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What's At 712 4th Street, S.W., Washington DC? Your Invite To The 2020 ALI-CLE Eminent Domain Conference (Jan 23-25, Nashville)

Don't Miss Out: Join The "Big Guns" And Secure Your Space At ALI-CLE's Upcoming Eminent Domain & Land Valuation Litigation Conference (Jan 23-25, 2020, Nashville)

We were not as creative as our colleague Paul Henry (see below), but our Planning Co-Chair Joe Waldo and I wanted to personally invite you to join the "big guns" in our area of law at the 37th Annual ALI-CLE Eminent Domain and Land Valuation Litigation Conference, January 23-25, 2020, in Nashville, Tennessee.

We've assembled an excellent faculty, and an agenda that covers the hot topics of the day. Go here to view the complete faculty list and agenda. Water rights, Knick, appraisal, ethics, civil rights, and a whole lot more in three days of the longest (and we think best) conference in our area of law. Also, for those new to the field, Andy Brigham and Jack Sperber are again leading their "Eminent Domain 101" program. A great way to learn the topic, or for experienced lawyers to get a quick refresher on the basics. Your registration allows free movement between all sessions and all tracks, so you can choose your menu ala carte.  

Of course, we're doing more than simply "talking shop," and we shall have our usual full slate of networking events, thanks to some very generous sponsors. Our faculty and attendees are well-known for being some of the friendliest and most welcoming in the business. And this is Nashville, and all that entails.

Register now. Spaces are already filling up. We are already at 25% higher registrations than at this point last year for the 2019 Palm Springs conference. The past few years have either sold out or come close, and the hotel block isn't unlimited. We want you with us, so sign up now!

2019 Brigham-Kanner Conference: The New New Property - Public Resources And Private Rights

Here is a transcript of the remarks I delivered today at the 2019 Brigham-Kanner Property Rights Conference. I was honored to join lawprof Henry Smith and Florida Supreme Court Justice (ret.) Ken Bell (who authored the Florida court's opinion in Stop the Beach Renourishment which was challenged in SCOTUS as a "judicial taking") to speak about "Public Resources and Private Rights" (moderated by Professor Katherine Mims Crocker). After paying our respects to 2019 B-K Prize winner Professor Steven Eagle, we each addressed some part of the question.

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The New New Property

As always, I bring to you tidings of "aloha" from the state where the legislature thought it was a going to reduce the price of residential housing by taking fee simple interests from "A" and giving them to "B," the leaseholders. 

Where now, the median price for a single-family, two bedroom, one bath, single wall house hovers just shy of $800 grand. 

And the state where the legislature thought that limiting the amount of rent gas companies could charge to their franchisees would somehow magically translate into lower gas prices at the pump for consumers. 

Where now, the price of gas is close to the highest in the nation -- although sorry, Californians, you may have us beat -- at or near $4 bucks a gallon. 

And in what may be a case of one-out-of-three-ain't-bad (so you don't write us off completely), our modest little jurisdiction is also responsible for at least one Supreme Court decision that we as property advocates really appreciate -- Kaiser Aetna v. United States, 444 U.S. 164 (1979) -- where the Court both affirmed that the right to exclude is one of those fundamental rights that is immune from interference by regulation unless first compensated, but also in one of the overlooked holdings of that case put in the context not of a fundamental right because it was recognized by state (Hawaii) law, but one sourced in the actions of Corps of Engineers personnel who had confirmed via a Section 10 Rivers and Harbors Act regulatory permit that Kaiser Aetna possessed the right to keep others out of the navigable marina it created:

While the consent of individual officials representing the United States cannot "estop" the United States, it can lead to the fruition of a number of expectancies embodied in the concept of "property" expectancies that, if sufficiently important, the Government must condemn and pay for before it takes over the management of the landowner's property.

I mention Kaiser Aetna because it is a good lead in to my portion of this panel, which is focusing on “Public Resources and Private Rights.” While we mostly speak of “property” as a private right, thanks in large part to our late colleague Charles Reich, whose place in the popular zeitgeist was secured by “The Greening of America,” but whom we lawyers will always remember as the author of the influential article “The New Property.” (And when I say "influential," I mean it is the most-cited article published by the Yale Law Journal. Ever.) 

That article got us to thinking about property in a different way: not exclusively as an instrument of private rights – most exemplified by the right to exclude – but as maybe something that looked a bit more like the commons. Things like government benefits, contracts, licenses, and in what may be the most famous instance, Board of Regents v. Roth, a government job. In that case a poor sap teaching at a state college who lacked tenure. (I feel your pain, brother.)

As we know the Court concluded that Professor Roth, who although he did not possess tenure, if he could show he possessed "new" property, could not be dismissed before the college conducted a hearing. In short, as what we might call Due Process Property. 

In the property rights context, we’ve seen similar rulings from the lower courts – most prominently the Second Circuit in Brody v. Port Chester (ask Dana Berliner about that one), the Tenth Circuit in M.A.K. Investment (before they declare your property blighted, they’ve got to tell you), and from my home court in Kellberg v. Yuen. 

How have government-granted or government-recognized “property” rights translated beyond the scope of individually-owned property? And can these Due Process property rights be translated to the language of takings-and-compensation property?

Two recent decisions highlight the differences. The first is from my home jurisdiction’s Supreme Court.

Now you might think that given the amount I give the business to my home court – Professor David Callies studied the opinions of our court over a 10 year time frame and revealed that it ruled in favor of environmental and similar plaintiffs nearly 90% of the time – that when our court issues a decision recognizing a new breed of “property” that I might rejoice. And it is a right that, as far as we can tell, no other court, state or federal, has ever recognized. 

The court concluded the Sierra Club possesses a constitutional property right in a "clean and healthful environment" entitling the organization to certain procedural protections under the state constitution’s due process of law clause. The ruling allowed the Club to intervene in a Public Utilities Commission petition regarding a power purchase agreement for a now-defunct electric plant on Maui. 

Here’s that again in case it didn't quite sink in: the court recognized a property right in a clean and healthful environment. 

Maui Electric filed an application with the State PUC, seeking the Commission's approval of an agreement between the utility and Hawaiian Commercial and Sugar Company which, if approved, would allow a rate increase to account for the additional production charges associated with the Puunene Plant, a coal-powered facility on former sugar lands in central Maui which transformed bagasse, the byproduct of sugar production, into electric power. We use the past tense because by the time the Supreme Court decided the case, the plant had closed, following the recent closure of the sugar plantation. No sugar plantation, no sugar, no bagasse. 

Sierra Club asked the PUC to intervene in the administrative process under the PUC's rules, asserting its own rights as well as several of its Maui members. The power plant, the petition asserted, would "impact Sierra Club's members' health, aesthetic, and recreational interests. Sierra Club also asserted its organizational interest in reducing Hawaii's dependence on imported fossil fuels and advancing a clean energy grid." 

Pretty vague stuff, and to me, more like policy questions than something best resolved by an adjudicative proceeding, but under existing judicial standing rules in similar cases in original jurisdiction actions brought in Hawaii courts, nothing too far from the norm. We’re not subject to Article III standing requirements, and the Hawaii Supreme Court’s state standing doctrine can best be summarized as “come on in the water’s fine.”  There's little doubt that if this were a case brought in a Hawaii trial court, that Sierra Club adequately alleged judicial standing. Anyone questioning that conclusion need only recall the Superferry case in which the Hawaii Supreme Court held that Sierra Club had standing to raise an environmental challenge to the now-defunct inter-island ferry because the ferry threatened the organization with four types of injury: (1) endangered species could be adversely impacted by a high-speed ferry; (2) the Superferry could increase the introduction of alien species; (3) surfers, divers, and canoe paddlers who used a state operated harbor could conceivably suffer adverse impacts; and (4) the threat of increased traffic on the road next to the harbor entrance. Again, that's a pretty vague butterfly-effect logic to gain standing. But for better or worse, that's the current state of Hawaii's standing law. 

However, the Maui Electric case was not an original jurisdiction action, it was an administrative proceeding in the Commission under the PUC's admin rules, governed by a different standard, one based in the Hawaii Administrative Procedures Act. Under the APA, an outsider may intervene in a "contested case" (an quasi-judicial adjudicative administrative process) when an agency rule or a statute gives the party a seat at the table, or when intervention is required by law because the agency is adjudicating that party's rights (in this case, the law was the Hawaii Constitution's due process clause).

And here, the Sierra Club alleged both that PUC statutes and the Hawaii Constitution's procedural due process of law protections gave it the right to intervene in the agency proceedings: 

Sierra Club argued that its members were concerned that the Puunene Plant relied too heavily on coal in order to meet its power obligations under the existing agreement and also that its members were concerned "about the public health and visibility impacts of burning coal."

Neither the PUC nor the court of appeals bought the Sierra Club's theory. The Commission denied intervention and decided Maui Electric's application without the Club's presence. The Club appealed to the Intermediate Court of Appeals which agreed with Maui Electric and dismissed the appeal for lack of jurisdiction. It concluded that because Sierra Club was not "aggrieved" by the decision by the PUC (because it correctly excluded the Club from the admin case), the appellate court did not have jurisdiction.

So up to the Hawaii Supreme Court they went, on the same two theories: the Club should have been allowed to intervene, either because the PUC's governing statutes gave it the right to do so, or because due process required it because the Club's property was at stake in the PUC proceeding. After rejecting a claim of mootness, three of our five justices got to the constitutional question: does the Hawaii Constitution recognize Sierra Club's environmental concerns as a property interest entitling it to procedural due process?

The majority based its conclusion on Article XI, section 9 of the Hawaii Constitution (a provision added by the 1978 constitutional convention):

Each person has the right to a clean and healthful environment, as defined by laws relating to environmental quality, including control of pollution and conservation, protection and enhancement of natural resources. Any person may enforce this right against any party, public or private, through appropriate legal proceedings, subject to reasonable limitations and regulation as provided by law.

That, the majority held, created a legitimate claim of entitlement to a clean and healthful environment, and thus it is a property right. It "is a substantive right guaranteed to each person." The majority noted that the court had earlier held that Native Hawaiian rights -- a right also found in the Hawaii Constitution -- are "property" rights, and that environmental concerns are no different. As a self-executing right, it is a legitimate entitlement --

We therefore conclude that HRS Chapter 269 is a law relating to environmental quality that defines the right to a clean and healthful environment under article XI, section 9 by providing that express consideration be given to reduction of greenhouse gas emissions in the decision-making of the Commission. Accordingly, we hold that Sierra Club has established a legitimate claim of entitlement to a clean and healthful environment under article XI, section 9 and HRS Chapter 269.

After reaching the conclusion that Sierra Club owns property in a clean and healthful environment, it was all over but the shouting and the majority held by applying the Professor Roth test, that the PUC had a duty to provide a hearing before it deprived the Club of its property:

The risks of an erroneous deprivation are high in this case absent the protections provided by a contested case hearing, particularly in light of the potential long-term impact on the air quality in the area, the denial of Sierra Club’s motion for intervention or participation in the proceeding, and the absence of other proceedings in which Sierra Club could have a meaningful opportunity to be heard concerning HC&S’s performance of the Agreement.

Finally, in a footnote, the majority made it clear that the result is immune from future legislative tinkering. This is a ruling based on the Hawaii Constitution, and thus no mere legislature can mess with it too much. 

Two justices disagreed, arguing this was a stretch, and one of those Pandora’s Box situations:

Respectfully, the Majority’s expansive interpretation of what constitutes a protected property interest in these circumstances may have unintended consequences in other contexts, such as statutes where the legislature has mandated consideration of specific factors by executive agencies when implementing a statute.

The dissent concluded the majority's result was unnecessary, because it was more of a policy choice than a judicial decision, and ultimately, if denied administrative intervention in the PUC, Sierra Club could deploy the loose standing rules which we mentioned earlier in this post, and institute an original jurisdiction action.

So is this property, New Property, or what we might call New New Property? 

The biggest question I have about the majority's conclusion is this: if the most fundamental aspect of owning "property" is the right to exclude others from the res, how in the world do members of the public have the right to exclude other members of the public from a clean and healthful environment? 

As the U.S. Supreme Court held in the aforementioned Kaiser Aetna, and Nollan "[w]e have repeatedly held that, as to property reserved by its owner for private use, 'the right to exclude [others is] 'one of the most essential sticks in the bundle of rights that are commonly characterized as property.'' (Or maybe Stevie Wonder said it better when he sang "this is mine, you can't take it.") 

Either way, the ability to keep others off of what you own -- and have the law back you up -- is one of the defining sticks in the bundle of rights which we call property.

Thus, I don’t think the court adequately grappled with the real foundational question built into the arguments -- should these types of environmental concerns even be shoehorned into the concept of "property" as that term has been used for thousands of years? Doesn't "property" as used in the Hawaii Constitution's due process clause mean private property? After all, as far as we can tell, every other time this court has dealt with property in Hawaii's due process clause, it has either expressly defined, or implicitly assumed, that the property interest at stake was private property, and not a right that looks more like something "owned" collectively by everyone. Essentially what the majority accomplished was a subtle redefinition of property from a private right to a public resource. 

So what’s on the horizon? I’m thinking the second shoe to drop is going to be "public trust" rights. As Professor Callies has written on the Hawaii form of the public trust which goes well beyond the Roman and English concepts, if the notion of public property is extended to the public trust, there’s a danger that this background principle could well eclipse – or indeed swallow up completely – the notion of private property. 

And our court is just one vote shy of concluding that Native Hawaiian rights – a form of cultural property – qualify as constitutional property.  Australia’s High Court has recently concluded that the property rights first recognized in the Mabo v. Queensland decision lead to a requirement for compensation when those rights were expropriated. Real money, even if it is Australian dollars. And since we’re here in the south what does the recognition of cultural property mean for things like those troublesome Confederate monuments that sit there on courthouse lawns (and across the street from certain law schools)? Is there a cultural property right for them to remain, or to be paid compensation to leave? 

As if responding to the Hawaii Supreme Court, the following year, the DC Circuit – applying Pennsylvania’s similar constitutional provision – came to the opposite conclusion. 

The court held that the Pennsylvania Constitution's Environmental Rights Amendment's guarantee of "clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic [sic] values of the environment" was not a liberty or property interest triggering the Fourteenth Amendment's due process protections. 

The case was a challenge by Riverkeeper to the Federal Energy Regulatory Commission's enabling statute, which requires FERC to recover its costs from the industries it regulates. Riverkeeper asserted this makes it more likely that FERC will approve pipelines. 

The court first concluded that Riverkeeper had standing. And it quickly dismissed its claim to possess a liberty interest because the ERA's rights are not "essential to the orderly pursuit of happiness by free men," and "the right to a healthy environment can[not] itself fairly be described as a 'liberty' interest." 

The court subjected Riverkeeper's "property" claim to a bit more analysis. State law defines property, and Pennsylvania's ERA "guarantees" certain things, and even calls them "rights." The court concluded, however, that the ERA's rights are "vague and indeterminate." Slip op. at 8. And the rights it recognizes do not have "some acertainable monetary value."  Most importantly, the question is whether the rights look like "any traditional conception of property."

The court held that because the ERA recognizes the rights as belonging to "the people," it failed this latter test:

Most importantly, the Environmental Rights Amendment creates no right to exclude—or anything like it. To the contrary, its first sentence vests the single “right” at issue collectively in “[t]he people,” its second sentence confirms that “Pennsylvania’s public natural resources are the common property of all the people,” and its third sentence requires the Commonwealth to conserve and maintain environmental resources “for the benefit of all the people.” Moreover, although the Supreme Court of Pennsylvania has held that the Amendment is judicially enforceable by private individuals, it has also confirmed that the right the Amendment creates is shared equally by all Pennsylvanians.

In other words, no Pennsylvanian may exclude any other from the right to clean air, pure water, and a preserved environment. So, the Amendment protects not private property rights, but public goods. In that respect, it is like “the right that we all possess to use the public lands”—which for due-process purposes “is not the ‘property’ right of anyone.”

The court concluded that "[t]he amendment is unlike traditional or even new property in yet other respects. For one thing, the right to a preserved environment cannot be bought or sold—and thus has no 'ascertainable monetary value,' as the Supreme Court’s 'property-as-entitlement cases have implicitly required.'"

So which is it, and maybe more critically what defines “property?” State law, notions of natural law or fundamental rights?

On that, I’d like to touch on one more recent decision, which will naturally lead us into a discussion of one of my favorite metaphysical law cases, Stop the Beach Renourishment (yes, we’re going to dive into judicial takings in a moment).

This is a case from the Ninth Circuit. The plaintiffs filed a class action alleging that state officials failed "to return interest that was allegedly skimmed from their state-managed retirement accounts." The District Court denied class action status and granted the State summary judgment, concluding the case was "potentially unripe" because the State had not finished the process of administrative rulemaking, which might, in the court's view, address the plaintiffs' claims for interest.

The Ninth Circuit – somewhat surprisingly, given its reputation --  reversed. The State argued that because the Washington Court of Appeals held that the statute at issue didn't require the payment of interest, there was no "property" that was taken when the state officials kept the interest. If it ain't property under state law, the state argued, it ain't "property." 

Not quite, held the Ninth Circuit. Interest on principal is one of those "core" and "traditional" property rights that a state simply cannot disavow:  

There we observed that “constitutionally protected property rights can—and often do—exist despite statutes . . . that appear to deny their existence.” Citing the Supreme Court’s opinion in Phillips, we noted that “a State may not sidestep the Takings Clause by disavowing traditional property interests long recognized under state law.” We then held that there is “a ‘core’ notion of constitutionally protected property into which state regulation simply may not intrude without prompting Takings Clause scrutiny.” This “core” is “defined by reference to traditional ‘background principles’ of property law.” In that case, we concluded that interest income earned on an interest-bearing account falls within this class of fundamental property rights. 

In short, while state law usually defines property, there are certain sticks that transcend a state's ability to redefine them out of existence. 

Before we move to Justice Bell and Stop the Beach Renourishment, let me say this. First, thank you to Lynda Butler for again asking me to be here. I’ve said before that being in this room is like being at the Super Bowl for property law. This is Yankee Stadium in October, the Champs Elysees or Wimbledon in July (although with the stellar talent in the room, I kind of feel like the poor sap up matched up with Venus Williams). Second, hearty congratulations to Professor Eagle. His regulatory takings treatise is one of those rare ones that is on what I call my “back” bookshelf. The books within reach when you turn around at your desk. A well-deserved recognition for your wonderful work and scholarship. 

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Here's The Agenda And Faculty For The 2020 ALI-CLE Eminent Domain And Land Valuation Litigation Conference, Nashville, Jan 23-25, 2020

You overwhelmingly asked for Nashville, and we're bringing it to you!

Get ready, and hold your place now: here's the list of programs and speakers for the 36th Annual ALI-CLE Eminent Domain and Land Valuation Litigation Conference, to be held at the Downtown Nashville Hilton, January 23,- 25, 2020. Two-and-a-half days with top-notch national faculty (lawyers from both sides, judges, legal scholars, appraisers, relocation experts, and others).  

Early registration and group rates are available now. 

Here are just some of the programs:

• Featured Presentation: Property Rights as Civil Rights: Seeking Justice Though the Fourth and Fifth Amendments. Hon. Jonathan Apgar, Jamila Johnson, Alan Ackerman. Moderator: Leslie Fields.
• Making Sense of the New Rules After Knick v. Township of Scott: Where Do I Go, What Do I Do? David Breemer, Smitha Chintamaneni, Professor Bethany Berger. Moderator: Professor Steven Eagle.
• When A River Runs Thought It: Water Rights and Takings. Nancie Marzulla, Hertha Lund, and Charles McFarland. 
• Passive Takings by Government Inaction. Professor Christopher Serkin.
• Show, Don't Tell: The Dos and Don'ts of Demonstrative Evidence. John Murphy, Jeffrey Hamill.
• Is Close Enough Good Enough? Establishing the Date of Valuation in Direct and Inverse Cases. Neil Olson, Bill Ryan.
• Creative Approaches to Solving Difficult Appraisal Problems, Edward Burg, Bob Grace, MAI, Michael Rikon. Moderator: Joseph Waldo. 
• All You Need is Love: New Frontiers in Alternative Dispute Resolution in Eminent Domain. Cortney Young, Dwight Merriam.
• Road Warriors: Building and Trying an Eminent Domain Case From Your Laptop. Paul Henry, Jody McSpadden.
• Special Benefits: The Givings Clause? Heather Cunningham, Randy Smith.
• How To Try and Settle Pipeline Cases. Thomas Peebles, Melissa Glassman.
• Going Where No Court Has Gone Before: The Tension Between the Courts and Appraisal Methodology. Kevin Walsh, Kannon Conway. 
• Responding to Project Changes: Valuing a Taking When Government Action Changes or is Ongoing. Meghan Largent, W. Andrew Gowder. 
• Responding to the Abuse of Motions in Limine. Anthony Della Pelle, Williams James (invited)

There's also an Ethics program. For that, we are doing something a little different this year, with a special don't-miss presentation, "Surviving the Daily Fistfight: Finding Your Resilience When Every Day is a Battle" with Clint Schumacher, Christian Torgrimson, and Michael Ryan. 

