inversecondemnation.com

WVa: Tort, Not Inverse (At Least Where Municipalities Are Involved)

The line between negligence torts and inverse condemnation can be a fine one. In Roman Realty, LLC v. City of Morgantown, No. 220587 (June 11, 2024), the West Virginia Supreme Court came down on the tort side.

Now before we go on, a caution: technically speaking the claimant did not assert an inverse condemnation claim. Rather, after the city removed trees and altered the slope of land such that surface water increased on the owner's land, it brought a petition for mandamus to compel the city to institute eminent domain proceedings. There are places that approach it that way.

Here's the gravamen of the petition:

In its verified petition for writ of mandamus to compel eminent domain proceedings, Petitioner alleged that during project construction, eleven trees were removed from its property and “approximately 1,000 square feet of Petitioner’s property was excavated and used as a dump site.” Additionally, Petitioner stated that eight additional trees were heavily damaged by the project. Finally, Petitioner averred that the slope of its property was greatly altered and surface water increased as a result of Respondent’s activities, leading to “a massive issue of surface water” on Petitioner’s property.

Slip op. at 2.

The trial court granted summary judgment to the city, because the owner could sue in tort (and thus has an adequate remedy at law, and thus no mandamus).

The Supreme Court affirmed. It first acknowledged that the West Virginia Constitution requires just compensation or damages when property has been taken. [B]ut it does not mention or require that such compensation be in the form of eminent domain." Slip op. at 4. Thus, a property owner's rights may be protected if West Virginia law recognizes a tort remedy here.

The court next distinguished such claims against the state (as opposed to claims against a municipality). Yes, the mandamus-to-compel-eminent-domain is a well-settled feature of West Virginia procedure. But that is only in cases against the State, because the State has sovereign immunity from tort claims. But that immunity does not necessarily cover municipalities, which can be sued in tort for damages. And here, the city's lawyer at oral argument conceded that the city does not enjoy "blanket immunity" for torts. Slip op. at 6-7 ("Because Respondent’s counsel plainly stated there was no blanket immunity for Respondent, Respondent did not raise statutory immunity in its amended summary judgment motion before the circuit court, and the circuit court did not address statutory immunity in its order, the Tort Claims Act is not a bar to Petitioner’s ability to receive just compensation through a tort action in this case.").

The court also rejected the owner's argument that a tort claim for damages is not as good as the just compensation remedy. No, the court concluded, "remedies available to a property owner in a tort action against a municipality are, in fact, the same as those available from the State in a condemnation proceeding." Slip op. at 7.

Because the owner was granted leave to amend its complaint to allege a tort claim for damages, the court was satisfied nothing would be lost substantively (at least in this case, as opposed to a future case where the municipality did assert a greater scope of sovereign immunity). Here, the owner merely alleged the incorrect cause of action, an action that amendment would remedy.

Roman Realty, LLC v. City of Morgantown, No. 22-587 (WV June 11, 2024)

Cal App: Inverse Complaint Alleged That Wildfire Was Substantially Caused By Inherent Risk, And That's Good Enough

In Simple Avo Paradise Ranch, LLC v. So. Cal Edison Co., No. B320948 (May 23, 2024), the California Court of Appeal (Second District) held that a complaint adequately alleged a claim for inverse condemnation by asserting a privately-owned public utility's actions substantially caused a wildfire.

The court rejected the utility's argument that alleging that the utility knew its infrastructure was old and improperly maintained and it failed to remediate these known risks was not enough to show substantial causation, and that this negligence shows only that its actions were a concurrent (and therefore not substantial) cause of the wildfire.

The court's analysis turned on the California Supreme Court's Oroville decision in which the court refined the "substantial causation" requirement where a secondary concurrent cause may be enough to absolve the government from inverse liability.

A large part of the opinion is about whether a stipulated judgment is appealable (yes, it is), and if you are an appellate wonk, please read that part. But start on page 20 if you want to understand what drove the court's conclusion on what it takes to adequately plead an inverse claim in a California wildfire (or other "negligence-like") inverse claim.

Here, the master complaint alleged that SCE knew its infrastructure was old and improperly maintained for safety, yet it failed to properly assess and remediate these known risks, resulting in the Thomas Fire and other wildfires. On December 4, 2017 SCE’s electrical distribution system, including its power lines, conductors, electrical infrastructure and equipment and transformers “arced,” igniting the Thomas Fire at two separate locations. Although it had the authority to do so, SCE did not power down its electrical infrastructure before the Thomas Fire ignited, despite a “Red Flag Warning” of high winds and hazardous conditions. The Thomas Fire burned more than 281,000 acres in Santa Barbara and Ventura Counties. Simple Avo further alleged its property in Ventura was destroyed causing damage to its crops, structures, and loss of profits. The master complaint concluded, “The above described damage to Plaintiffs’ property was legally and substantially caused by the actions of SCE in their installation, ownership, operation, use, control, management, and/or maintenance of the electrical distribution system for a public use.”

These allegations are sufficient to allege Simple Avo’s damages were “substantially caused” by SCE’s old and improperly maintained electrical distribution system.

We are not persuaded by SCE’s argument that its own negligence is a concurrent cause of the Thomas Fire that absolves it of inverse condemnation liability.

Slip op. at 34-35.

Case remanded for more.

Simple Avo Paradise Ranch, LLC v. So. Cal. Edison Co., No. B320948 (Cal. Ct. App. May 23, 2024)

Sad 191st Birthday To You, Barron v. Baltimore (Feb. 16, 1833) - The First SCOTUS Takings Case?

Today's the day, 191 years ago, when -- a mere 5 days after oral arguments -- the U.S. Supreme Court issued its (in)famous opinion in Barron ex rel. Tiernan v. Mayor and City Council of Baltimore, 32 U.S. 243 (1833).

Generations of law students study this one in their Con Law classes, and it is mostly known as the case which held that the Bill of Rights limits only the federal government and does not limit the power of states. For the latter, one must look to state constitutions. Barron, of course, was overruled or otherwise neutralized by the Fourteenth Amendment (privileges or immunities clause or the due process clause, take your pick).

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

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

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

As the opinion put it:

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

Barron, 32 U.S. at 247.

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

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

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

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

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

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

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

Id. at 250-251.

Here's the book's description:

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

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

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

We read it a while ago, and do recommend it. It is a real-eye opener. 

And over the past 191 years, history has not been kind to Barron. The Civil War was the end-product of Barron's vibe, one might say. And the Fourteenth Amendment expressly recognized that indeed, states are limited by the Constitution, and that our civil liberties and freedoms are not only acknowledged in state constitutions.

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

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

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

Devillier v. Texas Argument Preview: Do Courts Need Congress' Permission To Enforce The Right To Just Compensation?

"No need to ask, he's a smooth operator..."

On Tuesday, January 16, 2024, the Supreme Court will hear arguments in a case we've  been following closely because it involves the fundamental limitation on the sovereign power to take private property. In our system, the sovereign indeed has the power to take private property against the will of the owner, but only if the taking is accompanied by just compensation.

Before we go on, a disclosure: we filed an amicus brief supporting Devillier's arguments, so we've have an obvious bias. Special kudos to our law firm colleagues -- and self-executing Just Compensation mavens -- Deb La Fetra and Kady Valois for this brief.

Texas Flooded Devillier's Property

Here are the facts in Devillier v. Texas. As part of a road project, the Texas Department of Transportation caused Devillier's property to flood. The state flooding someone's property is one of those "classic" cases what are deemed to be takings, triggering the obligation to provide compensation to the owner. But Texas didn't do so, so Devillier sued Texas in a Texas court for inverse condemnation, seeking just compensation under the U.S. and Texas Constitutions. Importantly, Devillier did not seek redress under any statute, but asserted that his right to just compensation directly under the U.S. Constitution.

Removed! Texas Avoided Its Own Courts

The presence of a federal claim in state court meant that as the defendant, Texas had the choice to remove the case to federal court (a choice it alone could make). Which it did. Texas then asked the federal court to dismiss the lawsuit, arguing that absent some legislative authorization to obtain redress from the State, that the court could not consider Devillier's claim.

Devillier responded that the U.S. Supreme Court has long held that the Just Compensation requirement in the U.S. Constitution is "self-executing," meaning that by its own force the Takings Clause recognizes a civil claim for its breach (and the Fourteenth Amendment expressly applies that requirement to States and their instrumentalities (such as TDOT).

Fifth Circuit: No Cause of Action For Compensation

The Fifth Circuit disagreed with Devillier, and held that federal courts "lack jurisdiction" because "the Fifth Amendment Takings Clause as applied to the states through the Fourteenth Amendment does not provide a right to action for takings against a state[.]"

Congress has provided a cause of action (42 U.S.C. § 1983) to sue "persons" who, under color of state, violate someone's constitutional rights (including taking property without compensation), but it is settled law that the states themselves are not "persons," and there's no dispute that Congress has never adopted a similar statute applicable to states. No cause of action against the State of Texas means no ability to bring a lawsuit against the State of Texas; Devillier's case dismissed.

The Question Presented

After some unusual appellate procedures (sua sponte denial of en banc review after the cert petition was filed), the Supreme Court granted review, limited to this Question Presented:

May a person whose property is taken without compensation seek redress under the self-executing Takings Clause even if the legislature has not affirmatively provided them with a cause of action?

So what should we be looking for on Tuesday morning?

Calder, Barron, and Sovereignty

At heart, we think Devillier goes to the notion of the American concept of "sovereignty," and our vision of what constitutional rights mean. Despite the Ninth Amendment, we tend to treat the listing of rights in the Bill of Rights as a somewhat exclusive expression of the rights we possess. And we also tend to treat the text of the Bill of Rights as defining our rights, rather than as limitations on government power (sovereignty).

As Professor William Davenport Mercer discussed in his book Diminishing the Bill of Rights: Barron v. Baltimore and the Foundations of American Liberty (2017), this may well be a result of the U.S. Supreme Court's decision in Barron v. Mayor & City Council of Baltimore, 32 U.S. 243 (1833). That case is mostly remembered as the one which held that the Bill of Rights limits only the federal sovereign power, and if property owners wanted to assert a claim for compensation against Baltimore, they could not point to the Fifth Amendment, but must instead look to compensation requirements in their state constitution. Barron's holding, of course, was neutered by the Fourteenth Amendment and officially put to rest by the later Chicago Burlington & Quincy R. Co. v. Chicago, 166 U.S. 226 (1897). But in Professor Davenport's estimation,even though Barron is no longer good law, the general vibe of the decision -- that constitutional rights are defined by the text of the constitution -- has lived on. Maybe Devillier will be an opportunity to check the pulse of the Justices on where they stand on this.

After all, the idea that the two limitations spelled out in the Fifth Amendment and its state law counterparts are not merely admonitions to the sovereign to "don't do that" (i.e., take property without a public use or without paying compensation), but rather the notion that We the People never delegated to our governments the power to take property without a public use or without providing just compensation. If so, then you can enforce the right without needing the permission of the sovereign. This might have been best expressed by Justice Chase in Calder v. Bull, 3 U.S. (3 Dall.) 386 (1798):

A law that punished a citizen for an innocent action, or in other words for an act which when done was in violation of no existing law; a law that destroys or impairs the lawful private contracts of citizens; a law that makes a man a judge in his own cause, or a law that takes property from A. and gives it to B. It is against all reason and justice for a people to entrust a legislature with such powers, and therefore it cannot be presumed that it has done it. The genius, the nature, and the spirit of our state governments amount to a prohibition of such acts of legislation, and the general principles of law and reason forbid them. The legislature may enjoin, permit, forbid, and punish; It may declare new crimes and establish rules of conduct for all its citizens in future cases; it may command what is right and prohibit what is wrong, but it cannot change innocence into guilt or punish innocence as a crime or violate the right of an antecedent lawful private contract or the right of private property. To maintain that our federal or state legislature possesses such powers if it had not been expressly restrained would, in my opinion, be a political heresy altogether inadmissible in our free republican governments.

