to sue his or her respective County in the same way that Fox has standing to sue Gratiot County. See Daves, 22 F.4th at 542. So whether these 27 plaintiffs could litigate as a group would raise a joinder question under Federal Rule of Civil Procedure 20(a), not a standing question under Article III. In the same way, Fox argues, whether he may sue the other Counties turns on Rule 23, not Article III.

A circuit split exists over this doctrine. The Seventh Circuit has held that named plaintiffs may bring a class action against some defendants who did not injure them if the class members would have standing and if the named plaintiff can meet Rule 23’s requirements. Payton, 308 F.3d at 678–82. The Second Circuit, by contrast, has held that the named plaintiffs must have standing to sue every defendant at the outset, even when they seek to certify a class. See Mahon, 683 F.3d at 63–66; see also Wong v. Wells Fargo Bank, 789 F.3d 889, 896 (8th Cir. 2015).

Slip op. at 10.

Check it out if you're interested.

Fox v. Saginaw County, No. 22-1265 (6th Cir. Apr. 28, 2023)

Watch: Cato Institute Book Forum - "Natural Property Rights" (Eric Claeys)

In case you missed it live last week, here's the recording of Cato Institute's Book Forum on lawprof Eric Claeys' forthcoming book, "Natural Property Rights." As Cato notes:

The book introduces and defends a theory of property relying on labor, natural rights, and traditional principles of natural law. Justified on those grounds, property rights protect individual freedom, but they also help government officials resolve the basic resource conflicts that arise in property law. Natural Property Rights illustrates this with examples from real estate, oil and gas, tangible personal property, water rights, government regulatory and taking powers (and constitutional limits on those).

With Professor Clayes (George Mason Law School), Matthew Cavedon (Visiting Legal Fellow, Cato Institute, and Robert Pool Fellow, Center for the Study of Law and Religion, Emory University), Chad Squitieri (Assistant Professor of Law, Catholic University), and Clark Neily (Sr. Vice President for Legal Studies, Cato Institute).

Worth watching and learning.

Tyler SCOTUS Takings Argument Round-Up

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

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

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

More on the way. Stay tuned.

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

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

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

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

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

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

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

Listen to the arguments live, here.

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

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

Stay tuned.

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

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

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

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

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

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

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

Slip op. at 13.

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

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

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

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

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

CA9 (unpub.): You Can Never Adequately Plead A Facial Penn Central Taking For City Zoning Restrictions

If everything the Ninth Circuit says in its unpublished memorandum opinion in Craneveyor Corp. v. City of Rancho Cucamonga, No. 22-55435 (Apr. 20, 2023) is accurate, there's no way to ever draft a complaint alleging a facial Penn Central regulatory taking that will survive a 12(b)(6) motion to dismiss for failure to state a claim.

From what we can gather (this is an unpublished memorandum opinion, after all), the property owner asserted a facial takings challenge to some sort of zoning regulations that restrict its use of two parcels it owns. We're not sure what restrictions. See slip op. at 2 ("The complaint asserts a facial takings challenge under 42 U.S.C. § 1983 to a city zoning plan that allegedly restricts development on two parcels of land owned by CraneVeyor.").

Two theories: Lucas and Penn Central.

The court made short work on the facial Lucas claim, concluding that because the owner "acknowledges that the [zoning], on its face, does not prohibit all development in fault zones[, that] ... CraneVeyor has not stated a claim for a facial Lucas taking." Slip op. at 3.

The facial Penn Central claim fared no better. The court assumed without deciding that a property owner may assert a facial Penn Central claim, and proceeded to analyze the three Penn Central factors:

• Economic impact. "[I]nsufficient." Slip op. at 3. Why? Because "[v]aluable uses remain on CraneVeyor's land. According to the city, CraneVeyor could build up to two residential units on its first parcel. And the [zoning] ppermits livestock and poultry keeping on the second parcel." First, what does the (alleged) existence of "valuable uses" vel non remaining on the property have to do with whether the complaint is properly pleaded? This isn't a Lucas theory, which requires some kind of near-wipeout of economically beneficial uses; this this is Penn Central where there's no minimum threshold of economic loss, and even having a lot of "valuable uses" remaining in the after condition might be overcome by significant proof of the other two factors. Second, this was an appeal from a 12(b)(6) dismissal, yet (a) the court takes the city's word that there are other valuable uses remaining, and (b) the court apparently makes some kind of conclusion that the complaint didn't adequately allege the remaining uses are insufficient. So, Ninth Circuit, what percentage is sufficient that we have to plead? Your guess is as good as ours.
• Distinct investment-backed expectations. Nope. No landowner can reasonably expect to be free of zoning. And the owner didn't chase vesting, so there's that.
• Character. This is a regulatory taking, not a physical invasion. And zoning laws ain't facially takings.

Can all this be explained by the fact that the court was dealing with a facial Penn Central claim? Your guess is as good as ours. But if that's the case, wouldn't it just be easier to simply say there's no way to plead a facial claim for an "ad hoc" test, rather than potentially screw up the doctrine when down the road, someone inevitably tries to apply the court's analysis to a complaint asserting an as-applied Penn Central claim?

Craneveyor Corp. v. City of Rancho Cucamonga, No. 22-55435 (9th Cir. Apr. 20, 2023) (mem.)

SCOTUS To Weigh In On Due Process In Civil Forfeiture

The Court has already started loading up next Term's property rights docket, with last week's grant of this cert petition.

Before we go further, a disclosure: our law firm colleague Deborah La Fetra filed an amicus brief urging the Court to grant review. Thus, we're not going to be taking a deep dive into the issues, but will leave that to others. Luckily, lawprof Ilya Somin (as is often the case) beat us to the punch, analyzing the issues in "Supreme Court Decides to Hear Important Asset Forfeiture Procedural Property Rights Case" at the Volokh Conspiracy. Check it out.

Here's the Question Presented:

In determining whether the Due Process Clause requires a state or local government to provide a post seizure probable cause hearing prior to a statutory judicial forfeiture proceeding and, if so, when such a hearing must take place, should district courts apply the "speedy trial" test employed in United States v. $8,850, 461 U.S. 555 (1983) and Barker v. Wingo, 407 U.S. 514 (1972), as held by the Eleventh Circuit or the three-part due process analysis set forth in Mathews v. Eldridge, 424 U.S. 319 (1976) as held by at least the Second, Fifth, Seventh, and Ninth Circuits.

Will we be following along as the case progresses? Of course. Or you can follow the Court's docket here.

Petition for a Writ of Certiorari, Culley v. Marshall, No. 22-585 (cert. granted Apr. 17, 2023)

Get Ready For SCOTUS Takings Arguments (Wednesday, April 26, 2023)

Take a deep dive into the arguments and amicus briefs

This Wednesday, April 26, 2023, the U.S. Supreme Court will hear oral arguments in Tyler v. Hennepin County, No. 22-166, our law firm's case which argues that Hennepin County's keeping the excess value in Ms. Tyler's home over what she owed in property taxes and fees, is an uncompensated taking of private property, and also violates the Excessive Fines Clause.

Here are links to programs, summaries, and events to help you understand the arguments and issues, as well as registration for post-argument analysis:

• The Supreme Court Takes Up ‘Home-Equity Theft’ - Wall St. Journal. An op-ed by our Pacific Legal Foundation colleague Christina Martin, Counsel of Record for the property owner and arguing counsel.
• Deep Dive and Amicus Review: Tyler v. Hennepin County - the recording of last week's PLF webinar previewing the arguments, and focusing on the myriad amici briefs which have been filed. Click here, or wat. All briefs are posted on the Court's docket page here.
• The same day as the arguments at 2pm Eastern Time, the Federalist Society will hold a "Courthouse Steps" program, at which Ms. Martin will provide her thoughts on the arguments. Register here.
• For those of you in the Beltway, at 4:30pm Eastern Time on the day of argument, PLF will host "Home Equity Theft at the Supreme Court," an in-person program at the Top of the Hill Banquet & Conference Center, in Washington, D.C. Ms. Martin (busy day!) and other experts will answer questions. Register here.

We'll put up more links and materials over the next few days. But again, because this is one of our firm's cases, we won't be commenting that much (other than Go Christina and Geraldine! (Tyler)).

CA6: Taking Occurs, And Statute Of Limitations Begins To Run, When Foreclosure Redemption Period Expires And Not Before

In what the court termed a "matter of first impression," slip op. at 5, the U.S. Court of Appeals for the Sixth Circuit held in Beaver Street Investments, LLC v. Summit County, No. 22-3600 (Apr. 21, 2023), that the statute of limitations in a § 1983 takings claim for a local government's alleged home equity theft (for more on that issue, see here) began to run when the period when a homeowner can redeem a foreclosure ended, and not when (as the government argued) the government made the decision to acquire the home (the final adjudication of foreclosure).

As the majority noted:

The dispositive issue in this appeal is what constituted the “act of taking.” See id. In other words, the Court must determine when, as a matter of law, the County took BSI’s property without paying for it. See id. The County argues that the taking occurred when it made a final decision regarding BSI’s property, which it asserts was the final adjudication of foreclosure. BSI argues, by contrast, that the County took its property on the date the County transferred the property to the land bank. This appears to be a matter of first impression.

Slip op. at 5.