And for those new to the field, or old hands who would like a refresher course, there's the "101" track on Thursday, going through an eminent domain case from A to Z. 

And this isn't the complete list, and there's more on relocation, regulatory takings from both sides of the case, effective strategies to determine unity of lands, fixtures, national updates for eminent domain and regulatory takings, and the "open mike" National Forum (where practitioners from around the nation share their issues and cases).

Look for the complete brochure shortly on the Conference web page on the ALI-CLE site.

And of course, there's Nashville. We're right around the corner from all that the town has to offer. Music City, USA. Hot chicken. The Grand Ole Opry. Country Music Hall of Fame. The Hermitage. 

So make your flight and hotel reservations now. Don't miss out. The attendance at the last several conferences has been record-setting, and the conference block at the hotel has sold out.

Join us - old friends and new colleagues! 

Get Ready: The 2020 ALI-CLE Eminent Domain And Land Valuation Litigation Conference Agenda Coming Soon

The final agenda and faculty list will soon be officially published, but we wanted to give you a preview of what is in store at the ALI-CLE Eminent Domain and Land Valuation Litigation Conference, January 23-25, 2020, at the Nashville Hilton (downtown, just a few steps away from everything that Nashville has to offer). 

Don't miss out: in recent years, we've been at-or-near capacity, and the conference hotel has even sold out a couple of times. Visit the ALI-CLE website to register and hold your space. 

Here are some of the things we'll be discussing: 

• Making Sense of the New Rules After Knick v. Township of Scott: Where Do I Go, What Do I Do?
• The Missing Link in Valuing Fixtures
• When a River Runs Through it: Water Rights and Takings
• Responding to Project Changes: Valuation When Government Action is Ongoing
• Property Rights as Civil Rights: Seeking Justice Through The Fifth Amendment
• Special Benefits: The Givings Clause?
• How To Try and Settle Pipeline Cases
• And, of course Ethics. 

Many of our expert faculty are returning, but we're also featuring many new presenters who have never been on our dais before. And a mix of perspectives and backgrounds: property owners' counsel, condemning agency lawyers, public interest, judges, and legal scholars. Plus a chance to meet your colleagues from across the country. Make connections, and see old friends. 

Early bird registration underway here. See you there. 

Anthony Palazzolo Drives His Property

Check this out. What at first appears to be something along the lines of the grainy Zapruder film (this particular piece was recorded on video, not film, and certainly well before the days of high-res camera phones that we now take for granted) is an important piece of takings history.

It is (the late) Anthony Palazzolo driving his famous "wetlands" property, recorded after the U.S. Supreme Court issued its opinion in his favor in Palazzolo v. Rhode Island, 533 U.S. 606 (2001).

Dwight Merriam, who graciously provided the raw footage, became Tony Palazzolo's friend after interviewing him for an article Dwight was writing on the Supreme Court decision, and they frequently met, dined together, and conversed as Palazzolo's matter continued on remand. Dwight recorded this video from the back seat of Palazzolo's car. In the front is John Boehnert of Providence, another longtime friend of Dwight's and a preeminent Rhode Island land use and coastal law lawyer, author of the ABA book "Zoning the Oceans."

Palazzolo v. Rhode Island, 533 U.S. 606 (2001)

Oregon Hardens "Background Principles" Public Trust Firewall In Lake Access Case

People like to go to lakes. Lakes are nice. Especially in the summer. Especially Oswego Lake, Oregon (former name "Sucker Lake" -- not an auspicious start). Problem is, most of the land surrounding the lake is private property. Some is owned by the municipality, but it limits access to residents of the municipality. 

So like in a similar New York case, a recreational kayaker who does not reside in the City sued, asserting that because the Lake is navigable, the public is allowed to access it. The lower courts agreed with the City and the owners that the general public does not have a right under either the public trust or public use doctrines to access. 

In Kramer v. City of Lake Oswego, No. CV12100913 (Aug. 1, 2019), the Oregon Supreme Court mostly agreed. But not entirely. It concluded that "neither the public trust nor the public use doctrine grants plaintiffs a right to enter the [City's] swim park property, and that the public use doctrine does not grant plaintiffs a right to access the water from the [City's] waterfront parks. But we conclude that, if Oswego Lake is among the navigable waterways the state holds in trust for the public, then neither the state nor the city may unreasonably interfere with the public's right to enter the water from the abutting waterfront parks." Slip op. at 425.

For those of you interested in such subjects -- and how state courts, with Oregon at the forefront have led the way enlarging the Roman and English concept of public trust -- you probably should read the entire opinion. And the public trust can be a background principle of a state's property law. Takings mavens know as a consequence, the public trust is often seen as a safety valve for takings claims, and a way to avoid liability. If the owner never really owned something, voila! no taking. For an example of how state courts like Oregon have judicially expanded the doctrine, look no further than footnote 12 on page 425, which begins, "Water is not the only resource that the state holds in trust."   

Here, the court recognized that, if proven, the public trust might be a limitation on the city's and the riparian owners' rights to exclude. 

Plaintiffs contend that the “public trust doctrine” imposes obligations on the state that would preclude it from enacting the type of restrictions on access to public water that the city has adopted. As we will explain, we agree with that proposition. We pause to emphasize, however, that the doctrine of public ownership of the beds and banks of navigable waters and the so-called “public trust” doctrine are independent doctrines, as the Supreme Court cautioned in PPL Montana, 565 US at 603-04. Federal law determines whether a body of water is “navigable” and, thus, one for which Oregon acquired title to the underlying land at statehood, but state law primarily determines what the “public trust” doctrine means for those waters. Id.

Thus, we must determine as a matter of state law whether the public’s rights with respect to publicly-owned waters includes a right to enter the water from public land.

Slip op. at 437 (footnotes omitted). 

The court concluded that "[w]e agree with the rationale that underlies the decisions in all three states: The public’s ability to use the water for purposes expressly protected under the public trust doctrine may “require means of public access” to that water." Slip op. at 445. 

But, as noted above, the court concluded the record didn't have the necessary evidence on which to grant summary judgment about whether the plaintiffs win or lose about whether the exclusion of the kayaker was an unreasonable restriction of the public's right to access the lake.

Thus, although the question of general public access to Sucker Lake is still unresolved, one thing is certain: the Oregon Supreme Court just threw open the courthouse doors to claims that the water is fine in nearly all waterbodies in the state under the public trust, and that the public can claim to come on in.   

Kramer v. City of Lake Oswego, No. CV12100913 (Or. Aug. 1, 2019)

Thursday Round Up: Hawaii Water Law, "New" Property, The Edge Denied!

Here's what we're reading today:

• New Ruling In Maui Water Case Still Doesn’t Resolve Old Dispute (Honolulu Civil Beat) - about the Hawaii Intermediate Court of Appeals' recent unpublished memorandum opinion in a long-ongoing water law fight on Maui. The long and the short of it is the court held that whether a short-term license from the State to use water (month-to-month, max one-year as the statute requires) is "temporary" or not (these licenses have been renewed for 18 years to allow the administrative process to be completed) is a factual question that can be resolved by summary judgment. Court held no. In our view, these things operate much like preliminary injunctions, which although they are temporary in nature, can stretch out for quite a long time while the wheels of justice grind. Cert application to the Hawaii SCT coming, for sure. Any guesses on which way this will come out: Native Hawaiian plaintiffs, water law, 18 years is "temporary?" 
• Looking Back: Charles Reich and His Era (Walter Olson at Cato) - noting the death of Professor Charles Reich, author of the influential Yale Law Review article on "new property." A topic we've hit up from time to time. 
• 'He's finished!' U2 guitarist The Edge's dreams of building $100million family compound on an untouched Malibu mountainside are shattered after he loses a 14-YEAR legal battle (Daily Mail) - In what may be the last chapter of a case we've been following (see California Coastal Development in a Nutshell: Hire Jesus - Moses, Actually - To Sell Your Luxe Home Plans, and Become One With the Mountain), the California Supreme Court denied review of the case, meaning that even a woke rock star can't develop in California.

HAWSCT: PUC Must Consider Whether Renewable Biofuel Energy Plant Might Impact Property Right To Clean And Healthful Environment

On one hand, there's nothing really new in the Hawaii Supreme Court's opinion in In re Hawaii Electric Light Co., No. SCOT-17-630 (May 10, 2019), because the court has previously told us the answers to each the component questions in the case:

• On the ultimate question posed in the title, must the PUC consider whether a power purchase agreement for a Big Island "woody biomass" electric plant might have an effect on a clean and healthy environment by affecting the utility's willingness to purchase electricity generated by more "pure" means such as wind and solar: you don't need to read the 66 page unanimous opinion to know the answer: of course it has to. The statute mostly says so, and you didn't need a deep understanding of the other details in the case to be able to predict about how this one was going to end up, merely the court's history in these kind of cases. Especially where the court was asked to make a procedural ruling, and not one on the merits. 
• The court has already repeatedly told us that an agency must allow third party participation in the decision-making process -- including costly and time-consuming administrative trials ("contested cases" in Hawaii's legal parlance) -- if a statute or rule says the agency must hold some kind of public hearing or if the third party can even remotely claim it has a property interest that possibly could be affected by the agency's decision. Here, it was enough that the energy plant might possibly have some environmental impact (yes, we're being that obtuse on purpose), and that the environment "concerns" the intervenors.  
• The court has already held that the provision in the Hawaii Constitution which sets out the right of everyone to a clean and healthful environment is such a property right, entitling anyone with standing -- an exceedingly low hurdle to clear under Hawaii law -- to procedural due process.   
• The court had also already repeatedly held that an appeal of the agency action to the courts under the Administrative Procedures Act may be taken by any party dissatisfied by the result of an agency hearing, or who is not given an agency hearing. (One thing new in this case: the intervenor doesn't even have to request a contested case, merely intervene. See slip op. at 41-43.)

If those points are all you want to know, there's no need for a deeper dive into the opinion.

But to us, what is new and interesting about this one is the court's conclusion that the property right to a clean and healthful environment not only requires the PUC to conduct an administrative trial, but that as part of the trial, the agency must expressly consider "the reduction of [greenhouse gas] emissions,' which the intervenor third-party Life of the Land (unfortunately abbreviated to "LOL" by the court) asserted were "hidden and long-term costs of the [proposed] facility." Slip op. at 34. It wasn't enough that the PUC determined that the proposed renewable biomass facility would lessen reliance on fossil fuels, it had to expressly consider the argument and respond to it:  

In its findings and conclusions, the PUC found that Hu Honua’s biomass facility may displace fossil fuel generation resources and accelerate the retirement of fossil fuel plants, and noted that its decision to approve the Amended PPA was based on “factors such as the State’s need to limit its dependence on fossil fuels and mitigate against volatility in oil pricing.” These findings and conclusions do not constitute “express consideration” of the reduction of GHG emissions, as provided for under HRS § 269-6(b).

Slip op. at 52-53. 

That sounds remarkably similar to the "burden is on the applicant to disprove all possible impacts" standard which the court has imposed under the public water trust. In short, it's the precautionary principle writ large: when there's any doubt raised, its never a mistake for the agency to deny the requested action. If this impacts the delivery or price of electricity on the Big Island, then so be it; thank the Hawaii Legislature for amending the PUC's statute in 2011 to require the agency to "consider the hidden and long-term costs of reliance on fossil fuels[.]" Slip op. at 50.  

In re Hawaii Electric Light...

Links And Materials From Today's Land Use Institute Sessions, Baltimore

Here are the links from today's two sessions (the first, federal water issues impacting local land use; the second, Bringing and Defending a Takings Case):

• Maui groundwater CWA case
• the public trust along the Indiana shoreline
• tribal fishing rights and ... highway culverts?
• WOTUS: son, they're all my helicopters!
• Auer deference on the chopping block?
• Knick v. Township of Scott - state or federal court for your local government takings claim?
• Litz: Maryland Court of Appeals (Harrell, J.): government inaction when there's a duty to act could lead to inverse condemnation liability.
• We're in Charm City, so we could not escape this latest folly, Baltimore City is attempting to condemn the Preakness horse race: All Your Race Are Belong To Us.

The morning started off with a talk by former Detroit Mayor (and Michigan Supreme Court justice) Dennis Archer, about Poletown, eminent domain, and economic development takings. Interesting stuff. If our ABA Section (State and Local Government Law, which produces the Land Use Institute) allows us to post his talk, we'll do so. 

The Ocean May Be Subject To The Public Trust, But Private Owners Own The Seaweed

We recommend you pick up the opinion of Maine's Supreme Judicial Court in Ross v. Acadian Seaplants, Ltd., No. Was-17-142 (Mar. 28, 2019), because it deals with property rights in an area subject to the public trust. We think the court did a pretty good job of setting out the competing claims and the background of the oft-misunderstood public trust doctrine. 

The issue was whether the public (in this instance, Acadian Seaplants) has the right under the jus publicum to harvest living rockweed, a seaweed which anchors itself to "the rocky ledges that accent [Maine]'s coastline." Slip op. at 1.

Specifically, we are asked to determine whether rockweed is private property that belongs to the adjoining upland landowner who owns the intertidal soil in fee simple, or property that is held in trust by the State through the jus publicum for the public to harvest.

Id.

The court concluded that "rockweed in the intertidal zone belongs to the upland property owner and therefore is not public property, is not held in trust by the State for public use, and cannot be harvested by members of the public as a matter of right." Slip op. at 2. The court summarized the public trust law this way:

In short, the English common law tradition vested both “title” to and “dominion” over the intertidal zone in the crown. Shively v. Bowlby, 152 U.S. 1, 11 (1894). Title—the jus privatum—belonged to the crown “as the sovereign” but was held subject to the public’s rights of “navigation,” “commerce,” and “fishing”—the jus publicum—which the crown held in trust for the public. Id. After the American colonies gained independence, the ownership of intertidal land devolved to the particular state where the intertidal area was located. Phillips Petroleum Co. v. Mississippi, 484 U.S. 469, 476 (1988); Shively, 152 U.S. at 14-15; State v. Leavitt, 105 Me. 76, 78-79, 72 A. 875 (1909).

Slip op. at 7.

Private property rights are recognized in certain areas of the shoreland. In the intertidal zone -- as contrasted to land below the mean high water mark (which is public), and the dry sand beach (which is private) -- the land is privately owned, but not absolutely. It is "subject to certain public rights." Id. at 9.

Read the opinion (pages 12-18) for the reasons why the court concluded -- due to the nature of rockweed, and the "specialized equipment and skiffs required to harvest in in this area -- the right to harvest it belongs to the private upland owners. Overall, the rockweed harvesting did not really look like the usual activities (fishing, navigation) that are done in the water. The court balanced the competing interests, concluding that "Acadian’s activity is qualitatively similar to other uses of the intertidal zone that we have held are outside of the public trust doctrine." Slip op. at 21. 

This opinion is a good read because it shows that mere invocations of the public trust should not be enough to completely discount private property rights. The public trust doctrine, after all, is supposed to be about protecting activities undertaken, and not ownership qua ownership. Check it out.  

Ross v. Acadian Seaplants, Ltd., No. Was-17-142 (Maine Mar. 28, 2019)

HAWSCT's Latest Water Case Isn't About Water

You might think from the caption of the Hawaii Supreme Court's opinion in In re Contested Case Hearing on the Water Use Permit Application Originally Filed by Kukui (Molokai), Inc., No. SCOT-17-0000184 (Dec. 10, 2018), that, oh boy, we were about to get yet another pronunciation on Hawaii's water law from the court.

Alas, not so. Search as you might, there's nothing there that helps or hurts in the water law department. It's only about administrative law. Specifically, when a party to an administrative proceeding has waived their right to demand a contested case (a trial-like proceeding in an administrative agency). 

Long backstory, but here's the short version: when an applicant writes to the agency and states, "This letter is to inform you that Molokai Public Utilities (MPU) does not intend to continue to pursue this case on remand," it's not too surprising that the agency -- and ultimately the Supreme Court -- is going to conclude that this is a waiver of MPU's right to pursue the case on remand. Slip op. at 19. 

And as we know, the Hawaii Supreme Court is particularly open to claims of waiver, especially in water cases. Applicants: the burden is on you. Try and remember that. 

In re Molokai Public Utilities, No. SCOT-17-0000184 (Haw. Dec. 10, 2018)

2018 Brigham-Kanner Property Rights Conference Report: Emerging Issues

Last week, the 15th Annual Brigham-Kanner Property Rights Conference saw the gathering of legal scholars, judges, lawyers, and law students at the William and Mary Law School to award the B-K Property Rights Prize to Cardozo lawprof Stewart Sterk, followed by a day-long conference focusing on Professor Sterk's work and the latest developments in property rights law.

Professor Sterk joins the pantheon of property law scholars (and a judge and a practitioner) who have been awarded the Prize. Pretty impressive:

As always, the program starts off with a candlelight dinner and award presentation in the historic Wren Building, definitely a highlight of the Conference. More about the Conference here. 

And there's nothing like spending the following day addressing some of the most pressing issues in our area, along with the brightest minds in the business (below is the final panel of the day, with Professor John Echeverria of Vermont Law School, Jim Burling of Pacific Legal Foundation, Professor Tim Mulvaney of Texas A & M Law, and Professor James Stern of William and Mary Law). What I really like about the Conference is that it isn't a "mutual admiration society," but that there is true disagreement and debate, all done in a spirit of civility and friendship. 

I spoke on the noontime panel about "Other Emerging Issues in Constitutional Protection of Property" along with Professor James Ely, and colleague Christina Martin (who earlier in the week was second-chairing the Knick arguments). The entire program was videotaped, and I'll post the sessions when they become available. But in the meantime, here's a summary of my remarks on the Emerging Issues panel.

* * * *

Emerging Issues in Property

Good afternoon, my name is Robert Thomas, and I'm a civil rights lawyer. A human rights lawyer. Because, as we all know, private property is a civil right -- importantly, for today's discussion -- a federal civil right.

And that is context which frames the subject of my portion of our panel today about "emerging issues" in property. I'll be focusing on recent trends in the courts, and then try to fit these cases into my internal "matrix,” in which property rights are on a continuum. From "property" rights, to private property rights, ranging from the "baseline" (also otherwise known as "common law," "natural law," "fundamental principles," Lockean, "normative" (and what would an academic conference be without at least a single use of the term "normative?), "Restatement," whatever you want to call it), to state-recognized and state-created property rights.

Fundamental Federal Property Rights

To me, the former is the most fascinating of the emerging issues, especially the Ninth Circuit decision which Professor Brady mentioned, in which the court concluded that the interest on state retirement accounts is not subject to a state court's redefining it out of existence, because interest is a "core" and "traditional" property right that the state could not disavow or define away. This was a very Blackstonian approach, one recognized by Justice Thurgood Marshall in his concurring opinion in PruneYard Shopping Center v. Robins, where he wrote:

I do not understand the Court to suggest that rights of property are to be defined solely by state law, or that there is no federal constitutional barrier to the abrogation of common law rights by Congress or a state government. The constitutional terms "life, liberty, and property" do not derive their meaning solely from the provisions of positive law. They have a normative dimension as well, establishing a sphere of private autonomy which government is bound to respect.

PruneYard, 447 U.S. 74, 93-94 (Marshall, J., concurring) (emphasis added). We have also seen more recently -- although less expressly -- in Murr v. Wisconsin, 137 S. Ct. 1933 (2017), where eight Justices rejected Wisconsin's argument that the state could define and redefine what counts as "property" with a totally free hand. After all, the majority in that case imposed a federal common law multi-factor test for the takings "denominator" (in reality, defining the property at issue). The dissenters also rejected Wisconsin's argument that it alone defined the parcel, concluding that even though state metes and bounds is the starting point in the parcel analysis, it isn't the only thing to look at.

In short are there "background principles of federal law" in the concept of property? (Like Justice Marshall, I think so.)

Thus, the fixation of the Supreme Court on an owner's expectations should mean little in the equation, and it seems to me like judges' judges expectations count for a whole lot more.

That's the first emerging issue, and the most important in my view.

State-Created or State-Recognized Property Rights

The second is that if there's a federal baseline, what about when a state recognizes more rights (not less) as "property?"

