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CA6: "The distric court's ripeness determination, in turn, was plainly mistaken"

Before you get too excited by the U.S. Court of Appeals for the Sixth Circuit's opinion in Catholic Healthcare Int'l, Inc. v. Genoa Twp., No. 22-2139 (Sep. 11, 2023), a spoiler up front: this may be a good ripeness decision, but this isn't a takings case.

But you takings mavens may still want to take a quick look over the opinion for how the court deals with a ripeness argument in a case where the plaintiffs assert the Township violated their rights by denying (twice) its requests for a land use special permit.

The story is about a walking path created by Catholic Healthcare that contains fourteen "Stations of the Cross" "depicting the "story of Christ's last day." Slip op. at 1. The Township insisted that Catholic Healthcare obtain a special use permit, because the Township believed that the trail use is the equivalent of a church.

So Catholic Healthcare sought a special use permit, and twice the Township said no. The Township required removal of the trail. Catholic Health sued, asserting RLUIPA and constitutional claims, and sought a preliminary injunction allowing it to restore the trail. The district court dismissed, concluding among other things, that the RLUIPA claim was not ripe.

The Sixth Circuit rejected that conclusion. Relying on Pakdel, the court concluded that the Township had adopted a "definitive position" on how its land use regulations apply to the plaintiffs' uses and land:

The district court’s ripeness determination, in turn, was plainly mistaken. A claim is unripe when “it rests upon contingent future events that may not occur as anticipated or indeed may not occur at all.” Texas v. United States, 523 U.S. 296, 300 (1998). In land-use cases, the necessary event is simply that the government has adopted a “definitive position” as to “how the regulations at issue apply to the particular land in question.” Pakdel v. City & County of San Fran., 141 S. Ct. 2226, 2230 (2021) (cleaned up). That has manifestly happened here: the Township has uniformly insisted that the plaintiffs obtain a special land-use permit for their religious displays; the Township Board has twice refused to grant them one, even when presented with an application limited almost entirely to those displays; and the Zoning Board of Appeals denied relief. Moreover, those events have “inflicted an actual, concrete injury” on plaintiffs, id., because the Township has actually forced them to remove the religious displays from their property.

Slip op. at 7. The district court held the claim was not ripe because in addition to receiving two permit application denials from the Township, Catholic Health had not also complied with the Township's administrative processes.

The court noted that "[t]he district court's mistake was to conflate ripeness (sometimes called 'finality' in this context) and exhaustion" when the district court held that the Township had not taken a final position until Catholic Healthcare had gone past the permit denial(s) and chased further administrative procedures. Slip op. at 8.

The Sixth Circuit held that one "no" is enough, and you don't really need a truly final decision (in other words, a decision that comes at the end of an administrative review process), but a court only need understand that the government is "committed to a position." Id. (quoting Pakdel, 141 S. Ct. at 2230). That this position might change later is of no consequence.

The opinion also made note of a good point - the ripeness requirement in these kind of cases (also takings cases) is there not to run the property owner through a maze of hurdles, but to ensure that the injury to the plaintiff is concrete enough. As the court held, "this case comes to us after Genoa Township has taken a definitive position, again and again, to the plaintiffs' concrete injury. Their claim is ripe." Slip op. at 8.

We think there are two good lessons to take from this one:

1. A reminder that ripeness does not require exhaustion. This isn't so much the "final decision" rule, but the "definitive position" rule. The Court meant what it said in Pakdel when it cautioned that the ripeness requirement is "relatively modest," and does not require exhaustion and crossing off all alternatives to get to a government's "yes." All it requires is a single "no."

2. The ripeness requirement is there so that courts can have confidence that the plaintiff has really been injured, which itself is a relatively modest requirement.

We suggest keeping those two things in mind in your next ripeness argument.

Catholic Healthcare, Int'l, Inc. v. Genoa Twp., No. 22-2139 (6th Cir. Sep. 11, 2023)

Just Published - IRWA's "Summary of Major Eminent Domain Cases & Legislation: Jan 1, 2023 - June 30, 2023"

Thanks to our co-authors for the latest issue of this recurring update.

The International Right of Way Association's Real Estate Law Committee produces twice-a-year reports "which contain summaries of eminent domain decisions and legislation within the United States." (This is the "international" right of way association, so that last qualifier is important.)

And what is really nice is that they make the report available.

The laboring oars on this are really Brad Kuhn and Jullian Friess Leivas (both from the Nossaman firm), but they were kind enough to include us. Brad and Jillian wrote up more at the California Eminent Domain Report:

We recently had the pleasure of collaborating with Robert Thomas and Ajay Gajaria once again for the International Right of Way Association’s (IRWA) biannual report covering numerous eminent domain cases at local, state and federal levels from January through the end of June 2023. This report is an important resource and reference point for professionals in the right-of-way industry.

In the report, we also take a brief look at pending, adopted and failed legislation across the U.S., while also providing updates on federal funding and projects associated with the recent Infrastructure Bill. The report also includes summaries of a few notable cases in Canada.

The report is short, and doesn't have a lot of fluff. Just what you wanted.

Check it out.

Green Backs And Land: Dr. Seuss (Thor Hearne) Explains Trails Act Takings

with apologies to Green Eggs and Ham

Our friend and colleague Thor Hearne (True North Law/Federal Takings blog) sent us this and when we asked, kindly consented to us sharing it with you.

Thor writes: "I was trying to explain to my granddaughters, ages six, three and four months what I do and the Trails Act cases where I represent property owners.  So, I wrote a Dr. Seuss summary of the Fifth Amendment and Trails Act takings."

Check this out:

Dr. Seuss Explains Trail Act Takings

In the land where you and I reside,
Private property's our joy and pride.
Everyone has a piece, maybe big, maybe small,
A place to hang your hat, a spot for a ball.

When government says, "Hey, we need your space!"
They must pay you, put a smile on your face.
Whether it's a farm, or a tree, or a pond,
They give you the dollars, of which you are fond.

But wait, what's this? A train's coming through!
An easement they need, to pass and to woo.
It's not quite your land, but not quite their place,
It's shared in a way, yet you both have a case.

When trains cease to chug, and the tracks fade away,
The owner says, "Yay! My land's back today!"
But if Uncle Sam says, "No, here we shall stand,"
He must open his purse, pay you for your land.

So, remember these words, in freedom we trust,
Private property's good; to respect it's a must.
Whether a home, or a field, or a bright yellow flower,
We each have our space, and in that lies our power.

CA8: 11th Amendment Trumps The Fifth Amendment - Just Because Just Compensation Is A "Self-Executing" Federal Remedy Doesn't Mean You Get To Come To *Federal* Court

Remember after Knick when we predicted that the Supreme Court's opening back up the federal courthouse doors wasn't the end of the procedural gamesmanship, but merely the opening of a new chapter? That it was time to dust off your old Federal Courts hornbook, because things like the Eleventh Amendment, Rooker/Feldman, abstention, and similar, were going to spring up as the way to avoid the merits of takings claims? That's we're going to be experiencing Williamson County, Phase 2?

Here's more proof (as if you needed it).

In EEE Minerals, LLC v. North Dakota, No. 22-2159 (Aug. 30, 2023), the U.S. Court of Appeals for the Eighth Circuit held that a takings claim against the State of North Dakota was barred from being litigated in federal court because the State can't be sued in federal court - even if the right to just compensation is self-executing.

This is a mineral rights fight, and the property owner claimed that when the North Dakota legislature (allegedly) shifted the historical high water mark on the Missouri River -- which presumptively gave the State mineral rights that the owner claimed belonged to it -- the State took property for public use.

In December 2020, EEE Minerals and Vohs sued North Dakota, the Lands Board, and the Commissioner of the Board in federal court. They claimed that the North Dakota statute was preempted by the Flood Control Act, and that the defendants had taken property from EEE Minerals and Vohs in violation of the Fifth Amendment. The plaintiffs sought damages, declarations that the North Dakota statute was preempted by federal law and that an unconstitutional taking had occurred, and an injunction prohibiting the defendants from claiming ownership of the mineral interests under state law.

Slip op. at 4. The district court dismissed.

The Eighth Circuit affirmed. We won't go into the question of whether the federal Flood Control Act preempted the North Dakota statute, but will leave it to those of you interested in that issue to digest pages 5-7. Short answer: no, it didn't.

The takings stuff begins on page 7 of the slip opinion. That claim fared no better:

Vohs next asserts that North Dakota, the Lands Board, and the Commissioner committed a taking of property without just compensation, in violation of the Fifth Amendment as incorporated against the States. She contends that when the State defined its mineral rights based on the historical ordinary high water mark, the State took mineral rights that were reserved to EEE Minerals and Vohs without providing compensation. We conclude that Vohs’s claims for damages and injunctive relief are barred by the Eleventh Amendment.

Slip op. at 7.

