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Guest Post (Jennifer Polovetsky): "NY Zoning Law Mandating Contributions Deemed an Unconstitutional Taking"

Today we have a guest post by New York colleague Jennifer Polovetsky, who writes about an exactions case that is headed for the New York Court of Appeals. Disclosure: our firm represents the property owners in that court. 

Thanks to Jennifer (and to the New York Law Journal) for allowing us to republish her intriguing piece.

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NY Zoning Law Mandating Contributions Deemed an Unconstitutional Taking

by Jennifer Polovetsky

A few years ago, on December 15, 2021, the City of New York (the City) amended §143–13 of the City Zoning Resolution (the ZR Amendment). A portion of this ZR Amendment required property owners to pay a mandatory, nonrefundable contribution to the SoHo–NoHo Arts Fund (Arts Fund), as a precondition to filing for a permit to convert joint living-work quarters for artists (JLWQA) to unlimited residential use.

What is the problem with the ZR Amendment, you may ask? Well, according to the recent Appellate Division decision in Coalition for Fairness in Soho and Noho, Inc. v. City of New York, 233 A.D.3d 433 (1^st Dept 2024); 221 N.Y.S. 3d 89 (the Soho/Noho case), it constituted an excessive exaction, which rose to the level of an unconstitutional taking under prevailing eminent domain laws.

In the context of eminent domain, exactions are conditions imposed by the government on a property owner that require the transfer of money or property as a prerequisite for the government’s approval of a proposed development plan.

Sometimes, when exactions are excessive or unrelated to the development's impacts, they can potentially constitute a "taking" under the Fifth Amendment of the United States Constitution and Article I §7 of the New York Constitution, requiring just compensation. That is exactly what happened in the case of this ZR Amendment.

In Soho/Noho, the New York Appellate Division held that the portion of the ZR Amendment requiring payments to the Arts Fund, as a condition precedent for permit filing, was an unconstitutional taking without just compensation.

The ZR Amendment established the Special SoHo–NoHo Mixed Use District, and provided JLWQA property unit owners a pathway to convert the use of their units to residential uses; provided that they first make a nonrefundable, mandatory contribution, calculated at $100 per square foot of floor area to be converted, to the Arts Fund, with annual increases, as a “…precondition to filing for or issuing of any building permit allowing the conversion [of] a joint living-work quarters for artists to a residence.” See ZR §143–13.

In concluding that this mandatory contribution to the Arts Fund constituted an unconstitutional taking, the Soho/Noho court explained that the permit condition contained in the ZR Amendment had failed the “two-part test modeled on the unconstitutional conditions doctrine,” as most recently outlined by the Supreme Court of the United States (SCOTUS) in Sheetz v. County of El Dorado, 601 U.S. 267 (2024), and colloquially known as the Nollan/Dolan standard(s). See Soho/Noho, id., citing Sheetz v. County of El Dorado, id.; see also Nollan v. California Coastal Commn., 483 U.S. 825 (1987); Dolan v City of Tigard, 512 US 374 (1994).

In Sheetz, SCOTUS referred to the Nollan/Dolan decisions and held that in order to not be deemed an unconstitutional taking, a permit condition: (1) “must have an ‘essential nexus’ to the government's land-use interest,” which “ensures that the government is acting to further its stated purpose;” and (2) the condition “must have ‘rough proportionality’ to the development's impact on the land-use interest.” See Sheetz, id. at 275-276 quoting Nollan, 483 U.S. 825; see also Dolan v City of Tigard, 512 US 374.

The Soho/Noho court, after applying the two-part test, found that the mandatory Arts Fund contribution fee requirement constituted a taking without just compensation in violation of both the Fifth Amendment of the United States Constitution, and Article I §7 of the New York Constitution. Soho/Noho, 221 N.Y.S. 3d 89; U.S. Const. amend. V; NY Const, art I, § 7.

First, the Soho/Noho court found that the City did not meet the first prong of the Nollan/Dolan and Sheetz test(s) because it failed to “identify an essential nexus to its land use interest” in the ZR Amendment, since the City had itself described the JLWQA use restrictions as “outdated,” had expressed goals of allowing a broad range of mixed uses in the new Special Soho-Noho district (which had previously been zoned industrial prior to the passage of the ZR Amendment), and had banned the creation of new JLWQA units (indicating a long-term land use goal of phasing out JLWQA units altogether).

The court held that the language of the ZR amendment, which stated that money from the Arts Fund “shall be allocated ... to support arts programming, projects, organizations, and facilities that promote the public presence of the arts within the [SNX] District and surrounding neighborhoods,” with priority given to “under-resourced organizations and under-served areas,” did not support the City's alleged goal of supporting art and local artists. See Soho/Noho, id.; see also Sheetz, 601 U.S. at 275, quoting Nollan, 483 U.S. at 837; ZR §143–02; and Dolan v City of Tigard, 512 US 374.

Second, the Soho/Noho court held that the City did not meet the second prong of the Nollan/Dolan and Sheetz test(s) because it failed to demonstrate that the mandatory Arts Fund contribution condition had “rough proportionality” to the conversion of the JLWQA units’ development impact on the land-use interest at issue.

 Specifically, the court held that “there is no evidence of negative impacts on certified artists arising from the changes in zoning,” because, as the City had represented, there was a “scarcity of certified artists able to purchase” JLWQA units in the first place, due to an “ever-decreasing number of annual artist certifications” over the last decade. See Soho/Noho, id.; see also Sheetz, 601 U.S. at 275, quoting Nollan, 483 U.S. at 837; ZR §143–02; and Dolan v City of Tigard, 512 US 374.

As we saw in Sheetz, and now in the Soho/Noho decision, the Nollan/Dolan test for whether a land use permit condition is a taking applies regardless of whether the condition requires the landowner to relinquish property, requires them to pay a monetary exaction instead of relinquishing the property, or requires them to pay a monetary exaction pursuant to a legislative or administrative precondition for acquiring a permit. See Soho/Noho, 221 N.Y.S. 3d 89; Sheetz, 601 U.S. 267.

Although not all exactions rise to the level of an constitutional taking, the Soho/Noho decision reinforces the core tenets of Sheetz and the Nollan/Dolan decisions—all of which, when taken together, demonstrate that courts take the protection of property rights very seriously, just like the Fifth Amendment intended. See Soho/Noho, 221 N.Y.S. 3d 89; Sheetz, 601 U.S. at 275,; Nollan, 483 U.S. at 837; Dolan v City of Tigard, 512 US 374; see also U.S. Const. amend. V; NY Const, art I, §7.

Reprinted with permission from New York Law Journal, © ALM Media Properties LLC. All rights reserved.

Anyone Up For A Road Trip To Nebraska For "Eminent Domain" In Lincoln This Month?

Eminent domain has been on our mind a lot lately. 

But did you know there's an award-wining play, "Eminent Domain?" Neither did we. Based on a book, it appears.

Soon to be on the stage at Lincoln, Nebraska's Lied Center for the Performing Arts, produced by the Angels Theatre Company. Here's the summary:

Any Nebraska farmer or rancher worth their salt will tell you their connection to the land is equally as strong as their bonds to family, community, and their good name. When Rob McLeod is confronted with a threat underneath his land, he and his entire family discover how fragile and endangered their bonds will become.

An award-winning play, written by Nebraska playwright Laura Leininger-Campbell, Eminent Domain digs beneath the day-to-day struggles facing our family farms. Dig deeper, and the greatest threat to America’s Heartland is revealed: how can this way of life survive without its next generation?

Get your tix here.

Anyone up for a visit to Lincoln later this month?

Challenge To Sham Eminent Domain: The Government Can't Lie About Why It Takes Property

Before we go further, a disclosure: this is one of ours.

Here's the Complaint for Violations of Constitutional and Civil Rights, filed yesterday by the Santoro Family in federal court in Rhode Island. This lawsuit challenges, under the Public Use Clause, a RI town's eminent domaining the family's land for the ostensible purpose of building a new municipal campus. 

Sounds like a "classic" public use, you say? Not so fast. As alleged in the complaint, the actual use, purpose, and necessity for the taking is something else: to stop the Santoros from building 250+ low- to moderate-income housing.

Because this is one of ours, we won't say more. But here's the story, from the Complaint:

1. SCLS Realty, LLC, and Sixty Three Johnston, LLC, family-owned homebuilders whose members are Lucille Santoro, Salvatore Compagnone, Ralph Santoro, and Suzanne Santoro (the plaintiff LLCs are referred to herein jointly as “Santoro Family”), bring this action to vindicate the family’s constitutional and civil rights, threatened by an outrageous abuse of government powers—a sham taking—by the Town of Johnston, Rhode Island (“Town”), and its officials. The Town claims it needs to use eminent domain to build a new municipal campus. But this is false. The real reason it the Town is forcibly depriving the Santoro Family of its land is to stop the building of over 250 desperately needed affordable homes.

2. Rhode Island is deep in what the State’s elected leaders have accurately called an affordable housing crisis. The Town, a suburb of neighboring capital-city Providence, is not immune, and less than eight percent (8%) of housing within its jurisdiction is considered “affordable” for the average Rhode Islander. The Santoro Family recognized this critical need and began planning to build affordable housing on its property. As far back as 2004, the Town’s Comprehensive Community Plan identified the Santoro Family’s property for affordable housing. In October 2024—in accordance with a state statute which required a streamlined approval process for development of low-to-moderate income housing—the Santoro Family began the process of obtaining the Town’s approvals.

3. Instead of embracing the Santoro Family’s use of its private property for affordable housing, the Town’s mayor, Defendant Joseph M. Polisena, Jr. (“Polisena”), publicly vowed to “use all the power of government that I have to stop it.” He stated the Town opposed affordable apartments, but that if the Santoro Family would instead propose building a smaller number of less-affordable suburban-style residences, then, “the town w[ould] roll out the red carpet to glide you through the planning process and see the project to completion.”

4. The Santoro Family refused to buckle under this intimidation and declined to withdraw or alter its plans to build affordable housing. In response, for the non-public purpose of thwarting affordable housing, the Town, in bad faith and with spite and actual animus, exercised eminent domain to force the Santoro Family into a choice: either alter or halt the affordable housing plans, or be deprived of the family’s land by government force.

5. On January 28, 2025, the Town, acting through its town council, officially resolved that the Town “should proceed with eminent domain … for the public purpose of constructing a municipal campus[.]” Prior to vowing to stop the Santoro Family, the Town had never expressed a need for, and had no plans to build, a new municipal campus. The Town’s Comprehensive Community Plan shows no plans for new municipal public buildings. The Town has never held any public discussions or hearings regarding a new municipal campus. It has no building or other actual plans for a new municipal campus. It has not considered other locations or evaluated whether the current location of the Town’s municipal complex is suitable for redevelopment. The Town never formed a municipal public buildings authority under R.I. Gen. L. § 45-50-12(16), a prerequisite to the use of eminent domain to acquire property for municipal public buildings. It has not set aside money or budgeted for a new municipal campus (instead, the Town asserts it will shift money already earmarked for the construction of a new high school to fund this fraudulent exercise of eminent domain).

6. The power of eminent domain is the government’s most potent civil power. It forces property owners who may not want to sell to do so, at a price the owners don’t necessarily agree to. The Constitution and law recognize that such overwhelming government power is readily subject to abuse. Thus, when government paints an eminent domain target on a property owner’s back and asserts the owner’s property is to be seized for what the government claims is a public use or purpose, the courts have an essential role in ensuring that the government’s stated use and purpose is the government’s actual use or purpose. In short, the taking must be actually “for public use,” and not bogus—or a pretext to some secret motive. Both the U.S. and Rhode Island Constitutions bar the Town from concealing or colluding to hide its real reasons for taking the Santoro Property. Eminent domain cannot be employed to stop property owners from using their land in legal ways, under the guise of a public use or purpose. Defendants are abusing the eminent domain power to block affordable housing for low-to-moderate-income families, simply because they don’t want that kind of thing in their town.

Stay tuned.

Complaint for Violations of Constitutional and Civil Rights, SCLS Realty, LLC v. Town of Johnston, RI, No. 25-cv-00088 (D. R.I. Mar. 10, 2025)

New Article: "Reconceptualizing 'Background Principles' in Takings Law," 109 Minn. L. Rev. 689 (2025)

Lawprof Timothy Mulvaney has published "Reconceptualizing 'Background Principles' in Takings Law," 109 Minn. L. Rev. 689 (2025). 

If the title alone doesn't grab your interest, here's the summary from the article's introduction:

Both libertarians and progressives rejoiced in the result reached by the Supreme Court in the 2023 matter of Tyler v. Hennepin County. This Article asserts that such unified celebration has overshadowed the extent to which the Supreme Court’s reasoning calls into question even our most foundational assumptions about the meaning of property and the takings protections the Constitution affords to it. Followed to its literal end, Tyler remarkably suggests that owners may well need to ground their expectations in the background principles of property laws endorsed by a majority of states rather than in those underpinning the laws of their own state.

Suspicious that the Court intended such a revolutionary upheaval of the state variations that have characterized our federalist system for more than two centuries, the Article contends that Tyler is better interpreted as an epic failure in judicial transparency: The opinion reflects a sly reticence to acknowledge the reality that resolving competing claims to property demands moral judgment regarding the background principles of property law. In following this deceptive course, Tyler invites a race to legislative homogeneity and erects a dangerous barrier to states’ abilities to innovate in the face of evolving social, economic, and environmental conditions.

Check it out.

Eviction Moratorium As A Physical Taking All Teed Up

Here's the latest in a case we've been following. This is GHP Management Corp. v. City of Los Angeles, No. 24-435, the cert petition which asks whether a local ordinance which allowed non-paying tenants to remain in the lessor's property is a physical taking, or merely the regulation of the lessor/lessee relationship under the Yee theory, which posits that once an owner voluntarily rents property to a tenant, the government then allowing that tenant to remain rent free isn't facilitating an unauthorized physical occupation, but rather is merely a regulation of the existing lessor/lessee relationship. 

The petitioner property owner has filed its cert stage Reply, which means that all the briefing is in, and next up is for the Supreme Court to set the conference date. Here's the summary of the issues from the Reply:

Respondents prefer a world where government enjoys absolute immunity from as-applied physical takings claims against regulations affecting owner- tenant relationships, even where such laws preclude eviction for non-payment of rent. The Fifth Amendment stands for no such thing.

Petitioners’ claim reflects a straightforward application of the doctrine of physical takings reaffirmed in Cedar Point Nursery v. Hassid. Petitioners should not have been turned away at the courthouse doors on the sole basis that they “invited” tenants to lease in the first place, per Yee v. City of Escondido. That distinction motivates the question presented by this petition, a question that was squarely considered by both courts below, as well as other appellate courts from which the Ninth Circuit now splits.

It is time for clarity. Eviction moratoria functionally commandeer private property for the public’s benefit under the guise of merely tinkering with owner-tenant relationships. Such laws will be adopted again to satisfy the purported needs of the day—including just last week in connection with recent wildfires (see infra § II (eviction moratorium adopted in County of Los Angeles applicable to 88 cities)).

The petition should be granted.

The case has generated a lot of amici interest on both sides, so we're going to continue to follow along closely. Stay tuned.

NJ App Div: No Taking To Use The Property To Trade For "Open Space"

We had the New Jersey Appellate Division's opinion in Township of Jackson v. Getzel Bee, LLC, No. A-0590-23 (Jan. 31, 2025) in our queue to digest, when our colleague Joe Grather beat us to the punch with his analysis "Appellate Court Rejects Condemnation Due to Lack of Public Use or Purpose."

So instead of repeating Joe's summary and analysis, we're going to recommend you read his. The short story is that the Township used eminent domain to take property, with the avowed public use being "open space," which is generally a qualifying public use. The owner objected and the Appellate Division agreed that yes, open space may be a public use, but here, the record pointed to the property actually being used as a "currency" to "exchange for open space." As Joe writes:

I’m not so sure we agree with the idea that the constitutional “public use” limitation should be stretched to allow the taking of private property for a “broader public purpose.”  We will save that discussion for another day because the Appellate Division’s reversal does not embrace that concept.  To be sure, as expressed in the opinion, “neither Kelo nor the Eminent Domain Act contemplates the condemnation of a property for use solely as an asset in a scheme for an otherwise valid public purpose on some other property. Otherwise, as the LLCs aptly posit, government officials would be able to violate private property rights at any time for any reason—or for no reason—untethered to the public use requirement.”

Here's our takeaways:

• The court focused on the actual factual record in the case, not stuff the condemnor or its lawyers made up.
• The opinion noted that "[i]n its opposition brief, the Township contends - for the first time - that the Developer intends to build dormitories for students on the condemned property. However, the record before us is bereft of any indication as to the use of the condemned lots, other than what is,in essence, currency, to exchange for open space." Slip op. at 11. The condemnor's litigation position isn't what counts, the actual record governs.
• The opinion cited Kelo for the A-to-B prohibition (even though Kelo upheld an A-to-B taking). In short, the taking here was a "purely private taking."
• Yes, the limitation on the taking power the court recognized here is statutory, and not constitutional. But the reasoning and method should be the same.

Be sure to check it out.

Township of Jackson v. Getzel Bee, LLC, No. A-0590-23 (N.J. Super. App. Div. Jan. 31, 2025)

"I Like Old Property" - We Return To The "Short Circuit" Podcast To Talk Law Of The Land & Magna Carta

You should already know Short Circuit is the Institute for Justice's frequently-updated podcast on important and interesting decisions from the federal courts of appeals (the "Circuit" part of the title, we assume).