Before we get into that, a sidebar observation that I am not certain is all that important, but may be worth exploring. Is there anything to be made of the fact that the Fifth Amendment is the only provision in the constitution that refers to "private" property? The others such as the Due Process clauses of the Fifth and the Fourteenth Amendments, for example, only refer to "property” without the modifier "private."

Here's one recent example where the difference may make a difference.

In In re Maui Electric Co., Hawaii Supreme Court held that the Hawaii Constitution's provision guaranteeing a right to a "clean and healthful environment" is "property." But the District of Columbia Circuit held the opposite in a FERC case reviewing Pennsylvania's similar "clean air and pure water” constitutional provision, concluding it recognized "property," but that's not really "property." You can't sell it, you can't exclude others from it, nor is there any value you can place on it. Thus, to the court, it was not truly property, because it did not fall within the "traditional" concept of property. Thus, it was not due process property. Federal baselines anyone?

The provisions in the Hawaii and Pennsylvania constitutions guaranteeing a clean environment are state-created entitlements like the state job in Board of Regents v. Roth -- something someone has a "legitimate claim of entitlement" to. Like Kaiser Aetna's right to exclude the public from the pre-development fishpond. Cultural rights in the Hawaii telescope case referred to by Professor Callies earlier today, and the procedural rights in the Tenth Circuit's M.A.K. v. Glendale case, where the court concluded that the city's blight designation did not have a direct impact on property in the land (it was merely a designation), but the lack of notice of the blight designation did on the property owner's right to timely appeal the blight designation, the due process property being the state procedures themselves.

A Right to Have the State Protect Property?

The next emerging issue is whether there is a fundamental or baseline property right -- or a state-created property right -- to have the government act to protect your property? Professor Mulvaney has explored this in his recent work on Non-Enforcement Takings, and in the courts we see this played out in several recent interesting cases:

• The Federal Circuit's decision in the Mississippi River-Gulf Outlet case, in which the Court of Federal Claims held after trial that the United States had taken property belonging to Saint Bernard Parish because the Corps of Engineers constructed -- and then failed to maintain -- MRGO, such that when Hurricane Katrina hit, the channel amplified the storm's effects by serving as a bowling alley for the hurricane's force, with Saint Bernard Parish and the Ninth Ward as the pins. The CFC awarded a very large compensation verdict and the government appealed to the Federal Circuit. That court (any guess which judge?) reversed, concluding that as a matter of law, the federal government could never be liable for a taking caused by its inaction, thus adopting a categorical rule in a flood case even though the Supreme Court in Arkansas Game told the lower courts that it wasn't fond of categorical rules.

• We see a state court version of this going the other way in Maryland, where the court held that a local government's failure to enforce it septic tank regulations was the cause of flooding you-know-what onto a nearby campground. That was a taking, even though based on government inaction. This goes back to the distinction between takings and inverse condemnation on one hand, and government's tort liability for negligence on the other.

• We've seen that vibe playing out in the state court litigations in California resulting from last year's devastating wildfires in northern and Southern California and the resulting inverse condemnation claims.

• Finally, this issue has also arisen in lawsuits where taxicab medallion owners have sued local governments for not enforcing those same medallion regulations against ridesharing companies.

To me, these are the most critical "what is property" and what does it mean issues that we should be following.

Two Other Issues

Two other burgeoning issues ripe for clarification:

First, Just Compensation. It has been more than thirty years since the Supreme Court has given us a just compensation case, and it is not because the law of just compensation is remarkably clear.

Two competing threads in compensation law still have yet to be resolved. Whether the purpose of the Just Compensation Clause is to make an owner whole -- indemnity, the "the full and perfect equivalent of the property taken" -- or is it simply to pay for the fair market value of the land alone? We know what the answer should be (the former), but the courts just don't seem to want to get it.

Second, business losses associated with a taking. Same for the fees and costs the owner incurs in defense of her property rights, especially when the government has low-balled valuation. 

One Last Thing: What The Hell is a "Taking?"

And I cannot leave the podium without asking the most fundamental question the Supreme Court has not resolved: what the hell is a taking? It's been nearly 100 years since the Court told us that an exercise of a power other than the eminent domain power can result in a taking, but it still is not sure what a cause of action looks like, most recently evidenced earlier this week in the Knick oral arguments, where it appeared that only two or three of the Justices even understand what an inverse condemnation or regulatory takings lawsuit means, and what property owners who raise these claims want. Most of the questions to counsel on Wednesday were scary because they reflected the Justices' wrong -- and in some cases, bizarre -- assumptions.

I don't see the Justices comparing apples and oranges, but rather they believe they are eating oranges when in fact they have tangerines. Thus, the biggest issue I see is that the majority of Supreme Court does not understand eminent domain law fundamentals. Lacking that analytical foundation, they end up operating under a set of often-wrong assumptions. Assuming, for example, that the inverse condemnation and regulatory takings tangerines are just like the eminent domain oranges they are used to biting into. I do not have a lot of confidence in the Court's ability to lead us out of the doctrinal wilderness -- or at least not make it worse -- after last Wednesday's Knick arguments.

But enough of doom and gloom -- please allow me to end on a more positive note: hearty congratulations to Professor Sterk for a well-earned Brigham-Kanner Property Rights Prize. Welcome to the pantheon of greats, Professor Sterk!

ALI-CLE 2019 Eminent Domain And Land Valuation Litigation Conference, Palm Springs Agenda - Register Now!

You've known for a while that Palm Springs, California, specifically the Renaissance Palm Springs Hotel (a resort facility, but right in town, so you will have many options for "off campus" activities like art museums, the aerial tram, golf, and whatever suits your fancy, and close-in to the Palm Springs Airport), is the venue for our 2019 ALI-CLE Eminent Domain and Land Valuation Litigation, January 24 through 26, 2019.

Of course, you also knew that the programming would be the usual spread of topical and cutting-edge topics, presented by some of the nation's experts. But we didn't give you the details. So here are some of the programs we're having: 

• Keynote Address: "Property Rights: Foundation for a Free Society" - Taylor Revley, most recently the past President of the College of William and Mary, and also former law school Dean (as well as a long-time leader of one of Virginia's most prominent private firms) will deliver the keynote. We're very lucky to have secured his participation, and his talk will focus on both the practical and the theoretical.
• Relocation: we're doing two separate panels on relocation issues. This is a growing area that many of us unfortunately overlook. No longer -- here's your chance to find out the latest: "How to Work Through a Complicated Relocation, From A to Z: Making it Happen" and "Mass Relocation and Navigating Cultural Conflicts: Displacement of Immigrant and Refugee Communities."
• "Knick of Time: A First Look at the Supreme Court's Revisit of Ripeness: Are Takings State or Federal?" We look at the arguments and the Court's opinion in the case that may upend Williamson County ripeness in regulatory and inverse cases against local governments (which may be issued by January).
• "Earth, Wind, (Water) and Fire: A Report From the Front Lines of the Flood and Wildfire Inverse Cases." Flood, wildfire, and other inverse cases present big issues, nationwide. 
• Loss of Access and Damages: How to Prove Just Compensation"
• "Palazzolo, Preexisting Regulations, and Reasonable Likelihood of a Regulatory Takings Judgment as Elements of Just Compensation." Hear directly from the source how you can present the case when preexisting regulations are claimed to depress the market value of land. 
• "Eminent Domain and Property Rights in the Popular Media: How to Respond to Misconceptions and Urban Legends."  Eminent domain and takings stories in the media and social platforms are rife with misinformation. How do you correct the record? 
• Two programs on the hot pipeline issue: the first focuses on challenges to the power to take and environmental and regulatory challenges, while the second is about "Compensation Pitfalls: How to Avoid Problems."
• "Run for the Border: Fence and Wall Condemnations." The idea of building a barrier along the southern border has burst on the headlines - what do you as a takings lawyer need to know?
• "Fight the Power: The Impact and the Valuation of Power Lines in Partial Takings" - takings for energy corridors continue to dominate; find out how this might affect value from lawyers, engineers, and scholars. 

And more (including an Ethics session for those of you who need the MCLE credits).  And the usual 101 track, for those new to the practice, or for experienced lawyers looking for a refresher.

As planning chairs, we've made a special effort to include on the faculty speakers from different backgrounds: property owner lawyers, condemning agency lawyers, right of way professionals, academics, engineers, relocation experts, and appraisers. We think you will like the line up.  

The full agenda, along with the speakers, will be published shortly by ALI-CLE. We'll announce it here, when ready. 

But don't wait, register now here. Early registration and group discounts available. 

Also: we have settled on the 2020 venue, and will make the announcement in Palm Springs. You asked for this venue, and we're bringing it to you!

Earlier this year, we had a fantastic conference in Charleston. Sold out. Attendees reported having a great time, and learning a lot. Our aim is to build and grow the Conference, and you joining us in Palm Springs is another step in that direction.

Ping me if you have questions. 

Links And Materials From Today's Transportation Research Board Session

Here are the cases and other items I either spoke about or mentioned at today's Transportation Research Board's 57th Annual Workshop on Transportation Law in Cambridge, Massachusetts:

• The Colorado public use cases: public use vs. public purpose: Lafayette and Carousel Farms
• On the Supreme Court docket: Violet Dock Port (SCOTUS, Louisiana)
• The Louisiana Supreme Court's ruling on valuation of a unique property (replacement cost vs fair market value)
• "New" property vs. "old" property - environmental rights as "property" (CADC, Hawaii)
• Tribal immunity from eminent domain (CA10, cert denied)
• Public can use the electricity produced, not the land taken (but that's good       enough) (SD)
• Utility takings: Claremont (Cal), Missoula (Montana)
• Post-Kelo statutes: how effective? (Georgia)
• The relationship between condemnation and inverse: Stimson (NC)
• Inverse vs. tort, part II: MR/GO and Katrina flooding (CAFED)
• Maryland: government inaction could result in inverse liability (Maryland)
• Objecting to eminent domain is a political opinion (CA9)
• Highest and Best Use could include "conceptual plans" (Florida)
• Causing a nonprofit to lose even more money is considered compensable "goodwill" under California law (California)
• Billboard valuation - loss of income isn't compensable, but there is more that one way to still get it (NC)
• Larger parcel, quick take deposit (Hawaii)
• Here's the amicus brief we filed in the above case, which cites Baetjer v. United States, 143 F.2d 391, 395 (1st Cir.) (condemnation on island of Vieques caused severance damages to parcels on Puerto Rico), cert. denied, 323 U.S. 772 (1944).
• Federal Relocation Act, inverse condemnation, and attorney fees  (West Virginia)
• The larger parcel in inverse cases (aka the "denominator" issue) (SCOTUS)
• Bye bye, Williamson County? (SCOTUS)
• Palazzolo applied (NY)
• Judicial Takings Redux - Martin's Beach (SCOTUS)

Thanks to my fellow speakers -- Bernadette Duran-Brown and Laura Curry -- and to the organizers of the Conference for asking me to be here. 

Arizona Takings: Condemnation Summit XXII

Thanks to colleague Chris Kramer, we'll be speaking later this week (Friday, May 4, 2018) in Phoenix at the 22nd Condemnation Summit at the Arizona Biltmore.

Our session will cover "Condemnation Trends: Nationwide & Arizona." The rest of the day's agenda looks mighty good too, with session on valuation of easements, paying for transportation infrastructure, airport takings, and a presentation by Justice Lopez of the Arizona Supreme Court. Well worth the very affordable $129 registration cost.

Sign up here.

See you there!

Land Use Institute - Cases And Links From Today's Session On Federal Laws And Local Land Use Decision Making: Water

Here are the cases and materials I either discussed, or planned to discuss (but ran out of time), in this morning's session at the 32nd Annual Land Use Institute:

• Kaiser Aetna v. United States, 444 U.S. 164 (1979) (establishing that "navigability" for purposes of regulation is different in kind from navigability for purposes of the right to exclude (navigational servitude)). 
• Williamson County ripeness at risk: Knick v. Township of Scott, No.  17-647 (cert. granted Mar. 5, 2018). 
• Equal Footing Doctrine, Public Trust, and the public-private boundary on littoral property: Gunderson v. Indiana, No. 46S03-17060PL-423 (Indiana, Feb. 14, 2018),
• Hawaii Wildlife Fund v. County of Maui, No. 15-17447 (9th Cir. Feb. 1, 2018) (CWA permits, "point source," and treated wastewater discharge).
• Washington v. United States, No. 17-268 (Indian treaties, state highways, and blockage of salmon). Oral argument transcript here. 
• Public Service Co. of New Mexico v. Barboan, No. 17-756 (cert. petition filed Nov. 27, 2017) (is land only partially owned by an Indian tribe immune from a state's power of eminent domain?).
• The (federal) Uniform Relocation Act and attorneys' fees in inverse condemnation cases: Long v. South Dakota, No.  17-1168 (cert. petition filed Feb. 19, 2018).

Land Use Institute - Detroit

We're in Detroit the rest of the week at the Mercy Law School for the venerable Land Use Institute, now in its 32nd iteration.

Planning Chair Frank Schnidman has assembled a great faculty including out Detroit colleague Alan Ackerman (above, talking about takings liability for flooding), and we'll be spending the time talking inverse condemnation, public trust, planning law, homelessness, autonomous vehicles, affordable housing, RULIPA, and similar topics. We'll be presenting on "Eminent Domain, Vested Rights, and Regulatory Takings," "Client Representation: Developer, Government, and Citizens Groups," and "Federal Laws Affecting Local Land Use Decision Making." 

If you are here with us in Detroit, stop by and say hello. If you aren't here, shame on you! This is one of the best and most affordable tuition deals in CLE.

But all kidding aside, if you are not in Detroit now, be sure to calendar these two dates:

• 2018 Land Use Institute: April 11-12, 2019, Baltimore, MD (Royal Sonesta Harbor Court Hotel)
• 2020 Land Use Institute: April 23-24, 2020, Tampa, FL (Le Meridien Tampa)

Reserve the dates!

Department Of Precrime: HAWSCT Considers Cultural "Property" In Public Land

Remember the Tom Cruise/Steven Spielberg flick Minority Report? That's the one based on Philip K. Dick's short story in which the police force's PreCrime unit can presage that a citizen will violate the law in the future, so they arrest him now even though he has committed no crime. 

That's the same vibe we get from the recent oral arguments in a case in which the Hawaii Supreme Court is being asked to resolve two fundamental questions in the latest case involving the Thirty Meter Telescope up on the top of the Big Island's Mauna Kea.  

First, whether someone can possess a cultural property interest in publicly-owned land. Flores, a native Hawaiian, asserted he had such an interest in the land on which the telescope is planned. Second, if so, whether the State land agency's consenting to the University of Hawaii's sublease of that land to the TMT puts Flores' interests in jeopardy, and thus the only way to protect that interest is for the agency to conduct an administrative trial, otherwise known as a "contested case," and not merely a public hearing in which all are invited.  

If the answers to both questions are yes, then the agency should have granted Flores' request for a contested case under the Administrative Procedures Act prior to consenting to the sublease, and its failure to do so means the sublease is void. 

We don't think there's much of a question on the first issue. The court has already decided in a series of cases that native Hawaiians can possess an interest in publicly-owned land, at least generally. The Hawaii Constitution says it, after all. We've questioned whether these type of property rights are truly property rights, but we can at least say with some confidence that they are entitlements (New Property!) and public rights, even if they do not rise to the level of private property rights. 

But that alone does not solve the puzzle, because it doesn't address the second, harder question, the one that lies at the heart of the case: whether granting the TMT a sublease actually affected Flores' rights. The Hawaii Supreme Court has never made clear whether in order to be granted an administrative trial, a person need only show that their rights may be affected by the agency action, or whether those rights must actually be affected by the action.  

That's a critical difference, and one which the Justices focused on intently at last week's oral arguments. If the standard is "might be" affected as Flores argued, you can easily see how there will be almost no limit to these demands, because it isn't too difficult to imagine how nearly every agency action could conceivably affect someone's rights, especially when the court construes these rights as broadly as it does Hawaiian and environmental interests. If, however, the standard is "actually" affected, the scope of when agencies must hold contested cases will be significantly narrower.

Another related issue is whether it is the claimant's burden to make a showing of how the agency action specifically will jeopardize her interests, or is it enough for the claimant to make the demand, at which point it becomes the agency's burden to demonstrate there's no possible way that its actions might affect those interests, something that the court hinted at in its last TMT decision? 

And that's where our Minority Report vibe comes from. Because it appears to us that instead of showing how the sublease to the TMT has actually impacted his interests, at best Flores is arguing that -- despite the law and the sublease itself prohibiting the TMT from interfering -- it may do so in the future, so he should be provided with process now. Precrime. 

With that background, stream the recording here, or download the mp3 file at the Judiciary website and listen.

The Justices zeroed right in during the agency's and the University's opening arguments, spending a majority of the time quizzing both the Solicitor General and the UH's counsel whether the agency's consent to the sublease actually affected Flores' rights. No, they responded, it didn't, because the sublease itself recognizes that native Hawaiian rights and practices are not affected one way or the other, and therefore his interests were not in jeopardy. Moreover, his interests could not be affected, because even without such a provision, Hawaii law requires those interests remain the same upon a transfer: 

JUSTICE MCKENNA: Is the State arguing or conceding that such a provision [a provision in the sublease requiring the TMT to protect Hawaiian practices] would be required in order to protect native Hawaiian interests?

MR. WADSWORTH: No, Your Honor. Under Pele Defense Fund, by law whatever right Mr. Flores has to access subleased land for cultural purposes remains the same ... this court has already protected native Hawaiian rights under Pele Defense Fund... 

Flores' brief was not much help, and it was noticeably light on this point, spending a lot of time arguing broadly that he has an interest in the subleased land (we don't think anyone really disputes that), then asserting the sublease affects that interest because it gives possession of the land to the TMT, and that it "would have the right to exclude those attempting to access the subleased premises." Br. at 18 (citing 25 Am. Jur. 2d Ejectment 6; Restatement (Second) of Torts § 165, but notably lacking a record cite).

That, we think, is going to be the crux of the case. And were this land anywhere but Hawaii, the brief might have a point. But this is the jurisdiction which holds that "western" notions of property such as the right to exclude don't necessarily apply to land. See Public Access Shoreline Hawaii v. Hawaii County Planning Comm'n, 79 Haw. 425, 903 P.2d 1246 (1995) (certain "western concepts" of property are "not universally applicable in Hawaii"). Under PASH and its progeny, every parcel of less than fully developed land is subject to a public easement for cultural practitioners. The only interest which the TMT got by way of the sublease was the right of possession and enjoyment of the land, both of which are by law subject to Flores' PASH interests, so he could not legally be excluded, and apparently has not been. All Flores could argue (again lacking a record cite) is that he "is likely to be excluded." Br. at 18. If TMT were to do so, that would obviously happen in the future. Flores hasn't actually been excluded and he cannot be excluded by law, so it appears very unlikely that TMT would exclude him.  

Chief Justice Recktenwald probed about what, if anything, is actually different in the way the University used the land, and how the sublessee TMT will use it:  

THE CHIEF JUSTICE: But doesn't [the TMT] have the ability to exclude Mr. Flores and other practitioners from the property? And what if they choose to exercise that in a way that's different than they way in which the University has exercised it up until now? 

This point was picked up by Justice McKenna, when she emphasized that the law governs, even over contrary or silent lease terms:

JUSTICE MCKENNA: I think what Justice Pollack is asking, which I think is the same question that I am asking is that would such a provision be required in order to not require a contested case hearing? ... 

The SG reemphasized that the TMT is prohibited by law from interfering with Flores' practices, but when asked directly by Justice Pollack whether "so wouldn't the answer to the Chief Justice's question be "no ... isn't that your position that they would not have the right to exclude native Hawaiian practitioners?," the SG responded that he could not agree because he couldn't really say whether subleasing the land will have an effect.

However, he immediately backed away from that seemingly damaging concession, arguing that merely claiming to be impacted does not trigger a contested case, because there also "must be a risk of erroneous deprivation of that right," something he argued could not happen here. This latter point was picked up by Justice McKenna, when she reemphasized that the law governs, even if the lease was silent: 

JUSTICE MCKENNA: In fact, this court has repeatedly stated as we repeated [in the Gabriel case] that a contract is presumed to include all applicable statutes and settled law related to the subject matter. So therefore, the constitution would trump any lease provision, correct? 

MR. WADSWORTH: Yes, Your Honor. 

Flores' brief identified another property interest which he claimed entitled him to a contested case, which he wisely did not press during oral argument: that because the University has an interest in the subleased land, Flores is entitled to a contested case. We view this as a pretty silly argument, because whether you get a contested case depends on whether you possess property, not someone else. Of course the University has a property interest at stake, but that doesn't mean Flores needs a trial to protect his interest, whatever it might be. That's mixing mountain apples and Kona oranges, man.  