The court rejected the owner's argument that because the obligation to provide just compensation is self-executing, an owner whose property has been taken is entitled to seek that compensation in federal court. Go press your federal claim in state court, property owners:

The Supreme Court has not directly addressed the interplay between the Fifth Amendment and the Eleventh Amendment. But in Reich v. Collins, 513 U.S. 106 (1994), the Court addressed an analogous situation involving a self-executing right under the Due Process Clause. The Court explained that even though the Fourteenth Amendment provides a right to a remedy for taxes levied in violation of federal law, “the sovereign immunity States enjoy in federal court, under the Eleventh Amendment, does generally bar tax refund claims from being brought in that forum.” Id. at 109-10. Instead, state courts were required to entertain suits against a State to recover taxes unlawfully exacted.

The same conclusion applies to a claim under the Takings Clause. There is no dispute that Vohs may bring her [federal] takings claim in North Dakota state court.

Slip op. at 8-9.

But what about prospective equitable relief (the Ex parte Young "exception" to the usual Eleventh Amendment rule)? The court wasn't having any of that because it concluded that the owner's claim for injunctive relief was just a claim for damages in disguise. "Vohs simply repackages her claim for monetary relief as a request for an injunction that cures past injuries and requires the payment of just compensation. This reformulated request for retrospective relief is likewise barred by the Eleventh Amendment." Slip op. at 9.

Stay tuned for more.

EEE Minerals, LLC v. North Dakota, No. 22-2159 (8th Cir. Aug 30, 2023)

Wine And Takings > Wine And Cheese

Check out this press release, reprinted on the Wine Industry Advisor ("Renowned International Winemaker Files Lawsuit Against Napa County over Denial of Water Rights"), noting that "winemaker of some of the world's most sought-after wines" has sued the County in federal court for a regulatory taking, because it denied well permits after Woodbridge refused to agree to a "strict limit on the water that could be drawn annually from each well, a restriction that does not apply to existing wells[.]"

Want to follow along? Here's the complaint, and here's the docket report. Here's a report on the case from Courthouse News ("Heralded winemaker sues Napa County over water wells").

We may have to do a "site visit" soon, just to be sure these reports are accurate. Just think if this involved our favorite label, Eminent Domaine!

CA6: In Home Equity Theft Taking, Just Compensation Is The Excess The Government Kept, Not The Value Of The Foreclosed Home

Here's a follow up to the issue resolved by the Supreme Court in Tyler v. Hennepin County. Recall that in hat case, the core question was whether state law exclusively defined the "property" which Ms. Tyler claimed - the monies remaining after the foreclosure and sale of her home to satisfy her outstanding property tax obligation. The Supreme Court unanimously held no, that a state's law of property is "one important source," but "cannot be the only source" of what constitutes private property for purposes of the U.S. Constitution.

In Freed v. Thomas, No. 21-1248 (Sep. 6, 2023), the U.S. Court of Appeals followed up on that question. The court addressed the measure of just compensation in these home equity takings. To do so, the court focused on what "property" was taken - was it the home, or was it the excess proceeds after foreclosure and sale?

The (former) homeowner prevailed on his takings claim after the county seized his home and sold it at auction to satisfy a $1,100 property tax debt, and then kept the excess. The owner asserted the fair market value of the home was $98,800, and not the $42,000 the county received when it sold the house at public auction. He argued he was entitled as just compensation to the difference between the fair market value of the home, minus the amounts he owed in back taxes, interest, and penalties. Meaning that if the owner was correct, the county owed him $56,800 more than the $40,900 the county asserted. The district court rejected the owner's argument, concluding that just compensation is "the amount of the difference between the foreclosure sale and [his] debt." Slip op. at 3.

The Sixth Circuit agreed. The main issue was what "property" was "taken," although the opinion does not clearly set this out. Check out page 4 and over onto page 5 for the court's brief analysis. The court noted that the "Freed is entitled to the amount of the sale above his debt and no more." Slip op. at 4-5.

Here, the district court held at the motion for summary judgment stage that Freed’s Fifth Amendment rights were violated, and it held that Freed was owed the difference between the foreclosure sale amount and his debt, plus interest. This holding squares with Tyler. Freed asserts though that he is entitled to an additional $56,800 because the purported fair market value of the property was $98,800 and the property sold for only $42,000. However, neither this court nor the Supreme Court has ever held that a plaintiff whose property is foreclosed and sold at a public auction for failure to pay taxes is entitled to recoup the fair market value of the property.

Slip op. at 4.

That is only correct if the "property" here was not the home itself, but the excess proceeds from the sale. That squares with Tyler, where the homeowner asserted that the unconstitutional action was Hennepin County keeping the excess proceeds (the property), and not forcing a sale and selling the property at auction (an action that Ms. Tyler conceded was ok). 

Similarly here, the property was not Freed's home and the unconstitutional action was not seizing it and selling it to satisfy his tax debt. Rather, the unconstitutional action was the county retaining the excess monies after the (otherwise valid) foreclosure and sale. Thus, the "property" is the money, not the home.

Which goes to show you that how you define the "property" allegedly being taken is critical.

Freed v. Thomas, No. 21-1248 (6th Cir. Sep. 6, 2023)

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

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

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

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

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

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

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

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

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

New Cert Petition: California's Escheat Procedures Cheat Due Process (And Take Property To Boot)

Here's the cert petition, recently filed, which asks the Supreme Court to review the California courts' decision that the state's "unclaimed property" statute  -- by which the State is able to grab billions of dollars of private property on the theory that the owners abandoned it. The statute requires the State to try and locate the owners, but the petition alleges the procedures do not provide adequate notice to the owners, and that the State doesn't really try all that hard to tell them.

Here are the Questions Presented:

1. Whether the Controller’s actions under color of the California Unclaimed Property Law, Cal. Civ. Proc. Code §§ 1300, et seq. (“UPL”), violate the Due Process Clause of the Fourteenth Amendment because they deprive owners of their property without affording constitutionally adequate notice.

2. Whether the Controller’s actions under color of the California UPL violate the Takings Clause of the Fifth Amendment because they take private property without just compensation.

This issue was left open by the Supreme Court's recent decision in Tyler v. Hennepin County, which held that the government keeping excess funds after a tax foreclosure sale was a taking, and rejected the County's argument that the homeowner had abandoned the excess by failing to pay her property taxes. The Court noted that for property to be deemed abandoned, the government must, at the very least, make some kind of process available for the owner to reclaim it that is reasonably designed to let them actually reclaim it:

The County portrays this as just another example in the long tradition of States taking title to abandoned property. We upheld one such statutory scheme in Texaco. There, Indiana law dictated that a mineral interest automatically reverted to the owner of the land if not used for 20 years. 454 U. S., at 518.

...

“It is the owner’s failure to make any use of the property”—and for a lengthy period of time—“that causes the lapse of the property right.” Texaco, 454 U. S., at 530 (emphasis added). In Texaco, the owners lost their property because they made no use of their interest for 20 years and then failed to take the simple step of filing paperwork indicating that they still claimed ownership over the interest.

Tyler, slip op.at 13-14.

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

Petition for Writ of Certiorari, Hashim v. Cohen, No. 23-195 (U.S. Aug. 29, 2023)

Arizona Supreme Court To Decide Whether Condo Law Which Permits Association To Force Sale Of A Privately-Owned Unit Is A Taking

Here's the Order by which the Arizona Supreme Court agreed to review a case we've been following.

The main issue is whether the Arizona condominium statute, which allows the condo association upon termination of the condominium regime, to sell individually-owned units is a taking under the Arizona Constitution.

Here are the questions presented:

FURTHER ORDERED: GRANTING IN PART the petition and cross-petitions as to these rephrased questions:

1. Either on its face or as applied in this case, does A.R.S. § 33-1228 authorize the taking of private property for private use in violation of Article 2, § 17 of the Arizona Constitution?

2. If any common elements or units in a condominium are to be sold pursuant to a condominium termination agreement, does A.R.S. § 33-1228 require all the common elements and units to be part of that sale?

3. If a contract incorporates an unconstitutional statute by reference, are the terms of that statute enforceable as to the contracting parties?

4. If a condominium declaration incorporates a statute by reference, are subsequent statutory amendments incorporated into the agreement?

We filed an amicus brief in the Court of Appeals, which argued that the statute should be construed to allow only the sale of the entire building, not individual units, but if the statute is read to permit picking off individual units for forced sale, then the statute allows for an unconstitutional and uncompensated taking.

The New York Times covered a very similar situation in Florida - "Their Retirement Plan Did Not Include Being Forced to Sell Their Condo" (Feb. 24, 2023).

Stay tuned for more as the case progresses. The argument date will be announced.

Order, Cao v. PFP Dorsey, No. CV-22-0228-PR (Ariz. Aug. 23, 2023)

Register Now For The 20th Brigham-Kanner Property Rights Conference, Oct. 26-27, 2023

Heads-up: the registration page for the 20th Brigham-Kanner Property Rights Conference, October 26-27, 2023, at the William and Mary Law School in Williamsburg, Virginia, is now up.

Early registration is a good thing because space is limited, especially at the Wren Building banquet on the 26th, at which the 2023 B-K Property Rights Prize will be presented to Prof. Gregory Alexander.

