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New Report: "How to Protect Property Rights from Improperly Assessed Exactions" (Sweetland & Hodges)

Check out the new report by our Pacific Legal Foundation colleagues Kyle Sweetland and Brian Hodges, "How to Protect Property Rights from Improperly Assessed Exactions" (Apr. 2025).

This research in brief shows how exactions grew and increased home construction costs over a 16-year period. It provides a history of exactions, showing how they have frequently moved away from their original impact-mitigation purpose and how that shift in purpose risks violating the Constitution. It illustrates an improperly assessed exaction and provides examples of how exactions have hampered construction during the present housing crisis. It concludes by examining how state legislatures can help set boundaries on local exactions and protect property rights.

It's short, its sweet, it's straightforward and understandable. What more could you want? Oh yeah, unlike exactions ... it's free. No strings attached. Check it out.

Sweetland & Hodges, How to Protect Property Rights from Improperly Assessed Exactions (Pac. Legal Found. Ap...

CA6: Property Owner Needs To Exhaust State Remedies Before Filing Takings Claim

Check out the U.S. Court of Appeals for the Sixth Circuit's opinion in Howard v. Macomb County, No. 24-1655 (Mar. 28, 2025).

This is one of those post-Tyler cases asking whether the government satisfies the Fifth Amendment after it has taken someone's home equity by satisfying the owner's tax debt and then keeping the excess. Hold on, didn't the unanimous Supreme Court in Tyler say no, that violates the Takings Clause?

Well yes. You remember the "render unto Caesar" thing, and the "bank robber giving back the money" thing. So there's a taking without compensation -- and thus a violation of the Takings Clause -- the moment the government keeps what it is not supposed to keep. But Tyler also referred to an earlier case, Nelson v. City of New York, 352 U.S. 103 (1956), which has been read to get the government off the hook if it has made available a way for the owner to get their property back. 

In Howard, the Sixth Circuit held that because Michigan has adopted a statute whereby owners whose equity has been taken may get that money back, there's no claim for a taking as a matter of law. That's good enough to avoid the violation of the Constitution. It doesn't matter whether the post-taking procedure is clear enough that owners can navigate it, or whether they do. It's there, owners, and it's up to you to go get your money back. 

The Howard opinion doesn't use the word "exhaustion." Nor does it mention administrative remedies. So how can we write in this post's headline that the Sixth Circuit has required home equity theft takings plaintiffs to exhaust administrative remedies, and that they do not have a claim under the Takings Clause until they seek statutory relief, and are denied? In our view, that is exactly what the Sixth Circuit is requiring.

But didn't Knick v. Township of Scott, 588 U.S. 180 (2019) conclude that the cases which seem to say that the availability of post-taking compensation is "too broad" a reading, and that "[s]imply because the property owner was not entitled to injunctive relief at the time of the taking does not mean there was no violation of the Takings Clause at that time[?]" That's how we read Knick, as does the Tenth Circuit in this recent case. 

The Sixth Circuit tried to distinguish Knick by concluding there's no taking if the state makes available a post-taking remedy:

Howard resists this conclusion, first by contending that precedent allows her to recover directly from the county under the Takings Clause as opposed to collecting it under the Michigan law. Under Knick v. Township of Scott, 588 U.S. 180 (2019), as Howard reads it, she has no obligation to satisfy the requirements of the Michigan procedure. Knick, it is true, held that, when a State takes a citizen’s property, she may file a claim for just compensation under 42 U.S.C. § 1983 without exhausting her right to seek compensation under state law. Id. at 191. But unlike the state laws at issue in Knick, Michigan’s procedures for collecting the surplus do not compensate the property owner for a taking. They prevent a taking from happening in the first place. A county that allows property owners to obtain any surplus after a foreclosure and keeps the residual only if the owners do not seek it does not commit a taking. See Nelson, 352 U.S. at 110; see also Tyler, 598 U.S. at 644. Had Howard followed the Act’s procedures for claiming the surplus, only to be denied it, then she could immediately bring a takings claim under § 1983. That is all that Knick guarantees.

Howard separately claims that Knick cut back on Nelson. But, as shown, the two cases address distinct issues. Nelson addressed whether state action caused a taking. Knick addressed the available remedies after a taking occurs. That explains why Knick never mentions Nelson. And it explains why Tyler relied on Nelson in explaining how to determine the existence of a taking. See Tyler, 598 U.S. at 643–45.

Slip op. at 8.

We thought property owners could advance directly to "Go" and bring a federal compensation claim under section 1983 after Knick? That they didn't have to chase state law procedures for obtaining compensation. Or was that only for when there's a judicially-recognized remedy to obtain just compensation, as in Williamson County? Does it make a difference that here, the post-taking compensation state law remedy is statutory? No difference we can discern.

Williamson County is apparently alive and well in the Sixth Circuit. Stay tuned.

Howard v. Macomb County, No. 24-1655 (6th Cir. Mar. 28, 2025)

Deer Me! No Property Interest In Deer, Even If You Possess Them

The question in today's case is an old one: can you own wild animals?

In Texas Parks & Wildlife Dep't v. RW Trophy Ranch, Ltd., No. 15-24-00112-CV (Apr. 10, 2025), the Texas Court of Appeals said no. At least not when that wild animal is a white-tailed deer.

Here are the facts. Generally, you can't possess a white tailed deer in Texas. (We bet you can hunt 'em. But you can't, like, domesticate them.) But there are exceptions to that general rule. One of these exceptions allows you to obtain a breeder permit, by which you can keep breeder deer in captivity for propagation purposes. The Ranch is such a deer breeding facility.

But white-tailed deer in Texas -- and elsewhere -- are susceptible to a disease that sounds truly horrible: Chronic Wasting Disease, "a type of transmissible spongiform encephalopathy[.]" Slip op. at 2. One of the ways to control the disease is "depopulation" of (aka killing) the entire herd. 

The Department first detected CWD in one of the Ranch's breeder deer in 2021, leading to a series of moves and countermoves by the Department and the Ranch. The Department apparently offered several ways to control the spread of CWD that did not involve the more drastic depopulation, but each time the Ranch said no. But this approach changed when the Department alleged that the mortality rate was increasing.

Next up was a notification from the Department that the Ranch's deer had to go. "In early 2022, the Department notified Williams that it would 'euthanize and initiate postmortem disease testing of all the deer' in his breeding facility[.]" Slip op. at 3-4. The Ranch at the same time was getting a TRO in state court preventing depopulation. To kill "our" deer would be a taking of private property was one of the reasons advanced in support. 

Barista's note: when the court writes "[t]he next month saw a flurry of filings[,]" slip op. at 4, you know there's got to have been a lot of moves and countermoves. Read pages 4 and 5 for more details. Lots of filings. The sum of which, we gather, were competing views of the facts: the Ranch saying the deer "were in exceptional shape," that the increasing numbers of dead and dying deer were due to a different deer diseases (the equally horrific-sounding "Epizootic Hemorrhagic Disease"), and that deer were dying with, and not of, CWD. The Department, not surprisingly, saw it entirely differently. This was a crisis, they needed to put down the Ranch's deer to stop the spread, and all the things you would expect from your knowledge of the famous cedar rust case.

And we cannot resist this summation of the Department's position, as quoted in the opinion:

“Well, regardless of what you call the disease, it’s a TSE and it’s having impacts on the deer and the deer herd…. You could call it snuffleupagus disease if you want to, but it’s still having an effect on those deer.”

Slip op. at 6.

In the end, the courts came down on the side of the Department, and depopulation of the Ranch's white-tail deer. Deer me!

The court of appeals affirmed. Skip forward to page 11 for the stuff where the court analyzed whether the Ranch possesses a property right (triggering due process and takings protections). Although the court phrased this as a "vested rights" analysis, to us it sounds more like a question of what is and isn't property.

The court started with the proposition that wild animals are incapable of private ownership:

In Texas, all wild animals—including white-tailed deer—belong to the state, as trustee for the people. It is illegal to possess them “for any purpose not authorized by” the Parks and Wildlife Code. That code authorizes a person to hold live deer captive for only two purposes: breeding and management. Our concern here is with breeding.

Slip op. at 12 (footnotes omitted). Yes, the Department can issue licenses to keep and possess deer for breeding purposes, but this isn't some kind of entitlement and thus isn't property. This is a "privilege of possession and breeding deer in captivity only pursuant to a permit issued by the Department[.]" Slip op. at 14. Thus, "[a]ny interest Williams claims in his breeder deer is subordinate to the Legislature's right to amend the laws governing deer breeding, or to abolish the interest altogether. This is precisely the type of interest that is not vested." Slip op. at 15.

The court rejected the Ranch's arguments that it had a common law right property interest in keeping and possessing the deer. No, sorry, the Legislature has completely preempted the field: "William’s theory that deer breeders have a vested property interest in breeder deer under some common-law authority running parallel to, but not inconsistent with, Subchapter L is incompatible with the Legislative scheme completely regulating deer breeding. Slip op. at 16.

The court also rejected the Ranch's Penn Central takings claim, first noting that it had "a difficult time understanding how euthanizing breeder deer represents a restriction on the use of Williams's land." Slip op. at 22 (footnote omitted). It also wasn't a taking of the Ranch's permit rights, because it can still possess and keep deer (just not CWD deer). Added, up, "the Department's depopulation efforts did not go 'too far' so as to rise to a regulatory taking." Slip op. at 23 (footnote omitted).

Agree or disagree with the outcome and the analysis, this one is a fascinating read. Check it out.

Texas Parks & Wildlife Dep't v. RW Trophy Ranch, Ltd., No. 15-24-00112-CV (Tex. Ct. App. Apr. 10, 2025)

CA10: Takings Clause Means Never Having To Administratively Ask To Get Your Property Back

Check out the U.S. Court of Appeals for the Tenth Circuit's recent opinion in Knellinger v. Young, No. 23-1018 (Apr. 11, 2025). 

It's worth reading because the court doesn't fall into the common trap of concluding that although an owner need not exhaust administrative remedies before asserting a takings claim, he nonetheless doesn't have "private property" because ... he hasn't exhausted administrative remedies to get his property returned. As the court summed it up:

[The owners] ... argu[e] that they alleged facts sufficient to state a claim that Colorado took their property for public use without just compensation. We agree. Property owners who plausibly allege that Colorado has taken custody of their property under RUUPA, and used it for public purposes, need not file administrative claims with Colorado before they may sue for just compensation. The moment a state takes private property for public use without just compensation, a property owner has an actionable claim under the Takings Clause.

Slip op. at 2.

This is a challenge to Colorado's version of the Uniform Unclaimed Property Act. That's the statute by which the government presumes that "certain property has been abandoned after a period of time defined by statute." Slip op. at 3. Once property is abandoned, whoever holds the property reports and delivers it to the government. The state Treasurer holds the property for the benefit of the owner, and the owner may recover the property by filing an administrative claim, and if that is unsatisfactory, may sue in a Colorado court. 

The Treasurer must take steps to notify the owner by email (how modern) if the Treasurer has the owner's address. But if none, all that is required is posting on the state's unclaimed property website (check it out, maybe you could be a class member).

The plaintiffs here checked the website and noted that Colorado was holding what are fairly small amounts of money (less than $250). Next stop, federal court:

Knellinger and Storey did not file administrative claims, nor did they file a suit in Denver County Court as authorized by RUUPA. Instead, Plaintiffs sued in federal district court. As relevant here, Knellinger and Storey brought a claim under 42 U.S.C. § 1983, alleging that Colorado’s unclaimed property scheme violated the Takings Clause of the Fifth Amendment, as applied to the States through the Fourteenth Amendment. They filed suit against the officials in charge of administering RUUPA: David Young (the Colorado State Treasurer) and Bianca Gardelli (the Director of the Unclaimed Property Division of the Treasury) in their individual and official capacities (collectively, “Defendants”). Knellinger and Storey alleged that Defendants had “taken control of and liquidated” their property and “converted [it] to public use” without “just compensation.” App’x at 34. They sought a monetary remedy of “restitution of the proper value of their property . . . according to the applicable principles of law for reimbursement purposes”—that is, “just compensation.” Id. at 34–35. They also sought to enjoin Defendants from violating the Takings Clause in the future.