We suggest you read the opinion because (1) it isn't that long (11 pages, including the dissenting opinion), and (2) as all takings statute of limitations opinions do, it also backhandedly deals with the flip-side issue of when a takings case is ripe. As the majority noted, the SOL only begins once a case is ripe, and both dates are based on when the taking occurs. The court rejected the government's argument than an earlier decision controlled. The majority concluded that the case involved ripeness, but "is still relevant, however, because it provides the general principle that for a taking to occur, 'there must be a 'final decision' to take the property, ... meaning that it is 'known to a reasonable degree of certainty' what will happen to the property ...." Slip op. at 6.

The end of the redemption period -- the window in which the property owner could effectively pull out of the dive and get the property back -- was the first point in time where the taking could have occurred. If the owner paid up, "the County would have been prohibited from taking the property." Slip op. at 7. This was also the first time that it became clear that the County would seize it. Yes, it decided to take the property earlier when it entered a final decision of foreclosure, but no actual acquisition was possible until the owner let the redemption period lapse. See id. ("until that time, whether the County would transfer title was unclear").

One judge dissented, and would have agreed with the County that deciding to take the property by foreclosing was the operative event. The complaint was complaining about the transfer, not the lapse of the redemption period, the dissent argued. See Dissent at 10. That's when the property owner knew it was injured:

Here, the injury forming the basis of BSI’s action was the County’s decision to direct the transfer of BSI’s property to the County’s land bank. Thus, the key event alerting BSI to protect its rights was the BOR’s final adjudication of foreclosure on June 3, 2019, which ordered that direct transfer. At that time, BSI knew or had reason to know that the County would transfer its property in lieu of sale.

Id.

To the dissent, that decision was also the "final decision" for ripeness purposes. Which is the same date the statute of limitations clock began ticking. When the taking took place is a separate inquiry (at least according to the dissenting judge).

What do you think about this one? What accounts for the different world views of the majority and dissent? Is the majority viewing this as more akin to a physical taking, where compensation is owed when the property is transferred from the owner to the County? And is the dissent seeing this as a regulatory taking where it is the "final decision" to take without compensation that renders the claim for compensation ripe?

We know which way we see it - what about you?

Beaver Street Investments, LLC v. Summit County, No. 22-3600 (6th Cir. Apr. 21, 2023)

Hawaii Supreme Court To Hear Major Severance Damages Appeal In Rail Takings Cases

Update: the court has rescheduled the arguments to June 22, 2023, at 10 a.m.

The Hawaii Supreme Court has scheduled oral arguments in an important eminent domain case about severance damages for the Honolulu Rail Authority's condemnation of land in Honolulu for one of its stations (assuming, of course, that the under-construction rail line actually gets past downtown, or simply stops where its historic predecessor, the Oahu Railway terminated more than a century ago).

Here's the details and the court's description of the issues (scroll to the bottom), from the Hawaii Judiciary's web site.

[Barista's note: we won't be commenting on this one in detail, because this was our case when we were in private practice.]

Thursday May 18, 2023 – 10 a.m.

NOS.

SCAP-22-0000335 (Consolidated with Nos. SCAP-22-0000336,
SCAP-22-0000337, SCAP-22-0000338, SCAP-22-0000340,
SCAP-22-0000341, SCAP-22-0000343 SCAP-22-0000344,
SCAP-22-0000345, AND SCAP-22-0000352)

SCAP-22-0000335, SCAP-22-0000336, SCAP-22-0000337,
SCAP-22-0000340, SCAP-22-0000341, SCAP-22-0000343,
SCAP-22-0000344, AND SCAP-22-0000345

CITY AND COUNTY OF HONOLULU, acting by and through the HONOLULU AUTHORITY FOR RAPID TRANSPORTATION, Plaintiff/
Counterclaim Defendant-Appellee/Cross-Appellant, vs. VICTORIA WARD, LIMITED, a Delaware Corporation; et al., Defendants/Counterclaim Plaintiffs-Appellants/Cross-Appellees, and 1240 ALA MOANA, LLC, a Delaware limited liability company; et al., Defendants-Appellants/ Cross-Appellees, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association; et al., Defendants-Appellees/Cross-Appellees.

SCAP-22-0000338 CITY AND COUNTY OF HONOLULU, acting by and through the HONOLULU AUTHORITY FOR RAPID TRANSPORTATION, Plaintiff/Counterclaim Defendant-Appellee/Cross-Appellant, vs. VICTORIA WARD, LIMITED, a Delaware Corporation; et al., Defendants/Counterclaim Plaintiffs-Appellants/Cross-Appellees, and 1240 ALA MOANA, LLC, a Delaware limited liability company; et al., Defendants-Appellants/ Cross-Appellees, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association; et al., Defendants-Appellees/Cross-Appellees.

SCAP-22-0000352 CITY AND COUNTY OF HONOLULU, acting by and through the HONOLULU AUTHORITY FOR RAPID TRANSPORTATION, Plaintiff/Counterclaim Defendant-Appellant, vs. VICTORIA WARD, LIMITED, a Delaware Corporation; et al., Defendants/ Counterclaim Plaintiffs-Appellees, and 1240 ALA MOANA, LLC, a Delaware limited liability company; et al., Defendants-Appellees, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association; et al., Defendants-Appellees.

The above-captioned cases have been set for argument on the merits at:

Supreme Court Courtroom
Aliʻiōlani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813

The oral argument will also be livestreamed for public viewing via the Judiciary’s YouTube channel at YouTube.com/hawaiicourts.

Attorneys for City and County of Honolulu, acting by and through the Honolulu Authority for Rapid Transportation:

Terence J. O’Toole, Sharon V. Lovejoy, and Lindsay E. Orman, of Starn O’Toole Marcus & Fisher; Paul S. Aoki, and Rozelle A. Agag, Deputies Corporation Counsel

Attorneys for Victoria Ward, Limited, et al.:

Mark M. Murakami, Gregory W. Kugle, Nicholas K. Ernst, and Clinton K. Hamada of Damon Key Leong Kupchak Hastert

NOTE: Order Granting Application for Transfer, filed 10/13/22.

NOTE: Certificate of Recusal, by Associate Justice Paula A. Nakayama, filed 4/19/23.

NOTE: Order assigning Chief Judge of the Circuit Court of the First Circuit, R. Mark Browning due to recusal and Circuit Court of the First Circuit, Judge James S. Kawashima due to a vacancy, filed 4/19/23.

COURT: Recktenwald, C.J., McKenna, and Eddins, JJ., and Chief Circuit Judge Browning, in place of Nakayama, J., recused, and Circuit Judge Kawashima assigned by reason of vacancy

Brief Description:

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

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

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

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

The arguments will be live-streamed if you cannot make it in person to the court.

Condemnation 101 (2023), Redux

Missed out on the 2023 ALI-CLE Eminent Domain and Land Valuation Litigation Conference back in February in Austin, and the legendary "Condemnation 101" track?

Well, here's your chance to get the knowledge. On May 18, 2023, ALI-CLE is going live with a rebroadcast of that program, including real-time Q & A with the program Planning Co-Chairs.

As we've noted before, the Condemnation 101 program is a great "basic training" program for lawyers new to the eminent domain and takings practice. But it is also a fantastic refresher course for those experienced dirt lawyers looking to brush up on the fundamentals.

CLE credits are available, of course. And unlike the in-person program back in February, there's no danger of ice storm delays!

More about the program here, including registration information, fees, the agenda, and the faculty. And, just because you are a reader of this blog, you can get an additional $50 off the registration -- just enter COND50 in the box during checkout. Or, alternatively, bring a friend and get the group discount an even better deal.

We missed out on most of the Condemnation 101 program back in February because we had our own Chairing duties in the room next door. So we may be in the audience along side of you on May 18 for this very popular and useful program.

See you there.

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?

Tyler v. Hennepin County Previews: Get Yourself Prepared For The Next SCOTUS Takings Arguments

Here at our law firm, we're getting ready as one of our colleagues prepares to argue the Supreme Court's next takings case in a couple of weeks. Yes, this is what we've alternatively called the "home equity theft" or the "keep the change" case where government seizes property to satisfy the owner's tax debt, and after liquidation of the property and satisfaction of the debt, keeps any excess equity instead of returning the balance to the (former) homeowner.

The case is Tyler v. Hennepin County, No. 22-166, and it's set for argument on the last day of this term's argument calendar, Wednesday, April 26, 2023.

In the meantime you should check out the parties' merits briefs and the beaucoup amici briefs (mostly filed in support of the property owner) on the Court's docket.

But you should also see what others have to say, and how they are viewing the issues. Here are several upcoming programs and an article you might want to check out:

• Deep Dive and Amicus Review: Tyler v. Hennepin County (Pacific Legal Foundation [our firm] April 19, 2023, at 2:00 p.m. EDT/11:00 a.m. PDT)
• Courthouse Steps Preview: Tyler v. Hennepin County (Federalist Society, April 17, 2023, 1pm EDT)
• ABA publishes article by True North Law’s Steve Davis on Upcoming Property-Rights Case at the Supreme Court: Tyler v. Hennepin County (April 11, 2023, via True North Law and the ABA)

Again, because this is one of our firm's cases, I won't be commenting much and will simply point you to resources. (You already know what I think about the case.)

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!

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

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

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

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

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

Details:

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

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

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

RSVP: [email protected]

See you there!

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

Happy Birthday, Hugo!