So please don't miss out.

The Property Rights Hall of Fame (second plaque)

If you are not already familiar with the Conference, it is (in our opinion) the best one-day event on property and property rights theory and practice. Expressly designed to bring together the legal academy and the practicing dirt law bar, the conference is where we discuss the burning property and property rights issues of the day. Here's the 2023 Program:

• Property and Propriety (or a Well-Ordered Society): A Tribute to Gregory S. Alexander
• Equity’s Role in Defining Property Rights
• Roundtable: Emerging Issues
• The Restatement’s Impact on Property Rights
• The Scalability of Property Rights (or the extent to which interests in property are or should be constitutionally protected)

Details here.

For more on the Conference, see our report from the 2022 Conference (more here as well).

Come, join us!

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

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

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

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

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

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

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

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

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

Slip op. at 14.

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

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

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

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

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

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

New Cert Petition: Overrule Penn Central!

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

In this cert petition, the property owner is asking the U.S. Supreme Court to review an unpublished decision of the Ninth Circuit which rejected both Lucas and Penn Central takings claims.

Here are the Questions Presented:

1. Should this Court overrule in its entirety, or reconsider parts of, Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978)?

2. Does the “economic impact” of a regulation on the subject property have to approach total loss of use and value to weigh in favor of a taking under Penn Central, as the District Court and Ninth Circuit held below?

3. Can a property owner ever have “distinct investment-backed expectations” for the beneficial use of property, for purposes of alleging a Penn Central taking, if restrictive downzoning is adopted before development of the property is undertaken?

4. Should the “character of the government action” prong of Penn Central be expunged from takings analysis as conflicting with Loretto v. Teleprompter Manhattan CATV Corp., 458 US 419 (1982) and Lingle v. Chevron USA Inc., 544 US 528 (2005)?

5. Does a zoning regulation that places property in a zone for which no beneficial uses are authorized violate the categorical taking rule of Lucas v. South Carolina?

Follow along here as we'll be watching the case as it progresses, or on the Court's e-docket.

Petition for a Writ of Certiorari, Craneveyor Corp. v. City of Rancho Cucamonga, No. 23-169 (U.S. Aug. 18,...

The Downside Of Seeking Injunctive Relief In Takings Cases

A fairly short one from the U.S. Court of Appeals for the Fifth Circuit.

In Sheffield v. Buckingham, No. 22-40350 (July 31, 2023), the court affirmed the district court's declining to issue a preliminary injunction enjoining State of Texas officials from enforcing the Open Beaches Act.

The presumptive public/private boundary on beaches in Texas is the mean high tide line, although the public may obtain an easement to access the beach landward of the MHTL through prescription or dedication. But as the Texas Supreme Court held, abrupt shifts in the topography of a beach caused by hurricanes and tropical storms does not automatically "roll" the line landward under the state's Open Beaches Act. 

After the Texas court issued that ruling, the legislature amended the statute to permit the State to "suspend action on conducting a line of vegetation determination for a period of up to three years from the date the order is issued if the Commissioner determines that the line of vegetation was obliterated as a result of a meteorological event." Slip op. at 2. 

Well, that happened and after Hurricane Laura and Tropical storm Beta hit the area, the state ordered determination of the vege line suspended for two years. This had the effect of the public/private line being 200 feet inland of where it was prior to the storms.

Owners who own that 200 feet filed a takings lawsuit in federal court against the State, alleging that that "the public can now stand, sit, and otherwise station themselves on" the plaintiffs' private beaches. Because this is a federal court action against state officials, the only remedy sought was prospective injunctive relief: an order prohibiting the officials from enforcing the Act.

The district court declined to enter a preliminary injunction, and the property owners appealed to the Fifth Circuit. On the same day the owners filed their Opening Brief, the State rescinded the order suspending the vege line determination, concluding the beach was stabilized, and thus the suspension no longer needed.

You know what happened next: the state argued to the Fifth Circuit that the appeal was moot. We no longer doing anything that the court can enjoin, Your Honors!

But come on man, we know that the process isn't so easily manipulable. A party cannot automatically moot a case by voluntarily ceasing to do the very thing the plaintiff claims is illegal, and then perhaps starting right back up once the lawsuit is gone. The Fifth Circuit rejected the owners' arguments that this one is capable of repetition, concluding that the temporary order is unlikely to recur and any future harms are speculative.  

Yes, as littoral property owners, their properties could be subject to a similar action in the future. "But this is not unique to these Owners. All properties near the beachfront in Texas could theoretically be subject to similar actions." Slip op. at 6. Thus, this is a generalized grievance, not a specific harm.

Nor was the State suspending the suspension "litigation posturing" according to the Fifth Circuit. Yes, the State affirmatively rescinded the order a few months before it was set to automatically expire, but the court took the State at its word that the reason for the rescission was not to moot the appeal, but because it had served its purpose. The court was willing to presume this, in the absence of contrary evidence:

It would make little sense to have Texas leave the temporary order in place beyond its usefulness and purpose—laid out explicitly in the order—simply so a court could find that the case is moot. In effect, this order ended by its own terms when Texas determined that it achieved its written purpose.

The presumption of truth to Texas’ statements that the temporary order served its usefulness—and did not end because of litigation posturing—is warranted. This is because “[g]overnment officials ‘in their sovereign capacity and in the exercise of their official duties are accorded a presumption of good faith because they are public servants, not self-interested private parties.’”

Slip op. at 7 (citations omitted).

Not only did the Fifth Circuit decline to reverse the turning down of the PI, it dismissed the case as moot.

Why can't the owner seek just compensation for the (alleged) temporary taking? You know the answer to that question.

Sheffield v. Buckingham, No. 22-40350 (5th Cir. July 31, 2023)

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

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

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

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

Palazzolo, 533 U.S. at 607.

So what gives, Washington Supreme Court?

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

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

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

Next:

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

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

Slip op. at 2.

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

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

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

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

Palazzolo, 533 U.S. at 628.

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

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

Slip op. at 16.

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

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

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

Still Time To Join Us Wed Aug 9: ALI-CLE's "How Did Property Rights Fare at the Supreme Court? What Happened in the 2022 Term and What's Next"

Tomorrow, Wednesday, August 9, 2023 at 1:00 - 2:00 p.m. (Eastern Time), please join us for ALI-CLE's web program, "How Did Property Rights Fare at the Supreme Court? What Happened in the 2022 Term and What's Next."

Here's the course description:

This has been a blockbuster U.S. Supreme Court term for property law, with the Court deciding three major property cases: Tyler v. Hennepin County (government’s keeping the excess value when seizing and selling a home to satisfy a property tax debt is a taking), Wilkins v. United States (is the federal Quiet Title Act’s statute of limitations a jurisdictional bar?), and Sackett v. EPA (the scope of Clean Water Act wetlands jurisdiction). To gain a better understanding these opinions, the current state of takings and property law, and what these cases mean for your practice, join a distinguished panel of experts for this one-hour webcast. The faculty will also explore what these decisions mean for the future and what steps lawyers can take to incorporate these decisions into their practices.

Among the things we'll be analyzing and discussing:

• What happened in each case and how the Court ruled
• The practical consequences of the decisions
• What new rules practitioners must understand
• What Sackett means for the efforts to define “Waters of the United States”
• How courts will treat the question of “what is the property” in takings and eminent domain litigation
• How you can avoid statute of limitations problems
• Where the Supreme Court might be going next and what issues remain open

I'll be moderating, and joining me will be takings and property experts lawprof Emilio Longoria, and Sophia Holley (Keating Muething & Klekamp).

We will also have a preview of the 2024 Eminent Domain and Land Valuation Litigation Conference, February 1-3, 2024, New Orleans.

Come, join us. The format allows for a lot of questions, interaction, and open discussion. As usual, there are group discounts.

Recognizing A Property Rights Icon: "Mentors, A Path to Fairness, and the Joy of Taking"

We recently attended the American Bar Association's Annual Meeting in Denver to speak at the Section of State and Local Government Law's program, "The 100th Anniversary of Pennsylvania Coal v. Mahon: How the Takings Clause Became the Primary Check on Government Power When SCOTUS Abandoned Review Under the Due Process and Contracts Clauses During the New Deal."

But the real highlight of the Meeting was the Jefferson Fordham Awards which, as we noted earlier, were presented to property rights icon Michael Berger, who the Section recognized with the Daniel J. Curtin, Jr. Lifetime Achievement Award.

Also noteworthy: the presentation of the Anita P. Miller Advocacy Award to land use law giant, Professor John R. Nolon, and the Up and Comer Award to a former William and Mary student (and now colleague) of ours, Makenna X. Johnson. 

Professor Frank Schnidman introduced Michael Berger and we thought it important to share his remarks with all of you, because he highlights Berger's commitment to fairness and the rule of law, and the importance of mentorship.

Frank graciously consented to us reprinting his remarks here.