The agency's and the University's counsel bolstered their main point that by law the sublease could not have affected Flores' interests with the argument that the only agency action which could trigger a contested case was one in which "use" of the property was at stake. Changing use of the land, as opposed to the tenant, is where Flores' rights could be affected. Because the sublease does not permit the TMT to actually build the telescope, Flores' rights are not in jeopardy. This is related to their argument that Flores' rights were already being protected in the contested case in the parallel action involving the issuance of the Conservation District Use Permit. Thus, there's no need to repeat that process again:

MR. WADSWORTH: The sublease consent won't affect Mr. Flores' right to exercise his cultural practices, and there's no risk he will be deprived of that right. At bottom, Mr. Flores' complaint is about the planned TMT observatory and its potential impact on his cultural practices. But those issues have been fully litigated and evaluated in a contested case hearing on the use permit in which Mr. Flores is also a party. In these circumstances, due process does not require another contested case hearing.

The Justices wanted to know whether it would make a difference if there wasn't another parallel admin proceeding going on in which Flores could assert his interest in the land. For example:

JUSTICE WILSON: You mentioned that there's already been a contested case hearing, and as a consequence, there's been an adjudication of whatever customary and traditional rights might apply with respect to Mr. Flores, correct?

MR. WADSWORTH: That's correct, Your Honor.

JUSTICE WILSON: Okay, so let's assume there hadn't been such a hearing. And that in fact what we had before us was the same set of facts except there hadn't been a hearing on the Conservation District Use Permit. Would your position be any different? Would you feel at that point that there'd be an argument for a contested case hearing?

MR. WADSWORTH: Well it depends on application of the Sandy Beach* test, Your Honor. Under Sandy Beach and Maui Electric, this court weighs three factors in determining whether due process requires a contested case hearing....

Recall that in the earlier case, the Supreme Court whacked the same agency and voided its approval of the construction of the telescope -- not because it failed to hold a contested case, but because it only conducted the trial after it tentatively approved the project. See our post on that case "Carts Before Horses, And Pearls Before Swine: The Hawaii Supreme Court's Fractured Rationale For Invalidating The TMT Permit." After this ruling, the agency on remand held a contested case in which Flores is a party. The agency and the University seemed to be arguing for a form of administrative res judicata, even though neither couched it that way. To us, that seems like a dead end because if Flores' rights are being impacted by two separate agency actions, why not two contested cases?   

The SG reiterated that Flores' rights won't change whether UH holds the land or whether it is the TMT: "Mr. Flores' right to exercise his native Hawaiian cultural practices will remain the same, both under Hawaii law and the express terms of the sublease. Regardless of whether UH or [TMT] has possession of the land."

The answer here, we think, is more one of ripeness and record. There's no evidence we can see that the sublease, as written, actually and presently affects Flores' rights. It doesn't expressly prevent him from doing anything, it doesn't exclude him from the land, and indeed, it likely could not affect him because if it did, any such provision would be void. 

But might subleasing the land to the TMT somehow affect his rights? Of course. Certainly anything is possible. Our view is if that were to happen down the road, then Flores would likely have standing to challenge the lease in court in an original jurisdiction action.   

We're not going to hazard a guess about where the majority of the Justices end up. If the court denies Flores a contested case, it may do so (somewhat ironically) by reaffirming the power of PASH and similar cases which bolster Hawaiian rights. Or, we might be victims of a weakly drafted statute, which defines a "contested case" as "a proceeding in which the legal rights, duties, or privileges of specific parties are required by law to be determined after an opportunity for agency hearing," and the Justices could focus on the "to be determined" language and conclude that a person demanding a contested case doesn't need to show they are presently impacted, because the contested case itself is how you make that determination. But that's a recipe for endless agency process -- death by a thousand days -- because it would lead (as it has done here) to claimants who wish to slow walk the process segmenting their claims and demanding separate trials every time the agency makes a decision. 

In the end, we go back to our Minority Report precrime analogy. When a claimant doesn't put into the record any evidence that a sublessee has limited his rights, where the law prohibits the sublessee from doing so, and where there's only an allegation by the person seeking a contested case that he "is likely to be excluded" from exercising his rights, the courts should presume that the agency is acting in accordance with the law, until shown otherwise. As Chief Justice Recktenwald asked: 

THE CHIEF JUSTICE: Could you come back to my question? What if ... does it rise to the level of a protected interest if Mr. Flores is concerned that the new ... sublessee may have a different policy -- or different attitude towards allowing him to practice his cultural practices on that land? In other words, we don't know what [the TMT's] policy is going to be, they may be more restrictive, they may be, say "well, you know that on certain days of the week he can only come on once a month?"

Concern isn't enough. The fact that "we don't know what the TMT's policy is going to be" to us should resolve this case in the agency's and UH's favor; lacking more in the record, there need not have been a contested case here. When and if the TMT does something that actually interferes or threatens to interfere with Flores' practices on the land, he can always challenge that action on a ripe factual record in an original jurisdiction action. 

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

*referring to Sandy Beach Defense Fund v. City Council, 733 P.2d 250 (Haw. 1989), a case under the Due Process Clause in which we were one of the counsel. 

April 19-20, 2018: Land Use Institute, Detroit (Printable Brochure)

Here's the printable brochure with the details on the 32nd Annual Land Use Institute in Detroit, April 19-20, 2018. We've plugged the program before so we won't do so again, except to say that you really should attend because (1) it's a very good program that won't take much of your time (fly in for the Thursday afternoon program, stay a night, fly home on Friday evening); (2) Detroit is the place to be these days; and (3) it's one of the best deals in CLE credits, with tuition as low as $400.

2018 Land Use Institute Brochure Detroit 5 2018

New Cert Petition: Beach Access, Temporary And Permanent Takings, And Permits To Exercise The Right To Exclude

Here's the cert petition, filed today by SCOTUS superstar Paul Clement in a case we've been following out of Northern California.

Here are the Questions Presented:

This case involves a stretch of private property along the California coast known as Martins Beach. The California Coastal Commission and the County of San Mateo want Martins Beach to be open to the public, but they do not want to pay to purchase the property, or even for an easement. Instead, they have taken the position that the owner of the property cannot exclude the public unless it first obtains a permit deemed necessary for any change, including a decrease, in the “intensity” of the public’s use of or access to the ocean under the California Coastal Act. In their view, because the previous owner of Martins Beach chose to allow members of the public to access the property upon payment of a fee, the current owner must do so as well—and on the exact same terms, no less—unless and until it obtains a permit allowing it to do otherwise.

Respondent Surfrider Foundation took up their cause and convinced the state courts to accept that capacious interpretation of the Coastal Act and to enjoin petitioner from excluding the public from its private property unless and until it obtains a “coastal development permit” allowing it to do so. While the court below recognized that this injunction against exercising the right to exclude constitutes a textbook physical invasion of private property, it nonetheless concluded—in a decision that deepens an entrenched split among the lower courts—that it is not a compensable taking because the possibility of obtaining a permit renders the physical taking “temporary,” and only “permanent” physical takings qualify as per se takings. Thus, under the decision below, petitioner is entitled to zero compensation for a compelled public easement across its private property because of the possibility petitioner could one day obtain a permit allowing it to exercise the most foundational property right, i.e., the right to exclude.

The questions presented are:

1. Whether a compulsory public-access easement of indefinite duration is a per se physical taking.

2. Whether applying the California Coastal Act to require the owner of private beachfront property to apply for a permit before excluding the public from its private property; closing or changing the hours, prices, or days of operation of a private business on its private property; or even declining to advertise public access to its private property, violates the Takings Clause, the Due Process Clause, and/or the First Amendment.

More soon.

Related articles

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Eminent Domain Abuse, Coming To A Theater Near You

Hawaii Business Magazine Asks: "How Much Will Rail Cost Us In the End?" Our Answer: As Much As It Takes

Indiana: Equal Footing Doctrine Means Public Owns Up To The Ordinary High Water Mark

Update: thanks to Daniel Lehmann for keying us in to this case, now being reviewed by the Supreme Court, involving the foundational question of whether title to Equal Footing Doctrine submerged lands is a question of state or federal law. Scheduled for the Court's 2/16/2018 conference.

* * * *

In our experience, rationality often takes a second chair when delving into the question of who may own various parts of beaches. It's certainly true in our home jurisdiction, where any claims to private rights anywhere near a beach can be met with howls of protest, regardless of what the law might actually provide in any given circumstance. Trying to unwrap these cases can be an exercise in frustration, and if you don't understand the background and politics -- the "real story" -- you can't really say you understand a decision.

That is what we're wondering about the Indiana Supreme Court's long-awaited opinion in Gunderson v. Indiana, No. 46S03-17060PL-423 (Feb. 14, 2018), in which the court concluded that the public, and not the Gundersons, owned the area below Lake Michigan's ordinary mean high water mark. We have read the opinion, and the court frames the issue the same we see it: "What is the precise boundary at which the State’s ownership interest ends and private property interests begin?" Slip op. at 1. But what, if anything, in the real story here and what other forces are at play other than those we read in the opinion and briefs? We wish we knew.

The case is a property lawyer's delight, full of things like the Equal Footing Doctrine, the Northwest Ordinance, public trust, Shively v. Bowlby, 152 U.S. 1 (1894), and Martin v. Waddell’s Lessee, 41 U.S. (16 Pet.) 367 (1842). (If you don't need to look up any of these terms, congratulations - you are officially a property law geek.) We recommend you read the opinion yourself; it isn't that long (29 pages) you will be entertained for sure. 

Here's the short version: everyone actually agreed that the ordinary mean high water mark -- or, as the case cryptically shortens it "OHWM" -- is the boundary between public land and the Gunderson's private property. The big question was where was that line? The plat map of the owners' lots, which they can trace back to an 1837 federal land patent, say they own up to the "Lake Edge." In 2010, however, the Town of Long Beach adopted what the court refers to as an "administrative boundary" which set the public-private boundary landward of where the the Gundersons thought it was. The court framed the issue this way:  

The basic controversy here is whether the State holds exclusive title to the exposed shore of Lake Michigan up to the OHWM, or whether the Gundersons, as riparian property owners, hold title to the water’s edge, thus excluding public use of the beach. All parties agree that land below Lake Michigan’s OHWM is held in trust for public use. The legal dispute relates to the precise location of that OHWM: whereas the Gundersons argue that it lies wherever the water meets the land at any given moment, the State and Intervenors locate the boundary further landward to include the exposed shore.

Resolution of this case entails a two-part analysis: First, we must determine the boundary of the bed of Lake Michigan that originally passed to Indiana at statehood in 1816. Second, we must decide whether the State has since relinquished title to land within that boundary. The former question is a matter of federal law; the latter inquiry, a matter of state law. Oregon ex rel. State Land Bd. v. Corvallis Sand & Gravel Co., 429 U.S. 363, 376-77 (1977) (“[D]etermination of the initial boundary between [the beds of navigable waters] acquired under the equal-footing doctrine, and riparian fast lands [is] a matter of federal law . . . [whereas] subsequent changes in the contour of the land, as well as subsequent transfers of the land, are governed by the state law.”).

Slip op. at 6-7 (footnote omitted). 

The court concluded that at statehood, the Equal Footing Doctrine gave the State title to submerged lands. The Gundersons argued this means just what their documents say: right up to the lake edge, where ever that is at the moment. The State, by contrast, argued this means the OHWM. The court held that the Northwest Ordinance did not shift the line or alter the State's title, and that the Gundersons' deed and other documents did not either, because although the federal government had the power in 1827 to convey Equal Footing submerged lands to private interests, such a conveyance must have been explicit, which it was not here. 

The heart of the opinion starts on page 13 of the slip opinion, where the court concludes that the public-private boundary is the OHWM, and not the water's edge. The court acknowledged that the U.S. Supreme Court cases on this issue are not 100% clear or consistent (some, for example, merely mention "submerged" land, or those "bounded by navigable waters"), but concluded that those terms really mean OHWM. The court relied on the Corvallis Sand & Gavel case, which noted that the states own riparian land "between the high and low water mark, as well as the bed of the river[.]" Slip op. at 14. 

After siding with the State that the public cannot give up its public trust ownership except in unusual circumstances, the court agreed with the property owners that the state agency's attempt to alter the public-private line established by the Equal Footing and related doctrines by defining where the OHWM is located was ineffective. These regulations defined OHWM is a more clear fashion, which the government asserted was better because they provided more certainty than the common law doctrines. Perhaps so, but the court concluded that a state agency cannot amend the law, only the legislature can. Besides, there's a natural symmetry to a legally-defined (but moving) boundary:

The common-law OHWM is a moveable boundary subject to the natural variability of the shoreline. Bureau of Land Mgmt., Manual of Surveying Instructions at 81 (“When by action of water the bed of the body of water changes, the OHWM changes, and the ownership of adjoining land progresses with it.”). Riparian boundary law relies on the adaptive doctrines of accretion and erosion to account for these shoreline dynamics. Under the accretion doctrine, the riparian landowner gains property as the OHWM shifts lakeward due to the gradual deposit of sand or other material. Bath v. Courts, 459 N.E.2d 72, 74 (Ind. Ct. App. 1984). The doctrine of erosion, by contrast, has the opposite effect: the riparian landowner loses property as the boundary shifts landward due to the gradual loss of shoreline. 93 C.J.S. Waters § 187 (2017). These doctrines operate to maintain the status quo of relative rights to the shores of navigable waters. While the physical boundary shifts (e.g., shelving or terrestrial vegetation) the legal relationships—private riparian ownership and public trust title—remain the same. In other words, while accretion or erosion may change the actual location of the OHWM, the legal boundary remains the OHWM.

Slip op. at 25 (footnotes omitted). What we refer to as the "bitter and sweet" approach to accretion and erosion. Thus, the court concluded the natural OHWM is the public-private boundary, not the the line in the rules promulgated by the agency.

Finally, the court rejected the argument that any public trust uses other than those previously recognized by common-law tradition would be a taking: fishing, commerce, and navigation. The court held that it would not be a taking for either the legislature or the courts to expand the scope of the public's use of public trust property, and since the legislature hasn't acted, the court would. Slip op. at 23 ("Absent a statutory framework of public trust rights in the shores of Lake Michigan, this Court retains its common law powers to articulate—and even expand—the scope of protected uses."). Thus, the public may "at minimum" walk on land below the OHWM without infringing on the littoral owner's property rights.  

But the court declined to expand it further, deferring to the Indiana Legislature on that one. 

The local paper covered the story: "Indiana Supreme Court rules Lake Michigan shoreline belongs to all Hoosiers." 

Will this be the last stop for this case, or will there be a cert petition? Stay tuned, as always. 

Gunderson v. Indiana, No. 46S03-17060PL-423 (Ind. Feb. 14, 2018) 

Back to the Future of Land Use Regulation - Brigham-Kanner Article

Here's the (draft) article from our poriton of the first panel at the 2017 Brigham-Kanner Conference, "Back to the Future of Land Use Regulation." (Also posted on SSRN here.)

This is an expanded version of our talk (listen to the audio here) during the Conference during which the William and Mary Law School awarded U. Hawaii lawprof David Callies the Brigham-Kanner Prize. Our summary of the conference is posted here.

We were part of the panel entitled "The Future of Land Regulation and a Tribute to David Callies," along with Professors Shelly Saxer and Jim Ely, and past B-K Prize winner Michael Berger. Professor Callies also delivered his opening remarks during this session.

This article has been submitted to the Brigham-Kanner Property Conference Journal which should be published later this year. 

Back to the Future of Land Use Regulation (draft Feb 11, 2018) (forthcoming Brigham-Kanner Property Rights...

How Do You Exclude Someone From A Clean And Healthful Environment? Hawaii Supreme Court Rules The Public Has A Property Right In The Environment

What better way to bid farewell to 2017 than with a whopper case from the Hawaii Supreme Court? And we're not exaggerating -- this one is really big.  

Now you might think that given the amount of time this blog devotes to property interests and property rights, we'd be downright tickled when our home court -- which may not be the friendliest court in the land for property owners and property rights -- goes against expectations and actually recognizes a constitutional property right. A right that, as far as we can tell, no other court, state or federal, has ever recognized.

Despite the Hawaii Supreme Court's recognition of a property right, however, we're not at all on board, because In re Maui Electric Co., No. SCWC-15-0000640 (Dec. 14, 2017), concluded the Sierra Club possesses a constitutional property right in a "clean and healthful environment" entitling the organization to due process protections. This allowed the Club to intervene in a Public Utilities Commission petition regarding a power purchase agreement for a now-defunct electric plant on Maui.

Read that again in case it didn't quite sink in: the court recognized a property right in a clean and healthful environment.

Before we get to our thoughts about why we characterize this as a whopper conclusion, some background.

A Defunct Coal-Powered Sugar Power Plant

Maui Electric filed an application with the State PUC, seeking the Commission's approval of an agreement between the utility and Hawaiian Commercial and Sugar Company which, if approved, would allow a rate increase to account for the additional production charges associated with the Puunene Plant, a coal-powered facility on former sugar lands in central Maui which transformed bagasse, the byproduct of sugar production, into electric power. We use the past tense because by the time the Supreme Court decided the case, the plant had closed, following the recent closure of the sugar plantation. No sugar plantation, no sugar, no bagasse.

Sierra Club asked the PUC to intervene in the administrative process under the PUC's rules, asserting its own rights as well as several of its Maui members. The power plant, the petition asserted, would "impact Sierra Club's members' health, aesthetic, and recreational interests. Sierra Club also asserted its organizational interest in reducing Hawaii's dependence on imported fossil fuels and advancing a clean energy grid." Slip op. at 5.

Standing vs. Administrative Intervention

Pretty vague stuff, and more like policy questions than something best resolved by an adjudicative proceeding, but under existing judicial standing rules in similar cases in original jurisdiction actions brought in Hawaii courts, nothing too far from the norm. There's little doubt that if this were a case brought in a Hawaii trial court, that Sierra Club adequately alleged judicial standing. Anyone questioning that conclusion need only recall the Superferry case in which the Hawaii Supreme Court held that Sierra Club had standing to raise an environmental challenge to the now-defunct inter-island ferry because the ferry threatened the organization with four types of injury: (1) endangered species could be adversely impacted by a high-speed ferry; (2) the Superferry could increase the introduction of alien species; (3) surfers, divers, and canoe paddlers who use Kahului Harbor could suffer adverse impacts; and (4) the threat of increased traffic on the road next to the harbor entrance. Again, that's a pretty vague connect-the-dots logic to gain standing. But for better or worse, that's the current state of Hawaii's standing law. 

However, the Maui Electric case was not an original jurisdiction action, it was an administrative proceeding in the Commission under the PUC's admin rules, governed by a different standard, one based in the Hawaii Administrative Procedures Act. Under the APA, an outsider may intervene in a "contested case" (an quasi-judicial adjudicative administrative process) when an agency rule or a statute gives the party a seat at the table, or when intervention is required by law because the agency is adjudicating that party's rights (in this case, the law was the Hawaii Constitution's due process clause). See Kaleikini v. Thielen, 237 P.3d 1067, 1082-83 (Haw. 2010).

Here, the Sierra Club alleged both that PUC statutes and the Hawaii Constitution's procedural due process protections gave it the right to intervene in the agency proceedings:

Sierra Club argued that its members were concerned that the Puunene Plant relied too heavily on coal in order to meet its power obligations under the existing agreement and also that its members were concerned "about the public health and visibility impacts of burning coal."

Slip op. at 5.

Intervention Denied

Neither the PUC nor the court of appeals bought the Sierra Club's theory. The Commission denied intervention and decided Maui Electric's application without the Club's presence. The Club appealed to the Intermediate Court of Appeals which agreed with Maui Electric and dismissed the appeal for lack of jurisdiction. It concluded that because Sierra Club was not "aggrieved" by the decision by the PUC (because it correctly excluded the Club form the case), the appellate court did not have jurisdiction. 

At Long Last, a Vehicle for the Supreme Court

The issue had been brewing in Hawaii's agencies and lower courts for awhile, and giving the current Hawaii Supreme Court the opportunity to make this ruling had been on wish lists at least since former Governor Neil Abercrombie appointed the majority of the five Justice court back in 2014. But until now, this issue (and others with a similar approach -- recognizing certain rights in the Hawaii Constitution as property, for example) had never secured the necessary three votes.

So up to the Hawaii Supreme Court they went, on the same two theories: the Club should have been allowed to intervene, either because the PUC's governing statutes gave it the right to do so, or because due process required it because the Club's property was at stake in the PUC proceeding.