Hugo Grotius, that is. Also known as Hugo de Groot. Born this day, April 10, 1583, in Delft, Netherlands. Happy 440th, Hugo.

Yes, he's a key figure in property rights as natural rights and international law, but most interestingly may have escaped an unjust confinement in the above-pictured box from Castle Loevestein.

Go here for that story. For more, see "Quest for the Hugo de Groot book chest."

Double-trouble: property rights maven and able to pull a Houdini? I am Groot!

"Property Rights Are Human Rights" - "Defending Private Property: Principles of Justice in Rothbard's Ethics of Liberty" (Dr. Wanjiru Njoya)

The Murray N. Rothbard Memorial Lecture, presented by Dr. Wanjiru Njoya. As noted on the Mises Institute's website:

Recorded at the 2023 Austrian Economics Research Conference hosted at the Mises Institute in Auburn, Alabama, March 16–18.

The Austrian Economics Research Conference is the international, interdisciplinary meeting of the Austrian School, bringing together leading scholars doing research in this vibrant and influential intellectual tradition. The conference is hosted by the Mises Institute at its campus in Auburn, Alabama, and is directed by Joseph Salerno, professor of economics at Pace University and academic vice president of the Mises Institute.

Join Us At The 22d Annual Texas Eminent Domain Conference, April 13-14, Austin

If you are in the Austin area (or anywhere in Texas for that matter), please consider joining us April 13 and 14, 2023 for the 22d Annual Texas Eminent Domain Conference.

Two days of great programming and talking shop, plus a chance to connect and re-connect with friends and colleagues. And, of course, all the things Austin has to offer. Yes were were there not that long ago, but come on...Austin is a great conference venue, right?

We're speaking about "National Eminent Domain and Takings Trends," and the balance of the program is pretty darn good also (see here or below for the full agenda).

Registration ongoing, but space is filling up fast so don't miss out.

See you there.

Agenda & Program, 22d Annual Texas Eminent Domain Conference (CLE Int'l), Austin, Apr. 13-14, 2023)

New Construction In California's Coastal Zone Must Be Designed For Future Removal

You already know what the Court of Appeal held, don't you?

Hurst v. Cal. Coastal Comm'n, No. D079549 (Cal. Ct. App. Mar. 20, 2023) (unpub.)

CA8: Where A State's Just Comp Remedy Is Inadequate, You Can Sue For Injunctive Relief For A Taking

Check out the U.S. Court of Appeals for the Eighth Circuit's opinion in Pharmaceutical Research and Manufacturers of America v. Williams, No. 21-1731 (Apr. 3, 2023), where the court reinstated a complaint dismissed by the district court for lack of standing.

The Eighth Circuit held that even though the "usual" remedy for a regulatory taking is just compensation, where a state's just compensation remedy would be inadequate, the property owner may seek equitable relief such as a declaratory judgment or an injunction. [Disclosure: our law firm filed an amicus brief in support of the plaintiffs, arguing that equitable is available in takings claims.] 

The complaint challenged Minnesota’s Insulin Affordability Act, which requires insulin manufacturers to provide insulin at no charge to eligible Minnesotans in 90-day increments for up to one year. The manufacturers argued that the Act works a taking, and sought to enjoin its enforcement. Note that the complaint was brought in federal court, against state officials in their official capacities. So the real battle here was over the forum: if compensation is the only available relief, then the Eleventh Amendment means the suit cannot be brought in federal court (at least as the current state of 11th Amendment law stands). But if declaratory or prospective injunctive relief is okay, then the Ex parte Young exception applies and green light to federal court action.

The District of Minnesota held that equitable relief was unavailable, based on its misreading of Knick v. Township of Scott, which suggested that "equitable relief is generally unavailable" for a takings claim "[a]s long as an adequate provision for obtaining just compensation exists." The District Court held that the plaintiffs could have obtained just compensation in an inverse condemnation action in the Minnesota courts (yes, Minnesota uses the mandamus remedy which is not, technically speaking, "inverse condemnation," but close enough - the court held that property owners can get money in Minnesota courts for takings).

The Eighth Circuit, however, recognized the issue was the adequacy of this remedy -- not merely its existence -- because "Knick does not hold that every state’s compensation remedy is adequate in a particular situation; implicit in Knick is the requirement that just compensation must be available to petitioners seeking a remedy." Slip op. at 11. To determine adequacy, the remedy must be "practical and efficient." Slip op. at 12. 

And that's where the district court's analysis fell short. Because the Act requires indefinite periodic donations of private property, the repetitive nature of the taking would require the plaintiffs to keep on suing for just compensation claims, ad infinitum. The Eighth Circuit held that state court compensation would not be an adequate remedy, given the endless and repetitive nature of the taking:

An inverse condemnation action to reimburse a manufacturer for each discrete alleged taking is incapable of compensating the manufacturers for the repetitive, future takings that will occur under the Act’s requirements. By contrast, equitable relief would protect manufacturers from those future harms.

Slip op. 18.

The court also rejected Minnesota's arguments that the Eleventh Amendment barred jurisdiction, and that Ex parte Young does not apply to takings claims because of the state’s "special sovereignty interest" in eminent domain. The court held that where there is no adequate remedy at law, and where a takings claimant seeks a prospective injunction that will not result in payment from the state’s treasury, the Ex parte Young exception applies and the Eleventh Amendment is no bar to a federal court action.

Pharmaceutical Research and Manufacturers of America v. Williams, No. 21-1731 (8th Cir. Apr. 3, 2023)

Bad Dog! Drug K-9 Putting Paws On Car Is A "Search" Because It's A Trespass To Chattels

Doc Brown ... err Bill Blackstone approves

Today's case, State of Idaho v. Dorff, No. 48119 (Mar. 20, 2023) involves the Fourth Amendment, not the Fifth.

But ever since the U.S. Supreme Court returned to a property-based view of the Search and Seizure clause of the Fourth, property rights mavens' ears perk up any time a court tries to figure out whether an action by the police violated a suspect's property rights.

Quick facts: traffic stop after making a turn without signaling. Nero, the officer's drug dog, lit up after circling the car, and at one point laid its paws on the outside of the vehicle:

The K-9 officer circled Dorff’s vehicle twice with Nero. Nero never entered the interior compartment of the vehicle. However, as Nero circled the vehicle, Nero directed his nose close to the vehicle’s seams (nearly touching the vehicle in many instances); entered the wheel well areas with his snout; and reached for the vehicle’s undercarriage with the same. On Nero’s second pass, body-camera footage from the on-scene officers shows Nero made two potential contacts, and one explicit contact, with the vehicle’s exterior surface: first, on the rear passenger side of the vehicle (briefly as he jumped up); second, on the front passenger side of the vehicle (again, briefly as he jumped up); and third, on the front driver side of the vehicle—this time planting his front paws to stand up on the door and window as he sniffed the vehicle’s upper seams. During this time, the K-9 officer made upward gestures, purportedly “[p]resenting areas for [Nero] to sniff.” The K-9 officer later testified that Nero alerted during his explicit contact with Dorff’s vehicle, i.e., after Nero stood up and put his front paws on the front driver side door and window.

Slip op. at 2. The human officer then searched the car and lo and behold, found meth.

The defendant moved to suppress the evidence, arguing it was the product of an illegal search, because the police should have first obtained a warrant. Motion denied, defendant pleaded guilty conditioned on his right to appeal the denial of his motion to suppress.

A divided Idaho Supreme Court vacated the conviction. The court has previously concluded that a drug dog putting any part of itself into a vehicle is a search, and in this case extended that rationale to the exterior of a vehicle. A car qualifies as a Fourth Amendment "effect" and even though the U.S. Supreme Court since the late 1960's focused on a suspect's expectation-of-privacy under Katz v. United States, 389 U.S. 347 (1967), the Court has never abandoned a property-based view of the Fourth Amendment. See United States v. Jones, 565 U.S. 400 (2012).

The Idaho court concluded that Nero's laying of his paws on the vehicle constituted a common-law trespass to chattels. The court noted that Idaho has adopted the common law of England "so far as the same is not inconsistent with the provisions of the constitution and the laws of the United States[,]" slip op. at 7, and that in the 18th Century (according to Blackstone), personal property took on an elevated status from its second-class feudal position, and "courts of England regarded 'a man's personalty [(i.e., personal property)] in a light nearly, if not quite, equal to his realty [(i.e., real property)].'" Slip op. at 8 (quoting 2 William Blackstone, Commentaries of the Laws of England 385 (1766)).

A "trespass" to said chattels signifies any transgression, even a minor one. And for purposes of the Fourth Amendment test, according to the Idaho court, it doesn't matter whether there's any harm:

Notably, there is a “division of opinion” among scholars, and “a surprising dearth of authority” (including in Idaho) on whether a trespass to chattel was actionable when “the defendant merely interferes” with a chattel “without doing any harm—as where, for example, he merely lays hands upon the plaintiff’s horse, or sits in his car[.]” Id. at 87. Nevertheless, whether a “trespass” was actionable in the absence of damages at common law is beside the point for purposes of determining legal relations under the Fourth Amendment. See RESTATEMENT (FIRST) OF TORTS § 217 cmt. a (1934) (explaining that a “trespass” to chattel, “though not actionable . . . may nevertheless be important in the determination of the legal relations of the parties.”). The property-based test is only concerned with when a trespass occurs—not whether that particular trespass was actionable, i.e., whether that trespass could be remedied through a cause of action at common law. See Jones, 565 U.S. at 405.