******

Chance Glance: Mentors, A Path to Fairness and the Joy of Taking

Professor Schnidman introducing Michael Berger

American Bar Association, State and Local Government Law Section

Jefferson B. Fordham Awards Luncheon, August 4, 2023

Introduction of Michael Berger, Senior Counsel, Manatt Phelps & Phillips, LLP

by Frank Schnidman, John M. DeGrove Eminent Scholar at Florida Atlantic University, School of Urban and Regional Planning

Good afternoon.

First, I want to thank the ABA State and Local Government Law Section for giving me the opportunity to introduce my friend and colleague Michael Berger.

I was introduced to Michael Berger more than 50 years ago, and for over more than 30 years I have personally had the opportunity to watch Michael carefully and patiently educate 1,000s of attorneys, public officials, academics and students about “Fairness.”

In 1975 Michael wrote a law review article, To Regulate or Not to Regulate - Is That the Question? Reflections on the Supposed Dilemma Between Environmental Protection and Private Property Rights, 8 Loy. L.A. L. Rev. 253 (1975). Yes, 1975!

As so many others have recognized, Michael spent the next 48 years working on cases that would provide a path to an understanding that the only valid understanding of constitutional property rights must recognize the concept of fairness.

Michael stated those many years ago that:

“What is urged is that 'the public' take a long, hard look at what its needs are, assess all the costs involved, and proceed accordingly.

“If ‘the public’ wants land uses (or non-uses) which benefit ‘the public’ generally, then ‘the public’ should buy the property, or an appropriate interest in the property, rather that attempt to force individual property owners to devote their property to public use without compensation.”

Michael will discuss his path to “fairness,” and his “Joy of Taking” in a moment.

He will share with you that he has argued 4 significant cases before the United States Supreme Court, and that for me, for many years, he made an annual pilgrimage to the University of Miami School of Law where I ran the LL.M. Program in Real Property Development to teach a one week one-credit, 15-hour course on regulatory takings. Ultimately, a few hundred real estate attorneys going back to practice were better able to represent their clients.

There is such great detail to mention in describing why Michael is here before us today, and Professor Patty Salkin distilled it so well in her Nomination Package, a document that highlights the litigation and scholarship. That nomination is attached at the end of my Introduction.

“Chance Glance” is the title of my introduction. That actually is how it all began.

A chance glance at a bulletin board at Washington University School of Law and the notice that Professor Dan Mandelker was looking for a research assistant started Mike on his career path. Michael worked for Dan for two years, and unhappy with the difficulty of finding a law firm job in St. Louis, Dan introduced him to Professor George Lefcoe, who provided an opportunity to pursue an LL.M. at the University of Southern California School of Law – and allowed him to devote full time to research the evolving law as it related to airports and their neighbors. The USC Law Review published an edited version of his thesis as “Nobody Loves an Airport,” 43 So. Calif. L. Rev. 631 (1970).

Beginning in 1972, Michael argued all but one of the airport noise cases that came before the California Supreme Court.

Michael Berger, remarking on a remarkable career
Best applause line: "I'm not done yet!"

In the 1949-published Proceedings of the Annual National Planning Conference of the American Society of Planning Officials held in Cleveland, Ohio October 10-12, 1949, George N. Wallace, Executive Director of the Montgomery County (Ohio) Planning Commission reported on the then-current issues with airport expansion:

“The airport people are vitally concerned with our proposed zoning pattern. They have told me that they must keep their operations somewhat flexible if they are to serve future demands and meet changing developments. However, we must make precise decisions as to the probable expansion of our airports and accessory airport uses; we have to recognize the importance of the airport in its service to the community, and, at all times, give full consideration to the rights of adjacent landowners.”

It is regarding the “give full consideration to the rights of adjacent landowners” comment that Michael Berger held municipal planners and local elected officials “feet to the fire” to follow a path to fairness!

I am limited in time in what I can say in my introduction about Michael’s life journey. I therefore ask you to read two of his law review articles and an article from Planning magazine:

• The Joy of Takings, 53 Journal of Law & Policy 189-200 (2017).
• Strong and Informed Advocacy Can Shape the Law: A Personal Journey” 4 Brigham-Kanner Property Rights Conference Journal 1-20 (2015).
• What is Fairness, Anyway, Planning, October 2006, p. 12-18.

In conclusion, let me end with another quote from Mike’s 1975 law review article:

“There is room for regulation. More than that, there is a need for regulation. But if it is truly to serve our best interests, as a people, it must be balanced regulation: a type which is fair to all.”

That, my friends, has been Michael Berger’s life work, and that is why today we come together to honor him and to award him the 2023 Jefferson B. Fordham Lifetime Achievement Award.

Makenna Johnson (Up & Comer Award) with
Michael Berger (Lifetime Achievement Award)

26th Annual Jefferson Fordham Society Luncheon (Denver, Aug. 4, 2023)

New Article - "Necessity Exceptions to Takings" (Shelley Ross Saxer)

Worth checking out: a new article from Pepperdine Law School's Shelley Ross Saxer, published in the University of Hawaii Law Review, "Necessity Exceptions to Takings," 44 U. Haw. L. Rev. 60 (2022). [Disclosure: as noted in the author's note, we reviewed an earlier draft of the piece and provided some thoughts.]

Here's the Abstract:

The doctrine of necessity has strong roots in the common law of tort and property going back hundreds of years. In the United States the doctrine has been applied in various situations to negate judicial review of constitutional challenges to government action, most recently in some of the wildfire and flood claims resulting from disasters. But now, the states’ responses to the COVID-19 pandemic have brought one of these necessity doctrines—the public health necessity relying on Jacobson v. Massachusetts—to the forefront as courts across the country review constitutional challenges to state public health measures. With such intense review of Jacobson’s public health necessity in a short timeframe, it appears that the courts, including the Supreme Court, are recognizing that common law emergency exceptions cannot be applied to prevent constitutional review. This development supports the goal of this Article, which is to discourage the use of the necessity doctrine to bypass constitutional scrutiny of asserted rights, particularly as to takings claims under the Fifth Amendment. This Article examines the historical development of the diverse categorical exceptions to takings claims under the Fifth and Fourteenth Amendments and addresses the continued viability of these exceptions following the decision in Pennsylvania Coal v. Mahon. After reviewing four categories of necessity exceptions that include: 1) the doctrine of destruction (general, military, and law enforcement); 2) the public health exception; 3) the nuisance and background principles of property law exception; and 4) the police power exception, this Article concludes that the only doctrinally acceptable categorical defenses to a regulatory taking are the nuisance and background principles of property law exceptions. Nuisance and background principles of state law will determine whether the property owner has a property interest subject to a government taking. If the property owner never had a right to use their property in a manner that constitutes a nuisance or interferes with a public resource, it cannot be taken and does not deserve compensation. Government actions that constitute a taking, but benefit the public as a whole whether by conferring a benefit or preventing a harm, should not burden individual property owners when, under the Armstrong principle, in all fairness and justice, we the public should share in paying for the benefits received.

Download the piece on SSRN here.

Tuesday Property Round-Up (International Edition)

Here's what we're reading today:

• Timothy Harris, Backwards Federalism: The Withering Importance of State Property Law in Modern Takings Jurisprudence, 75 Rutgers L. Rev. ___ (2023) ("Modern Supreme Court Fifth Amendment takings cases have – paradoxically -- diminished the role and importance of state law. Doing so creates uncertainty and unpredictability in determining where private property rights begin and where government’s authority ends.").
• Jonathan Katzenellenbogen, What happens when the Expropriation Bill is passed? (July 19, 2023) (if you want to find out what is going on in South Africa in property rights, here's a good piece to get you up to speed).
• Meina Cai, The Art of Negotiations: Legal Discrimination, Contention Pyramid, and Land-Taking Compensation Policy in China (June 2023) ("How do land-dispossessed villagers protect their interests in a context where the legal framework discriminates against them? Contradictory to the existing research that pays much attention to protests, this research identifies negotiations as a strategy of the dispossessed to engage with local governments and improve their compensation arrangement.").
• Nicole Stelle Garnett, Can Property Law Protect Indigenous Sacred Sites? (Jotwell, July 24, 2023) (a review of a forthcoming article in the Virginia Law Review).
• Frontier Centre for Public Policy, Frontier Centre for Public Policy Releases Canadian Property Rights Index, Marking Tenth Anniversary (July 17, 2023) (what is the state of property rights in Canada - find out one view here). 
• Sharon Udasin, Debate rages over California coastal development amid housing crisis (The Hill, July 15, 2023) ("Among the most divisive elements in SB 423, however, is its deletion of a provision in SB 35 that had prohibited the streamlining of multifamily housing projects in coastal zones.").

Enjoy your Tuesday. 

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

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

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

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

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

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

Slip op. at 9.

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

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

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

Slip op. at 10.

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

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

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

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

New Article: Application of the Penn Central Test

Here's a recently-published article (ALI-CLE's The Practical Real Estate Lawyer) on a subject that we know you will want to read about: Jon Houghton, Hertha Lund, and Ben Stormes, Application of the Penn Central Test, 7 Prac. Real Estate Lawyer 7 (May 2023).