Id. at 388.

If Texas never had the power to take property without compensation, then doesn't it follow that Devillier does not need the permission of Congress (or Texas) to enforce that right? 

What Else to Look For on Tuesday

Other things to look for on Tuesday as you listen along:

• Incremental, QP-centric arguments. Look for the Justices viewing the issue narrowly, trying to keep the decision in the case framed within the Question Presented. Like they seemed to do in the recently-argued Sheetz case. The Court has taken a very incremental approach in takings cases, and we're thinking that if the Court wants to answer the QP -- and no more, yet -- things could go very well for Devillier. Short story: do you need a legislative cause of action to file a claim for compensation for a taking? No. End of (this) story. 
• Been there, done that. Relatedly, there's a strong argument that the Court has already made it clear that the just compensation requirement is "self-executing," meaning that if it takes property, the government must provide compensation; and if it does not, nothing more is needed for the owner to ask a court to order the government to provide it. If so, then decisions like Chicago, Burlington and First English resolve the QP, and we're done. To us, the vibe of First English (if not its express holding) has always been that no state can deny it has the obligation to provide compensation when it takes property. If the Court wasn't saying this in First English, then what was it getting at?
• History and tradition. This is a property rights case, so you know there's likely to be a lot of history talk. You may want to brush off your copy of the Court's recent decision in PennEast, which held that the State of New Jersey was not immune from an exercise of federal eminent domain power because history shows that by ratifying the Constitution, the states consented to having their property taken by the federal government, and the preexisting notion that eminent domain is, as Grotius put it, eminent. 
• CFC mavens, rejoice. If there's buy-in to the notion that the Tucker Act does not create a cause of action, but is merely a jurisdictional statute assigning claims for money against the federal government to the Court of Federal Claims, then Devillier is along the path to success. After all, the federal courts have been entertaining and deciding takings claims seeking compensation for decades.
• Restraining the temptation to go large. One might be tempted in this case to go big, because after Knick, the lower courts seem to be throwing up all sorts of procedural and technical hurdles to property owners seeking compensation for takings in federal court. But we think that this is likely something the Court will want to avoid. The facts in this one are very narrowly drawn, and don't raise a lot of the interesting and unresolved issues that are plaguing the lower courts. Save those issues for those cases, not this one.
• Keeping the judicial powder dry. Thus, if the Court answers the QP, it can leave for later resolution better cases with more developed factual records and arguments. A case in which a property owner sues a State for just compensation in federal court (and not one where the State is the party which invoked federal jurisdiction), for example. Such a case would directly raise the issue the Court need not address here: does the Eleventh Amendment change anything?
• Limiting principles. The term "Bivens" isn't exactly popular at the Court these days. If it looks like a majority is going Devillier's way, look for arguments distinguishing the right to compensation from other constitutional rights. If takings require money as a remedy, then why not the same, for example, for a violation of the Speech Clause? Hint: the distinction is right there in the text of the Fifth Amendment, which not only expresses limitations on sovereign power (no takings without public use and no takings without compensation), but also informs courts in terms that courts understand what remedy is available (compensation). Takings are sui generis.
• Game-playing. The Court has been rightly skeptical when it looks like the government is being too-clever-by-half, especially in property cases. The San Remo preclusion trap, the ripeness "Catch-22," ripeness as exhaustion-by-another-name, and states manipulating property law.
• Chicken Little. There have been some arguments here -- as in nearly every property rights case -- that a ruling in favor of the property owner will result in a flood of litigation, and the inability of the government to go on as usual. The Court has -- in nearly every case in which this argument is made -- rejected that claim. By design, a limitation on sovereign power cannot be too burdensome: if the constable must abide by the Constitution, so must the DOT.
• You say "tomato." Do you pronounce the property owner's name as "de-vill-ey-er" or "day-vill-e-ay," or some other way? As in Key-lo or Keh-low, Dow-behrr or Dau-bert, or May-hon or Mannnn? (Either way, if we were arguing on Tuesday, we'd say it exactly the way the Chief Justice pronounces it.)

What's Not at Issue

Here are some issues we think are not presented:

• Eleventh Amendment. This should not be an issue here, because Texas forfeited any immunity that it might have otherwise enjoyed under the Eleventh Amendment by removing the lawsuit from its own courts to a federal court. Lapides v. Bd. of Regents of Univ. Sys. of Ga., 535 U.S. 613, 622–23 (2002); Embury v. King, 361 F.3d 562, 566 (9th Cir. 2004) (“Allowing a State to waive immunity to remove a case to federal court, then ‘unwaive’ it to assert that the federal court could not act, would create a new definition of chutzpah.”). And if we want to get very technical, the Court has already said that the Eleventh Amendment mirrors plain-old sovereign immunity, and that the sovereign can only be sued it (a) it consents, or (b) the "plan of the convention" reflects the understanding that by ratifying the Constitution, the states gave up that sovereign immunity (again, check out the Court's recent decision in PennEast for more). If so, maybe Texas' removal of the case settled the Question Presented. 
• MAGA. The question of the meaning of "self-executing" is also raised in the Trump v. Anderson case which the Supreme Court is considering on an expedited basis. That's the one where the ex-president is challenging the Colorado Supreme Court's ruling that he can be DQ'd from the Colorado ballot because section 3 of the Fourteenth Amendment renders him ineligible. One of the arguments in the case focuses on is that section 5 of the Fourteenth Amendment, which provides that "Congress shall have the power to enforce, by appropriate legislation, the provisions of this article," means that Congress must first adopt enabling legislation before someone can be barred from running. While an interesting and unsettled question, as noted above we think that Just Compensation stands apart because Devillier is arguing that just compensation is self-executing, and not as in the Trump case, that the Fourteenth Amendment is necessarily self-executing.

See you on Tuesday!

Brief Amicus Curiae of Pacific Legal Foundation, Nat. Fed. of Ind. Bus. Small Bus. Legal Center, Inc., and...

Inverse Condemnation And Hawaii's Wildfires: Lawprof Shelley Saxer Joins Clint Schumacher's Eminent Domain Podcast

Another must-listen episode of Clint's Eminent Domain Podcast. He's joined by Pepperdine Law School Professor Shelley Ross Saxer:

Professor Shelley Ross Saxer joins the show to discuss the role that the damaging clauses found in more than half of state constitutions across the United States play in inverse condemnation claims related to natural disasters such as the recent Hawaii wildfires.

Definitely worth a listen (as always with EDP). Stream above, or download here.

Links And Materials From "Inverse Condemnation & Paying for Disasters"

Yesterday, during the Annual Meeting of the Hawaii State Bar Association, we participated in a program sponsored by the Real Property and Financial Services Section, "Inverse Condemnation & Paying for Disasters."

As you can see above, we joined lawprofs Shelley Saxer and David Callies to share thoughts about inverse claims, and the difference between these property arguments and tort negligence claims.

Here are some of the key cases and materials which we mentioned (or should have):

• Lights Out In The Land Of No: The Practical Effects Of California's Wildfire Inverse Condemnation Doctrine
• Cal Supreme Court: Stop Saying Inverse Condemnation Is "Strict Liability"
• MR-GO, Katrina Flooding: Inverse Condemnation And Schlimmbesserung At The Federal Circuit
• Evaluating Emergency Takings: Flattening the Economic Curve, 29 Wm. & Mary Bill of Rights J. 1145 (2021)
• First Lawsuit Filed (Incl. Inverse Condemnation) For Maui Wildfire: Is California-Style Inverse Condemnation Coming?
• Our Drive-Time Conversation About Hawaii Inverse Condemnation And Wildfires
• Shelley Saxer, Paying for Disasters, 68 Kan. L. Rev. 413 (2020)
• Inverse Condemnation And Wildfires

To those of you who were able to join us -- mahalo!

Fifth Circuit Kicks Down The SWAT Takings Door (And Boots The Issue Upstairs)

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

Recall that the U.S. District Court for the Eastern District of Texas concluded that the City of McKinney, Texas was liable for the taking of Vicki Baker's home, after city police officers destroyed a large part of it while apprehending a suspect who had taken refuge therein. The court awarded just compensation and the city appealed.

Now, the other shoe drops: in Baker v. City of McKinney, No. 22-40644 (Oct. 11, 2023), the U.S. Court of Appeals for the Fifth Circuit reversed, concluding that because the invasion was necessary and a justified use of the city's police powers, it does not owe compensation.

We've been down this path before, so we won't go over it in detail (recall that the Tenth Circuit reached the same conclusion and the subsequent cert petition was denied by the Supreme Court). Our thoughts about the issue are in the amicus brief we filed in that case, in which we argued that an invocation of police power or necessity isn't dispositive or outcome-determinative. 

The Fifth Circuit has now joined the Tenth:

We conclude that, as a matter of history and precedent, the Takings Clause does not require compensation for damaged or destroyed property when it was objectively necessary for officers to damage or destroy that property in an active emergency to prevent imminent harm to persons. Baker has maintained that the officers’ actions were precisely that: necessary, in light of an active emergency, to prevent imminent harm to the hostage child, to the officers who responded on the scene, and to others in her residential community. Accordingly, and despite our sympathy for Ms. Baker, on whom misfortune fell at no fault of her own, we REVERSE.

Slip op. at 2.

The Fifth Circuit takes a slightly more nuanced view, rejecting the city's invitation to hold that any substantial police power reason would be enough to avoid the obligation to provide compensation. Instead, "the mere fact that Baker's property has been damaged or destroyed pursuant to the City's police power cannot decide this case." Slip op. at 8. So the government isn't categorically exempt. (Silver linings and all that.)

But the opinion also concluded that the worm doesn't turn in the property owner's direction either: "[w]hat Baker needs, in other words, is historical or contemporary authority that involves facts closer to those at bar and where the petitioner succeeded under the Takings Clause." Slip op. at 11. And apparently, there is "historically oriented legal scholarship" that shows that the "'necessity' or 'emergency' privilege has existed in Takings Clause jurisprudence since the Founding." Slip op. at 12. [Barista's note: our own contribution to the legal scholarship was somehow overlooked by the court - the nerve!]

Read the court's journey through the history for more. See slip op. at 12-17.

The bottom line: if the invasion by Five-O was necessary, then no taking. And here, Baker acknowledges that "it was objectively necessary for officers to damage or destroy her property in an active emergency to prevent imminent harm to persons." Slip op. at 17.

But that's not the right question in these type of cases, is it? After all, the central question isn't necessity, but of cost spreading. The court acknowledged that the core vibe of takings is the Armstrong principle:

[T]he Supreme Court has often stated that “[t]he Fifth Amendment’s guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, 364 U.S. 40, 49 (1960), quoted in Tyler, 598 U.S. at 647. This statement’s relevance to Baker, who is faultless but must “alone” bear the burdens of a misfortune that might have befallen anyone, is manifest.

Slip op. at 18. In short, although it acknowledges that Baker alone is bearing the cost for a public good, the Fifth Circuit washes its hands of the most important question: is it just and fair that this is so? To the Fifth Circuit, history says yes.