Slip op. at 9. Although brushing up against your chattel while walking by (slip op. at 11), but mere "intermeddling" -- where the trespasser "without privilege or consent, rests their hand on" your chattel -- is sufficient:

It is also the difference between a dog’s tail that brushes against the bumper of your vehicle as it walks by—and a dog who, without privilege or consent, approaches your vehicle to jump on its roof, sit on its hood, stand on its window or door—or enter into your vehicle, see, e.g., Randall, 169 Idaho at 368–69, 496 P.3d at 854–55; Howard, 169 Idaho at 382, 496 P.3d at 868.

In other words, although personal property interests protected by the Fourth Amendment, such as the right to possess and exclude, are not implicated by forms of contact that are less than “intermeddling”—the Amendment is certainly implicated in situations like those above, where no one would dispute the dignitary interest in maintaining the inviolability of one’s chattel. If someone directs their hand on or into your purse, or their dog jumps on or into your vehicle, without privilege or consent, no one (including common-sense) could doubt your right to protest and exclaim: “Hey! Hands-off my purse!” or “Hey! Get your dog off my car!” See RESTATEMENT (FIRST) OF TORTS § 217 cmt. a (explaining that while a “trespass to another’s chattel” might not be actionable at common law without damage it can, in certain circumstances, afford “the possessor a privilege to use force to defend his interest in its exclusive possession”); cf. Jardines, 569 U.S. at 13 (Kagan, J., concurring) (noting that property and privacy concepts can “align” as the “law of property naturally enough influences our shared social expectations of what places should be free from governmental incursions” (cleaned up)).

Slip op. at 12.  

Remember that, Nero (bad dog)!

State of Idaho v. Dorff, No. 48119 (Idaho Mar. 20, 2023)

Bust A Deal, Face The Wheel: NYC Rendering Commercial Lease Guaranty Clauses Unenforceable For Co-19 Violates Contracts Clause

This just in: the U.S. District Court for the Southern District of New York has issued this Opinion & Order in the case which challenges New York City's rendering "guaranty clauses" in commercial leases unenforceable due to the declared Co-19 emergency.

This is a case we've been following. Earlier, the Second Circuit vacated the district court's dismissal of the case, holding that the city's ordinance rendering forever unenforceable certain provisions in commercial leases:

A provision in a commercial lease or other rental agreement involving real property located within the city that provides for one or more natural persons who are not the tenant under such agreement to become, upon the occurrence of a default or other event, wholly or partially personally liable for payment of rent, utility expenses or taxes owed by the tenant under such agreement, or fees and charges relating to routine building maintenance owed by the tenant under such agreement, shall not be enforceable against such natural persons if the conditions of paragraph 1 and 2 are satisfied.

The district court held that the plaintiffs have Article III standing, because they have been permanently barred from ever enforcing these guaranty clauses. Slip op. at 12 ("This kind of 'monetary injury' to the Plaintiffs—permanently barring them from collecting more than a hundred thousand dollars in unpaid rent for a prime commercial tenancy in the heart of Manhattan—plainly establishes that they ha[ve] suffered a concrete injury in fact under Article III.'"). The court also concluded that the remedy the plaintiffs seek -- invalidation -- would redress that injury, because freed of the city's prohibition, plaintiffs could then attempt to enforce the clauses in their leases.

The heart of the ruling starts of page 14 of the slip opinion. The bottom line is that the court concluded the ordinance is a substantial impairment of the commercial owner/tenant contracts, because

Yes, "the City's effort to mitigate the devastating economic impact of the COVID-19 pandemic constituted a legitimate public purpose[,]" slip op. at 16, but that does not get the city off the hook, because "the Court finds that the Law fails to withstand means-ends scrutiny under the final prong of the Sullivan test." Id. 

The court concluded that the city failed to support with additional evidence its decision to place the entire burden of alleviating the emergency on property owners. The city argued that the ordinance merely encouraged owners to renegotiate their leases on terms more favorable to their tenants, but the court wasn't buying it: "But it does not explain how the City concluded, with a change to the commercial leases rendering guaranty clauses permanently unenforceable, that guarantors would have any incentive based on the Law to enter negotiations with landlords regarding unpaid rent." Slip op. at 28.

There were four other reasons set out in the Opinion & Order, and the one we're going to focus on is set out starting on page 31. There, the court held that the ordinance does not compensate property owners for unpaid rent. Unlike other laws of this nature which included what we might call "mitigation" provisions (and were temporary), the court noted that New York's ordinance did no such thing, and permanently wiped out the obligation and did not contain any provision mitigating the damage to the owners, or otherwise providing for compensation:

The record now confirms that Plaintiff Bochner has been unable to recover unpaid rent amounts totaling approximately $110,000, and that, via another business account, he paid $35,000 in taxes for the property due July 1, 2020. Dkt. 104, Ex. NN at 46. As neither party disputes, the Guaranty Law itself provides no assistance to landlords like Bochner. The City, however, argues that the Court should concentrate on the fact that Bochner did not pay property takes on 287 7th Avenue from a personal account, see Def. Mem. at 20 n.12, and that Plaintiff 7th Avenue was able to obtain a pandemic relief loan from the SBA, see id. at 24. The City also emphasizes Plaintiffs were able to borrow from other successful business ventures, and that they “weather[ed] the pandemic” in other ways, including because the tenant left behind restaurant fixtures which were then leased along with the commercial space to a different restaurant in October 2020. Def. 56.1 ¶¶ 102–03; Dkt. 104, Ex. NN 34:24–35:18, 55:17–18.

Such obfuscation is unavailing. The fact remains that Plaintiffs here were damaged, to the tune of approximately $150,000, and have not been compensated—precisely the concern that the Second Circuit wanted the City to address on remand. As to the SBA disaster loan, Bochner explained that it has not been forgiven, and that he must pay “four [or] five” percent interest until it is fully paid off. Dkt. 104, Def. Ex. VV, at 46–47.

Slip op. at 32.  

No way the city quits, so next stop we presume is back with the Second Circuit.

Opinion & Order, Melendez v. City of New York, No. 1:20-cv-05301-RA (S.D.N.Y. Mar. 31, 2023)52

"Larry Steven Wilkins and Jane Stanton wanted quiet titles and a quiet road." 6-3 SCOTUS Says Federal Quiet Title Act Statute Of Limitations Is Not Jurisdictional

We all know by now that the Supreme Court recently has been on a tear about federal statutes of limitations, and is policing up a lot of earlier too-casual language in some of its opinions about whether this SOL or that SOL is "jurisdictional." In a series of opinions over the last few years, the Court has almost universally confirmed that it used the term rather loosely, and that upon further review, many statutes of limitations are not "jurisdictional" but are "claims processing rules."

The Court's 6-3 opinion in Wilkins v. United States, No. 21-1164 (Mar. 28, 2023) is another in a line of decisions so holding. Wilkins involves the Federal Quiet Title Act's 12-year SOL (see this preview of the issues by our friend and colleague Stephen Davis). The bottom line is that Wilkins concluded the QTA's SOL is a claims processing rule because Congress did not "clearly state" that the SOL is jurisdictional.

We'll leave it to you to read the six-Justice majority opinion authored by Justice Sotomayor, and the three-Justice dissent authored by Justice Thomas, because this case is one where our law firm represents a party, the prevailing petitioners. Our colleague Jeffrey McCoy argued the case a couple of months ago (nice job, Jeff!).

Unfortunately, a lot of the reporting on the decision treat it as a wonky, technical issue (which, admittedly, it is), but in so doing regrettably overlook the importance of the case. For the reasons why we think it is very important, read this. And for some of the reporting that gets why the case is important (and which note the somewhat unexpected line up of Justices) see:

• Liberals unite with Trump Supreme Court nominees in decision against federal land grab (Washington Examiner)
  
• Victory for Property Rights in Highly Technical Supreme Court Decision (Ilya Somin, Volokh Conspiracy)

The bottom line is that the property owners will get their day in court, and not get tossed out for an arcane, overly-technical reason. And that sounds like a very good thing.

Wilkins v. United States, No. 21-1164 (U.S. Mar, 28, 2023)

Save The Date: Oct 26-27, 2023: Brigham-Kanner Property Rights Conference To Honor 20th B-K Prizewinner, Prof Greg Alexander

As noted here ("Professor Gregory S. Alexander to Be Honored with Annual Brigham-Kanner Property Rights Prize"), the William and Mary Law School has announced that Cornell lawprof Gregory Alexander will be awarded the Brigham-Kanner Property Rights Prize at the 20th edition of the B-K Property Rights Conference, October 26-27, 2023, in Williamsburg, Virginia.

The Conference agenda and speaker list has not yet been released (but we know the organizers are getting close!), but we can assure you that the topics of discussion will be of the usual high quality and interest.

Takings and property mavens already likely know about Professor Alexander's lifetime of scholarship on property law, but here's a reminder:

An internationally renowned expert in property law and theory, Gregory Alexander, has taught at Cornell Law School since 1985.

After graduating from Northwestern University School of Law, Alexander clerked on the U.S. Court of Appeals for the Sixth Circuit. He then spent a year as a Bigelow Fellow at the University of Chicago Law School. He subsequently became a professor at the University of Georgia School of Law, remaining there until joining the Cornell faculty.