Slip op. at 5-6. The complaint also alleged that instead of keeping these funds for the benefits of the owners and segregating the monies, the state put some of the funds to public uses (funding the Colorado State Fair, surely a public use), and commingled some of the funds with the state's general fund. 

The district court dismissed for lack of standing. It concluded that the plaintiffs lack standing because they do not own "private property."

Hang on...didn't the state's website say that the Treasurer was holding on to the plaintiffs' property? Yes, but the plaintiffs had not filed an administrative claim to the money, which is necessary in order to establish their ownership. Slip op. at 7. No private property, means no injury, means no jurisdiction.

The Tenth Circuit reversed. It first noted that the jurisdictional facts are "intertwined with the merits of the case[.]" Slip op. at 9. Here, "the merits question and the jurisdictional question entirely overlap[.]" Slip op. at 10. Thus, the court opted to treat the 12(b)(1) motion as a 12(b)(6) motion to dismiss for failure to state a claim.

On that, the complaint pleaded a plausible takings claim. Write this down:

In short, to make out a Takings Clause claim, a plaintiff must plead that: (1) something was “taken” by the government; (2) it was “property”; (3) it was the plaintiff’s property; and (4) it was taken “for public use, without just compensation.” Plaintiffs pleaded facts sufficient to make plausible each of these elements. Therefore, they sufficiently stated a Takings Clause claim.

Slip op. at 13.

We advise writing this down even though the court's approach should be obvious (it tracks the text of the Fifth Amendment) because many courts don't get this. You have to plead one of the takings theories (e.g., Lucas, Penn Central) in detail to state a takings claim, not just the elements above. We also are keeping this one because it recognizes that the state cannot 100% define or put major limits on the term "private property" (the essential holding of Tyler v. Hennepin County, 598 U.S. 631 (2023)). 

The Tenth Circuit rejected the district court's backdoor exhaustion requirement (the plaintiffs don't have property until Colorado's admin process confirms they have property).

Second, the district court imposed a de facto requirement that a plaintiff must file an administrative claim with Colorado prior to proceeding in federal court. See id. However, under Knick, it is clear that a property owner has no obligation to seek a remedy through state administrative proceedings or through litigation in state court. 588 U.S. at 185. A property owner’s “right to full compensation” is not contingent on “post-taking remedies that may be available.” Id. at 190. Rather, that right vests “when the government takes his property without just compensation.” Id. at 185. That is true even if an administrative proceeding—or state court discovery—could yield additional facts helpful to a federal Takings Clause suit

Slip op. at 15. (footnote omitted).

Not so, held the Tenth Circuit. All reasonable inferences cut in the plaintiffs' favor, and it is reasonable to infer that the names on the website refer to the plaintiffs. Same with the lack of a claim of value: "[n]or is it necessary for Plaintiffs to plead the precise value of the property taken in order to avoid a motion to dismiss. That is a question of precise damages for a much later stage." Slip op. at 16.

We think the Tenth Circuit got it very very right here. The pleadings are not the place to resolve what essentially are factual disputes. Plausibility and Twiqbal and all that, but we still operate under Rule 8's notice pleading standards, and takings plaintiffs do not have to plead their claims or the facts supporting them with particularity. Nor are they reliant on the very process they are challenging to define their "private property" interests.

One remedy note: the Tenth Circuit affirmed the dismissal of the prospective injunctive relief sought because "[i]n this instance, § 1983 provides an adequate basis for [plaintiffs] to obtain just compensation for a taking." Slip op. at 17.

Finally, the court noted an important point:

Of course, if Colorado wishes to avoid defending against § 1983 suits for unclaimed property, it may always decide voluntarily to revise its laws or practices with respect to unclaimed property. For instance, Colorado may implement administrative procedures designed to make just compensation more convenient or timely compared to inverse-condemnation litigation. But the Fifth Amendment describes a right to just compensation, not a right to particular procedures to secure such compensation, so Knellinger and Storey have no ability to force Colorado to compensate property owners through their procedure of choice. In other words, it is the role of our Court to ensure just compensation, not to rewrite a state’s procedures for obtaining it.

Slip op. at 17.

Knellinger v. Young, No. 23-1018 (10th Cir. Apr. 11, 2025)

Tex App Dismisses Penn Central Claim - But What's It Doing Weighing The Facts?

These days, when we have cases where there's tinkering with the terms of rental agreements, we most often see local governments using their police power to force property owners to rent their properties on a long-term (more than 30 days) basis.

But in Bigelow Arizona TX-344, LP v. Town of Addison, No. 05-23-00642-CV (Apr. 4, 2025), the Texas Court of Appeals was dealing with a town ordinance that went the other way: it redefined the definition of "hotel," which had the effect of prohibiting an extended-stay hotel from continuing to rent 95% of its rooms on a long-term basis under a nearly 30-year old special use permit, and forced what had been long term stays to become short-term stays.

Why? The town's "desire for motels and hotels to operate so that rooms are available for the Town's tourists[.]" Slip op. at 3. Really? Read a bit further and you see what was likely the real reason -- taxes. "[T]he amendment provided for hotel/motel maximum exemptions from the payment of hotel occupancy tax, exempting not more than thirty percent of rooms subject to a room night exemption for pay the payment of hotel occupancy tax." Id. (footnote omitted). After the definition change, the town notified the hotel that it was now a non-conforming use. And you know what that means. 

Next up, the hotel operator sues for a taking under both the Texas and U.S. Constitutions. Next up after that, the Town filed a plea to the court's jurisdiction, and the trial court agreed. As best we can tell, this thing called a plea in jurisdiction is kinda like a motion to dismiss, sort of like a motion to dismiss for lack of jurisdiction, but not quite because a plea can challenge jurisdictional facts. So to us -- not a Texas lawyer by any stretch -- this looks like a dismissal for failure to state a claim, with a little extra oomph because unlike federal court 12(b)(6) motions, the court here looks at the facts "mirror[ing] that of a traditional summary-judgment motion." Slip op. at 4. 

The court of appeals held that the complaint did not plead enough facts to show a regulatory taking. The complaint advanced a Penn Central argument, and the court weighed the factors and concluded that the plaintiff had not asserted sufficient facts to show there's a claim:

• Economic impact: "Here, Bigelow did not plead and provided no evidence that the value of its property has diminished since the Town passed the 2019 Ordinance." Slip op. at 8. The court also rejected the owner's assertion that it would have to turn away at least 65% of its customary long-term residents. The court held that this was another way of claiming lost profits, and the lost-profits claim is "entirely speculative" Who knows, maybe it could fill those vacancies with others? Rent em to short termers. The court concluded "we conclude this factor weights against a finding that the HOT Ordinance constitutes a taking." Slip op. at 10.
• Investment-backed expectations: Looking at the plaintiff's expectations "at the time it purchased the property," the court rejected the argument that the 25 years of long-term use under the special permit, because only the expectations at the time of purchase are relevant. Slip op. at 11. To make it worse, the court reviewed the facts and concluded that the hotel/motel use allowed by the special use permit "did not allow for the housing of permanent residents." Slip op. at 14. Hotel use implies "temporary" and "transient," and does not allow longer term uses; anyone staying longer than 30 days becomes a "permanent resident." Slip op. at 15.
• Character: The court began by noting "[t]he final factor requires us to consider the character of the government's action." Slip op. at 16. The court rejected the owner's argument that the town had it out for the long-term hotel, holding that the town's efforts to enforce its laws "cannot, as a matter of law, take 'unfair advantage' of the violating party." Slip op. at 20. 

We're not really going to take a lot of time quibbling about whether the court's weighing and consideration of the factors is right. Instead, we're going to ask: what was it doing weighing anything at the pleadings stage. Yeah, we get that Texas has this "plea" procedure which seems to allow a court to take a more active hand in actually deciding disputed issues. Isn't that a task for the trier of fact later in the case?

We get that the court doesn't believe the complaint's allegations. It may conclude the town has the better case. But we thought that was irrelevant at the pleadings stage. But wait, you say, your read of what the court did was look at the factual allegations and conclude that even if everything the complaint says is true, the law says "so what?" You can't get profits as a matter of law, that special permit didn't mean what the owner thought it meant as a matter of law. Any efforts to enforce the zoning ordinance as the town interprets it is a "character" safe harbor as a matter of law.

And here we thought that the U.S. Supreme Court has counseled against imposing categorical rules in takings.

Bigelow Arizona TX-344, LP v. Town of Addison, No. 05-23-00642-CV (Tex. Ct. App. Apr. 4, 2025)

CAFED: Sleeping With The Fishes - Requiring Water To Stay In River Is A Regulatory, Not Physical, Taking

Here's the U.S. Court of Appeals for the Federal Circuit's opinion in United Water Conservation District v. United States, No. 23-1602 (Apr. 2, 2025), which gets a bit metaphysical.

The District is responsible for a dam and canal that diverts water from the Santa Clara River in southern California. Under the authority of the Endangered Species Act, the NOAA required the District to leave more water in the river for steelhead trout habitat. Either that, or seek an incidental take permit allowing the District to "take" (i.e., kill) steelhead.

The District asserted this is a physical taking of its water rights, but the government said no, this is a regulatory taking. Why is this important? Because a physical takings claim is ripe right now, without any need to exhaust any avenues for administrative relief from the NOAA, But if this is a regulatory takings claim, it isn't ready for judicial review until the NOAA has provided a final decision in the form of a yes or no on an incidental take permit. Which it has not done because the District hasn't applied for an incidental take permit. The Court of Federal Claims agreed with the government, and the District appealed. 

The Federal Circuit saw the difference between physical and regulatory takings thusly:

Regulatory takings differ from physical takings in that, instead of asking “whether the government has physically taken property for itself or someone else—by whatever means,” the question is whether the government “has instead restricted a property owner's ability to use his own property.” Id. (citing Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Plan. Agency, 535 U.S. 302, 321–23 (2002)). “While there is no ‘set formula’ for evaluating regulatory takings claims, courts typically consider whether the restriction has risen to the level of a compensable taking under the multi-factor balancing test articulated in Penn Central, 438 U.S. at 124.” Casitas I, 543 F.3d at 1289; see Tahoe-Sierra, 535 U.S. at 322 n.17 (“When, however, the owner contends a taking has occurred because a law or regulation imposes restrictions so severe that they are tantamount to a condemnation or appropriation, the predicate of a taking is not self-evident, and the analysis is more complex.”).

Slip op. at 7.

The Federal Circuit concluded that the District has a property right in the use of water it diverts. But it rejected the District's argument that NOAA's order to not divert as much water as it had been diverting and instead leave it in the river is the same as the government seizing the water. Not so, held the court. This is merely a restriction on the District's use.

But what about that earlier case in which the Federal Circuit held that the government requiring another water rights owner to put water into a fish ladder was a physical taking?  See Casitas Municipal Water Dist. v. United States, 543 F.3d 1276 (Fed. Cir. (2008). Nope. The difference is that in Casitas, the water district already had diverted the water from the river into its own system and the government ordered it to redirect the already-appropriated water to the fish ladder. Whereas here, the water district was merely ordered to not divert it and leave it in the river for the fish.

The Federal Circuit also distinguished a a Supreme Court case which held that the government's stopping the water flow to the plaintiff's mill was a physical appropriation. By contrast, here, the government had not "completely cut off [the District's] access to the water or cause it to return any volume of water it had previously diverted to its possession[.]" Slip op. at 10. "In fact, [the District] alleges that [NOAA], at most, required more water to stay in the Santa Clara River." Id.

The District argued the court shouldn't view this so hyper-technically: we had the right to X amount of water before, and due to the government's restrictions has X-minus amount now. We think that makes a lot of sense. 

But let's put that aside for the moment and get to what we see as the more fundamental issue. Should there be a difference between a physical claim and a regulatory claim such that they should be subject to different ripeness requirements?