Three-Justice Majority: No Statutory Right to Intervene, But Sierra Club Owns "Property"

The Gov. Abercrombie-appointed three Justice majority, in an opinion authored by Justice Pollack, rejected two arguments which could have avoided this difficult and groundbreaking result. First, as we noted above, by the time the case reached the court, the Puunene Plant was offline, a victim of Hawaii's loss of the sugar industry. Maui Electric argued the Sierra Club's appeal was thus moot and the court should dismiss. Or, the majority might have combed through the PUC's statutes and concluded that Sierra Club possessed a statutory (and not a constitutional) right to intervene.

But the majority accepted neither argument, first concluding that the case even though moot was nonetheless crying out for resolution by the court (the so-called "public interest" exception to the usual mootness rules), and also rejecting Sierra Club's claim for a statutory right to intervene. See slip op. at 12-15 for the majority's mootness analysis, and pages 19-21 for its rejection of the statutory argument.

Having disposed of these preliminaries, the court got to the constitutional question: does the Hawaii Constitution recognize Sierra Club's environmental concerns as a property interest entitling it to procedural due process?

The majority based its conclusion on Article XI, section 9 of the Hawaii Constitution (a provision added by the 1978 constitutional convention):

Each person has the right to a clean and healthful environment, as defined by laws relating to environmental quality, including control of pollution and conservation, protection and enhancement of natural resources. Any person may enforce this right against any party, public or private, through appropriate legal proceedings, subject to reasonable limitations and regulation as provided by law.

That, the majority held, created a legitimate claim of entitlement to a clean and healthful environment, and thus it is a property right. It "is a substantive right guaranteed to each person." Slip op. at 23-24. The majority noted that the court had earlier held that Native Hawaiian rights -- a right also found in the Hawaii Constitution -- are "property" rights, and that environmental concerns are no different. Slip op. at 23 (citing In re Īao Ground Water Mgmt. Area High-Level Source Water Use Permit Applications, 287 P.3d 129, 142 (Haw. 2012)). As a self-executing right, it is a legitimate entitlement.

Interestingly, the majority seemed to anticipate criticisms of this conclusion by noting that the constitutional text itself limited this property right to being exercised within the framework of existing environmental statutues, rules, and ordinances. This will, the majority reasoned, keep things in check. What made it interesting is that the opinion concluded that the very PUC statutes which it had earlier rejected as providing Sierra Club with the right to intervene, were environmental statutes that gave it a property right to intervene.

We therefore conclude that HRS Chapter 269 is a law relating to environmental quality that defines the right to a clean and healthful environment under article XI, section 9 by providing that express consideration be given to reduction of greenhouse gas emissions in the decision-making of the Commission. Accordingly, we hold that Sierra Club has established a legitimate claim of entitlement to a clean and healthful environment under article XI, section 9 and HRS Chapter 269.

Slip op. at 34-35.

After reaching the conclusion that Sierra Club owns property in a clean and healthful environment, it was all over but the shouting and the majority held that the PUC had a duty to provide a hearing before it deprived the Club of its property:

The risks of an erroneous deprivation are high in this case absent the protections provided by a contested case hearing, particularly in light of the potential long-term impact on the air quality in the area, the denial of Sierra Club’s motion for intervention or participation in the proceeding, and the absence of other proceedings in which Sierra Club could have a meaningful opportunity to be heard concerning HC&S’s performance of the Agreement.

Slip op. at 30.

Finally, in a footnote, the majority made it clear that the result is immune from future legislative tinkering. This is a ruling based on the Hawaii Constitution, and thus no mere legislature can mess with it too much. See slip op. at 43 & n.33 ("Our ultimate authority is the Constitution; and the courts, not the legislature, are the ultimate interpreters of the Constitution."). 

Two-Justice Dissent

We won't walk through the complete rationale of the two-Justice dissent, because it is a relatively short 20 pages, and it would be easier for you to read it yourself. In sum, Chief Justice Recktenwald (joined by Justice Nakayama), would have concluded that neither the PUC statutes nor Hawaii's due process clause gave Sierra Club the right to intervene in the power plant's PUC application. The dissenters warned of "unintended" consequences which will flow from this decision:

Respectfully, the Majority’s expansive interpretation of what constitutes a protected property interest in these circumstances may have unintended consequences in other contexts, such as statutes where the legislature has mandated consideration of specific factors by executive agencies when implementing a statute.

Dissent at 14.

The dissent concluded the majority's result was unnecessary, because it was more of a policy choice than a judicial decision, and ultimately, if denied administrative intervention in the PUC, Sierra Club could deploy the loose standing rules which we mentioned earlier in this post, and institute an original jurisdiction action. Dissent at 17. 

How Do You Exclude Others From a Clean and Healthful Environment?

The biggest question we have about the majority's conclusion is this: if the most fundamental aspect of owning "property" is the right to exclude others from the res, how in the world do members of the public have the right to exclude other members of the public from a clean and healthful environment?

As the U.S. Supreme Court held in Nollan v. California Coastal Comm'n, 483 U.S. 825 (1987), "[w]e have repeatedly held that, as to property reserved by its owner for private use, 'the right to exclude [others is] 'one of the most essential sticks in the bundle of rights that are commonly characterized as property.'' Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 433 (1982), quoting Kaiser Aetna v. United States, 444 U.S. 164, 176 (1979)." Or maybe Stevie Wonder said it better when he sang "this is mine, you can't take it."

Either way, the ability to keep others off of what you own -- and have the law support you -- is one of the defining sticks in the bundle of rights which we call property. 

Thus, we think the court didn't grapple with the real foundational question built into the arguments -- should these types of environmental concerns even be shoehorned into the concept of "property" as that term has been used for thousands of years? Doesn't "property" as used in the Hawaii Constitution's due process clause mean private property? After all, as far as we can tell, every other time this court has dealt with property in Hawaii's due process clause, it has either expressly defined, or implicitly assumed, that the property interest at stake was private property, and not a right that looks more like something "owned" collectively by everyone. Essentially what the majority accomplished was a subtle redefinition of property from a private right to a public resource.

We understand the Hawaii Supreme Court's commitment to keeping courthouse doors open to resolve claims, especially when the claims involve the environment and those who profess to protect it. As we noted earlier, the court's standing doctrine for original jurisdiction cases sets the bar so low that it is, for all practical purposes, a mere pleading speed bump, and not a substantive check on dragging the courts into political and policy questions. The standing rule, as our courts have held, is a "prudential rule of judicial self-governance" for courts exercising their original jurisdiction, and does not, technically speaking, govern courts' appellate jurisdiction in appeals under the Administrative Procedures Act. But now the barn doors are open in both. On that, we think the dissenting opinion is right when it concluded that rejecting intervention in the PUC only meant Sierra Club could have instituted an original action in a Maui trial court. Thus, the courthouse door could remain open without needlessly undermining the concept of property. 

On The Horizon: Public Trust as a "Property" Right?

Also as we noted earlier, this decision was a long time coming, and anyone paying attention has been expecting this shoe to drop whenever the Justice Pollack-led branch could garner that critical third vote. Now that it has, this naturally leads to the follow up question, what could be next?

It stands to reason the next candidate for the second shoe is "public trust" rights, which in the recent telescope cases just missed that third vote. There, Justice Pollack and Justice Wilson concurred, concluding that both Native Hawaii and public trust are property interests. They argued that article XI, section 1 of the Hawaii Constitution created a property property interest in natural resources which are to be administered for public benefit. See Concurring op. at 29-30. Now that this same telescope case is back in the Supreme Court, we would not be surprised if the same three Justices who found that environmental concerns are property take a hard look at extending that rationale.

Other Thoughts

Two final thoughts before wrapping up this long post in farewell to 2017:

1.  If environmental concerns grounded in the Hawaii Constitution are property, and Native Hawaiian interests are property, and if public trust principles are property, are there other, similar interests in the constitution where property could be found? We think there is one that deserves a hard look. Article XI, section 3 reads a lot like sections 1 and 9:

The State shall conserve and protect agricultural lands, promote diversified agriculture, increase agricultural self-sufficiency and assure the availability of agriculturally suitable lands. The legislature shall provide standards and criteria to accomplish the foregoing.

Farmers and ranchers may want to consider raising arguments similar to those which carried the day in Maui Electric. After all, we don't have a hierarchy of state constitutional rights, where some rights are more equal than others.

2.  Citizens United lovers, rejoice: in Hawaii's courts, corporations are persons entitled to constitutional rights. Yes, you read that correctly. The constitutional provision at issue here provides that "Each person has the right to a clean and healthful environment, as defined by laws relating to environmental quality, including control of pollution and conservation, protection and enhancement of natural resources. Any person may enforce this right against any party, public or private, through appropriate legal proceedings, subject to reasonable limitations and regulation as provided by law." The Maui Electric majority held that the Sierra Club has a property right under this provision meaning that hey, the Sierra Club is a "person."

Aloha and welcome to Hawaii jurisprudence, Citizens United!

In re Maui Electric Co., No. SCWC-15-0000640 (Haw. Dec. 14, 2017)

 

In re Maui Electric Co., No. SCWC-15-0000640 (Dec. 14, 2017) (Recktenwald, C.J., dissenting)

5th Annual Hawaii Land Use Litigation Update - Hawaii State Bar Association

For those of you who want to listen only,
stream the audio below, or download the mp3 here.  

Every year, our partners (and land use and property law mavens) Greg Kugle and Mark M. Murakami present a one-hour tour-de-force update on litigation essentials in their field of practice to the Hawaii State Bar Association's Real Property and Financial Services Section. 

Links to the cases they discussed today (and more) are in the handout and below. 

Watch, listen, and learn.  

2017 Litigation Update - Hawaii State Bar Association Real Property & Financial Services Section 11-17-2017... 

Lucas Not Invited To Lucas Conference

Check this out: according to this article ("This SC man won a Supreme Court case. He wants to know why he can't talk about it"), David Lucas, the lawyer-property owner behind the big reg takings case Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1993), was apparently not invited to speak at the (ongoing) event at the University of South Carolina law school marking the 25th anniversary of the decision. The local paper reports:

The University of South Carolina law school is holding a three-day event to mark the 25th anniversary of a S.C. man’s legal victory in the U.S. Supreme Court. But the victor in that case, Davis Lucas, isn’t invited, and he’s upset.

. . . .

Lucas, who sued for the right to build on two lots on the Isle of Palms, is upset neither he nor his attorneys were invited to participate. He said he only found out the forum was being held because a friend’s son attends USC’s law school.

Lucas, who lives in Bishopville, worries his argument in support of property rights won’t be represented. Meanwhile, he expects state regulators to argue the court ruling limits their ability to protect the coast. Lucas also is upset that former S.C. Chief Justice Jean Toal, who joined a majority on the state Supreme Court in ruling against him before he won his federal appeal, was invited.

We're going to be talking about the Lucas case and its impact in a couple of months, right there in South Carolina, at the 35th Annual ALI-CLE Eminent Domain and Land Valuation Litigation Conference in Charleston. Professor Lynda Butler (William and Mary Law), and Jonathan Wood (Washington, DC) will present the session "Lucas 25 Years Later: Property Rights in the Age of Global Warming." 

We invite Mr. Lucas to come join us in Charleston, just a short hop away from the lots he formerly owned. Heck, we may even pay a visit out to nearby Isle of Palms.

2018 ALI-CLE Eminent Domain Conference - Agenda And Faculty Now Posted

The complete agenda and faculty list has now been posted on the ALI-CLE website, and early registration is open! Go now and reserve your spot. 

We paid a visit to Charleston recently, the venue for our January 2018 conference, to scout it out. We can report that we're going to have a great time, for sure. When we polled you last year, you selected Charleston as your first choice (a new city for the Conference), and it is shaping up to be a very good selection. In addition to the usual lineup of CLE programming, there are a ton of things to see and do in the area. We recorded a short video down at the "four corners of law" (the intersection of Meeting Street and Broad Street), to give you a preview (the weather was much better than in our 2016 preview video, too).

As an added exclusive bonus, there will also be a special sneak preview of the movie about Kelo v. City of New London, Little Pink House. If you joined us in Austin in 2016, you’ll remember that we spoke with Ted Balaker, the film's producer about the movie, which was then being shot. It is now complete, and we're privileged to be getting a before-the-public screening of the film on Friday evening of the Conference.  

So plan on joining us in Charleston, January 25-27, 2018. See you there. 

2018 ALI-CLE Eminent Domain and Land Valuation Litigation and Condemnation 101, Charleston, SC, January 25-... 

Brief In Opposition In Public Trust Takings Case

Here's the Brief in Opposition in Nies v. Town of Emerald Isle, No. 16-1305 (Aug. 11, 2017), the case in which North Carolina property owners are asking the U.S. Supreme Court (cert petition here) to review a N.C. Court of Appeals decision which involves wet and dry sand beaches, the location of the public trust boundary, and other favorite topics.

The case arose because the N.C. Legislature by statute moved the public trust" shoreline landward, and allowed the public to use what had formerly been private beach.  We filed an amicus brief in the case, supporting the property owners. 

We'll also post the reply brief when it is filed. Stay tuned. 

Brief in Opposition, Nies v. Town of Emerald Isle, No. 16-1305 (Aug. 11, 2017) 

"Forget it Jake, it's Chinatown"

One thing you notice if you drive around certain parts of Los Angeles and you aren't from Los Angeles. It's that the lawns are really, really lush. Unlike landscaping in other parts of California such as the Owens Valley (even the parts where it rains a lot), in LA it's very green. And it isn't the snuff. It's the water transported to LA from elsewhere. Made (in)famous by its fictionalized telling in the 1975 noir, Chinatown.  The water makes LA look nice, while the rest of California is various shades of brown and is subject to draconian water restrictions.   

Well, according to this story in the Los Angeles Times ("L.A. took their water and land a century ago. Now the Owens Valley is fighting back"), government officials in the Owens Valley are going to grab back some of that land (water) grab by exercising eminent domain to take land which LA's Department of Water and Power owns in the area.

Check it out, it's a great read. 

Cases And Links From Today's American Planning Association's 2017 Planning Law Review

Here are links to the cases and materials we spoke about today during our portions of the APA's 2017 Planning Law Review webinar:

• Justice Kennedy's Social Justice Warrior Test For Takings Clause "Property" In Murr v. Wisconsin
• The Federal Circuit's Lost Tree decision (cert denied just after Murr, so this should be seen as a bookend to that case).
• Town of Ponce Inlet v. Pacetta, LLC, No. 5D14-4520 (Fla. Dist. Ct. App. June 16, 2017).
• Case to watch: 616 Croft Avenue, LLC v. City of West Hollywood, No. 16-1137 (cert. petition filed Mar. 17, 2017) (legislative vs. administrative exactions). 
• Case to Watch II: Highland-in-the-Woods, LLC v. Polk County, No. 2D15-2801 (Fla. Dist. Ct. App. Apr. 28, 2017) (quasi-legislative exactions and Nollan/Dolan).
• Case to Watch III: Scher v. Burke, No. S230104 (Cal. June 15, 2017) (public recreational dedications along the coast, and vested rights).
• Case to Watch IV: State of New Jersey v. North Beach 1003, LLC, No. A-3393-15T4 (N.J. App. Div. June 22, 2017) (coastal dunes and takings). 
• Case to Watch V: "Voters May Not Usurp City’s Administrative Land Use Authority Through Initiative Process" (from Miller, Starr, Regalia's land use blog). 

Thanks to all those who were on the call. They tell us there was record attendance. 

Cases And Links From Washington Eminent Domain Conference

My thanks to Bart Freedman (K&L Gates) and Kinnon Williams (Inslee Best Doezie & Ryder) for asking me to speak on national takings and inverse condemnation issues at yesterday's Eminent Domain conference in Seattle.

As you can see, the room was packed and standing room only. Here are the cases and issues I mentioned during my talk, "National Takings Trends, Hot Practice Areas, and Property Rights in the Age of Trump:"

• Texas border walls: Gideon Kanner on federal takings; eminent domain and the (2008) border fence; is there a "border patrol" servitude?; seizures at border inspections and takings; a (northern) border story, from Washington state; 
• Pipelines and energy transmission corridors: Pennsylvania Supreme Court on public use. Pennsylvania appeals court on public use and the polar vortex.
• Pipelines and energy corridors II: Through Kentucky and "public" use.
• Flooding cases - a hot topic.
• Lessons for eminent domain pretext from the Immigration EO case.
• Municipal utility takeovers: public ownership on Montana water company is "more necessary."
• Project announcement: North Carolina's Map Act, Nevada Supreme Court, California Court of Appeal.
• Sharing economy: Seventh Circuit (Posner) on Uber vs taxis. Georgia Supreme Court's recent opinion on sharing economy takings.
• SWAT taking.
• Uniform Relocation Act and inverse condemnation attorneys' fees.
• South Carolina: attorneys' fees as "property."
• Cases to watch II: Violet Port Dock - Louisiana Supreme Court considering public use.
• Cases to Watch II: Murr v. Wisconsin - the larger parcel in regulatory takings.   

Day 1, 2017 ALI-CLE Eminent Domain And Land Valuation Litigation Conference, San Diego

Here are the links and references to the cases we spoke about today at our opening session on the national trends in eminent domain law at the 2017 ALI-CLE Eminent Domain and Land Valuation Litigation Conference in San Diego. 

We again have a record attendance, and a good number of new attendees. If you aren't here now, we're sorry you didn't make it. But fear not: ALI-CLE has already set the date and location for the 2018 Conference: save the date on your calendars now -- January 25-27, 2018, Charleston, South Carolina, at the Francis Marion Hotel. 

• North Carolina's Map Act case (Kirby). Land banking to keep the eventual acquisition price low, is a taking.
• Nevada: No Regulatory Taking When DOT Announced Future Plans To Condemn.
• California's City of Indio case: temporary "no build" area while city gets around to taking the property is a taking.
• Municipal takings of public utilities: Montana Supreme Court writes "more" out of the "more necessary" clause.
• Pennsylvania Supreme Court: Delegation Of Eminent Domain Power To Pipeline Companies Violates Fifth Amendment's Public Use Clause.
• Through, Not To: A Pipeline With No Kentucky Offramps Isn't For Public Use (for Kentucky).
• Pipeline takings: Pennsylvania appellate court agrees that the polar vortex made them do it.
• Creative Thinking Prize: Texas Supreme Court sides with property owner who formed conservation district to beat back a taking. Don't tell me no, tell me how.
• Georgia appellate court: appraisal "before" negotiations means just that.
• Colorado Supreme Court reads its eminent domain statute narrowly: when it says Commission must approve taking, DOT can't do it.
• Virginia: an unacceptably low appraisal = "bona fide" offer.
• Entry statutes: the California Supreme Court decision in Property Reserve: the court rewrites the statute in order to save it.
• Virginia federal court rejects facial challenge to Virginia's entry statute.
• North Dakota Supreme Court finds that small entries are "examinations" and not takings.
• Who decides, Part II: West Virginia Supreme Court concludes that condemnor (not the courts) is sole determiner of sufficiency of quick take deposit.
• Tex App: Rail Construction Cutting Off Access Can Be Inverse Condemnation - Even When There's Been No Taking.
• Kauai condemnation: Hawaii Supreme Court arguments in "larger parcel" case. 
• SCOTUS and larger parcel in regulatory takings: Murr v. Wisconsin - the "larger parcel' in regulatory takings.
• Who decides? California Supreme Court in City of Perris -- judge decides Nollan/Dolan issues (but they may be project influences, so property owners do the happy dance).

Related articles

Amici Brief: Precondemnation Entry That Goes Beyond "Innocuous" And "Superficial" Is A Taking

NJ Court: There's No Substitute For The Eminent Domain Process, Even On The Shore, Even In An "Emergency"

inversecondemnation.com: Hawaii Supreme Court Oral Argument In Lucas "Economically Beneficial Use" Taking Case

Ode To A Road

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2017 Hawaii Land Use Law Conference, January 19-20, 2017

Registration is now open for the 2017 Hawaii Land Use Conference, presented by the Hawaii State Bar Association and the University of Hawaii Law School, at the downtown Honolulu YWCA's Fuller Hall on January 19-20, 2017. "This 2 day conference is a must attend for any attorney or professional whose practice involves land use and development," as the registration web site says (we agree).  

Topics include the latest in Transit-Oriented Development, the Thirty Meter Telescope, GMO (including the recent rulings from the Ninth Circuit), and the topic we'll be presenting, "Takings: Regulatory and Physical."

The final agenda has not yet been released, but if experience is any guide, Planning Chair Professor David Callies will put together two days of timely topics, presented by distinguished faculty. 