If you are not already a regular listener you are missing out, because it is a fantastic and easy way to keep up with what is going on, and to hear insightful analysis.

We've visited the SC studios in the past, and this week made a return visit, joining host Anthony Sanders (Director of the Center for Judicial Engagement), and guest Justin Pearson (Managing Attorney of IJ's Florida offices), to talk cattle feedlots, "new" vs. "old" property, North Carolina's Law of the Land Clause, and methods of constitutional interpretation.

Here's the episode summary, and show notes, from the Short Circuit site:

A long-time friend of the Institute for Justice, Robert Thomas, joins us this week. For years he’s litigated property rights cases across the country, lately for the Pacific Legal Foundation, and also blogged his adventures—and a whole bunch of other property rights news—at inversecondemnation.com. With some years since his last visit to Short Circuit, he comes back to discuss a recent North Carolina case where the legislature revived some claims after a statute of limitations had lapsed. Was that the taking of a “vested right”? The court is unanimous in saying it wasn’t, but how the two opinions got there in different ways is the most interesting part. Then, IJ’s Justin Pearson brings us to the fields—and feed lots—of Minnesota for a retaliation case where a farmer petitioned the state legislature. That leads into a discussion of “old property” versus “new property” and how we should think about their protections. Plus, law students interested in SCOTUS previews being held at their school should reach out to Justin. Those looking for a little “where are they now” can skip to the end. And fans of Thomas Hardy can enjoy the opening.

Register for the Tavern Debate on March 28, 2025 in Westlake Village, California!

RSVP for our 10th Anniversary Party and Show on April 3d in DC!

Wagner v. Scheirer

McKinney v. Goins

inversecondemnation.com

Bound By Oath episode on Pennsylvania Coal

SC episode on the British Constitution

Tess of the d’Urbervilles

Be sure to not only check out this episode, but subscribe to the feed so you don't miss any installments.

"Property Rights and the Roberts Court, 2005-2025" (Feb. 27, 2025, UC Berkeley Law School)

If you are looking for us tomorrow but we don't respond, that's because we'll be in the audience in rapt attention at "Property Rights and the Roberts Court, 2005-2025" at the U.C. Berkeley Law School (fka "Boalt Hall").

Here's the description:

For much of the past century, property rights were relegated to second-class status compared to the rest of the Bill of Rights. However, under the Supreme Court leadership of Chief Justice John Roberts, this trend has begun to shift.

In recognition of the 20th anniversary of the Chief Justice’s elevation to the Supreme Court, Pacific Legal Foundation is partnering with Berkeley Law’s Public Law and Policy Program to host a day-long conference exploring the major property rights developments and future of property rights law in the Roberts Court.

We’ll hear from two different panels of renowned legal scholars and accomplished litigators, as well as a keynote lunch discussion between Richard Epstein, director of the Classical Liberal Institute and law professor at NYU School of Law, and John Groen, executive vice president at PLF. 

A catered lunch will be provided.

Here's the agenda. See you there.

Property Rights and the Roberts Court Agenda (Feb. 27, 2025)

Is Having A "Redevelopment Plan" Enough To Justify Public Use Rational Basis Review?

By John C. Mozena

Students of the Supreme Court's infamous-the-day-it-was-decided decision in Kelo v. City of New London know that the legal issue presented and decided by the Court was somewhat narrow, but that the decision had a broad cultural impact such that Susette Kelo's SCOTUS 5-4 loss was merely a precursor to widespread political and moral victories.

Legally narrow issue? Yes, recall that the question presented in that case was whether takings for "economic development" are so particularly untrustworthy and susceptible to abuse that they require the judiciary to depart from the usual rational basis review and cast a more skeptical "heightened scrutiny" eye on what the Court in Berman said was a legislative judgment "well-nigh conclusive," and Midkiff equated with run-of-the-mill exercises of the police power.

The Kelo majority held no, that at least in the case as presented, the taking of a home and neighborhood on the theory that another owner would make a more economically-intense -- and thus publicly beneficial -- uses of these properties did not warrant stricter scrutiny than a taking for other purposes such as a post office or a public road.

The Fort Trumbull condemnations were, after all, part of New London's redevelopment plan the majority concluded, so there was no reason for a court to inject itself into what to the majority appeared to be democracy functioning as it should. Kelo's remedy, the majority implicitly concluded, was to fight it out in the planning process. That she lost there was of no constitutional consequence, them's the breaks. That's democracy, that's life.

Most revealing was the majority's stealth-citation to the Supreme Court decision which forms the basis of land use planning and zoning, and the high degree of deference which the courts pay to zoning decisions, Village of Euclid v. Ambler Realty Co., 72 U.S. 365 (1926). You land users will find the majority's language very familiar:

Those who govern the City were not confronted with the need to remove blight in the Fort Trumbull area, but their determination that the area was sufficiently distressed to justify a program of economic rejuvenation is entitled to our deference. The City has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community, including–but by no means limited to–new jobs and increased tax revenue. As with other exercises in urban planning and development,¹² the City is endeavoring to coordinate a variety of commercial, residential, and recreational uses of land, with the hope that they will form a whole greater than the sum of its parts. To effectuate this plan, the City has invoked a state statute that specifically authorizes the use of eminent domain to promote economic development. Given the comprehensive character of the plan, the thorough deliberation that preceded its adoption, and the limited scope of our review, it is appropriate for us, as it was in Berman, to resolve the challenges of the individual owners, not on a piecemeal basis, but rather in light of the entire plan. Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement of the Fifth Amendment.

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12. Cf. Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926). 

Takings outside of a plan might be subject to more scrutiny, but here New London had a plan. In other words, using the eminent domain power to deprive an owner of her property and oust her from possession is just like a run-of-the-mill police power zoning, and as long as the taking is part of some "plan," deserves the same judicial deference.

In the time since Kelo, there have been commentary on the necessity of a plan, as well as cases from other courts which focus on the "plan" which a taking is supposedly part of. Necessary? Some say yes, some say no, as do others. Some courts have held that an imaginary plan is ok.

In that vein, check this out, a piece by John C. Mozena, "The Supreme Court's Big 'Kelo' Mistake Was Trusting Economic Development Plans," at the Center for Economic Accountability.

The author dives in and asks whether the Court should have relied on these redevelopment plans as the trigger to rational basis review (or, as the question was presented in Kelo, whether the usual high deference courts pay to legislative judgments about what uses are "public"). Not so fast:

This reliance on government planning and implicit assumption that those plans’ existence could and would result in their planned outcomes showed through in the language Stevens used to describe the future. His opinion referenced a hotel “that will include restaurants and shopping” and “will also have marinas for both recreational and commercial uses,” as well as another parcel that “will be the site of approximately 80 new residences organized into an urban neighborhood and linked by public walkway to the remainder of the development, including the state park.” [Emphasis added.]

Stevens was wrong in these assertions. Not only wrong morally and legally, but also wrong factually as there would never be a hotel, restaurants and shopping, 80 new residents or any of the other benefits whose existence he so confidently asserted. The “carefully formulated economic development plan” that justified seizing Susette’s home fell apart almost immediately, Pfizer left town and the land remained vacant for years, famously becoming home to a colony of feral cats instead of buildings full of pharmaceutical researchers.

The Kelo majority's emphasis on a "plan," Mozena writes, incentivized condemnors to produce plans to that shield private purposes and benefits and other non-democratic outcomes "no matter how haphazard or farfetched it [the plan] might be[.]" Mozena goes on to catalog redevelopment/takings plans that never went anywhere, something the great teacher and practitioner of eminent domain law, Professor Gideon Kanner, wrote about in his final law review article, "Eminent Domain Projects that Didn't Work Out," 12 Brigham-Kanner Property Rts. J. 171 (2023).

Will the fact that many of these plans are just pie-in-the-sky have any impact on Justices who believe that the process by which these plans are adopted is more important than the question of whether the plans will actually work? In the land use arena, we haven't seen any indication that judges care all that much about the chances of success of government plans, whether those plans be zoning, planning, economic legislation, or eminent domain. Indeed, courts studiously eschew any role in what is called the "means-end-fit," or whether legislation will "work."

We wish courts would care in eminent domain, even if they don't care generally. There's something different about eminent domain and takings someone's property away, than when the government is merely exercising its police or other power to regulate property, isn't there? Not to the Kelo majority. 

And the usual majoritarian processes by which plans are adopted and someone's property is targeted are not very good at protecting vulnerable owners from a government officials' starry-eyed thinking and economic pipe dreaming.  We think that is where the majority's assumptions were horribly wrong. 

True, eminent domain comes with just compensation. But as Susette Kelo's case starkly illustrated, sometimes the dignity of keeping your property cannot be replaced with money, and courts should recognize and protect that. The Supreme Court's recent decision in Sheetz was a good sign the Court is starting that recognition. There, the Court was in "radical agreement" that just because it is the legislature which imposes an exaction as the price of exercising your constitutional property rights, does not insulate the legislation from the dual requirements of logical nexus and rough proportionality.

One of these days, the Court is going to confront this same vibe in eminent domain.

Fourth Branch Podcast: Talcott & Kochan On "Rebuilding California: Lessons from the Pacific Palisades Fire"

Check this out, a recent Fourth Branch pod featuring lawprof Donald Kochan and our law firm colleague Jeremy Talcott, "Explainer Episode 85 - Rebuilding California: Lessons from the Pacific Palisades Fire."

Here's the description:

The 2025 Pacific Palisades Fire has underscored the challenges of building in California’s complex regulatory landscape. In response, Governor Newsom issued an executive order suspending CEQA and Coastal Act requirements to expedite reconstruction, raising important questions about the future of development in the state. In this podcast, experts Jeremy Talcott and Donald Kochan examine California's regulatory environment before the disaster and the broader implications of its permitting processes in the effort to rebuild. Join us for an in-depth discussion on balancing efficient recovery with long-term regulatory considerations.

The money quote from Jeremy:

And I think this fire really offers a very good inflection point for a reimagining or a revisiting of the utility of all of these regulatory frameworks that exist in California. If it is good to suspend these regulations temporarily for individuals who have been seeing their homes destroyed and need to quickly rebuild, why are all of these regulations left in place for the thousands and thousands of landowners with empty units that could be put to a beneficial use.

In California, it's not just building out, that includes building in. There are too many units within existing neighborhoods that are right now being left idle because the regulatory prospects of navigating the hurdles to obtain it development permit are simply too difficult, and I think if we take an honest look at just how difficult it has been in California and continues to be, and perhaps if we also see the outcomes of this temporary suspension, it will force some legislative revisiting of the utility of these laws and whether or not some reform might be in order.

Worth a listen.

Feb. 16, 1833: Unhappy 192d Birthday To The First SCOTUS Takings Case, Barron v. Baltimore

This Sunday, February 16, 2025, will be the day, 192 years ago, when -- a mere 5 days after oral arguments -- the U.S. Supreme Court issued its (in)famous opinion in Barron ex rel. Tiernan v. Mayor and City Council of Baltimore, 32 U.S. 243 (1833).

Generations of law students study this decision in their Con Law classes, and it is mostly known as the case in which the Court held that the Bill of Rights limits only the federal government and does not limit the power of states. For the latter, one must look to state constitutions. Barron, of course, was overruled or otherwise neutralized by the Fourteenth Amendment (privileges or immunities clause or the due process clause, take your pick). And it was formally abrogated in Chicago, Burlington and Quincy Railroad Co. v. City of Chicago, 166 U.S. 226 (1897) (states and their instrumentalities are bound by the Fourteenth Amendment to respect the Just Compensation Clause).

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

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

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

As the opinion put it:

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

Barron, 32 U.S. at 247.

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

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

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

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

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

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

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

Id. at 250-251.

Here's the book's description:

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

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

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

We've read the book, and recommend it. It is a real-eye opener. 

And over the past 192 years, history has not been kind to Barron. The Civil War was the end-product of Barron's vibe, one might say. And the Fourteenth Amendment expressly recognized that indeed, states are limited by the Constitution, and that our civil liberties and freedoms are not only acknowledged in state constitutions.

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

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

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

When The Substitute Teacher Gives You Homework: Justice Breyer Says Federal Court Needs State Court Decision Before Considering Takings Claim

You remember when in grade school you learned that your teacher was out for the day, and you were getting a substitute? It could be a very good day, or a very not-so-good day. Maybe the sub was cool, and you end up watching filmstrips. But if you drew the short straw, the sub acted like a real teacher and did real teacher stuff like give you homework.

That's what it must've felt like when the advocates showed up for arguments in the First Circuit as it considered 29 Greenwood, LLC v. City of Newton, No. 24-1518 (Feb. 4, 2025), and there on the bench was none other than Justice (ret.) Breyer, sitting by designation. Was it going to be filmstrips, or homework?

The case was an appeal of the district court's rejection of a federal takings claim on the grounds that "this case amounts to an everyday zoning-type dispute between a zoning board and a property owner -- the type of dispute that is not sufficiently unusual to trigger the Takings Clause." Slip op. at 5.

The short story is that a property owner which was restoring a historic home discovered during the course of the work that it was in worse shape than thought. It had a construction permit from the city's Historical Commission, so went ahead and "tore down large portions of the building[.]" But when the Commission found out, it concluded that this work went beyond the scope of the construction permit. It issued a stop work order and initiated a criminal complaint. "Although state law provided a mechanism to challenge the Commission's determination that it had violated its permit, Greenwood did not invoke that method." Slip op. at 4.

After trying to satisfy the Commission that this work was ok and obtain a reconstruction permit (all such efforts were rebuffed), "Greenwood began to think that the Commission would never authorize it to rebuild the house." Id. Next stop: state court for a takings lawsuit.

The case didn't stay there, because the city removed to federal court. After which the other shoe dropped and the city moved to dismiss for failure to state a claim. Thus, "[t]he primary question raised in this suit is whether the Commission violated the Takings Clause by failing to grant Greenwood the reconstruction permit it seeks." Slip op. at 5.

But instead of considering that issue, the First Circuit, in an opinion authored by Justice Breyer, held that the case doesn't even belong in federal or state court at all, deciding to abstain to let other, pending state court actions narrow or moot the issues first.

Homework, not filmstrips!

Before filing the takings claim in state court, the owner had challenged the Commission's rejection of its reconstruction permit (apparently under the state APA). That case remains active in state court. There was also that pending criminal complaint in state court. Either of those, wrote Justice Breyer, might moot the federal takings claim, or otherwise make it go away. At worst, allowing these state court actions to play out might narrow the federal issues.

In short, Pullman abstention, which is especially needed because land use is "local" social policy:

This is particularly true when a constitutional question implicates issues of land-use planning -- a "sensitive area of social policy into which the federal courts should not lightly intrude." Columbia Basin Apartment Ass'n v. City of Pasco, 268 F.3d 791, 802 (9th Cir. 2001) (quoting Pearl Inv. Co. v. City & Cnty. of S.F., 774 F.2d 1460, 1463 (9th Cir. 1985)).

Given the overlapping legal issues between the pending state-court case (concerning state law, not federal constitutional law) and the case here (concerning a federal constitutional issue), the best course is for the state court to analyze this dispute before the federal courts weigh in further. The outcome of Greenwood's state court case could moot -- or significantly narrow -- this case. If Greenwood loses its case in state court, that means the Commission acted reasonably under state law, suggesting that this is the sort of ordinary zoning dispute not likely to trigger the Takings Clause. And if Greenwood prevails, it should be able to obtain there a significant portion of the relief it seeks here. Greenwood's other claims could be mooted or narrowed by the state-court proceeding, too. Whether the fines, not yet issued in the state criminal action, would be constitutionally excessive turns at least in part on the legality of the Commission's actions under state law. And the state-law claims that Greenwood has raised here are largely derivative of its federal Takings claim. We recognize that the Commission has not requested abstention here, but we "may raise the issue of abstention sua sponte." Ford Motor Co. v. Meredith Motor Co., 257 F.3d 67, 71 n.3 (1st Cir. 2001).

Slip op. at 8-9.

Some thoughts. First, a substitute teacher writing the opinion (Justice Breyer), adds an additional layer of difficulty should the owner be thinking of asking the Supreme Court to take up this issue. It shouldn't, but it probably does.

Second, that "land use is a sensitive issue of local policy" trope needs to be put in the dustbin. What issues delegated to local governments are not issues of local importance? You could easily categorize nearly any activity regulated by local governments to be important to the local government or community. But that doesn't stop the courts from taking a firm hand and protecting individual constitutional rights from the excesses of local majorities where speech, religion, arms, or searches-and-seizures, is the right alleged to be violated. So why private property? Other than a disdain by federal judges who consider property issues to be "everyday zoning-type dispute[s]," what accounts for this carving out of property rights for special treatment? 

Finally, this is Williamson County revived. Recall that in Knick and Pakdel, the Supreme Court confirmed that an owner doesn't have to chase state compensation procedures to ripen a takings claim, nor does it need to exhaust the government's administrative review process. Yet here we are: the owner's federal takings claim (in either state or federal court), is held in abeyance to let state court proceedings run their course.

29 Greenwood, LLC v. City of Newton, No. 24-1518 (1st Cir. Feb. 4, 2025)

Fla Ct App (en banc) In Takings Case: "failing to vindicate a right expressly stated in the Constitution is not judicial restraint but judicial abnegation. That we must not do."