The idea that there's a meaningful (or as the Federal Circuit says, "material") difference between a physical takings theory and a regulatory takings theory is difficult for us to wrap our mind around. There's but a single cause of action to describe the situation where an owner claims some action by the government has the same effect on property as would an exercise of eminent domain (aka inverse condemnation, regulatory taking, de facto taking). See Yee v. City of Escondido, 503 U.S. 519, 534-35 (1992) (“Petitioners’ arguments that the ordinance constitutes a taking in two different ways, by physical occupation and by regulation, are not separate claims. They are, rather, separate arguments in support of a single claim—that the ordinance effects an unconstitutional taking.”). Reminds us of that perhaps-apocryphal story about LBJ getting into the "wrong" helicopter. They're all de facto takings, son. After all, in eminent domain the taking of a nonpossessory easement is treated exactly the same way as a taking of the fee simple interest.

Nonetheless, the Federal Circuit thinks there's a big difference. But what's the difference between having a right to divert water, and a right to water already diverted? We can't see a whole lot. But here's the court's thinking:

The Supreme Court precedent that United relies upon, however, does not acknowledge any distinction between physical and regulatory takings. That is presumably because it was not until 1978, decades after the decisions in International Paper, Gerlach, and Dugan, that the Court, in Penn Central, “clarified [ ] the test for how far was ‘too far’” for a regulation to be recognized as a taking. Horne v. Dep’t of Agric., 576 U.S. 350, 360 (2015). It may also be because the alleged takings in those cases did not arise from a regulation, as it clearly does here under the ESA. Moreover, Gerlach and Dugan involve riparian water rights, not appropriative water rights as here. The difference between the two is meaningful in the context of this case because riparian rights exist by virtue of land ownership and, therefore, their acquisition by the landowner does not depend on any physical acts of diversion and beneficial use of water as is required for appropriative water rights. See Colorado, 459 U.S. at 179, n.4 (“Appropriative rights do not depend on land ownership and are acquired and maintained by actual use. Riparian rights, in contrast, originate from land ownership and remain vested even if unexercised.”). Unlike the riparian-rights holders in Gerlach and Dugan, therefore, the appropriative-rights holder here needed to have physically diverted water for its property right to vest and thus become subject to a physical taking, as in Casitas. For at least those reasons, the Supreme Court precedent and related cases United cites are consistent with our decision here.

Slip op. at 12.

United Water Conservation Dist. v. United States, No. 23-1602 (Fed. Cir. Apr. 2, 2025)

CAFED: It Ain't Over Til It's Over - CFC Free To Revisit Seven-Year-Past Denial Of Motion To Dismiss

Kudos to whomever added the Wilhelm Scream

In trial court litigation, the "final judgment" is a milestone. That's when your window to an appeal starts, that's when it is truly done in a trial court. If you are one of the parties or lawyers in the trial court, that's when you can respond to the question "did you win?" truly with a "yes" or "no."

And that little voice in our head keeps reminding us that until final judgment, in the (perhaps apocryphal) words of Yogi Berra, "it ain't over 'til its over." Yes, you might win a partial summary judgment. Or that motion gets denied. Or the court decides that yes, the court has jurisdiction. Or whatever. All that stuff is mostly interlocutory and therefore subject to revision, revocation, or reconsideration. Or in the case of subject-matter jurisdiction, something that can come back to bit a plaintiff is the butt at any time until the final buzzer (or even after, if you've ever had the experience of an appellate court laying the subject-matter jurisdiction bomb on you). 

And that, folks, is the scene where today's story takes place.

It looked like to the plaintiff who raised a takings claim because the federal government allegedly failed to "provide the drainage it was obligated to provide," resulting in flowage and seepage on the owner's property. The Court of Federal Claims rejected the government's argument that bringing the claim in 2011 was too late, because more than six years had passed since the claim allegedly accrued. The last time the feds provided any drainage was way back in 1986, back when dudes were wearing t-shirts with linen suits, and facial stubble as a thing made its cultural debut. 

If you are a seasoned reader, you know that when takings liability is premised on a drawn-out series of slow-motion events rather than One Big Thing, and courts are trying to figure out when a SoL window opened, they turn to the "stabilization" doctrine: when the slow-mo action has resulted in enough injury that the plaintiff should have become aware of it, the SoL window doesn't open until the challenged action's effects have "stabilized."

Way back in 2013, the CFC rejected the government's argument that the six years had run way before the 2011 complaint, holding that the stablization here occurred less that six years before 2011. At that point, the parties got to talking. Pleased with the kumbaya, the CFC stayed further forward progress of the litigation. For "nearly seven years[.]"

Apparently they talked a lot, but nothing more and eventually 2020, the CFC lifted the stay and the parties resumed fighting. The feds filed a 12(b)(6) motion, and as luck would have it, during the briefing the CFC judge went to senior status "and the case was reassigned." You know what's coming next...

That's right, now that the case had a new judge the court sua sponte went back and revisited the formerly-denied motion to dismiss for lack of subject-matter jurisdiction, and held, contrary to the court's former judge, that the stabilization doctrine did not apply, and thus the plaintiff is literally and metaphorically SOL.

In Etchegoinberry v. United States, No. 23-2196 (Mar. 24, 2025), the U.S. Court of Appeals for the Federal Circuit affirmed. The court first rejected the plaintiff's "been there, done that!" argument, and held that the law-of-the-case doctrine does not prevent a trial court from exercising its discretion to do this kind of revisiting. That doctrine isn't so much a "once and done" rule, but more like guidelines than actual rules. Slip op. at 4 ("The doctrine, however, 'merely expresses the practice of courts generally to refuse to reopen what has been decided, not a limit to their power.'") (citation omitted)).

Plus this is subject-matter jurisdiction and although this is an Article I tribunal and not an Article III court, the court must maintain Tucker Act jurisdiction for the whole case, not just at the beginning. Thus, the CFC (v.2.0) could go back and revisit the prior judge's ruling.

Turning to whether the CFC correctly held that the stabilization doctrine didn't save the complaint from a SOL dismissal, the Federal Circuit held that it doesn't. 

The stabilization doctrine does not apply to Appellants’ claim. Appellants alleged the taking as the “full productive use of their farmlands,” by the United States through non-performance of its statutory duty to provide drainage. E.g., J.A. 2942. This is not a flooding case like Dickinson, where the government constructed a dam, resulting in a “continuing process of physical events” that eroded the plaintiffs’ land over time. 331 U.S. at 749. Appellants here irrigated their land for over forty years knowing the United States had not provided any drainage. The lack of drainage did not change at any point in this time period. As the Court of Federal Claims suggested, “the provision of irrigation water was regular, consistent, and recurring, and not a slow, gradual, physical process that may (or may not) eventually lead to a taking.”

Slip op. at 7-8 (footnote and citations omitted).

The owners "have applied fresh water to their lands without the United States providing any drainage since at least 1986. J.A. 2931. Appellants know this resulted in regular damage to their land." Slip op. at 8.

A decade's worth of effort and expense, including seven years of trying to settle: down the drain.

End of story, end of case.

Etchegoinberry v. United States, No. 23-2196 (Fed. Cir. Mar. 24, 2025)

Breaking: Texas Takings Law Enters The 20th Century!

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

First, the bottom line: in The Commons at Lake Houston, Ltd. v. City of Houston, No. 23-0474 (Mar. 21, 2025), the Texas Supreme Court held that merely because a regulation is a justified exercise of police power does not insulate it from a claim that it goes too far and is also a taking requiring compensation. 

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

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

The reason for our snarky headline is that we thought this issue was settled in the "original" regulatory takings case in the early 20th Century, Pennsylvania Coal Co. v. Mahon. Way back in 1922, the Supreme Court held 8-1 that if regulation "goes too far" into an owner's rights, it is a taking. And this was despite the fact that there, it seemed like Pennsylvania's police power justifications for the Kohler Act were very police powery. Preventing surface subsidence seems pretty solidly health, safety, and welfare justified. The Mahon majority rejected the arguments of the City of Scranton and Justice Brandeis' solo dissent that the doubleplusgood police power reasons were enough to say no taking. 

Well, for whatever reason, Texas had not entirely caught the vibe. Or at least there was some lingering uncertainty about the century-plus reasoning that takings doesn't turn on the government's reasons, but focuses on the effects of what might be valid regulations have on the property owner. You know, the Armstrong thing: is it fair to put the entire burden of a public good on a property owner. The same question we ask in straight eminent domain. 

So we are grateful to our friend and colleague Charles McFarland for representing the property owner. Check out the oral arguments here. 

We urge you to check out the opinion. Well worth reading. Here's what we think is the money quote:

But we have long rejected “the notion that the government’s duty to pay for taking property rights is excused by labeling the taking as an exercise of police powers.” Steele, 603 S.W.2d at 789.38 Indeed, whether a regulation constitutes a valid exercise of the police power—or promotes any other important public policy, purpose, or interest—is simply irrelevant to whether the regulation causes a compensable taking. Lingle, 544 U.S. at 543.39 If a regulation does not promote a valid public purpose, the taking is simply impermissible because it is not a taking for a “public use,” and “[n]o amount of compensation can authorize such action.” Id. So whether a regulation constitutes a valid exercise of the police power “is a separate question” than whether it results in a compensable taking. Loretto, 458 U.S. at 425. We do not even attempt to “compartmentalize” a government regulation as being either a taking or an exercise of the police power because of “the manifest illusoriness of the distinctions” between the two. DuPuy, 396 S.W.2d at 107.41 Simply put, any attempt to create a dichotomy between takings and police-power regulations “has not proved helpful in determining when private citizens affected by governmental actions must be compensated.”

Slip op. at 14 (footnote and some citations omitted).

The court also held that the takings claim is ripe under Pakdel's "relatively modest" requirement for a final decision because, despite a number of applications that went nowhere (but haven't been out-and-out denied), the city has said that the owner "has not right to obtain the permit." See slip op. at 25-27.

The opinion's reasoning on this issue is instructive, and well-worth keeping in your hip pocket, because it accurately captures what owners often face when dealing with a regulatory scheme, a topic we've thought about a lot:

Perhaps if the City had ever told The Commons that it was requesting the wrong permit or applying in the wrong manner, the City could have an argument that it was never given the opportunity to grant or deny The Commons relief. See Mayhew, 964 S.W.2d at 929. What the City has instead is a paper trail down which it dragged The Commons for months, if not years, with no suggestion of compromise or a final determination. See Palazzolo, 533 U.S. at 620 (“[A] landowner may not establish a taking before a land-use authority has the opportunity, using its own reasonable procedures, to decide and explain the reach of a challenged regulation.” (emphasis added)). Nevertheless, the City’s assertions that The Commons simply has “no right” to obtain a floodplain-development permit and that its claim “cannot ever ripen” clearly indicates absolute finality. Although the City has not yet formally denied a permit, it “may not burden property by imposition of repetitive or unfair land-use procedures in order to avoid a final decision.” Id. Under these facts, we conclude that The Commons’s inverse-condemnation claim is ripe for adjudication.

Slip op. at 27.

Good work, Charles, thank you.

The Commons of Lake Houston, Ltd. v. City of Houston, No. 23-0474 (Tex. Mar. 21, 2025)

CA10 On Causby, Open Range, And Corner Crossings: Owners Have A Right To Exclude, But Not If Doing So Fully Encloses Public Lands

The opinion gets that diagrams are good. 

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

A case that should end up in Property casebooks (it will almost certainly make an appearance in our William and Mary Eminent Domain and Property Rights course in the fall).

Dirt lawyers know the "ad coelum" doctrine (owner owns airspace, and down to Hades) has a lot of practical challenges in the modern world. The Supreme Court decided a while back in United States v. Causby, 328 U.S. 256 (1946) that no, it isn't violating the surface owner's property rights for aircraft to fly high up. In the modern world, the owner can't reasonably expect to be compensated for invasions into the coelum, except when the invasion is down fairly low, and likely to cause a problem on the surface. The doctrine has some continuing vitality, especially in that all-to-frequent question that dirt lawyers get: if my neighbor's tree overhangs my property line, can I trim the branches or pick the fruit? But how low does it go?

For more on that, check out the U.S. Court of Appeals for the Tenth Circuit's opinion in Iron Bar Holdings, LLC v. Cape, No. 23-8043 (Mar. 18, 2025), a case presenting a very interesting -- some might say metaphysical -- property issue.