And the cost can't be beat: $200 for members of the Real Property and Financial Services Section and government lawyers, $300 for other HSBA members, and $325 for everyone else. 

Members of the HSBA can register on line, while others need to do so on paper here or below. 

We'll post more when the agenda and faculty list is finalized. In the meantime, reserve your space, because this conference is only held once every two years, and as a consequence, the room fills up quickly. 

2017 Hawaii Land Use Law Conference brochure and registration form 

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9th Cir: No Need For Pullman Abstention In Aina Lea After Hawaii Supreme Court Ruling

Annual Hawaii Bar Association Land Use Update Video

Every year, our partners Greg Kugle and Mark M. Murakami update the Hawaii State Bar Associations Real Property Section on the latest decisions and issues in Hawaii and national land use law. The week before last, they did their thing, and the HSBA kindly recorded it for those of you who couldn't be there. 

Well worth watching or listening. 

Public Trust, Tidelands, And Land Titles: A Short Visit

"Petitioner owns the fee title to property known as the Ballona Lagoon, a narrow body of water connected to Marina del Rey, a manmade harbor located in a part of the city of Los Angeles called Venice. Venice is located on the Pacific Ocean between the Los Angeles International Airport and the city of Santa Monica."

Summa Corp. v. Cal. State Lands Comm'n, 466 U.S. 198, 199-200 (1984). 

As you know, when we're in the neighborhood, we like to visit the sites of famous cases. In the past, we've stopped by the sites of the Hadacheck, Kaiser Aetna, Nollan, Dolan, and PruneYard cases.

Here's the latest, the location of a somewhat obscure case (if any Supreme Court case can be called "obscure"), smack dab in the middle of urban Los Angeles. As the above quote from the case notes, Ballona Lagoon lies between Venice Beach and Marina del Rey, and when visiting either of these places, it would be pretty easy to overlook this tucked-away site. Whatever the dispute was, today the site is tranquil and the main features are some very nice homes and a hiking trail. And wetlands, tidelands, and some nature. If Southern California's beaches aren't occupying all of your attention when you are in this part of LA, check it out next time you're nearby.      

"The present case arises from a lawsuit brought by respondent city of Los Angeles against petitioner Summa Corp. in state court, in which the city alleged that it held an easement in the Ballona Lagoon for commerce, navigation, and fishing, for the passage of fresh waters to the Venice Canals, and for water recreation. The State of California, joined as a defendant as required by state law, filed a cross-complaint alleging that it had acquired an interest in the lagoon for commerce, navigation, and fishing upon its admission to the Union, that it held this interest in trust for the public, and that it had granted this interest to the city of Los Angeles. The city's complaint indicated that it wanted to dredge the lagoon and make other improvements without having to exercise its power of eminent domain over petitioner's property."

"The trial court ruled in favor of respondents, finding that the lagoon was subject to the public trust easement claimed by the city and the State, who had the right to construct improvements in the lagoon without exercising the power of eminent domain or compensating the landowners. The Supreme Court of California affirmed the ruling of the trial court. City of Los Angeles v. Venice Peninsula Properties, 31 Cal.3d 288, 644 P.2d 792 (1982). In the Supreme Court of California, petitioner asserted that the Ballona Lagoon had never been tideland, that even if it had been tideland, Mexican law imposed no servitude on the fee interest by reason of that fact, and that even if it were tideland and subject to a servitude under Mexican law, such a servitude was forfeited by the failure of the State to assert it in the federal patent proceedings. The Supreme Court of California ruled against petitioner on all three of these grounds. We granted certiorari, 460 U.S. 1036 (1983), and now reverse that judgment, holding that even if it is assumed that the Ballona Lagoon was part of tidelands subject by Mexican law to the servitude described by the Supreme Court of California, the State's claim to such a servitude must have been presented in the federal patent proceeding in order to survive the issue of a fee patent."

Petitioner's title to the lagoon, like all the land in Marina del Rey, dates back to 1839, when the Mexican Governor of California granted to Augustin and Ignacio Machado and Felipe and Tomas Talamantes a property known as the Rancho Ballona. The land comprising the Rancho Ballona became part of the United States following the war between the United States and Mexico, which was formally ended by the Treaty of Guadalupe Hidalgo in 1848. 9 Stat. 922. Under the terms of the Treaty of Guadalupe Hidalgo, the United States undertook to protect the property rights of Mexican landowners, Treaty of Guadalupe Hidalgo, Art. VIII, 9 Stat. 929, at the same time settlers were moving into California in large numbers to exploit the mineral wealth and other resources of the new territory. Mexican grants encompassed well over 10 million acres in California, and included some of the best land suitable for development. H.R.Rep. No. 1, 33d Cong., 2d Sess., 4-5 (1854).

To fulfill its obligations under the Treaty of Guadalupe Hidalgo and to provide for an orderly settlement of Mexican land claims, Congress passed the Act of March 3, 1851, setting up a comprehensive claims settlement procedure. Under the terms of the Act, a Board of Land Commissioners was established with the power to decide the rights of "each and every person claiming lands in California by virtue of any right or title derived from the Spanish or Mexican government. . . ." Act of Mar. 3, 1851, § 8, ch. 41, 9 Stat. 632. The Board was to decide the validity of any claim according to "the laws, usages, and customs" of Mexico, § 11, while parties before the Board had the right to appeal to the District Court for a de novo determination of their rights, § 9; Grisar v. McDowell, 6 Wall. 363, 73 U. S. 375 (1868), and to appeal to this Court, § 10. Claimants were required to present their claims within two years, however, or have their claims barred. § 13; see Botiller v. Dominguez, supra. The final decree of the Board, or any patent issued under the Act, was also a conclusive adjudication of the rights of the claimant as against the United States, but not against the interests of third parties with superior titles. § 15.

In 1852, the Machados and the Talamantes petitioned the Board for confirmation of their title under the Act. Following a hearing, the petition was granted by the Board, App. 21, and affirmed by the United States District Court on appeal, id. at 22-23.

. . . 

The Secretary of the Interior subsequently approved the survey, and in 1873, a patent was issued confirming title in the Rancho Ballona to the original Mexican grantees. Id. at 101-109. Significantly, the federal patent issued to the Machados and Talamantes made no mention of any public trust interest such as the one asserted by California in the present proceedings. 

. . . 

The question we face is whether a property interest so substantially in derogation of the fee interest patented to petitioner's predecessors can survive the patent proceedings conducted pursuant to the statute implementing the Treaty of Guadalupe Hidalgo. We think it cannot.

In the end, a unanimous Court upheld private title. Because the owners possessed a federal patent pursuant to the United States' treaty obligations, that was superior to the tidelands trust. This case settled the title for other, similarly-situated properties up and down California. 

If California's history, land titles, treaties, and the Supreme Court isn't your thing, the beach is only a block away.

Amici Brief: If A Legislature Or Court Moves The Public Trust Shoreline Inland, It's A Taking

Here's the amicus brief we filed yesterday on behalf of lawprof David Callies and our colleagues at Owners' Counsel of America in an important case involving ownership and use of the "dry sand" beach, now pending in the North Carolina Supreme Court.  

In Nies v. Town of Emerald Isle, No. COA15-169 (N.C. App. Nov. 17, 2015), the court of appeals held that the dry sand portion of the beach -- the part between the mean high water mark and the dune or vegetation line -- is subject to the public trust. Consequently, the Town was not liable for a regulatory taking when it allowed the public, for a fee, to drive on the beach. The Nies family, which thought it owned the property inland of the MHWM under long-standing North Carolina law, and that the public trust only applied to property seaward of the MHWM, sought compensation.  The North Carolina Supreme Court granted discretionary review. 

The ownership of the dry sand beach isn't an issue limited to North Carolina, and indeed is a burgeoning question nationwide, as state and local government seek to expand the public beaches, but want to do so without condemning and paying for the private rights impacted.  

Our brief argues:

The Court of Appeals permitted the Town of Emerald Isle (Town) to impress into public service the portion of the Nies family’s property above the mean high water mark as a road and park. North Carolina law has never subject this dry sand to public ownership, through the public trust doctrine or otherwise. The Court of Appeals, however, ignored this distinction, holding that the Town’s permitting the public to use the Nies’ dry sand was not a taking because the Nies never owned the right to exclude the public. This Court should reverse, and reconfirm—in accordance with its existing precedents and the vast majority of other jurisdictions—that the public trust is limited to land below the mean high water mark, and cannot be extended by the legislature or by a court to insulate the Town from avoiding its constitutional obligations to condemn the property and pay just compensation under the law of the land clause and the Fifth Amendment. Simply put, the public trust doctrine isn’t a means to transform what has always been private property under North Carolina law into a public resource, without compensation.

Affirming the court of appeals would put North Carolina into a distinct minority: Every state, with a handful of exceptions, limits the public's rights at the mean high or low water marks. See Br. at 11-15.

We'll put up the property owners' merits brief and the other amicus brief, in a separate post. 

[Proposed] Brief of Amici Curiae Owners' Counsel of America and Professor David L. Callies, Nies v. To...

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N.C.'s Map Act: Clouding Use By Condemnation On The "Long Road to Nowhere"

Guest Post: Bragg - Wrong Question, Wrong Result In Texas, To The Detriment Of Sustainable Water Supply

Today's post is by colleague William Wade, an economist in Nashville, Tennessee, who has thought a lot -- and written extensively -- about the just compensation and damages available in inverse condemnation and regulatory takings cases.

He provides his thoughts on a recent trial court decision in a closely-watched Texas water case, in which the appellate court earlier applied the Penn Central test to find liability, resulting in a remand to determine just compensation. As the title reveals, Bill takes issue with the way the issues were framed, and the conclusions the court reached. You may or may not agree with his conclusions, but Bill always considers these issues deeply, and his writings are always thought-provoking.  

Find him online at energyandwatereconomics.com. 

Bragg:  Wrong Question, Wrong Result in Texas to the Detriment of Sustainable Water Supply

by William W. Wade, Ph. D.[1]

Earlier in March, the Medina County Texas District Court awarded pecan growers Glenn and JoLynn Bragg $2.55 million plus prejudgment interest in a regulatory takings case pertaining to the denial of a requested Edwards Aquifer groundwater permit.[2]  The jury verdict made real the Texas Supreme Court’s 2012 Day Decision[3] ruling that land ownership includes an interest in groundwater in place that cannot be taken for public use without adequate compensation.  

The Braggs’ 2016 outcome illustrates that when jurists ask the wrong question, litigators and juries provide the wrong answer.

Readers of this blog may remember that the Texas Supreme Court, on May 1, 2015, denied petitions by plaintiffs Mr. & Mrs. Bragg and defendant Edwards Aquifer Authority (“EAA”) to review an appellate court ruling.[4] This denial let stand the San Antonio Court of Appeals 2013 decision that EAA’s permit denials for the Braggs’ two orchards amounted to a regulatory taking under the standards of Penn Central.[5] As a result of the Texas Supreme Court’s denial, the appellate court’s remand to value Braggs’ damages for their taken water supply was the remaining issue in the Medina County District Court in February 2016.

Plaintiff testimony had consistently sought just compensation for Braggs’ water as a tradable commodity (akin to “Black Gold” for oil in the ground).[6] Defendant EAA had based damages for Braggs’ foregone water use on the replacement cost of leased water to irrigate their pecan orchards.[7] The difference between plaintiff and defendant economic loss estimates was nearly $4 million in the original trial court.[8]

The appellate court remanded for valuation of the pecan orchard land with and without access to EAA water.[9] The Braggs’ land was not the taken property right; the original trial court Penn Central takings decision reduced the amount of water the Braggs could withdraw from the Edwards’ Aquifer to irrigate their two pecan orchards.[10] The correct valuation method would estimate the present value of reduced farm income, past and future, with and without access to the claimed EAA water right needed for irrigation—not fair market value (“FMV”) of land values.

The appellate court remand direction was an economic error akin to a series of federal rental income cases, where the taken property right was the opportunity to exit a low income housing program and convert the rental units to market rental rates.[11] Yet, government counsel consistently valued the rental buildings with variants of FMV, when the standard economic method required valuation of the lost income stream.

The Medina County court awarded Braggs $2.55 million as the difference in appraised FMV of pecan farmland with and without access to EAA water.[12]  Throughout the course of the litigation, Mr. and Mrs. Bragg have been growing their orchards to maturity with rented water at limited added cost. Having followed the case for years, their actual economic losses likely are greatly less than the award, if measured as the correct present value of lost income approach.  The March 2016 County Court decision reveals that when appellate courts ask the wrong question, responding trial courts reach an incorrect finding.  Economic loss of Braggs’ farm income should have been measured by standard Daubert-vetted lost income methods.[13]

In view of the importance of dependable water supplies for Texas, the outcome of the Medina County Court valuation is significant to more than the Braggs and EAA. Reliance on standard valuation approaches would enhance the balancing of private water rights with public needs for Texas water supply management.  When courts ask the wrong questions they get incorrect answers.  Unfortunately, wrong results can create precedent for more bad law.  Penn Central takings cases entail a balancing of private property rights and public benefits.  This cannot be achieved without competent economic approaches to value the private and public stakes in a sustainable water supply for Texas future.[14]

NOTES

[1]     Wade is a water resource economist with an interest in the economic underpinnings of regulatory takings law. ([email protected])

[2]     Bragg v. Edwards Aquifer Authority, No. 06-11-18170-CV (38th Dist. Ct., Medina Cnty., Tex. Decision March 2016.) 

[3]     Edwards Aquifer Authority v. Day, 274 SW.3d 742, (Tex. Feb. 23, 2012, “Day”)) 

[4]     Edwards Aquifer Auth. v. Bragg, No. 13-1023, (Tex. 2015).

[5]      Edwards Aquifer Auth. v. Bragg, 421 S.W.3d 118 (Tex. App.—San Antonio 2013, pet.denied); Bragg, 421 S.W.3d at 138-46 (citing Penn Cent. Transp. Co. v. N.Y.C., 438 U.S. 104 (1978)).

[6]     Brief for Plaintiffs, Bragg v. Edwards Aquifer Auth., No. 06-11-118170-CV (Tex. 38^th J. Dist. Ct. Apr. 15, 2010).  See William Wade, “Liquid Gold or Water for Pecans: Valuation of Edwards Aquifer Water for the Braggs’ taken Orchards,” 45 ENVTL. L. REP. L. NEWS & ANALYSIS 10932, October 2015.

[7]     Post-Trial Brief of Defendants, Bragg v. Edwards Aquifer Auth., No. 06-11-118170-CV (Tex. 38th J. Dist. Ct. Apr. 15, 2010).

[8]     Bragg v. Edwards Aquifer Auth., No. 06-11-118170-CV, Amended Findings of Fact and Conclusions of Law (Tex. 38th J. Dist. Ct. Mar.11, 2011).

[9]     Bragg, 421 S.W.3d at 152-53.

[10]   Id. at 152.

[11]   See, e.g., Cienega Gardens v. United States, 33 Fed. Cl. 196 (1995) and case following.

[12]   Bragg Decision March 2016. The jury found the Home Place Orchard was worth $28,000/acre prior to regulation and $5,000/acre after regulation and the D’Hanis Orchard was worth $30,000/acre prior to regulation and $0 after regulation, for a total of $2.55 million in damages. 

[13]   See generally Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993); see also Fed. R. Evid. 702.

[14] See Joseph Belza, “A Texas Takings Trap: How the Court in Edwards Aquifer Authority v. Bragg Fell into a Dangerous Pitfall of Takings Jurisprudence,” 43 B.C. Envtl. Aff. L. Rev. 211, 216 (2016). (“If other courts adopt the Bragg interpretation of the Penn Central test, the doctrine of invalid regulatory takings will expand beyond its reasonable bounds. The resultant obligation by government agencies to compensate the individuals and industries they regulate could cripple lawmaking efforts, especially environmental regulation.”)

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Lawsuits Have Consequences: Aloha To Hawaii Sugar

When people think of "Hawaii," many of them, me included, think of sugar. Those of us of a certain vintage who were raised in the islands, and whose families were tied to the sugar plantations once so ubiquitous (my mother's family was from the Halawa Plantation and lived on what is now the site of Aloha Stadium), share a certain nostalgia for those days.

But things inevitably change, and most of the sugar and pineapple plantations (ask me about my pre-law days working at "the cannery," a now-defunct summertime ritual for many local kids) are long-gone, save one, Hawaiian Commercial and Sugar's Puunene plantation on Maui.

Earlier this week the other shoe dropped, and HSC's parent company, Alexander and Baldwin, announced that at the end of the year, Hawaii's sole remaining sugar plantation will be closed. There are a lot of reasons -- labor costs, a dwindling number of second-and-third generation kids who moved up and out, foreign competition, among them -- but factored in somewhere has got to be the law, and lawsuits.

Since about the 1970's, sugar plantations have been legal pariahs, as the law migrated away from being captured by big business, to favoring environmental and other interests. Water law is likely the primary culprit, with Hawaii's public trust doctrine at the epicenter. This transformed all private water rights into public property, and the Hawaii Supreme Court, the ultimate authority on all things water, ranked "commercial" uses of water -- and the big transport systems created to bring the water from the wet sides of the islands to the tillable dry sides -- as the lowest priority among the competing uses. You don't need to be a farmer to know that a reliable source of water is most important when you are in the business of growing things. 

Add in a seemingly never-ending stream of lawsuits and the other factors mentioned above, and you've got a recipe for long term decline. So it wasn't really a surprise when A & B made its announcement, which touched off some figurative dancing on the grave by the usual suspects, and this reaction ("Musings: Sugar Blues"), a piece both sad and angry, but which is well worth reading, because it accurately captures the conflicting emotions of those of us who remember a different time. Those times may not have been all that great for those who actually had to live in a single-wall plantation-owned house with a corrugated tin roof and a dirt floor, and they, and those of us who came later, understand that things do change. But please forgive us if we have a moment of nostalgia nonetheless, as we process the unmistakable sign that those days are finally, and irretrievably, gone. 

As for those who say that the 660 or so plantation workers who will lose their livelihoods because of this are the necessary eggs broken to make the new sustainable omelette, and that the promised land of small (organic!) farming is now before us, read this and check your privilege: "Big Island farm closing due to rising costs, threat to fruit crop," about a long time family farm that also announced its impending closure.

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Hawaii Water Law, In A Nutshell

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While he definitely has a perspective (one that, in our view, downplays the role of private property and private rights), you can't get a better insider primer on the history of the legal battles over Hawaii water that have taken place over the years, and the current state of the law. 

One question we've always had about the public trust doctrine as applied to Hawaii water resources: if all water is publicly owned, why aren't people who use catchment systems to capture and store rainwater for their own use getting hit up for wrongly appropriating public water? 

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Carts Before Horses, And Pearls Before Swine: The Hawaii Supreme Court's Fractured Rationale For Invalidating The TMT Permit

Space. The final frontier. These are the voyages of the telescope Thirty Meter. Its five year continuing mission: to explore strange new worlds. To seek out a Conservation District Use Permit from the Board of Land and Natural Resources, and navigate the treacherous waters of Hawaii administrative law. To boldly go where twelve other telescopes have gone before! 

The "the cart before the horse," is what the majority opinion authored by Chief Justice Recktenwald which invalidated the CDUP held the BLNR did when it "issued the permit before the contested case hearing was resolved and the hearing was held." But the same might be said about the court's procedural due process reasoning, because it could have reached the same result by employing a much narrower -- and in our view, a much less opaque -- statute-based rationale.

Dead Man Walking

Ironically -- given the huge public interest in the question of whether to build another telescope atop Mauna Kea -- the least interesting part of the Hawaii Supreme Court's opinion invalidating the CDUP obtained by the University of Hawaii, Hilo from the BLNR was the result, about which there was no suspense at least to anyone paying attention.

As we noted in our earlier post on the case ("Not Quite Where No Man Has Gone Before: Hawaii Supreme Court Considers Mauna Kea's 30 Meter Telescope"), the legal issue of whether the BLNR could issue a permit (even a permit that did not allow actual construction) and then later conduct an evidentiary hearing to consider the objections of those who consider the state-owned land sacred, wasn't a close call. We don't make decisions and only then have the fair trial. It's true in court as well as in quasi-judicial agencies like the BLNR. Not only was the issue very clear cut, a majority of the justices telegraphed their feelings at the oral arguments. And any doubts remaining vanished after the court recently took the somewhat extraordinary step of enjoining TMT's activities "until Wednesday, December 2, 2015, or until further order of the Court." So we even knew the date the opinion was going to come down, another rarity in Hawaii appellate procedure.

At that point, the CDUA was dead man walking, and the only question was how the Hawaii Supreme Court was going to get there.