Shands Key, with the City of Marathon in the background

This just in: in Shands v. City of Marathon, No. 3D21-1987 (Fed. 5, 2025), Florida's Third District Court of Appeals sitting en banc held that the city's downzoning of 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 because it deprived the owners of economically beneficial uses of their land. This, notwithstanding the possibility of the owners selling the property to a third party, who could have donated the property to city in return for a chit to move up in the city's development queue.

We're not going to go into too much detail or offer our opinion 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. Here's us exiting the courthouse after wrapping up the trial in Key West's Monroe County courtroom a couple of years ago:

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 en banc opinion:

• Bottom line: The court granted the City's request for rehearing en banc and withdrew the panel opinion, and substituted a new opinion. The en banc opinion did not alter the outcome (property owner wins), and also concluded that the downzoning effected a Lucas taking as a deprivation of economically beneficial uses, notwithstanding that the property could be sold to a third party who could donate it to the city in return for some very watered-down transferable development rights (TDRs).
• The issue: The issue as framed by the majority en banc opinion: "[t]his inverse condemnation appeal presents a novel issue regarding the role that transferred development rights ('TDRs') occupy in adjudicating a categorical, as-applied regulatory takings claim advanced under the landmark case of Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992)." Slip op. at 1.
• The dissent's framing (you can sell your property so what's the beef?): The issue as framed by the one dissenting judge: "[t]he central question the property owners raised in their lawsuit is whether the requirement of ten acres to construct a residence rises to the level of a regulatory taking of their property by denying them all economic use of their property." Slip op. at 50 (Logue, C.J., dissenting).
• Takings: clear as mud (you listening, SCOTUS?): "As observed by Judge Shepherd in his dissent in Ganson v. City of Marathon, 222 So. 3d 17, 20 (Fla. 3d DCA 2016), '[t]he Takings Clause is clear and concise,' but '[r]egrettably, regulatory takings jurisprudence is cryptic and convoluted.'" Slip op. at 11-12.
• Use v. value in the Lucas equation: The focus is use not value. "The Lucas Court repeatedly emphasized that the key to establishing a categorical, as-applied regulatory taking is a 'total deprivation of beneficial use.' Id. at 1017. Stated differently, “the Fifth Amendment is violated when land-use regulation . . . ‘denies an owner economically viable use of his land'' without just compensation. Id. at 1016 (quoting Agins, 447 U.S. at 260) (emphasis in original)." Slip op. at 15.
• The place of TRDs in Fifth Amendment analysis: "The significance of TDRs in the regulatory takings matrix has been sharply debated. Some legal commentators have opined that TDRs are irrelevant to the takings side of the equation because they do not impact the nature and extent of the property interest taken by the government. Others have posited that TDRs necessarily mitigate the economic impact of regulation by infusing the property with value and therefore should be relevant in determining whether the government has effectuated a taking. The Supreme Court has yet to clarify this conundrum." Slip op. at 16-18 (footnotes omitted). 
• Token interest: "Against this jurisprudential landscape, we examine the summary judgment record in the instant case. Appellants established that regulation deprived them of any use of the property beyond beekeeping or personal camping. Casting aside the inherent logistical challenges in accessing an island without a dock fringed with high quality hammock and mangroves, these activities are not economically productive. It is axiomatic that 'a State may not evade the duty to compensate on the premise that the landowner is left with a token interest.' See Palazzolo v. Rhode Island, 533 U.S. 606, 631 (2001)." Slip op. at 20-21.
• Future sale as "use?" "It [the Federal Circuit in Lost Tree] then flatly rejected the proposition that “all sales qualify as economic uses.” Id. The court explained that, instead, the relevant inquiry is whether the landowner retains an underlying economic use, and “[w]hen there are no underlying economic uses, it is unreasonable to define land use as including the sale of the land.' Id. (emphasis in original). This is because '[t]ypical economic uses enable a landowner to derive benefits from land ownership rather than requiring a landowner to sell the affected parcel.' Id. (citing Kirby Forest Indus., Inc. v. United States, 467 U.S. 1 (1984) (logging); United States v. 50 Acres of Land, 469 U.S. 24 (1984) (landfilling); and United States v. Fuller, 409 U.S. 488 (1973) (livestock grazing)). Slip op. at 21-22.
• Regulations require land to be left in its natural state? "As the Lucas court observed, regulations “requiring land to be left substantially in its natural state . . . carry with them a heightened risk that private property is being pressed into some form of public service under the guise of mitigating serious public harm.” Id. at 1018. And in this case, the regulation was more onerous than that which went “too far” in Lucas." Slip op. at 27.
• Availability of TDRs may be part of just compensation, but do not relieve government of takings liability: "Of course, under Florida’s existing takings jurisprudence, I suspect a local government cannot force an owner to accept TDRs in lieu of cash as just compensation for a regulatory taking. But, presumably, if a written offer of TDRs in lieu of cash is made by the local government to the owner, the value of offered TDRs can certainly be taken into consideration in determining whether an award of attorney’s fees is appropriate, and, if so, the amount of such award. And certainly, after a jury determines the damages that a regulatory taking has caused a property owner, the parties may negotiate a settlement where the owner accepts TDRs as an alternative to either party’s appeal." Slip op. at 32-33 (footnote omitted) (Scales, J., concurring).
• Separation of powers, part I: "I believe courts should always incline to the most restrained, careful, and painstaking approach before declaring a law unconstitutional. I am particularly concerned that the majority opinion uses its quick and easy “categorical” approach to strike down laws that the other branches of government determined were necessary to protect the lives of the residents of the Florida Keys from hurricanes." Slip op. at 73-73 (Logue, C.J., dissenting).
• Separation of powers, the response: "I concur in the majority opinion. I write separately to address my belief that the dissent’s separation of powers argument is decidedly misplaced. This is not a case in which this Court is invading the province of the legislative branch or expanding its own power improperly. In my view, this is a case in which the Court is exercising its most important role envisioned by our founding fathers—safeguarding individual constitutional rights against government overreach." Slip op. at 35 (Gordo, J., concurring).
• Separation of powers vs. Marbury: "The regulatory scheme as applied, which deprives Shands Key of all economically beneficial use, can only stand if we abrogate our duty to independently preserve and safeguard appellants’ fundamental constitutional right. As I see it, failing to vindicate a right expressly stated in the Constitution is not judicial restraint but judicial abnegation. That we must not do." Slip op. at 42-43 (Gordo, J., concurring).

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).

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

Upon City of Marathon's Motion for Rehearing, Rehearing En Banc, and Certification, Shands v. City of Marat...

Join Us: "Property Rights and The Roberts Court: 2005-2025" (Feb. 27, 2025, UC Berkeley Law School)

Register now and plan on joining us on Thursday, February 27, 2025 at the U.C. Berkeley Law School for a one-day conference: "Property Rights and the Roberts Court: 2005-2025."

Here's the agenda. Here's a description of the program:

For much of the past century, property rights were relegated to second-class status compared to the rest of the Bill of Rights. However, under the Supreme Court leadership of Chief Justice John Roberts, this trend has begun to shift.

In recognition of the 20th anniversary of the Chief Justice’s elevation to the Supreme Court, Pacific Legal Foundation is partnering with Berkeley Law’s Public Law and Policy Program to host a day-long conference exploring the major property rights developments and future of property rights law in the Roberts Court.

We’ll hear from two different panels of renowned legal scholars and accomplished litigators, as well as a keynote lunch discussion between Richard Epstein, director of the Classical Liberal Institute and law professor at NYU School of Law, and John Groen, executive vice president at PLF.

A catered lunch will be provided.

Register here.

Agenda, Property Rights and the Roberts Court 2005-2025 (Cal Berkeley Law School, Thurs. Feb. 27, 2025)

New Article (Eric Claeys): "Takings and Choice of Law After Tyler v. Hennepin County"

Check out this article, forthcoming in the George Mason Journal of Law, Economics, and Policy from lawprof Eric Claeys, "Takings and Choice of Law After Tyler v. Hennepin County."

This is one of the pieces coming out of the recent symposium "Imaging the Future of Regulatory Takings" at George Mason Law School.

Here's the Abstract:

This Essay contributes to a symposium on the future of regulatory takings. It focuses on choice of law in eminent domain disputes. When claimants bring eminent domain claims in federal courts, the courts must determine whether the claimants have constitutional “private property” in the entitlements allegedly taken. Should that determination be made with federal law, with the law of the state allegedly taking property, or law from some other source?

The 2023 Supreme Court decision Tyler v. Hennepin County addressed that issue. Under Tyler, it is a federal question whether an eminent domain claimant has constitutional private property. To answer the question, federal courts usually consult the law of the state where the alleged taking took place. But that presumption applies only if state law seems to secure and not to circumvent the federal right. And if that reservation is not satisfied, federal courts may consult a wider pattern of legal sources—Anglo-American history, the general law of the several United States, federal court precedents, and a broader cross-section of law from the state allegedly taking property. That approach resembles the approach taken generally for federal constitutional rights—especially in Indiana ex rel. Anderson v. Brand (1938)—but varies from the general approach in the sources it makes relevant to settle what counts as private property under the Fifth Amendment. This Essay interprets Tyler, and it offers a normative justification for Tyler’s approach to choice of law in eminent domain. 

Don't miss this one.

Bees May Be Fish In California, But Here In Colorado, Elephants Ain't Persons

What to say about the Colorado Supreme Court's recent decision in Nonhuman Rights Project v. Cheyenne Mountain Zoo, No. 24SA21 (Jan. 21, 2025), wherein the court resolved the momentous and highly controversial question of whether an elephant is a person?

Our first temptation is to see this through the takings lens (surprise), and snark that courts seem be very willing to consider ridiculous cases like this one, determine whether a monkey owns a "selfie" that he snapped, and rule that bees qualify as "fish" in a statute because the legislature didn't think to modify the term "invertebrate" in a list of marine invertebrates with the term "marine" -- yet it is beneath the dignity of judges to consider cases where -- oh, the humanity! -- they may be called on to be Super Zoning Boards of Appeals.

Our other snarky thought was the outcome of this case tells us one thing: the Colorado habeas corpus statute under review here was not subject to rational basis test.

But if you really want to know what this case was about, dig this: plaintiffs sought habeas relief under Colorado's statute, which recognizes the right of "any person" to seek the Great Writ to challenge the legality of his or her confinement. The plaintiffs? Missy, Kimba, Lucky, LouLou, and Jambo, "five elderly African elephants [you heard me] that live at the Cheyenne Mountain Zoo." Slip op. at 4. Allegedly subject to inhuman conditions at the zoo.

Read the opinion if you want to understand why it took the court 20 pages to reject the claim for lack of standing. That's right, elephants are not persons. Soylent Green may be people, but elephants ... no. Whoa, who knew?

That kinda dung may fly in a California court where bees are fish, but this is Colorado, the Switzerland of America!

More on the decision here.

And that brings us to our final snarky thought. Someone had to green light this case. It reminds me of those "rights of nature" cases where the plaintiff is a river or mountain, claiming that a polluter is injuring the river's rights. Like there, we want to see the retainer agreement by which the elephants agreed that these lawyers represent their interests. After all, those very same elephants told us in an attorney-client privileged communication that we cannot disclose, that they are just fine and wanted to hire us to testify for the zoo.

That's our story and we're sticking to it.

Nonhuman Rights Project v. Cheyenne Mountain Zoo, No. 24SA21 (Colo. Jan. 21, 2025)

Cal SCt Petition: Does "Existing Structures" Protected By The California Coastal Act Mean Only Those Existing In 1977?

You remember 1977, don't you? No? Well surely you must know the soundtrack. Sublime and deeply resonant music, accompanied by complex-yet-meaningful lyrics like these:

I'm your boogie man, that's what I am.
I'm here to do whatever I can.
Be it early morning, late afternoon.
Or at midnight, it's never too soon.

To wanna please you, to wanna keep you.
To wanna do it all, all for you.
I wanna be your, be your rubber ball.
I wanna be the one you love most of all, oh, yeah.

I'm your boogie man
I'm your boogie man, turn me on.

We dig it. After all, we there, tuning in on AM radio at a time when disco dominated, before it fell from grace and then became hip again.

Well dust off your 1977 vibes. The year Elvis left the building for good, when Star Wars was just "Star Wars" and not yet footnoted with "A New Hope," when Hutch (not Starsky) charted a Number 1 hit, when we all had a fever on Saturday Night (unless New York City lost power), and the word "shopaholic" first appeared in print -- could be back again.

At least if the California Supreme Court agrees to review a recently-filed Petition for Review in which coastal property owners are asking the court to bring some clarity to the California Coastal Act of 1976 (for that is its official name), which became effective in ... you guessed it, 1977. January 1 of that year to be precise.

In the petition, coastal property owners are asking the court to bring some clarity to a provision in the Coastal Act which requires approval of seawalls when they are required to protect "existing structures" (among other things):

30235. Revetments, breakwaters, groins, harbor channels, seawalls, cliff retaining walls, and other such construction that alters natural shoreline processes shall be permitted when required to serve coastal-dependent uses or to protect existing structures or public beaches in danger from erosion and when designed to eliminate or mitigate adverse impacts on local shoreline sand supply. Existing marine structures causing water stagnation contributing to pollution problems and fishkills should be phased out or upgraded where feasible.

Cal. Pub. Res. Code § 30235. Seems straightforward enough. 

But what does this statute have to do with 1977, you ask? In this case, the question is what does "existing structure" mean -- existing at the time an owner seeks a Coastal Permit to protect a structure in danger of erosion? Makes sense, because one of the upfront purposes of the Coastal Act is to "protect ... private property."

Or does "existing structures" mean, as the Coastal Commission argues, only those structures "existing" at the time the Coastal Act went into effect, January 1, 1977? If you are asking whether the California Legislature really intend to freeze 1977 in amber, and allow the owners only of structures which existed on January 1 of that year to be protected as of right from allowing their property to fall into the ocean, you'd be like a lot of us asking the same thing. After all, "existing in 1977" is a pretty tough interpretation to swallow. But exactly what the Court of Appeal decided.

Here's the issue presented as framed by the Petition:

STATUTORY INTERPRETATION QUESTION OF FIRST IMPRESSION PRESENTED FOR REVIEW

Whether the Coastal Act’s right to build a seawall to protect private or public property under Public Resources Code § 30235 is limited to structures that existed at the time that the Coastal Act was enacted on January 1, 1977, or extends to all structures “in danger from erosion”?

The long and short of it is that even if the statutory language could be interpreted ambiguously (and what statutory language could not, if you worked hard enough to find ambiguity), then why doesn't one of the Coastal Act's primary purposes -- the "protection of private property" resolve any ambiguity in favor of protecting private property? Could the Legislature really only have meant in the Coastal Act's very first section to care only about then-existing private property?

It's right there, front-and-center in the Coastal Act: before getting to the part that most focus on when dealing with the Act -- favoring nonuse over everything else -- the legislature established the Act's foremost purposes:

The Legislature hereby finds and declares:

(a) That the California coastal zone is a distinct and valuable natural resource of vital and enduring interest to all the people and exists as a delicately balanced ecosystem.

(b) That the permanent protection of the state's natural and scenic resources is a paramount concern to present and future residents of the state and nation.

(c) That to promote the public safety, health, and welfare, and to protect public and private property, wildlife, marine fisheries, and other ocean resources, and the natural environment, it is necessary to protect the ecological balance of the coastal zone and prevent its deterioration and destruction.

(d) That existing developed uses, and future developments that are carefully planned and developed consistent with the policies of this division, are essential to the economic and social well-being of the people of this state and especially to working persons employed within the coastal zone.

Cal. Pub. Res. Code. § 30001.

That's right folks, one of the paramount purposes of the California Coastal Act is to "protect ... private property."

Who knew? You almost certainly would not have guessed so if you were to skip reading the Act, and only look at the way the Act is interpreted and applied in this case and many others. Protecting private property doesn't seem to play a big role in how the coastalcrats (sorry, the California Coastal Commission) apply the statute. 

Perhaps in this case, we shall see. Follow along here, or on the California Supreme Court's docket.

Hey, Coastal Commission, I'm your Boogie Man.

Petition for Review, Casa Mira Homeowners Ass'n v. Cal. Coastal Comm'n, No. S288855 (Cal. Jan. 16, 2025)

NJ's Forfeiture Statute Is A Taking Of Surplus Home Equity

If you thought the issue of whether it is a Fifth Amendment taking for a state or local government to "keep the change" after satisfying a tax debt was settled by the U.S. Supreme Court in Tyler v. Hennepin County, 598 U.S. 631 (2023), you'd be right.

Then what was there left for the New Jersey Supreme Court to decide in 257-261 20th Avenue Realty, LLC v. Roberto, No. A-29-23 (Jan. 9, 2025)? Some interesting stuff, it turns out.

And before you conclude that this is just piling-on, remember -- they wanted this: after Tyler, instead of reading the U.S. Supreme Court's decision and the writing on the wall, some state and local governments, unhappy with being cut off from a source of easy money, tried to figure ways to avoid or negate the rule that if there's money left over after you satisfy a tax debt, you gotta give it back. 

After a Jersey owner of a mixed-use property failed to pay $606 in sewer tax bills, the city placed liens on the property. Under the authority of a state statute (the Tax Sale Law), a a private firm purchased the tax sales certificates, after which it filed a tax foreclosure lawsuit. The owner tried to redeem by offering $9,000 but the court held the amount owed was $33 grand. The owner didn't answer the complaint, didn't redeem, and the court entered final judgment in favor of the private lienholder. Later, after the owner posted $50k in escrow, he asked the court to vacate the judgment, allow him to redeem, and to restore title. The court said yes. 