And this leads to the opinion ending on what appears to be another silver lining, the Fifth Circuit seemingly inviting a cert petition asking what it views as the only court capable of making that call:

As a lower court, however, it is not for us to decide that fairness and justice trump historical precedent, particularly Supreme Court precedent, where it has long recognized a necessity exception that excludes those like Baker from the protection of the Fifth Amendment’s Takings Clause. Such a decision would be for the Supreme Court alone.

Id.

Will one be forthcoming? We sure wouldn't bet against it.

Baker v. City of McKinney, No. 22-40644 (5th Cir. Oct. 11, 2023)

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

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

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

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

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

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

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

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

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

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

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

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

So please don't miss out.

The Property Rights Hall of Fame (second plaque)

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

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

Details here.

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

Come, join us!

Lawprof Shelley Ross Saxer Joins Bloomberg Law Podcast On Maui Wildfires And Inverse Condemnation

Here's our colleague and friend, Pepperdine lawprof Shelley Saxer, an expert on inverse condemnation and its use in mass disaster cases, on the use of inverse condemnation as a theory of recovery for the Maui disaster. Here's the description from Bloomberg Law Podcast:

"Shelley Ross Saxer, a law professor at Pepperdine University, discusses the Lahaina fire victims using a legal shortcut to secure compensation from Hawaiian Electric. June Grasso hosts."

Worth a listen.

Our Drive-Time Conversation About Hawaii Inverse Condemnation And Wildfires

On this morning's drive-time program, we joined KHVH's Rick Hamada about whether Hawaii might adopt California's version of inverse condemnation liability in wildfire cases. We also tried to clear up a few misconceptions (gad, I used "disinformation," a term I try to eschew).

Here's the program description:

Inverse Condemnation and Maui Wildfires: A Conversation with Robert Thomas

Tune in to a thought-provoking episode where we engage in a conversation with legal expert Robert Thomas on the topic of inverse condemnation in relation to the recent Maui wildfires. As the community grapples with the aftermath of the devastating fires, we delve into the legal aspects of property rights, government accountability, and compensation for affected individuals. Join us as we explore the implications of inverse condemnation, a legal doctrine that holds governments accountable for taking private property without just compensation. Gain insights into the challenges faced by property owners in the wake of natural disasters and the legal avenues available to seek redress. Don't miss this informative discussion shedding light on the intersection of property rights, wildfires, and legal recourse.

Thanks to Rick for having me on.

First Lawsuit Filed (Incl. Inverse Condemnation) For Maui Wildfire: Is California-Style Inverse Condemnation Coming?

Well, that was quick. As reported here ("HECO Kept The Power Flowing In Lahaina Even As Poles Toppled"), we've already seen the first lawsuit filed seeking recovery for the Maui wildfire that destroyed Lahaina town -- a class action even before there's been any official word about what caused or contributed to the conflagration:

Meanwhile, a group of Honolulu- and California-based law firms filed a class action suit Saturday against HECO on behalf of victims and survivors of the Lahaina fire.

The suit alleges that HECO’s downed power lines caused the fire. Graham Lippsmith of the firm Lippsmith LLP said Saturday that the suit was also largely based on HECO’s decision not to de-energize the power Tuesday in West Maui.

A separate Honolulu attorney also said Saturday that his firm is weighing whether sue HECO on behalf of its clients, also largely based on the downed poles.

They were in such a rush, they filed on Saturday, in an Oahu court. The defendants are various electric utility companies (not the government), and claims include negligence, gross negligence, inverse condemnation under the Hawaii Constitution, and ultrahazardous activity. Relief sought included damages, just compensation, and an injunction requiring shutting off power during high winds and the burying of transmission lines.

We naturally focused on the inverse claim. Hawaii inverse condemnation law is very underdeveloped, and there isn't a whole lot there to latch onto. And Hawaii certainly has not adopted the California model of inverse condemnation liability for wildfires. So this will be a case of first impression.

To get a flavor of how that's worked out in California, we refer you to our post from a couple of years ago: "Lights Out In The Land Of No: The Practical Effects Of California's Wildfire Inverse Condemnation Doctrine." And this post: "New Cert Petition: Fifth Amendment Requires California To Spread The Cost Of Wildfire Inverse Condemnation To Ratepayers."

With this being a matter of first impression under Hawaii law, the two vacant and-now-being-filled seats on the five-Justice Hawaii Supreme Court sure do loom large.

Time to pay attention.

CAFED: Temporary But Recurring Flooding Is A Categorical Taking, Not Penn-Central-Plus

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

In Ideker Farms, Inc. v. United States, No. 21-1949 (June 16, 2023), the U.S. Court of Appeals for the Federal Circuit held that temporary, but recurring government-caused flooding was correctly treated by the Court of Federal Claims as a categorical per se taking, and not under Arkansas Game & Fish's Penn-Central-plus multifactor test. The court also held that the property owners are entitled to just compensation for their lost crops.

The opinion is pretty dense (39 single-spaced pages) so we're not going to provide a blow-by-blow account of the arguments and the court's reasoning. But we will hit some of the highlights:

• The Missouri River floods annually. In the 1990s, the Corps of Engineer and Fish and Wildlife Service "began discussions concerning proposed changes to the River designed to mitigate the environmental impact" of the federal flood control measures built and installed long ago. Eventually (you know where this is going, don't you?), the federal agencies decided to "restor[e] the Missouri River to a more natural state," and abandoned its former policy of prioritizing flood control (2004 Changes).
• Well guess what? "While the period from 2000-2006 was largely a drought, periodic flooding returned in 2007, 2008, 2010, 2011, 2013, and 2014." Slip op. at 7. Property owners on the short end "alleged the 2004 Change caused frequent and severe flooding on Plaintiffs' farms between 2007 and 2014 that amounted to permanent, physical takings under the Fifth Amendment." Id. 
• Eventually, the CFC concluded the government caused the flooding and after a trial held the government liable for taking a permanent flowage easement. Just compensation awarded to the three representative plaintiffs: $7 million. That compensation did not include anything for the loss of the crops destroyed; the CFC held that loss was a consequential damage and not recoverable. Slip op. at 8. Both sides appealed: the government from the liability judgment, the owners from the denial of crop compensation.
• The Federal Circuit first rejected the government's statute of limitations argument (there always seems to be one of those, doesn't there?). The "stabilization" doctrine, which instructs courts to look when the impact of the government's acts or omissions stabilized when the impacts are spread out over time, applies here. See slip op. at 15 ("When a reasonable plaintiff knew or should have known that his claim stabilized does not need to correspond identically with the physical event giving rise to liability."). Thus, a takings claim need not invariably be triggered by the physical event giving rise to liability occurs. When the harm stabilizes is a fact question, and the CFC was not clearly erroneous when it concluded the damage settled in 2014, not earlier. Slip op. at 16.
• On to the merits of the takings claim. The court rejected the government's argument that the flooding must be analyzed under the Penn-Central-plus factors for temporary flooding outlined by the Supreme Court in Arkansas Game & Fish. True, the flooding here did not cover the plaintiffs' properties permanently with water. "The [CFC] accepted based on the parties' stipulation that the flooding in this case is permanent, not temporary, in nature. In short, the Government has not ceased and does not plan to cease flooding Plaintiffs' lands." Slip op. at 19. If it wasn't clear enough from Arkansas Game & Fish that permanent-yet-intermittent flooding is treated as a categorical taking, then the Supreme Court's more-recent Cedar Point opinion makes that "abundantly clear."

Where the government takes a permanent right of access, akin to an easement in gross, even if used only intermittently, it is unquestionably an appropriation of the owner’s right to exclude. It is undisputed that the Corps has permanently burdened Plaintiffs’ land with a right to access their land with flood waters.

Slip op. at 20.

• Here's the holding: "Accordingly, Arkansas Game & Fish II’s multi-factor test does not apply to permanently recurring flooding. Instead, such flooding that foreseeably or intentionally results from government action is a categorical physical taking." Slip op. at 21-22.
• Some clarification: "To be clear, we do not alter or amend our trespass-versus-takings jurisprudence or question the applicability of Arkansas Game & Fish II to temporary floodings. Cedar Point, 141 S. Ct. at 2078 (“[O]ur holding does nothing to efface the distinction between trespass and takings. Isolated physical invasions, not undertaken pursuant to a granted right of access, are properly assessed as individual torts rather than appropriations of a property right.”). Nor do we establish a hardline rule for establishing what is a permanent or recurring flooding. We simply reinforce the principle that the permanent appropriation of a flowage easement is 'clear enough' to be on the side of a per se taking and not a trespass." Slip op. at 22 (some citations omitted).
• The Federal Circuit also upheld the CFC's causation analysis. Check out pages 22-29. We think the critical part of this analysis is the court's rejection of the government's assertion that this case is like the MR-GO case in which the Federal Circuit held that Katrina-related flooding is a tort not a taking. 
• The crop-damage analysis begins at page 31. The court agreed with the property owners that their crops are "property" for which they are entitled to receive just compensation and the loss of the crops aren't (uncompensated) consequential damages. Those damages are damages that flow from the taking and are collateral. After all, the flooding wiped out the crops, and it wasn't just some side effect. Slip op. at 33.
• "Plaintiffs do not claim compensation consequential to the taking of an easement—rather, they seek compensation for the government’s appropriation
  of two distinct property interests." Slip op. at 34.  

Will the federal government try and take this one further up the chain? We'll see.

Ideker Farms, Inc. v. United States, No. 21-1849 (Fed. Cir. June 16, 2023)

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

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

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

In Devillier v. Texas, No. 21-40750 (Nov. 12, 2022), the Fifth Circuit's cryptic opinion concluded that "the Fifth Amendment Takings Clause as applied to the states through the Fourteenth Amendment does not provide a right to action for takings against a state[.]" Slip op. at 1-2. Here's the entirety of the decision (minus footnotes):

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

Here's the Question Presented by the Petition:

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

May a person whose property is taken without compensation seek redress under the self-executing Takings Clause even if the legislature has not affirmatively provided them with a cause of action?

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

Here's The Program For The 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-4, 2023, Austin

Here it is, the official agenda and program for the 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, February 2-4, 2023 (with a special event the evening of Wednesday, February 1, 2023 to entice you to arrive early).

Here's the brochure with the complete agenda, schedule, and faculty listing. But to tempt you, here are some of the highlights of the program:

• Everything Old is New Again: Why Today’s Practitioners Need to Understand the Original Meaning of the Takings and Just Compensation Clauses

• Private Utility Takeovers – Lessons From a 67 Day Trial

• Valuation Issues When Billboards and Signs are Condemned

• Setting Client Expectations and Identifying Red Flags

• Developing Property Right Issues in Texas - Questions and Answers from the Bench: A View From the Bench (with Texas Supreme Court Justice Jimmy Blacklock)

• Eminent Domain and Regulatory Takings Updates: Important Decisions You Need to Know

• Ethics: Building Your Practice by Mentoring the Next Generation of Eminent Domain Lawyers

• ...and much more!

To register, go here.

Register now and hold your space. In the past several years, we have sold out due to the conference room capacity, and the conference hotel block. So don't delay. 

Looking forward to seeing everyone in Austin for the 40th edition of the Conference.

Program Brochure, 40th ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Austin, Texas, Feb 1-...

CAFED Hears Arguments In Two Takings Cases

Ideker Farms, Inc. v. United States, No. 21-1849

As written up in the FedCircuitBlog (a must-follow for all you federal takings mavens):

It concerns the federal government’s liability for taking private property. Specifically, in this case, the Federal Circuit will review the conclusion of the Court of Federal Claims that the government’s action was the cause-in-fact of flooding damage and that, as a result, a taking-by-flooding occurred. The government appeals the CFC’s judgment, while Ideker Farms cross-appeals.