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

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

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

Of course, these lines on a map don't actually exist on the ground. The actual points of contact for the parcels "meet at an infinitely small point" that "like a point in mathematics, are without length or width." We did say this was going to be kind of metaphysical.

But the corners are marked and the hunters trying to traverse from one public parcel to another public parcel without trespassing into private property, could locate at least the approximate location of these infinitely small points. "[T]he three hunters were met with two steel posts, each with a 'No Trespassing' sign, that were connected together with a chain, a padlock, and some wire." A locked "gate" that doesn't prevent anyone from actually getting from here to the other side of that chain, but nonetheless represents the corners and the private nature of the adjoining parcels.

Schrödinger's Gate

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

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

Did they try the Twister thing? No, "one by one, each grabbed one of the steel posts and swung around it, planting their feet only on Section 14 (BLM) and section 24 (BLM), but passing through the airspace above Section 23 (Plaintiff [Iron Horse]) and/or Section 13 (Plaintiff)." In holding onto the steel posts and swinging around them to cross from Section 14 to Section 24, there is no evidence the Defendants caused any damage to Plaintiff's property." During other hunts in later years, the hunters wanted to avoid all this grabbing and swinging and "in an effort to not touch Plaintiff's steel posts when crossing ... they brought a steel A-frame ladder[.]" They propped up this and use it for crossing without touching Iron Bar's land, nor its posts.

Now that is dedication.

Eventually, the private owner sued the hunters in civil trespass actions and the District Court ruled in the hunters' favor because there's a public right to access public property, and even though the private owners have a right to exclude from their own land, they don't have the right to erect barriers to the public accessing public land.

The Tenth Circuit started with Cedar Point, John Adams, property rights, and the right to exclude. This is a "core" property rights, and the court acknowledged that subject to aircraft flight, the surface owner does own the airspace. The court offers a hat tip to Causby, limiting an owner's property rights to the airspace the owner is able to occupy or use in connection with the land (even if the owner does not actually so use the airspace).

The court also noted that under Wyoming state law, this is likely an actionable civil trespass. Yes, very likely. Slip op. at 24. But "that does not end the inquiry[,]" because federal law may ok corner crossings on its own. The court concluded that the federal Unlawful Enclosures Act and interpreting caselaw "have overridden the state's civil trespass regime[.]" Id.

After going through the statute and several cases interpreting the Act, the court held:

We extract from these cases that the UIA proscribes the “exclusive use and occupancy of any part of the public lands” and further prohibits conduct that “prevent[s] or obstruct[s] free passage or transit over or through the public lands.” See §§ 1061, 1063. The controlling principle is that checkerboard landowners cannot maintain a barrier that has the effect of fully enclosing public lands and preventing complete access for a lawful purpose. Bergen, 848 F.2d at 1511–12. When a landowner denies checkerboard access, he imposes a proscribable nuisance under federal law, “notwithstanding such action may involve an entry upon the lands of a private individual.” Camfield, 167 U.S. at 525. At the same time, the government—and by extension its licensees (i.e., the public)—do not have an “implied easement to build a road” across private holdings to reach public lands. Leo Sheep, 440 U.S. at 669. Leo Sheep did not speak to, and is not controlling for, the type of limited airspace intrusion ratified by the district court.

Slip op, at 38.

So let's see if we get this. The owners here have a right to exclude corner-crossers. But the Act says that the public has a right to access public lands, which means any private owner that is getting in the way of that -- even where that owner does nothing affirmative to impede public access -- is creating a nuisance. Slip op. at 41 ("The UIA, in contrast, contemplates a limited physical intrusion necessary to abate a nuisance—inclosure of the public lands.").

So you have a right to exclude, but if you exercise that right, you are creating a nuisance. Is that right? Sorry not sorry. 

Following up on that, the Tenth Circuit rejected the owner's argument that if thusly interpreted, the Act is a taking. "There is some force to that argument," the court began, but [and there's always a "but," isn't there?], "Bergen assessed a similar argument and rejected it." Slip op. at 46. "That is not to say more recent Supreme Court precedent may cast doubt on Bergen's logic. Cedar Point Nursery, for example[.]" Id.

But Bergen left open the possibility that an owner, if she can conceive of a way to maintain the right to exclude without also enclosing public lands ... have at it, owner. Id. at 47. In the end, this looks to us more like the court saying there's a balance that needs to be made between public access, and private rights. And in the court's view, the break goes to the public. We're not sure that's the right way to look at it, especially in light of Armstrong (a case that doesn't show up in the opinion), which says that which way the balance between public and private rights breaks isn't as important as who bears the cost when it breaks towards the public.

So here's a stupid idea: why not instead of trying to regulate and restrict the owner's right to exclude, the feds take it by eminent domain. We do that for the Rails to Trails Act, why not here?

We think there's the seeds of a great screenplay in here, in case your dirt lawyer gig isn't working out and you want to be in the movies.

Iron Bar Holdings, LLC v. Cape, No. 23-8043 (10th Cir. Mar. 18, 2025)

Virginia Eminent Domain Conference: May 8-9, 2025, Williamsburg

Virginians: now is a good time to register for the Virginia Eminent Domain Conference, May 8-9, 2025, at the Kingsmill Resort in Williamsburg.

We have spoken and attended the Conference in past editions, and can report that it is excellent. We're looking forward to joining friends and colleagues again in The Burg in the spring. Check out the faculty and agenda, and then register and reserve your spot.

We'll see you there.

Texas Eminent Domain Conference - Austin, March 27-28, 2025

Texans: now is a good time to register for the 24th Annual Texas Eminent Domain Superconference, March 27-28, 2025, at the Austin Country Club in Austin.

We spoke at the Conference a couple of years agolast year and in other editions, and can report that it is excellent. Check out the faculty and agenda, and then register and reserve your spot.

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

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

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

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

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

Check it out.

Eviction Moratorium As A Physical Taking All Teed Up

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

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

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

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

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

The petition should be granted.

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

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

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

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

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

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

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

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

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

Wagner v. Scheirer

McKinney v. Goins

inversecondemnation.com

Bound By Oath episode on Pennsylvania Coal

SC episode on the British Constitution

Tess of the d’Urbervilles

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

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

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

Here's the description:

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

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

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

A catered lunch will be provided.

Here's the agenda. See you there.

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

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

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

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

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

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

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

As the opinion put it:

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

Barron, 32 U.S. at 247.

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

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

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

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

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

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

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

Id. at 250-251.

Here's the book's description:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Homework, not filmstrips!

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

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

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

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

Slip op. at 8-9.

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

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

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

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

New Article: Ethan Blevins, "Penn Central in the States," 15 Wake Forest J.L. & Policy 105 (2025)

Our Pacific Legal Foundation colleague Ethan Blevins has published the lead article in the latest edition of the Wake Forest Journal of Law and Policy, and it is on a subject that makes it a must-read for you takings mavens.

The title says it all: "Penn Central in the States." How do states treat the U.S. Supreme Court's Penn Central test? Find out here, as Ethan surveys over 200 state court applications of that notorious test. Do they do better than federal courts? What court should you file in?

And if that doesn't grab you enough, here's his conclusion:

I conclude that most of these problems do not stem from unfaithful applications of the Supreme Court's regulatory takings doctrine, but rather are a direct consequence of the Supreme Court's failure to establish a clear, reliable test rooted in sound principles. I hope this article's findings can assist in the quest to improve the doctrine.

Download the article here.

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

Shands Key, with the City of Marathon in the background

This just in: in Shands v. City of Marathon, No. 3D21-1987 (Fed. 5, 2025), Florida's Third District Court of Appeals sitting en banc held that the city's downzoning of property (Shands Key, shown above in an exhibit from the Key West trial we participated in in June 2021) from General Use (density: one home per acre) to Conservation Offshore Island (one home per 10 acres; Shands Key is just under 8 acres) effected a Lucas taking because it deprived the owners of economically beneficial uses of their land. This, notwithstanding the possibility of the owners selling the property to a third party, who could have donated the property to city in return for a chit to move up in the city's development queue.

We're not going to go into too much detail or offer our opinion because this case is one of ours. Our Pacific Legal Foundation colleague Jeremy Talcott was the lead trial and appellate counsel, backed by Kady Valois. Here's us exiting the courthouse after wrapping up the trial in Key West's Monroe County courtroom a couple of years ago:

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

But we're not going to let you go without noting a few highlights from the en banc opinion:

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

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

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

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

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

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

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

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

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

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

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

A catered lunch will be provided.

Register here.

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

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

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

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

Here's the Abstract:

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

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

Don't miss this one.

Hawaii Supreme Court Arguments: Is Just Compensation For Even A Small Slice Of A Primo Hawaii Beach Zero?

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

As we previously noted, the Hawaii court of appeals affirmed a trial verdict that the just compensation owed to littoral property owners for the State's regulatory taking of small portions of accreted beach is zero.

Last week, the Hawaii Supreme Court heard oral arguments. Here's the video (sorry, can't embed it here). Worth watching, if only because questions of just compensation and how it is calculated rarely are presented to this court (which is a frequent flyer in regulatory takings cases).

Here's a description of the case and issues from the Hawaii Judiciary:

Petitioners Maunalua Bay Beach Ohana 28, Maunalua Bay Beach Ohana 29, and Maunalua Bay Beach Ohana 38 brought an inverse condemnation action against the State of Hawai‘i in 2005. At that time, they argued that the State effected a taking of accreted lands via Act 73 of 2005. In 2009, the Intermediate Court of Appeals (ICA) held that Act 73 “effectuated a permanent taking of littoral owners’ ownership rights to existing accretions to the owners’ oceanfront properties that had not been registered or recorded or made the subject of a then-pending quiet-title lawsuit or petition to register the accretions.” Maunalua Bay Beach Ohana 28 v. State, 122 Hawai‘i 34, 57, 222 P.3d 441, 464 (Ct. App. 2009).

On remand from the ICA, Petitioners sought just compensation for the alleged temporary taking of their accreted lands between 2005 and 2012. At trial, the circuit court concluded that $0 was just compensation for the alleged temporary taking of the accreted land and no nominal damages should be awarded to the petitioners. It also determined that the petitioners were not entitled to attorney’s fees.

The ICA affirmed the circuit court’s decision. With regard to attorney’s fees, the ICA held that the petitioners’ “claim for attorneys fees against the State for obtaining declaratory relief is barred by sovereign immunity.” The ICA further held that the Ohanas were not entitled to attorney’s fees under the private attorney general doctrine.

In their application for certiorari, the petitioners argue that the ICA erred in affirming the circuit court’s award of $0 in just compensation with no nominal or severance damages. Petitioners also contend that the ICA erred by concluding that sovereign immunity bars an award of attorney’s fees, and that they would not be entitled to fees under private attorney general doctrine. The State contends that the ICA did not err in affirming the circuit court’s award of $0 in just compensation or declining to award nominal damages to petitioners. It also argues that the ICA correctly held that sovereign immunity bars petitioners’ claim for attorney’s fees, and that even if it did not, petitioners would not be entitled to attorney’s fees under the private attorney general doctrine.

We watched live, and have a couple of thoughts:

• Justice McKenna's questions indicate she recalls that in an earlier regulatory takings case, the court concluded that even "speculation value" was enough to place a regulatory takings claim outside a Lucas wipeout analysis, an indicator that in this court's view, property always has value, even if it has no use. Is that enough to say the owners here were entitled to, at the very least, nominal just compensation?
• Does obtaining a decision holding the State to its constitutional obligation (after which the State repeals the unconstitutional statute) qualify the plaintiff for fee recovery from the State under the private attorney general doctrine, even where the adjudicated compensation is zero? We think so, because suing to keep the State in line when it has acted beyond its authority is exactly the kind of thing that the Attorney General should do (but didn't here, because it has been too busy defending the State's action). What about the advocate for the State who argued that there was no constitutional wrong here, because of the zero compensation verdict (the notion that the Takings Clause does not prohibit takings, only uncompensated takings)? The fact that the State withdrew the offending statute after the plaintiffs won the takings claim seems to contradict that argument because at the heart of it, the court ruled that the State should have used its eminent domain power to take future accreted land, and not the police power.

Stay tuned. We'll continue to follow along and will post the court's opinion when issued.