Among Alexander’s many professional experiences, he has been a Fellow at the Center for Advanced Study in the Behavioral Science, in Palo Alto, California and at the Max-Planck-Institutes for Comparative Law, in Hamburg and Heidelberg, Germany. He also has taught at UCLA, Virginia, and Harvard Law Schools, and was the Herbert Smith Distinguished Visiting Fellow at Cambridge University.

Alexander is a prolific and recognized writer, the winner of the American Publishers Association's 1997 Best Book of the Year in Law award for his work, “Commodity and Propriety.” His other books include “The Global Debate Over Constitutional Property: Lessons for American Takings Jurisprudence” (Chicago), “Community & Property” (with Eduardo Peñalver) (Oxford), and “Properties of Property” (with Hanoch Dagan) (Aspen). His most recent book is “An Introduction to Property Theory” (with Eduardo Peñalver) (Cambridge).

Be sure to make your plans to join us in the fall. And stay tuned here for more details.

New Cert Petition: Do You Need Statutory Authorization To Sue For A Taking?

Check this out, a recently-filed cert petition in a case we've been following, filed by our friends and colleagues at the Institute for Justice. This one involves an issue we've been on top of also, most recently in these two cases (see here and here).

That is, what does the Supreme Court's description of the Takings Clause as "self-executing" actually mean? Do you need statutory authorization in order to bring a takings or just compensation claim, or can you sue directly under the Constitution?

In Devillier v. Texas, No. 21-40750 (Nov. 12, 2022), the Fifth Circuit's cryptic opinion concluded that "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[.]" Slip op. at 1-2. Here's the entirety of the decision (minus footnotes):

The State of Texas appeals the district court’s decision that Plaintiffs’ federal Taking Clause claims against the State may proceed in federal court. Because we hold that the Fifth Amendment Takings Clause as applied to the states through the Fourteenth Amendment does not provide a right of action for takings claims against a state, we VACATE the district court’s decision for want of jurisdiction and REMAND with instructions to return this case to the state courts. The Supreme Court of Texas recognizes takings claims under the federal and state constitutions, with differing remedies and constraints turning on the character and nature of the taking; nothing in this description of Texas law is intended to replace its role as the sole determinant of Texas state law. As such, this Court lacks jurisdiction to review these claims.

Here's the Question Presented by the Petition:

In First English Evangelical Lutheran Church v. County of Los Angeles, this Court recognized that the Fifth Amendment’s Takings Clause was “self-executing” and that “[s]tatutory recognition was not necessary” for claims for just compensation because they “are grounded in the Constitution itself[.]” 482 U.S. 304, 315 (1987). Since First English, several state courts of last resort have held that the self-executing nature of the Takings Clause requires them to entertain claims directly under the Clause without the need for statutory authorization. Two federal Circuits, the Fifth and the Ninth, disagree and have held that claims for just compensation are only available if they are legislatively authorized. The question presented is:

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?

Follow along on the Court's docket here. We sure will be.

Denying Uses (But Allowing Discretionary Ad Hoc Exceptions) Isn't A Recipe For Rational Land Use

If a zoning statute or ordinance sets out the uses permitted in a zone, and the uses not permitted in the zone, and a property owner wants to make a use not permitted in the zone, all she needs to do is apply for a variance, or a Conditional Use Permit, or a nonconforming use permit, or a Special Use Permit, right? After all, isn't the point of these exceptions to bright-line use prohibitions to build in a large degree of flexibility and afford front-line regulators in the right circumstances the discretion to grant a use the legislature prohibited? One size does not fit all, does it? 

That was the issue that closely divided the Hawaii Supreme Court in Hoomoana Foundation v. Land Use Comm'n, No. SCWC-17-181 (Mar. 10, 2023). In a 3-2 opinion, the court concluded that when a use is expressly barred by a zoning statute (and yes, here it is a zoning statute because Hawaii has state-controlled zoning) you cannot ask for a Special Permit to make that use. The only way you can make a use expressly prohibited by the statute is to change the parcel's zoning.

The Case and the Issue

Here's the story. The Foundation wanted to set up an "overnight campground for homeless and commercial campers" (slip op. at 3) on land it leased, which was zoned by the State as Agriculture (B-rated soil, if you are interested):

16. Under Ho'omoana's proposal, the Project would consist of 2 acres, while the remaining adjacent 5.9 acres would be reserved as an agricultural field to be used by the campground occupants for therapy and work. It is envisioned that the [homeless] campers may work in the agricultural field to supplement their rental fees. Homeless campers are expected to pay $10 a night, while the commercial campers would be charged more. The camping fees are anticipated to underwrite the expenses of the campground. Although some of the campers may wish to participate in farming activities on the Property, there is no guarantee that the agricultural field would result in future agricultural productivity nor is there a current requirement placed upon the campers to engage in agricultural pursuits.

17. The 2-acre area of the Project would have up to 26 pods for tents accommodating up to 80 people. Tents are to be provided by the campers. It is intended that both the homeless campers and the commercial campers would be camping alongside each other. In addition to the pods, showers, toilet facilities, fire pits or camp stove areas, a paved parking area, and a charging station for campers are proposed. Homeless campers would be allowed to stay for two to three months or more as approved by the campground manager. It is unclear how long commercial campers would be allowed to use the grounds, but any stay would need to be approved by the manager.

Slip op. at 4.

Problem is, the Agricultural district doesn't seem to allow for overnight camping. The statute says that recreational uses like day camping is permitted, but expressly excludes "overnight camps" as allowed uses:

Within the agricultural district ... all lands ... shall be restricted to the following permitted uses: ... Public and private open area types of recreational uses, including day camps ... but not including ... overnight camps[.]

Haw. Rev. Stat. § 205-4.5(a)(6).

But an adjacent statute also allows a request for a Special Use Permit, for "unusual and reasonable uses within agricultural and rural districts other than those for which the district is classified." Haw. Rev. Stat. § 205-6. So what's the deal, can a county Planning Commission or the state Land Use Commission consider a special use permit to allow a use expressly prohibited by the zoning statute?

What Happened

The Foundation thought so, and asked the Maui County Planning Commission for a Special Permit to allow the overnight homeless and commercial campground project as a "unusual and reasonable use." The Foundation also had behind it a Hawaii Supreme Court case, Mahaulepu v. Land Use Comm'n, 71 Haw. 332, 790 P.2d 906 (1990), which held that a use not permitted under section 205-4.5(a)(6) might well be authorized via a special use permit.

But neighbors who object to the project asked the State Land Use Commission for a declaratory ruling that the proposed use of Agricultural land requires a zoning change (known in the parlance of Hawaii's statewide zoning scheme as a "boundary amendment"), and cannot be accomplished ad hoc by a discretionary special use permit.

The LUC agreed with the neighbors, concluding that the overnight camping project could not be approved by way of a special use permit, but that there must be a change in the zoning in order to allow it. By expressly prohibiting "overnight camping," the legislature had, in effect, already made the determination that overnight camping was not an unusual and reasonable use. Thus, no special use permit.

The Foundation appealed to a state trial court under the Administrative Procedures Act. It argued that the special use permit statute doesn't expressly preclude asking for an exception for uses prohibited by the zoning, and moreover, that Mahahulepu case held that doing so is just fine. The trial court bought the Foundation's argument and reversed the Land Use Commission.

Next stop, the Hawaii Intermediate Court of Appeals, which seemed to go both ways on the issues:

The ICA concluded it was bound by Mahaʻulepu, making the LUC’s decision contradicting Mahaʻulepu palpably erroneous. However, the ICA observed that the specific exclusion of overnight camps should control over the general availability of special permits in keeping with canons of statutory construction and furthering the statutory scheme.

Slip op. at 11.

Majority: The Statute Bars Overnight Camping, And That's That

Final stop, discretionary review by the Hawaii Supreme Court. There, a three-Justice majority (Nakayama, Wilson, Eddins) overruled the Mahahulepu case, and concluded that no, you cannot ask for a special use permit if the use you are seeking is expressly prohibited in the zoning statute:

HRS §§ 205-4.5(a)(6) and 205-6 are clear: the “public and private open area types of recreational uses” of “dragstrips, airports, drive-in theaters, golf courses, golf driving ranges, country clubs, and overnight camps” are not permitted on class A and B agricultural land, and cannot be permitted by special use permit.

Slip op. at 19-20 (footnote omitted).

Relying on statutory text, legislative history, and the canon of statutory construction that the specific controls over the general, the majority concluded that the point of chapter 205 is the protection and preservation of agricultural lands, and allowing a use to be made of agricultural land that is expressly prohibited by the zoning statute would not "promote the effectiveness and objectives of this chapter" as the special use permit statute requires. Slip op. at 18.

Having concluded that a special use permit isn't the way one might ask to establish an overnight campground on agricultural land, the majority held that the only way for the Foundation to get its overnight camping project approved would be to seek a "boundary amendment" (aka zoning change) to change the zoning from Agricultural "to one where recreational overnight camps are permitted." Slip op. at 21.

As for Mahahulepu? Overruled. That decision was the product of "flawed" reasoning (that case held that golf courses, another use expressly prohibited by the statute on Agricultural land, could be approved by way of a special use permit), and "failed to engage with the plain language of [the statute] prohibiting certain uses[.]" Slip op. at 22.