Check it out. It's short, practical (naturally), and worth your time.

Jon Houghton, Hertha Lund, and Ben Stormes, Application of the Penn Central Test, Prac. Real Estate Lawyer...

Aug 4, 2023: "The 100th Anniversary of Pennsylvania Coal v. Mahon: How the Takings Clause Became the Primary Check on Government Power" (ABA Annual Meeting, Denver)

The Mahon Property

Join us on Friday, August 4, 2023 (10:30-11:30am, MT) in Denver at the ABA Annual Meeting for our CLE session on "The 100th Anniversary of Pennsylvania Coal v. Mahon: How the Takings Clause Became the Primary Check on Government Power When SCOTUS Abandoned Review Under the Due Process and Contracts Clauses During the New Deal."

The program description:

The Takings Clause and 100 years of the Pennsylvania Coal v. Mahon doctrine have become the primary check on governmental power that the Due Process and Contracts Clause used to serve, before the Supreme Court finally and formally abandoned judicial review under those doctrines during the New Deal. Mahon transcended its primary relevance as to compensation for the taking of private property to become the fundamental means by which the Rule of Law determines of the individual’s relation with the government.

This session will survey the evolution of takings law and assess its impact on federal, state and local government authority, including not only the limits of that power over private property, but how the law as created by Mahon reconciles the essential issue of an individual’s private rights as they relate to the government’s exercise of authority in the public interest. This ambitious session will predict where these trends are taking us and what constitutional, legislative, and executive initiatives should be considered.

Details here.

This is another part of our continuing series on Mahon's 100th anniversary. And there will be more, so stay tuned.

Don't Release The Hounds! No Taking When Florida Voters Outlawed Dog Race Gambling

 A short one from the Florida District Court of Appeals (First District).

In D'Arcy v. Florida Gaming Control Comm'n, No. 1D21-3606 (May 24, 2023), the court held that the voters of Florida adopted Amendment 13 to the Florida Constitution that outlawed betting on greyhound racing (indeed betting all dog racing), it did not effect a Penn Central taking of the property of the owner of a greyhound racing business.

The trial court granted the state summary judgment, and the appeal court affirmed. The court also pointed out that the Amendment didn't ban dog racing outright, merely betting on dog racing. Slip op. at 3. The court focused on a single Penn Central factor, the "expectations" question and held that "given then heavily regulated field of gambling, D'Arcy did not have a reasonable expectation that the investment in dog racing could not be severely impacted by regulation." Id.

It is not surprising that reasonable investment-backed expectations “are greatly reduced in a highly regulated field.” Branch v. U.S., 69 F.3d 1571, 1581 (Fed. Cir. 1995). Given the extensive history of state regulation of gambling, it is not reasonable that D’Arcy had no expectation of future governmental interference with their property investments, as they as claimed. Because one of the factors of Penn Central may be dispositive of a takings claim as a whole, we affirm the grant of summary judgment on this ground. See Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005 (1984) (indicating that a single Penn Central factor may be dispositive of a takings case).

The court also held that the Amendment was a valid exercise of the police power, thus no taking:

The operation of Amendment 13 does not deprive racing dog owners of their property; it merely regulates its use. Thus, we also affirm summary judgment on the alternative ground that Amendment 13 was a valid exercise of police power, not eminent domain. Regulation of gambling does not constitute a taking as it is a well-established, valid exercise of police power.

Slip op. at 4.  

You already know what we think of that argument.

D'Arcy v. Florida Gaming Control Comm'n, No. 1D21-3606 (Fla. Dist. Ct. App. May 24, 2023) (per curiam)

SC: No Penn Central Taking For City Ordinance Merging Contiguous-But-Separate Parcels

As you can tell from the date of the opinion, we've been meaning to post the South Carolina Supreme Court's ruling in Braden's Folly, LLC v. City of Folly Beach, No. 2022-000020 (Apr. 5, 2023) for a while. Something else always intervened, but it remains a decision worth reviewing.

The city adopted an ordinance that erased lot lines for certain contiguous properties under common ownership, merging two distinct parcels into one and prohibiting their separate sale. The ordinance recognized nonconforming uses. Braden's properties are covered by the ordinance.

When Braden's Folly acquired the Lots in 1999, there was a small house on Lot A, and Lot B was undeveloped because it was either underwater or part of the active beach. Following a beach renourishment in 2005, Lot B became developable because it had been transformed into mostly sandy beach. Therefore, between 2006 and 2007, Braden's Folly received building permits from Folly Beach and constructed two single-family residences—a larger, more modern one on Lot A and a smaller one on Lot B—for a total cost of $1.1 million.

According to Braden's Folly, it had always intended to keep one of the Lots and sell the other—whichever of Lot A or B received the highest offer—in order to pay for the construction costs of the two houses. However, construction on the Lots finished in 2007 during the housing market collapse and Great Recession, which made selling either of the Lots financially unfeasible at that time. Nonetheless, even after the housing market recovered, Braden's Folly did not place the Lots on the market, continuing to use them for family vacations and as rental properties that grossed an average of $117,000 per year combined. It was not until February 2018 that Braden's Folly finally put the houses on the market, listing Lot A for $1.3 million and Lot B for $1.2 million.

One year later, upon the amendment of Folly Beach's merger ordinance in April 2019, Lots A and B were legally combined or "merged" into a single lot.

Slip op. at 9-10 (footnote omitted).

Braden alleged the merger was a taking of its property rights. The trial court agreed, holding the ordinance effected an as-applied Penn Central taking. Slip op. at 12 ("The circuit court held a property owner's reasonable investment-backed expectations are defined at the time the investment is made, and Braden's Folly intended to sell one of the Lots when it constructed the houses in 2006 and 2007.").

The S.C. Supreme Court held no Penn Central taking. The court's application of the three factors begins on page 16, with what we'll call the "Murr" question: what is the property alleged to be taken? Is it the unsaleable parcel, or the post-ordinance two-combined parcels? Applying the Penn-Central-within-Murr factors, The court held it is the latter. Slip op. at 19 ("we hold the appropriate denominator in the takings fraction, and the appropriate parcel to compare any economic impact resulting from the merger ordinance, is the entirety of Lots A and B combined").

• Economic impact: Assuming the owner's calculations are true, the before-and-after delta caused by the regulations represents a 23% loss of economic value. Slip op. at 22 ("While not insignificant, a 23% reduction in value is far less than other reductions in value found constitutional by the Supreme Court."). Remember, the court already determined that the "property" is both parcels, so you kind of knew where this was going, didn't you? As we wrote here, the big battle in these cases isn't so much whether there's been a taking, but what kind of taking it is (Lucas v. Penn Central), and once that battle has been fought and lost, the handwriting is nearly always on the wall.
• Investment-backed expectations: Because the merger ordinance didn't exist at the time of Braden's purchase, "[o]bjectively, it would have been reasonable for Braden's Folly to have expected to be able to" develop and sell its separate lot. Slip op. at 28. But (and there's always a "but"), Braden has been able to use the property for a number of decades, and it "made little to no effort to actually sell either property." Slip op. at 28, 29 ("Third, even assuming Braden's Folly's investment-backed expectation remained the same, the government cannot be held hostage by a property owner's expectations indefinitely when an owner refuses to implement those expectations. Rather, at some point, the government must have a right to regulate local properties in a measured fashion without running afoul of the takings doctrine, even if its regulation runs contrary to an owner's unspoken and unimplemented investment-backed expectations.").
• Character of the government action: "Folly Beach's merger ordinance does not unfairly single out Braden's Folly's Lots. Rather, as discussed by the Murr Court, merger ordinances have long been employed as a tool to regulate lot sizes." Slip op. at 34. The merger ordinance is designed to help save the beach, and this benefits beachfront owners like Braden. Id. ("Rather, in light of the potential public costs of continuing unchecked super-beachfront development, we reject the argument that Folly Beach's merger ordinance constitutes anything but responsible land use policy— one that is generally applicable and widely accepted nationwide.").

Here's what bothers us about this case:

After applying the Penn Central test, we find two factors weigh strongly in favor of Folly Beach: the economic impact and the character of the government action. As to the third factor, we find there is competing evidence regarding whether the merger ordinance interfered with Braden's Folly's reasonable, investment-backed expectation. We therefore conclude the third factor is a neutral factor that does not weigh in favor of either party. As a result, we hold the Penn Central balancing test overall weighs in favor of Folly Beach, and the merger ordinance did not effect an unconstitutional taking of Braden's Folly's Lots.

Slip op. at 35.

If there is "competing evidence" about Braden's investment-backed expectations, what is a court doing entering summary judgment on the Penn Central case by balancing and weighing the factors (even if the other two factors are property resolved as a matter of law - which they should not be)? The Penn Central test is ad hoc, with no one factor dispositive. As the Supreme Court has noted, one factor alone can serve to support a Penn Central verdict in favor of a property owner. For more see here and here.