New Cert Petition: SWAT Takings, Part X

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

In this latest iteration of what we call the "SWAT takings" issue, the Sixth Circuit, like every other federal appellate court, denied the owner of property severely damaged in the course of a police dislodging of a criminal suspect. But the court applied a different analysis. Instead of (incorrectly, we think) looking and whether the police were acting with the scope of their (ha!) police power, the court concluded that the police had a "privilege" to enter, so thus could destroy in the course of that entry, the petitioner's property.

In short, your bundle of sticks never included the right to exclude the po-po.

Here's the Question Presented:

A few weeks ago, this Court denied certiorari in Baker v. City of McKinney, 23-1363, a case about whether the Fifth Amendment’s Takings Clause re-quires compensation when a SWAT team destroys an innocent person’s property while pursuing a fugitive. The Fifth Circuit had held that there is an implicit exception to the Takings Clause when the govern-ment’s actions were “objectively necessary.”

In a statement respecting the denial of certiorari, Justice Sotomayor, joined by Justice Gorsuch, wrote that “[w]hether any such exception exists (and how the Takings Clause applies when the government destroys property pursuant to its police power) is an important and complex question that would benefit from further percolation in the lower courts prior to this Court’s intervention.” Baker, No. 23-1363, 2024 WL 4874818, at *2 (U.S. Nov. 25, 2024).

The facts of the present case are materially identical to Baker, but the Sixth Circuit panel below denied compensation on different grounds: Because the Slaybaughs had no legal right to exclude the police, the panel reasoned, the destruction of their house was not actually a deprivation of their property rights. In sup-port of this conclusion, the panel relied on dicta from Cedar Point Nursery v. Hassid, where this Court noted that lawful searches do not “appropriate” an owner’s traditional right to exclude others from his or her property.

The question presented is: “Does a common law privilege to access property categorically absolve the government’s duty of just compensation for property it physically destroys?

The way the QP is framed to us implicates state precondemnation entry statutes under which condemnors may enter private property against the will of the owner to evaluate the property for future acquisition, but is not excused from takings liability for just compensation when that entry is more than minimal and innocuous.

Follow along on the Court's docket here, and stay tuned, with fingers crossed.

Petition for a Writ of Certiorari, Slaybaugh v. Rutherford County, No. 24-755 (U.S. Jan. 16, 2025)

CA4: Challenge Public Use/Pretext Under Due Process And § 1983, Not Inverse

The facts in D.A. Realestate Inv., LLC v. City of Norfolk, No. 23-1863 (Jan. 16, 2025), a recent decision from the U.S. Court of Appeals for the Fourth Circuit, are fairly sympathetic. And the opinion starts off with a tantalizing quote:

In 1761, Massachusetts lawyer James Otis exclaimed “one of the most essential branches of English liberty is the freedom of one’s house. A man’s house is his castle.” John Adams’s Reconstruction of Otis’s Speech in the Writs of Assistance Case, in Collected Political Writings of James Otis 12–13 (Richard Samuelson, ed. 2015). American law has embraced that principle since our nation’s founding. U.S. Const. amend. V. But we have also long recognized that “all property in this country is held under the implied obligation that the owner’s use of it shall not be injurious to the community.” Mugler v. Kansas, 123 U.S. 623, 665 (1887).

Slip op. at 3.

But still no succor from the court.

While an active-duty sailor was deployed, the city determined his property was uninhabitable. It sent and posted notices, but the mailed notices were returned to sender. A few months later, the city tried again. After returning from deployment, the owner did some maintenance, but didn't directly respond to the city's determination the property was uninhabitable (the record doesn't reveal whether the owner knew of the determination).

And the next year, the Navy deployed the owner again for a short time. Upon his return he "saw a faded notice posted to the house[,]" after which he contacted the city. Slip op. at 6. But that apparently went nowhere, and "[i]n June 2018, the city prepared another notice of violation letter[,]" that gave the owner 30 days to remediate, or else the city would demolish it. Slip op. at 7. No response. At the end of 2018, the city tore down the building.

Three years later, the owner sued for, inter alia, due process, a federal taking, and a Virginia-law inverse condemnation claim. The district court granted the city summary judgment.

The owner appealed to the Fourth Circuit, but limited the issue to to whether the Virginia inverse claim was subject to disputed facts, and abandoned appeal of the federal claims. Slip op. at 10 ("Thus, the only issue before us is whether Fox showed any genuine dispute of material fact related to his Virginia inverse condemnation claim."). In other words, a federal appeals court was going to be weighing in solely on a state law issue, and even then only on the relatively narrow question of whether the owner had pointed to evidence sufficient to meet his minimal burden of production on summary judgment (not persuasion).

That, and the fact that the resulting opinion is published, should give you some clue that any truly interesting insight this was going to produce might lie in the dicta. We'll get to that intriguing dicta in a moment, but first the holding (affirmed).

The court began by noting:

When this collision [the tension between using your property how you like versus the obligation not to use it in a way that harms others] occurs in Virginia, the government has two options. It can abate a public nuisance without paying compensation. Or it can exercise its right of eminent domain based on the public use of blight elimination. In the latter situation, the government may acquire title to the property, but it must pay the owner just compensation.

Slip op. at 3.

The owner claimed that there's a factual dispute regarding whether his property was a nuisance, and that a jury alone can make that determination. The court rejected the argument, first because he had a chance to challenge the city's administrative determination that the property was a nuisance, and he failed to use the city's appeal process to chase that down. The second, and more important reason was that it is not material under Virginia law whether or not the house was a nuisance. The court noted that Virginia caselaw treats nuisance abatement as an exercise of police power exempt from the obligation to provide just compensation. So it it was a nuisance, no inverse liability.

And if it wasn't a nuisance, then the destruction was ultra vires; an essential element of a Virginia inverse claim is proof that the taking was for a public use:

As a result, if Fox is right that the house posed no danger to public health or safety, he’s correct that it is not a nuisance under Virginia law. But for the same reason, it did not constitute blight. See id. § 1-219.1(B). And since eliminating blight is the only potentially applicable public use here, Fox cannot show the “public use” element of an inverse condemnation claim. See AGCS, 800 S.E.2d at 163 (“Inverse condemnation permits recovery only when property is taken or damaged for public use.” (internal quotation omitted)). In sum, whether the house constituted a nuisance is immaterial—Fox’s inverse condemnation claim fails whether the answer is yes or no.

Slip op. at 14-15 (footnotes omitted). 

Next, the court rejected the owner's argument "that a jury must resolve whether the city pretextually stated a purpose of blight elimination or nuisance abatement." Slip op. at 15. The owner had raised vague allegations that the real reason for the demolition of the house was not that it was blighted, but because Norfolk wanted to free up the site for redevelopment. The court held this claim was not supported by any evidence to meet the owner's Rule 56 burden. See slip op. at 17. Game over.

Now, here's the useful dicta in the case. The court noted that it was not saying that these type of circumstances can never present a claim. It recognized that the pretext situation could be pressed in several ways. First, the owner might have administratively appealed the nuisance determination. Or "he could have brought at timely § 1983 due process claim for an unlawful taking." Slip op. at 16 (citations omitted).

Take that last one and keep it in your file for future deployment.

D.A. Realestate Inv., LLC v. City of Norfolk, No. 23-1863 (4th Cir. Jan. 16, 2025)

Two New Cert Petitions (Ours) - 50 Years Of Fruitless Trying Is Enough: Overrule Or Clarify Penn Central!

Two -- count 'em two! -- cert petitions from our shop, filed today. Both call for "clarifying or overruling" Penn Central.

Oh, have I got your attention now?

• Petition for a Writ of Certiorari, The Gym 24/7 Fitness, LLC v. Michigan, No. 24-____ (U.S. Jan. 15, 2025)
• Petition for a Writ of Certiorari, Mount Clemens Recreational Bowl, Inc. v. Hertel, No. 24-____ (U.S. Jan. 15, 2025)

Both arise out of the Michigan governor's orders shuttering some, but not all, businesses during Co-19. These had devastating consequences, and owners sued for, inter alia, a taking, asserting a Penn Central theory. As we noted here, the Gym 24/7 case went up through the Michigan court system, with the Supreme Court eventually denying discretionary review over an extensive dissent. The Mount Clemens Recreational Bowl case took pretty much the same path. 

We're not going to say much more because these petitions are ours, with Jon Houghton and Deb La Fetra walking point.

Here are the Questions Presented:

In the Gym 24/7 case:

In this Fifth Amendment regulatory takings case, Michigan’s Executive Order took dominion and control of the use of Petitioner’s commercial property. It barred all customers from the premises for six months, which erased the property’s economic use and destroyed Petitioner’s reasonable investment-backed expectations to benefit the general public. However, Michigan courts dismissed Petitioner’s case at the pleadings stage, generating three disparate opinions, with two different outcomes, and three conflicting interpretations of Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978). The result demonstrates Penn Central’s inability to protect fundamental property rights and to provide a clear, consistent, and uniform determination of “how far is too far.” There is also tension in this Court’s decisions, and those below, as to whether the element of time should be a determinant of takings liability. The questions presented are:

1. Whether Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 (1978), should be clarified or overruled?

2. Whether a taking occurs upon the government asserting control over a property right, as the Court held in Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021), or instead, upon the government asserting control over a property right for some undefined period of time, as the Court held in Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Plan. Agency, 535 U.S. 302 (2002)?

In the Mount Clemens Recreational Bowl case:

Whether Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978), should be clarified or overruled?

Stay tuned.

Petition for a Writ of Certiorari, The Gym 24/7 Fitness, LLC v. Michigan, No. 24-____ (U.S. Jan. 15, 2025)

Petition for a Writ of Certiorari, Mount Clemens Recreational Bowl, Inc. v. Hertel, No. 24-____ (U.S. Jan....

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

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

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

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

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

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

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

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

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

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

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

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

CA8 Misses An Opportunity For Penn Central Clarity: No Taking When City Bans New Private Wells, Requires City Water

At first glance, it might seem like there's a lot there in the U.S. Court of Appeals' opinion in Becker v. City of Hillsboro, No. 23-3367 (Jan. 7, 2025).

After all, the city's prohibition on new private wells and another requirement that newly built homes connect to the city's water system seems a bit arbitrary (at least the opinion doesn't give a lot of detail why, other than "the city said so"). And the opinion evaluates a Lucas wipeout, a physical invasion, a Penn Central ad hoc taking, and a Nollan/Dolan claim. Even a Murr denominator issue. This case could have been a good vehicle to examine those questions in more detail that many courts do.

But after taking a dive in, our initial impression that this case would provide a lot of insight -- or even food for deeper thought -- didn't pan out. Take a look and see if you agree.

The case involved two separate but related city restrictions on how landowners use their property. The first was a prohibition on new private wells within the city's jurisdiction, put in place five decades ago. The second is more recent (2008), and requires all residences to get water service from the city.

The plaintiff here owed an undeveloped 156-acre parcel zoned for residential uses. A prior owner voluntarily annexed the land to the city in 2000. Flash forward, and the current owner tried to sell the property in 2020. It was only then, it asserted, that it discovered the annexation and the resultant well ban and city-water requirement. Complying with the city water requirement would cost way more than it is worth, and killed potential sales. 

Takings lawsuit next, cross motions for summary judgment followed. City's motion granted, appeal followed.

Physical invasion? No. The owners "are not being compelled to tolerate a permanent physical occupation because they are not being compelled to do anything at all." Slip op. at 9. No, this is a require that if they build homes, then those homes must be on city water. "If." No one is compelling the owners to build homes: the owner "still may choose whether to build a structure and comply with the ordinance or forego building a structure." Id. Simple: don't want to be on city water? Don't build nothin!

Well, what about the owners' argument that yes, we could choose to not build but that would force us into a Lucas wipeout. That, too, failed to convince the court. You might not be able to build homes, but hey, you "may still use the Property as it is for recreational purposes, or they could sell it." Id. And, worse yet, the owners' "own expert did not suggest that the property was rendered valueless by the City’s ordinances." Slip op. at 10. The requirements "only" reduced the property's value by 70%.