The Takeaway 

All five justices agreed that the permit was invalidly issued. Three justices (Chief Justice Recktenwald, and Justices Nakayama and McKenna) concluded that permit-then-trial was a due process no-no, and the BLNR couldn't do that because it might allow actual prejudgment of the result, or, equally importantly, would give the appearance of having prejudged the result. Administrative contested cases are like trials, and agencies are like judges. 

Two justices (Pollack and Wilson) issued a separate concurring opinion which based their conclusion on Native Hawaiian rights, the public trust, and due process. Justice McKenna joined one part of their opinion (part IV, starting on page 42), which concluded that government agencies aren't like judges, but more like prosecutors. That they don't act as a "passive actor or a neutral umpire, and [their] duties are not fulfilled simply by providing a level playing field for the parties." Concurring Op. at 45. The agency's job is to be the "representative of the public interest," and not just a caller of "balls and strikes."

So here's the takeaway from the case:

• We have all five justices agreeing that Due Process prohibits cart-before-horses, and that once an agency receives a valid request for a contested case Due Process requires the agencies hold off on making a decision until the contested case process is completed.
• We have a majority of the justices (Recktenwald, Nakayama, McKenna) who conclude that a contested case is a trial-like process in which the agencies serve as the neutral decisionmakers.    
• We also have a majority (McKenna, Pollack, and Wilson) who conclude that agencies have a duty to not be neutral, but to take sides by protecting certain interests.   
• We have two justices (Pollack and Wilson) who argue that Native Hawaiian rights and the public trust also form an independent basis for invalidating the BLNR's actions, although their rationale is less than clear. So far, no one else is willing to join them and form a majority.
• Noticing anything about the split in the court? McKenna, Pollack, and Wilson are all three (and the only three) appointees to the court by failed Governor Neil Abercrombie, who was so disapproved of by the notoriously incumbent-friendly Hawaii voters that he got tossed out of office after his first term. He's gone, but his legacy continues. Elections do matter, and we're not talking about the election he didn't win. 

Which leaves this question: since Justice McKenna joined both opinions, what does this mean about the roles of agencies? On one hand, she joined the opinion which views agencies like neutral judges; but she also joined the opinion which viewed agencies in an entirely different role, as advocates and prosecutors. We're not sure what this means, except that in a future case on this issue, we know which Justice we're pitching our arguments to. 

On to the opinions.

Due Process

"Decisionmakers cannot decide matters on the merits before taking evidence." Slip op. at 33. That's the money quote from the Recktenwald majority opinion, and if all that interests you is whether the TMT can move forward and be built, you can stop right here and go read the media reports and internet comments about the decision and predictions about TMT's ultimate success or failure. But if you want to understand the court's various rationales for reaching that result, read on. 

The Recktenwald majority opinion comes down squarely on the view of contested cases being virtually the same thing as a trial by a court:

A contested case hearing affords parties extensive procedural protections similar to those afforded parties in a civil bench trial before a judge. These protections include the opportunity to issue subpoenas for witnesses to testify under oath or produce documents, to cross-examine witnesses under oath, and to present evidence by submitting documents and testimony under oath in support of their positions. See HAR §§ 13-1-32(c), (g); 13-1-33(a), (b); 13-1-35. Moreover, a contested case hearing affords parties the opportunity to obtain and utilize the assistance of counsel, comment on how a site visit by the hearing officer should be conducted, review the written decision of the hearing officer, and challenge the hearing officer’s decision both in writing and verbally at a hearing before BLNR.

Slip op. at 32. 

All five justices agreed that Due Process prohibits even the appearance of prejudging. But notably missing from the opinion is a description of the property interest at stake. The objectors are not the permit applicant. They are not neighboring landowners. So what's their stake such that they have constitutional right to notice and an opportunity to a meaningful hearing? Yes, they have a cultural interest in what gets built on state-owned property they allege is sacred to them, but procedural due process rights are generally triggered by a legitimate claim of entitlement to something. Owning land. Filing a permit application. Even "new property."

The court doesn't tell us what the property interest is here, and assumes (we assume) that the objectors possessed it, somewhere in this. 

A Narrower Ruling?

Which takes us to our next point. The Hawaii Supreme Court is not known for its narrow rulings, and this one is no different. In our view, the court could have avoided the property issue, and reached the same result based on the text of the contested case statute, which defines the proceeding in the agency as "a proceeding in which the legal rights, duties, or privileges of specific parties are required by law to be determined after an opportunity for agency hearing.” Haw. Rev. Stat. § 91-1(5) (emphasis added). So the court could have concluded that the statute requires that the hearing come first, followed by the determination, and this was enough to doom BLNR's cart-before-horse process. We're not sure why the court didn't take that much simpler route, except that the justices were truly offended by the practice, and the way it appears to the public. That certainly was the flavor of the oral arguments. 

What Was BLNR Thinking?

All of this raises the question of if putting the cart before the horse was so obviously wrong, why would the BLNR do such a thing? As our colleague Greg Kugle pointed out, it was to avoid the Möbius strip procedure which allowed someone to show up at a public BLNR hearing at which a permit application was on the agenda and request a contested case (which would halt any decisionmaking), and then not follow up by actually filing a motion to intervene, or otherwise prosecute the contested case. Which would put the application back on the BLNR's public hearing agenda. And then someone else could show up at that public hearing and demand a contested case. Etc., and possibly ad infinitum. To avoid that, the BLNR would do what it did here: issue a permit, and then if someone objected and demanded a contested case, wait for them to follow up and actually prosecute it. If they did, then the BLNR would consider their objections like it did here. But if they didn't show up, the process would not be delayed or stuck in a loop.

A practical solution perhaps. But after the Supreme Court's decision, a procedure that is not available. How this will be handled down the road "remains to be seen," as they say.

Native Hawaiian Rights and Public Trust

The concurring opinion reads like it was meant to be a majority opinion that came up one vote short. It starts off by waxing poetic about the "majestic" Mauna Loa, and if you were to read nothing else in this 49-page opinion, you'd know where the authors were going to end up. As we noted above, Justices Pollack and Wilson argued for two triggers to procedural protections, Native Hawaiian rights, and the public trust, both of which they view as property interests.

As far as we can tell, this theme started with a dissent by now-retired Justice Acoba in the Kilakila case, where he, joined by Justice Pollack, argued the same thing. They couldn't get a third vote there, and Justice Pollack and Wilson couldn't here, either. We won't go into the opinion's details but if you want to, they're all there, from pages 3 to 42. Here is what we think is the money quote from this part of the opinion: "the Board violated Article XI, section 1 of the Hawaii Constitution as a matter of law by deciding the merits of UH's application before conducting a contested case hearing in which the public trust doctrine, and the obligations it imposes on the State, could have been duly considered." Concurring op. at 29-30. 

No Balls and Strikes

They were able to muster a third vote for Section IV of the concurring opinion, the section titled "Constitutional Responsibilities of an Agency," starting on page 42. As we noted above, this different majority viewed the purpose of contested cases, and the role of the agencies who conduct them, in a profoundly different light than the other majority opinion, which characterized them as trial-like proceedings, with the agency not prejudging. By contrast, Justices Pollack, Wilson, and McKenna concluded that contested cases are record-building procedures in which the agency doesn't simply sit as a neutral umpire, and actually does somewhat prejudge because its role is to represent the public interest. Concurring op. at 45. They base this on the public trust doctrine, a theory with its footings in Hawaii's Constitution. The agency's job is to be on the "frontline" of the  issues, and not just a caller of balls and strikes.

If that is so, then what about other parts of the Hawaii Constitution, which also expressly protects agriculture, for example, in Article XI, section 3: "The State shall conserve and protect agricultural lands, promote diversified agriculture, increase agricultural self-sufficiency and assure the availability of agriculturally suitable lands." Does this mean that agencies have a role to treat agricultural issues, and farmers and ranchers the same way the concurring Justices would have them approach Native Hawaiians and public trust issues? We don't see why not. 

Final Thoughts

We've been asked what this opinion might mean for the TMT down the road. Will be it "death by a thousand days" like the Hawaii Superferry? Or will this have a different outcome because the applicant is a state university which can hold on longer because it is publicly and not privately funded? And this is science and star trek that is asking for the CDU permit, not a corporation pursuing filthy lucre. We'll see. 

Finally, what we see here goes much deeper than the policy question of whether another telescope up on Mauna Kea is a good thing or a bad thing. The court technically didn't decide that, and the opinions were grounded in process only. But the "flavor" is definitely there, especially in the concurring brief opinion. And if agencies have a constitutional duty to not be neutral, then what about judges, or even Justices -- doesn't that same constitutional command apply to them, as well? 

We'll see about that, and whether another member of the court in the future comes around to Justices Pollack and Wilson's theory.

Mauna Kea Anaina Hou v. Bd. of Land and Natural Resources, No. SCAP-14-0000873 (Haw. Dec. 2, 2015)

Mauna Kea Anaina Hou v. Bd. of Land and Natural Resources, No. SCAP-14-0000873 (Haw. Dec. 2, 2015)

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Friday, Nov 20, 2015: Haw State Bar Assn Real Property & Financial Services Section's Annual "Litigation Update"

Time for the annual "Litigation Update" by our Damon Key colleagues Greg Kugle and Mark M. Murakami, which they do each year for the HSBA's Real Property and Financial Services Section. (Materials from last year's talk available here.)

Details:

• Date: Friday, November 20, 2015 (that's tomorrow, folks)
• Time: 12 noon - 1:00 p.m.
• Location: HSBA Conference Room, 1100 Alakea Street, 10th Floor, Honolulu
• Cost: FREE for RPFSS members. If you aren't a member and want to attend, ping me.  

Greg and Mark will cover Hawaii decisions from the last year involving land use, administrative appeals, quiet title, shoreline, reg takings and condemnation, and preemption. They will also cover decisions from other jurisdictions which have an impact on Hawaii property law practice.

These two are at the top of their game, so come on down and get the information, as well as hear their insight about what the decisions mean.

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Thursday, November 5, 2015, U.H. Law School: Lawprof Thomas Merrill To Speak About Property And Public Trust

Mark your calendars for next Thursday, November 5, 2015, at 4:30pm at the University of Hawaii Law School Moot Courtroom for the annual Gifford Lecture in Real Property, sponsored by our colleagues at Carlsmith Ball. 

This year, the lecture is by Columbia Lawprof Thomas W. Merrill (also a recent Brigham-Kanner Property Rights prizewinner), and he will talk about "The Public Trust Doctrine: Some Jurisprudential Variations and Their Implications."

The postcard is below, so come on up to the law school and take advantage of having a legal scholar of great renown in town. 

2015 Gifford Lecture - Professor Thomas Merrill

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Upcoming Events And CLE's - Appellate, RLUIPA, Sharing Economy, And More

Here are some upcoming events in which you may be interested, in chronological order:

• Sharing Economy: this Friday, October  16, 2015, from 1:00 pm - 2:30 pm ET: "Is Sharing Really Caring? Part I: The Law of Transportation Sharing: Uber, Lyft, and the Sharing Economy." This is a webinar-format program, a follow up the in-person program which we moderated at the recent ABA Annual Meeting. This program features expert presenters from the National League of Cities, the Liberty Justice Center, the Goldwater Institute, Tampa International Airport, and the University of Idaho School of Law. And yes, we will touch on takings issues. A timely program on a very important topic. Details and registration information here. 
• RLUIPA: next Thursday, October 22, 2015, our colleagues Evan Seeman (RLUIPA Defense Blog) and Dan Dalton are on the panel of the American Planning Association's program on "Planning for Religious Uses Under The Religious Land Use and Institutionalized Persons Act." The program "will explain several different strategies and approaches that can be used to avoid RLUIPA litigation, including through revisions to local zoning codes and accommodating religious uses when appropriate." More here. 
• Appellate: next Friday, October 23, 2015, from 8:30 am - 10:45 am Hawaii Time, I will be joining a a panel of fellow appellate practitioners at the Hawaii State Bar Association's annual meeting at the Hawaii Convention Center for "Appellate Practice Pointers and Brief Writing Seminar."  We have a good chunk of time, so we will be able to cover a lot of ground on civil and criminal appeals, how to prepare the record, and do's and don'ts for appellate work in Hawaii state courts. Immediately following the practitioner module, Chief Justice Recktenwald, Associate Justice Pollack, and Court of Appeals Judge Nakamura will hold a session on the view from their side of the lectern. More information here. Register here.  
• Environmental - Climate Change: finally, on Friday, November 6, 2015, I'm the planning co-chair, along with Tom Lindley of Perkins Coie's Chicago and Portland offices of "Rising Tides: Climate Change and the Economic and Business Impact in Hawaii," an all-day program at the Hilton Waikiki Beach hotel. This isn't your typical "climate change" program and we're really not going to be debating the science. Frankly, it doesn't matter whether it is real or not, or caused by man or not, because governments are adopting regulations that property owners and businesses are going to have to comply with, regardless. So we've assembled an expert national and local faculty and an agenda to give a crash course about the science, the government reactions, the need to protect property rights in the process, and practical matters like insurance, compliance, and business planning.

I hope you can join us for one or more of these programs.

What You Need To Know About Hawaii’s New Environmental Court

Enviro Wars Episode IV: A New Court

You may have heard that the Hawaii Legislature, after an intensive years-long effort by environmental groups, recently created a new court with specialized jurisdiction that could have a big impact on how property and business owners are treated by Hawaii’s courts. 

Known as the “Environmental Court,” this new court has been given the exclusive jurisdiction to hear most civil and criminal cases affecting the environment. Because Hawaii’s court is only just getting off the ground and is in uncharted territory (only one other state—Vermont—has a court with a similar statewide mandate), those who stand to lose the most in this new court—property and business owners—have many unanswered questions.

Here’s what you need to know.

Why A New Court?

According to its proponents, the new Environmental Court is not expressly intended to change outcomes in environmental cases, and is merely designed to bring "consistency" to rulings in such cases, and to remove "improper influences" (supposedly by business and property owners) from judicial decisionmaking in such cases.

Proponents point to two aspects of the new court:

No New Judges

First, it does not have separate physical facilities, and the judges who have been appointed to staff it are not new to the bench. Nor did the Judiciary request more money in its budget to accommodate the new court. Instead, the circuit courts have simply established a new division in each county’s existing court system, with a sitting judge, or judges, assigned to the Environmental Court. Many of these judges already preside over cases which involve issues that affect the environment, so are familiar with the subject matter, and this is, at least on the surface, simply an administrative reassignment of specific cases to pre-designated judges. So far, so good.

No New Law

Second, the court wasn’t tasked with applying any newly-created laws. Rather, Environmental Court judges have been given exclusive jurisdiction to resolve cases under specific existing statutes which were deemed by the Legislature to be related to the environment.

But isn’t most everything dealing with land, water, and similar issues “related” to the environment?

The Environmental Court's Broad Jurisdiction

Perhaps so, but the new jurisdictional scheme doesn’t go quite that far, and the Environmental Court has been exclusively assigned jurisdiction to hear cases involving the following sections in the Hawaii Revised Statutes: 6D (cave protection), 6E (historic preservation), 6K (Kahoolawe Island Reserve), 128D (environmental response), 339 (litter control), 339D (electronic waste and recycling), 340A (solid waste), 340E (drinking water), 342B (air pollution), 342C (ozone protection), 342D (water pollution), 342E (nonpoint source pollution), 342F (noise pollution), 342G (integrated solid waste management), 342H (solid waste pollution), 342I (special wastes recycling), 342J (hazardous waste), 342L (underground storage tanks), 342P (asbestos and lead), and 508C (uniform environmental covenants act).

In addition (and most importantly), the Environmental Court now has the exclusive jurisdiction to adjudicate cases in two areas that have resulted in more than a few well-known cases: Environmental Impact Statements (chapter 343), and cases involving public lands, water and flood control, mining and minerals, forestry and wildlife, ocean resources and wildlife, geothermal, trail access, and conservation easements (Title 12). In short, a very broad class of cases will go to the new court. 

However, after input from property and business interests, the Legislature concluded that cases involving state land use policy (chapter 205), and the shoreline (chapter 205A) would not be within the new court’s jurisdiction. Cases involving those issues will remain in the regular court system and be assigned to judges randomly, as they were before. Which means the scope of what the Environmental Court has exclusive power to consider is extremely broad, but not as wide-ranging as was initially proposed. Again, a good thing, if only because it could have been much worse.

Is The Environmental Court Needed?

Which leads to a good question: if all the new Environmental Court was meant to accomplish was an administrative rearrangement of circuit court calendars to assign certain cases to certain judges, why was such a court considered necessary? After all, Hawaii courts were already extraordinarily well-attuned to environmental concerns, and indeed, are among the most favorable courts in the nation for environmental groups to press their claims. And they are remarkably consistent. As a study published in the University of Hawaii Law Review in 2011 reported, environmental plaintiffs enjoy an enviable record of success in the Hawaii Supreme Court, which during the years studied (1993-2010) found in favor of such groups “approximately eighty-two percent of the time, sixty-five percent of which reversed the Intermediate Court of Appeals.”

A stunning statistic, which highlights two things. First, there’s no reason to think that the court changed its approach, and in the time between 2010 and today, had begun to “inconsistently” apply environmental laws as the Legislature determined. Second, rather than being subject to improper influences from business and property owners as was claimed, these stats reveal that the courts were remarkably free of such forces.

In short, the Environmental Court was a solution in search of a problem.

Now What?

But other than complain that the Legislature adopted a law that was designed to address illusory problems, what are property and business owners to do? After all, the debate about whether the new court is truly necessary has become academic. Because it is here. The Second Circuit (Maui) Environmental Court is already considering the first case, a challenge to traditional plantation cane burning. (More on that here.) And there surely will be more to come.

First, pay close attention to how the courts rule in this new case, and down the road. Because the reasons for creating the Environmental Court don’t really hold up, the actual reason for creating the court may have been to push the application of laws related to the environment even further out of balance. Normally, we shouldn’t be concerned, since courts are generally pretty good at remaining objective and avoiding regulatory capture. But when a court is charged with a mission other than the even-handed administration of justice—here, to "ensure that the State upholds its constitutional obligation to protect the public trust for the benefit of all beneficiaries"—the danger of environmental judges becoming environmental prosecutors must be taken seriously, and guarded against. Only time will tell whether the startling success rates reported in the previously-mentioned law review article will become even more extreme under this new scheme.

Second, watch for legislative action. While the scope of the Environmental Court was curtailed slightly in order to make the bill more palatable and ensure its passage—the court was not given jurisdiction to consider state land use and shoreline cases—"mission creep" could well set in, with future efforts to enlarge the scope of the court’s jurisdiction to include these and other topics. Because nearly anything could conceivably be "related" to the environment, it is not difficult to predict that court’s jurisdiction will be expanded in the future if it is deemed to be a success as its proponents hope.

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Guest Post - Liquid Gold, or Water For Pecans: Valuation of Texas Water

Our colleague William Wade, in addition to being an economist, is a prolific author on the topic we find fascinating, takings. He looks at the issues with an economists' perspective, and we've found his articles very helpful. We've even posted a few over the years:

• Temporary Takings, Tahoe Sierra, and the Denominator Problem
• Sources of Regulatory Takings Economic Confusion Subsequent to Penn Central
• Confusion About “Change in Value” and “Return on Equity” Approaches to the Penn Central Test in Temporary Takings
• Federal Circuit’s Economic Failings Undo the Penn Central Test
• Penn Central’s Ad Hocery Yields Inconsistent Takings Decisions 

Bill has graciously sent us a guest post, a preview of what may be his next article.

He focuses on the impact of the Texas Supreme Court's landmark decision in Edwards Aquifer Authority v. Day, 369 S.W.3d 814, 832 (Tex. 2012), in which the court held that land ownership includes groundwater rights, and concluded that a property owner could not have its groundwater rights taken and was entitled to prove up its Penn Central claim. 

Bill writes about how Day is being applied in another case involving Edwards Aquifer water -- reputed by a source no less than Wikipedia to be "one of the most prolific artesian aquifers in the world" -- and how water rights are valued in takings cases. 

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Liquid Gold or Water for Pecans: Valuation of Edwards Aquifer Water for the Braggs’ Orchards

by  William W. Wade, Ph.D.  [1]
[email protected]

The Texas Supreme Court's Day decision[2] reversed a hundred years of water law in 2012, and changed groundwater ownership rights from a “rule of capture” to ownership of “groundwater in place.”  That decision equated groundwater ownership to oil and gas, and concluded that differentiating “between groundwater and oil and gas in their importance to modern life would be difficult.” [3]  Day set up a conflict between value of the owner’s groundwater in place, and management of the Edwards Aquifer for public benefit – including the people of San Antonio, who rely on the Aquifer for their public water supply.