Braden's Folly, LLC v. City of Folly Beach, No. 2022-000020 (S.C. Apr. 5, 2023)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Indiana SCT: We're Not Going To Decide Whether Indiana's Takings Tests Should Be The Same As Federal Tests (But We'd Like To In A Future Case)

In this Order the Indiana Supreme Court declines to take up the question of when property is taken by regulation. We post it here to note the statement of Justice Slaughter, who agreed that this case isn't the right vehicle to examine whether Indiana law should adopt a takings test different than the federal test but that he "remains open" to considering it in the right case.

So, Indiana friends, heads-up. Be sure in your next regulatory takings matter, you plead and argue both federal and Indiana takings.

Order at 2.

Order, Duke Energy Indiana,...

Nectow Is Meaningless Because It "relies on pre-Lochner administrative review jurisprudence"

One from the Louisiana Court of Appeal, 3000-3022 St. Claude Avenue, LLC v. City of New Orleans, No. 2022-CA-0813 (June 22, 2023) demonstrating that the standard of judicial review for zoning matters (rational basis) is pretty powerful.

The owner wanted to develop its New Orleans property, but first needed a zoning amendment from residential to commercial, followed by a conditional use permit for its proposed use. The city denied the request. After much procedural back-and-forth, including a trip to the court of appeal to resolve, the case was sent back to the city council to state the basis for the denial. The council held a public meeting at which it denied the rezoning, and declined to state more, including the reasons why.

So back to court the owner went. The trial court thought it had been clear enough: you were supposed to say why you denied the rezoning. Hearing nothing satisfactory from the city in response, the trial court held that the denial was arbitrary and capricious, and sent the case back to the city council with an order that it approve the zoning change. Next stop, the court of appeal.

The city asserted this was wrong for two reasons. First, making us state the reasons why we denied the rezoning effectively shifts the burden from a challenger showing that what we did was arbitrary and capricious, to the city showing that it wasn't. Next, the city argued that the owner hadn't met its burden to show that the rezoning denial was arbitrary and capricious because it didn't overcome the rational basis standard of review.

The court of appeal accepted both arguments. A "zoning decision by the City Council is not invalid merely because the City Council did not include an explanation of its decision." Slip op. at 9. These things are entitled to a presumption that they are valid, and it's up to you, challenger, to prove why denial of rezoning is arbitrary and capricious. It isn't the government's duty to say why it does something. See slip op. at 12 ("The trial court’s October 12, 2022 judgment and Reasons for Judgment do not demonstrate a finding that the LLC established an arbitrary and unreasonable exercise of legislative authority so as to rebut the presumption of validity attached to the City Council’s decision and shift the burden of proof to the City Council. This was error for the trial court to do so."). 

Besides, it really doesn't matter because rational basis review is really conceivable basis - what the city might say about why it denied the rezoning doesn't matter as long as one reasonable government official might think it is related to the public's health, safety, welfare, or morals. Slip op. at 15 ("It is sufficient that the municipal council could reasonably have had such considerations in mind.").

What about Nectow v. City of Cambridge, 277 U.S. 183 (1928), where the very same U.S. Supreme Court that had a couple of years earlier upheld zoning against a facial constitutional challenge held that as-applied to a particular parcel, Cambridge's residential designation was arbitrary and capricious? The Louisiana court discounted Nectow, noting only in a footnote that "[b]ecause Nectow v. City of Cambridge, 277 U.S. 183, 48 S.Ct. 447, 72 L.Ed. 842 (1928) relies on pre-Lochner administrative review jurisprudence, we do not find it persuasive in the case sub judice."). Slip op. at 16 n.3. Lacking proof that the property here is "completely unsuited" for residential development in accordance with its current zoning, there's nothing for a court to do. 

It doesn't have to be this way, as the U.S. Court of Appeals for the Fifth Circuit recently held. Facts seem like they should matter.

Finally, the court rejected the takings claim:

The City Council received information regarding the ability of the Property to generate income in its current zoning because the structures present on the rear residential portion have previously served as residential rentals, so this refutes the LLC’s contention that the current designation constitutes a taking of the LLC’s property.

Slip op. at 21.

This portion of the court's opinion is pretty incoherent as it seems to apply a due process analysis to the takings question. See, e.g., slip op. at 20-12 (analyzing the possible reasons why the city council denied the rezoning, and why residential uses are preferred by neighbors). We'd appreciate it if anyone can explain this part of the opinion to us in a way that makes some sense.

3000-3032 St. Claude Avenue, LLC v. City of New Orleans, No. 2022-CA-0813 (La. App. June 22, 2023)

CA6: We Haven't Already Said Individual Govt Officials Can Be Liable For Takings, So They're Immune

In Sterling Hotels,LLC v. McKay, No. 22-1345 (June 22, 2023) the U.S. Court of Appeals for the Sixth Circuit considered whether a hotel could sue a state elevator inspector who barred the hotel from operating its elevators for reasons the state's Elevator Safety Board had not approved. As a result, the hotel couldn't rent rooms on five of its six floors. 

Federal complaint -- including a takings claim against the inspector in his individual capacity -- followed. The district court declined to address whether the inspector had qualified immunity from the takings claim. Next stop, Sixth Circuit.

Did the inspector violate the hotel's "clearly established constitutional rights" and thus not enjoy immunity? Nope:

Sterling next argues that McKay engaged in an unconstitutional regulatory taking when he sealed the elevators. At the time of the alleged taking, however, no court in this circuit had yet decided whether an officer could be liable for a taking in his individual capacity—which is the capacity in which Sterling sued McKay here—and at least one case suggested the contrary. See Viceroy v. Walton, 730 F.2d 466, 467 (6th Cir. 1984) (“Plaintiff cites no case, and we can find none, that suggests that an individual may commit and be liable in damages for a ‘taking’ under the Fifth Amendment”). McKay’s potential individual liability for a regulatory takings claim was not clearly established when he sealed the elevators. That means McKay is entitled to qualified immunity on this claim.

Slip op. at 5.

So can a government official be liable for a taking in his individual capacity? Still don't know. But until the Sixth Circuit or the Supreme Court says yes, then the answer is going to be no. Or at least you can't sue for that. At least not in the Sixth Circuit.

The story isn't over completely, however, because the hotel also asserted a procedural due process claim that it was entitled to notice and a chance to be heard before the inspector tagged the elevators. On this, the Sixth Circuit agreed this right is clearly established, and the inspector enjoys no immunity. See slip op. at 5.

Sterling Hotels, LLC v. McKay, No. 22-1345 (6th Cir. June 22, 2023)

Sad Birthday Wishes To Penn Central - Some Things Don't Get Better With Age

Thanks to lawprof Josh Blackman for the reminder that our un-favorite case, Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978), turned 44 today.

If you know, you know.

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

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

If you want to be a part of rethinking Penn Central, listen to this episode of Clint Schumacher's Eminent Domain Podcast with our colleague Jon Houghton ("Jon Houghton and His Penn Central Quest"), or submit a proposal for our "Rethinking Penn Central" symposium.

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

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

New Takings Ripeness Cert Petition (Ours): Knowing The Permissible Uses "to a reasonable degree of certainty" Is All You Need For A Claim To Be Ripe

Here's the cert petition, filed last week, in a case we've posted about. See here (Ninth Circuit arguments) and here (en banc petition).

The Ninth Circuit affirmed dismissal of a takings claim because (it held) the claim isn't ripe. The government hasn't made up its mind, and just might allow the owners to make some use of their residentially-zoned land (even though the property is also subject to an overlay zone that expressly prohibits residential development). More background here. 

This is one of ours, so we're not going to be saying too much more about it. The petition also lays out the situation.

Here are the Questions Presented:

Randy Ralston and Linda Mendiola (Ralstons) wish to build a retirement home on their residentially-zoned land in San Mateo County, California. However, their property sits entirely within an overlay zone, the Montecito Riparian Corridor (Corridor), which categorically bans residential development. The County nonetheless instructs landowners who wish to build a home to submit their “intention” to the Community Development (Planning) Director and County Counsel, who must undertake a “takings analysis” to decide whether to “override” the Corridor’s absolute ban to prevent a taking. When the Ralstons followed this procedure, the Planning Director and County Counsel responded that there was no justification “to override the Local Coastal Plan limitations on development within wetland and riparian areas in order to accommodate a reasonable economic use.” No procedure exists to challenge this decision. In short, the answer was an unambiguous and unappealable “no.” The Ninth Circuit held that the Planning Director and County Counsel’s response, though they were speaking for the County, was “informal,” and that the Ralstons’ takings claim is ripe only if they submit—and the County formally denies—a Coastal Development Permit application.

The questions presented are:

1. Is a takings claim ripe when the government establishes a mandatory process requiring property owners to ask whether any development on their land is possible, and responds with a definitive and unappealable denial?

2. Are takings complaints subject to a higher pleading standard than other civil rights complaints?

Stay tuned.

Petition for Writ of Certiorari, Ralston v. County of San Mateo, No. ____ (U.S. June 16, 2023)

Join Us August 9, 2023: ALI-CLE's "How Did Property Rights Fare at the Supreme Court? What Happened in the 2022 Term and What's Next"

On Wednesday, August 9, 2023 at 1:00 - 2:00 p.m. (Eastern Time), please join us for ALI-CLE's web program, "How Did Property Rights Fare at the Supreme Court? What Happened in the 2022 Term and What's Next."