What about forcing the owner to choose (develop and use city water, or not develop and get whacked for 70% value) violates Nollan/Dolan? The court held that it couldn't address this argument because it had not been raised and argued in the district court. Hold on, the owners argued, whadda mean we didn't raise this -- our district court summary judgment papers used the terms "exaction" and "Nollan/Dolan." Not good enough the court of appeals concluded: "those references and citations were made in the context of arguing that the regulations are not impermissible exactions because the Trust is not seeking permits from the City. Furthermore, the trustees made no reference to exactions, Nollan, or Dolan in their Amended Complaint." Slip op. at 12.

Finally, the owners' Penn Central argument floundered on similar shoals. The court started off by rejecting the owners' claim that the denominator should be be each of the potentially subdivided lots ("as that's how they hope to sell the tract"), or was the court going to treat the property as the entire 156 acres? One big lot, the court concluded, applying the multi-factor Murr test. That settled, the court held that each of the Penn Central factors weighed against the owners.

• Economic impact: nothing "significant" here, because owners "presented no evidence" to show impact, because the expert only declared that "the cost to the Trust of extending the City water system to the Property made the development for that highest and best use economically unfeasible," and didn't conclude anything about the economic impact of other uses."Slip op. at 16.
• Investment-backed expectations: yes, the owners might have subjectively believed that they could developed without connecting to city water, and the prior owner voluntarily annexed the property, thus subjecting it to the city's regulations. Yeah, there's Palazzolo, which doesn't categorically bar you from forming reasonable expectations, but the regulatory regime can "shape" your expectations (what's the difference?) and other nearby owners paid to hook up city water, so there's that. Slip op. at 17.
• Character: the court acknowledged that the government's reasons for the regulations are not what the Supreme Court meant by "character of the government action," but in the same breath concluded that the the "likely" reason for the city's regulations was to prevent water contamination and depletion of the aquifer. Slip op. at 18.

The court's approach to Penn Central is perplexing. On one hand, it acknowledges--as it must--that the Supreme Court directs the factors to mean a certain thing (or not mean a certain thing), and are applied a certain way. Yet despite that acknowledgement, the Eighth Circuit just goes ahead an applies the test the same old way. You have to disprove all possible uses and values (and not let the trier of fact decide how much is too much), your post-regulation acquisition of the property doesn't kill your RIBE, but merely "shapes" them negatively, and "character" doesn't mean the government's reasons (yet it does).

So despite the initial promise that the Eighth Circuit would grapple with the issues presented in the case -- in particular an application of the Penn Central factors -- in the end it was a tale full of sound and fury, signifying nothing.

Becker v. City of Hillsboro, No. 23-3367 (8th Cir. Jan. 7, 2025)

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

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

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

More about the Conference here, including registration information.

Here are some of the highlights:

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

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

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

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

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

New Article: Timothy Harris, "Revisiting Palazzolo: The Blurry Lines Between Ripeness and Standing that Enable Windfalls," 73 Kan. L. Rev. 289 (2024)

Check out, the latest from Professor Timothy Harris, "Revisiting Palazzolo: The Blurry Lines Between Ripeness and Standing that Enable Windfalls," 73 Kan. L. Rev. 289 (2024). He dives into the question of whether an owner who acquires property already subject to regulations that allegedly work a taking may assert a claim, or does that claim belong only to the prior owner?

Here's the Abstract:

When property changes hands, the pre-existing right of the seller to bring an inverse condemnation claim against the government does not always pass to a subsequent owner. Sometimes it does. If valid takings claims expire on sale, the government may experience a windfall. But if a buyer gets a deal on burdened property and then sues under a prior owners’ takings claim, the new property owner gets a windfall. Established Supreme Court rules draw distinctions between the character of various “takings” to determine whether a claim survives a transfer of ownership. But the character of these distinctions is blurred (along with the rights of landowners) in Washington, Louisiana, and other states that continue to follow the “subsequent purchaser role” which is inconsistent with the U.S. Supreme Court’s ruling in Palazzolo v. Rhode Island. The determination of who gets the windfall may depend on the narrow distinction of whether a subsequent purchaser’s status turns on the doctrine of “standing” or “ripeness.”

Among other cases, the article analyzes decision by the Washington Supreme Court dismissing a takings claim because the claim belonged to the prior owner of the property. We posted about that case here. Professor Harris writes that "[e]ither the Washington Supreme Court is incredibly sloppy, or it was deliberately attempting to expand the reach of the questionable 'subsequent purchaser doctrine.'" He has equally critical comments about other courts that adhere to the same analysis.

Professor Harris concludes that "[t]he fact that a claimant purchased property that was subject to a prior regulation should not be an automatic bar to an inverse condemnation claim--as it is under the "subsequent purchaser rule.'"

Worth reading. Definitely check this one out.

Montana: It Doesn't Take Much To Allege An Inverse/Takings Claim (Nor Should It)

The owner's land is a peninsula most of the time, but when Flathead Lake, Montana, rises a few months each year, it needed a bridge to access. So it asked the County "How about a bridge? We will only use it when the water rises." County said yes, issued a permit.

NIMBY neighbors, however, had another idea, They sued the County to void the permit: "What about the Montana Lakeshore Protection Act?" they asked. Trial court agreed, declared the permit void, and ordered the owner to restore the area to its natural state. Montana Supreme Court affirmed.

Next up: the owner's inverse claim against the County. We got a vested property interest, and "removal of the bridge by court order amounted to a taking[.]" Slip op. at 3. Trial court agreed with the County that the permit was void ab initio, and thus no vested property right. Moreover, the owner could not show that the County had taken or damaged the partial bridge for public use (the bridge came down because of the Montana Lakeshore Act, not us said the County). Back up to the Montana Supreme Court.

In Flathead Props. v Flathead County, No. DA-24-0233 (Dec. 31, 2024), the court reversed. This was an appeal from a motion to dismiss, so the court took as true the allegations in the complaint. There was reliance on the permit, and "[o]nce the bridge was constructed, Appellant presumably owned the bridge in fee and had the right to use, exclude, transfer, or dispose of the property ... [and] seemingly had a constitutionally protected property interest in the bridge itself." Slip op. at 7.

The court also analyzed the complaint's allegations as a regulatory taking (even though it was pleaded as an "inverse" claim):

Here, appellant’s complaint asserts it had a vested property right in the bridge, as described above. Additionally, appellant asserted the bridge added value to its property and the removal of the bridge thus deprived appellant of all use of the bridge. Appellant’s complaint also asserts it relied on the County’s permit to expend money and construct its bridge. Finally, appellant asserts the County deliberately issued the permit which later turned out to be faulty. As such, we find the facts asserted by appellant’s complaint are also sufficient to withstand a 12(b)(6) dismissal under a regulatory takings analysis

Slip op. at 8-9.

What about the notion that an owner cannot reasonably rely on an invalidly-issued permit? Not dispositive: "[t]his Court has not yet considered whether reliance on a faulty permit" can result in a vested right. Slip op. at 5. And what about the idea that no bridge for part of the year does not seem to lead to a conclusion that the entire property can't be used, or that the bridge removal rendered it valueless. Indeed, the court carefully avoided the merits of the case, noting only that "[w]e make no judgments on whether Appellant's claims would win at trial or survive a motion for summary judgment after further development of the factual record." Id.

This is the right approach at the pleading stage. The place to weed out factually weak claims is summary judgment, not motions to dismiss. More courts should take heed and approach this the same way. Instead, we see most courts serving as gatekeepers, throwing out many if not most takings claims at the pleadings. Rather than having the complaint do what complaints do (provide notice of the basic facts and the plaintiff's beef with the defendant), takings complaints are often treated by courts as technical exercises like when you plead fraud -- they require particularity, invocation of magic words, and hypertechnical pleading.

Be like Montana!

Flathead Props. v Flathead County, No. DA-24-0233 (Montana Dec. 31, 2024)

Volume 13 Brigham-Kanner Property Rights Journal Now Available

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

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

All of the pieces are must-reads.

NY App Div: Requiring Art Fee "Donation" To Get Building Permit Lacks Nexus, Proportionality

In what might be the most cliched "New York City" land use situation, check out the Appellate Division's opinion in Coalition For Fairness v. City of New York, No. 2023-05338 (Dec. 5, 2024).

Want to convert your SoHo-NoHo artist live/work space to unlimited residential use? Be prepared to pony up and pay to the City's Arts Fund a non-refundable fee of $100 per square foot as a precondition of even filing a building permit. 

When owners challenged this fee as unconstitutional under Nollan/Dolan/Koontz/Sheetz, the trial division said no. But the Appellate Division held otherwise, concluding that the imposition of the fee lacked an essential nexus and was not roughly proportional to whatever impacts "certified artists" (who knew the government was in the business of "certifying" artists?) suffer when an owner converts.

The opinion, in true Appellate Division style is short (3 pages), so you can just read it. But here's how the court laid out the analysis:

The ZR’s prohibition on new JLWQA units, coupled with this stated goal of broadening uses and the ZR text providing for conversions away from JLWQA use, further indicates that the City’s long-term land use goal is to phase out JLWQA units (see ZR § 143-13). By contrast, the City’s asserted goal in its arguments on appeal, of supporting art and local artists, is not related to any land use interest (see Nollan, 483 US at 837). Nor does payment into the Arts Fund promote the asserted legitimate end of preserving JLWQA stock for certified artists, as the Arts Fund does not pay for joint living-work units or other housing for artists, much less offer benefits specifically to certified artists. Instead, money from the Arts Fund “shall be allocated . . . to support arts programming, projects, organizations, and facilities that promote the public presence of the arts within the [SNX] District and surrounding neighborhoods,” with priority given to “under-resourced organizations and under-served areas” (ZR § 143-02).

Slip op. at 3.

And no proportionality either, because "there is no evidence of negative impacts on certified artists arising from the changes in zoning. Instead, [the City] represented during the approval process that there was a 'scarcity of certified artists able to purchase' JLWQA units, due to an ever-decreasing number of annual artist certifications the previous decade." Id.

Declaratory judgment and injunction issued.

Check it out.

Coalition for Fairness v. City of New York, No. 2023-05338 (N.Y. App. Div. Dec. 5, 2024)

CAFED: Feds Allocating California Water Isn't A Taking Because Cal Says Only The Feds Have Water Rights

Strong letter to follow!

A long-ish read (32 single-spaced pages) from the Federal Circuit in City of Fresno v. United States, No. 22-1994 (Dec. 17, 2024), but worth reading. 

Not only will you get a crash course in how water is allocated in California's vast central valley (as the billboards above, set up along the north-south I-5 corridor demonstrate, not everyone is happy about how that is accomplished), but you will also understand how the Federal Circuit approaches the predicate question in takings case: does the plaintiff own "private property?"

The court concluded no, the plaintiffs do not possess private property rights. Consequently, it affirmed the Court of Federal Claims dismissal of the takings claim. 

The central valley, as the opinion explains, "is home to the largest federal water management project in the United States[.]" Slip op. Unsurprisingly named the Central Valley Project, is a series of dams, storage facilities, canals, and hydropower stations operated by the U.S. Bureau of Reclamation. "Though its operation of the CVP, Reclamation controls water from the Sacramento and San Joaquin Rivers and allocates those waters throughout California." Slip op. at 5.

We like it when opinions include maps.

"Reclamation’s role in the CVP includes obtaining rights to water resources in the Central Valley and undertaking commitments to deliver those waters. Prior to the
inception of the CVP, various private entities owned rights to San Joaquin River water." Slip op. at 7. Those private entities had entered into agreements which "sold the bulk of their rights to San Joaquin River water to the government while at the same time reserving their right to ... water 'in excess of specified rates of flow[.]'" They also granted the Reclamation Bureau the right to "store, divert, dispose of and otherwise use" all waters (even the reserved waters). Id.

In return for transferring these rights, the Reclamation Bureau agreed that the rights would only be good as long as it provides water to the private entities. Armed with these water rights, the Bureau entered into agreements with others (including farmers and local governments) to deliver water. These agreements are limited by the Bureau's existing agreements to obtain the water.