During the pendency of the lienholder's appeal, the U.S. Supreme Court issued Tyler, and the NJ appellate division affirmed the judgment in favor of the owner, rejecting the lienholder's argument that Tyler only applied when governments take surplus home equity, and that the ruling was not retroactive. The NJ Supreme Court agreed to review the case, after which many many amici jumped in (our firm, which represented the property owner in Tyler, included).

First, the court noted that local government rely on real estate taxes as their primary source of revenue, and that the Tax Sale Law's foreclosure procedure allows municipalities to "collect a stream of revenue when property owners do not pay their taxes." Slip op. at 10. The tax foreclosure process has been around in some form in New Jersey for a while (1886). And the TSL permits local governments to sell the lien to private parties. 

The court next acknowledged that may be so, but also noted Tyler held that a good reason for the taking doesn't relieve the obligation to take only with compensation, and that a state's property law only can go so far in defining what counts as "private property" under the Fifth Amendment. And "Tyler, of course, is binding precedent of the United States Supreme Court." Slip op. at 22. Indeed, we'd have pretty much the same result even without Tyler, because "New Jersey, similarly, has long recognized a property right to surplus equity in different contexts." Slip op. at 26. Thus, "[a]s in Minnesota, therefore, property owners in New Jersey have a recognized property right to surplus equity." Slip op. at 27.

The big issue the court resolved was whether Tyler was limited only to government actors, and whether the plaintiff here -- a private outfit that purchased the tax lien from the city under the TSL -- was immune. The court held no, the private actor's actions were fairly attributable to the state, and "the purpose, structure, and practical application of New Jersey’s TSL demonstrate that private lienholders who execute tax foreclosures may be considered state actors." Slip op. at 28. Collecting taxes is a traditional public function as is seizing properties to satisfy a tax debt, and the lienholder here acted under the authority of the TSL, "working in tandem" with local government. 

A final thought: maybe instead of resisting the vibe of Tyler, state and local governments should be working to meet their constitutional obligations instead of trying to craft ways to get around the Supreme Court's rulings? The whole "turn square corners" thing doesn't seem like it's too much to ask, does it? 

(And what's with the video above and what does this have to do with the case? Nothing, we just like it, and it's Friday.)

257-261 20th Avenue Realty, LLC v. Roberto, No. A-29-23 (N.J. Jan. 9, 2025)

Breaking News: Come Join Us For The 42d ALI-CLE Eminent Domain & Land Valuation Litigation Conference, San Diego, Jan 30-Feb 1

With our tongues firmly planted in cheeks, the Planning Chairs for the upcoming 42d edition of this popular and venerable Conference bring you this "breaking news" report from San Diego!

As you know, in addition to being the best nationally-focused conference on the subjects that we love and a venue that is nearly certain to have some of the warmest winter weather in the continental United States, and we went on-location from some of the local highlights: the beaches, Torrey Pines, the Zoo, Balboa Park, the Gaslamp Quarter, and Coronado to name but a few.

More about the Conference here, including registration information.

Here are some of the highlights:

• Property Rights at the Supreme Court: DeVillier and Sheetz and What's Next
• Slow Take: Possession, Rent, Relocation, and Offset
• The Jury's View: How Jurors See Your Case
• From Penn Coal to Penn Central: How to Prove "Too Far"
• Leveraging Expertise in Eminent Domain Litigation: Working with Land Planners, Engineers, and Other Predicate Experts
• Kelo at Twenty: What Changed, What Didn't, and What's on the Horizon
• Viva Las Vegas: How the Nevada Judiciary Upheld Property Rights in 180 Land's Inverse Condemnation Taking
• Ethics: Guiding the Trolley: Perspectives on Professional Ethics in Eminent Domain for Lawyers, Appraisers, and Right of Way Agents
• "I Think I Shall Never See" Just Compensation For a Tree: Strategies to Securing Recovery for Trees, Crops, and Fixtures

And more. Check out the complete agenda here. Registration information here. 

We especially welcome first-time participants, or those returning after an absence. Connect (or reconnect) with your colleagues from across the nation.

The 41st Conference was in New Orleans. Here's a report of that event, and here are our reports from prior conferences in Austin and Scottsdale.

Don't miss out on San Diego: we have had record attendance in recent years, so hold your space now. #EminentDomain2025

Iowa: Mandatory Inspection Of Rental Units Without A Warrant Is Not Facially Unconstitutional, Because Private Inspectors Might Barge In

It's been a couple of weeks, but we're still trying to wrap our head around the Iowa Supreme Court's opinion in Singer v. City of Orange City, No. 23-1600 (Dec. 20, 2024).

The court rejected a facial challenge under the Iowa Constitution's search-and-seizure clause to a city ordinance requiring the owner of rental units to have a rental permit and to submit to "regular inspections" of those properties. The ordinance purports to create a "right of entry" for a "code official," and if the owner refuses to voluntarily allow inspection, the inspector may obtain an "administrative search warrant" to enter and search. An owner can exempt itself from inspection by a city inspector if a unit is "inspected by a certified third-party inspection organization[.]" And the ordinance says nothing about probable cause.

Several owners sued, and after discovery, the court granted the plaintiff-owners summary judgment. It declared the ordinance facially unconstitutional, and enjoined the city from seeking administrative warrants. The city appealed.

The court considered the owners' argument that the Iowa Constitution requires evidence of an actual violation before issuance of an administrative warrant. The Fourth Amendment, by contrast, allows administrative warrants even if there's no specific knowledge of a violation in a particular property. No, our Iowa standards are the same, held the court.

Also considered was the owners' argument that the city's ordinance does not require any showing of probable cause. This is a facial challenge, reminded the court, and we know how hard those are. A "facial" challenge means that the ordinance is "incapable of any valid application." Slip op. at 10. So let's make up some situations where the ordinance might be applied in an ok way. Could there be a set of facts in which the ordinance could be applied in a constitutional fashion? Court court imagined three examples.

First, there may be some circumstances where a city inspector gets an administrative warrant based on probable cause. You never know, an inspector may be willing to do more work than the ordinance requires. Second, the ordinance allows the city to pursue other "remedies provided by law" and not just an administrative search warrant. The court doesn't say what those other remedies might be, but hey, those remedies might accord with the constitution, you never know!

And finally (and this is the part where we really have trouble), an owner might have a rental unit exempt from city inspection, where a certified "private party" conduct the inspection. Who or what is a "private party" inspector? Heck if we know (and apparently neither does the court, which explicates no further on the notion). For what it is worth, we're not quite seeing this one as clearly as the court apparently did. Would not an inspection by a government-certified inspector -- even an inspector employed privately -- entering under the authority of the ordinance be treated pretty much the same as a government inspector? And if the court were to consider opting into the private-inspector exemption a voluntary act, would that not raise unconstitutional conditions problems?

Likely next up? An as-applied challenge, perhaps.

Singer v. City of Orange City, No. 23-1600 (Iowa Dec. 20, 2024)

New Article: Timothy Sandefur, "Eminent Domain in the Constitutions of Arizona, Washington, and Other States," 18 N.Y.U. J.L. & Liberty 167 (2024)

We're starting off the new year with some eminent domain goodness. Tim Sandefur has published "Eminent Domain in the Constitutions of Arizona, Washington, and Other States," 18 N.Y.U. J.L. & Liberty 167 (2024).

There's a lot in the piece that will keep you reading, but what we found particularly insightful was how public use/purpose limitations "should operate in practice." In our opinion, it's fairly easy to say that the Fifth Amendment (and state constitutions) operate as a robust check on the sovereign power to take property for public use, but a lot more difficult to apply that broad notion to particular circumstances in a way that is both uniform and predictable. Right now, we seem to be operating on a know-it-when-I-see-it basis, but that doesn't get us to a general rule. This piece goes a long way to getting us to a general rule.

Highly recommended.

Here's the Abstract:

The nineteenth century was an extraordinarily prolific age of constitution-making. One of the greatest concerns of constitution-makers during this period—particularly in the western states—was the protection of private property against threats such as the use of eminent domain and the damage to property resulting from public works projects. This Article takes the eminent domain provisions of the Arizona and Washington constitutions as a point of departure to examine the innovative ways in which constitution-makers sought to limit government’s power to deprive people of their property. These constitutions—which until the admission of Alaska and Hawaii were the most up-to-date constitutions in America—contain four such innovations: (1) an explicit ban on takings for “private use,” reinforced by prohibitions on judicial deference regarding the definition of “public use”; (2) a compensation requirement for the “damaging” of property; (3) a requirement that payment precede a taking, and (4) a ban on deducting from just compensation awards the amount of purported “benefit” resulting from a taking. The Article traces the origins of these four protections, with reflections on how they should operate in practice.

Check it out.

Volume 13 Brigham-Kanner Property Rights Journal Now Available

The latest edition of the Brigham-Kanner Property Rights Journal (William & Mary Law School) is out, with intriguing Dirt Law scholarship from the luminaries in the field.

Check out the Table of Contents above, and then go here to download each piece or the entire issue. We will note, with a small bit of pride, that two of the pieces were authored or co-authored by former students of ours (at W&M Law and the University of Hawaii Law School).

All of the pieces are must-reads.

CA3: State-Created Association Is A State Actor With No Private Property Rights

We tend to avoid cases about insurance. Not because they are dull (as you might wrongly imagine). Indeed, there's more excitement in insurance cases than you'd guess. But insurance law and the insurance regulation field needs a certain level of very niche expertise that we don't possess. So normally, we would not have given the U.S. Court of Appeals for the Third Circuit's opinion in Pennsylvania Prof. Liability Joint Underwriting Ass'n v. Gov. of the Commonwealth of Pennsylvania, No. 18-2297 (Dec. 16, 2024) a second glance.

But a case that at first glance seemed about insurance contained lot of "takings" references sprinkled across the many pages of the opinion, so it pinged our radar. And it turns out it was worth a download and review if you keep your expectations in check.

In the end, the court didn't really tell us much about regulatory takings doctrine, even though the district court held that by adopting statutes pursuant to which the Commonwealth of Pennsylvania raided the funds held by the Joint Underwriting Association, it had taken private property. The JUA acts "as a professional liability insurer of last report for high-risk medical providers." Although created by the Commonwealth, the government never funded the it. But the JUA must have been doing something right because "[s]ince its inception, it has amassed through investments a surplus of $300 million."

Well, we know what happens when any entity, public or private, gets too much money: the Crown starts coveting it. Just ask the Knights Templar how their amassing of more money than King Philip worked out for them. In the end, the Crown thinks it has the trump card. Which it often does (except, perhaps, in the United States, where the Constitution bats last, at least in theory). Here, the Commonwealth legislature repeatedly enacted laws to transfer JUA's surplus to the state's general fund.

The JUA sued for, inter alia, a taking. One of the defenses posed by the Commonwealth was (you guessed it): the surplus is not "private property" because the JUA is part of the government. And the government cannot sue itself for a violation of the Constitution. However, as noted above, the district court agreed with the JUA.

The Third Circuit had a slightly different view. It asked whether the JUA a creature of the Commonwealth: "in other words, whether it is a public entity rather than a private one." Slip op. at 7. The court held that the JUA is a public entity. We'll let you read the opinion (all 44 single-spaced pages of it) for the exact reasons why. Here's the court's summary:

In sum, Pennsylvania established the JUA to serve an integral role in the administration of the Commonwealth’s insurance market and, consequently, in the health care market too. In doing so, it imbued the JUA with the coercive power of state government to compel private insurance companies to take specific actions. The JUA’s funds are the result of the Commonwealth’s enforced acquisition of funds to support those goals, and only the Commonwealth has a legally protectable interest in the JUA and its resources. We thus hold that, under Dartmouth College’s guidance, the JUA is a public institution and is without the ability to maintain the constitutional claims it has asserted against the Commonwealth.

Slip op. at 37.

No takings claim.

Even though there's not a lot about takings here, we decided to post it mostly because the decision informs our analysis of those cases where a kinda-sorta-government actor is sued for a taking, but then claims to be a private actor and not a state actor. You know the drill: a utility, or a university, or similar. We've all been there trying to figure out of our defendant engages in "state action" for purposes of the Fourteenth Amendment, or even whether it enjoys Eleventh Amendment immunity from federal lawsuit.

On that, this one might be worth your time skimming, or even reading in detail, if you have the interest.

Pennsylvania Prof. Liability Joint Underwriting Ass'n v. Governor of the Commonwealth of Pennsylvania, No....

Latest Ep, Eminent Domain Podcast: Podworthy Cases, ALI-CLE, And 1970s Bands

Our thanks to Bobby Debelak for having us back on as a guest on his Eminent Domain Podcast.

We're long-time fans of the pod (naturally), and it was good to get together with Bobby and talk a bit of shop.

Here's a description of our session:

Robert Thomas joins Bobby Debelak to discuss the most interesting legal developments from 2024, cases to watch next term, and previews the 2025 ALI-CLE conference to be held in San Diego at the end of January 2025. At the end, a musically themed cross-examination includes Robert's dream set list of 70s bands.

Our three set list entries: the first, a classic, timeless sound; the second might reveal our "square" proclivities; while the may be a selection The Dude may not approve.

Check it out above, on Spotify, or wherever you get your pods!

Holiday Dirt Law Movie: "Christmas at the Drive In" (aka Rudolph The Red-Nosed Redeveloper)

'Tis the season for TV holiday movies. Here's one to add to your list, as it is on-brand for us dirt lawyers. "Christmas at the Drive In" is described thusly:

"A property lawyer works to prove that her town's Drive In Theater, a local institution, is not closed down at the holidays, finding romance with the very person who is trying to sell the property."

When property, redevelopment, historic preservation, and l'amour is involved, who could resist?

Beyond The Hohfeldian Bundle: Cryptocurrencies, Blockchain, And The "Ordinary, Common" Meaning Of "Property"

We thought this was going to be about sticks.

We ain't gonna pretend we understand cryptocurrency or blockchain. I'm just a caveman. Your world frightens and confuses me!

And there's a lot there to confuse us in the U.S. Court of Appeals' recent opinion in Van Loon v. Dep't of the Treasury, No. 23-50669 (Nov. 26, 2024), where one of the questions was the meaning of the term "property" as used in the International Emergency Economic Powers Act. Under that statute, the President may "block ... any property in which any foreign country or national thereof has any interest."

The Treasury Department blocked "Tornado Cash" which, as far as we can tell, is a computery way to anonymously transfer asserts digitally, and "obfuscat[e] the origins and destinations" of the transfer. Slip op. at 2. The Department's regulations define "property" broadly, and it blacklisted Tornado Cash "for its role in laundering virtual currency for malicious cyber actors -- for example, a North Korea-linked hacking group that used Tornado Cash to launder the proceeds of cybercrimes." Id.

The plaintiffs are users of Tornado Cash who objected to the Department's blacklisting. as beyond the authority of statute. This isn't property they argued, and therefore isn't subject to blacklisting notwithstanding the Department's regulations. The statute, they argued, does not define the term "property," and the issue was whether "immutable smart contracts" (lines of privacy-enhancing software that are part of Tornado Cash) qualify. 

The court was not daunted by the lack of statutory definition, concluding that "property has a plain meaning: It is capable of being owned." Slip op. at 20. Applying an original public meaning approach, the court first held that the 1977 dictionary (the statute was adopted that year) defined property as being "everything which is or may be the subject of ownership[.]" Id. There's also a dominion aspect (One-L flashback to Pierson!). Slip op. at 21 ("Sure, '[o]wnership does not always mean absolute dominion,' but it at least requires some dominion."). 

This guy.

The opinion also touches on Blackstone and his Commentaries and the right to exclude. Applying those principles to the smart contracts, the court held they are not property:

The immutable smart contracts at issue in this appeal are not property because they are not capable of being owned. More than one thousand volunteers participated in a “trusted setup ceremony” to “irrevocably remov[e] the option for anyone to update, remove, or otherwise control those lines of code.” And as a result, no one can “exclude” anyone from using the Tornado Cash pool smart contracts. In fact, because these immutable smart contracts are unchangeable and unremovable, they remain available for anyone to use and “the targeted North Korean wrongdoers are not actually blocked from retrieving their assets,” even under the sanctions regime. Simply put, regardless of OFAC’s designation of Tornado Cash, the immutable smart contracts continue operating. And furthermore, because the software continues to operate regardless of the sanctions, and the blockchain technology “allows peer-to-peer transfers . . . without requiring the recipient to consent to transfer,” some users may become liable whenever someone transfers them digital assets via Tornado Cash, even without their knowledge or consent.

Sure, some smart contracts are capable of being owned in the sense that Tornado Cash developers can create new smart contracts and disconnect old mutable contracts. In theory, should Tornado Cash developers choose to comply with sanctions on mutable smart contracts, those developers could disconnect those mutable smart contracts to make them inaccessible and unusable by anyone on the Ethereum blockchain. But they cannot discard, change, disconnect, or control smart contracts that are immutable—like the ones currently listed on OFAC’s SDN list and at issue in this appeal. Even with the sanctions in place, “those immutable smart contracts remain accessible to anyone with an internet connection.”

Slip op. at 22-23.

In short, these things are not capable of being owned.