Behrens v. United States, No. 22-1277

Also from the FedCircuitBlog:

Behrens v. United States, which concerns a claim the federal government was liable for taking land for public use through the National Trails System Act. Specifically, in this case, the Federal Circuit will review the determination by the Court of Federal Claims that the plaintiffs were not entitled to compensation because the scope of the easement in question was broad enough to encompass railbanking and the construction of a hiking and biking trail.

Registration Open Now: ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Jan 26-29, 2022, Scottsdale

All the topics you want to know about, presented by top-notch faculty from across the nation. Sessions include:

• Keynote: Do Animals Have Property Rights?
• Did the Supreme Court Signal a New Direction in Property Rights in Cedar Point Nursery?
• Maximizing Relocation Benefits: Understanding the Law and Regulations to Ensure Fairness
• Challenging Public Use: Lessons From a 67-Day Trial
• COVID Takings
• Property Rights as Civil Rights
• Eminent Domain National Update
• Federal Court and the Daubert Challenge: How to Prepare
• How to Position Your Client for the Fallout When Projects Don't Get Built
• Rural Broadband and the Emerging Constitutional Challenges
• Are Precondemnation Entry Statutes Still Valid After Cedar Point Nursery?
• How Condemnor and Property Owners' Counsel Prepare the Battlefield
• How Will the Trillion Dollar Infrastructure Bill Impact Your Practice?
• Ethics
• ...and more, including a full slate of networking and social events!

We've sold out the last few years, so don't miss out. Room block now taking reservations. Registration and agenda information here.

Join us in Scottsdale in January!

Join Us For The 39th Annual ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Jan 26-29, 2022 (Scottsdale, AZ)

All the topics you want to know about, presented by top-notch faculty from across the nation. Sessions include:

• Property Rights as Civil Rights
• Eminent Domain National Update
• Just Relocation: Understanding the Law and Regulations to Ensure Fairness
• Challenging Public Use: Lessons From a 67-Day Trial
• COVID Takings
• Federal Court and the Daubert Challenge: How to Prepare
• Did the Supreme Court Signal a New Direction in Property Rights in Cedar Point Nursery?
• How to Position Your Client for the Fallout When Projects Don't Get Built
• Rural Broadband and the Emerging Constitutional Challenges
• Are Precondemnation Entry Statutes Still Valid After Cedar Point Nursery?
• How Condemnor and Property Owners' Counsel Prepare the Battlefield
• How Will the Trillion Dollar Infrastructure Bill Impact Your Practice?
• Ethics
• ...and more, including a full slate of networking and social events!

We've sold out the last few years, so don't miss out. Room block now taking reservations. Registration and agenda information here.

Join us in Scottsdale in January!

New L Rev Article: "Floods, Fires, and Inverse Condemnation"

Here's what we're reading today (inter alia): Walter W. Heiser, Floods, Fires, and Inverse Condemnation, 29 N.Y.U. Envtl. L. J. 1 (2021).

From the Introduction:

This Article examines the proper application of the doctrine of inverse condemnation in two important areas: flood damage to private property caused by a public improvement (e.g., a flood control, storm drain, or sewer project), and wildfire damage to private property caused by a project (e.g., electricity or telephone lines) undertaken by either a public or privately-owned utility. Under the doctrine of inverse condemnation, a plaintiff may recover for a physical injury to private property caused by a public improvement as deliberately designed, constructed, or maintained.

....

How courts define the standard of liability in inverse condemnation cases will become increasingly important in both the flooding and wildfire contexts. The continuing nature of climate States and more wildfires in others. This Article examines issues concerning the standard of liability in both contexts with the goal of determining their proper resolution by the courts. While the analysis will often focus on California authorities, it draws upon sources from other jurisdictions as relevant.

We recommend you check it out.

Links From Today's ABA RPTE Session

Our thanks to our friends and colleagues at the ABA Section of Real Property, Probate & Trust Section's Land Use and Environmental Group for inviting us to a discussion of the latest and greatest decisions of interest.

We only had an hour together, so naturally could not cover everything of interest (indeed, we reserved a big discussion of the biggest item, the Supreme Court's decision in Cedar Point, assuming that the Group will schedule a full session on that decision alone). So here is our curated list of what we think are the most interesting recent decisions in areas of interest to the Group:

• Land use and short-term rentals: Euclid Lives! Mass SJC: "Short-Term" Rental Is Not A Permissible Primary Use In A Residential Zone Because Not Of "Residential Character"
• Environmental standing: Iowa: No Standing To Ask Court To Rule That Public Trust Doctrine Requires Legislation To Regulate Farmers
• Environmental standing, part 2: Hawaii Supreme Court: Anyone Claiming That An Affordable Housing Project Might Impact Their Property Interests In A "Clean And Healthful Environment" Has Standing To Object
• Exactions (sorry we didn't get to this one in the session, but here it is anyway because it is a good case to review): Ordinance Requiring Developer Pay For "All Necessary Road Capacity Improvements" Violates Nollan/Dolan
• Public use in eminent domain: So Close: SCOTUS Declines To Revisit Kelo (For Now) (a taking to remedy potential future blight is a "public use")
• Public use in eminent domain, part 2: Ill App (unpub, unfortunately) Strikes Down Taking For Road To Be Owned By The Public
• Just compensation in eminent domain: Louisiana SCT: No Statutory Attorneys' Fees For Pipeline Taking - But LA Constitution's Just Comp Clause Requires Owners Recover "The Full Extent" Of Their Loss (Which Includes Fees)
• Regulatory takings, emergencies, and necessity: Fourth Circuit: No Taking When Aerial Pesticide Spray Killed Bees ... But Not Why You Think

Thanks again, colleagues.

Your 2021 ALI-CLE Eminent Domain & Land Valuation Litigation Conference (Jan 28-29, Remote) BINGO Card

If you "get" this, you should be registered for the 38th Annual Eminent Domain & Land Valuation Litigation Conference, to be held remotely on Thursday and Friday, January 28-29, 2021.

The list is growing rapidly, and you need to join us!

This is the "big one" where the nation's best practitioners, scholars, jurists, and other industry professionals gather to talk shop about the subjects we know and love. We're having programs with intriguing subjects such as "Planning to Win: Practical Strategies for a Successful Inverse Condemnation Case," "How Do I Keep My Firm’s Doors Open When the Courthouse Doors Are Closed? Making Your Practice More Efficient When You Can’t Try Cases," "Where Is the Supreme Court Headed on Takings Cases? Regulatory Takings Update and Cedar Point Preview," "No Show and All Tell: Breaking News in Property Rights and Takings," "More Than the Fifth Amendment: Other Tools for Upholding Property Rights," and "Evaluating Lockdown, Moratorium, and Emergency Claims."

Details here (ALI-CLE's page with faculty, agenda, and times), or here (the latest episode of Clint Schumacher's Eminent Domain Podcast, where we preview the Conference). Here's your chance to be a part of what is the best conference on these topics.

Always wanted to join in, but didn't like the travel? Here's your chance to try us out with reduced tuition. A long-timer coming back? Look for the special deal which includes a discount on the 2022 conference.

Law Students: Register Free For The 38th Annual ALI-CLE Eminent Domain & Land Valuation Litigation Conference (Jan 28-29, 2021)

Are you a law student interested in takings, eminent domain, land use, environmental, and other dirt-lawyering related topics? If so, good news: thanks to the generosity of ALI-CLE, you can register gratis (free!) for the upcoming 38th Annual Eminent Domain & Land Valuation Litigation Conference, to be held remotely on Thursday and Friday, January 28-29, 2021.

This is the "big one" where the nation's best practitioners, scholars, jurists, and other industry professionals gather to talk shop about the subjects we know and love. We're having programs with intriguing subjects such as "Planning to Win: Practical Strategies for a Successful Inverse Condemnation Case," "How Do I Keep My Firm’s Doors Open When the Courthouse Doors Are Closed? Making Your Practice More Efficient When You Can’t Try Cases," "Where Is the Supreme Court Headed on Takings Cases? Regulatory Takings Update and Cedar Point Preview," "No Show and All Tell: Breaking News in Property Rights and Takings," "More Than the Fifth Amendment: Other Tools for Upholding Property Rights," and "Evaluating Lockdown, Moratorium, and Emergency Claims."

Details here (ALI-CLE's page with faculty, agenda, and times), or here (the latest episode of Clint Schumacher's Eminent Domain Podcast, where we preview the Conference). Here's your chance to be a part of what is the best conference on these topics, risk-free. 

To register or to find out more, email me.

This Thursday, Sept 10: "Governmental Emergency Powers and the Constitutional Implications Arising from Pandemic Orders" (Free to ABA Members)

Please join us and a panel of expert speakers including our friend and colleague Tony Della Pelle (see the flyer for the complete list), this Thursday, September 10, 2020 at 1pm Eastern Time for the ABA-produced webinar "Governmental Emergency Powers and the Constitutional Implications Arising from Pandemic Orders."

Free to ABA members, a modest cost for those who are not. Register here.

Here's the plan:

In the wake of the unprecedented global pandemic, every level of government has taken steps to address the public health crisis. These steps have manifested in orders which impact businesses and individuals alike including quarantine orders, travel restrictions, occupancy limitations, and restrictions on movement. This is the not the first pandemic, nor the first national crisis, faced by the United States. There have been several lawsuits filed challenging the constitutionality of the COVID-19 orders, including challenges based on the right to travel, the right to associate, the right to free exercise of religion, and other federal and state constitutional provisions. This panel of litigation practitioners will provide the constitutional and statutory context for governmental emergency powers, then will identify how those principles inform an analysis of the Covid-19 orders. The panel will discuss the lawsuits challenging the orders and the current jurisprudence.

Faculty:

• Ali Dehghan, James G. Dibbini & Associates, P.C (New York, NY)
• Anthony F. DellaPelle, McKirdy, Riskin, Olson & DellaPelle, P.C (Morris Plains, NJ)
• Robert H, Thomas, Damon Key Leong Kupchak Hastert (Honolulu, HI)
• Nicholas Shapiro, Phillips & Angley (Boston, MA) [Moderator

Sign up, join us, and add to the conversation!

Breaking: News About The 2021 ALI-CLE Eminent Domain & Land Valuation Litigation Conference (Jan. 28-29, 2021)

News just in: we've just received confirmation that the Conference will not be in-person in Scottsdale in January 2021, and we're going online.

Not a big surprise, but still a bit disappointing, and it's a shame that the circumstances won’t allow us to meet in-person to talk shop and to renew our friendships like we do every year. 

But rest assured we're making lemonade out of these lemons, and we'd appreciate everyone holding the dates on your calendars to join your colleagues from across the nation for the online Conference. And no, we're not going to do two-and-a-half-days remotely, we're paring down the agenda and will be focusing on hot topics, and great presenters. The remote format has some advantages, and we’re taking advantage of the circumstances to plan a conference more interactive and a bit different than usual.

This will also be a great program for first-time Conference participants. If you haven't taken the dive and joined us in the past because you could not spend the time away or the costs of attending in-person kept you away, this will be your chance to see what we're all about and get a taste of what you've been missing, so you can join us when we reconvene in-person in 2022. 

Stay tuned for more details, to be released shortly! 

BIO In "Police Power" Takings Case: Can A Municipality Be Liable For A Taking If The Police Destroy Private Property In The Course Of Apprehending A Suspect?