The ongoing Braggs v. Edwards Aquifer Authority litigation is the first of what could be a number of Texas cases invoking Day to claim a regulatory taking due to the Edward Aquifer Authority's (EAA) management of the groundwater. On May 1, 2015, the Texas Supreme Court denied petitions by the plaintiffs Mr. & Mrs. Bragg, and the defendant EAA to review the 2013 appellate court ruling.[4] This let stand the Court of Appeals' decision that EAA’s permit denials for the Braggs’ two orchards amounted to a regulatory taking under Penn Central.[5]  As a result of the Texas Supreme Court’s denial, the appellate court’s remand for the valuation of Braggs’ damages for their taken water supply is the remaining issue in the case.

Plaintiffs' counsel demands just compensation for Braggs’ water as a tradeable commodity (akin to “Black Gold” for oil in the ground). The EAA based its view of damages for Braggs’ taken water use on the replacement cost of leased water to irrigate their pecan orchards. The difference between the plaintiffs' and the EAA's economic loss estimates is nearly $4 million.

The appellate court remanded for valuation of the pecan orchard land with and without access to Edwards Aquifer water. [6]  The Braggs’ land, however, was not the taken property. Rather, the Braggs lost the right to use Edwards’ Aquifer water to irrigate their pecan orchards. The correct valuation method would be the present value of reduced farm income, past and future, with and without access to the EAA water—not FMV of land values. The appellate court remand direction is an economic error. Economic loss of Braggs’ farm income should be measured by standard Daubert-vetted lost income methods.[7]

These problems with both the plaintiff’s and the defendant’s valuation approaches, together with the deficient appellate remand approach, have ramifications for future Penn Central litigation attendant to Day and Bragg. A long history of Penn Central takings cases reveals that Penn Central’s famous three-prong test[8] entails a quantitative measurement of the plaintiff’s severity of economic loss. This begins with a proper economic measurement of losses, and subsequent benchmarking of those losses to a denominator value that reveals whether the plaintiff’s distinct (or reasonable) investment-backed expectations have been frustrated.[9]  The property owners' briefs in the Bragg case reveal dissatisfaction with any valuation approach but the tradeable value of the water. The EAA's briefs reveal that no quantitative Penn Central test appears in the proceedings.

In view of the importance of dependable water supplies for Texas, the outcome of the remand is significant to more than the Braggs and EAA. This water resource economist hopes that standard valuation approaches will lead to a balancing of private water rights with public needs for Texas water supply management.[10]  If ever-careful attention was needed to Penn Central's famous three-prong ad hoc balancing[11] of property rights and government regulation for the common good, it would seem that the Texas Supreme Court’s denial of the Bragg petition was a missed opportunity.[12] 

Unresolved is whether the Braggs might enjoy a sufficient reciprocity of advantage as identified in Penn Central[13] by EAA’s pumpage regulations to offset their losses, or whether the gains all accrue to the rest of Texas while the Braggs unfairly shoulder the burden that in all fairness should be shared across society.[14]

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Notes

[1] The author is a water resource economist who has worked on water policy and litigation across the country since 1986 and provided expert testimony on valuation of lost and contaminated water supplies. He is experienced in financial economics and has served as an expert witness at state and federal courts in Penn Central regulatory takings cases. He has published extensively on the economic underpinnings of the Penn Central test.  

[2] Edwards Aquifer Auth. v. Day, 369 S.W.3d 814, 832 (Tex. 2012) (Each landowner “owns separately, distinctly, and exclusively all the water under his land.”).  

[3] Id. at 831.

[4] Edwards Aquifer Auth. v. Bragg, No. 13-1023 (Tex. 2015).

[5]  Edwards Aquifer Auth. v. Bragg, 421 S.W.3d 118, 138 (Tex. App. 2013) (citing Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (1978)).

[6] Id. at 152-153.

[7] Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993). See also Fed. R. Evid. 702.

[8] Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978) (“[T]he Court's decisions have identified several factors that have particular significance. The economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations are, of course, relevant considerations. So, too, is the character of the governmental action.”).

[9] Economic losses must be measured against the “parcel as a whole.” Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 935-36 (Tex. App. 1989) (citing Penn Central, 438 U.S. at 130-131). This comparison has come to be known as the “takings fraction,” which compares the with and without regulation values as the numerator to the owner’s stake in the entire property as the denominator to evaluate the severity of economic impact. Keystone Bituminous Coal Ass'n. v. Debenedictis, 480 U.S. 470, 497 (1987). Thousand of words by hundreds of litigators, jurists and scholars including the author have sought to explicate the Penn Central test. See, e.g., William W. Wade, Temporary Takings, Tahoe Sierra and The Denominator Problem, 43 Envtl. L. Rep. News & Analysis 10189 (2013). 

[10] See the author’s “Liquid Gold or Water for Pecans: Valuation of Edwards Aquifer Water for the Braggs’ Orchards,” Draft August 5, 2015, for details about valuation issues within the Braggs litigation.

[11] 438 U.S. at 124.

[12] 421 S.W.3d at 144-145 (citing Day, 369 S.W.3d  at 840 ("In many areas of the state, and certainly in the Edwards Aquifer, demand exceeds supply. Regulation is essential to its conservation and use.")).

[13] Id. at 141 (Rehnquist, J. dissenting) (citing Pennsylvania Coal Co. v. Mahon, 260 U.S.,393, 415(1922) (“[This] Court has ruled that a taking does not take place if the prohibition applies over a broad cross section of land and thereby "secure[s] an average reciprocity of advantage.")). The interested reader who wonders exactly what this phrase means may find useful the author’s article, “Average Reciprocity of Advantage: ‘Magic Words or Economic Reality: Lessons from Palazzolo," 39 The Urban Lawyer 319 (2007). 

[14] Id. at 123 (citing Armstrong v. United States, 364 U.S. 40, 49 (1960): “The question of what constitutes a "taking" for purposes of the Fifth Amendment has proved to be a problem of considerable difficulty. . . . this Court has recognized that the "Fifth Amendment's guarantee . . . [is] designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole."). 

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Land Use Institute: Planning, Regulation, Litigation, Eminent Domain, and Compensation - 31st Annual Conference, Chicago, July 30, 2015

The Land Use Institute, a program that for many years has been planned by co-chairs Frank Schnidman and Gideon Kanner, has found a new home with the American Bar Association's Section of State and Local Government Law as the main sponsor. It also has a new Planning co-chair, Dean Patty Salkin of Touro Law School, who has stepped in for Professor Kanner.

This program is designed for attorneys, professional planners, and government officials involved in land use planning, zoning, permitting, property development, conservation and environmental protection, and related litigation. It not only addresses and analyzes the state-of-the-art efforts by government to manage land use and development, but also presents the key issues faced by property owners and developers in obtaining necessary governmental approvals.

This year, the one-day program is being held in conjunction with the ABA Annual Meeting in Chicago. It will be held on Thursday, July 30, 2015, the day before the Annual begins, in the same hotel as the State and Local Section meeting, which will make it easy to attend both.

The program brochure has all of the information you need, including tuition (register by July 17, 2015 to receive a discount), agenda, and faculty. Topics covered include: updates on the hot topics, key land use and eminent domain decisions from the past year, the law of sharing transportation and residential properties, fracking, ethics, urban agriculture, drone regulations, and the annual Richard F. Babcock Faculty Keynote Address, "From the Group Up: Unshared Assumptions in Law and Planning." We're on the faculty, and will be providing updates on eminent domain, federal water law, and will be moderating the panel on ride sharing issues. 

In addition, you may also want to attend the additional Friday modules (separate registration fee), "The 2014 Supreme Court Term in Review" (with a panel of Supreme Court advocates and journalists), and "Looming Land Use Constitutional Issues," a panel of experts speaking about compensation for owners whose property is taken for environmental protection, the Horne v. USDA case (presented by one of the attorneys for the Hornes), medical marijuana for land use lawyers, and the law of exactions and affordable housing. 

Download the brochure for all the information or to register, or visit www.landuseinstitute.org (which will redirect to the ABA's registration link page). 

Hope to see you in Chicago in a few weeks. 

31st Land Use Institute (Chicago, July 30, 2015)

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New Law Review Article Worth Reading: "Through a Glass Clearly: Predicting the Future in Land Use Takings Law"

It's not often that we say a law review article is a "must-read." But this one definitely is, especially for all you regulatory takings mavens: David L. Callies, Through a Glass Clearly: Predicting the Future in Land Use Takings Law, 54 Washburn L. Rev. 43 (2014). A pdf of the article is posted here. 

From the Introduction:

The subject of takings—the government taking of an interest in real property, either through eminent domain or through the exercise of the police power—has been the subject of continuous litigation for nearly a century. The past ten years have been particularly fruitful, as litigants struggle with the meaning and extent of the Fifth Amendment’s Public Use Clause and the extent to which the overzealous exercise of the police power can sufficiently deprive a landowner of rights in property so that the property has been “taken” by regulation, ever since Justice Holmes opined in Pennsylvania Coal Co. v. Mahon that a regulation that goes “too far” is a constitutionally-proscribed taking. Thus, in the area of physical taking, we have the expansion of public use—use by the public—to include public purpose (Kelo v. City of New London and Hawaii Housing Authority v. Midkiff), leaving very little room for landowner defense unless the physical taking can be proven “pretextual.”

. . . 

This article explores some of the recent case law in these areas of takings, both physical and regulatory, and makes some predictions about the direction of takings law, bearing in mind Professor Lawrence Tribe’s admonition that those who attempt to thus use a crystal ball may run the risk of later having to eat ground glass.

Among Professor Callies' predictions: (1) exactions are going to receive more scrutiny from the courts; (2) development agreements will be used more in the place of exactions; (3) Kelo is ripe for revisiting; (4) government will try to expand the public trust, "custom" and "background principles" to avoid takings liability; and (5) Williamson County is ripe for reexamination.

Check this one out for sure.  

 

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New Article: "Legislative Exactions after Koontz v. St. Johns River Management District"

Worth reading: "Legislative Exactions after Koontz v. St. Johns River Management District," an article by colleagues Luke Wake and Jarod Bona, recently posted to SSRN. Here's the abstract:

Decided in June, 2013, Koontz v. St. Johns River Management District settled a long-running debate among scholars as to whether the nexus test — first pronounced in Nollan v. California Coastal Commission — applies in review of monetary exactions. In the preceding years, the lower courts had largely resolved this question in the government’s favor — limiting Nollan to its facts, and holding the nexus test inapplicable if a challenged permit requires the applicant to pay or expend money as a condition of permit approval. Further, the trend among the lower courts held the nexus test inapplicable in review of legislatively imposed exactions, regardless of whether the contested condition requires a dedication of real property or money.

Without question, Koontz has set the monetary exactions issue to rest. The Supreme Court squarely repudiated those cases holding the nexus test inapplicable. But the question remains as to whether the nexus test applies in review of legislatively imposed exactions. Accordingly, this article examines the theoretical foundations underpinning Koontz; we conclude that those doctrinal principles ultimately dictate that the nexus test applies in review of legislatively imposed exactions.

Further, we address other recurring questions in land-use permitting cases, including the legality of aviation and open-space dedication requirements, and the constitutionality of affordable housing linkage fees. We conclude that, in the wake of Koontz, the nexus test should apply whenever the government demands such exactions as a condition of permit approval. The Takings Clause prevents permitting authorities from requiring permit applicants to give up any interest in property — including the dedication of negative easements, or the dedication of money into any sort of public fund — unless the permitting authority can demonstrate that those conditions are necessary to proportionally mitigate negative externalities from the proposed project.

Jarod also summarized the article on his blog here ("Takings and the Supreme Court’s Decision in Koontz v. St. Johns River Management District").

There have been more than a few articles published recently about Koontz and the future of the exactions doctrine, and we will post links to those soon. But we think that Luke and Jarod's article is particularly worthy. Check it out. 

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Washington: State Trust Land Can Be Condemned By County Utility

Here's one with a somewhat unusual twist: the condemnee objecting to the taking by a public utility district was the state.

In Public Utility Dist. No. 1 of Okanogan Cnty. v. State of Washington, No. 88949-0 (Jan. 29, 2015), the Washington Supreme Court affirmed the power of the county utility district to take an easement over "school trust lands" for the construction of an high-voltage, high-capacity transmission line and corridor. The land was owned by the public and held in trust for schools, was "a portion of the largest publicly owned tract of shrub-steppe habitat in the Methow Valley," and was being used for cattle grazing. The grazing leases generated $3,000 per year for the state's public schools, and also acknowledged that the land may be subject to easements and condemnation. 

The court first concluded that an environmental organization could intervene to address the power of the utility district to take the land. Although not an adjoining landowner (who, under prior decisions, have standing to intervene to challenge the power to take), the interest of the environmental organization was like that of an adjoining landowner, and the state might not adequately protect that interest -- the state was there to protect the lands as school lands, while the organization's interest was in protecting "wildlife sanctuaries and shrub steppe lands." Slip op. at 12. Thus, the trial court did not abuse its discretion when it allowed the environmental organization to intervene to challenge the power to take. 

On that issue, however, the court sided with the utility-condemnor, and held that the state land was not immune from being taken. The utility has been delegated the power of eminent domain by statute, so the court viewed this issue as the scope of the delegation to a municipal corporation under the statute, which provides:

A district may take, condemn and purchase, purchase and acquire any public and private property, franchises and property rights, including state, county, and school lands, and property and littoral and water rights, for any of the purposes aforesaid, and for railroads, tunnels, pipe lines, aqueducts, transmission lines, and all other facilities necessary or convenient, . . .

Rev. Code Wash. 54.16.050 (emphasis added). 

The state asserted that as trust land, its property was exempt, and that transfer to land would violate its fiduciary duties. When the state owns land in its "proprietary" capacity, it's enough that the enabling statute authorizes confers the power to take this type of land. By contrast, when the state owns land it its "governmental" capacity" (in trust), it can only be condemned when the statute authorizes condemnation of the land in that specific capacity. The court agreed with the state that it "indisputably" held the school lands in its trust capacity, meaning the question was "whether  [the utility] is expressly authorized to condemn the subject school and turns on whether the term 'school lands' provided in RCW 54.16.050 refers to school trust land." Slip op. at 17.

We'll let you go through the court's statutory analysis (see pp. 16-19), but suffice it to say the opinion concluded that yes, "school lands" in the statute includes school trust lands: the legislature directed the courts to "liberally" construe the statute, and other, similar grants of power include the condemnation of trust lands.

As for the state's prior public use argument -- that the land was already being used to graze cattle -- the court held that the utility's proposed use was not incompatible with the state's use, and therefore the doctrine did not prohibit the taking. The court also rejected the state's constitutional argument:

PUD's condemnation of a right of way through school lands is consistent with these constitutional provisions because condemnation of an easement does not involve the sale of land in fee and requires payment of full market value. The plain language of section 2, when contrasted with that of section 1, strongly indicates that the drafters did not intend the sale of lesser land interests (e.g., easements) be subject to the public auction requirements of section 2. Had they so intended, they would have included similar "estate or interest" language in section 2 as appears in section 1. Because PUD is not attempting to condemn a fee interest, we need not consider whether the public auction requirements of section 2 would prohibit condemnation of a fee interest.

Slip op. at 27-28.

Finally, the court rejected the state's argument that condemnation of school trust lands violated the state's fiduciary duties as trustee . The fact that condemnation requires the payment of just compensation was not incompatible with the state constitution's prohibition on disposal of trust land, because that limitation is subject to the proviso that "unless the full market value of the estate or interest disposed of" is paid to the state.  

Public Utility Dist. No. 1 of Okanogan Cnty. v. State of Washington, No. 88949-0 (Wash. Jan. 29, 2015)

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Maine: On Second Thought, We Were Right When We Said That Beach Property Is Not Subject To Special Rules

Back in February, we blogged about an opinion from the Maine Supreme Court involving littoral property (that's beachfront property to all you non-lawyers and Navy people), in which the court concluded that those who were asserting a prescriptive easement over the plaintiffs' beachfront property-- the Town  and several neighbors -- had not rebutted Maine's presumption of permissive recreational use of open land, when they introduced evidence that people generally made recreational use of the beach in front of the plaintiffs' properties, without showing specifically where. Which meant that the public did not have a right of access over the plaintiffs' beachfront land. The court also held that Maine does not recognize an "easement by custom." 

Maine apparently allows a party who is disappointed with the court's ruling to ask for reargument. Similar rules for reconsideration also are present in other courts, but with rare exception in our experience, those courts do not grant such motions. Thus, we were somewhat surprised when the Maine Law Court said it would reconsider its decision, and it set the case for reargument.   

The court has now issued a new opinion in Almeder v. Town of Kennebunkport, No. 12-599 (Dec. 9, 2014), which reaches pretty much the same conclusions as its February opinion, at least as far as the law is concerned. The big difference is in the remedy the court imposed. In its earlier opinion, the court vacated the trial court's judgment and remanded the case to deal with what few issues which were bifurcated out below. The new opinion did not disturb the court's earlier rulings that there is a presumption that recreational use of land is permissive, or that Maine law does not recognize easements by custom. The court also reemphasized that it is the nature of the use (recreational) and not the nature of the land (open or wild) that is the key.

But the court expanded the scope of the remand order to allow the Town to attempt to rebut the presumption on a parcel-by-parcel basis, even though the Town had affirmatively abandoned any attempt to do so earlier. Appellate wonks know that in order to preserve an argument or a line of proof for remand, you've got to at least have asked the court below on the first go-round to introduce that evidence or argument. In this case the Town did not do so, and indeed, it "opposed [doing so] at every turn during years of litigation." Slip op. at 17. The Town asserted that it was not required to offer parcel-by-parcel evidence rebutting the presumption of permissive. Despite this, the court allowed it to do so on remand:

We would not ordinarily provide an opportunity for a litigant to do what it has opposed at every turn during years of litigation.

We recognize, however, that the public’s access to scarce resources such as sandy beaches in Maine is a matter of great importance and extraordinary public interest. The public is obliged to rely on legal representatives to assert that interest. In this singular case, in which those representatives chose a litigation strategy that had a substantial gap, equity demands that the matter should be remanded to allow the parties to present evidence as to the location of each Beachfront Owner’s specific parcel, and to give the court an opportunity to consider the factual record of public use already developed, so that the court can determine whether the Town established—as to each of those specific parcels of property—the elements necessary to support a declaration of a public prescriptive easement.

Id. at 17-18.

To counterbalance that extraordinary order, the court also recognized that "the Beachfront Owners have already incurred considerable expense and expended significant effort in responding to the Town's arguments." Id. at 18. Exercising its inherent authority to fee-shift, the court held that the trial court has the discretion to allow the owners to recover attorneys fees if the Town elects to go forward with the proof on remand. 

Two interesting points, which give this an "only-in-Maine" twist:

• Here's how they use beaches in Maine: "The court found that 'while people tended to use the area in front of their own properties or near a public access point most frequently, nearly all used the Beach ‘from river to river’ frequently depending on what activity was being undertaken at the time.' Although the use of the Beach is most intense in the areas of the Beach owned by the Town, people regularly use the full length of the Beach year-round to walk, play in tidal pools, collect sand dollars, play softball, ride horses, and cross-country ski, and to access the water for boating, water-skiing, windsurfing, kayaking, snorkeling, rafting, paddleboarding, and tubing." Slip op. at 5-6. Not how we use beaches in Hawaii, for sure. 
• We were somewhat confused by Maine's Rules of Appellate Procedure when we went searching for the details of the "reargument" process. The rules refer to the "Law Court." See Maine R. App. P.14(b)(3) ("If a motion for reconsideration is granted, the Law Court may make a final disposition of the cause without reargument or may restore it to the calendar for reconsideration or may make such other orders as are appropriate. Frivolous or repetitive motions for reconsideration may result in the imposition of appropriate sanctions."). Not being familiar with the term, and not being able to find out by the usual means (Google) what it meant, we tapped into our Maine resources and were informed that the Maine Law Court is the same court as the Supreme Judicial Court. It is referred to as the "Law Court" when the court is exercising its appellate jurisdiction, and the "Supreme Judicial Court" when the court is exercising some other power such as its original jurisdiction, or as the manager of the judicial branch. Apparently, the term is a holdover from Massachusetts, from the time when what is now the State of Maine was part of the Bay State.

We like this opinion, but for the bit about the scope of remand. We think that if the government adopts a theory of the case and takes a consistent line, it should have to live with the consequences just like the rest of us. But that aside, Maine Law Court, you can be my wingman anytime.

Almeder v. Town of Kennebunkport, No. 12-599 (Me. Dec. 9, 2014)

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