The court also concluded that the Department's regulatory definition of property doesn't cover the immutable smart contracts, even though the Department's definition includes "contracts of any nature." Slip op. at 27. But despite their nomenclature, "the immutable smart contracts are not contracts." Slip op. at 28. Why? Because these are not bilaterally, but are one-party only: "[i]mmutable smart contracts have only one party in play." Id.

As we said at the beginning: we're not going to pretend we understand this stuff fully.

We conclude with our sense that this looks a lot like a square-peg-in-a-round-hole situation. Blockchain and immutable smart contracts (that are not really contracts) don't easily fit into any traditional or historical conceptions of property, and although we follow the court's thinking and its conclusion, things as amorphous as these are seem an ill-fit at best for the old bundle of sticks metaphor.

Van Loon v. Dep't of the Treasury, No. 23-50669 (5th Cir. Nov. 26, 2024)

Another Semester Of Dirt Law In The Books

How it started.

Once again, our fall duties included teaching two property law courses at the William and Mary Law School: Eminent Domain & Property Rights, and Land Use Controls. We started in mid-August, and just wrapped the classroom portion of the courses earlier this week. I say "classroom portions" because although we are done with classwork, the courses are not done, and the students are presently deep into writing their final papers (we don't do an exam in either course). Then comes grading, and a welcoming of the students as full-fledged colleagues in the Dirt Law Bar.

Many law schools feature Land Use Law courses, but only a few are so bold as to include a course on Eminent Domain and Property Rights in their offerings (and a substantial three-credit course, at that). William and Mary Law School is an excellent and very appropriate place to study these topics.

I'm grateful for the opportunity to be here, at the lectern. What a great law school, and wonderful, committed, students. As I usually do, I learned way more than I conveyed. A welcoming administration, faculty and staff, too. As I have noted before: if you have a chance to return to the law classroom and teach, don't the let the opportunity pass you by. It's hugely rewarding.

                                  Big Wall - o - swag.

A big thank you to law school Dean Benjamin Spencer, Professor Emerita Lynda Butler (for entrusting me with her beloved Land Use class upon her retirement), and Professors Tom McSweeney (a better office suitemate I could not ask for), and James Stern for your guidance and support, and making me feel like I belonged. And to my students, who challenged me and kept me grounded.

And, as always, to Joe Waldo, who makes it all possible. 

The mysterious ducks. They are a "thing" here at W&M Law,
and can show up in unexpected places.
I am still not sure where they come from,
or who places them. But I am honored to have them
decorating my office name plate.

Two essentials to teaching: a logo/swag law school coffee mug,
plus a good supply of dry erase markers.


Our Land Use course. So good, we have three of 'em.
The actual reason the course is listed thrice is that
in addition to being offered on the Law School's curriculum,
students in the College's Marine Sciences and Public Policy
programs are enrolled.

Very appropriate that right outside of our Land Use classroom
is the bust of one William Blackstone.

An integral part of both courses is the annual Brigham-Kanner
Property Rights Conference, held at the law school in
September or October. Our students spend the week with the nation's
leading property scholars and practitioners, culminating
in the Conference presentations on Friday.

Our Land Use course starts off Class # 1 with Euclid (of course).
Guess what case we discuss on the
final day of that class? Euclid!
Justice Sutherland would be pleased.

Not only do we deal with the nuances of land use regulations
(zoning, variances, ZBA appeals, and the like),
we also delve into the philosophical bases for how and why
third parties have the power to control what someone
else does with their land.

Here are the light controls in one of our classrooms,
which look more like descriptions of
points on the political spectrum!

In both classes, we try and foster a principle that W&M Law emphasizes:
free and open discussion of issues and viewpoints. Both of our classes
treated difficult subjects (for example, racial discrimination in land
use, slavery and its consequences, the proper role of property rights), with
honesty and maturity. How refreshing.

One of the unique features of the Eminent Domain & Property Rights course
is that we spend a lot of time on Just Compensation: what it means,
what it covers, and how it can be calculated. Not many law school
courses include this topic. But we do.

Both courses are really just applied constitutional law, no?

In addition to dealing with these subjects as academic matters, we
include a healthy dose of "real world" stuff. That includes having our
practicing colleagues visit, and speak about how these issues play out
in practice. Jeremy Hopkins, Brett Tensfeldt, and Steve Davis visited
the Eminent Domain class.

Andrew Brigham joined our Land Use class
to explain how these concepts
play out in eminent domain cases.
He also spent a lot of time on how to
prepare for a career in property law.

We also welcomed back to the classroom a course alumni. Here,
Xijia Yuan, who is now a practicing property lawyer,
explains why she loves dirt law.

Our Toronto friend and colleague Shane Rayman paid a special visit to
discuss the differences between the US system and Canada's.

I'm grateful that my friends and colleagues are willing to spend their
valuable time to provide students with their wise counsel.
Brett Tensfeldt, Andrew Brigham, Heather
Cunningham, and Xijia Yuan: you are the best!

The Brigham-Kanner Property Rights Conference included
a session "Careers in Dirt Law." with Kady Valois, Randy Smith,
and WM Law alum Elizabeth Sockwell. Brett Tensfeldt ran the program.

Zoning practice has a lot of jargon and abbreviations.
We covered em.

In our last class in each course as a way of wrapping up
and summarizing, we played Bingo. No, not the same game you remember
from One-L. Here, the students are given a blank card,
which they filled out with words and phrases from the course.
Then, when I said that that word or phrase during the final class,
they could check that box. When they got five-in-a-row, time to yell "BINGO!"

And yes, prizes were available.

I hit up the local Williamsburg Trader Joe's for our Bingo prizes.
The most sought-after prizes were the four $25 TJ gift cards.

Naturally, for the Eminent Domain and Property Rights class,
the four TJ gift cards were the "corn" cards.
You know why, fans of Magna Carta!

Also appropriate property rights prizes: these "bundles of sticks."

I have a tradition that on the final day of each class,
I pass around my scrapbook and ask students
to add their thoughts. Yeah, kind of like high
school yearbook. I get that it's kind of goofy.
But one of my favorite things is to read
their comments, and it provides a good
way for me to remember the class.

Last one out, please turn out the lights.
That would be me.

See you next Fall.

Iowa: Statute Permitting Precondemnation Surveyor Entry Is "pre-existing limitation on ... title"

The latest state supreme court decision involving a takings challenge to a statute permitting precondemnation entries, this time from Iowa.

In Summit Carbon Solutions, LLC v. Kasischke, No. 23-1186 (Nov. 22, 2024), the Iowa Supreme Court concluded that, at least on its face, Iowa's entry statute for hazardous liquid pipelines, which permits entries for land surveys and requires the payment of actual damages, is not a taking of an owner's right to exclude:

Kasischke recognizes that section 479B.15 requires “[t]he pipeline company [to] pay the actual damages caused by the entry, survey, and examination” but argues that the mere entry onto his property to conduct the survey is itself a taking of his right to exclude all others, for which he is also entitled to just compensation. Kasischke’s constitutional claim fails because the statute did not take away a property right that he owned. Rather, he has no right to exclude the surveyor because section 479B.15 is a lawful pre-existing limitation on his title to the land.

Slip op. at 10.

As that indicates, the argument floundered on the threshold "private property" question, with the court concluding that Cedar Point did not "establish a new per se rule" requiring compensation whenever there is a physical invasion, but instead reaffirmed the "background principle" exception from Lucas. See slip op. at 13 ("“Second, many government-authorized physical invasions will not amount to takings because they are  consistent with longstanding background restrictions on property rights.” Indeed, “the government does not take a property interest when it merely asserts a ‘pre-existing limitation upon the land owner’s title.'") (citations omitted).

Requiring owners to submit to precondemnation entries for surveys "is a longstanding background restriction and therefore a recognized exception to the Court’s per se taking jurisprudence." Id. These statutes "are as old as the republic itself." Id. Check out pages 14 through 15 of the opinion, where the court notes the early state court cases holding such entries were not takings, and also how legislatures and courts expanded the scope of the permissible entries during the 18th and 19th Centuries. "Today, all fifty states have statutes authorizing entries to private property for the purpose of conducting preliminary land surveys in exercising eminent domain." Slip op. at 15. And Iowa is no different. 

The court distinguished the entries permissible under Iowa's statute with the California labor regulation invalidated in Cedar Point, which authorized more intense and lengthy invasions. Slip op. at 16.

On one hand, the Iowa court's decision isn't all that surprising because this was a facial challenge. Most courts which have addressed the takings question have held that -- at least facially -- these statutes are not unconstitutional. For recent examples, see South Dakota and North Dakota.

But as those cases illustrate, the entries authorized by the statutes must be minimally invasive and superficial, and relatively innocuous. See, for example, North Dakota, and South Dakota (again). To use the famous phrasing of Justice Holmes, these entries can't go "too far." Which means that although the facial challenge failed here, it seems that as-applied challenges remain viable in the right cases.

Summit Carbon Solutions, LLC v. Kasischke, No. 23-1186 (Iowa Nov. 22, 2024)

NYT Word Of The Day: "Eminent Domain"

Thanks to lawprof Donald Kochan for the heads-up: the "Word of the Day" in today's New York Times is ... "eminent domain."

Defined by the piece as:

"the right of the state to take private property for public use; the Fifth Amendment that was added to the Constitution of the United States requires that just compensation be made"

Ugh. The "right?" No mate, it's a sovereign power, not a right.

The piece then challenges the reader:

Can you correctly use the word eminent domain in a sentence? Based on the definition and example provided, write a sentence using today’s Word of the Day and share it as a comment on this article. It is most important that your sentence makes sense and demonstrates that you understand the word’s definition, but we also encourage you to be creative and have fun.

OK, we'll have a go. How's this for our entry: "Remember when the New York Times was the private beneficiary of the City of New York's abuse of its power of eminent domain when it declared the existing property blighted, so it could give the land (and tax breaks) to the paper for its new Times Square office?"

Add yours in the comments.

(Un?)Happy Euclid Day!

98 years old, and still going (for better or worse)

On this day in 1926, the United States Supreme Court issued its landmark opinion in Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (Nov. 22, 1926).

You know this one (and can you call yourself a dirt lawyer if you don't?). It's the one in which the Supreme Court first upheld -- against a facial due process challenge -- the validity of this thing we call "zoning." While in the intervening century, zoning has become a catch-all term for all sorts of regulatory restrictions on the uses of real property, land users know that "zoning" -- ackshually -- refers only to the regulation and separation of uses, and restrictions on density, and height regulation. At least that's how it began.

While "Euclid" and "Euclidean zoning" have become part of the land use lexicon and landscape, the decision might have been seen at the time as somewhat surprising. After all, the Supreme Court was in the height of the so-called Lochner era, when it might have been expected to get the legal vapors over these type of restrictions on economic liberty and property. In an era when the Court was more aggressively policing the police power, for it to uphold, even generally, the validity of zoning restrictions, might not have been expected.

And perhaps even more surprisingly, the opinion was authored by none other than Justice George Sutherland, one of the notorious Four Horsemen who would later regularly vote to invalidate similar New Deal legislation.

But Sutherland and the Court went the other way on this "zoning" thing, applying what later became known as the rational basis standard of review. Fairly debatable? No sweat. Who are we, mere judges, to say otherwise?

What accounts for that? Some have noted that the "Bettman Brief," a late-filed amicus (submitted after oral argument) on behalf of the National Conference on City Planning and others, held sway. The dots are not that difficult to connect -- much of the language and imagery in the Euclid opinion such as the "parasitic" nature of (horrors!) apartments -- comes straight out of the Bettman brief. And it also isn't that hard to connect the dots between a facially-neutral tool of exclusion like zoning, and the Supreme Court's then-recent rejection of express racial discrimination in local land use regulations (we're talking Buchanan v. Warley, 245 U.S. 60 (1917)).

But despite those roots, with a few hiccups along the way -- a mere four year later, pretty much the very same Court held in Nectow v. City of Cambridge, 277 U.S. 183 (1928) that, as applied to a specific parcel, Euclidean zoning was arbitrary and capricious and violated a property owner's rights, with the very same Justice Sutherland authoring the opinion -- zoning has been widely accepted around the nation (except, most notoriously, in Houston, which has opted for a more ad hoc, less comprehensive plan-based form of use regulation), with the courts doing little to stand in the way.

These days, however, there's a renewed focus on Euclid and zoning's troublesome roots. Thus, our title's "un" headline. But even as we reckon with that history, zoning chugs along towards the century mark.

Let's see what the next two years might bring. In the meantime, we're going to recognize Euclid's birthday. Whether it is a happy one is subject to change.

Euclid is literally a landmark decision.

Brief Amici Curiae of National Conference on City Planning, Village of Euclid v. Ambler Realty Co., No. 25-...

 

 

Registration For The 42d ALI-CLE Eminent Domain & Land Valuation Litigation Conference Is Underway (Don't Miss Out!)

Get ready to join your colleagues and friends in San Diego for the 42d ALI-CLE Eminent Domain & Land Valuation Litigation Conference.

The 41st Conference was in New Orleans. Here's a report of that event, and here are our reports from prior conferences in Austin and Scottsdale.

Here are some of the highlights of the upcoming Conference:

• Property Rights at the Supreme Court: DeVillier and Sheetz and What's Next
• Slow Take: Possession, Rent, Relocation, and Offset
• The Jury's View: How Jurors See Your Case
• From Penn Coal to Penn Central: How to Prove "Too Far"
• Leveraging Expertise in Eminent Domain Litigation: Working with Land Planners, Engineers, and Other Predicate Experts
• Kelo at Twenty: What Changed, What Didn't, and What's on the Horizon
• Viva Las Vegas: How the Nevada Judiciary Upheld Property Rights in 180 Land's Inverse Condemnation Taking
• Ethics: Guiding the Trolley: Perspectives on Professional Ethics in Eminent Domain for Lawyers, Appraisers, and Right of Way Agents
• "I Think I Shall Never See" Just Compensation For a Tree: Strategies to Securing Recovery for Trees, Crops, and Fixtures

And more. Check out the complete agenda here. Registration information here. 

We especially welcome first-time participants, or those returning after an absence. Connect (or reconnect) with your colleagues from across the nation.

Don't miss out: we have had record attendance in recent years, so hold your space now.

Come, join us!

Blight Redevelopment & Eminent Domain, India Style: Private Property As A Basis For "Economic Democracy"

We're not going to pretend to fully understand the Supreme Court of India's recent decision in Property Owners Ass'n v. State of Maharashtra, No. 2012-2022 (Nov. 4, 2024) for obvious reasons (plus, the judgement and various opinions and dissents total 193 pages).

But we post it here because we think it gives some insight how other jurisdictions and cultures view expropriation, and the role of property rights in free societies.

Some background. The Constitution of India (article 39(b)) has been held by the Supreme Court to embody a concept known as "constitutional socialism." It provides:

The State shall, in particular, direct its policy towards securing--

...

(b) that the ownership and control of the material resources of the community are so distributed as best to sub serve the common good.

Not quite the Fifth Amendment, is it?

Indeed, Justices of the Supreme Court have opined that constitutional socialism means that everything is the community's, including private property ("material resources of the community in the context of re-ordering the national economy embraces all the national wealth, not merely natural resources, all the private and public sources of meeting material need, not merely public possessions").

But there seems to have been a long-standing push-pull between the legislature and the courts over the nature and role of private property, with the legislature pushing the socialist view and the court responding with decisions emphasizing the role of privately-owned property, as in this earlier case we posted.

The current case is what we'd label eminent domain for blight remediation and redevelopment. By statute, the Mumbai Housing Board may take certain private property for redevelopment if 70% of the residents approve. The statute was adopted under the authority of article 39(b), and property owners objected to the expropriation, asserting that the Court's prior endorsement of constitutional socialism should not have included all private property as "material resources of the community," to be "distributed as best to sub serve the public good."

That's not socialist, that's Marxist, they argued, and private property in some form must exist.

A seven-Justice majority of the nine-member Supreme Court agreed, rejecting the view that all private property is part of the "resources of the community." Community resources do not include private property because the use of the term "community" must mean there's some distinction between the community and the individual.

The majority also rejected the notion that India's Constitution enshrines an economic theory. Instead of requiring socialism, the India Constitution does not require "particular form of social structure or economic policy for future governments ... [and] did not intend to prioritise one form of government or economic structure over the other but instead only laid down the ideal of ‘economic democracy’. Slip op. at 152.

In short, that means that the electorate remains free to choose the "economic or political school of thought" it prefers. Slip op. at 153. The end result is that the government does not have a free hand to take privately-owned property.