Here's the city's Brief in Opposition in a case we've been following (so closely, in fact, that we filed an amicus brief in support of the property owner - see "Amicus Brief: Invocation Of "Police Power" Is Not Dispositive In Takings"). A case in which the issues have taken on new and heightened importance.

This is the case where the municipal police pretty much destroyed a family home in the course of their efforts to dislodge a shoplifter who had taken refuge there while fleeing. The homeowner sought compensation for a taking. The Tenth Circuit, however, concluded "no taking" because the police were exercising the police power. And you can't have a taking where the government is exercising the police power, right?

The homeowner filed a cert petition, arguing that "[t]he question presented is whether there is a categorical exception to the Just Compensation Clause when the government takes property while acting pursuant to its police power."

The city doesn't see it that way, naturally, and it formulates the Question Presented this way:

This Court, along with lower federal and state courts, has historically and consistently distinguished between the power of eminent domain and the police power. The question presented is whether damage sustained to a third-party’s rental property caused by law enforcement’s admittedly reasonable efforts to apprehend an armed, aggressive and barricaded suspect gives rise to a compensable taking of property under the Fifth Amendment of the United States Constitution.

The reason why we think that this case has taken on even more importance, is twofold. First, the case presents the same issue as in the coronavirus takings cases (here are some of the complaints that have been filed in courts around the nation: see here, here, here, here and here). Our thoughts on the takings aspects of that issue here ("Evaluating Emergency Takings: Flattening The Economic Curve."). This case could not be a more timely opportunity for the Court to provide guidance on whether an invocation of "police" or emergency power short-circuits the takings analysis.

Second, the ongoing protests and focus on police misconduct. While this case is not one where the police are alleged to have misbehaved, the question of whether a municipality can be held liable for just compensation when the police -- in the course of an otherwise proper pursuit -- destroy property for public use or benefit, is certainly highly related. If police remain immune from civil liability by the qualified immunity doctrine, perhaps the Takings Clause can serve as a check on unconstitutional municipal action?

As for the BIO's contention that there's no lower court divergence of opinion on this question? We think otherwise: customs agents inspect and seize your laptop at the border to check it out but destroy the data on the hard drive? no taking; DEA holds your legal prescription drugs as evidence against a third party but eventually don't use the evidence and return it to you (but by then the drugs have expired)? no taking. But not every jurisdiction goes that way, however.

We will keep following along (Court's e-docket here), of course. Stay tuned.  

Brief for the Respondents in Opposition, Lech v. Jackson, No. 19-1123 (June 3, 2020)

Here's the city's Brief in Opposition in a case we've been following (so closely, in fact, that we filed an amicus brief in support of the property owner - see "Amicus Brief: Invocation Of "Police Power" Is Not Dispositive In Takings"). A case in which the issues have taken on new and heightened importance.

Join Us Next Friday, May 15 (2:30pm ET, 11:30am PT, 8:30am HT): FedSoc Teleforum: "COVID-19 & Property Rights: Do Government Actions in Response to the Coronavirus Pandemic Create Compensable Takings?"

Please mark your calendars for Friday, May 15, 2020 at 2:30pm Eastern Time, for the teleforum sponsored by the Federalist Society's Environmental Law & Property Rights Practice Group, "COVID-19 & Property Rights: Do Government Actions in Response to the Coronavirus Pandemic Create Compensable Takings?"  

The issue: how should courts evaluate the claims for compensation arising out of emergency measures? This question is on the front burner at the moment (and will continue to be because the courts will likely be confronted from these type of claims as the fallout continues). For example, here are some of the complaints that have been filed in courts around the nation: see here, here, here, here and here.  

Please join the program (public welcome). It will be a moderated discussion between two experts in the area, both of whom have been following the issue closely, and who have written about it:

• Professor Ilya Somin (George Mason Scalia School of Law)
• Professor F.E. Guerra-Pujol (University of Central Florida)

Professor Guerra-Pujol recently wrote "The Kelo Case Provides a Strong Legal Argument for Takings Clause Lockdown Compensation," while Professor Somin responded with "No, the Kelo Case Doesn't Require Takings Compensation for Businesses Closed by Coronavirus Shutdown Orders." We wrote up our thoughts in "Evaluating Emergency Takings: Flattening The Economic Curve."

I shall moderate the program. More details on the teleforum here. 

Latest Readings: On Emergency Takings, Compensation For Commandeered Property

It's tough with all that's swirling around all of us to keep focused on non-virus related things. But because we think that's one way to keep calm and carry on, we shall continue to endeavor to do so. But come on, being takings and dirt lawyers we also can't help viewing current events through that lens, no? Consequently, we shall also continue from time-to-time to post about issues that have cropped up in practice that are related to the thing that is on everyone's mind these days.

In that vein, here's the latest on-topic things we've been reading: 

• History: Fire and Blood(worth) - Steve Silva, Taking Nevada blog ("Many argue, with great merit, that when a person’s property is sacrificed to preserve the public health, that the person is entitled to compensation. But the law has not yet reached that conclusion, ... [and] there is no legal mandate that the sovereign must so compensate.").
• Does the Takings Clause Require Compensation for Coronavirus Shutdowns? - Ilya Somin, The Volokh Conspiracy ("Under current Supreme Court precedent, the answer is almost always going to be "no." But some compensation may be morally imperative, even if not legally required.").
• Eugene Kontorovich, Liability Rules for Constitutional Rights: The Case of Mass Detentions, 55 Stanford L. Rev. 755 (2004) ("Another objection to liability rules for constitutional rights is that forced takings of constitutional entitlements may have particularly high "resentment costs." This term refers to the psychological or dignitary cost of having an entitlement forcibly taken.").
• Brad Kuhn (California Eminent Domain Law Report) is holding a web program on April 1, 2020 about "Navigating COVID-19 for the Right of Way Industry" ("We have received a number of questions and concerns from clients on how the current pandemic affects the way we do business, and what to expect going forward. We will be hosting a webinar on April 1, 2020 from 1:00 to 2:00 p.m. PT to bring our industry together (virtually) and help answer as many questions as we can."). 

Here are our own prior posts on the topic:

• The Royal Origins Of "Police Power" Hawaii-Style: The King v. Tong Lee (1880)
• Emergencies, Police Power, Commandeering, And Compensation: Essential Readings
• #CoronavirusLaw: Is There A Difference Between "Commandeering" Property In An Emergency, And "Taking" It?

Steve Silva's post above also got us to thinking about compensation issues also. So we dusted off what we think is one of the more important decisions in the oeuvre, Kimball Laundry Co. v. United States, 338 U.S. 1 (1949). That case, as you recall, involved the wartime long-term but temporary taking by the feds of a going-concern commercial laundry, for use as a military laundry.

The case has often been used to support arguments that business losses that result from an affirmative taking (or commandeering) of property for public use should be compensable. Most jurisdictions, as you know, do not include such losses in "just compensation." In Kimball Laundry, however, the Supreme Court held: 

But when the Government has taken the temporary use of such property, it would be unfair to deny compensation for a demonstrable loss of going-concern value upon the assumption that an even more remote possibility -- the temporary transfer of going-concern value -- might have been realized.

Id. at 15. There's an ongoing debate about whether business losses should be part of just compensation when the government takes property, but does not necessarily take over the business. Is the loss of business just a "consequential" damage, and therefore not compensable? Or should, as others have argued, these losses be part of compensation because the measure of compensation is supposed to be what the owner lost, and not what the taker gained? 

We're certainly not going to resolve that debate in this modest blog post. We only put the case here to add to your reading list because we think that if the government acknowledges that compensation is required for emergency takings or commandeering, the question of just what is compensable is going to take center stage. And on that question, you better know Kimball Laundry. 

Kimball Laundry Co. v. United States, 338 U.S. 1 (1949) 

New Cert Petition (Ours): Must An Owner Whose Land Is Flooded Also Prove "Substantial" Loss Of Use?

US 50 in Nevada - the "Loneliest Road"

Here's the cert petition which we and our Nevada colleague Luke Busby filed today, asking the U.S. Supreme Court to review this Question Presented:

Conflicting with Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982), the Supreme Court of Nevada concluded that to prevail on a physical takings claim a property owner must show that a flood “effectually destroy[ed] or impair[ed] [the property’s] usefulness.”

The question presented is:

To constitute a taking under the Fifth and Fourteenth Amendments, must a physical invasion also destroy or substantially impair an owner’s economically beneficial uses of property?

Rather than summarize the case and the issues, here's the Introduction: 

Physical occupations—as distinctly invasive public uses of private property—are treated by this Court differently than regulatory takings. Although the Court has consistently avoided adopting categorical rules in most takings cases, it has also long-recognized that physical invasions are governed by more bright lines. See Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 322 (2002) (“When the government physically takes possession of an interest in property for some public purpose, it has a categorical duty to compensate the former owner.”) (emphasis added) (citing United States v. Pewee Coal Co., 341 U.S. 114, 115 (1951)).

One of the brightest of the bright line rules is that in cases of physical invasion, the loss of use, if any, is not a part of the takings equation, much less the dispositive factor. Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) is perhaps the most famous example. In that case, the Court concluded that even a de minimis physical occupation—the installation of a tiny cable television box on the roof of the owner’s apartment building—was a taking, even though the box in no way interfered with the owner’s use of her roof or building (and indeed may actually have enhanced her use by providing cable service).

Here, however, the Nevada Supreme Court adopted a contradictory rule that unnecessarily blurred the well-established distinction between physical and regulatory taking, and takings and torts. It concluded that when private property is intentionally flooded by the government, the physical invasion of water must also be accompanied by “substantial injury” to the owner’s economic use of the land. App. 5 (“For a taking by flood water to occur, there must be a physical invasion of flood waters resulting in substantial injury.”). The Nevada court defined “substantial injury” very broadly, as destruction or impairment of a properties’ usefulness. Id. (“For substantial injury to exist, the physical invasion must ‘effectually destroy or impair [the property’s] then usefulness.’ ”) (quoting Clark County v. Powers, 611 P.2d 1072, 1075 n.3 (Nev. 1980)).

In effect, this ruling authorizes the public to use all or a portion of private property as a drainage and storage easement for storm and surface water as long as the owner may use the flooded property at some other time, or some other part of the property for some other purpose besides the County’s intermittent flowage easement.

The Nevada Supreme Court’s ruling wrongly conflates physical invasion takings with regulatory takings, and conflicts with this Court’s precedents and the decisions of other lower courts. This Court should review the judgment of the Nevada Supreme Court.

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

1. Arkansas Game and Fish Comm’n v. United States, 568 U.S. 23, 31 (2012) (“In view of the nearly infinite variety of ways in which government actions or regulations can affect property interests, the Court has recognized few invariable rules.”).

Pet. at 2-3. Stay tuned.

Petition for a Writ of Certiorari, Fritz v. Washoe County, Nevada, No. 19-___ (Mar. 23, 2020) 

Unboxing The 2021 (Scottsdale) ALI-CLE Eminent Domain Conference Swag: Get Yours Today!

Missed out on the 2021 ALI-CLE Eminent Domain and Land Valuation Litigation Conference swag?

Well fear not: here's your chance to get your high-class reminder -- a kit of road warrior essentials -- to save the Conference date on your calendar. We're already underway with planning the agenda and faculty, so it's never too soon to block it off (January 28-30, 2021, at the 4-Diamond DoubleTree Resort, Scottsdale, Arizona). 

If you were not able to get your swag in Nashville, send us a note ([email protected]) and we shall gladly drop one or two in the mail to you.

While supplies last!  