Dissent: The Statute Prohibits "Recreational" Uses, Which This Isn't

Two Justices (Chief Justice Recktenwald and Justice McKenna) saw it differently. Stare decisis cautions against lightly overruling cases that are only 30 years old, "[w]hether or not we agree with its reasoning[.]" Dissent at 2. After all, the legislature has had ample time to supersede Mahahulepu, but it hasn't done so.

More interestingly, the dissenters did not view the proposal for an overnight homeless campground as a "recreational use" included in the statute's express prohibition. Dissent at 9-10 ("An overnight campground for unsheltered persons is not a 'recreational' use."). Thus, at least that part of the project might be subject to approval on Agricultural land, because the statute only bars "recreational uses" (and then lists out examples, including overnight camping. The dissenters also were troubled by the Land Use Commission barring the Foundation from intervening in the declaratory ruling process initiated by the neighbors, "some of whom asserted 'not in my backyard' concerns. Dissent at 14-15 (footnote omitted).

Some Thoughts On Bright Lines and Ad Hoccery

Overall, this one isn't terribly surprising, given the Hawaii Supreme Court's wanting to keep a tight rein on land use issues, and its record of reading exceptions to the court's view of the meaning of statutes and ordinances very narrowly. The court, for example, falls squarely in the "narrow" approach to variances.

And we have to agree more with the majority on this one, but for slightly different reasons. We don't really focus on the statutory interpretation as the majority reasoned (after all, it seems you might read the statute both as the majority and as the dissenters did). Instead, we see this one as a push in the correct direction on a larger-scope issue. That being what we see as a trend in land use regulation to paint with a very broad brush in a statute or ordinance, and then rely on administrative or agency officials to exercise discretion to craft ad hoc exceptions. 

To us, this is a bad trend. The problem with "ban use X by law, but allow a discretionary process that might allow use X" is that it shifts the locus of land use regulation from elected officials and legislative judgments to discretionary administrative determinations made by unelected officials (aka bureaucrats). It also seems to favor old-hand insiders who know how to play the system, legally or otherwise. It might not matter whether you can read the law, but it does matter who you know at the Planning Commission or the Land Use Commission.

Bear with us while we play this out. Let's say the legislature has decided to prohibit certain uses in a certain zone and writes the statute or the ordinance that way. Landowners may not like the restrictions because, well, they are restrictions on their use of their land, but at least having a clear line about what is allowed and what isn't fixes a position to which property owners can react and plan. But let's also say that the legislature also includes in the law that in specific cases, an administrative official has the discretion to effectively overrule the legislature's judgment and permit a use that is expressly prohibited. This leaves what should be legislative judgments up to the discretion of nonlegislative officials. 

What's wrong with that, you ask? After all, as noted at the start of this post, one size does not fit all and shouldn't the law itself account for situations in the grey areas that cannot be accounted for when a legislature regulates property? Don't we want to provide landowners with the chance of making a certain use of their property even though a zoning ordinance or statute prohibits it? Flexibility!

It's All Discretionary, Son

In our view, the "everything is discretionary" approach is a recipe for administrative gamesmanship, and runs counter to the idea that to be a valid exercise of police powers, land use regulation should be comprehensive and part of a bigger plan. Maybe more importantly, this type of scheme not only makes arbitrary decisions more likely, it allows government to create "permit purgatories" where property owners are sent to wither on the vine, especially where the legislatively-adopted regulation bars all uses.

In those cases, instead of having to face the takings music for a regulation that prohibits all economic uses, the government gets off the hook if it can point a court to the mere possibility that it might waive, overlook, or vary the restriction. And once a court hears from the government that there is some theoretical possibility that the use prohibited by the statute or ordinance might be allowed if only the property owner asked the right person in the right way (and that person makes a response that can be deemed "final") the judge's interest switch turns to "off" and the court can confidently kick the case for being unripe. We are referring of course to the "final decision" requirement of Williamson County. Because when there is any discretion in the process, courts are loathe to evaluate takings claims on the merits, on the theory that the government might -- just might! -- exercise its discretion and allow what its own statutes or ordinances plainly and expressly prohibit.

Discretion is Often Designed for Permit Purgatory And Takings Avoidance

Perhaps the most glaring example of how this dynamic enables administrative and judicial gamesmanship is California Public Resources Code § 30010, which has been interpreted as providing both the California Coastal Commission and local governments the complete and total discretion to overrule or ignore any restrictive regulation in the coastal zone, if the CCC or a local government can be convinced by the property owner that to apply the statute or ordinance as written would result in a taking. And believe us, the California Coastal Act and local coastal ordinances are full of restrictions that prohibit any and all economically-beneficial uses. But because section 30010 seems to leave open the possibility that these restrictions may be waived ad hoc (if only the property owner asked the right person the right way), courts never get to the merits. "Just ask for an exemption," they counsel landowners, ignoring protestations that these discretionary approvals are more imaginary than a real possibility, and that assembling a request to exercise discretion can be eye-wateringly expensive.

You don't have to be in the land use game all that long to see the evil genius in this, at least the way the courts read this statute: not only does this put the owner into permit purgatory where government is incentivized to avoid taking a concrete position about what its restrictions allow and what they prohibit, this procedure forces a property owner to present her constitutional takings claims to the very government that she claims is violating her rights, upon pain of a 12(b)(1) or 12(b)(6) dismissal if she files a takings lawsuit before the government responds. Yet the Supreme Court says it does not require exhaustion of administrative remedies in takings cases.

What About Euclid?

But these discretionary purgatories take the foundation of the constitutionality of zoning as expressed in Euclid -- the assumption that land use regulations are constitutional because they are the product of big picture thinking and a comprehensive plan -- and inverts it so that every decision is discretionary and case-by-case. The reality is that these "exceptions" are granted rarely, and the process isn't so much designed to get to a "yes" or "no" on what uses might be allowed on a particular parcel, but are often there more as a "takings avoidance" tool like section 30010, where property owners are forced into an open-ended maze and the government does everything it can to strenuously avoid making any decision. That way, the owner remains stuck in the discretionary maze, never to receive an answer, until the owner throws in the towel, after bleeding out financially or spiritually.

This is rational land use planning?

It isn't, but most federal courts have accepted it as the way the land regulation game is played. So kudos Hawaii Supreme Court, for holding the legislature to what it said in the statute, and not allowing unelected members of a county planning commission or the state Land Use Commission decide that in this case, the statute is meaningless.

Hoomoana Foundation v. Land Use Comm'n, No. SCWC-17-0000181 (Haw. Mar. 10, 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)

Catholic U Law School Student Scholar: "Eychaner v. City of Chicago: Repercussions after The Supreme Court refuses to take up a Takings Clause Reconsideration"

Remember that case from a couple of years back, where the Supreme Court, by a tantalizingly close vote, declined to grant a cert petition seeking review of an Illinois decision that preventing future blight was a sufficiently public use to support a redevelopment taking? 

A law student at Catholic U. law school recently made a presentation on the case and the issues as part of the Student Scholars Series, and the law school has kindly made the video available. More here.

We think it is fantastic both that law students are examining these issues, and that the law school encourages and promotes their work. It gives us comfort for the future of the profession, and the Dirt Law Bar.

Well done, Mr. Tocchio!

Property Owner's SCOTUS Merits Brief: "Under no circumstances can government have an unbounded ability to confiscate entire properties of any size for even the most minimal tax debts."

Here's the merits brief, filed yesterday in the above-depicted Court by our law firm colleagues, headed by Counsel of Record Christina Martin in Tyler v. Hennepin County, No. 22-166, a case and an issue we've been following closely. This is the one, where, as recounted in the petition:

Hennepin County confiscated 93-year-old Geraldine Tyler’s former home as payment for approximately $15,000 in property taxes, penalties, interest, and costs. The County sold the home for $40,000, and, consistent with a Minnesota forfeiture statute, kept all proceeds, including the $25,000 that exceeded Tyler’s debt as a windfall for the public. In all states, municipalities may take real property and sell it to collect payment for property tax debts. Most states allow the government to keep only as much as it is owed; any surplus proceeds after collecting the debt belong to the former owner. But in Minnesota and a dozen other states, local governments take absolute title, extinguishing the owner’s equity in exchange only for cancelling a smaller tax debt, code enforcement fine, or debt to government agencies.

Because this is one of ours, we won't go into it in detail, and leave it to you to read and review. The Questions Presented:

1. Whether taking and selling a home to satisfy a debt to the government, and keeping the surplus value as a windfall, violates the Takings Clause?

2. Whether the forfeiture of property worth far more than needed to satisfy a debt plus, interest, penalties, and costs, is a fine within the meaning of the Eighth Amendment?

We shall continue to follow along with the case and the to-be-filed amicus and merits briefs (or you may follow the Court's docket here). 

This case is the third of our firm's which the Court has granted on property issues this Term (Sackett and Wilkins being the other two).

Brief for Petitioner, Tyler v. Hennepin County, No. 22-166 (U.S. Feb. 27, 2023)

Happy (?) 200th Anniversary, M'Intosh

The Chief Justice Wants YOU to attend this webinar.

We try to remember anniversaries and birthdays. Some welcome, like the recent 100th of Pennsylvania Coal v. Mahon. Some maybe not so welcome, like this, the 200th anniversary of Johnson and Graham's Lessee v. M'Intosh, 21 U.S. (7 Wheat.) 543 (Feb. 28, 1823).