Here's more on the decision and the opinions of the Justices:

• Summary of the decision and judgement (Supreme Court Observer)
• Case page (Supreme Court Observer)
• Opinion: Private Property And The Question Of 'Constitutional Socialism' (NDTV)
  
• SC’s interpretation of private property curtails state’s power but enhances judicial review (The Indian Express)
  
• Justice Dhulia Stands Firm on Constitutional Socialism (Devdiscourse)

Check it out

Property Owners Ass'n v. State of Maharashtra, No. 1012-2022 (India Nov. 5, 2024)

Links From Today's ABA Land Use Session

Here are the cases and other materials we discussed in today's Section of State & Local Government Law Land Use group meeting on takings:

• By The Thinnest Of Margins, SCOTUS Declines Public Use Pretext "Spite Taking" Case
• SCOTUS Declines To Review NYC Rent Control Challenge
• Sheetz pt. I - "Radical Agreement" At SCOTUS: "Your Money Or Your Rights" Isn't OK Just Because A Legislature Does It
• In DeVillier v. Texas, The Winner Takes It All
• 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
• "Final decision" ripeness incentivizes government to be opaque, and avoid saying no.
• Texas takes a more practical (and realistic) approach to takings ripeness: City of Buda v. N.M. Edificios and City of Kemah v. Crow
• New Cert Petition: Does The Obligation To Provide Just Compensation Waive Sovereign Immunity?
• Inverse liability for wildfires?
• New Law Review Article: John Groen, "Takings, Original Meaning, and Applying Property Law Principles to Fix Penn Central," 39 Touro L. Rev. 973 (2024)
• Yee v. Escondido and physical occupation takings lower court split: CA8: Yee v. Escondido Doesn't Save Eviction Moratorium From Takings Review and CA9: No Physical Commandeering In Eviction Moratorium Because Yee Says "You Let The Tenants In, So You Can't Complain About Keeping Them (For Free)"
• Florida Appeals Court: TDRs, Beekeeping, And Camping Are Not Economically-Beneficial Uses, So Downzoning Is A Lucas Taking

PS: If you are not a member of the Land Use group, you really should be. We summed up the reasons why here.

New Law Review Article: John Groen, "Takings, Original Meaning, and Applying Property Law Principles to Fix Penn Central," 39 Touro L. Rev. 973 (2024)

Today's must-read, a (very) recent article by our Pacific Legal Foundation colleague John Groen, published in the Touro Law Review, "Takings, Original Meaning, and Applying Property Law Principles to Fix Penn Central."

Get the pdf here.

With a title like that, who could resist? Here's the Abstract:

Justice Clarence Thomas, dissenting in Murr v. Wisconsin, suggested the Supreme Court take a “fresh look” at its regulatory takings jurisprudence and see “whether it can be grounded in the original public meaning of the Takings Clause.” He repeated this request in Bridge Aina Le’A, LLC v. Hawaii Land Use Commission, but also sharply criticized the existing takings analysis developed in Penn Central Transportation Co. v. City of New York, stating: “If there is no such thing as a regulatory taking, we should say so. And if there is, we should make clear when one occurs.”

This article responds to Justice Thomas and contends that the original and current public meaning of the term “property” as used in the Takings Clause is a group of rights, the most essential being the right to possess, the right to exclude others, the right to alienate, and, most saliently, the right to beneficial use. Contrary to assertions by the Court and commentators that the Takings Clause was originally limited to direct appropriations or physical takings of property, many early 19th century cases found takings based on destruction of the right of beneficial use, cases that today we call regulatory takings. The development of takings jurisprudence leading to the 1922 decision by Justice Holmes in Pennsylvania Coal Company v. Mahon is based on protection of these rights. This Article focuses on the essential rights that define property and thereby exposes the flaw of Penn Central which bases a taking on diminution in value, rather than substantial interference with a property right. Drawing on the original public meaning and early takings jurisprudence, as well as recent precedent in Lingle v. Chevron USA and Cedar Point Nursery v. Hassid, this article proposes a takings framework based on formal or functional transfer of rights, rather than diminution in value.

Most definitely check it out.

NJ Supreme Court Grants Review: Is Forcing Hospitals To Operate At A Loss A Taking?

Here's the latest in a case we've been following. The New Jersey Supreme Court has agreed to review the Appellate Division's decision in Englewood Hospital & Medical Center v. New Jersey. 

That's the case where several hospitals challenged a New Jersey statute which requires hospitals to take all patients regardless of their ability to pay, but does not fully reimburse under Medicaid the hospitals for the costs of treating these patients even where it results in the hospitals losing money.

The Appellate Division held this was not a categorical (Cedar Point/Loretto) or an ad hoc (Penn Central) taking.

The hospitals asserted that the statute required them to suffer a physical invasion, because the statute prohibited hospitals from excluding nonpaying patients. The court rejected the argument, in what reminded us of the Yee rent control and PruneYard commercial benefit approach, where the essential reasoning is that "you let people onto your land and business, so you've waived your right to exclude." 

In contrast to the plaintiffs in Loretto and Nollan, plaintiffs here operate hospitals within the complex and highly regulated health care industry. Unlike the cable installation law in Loretto, N.J.S.A. 26:2H-18.64 does not limit the right to exclude individuals from their premises. Rather, it prohibits hospitals from turning away patients "on the basis of [their] ability to pay" without being subject to civil penalty, and further prohibits billing only those patients who qualify under charity care.

Slip op. at 19.

The court concluded that "the charity care statute's operation does not lead to physical invasion of the hospitals' property by the public because, unlike Cedar Point, the public's presence in a hospital is a natural element of its business, making it more analogous to Pruneyard." Slip op. at 20 ("Charity care restricts how hospitals use their property to provide medical services, not whether they do so. The property will be used as it was intended—to treat patients.").

The Penn Central argument fared no better. The economic impact must be viewed in the context of the hospital as a whole: the court viewed the property at issue as the operation of the entire hospital, not the right to treat each patient in a way that doesn't lose money on that patient: 

Although plaintiffs contend that charity care as a whole has a negative economic impact on their investment interests, there is no evidence that the prohibition on turning away patients because of inability to pay unreasonably impairs the value of the premises.

Slip op. at 20. Yes, the requirement to treat all patients and then provide only a limited reimbursement for those who could not pay has an adverse impact on the hospitals' "profitability," the premises could still be used as a hospital.

But, the hospitals argued, the statute forces us to operate as pretty lousy hospitals! The Appellate Division's response is faintly laughable, along the lines of "yeah, the lack of reimbursement forces hospitals to operate kinda crap hospitals, but they can still operate them as hospitals: "A takings claim cannot be sustained on the sole ground that plaintiffs fail to financially perform on par with industry-wide norms." Slip op. at 23. 

The court really torpedoed the notion that the hospitals have any expectation of operating free of onerous regulations. Ah yes, the old "heavily-regulated industry" trope:

Hospital investors in the highly regulated health care industry should expect that use of their property, in all its forms, is likely to be regulated by the state, and that such government regulation may diminish investment-backed expectations without resulting in an unconstitutional taking.

Slip op. at 24.

Not only did the court require hospital investors to understand the existing regulatory environment ... they also are charged with predicting the future: 

When a hospital seeks a license to operate in our state, it must consider the laws in effect at that time as well as those which may be adopted by our Legislature. Given plaintiffs' choice to do business here, it is reasonable that they should expect such license conditions to affect business profits. In turn, we conclude it is not reasonable for the hospitals to expect an at-cost reimbursement for the medical services the Legislature has required them to provide as a condition of doing business in our state

Slip op. at 25.

Finally, the Appellate Division made the common error when analyzing the "character of the government action" factor, concluding that "courts have repeatedly stated that the character of public health and healthcare regulations typically weighs against the conclusion that a law acts as a taking." Slip op. at 25.

We've said it before but we shall say it again, just as a reminder: the reasons the government does something is not part of the takings analysis, and has not what the "character" factor asks about. Read this article we wrote a while back for the inquiry this Penn Central factor should focus on is whether the government action looks like it is having the same effect as would a straight-up exercise of eminent domain. If it looks like the property owners is being forced to bear more than its proportionate share of a public benefit, then the "character" factor should weigh in favor of a taking.

What does the New Jersey Supreme Court's agreeing to review this case mean, prediction-wise. We're not going to venture a guess there, but it does seem like something is in the cards.

Here's the issue the court will be reviewing:

Does New Jersey’s charity care program -- which requires a hospital to provide services to all patients regardless of their ability to pay, prohibits the hospital from billing those patients, and does not provide at-cost reimbursement to the hospital -- amount to an unconstitutional taking of the hospital’s property?

More on the case here from our NJ colleague Joe Grather, who predicted, "I bet the hospitals are preparing their petition for certification to the New Jersey Supreme Court now."

Stay tuned.

Guest Post: P'Nut, The Fourth Amendment, And Property Rights

Mr. Otis would be a P'Nut fan.

Our Pacific Legal Foundation colleague and search-and-seizure expert Daniel Woislaw quickly responded to the cultural zeitgeist and looked into l'affaire P'nut le Squirrel with his keen legal eye.

That's the case in which an internet narc dropped dime on the owner of a pet squirrel, resulting in New York state game officials obtaining a warrant, searching his home, confiscating said squirrel and his little buddy Fred the Raccoon, and then through a series of unfortunate events, putting both P'Nut and Fred down. Sad!

Here's Daniel's thoughts.

+++++++++++++++++++++++++++++++++++++++++++++++

Government kills pet squirrel P'Nut in Fourth Amendment horror story

Daniel Woislaw

In a small corner of New York State, a family’s quiet, peaceful home was shattered by an unthinkable intrusion. Environmental police stormed in, seized a rescued orphan squirrel named P’Nut, took him away, and put him down. All because his owner allegedly didn’t have the right license. That’s right: In New York you need a license to shelter injured wildlife and provide them a home.  

The raid on P’Nut’s home has exposed the public to a government practice that has been festering unnoticed for too long. Increasingly, federal, state, and local authorities have been intruding on private property and employing unnecessary and exceptional force to regulate increasingly trivial aspects of Americans’ lives. 

The way government does this is straightforward. First, it makes it illegal to do something commonplace without a license—which means agents can obtain a warrant for your property over the “crime” of being unlicensed. That’s what happened in P’Nut’s case: The New York Department of Environmental Conservation raided the home on a warrant after receiving tips about “the illegal keeping of wildlife as pets.” 

But when the government does issue a license, it attaches strings. Sometimes the strings are large fees or time-consuming educational requirements, but increasingly, those strings include the power to enter homes, businesses, and other private properties at will, and without a warrant or probable cause. 

In other words, while P’Nut’s owners were raided because they didn’t have the right government license, many other Americans must tolerate home invasions because they did get the right license. Such intrusions have become all too commonplace in “the land of the free.” 

It’s not supposed to work like this. Our Constitution’s Fourth Amendment was specifically designed to prevent this kind of routine governmental overreach. At the time of the Founding, the American public knew firsthand the dangers of “general warrants”—vague permissions granted to authorities to search any home at any time. These general warrants were a major grievance leading up to the American Revolution, sparking outrage across the colonies. The concept of private property and freedom within one’s home was not just a matter of personal comfort, but a core element of the fight for independence. 

Yet consider how commonplace government intrusions are today. California, for example, requires falconers as a condition of owning their birds to agree in writing that armed conservation police can enter their homes at will. No warrant, cause, or notice is required. Refusal is a criminal offense. And if falconers simply chose not to get a license, they’d risk the same type of raid that occurred at P’Nut’s home. Thankfully, in a case brought by Pacific Legal Foundation, the falconers are fighting the requirement in court.  

In Billings, Montana, the local government did the same thing with massage therapists. Therapists who work from home and apply for a mandatory license must agree to submit to unannounced intrusions by government agents—ostensibly to make sure the therapists are not prostitutes. Continuing to practice without this license (in addition to the license, ethics, and education requirements that the state already imposes) is grounds for arrest.  

And in San Bernardino County, state environmental regulators are going door-to-door executing over-broad general warrants to look for pests. In one case, a judge signed off on a warrant covering over 500 square miles and thousands of homes so that conservation officers can snoop in people’s yards and patios looking for fruit flies. These general warrants aren’t a far cry from those that allowed British customs officials to search anywhere, anytime, in pre-Revolutionary America. In a famous legal argument then, one prominent Boston lawyer argued that general searches of this nature threaten the fundamental freedoms that make this land free. 

Even something as minor as keeping a ham radio in your bedroom can expose your home to unannounced government intrusions: To operate a ham radio, you’re required to obtain a federal license—and the licensure rules require you to allow federal inspections without a warrant.  

With Pacific Legal Foundation’s help, Americans whose constitutional rights were violated over California’s falconry regulations, Billings’ anti-massage-therapy law, and the general searches in San Bernardino are fighting back in court. 

The right to be secure in our homes, businesses, and other private properties against arbitrary and forceful intrusions by the government stretches back to the English common law maxim that “a man’s home is his castle.” For centuries, the Anglo-American legal tradition has recognized the home as a sanctuary, shielded against arbitrary government intrusion. The principle is simple but profound: A person’s home is an extension of their freedom, an intimate space where they can retreat from the eyes of the state. Allowing government agents to enter private homes at will, especially for minor or technical infractions, erodes this sacred boundary and undermines the liberty that our nation was founded to protect. 

In the face of these historical lessons, the actions of New York State’s environmental police feel like a grave regression. By using force to raid a home over a small, compassionate act—caring for a tiny, orphaned squirrel—the government has sent a chilling message about its priorities. This was not a defense of public safety but an abuse of authority, carried out under the guise of “regulation.” 

Ultimately, the raid on P’Nut’s family home is more than just an isolated case of overreach; it reflects a troubling trend. If we allow the government to use force to intrude into homes for minor violations, we risk losing one of our most fundamental freedoms—the right to privacy and security in our own homes. Americans must demand that this sacred boundary be respected.

By holding our government accountable and insisting on the original intent of the Fourth Amendment, PLF is working to protect Americans’ liberties. If you’re a victim of an unconstitutional government intrusion, PLF may be able to help.  

 

Oral Arguments In Texas Takings Case: If The Govt Limits Use For Healthsafetywelfaremorals, Is It Exempt From Takings?

Charles McFarland, arguing.

Here's the latest in a case we've been following closely (and disclosure: our firm filed an amicus brief in the Texas Supreme Court).

In The Commons of Lake Houston, Ltd. v. City of Houston, the Texas Court of Appeals held that the city could not be liable for a taking for an ordinance that limited development and use within the city's 100-and-500-year floodplains because the ordinance was a valid exercise of police power and otherwise survived the rational basis test.

As we wrote here, that seems like utter nonsense to say that a valid police power reason categorically insulates a government action from a takings challenge. After all, the entire regulatory takings doctrine is built on the notion that an otherwise-valid exercise of government power (here, the police power, delegated from the State to the city) can so impact an owner's property rights that the law will treat it as a de facto exercise of eminent domain, and require just compensation. The doctrine pretty much presumes that the governmental action is valid, and challenges to what are claimed to be invalid government actions fall under the due process label.

Our friend and colleague Charles McFarland represents the property owner. Last week, he presented oral argument at the Texas Supreme Court (watch the video here). 

Here are the Issues Presented by the property owner:

1.     The lower court erred in applying a bright-line flooding mitigation exception to the Texas Constitution’s requirement of compensation for the taking, damaging, or destruction of private property.

2.    The lower court erred in applying a bright-line “police power” exception to the Texas Constitution’s requirement of compensation for the taking, damaging, or destruction of private property.

3.    The lower court erred in failing to apply the state-law standard of the Texas Constitution’s takings clause, which allows for compensation when government action damages private property for public use.

The State of Texas does not agree with this formulation of the issues. Instead, it argues these are the issues (apparently leaving nothing, kitchen sink included, off the table):

1.    Whether Petitioner has standing to assert purported takings/damaged property claims?

2.    Alternatively, whether Petitioner’s purported takings/damaged property claims are ripe?

3.    Alternatively, whether Petitioner’s claims are redressable; therefore, whether Petitioner was improperly deprived of review under Penn Central or any other requested test?

4.    Alternatively, whether Houston is immune from Petitioner’s takings/damaged property claims because local floodplain regulations that track FEMA/NFIP requirements do not constitute a taking?

5.    Alternatively, whether Houston is immune from Petitioner’s claims because this Court’s decision in Turtle Rock and its progeny hold that the application of Houston’s floodplain regulations to Petitioner’s property, if any, is not a compensable taking?

6.    Alternatively, whether Petitioner’s new, blanket rule—that all local land-use regulations that adversely affect property automatically constitutes a taking and/or “damaged” property under article I, section 17, entitling the landowner to Penn Central or other compensation analysis—contravenes Texas law?

7.    Whether Petitioner’s “damaged” property claim is time barred?

8.    Whether Petitioner has suffered a compensable injury under Article I, Section 17’s “damaged” property provision?

Watch the oral argument recording to see how the court addresses these seemingly very divergent worldviews.

More on the case here, including all the briefing.

Stay tuned. We'll bring you the court's ruling when it is issued.

New U Chi L Rev Article (Comment): "Guns and the Right to Exclude: Saving Guns-at-Work Laws from Cedar Point's Per Se Takings Rule"

The latest issue of the University of Chicago Law Review has this student-authored piece that is worth your time reading. "Guns and the Right to Exclude: Saving Guns-at-Work Laws from Cedar Point's Per Se Takings Rule," 91 U. Chi. L. Rev. 2047 (2024). 

Here's the Abstract:

The Supreme Court’s decision in Cedar Point Nursery v. Hassid has left considerable uncertainty in the realm of takings law. In Cedar Point, the Court announced a new rule that government-authorized physical occupations of property, even temporary ones, constitute per se takings. But the Cedar Point decision left significant questions unresolved regarding the scope of its per se takings rule and its various exceptions.

To resolve these questions, this Comment looks to the example of guns-at-work laws. Enacted by about half of the states, guns-at-work laws protect the right of a business’s employees, customers, and invitees to store firearms in private vehicles, even if those private vehicles are on company property (e.g., parking lots and parking structures). In addition to having important public safety implications, guns-at-work laws serve as a fruitful example to understand takings doctrine.