Complaint: Honolulu Sues Gas Companies (For Nuisance) To Recover The Cost Of Sea-Level Rise

Make what you will of this 205-paragraph, 114 page (including 128 footnotes) Complaint, filed yesterday by the Acting Corporation Counsel for the City and County of Honolulu and a battery of outside lawyers against gasoline producers, alleging that they are responsible to pay the costs of sea-level rise and other symptoms of what the complaint calls the "climate crisis."  

It's a challenging read, but the fun part is in the claims for relief (fast forward to page 99), which include (for you property mavens) nuisance, private nuisance, and trespass (by flooding), as well as affirmative and negligent failure to warn of the dangers of fossil fuel products. 

Will this lawsuit go anywhere? Is a big municipal payday in the cards? Will it get to a local jury? Your guess is as good as ours. But we'll be following along, for sure.  

Complaint, City and County of Honolulu v. Sunoco LP, No. 1CCV-20-0000380 (Haw. 1st Cir. Mar. 9, 2020) 

Mass: No Takings Claim For Flooding Because Owner Let It Happen For A Long Time

A super short one (a hair over 4 pages) from the Massachusetts Supreme Judicial Court.

In Gentili v. Town of Sturbridge, No. SJC-12810 (Feb. 24, 2020), the court made short work of a property owner's claim that an earlier Land Court verdict concluding that the town had obtained a prescriptive easement to discharge storm water on the property was a taking requiring compensation. The Land Court concluded that the fact that the town had been discharging the water since 1987 meant that it had gained an easement to do so (think public adverse possession). Instead of appealing the Land Court's conclusion about the prescriptive easement, the owners sued in state court for compensation. 

No deal, held the SJC. The Land Court's order recognizing the easement wasn't a statutory "order of taking." Nor did the easement itself amount to a taking -- even though a discharge of water on someone's land is obviously a physical invasion -- because the owners didn't object to the invasion for a long time (the prescriptive period under Mass law). In short, the owner didn't have "property" that was taken. See slip op. at 3 ("It is this failure [to object], rather than any action by the town, that led to the trust's loss of property rights.").  

Inherent in a government's taking of private property is a right in the property that the government has commandeered; there can be no "taking" if there is no right. In the case of a prescriptive easement, the rights the property owner once had are extinguished to the extent of the easement. Such is the circumstance here. The trust had no basis on which to claim a taking by the town because the town acquired the right to use the property (to discharge storm water onto it) via the prescriptive easement, and the trust lost its right to the property in that regard.

Slip op. at 4. 

You snooze, you lose: no property, no taking. 

Gentili v. Town of Sturbridge, No. SJC-12810 (Mass. Feb. 24, 2020) 

Record Attendance (But There's Still Time For You Last-Minute Filers) At Nashville ALI-CLE Eminent Domain Conference

Picture 1: how normal people see pie.

Picture 2: how you see pie if you're coming to the
ALI-CLE Eminent Domain Conference. 

If you get the above, you probably are already set to join us next week for the 37th Annual ALI-CLE Eminent Domain and Land Valuation Litigation Conference in Nashville. (If not, shame on you!).

And having just reviewed the latest registration list, I can report that we have an all-time record attendance.  But there's still room for those of you still not committed. Register here. Don't miss out. There will be pie. 

(Nearly) Last Chance To Join Us In Nashville For ALI-CLE's Eminent Domain Conference

You can also fly, drive, or bike to the upcoming 37th Annual ALI-CLE Eminent Domain & Land Valuation Litigation Conference. in Nashville. Limited space still available, so don't delay further and register now. We're on track to record attendance, so you don't want to miss the best nationally-focused three-day program on our area of law.

Takings, Knick, compensation, appraisals ... and a bit of fun thrown in. We have many new attendees, and many new speakers, too.  

Space Still Available For ALI-CLE Eminent Domain Conference, Nashville Jan 23-25, 2020

If you get this, you need to attend the 37th Annual ALI-CLE Eminent Domain & Land Valuation Litigation Conference, January 23-25, 2020, in Nashville.

And if you don't get this, you need to attend more. 

Register here. 

CFC: "Calculated" Hurricane Harvey Flooding Is A Taking - But Will Decision Survive Federal Circuit Review?

We won't go into the details of the Court of Federal Claims' opinion and order in In re Upstream Addicks and Barker (Texas) Flood Control Reservoirs, No. 17-9001L (Dec. 17, 2019), since it is 46 single-spaced pages long. You can (and should) read the entire thing. But we shall highlight of a few of the highlights, since this is definitely a case to watch, especially as it progresses to the (inevitable) appeal to the Federal Circuit. 

This is the case in which Texas owners whose property upstream of two government created and maintained dams was intentionally flooded by the Corps of Engineers after Hurricane Harvey sued the feds for just compensation for a taking. The government sought dismissal, but after a 10-day trial, the CFC held the government is "liable for a taking on a flowage easement on the [thirteen test] properties." Slip op. at 3. 

The court summarized the case and issues:

After making landfall in August 2017, Tropical Storm Harvey (“Harvey”) doused Houston with an average of 33.7 inches of rain over a four-day period. Many properties, including over 150,000 homes, flooded during the storm. Those affected included private property owners within the Addicks and Barker Reservoirs, west of Houston, upstream of the federally designed, built, and maintained Addicks and Barker Dams. During Harvey, the Addicks and Barker Dams collected storm water in their respective reservoirs causing properties within the reservoir to flood from the impounded water. At issue in this bellwether trial is the liability of the government under the Tucker Act, 28 U.S.C. § 1491, and the Takings Clause of the Fifth Amendment of the Constitution, for the damage to thirteen of these properties.

Slip op. at 2 (footnote omitted). The Corps of Engineers could have released water from the dams, but doing so would have flooded downstream properties. The U.S. Supreme Court's opinion in Arkansas Game and Fish Comm’n v. United States, 568 U.S. 23, 37 (2012) remains the polestar for flooding cases, and that provided the lens through which the CFC looked at the facts and the law. 

To us, the big issue is the “tort” vs “taking” argument the government put forward but which the CFC rejected. We presume the feds focused a lot of energy on that because of the MR/GO decision in which the Federal Circuit held that omissions by the government are torty not takings-y. While the issues presented are not the same here (indeed, the CFC opinion here doesn't reference the MR/GO decision at all, because this case involved what the court concluded was a "calculated" decision by the Corps to not release water, contrasted with MR/GO which was more about failure to maintain), we think the torty vibe of the government's argument will factor large in its Federal Circuit briefing. 

To us, the most interesting part of the CFC opinion on that issue starts on page 45, “Defenses to Liability.” Especially the “necessity” defense. In short, the government argued that it can be excused from paying for the flooded properties because it was acting in the common and greater good, to protect everyone. This was an "emergency." But the CFC correctly recognized that the necessity defense only works – if at all – in situations where the harm caused was “unavoidable.”

The classic example is when the government blows up homes to create a firebreak when the city is on fire. If the homes blown up to save others’ homes were going to burn down in the fire anyway, there’s no taking according to the courts. As the CFC correctly put it, "'[t]hus, it was not that the government had to respond to Tropical Storm Harvey as an emergency that necessitated the flooding of private land,' but rather that the government had made a calculated decision to allow for flooding these lands years before Harvey, when it designed, modified, and maintained the dams in such a way that would flood private properties during severe storms.” Slip op. at 45. In other words, the government long ago purposefully chose that someone's private property would have to take the hit during severe storms.

To us, this is precisely the situation in which the Supreme Court held that the Takings Clause works to spread the cost over all who benefit, and not concentrate costs solely on the property owners whom the government selects to bear the brunt of the damage. 

While not binding on any other courts, the CFC’s opinion certainly sets out a roadmap that other courts considering similar claims could follow. The Supreme Court’s “takings” doctrine isn’t necessarily one that is easy to comprehend, and this opinion does address it in an understandable way, in our view. The long-term usefulness of the CFC opinion will - as above - turn on whether it survives appellate review by the Federal Circuit, of course, and that takes us to our biggest question (as noted above), whether the decision will survive review by the Federal Circuit, which as you know has been somewhat of a mixed bag when it comes to these type of cases. In the MR/GO case involving Katrina-related flooding in New Orleans, for example, the Federal Circuit overturned the CFC’s takings verdict on the basis that the government’s actions there were more tort than takings. The Supreme Court denied review in that case. We shall see here. 

The CFC also rightly rejected the Government's argument that Texas property is always subject to flood control projects, so the plaintiffs here have no right to be free of flood waters that emanate from such projects. But the CFC concluded that this isn’t some consequential side effect of a flood control project, but the Government making a “conscious decision” to flood Property A instead of Property B (pretty much the same circumstance that was presented in Arkansas Game).  

Finally, one thing that really sticks out to us is the government arguments the CFC rejected (see slip op. at 28, first paragraph for example). Especially the argument that “plaintiffs have no right to be free from invasions because their ownership post-dates the dams’ construction.” Oh my. That type of argument was rejected by the US Supreme Court in Palazzolo v. Rhode Island back in 2001 (you don’t lose property rights simply by obtaining property subject to regulatory restrictions), yet governments nationwide continue to make this very argument. Until the Supreme Court weighs in (again) to clarify, expect this to continue.  

This opinion isn't the last we're all going to hear about this case, so stay tuned.

Order and Opinion, In re Upstream Addicks and Barker (Texas) Flood Control Reservoirs, No. 17-9001L 

California's "Well-Seasoned" Inverse Condemnation Strict Liability Principle Not Set Aside By PG&E's Bankruptcy Court

Here's decision we've been anticipating in a case and issue we've been following for a while, the question of whether private utilities can be held liable under an inverse condemnation theory for much of the damages caused by the recent California wildfires. 

Short story from the Northern District of California Bankruptcy Court: yes, private utilities can be liable in inverse condemnation:

What Debtors advocate here is to set aside a well-seasoned principle of strict liability. Failing that, they are seeking a solution, fire cost reimbursement, in search of a problem, CPUC’s refusal or unwillingness to allow recovery by a blameless (prudent) investor-owned utility. As noted, they cite no instance when the CPUC denied inverse condemnation cost reimbursement to a prudent operator. And it is the role of the legislative branch, not the judicial branch, to fix problems in advance. As recently as this past July, the California legislature refused Debtors’ request to restrict inverse condemnation. There is simply no reason to suggest that this court can expect the California Supreme Court to step up and do it. If the problem could be alleviated or eliminated by an amendment to the Public Utilities Code to relax or eliminate the prudent operator standard, that too is for the legislature not the court.

. . . 

Thus, this court concludes that the doctrine of inverse condemnation is applicable to Debtors and the California Supreme Court would likewise leave it in place.

Slip op. at 10-11. 

A little context might help. PG&E argued that it was unconstitutional under the Fifth Amendment to hold it liable pursuant to California law for inverse condemnation unless it could automatically pass on the costs of any judgments to its "public" (ratepayers). After all, it correctly asserted, the guiding principle of takings liability is to ensure that the costs of those things deemed to be in the public interest are not placed on a single property owner whose property is to be used for the public, but are distributed among all those who benefit. See Armstrong v. United States, 364 U.S. 40, 49 (1960) ("The Fifth Amendment's guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole."). PG&E argued that governments spread the costs of inverse condemnation judgments indirectly though taxation, so private entities subject to inverse liability are entitled by the U.S. Constitution to the same power.