Here's the course description:

This has been a blockbuster U.S. Supreme Court term for property law, with the Court deciding three major property cases: Tyler v. Hennepin County (government’s keeping the excess value when seizing and selling a home to satisfy a property tax debt is a taking), Wilkins v. United States (is the federal Quiet Title Act’s statute of limitations a jurisdictional bar?), and Sackett v. EPA (the scope of Clean Water Act wetlands jurisdiction). To gain a better understanding these opinions, the current state of takings and property law, and what these cases mean for your practice, join a distinguished panel of experts for this one-hour webcast. The faculty will also explore what these decisions mean for the future and what steps lawyers can take to incorporate these decisions into their practices.

Among the things we'll be analyzing and discussing:

• What happened in each case and how the Court ruled
• The practical consequences of the decisions
• What new rules practitioners must understand
• What Sackett means for the efforts to define “Waters of the United States”
• How courts will treat the question of “what is the property” in takings and eminent domain litigation
• How you can avoid statute of limitations problems
• Where the Supreme Court might be going next and what issues remain open

I'll be moderating, and joining me will be takings and property experts lawprof Emilio Longoria, and Sophia Holley (Keating Muething & Klekamp).

We will also have a preview of the 2024 Eminent Domain and Land Valuation Litigation Conference, February 1-3, 2024, New Orleans.

Come, join us. The format allows for a lot of questions, interaction, and open discussion. As usual, there are group discounts.

Tuesday Round-Up: Sackett, Tyler, Defending Zoning, Canada Property Rights ... And More

Here's what we're reading this Tuesday:

• Tiffany Lashmet's Ag Law in the Field podcast: "Episode #155: Jesse Richardson and Anthony Schutz (Sackett v. EPA)"
• Lawprof Ilya Somin, Brennan Center for Justice: "Supreme Court Strengthens Federal Protection for Property Rights"
• Also from Prof Somin, Volokh Conspiracy: "A Flawed Attempt at a Libertarian Defense of Exclusionary Zoning"
• Here's the piece Prof Somin is responding to - Robert Poole, "A Brief History of Single-Family Zoning"
• Professor Malcolm Lavoie, SSRN, "Property Rights, Takings, and the Rule of Law: Assessing Annapolis Group v. Halifax Regional Municipality" (assessing the Supreme Court of Canada's latest ruling on property rights)
• Note, "The Contract Clause: Reawakened in the Age of COVID-19," 136 Harv. L. Rev. 2130 (2023)
• Lawprof Ilan Wurman, "Reconstructing Reconstruction-Era Rights," 109 Va. L. Rev. 885 (2023)

Worth checking out.

ICYMI: "Property Rights Hat-Trick: Breaking Down PLF's Supreme Court Victories" (vid)

Missed our law firm colleagues Jeff McCoy, Damien Schiff, and Christina Martin when they were live, talking about their SCOTUS wins in Wilkins v. United States (is the statute of limitations in federal Quiet Title Act cases a jurisdictional bar?), Sackett v. E.P.A. (scope of Clean Water Act wetlands jurisdiction), and Tyler v. Hennepin County (government’s keeping the excess value when seizing and selling a home to satisfy a property tax debt is a taking)?

We recorded it, so you can watch and listen at your leisure.

This is more than just a victory lap, the advocates offer their thoughts on the implications of the wins, and what might be next.

Bon appétit.

Iowa: City Of The Monks Keeping Part Of Your Tax Refund Isn't A Taking, Red-Light Runners

In Livingood v. City of Des Moines, No. 22-0586 (June 9, 2023), the Iowa Supreme Court held that the city's use of the Iowa's process by which the government can satisfy all or part of a taxpayer's debt to a public agency by grabbing someone's tax refund. In a nutshell, after trying to collect the debt by more conventional means:

the income offset program allows the department of administrative services to collect debts for public agencies by offsetting the debts against any income tax refund owed to a taxpayer. The city entered into a memorandum of understanding with the department of administrative services to use the income offset program.

Slip op. at 4-5.

The debt owed in Livingood is for traffic violations caught on camera.

Is it a taking under the Iowa Constitution to not give the taxpayer/cam-violator the full amount of tax refund?

No. First, the court held that someone's income tax refund is "property" protected from uncompensated takings. So far so good for the plaintiffs. But the court held that this isn't a taking, because money property claims are treated differently under the takings clause. For that proposition, the court relied almost exclusively on authority interpreting the U.S. Constitution. And here, the city isn't taking property for a public use, and is not requiring the plaintiffs to bear a burden that should be borne by the public as a whole.

Because they are traffic violators, and the city has the power to impose a fee for driving badly and violating the law, and in keeping tax refunds it is merely collecting what's owed for the penalty. Thus, "[t]he government's collection of money for the payment of fines in the exercise of its police power is not a 'taking' for 'public use' and does not implicate the takings clause." Slip op. at 12.

Livingood v. City of Des Moines, No 22-0586 (Iowa, June 9, 2023)

CA1: Despite Two Variance Denials, Takings Case Not Ripe Because It Isn't Futile To Try Again

Here's the latest from the U.S. Court of Appeals for the First Circuit on takings ripeness, Haney v. Town of Mashpee, No. 22-1446 (June 6, 2023). 

The case centers on Gooseberry Island, Massachusetts, which is zoned by the Town of Mashpee as R-3. But under the Town's zoning code, any residence must have at least 150 feet of frontage and a paved access roadway within 150 feet.

Which is problematic because Gooseberry Island is, well, an island -- separated from the mainland by a 40 to 80 foot channel depending on the tides. There's no bridge, although you can wade across the channel at low tide. No bridge means no roads, and no roads means no residential development.

So the owner sought variances from the frontage and roadway requirements in 2013. Denied. The road and frontage requirements are about emergency access. Next, the owner sought approvals to build a bridge. If emergency vehicles can get to the island, then maybe we can build roads, and home. The owner proposed a wood bridge, which was opposed by the Mashpee Wampanoag Tribe, which holds a shellfish grant from the Town in the adjacent water. The Tribe claimed a bridge would adversely impact the shellfish habitat. Consequently, the bridge proposal was rejected the Town under state and municipal environmental law.

The owner sought review by the Massachusetts Department of Environmental Protection. Also denied, because 17 square feet of salt marsh would be destroyed by the bridge piles, and because the bridge itself would cast shade on shellfish. The owner appealed up the state's administrative chain, and in the interim revised its proposal to make it a steel bridge, which would not require pilings and would not cast as much shade.

That change seemed at first to have the desired effect, because the DEP told the owner that a steel bridge was entitled to approval under state environmental law. In light of that, the state appeal office -- which was considering the administrative appeal -- stated that the appeal should be granted. But the Town opposed the change, asserting that the switch from wood to steel was not authorized in accordance with the change rules. When the state appeal office issued its final decision, it was not good news for the owner: steel bridge denied, because the change didn't conform to the requirement that any plan changes are not substantially different than the original proposal.

The office of appeals concluded that if the owner wanted the state to review a bridge proposal, it would have to resubmit a new steel bridge proposal. The owner appealed to the state court of appeals, which only recently affirmed. Haney v. Dep't of Env't Prot., 173 N.E.3d 55 (Mass. App. Ct. 2021).

Undaunted, the owner set the wheels in motion again. It applied to the Town for another variance from the frontage and road requirement. "In an effort to address the perceived reason behind the Board's denial of the 2013 Variance Applications [emergency vehicle access], the Trust provided the Board with a '2014 plan depict[ing] a bridge and Gooseberry Island." Slip op. at 7.

Unanimously denied, because "the bridge needs to be approved prior to building on the lot." Slip op. at 7. At that time, the state's decision on a bridge was still in-process It would not be resolved by the court of appeals until a few years later). The owner suggested that a conditional variance would be ok: how about approving the variance, conditioned on the state's later approval of a bridge? Nope, variance denied.

Federal court takings lawsuit followed. As did the government's 12(b)(6) motion to dismiss, which the district court granted. The takings claim was not ripe "because the Trust never applied to build a steel bridge." Slip op. at 9. The owner could have (and thus should have) "followed through with the filing of a New Notice of Intent with the [state] for construction of a steel bridge, even though[it] 'expressed support for this proposal.'" Slip op. at 10. The state might just grant that application, and "pursing the steel-bridge proposal would not be futile." Id.

The First Circuit affirmed because there hasn't been a final no. Those two variance denials? Not enough. The court rejected the owner's argument that it couldn't get approval from the state for a bridge without already having a variance from the Town already in hand. According to the opinion, the owner didn't need a variance from the Town in order to apply for permission to build a bridge from the state, so that issue was irrelevant. Slip op. at 13. 

The court also rejected the owner's assertion that the Town strayed outside its jurisdiction when it considered whether to condition a variance on a bridge. The Town can issue permits with conditions generally, and here, "the Board never determined whether that permit should or should not issue." Slip op. at 14. 