Relying on this example, this Comment reaches three conclusions regarding takings doctrine and its application to guns-at-work laws. First, government-authorized physical occupations, even seemingly trivial ones, can constitute per se takings. This suggests that at least initially, guns-at-work laws constitute per se takings. Second, when applying the open-to-the-public exception, courts should look to the subsections of a business and not attempt to weigh between subsections to determine the character of the business as a whole. Consequently, courts should treat employee-only parking lots and parking lots open to the public differently for the purposes of the open-to-the-public exception: the open-to-the-public exception exempts parking lots open to the public, but not employee-only parking lots, from Cedar Point’s per se takings rule. Finally, the longstanding-restrictions-on-property-rights exception only requires a contemporary law to have a historical analogue, not an exact historical match. Thus, Founding Era militia laws are a similar historical analogue to guns-at-work laws. Consequently, guns-at-work laws are not a per se taking under Cedar Point.

We can't say we agree 100% with the piece's conclusions, but still urge you to check it out.

New Cert Petition: Does A Taking For Public Use Become A Problem If The Govt Later Abandons That Use?

Here's the latest in a case we've been following, which has now results in a cert petition from Michael Berger. This one involves some very intriguing questions about what limits the Constitution places on the government acquiring property for a public use (in this case, an "airport purpose") but then later deciding it would rather do something else with the property.

Check out the Questions Presented:

The City and County of Denver condemned 8,360 acres of land from Petitioner Monaghan Farms as part of its land acquisition for the creation of the Denver International Airport, including a large area surrounding the facility to serve as an environmental buffer and safety zone. Thirty-four years later, Denver decided to use approximately half that land (which had not been used for airport purposes) for commercial nonaeronautical developments. But the power of eminent domain may only be used to take property for public use.

The Colorado courts exacerbated the situation by assuming that conversion to private, commercial, non-aeronautical use was an “airport purpose” as a matter of law, expressly refusing to permit discovery to ascertain the truth or accuracy of that assumption, and then deciding the case as a matter of law without a trial.

Question 1: Is it an appropriate application of Kelo v. City of New London, 545 U.S. 469 (2005) to take property for public use (in the sense of actual use by the public) and then later decide to devote that property to private commercial use without reconsidering the constitutional public use requirement?

Question 2: When property has been taken by eminent domain for a specific public use (construct and operate an airport), may that property later be devoted to a wholly different, commercial, nonaeronautical development that abandons the prior public use?

Question 3: Does this Court’s recent decision in Loper Bright (2024) call for re-examining the duty of the judiciary to exercise independent judgment in deciding public use under Kelo?

Question 4: When a court decides a case based on a “legal” determination of a central “fact” while denying either discovery or trial on the merits, has it denied due process of law?

Question 5: Does it satisfy the Fifth Amendment’s requirements for exercising eminent domain (incorporated through the Fourteenth Amendment against the states) for the sovereign to seize land in fee simple absolute when (1) the condemnation petition did not explicitly seek fee simple absolute title, (2) the condemnor did not pay full fair market value for the fee simple absolute rights to the property that was taken, (3) the property was not used for its intended public purpose, and (4) the property was later devoted to private use?

Stay tuned.

Petition for a Writ of Certiorari, Monaghan Farms, Inc. v. City and County of Denver, No. __ (U.S. Oct. 31,...

Call For Papers: "Housing and Exactions: The Next Frontiers After Sheetz"

Our outfit (Pacific Legal Foundation) has put out a call for papers. on the topic of land use exactions and housing law. Honorarium included for accepted papers, and there will be a workshop to follow.

Here's the description:

This workshop seeks to build on the result of Sheetz v. County of El Dorado and chart the course of the next steps in exactions/unconstitutional-conditions law. From Nollan v. California Coastal Commission, through Dolan v. City of Tigard and Koontz v. St. John’s River Water Management District, and now including Sheetz, the Supreme Court has looked to the doctrine of exactions and unconstitutional conditions to ensure property rights are protected. In doing so, it has created a constitutional bulwark protecting the right to build housing on private property, an important stick in the property rights bundle.

The Supreme Court’s unanimous decision in Sheetz held that legislatively-imposed development-fee schedules are subject to judicial scrutiny under the doctrine of unconstitutional conditions. This ruling promises to change how local and state governments extract development impact fees from property owners in exchange for building permits; and it may very well do more. This is where you come in.

We seek papers that address the questions arising from the Sheetz ruling. We welcome proposals that look at this issue from legal, economic, political, historical, and related angles, including empirical and nonempirical approaches.

Some possible topics:

• Must a permit condition imposed by a legislative body on a category of properties be tailored with the same degree of specificity as a permit condition that targets a particular single development to be constitutional?
• An article exploring the Sheetz concurrences by Justices Neil Gorsuch and Brett Kavanaugh offering different arguments about the need for legislative exactions to be tailored.
• Beyond the analysis of Koontz, is there a basis in constitutional text, history, and/or case law for holding stand-alone impact fees (as opposed to in-lieu fees) subject to the doctrine of unconstitutional conditions?
• How does the requirement that the government “make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development” work when evaluating a generally imposed legislative exaction?
• What does “essential nexus” require to be constitutional?
• Are there economic models that prove or disprove the claim that inclusionary zoning meets the nexus requirement of the Nollan-Dolan-Koontz-Sheetz exactions test?
• Does inclusionary zoning create meaningful workforce and affordable housing?
• Alternatively, does inclusionary zoning have a negative impact on the production of affordable housing? Empirical studies of communities with inclusionary zoning policies in place could yield meaningful information if studied.
• Do all inclusionary-zoning schemes rely upon Kelo v. City of New London, and if they do, then would the right inclusionary-zoning challenge have the promise of overturning Kelo?
• How have states limited local government’s ability to legislatively impose fees on developers, and is there empirical evidence of more and cheaper housing in the states with those limits?
• True or false: The weaker the nexus, the more difficult it will (or should) be for the government to establish proportionality.
• How do impact fees affect housing supply and affordability? What is the tradeoff between property taxes and fees?
• How can YIMBYs incorporate the Sheetz decision into their work and build from it to successfully encourage communities to build more housing?
• Besides inclusionary-zoning fees, are there other government-imposed fees on builders and developers that may violate the nexus prong of the Nollan-Dolan-Koontz-Sheetz test? What are they and why is there a lack of nexus between the fee and the demand?

Fertile grounds for exploration.

Details here, including deadlines. Check it out, and then submit a proposal.

Nevada: Private-to-Private Takings By Privately-Owned Utilities Are OK, Even Though State Constitution Prohibits "transfer ... from one private party to another"

Those of you who are students of eminent domain and the public use requirement know that in Berman v. Parker, 348 U.S. 26 (1954), the Court (in)famously held, "when the legislature has spoken, the public interest has been declared in terms well nigh conclusive."

Not only was the Court in Berman signalling that it was washing its hands of the Public Use Clause, but that case also -- less overtly -- revealed a shift from examining the use the property was to be put, to the purpose for which the property was being acquired, or as the above quote highlights, where a taking furthers the public interest. (A shift that, if you missed it, the Court confirmed in Midkiff where it held the eminent domain and police powers are "coterminous," and both are reviewed under the deferential rational basis standard.)

If that wasn't clear enough, the majority in Kelo hammered the point home, expressly equating New London's use of eminent domain to take property, with zoning used to regulate property's uses in Euclid:

Those who govern the City were not confronted with the need to remove blight in the Fort Trumbull area, but their determination that the area was sufficiently distressed to justify a program of economic rejuvenation is entitled to our deference. The City has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community, including—but by no means limited to—new jobs and increased tax revenue. As with other exercises in urban planning and development,¹² the City is endeavoring to coordinate a variety of commercial, residential, and recreational uses of land, with the hope that they will form a whole greater than the sum of its parts. To effectuate this plan, the City has invoked a state statute that specifically authorizes the use of eminent domain to promote economic development. Given the comprehensive character of the plan, the thorough deliberation that preceded its adoption, and the limited scope of our review, it is appropriate for us, as it was in Berman, to resolve the challenges of the individual owners, not on a piecemeal basis, but rather in light of the entire plan. Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement of the Fifth Amendment.

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

12. Cf. Village of Euclid v. Ambler Realty Co., 272 U. S. 365 (1926).

But not only was Berman a shift from use to purpose, but also, as a consequence, shifted the time frame and actions scrutinized under the Public Use Clause. As John Ross put it in "The Despotic Power" episode of Bound by Oath:

In the past, the test concerned how the property was put to use after if was taken. But now [after Berman] courts began to hold that a taking itself could be a public use. Meaning, that the clearing of a slum itself was the public use, and, if property was put to private use afterwards, that didn’t matter. According to Wendell Pritchett, a law professor at the University of Pennsylvania, this shift was a dramatic expansion of the power of eminent domain.

With that in mind, take a look at the Nevada Supreme Court's recent decision in Mass Land Acquisition, LLC v. First Judicial District, No. 2024-85983 (Oct. 17, 2024), where it held that the Nevada Constitution's provision barring takings where the property is transferred to another private owner only prohibits takings where the government transfers property it has taken to a private owner, and doesn't prohibit a private delegee of the eminent domain power from taking it for itself.

First, the backstory. In the wake of Kelo, the people of Nevada comprehensively amended their state constitution to reform eminent domain practice. These reforms included such things as requiring disclosure of appraisals, eliminating future dedications from being considered as offsetting just compensation, inclusion of costs as part of compensation, and requiring a jury to resolve public use disputes. The first part of these constitutional amendments defined "public use" -

Public use shall not include the direct or indirect transfer of any interest in property taken in an eminent domain proceeding from one private party to another. In all eminent domain actions, the government shall have the burden to prove public use. 

Nev. Const. art. 1, § 22(1).

Mass Land objected under this provision to the taking of an easement for a natural gas pipeline by Sierra Pacific Power, a private entity which has been delegated the power of eminent domain and operates as a public utility. Sierra Pacific sought immediate occupancy (quick take). After the trial court rejected Mass Land's objection that this isn't a public use under the constitutional definition, Mass Land asked the Nevada Supreme Court for a writ of mandamus or prohibition.

It argued that the taking of its property so that it ended up being owned by Sierra Pacific fell within the constitutional prohibition noted above: Mass Land's private private property was transferred by eminent domain "to another" private party, Sierra Pacific. Owned by A, then transferred to B by eminent domain. Game, set, match .... right?

The Nevada Supreme Court didn't see it quite as simply. It denied the writs, concluding that the Nevada Constitution only prohibits the use of eminent domain when a government condemnor takes property from A by eminent domain, and then subsequently transfers it to B, a different private owner. The "transfer" referred to isn't the transfer of ownership of the property by eminent domain, but rather the post-taking transfer of the condemned property to a private third party.

It doesn't matter that the situation here fits within the literal language of the constitution, because section 1 "prohibits taking private property for purposes of transferring the property to another private party for their use, protecting Nevadans from takings like the one that occurred in Kelo."

This section does not prohibit a regulated public utility that 'has the power of eminent domain," from taking property for a natural gas pipeline, a statutorily recognized public use.

Slip op. at 3-4 (citations omitted).

Did you catch the assumption the court made? The same as the U.S. Supreme Court made in Berman. There, as here, the court viewed the public use requirement not by asking who owned it before and who owned it afterwards and whether that transfer was accomplished by eminent domain. Rather, the court assumed the public use inquiry is one of motive and purpose, and if those are indeed public then it really doesn't matter what the ultimate use is, or even who ends up owning the property as a result of the taking -- even where the state's organic law plainly appears to prohibit it. This assumption allowed the court to validate this taking, yet it would be required to invalidate a taking where an actual government took Mass Land's property and then transferred it to Sierra Power. Same, but different.

Also, the court reaches another conclusion that isn't necessarily compelled by the text of the constitution. It held that section 1 only prohibits the condemnor from taking property and then transferring it to a third party; the provision does not prevent the condemnor from taking and then keeping it. The court focused on the term "transfer," and concluded that this language is "clear on its face," and means taking then transferring to another, and not simply transferring by eminent domain the ownership of property from its former owner to the condemnor:

Article 1, section 22(1)'s private-party transfer prohibition does not prohibit a private party to whom the power of eminent domain has been delegated from taking private property for public use. The use of the pasttense word "taken" in the same sentence as "transfer" contemplates that the exclusion refers to property that has already been taken through eminent domain and that is then subsequently transferred, directly or indirectly, to a private party. Although NV Energy's taking an easement across Mass Land's property results in the conveyance of a property interest from one private party (Mass Land) to another (NV Energy), the private-transfer exclusion is not triggered because the exclusion only applies to transfers that occur after the property has been taken by eminent domain. The exclusion in article 1, section 22(1) would be implicated if NV Energy took the property, then transferred it to another private party for their private use.2 But here, no subsequent transfer to a private party followed the taking, and NV Energy took the property for a natural gas pipeline, a statutorily recognized public use.

Slip op. at 11.

According to the court, reading the constitution any other way would torpedo the legislature's ability to delegate the power of eminent domain to private parties, and would thereby render another constitutional amendment adopted at the same time -- which defined "the government" as including private entities delegated eminent domain power -- superfluous.

We're not completely in agreement with this rationale, because the ratifiers could have been making a distinction between takings by government in which it keeps the property, and takings by a private "investor-owned" entity in which it keeps the property, intending only to nix the latter. After all, it it shouldn't be hard to see that that the bad thing that section 1 could be aimed at it the ultimate ownership, and not the mechanics of the transfer. But the court viewed the amendment solely as a reaction to Kelo, which the court saw as enraging the public only because New London took Kelo's property "for purposes of transferring it to a private developer as part of an economic redevelopment plan." Slip op. at 13-14. That may have been a part of it, but wasn't a large part of the public reaction to Kelo a rejection of the idea that Ms. Kelo's and her neighbors' properties were going to be owned by another private owner?

And even if mechanics and process is the focus, a self-dealing A-to-B transfer by eminent domain by a private actor seems at least as bad -- and likely worse -- than the government-as-middleman procedure endorsed by Kelo and Berman, and now this decision. Justice Stevens' Kelo majority and its reliance on Euclid leans heavily on procedure as the proxy for public purpose and intent. If the system seems to be functioning, then courts won't ask questions. But there's no indication in the Mass Land opinion about what procedures, if any, were present here that mirror the "carefully formulated" plan that "benefits the community" as in Kelo.

Perhaps the oddest analytical approach the Nevada court undertakes here is on page 13, where it concludes that because the delegation statute was adopted before the constitutional amendment, the statute must be protected. We thought it was the other way around.

We suppose we understand the impulses motivating the court here. Accepting the property owner's arguments would require a change in the way that eminent domain is implemented by private delegees of the power. And that could result in a lot of hassle for the way that things have always been done, and make it harder when private entities take and then keep the private property of another. 

But maybe that was the point of the constitutional change?

Mass Land Acquisition, LLC v. First Judicial District, No. 2024-85693 (Nev. Oct. 17, 2024)

New Article (Comment): "Vacancy Taxes: A Possible Taking?" (U. Chi. L. Rev.)

A new student-authored journal article worth reading, Christine Dong, "Vacancy Taxes: A Possible Taking?," 91 U. Chi. L. Rev. 1725 (2024).

Here's the Abstract:

Vacancy taxes are an increasingly popular solution to the paradoxical problem of high housing demand coupled with high vacancy. Cities across the country facing housing shortages have either implemented or are considering adopting vacancy taxes to encourage property owners to rent or sell their property. Soon after San Francisco adopted a vacancy tax with one of the broadest definitions of vacancy, property owners lobbed a constitutional challenge under the Takings Clause, taking advantage of a moment of doctrinal instability.

This Comment seeks to make sense of how this and similar potential challenges would fare, given an expanding, property-protective takings doctrine, but a high constitutional tolerance for taxes. Using the San Francisco vacancy tax as a concrete example, this Comment evaluates possible arguments that the tax effects a regulatory or physical taking. It contends that even this stringent vacancy tax would not be a taking under either framework, and highlights elements of a different vacancy tax or regulation that may tip the scales of this analysis. It explores original understandings of land use (and nonuse) regulations to argue that fines levied on the nonproductive use of property are a background principle of property law that generally precludes the conclusion that vacancy taxes are takings.

Download the pdf here.

Worth your time to check out.

Last Night, I Shook Hands With Mr. Jefferson's Ghost

Like most "paranormal caught on camera" shots,
this one is grainy. But you can just make Mr. Jefferson out.

Colonial Williamsburg is adjacent to the William & Mary Law School, so from time-to-time, we'll take a walk over just to soak up the atmosphere. The vibe picks up in the autumn season, when the leaves are turning and there's a slight chill in the air. We try to time these visits for the evenings, because the atmo is particularly intense. 

And so it was yesterday afternoon and into the evening, as we were walking about CW that we happened to run into Thomas Jefferson, Esq., an up-and-coming Williamsburg lawyer, who was kind enough to spend a bit of time chatting. At the end of an educational and enjoyable conversation, we shook hands and went about our business.

A paranormal encounter with the spirit of Mr. Jefferson, author of the Declaration of Independence and the Virginia Statute of Religious Freedom? Had your blogger perhaps indulged in too much at the nearby meadery? Who ya gonna call, Ghostbusters? 

No, not quite. But very close. We know we used a clickbaity title to get you to read this post, but we're not being entirely accurate. We did not actually meet up with the otherworldly essence of Thomas J, or the ghost of lawyers past. 

But we came about as near as you can without actually holding a seance.