That's the decision in which the Supreme Court, in an opinion authored by Chief Justice John Marshall (noted above, giving us the finger), held:

Upon this principle the North American Indians could have acquired no proprietary interest in the vast tracts of territory which they wandered over; and their right to the lands on which they hunted, could not be considered as superior to that which is acquired to the sea by fishing in it. The use in the one case, as well as the other, is not exclusive. According to every theory of property, the Indians had not individual rights to land; nor had they any collectively, or in their national capacity; for the lands occupied by each tribe were not used by them in such a manner as to prevent their being appropriated by a people of cultivators. All the proprietary rights of civilized nations on this continent are founded on this principle. The right derived from discovery and conquest, can rest on no other basis; and all existing titles depend on the fundamental title of the crown by discovery.

Id. at 569-570 (footnote omitted).

Now, we're not experts in this topic. But we know some who are. And tomorrow at 12 noon ET, they are putting on a webinar: "Johnson v. M'Intosh: Reflections on the 200th Anniversary of a Foundational Case on Property Law and Indigenous Rights in the United States."

Here's the description:

Johnson v. M'Intosh, decided in 1823, dealt with so-called acquisition by discovery and conquest and the need to choose between competing claims to property ownership from divergent chains of title, consequently affecting the rights of indigenous peoples and the rules governing transfer of property in the early days of the United States. It remains a controversial and influential decision, shaping the legal framework around indigenous land rights to this day. Join the Tribal Law & Economics Program and its panel of experts for a discussion of the case.

Thank you to the speakers (lawprofs Bethany Berger, Eric Claeys, Adam Crepelle, and Robert Miller), and to George Mason's Law & Economics Center for putting this on.

We've already registered, and suggest you do as well.

Johnson and Graham's Lessee v. M'Intosh, 21 U.S. (7 Wheat.) 543 (1823)

The Fenwicks, "America's only Afro-Centric Yiddish Ska Band," With The Property Rights Anthem, "Preeminent Domain"

Would not have guessed that The Fenwicks, described as "America's only Afro-Celtic Yiddish Ska band," and compared to "Oingo Boingo on steroids" would have a song about eminent domain & property rights, "Preeminent Domain."

But there it is. Check it out.

New Article: "Toward Principled Background Principles in Takings Law" (Strahilevitz & Hansen)

Check this out, a new article co-authored by a federal judge's law clerk and lawprof Lior Strahilevitz (Chicago). With the title, "Toward Principled Background Principles in Takings Law" are we going to read it? You bet. (Unlike a lot of new scholarship that we post here, we read this one immediately.)

Here's the Abstract:

Blunders made by lawyers, judges, and scholars have caused the Supreme Court’s recent opinion in Cedar Point Nursery v. Hassid to be deeply misunderstood. In Cedar Point, the Court re-wrote takings law by treating temporary and part-time entries onto private property as per se takings. Prior to Cedar Point these sorts of government-authorized physical entries would have been evaluated under a balancing framework that almost invariably enabled the government to prevail. As it happens, there were two well-established rules of black letter law that California’s lawyers and amici mistakenly failed to invoke in defending the Cedar Point union organizer access regulation. First, a physical takings claim accrues when a regulation authorizing third parties to enter private property is promulgated, not when the third party actually enters the land. Second, only the party that owned the land at the time the physical taking cause of action accrued can prevail. Under these doctrines, Cedar Point Nursery’s lawsuit was filed decades too late. By the wrong plaintiff. California’s oversights were probably outcome determinative.

Moving beyond Monday-morning quarterbacking, we argue that the statute of limitations arguments available to governments in future cases help provide the essential limiting principles that went unmentioned in Cedar Point. In the aftermath of Cedar Point prominent scholars denounced the opinion as a vehicle for gutting antidiscrimination law, labor law, environmental law, rent control, and other parts of the regulatory state. Our analysis reveals that these concerns are likely exaggerated because defenders of those long-standing limits on the right to exclude can invoke the statute of limitations arguments that California’s lawyers failed to raise. On the other hand, new restrictions on owners’ rights to exclude are vulnerable to legal challenge. Properly understood, contemporary takings law grandfathers in many longstanding limits on the right to exclude while constraining governments that wish to tackle collective action problems by restricting property rights in new ways. Moreover, statutes of limitations and related doctrines can provide courts with something that has been elusive since the Supreme Court’s 1992 takings decision in Lucas v. South Carolina Coastal Council: a principled and coherent account of what restrictions on owners’ rights are impervious to takings claims because they qualify as background principles of state property law.

Read it at SSRN.

[Before we go on, Disclosure 1: my law firm represented the property owner in Cedar Point Nursery, so yes, I have a dog in the hunt.]

What do you think of the article's premise and conclusion that a regulation alleged to allow a physical invasion must be brought when the regulation is adopted, and not when property is actually invaded?

Government lawyers need not and should not repeat the mistake that California’s lawyers made, a goof that evidently went unnoticed by all three dissenting justices, all thirteen amici, and every scholar who has written about Cedar Point. By correcting Cedar Point’s litigation strategy blunder, governments may avoid having to compensate landlords who want to refuse to rent to members of a protected class, landlords whose ability to evict is constrained by rent control laws, employers who wish to fire workers involved in unionization efforts, and business owners who want to bill governments for the inconvenience of having to endure entry by health and safety inspectors. Most of these claims brought by property owners should fail if defended by competent government counsel who can learn from California’s error.

Id. at 5 (footnote omitted).

In other words, the allegedly unconstitutional act is the enactment of the regulation, and not also the failure to provide compensation when an invitee subsequently exercises the rights granted by the regulation to enter the plaintiff's property against the owner's wishes.

And what of the article's other premise, that regulations allowing physical invasions and occupations of property over time become "background principles of the State's law of property and nuisance" and disappear upon conveyance of the property?

Understandably, many observers were unnerved by Chief Justice Roberts’ decision to brush aside the notion that the California regulation – just seven years younger than the Fair Housing Act – was a background principle of state property law, unnerved many observers. If the 1975 California statute and regulation do not count by 2021 as background principles that inhere in title why shouldn’t the 1968 Fair Housing Act suffer the same fate? The response to Cedar Point from the least alarmed property scholars fell back on the idea that the Court would nonetheless treat the Fair Housing Act as a background principle. But no one has a good theory – other than a realist reading of the justices’ relative hostility to the goals of labor law – for why something magical happened between 1968 and 1975. After Cedar Point it is quite challenging to conclude that there are any principles at all underlying the Supreme Court’s conception of background principles. Our goals in this article include articulating coherent principles that are grounded in existing law and consistent with what the Court decided in Cedar Point.

Id. at 17 (footnotes omitted). 

Some preliminary impressions:

Are all physical invasion challenges facial claims? The article's premise seems to eviscerate the longstanding distinction in constitutional law generally -- and takings law specifically -- between a facial challenge and an as-applied challenge. The window opens on a facial challenge on behalf of everyone when a regulation is adopted, but we thought it was settled that individual property owners had to wait -- upon pain of being tossed out on ripeness grounds --  for the challenged regulation to actually be applied to their facts and circumstances. But the article does not mention the facial vs as-applied distinction.

Standing before incurring a concrete injury? The argument also seems a variation of the Federal Circuit's rationale in Campbell v. United States, 932 F.3d 1331 (Fed. Cir. 2019), where the court held "[i]n the case of a regulatory taking, however, the taking may occur before the effect of the regulatory action is felt and the actual damage to the property interest is entirely determinable." Disclosure 2: we thought the Federal Circuit's reasoning in that case was faulty (that a property owner has an obligation to sue even before she is actually injured seems very strange), and petitioned for certiorari (denied). But it does seem like a weird rule, and very much at odds with injury-in-fact and Article III standing requirements.

Whither Kirby Forest? The rule also seems at odds with Kirby Forest Indus. v. United States, 467 U.S. 1 (1984), where the Court upheld all sorts of government actions that muck around with an owner's property rights prior to an actual judgment and tender of compensation in eminent domain cases. No, the Court concluded, the "taking" takes place in straight takings when there's been an adjudication of compensation and a tender of actual payment. And all those things which happened before that interfere with the owner's use -- like instituting an eminent domain action, filing a lis pendens and clouding title, drying up the market for the property, and similar -- do not interfere sufficiently with property interests because "petitioner was free to make whatever use it pleased of its property." Id. at 15-16. The California provision seems similar: until the union organizers actually entered Cedar Point property under color of the statute, the owner could exclude whom it wanted.

Too early and too late: You just know that if property owners had challenged the California statute as a taking upon enactment, but before anyone had actually attempted to enter under the authority of the statute, that the claim would not have been that they filed too late, but rather too early. Property owners are used to these type of inconsistent arguments and being whipsawed between being accused of filing too early, or too late (or, in many cases, both too early and too late at the same time). We don't think that the line the courts are going to enforce between ripeness and staleness is as clear as the authors make it out to be.

Get ready for more takings claims, federal courts. Unless the article is arguing for abandoning the remaining takings ripeness requirement (something we're down for, but so far the courts are not), we're not sure that a rule that will force prudent property owners to sue upon adoption of new regulations is one that the courts will enthusiastically embrace (even if they should).