Under California law, however, a private utility such as PG&E cannot raise its rates without the approval of the state Public Utility Commission, and then only after the PUC concludes that the utility acted as a "prudent manager." As the bankruptcy court noted, "[e]ssentially, the CPUC evaluates a private utility’s behavior to ensure that it has comported with best practices before it is able to pass on costs to the ratepayers." Slip op. at 5. PG&E pointed out that in an earlier ruling in another case involving a southern California utility, the PUC had concluded that the prudent manager standard isn't part of the inverse condemnation calculus, and denied that utility the ability to raise its rates to alleviate the cost of wildfire inverse judgments. This, PG&E argued, showed that -- unlike governments -- it could not automatically pass on inverse costs. Lacking that power, California's inverse condemnation liability is a taking of PG&E's property (to transfer to the wildfire victims) without just compensation. 

The bankruptcy court soundly rejected the argument, primarily because even though PG&E could not pass on costs automatically, it hasn't shown that it would be denied a rate increase by the PUC. Here's what we think are the two key passages in the decision which highlight the court's rationale. First:

Debtors assert that this regulatory process now severely prejudices them because the SDG&E Decision deemed inverse condemnation “not relevant” to rate setting, and thus Debtors are not guaranteed the ability to pass on their inverse condemnation losses by recovery from ratepayers. Id. at 20-21. Nothing has been submitted to show that Debtors have ever been denied cost recovery under this principle when they have been found prudent.

Slip op. at 5. Second:

First, Debtors seem to misread the SDG&E Decision regarding inverse condemnation. The case merely restates that the prudent manager standard operates without regard to inverse condemnation or traditional tort negligence. It does not state that inverse condemnation costs will never be passed on to ratepayers. In fact, the prudent manager standard virtually guarantees cost spreading if the utility acted prudently, which is a far more lenient standard than strict liability. Thus, Debtors are likely guaranteed cost spreading if they act prudently. In any case, as Debtors have yet to ask the CPUC for permission to raise rates as a result of the Wildfires, this amounts to speculation of how the CPUC will act. Debtors’ argument does not offer a datum to predict a California Supreme Court decision here.

Slip op. at 10. 

In short, just because the PUC has concluded that inverse condemnation doesn't require a rate hike, PG&E might be able to obtain a rate hike if it shows it acted as a prudent manager. 

More on the decision from JD Morris (San Francisco Chronicle) in this story, "PG&E loses gambit to avoid California’s inverse condemnation rules," and this one "PG&E Loses Fight Over Wildfire Policy That Led to Its Bankruptcy" from Bloomberg.

The bankruptcy court will shortly certify the issue for immediate appeal to the Ninth Circuit, and given the high stakes and the players involved, we expect that is exactly what will happen. Stay tuned. 

Memorandum Decision on Inverse Condemnation, In re PG&E Corp., No. 19-20077-DM (Bankr. N.D. Cal. Nov. 27, 2... 

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!

Marketplace Morning Report On Today's Bankruptcy Court Arguments: Is California's Inverse Condemnation Rule Itself An Inverse Condemnation Of PG&E's Property?

We contributed to Marketplace's Morning Report (stream above, or visit this link), and its brief discussion of the California wildfire and inverse condemnation situation, "PG&E tries to get out of its financial responsibility to those affected by west coast fires." That portion of the broadcast begins at the 1:57 mark. 

Today's the day that a U.S. Bankruptcy judge will hear arguments about whether holding PG&E and other private utilities which possess the power of eminent domain potentially liable under California's version of inverse condemnation, itself is a taking under the Fifth Amendment because the utilities do not have the ability to spread the costs of any such judgments to their ratepayers automatically. More on the argument (including the brief) here. The claim is made that the purpose of condemnation is to make sure that the costs of public projects are not borne by individual property (correct, see Armstrong v. United States, 364 U.S. 40 (1960), and that government has the power to tax and therefore spread the cost of inverse judgments automatically (we're not on board with that one because we can think of government agencies which are also subject to inverse condemnation liability that do not have the automatic power to tap into taxes).

So let's see what the judge does today. (Also contributing to the Morning Report discussion was lawprof Shelley Ross Saxer).

Register Now! ALI-CLE Eminent Domain And Land Valuation Litigation Conference (Nashville, Jan 23-25, 2020)

Registration underway, so come join us! Agenda full of hot topics in takings and appraisal law! The best national faculty! Renew friendships, and make new colleagues! And Nashville! 

Download the brochure and make your plans for January. (Don't wait, we've sold out the past three years.)

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. 

Cal Supreme Court: Stop Saying Inverse Condemnation Is "Strict Liability"

The California Supreme Court's relatively short unanimous opinion yesterday in City of Oroville v. Superior Court, No. S243247 (Aug. 15, 2019) may have a bigger impact outside of that case than within in.

While that is undoubtedly true in many decisions by a precedential court of last resort, we highlight that here because inverse condemnation is a trending topic in California right now due to the multiple litigations spawned by a series of wildfires, and the City of Oroville case is all about the details of California's somewhat unique inverse condemnation doctrine.  

Short story is that a dentist's office flooded with you-know-what when the municipal sewer backed up. Dentists said the City didn't maintain the sewer (sewer systems are supposed to take crap away in a one-way direction, not return it into habitable spaces). The City for its part argued that if the dentists had only installed the "legally-required backwater valve" none of this would have happened (the valves are required as part of the City's plumbing code).

The dentists raised an inverse condemnation claim. The Court of Appeal agreed, holding the City liable. But the California Supreme Court agreed to review the decision because "[t]he appellate court reached this decision without addressing a fundamental question: whether the inherent risks associated with the sewer system -- as deliberately designed, constructed, or maintained -- were the substantial cause of the damage to the private property." Slip op. at 1. 

And here's the Supreme Court's bottom line:

Public entities are not strictly or otherwise automatically liable for any conceivable damage bearing some kind of connection, however remote, to a public improvement. To succeed on an inverse condemnation action, a plaintiff must ordinarily show — assuming the public entity made reasonable assumptions about the public improvement in question –– that the damage to private property was substantially caused by inherent risks associated with the design, construction, or maintenance of the public improvement.

Slip op. at 1-2. 

We've heard California's inverse condemnation jurisprudence described as a "strict liability" scheme. Governor Newsom, for example, said, "[w]e are committed to continuing the exploration of the impact of strict liability on the costs to ratepayers, on wildfire victims and on the solvency of our utilities. If the trend of massive, catastrophic wildfires persists, we may need to pursue additional changes." But this decision should make it clear that this is a misnomer. 

Because the installation of the backwater valve "would have prevented or drastically mitigated the risk of damage" and was "legally required," the dentists could not make out a claim for inverse condemnation. The court awarded the City judgment as a matter of law (not merely vacating the judgment and sending it back for more). 

Read the opinion. It isn't that long (24 pages) and see if you don't think there's a "torty" flavor to it. The court talks of "primary causation," "inherent risk," and the like. (The trial court concluded that the backup was primarily caused by root intrusion, but that a "significant secondary cause of the damage" was the lack of a backwater valve which had, unbeknownst to the dentists, not been installed in their building when constructed before they bought it.) See also slip op. at 9 ("To resolve inverse condemnation claims and the causal questions they raise, courts have garnered insights from tort and property law doctrines relevant to analogous disputes between private parties."). 

The Supreme Court rejected the court of appeal's analysis that focused on the City's failure to prove that "other forces alone produced the injury." Slip op. at 6. The appeals court likened the City's argument to contributory negligence in tort law (to us it reminded of the "last clear chance" doctrine). Inverse condemnation isn't really a cause of action, "but instead a remedy for an already-existing cause of action." Slip op. at 9. The public has a responsibility to justly compensate owners "for those damages to private property resulting from the construction of a public improvement." Id. ("Common law doctrines may offer a useful analogy, but the roots of inverse condemnation liability lie in constitutional terrain rather than the common law.").

In some cases, the court concluded, the applicability of the remedy is easy to see: construction of a water system, flood control levee, or street construction, for example. But other situations like here are not as clear (at least according to the court). In those situations, the court sought to balance between the Armstrong principle (the cost of public benefits should not be focused on particular owners, but spread across the public), and the notion that public entities would be "discouraged from providing essential public works projects" if they are held liable to pay when the property owner could have prevented the damage by complying with the law (installing a backwater valve). Slip op. at 11. 

We encourage you to read at least from page 10 onward. This isn't tort even though it might look a lot like it. Slip op. at 12 ("To mitigate confusion, we restated this test to eschew the term 'proximate.' What we used instead was the term '''substantial' causation.''). To establish that causation, the owner must prove a "robust" nexus between the inherent risks of the public improvement and the resultant damage. Yes, the owner need not prove the improvement was the sole cause of the damage and was merely a factor, but it has to be significant and a risk inherent in the design of the improvement, and not the way it was maintained (that aspect, presumably, could be considered in tort). The court concluded:

Our conclusion follows from what we explained in Customer Co. and Holtz: a court assessing inverse condemnation liability must find more than just a causal connection between the public improvement and the damage to private property. What we hold is that the damage to private property must be substantially caused by an inherent risk presented by the deliberate design, construction, or maintenance of the public improvement. This approach aligns with how we have previously analyzed inverse condemnation liability cases. It also protects private property owners by allocating the financial losses resulting from the public improvement across the community and provides public entities with an incentive to internalize the reasonable risks of their public improvements.

Slip op. at 14.

The remainder of the opinion is about how to apply these standards. The damage must be the "predominant" result of the improvement. "Inescapable or unavoidable consequence," as the court put it. And part of that calculus is the plaintiff's contribution to the damage. Compliance with the plumbing code is one of those things. "To prevail on its claim of inverse condemnation liability, then, WGS must ... demonstrate that the inherent risks posed by the sewer system as deliberately designed, constructed, or maintained manifested and were a substantial cause of its property damage." Slip op. at 18-19. Is not root intrusion an inherent risk of a sewer system? Yes, but that doesn't mean that mitigation isn't part of the equation. "Contrary to WGS's contention, Belair did not announce a rule triggering liability in all inverse condemnation cases based solely on the existence of any conceivable causal connection between a public improvement and private property damage." Slip op. at 19. 

In short, inverse condemnation isn't "strict liability." 

Instead, a court reviewing an inverse condemnation claim arising from sewage overflow must consider whether the damages to private property were the direct and necessary effect of the inherent risks posed by the public improvement as deliberately designed, constructed, or maintained. And in a case like this, a reviewing court must also assess whether the damages were the result of a risk created not by the public improvement, but by the acts of the private property owner. A causal connection between the public improvement and the property damage alone is insufficient to sustain a finding of inverse condemnation liability.

Slip op. at 20-21.

How this standard plays out in the wildfire cases we shall be watching. But we guarantee you that every lawyer involved in those cases is reading this opinion very carefully right now.  

City of Oroville v. Superior Court, No. S243247 (Cal. Aug. 15, 2019)

Upcoming Free Program: "When the Floods and Fires Come: Landowner's Property Damage Claims"

Mark your calendars for Thursday, August 22, 2019, 2 - 3pm ET, for a free ABA program, "When the Floods and Fires Come: Landowner's Property Damage Claims." This session, produced by the Section of Litigation and organized by our Damon Key colleague Mark Murakami. Featured speakers are our colleagues Anthony Della Pelle (NJ), Kristen Renfro (CA), and Pepperdine lawprof Shelley Saxer (CA).

Here's the description:

In the wake of the Superstorm Sandy, the 2017 hurricanes, and the California wildfires, landowners damaged by the disasters are faced with a confusing array of potential recovery options. This program is designed to assist small and general practice attorneys whose clients are harmed by these disasters. Anthony Della Pelle, Esq. of New Jersey and Kristen Renfro, Esq. of California will discuss the practitioner's views and Professor Shelley Saxer of Pepperdine Law School will discuss the legal theories relating to governmental and public utility liability for these claims.