This being California, there isn't enough water to go around. Between 2014 and 2017, the California's governor declared a drought emergency. The Bureau asserted it could not meet all of its water delivery obligations, and as a consequence informed the other recipients (the farmers and the municipalities) that they would only receive a smaller amount of water than in prior years. And one year, no water at all:

Reclamation did, in fact, supply significant amounts of water to the Exchange Contractors between May 15 and September 27, 2014, although it thereafter released no San Joaquin River water to these entities in October, November, or December of that year. During 2014, Reclamation delivered approximately 540,000 acre-feet of water to the Exchange Contractors, of which roughly 209,000 acre-feet had originated in the San Joaquin River (before being sent to the Friant Dam and stored in Millerton Lake), and the other approximately 331,000 acrefeet having originated in the Sacramento River, released from the Delta-Mendota Canal.

In the meantime, in March 2014, Reclamation notified the Friant Contractors that it would not be supplying them with any water that year, other than the minimum needed for public health and safety considerations. Ultimately, while Reclamation delivered these “health and safety” waters to the Friant Contractors (as well as carryover water from the previous year’s allocation), what the Friant Contractors received in 2014 was essentially a “zero allocation.”

Slip op. at 11-12.

Takings claim followed. The Court of Federal Claims concluded the plaintiffs lacked standing, and dismissed for lack of subject-matter jurisdiction. 

Skip forward to page 28 for the Federal Circuit's analysis of the takings claim (the prior pages are devoted to dismissing the plaintiffs' breach of contract claims). The court Circuit affirmed the CFC's dismissal, but on other grounds. It concluded the plaintiffs have standing, but in the same vein held that the plaintiffs lacked a private property interest. Thus, instead of a 12(b)(1) jurisdictional dismissal, the court dismissed under 12(b)(6).

Because the court held that the plaintiffs don't possess a private property interest. State law defines private property. We know from Cedar Point and Tyler that this statement should be qualified (state law may be the starting point for defining what qualifies as "private property" in the Fifth Amendment and "property" in the Fourteenth, but ultimately, any state definition must be in accord with federal constitutional definitions). Here, the court concluded that the plaintiffs do not posses "appurtenant" rights to water deliveries:

Appellants do not have any water rights under California law because, instead, as the California State Water Resource Control Board (“SWRCB”) has held, it is Reclamation that “has appropriative water rights in the Central Valley Project.” Cnty. of San Joaquin v. State Water Res. Control Bd., 63 Cal. Rptr. 2d 277, 285 n.12 (Ct. App. 1997); see also J.A. 2399-2403 (SWRCB Decision D- 1641 (Mar. 15, 2000) (“Title to the water rights under the permits is held by [Reclamation].”), aff’d sub nom. State Water Res. Control Bd. Cases, 39 Cal. Rptr. 3d 189 (Cal. Ct. App. 2006)); J.A. 221 (complaint acknowledging “[t]he United States holds legal title to such water and water rights”).

Slip op. at 30.  

Second, the plaintiffs should apparently be grateful: because the Reclamation Bureau created the Central Valley Project, "that supply of water would not exist without the creation and operation of the Project, i.e., the efforts of Reclamation." Slip op. at 31.

You ingrates!

We wonder what owners whose properties sit on the good side of a dam or government-constructed rip-rap think about this one?

The court concluded:

Because Appellants have failed to establish that they possess any property rights in water delivery from the government, they cannot maintain a takings claim. See Fishermen’s Finest, 59 F.4th at 1275 (explaining that only “if the court concludes that a cognizable property interest exists” do we determine whether that property interest was “taken”). Therefore, we affirm the Court of Federal Claims’ dismissal of these claims.

Slip op. at 32.

City of Fresno v. United States, No. 22-1994 (Fed. Cir. Dec. 17, 2024)

CFC: Complaint Adequately Pleaded Physical Taking Of JFK Assassination Film

Check out the opinion of the Court of Federal Claims in Nix v. United States, No. 23-704C (Dec. 11, 2024). Fascinating stuff.

We post it here not because it breaks new ground, but due to the subject matter of the lawsuit: the alleged taking of a film that captures (in part) the assassination of President Kennedy in 1963.

No, this isn't the famous Zapruder film, which was also the subject of a well-known takings claim. This case involved the "Nix film," taken that fateful day "from an angle opposite the more famous Zapruder film. The Nix film thus captures Abraham Zapruder and the area around him, where some claim a gunman other than Lee Harvey Oswald was hiding." Slip op. at 2. 

Nix licensed the film to UPI, which "unbeknownst to him ... transferred the Nix film to the United States House of Representatives Select Committee on Assassinations [HSCA]." Id. In the 1970s, the Committee sent it off to a private outfit for "enhancement," after which the original film seems to have disappeared with no one admitting to possessing it.

In 1992, Congress adopted the JFK Records Act, which requires that all "assassination records" held by the Feds be transferred to the National Archives to create a publicly-accessible collection. After confirming via a FOIA request with the National Archives that the original film was lost while in the custody of UPI, Nix's heirs sued the United States for a taking.

Later, the outfit that was asked to do the enhancement back in the 1970s said that it sent the original to the National Archives in 1978. Eventually the Archives "produced documents including the HSCA photo control log, which appeared to show that the Nix film had been sent by HSCA to Aerospace, but which did not show that it had been returned." Slip op. at 4.

The takings claim alleged that by adopting the JFK Records Act, the United Stated effected a physical taking of the Nix film by permanently transferring possession of the film to the public (shades of rails-to-trails cases). The feds responded with two main arguments: (1) this is an old, stale claim and the six-year Tucker Act statute of limitations ran a long time ago; and (2) the complaint failed to allege a physical takings claim. The CFC rejected both arguments. 

We won't get into the details of the court's SOL analysis, but will note that even though the SOL cannot be tolled, the court held that Nix's claim did not accrue until 2021. Yes, generally speaking, a claim that a statute works a physical takings claim accrues when the statute is adopted, unless the claim was "inherently unknowable" at the time of adoption, or if the defendant concealed the taking. The court concluded that the Nix plaintiffs didn't know of the taking until 2021, when they realized the Archives received the Nix film. Slip op. at 6 ("Plaintiff alleges that he was unaware that the government still had possession of the Nix film until he was informed that Aerospace had sent the film to NARA."). Moreover, "[t]he pleadings support an inference not only that Plaintiff was diligent in his efforts to find the Nix film, but that the government concealed its possession." Slip op. at 7. 

The CFC also denied the government's 12(b)(6) motion, concluding that the complaint adequately pleaded a physical takings claim. The court first noted that "[a] physical taking occurs when 'the government physically takes possession of an interest in property for some public purpose[.]'" Slip op. at 10. Even where government does not take title or all the sticks, if it acquires "one of the rights that makes up a property owner's metaphorical bundle of sticks," it must pay compensation. Id.

Here, the complaint alleges that the JFK Records Act, "directs [the Archives] to create a 'collection of records' relating to the assassination of President Kennedy. That direction includes all assassination records that were in [the Archive]'s possession when the law went into effect[.]" Id. The complaint alleged that the Nix film has been in the Archives' possession since 1978. Thus, if proven, these allegations would support a claim for compensation:

Once collected by NARA, assassination records generally must be disclosed to the public. JFK Records Act § 5. But the law makes no provision for return of any privately created records to their creators. The government in fact conceded at argument that if the Nix film is part of the NARA collection created under the JFK Records Act, it will never be handed back. Tr. at 10–11, 13.11 If the Nix film was in fact in NARA’s possession when the JFK Records Act went into effect, possession was permanently transferred to the government by operation of law — a classic example of a taking. See Horne, 576 U.S. at 361–62 (“The Government’s actual taking of possession and control of [property] gives rise to a taking as clearly as if the Government held full title and ownership.”) (quotes omitted).

Slip op. at 11.

The feds responded by arguing that if it took the property, then compensation could only be determined in an alternative dispute resolution process, like when the government took the Zapruder film: "[t]he government argues that the absence of such a process for the Nix film indicates that no taking occurred." Slip op. at 11. If you are scratching your head at this argument, you are not alone -- the CFC was similarly not impressed: "[t]hat is a non sequitur, of course: Courts often recognize that the government has taken property without any formal process at all." Id. We wouldn't put this as gently as the court did, and we'd characterize this as a pretty stupid argument.

So the Nix complaint lives to fight on. Worth reading.

Nix v. United States, No. 23-704C (Fed. Cl. Dec. 11, 2024)

A Takings Clause Vibe In A Second Amendment Case

We've been following a Second Amendment case, Hawaii v. Wilson, as it awaited the U.S. Supreme Court's decision whether to accept review. Not because it is relevant to the usual subjects of this blog, but because a friend and colleague is Counsel of Record for the petitioner, and we're just naturally interested in cases from the 808 that involve locally-disfavored rights. In that case, the right to keep and bear arms.

The Hawaii Supreme Court refused to consider a criminal defendant's defense that to prosecute him for carrying a firearm publicly violated the Second Amendment, concluding he lacked standing under Hawaii law because he had not sought a license to carry a firearm.  

Today, in this Order, the Court denied certiorari. But three Justices issued or joined statements (Thomas, Alito, Gorsuch). And Justice Thomas's statement revealed this Fifth Amendment nugget:

Our rejection of state procedural restrictions on the invocation of constitutional defenses follows from the fact that constitutional rights are “self-executing prohibitions on governmental action.” City of Boerne v. Flores, 521 U. S. 507, 524 (1997). A constitutional violation accrues the moment the government undertakes an unconstitutional act. For example, a violation of the Takings Clause occurs “at the time of the taking.” Knick v. Township of Scott, 588 U. S. 180, 194 (2019). And, the availability of state-law compensation remedies cannot delay or undo the accrual of a takings claim. See id., at 193–194.

The same principles apply to the Second Amendment. That Amendment is similarly self-executing, and a State transgresses it as soon as the State implements a licensing regime that is inconsistent with the Nation’s “historical tradition of firearm regulation.” Bruen, 597 U. S., at 17. Judicial review of a license denial may be one way that an individual can challenge state overreach. But, because the constitutional violation occurs as soon as an individual’s right to bear arms is inhibited, States cannot mandate that would-be gun owners go through an unconstitutional licensing process before they may invoke their Second Amendment rights. Any other rule would impermissibly demote the Second Amendment “to the status of a poor relation”among constitutional rights. Knick, 588 U. S., at 189 (internal quotation marks omitted).

Had the Hawaii Supreme Court followed its duty to consider the merits of Wilson’s defense, the licensing scheme’s unconstitutionality should have been apparent.

Statement at 5.

As we read that passage, Justice Thomas is saying that claims of unconstitutional government action may be raised it multiple procedural contexts, and are "self-executing" -- meaning that they are inherent limitations on government action and should not be subject to unnecessary procedural hurdles or restrictions, something we already understood (at least in part) about the Takings Clause (see, for example, the California raisin case where the Court held that the owner could raise a takings argument as a defense to an enforcement action).

And just to be clear, in our minds that is a slightly different "self-executing" context than the usual way we see the term invoked in takings cases, where it is used to describe the idea that legislative recognition of a cause of action, an ability to sue, and a remedy is not necessary, because the text of the Fifth Amendment sets it out. 

And there's also another Knick angle here in Justice Thomas's statement, where he wrote that the Hawaii court's refusal to consider the federal constitutional argument "contravenes the settled principle that Americans need not engage in empty formalities before they can invoke their constitutional rights, and it wrongly reduces the Second Amendment to a 'second-class right.'" Statement at 1. Perhaps no better illustration of this principle is the "final decision" ripeness rule in takings cases, which allows local land use regulators to establish all kinds of "empty formalities" that lower courts point to when they want to avoid deciding these type of cases.

If only the Supreme Court would apply the "no empty formalities" rule to those cases as well.

Statement of Justice Thomas, with whom Justice Alito joins, respecting the denial of certiorari, Wilson v....

DC Cir: TikTok Taking? Uh, No. Because They Can Sell It To Americans

A Table of Contents. Don't see that too often
in an opinion. (And this doesn't include
the concurring opinion!)

We may do social media (Twitter/X and LinkedIn), but so far we have avoided TikTok. Our attention span is already short enough, and it doesn't need to get even shorter.

And even more critically, we understand the TikTok platform consists mainly of short dance videos. That only makes us want to avoid it even more (OK Boomer). 