Every year, the W&M Legal History Society asks the fellow who portrays Mr. Jefferson at CW to speak to law students and lawprofs, and offer his thoughts about the legal profession, the study of law, his practice, and his life.

Not only does he do so with admirable candor (and even at times humor), he has always been willing  to respond to some very difficult questions about his life, his philosophy and politics ... and his personal conduct.

TJeff recounted studying law at William and Mary in
the building behind him, now the Governor's Palace.

The Society was kind enough to allow me to join them again, and we gathered at the home of Jefferson's mentor-in-law, George Wythe. After some questions and answers there, we walked a short distance to what is now known as the Governor's Palace in the heart of CW, but back in Jefferson's day was the building in which he studied law under Mr. Wythe's tutelage.

He discussed what he considers it his crowning achievement (our words, not his; he tends to avoid "crown" puns) -- the the Declaration of Independence, the Lockean theories behind it.

Locke wrote about life, liberty, and property, so why did Mr. Jefferson replace that last part with "the pursuit of Happiness?" What were you thinking? Using pursuit of happiness, he explained, was his way of suggesting that the purpose of government isn't limited to securing the right to property, but to something larger. Of course, acquiring and possessing property is a large part of happiness, but isn't all of it. It ties back to the notion that all men are created equal, he noted, because it includes people without property.

Jefferson also spoke about other issues, such as republicanism vs democracy, public virtue, the study of law, and even about his favorite violin piece. 

Mr. Jefferson remembering final exams
at William & Mary Law School. That darn curve!

To his credit, he was candid about his own faults and responded frankly to some pointed inquires from the law students. He acknowledged that he was hardly perfect, or even good. But he did point out that he was considered a class traitor at the time by his Virginia and southern peers for even suggesting that slavery should be abolished (as proposed by his draft Virginia Constitution, authored at the same time as the Declaration but never adopted), and for including a section in the draft Declaration (also stricken from the final version) pointing the finger at His Britannic Majesty for saddling the colonies with with what he described as a "cruel war against human nature itself," that violated the "most sacred rights of life & liberty in the persons of a distant people who never offended."

Pointing out as well a case from his Williamsburg law practice ("which I argued over in that building" he noted, pointing to the actual courthouse in which the Virginia General Court, the highest court in the Colony sat), Howell v. Netherland (1770).

There, Jefferson argued for more freedom not less, in case involving the legal indentured servitude of the grandchild of a mixed-race couple. He pointed out that his mentor Wythe represented the master (small town barrister practice often means you take the case as it comes, with your friends taking the other party), and that Jefferson lost the case.

All of the above, Jefferson suggested, should count for something when history judges me. We shall see, Sir.

Note: the fellow portraying Jefferson is outstanding, and looks and acts and speaks in a manner of what we imagine Jefferson to have been like, right down to acknowledging that he was not a great orator and expressed himself better in writing.

He never once broke character, and played his part so well that at times we had to remind ourselves that he is portraying Thomas Jefferson, and was not the actual Thomas Jefferson standing before us. It is funny how your mind can break down reality, sometimes. I guess this is why we enjoy plays and movies. After the students departed, I shook his hand to thank him for devoting his time to educating William and Mary law students that laws are made my decidedly imperfect people trying to create a "more perfect" union. 

So yeah, maybe I kind of did shake hands with Mr. Jefferson last night.

 

By The Thinnest Of Margins, SCOTUS Declines Public Use Pretext "Spite Taking" Case

So close: if just one more Justice had agreed, the U.S. Supreme Court would have taken up a public use case we've been following, Brinkmann v. Town of Southhold. After all, this one had a lot of the usual markers: a divided court below, an allegation of a lower court split, beaucoup amicus support, and a long-festering issue that has remained open for almost 20 years.

But alas, in this Order, the Court denied the cert petition. Perhaps not surprising given the small number of cases the Supreme Court takes up these days (those of us who have been around for a while remember the days when the Court's docket was up to 140 argued cases each Term). But nonetheless a disappointment.

One hint for future similar cases: three Justices (Thomas, Gorsuch, and Kavanaugh) "would grant the petition." We wonder why one more Justice among at least three potential candidates (CJ Roberts, Alito, or Barrett) didn't add the fourth vote to grant. Lawprof Ilya Somin shares his insight in "Supreme Court Refuses to Hear 'Passive Park' Public Use Property Rights Case," where he writes:

I would very much like the Supreme Court to take another public use case, and overrule Kelo and Berman, or at least cut back on those badly flawed precedents. But, for reasons noted in my earlier post, I think this case would have been a bad vehicle for reviewing these issues[.]

The situation here is what we call a "spite taking" (where the apparent purpose of the taking is not so much to promote a public use or benefit, but to stop a property owner from making some publicly disfavored use of his or her land). Are these okay under the Public Use requirement because -- as the Second Circuit panel majority held -- that it is just fine to do good things for bad reasons, and who cares about motivation as long as the stated use is public and not a pretext to a private benefit. Or does it offend the Public Use Clause -- as other courts have held -- to say you're taking it for some public use, when your real motivation is something else (even if not a private benefit)?

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

One argument is that the government should not be able to use the "despotic power" in such a fashion -- that it should be outright prohibited, or at least subject to more than rational basis review due to the potential for abuse. Countering that is the argument that all exercises of eminent domain are the government telling a property owner that it is forcibly acquiring property because the current use is disfavored: you want to use your property for a house, but the public thinks it should be a post office or fire station. Then there's also the distinction the Second Circuit made that pretext should be reserved for those situations where the stated public use is a pretext to a private use or benefit, and not, as here, another public use.

Unfortunately, we're not going to get any answers on these questions just yet.

So close, yet so far. Stay tuned.

 

Nobel Economics Prize To Research Confirming The Importance Of The Rule Of Law And Property Rights

This out of Sweden: the Royal Swedish Academy of Science has announced that it will be awarding the 2024 Nobel Prize in Economics to three U.S. econ professors whose research demonstrates that the rule of law and property rights foster an environment where democracy and prosperity flourish:

The laureates have shown that one explanation for differences in countries’ prosperity is the societal institutions that were introduced during colonisation. Inclusive institutions were often introduced in countries that were poor when they were colonised, over time resulting in a generally prosperous population. This is an important reason for why former colonies that were once rich are now poor, and vice versa.

Some countries become trapped in a situation with extractive institutions and low economic growth. The introduction of inclusive institutions would create long-term benefits for everyone, but extractive institutions provide short-term gains for the people in power. As long as the political system guarantees they will remain in control, no one will trust their promises of future economic reforms. According to the laureates, this is why no improvement occurs.

More here, in a press release from the Massachusetts Institute of Technology where two of the professors teach:

Overall, the scholars have found, inclusive governments experience the greatest growth in the long run. By contrast, countries with extractive governments either fail to generate broad-based growth or see their growth wither away after short bursts of economic expansion.

More specifically, because economic growth depends heavily on widespread technological innovation, such advances are only sustained when and where countries promote an array of individual rights, including property rights, giving more people the incentive to invent things. Elites may resist innovation, change, and growth to hold on to power, but without the rule of law and a stable set of rights, innovation and growth stall.

“Both political and economic inclusion matter, and they are synergistic,” Acemoglu said during the MIT press conference.

The scholarship of Acemoglu, Johnson, and Robinson has often been historically grounded, using the varying introduction of inclusive institutions, including the rule of law and property rights, to analyze their effects on growth.

Glad to see these principles being recognized (with 11 million kronor, even!).

Apparently, The "Final Frontier" Isn't Space, But The California Coastal Zone

Following up on our recent post about the California Coastal Commission denying permission for Space-X to increase the number of annual launches from Vandenberg, comes this, the other shoe.

The Commission has now been sued, with Space-X alleging that the Commission denied permission due to CEO Elon Musk's political leanings and his public statements.

“I really appreciate the work of the Space Force,” said Commission Chair Caryl Hart. “But here we’re dealing with a company, the head of which has aggressively injected himself into the presidential race and he’s managed a company in a way that was just described by Commissioner Newsom that I find to be very disturbing.”

Here's the complaint, filed in the U.S. District Court (Central District of California). 

Was the Commission's denial a product of concern for "wildlife like threatened snowy plovers," or the Commission members' dislike of Musk?

Stay tuned. The Coastal Commission isn't all that used to pushback to it exercising monarchical-level dominion over the California coastal zone except in rare circumstances. But this appears to the the first time that the Commission has done wrong to the world's richest man, who, unlike your average coastal property owner has the resources and the will to fight back. 

This is going to be fun.

Complaint for Declaratory and Injunctive Relief, Space Exploration Tech. Corp. v. Cal. Coastal Comm'n, No....

New Cert Petition: Eviction Moratorium Transferred Possession Easement To Nonpaying Tenants

Here's the latest in a case we've been following, which asks whether a local ordinance which allowed non-paying tenants to remain in the lessor's property is a physical taking, or merely the regulation of the lessor/lessee relationship under the Yee theory, which posits that once an owner voluntarily rents property to a tenant, the government then allowing that tenant to remain rent free isn't facilitating an unauthorized physical occupation, but rather is merely a regulation of the existing lessor/lessee relationship. In short, you let 'em in property owner, so suck it up.

The property owner has now filed this cert petition challenging that rationale.

As we've noted previously, some courts' reliance on Yee in this and similar situations is a misreading of that decision. Besides that, these courts essentially upend the longstanding common law of property governing the owner/tenant relationship, and the contractual nature of that relationship whereby the owner mostly surrenders the right to exclude to a tenant, but only on certain conditions usually related to time (the term of the tenancy), and the tenant paying rent. Contrary to these courts' rationale, the voluntary nature of this relationship is a two-way street. If these conditions, voluntarily agreed to by the tenant, are violated, the tenant's right to exclude ends and the lessor's reverter kicks in. Eviction moratoria and rent control regulations that permit tenants to remain despite violation of these contractual provisions upend the common law.

Here's the Question Presented:

In March 2020, the City of Los Angeles adopted one of the most onerous eviction moratoria in the country, stripping property owners like Petitioners of their right to exclude nonpaying tenants. The City pressed private property into public service, foisting the cost of its coronavirus response onto housing providers to avoid expensive and less expedient—but constitutional—means to help those in need. In doing so, the City in effect imposed and transferred to defaulting tenants an exclusive easement in the private property of others without paying for it. By August 2021, when Petitioners sued the City seeking just compensation for that physical taking, back rents owed by their unremovable tenants had ballooned to over $20 million. The moratorium concluded in 2024.

Relying on a mobile home rent control case from this Court, Yee v. City of Escondido, the Ninth Circuit affirmed dismissal of Petitioners’ complaint because they “voluntarily opened” their properties to tenants in the first instance and thus could never state a physical takings claim against the City’s law, drastic as it was. The Federal and Eighth Circuits disagree. In Darby Development Co. v. United States and Heights Apartments, LLC v. Walz, both courts held Yee inapposite and validated identical claims because moratoria like the City’s deprive owners of the right to exclude akin to Cedar Point Nursery v. Hassid.

The question presented is:

Whether an eviction moratorium depriving property owners of the fundamental right to exclude nonpaying tenants effects a physical taking.

This is a festering issue in the lower courts, as the petition points out.

Stay tuned.

Petition for a Writ of Certiorari, GHP Management Corp. v. City of Los Angeles, No. 24-___ (U.S. Oct. 16,...

You Thought We Were Joking When We Said The California Coastal Commission Would Never Allow Starfleet Headquarters To Be Built

The California Coastal Commission has now reached the parody stage.

In the "Star Trek" TV shows and movies, Starfleet Headquarters is depicted as being across the Golden Gate from San Francisco, in the Marin Headlands. It's a longstanding joke among those who know about the regulatory overreach of the California Coastal Commission that -- ha, ha -- Trek really is science fiction because the Commission would never allow a development like this in the coastal zone (especially in Marin County). Even in the 23d century. And even for an enterprise as noble as the exploration of space.

Now life is imitating humor: as the Los Angeles Times reports in "California officials reject more SpaceX rocket launches, with some citing Musk’s X posts." We know that Space X isn't quite Starfleet, but it is getting pretty close (and this is reality, not some fanciful TV show).

Yet the Coastal Commission is up to its usual shenanigans. As the LA Times notes:

SpaceX’s plans to launch more rockets from the California coast were rejected by a state commission this week, with some officials citing Elon Musk’s political posts on X and raising concerns about the billionaire’s labor record at his companies.

The plan to increase the number of rocket blasts into space up to 50 a year was rejected by the California Coastal Commission on Thursday despite assurances from Space Force and Air Force officials that they would increase efforts to monitor the effects that rocket launches have on nearby wildlife.

The military also vowed to mitigate the reach of sonic booms that often span across 100 miles of coastline, an issue that has caused controversy.

Members of the California Coastal Commission commended Space Force and Air Force representatives for reaching an agreement, but some cited their concerns about Musk, the owner of SpaceX, before rejecting the plan.

Among the issues raised were Musk’s decision to insert himself in the presidential race, his spreading of conspiracy theories, the labor record of his companies and derogatory comments he has made about the transgender community.

“We’re dealing with a company, the head of which has aggressively injected himself into the presidential race,” commission Chair Caryl Hart said.

You may ask yourself "why are Coastal Commissioners voting no based on their 'concerns' about things like elections, conspiracies, and the CEO's comments?" Indeed. That shouldn't play any part in a process that is supposed to be about use, development, and protection of coastal resources while also considering property rights (all things the California Coastal Act charges the Commission with).

But that's the state of play at what may be the nation's most out-of-control, unsupervised, unaccountable, autocratic, government-within-the-government, agency-on-steroids. It says something that several Commissioners felt it was just fine to publicly announce their "concerns" about these things. We suppose that decades of courts letting the Commission get away with things that would make your toes curl has taught them that there's likely to be little blowback or consequences for the denial and their public statements. 

Mr. Musk has said he will sue, and we'll see if that develops. In the meantime, there may be some (non-humorous) reckoning on the horizon: as we reported here, the California Supreme Court has agreed to take up a case (one of ours) which could curb the Commission's unprecedented regulatory overreach. This case highlights how and why the Commission has been one of the largest impediments to the construction of housing in California.

So stay tuned. Our colleague Jeremy Talcott (who chairs our Coastal Initiative) will be arguing the case. We'll report updates as they occur. Or follow along on your own on the court's docket.

So what do you think -- Starfleet may blast the Klingons, but could it overcome the California Coastal Commission? 

Imagining The Future Of Regulatory Takings: "Making Property Rights Cool Again"

Lawprof Ilya Somin (GMU Law), Mercatus Center's Charles Gardner,
and lawyer Emily Cruikshank Bayonne (Tubman Realty, LLC)
speaking on "How Policy Changes Can Address Incursions on
Property Rights Where Courts Have Failed to do So."
Jim Burling (PLF) moderating.

Recently, we attended a wonderful symposium co-sponsored by George Mason Law School's Journal of Law, Economics & Policy (congratulations to the student editors who ran the show that day), and our outfit Pacific Legal Foundation. Of course, with the subject being "Imagining the Future of Regulatory Takings," how could we resist attending?

If you missed it, it was not recorded unfortunately. But stay tuned for the full published symposium issue which shall include all of the articles and other pieces the speakers presented that day.

PLF's Ethan Blevins kicked off the day by
urging the speakers and the audience to
"make property rights cool again."

Brian Hodges (PLF) and Amy Boulris (Gunster)
on land use conditions, exactions, and unconstitutional conditions.

Circuit Judge (ret.) (and California Supreme Court Justice),
Hon. Janice Rogers Brown presented the keynote address
and responded to participants' questions.

Lawprof Donald Kochan (GMU), Lawprof Adam MacLeod (St. Mary's),
and Sam Spiegelman (Citizen Action Def. Fund)
started the day off with "Fixing the Text -
How We Can Better Approach Regulatory Takings."
Moderator: Judge Andrew Brasher (CA11).

The day's final program was "Takings on the Ground - Applying the
Takings Tests in Challenging Scenarios" with
lawyer William Shadbolt (Washington Bus. Properties Ass'n),
Lawprof Eric Claeys (GMU), and Michael Berger (Manatt) (aka Big Brother).
Moderator: Judge Ryan Holte (Court of Federal Claims).

Hawaii Dirt Lawyers: Don't Miss "Property Rights & Regulatory Takings" CLE At The HSBA Convention (In-Person & Webcast)

Hawaii lawyers (and those barred in the 808), take note: On October 21, 2024, the Hawaii State Bar Association will hold its annual Convention, and as always there's a full lineup of CLE programs so you can meet your MCLE requirements.

Thanks to the Real Property & Financial Services Section, there's a significant dirt law component. First, there's "Property Rights and Regulatory Takings" the program on which we are presenting along with Dwight Merriam and lawprof Shelley Saxer. Here's the official description:

This course will provide a survey of property rights and regulatory takings with an emphasis on recent decisions from the United States Supreme Court. Panelists include distinguished faculty and practitioners that will address impact fees, development rights, taking claims, rent controls, and other current issues.

Following us will be a program on "Land Use Conditions" with Cal Chipchase, Brad Saito, and a lawyer from the State of Hawaii Attorney General's office:

This course will provide a survey of the regulatory systems that govern land use in the State of Hawaii. Panelists will discuss regulatory frameworks at the state and city level together with recent legal developments from the Hawaii Supreme Court

You can attend in-person or remotely. This page has the registration information as well as more details and bios of the speakers.

As Jack Lord used to say: "Be here, Aloha."