Register here, then join the session next week.  

Get Ready - ALI-CLE Eminent Domain And Land Valuation Litigation Conference, Nashville Jan. 23-25, 2020

Details soon. In the meantime, get your earlier registration discount.

New Cert Petition: Fifth Amendment Requires California To Spread The Cost Of Wildfire Inverse Condemnations To Ratepayers

Remember that Christopher Nolan movie from a few years ago, "Inception," with its dream-within-a-dream storyline?

Well, that's what a recently-filed cert petition which asks the U.S. Supreme Court to jump into California's inverse-condemnation-liability-for-wildfires issue reminds us of with its taking-within-a-taking argument, as detailed in the Question Presented:

Whether it is an uncompensated taking for public use in violation of the Fifth and Fourteenth Amendments for a State to impose strict liability for inverse condemnation on a privately owned utility without ensuring that the cost of that liability is spread to the benefitted ratepayers.

Let's see if we are keeping the argument straight: it's a taking to hold a private entity which possesses the delegated power of eminent domain liable for a taking for burning down private property unless the utility is also entitled to pass the cost of any taking judgment on to those who benefit from the utility's services. Like Inception, there's a lot to unpack there.

Under California law, a utility company with the power of eminent domain (such as San Diego Gas & Electric) can be liable under an inverse condemnation theory if it can be shown that "any actual physical injury to real property" was "proximately caused by [a public] improvement as deliberately designed and constructed" by the utility, whether or not foreseeable. Two California intermediate appellate courts have applied that general rule to wildfires, even though California's Supreme Court has not.

The petition is premised on what we call the "Armstrong" principle because the case everyone cites for it is Armstrong v. United States, 364 U.S. 40, 49 (1960), where the Court held, "[t]he Fifth Amendment's guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole."

Applying that principle in cases where the inverse condemnor is the government itself (which has the taxation power) or a publicly-owned utility (which can raise rates without getting PUC permission), does not raise big questions because the "public" which pays for the taking, and the "public" which benefits from the taking are one and the same. But where the inverse condemnor is a "investor-owned utility," that dynamic seems different for a couple of reasons.

First, when government inversely takes property and the taxpayers have to pick up the tab, the net result is a wash: the same people who benefit are also the ones paying the judgment. But when it comes to a private utility, who is the "public as a whole," the utility's shareholders or its ratepayers? And to whom does the benefit from the taking flow? The Question Presented assumes that ratepayers alone are the ones benefited, but don't the utility's investor-shareholders also benefit from the taking?  

And that brings us to the second point: we've always viewed Armstrong as more about the the fairness to the owner whose property was taken (by not forcing them to shoulder the entirety of the economic impact of a public benefit), than it is about how and to whom the condemnor distributes the costs. Holding utilities which have the power of eminent domain under a takings theory liable when they invade and damage private property seems like one of the consequences of them wielding a sovereign government power. After all, when SDG&E affirmatively takes property by eminent domain, can it distribute the cost to its ratepayers without getting approval for a rate increase from the PUC? And if the PUC says no and the utility's shareholders have to eat it, does that mean the taking lacks a public use or benefit? It doesn't seem so (or at least we're not aware of any private utility backing off an exercise of delegated eminent domain power simply because shareholders pay for the taking). 

Follow the case on the Court's docket here. 

Petition for a Writ of Certiorari, San Diego Gas & Electric Co. v. Cal. Public Utilities Comm'n, No. 18-136...

Webinar Today - Low Income Populations: Underrepresented Socially, Overrepresented as Victims of Natural Disasters

Later today (starting at 1pm ET), our colleague Edward Thomas is chairing an ABA-produced webinar on "Low Income Populations: Underrepresented Socially, Overrepresented as Victims of Natural Disasters: Using the Law to Solve a Serious Problem."

As in other areas of life, when natural disasters strike, it is often the owners of modest means who are the hardest hit. Floods, wildfires, sea level rise, you name it. And Ed has been there: he's a former FEMA guy, and currently the President of the Natural Hazard Mitigation Association who understands that property rights have to be respected in these situations. 

Find out more information about the program and register here. 

SF Chronicle: "California's strict wildfire liability rule hangs over bankrupt PG&E"

JD Morris has the story at the San Francisco Chronicle, "California's strict wildfire liability rule hangs over bankrupt PG&E."

The story is about inverse condemnation of course, and how California law applies that doctrine in cases involving what look like natural disasters, most notably the state's recent experiences with major wildfires.

We provided comments on whether an insurance fund might make some sense (because isn't the mail goal of inverse liability to spread the economic burden of public benefits?). And the story also picks up on the recent 2-1 Ninth Circuit decision on how inverse claims which have not been reduced to judgment get treated in bankruptcy: 

The wildfire fund alternative Paulo identified could be evaluated by a new committee focused on wildfires and utilities that was authorized by Dodd’s bill, SB901. Gov. Gavin Newsom appointed his three members to the committee just last month, and Dodd said it “absolutely” makes sense for them to study the issue.

Such a fund could accomplish the same goal as inverse condemnation by providing a source of funds for a utility to draw on to make victims whole when power lines cause fires through no negligence on the company’s part.

“The express goal of inverse condemnation is to put the owner back into the financial condition they would have been in had the inverse condemnation not occurred,” said Robert Thomas, a Hawaii lawyer who writes a blog on the topic at www.inversecondemnation.com. “It’s simply a cost-spreading device. ... Insurance seems like, if it were to achieve that same thing, then at least in theory it sounds like something that could be workable.”

PG&E might even find a way to bring up inverse condemnation in bankruptcy court, Thomas said. He pointed to a recent opinion from a Ninth U.S. Circuit Court of Appeals panel in a case involving an inverse condemnation claim and the city of Stockton’s bankruptcy. [See this post for more on that case.]

In a 2-1 decision, the appeals court in San Francisco held that Stockton could treat a certain inverse condemnation claim just like any other unsecured claim in its bankruptcy case, putting it toward the back of the line and allowing the city to jettison the debt. Thomas said the case, which involved a land dispute, has some parallels to PG&E’s situation.

But Douglas Baird, a law professor at the University of Chicago, said he doesn’t think the case will prove decisive on how wildfire victims are treated in the PG&E bankruptcy.

“The effect of the Ninth Circuit’s majority opinion is they’re just saying these are ordinary, unsecured claims in bankruptcy that can be discharged,” Baird said after reviewing the opinion. “But they’re not saying that somehow they’re unusually low” priority.

Check out the entire piece here. 

Cal Supreme Court Denies Review Of Wildfire Inverse Petition

A short update from the west coast: the California Supreme Court late last week denied discretionary review in the case in which a California utility was arguing that it cannot be liable under that state's version of inverse condemnation because the utility, unlike a governmental entity, cannot automatically spread the cost of any judgment to all members of its constituency.

We posted the utility's petition here ("Electric Company: We Can't Be Liable For Inverse Condemnation For Cal Wildfires Unless We Can 'Unilaterally Recoup Costs From The Benefited Public Through Taxation Or Rate Increases'").

There are other cases raising the same issue coming up the pipeline, so stay tuned for more. 

Wish You Were Here: Links From Day 1, 2019 ALI-CLE Eminent Domain And Land Valuation Litigation Conference

Here is our annual "proof of life" photo, taken from the dais during the opening session, to prove that all 250 of us were in the room for the ALI-CLE Eminent Domain Conference, and not out on a Palm Springs golf course (it is 72º and sunny, so a golf course would not be a bad place to be).  

Here are the links from our talk this morning (along with Amy Boulris) about the latest issues to watch in eminent domain:

• NJ Appellate Division: "take now, decide later" will not support redevelopment necessity. Unless there's "linkage." 
• Louisiana Court of Appeals with two points for condemnors: (1) don't name your project the "Megaproject," and (2) don't let your Executive Director testify that but for the Megaproject needing the property, the local government would not have condemned it. If you do, don't be surprised the court views the taking with a jaundiced eye.
• Quick takes by Rule 65 preliminary injunctions: Third Circuit joins the growing circuit split on whether private condemnors under the federal Natural Gas Act can acquire early possession of property, even though Congress in the NDA did not delegate the condemnors the Quick Take power. Our amicus brief which details why we think this is wrong. 
• In these federal takings, does state or federal law provide the rule of decision on compensation (and damages)?
• Violet Dock Port: for "unique" property, the Louisiana Supreme Court concludes that fair market value isn't the only measure of just compensation. Replacement cost evidence is admissible.
• "Property" rights in a clean and pure environment. The Hawaii Supreme Court concludes the state constitution's provision gives right to a due process property right. But the D.C. Circuit concludes that Pennsylvania's similar constitutional provision does not give rise to an enforceable right, because you can't exclude others from a clean environment.
• The Uniform Relocation Act and the Pirate's Code: (the URA is merely "guidelines," and does not give rise to a private right of action by a property owner). 
• Who gets paid: owner at time the court issues order of possession, or the owner at the time the condemnor actually possessed? If you said the former, you'd agree with the Nevada Supreme Court. 

Here are some other cases we didn't have time to cover, but which you may find of interest:

• Ninth Circuit (2-1) concludes that inverse condemnation judgment which has not been reduced to judgment can be discharged in bankruptcy. 
• Virginia Supreme Court: the term "and" really means "or" in Virginia's precondemnation entry statute. 
• Iowa Supreme Court considering whether the PUC's determination of public convenience also determines whether a taking is for public use. 

Below is a "reverse" view of the opening session, taken from the audience's perspective. Great crowd, a record number (again). 

Finally, if you are here attending, please stop me and say hello. 

Electric Company: We Can't Be Liable For Inverse Condemnation For Cal Wildfires Unless We Can "Unilaterally Recoup Costs From The Benefited Public Through Taxation Or Rate Increases"

Here's the Petition for Review we've been waiting to drop since last week's ruling by a California Court of Appeal declining to review the California PUC's decision to turn down the electric company's request for a rate increase to cover the compensation and damages that it must pay as the result of a southern California wildfire. 

Recall that under California law, a utility company with the power of eminent domain (such as San Diego Gas & Electric) can be liable under an inverse condemnation theory if it can be shown that "any actual physical injury to real property" was "proximately caused by [a public] improvement as deliberately designed and constructed" by the utilty, whether or not foreseeable.

Two California intermediate appellate courts have applied that general rule to wildfires, even though that state's Supreme Court has not.

The petition argues that the two court of appeal opinions turn on the notion that an inverse condemnor may spread the cost of the public benefit (operating the utility) to the public itself as a matter of right. But, the petition argues, by making it discretionary by allowing the PUC to determine whether a utility can obtain a rate increase based on whether the utility was prudent -- and then turning the requested rate increase down, like the PUC did here -- violates the essential principle behind inverse condemnation.

What we call the "Armstrong" principle because the case everyone cites for it is Armstrong v. United States, 364 U.S. 40, 49 (1960) ("The Fifth Amendment's guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.").

And to deprive a utility of its ability to spread the costs automatically, would also itself be a taking, according to SDG&E's petition.

A San Francisco trial judge has rejected these arguments in a separate case because the utility in that case had not yet shown that it was categorically barred from cost spreading via a rate increase, but we think the SDG&E petition is the first one to make it up to the Cal Supreme Court. 

Very interesting petition and arguments, crafted by very capable counsel. We shall follow along and update when there's a response. Stay tuned. 

Petition for Review, San Diego Gas & Elec. Co. v. Public Utilities Comm'n, No. S___ (Nov. 26, 2018)