And what about the owner's main argument, that the Town actually denied the two requests for a variance? The Town didn't exactly condition a variance on the owner building a bridge, it's only that some of the Town Board members mentioned it. Or so argued the owner. The Town's actual decisions, according to the owner, were clear denials. Not quite, the court concluded. And here's where it seems to get a bit ack-basswards. The court concluded the Board member's statements "constitute the reasons for its decision." Slip op. at 15.

We thus see no support for the contention that we must disregard the statements made by the Board members as recorded in the 2018 Variance Decisions, at least when such statements are plausibly related to the concluding explanation given by the Board for denying the variances.

Slip op. at 16. The court concluded that the owner's argument was "underdeveloped" and thus waived.But is ripeness concerned with the why of the denial, or just that you get a denial? What's the deal with the reasons?

The court next noted that "Haney offers no argument as to why the denial of the 2018 Variance Applications should be interpreted as with prejudice." Slip op. at 15. The written denial "fails to specify whether the denials were with or without prejudice[.]" Wait, what? What's this prejudice thing? The Supreme Court only requires a decision, not an unequivocal no and an expression that the government won't consider you again, property owner. And remember that Pakdel only requires "de facto" finality, not more.

Finally, the First Circuit rejected the owner's argument that to chase more would be futile:

This futility exception -- which has been part of our caselaw for three decades -- was recently endorsed by the Supreme Court in Pakdel. 141 S. Ct. at 2230. In addressing the state-forum finality requirement, the Court held that a landowner only needs to show "that there is no question about how the regulations at issue apply to the particular land in question." Id. (cleaned up). The finality requirement is therefore met once it is clear to the federal courts that the initial decisionmaker has reached a "definitive position on the issue." Id. at 2230 (quoting Williamson Cnty. Reg'l Plan. Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172, 193 (1985)).

Through Pakdel, our caselaw's futility exception is now simply part and parcel of the finality requirement.

Slip op. at 17-18. Here, the Town "Board has never represented that it would deny any and all variance applications -- even if the [owner] presented applications accompanied by an approved steel-bridge plan." Slip op. at 19.

So go get a steel bridge approved, property owner. And with that, come back to the Town and submit a third application for a variance. Who knows, maybe the Town just might grant that one.  

Haney v. Town of Mashpee, No. 22-1446 (1st Cir. June 6, 2023)

Another Cert Petition Challenging NY's Draconian Rent Control As A Taking

Here's the latest in a case we've been following, one of the multiple challenges to New York's latest ratcheting up of rent control.

We think the Questions Presented spell out the issues pretty well:

New York has implemented the most sweeping and onerous rent control provisions the United States has ever seen in its Rent Stabilization Laws and accompanying regulations (“the RSL”). As recently amended, the RSL makes New York’s once “temporary” rent stabilization regime permanent for over one million apartments. Petitioners are owners of apartment buildings regulated by the RSL. The RSL expropriates a definitional feature of Petitioners’ real property—the right to exclude—by granting their tenants a perpetual right to renew their leases. The RSL closes off all viable exit options for Petitioners to change the use of their property and thus avoid RSL regulation. These provisions, when combined with the RSL’s ceiling on the rents that landlords can collect, have ensured that Petitioners cannot earn a just and reasonable rate of return. The RSL has dramatically reduced the economic value of Petitioners’ property beyond any reasonable expectation. Nevertheless, the Second Circuit held the RSL did not effect any taking of Petitioners’ property without just compensation.

The questions presented are:

(1) Does the RSL effect a per se physical taking by expropriating Petitioners’ right to exclude?

(2) Does the RSL effect a confiscatory taking by depriving Petitioners of a just and reasonable return?

(3) Does the RSL effect a regulatory taking as an unconstitutional use restriction of Petitioners’ property?

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

Petition for a Writ of Certiorari, 335-7 LLC v. City of New York, No. 22-1170 (U.S. May 30, 2023) by RHT on Scribd

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

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

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

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

Here is the Question Presented:

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

The question presented is:

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

Stay tuned, as always.

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

Tyler Takings Round-Up

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

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

We'll update as merited.

Rethinking Penn Central: A Call For Symposium Papers

If you know, you know.

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

Here's some of the suggested topics:

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

More details here.

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

Check it out, and submit!

Rethinking Penn Central Symposium Call for Papers

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

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

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

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

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

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

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

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

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

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

More to come as the analysis and commentary rolls in.

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

Iowa Trial Court: Pipeline Precondemnation Entry Statute Is Facially Unconstitutional

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

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

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

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

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

Opn. at 3.

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

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

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

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

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

Opn. at 10.

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

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

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

Opn. at 12.

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

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

Opn. at 16 (footnote omitted).

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

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

All we can say is wow.

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

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

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

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

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

Pet. at 2-3.

Here are the Questions Presented:

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

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

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

Stay tuned.

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

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

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

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

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

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

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

Slip op. at 2.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here are the Questions Presented:

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

The questions presented are:

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

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

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

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

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

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

Here's the abstract:

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

Download the pdf here.

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

Shands Key, with the City of Marathon in the background

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

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

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

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

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

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

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

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

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

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

New L Rev Article: "Property against Legality: Takings after Cedar Point (Huq)

Check this out, a recently-published article in the Virginia Law Review, Aziz Z. Huq, "Property against Legality: Takings after Cedar Point," 109 Va. L. Rev. 233 (Apr. 10, 2023).

Here's the abstract:

In the American constitutional tradition, a zealous judicial defense of property is closely aligned with the idea of “the rule of law.” Conventional wisdom holds that the Takings Clause of the Fifth Amendment vindicates both property rights and the rule of law by foreclosing arbitrary, lawless state action. But the standard story linking property rights, legality, and a constraint on arbitrary governance is more commonly stipulated than analyzed. This Article uses an apparent sharp break in takings jurisprudence, the United States Supreme Court’s June 2021 decision in Cedar Point Nursery v. Hassid, to closely scrutinize the relationship between legality and property rights. To that end, it offers first a careful analysis of the sharp rupture that Cedar Point makes in takings jurisprudence. Not only is the Court’s result difficult to explain in terms of precedent or traditional legal methods, it also destabilizes a previously settled and reasonably predictable litigation landscape. As a result, it seeds profound uncertainty on the legal ground because it signals a dissolution of the constraining effect formerly realized by standard tools of legal reasoning. There is, further, no obvious way for the Court to restore stability and predictability to the doctrine without drawing new, arbitrary lines. In consequence, takings law will likely abide in confusion, not certainty, for the foreseeable future. Cedar Point’s vindication of property rights hence comes at the paradoxical cost of dramatically increasing the space for decisions unguided by law by one group of officials in the judiciary.

A close reading of Cedar Point invites a more general and abstract analysis of the complex, nuanced relationship between the rule of law and property rights. Drawing on the general jurisprudential theories of H.L.A. Hart and other legal positivists, I use the decision as a launching point for a larger exploration of ways in which the rule of law can be incompletely realized to paradoxical and even socially harmful effect. Placing property at the center of the rule of law, I suggest, can be consistent with, or even an incitement to, serious derogation of the rule of law. Doing so can undermine rule-of-law goals, such as constraining arbitrary rule. This suggests a need to decenter property rights in accounts of the rule of law, and to explore, in more nuanced and grounded fashion, how the practice of judicial review mediates systemic values of legality and predictability. In short, if we value the rule of law, it may in general be appropriate to take a more skeptical, and so more contingent, view of both property as a legal institution, and also the courts as a source of legality and stability.

Download the pdf here.

New Cert Petition: Is Barring You From Accessing Your Own Property A Categorical Taking?

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

This is the one where a North Carolina county went bonkers in the early days of Co-19, and truly "locked down" by banning nonresident property owners from entering the county. This wasn't done all at once, but in phases, with nonresident property owners being informed that if they didn't get to their Dare County homes by March 20, they were going to be prohibited from even entering the county. As the Fourth Circuit put it, "In effect, Dare County told non-resident property owners:'“If you want to quarantine at your beach house, get there by March 20.' This gave non-resident property owners four days to travel to the county."

Blackburn was stopped from accessing his property for 45 days.

The Fourth Circuit upheld the district court's rejection of his takings claim, concluding that this was not a physical invasion or occupation ("But temporarily excluding an owner from their own property differs from eliminating the owner’s right to exclude."), nor was it a total or near-total deprivation of the property's beneficial uses. 

The owner has now sought Supreme Court review.

Here's the Question Presented:

Whether a governmental regulation prohibiting all physical access to a landowner’s property is a “per se” taking under the Fifth Amendment of the United States Constitution.

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

Petition for a Writ of Certiorari, Blackburn v. Dare County, No. 22-1048 (U.S. Apr. 25, 2023)

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

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

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

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

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

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

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

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

Slip op. at 10.

Check it out if you're interested.

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

Tyler SCOTUS Takings Argument Round-Up

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

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

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

More on the way. Stay tuned.

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

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

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

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

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