Well, as of today, we may not really have a choice. At least if the U.S. Court of Appeals for the D.C. Circuit's opinion in the case which challenges the Congressional ban on TikTok stands: TikTok Inc. v. Garland, No. 24-1130 (Dec. 6, 2024).

As you may know, in the Protecting Americans from Foreign Adversary Controlled Applications Act, Congress permitted the President to identify "foreign adversaries" and prohibit the distribution of maintenance of their apps. TikTok, a product of the People's Republic of China, is one of those apps.

The platforms challenged the Act, citing a host of problems -- see the Table of Contents above to give you a sense of the scope of the lawsuit.

And yes, the obligatory takings claim. A Lucas wipeout claim, to be specific.

The court held that the Act survived. Even the takings claim, which the opinion made short work of. Here's the entire analysis:

TikTok claims the Act constitutes a per se regulatory taking in violation of the Fifth Amendment because it will render TikTok defunct in the United States. The Government counters that TikTok has assets that can be sold, and that the Act requires only divestiture, which need not be uncompensated. Although the Act will certainly have a substantial effect on the TikTok platform in the United States, regardless whether TikTok divests, the Act does not qualify as a per se regulatory taking.

The Supreme Court recognizes two situations in which regulatory action constitutes a per se taking: (1) where the government requires that an owner suffer a “physical invasion of [its] property,” and (2) where a regulation “completely deprives an owner of all economically beneficial use of [its] property.” Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538 (2005) (cleaned up); see Cedar Point Nursery v. Hassid, 594 U.S. 139, 153 (2021) (explaining the first category includes temporary invasions of property). TikTok’s argument is of the second variety, but it does not demonstrate the complete deprivation such a claim requires.

Here the causal connection between the Act and the alleged diminution of value is attenuated because the Act authorizes a qualified divestiture before (or after) any prohibitions take effect. That presents TikTok with a number of possibilities short of total economic deprivation. ByteDance might spin off its global TikTok business, for instance, or it might sell a U.S. subset of the business to a qualified buyer.

TikTok dismisses divestiture as impractical. One of the main impediments, however, appears to be export prohibitions that the PRC erected to make a forced divestiture more difficult if not impossible. But the PRC, not the divestiture offramp in the Act, is the source of TikTok’s difficulty. TikTok would have us turn the Takings Clause into a means by which a foreign adversary nation may render unconstitutional legislation designed to counter the national security threats presented by that very nation.

In any event, TikTok has not been subjected to a complete deprivation of economic value. Beyond characterizing divestiture as impossible, TikTok does not dispute that it has assets that can be sold apart from the recommendation engine, including its codebase; large user base, brand value, and goodwill; and property owned by TikTok. In other words, TikTok has several economically beneficial options notwithstanding the PRC’s export restriction.

Slip op. at 64-65.

Back in the day, the only way into the PRC was
crossing the Lo Wu Bridge from Hong Kong, like
this was some kind of spy exchange.
We took this pic on the bridge in 1977.

Although we get the reasoning, we admit to it giving us a slight pause: Yes, free alienability is an essential stick and TikTok still has that and isn't Lucased out there. But the notion that to use your property you have an obligation to avoid the alleged taking by giving up ownership -- something akin to the old "last clear chance" doctrine in tort law -- sticks in our craw a bit. If this was a Penn Central claim, we'd think this would lean heavily on the character of the government action factor. But this was Lucas and Lucas only. No Penn Central.  

Have we seen the last of this? If the list of counsel and amici is any indication, probably not. 

Just no dance videos, please.

TikTok Inc v. Garland, No. 24-1130 (D.C. Cir. Dec. 6, 2024)

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

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

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

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

Slip op. at 10.

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

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

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

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

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

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

CA11: Takings Claim Not Ready Despite Govt's Enforcement Actions

Lake Worth: the "lago" in Mar-a-Lago

You know his name. He's taken on the City of Riviera Beach twice at the U.S. Supreme Court. And won both times. The houseboat that isn't a boat. The government can't shut you out from speaking your mind simply because you irritate them.

That's right, it's Fane Lozman. A "Florida Man" that you can like and admire. And he's back for Round 3.

He owns property that's mostly in (in, not near) Lake Worth. Two-tenths of an acre is uplands, and the rest (7.75 acres) is submerged. As the Eleventh Circuit noted, "[o]nly a sliver of Lozman's property is above water." 

The city, in accordance with the usual approach to land use regulation has a comprehensive plan. That plan designates submerged lands as "Special Preservation Future Land Use," a label which should set off your Lucas bells, because it mostly sounds like no use. Sure enough, that designation originally "preclude[d] any development of Submerged Lands ... to the maximum extent permissible by law."

Perhaps understanding the legal jeopardy which that put the city in, in 2010 it amended the plan to allow some uses. At the time Lozman purchased the property in 2014, the designation at least in theory allowed private residential fishing or viewing platforms and docks, and -- get this -- included a "savings clause" that prohibited the city from denying uses that were "judicially determined vested rights to develop or alter submerged lands." We see what you did there, city. In 2021, the city tweaked the plan a bit more, limiting such vested uses to a one-per-20-acre density.

But that's not the end of the story. Turns out that until after Lozman's 2014 purchase, the underlying zoning did not conform to the restrictive "Special Preservation Land Use" general plan designation. Uh oh. Indeed, the zoning allowed development of single-family homes. That was a great disturbance in the Force, and that sound you hear is the collective voices of municipal lawyers and planners crying out in terror. Eventually the city caught on, and in 2020, when it created a zoning designation that matched the general plan preservation designation.

Lozman was not one to let that slip by:

Lozman says that when he purchased the parcel, he “expected that it could be developed for use as single-family residential lots.” Lozman purchased the property in 2014 for $24,000. But he produced an appraisal valuing the property at $49,833,500 as of October 7, 2020. This valuation depends on Lozman maximizing the property’s “highest and best use”—bulkheading and filling the sub-merged water to create “up to eight one-acre parcels.” The appraisal was also “based on the hypothetical condition that permits could be granted for bulkhead and fill.”

Lozman v. City of Riviera Beach, No. 23-1119, slip op. at 4 (11th Cir. Oct. 16, 2024).

Zoning is king, and it controls what restrictions there are on property uses (right?), so Lozman sued for a Lucas taking in federal court. The district court granted the city summary judgment, but on appeal, the Eleventh Circuit held the case wasn't ripe, under Williamson County's still-surviving "final decision" ripeness rule. You know the drill: before an owner can move forward with a claim that a land use restriction is a taking, the regulating authority must have made a "final decision" about what uses are allowed under the restriction.

While grounded in the entirely rational notion that a court is not able to evaluate whether there's been a taking until it knows what uses an owner can make of property under the challenged restrictions, we know in practice the final decision rule is mostly a finger pointing the way to municipal approval purgatory. Having been incentivized by the Supreme Court to avoid saying "no" with clarity (after all, who wants to be sued for a taking!), while at the same time not wanting to say "yes" (here, for example, the city's restrictions contemplate preservation, not development -- would the city really be ok with seven residences smack dab in the Lago?), the easiest path for the government is to direct the owner into a byzantine maze with no realistic prospect of getting to either a yes or a no. And then hope that the thousand cuts weaken body and soul, and he taps out.

Here, the Eleventh Circuit concluded that Lozman hadn't bothered to ask the city for a development permit, nor the Corps of Engineers for a section 10 dredge-and-fill permit, both of which he would need in order to build up to the use allowed by the zoning. Slip  op. at 6 ("But Lozman has not yet acquired—or applied for—federal or state permits to develop his property."). Easy case, right? No final decision unless the owner asks the city. Or, you don't have to ask if doing so would be futile.

But that isn't all the story. Both the Corps and the State of Florida were (are?) hot on Lozman's tail with enforcement actions. It turns out that he didn't wait for permission, and he built "structures in the Lagoon without authorization in violation of the Rivers and Harbors Act." The State of Florida "instituted a similar action against Lozman in December 2020." Slip op. at 6. In each case, the government agencies obtained rulings preventing Lozman from doing anything.

The Eleventh Circuit disagreed with the district court's granting of summary judgment for the city, holding instead that Lozman did not allege a ripe case, because there's no indication he ever asked the city for permission to develop. The restrictive comprehensive plan were not sufficiently restrictive to show that there's no uses possible (however remote and unrealistic obtaining permission might be). And Lozman had not sought a variance.

The same reasoning applies here. The comprehensive plan alone cannot constitute a final decision on Lozman’s property. That the comprehensive plan includes a material exception permitting development underscores that the plan alone is not a final decision precluding the development of Lozman’s property. Because he has not applied for a permit, variance, or rezoning from Riviera Beach on the application of the comprehensive plan to his property, Lozman has not yet received a final decision on the comprehensive plan’s application to his property.

Slip op. at 9.

Nor a rezoning (on this one, we have real heartburn because a property owner can never be required to seek legislation in order to ripen a takings claim).

The court also rejected -- as most courts do -- the claim that seeking permission was futile. There are always possibilities, and courts are all too willing to accept a municipal claim that if only an owner would do it right, we might approve some use. Even here, where the feds and the state are coming after Lozman when he made uses of the property well short of what the zoning would allow. Anyone actually think any government would let him do anything? 

The Eleventh Circuit may have made short work of his case. And if there's a bright side of life part of the decision is that it reversed the district court's adverse decision on merits, and dismissed his takings claim without prejudice.

And if I were a betting man, I wouldn't count Mr. Lozman out just yet.

Lozman v. City of Riviera Beach, No. 23-11119 (11th Cir. Oct. 16, 2024)

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

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

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

Here are some of the highlights of the upcoming Conference:

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

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

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

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

Come, join us!

Links From Today's ABA Land Use Session

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

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

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

SCOTUS Declines To Review NYC Rent Control Challenge

Here's the latest in a case we've been following. This morning, in this Order, the Supreme Court denied cert in two cases which seemed to have a good chance at a grant, on two pressing issues which have divided lower courts, the physical occupation in tenancies (aka Yee), and the nature of the Penn Central takings test. Only Justice Gorsuch would have granted.

Here are the Questions Presented:

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

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

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

Too bad, we thought this one had a chance.

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

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

Get the pdf here.

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

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

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

Most definitely check it out.

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

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

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

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

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

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

Slip op. at 19.

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

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

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

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

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

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

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

Slip op. at 24.

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

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

Slip op. at 25.

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

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

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

Here's the issue the court will be reviewing:

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

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

Stay tuned.

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

Charles McFarland, arguing.

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

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

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

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

Here are the Issues Presented by the property owner:

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

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

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

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

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

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

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

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

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

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

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

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

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

More on the case here, including all the briefing.

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

New Cert Petition: Use vs Value, And Applying Penn Central

Here's the latest takings cert petition, in a case involving a California county's refusal to rezone property back to its former zoning to allow residential development. The only uses permitted on the property presently are "scientific research facilities uses" and hiking trails. Or, at the petition puts it, "only public, park-like uses." Pet. at 5. 

The District Court and the Ninth Circuit both held no taking.

Here are the Questions Presented:

Does a taking analyzed under Lucas v. S.C. Coastal Council require that the affected property be left with no value even if the regulation in question deprives the property of all economically beneficial uses?

Does Palazzolo v. Rhode Island leave any room for consideration of the landowners’ expectations in a Penn Central takings analysis?

Do the decisions in Loper Bright Enters. v. Raimondo, Cedar Point Nursery v. Hassid, Sheetz v. Cnty. of El Dorado and Lingle v. Chevron USA, Inc., change the way courts should evaluate the “character of governmental action” factor in a Penn Central analysis?

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

Petition for a Writ of Certiorari, Collins v. Monterey County, No. 24-487 (U.S. Oct. 31, 2024)

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

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

Here's the Abstract:

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

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

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

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

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

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

Here's the description:

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

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

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

Some possible topics:

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

Fertile grounds for exploration.

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

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

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

Here's the Abstract:

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

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

Download the pdf here.

Worth your time to check out.

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

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

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

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

Here's the Question Presented:

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

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

The question presented is:

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

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

Stay tuned.

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

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

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

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

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

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

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

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

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

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