Zombie takings, or zombie statutes? The article describes Cedar Point as a "zombie takings claim" (p. 33) because it challenged a statute originally adopted decades ago. It argues that after about 40 years, regulation ossifies into a background principle, immune from challenge. Even though we'd use the "zombie" label to describe the California statute and others like it that are there on the books but are pretty obscure, let's go with the zombie takings label. That brings up an intriguing tradeoff: would we surrender Cedar Point and the ability to challenge 40 year old regulations in return for eliminating the ripeness hurdle and opening up courts to immediate challenges of newly-adopted regulations as we think the piece is advocating for? Hmmmmm... we gotta think about that one.

Cringe. No matter what, we think that calling the Cedar Point outcome the result of "blunders" by lawyers, judges, and scholars (p. 1), the government's strategy a "goof" (p. 5) and "bad lawyering" (p. 48), its lawyers "bone-headed" (id. at 49 & n.314), and accusing government counsel of committing "a colossal strategic blunder" (id. at 2), and saying that the government's lawyers in Cedar Point and Lucas committed "legal malpractice" (id.), is unnecessary and uncharitable in the extreme. We get that the authors don't care for the outcome in Cedar Point and wish their "Monday-morning quarterbacking" strategy (their words not ours, see p.1) would have been raised and tested. But in our view, these type of accusations should not be thrown about lightly, especially by those who didn't enter the amici arena themselves, and by those who don't appear to have been there, done that because their collective time actually practicing law and making strategic litigation decisions in real time in real cases appears to be, let's say, very limited. We hope there can be even vehement disagreement about the issues without slinging accusations of malfeasance, incompetence, and especially malpractice -- claims the practicing bar takes very, very seriously. We respectfully urge the authors and the law journal editors to reconsider these characterizations prior to print publication. 

We're going to meditate on the article and its arguments more. But whatever you may think of the authors' analysis and conclusions, this piece is well worth reading.

Join Us On Wed March 8 at 4:30pm For 2023 Distinguished Gifford Lecture In Real Property - Prof Thomas Mitchell On "Heirs' Property & the Uniform Partition of Heirs' Property Act: Challenges, Solutions, & Historic Reform"

If you are in Honolulu, please join us on Wednesday, March 8, 2023, 4:30-5:30 p.m. at the University of Hawaii Law School for Professor Thomas Mitchell on "Heirs’ Property and the Uniform Partition of Heirs Property Act: Challenges, Solutions, and Historic Reform."

Our U.H. Land Use class is attending to learn more about "heirs' property" (described as "the biggest problem you've never heard of"), and so should you. Yes, Hawaii has adopted the Uniform Partition of Heirs' Property Act and we have followed this issue for some time, but if you didn't know about this, now is your chance to catch up.

Here are the details from the U.H. newsletter:

Carlsmith Ball presents the 2023 Distinguished Gifford Lecturer in Real Property, Thomas W. Mitchell. Mitchell is a professor at Boston College Law School, where he holds the Robert F. Drinan, S.J. Endowed Chair and serves as the Director of the Initiative on Land, Housing & Property Rights. He is a national expert on property issues facing disadvantaged families and communities and has published leading scholarly works addressing these matters.

In 2020, Professor Mitchell was named one of 21 recipients of the MacArthur Fellowship in recognition of the substantial impact his professional work has had in assisting disadvantaged farmers and property owners, people who are disproportionately but not exclusively African American and other people of color. He is the only lawyer in his MacArthur Fellowship class. Please join us for this Distinguished Gifford Lecture; a light reception is to follow from 5:30 - 6:30 p.m.

Come, join us for this compelling session.

Indiana App: This House Is "Residential Property" Qualifying It For The Statutory 150% FMV Enhancement

As part of the nationwide reaction to Kelo v. New London, Indiana adopted a statute that in some cases requires the condemnor to compensate property owners at not just fair market value, but at 150% of FMV.

As far as we can tell, the Indiana Court of Appeals' opinion in Guzzo v. Town of St. John, No. 21A-PL-2213 (Jan. 19, 2023) is the first appellate case applying that statute, or any similar law. Read on.

The statute at issue, Ind. Code § 32-24-4.5-8, sets compensation for the taking of "residential property" at 1.5x the fair market value:

Sec. 8. (a) Notwithstanding IC 32-24-1, a condemnor that acquires a parcel of real property through the exercise of eminent domain under this chapter shall compensate the owner of the parcel as follows:

....

(2) Subject to subsection (b), for residential property:

(A) payment to the owner equal to one hundred fifty percent (150%) of the fair market value of the parcel as determined under IC 32-24-1;

(The limitation noted in subsection (b) deals with the effective date of the statute after the legislature altered the text of the original statute which required the owner to have occupied the taken property.)

The court noted the issue was whether "the Guzzos' property met the definition of residential property." Slip op. at 18. The statute defines "residential property" as "real property that consists of: (1) a single[-]family dwelling that is not owned for the purpose of resale, rental, or leasing in the ordinary course of the owner’s business; and (2) the land on which the dwelling is located.” Id. The trial court concluded no, relying on a statement in the Fiscal Impact Statement that the owners had not used the house for personal use. The Court of Appeals saw the issue much more simply:

We agree with the Guzzos that the trial court erred by determining that INDIANA CODE § 32-24-4.5-6.2 was ambiguous, by relying on the Fiscal Impact Statement, and by denying the Guzzos’ request for the Town to compensate the Guzzos at the statutory rate of 150% of the fair market value of the Property as residential property. When entering its order, the trial court ignored the plain language of INDIANA CODE § 32-24-4.5-6.2, which specifically provides that residential property means “real property that consists” of “a single[-]family dwelling that is not owned for purposes of resale, rental, or leasing” and “the land on which the dwelling is located.” When interpreting this statute, we must be “mindful of both what it does say and what it does not say.” City of Lawrence, 68 N.E.3d at 585. The statute does not define residential property by stating that the property must be owned for personal use or that the owner must occupy the property as a residence. Here, the Property contained a single-family dwelling. Indeed, as the trial court determined, the Property contained a structure that had been “the family’s home.” (App. Vol. 2 at 49). Moreover, it is undisputed that it was not owned for purposes of resale, rental, or leasing. However, instead of applying the plain language of the statute, the trial court improperly relied on the Fiscal Impact Statement and injected a personal use requirement into the definition of residential property.

Slip op. at 21.

The court rejected the argument that use of the word "dwelling" implies some kind of habitability, because in a zoning case, the Indiana Supreme Court determined that, absent further definition by the legislature, the common meaning of "dwelling" means a place where people can live, and does not include any requirement of that building being actually habitable. A single-family home like the Guzzo property, is a "dwelling."

Because the Guzzos’ real property consisted of property containing a single-family dwelling that was not owned for purposes of resale, rental, or leasing, we conclude that the trial court erred by denying the Guzzos’ request for the Town to compensate the Guzzos at the statutory rate of 150% of the fair market value of the Property as residential property under INDIANA CODE § 32-24-4.5-8(a)(2).

Slip op. at 22.

One dissent, so this one may be going further.

And yes, this case involves a statutory right, not baseline constitutional principles. But still, a nice win.

Read more from the lawyers who rep the property owner here.

Guzzo v. Town of St John, No. 21A-PL-2213 (Ind. Ct. App. Jan. 19, 2023)

Cert Denied In Self-Executing Just Compensation Case

Most of the time these days, we're rooting for cert granted. That comes, naturally, from our work pushing cases and issues up to the Supreme Court, looking to correct lower court errors and in the process make some good law. And that usually entails being on the "petitioner" side of things. Cases like Sackett, Wilkins, and Tyler, for example.

But not always. In Financial Oversight & Management Board for Puerto Rico v. Cooperative de Ahorro y Credito Abraham Rosa, No. 22-367, we were on the "respondent" side of things, advocating for a "cert denied" because there, the First Circuit had reached what we think was the right result for the right reasons. As we noted in this post, the First Circuit correctly held that the "Fifth Amendment precludes the impairment or discharge of prepetition claims for just compensation in Title III bankruptcy."

In short, just compensation judgments are not typical civil judgments which can be treated as unsecured debt (aka blown off) when the government subsequently goes bankrupt. You take, you pay just compensation and not pennies-on-the-dollar. The First Circuit held that the self-executing nature of just compensation for takings means that it cannot be discharged or diminished in insolvency proceedings. Our law firm signed up to represent the property owners to defend what we saw as a correct result and the right analysis.

The cert petition here was not at all insubstantial: the FOMB is repped by high-class lawyers and it appeared the First Circuit expressly disagreed with the Ninth, setting up what looked at first blush like a circuit split. Our BIO, however, noted that the apparent split was not a split at all (just some inconsistent dicta), and emphasized the correctness of the First Circuit opinion. The SG filed a BIO, as did the San Juan lawyer who won the case in the First Circuit.

Today, in this order, the Court denied review.

We understand that this is not a definitive statement from the Court that the First Circuit got it right. Indeed, in another recent case involving a similar issue (what is the obligation of government to actually provide just compensation within a reasonable time after it takes property?), the Court denied our cert petition. So the issue of what happens after a taking and an adjudication of the amount of compensation owed remains open. True, in the First Circuit, the government cannot slough off its Fifth Amendment obligation by seeking bankruptcy protection, but maybe in can in the Ninth and other circuits. And at least in the Fifth Circuit, a local government cannot be compelled by a federal court to, you know, actually pay compensation after it takes property. So the issue remains for SCOTUS resolution.

So cert denied does not resolve the issue. But to us, a win is a win, especially for our clients (even a cert denial).